NCC Bank-A New Look

A Look from Ncc Bank
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1.1Introduction: Bachelor of Business Administration (BBA) is a professional course. The course is designed with an excellent combination of practical and theoretical aspects. After completing BBA certain times is preserved for internship. As a student of BBA with the requirement of my course I was assigned to National Credit and Commerce Bank limited (NCCBL) to panthopath branch, Dhaka for my internship. However, I was very much interested to know how to develop banks. So I chose the research topic as A look from NCC Bank Ltd They intend to ensure the trust and condence of the customers through focused customer orientation, quality of service and state-of the art technology, transparency in dealing and adopting the best practices of Corporate Governance, achieving excellence in all the endeavors to create value for all the stakeholders. The signicant challenge posed before them is the maintenance of the quality of business simultaneously with its information and business consolidation processes. This report is prepared based on the: topic Overall Banking System and Performance Analysis of NCCBL.Due to this practice the remittance department of NCC Bank has been growing to provide a good participation in the protability of the Bank. Basically, this report is highlighted on overview of NCC Ba Present status, Performance of NCCBL, Deposit Mobilization, Utilization of Fund, Foreign Exchange, Ratio analysis , Swot analysis Recommendation and conclusion. 1.2 Rationale of the Study The word bank refers to the nancial institution that deals with money transaction. Commercial banks are the primary contributors of the economy of this country. On one hand they are borrowing money from the locals and on the other hand lending the same to the locals as loans and advances. So the people and the government are very much dependent on banks. Moreover, banks are prot earning concerns, as they collect deposits at the lowest possible cost and provide lo between two is the prot for the bank. This report basically deals with the loan and advance management of National Credit and Commerce Bank Limited (NCCBL) covering the areas like General Banking, swot analysis , Foreign Exchange, Ratio analysis Financial Performance, etc. 1.3 Scope of Study his internship program gives me a great scope or opportunity for gather experience and knowledge in several areas of banking by which I can evaluate or expose myself. During:-e rst few week of my internship period, I was able to communicate most of the employees of the bank. During the rst month I was able to accustom and adapted myself with the working environment of NCC
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Bank Limited.While preparing this report, I had a great opportunity to have an in depth knowledge of all the banking activities practices by the NCC Bank Ltd. It also helps me to acquire perspective of a leading private banking in Bangladesh. In term of Bank we can easily understand that the nancial institution deals with money. 1.4: Objectives of the Study Though the main objective is to prepare myself in such a manner as though I can equip myself with the practical eld as well as I will be able to know the dierent aspect of the banking sector and to evaluate how a bank is performing in Loans and Advance sector. In addition, the study seeks to achieve the following objectives: General Objective: To examine the overall credit risk management of NCC Bank Limited- a commercial Bank of Bangladesh. Specic Objective: - To analyze various credit policies of NCC Bank Limited. - To examine the credit appraisal procedures followed by NCC Bank Limited. - To study the control mechanisms followed by NCC for lending. - To observe the overall asset quality of NCC. - To recommend some suggestions for further development of NCC. There are many objective of NCC Bank .given below 1. To know the work environment and organizational behaviors of the bank 2. To get through all the departments of the bank and observe the actual work done 3. To nd out how the general banking system works 4. To see how the loans and advances are provided to the borrowers 5. To acquire knowledge about the foreign exchange system of the bank 6. To analyze the growth of deposits in the bank 7. To analyze the growth of advances in the bank 8. To analyze the growth of investments in the bank 9. To compare the nancial performance among several years of the bank and with other
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1.5 Methodology In collecting the necessary data, a special care has been taken so that all the variables may not aect the objectives of the study. Data needed for conducting the study have been collected from the following sources. a) Primary source and b) Secondary source Primary sources The primary data in this report mainly includes surveying the dierent departments of the Bank. It includesScheduled survey Observation while working in dierent desks Informal discussion with professionals Secondary sources Secondary sources are the permanent and printed sources of information. This areAnnual reports of NCCBL Desk report of related department Brochures of National Credit and Commerce Bank limited Dierent reference books Study of related books, seminar paper, training papers, Publication of statements 1.6.Limitations of the Study 1. Although I have enjoyed full co-operation from employees of NCCBL and they also gave me much time to prepare this report properly in the way of my study, I have faced some diculties, which can be termed as limitations. They are as follows: 2. It should be certainly mentioned that time constraint is the rst limitation of the study. Only three months is not sucient for gathering perfect knowledge on the vast area of bank. 3. In some cases, they could not be able to supply my topic related data for preparing a more in depth research study. Oce secrecy was one of the most
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important problems. Disclosing of some information was restricted. 4. In case of secondary data collection, there was very little secondary information. There were few support books, reports, journals, etc. moreover, the branch oce had very little of this information. Thats why bulk of it had to be collected from the head oce. As the ocers were very busy with their day to day work, they could provide very little time. CHAPTER -2 Organizational Introduction 2. 