General Banking Services and Credit Management of Dutch-Bangla Bank Limited

United International University

Internship ReportonGeneral Banking Activities & Credit Management of Dutch-Bangla Bank Limited(A Study on Elephant Road Branch)

Submitted to,James Bakul SarkarAssistant ProfessorSchool of Business

Submitted By:

Name: Md. Shahid HossainID: 111-112-005 Department : BBA in AIS

Date of Submission: General Banking Services and Credit Management of Dutch-Bangla Bank Limited

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Letter of TransmittalNovember 0, 2015

ToMr. James Bakul SarkarAssistant ProfessorSchool Of BusinessUnited International UniversityHouse # 80, Road # 8/A, MirzaGolam Hafiz Road,Dhanmondi, Dhaka-1209, Bangladesh.

Subject: Submission of Internship Report on General Banking Activities & Credit Management of Dutch-Bangla Bank Limited.Dear Sir It is my great pleasure that I have got the opportunity to submit an elaborate report on practical knowledge in bank as per the requirement of MBA program. I have been assigned to work at Dutch-Bangla Bank Limited Elephant Road Branch from November 01, 2015, where I have observed closely and studied different practical aspects of the banking institute. I would like to say it has been a great experience for me to work in the joint venture bank, DBBL, which enrich my practical knowledge of banking sector in Bangladesh. I have tried my level best to put meticulous effort for the preparation of this report. Any shortcoming or flaw may arise as I am a novice in this aspect.

It would be pleasure for me if this report can serve its purpose and I will be available to explain any of your queries if you feel necessary.

Thank you.

Sincerely your

----------------------------------Md. Shahid HossainID: 114-112-005BBA in AISSchool of Business And economicsUnited International University

Students DeclarationI hereby declare that the report entitled Report on the General Banking Service & Credit Management of Dutch-Bangla Bank Limited, Elephant Road Branch is submitted as the partial fulfillment of the degree of Bachelor of Business Administration of United International University of Bangladesh.

It is my original work and is not submitted for the award of any other degree, diploma, and fellowship and that the work has not been published in any journal or magazine.

Md. Shahid HossainID No.: 114 112 005Program: BBA in AISUnited International University (UIU)

Supervisors CertificationIt is my pleasure to certify that Md. Shahid Hossain, ID.114 112 005, student of Business Administration of United International University (UIU) has successfully completed the BBA in AIS Internship program entitled Report on the General Banking Activities & Credit Policy of Dutch-Bangla Bank Limited, Elephant Road Branch. He has completed this work under my supervision and prepared this report according to direction and guidance.

As far I know he tried his best to conduct this successfully. I think this will help him in the future to build up his career.I wish his every success in life.

_____________________Mr. James Bakul SarkarAssistant ProfessorSchool Of BusinessUnited International University

Certificate

This is to certify that Md. Shahid Hossain, ID No.: 114 112 005, BBA in AIS, student of United International University (UIU), Dhaka has been completed the Internship program in our branch from 01.11.2015 to 01.01.2016. During the Internship period, she has acquired the knowledge of General Banking Activities of Dutch-Bangla Bank Limited of our Branch.

We wish him every success in life.

Mr. Md. Abu RashidBranch ManagerDutch-Bangla Bank Limited,Elephant Road Branch.

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Table of Content

Chapter One: Introduction10-13

1.1Introduction10

1.2The Internship10

1.3Origin of the Report11

1.4Objectives of the study11

1.4.1 Primary Objective11

1.4.2Secondary Objective12

1.4.3Business Objectives of DBBL12

1.5Methodology Of The Study

1.5.1Primary Source

1.5.2Secondary Source13

1.6Scope Of The Study

1.7Limitation of The Study

1.8Coverage of The study

1.9Rational of The Study

1.10Organizational Perspective

Chapter Two: Background of The Study15-22

2.1History of Bank15

2.2Banking History Of Bangladesh15

2.3Condition In Banking Sector In Bangladesh16

2.4The History of DBBL16

2.5Missionof Dutch-Bangla Bank18

2.6Vision of Dutch-Bangla Bank20

2.7Slogan20

2.8Business Philosophy20

Chapter Three: General Banking Service of DBBL25-36

3.1About The Dbbl Elephant Road Branch25

3.2Location Of Elephant Road Branch25

3.3General Banking Activities26

3.3.1Account Opening Section26

3.3.2Remittances (Local and Foreign)26

3.3.3Card, SMS alert, Cheque book section26

3.3.4Bills and clearing section27

3.5.5FDR & Pay-Order (PO)27

3.3.6Cash Division27

3.4Strategic Decisions Of Dbbl31

3.5Services & Products31

3.6Dbbl Services Offered32

3.7Atm Network/Dbbl Nexus Participating Banks32

3.8Fast Track33

3.9The Cards33

3.10Corporate Social Responsibility Of Dbbl33

3.11Social work34

3.12Dutch-Bangla Bank Research Center34

Chapter Four: Credit Management of Dutch-Bangla Bank Ltd.38-40

4.1Definition of Credit:38

4.2Factors Related with Credit38

4.3Credit flow of DBBL39

4.4Types of loans and advances offered by DBBL40

4.4.1Corporate Credit Scheme41

4.4.2Retail Credit Scheme

4.5Lending Policies Of Dutch-Bangla Bank Ltd

4.6Lending Procedure of Dutch-Bangla Bank Ltd

4.7General Procedure for Loans and Advances

Chapter Five: Risks Associated With Credit

5.1Risk

5.2Risks in Banking Business

5.2.1Business Risk

5.2.2Management risk:

5.2.3Security Risk:

5.3Risk Management Process

5.4Risk Management

5.5Lending Risk Analysis (LRA)

5.6Credit Assessment And Selection Of Borrower

Chapter Six: Recommendation & Conclusion

6.1Findings Of The Study

6.2Recommendation

6.3Conclusion

6.4Bibliography

EXECUTIVE SUMMARYThis paper has attempted to highlight on an evaluation of General Banking Services and Credit Management of Dutch-Bangla Bank Limited in the context of Dutch-Bangla Bank Limited, elephant road branch. Dutch-Bangla Bank Limited is among the leading commercial banks of the country. The first part of the report discusses the general services offered in the bank and the whole process it goes through to serve its customers in a well-disciplined manner. I have given my best effort to include all the necessary points in order to give a clear understanding about the General Banking.

Lending is one of the principal functions of the bank. Sound lending practice therefore, is very important for profitability and success of a bank. For the sake of sound lending, it is necessary to develop a sound policy and modern credit management techniques to ensure that loans/ advances are safe and the money will come back within the time set for repayment. For this purpose, proper and prior analysis of credit proposals is required to assess the risk. Credit risk grading is one of the basics for risk management and control, as it is the risk factor inherent in every bank businesses and as the quality of credit is essential for sound banking and its reputation. For the effective application of CRG, expertise and willingness as well as motivation of the bankers are needed. And to do that strong criterion must be followed as such in DBBL. This report should be able to give a clear idea about how and what steps a bank has to go through in order to sanction a loan/credit to a company.General Banking Services and Credit Management of Dutch-Bangla Bank Limited

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CHAPTER- ONEINTRODUCTION

1.1 INTRODUCTIONGenerally the word Bank we can easily understand that the financial institution dealing with money. But there are different types of banks like Central Banks, Commercial Banks, Savings Banks, Investment Banks, Industrial Banks, and Co-operative Banks etc. But when we use the term Bank without any prefix, or restriction, it refers to the Commercial banks. Commercial banks are the primary contributors to the economy of a country. So we can say Commercial banks are a profit-making institution that collects the deposits from the surplus unit of the society and then lend the deposits collected to the deficit unit of the society. So the people of the society and the government are very much dependent on the commercial banks as the financial intermediary. As banks are profit-earning concern they collect deposit at the lowest possible cost and provide loans and advances at higher. The differences between two are the profit for them.

Economic history shows that development has started everywhere with the banking system and its contribution towards financial development of a country is the highest in the initial stage. Modern banks play an important part in promoting economic development of a country. Bank provides necessary funds for executing various programs in the process of economic development. They collect savings from large masses of people scattered throughout the country, which in the absence of banks would have remained ideal and unproductive. These scattered amounts are collected, pooled together, and made available to commerce and industry for meeting the financial requirements.

Bank plays a vital role in the economy by providing means of payment and in mobilizing resources. Bank is the most important financial institution in the economy. The economic development of a country depends on the development of banking sector. Todays modern banks are not only providing traditional banking but also expanding the many financial services. Banking sector is expanding its hand in different events every day. As the demand for better services increases day by day, they are coming with different innovative ideas and products.

1.2 THE INTERNSHIPWe the students of Bachelor of Business Administration (BBA IN AIS) in Accounting Information Systems (AIS) study the subjects related to business. The school of business at home and abroad to familiarize each student as they move comfortably in the business environment but only the theoretical study in the classroom is not enough rather a practical experience and the only means of practical experience is internship program. University helps its students by providing placement of internship.

