1.

1 Background of the Report

For the economic advancement of a country the banking sector plays a vital role. In this regard Faculty of Business studies designed and offered a professional program named B.B.A Bachelor of Business Administration to produce well-equipped professionals for various sectors of Bangladesh.

On the way to obtaining the BBA degree "Internship in Banks". I was placed at IFIC Bank Ltd. Saheb Bazar Rajshahi Branch for a period of about 6 weeks and this report is the formal presentation of my experiences gained and observations accumulated.

1.2 Objectives of the Practical Orientation

Fulfillment of B.B.A Program is the core concern behind this practical orientation and it is very much justified for the following reasons: How the practice of banking business is being carried out nowadays. To acquainted with the entire branch banking procedures To make a bridge between the theories and practical procedures of banking and to find out whether and deviations exists between theory and practice. To understand better the terms that has been taught in previous course Banking in BBA and to have some practical exposures that will be helpful for my MBA Program. To get oneself very familiar with the real banking environment as a student of B.B.A.

1.3 Scope of the Practical Orientation

IFIC Bank Ltd. is one of the leading First Generation Private Banks of the country. As a result I came to know almost all the banking services and products offered by commercial banks as well as some special and innovative products by the bank itself.

1.4 Limitations Faced

Though I have tried my best to utilize properly the allotted time I had 6 weeks is simply not enough to grasp all the concerns of banking business. Furthermore our branch is not allowed to carry on all sort of banking activities, although some other branches of IFIC Bank Ltd practice those. Another problem is that during my orientation period some desks were facing too intense pressure to spare its time for me.

1.5 Methodology Applied

In order to make the Report more meaningful and presentable, two sources of data and information have been used widely. The "Primary Sources" are as follows Face-to-face conversation with the respective officers and staffs of the Branch. Informal conversation with the clients. Practical work exposures from the different desks of the branch covered. Relevant file study as provided by the officers concerned. The "Secondary Sources" of data and information are Different desk manuals published by IFIC Bank Ltd. Annual Reports of the Bank. Various circulars issued by the Head Office regarding general banking functions. The bank's website: www.ificabankbd.com

1.6 Organization & Preview of the Report

The author intended to present this report as per the "Job Schedule" that is given as follows-

Duration 01.10.2013 to 15.12.2013

Department General Banking

According to the schedule, One department is arranged in my report in chapter named "General Banking". In Chapter 2, an overall view of IFIC Bank Ltd. and its Saheb Bazar Rajshahi Branch has been presented. For better clarification Tables & Graphs are used within the chapters, as felt necessary.

2.1. HISTORICAL PERSPECTIVE:

International Finance Investment and Commerce (IFIC) Bank Limited started banking operations on June 24, 1983. Prior of that it was set up science 1976 at a joint venture finance company at the instance to the Government of the People's Republic of Bangladesh. Government then held 49 percent shares while the sponsors and general public held the rest. The objectives of the finance company were to establish joint venture Banks Finance Companies and affiliates abroad and to carry out normal functions of a finance company at home.

When the Government decided to open up banking in the private sector in 1983, the above finance company was converted into a full-fledged commercial Bank. Along with this, the Government also allowed four other commercial Banks in the private sector. Subsequently, the Government denationalized two Banks, which were then fully Government-owned.

While in all these Banks Government held nominal 5 percent shares, an exception was made in the case of this Bank. It retained 40 percent shares of the Bank.

The decision by the Government to retain 40 percent shares in IFIC Bank was in pursuance of the original objectives, namely, promotion of joint participation of Government and private sponsors to establish joint venture Banks, financial companies, branches and affiliates abroad. The Government of Republic of Bangladesh now holds 35% of the share capital of the bank. Leading industrialists of the country having vast experience in the field of trade and commerce own 34% of the share capital and the rest is held by the general public.

2.2 Capital Structure

Tier-I capital of the bank includes Paid-up capital, Statutory reserve, General reserve and Retained earnings. Other components of Tier -1 Capital such as Non-repayable share premium account, Minority interest in subsidiaries, Non-cumulative irredeemable preference shares and Dividend equalization fund stand nil. Tier-II (Supplementary Capital) consists of general provision, revaluation reserves for fixed assets, securities & equity instruments and provision for Off-Balance Sheet exposures. All other preference shares and Subordinated bonds included under Tier II Capital stand nil. The use of Tier-III (short term subordinated debt) is limited only for part of the market risks. The bank does not have any Tier- III capital. The details of consolidated Capital structure as of 31st December 2012 are provided as under: Crore Tk. A. Tier-I Capital Fully Paid-up Capital Statutory Reserve eneral Reserve Retained Earnings Total Tier -I Capital Deductions (if any) Total Eligible Tier-I Capital Tier II Capital General Provision Asset Revaluation reserve up to 50% Revaluation Reserve for Securities Provision for Off-Balance Sheet Total Tier II Capital Deductions (if any) Total Eligible Tier II Capital Total Eligible Capital (Tier I + Tier II) 346.05 283.25 5.58 49.87 684.75 684.75

B.

75.33 5.77 0.85 36.55 118.50 118.50 803.25

C.

The Bank has taken the projection to increase its authorized capital upon 1600 million in consisting with the newly declared rule of Bangladesh Bank for implementation of "Banking Company Act-2003".

2.3 Ownership Structure

Ownership of the Bank is held by the sponsors in the private sector and Government of the People's Republic of Bangladesh. Sponsors and individuals now own about 62% of the share capital and the Government own a little more

Board Of Directors:
Board of Directors of the Bank is a unique combination of both private and Government sector experience. Currently it consists of Ten Directors. Of them five represent the sponsors and general public and four senior officials in the rank and status of joint secretary/Additional Secretary represent the Government. Managing Director is the exofficio Director of the Board. Current board of directors are: Salman F Rahman Mohammad Lutfar Rahman Monirul Islam Syed Anisul Huq Mohammed Nayem Syed Jalal Ahmed A.R.M. Nazmus Sakib Arijit Chowdhury M. Shah Alam Sarwar

Chairman Director Independent Director Independent Director Independent Director Govt. Nominated Director Govt. Nominated Director Govt. Nominated Director Managing Director & CEO

Data was updated on July 31, 2013.

2.4 Network of the Bank

The bank covers by its activities all the important trading and commercial centers of the country. As on 1st December 2013 it had 110 branches within Bangladesh. Almost all the important branches are equipped with computer in addition to the modern facilities and logistics and professionally competent manpower.

Permission from Bangladesh Bank has been obtained to open three urban branches and one rural branch in Bangladesh 2001.

Domestic:
The Branches of the Bank cover all the important trading and commercial centers in Bangladesh. As of date, it has 110 branches within Bangladesh. The Principal Branch is fully equipped in order to handling Foreign Exchange and transaction of all types of Foreign Exchange Business. The Bank plans to open a few new branches in future at different important commercial places all over the country including providing banking facilities to our valued clients situated different places of the country. Overseas:

2.5 Specialized Financing

Besides carrying out conventional banking, the Bank over the past four years has been providing term finance to medium and small-scale industries. Both Asian Development Bank and World Bank have designated it to finance medium and small industries under a special program. At the moment, the bank is carrying out study to set up small branches in the rural areas to promote small-scale entrepreneurs to generate employment.

25.1 Large & Medium Loan Financing

According to CRM policy guideline, Large & Medium Loan Financing is one segment of loans and advances excluding Consumer Finance (CF) & Small Enterprise Financing (SEF). The growth in this area during the year was satisfactory. Financing under Large & Medium Loan Category concentrates on the Trade Finance and in different prospective industries like Textile, Transport, and Telecommunication etc.

Large Loans are categorized as the loans, which are above 10 percent /ef Bank's capital. Net advance under "Large Loan Category" is 48.04 percent of total advance. Net advance under Large & Medium Category however stood at Tk. 21174.60 million, which was 83.07 percent of total advance of Tk. 25490.66 million.