1 History of NCCBL National Credit and Commerce Bank limited came to reality through the National Credit limited. Prior to conversion into a scheduled commercial bank, National Credit Limited(NCL) was incorporated as an investment company on 18th November 1985. It made its January on 25th November 1985 at its registered oce and rst branch at 7-8 Motijheel Commercial Area, Dhaka-1 000 with initial authorized capital of 1k. 30 crores. It was mostly involved in collecting suitable resources and making protable investments. But within a very short period of time this investment company turned into a scheduled commercial bank. It was turned into a bank because it faced many restrictions both collection and disbursement of funds while it was operating as an investment company. While this turnover was going on all types of transactions were closed for about fourteen months from April 22, 1992. After that, with the permission from the government and Bangladesh Bank, NCL was converted in a full edged commercial bank and started its banking operation on 17thMay 1993, in the name of National Credit and Commerce Bank Limited. It has been registered under the company act-1913, as a private commercial bank with paid up capital of Tk.39 crores to serve the nation along with 16 branches. However, NCCBL runs as per company rule, free from government intervention Year 1994 & 1995 were the full operation year of the bank. During this period gave emphasis on considering the aairs of the institution as well as expansion of business work.During last 13 years if its operation NCCBL has acquired commendable reputation by providing sincere personalized service to its customers through a technology based environment. 2.2 Objectives of NCCBL The main objective is to maximize prot through customer satisfaction which very much reects the idea of marketing concept. NCCBL has been ensuring maximum prot by avoiding best and improved customer service along with other corporate objectives mentioned below:
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v To provide excellent customer service to its clients, so that they choose NCCBL rst for their banking. v Ensure high return on investment and services with dierent service products. v Making protable investment and grow in annual prot management. v To remain as the market leader through diversication of business and automation of banking operations. 2.3 Vision The purpose of the bank is to become The Bank of Choice in the communities we serve. We accomplish this by oering to our customers the nancial services they expect while providing a return to our owners. In accomplishing this mission, the bank has now been free from all the natures of a problem bank through fullling all the conditions set by the central bank. We proudly say: NCCBL is prot-making and problem-free. 2.4 Mission Philosophically, a bank is a nancial institution, which accepts depositors money for safe-keeping and contracts with the depositors to lend this money at interest to inviduals who are in need of its use and who can give ample security that the loans will be paid. From the prots made from lending money at interest the banker agrees to pay the legitimate depositors a xed sum of interest besides safe-guarding the deposits. Moreover the bank follows the followings as its mission: Maximize the prot within the shortest possible time Try the best level to satisfy customers Establish NCCBL as the best performing bank in the country. 2.5:Product and service: The Bank has wide range of product line to suit the need of the strata. In addition to convention product both Asset and liabilities sides the Bank oers special credit products for its customer. This areConsumer Financing Lease Financing Small loan Festival loan Housing loan Long-term & short term loan nancing Syndication Real Estate & Civil construction SME & Agro based. Loan and Advanced products * Commercial & Trade Financing * Long Term capital Financing * Retail & consumer Financing
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* Agricultural Financing * Import & Export Financing Deposit Products 1. Current A/C 2. Savings Bank Deposit A/C 3. Special Notice deposit A/C Term Deposit A/C Premium term Deposit A/C Instant Earnings Term Deposit Special Savings Scheme Money Double Program Money Triple Program Special Deposit Scheme RFCD Retail/Consumer Loan Products * Personal Loan * Car Loan Scheme * Education Loan * House Building Financing * Consumer Finance Scheme * House Reparing & Renovation Loan * Home Improvement Loan SME Banking * Small Business Loan * Lease Finance * Lease Finance * Working Capital Loan * Festival Business Loan * Festival Personal Loan Cards * Credit Cards * Debit cards * mBridge cards Remittance product Wage Earners Welfare Deposit Pension Scheme * Overseas Employment Loan Scheme * Special Interest rate on Deposit and Loan Chapter -3 General Banking
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3.1:General Banking: Financial institution intermediary that mediates or stands between ultimate borrowers and ultimate lenders is knows as banking nancial institution. Banks perform this function in two ways- taking deposits from SURPLUS UNIT i.e. from various areas in dierent forms and lending that accumulated amount of money to the DEFICIT UNIT i.e. to potential investors in other dierent forms. General banking department aids in taking deposits and simultaneously provides some ancillaries services. General banking is the starting point of all the banking operations. General banking is the front-side banking service department. It provides those customers who come frequently and those customers who come one time in banking for enjoying ancillary services. In some general banking activities, there is no relation between banker and customers who will take only one service from bank. Everyday it receives deposits from the customers and meet s their demand for cash by honoring cheques. It opens new accounts, remit funds, issues bank drafts and pay orders etc. Since bank is conned to provide the services everyday, general banking is also known as retail banking. On the other hand, there are some customers with who bank are doing its business frequently. 3.2 :Functions of General Banking: General banking creates a vital link between customers and bank. It is really a crucial department for the progression of the bank. It is the introductory department of the bank to its customers. Every commercial bank has all the required sections of general banking. Everyday it receives deposits from customers and meets their demands for cash by honoring instruments. General banking department is that department which is mostly exposed to the maximum number of the bank customer. Every commercial bank has general banking segment, which is involved day-to-day banking services to its customers. General banking is considered as the most important and core banking section for any commercial banks. The most common general baking sections can be listed as follows. Functions of General Banking * Account Opening Section: A Person is treated as a customer when he or she opens an account on that bank. Then it becomes a contractual banker customer relationship. The account opening section of any commercial bank is a very important section because; the more customers open bank account the more customers base creates. This section takes care of all the relevant duties related to the opening of an account. There are dierent types of account facilities provided by a commercial bank. For example, Saving Account, Current Account, Fixed Deposit Receipt, Short Term Deposit Account, Cash Credit Account