In the business environment, at home and abroad there are lots of financial institution, businesses, firms, and industries, which provide this facility towards us. If we could not get this facility of internship then a wide gaps will take place between our study and experience, I think this is a valuable part of study for us. We the students of business do this usually for three months. In our country, there are many banks particularly the esteemed private banks, and elite business firms provide this. In this respect, I have done my internship in Dutch-Bangla Bank Limited, the one of the most renowned Bank in Bangladesh. I am thankful to the bank for giving me the internship opportunity.

1.3 ORIGIN OF THE REPORTThe internship program is required for the student of BBA IN AIS. It is a program with duration of three months. Students who have completed 117 credits out of 120 credits are eligible for this program. In the internship program, I was attached to the Dutch-Bangla Bank Limited, Elephant Road Branch for three months. During this period, I have learned how the Bank works.

1.4 OBJECTIVE OF THE STUDYThe objective of the study is to gather practical knowledge on banking system and operation. This internship gives us a chance to co-ordinate with the theoretical knowledge and the practical experience and to evaluate the Foreign exchange banking practices in Bangladesh- A case study of Dutch-Bangla Bank Ltd. and also the performance of general banking this Bank. The following are of objectives for internship in bank:

1.4.1 Primary ObjectiveThe primary objective of the study is to complete the partial requirement of the awarding of the BBA in AIS degree from the school of business & economics, United International University. The objective is to prepare & submit a report on the topic of General Banking Services and Credit Management of Dutch-Bangla Bank Limited." The primary purpose of this report is to get an idea about the general banking practices on the banking sector of Bangladesh.

1.6.2 Secondary Objective To apply theoretical knowledge in the practical field. To be familiar with the banking management system. To have exposure to the functions of general banking section. To analyze the service procedure of Dutch-Bangla Bank Ltd. To know the return on remittance. To familiarize the working hours, values and environment of the bank. To analyze the financing system of the Bank and find out whether the bank needs any improvement. How the loans are processed To find out the contribution of private commercial banks for the economic development of the country.

1.5 METHODOLOGY OF THE STUDYFor preparing this assignment we have used different kind of magazines, journals, daily newspapers. In addition to we have taken help from the websites related with this topic.In order to make the study more meaningful and presentable, two sources of data and information will be used widely. The sources of data are:

1.5.1 Primary Sources: Some data are collected from officials and some data are collected from client. Face-to-face conversation with the respective officials. Informal conversation with the Client. Practical work experience on different desks of the unit. Relevant file study as provided by the officers concerned.

1.5.2 Secondary Sources: Annual reports of Different Banks 2011, 2012,2013,2014,2015. Periodical publications by DBBL. Different books, training papers, manuals, Newspapers and Journals. Bangladesh Bank Annual Report-2015 and website of Bangladesh Bank. Article published by DBBL.

1.6 SCOPE OF THE STUDY Area of the Report: the basic area for the report is analyzing the activities and performance of general banking and credit management operation of Dutch-Bangla Bank Limited considering Elephant Road Branch. In this work the overall view of the general banking system, history and Mechanism, policies and appraisal of Dutch-Bangla Bank Limited and other activities are extensively analyzed and the finding s are clarified along with depth study.

Time and Duration: The time of my internship has started from November 01, 2015 and I was appointed for or three months internship program. There was also a placement of different departments within the time. There I had to work in credit & general banking department desks as a routine work. It was difficult to collect the information relevant my report, because the people of this Bank was so busy with their duty that they cannot be able to give me much time. Here I try to cover the activities and rules and regulation related to my report.

1.7 LIMITATIONS OF THE STUDYAlthough I have obtained wholehearted cooperation from employee of Dutch-Bangla Bank Ltd, Elephant Road branch but they were extremely busy. So they were not able to give me much time, as they and I would like. Besides, total duration of internship is not sufficient to give me more than a superficial idea of the functioning of the various departments. I was rotated through on the way of my study. I have faced the following problems, which may be termed as the limitation/short coming of the study. These are as follows:

It was very different to collect the information from various personnel for the job constrain. Bank policy was not disclosing some data and information for obvious reasons. Due to time limitation many of the aspects could not be discussed in the present report. Since the bank personnel where very busy, they could provide me little time. Another significant problem faced during the preparation of this report was the contradictory explanation of a single subject by different employee. Because of the limitation of information some assumption was made. So there may be some personal mistakes in the report. The time 2 months out of 3 months only, which is in sufficient to know all activities of the branch are prepare the report. The insufficiency of information was not adequately available. Moreover, the sources were hazardous and in-discipline. Therefore the providence of insufficient information came out as a constraint. Long internship was not able to provide us with adequate time to impose more databases sophistic to the formulation of this report. During the internship, in many part of our enquiry, our performance was hindered by some sort of inexperience of some of the personnel of the bank due to lack of orientation to the procedure of such internees. There was no remuneration for our internship that demoralizes our motivation to keep consistency in our extensive study. Sometimes we had to face unexpected conduct on the part of some of the personnel that was supposed to be a little bit more cordial. The study was limited only to the Dutch-Bangla Bank Ltd. Another Problem was time constraints. The duration of my work was only three months. But this time is not enough for a complete and fruitful study. Getting financial information is very hard job. The Bank was a busy one having heavy rush of people, whom officers need to deal with. So allocation of time for an internet is very much tough for the officers of the bank. Although there are a lot of limitations, I have tried to put my best effort as far as possible to prepare the report.

1.8 COVERAGE OF THE STUDY To obtain practical experience about foreign exchange activities by involving Internship program. To build professional carrier in the banking sector as well as any financial institution. To know about the general banking activities in Bangladesh.1.9 RATIONALE OF THE STUDYBangladesh is one of the underdeveloped countries in the world. The company of the country has a lot left to be desired and there are lots of scopes for massive improvement. In an economy like this, banking sector can play a vital role of an intermediary can mobilize the excess fund of surplus sector to provide necessary finance, to those sectors, which are needed to promote for the sound development of the economy. Like in many other emerging market economies, commercial banks in the Bangladesh economy are to face an increasing competition for their business in the coming days. Their business will no longer remain easy as they had earlier the real change in the banking business has started to come with govt.s decision to allow the business in the private sector in the middle of the eighties. This report is an effort to reflect a clear idea about the strategies, activities and performance of Dutch-Bangla Bank Ltd Bangladesh Ltd. Regarding Foreign exchange banking practices in Bangladesh- A case study of Dutch-Bangla Bank Ltd (Elephant Road Branch), Dhaka.

1.10 ORGANIZATIONAL PERSPECTIVEDutch-Bangla Bank Ltd. (DBBL)is the first Bangladesh- European joint venture commercial bank incorporated on July 04, 1995 under the Companies Act 1994. It is a public company limited by shares. With the permission of Bangladesh Bank, it commenced its commercial banking operation on June 03, 1996. The head office of Dutch-Bangla Bank Ltd is at Sena Kallyan Bhaban (4thfloor), 195, Motijheel C/A, Dhaka-1000. DBBL conducts all types of commercial banking activities and renders all types of personal and corporate banking services to the customers of all strata of the society within the framework of Bank Companies Act 1991 and rules and regulations laid down by Bangladesh Bank from time to time. The Netherlands Development Finance Company (FMO) of the Netherlands is the international sponsor of the Bank. The FMO is the Dutch Development Bank of the Netherlands specialized in financing of private enterprises in Asia, Africa, Latin America and Eastern Europe. Under a technical assistant grant from the FMO, ABN-AMRO Bank of the Netherlands provided technical assistance to Dutch-Bangla Bank Ltd.

CHAPTER- TWOBACKGROUND OF THE HISTORY

2.1 HISTORY OF BANKA bank is a financial institution licensed by a government. Its primary activities include providing financial services to customers while enriching its investors. Many financial activities were allowed over time. The level of government regulation of the banking industry varies widely, with countries such as Iceland, having relatively light regulation of the banking sector, and countries such as China having a wide variety regulations but no systematic process that can be followed typical of a communist system. The name bank derives from the Italian word banco desk/bench, used during the Renaissance by Jewish Florentine bankers, who used to make their transactions above a desk covered by a green tablecloth. However, there are traces of banking activity even in ancient times.

In fact, the word traces its origins back to the Ancient Roman Empire, where moneylenders would set up their stalls in the middle of enclosed courtyards called macella on a long bench called a bancu, from which the words banco and bank are derived. As a moneychanger, the merchant at the bancu did not so much invest money as merely convert the foreign currency into the only legal tender in Romethat of the Imperial Mint. The earliest evidence of money-changing activity is depicted on a silver drachm coin from ancient Hellenic colony Trapezus on the Black Sea, modern Trabzon, and c. 350325 BC, presented in the British Museum in London. The coin shows a bankers table (trapeza) laden with coins, a pun on the name of the city.

