General Banking and Foreign Exchange Activities Of UTTARA Bank Limited

Southeast University
Name of report: General Banking and Foreign Exchange Activities
Submitted to:

MD.Ishtiaque arif Lecturer of south east university

Submitted By: Mazharul Islam-20040100000130
Major: Marketing

Batch: 6th

Letter of transmittal
I am, Mazharul Islam that the presented report of Internship titled General Banking and Foreign Exchange Activities of Uttara Bank Limited is uniquely prepared by me after the completion of two months work in Uttara Bank Limited from Malibagh Branch.

I also confirm that this is only prepared to my academic requirement not for any other purpose. It might not be used with the interest of opposite party of the corporation.

.. MAZHARUL ISLAM ID: 20040100000130 BBA Major in Marketing

INTERNSHIP REPORT ON
General Banking And Foreign Exchange Activities Of UTTARA Bank Limited is prepared by MAZHARUL ISLAM 2004010000130 empted in term of quality.

.. Signature Supervisor

. Signature Committee Chairman

Acknowledgement
The report on General Banking And Foreign Exchange Activities Of

UTTARA Bank ltd" is designed on the basis of practical experience regarding the banking activities especially general banking of Uttara Bank Ltd. at Malibagh Branch. It becomes possible for me to make the report more effective and authentic for the constructive assistance of many individuals of the bank and of the different organizations. I like to express my profound thanks to our honorable supervising teacher LECTURER,Md Istique Arif on and guidance help me to write this report. I am also grateful to Mrs. Marzina Khatun AGM of the branch, whose active support inspired and helped me to work at the branch and to gather practical knowledge. I also express my gratitude to the officers and staffs for providing information and guidelines at the time of practical works in the bank. I would like to express thanks to all my friends, teachers and staffs, faculty of School of Business Studies, Southeast University for their cooperation and assistance.

Acronym

UBL
A/C BB L/C CCI & E CFR CIB CC C&F CRF CIF DD DP Note EPB ERC FC CCI&E ERC FDD FDR

Uttara Bank Limited Account Back to back Letter of Credit Chief Controller of Import & Export Cost & Freight Credit Information Bureau Cash Credit Clearing & Forwarding Clean Report Findings Cost Insurance & Freight Demand Draft Demand Promissory Note Export Promotion Bureau Export Registration Certificate Foreign Currency Chief Controller of Import and Export. Export Registration Certificate. Foreign Demand Draft Fixed Deposit Receipt

FOB HS Code IBC IBCA IBDA IMP IBCT IRC L/C LCAF OBC PO PAD SWIFT STD TC TIN TR TT

Free On Board Harmonized system of coding Inward Bills for Collection Inter Branch Credit Advice Inter Branch Debit Advice Import Form Inter Branch Credit Transaction Import Registration Certificate Letter of credit. Letter of Credit Authorization Form Outward Bills for Collection Payment Order Payment Against Document Society for Worldwide Inter Bank Financial Short Term Deposit Travelers Cheque Tax Identification Number Truck Receipt Telegraphic Transfer

Executive Summery
It is very much important to coincide the academic knowledge with the practical one. Keeping this view in mind, Institute of Business Studies, Southeast University, makes proper arrangements of practical orientations (internship) each year for the students of BBA which is a part of BBA program. This is because the academic knowledge is not sufficient enough to match with the real life situations. Dhaka Branch for my internship program to have a practical working experience and have an understanding of the real life with a closer look. The prime objective of internship program is to introduce the learners with the practical organizational environment. So that they can turn themselves for the jobs in future and can get an opportunity to reflect their theoretical learning with real life situation. In my internship with Uttara Bank Ltd. I worked with the activities of branch banking especially general banking and their functioning and accounting procedures. Bank is a financial organization, which is the lifeblood of the economy. This has the major contributor to the development process of a country. Banks keep the wheel of the economy to move forward and play a vital role for the mobilization of idle fund belongs to the people. These tasks performed by the bank in three sections, which are general banking services, loans and advances and foreign exchange transactions. Uttara Bank Ltd. provides all kinds of banking services like other banks. The major service area are receipt and payment of cash, clearing and remittance of bills, giving loans and advances, accounts opening, inward and outward mails, foreign exchange transactions etc. Uttara Bank Ltd. Malibagh Branch provides L/C facilities to its importers and exporters through establishment of correspondent relations and Nostrum Accounts with leading banks all over the world. It also performs effectively Finance and Loans, Export Import

Trade Finance, Corporate Finance, Industrial Finance, Lease Finance, Commercial Loans, Project Finance, Retail Loans, Mortgage Loans, Loan against Share and Securities etc. Uttara Bank Ltd Malibagh branch also provides the general banking service to the customer such as different categories of savings schemes, foreign exchange transactions, current account for business personnel etc. at the time of my work at the branch I understood the gap between the practical and theoretical knowledge. I tried my best to make the report fruitful and my all efforts will be valuable if any one bets any sort of benefit from my report. All sort mistakes or errors or omissions made in the report will go to my side and I am wholly responsible for it.

Table of Contents:Page No CHAPTER-ONE

Introduction
1.1 History of the organization 1.2 Function of the organization 1.3 Role of the organization in the eco. dev. Of Bangladesh

1 1 2 3

3 1.4 Organ gram of the Organization 3 1.4.1 UTTARA BANK HEAD OFFICE. 1.4.2 Different Wings of UBL 1.5 Hierarchy of Malibagh Branch 1.6 Branches all over in Bangladesh. 3

CHAPTER- TWO

Research Methodology
4 2.1 Rational of the study 5 2.2 Objective of the Study 6 2.3 Data collection procedures 6 2.4 Limitation of the study 13 2.5 Hierarchy of Malibagh branch

CHAPTER-THREE 15

Findings and Analysis

15 3.1 Sources and uses of fund 15 3.2 Capital 15 3.3 Capital structure 16 3.4 Deposit 17 3.5 Balance sheet as at 31 December 2006 19 3.6 Highlights on the overall activities of the bank for the year 2003 to 2006 20 3.7 Financial Highlights for the year 2003 to 2006 20 3.7.1 Total capital 20 3.7.2 Total asset 21 3.7.3 Net income per share 21 3.7.4 Earning per share 21 3.7.5 Paid up capital

CHAPTER FOUR
22 4.1. General Banking 22 4.1.1 Account opening department 23 4.1.1.1 Accepting of deposit

26 4.1.1.2 Opening of account 28 4.1.1.3 Issue of checquebook 29 4.1.1.4 Issue of duplicate chequebook 29 4.1.1.5 Closing of account 30 4.1.1.6 Account transfer 30 4.1.2 Local remittance department 32 4.1.3 Cash department 33 4.1.4 Clearing department 34 4.1.5 Collection department 38 4.1.6 Loans and advance PART-FIVE 40 Foreign Exchange 40 5.1 Position of UBL in foreign exchange business 41 5.2 Foreign exchange transaction 41 5.2.1 Foreign remittance 42 5.2.1.1 Outward and inward remittance 42 5.2.1.2 Spot and forward transaction 42 5.2.1.3 Spot and forward rate 42 5.2.2. Import

43 5.2.2.1 Latter of credit 49 5.2.2.2 Parties to the L/C 50 5.2.3 Export 52 5.3 SWOT analysis CHAPTER-SIX 54

