Internship Report On "General Banking & Foreign Exchange Activities of BASIC Bank Limited: A Study On Dilkusha Corporate Brunch

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P Pa ar rt t O On ne e
P Pr re ef fa at to or ry y P Pa ar rt t

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I In nt te er rn ns sh hi ip p R Re ep po or rt t
O On n
General Banking & Foreign Exchange Activities of
BASIC Bank Limited: A Study on Dilkusha
Corporate Brunch

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T Th hi is s R Re ep po or rt t i is s d de ed di ic ca at te ed d t to o M My y H Ho on no or ra ab bl le e S Su up pe er rv vi is so or r
Professor M. Mokarrom Hossain
And
My beloved Younger Brother
Late Md. Rakib Uddin

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I In nt te er rn ns sh hi ip p R Re ep po or rt t
O On n
General Banking & Foreign Exchange Activities of BASIC Bank Limited:
A study on Dilkusha Corporate Brunch

Supervised by:
Department of Business Administration
Faculty of Business & Economics
Daffodil International University

Prepared By:
Md. Rayhan Uddin
Id: 101-11-1471
Batch: 25th
Major in Accounting

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Date of Submission: 24.06.2013

Acknowledgement

The successful accomplishment of this report is the outcome of the contribution of a number
of people to whom I am grateful and thanked them from the very deep of my heart. At the
beginning, I would like to express my sincere gratefulness to Almighty Allah for enabling me
to prepare this report in complete form.
I would like to express my special gratitude to my honorable supervisor Prof. M. Mokarrom
Hossain, Faculty of Business & Economics, for providing me much needed suggestions to
prepare this report. His inspiration, kind direction helped me in building courage and
confidence to face the practical situations.
I express my sincere indebtedness to Mr. Abul Kalam Azad, Deputy General Manager
BASIC Bank limited, Dilkusha Corporate Branch, for his kind co-operation and guidance.
The members of BASIC Bank Limited management were very co-operative and helpful.
They helped me by providing various data, guidance and direction.

Thanks to all those persons who helped by providing information and their necessary
materials.

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Letter of Transmittal

,2013
To
Subject: Submission of Internship Report.

Sir,
It is a great pleasure to submit my internship report on General Banking & Foreign
Exchange Activities of BASIC Bank Limited: A study on Dilkusha Corporate Brunch.
The whole report is based on my academic knowledge of BBA program and practical
experience gained during internship. I tried my best to prepare the report. If any further
clarification required regarding my report, I will gratefully respond to any clarification
required.
Finally, I would like to thank you for kind guidance and help. I hope and pray that you would
be kind enough to accept the report and oblige thereby.

Sincerely Yours

Md. Rayhan Uddin
ID: 101-11-1471
BBA 25
th
Batch
Major in Accounting

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Letter of Acceptance

This is to certify Md. Rayhan Uddin, ID: 101-11-1471 has prepared this internship report
entitled General Banking & Foreign Exchange Activities of BASIC Bank Limited at
Dilkusha Corporate branch, under my supervision & guidance, I do here by approve the style
& content of this internship report. This is for the partial fulfillment of four year graduation
degree of BBA, Major in Accounting, Daffodil International University.

I wish his ever success in life.

....
Prof. M. Mokarrom Hossain
Internship Supervisor
Department of BBA

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DECLARATION

I solemnly declare that this Internship Report is the outcome of original project work written
in my own Language and it is not the replica of any other student. It has been submitted for
the partial fulfillment of the requirements of the degree of Bachelor of Business
Administration (BBA) under the guidance of honorable supervisor, Professor M. Mokarrom
Hossain, Faculty of Business& Economics, Daffodil International University, Bangladesh. It
has not been submitted to any other University or Institution for any degree.

.
Md. Rayhan Uddin
ID: 101-11-1471

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Executive Summary

The internship is designed to bridge the gap between the theoretical knowledge and real life
experience which is a part of Bachelor of Business Administration (BBA) program. It is
designed to have a practical experience while passing through the theoretical understanding.
The report is a combination of three months internship program with BASIC Bank Limited.
The report is about General Banking & Foreign Exchange Operation of BASIC Bank
Limited
The introduction part of this report emphasizes the background, objective, scope,
methodology, data analysis and limitations of the report. The report is descriptive in nature.
Overview of BBL includes Objective, business policy, function, and shareholding structure,
board of directors, management committee and continued activities of BASIC Bank Ltd.

Theoretical aspect of this report is general banking of BASIC Bank Ltd. Analysis and
findings part I have analyzed the general banking of BASIC Bank Ltd on the basis of my
experience and observation (which I have got through my internship program).

Usually, the general banking system is very lengthy in BASIC Bank Ltd. All the process
goes through internal meetings and long discussion. I made some recommendations on
general banking of BASIC Bank Ltd.

.

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TABLE OF CONTENT
Part One
Prefatory Part
PAGE
NUMBER

Title Page
2

Dedication
3

Preface
4

Acknowledgement
5

Letter of Transmittal
6

Letter of Acceptance
7

Declaration
8

Executive Summery
9

Table of Contents
10

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List of Tables
16

Part Two
Report Body
I ntroduction
PAGE
NUMBER
Chapter One
Introductory Part

1.1
Rationale of the study

1.2
Objective of the study

1.2.1
General objective

1.2.2
Specific objective

1.3
Methodology of the study

1.3.1
Sources of information and
data

1.3.2
Period Covered

1.3.3
The process of application of
the techniques and reason

1.4
Limitation of the Study

Chapter Two
Organizational Profile of
BASIC Bank Ltd

2.1
Background

2.1.1
Capital structure and ratios

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2.1.2
At a Glance of BASIC Bank
Limited

2.2
Organizational Goal

2.3
Organizational Structure

2.3.1
Board of Director

2.3.2
Management

2.4
Customer Service

2.5
Return on Equity of BASIC

2.6
Technology of BASIC

2.7
Risk management

2.8
Information and location

2.9
At a Glance of BASIC Bank
Limited Dilkusha Branch

Chapter 3
General Banking Activities of
BASIC Bank Ltd

3.1
GENERAL BANKING

3.2
ACCOUNTS OPENING
SECTION

3.3
COMMON FORMALITIES
REQUIRED FOR EVERY
ACCOUNT

3.4
Issuing Cheque Book

3.5
Account Enquiry

3.6
Transfer of an Account

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3.7
Closing of an Account

3.8
FIXED DEPOSIT RECEIPT
(FDR)

3.8.1
FDR Account

3.8.2
Renewal of FDR

3.8.3
Loss of FDR

3.9
SANCHAYAPATRA

3.10
LOCKER SERVICE

3.11
LOCAL REMITTANCE
SECTION

3.12
PAY ORDER (PO)

3.13
DEMAND DRAFT (DD)

3.14
TELEGRAPHIC TRANSFER (TT)

3.15
CALL DEPOST RECEIPT (CDR)

3.16
COLLECTION AND CLEARING
SECTION

3.17
Types of Bills for Collection

3.18
Types of cheques for
clearing

3.19
CASH SECTION

3.21
ACCOUNTS SECTION

Chapter 4
Foreign Exchange Activities
of BASIC Bank Ltd

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4.1
Literature Review

4.2
BASIC Bank and Trade Finance

4.2.1
BASIC Bank Statement policy

4.2.2
Function of Trade Finance
Department

4.2.3
Parties Involve in Trade
Finance

4.3
IMPORT Bills

4.3.1
Import Procedure and Practice

4.3.2
Documentary Credit or L/C

4.3.2.1
Various steps in the operation
of Documentary Credit

4.3.2.2
Different types of
documentary credit or L/C :

4.3.2.3
Stage to a documentary Credit

4.3.2.4
Advantages and
Disadvantages of
Documentary Credit

4.4
EXPORT Bills

4.4.1
Export financing

4.4.1.1.
Pre shipment credit

4.4.1.2
Post Shipment Credit

4.4.2
Operating procedure

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4.4.3
Methods of payment in export
sales

4.5
Collection

4.5.1
Documentary collection

4.5.2
Clean Collection

4.5.3
Advantages and
Disadvantages of Clean
Collection

4.6
Banks facilities and Services to
Exporter and Importer

4.6.1
Export facilities and Services

4.6.2
Import facilities and services

4.7
Remittance

4.7.1
Inward Remittance

4.7.2
Outward Remittance

4.8
Core Concept of Foreign
Exchange

4.9
Factor Affecting Fluctuation In
Exchange Rates

4.9.1
Exchange rate in Bangladesh
and its function over time

4.10
Ways of avoiding Exchange
Risk

Chapter Five
Findings, Recommendations &
Conclusion

5.1
Findings

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5.2

Recommendations

5.3

Conclusion

Part Three
Appended Part

PAGE
NUMBER

A

Bibliography

B

Appendices

B.1 Appendix - 01

List of Tables
PAGE
NUMBER
1.3.2

Period covered

2.1.1
Capital structure and ratios

2.1.2 At a Glance of BASIC Bank
Limited

2.9. Transactions At a Glance of
BASIC Bank Limited Dilkusha
Branch

3.7 Excise Duties Applicable:
For All Kinds of Deposits

3.8
Pre-mature Encashment

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of FDR
3.9 Different types of
shanchaypatras

3.10 LOCKER SERVICE

4.3.2.4 Advantages and
Disadvantages of
Documentary Credit

4.5.3 Advantages and
Disadvantages of Clean
Collection

Appendix 01 Bank Performance at a glance

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Part : Two
Report Body

Chapter: 1

Introductory Part

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Chapter: 1
Introduction

1.1 Rationale of the study

Now a day, foreign trade plays a vital role in banking. It is a system or process in which
one national currency is converted into another and of transferring money from one
country to another. It is mainly consist of export, import and other foreign Remittance. In
a developing country, foreign direct investment (FDI), export, import, foreign remittance
etc. plays very significant role. There is a great opportunity to invest the foreign
remittance which also comes from wages earners working abroad, in several
prospective investing fields like energy sector, telecommunication, information
technology etc, in our economy.

Maintenance of Deposit A/C, Saving accounts/ Current accounts/cash credit
deposits/Fixed deposits/short term deposits/margin deposits/Bond deposits/F.C. Bond
deposits. Receipts & payment of cash. Handling transfer transactions and operations of
clearing house. Maintenance of accounts with Bangladesh Bank & other banks.
Collection of Cheques & Bills. Issue and payment of Demand Drafts, Telegraphic
Transfers and payment Orders. Executing customers standing Instructions. Maintenance
of safe Deposit Lockers and Internal Accounts of the banks. Reporting to head office
about daily position. Saving all transaction record in computer. Closing and transfer of
different types of accounts. Keeping good relation with valued customer.

Therefore, General Banking and Foreign Exchange has an important role to play in
the financial sector of Bangladesh. Consequently, the study of General Banking and
Foreign Exchange the context of Bangladeshs developing economy is of great
opportunity.

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1.2 Objective of the study

1.2.1 General objective

The general objective is that; practically know about general banking and foreign
exchange actives and it how to apply our real life.

1.2.2 Specific objective

To analysis the General Banking Transaction procedures maintained by the BBL
To analysis the Foreign Exchange Transaction procedures maintained by the BBL
To evaluate General Banking and Foreign Exchange performance of The BASIC
Bank Ltd.
To identify problems in General Banking & Foreign Exchange operations of The
BASIC Bank Ltd.
To recommend some suggestions for the successful operations of General
Banking and Foreign Exchange activities of the BASIC Ltd.

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Chapter 1: Introduction and Background of the Study

1.3 Methodology of the Study

The following methodology has been followed to come to a successful conclusion of
the report:-

1.3.1 Sources of I nformation and data:

The sources of information are:

Primary data

Officers.
Conversion with clients.
Questionnaire.

Secondary data

Different Circulars issued by the head office of Bangladesh Bank.

Banks Annual reports. (years.2009,2010,2011)

Prior research report.

Some printed materials like brushier, hand notes etc.

Data Collection through personal interviews.

1.3.2 Period covered

Department Total Days
General banking 50
Foreign Exchange 40
Total 90

Table 1.1 shows the period covered during the internship

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Chapter 1: Introduction and Background of the Study

1.3.3 The process of application of the techniques and reason

A critical analysis of the data has been made through the bar diagram and line
graph over the last five years. This has enabled me to visualize the trend of the
variables of interest over time; indicators of bank perforation have also been
computed through ratios of variables and spread-burden analysis. In addition
ROE, Profitability etc. have been critically analyzed.

Trade finance procedure of documentary credit of the BASIC Bank has been
critically evaluated through the analysis of diagram, flow charts. This will
provide the identification of the problems faced by BASIC and ways of
removing the problems.
Protection of foreign exchange risk occurring out of transaction exposure for
BASIC by flowchart.

