Stamford University: Overall Banking System of NCCBL

Overall Banking System of NCCBL
Chapter 1
Introduction
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1. Background of Banking Sector

After liberation of Bangladesh in December 1971, it inherited an undiversified and
undeveloped financial system. Out of historic necessity, government nationalized and
reorganized all the financial institution and made them to achieve the economic objective of the
government. Since 1972, the financial institution of Bangladesh used to operate under a regime
of rigid government control and central bank regulation. The regulations covered fixation of
interest rate on deposits and credits, directions of credits to public sector enterprises and priority
sectors, directed expansion of bank branch etc. Till 1982, all the financial institutions were kept
under the ownership as well as regulatory control of the government.
During the period, 1972-1982, financial network of the banking system increased
commendably. The total number of branches increased 13.36 % annually during 1973-1983. At
the same time, population per branch reduced remarkably form 50,945 to
20,761. The urban-rural proportion of branches, deposits and credit improved significantly in
favor of rural to extension of banking services to the rural area and extension of generous credit
to public manufacturing enterprises. It is imperative that as the financial network of a country
increases, than economic regulations for the matter of improving on the operations of financial
markets economic regulations monopolized whole regulatory structure of Bangladesh financial
system. Consequently, financial institution pursued a policy of rapid credit expansion to priority
areas in response to government directives with little regard to loan quality. Sound credit
analysis was replaced with socioeconomic considerations. Many rural branches were opened
without considering viability aspects. Lending rates, especially for priority sectors, were kept at
such a lower level which did not cover the risk and actual cost factors. As a result, a huge
proportion of the asset proportions of the financial institutions became overdue. Debt recovery
performance was also poor due to inadequate laws for debt recovery and ineffective debt
recovery efforts on the part on the financial institutions themselves. All these had been reflected
through decline in the profitability of the nationalized commercial banks.
Since 1983, the government of Bangladesh started taking ownership reform measures in the
financial sector. Two out of six NCBs were denationalized and a number of private commercial
banks were allowed to operate by the government. It was thought that these measures of
denationalization and privatization would generate competition and improves the level of
customer services and operational efficiency of the banking sector.
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1.1. Objective:
By this way private commercial bank squander its ensign of victory. Now Bangladesh has a
number of commercial banks, which helps general people and investors. So those who are
helping us in every steps, we must know about them, thats why objective of this report are-
To know about different deposit account, required documents to open any account and its
processing.
To know easier, faster and safe way of transferring money.
To achieving knowledge regarding various loans and its facilities.
To maintain a business smoothly we must know L/C opening procedure, required documents,
different charges etc.
To know about all these activities we have focused to a private commercial bank that National
Credit & Commerce Bank Ltd.. From there we collect all required information that will help
us to acquired knowledge about its products and services.
1.2. Scope and data collecting methods:
This report is based on different products and services of NCC Bank Ltd. Through this report
general people will be able to know about banking activities.
To prepare this report both primary and secondary source are utilized. Primary sources include:
Personal observation
Personal interview
Secondary sources include:

Internal records
Books, journals, annual report.
Website
1.3. Limitations
In briefly, I faced following limitations during the time of preparing this report.
Since I was an intern NCCBL, I was not allowed to stay in all the departments for a long
period. That is why it was really a big difficulty for me to prepare art internship report.
As per Bank compliance, as an intern I was unable to obtain indispensable experiences of

different departments.
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Due to time shortage, details of many aspects have been skipped in this report.
One of the main barriers in writing this report was the confidentiality of data. Though I saw
their internal procedure that is being used in processing and evaluating, but I was told
strictly not to disclose tat even in my internship report.
In spite of these limitations I tried my best to prepare the Internship report and disclose the
information at best possible way to make the report more productive and efficient.
While preparing this report I have faced some problems:

In each department there are lots of activities and different procedure. It is very difficult
to understand each activity within this short period.
In few departments they dont continue their work sequentially
There are some specific periods when customers come frequently and some time they
dont. If we work in that particular time we can gather more knowledge but this is not
possible for every department.
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Chapter 2
NCCBL and Its

Overview
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2.1 An Overview of NCCBL
The present day bank structure has evolved over several decades. The far reaching program of
economic reform is being carried out at present towards efficient utilization of scarce resources
and the development of private entrepreneurship. In the ever changing business environment,
financial intermediaries are gradually guided by market forces and regulation. Competition is
strengthened by the entry of new and innovative providers of financial services through the
development of Money Market and Capital Market. Under the ongoing financial liberalization
program, The NCC Bank Limited emerges as a fast growing, leading and prominent bank in
the private sector to operate on the commercial arena of Bangladesh. The NCC Bank Limited
has already occupied a challenging position among its competitors after achieving success in all
areas c business operation. This is catering both the Conventional and Islamic mode of
interests. It offers all kind of Commercial Corporate and Personal Banking services covering
almost all segments of the society. To serve the customers through capacity building across
multi delivery channel is one of the main strategies of the NCC Bank Limited. The bank
gradually is increasing the number of branches, for coming nearer to its customer by providing
various convenient services. Thus, in the local market the operation of the NCC Bank Limited
is highly appreciated for its customer oriented focus.
2.2 Historical Starting

The institution started its function back in 1985 as an investment Company in the name of
National Credit Limited (NCL) with a Paid-up capital of Tk.50 million only. NCL performed
well for near about 7 years. The core objective of the company was to play a catalyst role in the
Capital Market of the country by way of participating in security trading, underwriting etc.
However in 1992 in the backdrop of closure of BCCI and BCI. This investment company, NCL
faced a severe setback in respect of business.
With active initiative taken by the members of the Board and the Management team. The
company could overcome the problem and get it converted into a full-fledged Commercial
bank on 17-05-1993. After obtaining license from Bangladesh Bank as National Credit and
Commerce Bank Limited (NCCBL) re-flexing the Authorized Capital at Tk.750 million and
Paid up Capital at Tk.390 million of which Tk. 195 million was subscribed by the sponsors at
that time.
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At present authorized and paid up capital of the bank rose to Tk.2500 million and Tk970
million respectively.
At present the bank operating through 48 branches at some key points of the country. A
professional team of bankers is running the day-to-day operation of the bank.
2.3 Objectives of the Bank
To value and respect the customers and maintain harmonious banker- customer
relationship.
To strive for good profit and sound growth
To contribute towards the formation of national capital.
To achieve and sustain in the domestic leading market position in both customer
and corporate banking sector.
To be the most efficient bank in terms of technology application.
2.4 Values of the Bank

To have a strong customer focus arid build relationship based on integrity, superior
service and mutual benefit.
To work as a team to serve the best interests of the group.
To work for business innovation and improvements.
To value and respect the people and make decision based on the merit.
To provide recognition and reward on performance.
To be responsible, trustworthy and law-abiding in every sphere.
To become the base bank in respect of service, profitability and strength.
Provide the greatest return to the shareholders by achieving sound profitable growth.
Being perceived by customer and staff as the best whenever it operates.
Have staff of the highest caliber.
Work together to make decisions, manage change and get things done.
2.5 Mission of the Bank

To mobilize resources from within to the development and growth of the country.
To play a catalyst role in the formation of capital market.
Anticipating business solutions required by all our customers every where and
innovatively supplying them beyond expectation.
Setting industry benchmarks of world class standard in delivering customer value
through our comprehensive product range, customer service and all our activities.
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Maintaining the highest ethical standards and a community responsibility worthy of a

leading corporate citizen
Continuously improving productivity and profitability and thereby enhancing
shareholder value.
2.6 Information about the Administration of NCCBL
.Office Automation
Technology, computer, internet these thins brings a new generation of banking service to the
customer. Eight to ten years ago customers cannot think about that they can withdraw or
deposit money from their account at least within one hour. But now it takes only at best five
minutes for withdraw their money. This is the simple example what technology brings to
banking sector. In before bankers has to maintain huge ledger book for their daily or any sorts
of banking record. But now they can do it by on click and by strike of few buttons. Online
banking is now getting more and more necessary part banking sector. NCCBL has also realized
the current fact and they also try to serve online banking service to their valued customer.
Though they don not launch online banking service extensively but within this year and next
year they are trying to introduce online banking service at least primarily for the branches of
Dhaka and some other key areas. Now they have only three branches under online banking
service. Mirpur branch, Dhamnondy branch, Uttara branch and Elephant Road branch are now
serving online banking service. These three branches have Wide area Network (WAN) among
themselves. So customers can get online banking service only from these three branches.
NCCBL has own software. They had Software named ADNAN-2004, but now they are
working with MICROBANKER which they purchase from India. They have web page
(www.nccbankbd.org). Customer can get detail information from the web page. NCCBL also
has credit card and ATM machine.
Audit Inspection Recovery Distribution
Although the loan Administration Division is not at per with the Credit Division of the bank in
terms of human resource, the performance of the bank relies heavily on this division. It is
responsible for credit monitoring, documentation, distribution L.D.Os (Loans, Discounts and
Overdrafts), preparing MSOCF (Monthly statement of outstanding credit facilities) and dealing
with TR (Trust Receipt) etc.
Human Resource Division
The necessary of having an efficient Human Resource Division is one of the unique
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requirements for the success of any business organization. National Credit and Commerce
Bank Limited unlike other commercial banks has a proficient Human Resource Division that
deals with recruitment and manpower planning, performance evaluation, disciplinary actions,
promotion, cadre charge, employee service rules and benefits, training and development. An
Executive Vice President leads this division with the assistance of a Vice President.
Information Technology Division
It is very significant to adapt with the ongoing information technology revolution to provide
faster services to the clients. The Information Technology Division supervises the overall
computerization of the banking operations and networking, provides system support, deals with
data processing and data entry, procures and maintain hardware, maintain and develop software
required by the bank to facilitate and support the day to day operations.
Training Division
The main objective of this division is to make the employees efficient. Usually this division
offers training to their employee time to time. This is helpful to the employee to do their job
efficiently and effectively.
Paid up Capital
The bank raised its paid up capital from Tk.552.55 million to Tk.607.8 1 million from 2003 to
2004. With the increase of Paid up capital to Tk.607.81 million, the capital based of the bank
has become strong.
Reserve Fund & Other Reserve
The reserve fund of the bank increased of Tk. 761.18 million in the year 2004 as against Tk.5
10.73 million of previous year.
Deposit
Deposit of the bank at the end of the year 2005 was Tk.2 1478.22 million, which is more than
deposit of 2004. From 1999 to 2002 the bank had a rising position but in 2003 it has decrease.
It had happened for increase competition in banking sector where, the customers are going to
the other banks. But in 2004 bank deposited are increases than previous year. This is happen
because increasing confidence of customer to NCCBL inspires people to make more and more
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deposited to NCCBL.
2.7.1 Management Hierarchy
Chairman
Vice Chairman
Director
Managing Director
Senior Executive Vice President
Executive Vice President
Vice President
Senior Assistant Vice President
Assistant Vice President
Senior Principal Officer
Principal Offider
Senior Officer
Officer gr -1
Officer
Junior Officer
Assistant Officer
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2.7.2Organizational Hierarchy
2.8. Products and Services Offered

General Service Savings Account
Current Account
Corporate Account
Short term Deposit
Deposit Service Fixed Deposit Scheme
Special Savings Scheme
Special Deposit Scheme
Monthly Income Scheme
. Monthly Savings Scheme
Education Saving Scheme
Loan Scheme Loan General
Terms Loan
Transport Loan
Project Loan
Loan against Imported Merchandise
Loan against Trust Receipt
Loan Against Packing Credits
Loan Against House Building
Housing Loan Scheme
House Repairing Loan Scheme
Consumers Finance Scheme
Festival Small Business Loan Scheme
Festival Personal Loan Scheme
Small Business Loan Scheme
Personal Loan Scheme
Cash Credit
Security Overdraft
Payment_against Document
Other Services Money Gram
Remittance,
T.T,
D.D
2.8 Profile at a Glance
PARTICULARS AMOUNT
Authorized Capital Tk.2500 million
Paid up capital Tk.975 million
Reserve fund & other reserve Tk.884.9 million
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Proposed bonus share Tk. 109.3 million

Total assets Tk.26114.1 million
Equity fund, Tk.1859.9 million
Import Tk.16290 million
Export Tk.7776.3 million
Number of Branches 48
No. of Employees 1000
Capital Adequacy Ratio 9.02
Chapter 3
Types of Account
&
Account Openning
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3.1 An Overview
Here, my topic is Overall Banking System of NCCBL of Foreign Exchange Branch. So, I
will discuses and analysis here mainly the banking system of NCC Bank Ltd. based on Foreign
Exchange main branch. The things that I will try to focus here - what banking operation they
have, and how they run the operation and what banking service products they have.
To run the banking system or procedure, NCCBL segregate the banking operation in some
department to do the work more efficiently.
Those departments are:
General Banking Department.
Advance and Loan Department.
Foreign Exchange Department.
And at the same time I will try to discus the online banking system of the NCC Bank Ltd.
In the account opening section the relationship between the client and bank begins with the
opening of an account: thus it is vital that bankers take good measures in making sure that the
customers are eligible since a lot of forgery is initiated through improper identification.
The opener has to fill up the forms according to the stated rules of the bank. If everything is ok
the banker will keep a number for he form and it will be noted as an account number and
deposit slip and Cheque book will be provided to the customer to start transaction.
It is also necessary to note who can open bank account. Further details will be provided when
explaining each type of account but below is list of who can open different types of account:
Individual
Sole proprietorship
Partnership Firm
Private/Public limited companies
Clubs
Societies
3.2 Types of Account