6. Conclusions and suggestions

54 6.1 Conclusion 54 6.2Recommendation 6.3 Bibliography 55

Introduction
1.1 History of the organization:
Bank system was practiced in the Indian subcontinent from the ancient period. In Indian subcontinent merchants, goldsmith moneylenders were the primary bankers. During the Moghal period banking and credit business was enchanted rapidly. Then the agency house ofJagth Seth was similar to the merchant house of Lombardy Street. In 1700 AD "Hindustan Bank" was established as the first joint stock bank. In 1784 "Bengal Bank" and in 1786 General bank of India was lunched. Then both the bank absolved respectively in 1793 and 1832. During the early period of nineteenth century in 1806 "Bank of Bengal" in 1840 "Bank of Bombay" and in 1843 "Bank of Madras" was established. These Banks were called Presidency Bank. Then in 1920 these three banks merged to "Imperial Bank of India". In 1947 after the separation bank business in our country faced a severe disaster as non Muslim Bankers left to India. Then "Reserve bank of India" acted as the "Central Bank of Pakistan" in 1948 to re-build the Bank Business "State Bank of Pakistan" was established as central bank of Pakistan. In 1971 Bangladesh became independent. After liberation "Bangladesh Bank" was automated with the assets and liabilities of former "State Bank of Pakistan". It is the central bank of Bangladesh. During Pakistan period in our country there were 1090 branches of 12 commercial

banks. Three foreign banks were also active with 14 branch offices. Before liberation 80% of banking activities of our country was controlled by Pakistan. Consequently Bangladesh traders and industrialists didn't get notable help from the .Commercial Banks. After liberation reformed the destroyed economy on 26th March 1972 the banking sector of Bangladesh was nationalized. After nationalization government of Bangladesh changed the entire bank to six banks which are Sonali Bank, Rupali Bank, Janata bank, Agrani Bank, Pubali Bank & Uttara bank. But the last two banks have been handed over two private sectors. From 1983 lot of private banks are establish and they playing their role in development of trade and commerce of Bangladesh as well as in the development of economy.

Uttara Bank-one of the largest and oldest private-sector commercial bank in Bangladesh, with years of experience. Adaptation of modern technology both in terms of equipment and banking practice ensures efficient service to clients. 203 branches at home and 200 affiliates worldwide create efficent networking and reach capability. Uttara is a bank that serves both clients and country. The bank has more than 600 foreign correspondent World wide. The total number of employees nearly 3000. The board of director consists of 14 members.

1.2 Function of the organization:

1. General Banking 1.1 Account opening department 1.1.1 Accepting of deposit 1.1.1.1 Fixed deposit account. 1.1.1.2 time deposit account. 1.1.1.3 demant deposite account. 1.1.1.3.1 current account. 1.1.1.3.2 saving account. 1.1.1.3.3 Short notice term deposite. 1.1.2 Opening of account

1.1.3 Issue of checquebook 1.1.4 Issue of duplicate chequebook 1.1.5 Closing of account 1.1.6 Account transfer 1.2 Local remittance department 4.1.3 Cash department 4.1.4 Clearing department 4.1.5 Collection department 4.1.6 Loans and advance

1.3 Role of the organization in the eco. dev. Of Bangladesh:

Overall economic performance points to an improvement in FY2004 with the possibility of higher GDP growth. Improved economic performance is fueled by strong food crop harvests, export-oriented manufacturing expansion and steady growth in service sector. Rising trend in inflation has been contained. The balance of payments has further improved, due largely to a strong remittance growth and a resulting higher current account surplus. This has resulted in a further build-up in the foreign exchange reserves. Despite a shortfall in revenue collections, budget deficit is likely to be lower than projected, because of underperformance in development spending. Here is the brief discussions of some of the major factors that have good impact in the overall economy as well as having relevance with our project:

Industry: The manufacturing sector sharply rebounded as indicated by

the turnaround in manufacturing exports, imports of industrial raw materials, and expansion of industrial credit. Based on the quantum index of small-scale manufacturing industries compiled by the Bangladesh bureau of statistics (bbs), the output of small-scale industry has performed relatively well, with output increasing by 5.4% during the first half of fy2004. Manufacturing recovery is, however, not reflected in the quantum index of large and medium scale industrial products. This index for the first seven months of fy2004 shows only 2.1% growth over the same period of the previous year. The quantum index of large and medium scale industrial products would need revision because of its limited coverage and outdated weights for various sub-sectors. Production of non-manufacturing items steadily increased with natural gas and electricity showing about 10% growth during the first four months of fy2004 relative to the same period of fy2003.

FISCAL MANAGEMENT: Revenue collection during the first nine

months of fy2004 increased by 9.2% over the same period of fy2003, but was short of target by 3.1% for the period. During the first quarter of 2004, the monthly revenue target for January was achieved; but collections in February and March were significantly below targets. It was observed that strikes (hartals) have had some negative impact on revenue collection. Despite the shortfall in revenue collection, the budget deficit in fy2004 is expected to be lower than the targeted 4.8% of gdp, principally on account of the shortfalls in implementation of the annual development program. Bangladesh, with a low revenuegdp ratio of 10.4%, which is low by regional standards, needs to substantially direct improve its revenue Raising collection both by implementing coordinated systemic, procedural and administrative reforms of both and indirect taxes. the revenue and the expenditure levels while maintaining fiscal prudence is central to accelerating economic growth and achieving rapid poverty reduction in Bangladesh.

Monetary developments: Broad money (m2) increased by 6.6% in

the first eight months of fy2004, compared with a 9.2% growth during the same period of fy2003. The higher growth in net foreign assets of the banking system compared with the corresponding period of the previous year was more than offset by the slower growth in the net domestic assets of the banking system. Credit to the public sector during July February fy2004 increased by only 1.5% compared with a 2.5% growth in July February fy2003. Net credit to the government during July February fy2004, declined by 1.7%, meaning that government possibly repaid more money than it borrowed from the banking system. Credit flow to the private sector continues to be robust, with a growth of 12.4% in the 12 months ending February 2004.

Balance of Payments: Aided by robust global demand, the export

sector recovered sharply with strong growth, particularly in garments and knitwear. During the first eight months of FY2004, exports amounted to $4,793 million, implying a 13.9% growth over the corresponding period of FY2003. Imports have also been showing robust growth for the first seven months of FY2004, increasing by 16.6% as against same period of FY2003. Based on data for the first half of FY2004, there have been sizable increases in the import of food grain (rice and wheat), sugar, edible oil, oil seeds, industrial raw materials, and petroleum. The opening of letters of credit (LCs) during July-February of FY2004 registered a 17.8% growth over the same period of the previous year, signaling strong import performance in the following months. Despite a widening of the trade deficit during the first seven months of FY2004, the current account of the balance of payments (excluding grants) generated higher surplus, mainly due to steady increase in overseas workers remittances and lower deficit in the

services account. This aided continued improvement in the balance of payments, resulting in a further build-up in foreign exchange reserves. Gross official reserves increased to US$2,593 million (or 3 months of imports) at the end of January 2004 from US$1,613 million (2.2 months of imports) at the end of January 2003. External reserves as of 20 April 2004 further increased to US$2,722 million or about 3 months' equivalent of imports.

Inflation and Exchange Rates: The rising trend in inflation has

been contained. On a point-to-point basis, inflation increased to 6.7% in November 2003 from 5.1% in July 2003, mainly due to a rise in food prices. Thereafter, inflation declined steadily to 6.5% in December 2003, 6.0% in January 2004 and 5.8% in February 2004 with declining trends in food prices. The higher price, to some extent, is not domestically induced. Rather it is attributed to an increase in international prices, particularly of several food items. While Taka-US$ rate remained stable, based on Bangladesh Bank's analysis, in real effective terms, the exchange rate experienced some depreciation reflecting the decline in the value of the dollar against major currencies. In early December 2003, all margin requirements on the opening of LCs were phased out, thereby further liberalizing the exchange market. Bangladesh, however, continues to perform below its potentials. The country would need to upgrade its infrastructure, including ports with requisite road and rail links to seize its full economic potentials, particularly of export-led manufacturing expansion. There is also a pressing need to address governance issues including reducing corruption, and reversing law-and-order slides.

