Overall Banking System of NCC Bank Limited,BangladeshExecutive
Summary National Credit and Commerce Bank Limited (NCC Bank) is a
well established Bank in Bangladesh. It is developing and expanding
its branches in the country with innovative products and banking
services, to gain greater acceptance as an effective and efficient
means of intermediation and to contribute to the overall wealth
creation.This report is prepared as a requirement of the internship
phase of BBA program of Northern University of Bangladesh. This
report focuses three months working experiences in National Credit
and Commerce Bank Limited, Foreign Exchange Branch. This report
will give a clear idea about the activities and operational
strategies of National Credit and Commerce Bank Limited.The whole
working process of NCCBL is divided into 3 sections-(1) General
Banking, (2) Credit Section, (3) Foreign Exchange. Here first
chapters basically discuss about the background of the report,
objectives and methodologies used in preparation of the report and
limitation faced at preparation. The main objective is to identify
the various activities provided to customers by National Credit and
Commerce bank Ltd. and descriptive analysis about their operation.
Next I have tried to concentrate on Internship duties and banking
function (general banking, loan and advances and foreign exchange
business) and marketing part on the basis of some specific
topics.The objective of the internship program was to familiarize
the student with the practical implementation of the knowledge
provides the theoretical aspects of the practical life. It is a
pleasure for me to submit the internship report titled Overall
Banking System of the National Credit and Commerce Bank Limited
While preparing this report; I have tried to gather as much
information as possible. 1.1 Introduction: Bachelor of Business
Administration (BBA) is a professional course. The course is
designed with an excellent combination of practical and theoretical
aspects. After completing BBA certain times is preserved for
internship. As a student of BBA with the requirement of my course I
was assigned to National Credit and Commerce Bank limited (NCCBL)
to Elephant Road Branch, Dhaka for my internship. However, I was
very much interested to know how to develop banks. So I chose the
research topic as Overall Banking System and Performance Analysis
of NCC Bank Ltd. They intend to ensure the trust and confidence of
the customers through focused customer orientation, quality of
service and state-of the art technology, transparency in dealing
and adopting the best practices of Corporate Governance, achieving
excellence in all the endeavors to create value for all the
stakeholders. The significant challenge posed before them is
the maintenance of the quality of business simultaneously with
its information and business consolidation processes. This report
is prepared based on the: topic Overall Banking System and
Performance Analysis of NCCBL.Due to this practice the remittance
department of NCC Bank has been growing to provide a good
participation in the profitability of the Bank. Basically, this
report is highlighted on overview of NCC Bank Ltd, Structure,
Analysis, Present status, Performance of NCCBL, Deposit
Mobilization, Utilization of Fund, Foreign Exchange, Own
Experience, Recommendation and conclusion. 1.2 Scope of Study his
internship program gives me a great scope or opportunity for gather
experience and knowledge in several areas of banking by which I can
evaluate or expose myself. During:-e first few week of my
internship period, I was able to communicate most of the employees
of the bank. During the first month I was able to accustom and
adapted myself with the working environment of NCC Bank
Limited.While preparing this report, I had a great opportunity to
have an in depth knowledge of all the banking activities practices
by the NCC Bank Ltd. It also helps me to acquire perspective of a
leading private banking in Bangladesh. In term of Bank we can
easily understand that the financial institution deals with money.
1.3 Objectives of the Study Though the main objective is to prepare
myself in such a manner as though I can equip myself with the
practical field as well as I will be able to know the different
aspect of the banking sector and to evaluate how a bank is
performing in Loans and Advance sector. In addition, the study
seeks to achieve the following objectives: o To know the
organizational framework of the bank o To know the work environment
and organizational behaviors of the bank o To get through all the
departments of the bank and observe the actual work done o To find
out how the general banking system works o To see how the loans and
advances are provided to the borrowers o To acquire knowledge about
the foreign exchange system of the bank o To analyze the growth of
deposits in the bank
o To analyze the growth of advances in the bank o To analyze the
growth of investments in the bank o To compare the financial
performance among several years of the bank and with other banks
1.4 Methodology In collecting the necessary data, a special care
has been taken so that all the variables may not affect the
objectives of the study. Data needed for conducting the study have
been collected from the following sources. a) Primary source and b)
Secondary source Primary sources The primary data in this report
mainly includes surveying the different departments of the Bank. It
includesScheduled survey Observation while working in different
desks Informal discussion with professionals Secondary sources
Secondary sources are the permanent and printed sources of
information. This areAnnual reports of NCCBL Desk report of related
department Brochures of National Credit and Commerce Bank limited
Different reference books Study of related books, seminar paper,
training papers, Publication of statements 1.5 Rationale of the
Study
The word bank refers to the financial institution that deals
with money transaction. Commercial banks are the primary
contributors of the economy of this country. On one hand they are
borrowing money from the locals and on the other hand lending the
same to the locals as loans and advances. So the people and the
government are very much dependent on banks. Moreover, banks are
profit earning concerns, as they collect deposits at the lowest
possible cost and provide loans and advances at higher rate. The
difference between two is the profit for the bank. This report
basically deals with the loan and advance management of National
Credit and Commerce Bank Limited (NCCBL) covering the areas like
General Banking, Loan and Advance, Foreign Exchange, Remittance,
Financial Performance, Online Banking, etc. 1.6.Limitations of the
Study 1. Although I have enjoyed full co-operation from employees
of NCCBL and they also gave me much time to prepare this report
properly in the way of my study, I have faced some difficulties,
which can be termed as limitations. They are as follows: 2. It
should be certainly mentioned that time constraint is the first
limitation of the study. Only three months is not sufficient for
gathering perfect knowledge on the vast area of bank. 3. In some
cases, they could not be able to supply my topic related data for
preparing a more in depth research study. Office secrecy was one of
the most important problems. Disclosing of some information was
restricted. 4. In case of secondary data collection, there was very
little secondary information. There were few support books,
reports, journals, etc. moreover, the branch office had very little
of this information. Thats why bulk of it had to be collected from
the head office. As the officers were very busy with their day to
day work, they could provide very little time 2. 1 History of NCCBL
National Credit and Commerce Bank limited came to reality through
the National Credit limited. Prior to conversion into a scheduled
commercial bank, National Credit Limited(NCL) was incorporated as
an investment company on 18th November 1985. It made its January on
25th November 1985 at its registered office and first branch at 7-8
Motijheel Commercial Area, Dhaka-1 000 with initial authorized
capital of 1k. 30 crores. It was mostly involved in collecting
suitable resources and making profitable investments. But within a
very short period of time this investment company turned into a
scheduled commercial bank. It was turned into a bank because it
faced many restrictions both collection and disbursement of funds
while it was operating as an investment company. While this
turnover was going on
all types of transactions were closed for about fourteen months
from April 22, 1992. After that, with the permission from the
government and Bangladesh Bank, NCL was converted in a full fledged
commercial bank and started its banking operation on 17thMay 1993,
in the name of National Credit and Commerce Bank Limited. It has
been registered under the company act-1913, as a private commercial
bank with paid up capital of Tk.39 crores to serve the nation along
with 16 branches. However, NCCBL runs as per company rule, free
from government intervention. Year 1994 & 1995 were the full
operation year of the bank. During this period gave emphasis on
considering the affairs of the institution as well as expansion of
business work.During last 13 years if its operation NCCBL has
acquired commendable reputation by providing sincere personalized
service to its customers through a technology based environment.
