3 # main report of nccbl

General Banking & Foreign exchange Dept. of NCCBL

CHAPTER-ONE

Introduction

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1.1 Background of the Report

In general sense we mean “Bank” as a financial institution that deals with money. But when we use

the term bank it generally means ‘commercial bank’ that collects the deposit from surplus unit of the

society and then lends the deposits to the deficit units of the society. The word ‘Bank’ was probably

derived from the word ‘Bench’s during ancient time Jews used to do money –lending business sitting

on long benched. First modern banking was introduced in 1668 in Stockholm as ‘savings bank’,

which opened up a new era of banking activities through out the European Mainland.

In the north Asia region, the afghan traders popularly known as Kabliwallas introduced early banking

system. Muslim businessmen from Kabul, Afghanistan came to India and started money lending

business in exchange of interest sometime in 1312A.D, they were known as ‘Kabuliwallas’.

Bank provide means and mechanism of transferring command over resources from those who have an

excess of income over expenditure to those who can make use of the same for adding to the volume of

productive capital. The bank provide them with the safety, liquidity, profitability by means of

different savings media offering varying degrees of a mix of liquidity, return and safety of savings.

The bank uses this savings in higher degrees of return and maximizes their profit in business.

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1.2 Objectives of the report

As a partial of the ‘Masters of Business Administration’ internship is a requirement at the end of the

completion of all the credit courses. The purpose of this study is to earn a real life practical experience

on banking system.

Broad Objective

The main purpose is to be familiar with the real world situation and practical experience in a business

firm. Commercial bank, especially private bank is one of the most important business sectors in

Bangladesh.

The Objectives of the study are as follows:

To present an overview of NCC Bank Ltd.

To present the principal activities of NCC Bank Ltd.

To appraise the performance of the Bank

To identify the problems

The report mainly conducted with the following objectives:

To observe how far the policies of Dhanmondi Branch, National Credit and

Commerce Bank Ltd. are contributing to its objective achievement.

National Credit and Commerce Bank Ltd. is a scheduled commercial bank in the

private sector, which is focused on the established and emerging markets of Bangladesh.

To study general banking practice and procedure of National Credit and Commerce

Bank Ltd.

To study foreign exchange practice and procedure of National Credit and Commerce

Bank Ltd.

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1.3 Methodology

We have used both Primary and Secondary methodology. These are as follows:

PrimaryPrimary

Observation

Practical work with NCCBL

Surveys

- Web surveys

- Interviews

SecondarySecondary

Prospectus 2008

Training Book (overall banking system), which provides Training Institute of

NCCBL.

Journal

Research brochures and various publications of national credit and commerce bank

Ltd.

Use of published annual report of 2005, 2006 of national credit and commerce bank

Ltd.

Official data, book and internet, Periodicals published by Bangladesh Bank.

Web site: www.nccbank-bd.com.

1.4 Limitations of the study

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http://www.nccbank-bd.com/


The study is based, no doubt, on the review of published works coupled with empirical investigation.

The following limitations are apparent in the report:

I. Lack of Sophisticated Knowledge: As a student in research field, we have no

experience in data collection, processing, analyzing interpreting and presenting.

II. Unavailability and inefficiency to interpret secondary data: From the secondary

sources we have not get available relevant data

III. Time Limitation: To complete the study, time was limited three months.

IV. Fears to disclosure: The administration was afraid to disclosure the organizational

information .It was also constraint for the study.

V. Lack of experience: I am not experienced enough to complete the study because I

am a person of new hand on such study.

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CHAPTER-TWO

An Overview of NCC Bank

2.1 Historical Background of NCC Bank Ltd.

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NAME NATIONAL CREDIT AND COMMERCE BANK LIMITED

Date of commencement of Business as full fledged Commercial Bank

MAY 17 1993

HISTORY This bank is a conversion of erstwhile National Credit Ltd (ncl), an investment company largest of its kind, which was established on 25 Nov 1985.

BRANCHES 53

EMPLOYEES 1210

MANAGEMENT Management is professional and experienced; headed by Mr. Nurul Amin. Mr. Amin is one of the senior bankers of the country having a long banking career. He started his banking career with state owned Janata Bank in the year 1977 as a Officer Gr- V and served there till March 1983. He then switched over to National Bank Limited, first Private sector Bank of the country, in March 1983. In 1985 he joined National Credit Limited, the ancestor of NCC Bank Limited, and still has been continuing since then. During his tenure with NCC Bank he served in different important capacities like in-charge of one of the largest branches of the bank, Head of Human Resources Division, Deputy Managing Director etc. In recognition of his contribution to the bank, the Board of Directors appointed him as Managing Director of the bank in February 2005.

MAIN SHARE HOLDERS Main share holders comprise leading industrialist and business magnets of the country. The board of directors consists of 13 members. Most of the directors are owners of large of business groups having high net worth.

MAIN CUSTOMERS Due to the predecessor company’s involvement investment financing sector of the country the bank inherited its top corporate customers. Moreover the bank is involved in import trade financing. Bulk importers of consumer durable, food grains industrial raw materials are its customers. The bank has financed in textile and apparels sectors. The bank has a trend of choosing customers from diversified groups. The bank has first class customers in the construction sectors involved in high rise building, heavy construction and roads and high way construction.

2.2 Business Philosophy of NCCBL

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2.2.1 Vision

To be in thee forefront of national development by providing all the customers inspirational strength,

dependable support and the most comprehensive range of business solutions, through our team of

professionals who work passionately to be outstanding in everything we do.

2.2.2 Mission

NCCBL shall be at the forefront of national economic development by:

Setting industry benchmarks of world class standard in delivering customer value through its

comprehensive product range, customer service and all our activities.

Building an exciting teem – based working environment that will attract , develop and retain

employees of exceptional ability who help celebrate the success of it’s business, customers

and national development.

Continuously improving productivity and profitability, and thereby enhancing shareholder

value.

2.2.3 Goals

To develop and consolidate a strong client base and ensure all kinds of modern banking facilities by

expanding business and service periphery to full fill the expectations of the shareholders as well as

customer .

Long Term Goal

NCCBL is ready to improve the highest quality customer through its new products and services such

as ATM, ONLINE BANKING & POINT OF SALES transaction.

Short Term Goal

The Major objective of NCCBL is to maximize profit through customer’s satisfactory.

2.3 Hierarchy of NCCBL

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2.4 Branches of NCCBL

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Principal Officer (PO)

Managing Director (MD)

Managing Director (MD)

Executive Vice President (EVP)

Executive Vice President (EVP)

Sr. Executive Vice President (SEVP)

Sr. Executive Vice President (SEVP)

Depute Managing Director (DMD)




Vice President (VP)Vice President (VP)

Sr. Asstt.Vice President (SAVP)

Sr. Asstt.Vice President (SAVP)

Asstt.Vice President (AVP)

Asstt.Vice President (AVP)

Sr. Principal Officer (SPO)

Sr. Principal Officer (SPO)



Officer (O)Officer (O)Officer Grad 1 (OG1)

Officer Grad 1 (OG1)

Junior Officer (JO)Junior Officer (JO)

Sr. Officer (SO)Sr. Officer (SO)

Asstt. Officer (General)

Asstt. Officer (Cash)

Assistant Managing Director (AMD)

Assistant Managing Director (AMD)

Sr. Vice President (SVP)

Sr. Vice President (SVP)


NCCBL Dhanmondi branch started its business on 28.12.1986. It serves all types of banking business

like general banking, foreign exchange, credit and advance, and loan facility. At present, there are 34

employees in Dhanmondi branch.

It is located at 744, Satmosjaid road, Dhanmondi R/A, Dhaka.

Other Branches of NCCBL in Bangladesh:

No of Branches 2006

Division Branch Name

DHAKA DIVISION Total Branch - 21

(BABUBAZAR BRANCH, BANGSHAL BRANCH, MITFORD BRANCH, MOGHBAZAR

BRANCH, MOTIJHEEL BRANCH, KAWRAN BAZAR BRANCH, DILKUSHA BRANCH,

DHANMONDI BRANCH, GULSHAN BRANCH, MALIBAGH BRANCH, JATRABARI

BRANCH, MIRPUR BRANCH, FOREIGN EXCHANGE BR, ISLAMPUR BRANCH,

UTTARA BRANCH, ELEPHANT ROAD BRANCH, NABABGONJ BRANCH ,

MADHABDI BRANCH, NAWABPUR ROAD BRANCH , MADARIPUR BRANCH ,

BANANI BRANCH)

CHITTAGONG DIVISION

Total Branch - 17

(JUBILEE ROAD BRANCH, AGRABAD BRANCH, COX’S BAZAR BRANCH,

HALISHAHAR BRANCH, KHATUNGONJ BRANCH, O R NIZAM ROAD BRANCH,

KADAMTALI BRANCH, FENI BRANCH, LAXMIPUR BRANCH, MAJIRGHAT

BRANCH, MADUNAGHAT BRANCH, AREA OFFICE, CTG, BARAIYARHAT

BRANCH , ANDERKILLA BRANCH, HAJIGONJ BRANCH , CHAKARIA BRANCH,

CHAUMUHANI BRANCH )

KHULNA DIVISION Total Branch – 2

(KHULNA BRANCH, JESSORE BRANCH)

RAJSHAHI DIVISION Total Branch – 5

(RANGPUR BRANCH, SYEDPUR BRANCH, PATGRAM BRANCH, RAJSHAHI

BRANCH, BOGRA BRANCH)

SYLHET DIVISION Total Branch – 5

(LALDIGHIRPAR BRANCH, CHOWHATTA BRANCH, MOULVIBAZAR BRANCH,

BARALEKHA BRANCH, JAGANNATHPUR BRANCH)

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2.5 Products of NCC Bank Ltd.