1.4 Limitation of the Study

Deposit all out co-ordination from the bank official, I faced some limitations. The main
problem I faced in preparing the paper was that inadequacy and lack of availability of
required data. This report is an overall view of Foreign Exchange of BASIC Bank Ltd. But
the is some limitation for preparing this report. These barriers, which hinder may work, are
as follows:

Difficulty of accessing latest data of internal operation.

Most limitation of this report is Banks policy is not to disclose some data
and information for obvious reason, which could be very much useful.

Lack of Experience on preparing these type of report

Sometimes data could not be verified.

The scope limited by the availability of data.

I was placed to this department for only 3 months of time and working like a
regular employee hindered the opportunity to put the better effort for the
study.

With All this limitation I try my best to make this report as best as possible. So readers are
requested to consider these limitations while reading and justifying any part of my study.

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Chapter: 2

Organizational Profile of BASIC Bank Ltd

Page 24 of 88

Chapter: 2
Organizational Profile of BASIC Bank Ltd

2.1 Background

Bangladesh Small industries and Commerce (BASIC) Bank Limited was established as a
banking company under the companies act 1913 and was incorporated under this act on the
2
nd
august 1988. The Bank launched its operation from the 21
st
January 1989. It is governed
by the Banking Companies act 1991. The Bank started as a joint venture enterprise of the
BCC foundation with 70 percent share and the Government of Bangladesh (GOB) with the
remaining 30 percent shares. The BCC foundation being nonfunctional following the closure
of the BCCI, the Govt. of Bangladesh took over 100 percent ownership of the Bank on
4
th
June 1992. However, the Bank is not nationalized; it operates like a private Bank as before.

BASIC is unique in its objective. It is a blend of development and commercial Banking
functions. The memorandum and Articles of Association of the Bank stipulate that 50 percent
of loan able funds required to be invested in small and cottage industries sector. As others
commercial Banks, BASIC provides their clients full-fledged commercial Banking services
including collection of deposits. Short term trade finance, working capital finance in
processing and manufacturing units and financing and facilitating international trade.

CAPITAL POSITION (up to 2011)
Authorized capital Tk. 2000.00 million.
Paid-up capital Tk. 1964.65 million.
Total Reserve up to31.12.2011 Tk. 2509.78 million
The Bank is required to transfer 50 percent of its net profit before tax to capital
Fund as per the Banking Companies

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Chapter 2: Organizational Profile of BASIC

2.1.1 Capital structure and ratios

At the end of the year 2011 Bank's capitalization stood at 8.68 percent for tier 1 and 10.13
percent for total capital against the total risk weighted assets exceeding the required
minimum levels of 5 percent and 10 percent respectively. Thus the Bank was able to
maintain the confidence of investors and depositors while providing a lucrative return to the
Government, the sole shareholder of the Bank. Details of the capital structure were as
follows:

Particulars 2011 2010
(Amount in million take)
Core Capital (Tier 1)
Paid up capital
235759 1964.66
Statutory reserve 2224.69 1824.69
Other reserve and surplus 653.17 469.99
Total of Tier 1 Capital 5235.45 4259.34
Supplementary Capital (Tire 2)
1%general provision on unclassified loans and
off balance sheet exposures
752.35 706.18
Revaluation reserve of HTM and HFT
securities
123.16 107.55
Total of Tier 2 capital 875.51 813.73
Total Capital (Tier 1 +Tier 2) 6110.96 5073.07
Ratios to risk weighted 60304.50 53907.00
Capital Ratios to risk weighted
Tier 1Capital 8.68% 7.90%
Tier 2Capital 1.45% 1.51 %
Total Capital
10.13% 9.41%

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2.1.2. At a Glance of BASIC Bank Limited

Name BASIC BANK LIMITED
Date of incorporation August 2, 1988
Date of inauguration of operation January 21, 1989
Registered office Bana Shilpa Bhaban
73, Motijeel Commercial Area
Dhaka-1000, Bangladesh.
Head Office Sena Kalyan Bhaban(6
th
floor)
195, , Motijeel Commercial Area
Dhaka-1000, Bangladesh.
Logo

Name of the chairman of the Board Mr. Sheikh Abdul Hye Bacchu
Name of Managing Director Mr. AKM. Sajedur Rahman
Number of Branches (In year 2013) 63
Services provided Deposit scheme, Credit facility and Foreign
exchange services
Paid up capital Taka 1964.65 million (2011)
Profit after tax and provision Taka 660.93 million (2011)
Ownership Government of Bangladesh
Banking software used CASTLE
TM
Technology used Member of SWIFT
Earnings per share 33.64 (2011)
E-Mail basicho@citechco.net
Website www.basicbanklimited.com
SWIFT BKSIBDDHA015
Number of Authorized Dealer 15

Table: At a Glance of BASIC Bank Limited


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2.2 Organizational Goal

To employ funds for profitable purpose in various fields with special emphasis on small scale
Industries.

To undertake project promotion to identify profitable areas of investment.

To search for newer avenues for investment and develop new product to suit such needs.

To establish linkage with other institutions which are engaged in financing micro enterprises?

To co- operate and collaborate with institutions entrusted with the responsibility of
promoting and aiding SSI sector.

2.3 Organizational Structure

To achieve its organizational goal, the bank conducts its operation in accordance with
the major policy guidelines laid down by the Board of Directors, the highest policy
making body. The day to day operation off the bank is looked after by the
management.

2.3.1 Board of Director
The Government holds 200 percent ownership of the bank. All the Directors
of the board are appointed by the Government of Bangladesh. The Secretary
of the Ministry of Industries is the chairman of the bank other directors of the
bank are high Government executive. The managing Directo5r are at the
present 6 directors including the Managing Director on the board. The present
Board of Directors of the bank consists of the following members:

2.3.2 Management
The management is headed by the Managing Director. He is assisted by the
General Manage and Departmental heads in the head office. BASIC is
different in respect of hierarchical structure from other Bank in that it is much
more vertically integrated as far as reporting to the chief executive is
concerned. The Branches in charge of the Bank report directly to the
Managing Director and, for functional purpose, to the head of the departments.
Consequently, quick decision making in disposal of cases is ensured.


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Organ gram of BASIC Bank Limited

2.4 Customer Service

In this department, the customer service officer is the bank representative and is often
the first person contract with clients. The main job of the customer service officer is to
attend any concerns expressed by the clients. They are responsible for handling any
quarries by the clients and also serve as initial interviewers and inform future clients of
what kinds of accounts BASIC offers.

They explain what accounts is available for what clients and what prerequisites are
necessary for these accounts. BASIC has saving accounts, current accounts, fixed
deposits, Short- term notice account, Bearer certificate of deposit accounts etc. The
customer service department works closely with the Remittance and Bills department.

BOARD OF DIRECTORS
MANAGING DIRECTORS
GM
OPERATION
GM
DEVELOPMENT
OFFICER IN
CHARGE
ACCOUNT
OFFICER IN
CHARGE
CREDIT
AGM
INTERNA
TIONAL
DGM
INDUSTRIAL
CREDIT
AGM
ESTABLI
SHMENT
AGM
COMPUTER
DGM
ADMINIS
TRATION

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Chart 2.1: Total Asset

Amount in Million TK

Chart 2.1 shows the Total Asset in million taka of BASIC Bank. The Total Asset
has increased during the period 2010 to 2011.

Chart 2.2: Placement & Investment


Chart 2.2 shows the Placement& Investment in million taka of BASIC Bank. The
Placement& Investment has increased during the period 2010 to 2011.

Chart 2.3: Operating Income
0
10000
20000
30000
40000
50000
60000
70000
80000
2007 2008 2009 2010 2011
Total Asset
0
2000
4000
6000
8000
10000
12000
14000
16000
2007 2008 2009 2010 2011
Placement &
Investment

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Chart 2.3 shows the Operating Income in million taka of BASIC Bank. The
Operating Income has increased during the period 2010 to 2011.

Chart 2.4: Operating Expenses


Chart 2.4 shows the Operating Income in million taka of BASIC Bank. The
0
200
400
600
800
1000
2007 2008 2009 20010 2011
Operating Income
0
50
100
150
200
250
300
350
400
2007 2008 2009 2010 20011
Operating Expenses

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Chart 2.5: Net Income


Chart 2.5 shows the Net Income in million taka of BASIC Bank. The
Net Income has increased during the period 2010 to 2011.

Chart 2.6: No of Employee

Number of People

Chart 2.6 shows the No. of Employ of BASIC Bank. The No. of Employ
has increased during the period 2010 to 2011.
0
200
400
600
800
1000
2007 2008 2009 2010 2011
Net Income
0
200
400
600
800
1000
1200
2007 2008 2009 2010 2011
No of Employee

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Chart 2.7: Total Deposits


Chart 2.7 shows the Total Deposit in million taka of BASIC Bank. The

2.5 Return on Equity of BASIC

The return on Equity (ROE) of BASIC has decreased in 2011 compared to the year 2010.
Interest margin cover has been increased due to increase of interest income of BASIC is in
2011. Net profit to Gross income is decreased during the year 2011. The after tax return on
average asset has been also been decreased in 2011 compared to 2010.

0
10000
20000
30000
40000
50000
60000
70000
2007 2008 2009 2010 2011
Total Deposits

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2.6 Technology of BASIC

The Board attaches grant importance on acquisition and use of appropriate information
technology in the bank. Since inception the bank has continued its effort to meet the complex
and dynamic needs of customers. BASIC bank has its own software developed in 1991. Local
area network (LAN) has been installed in Head office and 15 branches of the bank. Wide area
network (WAN) has been set up between Head office and branches using X.28 leased line of
BTTB. The bank has undertaken a project for5 introduction of Any Branch Banking ATM
automated Teller Machine and Debit Card at its 16 branches in Dhaka and Chittagong.
The project will be implemented in 2002. Once completed, the valued customers will be able
to withdraw or deposit cash from any branch in Dhaka and Chittagong during office hours,
withdraw cash, transfer funds and pay utility bill at any time from any ATM and pay their
shopping bills using a debit card. These system is called centralized.

2.7 Risk management

In banking business, no reward can be expected without risk. In this backdrop, the
management has established a formal program for managing the business risk faced by the
bank. Considering the present non- performing loan position of the country, BASIC bank is
very much cautious about its investment. Every loan proposal is placed under careful scrutiny
before approval. Proposal of large amount of loans need approval of the board of Directors.
Credit lines are established for each borrower or borrower group. Internet audit team and
recovery team exercise close monitoring on every loan transaction. Management regularly
reviews the banks overall assets and liabilities structure and makes necessary changes in the
mix asset/liabilities of balance sheet. The Bank also has a liquidity policy to ensure financing
flexibility to cope with unexpected future cash demand. The Bank takes necessary action to
avoid foreign exchange risk which is called as exposure.

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BASIC Bank Dilkusha Branch

2.8. Information and location

Adders: 14 Dilkusha C/A Dhaka-1000
DGM/ Branch in charge : Abul Kalam Azad
AGM : Sumit Narayan
SWIFT Code : BKSIBDDH015
Zip Code: 1000
Branch Code: 15
No of Employ : 64
Corporate customer : BAPX, BISIC
Phone : 02-9563793-4
Fax : 02-9587150
Rent: 30,00,000 (30 lac tk)
Advance: 5,00,00,000tk (5 core tk)

2.9. Transactions At a Glance of BASIC Bank Limited Dilkusha
Branch

Particular
Year2010 Year2011
Deposit
71494,00,000 624,00,00,000
Advance
72,00,00,000 180,00,00,000
Expenditure
57,00,00,000 180,00,00,000
Net profit
38,90,00,000 53,93,00,000
Total Income
96,00,00,000 229,00,00,000
Import
250,00,00,000 352,00,00,000
Export
470,00,00,000 538,00,00,000

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Chapter: 3

General Banking Activities of BASIC Bank Ltd

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3.1 GENERAL BANKING
General Banking Department performs the core functions of the bank. It deals day to day
transactions. It takes the deposit from the customer and meets the customer demands for
cash by honoring their checks. Broadly, it has the following core heads-
1. Accounts Opening Section
2. FDR And Ancillary Services Section
3. Local Remittance Section
4. Collection And Clearing
5. Cash Section
6. Accounts Section.