1.4 Organ gram of the Organization

Board of Directors: In UBL the board of directors has been conceived as

the sources of all power headed by its chairman. It is legislative body of the bank board can delegate its power and authority to professionals, but cannot delegate, relinquish or avoid their responsibilities. The board of directors of the bank consists of 12 members who are reputed business personalities and leading industrialists of the country.

Board of director
SL 01 02 03 04 05 06 07 08 09 10 11 12 Name Azharul Islam Md. Asaduzzaman Md. Mahfuzus Sobhan Saroar Badius Salam Abu Hossaain Siddiki Abul Barak Alvi Faruk Alamgir Ms.Kamal Prof. Mirza Majharul Islam Sayad ANM Wahed Mustafizur Rahman Shah Habibul Haque Status Chairman Vice- Chairman Director Director Director Director Director Director Director Director Director Director

1.4.1 UTTARA BANK HEAD OFFICE.

Deputy Managing Director

Senior Executive Vice President

Executive Vice President

Senior Vice President

Senior Assistant Vice President Assistant Vice President

Senior Executive officer

Executive officer

Assistant Executive officer

Senior officers

Officers Junior officer

MTO

1.4.2 Different Wings of UBL

2.5.1. Head Office: > Chairman's Secretariat > Managing Director's Secretariat > Board Department > Share Department > MIS & Computer Department 2.5.2. Human Resources Division: > Personnel Department > Training Institute > Establishment Department > Stationary & Records Department > Transport Department > Test Key Department > Disciplinary Department 2.5.3. Marketing Division: > Business Development Department > Branches Department > Engineering Department > Public Relations Department 2.5.4. Credit Division: > Credit operation Department > Recovery Department > Lease Financing Unit > C I B Unit 2.5.5. Central Accounts Division: > Accounts Department > Statistics Department > Statistics Department > Reconciliation Department > Expenditure Control Department 2.5.6. Audit and Inspection Division: > Internal Audit Department > External Audit Department 2.5.7. International Division: > Treasury Department > Dealing Room

1.5 Hierarchy of Malibagh Branch Assistance General Manager

MRS. Marzina Khatun

Principal Officer
M.D Ashraf Uddin

Officer
MD. Khandukar Hossain Mrs. Ferdous Akter Mrs. Marium Akter MD. Momun. MD. TanvirHossain Mrs. Morshada khatun MD.Ferdous

Assistance Officer
Mrs. Fouzia Akter

1.6 Branches all over in Bangladesh.

Source: - www.uttarabank-bd.com

Research Methodology
2.1 Rational of the study: Both descriptive and exploratory
research has been selected to complete this paper. Comparison analyses also have been taken part of this paper.

2.2 Objective of the Study:

The objective of the report is to have a real life exposure in the banking sector. It will help to develop my knowledge in banking sector. The following are the objective of the practical orientation in bank: To find out the position of Uttara Bank Limited in the banking sector. To find out how its present strategy is working. To analyze the comparative performance of Uttara Bank Limited and some other selected private commercial banks. To know the successive position of each bank. To analyze the bank's performance in some key areas. To find out existing problems of the bank. To formulate alternative strategies for solving the problems. To recommend some better solutions for solving the problems. To formulate an implementation plan for the recommended steps. To formulate a contingency plan as a safeguard for changing. To familiarize different rules and regulations of export and import formalities.

2.3 Data collection procedures: To complete my report I have

collected my information from the following sources, Primary sources. Secondary sources. Primary sources: - Primary sources include conversation with officer and executives of the bank of different department. Secondary sources:-Secondary sources include annual report,

general banking manual, foreign exchange manual, investment manual, general report and other publication etc.

2.4 Limitation of the study: While collecting data, they did not
disclose much information due to the confidentially of the organization because of banking sector is sensitive and competitive by its nature. However I faced some following problems during the study, 1. Lack of time and resources. 2. Lack of perfect co-operation. 3. Insufficiency of data

3. Findings and Analysis

Part one

3.1 Sourses And Uses Of Fund

The composition of sources of bank fund is paid up capital, reserve and deposit from the customers and different banks. The bank uses the major portion of its fund for investment in loan and advances. The bank also invested in securities and shares.

3.2 CAPITAL
The authorized capital of Tk. 1000.00 million in 2006 and. Paid up capital became 199.70 million and 99.80 million as on 31st December 2006 & 2005 respectively

3.3 CAPITAL STRUCTURE:Authorized and paid-up capital of UTTARA Bank Limited for the last 5 years is given below. Table 01:- Capital position of Uttara bank.

Year

Authorized Capital (Tk.) in million 1000.00 200.00 200.00 200.00 200.00

Paid-up Capital (Tk.) in million 199.70 99.80 99.80 99.80 99.80

2006 2005 2004 2003 2002

CAPITAL STRUCTURE
1200 1000 Value 800 600 400 200 0 2006 2005 2004 Year Authorized Capital (Tk.) in million Paid-up Capital (Tk.) in million 2003 2002

Graph 01:-Show of capital position.

3.4 DEPOSIT
The total deposit of UTTARA Bank is increasing year to year. The total deposit in 2006 is 39360.20 million which was 36891.90 million in 2005. Table 02:- Deposit of Uttara bank.

Year 2006 2005 2004 2003 2002

Amount of deposit (TK in million) 39360.20 36891.90 34615.20 31477.60 29153.40

Amount of deposit (TK in million) 50000 Amount 40000 30000 20000 10000 0 2006 2005 2004 Year Amount of deposit (TK in million) 2003 2002

Graph 01:-shows amount of deposit. 3.5

UTTARA BANK LIMITED

BALANCE SHEET AS AT 31 DECEMBER 2006

2006 PROPERTY AND ASSETS

2005

Taka

Taka

Cash In Hand (including foreign currencies) Balance with Bangladesh Bank and its Agent Bank (including foreign

4,198,204,110

3,900,921,392

1,218,636,280

1,028,655,935

2,979,567,830

2,872,265,457

currencies.)

Balance with other Banks and financial institutions In Bangladesh Outside Bangladesh

2,586,566,001

2,697,313,652

2,350,103,677

2,501,479,672

236,462,324

195,833,980

Money at call and short notice

130,000,000

810,000,000

Investments Government Others

9,564,540,621 9,498,487,782 66,052,839

10,062,105,396 9,995,574,557 66,530,839

Loans Advances Loans, Credits, Drafts etc.

and

25,163,857,021

21,851,539,700

Cash Over 22,636,865,795

19,834,853,491

Bills discounted and purchased Fixed assets including Land,

2,526,991,226

2,016,686,209

Building, Furniture Fixtures Other Assets Non Banking Assets TOTAL ASSETS 45,217,006,469 and

942,071,927

776,234,974

2,631,766,789

1,964,086,185

42,062,201,299

LIABILITIES AND CAPITAL Liabilities Borrowings from other Banks, Financial Institutions Agents

and

56,194,089

46,508,006

Deposits and 39,360,207,187 other accounts Current and Other 10,473,849,824 Accounts etc. Bills Payable 1,074,690,778

36,891,910,320

9,382,984,326

1,312,766,792

Savings Deposits

Bank

16,874,922,684

15,115,144,287

Fixed Deposits Bearer Certificate of Deposit Other Deposits Other liabilities TOTAL LIABILITIES

10,037,191,494

10,233,066,793

915,000

700,000

898,637,407 3,715,166,371

847,248,122 3,258,749,083

43,131,567,647

40,197,167,409

CAPITAL/SHARE HOLDERS' EQUITY

Subscribed and paid up capital Proposed issue of bonus share (1:1) Statutory reserve Other reserve Profit and Loss account surplus TOTAL SHARE HOLDERS' EQUITY

199,664,800

99,832,400

199,664,800

99,832,400

520,837,039 1,161,297,628

510,837,039 1,150,962,512

3,974,555

3,569,539

2,085,438,822

1,865,033,890

TOTAL 45,217,006,46 LIABILITIES AND9 SHARE HOLDERS'

42,062,201,299

EQUITY

Sl. No.

