The main purpose of this report is to get a vast knowledge about General Banking System of Agrani Bank Limited. Other objectives are to define the strategies regarding the strength and weakness of the bank and to know the general banking function, it’s procedures, rules and regulation. Here describe the activities of the foreign exchange department. Finally identify the major policies by which they are operating now and discuss SWOT analysis which based on problems findings and recommendations.
Today’s fast growing companies need business banking services that fully meet their expectations for speed, convenience, efficiency and security. To ensure their optimum level of satisfaction, regarding their necessity for this type of affluent banking services different types of local as well as multinational banks are coming up with diverse and dynamic corporate banking services.
Banks are playing a vital role in the economic progress of our country. Now-a-days, the banks try to give priority in the perspective of our national interest. The Banking Industry in Bangladesh is one characterized by strict regulations and monitoring from the central governing body, the Bangladesh Bank. The chief concern is that currently there are far too many banks for the market to sustain. As a result, the market will only accommodate only those banks that can transpires the most competitive and profitable ones in the future.
Bank perform the in dispensable task of intermediating between the two groups and offering convenient financial service to surplus-spending individuals and institutions in order to attract fund and these loaning those funds to deficit- spending individuals and institutions. Another contribution of bank make their willingness to accept risky loan from borrower, while issuing low risk securities to their depositors. Bank also satisfies the strong needs of much customer’s liquidity. It is true thus clear that the underlying principle of a business of banking is that the resources mobilized through the acceptance of deposit must contribute the main stream of funds, which are to be utilized for lending or investment purpose.
OBJECTIVE OF THE STUDY
The main objective of the study is to gain practical knowledge and to acquire knowledge about the practice banking business. In addition, the prime objective of the study is to know the existing banking business in Agrani Bank Ltd.. The other objectives are given below:
As a part of the MSS program.
- To have an exposure on the banking environment of Bangladesh.
- To define the strategies regarding the strength and weakness of the bank.
- To Identifying the difference between theory and practice overall Management
- To know the general banking function, it’s procedures, rules and regulation
- To know the activities of the foreign exchange department
- To provide information about the ABL to the future researcher and readers who want to know about this bank.
- To identify the major policies by which they are operating now.
- To identify the facilities offered by the Agrani Bank Ltd.
METHODOLOGY OF THE STUDY
The data needed for conducting the study has been collected from the primary sources as well as secondary sources. In collecting the necessary data, care has been taken so that all the variables that in some way can’t affect the objectives of the study. The information that I used in this study is collected by the following way:
Primary Data Sources:
Primary information has been collected through:
- Different Manuals of ABL
- Different circulars of ABL
Secondary Data Sources:
Most of the information required for my study purpose was collected from secondary sources:
- Institution booklet & annual report
- Policy guide hand notes
- Publish book
- Different Papers of ABL
- Prospectus of ABL
- Unpublished Data
- Different Text Books
- Official Documents
The major portion of data sources has been collected from secondary data sources. Information required formulating suggestions and recommendation have been availed from related text and research papers.
I analyzed the data to find out the required information. I used necessary number of table, chart, and graph to present the report. Ms-Word, Excel or any required computer program used to process the data. . Necessary tables have been prepared on the basis of collected data and various statistical techniques have been applied to analyses on the basis of classified information.
Banking Business in Bangladesh
Bangladesh shares a common past with India and Pakistan in respect of development of the business of banking. Historians try to trace the origin of banking to the Vedic age. The writings of Manu bear testimony to what can be called a crude from a banking. The reference to the business of banking, albeit again of rudimentary form, could be found in the Katell’s “Arthoshastro”. These ‘banks’ were in fact family run enterprises. With the advent of Muslim rule in India the fortune hunting Afghan traders started money lending business in exchange of interest some time in 1312 A.D. They were know as “Kabuliawallas”.
The banking system at independence consisted of two branch offices of the former State Bank of Pakistan and seventeen large commercial banks, two of which were controlled by Bangladeshi interests and three by foreigners, other than west Pakistan. There were fourteen smaller commercial banks. Virtually all banking services were concentrated in urban areas. The newly independent government immediately designated the Dhaka Branch of the State Bank of Pakistan as the Central Bank and renamed it the Bangladesh Bank. The bank was responsible for regarding currency, controlling credit and monetary policy, and administering exchange control and the official foreign exchange reserves. The Bangladesh Government initially nationalized the entire domestic banking system and proceeded to reorganize and renamed the various banks. Foreign owned banks were permitted to continue doing business in Bangladesh.
Banking System in Bangladesh:
At the moment financial sector reform programs are underway. Private banks and insurance companies with few exceptions are functioning creditably. Bangladesh pursues a liberal market economy. Bangladesh Bank is the apex bank of the country responsible for promoting healthy growth and development of the banking system. Banks and insurance companies, both in the private and public sectors, are operating freely and contributing to the economy. Foreign banks like HSBC, SCB, City Bank etc. function in Bangladesh through their branches.
Wider commercial role:
The commercial role of banks is not limited to banking and includes;
- Issue of banknotes (promissory notes issued by a banker and payable to bearer on demand.)
- Processing of payments by way of telegraphic transfer, EFTPOS, internet banking or other means.