2.2 Objectives of NCCBL The main objective is to maximize profit
through customer satisfaction which very much reflects the idea of
marketing concept. NCCBL has been ensuring maximum profit by
avoiding best and improved customer service along with other
corporate objectives mentioned below: v To provide excellent
customer service to its clients, so that they choose NCCBL first
for their banking. v Ensure high return on investment and services
with different service products. v Making profitable investment and
grow in annual profit management. v To remain as the market leader
through diversification of business and automation of banking
operations. 2.3 Vision The purpose of the bank is to become The
Bank of Choice in the communities we serve. We accomplish this by
offering to our customers the financial services they expect while
providing a return to our owners. In accomplishing this mission,
the bank has now been free from all the natures of a problem bank
through fulfilling all the conditions set by the central bank. We
proudly say: NCCBL is profit-making and problem-free. 2.4 Mission
Philosophically, a bank is a financial institution, which accepts
depositors money for safe-keeping and contracts with the depositors
to lend this money at interest to inviduals who are in need of its
use and who can give ample security that the loans will be paid.
From the profits made from lending money at interest the banker
agrees to pay the legitimate depositors a fixed sum of interest
besides safe-guarding the deposits. Moreover the bank follows the
followings as its mission:
Maximize the profit within the shortest possible time Try the
best level to satisfy customers Establish NCCBL as the best
performing bank in the country. 2.5 Products & Services The
Bank has wide range of product line to suit the need of the strata.
In addition to convention product both Asset and liabilities sides
the Bank offers special credit products for its customer. This
areConsumer Financing Lease Financing Small loan Festival loan
Housing loan Long-term & short term loan financing Syndication
Real Estate & Civil construction SME & Agro based. 2.6
Hierarchy of NCCBL Organization Structure of Foreign Exchange
Branch Branch Network of NCCBL During the year the bank opened 08
branches which raised the total number of branches to 54.The bank
has already taken steps to open 06 (Six) more new branches in 2007.
3.1 Deposit Mobilization General banking department is the heart of
all banking activities, especially to mobilize the deposits. All
other departments are linked with this department. It plays a vital
role in deposit mobilization of the branch. National Bank Limited
provides different types of Accounts, locker facilities, special
types of saving scheme and flexibilities of remittance under
general banking. This department performs the general function of
banking. In National Bank Ltd. For performing the operation of this
department a good number of people are allotted for the purpose of
Deposit Mobilization. The general banking department of National
Bank (Foreign Exchange Branch) consists of the following section:
1. Dispatch section 2. Accounts opening section 3. Cash Management
section 4. Remittance section 5. Deposit section
6. Clearing section 7. Credit Card section 3.1.1. Dispatch
section Dispatch division operates the function of dispatching the
intimation letter to the client, IBCA, IBDA, and OBC to the other
banks for internal transaction with bank. The officer engaged in
the dispatch division maintains two types of register books to
entries for record of these documents particulars. These two types
of register books are: 1. Inward mail registers. 2. Outward mail
registers. 3.1.2. Accounts opening section Opening Different Types
of Accounts Account opening is the very first and preliminary job
for a bank. As NCCBL does not make any business contract unless
having an account on their bank, so account opening is the most
important work of the general banking division. (I)Current Deposit
(CD) Account (A/C): Any businessman, firm, limited companies, local
bodies, corporate bodies, etc. can open a current A/C with NCCBL.
Current deposit is 100% demand deposit and account holder can
deposit/withdraw his/her deposits frequently without any limit.
Requirements for openining CD A/C: Requirements may vary from types
of the organization, such as: Individual Personal ID Copy of a
Passport or ward commissioner certificate Any introducer of that
respective bank Fill up Know Your Customer (KYC) form. Joint Owner
Trade license Proprietors ID Any introducer of that respective bank
Fill up Know Your Customer (KYC) form.
Limited Company Memorandum of Articles (MOA) Association of
Articles (AOA) Certificate of Incorporation. Features of CD A/C: CD
accounts have the following features: (1).Submitting Tk.5000 to
open a current account. (2).It is understood that the balances at
credit will not less than Tk.5000. A minimum charge Tk. 100 must be
paid on all operative accounts. (3).Only the form of cheque book
supplied by the bank should be used. Cheques materially altered
will not be paid unless such alteration bears the signature of the
drawer in full. (4).The account holders must give the same
signature for withdraw money that deposited in the bank previously.
(ii) Saving Bank Deposit (SB): Any individual person, local bodies,
club, society, association house wife, student, non-profitable
organization, etc. can open a saving bank deposit account with
NCCBL. Savings bank deposit is both time and demand deposit, of
which 10% is demand and 90% is time deposit and the account holder
can withdraw his/her deposits twice in a week up to a certain
limit. Requirements for opening SB A/C: Requirements may vary from
types of the organization, such as Individual Personal ID Copy of a
Passport or ward commissioner certificate Any introducer of that
respective bank Nominees photograph Fill up Know Your Customer
(KYC) form. Joint Owner Trade license Proprietors ID Any introducer
of that respective bank Fill up Know Your Customer (KYC) form.
Limited Company
Memorandum of Articles (MOA) Association of Articles (AOA)
Certificate of Incorporation Features of SB A/C: SB accounts have
the following features: 1) Any matured but not unsound mind can
open a savings account. 2) One account holder can transfer his or
her account in the branch to another branch without any cost if he
or she interested. 3) Minimum deposit Tk 2,000 to open an A/C 4) SB
A/C offers 6% interest charges semi-annually to the depositors
account. 5) One time at least within 6 months an A/C holder must
transaction with the bank to continue the A/C. 6) Charges Tk.250
for close (iii) Fixed Deposit Account (FDR): Any individual person,
businessman, firm, limited companies, local bodies, corporation,
corporate bodies, etc. can open Fixed Deposit A/C with NCCBL. FDR
is 100% time deposit and A/C holder can usually withdraw his/her
deposits after maturity of the fixed deposit. However, depositors
of FDR can withdraw their deposits before maturity if they desire.
FDR is also known as time liabilities or term deposits. Higher rate
of interest is given on this type of deposit. Fixed deposits
generally constitute more than half of the total deposits with the
bank. Requirements for openinR FDR: Minimum requirement Tk.50,000
to make a FDR Above Tk.5, 00,000 in case of FDR, a report regarding
FDR must be sent to Bangladesh. Interests & other charjies:
Time Interest Rate 1 month 8% p.a. 3 months 11.50%p.a. 6 months
11.75% p.a. 12 months 12%p.a. Government tax: Government will
charge 1 0% income tax on the amount of income from interest.
