Banking Performance of Rajshahi Krishi Unnayan Bank

A STUDY ON GENARAL BANKING & PERFORMANCE EVALUATION OF RAJSHAHI KRISHI UNNAYAN
BANK, RAJSHAHI BRANCH
1.1 MEANING OF INTERNSHIP
An internship is an agreement between a student and a company or organization for a fixed period
of time, such as a semester or quarter. A student agrees to work for them and they agree to mentor and
teach the student; internships can offer valuable insight into a particular field or career. Internship is
process to gain practical knowledge about some theoretical lesson. It is the application of knowledge,
which a candidate has gathered by academic subjects. And thus it helps to better decision making.
The concept of work experience, internships or cooperative education is not a 20 th century

development, as many believe. The concept of learning by doing goes back to the guild system in
Europe. The idea of combining work and education in America was formally initiated in 1906 by
Herman Schneider at the University of Cincinnati where it was referred to as cooperative education.
(http://www.intech.mnsu.edu)
Professor Schneider joined the University of Cincinnati in 1903 and began immediately to
solicit the interest of the faculty and industrial leaders in the merits of cooperative education.
Schneider was convinced of the efficacy of this concept after studying case records of Lehigh
University graduates, indicating that those who showed marked engineering ability had worked while
attending college.
The concept of internship was introduced in University of Rajshahi with the introduction of
Business Faculty. From then internship is an academic requirement for all the students of MBA.
Generally this internship program varies from 15 days to 3 months.
1.2 Objectives of Internship:
The following list of program objectives has been extensively reported in literature
discussing internship programs. The College of Business subscribes to the following objectives but
does not expect each student to achieve every objective. Many of the program objectives will only be
important to a few students, but each student should achieve a substantial portion of those listed:
Table-1: Objectives of Internship
1. Internships will provide students the opportunity to test their interest in a particular
career before permanent commitments are made.
2. Internship students will develop skills in the application of theory to practical work
situations.
3. Internships will provide students the opportunity to test their aptitude for a particular
career before permanent commitments are made.
4. Internship students will develop skills and techniques directly applicable to their
careers.
Department of Finance and Banking University of Rajshahi

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5. Internships will aid students in adjusting from University to full-time employment.
6. Internships will provide students the opportunity to develop attitudes conducive to

effective interpersonal relationships.
7. Internships will increase a student's sense of responsibility.
8. Internship students will be prepared to enter into full-time employment in their area
of specialization upon post graduation.
9. Internship students will acquire good work habits.
10. Internship students will develop employment records/references that will enhance
employment opportunities.
11. Internships will provide students with an in-depth knowledge of the formal functional
activities of a participating organization.
12. Internships will provide students the opportunity to understand informal
organizational interrelationships.
13. Internship programs will enhance advancement possibilities of graduates.
14. Internship students will have higher levels of academic performance.
15. Internship programs will increase student earning potential upon graduation.
16. Internship programs motivate students to continue their education.
1.3 BENEFITS OF INTERNSHIP
Benefits to the Student:
1. Benefits in Career Exploration and Decision-Making

2. Networking and Professional Connections
3. Helps a student to match theoretical knowledge with practical experience.
4. Make familiar with the activities of corporations.
Benefits to the Organization:
1. Professionals in the sponsoring organization have access to new concepts and ideas through the
intern.
2. The sponsor has a chance to assess the intern without making a long-term commitment.
3. The internship can help employers do needed projects.
Benefits to the University

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1. Provides an opportunity for the university to relate academic training to job requirements.
2. Uses many community facilities and resources for educational purposes making it possible for the
university to provide education in fields that it could not otherwise serve.
3. Enables the university to keep abreast of developments in the business and industrial world.
4. Provides a direct avenue through which the university can meet community needs. Benefits to the
Community
1. Provides the community with an increased source of well-educated workers.

2. Provides the community with a labor force that is more thoroughly educated than graduates who have
not had work-experience education and hence works more efficiently.
3. Increases cooperation between the community and the university. Increases the possibility that young
people will remain in the community after MBA.
1.4 METHODOLOGY
Both primary and secondary information has been collected for the purpose of this report.
The primary sources of information:
Face to face conversation with the bank officers.
Face to face conversation with the clients.
Exposure on different desk of the bank.
File study.
The secondary sources of information:
Annual report of RAKUB.
Profile of RAKUB.
Periodicals published by Bangladesh Bank.
Different publications on banking functions, foreign exchange operation and credit policies.
Previous internship reports Prospectus of RAKUB.
1.5 Limitations of Internship
We know that practical training is essential to acquire a complete knowledge. But practical
knowledge is not easy to obtain. There are many limitations of internship. These are as follows:
It is impossible to know fully about an organization within a very short term.