- Issuing bank drafts and bank cheques
- Accepting money on term deposit
- Lending money by way of overdraft, installment, loan or otherwise.
- Safekeeping of documents and other items in safe deposit boxes.
- Currency exchange
The economic function of banks include:
- Issue of money
- Netting and settlement of payments
- Credit intermediation
- Credit quality improvement
- Maturity transformation
Regulatory Authority of Banking Industry in Bangladesh
Bangladesh Bank is a typical central bank of a third world country with a medley of tasks on its agenda. These agenda include not merely issuing notes and controlling supply of money but also the responsibility to act as the holder of gold and currency reserves, banker to the government, lender of the last report, supervisor of the banking system, overseer of national credit policy, promoter of credits to agricultural and other important socio-economic sector and administrator of exchange control.
Bangladesh Bank (BB) has been working as the central bank since the country’s independence. Its prime jobs include issuing of currency, maintaining foreign exchange reserve and providing transaction facilities of all public monetary matters. BB is also responsible for planning the government’s monetary policy and implementing it thereby.
Banking Legislations of Bangladesh:
The Banking Companies act, 1991, has been the most important piece of legislation enacted in Bangladesh to define all aspects of operation of banking institutions and regulation of their activities by regulatory authorities. This important landmark was preceded by a medley of laws passed by the parliament and presidential Ordinances and Orders enacted or promulgate during the British and later Pakistan eras.
Bangladesh Bank Order, 1972:
In addition to the Banking Companies Act, 1991, Bangladesh Bank Order, 1972 also contains a few provisions about regulating some aspects of banking operation.
Product/ Services Scheme
|1. Deposits||1. Current Deposits (CD)|
3. Savings Deposits (SB)
4. Fixed Deposits
5. Special Notice Time Deposits (SNDT)
6. Non Residence Special Taka Account
7. NR Investors Taka Account
8. Agrani Bank Pension Sanchay Prokalpa (APS)
9. Agrani Bank Bishesh Shanchay Scheme (ABS)
|2. Foreign Currency||1.Foreign Currency Account|
2.Non Resident Foreign currency Deposit
|3. Loan & Advances||1.Cash Credit (Hypo)||10.Consumer Credit|
|2. Cash Credit (Pledge)||11. Overseas employment|
|3.Secured Overdraft (SOD)||12.Advance Against Salary|
|4.Temporary Overdraft (TOD)||13.Rural & Agro Credit|
|5.Industrial Credit (IC)||14.SME loan|
|6.Inland Bills Purchased (IBP)||15.Weaver`s Credit|
|7.Staff loan||16.Export Cash credit|
9.Housing Loan-General &Commercial
|I. Import Finance||1.Loan Against Imported Merchandise(LIM)|
|2. Loan Against Trust Receipt (LTR)|
|3. Loan Against Export Development Fund (EDF)|
|4.Payment Against Document (PAD)|
|II. Export Finance||1.Export Cash Credit|
|4.Foreign Bill purchased(FBP)|
|4. Treasury||I. Primary Dealer Unit||1.Treasury Bills|
|2. Treasury Bonds|
|II. Forex & Fund Management||1.Import/Export Financing|
|Money Market Lending|
|5. Other Services||I. Letters of Credit||1. Letters of Credit-Sight|
|2. Letters of Credit-Usance|
|3. Back to Back L/C|
|II. Letters of Guarantee||1.A .payment Guarantee|
|2.Peformance ,Bid Bond|
|6. Special Services||I. Cash services|
II. Fund Transfer
III. Value added services
Bank is nothing but an intermediary between lender and borrowers. Savings and deposits are the main strength of the banks to provide loan. And the interest earned from the difference between borrowing and lending is the major portion of banks income. Banks also earn from variety of operation. Branch banking includes three operational divisions in Agrani Bank Ltd. And they are as follows:
- General Banking
- Loan and Advance
- Foreign Exchange
SWOT Analysis of Agrani Bank Ltd
SWOT analysis is the detailed study on the organization’s exposure and potential in perspective of its strengths, weakness, opportunity and threat. This facilities the organization to make their existing line of performance and also foresee the future to improve their performance in comparison to their competitors. As though this tool, an organization can also study its current position, it can also be considered as an important tool for making changes in the strategic management of the organization.
Identification of Strengths, Weaknesses, Opportunities and Threats of the Organization
- Agrani Bank has a research division
- Agrani Bank has already achieved a goodwill among the clients
- Agrani Bank provides its works force an excellent and consistent quality in every service
- Low transaction charges and diversified benefit schemes
- Employees are not motivated in some areas.
- Agrani Bank lacks aggressive advertising.
- Insufficient marketing campaigns
- Agrani Bank lacks well trained human resource in some area.
- The procedure of credit facility is too long.
- Agrani Bank can introduce more innovative and modern customer service
- Agrani Bank can recruit experienced, efficient work force by offering good working environment
- Many branches can be opened in remote location
- It has opportunity to penetrate all over the country.
- The worldwide trend of mergers and acquisition in financial institution is causing problem.
- Frequent rate devaluation and foreign exchange rate fluctuation is causing problem.
- Lots of new banks are coming in the scenario with new service.