2.2.BANKING HISTORY OF BANGLADESHThe banking system at independence consisted of two branch offices of the former State Bank of Pakistan and seventeen large commercial banks, two of which were controlled by Bangladeshi interests and three by foreigners other than West Pakistanis. There were fourteen smaller commercial banks. Virtually all banking services were concentrated in urban areas. The newly independent government immediately designated the Dhaka branch of the State Bank of Pakistan as the central bank and renamed it the Bangladesh Bank. The bank was responsible for regulating currency, controlling credit and monetary policy, and administering exchange control and the official foreign exchange reserves. The Bangladesh government initially nationalized the entire domestic banking system and proceeded to reorganize and rename the various banks. Foreign-owned banks were permitted to continue doing business in Bangladesh. The insurance business was also nationalized and became a source of potential investment funds. Cooperative credit systems and postal savings offices handled service to small individual and rural accounts. The new banking system succeeded in establishing reasonably efficient procedures for managing credit and foreign exchange. The primary function of the credit system throughout the 1970s was to finance trade and the public sector, which together absorbed 75 percent of total advances. The governments encouragement during the late 1970s and early 1980s of agricultural development and private industry brought changes in lending strategies. Managed by the Bangladesh Krishi Bank, a specialized agricultural banking institution, lending to farmers and fishermen dramatically expanded. The number of rural bank branches doubled between 1977 and 1985, to more than 3,330. Denationalization and private industrial growth led the Bangladesh Bank and the World Bank to focus their lending on the emerging private manufacturing sector. Scheduled bank advances to private agriculture, as a percentage of sects oral GDP, rose from 2 percent in FY 1979 to 11 percent in FY 1987, while advances to private manufacturing rose from 13 percent to 53 percent. The transformation of finance priorities has brought with it problems in administration. No sound project-appraisal system was in place to identify viable borrowers and projects.

Lending institutions did not have adequate autonomy to choose borrowers and projects and were often instructed by the political authorities. In addition, the incentive system for the banks stressed disbursements rather than recoveries, and the accounting and debt collection systems were inadequate to deal with the problems of loan recovery. It became more common for borrowers to default on loans than to repay them; the lending system was simply disbursing grant assistance to private individuals who qualified for loans more for political than for economic reasons. The rate of recovery on agricultural loans was only 27 percent in FY 1986, and the rate on industrial loans was even worse. As a result of this poor showing, major donors applied pressure to induce the government and banks to take firmer action to strengthen internal bank management and credit discipline. As a consequence, recovery rates began to improve in 1987. The National Commission on Money, Credit, and Banking recommended broad structural changes in Bangladeshs system of financial intermediation early in 1987, many of which were built into a three-year compensatory financing facility signed by Bangladesh with the IMF in February 1987. One major exception to the management problems of Bangladeshi banks was the Grameen Bank, begun as a government project in 1976 and established in 1983 as an independent bank. In the late 1980s, the bank continued to provide financial resources to the poor on reasonable terms and to generate productive self-employment without external assistance. Its customers were landless persons who took small loans for all types of economic activities, including housing. About 70 percent of the borrowers were women, who were otherwise not much represented in institutional finance. Collective rural enterprises also could borrow from the Grameen Bank for investments in tube wells, rice and oil mills, and power looms and for leasing land for joint cultivation. The average loan by the Grameen Bank in the mid-1980s was around Tk 2,000 (US$65), and the maximum was just Tk18, 000 (for construction of a tin-roof house). Repayment terms were 4 percent for rural housing and 8.5 percent for normal lending operations.

The Grameen Bank extended collateral-free loans to 200,000 landless people in its first 10 years. Most of its customers had never dealt with formal lending institutions before. The most remarkable accomplishment was the phenomenal recovery rate; amid the prevailing pattern of bad debts throughout the Bangladeshi banking system, only 4 percent of Grameen Bank loans were overdue. The bank had from the outset applied a specialized system of intensive credit supervision that set it apart from others. Its success, though still on a rather small scale, provided hope that it could continue to grow and that it could be replicated or adapted to other development-related priorities. The Grameen Bank was expanding rapidly, planning to have 500 branches throughout the country by the late 1980s. Beginning in late 1985, the government pursued a tight monetary policy aimed at limiting the growth of domestic private credit and government borrowing from the banking system. The policy was largely successful in reducing the growth of the money supply and total domestic credit. Net credit to the government actually declined in FY 1986. The problem of credit recovery remained a threat to monetary stability, responsible for serious resource misallocation and harsh inequities.

Although the government had begun effective measures to improve financial discipline, the draconian contraction of credit availability contained the risk of inadvertently discouraging new economic activity. Foreign exchange reserves at the end of FY 1986 were US$476 million, equivalent to slightly more than 2 months worth of imports. This represented a 20-percent increase of reserves over the previous year, largely the result of higher remittances by Bangladeshi workers abroad. The country also reduced imports by about 10 percent to US$2.4 billion. Because of Bangladeshs status as a least developed country receiving concession loans, private creditors accounted for only about 6 percent of outstanding public debt. The external public debt was US$6.4 billion, and annual debt service payments were US$467 million at the end of FY 1986.

2.3. CONDITION IN BANKING SECTOR IN BANGLADESHBankers believe that the Bangladesh Bank is entirely responsible for such condition in the banking sector. As per their opinion, in the past seven months of 2010 Bangladesh Bank increased the CRR -- The banks' mandatory rate of reserve to the central bank twice. Because of this, approximately Tk 40 billion came to the central bank from the banks. As a result liquidity crisis began in the banking sector. As a result, in the first month of this year the rate of interest in the call money market climbed up to 170 percent that is recorded as the highest until now Dr Saleh Uddin Ahmed, former governor of the Bangladesh Bank, said that the initiative of the central bank to increase CRR was not proper and was not a timely step. He said that the reason was that in December, the banks adjust their entire year's transaction. In this time, they normally disbursed less amount of credit and collected greater amount of deposits, he stated.

As a result, their balance sheet remained in good shape, he said. But as CRR rate was increased at that particular time, banks had to keep their deposited money with the central bank on mandatory basis, he stated. He said that the result had been as it was predicted. According to the analysts, the central bank has to take responsible decisions for getting rid of this situation occurred in the banking sector. Otherwise they are anticipating that the crisis in the banking sector will have a negative impact on the overall economy.

2.4 THE HISTORY OFDBBLDutch-Bangla Bank Limited is a brainchild of its chairman Mr. Mohammed Shahabuddin Ahmed. He dreamed it long back, when he had been trying to arrange fund for Tamijuddin Textile Mills Limited (TTML) AND Kader Synthetic Fibers Limited (KSFL) through the traditional banking system. Those projects were implemented, but had to face time and run over due to procedural delay in getting access to credit facilities, among others, this might be a good reason for thinking about a bank where the entrepreneurs will have easy access to modern banking services. Mr. Ahmed has had a close relationship with FMO, the Netherlands Development Finance Company since 1983. He opened a dialogue with FMO regarding the banking project in 1989. Mr. Groosman , a brilliant officer of FMO visited Bangladesh and wrote to Mr. F. J. Smit, Deputy Managing Director of FMO about Mr. Ahmeds proposal. FMO sent fact finding terms that initially responded negatively and commented that is little scope in Bangladesh to float a banking business. But Mr. Ahmed dont give up, rather he started exploring more vigorously. At last Mr. E. H. J. Groot of small scale department of FMO in his letter dated December 07, 1992 responded positively indicating, Small Enterprises Department of FMO is in a position to finance intermediary bank and accordingly asked for a business plan. In the year 1995, Bangladesh Bank in their letter no. DBOD (D) 200/59-7999/95 dt. 23/07/1995 issued consent for establishing the bank.

2.5 MISSIONOF DUTCH-BANGLA BANKThe main element that brings success for a bank is customer satisfaction, state of the art products and services, competence and efficiency that based on professionalism. For this purpose, DBBL has remained dynamic in its continued efforts to improve and increase core competency and service efficiency by constantly upgrading product quality, service standards, protocol, and their effective participation in making use of the state of the art technology. Global banking has changed rapidly and DBBL has worked hard to adapt to these change. The bank looks forward with excitement and commitment to bring greater benefits to customers. DBBL has given services to Bangladesh through active financial participation in all segments of the economy, trade and commerce, Industry, service etc.

2.6 VISION OF DUTCH-BANGLA BANKDutch-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. Global Banking has changed rapidly and DBBL has worked hard to adapt to these changes. The bank looks forward with excitement and a commitment to bring greater benefits to customers. DBBLs main vision is to dedicate their service to the nation through active financial participate in all segments of the economy, Industry, trade & Commerce, Agriculture, and Service Sector etc.