Bank is a service oriented industry and deals with various financial products and services for financial

gains. Financial products and services products that a bank offers to its customers are mainly

classified as under:

ProductsA. Deposit product a. Savings Deposit.

b. Current Deposit.

c. Short Term Deposit.

d. Fixed Deposit.

e. Special Savings Scheme (SSS).

f. Special Deposit Scheme (SDS)

B. Lending Product a. Continuous Loan Secured over Draft against financial

obligation. [SOD (FO)]

Secured Over Draft against work

order/real estate etc. [SOD(G)]

Cash credit (Hypothecation)

Cash credit (Pledge)

Export cash credit (ECC)

b. Demand Loan Loan general

Demand loan Against ship breaking

Payment Against Documents (PAD)

Loan Against Imported Merchandise (LIM)

Loan Against Trust Receipt (LTR)

Forced loan

Packing Credit

Secured over draft against cash incentive

Foreign Documentary Bills Purchased (FDBP)

Local Documentary Bills Purchased (LDBP/IDBP)

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Festival Business Loan

c. Term loan a. Project loan

b. Transport loan

c. House building loan

d. Small Business loan

e. Consumer finance scheme

f. Lease finance

g. Personal loan

C. Money transmission product a. Payment order/Security Deposit Receipt

(PO/SDR)

b.Demand Draft (DD)

c. Telegraphic Transfer (TT)

d. Outstation Bills for Collection (OBC)

e. Travelers Cheque.

D. International Business products I. Letter of Credit (L/C)

II. Back to Back Letter of Credit (BTB L/C)

III.Buying and Selling of Foreign Exchange

IV. Foreign Demand Draft (FDD)

V.Foreign Telegraphic Transfer (FTT)

E. Special Fee Earning Products I. Bank Guarantee (B/G)

II. Foreign Bank Guarantee (F.B/G)

III. Credit Card

IV. Portfolio Management

V. Issue Management

VI. Underwriting

VII. Brokerage House

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VIII. Locker Service

IX. Issuance of sanchya patra, wage earners

development bond, national investment

bond, prize bond.

F. Social Service Product I. Sale of Lottery tickets for collection of fund for social establishment.

II. Collection of Zakat Fund

III. Collection of Haj Fund

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2.6 NCCBL at a Glance

National Credit and Commerce Bank Ltd.

Performance of the Bank at a Glance

FINANCIAL HIGHLIGHTS

Taka in Million

2002 2003 2004 2005 2006

Authorized Capital 750.00 750.00 750.00 2500.00 2500.00

Paid up Capital 480.48 552.55 607.81 975.04 1201.79

Reserve fund and other Reserve

388.01 510.73 761.18 884.90 1215.58

Equity fund 1037.73 1063.28 1368.99 1859.94 2417.37

Deposit 16062.35 14673.42 16069.23 21478.22 28147.34

Investment 2909.15 2966.02 4385.23 3010.45 3552.08

Import Business 13579.50 13089.94 13274.08 16296.30 17646.80

Export Business 4559.00 4967.33 5771.65 7776.30 8557.00

Operating Profit 597.50 624.94 720.49 1018.34 1267.57

Total Assets (excluding contra)

18685.19 17439.93 21469.02 26114.13 32615.01

Fixed Assets 267.76 300.41 297.22 308.14 353.71

Earning per Share 44.47 30.99 46.91 36.11 39.88

Dividend: Cash (%) - 10.00 - 10.00 10.00

Return on Equity (ROE) (%) 20.59 16.10 20.83 18.93 19.82

Return on Assets (ROA) (%) 1.14 0.95 1.33 1.35 1.63

Capital Adequacy Ratio 8.01 9.01 9.05 9.02 9.78

Amount of provision against Classified Loans

633.75 733.86 650.06 405.75 523.58

Amount of provision against Unclassified Loans

118.34 118.34 138.90 202.14 282.09

Advance/Deposit Ratio (%) 81.85% 87.58% 94.66% 95.60% 87.68%

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National Credit and Commerce Bank LimitedProfit and Loss Account

For the year ended 31 December 2008

2008 2007

Taka Taka

Net interest income 1,349,743,364 1,123,357,012

Total operating income 3,317,659,842 2,530,576,172

Total operating expense 954,169,877 750,332,990

Profit before provisions 2,363,489,965 1,780,243,182

National Credit and Commerce Bank Limited

Balance Sheet as at 31 December 2008

2008 2007

PROPERTY AND ASSETS Taka Taka

Cash:

In hand (including foreign currencies) 432,819,168 467,251,137

Balances with Bangladesh Bank and its agent bank (s) (including foreign currencies)

2,405,273,950 1,825,530,019

Balances with other Banks and Financial Institutions(In Bangladesh & Outside Bangladesh)

314,112,991 455,514,787

Money at call and short notice - -

Investments 6,526,818,661 6,215,402,586

Loans and advances 46,332,688,464 32,687,753,165

Fixed assets including premises, furniture and fixtures 775,305,494 521,995,601

Other assets 578,504,998 298,194,075

TOTAL ASSETS 57,365,523,726 42,471,641,370

LIABILITIES AND CAPITAL 57,365,523,726 42,471,641,370

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2.7 Company Analysis

There are two types of Company Analysis.

1. Qualitative (SWOT) Analysis

2. Quantitative (Ratio) Analysis

2.7.1 SWOT Analysis

Strength

I. NCCBL availability of capital is good.

II. Customer satisfaction is positive; Bank reduces service support of the unprofitable customer.

III. Honest, reliable, knowledgeable and helpful workforce.

IV. Customer retention is increase so profit level is increase.

V. NCCBL can be relatively an important player among the private sector banks in this area.

Weakness:

I. The bank should try to arrange more training programs for their officials, quality training will the officials to enrich them with more recent knowledge of international trade financing.

II. Lower capacity.

III. The bank lacks a division for customer service, because there are customers who have no banking knowledge. High price product deposit, loan, L/C.

IV. Low liquidity.

Opportunity:

I. Bank has installed returns screen for

smooth operation of foreign currency

dealing.

II. Remittance and fund transfer purpose

customer could take the advantage to

online facility.

III. Deposit down turn in international trade,

it has produced steady steam of revenues.

IV. Banker expresses deep apperception to

the clients for their support patronages.

Threats:

I. The earth quake disaster by Tsunami and

Seedor is expected to cost is adverse

impact in the coming year.

II. Government policy change, some

government banks are turn into public

bank.

III. Islamic Shariah based banking system.

IV. Lack of planning, organizing and

supervising to establishes culture.

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2.7.2 Ratio Analysis

Ratio 2008 2007

Profitability Ratio: I. Return on equity capital = Net income after tax / Total equity

21.24% 22.45%

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II. Return on assets (ROA) = Net income after tax / Total Assets

1.35% 1.47%

III. Net interest margin = (Interest income from loans and security invest – Interest expense on deposit & on other deposit issued) / Total Assets

3.25% 3.81%

IV. Net operating Margin = (Total operating revenues – Total operating expanses) / Total Assets

3.90% 3.89%

V. Earning per Share of Stock (EPS) = Net income after tax / Common equity shares outstanding.

21.24% 22.45%

VI. The banks net profit margin (NPM) = Net income after tax / Total operating revenues

23.98% 25.68%

VII. Degree of asset utilization (AU) = Total operating revenues / Total Assets

5.62% 5.72%

VIII. Equity multiplier (EM) = Total Assets/ Total equity capital

15.76 times

15.28 times

IX. Operating efficiency = Total operating expenses / Total operating revenues

30.64% 32.07%

Liquidity Ratio: I. Current Ratio = Current Assets / Current Liabilities

0.12 0.13

II. Quick Ratio = Cash + Short term marketable Security / Current Liability

0.023 0.056

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CHAPTER-Three

General Banking

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3.1 Introduction:

All business concerns earn a profit through selling either a product or service. A bank does not

produce any tangible product to sell but does offer a variety of financial services to its customers.

General banking is the starting point of all the banking operations. It is the development, which

provides day to day services to the customers. Everyday it receives deposits from the customers and

meets their demand for cash by honoring cheques. It opens new accounts, remit funds, issue bank

drafts and pay orders etc. Since bank is confined to provide the service everyday, general banking is

also known as “Retail Banking”.

The following things done in this department:

A. Accepting of deposit.

I. Opening of account.

II. Check Book issue

III. Transfer of account.

IV. Closing of account.

B. Clearing (Inward & Outward)

C. Supplementary

D. Cash Section

E. Dispatch Section

As on 31st December, 2006, Bank’s total Deposit stood at Tk.28, 147.34 million. Deposit growth over

the last 05 years appended in the chart below.

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III.2 Accepting of deposit:

Accepting deposits is one of the two classic functions of commercial banks. The relationship between

a banker and his customer beings with the opening of an account by the former in the name of the

latter. Initially all the accounts are opened with a deposit of money by the customer and hence these

accounts are called deposits account.

The deposits those are accepted by NCCBL may be classified in to:

a) Demand Deposits

b) Time Deposits

a) Demand Deposits:

The amount in accounts is playable on demand so it is called demand deposit account.

NCCBL accepts demand deposits through the opening of –

I. Current Account

II. Savings Account

Current Account:

Both individuals and business open this type of account. Frequent transaction are (deposit as well as

withdrawal) allowed in this type of account. A current a/c holder can draw checks on his account, any

amount, and any numbers of times in day as the balance in his account permits.

Criteria of current account followed by NCCBL-

Generally opened by businessman, government and Sami-government

organizations; with proper introduction.

No interest is provided for deposited amount.

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Deposit Mix -2008

Sundry Deposit, 6.46%

Bearer Certificate of

Deposit, 0.51%

Saving Deposit, 9.13%

Short term Deposit, 3.43%

Fixed Deposit, 62.30%

Current Deposit, 7.66%

Special Savings Scheme,

5.70%

Special Fixed Deposit Scheme,

3.46%

Instant Earning Deposit, 0.08%

Premium Term Deposit, 1.27%


Overdraft is allowed in this account.

Minimum opening balance is Tk 5000.

Current deposit may be opened in the name of Firm, Corporate Bodies, Joint

Stock Companies.

Savings Account:

Individuals for savings purposes open this of account. Current interest rate of these accounts is 6%

per annum. Interest on SB account is calculated and accrued monthly and credited to the account half

yearly. Interest calculation is made for each month based on the lowest balance at credit of an account

in that month. A depositor can withdraw from his SB account not more than twice a week up to an

amount not exceeding 25% of the balance in the account.

Criteria of savings account followed by NCCBL:

An appropriate introduction is required for opening the A/C.

