Banking and insurance of Bangladesh

8/9/2019 Banking and insurance of Bangladesh

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PRESIDENCY UNIVERSITY

COURSE CODE: FIN307

COURSE INSTRUCTOR: MD. SAROWAR KHALED

SPRING 2010

Report on Banking and

Insurance of Bangladesh:

ProductsBank: Eastern Bank LimitedInsurance: Pragati Life Insurance

Submitted By:

Md. Abul Hasnat

Nusrat Ali

Shahriar hossain

Ashiqur Rahman

Farzana Akter Chowdhury

Date: 10th

April, 2010


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Bank Deposit Products

Interest calculated on daily balance

Interest is credited to your account every month

Competitive interest rate

Unlimited cash withdrawal

Available in all EBL Branches

No extra terms and conditions

Minimum Age: 18 years

Citizen of Bangladesh

EBL Campus - first time in Bangladesh a tailor made banking pack for students.

Campus Account : Under EBL Campus, yet another wonderful product that directly takes you

into the rewarding world of general banking. Its your very own, very special savings accountwith no hidden charges or restrictions, while giving you very attractive interest on daily balance,

Plus a super-smart plastic in your wallet!

Interest bearing deposit account

Interest calculated on the basis of daily balance

No hidden charges or restrictions apply with regard to interest payment


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No standing in bank branch queues for withdrawal of money

Leads you into the smart ... modern world of electronic banking- ATMs, POS terminals,

Kiosks etc.

You need to be a student

Minimum age 18 years

Valid identification document (generally student ID Card) required for opening the account

EBL high performance account is committed to make a difference. You will see your money

grow everyday. This account has the security and growth of a Savings account as well as the

convenience of a current account-making things easier for you.

Interest calculated on a daily balance

Minimum balance required: BDT 20,000

Unlimited cash withdrawal

Highest interest rate compared to other similar accounts

Available in all branches of EBL

No extra terms and conditions apply

Interest is paid twice a year

Minimum age: 18 years

Citizen of Bangladesh


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Under this scheme, minimum principal amount is Tk. 100,000 (Taka One Lac Only). There is

no maximum principal amount limit. Accounts in multiple of Tk. 100,000 (Taka One Lac

Only) can be opened.

EBL repeat must be kept for a term of 1 year (12 Months)/ 2 Years (24 Months) / 3 years

(36 Months).

EBL Repeat can be opened by EBL Account Holders only.

All payments, principal & interest, shall be paid to the above specified EBL Account only.

In case of premature closure, interest will be paid as per the following table:

Product No Interest Interest Rate

EBL Repeat 1 YearIn encashed before 3 Months on

interest will be paid

If encashed after 3 months,

interest will be as per prevailing

savings account rateEBL Repeat 2 Years

& 3 YearsIf encashed before 6 months, no

interest will be paid

If encashed after 6 months,

interest will be as per prevailing

saving account rate

In case of early encashment for any of the above tenor, prepaid interest in FD rate will be

adjusted from EBL Repeat principal amount.

Depositor has to pay income tax or any other tax the government may fix from time to

time, as applicable.

A system-generated advice will be provided to the depositor which is non transferable.

If there is any loan in the name of the depositor(s) with EBL, then EBL shall have the right

to adjust the loan amount from the deposit, which has been deposited by the Account

Holder under the scheme of EBL Repeat.

EBL Repeat Account Holders may take OD facility against EBL Repeat account (maximum

90% of the value).

Unless prior written notice is received by the Bank, the Bank will automatically renew the

deposit for the same period on the maturity date at the prevailing rate of interest.

EBL reserves the right to change/alter/ratify the terms and conditions mentioned here atanytime without prior notice.


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The name of the scheme is EBL Confidence

Any citizen of Bangladesh can open this account. This account can be opened in

the name of an individual only.

Under the scheme account(s) can be opened for a period of 3 (36 Monthly

Installments) / 5 (60 Monthly Installments) / 7 (84 monthly installments) / 10 (120

Monthly Installments) years in any denomination at multiple of Tk. 500.00 per

month but not exceeding Tk. 20,000.00 per month.