2.7 SLOGANThe Corporate Slogan of DBBL is - Your Trusted Partner. Dutch Bangla Bank Ltd as the name implies, is not a new type of bank in some countries on the global, but is the first of its kind in Bangladesh. It believes in togetherness with its customers, in its march on the road to growth and progress with services. They focus on trust customer to bank. To achieve the desired goal, it has intention to pursuit of excellence at all stages with a climate of continuous improvement. Because it believes, the line of excellence is never ending. It also believes that its strategic plan and business networking will strengthen its competitive edge over in rapidly changing competitive environment. Its personalized quality services to the customers with the trend of constant improvement might be cornerstone to achieve its operational success.

2.8 BUSINESS PHILOSOPHY The DBBLs corporate philosophy is to build its non-funded face and commission income stream, thus reducing its reliance on interest income alone. By providing a one window service to its customers- the Bank is committed to being a sophisticated, prominent and professional institution. During the first five years Dutch Bangla Banks strategy was focused on continuing in provident of internal procedures and operating structures, to have a greater control on the quality of its business and to provide better management direction.DBBLs focus is to provide one counter service to its clients covering: Commercial Banking (Deposit Accounts) Customer banking (Retail Banking) Traveler Cheques Foreign and Inland Remittance Financial Services Corporate banking Asset and liability management Liquidity and capital Resources Management Information Technology Human Resource

CHAPTER-THREEGENERAL BANKING SERVICE OF DBBL

3.1 ABOUT THE DBBL ELEPHANT ROAD BRANCHDutch-Bangla Elephant Road Branch is located at 118/3,Dr. Kudrat-E-Khuda Road, Elephant Road, Dhaka-1205. General banking is the starting point of all the banking operations. General banking is the front-side banking service department. It provides those customers who come frequently and those customers who come one time in banking for enjoying ancillary services. In some general banking activities, there is no relation between banker and customers who will take only one service from bank. Every day it receives deposits from the customers and meet s their demand for cash by honoring cheques. It opens new accounts, remit funds, issues bank drafts and pay orders etc. Since bank is confined to provide the services every day. General banking is also known as retail banking. On the other hand, there are some customers with who bank are doing its business frequently

3.2 Location of ELEPHANT Road BranchAddress:118/3,Dr. Kudrat-E-Khuda Road, Elephant Road, Dhaka-1205

Phone No :(8802)8631875, 9675498

Mobile No :01713049306

Fax No :(8802) 8653545

E-mail :dbbl_br126@dbbl.com.bd

Manager in Charge :Md. Abu Rashid

Manager's Designation:Senior Assistant Vice President

Opening Date :07-12-2005

Number of ATMs :64

Branch working hours :10:00 AM To 04:00 PM

3.3 GENERAL BANKING ACTIVITIESGeneral banking is the starting point of all the banking operations. It is the department, which provides day-to-day services to the customers. Every day it receives deposits from the customers and meets their demand for cash by honoring cheques. It opens new accounts, close accounts, reactive accounts, and counsels for the new depository accounts. It also remits funds, transfers funds by pay order and easy pay. Since bank is confined to provide the services everyday general banking is also known as retail banking. Account opening section Remittances (Local and Foreign) Card, sms alert section Bills and clearing section FDR & Pay-Order (PO) Cash Division Other activities 2.3.1 ACCOUNT OPENING SECTIONOne of the vital sections under general Banking is the account opening section. Banker-customer relationship begins through this section. Various tasks are performed in this section. The relationship between customer and banker beings involve with the opening of an account by the customer. Opening an account binds banker and customer into contractual relationship. All kinds of fraud and forgery state by opening an account. So, the bank should take extreme caution in selecting customers.

Current Account Opening:Current Account basically can open the business holder. A current deposit account may be operated in several times during a working day. There is no restriction on the number and the amount of withdrawals from a current and banker does not allow any interest on this account. It is important to mention here that DBBL has imposed interest on current account recently, which is a unique offer in the banking industry.As the banker is under obligation to repay these deposits on demand, they are called demand liabilities of a banker. To meet such liabilities the banker keeps sufficient cash reserves against such deposit. There are two facilities for the person who opens a current account. They are: Overdraft facility Collection of check transfer of money rendering agency, general utility service.A person can open a current account or any entity the entry can be a partnership firm, Ltd, company, proprietorship firm, association, clubs etc. for opening a current a/c of the above, the requirements and steps, which are followed by this branch are the following

For a person:There is an individual application from for opening personal current account. The person, who wants to open this type of a/c, is said to fulfill the following requirements: Name, fathers/husbands name Occupation Mandate in writing Declaration of nominee( Nominee should be first blood) Letter of introduction Introducer Specimen signature Two copies of passport size photographs Initial deposit of Tk 1000.

For Joint stock companies, Association, Clubs etc:In case of opening a current a/c of joint stock companies, association, clubs etc, the following requirements are said to fulfill: True copies of certificate of incorporation or registration True copies of certificate of commencement of business (in case of limited companies only) True copies of memorandum and articles of association ( in case of limited companies) Regulation by laws (in case of associations, clubs etc) True copies of resolution of the board of Directors of Managing committee/Governing body, regarding conduct of a/c. Certificate list containing names and signature of Directors/Officer bearers. For Partnership/Proprietorship Company:To open a current a/c on the name of any partnership or proprietorship company, the following documents are required: Filled up application from stating about the name and address of the firm. Partnership deed. Trade license. Introducer Signature both form and 2 passport size photo. Two copies of photograph. Endorsement of an a/c holder on the same branch. Undertaking / declaration about the partnership is taken by the bank in a write paper ( for proprietorship firm)

For public and private limited company:The documents required to open a current a/c will be: Copy of certificate of incorporation or registration, trade license. Copies of the Certificate of Business. True copy of memorandum of association and articles association abide by the law. True copy of resolution of the board of Directors / Managing Directors /Governing Body regarding conduct of the a/c. Certificate list containing names and signature of Directors/Officer bearers. In order to open an account, the customer is first of all asked to fill up the application form given from the bank. The bank requires few documents of the client due to the procedure, such as proposal for opening an account, name and full address, occupation.

Saving Account Opening:A saving is meant for the person of the lower and middle classes who wishes to save a part of their income to meet their future needs and intend to earn an income from their saving. Generally DBBL offers 4% on interest rate of savings account. A person cans transaction easily day to day and save their money to the bank.The Procedure of Savings Account Opening is as follows: The bank offers a reasonable rate of interest. The necessary steps for opening a saving a/c. Names and Addresses of the party. Occupation. Copy of utility bills most recent Fathers / Husbands name Mandate in writing. Declaration of nominee (Nominee should be first blood). Letter of introduction. Power of attorney. Specimen signature. Two copies of passport size photograph. Initial deposit of Tk 500. In this, the deposit supplied with the pass and checkbook for depositing and withdrawal purpose of money for which the banker maintain saving bank a/c opening register.

Excel Account: DBBL offers another type of account called Excel account. This account is applicable only for students. This account has given the opportunity for the student with minimum charges tk only 230 per year. The branch Code of Elephant road is 171 and the excel account code is 105. In other types of account like Savings, Current these accounts the yearly charges is high but in this excel account or student account has given more facility to the customers. But one disadvantage in this account that is no cheque book will be given to the customers .The account procedure all are same but here, the student Id must be shown to the officer.

Requirement for opening Excel A/C Applicants two copies of passport size photographs from individual are taken. Applicants must submit their citizenship certificates: valid passport or NID copy or S.S.C registration card. Student ID card copy. Introducers signature and accounts number and A/C name verified by legal officer. Nominee name, NID card, signature and photograph one copy. Nominee must be first blood. Applicant also submit a copy of utility bill that means Electricity bill or Gas bill or Water bill for mention the present address. If UIU student the utility bill copy is not needed.

Power A/C:The Power account also name is called salary account .The person who are involved with service they can open salary or power account. Elephant Road Branch they are linked up with different organization to open a power account. They are also linked up with UIU. The code of power account is 103.Requirement for opening Power A/C Applicants two copies of passport size photographs from individual are taken. Employees DBBL ID card copy Applicants must submit their citizenship certificates: valid passport or NID copy or S.S.C registration card. Forwarding letter must be needed. Introducers signature and accounts number and A/C name verified by legal officer. Nominee name, NID card, signature and photograph one copy.Nominee must be first blood.

3.3.2 Remittances (Local and Foreign)The general banking of Elephant road branch has included the Remittance section .In this section the officer provide money to the customers. The total amount of money which is comes from foreign country. There are some issues that are given below: Demand Draft (DD). Telegraphic Transfer (TT). Remittance through Western Union, Express money, Janata Express, etc. Mail Transfer (MT).