25.2 Foreign Exchange Business

Total deposit of the Bank reached at Tk.9,229 crore in 2012 against Tk.7,304 crore in 2011, demonstrating a growth of 26%. Loans & advances increased to Tk.7,845 crore from Tk. 6,543 crore, posting a growth of 20%. The foreign exchange business grew by 7% from

Tk.16,808 crore to Tk.17,916 crore. Because of circular enforced by central bank, NPL ratio of the Bank increased from 4.06% in 2011 to 5.31% in 2012 against estimated increase of 2% due to new classification criteria. However, we will put in our best effort to reduce the NPL ratio in 2013. The following products under consumer financing have been designed for marketing: Easy Loan (Secured personal Loan)

Secured personal loan to meet personal financial requirement

Consumer Durable Loan

Extended for purchase of consumer durables like Television, Air Conditioner Washing Machine, Computer etc for personal /family use.

Parua (Education Loan)

Loans for pursuing higher education.

Thikana (House Building Loan)

Loan for individuals for purchase of flat/construction of own house.

Flexi Loan (Personal Loan)

Personal loan to meet personal financial requirement without any security.

Peshajeebi Loan (Loan for Professional)

Loan for professionals for purchase of items to support professional needs.

Auto Loan

Loans to purchase new or reconditioned vehicles for personal use only.

Festival Loan

Extended to meet expenses of major religious festivals like Eid, Puja, Christmas and Budda Purnima.

Small Enterprise Financing

Within the purview of Central Bank prudential Regulations for financing small enterprises, IFIC offers 13 different products for selected target groups, such as: Easy Commercial Loan, Retailers Loan, Transport Loan, Commercial House Building Loan, Possession right Loan, Contractor's loan, Bidder's loan, Working Capital Loan, Project Loan, Letter of Guarantee, Letter of Credit, Loan against Imported Merchandize (LIM) and Loan against Trust Receipt (LTR).

Lease Financing

IFIC Bank extends customized lease finance facility to Corporate Business Units and SME in the manufacturing and service industries sectors. IFIC offers asset backed financing against industrial machinery, commercial equipments, office equipments, generators, vehicles, sea or river vessels, engines, construction equipments, Agriculture equipments etc.

2.6 Operation Abroad

Joint ventures abroad: Bank of Maldives Limited: 1F1C is the first among the banks in the private sector to have operations abroad. Right in 1983i.e. 20 years ago, the bank set up a joint venture bank in Maldives known as Bank of Maldives limited (BML) at the request of the government of the republic of Maldives. This is the only national bank in that country having branches throughout that country. IFIC bank managed the affairs of BML from 1983 to 1992. IFIC bank sold its shares in 1992 to the government of the republic of Maldives and handed over the management of BML to Maldives government.

Oman Bangladesh exchange company:

In 1985 IFIC Bank established an exchange company named Oman Bangladesh exchange company (LLC) in the sultanate of Oman. IFIC holds 255 of its share and the branch 75% is held by the Omani sponsors. The exchange company has at present 7 branches functioning in almost all the major cities /towns of Oman. The operation of the branches is fully computerized having online international exchange .the affairs and businesses of the exchange company are run and managed by IFIC Bank under a management contract.

Nepal -Bangladesh Bank Limited:

In December 1993 the bank got the permission to establish a joint venture bank with 50% equity in Nepal. The bank known as Nepal Bangladesh bank ltd. (NBBL) came into operation in June 1994.This is the first joint venture bank between the two countries. As per terms of the joint venture agreement, management of the bank is vested with the IFIC Bank. Within one year of its operation this bank reached break even. It has now 17 branches.

Nepal-Bangladesh Finance & leasing Company Limited:

IFIC Bank has also established joint venture finance and leasing company in Nepal in 1999 with 30% equity under the name and style of Nepal Bangladesh finance and leasing company limited.

Branch Abroad
In Pakistan the Bank has Two Branches. The first overseas branch in Karachi, Pakistan was opened by the Bank in 1987.within the short span of its operation the branch procured sizeable business. Subsequently, the bank opened its branch at Lahore in 1993. Both the branches enjoy reputation and goodwill in Pakistan and have been operating profitability.

2.7 Management Hierarchy

Chairman Board of Directors Managing Director

Deputy Managing Director Senior Executive Vice President Executive Vice President Senior Vice President First Vice president Senior Staff Officer Staff Officer Officer Grade-1 Probationary Officer Grade 1 Officer Grade II Cash / Com. Officer Assistant Officer

2.8. Facts And Figures:

Corporate Information
IFIC BANK LIMITED ESTABLISHED IN 1976 Head Office: BSB Building (8th. 10th, 17th, & 19th, floors), RAJUK Avenue. Motijheel C/A, Dhaka-1000,

Bangladesh Fax: 880^2-9562015

Telex: 642703 IFICM BJ, 632404 IFICM BJ Website: ificbankbd.com Telephone 9563020,9562060,9562062,9562068 External Auditors Howladar Yunus & Co., Dilkusha C/A, Dhaka-1000

2.9 Bank's Mission:

Quest for Excellence IFIC's mission is to provide service to its clients with the help of a skilled an Dedicated workforce whose creative talents, innovative actions and competitive edge make its position unique in giving quality service to all institutions and individuals that it cares for. IFIC Bank Ltd. is committed to the welfare and economic prosperity of the people and the community. IFIC Bank Ltd. would like to play as an active partner in regional banking Operating beyond the national boundary. In an intensely competitive and complex financial and business environment, it' particularly focuses on growth and profitability of all concerned. The decision by the Government to retain 40 percent shares in IFIC Bank was in pursuance of the original objectives, namely, promotion of joint participation of Government and private sponsors to establish joint venture Banks, financial companies, branches and affiliates abroad.

2.10 TWO YEARS ACTIVITIES AT A GLANCE

Year Ended 31st December (Taka in Millions except Dividend, Earning per share & Branch)

FINANCIAL HIGHLIGHTS OF THE BANK

Source: Annual Report,2012

2.11 Sources of Fund And Its Uses:

The sources of fund of the bank is its deposits, paid-up capital, retained earnings, counter finance from Bangladesh Bank and fund procure from other banks on short-term notice.

The maximum portion of the available fund was utilized in extending loan and advances (16.5%). Investment in different bonds, securities, bills and debentures (12.27%) and maintained cash in hand and balance with central bank (6%). The surplus fund (11.95%) was invested in the call money market.

2.12 OPERATIONAL RESULT And Profit

2.12.1 Growth In Deposit:
The Bank mobilized a total deposit of Tk. 92,291.28 million as of December 31, 2012 as against Tk. 73,042.23 million as of December 31, 2011 indicating an increase of 26% over the previous year. The competitive interest rates, deposit mobilization efforts and customers confidence on the Bank contributed to the significant growth in deposits during the year. Table-1 Year 2010 2011 2012 Source: Annul report of IFIC Bank (2012) Deposit in 54,660 73,106 92,433 Millions

Deposit (Amount in Millions)

100000
90000 80000

92,433 73,106 54,660

70000 60000 50000 40000

30000 20000

10000 5000

1 (2010)

2 (2011)

3 (2012)

2.12.2 GROWTH IN ADVANCES:

The amount of advance of IFIC Bank is increasing rapidly. In the year 2012 the amount of advance was Tk. 77,160 million which was Tk. 64,641 million in 2010.

Table-2 Year 2010 2011 2012 Taka in Million 47,563 64,641 77,160 Source: Annul report of IFIC Bank (2012)

Advance (Amount in Millions)

90000 80000

77,160 64,641 47,563

70000 60000 50000 40000

30000 20000

10000 5000

1 (2010)

2 (2011)

3 (2012)

2.12.3. Growth in import business:

The import business of IFIC Bank Tk. 80,710 million in the year 2012 that was Tk. 71,517 million in the 2011. The yearly growth of the import business of which are shown in the table 3 as follows:

Year 2010 2011 2012

Taka in Million 62,467 71,517 80,710

Import (Amount in Million)

2010 2011 2012

2.12.4 Growth in Export Business:

The export business of IFIC Bank is in increasing trend. The growth rates in export business from the year 2004 to 2006 are shown in the following tableTable 4 Year 2010 2011 2012 Taka in Million 62,467 71,517 80,710

Export: (Amount in Million)

2010 2011 2012

2.12.5Growth in Net Profit:

IFIC Bank Limited is earning net profit in the increasing trends gradually. From beginning year 2010 into last completion year 2012, The year wise figure of which is mentioned in the following Table 5 and subsequently in the Chart: Table 5 Year 2010 2011 2012 Amount in million Taka 3,167 1,861 1,390 Source : Annul report of IFIC Bank (2012)

2.12.6 Total Assets:

Total assets of the bank recorded during 2000. As on December 31, 2000 total assets of the bank increased to Tk.35721.12 million. Table -6 Year 2011 2012 Taka in million 91,541 113,995 Source : Annul report of IFIC Bank (2012)

2.13 Capital and Reserves:

The bank started with an authorized capital of Tk.100.00 million in 1983. Paid-up capital was then Tk.71.50 million only. Over the last seventeen years, the authorized & paid-up capital has increased substantially. Authorized capital was Tk.500.00 million and the paidup capital stood at Tk.279.35 million as on December 31,2000. The Bank has built up a strong reserve base over the years. In last eighteen years its reserves and surplus have increased significantly. As against Tk.21.20 million only in 1983 reserves and surplus increased to Tk.683.73 million in 2000. This consistent policy of building up reserves has enabled the bank to maintain a better capital adequacy ratio as compared to others. With the active support and guidance from the Government, the bank has been showing a steady and improved performance. In its seventeen years of operations, the bank has earned the status of a leading bank in terms of both business and goodwill.