(iv)Short Term deposit (STD): Any individual person, businessman,
firm, limited companies, local bodies, corporation, corporate
bodies, etc. can open a short term deposit account with NCCBL. STD
is 100% time deposit and an account holder can withdraw his/her
deposits with prior notice to the bank. For that reason STD is also
called a Special Notice Deposit A/C. (v) Special savings Scheme
(SSS): Any individual person can open a special savings scheme
deposit account with NCCBL for a tenure of 5/10 years with monthly
deposit of Tk.500 and multiple of Tk.500 up to Tk.10000. SSS A/C is
100% term deposit and account holder can withdraw his/her deposits
after maturity of SSS/A/C. (vi) Special deposit Scheme (SDS): Any
individual person, businessman, firm, limited companies, local
bodies, corporation, corporate bodies, etc. can open a SDS A/C with
NCCBL. SSS is a term deposit with payment of interest is payable on
monthly basis. An account holder can withdraw his/her deposits
after maturity of SDS A/C. 3.1.3. Cash management section: Cash
management section of any bank plays vital role in general banking
department because it deals with the most liquid assets. The proper
management of this section entails overall effectiveness of any
bank. NBL has a very equipped cash section. This section is
responsible for the following function: 1. Receipt of deposit. 2.
Making payment to the customers. 3. Management of vault of the
branch. 1. Receipt of depositThis section receives deposit or funds
from the customer and the collection procedure as follows: At first
the amount is counted and if ok then verified the purity of the
note paid if there is any confusion of the teller.
word over the deposit slip. At last the receiving officer/
teller signed the deposit slip and by the sign of the authorized
officer the deposit of fund finished in favor of a customer. In
case of received of clearing cheque, the cheque is scrutinized at
first whether the cheque is authenticated as per the NI Act. If
satisfied then a crossing is marked so that this cheque never been
enchased over the cash counter Then the amount is kept apparently
deposited in the customers account and the cheque proceeds to the
clearing house accordingly. 2. Making payment to the customer:The
payment is made to the customer only against a valued authentic
cheque. the teller has to follow the following steps in making such
payment: Receiving the cheque from the customer. Examining the
cheque. In case of examining the cheque, the teller is predated
then the date is to be sure about the folipwing questions:
(ii)Amount is written in word and in figure and both is valued
same; (iii)Signature is installed and it is as it is the signature
kept in the bank; (iv)There is sufficient amount in the customers
accounts for making payment. Finally the cash paid seal is marked
over the cheque leaf for the collection of the cheque after making
the payment to the customers. 3. Management of the vault: The cash
section also manages the vault of the branch. The manager of cash
section is the in charge of the necessary liquid money in the vault
for the payment of the customer. 3.1.4 Remittance: Foreign Exchange
takes place in NCCBL. Remittance means transferring of fund through
different instruments other than cheque. The following two types of
Remittance are performed by NCCBL.
Types of remittance : Remittance is basically two types: uLocal
remittance. Foreign remittance. 3.1.4.1. Local remittance
Remittance is significant part of the general banking> The bank
receives and transfers various types of bills through the
remittance within the country. Obviously the bank charges
commission on the basis of bills amount NCCBL remittances are safe,
swift, inexpensive and simple. Types of local Remittance of NCCBL:
The local remittance includes the following: a) Pay Order(PO) b)
Demand Draft(DD) c) Telegraphic Transfer(TT) d) Mail Transfer(MT)
(a) Pay Order(PO): Pay Order is an instrument that contains an
order for payment to the payee only incase of local payment whether
on behalf of the bank or its constitution. Unlike cheque there is
possibility of dishonoring Pay Order. NCCBL charge different amount
of commission on the basis of Pay Order amount. (b) Demand Draft:
By DD any person can send money from one branch to another branch
of NCCBL. To send the money he/she must fill up the NCCBLs
prescribed form of DD and paid charge/commission and receives DD
block. The following information are included in the DD block: Name
of the sender branch
uName and account of the party who receives the money. For
security purposes a confidential test number are included in the DD
block Amount of money to be transferred Name of receiver branch (C)
Telegraphic Transfer: To send money urgently NCCBL may be requested
for TT on payment of a nominal charge and telegram charge. Any
person urgently sends money from one branch to another branch
within NCCBL through TT. When a message of TT sends through phone
from one branch to another branch in that time the message received
by the authorized officer who has a right of power of attorney.
After that, he/she fills up the TT form. Following things are
included in the TT form: i). TT number ii). IT test number iii).
Name and account number of the payee iv). Power of attorney number
of the sender and receiver of TT. v). The amount to be transferred.
vi) After fill up the TT form, he tests the test number of TT. If
he ensures througli testing the test number then he credits the
account of the payee. On the other hand, if the test number is not
proved then he calls back to the sending branch of TT and request
to send a new TT. (d) Mail Transfer: Money can be sent through mail
transfer to any body who has an account in any other branch of the
same bank for this purpose the sender shall have to furnish the
details like: The name of the beneficiary and his account
number
The amount to be transferred The name of the branch where the
account is maintained 3.1.4.2. Foreign remittance: NCC Bank is the
member of Money Gram and SWIFT networks. Using the services of this
global network, non-resident Bangladesh nationals can send money
from abroad to their home country within a few minutes without any
risk. Types of Foreign remittance (i) Money Gram: Money Gram is
represented in over 115 countries and is available at more than
25,000 locations worldwide. In the USA alone Money Gram is
available at inore than 15,000 locations. Sender completes a send
form and gets a receipt. Money Gram Agent gives a Ref: No. Which
has to be passed to the receiver? NCC Bank makes an enquiry on the
Money Gram computer network to obtain authorization to pay
recipient and recipient receives the fund. uMoney Gram is one of
the fastest ways to transfer money. Customers using Money uGram can
send or receive money usually within 10 minutes from any world. To
get the money the recipient need not to have a bank account with
NCC Bank Ltd. NCCBL does not levy extra charge. It gives better
exchange rate to the recipient. (ii) Placid Express In March 2002,
the bank has entered a Taka drawing arrangement with Placid
Express, for home remittances of Bangladeshi expatriates in the
United States. (iii) X-press money: The X press Money Services
would like to welcome NCCBL to their network. X press Money (XM) is
a web-based person-toperson money transfer system that allows an
individual to send/receive money through any of our network agents
instantly. All transactions are done through secure servers using
128-bit encryption technology so as to provide maximum security
(iv)Al Fardan: Al Fardan Exchange, the pioneer in money exchange
and worldwide remittance services in the U.A.E., established in
1971, is a trusted name for millions of residents and expatriates.
A modern exchange house with advanced infrastructure and
Courteous staff, has an extensive network of correspondent banks
all over the world to facilitate faster, completely reliable
transactions. (v) Habib express: Habib express is another important
medium through which wage earner remittance is accepted by NCC
Bank. Here head office at first enter in system server and received
necessary information about the amount of remittance, beneficiary
who will receive the amount and any reference number which work as
security for Bank as well as beneficiary. Head office gives
information through fax to it respective branch from ~where
receiver will receive money. (vi) Dhaka Janata: Dhaka Janata are
introduces to provide remittance fucilities to emigrant and other
people of Bangladeshi who work as contractual basis in the Italy.
