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The BASIC Bank Limited (Bangladesh Small Industries and Commerce Bank Limited)

established as a banking company under the erstwhile Companies Act 1913 launched its

operation in 1989. It is governed by the Banking Companies Act 1991.

The Bank started as a joint venture enterprise of the BCC Foundation with 70 percent

shares and the Government of Bangladesh with 30 percent shares. The BCC Foundation

being nonfunctional following the closure of the BCCI, the Government of Bangladesh

took over 70 percent shares of the BCC Foundation on 4th June 1992 and became 100

percent owner of the Bank.

I have worked all the key major departments of this bank. General Banking Department

plays a vital role in facilitation of the country.

General Banking comprises of account opening, bills, remittance, clearing, cash and

computer sections. Through these it establishes Banker Consumer relationship, collects

bills for customers, remit funds of customers from one place to another, and honor Cheque

drawn on this branch. General banking department provides these services in a faster and

better manner.

Bank investments are greatly emphasized and we can call all this as the 'Heart' of the

bank because they are a major source of bank's income. They are very important to the

economy as a whole because the expansion and condition of the bank investment affect the

level of business activity through their effect on the nation's money supply. The banks

extended its Investment facilities to different sectors to diversity its Investment portfolio in

compliance with credit policies of Bangladesh Bank. Investment Department plays a vital

role in augmenting the bank's growth and earnings. It provides different types of

Investment facilities too its customers like Secured Over Draft, Cash Credit, House

Building Loan, Trust Receipt (TR), Inland Bill Purchase (EBP), Foreign Bill Purchase etc.

To give security to the banks funds, Investment section takes various documents like DP

notes, Letter of Lien, Registered Mortgage of Collateral Security etc. while sanctioning

these Investments.

www.AssignmentPoint.com 1

BRIEF CONTENTS

PART – 1 [Introduction]PARTICULARS PAGE NO.Cover Page 1[1.1] Background of the Study 2[1.2] Objective of the Study[1.3] Scope of the Study

3

[1.4] Methodology of the Study 4[1.5] Limitations of the Study [1.6] Time period of the Study

5

PART – 2 [Company Profile]Cover Page 6[2.1] Historical Background 7-8[2.2] Functions 9[2.3] Lending Criteria 10[2.4] Board of Directors 11[2.5] Organizational Goals 12[2.6] Organogram of BASIC Bank 13[2.7] Resource & Capabilities 14-15[2.8] Human Resources 16-17[2.9] Monetary Financial Resources 18-21[2.10] Activities 22-23[2.11] Functional Division of BASIC Bank 24-29[2.12] Financial Highlights 30PART – 3 [General Banking] Cash & A/C openCover Page 31[3.1] General Banking 32[3.2] Cash 33-35[3.3] Types of Account 36-39[3.4] Papers/Documents required for opening of INDVIDUAL, JOINT, PROPRIETORSHIP & PERTNERSHIP Account.

40-41

[3.5] Paper/Documents required for opening of LIMITED COMPANY’S A/C

42-44

BRIEF CONTENTSPARTICULARS PAGE

NO.[3.6] Paper/Documents required for opening of EXECUTORSHIPS A/C 45-46[3.7] Paper/Documents required for opening of ADMINISTRATOR, CLUB, SOCIETY, SCHOOL, COLLEGE A/C

47

[3.8] ’’ NGO, JOINT VENTURE, & AIRLINES A/C 48-49[3.9] Special cases in Account Opening. MINOR A/C 50-52[3.10] Special cases in Account SUVIVOR 53[3.11] Account Opening of ILLITERATE PERSON 54[3.12] Special cases in Account Deceased/Stop Payment 55-56[3.13] Account closing & [3.14] Flow chart 57[3.15] Issue of Check Book 58


PART – 4 [General Banking] DD, TT, P/O.Cover Page 59[4.1] Customer Service 60[4.2] T.T. 61-62[4.3] D.D. 63-64[4.4] PAY-ORDER 65-66[4.5] IBCA & IBDA 67PART – 5 [General Banking] CLEARING HOUSECover Page 68[5.1] Clearing House 69-70[5.2] Operational at Branch Level 70-72[5.3] Activities of Inter Bank Clearing House at Bangladesh Bank 73-74[5.4] Inward Clearing at Branch Level (2nd Clearing House 75-76[5.5] Precautionary Measures 77PART – 6 [FOEIGN EXCHANGE]Cover Page 78[7.1] Definition of Foreign Exchange 79-82[7.2] Category of Foreign Trade 83[7.3] Foreign Exchange & Foreign Trade Operation 84-85[7.4] Exports 86-88[7.5] L/C 89-90[7.6] Precautionary Step 91[7.7] Opening L/C 92[7.8] Back To Back L/C 93-96[7.9] Foreign Remittance 97PART – 7 [SWOT ANALYSIS, RECOMMENDATION & CONCLUSION]Cover Page 98[7.1] Swot Analysis 99- 102[7.2] Recommendation 103[7.2] Conclusion 104PART – 8 [REFERENCES & BIBLIOGRAPHY]Cover Page 105[9.1] References 106-107[9.2] Bibliography 108


CONTENTS OF THE GRAPH

PARTICULARS PAGE NO.C-1. Number Of Employees of BASIC Bank 17C-2. Deposit Mix 18C-3. Utilized Fund 21C-4. Category of Foreign Trade 83C-5. Diagram of issuing L/C & B/B, L/C 96

CONTENTS OF THE TABLE

PARTICULARS PAGE NO.[TABLE-1] CAPITAL POSITION 8[T-2] BOARD OF DIRECTORS 11[T-3] EMPLOYEE STATEMENT 16[T-4] Financial Highlights of BASIC Bank 30[T-5] General Banking Activities 32[T-6] Interest Table of FDR 38[T-7] Interest Table of BCD 39[T-8] Account Opening Flow Chart 57


[1.1]

BACKGROUND OF THE STUDY:BASIC Bank Limited is the state owned schedule Bank. Last year Bangladesh Bank under look a project to review the list of best performing Bank. BASIC Bank placed topped in that list.

Banking is one of the most important sectors for a countries wealth building activities. At present the modern business, industrialization foreign trade almost is dependent on banks. But now a day the banking sector of Bangladesh is suffering the default culture, which is the consequence or result of bad performance of most of the banks of Bangladesh.

U.N. declare –

BASIC Bank Limited playing an important role toward the growth and economic development of Bangladesh.

This study is an attempt to produce a constrictive report performance of BASIC Bank Limited with special features of General Banking activities.

Last year Bangladesh Bank undertook a project to review the global best practices in the banking sector and examines in the possibility of introducing these in the banking industry of Bangladesh. Four 'Focus Groups' were formed with participation from Nationalized Commercial Banks, Private Commercial Banks & Foreign Banks with representatives from the Bangladesh Bank as team coordinators to look into the practices of the best performing banks both at home and abroad. These focus groups identified and selected five core risk areas and produce a document that would be a basic risk management model for each of the five 'core' risk areas of banking.

The five core risk areas are as follows: -

1. Credit Risks; 2. Asset and Liability/Balance Sheet Risks; 3. Foreign Exchange Risks; 4. Internal Control and Compliance Risks; and


“INTERNATIONAL YEAR OF MICRO CREDIT 2005 BANGLADESH: PIONEER OF MICRO CREDIT”

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5. Money Laundering Risks.

[1.2]

OBJECTIVES OF THE STUDY:

The main objectives of education are to acquire knowledge. To acquire knowledge ultimately we must do some practical application in addition to theoretical knowledge. Through this report, I tried my level best to present my practical knowledge as find out some objectives.

The main objectives of the Report: -

Company Background. Company’s major functions. Financial Highlights. Types of Account. Paper/Documents required for opening & closing of various

types of Accounts. Special cases in Account opening. Cash receive and payment. Procedures of T.T, D.D, P/O, I.B.C.A & O.B.C. Clearing House – Inward & Outward Clearing. Investment. Foreign Trade.

[1.3 ]

SCOPE OF THE STUDY:

BASIC Bank Limited is the prominent bank in whole banking sector. BASIC Bank Limited, commercial bank is under general special guidelines of the central bank framed for the banking system as a whole and for bank of individual sector.

BASIC Bank Limited is not so old bank but now giving emphasis to create a constructive and meaningful competition with other private sector banks. Also called new generation bank. BASIC Bank owners are dividing by shares but this share is not come into the open share market because Government of Bangladesh is the owner of total shares. It is the one of highly profitable bank.

[1.4]


METHODOLOGY OF THE STUDY:

The following methodology will be followed for the study: -

Primary Sources, and Secondary Sources.

Both primary and secondary data sources will be used to generate this report. Primary Sources:

Primary data sources are scheduled survey, informal discussion with professionals and observation while working in different desks.

The primary sources of my information are as below:

Direct observation Special outlook Questioning the concerned persons. Discussion with the other Bankers.

Secondary Sources:

The secondary data sources are annual reports, manuals, and brochures of BASIC Bank Limited and different publications of Bangladesh Bank.

The secondary sources of my information are as below-

Annual report of BASIC Bank Limited Desk report of the related department Other manual information Different reference books of the library Some of my course elements as related to this report.

To identify the implementation, supervision, monitoring and repayment practice- interview with the employee and extensive study of the existing file was and practical case observation was done.

[1.5]

LIMITATIONS OF THE STUDY:

Objective of the practical orientation program is to have practical exposure for the students. My tenure was for twelve weeks only, which


was somehow not sufficient. After working whole day in the office it way very much difficult, it not impossible to study again the theoretical aspects of banking. On the other hand to prepare my internship report I have faced some limitations as follows.

To collect data and information, it is a common tendency of any departments to keep back their departmental data and information.

Unavailability to required published documents.

I observed that one or two unskilled and unfair persons are present in BASIC Bank; they are not able to teach us various aspects.

[1.6]

TIME PERIOD OF THE STUDY :

BASIC Bank Limited Main BranchBana Shilpa Bhaban(Ground Floor)73, Motijheel C/A,DHAKA-1000

General Banking Division : Eight weeks [Major]Foreign Trade Division : Four weeks

Total : Twelve weeks


[2.1]

HISTORICAL BACKGROUND:

The BASIC Bank Limited (Bangladesh Small Industries and Commerce Bank Limited) establishes as a banking company under the companies Act 1913 launched its operation in 1989. It was incorporated under the Act on the 2nd of August, 1988.The Bank started its operation from the 21st of January, 1989 .It is governed by the Banking Companies Act 1913.The Bank was established as the policy makers of the country felt the urgency for a bank in the private sector for financing Small Scale Industries (SSIs). At the outset, the Bank started as a joint venture enterprise of the BCC Foundation with 70 percent shares and the Government of Bangladesh (GOB) with the remaining 30 percent shares. The BCCI, the Government of Bangladesh took over 100 percent ownership of BASIC on 4th June 1992.Thus there is state-owned. However, the Bank is not nationalized; it operates like a private bank as before.

Basic Bank is unique in its objectives. It is blend of development and commercial banks. The Memorandum and Articles of Association of the Bank stipulate that that 50 percent of loan able funds shall be invested in small and cottage industries sector.

Steady growth in client base and their high retention rate since Bank’s inceptions testify to the immense confidence they repose on its services. Diversified products both liability and assets sides particularly a wide range of lending products related to development of small industries and micro enterprises, and commercial and training activities attract entrepreneurs from varied economic fields. Along with promotion of products special importance is given to individual clients through providing personalized services. In fact individuals matter in this Bank. This motto has been followed for development of clientele as well as human resources of the Bank.

Coping with the competitive and rapidly changing financial market of the country, BASIC Bank Limited maintains close connection with its clients, the regulatory, the shareholders (Government of Bangladesh), other banks and financial institutions.


A BIRD’S EYE VIEW:

YEAR 2006 was a fairly good year for the Bank in the face of severe competition in the Banking industries and changing global and national economic scenario. The Board of Directors was happy with the overall performance of the Bank, particularly for maintaining quality of assets and improving shareholders position, stability and capital position.

[TABLE-1]: Capital Position.


Authorized Capital: TK. 2,000 million.Paid up Capital: TK. 1455.30 million.Total Reserve & surplus up to 2009:

TK. 2468.65 Million.Total assets: TK. 45699.56 million.

Total Loans and Advances at the end of year: TK.29261.53 million

The Bank is required to transport 20 percent of its net profit before tax to

Capital Fund as per the Banking companies Act.

CAPITAL

POSITI

[2.2]

FUNCTIONS:

BASIC BANK LIMITED OFFERS :

Term loans to industries especially to small-scale enterprise.

Full-fledged commercial banking services including collection of deposit, short-term trade finance, working capital finance in processing and manufacturing units and financing and facilitating international trade.

Technical support to Small Scale Industries (SSIs) I order to enable them to run their enterprise successfully.

Micro-credit to the urban poor linkage with Non-Government Organizations (NGOs) with view facilitating their access to the formal financial market for mobilization of funds.