2.13.1Capital Position of the Bank

Capital A. B. C. Capital Available Capital Adequacy Requirement Excess Capital (A - B) Taka in Million 2028.39 874.73 1153.66

2.13.2Constituents of Capital of IFIC Bank Limited

SI. No. Capital Heads Taka in Million

Core Capital (TIER I) A. B. C. D. E. Paid-up Capital Non-repayable Share premium account Statutory Reserve General Reserve Bonus 406.39 .......... 659.06 27.21 430.34 1523.00

Supplementary Capital (TIER II) H. General Provision (1% of unclassified loans) L. M. Exchange Equalization A/c Sub Total (H to L) CAPITAL AVAILABLE (G+M) 112.08 505.39 2028.39 393.31

2.14 Workforce
Total manpower stood at 1,700 as on December 31,2000. Out of them 1,151 were officers and 549 were non-officer employees. The number of female

employees in the bank on the date was 188.

2.15 Human Resources Development

Skilled and dedicated workforce with creative talents, innovative actions are not always readily available. Appreciating the scarcity of such manpower, the bank from the very beginning laid importance to HRD that conceptually includes activities like: pre-recruitment drill, recruitment, induction, training in the Academy, job rotation, placement & posting, reward and promotion. All these activities are planned by the bank in an integrated way aiming at manpower with required amount of technical, managerial, human and conceptual skills. Management of IFIC Bank not only appreciates the need of skills required for day to day banking but also realizes the need for skills to meet the global & national financial and economic environments that are changing fast. Meeting the needs of new skills arising out of Financial Sector Reforms Program (FSRP) is also a major concern of the management.

The bank, therefore, set up a Division namely HRD Division under a separate Group called Services Group-1. The Academy of the bank works under this group. The other Division, which works under the Services Group-1, is Planning, Research & Statistics Division.

2.16 Information Technology Structure

Present information technology structure of IFIC Bank Ltd. A. B. C. F. G. H Computerized System Computerized Services Future Computerization Local Area Network of a Branch Proposed Metropolitan Area Network of Head office Proposed Wide Area Network of IFIC Bank

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A. Computerized System
Computerized Branches - 44 out of 52 (i.e. 85%) Branches are computerized throughout the country Local Area Network - Seven main Branches (i.e. Motijheel, Federation, Dhanmondi, Gulshan, Moulvi Bazar, Narayanganj & Agrabad) are operating in Local Area Network environment. Six more Branches (i.e. Khulna, Jessore, Rajshahi, Bogra, Sylhet & Khatunganj) out side of Dhaka will be taken under LAN environment very soon. Banking Software - Currently 7 LAN Branches are using BexiBank 4000+ and rest of the 35 Branches are using BexiBank 3000+ for their daily Banking Transaction. Operating System - Most of ific's Branches, which are using BexiBank 3000+, are operating their Computer System in DOS operating system. Branches, which are operating in LAN environment, are using Windows NT or Novell NetWare operating system. Central Backup System - Presently Information Technology & Computer Division of Head Office is maintaining an Offline Central Backup System for all the Computerized branches. B . Computerized Services Tele Banking (Computerized Phone Banking) - The Bank has implemented Computerized Phone Banking technology in 4 Branches (i.e. Motijheel, Federation, Dhanmondi & Gulshan). SWIFT Network - Presently ific's International Division of Head Office is operating their Foreign Trade related transaction through SWIFT Network. Electronic Mail - Six main Branches (i.e. Motijheel, Federation, Gulshan, Dhanmondi, Narayanganj & Agrabad) are using Email facility for international and internal correspondence. In future all AD Branches will be brought under Email facility. Home Banking - The Bank is currently engaged in implementing this new service for Bank's high net-worth selected business clients.

2.16.1 FUTURE COMPUTERIZATION EXPANTION PLAN

Future plan in IT sector of IFIC Bank Ltd. is given below. Inter Branch Connectivity - IFIC's major plan in the IT sector is to ensure Inter Branch Connectivity of selected major Branches (i.e. Motijheel, Federation, Dhanmondi, Gulshan, Moulvi Bazar, Narayanganj & Agrabad) under Wide Area Network (WAN) facility to offer its customers "Any Branch Banking" facility.. Metropolitan Area Network/Head Office Computerization -Network

implementation among Divisions (i.e. Special Project Division, Credit Division etc.) of Head Office is in under consideration.

2.17 International Division

With a view to enhance the Bank's income the Division has also been entrusted with the development of different type of foreign exchange related products & services.

Presently, the Division is well equipped with Bankers and Senior Executives who are also well conversant with ICC 500 and other foreign trade regulations in International Trade

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Practices and Bangladesh Bank Guidelines and Circulars for Foreign Exchange issued from time to time.

The Division is presently headed by a Senior Executive Vice President. The Division has also at it's disposal the vast experience of a Senior Vice President, a First Vice President and a Vice President whose major portion of banking career covered credit general banking and foreign trade related services either in IFIC Bank Ltd. or in their previous institutions. IFIC's International Division is a strong component of it's backbone which at different times has aided in the vertical growth of the institution and with the help of a dedicated, qualified and experienced team of professionals posted there is still contributing positively towards that end.

2.18 Major products / services provided by Authorized Dealer (AD) Branches: Import & export bills:
Opening of export and import letters of credit Advising of letters of credit Negotiation and collection of shipping documents Issuance of guarantees on behalf of ific's foreign correspondents favoring various type of beneficiaries within and outside Bangladesh

Remittance: Issuance (outward) and payment (inward) of telegraphic transfers, Mail transfers, demand drafts, travelers cheques and cash for currencies

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2.19 Organ gram of the Branch

Manager (Vice Precedent)

Assistant Manager (AVP)

G. Banking (SSO)

Foreign Exchange

Credit & Advance (SO)

A/C Opening (SO)

F. Remittance GR-1(1), GR2(2)

Sanction GR-1 (1)

Clearing & Collection GR-1(1), GR-2(2) Cash Dept. GR-1(2), GR-2(5) Comp. Off. (1)

F. Trade (SO)

Recovery SO (1), GR2(1) Establishment & Personnel Dept. GR-2(1)

Export GR-1(1), GR-2(2)

Account Dept. GR-1(1), GR-2(1)

Import GR-1(1), GR-2(2)

Local Remittance Department GR-1, GR-2(2)

Special Deposit & Locker Dept. GR-1(1)

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Bank is a financial intermediary, which mobilizes fund from surplus unit and deploy it to deficit unit. Surplus unit means the people who have surplus money and willingness to save. Deficit unit means the people who need money for industry, trade, business, or for personal use but don't have sufficient money of their own for such purposes. Bank mobilizes the fund by accepting deposits from depositors and allocates the fund by providing loan to borrower. The relationship between a banker and his customer begins with the opening of an account by the banker in the name of the customer. Banker solicits deposits from the public of different walks of life and having different financial status.