Sometimes an organization cannot provide the real figure of its organization because of secrecy.
Observation of the activities of an organization is difficult tasks.
Lack of necessary elements and aspects are the problem of proper Internship.
Lack of proper data is another problem of practical training.
Lack of proper knowledge for the collection of primary and secondary data

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Lack of maintaining proper books and modern technology

In many cases, the bank is not interested provide their information for maintaining secrecy
Department of Finance and Banking

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University of Rajshahi
At present Bank such lifeblood of economy and importance of the Bank is unlimited. That economy
and trade are turned to concentrate it. Bank does not only help for giving loan, even helps various
financial transactions. As a result the importance of banking activates to increase day by day.
Bangladesh economy reliant on agriculture and consider the mainstay of economic life of the people.
Most of people of our country are depending upon agriculture directly and indirectly. Development of
this country depends upon the development of agriculture, because Major portion of National Income
comes from agriculture. But the financial conditions of the farmer of our country are not satisfactory
and their purchasing power of agricultures materials is very low. Most of the farmers live under
poverty line. They could not get seeds, fertilizers, modern technology of cultivation and irrigation in
proper time. In case, Rajshahi krishi Unnayan Bank provides to supply their needed.
2.1 INTRODUCTION
Rajshahi Krishi Unnayan bank is a specialized bank and the largest sources of agricultural credit in
Rajshahi division. It was established by the president s order no. 58 of 1986.The main function of the
bank was started on 15 th March in 1987.At that time RAKUB took over the whole operations of
Bangladesh Krishi bank (BKB) within the administrative division of Rajshahi along with its assets
and liabilities.
The north-west region of our country is the driest and poorest area with a high population
density and low rate of urbanization (13%). The north west-region consists of 16 districts of entire
Rajshahi administrative division with an area of 34513 sq. km. and estimated population of 2705
million. The populations of this area are to be suffered poverty from various degrees of deprivation.
To overcome those problems and improve the condition of the poor, RAKUB supply
agricultural credit, the bank extends its credit facilities for employment and income generating
agrobased industrial and commercial activities. RAKUB is playing a vital role both in agricultural
and industrial developments as well as eradication of poverty.
2.2 Historical Background of RAKUB:

i) Past History:
Most of the people of Bangladesh are related with agriculture from the very beginning. The farmers
of our country were oppressed in various ways at the time of British rule. We know that many
farmers lost their properties because they could not repay their debt. At that time, they took credit
from the local lenders and other landlords to produce crops and other purposes. On the others hand
they took Dadan from the moneylender, but when they would repay the money with interest, they
would become landless day by day. Since the small farmers become the marginal farmers, at first the
Indian British Govt. took a step to disburse the agriculture loan to the farmers of the Bengal since
1902, which continued from 1905.
For the socio-economic development of the small and marginal farmers of Bengal, the Indian British
Govt. took a step for the second times to disburse agriculture credit in 1932, which continued till
1935.
Some rules and regulation of British and financing condition of local landlord, moneylenders etc like
Dadan business, farmers become hopeless helpless. Seeing the bad and helpless condition of the
farmers, the bold voice of Sher-E-Bangla A.K. Fazlul Haque stood beside the farmers and he tried to

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establish the Rin Shalishi Board for the greater interest of the farmers, as a result many farmers
who were engaged with the oppression of the moneylenders and landlords, breathed with peace. That
is why, the people at that time recollected Sher-E-Bangla as Haque shaheb.
ii) Pakistan period:
In 1947, the Indian was separated from the British rule and in Indian sub-continent two independent
countries were originated namely India and Pakistan. Our Bangladesh was indicated as East Pakistan
as a part of Pakistan. After that time the Pakistan Govt. recognized a financial institution by the name
of Agricultural Development Finance Corporation (ADFC) to disburse loan is agricultural sectors is
1952. In 1957 then the Pakistan Govt. established another financial institutions namely Pakistan
Krishi Bank feeling the agro-production and the importance of agro-loan. This institution started its
function from 1958.
iii) Bangladesh period:
Bangladesh freed through the Great liberation war is 16 December 1971. After liberation period The
Pakistan Krishi Unnayan Bank was re-named as Bangladesh Krishi Unnayan Bank. After this,
the classification of this bank was made as the Bangladesh Krishi Bank with the ordinance number
27 of the president 1973.Various organizations are working independently after achieving freedom.
As a result, the consciousness of people is increasing than before liberation period. The creation of
Water Development Board, Bangladesh Rice Research Institute , Rural Electrification Board
and other necessary institutions are made. Control of flood, rice of new quality and introduction of
other crops and the increment of its demand, the increment of demand of people towards the
institutional credit a specially SACP or as result of circulating a special credit program amounting to
Tk.. 1 core etc. have influenced many farmers to be bank oriented. It becomes very difficult for some
limited bank to meet up the multiple demand of loan specially crop-loan. Since Bangladesh is an
agro-based country, the demand for the loan of Krishi Bank has increased remarkably. It becomes
very difficult for a Dhaka based head office of Krishi Bank to manage agro-loan in the remote areas
of the country. For this reason, then the Govt. felt to decentralize the Krishi Bank in the divisional
areas. The people of the North-west areas of Bangladesh are lagging behind in all respects than other
parts of the country. For this reason, Rajshahi Krishi Unnayan Bank was established in 1986 with the
ordinance number 58 of the president. RAKUB started its functioning from 15 March, 1987.
2.3 OBJECTIVES OF RAKUB

The main objectives of RAKUB is to be given loan to the basic sector/sub sector and
supplementary sector of the agriculture such as crops production, animal husbandry, poultry, farming,
fishery, livestock dairy, horticulture, forestry, purchasing machinery for irrigation and agriculture
goods and inputs trade, storage of agriculture goods, establishment of processing and marketing
oriented industry, agro based industry. Some objectives of RAKUB are as follows
1. To provide credit facilities for agricultural development of poor farmers in Rajshahi division.
2. To develop the agro-based industries.
3. To alleviate poverty.
4. To modernize the agricultural.
5. To develop the social state of the villagers.