Particulars

2006 Taka

2005 Taka

2004 Taka

2003 Taka 99832400

Paid-up-Capital

199,664,800

99,832,400

99832400

Total Capital

2,272,970,808

2,004,050,376

1740684000

168434200

Capital (Deficit)

surplus/

190,013,808

192,973,376

187805000

150855000

Total Assets

45,217,006,469

42,062,201,299

39700932623

36671006147

Total Deposits

39,360,207,187
&

36,891,910,320

34615240208

31477589673

Total Loans Advances

25,163,857,021

21,851,539,700

18601012262

18786283470

Total Contingent Liabilities Credit Deposit Ratio (%) Ratio of Classified Loan to total Loans & Advances (%) Profit after tax & provision Amount of classified loan during the current year Provision kept against classified loans Provision surplus / (deficit) Cost of Fund (%) Interest Assets earning

7,428,456,156 63.93%

8,538,820,824

7883579500

9021529268

59.23% 16.15% 22.14%

53.74%

59.68%

27.06%

15.04%

10

248,753,254

142,710,008

1209656205

1113981270

1609100000 1,067,100,000 1,080,500,000 882100000

11

12

907,448,567

853,751,185

954218525

1187741000

13 14

116,872,567 4.68%

126,736,185 4.14%

33432475 4.47% 5.44% 30460172099

15

34,858,397,642

32,723,645,096

32344967516

16

Interest nonearning Assets

10,358,608,827

9,338,556,203

7355965107

6210834048

3.6 Highlights on the overall activities of the bank for the year 2003 to 2006

3.7 Financial Highlights For the Year 2003 to 2006

3.7.1 Total Capital:
Total Capital (Taka)

Total Capital (Taka)

2003 2004 2005 2006 Amount

168434200 1740684000 2,004,050,3 76 2,272,970,8 08

Year

Graph 03:- Total capital of Uttara bank ltd.

3.7.2 Total Asset:
Total Assets (Taka)

50,000,000,000 40,000,000,000 30,000,000,000 20,000,000,000 10,000,000,000 0 2006 2005 Total Assets (Taka) 2004 2003

Graph 04:- show of total asset

3.7.3 Net Income per Share:

Net income per Share (Taka)
250 Amount 200 150 100 50 0 2006 2005 Ye ar Net income p0er Share (Taka) 2004 2003

Graph 05:- Show of net income per share.

3.7.4 Earning Per Share:

Earning per Share (Taka) 250 200 150 100 50 0 2006 2005 Ye ar Earning per Share (Taka) 2004 2003

Amount

Graph 06:-Show of earning per share.

3.7.5 Paid-up Capital:

Paid-up-Capital 250,000,000 Amount 200,000,000 150,000,000 100,000,000 50,000,000 0 2006 2005 Year Paid-up-Capital 2004 2003

Graph 07:- Show of paid up capital.

Part Four 4.1 General Banking: General Banking Department usually performs
a lot of important banking activities. General banking department is that department which is mostly exposed to the maximum number of bank customers. It is the introductory department of the bank to its customers. All business concerns earn a profit through selling either a product or a service. A bank does not produce any tangible product to sell but does offer a variety of financial services to its customers. The Malibagh Chyduripara branch of UBL has all the required sections of general banking and these sections are run by manpower with high quality banking knowledge. Hence, a touch of rich customer service is prevailing in the branch. In UBL the following departments are under general banking section: Account opening department. Local remittance department. Cash department. Clearing department. Collection department. Loan and advances. In the following Chapters brief discussion on the above departments are

presented respectively.

4.1.1. Account Opening Department:

The relationship between a banker and his customer begins with the opening of an account by the former in the name of the latter. Initially all the accounts are opened with a deposit of money by the customer and hence these accounts are called deposits accounts. Banker solicits deposits from the members of the public belonging to different walks of life, engaged in numerous economic activities and having different financial status. There is one officer performing various functions in this department. The following are the main functions performed by the department: Accepting of Deposit Opening of Account Check Book issue Transfer of an Account Closing of Account Account Transfer 4.1.1.1. Accepting of Deposit: Deposits are life-blood of a commercial bank. Without deposits there are no businesses for the commercial banks of any nature (NCBs, PCBs or FCBs). In this branch the various types of accounts are offered to various customers, which are grouped into: Demand deposit account. Time deposit account. Fixed Deposit Account Demand deposit account.

Demand deposit amount:

The amount in accounts are payable on demand so it is called demand deposit account. The following accounts are under demand deposit accounts; 1. Current account. 2. Savings account. 3. Short Notice Term Deposit (STD). 1. Current account: This type of account is opened by both individuals and business concerns. Frequent transactions (deposits as well as withdrawal) are allowed in this type of account. A current a/c holder can draw checks on his account for any amount for any numbers of times in a day as the balance in his account permits. This account provides no interest. The minimum balance to be maintained is Tk.2000. No new account can be opened with a check. 2. Savings Account Individuals for savings purposes open this type of account. Current Interest rate of these accounts is 5.50 % per annum. A minimum balance of Tk.1000 is required to be maintained in a SB account interest on SB account is calculated and accrued monthly, and credited to the account half yearly. Interest calculation is made for each month on the basis of the lowest balance at credit of an account in that month. A depositor can withdraw from his SB account not more than twice a week up to an amount not exceeding 25% of the balance in the account. 3. Special Notice Term Deposit (STD): The deposits in this account are withdrawal on prior notice varying from 7 to 29 days and 30 days or more. The interest is paid on the balance of the account. Current interest rate is 6.50% per annum.

Opening Procedure: For opening such A/C, application in the prescribed form along with a set of specimen signature duly verified by a reputable bank of any other person known to the bank. In case of persons, already maintain any F.C A/C or N.F.C.D. A/C with them, reference to that F.C A/C will serve, the purpose of introduction, the branch may verify the signature from the specimen signature and already available with them. Only one such F.C A/C can be maintained and the balance in the A/ C should not exceed $ 30.000/- or equivalent pound sterling at any one time. The A/C holder is also required to submit photocopies of passport, visa, and work permit/contract. As this is a current account no Interest is paid to the A/C holder. I) Time Deposit Account The amount in this a/c is payable only after stipulated time. The following a/cs are under time deposit a/c: Fixed Deposits which are repayable after the expiry of fixed period and are negotiable. Bearer Certificate of Deposits (BCD), which are repayable after expiry of fixed period but are negotiable. These are not renewable. Nonresident Foreign Currency deposits are term deposits maturing after 1 month, 3months, 6months and 1 year. This a/c's can be opened either in U.S. dollar or pound sterling. No interest is paid in case of premature encashment. II) Fixed Deposit Account These are deposit, which are made with the bank for a fixed period specified in advance. The band need not maintain each reserve against these deposits and therefore, bank gives high rate of interest on such deposits. A FDR is issued to the depositor acknowledging receipt of the sum of money mentioned therein. It also contains the rate of interest and the date on which the deposit will fall due for payment.

