Analytical Report on Overall Activities of ICB : A Case Study of Rajshahi Branch

CHAPTER-ONE
Introduction
1.1 What is internship? Internship means practical training through attending the particular work physically. Practical training means a way through which a person or a trainee can gather experience about the related subject practically and be able to apply his theoretical experience in the field of real life action. Practical training paves the way for gaining practical knowledge through activities other than reading textbooks and attending formal academic courses. Practical training is necessary to achieve complete knowledge about something. Internship program is a form of practical training. I firmly believe, practical training can open the inner eyes of a man. The works conducted during the Internship Program will expand the horizon of our practical knowledge. For the students of MBA of the Department of Finance and Banking internship is an academic requirement. For the internship every student is required to work in a selected institution to enhance his practical experiences. The internship is managed and supervised by a supervisor who is a teacher of the department. For my internship, I was sent to the Investment Corporation of Bangladesh under the supervision of Sohel Rana, Assistant professor, Department of Finance and Banking, University of Rajshahi. My topic was An Analytical Report on Overall Activities of ICB A Case Study of Rajshahi Branch" I have done a fifteen working days Internship Program from May 30, 2006 to June 19, 2006 in the Investment Corporation of Bangladesh (ICB), Rajshahi Branch. 1.2 Objectives of Internship The objectives of internship concern so many things. To be specific, the objectives of the internship program undertaken by department of Finance and Banking, University of Rajshahi area as follows: Classification of and familiarity with the selected institution. It helps the trainee to know the institution as a national organization contributing to the economic development of the country. It provides the opportunity for the trainee to see how the theories he learnt from academic lessons are applied in the practice of real life. It helps him to evaluate the relationship existing among cost, volume and profit of the selected institution. It teaches the trainee to be able to identify various problems of the institution and ways of solving them. It prepares the trainee for the future challenges of modern business world. 1.3 Importance of Internship Internship program is the great importance and significance under the circumstances of the present competitive business world. Its importance is gradually increasing due to the development and expansion of industries. Industries are the main elements of production and

1) 2) 3) 4) 5)

supply of consumer goods; Business industries need highly skilled personnel for proper functioning. Internship prepares the trainee for the tough job conditions and future challenges of business activities. The trainee learns how to adapt himself in situations quickly and how to work in a team environment. Internship increases the interpersonal communicate skill of the trainee as it introduces the functioning of corporate institutions. In addition internship helps a trainee to fulfill his practical knowledge and makes him fit for important jobs. 1.4 Chapter Plan of the Study This report is written to serve the purpose of "Internship Report" for the MBA program of the assigned student in the Finance and Banking,University of Rajshahi. The author of this paper was assigned for a fifteen working days Internship Program as partial fulfillment of the requirement for the degree of MBA in Department of Finance and Banking, R.U. The selected enterprise was Investment Corporation of Bangladesh (ICB). ICB is a unique name in our country as an investment bank. It has skilled and experienced professionals and dedicated management team who are motivated to pursue the goals of ICB. ICB has played a very significant role in developing the capital market of Bangladesh. The primary or central focus of this study is An Analytical Report on Overall Activities of ICB of Rajshahi Branch. The report is divided into five chapters. These are: Chapter-1 Chapter-2 Chapter-3 Chapter-4 Chapter-5 : Introduction : An Overview of ICB : Activities of Different Department of ICB : An Overview of ICB, Rajshahi Branch : Findings of the study

CHAPTER-TWO
An Overview of ICB
2.1 Introduction

The Investment Corporation of Bangladesh (ICB) was established on October 1, 1976 under the Investment Corporation of Bangladesh Ordinance (No. XL of 1976) to encourage and broaden the base of investments, develop the capital market and mobilize savings and to provide for matters ancillary thereto. It is involved in stock underwriting, stock trading, portfolio management, operating mutual funds both openended and close ended. The establishment of ICB is a major step in a series of measures undertaken by the government in the past years to accelerate the pace of industrialization. The re-creation of ICB has met the long felt need to provide institutional support to meet the equity gap of the industrial enterprises in absence of which the process of industrialization in the private sector was slowed down. Through the enactment of the Investment Corporation of Bangladesh (Amendment) Act, 2000 (XXIV of 2000), space of ICB's activities through the formation and operation of subsidiary companies has been expanded.

2.2 Historical Background of ICB

After liberation in view of socio-economic changes the scope for private sector investment in the economy was kept limited by allowing investment in projects up to Tk. 25 lacs. The new Investment Policy which was announced in July, 1974 provided for an expanded role of private sector by allowing investment in a project up to Tk. 3 crores. This ceiling has further been raised to Tk. 10 crores. In spite of the adequate facilities an incentives provided to the private sector, encouraging response was not forthcoming. One of the reasons, among others, was the lack of institutional facilities which provided underwriting support (like from ICP) to industrial enterprises which was required to raise the much needed equity fund. Thus the need for re-activation of capital market/stock market was keenly felt. In the revised investment policy which was announced in December, 1975.Government announced its decision to reactivate the stock exchange and examine the question of re-creation of Investment Corporation of Bangladesh. Accordingly, a committee of officials examined the matters and recommended for recreation of ICB.

To encourage and broaden the base of investments. To develop the capital market. To mobilize savings. To promote and establish subsidiary for business development. To provide for matters ancillary thereto.
2.4 Sources of Capital

2.3 Main Objectives of ICB

Every organization collects funds from several sources. It may be internal sources or externals. In case of Investment Corporation ofBangladesh, its main sources of capital is Paid-up Capital, Reserves, Retained profit. However, the corporation is authorized to borrow fund from Government and other agencies including International Agencies both in local and foreign currencies.
2.5 Capital Structure

The present capital structure is given to following Table No 1: As on 30 June 2005 (Tk. in crore) Authorized capital 100.00 Paid-up capital 50.00 Reserves 84.11 Retained profit 5.36 Government Long-term Loan 5.25 Debentures 61.80 Others 24.89 Total 231.41 Source: ICB Annual Report (2004-05)

2.6 Shareholding Position

Table No 2:

The shareholding position as on 30 June, 2005 Sl no. Shareholders Government of Bangladesh 1. Nationalized Commercial Banks 2. Development Financial Institutions 3. Insurance Corporations 4. Bangladesh Bank 5. Denationalized Private Commercial Banks 6. Private Commercial Banks 7. Foreign Commercial Banks 8. First BSRS Mutual Fund 9. Other Institutions 10. General Public 11.