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6. To inspire the farmers for taking loan as micro credit.

7. To increase self-dependence of land less marginal and small farmer.
8. To develop socio-economic condition of the farmers of the North-West region of the country.
9. To play a vital role to increase agriculture production, create income generating activities.
2.4 FUNCTIONS OF RAKUB
As the largest development partner in the northwest region Rajshahi Krishi Unnayan
Bank aims at overall development of farmers and all the sectors and subsectors of agriculture in this
region. Besides, catering to agricultural credit the bank performs ancil lary functions as financing
agri-business and agro-based industries and poverty alleviation programs.
2.5 MANAGEMENT
A seven-member Board of Directors is entrusted with the responsibility of policy formulation for
attainment of growth in agriculture leading to economic development of the country through
agricultural credit support. The government appoints all the directors of the board. An executive
committee constituted of the Chairman and two other directors including the Managing Director is
there for taking emergency decisions. The managing Director is the chief executive of the bank.
2.6 CAPITAL
RAKUB is a governmental banking institute. So the main sources of capital are

government fund, as on 30th June 2011 the details about capital are as follows-
1) Authorized capital: Tk. 7500 million

2) Paid up capital : Tk. 5700 million
3) Reserve capital : Tk. 208.50 million
2.7 ORGANIZATIONAL STRUCTURE
The head office is stationed at divisional headquarters city of Rajshahi . The branches network of
the bank comprises 367(Rural-306, Urban-61) branches including one in Dhaka. Eighteen zonal
offices stationed in district headquarters control branches under them. The General Manager's office
at Rangpur oversees activities of 9 zones of greater Rangpur, Dinajpur districts. There are 18
independent regional audit offices for conducting regular audit in branches and zonal offices. The
only training institute of the bank is situated at Rajshahi. There are 3309 employees (29.12.2011) of
the bank of which 2046 are officers and 1263 other staffs.

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Exhibit 1: Organizational Structure with details
2.8 BRANCH NETWORK
Region wise branches of RAKUB are given through table now.
Table-2: Region wise total branches (Up to 29th December, 2011)

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SL. No. Zone/Region No.of

Branches
01. Rajshahi 25
02. Naogaon 28
03. Natore 21
04. Chapai Nawabgonj 16
05. Bogra (North) 20
06. Bogra (South) 14
07. Pabna 24
08. Jaipurhat 15
09. Rangpur 27
10. Gaibandha 24
11. Nilphamari 20
12. Kurrigram 21
13. Lalmonirhat 17
14. Dinajpur (North) 17
15. Dinajpur (South) 18
17. Thakurgoan 18
18. Panchagarh 18
19. Dhaka 1
20. L.P.O (Rajshahi) 1
21 Sirajgonj 22
Total 367
(Source: Personnel department of RAKUB)
2.9 RAGULATORY BODY
The board is vested with the responsibility of formulation of policy in line with
attainment of growth in agriculture and economic development of the region through agricultural
credit support. The board of directors is constituted by seven members, all appointed by the

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government. Besides, for emergency decisions there is an executive committee constituted of the
chairman of the board and two other members: the managing director and one of the directors elected
by the board. The managing director is the chief executive of the bank.
Table-3: Regulatory Body
Chairman Prof. Dr. M. Shah Nowaz Ali
Managing Director Mr. Pradip Kumar Dutta
Director Abdul Mannan
Director Khondoker Jahangir Kabir Rana
Director Prof. Dr. Rustom Ali Ahmed
Director Mr.Bikash Indu Mandal
Secretary A B Siddque
2.10 HIGHLIGHT OF OVERALL ACTIVITIES OF RAKUB
Table-4: Highlights of overall activities (as on 30th June 2011)
SL. No Particulars Taka

1 Authorized capital ( On 30-06-2011) 750,00,00,000
2 Paid up capital 570,00,00,000
3 Total assets 3765,06,32,550
4 Total deposit 1538,97,55,298
5 Total loan and advances 2711,20,80,472
6 Total contingent liability 70,65,64,886
7 Loan deposit ratio 1:0.57
8 Ratio of classified loan against total loan & 1:0.34
advances
9 Profit/(loss) after tax (64,08,65,618)

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10 Amount of classified loan 933,35,89,000

11 Provision for classified loan 186,23,22,000
12 Provision for surplus/deficit 89,57,93,000
13 Cost of fund 8.30%
14 Interest earning assets 2574,26,02,983
15 Nonperforming assets 1190,80,29,567
16 Return on investment(ROI) 17,40,545
17 Return on assets (ROA) 197,47,18,147
18 Interest on investment
19 Income per share
20 Income price ratio
Source: www.rakub.org.bd
2.11 RAKUB AT A GLANCE: (Up to 30th June, 2011)

Table-5: RAKUB at a glance
01) Establishment : 15 March, 1987.