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* Cash Section: Cash section demonstrates liquidity strength of a bank. It is also sensitive as it deals with liquid money. Maximum concentration is given while working on this section. As far safety is concerned special precaution is also taken. Tense situation prevails if there is any imbalance in the cash account. The responsibility of the ocer of the section is too much high. Cash section ensures depositors cash requirements through honoring cheques and other kinds of liquid demand against their deposits. * Remittance Section: Remittance means transfer of money from one place to another In commercial banks, it has been done in the form of demand draft, telegraphic transfer, pay order as well as saving certicates. * Deposit Section: Deposit section of a commercial bank plays a key role in collecting deposits from the dierent kinds of customers for example, individual customers as well as institutional customers who have surplus funds and they are willing to keep their surplus funds as deposits to various commercial banks. Deposits may have various forms such deposit pension scheme, xed deposit, xed deposit receipt and special deposit scheme and other kinds of savings plans. * Collection and Clearing Section: Collection and clearing section involves many kinds of collection and clearing tasks. Customers pay and receives bill from their counter party because of business transactions occurring in the business. Commercial banks collect the bills and cheques on behalf of their customers. Collection mechanisms in a bank is called clearing function and collection function includes collection of various foreign drafts and documents on behalf of its customers and credited those drafts amount in the name of respective account holders of a banks customers through collection and clearing process. * Value Added Services: commercial banks also provide some kinds of value adding services to their customer to keep them loyal to their banks and these value-adding services may be as follows: * Online Money Transfer: Because of online banking everywhere in the world, the customers of any commercial bank can easily transfer their money from one branch to another. No hassle is there. Anyone can deposit money from any branch of the bank to any account. Similarly, an account holder can withdraw money from any branch. * Account Balance Inquiry: commercial bank sends account statement to its clients two times in a year. More over clients are provided whenever he or she wants to know account balance. Hence, some security and privacy is maintained. No other person than the account holder is given access to know the account balance. 3.3: Deposit Mobilization General banking department is the heart of all banking activities, especially to mobilize the deposits. All other departments are linked with this department. It plays a vital role in deposit mobilization of the branch. National Bank Limited
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provides dierent types of Accounts, locker facilities, special types of saving scheme and exibilities of remittance under general banking. This department performs the general function of banking. In National Bank Ltd. For performing the operation of this department a good number of people are allotted for the purpose of Deposit Mobilization. The general banking department of National Bank (Foreign Exchange Branch) consists of the following section: 1. 2. 3. 4. 5. 6. 7. Dispatch section Accounts opening section Cash Management section Remittance section Deposit section Clearing section Credit Card section
3.1.1. Dispatch section Dispatch division operates the function of dispatching the intimation letter to the client, IBCA, IBDA, and OBC to the other banks for internal transaction with bank. The ocer engaged in the dispatch division maintains two types of register books to entries for record of these documents particulars. These two types of register books are: 1. Inward mail registers. 2. Outward mail registers. 3.1.2. Accounts opening section 3.4 :Opening Dierent Types of Accounts Account opening is the very rst and preliminary job for a bank. As NCCBL does not make any business contract unless having an account on their bank, so account opening is the most important work of the general banking division. (I)Current Deposit (CD) Account (A/C): Any businessman, rm, limited companies, local bodies, corporate bodies, etc. can open a current A/C with NCCBL. Current deposit is 100% demand deposit and account holder can deposit/withdraw his/her deposits frequently without any limit. Requirements for openining CD A/C: Requirements may vary from types of the organization, such as: Individual Personal ID Copy of a Passport or ward commissioner certicate
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Any introducer of that respective bank Fill up Know Your Customer (KYC) form. Joint Owner Trade license Proprietors ID Any introducer of that respective bank Fill up Know Your Customer (KYC m. Limited Company Memorandum of Articles (MOA) Association of Articles (AOA) Certicate of Incorporation. 3.5:Features of CD A/C: CD accounts have the following features: (1).Submitting Tk.5000 to open a current account. (2).It is understood that the balances at credit will not less than Tk.5000. A minimum charge Tk. 100 must be paid on all operative accounts. (3).Only the form of cheque book supplied by the bank should be used. Cheques materially altered will not be paid unless such alteration bears the signature of the drawer in full. (4).The account holders must give the same signature for withdraw money that deposited in the bank previously. (ii) Saving Bank Deposit (SB club, society, association house wife, student, non-protable organization, etc. can open a saving bank deposit account with NCCBL. Savings bank deposit is both time and demand deposit, of which 10% is demand and 90% is time deposit and the account holder can withdraw his/her deposits twice in a week up to a certain limit. * Requirements for opening SB A/C: Requirements may vary from types of the organization, such as ): Any individual person, local bodies Individual Personal ID Copy of a Passport or ward commissioner certicate Any introducer of that respective bank Nominees photograph
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Fill up Know Your Customer (KYC) form. Joint Owner Trade license Proprietors ID Any introducer of that respective bank Fill up Know Your Customer (KYC) form. Limited Company Memorandum of Articles (MOA) Association of Articles (AOA) Certicate of Incorporation Features of SB A/C: SB accounts have the following features: 1) Any matured but not unsound mind can open a savings account. 2) One account holder can transfer his or her account in the branch to another branch without any cost if he or she interested. 3) Minimum deposit Tk 2,000 to open an A/C 4) SB A/C oers 6% interest charges semi-annually to the depositors account. 5) One time at least within 6 months an A/C holder must transaction with the bank to continue the A/C. 6) Charges Tk.250 for close (iii) Fixed Deposit Account (FDR): Any individual person, businessman, rm, limited companies, local bodies, corporation, corporate bodies, etc. can open Fixed Deposit A/C with NCCBL. FDR is 100% time deposit and A/C holder can usually withdraw his/her deposits after maturity of the xed deposit. However, depositors of FDR can withdraw their deposits before maturity if they desire FDR is also known as time liabilities or term deposits. Higher rate of interest is given on this type of deposit. Fixed deposits generally constitute more than half of the total deposits with the bank.
