Standard bank final

Introduction

The services of commercial bank primarily revolve roundmobilization of deposits and lending the same to those needing finance for their business and other activities. A broader definition of a bank is any financial institution that receives, collects, transfers, pays, exchanges, lends, invests, or safeguards money for its customers.

Commercial bank

Commercial banks specialize in loans of commercial nature especially short term loans to industries and businesses and individuals.

Commercial banks are the oldest financial institutions.The occupy and important position in the financial landscape of nearly every country.

Standard Bank Limited (SBL) was incorporated as a Public Limited Company on May 11, 1999 under the Companies Act, 1994 and the Bank achieved satisfactory progress from its commercial operations on June 03, 1999. SBL has introduced several new products on creditand deposit schemes. It also goes for Corporate and Retail Banking etc. The Bank also participated in fund Syndication with other Banks. Through all these myriad activities SBL has created a positive impact in the Market.

Objectives • To be a dynamic leader in the financial market in innovating new products as to the needs of the society.

• To earn positive economic value addition (EVA) eachyear to come.

• To top the list in respect of cost efficiency of all the commercial Banks.

• To become one of the best financial institutions inBangladesh economy participating in the most significant segments of business market that we serve.

Vision To be a modern Bank having the object of building a sound national economy and to contribute significantly to the Public Exchequer.

Mission To be the best private commercial bank in Bangladesh interms of efficiency, capital adequacy, asset quality, sound management and profitability.

Activities of Standard Bank

General banking is the front-side banking service department. It provides those customers who come frequently and those customers who come one time in banking for enjoying ancillary services. The officers of this department have to perform the following tasks:

1) Account opening and close.

2) Collection of cash, cheque from customers.

3) Issuing of FDR, pay orders, cheque books and demand draft.

4) Assisting customer to open various deposit scheme.

5) Conducting clearing house activities.

6) Collection of local and outward bills.

CSR Activities

SBL donates crest and cheque to war wounded Freedom Fighter

SBL donates a cheque at deceasedArmy Family of BDR Mutiny.

SBL donates a cheque for Flood Victim people

SBL serves the people setting upa temporary eye treatment project

SBL donates cheque & crest to meritorious student

SBL contributes donation for Victims of BDR Mutiny

SBL has donated computers to School Students at Savar

Role of Commercial Banks in Economic Development

The Banking Sector has for centuries now formed one of the pillars of economic prosperity. Indeed history provides us with some starting information regarding how banks provided finance for imperialist ventures in newly acquired colonies. Over time banks have formed an important part in providing an avenue for both savings and investments.

Land, Labor, capital and entrepreneurs are the basic economic resources available to business. However, to make the use of these resources, a business requires finance to purchase of the land, hire labor, pay for capital goods and pay for individuals with specialized skills. Detail role of commercial banks in economic development is given below:

Trade DevelopmentThe commercial banks provide capital, technical assistance and other facilities to businessmen according to their need, which leads to development in trade.

Agriculture DevelopmentCommercial banks finance the most important sector of the developing economics i.e. agriculture, short, medium and long-term loans are provided for the purchase of seeds and fertilizer, installation of tube wells, construction of warehouses, purchase of tractor and thresher etc.

Industrial DevelopmentThe countries, which concentrated on industrial sector made rapid economic development. South Korea, Malaysia, Taiwan, Hong Kong and Indonesia have recently developed their industrial sector with the help of commercial banks.

Capital Formation

Commercial banks help in increasing the rate of capital formation in acountry. Capital formation means increase in number of production units, technology, plant and machinery. They finance the projects responsible for increasing the rate of capital formation.

Development of Foreign TradeCommercial banks help the traders of two different countries to undertake business. Letter of credit is issued by the importer’s bank to the exporters to ensure the payment. The banks also arrange foreignexchange.

Transfer of MoneyCommercial banks provide the facility of transferring funds from one place to another which leads to the growth of trade.

More ProductionA good banking system ensures more production in all sectors of the economy. It increases the production capabilities of the economy by strengthening capital structure and division of labor

Development of TransportThe commercial banks financed the transport sector. It has reduced unemployment on one hand and increased the transport facility on the other hand. Remote areas are linked to main markets through developed transport system.

Safe CustodyThe business concerns and individuals can make themselves tension freeby depositing their surplus money in banks. The banks also provide them the facility of lockers to keep their precious articles and necessary documents safe.

Increase in Saving

Commercial banks persuade the people to save more. Different saving schemes with attractive interest rates are introduced for this purpose. Number of bank branches is opened in urban and rural areas.

Construction of HousesCommercial banks provide credit facilities to their customers for the purchase or construction of houses.

Assistance to GovernmentBy providing funds to government for development programs, the commercial banks share the government for economic stability.

Increase in EmploymentA country’s economic prosperity depends on the development of trade, commerce industry, agriculture, transport and communication etc. Thesesectors are financed by the commercial banks and employment opportunities are increasing.