02) Authorized Capital : Tk. 7500.00 (in million)
03) Paid up Capital : Tk. 5700.00 (in million)
04) Reserve : Tk. 208.50 (in million)
05) Area of RAKUB :
a. Area : Rajshahi & Rangpur Division
b. Spread : About 34,513 Square.K.M.
c. District : 16
d. Upazilla : 125
e. Union : 1092
i) SACP : 908
ii) Non- SACP : 184
f. Total Populations : About 3.50 crore
g. Total No. of Family : 51 lakhs.
h. Agricultural Family : 32 lakhs.
06) Total Branch : 366
i) Municipal : 61
ii) Union : 306

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07) Total manpower : 3309

i) Officers : 2046
ii) Workforce : 1263
08) Zonal /Regional office : 18
09) Regional Audit office : 18
10) Website : www.rakub.org.bd
3.1 LOCATION
Rajshahi Branch of RAKUB Rajshahi district is started its operation 15 March, 1987 at
Ghoramara, Rajshahi the branch caters the need of agricultural credit alleviation program and at the
same time reforms commercial banking function in its geographical area.
3.2 ESTABLISHMENT OF RAJSHAHI BRANCH
Rajshahi Branch of Rajshahi Krishi Unnayn Bank started its operation in 15 March, 1987 as
a Rajshahi branch, in Rajshahi. It is located at eastern side of Rajshahi in sonadighimore Rajshahi. It
is an ideal branch of head office.
3.3 MAIN OBJECTIVES OF RAJSHAHI BRANCH, RAKUB

Provide credit facilities for agricultural development to poor & marginal farmers of Rajshahi
division.
To develop the agro- based industries.
To provide poverty alleviation.
To modernize the agriculture.
To developed the social state of villagers.
To assist farmers in adopting appropriate technologies under the bank's supervision that means
helping in modernize the agricultural sector.
To provide general banking service.

To earn normal profit for meeting the operational expenses, building reserve and expansion of
activities to cover wider geographical areas.
3.4 FUNCTIONS OF RAJSHAHI BRANCH
Like other banks Rajshahi branch does the following activities:

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I.Receive deposit from customers;

II. Payment to customers according to payment order given through check by customers;
III. Disbursements of loan and recovery of the given loan;
IV. Giving advice to the client of the bank;
V. Transfer money from one place to another place; VI.
Western Union Money transfer.
3.5 RAKUB RAJSHAHI BRANCH AT A GLANCE

Table-6: RAKUB Rajshahi Branch at a glance
1. Establishment 15th March 1987
2. Area About 1315 km2

Malopara,Rajshahi City Corporation,Shaheeb Bazar
3. Location Rajshahi.
4. Total no of Accounts 3580
5. Total deposit Tk. 412401453
6. Total no of loanee 4290
7. No of employee 25 (with security guard)
8. No of village 125

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3.6 ORGANIZATION STRUCTURE OF RAKUB, RAJSHAHI BRANCH
Exhibit 2: Organizational Structure of RAKUB, Rajshahi Branch

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3.7 EMPLOYEE SUMMARY

Table-7: Employee summery of Rajshahi branch
SL No Designation Authorized Existing Vacant
01 Assistant General Manager (AGM) 01 01 0
02 Principal officer 01 01 0
03 Senior officer 05 05 0
04 Officer 07 07 0
05 Supervisor 02 02 0
06 Supervisor(Cash) 02 02 0
07 Computer operator 01 01 0
08 Data entry operator 02 02 0
09 Peon 01 01
10 Security Guard 01 1 0
Total 23 23 00
Source: 2nd officer, Rajshahi Branch, RAKUB.
4.1 INTRODUCTION
The main function of a bank is collect deposit from public or organizations and to give
among them. RAKUB of Rajshahi Branch, Rajshahi also performs General banking includes deposit
service, local currency remittance and other related functions, which are discussed in this chapter.
4.2 FUND OF RAKUB

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Sources of Fund: Uses of Fund:
Deposit of customers; Payment to

Recovered loan; client/Depositors;
Refining fund from Bangladesh Bank against the paid up loan; Loan disbursement;
Received fund for special loan credit program from various Payment to other branch;
international institutions; Payment to head office;
Loan from head office; Misc. office exp
General reserve;
Money receipt from sale of assets; Loan from other branch.
By issuing different types of Bill.
4.3 SERVICES GIVEN TO CUSTOMER BY RAJSHAHI BRANCH

Different deposit related services provided by the bank are mentioned below; A)
Deposit Service:
1) Current Deposit Account

2) Savings Deposit Account
3) Term Deposit Account
a) Short Term Deposit Account (STD)
b) Deposit Pension Scheme (DPS)
c) RAKUB Deposit Pension Scheme (RDPS)
d) Fixed Deposit Account B) Commercial Service:
a) Demand Draft (DD)
b)Mail Transfer (MT)
c) Telephone/ Telegraphic Transfer (TT)
d)Payment Order (PO) C) Loan Service:
a) Short Term Loan

b) Medium Term Loan
c) Long Term Loan
The above services of RAKUBs Rajshahi branch are discussed in following pages respectively;
4.3.1 Deposit Services:
The bank gives importance to accumulation of rural small savings through its branches.
RAKUB renders all sorts of deposit banking services to its over one million valued customers. The
bank operates deposit accounts like Savings Bank Accounts, Current Deposit Accounts, and Short
Term Deposit Accounts & Fixed Deposit Accounts.
Exhibit 3:

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Deposits
Demand Deposit Time Deposits
Current A/C STD A/C Saving A/C
FDR DPD RPS HS RSS RGPS
The following three types of accounts are available at Rajshahi branch

1. Current Account:
From this type of account any amount of money is deposited and drawn at any time in the
office hours. There is no interest on current account. Bank over draft is sanctioned based on it. This
account is opened with minimum deposit of Tk.1000.
2. Savings Account:
Savings account opened for the individual customers except companies, firm and Co-operative
society. Money is withdrawn two times a week and deposited at any time in the office hours. If an
account holder draws money from account he/she will not get interest for that month. To open an
account bank requires Tk.200 only.