Demand Draft (DD)Demand Draftis an order of issuing bank on another branch of the same bank to pay specified sum of money to payee on demand. A demand Draft is a written order of one branch upon another branch of the same bank to pay a certain some of money to or to the order of specified person Payment is madefrom ordered branch. Generally remit fund outside the clearinghouse area of issuing branch. Payee can also be the purchaser. Bank confirm through checking the Test Code Bank charge a commission and telex charge for it. Drafts are not issued payable to bearer in practice drafts are not to be drawn between branches within the same city. Draft drawn by one branch of bank on another payable to order where any draft is an order to pay money drawn by one on a bank upon another office of the same bank for a sum of money payable to order on demand, purports to be endorsed by or on behalf of the payee, the bank is discharged by payment in due t course.

Charges taken for the draftTk. 50.00 as postage charge is taken and no commission is charge for this purpose. The postage charge credited to the concern stamp account.

Cancellation of a DDIf the holder of the instrument wants to cancel it, he should submit a request letter in this regard. Issuing branch then sends an I.B.D.A. to the drawn on branch against the I.B.C.A., which was sent previously.

Duplicate DDWhen DD is lost a duplicate instrument is given subject to fulfillment of the following requirements: Tk. 50.00 indemnity bond issued from the court. After losing the instrument, holder should immediately inform it to the bank that puts stop payment mark on the register. Mail TransferIssuing branch requests another branch to pay specified money to the specific payee on demandby Telegraph /Telephone. Payment is made from ordered branch. TT can be remit anywhere in the country. Bank charge a commission plus telephone charge. However this service is available only for a limited number of customers.Where the remitter desires the banker to remit the funds to the payee instead of purchasing a draft himself, the banker does it through a Mail Transfer Advice. The transfer is so called as the advice is dispatched to the paying office by ordinary mail. The payee must have an account with the paying office as the amount remitted in such a manner, is meant for credit to the payees account and not for cash payment.

Telegraphic TransferTT is affected by tile bank through tested telex message attested by secret check Signal on receipt of which tile paying officer pay the amount to the payee in cash through a telegraphic payment order or credit his account, as the case may be.DBBL follows the following procedures:i)The customer deposits money with DBBL to be sent.ii)The customer obtains a cash memo containing TT serial number.iii)TT serial number, notifying part name is mentioned in the telex message.iv) The Telex Department confirms transmission of the telex.

Transfer of accountIn this section the Account holder can transfer his/her account from one branch to another branch. For this transfer of account he / she must apply to the manager of the branch where he is maintaining his account. Then the manager sends a request to the manager of the branch where the account holder wants to transfer to his account. With his request, he sends original copy of account opening application and specimens signature sheet and the photocopy of application for transferring the account with the balance remained in the account.

3.3.3 Card, Sms Alert, Cheque Book SectionIn this section the officer provide the card to the customers. Customers can be new account holder so after the opening account a customer gets the card instantly. There are some issues that are involved in this section: Providing new ATM card To give new Cheque book To give new Pin Number SMS alert Internet Banking Cheque book To facilitate withdrawals and payment to third parties by the customer, DBBL provides cheque book to the customer. CD account cheque book contains 20 and 50 leaf, while SB account cheque book has 10 leafs. Bank maintains a separate register in this regard. Requisition slip is provided to the customer in cheque book to issue new cheque book. A new cheque book should be delivered only to the account holder. Otherwise, authorization letter is needed from client for delivery to other person.

Issuance of Cheque Book:General Service Division of Head Office will supply required Cheque Books to branches against their requisition from time to time. On receipt of these cheque books/ other security stationery, the branch shall record the stock in the Security Stationery Stock Register. While recording the stock, the Prefix number shall invariably be mentioned. A few Cheque Books required for current consumption of the Deposit Department shall be taken out from the main stock under control of an authorized officer. The concerned issuing officer will keep these cheque books in a box under lock and key and issue the same to the clients during the day. The Cheque Books will be entered in the Cheque Book Issue Register and be issued to clients against their acknowledgement in the register. Separate folios will be opened in the Cheque Book issue Register for CD/ SB/ STD account cheque books. When a cheque book is required by a new customer, the cheque requisition slip pasted on top of each cheque book is to be got signed by him. The officer responsible for issuing cheque book shall get the signature of the account holder verified from the officer in-charge of the Deposit Department and issue the cheque book to the customer after putting his initial in the cage of cheque series subject to the condition that account opening form is complete in all respects and otherwise in-order. The requisition slip shall be sent to the respective Computer Terminal for posting in the respective account. All subsequent Cheque Books shall be issued against Cheque Requisition Slips extracted from the previous cheque books issued to the customer; however, the requisition slip pasted with subsequent cheque book on its first page shall be destroyed. The cheque requisition slip duly filled in by the customer shall be forwarded to cheque posting Terminal to ascertain : The average balance maintained by the customer. Whether previous cheque leaves are properly consumed. Cheques are not frequently returned for insufficient funds in the account. Payment of Cheque is not frequently stopped. The manner in which the account is operated. The account is not dormant.If any of the defects is noticed by posting officer, he/ she shall make remark on the requisition slip and forward it to Cancellation Officer who will decide whether cheque book should be issued to the customer. In cases, where the account is found in order and the party is known, the cancellation officer shall verify the signature on the slip and send it back to cheque book issuing officer for issuance of the same. In case of a Dormant Account, the party shall call on the Manager personally for identification purpose. The Manager on being satisfied about the confides of the applicant shall allow issuance of cheque book. In case of slightest difference in signature or suspicion aroused about the confides of the person presenting the cheque requisition slip, proper inquiries shall be made by contacting the account holder. The officer must be satisfied before finally issuing the cheque book. In case where requisition slip extracted from a previous cheque book is not presented, every possible care shall be exercised to establish the confides of the case, particularly when address of a constituent has been recently changed and/ or a simultaneous request to change the address is made.

When Cheque Book is LostA guarantee form is taken from the account holder when his book is lost, where he indemnifies the bank in this regard. A new requisition sleep is given to him for a new cheque book. Only a very senior officer will approve the case.

Crediting interestCrediting interest implies that so for interest accrued is attached with the principal amount. In practice of DBBLa. FDR interest is credited at the maturity date.b. For SB account the crediting season is six-month period.c. Interest of STD is credited after each year.

TaxWhatever the amount of interest is accrued 10% tax is debited from the account at the time of crediting interest.

3.3.4 Bills and clearing sectionIn this section the officer collect the cheque and sent those cheque to the Bangladesh bank house that is clearing. Clearing is a system by which a bank can collect customers fund from one bank to another through clearing house .Clearing House is a place where the representatives of different banks get together to receive and deliver cheque with another banks. There are some types of clearing section .These are as follows:

Clearing:As far as safety is concerned, customers get crossed cheque for the transaction.As we know crossed cheque cannot be encased from the counter; rather it has to be collected through banking channel i.e. clearing. For example, a client of DBBL Bank received" a cheque of another bank, which is located within the clearing range; deposit the cheque in his account at DBBL Bank. Now DBBL Bank will credit his account and collected it. Though the amount is credited in the customer's account but he will not get the money until he cheque is honored.

Types of Clearing Outward Clearing Outward clearing means when a particular branch receives instrument drawn on the other bank within the clearing zone and those instruments for collection through the clearing arrangement is considered as outward clearing for that particular branch.

Inward Clearing: When a particular branch receives instruments which on them and sent by other member bank for collections are treated as inward clearing.

Clearing houseClearing House is a place in the Central Bank where different banks come to settle their interrelated liabilities. Clearing House System The mechanism of working at a Clearing House in general is as follows:

Every Rank of the locality, which is a member of (he clearinghouse, prepares Bank-wish list of cheques after receive from customers and drawn on different Banks of the locality. An officer, in charge of clearinghouse, goes to the clearinghouse in the morning with the cheques and their list. He delivers the cheques to the officials of the respective banks. Similarly, he also receives the cheques drawn on his Bank from the officials of the other banks. The official of each bank computerizes the final balance, payable or receivable by his Bank alter taking into account the various amount of receipt and payment. The official return of their respective Dank to meet again in the afternoon to return any dishonored instruments to the officials of the respective Banks. The final settlement is effective by the supervisor of the clearinghouse by debiting or crediting, as the case may be, the accounts of the respective Banks as maintained with the clearinghouse.

Outward Bills for Collection (OBC):Customers deposit cheque, drafts etc. for collection, attaching their deposit slip. Instruments within the range of clearing are collected through local clearinghouse. But the other, which is outside the clearing range, is collected through OBC. Then they will forward the bill to that particular branch.

3.3.5 FDR & Pay-Order (PO)A fixed deposit account is repayable after the expiry of a predetermined period fixed by the customer himself. The period varies from three months to three years. The customer may open his/her account for different time periods, which may be for three months, six months, one year, two years and three years. Pay Ordergives the payee the right to claim payment from the issuing bank. Payment is made from issuing branch only. Generally remit fund within the clearinghouse area of issuing branch. Bank charges only commission for this. However party must have an account with the bank, so that whenever the fund refund they (party) can collect it. But for the student and the pay order for job purpose of any applicant, account with the bank is not mandatory.