Interest on Deposits: Particulars Interest rate on Deposit Saving Deposit Special Notice Deposit (std) Fixed Deposit ( time Deposit ) month deposit 6 month deposit 1 Year 2 Year and above 3 year Rate of Interest 5.50 % 6.50 % 7.00 7.50 8.00 8.25 8.25 % % % % %

Opening of Account It includes the following stages: 1. Account opening procedure 2. Classification of customers Account opening procedure Persons over 18 years (except some restricted persons) Commissioner Certificate/Id. Card/ Pass Port Copy/ Voter Id. Card Two Copies A/C opening persons Photo Nominees Photo one copy (Major/Minor) Introducer Valid Signature KYC (Know Your Customer) TP (Transaction Profile) Money Laundering Papers Signature TIN Certificate Resolution Copy (For Company A/C)

Savings Accounts: 1. An existing Current Account holder of the Bank, 2. Photocopy of Passport / Chairman/Commissioner Certificates. 3. Two (2) copied of Passport size photograph. Current Account: 1. Proprietorship Firm: Name of authorized persons, designation, specimen, signature Card, Trade License, Passport/ Chairman Certificate. 2. Partnership Firm: Account must be opened in the name of the firm. The form should describe the names and addresses of all the Partners. Trade License from city corp. is needed. Partnership Deed. Letter of authority is achieved 3. Limited Company: Certificate of Incorporation. Certificate of Commencement of Memorandum of Association. Article of Association. Power of Attorney. account Societies/Club/Associations: Other than above mentioned common documents resolution of who will operate the account must be noted. Resolution of the Board of Director authorizing opening of an Business;

2. Classification of customers It includes the following: Individual (personal) Proprietorship (Sole traders) Partnership firms (Registered or Unregistered) Joint stock Companies (Private Limited companies/Public ltd.) Public Sector Corporations Clubs / Societies / Associations / Schools / Colleges / Universities etc. Executors/Administrators Trustees Illiterate persons Constituted Attorney Wage Earners.

4.1.3Issue of chequebook:
Fresh chequebook 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.

4.1.1.4 Issue of Duplicate chequebook:

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 Performa agreeing to indemnify the Bank for the lost checkbook. Fresh check Book 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 Excise 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. Account Transfer The customer submits an application mentioning the name of the branch to which he wants the account to be transferred. His signature cards, advice of new account and all relevant documents are sent to that branch through registered post with acknowledgment the balance standing at credit in customers account is sent to the other branch through Inter Branch Credit Advice (IBCA).

Closing of Account:
The following circumstances are usually considered in case of closing an account or justifying the stoppage of the operation of an account: Notice given by the customer himself or if the customer is desirous to close the account. 1. Death of the customer. 2. Customers insanity and insolvency.

Account Transfer:
Customer has to submit an application mentioning that he/she wants to transfer his/her A/C to his desired Branch and the officer will verify the signature, Customer has to be certified by different department of Bank that he/she has no liabilities to the bank. Then total particulars of A/C holder will prepare and sent to the Customer's desired branch. Liability of

Recognizer is secondary and account holder is primary

Local Remittance Department:

UBL has its branches spread throughout the country and therefore, it serves as best mediums for remittance of funds from one place to another. This service is available to both customers and non-customers of the bank. The department, which provides the facility, is known as local remittance department. The following are the Local Remittance Department .The following are the main functions performed by the credit department: Issuing &. Payment of Demand Draft: All related correspondence with other Branches & Banks Compliance of Audit & Inspection Balance of D.D. payable 81. D.D. Paid with advice Attached to Sanchaya Patra and Wage Earners Development Bonds. Payment of Incoming TT. Issuing, encashment of Pay Order and maintenance of record and proof sheet. All related statement % correspondences with Bangladesh bank and other branches. Issuance of Local Drafts Issuing and encashment of BCD. All related correspondences. Issuing of Outgoing TT. Issuance of Local Drafts. Issuance of T.T, ICA. IBCA & IBDA. Transaction Types: Collection of Cheque

Up to TK. 25,000 @ .15%, Minimum TK. 10. Above Tk.25, 000- 1, 00,000, @. 15% Minimum Tk.50. Above 1, 00,000-5, 00,000 @ .10%, Minimum Tk.150. Above 5, 00,000 @ .05%, Minimum Tk.600-Maximum 1,200 2) Demand Draft (D.D) Local Draft is an instrument containing an order of the Issuing branch upon another branch known as Drawee branch, for payment of a certain sum of money to the payee or to his order on demand by the beneficiary presenting the draft itself.

Flow Chart of DD Payment: Receive Money Issuing Branch DD Presented Paying Branch

Issues DD

Payment of DD

3. Telegraphic Transfer (TT):

Telegraphic Transfer is the most rapid and convenient but expensive

method. There are different modes of telegraphic transfer such as Fax, Mobile, Telephone Telex, and Telegram. If an applicant wants to transfer money quickly to the pay in another city or district he /she may request the banker to send it by TT.

Cash Department:
Cash payment of different instruments is made in the cash section. Procedure of cash payment against cheque is discussed here elaborately. Cash payment of cheque includes few steps: First of all the clients 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 cheque 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. Then the cheque is given to the teller person and he after checking, everything asks the drawer to give another signature on the back of the cheque. If the signature matches with the one given previously then the teller will make payment keeping the paying cheque with him while writing the denomination on the back of the cheque:. Cash paid seal is given on the cheque 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 cheque and make it sure that it is not post dated or undated. The amount in words and figures are same.

 Cash Balance calculation. The calculation is done by the officer in charge of cash section and then 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.

Clearing Department:
According to the Article 37(2) of Bangladesh Bank Order, 1972, the banks, which are the member of the clearinghouse, are called as Scheduled Banks. The scheduled banks clear the chouse drawn upon one another through the clearinghouse. This is an arrangement by the central bank where everyday the representative of the member banks gathers to clear the chouse. Banks for credit of the proceeds to the customers' accounts accept Cheque and other similar instruments. The bank receives many such instruments during the day from account holders. Many of these instruments are drawn payable at other banks. If they were to be presented at the drawee banks to collect the proceeds, it would be necessary to employ many messengers for the purpose. Similarly, there would be many chouse drawn on this the messengers of other banks would present bank and them at the counter. The whole process of collection and payment would involve considerable labor, delay, risk and expenditure. All the labor. Risk, delay and expenditure are substantially reduced, by the representatives of all the banks meeting at a specified time, for exchanging the instruments and arriving at the net position regarding receipt or payment. The place where the banks meet and settle their dues is called the Clearinghouse. Functions of the Department The following are the main functions performed by the department: Pass outward instruments to the Clearing-House.