No. of shareholders 1

No. of Shares 13,50,000

Percentage of shareholding 27.00

11,37,220

22.74

6,81,550

13.63

6,18,286

12.37

6,00,000

12.00

4,54,263

9.08

28,286

0.57

26,531

0.53

6,900

0.14

26,949

0.54

927

70,015

1.40

Total
2.7 Functions of ICB

955

50,00,000

100.00

Source: ICB Annual Report (2004-05) Underwriting of initial public offering of shares and debentures. Underwriting of right issue of shares. Direct purchase of shares and debentures including placement and equity participation. Providing lease finance singly or by forming syndicate. Managing Investor's Accounts. Managing Mutual Funds and Unit fund. Operating on the stock exchanges. Providing investment counsel to issuers and investors. Participating in government divestment program. Participating in and financing of joint-venture projects. Introducing new business products suiting market demand. Dealing in other matters related to capital market operations. To supervise and control the activities of the subsidiary companies. The Corporation has adopted a realistic business policy framework within which its operation is conducted. The corporation in its operating acts on commercial considerations with regard to the interest of industry and commerce, investment climate, capital market depositors, investors and to the public interest generally. To act on commercial consideration with due regard to the interest of industry, commerce, depositors, investors and to the public in general. To provide financial assistance to projects subject to their economic and commercial viability. To arrange consortium of financial institutions including Merchant Banks to provide equity support to projects and thereby the risk of underwriting To develop and encourage entrepreneurs. To diversify investments. To induce small and medium savers for investment in securities. To create employment opportunities. To encourage investment in agro-based and IT sectors.
2.10 Management of ICB

2.8 Business Policy of ICB

a) b) c) d)

The Head Office of the corporation as per the requirement of the ordinance of ICB is located at Dhaka. The general direction and superintendence of the corporation created in a board of directors, which consists of persons including the chairman and managing director of ICB The board of directors consists of the following directors: The Chairman to be appointed by the government. The Directors to be appointed by the government from among persons serving under the government. One Director to be nominated by the Bangladesh Bank The Managing Directors, Bangladesh Shilpa Bank, Ex-office.

e) f) g)

The Managing Directors, Bangladesh Shilpa Rin Sangstha,Ex-office. Four other Directors to be elected by the shareholders other than the government, BB, BSB and BSRS. The Managing Director of ICB to be appointed by the government.
2.11 Different Departments of ICB

The main divisions along with the Departments of ICB can be illustrated in the following table: Table No 3:
Divisions a. Merchandising b. Funds Departments 1. Investors 2. Shares 3. Unit fund 4. Unit registration and procurement 5. Mutual funds 6. Loan appraisal 7. Economic and business research 8. System analysis 9. Programming 10. Data management 11. Public issue 12. Law 13. Project implementation 14. Recovery and follow up 15. Audit and method (Head office) 16. Audit and method (Branches) 17. Central accounts 18. Project loan accounts 19. Personnel 20. Establishment 21. Secretarys 22. Public relations

c. Loan appraisal d. Computer

e. Legal affairs f. Implementation and loan recovery g. Audit and methods h. Accounts and finance i. Administration finance j. Secretary's

Source: ICB Annual Report (2004-05) 1. 2. 3. 4. 5. 6. Chittagong Branch Rajshahi Branch Khulna Branch Barisal Branch Sylhet Branch Bogra Branch 7. Local office Dhaka
2.12 Branches of ICB

2.13 Product of ICB 2.13.1 Private Placements

ICB is authorized to act as an agent of the issuers and investors for private placements of securities. Under this arrangement, ICB places securities to individuals/institutions on

behalf of the issuer for which it charges fees. ICB also acquires shares/securities for its own portfolios.
2.13.2 Custodian and Banker to the Issues

To act as the custodian to the public issue of open-end & closed-end mutual funds, ICB provides professional services. It also acts as the banker to the issues and provides similar services similar services through the network of its branches. Fees in this regard are negotiable.
2.13.3 Mergers and Acquisitions

Companies willing to expand their business through mergers or acquisitions or to divest projects that no longer fit into present scale of operation contact the Corporation. ICB provides professional services & advice in respect of shaping up the cost and financial structures to ensure best possible operational results. Besides, in case of divestment, the corporation, through network and established business relationship, bring buyers and sellers together, help them negotiate final agreement and advice on the emerging corporate structure.
2.13.4 Corporate Financial Advice

Companies and Government enterprise intending to go public often seek professional & financial advice on corporate restructuring & reengineering. ICB through its expertise provides such services.
2.13.5 Bank Guarantee Scheme

ICB introduced Bank Guarantee scheme in 2002-03. ICB provided (i) Bid Bond for enabling the business people to participate in any tender or bidding; (ii) Performance Bond for helping the business community to continue their business smoothly by fulfilling their obligations promised by them to their clients; and (iii) Customs Guarantee for solving different disagreements between the customs authority and the business classes at the initial stage. The maximum limit of guarantee is Tk. 2.0 crore and would be issued against at least 20 percent cash and 80 percent easily cashable securities or against 100 percent cash margin. Re-guarantee from other financial institution is required for guarantee against the amount exceeding Tk. 2.0 crore.
2.13.6 Consumer Credit Scheme

As part of business diversification program ICB has introduced Consumer Credit Scheme in 2003-04 looking at the need of various household commodities of different professionals of government, semi-government, autonomous bodies and some established private sector organizations. Under this scheme one can enjoy minimum of Tk. 1.0 lac but maximum of Tk. 5.0 lacs credit facilities. The rate of interest on the loans reasonable and competitive
2.13.7 Lease Financing

ICB provides lease finance mainly for machinery, equipment and transport. ICB is in a position to provide professional advice and financial assistance to the intending clients. The period of lease, rental, and charge and other terms and conditions are determined on the basis of type of assets and the extent of assistance required by the applicants. Good responses have been received from the intending lessees since inception of this scheme in 1999.

2.13.8 ICB Unit Fund

It is on open-ended Mutual Fund through with the small and medium savers get opportunity to invest their savings in a balanced and relatively low risk portfolio. ICB has so far declared attractive dividends on units every year ranging from Tk. 11.5 to Tk. 25.0 per unit. Investment in units enjoys tax benefits, amount being applicable as per law. However, under the ICBs restructuring program new unit certificates are being sold by ICBs subsidiary company, the ICB Asset Management Company Ltd.

