ncc bank-a new look

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1.1Introduction:

Bachelor of Business Administration (BBA) is a professional course. The course

is designed with an excellent combination of practical and theoretical aspects.

After completing BBA certain times is preserved for internship. As a student of

BBA with the requirement of my course I was assigned to National Credit andCommerce Bank limited (NCCBL) to panthopath branch, Dhaka for my

internship. However, I was very much interested to know how to develop banks.

So I chose the research topic as A look from NCC Bank Ltd

They intend to ensure the trust and confidence of the customers through

focused customer orientation, quality of service and state-of the art technology,

transparency in dealing and adopting the best practices of Corporate

Governance, achieving excellence in all the endeavors to create value for all the

stakeholders. The significant challenge posed before them is the maintenance of

the quality of business simultaneously with its information and business

consolidation processes. This report is prepared based on the: topic Overall

Banking System and Performance Analysis of NCCBL.Due to this practice the

remittance department of NCC Bank has been growing to provide a good

participation in the profitability of the Bank.

Basically, this report is highlighted on overview of NCC Ba Present status,

Performance of NCCBL, Deposit Mobilization, Utilization of Fund, Foreign

Exchange, Ratio analysis , Swot analysis Recommendation and conclusion.

1.2 Rationale of the Study

The word bank refers to the financial institution that deals with money

transaction. Commercial banks are the primary contributors of the economy ofthis country. On one hand they are borrowing money from the locals and on the

other hand lending the same to the locals as loans and advances. So the people

and the government are very much dependent on banks. Moreover, banks are

profit earning concerns, as they collect deposits at the lowest possible cost and

provide lo between two is the profit for the bank.

This report basically deals with the loan and advance management of National

Credit and Commerce Bank Limited (NCCBL) covering the areas like General

Banking, swot analysis , Foreign Exchange, Ratio analysis Financial

Performance, etc.1.3 Scope of Study

his internship program gives me a great scope or opportunity for gather

experience and knowledge in several areas of banking by which I can evaluate

or expose myself. During:-e first few week of my internship period, I was able to

communicate most of the employees of the bank. During the first month I was

able to accustom and adapted myself with the working environment of NCC

A Look from Ncc Bank http://www.papercamp.com/print/A-Look-From

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1.5 Methodology

In collecting the necessary data, a special care has been taken so that all the

variables may not affect the objectives of the study. Data needed for conducting

the study have been collected from the following sources.

a) Primary source and

b) Secondary source

Primary sources

The primary data in this report mainly includes surveying the different

departments of the Bank. It includes-

Scheduled survey

Observation while working in different desks

Informal discussion with professionals

Secondary sources

Secondary sources are the permanent and printed sources of information. This

are-

Annual reports of NCCBL

Desk report of related department

Brochures of National Credit and Commerce Bank limited

Different reference books

Study of related books, seminar paper, training papers, Publication of

statements

1.6.Limitations of the Study

1. Although I have enjoyed full co-operation from employees of NCCBL and they

also gave me much time to prepare this report properly in the way of my study, I

have faced some difficulties, which can be termed as limitations. They are as

follows:2. It should be certainly mentioned that time constraint is the first limitation of

the study. Only three months is not sufficient for gathering perfect knowledge on

the vast area of bank.

3. In some cases, they could not be able to supply my topic related data for

preparing a more in depth research study. Office secrecy was one of the most


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important problems. Disclosing of some information was restricted.

4. In case of secondary data collection, there was very little secondary

information. There were few support books, reports, journals, etc. moreover, the

branch office had very little of this information. Thats why bulk of it had to be

collected from the head office. As the officers were very busy with their day to

day work, they could provide very little time.

CHAPTER -2

Organizational Introduction

2. 1 History of NCCBL

National Credit and Commerce Bank limited came to reality through the

National Credit limited. Prior to conversion into a scheduled commercial bank,

National Credit Limited(NCL) was incorporated as an investment company on

18th November 1985. It made its January on 25th November 1985 at its

registered office and first branch at 7-8 Motijheel Commercial Area, Dhaka-1000 with initial authorized capital of 1k. 30 crores.

It was mostly involved in collecting suitable resources and making profitable

investments. But within a very short period of time this investment company

turned into a scheduled commercial bank. It was turned into a bank because it

faced many restrictions both collection and disbursement of funds while it was

operating as an investment company. While this turnover was going on all types

of transactions were closed for about fourteen months from April 22, 1992.

After that, with the permission from the government and Bangladesh Bank, NCL

was converted in a full fledged commercial bank and started its banking

operation on 17thMay 1993, in the name of National Credit and Commerce Bank

Limited. It has been registered under the company act-1913, as a private

commercial bank with paid up capital of Tk.39 crores to serve the nation along

with 16 branches.

However, NCCBL runs as per company rule, free from government intervention

Year 1994 & 1995 were the full operation year of the bank. During this period

gave emphasis on considering the affairs of the institution as well as expansion

of business work.During last 13 years if its operation NCCBL has acquired

commendable reputation by providing sincere personalized service to its

customers through a technology based environment.

2.2 Objectives of NCCBL

The main objective is to maximize profit through customer satisfaction which

very much reflects the idea of marketing concept. NCCBL has been ensuring

maximum profit by avoiding best and improved customer service along with

other corporate objectives mentioned below:


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v To provide excellent customer service to its clients, so that they choose

NCCBL first for their banking.

v Ensure high return on investment and services with different service products.

v Making profitable investment and grow in annual profit management.

v To remain as the market leader through diversification of business and

automation of banking operations.