Saving in Metallic ReserveCheques and drafts etc works like money. In this way the need of precious metals to make coins reduces and metallic reserve of the country can be utilized on other important matters

Credit CreationCommercial banks are called the factories of credit. They advance muchmore than what the collect from people in the form of deposits. Through the process of credit creation, commercial banks provide finance to all sectors of the economy thus making them more developed than before.

Proper use of MoneyPeople deposit their saving in the banks, so the scattered money becomes a huge amount in the way, which can be used for different projects in a proper way.

Financial Advices

Commercial banks also give useful financial advices to promote the business of their customers, besides credit facilities.

Increase in InvestmentCommercial banks mobilize savings of the people. They make them available to the farmers, traders and industrialists for the development of agriculture, trade and industry.

Success of Monetary PolicyUnder the supervision of central bank, all scheduled commercial banks make effort for the success and objectives of monetary policy. This joined effort of commercial banks makes the economic development possible.

Use of Modern TechnologyThe use of modern technology in less developed countries is only possible in the presence of developed commercial banking as it can be the main source of their funds.

These funds are utilized for the import of modern technology from developed countries.

Export Promotion CellsIn order to boost the exports of the country, the banks have established export promotion cells for the information and guidance tothe exporters.

Economic ProsperityEconomic prosperity of a country depends on number of factors including the development of commercial banking. A sound banking system promotes the economic status of the people by providing them short, medium and long-term loans.

Training Center

Commercial banks established many trading centers for their employees to modernize the banking system of a country. In this way the banking experts enhance their abilities and contribute towards the developmentof country.

Types of deposit products

• Current Deposit

• Savings Deposit

• Short Term Deposit

• Fixed Deposit

• Deposits Under Scheme

SBL Regular Deposit Programme ( SRDP )

* If any monthly installment remains unpaid for 5 (five) consecutive months, the account will be closed automatically and the account will be settled as detailed other page :-

Relationship/Tenure Applied Interest

Less than 1(one) year No interest

More than 1 year but less 3years

Savings Rate

More than 3 years but less 5 years

Matured value of 3 yearsand rest as per prevailing interest rateon savings rate

More than 5 years but less 10 years

Matured value of 5 yearsand rest as per prevailing interest rateon savings rate.

If failure to pay monthly installment on due dates he/she will pay penalty of Tk. 20/-(Twenty) next subsequent installment.

Monthly Installment, Tenure and Maturity Value will be as per following Schedule:-

Installment / Years

300 500 1000 2000 2500 5000 10000

3 Years 12,375

20,625

41,240

82,470

1,03,100

2,06,200

4,12,445

5 Years 22,595

37,645

75,245

1,50,510

1,88,145

3,76,325

7,52,815

7 Years 34,700

57,820

1,15,595

2,31,165

2,89,055

5,78,300

11,57,080

10 Years

57,170

95,330

1,90,570

3,81,245

4,76,850

9,54,430

19,09,785

SBL Regular Income Programme ( SRIP )

1. SBL Regular Income Program is an income program, which helps you to earn a monthly fixed     amount on your deposits at SBL for period of 1 year.

2. Deposit of Tk. 50,000/- (Fifty Thousand) and multiples thereof but maximum limit of    Tk. 25,00,000/- (Taka Twenty Five Lac) and Tk. 50,00,000/- (Taka Fifty Lac) at a time for the    individual customer and the company respectively. Depositor will earn 12 equal monthly profit.

Depositor can earn money due date as per following schedule:-

Deposit Amount50,0 1,00, 2,00, 3,00, 4,00,00

00 000 000 000 0 & above

Monthly Interest Payable

400 800 1,600 2,400 3,200 &Above

SBL Double Income Plus ( DI+ ) Programme

1. Deposit of Tk. 10,000/- (Ten Thousand) and multiplesthereof will be acceptable under this    program.

2. A specially designed receipt shall be issued for thedeposit under this program.

3. The instrument shall be issued for 7 years.

4. At maturity after 7 years the depositor will get double plus (DI+).

5. If any depositor intends to withdraw his deposit before maturity, the following rules will apply :-

No benefit including interest/profit shall be allowed for pre-mature encashment within 1 (one)    year.

If the accounts/deposits are closed/en-cashed after 1 (one) year of its opening interest shall    be allowed on the deposit at prevailing FDR Interest Rate.

6. The instrument will be acceptable as collateral security against any investment subject to    registering lien with the issuing Branch.

7. In case of instrument get lost, the procedure for the issuance of a duplicate receipt will be the    same as applicable in case of loss of FDR.

Types of loan products

Secured overdraft

General Loan

House building Loan

Staff Loan

Transport Loan

Loan Against Trust Receipt

Payment against document

Packing Credit

Lease Finance

SME

Consumer Credit

Bill Purchase

Consumer Credit Scheme : Lending rate has been shown in the following table where fixed rate (Bangladesh bank instructed rate) and

mid-rate are given. Bank may re-fix ±1.50 over the mid rate considering the risk involvement. These rates are effective from July 01, 2014.

