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Chapter 2
Profile Of Nbl
PROFILE OF NBL
Treasury Division
Credit Division
Operation Division
Card Division
General banking
Credit department
Foreign exchange department
General Banking
Foreign Exchange Department
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Chapter 3
General Banking is the heart of banking activities. Total banking activities start with this
department. By banking we mean, collecting money from the surplus unit and deploy it to the
deficit unit. General Banking is the department where this money is collected. In my orientation,
at first I observed this department. General Banking specially deals with account opening, local
remittance, cash and clearing department. I would like to discuss the duties of these desks and
some important things related to these departments or sections.
If individual wants to open current and savings account then an introducers must be
needed who has current or savings account in the bank.
Individual must have a passport size photograph of his nominee signed by him.
Individual must have filled up the KYC form (Know Your Customer) for the full-fill of
requirement of Bangladesh Bank.
It may be CD A/c
Certificate of Incorporation
Certificate of Incorporation
Proprietor of the firm must fill up the Current Proprietorship A/c opening form
Demand deposits
Time Deposits.
Saving account
Period
a. 3 months & above
but less than 6
months
b. 6 months & above
but less than 1 year
c. 1 year & above
but less than 2year
d. 2 years & above
Below 10 crore
8.75%
Above10 crore
9%
8.75%
9%
8.75%
9%
8.50%
8.50%
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Short Term Deposit or STD Account Opening procedure is similar to that of the current account.
The rate of interest on this type of account is 5%. Withdrawals from this type of account require
a prior notice of seven days.
Monthly Benefit
Tk. 1050/Tk. 2100/Tk. 3150/Tk. 4200/-
Monthly
Installment
Tk. 500/Tk. 1,000/Tk. 2,000/Tk. 3,000/Tk. 4,000/Tk. 5,000/Tk. 10,000/Tk. 20,000/Tk. 30,000/-
Return after
3years
@ 10.42%
TK.21,050/TK. 42,100/TK.84,200/TK.1,26,300/TK.1,68,400/TK.2,10,500/TK.4,21,000/TK.8,42,000/TK.12,63,000/-
Return after
5 years
@ 10.94%
Tk. 39,500/Tk. 79,000/TK.1,58,000/TK.2,37,000/TK.3,16,000/TK.3,95,000/TK.7,90,000/TK.15,80,000/TK.23,70,000/-
Return after
8years
@ 11.21%
TK.76,000/TK.1,52,000/TK.3,04,000/TK.4,56,000/TK.6,08,000/TK.7,60,000/TK.15,20,000/TK.30,40,000/TK.45,60,000/-
Return after
10 years
@ 11.66%
Tk. 1,10,000/Tk. 2,20,000/TK.4,40,000/TK.6,60,000/TK.8,80,000/TK.11,00,000/TK.22,00,000/TK.44,00,000/TK.66,00,000/12
Tk. 50,000/-
TK.21,05,000/-
TK.39,50,000/-
TK.76,00,000/- TK.1,10,00,000/-
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Permission of manager
Data entry and provide account
number
Depositing primary money
Scanning the card containing
account holders sign and
photograph
Issuing the cheque book
Depositors statement
Review
Influence potential depositors
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10. At the close of business, the amounts entered in the Paying Cash Book are totaled. The
total is agreed with the amount paid.
11. The Officer in-charge of Cash Department checks the entries to ascertain that the
payment has been correctly made and realizes the instrument from the Payment.
12. The Officer-in-charge also checks and signs the book. After the cash is checked as
explained herein before the instruments are sent to the Accounts Department as the case
maybe.
13. Instruments returned and unpaid by the various departments are received by the Paying
Cash Officer attached with Memorandum duly entered in the Register.
14. The particulars of the instrument are compared with those in the Register and
Memorandum.
15. Entries in the print vouchers are initialed by the officer and the Register is returned to the
department concerned.
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7. If found in order, the Checking Officer signs the Cash Balance Book, Receiving Book
and Paying Book.
8. The Cash Position Memo is checked and counter signed by the Checking Officer.
9. In the presence of Checking officer and the Officer, who has counted the cash and signed
the book, the cash is kept in the safe.
10. The Cash Position Memo is sent to the Accounts Department. The signature of the
recipient is obtained on the duplicate copy of the Memo and filed in the "Cash Position
Memo File".