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A STUDY ON GENARAL BANKING & PERFORMANCE EVALUATION OF RAJSHAHI KRISHI UNNAYAN BANK,
RAJSHAHI BRANCH
3. Term deposits:
a. Short Term Deposit Account (STD):
Short Term Deposit Accounts are opened for company, business firms and government
demonstrative body. This account is operated like current account.
b. Deposit Pension Scheme (DPS):
It is one kind of deposit program circulated by government. In this savings scheme a person
receives the opportunity to build up saving by contributing monthly installment to get an attractive
fixed amount at the end of a specific period. The size of monthly installments is Tk. 100, Tk. 200,
Tk. 300, Tk. 400, Tk. 500, or which is to be deposited within the first week of each month. In this
case compound rate of interest is charged.
c. RAKUB Pension Scheme (RPS):

RAKUB has some savings schemes to motivate the people for savings. In this case RPS is
regarded as the special product of this bank. The RPS is same as DPS. But terms of savings of RPS
are 5 years and 10 years.
d. RAKUB Grameen Pension Scheme (RGPS):

It is for the grameen poor people to motivate them increase in savings. It is same as DPS &
RPS.
e. Fixed Deposit Account (FD):
Fixed deposits are taken for the following terms:

From one month to below three months
Above three months to below six months
Above six months to below one year
Above one year to below three years
Above three years
Table-8: The rate of interest in deposit accounts
SL. No Types of Accounts Interest rate
1 Current Account No interest

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RAJSHAHI BRANCH
2 Savings Account 7%
3 Fixed Account 8% to 9.5%
4 Short Term Deposit(STD) 4%
5 RAKUB Pension Scheme(RPS) 12%

6 Deposit Pension Scheme(DPS) RAKUB 10 to 12%
7 Grameen Pension Scheme(RGPS) 6%
Source: Manager, Rajshahi Branch, RAKUB
4.3.2 Commercial Services
The following types of commercial service are available in RAKUB s Rajshahi branch
a. Demand Draft (DD):
DD is the most popular instrument of remitting fund. It is an order to pay money drawn by one
branch Payable to another branch on demand. DD is issued in against at 0.10% (minimum Tk.30
plus vat 15%). When the limit exceed commission amount increased in a certain rate.
b. Mail Transfer (MT):

This branch transfer money another branch of this bank in another place in against of
commission money of this security paper has to be transferred to an account of another branch. Here
the bank commission is 0.10% and the postal charge is Tk.20, telegram cost Tk. 50, telephone cost
Tk. 50.
c. Telegraphic Transfer (TT):

It is the quickest method of remitting fund from one place to another. In this procedure no
instrument is sent to the paying branch. Only message is sent over telephone or telex and the paying
branch makes payment after getting message. Here the bank commission and charge is same to MT
d. Payment Order (PO):
It is a written document. This PO can be encased on that branch from where it is issued.
Several supplier organizations use this PO and here no account is needed to open with bank. It is
issued locally.

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RAJSHAHI BRANCH
PO Up to Tk. 1000 Up to Tk. 100000 Over Tk. 100000 Up to Tk. 500000

and over
Rate Tk. 20 Tk. 30 Tk. 50 Tk. 100

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RAJSHAHI BRANCH
Exhibit 4:
Customer Services at a glance provided by Rajshahi Branch
DD
MT
TT
Money transfer
PO
Western union
money transfer
Advice
Same Bank
Customer Customercheck
services collection
Other Bank
Electricity Bills
Customerbills Water Bills

collection
Telephone Bills
Table 9: Commission charged on commercial service

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RAJSHAHI BRANCH
Service Charge Tk.
Demand Draft 0.10%(minimum Tk. 30)+VAT
Telegraphic Transfer 0.10%+VAT with Tel. cost
Payment Order
Up to Tk.1000 Tk.20+VAT
Up to Tk.1,00,000 Tk.30+VAT
Over Tk.1,00,000 Tk.50+VAT
Up to Tk.5,00,000and over Tk.100+VAT
Mail Transfer Minimum Tk.30+ Postal

cost(Tk.50)+VAT
Cancellation Charge of DD, MT, TT, PO
Up to Tk.500 Tk.25+VAT
Over Tk.500 Tk.50+VAT
Source: Manager, Rajshahi Branch, RAKUB.
4.3.3 Loan services:
Banks loan portfolio has been classified under the following heads;
a) Short Term Loan (STL): Loan period is 1 year.
b) Medium Term Loan (MTL): Loan period is above 1 to 5 years.
c) Long Term Loan (LTL): Loan period is more than 5 years