Frequent withdrawal is not encouraged.

A depositor may withdrawal money from his/her account twice in a week.

7 days notice is required for withdrawal of large amount.

Minimum opening balance is Tk 1000.

Depositor may withdrawal his/her deposited money up to 25% of the balance in

his/her account without notice, the bank may relies service charge in its discretion in addition

to forfeiture of interest for that month.

Depositor will get interest on the amount deposited in his/her account irrespective of

any limit.

b) Time Deposits:

A deposit which is payable at a fixed date or after a period of notice is a time deposit.

NCCBL accepts time deposits through-

I. Fixed Deposit Receipt (FDR)

II. Special Savings Scheme (SSS)

III. Short Term Deposit (STD)

IV. Special Fixed Deposit Scheme (SDS)

Fixed Deposit Receipt (FDR)

These are deposits, which are made are made with the bank for a fixed period specified in advance.

The bank needs not to maintain cash reserve against these deposits and therefore, bank gives high rate

of interest on such deposits. A FDR is issued to the depositor acknowledging receipt of the sum of

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money mentioned therein. It also contains the rate of interest and the date on which the deposit will

fall due for payment. NCCBL is now opening fixed deposit account only 3 years.

Procedure of opening FDR:

Before opening a Fixed Deposit Receipt a customer has to fill up an application form, which contains

the followings:

Amount in figures

Beneficiary’s name and address

Period

Rate of interest

Date of issue

Date of maturity

How the account will be operated (single or jointly)

Signature (s)

F.D.R. no.

Special instructions (if any)

After fulfilling the above information and depositing the amount, FDR account is opened a FDR

receipt is issued and it is recorded in the FDR register, which maintains the following information:

FDR account no.

FDR no.

Name of the FDR holder with address

Maturity period

Maturity date

Interest rate

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Payment of Interest:

In case of FDR account the bank does not have to maintain a cash reserve. So NCCBL offers a high

interest rate in FDR. It is usually paid on maturity of the fixed deposit. NCCBL calculates interest at

each maturity date and provision is made on that “Miscellaneous creditor expenditure payable

accounts” is debited for the accrued interest.

Rate of interest varies depending on the period of maturity date,

Duration Rate of Interest

3 months 8.00-8.50%

6 months 8.50-9.00%

12 months 9.00-9.50%

36 months 9.50%

Loss of FDR:

In case of lost FDR, the customer is asked to record a GD (General Diary) in the nearest Police

Station. After that, the customer has to furnish an Indemnity Bond to NCCBL. A duplicate FDR is

than issued to the customer by the bank.

Renewal of FDR:

The FDR becomes automatically renewed for like periods and amounts, unless this are withdrawn by

the depositor or the bank notifies the depositor I writing at least 15 days in the original or any renewed

maturity date (s) of its desire to terminate the account or charge any term and condition of the

account.

Special Savings Scheme (SSS)

Special Savings Scheme (SSS) is more familiar as Deposit Pension Scheme. NCCBL offer it to its

customer to deposit fixed amount of many each month for a definite period of time, normally for 5 to

10 years.

Like ‘Deposit Pension Scheme’, this scheme includes the following features for the convenience of

the clients.

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The monthly installments of Tk. 500/- to Tk. 2500/- may be deposited every month

during the entire period of the scheme.

The duration of the scheme is 5 years or 10 years.

The depositors will be paid a specified as per the following table:

A depositor may open one or more accounts of different installments in the same Branch.

Loan may be extended up to 80% of the deposited amount.

Short Term Deposit (STD)

In short Term Deposit account, the deposit should be kept for at least seven days to get interest. The

interest offered for STD is less than that of savings deposit. In NCCBL, various big companies,

organizations, Government Departments keep money in STD accounts. Frequent withdrawal is

discouraged and requires prior notice. STD account opening procedure is similar to that of the savings

account.

Interest rate for STD account – 4.50%

In NCCBL, usually customers give an instruction to the Bank that their current account will be

debited whenever its deposited amount crosses a certain limit and this amount will be transferred to

STD account.

Special Fixed Deposit Scheme (SDS)

It is popularly known as “Time Deposit”. Because these deposits are not repayable on demand but

they are, withdraw able subject to a period notice. The prospective fixed deposit holder is expected to

fill an application from prescribed for the purpose, stating the amount and the period of deposit. The

application itself contains the rules and regulations of the deposit including the space for specimen

signature.

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Monthly installment (Taka)

Duration

5 years 10 years

500/- 40,000/- 1,12,500/-

1,000/- 80,000/- 2,24,500/-

1,500/- 1,20,000/- 3,37,500/-

2,000/- 1,60,000/- 4,50,000/-

2,500/- 2,00,000/- 5,62,500/-


Criteria of Special Fixed Deposit Scheme (SDR) followed by NCCBL:

Any amount of Tk. 1, 00,000/- or its multiple may be deposited under this scheme.

Duration of the Scheme is 3(three) years.

Monthly interest will be given to the depositor against the deposited amount

according to the following schedule.

Amount Deposit (Tk.) Monthly profit (Tk.)

50,000/- 500/-

1,00,000/- 1,000/-

2,00,000/- 2,000/-

3,00,000/- 3,000/-

4,00,000/- 4,000/-

5,00,000/- 5,000/-

6,00,000/- 6,000/-

7,00,000/- 7,000/-

8,00,000/- 8,000/-

9,00,000/- 9,000/-

10,00,000/- 10,000/-

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3.2.1 Account Opening Section

It is said that, there is no banker customer relationship if there is no A/C of person in that bank. By

opening a banker and customer create a contractual relationship. However, selection of customer for

opening an account is very crucial of a bank.

Fig: Account Opening Procedure in a flow chart

Before opening of current or savings account, the following formalities must be completed

I. Application on the prescribed from;

II. The customer information is filled up with the form;

III. Introduction:

The following persons can introduce an a/c opener:

An existing current/savings account holder of that branch;

An officer of that branch (not below the rank of an Assistant Officer.);

A respectable person of the society or locality who is well known to the

Manager/2nd man of the branch concerned.

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The authorized officer scrutinizes the

introduction and examines the

documents submitted.

The authorized officer scrutinizes the

introduction and examines the

documents submitted.

For individual introduction is needed by an account holder.

For individual introduction is needed by an account holder.

Applicant fills up the relevant

application form in the prescribed

manner.

Applicant fills up the relevant

application form in the prescribed

manner.

She/he is required to fill up the specimen

signature card.

She/he is required to fill up the specimen

signature card.

After depositing the cash one cheque book & pay-in-slip book

is issued.

After depositing the cash one cheque book & pay-in-slip book

is issued.

Issuance of deposit slip and the deposit must be made in cash. No cheque or draft is acceptable to

the Bank.

Account is opened


IV. Furnishing photographs;

V. Banker will supply a set of printed forms required for opening the account, which will

normally include:

Specimen Signature Cards (SSC);

Deposit Slip Book;

Check Book Requisition Slip;

VI. Customer should carefully read and full-fill the application form;

VII. Putting specimen signatures in the specimen card;

VIII. Any special instruments with regard to operation of the account should be noted on

the relevant signature card boldly duly authenticated by a/c holder should be obtained;

The required Account Number for the new Account from the Account

opening Register should be obtained;

IX. Obtain the signature and a/c number of the Introducer on the advice of new

accountant the placement for the purpose and gets the signature properly verified by an

Authorized official of the bank;

X. The deposit slip properly filled in and signed by the customer;

XI. Then the new a/c number should be written at the appropriate place of the Deposit

slip and mark new Account on both the copies of the deposit slip and request the customer to

deposit the money at the cash counter;

XII. Place the signature cards, Advice of new account, a copy of Deposit slip, photographs

and other necessary papers/documents etc. in a file;

XIII. Obtain approval of the Authorized officer for opening the new account on all relevant

papers while giving approval for opening an account the Authorized official should be

satisfied about the of the Introducer;

XIV. The Authorized officer on the advice of new a/c and on the specimen signature card

should also attest the signature of the new a/c holder;

XV. After approval of the opening of the a/c, get the cheque book requisition slip signed

by the customer.

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XVI. Deliver the cheque book to the customer after properly marking the account number,

name and place of the branch on each leaf of the cheque book;

XVII. On completion of account opening a file for the new a/c holder and file all relevant

papers forms etc. Signature cards, copies of Advice, Deposit slip, Debit etc. is distributed to

concerned departments.

Classification of Customers

Individual (Personal)

Proprietorship (Sole traders)

Partnership (Registered or Unregistered)

Limited Company (Public/Private)

Educational Institution, Club, Society, Association etc.

Trust

Executors

N.G.O

Application from for current/savings account

Following are the contents of application from for opening savings/current A/C

Name of the Applicant

Father’s name/Husband’s name

Mother’s name

Date of Birth

Present Address

Occupation

Nationality

Phone No.

Special instruction for operation of the account

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Nominee

Specimen Signature

Introducer name

Introducer’s signature

Amount deposited.

Additional documents are to be obtained for opening some accounts

1. Proprietorship Firm:

Name of authorized persons, designation, and specimen signature card.

Trade license.

Tax Receipt (For export/import)

Declaration of Proprietorship

Mandate if operation by third party is to be allowed.

2. Partnership Firm:

Account must be opened in the name of the firm.

The firm should describe the names and addresses of all partners.

Partnership deed is required which duly attested by Notary Public.

Trade license from City Corporation is needed.

Tax receipt (for import/export)

Photocopy of Registration Certificate duly attested by Notary Public in case

of a registered firm.

Letter of Partnership duly signed by all the partners, in case of non-

registered firm.

Resolution signed by all the partners to open the a/c.

Mandate as to operation of the a/c.

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3. Clubs/Societies/ Trustee/Associations/Non-trading Institutions etc:

Certified copy of Resolution for opening and operation of account.

Up to date list of office bearers.

Certified copy of Bye-laws and Regulations/Constitution.

Copy of Government approval (if registered).

In case of death, a/c, should be stopped until the club nominates another

person.

Trust deed is needed-for trustee.