2.13.9 ICB Mutual Funds

ICB has so far floated eight closed-end mutual funds. The First ICB Mutual Fund was floated on 25 April 1980, while the Eighth ICB Mutual Fund was floated on 23 July 1996. The aggregate size of these funds is Tk. 17.5 crore. As on the 30 June 2004, 33646 certificate holders own these funds. Dividends declared on the funds were very attractive ranging from 14.0 to 200.0 per certificate fro 2003-04. Investors show overwhelming interest in all the ICB Mutual Funds. One can invest in such funds through the stock exchanges with which these funds are listed. Through corporate restructuring, new mutual funds are being floated through ICB Asset Management Company Ltd. a subsidiary of ICB.

2.13.10 Investors Scheme

The Investors Scheme was introduced in June 1977. Over the years, this scheme has grown tremendously, ICB, at its discretion; may grant up to two times loan against the assets of an account subject to a maximum limit of Tk. 3.0 lacs. An accountholder may use the combined balance of his/her equities and loan to buy shares/ securities. To help the investors to develop diversified and balanced portfolio to minimize risk and earn a reasonable return, ICB provides professional advice and other support services. Under the restructuring program, ICB operates and manages only the old accounts and new accounts are being opened and managed by the ICB Capital Management Ltd. a subsidiary of ICB.

2.13.11 Advance against ICB Unit certificate scheme

Advance against ICB Unit Certificates Scheme was introduced in 1998, especially designed for the ICB unit holders to meet their emergency fund requirements. One can borrow maximum of Tk. 85 per unit by depositing his/her unit certificates under lien arrangement from any of the ICB offices where from such unit certificates were purchased. The rate of interest on the loan is reasonable and competitive.

2.13.12 Advance against ICB Mutual Fund certificates

Advance against ICB Mutual Fund certificates scheme was introduced in 2003, designed for the ICB Mutual Fund certificate holders to meet their emergency fund requirement. One can borrow maximum of 50 percent value of last one years weighted average market price of certificates at time of borrowing by depositing his/her certificates under lien arrangement from any of the ICB offices. The rate of interest on the loan is reasonable and also competitive.

CHAPTER -THREE
Activities of Different Department of ICB
3.1 Introduction
There are twenty-two Departments under ten Divisions of ICB. The entire organization functions properly as a result of the apt interaction among the different Departments. During my internship with ICB I discovered a sound working environment and the presence of an efficient administration.
3.2 Administration of ICB

Investment Corporation of Bangladesh (ICB) is providing different category of financial and banking services. Nature of different divisions/departments varies, such as Economic and Business Research (EBR) Department, requires teamwork, Loan Appraisal Division requires professional work, Funds division needs chain work. Managing Director is entrusted with authority to transact the regular business of the organization; he may delegate some authority to the officials of the corporations. However, most of the policy decision are taken by the different committees with the approval of managing director and where required of the Board. It is the discretionary authority of the Board to constitute the executive committee and to nominate its Chairman to assist the Board in the discharging of the function stated under the ordinance. The Board may appoint such other committees it deems appropriate to assist it in the efficient discharge of its functions. So far, Board has appointed two such committees, Economic and Business Research committee and Loan Appraisal Committee, headed by General Manager.
3.3 Manpower

The corporations manpower strength is enhanced by 35 persons through recruitment of 14 officers and 21 employees at different levels during 2000-05. This appointment was made mainly to add dynamism in the overall activities of ICB through the uses of computer technology. On the other hand, two officers resigned and one officer retired from the services of ICB. One officer got promotion as general manager and joined in another bank. The total manpower as on 30 June 2005 stood at 396 which were 365 on the same date of last year. Out of 396 people, 254 were officer and 142 non officer employees. The total number of female employees was 59, including 44 officer representing 14.9% of the total manpower. With this manpower and administrative body of ICB, it is performing in the following departments: 1. Merchandising Division The activities of Merchandising Division are conducted under two different Departments, namely: i) Investors Department ii) Shares Department i) Investors Department Investors Department deals with "Investor's Scheme", which started operation on 13 June 1977. The main functions of this Department are follows:

Investors Department opens and maintains accounts (investor's account) for individual investors for diversified investment in listed securities. Investors are allowed to open such accounts with a minimum deposit of Tk. 5000. Against each of this account the investor can have an investment loan currently at 1:2 ratio with his/her deposited amount. The highest among one can have, as investment loan is Tk. 30,000.00. An individual can open an account by filling up the account opening form, which is to be purchased from the corporation paying Tk. 10.00 and completing other required formalities. An individual investor can open a maximum of two accounts; one in his own name and the other in joint name. An investor can operate any account if he/she is permitted to do so by the concerned account holder. Presently one individual can operate maximum five accounts at a time. The investor can withdraw money from his account keeping a minimum balance of Tk. 5000.00 or securities valuing Tk. 5000.00 in the account. The investor can close down the account. In that case, the ID delivers the cash balance and securities after adjusting the loan (if any) to the investor. Operational activities of the investors scheme in 2004-05 Table No 4: particulars 2004-05 Head office Branches No. accounts opened No. of accounts closed 288 519 No. of net operative accounts 26152 22728 Deposits received 9.68 13.09 Loan disbursed 62.66 96.84 Investments made 57.46 60.80 Interest accrued 16.73 8.36 Interest Waves 12.28 6.78 Recovery of margin loans 73.46 106.14 Fund withdrawal 16.94 23.24 Source: ICB Annual Report (2004-05) Total 807 48880 22.77 159.50 118.26 25.09 19.06 179.60 40.18

Profession-wise classification of the investment accountholders as on 30 June 2005 Table No 5: Occupation No. of Percentage accountholders Public & private sector employees 21264 44 Business/Agriculturist 3389 7 Retired persons 2568 5 Housewives 15095 31 Engineers, Doctors and Lawyers 2600 5 Other 3964 8 Total 49399 100

Source: ICB Annual Report (2004-05) ii) Shares Department: Shares Department can be called the custodian of all shares held by ICB. Share Department is divided into five sections, which are:
1.

Investor Portfolio Section:

Investor portfolio section is related with the activities of sending shares and debentures to the company and receives shares and debentures after registration. This section also collects declared dividend, bonus and right share from the companies involved.
2.

Sales and Withdraw Section:

Sales and withdraw section receives sales and withdraw order from the investors Department and verifies physical existence of the securities.
3.

Funds Portfolio Section:

Funds portfolio section deals with the sales and withdrawals of mutual funds portfolio, unit fund portfolio and ICB portfolio.
4.

Securities Reconciliation Section

This section is connected with the reconciliation of securities to check any reconciliation of securities to check any discrepancy, which arise to the actual number and the amount in the accounts.
5.