3.1Account Opening Section 3.1.1Accepting Deposit

Accepting deposits is one of the main functions of commercial banks. In IFIC Bank various types of account are offered to various customers. A. Demand deposit A/C 1. Current Account 2. Saving Account 3. Short Term Deposit Account 4. Resident foreign currency deposit A/C Foreign (FCAD) Foreign (FCAP) B. Time Deposit A/C 1. Fixed deposit Account 2. Bearer Certificate of Deposit 3. Non-Resident Foreign Currency Account currency Account in pound currency Account in Dollar

CURRENT DEPOSIT ACCOUNT

General Features: a. b. c. Businessmen and companies are the main customers of this product. Bank does not pay any interest to CD Accountholders. There is no restriction on the number and the amount of withdrawals from current account, d. Service charge and incidental charges are recovered from the depositors since the bank makes payments and collect the bills, drafts, cheques, for any number of times daily. e. f. The Banks through current accounts grant the loans and advances In practice account is opened with a minimum balance of TK.5000.

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SAVINGS DEPOSIT ACCOUNT

General Features: a. Individuals for saving purpose open this type of account, b. Interest is paid on this account. IFIC BANK LTD. offers 6.00% rate of interest for SB A/C. c. Generally, banks require a 7-day prior notice if the total amount of withdrawals on any date exceeds Tk. 1000. d. Only two withdrawals are permitted per week. If there are more than two withdrawals are made in a week, no interest will be paid on rest amount for that month, e. Generally householders, individuals and other small-scale savers are the clients of this account f. g. h. i. Minimum Balance of Tk.100 is to be maintained (in practice it is k.1000). Interest will be applied half early on 30th June & 31st December, IFIC Bank gives no interest if the balance is below TK.1000. No service charge as it is an interest bearing account.

RESIDENT FOREIGN CURRENCY DEPOSIT General Features

a. b. A Bangladeshi National can open this type of account. A Bangladeshi National can deposit foreign currency (dollar and
:

pound

sterling)

within 3 month of returning from abroad c. Provided the foreign exchange-

(i) Is not a receipt against export of goods or services from Bangladesh. (ii) Is not a commission due from abroad arising from business in Bangladesh. d. The balance in the account is withdrawal only when the account holder goes

abroad. He can endorse the amount in his passport. Normally bank does not give any interest on this A/C. Foreign currency A/C in dollar (FCAD). Foreign currency A/C in pound sterling (FCAP).

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FOREIGN CURRIENCY A/C General Features:

a. Bangladeshi nationals working and earning abroad other than from Bangladesh sources can open a foreign currency A/C. holder selects a nominee who will operate the A/c on his be half and fills in a nomination form, c. The a/c holder is also required to submit photocopies of passport, work permit /contract. As this is a current a/c no interest is paid. b . The a/c

SPECIAL NOTICE DEPOSIT ACCOUNT (SND)

(Popularly Known as STD) General Features a. b. c. d. e. Customers deposit money for a shorter period of time. These deposits are withdraw able on 7 to 29 days' by the account holder. The interest offered for SND is less than that of savings deposit Interest shall be calculated on daily product basis. In practice, IFIC BANK LTD. offers 5.50% rate of interest (half yearly ;

compounding) for SND account, for Various big companies, corporations, Government Departments .
;

Time Deposit
This branch maintains a separate section for maintaining Time Deposit account. FOR is an important factor for the bank and volume of FDR determines the investment base of the bank. Basically this is the mobilization unit of the Bank. This section deals with the Fixed Deposit account (FOR), Bearer Certificate of Deposit (BCD), and Non-resident Foreign Currency Account.

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Fixed Deposit Receipt (FDR)

General Features:
a. b. This deposits are made with the bank for a fixed period of time. The bank need not to maintain cash reserves against these deposits and therefore, the bank offers high rate of interest on such deposits.

Procedures
a. b. The depositor has to fill an application form In case of a deposit in joint name, IFIC BANK LTD. also takes the instructions regarding payment of money on maturity of the deposit, C.The banker takes the specimen signatures of the depositor(s). d. e. Necessary entries are given on the FDR register. An FDR is then issued to the depositor acknowledging receipt of the sum of money mentioned therein. It also contains the rate of interest & the date on which the deposit will fall due for payment. Usually FDR payment is made on maturity. IFIC Bank calculates interest at each maturity date and provision is made on that "Interest Expense FDR accounts" is debited for the accrued interest. But the Premature Encashment of FDR a. In case of premature FDR, IFIC BANK LTD. allows only saving bank rate interest on FDR. b. Saving bank rate will be minimum 30 days and its multiple, i. e 30,60,90 etc.

Loss of FDR. If the instrument is lost from the possession of the holder, the holder is asked to fulfill the following requirements: a. Party should inform it to the bank immediately; b. Record a GD in the nearest Police Station c. Furnish an Indemnity Bond; d. On fulfilling the above requirements a duplicate FOR is then issued to the customer by the bank.

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Renewal of FDR
a. FDR is automatically renewed within seven days after the date of its maturity if the holder doesn't come to encash the instrument, b. will be for the previously agreed maturity period. Cash A/C ..................................Debit Time deposit- FDR .................Credit Encashment of FDR: (at maturity) Time deposit-FDR .................Debit Interest on FDR A/C ............. Debit Excise duty on FDR............... Credit 10% Income Tax on Interest...Credit Cash A/C ............................... Credit Bank may pay interest to depositor every 6 months or credit the General conditions of governing Current / Savings Account

Renewal

Accounting Entries for FDR: Issue of FDR

Minimum Balance to be maintained in current account Tk.10. 000 /- and in Savings account Tk. 1000/-.

A suitable instruction by an introducer acceptable to the Bank is required prior to opening an account.

Recent photographs of the Account openers duly attested by the Introducer must be produced.

When cheques deposited are payable by other banks or outstation they are available after clearing or collection only. Service charge will be charged @ Tk.100 /- in Current account and Tk.50 /- in Savings account yearly or as charged by the Bank from time to time as and when required.

Interest rate is STD Account - 5.50%. In IFIC Bank, usually customers give an instruction the Bank that their current account will be debited whenever its deposited amount crosses a certain limit and this amount will be transferred to the STD account. So bank should be following the, Short term deposit (STD): a) Bank to Bank -2.50% b) Less then Tk 1.00 crore4.00% c) Tk 1.00 crore and above but less then Tk 5.00 crore 4.50% d) Tk 5.00 crore and above but less then 10.00 crore 5.00% e) Above Tk. 10.00 crore 5.50% instruction by giving entries. Customer's Current A/C Debit. Customer's STD A/C Credit.

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NON-RESIDENT FOREIGN CURRENCY DEPOSIT

Non-resident foreign currency deposits are term deposits maturing after 1 month, 3 months, 6 months, and one year. This a/c's can be opened either in US dollar or pound sterling. No interest is paid in case of premature encashment. The interest rate is fixed as per London interbank offer rate (LIBOR), Provided by head office. The a/c is closed within one year from the date of return of the a/c holder to Bangladesh for taking up permanent resident.

Excise duty
a. As per government rule excise duty is to be charged on accounts, which had minimum balance of TK. 10,0007- as credit balance on any single day of the year. b. c. The excise duty is charged annually or at the products maturity. The slab regarding excise duty: Amount of duty (TK) Slab (TK.) 10,000 Below 10,000 10,00,001 10,00,001 1,00,00,001/5,00,00,000/100,000 10,00,000 1,00,00,000 5,00,00,000 And above Nil 120 250 500 2,500 5,000

.Bearer Certificate of Deposit (BCD):

The objective of BCD is to convert black money into white and to reduce Flundi business. Bearer Certificate of Deposit account is almost same as Fixed Deposit account. But in case of BCD account no name and address are mentioned, the customer opens this type of account as a bearer, any person who bears the BCD receipt can encase it. Another difference of BCD with FDR is that the customer deposits the money deducting the interest. At the maturity he withdraws the total money for which he opened the BCD account.

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Interest rate on BCD account is same as Fixed deposit account,For 3 months @ 6.50% For 6 months @ 8.75% For 1 Year or above @ 9.75%

Accounting treatment in case of issuing of BCD.Cash A/c Debit. BCD A/c Credit.

Accounting treatment in case of encashment of BCD.BCD A/c ......................D Excise Duly on Deposit.. ...Cr. I merest on Tax...............Cr Cash A/C .....................Cr

In a very recent circular f the central Bank i.e. Bangladesh Bank directed all commercial hank's not to open any E 'D Account due to preventive measures and protection of Money Laundering.