Depositor can choose any denomination of deposit per month at the time of

opening the scheme, which cannot be changed later on.

The rates of interest are: for 3 years: 9.00% per annum; for 5 years: 9.50% per

annum; for 7 years: 9.50% per annum; for 10 years: 9.50% per annum.

Any benefit from EBL confidence may come under purview of Income Tax of any

other levy as decided by the government of Bangladesh.

Monthly installments will be automatically realized from the Customer's Personal

EBL account linked with EBL Confidence.

Deduction of the monthly installments will start from the day of opening EBL

Confidence and all subsequent installments will be deducted on the same day of

following months. Sufficing available/cleared fund must be kept in the linked

account on or within next three days of due date to collect the deposits.

If sufficient balance (full value of installment) is not available in the corresponding

account for realizing monthly installment in time, Account Holder will have to pay

@ 2% on the installment arrear(s) as penalty.

In the event of failure to pay monthly installment(s) on or within next three days

of the due date, it will be the sole responsibility of the EBL confidence AccountHolder to settle the arrear installment(s) before or along with the next deposit

due through a written instruction to EBL.

If any monthly installment remains unpaid for four consecutive months, the

account will be closed automatically.

In case of premature closure of the account Tk. 300 (Taka three Hundred Only)

will be charged as closing charge.

In case of premature closure, the following will be applicable;

a.

Less than 1 year: self deposited amount without interest;

b. More than 1 year but less than 3 years: self deposited amount plusinterest @ prevailing savings account interest rate;

c. More than 3 years but less than 5 years: matured value of 3 years plusinterest @ prevailing savings account interest rate on self deposited

amount for fraction period;


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d. More than 5 years but less than 7 years: matured value of 5 years plusinterest @ prevailing savings Account interest rate on self deposited

amount for fraction period;

e. More than 7 years but less than 10 years: matured value of 7 years plusinterest @ prevailing savings account interest rate on self deposited

amount for fraction period.

If there is any loan in the name of the depositor with EBL, then EBL holds the right

to adjust the loan amount from the deposit which has been deposited by the by

the EBL confidence Account Holder for deposit under the scheme of EBL

Confidence.

These terms and conditions shall be governed by and construed in accordance

with the laws of Bangladesh and the customer and the Bank is hereby irrevocably

submit to the non-exclusive jurisdiction of the Courts of Bangladesh.

EBL reserved the right to change/alter/ratify the terms and conditions at any time

without prior notice.

Maturity Value Table

Installment

Amount

Pre-tax

Maturity after

3 Years

Pre-tax

Maturity after

5 Years

Pre-tax

Maturity after

7 Years

Pre-tax

Maturity after

10 Years

Tk. 500 Tk. 20,730.68 Tk. 37,994.91 Tk. 59,800.58 Tk. 100,328.37

Tk. 1,000 Tk. 41,461.36 Tk. 75,989.82 Tk. 119,601.16 Tk. 200,656.74

Tk. 2,000 Tk. 82,922.72 Tk. 151,979.64 Tk. 239,202.32 Tk. 401,313.48

Tk. 5,000 Tk. 207,306.80 Tk. 379,949.10 Tk. 598,005.80Tk.

1,003,283.70

Tk. 10,000 Tk. 414,613.60 Tk. 759,898.20Tk.

1,196,011.60

Tk.

2,006,567.40

Tk. 20,000 Tk. 829,227.20Tk.

1,519,796.40

Tk.

2,392,023.20

Tk.

4,013,134.80

Note: In case of there installment, multiple of Tk. 500 & Tk. 1,000, will follow the

matured value as specified in this table. For example, if installment is Tk. 2,5000 for 3years tenor maturity value will be Tk. 20,730 X 5 times (Tk. 2,500/500) and if

installment is Tk. 7,000 for 3 years tenor maturity value will be Tk 41,461 X 7 times

(Tk. 7,000/1000).


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Double Return of the initial deposit amount on maturity after six years (including tax).

Minimum opening amount BDT 100,000.