Procurement Section

This section is engaged in collection of dividends, interest etc. declared by the companies whose shares are held by the ICB and its other accounts. 2. Funds Division The main activities of funds division are conducted under three departments which arei. Unit Fund ii. Unit registration and procurement department iii. Mutual funds i) Unit Fund: Legal status and objectives of the fund Investment Corporation of Bangladesh (ICB) was established in 1976 with the objectives of acceleration industrialization and economic development of the country through development of capital market by mobilizing savings and encouraging and improving the investment climate in the country with particular emphasis placed on broadening the base and scope of investments as well as tapping marginal investors. Keeping in line

with these objectives, unit fund is to accelerate industrialization and economic development of the country by way of mobilizing savings of small and medium savers and channeling those in the productive industrial sector. Thus, the scheme induces the small and medium savers to participate in the activities of industrial development of the country. This department deals with ICB unit, which is an open-end mutual fund. The responsibility of managing the fund rests on Investment Corporation of Bangladesh for which the management fee is Tk. 1.00 per unit (sold). Units are sold through ICB offices and other authorized bank branches. The unit sales department is entrusted with the following responsibilities: Sales of units to the investors. Reconcile the amount received and unit certificates send to the agent. Transfer the units, if applied for with the prescribed form. Splits the units, if applied for. Transmission of units in case of death of the unit holder. Issue and distribution of CIP (Cumulative Investment Plan) Certificates. Marketing of lien on units if necessary.
ICB Unit Fund

At a glance (2000-01 2004-05)

Table No 6: Particulars
Gross Issue Unit Amount Repurchase Unit Amount Net Issue Unit Amount Cumulative Net Loss Unit Amount Investment (As on 30 June) at cost at market price No. of Securities (held in the Portfolio as on 30 June Net Income Distributable Dividend Per Unit (Tk.) Dividend Amount Undistributed Income Selling Price of Unit Opening (Tk.)

2000-01 2793232 28.75

2001-02 2842578 29.26

2002-03 1710155* 17.44

2003-04 1728270* 17.97

2004-05 1627339* 17.09

4063013 41.99 (1269781) (13.24) 41715909 478.72 423.55 376.76

3337975 34.54 (495397) (5.28) 41220512 473.44 397.32 270.28

1816132 18.60 (105977) (1.16) 41114535 472.28 431.33 314.75

1976294 20.79 (248024) (2.82) 40866511 469.46 604.59 626.63

2139325 (511986) (6.37) 40354525 463.09 637.09 700.89

247 51.43 66.16 12.00 50.06 16.10 108

254 50.96 67.06 12.30 50.70 16.36 108

262 45.54 61.90 12.30 50.57 11.33 106*

266 49.71 61.04 11.50 47.00 14.04 108*

271 61.11 75.15 12.00 48.42 26.73 109*

Closing (Tk.) Yield on Opening Price(percentage)

11.11

115

116 11.39

111 11.60

115 10.65

118 11.01

Source: ICB Unit Fund Annual Report (2004-05) ii) Unit Registration and Procurement Department: This department performance the following functions: Posting all the information related to sale, transfer and repurchase from the statements received from unit sales department of ICB. Preparation of dividend list from the ledger posting and CEP marketing/cancellation. Splits the units, if applied for. Consolidates the units, if applied for. Delivering the certificates, forms, brochures, annual reports etc. to all the issuing offices as per their requisition. Reconciliation of blank unit certificates. iii) Mutual Funds Department: Mutual fund is a closed fund, which is issued once. The size of the fund and the number of certificates are determined earlier, which cannot be increased or decreased. Up to June 2000 the Investment Corporation of Bangladesh as floated eight-closed-end mutual funds. The area of activities of Mutual Funds Department is cantered to these eight-closed and mutual funds. Broadly the functions of mutual funds department consists of: Maintenance of ledger with the name, address and number of certificates along with distinct number for each mutual funds separately. Issue of certificates among the holders. Verify the signature of the holders in the 117 form. Renunciation of certificates, if applied for by the holders. Registration in the name of transferee after getting approval form the competent authority. Preparation of dividend list from the ledger position. Obtaining approval from the management with regard to selection of bank branches and opening of suitable accounts for payment of dividend to the certificates holders as well as list of signatories authorized o sigh the dividend warrants. Providing the list of signatories to the central department and to open the bank account for payment of dividend through the central accounts. After declaration of dividend, on management's approval to advice computer department for printing of final dividend warrants in the name of the certificates holders as per the dividend list and after obtaining the dividend warrants from the computer department sinning those for signing to the authorized signatories. Distribution/dispatch of final dividend warrants to the certificate holders after completing necessary formalities. Arrangements for re-dispatched. Receiving application for change of address correction of names and forwarding the same to the computer department for correction. ICB MUTUAL FUND
Dividend Performance of ICB Unit Fund

ICB has played a pioneering role in the development of close-ended Mutual Funds in Bangladesh. Countrys first Mutual Fund the First ICB Mutual Fund was floated on 25 April 1980. Since then ICB has, over the years, floated 8 Mutual Fund with the total capital of tk 17.50 crore. ICB Mutual Funds continued to command the confidence and attraction of investors as lucrative and rewarding investments in terms of steady dividend performance. ICB has been able to declare attractive dividends on its Mutual Funds during 2004-05 as previous year. Among the 8 Mutual Funds the highest dividend of 210.00 percent on the Second ICB Mutual Funds, with lowest being 15.00 percent declared on the Eighth ICB Mutual Funds during the year under review. The rate of dividends for the previous year ranged from 14.00 to 200.00 percent. In 2004-05 the market prices of all the Mutual Funds on Dhaka Stock Exchange Ltd. & Chittagong Stock Exchange Ltd. were above their par values, reflecting strong performance of the Funds. Average dividend yield on these 8 listed Mutual Funds worked out to Tk. 7.71 per certificate based on closing price. The rate of dividend declared by First ICB Mutual Fund ranked first amongst all the listed companies that declared dividend during 2004-05. ICB has been succeeded to a greater extent in broad basing equity ownership through Mutual Funds as is evident from the number of certificate holders, which was over 31000 as on 30 June 2005.