2.3 Vision

The purpose of the bank is to become The Bank of Choice in the communities

we serve. We accomplish this by offering to our customers the financial services

they expect while providing a return to our owners. In accomplishing this

mission, the bank has now been free from all the natures of a problem bank

through fulfilling all the conditions set by the central bank. We proudly say:

NCCBL is profit-making and problem-free.

2.4 Mission

Philosophically, a bank is a financial institution, which accepts depositors

money for safe-keeping and contracts with the depositors to lend this money atinterest to inviduals who are in need of its use and who can give ample security

that the loans will be paid. From the profits made from lending money at

interest the banker agrees to pay the legitimate depositors a fixed sum of

interest besides safe-guarding the deposits. Moreover the bank follows the

followings as its mission:

Maximize the profit within the shortest possible time

Try the best level to satisfy customers

Establish NCCBL as the best performing bank in the country.

2.5:Product and service:

The Bank has wide range of product line to suit the need of the strata. In

addition to convention product both Asset and liabilities sides the Bank offers

special credit products for its customer. This are-

Consumer Financing

Lease Financing

Small loan

Festival loan

Housing loan

Long-term & short term loan financing

Syndication

Real Estate & Civil construction

SME & Agro based.

Loan and Advanced products

* Commercial & Trade Financing

* Long Term capital Financing

* Retail & consumer Financing


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* Agricultural Financing

* Import & Export Financing

Deposit Products

1. Current A/C

2. Savings Bank Deposit A/C

3. Special Notice deposit A/CTerm Deposit A/C

Premium term Deposit A/C

Instant Earnings Term Deposit

Special Savings Scheme

Money Double Program

Money Triple Program

Special Deposit Scheme

RFCD

Retail/Consumer Loan Products

* Personal Loan

* Car Loan Scheme

* Education Loan

* House Building Financing

* Consumer Finance Scheme

* House Reparing & Renovation Loan

* Home Improvement Loan

SME Banking

* Small Business Loan

* Lease Finance

* Lease Finance

* Working Capital Loan

* Festival Business Loan

* Festival Personal Loan

Cards

* Credit Cards

* Debit cards

* mBridge cards

Remittance productWage Earners Welfare Deposit Pension Scheme

* Overseas Employment Loan Scheme

* Special Interest rate on Deposit and Loan

Chapter -3

General Banking


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3.1:General Banking:

Financial institution intermediary that mediates or stands between ultimate

borrowers and ultimate lenders is knows as banking financial institution. Banks

perform this function in two ways- taking deposits from SURPLUS UNIT i.e.

from various areas in different forms and lending that accumulated amount of

money to the DEFICIT UNIT i.e. to potential investors in other different forms.General banking department aids in taking deposits and simultaneously

provides some ancillaries services.

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. Everyday 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 everyday, 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 :Functions of General Banking:

General banking creates a vital link between customers and bank. It is really a

crucial department for the progression of the bank. It is the introductory

department of the bank to its customers. Every commercial bank has all the

required sections of general banking. Everyday it receives deposits from

customers and meets their demands for cash by honoring instruments. General

banking department is that department which is mostly exposed to the

maximum number of the bank customer. Every commercial bank has general

banking segment, which is involved day-to-day banking services to its

customers. General banking is considered as the most important and core

banking section for any commercial banks. The most common general baking

sections can be listed as follows.

Functions of General Banking

* Account Opening Section: A Person is treated as a customer when he or she

opens an account on that bank. Then it becomes a contractual banker customer

relationship. The account opening section of any commercial bank is a veryimportant section because; the more customers open bank account the more

customers base creates. This section takes care of all the relevant duties

related to the opening of an account. There are different types of account

facilities provided by a commercial bank. For example, Saving Account, Current

Account, Fixed Deposit Receipt, Short Term Deposit Account, Cash Credit

Account


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* Cash Section: Cash section demonstrates liquidity strength of a bank. It is

also sensitive as it deals with liquid money. Maximum concentration is given

while working on this section. As far safety is concerned special precaution is

also taken. Tense situation prevails if there is any imbalance in the cash account.

The responsibility of the officer of the section is too much high. Cash section

ensures depositors cash requirements through honoring cheques and other

kinds of liquid demand against their deposits.* Remittance Section: Remittance means transfer of money from one place to

another

In commercial banks, it has been done in the form of demand draft,

telegraphic transfer, pay order as well as saving certificates.

* Deposit Section: Deposit section of a commercial bank plays a key role in

collecting deposits from the different kinds of customers for example, individual

customers as well as institutional customers who have surplus funds and they

are willing to keep their surplus funds as deposits to various commercial banks.

Deposits may have various forms such deposit pension scheme, fixed deposit,

fixed deposit receipt and special deposit scheme and other kinds of savingsplans.

* Collection and Clearing Section: Collection and clearing section involves

many kinds of collection and clearing tasks. Customers pay and receives bill

from their counter party because of business transactions occurring in the

business. Commercial banks collect the bills and cheques on behalf of their

customers. Collection mechanisms in a bank is called clearing function and

collection function includes collection of various foreign drafts and documents

on behalf of its customers and credited those drafts amount in the name of

respective account holders of a banks customers through collection and clearing

process.