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Requirements for openinR FDR: Minimum requirement Tk.50,000 to make a FDR Above Tk.5, 00,000 in case of FDR, a report regarding FDR must be sent to Bangladesh. Interests & other charjies: Time Interest Rate 1 month 8% p.a. 3 months 11.50%p.a. 6 months 11.75% p.a. 12 months 12%p.a. Government tax: Government will charge 1 0% income tax on the amount of income from interest. iv)Short Term deposit (STD): Any individual person, businessman, rm, limited companies, local bodies, corporation, corporate bodies, etc. can open a short term deposit account with NCCBL. STD is 100% time deposit and an account holder can withdraw his/her deposits with prior notice to the bank. For that reason STD is also called a Special Notice Deposit A/C. v) Special savings Scheme (SSS): Any individual person can open a special savings scheme deposit account with NCCBL for a tenure of 5/10 years with monthly deposit of Tk.500 and multiple of Tk.500 up to Tk.10000. SSS A/C is 100% term deposit and account holder can withdraw his/her deposits after maturity of SSS/A/C. (vi) Special deposit Scheme (SDS): Any individual person, businessman, rm, limited companies, local bodies, corporation, corporate bodies, etc. can open a SDS A/C with NCCBL. SSS is a term deposit with payment of interest is payable on monthly basis. An account holder can withdraw his/her deposits after maturity of SDS A/C. 3.6: Cash management section: Cash management section of any bank plays vital role in general banking department because it deals with the most liquid assets. The proper management of this section entails overall eectiveness of any bank. NBL has a very equipped cash section. This section is responsible for the following function: 1. Receipt of deposit. 2. Making payment to the customers.
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3. Management of vault of t1. Receipt of depositThis section receives deposit or funds from the customer and the collection procedure as follows: At rst the amount is counted and if ok then veried the purity of the note paid if there is he branch. any confusion of the teller. word over the deposit slip. At last the receiving ocer/ teller signed the deposit slip and by the sign of the authorized ocer the deposit of fund nished in favor of a customer. In case of received of clearing cheque, the cheque is scrutinized at rst whether the cheque is authenticated as per the NI Act. If satised then a crossing is marked so that this cheque never been enchased over the cash counter Then the amount is kept apparently deposited in the customers account and the cheque proceeds to the clearing house accordingly. 2. Making payment to th payment is made to the customer only against a valued authentic cheque. the teller has to follow the following steps in making such payment: Receiving the cheque from the customer. Examining the cheque. In case of examining the cheque, the teller is predated thensure about the folipwing questions: e customer:The(ii)Amount is written in word and in gure and both is valued same; (iii)Signature is installed and it is as it is the signature kept in the bank; (iv)There is sucient amount in the customers accounts for making payment. Finally the cash paid seal is marked over the cheque leaf for the collection of the cheque after making the payment to the customers. 3. Management of the vault: The cash section also manages the vault of the branch. The manager of cash section is the in charge of the necessary liquid money in the vault for the payment of the customer the date is to be The following two types of Remittance
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are performed by NCCBL. 3.7: Clearing Clearing is a system by which a bank can collect customers fund from one bank to another through clearing house. (A) Outward Clearing: When the branches of a bank receive cheque form its customers drawn on the other banks within the local clearing zone for collection through Clearing House, it is Outward Clearing. (B) Inward Clearing: When the branches of a bank receive cheque drawn on them from other banks in the Clearing House, it is Inward Clearing. 3.1.6.2 Clearing House: Clearing House is a place where the representatives of dierent banks get together to receive and deliver cheque with another banks. 3.1.6.2.1. Types of c1earin~ house There are two type of clearing house: Those are A) Normal clearing house B) Same day clearing house (A) Normal clearing house: 1) 1st house: 1st house normally stands at 10 am to 11 am 2) 2~K~ house: 2nd house normally stands after 3 p.m. and it is known as return house. (B) Same day clearing house: 1) 19iouse: 1st house normally stands at 11 am. to 12 p.m 2) 2~ house: 2 house normally after 2 p.m. and it is known as return 3.1.6.3. Return house Return House means 2nd house where the representatives of the Bank meet after 3 p.m. to receive and deliver dishonored cheque, which place in the 1 g Clearing House. Cheque may be dishonored for any one of the following reasons: 1) Insucient fund. 2) Amount in gure and word diers.
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3) Cheque out of date/ post- dated. 4) Payment stopped by the drawer. 5) Payees endorsement irregular/illegible / required. 6) Drawers signature dier / required. 7) Crossed cheque to be presented through a bank. 8) Other specic reasons not mentioned 3.8: Bills Collection In modern banking the mechanism has become complex as far as smooth transaction and safety is concerned. Customer does pay and receive bill from their counterpart as a result of transaction. Commercial banks duty is to collect bills on behalf of their customer. Types of Bills for Collection of Clearing a) Outward Bills for Collection (OBC) b) Inward Bills for Collection (lBC) (a) What is OBC? OBC means Outward Bills for Collection. OBC exists with dierent branches of dierent banks outside the local clearinghouse. Normally two types of OBC: 1) OBC with dierent branches of other banks 2) OBC with dierent branches of the same bank Procedure of OBC: 1) Entry in the OBC register. 2) Put OBC number in the cheque. 3) Crossing seal on the left corner of the cheque & payees account will be credited on realization seal on the back of the cheque with signature of the concerned ocer. 4) Dispatch the OBC cheque with forwarding.