BEARER CERTIFICATE OF DEPOSIT (BCD) General Characteristics:

a) No account is needed. b) Premature encashment is not allowed. c) It can be transferred by mere delivery. d) No duplicate is issued. e) Auto renewal is not come into effect. f) Interest is calculated before maturity. g) The customer opens this type of account as a bearer. Whoever presents it to the bank has the right to get the money, h) There is no prescribed interest rate on such funds.

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Accounting Entries for BCD:

Cash A/C ..................................................... Debit BCD A/C ..................................................... Credit (When amount is received) Prepaid interest on BCD .............................. Debit Issue of BCD Interest Payable on BCD ............................. Credit. (Monthly amortization) Interest expenses on BCD ........................... Debit Prepaid interest on BCD............................. Credit Interest payable on BCD ........................... Debit BCD/AC ....................................................Debit On Maturity Cash A/C ...................................................Credit Income tax ................................................. Credit Excise duty ................................................ Credit

Outward Bills for Collection (OBC).

By OBC. we mean that those cheques drawn on other banks which are not within the same clearing house. Officer gives OBC seal on this type of cheques and later sends a letter to the manager of the branch of the same bank located in the branch on which cheque has been drawn. After collection of that bill branch advises the concerned branch in which cheques has been presented to credit the customer account through 'Inter Branch Credit Advice (IBCA).

In absence of the branch of the same bank, officer sends letter to manager of the bank on which the cheques is drawn. That bank will send pay order in the name of the branch. This is the procedure of OBC mechanism.

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3.1.2 Account Opening Procedures

Step- 1 The account should be properly introduced Any one of the following: An existing Current Account holder of the Bank, Officials of the Bank not below the rank of an Assistant officer. person of the locality well known to the

A respectable

Manager /Sub-Manager of the Branch concerned. Step 2 Receiving filled up application in bank's prescribed' form

mentioning what type of account is desired to be opened Step-3 The form is filled up by the applicant himself/ herself Two copies of passport size photographs from individual are taken, in case of firms photographs of all partners are taken Applicants must submit required documents Application must sign specimen signature sheet and give mandate Introducer's signature and accounts number - verified by legal officer Step-4 Step-5 Step-6 Authorized Officer accepts the application Minimum balance is deposited - only cash is accepted Account is opened and a Cheque book and pay-in-slip book is given

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Special Caution must be taken for the following customers The client has to fill up a light red account opening form. In the name of individual Terms and conditions are printed on the back of the form. The In joint name form contains the; declaration, clause, special instructions etc. In this type, the formalities is same as individual account, but in the special instruction clause, either or survivor' or 'former or survivor' clause is marked. A clear authority signed by all the joint A/C holders containing instructions as to who will operate the account and how it will be operated. The mandate should mention the name of the persons authorized to draw check. In case of death /insanity/insolvency of one or more of the joint a/c holders, the authority will cease to operate. Proprietorship: Customer has to submit: The valid Trade License Tax Paying Identification Number (TIN). Declaration of Proprietorship. Mandate if operation by third party A copy of the partnership agreement (partnership deed) Resolution signed by all partners regarding account opening. Photocopy of registration certificate in case of a registered firm. Letter of Partnership signed by all partners in case of nonregistered firm. Photographs attested of those who will operate. Trade license. Mandate as to operation of the account. Account agreement form. Public Limited Company Certificate of Incorporation Copy of Memorandum and Articles of Association Certificate of Commencement of Business

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 List of directors duly certified by Chairmen Copy of Resolution of the Board of Directors Private Limited Company Certificate of Commencement is not necessary Certificate of Incorporation Copy of Memorandum and Articles of Association Copy of Resolution of the Board of Directors. Non-trading Concern (Societies Clubs, Association) Registration Certificate under the Societies Registration Act, 1962 Certified copy of Bylaws & Regulations/ Constitution. Certified copy of Resolution for opening and operation of account. Power of attorney to borrow Joint account in the name of minor : A minor cannot open an account in his own name due to the incapacity to enter into a contract. He can open an account in IFIC BANK LTD. in joint name of another person who will be guardian of him.

3.1.3 Issue of Pay In-Slip and Cheque book

An account holder can get a fresh cheque book only against requisition on the prescribed requisition slip attached with the cheque book issued earlier, after proper verification of the signature of the account holder. A new cheque book should be delivered to the account holder or his duly authorized representative. Cheque book issuing process : Filled up requisition slip along with cheque book number Verification of the slip Issuance of new cheque book

Giving entry of the new cheque book number in the register Flow Chart : Cheque Book Issue Process

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When Cheque Book Is Lost

Duplicate checkbook is issued only when an A/C holder applies to the Bank with a Letter of Indemnity in the prescribed Pro-forma agreeing to indemnify the Bank for the lost checkbook. Fresh check Book is then 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. Cheque series number of the new checkbook is recorded in the register. Series number of lost checkbook should be recorded in the stop payment register and caution should be exercised to guard against fraudulent payment. 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).

3.1.5 Closing of Account

The closing of an account may happen, If the customer is desirous to close the account If Garnishee Order is issued by the court on IFIC BANK LTD.. To close the account, the If IFIC Bank finds that the account is inoperative for a long duration.'

cheque book is to be returned to the bank. IFIC Bank takes all the charges by debiting the account and the remaining balance is then paid to the customer. Necessary entries are given to the account closing register and computer.

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Table-3.1 Revision of Interest Rates on Different Types of Deposits (With effect from 01 December, 2001)
Types of Deposits Savings Bank Deposit Short term Deposit (STD) Revised Interest Rate 6.00% 5.50%

Source-Circular # Graph 3Deposit Mix of the Branch Presently 5 (Five) Products/Services have already been launched in the market. A. B. C. D. E. Pension Saving Scheme (PSS) Monthly Income Scheme (MIS) Tele Banking/Tele Link Death Risk Benefit Scheme (DRBS) ATM Services

A. Pension Saving Scheme (PSS) 1. 2. Name of the Scheme Delivery Points Duration of the Account Monthly Installments : Pension saving Scheme : 52 Branches : 5 (Five) years & 10 (Ten) Years : Tk. 100 or Tk. 300 or Tk. 500 or Tk. 1000

Eligibility for PSS Account

A person of 18 years of age and above having a sound mind will be eligible to open an account in his/her own name.

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Bonus Payment
From the account holder, from commencement to maturity of term, pays all the monthly installments in time (i.e. within 10th day of each month) and never defaults in paying monthly installments, the account holder will receive extra bonus payment equivalent to 5 (five) times of monthly installment for 5 years term and 10 (ten) times of monthly installment for 10 years term.

Income Tax Rebate

Under this Scheme, income tax rebate will be available on the total amount payable i.e. after maturity of deposited amount, such amount will also be income tax free. Monthly installments to PSS will also qualify for showing as investments (like provident fund) in yearly Income Tax Return.

Payment of Pension
One can receive the entire deposited amount with interest at a time or receive a pension on monthly basis at a desirable amount of monthly installments.

B. Monthly Income Scheme (MIS)

1. 2. Name of the Scheme Delivery Points Duration of the Account : Monthly Income Scheme : 65 Branches : 5 (Five) years (Deposited principal amount will be returned on maturity) : Tk. 50000/=and its multiple : Tk. 450/= and its multiple

Amount to be Deposited Payment After Maturity

Procedures for paying monthly income:

The payment of monthly income will start from the subsequent month after a clear minimum gap of 1 (one) month from the date of deposit. If an account is opened on 7th of any month, monthly income will be paid on 7th of the subsequent month. The account holder will receive monthly income in any SB/CD account of same name maintained with the branch. In case, the account holder does not have any SB/CD account with the Branch, he/she/they will have to open a SB/CD account for receiving the monthly income. The minimum balance requirement will be waived for these types of accounts for a new customer. However, a minimum initial deposit of Tk.500/- will have to be deposited. This procedure will eliminate the hassle of coming to the Bank Branch for taking interest every month.

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Eligibility for Monthly Income Scheme:

A person of 18 years of age and above having a sound mind will be eligible to open an account in his/her own name. A person can open more than one account in his/her/their name in the same Branch or any Branch of the Bank.