* Value Added Services: commercial banks also provide some kinds of value

adding services to their customer to keep them loyal to their banks and these

value-adding services may be as follows:

* Online Money Transfer: Because of online banking everywhere in the world,

the customers of any commercial bank can easily transfer their money from one

branch to another. No hassle is there. Anyone can deposit money from any

branch of the bank to any account. Similarly, an account holder can withdraw

money from any branch.

* Account Balance Inquiry: commercial bank sends account statement to its

clients two times in a year. More over clients are provided whenever he or she

wants to know account balance. Hence, some security and privacy ismaintained. No other person than the account holder is given access to know

the account balance.

3.3: Deposit Mobilization

General banking department is the heart of all banking activities, especially to

mobilize the deposits. All other departments are linked with this department. It

plays a vital role in deposit mobilization of the branch. National Bank Limited


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Any introducer of that respective bank

Fill up Know Your Customer (KYC) form.

Joint Owner

Trade license

Proprietors ID


Fill up Know Your Customer (KYC m.

Limited Company

Memorandum of Articles (MOA)

Association of Articles (AOA)

Certificate of Incorporation.

3.5:Features of CD A/C: CD accounts have the following features:

(1).Submitting Tk.5000 to open a current account.

(2).It is understood that the balances at credit will not less than Tk.5000. A

minimum charge Tk. 100 must be paid on all operative accounts.

(3).Only the form of cheque book supplied by the bank should be used. Cheques

materially altered will not be paid unless such alteration bears the signature of

the drawer in full.

(4).The account holders must give the same signature for withdraw money that

deposited in the bank previously.

(ii) Saving Bank Deposit (SB club, society, association house wife, student,

non-profitable organization, etc. can open a saving bank deposit account with

NCCBL. Savings bank deposit is both time and demand deposit, of which 10% is

demand and 90% is time deposit and the account holder can withdraw his/her

deposits twice in a week up to a certain limit.

* Requirements for opening SB A/C: Requirements may vary from types of the

organization, such as

): Any individual person, local bodies

Individual

Personal ID

Copy of a Passport or ward commissioner certificate


Nominees photograph


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Joint Owner

Trade license

Proprietors ID



Limited Company

Memorandum of Articles (MOA)

Association of Articles (AOA)

Certificate of Incorporation

Features of SB A/C: SB accounts have the following features:

1) Any matured but not unsound mind can open a savings account.

2) One account holder can transfer his or her account in the branch to another

branch

without any cost if he or she interested.

3) Minimum deposit Tk 2,000 to open an A/C

4) SB A/C offers 6% interest charges semi-annually to the depositors account.

5) One time at least within 6 months an A/C holder must transaction with the

bank to

continue the A/C.

6) Charges Tk.250 for close

(iii) Fixed Deposit Account (FDR):

Any individual person, businessman, firm, limited companies, local bodies,corporation, corporate bodies, etc. can open Fixed Deposit A/C with NCCBL.

FDR is 100% time deposit and A/C holder can usually withdraw his/her deposits

after maturity of the fixed deposit. However, depositors of FDR can withdraw

their deposits before maturity if they desire FDR is also known as time liabilities

or term deposits. Higher rate of interest is given on this type of deposit. Fixed

deposits generally constitute more than half of the total deposits with the bank.


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3. Management of vault of t1. Receipt of depositThis section receives deposit or

funds from the customer and the collection procedure as follows:

At first the amount is counted and if ok then verified the purity of the note paid

if there is he branch.

any confusion of the teller.

word over the deposit slip.

At last the receiving officer/ teller signed the deposit slip and by the sign of the

authorized officer the deposit of fund finished in favor of a customer.

In case of received of clearing cheque, the cheque is scrutinized at first

whether the cheque is authenticated as per the NI Act. If satisfied then a

crossing is marked so that this cheque never been enchased over the cash

counter

Then the amount is kept apparently deposited in the customers account and

the cheque proceeds to the clearing house accordingly.

2. Making payment to th payment is made to the customer only against a valued

authentic cheque. the teller has to follow the following steps in making such

payment:

Receiving the cheque from the customer.

Examining the cheque.

In case of examining the cheque, the teller is predated thensure about the

folipwing questions:

e customer:The(ii)Amount is written in word and in figure and both is valued

same;

(iii)Signature is installed and it is as it is the signature kept in the bank;

(iv)There is sufficient amount in the customers accounts for making payment.

Finally the cash paid seal is marked over the cheque leaf for the collection ofthe cheque after making the payment to the customers.

3. Management of the vault:

The cash section also manages the vault of the branch. The manager of cash

section is the in charge of the necessary liquid money in the vault for the

payment of the customer the date is to be The following two types of Remittance


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are performed by NCCBL.

3.7: Clearing

Clearing is a system by which a bank can collect customers fund from one bank

to another through clearing house.

(A) Outward Clearing: When the branches of a bank receive cheque form itscustomers drawn on the other banks within the local clearing zone for collection

through Clearing House, it is Outward Clearing.

(B) Inward Clearing: When the branches of a bank receive cheque drawn on

them from other banks in the Clearing House, it is Inward Clearing.

3.1.6.2 Clearing House: Clearing House is a place where the representatives of

different banks get together to receive and deliver cheque with another banks.