In order to perform the above tasks, BASIC works closely with the clients, the regularly authorities the shareholders Government Of Bangladesh (GOB), banks and other financial institution.

CORPORATE STRATEGY: -

Financial establishment of small units industries and businesses and facilitate their growth.

Steady and sustainable growth. Investment in a cautious way. Adoption of new building technology. Profit maximization. Establishing small industries.


[2.3]

LENDING CRITERIA:

Entrepreneur: Entrepreneur/promoter has to be creditworthy and compete enough to run

the proposed industry.

Viability of the Project: The project should be viable from organizational, technical, commercial,

financial and economic points of view.

Technical Viability: The project should be technically sound and environment friendly. Building should be well planned and well constructed.

Commercial viability: Market prospect potential for the product has to be fully assured at

competitive prices. Marketing channel for the product should be accessible to the

entrepreneurs.

Financial Viability: There should be reasonable debt equity ratio as determined by the a bank

on individual case basis. Debt service coverage ratio should be at least 2.5 times at the optimum

level of production. IRR should preferably be not less than 20 percent.

Economic viability: The project should ensure benefit to the national economy and create

sufficient employment opportunity.www.AssignmentPoint.com 14

[ 2.4]

BOARD OF DIRECTORS:

As stated earlier the government holds 100 percent ownership of the Bank. The Government of Bangladesh appoints all the Directors of the Board. The secretary of the Ministry of Industries is the Chairman of the Bank. Other Directors of the Bank are high Government and central Bank executives.

The Managing Director is an ex-officio member of the Board of Directors. There are at present 7 Directors including the Managing Director.

BOARD OF DIRECTORS

BOARD OF DIRECTORS BOARD OF DIRECTORS

[1]Dr. Nurul AminChairmanBASIC Bank Limited &Secretary Ministry of IndustriesGovt. of the People’s Republic of Bangladesh.

[2]Mr. Musharraf Hossain BhuiyanDirectorBASIC Bank Limited &Head Office Dhaka.

[3]Mr. Mohammed TarequeDirectorBASIC Bank Limited

[4]Mr. S.R.OsmaniDirectorBASIC Bank Limited &ChairmanBangladesh Small and Cottage Industries Corporation (BSCIC).

[5]Mr. Md. Ehasanul HoqueDirectorBASIC Bank Limited &Derector Geneneral,Chief Advisors Office

[6]Mr. Asaduzzaman KhanDirectorBASIC Bank Limited &Executive DirectorBangladesh Bank.


NAME OF BOARD OF DIRECTORS:

Mr. AKM. Sajedur RahmanManaging Director

BASIC Bank Limited.Head Office

Dhaka.

[Table – 2]: Board of Directors.

ORGANIZATIONAL STRUCTURE:

To achieve its organizational goals, the Bank conducts its operations in accordance with the major policy guidelines laid down by the Board of Directors, the highest policy making body. The management looks after the day-to-day operation of the Bank.

MANAGEMENT:

The Managing Director heads the management. The two General Managers and Departmental Heads in the Head office assist him. BASIC is different in respect hierarchical structure from other banks in that it is much more vertically integrated as far as reporting to the Chief executive is concerned. The Branch Managers of the Bank report direct to the Managing Director and, for functional purpose, to the Heads of Departments. Consequently, quick decision making in disposal of assess is ensured.

[2.5]

ORGANIZATIONAL GOALS:

BASIC BANK’S AMBITIONS:

BASIC Bank Limited dedicated their service to the nation through active financial participation in all segments of economy, small industries, trade, commerce and service sector etc.

The Banks main manifest to progress as an institution par excellence to customer satisfaction.

Global Banking has change rapidly and BSIC as worked hard to adapt to these changes.


To pay a vital role in human development and employment generation. To undertake project promotion to identify profitable areas of investment. To search for newer avenues for investment and develop new products to

suit such needs. To establish linkage with other institution which are engaged in financing

micro enterprise. BASIC keeping pace with the changing environment. To corporate and collaborate with institutions entrusted with the

responsibility of promoting and aiding SSI sector. Deep commitment to the society and growth of national economy.

[2.6] [ORGANOGRAM OF BASIC BANK]


CHAIRMA

GM

(Admin)

GM(Operation)

Industrial Credit

Division

PersonalDivision

Deputy General Manager

Assistant General Manager.

Manager

Deputy Manager

Assistant Manager

Senior Officer

OfficerAssistant Officer

Clerical Staff: Banking Staff Go-down Staff

Non-Clerical Staff: Messenger Staff Security Staff

BOARD OF DIRECTORS

CentralAccounts

Establishment&

Branch Control

Credit Division

International Division

MANAGING DIRECTOR

GM(Audit & Inspection)

DEVELOPMEN

[2.7] RESOURCE AND CAPABILITIES:

BASIC Bank is a well prepared to and capable of meeting the demand for a broad range of banking services .It has got adequate resources, both human and physical, to provide the customers with the best possible services.

PHYSICAL AND TECHNOLOGICAL RESOURCES: A great deal of investment for developing the physical resource base of the Bank has been made. BASIC has its presence in all the major industrial and commercial hubs of Bangladesh in order to cater to the needs of industry and trade. At present, there are twenty-seven conveniently located branches in all over Bangladesh. There are ten branches in the capital city Dhaka, Twelve in Chittagong, and Six in Narayanganj and one each in Narshingdi, Rajshahi, Saidpur, Bogra, Khulna, Jessore, Sylhet, Moulovibazhar, Barisal, Khatunganj, Chawmuhoni, and Comilla.

MAJOR FEATURES AND BENEFITS OF THESE BRANCHES:

Global banking has changed rapidly and BASIC as worked hard to adapt to these changes.

The banks main manifest during force for the banks progress as an institution par excellence to customer satisfaction.

Fully computerized accounts maintenance. Well decorated and air conditioned facilities. To pay a vital role in human development and employment generation. A fully operational computer network which is currently being

implemented .The work of Local Area Network (LAN) and Wide Area Network (WAN) installation having reliable and secured communication


between the branches and the Head Office is in progress to facilitate Any Branch Banking and ATM Services.

Money counting & Money checking machine making cash transactions easy, security and prompt.

The bank look forward with excitement and a commitment to bring greater benefits to customers.

Eighteen out of twenty seven branches are authorized dealers of foreign exchange. This facilities speedy disposal of transaction of export and import trades.

A group of professional bankers to render personalized services. BASIC dedicated their service to the nation through active financial

participation in all segments of economy, small Industries, trade, commerce and service sector etc.

BASIC keeping pace with the changing environment. Deep commitment to the society and the growth of national economy.

UPCOMING BRANCHES:

BASIC has already undertaken a massive Branch expansion program that would allow BASIC to establish another two more Branches in key location of the country. The program is now awaiting Bangladesh Bank clearance and approval some of the new upcoming branches are listed below.

o Rampura bruncho Tangail branch

BRANCH NETWORK OF BANGLADESH:

At present, there are twenty-eight conveniently located branches in all over Bangladesh. These Branches are given below: -

DHAKA [Ten Branches in the capital city] CHITTAGONG, [Six Branches in the commercial

city] NARAYANGANJ, [Two Branches in] NORSHINNGDI, [One each in] RAJSHAHI, SAIDPUR, BOGRA, KHULNA, JESSORE, SYLHET, BARISAL, CHAWMUHONI, AND COMILLA.


[2.8]

HUMAN RESOURCES:

BASIC bank has a well-diversified pool of human resources, which is composed of people with high academic background. Also, there is a positive demographic characteristic –most employees are comparatively young in age yet mature in experience .As of 31st December 2003 the total number of employees is 537.

[Table – 3]


EmployeesCategoryLevel of EducationAgeManagementSupport

StaffGraduatePost

GraduateBelow 40AboveNumber537330127410427110

Number & Education level Of Employees

TRAINING: Interactive training on a regular basis, is imported to employees of both management and non-management levels to meet the challenges in the banking industry and to help employees adapt to changes and new working conditions. During he year 2003, a total of 164 employees of the Bank were imparted training in various fields. Out of them 6 employees participated in training course abroad.

Chart: 1. Number of Employees:


FRESH RECRUITMENT:

The Bank follows strict recruitment policy in order to ensure that only the best people are recruited. The Bank, so far, has recruited four batches of entry-level management staff, all of who has excellent academic background.

[2.9]

MONETARY /FINANCIAL RESOURCES:

Like any other financial intermediaries, BASIC is no exception in performing its core functions viz, mobilization of fund and utilizing such und for profitable purpose.

Mobilization of Fund:

The main sources of fund for BASIC are: -

a) Deposit.b) Borrowing.

Chart:2. Deposit Mix in 2006:


DEPOSIT:

Deposit is the mainstay for BASIC Banks sources of funds. The following includes the usual types of deposits of the Bank:

Current Deposit -

Different group of industrial customers encouraged to open current deposit account includes: commercial, small scale industry, medium scale industry, and large-scale industry. Minimum requirements for current deposits worth TK 50,000, and maximum amount can be deposited up to TK 10,00,00000.

Savings Deposit-

General clients are targeted group of savings deposit along with the industrial customers. Savings deposit has no particulars to


deposit minimum, and maximum. But depositors used to get deducted facilities for drawing money from the deposited figure.

Term Deposit-

Depositors with a minimum TK10, 000 are given term deposit facilities for at least six months by means of highest interest rates. Fix deposit term valid up to six years, and then afterwards depositor can redeposit the sum. Another form of term deposit called short-term deposit (STD), a minimal rate of interest given to deposits whereby depositors can withdraw the after term over. Both for Fixed Deposit (FDD), and Short Term Deposit (STD), all type of commercial, and industrial customers are given preferred services to open a term deposit along with a credit & commerce account.

DEPOSIT REQUIREMENTS:

In order to stop money laundering Bangladesh Bank issued new agenda for depositors that is strictly followed by BASIC Bank:

Current Account-

Individual depositors name Passport size photograph Income statements Nationality Nominee Referee Name of the organization Tax identification number, and Source of income

Savings account- Depositors name


Passport sized picture Income statements Nationality Nominee Referee Name of the organization Tax identification number, and Source of income

Limited companies Account- Limited companies rules Constitutional documents Specimen of authorized person’s signature Limited company accounts memorandum Articles of association Power of attorney Board of director’s resolution Certificate of incorporation Certificate of commencement, and List of directors.

Club Society Account-

Clubs or society’s board resolution Membership no Name of board members, and Constitutional rules.

BORROWING:

Apart from deposit BASIC receives funds from-

Bangladesh Bank. Asian Development Bank. Authorized agencies. KFW (Kreditanstalt fur Wieder-aufbau, credit institution for

reconstruction), a German Bank.

UTILIZATION OF FUND: www.AssignmentPoint.com 25

BASIC utilizes its funds in accordance with its organizational goals and corporate strategy. Main use is for lending to industrial and trade sectors. Maintenance of cash and statutory liquidity reserve with the Bangladesh Bank covers 20 percent demands and time liabilities. Placement of funds in Nostrums Accounts to handle foreign trade and investment in money market is also done as usual.

Chart:3 Utilized Fund:


[2.10]

ACTIVITIES:

INDUSTRIAL CREDIT: BASIC Bank’s services are directed towards promotion and development of the entrepreneurs in the small industries sector. Its exposure to small industries sector accounted for 57.21% of the total loans and advances. A small; industry, as per industrial Policy 1999 has been defined as an industrial undertaking whose total fixed investors is less than Tk. 100 million. In 2003, total outstanding industrial loans including term and working capital stood at Tk.6252.50 million, compared with 2002 Taka of 4653.55 million. It registered a growth of 34.36% over the previous year. Total outstanding term loans stood at Tk.2273.77 million as on December 31, 2003. It was compared with previous year growth at 40.75%. During this year 187-term loan were sanctioned, where 74 projects were new. As on 31 December, 418 projects were in the portfolio of the bank. The textile sector including garments being one of the major contributions to national economy dominated the loan portfolio of the bank. Other sectors financed include engineering, food and allied industries; chemicals, pharmaceuticals, paper, board, printing, packaging, glass, ceramics, and other non-metallic goods and jute products. Recovery rate of project loan was 88 percent.

COMMERCIAL CREDIT:

BASIC Bank lends support towards development of trades, business and other commercial activities in the country. Short other term trade finance and other non-fund services get full attention in the Bank. The Bank offers a complete range of services to the exporters and importers by extending various facilities. The Bank provides cash credit for local trade, export cash credit, packing credit, local and foreign bills purchase facilities. As on 31 December 2003, total amount outstanding in respect of these facilities stood at Tk.3029.70 million. This includes cash credit for local trade; export cash credit including packing credit, local bills purchase and foreign bills purchase etc. MICRO CREDIT:

BASIC launched a Micro Credit Scheme in 1994. Micro Credit Scheme provides support for the poor for generation of employment and income on a sustainable basis, particularly in urban and suburban areas. The Bank follows three systems of credit delivery. These are:


Lending to the NGOs who on-lend to their members. At present there are 17 such NGOs.