 Pass inward instruments to respective department. Return instruments incase of dishonor. Prepare IBCA or IBDA for the respective branch and HO. Accounting Entries of Clearing Department 4.1.5. Collection Department 1. Clearing: As far safety is concerned customers get crossed Cheque for the transaction. As we know crossed Cheque cannot be encased from the counter rather it has though been collected through banking channel i.e. clearing. A client of UTTARA Bank received a Cheque of another bank, which is located with in the clearing range deposit, the Cheque in account at UTTARA Bank. Now UTTARA Bank will not pay the money until the Cheque is honored. 2. Transfer Delivery: Transfer delivery is a cheque collection procedure among internal branches within the Clearing House. When a cheque is of a Branch Office is deposited to another Branch Office, then collecting branch on that date sends that cheque to their, Local Office, sends that cheque to that respective branch and takes necessary action for honoring cheque. If the cheque is dishonored then authorized branch send the cheque to the local office and Local Office send that cheque to the collecting branch on the collecting date.Here Clearinghouse function is not required because transactions occur among the same branch of same Bank within the Clearing House. 3. Cheque is of a Same Branch of UTTARA Bank: If the cheque is of a Branch Office of a Bank (within the Clearing House of same city) then the collection branch send the cheque to the authorized branch/drawn on branch and issues an IBCA to the collecting branch.

On the other hand, if the cheque is of another Bank (outside of Clearing House to another city) then cheque collecting branch will find out whether any branch office of the collecting branch situated near to Authorized branch. If yes, then cheque collecting branch will send the cheque to the branch office near Authorized branch, that branch (near Authorized branch) office collect the cheque from drawn branch and issues an IBCA. If not, then the collecting branch will send that cheque to the Authorized branch, after that Authorized branch will send a DD with mentioning the name of their branch office near collecting branch and collecting branch will collect that cheque thereby. 4. Outward Bills for Collection (OBC): Customers deposit Cheque draft etc for collection attaching with their deposit sleep. Instrument within the range of clearing arc collected through local clearing house but the other which are outside the clearing range are collected through OBC mechanism. A customer of UTTARA bank principal branch local office Dhaka is depositing a Cheque of Sonali bank Coxs-Bazar. New as a collecting bank UTTARA Bank principal branch will perform the following task. 1. Received seal on deposit slip. 2. UTTARA Bank local office principal branch crossing indicating collecting bank. 3. Endorsement give payees A/C will be credited on realization. 4. Entry on register from where a controlling number is given. Collecting bank can collect it either by its branches or by the drawer's bank they will forward the bill then to that articulate branch. OBC number will be given on the forwarding letter. 5. Inward Bills for Collection (IBC): In this case bank will work as an agent of the collection bank branch receives a forwarding letter and the them as

bill. Next steps are: 1. Entry in the IBC register, IBC number given. 2. Endorsement given- "our branch endorsement confirmed". 3. The instrument is sent to clearing for collection. 4. Miscellaneous creditor A/C. Now following procedures will take place in case of the following two case. 6. Credit Transaction: When a branch requests another branch (of the same bank) to pay a certain amount against any instrument (cheque, DD etc) and become liable to that bank, issues a IBCA to that branch and these transactions are recorded in the Credit side of IBCA A/C serially. 7. Debit Transaction: When some cheques or any sort of financial instrument of another branch are deposited in a branch and this branch pays those instruments on behalf of authorized branch, issues an IBDA to that branch and these transactions are recorded in the Debit side of IBDA A/C. Responding Branch: When a branch responds against an IBCA or an IBDA that branch is called Responding Branch. 8. Credit Transaction: Cheques are deposited for payment in a branch that branch sends those cheques or other financial instrument to Clearing House for clearing. After clearing those cheques or financial instruments collecting branch makes payment against those financial instruments, before paying this branch as Originating Branch sends an IBDA to the Authorized Branch/Responding Branch. If those financial instruments are dishonored then respective parties are not paid and authorized Branch/Responding Branch again sends an IBDA to the Originating Branch. These returned financial instruments advice are recorded in the Credit side of the IBCA A/C.

9. Cash: 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 specials precaution is also taken. Tense situation prevail if there is any imbalance in the case. 10. Teller Customers 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 taller on the counter. So teller should hold certain quality should be friendly, provided prompt service and be accurate in his task. 11. Cash Packing and Handling: Cash packing and handling needs a lot of care as any mistake may lead to disaster. Packing after banking hour when the countries closed cash is packed according to denomination. Notes are counted several times and packed in bundle Stetted and stumped with initial.

Loans and Advance

Categories of loans offered by UBL Agriculture Large and medium scale industries > Export Other commercial lending (jute and fertilizer) Small and cottage industries > Consumer Loan Personal loan Some other loans are: a) Housing loans b) Residential c) Commercials d) Transport e) Cold storage f) Brick field g) Gold loans h) Against work orders i) Against work (FDR) J)Loans against sanchaypatra k) loans against WEBD, ICB, unit certificate 'l)

loans against life insurance policy m) Others special program.

Part Five

Foreign Exchange
POSITION OF UBL IN FOREIGN EXCHANGE BUSINESS: Foreign exchange business is totally controlled by the Central Bank of Bangladesh (Bangladesh Bank). Central Bank permits some specific branches to

perform the foreign trade. Those who have the authority .To operate foreign trade business are known as AD branch. UBL is an AD Bank. UBL operates foreign exchange trade through its branches. To handle foreign exchange business effectively and efficiently, the Bank has/ over the years, developed a wide network of correspondents throughout the world. The bank has more than 600 foreign correspondents worldwide. UBL is equipped with all modem technology & provides following international banking services. Plays a vital role in import, export and other foreign currency ofthe country through more than 200 foreign correspondents worldwide. Renders fastest service to the exporter and importer through its SWIFT service. Offers competitive price for importers and exporters. a ,, Provides support to the exporter and importer by extending working capital, preshipment, post shipment facilities. Uploads its commitment in international payment. UBL has got its independent treasury and dealing room equipped with Reuters. Dealings System and provides... Effective service to the client. Daily exchange rate buying and selling. Forward cover at competitive price. Deals in foreign currency with Central Bank, Commercial Bank and other potential clients. Buying and selling third currency with all leading banks worldwide. Covers exchange fluctuation risk by providing competitive premium FOREIGN EXCHANGE TRANSACTIONS: The transactions of UBL in foreign exchange involve outward and inward remittance of foreign exchange from one country to another. UBL makes sales and purchase of equivalent foreign currencies on spot or forward basis. The sale involves exchange of foreign currency for home currency. The purchase involves

exchange of home currency for foreign currency. The conversion of foreign currency into home currency takes place at an agreed rate of exchange which the Banker quotes, one for selling and another for buying, each one separately for spot transactions and forward transactions. . There are three kinds of foreign exchange transaction: A) Foreign Remittance B) Import C) Export A) Foreign Remittance: This bank is authorized dealer to deal in foreign exchange business. As an authorized dealer, a bank must provide some services to the clients regarding foreign exchange and this department provides these services. The basic function of this department are outward and inward remittance of foreign exchange from one country to another country. In this process of providing this remittance service, it sells and buys foreign currency. The conversion of one currency into another takes place an agreed rate of exchange, which the banker quotes, one for buying and another for selling. In such transactions the foreign currencies are like, other commodities offered for sales and purchase, the cost (convention value) being paid by the buyer in home currency, the legal tender. Remittance procedures of foreign currency 1. Outward and inward remittance: Outward remittance comprises remittance on account of imports and export remittance on sundry items, sale, travel cheques, currency notes and coins. The remittances are affected through UBL's foreign braches as the case may be. 2. Spot and forward transactions: When the conversion of currency for purchase or sale is put through immediately to account for a present

transaction, the transaction is called "spot" or "ready" transaction. When the conversion of currency for purchase or sale is arranged in advance to account for a future transaction, the transaction is called forward transaction. 3. Spot and forward rate: The rate of exchange, at which the conversion of the currency takes place for a spot transaction, is called the spot rate and the rate in which is fixed up in advance for a forward transaction, is called the forward rate.