- Government is imposing newer and harder rules and regulations
FUNCTIONS OF GENERAL BANKING
The functions of general banking department of Agrani Bank Ltd. are as follows:
Maintenance of Deposit A/Cs: Saving accounts./ Current accounts./cash credit deposits/Fixed deposits/short term deposits/margin deposits/Bond deposits/F.C. Bond deposits.
- Receipts & payment of cash.
- Handling transfer transactions.
- Operations of clearing house.
- Maintenance of accounts with Bangladesh Bank & other banks.
- Collection of Cheques & Bills.
- Issue and payment of Demand Drafts, Telegraphic Transfers and payment orders.
- Executing customers standing Instructions.
- Maintenance of safe Deposit Lockers.
- Maintenance of Internal Accounts of the banks.
- Reporting to head office about daily position.
- Saving all transaction record in computer.
- Closing and transfer of different types of accounts.
SECTIONS OF GENERAL BANKING
During my practical orientation in Agrani Bank Ltd, Malibag Branch, Dhaka, it came to the observation that general banking section is divided with the following areas.
- Account opening section
- Deposit section
- Remittance section
- Bills and clearing section
- Cash section
- Mail receive and dispatch section
- Accounts Section
Account Opening Section:
One of the vital sections under general Banking is the account opening section. Banker customer relationship begins through this section. Various tasks are performed in this section. Such as:
- Opening of different types of account.
- Issue of checkbook.
- Transfer and closing of account.
- Enquiry of account.
PROCEDURE FOR OPENING AN ACCOUNT
Major information’s are essential for identification of the account holders individually so that Banker can discharge his obligations to every one correctly and to the extent due. Following are the customer must complete the formalities:
- Application on the prescribed form
- Furnishing photographs (2 copies)
- Introduction by an account holder
- Recording of specimen signature in the specimen card.
- Mention nominee on the prescribed form.
- Furnishing nominee’s photograph (one copy)
CLASSIFICATION OF ACCOUNT:
- Saving Account (SB).
- Current Account (CD).
- Short Term Deposit (STD).
- Fixed Deposit Receipt (FDR).
- Monthly Savings Scheme (MSS).
OPENING VARIOUS TYPE OF ACCOUNT:
A. Individual/Joint Two copies of photograph of the Account holder(s) person(s) who will operate the account.
B. Proprietorship Firm
- Two copies of photograph of the Account holder (s) person(s) who will operate the account.
- Certified copy of Valid Trade License.
- Seal must be used.
C. Partnership Firm
- Two copies of photograph of the Account holder(s) person(s) who will operate the account
- Certified copy of Valid Trade License.
- Certified copy of Partnership Deed duly signed by all the Partners.
- Partnership Account Agreement (Draft enclosed)
D. Limited Company:
- Two copies photograph of the Account holder(s) / person(s) who will operate the account.
- Certified copy of the Memorandum & Articles of Association.
- Certified copy of certified or incorporation.
- Certified copy of Certified of Commencement of Business (in case of operation of the Accounts (Draft enclosed)
E. Club/ Society/ School/ College etc:
- Two copies of photograph of the Account holder(s)/ person(s)who will operate tile account
- Certified copy of the Memorandum & Articles of Association.
- Certified copy of byelaws & Regulations/ Constitution.
- Certified copy of Resolution for operation & operation of the Account.
- Up‑to date List of office Bearers / Governing Body/Managing Committee.
- Two copies of photograph of the Account holder (s) person (s) who will, operation the account.
- Up‑to date List of Members of the Trustee Board.
- Certified copy of Deed of Trust.
- Certified copy of Resolution of the Trustee Board for opening & operation of the Account.
Foreigner Currency Account (For Bangladeshi Wage Earners):
- Photocopy of tile first 07 (seven) papers of valid passport.
- Photocopy of Employment contract/ Appointment Letter/ Work Permit.
- Two copies of passport size photograph of each Account holder and nominee attested.
Note. Account Holder’s Photograph shall be attested by introducer if any or by dealing officer; Account holder shall attested photograph of Nominee. If Account intended to be opened from abroad all original papers/ document shall be attested by Bangladesh embassy except the photograph of Nominee which to the attested by the account Holder himself.
Foreigner Currency AIC (For Foreign National/ Company / Firm):
- Two copies of photograph of the Account holder for individual and operation of account holder.
- Copies of relevant pages of the passport duly attested by Dealing officer for individual and operators of the Account Holder.
- Copy of set‑vice contract/ appointment letter/work permit, if any for individual.
- Copies of the Registration in Bangladesh with Board of investment /Bangladesh Bank Foreign Joint Venture Firm.
- Copies of the Memorandum of association. Articles of association, laws, Byelaws, etc. Or Joint Venture Agreement for Joint Venture Company/Foreign Company.
- In case of partnership copy of the Partnership Deed duly attested.
- Introducer must.
- All Original Documents shall be verified by Dealing Officer.
Meaning of Deposit:
Deposit is the main part of Bank deposit. It is impossible to imagine a commercial Bank without deposit. It is desirable for every Bank to collect enough deposit, safety of deposit and free flow of deposit. The money which is collected by a bank from surplus unit money through different account is called deposit. It is noticeable that at once time current deposit is higher than fixed deposit, But with the passes of time this trend not only in Bangladesh but also all over the world is changing and fixed deposit is playing an important role in supplying Bank fund.