3.2 ACCOUNTS OPENING SECTION
Banker-customer relationship begins with the opening of an account by the customer.
Opening of an account binds the same into a contractual relationship. But the selection of
customer is very crucial. In fact, fraud and forgery of all kinds start by opening of an
account by the customer (s). So, the bank takes extra care in its selection. One of the basic
functions of commercial banks is to accept deposits. For accepting deposits both demand
and time, BASIC Bank offers the following types of accounts-
1. Demand deposits (Withdraw able on demand)
a. Saving Bank Account
b. Current Account
2. Time deposits (Payable at a fixed date or after a period of notice)
a. Fixed Deposit Receipt (FDR)
b. Short Term Deposit (STD)

3.2.1Types of Accounts with Terms and Conditions
This part covers only following types of accounts-
1. Savings Bank Account
2. Current Account
3. Short Term Deposit (STD) Account
Savings Bank Account
This deposit is primarily for small-scale savers. Hence, there is a restriction on
withdrawals in a week. Heavy withdrawals are permitted only against prior notice. Some
Important Points are as follows-

Minimum opening deposit of Tk.1000/= is required;
Check book issuing balance is also the same (Tk. 1000/=);
Withdrawal amount should not be more than 1/4
th
of the total balance at a time and limit
twice in a week;
Interest rate is 7.5% including 10% excise duty on interest rate. Interest paid twice in a
year depending on monthly minimum balance. When money is deposited within 5 of the
following month, then it is counted as monthly minimum balance. If the interest amount
is more than Tk. 200 or more, the bank is paid the amount to the customer. Otherwise it
is treated as Banks Shadow Profit;

Page 37 of 88

Can open the A/c individually or jointly. In case of joint a/c, Joint signature is required
if not authorized otherwise;
Minor (For withdrawal purpose), lunatic, insolvent, pardanshin women (Not mandatory)
cannot open such type of account.
Current Account
Current account is purely a demand deposit account. There is no restriction on withdrawing
money from the account. It is basically justified when funds are to be collected and money
is to be paid at frequent interval. It is most suitable for private individuals, traders,
merchants, importers and exporters, mill and factory owners, limited companys etc. Some
Important Points are as follows-
Minimum opening deposit of TK.5000/- is required;
There is no withdrawal limit. But in case of large amount say 2 lac or more, bank
requires one day before notice;
No interest is given upon the deposited money;
The Banker is under an obligation to repay these deposits on demand. So, they are
called demand liabilities of a Banker.
The primary objective of such account is to save big customers like businessmen, join
stock companies, public authorities, etc. from the risk of handling a lot of cash.
The cost of providing current account facilities is considerable to the Bank as they make
payments and collect the bills, drafts, and checks for any number of times daily. The
Bank is, therefore, do not pay interest on current deposits. At the same time, BASIC
bank charges Tk. 200 as Incidental fee;
Minimum Tk. 1000 balance must always maintain all the time;
Minor cannot open such type of account;
Account holder can enjoy SOD or even TOD facility.
STD (Short Term Deposit) Account
Normally various big companies, organizations, Government Departments keep money in
STD account. Frequent withdrawal is discouraged and requires prior notice. In BASIC,
customers usually give an instruction 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. The deposit should be kept for at least seven days to get interest. The interest
offered for STD is less than that of savings deposit. Interest is calculated based on daily
minimum product and paid two times in a year. Interest rate is 5.75% including 10%
excise duty on interest rate.
3.3 COMMON FORMALITIES REQUIRED FOR EVERY ACCOUNT

1. Duly filled up Account Opening Form.
2. Introducers signature on Account Opening Form to be verified by Manager under
full signature.
3. Two copies of passport size photograph of account opener(s) duly attested by the
introducer.
Note: Mandate or authority form filled up by an individual (s) or account openers are
to be obtained if the customer wants to authorize another person to operate an account
on behalf of him/ them.
3.3.1 Documents Required For Each Account Separately
In case of Proprietorship Firm-
Declaration of proprietorship.

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Trade license.
Tax Identification No (TIN) directed by Bangladesh Bank.
In case of Partnership Firm-
Account must be opened in the name of the firm.
The firm should describe the names and addresses of all partners.
Board Resolution signed by all partners to open the A/C.
Photocopy of partnership deed duly attested by notary public.
Letter of partnership duly signed by all partners.
Trade license from municipality.
In case of Private Limited Join Stock Company-
Memorandum of Association and Articles of Association duly certified by
Chairman or Secretary.
Board Resolution duly certified by Chairman/ Secretary authorizing to open the
A/C with the bank and mentioning the name of the person (s) who will operate
the A/C as per provisions of Articles of Association.
Certificate of incorporation duly certified by Chairman or Secretary.
List of all Directors with Designation, Address & Specimen Signature duly
certified by Chairman or Secretary (Form XII).
Latest copy of Balance Sheet
Power of attorney.
In case of Public Limited Join Stock Company-
Photocopy of Registration certificate certified by Chairman or Secretary.
Memorandum of Association and Articles of Association duly certified by
Chairman or Secretary.
Board Resolution duly certified by Chairman/ Secretary authorizing to open the
A/C with the bank and mentioning the name of the person (s) who will operate the
A/C as per provisions of Articles of Association.
Certificate of commencement duly certified by Chairman or Secretary.
List of members of Managing/ Executive duly certified by Chairman or Secretary.
In case of Societies/Clubs-
Certified copy of Registration certificate under the societies Registration Act,
1962.
Certified copy of Resolution for opening and operation of account.
Certified copy of Bye-laws & Regulations/ Constitution.
Power of Attorney.
In case of Cooperative Society-
Copy of Bye-law duly certified by the Co-operative officer.
Up to date list of office bearers.
Resolution of executive Committee as regards of the account.
Certified copy of Certificate of Registration issued by Registrar, Co-operative
Societies.
In case of Non-Government College/ School/ Madrasha, -
Up to date list of the Governing Body/ Managing Committee.
Copy of Resolution of the Governing Body/Managing Committee authorizing
opening and operation of the account duly certified by Gazette Officer.

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In case of Minors account-
Putting the word MINOR after the title of the account.
Recording special instruction of operation of the account.
The account opening form is to be filled in and signed by either of the parents or
the legal guardian appointed by the Court of Law & not by the Minor.
3.4 Issuing Cheque Book
For New and Old Account
Fresh checkbook is issued to the account holder only against requisition on the prescribed
application form. In case of old account, requisition made on the prescribed requisition
slip attached with the checkbook issued earlier. Generate a security no randomly for
every check leaf by Manager or authorized person. Prepare the instrument with respective
security no on the back of each leaf and signed by the authorized person. Make necessary
entries in Check Issue Register. Finally issue the checkbook for client (s).
For Duplicate Check Book
Duplicate checkbook in lieu of lost one is issued only when an A/C holder personally
approaches to the bank with an application agreeing to indemnify the bank for the lost
check book. Verify signature of the A/C holder with the specimen signature card. Series
number of lost checkbook is recorded in the stop payment register and caution should be
exercised to guard against fraudulent payment.
3.5 Account Enquiry
A customer can obtain the statement of his A/C by submission of an application in
prescribed balance enquiry receipt. Normally it is supplied two times in a year. In
addition, customer can know his current deposit position informally.
3.6 Transfer of an Account
Account holder may transfer his account from one branch to another. For this, he/she
must apply with proper reason to the manager of the branch where he is maintaining
account. Manager then requests to the manager of that branch where the A/C holder
wants to transfer his account. Besides, he also sends original copy of account opening
form and SSC (Specimen Signature Card) and photocopy of application for transferring
the account with the balance remained in the account.
3.7 Closing of an Account
An account may close-
When the customer desirous to close the account.
When the account is inoperative for a long time.
In case of customers death, insanity or insolvency.
When the court on that particular A/C issues Garnishee Order.
To close an account, the checkbook is to be returned to the bank. BASIC bank charges
Tk. 200/= for the same by debiting the amount from his account and rest amount is then
paid to the customer. Necessary entries are given to the account closing register and
computer. Finally make sure that A/C holder is completely free from all dues.

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Table- Excise Duties Applicable: For All Kinds of Deposits
Sl. No. Deposit Amount Limit Charge
1. Up to 10,000 Zero
2. 10,001 to 1,00,000 Tk. 120
Sl. No. Deposit Amount Limit Charge
3. 1,00,001 to 10,00,000 Tk. 250
4. 10,00,001 to 1,00,00,000 Tk. 500
5. 1,00,00,001 to 5,00,00,000 Tk. 2500
6. 5,00,00,001 and above Tk. 5000

3.8 FIXED DEPOSIT RECEIPT (FDR)
3.8.1 FDR Account
Fixed deposits are time deposits or time liabilities. These are the deposits in which an
amount of cash is deposited in Bank for a fixed period specified in advance. Before
opening a Fixed Deposit Account a customer has to fill up an application form which
contains the followings-
Amount in figures
Beneficiarys name and address
Time period
Rate of Interest
Date of Issue
Date of maturity
How the account will be operated ( singly or jointly)
Signature (s)
F.D.R. no.
Special instructions (if any)
After fulfilling the above information and depositing the amount, FDR account is opened
and a FDR receipt is issued and it is recorded in the FDR Register which contains the
following information-
FDR account no.
FDR (Fixed Deposit Receipt ) no.
Name of the FDR holder with address
Maturity period
Maturity date
Interest Rate
In case of FDR Account, the bank does not have to maintain a cash reserve. So, BASIC
bank offers a high interest rate in these accounts. The revised interest rates for FDR
effected from November 05, 2001 followed by BASIC are-
a) For 3 months & above @ 8.25 %
b) For 6 months & above @ 8.50 %
c) For 12 months & above @ 8.75 %
d) For 24 months & above @ 9.25 %
In case of encashment of FDR [say for Tk.X ] on maturity, following accounting
treatments are given-
Interest on FDR A/C -Cr. [say Tk. P]
Excise Duty on FDR -Dr [say Tk. Q]

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10 % Income Tax on interest Dr. [say Tk. R]
FDR A/C Dr. [Tk. (X+P-Q-R)]
Cash A/C Cr. [Tk. (X+P-Q-R)]
If the customer wants to draw the interest only, then the following entries are given
Interest on FDR A/C Dr.
Cash A/C Cr.

3.8.2 Renewal of FDR
Customer supposes to inform the bank in writing 15 days before the maturity date for
encashment. If not, bank normally renews the amount just after the maturity date.
Renewal will be for previously agreed maturity period.
3.8.3 Loss of FDR
If the instrument is lost from the possession of the holder, the holder is asked to fulfill the
following requirements-
a) Holder should inform the bank immediately
b) Record a GD (General Diary) in the nearest Police Station.
c) Furnish an Indemnity Bond
On fulfilling the above requirements, BASIC bank is then issued a duplicate FDR.
Table- Pre-mature Encashment of FDR
PERIOD PRE-MATURE
ENCASHMENT
INTEREST RATE
01 3 months Before 30 days No Interest
Every completed calendar
months
SB (Savings Bank) Rate
02 6 months Before 3 months SB Rate
Before maturity but
completes 3 months
Interest payable at 3 months Rate for a
period of 3 months
Before expiry of 6 months Interest payable at 3 months rate for a
period of 3 months
After expiry of 6 months but
before maturity
Interest payable at 6 months rate for a
period of 6 months
After expiry of 6 months but
before maturity
Interest may be allowed at 6 months
rate for a period of 6 months
After expiry of 12 months
but before maturity
Interest may be allowed at 12 months
rate for a period of 12 months

3.9 SANCHAYAPATRA
BASIC bank Dilkusha branch is unique for selling Sanchay patra to its customers as its
ancillary services on behalf of govt. Sanchay patra is issued by Jatio Shanchay Bureau,
guided by Bangladesh Bank. It is received from Bangladesh Bank (BB). People
purchasing these bonds by depositing money in this branch and payment are made on
maturity to customers from this branch only. Every transaction is reported to BB. Within
72 hours, otherwise penalty is imposed. Money is realized from BB after making

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payment to customer. This branch gets 1% commission for this service. As a whole
following things are conducted by this section-
Selling of Shanchaypatra
Making payment on maturity
Reporting to Bangladesh Bank
Calculation of interest
Accounting.

Details of Shanchaypatra

Table- Showing different types of shanchaypatras
Sl Types Limit Interest
1. 8 years Pratirakha
Shanchay Patra
Singly- 15 Lac. After 1 year 8.75% and per yr. 1%
increases and on maturity 15.75%.
Jointly- 30 Lac.
2. 5 years Bangladesh
Shanchay Patra
Singly- 15 Lac. After 1 year 8.50% and per yr. 1%
increases and on maturity 12.50%.
Jointly- 30 Lac.
3. 5 years Investment Scheme
on 6 months rest
Singly- 10 Lac. Interest rate 12%
4. 3 years Investment Scheme
on quarterly rest
Singly- 20 Lac. Interest rate 12%
Jointly- 40 Lac.
5. 5 years Paribar Shanchay
Patra
Singly- 10 Lac. Interest rate- 11.92%. For premature
withdrawal Postal Shanchay Bank
Simple Interest Rate is applicable.