B) Import: According to Import and Export Control Act, 1950, the Office
of Chief Controller of Import and Export provides the registration (IRC) to the importer. In an international business environment, buyers and sellers are generally unknown to each other. So seller of goods always seeks security for the payment of his exported goods. Bank gives export guarantee that it will pay for the goods on behalf of the buyer if the buyer does not pay. This guarantee is called Letter of Credit. Thus the contract between importer and exporter is given a legal shape by the banker by 'Letter of Credit'. 1 Letter of Credit(L/C): Definition of letter of credit: A letter of Credit Is a definite undertaking of the Issuing Bank, to make the payment for the import, on behalf of the importer in other words, it is a letter of the Issuing Bank to the beneficiary, undertaking to effect payment under some agreed conditions. It is an undertaking of the Issuing Bank to be Beneficiary to make payment or to accept bill of exchange. It is also an authorization of the issuing Bank to another Bank to effect Payment or to negotiate bill of exchange, against stipulated documents, complying credit terms. L/C is called documentary letter of Credit. Because the undertaking of the Issuing Bank is subject to presentation of some specified documents.

KINDS OF LETTERS OF CREDIT (L/C) Revocable Letter of Credit. , Irrevocable Letter of Credit Confirmed Letter of Credit. Confirmed and Irrevocable Letter of Credit Transferable or Divisible Letter Of Credit Back To Back Letter Of Credit Red Clause Letter Of Credit Sight Letter Of Credit Usance Letter Of Credit Revolving Letter Of Credit Stand-By Letter Of Credit All letters of credit therefore, should clearly indicate whether they are revocable or irrevocable. In the absence of such indication the credit shall be deemed to be revocable. REVOCABLE L/C: A revocable L/C may be amended or canceled by the issuing bank at any moment and without prior notice to the beneficiary. In case of revocable credit, however, the L/C issuing bank is bound to: (I) Reimburse a branch or bank with which a revocable credit has been made available for deferred payment, if such branch or bank has, prior to receipt by it for notice of amendment or cancellation, taken up documents which appear on their face to be in accordance with the terms and conditions of the credit. (ii) Reimburse a branch of bank with which a revocable credit has been made available for sight payment, acceptance or negotiation, for any payment, acceptance or negotiation made by such branch or bank prior to receipt by it for notice of amendment or cancellation, against documents which appear on their face to be in accordance with the terms and

conditions of the credit. IRREVOCABLE L/C An irrevocable L/C constitutes a definite undertaking of the issuing bank provided that the stipulated documents are presented; the terms and conditions of the credit are complied with. The full name of "L/C" is Irrevocable Letter Of Credit which means once it is issued by the bank for the buyer and received and accepted by "he beneficiary (the seller), it cannot be canceled or withdrawn by the buyer or the opening bank, unless with the consent of the beneficiary. In short, once the buyer opens the L/C from his bank to cover the goods he has purchased, he will have to pay for the goods when the seller ships the goods exactly as per the terms stipulated in the L/C. Therefore, as far as the seller is concerned, the sooner he has the L/C on hand, the safer he is. L/Cs can be opened in many ways, but in essence, it is a promise the buyer's bank makes to the supplier, to pay him when he does certain things with evidence to prove. The things the L/C opening bank wants the supplier to do are called "terms". Therefore, when the supplier receives an L/C, he must read the terms carefully to make sure he is capable of fulfilling them all exactly as they are written. If some terms are beyond his ability to fulfill, he must point them out to the buyer and explain why he cannot comply with those terms, and request the buyer to amend them by means of an official amendment through the bank. CONFIRMED L/C: This is such a credit for which exporter's bank gives all sorts of surity for the advance of payment. CONFIRMED AND IRREVOCABLE L/C: Confirmed and Irrevocable L/C which combines the quality of confirmed L/C and Irrevocable L/C clause. TRANSFERABLE OR DIVISIBLE L/C: A Transferable credit is a credit under which the beneficiary has the right to request the bank called upon

to effect payment or acceptance or any bank entitled to effect negotiation to make the credit available in whole or in part to one or more other parties (second beneficiaries.) A credit can be transferred only if it Is expressly designated as "transferable" by the issuing bank. Terms such as " divisible", "fractional", "assignable" and "transmissible" add nothing to the meeting of the term "transferable" and shall not be used. In that case the bank requested to effect the transfer (transferring bank), whether it has confirmed the credit or not shall be under on "Transferable" by the issuing bank. Terms such as divisible", "fractional", "assignable" and "transmissible" add nothing to the meeting of the term "transferable" and shall not be used, In that case the bank requested to effect the transfer (transferring bank), Whether it has confirmed the credit or not shall be under no obligation to effect such transfer except to the extent and in the manner Expressly consented to by such bank. Bank charges in respect of transfers are payable by the first beneficiary unless, otherwise specified. A transferable credit can be transferred once only. Fractions of transferable credit (not exceeding in the aggregate the amount of credit) can be transferred separately^ provided partial shipment are not prohibited, and the aggregate of such transfers will be considered as constituting only one transfer of the credit. The credit can be transferred only one the terms and conditions specified in the original credit, with the exception of the amount of the credit. BACK TO BACK L/C: A back to back letter of credit is a new credit. It is different from the original credit based on which the bank undertakes the risk under the back to back credit. In this case the bank main surety / secure are the original credit. The original credit (selling credit) and the back the back credit although they both from the part of the same business operation. The supplier (beneficiary of the back to back credit) ships goods to the importer or supplies goods to the exporter and presents the

document to the bank as is specified in the credit. It is intended that the exporter would substitute his own documents and ships the goods to the importer, if necessary, and present documents for negotiation under the original credit, his liability under the back to back credit would be adjusted out of these proceeds. RED-CLAUSE L/C: In this credit, the exporters' bank is directed to advance his dues even before they produce all export documents to the bank. SIGHT L/C: It means when the shipper ships the goods covered by the L/C, and presents the documents to the bank for negotiation, the bank (the negotiating bank) will credit the proceeds to the shipper's account immediately after checking and finding the, documents in order. When the documents are sent by the negotiating bank to the L/C opening bank, the VC opening bank will effect payment to the negotiating bank immediately. Such L/Cs usually says "AT SIGHT" which means "pay when the bank sees the documents USANCE L/C: It means L/C with time allowed for the opening bank to make payment of a foreign bill of exchange. Or, put it in another way, payment from the L/C opening bank to the negotiating bank will only be made after a period of time as stipulated in the L/C. The length can be worked out between the buyer and the supplier, sometimes 60 days, sometimes 90 days or 120 days. Sometimes when the exporter receives a uses L/C of, for instance, 90 days sight, he may think he has to wait 90 days after shipping goods to receive payment, or if he wishes to receive payment at once, he will have to pay interest to his bank. However, this is not always the case. Sometimes, the L/C may say" 90 days sight with interest to be borne by the L/C opener". If

it does say this, he virtually can use it like a sight L/C. After he has presented the documents to his bank, his bank should pay him in full (not discounted) at once after checking them and finding them in order. However, his bank/the negotiating bank would have to wait 90 days for the L/C opening bank to pay. Therefore, does say this, he virtually can use it like a sight L/C. After he has presented the documents to his bank, his bank should pay him in full (not discounted) at once after checking them and finding them in order. However, his bank, the negotiating bank would have to wait 90 days for the L/C opening bank to pay. Therefore, as far as he is concerned, he can receive payment as if is a sight L/C. If the usage L/C does not say "Interest is to be borne by the L/C opener", then either he. will have to wait till the maturity of the 90 days or whatever the time spent $ is as specified in the L/C to receive payment/or he may request his bank to .pay him at once and charge him for the interest. His bank usually should accept his request. because the undertaking of the Issuing Bank is subject to presentation of some specified documents.