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RAJSHAHI BRANCH
4.4 SECTORS IN WHICH RAKUB EXTEND CREDIT
Rajshahi Krishi Unnayan Bank, Rajshahi branch extends credit in sectors and sub sectors,
which are as follows:
Table -10: Description of project to extend credit
SL. Name of the Project Description of project item

No.
01 Tea industries Seeding production, Tea garden development, Tea marketing.
02 Rubber plantation Rubber garden development, Rubber production and marketing.

project
03 Poultry Poultry boiler farms, Poultry hatchery, Poultry feed and allied
project.
04 Mixed farming Dairy live stock and Fishery based horticulture crops; Agriculture
based poultry dairy and fishery project.
05 Black Bengal goat Black Bengal goats, Sheep & Cattle farming for quality meat
production production, and Meat processing and Marketing.
06 Dairy farming Milk production, Milk collection and processing.
07 Agro based industries Commercially profitable sweet water fish and Shrimp feed
production, Ice plant, Ice-cream factory and so on.
08 Agro-equipment Engineering work shop for Agro-equipment, Repairing agro
production equipment and Marketing.
09 Cold storage Cold storage for potato preservation, Specialized mini-cold

storage for fruits, Vegetables and Fish preservation.
10 Export processing Fish freezing plant, Fish dehydration plant, Leather processing
and manufacturing Leather products.
11 Animal and fish feed Poultry and Fish feed meal production, Cattle, Goat, and Lamb
meal production feed meal production.
12 Import substituting Fish net manufacturing/Netting yarn production, Insecticide

goods production production.

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4.5 INTEREST RATE ON LOAN
Bank determines the interest rate differently for different sector. Considering interest rate on
deposit, administrative cost, bank rate, interest rate at others bank and financial institutions,
competitive money market etc, the banks use its rate of interest on loan.
Table-11: Rate of interest in different sectors.
SL No Heads of loan Rate of interest
01 Crops loan 10%
02 Fisheries 12%
03 Export credit 7%
04 Working capital 13%
05 Commercial purpose 11%
06 Agro-based industries 13%
07 Cottage industries 10%
08 SECP 15%
09 Poverty alleviation 12%
10 Live stock 10%

11 Irrigation equipment and firm machinery 10%
12 Other Special Program 4%
Source: Manager, Rajshahi Branch, RAKUB
4.6 PROCEDURE TO OPEN AN ACCOUNT AT RAJSHAHI BRANCH
Though RAKUB is a specialized Banking institution, it provides commercial Banking facilities.

As a commercial function, it provides opportunity for the customer to open account with the Bank.
Opening account is an agreement between the customer and the Banker. The general procedure to
open account with RAKUB is given below:
(i) Obtaining proposal from a prospective customer. (ii)
Obtaining the form duly filled up with KYC form (iii)
To Supply the account opening form.

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(iv) Obtaining the form properly filled up.

(v) Interviewing the applicant.
(vi) Having introduction.
(vii) Collecting at least three-specimen signature in the signature card supplied by the Bank.
(viii) Providing deposit book and obtaining initial deposit.
(ix) Having accounts number.
(x) Providing cheque book in order to with draw deposited amount from current and saving account.
In case of joint accounts, the applicant must furnish the following information - (i)
The name of the person who will operate upon the account and sign cheques.
(ii) At the event of death of either or any of the accounts holders how the balance will be paid and to
whom the securities will be devolved. The documentary requirements are almost a like the individual
accounts. Account opening form and the special instruction must be signed by all the joint account
holders to signify their consent.
Things considered to open an account are:
Proper fill up of the application form. Getting an specimen signature of a customer Taking
initial deposit in cash.
Basically a person whose age is 18 years or more is competent to open an account with the
bank. But there are some special types of account holder like joint account, minor account, illiterate
person account, blind person account, Deaf and dumb account etc. The following parties can never
open an account with the bank-
Person who is still bankrupt.

Person whose mind is unsound.
Person who is totally mad.
4.7 PROCEDURE TO CLOSE AN ACCOUNT
In order to close an account (some time before maturity in case of FDR) the holder has to
place a written application to the bank. After receiving the application the bank will deduct service
charge at an amount necessary for the respective account as closing fee from the balance and rest of
the money is given to the account holder.
4.8 WHEN BANK CLOSE AN ACCOUNT
The relationship between bank and his customer is a contractual one and may be terminated
by either of them. Bank closes an account in the following situations;

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1. If a customer places written application to the bank to close his account.