Lending direct to the target groups or ultimate borrowers under the Bank’s own management.

Lending direct to the member-borrowers and NGOs providing non-financial services like group formation and monitoring and supervision fee. As at the end of 2003, a cumulative amount of micro credit of TK. 181.00 million was disbursed. Recovery rate during this period remained at a satisfactory rate of 98.00 percent.

FOREIGN TRADE: The Bank handles foreign trade in which it has a comparatively large share despite its small size. BASIC provides various facilities related to L/C and post import finance like loan against imported merchandise (LIM) and loan against trust receipt (LTR) to the importers and back to back L/C and pre-shipment finance facilities like export credit, packing credit and foreign bills purchase (FBP) to exporters. So far the Bank has established correspondence relationship with as many as 11 foreign banks in order to facilitate foreign trade. Handing of import business grew from Tk. 8930.50 million in 2003. Export business handled by the Bank also increased of Tk.6523.00 million in 2003.The Bank became a proud member of SWIFT (Society for Worldwide Inter-bank Financial Telecommunication) that would pave the way to achieving uninterrupted connectivity in foreign exchange business and fund transfer. OTHER ACTIVITIES: The Bank provides services floor remittance, underwriting, guarantee, public offering of shares etc. The Bank also provides funds to investment and leasing companies. The Bank has recently created a venture capital fund for equity support to innovative but risky projects. [2.11]

FUNCTIONAL DIVISION OF BASIC BANK:

The bank has 28 branches, 6 Zones spread throughout the country. At the head office level there are 12 divisions most of which have more than one functional department which are headed by DGM and Training institute by a director with the rank of CGM.

THE NAMES OF THE DIVISIONS ARE: Personnel Division (PD).


Establishment & Common Service Division. Human Resources Development Division. Secretary’s Division (Aboard Division). General Credit Recovery Division. Industrial development finance division. International division. Control development & co ordination division. Audits an inspection division. Planning and research and statistics division. Computer system and procedures division. And Law division.

These are the different division of BASIC bank that are serving their services to the bank as well as to the country with great efforts according to their respective fields.

FUNCTIONS OF SOME IMPORTANT DIVISIONS:

PERSONNEL DIVISION (PD): This division is headed by a D.G.M. Under this division, there are five departments namely: -

1. Recruitment department, 2. Promotion department, 3. Transfer department,4. Records department, and5. Salaries and welfare department.

Their functions are as follows: -

Frame personnel policies of the bank and implement these in harmony with the overall objectives and policies of the bank and the Government.

Ensure recruitment, promotion, transfer and posting of all officers and staff of the bank in conformity with policies, rules and procedures of the bank and the government.

Maintain personnel records the officers and staff and update those for ensuring appropriate personnel actions such as promotion, transfer training etc.


Deal with compensation package of the employees that include such items as salaries T.A. D.A., house rent, and medical bills.

Deal with sports cultural and welfare activities for the employees.

Carry put overall manpower planning form the bank assess the need for recruitment, training and development and sources, methods, and media of training, maintaining and update various types of data on training and skill of the employees.

Cater training needs of the various categories of the employees of the bank.

Organization workshop, seminar, symposium and other programs for developing human resources of the bank.

ESTABLISHMENT AND COMMON SERVICE DIVISION:

Under this division, there are 4 departments namely: -

1. Dead stock & Equipment department,2. General transport pool,3. Security department, and4. Divisional administration department.

This division performs the following functions : -

Procure, supply and repair furniture fixture and other office equipment.

Collect bank’s necessary articles security papers etc. Distribute all sorts of stationary. Dispatch and receive mail, telephone, telegram telex etc. Maintain and control vehicles and purchase spare parts tires, tubes

etc. and when necessary. Deal with divisional staff administrative matters.

HUMAN RESOURCES DEVELOPMENT DIVISION:

Human resources development division performs following functions: -

Frame human resources development policies of the bank and implement these in harmony with the overall objectives and polices of the bank and government.


Carry out overall manpower planning for the bank assesses the need for recruitment training and development and sources.

Methods and media of training maintain and skill of the employees. Cater training needs of the various categories to the employees of the

bank.

BOARD DIVISION:

The Board division‘s functions and activities are as follows: -

Performing ass duties relating to MD/ Review committee/Board of Directors meeting.

Supervising all functions of MD’s secretariat including appointment with visitors, maintaining liaison with government, autonomous bodies and other financial institutional.

Dealing with matters relating to fund management bill purchase and utilization of surplus fund, credit budgeting banks and maintenance of the records of comparative positions of all financial institutions.

GENERAL CREDIT RECOVERY DIVISION:

It is also one of the vital divisions in the head office and headed by a DGM. General Credit Monitoring department are:

There are two departments namely: - 1. Advance department.2. Recovery department.

This division performs the following functions: - Co- ordinate and supervise all credit policies and operation of the

bank except rural credit and industrial development credit. Prepare, monitor and review the central credit budget of the bank. Supervise all classified advances other than micro credit and

industrial credits. Exercise special control over jute advances of all branches and

zones. Take necessary steps for effective recovery efforts.


INDUSTRIAL DEVELOPMENT & FINANCE DIVISION (IDFD): Under this division there are 4 departments namely: -

1. Appeal & sanction department.2. Implementation department.3. Follow up & recovery department.4. Accounts statistics & data feeding department & special

credit department.

IDFD performs the following functions: - Appraisal industrial projects and process for sanction, Inspect, supervise and monitor implementation of projects, Follow up and supervised use of loans, and Plan and undertake recovery drives.

INTERNATIONAL DIVISION (ID): ID performs the following functions: -

Preparation of the work plan program of the division and distribution of the same among different departments of the division for action or information,

Accounts and reconciliation activities of the foreign bank account and reconciliation of account section,

Import and export finance activities of the import financing section and export financing section, and

Foreign aid/loan/barter/grant operation activities of the aid and barter financing section.

CONTROL DEVELOPMENT & CO – ORDINATION DIVISION:

This division is responsible for issuance of operational guidance and instruction to the branches including supply of the operational manual where required. It also ensures maintenance of the existing systems and procedures in respect of general banking by the branches.


AUDIT & INSPECTION DIVISION:

Audit & Inspection division is headed by a DGM. There are 6 sections under this division.

This division performs the following functions: -

Plan and prepare programs for auditing branches. Select audit these and give audit programs to them for

implementation. Supervise the activities of the audit team. Conduct special audit of branches for detection of fraud & forgeries. Scrutinize audit reports. Submit consolidated compliance report received from branches to

the commercial audit department ministry of finance and Bangladesh bank.

PLANNING RESEARCH & STATISTICS DIVISION (PRSD):

It has 4 departments namely: -

1. Business & mgmt. Planning department.2. Research & publication department.3. Statistics department. and4. BASIC bank central library.

The functions of PRSD are given following: -

Identify problem /gap areas of operation and management for the purpose of conducting research.

Appraise system and procedures for updating. Evaluate the progress of the bank periodically. Develop new services & review existing ones for improvement. Prepare annual reports of the bank.

COMPUTER SYSTEM & PROCEDURE DIVISION (CSPD): This division has 4 sections these are as follows: -

1. Systems and programming section.2. Computer operation section.3. Data encoding section. And4. Banking mechanism section & data control section.


The functions of this division are given below: -

Identify the computerization needs of the bank. Co ordinate with other divisions. Plan oration of the bank’s computer with optimum benefit.

LAW DIVISION:

Law division has two performing wings. They are: -

1. Follow-up and suit filling wing.2. General and monitoring wing.

Law division performs overall supervision of following: -

Follow- up and suit filling activities of the concerned departments.

General and monitoring activities of the concerned departments pertaining to counseling service to the top management checking legal prints, drafting lease deeds, checking and verifying deferent forms of the bank.

[2.12] [Table-4]


FINANCIAL HIGHLIGHTS OF BASIC BANK LIMITED:

2005 & 2006 (Million in TK.)

Particulars 2008 2009

Authorized capital 2,000.00 2,000.00

Paid-up capital 1309.77 1455.30

Capital Surplus / (deficit) 1672.82 2468.65

Total Assets 4666.03 45699.56

Deposits 38368.23 34501.69

Total Loans and Advances 27269.13 29261.53

Long Term Debt. 1708.4 2875.16

Placement & Investment 15659.03 12244.91

Profit after tax and provision 549.86 648.85

Tax Paid 3538.01 4225.37

Export 22270.87 19887.70

Import 27359.77 33976.6

Loan to Deposits liabilities 71.07 84.81

After tax return on average assets (ROA) 1.30 1.41

Net Profit to Gross income 10.87 12.57


[3.1]

GENERAL BANKING:


General Banking is the most important and common part of any bank. Cause majority transaction is held in this section. This section has four (4) parts as follows:

The structure of General Banking as follows:

[Table-5]

[3.2]

CASH:www.AssignmentPoint.com 37

GENERALBANKINGACTIVITIE

CASH

RECEIVE

&

PAYMENT

ACCOUNT OPEN

PROCEDURE

CLEARING

CUSTOMER SERVICEDD,TT, &

Cash section demonstrates liquidity strength of a bank. It also sensitive as it deals with liquid money. Maximum concentration is given while working on this section. As far as safety is concerned special precaution is also taken. Tense situation prevails if there is any imbalance in the case account.

CASH SECTION: The function of this unit is to receive and payment of cash. The vault limit cash limit of the branch is TK.15000000 and TK.1000000 respectively. The head teller is allowed to en cash check up to TK.100000 with her own signature. If additional cash is required then the second man of the branch makes arrangement on request. There are one chief officer, one senior officer, and two Banking officers in this department.

Operation of this section begins at the banking hour. Cash officer begins her/his transaction with taking money from the vault, known as the opening cash balance. Vault is kept in a very secured room. Keys to the room are kept under control of cash officer and branch in charge. The amount of opening cash balance is entered into registered. After whole days’ transaction, the surplus money remains in the cash counter is put back in the vault and known as the closing balance. Money is received and paid in this section.

CASH RECEIPT:

At first the depositor fill up the Deposit in the Slip. For saving account and current account same Deposit in Slip is used in this Branch.

After filling the required deposit in slip, depositor deposits the money.

Officers at the cash counter receives the money, count it, enter the amount of money in the register kept at the counter, seal the deposit in slip and sign on it with date and keep the bank’s part of the slip. Other part is given to the depositor.

All deposit slip of saving; Current and STD A/C are maintained in accounts section.

CASH PAYMENT:


Cash payment of different instruments is made in the cash section. Procedure of cash payment against check is discussed below elaborately. Cash payment of check includes few steps.

First of the entire client comes to the counter with the check and give it to the officer in charge there. The officer checks whether there are two signatures on the back of the check and checks his balance in the computer. After that the officer will give it to the cash in charge.

Then the cash in charge verifies the signature from the signature card and permits the officer in computer to debit the client’s account by giving posting. A posted seal with teller number is given.

If the signature matches with the one given previously then the teller will make payment keeping the paying check with him while writing the denomination on the back of the check.

Cash paid seal is given on the check and make entry in the payment register.

There are few things that shall be scrutinized and checked before making payments.

Name of the drawer. Account number. Specimen signature. The validity of the check and make it sure that it is not post dated or

undated. The amount in words and figures are same.

CASH BALANCE CALCULATION:

The officer in charge of cash section does the calculation and then Sub-manager or authorized officer will check the balance and sign in the cash balance book. The balance is maintained in the balance book. Opening balance of current day is the closing balance of the previous day. Total receive of the current day is added with the opening balance and total payment is deducted for calculating the closing balance or cash balance.

CASH PACKING AND HANDLING: www.AssignmentPoint.com 39

Cash packing and handling needs a lot of care as any mistake may lead to disaster. Packing after banking hour when the counter is closed, cash are packed according to denomination. Notes are counted several times and packed in bundle, stetted and stumped with initial.

TELLER CUSTOMER RELATIONSHIP: In a bank a person who delivers and receives cash from the cash counter is known as teller, a customer meets most of the time in a bank with a teller on the counter. So teller should hold certain quality.

Should be friendly.

Provide prompt service.

Be accurate in his task.

Be carefully.

To have endless patience.

Be smart.

In short, a teller should be efficient otherwise he has to pay.

[3.3]

TYPES OF ACCOUNT:

Keeping an eye on the needs of the customers and to ensure their full satisfaction BASIC Bank has a full range of deposit products.

There are mainly five types of Accounts are as follows: - 1. Savings Deposit (SB) 2. Current Deposit (CD) 3. Short Notice Term Deposit (STD) 4. Fixed Term Deposit (FTD) 5. Bearer Certificate of Deposit (BCD)

1. SAVINGS BANK DEPOSIT ACCOUNTS (S.B): www.AssignmentPoint.com 40

Savings Bank Deposit account may be opened in the name of adult individual or jointly in the names of two or more persons payable either or both or all them or to the survivor with total satisfaction of Bank.

These are interest bearing deposit accounts. (Present interest rate 5.00% in BASIC Bank Ltd.