Here Dhaka Janata also maintain same procedure of getting
information from system server including the name, referance
number, amount, Phone number etc.Here head office sends information
through fax to all respective branch. All receivers when come to
bank,respective branch check his information with information
received from head office. 3.1.5. Deposit Section Deposit is the
lifeblood of a bank. From the history and origin of the banking
system, deposit collection is the main function of a bank. 3.1.5.1.
Acceptinj~ deposits: The deposits that are accepted by NBL like
other banks may be classified in to,a) Demand Deposits b) Time
Deposits (a) Demand deposits: These deposits are withdrawn able
without notice, e.g. current deposits. National Bank Limited
accepts demand deposits through the opening of, o Current account o
Savings account o Call deposits from the fellow bankers (b) Time
deposits: A deposit which is payable at a fixed date or after a
period of notice is a time deposit. National Bank Limited
accepts time deposits through Fixed Deposit Receipt (FDR), Short
Term Deposit (STD) and Beared Certificate Deposit (BCD) etc. While
accepting these deposits, a contract is done between the bank and
the customer. When the banker opens an account in the name of a
customer, a contract arises between them. This contract will be
valid one only when both the parties are competent to enter into
contract. As account opening initiates the fundamental relationship
& since the banker has to deal with different kinds of persons
with different legal status, National Bank Limited officials remain
very much careful about the competency of the customers. 3.1.6.
Clearing: Clearing is a system by which a bank can collect
customers fund from one bank to another through clearing house. (A)
Outward Clearing: When the branches of a bank receive cheque form
its customers drawn on the other banks within the local clearing
zone for collection through Clearing House, it is Outward Clearing.
(B) Inward Clearing: When the branches of a bank receive cheque
drawn on them from other banks in the Clearing House, it is Inward
Clearing. 3.1.6.2 Clearing House: Clearing House is a place where
the representatives of different banks get together to receive and
deliver cheque with another banks. 3.1.6.2.1. Types of c1earin~
house There are two type of clearing house: Those are A) Normal
clearing house B) Same day clearing house (A) Normal clearing
house: 1) 1st house: 1st house normally stands at 10 am to 11 am 2)
2~K~ house: 2nd house normally stands after 3 p.m. and it is known
as return house. (B) Same day clearing house: 1) 19iouse: 1st house
normally stands at 11 am. to 12 p.m 2) 2~ house: 2 house normally
after 2 p.m. and it is known as return 3.1.6.3. Return house
Return House means 2nd house where the representatives of the
Bank meet after 3 p.m. to receive and deliver dishonored cheque,
which place in the 1 g Clearing House. Cheque may be dishonored for
any one of the following reasons: 1) Insufficient fund. 2) Amount
in figure and word differs. 3) Cheque out of date/ post- dated. 4)
Payment stopped by the drawer. 5) Payees endorsement
irregular/illegible / required. 6) Drawers signature differ /
required. 7) Crossed cheque to be presented through a bank. 8)
Other specific reasons not mentioned above. 3.1.6.4 Bills
Collection In modern banking the mechanism has become complex as
far as smooth transaction and safety is concerned. Customer does
pay and receive bill from their counterpart as a result of
transaction. Commercial banks duty is to collect bills on behalf of
their customer. Types of Bills for Collection of Clearing a)
Outward Bills for Collection (OBC) b) Inward Bills for Collection
(lB C) (a) What is OBC? OBC means Outward Bills for Collection. OBC
exists with different branches of different banks outside the local
clearinghouse. Normally two types of OBC: 1) OBC with different
branches of other banks 2) OBC with different branches of the same
bank Procedure of OBC: 1) Entry in the OBC register.
2) Put OBC number in the cheque. 3) Crossing seal on the left
corner of the cheque & payees account will be credited on
realization seal on the back of the cheque with signature of the
concerned officer. 4) Dispatch the OBC cheque with forwarding. (b)
Inward bills for collection (IBC) When the banks collect bills as
an agent of the collecting branch, the system is known as IBC. In
this case the bank will work as an agent of the collection bank.
The branch receives a forwarding letter and the bill. Procedure of
IBC: 1) IBC against OBC: To receive the OBC cheque first we have to
give entry in the IBC Register. The IBC number should put on the
forwarding of the OBC with date. 2) Deposit of OBC amount: OBC
cheque amount is put into the sundry deposit sundry Creditors
account, prepare debit & credit vouch of it. If the OBC cheque
is honored, send credit advice (IBCA) with signature & advice
number of the concern branch for the OBC amount. 3) If the OBC
cheque is dishonored, the concerned branch is informed about
it.Again place in the clearing house or send the OBC cheque with
Return Memo to the issuing branch according to their information.
Others Activities 3.2. Credit Card Section 3.2.1. About Credit
Card? It is a card (usually plastic) that assures a seller that the
person using it has a satisfactory credit rating and that the
issuer will see to it that the seller receives payment for the
merchandise delivered. Types of Credit Card
National Bank Limited offers mainly two type of credit card
according to the geographical area. These are Local credit card and
International credit card. According to the level of income the
local and international credit cards are divided into two
categories viz. Gold card and Silver card. These types of credit
cards are described below: (a)Local credit card: Local credit card
is valid only in Bangladesh. Out side Bangladesh, the card is
invalid. Local card are two types. They are Gold local card and
Silver local card. The card limit of gold local card is Tk.50000 to
Tk. 100000 and silver local card is below Tk.5 (b) International
Credit Card: International credit card is valid mainly outside
Bangladesh. But for the payment of roaming facilities for Grameen
phone, cardholders can use international credit card in Bangladesh.
International credit cards are of two types. These are gold
international credit card and silver international credit card. The
card limit of gold international credit card is $2000 to $4000 and
silver international credit card below $2000. 3.2.2 Yearly Charges
on credit card National Bank Limited receive card fee for new card
and renew card from the cardholder. The rate of card fee for new
card and renew card are the same. In case of new card the bank
receives the card fee with the next months bill. The rate of card
fee are given in below: Table: Yearly charges on credit card Type
of card Card fee International Gold Card US$70.00 International
Silver card US$ 35.00 Local Gold card Tk.2000.00 Local Silver Card
Tk.1200.00 4.1 Utilization of Fund As a private commercial bank,
NCCBL has some inherit commitments to its society. By utilization
the fund from the mobilized deposit NCCBL is fulfilling its
commitment which can gear up the economic activity. NCCBL has been
extending credit facilities to the potential, productive and
priority sectors as per instruction from Bangladesh bank. For a
bank, good loans and advances
are most profitable asset. A big portion of operating income is
derived from lending. This activity is done by the loans and
advance department. 4.1.1. Classification of loans and advances
Bank is an institution where clients keep their surplus deposits
and these deposits are invested in trade, commerce and industries
in the form of Loans & Advances to earn profit. Apart from
earning profit, by lending to priority sector, Bank also helps
countrys economic development. Lending activities of the Commercial
Banks are of two natures: (A) Continuous Credit. (B) Term Loan. In
continuous credit the client is given a credit limit for a
specified period mostly for 1 (one) year. The borrower is allowed
to make transaction up to that limit. In other word, he can deposit
and withdraw up to the fixed limit in revolving manner. On the
other, in case of Term Loan, Loan is first disbursed at a time or
in phases. Then it is borrowers turn to repay the Loan after a
certain fixed period at a time or in installments fixed for within
a certain period. (A) Continuous credit (i) Cash Credit
(Hypothecation) (ii) Cash Credit (Pledge) SOD (iii) SOD (Financial
Obligation) (iv) SOD (General) (v) OD etc (ii) Cash Credit
(Hypothecation): This facility shall be available both for Trading
Houses and. Manufacturing concerns against primary security of
hypothecated inventory/ stocks of Finished, Raw Materials and
machineries. However, as the primary security remains at the
disposal of the borrower with practically no control of the lending
institution, NCCBL shall extend such facility only against
retention of adequate eligible Collateral Security favoring bank.