Operational Highlights
Launching

Table No 7:

Paid up Capital (Taka in lac) First ICB Mutual Fund 25 April 1980 50.00 Second ICB Mutual Fund 17 June 1984 50.00 Third ICB Mutual Fund 19 May 1985 100.00 Fourth ICB Mutual Fund 06 June 1986 100.00 Fifth ICB Mutual Fund 08 June 1987 150.00 Sixth ICB Mutual Fund 16 May 1988 500.00 Seventh ICB Mutual Fund 30 June 1995 300.00 Eighth ICB Mutual Fund 23 July 996 500.00 Total 1750.00 Source: ICB Mutual Fund Annual Report (2004-05)
Portfolio Position

Name of the Fund

Date of Launching

(As on 30 June 2005) Cost of Market Value Portfolio of the (Tk in Lac) Portfolio (Tk) First ICB Mutual Fund 311.83 1309.34 Second ICB Mutual Fund 284.23 312.28 Third ICB Mutual Fund 417.28 472.75 Fourth ICB Mutual Fund 381.57 456.77 Fifth ICB Mutual Fund 599.39 712.71 Sixth ICB Mutual Fund 942.31 1002.38 Seventh ICB Mutual Fund 1109.48 1220.93
Table No 8:

Name of the Fund

Market price per certificate (Tk) 2655.00 820.00 697.00 564.00 341.00 217.75 217.75

No. of Certificate holders 973 994 2748 2152 3923 9712 3163

Eighth ICB Mutual Fund 1154.32 1278.82 205.25 Total 5200.41 6765.98 Source: ICB Mutual Fund Annual Report (2004-05)

7671 31336

Operational Result
Table No 9:

Distributable Ex-dividend income per intrinsic value Certificate per certificate (Taka) (Taka) First ICB Mutual Fund 101.72 640.71 2551.20 Second ICB Mutual Fund 40.38 222.03 336.56 Third ICB Mutual Fund 52.31 153.04 260.39 Fourth ICB Mutual Fund 71.30 161.67 297.99 Fifth ICB Mutual Fund 61.01 49.12 207.12 Sixth ICB Mutual Fund 115.79 27.91 123.17 Seventh ICB Mutual Fund 62.72 29.35 150.56 Eighth ICB Mutual Fund 106.55 28.86 138.76 Source: ICB Mutual Fund Annual Report (2004-05)
Consolidated position of portfolios of ICB Mutual Funds

(As on 30 June 2005) Name of the Fund Net income (Tk in Lac)

Table No 10:
Second ICB Mutual Fund 56 58 284.23

(As on 30 June 2005)

Fifth ICB Mutual Fund 92 92 599.39 Sixth ICB Mutual Fund 121 122 942.31 Seventh ICB Mutual Fund 118 122 1109.48 Eighth ICB Mutual Fund 116 118 1154.32

Sl. no.

Particulars

1. 2. 3.

4.

No. of companies No. of Securities Total investment at cost (Tk. in lac) Market Value (30 June 2005)

First ICB Mutual Fund 48 48 311.83

Third ICB Mutual Fund 71 72 417.28

Fourth ICB Mutual Fund 77 78 381.57

1309.34

312.28

472.75

456.77

712.71

1002.38

1220.93

1278.82

Source: ICB Mutual Fund Annual Report (2004-05)

Dividend Performance
Table No 11: Mutual Funds
(Tk per certificate)

Financial Year 2000-01 2001-02 175.00 42.00 50.00 2002-03 180.00 45.00 50.00 2003-04 200.00 50.00 50.00 2004-05 210.00 55.00 52.00

First ICB Mutual Fund Second ICB Mutual Fund Third ICB Mutual Fund

170.00 40.00 45.00

Fourth ICB Mutual Fund 38.00 40.00 40.00 45.00 Fifth ICB Mutual Fund 23.00 24.00 24.00 24.00 Sixth ICB Mutual Fund 17.00 17.50 17.50 17.50 Seventh ICB Mutual Fund 14.00 14.50 14.50 15.00 Eighth ICB Mutual Fund 13.00 13.50 13.50 14.00 Source: ICB Mutual Fund Annual Report (2004-05)

48.00 27.00 18.50 16.00 15.00

3. Loan Appraisal Division Loan appraisal division has two departments under it: i) Loan appraisal department ii) Economic and business research department. i) Loan appraisal department ICB provides financial support to the public limited companies through underwriting and bridge financing. Bridge financing is now very selective and done on priority basis. Before financing this department verifies the viability of the project. ii) Economic and business research department This department provided service to various interested groups. EBR also participates in the decision making process. The main functions of this department area: To take part in the portfolio management decision. Prepare annual report of ICB, mutual funds and unit fund. Manage business development cell. Collect information about DSE, CSE, public issue, half-yearlyaccounts of the listed companies etc. 4. Computer Division Computer division is one of the most important divisions of ICB. Though the division is established recently, it brings dynamism in all the works of the corporation. It has reduced paper works and changed the corporation into a modern, smart and efficient institution. A strong networking environment exists among the different departments of ICB, which is controlled by the computer division. The main purpose of computer division is to maintain the existing networking environment of ICB and develop some customize software for different departments in order to fulfill the total automation planning by the Investment Corporation of Bangladesh. Computer Division has three departments under it : i) System analysis department ii) Programming department iii) Data management department The computer division of ICB is a relatively small division. Presently, the departments under this division do not work independently. In near future the three departments will be separated according to their working methodology. The head of computer division is a DGM. Two system-analysts worked under him. The duty of the system-analysts is to maintain the network. They also participate in the

analysis of different software systems develop for the various departments of ICB. In brief, they are responsible for the total computer system of ICB. Besides them two programmers and three assistant programmers develop software for the ICB. These software's are generally developed in Oracle, Developer-2000, Fox-Pro etc. But some leading software companies ofBangladesh develop the main customized softwares of ICB. Names of the customized software and developers of these softwares are: Table 12:
SL. No. 1 2 3 4 5 6 7 8 9 10 Name of the Software Merchandising operation management Mutual fund script and ownership Stock exchange index publication Software for IPO Project implementation management Software for PMIS Software for financial feasibility analysis for project Software for meeting minute storage and retrieval and software for Lawsuit tracking Unit sales & repurchase information Central account Developer Leads corporation Leads corporation Leads corporation Leads corporation Beximco computer Beximco computer Beximco computer Beximco computer Beximco computer Colonel corporation