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(b) Inward bills for collection (IBC) When the banks collect bills as an agent of the collecting branch, the system is known as IBC. In this case the bank will work as an agent of the collection bank. The branch receives a forwarding letter and the bill. Procedure of IBC: 1) IBC against OBC: To receive the OBC cheque rst we have to give entry in the IBC Register. The IBC number should put on the forwarding of the OBC with date. 2) Deposit of OBC amount: OBC cheque amount is put into the sundry deposit sundry Creditors account, prepare debit & credit vouch of it. If the OBC cheque is honored, send credit advice (IBCA) with signature & advice number of the concern branch for the OBC amount. 3) If the OBC cheque is dishonored, the concerned branch is informed about it.Again place in the clearing house or send the OBC cheque with Return Memo to the issuing branch according to their information. Others Activities 3.2. Credit Card Section 3.2.1. About Credit Card? It is a card (usually plastic) that assures a seller that the person using it has a satisfactory credit rating and that the issuer will see to it that the seller receives payment for the merchandise delivered. Types of Credit Card National Bank Limited oers mainly two type of credit card according to the geographical area. These are Local credit card and International credit card. According to the level of income the local and international credit cards are divided into two categories viz. Gold card and Silver card. These types of credit cards are described below: (a)Local credit card: Local credit card is valid only in Bangladesh. Out side Bangladesh, the card is invalid. Local card are two types. They are Gold local card and Silver local card. The card limit of gold local card is Tk.50000 to Tk. 100000 and silver local card is below Tk.5
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(b) International Credit Card: International credit card is valid mainly outside Bangladesh. But for the payment of roaming facilities for Grameen phone, cardholders can use international credit card in Bangladesh. International credit cards are of two types. These are gold international credit card and silver international credit card. The card limit of gold international credit card is $2000 to $4000 and silver international credit card below $2000. 3.2.2 Yearly Charges on credit card National Bank Limited receive card fee for new card and renew card from the cardholder. The rate of card fee for new card and renew card are the same. In case of new card the bank receives the card fee with the next months bill. The rate of card fee are given in below: Table: Yearly charges on credit card Type of card Card fee International Gold Card US$70.00 International Silver card US$ 35.00 Local Gold card Tk.2000.00 Local Silver Card Tk.1200.00 Demand Draft By DD any person can send money from one branch to another branch of NCCBL. To send the money he/she must ll up the NCCBL s prescribed form of DD and paid charge/commission and receives are included in the DD block: Name of the sender branch Amount of money to be transferred Name of receiver branch 3.6: Telegraphic Transfer: To send money urgently NCCBL may be requested for TT on payment of a nominal charge and telegram charge. Any person urgently sends money from one branch to another branch within NCCBL through TT.
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When a message of TT sends through phone from one branch to another branch in that time the message received by the authorized ocer who has a right of power of attorney. After that, he/she lls up the TT form. Following things are included in the TT form: i). TT number ii). IT test number iii). Name and account number of the payee iv). Power of attorney number of the sender and receiver of TT. v). The amount to be transferred. vi) After ll up the TT form, he tests the test number of TT. If he ensures througli testing the test number then he credits the account of the payee. On the other hand, if the test number is not proved then he calls back to the sending branch of TT and request to send a new TT. d) Mail Transfer: Money can be sent through mail transfer to any body who has an account in any other branch of the same bank for this purpose the sender shall have to furnish the details like: The name of the beneciary and his account number The amount to be transferred The name of the branch where the account is maintained The deposits that are accepted by NBL like other banks may be classied in to,a) Demand Deposits b) Time Deposits 3.7: Demand deposits: These deposits are withdrawn able without notice, e.g. current deposits. National Bank Limited accepts demand deposits through the opening of, 3 a) Current account b) Savings account
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C) Call deposits from the fellow bankers time deposit. National Bank Limited accepts time deposits through Fixed Deposit Receipt (FDR), Short (b) Time deposits: A deposit which is payable at a xed date or after a period of notice is a Term Deposit (STD) and Beared Certicate Deposit (BCD) etc. While accepting these deposits, a contract is done between the bank and the customer. When the banker opens an account in the name of a customer, a contract arises between them. This contract will be valid one only when both the parties are competent to enter into contract. As account opening initiates the fundamental relationship & since the banker has to deal with dierent kinds of persons with dierent legal status, National Bank Limited ocials remain very much careful about the competency of the customers. Chapter -4 Foreign Exchange 4.1:Forigen Exchange: Foreign exchange consists of trading one type of currency for another. Unlike other nancial markets, the FX market has no physical location and no central exchange. It operates "over the counter" through a global network of banks, corporations and individuals trading one currency for another. The FX market is the world's largest nancial market, operating 24 hours a day with enormous amounts of money traded on a daily basis. Unlike any other nancial market, investors can respond to currency uctuations caused by economic, political and social events at the time they occur, without having to wait for exchanges to open. Access to modern news services, charting services, 24- hour dealing desks and sophisticated online electronic trading platforms has seen speculation in the FX market explode, particularly for the individual trader. The currency markets are not new. They've been around for as long as banks have been doing business. What is relatively new is the accessibility of these markets to the individual speculator, particularly the small- to medium-size 4.2 :A Short History of the Foreign Exchange Trading Market Foreign exchange markets originally developed to facilitate crossborder trade conducted in dierent currencies by governments, companies and individuals. While these markets primarily existed to provide for the international movement of money and capital, even the earliest markets had speculators. Today, an enormous proportion of FX market activity is being driven by speculation, arbitrage and professional dealing, in which currencies are traded like any other commodity. Traditionally, retail investors' only means of gaining access to the foreign exchange market was through banks that transacted in large amounts of currencies for commercial and investment purposes. Trading volume has increased rapidly over time, especially after exchange rates were allowed to