C . Tele Link/Tele Banking

1. 2. Name of the Scheme Delivery Points : Tele Link or Tele Banking Branches Phone Banking is a fast convenient and easy to use service that will complement one's lifestyle and keep one in complete control of his banking. One can access all the Telelink services at any time, day or night, from anywhere. It is far more convenient than traditional banking. Telelink is really simple to use. One can just dial IFIC's phone number from anywhere and an automated computerized voice response will guide him step by steps through his transactions. II : Gulshan, Federation, Dhanmondi, Motijheel

Confidentiality:
A customer is given a 6 digit Registration Number when he applies for Telelink that will ensure total confidentiality of his account information. When the customer chooses to obtain specific information about his account, he will have to use his Registration Number and the confidential Personal Identification Number (PIN) by pressing the number keys on his phone.

Banking Services Supported by Telelink

A. B. Transactions Relating to transfer of funds from one account to another Inquiries relating to account balances transaction details exchange rates interest rate information products and services remittances

C. Requests for

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balance certificates account statement 7-days withdrawal notice on accounts cheque books/pay order/drafts renewing or opening of fixed deposits assistance for opening other accounts

In addition, the service can also deal with lost cheque books and credit cards, change of address and stopping of payment. Fees: We are not charging any fees for this technical service but the facility has been offered to Saving Bank customers with a minimum balance of Tk. 50,000-, to Current Deposit Account customers and STD customers with a minimum balance of Tk.100,000/-.

D . Death Risk Benefit Scheme (DRBS)

1. Name of the Scheme : : Death Risk Benefit Scheme 110 Branches 2. Delivery Points

IFIC Bank's Death Risk Benefit Scheme offers its Savings Bank Account holders' interest on savings, a lump sum amount and some peace of mind - a three in one benefits at no extra cost!

Benefits of Scheme
Death Risk benefits in lump sum amount to nominee(s)/heir(s) on the death of an account holder.

Eligibility Criteria
Account must be maintained for a period of minimum one-year before the death of the account holder. At the time of death, the customer must have been within the age group years. The account must have been opened with a minimum deposit of Tk. 5000 in case of new accounts. . Average balance of Tk.10,000 minimum must be maintained within one-year period prior to the death of the Account Holder. of 18 to 50

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Extent of Benefit
50% of the average balance of the account for one-year period prior to the death of the account holder or Tk. 100,000 whichever is lower. Account balance exceeding Tk.10,00,000 will not be taken into consideration

while calculating average balance for one year for the purpose of Death Risk Benefit.

3.2 Local Remittance Section

IFIC BANK LTD. has its branches in the major cities of the country and therefore, it serves as one of the best media for remittance of funds from one place to another. This service is available to both customers and non-customers of the bank. Major workings of this department: The following works are done in this department Issuing & Payment of Demand Draft. All related correspondence with other Branches & Banks Compliance of Audit & Inspection Balance of L.D. payable & L.D. Paid with advice Payment of Incoming TT. Issuing, encashment of Pay Order and maintenance of record and proof sheet. Issuance of Local Drafts Issuing and encashment of BCD. All related correspondences. Issuing of Outgoing TT. Issuance of T.T. ICA, IBCA& IBDA.

Sending money from one place to another place for the customer is an important service of banks. And this service is an important part of country's payment system. For this service people, especially businessmen can transfer funds from one place to another place very quickly. Remittance of fund from one place to another may be made by any one of the following methods. 1. 2. 3. Demand Draft (L.D.) Telegraphic Transfer (T.T.) Pay order (P.O.)

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3.2.1 Demand Draft (LD)

Demand Draft (LD) is an instruction payable on demand. It is a negotiable instrument issued by the branch of a bank containing an order to another branch of the same bank to pay a fixed sum of money to a certain person or order on demand. This instrument can be purchased by a customer from a particular bank branch for himself or for beneficiary and can be handed over to the purchaser for delivery to the beneficiary. The payee or beneficiary will claim the amount of money in the instrument by producing the same to the paying branch. Demand Draft may be paid in cash to the payee on proper identification or the amount may be credited to his account (in case of A/C holder of the bank). Banks issue drafts for a nominal commission. The commission depends upon the amount to be transmitted. The purchaser of the DD needs not to be a customer or account holder of the bank.

Application submitted to branch

Issuing Branch prepares DD

Branch gives DD To purchaser

Paying Branch pays the amount

Payees presents DD to branch Flow Chart for a DD

Purchaser sends DD to payee

Demandl Draft Issuing Process:

Customer is supplied with DD form. Get the Application form properly filled up and signed by the applicant. The banker will Complete the lower portion of the Application Form meant for Bank's use. Calculate the total Taka amount payable including Bank's commission /charges etc. The customer may pay in cash or by debiting the LD amount from his/her account (if any). The Teller, after processing the Application Form, Cash, or Check, will validate the Application form.

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The first copy of the Application form is treated as Debit Ticket while the second copy is treated as Credit Ticket and sent to Remittance Department for further processing. The third copy is handed over to the Applicant as customer's copy. Accounting Treatment: Sale of instrument: Cash/Party A/C .........................................................Debit IFIC Bank General A/C..............................................Credit Income A/C Commission ...........................................Credit Postage ........................................................................Credit Then Prepare an I.B.C.A. (Inter branch Credit Advice) and send to the drawee branch. Demand Draft Issue Register: The Remittance Department maintains a DD Issue Register. After furnishing all the required information, entry of the DD is given in the DD issue register. All the required particulars of all DDs issued should be entered in that Register duly authenticated and at same time bank issue a DD confirmation slip addressing the drawee branch. This confirmation slip is entered into the DD advice issue register and a number is put on the confirmation slip from the same register. Later on the bank mails this slip to the drawee branch.

Separate folios are opened for each Drawee Branch. While issuing local Drafts of TK.50, OOO/- and above, branches shall put a test number in RED INK on the upper portion of the drafts so that the Drawee branch can immediately make payment of the L.D on presentation after getting the Test agreed, if otherwise found in order.

Issue of Duplicate Draft: Some cases, it may happen that the DD is lost and reported to the concerned branches. Normally Duplicate DD is not issued unless satisfactory evidence is produced regarding loss of a draft. If the LDD is reported lost/stolen, a duplicate draft may be issued by the Issuing branch on receipt of a written request from the purchaser.

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Before issuing a duplicate DD the branch should observe the following:

On receipt of written information from the purchaser of a draft that the DD has been lost then the banker first Verify the Purchaser's signature on the request letter from the signature appearing on the original application form.

Then immediately issue a stop payment instruction to the Drawee branch Inform the Head Office and obtain confirmation of non-payment of the D.D. After the Drawee branch has acknowledged the stop payment order and confirmed that the local draft in acquisition remains unpaid.

The Issuing branch should obtain an Indemnity Bond from the purchaser duly signed by him. The branch will thereafter write to head office for their approval to issue a Duplicate draft. The Head Office on receipt of request from the issuing branch will immediately issue a caution circular to all the branches regarding the loss of the Demand draft asking them to record stop payment.

The Head Office will thereafter issue clearance to the Issuing branch for issuing a Duplicate draft in lieu of original reported lost. On receipt of clearance from Head Office, the issuing branch will issue a completely fresh draft marking clearly the words duplicate issued in lieu of original draft no.... dated ... in bold letters on the top of the front page of the draft.

Cancellation of Demand draft

On receipt of application along with the DD from the purchaser the banker must do the following things: The signature of the purchaser will have to be verified from the original application form on record. Manager /Sub -Manager's prior permission is to be obtained before refunding the amount on cancellation. Prescribed cancellation charge is to be recovered from the applicant. The DD must be cancelled with red ink. The original entries are to be reversed giving proper narration. An IBDA for the cancelled D.D should be issued on the Drawee branch. Cancellation of the Demand Draft should also be recorded in the D.D Issue Register.

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DD Payment: 1. On receipt of Credit Advice (IBCA) from the Issuing branch the following responding entries are then be passed by the Drawee branch. IFIC Bank General A/C ............................................................Debit Remittance Awaiting Disposal L.D payable A/c .....................Credit 2. When an D.D. is presented for payment at the paying branch the following things are to be carefully examined: a) b) c) Whether the draft is drawn on their branch? Whether the draft is crossed or not? Two authorized officials of the Issuing branch must have signed the draft. Their signatures are to be verified from specimen signature book let to be sure that the draft is genuine. d) Endorsement on the back of the draft must be regular in case the draft is presented through clearing. e) The payee is to be properly identified in case of cash payment.