EBL Savings accounts is mandatory to open "EBL Just Double".

If any depositor intends to withdraw his/her deposit before maturity, the following rules

will apply:

No benefit including interest will be given for pre-mature encashment within oneyear.

If the deposit is encashed after one year (& before maturity date) the depositorshall get Interest Rate @ 8% up to the encashment date.

Customers can take secured loan/OD facility up to 90% of the initial deposited amount.

The lending rate will be tied up with the interest rate offered in EBL Just Double (i.e.

12.25%+3%). Existing fees/charges/regulations for availing the facility will be applicable.

Information that we should know

The name of the scheme is "EBL Secure Deposit Protection Scheme".

EBL Secure DPS is a monthly recurring savings scheme with full maturity value insured

in case of death of the depositor due to any cause (excluding Pre-existing

conditions/disability, Suicide, AIDS, assault or murder, war or warlike situation etc.

details of which is available in the master group insurance policy).

Any citizen of Bangladesh aged 18-55 years can open this account.

This account can be opened in the name of an Individual only.

To open EBL Secure, the applicant must have a Current/Savings account at EBL.

Under this scheme, accounts can be opened for a period of 5 Years (60 monthly

installments) only.

Monthly installments can be opened in any denomination of Tk. 500 per month but

not exceeding Tk. 13,000 per month in total.

A person can open multiple deposit schemes but the total monthly deposit shall not

exceed Tk. 13,000 per month.

Depositor can choose any denomination of deposit per month at the time of opening

the scheme which can not be changed later on.

Any benefit from EBL Secure my come under purview of income tax or any other levy

as decided by the Government of Bangladesh.


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Monthly installments will be automatically realized from the customers personal EBL

account linked with EBL Secure.

The deduction of the monthly installments will start from the day of opening EBL

Secure and all subsequent installments will be deducted on the same day of following

months.

If sufficient balance (full value of installment) is not available in the corresponding

account of the applicant for realizing monthly installment in time, accountholder willhave to pay @2% installment arrear(s) at the time of realization of the next

installment.

If three consecutive monthly installments are not paid then the scheme will be

closed and the account value will be transferred to customer CASA deducting

necessary insurance fees and taxes.

In-case of pre-mature closure of EBL Secure, Tk. 1,000 (One Thousand Only) will be

charged as Closing Fee.

If there is any loan in the depositor with EBL, then EBL holds the right to adjust the

loan amount from the deposit which has been deposited by the EBL Secureaccountholder for deposit under the scheme of EBL Secure.

EBL has entered into an agreement with American Life Insurance Company,

Bangladesh where EBL Secure DPS maturity value is assured; the depositor shall be

bound by the terms and conditions stated in the master group insurance policy and

EBL shall not be liable for any claim declined by American Life Insurance Company,

Bangladesh.


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Maturity Value Table

Monthly

Deposit

Amount

Pre-tax Maturity

Value at the end of

5 Years (60

Monthly

Installments)

Monthly

Deposit

Amount

Pre-tax Maturity

Value at the end of

5 Years (60

Monthly

Installments)

500 36,973 7,000 517,623

1,000 73,946 7,500 554,596

1,500 110,919 8,000 591,569

2,000 147,892 8,500 628,542

2,500 184,865 9,000 665,515

3,000 221,838 9,500 702,488

3,500 258,811 10,000 739,461

4,000 295,784 10,500 776,434

4,500 332,757 11,000 813,407

5,000 369,730 11,500 850,380

5,500 406,703 12,000 887,354

6,000 443,677 12,500 924,327

6,500 480,650 13,000 961,300


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Bank Loan Products

Loan Amount ranges from BDT 50,000 to BDT 1,000,000 ( or 12 times of gross

salary, whichever is lower).

Repayment tenure of 12, 24, 36, 48 or 60 months.

Payment option available starting after minimum 6 months of disbursement of

loan.

Early full and final settelment allowed.

No security required.

No hidden charges.