3.10 LOCKER SERVICE
BASIC Bank Dilkusha branch is also unique for providing locker service to its
customers. People usually keep their valuables for securing purpose.\
Terms and Conditions
Renter must have an account either current or deposit.
1. All rentals are payable annually in advance.
2. Lockers will be rented for a period of one year in the first instance and will
3. In order to terminate the hire written notices must be given at least one week period to
the expiry date of the hire and the locker with its keys must be surrendered to the bank.
4. The renter shall have access to the locker at anytime during the Banks business hours.
5. Lockers may be hired in two or more names but not exceeding four and in such cases
the renters must give explicit instructions as to whether access is to be allowed to either
renters singly or two or more of their member jointly.
6. If the renter loses the keys of the locker the bank must be notified without delay. In such
an even all expenses the renter shall pay regarding breaking the locker and substituting a
fresh lock and keys.
7. In respect of the hire of safe deposit lockers the relationship between the bank and the
renter is that of a licensor and licensee and not that of banker and customer.

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Table-: Locker service at a glance
Type of Locker
Size (in cm.) Total
No.
Rented Annual
Charge
Small
58 X 19 X
12.5
90 06 Tk. 1200
Medium
58 X 35.5 X
12.5
45 08 Tk. 1800
Note: Tk. 1500/= (Refundable) is applicable for all kinds of lockers as security charge.

3.11 LOCAL REMITTANCE SECTION
Cash remitting from one place to another is risky. So, Banks remit funds on behalf of the
customer (s) to save them from any awkward happening through network of their
branches. There are three modes of remitting funds. These ares
Pay Order (PO)
Demand draft (DD)
Telegraphic Transfer (TT)
Call Deposit Receipt (CDR).

3.12 PAY ORDER (PO)
Pay order is an instrument, used to remit fund within a clearing zone. Unlike cheque,
there is no possibility of dishonoring PO. The PO can only be encashed through the
branch that has issued the instrument.
Pay Order Issuing Process
For issuing a PO, following formalities are to be maintained. These are-
Duly filled up the application form by the customer.
Deposit money either in cash or by cheque with necessary charges.
Prepare the instrument and make necessary entries in the Bills Payable Register where
payees name, date, PO no. etc are noted.
Deliver the instrument to the customer after scrutinized and approved by authority by
taking signature of the customer on the counterpart.
Accounting Entry for Pay Order
Drawers/Issuers A/C -Debit
Bills Payable (PO) A/C-Credit
Income A/C Commission Credit
Income A/C PostageCredit.
Payment order is a current liability on the part of bank, which is required to be discharged
by the beneficiaries against payment in cash or through an account.
Modes of Purchasing Pay Order
a) By cash
b) By account
c) By transfer of money.
Payment of Pay order

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As the PO issued by the bank is crossed one it is not paid over the counter. On the
contrary, this amount is transferred to the payees account. To transfer the amount the
payee must duly stamp the PO. The a/c treatments will be-
Bills Payable A/C-Debit
HO A/C Y branchCredit.
Note: Before payment is made, it is duty for issuing bank to examine whether
endorsement was given by the collecting bank or not. If not, dishonor the instrument and
marking the instrument Endorsement Requirement.
Cancellation of PO
The following procedure is followed to refund the pay order by cancellation:
1. Submit written request to refund the pay order attaching therewith the original PO.
2. Verify purchasers signature with the original application form on record.
3. Manager/ authorized persons prior permission is required before refunding the amount
of pay order.
4. Pay order should be affixed with a stamp cancelled under proper authentication and
the authorized officers signature on the pay order.
5. No charge is created for cancellation. Refund only the pay order amount.
6. The original entries are to be reversed with proper narration.
7. Record the cancelled pay order in the Pay Order Issue Register.
Loss of Pay Order
If the instrument is lost, the holder is asked to fulfill the following requirements-
a) Holder should inform the bank immediately.
b) Record a GD (General Diary) in the nearest Police Station.
c) Furnish an Indemnity Bond.
On fulfilling the above requirements, BASIC bank is then issued a duplicate pay order
and marked In lieu of. Banker will also mark stop payment on the Bills Payable
Register.
Collection of Pay Order
If the payee is a customer of Mirpur branch, he will deposit it for collection. Then the
branch gives necessary endorsement as a collecting bank. Then the instrument places the
issuing bank through clearing house.
PO Charge
A commission of TK.40/= is charged for a pay order.

3.13 DEMAND DRAFT (DD)
DD is called Bankers Draft. It is an instrument, issued by a particular branch, drawn on
another branch of the same bank, instructing to pay a certain sum of money. It is very
popular instrument for remitting fund from one corner of a country to another. DD is
issued in favor of a customer who maintains an a/c with BASIC Mirpur branch. It can be
issued against Cash or Cheque. If DD amount is more than Tk.50000/=, a test code is
given on IBCA. The a/c treatments will be-
When DD is issued:
Cash/Customer A/CDebit
H/O A/C X branchCredit

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Income A/c commission..Credit.
After giving these entries an Inter Bank Credit Advice (IBCA) is prepared which contains
the controlling number, depicted that the branch is credited to whom it is issued. An
IBCA implies the following entries-
H/O A/C issuing branchDebit
Drawn on branchCredit.
Payment Process of DD
After receiving the instrument, the IBCA lodgment is done by the branch. Necessary
entries are given in DD Inward Register. Controlling number of the IBCA should match
with the serial number of this register. The following accounting entries are made in
following cases-
When IBCA comes
H/O A/C Issuing branchDr
DD Payable A/C ...Cr
When instrument comes
DD payable A/C.Dr
Customers A/C..Cr
If advice does not come but instrument comes
Suspense A/C.Dr
Party A/CCr
When advice comes
HO A/C Issuing Branch .Dr
Suspense A/C..Cr
The banker even on receiving instructions from the remitter cannot stop the payment of
the instrument. Stop payment can be done in the following cases-
i) Loss of draft before endorsement: In this case, Draft reported to be lost,
payees endorsement requires verification is marked.
ii) Loss of draft after endorsement: In this case, the branch first satisfies
itself about the claimant and the endorsement in his favor.
Cancellation of DD
To cancel an issued DD, the client has to submit an application. Issuing branch then
sends an Inter Branch Debit Advice (I.B.D.A.) to the drawn branch against previously
issued Inter Branch Credit Advice (IBCA). After that the following entries are given-
H/O A/C drawn on branch-Dr.
Clients A/C -Cr.
Issuing of Duplicate DD
If the customer wants a duplicate DD, he then is asked to do the following formalities-
1. Throwing an application immediately by the original DD holder.
2. Making a General Diary (GD) in the nearest Police Station.
3. Furnishing an Indemnity Bond.
4. Put a CAUTION mark in the register.
5. Inform to the Head Office by the issuing branch.
6. Inform all the branches by the HO for stop payment.

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7. Issue a new DD (Put the same DD no. and mark DUPLICATE).
DD Charge
Commission @ 0.15% but minimum Tk.50/=.
Postage charge Tk. 20/= (Fixed).
DD cancellation charge Tk. 50/= (Fixed).

3.14 TELEGRAPHIC TRANSFER (TT)
Sometimes the remitter of the funds requires fund immediately. In that case, the banker is
requested to remit the funds telegraphically. Different modes are Telegram, Telephone,
Telex, Fax. Telegraphic Transfer is the most rapid and convenient but expensive method.
The drawer and the payee should have accounts with BASIC bank. TT is issued against
cash, cheque, and letter of instruction.
Procedure for I ssuing TT
Following procedure is followed for issuing a TT.
a) Deposit money by the customer along with application form.
b) In receipt of money a cost memo is given to the customer containing TT serial
number which informs the awaiting party of the paying branch by the customer.
c) Tested telex message is prepared where TT serial number, notifying partys
name is mentioned.
d) The telex department confirms transmission of the message.
e) Necessary entry is given to the TT Outgoing Register. Entries are as follows-
Cash/Respective A/C (Issuer)..Dr
HO A/C Paying branch.Cr (Principal amount)
Income A/C (Commission)Cr
Procedure for I ncoming TT
After receiving the telex, it is authenticated by tested. TT serial number is verified with
the TT Incoming- Concern branch Register. Voucher is released in this regard giving
the following accounting entries-
HO A/C Paying branchDr
Customer A/C-Cr.
TT Charge
1. Commission @ 0.15% of the Principal Amount but minimum Tk.200/=.
2. Telex charge Tk. 50/= (Fixed).

3.15 CALL DEPOST RECEIPT (CDR)
CDR is also an instrument, issued by a particular branch, drawn on another branch of the
same bank, instructing to pay a certain sum of money not over the counter to a certain
person or his order. It is as like as Pay Order (PO), but main difference is that PO is
treated as bills payable and CDR is treated as sundry deposit. From bankers point of
view, it is always desirable but its practice is limited. Only Tk. 40/= (Fixed) is charged
for this facility. If CDR amount is more than Tk.50000/=, a test code is given on IBCA.
When issuing the instrument, accounting treatment will be-
Party A/CDebit

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HO A/C drawn on branch-Credit.
After receiving the instrument, accounting treatment will be-
HO A/C Issuing branchDebit.
Party A/CCredit.
Besides, Staff and very Valued Customers of the bank enjoy Direct Fund Transfer
facility. In this case, no commission is charged.

3.16 COLLECTION AND CLEARING SECTION
Collection
In modern banking the mechanism has become complex as far as smooth transaction and
safety is concerned. Customer does pay and receive bill from their counterpart as a result
of transaction. Commercial banks duty is to collect bills on behalf of their customer.
After that, the following entries are given and a debit voucher is prepared-
Balance with Bangladesh BankDebit
Customers A/C -Credit.
Receiving Cheques For Collection
In BASIC Bank Limited, cheques of its customers are received for collection from other
banks. In case of receiving cheques, following points should be checked very carefully-
1) The check should not carry a date older than the receiving date for more than 6
months. In that case it will be a Stale Check. Again the check should not be a Post
dated one.
2) The amount both in words and figures of the pay-in-slip should be the same and
also it should be in conformity with the checks amount both in figures and words.
3) The name mentioned both in the check and the pay-in-slip should be the same.
4) The check must be crossed.
5) Collecting banker must check whether endorsement is done properly or not.
ENDORSEMENT IN CASE OF
Payees A/C will be credited on realization Bills for collection

3.17 Types of Bills for Collection
1. Outward Bills for Collection
2. Inward Bills for Collection.
A. Outward Bills for Collection (OBC)
If the bill is beyond the clearing range then it is collected by OBC mechanism. Customer
deposits cheques, drafts etc. for collection, attaching with their deposit slip. Instruments
outside the clearing range are collected through OBC mechanism. A customer of BASIC
bank Mirpur branch is depositing a check say of Janata Bank, Kotchandpur branch,
Jhenidah. Now as a collecting bank, Mirpur branch will perform the following tasks-
Procedure of OBC
a) Depositing the cheque along with deposit-slip
b) Crossing of cheques are done indicating Mirpur Br. as a collecting bank
c) Endorsement Payees A/C will be Credited on realization is given
d) Entries are given in the Outward Clearing Register.