Objectives of Bank Deposit:
Bank mainly collects deposit from depositor for collection its fund. Besides these, there are some other reasons for mobilizing deposit.
- Collection of Bank fund: Commercial Bank mobilizes deposit and gives loan to the people. Providing loan, Bank gets interest from the debtor on the other hand to increase such income, Bank provides some interest to the depositor for attracting enough deposit
- Ensure productive investment of the scattered songs of the clients: It is seen that about every man has some savings. Banks combines this scattered savings and contributes in the development of the country.
- Extending the scope of the loan: The bank extend the scope of the loan by mobilizing deposit. Sometimes bank gives such opportunity that the depositors deposit which amount, double of that amount is given to the deposition as loan.
- Fulfilling the excess need for money: By mobilizing deposit Bank provides overdraft and advances to the client.
- Social participation: Bank performs various social activities in favor of clients and institutions.
Deposit Products of Agrani Bank Ltd
There are variations in the needs and demand of the people. It is almost impossible for banks to satisfy all these divers’ demands with a single type of account. That’s why banks generally offer the following types of accounts to satisfy customer’s demand-
- Current Deposits Accounts
- Savings Deposits Accounts
- Short Term Deposit
- Term Deposit
- Fixed Deposit
- Foreign Currency Deposit
- Monthly Savings Scheme
- Agrani Bank Ltd Sanchaya (Savings) Pension
Current account is an active account at a bank into which deposits can be paid and from which withdrawals can be made by cheque. It is a running account which may be operated upon any number of times during a working day. Generally Business men operate this account and can deposit or withdraw money at any time. It doesn’t pay any interest to the customers.
- It does not allow any interest on this account
- Opening Amount/ Initial Deposit 500
- Service Charge (yearly) 100
- Minimum Balance Requirement 500
- Current a/c may be individual, joint/ partnership or can be formed any name. It provides overdraft facility.
- It also provides facilities like collection of checks, transfer of money, rendering agency and general utility services.
Saving accounts is a bank account into which personal savings are paid. It is designed for the investment of personal savings. The savings accounts are usually operated by lower and middle class people so as to m Number of withdrawals over a period of time is limited. The withdrawing amount is not to exceed 25% of the total balance.
- This A/C mainly open a person name
- Initial deposit requires to open a savings account is TK.200.
- Minimum balance of TK. 200 should maintain in this account.
- Interest rate is 5.5%
- One cannot withdraw money not more than two times in a week.
- To withdraw more than Tk 20000 seven days notice is required.
- Service charge is not fixed.
Customer can not withdraws money more than twice in a week. If customers draw money more then 25% of the balance at a time then no interest is given for that n month. If interest accrued less than TK. 200/- for six month then no interest is given to customer.
Fixed deposit accounts are called prime liabilities of a banker, the money is payable in the expiry of a fixed period of time. The expiry time is predetermined by the customer himself. It is specified by the
In this category are included the deposit with the bank for a fixed period which is specified at the time of making the deposit. Such deposits are therefore called fixed deposits or term deposits.
A fixed deposit is repayable on the expiry of a specified period, chosen by the depositor to suit his purpose and to enable him to get back money as and when he needs it. The fixed deposit may be made for 3,6,12,24 or 36 months. As the date of repayment of fixed deposit is determined in advance. The banker need not keep more cash reserves against it and can utilize such amount more profitably. The banker therefore offers higher rate of interest on such deposits the depositor parts with liquidity for a definite period. Fixed deposits have grown in importance and popularity in our country during recent years. When a matured FDR is withdrawn, the principle amount along with the interest amount (deducting 10% tax from the total) is paid to the client.
|Fixed Deposit||Interest Rate|
|3Month to less then 6 Month||8.50%|
|6Monthto Less then 12 Month||9.00%|
|12 Month to Less then 24 Month||9.50%|
|2 Years And Above||10.0 %|
|Prime Rate: (Applicable only for Govt. Org)|
|6Month to Less then 12||7.50+Prime rate (PR)|
|Above (12 Month)||General rate+PR|
Minimum TK. 5,000 require to open a fixed deposit account. Service charge TK. 200 realized half yearly on customer’s account.
Agrani Bank Ltd Deposit Scheme (ABS)
Special advantage with this scheme is that after the scheduled period the client can withdraw the full amount or can draw pension on monthly basis. Besides the client can open account in his name in any branch.
Procedure for operation of Agrani Bank Ltd Deposit Scheme (ABS) :
- The applicant should be of minimum 18 years age and Bangladeshi national.
- The account holder can appoint one or more nominees.
- On the death of the account holder his / her nominee can withdraw the whole amount of money.
- The account holder can change or cancel his nominee through a written notice.
- On the death of the account holder, the nominees will be entitled to withdraw the deposit according to the instruction of the account holder.
- The account becomes inoperable on the death of the account holder.
- The account under this scheme should be opened within the 10th day of any month against deposit of the first installment in cash.