4. Joint Accounts of two or more persons

Mandate for Operation of Accounts

A clear authority signed by all the joint A/C holders containing instructions as to who will operate the

account and how the account is to be operated should be obtained. The mandate should mention the

name of the persons authorized to draw check. In case of death/insanity/insolvency of one or more of

the joint a/c holders, the authority will cease to operate.

Executor:

Probate: From a court of law along with a certified copy of the will duly

attested by a notary public.

A mandate in case if there is more than one Executor, signed by all the

executors, as to how the a/c will be operated.

Administrator:

Letter of Administration from a court of law along with a certified copy duly

attested by a Notary Public appointing him as an Administrator of the Estate of the

deceased. The operation of the a/c is to be allowed as per instructions of the letter of

administration.

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5. Private Limited Joint Stock Company

Memorandum of Association and Articles of Association duly certified by

Chairman of Secretary.

Resolution of the Board duly certified by chairman/secretary authorizing to

open the a/c with the Bank and naming the persons who will operate the a/c, as per

provisions of Articles of Association.

Corporate Agreement Form.

Certificate of Incorporation duly certified by Chairman/Secretary.

List of Directors duly certified by Chairman/Secretary.

6. Public Limited Joint Stock Company

Memorandum and Article of Association duly certified by

Chairman/Secretary.

Certificate of Incorporation duly certified by Chairman/Secretary.

Resolution of the Board duly certified by Chairman/Secretary authorizing to

open the a/c with the Bank and naming the persons who will operate the a/c as per

provisions of Articles of Association.

Corporate Agreement Form

Certificate of commencement of business.

List of Directors duly certified by Chairman/Secretary.

7. Co-operative Society/Societies Limited

Copy of Byelaw duly certified by the Co-operative officer.

Up to date list of office bearers.

Resolution of Executive Committee as regards of the account.

Certified copy of Certificate of registration issued by Registrar, Co-operative

Societies.

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8. Trustee Board

Prior approval of Head office of the Bank.

Certified copy of Deed of trust, up to date list of members of the trustee

Board and certified copy of the Resolution of trustee Board to open and operate the

account.

9. NGO

The account opening procedure is same but in exception is that the Registration

Certificate from the Social Welfare Department of Government must be enclosed with the

application.

3.2.2 Issuing Cheque Book To The Customers

A. Issue of fresh cheque book

Fresh cheque book is issued to the account holder only against requisition on the prescribed

requisition slip attached with the cheque book issued earlier, after proper verification of the signature

of the account holder personally or to his duly authorized representative against proper

acknowledgment.

Fig: Cheque Book Issue in a Flow Chart

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Requisition slip filled properly along with the cheque book number.

Banker Verifies the Slip

Enter the new cheque book number in the register book against the specific customer’s name.

Banker issues new cheque book if every thing in the right from


Procedure of issuance of a fresh cheque:

A customer who opened a new a/c initially deposits minimum required money in the

account.

The account opening from is sent for issuance of a cheque book.

Respected officer first draws a cheque book

Officer than scaled it with branch name.

In-Charge officer enters the number of the cheque book in cheque issue register.

Officer also enters the customer’s name and the account number in the same register.

Account number is then writes down on the face of the cheque book and on every leaf of the

cheque book including requisition slip.

There is a special technique to sign every leaf of the cheque book with the help of carbon

paper. So officer’s signature prints the reverse side of the leaf.

The name of the customer is also written down on the face of the cheque book and on the

requisition slip.

The word “Issued on” along with the date of issuance is written down on the requisition.

Number of cheque book and date of issuance is also written on the application from.

Next, the customer is asked to sign in the cheque book issue register.

Then the respected officer signs on the face of the requisition slip put his initial in the

register and hand over the cheque to the customer.

B. Issue of New Cheque Book (For old Account)

All the procedure for issuing a new cheque book for old account is same as the procedure of new

account. Only difference is those customers have to submit the requisition slip of the old cheque book

with date, signature and his/her address. Computer posting is than give to the requisition slip to know

the position of account and to how many leaf/leaves still not used. The number of new cheque book is

entered on the back of the old requisition slip and is signed by the officer.

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C. Procedure of issuance of a new cheque book:

If the cheque is handed over to any other person then the account holder the bank

addressing the account holder with details of cheque book issues an acknowledgement slip.

This acknowledgement slip must be signed by the account holder and returned to the bank.

Otherwise the bank will not honor any cheque from this cheque book.

At the end of the day all the requisition slips and application forms are sent to the

computer section to give entry to these new cheque.

Then cutting the cheque book issuing charge.

3.2.3 Transfer of an Account

The account submits an application mentioning the name of the branch to

which he wants the account to be transferred.

His signature cards, advice of new account and all relevant documents are

sent to that branch through registered post.

The balance standing at credit in customer’s account is sent to the other

branch through Inter Branch Credit Advice (IBCA)

No exchange should be charged on such transfer.

Attention is also given in this connection.

3.2.4 Closing the Account

Upon the request of a customer, an account can be closed. After receiving an application from the

customer to close an account, the following procedure is followed by a banker. The customer should

be asked to draw the final cheque for the amount standing to the credit of his a/c less the amount of

closing and other incidental charges and surrender the unused cheque leaves. The a/c should be

debited for the account closing charges etc. and an authorized officer of the bank should destroy

unused cheque leaves.

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In case of joint a/c, the application for closing the should be signed by all the joint holders.

A banker can also close the account of his customer or stop the operation of the account under

following considerable circumstances:

Death of Customer.

Customer’s insanity and insolvency.

Order of the court (Garnishee order)

Specific charge for fraud forgery.

Stop Payment of Cheque:

A banker can stop payment of cheque of his customer under following considerable circumstance:

Firstly the account holder will apply to stop the payment of his

cheque

There is a register for this purpose. It is kept by the authorized

officer.

The officer will see the condition of account and verify everything.

In the ledger book, the officer will marked with red ink and the

cheque will not be paid.

Dishonor of Cheque:

If the cheque is dishonored, NCCBL send a memorandum (cheque return memo) to the customer

stating the reason in the following way:

Refer to drawer.

Insufficient Fund.

Not arranged for.

Effects not cleared May be present again.

Exceed arrangements.

Full cover not received.

Payment stopped by drawer.

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Payee’s endorsement irregular/illegible/required.

Payee’s endorsement irregular, require bank’s confirmation.

Drawer’s signature differs/required.

Alterations in date/figures/words require drawer’s full signature.

Cheque is posts dated/out of date/mutilated.

Amount in words and figures differs.

Crossed cheque must be present through a bank.

Clearing stamps required/requires cancellation.

Addition to the discharge of bank should be authenticating.

Cheque crossed “Account Payee Only”

Collecting bank’s discharge irregular/required.

3.3 Clearing (Inward & Outward)

Types of Clearing: There are two types clearing

I. Outward Clearing

II. Inward Clearing

Outward Clearing:

When a particular branch receives instructions drawn on the bank within the clearing zone and sends

those instructions for collection through the clearing arrangement is considered in outward clearing

for that particular branch. This branch is known as collecting branch.

Inward Clearing:

When a particular branch receives instructions, which are on themselves and sent by other member

banks for collection are treated as inward clearing of that branch.

Types of Returns: There are two types Returns

I. Outward Returns

II. Outward Returns

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Outward Returns:

Clearing returns (outward) include those cheques that were presented to us by other banks but we

have to return them unpaid to the collecting banks due to various reasons.

Outward Returns:

Clearing returns (inward) consists of those instruments which were presented by us to

other banks for payment but have been returned and unpaid by them due to specified reason

through the clearing house.

3.3.1 Procedures of Outward Clearing:

Sequence

First tire: Collecting Branch

1. The instrument is deposited duly entered in the pay-in-slip or voucher.

2. The instrument is checked for apparent discrepancy and is compared with the

particular noted in the pay-in-slip.

3. In case an order instrument is being deposited in second payee’s account, guarantee is

obtained from the second payee and is attached to the pay-in-slip.

4. In case the payee’s name on the specially crossed instrument differs slightly that of

the depositor, the instrument may be accepted but only from customers well known to the

bank and after obtaining an indemnity which is attached to the pay-in-slip.

5. Stamping:

Special Crossing: On the instrument

Clearing Stamp: Both on instrument and pay-in-slip.

Endorsement: Back of the instrument.

6. Duly signed and return of counterfoil to the customer.

7. The particulars of the instrument and voucher are entered in the Outward Clearing

Register/Computer.

8. The Register is balanced; the vouchers are separated from the instruments.

9. Prepare voucher: Dr. Suspense A/C: Clearing Adjustment

Cr. All pay-in-slip/vouchers

Voucher to be passed on the following working day.

10. Sorting of instruments bank-branch wise and accordingly prepares sub-main

schedules.

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11. Prepare House page according to main schedules.

12. Tallied house with Outward clearing Register.

13. The house with instrument sent to Principal/Local Office/Main branch (2nd tire)

14. In the following working day prepared voucher is to be passed. If any return and

unpaid instrument is received from principal branch, in addition to above voucher the

following voucher will be passed.

Dr. Party A/C

Cr. Suspense A/C: Clearing Adjustment

15. When advice is received from Principal/Local Office, than following voucher is to be

passed.

Dr. Head office A/C

Cr. Suspense A/C: Clearing Adjustment

Outward clearing bills

It refers the instruments drown on the other banks received by the NCCBL.

Cheques drawn on another branch of NCCBL. The settlement process:

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Cheques are directly sent to the respective branch.

When IBCA comes customer’s account is credited.

IBCA is sent from that branch to this branch.

Entry passed in OBC register of that branch

OBC received along the instrument by the respective branch.


Cheque drawn on another bank, which is situated within clearing house area.

Second tire: Principal Branch/ Local office/ Main Branch

Instrument received by this, office: same as previous section SL. 1 to 9.

Lodgment by this branch:

1. Received house page with instruments from the branches.

2. Recorded the amount in a register from house page.

3. The instruments with schedules are rearranged bank-branch wise and prepare main

schedules for each bank.

4. Prepare house page.

5. The instruments with schedules, house page and the house book are sent to the

clearing house through bank representative.

Third tire: Clearing House (Bangladesh Bank/Sonali Bank).

The instruments are delivered to the respective banks.

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Cheque are collected by Sonargang Road Br.