Source: ICB Annual Report (2004-05) Computer division of ICB is not a profit earning division but it performs a pivotal role. This division makes the interaction among various departments possible, easier and efficient. This division provides information, which is vital to other departments as well as to other companies. The dynamism of ICB depends on this division. 5. Legal Affairs Division: The legal affairs division has to departments under it : i) Public Issue Department ii) Law Department i) Public Issue Department The ultimate objectives of providing bridging loan or direct underwriting is to help the projects to go for public issue. This the public issue department is a vital department in the context of the ICB organogram. This department is empowered to. Visit and collect audited financial statement from the sponsors; Analyze the financial statement of on-going projects; Advise, purse sponsors for going for public issue; Assist sponsors to prepare prospects for issuing shares and debentures; Examine the prospectus submitted by the sponsors & make arrangement for its approval; Advise companies in issuing allotment letters and refund warrants; Make necessary adjustments of bridging loan of concerned company; Make liaison with the recovery and follow up department regarding realizing of dues/over dues.

ii) Law Department: This is a specialized department and empowered to Process all legal matters. Prepare legal documents, advance agreements, shares agreements, demand promissory notes memorandum and deposit of title deed etc. Arrange exception of underwriting-cum-advance agreement, underwriting agreement and supplementary documents etc. Process litigation cases, prepare legal not ices, refer cases to legal advisor and co-ordinate with legal advisor in the court. Prepare necessary board memos for placement in the board meeting relating to relating to litigation and legal affairs. 6. Implementation and loan recovery division This division has to departments under it: i) Implementation department ii) Recovery and follow up department i) Implementation department Project implementation department helps to give the physical shape of a project through close supervision. It also helps in implementation of the sanctioned projects, follow-up the project until the start of commercial operation and makes recommendations for additional loans, if necessary. ii) Recovery and follow up department This department is engaged in recovering the following types of loans: Bridge loan Debenture loan Share repurchase Loan against unit fund

Recovery Policy: The loan recovery and follow-up department classifies loans as "Good loan", "Substandard loan", "Doubtful loan", and "Bad loan". recovery policy is different for these different types of loans. In order to recover doubtful and bad loans the steps followed by this department are: Issuing of reminder letter. Ceasing the validity of NOC (No. objection certificate). NOC is generally issued for granting working capital loan. Giving reminder via telephone and visits to the company. Informs the CIB (Credit information bureau) of Bangladesh Bank of the defaulting borrower. 7. Audits and Methods Division: The main functions of this division is conducted through two departments: i) Audit and Methods (Head office) ii) Audit and Methods (Branches)

This division performs four types of audit namely, internal audit, external audit, statutory audit and Bangladesh Bank Audit (Special audit). It also advises ICB to adopt and practice different new methods. 8. Accounts and Finance Division: There are two departments under this division: i) Central accounts department ii) Project loan accounts department i) Central accounts department All kinds of payments of ICB are made by central accounts department. This department provides various information, such as consolidated trial balance to EBR, to help in preparing financial statements for publishing annual report. This department also prepares the following vouchers: Journal voucher Bank voucher Credit voucher Investor credit voucher ii) Project loan accounts department This department mainly deals with the calculation of interest, the dates of submission of interest etc. of the projects, which are financed by ICB. 9. Administration Division: The proper functioning and interaction among the different departments of ICB is ensured by this division. This division has two departments : i) Personnel department ii) Establishment department i) Personnel department This department deals with the human resource issues of the organization. Functions of this department are : Recruitment a) Direct recruitment b) Promotion Training programs Disciplinary action Salary ii) Establishment department The activities of this department are : Total purchase of office furniture and fixing or maintenance regarding the purchased material. Replacement initiation according to government rule. Loan facilities to the employees (house building motor etc.). 10. Secretary's Division The secretary's division has two wings i) Secretary's department ii) Public relations department

i) Secretary's department This department is responsible for: Contact with the board of directors. Arrangement of board meetings. Determine the remuneration of directors. Submission of proposal to the board meeting. ii) Public relations department This department conducts all necessary interactions with shareholders, visitors and anyone seeking information about the activities of ICB.

3.4 Role of ICB in developing the Capital Market ofBangladesh

The development of capital market is pre-condition of the economic development of a country. It is a long drawn out process and is dependent on the socio-economic program of a nation. For rapid industrialization a developed capital market is essential especially the share market. Through share market the savings of small savers can be mobilized and channeled into the productive sector. Capital market may be defined as the demand for and supply of capital as a reproductive capacity, which involves both loan and equity. The capital market actually caters the need of fund for industrialization. The capital market may be divided into two segments; the non-securities segment primarily dealing in terms of loans and mortgages, and the securities segment dealing in stocks/bonds/certificates. ICB as a development bank plays a vital role for developing the capital market of Bangladesh by providing financial assistance to projects and by its merchandising operations. ICB by its operations has been able to revitalize stock exchange. At the time of the establishment of ICB only nine companies were enlisted with the Dhaka Stock Exchange. Now there are about 265 about enlisted companies which are assisted by ICB. ICB has played pivotal role to develop the country's capital market. ICB as the national investment house, was the lone organization to perform the activities by creating demand of securities, and on the other hand to ensure the supply of securities in the stock market. The investor's scheme of the corporation provides the required impetus to the capital market by creating a class of investors who are oriented towards investing in corporate stocks. The operation of investor's scheme thus creates demand for securities to match the supply of securities which serves two important objectives: first, the small and medium savings are mobilized for investment in industrial sectors and second, the companies find it easier to mop-up capital by issue of shares because of the existence of large investor class. Moreover, the floatation of mutual funds and issuance of unit certificates by ICB has strengthened the stock market. Through investor's scheme, mutual funds, and unit fund mechanism, ICB has been able to mobilize huge social savings which otherwise would remain static.
3.5 Progress of ICB in the past years

Table No 13: Milestones

Date of Establishment/ Commencement ICB October 1, 1976 Investors' Scheme June 13, 1977 First ICB Mutual Fund April 25, 1980 ICB Unit Fund April 10, 1981 Second ICB Mutual Fund June 17, 1984 Third ICB Mutual Fund May 19, 1985 Fourth ICB Mutual Fund June 6, 1986 Fifth ICB Mutual Fund June 8, 1987 Sixth ICB Mutual Fund May 16, 1988 Entry as country's Nodal DFI in SADF May 7, 1992 Seventh ICB Mutual Fund June 30. 1995 Decision for 100% Automation July 14, 1996 Eight ICB Mutual Fund July 23, 1996 Purchase of Office Land & Building December 11, 1997 Participation in equity of SARF (Unit Fund) January 16, 1998 Advance Against Unit October 12, 1998 Term Deposit January 13, 1999 Lease Financing April 22, 1999 The Investment Corporation July 5 and 6, 2000 of Bangladesh(Amendment) Act, 2000 passed in the Jatiya Sangsad (Parliament) and Honorable President's assent thereof. Formation and Registration of 3 Subsidiary Companies December 5, 2000 Computer Training Program. March 25, 2001 Source: ICB Annual Report (2004-05)