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A. Savings Accounts.
1. Individual A/C
2. Joint NC
3. Non trading concern.
B. Current Accounts
1. Individual A/C
2. Proprietorship A/C
3. Partnership NC
4. Limited Company NC
C. Fixed Deposit Receipt (FOR)
D. Short Term Deposit (STD)
E. Special Savings Deposit Scheme (SSS)
F. Special Deposit Scheme (SDS)
3.2.1 SAVINGS ACCOUNT
Savings account is meant for those who want to save a certain amount of their income and earn
interest on that for future needs. All features are more or less like that of CD a/c except for
some restriction that is imposed by the bank. Number of withdrawals over a period of time is
limited. The withdrawing amount is not to exceed 25% of the total balance.
3.2.2 CURRENT ACCOUNT
Individuals, sole proprietorship firm, partnership firm, limited companies be it private or public,
clubs, societies etc may open current deposits accounts. Current accounts are most suitable for
all types of organizations since frequent withdrawals do not result in a penalty. There is no
interest earned from current deposit account.
3.2.3 SHORT TERM DEPOSIT
Short-term deposits accounts are special notice account, which are kept under short term
deposit ledger. The rate of interest on STD is subject to change from time to lime. Any
withdrawals from this account require seven-day prior notice.
3.2.4 FIXED DEPOSIT RECEIPT
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Fixed deposit accounts are repayable after the expiry of the predetermined period fixed by the
customer. The period of the FDR ranges from three months to one year. Longer the period, the
rate of interest is higher. Amount of FDR is payable once a time. If the client does not
withdraw the amount and give further instructions for renewal within one month from the date
of maturity, then the FDR account would get renewed for a further three months and the rate of
interest would L prevailing rote for fixed deposit.
3.3 Rate of Interest on Deposit offered by the Bank
Types of Deposit Rate of Interest (0/0 per annum)

FDR for 1 months 8.00
FDR 6 months 12.25
Short Term Deposit 6.00
Savings Bank Deposit 7.00
Special Deposit Scheme 9.00
3.4 Requirements and Documents needed for opening Bank Account
A. Savings Accounts
1. Photographs (2 Copes)
2. Nationality Certificate
3. Tax Identification Number (if any)
4. Passport Photocopy (if any)
5. Introducers A/C Name & A/C No.
B. Current Accounts: Individual
1. Photographs (2 Copies) attested by Introducer

3. Introducers A/C Name & A/C No.
4. Transaction profile
5. Opening Deposit of Tk. 5000.00 (Min)
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C. Current Accounts: Proprietorship

4. Introducers A/C Name & A/C I
5. Trade License
6. Opening Deposit Tk.5000.00 (Mm)
D. Current Accounts: Partnership

2. Nationality Certificate of each Partner
3. Transaction. Profile
4. Introducers A/C Name and A/C No.
5. Opening Deposit Tk.5000.00 (Min)
6. Trade License
7. Partnership Deed
E. Current Accounts: Limited Company
1. Photographs (2 Copies of MD attested by Introducer

2. Nationality Certificate of MD
3. Introducers A/C Name, & A/C No.
4. Trade License
5. Memorandum of Association
6. Articles of Association
7. Certificate of Incorporation
8. Certificate of Commencement (In case of the Public Limited Coj
9. Resolution
11. Opening Deposit Tk. 5000.00 (Min)
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3.5 Account Opening Procedure
The relationship between banker and his customer begins with the opening of an account.
Initially all the accounts are opened with a deposit of money by the customer and hence these
accounts are called deposit accounts.
The deposit liabilities of a banker are classified into two categories:
Time liabilities or term deposit
Demand liabilities or demand deposit
3.5.1. Time liabilities or term deposit:
Term deposits are included all those deposits which are deposited with the bank for a fixed
period specified in advance such as fixed deposits or ten deposits. NCCBL provides different
types of term deposits service to their customer such as-
Fixed Deposit Receipt (FDR)
Sanchay Patra
Short Term Deposit (STD)
Barrier Certificate Deposit (BCD)
Special Saving Scheme (SSS)
3.5.1.1. Fixed Deposit Receipt:
These deposits are made for a fixed period specified in advance. The bank doesnt maintain
cash reserve against these deposits.
Here we will discuss four steps:
Opening of FDR
Closing of FDR
Different types of payment procedure
Loss of FDR
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Opening of FDR: The depositor has to fill in an application form wherein he mentions the
amount of deposit. The period for which deposit is to be made and the name in which the fixed
deposit receipt is to be issued. In case of a deposit in joint names, the banker also takes the
instructions regarding payment of money on maturity of deposit. The banker also takes the
specimen signatures of the depositor(s). A FDR is then issued to the depositor acknowledging
receipt of the sum of money mentioned therein. It also contains the rate of interest and the date
on which the deposit will fall due for payment.
Entry in the block: Banker will include following information in the FDR block-
issuing date, maturity date, received from (name of the FDR holder), the sum of Tk/- amount of
the FDR, as a deposit for a period of-number of month and interest rate. In the FDR form
banker has to write block no and customer account no.
Register in the khata: Through computer registration they will get the FDR
account no and block number. All these information will be registered in the register khata.
Format of register khata is given as follows:
Date Block # & Customer Amount Period Due date Rate of Initial
fixed deposit# name deposited interest
17.07.07 0026718/ XC 20,000 1 year 17.07.05 8.75% Sign
3116966004
Closing of FDR: If a FDR holder wants to take interest after maturity, banker should
consider the following rates:
There is a list of interest rate for each category of deposited amount
Category of deposit Up to Tk.10 Lac Rate of interest above Above Tk. 50 Lac
TK. 10 Lac to 50 Lac
FDR for 3 months 7.50% 7.75% 8.00%

FDR for 6 months 8.00% 8.25% 8.50%
FDR for 12 months 8.50% 8.75% 9.00%
FDR for 36 months & 9.00% (on any amount)
above
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There is an access duty rate for different deposit amount-
Category of deposit Access duty (Tk/-)

Up to 1,00,000 120/-
Up to 10,00,000 250/-
Up to l core 550/-
Tax deduction rate is 10%

Process to know interest rate of any matured FDR:
Fixed deposited amount=X

Process to know interest rate of any matured FDR= (X x interest rate) x 10% tax deduction-
access duty
Depending on clients requirement whether they want pay order, cash or cheque banker will
prepare a voucher.
Different payment procedure:
Payment on before maturity: It may be happened that a client who has a three months
basis FDR for one year, wants to close his/her FDR in 7th month. In this situation client
will get 6 months interest from his deposited amount.
Payment on death/ deceased account: If a FDR holder die before closing re FDR, then-
Nominee can get the deposited amount with interest, or by succession certificate FDR
holders family can get the money (here court will decide who will get how much)
Interest on overdue deposit: A banker is legally not bound to pay interest on fixed
deposit after its maturity. However, according to the directives of the Bangladesh Bank
(BB), the bank at its discretion shall pay interest for overdue period on such deposits
subjects to the following conditions:
The deposit is renewed with effect from date on which it matured for payment. The rate
of interest allowed for such period does not exceed the rate of interest applicable to the
period for which deposit has been renewed.
Loss of FDR: If the FDR holder lost his/her FDR block following process s/he has to take:
First he/she will do G.D in the police station.

Write an application to the bank to inform it.
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Branch will inform it to the H/O

H/O will send this information to every branch
Branch will give reply to this letter
If the banker doesnt find any discrepancy then a duplicate copy of the FDR will be
given to the FDR holder.
FDR holder will also sign in a bond where it is written that if s/he fined their FDR
receipt later they cant claim for it.
3.5.1.2. Sanchay Patra:
It is a govt. document, on behalf of BB different commercial banks sale sanchay patra. Bank
will send all information related with s/p holder to BB. There is a dept. in BB called Deposit
Account Dept. (DAD), they maintain all transaction for each commercial bank.
There are two type of s/p:
Five-year basis: S/P holder cannot get interest before 1 year in Five-year basis s/p.
Three-month interest basis: For three-year basis s/p after three-month customer can get interest.
Every bank will send a document (called Bicolon) to BB, regarding s/p holders
information. This process should be done within 72 hours. BB will credit that amount to
their account and debit it from that particular banks account. After deducting the amount
BB will send a letter to that commercial bank. When s/p holder takes their interest
commercial bank also make a list of their name and send it to BB. Then BB will debit that
amount from their account and credit it to that particular banks account.
An s/p purchaser can transfer or receive their money in cash, cheque, pay order and
demand draft etc. There are 12 coupons with each s/p receipt.
Here we will discuss:
Purchase procedure of S/P
Interest receiving process
Purchasing procedure of S/P:

First buyer will fill up an s/p application form
Bank account Cr.
Party account Dr.
Entry all information in the computer
Then it should be register in the registration khata.
Date Ac# Ac. Holders Reference no Amount
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name
17.07.05 5116927003 X 65/2004 2,00,000/-
Banker will write a Bicolon for this newly opened s/p to inform it to BB.
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Interest receiving process:
Write selling date, registration no and payment date in the coupon In the register banker
will enter coupon no: installment paid on,
Party account-------------------------------------Cr.
Bank account ----------------------------------------- Dr.
Entry all the information regarding the whole transaction
Bank will prepare a list (called Acolon) that how much interest they have paid and send
to BB.
3.5.1.3. Short Term Deposit (STD):
It is similar to Current account. Main difference between CD account and STD is STD a/c
holder doesnt get any interest on below 10 lac taka and get 4.5% interest over 10 :ac or above
amount in a daily basis.
3.5.1.4. Barrier Certificate Deposit (BCD):
It is another kind of deposit account. Here verification is less important as it is highly

emphasized in FDR. Bank is bound to give money, which will carry the BCD block. Interest of
BCD is calculated when a person deposit the money or at the beginning. (Principal * 100)/
(100 + Rate of interest)=(1,00,000 * 100)/(100 + 8.50%)= 92,165.89 Client will give Tk.
92,165.89 to the bank and after one year bank will return Tk. 1,00,000.
3.5.1.5. Special Saving Scheme (SSS):
In SSS customer has to deposit fixed amount of money each month for a definite period of
time, normally for 5 to 10 years.
A depositor can open a SSS account for deposit of Tk. 100/-, Tk. 2,500/-, Tk. 5,000/-, Tk.10,
000/- etc in each month. The depositor has to deposit the required amount of money within
10th day of each month. Customer may deposit his money either in cash or cheque. The
depositor can select more than one nominee for this account. A depositor can withdraw the total
amount of deposit with interest at a time after a specific period of 5 or 10 years.
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The depositor(s) will get following amount after maturity of SSS account.
Monthly installment (Tk.) Five years (Tk.) Ten years (Tk.)

100/- 8,000/- 22,500/-
200/- 16,000/- 45,000/-
300/- 24,000/- 67,000/-
400/- 32,000/- 90,000/-
500/- 40,000/- 1,12,500/-
1,000/- 80,000/- 2,24,000/-
1,500/- 1,20,000/- 3,37,500/-
2,000/- 1,60,000/- 4,50,000/-
2,500/- 2,00,000/- 5,62,500/-
5,000/- --------------- 11,25,000/-
10,000/- --------------- 22,50,000/-
3.5.2. Demand liabilities or demand deposit:
The amount which is payable on demand is called demand deposit account.

There are two types of demand deposit account:
Savings account
Current account
To open a SB a/c or CD a/c bank will give following forms to the client:
One application form
One nominee form
One transaction profile
One knowledge about your customer (KYC)
One specimen signature card- client can give any special instruction through this card
SB a/c holder cannot introduce the CD a/c holder but CD a/c holder can introduce SB
a/c holder.
3.5.2.1. Savings account:

SB a/c can be opened individually or jointly. An SB a/c holder will get a fixed amount of
interest. Although there are some rules, SB a/c holders can withdrawal money two times within
a week. They can withdrawal 25% of his/her total amount, if they violate the rule they will not
be allow to receive the interest. Interest rate for savings account is 5.50%. For SB a/c bank will
pay interest two times within a year.
Requirements for SB a/c:

Two passport size photographs attested by the introducer
An introducer (means who has an account in that particular bank) who will introduce
the accountholder
One passport size photograph of nominee attested by the account holder
Copy of passport or S.S.C/ H.S.C certificate or chairman/ commissioner certificate
specifying the DOB
Minimum deposited amount Tk/-500 only.
3.5.2.2 Current account:
CD a/c holder cannot get any interest for their deposited money. This type of account is
specially opened by different company. There are different types of CD those are given below:
Private & individual
Partnership firm
Limited company
Minor account
Bank reputed official receivers and assignees trust accounts, clubs, association and
societies.
Requirements of CD a/c for joint/individuals:

An introducer must introduce the accountholder
One passport size photograph of nominee attested by the account holder
Copy of passport or S.S.C/ H.S.C certificate or chairman/ commissioner certificate
specifying the DOB
Minimum deposited amount Tk/-5,000 only
Requirements of CD a/c for Ltd Company:
Two passport size photographs dully attested by the introducer
Copy of up to date trade license
Memorandum of articles (certified copy)
Company full board resolution
Certificate of incorporation
List of directors
Company seal
Requirements of CD a/c for proprietorship:

Copy of passport or S.S.C/ H.S.C certificate or chairman/ Commissioner Certificate
specifying the DOB
Company seal
Requirements of CD a/c for partnership:

Company seal
Partnership deed should be in Tk. 1,000/- stamp
Copy of partnership registration
Requirements of CD a/c for club and society:

Deed on stamp Tk/- 1,000
Registration for concern authorities of govt.
Two copies photograph for each those who will operate the account and there is a part
regarding open an account in a schedule bank in Bangladesh in the deed of agreement
Up to date Trade License
Birth certificate who will operate the account
Introducer
Resolution Registration in the register: Banker will also register it in the register khata. Format
of the register is given below:
Date Ac# Ac. Holders name Reference no Initial

17.07.04 5116927003 X 5006319 Sign
They will also register it into the computer

Bank will send thanks letter to every new account holder
3.5.3. Issuing cheque book:
If any one wants to issue cheque book s/he have do following steps:
Issuer has to fill up (name, date and sign) a clip.
Respondent will put the serial no (e.g. 1428971) and To (e.g. 1428980) with date in the
clip.
Respondent will write the name of the issuer in each cover page and also in the
recognition page.
Respondent put the account number in every page including cover page and also give
signature in every page.
Give issuing date and seal of the bank with branch name.
After doing all these responsibility s/he will entry accountholder name, serial no and
date in the register book. At last take the sign of the issuer in the register book and back
of the clip.
With all these information (branch name, A/c no, starting no, order date, issue date,
number of cheque, number of unused cheque) they will entry into computer.
3.5.4. Closing of bank account:
A customers account with a banker may be closed in the following circumstances:

The customer may inform the banker in writing of his intention to close the account.
The banker cannot ask for his reasons of such closure. It should immediately ask the
customer to return the unused cheques and close the account.
The banker may itself ask the customer to close his account when the banker finds that
the account has not been operated for a long time. A notice to that effect can be given to
the customer. In case the customer is not traceable the amount standing to his credit
may be transferred to Unclaimed Deposit account. The amount shall be paid to the
customer as and when he is traceable.
In case the banker hinds that the customer is not desirable, e.g. customer is found guilty
of having forged cheques or bills of exchange etc. or T3uting rules of operating the
account, the banker may by notice in writing ~iorm the customer of his intention to
close the account. However, the banker should follow the following procedure in this
connection:
The banker should give a reasonable time to the customer for making alternative
arrangement.
In case the customer does not come forward to close the account in spite of getting
notice for closure of account from the banker, the banker should give a second notice to
him stating it clearly that in case he himself does not close his account by a specific
date the banker himself will close that account
In case the customer does not close the account by the specified date, the banker should
by a draft send to him the money lying in his account.
In the following cases, the banker should suspend all payments from the customers
account till the matters are finally settled.
When the banker receives notices of customers death or insanity.
When the customer becomes insolvent or in case of a company, it goes into liquidation.
In such cases the money standing to the credit of the customer will be transferred to the
official received or the official liquidator as the case may be.
When the banker receives a garnishee order (A court order attaching the belonging to
the judgment debtor in the hands of the third party. The garnishee upon whom the order
is served holds the assets of the judgment debtor until legal proceedings determine who
is entitled to the property. The order is effective from the moment it is served).
When the banker receives notice from the customer regarding assignment of the
balance standing to the credit of his account by him to a third party. The banker is such
a case is bound to pay the money to the third party.
3.5.5. Account statement:
Any company or individuals may want to know their balance. For that they have to provide
their account no and staring and ending date of transaction they want to know. The procedure is
they will write this information to the register khata and receive the computer printed statement
by giving signature.
Chapter 4
Remittance
4. Remittance:
Remittance is the best mediums to transfer funds from one place to another. This function
eliminates the individual difficulties and the hazards in transformation of physica1 cash
from one place to another.
Peop1e can send their money from outside or within the country. According to that we can
divide the remittance into two categories:
Local remittance
Foreign remittance
4.1. Local remittance:
Transferring money among the country is called local remittance. In NCCBL, they
provides following services:
Local Remittance
Pay Order
Demand Draft
Telegraphy! Telephone Transfer
4.1.1. Pay order:
Pay order is a document of money. It would be released from that bank where it is issued a P.O.
request may come for different purpose such as from any department, normal cash remittance
etc.
Requirements for P.O.: For issuing a P.O. issuer must have an account in the
branch of the bank.
P.O. processing: Following procedure should be performed by the clients:
Client has to fill up the P.O. application form which requires the
information as to whom it is done, purpose, amount of money, applicants
signature, address and account no.
Bank will charge commission and VAT for issuing a P.O.
Range (Tk.) Commission + VAT

(Commission @ 15%)
1-1,00,000 10+2
1,00,000-5,00,000 20+3
Above 5,00,000 50+8
They will prepare P.O. block, client will keep two parts with them as the
evidence of money. Another part will be kept by the bank with signature of
the issuer.
Accounting entry:
P.O.a/c Cr.
Party (for cheque) a/c Dr.
If party deposit cash then
P.O.a/c Cr.
Cash Dr.
After issuing P.O. they will register it in the register khata, format is shown
below:
Date Block# Payee Amount Initial Payment Initial Remarks

date
Releasing procedure: P.O. may come in different form through OBD or
clearing house.
When payee receives the P.O. they will put a seal where it is written that
Payees A/C will be credited on realization.
When issuer bank of P.O. receive it they will put a stamp of Tk. 4/- back to
the P.O. block. They will put a Purchase account credited seal and take
the signature of the issuer.
Some time it may happened that issuer cannot release their P.O. then on behalf of
them bank do it and charge Tk. 30/- as cancellation charge.
4.1.2. Demand Draft:
A bank draft is an unconditional order issued by one branch of a bank to its another branch
or to another bank to pay a certain sum of money to the named person or 3rder on demand.
Bank will do IBCA (Inter branch credit advice) when clearing bank is under clearing house.
If it is outside clearing house issuing bank of DD have to do OBC (Outward oil collection).
Procedure of DD: DD processing from one branch to another branch of same bank
will maintained the following steps:
Remitter Issuing Issuing Purchaser Payee Paying

submits branch branch sends DD presents branch
application prepares Stamford
gives DDUniversity
to payee DD to pays30 the
to DD to (paying) amount
Suppose party has an a/c in NCCB Rangpur Br. From there s/he issue a DD, party has another
a/c in Agrani bank Motijheel Br. Issuing bank has another branch in M:zjheel, they will send an
IBCA/OBC to that branch. Client will deposit DD block ~ Agrani bank through clearing house
it will be received by NCC bank Motijheel Br. They will process it and credit client a/c in
Agrani bank.
Sending process of DD:
Client will fill up the DD application form
Depending on the deposited amount bank will charge commission
Bank will put test number if DD amount is above Tk.20,000
Those who have the P.A.(Power of attorney) number will give signature
over there
They will prepare the DD block and give it to the client
Original and duplicate copies of IBTA form will be send to desired bank
and triplicate and office copy will be kept by issuing bank.
Receiving process of DD:
If the draft is not crossed, the payee can draw amount in cash upon presentation of the same
to the drawee branch with satisfactory evidence of his identity or can draw the money by
depositing it to his account there or any other banker.
Accounting entry:
When they will get DD through clearing-
Party a/c Cr.

IBTA Dr.
A DD block may be received before getting advice from other branch
Party a/c Cr.

Suspense a/c DD paid without advice Dr.
Register format: After receiving the advice, bank will entry it to the register khata.
Date DD# Payee Amount Initial Sign of Date of Initial Remarks

drawee payment
Br
Cancellation of DD: The purchaser of a DD reserves the right to claim the amount
until it is handed over to the payee or endorsed in favor of any other person. Hence a
purchaser may return the draft to the issuing bank with a request to cancel it and refund
him the amount of the draft. In such a case, the following formalities are to be
observed:
o The purchaser is required to return the DD together with the letter of cancellation.
No other person can request for canceling a DD.
o The banker must compare the signature of the letter of cancellation with the
signature on the DD application form to ascertain the genuineness of the purchaser.
o The banker must also make sure that the DD returned does not have any
endorsement. The DD was issued by him and is not a fake one and a duplicate DD
has not already been issued against thereof.
Observing all the formalities, the issuing branch will cancel the DD and refund the amount to
the purchaser either in cash or through an account. The exchange amount recovered from the
purchaser while issuing a DD is never refunded during cancellation. Rather an additional
amount (Tk.30/-) is further recovered as cancel1ation charge.
While canceling a DD the banker must write the word cancelled on the DD along with the
date of cancellation and the signature of the issuing official on the DD are not destroyed.
Issuing branch has to keep the records of the cancelled DDs and file such DDs in DDs
cancellation file. The fact of cancellation is to be marked in the DD issued register and on
the respective DD application form.
4.1.3. Telegraphic Transfer:
A client can transfer their money through TT. It is the faster way to transferring money.
Accounting entry: Suppose a client in Laxmipur Br. Wants to transfer money to Motijheel Br.
If they deposit cash then
M.Br. clients a/c Cr.
L. Br. Cash . Dr.
If client give cheque then

M.Br. clients a/c Cr.
L. Br. clients a/c Dr.
TT issuing procedure:
First fill up the TT application form

Bank will charge commission (Total amount @ 10%), VAT (Commission @ 15%),
telephone charge (fixed Tk. 30/-) and test number (it is a security code).
Bank will give a memo to the client as an evidence of TT.
Send an IBTA advice to debit client a/c and credit a/c of the required branch
Test number is required for any amount of money for U transaction
All the information will be registered in the register khata.
TT no Date In Amount Commission Call Advice

applicant favor + VAT charge no
Bank will send all the into through telephone to the desired branch
Register in the computer
Procedure of incoming TT:

Bank will receive U information through telephone and verify test number.
Prepare a voucher to credit client a/c and register in the khata.
Date TT# Date of Favoring Amount Sign Advice no Date of Sign

Instructio payment
n
Register in the computer
Issuance of duplicate P.O., DD:
If the P.O., DD holder lost his/her P.O., DD block following process s/he has to take:
First they have to do G.D in the police station
Write an application to the bank to inform it
Bank will inform it to the H/O
H/O will send this information to every branch
Branch will give reply to this letter
In a Non Judicial stamp paper party will bond that if s/he find previous document they
cant claim for the money.
Then a duplicate copy of the P.O.. or DD will be given to the P.O. or DD holder.
4.2. Foreign remittance:

These remittance services are providing for exchange foreign currency. Those services are as
follows:
Foreign Remittance
Foreign Demand Draft
Endorsement of US$ in passport
Travelers Cheque
Money Gram
4.2.1. Foreign Demand Draft:
NCCBL accepts the charges for TOFEL, SAT, GMAT etc through FDD. For that client has to
open a student file to issue FDD maintaining the rule of BB. Before issuance of FDD, bank will
ask the client to fill up the TM form, which contains the following particulars:
Name of the student

Address of the student
Amount of FDD in foreign currency
Purpose of remittance
Address of the institution to which the FDD will be favored
Country receiving payment
Passport no of the student with date of issue
Signature of the student
4.2.2. Endorsement of US$ in passport:
NCCBL endorses US$ in passport. To endorse US dollar, the client has to apply in application
form.
4.2.3. Travelers cheque:

Travelers cheques are issued by banks to avoid the risk of loss or inconvenience in having to
carry large amount of cash while traveling. The salient features of T.C. are:
The buyers of T.C. need not to be a client of NCCBL.
The buyer has to deposit money with the branch of NCCBL equivalent to the amount
of the T.C. he wants to buy.
Each T.C. is signed by the buyer at place marked when countersigned below with this
signature, before the NCCBL officer
T.C. is issued in single name. It is not issued in joint names or name of clubs, societies
or companies.
There is no expiry period for the T.C.
Accounting entry:
Accounting treatment for the issuance of T.C. is as follows:
Cash or customers a/c Dr.
Issuing banks a/c Cr.
4.2.4. Money Gram:

It is the new concept of transferring foreign remittance to Bangladesh. One person residing in
the abroad can remit his money through the process of money gram. There are more that
22,000 money gram agents in over 100 countries are linked worldwide. Only NCCBL is
authorized to do this kind of business. This kind of business is permitted by BB because of
foreign remittance is coming to our country. For such transaction client doesnt have to
maintain any account in NCCBL. They will only take Tk. 0.07/$ as a commission.
There are some features of Money Gram:
Faster: When a person transfers money through money gram service his money gets
there fast, usually in 10 minutes or less. Other services often take day or even weeks.
Convenient: There are more than 22,000 money gram agents over 100 countries.
Therefore, a person can easily transfer his fund.
Secured: People use the money gram service thousands of time a day all over the world.
It is a trusted guaranteed and reliable thoroughly personal way to transfer money.
Easy: Just one simple form and computerized money transfer network will speed a
persons funds to destination throughout the world quickly.
Money Gram processing:
o Sender will go to money gram agent to transfer his/her money to any country
(suppose Bangladesh)
o Sender gets receipt and notifies recipients of the transaction reference number.
o Recipients go to the money gram agent (NCCBL) in Bangladesh, fill the Receive
form to request funds and shows proper identification.
o Receiving agents contract the money gram transaction center (Head office on
NCCBL) to obtain authorization to pay recipient.

o Eventually receiver will get the money.
Chapter 5
Loans & Advance
5. Loans And Advance

In common parlance the loan document means any written record which serves as an
evidence in respect of a transaction and be described as anything obtained for recording a
transaction.
Documentation may be described as the process or technique of obtaining the relevant
documents. A banker must obtain proper documents executed from the borrower to protect
himself against willful defaults. Moreover, when money is lent against security of some assets,
the documents must be got executed in order to give to the banker a legal and binding charge
against those assets. Documents contain the precise terms of granting loans and advance and
they serve as important evidence in law counts if the circumstance so require. It is, therefore,
absolutely necessary for a banker to obtain proper documents from the borrower while granting
a loan or advance to him. In banking system, loan interest is calculated in daily basis.
Types of loan: Generally we find two types of loan