2. If the customer does not properly follow the rules and regulations necessary to operate his
account.
3. If the bank is notified the message of death of a customer.
4. If the bank receives a notice regarding the insanity of his customer.
5. If the bank receives any order from court regarding the closing of the customer s account.
4.9 TYPES OF ACCOUNTS HOLDER
There are the following types of account holder in RAKUB Rajshahi branch:
I. Individual Account II.
Joint Account
III. Non Business Firm IV.
Business Firms.
4.10 SPECIAL TYPES OF ACCOUNT HOLDER
Banker and customer are is a contractual relationship provided and account is opened with
the bank. A person is considered competent when his or her age is eighteen (18) old years or more to
open of an account with the RAKUB. Besides these, there are some special types of account holders
in Rajshahi branch who are listed below: i. Minor:
A minor with the RAKUB can open an account, but he or she cannot operate his or her account. The
minor will have a guardian who will operate the minor s account. In this account money can be
deposited only and it cannot be withdraw until the minor reaches his or her 18 years old. ii. Illiterate
persons:
Persons who are illiterate can open accounts in the bank but no cheque is supplied to them. They will
have to put thumb mark in front of the manager and they are given loose cheque to withdraw money.
iii. Blind persons:
Persons who are blind can open account in the bank and the procedure is same as the illiterate
persons. In both the cases, the terms and conditions of opening accounts are to read out in front of
them. If they agree with it, the accounts are opened.
iv. Pardanashin Women:
A pardanashin woman can open an account with the RAKUB but she has to agree with the statement
that she must be ready to put signature in front of the manager to judge the similarity between her
putted signature and the specimen signature at the time of with drawing money. v. Dumb and Deaf:
The dumb and the deaf can account with the bank but the banker should be cautious about the
background and the character of the said persons.
The under mentioned three persons can never open account with the RAKUB.

32
The individual who is totally mad

The individual who is still bankrupt
The person whose mind is unsound, that is lunatic.
4.11 CASH PAYMENT
In this section I gathered practical experience about how a check is honored and how cash
is paid. The formalities involved in honorees of a check and cash payment are given below: The
formalities involved in honorees of a check and cash payment are given below-
COUNTER
Customer places the check to the ledger officer (LO). The LO receives the check, enters its
particulars in a register and issues the customer a token.
VERIFYING THE CHECK

The LO now verifies the ledger of the customer. If the customer s account position is okay, he
passes the check to the second officer (SO).
HONORING THE CHECK

The SO compares the customers signature given on the check with that on the signature card kept
in his custody. If the signature is okay then he makes an entry of the check in another register and
cancels it by signing across the check.
CHECK CANCELLATION
Once the check is cancelled that is Okayed for payment it Is brought to the cashier by a peon.
DRAWING MONEY
Cashier enters the amount of the check in the cash register and pays the appropriate amount to the
customer.

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POSTIN IN THE TRIAL BALANCE

At the end of banking hour a trial balance is prepared from the registers and all the registers are
compared with one another.
4.12 CASH RECEIPT
Customers deposits are received in this section of bank. Then the amount received is
credited to the customers A/C in the ledger book. The formalities that are followed to receive a
customers deposit (cash) in the cash receipt section are stated in the following flow chart-
Customer places this cash and deposit slip before the respective officer at
the counter.
After receiving the cash and deposit slip, the officer makes an entry to scroll register book. Then the
deposit slip and cash are placed before cashier.
The cashier counts this amount of money first and then makes an entry to another register book. The
book is generally called cashbook.
Then the cashier passes the cashbook and deposit slip to the second officer.
After verifying the deposit slip, the second officer returns the counter-folio of the deposit slip to the
customer and keeps the other position in his custody.
At the end of banking hour, trial balance is prepared from that cash receipt register.
4.13 CHEQUE HONORING PROCEDURE

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I. After placing the cheque, the respective Banker issues a token;

II. The Banker also given an entry into register;
III. The Banker puts token number and initial behind the cheque.
IV. The Banker provides ledger posting of the cheque amount; and marks it on the cheque, V.
The second officer now places a pay order in the cheque.
VI. The cheque is sent to the cashier and, and
VII. Finally the cheque amount is paid to the customer against his respective token.
4.14 CHECK DISHONORED BY BANK

During the internship program, I was taught how a check is dishonored by bank. The statutory duty
of a bank is to honor his customers check. But a bank can dishonor a check for various reasons.
Some of the reasons for that a bank dishonors his customer s check are stated below
I. If the customers account position is not okay, that is if the amount of money mentioned in the check
is greater than customers deposit.
II. If the check is torn.
III. If the check is post dated or a stolen checks.
IV. If the customers signature given on the check is a forged one or does not tally with his specimen
signature kept in bank custody.
V. If the check is not submitted to the customer within banking hour. VI. If the duration of issuing
the check is more than 6 months. VII. Others.
4.15 CONCEPT ABOUT CASH SCROLL, CLEAN CASH,GENERAL

LEDGER AND GENERAL LEDGER ABSTRACT
Cash Scroll:
At first those transactions are maintained in this cash scroll by the authorized officer, which occurred
every day. There after the, cashier maintained those transactions in daily transaction register.
Clean Cash:
When the vouchers are closed, the accounts are written in the pure cashbooks. It may be either
deposit or expense. The transactions of each head, which have occurred, are written in the specific
page of the cashbook under a specific head and debit and credit total are determined. There after, total
of every head is written in the right page of the clean cashbooks. But this is the cashbook, the closing
balance of the previous day is shown as an initial balance for the next day then the closing balance is
determined for that day.
General Ledger:
General Ledger is the heart of a Bank. The balance of clean cash is recorded in this Ledger head
wise.
General Ledger Abstract:

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The debit balance of various accounts makes General Ledger Abstract. The debit and credit balance
of the accounts are maintained in the Abstract in the debit and credit side respectively. Since the
double entry system is maintained, therefore its debit and credit are equal.
4.16 ACCOUNTING PROCEDURE
The main objectives of maintaining the accounting procedure of RAKUB, Rajshahi branch are
to achieve in following goals:
To record the day-to-day transaction.