These bills are sent to clearing house from principal Br.

IBDA along with bills are sent to Principal Br.

Depositor’s account is credited with NCCBL Sonargang Road Br.

If drawer’s Bank honors the bill then


3.3.2 Procedures of Inward Clearing:

Sequence

First tire: Clearing House (Bangladesh Bank/Sonali Bank).

1. The instruments are drown on our bank are received from other banks in the clearing

house.

2. The amount and number of instruments received are entered in the house book from

the main schedule of respective banks.

3. The amount of instruments delivered, received and the differences are written on a

figure provided in the clearing house.

Second tire: Principal Branch/Local Office/Main Branch

1. The instruments with schedules are arranged branch wise.

2. The amount of each schedule received is entered in the house pages of the respective

branch.

3. The respective house pages are totaled and check the amount with total amounts

instruments received from all banks.

4. The instruments are sent to respective branches with the slip showing total amount

and number of instruments.

5. The instruments sent to the branches concerned for clearance and Advice is collected

from them for honored cheques.

Third tire: Paying Branch

1. Particulars of the instruments are compared with the schedule.

2. The instruments are sent to the respective departments for honoring them.

3. For the total value of honored cheques pass the following vouchers:

Dr. Party A/C (already debited by instruments)

Cr. Head Office A/C

4. Dishonored cheques (if any) with reason, memo and Credit Advice sent Principal

Branch.

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Nikash Software:

Clearing House manual and paper based in many advanced countries have gradually extended their

range of activities to include automated and electronic means for settlement of payment transactions.

Computerization of clearing operations was the first major step towards modernization of the

payments system. The introduction of technology for clearing operations started from December 1997

using Microprocessor based computer system. These systems are used for generating settlement

reports on the basis of input data containing the value of (cheques/ instruments presented) claims of

one bank over the other banks in the clearing house. Clearing balancing and settlement, which used to

take a long time due to differences and error in manual balancing, were reduced, apart from providing

accuracy in the final settlement.

Nikash is the software developed for entering and processing of clearing and processing of clearing

house data. Programs are written under FoxPro database program. This operation manual describes

the 1st House menu, Receipt menu, Payment menu, Return House menu, Clearing menu, Maintenance

menu and Exit menu to prepare data diskette for clearing house. All necessary code files are included

in the software.

This package has developed for the use of member bank/branches of the clearing house, Bangladesh

Bank, Dhaka.

3.4 Cash section:

The cash section of NCCBL deals with all types of negotiable instruments, cash and other instruments

and treated as a sensitive section of the bank. It includes the vault, which is used as the store of cash,

instruments. If the cash stock goes beyond this limit, the excess cash is then transferred to Bangladesh

Bank.

Keys to the room are kept under control of cash officer and branch in charge. The amount of opening

cash balance is entered in to a register. After whole day’s transaction, the surplus money remains in

the cash counter is put back in the vault and known as the closing balance. Money is received and

paid in this section.

Cash payment:

First of the entire client comes to the counter with the cheek and gives it to the officer

in charge there. The officer checks whether there are two signatures on the back of the cheque

and cheques his balance in the computer. After that the officer will give it to the cash in

charge.

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Then the cash in charge verifies the signature from the signature card and permits the

officer in computer to debit the client’s account by giving posting. A posted seal with teller

number is given.

Then the cheque is given to the teller person and he after checking everything asks

the drawer to give another signature on the back of the cheque.

If the signature matches with the one given previously ten the teller will make

payment keeping the paying cheque with him while writing the denomination on the back of

the cheque.

If the instrument is free of all kind of error the respected officer will ask the bearer to

sign on the back of it.

He will then put his/her initial beside the bearers’ signature. She/he will also sing it

on its face, will write down the amount by red pen will put on a scroll number from his/her

scroll register.

Then the cheque will be sent to the cash counter. At the cash counter bearer will be

asked again to sign on the back of the instrument.

The cash officer will then enter the scroll number in his/her register and will pay the

money to the bearer.

At the end of the day these scroll numbers of the registers will be compared to ensure

the correctness of the entries.

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The Procedure of Paying Cash at the Counter

Counter Customers place the check to the officer (LO). The officer receives the check, enters its particulars in a register and issues the customer a token.

The LO now verifies the ledger of the customer. If the customer’s account position is okay, he passes the cheque to the second officer.

The second officer compares the signature of the customer with that on the signature card kept in his custody. Then he makes an entry of the check in another register and cancels it by signing across the cheque.

Counter

At the end of the banking hour a trial balance is prepared from and all the registers are compared with one another.

Cashier enters the amount of the check in the cash register and pays the appropriate amount to the customer.

Once the check is cancelled that is okayed for payment, it is brought to the cashier by a peon.

Cash Receipt:

At first the depositor fills up the deposit in slip. There are two types of deposit in slip

in this branch. One for saving account and another for current account.

After filling the required deposit in slip, depositor deposits the money.

Officers at the cash counter receives the money, count it, enter the amount of money

in the scroll register kept at the counter, seal the deposit in slip and sign on it with date.

Then this slip is passed to another officer who enters the scroll number given by the

cash counter in his/her register along with the amount of the money, sign the slip and keep the

banks’ part of the slip. Other part is given to the depositor.

At the end of the day entries of both of these registers are cross checked with the

register kept at the cash counter to see whether the transactions are correct or not.

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The Procedure of receiving Cash at the Counter

Counter counter After placing deposit slip, the respective officer makes an entry to scroll register book.

The receipt and cash are placed before cashier. He counts the amount of money first and then makes an entry to another register book

Then the cashier passes the register to the second officer.

At the end of the banking hour a trial balance is prepared from receipt register.

After verifying the receipt, the cashier returns the counter folio of the deposit slip to the customer and keeps the other portion in his custody.

3.5 Local Remittance Section

Banks have a wide network of branches all over the country and offer various kinds of remittance

facilities to the public. The remittance of the funds by banks is made through different methods. They

are:

Demand Drafts

Pay Order

Pay Slip

Mail Transfer

Telegraphic Transfer

A) Demand Drafts (DD)

Demand Draft is an order to pay money, drawn by one branch of a bank upon another branch of the

same bank for a sum of money payable to order on demand. A draft cannot be drawn payable to

named payee. The draft is prepared with care regarding the name of the payee, the amount and the

44 | P a g e


office on which it is drawn. The issuing officer sends to the drawee an advice containing the

particulars of the draft.

B) Pay Order (PO)

Banks payment order is an instrument that contains an order for payment to the payment to effect

local payment whether on behalf of the bank or its constituents. The banks payment offer is in the

form of receipts and issued by the joint signature of two officials. It is not transferred and therefore it

can only be paid to:

The payee in identification

The payee’s banker, who would certify that the amount would be credited to

payees account.

A person, holding the letter of the authority from the payee whose signature

must be authenticated by the payee.

NCCBL charges different amount of commission on the basis of payment order amount which are

given below:

Amount of Payment Order Commission Vat

Up to Tk. 10,00,000/- 10 2

Tk. 10,00,001/- to 5,00,000/- 20 3

5,00,001/- and above 50 8

C) Mail Transfer (MT)

Mail transfer is an advice regarding remittance of funds sent by one branch to another branch of the

same bank, at the written request of applicants.

D) Telegraphic Transfer (TT)

Telegraphic transfer is the quickest methods of transferring funds from one place to another place.

The remitter branch sends a telegraphic message to the others branch, to pay a certain sum of money

to a named payee. Such a message is usually sent in coded language. There are two procedure should

be followed for TT.

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3.6 Dispatch Section

Those documents that are enter in the branch or exit of the branch must go through this section.

The main objective of this section is;

Keeping record of the documents send to other branches or bank.

Letters are sending to their respective destination.

Send these documents safely and correctly.

Receives documents come through different medium, such as postal service, courier

service, via messenger etc.

Dispatch section of Dhanmondi Branch performs another duty. It enters the transfer

instruments in the scroll book and then sends those to the computer section.

Two types of letters are continuously received. These are:

I. Inward (Registered/Unregistered) letter.

II. Outward (Registered/Unregistered) letter.

At first recording is required whether it is Inward or Outward Registered/Unregistered letters. Then

letters are disbursed to their respective destination. Inward letters are firstly segmented according to

their different sections and after that an entry is given to the Inward Register book.

Books Maintained

Local Dispatch Khata (including Peon Book)

Register Dispatch Khata (For Registered letter).

Ordinary Register Khata (For Unregistered letter).

Inward Register Books.

Outward Register Books.

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CHAPTER-Four

Foreign Exchange

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4.1 Introduction:

Foreign Exchange is the mechanism by which the currency of one country gets converted in to

currency of another country to effect ‘International Trade’ payment. This mechanism by which

commercial investments and others transactions between countries are being settled. It involves with

the purchase and sell of the money of foreign countries and transferring of exchange balance from

bank to bank.

Bank largely depends in its Foreign Exchange Business to ensure profitability. To look after the

Business and also to ensure prompt service to the Import & Export officers having exposure and

expertise in Foreign Exchange Business have been posted both at Head Office & Authorized Dealer

Branches. During 2006, the Bank handled Export & Import Business to the tune of Tk.8, 557.03

million & Tk.17, 646.84 million respectively.

Bank’s wide network of correspondence plays vital role in facilitating its International Trading. At

present, total number of correspondents is 335.

With a view to facilitating housebound remittance, the Bank made arrangements with a number of

exchange companies during the year. These arrangements brought significant development in

remittance business. We are going to expand this network in near future.

4.2 Sources of foreign exchange and uses of foreign exchange:

Sources of foreign currency of a nation-

Proceeds from Export of commodities.

Proceeds from Export of service at abroad.

Foreign remittance. (inward by non-resident wage earner/ gifts grants form other

country)

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Foreign AID/Loan/Credit/Barters.

Foreign Direct Investment (FDI).

Income on investment receipt from abroad, foreign tourist/travelers.

Uses of foreign exchange-

Payment against imports of commodities from other nations.

Payment for services from abroad.

Providing gifts grants/donation to other nations.

Investment made to abroad.

Transfer of profit arising from foreign investment.

Residence travel to other nations (tourist/travelers)

Maintenance of am basis/consulate office at abroad.