Savings Bank Account shall not be allowed to be overdrawn. Saving Bank Account must not be allowed to be conducted as Current

Account. The drawings are restricted in respect of both the amount of withdrawal and

the frequency thereof so that the payment of interest does not become non-compensating for the banker.

No interest will be paid in a Savings Bank Account for the month in which withdrawals have been made more than twice a week or over 25% of the balance of his/her accounts without notice. For withdrawal of sum exceeding 25% of the balance, 7 days notice in writing should be given to the bank.

Interest shall be calculated on the minimum balance at the credit of an account between the close of the 5th day and the last day of the month.

Interest will be applied half yearly on 30th June & 31st December at the prescribed rates as advised by Head Office

These accounts intended for individual savings and are not suitable for business concerns that require frequent withdrawals.

Bank may however refuse without assigning any reasons to open savings account by any body.

The Bank reserves the right to close any Savings Bank Deposit account with prior notice.

2. CURRENT DEPOSIT ACCOUNT (C.D):

A Current Deposit Account may be opened in the name of person(s) having contractual capacities. Any individuals, firm, company, club, association, and corporate body may open a Current Account.

Drawings are allowed on demand from such an account without any restriction within the funds available in its credits.

No interest is payable on the balance of current accounts. Bank may however refuse without assigning any reasons to open current

account by any body. The Bank reserves the right to close any current account with prior notice.

3. SHORT TERM DEPOSIT ACCOUNTS (STD): www.AssignmentPoint.com 41

Short Term Deposit Account (STD) are opened usually by Corporations, Banks and Financial Institutes etc.

These deposits are withdrawn able on 7 days’ notice by the account holder(s). Withdrawal is allowed after the expiry of notice period.

Interest on such deposits are payable at the rate determined by Head Office from time to time. (Present interest rate on STD A/C is 3.00% in BASIC Bank Ltd.)

Interest shall be calculated on daily product basis and applied half yearly at end of June and December or when an account is closed.

4. FIXED TERM DEPOSITS (FTD):

Fixed Deposits may be opened by one adult individual singly or by more than one adult individual jointly or by any Government/Private /Autonomous or other organization.

These deposits shall be opened for a fixed period ranging from three months to two years.

Interest on FDR shall be payable only after maturity of the FDR along with the principal.

Following rate of interest on FDR is prevailing in BASIC Bank Limited.

Following rate of interest on FDR is prevailing in BASIC Bank Limited.

[Table-6]

Period Interest Rate

3 Months and above 5.75%




Payment of FDR will be made on demand after expiry of the maturity period on presentation of FDR duly discharged by the depositor(s).


Rate of Interest on F.D.R.

For encashment of FDRs before maturity, if FDR is encased before expiry of 3 months no interest would be given. Interest for 3,6 or 12 months, as the case may be given if encased after expiry of such period but before maturity.

(Circular no. BASIC/HO/ICD/2000/7583, Dated 14-11-2000) Each time when FDR is opened, it shall be considered as a separate

contract. Fixed Deposits are neither transferable nor negotiable.

5. BEARER CERTIFICATE OF DEPOSIT (BCD):

From 1983 a saving scheme named Bearer Certificate of Deposit (BCD) has been introduced under circular of Bangladesh Bank to bring the black money in investment cycle. BCDs are issued for multiples of Tk.50, 000.00 such as Tk.1, 00,000.00, Tk.1, 50,000.00 and so on for unlimited amount. No signature is required to issue a BCD. The holder is owner of BCD.

Who can get it issued: Any individual without disclosing his/her identity and without Opening any account.

Period: These deposits shall be opened for a fixed period ranging from three months to two years.

Interest: Interest rate is 1% bellow as that of FDR.

Following rate of interest on BCD is prevailing in BASIC Bank Limited.[Table-7]

Period Interest Rate






Rate of Interest on B.C.D.

[3.4]

Papers /Documents required for opening of INDIVIDUAL/JOINT, PROPRITORSHIP, & PARTNERSHIP ACCOUNTS:

INDIVIDUAL /JOINT:

Two copies of passport size photograph of the Account holder(s) or Person(s) who will operate the Account duly attested by acceptable introducer,

Passport, Introductory Certificate from Employer, Introductory Certificate from renowned person of the society

acceptable to Bank/Financial Institutions, and TIN Number (If applicable).

CAUTIONS:

In Account opening form Name, Present & Permanent address, Date of birth, Age of account holder, Father’s Name, Mother’s Name, Husband’s Name in case of married lady must be filled up properly in Account opening form.

The Introducer of the proposed new account must be maintained an account with the branch for at least one year and the account must have good transactions over the last year.

The details of the identity, address and business of the new account holder must be verified and the branch In Charge should be satisfied about the person/firm/company’s credibility.

A letter of thanks shall be sent to the introducer and to the account holder on Bank’s Standard Form.

PROPRIETORSHIP FIRM:

Two copies of passport size photograph of the Account holder(s) or person(s) who will operate the Account duly attested by the introducer.

Certified copy of valid Trade License from the Municipality/ City Corporation/Union Parishad.


Passport/ Introductory Certificate from Employer /Introductory Certificate from renowned person of the society acceptable to Bank/Financial Institutions.

TIN Number (If applicable).

CAUTIONS: Same as Joint/Individual Account.

PARTNERSHIP FIRM:


Certified copy of valid Trade License from the Municipality/ City Corporation/Union Parishad.

Certified copy of the Registration Certificate of Partnership Deed duly attested by Notary Public in case of registered firm.

Partnership Account Agreement.

Resolution signed by all partners to open the A/C.




[3.5]

Papers /Documents required for opening of LIMITED COMPANIES ACCOUNTS:

LIMITED COMPANY:


Two copies of passport size photograph of the Account holder(s) / person(s) who will operate the Account duly attested by the introducer.

Certified copy of Memorandum & Articles of Association by RJSC.

Certified copy of Certificate of Incorporation by RJSC. Certified copy of Certificate of Commencement of Business (in

case of Public Limited Company).

Up to date list of Directors.

Certified copy of Resolution of the Board of Directors for opening & operation of the Account.




LIMITED COMPANY:

A company registered under Companies Act, 1994 has a legal entity apart from its shareholders.

A Company has been defined as ‘an artificial person created by law with a perpetual succession and a common seal”.

A Company may, therefore, be defined as a separate legal person brought into existence by registration or incorporation under The Company Act, 1994 in pursuance of several individuals agreeing to form themselves in to a Company.


PRIVATE LIMITED COMPANY:

Private Limited Company means a company, which by its articles restricts the right to transfer the shares.

Minimum number of its members is 02 and maximum number may be 50 not including persons who are in the employment of the company.

Prohibits any invitation to the public to subscribe for the shares, if any, or debentures of the company can launch the business after getting Certificate of Incorporation.

Certificate of Commencement of Business is not required here.

PUBLIC LIMITED COMPANY:

Public Limited Company means a company incorporated under this Act, which is not a Private Limited Company.

In Public Limited Company has the following specialties by its articles –

Minimum number of its members is 07 and maximum number may be equal to number of shares.

Shares are transferable.

May invite to the public to subscribe for the shares, if any, or Debentures of the company.

Certificate of Commencement of Business is required to launch the business after getting Certificate of Incorporation.

TRUST:



Up to date list of Members of the Trustee Board.

Certified copy of Deed of Trust certified by the Chairman/Secretary of Trustee Board.

Certified copy of Resolution of the Trustee Board for opening & operation of the Account.


[3.6]

Papers /Documents required for opening of EXECUTORSHIPS ACCOUNTS:

EXECUTOR:

An executor is a person appointed by a testator for execution of the last will leave by him. Upon production of probate of the will the executor should be allowed to close the deceased’s account and deal with the credit balance as per terms and conditions of the will, affecting the account.

In case of credit balance of the deceased’s account, it is preferable for the banker that the executor opens the required account as an executorships account instead of an account in the personal name of the executor.

If there is more than one executor the account should desirably be opened under the joint signatures of all the executors through they have powers individually and a definite arrangement made whether operations on the account will be done by one executor singly or jointly by all, by two or more of them.

Where there is a debit balance in the account arrangement should be made with the executor for adjustment there of as soon as the executor is able to realize sufficient of the deceased ‘s assets.

The banker should not allow any transfer of the deceased’s assets. The banker should not allow any transfer of the deceased’s funds to the personal account of the executor nor he should allow the executor to raise any personal loan against security of the deceased’s property. Otherwise, he will be held liable for the misuse.

The executor is the legal representative of the testator for all purposes and all property of the deceased vest in him. The executor has power to sue and recover debts as the deceased had when living as well as to dispose of property and incur


expenses as he may think fit and necessary for administration of the estate subject to restrictions, if any, as laid down in the will and the probate.

On the death of the executor his duties devolve on his executor and where there is more than one executor the deceased’s power vests in his survivor co-executor unless otherwise provided for in the will. An executor cannot normally delegate his power except to one of them where there is more than one.

Required Paper for an executorships account: -

Two copies of passport size photograph of the executor / person(s) who will operate the Account duly attested by appointed by the testator for execution of the last will leave by him.

Will deed executed by a testator for execution of the last will leave by him in the front of 02 male or 01 male & 02 female to operate the account.

Will probate accepted by Court.

Power of Attorney executed by a testator for execution of the last will leave by him favoring the executor in the front of 02 male or 01 male & 02 female to operate the account.



CAUTIONS:

Same as Joint/Individual Account.

The banker should not allow any transfer of the deceased’s assets. The banker should not allow any transfer of the deceased’s funds to the personal account of the executor nor he should allow the executor to raise any personal loan against security of the deceased’s property.

Otherwise, he will be held liable for the misuse.


[3.7]

Papers /Documents required for opening of ADMINISTRATOR & CLUB/SOCIETY/SCHOOL/COLLEGE ACCOUNTS:

ADMINISTRATOR: An administrator is appointed under the authority of a court of competent jurisdiction where the deceased appointing an executor leaves no will. The administrator has substantially the same duties and powers as those of the executor; they differ mainly in the manner of their appointment. While the executor derives his authority from the will immediately after the testator’s death, the administrator derives his authority from the letters of administration, which he produces to the banker for inspection as an executor produces probate of the will for the purpose of a bank account. The administrator is also the legal representative of the deceased with powers to sue, recover debts and incur expenses. But he may not mortgage, charge or transfer any property without prior permission of the court granting the letters of administration. On the death of an administrator the surviving administrator, if any, acts, but on the death of the last administrator fresh letter of administrator is necessary.

CLUB/ SOCIETY/SCHOOL/COLLEGE ETC:


Memorandum & Articles of Association duly certified by the Chairman/Secretary.

Bye Laws & Regulation/ constitution duly certified by the Chairman or Secretary.

In case of cooperative society Bye Laws & Regulation/ constitution. Duly certified by Cooperative Officer. Resolution of Management Committee/ Executive Committee for

opening & operation of the Account. Up to date list of Office Bearers/ Governing Body/ Managing

Committee duly certified by the Chairman/ Secretary. Government approval in case of registered Club/society.



[3.8]

Papers /Documents required for opening of NGO, JOINT VENTURE, & AIRLINES ACCOUNTS:

NGO: Two copies of passport size photograph of the Account holder(s) /

person(s) who will operate the Account duly attested by the introducer.

Certified copy of Bye Laws & Regulation/ constitution duly certified by the Chairman/ Secretary.

Certified copy of Resolution of Management Committee/ Executive Committee for opening & operation of the Account.

Up to date list of Office Bearers/ Governing Body/ Managing Committee duly certified by the Chairman/ Secretary.

Permission from NGO Bureau. Permission from Head Office.

(Circular no. BASIC/HO/Gen/2000/14, Dated 18-10-2000)


JOIN VENTURE COMPANY (BANGLADESHI + FOREIGNER):


Copies of passports of A/C operators (1st 6 pages + visa pages for foreigners).

List of Directors Resolution of the Board of directors for opening & operation of the Account Permission from Board of Investment. Joint Venture agreement attested by Notary public Certified copies of the Memorandum and Articles of Association Certified copies of incorporation.



AIR LINES:


Certified copy of Memorandum & Articles of Association. Certified copy of Certificate of Incorporation. Certified copy of Certificate of Commencement of Business (in case of

Public Limited Company). List of Directors. Resolution of the Board of Directors for opening & operation of the

Account Copy of Agreement/Contract with Local GSA. (Attested as above) Permission from Civil Aviation Authority of Bangladesh. Permission from Board of Investment of Bangladesh Permission from Bangladesh Bank


ACCOUNTS OF MUNICIPAL CORPORATIONS, LOCAL AUTHORITIES, DISTRICT COUNCILS, OTHER PUBLIC BODIES:

Before opening the account of any Government or Semi-Government Organization or a Local Body, a certified copy of the Statute or any other law by which the body is created and governed shall be obtained.

Two copies of passport size photograph of the Account holder(s) or person(s) who will operate the Account duly attested.

Resolution of the Board of Directors for opening & operation of the Account.