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oat freely in 1971. From 1944 until 1971, most of the world's major currencies were pegged to the US dollar under an arrangement called the Bretton Woods Agreement. Participating countries agreed to try and maintain the value of their currency with a narrow margin against the US dollar and a corresponding rate of gold, as needed. These countries were prohibited from devaluing their currencies to gain a foreign trade advantage. Consequently, the foreign exchange market was relatively static. 4.3: Foreign remittance: NCC Bank is the member of Money Gram and SWIFT networks. Using the services of this global network, non-resident Bangladesh nationals can send money from abroad to their home country within a few minutes without any risk. 4.2: Types of Foreign remittance (i) Money Gram: Money Gram is represented in over 115 countries and is available at more than 25,000 locations worldwide. In the USA alone Money Gram is available at inore than 15,000 locations. Sender completes a send form and gets a receipt. Money Gram Agent gives a Ref: No. Which has to be passed to the receiver? NCC Bank makes an enquiry on the Money Gram computer network to obtain authorization to pay recipient and recipient receives the fund. uMoney Gram is one of the fastest ways to transfer money. Customers using Money uGram can send or receive money usually within 10 minutes from any world. To get the money the recipient need not to have a bank account with NCC Bank Ltd. NCCBL does not levy extra charge. It gives better exchange rate to the recipient. (ii) Placid Express In March 2002, the bank has entered a Taka drawing arrangement with Placid Express, for home remittances of Bangladeshi expatriates in the United States. (iii) X-press money: The X press Money Services would like to welcome NCCBL to their network. X press Money (XM) is a web-based person-to-person money transfer system that allows an individual to send/receive money through any of our network agents instantly. All transactions are done through secure servers using 128-bit encryption technology so as to provide maximum security (iv)Al Fardan: Al Fardan Exchange, the pioneer in money exchange and worldwide remittance services in the U.A.E., established in 1971, is a trusted name for millions of residents and expatriates. A modern exchange house with
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advanced infrastructure and Courteous sta, has an extensive network of correspondent banks all over the world to facilitate faster, completely reliable transactions. (v) Habib express: Habib express is another important medium through which wage earner remittance is accepted by NCC Bank. Here head oce at rst enter in system server and received necessary information about the amount of remittance, beneciary who will receive the amount and any reference number which work as security for Bank as well as beneciary. Head oce gives information through fax to it respective branch from ~where receiver will receive money. (vi) Dhaka Janata: Dhaka Janata are introduces to provide remittance fucilities to emigrant and other people of Bangladeshi who work as contractual basis in the Italy. Here Dhaka Janata also maintain same procedure of getting information from system server including the name, referance number, amount, Phone number etc.Here head oce sends information through fax to all respective branch. All receivers when come to bank,respectivebranch check his information with information received from head oce. In NCCBL, the Foreign Exchange Department has two sections Import section Export section 4.3:Import Section: Import of merchandise involves two things: bringing of goods physically into the country and remittance of foreign exchange towards the cost of the merchandise and services connected with its dispatch to the importer. Import Procedure Procedure for obtaining IRC (Import Registration Certicate) Submission ofLCA (Letter of Credit Authorization) Form: LCA forms distribution: OpeningLC: Examination of import documents
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Documents sent to the foreign exporter Payments against documents of release order from the bank Post Import Finance: LTR (Letter of Trust Receipt): Letter of Trust Receipt occurs when an importer lls up the LTR form and applies for it LTR is permissible only if the importer is a reputed, trust worthy and having done business with the particular bank for a long time. LTR creates an option for the importer to pay due by future installment. Loan against Imported Merchandise (LIM): Loan facility up to a satisfactory limit to the traders customers by the bank against security of the value of the given only to the selective customers who have been doing business with the bank for a long time. Payment against Documents (PAD): After receiving the documents sent by the foreign exporter which include bill of exchange, shipping documents etc. the importer pays the dues against the documents received by the bank and latter on releases the merchandises from the port. So, after due payments, which include commissions, product price, charges for SWIFT, and miscellaneous, the party is eligible to take the release documents from the bank on this payment is called PAD. 4.4:Export Section: The import and export trade of Bangladesh is controlled under the Import and Exp by the Chief Controller of Imports and Exports shall indent, import or export any goods into or out of Bangladesh except in cases of exemption issued by the government.. The registration number should be quoted on the relative export forms. There are a number of formalities, which an exporter has to fulll before and after shipments of goods. These formalities or procedures are enumerated as follows: ort Control Act, 1950. No person who has been granted registration The Registration of Exporters ~ Preparations of the Export Documents > Dispatch of Goods > Send Shipping Advice )~ Negotiation of Documents
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~ Realization of Export Proceeds ~ Get the name of the Importer/Buyer: > Price/Quotations: )~ Communicate the Acceptance: ~ Obtain Export Code Number: Keep the goods ready for dispatch: Inspection of Goods Getting Shipping Space Get in touch with the Port Authorities Are required to be forwarded to the opening banker along with the bill, the credit is called a documentary credit. 4.5: Function of Foreign Exchange: The Bank actions as a media for the system of foreign exchange policy. For this reason, the employee who is related of the bank to foreign exchange, specially foreign business should have knowledge of these following functions i) Rate of exchange. ii) How the rate of exchange works. iii) Forward and spot rate. iv) Methods of quoting exchange rate. v) Premium and discount. vi) Risk of exchange rate. vii) Causes of exchange rate. viii) Exchange control. ix) Convertibility. x) Intervention money.
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xi) Foreign exchange transaction. xii) Foreign exchange trading. xiii) Export and import letter of credit. xiv) Non-commercial letter of trade. xv) Financing of foreign trade.xvii) Nature and function of foreign exchange market. xviii) Rules and Regulation used in foreign trade. xix) Exchange Airtime About of LIC On behalf of the importer if the bank undertakes to make payment to the foreign bank is known as documentary credit or letter of credit. The letter of credit is issued against payment of amount by the importer or against satisfactory security.. Application for Opening LIC: At rst, an importer will request banker to open L/C along with the following documents: 2. Indent or Proforma Invoice 3. Import Registration Certicate (IRC) 4. Taxpayer Identication Number (TIN) 5. Insurance cover note with money receipt 6. A bank account. 7. Membership of chamber of commerce 5.3.2. L/C Application: NCCBL provides a painted form for opening of L/C to the importer.The importer gives the following information is that form: Full name & address of importer. Date & place of expiry of the credit. The mode of transmission of document (courier/mail/telex) Whether the conrmation of the credit is requested by the beneciary or not.
