CHAPTER: ONE

Introduction

1.1 Background of the study

Internship is a prerequisite for completing the practical side to fulfill the MBA program. Theoretical sessions alone cannot make a business student efficient and perfect in handling the real life business situation. Only a lot of knowledge will be little important unless it is applicable in practical life. So we need proper application of our knowledge to get some benefit from our theoretical knowledge to make it more fruitful. When we engage ourselves in such fields to make proper use of our theoretical knowledge in our practical life situation, only then we come to know about the benefit of the theoretical knowledge. Such an application is made possible through internship. The internship program has the following three phases: 1) Orientation of the organization: to introduce the internee with the structure, function and performance of the organization. 2) The project part: pertaining to a particular problem or searching topic matching with the internees capacity, interest on the organization. 3) The report writing: to summarize the internees analysis finding and achievements in the preceding two phases.

1.2 Objective of the Study

The objectives of the report is to make us known the practical situation of commercial banks of Bangladesh in overall activities and prepare me to face the complex situation of banking in this country .The primary objective of this report is to commonly with the requirement of JBL. However the objectives of this study are something broader. Objectives of the study are summarized in the following manner. General objectives: The general objective is to prepare and submit a report on Operational procedures of Banking: A Study on JAMUNA Bank Ltd.

Specific objectives: To apply theoretical knowledge in the practical field. To present an overview of JAMUNA Bank Ltd To develop our skill on the banking sector To earn valuable knowledge about the general banking system To know the customer service of banking sector. To observed the practice of modern technology in banking sector. Practical knowledge about transaction. To assess the strength and weakness. To identify possible areas of improvement

1.3 Methodology of the study

At eh time of my internship period, I tried to use both primary and secondary data that I have gathered from different sources. For preparing this report primarily I got some data from face to face conversation of different employees of JBL Mirpur branch and some from different reports and features of the bank. Sometime I have undergone group discussion, asked some questionnaires to the responsible officer of that work and interviewed with some of them. I observed different parties and their transaction from a very close eye .all of this observation and data are included in this report.

Source of data:
These sources are as follows: Primary source: Primary data are collected through two ways. These are: a) Questionnaire: some primary data are collected by taking interview and by discussion with the executives and officer of JBL. b) Observation: Here primary data are collected through spending three month in the JBL during the working hour. Here I observed the total banking process of JBL. Secondary source: Secondary data are collected from the following sources: 3

a) annual reports of JBL b) Published documents c) Official files d) Data available with the website of JBL. e) Different publication of Bangladesh bank and Bangladesh economic reviews.

1.4 Scope of the study

The field of my study is the operation of Mirpur branch of JAMUNA Bank Ltd. For conducting this study an overall knowledge of the total banking system will necessary because the departments banking are linked with each other due to some partial proceeding. The scope of the organization part covers the organization structure, background, objective, function, departmentalization and business performance of JBL as a whole. The main part covers the operation scenario of a branch of JBL. This refers how the bank helps the customer in general banking and foreign exchange banking. It also covers loan and advances facilities of JBL, credit appraisal system, and activities of credit department.

1.5 Limitation of the study

Every matter has got some limitation. So this is also not an exception. The limitations of this internship report are been sated below: Due to time and cost restriction, the study is concentrated in selected areas. To continue study in such a vast are requires a big deal of time. As an internee I had only three month which is not enough. As a financial organization a bank has some restriction to serve all the real data of the bank to the general people as a result the study is mostly depends on official files and annual reports. Available data also could not be verified. In most cases I simply did not have any option but to furnish with data without verification. JBL as a commercial bank they are very busy and they could not able to give me enough time for discussion about various topics 4

CHAPTER: TWO
DESCRIPTIONS OF JBL

2.1 Introduction
The name bank derives from the Italian word banco "desk/bench", used during the Renaissance by Florentines bankers, who used to make their transactions above a desk covered by a green tablecloth. However, there are traces of banking activity even in ancient times. (From Wikipedia, the free encyclopedia) In fact, the word traces its origins back to the Ancient Roman Empire, where moneylenders would set up their stalls in the middle of enclosed courtyards called macella on a long bench called a bancu, from which the words banco and bank are derived. As a moneychanger, the merchant at the bancu did not so much invest money as merely convert the foreign currency into the only legal tender in Rome- that of the Imperial Mint. (From Wikipedia, the free encyclopedia) The definition of a bank varies from country to country. Under English law; a bank is defined as a person who carries on the business of banking, which is specified as:

Conducting current accounts for his customers Paying cheque drawn on a him, and Collecting cheque for his customers.

2.2 The Bank Industry

Banks have influenced economies and politics for centuries. Historically, the primary purpose of a bank was to provide loans to trading companies. Banks provided funds to allow businesses to purchase inventory, and collected those funds back with interest when the goods were sold. For centuries, the banking industry only dealt with businesses, not consumers. Commercial lending today is a very intense activity, with banks carefully analyzing the financial condition of their business clients to determine 6

the level of risk in each loan transaction. Banking services have expanded to include services directed at individuals, and risk in these much smaller transactions is pooled. In most English common law jurisdictions there is a Bills of Exchange Act that codifies the law in relation to negotiable instruments, including cheque, and this Act contains a statutory definition of the term banker: banker includes a body of persons, whether incorporated or not, who carry on the business of banking' (Section 2, Interpretation). Although this definition seems circular, it is actually functional, because it ensures that the legal basis for bank transactions such as cheque do not depend on how the bank is organized or regulated. (Banking Act (Singapore), The business of banking is in many English common law countries not defined by statute but by common law, the definition above. In other English common law jurisdictions there are statutory definitions of the business of banking or banking business. When looking at these definitions it is important to keep in minds that they are defining the business of banking for the purposes of the legislation, and not necessarily in general. In particular, most of the definitions are from legislation that has the purposes of entry regulating and supervising banks rather than regulating the actual business of banking. However, in many cases the statutory definition closely mirrors the common law one. Examples of statutory definitions: (Banking Act (Singapore),

"Banking Business" means the business of receiving money on current or deposit account, paying and collecting cheque drawn by or paid in by customers, the making of advances to customers, and includes such other business as the Authority may prescribe for the purposes of this Act; (Banking Act (Singapore), Section 2, Interpretation).

"Banking Business" means the business of either or both of the following:

1. receiving from the general public money on current, deposit, savings or other similar account repayable on demand or within less than [3 months] ... or with a period of call or notice of less than that period; 2. paying or collecting cheque drawn by or paid in by customers 7

Since the advent of EFTPOS (Electronic Funds Transfer at Point Of Sale), direct credit, direct debit and internet banking, the cheque has lost its primacy in most banking systems as a payment instrument. This has lead legal theorists to suggest that the cheque based definition should be broadened to include financial institutions that conduct current accounts for customers and enable customers to pay and be paid by third parties, even if they do not pay and collect cheque, (Banking Act (Singapore).

2.3 Jamuna Bank Limited

Jamuna Bank Limited (JBL) is a Banking Company registered under the Companies Act, 1994 with its Head Office at Printers Building (2nd & 8th Floor), 5, Raja Avenue, Dhaka-1000. The Bank started its operation from 3rd June 2001. Jamuna Bank Limited is a highly capitalized new generation Bank with an Authorized Capital and Paid-up Capital of Tk.10000.00 million and Tk.4000.00 million respectively. The Paid-up Capital has been raised to 2230.00 million and the total equity of the bank stands at 6409.00 million as on June 30, 2010. Currently the Bank has 65 (Thirty Five) branches 23 in Dhaka, 10 in Chittagong, 6 in Gazipur, 3 in Sylhet, 1 in Bogra, 2 in Naogaon, 1 in Munshigang, 1 in Shirajganj, 11 in Rajshahi and 4 in Narayanganj, 2 in Barisal (including Nine Rural Branches). The Bank undertakes all types of banking transactions to support the development of trade and commerce of the country. Jamuna Bank Ltd., the only Bengali named new generation private commercial bank was established by a group of winning local entrepreneurs conceiving an idea of creating a model banking institution with different outlook to offer the valued customers, a comprehensive range of financial services and innovative products for sustainable mutual growth and prosperity. The sponsors are reputed personalities in the filed of trade, commerce and industries. The Bank is being managed and operated by a group of highly educated and professional team with diversified experience in finance and banking. The scenario of 8

banking business is changing day by day, so the bank's responsibility is to device strategy and new products to cope with the changing environment. Jamuna Bank Ltd. has already achieved tremendous progress within only two years. The bank has already ranked as one of the quality service providers. Services involving all segments of the society within the purview of rules and regulations laid down by the Central Bank and other regulatory authorities.

2.3.1 Board of Directors

The Board of Directors consists of 18 members elected from the Board of Directors is the supreme body of the Bank

2.3.2 Executive Committee

All routine matters beyond the delegate powers of management are decided upon by or routed through the Executive Committee, subject to ratification by the Board of Directors.

2.3.3 Audit Committee

In line with the guidelines of Bangladesh Bank, a three member audit committee of the Board of Directors has been formed to assists the Board in matters related to audit and internal Control System of the Bank.

2.3.4 Vision
Jamuna Bank wants to become a leading banking institution and to play a pivotal role in the development of the country.

2.3.5 Mission Statement

The Bank is committed to satisfying diverse needs of its customers through an array of products at a competitive price by using appropriate technology and providing timely service so that a sustainable growth, reasonable return and contribution to the 9

development of the country can be ensured with a motivated and professional workforce.

2.3.6 Management hierarchy

Figure :( 2.b) Organ gram of JBL 10

2.3.7 Branch Network

Jamuna Bank performing its Banking Service all over the Country with 65 Branches most of them situated in Dhaka and others in Chittagong, Sylhet, Rajshahi, Comilla, Barisal and Khulna.

2.4 Strategies of JBL

To raise capital up to Tk. 1000.00 million by March 2006. To manage and operate the Bank in the most efficient manner to enhance financial performance and to control cost of fund To strive for customer satisfaction through quality control and delivery of timely services To identify customers' credit and other banking needs and monitor their perception towards the performance in meeting those requirements To review and update policies, procedures and practices to enhance the ability to extend better service to customers. To train and develop all employees and provide them adequate resources so that customer needs can be reasonably addressed. To promote organizational effectiveness by openly communicating company plans, policies, practices and procedures to employees in a timely fashion To cultivate a working environment that fosters positive motivation for improved performance To diversify portfolio both in the retail and wholesale market To increase direct contact with customers in order to cultivate a closer relationship between the bank and its customers.

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2.5 Objectives of JBL

To earn and maintain CAMEL Rating 'Strong'

To establish relationship banking and improve service quality through development of Strategic Marketing Plans. To remain one of the best banks in Bangladesh in terms of profitability and assets quality. To introduce fully automated systems through integration of information technology. To ensure an adequate rate of return on investment

To keep risk position at an acceptable range (including any off balance sheet risk) To maintain adequate liquidity to meet maturing obligations and commitments. To maintain a healthy growth of business with desired image. To maintain adequate control systems and transparency in procedures.

To develop and retain a quality work-force through an effective human Resources Management System. To ensure optimum utilization of all available resources

To pursue an effective system of management by ensuring compliance to ethical norms, transparency and accountability at all levels.

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2.6 Financial Position and Performance of JBL

SL Particulars Year- Year- Year 2010 2009 2008 Year2007 Year -200 6 1 2 3 4 5 6 7 8 9 Authorized Capital Paid up Capital Reserve Capital Tier i Capital ( capital & shareholders equity) Tier ii Capital Deposits (core & Bank ) Advances Investments 100 00 223 0 700 485 4 149 1 606 74 494 30 108 91 610 34 418 60 520 2 372 5 241 1 206 7 106 6 235 707 53 400 0 162 1 680 305 4 943 423 56 322 88 850 3 466 85 214 07 378 8 288 9 191 4 156 3 923 200 487 31 651 0 4000 1226 652 2131 313 20924 16617 5390 22191 13990 3102 2278 824 405 89 174 26405 6409 35 881 715 666 8.04 135.14 1600 1072 629 1562 139 17284 12796 2552 15457 11583 2749 2048 701 499 253 137 20157 6574 29 631 643 474 31.94 145.6 8 160 0.0 429. 00 487. 46 807. 14 109. 32 144 54 110 11 203 7.8 121 51 652 1.8 175 0.2 133 0.3 419. 94 363. 31 199. 82 106. 46 Year 200 5 160 0.0 429. 00 245. 64 607. 32 67.3 3 104 50 672 2.8 116 3.7 792 3.9 479 0.8 139 7.2 108 8.4 308. 88 273. 70 155. 95 97.9 9 Year 200 4 160 0.0 0 390. 00 83.9 7 451. 37 32.8 0 661 4.0 6 323 9.5 2 935. 48 380 1.2 1 306 8.5 1 846. 73 717. 88 128. 88 110.

10 Import Business 11 Export Business 12 Total Income 13 Total Expenditure 14 Operating Profit 15 Profit Before Tax 16 Profit After Tax 17 Fixed Assets 18 Total Assets ( Excluding 19 Contra ) 20 Contingent liabilities & 21 Commitments 22 Number of Branches 23 Number of Employees 24 Number of Corresponds Income from Investment Earning Per Share Taka (EPS) Net Assets Per Share taka (NAV)

13

687 4 65 151 Particular Deposit Loan & Advance Import Export Operating Profit Year2010 6067. 36 4973. 48 6103 4.5 4186 0 3741 Year1

49 121 5 735 Year136 Year2007 17284 12797 15457 11583 701

166 63 544 5.6

134 91 290 3.9

97 61.1 4 66.6

Year- 23.0 19.0 0 Year- Year2006 0 2005 0 4 2 2 00.06 00 2004 976 9 1445 525. 447. 6.7 6614 6614 1101 390. 333. 177 3239 3240 00.52 00 2.7 1215 255. 80.4 3801 3801 66.21 4 6522 46.5 36.3 3068 3069 8 .51 5 419.9 128. 129 188 141. 4 88 0.1 57

729 2008 1 2009 4235. 20924 115 4.14 62 3 24.5 3228. 16617 4.78 4 77 28.7 4668 22191 4 5 2140 7 2997 824 13990

(Figure In BDT Million Taka)

2.7 Products and Services of JBL:

The Bank has an array of tailor made financial products and services. Such, products 14

are Monthly Savings Schemes, Consumer Credit Scheme, Lease Finance, and Personal Loan for Women, and Shop Finance Scheme etc. JBL also introduced Qcash ATM cards for its valued customers giving 24 hours banking services through Debit Cards. JBL offers the following services to its valued customer:

Retail Banking Deposit Schemes Remittance and Collection Import and Export handling and Financing Loan Syndication Project Finance Investment Banking Lease Finance Hire Purchase Personal Loan for Woman 24-hours Banking: Q-Cash ATM facility Islamic Banking Corporate Banking Consumer Credit Scheme International Banking

2.7.1.1 JBL Personal Banking Services

Personal Banking services of Jamuna Bank offer wide-ranging products and services matching the requirement of every customer. Transactional accounts, savings schemes or loan facilities from Jamuna Bank Ltd. make available you a unique mixture of easy and consummate service quality.

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JBL offers the Personal Banking Services like Current Deposit Account, Savings Deposit Account, Short Term Deposit Account, and Fixed Deposit Accounts. It also offers attractive rates on various deposit schemes. The banks make every endeavor to ensure the clients' satisfaction. The cooperative & friendly professionals working in the branches will make your visit an enjoyable experience.

2.7.1.2 JBL Corporate Banking Services

The motto of JBL's Corporate Banking services is to provide a personalized solution to our customers. The Bank distinguishes and identifies corporate customers' need and designs tailored solutions accordingly. Jamuna Bank Ltd. offers a complete range of advisory, financing and operational services to its corporate client groups combining trade, treasury, investment and transactional banking activities in one package. Whether it is project finance, term loan, import or export deal, a working capital requirement or a forward cover for a foreign currency transaction, the Corporate Banking Managers will offer you the accurate solution. The corporate Banking specialists will render high class service for speedy approvals and efficient processing to satisfy customer needs. Corporate Banking business envelops a broad range of businesses and industries. You can leverage on the know-how in the following sectors mainly:

Agro processing industry Industry (Import Substitute / Export oriented) -Textile, Spinning, Dyeing/Printing

- Export Oriented Garments, Sweater. - Food & Allied - Paper & Paper Products - Engineering, Steel Mills - Chemical and chemical products etc.

Telecommunications. 16

Information Technology Real Estate & Construction Wholesale trade Transport Hotels, Restaurants Non Bank Financial Institutions Loan Syndication Project Finance Investment Banking Lease Finance Hire Purchase International Banking Export Finance Import Finance

2.7.1.3 Other services of JBL:

Personal Loan for Women: This product is designed specially for the working women and housewives. Housewives with reasonable income of the spouses are also eligible to avail this loan. The loan can be availed for the purchase of household appliances, house renovation. Foreign Trade: International Trade forms the major business activity undertaken by Jamuna Bank Ltd. The Bank with its worldwide correspondent network and close relationships with key financial institutions provides an extensive trade services network to handle your transactions efficiently. Lease Financing: Jamuna Bank Ltd., the highly capitalized private Commercial Bank in Bangladesh has introduced lease finance to facilitate funding requirement of valued customers & growth of their business houses. JBL lease facility is extended to the items like Luxury bus, Mini bus ,Taxi cabs. 17

Agriculture Loan: Jamuna Bank Provides Loans for Agro Industries at a concession. Trading of Government Treasury Bond & Other Govt. Securities: Jamuna Bank Limited has been nominated as a Primary Dealer by the Bangladesh Bank for trading 5 years & 10 Years Treasury Bonds and other Government Securities.

Loan facility: JBL offers loan up to 95% of the present value of the bond/other securities against lien of the above instrument for their customers.

2.7.2 Other highly customized services of JBL:

Q-Cash Round The Clock Banking Jamuna Bank Q-Cash ATM Card enables you to withdraw cash and do a variety of banking transactions 24 hours a day. Q-Cash ATMs are conveniently located covering major shopping centres, business and residential areas in Dhaka and Chittagong. ATMs in Sylhet, Khulna and other cities will soon start be introduced. The network will expand to cover the whole country within a short span of time. With Jamuna Bank Q-Cash ATM card customer can:

Cash withdrawal Round The Clock from any Q-Cash logo marked ATM booths. POS transaction (shopping malls, restaurants, jewellaries etc) Enjoy overdraft facilities on the card (if approved) Utility Bill Payment facilities Cash transaction facilities for selective branches nationwide ATM service available in Dhaka and Chittagong Withdrawal allowed from ATM's of Jamuna Bank Ltd., AB Bank, The City Bank, Janata Bank, IFIC Bank, Mercantile Bank, Pubali Bank, Eastern Bank Ltd. respectively

Why Q-cash is Secure? Q-Cash is fully secure. Q-Cash cardholders can only carry out transactions on QCash ATMs with Personal Identification Numbers (PIN). The PIN is a unique 4-digit 18

number that allows you to access your account. You can change your PIN anytime from ATM machine. In case you have lost your card, transactions cannot be done without the PIN. Jamuna Bank Limited has installed its first Q-cash ATM at Dhanmondi Branch, Dhaka.And Jamuna Bank is starting to issue VISA card. In line with the issuance of Q-cash products JBL is starting to introduce VISA card. Online Banking Jamuna Bank Limited has introduced real-time any branch banking on December 31, 2010. Now, customers can withdraw and deposit money from any of its 65 branches located at Dhaka, Chittagong, Sylhet, Gazipur, Bogra, Naogaon, Narayanganj, Dinajpur, Kushtia,Rajshahi, Bashurhat, Sirajganj and Munshigonj. The valued customers can also enjoy 24 hours banking service through ATM card from any of Q-cash ATMs located at Dhaka, Chittagong, Khulna, Sylhet and Bogra. All the existing customers of Jamuna Bank Limited will enjoy this service by default.

Key features:

Centralized Database Platform Independent Real time any branch banking Internet Banking Interface ATM Interface Corporate MIS facility

Delivery Channels:

Branch Network ATM Network POS (Point of Sales) Network Internet Banking Network 19

Islamic Banking Branch In the year 2004, Jamuna Bank Limited opened another Islamic banking branch at Jubilee Road, Chittagong on November 27, 2005. The already existing Naya Bazar Islamic Banking branch started its operation from October 25, 2003, the total Islamic banking branches stands at 02 (two). JBLs Shariah Council consists of 06 (Six) members, among the m 02 (two) are Khatib, 01 (one) is Ex-Economic Advisor, 01 (One) is Vice Chancellor, Islamic University, 01 (One) is Principal .

CHAPTER: THREE
GENERAL BANKING

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General Banking

3.1 INTRODUCTION
All business concerns to earn a profit through selling either a product or service. A bank does not 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 development, which provides day to day services to the customers. Everyday it receives deposits from the customers and meets their demand for cash by honoring cheques. It opens new accounts, remit funds, issue bank drafts 21

and pay orders etc. Since bank is confined to provide the service everyday, general banking is also known as Retail Banking. The JBL (Mirpur Branch) offers various types of general banking components. They are very essential tools for the bank to serve the customers. To attract new customers the bank has to launch new components or re-furnished their existing products. This department is divided into various sections namely as follows:

General Banking
Deposit section Account section Clearing and collection

Cash section Local Remittance section Dispatch section

3.2 Deposit Section

3.2.1Types of Deposit account:
There are several types of deposit accounts. Each account has different characteristics and every account has some specific purpose to serve. JBL offers the following key
Personal Banking Services.

According to their uniqueness they are described as

follows: A. Savings Account:

It is the general account of the JBL (Mirpur Branch) individual or more than two persons can open a savings account on JBL. The officers and authorize persons are issuing cheque book, deposit slips and statement of account to the holder of savings. The officer justifies the information that is submitted by the account 22

holder for opening of the account. The officers of the bank process accountopening formalities. B. Current Deposit Account:

JBL is one of the newly established well-reputed third generation private commercial bank in Bangladesh. It operates very diverse current account operation. They serve various types of customers, like current account for private limited company, current account for public limited company, current account for partnership business, etc.

C. Foreign Currency Account: The JBL also operate Foreign Currency Account for Bangladeshi Wage Earners or for Foreign Nationals/Company/Firms etc. to send their valued earned foreign currency into the country. D. Short Term Deposit Account (STD): JBL also offers Short Term Deposit to its valued customers. Short Term Deposit is a deposit account where the payment of interest is paid on month basis. These items include the deposits for a period ranging from 7 (seven) days to 89 (eightynine) days. These types of liabilities are payable on special notice or after a specified period other than the fixed deposits. Some of these types of deposits are of the nature of time deposits. The rate of interest on STD account is 4.5% per annum. There are some rules and regulations that must be maintained by the STD account holder. If the STD account holder wants to withdraw the money from the account they have to inform the bank before, otherwise the account holder may not get the interest in full amount Particulars Approved Revised Rate Short Term Deposit (STD) 5.00% Savings Deposit : Rural / Urban 5.25% Savings Deposit : Non-Chequing & No 5.25% withdrawal for 6 (six) months Savings Deposit : Non-Chequing & No withdrawal for 1 (one) year 5.75%

3.2.2 Deposit & Deposit mix:

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In commercial banks operates stares with mobilization of resources i.e. tapping of deposit and then the said resources are deployed as loans , advances and investments for the purpose of maximizing wealth which means deposits have dominance in commercial banks operations. Deposit is always been termed as the lifeblood of a bank. Deposits all these unfavorable factors JBL was able to instill confidence in customers as to its commitments to the depositors and browing customers and thereby bncould mobilize a total deposit of Tk. 60673.56 million in 2010 against that of Tk. 42356.20 million in the preciding year showing an increase of Tk. 18317.36 million being 43.25 percent. Endeavor is underway for argumenting low cost deposit by accommodating good customers at competitive price. Deposit growth position of JBL is as follow,

Deposit
25000 20924 20000 15000 10000 6614.06 5000 0 3251.9 1940.12 2001 2002 2003 2004 2005 2006 2007 17284 14454.13 10450.16 Series1

Series1 1940 3252 6614 10450 14454 17284 20924

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This deposit consist on current deposit & others, bills payable, savings deposit, fixed deposit, short term deposit, scheme deposit, foreign currency. The deposit mix of JBL is as follows Deposit Mix
Current A\c & Others Bills Payable Savings Deposit Fixes Deposit Shoet Term Deposit Scheme Deposit Foreign Currency Deposit

3.2.3 Schemes:
Schemes are the most important sources of enhancing banks deposit. Mainly bank is the lender of money, which is deposited by various types of depositor. These schemes are different in nature and types and also in interest rates. These deposits give the customers to deposit the idle money in profit earning schemes and also provide the security. Jamuna Bank limited as third profit earning to the depositors and generation modern and technology based modern commercial bank offers various types of customers friendly deposit schemes to its valued customers. These schemes are highly also unique in security. The schemes are outlined below: Fixed Deposit Receipt (FDR): JBL offers various types of FDR to its clients. Their maturity may be 1 (One) month, 2 (Two) months, 3 (Three) months, 6 (Six) months and 12 (Twelve) months, etc. In JBL customers can open FDR in individually or jointly for any amount for a fixed 25

period. For opening of FDR no introducing are required. Only one copy of passport size photograph of the account holder and another copy of the nominee is needed. Customers can get the interest after the maturity period of the FDR. H/She can also en-cash the FDR before the maturity of the period. In this case he will not enjoy the regular interest rate on the FDR. The rates of interest are presented in the following table:

Particulars FDR for 1(one) month and above FDR for 3 (three) month and above FDR for 6(six) month and above FDR for 12(twelve) month and above

Approved Revised Rate 12.00% 14.50% 14.25% 14.00%

3.2.3 NEW SCHEMES

3.2.3.1 Marriage Deposit Scheme Marriage of children, especially daughter is a matter of great concern to the parents. Marriage of children involves expense of considerable amount. Prudent parents make effort for gradual building of fund as per their capacity to meet the matrimonial expense of their children specially daughters. It can be a great help to the parents if there is any scope of deposit of a modest amount as per their financial capacity, which grows very fast at high rate of interest yielding a sizeable amount on maturity. With this end in view JBL has introduced Marriage Deposit Scheme, which offers you an opportunity to build up your cherished fund by monthly deposit of small amount at your affordable capacity. Savings Plan and Benefit: Tenor 5.5-years Monthly Deposit Tk.1000/Tk.1500/Tk.2000/Tk.2500/Tk.1000/Tk.1500/Tk.2000/Maturity value Tk.86,875/Tk.1,30,315/Tk.1,73,750/Tk.2,17,190/Tk.1,32,430/Tk.1,98,645/Tk.2,64,860/26

7.5-years

10.5-years

12-years

15-years

18-years

Tk.2500/Tk.1000/Tk.1500/Tk.2000/Tk.2500/Tk.1000/Tk.1500/Tk.2000/Tk.2500/Tk.1000/Tk.1500/Tk.2000/Tk.2500/Tk.1000/Tk.1500/Tk.2000/Tk.2500/-

Tk.3,31,075/Tk.2,20,760/Tk.3,31,140/Tk.4,41,520/Tk.5,51,900/Tk.2,76,440/Tk.4,14,660/Tk.5,52,875/Tk.6,91,095/Tk.4,24,115/Tk.6,36,175/Tk.8,48,230/Tk.10,60,290/Tk.6,36,020/Tk.9,54,030/Tk.12,72,040/Tk.15,90,050/-

Eligibility: Marriage Deposit account can be opened in the name of children below the age of 18-years along with legal guardian. For opening a marriage deposit account, maintenance a savings account with JBL is required. Terms & Conditions: Bank reserves the right to close the scheme if customers fail to deposit 3 If the Scheme is closed within 6-months, customer will get the deposited amount only and no interest/profit will be paid for the Scheme. If it is closed after 6-months, customers will get the deposited amount along with the interest at the normal savings rate up to the time of closure. Duties and taxes are payable by the customers as per government rules. Money Laundering Prevention Act shall be exercised as per rules of Bangladesh Bank. 3.2.3.2 Lakhpati Deposit Scheme To become a lakhpati is a dream to most of the people of Bangladesh especially to 27 consecutive installments.

the lower and lower middle class income group. The bank experiences the expectations and wants are enormous in nature in the small span of life. To meet the deposit and wants the JBL need right plan. Keeping the above in mind JBL has introduced Lakhopati Scheme which has flexibility in report of maturity and monthly installment as per affordable capacity. Savings Plan and Benefit: Tenor 3- years 4- years 5- years 6- years 7- years 10- years Monthly Deposit Tk.2410/Tk.1720/Tk.1503/Tk.975/Tk.800/Tk.460/Maturity value Tk.1.00 lac Tk.1.00 lac Tk.1.00 lac Tk.1.00 lac Tk.1.00 lac Tk.1.00 lac

Terms & Conditions: Bank reserves the right to close the scheme if customers fail to deposit 3consecutive installments. If the Scheme is closed within 6-months, customer will get the deposited amount only and no interest/profit will be paid for the Scheme. If it is closed after 6-months, customers will get the deposited amount along with the interest at the normal savings rate up to the time of closure. Duties and taxes are payable by the customers as per government rules. The above figures are indicative only and subject to change from time to time. Money Laundering Prevention Act shall be exercised as per rules of Bangladesh Bank. 3.2.3.3Millionaire Deposit Scheme It is a dream for many small savers to become a Millionaire. The word Millionaire is really exciting. This dream can be a reality if you have a calculated plan and strong determination. JBL has introduced Millionaire Deposit Scheme which has flexibility in respect of period and monthly deposit as per your affordable capacity for giving a sum of Tk.1.00 (one) million i.e. Tk.10 (ten) lac at a time. Savings Plan and Benefit:

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Tenor 3-years 4-years 5-years 6-years 7-years 10-years 12-years 15-years Eligibility:

Monthly Deposit Tk.24125/Tk.17200/Tk.13060/Tk.10315/Tk.8350/Tk.4940/Tk.3645/Tk.2415/-

Maturity value Tk.10 lac Tk.10 lac Tk.10 lac Tk.10 lac Tk.10 lac Tk.10 lac Tk.10 lac Tk.10 lac

Millionaire Deposit account can be opened at any Branch of JBL For opening a millionaire deposit account, maintenance a savings account with JBL is required. Customer can deposit monthly installment through any of the online branches Under standing instruction system, Customer can deposit money automatically his accounts. Terms & Conditions: Bank reserves the right to close the scheme if customers fail to deposit 3consecutive installments. If the Scheme is closed within 6-months, customer will get the deposited amount only and no interest/profit will be paid for the Scheme. If it is closed after 6-months, customers will get the deposited amount along with the interest at the normal savings rate up to the time of closure. Duties and taxes on the deposit, if any, are payable by the customers as per government rules. The above figures are indicative only and subject to change from time to time. Money Laundering Prevention Act shall be exercised as per rules of Bangladesh Bank. 3.2.3.4 Kotipati Deposit Scheme: 29

To become Kotipati is simply a dream for the most of the populace of Bangladesh. It is realizable for high income group who have strong determination and savings habit. If you decide and plan to save money from your regular income, you can own Tk1.00 crore easily by making a planned savings. In this regard, JBL has introduced Kotipati Deposit Scheme offering the savings plan fit to your income and to execute your dream to be a Kotipati by monthly deposit at your affordable capacity. You can take advantage of the Kotipati Deposit Scheme from JBL and plan for your golden future accordingly. Savings Plan and Benefit: Tenor 3-years 4-years 5-years 6-years 7-years 10-years 12-years 15-years 18-years 20-years Eligibility: Kotipati Deposit account can be opened at any Branch of JBL. For opening a Kotipati deposit account, maintenance a savings account with JBL is required. Terms & Conditions: Bank reserves the right to close the scheme if customers fail to deposit 3consecutive installments. If the Scheme is closed within 6-months, customer will get the deposited amount only and no interest/profit will be paid for the Scheme. If it is closed after 6-months, customers will get the deposited amount along with the interest at the normal savings rate up to the time of closure. 30 Monthly Deposit Tk.243020/Tk.173500/Tk.131900/Tk.104255/Tk.84600/Tk.50235/Tk.37215/Tk.24800/Tk.17040/Tk.13345/Maturity value Tk.1 crore Tk.1 crore Tk.1 crore Tk.1 crore Tk.1 crore Tk.1 crore Tk.1 crore Tk.1 crore Tk.1 crore Tk.1 crore

 Duties and taxes on the deposit, if any, are payable by the customers as per government rules. The above figures are indicative only and subject to change from time to time. Money Laundering Prevention Act shall be exercised as per rules of Bangladesh Bank. 3.2.3.5 Education Savings Scheme Education is a basic need of every citizen. Every parent wants to impart proper education to their children. Education is the pre-requisite for socio-economic development of the country. As yet, there is no arrangement of free education to the citizens from the government level. As such, there should be pre-arrangement of fund to ensure higher education of the children. Otherwise higher education may be hindered due to change of economic condition, income of the parents at the future time when higher education shall be required. Todays higher education is becoming expired day by day. Parents can get relief and can have peace of mind if they can arrange the necessary fund for higher education of their children. As such, JBL has introduced Education Savings Scheme which offers you an opportunity to build up your cherished fund by monthly deposit of small amount at your affordable capacity or initial lump sum deposit to yield handsome amount on a future date to meet the educational expenses. Under this Scheme you have the different attractive options to avail the future benefit i.e. withdrawal of the total amount accumulated in lump sum or withdrawing monthly benefit to meet educational expense keeping the principal amount intact or to withdraw both principal and accumulated profit monthly for a certain period. Savings Plan and Benefit: Option: A

31

Benefit withdrawal option

Tenor

Monthly Deposit

Option-1 Lump sum withdrawal on maturity

Option-2 Monthly benefit during the next 5(five) years after maturity encashing principal deposit and interest
Tk.1225/Tk.1840/Tk.2450/Tk.3060/Tk.2050/Tk.3075/Tk.4100/Tk.5125/Tk.1530/Tk.3060/Tk.4590/Tk.6120/Tk.7650/Tk.2900/Tk.5800/Tk.8700/Tk.11,600/Tk.14,500/-

4-years

6-years

8-years

12-years

Tk.1000/Tk.1500/Tk.2000/Tk.2500/Tk.1000/Tk.1500/Tk.2000/Tk.2500/Tk.500/Tk.1000/Tk.1500/Tk.2000/Tk.2500/Tk.500/Tk.1000/Tk.1500/Tk.2000/Tk.2500/-

Tk.58,420/Tk.87630/Tk.1,16,840/Tk1,46,050/Tk.97,640/Tk.1,46,460/Tk.1,95,280/Tk.2,44,100/Tk.72,930/Tk.1,45,860/Tk.2,18,790/Tk.2,91,720/Tk.3,64,650/Tk.1,38,220/Tk.2,76,440/Tk.4,14,660/Tk.5,52,875/Tk.6,91,095/-

Note:

i.

Duties and taxes are payable by the customer as per government rules.

ii.The customer has the option for withdrawing total accumulated amount including principal on maturity date at a time or taking monthly benefit during the next 5(five) years after maturity encashing principal deposit and interest. Option: B Benefit withdrawal option Initial deposit Period Option-1 Lump sum withdrawal on maturity Option-2 Monthly benefit during the next 5(five) years after maturity encashing principal deposit and interest Tk.2830/Option-3 Monthly benefit during the next 5(five) years from the date of maturity keeping the principal deposit amount intact Tk.1535/32

Tk.1.00

3-yrs

Tk.1,34,925/-

lac Tk.2.00 lac Tk.3.00 lac Tk.5.00 lac

5-yrs 7-yrs 3-yrs 5-yrs 7-yrs 3-yrs 5-yrs 7-yrs 3-yrs 5-yrs 7-yrs

Tk.1,66,615/Tk.2,07,615/Tk.2,69,850/Tk.3,33,230/Tk.4,15,230/Tk.4,04,775/Tk.4,99,845/Tk.6,22,845/Tk.6,74,625/Tk.8,33,080/Tk.10,38,080/-

Tk.3500/Tk.4360/Tk.5660/Tk.7000/Tk.8720/Tk.8490/Tk.10500/Tk.13080/Tk.14,150/Tk.17,500/Tk.21,800/-

Tk.2200/Tk.3065/Tk.3070/Tk.4400/Tk.6130/Tk.4605/Tk.6600/Tk.9195/Tk.7675/Tk.11000/Tk.15325/-

Note: i.

Duties and taxes are payable by the customer as per government rules. ii.The customer has the option for withdrawing total accumulated

amount including principal on maturity date at a time or taking monthly benefit during the next 5(five) years after maturity encashing principal deposit and interest or monthly benefit during the next 5(five) years from the date of maturity keeping the principal deposit amount intact . Eligibility: Education Savings account can be opened in the name of children below the age of 18-years along with legal guardian. For opening a education savings account, maintenance a savings account with JBL is required. Terms & Conditions: Bank reserves the right to close the scheme if customers fail to deposit 3consecutive installments. If the Scheme is closed within 6-months, customer will get the deposited amount only and no interest/profit will be paid for the Scheme. If it is closed after 6-months, customers will get the deposited amount along with the interest at the normal savings rate up to the time of closure. Duties and taxes are payable by the customers as per government rules. 33

 The above figures are indicative only and subject to change from time to time. Money Laundering Prevention Act shall be exercised as per rules of Bangladesh Bank. 3.2.3.6 Monthly Benefit Scheme (MBS) Jamuna Bank Limited has introduced Monthly Benefit Scheme (MBS) for the prudent persons having ready cash and desiring to have fixed income on monthly basis out of it without taking risk of loss and without encashing the principal amount. This scheme offers highest return with zero risk. You can plan your monthly expenditure with the certain monthly income under the scheme. Deposit Plan and Benefit: Tenor 6-months 1-year Monthly benefit/profit against deposit of Tk.1.00 (one) lac Tk805/Tk.825/-

Note: Government tax and other charges, if any are included with the above benefit/figure. Eligibility: Any person having age of above 18-years can participate in this scheme through opening a savings or current account with any branch of JBL Customer must be Bangladeshi Nationals/Citizen. Persons below 18-years of old may open this account with his/her legal guardian Characteristics: Minimum deposit : : Tk.1(one) lac

Maximum deposit account Overdraft facility:

Any amount multiple of Tk.1(one) lac

After opening the account, the profit element will be deposited in that

The concerned customer can avail loan facility upto 80% of the initial deposit. Terms & Conditions: 34

 Bank reserves the right to change the rate of profit during the tenure of deposit. No loan facility will be allowed from any other Bank(s)/Financial Institution against the deposited amount except JBL. The initial deposited amount and term shall not be changed before maturity. If the Scheme is closed within 6-months, customer will get the deposited amount only and no interest/profit will be paid for the Scheme. If it is closed after 6-months, customers will get the deposited amount alongwith the interest at the normal savings rate upto the time of closure. Duties and taxes on the deposit, if any, are payable by the customers as per government rules. Money Laundering Prevention Act shall be exercised as per rules of Bangladesh Bank.

3.2.3.7 Double/Triple Growth Deposit Scheme For people who have cash flow at this moment and want to get it doubled/tripled quickly JBL has introduced Double/Triple Growth Deposit Scheme that offers you to make double/triple your money within 7(seven) years and 11 (eleven) years respectively resulting a high rate of interest. Deposit Fixed amount Fixed amount Eligibility: Any person having age of above 18-years can participate in this scheme 35 Period 7-years 11-years Maturity value Double amount Triple amount

through opening a savings or current account with any branch of JBL Customer must be Bangladeshi Nationals/Citizen. Persons below 18-years of old may open this account with his/her legal guardian Characteristics: Minimum deposit Maximum deposit How to apply:
You have to open an account with any branch of JBL having deposit of the above figure.

: :

Tk.1(one) lac Any amount multiple of Tk.1(one) lac

Overdraft facility: The concerned customer can avail loan facility up to 80% of the deposited amount. Terms & Conditions: Bank reserves the right to change the rate of profit during the tenure of deposit. No loan facility will be allowed from any other Bank(s)/Financial Institution against the deposited amount except JBL. If the Scheme is closed within 6-months, customer will get the deposited amount only and no interest/profit will be paid for the Scheme. If it is closed after 6-months, customers will get the deposited amount along with the interest at the normal savings rate up to the time of closure. Duties and taxes on the deposit, if any, are payable by the customers as per government rules. Money Laundering Prevention Act shall be exercised as per rules of Bangladesh Bank. 3.2.3.8 Monthly Savings Scheme (MSS) Savings is the best friend in your bad days. Small savings can build up a prosperous future. Savings can meet up any emergencies. JBL has introduced Monthly Savings Scheme (MSS) that allows you to save on a monthly basis and get a handsome return 36

upon maturity. If you want to build up a significant savings to carry out your cherished dream, JBL MSS is the right solution. Savings Plan and Benefit: Tenor 3-years Monthly Deposit Tk.500/Tk.1000/Tk.1500/Tk.2000/Tk.3000/Tk.5000/Tk.10000/Tk.500/Tk.1000/Tk.1500/Tk.2000/Tk.3000/Tk.5000/Tk.10000/Tk.500/Tk.1000/Tk.1500/Tk.2000/Tk.3000/Tk.5000/Tk.10000/Maturity value Tk.20700/Tk.41450/Tk.62100/Tk.82900/Tk.124300/Tk.207300/Tk.414600/Tk.38400/Tk.76850/Tk.115300/Tk.153800/Tk.230700/Tk.384550/TK769150/Tk.102400/Tk.204750/Tk.307150/Tk,409550/Tk.614450/Tk.1024150/Tk.2048350/-

5-years

10-years

Eligibility: MSS account can be opened at any Branch of JBL. For opening a MSS account, maintenance a savings account with JBL is required. Facility: The concerned customer can avail loan facility up to 80% of the deposited amount. The can deposit the monthly instilment at any branch of JBL and the same through on-line banking. 37

 Monthly installment can be automatically collected from your savings account maintained with JBL. Customer can choose any day of the month as installment date. Terms & Conditions: Bank reserves the right to close the scheme if customers fail to deposit 3consecutive installments. If the Scheme is closed within 6-months, customer will get the deposited amount only and no interest/profit will be paid for the Scheme. If it is closed after 6-months, customers will get the deposited amount along with the interest at the normal savings rate up to the time of closure. Duties and taxes on the deposit, if any, are payable by the customers as per government rules. The above figures are indicative only and subject to change from time to time. Money Laundering Prevention Act shall be exercised as per rules of Bangladesh Bank. No loan facility will be allowed from any other Bank(s)/Financial Institution against the deposited amount except JBL.

3.2.4 Detail information related to a Bank Account:

Opening an account
Account opening is the first and preliminary work for a bank. Opening of an account binds the Customer and Banker into a contractual relationship. It is the most important and preliminary work for a bank. Account Opening is very important task for any kind of banking activities. Customer relationship establishes through opening an account. Generally who are receiving bank service the bank may call them as a customer. But bank considers them as customers who have an account with them. 3.2.4.1Procedure of Opening of an Account: 38

Bankers his to maintain some common principles and procedures for open all most all deposit accounts. Major information is 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 formalities a customer must maintain in case of opening of an account: Minimum age of 18 years Application in the prescribed form Furnishing Photographs of the applicant and attested by the Introduction by an account holder Recording of specimen signature in the specimen signature card Mention nominee in the prescribed form Furnishing Photograph of the nominee (1 copies)

introducer (2 copies)

It is said that, there is no banker customer relationship if there is no A/C of person in that bank. By opening a banker and customer create a contractual relationship. However, selection of customer for opening an account is very crucial of a bank. Fig: Account Opening Procedure in a flow chart
Applicant fills up the relevant application form in the prescribed manner.

She/he is required to fill up the specimen signature card.

For individual introduction is needed by an account holder.

Account is opened
The authorized officer scrutinizes the introduction and examines the documents submitted. After depositing the cash one cheque book & pay-in-slip book is issued.

39

Issuance of deposit slip and the deposit must be made in cash. No cheque or draft is acceptable to the Bank.

Before opening of current or savings account, the following formalities must be completed I. Application on the prescribed from; II. The customer information is filled up with the form; III. Introduction: The following persons can introduce an a/c opener: An existing current/savings account holder of that branch; An officer of that branch (not below the rank of an Assistant Officer.); A respectable person of the society or locality who is well known to

the Manager/2nd man of the branch concerned. IV. Furnishing photographs; V. Banker will supply a set of printed forms required for opening the account, which will normally include: VII. Specimen Signature Cards (SSC); Deposit Slip Book; Check Book Requisition Slip;

VI. Customer should carefully read and full-fill the application form; Putting specimen signatures in the specimen card; Register should be obtained; IX. Obtain the signature and a/c number of the Introducer on the advice of new accountant the placement for the purpose and gets the signature properly verified by an Authorized official of the bank; X. The deposit slip properly filled in and signed by the customer; 40 VIII. The required Account Number for the new Account from the Account opening

XI. Then the new a/c number should be written at the appropriate place of the Deposit slip and mark new Account on both the copies of the deposit slip and request the customer to deposit the money at the cash counter; XII. Place the signature cards, Advice of new account, a copy of Deposit slip, photographs and other necessary papers/documents etc. in a file; XIII. Obtain approval of the Authorized officer for opening the new account on all relevant papers while giving approval for opening an account the Authorized official should be satisfied about the of the Introducer; XIV. The Authorized officer on the advice of new a/c and on the specimen signature card should also attest the signature of the new a/c holder; XV. After approval of the opening of the a/c, get the cheque book requisition slip signed by the customer. XVI. Deliver the cheque book to the customer after properly marking the account number, name and place of the branch on each leaf of the cheque book; XVII. On completion of account opening a file for the new a/c holder and file all relevant papers forms etc. Signature cards, copies of Advice, Deposit slip, Debit etc. is distributed to concerned departments. XVIII. 3.2.4.2 Classification of Customers Individual (Personal) Proprietorship (Sole traders) Partnership (Registered or Unregistered) Limited Company (Public/Private) Educational Institution, Club, Society, Association etc. Trust Executors N.G.O 3.2.4.3 Application from for current/savings account Following are the contents of application from for opening savings/current A/C Name of the Applicant Fathers name/Husbands name Mothers name Date of Birth Present Address Occupation 41

Nationality Phone No. Special instruction for operation of the account Nominee Specimen Signature Introducer name Introducers signature

Amount deposited. 3.2.4.4 Additional documents are to be obtained for opening some accounts 1. Proprietorship Firm: Name of authorized persons, designation, and specimen signature card. Trade license. Tax Receipt (For export/import) Declaration of Proprietorship Mandate if operation by third party is to be allowed. Account must be opened in the name of the firm. The firm should describe the names and addresses of all partners. Partnership deed is required which duly attested by Notary Public. Trade license from City Corporation is needed. Tax receipt (for import/export) Photocopy of Registration Certificate duly attested by Notary Public in Letter of Partnership duly signed by all the partners, in case of nonResolution signed by all the partners to open the a/c. Mandate as to operation of the a/c.

2. Partnership Firm:

case of a registered firm. registered firm.

3. Clubs/Societies/ Trustee/Associations/Non-trading Institutions etc: Certified copy of Resolution for opening and operation of account. Up to date list of office bearers. 42

Certified copy of Bye-laws and Regulations/Constitution. Copy of Government approval (if registered). In case of death, a/c, should be stopped until the club nominates Trust deed is needed-for trustee.

another person.

4. Joint Accounts of two or more persons Mandate for Operation of Accounts A clear authority signed by all the joint A/C holders containing instructions as to who will operate the account and how the account is to be operated should be obtained. The mandate should mention the name of the persons authorized to draw check. In case of death/insanity/insolvency of one or more of the joint a/c holders, the authority will cease to operate. Executor: Probate: From a court of law along with a certified copy of the will A mandate in case if there is more than one Executor, signed by all the duly attested by a notary public. executors, as to how the a/c will be operated. Administrator: Letter of Administration from a court of law along with a certified copy duly attested by a Notary Public appointing him as an Administrator of the Estate of the deceased. The operation of the a/c is to be allowed as per instructions of the letter of administration. 5. Private Limited Joint Stock Company Memorandum of Association and Articles of Association duly certified by Chairman of Secretary.

43

Resolution of the Board duly certified by chairman/secretary

authorizing to open the a/c with the Bank and naming the persons who will operate the a/c, as per provisions of Articles of Association. Corporate Agreement Form. Certificate of Incorporation duly certified by Chairman/Secretary. List of Directors duly certified by Chairman/Secretary. Memorandum and Article of Association duly certified by

6. Public Limited Joint Stock Company Chairman/Secretary. Certificate of Incorporation duly certified by Chairman/Secretary. Resolution of the Board duly certified by Chairman/Secretary

authorizing to open the a/c with the Bank and naming the persons who will operate the a/c as per provisions of Articles of Association. Corporate Agreement Form Certificate of commencement of business. List of Directors duly certified by Chairman/Secretary. Copy of Byelaw duly certified by the Co-operative officer. Up to date list of office bearers. Resolution of Executive Committee as regards of the account. Certified copy of Certificate of registration issued by Registrar, Co-

7. Co-operative Society/Societies Limited

operative Societies. 8. Minor's Account: Following documents have to be obtained in case of the account of minor: Putting the word "MINOR" after the title of the account. Recording of the special instruction of operation of the

account.

44

The AOF is to be filled in and signed by either the parents or the legal

guardian appointed by the court of law and not by the minor 3.2.4.5 Issuing Cheque Book to the Customers A. Issue of fresh cheque book Fresh cheque book is issued to the account holder only against requisition on the prescribed requisition slip attached with the cheque book issued earlier, after proper verification of the signature of the account holder personally or to his duly authorized representative against proper acknowledgment.
Fig: Cheque Book Issue in a Flow Chart

Requisition slip filled properly along with the cheque book number.

Banker Verifies the Slip

Banker issues new cheque book if every thing in the right from

Enter the new cheque book number in the register book against the specific customers name.

Procedure of issuance of a fresh cheque:

A customer who opened a new a/c initially deposits minimum required money in the account. The account opening from is sent for issuance of a cheque book. Respected officer first draws a cheque book Officer than scaled it with branch name.

45

 In-Charge officer enters the number of the cheque book in cheque issue register. Officer also enters the customers name and the account number in the same register. Account number is then writes down on the face of the cheque book and on every leaf of the cheque book including requisition slip. There is a special technique to sign every leaf of the cheque book with the help of carbon paper. So officers signature prints the reverse side of the leaf. The name of the customer is also written down on the face of the cheque book and on the requisition slip. The word Issued on along with the date of issuance is written down on the requisition. Number of cheque book and date of issuance is also written on the application from. Next, the customer is asked to sign in the cheque book issue register. Then the respected officer signs on the face of the requisition slip put his initial in the register and hand over the cheque to the customer.

B. Issue of New Cheque Book (For old Account)

All the procedure for issuing a new cheque book for old account is same as the procedure of new account. Only difference is those customers have to submit the requisition slip of the old cheque book with date, signature and his/her address. Computer posting is than give to the requisition slip to know the position of account and to how many leaf/leaves still not used. The number of new cheque book is entered on the back of the old requisition slip and is signed by the officer.

C. Procedure of issuance of a new cheque book:

46

 If the cheque is handed over to any other person then the account holder the bank addressing the account holder with details of cheque book issues an acknowledgement slip. This acknowledgement slip must be signed by the account holder and returned to the bank. Otherwise the bank will not honor any cheque from this cheque book. At the end of the day all the requisition slips and application forms are sent to the computer section to give entry to these new cheque. Then cutting the cheque book issuing) charge. 3.2.4.6 Transfer of an Account The account submits an application mentioning the name of the branch to which he wants the account to be transferred. His signature cards, advice of new account and all relevant documents are sent to that branch through registered post. The balance standing at credit in customers account is sent to the other branch through Inter Branch Credit Advice (IBCA) No exchange should be charged on such transfer. Attention is also given in this connection. 3.2.4.7 Closing the Account Upon the request of a customer, an account can be closed. After receiving an application from the customer to close an account, the following procedure is followed by a banker. The customer should be asked to draw the final cheque for the amount standing to the credit of his a/c less the amount of closing and other incidental charges and surrender the unused cheque leaves. The a/c should be debited for the account closing charges etc. and an authorized officer of the bank should destroy unused cheque leaves. In case of joint a/c, the application for closing the should be signed by all the joint holders. A banker can also close the account of his customer or stop the operation of the account under following considerable circumstances: 47

 Death of Customer. Customers insanity and insolvency. Order of the court (Garnishee order) Specific charge for fraud forgery. # Stop Payment of Cheque: A banker can stop payment of cheque of his customer under following considerable circumstance: Firstly the account holder will apply to stop the payment of his cheque There is a register for this purpose. It is kept by the authorized officer. The officer will see the condition of account and verify everything. In the ledger book, the officer will marked with red ink and the cheque will not be paid. Dishonor of Cheque:

If the cheque is dishonored, JBL send a memorandum (cheque return memo) to the customer stating the reason in the following way: Refer to drawer. Insufficient Fund. Not arranged for. Effects not cleared May be present again. Exceed arrangements. Full cover not received. Payment stopped by drawer. Payees endorsement irregular/illegible/required. Payees endorsement irregular, require banks confirmation. Drawers signature differs/required. Alterations in date/figures/words require drawers full signature. Cheque is posts dated/out of date/mutilated. Amount in words and figures differs. 48

 Crossed cheque must be present through a bank. Clearing stamps required/requires cancellation. Addition to the discharge of bank should be authenticating. Cheque crossed Account Payee Only Collecting banks discharge irregular/required.

3.3 Cash section

3.3.1 Receipt and Payment of cash
Among the services provided by the bank, cash receipt and payment is the most vital and physical function. Generally customer comes to bank to withdraw the money from their account and deposit his savings in their accounts.

3.3.2 Cash Deposit

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.T. Pay order application form Call deposit application form Demand loan pays in slip.

3.3.3 Cash Payments

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 49

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 checks.

The Cash officer will follow the following procedures at the time of payments of checks/other instruments over the cash counter. 1. 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. 2. After getting the instrument the cash officer will verify the instruments and if necessary the cash officer can tell the clients to sign in the backside of the instruments. 3. The officer will enter the check in the cash payments register where the denomination of notes and coins will also be recorded. 4. 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. 5. All checks, drafts, debit vouchers etc. must be branded with Cash Paid stamp with the current date. 6. After payment the cash department for the purpose of clean cash book will send the vouchers. 7. 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.

3.4 Account Section:

This is the most confidential department of a bank. Recording all kinds of transactions of the branch, confirming their accuracy and preparing statements are the main job of this department. Now a day under computerized banking system, the jobs of accounts 50

department become very easy. Now the computer directly prepares the clean cash statement on party ledger vouchers. The function of the accounts department can be divided into two parts: a) Daily function b) Periodical functions

3.4.1 Daily functions:

The routine daily tasks of the accounts departments are as follows: Record the daily transactions in the cash book. Record the daily transactions in general and subsidiary ledger. Prepare the daily position of the branch comprising of deposit and cash. Prepare the daily statement of affairs showing all the assets and liability of the branch as per ledger and subsidiary ledger separately. Pay all expenditure on behalf of the branch. Make salary statement and pay salary. Checking whether all the vouchers are correctly passed to ensure the conformity with the `Activity Report'; if otherwise making it correct by calling the respective official to rectify the voucher. Records inter branch fund transfer and providing accounting treatment in this regard.

3.4.2 Periodical Tasks:

The routine periodical tasked performed by the department are as follows: Prepare the monthly salary statements for the employees. Publish the basic data of the branch. Prepare the weekly position for the branch, which is sent to the Head Office to maintain Cash Reserve Requirement. Prepare the monthly position for the branch, which is sent to the Head Office Prepare the weekly position for the branch comprising of the break up of sector wise 51 to maintain liquidity requirement.

deposit, credit etc. Preparing the budget for the branch by fixing the target regarding profit and deposit so as to take necessary steps to generate and mobilize deposit. JAMUNA bank instead of recording transactions in a journal initially, these are directly recorded and posted in the ledger separating debit and credit by slip and voucher system. Records of all the transactions of every department are kept here as well with other respective branch.

Account Section
IBTA

General Section

Inter-branch transaction

(IBTA) happens when one client of a branch places cheques or DD to his branch (which is not branch which it is drawn) or if there comes TT or the branch sends TT, then there arises arrangement of negotiation between the collecting branch and paying branch. The cheque will be debited on the ledger book by particular amount of the cheque. The journal entry would be like this:
Mirpur Branch Uttara Branch Dr. Cr.

The information that is included on the IBTA register is as follows:

Credit Amount Balance Initial of the concerned officer Remarks

Particulars Advice No Date Debit Amount 52

General Section

Various types of vouchers come to this section from several departments (such as Deposit Department, Remittance Department, Loans and Advances Department). At first, there happens register entry then these goes for computer positing. One of the most important tasks that are performed by this section is to inform the daily deposit position, bills payable and total loans & advances to the Head Office. At the opening of the working days transaction this information (previous working days) must be to the particular department of Head Office.

3.4.3 System of Accounting

The following ledgers are maintained and statements are prepared in the Accounts Departmentsi. ii. iii. iv. v. Transfer Book Supplementary Clean Cash Book General Ledger Subsidiary Ledger a. Income Ledger b. Expenditure Ledger c. Sundry Asset Ledger d. Sundry Deposit Ledger e. Suspense A/C. Ledger vi. vii. viii. ix. x. xi. xii. Voucher Register Balance Book Daily Statement of Affairs Daily Position Statement Weekly Position Provisional Income & Expenditure Statement Accounts Monthly Statement 53

xiii. xiv. xv. xvi.

Salary Statement Half-yearly Statement Annual Closing Balance Statement of Reconciliation Instead of Day Book supplementary

Preparation of Supplementary Sheet:

sheet is used after transfer is completed, all the vouchers are sorted amount head wise. Credit vouchers under specific head are grouped together; similarly all the debit vouchers are grouped. Separate supplementary sheet for each group is made keeping the keeping the figures under the head of Cash, Clearing and Transfer Transaction column. Then the sheet is totaled and the number of vouchers is written on the supplementary sheet. Supplementary sheet should be recorded very carefully and correctly otherwise accounts will not coincide with the cash received, cash Cash Clearing Transfer payment, cash transferred and clearing. Voucher

Recording in register

Posting in Ledger

Supplementary Sheet Preparation

Balance Tally with

Accounting workflowSummary Preparation in branch

Cash-cum Day Book

General Ledger Posting

Affairs Front Page

54

Subsidiary Accounts Posting

Abstract

Affairs Back Page

3.5 Local Remittance section

Due to the rapid expansion and complication of business world and increasing competition business activities are now in broader scope. For this financial transaction also goes in boundless arena. In this case Bank is the only concern, which helps the business world to complete these complicated transactions. Commercial banks in Bangladesh offer the facility of transferring funds, from one 55

place to another, to their customers as well as to the general public. Such transfer of funds can be affected either through Demand Draft of Telegraphic Transfer or Mail Transfer. The aforesaid methods of remitting money from one place to another within the country are known as Remittance. While, it is for outside Bangladesh the same is called foreign remittance. The advantage of this facility is the quick transfer of money with minimum cost and also the risk of physical transportation of cost is criminated. Remittances are sent to one place from other places through D.D, P.O, and T.T etc.

3.5.1 Demand Draft (DD)

Demand draft is a written order of one branch upon another branch of the same bank, to pay a certain some of money to or to the order of a specified person. Drafts are not issued payable to bearer. In practice drafts are not to be drawn between branches within the same city. Drafts drawn by one branch of bank on another payable to order where any draft that is an order to pay money drawn by one on a bank upon another office to the same bank for a sum of money payable to order on demand, purports to be endorsed by or on behalf of the payee, the bank is discharged by payment in due course. From the above provisions as to Crossing, Endorsement, Collection and Payment in due course are the same as for checks:

3.5.2 Telegraphic Transfer (TT)

TT is affected by tile bank through tested message attested by secret check signal, on receipt of which tile paying officer pay the amount to the payee in cash through a telegraphic payment order or credit his account, as the case may be. Both parties must have account in Jamuna Bank Limited, as money is transferred.

3.5.3 Payment Order (PO)

The PO is used for making a remittance to the local creditors. The procedures for selling a PO are as follows: Deposit money by the customer along with application form. Give necessary entry in the Bills Payable register where Payee name,

address, date, PO no: amount is mentioned. 56

Prepared the instrument. After scrutinized and approved the instrument by authority, it is Signature of customer is taken on the counterpart and register

delivered to customer. customers signature part. Commission Charge Amount in Taka Up to 10,000/10,001/= to 1,00,000 1,00,001/= to 5,00,000/5,00,001/= To Above Rate of Commission in Taka 15/= + 3.00 25/= + 4.00 40/= + 6.00 50/= + 8.00

3.6 Clearing Section:

Clearing is one of the most magical parts of modern banking. Now days, the banking activities is boundless. Most of the banks are linked with other banks due to inter bank transactions. Clearing is the only process by whish these transactions are settled. Clearing House is a centralized and computerized system for settling indebtedness between its member banks. Clearing House enables the member banks to offset claims against one another for checks and orders paid into banks other than those upon which they were drawn of the clearing house, Bangladesh Bank, Dhaka. Nature of clearing house

1st Clearing House Outward Clearing 3.6.1 Types of Clearing:

There are two types clearing I.
II.

Return Clearing House Inward Clearing

Outward Clearing
Inward Clearing

Outward Clearing:

When a particular branch receives instructions drawn on the bank within the clearing 57

zone and sends those instructions for collection through the clearing arrangement is considered in outward clearing for that particular branch. This branch is known as collecting branch. Inward Clearing: When a particular branch receives instructions, which are on themselves and sent by other member banks for collection are treated as inward clearing of that branch. Types of Returns: There are two types Returns I.
II.

Outward Returns
Inward Clearing

Outward Returns: Clearing returns (outward) include those cheques that were presented to us by other banks but the bank has to return them unpaid to the collecting banks due to various reasons. Outward Returns: other banks for payment but have been returned and unpaid by them due to specified reason through the clearing house. Clearing returns (inward) consists of those instruments which were presented by us to

3.6.2 Procedures of Outward Clearing:

Sequence First tire: Collecting Branch 1. The instrument is deposited duly entered in the pay-in-slip or voucher. 2. The instrument is checked for apparent discrepancy and is compared with the particular noted in the pay-in-slip. 3. In case an order instrument is being deposited in second payees account, 58

guarantee is obtained from the second payee and is attached to the pay-inslip. 4. In case the payees name on the specially crossed instrument differs slightly that of the depositor, the instrument may be accepted but only from customers well known to the bank and after obtaining an indemnity which is attached to the pay-in-slip. 5. Stamping: Special Crossing: On the instrument Clearing Stamp: Both on instrument and pay-in-slip. Endorsement: Back of the instrument. 6. Duly signed and return of counterfoil to the customer. 7. The particulars of the instrument and voucher are entered in the Outward Clearing Register/Computer. 8. The Register is balanced; the vouchers are separated from the instruments. 9. Prepare voucher: Dr. Suspense A/C: Clearing Adjustment Cr. All pay-in-slip/vouchers Voucher to be passed on the following working day. 10. Sorting of instruments bank-branch wise and accordingly prepares submain schedules. 11. Prepare House page according to main schedules. 12. Tallied house with Outward clearing Register.
13. The house with instrument sent to Principal/Local Office/Main branch (2nd

tire) 14. In the following working day prepared voucher is to be passed. If any return and unpaid instrument is received from principal branch, in addition to above voucher the following voucher will be passed. Dr. Party A/C Cr. Suspense A/C: Clearing Adjustment 15. When advice is received from Principal/Local Office, than following voucher is to be passed. Dr. Head office A/C Cr. Suspense A/C: Clearing Adjustment 59

Outward clearing bills

It refers the instruments drown on the other banks received by the JBL. Cheques drawn on another branch of JBL. The settlement process: Cheques are directly sent to the respective branch. OBC received along the instrument by the respective branch. Entry passed in OBC register of that branch

When IBCA comes customers account is credited.

IBCA is sent from that branch to this branch.

Cheque drawn on another bank, which is situated within clearing house area. Cheque are collected by Sonargang Road Br. IBDA along with bills are sent to Principal Br. These bills are sent to clearing house from principal Br.

Depositors account is credited with JBL Sonargang Road Br.

If drawers Bank honors the bill then

First tire: Principal Branch/ Local office/ Main Branch

Instrument received by this, office: same as previous section SL. 1 to 9. Lodgment by this branch: 1. Received house page with instruments from the branches. 2. Recorded the amount in a register from house page. 3. The instruments with schedules are rearranged bank-branch wise and 60

prepare main schedules for each bank. 4. Prepare house page. 5. The instruments with schedules, house page and the house book are sent to the clearing house through bank representative.

Second tire: Clearing House (Bangladesh Bank/Sonali Bank).

The instruments are delivered to the respective banks.

3.6.3 Procedures of Inward Clearing:

Sequence
First tire: Clearing House (Bangladesh Bank/Sonali Bank).

1. The instruments are drown on the bank are received from other banks in the clearing house. 2. The amount and number of instruments received are entered in the house book from the main schedule of respective banks. 3. The amount of instruments delivered, received and the differences are written on a figure provided in the clearing house.

Second tire: Principal Branch/Local Office/Main Branch

1. The instruments with schedules are arranged branch wise. 2. The amount of each schedule received is entered in the house pages of the respective branch. 3. The respective house pages are totaled and check the amount with total amounts instruments received from all banks. 4. The instruments are sent to respective branches with the slip showing total amount and number of instruments. 5. The instruments sent to the branches concerned for clearance and Advice is collected from them for honored cheques. 61

 Third tire: Paying Branch

1. Particulars of the instruments are compared with the schedule. 2. The instruments are sent to the respective departments for honoring them. 3. For the total value of honored cheques pass the following vouchers: Dr. Party A/C (already debited by instruments) Cr. Head Office A/C
4. Dishonored cheques (if any) with reason, memo and Credit Advice sent Principal Branc

3.6.4 Nikash Software:

Clearing House manual and paper based in many advanced countries have gradually extended their range of activities to include automated and electronic means for settlement of payment transactions. Computerization of clearing operations was the first major step towards modernization of the payments system. The introduction of technology for clearing operations started from December 1997 using Microprocessor based computer system. These systems are used for generating settlement reports on the basis of input data containing the value of (cheques/ instruments presented) claims of one bank over the other banks in the clearing house. Clearing balancing and settlement, which used to take a long time due to differences and error in manual balancing, were reduced, apart from providing accuracy in the final settlement. Nikash is the software developed for entering and processing of clearing and processing of clearing house data. Programs are written under FoxPro database program. This operation manual describes the 1st House menu, Receipt menu, Payment menu, Return House menu, Clearing menu, Maintenance menu and Exit menu to prepare data diskette for clearing house. All necessary code files are included in the software. This package has developed for the use of member bank/branches

3.7 Dispatch Section

Those documents that are enter in the branch or exit of the branch must go through this section. 62

The main objective of this section is; Keeping record of the documents send to other branches or bank. Letters are sending to their respective destination. Send these documents safely and correctly. Receives documents come through different medium, such as postal service, courier service, via messenger etc. Dispatch section of Mirpur Branch performs another duty. It enters the transfer instruments in the scroll book and then sends those to the computer section. Two types of letters are continuously received. These are: I. II. Inward (Registered/Unregistered) letter. Outward (Registered/Unregistered) letter.

At first recording is required whether it is Inward or Outward Registered/Unregistered letters. Then letters are disbursed to their respective destination. Inward letters are firstly segmented according to their different sections and after that an entry is given to the Inward Register book. Books Maintained Local Dispatch Khata (including Peon Book) Register Dispatch Khata (For Registered letter). Ordinary Register Khata (For Unregistered letter). Inward Register Books. Outward Register Books.

CHAPTER: FOUR
LOAN & ADVANCES

63

4.1 Introduction
Commercial banks collect money from one group of people as deposits and distribute them within the other group of customers as loans and advances and it is the most important function of commercial bank. By this way the bank earns profit.

64

As a private commercial Bank JBL has some inherent commitment to the society. It provides loans and advances to the customer, which can gear up the economy actively. Commercial and Industrial loans to business concerns use to finance their day-to-day activities, to finance their longer term needs and for other business purposes. The maturities of these loan 1 to10 years or longer. JBL has been extending credit facilities to the potential, productive and sector as per Bangladesh Bank instructions. Good loans are profit-earning asset to the Bank. A big portion of opening income is generated from sound lending. Bank cannot lend its fund fully. As per Banking Company Act 1991 every banking company has to maintain a specified minimum (presently 16%) of the total of its demand and time liabilities in form of cash and approved securities with Bangladesh Bank. So, Jamuna Bank Limited has to carefully invest in loan/advances to get maximum performance from the investment.

4.1.1 Credit Facilities

The main focus of Jamuna Bank Ltd. Credit Line/Program is financing business, trade and industrial activities through an effective delivery system. Jamuna Bank Ltd. offers credit to almost all sectors of commercial activities having productive purpose. The loan portfolio of the Bank encompasses a wide range of credit programs. Credit is also offered to major thrust sectors, as earmarked by the govt., at a reduced interest rate to develop frontier industries. Credit facilities are offered to individuals including housewives, businessmen, small and big business houses, traders, manufactures, corporate bodies, etc. Loan is provided to the rural people for agricultural production and other offfarm activities. Loan pricing system is customer friendly. Prime customers enjoy prime rate in lending and other services. Quick appreciation, appraisal, decision and disbursement are ensured.

65

Credit facilities are extended as per guidelines of Bangladesh Bank (Central Bank of Bangladesh) and operational procedures of the Bank.

Interest Rates of Loans & Advances

SL 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Type of Landings Agriculture Loan Term Loan to Large & Medium Scale Industry Term Loan to Small Industry Working Capital to Industry Export Trade/Commercial Financing Housing Loan Consumer Loan Credit to Non Bank Financial Institution Others Interest Rate 10% (Mid Rate) 14.00% (Mid Rate) 13.50% (Mid Rate) 14.00% (Mid Rate) 7.00% 14.00% (Mid Rate) 14.00% (Mid Rate) 14.00% (Mid Rate) 13.00% 114.50% (Mid Rate)

4. 2 Classification of Loans and Advances:

4. 2.1 Cash Credit:

Cash credit and continuing credit are the form of credit schemes that are short-terms renewable loans with a special credit time. The interest rate is calculated on a daily limit basis. As credit activities, the cash credit facility is given on security like the collateral. Check the accounts to find out the money are needed or not. Stock (primary or preliminary security) 66

Stock as a form of collateral Land as a form of collateral

There are two types of cash credit. They are as follows: 1. Cash credit (Hypothecation) 2. Cash credit (Pledge) A. Term Loan: Jamuna Bank limited is advancing both short and medium term credit to the commercial sector on the basis of their capital structure, constitution and liquidity consideration. Interest rate is 12% for SSI and 13% for MSI. It is given against land and building along with machinery, personal guarantee of Directors and hypothecation of raw materials.

4.2.2Other special loan facilities of JBL:

A. Personal Loan for Women
The salient features of the scheme are as follows: 1. 2. Name of the Scheme Target Market 3. Purpose(s) Personal Loan for Women Working Women Self employed women Housewives with reasonable income of the spouses A personal loan scheme to Women for purchasing: Household appliances for personal use Buying equipment/ accessories for Business use Hospitalization or other emergency medical needs, House renovation, Office equipment, Marriage in the family, 67

 4. 5. 6. Age Group Minimum Service Minimum Income

Holiday expenses, Educational/professional training of the family members. Purchase of personal Computer. Minimum 18 years Maximum 57 years 1 year
Working Women Tk. 8,000/= to Tk. 10,000/= per month

Self employed Women Tk. 20,000/= to Tk. 25,000/= per month Housewives - Tk. 15,000/= per month (Husbands income/salary)

7. 8. 9.

Minimum Loan Size Maximum Loan Size Down payment Loan Term

Tk. 25,000/= (Taka Twenty Five Thousand only) Tk. 300,000/=(Taka Three Lac only) Nil From 12 months to 36 months

10. 11.

Disbursement

The bank, depending upon the purpose of the loan, may determine Payment shall be made directly by the Bank to the vendor or to the customer, as. Two Personal Guarantees with attested photograph acceptable to the Bank In certain cases the Bank may take hypothecation of the Purchased assets. Demand Promissory Note & other Documents as per Scheme. Four Cheque each covering three installment amount For twelve months loan period. Additional cheque Covering the rest installment amount of the period. Monthly loan installment cannot exceed 40% of customers take home salary. 68

12.

Security

13.

Debt- Burden Ratio

14.

Proof of Income

By submitting the following: Bank statement for last 6 months Salary Statements duly certified by the employer House rent agreement in case of direct income from other source

15.

Repayment:

Allows repaying the loan in monthly installment.

16. Documents required:

Declaration from customer regarding liability with other Banks & Financial Institutions. Declaration from customer regarding loan default status Documentation as per usual Bank practice. Customers may visit any of the Branches and discuss with Manager/Customer Services Desk and Customer shall have to open a Savings/Current A/C with any of the JBL Branches unless already maintain an A/C relationship

B. Shop Finance Scheme

Objectives: 01. To enable the small business community to run the business smoothly 02. Facilitating expansion of the existing businesses 03. To improve the banking habit of self employed persons 04. To diversify banks lending to Small & Medium Enterprises (SME). which are considered as less risky and help community developments. Categories of eligible business: i) ii) iii) iv) v) vi) Grocery/departmental/whole sale store Confectionary/bakery (owned by the bakers) Stationary shops Cloth materials & small local garment traders Shoe makers/shops PVC & plastic product traders/small manufacturers

vii) Tiles/sanitary items retailers viii) Computer/Photostat/Cyber Caf. ix) Electrical & electronic items retailers 69

x) xi) xii) xiii) xiv) xv) xvi) xvii)

Pharmacy Gift shop/cosmetics shops Restaurant/fast food joints Hardwire shops Glass/ceramic retail outlets Sports kit retailers Photo studio Rod, Cement & C.I. Sheet (Tin) Shop Engineering Workshop Fertilizer & Pesticide shop

xviii) xix)

Maximum Loan Amount: 1) Up to a maximum of 10.00 lac in single case or 60% of possession value (distress value to be considered) whichever is lower. However, loan size will depend on creditworthiness of the borrower and the decision of the sanctioning authority. 2) Branch Manager must verify the amount of possession money actually paid before recommending such proposal. Tenure of the loan limit: Minimum 01 year - Maximum 03 years from the date of disbursement of the loan Eligibility criteria: The applicant must fulfill the following criteria to be eligible for loans and advances under the scheme: Shop owner must run the establishment himself, having at least three years of successful business experience Valid lease deed for a minimum period of 03 years up to 05 years Satisfactory conducted deposit account with JBL for minimum 03 months. To deposit the daily sales proceeds in the account maintained with JBL Agree to abide by credit rules & regulations of JBL Furnishing net-worth of the applicant/client. Clean CIB . 70

The intending borrower /loanee shall apply through the letter head of the business firm or through a plain paper requesting the branch manager for sanction of loan under the Shop Finance Scheme

Security: Simple deposit of valid lease deed of agreement of the shop. A tripartite agreement to be signed in between leaseholder/shop owner/Bank- to the effect that the leaseholder cannot rent out or transfer the leased property without the written consent of the Bank. The lease deed between the landlord and the borrower must be duly executed & the original lease deed should be kept in the Bank as part of document. . Repayment Schedule: Repayment schedule should be as under: i) In case of 01 year, 10 monthly installments for the loan limit up to Tk. 3.00 lac with 02 month grace period from the date of disbursement ii) In case of 02 year, 22 monthly installments for the loan limit up to Tk.6.00 lac with 02 month grace period from the date of disbursement iii) In case of 03 year, 34 monthly installments for the loan limit above Tk.6.00 lac with 02 month grace period from the date of disbursement Lease Items Vehicles like luxury bus, Mini bus, Taxi cabs cars, Pick-up, CNG three wheeler etc. Factory equipment. Medical equipment Machinery for Agro Based Industry Construction equipment 71 Letter of disclaimer by the landlord to facilitate the bank to liquidate the default loan (if any) Equal numbers of post dated cheques covering amount of each loan installment

 Office equipment Generators, Lift & Elevators for commercial place. Sea or River Transport. Computer for IT Education Center.

4.3 Important Things in Lending 4.3.1 Documentation:

Documentation is a written statement of facts of proof or evidence arising out of particular transaction that on placement may bind the parties there to answerable & liable to the court of law for sanction of the charge in question. In this connection, bank for the purpose of security take some charge document from the borrower. Common Compulsory Documents A letter of acceptance about the terms & conditions laid down in sanction Promissory note (depending on the type of the borrower) Letter of arrangement

4.3.2 Selection of a Borrower

Selection of a borrower is a vital step for lending. Due to the asymmetric information and moral hazards, banks have to suffer a lot due to the classified loans and advances, which weakens the financial soundness of the bank. If the selection of borrower is correct, as borrowers character, capital and capacity or of reliability, resourceful and, responsibility, the bank can easily get return from the lending. Moreover, monitoring made easier for the banker. Jamuna Bank follows the given procedures: A. Borrower Analysis Borrower Analysis is done from the angle of 3C (Character, Capital, Capacity) or 3R (Reliability, Resourcefulness, Responsibility). The human skill, conceptual skill and operational skill is qualitatively analyzed.

B. Business Analysis 72

Business Analysis is done from two angles, which are terms and conditions and collateral securities. C. Lending Authority All approval of credit facilities must be conveyed under dual signature. Ideally both the signatories must have the required lending authority .Two lending officer of the required lending authority are not available, one of the signatory must have the lending authority. The Jamuna Bank Limited Lending authority or authorized person or officers re as follows: 1. Managing Director 2. Deputy Managing Director 3. Executive Vice President 4. Senior Vice President 5. Senior Assistant Vice President 6. Vice President 7. Assistant Vice President Irrespective of outstanding amount, the banks have to submit credit information of all of then-account of loans and advances to the CIB of BB.

4.4 Credit risk management of JBL:

4.4.1 Credit Rating Report of JBL
(Youre Partner for Growth) Long Term ABBB + 28 June, 2007 Short Term ST - 3 ST - 3

Current Rating 2006 Previous Rating 2004 Date of Rating

Credit Rating Information and Services Limited (CRISL) upgrades the rating of Jamuna Bank Limited (JBL) to "A -" (pronounced as A minus) and reaffirms short term rating to "ST - 3". The above rating has been done in consideration of Bank's 73

visible improvement in fundamentals such as capital adequacy, liquidity position, profitability, introduction of real time online banking etc. However, the above rating is moderated, to some extent, by limited market share, increase in NPL, high cost of fund, moderate corporate governance, dependency on term deposit etc. Financial institutions rated in this category are adjudged to offer adequate safety of timely repayment of financial obligations. This level of rating indicates a corporate entity with an adequate credit profile. Risk factors are more variable and greater in periods of economic stress than those rated in the higher categories. The short term rating indicates good certainty of timely payment. Liquidity factors and company fundamentals are sound. Although ongoing funding needs may enlarge total financing requirements, access to capital markets is good. Risk factors are small Industrial-Credit Jamuna Bank Ltd. offers a complete range of advisory, financing and operational services to its corporate client groups combining trade, treasury, investment and transactional banking activities in one package. Corporate Banking business envelops a broad range of business. Lease Financing
CREDIT RISK

Jamuna Bank Ltd., the highly capitalized private Commercial Bank in Bangladesh has introduced lease finance to facilitate funding requirement of valued customers & growth of their business houses. JBL lease facility is extended to the items like
Financial Risk Luxury bus,

Mini

Business/ bus, Industry and Taxi Risk

cabs.

Management Risk

Security Risk

Relationship Risk

4.4.2Chart of Credit Risk

Leverage Size of Business Experience Security Coverage

Table-4
Account Conduct

Liquidity Age of Business

Success Collateral Coverage Utilization of Limit

Profitability

Team Work

Coverage

Busi ness Outlook

Support

Compliance of Covenant/ Condition

Industry Growth

Personal 74 Deposit

Market Competition

Barriers to Business

4.4.3 Preparation/Processing of Credit Proposals

Credit proposals shall be prepared in the approved format of the bank (Annexure- 1) enclosing/furnishing documents/papers/information: 1. Pre-sanction Inspection Report containing DYC (Annexure-2) 2. Request for Credit limit of customers (Annexure-3) 3. Project Profile/profile of Business 4. Copy of Trade license duly attested 5. Copy of TIN Certificate

4.4.3 Preparation/Processing of Credit Proposals

Credit proposals shall be prepared in the approved format of the bank (Annexure- 1) enclosing/furnishing documents/papers/information: 6. Pre-sanction Inspection Report containing DYC (Annexure-2). 7. Request for Credit limit of customers (Annexure-3). 8. Project Profile/profile of Business. 9. Copy of Trade license duly attested. 10. Copy of TIN Certificate. 11. Certified copy Memorandum and Articles of Association Certificate of Incorporation Certificate of Commencement of Business Resolution of Board of Director Partnership Deed (sheer applicable). 12. Personal Net worth Statement of the Owner /Director /Partner /Proprietor in Banks format (Annexure-4).

75

13. Valuation Certificate in Banks format along with photograph of collateral security with detail particulars on the back duly authenticated by the Branch Manager (Annexure-5). 14. Three3) years Balance Sheet and Profit and Loss A/C. 15. Credit Risk Grading fro credit facilities irrespective of amount other than Consumer loan and SME loan covered under consumer and SME guidelines. 16. Credit Report from other Banks. 17. Indent/Performa Invoice/Quotation (where applicable). 18. Price Verification Report (where applicable). 19. Statement of A>C (CD/SB/CC) for the last twelve (12) months. In case the customer maintaining account with other Bank. Statement of Account for the last twelve (12) months of the concerned Bank should be furnished. 20. In case of L/C proposal derailed performance of L/C during the last year i.e. No... Nd date of L/C opened commodity L/C value Date of creation of PAD date of retirement mode of retirement etc. 23. Justification/consideration for the facility.

Organizational Structure for Credit Operation

76

BOARD EC MD DMD Corporate Division

General Credit Dept

Credit Division
CRM Dept Recovery & Legal Dept

Credit Administration Division

Internal Audit

SME Dept. Trade Finance Dept Leasing Dept Syndication & Structured Finance dept

Branch wise Structure Head of Branch

Credit Marketing Team

Credit Approval Team

Credit Administration Team

Credit Recovery Team

4.4.4 Credit Risk Assessment

77

A thorough credit risk assessment should be conducted prior to the sanctioning of credit facilities. Thereafter it should be done annually for each relationship. The result of this assessment shall be presented in the credit proposal originated from the relationship manager (presently branch). The Relationship Manager (Presently Head of Branch) should be the owner of the customer relationship and must ensure the accuracy of the entire credit proposal submitted for approval. Relationship Manager must be familiar with Banks Lending guidelines And should conduct due diligence on the borrower, principals and Money Laundering Guideline be adhered to. Follow risk areas in the credit proposal should be addressed and assessed before sending to head office. 1. Borrower Analysis: Share holding Reputation Education Experience-success history Net worth Age etc. 2. Industry Risk Industry position/ threat/prospect. Risk factors pertaining to the industry Borrowers position/ share in the industry. Strength, weakness of the borrower compared to the competitors etc. 3. Supplier Buyer risk Analysis Concentration on single/ few buyer/ supplier are addressed. Demand supply position 4. Demand supply position Concentration on single/ few buyer/ supplier are addressed. Demand supply position 5. 6. 7. 8. 9. Technical feasibilities/ infrastructural facilities Management teams competence Seasonality of demand Debt-equity ratio Historical financial analysis An analysis of three years historical financial statements. Earning-its sustainability Cash flow Leverage Profitability Strength and reliability of balance sheet etc. 78

10. Projected financials Sufficiency of cash flows to service debt repayment. Debt service coverage ratio 11. Trade checking 12. Account conduct For existing customer the repayment histories, credit turnover, study of account statement. 13. If the customer is proposed to be migrated from other bank, statement of account from present banker is required. 14. Allied deposit with the bank 15. Other business with the bank 16. Pricing-effective rate of return, return on investment. 18. Security. 19. Succession issue. 20. Margin, volatility of business, high debt( Leverage/ Gearing), over stocking, huge receivables with long aging, rapid expansion, new business line, management change, lack of transparency should be addressed. . 21. 22. Environmental factor. Employment generation and contribution to the national economy

4.4.5 Credit Monitoring

I. Computer generated list of exceptional advance to be obtained from the Branches on daily basis which shall be examined at major exception be brought to the knowledge of Senior Management. II. Credit Administration Unit, Head Office shall bring the list of documentation shortfall/ deficiencies to the knowledge of Senior Management at regular basis and corrective measure shall be taken. III. Credit turnover in cash credit and overdraft accounts, past dues, collateral shortfall, covenant Branch shall be reviewed on a regular basis. IV. Recurring transactions are not allowed for one time transaction/limit. V. Credit limit expiry date diary shall be maintained and followed-up. VI. Use of Loan money shall be monitored through analysis of financial statement. 79

VII. Borrower shall be communicated ahead of time as and when installments are due.

VIII. Non payment and late payment of installment shall be communicated to the Senior Management. IX. CIB Report from Bangladesh Bank is obtained and reviewed on a periodic basis. X. Timely renewal of limit shall be ensured information Branches two months ahead of expiry dates.

4.4.6 Credit Risk Management Unit

The credit risk management unit shall perform interlayer the following duties a) Assess risks inherent in the credit proposal sent by corporate division and also evaluate proposed facility pricing based on risks, security, structuring and conditions to suit the business condition and to protect banks interest. b) Compliance to the existing rules and regulations of the bank and all regulatory authorities and laws of the country and to advice the corporate division for rectification, if required. c) d) e) Advice the corporate division about changes, if required, in the structure and Process credit proposal for approval of the competent authority. Issues sanction advice for credit facilities or decline. terms and conditions of the proposed facility.

f) Maintain limit sanction register. g) Handover loan to the credit monitoring and recovery unit as and when it is degraded to Special monitor or bellow:

Duties and responsibilities of CRM a) Examine/review i. ii. Committee. iii. Decline credit proposals if they do not meet criteria. 80 credit proposals (new/renewal) sent by corporate division/branches to. Process for approval. Placing credit proposals in the Head Office Credit

iv. v. b)

Recommendation of credit proposal to the Managing Director/EC/Board for their approval. Prepare facility sanction letter and send copies to: Corporate division/Branches Credit Administration Division Review on a periodical basis in the light of Structuring Adequacy of security Pricing and profitability Financial analysis Form and content Performance Turnover Repayment

c) Revise and ratify borrowers risk grade developed by Corporate Division/branches. d) Review delegated credit approval authorities on an annual basis. e) Review approval procedures of Retail Credit from time to time. f) Review and update banks and credit operating procedures on an annual basis. g) Conduct industry analysis and detect risk involved with each industry. h) Formulate strategy to minimize risk of lending to specific industry. i) Guide and educate officers of all units of credit division and corporate division/branches.

81

CHAPTER: FIVE
Foreign Trade and foreign Exchange

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5.1 Introduction
Foreign trade refers to trade between the residents of two different countries. Each country functions as a sovereign state with its set of regulations and currency. Foreign Exchange means the currency of other country. Firms and organization requires foreign exchange to purchase goods and services from abroad or for purposes of investment or speculation. Bank is the only concern, which has the legal right to handle foreign trade and foreign exchange. Foreign Exchange is a process, which is converted one national currency into another and transferred from one country to the other countries. Foreign Exchange is the rate of exchange in both countries currency. Foreign Exchange is that section of economic science, which deals with the means and method by which right to wealth in one countries currency are converted into rights to wealth in terms of another countrys currency. It involved the investigation of the method, which exchanges the currency of one country for that of another, the causes which rented such exchange necessary the forms which exchange may take and the ratio or equivalent values at which such exchanges are effected. The difference in the national of the exporter and importer presents certain peculiar problems in the conduct of International trade and settlement of the transaction arising here form, such important problems are: Different countries have different monetary units. Restrictions imposed by countries on import and export of goods Restrictions imposed by nations on payment from and into their countries Difference in legal practice in different countries Foreign Exchange means foreign currency

5.2 Foreign Remittance

Jamuna Bank Ltd. has a network of 19 branches in Bangladesh and 4 more branches are going to be added to network soon. 83

Remittance services are available at all branches and foreign remittances may be sent to any branch by the remitters favoring their beneficiaries. Remittances are credited to the account of beneficiaries instantly through Electronic Fund Transfer (EFT) mechanism or within shortest possible time. Jamuna Bank Ltd. has correspondent banking relationship with all major banks located in almost all the countries/cities. Expatriate Bangladeshis may send their hard earned foreign currencies through those banks or may contact any renowned banks nearby (where they reside/work) to send their money to their dear ones in Bangladesh. To facilitate sending money in Bangladeshi Taka directly, Jamuna Bank Ltd. has Taka Drawing Arrangement with many banks/exchange companies in different countries. The expatriate Bangladeshis may send their money in BDT through the branches/subsidiaries of Jamuna Bank Ltd.

5.3 International Trade Finance

International Trade forms the major business activity undertaken by Jamuna Bank Ltd. The Bank with its worldwide correspondent network and close relationships with key financial institutions provides an extensive trade services network to handle your transactions efficiently. Personnel experienced in International Trade Finance staff the key branches in Dhaka, Chittagong, Sylhet and Naogaon. These offices are the focal point for processing import and Export transactions for both small and large corporate customers. The bank offer a complete range of Trade Finance services. The professionals will work with you to develop solutions tailored to meet your requirements, through mobilizing the full range of trade services locally, and drawing on the global resources. The bank can offer you professional advice on all aspects of International Trade requirements, namely:

Issuing, advising and confirming of Documentary Credits. Pre-shipment and post-shipment finance. Negotiation and purchase of Export Bills. 84

Discounting of Bills of Exchange. Collection of Bills. Assist customers to insure all risks. Foreign Currency Dealing etc.

To provide International Trade related services the banks have established Correspondent Banking relationship with 336 locations of 106 world reputed Banks in more than 100 countries.

5.4 Functions of Foreign Exchange

The Bank acts as a media for the system of foreign exchange policy. For this reason, the employee who is related of the bank to foreign exchange, especially Foreign business should have the knowledge of these following functions: Rate of Exchange How the rate of exchange works Forward and spot rate Methods of quoting exchange rate Premium and discount rate Risk of rate of exchange Causes of fluctuations of rate of exchange Exchange control Convertibility Exchange position Intervention on money Foreign exchange transaction Foreign Exchange trading Export and import letter of credit Non-commercial letter of trade Financing of foreign trade 85

 Nature and function of foreign exchange market Rules and regulation used in foreign trade Exchange arithmetic

5.5 Letter of Credit (L/C)

A letter of credit is an instrument used by a bank to its customer placing at the letters disposal such agreed sums in foreign currency are stipulated. A letter of credit is a letter from one banker to another authorizing the payment of a specified sum to the person named in the letter on certain specified conditions. Commercially, letters of credit are widely used in the international import and export trade as means of payment. In an export contract, the exporter may require the foreign importer to open a letter of credit at the importers local bank for the amount of the goods. This will state that it is to be negotiable at a bank in the exporters country in favor of the exporter; often the exporter (who is called the beneficiary of the credit) will give the name of the negotiating bank.

5.5.1 Forms of Letter of Credit

A letter of credit may be of two forms. These are as follows: A. Revocable Letter of Credit: B. Irrevocable Letter of Credit: .

5.5.2 Types of Letter of Credit

Letter of credit is classified into various types according to the method of settlement employed. All credits must clearly indicate in major categories: Sight payment credit Deferred payment credit Negotiating credit Revolving credit Transferable credit 86

5.5.3 Parties to a Letter of Credit

A letter of credit is issued by a bank at the request of an importer in favor of an exporter from whom he has contracted to purchase some commodity or commodities. The importer the exporter and the issuing bank that is involved in various capacities and at stages to play an important role in the total operation of the credit. The Opening Bank The Advising Bank The buyer and the Beneficiary The Paying Bank The Negotiating Bank The Confirming Bank

5.5.4 Components of a Letter of Credit

Bank normally issued letter of credit on firms, which clearly indicates the banks name and extent of the banks obligations under the credit. The contents of the L/C of different banks may be different. In general L/C contains the following information: A. Name of the Buyer: Who is also known as the accounted since it is for his A/C that the credit has been opened? B. Name of the Seller: Who is also known as the beneficiary of the credit? C. Moment of the Credit: Who should be the value of the merchandise plus any shipping charge intent to be paid the credit? D. Trade Terms: Such as F.O.B and C.I.F E. Tenor: Tenor of the draft, which is normally dependent upon the requirements of the buyer. F. Expiration Date: Which is specified the latest date documents may be presented. In this manner or by including additionally a latest shipping date, the buyer may exercise control over the time of shipment. G. Documents Required: Which will normally include commercial invoice, 87

consular or customer invoice, insurance policies as certificates, if the source is to be effected by the beneficiary and original bills of loading. H. General Description of the Merchandise: This briefly and in a general manner duly describes the merchandise covered by the letter of credit.

5.5.5 Procedures of Opening Letter of Credit

After receiving the performed invoice from the exporter the importer by applying for the issue of a documentary credit, the importer request to his bank to make a promise of payment to the supplier. Obviously, the bank will only agree to this request if it can rely on reimbursement by the applicant. As a rule accepted sole security for the credit particularly are not the shorts of commodity that can not be traded on an organized market. The applicant must therefore have adequate funds in the bank A/C or a credit line sufficient to cover the required amount. Banks deals in documents and not in goods. The client must have a current account with the bank. The bank has issued the credit obligation to pay on condition which presenting the stipulated documents within the prescribed time limit. The applicant cannot prevent a bank from honoring the documents on the grounds that the beneficiary has not delivered the goods on redder reissues as contracted. The importer submits the following documents before opening of the L/C: Tax Identification Number (TIN) Valid Trade License Import Registration Certificate LCA form Application and Agreement Form IMP Form Necessary charge documents for documentation

The Bank will supply the following documents before opening of the L/C:

The above documents/papers must be duly signed and filled in by the party according 88

to the instruction of the banker.

5.5.6 Documentary Letter of Credit (Export/Import Documentation)

Documentary Letter of Credit is such kinds of commercial letter which a bank issue on behalf of foreign seller (exporter) according to the direction of the purchasers (importers). The documents shown under are known as export document from the importers side. These are as follows: Bill of Exchange Bill f lading Airway bill/ railway receipt Commercial invoice Insurance policy Certificate of origin Packing list Bill of entry The exporters submit the following documents/papers to the negotiating bank: Bill of Exchange/draft Bill of lading Airway bill/ railway receipt Commercial invoice Insurance policy Certificate of origin Packing list Weightiest and measurement list Others etc.

5.5.7 L/C operation of Jamuna Bank Limited

Now a days Jamuna Bank Limited is one of the leading and most successful in banking section in the country. It plays a great role in the economy of the country. By export-import business the bank play a great role to the economy of Bangladesh. Foreign trade plays a vital role in the economic advancement process of a nation. So the trend of countrys foreign trade, i.e., import and export is of a great concern to the government of a country. Fluctuation in the parameters of foreign trade immediately brings about some impact on the total economy. As such the nature, trend and the volume of foreign trade are required to keep peace with the national economic needs 89

and objectives.. Before opening L/C in favor of the exporter the entitlement of the importer to be registered with Bangladesh Bank. For this purpose the importer is to apply through L/C authorization from LCA form. This is a set of quintuplicate and the authorized dealer will issue LCA form to the individual importer at their request. After filled up and signed by the appropriate column of the LCA form, the importer will submit it to authorized dealer who interns forward the same to Bangladesh Bank for registration where fund is purchased from Bangladesh Bank. After registration Bangladesh Bank forward the 1st and 2nd copy of LCA form to the authorized dealer, 3rd and 4th copy to CCI&E and keep the 5th copy as their office copy. 1st copy of LCA is known as exchange control copy against which authorized dealer can open L/C at the request of the importer. 2nd copy is known as custom purpose copy which will be handed over to the importer who will clear the goods from the port of its arrival through this custom purpose copy of LCA along with other shipping documents. The importer will come to Mirpur Branch of Jamuna Bank Limited with request to open L/C along with the following documents/papers: L/C application and agreement for with adhesive stamp of Tk.50. Indent/performed invioce/contract-3 copies. Insurance cover note with premium paid receipt. IMP form one set duly signed by the importer. Any other documents if necessary.

Authorize dealer will scrutinize the documents and open the L/C in favor of the exporter by converting the Bangladeshi Taka in to foreign currency at the existing B>C selling rate of exchange. Care must be taken so that the limit of Bangladeshi Taka is not exceeding any way. The foreign currency value of the L/C must correspondent the equivalent amount of Bangladeshi Taka if LCA registered with Bangladesh Bank. The authorized officer of the authorize dealer will check the L/C carefully and signed the same jointly and forward the 1st and 2nd copy to their foreign correspondent situated at the nearest place of the exporter. This Bank is known as Advising Bank. 90

On receipt of the L/C the Advising Bank after verification of the duplicate copy at their end. The exporter will prepare bill of exchange, Invoice and other documents as specified in the L/C and submits the same along with the original copy of L/C to his Bank within the time mentioned in the L/C. If every thing is in order wise completed the Bank will make payment of the amount of L/C to exporter in their local currency by debiting to their own account. Subsequently the negotiating Bank will claim the L/C with Head Office of L/C opening bank maintained foreign currency amount.

5.5.8 Lodgment of Import Bill

The documentary letter of credit constitutes of the important methods of financing trade. On receipt of the documents from the negotiating bank, the L/C opening ban will make entry the particulars of the documents into Inward Foreign Bill Register and prepare the voucher by converting the foreign currency into Bangladeshi Taka. This stage is known as lodgment of import bills. The L/C opening bank may receive these documents from his foreign correspondent bank in two ways: Documents on collections basis Negotiated documents A. Procedure of Lodgment After scrutinizing, if it is found in order the officer concerned will brand a rubber stamp Checked and Found Correct which will be followed by his initial. The amount of foreign currency will be converted into Bangladeshi Taka with the exchange rate prevailing on the date of lodgment. The particulars of documents will be entered in the Inward Foreign Bill Register. A. Preparation of Voucher: The following vouchers are to be prepared: a) Lodgment Voucher: Dr. PAD/Draft amount +Negotiation Commission (if any) Cr. Reimbursing bank A/C b) Liability Voucher Liability Voucher to be reserved which was originated at the time of opening L/C Dr. Bankers Liability on L/C (Cash) 91

Cr. Customers Liability on L/C (Cash) 5.5.8.2 Accounting Treatment for Remittance Vouchers: Dr. Opener A/C Dr. Sundry Deposit A/C (Margin on L/C) Cr. PAD/Draft Amount (Any other charge vouchers if necessary.)

5.5.8.3 Scrutiny of the Documents The L/C opening bank being received the documents from the negotiating bank will scrutinize the documents with the respective L/C terms and conditions. Forwarding schedule of negotiating bank Whether there is any transaction Whether these instructions can be complied with Whether the negotiating commission realized

A. Bill of Exchange (Draft): Whether it is drawn in order Whether the amount draft corresponds with the L/C amount Draft amount should be equal or less than the L/C amount Whether the date of the draft within the date as per LC etc. B. Bill of Lading: Whether the bill is clean Whether the date of B/L is within the date of shipment as per L/C Whether the freight is prepared or not as per L/C terms Whether the part of shipment and part of destination are similar as per L/C Whether the full sets of B/L dispatched by negotiating ban Whether the title of B/L belongs to L/C opening bank C. Commercial Invoice: Whether the full particulars of goods have been incorporated Whether the amount of invoice corresponds with the amount of bill of exchange as per the L/C terms 92

 Whether IRC No. LCA No. have been incorporated Whether the beneficiary signs it After scrutinizing, the official concerned may found the following: Documents are in order i.e., no discrepancy Minor discrepancy- Acceptable to the importer Major discrepancy May be acceptable to the regulations or those are irrevocable.

5.7 Loan against Import Merchandise (LIM) Form

Import finance plays a vital role in countries foreign trade and business. Import of goods and services are needed not only for export production but also to supply domestic industry with the necessary inputs, which are not locally available at uneconomic cost and are needed for expansion and development. Loan against Import Merchandise (LIM) is a facility provided by the bank to the importers who are in shortage of funds to retire the import bills and thus to clear the goods from the Port Authority. In other words it may be referred as an advance against import merchandise. LIM Account is opened due to the Importers request or by force

CHAPTER: SIX
GENERAL DISCUSSION AND FINDINGS

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6.1 Loan and advance Aspect

While working at JBL Mirpur branch, I have attained a newer kind of experience. After collecting and analysis data I have got some problem of the JBL. These problems completely from my personal viewpoint, which is given below: Lack of update products is a drawback of the general banking area of the JAMUNA Bank. New products such as student loan, medical loan, marriage loan are not available in JBL. From the clients view introducer is one of the problems to open an account. It is general problem to all commercial bank.

They face troubles with those clients who have not any knowledge in banking transactions and banking rules.

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As the deposit is heart of running the banking activities JAMUNA Bank Deposit growth not good. Because JAMUNA Bank deposit rate is low other than commercial bank such as Dhaka Bank, Prime bank Mercantile Bank, HSBC Bank, Bank Asia etc.

JBL has not recruited competent people to filling its lower and mid level position they recruit only once a year. This is really tough to recruit high skilled employees.

Lack of proper training arrangement of employees. As a result of technological change such as use of new software There are few staffs who have lacking in computer knowledge are not efficient enough to finish every task immediately so before utilizing new technology proper training should be arrange.

Clients generally complain that rate of interest for various type of credit is quite high. In many cases productivity from loaned investment is inadequate that borrower become incapable in repaying loan.

One problem is that bank always follows the policy of risk averse in the world today all the organization are moving in approach of risk taking. As a result it is facing some problems and also facing competition from other bank.

The recovery of capital in small business loan section is threatened. JAMUNA Bank has insufficiencies of Authorized Dealer Branch in respect of the total foreign business. Bank has only six branches, which have AD licenses. As a result in total foreign exchange business is very small in respect of total market.

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Per-shipment inspection certificate should obtain from the exporter of back to back L/C. Because it reduce it fraud and forgery in case of import against master export L/C, but all the time this pre-shipment inspection certificate are not wanted by the bank

JBL does not promote itself for catering its services to the public or the business organization.

6.2. SWOT ANALYSIS OF JBL

STRENGTHS

WEAKNESSES

Experienced top management. Satisfactory capital base. Low infection in loan exposure. Prospective IT infrastructure.

Limited market share. Exposure to large loanExcessive dependency on term deposits. Weak fund management. High cost of fund. Islamic Branch funds are not ring fenced.

OPPORTUNITIES Regulatory environment favoring private sector Development.

THREATS Increased competition in the market for quality assets. Supply gap of foreign currency. 96

Credit card. Small and medium enterprises.

Over all liquidity crises in money market.

CHAPTER: SEVEN
CONCLUSION AND RECOMMENDATIONS

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6.3 Conclusion
There are a number of Private Commercial Banks, Nationalized Commercial Banks and foreign Banks operating their activities in Bangladesh. The JAMUNA Bank Ltd is one of them. For the future planning and the successful operation for achieving its prime goal in this current competitive environment this report can be helpful guideline. From the practical point of view I can declare boldly that I really have enjoyed my internship at JAMUNA Bank Ltd from the first day. Moreover, internship program that is mandatory for my MBA program, although it is obviously helpful for my career building. In the last decade there has been a revolution in the communication media through the introduction of internet and other forms of secure dial-up media. This had an immense impact on all the sectors of the industry specially the banking sector. The number of banks is increasing day by day because the demand of the customer for the banking service is high .as a result there is a highly competetative situation in the banking 98

sector and people have many option incase of taking banking services .As a central bank of Bangladesh. To compete in the environment of advancing technology and faster communication the JBL should depend more heavily on the quality service and information technology. No doubt about it that JBL achieve superior position in our banking industry but to cope with customer JBL should think how to make it services proactive. To compete with other banks operation in Bangladesh, JBL should introduce easier way for faster processing of credit analysis. Banks always contribute towards the economic development of a country. Compared with other Banks JAMUNA Bank Ltd is contributing more by investing most of its funds in fruitful projects leading to increase in production of the country. It is obvious that right channel of Banking establish a successful network over the country and increases resources; will be able to play a considerable role in the portfolio of development in developing country like ours. JAMUNA Bank Ltd playing its leading role in socio-economic development of the country. Since inception JAMUNA Bank Ltd has been rendering its Banking services with the needs of the nation to cope with the demands of people in the country. As a leading bank of Bangladesh, JBL contributes in the business with promising future. I can hope that JBL can spread their business with increasing various scheme and other utility services.

6.2 Recommendations:
Some necessary steps are recommended bellow on the basis of collected data, observation, expert staffs opinion and my knowledge and judgments. For the probable solutions of the identified problems ensure better process to JAMUNA Bank in future.

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The branch manager should ensure proper distribution of works responsibility among personnel strictly and monitor the activities of the officer so that the clients get efficient service.

In the face of competitive and customer dominated scenario JBL must come up with innovative products to meet up the demand of time. Such as study loan, medical loan, debit card, dual currency credit card etc.

Interpersonal relationship needs to be built among the employees and superiors. A philosophy of working for the customer instead of working for boss must be introduced.

Job description should be clarified and proper training facilities should ensure to improve the performance of bottom line management.

The entire department should be well informed regarding their goals and objectives. It is essential to execute company objective into individual target.

Bangladesh bank should more active to provide CIB report. JBL Should expand its own credit Card and Automated Teller Machine (ATM) because of present market demand of the customer and the educated customer now wants technology based banking but customers are confused about services.

JAMUNA Bank should develop effective online banking system to compete with other commercial banks.

If the entire banking system is fully online on computerizes system perfectly then they satisfy the customer by providing fast service with minimum service charge. 100

It can be recommendation that if all the branch of The JBL a vivid account manual for the account holder, it will be better for the bank.

A company book regarding service offered by the bank and accountability and proper monitoring strengthen the services.

JAMUNA Bank should give more attention to advertisement for creating more attraction among its customers, which is helpful to collect more deposits and increase investments scope. Thats why bank should give emphasis on advertisement in various media live TV, News Paper, Internet and Billboard.

A complain box for the customer, each and every complaint form the customer has been received and find out the problems and therefore try to eliminate the problems of the customer as soon as possible.

APPENDICES

Appendix A: Bibliography 1. Volt no-1 (1st issue), BUBT University Review, Credit Risk Management Practice (An evaluation on Commercial Banks in Bangladesh) Appendix-B: Annual Report 1. Annual Reports of JBL year 2004 2. Annual Reports of JBL year 2005 3. Annual Reports of JBL year 2006 4. Annual Reports of JBL year 2007 5. Annual Reports of JBL year 2008 6. Annual Reports of JBL year 2009 101

7. Annual Reports of JBL year 2010 8. Published booklist and hand bills of JBL 9. Credit Risk Grading Policies of JBL 10. CRG Chart provided by Bangladesh Bank 11. JBL General Banking Policy Book 12. JBL Foreign-Exchange Banking policy guideline Website:

1. www.jamunabankbd.com 2. www.bangladeshbank-bd.org 3. www.wikipedia.com ******* END*******

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