Loans
Continuous Loan
Term Loan
5.1 Continuous loan:
Within a fixed amount and fixed period of time, one can receive and deposit money several
time.
NCCBL provide different types of continuous loan:
Secured Over Draft-financial obligation

Secured Over Draft- general
Cash credit- hypothecation
Cash credit- pledge
5.1.1. Secured over Draft- financial obligation:
Bank will give loan against any type of instruments such as FDR, SSS, SDS etc. It is not
mandatory that the deposited instrument must be issued from the issuing bank. Borrower may
not have any instrument in any bank then s/he can use third party for issuing the loan. If third
party gives permission of taking loan by depositing his/her instrument only then bank will
sanction loan. If the instrument is issued from another bank, loan issuing bank will send a letter
for seeking permission for lien that as security. When bank gets positive replay, loan issuing
bank will sanction loan. Client must have a SB/CD a/c in the bank.
Credit ceiling: Bank will sanction loan depending on the reliability of the client. But maximum
amount is 80% to 90% of the instrument.
Interest rate: 3% above from the instrument rate. Interest will be charged on quarterly
outstanding.
Payment period: The loan is to be repaid within a specific period of time.
Security: Any type of instrument such as FDR, SSS, SDS etc.
Procedure for application:

Fill up the application with required documents
Two passport size photographs duly attested by an officer of the branch.
Discretionary power: The issuing branch can sanction this type of loan. Disbursement of loan:
Against FDR in borrowers name:

D.P notes
Letter of continuity
FDR duly discharged by holder on revenue stamp under the words
Received payment on the back of the FDR
Agreement for pledge of securities
Security delivery letter
Revival letter
Letter of authority to appropriate the proceeds of pledged
FDR
Letter of authority to debit borrowers account for incidental changes
Letter of acceptance of the terms of the loan.
In case the pledged FDRs stand in the third partys name:

Double party D.P. note
D.P. note delivery letter
Agreement for pledge of securities
Security delivery letter
FDR duly discharged by holder on revenue stamp under the words Received payment
on the back of the FDR
Letter of authority to appropriate the proceeds of pledged FDR
Letter of guarantee
Revival letter-1&2
Informal proposal format sanctioned by department in charge:

Proposal for sanction of an SOD (FO) limit for proposed amount against lien an any
instrument for total amount of that instrument a/c borrowers name. The above named
borrower has approached us to sanction an SOD (FO) limit for Tk. proposed amount against
lien an any instrument for total Tk. amount of that instrument. It is mentioned that the party
has been maintaining a SB a/c with us bearing no-a/c number.
The detail of the proposal is as follows:

Name & present and permanent address of the borrower
Nature of advance
Amount of limit
Margin
Rate of interest
Validity
Details of security
Name of Nature & Date of Date of R.O.I Issuing Face

the no of sec issue maturity advice value
holder
All formalities including marking of lien have been completed.

Place for approval.
5.1.2. Secured Over Draft- general:
Bank will sanction loan against work order. Borrower can request bank guarantee for the
amount which is financed by them. Client must have a CD a/c in the bank.
Credit selling: Bank will sanction loan depending on the reliability of the client, but maximum
amount is 20% to 30% of the total work order.
Interest rate: For SOD (G) client has to pay 12.5 to 15% interest.
Payment period: Suppose one party get a work order of Tk. 1, 00, 00,000 and receive their
payment part by part. They borrow Tk. 20,00,000 from bank as loan. From the first payment
Tk. 20,00,000 bank will take Tk. 5,00,000 and return Tk. 15,00,000 to the client. By this way
bank will receive the repayment of loan.
Security:
Work order will be kept as primary security
Collaterals such as building, land etc will be kept as secondary security

Two passport size photographs duly attested by an officer of the branch.
Discretionary power: The head office can sanction this type of loan. Disbursement of loan:
D.P. note
Agreement for hypothecation of supply bills
General irrevocable power of attorney for collection of bills, security deposit etc.
Properly executed by the borrower and registered in the District registrar/Sub
registrars office should be lodged with the department concerned who award
the contract! paying authorities and their written confirmation obtained to the
effect that all payment against the bills, security deposits etc. on account of the
party concerned will be made direct to the bank for credit to partys account
through account payee cheque drawn in favor of the banks a/c.
A letter of undertaking from the borrower to the effect that they will not receive the
proceeds of the bills/security deposit etc. directly from the paying agencies
concerned and in case any cheque / payments come is their possession the same
will be placed to the bank fort with.
Supply bills to be accompanied by:
Inspection note duly signed by the authorized official of the paying authority
Consigners receipt for the goods supplied duly signed by their authorized
official.
Revival letter
5.1.3. Cash credit-hypothecation:
This type of loan is issued for business person. Bank will issue loan against the products of the
shop. Party has the possession of those products but bank has the control over those products.
Requirement of the clients:
Party has to submit monthly report of their product
Product should be insured
The prospective borrower must have a CD a/c with the branch of the bank from
where s/he wants to avail the loan
Bank procedure: Bank will collect all required information from CAB (Credit information
Buroe)
Credit ceiling: Loan amount depends on the total product of the shop. Bank will sanction a
marginal amount among the product. Suppose one party has a shop with Tk. 4,00,000 then
bank may sanction 50% margin amount means Tk. 2,00,000.
Interest: Interest may vary from 12.5% to 15% and it will be charged on quarterly outstanding.
Security: Bank kept collateral as building, land. Disbursement of loan:
D.P. note
Letter of arrangement
Letter of disbursement
Simple deposit of original title deed of the ownership of the shop or possession deed/
agreement or lease deed of agreement with personal guarantee of the landlord in case of rented
premises.
Guarantee bond on Tk. 150/- non-judicial stamp as per our approved format from the
guarantor acceptable to the bank
Acceptance of the terms and conditions of the loan.
Letter of authority to debit the account with incidental and other changes
Up to date trade license
Mortgage deed
Mortgage property
Biya deed
5.1.4.. Cash credit-pledge:

In CC-pledge both control and possession are under bank. Part by part party will repay the loan
and receive/ release their products.
Requirement of the clients:
Party has to submit monthly report of their product
Product should be insured
The prospective borrower must have a CD a/c with the branch of the bank from
where s/he wants to avail the loan
Bank procedure: Bank will collect all required information from CAB (Credit Information
Bureau)
Credit ceiling: Loan amount depends on the total product of the shop. Bank will sanction a
marginal amount among the product. Suppose one party has a shop with Tk. 4,00,000 then
bank may sanction 50% margin amount means Tk. 2,00,000.
Interest: Interest may vary from 12.5% to 15% and it will be charged on quarterly outstanding
Security: Bank kept collateral as building, land. Disbursement of loan:
D.P. note
Simple deposit of original title deed of the ownership of the shop or possession
deed/ agreement or lease deed of agreement with personal guarantee of the
landlord in case of rented premises.
Guarantee bond on Tk. 150/- non-judicial stamp as per our approved format from
the guarantor acceptable to the bank
Mortgage deed
Mortgage property
Biya deed
5.2. Term loan:

Borrower will take the whole amount at a time and has to deposit/ repay loan within specified
time.
NCCBL provides different types of term loan:
Consumer finance scheme
Small business scheme
House repairing/ renovation loan scheme
Personal loan scheme for salaried person
Project loan
Lease finance
5.2.1. Consumer finance scheme:

To help salaried person to purchase household goods such as refrigerator, computer, car etc this
type of loan is introduced. Client must have a SB a/c in the bank. Credit ceiling: Bank will
sanction loan depending on the reliability of the client. Maximum Tk. 3,00,000 for car purchase
and Tk. 1,00,000 to purchase any other goods.Suppose a person want to buy a product which
will cost Tk.1,00,000.
Among this amount client has to give 25% of the total amount and rest of the money will be
financed by the bank means 75%. When client will deposit their required money only then
bank will give him/her loan.
Interest rate:
Interest @15% at quarterly

Application fees Tk. 100/-
Risk fund @1%

Service charge 1%
Stamp charge Tk. 210/-
Payment period:
A car loan receiver can repay their money maximum 3 years! 36 installments. Other
goods purchaser can repay their money maximum 2 years/ 24 installments.
Repayment will start one month of availing of the loan.
Borrower has to repay monthly installment within 10th day of a month. If s/he
didnt do it then bank will deduct that money from their SB a/c.
Cheque will be issued to the name of that shop or organization Car registration will
be done jointly by the bank and the client.
Security:
Quotation of the purchased goods.
Salary certificate of the borrower and the guarantee
Spouse guarantee and photograph
Two passport size photographs of borrower and guarantor duly attested by an
officer of the branch.
Discretionary power: The head office can sanction this type of loan.
5.2.2. Small business scheme:

To help an entrepreneur this type of small business loan scheme has been introduce. This type
of loan is given one time disbursement basis.
Requirements of the clients:

A business person must have a least 5 year working experience
They must have any security to offer against the loan
Borrower must have a CD a/c with the branch of that bank
Credit ceiling: Maximum amount of loan under this scheme will be Tk. 5 lac.
Interest and other charges:

Risk fund @1% minimum Tk. 500
Payment period:
The loan is to be repaid by equal monthly installments including interest within 3-5
years.
Calculation of monthly installment under Small business loan scheme

@15%
Amount of loan 1 year 2 year 3 year 4 year 5 year
One lac 9,050 4,850 3,500 2,800 2,400
Two lac 18,100 9,700 6,950 5,600 4,800
Three lac 27,100 14,550 10,400 8,350 7,200
Four lac 36,150 19,400 13,900 11,150 9,550
Five lac 45,150 24,250 17,350 13,950 11,900
Banker will decide borrowers grace period depending to their transaction. But
usually borrowers repayment procedure starts from the 2nd month of availing of
the loan.
Loan installments will have to be paid within 10th day of every following month. If
any three installments are not paid, the borrower will be treated as a defaulter
and penal interest @1% month will be charged on the defaulted amount.
Security:
Possession deed/ agreement or ownership or lease deed of agreement of the shop or
any other security acceptable to the bank
Personal guarantee from two respectable person of society acceptable to the bank
Hypothecation of the stock in trade
Post dated cheques of the borrowers CD a/c maintained with the financing branch
for all installments to be deposited in advance.

Application in prescribed form duly filled in and signed by the applicant.
Two passport size photographs attested by an officer of the branch
Recommendation by the Head of Local Chamber of Commerce and Industry or
related business association or society or similar body.
Discretionary power: A SBS loan can be sanctioned by following way:
Branch manager Up to Tk. 1,00,000/-

Area chief! SEYP Up to Tk. 3,00,000/-
Managing director Up to Tk. 5,00,000/-
Disbursement of loan:
Branch manager will disburse the loan after sanction and completion of all
formalities and documentation
The following documents must be obtained before disbursement of the loan:

D.P. note- negotiable items
Possession deed! agreement or ownership or lease deed of agreement of the
shop or any other security acceptable to the bank.
Guarantee bond on Tk. 150/- non-judicial stamp as per our approved format
from the guarantor acceptable to the bank
Letter of hypothecation- One kind of collateral over products of the shop
Post dated cheques for all installments
Undertaking from the borrower to the effect thatParty will pay monthly
installments within 10th day of every following month
Party will pay the banks dues including interest in full
Party will neither sell nor transfer the ownership of the business until
banks dues are fully paid and without prior permission! NOC from the bank
witnessed by the land lord of the shop/ building
Party will inform the bank immediately, if the borrower or his guarantor
changes address or profession
The loan will be disbursed in the form of Term loan. A separate ledger will be
introduced for the purpose
Follow up of loan: If any loan installment is defaulted, the branch manager will immediately
contact the borrower personally or through letter/ phone for regularization of the loan. If the
borrower fails to pay three installments, the matter shall be transferred to the notice of the
guarantor by letter/ personal contact/ phone for realization of all the installments.
Miscellaneous:
Monthly statements of disbursement and recovery during the month shall be sent to the
VC, HO, to reach within 10th day of every following month.
Application forms will be sold be keeping proper record in a khata where register
mentioning date, form no, serial no, name and address of the applicant etc. The
registers Sl no and name of the applicant should be written on the top of the
application authenticated by an officer.
Cost of application form and processing fee will be credited to banks income a/c
Service and other charges.
At last they will entry all the information into the computer.
5.2.3. House repairing/ renovation loan scheme:
This type of loan is introduced to help self employed persons to repairing/ renovation house/
building/ flat for better living or increasing rental income. The full loan amount is repaid part
by part
Requirements of the clients:
Only the genuine residential house owners may avail of the opportunity to repair,
renovate their own house/ building/ flats according to their need and repayment
capacity.
Bank will reserve the right to accept or reject any application without assigning any
reason whatsoever.
Borrower must have a SB a/c with the branch of that bank.
Credit ceiling: Maximum amount of loan under this scheme will be Tk. 5 lac. Interest and
other charges:


Processing fees 1% of the amount of loan sanctioned is to
recovered at the time of disbursement of the
loan
Payment period:
The loan is to be repaid by equal monthly installments including interest within 3-5
years.
Calculation of monthly installment under House repairing loan scheme
@15%
Amount of loan 1 year 2 year 3 year 4 year 5 year
One lac 9,050 4,850 3,500 2,800 2,400
Two lac 18,100 9,700 6,950 5,600 4,800
Three lac 27,100 14,550 10,400 8,350 7,200
Four lac 36,150 19,400 13,900 11,150 9,550
usually borrowers repayment starts from the 4th month of availing of the loan.
The client will enjoy 3 months grace period.
any three installments are not paid, the borrower will be treated as a defaulter
Security:
Equitable mortgage by way of simple deposit of original title deed with chain of
documents.
Personal guarantee from two respectable persons of society acceptable to the
bank.
Post dated cheques for all installments to be deposited in advance. Personal
guarantee of spouse to be obtained
Estimated cost of the proposed expenditure for repairing/ renovation of the house.
Branch manager Up to Tk. 1,00,000/-