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Whether the partial shipment is allowed or not. The type of loading (loading on boarding). Brief description of the goods to be imported. Availability of the credit by sight payment acceptance /deferred payment. Within she specic time duration *the document should be presented. Sales terms (FOB/CIF/C & F). Account number. L/C amount. Shipping mark. H.S. code number of the goods to be imported. IRC number. LCA number Insurance cover note. Country of origin. The above information is given along with the following documents: Proforma Invoice, which gives description of the goods including quantity, Unit price. Four set of IMP form. uThe insurance cover note, issuing company & the insurance number. Importers Application for L/C Limit/Margin: To have an import L/C limit, an importer submits an application to NCCBL. In that application he/she gives full detail of the following: Full particulars bank accounts. Nature of business.
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Required amount of limit. Payments terms & condition Goodstobe imported Oered security Repayments schedule 4.6: LC Margin: LC margin is the amount of down payment or deposit to open the LC. This is a sort of security for the LC purpose. Usually the margin varies from importer to importer. Generally a regular importer enjoys a lower margin facility from 10%-20% and for a new customer of the bank the margin may be 80%-100%. Charges: Handling charge per document Tk.1000 Accepted Commission: Duration Commission 90 Days (Pt Quarter) 0.60% 120 Days (2d Quarter) 0.90% 180 Days (3Tc~ Quarter) 1.20% Postage charge- Tk.200 Stamp charge-Tk. 150 SWIFT charge-Tk.3 500 per document 5.3.5. Transmission of L/C: The ways of transmission of L/C are as follows i) Through SWIFT ii) Through Telex iii) Through DHL or FEDEX iv) Through Emergency Mail Service (EMS Back to Back or Countervailing Credit: The beneciary of a documentary credit may, for the purpose of fullling his obligation under the credit, open a counter credit in favour of another party to ship the goods of his purchaser (importer). This is known as Back to back credit
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and is issued conditional terms except prices and invoices. The dierence in the prices goes to the benet of the original beneciary. SWIFT: NCC Bank is a member of society for inters bank nancial telecommunication. Worldwide. It ensures secure messaging having a global reach of 6495 Banks and Financial Institutions in 178 countries, 24 hours a day. SWIFT global network carries an average 4 million message daily and estimated average value of payment messages is USD 2 trillion. SWIFT is highly secured messaging network enables Banks to send and receive fund transfer, L/C related and other free format messages to and from any bank active in he network. Having SWIFT facility, Bank will be able to serve its customers more protable by providing L/C, payment and other messages. 5.6. Form of Letter Of Credit A letter of credit (L/C) may be two forms. These as below: i) Revocable letter of credit. ii) Irrevocable letter of credit. (i) Revocable L/C: If any letter of credit can be amendment or change of any clause or canceled by consent of the exporter and importer is known as revocable letter of credit. A revocable letter of credit can be amended or canceled by the issuing bank at any time without prior notice to the beneciary. It does not constitute a legally binding undertaking by the bank to make payment. Revocation is possible only until the documents have been honored by the issuing bank or its correspondent. Thus a revocable credit does not usually provide adequate security for the beneciary. (ii) Irrevocable L/C: If any letter of credit can not be changed or amendment without the consent of the importer and exporter is known as irrevocable letter of credit. Irrevocable credit constitutions a rm undertaking by the issuing bank to make payment. It therefore, gives the beneciary a high degree of assurance that he will paid tohis goods or services provide he complies with terms of the credit. Parties to a Letter Of Credit: A letter of credit is issued by a bank at the request of an importer in favor of an exporter from whom he has contracted to purchases some commodity or commodities. The importer, the exporter and the issuing bank are parties to the letter of credit. There are however, one or more than one banks that are involved in various capacities and at various stages to play an important role in the total operation of the credit. a) The opening Bank. b) The Advising Bank.
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c) The Buyer and the Beneciary. d) The paying Bank. e) The negotiating Bank. f) The conrming Bank. (a) The opening Bank: The opening Bank is one that issues the letter Of credit at the request of the buyer. By issuing a letter of credit it takes upon itself the liability to pay the bills drawn under the credit. If the drafts are negotiated by another bank, the opening Bank reimburses that Bank. As soon as the opening Bank, issuing a letter of credit (L/C), it express its undertaking to pay the bill or bills as and when they are drawn by the beneciary under the credit. When the bills are presented to or when antic is received that bills have been presented to a paying or negotiating Banks its liability matures. (b) The Advising Bank: The letter is sent to the bank by mail or telex and forwarded by it to the exporter. The bank providing this service is known as the advising bank. The advising bank undertakes the responsibility of prompt advice of credit to the beneciary and has to be careful in communicating all its details. (c) The Buyer and the Beneciary: The importer at whose request a letter of credit is issued is known as the buyer. On the strength of the contract that he makes with the exporter for the purchase of some goods that the letter of credit is opened by the opening bank. The exporter in whose favor the credit is opened and to whom the letter of credit is addressed is known as the beneciary. d) The paying Bank: The paying bank only pays the drafts drawn under the credit but under takes no opening bank, by debating the latters accounts with it if there is such an account or by any other measured up, between the two bankers. e) Negotiating bank: The negotiating bank has to be careful in scrutinize that the drafts and the documents attached there to be in conformity with the condition laid down in the L/C. Any discrepancy may result in refused on the part of the opening bank to honor the instruments is such an eventuality the negotiating bank has to look back to the beneciary for refund of the amounts paid to him. The Conrming Bank: Sometimes an exporter stipulates that a L/C issued in his favor be conrm by a bank in his own country. The opening this country to add its conrming to the credit the bank conrming the credit is known as the conrmin~ bank and the credit is known as conrmed credit.