SL Particulars Fixed Rate Mid Rate

01 Consumer Credit Scheme (Staff) 12.00% --

02 Consumer Credit Scheme (Commercial) -- 16.50%

1.00% additional interest rate will be charged for default in payment/ adjustment. All other charges, commissions and fees shall remain unchanged.

House Building Loan : Lending rate has been shown in the following table where fixed rate (Bangladesh bank instructed rate) and mid-rate are given. Bank may re-fix ±1.50 over the mid rate considering the risk involvement. These rates are effective from July 01, 2014.

SL Particulars Fixed Rate

Mid Rate

01 House Building Loan (Staff) 7.00% --

02 House Building Loan (Commercial) -- 16.00%

03 House Building Loan (Residential) -- 16.00%

1.00% additional interest rate will be charged for default in payment/ adjustment. All other charges, commissions and fees shall remain unchanged.

Necessary papers and documentsThere are various kinds of Bank Accounts which people are looking for. These account’s opening go through some procedure. Required information for opening a bankaccount varies from bank to bank. Following are the most common information required with every bank.

Individual and Joint Account (Salary and Current)

Bank’s prescribed Account opening application form (to be signed by the applicant in front of respective bank personnel),

Two Passport Size Photographs of the Account holder(s) attested by the introducer,

Specimen Signature Card (To be signed by the applicant in front of respective bank personnel),

Estimated Transaction Profile, and

Any of the following Identification Documents (Current valid passport/ Valid driving license/ Voter ID Card/ Armed Forces ID card/ A Bangladeshi employer ID card bearing the photograph and signature of the applicant/ A certificate from any local government organs such as Union Council chairman, ward commissioner etc). (In this case thecertifier should attest applicant’s photograph along with signature/ Trade license with photographcan be accepted for individual’s identification), i.e. any document showing photograph, signature andaddress of the customer issued from a dependable authority (Managers and Supervisors have to apply judgment) are acceptable.

TIN Number.

One Passport Size Photographs of the Nominee(s) attested by the Account holder.

All photocopies should be verified with the original and attested by an authorized officer of the Bank.

Limited Company Account Bank’s prescribed Account Opening application form,

Certified copy of the Memorandum & Articles of Association of the Company,

Certificate of incorporation,

Certificate of commencement of Business (For PublicLimited Companies only),

 Extract of the Board resolution sanctioning the account opening and signing authority,

List of the Director with address in specified from,

Photograph of the signatories,

Copy of valid Trade License,

Introducer’s signature in the A/C opening form and at the back of the photograph(s) of Account holder(s),

List of names with Appointment letter and Specimen Signature of the Persons authorized to operate the Account, and

The personal identity of all the directors or beneficial owner(s) proprietor of the Firm has to be established by any of the documents as mentionedin Individual or Joint Customer category.

Distinction between conventionalcommercial bank and Islamic commercial bank Characteristic Islamic

commercial bank

Conventional commercial bank

Business Framework

Functions and operating modes are based on Shariah and Islamic banks must ensure thatall business activities are incompliance with shariah requirements.

Functions and operating modes are based on secular principles, not religious laws or guidelines.

Interest charging

Financing is notinterest (Riba) oriented and should be based on risk-and-reward sharing.

Financing is interest oriented, and a fixed or variable interest rate ischarged for the use of money

Interest on deposits

Account holders do not receive

Depositors receives

interest(riba) but may share risk and rewardsof investment made by the Islamic bank

interest and a guarantee of principle payment

Risk sharing in equity financing

Islamic banks offer equity financing with risk sharing fora project or venture. Losses are shared on the basis of equity participation.

Risk sharing is not generally offered but is available through venture capital firms and investment banks, which mayalso participatein management.

Restrictions Islamic banks are allowed to participate onlyin economic activities that are Shariah compliant.

Traditional banks may finance any lawful product or service

Zakat One of the Traditional

functions of theIslamic Banks isto collect and distribute zakat.

banks do not collects and payany religious tax

Penalty on default

Islamic banks are not allowed to charge penalties for their enrichment. Theymay however allow impositionof default or late-payment penaltieson the grounds that these penalties discourage late payments or defaults, which impose administrative costs on bank for processing and collecting the amount owed.Penalties may bedonated to a charity or used to offset

Traditional banks normally charge additional money(compound interest) in case of late payment

collection cost.

Avoidance of gharar

Transaction withelements of gambling or speculation are discouraged or forbidden.

Speculative investments are allowed

Customer Relationship

The status of client is that of partner and investor

The status of a client is one ofcreditor and debtor

Shariah supervisory Board

Each Islamic bank must have asupervisory board to ensure that all its business activities are in line with Shariah’s requirement

Traditional banks do not have such requirements

Conclusion

The Standard Bank Ltd facilitate payments by means of credit instruments like cheques, drafts, telegraphic transfers, letters of credits and other means of payment including credit and debit cards. Without theseservices domestic and international trade could not have possibly progressed much beyond the old system of barter. In the words of Walter leaf: “The banker is theuniversal arbiter of the world’s economy”.