- Monthly installment: TK.1000,2000,3000, 4000,5000, 6000,7000, 8000, 9000, 10000
- Tenure: 5 & 10 Years.
- The monthly installment must be paid by the 10th day of every month. In case of delay a fine @TK. 2 per day of defaulted installment will be charged and the fine must be paid with the installment.
Features of the Agrani Bank Ltd Deposit Scheme (ABS):
|Monthly Installment Quantum TK.||Money of the end of 5 years TK.||Money at the end of 10 years TK.|
Total Amount=Principal amount+Interest+Bonus amount
The money will be paid out on maturity according to the table above, but Tax / Duty and other charges may be adjusted from the amount in the account.
Documents to be obtained for different types of account:
When anyone comes to open an account he has to submit some documents to the banker. Different types of document needs for different customer. Some common documents require for all types of account are:
- Introduction recommendation.
- Specimen signature card.
- Account opening agreement form.
- Two copies of Photograph of account holder and two copies of nominee (if any).
- Deposit slips book.
- Cheque-book requisition slip.
- Letter of mandate authorizing another person to operate the account on behalf of the account holder.
Certain types of documents are needed for special customers. These are:
Document requires for proprietorship business to open an account are:
- Introducers with account number.
- Valid trade license from Dhaka City Corporation, Attested copy should be submitted.
- Receipt of Tax revenue copy from Dhaka City Corporation.
Deposit processing is related mainly from the beginning of opening account to final result of all types of transaction including the withdrawal activities and cheque deposit. It is seen that all stages of transaction of a depositor are reflected in the ledger of Bank.
Steps of Deposit Processing:
New Account Section:
At the preliminary stage of opening account, this department guise the idea of types of account and the account which is profitable and suitable for him- According to the appropriate account of deposition, this department provide application form with necessary papers.
Acceptance of necessary Application, Photograph and Documents:
Fill-up application form with necessary documents, signature card and photographs are collected properly from the depositor.
This department justify the errors and whether any false, information is provided.
Permission of Manager:
After checking, if the documents are right, then they are sent to the manager. The manager guise permission to open the accounts by checking documents.
Deposit Primary Money:
A minimum amount of money has to be deposited to open a new account. In case of savings account, this amount is Tk 500 and incase of current account, this amount is Tk. 1000.
While opening a new account, against the account and name, an account number is provided to the depositor.
Delivered Cheque book, pass-book and Deposit Receipt:
Necessary cheque book, pass book, deposit receipt are provided to the depositor to record next transaction.
Book keeping: Book keeping is done for every deposit account. A page of ledger is allotted for every account where every transaction of depositor is recorded.
Depositor’s statement: The statement of transaction is provided to the depositor.
Review: To know the condition and function of account, bank reviewed the account after same interval and encourages the ‘A’ category depositor.
Interest Rate for Different Types of Deposit
|S.L. no.||Description of the Deposits||Interest Rate|
|1||Savings Deposit (SB)|
|I. City Area||4.00%|
|II. Rural Area||7.00%|
|III. From Foreign Remittance||7.00%|
|2||Short term deposit (STD)||3.50%|
|3||Fixed Deposit (FDR)|
|i. 3 months to 6 months||8.50%|
|ii. 6 months to 1 years||9.00%|
|iii. 1 years to 2 years||9.50%|
|iv. 2 years to 3 years||10.00%|
|4||JBSPS (5 Years)||9.00%|
|6||ABS (10 Years)||9.00%|
|7||APS (4/6/8/10 Years)||9.00%|
|8||CBA Fixed deposit||8.00%|
Accounts Maintenance Charge
|CD opening cha. (individual)||50|
|CD opening cha. (organization)||150|
|CD closing cha. (individual)||300|
|CD closing cha. (organization)||150|
|SB opening cha.||50|
|SB closing cha.||200|
|DPS/JBSPS closing before Maturity cha||100|
|Solvency certificate (up to 25.00 lac)||200|
|Solvency certificate ( 25.00 lac plus)||500|
The major function of commercial Banks is mobilization of fund. Other than this, banks provide ancillary services to its clients. Clients need to remit money from one place to another for their business or other purposes. Banks fulfill this need of customers by means of remittance service. Money can be remitted domestically or internationally, which known as local remittance and foreign remittance.
There are three ways of transferring fund domestically. The modes of transferring funds are:
- Pay- Order (PO).
- Demand Draft (DD).
- Telegraphic Transfer (TT).
- Mail Transfer (MT)
- SDR Pay Slip
Payment Order / Pay Order (P.O)
This is an instrument issued by the branch of a bank for enabling the Customer/ Purchaser to pay certain amount of money to the order of a certain person/ firm/ organization/ office within the same clearinghouse area of the pay order-issuing branch.
Characteristics of P.O
- The issuing branch and paying branch are same.
- Application for payment within the clearinghouse area of the issuing branch.
- This may be open or can be crossed.
Demand Draft (D.D)
This is an instrument through which customer’s money is remitted to another person/firm/organization in outside the clearinghouse area from a branch of one bank to an outstation branch of the same bank or to a branch of another bank (with prior arrangement between that bank with the issuing branch). This is an order instrument in which the issuing branch gives instruction to the payee/drawer branch to pay certain amount of money to the order of certain person/firm/organization. Commission, vat and postage is charged on issue of DD entries for issuing DD.