3.1.6.2.1. Types of c1earin~ house

There are two type of clearing house:

Those are A) Normal clearing house

B) Same day clearing house

(A) Normal clearing house:

1) 1st house: 1st house normally stands at 10 am to 11 am

2) 2~K~ house: 2nd house normally stands after 3 p.m. and it is known as

return house.

(B) Same day clearing house:

1) 19iouse: 1st house normally stands at 11 am. to 12 p.m

2) 2~ house: 2 house normally after 2 p.m. and it is known as return

3.1.6.3. Return house

Return House means 2nd house where the representatives of the Bank meet

after 3 p.m. to receive and deliver dishonored cheque, which place in the 1 g

Clearing House. Cheque may be dishonored for any one of the followingreasons:

1) Insufficient fund.

2) Amount in figure and word differs.


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3) Cheque out of date/ post- dated.

4) Payment stopped by the drawer.

5) Payees endorsement irregular/illegible / required.

6) Drawers signature differ / required.

7) Crossed cheque to be presented through a bank.

8) Other specific reasons not mentioned

3.8: Bills Collection

In modern banking the mechanism has become complex as far as smooth

transaction and safety is concerned. Customer does pay and receive bill from

their counterpart as a result of transaction. Commercial banks duty is to collect

bills on behalf of their customer.

Types of Bills for Collection of Clearing

a) Outward Bills for Collection (OBC)

b) Inward Bills for Collection (lBC)

(a) What is OBC?

OBC means Outward Bills for Collection. OBC exists with different branches of

different banks outside the local clearinghouse. Normally two types of OBC:

1) OBC with different branches of other banks

2) OBC with different branches of the same bank

Procedure of OBC:

1) Entry in the OBC register.

2) Put OBC number in the cheque.

3) Crossing seal on the left corner of the cheque & payees account will be

credited on realization seal on the back of the cheque with signature of the

concerned officer.

4) Dispatch the OBC cheque with forwarding.


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(b) Inward bills for collection (IBC)

When the banks collect bills as an agent of the collecting branch, the system is

known as

IBC. In this case the bank will work as an agent of the collection bank. The

branch

receives a forwarding letter and the bill.

Procedure of IBC:

1) IBC against OBC: To receive the OBC cheque first we have to give entry in

the IBC Register. The IBC number should put on the forwarding of the OBC with

date.

2) Deposit of OBC amount: OBC cheque amount is put into the sundry deposit

sundry Creditors account, prepare debit & credit vouch of it. If the OBC chequeis honored, send credit advice (IBCA) with signature & advice number of the

concern branch for the OBC amount.

3) If the OBC cheque is dishonored, the concerned branch is informed about

it.Again place in the clearing house or send the OBC cheque with Return Memo

to the issuing branch according to their information.

Others Activities

3.2. Credit Card Section

3.2.1. About Credit Card?

It is a card (usually plastic) that assures a seller that the person using it has a

satisfactory credit rating and that the issuer will see to it that the seller receives

payment for the merchandise delivered.

Types of Credit Card

National Bank Limited offers mainly two type of credit card according to the

geographical area. These are Local credit card and International credit card.

According to the level of income the local and international credit cards are

divided into two categories viz. Gold card and Silver card. These types of credit

cards are described below:

(a)Local credit card:

Local credit card is valid only in Bangladesh. Out side Bangladesh, the card is

invalid. Local card are two types. They are Gold local card and Silver local card.

The card limit of gold local card is Tk.50000 to Tk. 100000 and silver local card

is below Tk.5


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(b) International Credit Card:

International credit card is valid mainly outside Bangladesh. But for the

payment of roaming facilities for Grameen phone, cardholders can use

international credit card in

Bangladesh. International credit cards are of two types. These are goldinternational credit card and silver international credit card. The card limit of

gold international credit card is $2000 to $4000 and silver international credit

card below $2000.

3.2.2 Yearly Charges on credit card

National Bank Limited receive card fee for new card and renew card from the

cardholder. The rate of card fee for new card and renew card are the same. In

case of

new card the bank receives the card fee with the next months bill. The rate ofcard fee are given in below:

Table: Yearly charges on credit card

Type of card Card fee

International Gold Card US$70.00

International Silver card US$ 35.00

Local Gold card Tk.2000.00

Local Silver Card Tk.1200.00

Demand Draft

By DD any person can send money from one branch to another branch of

NCCBL. To send the money he/she must fill up the NCCBLs prescribed form of

DD and paid charge/commission and receives are included in the DD block:

Name of the sender branch

Amount of money to be transferred

Name of receiver branch

3.6: Telegraphic Transfer:

To send money urgently NCCBL may be requested for TT on payment of a

nominal charge and telegram charge.

Any person urgently sends money from one branch to another branch within

NCCBL through TT.


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When a message of TT sends through phone from one branch to another branch

in that time the message received by the authorized officer who has a right of

power of attorney. After that, he/she fills up the TT form. Following things are

included in the TT form:

i). TT number

ii). IT test number

iii). Name and account number of the payee

iv). Power of attorney number of the sender and receiver of TT.

v). The amount to be transferred.

vi) After fill up the TT form, he tests the test number of TT. If he ensures througli

testing the test number then he credits the account of the payee. On the otherhand, if the test number is not proved then he calls back to the sending branch

of TT and request to send a new TT.

d) Mail Transfer:

Money can be sent through mail transfer to any body who has an account in any

other branch of the same bank for this purpose the sender shall have to furnish

the details like:

The name of the beneficiary and his account number

The amount to be transferred

The name of the branch where the account is maintained

The deposits that are accepted by NBL like other banks may be classified in to,-

a) Demand Deposits

b) Time Deposits

3.7: Demand deposits: These deposits are withdrawn able without notice, e.g.

current deposits. National Bank Limited accepts demand deposits through theopening of, -

3

a) Current account

b) Savings account


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C) Call deposits from the fellow bankers

time deposit. National Bank Limited accepts time deposits through Fixed

Deposit Receipt (FDR), Short (b) Time deposits: A deposit which is payable at a

fixed date or after a period of notice is a Term Deposit (STD) and Beared

Certificate Deposit (BCD) etc. While accepting these deposits, a contract is done

between the bank and the customer. When the banker opens an account in thename of a customer, a contract arises between them. This contract will be valid

one only when both the parties are competent to enter into contract. As account

opening initiates the fundamental relationship & since the banker has to deal

with different kinds of persons with different legal status, National Bank Limited

officials remain very much careful about the competency of the customers.

Chapter -4

Foreign Exchange

4.1:Forigen Exchange:Foreign exchange consists of trading one type of currency for another. Unlike

other financial markets, the FX market has no physical location and no central

exchange. It operates "over the counter" through a global network of banks,

corporations and individuals trading one currency for another. The FX market is

the world's largest financial market, operating 24 hours a day with enormous

amounts of money traded on a daily basis.

Unlike any other financial market, investors can respond to currency

fluctuations caused by economic, political and social events at the time they

occur, without having to wait for exchanges to open. Access to modern news

services, charting services, 24- hour dealing desks and sophisticated online

electronic trading platforms has seen speculation in the FX market explode,

particularly for the individual trader.

The currency markets are not new. They've been around for as long as banks

have been doing business. What is relatively new is the accessibility of these

markets to the individual speculator, particularly the small- to medium-size

4.2 :A Short History of the Foreign Exchange Trading Market

Foreign exchange markets originally developed to facilitate crossborder trade

conducted in different currencies by governments, companies and individuals.

While these markets primarily existed to provide for the international movement

of money and capital, even the earliest markets had speculators.

Today, an enormous proportion of FX market activity is being driven byspeculation, arbitrage and professional dealing, in which currencies are traded

like any other commodity.

Traditionally, retail investors' only means of gaining access to the foreign

exchange market was through banks that transacted in large amounts of

currencies for commercial and investment purposes. Trading volume has

increased rapidly over time, especially after exchange rates were allowed to


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float freely in 1971.

From 1944 until 1971, most of the world's major currencies were pegged to the

US dollar under an arrangement called the Bretton Woods Agreement.

Participating countries agreed to try and maintain the value of their currency

with a narrow margin against the US dollar and a corresponding rate of gold, as

needed. These countries were prohibited from devaluing their currencies to gain

a foreign trade advantage. Consequently, the foreign exchange market wasrelatively static.

4.3: Foreign remittance:

NCC Bank is the member of Money Gram and SWIFT networks. Using the

services of this global network, non-resident Bangladesh nationals can send

money from abroad to their home country within a few minutes without any risk.

4.2: Types of Foreign remittance

(i) Money Gram: Money Gram is represented in over 115 countries and is

available at more than 25,000 locations worldwide. In the USA alone Money

Gram is available at inore than 15,000 locations.

Sender completes a send form and gets a receipt. Money Gram Agent gives a

Ref:

No. Which has to be passed to the receiver?

NCC Bank makes an enquiry on the Money Gram computer network to obtain

authorization to pay recipient and recipient receives the fund.

uMoney Gram is one of the fastest ways to transfer money. Customers using

Money uGram can send or receive money usually within 10 minutes from any

world.

To get the money the recipient need not to have a bank account with NCC Bank

Ltd. NCCBL does not levy extra charge. It gives better exchange rate to the

recipient.

(ii) Placid Express In March 2002, the bank has entered a Taka drawing

arrangement with

Placid Express, for home remittances of Bangladeshi expatriates in the United

States.

(iii) X-press money: The X press Money Services would like to welcome NCCBL

to their network. X press Money (XM) is a web-based person-to-person moneytransfer system that allows an individual to send/receive money through any of

our network agents instantly. All transactions are done through secure servers

using 128-bit encryption technology so as to provide maximum security

(iv)Al Fardan: Al Fardan Exchange, the pioneer in money exchange and

worldwide remittance services in the U.A.E., established in 1971, is a trusted

name for millions of residents and expatriates. A modern exchange house with


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advanced infrastructure and

Courteous staff, has an extensive network of correspondent banks all over the

world to facilitate faster, completely reliable transactions.

(v) Habib express: Habib express is another important medium through which

wage earner

remittance is accepted by NCC Bank. Here head office at first enter in system

server and received necessary information about the amount of remittance,

beneficiary

who will receive the amount and any reference number which work as security

for Bank as well as beneficiary. Head office gives information through fax to it

respective branch from ~where receiver will receive money.