3.6 ICB Subsidiary Companies

The major activities of ICB have been divided into three subsidiaries from the year 2001. Descriptions about these three companies have been given below: 3.6.1 ICB Capital Management Ltd. ICB Capital Management Ltd. is a fully owned subsidiary of investment Corporation of Bangladesh. The company obtained license from the Securities and Exchange Commission to act as Issue Manager. Underwriter, Portfolio Manager and to carry out other merchant banking operations under the Securities and Exchange Commission (Merchant Banker and Portfolio Manager) Regulations, 1996. The Company started operations form from July 1, 2002 through a gazette notification of the government. The Company has a separate Board of Directors comprising 3 members from the private sectors having good academic qualification, expertise and experience in the field of business, finance and investment. The MD of ICB is the Chairman of he Board. The Company has excellent working environment being equipped with logistics and computer facilities. Objectives of ICML

1. 2. 3. 4. 5.

Provides the best possible investment avenue for your savings. Provides investment opportunity to maximize returns. Provides investment counseling to minimize risk. Broaden the base of investment. Contributes to the growth of industrialization with employment generation.

Opening and operating ICML Investors Account Any Bangladeshi adult citizen, Corporation bodies and statutory organizations are eligible for opening an Investment account. persons of unsound mind or minors are not allowed to open such account. Minimum deposit for opening account is Tk. 10,000.00 (Ten Thousand) only. There is no fixed ceiling of additional deposit. Account holder may deposit any amount in phases according to his convenience. Maximum two account can be opened by an individual. One account in his own name and another jointly with other person. Corporate bodies/ statutory organizations shall not be allowed to open joint account. Account can be opened by property filing in prescribed application form and complying with other all-requisite formalities. At the time of opening account, the account holder(s) shall have to appear in person before the authorized officer of the company for completing legal formalities. An account holder(s) can nominate another person to operate portfolio account in the prescribed form at the time of opening account. the operator shall carry authority to operate the accounts freely. The actions of the operator in respect of operating portfolio accounts will be treated as actions of the assigned to an individual who has an existing account in the company. In case of joint account, either or both of the holders can operate the account. Closing the Investors Account An account holder can close his account by adjusting the entire debit balance including margin loan, interest, service charges, brokerage commission and other charges (if any). After payment of full debit balance, the account holder can withdraw the securities and credit balance from the account at the time of closing. Accounts once closed shall not be allowed to revive. However, the same individual/ institution can open fresh account with the company fulfilling the company fulfilling all requirements. INVESTMENT CORPORATION OF BANGLADESH
HEAD OFFICE Date from 16/06/05 to 20/12/05 Deposit Position

Serial no
1. 2. 3. 4. 5. 6.

Table No 14: Transaction Name Total amount Additional deposit 4850825.00 Application for share 9476000.00 Cost of share 9864035.87 Final dividend 1309.00 Initial deposit 4373400 Interest for the quarter 69050.67

Debit/Credit Credit Debit Debit Credit Credit Debit

7. 8. 9. 10. 11. 12. 13.

Internal transfer of fund 57500.00 Internal transfer of fund 57500.00 Loan repayment 79500.00 Portfolio management fee 8915.86 Refund of application money 5868.00.00 Sale proceeds 2252177.64 Withdrawal fund 666500.00 Source: ICB Annual Report (2004-05)

Credit Debit Credit Debit Credit Credit Debit

3.6.2 ICB Asset Management Company Ltd. The responsibility of this subsidiary company is to manage new mutual funds and unit funds. Under this new arrangement there will be four different groups or aspects to manage the mutual funds. They are trustee, sponsor, asset management and custodian. For these provisions the operational cost of the newly issued mutual funds are higher than the previous ones. Up to June 2005, the company floated two closed-end mutual funds and two open-end mutual funds. Out of these four funds, two mutual funds, namely ICB AMCL Islamic Mutual Fund a closed-end mutual fund and ICB Mutual Fund- a closed-end mutual fund and ICB AMCL Pension Holders Unit Fund an open-end mutual fund, were floated during 2004-05. During the year, the company has successfully managed these funds. 3.6.3 ICB Securities Trading Company Ltd. ICB Securities Trading Company Limited started its brokerage activities on 13 August 2002. during the year under review, the company has significantly expanded its activities to be become one of the most active brokers of both DSE and CSE like in the preceding year. The Company performs trading activities of securities for general investors alongside the institutional investors. With a view to involving more investors in the securities market, ISTCL carryout its brokerage activities through its branch offices in four divisional towns namely,Chittagong, Sylhet, Barisal and Rajshahi. Stock Brokerage Functions of ISTC up to 2004-05 Table No-15:
Particulars Total turnover Transaction Portion of ISTCL in total turnover (percentage) DSE 7522.52 914.41 12.16 2004-05 CSE 1667.85 287.85 17.26 Total 9190.37 1202.26 13.08 DSE 2477.10 632.07 25.52 2003-04 CSE 837.76 426.76 50.94 Total 3314.86 1058.83 31.94

Source: ICB Annual Report (2004-05) 1. Facilitating individuals/ institutions to make applications in the initial public offerings of securities 2. Providing brokerage services for buying and selling securities listed with the Stock Exchange. 3. Acting as member of the Stock Exchanges and of over- the counter markets. 4. Performing other related activities.
Functions

Table No 16: Authorized Capital Paid Up Capital Retained Earnings No. of Share holder

(As on 30 June 2005) Tk. 50.00 Crore 1.25 Crore 56.36 Lac 7 Source: ICB Annual Report (2004-05)

Capital Structure

3.7 Financial results of subsidiary companies

A brief summary of financial result of the subsidiary companies of ICB for 2004-05 and 2003-04 is given below. Table No 17:
Particulars Income Expenditure Gross profit Net profit EPS (Tk.) NAV (Tk) Dividend (Tk.) ICB Capital Management Ltd. 2004-05 2003-04 12.78 4.07 6.72 1.99 6.06 2.08 5.45 1.90 68.11 23.69 169.47 142.35 15.00 10.00 ICB Asset Management Co. Ltd. 2004-05 2003-04 5.81 2.44 2.28 1.36 3.53 1.08 3.42 1.08 68.38 21.66 159.74 110.77 18.00 12.00 ICB Securities Trading Co. Ltd. 2004-05 2003-04 4.60 2.75 3.20 1.86 1.40 0.89 0.88 0.56 69.97 44.83 179.09 139.13 30.00 25.00