The particulars of the draft i.e. the draft number date amount and the name of payee, should be verified from the D.D payable Register.

3.

On

payment

the

DD

is

affixed

with

the

branches

Paid

stamp

and

signatures there on are cancelled with red ink. The date of payment is recorded in the D.D payable Register. Necessary accounting entries are also passed and recorded in the books of Accounts.

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Accounting entries: With lBCA: Remittance Awaiting Disposal L.D payable A/C...................Debit Client's Account/Teller's Cash ...............................................Credit Without IBCA A. DD paid without Advice A/C ...........................................Debit Client's a/c/Teller's Cash ..................................................Credit B. After receiving the IBCA i. IFIC Bank General A/C ..............................................Debit Remittances Awaiting Disposal - DD payable A/C .....Credit ii. Remittances Awaiting Disposal - DD payable A/C ........Debit

DD Paid without Advice A/C .....................................................Credit

3.2.2 Telegraphic Transfer (T.T.)

It is an order from the Issuing branch to the drawee Bank /Branch for payment of a certain sum of money to the beneficiary. Telex/ Telegram sends the payment instruction and funds are paid to the beneficiary through his account maintained with the drawee branch or through a pay order if no a/c is maintained with the drawee branch. Commission: Tk.25 ,TELEX charge tk 30

T.T. issuing process:

The customer is supplied with T.T. form. The applicants fill up the relevant part of the prescribed Application from and give it to the remittance department. Remittance Department will fill up the commission part meant for bank's use. The applicant is requested to deposit necessary cash or check at the Teller's Counter. The Teller after processing the application form, Cash or check will validate the Application form. The first copy is treated as Debit Ticket while the second copy is treated as Credit Ticket and sent to Remittance Department for further processing. The third copy is handed over to the applicant as customer's copy. Remittance Department will prepare the Telex/Telegram in appropriate form, sign it, and send it to the telex Operator.

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 Debit Advice is sent to the client if client's a/c is debited for the amount of T.T. Debit ticket is used to debit the client's account if necessary. T.T. Confirmation Advice is sent to the Drawee Branch. Credit Ticket (2nd copy of the Application Form) is used to credit the IFIC BANK LTD. General Accounts.

Accounting entry:
Cash /client's A/C ....................................................Debit IFIC BANK LTD. General A/C ...............................Credit Communication (TELEX/Postage Charge) .....................Credit Commission ......................................................................Credit

T.T. Payment
When a TT arrives through telex it is sent to the respected officer for the verification of the test number. If the test number is OK, the officer writes down "Test Agreed" on it and signs it. Otherwise a message is sent back to the issuing branch for the correction of the test number. On receipt of T.T. payment Instructions the following entries are passed by the Drawee branch IFIC BANK LTD. General A/C..................................Debit Remittance Awaiting Disposal- T.T. Payable A/C ..........Credit Remittances Awaiting Disposal -T.T. Payable A/C ........Debit

Client's Account /P.O. A/C ..............................................Credit In case the beneficiary does not maintain any a/c with the Drawee branch a P.O is issued in favor of the payee and sent to his banker/local address as the case may be. Every branch maintains a prescribed T.T. Payable Register. All the particulars of T.T.s are to be properly recorded in this Register duly authenticated. A separate type of T.T. confirmatory advice is sent to the Drawee branch on the same day. On receipt of the T.T. Confirmatory advice/ confirmation copy of Telegram from the Issuing branch, the particulars of the T.T. are verified with reference to particulars already recorded in the T.T. payable Register.

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The Confirmatory advises are kept attached with the relative Ticket No further responding entry is required to be passed on receipt of such confirmation copy.

On payment of T.T. the particulars are to be incorporated in the Extracts of Responding Debit entries as usual and sent to H/O.

3.2.3 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 along with the original pay order,

2. 3.

The signature of the purchaser will have to be verified. Manager/ Sub-manager's prior permission is to be obtained before refunding the amount.

4. 5.

Cancellation charge is recovered from the applicant. The pay order should be affixed with a stamp "cancelled" under proper authentication and the pay order should also be cancelled with RED ink.

6. 7.

The original entries are to be reversed with proper narration. Cancellation of the pay Order should also be recorded in the pay order Issue Register.

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Issue Of Duplicate Pay Order

If the pay order is lost and it is reported accordingly, a duplicate draft may be issued by the Issuing branch on receipt of a written request from the purchase. But before issuing a duplicate the must look the following things; The immediately 'stop payment' against the lost pay order in his books of records. Inform the head office for circulation about the lost pay order and seek permission for issuance of duplicate pay order. Indemnity bond to be obtained from the purchaser. While duplicate is issued, then in the pay order it is to be written in bold letter that "Duplicate issued in lieu of the original".

3.3 Collection & Clearing Section

Checks, drafts etc. are drawn on another Bank or a branch of IFIC BANK LTD. which is located outside clearing house are sent for collection. In case of out ward bills for collection customers account is credited after finishing the collection process. And in case of in ward bills customers account is debited for this purpose. So it plays dual role as i) ii) Collecting Banker Paying Banker. :

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Collection is done, If* The bill is drawn on a branch of IFIC BANK LTD. Bills arc sent to that branch through mail or courier. Bills arc sent to that branch through mail or courier. Bills arc sent to that branch through mail or courier.

If the bill is drawn on another Bank and there is a branch of IFIC Bank Ltd. Branch collects the bills and sends an IBCA to this Br. Request them to send the process by 1BCA and collect the bill That branch of IFIC BANK LTD. can collect the through clearing house

* If the bill is drawn on another Bank but there is no branch of IFIC Bank

The bill is directly sent to that Bank.

By an OBC schedule requested them to send a draft in favor of this Bank.

That Bank sends a Demand Draft mentioning the Paying Bank

Then the bill is collected through clearing house process.

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Procedures for outward bills for collection :

Depositing the cheek along with deposit -slip

Crossing of the chouse are done indicating Gulshan branch as collecting bank

Endorsement Payees A/C will be credited on realization is given

Entries are given in the Outward Clearing Register

OBC Meachism Commission for collection:

Up to 1 lac ....................................... 0.15% Above 1 lac ........................................ 0.10% Above 5 lac ........................................ 0.05% Maximum charge is Tk. 1200 and minimum charge is tk. 10.

Accounting Entries: As collecting Bank :

Customers A/C .............................. Debit IFIC Bank General A/C ..................... Credit Collection Charge ............................... Credit As Paying Bank : IFIC Bank Ltd. General A/C ................... Debit Customers A/C .............................. Credit

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Collection with other Banks situated outside Dhaka City

As collecting Bank:
Deposit awaiting disposal (DAD) ....................Debit. IFIC BANK LTD. General A/C........................Credit

As Paying Bank
IFIC BANK LTD. General A/C...............................Debit Customer's A/C ........................................................Credit. In this case the collecting Bank creates contra liability. So, the accounting treatment is Customer's liabilities-Bill for collection (local) .................................Debit Banker's liability-Bill for collection (local) ........................................Credit

3.3 Clearing
IFIC Bank Ltd. Bank is a scheduled 1972, Bank. the According which to are the the Article member 37(2) of of the Bangladesh Order, banks

clearinghouse are called as Scheduled Banks. The scheduled banks clear the cheque drawn by upon the one central another bank through where the clearinghouse. the This is of an the

arrangement

everyday

representative

member banks gathers to clear the cheque. The place where the banks meet and settle their dues is called the Clearing-House.

The clearing house sits for twice in a working day. The members submit the claimable cheque in the respective desk of the banks and vice versa. So, instruments are exchanged over there.

On receipt of the instruments, the same are indorsed here. Then clearing section will sent IBDA to head office for clearing purpose and on receipt of IBCA from head office the amount is credited to customer account and vice versa. If the instrument is returned then the same is given back to the customer.

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Accounting Entries
For inward instrument: Customer A/C...........................................Debit IFIC Bank General A/C...........................Credit

In case of return:
IFIC Bank General A/C............................Debit Customer A/C..........................................Credit

For outward instrument:

IFIC Bank General A/C.............................Debit Customer A/C............................................Credit

In case of return:
Customer A/C..............................................Debit IFIC Bank General A/C..............................Credit For the following reasons Instruments are usually returned, Account closed Insufficient fund Not arranged for Payment stopped Refer to drawer Effects not cleared may be presented again Amount in words and figures differs Drawer's signature differs Not drawn on us Alteration required drawers full signature Clearing house stamp missing, etc. If the check is dishonored due to insufficiency of funds, IFIC Bank charges TK.50/= as penalty.

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3.4 Cash Section

The cash department deals with all types of negotiable instruments, cash, and other instruments and treated as a sensitive section of the bank.

Receipt Of Cash
01. Pay-in-Slip or Credit Voucher filled in by the customer or department is given to the cash counter for depositing cash. 02. Cash Receiving Officer shall check the title of account, its number, amount in words and figure in the Pay-in-slip and Credit Voucher. 03. After receiving the cash, Receiving Officer will record the denominations of the currency on the back of the voucher and enter the particulars in the Cash Receiving Book under progressive serial number. He will put his signature affixing the date stamp both in counter folio and Pay-in-Slip/ voucher and he will pass on the same along with the Register to the Officer-in-charge of Cash Department for his signature. 04. Officer-in-charge of Cash Department detaches Pay-in-Slip from the counter folio and returns it along with the Register to Receiving Officer and retains the Pay-in-Slip/ Credit Voucher. 05. Officer-in-Charge will send the Pay-in-Slip to the Deposit Department and Credit Vouchers to the respective department to which it relates. 06. 07. Manager or Authorized Officer will check and sign the book at cash closing time. Receiving Officer totals the amounts entered in the Cash Receiving Book at the close of the business and he is agreed with the total of actual cash received.

CASH RECEIPT AFTER BANKING HOURS

01. 02. 03. Cash receipt later or in the evening shift is taken in the next day's date. Procedure for receipt in same as explained in the fore going paragraphs. Cash so received and balanced are put separately in the safe the strong room.

Cash Payment
Cash payment of different instruments is made in the cash section. Procedure of cash payment against cheque is discussed under elaborately.

Cash payment of cheque includes few steps.

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 First of all the client comes to the counter with the cheque and gives it to the officer in charge. The officer checks whether there are two signatures on the back of the cheque and checks his balance in the computer. 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 and writes the denomination on the back of the cheque. Cash paid seal is given on the cheque and make entry in the payment register.

Check list 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.

In other cases
01. 02. 03. 04. 05. 06. 07. The instruments are checked for any apparent discrepancy, posting and cancellation. Signature of the bearer is obtained on the reverse of the instrument. Cash is paid to the bearer of the instrument. Stamp is affixed on the face of the instrument and signed by the Paying Officer. Particulars of the instrument are entered in Paying Cash Book. Paid instruments kept with the Paying Officer. At the close of business, the amounts entered in the Paying Cash Book are totaled. The total is agreed with the amount paid. 08. 09. The total is written in words and figures. The Officer in charge of Deposit Department checks the entries to ascertain that the payment has been correctly made and realizes the instrument from the Payment Register by his initial against his all entry. 10. The Officer-in-charge also checks and signs the book.

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11.

After the cash is checked as explained herein before the instruments are sent to the Deposits and Accounts Department as the case maybe. Cheques are received by the Deposit in charge and other instruments by Account Incharge.

12.

Instruments returned unpaid by the various departments are received by the Paying Cash Officer attached with Memorandum duly entered in the Register.

13.

The particulars of the instrument are compared with those in the Register and Memorandum.

14.

Entries in the Register are initialed by the officer and the Register is returned to the department concerned.

15.

The instruments is returned to the bearer of the instruments.

PAYMENT OF CASH AFTER BANKING HOURS

01. The practice of payment of instrument after banking hours is to be exercised very sparingly and only in case of very good customers. 02. The instrument is posted in the Ledger Book in the next day's date and cancelled as usual before payment is made. 03. Payment is made only to the drawer in case of cheques or the 1st payee in case of Demand Draft, Telegraphic Report etc.

Cash Balance Calculation

The officer in charge of cash section does this calculation 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.

Receipt of check, draft, pay order for clearing and collection

If an instrument (check, draft, pay-order) drawn on a bank located with in the clearing house is deposited then the Teller uses the seal" Received for clearing " and provides special endorsement so that no bank other than IFIC BANK LTD., Gulshan branch can encase the instrument.

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If an instrument (Check, draft, pay-order) drawn one bank located outside the learning house is deposited, the Teller uses the seal "Received for collection".

3.5 Accounts Section

Accounts section is called as financial control center of a bank. In banking business, transactions are done every those to be recorded properly and systematically as the banks deal with money. Improper recording of transaction will lead to the mismatch in the debit side and the credit side. To avoid these mishaps, the bank provides a separate department, whose function is to check the mistake in passing voucher on wrong entries or fraud or forgery. This department is called Accounts section.

Workings Of This Department:

Overall supervision of ACCOUNTS SECTION. Passing all Expenses Vouchers. Maintenance of client's Confirmation Certificate. Dealing with the public issue of Shares including Lottery Tickets. Compliance of Audit & Inspection and consolidation of Audit report & timely Submission. Maintenance of Personnel Files, up dating of leaves records. Maintenance of Salary Cards. Maintenance of IFIC BANK LTD., dividend warrants Record. Preparation of Extract. Checking of Transaction List. Checking of Vouchers & maintenance of related Registrar. Filling and distribution of daily Computer Reports. Preparation of months, quarterly, half-yearly Account Statements. Monthly amortization voucher, voucher preparing/posting/checking and responding Inter-Branch Entries. Preparation of Salary. Depreciation Record in Assets Cards. Petty Cash. Transfer Items. accounts statements including Balance

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The bank has to prepare some internal statements as well as some statutory statements which to be submitted to the central bank. Accounts Department prepares these statements also. The department has to submit some statements to the Head office, which is also consolidated by the Head Office later on. The tasks of the department may be seen in two different angles:

A. DAILY WORK
Posting the transactions in the computer. Daily transaction listing. End of the day trial balance of the branch. Preparing the daily Statement of Affairs. General Ledger and Subsidiary Ledger as per day. Making payment of all the expenses of the branch. Recording inters branch fund transfer and providing accounting treatment in this regard. Checking whether all the vouchers are correctly passed to ensure the conformity with the 'Activity Report', if otherwise making it correct by calling the respective official to rectify the voucher. Recording of the vouchers in the Voucher Register. Packing of the correct vouchers according to the debit voucher and the credit voucher. Posting in the Transfer Register. Posting in the Clearing Register.

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B. Periodical Work 1.
2. 3. Preparing the monthly salary statements for the employees. Publishing the basic data of the branch. Preparing the weekly position for the branch which is sent to the Head Office to maintain Cash Reserve Requirement (C.R.R) 4. Preparing the monthly position for the branch which is sent to the Head Office to maintain Statutory Liquidity Requirement (S.L.R) 5. Preparing the weekly position for the branch comprising of the break up of sector wise deposit, credit etc. 6. Preparing the weekly position for the branch comprising of denomination wise statement of cash in tills. 7. Preparing the budget for the branch by fixing the target regarding profit and deposit so as to take necessary steps to generate and mobilize deposit. 8. Preparing an 'Extract' which is a summary of all the transactions of the Head Office account with the branch to reconcile all the transactions held among the accounts of all the branches.

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Extract
The following things are done in this part of Accounts Section: (i) (ii) (iii) Preparation of extract, Checking of transaction list, Checking of voucher and Maintenance of related register.

Preparing an 'Extract1 which is summary of all the transaction of the Head Office A/C with the branch to reconcile all the transactions held among the accounts of all the branches through inter-branch and credit advise (IBCA) and inter-branch debit advise (IBDA).

Following extracts are generally done:

a) b) Originating (Influence of IBCA/IBDA) Responding (Receiving of IBCA/IBDA)

3.6 Locker Service

IFIC Bank Gulshan Branch has facilitated individuals with its locker service. Through this service a relationship is made where the banker is a Licensor and the party as a Licensee. The party can keep his/her valuables in the locker. Gulshan branch offers three size of locker cell for to be rented. Features Clients have to apply in prescribed form for hiring a locker. It can be operated singly or jointly. Lockers are allotted in yearly basis. Banker has no right to know about the items kept in the locker. Licensee shall not keep any illegal/destructive items. Banker won't be liable for any loss/damage as a result of theft, dacoity, fire etc. Bank has the right to practice general lien on locker items (as the rent is overdue for a long period)

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