Area chief! SEVP Up to Tk. 3,00,000/-
Disbursement of loan:
Branch manager will disburse the loan after sanction and completion of all
formalities and documentation
The following documents must be obtained before disbursement of the loan:
D.P. note- negotiable items
Equitable mortgage by way of simple deposit or original title deed.
Guarantee bond on Tk. 150/- non-judicial stamp.
Up to date rent receipt, municipal tax, parcha, mutation, plan
Undertaking to pay monthly installments in banks prescribed form
Post dated cheques for all installments
Undertaking from the borrower to the effect that-
Party will pay monthly installments within 10th day of every
following month
Party will pay the banks dues including interest in full even if the
house is not completed within the sanctioned loan amount due to
increased price of materials or any other reason
Party will allow the banks official to inspect any time
Party will neither sell nor transfer the ownership of the business until
banks dues are fully paid and without prior permission! NOC
from the bank
Party will inform the bank immediately, if the borrower or his
guarantor changes address or profession
The loan will be disbursed in the form of Term loan. A separate ledger will be
introduced for the purpose
After sanction and on completion of documentation, the loan will be disbursed in 4
equal installments.
guarantor by letter/ personal contact/ phone for realization of all the installments.
Miscellaneous:
Monthly statements of disbursement and recovery during the month shall be sent to
the VC, HO, to reach within 10t1~ day of every following month.
At last they will entry all the information into the computer.
5.2.4. Personal loan scheme for salaries person:

To meet emergency financial expenses of the service holder this type of loan has been
introduced. Emergency such as medical treatment, marriage, admission of children, maternity
etc.
Requirements of the client:
Any permanents salaried officer/ employee aged between 20 to 50 years and
working in offices (government, semi govt., corporate bodies etc) is eligible to
get loan.
They must have any security to offer against the loan
Borrower must have a SB a/c with the branch of that bank.
Credit ceiling: Maximum amount of loan under this scheme will be Tk. 1 lac. Borrower has to
repay the within 6 month (minimum) but not exceeding 3 years.
Interest and other charges:

Penal interest @1% of per month of the defaulted amount of
installment but not less that Tk. 100.
Service charge @l% of the amount of loan sanctioned to be
recovered only once at the time of
disbursement
Payment period:
The loan is to be repaid by equal monthly installments including interest.
Calculation of monthly installment under Personal loan scheme for salaried person
@15%
Amount of loan 6 month 1 year 1 year 2 year 2 year 3 year
20,000 3,500 1,850 1,250 1,000 850 700
25,000 4,400 2,300 1,600 1,250 1,050 900
30,000 5,250 2,750 1,900 1,500 1,250 1,050
35,000 6,100 3,200 2,200 1,700 1,450 1,250
40,000 7,000 3,650 2,500 1,950 1,650 1,400
50,000 8,750 4,550 3,150 2,450 2,050 1,750
60,000 10,450 4,450 3,750 2,950 2,450 2,100
70,000 12,200 6,350 4,400 3,400 2,850 2,450
75,000 13,100 6,800 4,700 3,650 3,050 2,600
80,000 13,950 7,250 5,000 3,900 3,250 2,800
90,000 15,700 8,150 6,650 4,400 3,650 3,150
1,00,000 17,450 9,050 6,250 4,850 4,050 3,500
usually borrowers repayment starts from the next month of availing of the loan.
Security:
Letter of authority to make lien on the applicants fund, gratuity etc.
Guarantee bond in banks prescribed format on Tk. 150!- non-judicial stamp.
Guarantee on the banks standard format from the spouse of the borrower.
Letter of confirmation from the salary disbursing authority.
Post dated cheques of the borrowers CD a/c maintained with the financing branch
for all installments to be deposited in advance.
Employers certificate stating the net salary of the applicant
Branch manager Up to Tk. 25,000/-

Area chief! SEVP Up to Tk. 50,000/-
guarantor by letter/ personal contact/ phone for realization of all the installments. The letter
should be sent by marking First reminder, Second reminder, Final notice etc. as the case
may be on the top of the letter.
Miscellaneous:
Monthly statements of disbursement and recovery during the month shall be sent to
the VC, HO, to reach within 10th day of every following month.
5.2.5. Project loan:
If any client has been assigned to do a project (such as hotel construction) can apply for project
loan.
Requirements of the clients: Client has to submit a feasibility report over their project and they
must have a CD a/c.
Credit ceiling: Amount maintained in the application. Depending on the present condition of
the project, bank will decide how much they will invest in that project.
Interest: Usually 15% interest is charged for project loan.
Repayment period:
The loan is to be repaid by equal monthly installments including interest.
Grace period vary from project to project. It may be seen that one company has
already finished 70% of their work. In this situation party can start their activity
quickly so their grace period will be short.
any three installments are not paid the borrower will be treated as a defaulter
Security:
Collateral such as land, building which is registered against general irrigable power
of attorney to sale the property

Every thing inside the building
Personal guarantee from the owner
Original and chain of documents
Post dated cheques of the borrowers CD a/c maintained the financing branch for all
installments to be deposited advance
Two passport size photographs attested by an officer of the branch Procedure for
sending proposal and sanction:
Party will apply for loan with required information as how much loan they need,
repayment period, present condition of their project etc.
Depending on that bank will prepare a proposal which contain projects present
condition and their required need. This proposal will be send to HO.
Credit proposal and approval form will be send to HO and another copy will be
kept in the branch.
After getting the approval bank will calculate monthly installment rate and give one
copy to the party.
contact the borrower personally or through letter! phone for regularization of the loan. If the
guarantor by letter/ personal contact! phone for realization of all the installments.
5.2.6. Lease finance:
To purchase any machinery, car etc for business purpose once can take this loan.
Requirements of the clients: Party must have a CD a/c in the bank. Purchaser has to buy the
product to the name of the bank.
Credit ceiling: The party will finance 20% and the bank will finance rest of the amount.
Interest: Interest rate is 14%.
Repayment period: Repayment period depends on loan amount. If the amount is big then it
will take long time for repayment. If the amount is small then it will take short time.
Security: Bank will take collateral as security.
Following steps will be taken against a defaulter:
Reminder the party to repay the loan after validity date

Send final notice
Send legal notice
Eventually sue a case against the party
5.3. Bank guarantee:
Suppose one party get a project or construction work then employer may want guarantee. This
guarantee is required because whether party can give financial support to finish the whole work
or not. Bank will give such guarantee against their client it is also called contingent liability.
There are three type of bank guarantee:
Bank Guarantee
Bid Bond
Performance
Advance payment
Bid bond: This type of BG is issued only for tender.

Performance guarantee: Depending on the reliability of the clients transaction bank will
sanction guarantee.
Advance payment guarantee (APG): It may be happened that one party doesnt complete
their work within the fixed time. And this client already issued a BC from bank. In this
circumstances party may request advance payment from their employer. If bank sanction APG
against that party employer may give advance payment to them. This type of loan is sanctioned
only few reliable parties.
Requirements of the clients: Client must have SB/CD a/c in that bank.
Interest and other charges: No interest is charged for BC. Bank charge commission @ 0.5%
over the total amount! quarter and VAT (commission @15%) and stamp cost.
Security:
After getting approval of the BC a margin amount will be transfer from parties
CD/SB a/c as security.
At the time of issuing BC a liability will be created to the party a/c. The liability
amount is equal to the amount they are showing as BG.
Counter guarantee: Bank will take a counter guarantee document from the party as
a security. By this way bank will receive guarantee form the party.
Discretionary power: BC will be sanctioned from the Head Office.
Returning procedure:
After finishing the work party will return the BC to the bank. Bank will reverse the
liability and return margin to party a/c.
5.4. Staff loan:
There are three type of staff loan:
House loan: Those employees who are working in this bank from last 10 years they are eligible
to apply for this loan. This loan will be sanction in 7% interest rate.
Car loan: Above the post of AVP can apply for the loan. Bank will charge 5% interest for this
type of loan.
Provident fund loan: Those employees who have a provident fund can apply for this loan.
Bank can give maximum 80% of PF as loan with 6% interest.
HO will decide what would be the installment amount for each month.
5.5 Loan Classification:

Loan classification attempts to categorize the debt information in a systematic manner. Loan
classification is defined in terms of degree of risk associated with loans. Classification of loans
mean and include only such assets of the balance sheet of a bank which do not yield interest
income and which have remained past due for some quarters. Loans are generally categorized
in two types:
Loan
Classified Loan
Unclassified Loan
5.5.1. Classified loan:
If any continuous credit is not adjusted/ renewed within expiry date, the loan will be treated as
classified/ irregular loan from the next day of the expiry date. Loans are classified which are
judge to have a reduced chance of repayment. Classified loan can be three types:
Classified loan
Substandard
Doubtful
Bad/ loss
Substandard: If the loan unadjusted for six months or more but less than nine months, the loan
will be treated as substandard.
Doubtful: For nine months and above but less than twelve months the loan will be treated as
doubtful.
Bad: If the period is twelve months or more, the loan will be classified as bad.
The above time frame is applicable in respect of demand loan also.
5.5.2. Unclassified loan:
Unclassified loan are those which are repay regularly.

Objectives of loan classification:
Find out net worth/ adjust capital of a bank
Help for assessing financial soundness of a bank.
Calculate the required provision and the amount of interest suspense
Put the bank on sound footing in order to develop sound banking practice in
Bangladesh.
Importance of loan classification:
Strengthen credit discipline
Improve loan recovery position
Make planning for future course of loan
Basis for loan classification: All loans and advances are classified on the basis of two
criteria:
Objective criteria
Qualitative judgment criteria
Objective Criteria
Status Type of loans Definition
1 Unclassified All Current loans with required! adequate
eligible securities
2 Sub-standard Continuous Overdue is more than 3 months but less than 6
months
Demand Overdue is more than 3 months but less than 6
months from the date of serving notice!
creation of forced loans
Term (less than 5 If the defaulted amount of installment is equal
years) to installment! installments payable in 6
months
Term (More than If the defaulted amount of installment is equal
5 years) to installment! installments payable in 12
months
Short term Overdue is more than 12 months but less than
agriculture!micro 36 months
Doubtful Continuous Overdue is more than 6 months but less than
12 months
Doubtful Demand Overdue is more than 6 months but less than
12 months from the date of serving notice!
creation of forced loans
Term (Up to 5 If the defaulted amount of installment is equal
years) to installment! installments payable in 12
months
Term (More than If the defaulted amount of installment is equal
5 years) to installment/ installments payable in 18
months
Short term Overdue is more than 36 months but less than
/micro 60 months
Bad/ loss Continuous Overdue is more than 12 months
Demand Overdue is more than 12 months from the date of
serving notice! creation of forced loans
Term (Up to 5 If the defaulted amount of installment is equal
to installment! installments payable in 18
years) months
Term (More than If the defaulted amount of installment payable in
5 years) 24 months
Short term/ micro Overdue is more than 60 months
Qualitative Judgment Criteria
Status Type of loans Definition
Sub- standard All A loan is considered Sub-standard when the degree

of risk of non-payable is so high and there is
reasonable prospect that the loans condition can be
improved
Doubtful Chance of recovery is uncertain
Bad/ loss All No security held. Borrower not traceable. Time

barred loan cases. No hope of recovery.
Calculation of interest on classified advances:
Interest on sub-standard and doubtful loan accounts should be credited to Interest Suspense
Account instead of crediting the same to the interest income account.
Calculation of interest on Bad/loss loan accounts should be deferred instead of calculating the
same on those accounts.
If there is any recovery on the above accounts that recovery/ portion of recovery will be
treated as interest recovery, not principal recovery. After adjustment of interest due, principal
portion of respective loan account will be adjusted later on.
Chapter 6
Cash Section
6.1 An Overview
Cash department is an important department of any bank. Cash amount is the main source
of all banking activities. For that every day bank has to remain certain amount in cash in
accordance with the rules and regulations of Bangladesh Bank.
6.2Functions of Cash Section
The cash department mainly performs the following functions:

Cash Receipt
Cash Payment.
6.3 Procedures of Cash Receive
a. Credit voucher in by the customer.

b. Cash receiving officer will check the title number, A/c number and amount in figure and
words in he deposit slip of credit voucher.
c. After receiving the cash, receiving officer will record the denomination of the currency
on the back of the voucher and enters the part5culars or voucher in the cash receiving
book under progressive serial number. He will put his signature with the date stamp
both in the counter foil and deposit slip/voucher and pass the same along with the
register to the officer in charge of cash department for his signature.
d. Again it will be checked and signed by tic authorized officer.
e. Receiving officer total the amount entered in the cash receiving book at the close of
banking hours.
6.4 Procedures of Cash Payment

a. Instrument is checked by the cash in-charge whether the A/C name. A/C number and the
amount in written in words and figures are correct.
b. The officer in-charge also checks the instrument and signed in it.
c. The particulars of the instrument are checked in the computer:
d. In case of any error, another s will be needed;
e. The payment is made if there is available amount in the account;
f. Paid instruments are kept by the officer.
Chapter 7
Clearing & Bills