(vi) Dhaka Janata: Dhaka Janata are introduces to provide remittance fucilities

to emigrant and other people of Bangladeshi who work as contractual basis in

the Italy. Here Dhaka Janata also maintain same procedure of gettinginformation from system server including the name, referance number, amount,

Phone number etc.Here head office sends information through fax to all

respective branch. All receivers when come to bank,respectivebranch check his

information with information received from head office.

In NCCBL, the Foreign Exchange Department has two sections

Import section

Export section

4.3:Import Section: Import of merchandise involves two things: bringing of

goods physically into the country and remittance of foreign exchange towards

the cost of the merchandise and services connected with its dispatch to the

importer.

Import Procedure

Procedure for obtaining IRC (Import Registration Certificate)

Submission ofLCA (Letter of Credit Authorization) Form:

LCA forms distribution:

OpeningLC:

Examination of import documents


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Documents sent to the foreign exporter

Payments against documents of release order from the bank

Post Import Finance:

LTR (Letter of Trust Receipt): Letter of Trust Receipt occurs when an importerfills up the LTR form and applies for it LTR is permissible only if the importer is

a reputed, trust worthy and having done business with the particular bank for a

long time. LTR creates an option for the importer to pay due by future

installment.

Loan against Imported Merchandise (LIM): Loan facility up to a satisfactory

limit to the traders customers by the bank against security of the value of the

given only to the selective customers who have been doing business with the

bank for a long time.

Payment against Documents (PAD): After receiving the documents sent by theforeign exporter which include bill of exchange, shipping documents etc. the

importer pays the dues against the documents received by the bank and latter

on releases the merchandises from the port. So, after due payments, which

include commissions, product price, charges for SWIFT, and miscellaneous, the

party is eligible to take the release documents from the bank on this payment is

called PAD.

4.4:Export Section: The import and export trade of Bangladesh is controlled

under the Import and Exp by the Chief Controller of Imports and Exports shall

indent, import or export any goods into or out of Bangladesh except in cases of

exemption issued by the government.. The registration number should be

quoted on the relative export forms.

There are a number of formalities, which an exporter has to fulfill before and

after shipments of goods. These formalities or procedures are enumerated as

follows:

ort Control Act, 1950. No person who has been granted registration

The Registration of Exporters

~ Preparations of the Export Documents> Dispatch of Goods

> Send Shipping Advice

)~ Negotiation of Documents


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~ Realization of Export Proceeds

~ Get the name of the Importer/Buyer:

> Price/Quotations:

)~ Communicate the Acceptance:

~ Obtain Export Code Number:

Keep the goods ready for dispatch:

Inspection of Goods

Getting Shipping Space

Get in touch with the Port Authorities

Are required to be forwarded to the opening banker along with the bill, the

credit is called a documentary credit.

4.5: Function of Foreign Exchange:

The Bank actions as a media for the system of foreign exchange policy. For this

reason, the employee who is related of the bank to foreign exchange, specially

foreign business should have knowledge of these following functions

i) Rate of exchange.

ii) How the rate of exchange works.

iii) Forward and spot rate.

iv) Methods of quoting exchange rate.

v) Premium and discount.

vi) Risk of exchange rate.

vii) Causes of exchange rate.

viii) Exchange control.

ix) Convertibility.

x) Intervention money.


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xi) Foreign exchange transaction.

xii) Foreign exchange trading.

xiii) Export and import letter of credit.

xiv) Non-commercial letter of trade.

xv) Financing of foreign trade.xvii) Nature and function of foreign exchange

market.

xviii) Rules and Regulation used in foreign trade.

xix) Exchange Airtime

About of LIC

On behalf of the importer if the bank undertakes to make payment to the foreign

bank is known as documentary credit or letter of credit. The letter of credit is

issued against payment of amount by the importer or against satisfactory

security.. Application for Opening LIC: At first, an importer will request banker

to open L/C along with the following documents:

2. Indent or Proforma Invoice

3. Import Registration Certificate (IRC)

4. Taxpayer Identification Number (TIN)

5. Insurance cover note with money receipt

6. A bank account.

7. Membership of chamber of commerce

5.3.2. L/C Application: NCCBL provides a painted form for opening of L/C to the

importer.The importer gives the following information is that form:

Full name & address of importer.

Date & place of expiry of the credit.

The mode of transmission of document (courier/mail/telex)

Whether the confirmation of the credit is requested by the beneficiary or not.


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Whether the partial shipment is allowed or not.

The type of loading (loading on boarding).

Brief description of the goods to be imported.

Availability of the credit by sight payment acceptance /deferred payment.

Within she specific time duration *the document should be presented.

Sales terms (FOB/CIF/C & F).

Account number.

L/C amount.

Shipping mark.

H.S. code number of the goods to be imported.

IRC number.

LCA number

Insurance cover note.

Country of origin.

The above information is given along with the following documents:

Proforma Invoice, which gives description of the goods including quantity, Unit

price.

Four set of IMP form.

uThe insurance cover note, issuing company & the insurance number.

Importers Application for L/C Limit/Margin: To have an import L/C limit, an

importer submits an application to NCCBL. In that application he/she gives fulldetail of the following:

Full particulars bank accounts.

Nature of business.


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Required amount of limit.