Telegraphic/ Telephonic Transfer (T.T)
This is a mode of transfer of customer’s money from a branch of one bank to another branch of the same bank through telegraphic/telephonic message. The issuing branch used to send the message of such remittance through telegraph/telephone adding certain code number or test number on the basis of test key apparatus developed by the concerned bank for its different branches. The drawer and the payee is required to have account with the bank in order for this transaction to take place. TT is issued against cash, check, letter of instruction etc.
Characteristics of T.T
- Issued by one branch to other branch and message is tale-communicated.
- Remittance/ transfer of money is done through tested tale-messages.
- Remittance is affected on the basis of tested message.
- Test key apparatus is required.
- Charge is Tk.50
Security Deposit Receipt (SDR)
It is used only for tender, auction etc.
CLEARING AND TRANSFERING
Clearing Department plays a vital role in General Banking. This department receives cheques, DD, P.O. etc from depositors attached with a deposit slip. Then these instruments are posted in the Computer. After posting those instruments, are segmented bank wise. Branches of ABL with in Dhaka sent instruments to the local branch for collection. Then the authorized officer of the local branch accumulates all information and the instruments (including the local branch) are segmented bank wise. All instruments are now ready for collection at the 1st clearing house. There are two types of House:
- 1st Clearing House and
- Same-day clearing House
Conditions For Same-Day Clearing
- The Instrument’s value must be over Tk.5 lac
- The respective branch of the bank must be with in 2 K.M of Bangladesh Bank.
All cheques, demand drafts and other credit instruments tendered for the credit of customers account will be delivered by the depositor at the clearing counter. Any deposits received by post will also be sent over to the clearing counter. The counter officer shall at the time of receipt examine such deposits carefully to ensure that:
- The name of the account is very clearly written on the Deposit slips.
- The particulars of deposits such as cheque numbers, names of bank etc. are properly entered on the deposit slip.
- The depositor has signed the Deposit Slip.
- On item deposited payees discharge and the chain of endorsement, are in order.
- All cheques and other instruments will be crossed immediately on receipt with the banks special crossing stamp. Items intended/selected for the next day’s clearinghouse will be branded with the bank’s clearing stamp with date. If the deposits are made at a time when it is too late for these to be presented to drawee banks the same days the stamp “Too late for today’s clearing” will be affixed on the counter foil.
- All clearing items will first be sorted out bank-wise and then entered in a computer printed slip prescribed for the purpose. These Schedules/Slips are in fact list of cheques etc. delivered by Agrani Bank Ltd to other banks through the clearing House.
- All these slips are summarized in a bigger computer print out which reflects in details the instruments etc. presented by the bank to Clearing House and contains the names and account number to which the credits will be posted. These sheets serve the purpose of a Clearing House Register.
- Bank also prepare, another summery sheet (Validation Sheet) from computer which contain the total a number of cheques etc. delivered to different banks in the Clearing House and cheques received from different banks with correct total of amount.
- The Credit vouchers should then be released for posting in the computer. It will be the responsibility of Deposit Department, however, not to allow any drawings against such items before the fate is definitely known. Reversal entries for any clearing item returned unpaid should invariably be made by a separate debit voucher.
- All clearing item will be passed through the bank’s Local Office/Main Branch’s Account with Bangladesh Bank.
- Entries to be passed by Local office/ Main Branch.
- Local Office/ Main Branch shall respond the IBDA to the debit of their account with Bangladesh Bank in a consolidated manner.
- In case of return of cheques unpaid in the Clearing House, Local Office /Main Branch shall issue IBDA on the branch which lodged the cheques in clearing to reconcile the accounts.
- All IBDAs originated in connection with Clearing House shall invariably be responded on the same day and under no circumstances shall be kept pending.
- Local Office/Main Branch shall receive cheques etc drawn on Agrani Bank Ltd branches from the Clearing House. On receipt of the cheque etc. they shall segregate the same branch-wise and issue IBDA on branches against total amount of cheque etc. and shall arrange delivery of the IBDA together with the cheques etc. within Clearing House time schedule.
- Branches shall send the cheques dishonored by them supported by IBDA issued on Local Office/Main Branch, within Clearing House time schedule for enabling Local Office/ Main Branch to return these instruments in the 2nd Clearing House (Return House).
Who will deposit Cheque for Clearing:
Only the regular customers i.e. who have Savings, Current, STD & Loan Account in the bank can deposit Cheque for collection of fund through clearing house.
Precaution at the time of Cheque receiving for Clearing, Collection of LBC, OBC & Transfer:
- Name of the account holder same in the Cheque & deposit slip.
- Amount in the Cheque & deposit slip must be same in words & in figure
- Date in the Cheque may be on or before (but not more than six months
- Bank clearing house date.
- Bank & Branch name of the Cheque, its number & date in the Deposit slip.
- Cheque must be signed.
- Signature for confirmation of date, amount in words / in figure Cutting &
- Mutilation of Cheque.
- Cheque should be crossed (not for bearer Cheque).
- Account number in the deposit slip must be clear.
- Depositor’s signature in the deposit slip.