Section
7. Clearing & Bills Section
Local offices branch of NCC Bank receives different types of instruments, such as cheque, PO,
DD etc. from its customers for collection. It also pays on behalf of its customers for those
instruments that come to it through clearinghouse. When instruments of NCC Bank are sent for
collection or received for payment through clearing house it is called Inter Bank Clearance or
IBC. These are treated in a little different manner than instruments of other Banks.
When the cheques are presented to a Bank by the other Banks for collection of fund and to
credit that into the partys account, the instrument must be cleared though Bangladesh Bank
clearing house. A receiving officer, receiver check by a deposit slips over the counter.
7.1 Inward Clearing
When instruments are sent to the Bank via clearinghouse, it entered into the clearing register.
The officer checks the instruments thoroughly before it is sent to the computer section for
posting. If any kind of error is found in any instrument it is dishonored and sent back with
appropriate reason for doing so. Instruments are also dishonored or insufficiency of fund. The
information is then sent back to the clearinghouse for taking appropriate action.
The instruments drawn on NCC Bank are received from other Banks in the
clearinghouse.
The amount and numbers of instrument received are entered in the house from the main
schedule of respective Banks.
The instruments with schedules are arranged branch wise.
The instrument sent to branches concerned for clearance.
The instruments are sent to the respective departments and the schedules are filled.
7.2 Outward Clearing
After filling the deposit in slip bearer of the instrument deposits the instrument to the respected
officer. Upon receiving the instrument the respected officer checks the essential features of the
instrument and whether the deposit in slip is filled accordingly or not. Then s/he crosses the
instrument with a seal containing Banks and branchs name, signs the deposit in slip and
provides the customer with counter foil of the slip. Then both the instrument and slip is sealed
with CLEARING seal and date seal contain the date of clearing. An endorsement seal is also
sealed on the back of the instrument and the officer endorses it on behalf of NCC Bank
Motijheel Main Branch.
It is then given entry in the clearing out register mentioning the name of the Bank and branch of
it, amount of money in deposit in slip, amount of money in the instrument, number of the
instrument and date of it. Then the officer separates the instrument from the deposit in slip.
Deposit in slip is kept in the Bank and the instrument is sent for clearing.
7.3 Short Collection (SC)
NCC Bank has many branches, which are not member of clearinghouse. When instruments of
these branches come to the branch for collection, different procedures are followed known as
short collection. When an instrument arrives for short collection following procedures are
applied:
The instrument is crossed with crossing seal.

Sealed with SC seal on its face.
Endorsed by the officer and the account will be credited on realization is written on
the back of it by the officer.
The instrument is then sent to the drawee branch.
7.4 Inward Bills for Collection
All clearing cheques are not received on the counter. Some cheques are received from
other source for collection. These cheques are received.
From other branch of NCC Bank. These are settled by sending Inter Bank Credit
Advice (IBCA).
From another Bank outside the clearinghouse. These are settled by debiting depositors
account and sending DD, TT, MT in favor of the sender Bank
These cheques are called IBA (Inter Bank Advice)
7.5 Inward Clearing Bills
It refers to the instrument drawn on NCC Bank branch received from other Banks in the
clearinghouse by the representative. Settlement process:
Bills collected from other Bangladesh Bank debits the NCCBL Main branch
Banks through clearing A/C of NCC Bank. Maintained sends the bills to other
house by Main Branch Of with Bangladesh Bank. branches.
NCC drawn on it and
other branch.
Branch debits customers Local office branch sends the

respective A/C. bills the branches
Chapter 8
Dispatch Section
8. DISPATCH SECTION
8.1 An Overview
Dispatch section is very important for a bank. Outward correspondence depends on
outward dispatch.
8.2 Types of dispatch

Inward Dispatch
Outward Dispatch
8.2.1. Inward Dispatch

All the letters by the dispatch section and delivered manager of section wise authorized
officer to opened and marked to the concerned department in charge.
8.2.2 Outward Dispatch

Outward dispatch is very important. Before the letters delivered they are duly stamped and
entries in the outward dispatch register.
Chapter 9
Accounts
Department
9. Accounts Department
9.1An Overview
Accounts department is the most important department In the bank. It supplies all numerical
data and information of the bank. Credit section, current deposit, staff payments total assets and
liabilities and various income and expenditure are shown in the statement prepared by the
accounts department.
9.2Functions of Accounts Section
1. To Prepare and maintain daily input journal, proof sheet and validation report.
2. To prepare flash report of daily liquidity position.
3. To maintain and prepare maturity balance sheet.
4. To maintain trial balance and financial account system
5. To prepare clearing difference balance.
6. Daily posting of vouchers issued by other departments.
7. Daily statement of affairs.
8. Originating and responding.
9. Financial control of the bank is done through this department.
10. Test agreed is another arrangement maintained for control purpose. Test control
agreed is most important for bank internal control.
11. Other miscellaneous work of the department.
9.3 Different Types of Statement prepared by Accounts Section

1. Daily Extract and Responding:
2. Statement of weekly Positions:
3. Statement o IBTA Interest Products
4. Statement of Salary with Suspense
5. Statement of Provided Fund:
6. Statement of Provisional Income, Expenditure and Consolidated
7 Statement of Cost of Fund
8. Statement of VAT
9. Statement of Deposit, Advance! Profit and Loss
Chapter 10
Foreign Exchange
(Import)
10. Import & Letter Of Credit

The import and export trade of our country is regulated by Chief Controller of Import and
Export (CCI&E). No person who has been granted registration by the CCI&E shall indent,
import or export any thing into or out of Bangladesh except in cases of exemption issued by the
government.
Business person in our country can import product from another country, for this transaction
they transfer Letter of Credit. In this part we will discuss about import procedure as general
basis because this procedure is accepted world wide.
Letter of Credit:
Letter of credit is a written undertaking issued a bank (Guaranteeing payment) at the request of
buyer (Importer) to the seller (Exporter) to pay at sight or a determined future date, up to a
stated sum of money, within a prescribed validity of the instrument (L!C) and against stipulated
shipping documents.
There are different types of L/C:

Circular letter of credit: It is issued by a bank at the request of this customer for availing
credit facility from beneficiary or draws his traveling expenses from banks in different places.
But with the introduction of Travelers Cheques and Credit Card, issuing of circular L!C is now
outdated.
Revocable credit: It is credit, which can be revoked or cancelled at any time without the
consent or notice of the beneficiary.
Irrevocable credit: This credit cannot be revoked, revised or amended/ changed without the
consent of all the parties i.e. the buyer, seller, issuing bank and confirming/ advising bank.
Red-clause or packing credits: Which bears an endorsement by opening bank on the credits
in Red-Ink a clause authorizing the confirming or negotiating bank to pay the beneficiary
against his drafts alone coupled with his simple promise to provide the documents in future.
Packing because the merchandise bought in the interior is shipped to the ocean port,
assembled and packed for over as shipment. Subsequently, bank can reimburse the amount by
negotiating the shipping documents plus interest accrued.
Revolving credit: An L/C can be revolving credit provided the wording will permit the
amounts of drawings to be again available to the beneficiary within the validity period. Clause
of opening bank to advising bank.
The amount paid under this credit become available to you upon your receiving
from us advice to this effect or
The amounts paid under this credit are again available to you automatically until the
total of the payments reaches a fixed amount. L/C opening branch doesnt need
to get permission from HO to open L/C each time if it is in the limit.
Stand by letter of credit: It is a contractual agreement between one bank to another or a bank
to its customers to provide agreed amount of funds as per arrangements set in the agreement.
Applicable only in case of subsidiaries of a bank abroad when they like to borrow from others
in that country since Parents Company is restricted by the law of the land to issue guarantee for
its subsidiary company.
10.1. Participants of L/C opening:
Importer: A company can import finished goods or purchase raw materials to produce the
product.
Exporter/ Beneficiary: Those who supply raw material or finished goods
Issuing bank: L/C opening bank is called issuing bank or L/C opening bank. Some time
issuing bank also does the work of advising.
Advising bank: Advising bank will receive the L/ C and send it to exporter or negotiating bank
Negotiating bank: On behalf of exporter negotiating bank do all the formalities with the
issuing bank.
Reimbursement bank: Issuing bank can pay to the negotiating directly or through
reimbursement bank. In this bank, issuing bank has an account, which is called a/c. in this a/c
issuing bank deposit required amount for L/ C payment.
Add confirmation: Supplier may want to receive payment from a specified and reputed
organization through that bank they will collect their payment.
Syndicate financing: It may be difficult for a small bank to finance for a big amount of L/C. In
this, few banks may finance circumstances L/C.
Indenter: An exporter may have an agent in the importing country. Then they do all process
and they send Indent to the importer. Indent includes all information required by importer as
types of product, price, quantity, shipment date, negotiating bank etc.
10.2. Import procedure:
At the request of the buyer, issuing bank opens L/C on behalf of importer. Advising bank in the
sellers/ exporters country advice L/C to the beneficiary. The issuing bank may also request
advising bank to confirm the credit.
The advising bank will advise/ inform the exporter that the L/C has been issued.
As soon as the seller/ exporter receive L/C and are satisfied with the terms and conditions, they
take initiative for shipment of goods.
After making shipment, the exporter submits documents to negotiating bank for negotiation
along with L/C copy.
Negotiating bank scrutinizes the documents and if satisfied, then they send the documents with
forwarding letter to the L/C opening bank.
After receiving documents, the opening bank checks the documents and if no discrepancy is
found, makes payment directly to the negotiating bank or through reimbursement bank.
10.3. Required documents for L/C opening:
A request letter for L/C opening with margin, amount of product and total cost
IRC (Import Registration Certificate): It is issued by CCI&E, which will certify that the
company has included itself as an importer.
TIN (Tax Identification No): Company give their tax regularly or not, this information will be
known from tax identification no.
Pro-forma invoice/ Indent: Three copies duly accepted. Exporter sends Proforma Invoice to
the importer, which contains types of product, price, quality, shipment date, negotiating bank
etc.
Insurance cover note: An insurance company must insure imported product.
VAT registration: Whether company submit VAT on their product or not.
Trade license: A valid trade license if expiry date is over they must renew it. Membership
certificate by Chamber of Commerce & Industry or Register trade association.
L/ C application (Provided by bank)
LCA form (L/C authorization form)
IMP form (Import permission): It is issued by CCI&E which will identify whether the
product is authorized to import or not.
Bankers solvency certificate
Approval of Drug Administration in case of importing pharmaceutical raw material and

packing materials etc.
Banker will consider following documents to open a L/ C:
Proper assessment of applicants credit worthiness, integrity, past performance etc.

Suppliers credit worthiness
Competitive price of goods- Bank will consider minimum three competitive companys market
price for this
Demand of goods in the market
Durability of goods
10.4. Proposal for L/ C opening:
If all required document is clear then issuing branch will prepare the proposal by following
way:
Proposal for L/ C opening
Reference No: ________________ Date: (proposal preparation date)

Senior Executive Vice President
(Name of the Bank)
Head Office
Dhaka.
Re: - Proposal for allowing permission to open L/C (Sight)/ days deferred for (FC) e.g.
$6,138 Equivalent to Tk. e.g. 3,72,000 at 10% margin and subsequent LIM/LTR/Term
loan facility for Tk. e.g. 3,72,000 a/c Name of the company
At the request of our above-mentioned client we would like to request you as under ------ To
allow us permission to establish the letter of credit(s) as per the following details:
Among of L/C (FC) e.g. $6,138@ Tk. 59.80 (Exchange rate) Eqv. Tk. e.g.3,72,000margin
25% (sanction by HO).
Sanction of subsequent LIM/LTR/Term loan for Tk.e.g. 3,34,800 for 45 days
1. Particulars of the clients:
Name of the account: Name of the company
Address
Business:
Office:
Factory:
Account no and date of account opening: (Info filled by bank)
Maximum balance: Minimum balance:
Average balance;
Date of first sanction : (Info filled by bank)
Constitution/ legal status : Private/Public/Others
Date of Incorporation/Establishment :
Date of commencement of business : Date of issuance license
TIN no : (Info filled by bank)
Nature of business : e.g. deep tube well
Net worth of business : Info given by party
Market/ place of business/ area of :
Operation :
Relationship history : Relationship with bank
(e.g. company has been maintaining a CD a/c since 2000 and enjoying various credit facilities)
Capital structure (for ltd. Company)
Authorized capital : Capital investment in the business
Paid up capital : Deposited amount is BB at the establishment period
of the company
Investment in business : Invested amount in the market.
IRC no :
Valid up to :
Type of IRC : Commercial/ Industrial
2. Name of the proprietor/partners/ directors:

Name Fathers/ Permanent Present Age Share Status Net
Mothers/ add with add (%) worth
Husbands phone no with
name phone
no
3. Particulars of the guarantor:

Guarantors name
Address
Permanent
Present
Relationship of the guarantor with the applicant
Guarantors back ground

Net worth of the guarantor
Liabilities with our bank/other banks and status:
Name Name Nature Amount Validity Present Classification
of of of of limit outstanding status
account bank advance
4. Liability position of the client! allied concern with our bank:
Name Name Nature Amount Validity Present Overdue Security
of the of of of limit outstanding
branch account advance

Funded
Non-
funded
Total
I. Break up liability LIC:
Name of a/c L/C no, date and Description Margin Shipment HO

allied a/c amount of goods held validity sanction
reference
ii. PAD/ABP:
Nam PAD! Amou Present Maturit Over Item Date of Related

e of ABP nt of outstandi y date due & arrival HO
a/c no, PAD! ng relate of goods at sanctio
allied date of ABP d L/C the n no
a/c creatio no port
n
Iii. LIM/LTR:
Nam LTR/LI Amou Present Maturit Over Item & Whether LIM
e of M no, nt of outstanding y date due related goods are under
a/c date of LTR/ L/C effective control
allied creatio LIM no of the branch
a/c n
5. Liability position of the client! allied concern with our bank:

Name Name of Nature Amount Validity Present Over Classification
of the the of of limit outstanding due status
bank borrower advance
b. CIB information:
7. Global exposure:
Nature of Amount Outstanding Overdue Classification
advance of limit status

Funded
Non-funded
Total
8. Performance of the client/ allied concerns (last 3 years) with our bank:
Import
Year L/C opened Documents retired Outstanding
No Amount No Amount
Export
Year Export made Proceeds Proceeds Others
realized yet to be
realized
9. Earning from the client/allied concerns during last 3 years:

Year Interest Commission Others Total
10. Particulars of L/C:

Description of the commodity
Quantity
Unit price
Total price
Sales term
CFR or C&F (Cost & freight): C&F is a contractual trade term indicating that the
price quoted includes cost of goods and transit costs. I.e. freight upto the named
port of destination.
FOB (Fright on board): Deliver the goods on board a ship at a port of shipment
named in the sale L/C at his own cost and risk. Seller is also to provide a clean
bill of lading under this contract. Buyers primary responsibility is to take
delivery of the goods after payment of freight, duty and taxes, port dues etc and
bring the goods in his own premise at his own cost and responsibility.
CIF (Cost, Insurance and Freight): The cost of the goods, the insurance and the
freight to the destination are included in the contract price. Under this trade term,
the seller, besides, cost of goods and freight has the added obligation to arrange/
procure insurance against the risk of loss and damage to the goods during the
carriage up to the named port of destination.
H.S code no : Whether this product is valid to import or not

Country of origin : Manufacturing country
Name &address of the beneficiary:
Status report of the beneficiary
Obtained/ not obtained
Mode of shipment e.g. truck Port of shipment
Last date of shipment:
Utilization of the goods: Trading! Own utilization
Marketing arrangements:
Margin proposed by the party:
Margin recommended by the branch:
Branchs total exposure on the proposed item of import
Branchs total exposure on the proposed item of account of the client
11. Calculation of landed cost:
C&F value Tk.

Add 1% insurance premium Tk.
Sub total Tk.

Add 1% port fees on (A) Tk.
Assessment value Tk.
Tariff value, if any
Duty on (B) Tk.
Supplementary duty% on (B)Tk.
Sub total Tk.
VAT15%on Tk.
AlT 3% on (B) Tk.
DSC ~ on (B) Tk.
Others 1% on (B) Tk.
Misc. 5% on Tk.
Total landed cost Tk.
Total landed cost is : __________% of L/C value
Landed cost per unit: Tk.
Market price per unit : Tk.
12. Arrangement for retirement of relative import bill:

CashLIMLTRTerm loanOthers
13. In case of cash retirement of documents:
14. If post import finance is required:

Amount of post import finance :Tk.
Margin :Tk.
The post import finance is
Value / landed cost :Tk.
Duty, VAT and all other incidental charges will be borne by the client/ bank.
10.5. Elements of L/C:
Field 1: Sequence of total- If is written means it may be revocable or irrevocable L/C.

Field 2: Form of documentary credit-Revocable L/C or Irrevocable L/C Field 3: Date of issuing
L/C
Field 4: Date and place of expiry- Date of expiry and name of negotiating bank
Field 5: Applicant- Name of importing firm with address and telephone no.
Field 6: Beneficiary- Name of exporting firm with address and telephone no
Field 7: Currency code- In which currency transaction will be occurred.
Field 8: Maximum credit amount- Declared amount shouldnt be exceeded.
Field 9: Available with be- Name and address of any bank in beneficiarys country by
negotiation
Field 10: Drafts at- Sight (exporter can demand payment after delivering the draft)! DP
(Payment will be done at a specific date).
Field 11: Drawee- Name of the L/C issuing bank.
Field 12: Partial shipment- Exporter can sent product at a once or part by part.
Field 13: Transshipment- Product will reach to its destination by changing transportation or not.
Field 14: On board! DISP! taking charge at!F- Product exporting country.
Field 15: For transportation to- From which check post product will reach to its destination.
Field 16: Latest date of shipment- During the specified time exporter has to finish the shipment
Field 17: Description of product with price and quantity.
Field 18: Charges
Field 19: Period for presentation- Date for submission of all required document.
Field 20: Confirmation instruction

Field 21: Instruction of payment/ Acceptance/ Negotiating bank.
Field 22: Sender to receiver information- Issuing and negotiating bank must follow internal
rule.
Field 23: Documents required
Field 24: Additional requirements
Accounting entry: At the time of opening L/C following voucher will be passed Reversal of
Contra voucher:
Bankers liability for L!C Cr.

Customer liability for L/C Dr.
Party debit voucher: Margin (Bank will deduct a percentage of total amount it is called margin),
VAT, commission, postage, telex, stamp charge.
Single credit voucher:
Sundry deposit a/c for margin and VAT
Income a/c for commission, postage, telex
Stamp and stamp from in hand a/c
All information will be register in the L/C opening register:
Date L/C# Name, add & Equivalent Description Country of
IRC on of party Foreign of taka of goods origin
currency
amount
Tenor Shipment Negotiating Amount Commission Postage Telex Sign Name of

expiry expiry date of reimbursemen
date margin t
bank
During L/C opening liability will be Dr. and margin will be Cr.
Liability created against the L/C

Date L/C# Dr. Cr. Balance Initial
Margin
Party has to pay commission of total amount @ 0.6% at the time of L/C opening
10.6. Reimbursement authority:

L/C issuing bank will send all the required documents to reimbursement bank through telex or
SWIFT (Society for World Wise Inter Bank). Required documents are:
Name of negotiating bank
Name of beneficiary
A/c no of beneficiary
Amount
10.7. Pre-shipment Inspection (PSI) document preparation:
PSI is introduced to delivery imported product faster. For this purpose government has started
three PSI companies. They divide the whole world into three blocks. Name of those three
companies are:
Block A- M/S Intertek Testing Service (ITS)
Block B- M/S Inspectorate Griffith Ltd.
Block C- M/S BIVAC International Bureau Veritas Group
Required documents for PSI are:
Inspection order from dully filled in
Copy of insurance cover note
Copy of amendment- From starting to the ending of the transaction all report will be submitted
by the exporter to the issuing bank. Depending on that they will prepare amendment to find is
there any discrepancy or not.
Copy of L/C
Copy of pro-forma invoice/ indent.
After the inspection PSI company will prepare Clean Report of Finding (CRF) and send it to
issuing bank.
10.8. Document Checking:
Through negotiating bank exporter will send all required documents to issuing bank. Exporter
may send original or copy documents. If issuing bank endorses the copy document then
importer can release their product using it. It is very important to check all documents carefully
because one small discrepancy may occur a big problem. Required documents are:
Currier receipt
Forwarding letter
Bill of exchange- An instrument is writing containing an unconditional order, addressed by one
person or concern to another, duly signed by the marker as drawer of the instrument, directing a
certain person or concern i.e. addressee as drawee to pay a certain sum of money only to the
order, or to the bearer of the instrument on demand or at a fixed or at a determinable future
time.
Bill of leading- A document signed either by the master of the ship or the owner, or their agents
acknowledging the receipt of goods for carriage to a stated destination from the specified ports
of shipment, the condition under which the goods accepted for carriage with an undertaking to
deliver the goods to the consignee in the like order as received.
Insurance copy
Certificate of origin
Packing list
Invoice
Any type of phytozanitary, insecticides, fumigation certificate
If every thing is clear then issuing bank will send money to the required bank mentioned in the
forwarding letter.
10.9. Types of post import finance:
If L/C issuing bank get original document first they will check the documents. Post import
finance can be:
Cash: Party can repay their money in cash.
LIM (Loan against merchandise): LIM may be created at the request of the importer while he is
not in a position to take delivery of import bills by making full payments of entire bank dues. In
such a case PAD is transferred to LIM a/c and the overdue interest from the negotiation date to
the date of transfer to LIM a/c is charged. Margin on the landed cost is ascertained and customs
duty, sales tax etc are to be borne by importer. After clearance, consignments are stored in
banks godown or partys godown under banks effective control. Goods are delivered against
proportionate payment and adjusted within the validity. Validity for commercial items is 30-45
days and for industrial item 90 days.
Force LIM: If it so happens that the importer does not proceed to retire import bill in spite of
repeated request/ reminders and the imported goods incur demurrage at the port and further will
expose more demurrage along with possibility of damage/ pilferage, bank take initiative to
create forced loan in the form of LIM and keeps consignment in its godown for adjustment of
liability through sale proceed of goods.
LTR (Loan against trust script): Bank has to part with the goods of the bill of lading without
receiving the amount due from the customers, it is essential that bank should take a Trust
Receipt signed by the customer, agreeing to hold goods or their sale proceeds in trust, for the
bankers, so long as the entire amount due to the borrower is not paid off. If a customer who has
signed such Trust Receipt fails to hand over to the banker, the salt proceeds of the goods sold,
the former will be liable for criminal breach of trust.
LTR may be sanctioned at the request of bonafide customers of the bank. After sanctioning
LTR import bills are handed over to the importer who will clear the goods from custom
authorities by making payment of custom duty, VAT and other charges. The goods will remain
at the custody of the importer. LTR is allowed for 30-90 days. It should be covered by collateral
security and post dated cheques.
Composite limit: Now a days it is common practice for the bank to sanction composite limit for
big customers in the form of CC (H), L/C limit, LTR etc. In this case sanction from HO is taken
only once in a year. So it promotes customers service.
Lodgment against original document:
1. Reversal of contra voucher:

Customers liability for L/C Cr.
Bankers liability for L/C Dr.
2. IBTA HO-ID Cr.

PAD (Payment against document for sight L/C) a/c or
ABP (for DP L/C) a/c Dr.
3. If party pay cash, voucher will be prepared upto this stage

PAD a/c Cr.
Sundry deposit-margin a/c Dr.
4.PADa/c Cr.
LIM/ LTR Dr.
5. LIM/ LTR margin (This margin amount will be deducted at a percentage of total
LIM/LTR amount) a/c Cr.
CD/CC a/c Dr.
If party applies for LIM/ LTR, bank will charge an interest of 12.5-15% on daily basis. It is
applicable for normal cash payment also. It means from L/C document receiving by the bank to
the receiving by the party, bank will charge interest. Lodgment for copy document: In this
situation bank cannot create PAD a/c because they didnt get original document of L/C.
If party pay cash then lodgment will be done following way:
1. Reversal of contra voucher:

Bankers liability for L/C Dr.
Customers liability for L/C Cr.
2. Partys CD/ CC a/c Dr.

Sundry deposit margin a/c Cr.
When bank will gat the original document then they will create PAD a/c and adjust it using
exchange rate of that day and create. It there is any variation with paid amount and PAD
amount bank will adjust it using CD/ CC a/c.
During L/C closing liability will be Cr. And margin will be Dr.
Liability created against the L/C

Margin
Bill of entry: For all type of L/C importer must collect bill of entry it is an evidence that
importer has receive their product or not. Customs supply it to importer from port. Importer has
to submit it to issuing bank.
Chapter 11
Foreign Exchange
(Export)
11. Export & Master L/C Processing

Export L/C operation is just reverse of the import L/C operation. For exporting goods by the
local exporter, Bank may act as advising bank and negotiating for the exporter. As a negotiating
Bank, it receives documents from the foreign importer and hand it over to the exporter.
Sometimes it adds confirmation on the L/C on request from the opening Bank. By adding
confirmation it assumes the responsibility to make payment to the exporter.
As negotiating Bank, it negotiates the bills and other shipping documents in favor of the
exporter. That is, it collects proceed of the export-bill from the drawee and credits the
exporters account for the same. Sometimes the bank purchases the bills at discount from the
local exporter and waits till maturity of the bill. When the bill matures, Bank presents it to the
drawee to encash.
In our country, export and import operation of Bank is very much related with one another
because of use on Back to Back L/C. Most of the L/C opened is Back to Back L/C and maturity
of payment for Back to Back L/C is set in such that it can be paid our of export proceeds. So
export and import sections works as one unit. These two operations can hardly be separated
from one another in the branch.
11.1. Master L/ C:
Less than one export L/C there may be a number of back to back L/C (import L/C) this export L/C is
called Master L/C.
11.2. Export procedure:

Securing export order from foreign buyer directly or through agent
Registration with CI&E
Receiving L/C from buyers bank through an advising bank in Bangladesh
Certification of Exp. From by authorized dealer
Yes Mark banks lien on the face of the original L/C

Obtain necessary securities
Will the export
be allowed any
pre-shipment Arrange shipment of goods through banks
credit facility? approved C&F agent the interact them to send the
original bill of landing etc. to the bank directly
No
Shipment of goods by export
Preparation of export doc. For submission to negotiating bank
Securitization export doc. By negotiating bank
Yes
Ask exporter to remove discrepancies
No
Are the doc.
Discrepant? Inform opening bank about
Are the discrepancies
discrepa
nt
Do they allow
remove?
No Yes negotiation?
Negotiate doc.
No
Dispatch doc. With reimbursement instruction
Send the doe, for collection with
reimbursement instruction, pass
Check whether youre a/c with foreign bank has been
credited liability voucher & enter into
FDBP
No
Has it Send reminder to paying bank

been?
Yes Retire FDBP
Dr. HO ale foreign bank
Cr. FDBP/Exporter a/c
11.3. Requirement to open a master L/ C:
Nationality and assets certificate of the proprietor/ directors