Age : Minimum 22 years, Maximum 60 Years

Professional Experience:

Salaried Executives : 1 year of experience

Self employed Professionals: 2 years of experience

Minimum monthly income:

Salaried Executives : minimum BDT 15,000 / month

Self employed Professionals: minimum BDT 20,000 / month

Loan amount ranging from minimum BDT 50,000 to

maximum BDT 150,000 (or 10 times of gross monthly

income, whichever is lower)

Repayment tenure of 12,24 or 36 months

Absolutely no processing fees

Special discount in interest rate


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Age : Minimum 22 years, Maximum 60 Years

Professional Experience:

Salaried Executives : Salaried Executives: 1 year of

experience with minimum 6 months employment with

current employer

Self employed Professionals: 1 years practice in theprofession

Business: 2 years involvement in current business

Minimum monthly income:

Salaried Executives : minimum BDT 15,000 / month

Self employed Professionals & Businessmen: minimum

BDT 20,000 / month

Loan amount BDT 500,000 75,00,000 or 50 times of applicants GrossMonthly Income, whichever is lower

Repayment tenure 3 years to 20 years

Attractive Interest rates based on loan amount:

Loan Amount Interest Rate

BDT 5 Lac to 15 Lac 14.00%

BDT 15 Lac+ to 25 Lac 14.25%

BDT 25 Lac+ to 40 Lac 14.50%

BDT 40 Lac+ to 75 Lac 15.00%

Loan Take-over facility with attractive interest rate option (1% less than

existing other Home Loan but not less than 13.5% per annum)

Processing fee 1.25% of the loan amount for the fresh applicants and 0%for the take-over loans

Loan up to 80% of the property value

Advance/Partial Prepayment - Anytime and any amount payment facility

available, fee is 1% of the Advance/Partial Prepayment amount.

Additional Loan Top up facility available

Bangladeshi citizen within age range 22 Years 57 years

Length of Service/Business:Salaried Executives: Minimum 3 year of experience with 6 month


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SME Loan Products

Any legal business purpose, loan facility minimum BDT 200,000 maximum BDT

950,000

No collateral security required

Loan tenure 1 month to 6 months

Single shot payment at maturity but interest will be realized on monthly basis

Partial payment and early payment allowed- no additional fee required

Any successful enterprise with minimum two years in same or relevant business

can apply for the loan

Business cash flow to support the proposed loan in one shot

Necessary documents of business required

Bank account in the name of the enterprise or entrepreneurs

Personal guarantee required

Any legal business purpose, loan minimum BDT 6,00,000 maximum BDT

50,00,000

Without land/building mortgage

To be repaid within maximum 60 months.

Loan repayable in monthly installments

50% of the loan amount in the form of fixed deposit is needed.

Any successful enterprise minimum one and a half years in same or relevant


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business can apply for loan.

Business income to support the proposed loan installment

Necessary documents of business are required

Bank account in the name of enterprise or the entreprenuers.

Any business purpose loan from Tk. 200,000 to Tk. 990,000

To be repaid within maximum 24 months (Next loan is repayable within 60 months)

No requirment for collateral security

Loan repayable in equal monthly installment

Any sole proprietorship, or private limited companies having minimum 1.5 years of

successful business operation

Monthly cashflow to support the proposed loan installment

2 personal guarantee

Any business purpose loan from Tk. 500,000 to Tk. 5,000,000

To be repaid within maximum 36 months (Next loan is repayable within 60

months)

Collateral security required along with charge on business assets

Loan repayable in equal monthly installment

Any sole proprietorship, partnership, or private limited companies having

minimum 3 years of successful business operation

Monthly cashflow to support the proposed loan installment


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Credit facility up to BDT 20,000,000 to any legitimate import business