3.3 LOCAL REMITTANCE
Sending money from place to another place for the customers is another important service of
banks and this service is an important part of countries payment system. For this service, people
specially businessmen can transfer funds from one place to another very quickly. There are three
types of remitting money in NBL, mohakhali branch such as;
Pay Order gives the payee the right to claim payment from the issuing bank. It can be en-cashed
from issuing bank only. Unlike Cheque, there is no possibility of dishonoring pay order because
before issuing pay order bank takes out the money of the pay order in advance. Pay order cannot
be endorsed or crossed and so it is not negotiable instrument. Pay order issued if the clients need
to transfer the amount within the city where the bank located. For example if any one want to
pay tax through pay order in Dhaka zone then they can apply for pay order in any branch in
Dhaka city. In order to issue pay order the client can apply by cash payment or cheques payment.
There is no obligation to have an account with the issuing bank. In that case clients need to pay
commission and vat to issue pay order. If any account holders authorize any bearer to purchase a
pay order of TK.1 to TK.500000 then they need to pay commission and vat (Tk. 50 + Tk. 8).
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Demand draft is an order of issuing bank in another branch of the same bank to pay specified
sum of money to the payee on demand. It is generally issued when customer wants to remit
money in any place which is outside of the clearinghouse area of issuing branch payee can be
purchaser himself or another. Bearing money may be risky. It is a negotiable instrument and it
can be crossed or not. For payment of DD, paying branch first has to be confirmed that the DD is
not forged one. First bank Check the Test Code mentioned on the draft. If Test Code agrees
then believe that DD is not forged and makes payments. For further confirmation, the issuing
bank sends an advice about the DD to the paying branch. Without advice the paying branch
generally does not pay.
By this method money is transfer to another place by telegraphic message. The sender branch
will request another branch to pay required money to the required payee on demand. Generally
for such kind of transaction payees should have account with the paying bank. Otherwise it is
very difficult for the paying bank to recognize the exact payee. Test code is also furnished on the
TT message for the protection of it. When sending of money is urgent then the bank use
telephone for remittance.
In current time TT is not popular as before because of the advance service of On-line Banking.
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1. The instruments drawn on National Bank are received from other Banks in the Clearing
House by the representing branch of the Bank.
2. The amount and number of instruments received are entered in the House Book from the
main schedules of respective banks.
3. The amount of instruments delivered, received and difference is written in a slip provided
in the Clearing House and the Slip is returned.
4. All instruments are posted as debit entry into the account mention in cheques slip.
5. The instruments returned are posted separately.
6. Print all the voucher of posting.
7. Check the voucher and the instrument.
8. Return instrument sent to the respective branches.
9. The instrument contain amount more than Tk. 1,00,000/- need to be cancelled by the
Manager.
3.4.3 OUTWARD CLEARING
1. The instruments drawn on different bank are received from the clients.
2. The amount in figure and word and the payee name need to be checked.
3. If the issuing bank is in clearing zone then the officer posted it in NIKAS.
4. Then officer endorsed the instrument according to the payee name and initial it.
5. Then crossing and clearing stamp placed on the instrument.
6. After posting collect print out of different banks total separately.
7. Check the print copy and the instrument.
8. Then prepare Inter Bank Debit Advise and authorized it by different officer.
9. Finally all instruments are sent to the issuing bank through clearing house.
10. Rearrange all the credit blucher according to the account types and hold it for credit
posting in next day.
11. At last Print out of validation of the day is file up.
3.4.4 INWARD TRANSFER DELIVERY
For payment of Bills presented to a particular branch of the Bank through another branch of the
Bank, the procedures are the same as those applicable to Inward Clearing.
Account Closed.
Insufficient funds / not arranged for.
Payment stopped.
Refer to drawer
Drawn against uncollected funds. May be presented again.
Amount in words and figure differ.
Drawers signature differs.
Alternation requires drawers full signature.
Mutilation required drawers confirmation.
Cheque postdated /out of date.
Date incomplete/ missing.
Payees endorsement required / irregular.
Payees endorsement requires bank confirmation.
Clearing house stamp missing.
Not drawn on us.
Import
Export
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Foreign Remittance
4.2 IMPORT:
This section perform the major function of import procedure in favor of its clients and provide
import financing through guarantee, LIM, PAD, LTR etc.
Trade license,
IRC,
Membership Certificate,
Bond License,
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b) Beneficiary:
The beneficiary is normally the seller of the goods who receives payment under documentary
credit if he has complied with terms and conditions.