Criteria of such Eligible Security shall be as per circular of Head
Office and within the guideline set by Bangladesh Bank in this
regard ii).Cash Credit (Pledge): NCCBL shall retain the provision
to extend WC
finance under the head. As the Primary Security i.e. Finished or
Raw by regulation is supposed to be under strict control of the
bank, the arrangement on practical experience eventually proves
cumbersome due to numerous difficulties in maintaining the
formalities related to strict supervision and monitoring.
Therefore, NCCBL shall prefer to consider such facility only under
Hypothecation unless assurance and arrangements are available about
compliance on the spirit of the portfolio. (iii) Secured Overdraft
(Financial Obligation): Credit Facility in the form of Loan and
Overdraft can be considered against Lien of various Financial
Obligations subject to credit restriction or any directive as
imposed by regulating authorities or Head Office. Necessary
guidelines with regard to extension of the facility shall be as per
direction of the Head Office/ Bangladesh Bank. (iv) Secured
Overdraft (General): NCCBL shall consider facilities under the
portfolio against valid Work Order/Supply Orders payment against
which shall be duly assigned favoring the bank by the work awarding
office/ agency. The portfolio in nature shall be of a Loan type and
not continuous. The WO shall be construed as Primary Security in
this regard. However, as the nature of facility carries inherent
risk, NCCBL shall prefer Collateral Securities while considering
facilities under the head. (B) Term Loan (i) Project Loan (ii)
House Building Loan (iii) Packing Credit (iv) LIM (Loan against
Imported merchandise) (v) LTR (Loan against Trust Receipt) (vi)
Transport Loan (vii) Lease Finance (viii) PAD (Payment against
Documents) (I) Project Loan: NCCBL shall allow Loans for longer
duration to enable its investment to be returned by way of
repayment after detailed assessment and feasibility study as per
its guideline for entrepreneurs and investors willing to come to an
arrangement in setting up industries and different production unit
complying to rules and regulations of governments Investment &
industrial policy.
As investment shall be for longer duration and fraught with
unforeseen risks, bank shall obviously seek adequate eligible
securities to cover itself. Acceptance of such securities shall be
as per laid down principles of the bank and Bangladesh Bank
guidelines in this regard. (ii) House Building Loan:Bank shall
allow credit facilities under such portfolio strictly as per PPG
within the Prudential Regulations of Bangladesh Bank for Consumer
Financing. (iii) Packing Credit: This facility also relates to
financing at Pre shipment stage. NCCBL shall consider such facility
under defined guidelines against export of various commodities.
(iv) Loan against Imported Merchandise (LIM): Loan against the
security of merchandise imported through bank shall be allowed
against Pledge of goods. The procedure and conditions for allowing
such facility under prior arrangement or forced circumstances shall
be strictly as per related guideline of the bank. Due to inherent
complexities, the portfolio should be discouraged. (v) Loan Against
Trust Receipt (LTR): Bank shall be selective in extending the
facility but shall prefer due to comfort in binding the customer
legally. Generally such facility shall be against arrangement and
preferable against collateral security favoring the Bank. (vi)
Transport Loan: NCCBL may extend Transport Loan on close scrutiny
of the purpose, Feasibility, experience of the borrower,
credit/trust worthiness and above all security aspect as per its
guidelines in this regard. (vii) Lease Finance: An entrepreneur,
under this scheme may avail of lease facilities to procure
industrial machinery and equipments, Vehicles etc. (without having
to purchase it by down payment) with easy repayment schedule on
case to case basis. Rate of interest under this Scheme is 16% P.A.
(viii) Payment against Documents (PAD): This facility originates
against payment of Import Bills on lodgment of CLEAN shipping
documents received from Foreign Correspondent against Letter of
Credit opened on behalf of the customers. (ix) IBP & FBP
(Inland &Foreign Bills Purchased): The facility relates to
extension of credit at the post Shipment stage. NCCBL shall
consider facility under the portfolio to relieve the exporter
strictly on complying standing conditions attached to it. 4.1.2.
NCC Banks Special Credit: Its based on the common credit
requirement of the society. Besides, these products have expanded
th~
the Bank with diversified source of income. These are: (a)Small
Business Loan (b) Personal Loan (c) House Renovation Loan
(d)Consumer Finance (e) Festival Business Loan. (0) Festival
Personal Loan. (g) NCC Bank Housing Loan Scheme. (e) Festival
Business Loan: The scheme designed to help the genuine businessmen
to meet the extra finance required during festivals like, Eids,
Puja. Disbursement of this loan is made in recycling order which is
to be stopped 15 days before the festival day. Maximum Tk.10.00 lac
is allowable under this Scheme @ 16% interest P.A. at quarterly
rest. Application fee is Tk.500 J) Festival Personal Loan: The
scheme formulated to meet emergency financial expenses of the
service holders at the time of festivals like Eids. Puja. Any
salaried employee aged between 20- 50 years and working in Govt.
Semi - Govt. Autonomous organization, corporate bodies, Insurance
Co., etc. are eligible to avail of this loan. The disbursement of
this loan starts before 1 month of festival and continues till
festival. Borrower may be allowed to avail of maximum Tk. 15,000/-
only for minimum 6 months but not more than 15 months @ 16%
interest P. A. at quarterly rest. Application fee is Tk. 100/-. (g)
NCC Bank Housing Loan Scheme: In order to enable the service
holders/ profess ionals/ businessmen in purchasing Flat/House,
Construction of Building and renovation, the Bank launched Housing
Loan Scheme from September 2004. The tenure of the loan is maximum
12 years and maximum amount of loan is tk.50.00 lac with interest @
16% P.A. 4.1.3. Modes of Credit: Credit can be categorized
according to the nature and modes of payment. (a) Term Wise
Classification: ii) Short term (=1 year to 5 years) ii) Long term
(> 5 years) (b) Nature Wise Classification: i) Loan: fixed in
nature, for a particular term or time.
ii-) Advances: continuous in nature with no fixed repayment
schedule but an expiry date, for example: Cash Credit (hypo),
Overdraft etc. (c). Purpose Wise Classification: i).Working
Capital: For manufacturing units to meet their short-term
obligation and day-to-day expenditure. ii)Fixed Asset Finance: For
acquisition of long-term capital assets. (d). Sector Wise
Classification: Commercial Lending: for commercial requirements
except export. It is for short and medium from of loan. Example:
LIM, LTR, PAD, SOD, Cash Credit, Loan General. i. Industrial
Credit: ii. Agricultural Credit iii. Transport Credit iv.House
Building Loan (e) Classification based on Fund Involvement: i.Fund
Facilities: direct money involvement ii. Non-Funded Facilities:
where fund is not extended directly. Example: Letter of Credit,
Letter of guarantee, Bank Guarantee etc (1) Types of Credit in
Foreign Trade: i.Loan against Imported Merchandise (LIM) ii.Payment
against Imported Documents (PAD) iii. Packing Credit (PC) iv. Loan
against Trust Receipt (LTR) v. Back to Back Letter of Credit. The
Bank has made remarkable achievement in recovery of non-performing
and classified loans advances during the period under review, As a
result, Banks ratio of classified loans to total loans on December
31, 2006 has come down to 5.62 percent, from 5.66 percent of the
previous year. This achievement was possible due to continuous
monitoring, follow-up and negotiation with the clients.
4.1.5 Lending Authority: The lending officers are broadly
categorized as followsManaging director eputy Managing director
Executive vice president Senior vice president Vice president
Senior assistant vice president Assistant vice president 4.1.6
Sanction of Credit: When a Branch Manager writes a letter to
accepting all terms and conditions of loan, it is called loan
sanction. After the completion of all the formalities of financing
a loan proposal, an advising letter is sent to the customer for the
credit facilities along with all terms and conditions. The
conditions, which are included in the loan sanctions, are given
bellow: a) Limit b) Primary Securities c) Collateral Securities d)
The Rate of Interest e) Expiry Date 0 Repayment 5.1. Foreign
Exchange Foreign Exchange is a process which is converted one
national currency into another and transferred money from one
country to other countries. Foreign exchange is the rate of
exchange in the both countrys currency. In NCCBL, the Foreign
Exchange Department has two sections Import section Export section
5.1.1 Import Section: Import of merchandise involves two things:
bringing
of goods physically into the country and remittance of foreign
exchange towards the cost of the merchandise and services connected
with its dispatch to the importer. Import Procedure Procedure for
obtaining IRC (Import Registration Certificate) Submission ofLCA
(Letter of Credit Authorization) Form: LCA forms distribution:
OpeningLC: Examination of import documents Documents sent to the
foreign exporter Payments against documents of release order from
the bank Receiving the documents
5.1.1.1 Post Import Finance: LTR (Letter of Trust Receipt):
Letter of Trust Receipt occurs when an importer fills up the LTR
form and applies for it LTR is permissible only if the importer is
a reputed, trust worthy and having done business with the
particular bank for a long time. LTR creates an option for the
importer to pay due by future installment. Loan against Imported
Merchandise (LIM): Loan facility up to a satisfactory limit to the
traders customers by the bank against security of the value of the
given only to the selective customers who have been doing business
with the bank for a long time. Payment against Documents (PAD):
After receiving the documents sent by the foreign exporter which
include bill of exchange, shipping documents etc. the importer pays
the dues against the documents received by the bank and latter on
releases the merchandises from the port. So, after due payments,
which include commissions, product price, charges for SWIFT, and
miscellaneous, the party is eligible to take the release documents
from the bank on this payment is called PAD. 5.1.2 Export Section:
The import and export trade of Bangladesh is
controlled under the Import and Export Control Act, 1950. No
person who has been granted registration by the Chief Controller of
Imports and Exports shall indent, import or export any goods into
or out of Bangladesh except in cases of exemption issued by the
government.. The registration number should be quoted on the
relative export forms. There are a number of formalities, which an
exporter has to fulfill before and after shipments of goods. These
formalities or procedures are enumerated as follows: ~ The
Registration of Exporters ~ Preparations of the Export Documents
> Dispatch of Goods > Send Shipping Advice )~ Negotiation of
Documents ~ Realization of Export Proceeds ~ Get the name of the
Importer/Buyer: > Price/Quotations: )~ Communicate the
Acceptance: ~ Obtain Export Code Number: Keep the goods ready for
dispatch: Inspection of Goods Getting Shipping Space Get in touch
with the Port Authorities Are required to be forwarded to the
opening banker along with the bill, the credit is called a
documentary credit. 5.2. Function of Foreign Exchange The Bank
actions as a media for the system of foreign exchange policy. For
this reason, the employee who is related of the bank to foreign
exchange, specially foreign business should have knowledge of these
following functions
i) Rate of exchange. ii) How the rate of exchange works. iii)
Forward and spot rate. iv) Methods of quoting exchange rate. v)
Premium and discount. vi) Risk of exchange rate. vii) Causes of
exchange rate. viii) Exchange control. ix) Convertibility. x)
Intervention money. xi) Foreign exchange transaction. xii) Foreign
exchange trading. xiii) Export and import letter of credit. xiv)
Non-commercial letter of trade. xv) Financing of foreign
trade.xvii) Nature and function of foreign exchange market. xviii)
Rules and Regulation used in foreign trade. xix) Exchange Airtime
5.3. About of LIC On behalf of the importer if the bank undertakes
to make payment to the foreign bank is known as documentary credit
or letter of credit. The letter of credit is issued against payment
of amount by the importer or against satisfactory security.
5.3.1. Application for Opening LIC: At first, an importer will
request banker to open L/C along with the following documents: 2.
Indent or Proforma Invoice 3. Import Registration Certificate (IRC)
4. Taxpayer Identification Number (TIN) 5. Insurance cover note
with money receipt 6. A bank account. 7. Membership of chamber of
commerce 5.3.2. L/C Application: NCCBL provides a painted form for
opening of L/C to the importer.The importer gives the following
information is that form: Full name & address of importer. Date
& place of expiry of the credit. The mode of transmission of
document (courier/mail/telex) Whether the confirmation of the
credit is requested by the beneficiary or not. Whether the partial
shipment is allowed or not. The type of loading (loading on
boarding). Brief description of the goods to be imported.
Availability of the credit by sight payment acceptance /deferred
payment. Within she specific time duration *the document should be
presented. Sales terms (FOB/CIF/C & F). Account number. L/C
amount.
Shipping mark. H.S. code number of the goods to be imported. IRC
number. LCA number Insurance cover note. Country of origin. The
above information is given along with the following documents:
Proforma Invoice, which gives description of the goods including
quantity, Unit price. Four set of IMP form. uThe insurance cover
note, issuing company & the insurance number. 5.3.3. Importers
Application for L/C Limit/Margin: To have an import L/C limit, an
importer submits an application to NCCBL. In that application
he/she gives full detail of the following: Full particulars bank
accounts. Nature of business. Required amount of limit. Payments
terms & condition Goodstobe imported Offered security
Repayments schedule 5.3.4. LC Margin: LC margin is the amount of
down payment or deposit to open the LC. This is a sort of security
for the LC purpose. Usually the margin varies from importer to
importer. Generally a regular importer enjoys a lower margin
facility from 10%-20% and for a new customer of the bank the margin
may be 80%-100%.