The Name, Address, Signature and Power of the account operator should be mentioned in mandate.

If the account operator is transferred then posting order and joining report of newly posted employee are required and the previous person verified the newly posted employee’s signature.


[3.9]

SPECIAL CASES IN ACCOUNT OPENING:

MINOR ACCOUNT:

Who is Minor?A person who has not completed his 18th year of age is considered to be a minor.

But in those cases where the court appoints guardian to person or property of minor or the property of the minor is put under charge of a Court of Wards during the period of his minority, the person shall become major on completion of 21 years.

According to Contract Act minor has no right to sign a contract. So minor cannot open an account. But a Guardian of a minor can open and operate an account by minor’s name.

Guardian of minor can open two types account by signing on stamp by any of the following declarations.

Minor is not owner of deposited money in minor account but he/she has right to withdraw money.

Minor is the owner of deposit in minor account.

Minor is not owner of deposited money in minor account

CAUTIONS:

Banker has to take special care so that no overdraft can be made on minor account. Minor cannot be liable for any loan as minor has no right to sign a contract.

Minor should not provide chequebooks. But she/he can use cheque leaf. Minor will sign an only a loose cheque leaf in front of Branch In Charge so that he/she cannot draw excess amount of money. In any case, when there is the least doubt, proper identification must be obtained & banker should inform the Guardian of minor.

No cheque, bill should not receive in minor account. If any dispute arises minor cannot be liable for any contract.


Minor is owner of deposited money in minor account:

In that case minor cannot withdraw money from this account before being adult.

CAUTIONS:

Date of birth of minor and the date of attaining majority should be noted at the top of the Account Opening Form and in the computer. So that he/she can withdraw money after being major.

The Guardian who opened the account in the minor’s name will introduce the minor after becoming adult to bank. In this introduction a renowned person should be present as a witness.

How ever the minor’s account can be opened in his own name and minor himself can operate the account in the following way:

I. Minor who is 12 years or above may be allowed to maintain deposit account with us.

II. Normal procedure of introduction and other formalities shall be observed.

III. The account shall be non-borrowing in nature. Under no circumstances there shall be any overdraft in this account.

IV. Minor can draw a cheque. If there is wrongful dishonor of such cheque minor can sue Bank for damage and for wrongful dishonor. If there is a wrongful payment to the minor, Bank will not be able to recover such payment. So Branch should be very cautious for any payment to the minor.

V. In case of death of the minor, his legal heirs would be the beneficiaries of the Account.


ACCOUNTS OF PARDANSHIL LADIES:

Accounts of Pardanshil ladies shall not be opened unless a respectable party known has introduced them and acceptable to the Bank provides that they can read and write English/ Bengali.

Banker should open the account in name of a pardanshil woman only after getting full information of her social status, education, and proper introduction. Because it is very difficult to prove in the court that a pardanshil woman willingly opened a bank account.

CAUTIONS:

The introduction of the pardanshil woman should be taken satisfactorily.

Accepted responsible person and signature to be made in front of Authorized Officer/Manager should verify the signature of pardanshil woman.

If the lady is married, her husband’s name, address, occupation should be written carefully. If her husband is service holder then information about his employer, place of posting should be written carefully.

No advance should allow in favors of a pardanshil lady.

Accounts of illiterate Pardanshil ladies shall not be opened under any circumstances.

[3.10]

SPECIAL CASES IN ACCOUNT SURVIVOR:

JOINT ACCOUNT:

In case of accounts to be opened in two or more names, “Either or Survivor” containing clear and specific instructions regarding operations of the accounts. These instructions shall be obtained under the signatures of all of them.


“EITHER OR SURVIVOR”

If in the account opening form contains the Instruction “Either or Survivor”, in case of death of any joint account holders the balance will be payable to the survivor with total satisfaction of Bank.

In absences of the instruction “Either or Survivor”

In the absence of specific instructions in the Form “ Either or Survivor” balance of the joint account will be payable to the survivors and the legal representatives of the deceased joint account holder.

CAUTIONS:

In the event of death of any account holders, the survivor shall be requested to close the old account and open a new account in the name of the surviving account holder

No overdraft shall be allowed in a Joint Account, unless all the parties to the account operate it jointly, and charge documents in respect of the advance are also signed by all of them.

[3.11]

ACCOUNT OPENING OF ILLITERATE PERSON:

ACCOUNTS OF ILLITERATE PERSON:

An illiterate person can be identify only by his thumb impression & photograph. Illiterate persons desirous to open account may be allowed to open and operate on an account under their thumb impression. So banker should take special cautions to open and operate this account.

Required paper/documents: i) The introduction of an illiterate person should be taken

satisfactorily. ii) The thumb impression (left hand) of the depositor must be obtained in

the Account Opening Form and Specimen signature card in the presence of an authorized Officer / Manager.


iii) Two copies of recent passport size photograph duly attested by acceptable introducer. One should be pasted on the specimen

iv) Passport/ Introductory Certificate from Employer /Introductory Certificate from renowned person of the society acceptable to Bank/Financial Institutions.

v) A letter of undertaking shall be obtained from him to the effect that he will not operate on the account unless he personally come to the Bank and put his thumb impressions on the cheque in the presence of the Manager/Authorized Officer.

vi) Wherever possible, brief details of one or two identification marks of the depositor should be noted on the Account Opening Form and specimen signature card under authentication of authorized officer/Manager.

CAUTIONS: i) Only saving account may be open favoring an illiterate person.ii) “Account of Illiterate Person” this seal should be marked on

Account Opening Form, specimen signature and ledger.iii) No chequebook should issue in favor of this account holder.

For withdrawal of money the account holder should be come at bank premises and he will fill up the loose cheque. He will put his thumb impression on cheque in front of Manager. After being satisfied on verification the thumb impression and photograph of specimen signature card the authorized officer will allow him to withdraw the money.

[3.12]

SPECIAL CASES IN ACCOUNT DECEASED / STOP PAYMENT:

DECEASED ACCOUNT:

In case of death of an individual accountholder, all operations in his account shall be stopped for with. A “Caution mark: Deceased account” shall be drawn just below the balance of the account.

As soon as the information is received either through newspaper or some reliable source about the death of a constituent, the date of death and source of information shall be noted in the Computer against the relevant account. Interest on the account of the Deceased shall not be paid as death terminates the contract with the Bank.

CAUTIONS:


i) The credit balance of the deceased customer shall not be paid to any person unless a probate or letter of administration or succession certificate issued by a competent court is produced to the Bank and the Bank is satisfied about the bona fides of the beneficiary.

ii) In special circumstances, Head Office may waived the above requirement where the Bank is satisfied about the bona fides of the successors subject to their submitting an indemnity duly executed on a non-judicial stamp paper along with two sureties acceptable to the Bank.

iii) The account of a deceased shall not be allowed to be operated on or transferred under the instructions of any Executor or Administrator or any claimant under Indemnity letter or otherwise.

STOP PAYMENT ORDER:

Instructions of stopping payment of any Cheque shall be obtained from the account holders in writing.

If such instructions are received on telephone or by telegram, a provisional note in respect thereof shall be made in the Computer pending receipt of written instructions from the account holder. Should the Cheque be presented in the meantime, the same should be returned with the objection “Drawer’s Confirmation Required”

The date and time on which those instructions are received shall be marked on the letter and initiated by an Authorized Officer.

The signature of the account holder shall be verified on the letter.

The instruction shall be passed on the Computer Officer to check the respective account to ascertain whether that particular Cheque has already been paid or not.

The Stop Payment instruction should be recorded in the Computer instantly.

The Stop Payment letters received from the parties shall be kept in the “Stop Payment File”.


[3.13]

ACCOUNT CLOSING:

To close an account, parties may be requested to send an application along with the unused leaves of the Cheque Books issued to them.

On receipt of the application, the following will be done: The signature of the account holder shall be verified. The number of unused Cheque Leaves shall be noted there on. Before the account is closed the Branch In Charge shall approve the

application after asserting the liability, if any, and incidental charges to be debited to the account.

After debiting the incidental charges to the account, the account holder shall be advised to draw the remaining balance from his account.

The “ Account Closed” stamp shall be affixed on the Account Opening Form and Specimen Signature Cards.

The application shall be posted with the account Opening Form and the Specimen Signature Cards shall be kept separately under lock and key.

An Authorized Officer shall destroy the unused Cheque leaves.

[3.14]

ACCOUNT OPENING PROCEDURE [ Flowchart]:

Account Opening Procedure with a Flow Chart: -

[ Table -8]


Applicant fills up the application in the

prescribe form

He is requested to fill up the specimen signature

sheet

An account holder needs introduction

After depositing cash, checkbook is issued

Issuance of deposit slip and the deposit must be

made in cash

The authorized officer scrutinizes the

introduction and examines the document

[3.15]

ISSUE OF CHECK BOOK

ISSUE OF FRESH CHECKBOOK:

Fresh checkbook is issued to the account holder only against requisition on the prescribed requisition slip attached with the checkbook issued earlier, after proper verification of the signature of the account holder personally or to his duly authorized representative against proper acknowledgment.

Issuance of Fresh check book: - [Table-9]

Issue of Duplicate checkbook: -

Duplicate checkbook in lieu of lost one should be issued only when an A/C holder personally approaches the bank with an application letter of indemnity in the prescribed pro-forma agreeing to indemnify the bank for the lost checkbook. Fresh checkbook in lieu of lost one should be issued after verification of the signature of the account holder from the specimen signature card and on realization of required exercise duty only with prior approval of manager of the branch. Check series number of the new checkbook should be recorded in ledger card signature card as usual. Series number of lost checkbook should be recorded in the stop payment register and caution should be exercised to guard against fraudulent payment.


REQUISITION SLIP FILLED UP PROPERLY

ALONG WITH THE CHECKBOOK NUMBER

ENTER THE NEW CHEQUE BOOK NUMBER IN THE REGISTER BOOK AGAINST THE SPECIFIC

CUSTOMER’S NAME

BANKER ISSUANCE NEW CHEQUE BOOK IF

EVERY THINK IN THE RIGHT

FORM

BANKER VERIFIES THE SLIP

[4.1]

CUSTOMER SERVICE:

Through this section customers can do D.D, T.T, PAY ORDER, I.B.C.A, & I.B.D.A.

PROCEDURES OF D.D, T.T, PAY ORDER, I.BCA, & I.B.D.A:

There are three types of transaction can do through D.D, T.T, & Pay Order as follows:

Cash – Receive cash and send pay order to another branch.

Accounts to Accounts – One can transfer his accounts to another branch through D.D, & T.T.

Clearing – If any client submits any cheque of any other bank, in this case this cheque will collect through clearing house of Bangladesh bank, they collect it in same process.

[Table-10]


CUSTOMER

SERVICE

D.D.

O.B.C.

T.T.

I.B.C.A.

PAYORDER

[4.2]

T.T. – TELEGRAPHIC TRANSFER:

These are two types. One is inward T.T & another is outward T.T. In this procedure one can transfer money from one place to another place. For this reason money carrying risk is reduced. As well as time also save.

This procedure is only applicable for in this bank & its other branches. No one can do T.T. from in this bank to another bank. Cause for any T.T. clients must have accounts in this bank.

PROCEDURE OF INWARD T.T:

This means any client of our branch want to does T.T. then he inform his branch and from that branch inform to main branch through telephone.

In this case bank must see some important things as follows: -

T.T. control number. Payee name and account number. By order. Test number. [For any amount of money this number must be needed] Amount in ward. Amount in figure.

After getting this T.T. bank check that T.T. and register it in register book according to that branch. In this case most important things is test number. Cause it maintained for client’s security. If the test number doses not match with the register book then bank inform it to that branch and bank does not pay that money. But usually this type of mistake does not happen.

After register T.T. banks make an advice, which has four parts. Bank indicates clearly the date, the amount of T.T. inward and in amount.


In this advice bank dose customer accounts debit and head office account credit and write test number.

Two copies send to that branch, one to the head office account and one is attach with voucher.

PROCEDURE OF OUTWARD T.T:

This is like reverse of inward T.T. In this case if any client wants to transfer money or account, he informs bank. Bank informs that branch where the client wants to transfer his amount. In this case, bank communicates with that branch through telephone.

Bank must inform the payee name, by order,

amount of money, advice number.

Same as inward T.T. procedure that branch makes advice against this branch.

For an example if any client of our branch wants to T.T. to Chittagong then he must fill up the form of T.T. where he writes all information as per T.T. form. Then bank check all information and charge commission, vat and telex charge.

For any amount of T.T. test number is needed.

Charge for T.T. as follows:

[Table-11]

CHARGES PERCENTAGECommission Minimum 150TK. Or 0.1% (Which one greater).

VAT 15%.Telex Charge 50TK. (Fixed)


CHARGES ON T.T.

Note: Inward & Outward T.T.’s copy enclose in appendix.

[4.3]

D.D. – DEMAND DRAFT:

Demand Draft is another way to pay money or transfer account one branch to another branch. In this case one can pay money to his client to any place of Bangladesh. In this case client does need account in this bank.