Source: ICB Annual Report (2004-05)

3.8 Overall Financial Analysis of ICB

The International Accounting Standards (IAS)-17 and IAS-27 have been adopted by the Institute of chartered Accounts of Bangladesh (ICAB) in the recent past, which are related to lease Financing and Consolidation of Accounts of Subsidiaries. The IAS-17 and IAS -27 have been followed while preparing accounts for 2004-05 along with other applicable rules as adopted in Bangladesh. For the purpose of comparison, the accounts for 2003-04 has been restated after incorporating changes resulted from the adoption of IAS -17 relating to Lease Financing. As a result, net profit after tax for the year 2003-04 has been increased by Tk. 1.48 crore, which has ultimately been transferred to retained profit of that year. The overall financial position of ICB has improved during the year, compared to the previous year. Financial results of ICBs own and those of after consolidation of accounts with its subsidiaries and some key financial ratios relating to profitability, liquidity and solvency are given belowStatement of financial results and some key financial ratios
Table No 18:

Particulars
2004-05 Financial Result: Total Income (Tk. In Crore) 170.38

ICB
2003-04 137.35

Consolidated (ICB &Subsidiaries)

2004-05 187.82 200-04 143.49

Total Expenses (Tk. In Crore) Profit Before Provision (Tk. In Crore) Provision Made (Tk. In Crore) Net Profit (Tk. In Crore) Financial Ratios: 1. Net profit to total income (percentage)

82.72 87.66 65.73 21.93 12.87 9.27 15.73 43.87 281.63 6.00 27.35 4.56 1.11:1 32:68

92.10 45.25 27.11 18.14 13.21 6.64 14.65 38.84 270.33 8.15 25.75 3.16 1.10:1 39:61

86.29 101.53 69.85 31.68 16.87 12.75 20.91 63.36 305.65 26.75 2.16 1.15:1 30:70

93.83 49.66 27.98 21.68 15.27 7.82 16.94 46.41 279.17 30.96 2.64 1.14:1 38:62

2. Return on total investment (percentage) 3. Return on Equity (percentage) 4. Earning per share (Tk.) 5. Book Value per share (Tk.) 6. Dividend yield (percentage) 7. Dividend payout Ratio (percentage) 8. Price Earning Ratio (time) 9. Current Equity Ratio 10. Debt Equity Ratio

Source: ICB Annual Report (2004-05) Return on Investment Return on Equity Earning Per Share Price Earning Ratio Book Value Per Share Dividend Yield Current Ratio Debt Equity Ratio : Net Profit /Total Assets * 100 : Net Profit / Total Equity : Net Profit / No of Shares Outstanding : Market Price Of The Share/ Earning Per Share : Total Equity / No of Shares Outstanding : Dividend Per Share/ Market Price Per Share : Current Assets / Current Liabilities : Debt / Shareholder Equity
Interpretation of Ratios

CHAPTER-FIVE
Findings of the Study

No. of employee in Investment Corporation of Bangladesh Rajshahi Branch is not enough to provide proper customer service. The public issues of all the public limited companies assisted by ICB are not satisfactory; as a result the small and middle class investors are sometimes facing loss and getting fully motivated to withdraw investment. Investor cannot know information due to not arrange for seminar, symposium and workshop by this Branch. ICB has decided the dividend of unit Fund artificially, which can cause problems in future. At present investors are not allowed to open an account in the ICB Rajshahi Branch. This branch maintains lot of ledger book every day that takes much time and leaves less time for customer services. Data all sections are not fully computerized. The officials are not interested in supplying available data due to confidential limitations. Lack of good security hinders the way to make efficient portfolio. Some companies do not pay dividend consistently over the yeas that ultimately affect the performance of Mutual Funds because the earning of the fund is dependent upon the returns of the included securities. Some companies tend to conceal material information or sometimes provide misinformation in their financial statements, which impedes the analysis of the securities and the fund management. Securities that are included in the Mutual Funds are not reshuffled regularly. Certificate holders sometimes do not get the warding timely. This causes harassment to the certificate holders. This branch faces the lack of projector Lack of expert to solve computer related problem. No. of employee has to be increased in Investment Corporation of Bangladesh of Rajshahi Branch. The public issues of all the public ltd. companies should be assisted by ICB to remove the problems faced by small and middle class investors. The Branch should arrange for seminar, symposium and workshop to inform Customers and clients regarding the activities of the branch. ICB should not decide the dividend of unit Fund artificially Though ICB doesnt permit to open an account it created an opportunity open an investment account in capital asset management ltd. Accounts of ledger book should be recorded in the computer. The officers should be more cordial in supplying data related to their activities. Effective securities measures should be taken to make efficient portfolio. This branch should arrange for computer expert to solve computer problems. There should be specified time frame for redemption for of the Mutual Funds, which is a common criterion for the investment instruments like Mutual Fund. In Bangladesh capital market, the number of good securities is very limited. So the earlier funds are composed of better performing securities and consequently their

5.1 Problems of ICB

5.2 Suggestions concerning the existing problems:

holders get relatively higher rate of return than the later stage fund holders. This is discriminatory. So redeeming the old funds will open windows of equal opportunity for the small investors and this will work as an impetus to improve the condition of capital market of Bangladesh.

Conclusion
During the Internship program I have learned practical knowledge in the investment sector. As a financial institution ICB is an investment Banker. But the functions of ICB are not same as other commercial bank. ICB Rajshahi Branch is solely operated by the direct instruction and supervision of the head office. The head office formulates all policies and regulations and these are implemented through its branches including this branch. ICB Rajshahi Branch is playing the leading role to develop the capital market in the Northern Area of Bangladesh. ICB as the National Investment house was the loan organization to perform the activities by creating demand of securities and on the other hand to ensure the supply of securities in the stock market. The investors scheme of the Corporation provides the required impetus to the capital market by creating a class of investors who are oriented towards investing in corporate stocks. Management of Mutual Funds and Unit Fund operation of Investment Accounts was the cornerstone of merchandising operations, which had a positive on the capital market. During the year 2005, ICB Securities Trading Co. Ltd and ICB Capital Management Ltd. have been introduced to make the ICB activities more dynamic. Since the number of employee of Investment Corporation of Bangladesh of Rajshahi Branch is not enough with respect to number of investors. So, the investors do not get proper customer service by them. At last I can say that in spite of various problems ICB, Rajshahi Branch is a profitable institute.