4.3 Role of Bank in Foreign Exchange:

The banks which are dealing in foreign exchange and providing facilities for conversion of one

currency in to another on vice versa are known as authorized dealers in foreign exchange. A bank is

said to buy or sell foreign exchange when it handles the claims drown in foreign currency or the

currency notes and coins of other countries. In the facilitations of international trade performance for

importing and exporting by opening letter of credit advising confirming negotiating and remittance of

export proceeds.

4.4 Exchange Rate:

The rate at which one currency is converted in to another currency is the rate of exchange between the

currencies concerned. The conversion of currency is done by bank who deals in foreign exchange.

The rate of exchange is the price of one currency expressed in terms of another currency. (For

Bangladesh, Exchange rate means the price of foreign exchange in terms of Bangladesh Taka)

4.5 Exchange Rate System:

Exchange Rate System can be classified as-

Fixed: Exchange rates are either held constant on are allowed to fluctuate only within

narrow boundaries.

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Freely Floating: Exchange rates would determine market forces without any

intervention from government.

Managed Float: Exchange Rate System that lies some where between and freely

floating system.

Pegged: Involves a policy of pegging a currency’s value to another currency on to

same currency on to same other units of accounts.

4.6 Types of Foreign exchange Departments:

Foreign exchange & foreign trade are being routed in NCC bank Ltd. through the following:

1) Import

2) Export

3) Remittance

1. Import:

Import of merchandise essentially involves two things, bring of goods physically into the country &

remittance of foreign exchange toward the cost of the merchandise and services connected with

dispatch of the merchandise. The physical import is regulated by the ministry of commerce through

the chef controller of imports & export while Bangladesh Bank regulates the payments of these

imports through its exchange control department.

2. Export:

Export is vis-a-visa of import. The import and export normally made against latter of credit through

dependent upon the buyer & seller relationship. Detail procedure of import & export to be discussed

in ahead.

3. Remittance:

Remittance means transfer of fund. Latin the word “Remittance” we understand transfer of fund from

one place to another place with may be within the country or between two countries. Remittance and

which in effected between two countries is called foreign remittance.

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Dealing Room

-Management

-FC Fund Mgt.Dealing

-Cross Fcry

-US$/BDT

Forward-Dealing

NOSTRO

Reconciliation

Exchange position

Exchange Rate


4.7 Function of AD in Foreign Exchange & Foreign Trade of NCCBL:

The Authorized Dealer Bank has vital role in the foreign trade of a country. They provide the

finance needed to execute the transaction. They from the conduit pipe through which the

documents and money are exchange between the exporter and importer. They act as the

extended arm of the reserve bank of Bangladesh in a provision of the foreign exchange

regulation act 1947. For the banks foreign exchange dealing is a specialized activity with

good potential for profits.

FOREGN EXCHANGE TRANSACTION PERFORMED BY AUTHORIZED DEALER

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Foreign Trade Finance

Others Transactions

Foreign Exchange

Export L/C

Advising

Confirm

ECC (H)

ECC (P)

PC

BBL/C

FDBP

FDBC

IFDBC

Foreign Remittance

-Inward

-Outward (DD, TT, MT)

TC Sale & Encashment

Issuance

Dollar

Bond

Import L/C

Amend me

Advising

Confirming

PAD

IFDBC

LIM

CC (P)

LTR

FC Treasury Operation

Corresponding

Banking

Agency

Arrangement

F.c.Depo Private Accounts

F/C Accts

NFCD

RFCD

FC (WES)

Exchange House

Foreign Guarantee/Bond

F/C Cash

Sales/ Purchase

Notes & Coins


4.8 Import Section

4.8.1 Introduction:

Import is the process of purchasing goods from overseas. Import of goods into Bangladesh is

regulated by the ministry of commerce in terms of the import and export (control) act 1950, with

import policy orders issued periodically and public notices issued from time to time by the chief

controller of import and Export (CC in terms of importers, exporters and indentures (Registration)

order 1981. No person can import goods into Bangladesh unless he/she is registered with the CCI&E.

On the next step, the importer applies to Bangladesh Bank through authorized dealer for import

goods.

4.8.2 Types of Importer:

Import is the flow of goods and services purchased by economic agent located in one country from

economic agents located in another. Hence, import of merchandise essentially involves two things:

bringing of goods physically into the country and remittance of foreign exchange towards the cost of

the merchandise and service connected with its dispatch to the importer. In case of import, the

importers are asked by their exporters to open letter of credit so that payment against goods is

ensured.

Fig: Types of Importers

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Importer

Private SectorPublic Sector

(Govt. Org. & Corp.)

Commercial

(Finished product)

Industrial

(Raw materials, machineries etc.)

Actual Users


PARTIES INVOLVED IN FOREIGN EXCHANGE BUSINESS:

The Mechanics of Import and Export:

DOCUMENTATION:

A bill of loading, or, B/L, is issued to the exporter by a common carrier transporting

the merchandise. It will be described more fully later in this chapter.

A signed commercial invoice is issued by the exporter and contains a precise

description of the merchandise. Unit prices, financial terms of sale, and amount due from the

importer are indicated, as are shipping conditions related to charges, such as “FOB” (free on

board), “FAS” (free alongside), “CFR” (cost and freight), or “CIF” (cost, insurance, freight).

Insurance documents must be as specified in the contract of sale and must be issued

by insurance companies or their agents. The insurance may be issued to the exporter, who

must then endorse the policy to the importer, or it may be issued in the name of the importer.

Insurance must be of types and for risks specified in the letter of credit.

Packing lists may be required so that the contents of containers can be identified,

either for customs purposes or for importer identification of the contents of separate

containers. In addition, an export declaration prepared by the exporter to assist the

government in the preparation of export statistics may be required.

Shipping deadline: Most importers insist on a specified deadline or time interval by which the

shipment will be made. If the goods in question are particularly time-sensitive (such as products for

seasonal sale), remedies will be included in the sales contract for failure to meet time commitments.

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ImporterImporter ExporterExporter

1st: Exporter ships the goods1st: Exporter ships the goods

Importer PreferenceImporter Preference

2nd: Importer pays after goods received2nd: Importer pays after goods received

Importer Exporter

1st: Importer pays for the goods

Exporter Preference

2nd: Exporter ships the goods after being paid


Payment instructions: Which of the parties—the exporter or the importer—is to pay such charges as

freight, insurance, import duties, handling fees, taxes, etc., must be specified carefully in the sales

contract. The currency in which all payments are to be made benzene importer and exporter must also

b specified dearly. The payment terms state whether cash is to be paid in advance, whether letters of

credit are required, and what documents need to be presented against payment, consignments, or

payment on open account. These terms must be detailed, in the sales-contract. The following section

on key documents will elaborate on these payments term concepts.

Packaging and marking: Depending on the nature of the goods, proper packaging may be critical to

preserving and protecting items being shipped. Proper markings on the inner and outer boxes and

containers are needed to conform to customs regulations in countries. These markings typically

include clear and conforming invoices of the value of all items for import duty calculation and

payment purposes.

Warranties, guarantees, and inspections: Assurances regarding the performance or qualities

demonstrated by the goods from the exporter ma also be included in the sales contract. This may

include not only protection against product defects and proper performance, but protection against any

consequential damages from defective parts or performance. In some cases, the Importer may wish to

have the right to inspect the goods before paying (and even the right to inspect the goods while being

manufactured before shipping). These stipulations should of course be delineated in the sales contract.

4.8.3 Requirements of Import

In order to import a product from aboard, the importer is obliged to open L/C with a bank. To process

the import business, photocopies of following paper need to be attached with the application form:

An up-to-date Trade License

Import Registration Certificate

Membership Certificate of the Chamber of Commerce or the Related Business

Community

Tax identification Number (TIN)

Pro-forma Invoice or Indent

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CHART OF EXPORT-IMPORT FINANCING:

The Bank as the Import/Export Intermediary:

4.8.4 Letter of Credit (L/C)

Letter of Credit (LJC) is an agreement between an importer and a bank (Issuing bank). The bank to

the importer provides letter of credit in order to purchase goods from the exporter. The bank acts on

behalf of the clients to deal with the exporter and the clients make the payment after receiving the

goods accordingly. It is one of modern credit facility that provides assurance, that exporter of goods

will receive his payment from importer. Subject to the condition that the beneficiary exporter submits

documents conforming to the term of L/C. It contains a brief description shipping date and the

expiration date after which the payment will no longer be made. This type of letter is issued by

commercial bank.

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1st: Importer obtains bank’s promise to pay on importer’s behalf

Importer

Bank

2nd: Bank promises exporter to pay on behalf of importer.6th: Importer

pays the bank

4th: Bank pays the exporter

Exporter

5th: Bank “gives” merchandise to the importer

3rd: Exporter ships “to the bank” trusting banks’ promise.


4.8.5 Types of Documentary Letter of Credit

Documentary Credits are basically two types. It may be either

Revocable

Irrevocable

Revocable Credit

This type of credit can be revoked or cancel at any time without consent of, or notice of the

beneficiary. As per Article 8 (a) of UCPDC 5000 “A revocable Credit may be amended or cancelled

by the issuing Bank at any moment and without prior notice to the Beneficiary”. In case of seller

(Beneficiary), Revocable Credit involves risk, as the Credit may be amended or cancelled while the

goods are in transit and before the documents are presented, or although presented, before payment

has been made. The seller would then face the problem of obtaining payment. On the other hand,

Revocable Credit gives the buyer maximum flexibility, as it can be amended or cancelled without

prior notice to the seller up to the moment of payment by the issuing bank at which the issuing bank

has made the Credit available. In modem banking, the use of revocable credit is not widely spread.

Irrevocable Credit:

The Irrevocable Credit is a commonly used type of documentary credit. The Credit which cannot be

revoked varied or changed/amended without the consent of a parties-buyer (Applicant), seller

(Beneficiary), Issuing Bank and Confirming l3ank (in case of confirmed LC). As per Article 9 (a) of

UPCDC 500, an irrevocable Credit constitutes a definite undertaking of the issuing Bank, provided

that the stipulated documents are presented to the Nominated Bank or to the issuing Bank and that the

terms and conditions of the Credit are complied with. Irrevocable Credit gives the/seller greater

assurance of payments, but he remains dependent on an undertaking of a foreign bank, Irrevocable

Credit may be unconfirmed.

