Janata Bank a nationalised commercial bank established under the Bangladesh Banks (Nationalisation) Order 1972. The bank was created by taking over the branches of two abandoned Pakistani banks-the United Bank and Union Bank, which functioned in East Pakistan. With its head office at dhaka, the bank started its operations with an initial authorised capital of Tk 50 million and paid up capital of Tk 10.5 million. The authorised capital was raised to Tk 30 million in 1973. Since then the authorised and paid up capital remained unchanged till December 1983. Later, both were increased from time to time and their amounts stood at Tk 8 billion and Tk 2.594 billion respectively on 31 December 2000. The reserve funds of the bank on that date were Tk 367 million.

In addition to traditional deposit taking in various accounts and providing loans to almost all sectors of the economy, the bank offers different types of other services and conducts 'off-balance sheet (OBS)' activities. The value of assets created by the OBS activities of the bank was Tk 26.07 billion in 1998 and Tk 25.46 billion in 2000. The agency services of the bank include making payments to different public sector corporations and acting as paymaster in the government's food procurement scheme. The bank provides loans and advances to not only the clients of selected groups like the traders and industrialists but also to people of all classes and professions. Side by side with industry and commerce, agriculture and other priority sectors also receive funding and advisory services support from the bank. Janata Bank disburses government grants to the teachers of private and public educational institutions.

The bank and a good number of non-government organisations jointly implement various poverty alleviation programmes. The income generating and economic development projects for the socio-economic development of the rural and urban poor financed by the bank include the Small and Landless Farmers Development Project, Swanirvar Programme, Crop Diversification Project, Rural Poor Programme and Group-based Savings and Credit Programme.

Janata Bank has a large participation in foreign exchange business including overseas remittance services. The total volume of foreign exchange business handled by the bank in servicing imports and exports and remittances during 1999-2000 amounted to Tk 40.312 billion. In 2000, the bank had correspondent relationships with 1,180 foreign banks/bank offices.

In 1972, Janata Bank started its banking operations with a total initial deposit of Tk 1.57 billion. Ever since the bank has been making continuous and sustained efforts to mobilise deposits from untapped resources in both urban and rural areas. A special deposit mobilisation programme introduced by the bank in 1976 resulted in remarkable increases in the volume of its deposits, which grew at a rate of approximately 63% and 42% during 1972-74 and 1978-80. The deposits growth rate in 2000 was 8.2%. The volume of loans and advances of the bank was Tk 1.13 billion in 1972 and it increased to Tk 5.28 billion in 1984. Major areas that received financing from the bank were jute trade, jute industries, tanneries, sugar industries, textile trade and industries, transport, iron and steel, tea plantation and trade, livelihood trades/income generating activities and housing.

The credit portfolio of the bank expanded manifold after the 1980s and covered almost all sectors of the economy. The bank was a major participant and a provider of funds in the Tk 10 billion Special Agricultural Credit Programmes (SACP) launched by the government in 1977. The total amount of its loans and advances stood at Tk 80.95 billion in 2000. Loans and advances provided by the bank to the broad economic areas up to 30 June 2000 were: agriculture and fisheries - Tk 4.362 billion, industry (small and cottage, and large and medium) - Tk 32.352 billion, retail/wholesale trade and hotels and restaurants - Tk 5.215 billion, transport & communication and storage - Tk 331 million, special credit programmes including poverty alleviation - Tk 1.698 billion and others - Tk 18.862 billion.

During 1999, Janata Bank disbursed Tk 16.383 billion in loans and advances and the recovery during the year was Tk 4.541 billion. In 2000, the recovery rate was 20% of total outstanding loans. The amount of overdue loans and advances on 30 June 2000 was Tk 27.34 billion and on 30 June 2000, the ratio of total overdue to total outstanding loans was 37.12%. Poor loan recovery and the increase in the amount of overdue loans caused a fall in the quality of its lending assets. The bank's total classified loan amounted to Tk 23.63 billion on 31 December 2000.

Up to December 2000 the bank's loans to the public sector were Tk 15.9 billion, of which Tk 2.15 billion was classified. 19.6% of the bank's total loans and advances went as borrowings to the public sector enterprises. Up to the same date, the bank disbursed Tk 5.603 billion as rural credit including microcredit. On the other hand, the bank borrowed Tk 2.16 billion in 1998 and Tk 2.08 billion in 2000 from the inter-bank market. The credit-deposit ratio of the bank was 77.95% in 2000. On 31 December 2000, the liquid assets of the bank were valued at Tk 36.22 billion.

In 1999, the interest rate offered by the bank on savings deposits in both rural and urban areas was 7.5%, while the rates charged by it on loans in different sectors averaged 12.65%. On 31 December 2000, the total and net incomes of the bank were Tk 9.25 billion and Tk 829.2 million respectively. However, an increase in the volume of classified loans weakened the quality of the bank's assets. An increase in operating and interest expenses of the bank slowed down the rate of growth of its total incomes in 1999-2000.

Janata Bank monitors its work through a performance budget. It has a marketing intelligence unit and conducts a programme of human resources development through training and motivation. It introduced the Lending Risk Analysis suggested by the Financial Sector Reform Programme. Business policies of the bank in the 1990s included fulfilling capital adequacy requirement, mobilising deposits in large amounts, and making investments in more profitable ways. The bank diversified its activities in off-balance sheet items to expand its area of operations and increase non-interest based incomes.

The management of the bank is vested in a 7-member board of directors appointed by the government. The managing director is the chief executive and he is assisted by a deputy managing director, six general managers and other senior executives. The general managers are in charge of the bank's branches in six administrative divisions of the country namely, Dhaka, chittagong, rajshahi, khulna, sylhet and barisal. At the head office, the bank has 27 departments including a training institute. On 30 June 2000, the bank had a total of 17,138 employees. Up to 31 December 2000, the bank had 894 domestic and 4 overseas branches (in the Middle-East). Among the domestic branches, 348 were in the urban areas and 546 in the rural areas. [S M Mahfuzur Rahman]