Registered partnership deed in case of partnership concerns
Memorandum and articles of association and incorporation certificate in case of limited
company.
Bank certificate
Income tax certificate (TIN)
Copy of valid trade license
Copy of rent receipt of the business premises
Membership certificate of trade association
Affidavit from a 1st class magistrate
11.4. Required documents to submit to the negotiating bank:

EXP form
Photocopy of the contract
Freight certificate from the bank in case payment of the freight is to be made at the port of
loading is involved
Railway receipt, truck receipt
Shipping instruction
Insurance certificate
EBP (They will provide certificate of origin)
Bill of exchange
Invoice
Packing list
GSP certificate
Any other certificate as required in the policy etc.
11.5. Preparing proposal:

Proposal preparing process is same as we have learned in import L/C. for export L/C proposal
we will include a check list with the proposal. This check list is a company brief; format of
check list is given below:
Export L/ C check list

Name of LC opening bank:
Export L/C no and 1/C opening date:
Amount of export L/C:
Name of foreign buyer:
Name of beneficiary:
Lat date of shipment of export L/C with mode:
Port of destination:
Expiry date of export L/C:
Place of expiry of export L/C:
Whether the L/C has been issued as per UCPDC in force:
Whether it is Authentic/ test agreed:
Whether the L/C is irrevocable:
Whether the L/C is transferable:
Whether the L/C has been transferable:
Whether transfer is regular:
Whether the L/C is confirmed by the third bank:
Whether negotiation is restricted:
Negotiation date:
Bill of lading clause/ airway bill:
Whether export L/C is genuine:
Payment clause:
Basis of L/C whether FOB/C&F/CIF:
Name of exportable category no:
Export promotion bureau license/ allotment:
Quantity of exportable:
Name of country of export:
Name of particular shipping line:
Reimbursement instruction in export L/ C:
If the export L/ C opening bank is not reputed/ known to us whether credit report obtained:
Fabric/ yarn description of export L/ C:
Description of fabric/ yarn/ accessories as pr proforma invoice/indent:
This proposal and check list will be send to head office for sanction.
11.6. Discrepancy:
After getting the L/C from issuing bank negotiating bank will check all the documents. If they
find any discrepancy negotiating bank can cancel the L/C. they will check the following items:
Letter of credit:
L/C expired
Beneficiarys name differs
Overdrawn by
Late shipment
Late presentation
Part shipment effected
Others
Bill of exchange:
Amount in words and figures differs
Amount differs from invoice
Issuance differs
Does not bear interest clause
Others
Invoice:
Short of copies
Original not legalized
Not dated
Not signed
Absence of company stamp
Amount in words and figures differs
Amount show discount deducted
Shipping marks differ
Goods differ in description
Do not certify as per order/ indent
Third party documents
Others.
Bills of lading:
Not endorsed
Name of carrier
Notify party differs from L/ C
On board notation not dated
On board notation omitted
Does not state name and capacity of the party on whose behalf the agent in action
Not marked freight paid/ prepaid
Alteration not authenticated

Not marked out to order
Not marked only
Transshipment effected
Short negotiable-non-negotiable copies
Others
Insurance policy/ certificate:

Dated after B/L date
Not endorse
Third party
Containing port delay clause
Does not cover risks as required
Amount under insured
Different currency
Claims not payables at destination
Others
11.7. Back to Back L/ C:
It is a secondary L/C issued by a bank on behalf of the beneficiary against a master L/C. In
favor of suppliers located inside or outside or the beneficiary country of original master L/C.
A client may want to open a B to B against his master L/C. In this situation bank will open a B
to B of 75% of master L/C with 10% packing cost, This amount will vary along with the
reliability of the client. B to B may be opened in-
11.7.1. Foreign B to B:
If the product is exported from another country then bank will open foreign B to B.
Requirements for foreign B to B:

Bill of exchange
Invoice
Packing list
Export no
Bill of leading
Shipping advice
Beneficiary certificate
Insurance
Contract no
Visa no
11.7.2. Local B to B:
If the product is exported within the country then bank will open local B to B.
Requirements for local B to B:

Bill of exchange
Commercial invoice
Packing list
Shipping advice
Beneficiary certificate
Delivery challan
Beneficiary declaration
11.8. Different charges:
When bank open an L/ C they charge commission. If L/ C is for 90 days then bank will charge
0.6% @ total amount for both local and foreign B to B. If it is 120 days then they will charge
0.9% for foreign and 0.8% for local.
Acceptance of advising will charge Tk.1, 500 (if they are not a NCCBL,s client) and Tk.1,000
(if they are NCCBL,s client)
L/ C advising charge Tk.300.
Amendment charge Tk.100
Swift charge Tk.3,000 for any other country except India. Swift charge for India is Tk.1,200.
Postage charge Tk.200
Miscellaneous commission Tk.500.
When exporter make delay for shipment bank create term loan against them.
Chapter 12
The SWOT
Analysis
The SWOT Analysis

Internal Factor
Strengths
Well reputed in the Market.
Not engaged in unfair business practice
Concentrated market
Well experienced professionals
Well Decorated
Efficient management practices in the bank
Good Inter-personal relation among the officers & executives
Lack of classified Loan
Good Banker relationship
Satisfactory position in CAMEL rating
Weaknesses:
Short period of experience of the bank
Reluctant .to Add Campaign
Small market shortage
High interest rate of loan
Dont have enough ATM service for attracting more customers
Social responsibilities issues are neglected
Insufficient number of deposit Scheme and loan
External Factors
Opportunities
Can increase the deposit and credit scheme for the small business
Private commercial banks becoming more reliable to the general people
Govt. has banned some Jatiya Sanchaya Patra

Govt. has taken step against illegal remittance
Threats
Many local and foreign aggressive Banks are in the market Competitors have more
deposits
Different aggressive offers and services of foreign and other local banks
Daily basis interest on deposit offered by the foreign banks
Entrance of new private commercial banks.
Competitors have more attractive deposit schemes
Govt. imposes high rate of taxes and VAT
Govt. pressures to reduce interest rate.
FINDINGS
To do the internship in the NCCBL, I work with the officers and I observe many things. And
with those observations, description as well as analysis of the topic, I find some factor those are
particularly applicable for the NCCBL. Those are given below:
1. The NCCBL has online banking system for providing better service to the customers.
But, the online bank is not implied in all the branch of NCCBL. Mainly, busy cities
branches (cities like- Dhaka, Chittagong) have that kind of facilities. Having manual
and online banking at the same time, the bank sometime find some problem to do their
inter branch activities.
2. To do the online banking, NCCBL use MICROBANKER a banking software to run a

banking operation. This software has lot of option to do, but still it has some lacking. To
this system, only limited use can login at a same time. So, all the employees of the bank
can not work with this software at a time, and some time it becomes slow to take the
entry. And some statement can not be provided by this software which other banks
system can do, such as the MIROBANKER is not able to provide the statement of
Fixed Deposit.
3. Only a few officers know, entirely, how to operate the MICROBANK (online banking
software of NCCBL). Most of the officers only know the some portion of the software
which they use to work.
4. Currently, one of the most profitable products for NCCBL is Money Gram which is
used to send foreign remittance. Money Gram is less charge and time than the Union
Money Transfer and other money transfer agent which normally attract the growing
market of foreign remittance. At the some time, the bank is providing the service Money
Express, UK money speed.
5. The NCCBL is using SWIFT (Society for Worldwide Inter Bank Financial
Telecommunication) to provide better service for the customer of foreign trade and
exchange. This allows doing many businesses with the foreign market. And it always
gives change to the bank to update the foreign financial currency and market
information regularly.
6. The accountability is working in the NCCBL. Every day they have finish their transaction
and if there is any miss match, the employees have to explain it and even have to pay for
it. So the condition of transparency is good here. This job use to do the Accounts and
Administration Department.
7. The NCCBL has a training institute to build a better work force. When a provisional officer
joint the bank, the bank arrange some training course associate with Bangladesh Institute
of Bank Management to improve the officers skill.
8. The bank had introduced its ATM card to the market and it has only a few ATM Booths
right now. Inefficiency of the management decision makes the scope of the ATM limited.
9. NCCBL has introduced the Visa Card to the market in the last year, 2005. It gives the
customer access to the local and foreign market. NCCBL providing this service with
comparatively low interest and charge.
10. The NCCBL is showing their growth by increasing the number of branch. In 2000, it
had 27 branches. The management of the bank able to find of the need of the client mainly
the middle class business owner. Though the strategy of bank is conservation, by selecting
the right target group the bank has increase growth of their market. Currently they have 48
branches all over the country.
Suggestions and Recommendation
Being a fresh Graduate, this will be my audacity to suggest on the performance and actions
of the Bank and on the experienced professional bankers. The bellow issues are some of my
observations based on my education prevailing circumstances comparing to other banks and
sometimes on the customers point of view.
1. Although the approach of NCCBL is proactive in finding good customers but their
advertising are limited. Still there are a lot of good small enterprises companies that are in
good ground in their respective field of operations- This seems to be conservative to me
and will not be much helpful for small entrepreneurs, who arc not well known at his
moment. I think that NCCBL should change their approach so that small entrepreneurs and
businessmen can get their services without many hassles.
2. 24 hours banking facilities like ATM facilities should be introduced to become more
competitive with the market as all other Banks already introducing.
3. Bank should introduce new short term schemes like micro-credit for the poor and small
Entrepreneurs. Our Bangladesh is a poor country so most of the people has got no enough
money to start new own venture. Through the expansion of small business opportunity
country can grow. Small business are very easy to handle and manage and also less risky
for the Investment as a Banker. More-over these kinds of customers are much more loyal
and honest to the Bank. Grameen Bank is the best example For this. Vast business
opportunity lies in this area. NCCBL management should think how o explore this
opportunity.
4. Bank should use job rotation to remove job monotony among the officers which will
increase their efficiency as well.
5. The bank should offer incentive scheme for the good customers.
6.All business venture are public undertakings and for the peoples well being. So, the bank
should get themselves more involved with Social issues which will certainly increase their
brand image besides the well being of the society.
7. Bank should be more proactive to listen and should put more attention to the customers
problem and for their help. This kind of human approach, some times create kinds of
happiness among the customers mind regarding Bank.
Conclusion
National Credit Commerce Bank Limited (NCCBL) is serving the market with almost full
range of services. As the number of branches implies, still Bank has limited operation in
our country, but it should also be noted that within the next few years from its
establishment, no bank could make as good standing as NCCBL has now
While go through the different reports its found that. Authorized and paid up capital,
reserve fund, Savings, Loans and advances. Loan Management, investment foreign trade,
treasury activities, capital market activities, no. of Branches! Dividend Good corporate
governance, compliance of the regulations provided by Security and Exchange
commission etc. are moving towards a highly positive trend at the satisfactory level.
The Bank is run by a group of professionals who are well organized and committed to the
bank. Now it is gradually moving towards automation and which will not allow any sort of
discrepancies. Bank now aggressively looking and establishing Foreign partners at abroad,
to make easier and shorter the time for the remit of NRB. All the above implies that they
are successful in gaining the trust of the people and business entities of our country.

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Overall Banking System of NCCBL

1. Background of Banking Sector

1.2. Scope and data collecting methods:

Secondary sources include:

As per Bank compliance, as an intern I was unable to obtain indispensable experiences of

While preparing this report I have faced some problems:

NCCBL and Its

2.1 An Overview of NCCBL

2.2 Historical Starting

2.4 Values of the Bank

2.5 Mission of the Bank

Maintaining the highest ethical standards and a community responsibility worthy of a

Audit Inspection Recovery Distribution

Human Resource Division

Information Technology Division

Reserve Fund & Other Reserve

2.7.1 Management Hierarchy

Senior Executive Vice President

Executive Vice President

Senior Assistant Vice President

Assistant Vice President

Senior Principal Officer

2.8. Products and Services Offered

2.8 Profile at a Glance

Proposed bonus share Tk. 109.3 million

3.2 Types of Account

3.2.1 SAVINGS ACCOUNT

3.2.2 CURRENT ACCOUNT

3.2.3 SHORT TERM DEPOSIT

3.2.4 FIXED DEPOSIT RECEIPT

3.3 Rate of Interest on Deposit offered by the Bank

Types of Deposit Rate of Interest (0/0 per annum)

3.4 Requirements and Documents needed for opening Bank Account

B. Current Accounts: Individual

1. Photographs (2 Copies) attested by Introducer

C. Current Accounts: Proprietorship

1. Photographs (2 Copies) attested by Introducer

D. Current Accounts: Partnership

1. Photographs (2 Copies) attested by Introducer

E. Current Accounts: Limited Company

1. Photographs (2 Copies of MD attested by Introducer

3.5 Account Opening Procedure

3.5.1. Time liabilities or term deposit:

3.5.1.1. Fixed Deposit Receipt:

There is a list of interest rate for each category of deposited amount

FDR for 3 months 7.50% 7.75% 8.00%

There is an access duty rate for different deposit amount-

Category of deposit Access duty (Tk/-)

Tax deduction rate is 10%

Fixed deposited amount=X

Different payment procedure:

First he/she will do G.D in the police station.

Branch will inform it to the H/O

3.5.1.2. Sanchay Patra:

Purchasing procedure of S/P:

Date Ac# Ac. Holders Reference no Amount

Interest receiving process:

3.5.1.3. Short Term Deposit (STD):

3.5.1.4. Barrier Certificate Deposit (BCD):

It is another kind of deposit account. Here verification is less important as it is highly

3.5.1.5. Special Saving Scheme (SSS):

Monthly installment (Tk.) Five years (Tk.) Ten years (Tk.)

3.5.2. Demand liabilities or demand deposit: