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service. A bank doesnt produce any tangible product to sell but does offer a variety of financial
services to its customers. General banking is the starting point of all the banking operations. It is
the department, which provides day to day services to its customers.
Now a day, general banking, loans and advances and foreign trade plays a vital role in banking.
The general banking consists of deposit, pay order, Term Deposit Account, FDR Accounts, SND
Accounts, Clearing house, Clearing activities of branches, Inward and Outward clearing,
Endorsements, Outward Bill for Collection (OBC), Telegraphic Transfer (TT), IBCA, IBDA.
Now we are living in the age of competition at anything in any places. From that tendency
recently Education is also in the age of competition. So the procedures and standards of teaching
are upgraded by different universities and institutions in our country. In respect to that, internship
is mandatory for our MBA program offered by The University of Jahangirnagar. This program is
a partial fulfillment of our MBA curriculum. To do so I decided to complete my internship in
BASIC Bank Limited. In connecting, HRD of BASIC Bank Limited sent me to the
Dhanmondi Branch and assigned to prepare this report. I was sent to BASIC Bank Limited to
familiarize with day to day affairs of the bank from 21th November 2012 to 21th January 2013.
This report has been prepared in the light of practical as well as theoretical knowledge. Also it is
prepared under the guidance & supervision of Mr. Nilanjan Kumar Saha, Assistant Professor,
Department of Finance & Banking, Jahangirnagar University.
1.2
1.3
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Direct communication with the clients of BASIC bank Ltd, Dhanmondi Branch;
Exposure on different desk of the bank such as customer care, Loan & advances,
general banking ;
1.4
Despite all out co-ordination from the bank officials, I have faced some limitations. The notable
some of these are:
Learning all the banking functions within just Three (3) months was really tough.
Another limitation of this report is Banks policy of not disclosing some data and
information for obvious reason, which could be very much useful.
Sufficient records, publications were not available as per my requirement.
3 months are very short time to prepare this.
Lack of opportunity to work in all the departments for a longer time.
Up to date data are not available.
Lack of opportunity to visit more than one branch
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CHAPTER Two
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Banking in Bangladesh
Since early British rule, the history of banking in Bangladesh territory shows that the traditional
trade-networks developed before the banks invaded rural areas. And the banking services have
slowly flourished in Bangladesh territory. Even today, in many places, moneylenders provide
credit services. Small shopkeepers and businessman use informal credit at high interest rate,
traditional Mahajan,s money lending business gradually declined due to expansion of bank and
the micro credit programs of NGOs, Cooperative banks and government agencies.
Foreign banks:
The state bank of India opened one branch July -September 1975. In 1975, the four foreign banks
operating in Bangladesh were: American Express International Banking Corporation, Grind Lays
Bank, The Chartered Bank and the State Bank of India. Now there are more than 15 foreign
banks.
The historical process shows the influence of the various social groups in the governance of the
country and the banking systems. During the British regime banking was concentrated only in
the areas of commercial and administrative importance. With the independence of India and
Pakistan, the banking sector had to be reshaped. The government of Pakistan had to take major
initiatives for the growth and extension of banking services to the different sectors of the
economy and also to different regions.
Independence of Bangladesh was yet another major change in the banking sector. Immediately
after independence of Bangladesh, banks started their operations under full government
ownership. Later, some of the banks were denationalized and the government allowed banks to
be established in the private sector. Banking operations have been diversified and a number of
specialized banks were established. Development finance institutions also exist to supplement
the banking sector in an effort to boost the economy; government has been following a pragmatic
policy relating to the banking sector in Bangladesh.
Despite many odds and problems now facing banking sector, it is expected that it would be able
to meet up the challenges ahead, particularly of the nest century.
Bank has renamed as Bangladesh Small Industries and Commerce (BASIC) Bank Limited. Earlier it was Bank of
Small Induetries and Commerce (BASIC) Bangladesh Limited.
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Bangladesh took over 100 percent ownership of BASIC bank on 4 th June 1992. Thus, the bank is
state-owned. However, the bank is not nationalized; it operates a private bank as before.
BASIC bank is unique in its objectives. It is a blend of development and commercial banks. The
Memorandum and Articles of Association of the bank stipulate that 50 percent of loan able funds
shall be invested in small and cottage industries sector.
Capital Position
Authorized capital
Paid up capital
The Bank is required to transfer 20 percent of its net profit before Tax to Capital Fund as per the
Banking Companies Act 1991.
2.2
Technical support to Small Scale Industries (SSIs) in order to enable them to run
their enterprises successfully.
Micro credit to the urban poor through linkage with Non Government
Organizations (NGOs) with a view to facilitating their access to the formal financial
market for the mobilization of funds.
In order to perform the above tasks, BASIC works closely with its clients, the regulatory
authorities, the shareholders (GOB), banks and other financial institutions.
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2.3
2.4
2.5
To employ funds for profitable purposes in various fields with special emphasis on
small-scale industries
To search for newer avenues for investment and develop new products to suit such
needs
To establish linkage with other institutions which are engaged in financing micro
enterprises
To achieve its organizational goals, the bank conduct its operation in accordance with the major
policy guidelines laid down by the Board of Directors, the highest policy making body. The
management looks after the day to day operation of the Bank.
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A) Board of Directors:
The Government holds 100 percent ownership of the bank. The Government of Bangladesh
appoints all the Directors of the Board. The Secretary of the Ministry of Industries is the
Chairman of the Bank. Other Directors of the Bank are high government and central bank
executives.
The managing director is an ex-officio member of the board of directors. There are at
present 7 (seven) Directors including the Managing Director.
B) Management:
The Managing Director heads the management. Two General Managers and departmental
heads in the Head Office assist him. BASIC is different in respect of hierarchical
structure from other banks in that it is much more vertically integrated as far as reporting
to the Chief Executive is concerned. The Branch Managers of the Bank report directly to
the Managing Director and, for functional purposes, to the Heads of Departments.
Consequently, quick decision making in disposal of cases is ensured.
2.6
BASIC bank is well prepared to and capable of meeting the demand for a broad range of banking
services. It has got adequate resources, both human and physical, to provide the customers with
the best possible services.
Money counting machine for making cash transactions easy and prompt.
Forty out of 55 branches are authorized dealers of foreign exchange. This facilitates
speedy disposal of transaction of exports and import trade.
2.7
MONETARY / FINANCIAL RESOURCES
Like any other financial intermediaries, BASIC is no exception in performing its core functions
viz. mobilization of fund and utilizing such fund for profitable purposes.
A. Mobilization of fund
The main sources of fund for BASIC are:
i.
i.
Deposit
ii.
Borrowing
Deposit
Deposit is the mainstay of BASIC Banks sources of funds. The following includes the
usual types of deposits of the bank:
a) Current Deposit
b) Savings Deposit
c) Term Deposit
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ii.
Borrowing
B. Utilization of Fund
BASIC utilizes its funds in accordance with its organizational goals and corporate strategy. Main
use is for lending to industrial and trade sectors. Maintenance of cash and statutory liquidity
reserve with the Bangladesh Bank covers 20 percent of demand and time liabilities. Placement of
funds in NOSTRO ACCOUNTS to handle foreign trade and investment in money market is also
done as usual.
2.8
HUMAN RESOURCES
BASIC bank has a well-diversified pool of human resources, which is composed of people with
high academic background. As of 31st December 2000, the total employee strength is 453. The
strength is 345 excluding the menial staff. Most employees are comparatively young in age yet
mature in experience. And also their level of education comprises 55.07 % post-graduate, 42.90
% graduate and rest under graduate. BASIC has been investing its resources with a view to
developing an efficient and professional work force. Two approaches are mainly in this regard:
Training and Fresh Recruitment.
Training: Intensive training program, on a regular basis, is being imparted to employees of both
management and non-management levels to meet the challenges in the banking industry and to
help employees to adapt the changes and new working conditions. Human resource is the main
driving force and quality human resources are the key sources for the success of today's banking
business. Keeping this view in mind and recognizing the importance of training for professional
excellence BASIC Bank Ltd. has established its own training institute in 2005 with modern
facilities. In 2008 the institute arranged 27 training courses and provided training to as many as
517 employees of the bank. To cater to the needs of the employees and to keep pace with demand
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of the time it will continue to arrange regular training courses in the days ahead. During the year
2008, a total of 602 employees of the Bank were provided with training in various fields. Out of
them 11 employees participated in training courses held abroad. In 2007 total 122 employees of
various stages were given promotion which is almost 17.00 percent of total.
Fresh Recruitment: The bank follows a strict recruitment policy in order to ensure that only the
best people are recruited. The bank, so far, has recruited four batches of entry-level management
staff, all of whom have excellent academic background.
2011
2010
2009
2008
2007
2006
(Million Taka)
Authorized Capital
5,000.00 2,000.00
Paid-up Capital
2,357.59 1,964.65
3,124.17 2,509.78
Shareholders' Equity
5,481.76 4,474.43
Fixed Assets
364.46
283.12
232.65
228.36
196.11
945.00
154.52
Total Assets
Deposits
2,788.15 2,718.46
2,875.16
1,708.4 1,385.81
830.06
(Million Taka)
Gross Income
8,825.20 6,120.53
Gross Expenditure
6,476.70 4,403.49
2,348.50 1,717.05
1,568.34 1,534.11
976.11
660.93
5,987.61 4,948.64
648.85
1,011.62
282.96
554.14
Others
Import Business
549.95
808.14
(Million Taka)
47,087.80 42,205.90
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Export Business
33,061.10 23,998.80
Financial Ratios
(Percentage)
10.13
9.41
13.48
12.02
12.91
11.98
8.75
9.08
11.37
7.81
9.23
10.34
14.28
12.06
24.67
47.70
49.10
40.42
87.74
94.08
84.81
71.07
69.69
78.89
108.22
81.55
116.44
114.69
109.70
112.99
1.40
1.24
1.41
1.30
.83
1.94
11.06
10.80
12.57
10.87
7.97
19.31
139.76
95.15
135.79
137.08
176.80
211.72
19.61
14.95
18.79
19.68
11.70
27.82
54.67
56.78
56.93
59.32
56.73
53.43
45
34
32
31
30
28
1132
964
776
735
721
651
Number of Branches
Number of Employees
(Million Taka)
Deposit per Employee
55.35
51.10
44.46
52.20
44.31
37.00
50.25
48.07
37.71
37.10
30.88
29.19
2.07
1.78
2.02
2.09
1.51
1.55
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STRENGTH
WEAKNESSES
OPPORTUNITIES
THREATS
Strength:
The main advantage of BASIC Banks credit policy is its conservative approach. The
entire policy is designed in a way that, it could always avoid default risk. In the credit
policy all kinds of documentation process, appraisal techniques are designed so that the
bank officials can take no excess risk.
In the credit policy top management are assigned adequate power to monitor the credit
operation at the branch level.
In most of the government bank we have seen that, the head office is not contributing
more for the supervision of the loans and advances. But in BASIC a handful number of
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top officers are engaged in monitoring day to day operation, which is reducing the
number of errors.
In the credit policy it has been clearly specified that, 50% of the total fund should be
invested in the in small and cottage industries for short time. And we all know short-term
loans are more secured than the long term. And also small investors are much more
honest than the large investors. So for this policy BASIC Bank is getting competitive
advantage.
All the investors know that, it is very difficult to get loan from BASIC Bank. They have
to satisfy the concerned body and should be very optimistic about the future of their
project. If any kind of loopholes exist in their procedure it will be very tough for them to
get any loan from the bank. This policy gives the bank small but strong borrower
portfolio that is important to keep the classification rate low.
Not only that, BASIC Bank is the one of those banks, which never takes any kind of,
uncovered risk in dealing with foreign trade. They provide the foreign trade facilities only
to their prime clients.
Weaknesses:
The technique that is being used in credit analysis is not adequate. Now-a-days it is not
possible to justify a client by analyzing only their projects production capacity. It is
important to analyze their financial statement and market share and make sure that the
project will last for long. BASICs credit policy does not clearly specify these techniques.
In the credit policy no emphasis is given for mobilizing deposit from private sources. But
private sources are the least costly sources and using it is possible to earn more profit
from investment.
Consumer credit is the most profitable business now from where bank can derive a lot of
service charge. BASIC does not provide such credit.
Opportunities:
Bangladesh is a country where it is very difficult to establish hi-tech industries because of
high capital asset cost. So the government of Bangladesh and other international bodies
are convincing to establish small and cottage industries first which will make the ground
for huge investment. As a result the numbers of small industries are increasing day by
day. And BASIC has a huge chance to progress if it can hunt this sector.
Not only that, international organizations and donor countries are continuously
convincing the government of Bangladesh to attenuate the high classified loan rate. Now
they are including the clause of reducing the classified rate before sanctioning donation
or loan to the country. As BASIC bank is successfully keeping the classification rate low
it is possible that, it will get international assistance from ADB and from other
organizations. And obviously these funds will have lower interest rate by which the bank
will be able to earn handful profit.
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Threats:
From 1990 the core concept of banking in Bangladesh is changing. Now banks are going
to the customer with services and try to convince them by it. Most of the banks have
increased its service range significantly to attract its clients and to satisfy them properly.
Along with that, now the banks are trying to accumulate more funds from the middle
class group. Alike insurance company most of the banks also have employed marketing
agents to convince the mass. All of said situation is happening because of the increase in
number of banks in the country and competition among them.
BASIC bank is not very keen in marketing its product. And in credit policy, it also not
specified significantly. Not only that, it does not have any marketing plan to grab the
market after 5 or 10 year. So if the bank does not change this attitude its profit will be
reduced for the abnormal competition in the market.
And also if the government sells its entire share to the private sector the bank will face
huge pressure from its competitors.
CHAPTER THREE
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GENERAL BANKING
GENERAL BANKING
eneral Banking Department performs the core functions of the bank. It deals day to day
transactions. It takes the deposit from the customer and meets the customer demands for cash by
honoring their checks. Broadly, it has the following core heads-
2.
3.
4.
5.
6.
B.
1.1.1
This part covers only following types of accounts1. Savings Bank Account
2. Current Account
3. Short Term Deposit (STD) Account
Withdrawal amount should not be more than 1/4 th of the total balance at a time and
limit twice in a week;
Interest rate is 7.5% including 10% excise duty on interest rate. Interest paid twice in
a year depending on monthly minimum balance. When money is deposited within 5
of the following month, then it is counted as monthly minimum balance. If the
interest amount is more than Tk. 200 or more, the bank is paid the amount to the
customer. Otherwise it is treated as Banks Shadow Profit;
Can open the A/c individually or jointly. In case of joint a/c, Joint signature is
required if not authorized otherwise;
Minor (For withdrawal purpose), lunatic, insolvent, pardanshin women (Not
mandatory) cannot open such type of account.
Current Account
Current account is purely a demand deposit account. There is no restriction on withdrawing
money from the account. It is basically justified when funds are to be collected and money is to
be paid at frequent interval. It is most suitable for private individuals, traders, merchants,
importers and exporters, mill and factory owners, limited companys etc. Some Important Points
are as follows-
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3.1.3
Declaration of proprietorship.
Trade licence.
Tax Identification No (TIN) directed by Bangladesh Bank.
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In case of Societies/Clubs
Certified copy of Registration certificate under the societies Registration Act, 1962.
Certified copy of Resolution for opening and operation of account.
Certified copy of Bye-laws & Regulations/ Constitution.
Power of Attorney.
The account opening form is to be filled in and signed by either of the parents or the
legal guardian appointed by the Court of Law & not by the Minor.
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3.1.4
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A customer can obtain the statement of his A/C by submission of an application in prescribed
balance enquiry receipt. Normally it is supplied two times in a year. In addition, customer can
know his current deposit position informally.
3.1.6. TRANSFER OF AN ACCOUNT
Account holder may transfer his account from one branch to another. For this, he/she must apply
with proper reason to the manager of the branch where he is maintaining account. Manager then
requests to the manager of that branch where the A/C holder wants to transfer his account.
Besides, he also sends original copy of account opening form and SSC (Specimen Signature
Card) and photocopy of application for transferring the account with the balance remained in the
account.
An account may close When the customer desirous to close the account.
When the account is inoperative for a long time.
In case of customers death, insanity or insolvency.
When the court on that particular A/C issues Garnishee Order.
To close an account, the checkbook is to be returned to the bank. BASIC bank charges Tk. 200/=
for the same by debiting the amount from his account and rest amount is then paid to the
customer. Necessary entries are given to the account closing register and computer. Finally make
sure that A/C holder is completely free from all dues.
Table-4.1: Excise Duties Applicable: For All Kinds of Deposits
Sl. No. Deposit Amount Limit
Charge
3.
Up to 10,000
Zero
2.
10,001 to 1,00,000
Tk. 120
Charge
3.
1,00,001 to 10,00,000
Tk. 250
4.
10,00,001 to 1,00,00,000
Tk. 500
5.
1,00,00,001 to 5,00,00,000
Tk. 2500
6.
Tk. 5000
Source: SRO no.137-Aine/96/248-excise, date 28-7-96, NBR
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FDR Account
Fixed deposits are time deposits or time liabilities. These are the deposits in which an amount of
cash is deposited in Bank for a fixed period specified in advance. Before opening a Fixed
Deposit Account a customer has to fill up an application form which contains the followings
Amount in figures
Time period
Rate of Interest
Date of Issue
Date of maturity
Signature (s)
F.D.R. no.
In case of FDR Account, the bank does not have to maintain a cash reserve. So, BASIC bank
offers a high interest rate in these accounts. The revised interest rates for FDR effected from
January 31, 2012 followed by BASIC area)
b)
c)
d)
For 1 month
For 3 months
For 6 months
For 24 months
@ 12.5 %
@ 12.5 %
@ 12.5 %
@ 12.5 %
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In case of encashment of FDR [say for Tk.X ] on maturity, following accounting treatments are
givenInterest on FDR A/C -------------------------------Cr. [say Tk. P]
Excise Duty on FDR -------------------------------Dr [say Tk. Q]
10 % Income Tax on interest --------------------- Dr. [say Tk. R]
FDR A/C ---------------------------------------------Dr. [Tk. (X+P-Q-R)]
Cash A/C ---------------------------------------------Cr. [Tk. (X+P-Q-R)]
If the customer wants to draw the interest only, then the following entries are given
Interest on FDR A/C --------------------------------Dr.
Cash A/C ---------------------------------------------Cr.
Renewal of FDR
Customer supposes to inform the bank in writing 15 days before the maturity date for
encashment. If not, bank normally renews the amount just after the maturity date. Renewal will
be for previously agreed maturity period.
Loss of FDR
If the instrument is lost from the possession of the holder, the holder is asked to fulfill the
following requirementsa) Holder should inform the bank immediately
b) Record a GD (General Diary) in the nearest Police Station.
c) Furnish an Indemnity Bond
On fulfilling the above requirements, BASIC bank is then issued a duplicate FDR.
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Table-4.2:
Period
Pre-mature Encashment
Before 30 days
01
3 months
02
03
6 months
Interest Rate
No Interest
SB Rate
Before
maturity
but Interest payable at 3 months Rate for
completes 3 months
a period of 3 months
Before 3 months
SB Rate
12 months
04
24 months
SB Rate
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3.3.1
Pay order is an instrument, used to remit fund within a clearing zone. Unlike cheque, there is no
possibility of dishonoring PO. The PO can only be encashed through the branch that has issued
the instrument.
Collecting Bank
sends an IBDA
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Note: Before payment is made, it is duty for issuing bank to examine whether endorsement was
given by the collecting bank or not. If not, dishonor the instrument and marking the instrument
Endorsement Requirement.
The Payee deposits it to his
Collecting Banker
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Cancellation of PO
The following procedure is followed to refund the pay order by cancellation:
1.
2.
3.
4.
5.
6.
7.
Submit written request to refund the pay order attaching therewith the original PO.
Verify purchasers signature with the original application form on record.
Manager/ authorized persons prior permission is required before refunding the
amount of pay order.
Pay order should be affixed with a stamp cancelled under proper authentication
and the authorized officers signature on the pay order.
No charge is created for cancellation. Refund only the pay order amount.
The original entries are to be reversed with proper narration.
Record the cancelled pay order in the Pay Order Issue Register.
On fulfilling the above requirements, BASIC bank is then issued a duplicate pay order and
marked In lieu of. Banker will also mark stop payment on the Bills Payable Register.
PO Charge
A commission of TK.40/= is charged for a pay order.
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3.3.2
After giving these entries an Inter Bank Credit Advice (IBCA) is prepared which contains the
controlling number, depicted that the branch is credited to whom it is issued. An IBCA implies
the following entriesH/O A/C issuing branchDebit
Drawn on branchCredit.
DD Working Procedure: Shows in a Flow Chart
Applicant has an A/C
with BASIC bank
Payment Process of DD
After receiving the instrument, the IBCA lodgment is done by the branch. Necessary entries are
given in DD Inward Register. Controlling number of the IBCA should match with the serial
number of this register. The following accounting entries are made in following cases-
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Cancellation of DD
To cancel an issued DD, the client has to submit an application. Issuing branch then sends an
Inter Branch Debit Advice (I.B.D.A.) to the drawn branch against previously issued Inter Branch
Credit Advice (IBCA).
After that the following entries are givenH/O A/C drawn on branch-------------------------Dr.
Clients A/C ----------------------------------------Cr.
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Issuing of Duplicate DD
If the customer wants a duplicate DD, he then is asked to do the following formalities1. Throwing an application immediately by the original DD holder.
2. Making a General Diary (GD) in the nearest Police Station.
3. Furnishing an Indemnity Bond.
4. Put a CAUTION mark in the register.
5. Inform to the Head Office by the issuing branch.
6. Inform all the branches by the HO for stop payment.
7. Issue a new DD (Put the same DD no. and mark DUPLICATE).
DD Charge
Commission @ 0.15% but minimum Tk.50/=.
Postage charge Tk. 20/= (Fixed).
DD cancellation charge Tk. 50/= (Fixed).
3.3.3
Sometimes the remitter of the funds requires fund immediately. In that case, the banker is
requested to remit the funds telegraphically. Different modes are Telegram, Telephone, Telex,
Fax. Telegraphic Transfer is the most rapid and convenient but expensive method. The drawer
and the payee should have accounts with BASIC bank. TT is issued against cash, cheque, and
letter of instruction.
Flow Chart Shows How TT Works (Outward)
Applicant has an
account with BASIC
TT Charge
Commission @ 0.15% of the Principal Amount but minimum Tk.200/=.
Telex charge Tk. 50/= (Fixed).
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CHAPTER Four
SECTION
SECTION
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4.1
SECTION
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.
Flow Chart Shows Collection Procedure
Received seal is stamped on the counterfoil of the
pay-in-slip.
Gets total from NIKASH2 and also get total from Pay-in-slip.
If both are same, sort the cheques according to
banks.
Get all the schedules from
NIKASH2
Affix schedules to the corresponding Banks
cheques.
After that, the following entries are given and a debit voucher is preparedBalance with Bangladesh Bank------------------Debit
Customers A/C ----------------------------------------Credit .
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2)
3)
4)
5)
The check should not carry a date older than the receiving date for more than 6
months. In that case it will be a Stale Check. Again the check should not be a Post
dated one.
The amount both in words and figures of the pay-in-slip should be the same and also it
should be in conformity with the checks amount both in figures and words.
The name mentioned both in the check and the pay-in-slip should be the same.
The check must be crossed.
Collecting banker must check whether endorsement is done properly or not.
ENDORSEMENT
IN CASE OF
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Collecting bank can collect it either by its branch or by the drawers bank. They will forward the
bill to that particular branch. OBC number will give on the forwarding letter. Now following
procedures will take place in case of the following two cases.
i.
ii.
iii.
b)
i.
ii.
iii.
C)
Branch sends the bill direct to the branch of BASIC by OBC schedule.
Request them to send the proceeds by IBCA and collect the bill.
That branch of BASIC can collect the through clearing house arrangement
exists there.
ii.
iii.
iv.
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4.2
CLEARING
According to the Article 37 (2) of Bangladesh Bank Order, 1972, the banks which are a member
of the clearing house are called as Scheduled Banks. The scheduled banks clear the cheques
drawn upon one another through the clearing house. This is an arrangement by the central bank
where everyday the representative of the member banks sits to clear the cheques. For clearing
there is a department in every Bank. This department receives cheques, drafts and like
instruments from its customers for the purpose of collection with a deposit slip over the counter
crediting their accounts. Clearing of cheque is done through the clearing house in Bangladesh
Bank. Everyday the first hour starts at 10.00 a.m. and returns house at 5.00 p.m.
BASIC MainBr.
Main Branch
sends the bills
to BASIC Main
Branch with an
IBDA
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If cheques are returned, BASIC Bank Main Branch passes an IBDA to Main Branch. Then the
necessary accounting entries will beHO A/C (Main Br.) .....Debit
Respective A/C .Credit.
a)
Entry passed in
OBC register of
that branch
Cheques drawn on another Bank which is situated within clearing house area.
Mirpur
Branch
collects cheques.
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CHAPTER FIVE
Cash Section
Cash Section
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Cash Receipt
Cash Payment
CASH RECEIPT
v.
Accounting treatment -
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CASH PAYMENT
5.2
Some important check points for making the payment are as follows-
1.
Endorsement
Endorsement is done by putting signature of the drawer on the back of the negotiable
instrument for the purpose of negotiation. By blank endorsement, an order instrument is
made as bearer. BASIC bank limited endorses the instrument in the following ways-
ENDORSEMENT
IN CASE OF
Pay to Mr.X
Received payment
2.
Crossing
Generally two types of crossing are practiced, namely- General Crossing and Special
Crossing. Basically it gives a direction to the paying bank not to pay the check amount over
the counter. General crossing includes A/C payee crossing only. Drawing two parallel and
transverse lines do it. On the other hand, special crossing is like general crossing but in
addition bank name is also mentioned. This gives the direction to the same to pay the check
only to the banker, whose name appears in the crossing or to his agent.
ii.
iii.
iv.
v.
Customer first deposits the check (s) to the cash section. Authorized individual
checks whether it is materially altered, proper endorsed, crossed or not. Being
satisfied the total requirements; he passes it to the computer for checking the
balance. Operator verifies the check leaf security no. If matched, then operator
signs. Otherwise noticed to the individual for stop payment;
Authorized officer is then verified the signature with the Specimen Signature Card
(SSC);
Send the instrument to the computer section once again for posting;
Cash officer is then asked the bearer to sign on the back of the instrument. At the
same he just enters the payment details in his register and pays the money to the
bearer;
At the end of the day, these information must be tallied with computer postings to
ensure the correctness of payment.
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Accounting treatmentWhen cash paid, the following entries are madeParty A/C.Debit
Cash A/C..Credit
Dishonor of Cheque
If the cheque is dishonored, BASIC bank sends a memorandum (cheque return memo) to the
customer stating the reason in the following wayi.
ii.
iii.
iv.
v.
vi.
vii.
viii.
ix.
x.
xi.
xii.
xiii.
xiv.
xv.
xvi.
xvii.
xviii.
Refer to drawer
Not arranged for.
Effects not cleared. May be presented again.
Exceeds arrangements.
Full cover not received.
Payment stopped by drawer.
-----------------Payees endorsement irregular/ illegible/ required.
----------------- Payees endorsement irregular/ require Banks confirmation.
Drawers signature differs/ required.
Alteration in date/ figures/ words requires drawers full signature.
Cheque is post dated/ out of date/ mutilated.
Amount in words and figures differs.
Crossed cheque must be presented through a bank.
Clearing stamp required/ requires cancellation.
Addition to Banks discharge should be authenticated.
Cheque crossed Account Payee Only
Collecting Banks discharge irregular/ required.
------------------------------------------------------
If the check is dishonored due to insufficiency of funds, BASIC bank charges Tk.100/= as
penalty.
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CHAPTER Six
Account Section
Account Section
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CHAPTER Seven
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8. Flexible banking hour attracts more clients doing banking transactions with the branch. In
some cases, customers, coming outside the banking hour can honour the cheque without
delay. As per Bangladesh Bank Order, transaction hour is now9am to 2 pm (During Romadan) and
10 am to 4 pm (Normal)
On the other hand, personnel dissatisfaction is also observed. To resolve this problem, bank can
introduce some monetary awards/ incentives to the cash related people.
Conclusion
Banking sector is the chief financial Intermediary in a country. It is a very challenging institution
and in age of globalization and free trade, the process and the system of running a bank is
changing. BASIC Bank Limited already managed itself with this changing environment. The
company strategies are clear and concise. Their return is pretty good. If the company goes this
way, one can expect that in near future BASIC Bank Limited may become one of the top
performers.
From the discussion it can be concluded that BASIC Bank Limited playing an important role in
the economic development of the country and it has a prospect future to have a very good
position in the banking sector. To do this it should increase promotional activities to reach to the
people easily. From the learning and experience point of view I can say that I really enjoyed my
internship at BASIC Bank Limited. from the very first day.
.
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ACRONYMS
AD
Authorized Dealer
AWB
BASIC
BGMEA
BB
Bangladesh Bank
BCC
BL
Bill of Lading
CC
Cash Credit
CCI & E
C&F
CIB
CLP
CRF
EBL
EPB
ERC
HOCC
HS Code
IBCA
IBCT
IBDA
ICD
ID
International Division
IMP Form
Import Form
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LIM
LTR
MBM
MSI
OBC
PAD
PRC
SOD
Secured Overdraft
SSI
Small-scale Industries
SWIFT
TIN
TOD
Temporary Overdraft
UCPDC
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