Payments terms & condition

Goodstobe imported

Offered security

Repayments schedule

4.6: LC Margin: LC margin is the amount of down payment or deposit to

open the LC. This is a sort of security for the LC purpose. Usually the margin

varies from importer to importer. Generally a regular importer enjoys a lower

margin facility from 10%-20% and for a new customer of the bank the margin

may be 80%-100%.

Charges: Handling charge per document Tk.1000

Accepted Commission:

Duration Commission

90 Days (Pt Quarter) 0.60%

120 Days (2fld Quarter) 0.90%

180 Days (3Tc~ Quarter) 1.20%

Postage charge- Tk.200

Stamp charge-Tk. 150

SWIFT charge-Tk.3 500 per document

5.3.5. Transmission of L/C:

The ways of transmission of L/C are as follows

i) Through SWIFT

ii) Through Telex

iii) Through DHL or FEDEX

iv) Through Emergency Mail Service (EMS

Back to Back or Countervailing Credit:

The beneficiary of a documentary credit may, for the purpose of fulfilling his

obligation under the credit, open a counter credit in favour of another party to

ship the goods of his purchaser (importer). This is known as Back to back credit


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and is issued conditional terms except prices and invoices. The difference in the

prices goes to the benefit of the original beneficiary.

SWIFT: NCC Bank is a member of society for inters bank financial

telecommunication. Worldwide. It ensures secure messaging having a global

reach of 6495 Banks and Financial Institutions in 178 countries, 24 hours a day.

SWIFT global network carries an average 4 million message daily and estimated

average value of payment messages is USD 2 trillion.

SWIFT is highly secured messaging network enables Banks to send and receive

fund transfer, L/C related and other free format messages to and from any bank

active in he network. Having SWIFT facility, Bank will be able to serve its

customers more profitable by providing L/C, payment and other messages.

5.6. Form of Letter Of Credit

A letter of credit (L/C) may be two forms. These as below:

i) Revocable letter of credit.ii) Irrevocable letter of credit.

(i) Revocable L/C: If any letter of credit can be amendment or change of any

clause or canceled by consent of the exporter and importer is known as

revocable letter of credit. A revocable letter of credit can be amended or

canceled by the issuing bank at any time without prior notice to the beneficiary.

It does not constitute a legally binding undertaking by the bank to make

payment. Revocation is possible only until the documents have been honored by

the issuing bank or its correspondent. Thus a revocable credit does not usually

provide adequate security for the beneficiary.

(ii) Irrevocable L/C: If any letter of credit can not be changed or amendment

without the consent of the importer and exporter is known as irrevocable letter

of credit.

Irrevocable credit constitutions a firm undertaking by the issuing bank to make

payment. It therefore, gives the beneficiary a high degree of assurance that he

will paid tohis goods or services provide he complies with terms of the credit.

Parties to a Letter Of Credit: A letter of credit is issued by a bank at the request

of an importer in favor of an exporter from whom he has contracted to

purchases some commodity or commodities. The importer, the exporter and the

issuing bank are parties to the letter of credit. There are however, one or more

than one banks that are involved in various capacities and at various stages toplay an important role in the total operation of the credit.

a) The opening Bank.

b) The Advising Bank.


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c) The Buyer and the Beneficiary.

d) The paying Bank.

e) The negotiating Bank.

f) The confirming Bank.

(a) The opening Bank: The opening Bank is one that issues the letter Of credit at

the request of the buyer. By issuing a letter of credit it takes upon itself the

liability to pay

the bills drawn under the credit. If the drafts are negotiated by another bank,

the opening Bank reimburses that Bank. As soon as the opening Bank, issuing a

letter of credit (L/C), it express its undertaking to pay the bill or bills as and

when they are drawn by the beneficiary under the credit. When the bills are

presented to or when antic is received that bills have been presented to a paying

or negotiating Banks its liability matures.

(b) The Advising Bank: The letter is sent to the bank by mail or telex and

forwarded by it to the exporter. The bank providing this service is known as the

advising bank. The advising bank undertakes the responsibility of prompt advice

of credit to the beneficiary and has to be careful in communicating all its details.

(c) The Buyer and the Beneficiary: The importer at whose request a letter of

credit is issued is known as the buyer. On the strength of the contract that he

makes with the exporter for the purchase of some goods that the letter of credit

is opened by the opening bank. The exporter in whose favor the credit is opened

and to whom the letter of credit is addressed is known as the beneficiary.

d) The paying Bank: The paying bank only pays the drafts drawn under the

credit but under takes no opening bank, by debating the latters accounts with it

if there is such an account or by any other measured up, between the two

bankers.

e) Negotiating bank: The negotiating bank has to be careful in scrutinize that

the drafts and the documents attached there to be in conformity with the

condition laid down in the L/C. Any discrepancy may result in refused on the

part of the opening bank to honor the instruments is such an eventuality thenegotiating bank has to look back to the beneficiary for refund of the amounts

paid to him.

The Confirming Bank: Sometimes an exporter stipulates that a L/C issued in his

favor be confirm by a bank in his own country. The opening this country to add

its confirming to the credit the bank confirming the credit is known as the

conflrmin~ bank and the credit is known as confirmed credit.


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Documentary Letter Of Credit (Import/Export

Documentation): Documentary letter of credit is such kinds of commercial letter

which a bank issue on behalf of foreign seller (exporter) according to the

direction of the (importers) purchasers. The documents shown under are known

as export documents form the importers side. These are:

(i) Bill of exchange: The bill of exchange is that particular instrument throughwhich payment is effected in trade deals internal and international.

(ii) Bill of lading: A bill lading is a document of title to goods entitling the holder

to receive the goods as beneficiary or endorsee and it is with the help of this

document on receipt from the exporter that the importer takes possession of the

goods . from the carrying vessel at the port of destination.

(iii) Airway bill I Railway receipt: When goods to be transported are small in

bulk or requiring speedy delivery or those are perishable in nature on the deal is

in between the neighboring countries then mode of transports other thanshipping may be resorted to far the carriage of the goods Airways bill / Railway

receipt take place of Bill ~of lading depending on the nature of the carrier.

(iv) Proforma invoice: It is the sellers bill for the merchandise. It contains a

description of goods, the price per unit at a particular location, total value of the

goods, packing specifications, terms of sale, letter of credit, bill of lading

number etc. There is no standard form far a commercial invoice. Each exporter

designs his own commercial invoice form. The invoice is made out by the seller

under his signature in the name of the buyer and must be submitted in a set of

at least 3 copies. Its main purpose is to check whether the appropriate goods

have been shipped and also that their unit price, total value, marking on the

package etc. are consistent with those given in other documents.

(v) Insurance policy: In the international trade insurance policy is a must to

cover the risk of loss on consignments while they are on seas, roads, airways.

The insurance is the

responsibility of the buyers (consignee) under FAS, FOB and C&F contracts and

of the seller (consignor) under CIF contract. The policy must be of the type as

specified in the relative contract / credit. The policy would be for the value of

CIF price plus 10 (ten) percent to cover the expenses and that is required to be

obtained in the same currency as that of the credit and dated not later than the

date of shipment with claims* being payable at the destination. It must beproperly stamped.

(vi) Certificate of origin: This is a certificate issued by a recognized authority in

exporting country certifying the country of origin of the goods. It is usually by

the


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Chambers of commerce. Some times, it is certified by local consul or Trade

Representative of the importing country as per terms of the credit.

vi)Packing list: The exporter must prepare an accurate packing list showing item

by item, the contents of the consignment to enable the receiver of the shipment

to check thecontents of the goods, number and marks of the package, quality,per package net weight, gross weight measurement etc.

(viii) Weightment and Measurement: Issued by recognized authority (like

chambers of commerce and industry) in exporting country certifying correct

weightment and measurement of the goods exported.

(ix) Bill of entry: A bill of entry is a document which contains the particulars

of the imported goods as well as the amount of customs duty payable.The

negotiating bank after received the above documents / papers then this bank

scrutiny the documents. The negotiating bank sends the original shippingdocuments to the L/C opening bank and keeping the second copy with the

negotiating bank

Payment against Documents (PAD) Banks deal in documents and not in goods. If

the shipping document against the L/C is in order then the L/C opening bank

must have to payment to the foreign bank within 3 days according as Uniform

Customs and Practice for Documentary Credit (UCPDC) 500 of revision of ICC.

If the shipping documents have any discrepancy, then the L/C opening bank

informed to the negotiating bank within 7 days. Otherwise, the shipping

documents have not discrepancy. If the importer have not adequate founds in

the bank account then the bank payment to the foreign bank against the

shipping documents

Payment Procedure of Import Documents: Payment procedures of NCCBL

involve the following tasks:

(a) Date of Payment: Usually payment is made within seven days after the

documents documents have been received. If the payment is deferred, the

negotiating bank may claim interest for making delay.

(b): Preparing Sale Memo: As sale memo is made at B.C. rate to the customer.As the T.T & 0. D rate is paid to the ID, the difference between these two rates is

known as Exchange Trading. Then an Inter Branch Exchange Trading Credit

advice is sent to Inter ID. Requisition for the foreign currency

For arranging necessary fund for payment, a requisition is sent to the ID.


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Transmission of telex: A telex is transmitted to the correspondent bank ensuring

that payment is being made.

Chapter -5

Swot Analysis

SWOT Analysis:

.The SWOT analysis is a valuable step in your situational analysis. Assessing

your firms strengths, weaknesses, market opportunities, and threats through a

SWOT analysis is a very simple process that can offer powerful insight into the

potential and critical issues affecting a venture

The SWOT analysis begins by conducting an inventory of internal strengths and

weaknesses in your organization. You will then note the external opportunitiesand threats that may affect the organization, based on your market and the

overall environment. Dont be concerned about elaborating on these topics at

this stage; bullet points may be the best way to begin. Capture the factors you

believe are relevant in each of the four areas. The primary purpose of the

SWOT analysis is to identify and assign each

SWOT Analysis:

.The SWOT analysis is a valuable step in your situational analysis. Assessing

your firms strengths, weaknesses, market opportunities, and threats through a

SWOT analysis is a very simple process that can offer powerful insight into the

potential and critical issues affecting a venture

The SWOT analysis begins by conducting an inventory of internal strengths and

weaknesses in your organization. You will then note the external opportunities

and threats that may affect the organization, based on your market and the

overall environment. Dont be concerned about elaborating on these topics at

this stage; bullet points may be the best way to begin. Capture the factors you

believe are relevant in each of the four areas. The primary purpose of the

SWOT analysis is to identify and assign each significant factor, positive and

negative, to one of the four categories,.