Special types of Letter of Credit (L/C)

Revolving letter of credit (L/C)

Transferable letter of credit (L/C)

Back-to-Back letter of credit (L/C)

Red clause letter of credit (L/C)

Green clause letter of credit (L/C)

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4.8.6 Features of Letter of Credit

It is a documentary credit.

It contains a directive for honoring a bill, a check of specific amount.

Banks work as representative of the importer.

It contains as representative of the importer.

It contains a definite time period.

It works as a contract among different parties to it. It bears a specific date

A bank issues it.

Advantages of Letter of Credit

To the exporter

A letter of credit is generally a very safe method of obtaining payment provided the

exporter complies with the terms of credit.

An irrevocable credit cannot be amended without his knowledge agreement.

A confirmed irrevocable undertaking of a bank generally in the exporter’s country.

A credit open in his favor can often lead to a credit being opened on his behalf in

favor of his supplier (to-back credit); alternatively the credit may be transferable.

Finance may be available by means of:- negotiating of his bills. The exporter has

indirect control of the document of title.

Better than collection as a means of securing payment.

To the Importer

Protect own position by stating the precise documentation required.

He should consider making a status report on the supplier and in the case of a large

order call for a performance bond.

Credit can be obtained from the exporter by insisting on the use of a term bill or

exchange.

He could also consider the use of a revocable credit, which would be particularly

appropriate where the goods are, dispatched in part shipments as soon as the first lot of

goods arrives. The importer can inspect them and if they are not up to quality, can cancel

the credit, hopefully before other shipments are mode.

The advising bank will only make payment when the exact document Specified has

been received.

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Once the specified documents which will usually be the documents of title are in the

hands of the advising bank then it will only be a matter of time before they are sent to the

issuing bank allowing him to collect the goods subject to their safe arrival.

Finance may be available by means of

Ordinary bank loan / overdraft

Loan against imported merchandise.

Acceptable credit.

4.8.7 Documentation required for opening L/C

In order to open a L/C, a client has to submit the following papers:

A photocopy of Membership Certificate from “The Chamber of Commerce” or the

Related Business Community

Import Registration Certificate (IRC)

Trade License VAT

Certificate of incorporation

Memorandum of article

Insurance cover note

IMP form LCA form

Import Policy Order

Current deposit A/C Income Tax Document

Contingency Liability Voucher

4.8.8 Procedure of L/C Opening and Payment

NCCBL identify whether the goods (will be imported) are in the import list, which is

selected by the government of Bangladesh.

Justify the clients credit worthiness by collecting social status• information form after

business or from after bank credit report.

Judge whether the importers goods bear good quality and more is a market of goods.

Secures the documents efficiently.

If every thing is OK, then the client proposes to fill up the prescribed form,

The sum percent of total amount of L/C should be deposited and get admonition

form.

Then it is registered in L/C register book.

Three copies of L/C are prepared.

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Two out of three is sent to advising bank and rest are sent to reimbursing bank with

order to pay claim to the negotiating bank.

Advising bank sent one copy with advice to ship to the importer.

Exporter submits necessary documents to the negotiating bank and receipts his/her

claim.

Negotiating bank sent two same letter of payment to the issuing bank and importer.

Simultaneously the negotiating banks demand his/her claim from reimbursing bank.

Payment System

At sight Payment Deferred Payment

4.8.9 Charges of L/C

L/C commission

VAT 15% OF L/C amount

Postage Tk 200

Miscellaneous tk 150

Stamp tk 150

SWIFT Charge TK.3000

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4.8.10 Parties involved in a Letter of Credit:

Importer/Buyer: Importer/Buyer is the party who opens L/C on behalf of exporter by issuing bank.

Opening/ Issuing Bank: Opening/Issuing Bank is the bank which opens or issues a L/C on

behalf of the importer. It is also called the importer's /buyer's bank.

Exporter/Beneficiary: Exporter/Beneficiary is the party in whose favor the UC is established.

Advising Bank: Advising Bank is the bank through which the UC is advised to the exporting country

& it may be a branch of the opening bank or a correspondent bank. It may also assume the role of

conforming and/or negotiating bank depending upon the conditions of the credit.

Negotiating Bank: Negotiating Bank is the bank that negotiates the bills & pays the amount to the

beneficiary. It has to carefully scrutinize the documentary credit before negotiating in order to see

whether the documents apparently are in order or not. The advising bank & the negotiating bank may or

may not be one & the same.

Reimbursing Bank: Reimbursing Bank is the bank, which would reimburse payment/claim to the

negotiating bank. It is to be nominated by the issuing bank.

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Conforming/ Reimbursing Bank

Importer/ Buyer

Opening Bank

Exporter/ Beneficiary

Advising Bank

Negotiating Bank


Circulation Cycle of L/C:

4.8.11 Import financing:

SOD (Importer)

Advance allowed in foreign currency for opening L/C to import good, fall under this type of lending.

This is also an advance of temporary period, which is also known as pre finance.

PAD (Payment Against Document)

Payment against lodgment of shipping documents of goods, imported through L/C fans under this

head. It is an in term advance connected with import and is generally liquidate shortly against

payment, usually made by the party for retirement of documents to release goods from customer

authority as payment has to be made within 7 days after the documents have been received and

negotiating bank may claim interest for making delay.

Loan against Imported Merchandise (LIM)

Advance allowed for retirement of shipping documents and release of goods, imported through LIC

taking effective control over the goods by pledge in to downs under bank’s lock and key fall under

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IndentersIndenters

Buyer (Importer)Buyer (Importer) Seller (Exporter)Seller (Exporter)

Reimbursing BankReimbursing Bank

Advising Bank

Confirming Bank

Negotiating Bank

Advising Bank

Confirming Bank

Negotiating Bank

Issuing BankIssuing Bank


this type of advance. This is also a temporary advance connected with import, which is known as

post-import financing would falls under the category “Commercial Lending”.

Loan against Trust Receipt (LTR):

Advance allowed for retirement of shipping documents would release goods imported through L/C

falls under trust with the arrangement that sale proceeds should be deposited to liquidate the advance

within a given period This is also a temporary advance connected with import, and known as post

import financing would and under the category “Commercial Banking”.

Major problems in the operation of L/C

Bank deals with documents not with goods, but sometimes goods are not as per

document.

Over invoicing by mist up conspiracy of buyer and supplier.

In advance of pre-shipment inspection supplier may inferior goods and for that the

bank faces some problem.

If the market price of the goods falls and the party maintains less the liquid money of

margin then the party would not release the goods.

In absence of insurance cover note with access risk.

In case of frequent change in tax, tariff duty and the exchange rate of Taka with

foreign currency.

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4.9 Export Section

4.9.1 Introduction:

Export is the process of selling goods ad services to the other country The bank is making vast

revenue by hailing export trade Export formality introducing Back-to-Back letter of credit facility and

boded warehouse system, which acts as catalytic force for the success of the industry As the low

initial capital requirement, short gestation period, high turnover ratio to investment and due to

availability of Back-to-Back UC facility, one could go into production within a period of four to six

months time Because of the prospect of quick turnover, the commercial banks also come forward to

finance these enterprises, of which NCCBL is the pioneer By 2000, the number of garments industry

had grown to more than 3500 registered units, which accounted for 73% of the total export earnings

of the country This impressive performance has been possible as the buyers, who find East Asia too

expensive as supply source, have been attracted by Bangladesh’s relatively low cost of production and

high quality proud According to Foreign regulation act, 1947, none can export by post and otherwise

than by post any goods either directly or indirect to any place outside of Bangladesh, unless a

declaration is furnished by the exporter to the collector of customers or to such other person as the

Bangladesh Bank may specify in this behalf that foreign exchange representing the full exporter value

of the goods has been or will be disposed of in a manner and within a period specified by Bangladesh

Bank. Payment for goods exported from Bangladesh should be received through an authorized dealer

in freely convertible foreign currency or in Bangladeshi Taka from a Non-resident Account. The

Export section deals with two types of credit that are as follows

Exporter letter of credit

Back-to-Back letter of credit

4.9.2 Exporter letter of credit

The other type of L/C facility offered by NCCBL is export. L/C. Bangladesh exporters a large

quantity of goods and services to foreign households. Readymade textile garments (both knitting and

wove) jute, jute-made products, frozen shrimps, tea are the main goods that the Bangladeshi exporter

to foreign countries. Garments sector is the largest sector that exports the lion share of countries

export. Bangladesh exports about 40% of its readymade garments products to USA, most of the

exporter who export through NCCBL are readymade garments exporters. They open against the

import L/C opened by their foreign importers.

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4.9.3 Export Documentation

In any business especially in export business documentation is one of the most important part.

Implementation of a business contract much depends on preparing and submitting the documentation

properly. In order to export any goods or services to overseas, the exporter should have affixed the

photocopies of the following documents for export:

Export Registration Certificate (ERG)

Bill of exchange

Bill of Lading /Airway Bill /Truck Receipt.

Commercial invoice Certificate Of Origin

Mate Certificate

Packing List

Insurance Coverage

Beneficiary Certificate where the exporter tells about the goods he/she wants to

export

Besides, more documents are required for some specific goods. Following are the documents under

this category:

Quality control Certificate (for food products)

GSP Certificate (for handicrafts products)

Consular Invoice (for Middle countries)

Inspection Certificate

The types and number of the documents are to be submitted to implement the export contract are

mentioned in the LIC. Banker’s negotiation of bill depends upon these documents.

4.9.4 Back-to-Back Letter Of Credit

Back to Back LIC is a type of pre—shipment finance by way of opening L/C in favor of a local or

foreign supplier for purchase of raw materials or the finished merchandise, as the case may be, to

execute export order. This type of L/C is only opened on the strength of an export order received by

way of an L/C or firm contract with or without realization of cash margin or collateral security

depending upon banker—customer relationship. In awarding this type of facility particular care shall

be taken to see that there remains adequate time to process the raw materials /intermediary or finished

products imported under 88 LIC to execute the work order.