These are two types. One is in ward D.D. and another is outward D.D. In this procedure one can transfer money from one place to another place. For this reason money carrying risk is reduced. As well as time also save.

PROCEDURE OF OUTWARD D.D:

In this case transferee fill up the form where he must write the drawer name and account number and the bank name where branch office collect the money.

In D.D. there must have important information as follows:

D.D. Number. Control number. Payee name and account number. Amount in ward and amount in figure. Branch code of from and to. Test number. Signature of applicant.

For an example if any client of our branch wants to D.D. to Sylhet then he must fill up the form of D.D. where he writes all information as per D.D. form. Then bank check all information and charge commission, VAT and postage charge.


For D.D. (1 to 49,999) Tk. There is no test number is needed. Greater than 49,999 Tk. D.D. needs test number.

Charges for D.D. as follows:

[Table-12]

CHARGES PERCENTAGECommission Minimum 50Tk. Or 0.1% (Which one greater).

VAT 15%.Postage Charge 25Tk. (Fixed)

Then register D.D. in register book. Where bank writes control number, test number, amount in word and figure, payee name and the branch name where it sends.

The bank makes an advice, which has four parts. Two copies send to the payee’s branch, one copy sends to the head office and the rest one in this banks voucher.

PROCEDURE OF INWARD D.D:

When D.D. from any branch, then we register it in register book, in this case bank must see the previous serial number. If it is correct, than bank register it in register book. Where bank entry date on the D.D., D.D. number, payee name, amount, and serial number.

For an example if any D.D. comes from Rajshahi. Then bank does:

Head Office A/c (Rajshahi Br) Dr.D.D. Payable A/c Cr.


CHARGES ON D.D.

When branch gets that money from head office then bank does:

D.D. payable A/C Dr.Customer A/C Cr.

Branch office maintain a with head office which is called Head Office Account.

Note: Inward D.D.’s copy enclose in appendix.

[4.4]

PAY ORDER:

Pay orders are the safest way of making payments, as they are drawn on the bank issuing them. So there is no scope of fraudulent or cheque bouncing. A pay order is issued only within the members of the Bangladesh Bank clearing house (Dhaka Metro). It can be issued in favor of a customer holding an account, by debiting his account and crediting bills payable account. Incase of a non-customer, cash equivalent of the payment plus order charges is received in cash and held in the daily suspense account until the payment is made through clearing.

It is another facility for client to transfer his money to another place. In this he must has an account in this bank. If he has no account in this bank, he can deposit money in this bank and does Pay Order. But in this case he must need a person how knows him. He can deposit check, which is confirmed, by Bangladesh bank’s clearinghouse. If it is correct than bank does this Pay Order.

Application must fill up the Pay Order form. Where Pay Order number, Payee name, Amount in figure and in wards.

Bank take commission and VAT as follows:

[Table-13]

CHARGES TK.Commission 50TK.


CHARGES ONPAY-ORDER

VAT-15% of commission.

8TK.

Note: Pay Order form copy enclose in appendix.

REFUND OF PAY ORDER:

The following procedure should be followed for refund of pay order by cancellation: -

1. The purchase should submit a written request for refund of pay order by cancellation attaching therewith the original pay order.

2. The signature of the purchaser will have to be verified from the original application form on record.

3. Manager/ sub-manager's prior permission is to be obtained before refunding the amount of pay order cancellation.

4. Prescribed cancellation charge is to be recovered from the applicant and only the amount of the pay order less cancellation charge should be refunded. Commission recorded for issuing the pay order should not be refunded.

5. The pay order should be affixed with a stamp ''Cancelled'' under proper authentication and the authorized officer's signature of the pay order should also be cancelled with red ink but in no case should be torn. The cancelled pay order should be kept with the relevant ticket.

6. The original entries are to be reversed with proper narration.


7. Cancellation of the pay order should also be recorded in the pay order issue register.

[4.5]

I.B.C.A. & I.B.D.A: [Inter Bank Credit Advice & Inter Bank Debit Advice]Check comes from different bank. If these checks come from within Dhaka city then it goes to clearing house. If these come from outside the city then bank do OBC (Outward Bills for Collection) against that bank to collect that amount of money. After receiving the checks and crossing on that check, then put OBC sill on that checks, then put endorsement sill backside of these check and register it in the register book.Then bank makes advice against that bank where the check comes. If the bank request for OBC to any branch of its. Then bank advice to send I.B.C.A. then Bank make a liability voucher, where: - Customer Liability Dr.

Bankers Liability Cr.

After collection money bank does: -Bankers Liability Dr.Customer Liability Cr.

On the credit voucher bank write the OBC number, Date, in advice, Bank name and amount.If the bank request its any branch to collect the amount of money where it needs to collect, then bank must write the name of the bank where it will be collected. If bank collects in directly from any bank, in that case bank writes Drawn Yourself.

I.B.C.A. PROCEDURE:


When any branch send I.B.C.A. to this bank, then bank register it into register book. Where bank write the date, branch name, check number, date on the check, name of the bank, and amount. Then it is place for clearing and after realization of that check, and then bank makes a voucher. Where bank does-

Misc. A/c Dr.Branch A/c Cr.

Then Bank registers it in OBC register book.


[5.1]

CLEARING HOUSE:

ORIGIN OF BANKS’ CLEARING HOUSE:

Before introduction of the present concept of Clearing House, the representatives of the banks had to collect the proceeds of the instruments in Cash from the drawee banks, which involve risk, time and money. Mr., Arbin first thought about Clearing House to solve those problems and on the basis of his revolutionary thought Banks’ Clearing House was initially established in 1775 in London as “London Clearing”.

CLEARING HOUSE:

Clearing House is mechanisms for expeditious settlement of inter bank claims arising out of their constituent’s negotiable instruments in presence of representatives of all member banks. In Bangladesh, Clearing arrangements exist in the office of the Bangladesh Bank, at other places in the office of Sonali Bank where Bangladesh Bank has no Office.

TYPES OF CLEARING HOUSE:

There are two types of Clearing System in Bangladesh. They are: –

Inter-Branch Clearing, and Inter-Bank Clearing.


Under the system of Inter-Branch Clearing, inter-branch claims of a particular bank within the City or town area are settled through their Main Office or Local Office.

But under the system of Inter Bank Clearing, the claims among the members of the clearing house of different Banks within the area of clearing house are settled under the direct supervision and control of Bangladesh Bank and each member bank of the Clearing House has to maintain their account with Bangladesh Bank

USEFULNESS OF CLEARING HOUSE:

Clearing House is essential for adjustment of a developed Banking System. It makes easy settlement of inter-bank claims and it saves huge cash transactions and consequent danger of loss in transit and the necessity of holding by every bank of a huge cash balances for the purpose. The Clearing House is of incalculable benefit as a time, labor, risk and currency saver.

FUNCTION OF CLEARING HOUSE:

Entire function of Clearing House may be divided into 3 parts:

Operational procedure at Branch Level, Internal or Inter-Branch Clearing procedure, and Main Clearing House or Inter-Bank procedure.

[5.2]

OPERATIONAL PROCEDURE AT BRANCH LEVEL:

There are two types of clearing activities at Branch Level:

Outward Clearing, Inward Clearing.


OUTWARD CLEARING:

Under this system negotiable instruments drawn on other banks are presented in the respective bank through Clearing House for receiving payment and after receiving the proceeds of the cheque / instruments the accounts of the respective clients are credited.

INWARD CLEARING:

Under this system negotiable instruments of different banks presented in the Clearing House are received by the representative of the respective bank and bring the instruments of their branches for making payment.

Procedural activities of Outward Clearing System:

Outward Clearing System includes the following activities:

Scrutinizing the correctness of the instruments that received for clearing.

Affixing the branch crossing seal on the face of the instrument.

Affixing branch clearing seal on the deposit slips and on the face of the instruments.

Making necessary endorsement on the back of the instruments.

Encoding the necessary information of the instruments in the diskette.

Cheque Information: [Table-14]

Date :Batch No :Bank From :Bank To :Issue Date :Cheque Series :Cheque Sl.No. :

Cheque Number :Book Number :Cheque Type :Cheque A/C No. :Amount :Payee Name :Payee A/C No. :Amount in deposit slip :


Preparation of schedule bank-wise as well as branch-wise.

Preparation of Outward Clearing Register.

Sorting the instruments bank–wise and branch–wise.

Ensuring the correctness of encoding regarding the information of instruments in the diskette, (the outward Clearing Register is checked with instruments and Deposit slips and make necessary corrections in the diskette).

Stapling the instruments with the schedule.

Sending the instruments along with diskette to the Main Branch or Local Office for clearing.

Passing the entries at the time of sending clearing instruments is as under: For branch other than Main Branch / Local Office:

Debit : Head Office A/C (Main Branch)Credit : Sundry Clients A/C / other A/Cs

Activities of Internal Clearing House at Main Branch:

Receiving the diskettes containing the information of negotiable instruments along with instruments supported by its clearing schedules and necessary Inter Branch Debit Advice (IBDA) from the representatives of branches.

The diskettes received from the branches are merged and transferred to a diskette, which is to be presented in the Clearing House at Bangladesh Bank.

Preparation of Summary Schedule and House Sheet.

Sorting the instruments Bank-wise as well as Branch-wise and stapling the instruments with the schedules accordingly.

Preparation of summary Outward Clearing Register.

Passing the entries by Main Branch at the time of sending the instruments to Bangladesh Bank Clearing House are as under:


For Main Branch/ Local Office:

Debit : Suspense A/C – Clearing Receivable.Credit : Sundry Clients A/C / other A/Cs.Credit : Head Office A/C (Responding the IBDA of Branches)

[5.3]

ACTIVITIES OF INTER BANK CLEARING HOUSE AT BANGLADESH BANK:

Handing over the diskette and House sheet to the Computer Section of the Clearing House.

Handing over the bank-wise sorted instruments to the representatives of the respective Bank.

Diskettes received from different Banks are merged in the Computer Section of Clearing House and summary House Sheets of all Banks are prepared separately.

Handing over the summary House Sheet of the Bank to the respective representative of the Bank. All instruments received and delivered are

Printed in the Summary House Sheet, which is as under:

BASIC Bank Limited[Table-15]

1st Clearing, Dhaka Date: …………

No. Of Cheque

delivered

Amounts Name of the Bank

No. Of cheque Received

Amounts

Net amount receivable / Payable Tk.


Thus if the delivered amount is greater than the received amount, calculate the receivable amount which is credited to the respective bank account maintained with Bangladesh Bank. But, if the delivered amount is less that the received amount, calculate the payable amount, which is debited from the respective bank account with Bangladesh Bank.

Representatives of the banks returns to their respective Main Branch or Local Office with the instruments and diskette that received from the Clearing House.

Inward Clearing at Inter Branch Clearing House: Instruments received by a Bank from different Banks in the Clearing House are sorted branch – wise and passes the following entries in two phases:

PHASE – I

Debit : Head Office A/C (Other Branches)Debit : Client’ s A/C of Main BranchCredit : Sundry Creditor A/C – Clearing Payable.

PHASE – II

Entries passed earlier in Clearing Receivable A/C and Clearing Payable A/C are reversed and the following vouchers are to be passed for adjustment of 1st Clearing House activities:

Credit : Clearing ReceivableDebit : Clearing PayableDebit/Credit : Head Office A/C.

[Debit H.O. A/C if the Clearing Receivable > Clearing Payable or Credit H.O. A/C if Clearing Receivable is < clearing Payable]

Then the instruments of the branches supported by I.B.D.A.’s are delivered to the respective branches through their Messengers.

[5.4]


INWARD CLEARING AT BRANCH LEVEL (2 ND CLEARING HOUSE):

After having the instruments from the Messenger, the branch checks it out with their books of account and records whether they can honour all the instruments received from the Clearing House. If the branch dishonors any instrument for any reason, they have to return the instrument(s) by debiting Head Office A/C (Main Branch / Local Office) for the total value of the instruments returned unpaid and passed the following entries:

Debit: SB / CD / CC / STD A/C of the clients, Pay Order A/C / D.D. Payable A/C / Draft paid without Advice A/C etc.

Debit: Head Office A/C (Main Branch) for the amount of dishonoured instrument(s) if any.

Credit: Head Office A/C (Responding the IBDA of Main Branch).

The branch then prepares the return Memo for each returned instrument that contains instrument No., Amount and reason for its dishonor and recorded it in the Cheque Return Register. Now the instruments are enclosed with the Return Memos and are sent to the Main Branch / Local Office with Inter Branch Debit Advice (IBDA).

After receiving the returned instruments from the branches, instruments are encoded in the diskette at Main Branch / Local Office and perform the following activities:

Preparation of schedule,

Preparation of outward clearing return register,

Sorting the instrument bank-wise as well as branch-wise,

Stapling the instrument(s) with the schedule.

The following entries are then passed at Main Branch:

Debit : Clearing PayableCredit : Head Office A/C (Responding IBDA’s of branches).