Pay-Order (PO)Pay Ordergives the payee the right to claim payment from the issuing bank. Payment is made from issuing branch only. Generally remit fund within the clearinghouse area of issuing branch. Bank charges only commission for this. However party must have an account with the bank, so that whenever the fund refund they (party) can collect it. But for the student and the pay order for job purpose of any applicant, account with the bank is not mandatoryThe PO is used for making a remittance to the local creditors. The procedures for selling a PO are as follows: Deposit money by the customer along with application form. Give necessary entry in the Bills Payable register where Payee' name, address, date, PO No. amount is mentioned. Prepared the instrument. After scrutinized and approved the instrument by authority, it is delivered to customer. Signature of customer is taken on the counterpart and register customer's signature part.

Fixed Deposit Accounts:A fixed deposit account is repayable after the expiry of a predetermined period fixed by the customer himself. The period varies from three months to three years. The customer may open his/her account for different time periods, which may be for three months, six months, one year, two years and three years.Though FDR is an A/c, it is something different from other a/c. FDR is a long term deposit. Usually customers are allowed to open this a/c for a certain period. The rate of interest varies in accordance with the terms of deposit. Requirement for opening FDR Applicants one copy of passport size photographs from individual is taken. Applicants NID copy. Nominee name, NID card, signature and photograph one copy. Nominee must be first blood.

Opening Of Fixed Deposit Account (FDR) The depositor has to fill an application form. In case of a deposit in joint name, DBBL also takes the instructions regarding payment of money on maturity of the deposit. The banker also takes the specimen signatures of the depositor(s). Necessary entries are given on the FDR register and on line. An FDR is then issued to the depositor acknowledging receipt of the sum of money mentioned therein. It also contains the rate of interest & the date on which the deposit will mature.

Premature Encashment of FDR:A depositor has the right to claim for refund of his deposit before expiry of the fixed term thereof. Bank may in special consideration allow premature encashment on application of the deposit subject to the under noted condition: For FDR which are 3 months maturity no interest will be payable at premature encashment, only the principle amount will be refunded. When premature encashment is allowed of and FDR with tenure of over 3 months, interest will be paid if enchased before expiry of 6 months at the rate of 3months prescribed interest rate. Premature encashment is allowed of and FDR with tenure of over 6 months, interest will be paid if enchased before expiry of over 12 months at the rate of 6 months prescribed interest rate and the same theory will also be applicable for premature FDR encashment of 2 years and 3 years. Short Term Deposit:Special notice account which is commonly known as short term deposit a/c will keep in the short term ledger. The customer should dully sign a/c opening form and specimen signature card. Deposits held in this account are payable on short notice. Normally corporate bodies, bank and financial organizations invest their funds temporarily. Now-a-days, private individuals having sound financial means also open this type of deposit accounts. Customers deposit money for a shorter period of time. STD account can be treated as semi-term deposit STD should be kept for at least thirty days to get interest. The interest offered for STD is less than that of savings deposit. In practice, DBBL offers 5.00% rate of interest (half yearly compounding) for STD account. It may increase depending on the fund. Volume of STD A/C is generally high. In DBBL, various big companies, organizations, Government Departments keep money in STD accounts.Frequent withdrawal is discouraged and requires prior notice.

Monthly term Deposit:It is an innovative offer of DBBL, which is a scheme like FDR but in different definition. In this scheme the MTD holder can withdraw the interest amount after end of each month where principle amount will remain as usual. Different interest ofDBBL is as follows.

PERIODINTEREST RATE

1 month (MTD)5%

3 months5%

6months7%

1 year7%

Figure: Data of March 2015

Lost of FDR:If the instrument is lost from the possession of the holder, the holder is asked to fulfill the following requirements: Party should inform it to the bank immediately; Furnish an Indemnity Bond; On fulfilling the above requirements, a duplicate FDR is then issued to the customer by the bank. Renewal of FDR: FDR is automatically renewed within seven days after the date of its maturity if the holder does not come to en-cash the instrument. Renewal will be for the previously agreed maturity period. 3.3.6 Cash DivisionCash department is the most vital and sensitive organ of the branch as it is deals with all kinds of cash transactions. This department starts the day with cash in vault. Each day some cash that is opening cash balance are transferred to the cash officers from the cash vault. Net figures of this cash receipts and payments are added to the cash balance. The figure is called closing balance. This closing balance is then added to the vault. When the vault exceeds the limit, the exceed money send to principal office and when there is found any shortage the branch requisites the amount from the Principal Office. In my branch, there are eight employees in cash and Chief Cash Officer Manager monitors them.

Cash ReceiptsWhen the client deposited amount in the bank, the cash officer follow the following common precautions: Check and count the received cash Make sure the amount in words and numbers in the deposit slip are same Check account title and account number

Cash PaymentWhen the client press the cash cheque then the cash officer follow the following common precautions: The date of the cheque is not crossed the six month Post dated cheque Taka in words and and figure are same Balance in the account is available Signature is matched with the card signature or account.

3.4 STRATEGIC DECISIONS OF DBBLOnline Banking:Dutch-Bangla Bank Limited now using locality developed Branch Banking software in almost all its branches. But with a view to provide world class banking facilities to its customer, DBBL has undertook upon an ambitious program by investing Tk.250.00 million for acquiring a state-of-the-art total automation project which DBBL claimed to said as Truly On Line Banking. The decision of acquiring the automation program has been based on the Banks own core competence in its IT division, reinforced with the site visit of banks highest management of similar installations of different banks in India and Sri Lanka.DBBL choose ORACLE FLEXCUBE from i-flex solution, a world leader in technology solutions for the financial services industry, which will enable DBBL to render a fully automated real time any-where any-branch banking services, covering 24 hours a day and 365 days a year. As part of the on-line banking program, internet banking, DBBL Nexus Debit Card, DBBL Maestro/ cirrus Debit Card and DBBl Credit card will also be launched shortly and all preparations regarding this are in final stage.

To fulfill this decision, DBBL has set-up a most modern and largest state of the art data centre and have assembled a core group of competent IT professionals and other persons. These persons have undergone a two-month extensive training course in Bangalore and Mumbai, India on FLEXCUBE. The Data Centre will also have an on-line Diaster Recovery site (DRS), the first of its kind in the country, to safe-guard the customers interest and to have an effective disaster management system in place. This will help maintain and preserve all necessary data at a separate and more-safe custody. The scrutiny of DBBLs computer system stands on four (4) layers, which are at application, in networking, in database and in the operating systems.

3.5. SERVICES & PRODUCTSDeposits productLoan ProductsServicesInvestment / Finance

Current DepositSecured overdraftCredit Card ServicesCorporate Finance

Savings DepositGeneral LoanDebit CardIndustrial Finance

Short Term DepositHouse building LoanRemittanceProject Finance

Term DepositStaff LoanPay order

Foreign Currency DepositTransport LoanMaster card

Savings SchemeLoan Against Trust ReceiptVisa Card

Exporter's FC Deposit (FBPAR)Payment against documentInternet Banking

DBBL Bochore Dergun Scheme (BDS)Packing CreditMobile Banking

DBBL Deposit Plus SchemeLease FinanceCSR

DBBL Children Education Savings Scheme (CHESS)SMESMS Banking

DBBL Pension Benefit Scheme (PBS)Consumer CreditSWIFT

DBBL Pension plus SchemeBill Purchase Locker Facility

3.6 DBBL SERVICES OFFEREDDBBL are providing many kinds of services to the customer. It delivers the debit card of the customers through courier services to their mailing addresses. Five courier services are active and engaged at Dhaka to deliver the cards to the respective addresses. If any cardholders address is not found, then the card is returned to the respective branch and the customer can always collect it from the branch. DBBL ATM booths are, perhaps, the largest ancillary service provided by the bank. It now has over 3400 booths throughout the country and the number is still increasing. It has established ATM booths at different places. Besides the regular booths, it also offers six mobile ATM booths humming around the corners of the cities like Dhaka and Chittagong at different points. Almost 50 booths have deposit facility. One can use ATM booths a maximum of 5 times a day with the lowest withdrawal of BDT. 500.00 And the highest withdrawal of BDT. 50,000.00 a day. Customer care is 24 hours active to give information to the customer. DBBL also gives the option of using internet banking and SMS alerts for the customers. They can always enable the options by just filling the Customer Options Form and anytime can disable it also. Enabling the internet banking and/ or the alert banking will cost the customers a minimum cost per year which is affordable for the customer.

3.7 ATM NETWORK/DBBL NEXUS PARTICIPATING BANKSDBBL maintains its own network and automation without the involvement/assistance of any third party companies. Access to ATM services fee is BDT 230 annually for DBBL clients. Partner banks are charged a subsidized Tk. 10, although the end price for the customer may be higher due to the extra charges levied by the partner bank. On the digital day (10/10/10), the DBBL inaugurated its (digital) 1000th ATM at the factory premises of the GlaxoSmithKline, Chittagong.(as on 24 March 2012 it has more than 2000 ATM and 200 FT).Now the Total ATM Booth is over 3400 which is higher than others bank.