All such instruments drawn on easily accessible local Branches of ABL (say within Dhaka city) and deposited for credit of customer’s account shall be treated as “Transfer Delivery”.
Agrani Bank Ltd is yet to introduce transfer delivery system of collection amongst its branches in Dhaka. Till such time the branches shall continue to collect proceeds through outward bills for collection procedure as laid down in bills chapter.
- Transfer Book shall be maintained for entering transfer cheques/vouchers.
- Serial number shall be allotted both on the debit and credit side of the book, which shall be required for recording the daily transactions. The same serial number shall be noted on the voucher entered in the book including their contra credit and debit voucher and or a set of credit or debit vouchers of a transaction.
- Entries in the debit and credit column of the book shall be directly made from the respective debit and credit vouchers. At the end of the banking hours the total of the debit and credit shall be arrived at and tallied with the computer figure in Transfer Head.
- Transfer Stamp is affixed on the face of voucher; Vouchers are released from Transfer book. It is balanced and signed by the writer and Book is checked and signed by the authorized officer.
- In a computerized system scroll is done by the computer system. But branch shall maintain the Transfer Book manually as a safe guard against easy detection of mistakes and issuing vouchers if any
Money deposited in cash by the constituents at the cash counter of the Bank excluding that of government transaction is known as Bank Receipt (Cash). Different types of forms are used for cash deposits for different types of accounts. Particulars of some forms are furnished below:
- Current or Savings account pay in slip
- Application for fixed deposit receipt
- Credit voucher
- Draft or mail transfer application form
- T. Pay order application form Call deposit application form
- Demand loan pays in slip.
The depositor will fill up the appropriate form properly. The concerned officer working at the general Banking counter will initial the form relating to the new account.
Receiving the cash and voucher at the cash counter; the cash officer will count cash correctly. Then the voucher will be branded “Cash Received” seal. Then the assistant cash officer will write the denomination of the notes and coins in the backside of the voucher. After that, the assistant officer will sign the voucher.
The cash officer will check up the voucher and ‑entered the amount in the cash receipt register and put the scroll number. Then the officer will sign the voucher and send to the computer department.
The officer computer department will entry the transaction into the computer and put the Posted seal and a tracer number on the voucher.
At the end of the transaction the cash officer will total the cash receipt book and the total figure should be tally with scroll maintained by the officer whose scroll will also be totaled. The physical cash received at the counter must be equal to the total figure of the scroll.
Banks payment includes all kinds of payments excluding those of treasury section. Extreme precautions must be taken at all levels through, which instruments like cheque, drafts, etc, are disposed of. All the instruments received at the general Banking counter will be preliminary checked by the dealing officer who will enter the instruments in the respective ledger. In case of cheque the following particulars will be scrutinized:
- Date (Whether post dated or anti dated)
- Amount in word and figure
- Crossed or Open
- Bearer or Order
- Style of signature as available in the ledger
- Prohibitory order or stop payment of cheques.
The Cash officer will follow the following procedures at the time of payments of cheques/other instruments over the cash counter.
- The client will submit the instruments in the computer department first. The computer officer and cheque passing authorized officer will verify the instrument and posted the instruments. Then it will be send to the cash counter.
- After getting the instrument the cash officer will verify the instruments and if necessary the cash officer can told the clients to sign in the backside of the instruments.
- Cash officer will record the denomination of notes and coins on the backside of the instruments.
- The officer will enter the cheque in the cash payments register where the denomination of notes and coins will also be recorded.
- The cash officer will give the amount to the clients at the cash counter and told the clients to count it immediately and if needed any quarry.
- All cheques drafts, debit vouchers etc. must be branded with “Cash Paid” stamp with the current date.
- After payment the cash department for the purpose of clean cashbook will send the vouchers.
- The head of the cash department is responsible for all debit vouchers being branded with the cash Paid date stamp immediately they are paid and the manager must supervise him/her in this matter as any laxity is extremely dangerous.
In case of any late payments instruments must be debited in the ledge and passed in the usual manner. It will be entered in the cash paid sheet in the above manner and cash‑book under authentication of the manger and the cash officer. It must also be noted with late mark under initial of the manager with date.
Finally all cash receipts and payments will be taken into account to calculate the cash balance of the branch we may take an example to clarify this.
But this is to notify that, at the end of the day of the Bank the amount of the cashbook and the amount of the computer should be equal. Because currently the whole Banking are doing through computer. So the clean cash of the cash department and the supplementary of the computer must be equal.
Accounts division is the nerve center of a bank. As all transactions carried by a bank is being legalized as far as accounting is concerned. If transactions were not recorded properly there would be dis-equilibrium in state of the bank. There can be imbalance in the cashbook thus the whole mechanism will collapse. The regular tasks of department are:
- To record all transactions in the cash book.
- To prepare daily fund position, weekly position, periodic statement of affairs.
- Prepare necessary statements for reporting purpose.
- To pay all expenditures on behalf of the branch.
- Make salary statements and pay salary.
- Branch to branch fund remittance and supporting accounting treatment.
- Prepare statements for customer.
- Publishing basic data of the branch etc.
General practices of an Accounts Department:
BASIC maintains slip system of accounting.