To reflect the financial position periodically.
To supply the necessary information for monitoring the Bank activities.
The Bank generally uses two types of Books. A) Control Book:
It presents the immediate accounting figure of the Bank at any time and it includes
Cash Scroll Book
Clean Cash Book
General Ledger
General Ledger Abstract
Supplementary Ledger Book B) Subsidiary Book:
It is used to arrange the total particulars in General ledger and it includes:

Savings Account Ledger
Fixed Deposit Ledger
Income Ledger
Expenses Ledger
The General Ledger of RAKUB.
4.17 DIFFERENT TYPE OF VOUCHERS

Voucher is a kind of document which as a proof accuracy.
i) Payment Voucher: Sanctioned crops loans are paid through payment voucher.
ii) Transfer Voucher: This voucher is used to transfer Tk.. from one account to another in case of inter
Banking. Its color is yellow.
iii) Debit Voucher: To deposit or get Tk.. Its color is white. iv) Credit Voucher: Voucher for
repayment. Its color is green.

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4.18 PROCEDURE OF LOAN RECOVERY

The main responsibility of bank manager and loan officer is to recover the outstanding loan.
Rajshahi branch, RAKUB uses the following two procedures with a view to recovering loan;
a) Usual procedure.
b) Legal procedure.
Issue of Demand Notice: Demand notice is issued to the borrower before one month being due of
outstanding loan or installment.
Legal Notice: If the borrower does not repay their respective loan and interest after maturity, being
received the demand notice registered with acknowledgement by post to the borrower, then the bank
should send legal notice to him.
Special Notice: Beside the above two notice a special notice with the signature of DC, UNO is sent to
the respective borrower to keep mental pressure on him for repaying the loan.
Field Recovery: Loan officer recover the loan through I.O. receipt by visiting the spot and source of
the borrower.
Personal Communication: If the borrower fails to repay his loan installment, the loan officer
communicates with the respected persons of that area to give mental pressure to the borrower so that
he repays his respective loan.

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Banking Performance of Rajshahi Krishi Unnayan Bank

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Banking Performance of Rajshahi Krishi Unnayan Bank

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A STUDY ON GENARAL BANKING & PERFORMANCE EVALUATION OF RAJSHAHI KRISHI UNNAYAN

BANK, RAJSHAHI BRANCH

1.1 MEANING OF INTERNSHIP

The concept of work experience, internships or cooperative education is not a 20 th century

1.2 Objectives of Internship:

Department of Finance and Banking University of Rajshahi

5. Internships will aid students in adjusting from University to full-time employment.

6. Internships will provide students the opportunity to develop attitudes conducive to

14. Internship students will have higher levels of academic performance.

16. Internship programs motivate students to continue their education.

1.3 BENEFITS OF INTERNSHIP

Benefits to the Student:

1. Benefits in Career Exploration and Decision-Making

Benefits to the Organization:

Benefits to the University

Department of Finance and Banking University of Rajshahi

1. Provides the community with an increased source of well-educated workers.

1.5 Limitations of Internship

It is impossible to know fully about an organization within a very short term.

Department of Finance and Banking University of Rajshahi

Lack of maintaining proper books and modern technology

Department of Finance and Banking

2.2 Historical Background of RAKUB:

Department of Finance and Banking University of Rajshahi

iii) Bangladesh period:

2.3 OBJECTIVES OF RAKUB

Department of Finance and Banking

6. To inspire the farmers for taking loan as micro credit.

2.4 FUNCTIONS OF RAKUB

RAKUB is a governmental banking institute. So the main sources of capital are

1) Authorized capital: Tk. 7500 million

2.7 ORGANIZATIONAL STRUCTURE

Department of Finance and Banking University of Rajshahi

Exhibit 1: Organizational Structure with details

2.8 BRANCH NETWORK

Region wise branches of RAKUB are given through table now.

Table-2: Region wise total branches (Up to 29th December, 2011)

Department of Finance and Banking

SL. No. Zone/Region No.of

(Source: Personnel department of RAKUB)

2.9 RAGULATORY BODY

Department of Finance and Banking University of Rajshahi

Chairman Prof. Dr. M. Shah Nowaz Ali

Managing Director Mr. Pradip Kumar Dutta

Director Abdul Mannan

Director Khondoker Jahangir Kabir Rana

Director Prof. Dr. Rustom Ali Ahmed

Director Mr.Bikash Indu Mandal

2.10 HIGHLIGHT OF OVERALL ACTIVITIES OF RAKUB

Table-4: Highlights of overall activities (as on 30th June 2011)

SL. No Particulars Taka

9 Profit/(loss) after tax (64,08,65,618)

Department of Finance and Banking

10 Amount of classified loan 933,35,89,000

2.11 RAKUB AT A GLANCE: (Up to 30th June, 2011)

01) Establishment : 15 March, 1987.

Department of Finance and Banking

07) Total manpower : 3309

3.2 ESTABLISHMENT OF RAJSHAHI BRANCH

3.3 MAIN OBJECTIVES OF RAJSHAHI BRANCH, RAKUB

To develop the agro- based industries.

To provide poverty alleviation.

To modernize the agriculture.