Nil margin LC facility

No requirement of land/building mortgage

Post import facility up to 6 months

30%-40% of total limit in the form of FD as collateral required

Over Draft facility to support day to day general expenses

Any legitimate business with three years of operation and at least one year experience in

import business

Necessary import related documents

Business cash flow to support repayment

Monthly installment

Credit facility up to BDT 300,000 (three lac) in any

legitimate business

No requirement of land/building mortgage

Yearly interest rate is 10%, which is the lowest in the

country

Repayable in 18 months

Facility is only for Women Entrepreneurs

Any legitimate business with at least two years of

operation

Business Cash Flow to support repayment


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Monthly installment

Minimum account opening amount BDT 100,000

Minimum deposit requirement for interest earning BDT

100,000

Daily interest bearing and half-yearly interest paying

account

Free Monthly Statement for the Current Account and

Free Half-yearly Statement for the Shubidha Account

No Ledger Fee if the Shubidha Account average balance

is BDT 100,000 or more; incase of amount less than that

a semi-annual ledger fee of BDT 300 will be applicable

24-hour money withdrawal facility at any VISA ATM

No Intercity Transaction Fee Up to BDT 10,00,000

Any EBL Branch Banking Facility

Internet Banking facility

Evening banking facility at selected EBL branches - you

can deposit and withdraw money from 6 p.m. to 8 p.m.

at these branches

Any legitimate business entity - sole proprietorship, partnership or private limited

company, with valid trade license and other documents as per Bangladesh Bankrequirements, can open EBL Shubidha.

There are other products like:


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y EBL VISA Platinum Cardy Simple Credit Cardy Lifestyle Cardy Cool Cardy EBL Travel Cardy Matribhumi Remittance Account

Insurance Company

Pragati Life Insurance Limited is a public limited company registered with the Registrar of JointStock Company and licensed by the Controller of Insurance, Govt. of Bangladesh to transact life

insurance business in Bangladesh. The Board of Directors of Pragati Life is comprised of a groupof dedicated and renowned business entrepreneurs of the country and have already proven their

commitment and services in General Insurance through Pragati Insurance Limited. Now, they are

committed to do the same with Life Insurance through Pragati Life Insurance Limited. Here youwill get professional and expert services with full commitment. You will also be pleased to knowthat we have Managing Director who is an actuary. With all these resources in hand we are able

to provide you efficient service and tailor-made product to meet your needs. Our attention isalways focused on the individual client and his special needs. Furthermore, we are continuously

developing IT aids and expert systems to carry on our life insurance business efficiently. We areavailable to deal with all your questions concerning these new products. And as we have entered

into a new millennium, we will keep you informed about new trends and developments in the lifeinsurance industry worldwide.

The Products of Pragati Life Insurance are described as below:

MOTOR INSURANCE POLICY:

According to Motor Vehicles Act 1939 the owners of vehicles must insure their vehicles against

liability to third party for death or loss injury and damage to third party property.


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Two types of covers are granted:

a) Act Liability policy/public Liability :-This policy provides indemnity to the insured against

legal liability for claims by the third party in respect of accidental personal injury &/or damage

to any property of third party property covered by the insured vehicles in public place as is

necessary to meet the requirements of section 95 of the Motor Vehicles Act 1939. Increased

limit of liability is also provided in respect of public liability policy.

b) Comprehensive Insurance Policy:- This policy provides cover against loss or damage to the

insured vehicle by accidental external means or malicious act, Fire, External Explosion, Lightning

Self ignition, Burglary, Housebreaking and Theft. Also whilst in transit by Road, Rail inland

waterway, lift, elevator or air. Subject to the limitations mentioned in the policy and liability to

public risks including Act liability.

ENGINEERING INSURANCE

Company also underwrites following special types Engineering insurance:-

1. Erection All Risks;

2. Marine-cum-Erection All Risk;

3. Contractor All Risks;

4. Boiler Insurance;

5. Deterioration of Stock

6. Machinery Breakdown

7. Computer and Electronic Data Processing Machineries.

The salient features in respect of the above Insurance are given hereunder:-

MEDICAL INSURANCE:

OVERSEAS MEDICLAIM (OMP) INSURANCE:

Overseas Medic aim is Medical and Sickness insurance arising when the insured is

traveling/staying outside Bangladesh.

The benefit payable under the insurance will be paid directly to the insured person who

sustains the loss or at the request of the insured be paid directly to the hospital or individual

rendering the services. Coverage is on month basis, with the premium being calculated on

rating subject to age and plan.