Then the representative of the bank takes back all the returned unpaid instruments of branches including themselves along with the diskette to the Clearing House


and deliver the instruments to the representatives of the respective Banks. Similarly, they also receive back the instruments returned unpaid by other Banks. Bank account with Bangladesh bank is similarly debited or Credited for the net amount payable or receivable.

The unpaid instruments received in the Clearing House are sorted branch-wise and the following entries at Main branch are passed in two phases:

PHASE – I

Debit : Sundry Clients A/Cs (Credited earlier)Debit : Head Office (Branches)Credit : Clearing Receivable A/C

PHASE – II

The entries passed earlier in Clearing Receivable A/C and Clearing Payable A/C are reversed and the following vouchers are to be passed for adjustment of 2nd

Clearing House:

Debit : Clearing Receivable A/CCredit : Clearing Payable A/CDebit/Credit : Head Office A/C (Head Office)

[Debit Entry if Payable amount > Receivable amount. Credit Entry if Payable amount < Receivable amount]

Instruments returned back from the Clearing House are then sent back to the branches with Debit Advice (IBDA) for the value involved with the unpaid instrument(s) and the following entries are passed by the branches for their returned instrument(s):

Debit : Sundry Clients’ A/C (Credited earlier).Credit : Head Office A/C (Responding the IBDA of Main Branch

[5.5]

PRECAUTIONARY MEASURES:


While making payment of the instruments received the clearing House the following precautionary measures should be taken:

If the crossing seal of the collecting bank on the face of the instrument is not affixed the instrument should not be honored.

If the clearing seal with present date is not affixed on the face of the instrument, the instrument should be returned unpaid.

Date on the face of the instrument must be checked carefully. If the cheque is post-dated or anti-dated the cheque should be returned unpaid.

If the cheque does not bear the signature of the drawer on the face of the cheque, the cheque must be returned.

If the drawer’s signature of the cheque differs with the Specimen Signature Card, the cheque should not be honoured.

If the amount in word differs with figures the instrument should not be honored.

If the instrument does not bear the endorsement on the back the instrument, the instrument should be returned.

If the drawer stops the instrument, the instrument should be returned unpaid.

If the instrument is mutilated and the collecting bank does not confirm the same, the instrument should be returned.

If the alteration in date / figure / words is not confirmed by the drawer the instrument should not be honored.

If the collecting bank’s discharge is irregular, the instrument should be dishonored.


[6.1]

DEFINITION OF FOREIGN EXCHANGE:

Foreign exchange is a process, which is converted one national currency into another and transferred money from one country to another countries. According To MR H. E, EVUTT. Foreign exchange is that section of economic science which deals with means and method by which right to wealth in one country’s currency are covered into rights to wealth in terms of another country’s currency. It involved the investigation of the method, which exchanges the currency of one country for that of another, the causes which rented such exchange necessary the forms, which exchange may take and the foreign exchanges are affected.

FOREIGN TRADE AND FOREIGN EXCHANGE: International trade refers to trade between the residents of two different countries. Each country functions a sovereign state with its set of regulations and currency. The difference between the National Exporters and Importers presence certain peculiar problems in their conduct of international trade and settlement of the transaction arising there from. Important among such problems is-

Different countries have different monetary units. Restrictions imposed by countries on import and export of goods. Restrictions imposed by nations on payment form and into their countries,

and Differences in legal practices in different countries.


Foreign exchange means foreign currency and includes: -

All deposits, credits and balances payable in may foreign currency and any drafts, traveler’s checkups, letters of credit and bills of exchange, expressed or drawn in Indian currency but payable in any foreign currency.

Any instrument payable, at the option of the draw or holder thereof or any other party there to, Either in Indian currency or in foreign currency or partly in one and partly in the other. Thus, foreign exchange includes foreign currency, balances kept abroad and instruments payable in foreign currency.

NECESSITIES OF FOREIGN TRADE:

Diversity in Natural Resources: Trade may take place because of the diversity in productive

possibilities among countries. For example one country may be blessed with a supply of petroleum, while another may have a large amount of fertile land.

Differences in Tastes: A second reason for trade lies in preference, Even if the

conditions of production were identical in all regions, countries might engage in trade if their tastes for goods were different.

Differences in Costs:

The most important reason for trade is differences some counties in production costs. For example, manufacturing processes enjoys economies of scale; that is they tend to have lower average costs of productions as the volume of output expands.

PRINCIPLES OF FOREIGN EXCHANGE: The following principles are involved in foreign exchange:

The entire systemwww.AssignmentPoint.com 82

The media used The monetary unit

THE PRINCIPLE OF COMPARATIVE ADVANTAGE: It is only common sense that countries will produce and export goods for which they are uniquely qualified. But there is a deeper principle underlying all trade. The principal of comparative holds that a country can benefit from trade even if it is absolutely more efficient (or absolutely lees efficient) then other countries in the production of every good.

COMPARATIVE ADVANTAGE:

The Principle of comparative advantage holds that each country will benefit if it specializes in the production and export of those goods that it can produce at relatively low cost. Conversely, each country will benefit if it imports those goods that it produces at relatively high cost. This simple principal provides the unshakeable basis for international trade.

No country is self-sufficient. One country has to depend on other countries for various reasons. One country may have a sound structure in one sector while its other sectors are not so well structured. As a result naturally it has to depend on another country to minimize these lacking of those sectors. On the other hand, according to Ricardo's comparative analysis theory. If a country is good at various sectors then it will continue its operations in its best sector, while for the other sectors it will depend on others. When countries concentrate on their areas of comparative advantage under free trade, each country is better off. The underlying assumption here is that countries can concentrate properly in a specified area, as a result efficiency in production will increase, product quality will increase while the price be lower. Countries will be able to market their products at a lower price. The surplus production will be sold outside of the country which known as export. By doing so countries will earn foreign currency. Again by spending those currencies they will buy the required goods from other countries for them that are known as import. The whole transaction is known as Foreign Trade and through the exchange of foreign currency the transaction ends up. Foreign trade is divided into import, export and remittance

FUNCTION OF FOREIGN EXCHANGE: www.AssignmentPoint.com 83

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: -

Rate of exchange.

How the rate of exchange works.

Forward and sport rate.

Methods of quoting exchange rate.

Premium and discount.

Risk of exchange rate.

Causes of exchange rate.

Exchange control.

Convertibility.

Exchange position.

Intervention money.

Foreign exchange transaction.

Foreign exchange trading.

Export and import letter of credit.

Non-commercial letter of credit.

Financing of foreign trade.

Nature and function of foreign exchange market.

Rules and regulation used in foreign trade.

Exchange Arithmetic.

[6.3]

FOREIGN EXCHANGE AND FOREIGN TRADE OPERATIONS:

AUTHORIZED DEALER OR AD HOLDER BANK:


As per section 2 of Foreign Exchange Regulation Act 1947, Authorized Dealers means a person, for the time being authorized under section 3 to deal in Foreign exchange. In other words Authorized Dealers means a Bank, Authorized by Bangladesh Bank to deal in Foreign under FER Act 1947.

LICENSE FOR AUTHORIZED DEALER:

To get a License for Authorized Dealer, a Bank will apply the General Manager, Foreign Exchange Policy Department of Bangladesh Bank, Head Office, Dhaka complying following conditions-

The Bank must have adequate manpower trained in Foreign Exchange.

Prospect to attract reasonable volume of Foreign exchange business in the desire location.

The Bank meticulously complies with the instruction of Bangladesh Bank.

The Bank will commit to deal in Foreign exchange with in the limit and will submit periodical returns as instructed by Bangladesh Bank.

FUNCTIONS OF AUTHORIZED DEALERS:

Authorized dealer can handle all kinds of Foreign exchange instruction as per FER Act 1947 under the instruction of Bangladesh Bank. Following are the main function of an Authorized Dealer:

Exchange of Foreign Currencies.

To make arrangement with Foreign Correspondent.

Buying & Selling Foreign Currencies

Handling inward & outward Remittance.

Opening of L/C Settlement of payment.


Investment in Foreign Trade.

Opening and Maintenance of Accounts with foreign Banks under intimation of Bangladesh Bank.

Export documents handling.

MODES OF THE FOREIGN EXCHANGE: Various services regarding foreign exchange provided by BASIC Bank can be segregated into three broad categories:

Export Import Foreign Remittance Issuing T/C & Endorsement of Dollar

[6.4]

EXPORTS:

LEGAL REQUIREMENTS:

Although payment aspects of exports are Bangladesh banks concern, the export policy order announced by the ministry of commerce controls physical aspects. Bangladesh bank has set ort elaborate procedure and laid down detailed rules and regulations concerning export and export payments. All exports, to which the requirement of declaration applies, must be declared on the exp. from. The branch should before certifying any export form, consider and take notice of the following:

I. The intended exporters shall have valid export registration certificate.

II. Payment for goods exported from Bangladesh should be

received through the branch in freely convertible foreign currency or in Taka from a nonresident Taka account of a bank branch or correspondent abroad.

III. Commission, brokerage and other trade charge are admissible only up to a maximum of 5% of the value of goods. The charge beyond 5% may be admissible subject to prior approval of the Bangladesh bank.


IV. In order to avoid any loss of foreign exchange to the country, the branch should see that

Arrangement has been made for realization of export proceeds within prescribed period of 04 months.

Arrangements have been made for receipt of title to goods like bill of Lading, Always Bill etc. by the branch in shipment of goods.

The Exp form is signed either by the exporter or one holding valid legal power of attorney from exporter an the terms of the power of attorney are such that both the exporter and the attorney may be held responsible jointly and severally for realization of export proceeds.

Bonfires of the buyers/ consignees abroad and their credentials.

V. The branch and its officials certifying the export forms as

well as the exporter render themselves liable to punitive action under the FER Act for delay in repatriation or non-realization of export proceeds.

VI. In respect of export of goods by land route or by sea. The bill of leading. Railway receipts and other documents of title to cargo should be drawn only to the order of Mercantile Bank limited.

EXCEPTIONS:

In case of exports of goods against advance payment, the Bill of Lading, Airway Bill and other transport documents may be endorse by the branch in favor of foreign importers of the branch may allow the carrier company to draw the coc documents in favor of the foreign importers abroad by the branch.

Export of fresh fish, vegetables, fruits, poultry and other goods of perishable nature is also exempted from this directed.

Type ‘A’ industries in the EPZ may also draw the documents of title to cargo in favor of the consignee/LC opening ban.


The branch to whose order the relative railway receipt, bills of lading etc. are drawn shall endorsed the same to the order of their foreign correspondents but in no case they shall make any blank endorsement or endorsed it to the order of the consignee unless they have obtained specific or general approval of Bangladesh bank.

IMPORT LEGAL REQUIREMENTS:

Import of merchandise into in Bangladesh is related by the import policy order (IPO) announced by the ministry of commerce and / or notifications/ public notices issued by the ministry of commerce and /or C.C.I & E and Bangladesh bank. Before entering into an import transaction country’s legal and economic framework to be considered. These include:

Restrictive governmental policies

Exchange regulations

Tariffs and transaction

Reporting to the controlling authorities.

It is important to have a general understanding of some of the basic legal bad economic terminology internationally, within which such trade takes places. Following ICC publications framework of such terminology and rules governing international trade.

UCPDC, ICCPUB-500

URR, ICC PUB-525

URC, ICC PUB-522

Inciters 2000 ICC PUB-460 (revised)

[6.5]


L/C (LETTER OF CREDIT):

DEFINITION OF L/C:

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.

A letter of credit is an instrument issued by a bank to a customer placing at the letters disposal such agreed sums in foreign currency as stipulated. An importer is a country request his bank to open a credit in foreign currency in favor of his exporter at a bank in the letters country, the letter of credit is issued against payment of amount by the importer or against satisfactory security. The L/C authorized the exporter to draw a draft under is terms and sell to a specified bank in his country. He has to hand over to the bank, will the bill of exchange, shipping documents and such other papers as may be agree upon between the exporter and the importer, the exporter is assured of his payment because of the credit while the importer is protected because documents in respect of export of goods have to be delivered by the exporter to the paying bank before the payment is made.

FORM OF LETTER CREDIT:

A letter of credit may be two forms. These as below:

1. Revocable letter of credit.2. Irrevocable letter of credit.

Revocable L/C:

If any letter or credit can be amendment or change of any clause on 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 bank to make payment. Revocation is possible only until the issuing bank or its correspondent has honored the documents. Thus a revocable credit does not usually provide adequate security for the beneficiary.

Irrevocable L/C:

If any letter of credit cannot be changed or amendment without the consent of the importer and expediter is known as Irrevocable letter of credit.


An irrevocable credit constitution a firm undertaking by the issuing bank to make payment. It the fore, gives the beneficiary a high degree of assurance the he will pay to his goods or services provide he complies with terms of the credit.

TYPES OF LETTER OF CREDIT:

Letter of credit is classified into various types according to the method of settlement employed. All credits must clearly indicate in major categories.

