Bank Case
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Introduction:
Commercial Bank of Ceylon Ltd is a publicly quoted company incorporated on June 25, 1969 and domiciled in Sri Lanka. It has started its operation in Bangladesh in the end of the year 2003 through acquisition of the Credit Agricole Indusuez Banks Bangladesh operation. With an unblemished history of nearly a century in the Sri Lankas Banking arena, Commercial Bank has been rated as the Best Bank in Sri Lanka for the 08th successive year by Global Finance magazine – New York and as Bank of the Year Sri Lanka by The Banker magazine – UK for the 05th successive year. Equipped with modern technology and a unique versatility as an efficient service provider, the Banks mission is to deliver optimum value to its customers and all other stakeholders. This bank is market leader and leading financial institution of Sri Lanka. The Bank was selected as the “Best Bank in the Sri Lanka” for the seventh consecutive year by the prestigious US based Global Finance magazine. The bank was also selected as the Bank of the Year 2005 in Sri Lanka by the UK based The Banker Magazine, the fifth successive year for which Commercial Bank received this honor.
Legal Form
A public limited liability company incorporated in Sri Lanka on June 25, 1969, under the Companies ordinance No 51. of 1938 and quoted in the Colombo Stock Exchange in March 1970. A licensed commercial bank under the Banking Act No 30 of 1988.
Principle Activities:
The principle activities of the Bank are banking and related activities such as accepting deposits, personal banking, trade financing, off-shore banking, resident and non-resident foreign currency operations, travel related services, corporate and retail credit, project financing, lease financing, rural credit, issuing of local and international credit cards, telebanking facilities, bancassurance, internet banking, dealing in Government Securities, bullion trading, export and domestic factoring, etc.
Subsidiaries:
The principal activities of the Banks subsidiaries, namely, Commercial Development Co. Ltd., Commercial Bank Primary Dealer Ltd., ONEzero Company Ltd and X-pertise Ltd are property development, dealing in Government securities as a Primary Dealer, providing IT related services and training and development of human resources, respectively. However, Commercial Bank Primary Dealer Ltd ceased its operations as at September 30, 2005, consequent to the Bank obtaining the license to operate as a Primary Dealer. The proceeding for voluntary winding up of the Company in progress.
Associates:
The principal activities of the Banks associates, namely Commercial Leasing Company Ltd, Equity Investments Lanka Ltd, and Commercial Fund Management ( Pvt.) Ltd are leasing and factoring, providing venture capital and fund management, respectively.
Vision of the Bank:
To be THE LEADER in the financial industry in Sri Lanka, having a visible presence in the region by the year 2010.
Mission of the Bank:
To deliver optimum value to our customers, employees, shareholders and the nation.
VIII.
Management:
The bank is managed by highly qualified professionals and board of the directors also highly qualified. Highly qualified directors give strategic plan and formulate policies for the bank. Board comprises of eight Non Executive directors of whom three are nominee directors and one executive director who is the chief executive officer. They encompass a range of talents, skills and expertise required to provide sound and prudent guidance with respect to the operations and interests of the Bank.
Balancing Conformance and Performance in the management:
Enterprise governance is the combination of business governance and corporate governance to ensure that strategic goal are aligned and good management is achieved which would lead to corporate success and value creation. The framework below illustrates the reach of enterprise governance as it constitutes the entire accountability framework of an organization. At commercial bank the management is firmly committed to the highest standards of governance. As shareholders representatives, the board of directors ensure that the activities of the bank are always conducted with the highest ethical standards and in the best interests of all its stakeholders.
The board of directors continues to ensure that the bank conduct itself as a model corporate citizen by specifying corporate values for the bank and stipulating a code of conduct/ethics for the employees ensuring that the employees maintain their dignity and integrity, building customer confidence in the bank. There are several board subcommittees each with a defined scope of work and terms of reference. These committees are responsible for providing independent and expert advise to the board on the subject assigned. The board subcommittee on corporate planning provides guidance on the formulation of the banks corporate plan. In addition all the members of the board of Directors deliberate on the corporate plan and the budget at special board meetings. This process helps the board to focus on strategic direction and to identify its implications for all areas of the business. Implications of strategies and its ongoing relevant and success is then assessed on a regular basis. The bank has compelled with the majority of the good corporate governance practices recommended by The Institute of Chartered Accountants of Sri Lanka and The Central Bank of Sri Lanka.
The History of the Bank:
1920 – The Eastern Bank Ltd. opened a branch office at Chatham Street, Colombo.
1957 – The share capital of Eastern Bank Ltd. was acquired by the Chartered Bank.
1969 – The Commercial Bank of Ceylon Limited was duly incorporated in Sri Lanka (then ceylon) with Eastern Bank holding 40% of its equity.
1971 – The Business of the Eastern Bank Ltd. was taken over by the Chartered Bank.
2003- Started Banking operation in Bangladesh.
2004- Rated as the Best Bank in Sri Lanka by “Global