Charges: Handling charge per document Tk.1000 Accepted
Commission: Duration Commission 90 Days (Pt Quarter) 0.60% 120 Days
(2fld Quarter) 0.90% 180 Days (3Tc~ Quarter) 1.20% Postage charge-
Tk.200 Stamp charge-Tk. 150 SWIFT charge-Tk.3 500 per document
5.3.5. Transmission of L/C: The ways of transmission of L/C are as
follows i) Through SWIFT ii) Through Telex iii) Through DHL or
FEDEX iv) Through Emergency Mail Service (EMS 5.4. Back to Back or
Countervailing Credit: The beneficiary of a documentary credit may,
for the purpose of fulfilling his obligation under the credit, open
a counter credit in favour of another party to ship the goods of
his purchaser (importer). This is known as Back to back credit and
is issued conditional terms except prices and invoices. The
difference in the prices goes to the benefit of the original
beneficiary. 5.5. SWIFT: NCC Bank is a member of society for inters
bank financial telecommunication. Worldwide. It ensures secure
messaging having a global reach of 6495 Banks and Financial
Institutions in 178 countries, 24 hours a day. SWIFT global network
carries an average 4 million message daily and estimated average
value of payment messages is USD 2 trillion. SWIFT is highly
secured messaging network enables Banks to send and receive fund
transfer, L/C related and other free format messages to and from
any bank active in he network. Having SWIFT facility, Bank will be
able to serve its customers more profitable by providing L/C,
payment and other messages. 5.6. Form of Letter Of Credit
A letter of credit (L/C) may be two forms. These as below: i)
Revocable letter of credit. ii) Irrevocable letter of credit. (i)
Revocable L/C: If any letter of credit can be amendment or change
of any clause or canceled by consent of the exporter and importer
is known as revocable letter of credit. A revocable letter of
credit can be amended or canceled by the issuing bank at any time
without prior notice to the beneficiary. It does not constitute a
legally binding undertaking by the bank to make payment. Revocation
is possible only until the documents have been honored by the
issuing bank or its correspondent. Thus a revocable credit does not
usually provide adequate security for the beneficiary. (ii)
Irrevocable L/C: If any letter of credit can not be changed or
amendment without the consent of the importer and exporter is known
as irrevocable letter of credit. Irrevocable credit constitutions a
firm undertaking by the issuing bank to make payment. It therefore,
gives the beneficiary a high degree of assurance that he will paid
tohis goods or services provide he complies with terms of the
credit. 5.7. Parties to a Letter Of Credit: A letter of credit is
issued by a bank at the request of an importer in favor of an
exporter from whom he has contracted to purchases some commodity or
commodities. The importer, the exporter and the issuing bank are
parties to the letter of credit. There are however, one or more
than one banks that are involved in various capacities and at
various stages to play an important role in the total operation of
the credit. a) The opening Bank. b) The Advising Bank. c) The Buyer
and the Beneficiary. d) The paying Bank. e) The negotiating Bank. 0
The confirming Bank. (a) The opening Bank: The opening Bank is one
that issues the letter Of credit at the request of the buyer. By
issuing a letter of credit it takes upon itself the liability to
pay the bills drawn under the credit. If the drafts are negotiated
by another
bank, the opening Bank reimburses that Bank. As soon as the
opening Bank, issuing a letter of credit (L/C), it express its
undertaking to pay the bill or bills as and when they are drawn by
the beneficiary under the credit. When the bills are presented to
or when antic is received that bills have been presented to a
paying or negotiating Banks its liability matures. (b) The Advising
Bank: The letter is sent to the bank by mail or telex and forwarded
by it to the exporter. The bank providing this service is known as
the advising bank. The advising bank undertakes the responsibility
of prompt advice of credit to the beneficiary and has to be careful
in communicating all its details. (c) The Buyer and the
Beneficiary: The importer at whose request a letter of credit is
issued is known as the buyer. On the strength of the contract that
he makes with the exporter for the purchase of some goods that the
letter of credit is opened by the opening bank. The exporter in
whose favor the credit is opened and to whom the letter of credit
is addressed is known as the beneficiary. d) The paying Bank: The
paying bank only pays the drafts drawn under the credit but under
takes no opening bank, by debating the latters accounts with it if
there is such an account or by any other measured up, between the
two bankers. e) Negotiating bank: The negotiating bank has to be
careful in scrutinize that the drafts and the documents attached
there to be in conformity with the condition laid down in the L/C.
Any discrepancy may result in refused on the part of the opening
bank to honor the instruments is such an eventuality the
negotiating bank has to look back to the beneficiary for refund of
the amounts paid to him. 1) The Confirming Bank: Sometimes an
exporter stipulates that a L/C issued in his favor be confirm by a
bank in his own country. The opening this country to add its
confirming to the credit the bank confirming the credit is known as
the conflrmin~ bank and the credit is known as confirmed credit.
5.8. Documentary Letter Of Credit (Import/Export Documentation):
Documentary letter of credit is such kinds of commercial letter
which a bank issue on behalf of foreign seller (exporter) according
to the direction of the (importers) purchasers. The documents shown
under are known as export documents form the importers side. These
are: (i) Bill of exchange: The bill of exchange is that particular
instrument through which payment is effected in trade deals
internal and international. (ii) Bill of lading: A bill lading is a
document of title to goods entitling the
holder to receive the goods as beneficiary or endorsee and it is
with the help of this document on receipt from the exporter that
the importer takes possession of the goods . from the carrying
vessel at the port of destination. (iii) Airway bill I Railway
receipt: When goods to be transported are small in bulk or
requiring speedy delivery or those are perishable in nature on the
deal is in between the neighboring countries then mode of
transports other than shipping may be resorted to far the carriage
of the goods Airways bill / Railway receipt take place of Bill ~of
lading depending on the nature of the carrier. (iv) Proforma
invoice: It is the sellers bill for the merchandise. It contains a
description of goods, the price per unit at a particular location,
total value of the goods, packing specifications, terms of sale,
letter of credit, bill of lading number etc. There is no standard
form far a commercial invoice. Each exporter designs his own
commercial invoice form. The invoice is made out by the seller
under his signature in the name of the buyer and must be submitted
in a set of at least 3 copies. Its main purpose is to check whether
the appropriate goods have been shipped and also that their unit
price, total value, marking on the package etc. are consistent with
those given in other documents. (v) Insurance policy: In the
international trade insurance policy is a must to cover the risk of
loss on consignments while they are on seas, roads, airways. The
insurance is the responsibility of the buyers (consignee) under
FAS, FOB and C&F contracts and of the seller (consignor) under
CIF contract. The policy must be of the type as specified in the
relative contract / credit. The policy would be for the value of
CIF price plus 10 (ten) percent to cover the expenses and that is
required to be obtained in the same currency as that of the credit
and dated not later than the date of shipment with claims* being
payable at the destination. It must be properly stamped. Like a
bill lading it must be negotiable and be endorsed where it is
payable to order. (vi) Certificate of origin: This is a certificate
issued by a recognized authority in exporting country certifying
the country of origin of the goods. It is usually by the Chambers
of commerce. Some times, it is certified by local consul or Trade
Representative of the importing country as per terms of the credit.