Parties to the L/C:

Importer: Who applies for L/C. Issuing Bank: Importer. Confirming Bank: It is the bank, which adds its confirmation to the credit and it is done at the request of issuing bank. Confirming bank may or may not be advising bank. Advising or Notifying Bank: It is the bank through which the L/C is advised to the exporters. This bank is actually situated in exporter's country. It may also assume the role of confirming and /or negotiating bank depending upon the condition of the credit. Negotiating Bank: It is the bank, which negotiates the bill and pays the amount of the beneficiary. The advising bank and the negotiating bank may or may not be the same. Sometimes it can also be confirming bank. It is the bank which opens/issues a L/C on behalf of the

Accepting Bank:

It is the bank on which the bill will be drawn (as per

condition of the credit). Usually it is the issuing bank Reimbursing Bank: It is the bank, which would reimburse the negotiating bank after getting payment - instructions from issuing bank.

3 Export: Generally the goods and services sold by Bangladesh to

foreign households, businessmen and Government are called export. The export trade of the country is regulated by the imports and Exports (control) Act, 1950. There are a number of formalities, which an exporter has to fulfill before and after shipment of goods. The exports from Bangladesh are subject to export trade control exercised by the Ministry Of Commerce through Chief Controller of Imports and Exports (CCI & E). No exporter is allowed to export any commodity permissible for export from Bangladesh unless he is registered with CCI & E and holds valid Export Registration Certificate (ERC). The ERC is required to renew ever year. The ERC number is to be incorporated on EXP forms and other documents connected with exports. The formalities and procedure are as follows: I. Obtaining exports LC: To get export LC form exporter issued by the importer. II. Submission of export documents: Exporter has to submit all necessary documents to the collecting bank after shipment. III. Checking of export documents: after getting the documents banker used to check the documents as per LC terms IV. Negotiation of export documents: If the hank accepts the document and pays the value draft to the exporter and forward the document to issuing bank that is called a negotiating bank. If the bank does buy the LC then the bank normally acts as collecting bank. V. Realization of proceeds: This is the period when the issuing bank has realized the payment.

VI. Reporting to the Bangladesh bank: As per instruction by Bangladesh Bank the bank has to report to respective department of Bangladesh bank by mentioning latest payment. VII. Issue to proceeds realization certificate (PRC): Bank has to issue proceed realization certificate of export LC to the supplier / exporter for getting cash assistance.

4 SWOT Analysis:
The Banks 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 companys resource capability and its external situation. The SWOT analysis is as follows:

Strength:
The banks have provided services successfully and have achieved goodwill in all over the country. UTTARA 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 thoughts and skills in the management of the bank, which is very much essential for success in todays competitive market. Bank has a very competent and experienced top Management. . Branches: UTTARA bank is operating their business all over the

country with 202 branches. It has strengthened the distribution of the banks services.

Weakness:

The bank does not have 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 bill boards. The remuneration of the officers of UTTARA bank is lower

compared to other banks. Even the internship students are paid nothing. This is why high skilled human resources are discouraged to join here. The decision making of the bank is too many centralized. No

decision is made without the authorization of the head office.

Opportunity:
UTTARA bank is operating corporate banking. In our country there is a huge opportunity of consumer banking. So UTTARA bank can reposition their branding and introduce consumer banking with corporate banking. The banking sector of the country is becoming modernized in the country. People like to draw money any time from anywhere. So ATM card is getting popularized in the country. UTTARA bank can introduce ATM system in their bank. The intention of the people has been changing. They now want to

save more. They also want some benefit on their saving. So UTTARA bank can introduce more products and schemes.

Threat:
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 banks. The value of local currency is decreasing. So investment in 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. 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.

CHAPTER-SIX

5. Conclusions and suggestions

6.1 Conclusion
Banking sector is the chief financial Intermediary in a country. It is a very challenging institution and in age of globalization and free trade, the process and the system of running a bank is changing. UBL already managed itself with this changing environment. The company strategies are clean and concise. Their return is pretty good. If the company goes this way, one can expect that in near future Uttara Bank Limited may become one of the top performers. From the discussion it can be concluded that UTTARA Bank playing an important role in the economic development of the country and it has a prospect future to have a very good position in the banking sector. To do this it should increase promotional activities to reach to the people easily. From the learning and experience point of view I can say that I really enjoyed my internship at UTTARA Bank Ltd. from the very first day.

6.2 Recommendation Improvement of the Human Resource Department : The HR

department of this bank is one of the weakest areas and many of the human resource development police and practices are not being followed or implemented. Though, there has been performance appraisal for the employees but still it is lying idle and no action has been taken. The

management should immediately apply the performance appraisal system and take appropriate actions on the basis of that appraisal. All sorts of promotions or other benefits should be based on the report of the performance appraisal. The traditional method of considering years of work experience as the criteria should be changed and rather the new method of looking at the output, productivity and quality of the work should be considered. The HR wing has to be more active rather the maintaining administrative duties. Other than the head of this division, the staffs in this wing are incompetent for this position. More qualified and skilled HR professional should be recruited for this department for the future growth of the HR in UBL. The HR department should be gradually extended at the branch level as the bank is expanding so that each branch has a HR official.

Formulation of Recruitment / remuneration policy: UBL

must pursue a strong and an effective recruitment system so that the right people are recruited at the right job. As already mentioned earlier, other than the Probationary Officers and Management Trainees there are major flaws in the recruitment of the staffs from other banks during the embryonic stage. But now as the bank is expanding, it must focus on attracting, getting and retaining qualified personnel for filling up its positions. It is worth spending more on attracting qualified human resources rather than getting the wrong people in the wrong positions.

Stop Reference Appointment: UBL management and particularly

the Board of Directors must change the system of appointing people by giving the reference. It has been deeply observed that most of the reference appointees are not up to the standard and have a poor performance. It may not be absolutely possible to eliminate the reference appointment system as it is a local private company, but still the tendency can be reduced to a certain extent if the management and the Board of Directors undertake bold steps.

Disguised Employment: Currently this has become a major problem

at UBL. In order to enhance the productivity of the work force at UBL, the management must consider the appropriate amount of work force requires and must assess the productivity of each employee.

Enhancement

of

remuneration

package:

The

present

compensation package at UBL is very unimpressive and not capable to attract quality personnel to fill up its positions. Many skilled and devoted officers of the bank are depressed with their compensation package. Currently, the management is trying to attract more MBA's in future. But the bank must redesign its compensation' package to attract quality human resources particularly qualified MBA's for the bank. Since the foreign banks pay double that of UBL and other private banks also have a higher scale than UBL, it is high time that the management should consider revising the remuneration package in order to attract quality human resources.

Improvement of quality of services: Like in many other

emerging market economies, commercial banks in the Bangladesh economy are to face an Increasing competition for their business in the coming days. Their business will no longer remain easy as they had earlier. The real change in the banking business has started to come with the govt.s decision to allow the business in the private sector in the middle of the eighties.

6.3 BIBLIOGRAPHY
Annual Report (2003) of Uttara Bank Limited Annual Report (2004) of Uttara Bank Limited Annual Report (2005) of Uttara Bank Limited. Annual Report (2006) of Uttara Bank Limited. A/C Brochure of Uttara Bank Limited. Web Site- www.uttarabank-bd.com