Sign payment credit Deferred payment credit Acceptance credit Negotiation credit Red close credit Revolving credit Stand by credit

DOCUMENTARY REQUIREMENTS FOR OPENING L/C:

Import shall submit following documents for opening L/C: Valid import registration certificate (commercial/industrial) Tax identification number certificate Vat registration certificate Membership certificate of a recognized trade association as per IPO A declaration, in triplicate, that the importer has paid income-tax or

submitted income tax returns for the preceding year. Performa Invoice or indent duly accepted by the importer. Insurance cover note with money paid receipt covering value goods to the

imported plus 10 percent above. L/C application form (MF-fx 13) duly signed by the importer. Letter of credit authorization form (LCAF) commercial or industrial as the

case may be, duly signed by the importer and incorporating New ITC number of at least 6 digits under the Harmonized systems as given in the import trade control schedule 1998.

IMP form duly signed by the importer.

[6.6]

PRECAUTIONARY STEPS:

The Branch must ensure that they deal only with know customers having a place of business in Bangladesh and can be traced easily should any occasion for this purpose.


The Branch shall assess the financial standing and credibility of the customers.

[The Branch should also obtain confident report on the exporter in all cases where the amount of L/C exceeds Tk. 200000/- P/Invoice and Tk. 500000/-against indents.]

The Branch shall verify price so as to ascertain competitiveness of the commodities to be imported.

The Branch shall verify signature of the importer on L/C Application Forms (LCAF & IMP Form.

The Branch will not open L/Cs for import of goods through the customs stations/routes like Sonamashjid, Hili, Burimary, Birol, etc. unless the importers pay 100% margin or prior Head Office approval is obtained.

SANCTIONING DOCUMENTATION & LEGAL FORMALITIES:

Approval of Head Office or Branch Manager (where L/C are to be opened under his delegation) to be obtained before opening L/C(s).

Security documentation to be completed as per sanction/approval terms prior opening L/C change form such as demand promissory note, letter of undertaking, letter of debit authority and letter of guarantee (where applicable) to be obtained with due stamps as per prevailing stamps act.

[6.7]

OPENING L/C:

The branch may now proceeds for opening the credit in behalf of the own customers who maintain accounts with them except government organizations. Necessary entries to be given in the l/c. opening register (MB/FX-03) by allocating an l/c number and following vouchers are to be passed for completion of opening transactions at BC selling rate (spot).

Creation of L/C liability (register MBFX-12)

Dr. customers liability on L/C cashwww.AssignmentPoint.com 91

Cr. Bankers liability on L/C cash(Amount to be rounded off to the nearest Taka)

MARGIN/COMMISSION AND CHARGES:

DR customers A/C: margin commission + FFC+POSTAL/ TELEX +STAMP+MISC.

CR. Sundry deposit a/c: margin on L/C (cash).

CR. Income A/C: postal/recoveries.

CR. Income A/C: miscellaneous earnings (handling charge, stationary charges, etc.)

CR. Sundry A/C: miscellaneous earnings (handling charge, stationary charges, etc.)

CR. Sundry Deposit a/c: F.C.C.

CR. Other Asset A/C: Stamp in hand.

TIME LIMIT FOR OPENING OF L/C:LC’s shall be opened with in 150 days from the date of issuance of LCAF or from the date of registration of LCAF with Bangladesh bank.

[6.8]

BACK-TO-BACK L/C s:

The branch may open back to back import L/C s against export L/C s received by export oriented industrial units opening under the bonded warehouse systems, subject to observance of domestic value addition requirement prescribed by the NBR/Ministry of commerce from time to time.

The following instructions should be complied with while opening back import L/C s :

The unit requesting for the facility should possess valid IRC, ERC and Valid bonded warehouse license


The branch shall hold the Muster Export L/C affixing banks line stamp thereon and be kept in safe for security purpose.

The master export L/C should have validity period adequate to cover the time needed for importation of inputs, manufacture of merchandise, and shipment to consignee.

The back-to-back L/C value shall not exceed the admissible percentage of net FOB value of the relative mater export L/C (as per prescribed value addition requirement). For computation of net FOB value of a master exports L/C, the freight charge, insurance cost and commission if payable by the exporter shall be deducted from the L/C value. If the freight element is shown separately a freight certificate from the shipping company or agent should be asked for.

The back to back import L/C shall be opened on up the 180 days issuance (DA) basis except in cases of those opened against export development fund administered by Bangladesh bank in which case the back to back L/C will be opened on sight (DP) basis.

Interest for the issuance period shall not exceed LIBOR or the equivalent interest rate in the currency of settlement.

All amendments of the master export L/C should be noted down carefully to rule out chances of excess obligation under the back-to-back import L/C.

Back to back L/C can either be local or foreign. Inland BTB L/C s denominated in foreign exchange may be opened in favor of local supplier manufacturer of inputs against master export l/c and BTB L/CS may in turn be opened for import of inputs against inland BTB L/C in favor of local supplier/manufacturer under bonded warehouse system up to value limits applicable as per prescribed value addition requirement.

CHECKING OF BACK TO BACK L/C DOCUMENTS:


The relevant documents of Back-to-Back L/C send by negotiating bank will have to be properly checked.

BILLS OF REGISTER: After the arrival of documents related with Back to Back L/C, an entry should have to be given in the Bills of Registers are listed below:

Date received B/E no. L/C no. L/A no. Received from Drawn on Amount (Foreign currency / Rate) Taka equivalent Draft (Tenor- due date) No. Of documents (Draft-invoice-B/Ls--Others) Steamer Date goods cleared Special instruction from sender Remarks-further recoveries etc. Date realized Remarks- Disposal Initials Remarks

ACCEPTANCE OF BACK TO BACK L/C:

After receiving of the documents from the negotiating the issuing Bank send an acceptance of B/B L/C specifying the date when they will pay the amount of the related L/C.

NEGOTIATION OF EXPORT DOCUMENTS:

If the documents are found strictly as per the terms of L/C. i.e. if the documents are free from discrepancy or if the discrepancies are covered by indemnity of the part, Bank may negotiate the export documents.

EITHER PURCHASE OR SENDING FOR COLLECTION EXPORT DOCUMENTS:


If the documents are discrepant, then the Bank will not purchase them; they will send it for collection. On the other hand documents are as per the terms of the L/C, and if the importer is not interested to wait a long period for the fund, then the issuing bank make arrangement for purchasing the documents at a discount.

[Chart-5]

BACK TO BACK L/C:


ImporterISSUING BANK

Advising Bank

ISSUING BANK

Exporter

Becomes an Importer.

L/C

B/BL/C

Exporter


Diagram: Issuing L/C and B/B L/C

[7.1]

The Bank’s strength and competitive capabilities can be shown by the SWOT

analysis. The SWOT analysis is grounded in the basic principle that strategy-

making efforts must aim at producing a good fit between a company’s resource

capability and its external situation. The SWOT analysis of BASIC Bank Limited

is as follows:

S- Strength

i) Reputation of the Bank: Since the inauguration the bank has managed

their activity with their own images to serve their customers. They have

provided services successfully and have achieved goodwill among the

Shariah Based Banks. The Bank is opening with its efficiency and

integrity.

ii) Sponsor: BASIC bank has sponsors from various sectors of

Bangladesh. The most successful entrepreneurs from various sectors

started this company. As a result there was a combination of different www.AssignmentPoint.com 97

SWOT ANALYSIS:

thoughts and skills in the management of the bank, which is very much

essential for success in today’s competitive market.

iii) Top Management: BASIC bank has a very competent and experienced

top Management. The current Managing Director Mr. A.H. Iqbal

Hossain has banking experience for a long time period. He had the

experience of marketing and customer relationship management in his

long career. This has helped the bank to achieve its goal.

iv) Shariah Based Banking: BASIC Bank is operating based on Islamic

Shariah. As Bangladesh is a Muslim country, the Shariah banking has

been able to attract customers and achieved a great success in the

private banking sector.

v) Branches: BASIC bank is operating their business all over the country

with 30 branches and still planning to expand their business by opening

new branches in the country. It has strengthened the distribution of the

bank’s services.

vi) Government Bank: The 100% Share of BASIC Bank is Government.

So it is a very Good Strength for any Company.

W- Weakness:

i) Promotion: The bank does not any formal promotional activity. They

do not give any sort of advertisement or do not have any marketing

activity. They do not even too many billboards. This is why they are far

behind the competitive in the private banking. Even some people do not

know that BASIC Bank is operated according to Shariah.


ii) Remuneration: The remuneration of the officers of BASIC bank is

lower compared to other private banks. Even the internship students are

paid nothing. This is why high skilled human resources are discouraged

to join here.

iii) Online Banking: At Present Every bank try to converted them to the

Online banking. BASIC bank has no Online Banking System. So it is a

great weakness for the Bank. I hope that BASIC Bank also introduce the

Online banking System & serve his Client very Smoothly.

iv) Centralization Decision Making: The decision making of the bank is

too many centralized. No decision is made without the authorization of

the head office. Sometime some quick decision is needed to be taken,

but from the branch, no one can make decision. It is one of the major

draws back of the bank.

v) Lacings of some officer: Some of the officer of the BASIC Bank LTD

are not sincere their work. They do not come regularly; if they come

they do not work properly. They just talk & pass the time. Some of the

officers are not suitable for his position.

O- Opportunity:

i) Consumer Banking: BASIC bank is operating corporate banking. In

our country there is a huge opportunity of consumer banking. So BASIC

bank can reposition their branding and introduce consumer banking with

corporate banking.

ii) ATM: The banking sector of the country is becoming modernized in the

country. People like to draw money any time from anywhere. So ATM www.AssignmentPoint.com 99

card is getting popularized in the country. BASIC bank can introduce

ATM system in their bank. More Over, Shariah Based banks are not

providing ATM cards. So those who want ATM card but do not like

interest, they can be attracted by ATM card issued by a Shariah Based

Bank.

iii) More Branches: The economy of the country is expanding. The

business outside Dhaka is also expanding. As a result, the demand for

banking service is increasing day by day. So BASIC bank can open

more banks in the country and can expand their business.

iv) Shariah Based Banking: In our country people are religious. Most of

the people are Muslim. They are becoming educated and know the bad

impact of interest. So they are moving towards Shariah based banking.

BASIC bank takes this opportunity.

v) Government Bank: BASIC Bank is Govt. Bank. So it has a great

opportunity to expand itself.

T- Threat

i) Competitions: In Bangladesh, after economic reform, more private

bank has started their operation in the country. They are coming with

different types of attracting products. This has increased the completion

among the private banks.

ii) Devaluation of local Currency: The value of local currency is

decreasing. So investment in local banking is decreasing. More over the

inflation is increasing in the country. So people want to save money but


in many cases they cannot. As a result, the banks are getting less

deposit.

iii) Bank Default: There is a tendency of the people of the country to

become bankrupt. Few days ago Oriental bank has a great suffering. In

our country, the receivable from top 20 bankrupt companies stood 88.36

billion. This is discouraging banks to make new investment.

[7.2]

Basic Bank is one of the top class banks in our country. When I was placed at Motijheel Brach I didn’t have serious problems regarding the operation, customer service, management, human resource department or anything else. In spite of this I found few problems as follows:

The time to reach Permanent Position from probation period takes almost two years, which is a very long time process as I considered and it should be less than two year.

Some Officers of the bank are not self-motivated. They should be self-motivated by training.

Basic Bank has only 27 branches, which are not so satisfactory to serve the country widely. It requires more branches throughout the country.

Some banking operations are still operated in manual basis rather than computer system that take more time. Computer should be used in all their activities.

DD, TT takes more time to operate. It should minimize time.


RECOMMENDATION:

We require some valuable information for the purpose of making Internship report but these kinds of information is not available. We strongly suggest helping us in this matter.

[7.3]

The BASIC Bank Limited has been trying to operate its business successfully in Bangladesh since 1994. Basic Bank has already developed goodwill among its clientele by offering its excellent services through General banking, Credit division and Foreign Exchange divisions. This success has resulted from the dedication, commitment and dynamic leadership among its management over the periods. The working atmosphere of the BASIC Bank Limited is very simulating. During the short span of time of its operation, the bank has been successfully to the position itself as a progressive and dynamic financial institution in the country due to the following reasons:

Although there was huge loss in the establishment period of the bank due to huge sunk cost and operating cost, from the second year the bank was gradually able to reduce cost proportionately through an effective management.

Interest expanses of the bank are reducing proportionately compared to interest income due to huge accumulation deposits as a result of increasing number of depositors. The number of depositors and the amount of deposits lie in the upward trend due to offering attractive services to the customers.

Other income of the bank is also going up every year due to the increase of commission, exchange and brokerage fees in the foreign exchange section. Foreign exchange of the bank is operating effectively.


CONCLUSION:

Operating expenses of the bank increasing every year compared to the growth in deposits.

All this together with its adoption of modern trend of Banking system has enable it to turn out as potential profiteering financial Institution. My course of internship in this Bank has been very valuable.