At the day end all vouchers are sent to the accounts department by the respective department from where vouchers are originated. On the next day an `activity report’ is received from computer department. The activity report is the detail statement of all the transactions carried by the branch of a particular date. It is the summary of all account position. It also displays cash, clearing, transfer position, individual deposit account position etc.
Accounts department make provision for different deposit accounts. Provisioning means keeping the record of expense, which has occurred by non-cash way. This department also made depreciation of assets that is one kind of non-cash expense
Statement Prepared in Account Section:
The following weekly/ monthly/ quarterly and half-yearly statements should be submitted to Central Accounts Division of Head Office:
|SL No||Particulars of Statement||Period||Last date of submission to HO.|
|01||Weekly Position||Weekly||By every Saturday|
|02||S.B.S.—1||Monthly||10th next month|
|03||Sector Corp.||Monthly||10th next month|
|04||S.B.S.—2||Quarterly||5th next month|
|05||Quarterly Statement of Scheduled Bank||Quarterly||7th next month|
|06||Statement of Bearer Certificate of Deposit||Quarterly||5th next month|
|07||Statement of Deposit Landing and Borrowing||Half Yearly||7th next month|
|08||Business Performance report||Monthly||1st next month|
|09||SLM Statement||Monthly||1st next month|
Findings and Analysis
During my three months internship in the Agrani Bank Ltd, Malibag Branch, Dhaka following positive things are found from my observation:
- Commercial Area But the Agrani Bank Ltd Lt., Malibag Branch from these, Branch is successfully operating its activities.
- Recently , this Bank has come into competition with the other commercial Bank .
- Branch Manager puts Conscious efforts to achieve the targets and knows how to motivate employees and how to represent the Bank well in the local community.
- As the bank uses some modern technology such as: Fax, Telex & other electronic devices, hence its service is better than other banks.
- The controlling officers are effective in providing necessary guidance and support to the branch.
- The strategy and policy of Branch Manager are effective. So in spite of cut throat competition, the bank has a sound position in the competitive environment
- Employees are very friendly about customer service in ABL
- Account opening process is very hazardous. It discourages people to open new accounts.
- Customers are not satisfied about the congested area of the branch.
- Strict controlling of Central Bank in on the local bank
- Customers are not treated equally; persons referred by higher official get priority. This disrupts the normal process of the service.
- ABL is not upgrading them with market. Where newer banks are coming with newer dimension of banking. It might encourage other bank take away its position.
- Day by day new upcoming banks are coming with many new services, which are a threat for the bank.
There are a number of nationalized and foreign banks operating their activities in Bangladesh. Among them Agrani Bank Ltd is one of the leading commercial bank.
Agrani Bank Ltd has introduced a new dimension in the field of innovative and benevolent banking in our country. The bank has successfully made a positive contribution to the economy of Bangladesh. Its profit is gradually increasing. It plays a great role in collecting scattered Deposit, Loan settlement and International Trade etc. The Bank ensures quality services to the customers. For better growth and healthy economic position, it should introduce new and lucrative long-term credit schemes especially for new investors and schemes for poverty alleviation like micro credit.
I hope Agrani Bank Ltd will do more work for socio-economic development besides their banking business. To keep pace with ever-changing uncertain domestic business environment and face the challenges of revised global economic scenario, the bank should be more pro-active and responsive to introduce new marketing strategy to hold the strong position in home and abroad.
For the future planning and the successful operation in its prime goal in this current competitive environment I hope this report can provide a good guideline. I wish continuous success and healthy business portfolio of Agrani Bank Ltd.
However the satisfaction level of Agrani Bank Ltd is good enough. But some customers have expressed their dissatisfaction about the Agrani Bank Ltd in various aspects. It has a profound effect on the overall satisfaction level of Agrani Bank Ltd. Following are the problems found which Agrani Bank Ltd faces:
- Label of adoption to the modern technology is poor. Like The great problem of Agrani Bank Ltd is the absence of Credit Card, ATM Card, Debit Card, on line banking service. On line banking service means any one can deposit or draw money in any branch of Agrani Bank Ltd.
- Agrani Bank Ltd is giving the lowest interest rate to its saving account holders. Lowest interest rate makes them demoralize and consequently they are shifting their accounts to other banks to make more money.
- Lack of promotional activity is another problem that is responsible for the decline of the customers’ satisfaction of Agrani Bank Ltd. It has been found that people could hardly recall any advertisement of Agrani Bank Ltd.
- Some customers said that the services Time of Agrani Bank Ltd are comparatively higher than other bank.
- As the bank is moving towards semi-multinational culture, some employees are resisting the change, as they are accustomed to traditional banking system and do not want to change.
- Nother important problem is most of the officials who are working in the Foreign Exchange, General Banking and Credit Department are not commerce background.
- Most of the people of the Bangladesh are poor. But Agrani Bank Ltd does not provide any special facility to them. They do not have any short-term scheme
- Like Micro credit for poor people. Moreover they do not have merged Some rural area.
- Interest rate is same for both high-risk borrowers and low risk borrowers. It is another problem of Agrani Bank Ltd.
- There is lack of Training program which necessary for the officials to update themselves.
- Maximum Employee are older so they do not serve quickly.
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