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Collecting bank can collect it either by its branch or by the drawers bank. They will
forward the bill to that particular branch. OBC number will give on the forwarding letter.
Now following procedures will take place in case of the following two cases.
Bills Collected through Branch
Collecting branch will receive an I.B.C.A. from that particular branch. Accounting
treatment from collecting branchs point of view will be-
HO A/C concerned branch ..Debit
Customer A/C ..Credit
Income A/C on commission/ Postage.Credit.
The process of collection is described below:
a) If the bill is drawn on BASIC Bank Mirpur Branch
1. Bills are sent to that branch through mail or courier;
2. Branch collects the bills and sends an IBCA to that Branch;
3. Depositors account is credited.
b) If the bill is drawn on another Bank and there is a branch of BASIC
1. Branch sends the bill direct to the branch of BASIC by OBC schedule.
2. Request them to send the proceeds by IBCA and collect the bill.
3. That branch of BASIC can collect the through clearing house arrangement exists there.
c) If the bill is drawn on another bank but there is no branch of BASIC-
1. Bill is directly sent to that Bank
2. Request them to send a draft in favour of this bank by an OBC schedule.
3. That bank sends a DD mentioning the Paying Bank
4. Then the bill is collected through clearing house process.
Balance Sheet Effect
OBC creates asset and liabilities simultaneously for bank. When send for collection, it is
banks liability and as well as customers liability i.e. banks asset.
Liability head Bills for collection being bills receivable as per contra
Asset head Bills receivable being bills for collection as per contra.
Customers liability A/CDebit
Bankers liability A/CCredit.
After realization (Even if dishonored)
Bankers liability A/CDebit
Customer liabilities A/CCredit.
After realization the contra is settled. This item is a stock variable of balance sheet at a
particular date.
Balancing
Balancing is done on the bankers liability account. The year end balance is shown on
balance sheet.
B.Inward bills for collection (IBC)
When the banks collect bills as an agent of the collecting branch, the system is known as
IBC. In this case the bank will work as an agent of the collection bank. The branch
receives a forwarding letter and the bill. Next steps are as follows-
1. Entry in the IBC register
2. An IBC number is given on the bill.
3. Endorsement given- Our branch endorsement confirmed

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4. The instrument is sent for clearing.
Accounting Entries-
ClearingDebit
Miscellaneous Creditor A/C OBC .Credit.
I f honored, the accounting treatment will be-
Miscellaneous Creditor A/C OBCDebit
H.O. Collecting branch A/C..Credit.
An IBCA is dispatched in this regard
HO A/C agent branchDebit
HO A/C collection branch....Credit.
I f dishonored,
The instrument is returned to the collecting branch along with a return memo.
CLEARING
According to the Article 37 (2) of Bangladesh Bank Order, 1972, the banks which are a
member of the clearing house are called as Scheduled Banks. The scheduled banks clear
the cheques drawn upon one another through the clearing house. This is an arrangement
by the central bank where every day the representative of the member banks sits to clear
the cheques. For clearing there is a department in every Bank. This department receives
cheques, drafts and like instruments from its customers for the purpose of collection with
a deposit slip over the counter crediting their accounts. Clearing of cheque is done
through the clearing house in Bangladesh Bank. Every day the first hour starts at 10.00
a.m. and returns house at 5.00 p.m.

3.18 Types of cheques for clearing
1. Inward clearing cheques.
2. Outward clearing cheques.
A. Inward Clearing Bills
It refers the instrument drawn on BASIC bank Mirpur Branch Limited, received from
other banks in the clearing house by their representative (s). Settlement process-
Accounting entry passed by this branch:
Respective A/C Debit
Head Office A/C (Main Br.) ....Credit.
I f cheques are returned, BASIC Bank Mirpur Branch passes an IBDA to Main Branch.
Then the necessary accounting entries will be-
HO A/C (Main Br.) ..Debit
Respective A/C .Credit.
B. Outward Clearing Bills
It refers the instruments drawn on the other banks received by BASIC bank
Mirpur Branch. They are of three kinds as follows-
a) Cheques drawn on another branch of BASIC. The settlement process
b) Cheques drawn on another Bank which is situated within clearing house area.

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3.19 CASH SECTION
Cash is the lifeblood of all financial activities. Cash section is a very sensitive point of
the branch. This section deals with all types of negotiable instruments and it includes
vault, used as the store of cash, instruments. The vault is insured up to Tk.20 lac. Insured
amount yet to be enhanced to Tk. 40 lac. Operation of this section begins when the
banking hour starts. Cash officer begins his/her transaction with taking money from the
vault, known as the opening cash balance. Vault is kept in a more secured place. The
amount of opening cash balance is entered into a register. After whole days transaction,
the surplus money remains in the cash counter is put back in the vault and known as the
closing balance. If the cash stock goes beyond this limit, the excess cash is then
transferred to BASIC bank main branch. The main functions of this section are-
1. Cash Receipt
2. Cash Payment
Cash Receipt
Cash receipt procedure is given below-
1. The depositor first fills up the Deposit-in-Slip.
2. Depositor deposits the money.
3. Officer receives the money, counts and then enters in the Cash Receipt Register, and
finally signs with seal and dates the deposit-in-slip.
4. Slip is then passed to another officer, who enters the receipt details like serial no,
amount, etc. in his register, signs the slip and keeps the banks part of the slip. Other
part is given to the depositor.
5. At the end of the day, entries are cross checked with the register kept at the cash counter
to see whether the transactions are correct or not.
Accounting treatment-
When cash received, the following entries are made-
Cash A/C.Debit
Partys A/C.Credit
Cash Payment
Some important check points for making the payment are as follows-
Endorsement
Endorsement is done by putting signature of the drawer on the back of the negotiable
instrument for the purpose of negotiation. By blank endorsement, an order instrument is
made as bearer. BASIC bank limited endorses the instrument in the following ways-
ENDORSEMENT IN CASE OF
Payees A/C credited Pay to Mr.X
Received payment
Payees A/C credited
Pay to BASIC bank, Mr.X
Payees A/C credited Pay to Mr.X , BASIC bank
Crossing
Generally two types of crossing are practiced, namely- General Crossing and Special
Crossing. Basically it gives a direction to the paying bank not to pay the check amount
over the counter. General crossing includes A/C payee crossing only. Drawing two
parallel and transverse lines do it. On the other hand, special crossing is like general

Page 51 of 88

crossing but in addition bank name is also mentioned. This gives the direction to the same
to pay the check only to the banker, whose name appears in the crossing or to his agent.
Cash payment procedure is given below-
1. Customer first deposits the check (s) to the cash section. Authorized individual checks
whether it is materially altered, proper endorsed, crossed or not. Being satisfied the total
requirements; he passes it to the computer for checking the balance. Operator verifies
the check leaf security no. If matched, then operator signs. Otherwise noticed to the
individual for stop payment;
2. Authorized officer is then verified the signature with the Specimen Signature Card
(SSC);
3. Send the instrument to the computer section once again for posting;
4. Cash officer is then asked the bearer to sign on the back of the instrument. At the same
he just enters the payment details in his register and pays the money to the bearer;
5. At the end of the day, these information must be tallied with computer postings to
ensure the correctness of payment.
Accounting treatment-
When cash paid, the following entries are made-
Party A/C.Debit
Cash A/C..Credit
Dishonor of Cheque
If the cheque is dishonored, BASIC bank sends a memorandum (cheque return memo) to
the customer stating the reason in the following way-
1. Refer to drawer
2. Not arranged for.
3. Effects not cleared. May be presented again.
4. Exceeds arrangements.
5. Full cover not received.
6. Payment stopped by drawer.
7. Payees endorsement irregular/ illegible/ required.
8. Payees endorsement irregular/ require Banks confirmation.
9. Drawers signature differs/ required.
10. Alteration in date/ figures/ words requires drawers full signature.
11. Cheque is post dated/ out of date/ mutilated.
12. Amount in words and figures differs.
13. Crossed cheque must be presented through a bank.
14. Clearing stamp required/ requires cancellation.
15. Addition to Banks discharge should be authenticated.
16. Cheque crossed Account Payee Only
17. Collecting Banks discharge irregular/ required.
If the check is dishonored due to insufficiency of funds, BASIC bank charges Tk.100/=
as penalty.

3.21 ACCOUNTS SECTION
Accounts department maintains all records of transactions and all types of statement. At
the end of transaction hour all concerned section sends vouchers of transactions to this
department. Accounts department compares all figures/ amount, contents of transactions
with supplementary statement prepared by computer. If any discrepancy arises regarding

Page 52 of 88

any transaction then this department reports to the concerned department. Following are
the activities of accounts department:
To record all transaction in the cash book.
To prepare daily, weekly, monthly, half-yearly and yearly fund position.
To prepare all kinds of statements related to Bangladesh Bank, Head office and
National Board of Revenue (NBR).
To prepare monthly salary statement, provident fund statement and administrative
expenditure statement.
To make charges for different types of duty.
Share !

Page 53 of 88

Chapter: 4

Foreign Exchange Activities of BASIC Bank Ltd

Page 54 of 88

Chapter 4: Foreign Trade Activities of BASIC

Chapter: 4
Foreign Exchange Activities of BASIC Bank Ltd

4.1 Literature Review

Banks play a very important role in effecting Foreign Exchange Transaction of a country.
Mainly transaction with overseas countries is respect of imports; exports and Foreign
Remittance come under the preview of foreign exchange transactions. Banks are the vital
sector by which such transactions are effected/settled. Central Bank records all sorts of
foreign exchange transaction and therefore, transaction effected by the Banks and other
authorized quarters are to be reported regularly (Daily, Fortnightly, Monthly, Quarterly,
Yearly etc) to Bangladesh Bank by the foreign exchange department of every Banks. Foreign
Exchange Department plays a vital role to earn the Banks maximum profit. This department
is classified according to their activities. The foreign exchange department consists of three
sections, these are as follows:

Import Section

Export Section

Foreign Remittance Section

Foreign Exchange Department, Banks facilitates their clients in enhancing International
Trade. The provision of finance to importers (Trust Receipt Facility, Documentary Credit
Facility) and exporters (Negotiation of export Bills, Purchase of Bill for collection)
encourages enterprises to engage in trade and enhance their liquidity position. Bank makes
the payment International Trade through letter of credit to the exporter on behalf importers.
Banks is a media of fund transfer from one party to another. In International Trade, as both
importers and exporters in different countries and do not deal with same currency, they have
to confront the risk of currency fluctuation. This exchange risk can be transferred from the
trader to the bank i. e. ready to provide the former with forward foreign exchange or currency
option so that the importer and the seller can devote their time to their business.

Page 55 of 88


4.2 BASIC Bank and Trade Finance

BASIC Bank plays an important role in international trade. The trade finance department of
BASIC is efficient of their activities and provides the best services to their clients. The major
clients of BASIC are corporate clients. Performing their activities since 1989, BASIC has a
very good relationship with the big corporate clients of Bangladesh. Trade finance
department consist of Bills (Import) and Bills (Export).

4.2.1 BASI C Bank Statement policy
All BASIC employees are responsible for ensuring compliance with the Bank policies and
procedures Operational Manual (OM), Know Your Client (KYC), and other policies. It is
imperative that the trade finance staff is fully conversant with all aspects of the above stated
documents relating to Letter of Credit (L/C), Documentary and clean Collection, Bank
Guarantee, and Bank to Bank Reimbursement and export Bills.

a. International chamber of commerce (ICC) Uniform Rules, customs and practice:

Transactions relating to L/C, Documentary and clean collection, Bank to
Bank reimbursement are processed subject to and in conformity with the
current versions of International Chamber of Commerce Publication

b. Credit policies:

Bank has their own credit policies and procedures for all Trade finance
activities. These are Credit Principle, Global credit portfolio limit, Credit
categories, Types of credit activities, Credit approval, Credit administration,
Credit monitoring and review.

c. Know Your Client (KYC):

Relationship Managers (RM) are responsible for ensuring that client profile
are kept current and that copy is distributed in accordance with the Banks
Know your client policy.

Page 56 of 88


4.2.2 Function of Trade Finance Department
Trade finance consists of the following areas of activity:

Import Bills
Export Bills
Bills Processing Unit

Basic function:

1. All transactions related to Import Transaction
2. All transactions related to Export Transaction
3. Handling of L/C reimbursements
4. Checking and collection of export bills for correspondent Banks.

4.2.3 Parties I nvolve in Trade Finance
1. The applicant: The applicant is the party that induces the Banks to issues
the letter of credit. The applicant is normally obligated to reimburse the
Bank for any payment made under letter of credit.

2. The issuing Bank: The issuing Bank is the Bank that issues the letter of
credit. The issuing Bank undertakes an absolute obligation to pay upon
presentation of documents drawn in strict conformity with the terms and
condition of the letter of credit.

3. The Advising Bank: An advising Bank simply advises a letter of credit
without any obligation on its part. However, the advising Bank shall take
reasonable care to check the apparent authenticity of the credit that it
advises. The advising Bank is typically a Bank in the Beneficiaries.

4. The Beneficiary: The beneficiary is the party entitled to drawn payment
under the letter of credit. The beneficiary will have to present the required
documents to avail payment under the letter of credit.

5. The Confirming Bank: The confirming Bank confirms that the issuer has
issued a letter of credit. The confirming Bank becomes directly obligated
on the credit to the extent of its confirmation and by confirming the Bank
receives the rights and obligation of an issuer

6. The Nominating Bank: The Bank where drafts drawn under the credit are
payable. In case of a usance credit where drafts are to be accepted by this
Bank.

7. The Negotiating Bank:The Bank that negotiates document under letter of
credit upon presentation. Typically advising Bank as nominated as
negotiating Bank

Page 57 of 88


4.3 IMPORT Bills

Import Bills deals with L/Cs and the issuance of L/Cs for import purposes. The letter of credit
serves as a vehicle for the importer and exporter to ensure that their goods and money are
coming. It is important to remember that the Bank deals with documents and not goods.
There are various steps towards the issuance of L/Cs; these steps will also BASIC, as will as
various Banks serving as negotiating, confirming, etc. Banks. L/Cs are used for the purchase
and sale of goods.

L/C are used mainly in trade. They usually include the mode of shipment of a specified
goods, and what the port of destination is the expiry of the shipment, the document all need to
be submitted to the issuing Bank, Certificate of Origin, of where the goods is produced,
inspection certificates, as to quantity and quality, are countries may have their own set of
demands they want to ask.

There are two criteria for importing goods:

1. Commercial ( Normally BASI C takes 50% margin of total values of goods )
2. Industrial ( Normally BASI C takes 10% margin of total values of goods)

There are also two types of L/C:

1. Sight L/C: Sight L/C has also to be immediately through advanced payment can be
allowed.
2. Usance L/C: Usance L/C has also to be paid at a fixed maturity date. For example,
payment upon the receipt of goods.

Beneficiaries that want to apply for a L/C need to have proper credit facilities. After
calculating the outstanding, and there is a still room, then L/C is issued. Calculation of
margin and charges are also done. Upon the receipt of goods, proper documentation is
certified, and then payment is done. The reimbursement of funds can be made in through
negotiating. They can be negotiated to the Bank of choice of the relevant currency.

4.3.1 Import Procedure and Practice

1. Regulation
2. Import policy
3. Licensing for Imports
4. Making the purchase contract
5. Opening the Letter of Credit
6. Amendments to Letter of Credit
7. Securing and Lodgment of Documents
8. Verification and Lodgment of Documents by the L/C opening Bank

Page 58 of 88

.

Chart 4.1: Import business of other Banks (2010 and 2011)


Chart 3.1 shows the import amount in other Banks (2010 and 2011). As
compared to other Banks BASIC import amount has fallen in 2011.

Chart 4.2: Import business of BASI C Bank


Chart 4.2 shows the import in million taka of BASIC Bank. The import has
increased during the period 2010 to 2011.

0
10000
20000
30000
40000
50000
2010 2011
BASIC Bank
Prime Bank
Dhaka Bank
0
2000
4000
6000
8000
10000
12000
14000
16000
2006 2007 2008 2009 2010 2011
Import (Million Tk.)

Page 59 of 88


Chart 4.3: Amount of Guarantee

Amount of Garments increased as increase the number of Garments which is shown
as chart 4.3. It is increased by 30 percent in 2011 as compare in the year 2010.

4.3.2 Documentary Credit or L/C

Documentary credit is written undertaking given by a Bank ( Issuing Bank, Opening
Bank ) to a seller ( Beneficiary, Exporter ) at the request and on the instruction of the
Buyer ( Applicant, Importer ) to pay either at sight or at a determinable future date, a
stated sum of money against stipulated documents and fulfillment of all the terms
and condition in the D/C. It is most suitable on the flowing circumstances:

When the importer is not well known, the exporter selling on credit terms
may have importers promise of payments backs by a buyer Banker.

On the other hand, the importer may not wish to pay the exporter until it is
reasonably certain that the merchandise has been shipped in the good
condition. A D/C in this case, can satisfy both the exporter and the importer.

0
200
400
600
800
1000
1200
1400
2006 2007 2008 2009 2010 2011
Garments (Million ok TK)

Page 60 of 88


4.3.2.1 Various steps in the operation of Documentary Credit

The importer and exporter have made a contract before a L/C is issued.
Importer applies for a letter of credit from his issuing Bank.
Issuing Bank opensa L/C, which is channeled through its overseas correspondent
Bank, known as advising Bank.g
Advising Bank informs the exporter of the arrival of the L/C.
Exporter ships the goods to the importer or other designated place as stipulated in the
L/C.

Diagram 4.4: Steps in D/C

Documents are sent to issuing Bank for reimbursement or payment.
Issuing Bank release documents to importers when the letter makes payment to the
former or against the letter trust receipt facility.
Importer takes delivery of goods upon presenting on the transport documents.

COTRACT,
IMPORTER
BUYER -
APPLICANT
EXPORTER
SELLER -
BENIFICIARY
SHIP
GOODS
TAKE
DELEVERY
GOODS
ISSUING BANK
L/C
ADVISING,
CONFIRMING,NE
GOTIATING
BANK
NEGOTIATI
ON OF
EXPORT
BILLS
APPLY L/C
PREPARE
AND PASS
DOCUMENT
ADVISE
L/C
RELEASE
DOCUMENTS
AGAINST
CASH
SEND
DOCUMENT
MAKE
PAYMENT

Page 61 of 88


4.3.2.2 Different types of documentary credit or L/C :
1.Red clause credit

A red clause credit is a special type of credit with a clause inserted which authorizes
the advising or confirming Bank to make advances to the Beneficiary before
presentation of the documents.

In other wards, it is a pre- shipment finance in the form of a loan the advising /
confirming Bank provides to the beneficiary, with payment of principle and interest
Guaranteed by the issuing Bank of the client.

Possible risk in issuing a Red Clause credit:

Exporter may use the advance for other purpose.
Documents presented from the exporter may have discrepancies
unacceptable to the importer.

2.Revolving Credit

A revolving credit is a credit, which provide for the amount of the credit to be
renewed automatically after use without the need to renew the credit every time. A
Revolving credit With respect to time can be cumulative or non cumulative.

It can be renewed with respect to either:
Time
Amount (i,e total value of the credit)

3.Transferable Letter of Credit

A Transferable letter of credit, which can be transferred in whole or in part by the
original beneficiary to one or more Second Beneficiaries. It is normally used when
the first beneficiary does not supply the goods himself, but acts as a middleman
between the supplier and ultimate buyer.

4.Standby Credit
A standby credit is a guarantee type of documentary credit. It might in many form
such as pure loan forms, bid bond and performance guarantee form etc

5.Back To Back Credit
When beneficiary receives a documentary credit which is not transferable, and he can
not furnish the goods himself, he may arrange with the Banker to issue a second credit
(which is known as Back to Back L/C) to a supplier to supply the goods.

The Bank issuing Back to Back Credit will obtain repayment through the master
credit which is deposited to the issuing Bank of the Back to Back Credit

Page 62 of 88


FOREIGN COUNTRY BANGLADESH

Diagram 4.5: Shows the Back to Back Credit Procedure

6. Standby Credit
A standby credit is a guarantee type of documentary credit. It might in many form
such as pure loan forms, bid bond and performance guarantee form etc.

7.Confirmed Credit
If a letter of credit is confirmed by a Bank (The advising Bank), this mean that, in
addition to the definite undertaking to the issuing to honor beneficiarys draft, the
advising Bank also makes its a promise to pay the beneficiary.

ULTIMA
TE
BUYER
APPLICA
NT L/C
MASTER
L/C
ISSUING
BANK
ADVISING
BANK
MIDDLEMAN
BENIFICIARY
OF MASTER
L/C
APPLICANT OF
B/B L/C
B/B L/C
ISSUING
BANK
ADVISING
BANK/NEG
OTIATING
BANK
SUPPLIER
BENIFICIARY
OF B.B L/C

Page 63 of 88


4.3.2.3. Stage to a documentary Credit
(A) Issuance of L/C
(B) Execution of Amendment
(C) Advising Letter Of Credit
(D) Confirming Letter OF Credit
(E) Advising Amendment
(F) Negotiation
(G) The process include following:
At negotiating Bank
At issuing Bank

BASIC Bank Banks in beneficiary locate

Diagram 4.6: BASI C involvement in D/C
ISSUING BANK
ADVING BANK
CONFIRMING BANK
CORRESPONENT BANK
NEGOTIATING BANK
BENIFICIARY
REIMBURSEMENT BANK

Page 64 of 88


4.3.2.4 Advantages and Disadvantages of Documentary Credit

DOCUMENTARY CREDIT
Advantages Disadvantages
IMPORTER * An importer can be assured the
exporter has complied with certain
steams and conditions as specified in
the D/C before payment.
* He can insist of shipment of goods
with in a certain time by stipulating a
latest shipment date.
* He can have export advice from
his Banker as to the D/C terms.
* He can ask for financial
assistance from his Banker such as
T/R.
* Protection offered by DCP500.
* Since Banks deals in document
only : Goods may not be the same
as these specified in the credit.
* I ssuing Bank are obligated to
pay even through the conditions
of goods may be poor.
* D/C commission are relatively
costly.
* Line of credit or application
is necessary before an importer
can open an D/C, this may cause
extra inconvenience and is time
consuming.
EXPORTER * The risk of non payment is
lower provided he complies with
D/C terms and condition.
* I t is a safe method through
which to obtain prompt payment
after shipment.
* The exporter can have export
advice from his Banker.
* The exporter also can seek
financial assistance from his
Banker before the buyer makes
payment, such as negotiation of
export Bills advance etc.
* I t is comparatively costly.
* Sometimes, the terms and
condition can not be fulfilled
such as unreasonable shipment
date and expiry date, adding on
D/C the clause of Restriction
of a designated vessel to be
informed by D/C amendment .
* The goods are shipped before
receiving payment; So it is not
100% safe.

Page 65 of 88


4.4 EXPORT Bills

They deal with incoming L/Cs from various Banks. BASIC usually serves as an advising
Bank; but sometimes at request it also serves as confirming and negotiating Bank.


Chart 4.7: Export amount in other Banks

Chart 3.7 shows the export amount in other Banks (2010 and 2011).

This department has to verify L/Cs. As a confirming Bank, BASIC takes responsibility over
the issuing Bank. If the issuing Bank does not pay the beneficiary then BASIC has to as an
advising Bank its job is to verify the L/C, and if it passes their checklist ; Advise it. If all
documents are in accordance with the L/C then payment can be authorized.


Chart 3.8: Export

Chart 4.8 shows the increasing export in million taka over time supported by BASIC Bank
0
5000
10000
15000
20000
25000
30000
2010 2011
BASIC Bank
Prime Bank
Dhaka Bank
0
2000
4000
6000
8000
10000
12000
2007 2008 2009 2010 2011
Export

Page 66 of 88


4.4.1. Export financing

Pre shipment credit

Post shipment credit

Financing of exports constitutes an important part of Bank activities. The exporter needs
finance at various stages; some at the Pre shipment stage and the other of the post
shipment stage.

4.4.1.1. Pre shipment credit

Pre shipment credit, as the name suggest, is given to finance the Activities of an
exporter prior to the actual shipment of good. Pre shipment credit is essentially as
short term credit and liquidated by negotiation or purchase of export bills covering the
merchandise. Generally, the Bank grants pre shipment credit against irrevocable,
confirmed, unrestricted letter of credit received by an exporter from an overseas
buyer.

Pre shipment credit given under the following arrangement:
1. Cash credit against hypothecation:
Under these arrangements a credit is sanctioned against
hypothecation of the raw materials or finished goods intended for export.

2. Cash credit against pledge:

Not infrequently, a cash credit limit is sanctioned against pledge of
exportable goods or raw materials.

3. Cash credit against Trust Receipt:

Under this arrangement credit limit is sanctioned against trust receipt.

4. Packing credit:

This facility is generally extended when the goods become ready for the
shipment for a very short period. Packing credit is given to
the exporter against the security of railway receipt, steamers receipts etc.

Page 67 of 88


5. Back to Back Letter of Credit:

Under this arrangement the Bank finances an export by opening a letter of
credit on behalf of the exporter who has received a letter of credit from the
overseas buyer but is not the actual manufacturers of producer of the
exportable goods.

6. Advance under Red clause Letter of Credit:

Under the red clause Letter of Credit, the Bank provides advance to the
exporter prior to shipment under the authority of the opening Bank.

Procedure for sanction of pre shipment finance:

The following are some of the points that must be borne in mind for this purpose:

1. Export Letter of Credit should from a reputable Bank abroad whose status has to
be ascertained. The letter of credit should be irrevocable, unrestricted, and valid
and preferably confirmed.

2. Expiry date of letter of credit should be properly recorded in the book.

3. The credit worthiness of the exporter and his exporter performance are to be
invariably ascertained.

4. The period for which the credit is sanctioned should be clearly mentioned.

5. Incase of pledge Bankers effective control should be mentioned.

6. Charges documents and other necessary documents as stipulated in the sanction
letter should be properly obtained.

7. Guarantee / Policies should be obtained under the export credit scheme
administered by Insurance Company.

Page 68 of 88


4.4.1.2. Post Shipment Credit

Post shipment credit is given to the exporter by Banks after the actual shipment of
goods. The necessity for post shipment credit arises because the exporters who have
shipped the goods have to wait for a long receiving payment for the overseas buyers;
the period of waiting depends on the terms of payment. The exporter needs funds to
carry on his normal export activities.

BASIC also finances the export at post shipment stage on verification of the credit
worthiness and soundness of both the buyers and the seller by preparing application
for limit (AFL).

1. Negotiating documents under letter of credit

The document generally include

(a) Bill of exchange or Draft
(b) Bill of lading
(c) Insurance Policy
(d) Indent / Proforma Invoice
(e) Invoice
(f) Certificate of origin
(g) Inspection certificate
(h) Packing list
(i) Weight list and
(j) Any other documents specially called for in the letter of credit.

2. Purchase of DP and DA bills

The provision of finance by way of negotiation of documents against payment (DP)
and documents against acceptance (DA) bills is generally made in favor of the
exporter who have been given bill purchase limit.

The Bank should obtain instruction from the drawer of the bill covering the following
aspects:

Documents against payment or acceptance
Instruction to protest

3. Advance Against Bills for collection:

The Bank generally accepts bills for collection of proceeds when they are not drawn
under a letter of credit or when the documents, even through drawn against in L/Cs
contains some discrepancies

Page 69 of 88


4.4.2. Operating procedure
1. Telex / Swift Messages:

The procedures are as follows according to the system:

The following Telex and SWIFT Messages to be received from the
Register:

1. Export L/Cs
2. Amendments
3. Other messages:

Note:
a. For unauthenticated messages telex is to be sent to our
correspondent for authentication.
b. Some messages are to be sent to local Bank for test
authentication.
c. Bills and L/C related messages to be filled in the
respective fill.

2.Advising:


Take reference for Telex, SWIFT and mail L/Cs and amendments from the
L/C register.
Fill up L/C checklist.
Insert L/Cs and amendments in the system.
Making photocopy of all messages.
Mail outside Dhakas L/C and amendments by courier and pack mail.

3. Document Mailing


Type bill schedule.
Endorse bill of exchange and shipping documents.
Endorse in L/Cs.
Photocopy of the documents.
Shorts Bills.
Mail clients information

Page 70 of 88


4.4.3 Methods of payment in export sales
The following methods of payment are ranked in the order of measuring risk to the exporter.
In other wards, they are increasingly unfavorable to the exporter but favored by the importer.

A. Cash in advance

B. Documentary credit or L/C
(note: this already explained above the bills import)
C. Documentary collection
(note: this defined to next section)
D. Open document

A. Cash in advance

Cash in advance gives exporter the greatest protection because exporter
either before shipment or upon arrival of the goods receives of payment.

Sometimes exchange controls of the importers country may cause payment delays or
even prevent method it most suitable.

1. Pays exporter before exporter makes
Delivery of goods

2. Delivery of goods upon receipt of
Payment

Diagram 3.9: Cash in Advance

B. Open account

The credit items are arranged between the buyer and the seller, but the seller has little
evidence of the importers obligation to pay a certain amount at the certain date. This
payment method is, therefore, risky for the seller.
IMPORTER
BUYER
DRAWEE
EXPORTER
SELLER
DRAWER

Page 71 of 88

Chapter 4: Foreign Trade Activities of BAS

Diagram 3.10 shows open account procedure

1. Exporters ships the goods before being paid

2. Importer makes payment upon
Receipt of goods

Diagram 4.10: Open Account

Although the payment method bears a higher risk for seller, open accounts sales have greatly
expanded due to the major increase in international trade, and the sellers eager to major
export volume.
A comparative statement of the methods of payment is given below with the classification of
risk category and merits and demerits of each method:

Method Risk Chief advantages Chief disadvantages
Cash in advance L No credit extension is
required.
Can limit sales potential
disturb some potential
customer.
Sight draft M/L Retains control and title;
Ensured payment before
goods are delivered.
If customer does not or
cannot accept goods, goods
remains at port of entry and
no payment is due.
Letter of credit
Irrevocable
Revocable

M
M/H
Bank accepts the
responsibility to pay; payment
upon presentation of papers.
If revocable, terms can
change during contract
week.

Time draft
M/H
Lowers customer resistance
by allowing extended
payment.
Same as sight draft, plus
goods are delivered before
payment is due or received.
Consignment sales M/H Facilities delivery; Lowers
customer resistance.
Capital tied up until sales;
must establish distributions
credit worthiness; need
political countries; increased
risk from currency controls.
Open account H Simplified procedure; No
customer resistance.
High risk; Seller must
finance production;
increased risk from currency
controls.

* L: Low risk ; M: Medium risk ; H: High risk
IMPORTER
BUYER
DRAWEE
EXPORTER
SELLER
DRAWER

Page 72 of 88


4.5 Collection

Collection are a method of settling the monitory side of international Trade transactions in
both goods and services. Where goods are Involved, the documents allowing the buyer to
take delivery of these Goods will be routed through Banks in the exporters and importers
Countries.

Chart 4.11 Bills for Collection


Chart 4.11 shows that the total amount of bill for collection over the
year. It is increased very sharply growth rate during the 2001 to 2005.

There are two types of collection.

1. Documentary Collection

2. Clean Collection

The first type is documentary collection, which means collection of:

Financial documents and commercial documents.
Commercial documents only.

The another type is clean collection. It consists of one or more bills of exchange or
promissory notes, for obtaining cash. Clean collection requires no other commercial
documents to be attached.

0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
2007 2008 2009 2010 2011
Bill for Collection

Page 73 of 88


Please refer to the diagram on 4.12 for an explanation of
various steps in the operation of the collection: -

Diagram 4.12 shows the collection procedure

1. Goods shipped to buyer

4.Present 5. Makes payment or 7. Pays export
document accepts draft
for payment
2. Forward
Documents

6. Sent payment

3. Forward Documents
Forward Documents

Diagram 4.12: Collection

4.5.1 Documentary collection

These collection entails the use of commercial documentation, they are concerned
with goods and, although not obliged, Bank frequently take steps to protect the goods
in their customers interests.

The payment instruction in a documentary collection is usually a bill of exchange,
which is drawn by exporter (Seller) on the importer (buyer)

The bill of exchange that can be drawn is the following two types:

1. Sight bill: A bill of exchange drawn by the drawer (exporter) at sight for immediate
payment.
2. Term bill: (usance bill) A bill of exchange drawn by the drawer (exporter) and
provides times for the drawer to pay at a fixed or determinable future date, such as 30
days sight.
PRESENTING
BANK
EXPORTER
SELLER
PRINCIPLE
IMPORTER
BUYER
DRAWEE
COLLECTING
BANK
REMITTING
BANK

Page 74 of 88


4.5.2 Clean Collection

Collection, which do not include goods but consist of documentation only, usually a
bill of exchange, or occasionally a check, is known as clean collections. They are
frequently used for the settlement of trade on open account and for service rendered,
rather than goods supplied. They are very simple for Banks to process since goods are
not directly involved.

The term Collection applies to the procedure under which payment to the client for
a check, draft or similar instrument is made only after the proceeds have been
received from the Drawer. Thus Collection requires special handling.

4.5.3 Advantages and Disadvantages of Clean Collection

COLLECTION
Advantages Disadvantages
IMPORTER
* For clean collection, buyers
can take possession of the
goods before payment.
* For D/A collection, the buyer
can inspect and sell the goods
before payment.
Terms bill provide the buyer
with a period of credit from the
exporter. Hence its liquidity
can improved.
* If he default on an accepted Bill
of exchange (Notwithstanding the
poor condition of the goods).
Legal action can be taken against
him.
* If he refuse to accept or pay a
bill, pretest by the exporter
against non acceptance or the
exporter can take non payment,
this can damage the reputation of
the importer.
EXPORTE
R
* It is cheaper than D/A.
* A presenting Bank may have
influence over the foreign
buyer and thus he more able to
collect the payment than an
open account basis.
* Exporters may obtain
immediate payment by
negotiation of the bill or
applying for Bank advance.
* Exporter can retain control
over the goods D/P.
* Loss of control over goods
under D/A.
* No guarantee that buyer will
pay because Presenting Banks
are to collect the Payment only.
* In case of delays or difficulties,
an exporter has to bear all the cost
arising such as demurrage charges
in the importers country.
* He has to bear buyers credit
risk and country risk.

Page 75 of 88


4.6. Banks facilities and Services to Exporter and Importer

4.6.1. Export facilities and Services

Overdraft (O/D): Overdraft are granted to a customer in order to finance his
daily business requirements and assist his cash flow position.

Bills (Advance): The Bank may agree to offer thus type of finance if thinking
that the Exporter is reliable

Negotiation of export bills: After the beneficiary has effected shipment, he may
present documents to his Banker for negotiation. Sight bills might be negotiated
by the exporters Bank.

Performance Bond: This is a written instrument, issued by a Bank or a surety
company, stating that the exporter will comply with the terms of the contract with
the buyer, otherwise the buyer will receive compensation for any losses suffered
as a result of the exporters failure to perform under the contract.

Guarantee/Indemnity: Guarantee and Indemnity are Banking service available
to both exporters and importers.

Red clause credit: It is a pre-shipment finance granted to the exporter by and at
the risk of the issuing Bank.

Packing loan: The purpose of packing loan is to help the exporter to buy raw-
materials for production or to buy the necessary goods required by the D/C.

Letter of Indemnity: It is a undertaking given by a Bank on behalf of his
customer to another Bank. The Bank giving the promise is primarily liable.

Leasing: This is a financial arrangement in which the Banks and their subsidiary
companies known as lesser of leasing companies hold the title to property or
equipment which the customer known as the leases use it.

4.6.2. Import facilities and services
A. Overdraft (O/D)

B. Documentary Credit Facility (D/C)

C. Loan against imported merchandise: LAM is an advance to the
importer based on the imported goods as the security.

Page 76 of 88


D. Trust receipt facility: This is a document executed by a customer who
agrees to hold the goods in trust for and on behalf of the Bank.

E. Shipping Guarantee: A shipping guarantee is an undertaking given by a
Bank on behalf of his customer to a shipping company to return the
original transport documents.

F. Collection

4.7. Remittance

Designing a global Remittance policy,

The task facing International financial executives is to co-ordinate the used of the various
financial linkages in a manner consistent with value maximization for the firm as a whole.
This tasks require the following four inter-related decisions:

1. How much money (if any) to remit
2. When to do so.
3. Where to transmit these funds
4. Which transfer method(s) to use

A common or shared responsibility with cash development is the custodianship of the volt.
Two groups independently monitor the inflow and outflow of financial instruments to and
from the volt. Bangladesh Bank checks deposits are processed for collection from
Bangladesh Bank.


Chart 4.13 shows Remittance in Million taka of BASIC Bank. It is shown that BASIC Banks
Remittance business has been increased by steady growth rate during the year 2008 2011.

0
5
10
15
20
25
2008 2009 2010 2011
Remittance

Page 77 of 88


Remittance Department

This Department deals with the basic paying and receiving of funds into the Bank, for the
clients. They transfer, or wire money abroad as well as locally through TT or SWIFT, etc..
They work very closely with the cash department. They also sell Government bonds to clients
and organizations.

Remittance Department works as an intermediary for clients and actions taken on their
accounts. Automatic credits and debits are not necessary done, especially in cases of
International transactions. They deal with fund transfers both locally and abroad as well.

A principal mode of remitting fund abroad is through SWIFT. Other traditional mode TT,
Telex, Mailing of Drafts, and transfer of TCs is also used. In both case of incoming and
outgoing remittances the purpose is to be disclosed. Local fund transfer is also done here,
there areas of transfer activities include:

1. Issuance of Pay order
2. Salaries
3. TT to any where the country
4. TT to other parts of the country

4.7.1 I nward Remittance

Function in Inward Remittance

Step 1: Fund Received

Step 2: Clarification by

I. Own Client
II. Other Client
III. Foreign Mission and International Bodies

Step 3: If the fund is for own client

I. Check faster account
II. Valid IRC Copy
III. Vat Register Certificate
IV. Check the fund account
V. Message transfer date

Step 4: Process the fund

Page 78 of 88


4.7.2 Outward Remittance
Outward Remittance

Bank Condition:
Client must have an account in BASIC

Process:
1. Travel Mucilaginous
2. Document transfer by SWIFT other transaction activities
Types of Transaction (Remittance Department):
1. Govt. Bond Sold
2. Govt. Bond interest paid
3. Other Bank check collection
4. NFCD Open
5. NFCD interest paid
6. NFCD Encasement
7. Credit Advance/Debit Advance
8. Outgoing Payment Instruction
9. Collection item both local/Foreign
10. Incoming Payment Instruction Pay order Installed
11. Salary Disbursed
12. Foreign Currency Draft Issued
13. Correspondence
14. Incoming Collection
15. Bangladesh Bank Check Collection

Page 79 of 88


4.8. Core Concept of Foreign Exchange

a. Foreign Exchange Business

In Foreign Exchange Business, the Commodity is Currency, Buying and
Selling of any currency against local currency is called Foreign Exchange
Business.

According to Bangladesh Bank order 1972, Foreign exchange means foreign
currency and includes any Instrument drawn, accepted made and issued under
clause 13 of section 16 of the Bangladesh Bank order 1972.

b. Foreign Exchange Rate

The rate of exchange is the price of the one currency expressed inters of
another currency. The rate at which exchange dealer would buy or sell foreign
exchange in terms of the domestic currency is known as the rate of exchange.

c. Foreign Exchange Transactions

All transactions related to FOREX are monitored and controlled by the
Treasury Department of the Bank. This Department is responsible for
providing all FOREX rate, interest rates. Basically there are two types of
transactions taking place through out of the Bank spots and forwards.
Approximately 95% of all FOREX transactions are spot transactions.

1. Different terms used in foreign exchange

Terminology of foreign exchange market. A foreign exchange rate is the price of one
currency expressed in terms of another currency.

Spot rate: A spot rate is a rate quoted immediately, for delivery of the currency to the
buyer within the working days.

Forward rate: The exchange rate quoted for transaction which called for the delivery
of the currency at future date.

Inter Bank market: This is a foreign market for commercial Banks only and the
rate is known as Inter Bank.

Page 80 of 88


A Forward Exchange Contract may be either fixed of option
1. Fixed means that performance of the contract may take place on a specified date in
the future.
2. Option means that performance of the contract may take place, at the option of the
customer, on any date before maturity.

Premium and Discount

Forward rate for a currency is quoted as an adjustment to the spot rate. This department
Is at a either Premium or a Discount.
If the forward rate of a currency is more expensive than the spot rate, it is
quoted in premium
If the forward rate for a currency is more cheaper than the spot rate, it is quoted
in discount.

Buying rate and Selling rate

Buying rate means the Bank is buying the currency. The customer is selling the
currency to the Bank in this transaction.
Selling rate means the Bank is selling the currency. The customer is buying the
currency to the Bank in this transaction.

Exchange rate is quoted in Buying rate and Selling rate, the difference of the rate is
Called Spread.

2. Relevancy of Foreign Exchange Revenue for BASIC

Revenue generated in Foreign Exchange (FOREX) business has turn out to be an
important element for generating income for BASIC.

Page 81 of 88


4.9. Factor Affecting Fluctuation In Exchange Rates

Medium and Long -Term Factors:
1. Balance of payment
If the country suffer from a balance of payment deficit, its currency will depreciate.
If, on the other hand, a country experiences balance of payment surplus, its currency
will appreciate.

2. Rate of Inflation
If the country suffer from high inflation rate, its currency will depreciate. On the other
hand, if a country experiences a relatively low Inflation rate, its currency will
appreciate.

3. Interest Rate
The currency, which gives a relatively high interest rate, will appreciate while the
currency, which only offer a relatively low interest rate, will depreciate.

Short Term Factors:
1. Official Intervention
2. Hot Money

Hot Money refers to money, which flows in for speculative purpose. When Hot
Money Flows into a country, its currency will appreciate and vice versa. Hot money is
a very substantial forces affecting the movement in exchange rate.

4.9.1 Exchange rate in Bangladesh and its function over time
Bangladesh currency is pegged to composite of nine currency. In Bangladesh capital
account transaction are regulated even through our currency is made convertible in
current account of the Balance of Payment in 1993 and therefore our exchange rate is
technically fixed.

The four factors that are usually taken into consideration while determining exchange
rate in Bangladesh are given below

Real effective exchange rate (REER has a positive relationship with exchange rate)

Balance of current account (BOCA has a negative relationship with exchange rate)

Foreign Exchange Revenue (FER has a negative relationship with exchange rate

Unofficial exchange rate (UER has a negative relationship with exchange rate).

Page 82 of 88


4.10. Ways of avoiding Exchange Risk

1. Forward exchange contract:

An immediately firm and binding contract
For the purchase and sale of a specified quantity
At a rate of exchange fixed at a time the contract is made.
For delivery at a future time

Types: Contracts
a) Fixed performance at a specified data in the future
b) Option : Performance at any data between two

1. specified date
(Note: Option under forward exchange contract should not be mixed up with
currency option).

2. Currency Option
3. Open a foreign currency account

Buy foreign currency and deposit it in a foreign currency account. Any receipts
and payments are to be made from this account so as to avoid any losses in the
movement of exchange rate.

Page 83 of 88

Chapter: 5

Findings, Recommendations & Conclusion

Page 84 of 88

Chapter: 5

Findings, Recommendations & Conclusion

5.1. Findings
In recent years, the foreign exchange business of BASIC Bank ltd is increasing at a faster
rate. As a state owned scheduled bank, BASIC Bank Ltd is playing an important role toward
the growth and economic development of Bangladesh. BASIC bank is rendering a stable
support to the national foreign exchanges business. Although the foreign exchange business
is increasing day by day there are also some obstacles around it which are as follows:

1. One problem relates to technology, the bank must try to adopt new
technologies. Otherwise the profitability of the bank may hamper.

2. To meet the challenges in the banking industry and to help employees to adapt
to the changes and new working condition, training is essential but no such
training center has yet been established in BASIC Bank. Moreover, training
given to employees is not adequate.

3. Besides, SWIFT is being used in some branches and the head office of the
bank for trade finance related operations like documentary credit,
documentary collections, fund transfer, guarantee, etc. with optimum security,
but not in all branches.

4. The officers are very helpful to the business men. Some of our business men
do not know exactly the procedures of opening L/C. the officers of BASIC
bank help them properly to execute their business.

5. To make the process easy, bank should give emphasis to use the modern
communication media like e-mail, fax, internet etc.

6. Modern technical equipment like computer, ups, modem etc. is not sufficient
in foreign exchange department, which results in the delay of exchange
process.

7. The data base system of foreign exchange department is not very systematic.
Also documentation and filing process of foreign exchange operation is not
user friendly, which sometimes wastes valuable time.

8. Letter of credit (L/C) opening system for the importer is easy. it consumes
time and money as well.

Page 85 of 88

Chapter 5: Finding, Recommendation & Conclusion

5.2. Recommendations

I had the practical exposure in BASIC Bank Ltd. for just twelve weeks, with my little
experience in the bank in comparison with vast and complex banking system, it is very
difficult for me to recommend. We have observed some shortcomings regarding operational
and other aspects of their banking. On the basis of my observation we would like to
recommend the followings:

The branch need to set up well designed IT section by using more updated
technology and information.
Adequate on the job training is required for the newly employed personnel.

SWIFT service should be introduced in each and every branch of the bank, which
will help to smoothen the foreign exchange operations of the bank.

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

The bank should do more advertisement for attracting new customers.

Bank needs sufficient computer, ups, modem etc for foreign exchange department.

The bank should develop an effective database system to analyze the data of
foreign exchange business.

Bank should provide emphasis to make the documentation and filing process of
foreign exchange operation user friendly.

Letter of credit L/C opening system for the exporter should be easier.

I think the Management should employ at least few more employee in foreign trade
department as I have seen from my practical experience that many customers wait for a long
time for any service as they see that only one concerned official is doing their best to meet the
requirements of the customers.

Page 86 of 88

5: Finding, Recommendation & Conclusion

5.3. Conclusion

BASIC Bank Ltd. is committed to Boost up export, reduce import, raising of Gross Domestic
Product (GDP) and increase employment.
All the branches of BASIC Bank Limited are authorized dealer of Foreign Exchange
Business. The authorized dealer motivates the importer to import Raw materials, Fabrics,
Frozen fish, jute items, and electronics goods, Accessories, Chemicals, and Vegetable Fat
etc.

The import or exports are motivated by the BASIC Bank Limited to the foreign exchange
business, particularly to open the letter of credit. A letter of credit offer advantages both to
the importer and exporter. The advantages accruing to either of the parties differ depending
upon the nature of credit opened. There are certain Common benefits accruing from the use
of credit as under.
BASIC Bank Limited is playing a vital role in financing import and exports of the country.
Without Bank's co-operation, it is not possible to run any business or production activity in
this age. Exports and import need finance in various stages of their activities. Export and
import financing need letter of credit (L/C), payment against documents (PAD), loan against
imported merchandise (LIM) etc. All these facilities are being provided by BASIC Bank
Limited. For this purpose Bank considers the borrower's business standing, integrity, liability
with the bank and term and conditions of the L/C. There is lot of risks involved in foreign
exchange business. So, the Basic Bank Limited has to clearly serve the customers from a
neutral point and gather the current information about the market.

Page 87 of 88

Part Three
Appended Part

A: Bibliography

I n Text
1. Foundation of International trade finance, KWLUK, The Hong Kong Institute of
Bankers.

2. Multinational Business Finance Eiteman, Stonehill and Moffelt. 6
th
edition.

3. Multinational Financial Management, Allan C. Shapiro, 4
th
edition.

4. Business Finance, Prof. M Shahjahan Mina, 3
rd
edition.

5. Annual report of Exim Bank, Prime Bank and Dhaka Bank, 2005.

B: Appendices:

On profile of BASI C Bank

1. BASIC Bank Limited ;Annul Report 2011&2010

2. BASIC Bank policy Guide lines on Foreign Exchange 2009

3. BASIC Bank Limited Several Booklist

4. BASIC Bank prospectus

Online

1. http://www.basicbanklimited.com/

2. basicbanklimited.com/files/Annual_Report_2011_BASIC_Bank.pdf

3. http://www.basicbanklimited.com/Annual_Report_2010_BASIC_Bank.pdf

Page 88 of 88

Appendix - 01
Bank Performance at a glance

This section deals with performance analysis of BASIC highlighting the certain aspect of
BASIC through chart and the situation of spread, Burden and productivity indicator over the
last five years.

Progress at a glance 2007 2008 2009 2010 2011
From the Balance sheet(Million in TK)
Authorized Capital 2000 2000 2000 2000 5000
Paid-up Capital 1247.4 1309.77 1455.3 964.65 2357.59
Reserve & Surplus 1349.17 1672.82 2468.65 2509.78 3124.17
Shareholder's Equity 2596.58 2982.59 3923.95 4474.43 5481.76
Fixed Assets 196.11 228.36 232.65 283.12 364.46
Total Assets 38773.91 4660.03 54308.31 61569.38 78031.73
Deposits 31947.98 38368.23 34501.69 49259.6 62650.73
Long-term Debt 1385.81 1708.4 2875.16 2718.46 2788.15
Loan & Advances 22263.35 27269.13 29261.53 46341.51 56884.76
Placement & Investment 13560.92 15659.03 12244.91 9294.02 13760.82
From the Income Statement
(Million Taka)
Gross Income 3,549.51 5,060.29 5,162.30 6120.53 8,825.20
Gross Expenditure 2458.41 3626.35 3,593.96 4,403.49 6,476.70
Profit before Tax 1091.1 1533.94 1568.34 1717.05 2348.5
Profit after Tax 282.96 549.86 648.85 660.93 976.11
Tax Paid (Cumulative) 2790.98 3538.01 4,225.37 4,948.64 5,987.61
Others (Million Taka)
Import Business 21,266.57 27,359.77 33,976.60 42,206 47,087.80
Export Business 16,794.96 22,270.87 19,887.70 23,999 33,061.10
Financial Ratios (Percentage)
Capital Adequacy Ratio 12.91 12.04 13.48 9.41 10.13
Capital Fund to Deposit Liabilities 9.23 7.81 11.37 9.08 10.36
Liquid Assets to Deposit Liabilities 49.1 47.7 24.67 12.06 58.01
Loan to Deposit Liabilities 69.69 71.07 84.81 94.08 69.74
Earning Assets to Deposit Liabilities 109.7 114.69 116.44 81.55 114.56
After Tax Return on Average Assets 0.83 1.3 1.41 1.24 1.23
Net Profit to Gross Income 7.97 10.87 12.57 10.8 12.81
Interest Magin Cover 176.8 137.08 135.79 95.15 214.56
After Tax Return on Equity 11.7 19.68 18.79 14.95 17.75
SMI/SSI Loan and
Micro Credit to Total Loan
Number of Branches 31 31 32 34 45
Number of Employees 721 735 776 964 601
56.73 59.32 56.93 56.78 67

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