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Features of Back-to-Back Letter Of Credit

Back to Back is an import L/C to procure goods I raw materials for further.

BTB is operand based on Export L/C / BTB is a kind of Export Finance. Export L/C is at sight, but

Back to Back L/C is at unasked scrutiny. No margin is required to open Back to Back L/C.

Necessary documents required by bank for opening BACK TO BACK L/C

Prescribed application and agreement of LIC duly stamped and signed

A set of LCAF(Letter Of Credit Authorization Form) duly filled in and signed

Pro-forma Invoice! Indent duly accepted

IMP From duly signed

Insurance Cover Note along with Money Receipt

Letter of authority to recover Bank’s charges from account

Necessary charge documents duly stamped and signed

4.9.5 Financing for Exporter

Pre-Shipment Export Financing

During the process of manufacturing the exportable garments, the exporter may face working capital

crisis, which causes late shipment of goods. To avoid this situation, banks may also finance (besides

BTB L/C facility) pre shipment export financing to the exporter in the from of packing Credit! Export

cash credit maximum 10% of the master! Export L/C to meet up overhead and factory expanses i. e.

salary, office rent, telephone bill, electricity bill.

The PC I ECC Allowed Earlier may be Adjust with Interest at the Time of Negotiation: After

negotiation of export bills, the documents are sent abroad usually to the Export L/C opening bank as

per instruction of Master L/C. The negotiation bank claim reimbursement of the proceeds from the

bank as mentioned in the Master LIC. The negotiation bank also advice the L/C issuing bank to remit

the proceeds to Head Office A/C maintained with correspondence abroad advice to negotiation bank.

Foreign Documentary Bills for Purchased (FDBP)

Finally, after manufacturing the garments the export of the same is made. The Exporter then submits

the related shipping documents to the bank for I collection. After receipt of the documents, the same is

duly scrutinized with the respective Export L/C and if found drawn strictly in conformity with L/C

terms and conditions a portion of balance documents value (after deduction of BIB, Term loan, FDR,

65 | P a g e


PC/ECC with interest, Local Commission, Foreign Commission, Bank Commission, Reimbursement

charges etc.) is negotiated if requested by the party.

Discrepant export documents must not be negotiated without prior approval of the Foreign Master

L/C issuing bank. The discrepancies may be classified as major or minor. There may be some

discrepancies, which are removable, and then exporters to be advised to remove the discrepancies.

Then documents are sent on collection (FDBP) basis for major discrepancies.

Local documentary Bills for Purchased (LDBP)

When export is done in local then importers opens a L/C in his/her bank (associating bank). Importers

import supplying accessories from his/her supplier (exporter) and it is done in deferred payment.

Importer pays the payment by giving L/C to exporter. But exporter needs cash payment from his/her

advising bank against the L/C. The advising bank finances the exporter 90% of the L/C value and

takes 10% of value of L/C as interest @15%.

4.10 Foreign Remittance

These remittance services are providing for exchange foreign currency. These services are as follows:

1. Foreign Demand Draft.

2. Traveler’s Cheque.

3. Money Gram.

1. Foreign Demand Draft: NCCBL accepts the charges for TOEFL, SAT, GMAT etc.

through Foreign Demand Draft. NCCBL opens Student Files to issue Foreign Demand Draft

following the permission of Bangladesh Bank. Before issuance of FDD, NCCBL asks the

students to fill up the TM from, which contains the following particulars-

Name of the student

Full 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

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2. Traveler’s Cheque: Traveler’s 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 buyer of T.C. needs not to be a customer 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 names of clubs,

societies and companies.

There is no expiry period for the T.C.

3. Money Gram: National Credit and Commerce Bank Limited is very happy to

announce to have joined hands with Money Gram Payment Systems Inc to serve expatriates

to send money back home quickly from anywhere in the word. Moreover, money can also be

sent quickly through Money Gram from Bangladesh to other parts of the World as is done

through the banking channel. At the moment we are concentrating on home remittances being

sent by the expatriates.

Money Gram Payment system Inc is a non-back provider of electronic money transfer service. Money

Gram is providing its customers a service of an unsurpassed quality and superior value. Money Gram

has over 25,000 Agent locations throughout the world. Persons anywhere require transferring cash

quickly, reliably, conveniently and at attractive prices to more than 115 countries can depend Money

Gram agents for the service.

Process:

Sender goes to the Money Gram agent location to transfer his money to

Bangladesh.

Sender initiates transfer by completing “send” format at Money Gram agent

location.

Sender gets receipt and notifies recipients of the transaction reference

number.

Recipients goes to the Money Gram agent (in Bangladesh it NCCBL)

location, fill out a “Receive” from to request funds and shows proper identification.

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Receiving Agent contact the Money gram transaction center (Head office of

NCCBL) to obtain authorization to pay recipient.

Recipients receive the funds.

Money Gram is one of the fastest ways to transfer money. Customers using Money Gram can send or

receive money usually within 10 minutes from anywhere in the world. At NCC Bank we provide the

Recipients immediate attention ad due care. We have made it a point to pay the Recipient within

minutes. The Recipients need not require having a bank account. We do not levy any extra charge.

We give a better exchange rate to the Recipient. The Recipient can approach any for the NCC Bank

branches at his convenience for payment.

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My observation

I. NCCBL Motijheel branch has SWIFT facilities. Very few banks in our country offer this facility. By using this modern technology Motijheel branch, provide fastest service on L/C operating to its client.

II. Per-shipment inspection certificate should obtain from the exporter of back to back L/C. Because it reduce it fraud and forgery in case of import against master export L/C, but all the time this pre-shipment inspection certificate are not wanted by the bank.

III. In case of Export L/C, sometimes insist to give their payments though their documents are found discrepant. In some cases, Bank has to give payment to these customers for different reasons. I think the bank should be as stricter as possible about giving payments against discrepant documents without hurting the customer.

IV. In many cases, the foreign banks want confirmations from other foreign banks with which this bank has correspondence. This proves the poor financial condition of our country. Banks should try to improve this situation.

V. The bank should try to arrange more training programs for their officials. Quality training will help the officials to enrich them with more recent knowledge of International Trade Financiering.

VI. The bank lacks a division for customer service, because there are customers who have no banking knowledge. So they need to be properly guided. Sometimes the officers are so busy they do not have enough time to spare.

VII. NCCBL is one of the largest private commercial Bank in our country. Therefore, it must think seriously to adopt on line banking in all branches.

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Recommendations

Attractive incentives packages for the exporters will help to increase the export and accordingly it will diminish the balance of payment gap of NCC Bank. The entire department should be well informed regarding their goals and objectives. It is essential to execute company objective into individual target. For the probable solutions of the identified problems ensure better process to NCC Bank in future, some necessary steps are recommended bellow on the basis of collected data, observation, expert staffs opinion and my knowledge and judgments NCC Bank should develop effective online banking system to compete with other commercial banks. If the entire banking system is fully online on computerizes system perfectly then they satisfy the customer by providing fast service with minimum service charge. NCC Bank should ensure networking system with its branches well then it could easily transfer data within short time. Due to lack of proper knowledge about the operation procedure and services provide to the customers by SWIRT certain customers are facing problem as they have to wait for certain time to get service. NCC Bank should give more attention to advertisement for creating more attraction among its customers, which is helpful to collect more deposits and increase investments scope. That’s why bank should give emphasis on advertisement in various media live TV, News Paper, Internet and Billboard. It was observed that the officers of NCC Bank have to spend more time in preparing vouchers; this can be avoided by the automation. Job description should be clarified and proper training facilities should ensure to improve the performance of bottom line management. The bank has the provision of internship but there is no organizes program for internship. Credit Card and Automated Teller Machine (ATM) is introduced because of present market demand of the customer and the educated customer now wants technology based banking but customers are confused about services. NCC Bank is to be concentrating in always monitoring the performances of its competitors in the field of foreign trade.

Bangladesh Bank should take initiative to form a high-powered committee consisting scholars and experts from different disciplines and professions such as academicians, economists’ bankers, lawyers, etc. to design an appropriate and useful legal framework for Islamic Shariah Based Banking. This type o committee may be helpful for the necessary correction of government policies in Islamic Banking.

NCC Bank Ltd. should focuses on their promotional activities on its marketable products

NCC Bank will have to encourage entrepreneurs, businessmen, rich people and government to come forward to established ancillary organizations.

They should also focus on the marketing aspects by informing the customers about its products and offering services charges.

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CONCLUSION

Today's business is very competitive and complex. To survive in the related sector the organization need competitive people and has to take some effective policy. Every country must have a plan for important role in economic activities. Bangladesh is no exception of that. Commercial Banks' financial development and economic developments are closely related. That's why the private commercial banks' are playing significant role in this regard.

The National Credit and Commerce Bank Limited (NCCBL) is one of the best Banks in respect of service, profitability and strength among the private commercial banks' in our country and also to play a catalyst role in the formation of capital market. National Credit and Commerce bank Limited bears a unique history of its own. The Bank has set up a new standard in financing in the Industrial, Trade and Foreign Exchange business. Its various deposit and credit products have also attracted the clients-both corporate and individuals who feel comfort in doing business with the Bank.

The National Credit and Commerce Bank Limited (NCCBL) is now been called a modern bank that undertakes all its operations at an international standard. Over the years, NCCBL has built itself as one of the pillars of Bangladesh's financial sector and is playing a pivotal role in extending the role of the private sector of the economy.

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BIBLIOGRAPHY

Money, Banking, and Financial Markets, Miller & Vanhoose, 2nd Edition. Investments Analysis and Management, Jones, 9th Edition.National Credit and Commerce Bank Limited Annual Report 2002-2006Circulars of Bangladesh BankDifferent published and unpublished journals of NCCBLInvestment Policy and Control Guideline, Lecture Materials, Official record

www.NCCbank-bd.com www.bangladeshbank.org.bd

IMPORT/ EXPORT : Howard R. GoldsmithFinancial Accounting

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http://www.bangladeshbank.org.bd/

http://www.NCCbank-bd.com/

3 # main report of nccbl

Economy & Finance

savings bank

private bank

bangladesh bank

word bank

term bank

national bank limited

scheduled commercial

private sector bank