vi)Packing list: The exporter must prepare an accurate packing list
showing
item by item, the contents of the consignment to enable the
receiver of the shipment to check thecontents of the goods, number
and marks of the package, quality, per package net weight, gross
weight measurement etc. (viii) Weightment and Measurement: Issued
by recognized authority (like chambers of commerce and industry) in
exporting country certifying correct weightment and measurement of
the goods exported. (ix) Bill of entry: A bill of entry is a
document which contains the particulars of the imported goods as
well as the amount of customs duty payable.The negotiating bank
after received the above documents / papers then this bank scrutiny
the documents. The negotiating bank sends the original shipping
documents to the L/C opening bank and keeping the second copy with
the negotiating bank 5.9. Payment against Documents (PAD) Banks
deal in documents and not in goods. If the shipping document
against the L/C is in order then the L/C opening bank must have to
payment to the foreign bank within 3 days according as Uniform
Customs and Practice for Documentary Credit (UCPDC) 500 of revision
of ICC. If the shipping documents have any discrepancy, then the
L/C opening bank informed to the negotiating bank within 7 days.
Otherwise, the shipping documents have not discrepancy. If the
importer have not adequate founds in the bank account then the bank
payment to the foreign bank against the shipping documents 5.10:
Payment Procedure of Import Documents: Payment procedures of NCCBL
involve the following tasks: (a): Date of Payment: Usually payment
is made within seven days after the documents documents have been
received. If the payment is deferred, the negotiating bank may
claim interest for making delay. (b): Preparing Sale Memo: As sale
memo is made at B.C. rate to the customer. As the T.T & 0. D
rate is paid to the ID, the difference between these two rates is
known as Exchange Trading. Then an Inter Branch Exchange Trading
Credit advice is sent to Inter ID. Requisition for the foreign
currency For arranging necessary fund for payment, a requisition is
sent to the ID. Transmission of telex: A telex is transmitted to
the correspondent bank ensuring that payment is being made.
In this section the Overall Performance of NCC Bank 2002-2006
has discussed in figures graphs: NCCBL is the well reputed and
established bank in the private sector. All the branches are
computerized and people are getting quick benefit from the bank.
6.1 Deposits (2002-2006): From the figure it is seen that the
growth has been steady enough. During the year 2006 total advances
stood at Tk.24, 678.36 million and comparing to the advances, the
advance-deposit ration was 0.88.1 in the year 2006 6.2 Investment:
investment figure of the bank as on 3 Pt December, 2006 stood at
Tk.3,552.08 million as against Tk.3,0 10.45 million of the previous
yearincrease being 18%. Considering the good rate of return, the
bank emphasized on making investment Govt. Treasury bill with a
view to utilizing its liquid fund on temporary basis so that the
same can be liquidate to meet urgent requirements. 6.4 Commission
on Letter of Credit: The amount of Commission on Letter of Credit
handled by the Bank in 2002, 2003, 2004 were nearly same. But later
on 2005 was increased huge amount from 2004, rate of growth being
13.53%. 2005 and 2006 is nearly same. The chart below shows the
growth of Commission on Letter of Credit for last 05 The movement
of export is relatively increasing position in steady way. Here in
2003 and in 2004 the growth was stably increases and after that it
rises in increasing scale. The position of import is different.
Because in the year of 2003 and 2004 it declined and after that it
increases in 2005 strongly and continue in 2006. The position of
remittance is almost same as import because it also decreases in
2003 and 2004 . After that it increases in 2005 and 2006 which
provide a good sign for future
6.6 Additional Confirmation Commission on Letter of Credit: The
amount of Additional Confirmation Commission on Letter of Credit
handled by the Bank in 2002 and 2003 was nearly same but in 2004,
this amount was increased huge amount. Later on 2005, this amount
was decreased huge amount and the difference between 2004 and 2005
was -55.96%. But 2005 and 2006 is nearly same. The chart below
shows the growth of Additional Confirmation Commission on Letter of
Credit for last 05 years. 7,1 Conclusion: Modem Commercial Banking
is exacting business. The reward are modest, the penalties for bad
looking are enormous. And Commercial banks are great monetary
institutions, important to the general welfare of the economy more
than any other financial institution. It has a vastly sobering and
exacting responsibility. National Credit and Commerce Bank Limited
(NCCBL) playing a vital role in financing import and exports of the
country. Without Banks co-operation, it is not possible to run any
business or production activity in this age. Exports and import
need finance in various stages of their activities. Export and
import financing are letter of credit (L/C), payment against
documents (PAD), loan against imported merchandise (LIM) etc. All
these facilities are provided by NCCBL. For this purpose Banks
consider the borrowers business standing, integrity, liability with
the bank term and conditions of the L/C. There is lot of risks
involved in foreign business. So, the National Credit ant commerce
Bank Limited (NCCBL) has to clearly justify the customers from a
neutral point and gather the current information about the market.
I have worked only in the Elephant Road branch. So I am not able to
know about head office activities regarding credit and others.
Branch officers have to work within limited boundaries and time to
time they have to take permission from the head office. Taking
permission from the head office is time consuming. From my
observation I have found that peoples are interested about that job
which gives them more salary and other facilities. NCC bank should
give its employees more salaries, job security and others
facilities to hold its existing expert and trained officers.
7.2 Recommendation: As the study was done in the specific area,
so recommendations have been covered in respect of those areas. NCC
Bank authority among which most of them has been mentioned as
suggestion to improve service quality. For the improvement of the
service the following measures should be taken: Customers
Convenience: For customers convenience, NCC Bank should provide
more personnel to deliver faster services to their honorable
customer. Human Development: Development of human resources should
be ensured to increase efficiency in work. Communication System:
Ensure proper communication system and maintenance of file &
machineries like phone, computer, fax, and photocopier. Interest:
More interest should be paid on deposit account so that customers
are convinced to deposit their money in bank. Margin Rate: To
decrease margin rate for all clients. This is very risk for the
Bank but if the Bank wants to target many clients, this is very
important Computerization: To ensure error free fast task bank
should be fully computerized. R & D: Research & Development
wing must be more extensive & rich. Strategy: Effective
strategies must be undertaken against defaulter. Project
Management: Project Management must be practiced in case of
investing in the project. Feasibility of the project, project
planning ,monitoring & evaluation should be undertaken.
Managerial Function: NCC Bank must have to follow the management
functions (from planning & controlling) strictly in all of
their business activities. Financial Analysis: Branch should have a
separate section to analyze the financial statement for fining its
profitability & ownership ratios. Image: Office should be fully
decorated to attract people to come into it.
shaila Islam(Advocate & amp; Legal Associates)About Company
Law Matter[Company Registration,TIN,Trade Licence,Trade
Mark,VAT,IRC,ERC] : pm