Bankers:
Parties to documentary credit may be an issuing bank, an advising bank, a confirming bank, a
reimbursing bank or a nominated bank.
a) Issuing bank: The issuing bank or the opening bank is one, which issues the credit.
b) Advising Bank: The Advising Bank advises the credit to the beneficiary thereby
authenticating the genuineness of the credit. It is normally situated in the country/place of the
beneficiary.
c) Confirming Bank: A Confirming Bank is one which adds its guarantee to the credit opened
by another bank, thereby undertaking the responsibility of payment/negotiation/acceptance under
the credit in addition to that of the Issuing Bank.
d) Nominated Bank: A Nominated Bank is that bank nominated by the issuing bank to pay, to
incur a deferred payment liability, to accept drafts or to negotiate credit.
e) Reimbursing Bank: A Reimbursing Bank is the bank authorized to honor reimbursement
claims in settlement of negotiation/acceptance/payment logged with it by the
negotiating/accepting/paying Bank.
Revocable D. credit
Irrevocable D. credit
Standby credit
Red clause
Transferable credit
Credit options
For engaging in international trade, even trader must be first registered with the chef
controller of import and export.
By paying specified registration fees to the VVI &E the trader will get IRC/ERC
(import/Export registration certificate).To open L/C with bank this IRC is must.
Goods to be imported
Officered security
Repayment schedule
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4. pro-forma invoice
Collects credit report of exporter from exporters country through his foreign
correspondence there.
Opening bank then issues credit by air mail / TELEX / SWIFT followed by L/C advice as
asked by the opener through his foreign correspondent or branch as the case may be at the
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place of beneficiary. The advising bank advises the L/C to the beneficiary of his own
form where it is addressed to him or merely hand over the original L/C to the beneficiary
if it is so addressed.
6. Packing List
7.Advice Details of shipment
8. Pre-shipment inspection certificate
9. Vessel Particular
10. shipment certificate
Step- 7 Lodgment of documents by the opening bank from the negotiating bank:
After receiving the documents, the opening banker scrutinizes the documents. If any discrepancy
found, it informs the importer. If importer accepts the fault, then opening bankers call importer
retiring the document. At this time many thing can happen. These are indicated in the following:
Discrepancy found and importer not agreed to accept in this case, importer protest
and send back all the documents to the exporter and request his to make in the specified
manner. Here banker is not bound to pay because the documents send by exporter is not
in accordance with the terms of L/C.
Documents are OK but importer is willing to retire the documents in this case bank
is obligated to pay the price of exported goods. Since importer did not pay for bill of
exchange, this payment by bank is one kind of credit to the importer and this credit in
banking is known as PAD.
Everything is OK but importer fails to clear goods from the port and request bank
to clear- in this case banks clear the goods and takes delivery of the same by paying
customs duty and sales tax etc. So, this expenditure is debited to the importers account
and in banking it is called LIM.
Step- 8 Retirements
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The importer receives the intimation and gives necessary instruction to the bank for retirement of
the import bills or for the disposal of the shipping document to clear the imported goods from the
customs authority. The importer may instruct the bank to retire the documents by debiting his
account with the bank or may ask for LTR (loan against Trust Receipt).
* After opening of L/C some times alteration to the original terms and conditions become
necessary. These amendments involve changes in
1. Unit price
2. Extension of validity of the L/C
3. Documentary requirements etc.
Such amendments can be affected only if all the concerned parties agree i.e. the beneficiary, the
importer, the issuing bank and the advising bank.
For any amendment the importer must request the issuing bank in writing duly supported by
revised / Performa invoice. The issuing bank then advises the required amendment to the
advising bank. L/C amendment commission including postage is charged to the clients A/C.
Advance against a Trust receipt obtained from the customers are allowed to only first
class tested parties when the documents covering an import shipment or other goods
pledged to the bank as security are given without payment. However, for such advances
prior permission / sanction from Head Office must be obtained.
The customer holds the goods or their sale proceeds in trust for the bank, till such time,
the loan allowed against the Trust Receipts is fully paid off.
The trust receipt is a document that creates the bankers lien on the goods and practically
amounts to hypothecation of the proceeds of sale in discharge of the lien.
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also obtain a letter of undertaking and indemnity from the parties, before getting the goods
cleared though LIM account.
Date of payment
Usually payment is made within seven days after the documents have been received. If the
payment is become deferred, the negotiating bank may claim interest for making delay.
A sale memo is made at B.C rate to the customer. As the T.T &O.D rate is paid to the ID, the
difference between these two rates is exchange trading. Finally, an inter branch exchange trading
credit advice is sent to ID.
For arranging necessary fund for payment a requisition is sent to the international department.
Transmission of Message
Message is transmitted to the correspondent bank ensuring that payment is being made.
4.6 EXPORT:
Export is the process of selling goods and services to the other country. It has an immense
contribution to generating income for the bank.
Opening back-to-back L/C is a letter of credit backed by the original L/C or the mother L/C to
open a new L/C. The bank provides it to the exporter to import the raw material from overseas in
order to produce the exportable commodity for the importer. It encourages the exporter to
produce more exportable goods. In this case the bank offers some additional facilities i.e. about
120 days to pay back the money where in case of import. L/C is issued for 60 days.
a) Foreign Inward Remittance: The remittance in foreign currency, which is received from
outside the country to our country is known as Foreign Inward Remittance. The remittance can
be performed in two ways:
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Visible Outward Remittance-such as, payment against import, sale of travelers cheque
etc.
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CHAPTER 4
Recommendations
Recommendations:
From analysis and findings of the report and based on my everyday observation and perception, I
would like to give some recommendations about some facts that might help NBL management to
enhance its performance as well as success. Some recommendations that the bank may benefit
from are given below:
In the total banking system National Bank should implement modern banking process
instead of traditional system. It should be more computerized to facilitate of their
customers.
Database networking is one of the most recent technologies to transfer from branch to
branch. Therefore, NBL should use this technology in Foreign Exchange Division.
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National Bank should upgrade their online banking services. Then it will give its
customer huge flexibility in withdraw or deposit an amount of cash.
Every LC has limits on its total value, imposed on them according to the Bangladesh
Banks regulations, and based on the risk factors. However, the Bank still has the authority
to make some changes to the limit within a certain specified range. If National Bank
becomes more flexible, then it can open more LCs with higher values thus increasing
their profitability.
Payments for LCs could also make through pre-arranged credit facilities that the
customer may have with the Bank. Usually, the rates of interest on these credits are
excessively high which actually discourage the customers. Reducing interest on such
credit facilities would actually induce the clients to do more global trade thus increasing
the banks profit as well as the well being of the countrys Economy.
A customer is required to pay the bank a certain percentage of the total LC value in
advance before opening an LC, which is called LC margin. If National Bank reduces the
rate of margin then perhaps they can attract more customers.
National Bank will be able to attract more customers by reducing some charges of foreign
trade such as SWIFT charges (Charge for sending the LC electronically), Document
Handling Charges, Stamps Charges as well as VAT.
NBL should conduct smaller LC request coming from SMEs if they want to pay more
attention to increase their customers.
They should publish manual for their foreign exchange section. Consequently, the
officers of this section will be able to conduct their affairs easily without any discussion
with the Vice Principal. As a result, it will save their time. Wherever they face any
problem, they will follow the manual directly.
More importance should be given on import because it assesses most of the variation in
profit.
As per coefficient of variation, remittance is the most risky sector. So attempts should be
taken for lowering the riskiness.
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The Bank should increase its ATM booth in different locations and improve its facility
throughout the country.
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CHAPTER 5
C0nciusions
Conclusion
National Bank Ltd is one of the most potential banks in the banking sector. It has a large
portfolio with huge assets to meet up its liabilities and the management of this bank is equipped
with the expert bankers and managers in all level of management. So it is not an easy job to find
out the drawbacks of this bank. I would rather feel like producing my personal opinion about the
ongoing practices in Mohakhali Branch. The service provided by the young energetic officials of
the National Bank Limited is very satisfactory. As a commercial bank NBL has to follow the
rules of Bangladesh bank. During my internship in this branch I have found its general banking
section to be efficient but need to be more efficient; therefore this section plays a major role in
the overall profitability of the branch and to the Bank as a whole.
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No matter whatever the challenges are in the area of Foreign Trade, National Bank is fully
equipped to face any obstacle. Even if National Bank had a slightly poor performance regarding
the percentage of contribution to total import of the country in the last year, still it has the
expertise to be on the top of foreign exchange business in the coming years.
As the economy of Bangladesh is swelling and import and export are one of the major sectors
that play important role in the economy, National Bank Limited always have played its role in
making sure that things go smoothly. However, since sky is the limit, the bank is still evolving
every day striving to provide the importers and exporters with the best possible service. Import
and exports are showing positive trends within all of the foreign trades even after the global
challenges that we are facing today. That is why there is least chance that National Bank could
possibly fail in facilitating foreign trade in the future.
Moreover, during the course of my practical orientation I have learned the practical banking
activities to realize it with my theoretical knowledge, which I have greathearted from various
courses of my MBM program.
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CHAPTER 6
References
Reference
1.
2.
3.
4.
5.
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