3.8 FAST TRACKDutch Bangla Bank also provides Fast track one kind of mini branch. During the first quarter of 2010, Dutch Bangla Bank Ltd. introduced "Fast Track" in the country. Along with the generic ATM withdrawal service, it lets the customer deposit small amount of money to a DBBL account. The limit is 20,000 BDT. Moreover, the Fast Track also provides account opening service and loan information. The number of Fast Track points is approximately 365 (as info of 2015)

3.9 THE CARDS The pioneer in plastic moneyPlastic cards or plastic money is gaining popularity day by day. It is a means of making payments without cash against services or purchases. Considering the inconvenience of carrying cash, safety etc., and plastic cards are being used in more and more sectors. DBBL is the leading financial institution in providing card services in Bangladesh. DBBL has already expanded its portfolio in all areas of card business. DBBL has adopted new technology as the basis for development of card products. The first Nexus debit card was issued on August14, 2004.

Debit CardsDBBLs card issuing portfolio is enriched with both debit and credit cards of various card brands. DBBL is pioneer in issuing debit cards in Bangladesh. The first debit card of the country, the Nexus debit card was issued on August 14, 2004. Since then DBBL has been the market leader with the largest debit card base. DBBL issues both EMV compliant multi-application enabled smart card and traditional magnetic stripe PIN-protected debit cards. The MV debit card consisted of Dynamic Data Authentication (DDA) chip and Multos operating system. It ensures additional software level security for chips.DBBL-NEXUS Instant Debit CardDBBL-NEXUS VISA Electron cardDBBL-NEXUS Maestro card

Instant Debit CardCustomers are no longer required to wait for their debit cards after opening an account with Dutch-Bangla Bank. Now customers instantly get their Dutch Bangla Bank nexus debit cards along with PIN after opening an account in any Dutch Bangla Bank branch. DBBLs card issuing portfolio is enriched with both debit and credit cards of various card brands. DBBL is pioneer in issuing debit cards in Bangladesh. The first debit card of the country, the Nexus debit card was issued on August 14, 2004. Since then DBBL has been the market leader with the largest debit card base. It is a traditional magnetic strip based card. Moreover, a customer can get instant replacement of his/her lost or damaged debit cards. This reduces customer hassle and brings additional satisfaction to them. All transactions of Nexus Instant cards are secured with PIN. This card can also be used in all Dutch Bangla Bank ATMs, POS terminals and Dutch Bangla Bank Nexus Payment Gateway (for e-commerce shopping). Issuance Fee (1st Year):Free Annual Fee (2nd Year Onwards):BDT 460 (Including VAT)

International Debit CardsDBBL issues international debit cards either MasterCard or Visa. As per Bangladesh Banks circular, an international card can be issued against customer foreign currency account like Resident Foreign Currency Deposit (RFCD) account, Foreign Currency (FC) account or Exporter Retention Quota (ERQ) account.. These cards consist of both EMV chip and Magnetic stripe for wider acceptance and cannot be used locally. This card can be issued for any VISA card accepting POS terminal or ATM. Since this card is EMV compliant chip based card, the transactions of this card are more secured which protects cardholders by preventing copying of card data and ensures a liability shift benefit which protects cardholders in non-EMV terminals.Issuance Fee (1st Year):USD 17.25 (Including VAT)Annual Fee (2nd Year Onwards):USD 17.25 (Including VAT) Master Card DebitDBBL issues EMV chip enabled debit cards of MasterCard known as MasterCard Debit cards. This card can be issued for both local and international use. This card consists of both EMV chip and Magnetic stripe for wider acceptance. If the terminal supports EMV, chip transaction takes place. If the terminal does not support EMV, transaction will be completed using the magnetic stripe of the card. However, customer will be protected for any dispute if the mag stripe of the card gets compromised and any fraud transaction happen with the counterfeit card. This card can be issued for any MasterCard accepting POS terminal or ATM, and can be used for e-commerce transactions as well.Issuance Fee (1st Year):BDT 575 (Including VAT)Annual Fee (2nd Year Onwards):BDT 575 (Including VAT)

Credit CardsDBBL has been issuing Visa EMV credit cards since November 2008 and MasterCard EMV credit cards since April, 2010. Although DBBLs entrance in credit card services was delayed, it made a difference in the market by issuing the most secure EMV credit cards from the first day. The EMV credit cards consist of Dynamic Data Authentication (DDA) chip and Multos operating system. It ensures additional software level security for chips. Due to security, other card-issuing banks in Bangladesh usually block customers International transactions and require the customer to make prior phone calls to the card-issuing bank to open international transactions in their card. When a customer returns to Bangladesh, he/she has to call the bank to block their cards international transactions. Sometimes card-issuing banks replace the customers card when the customer visits high risk countries such as Malaysia, Thailand etc. But with DBBLs EMV enabled chip cards there is no such hassle as international transactions are always open and the customer is fully secured. In addition to providing security DBBL also charges the lowest Interest rate in the market on purchase transaction and has a maximum of 50 days interest free (grace) period. There is also no cash withdrawal fee in the DBBL ATM network. VISA Classic International Credit Card. VISA Gold Local Credit Card. MasterCard Classic Local Credit Card. MasterCard Titanium Card (the Premium brand) MasterCard Credit CardDBBL issues EMV enabled MasterCard credit cards to its customers. All cards have DDA chip with Maltose application, which protect them from any alternation of card data and ensures secure Transactions worldwide on any MasterCard accepted POS terminals and ATMs. This card has both chip and magnetic stripe so acceptability is not restricted to any type of terminals. DBBL issues both standard and gold cards with local and international acceptability. Customers have the option to select as per their requirements.

MasterCard Titanium Card (the Premium brand)DBBL has launched MasterCard Titanium in Bangladesh for the first time. With this stylish Chip credit card, customers may enjoy exclusive benefits, experiences and lifestyle privileges; including access to entertainment, sport, electronics and much more. The MasterCard Titanium Credit Card opens up a world of convenience, safety, and simplicity. With access to over 30 million merchants across the globe, it offers an excitingly diverse range of shopping, dining and travel experiences to enrich the lifestyle including airport lounge facility and priority pass. Annual/Renewal Fee:2,000 - 6,000 (Including VAT) Credit Limit:200,000 - 20, 00,000 or Equivalent USD

Visa Gold International Credit CardDutch Bangla Bank issues EMV enabled Visa Gold International credit cards. The card consists of DDA chip with Multos application, which protects them from any alternation of card data and ensures secure transaction on any Visa accepted POS terminals and ATMs worldwide. It can also be used for ecommerce transactions. This card has both chip and magnetic stripe so acceptability is not restricted to any type of terminals. You can avail supplementary card at absolutely free of cost. Moreover, no cash advance fee is applicable for cash withdrawal at Dutch Bangla Bank ATMs.Credit Limit:BDT 100,000 to BDT 500,000

Virtual CardStudents pursuing higher education and/or scholarships abroad are often required to pay the fees and charges online using a credit card. Students are also required to take various examinations such as IELTS, TOEFL, GMAT, GRE - all of which require them to register online for paying fees and charges with a credit card. Most students and their guardians however are not eligible to have a credit card from a bank and thus do not have one. To help them, DBBL introduced Virtual Card for the first time in Bangladesh in 2011. This is not a plastic card - it is a piece of paper inside a closed envelop which carries valid card number, expiry date and CVV/CVC which can be used for some specific internet merchants related to educational / certifications authorities. The virtual card is distributed from DBBL branches and the value is fixed as per the requirement of the students. The DBBL Virtual Card has become very popular amongst students.

Internet paymentOn 3 June 2010, Dutch Bangla Bank Ltd. announced to allow internet payments system. Using theirInternet Payment Gateway merchants will be able to charge their customers' Visa, Masters, DBBL Nexus and Maestro cards. Any Visa/MasterCard cardholder (local or overseas) can use their cards to pay at a number of e-Merchants against their purchase of goods. They can also pay DESCO electricity bills. DBBL is working with airlines, railways, utility companies, educational institutions, and stock exchanges for facilitating purchase of tickets, payment of bills/fees and IPO subscription through the Internet Payment Gateway. DBBL is also working to make an interface with PayPal.

2.10 CORPORATE SOCIAL RESPONSIBILITY OF DBBLDBBL is well known bank in Bangladesh because their activity of corporate social responsibility is quiet better than others bank .They are trying to improve more in this area.Dutch bangla bank limited (dbbl) foundation scholarship EligibilityApplicants must be passed SSC or Equivalent exam in 2013.Applicants must have GPA 5.00 for under city corporation area School/Institute, GPA 4.70 for under district area School/Institute and GPA 4.50 for others remote area students (without 4th subjects) out of GPA 5.00 scale for all groups.