Pragati Insurance Limited issues two types of overseas Medic aim Insurance viz.

(1) Business and Holidays and

(2) Employment/Studies.

MARINE CARGO INSURANCE

Bangladesh Marine Cargo Insurance policy is in line with the recommendations of the United

Nations Conference on Trade And Development (UNCTAD) making the revised wording of the

Institute Cargo Clause (ICC) mandatory from 31-3-1983. With the introduction of new policy


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form the century old policy form and perils have been withdrawn and replaced by ICC(A), ICC(B)

& ICC(C) clauses respectively.

The new ICC apart from being worded in simple English, have more conceptual clarity in

approach. The basic approach is to define the terms and conditions in such a manner that the

scope for disputes is minimized, whereas new ICC(A) provides "All Risks" cover with named

exclusions, the new ICC(C) covers the named risks with exclusions. The new ICC(B) is an

intermediate cover with extended named risks and named exclusions.

The nature of the risks covered under the THREE Institute Cargo Clauses are drawn as under.-

RISKS

Loss or damage reasonable attributed to : ICC(A) ICC(B) ICC(C)

Fire or explosionCovered Covered Covered

Vessel or Craft being stranded, grounded. sunk or capsized.Covered Covered Covered

Overturning or derailment of Land conveyance.

Covered Covered Covered

Collision or contact of vessel, craft or Conveyance with any external

object other than water.

Covered Covered Covered

Discharge of Cargo at port of distress.Covered Covered Covered

Earthquake, volcanic Eruption or lightningCovered Covered

Not-

Covered

Loss or damage caused by:

General Average SacrificeCovered Covered Covered

JettisonCovered Covered Covered

Washing overboardCovered Covered

Not-

Covered

Entry of sea, Lake or river water into vessel, Craft hold

Conveyance, Container, Lift Van or place of storage.

Covered CoveredNot-

Covered

Total loss of any package lost overboard or dropped whilst Loadingto or unloading from vessel or craft.

Covered Covered

Not-

Covered

Other risk such as Breakage, Scratching, Splitting, hooks, Holing,

tearing, bursting, loss of contents, damage to the containers, Fresh,

rain water damage, Heating and extraneous substances, theft,

pilferage & non-delivery & other risks not specially excluded in the

ICCA" clauses.

Covered CoveredNot-

Covered


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The Company also grants wider cover like Theft, pilferage and non-delivery (TPND) with ICC(C)

on payment of additional premium as per tariff.

Anyone or all the perils mentioned below may be obtained with ICC(B) on payment of

additional premium.

Breakage, Scratching/Splitting, hooks, holing, bursting, tearing, leakage, Fresh, rain water

damage, theft pilferage & non-delivery.

The following additional perils are automatically covered under the new Marine Policy :-(1) 60 days cover at sea port from the date of discharge from the ship under "A" "B" & "C"

(2) Inland transit by Road, Rail &/or Berge.

(3) WAR & SRCC covers are available on payment of additional premium.

MISCELLANEOUS/ACCIDENTS INSURANCE:

Common types of miscellaneous insurance covers Theft, Burglary, Cash-in-Transit, Cash-in-safe,

Fidelity Guarantee, Public Liability, Product Liability, Personal Accident; Household

Comprehensive Insurance is available on attractive rates and terms. Rates and terms are

quoted on request. Besides, Group Accident covers are available in addition to individual and

personal accident policy. Travel Insurance forms part of this category.

Their Other Products are:

1.Individual Product Line2.Group Insurance3.Health Insurance4.Pragatibima5.Islami Deposit Pension Scheme (IDPS)

Referencey Pragati Life Insurance Company, Designed & Hosted by Webmaster of Pragati Life Insurance Ltd.

2005-2006,Pragati Life Insurance Ltd. All rights reserved. Retrieved on April 9, 2010 from

Http//: www.pragatilife.com

y Eastern Bank Ltd. Copyright Eastern Bank Limited. Authorized financial services providerRetrieved on April 9, 2010 from Http//: www.ebl-bd.com

Banking and insurance of Bangladesh

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