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Documentary Letter Of Credit (Import/Export Documentation): Documentary letter of credit is such kinds of commercial letter which a bank issue on behalf of foreign seller (exporter) according to the direction of the (importers) purchasers. The documents shown under are known as export documents form the importers side. These are: (i) Bill of exchange: The bill of exchange is that particular instrument through which payment is eected in trade deals internal and international. (ii) Bill of lading: A bill lading is a document of title to goods entitling the holder to receive the goods as beneciary or endorsee and it is with the help of this document on receipt from the exporter that the importer takes possession of the goods . from the carrying vessel at the port of destination. (iii) Airway bill I Railway receipt: When goods to be transported are small in bulk or requiring speedy delivery or those are perishable in nature on the deal is in between the neighboring countries then mode of transports other than shipping may be resorted to far the carriage of the goods Airways bill / Railway receipt take place of Bill ~of lading depending on the nature of the carrier. (iv) Proforma invoice: It is the sellers bill for the merchandise. It contains a description of goods, the price per unit at a particular location, total value of the goods, packing specications, terms of sale, letter of credit, bill of lading number etc. There is no standard form far a commercial invoice. Each exporter designs his own commercial invoice form. The invoice is made out by the seller under his signature in the name of the buyer and must be submitted in a set of at least 3 copies. Its main purpose is to check whether the appropriate goods have been shipped and also that their unit price, total value, marking on the package etc. are consistent with those given in other documents. (v) Insurance policy: In the international trade insurance policy is a must to cover the risk of loss on consignments while they are on seas, roads, airways. The insurance is the responsibility of the buyers (consignee) under FAS, FOB and C&F contracts and of the seller (consignor) under CIF contract. The policy must be of the type as specied in the relative contract / credit. The policy would be for the value of CIF price plus 10 (ten) percent to cover the expenses and that is required to be obtained in the same currency as that of the credit and dated not later than the date of shipment with claims* being payable at the destination. It must be properly stamped. (vi) Certicate of origin: This is a certicate issued by a recognized authority in exporting country certifying the country of origin of the goods. It is usually by the
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Chambers of commerce. Some times, it is certied by local consul or Trade Representative of the importing country as per terms of the credit. vi)Packing list: The exporter must prepare an accurate packing list showing item by item, the contents of the consignment to enable the receiver of the shipment to check thecontents of the goods, number and marks of the package, quality, per package net weight, gross weight measurement etc. (viii) Weightment and Measurement: Issued by recognized authority (like chambers of commerce and industry) in exporting country certifying correct weightment and measurement of the goods exported. (ix) Bill of entry: A bill of entry is a document which contains the particulars of the imported goods as well as the amount of customs duty payable.The negotiating bank after received the above documents / papers then this bank scrutiny the documents. The negotiating bank sends the original shipping documents to the L/C opening bank and keeping the second copy with the negotiating bank Payment against Documents (PAD) Banks deal in documents and not in goods. If the shipping document against the L/C is in order then the L/C opening bank must have to payment to the foreign bank within 3 days according as Uniform Customs and Practice for Documentary Credit (UCPDC) 500 of revision of ICC. If the shipping documents have any discrepancy, then the L/C opening bank informed to the negotiating bank within 7 days. Otherwise, the shipping documents have not discrepancy. If the importer have not adequate founds in the bank account then the bank payment to the foreign bank against the shipping documents Payment Procedure of Import Documents: Payment procedures of NCCBL involve the following tasks: (a) Date of Payment: Usually payment is made within seven days after the documents documents have been received. If the payment is deferred, the negotiating bank may claim interest for making delay. (b): Preparing Sale Memo: As sale memo is made at B.C. rate to the customer. As the T.T & 0. D rate is paid to the ID, the dierence between these two rates is known as Exchange Trading. Then an Inter Branch Exchange Trading Credit advice is sent to Inter ID. Requisition for the foreign currency For arranging necessary fund for payment, a requisition is sent to the ID.
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Transmission of telex: A telex is transmitted to the correspondent bank ensuring that payment is being made. Chapter -5 Swot Analysis
SWOT Analysis: .The SWOT analysis is a valuable step in your situational analysis. Assessing your rms strengths, weaknesses, market opportunities, and threats through a SWOT analysis is a very simple process that can oer powerful insight into the potential and critical issues aecting a venture The SWOT analysis begins by conducting an inventory of internal strengths and weaknesses in your organization. You will then note the external opportunities and threats that may aect the organization, based on your market and the overall environment. Dont be concerned about elaborating on these topics at this stage; bullet points may be the best way to begin. Capture the factors you believe are relevant in each of the four areas. The primary purpose of the SWOT analysis is to identify and assign each SWOT Analysis: .The SWOT analysis is a valuable step in your situational analysis. Assessing your rms strengths, weaknesses, market opportunities, and threats through a SWOT analysis is a very simple process that can oer powerful insight into the potential and critical issues aecting a venture The SWOT analysis begins by conducting an inventory of internal strengths and weaknesses in your organization. You will then note the external opportunities and threats that may aect the organization, based on your market and the overall environment. Dont be concerned about elaborating on these topics at this stage; bullet points may be the best way to begin. Capture the factors you believe are relevant in each of the four areas. The primary purpose of the SWOT analysis is to identify and assign each signicant factor, positive and negative, to one of the four categories,.
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NCC Bank-A New Look

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