FacilityScholarship Duration: 2 years (Renewable)Monthly Scholarship: Tk. 2000/-.Annul grant for reading materials: Tk. 2500/-.Annual grant for clothing: Tk. 1000/-.

3.11 SOCIAL WORK:Dutch Bangla Bank supports social work extensively and is one of the largest private donors in Bangladesh. Under the vision of M Sahabuddin Ahmed, the bank contributes extensively through its foundation Dutch Bangla Bank Foundation. This has been one of the biggest priority for the bank since its inception. As a result the organization has been granted numerous national and international awards for its role in the development of Bangladesh. The Dutch-Bangla Bank Foundation was established under the vision of its founder chairman, M Sahabuddin Ahmed, in order to help the people of Bangladesh. DBBL is the largest corporate donor in Bangladesh with total donations exceeding BDT 1.3 billion.

The bank donates mainly towards social awareness programs, medical and educational fields. Notably DBBL also maintains the largest scholarship program in Bangladesh whereby college/university education tuition and expenses are fully paid for unconditionally by the bank. In 2007, the bank won the Bangladesh Business Awards for being the 'Best Financial Institution' mainly for its commitment to technology and community service. In 2007 alone, DBBL donated BDT 220 million towards social causes.

3.12 DUTCH-BANGLA BANK RESEARCH CENTERIn 2008, DBBL announced a donation of Tk 100 million to fund the construction of an 11 storey research center, titled "Dutch-Bangla Bank Research Centre for Advanced Research in Arts and Social Sciences" at the Dhaka University campus in Dhaka, Bangladesh. It was Dhaka University's largest ever donation from a private company. The research center, which would be the first of its kind in Bangladesh, will be supervised by renowned teachers, scholars and researchers. It will also award scholarship to researchers and scholars at home and abroad.

CHAPTER-FOURCREDIT MANAGEMENT OF DUTCH-BANGLA BANK LTD

4.1 DEFINITION OF CREDITThe word credit comes from the Latin word "Credo" meaning "I believe". It is a lender's trust in a person's/ firm's/ or company's ability or potential ability and intention to repay. In other words, credit is the ability to command goods or services of another in return for promise to pay such goods or services at some specified time in the future. For a Bank, it is the main source of profit and on the other hand, the wrong use of credit would bring disaster not only for the bank but also for the economy as a whole.

The objective of the credit management is to maximize the performing asset and the minimization of the non-performing asset as well as ensuring the optimal point of loan and advance and their efficient management. Credit management is a dynamic field where a certain standard of long-range planning is needed to allocate the fund in diverse field and to minimize the risk and maximizing the return on the invested fund. Continuous supervision, monitoring and follow-up are highly required for ensuring the timely repayment and minimizing the default. Actually the credit portfolio is not only constituted the banks asset structure but also a vital factor of the bank's success. The overall success in credit management depends on the banks credit policy, portfolio of credit, monitoring, supervision and follow-up of the loan and advance.

4.2 FACTORS RELATED WITH CREDIT Risk Time Interest rate Security or Collateral Operating Expense Legal Considerations Inflation Finance Charge

3.3 CREDIT FLOW OF DBBLCredit Risk Management is basic to risk management and controlling, as it is the major risk factor in most bank business. Therefore, a bank should assess the degree of risk associated with each loan and its profitability. In this connection prior assessment of and follow up on a loan transaction constitute essential ingredients of the credit risk control process. An in-depth analysis of the borrower financial conditions, expected usage of funds, ability to repay, willingness to repay and sources of repayment all together constitute step one in the risk control processes. Continuous supervision, monitoring and follow-up are highly required for ensuring the timely repayment and minimizing the default. Actually the credit portfolio is not only constituted the banks asset structure but also a vital factor of the bank's success. The overall success in credit management depends on the banks credit policy, portfolio of credit, monitoring, supervision and follow-up of the loan and advance.

4.4 TYPES OF LOANS AND ADVANCES OFFERED BY DBBL The making of loan and advance is always profitable to a bank. As the bank mobilizes savings from the general people in the form of deposit, the most important task of it is to disburse the said deposit as loan or advance to the mass people for the development of commercial, industrial who are in need of fund for investment. Like other business firm, the main purpose of the commercial bank is to make profit. The profitability of the banks depends on the efficient manner and avenues in which the resources are employed. DBBL has made so far efficient use of the deposit and has the classified rates under control. The Bank disburses loan in different form. It varies in purpose wise, mode wise and sector wide. The varieties used by DBBL are briefly described below with the common terms and condition and performance in each mode.

Classification of Advance: Commercial & Industrial Credit: 1. Corporate Credit Scheme. 2. Retail Credit Scheme 4.4.1 Corporate Credit SchemeThe bank is entrusted with the responsibility of providing short, medium and long term loans and other financial assistance for promotion of industrial sectors. There are 3 types of corporate credit scheme: Cash Credit Over Draft Secured Over draft 4.4.2 Retail Credit Scheme: The bank also provides retail loan to individual customer. There are different types of retail loan which helps customer to fulfill their dream. Like car loan, educational loan, travel loan etc

4.5 LENDING POLICIES OF DUTCH-BANGLA BANK LTDA loan policy gives loan officers, relationship managers and the Bank's management specific guidelines in making individual loan decisions and in shaping the Bank's overall loan portfolio. One of most important ways a Bank can make sure its loans meet regulatory standard and are profitable is to establish a written loan policy. Dutch-Bangla Bank Ltd. also has a good loan policy and the most important elements of the policy arc stated below: A goal statement for the Bank's loan portfolio (in terms of types, maturities, sizes, and quality of loans). Specification of the lending authority given to each loan officer and loan committee (measuring the maximum amount and types of loan that each person and committee can approve.) Lines of responsibility in making assignments and reporting information within the loan department. Operating procedures for soliciting, reviewing, evaluating, and making decisions on customer loan applications. The required documentation that is to accompany each loan application and what must be kept in the Bank's credit files (required financial statements, security agreements etc.) Lines of authority within the bank regarding who is responsible for maintaining and reviewing the Bank's credit files. Guidelines for taking, evaluating and perfecting loan collateral. A presentation of policies and procedures for setting loan interest rates and fees and the terms for repayment of loans. A statement of quality standards applicable to all loans. A statement of the preferred upper limit for total loans outstanding (i.e. the maximum ratio to total loans to total assets allowed.) A description of the Bank's principal trade area, from which most loans should come. A discussion of the preferred procedures for detecting, analyzing and working out problem loan situations. A written loan policy statement carries a number of advantages for the bank adopting it. It communicates to employees working in the loan department what procedures they must follow and what their responsibilities are. It helps the Bank moves forward a loan portfolio that can successfully blend multiple objectives such as promoting the bank's profitability, controlling its exposure and satisfying regulatory requirements. 4.6 LENDING PROCEDURE OF DUTCH-BANGLA BANK LTDThe lending procedure starts with building up relationship with customer through account opening. The stages of credit approval are done both at the branches and at the corporate office level. The various stages of credit approval are described sequentially:

Step-1 A loan procedure starts with a loan application from a client who must have an account with the Bank. At first it starts from the branch level. Branch receives application from client for a loan facility. In the application client mention what type of credit facility he/she wants from the bank including his/her personal information and business information. Branch Manager or the Officer-in-charge of the credit department conducts the initial interview with the customer.

Step-2 After receiving the loan application from the client, the bank sends a letter to Credit Information Bureau of Bangladesh Bank for obtaining a credit inquiry report of the customer from there. This report is called C1B (Credit Information Bureau) report. This report is usually collected the credit information of customer. The purpose of this report is to be informed that whether or not the borrower has taken loans and advances from any other banks and if so, what is the status of those loans and advances i.e. whether those loans are classified or not. Step-3 If Bangladesh Bank sends positive CIB report on that particular borrower and if the Bank thinks that the prospective borrower will be a good one, then the bank will scrutinize the documents. Required documents are:

In case of corporate client, financial documents of the company for the last three to five years. If the company is a new one, projected financial data for the same duration is required. Personal net worth of the borrower(s). In this stage, the bank will require whether the documents are properly filled up and duly signed. Credit in charge of the relevant branch is responsible enquire about the ins and outs of the customer's business through discussing with him/them. Step-4 Bank officials of the credit department will inspect the project for which the loan is applied. Project existence, its distance from the bank originating the loan, monitoring cost and possibilities are examined.

Step-5 Any loan proposal needs to be evaluated on the basis of financial information provided by theloan applicant. Financial spread sheet analysis which consists of a series of quantitative techniques is employed to analyze the risks associated with a particular loan and to judge the financial soundness and worthiness of the borrower. Besides lending risk analysis is also undertaken by the bank to measure the borrower's ability to pay considering various risks associated the loan. These quantitative techniques supported with qualitative judgment are the most important and integral part of the credit approval process used by DBBL. This is the credit analysis phase.

Step-6 Obtain legal opinion on the co