general banking activities of uttara bank limited
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General Banking Activities Of UTTARA Bank Limited
CHAPTER ONE
Introduction1.1 Introduction
Banking system Occupies an important place in a nation economics banking institutions
is indispensable in a modern society. It plays a pivots role in the economics development
of a country and forms the core of the money market in a advance country, in recent
times the banking sector of the world has been undergoing a lot of changes due to
deregulation. Technological innovation, globalization etc. Bangladesh Banking sector is
lagging for behind in adopting these changes. To thrive well in this changing
environment, but only development of appropriate infrastructure is necessary but also
infusion of professionalism in to banking service is essential. The banking sector is one
of the highly regulated sectors in our country. It is governed by the rules and regulations
of central bank of the country i.e. Bangladesh bank and security and Exchange
commission. The bank companies are forced to comply the best accounting practices. It
strictly follows international Accounting Standard (IAS) norms. It publishes to financial
statement every year getting it duly audited by recognized audit firms. Every bank of our
country has a division named financial Administration Division (FAD) which takes care
of the accounting issues of the Bank. Most of the personnel who lead these divisions are
of accounting background. Among the account based FAD personnel who know the
banking operation better can contribute mere in the banks.
1.2 History Behind the Report
For Internship report each student has to prepare a report on their choice. According to
this requirement, I have already completed by internship report. I know the conventional
banking system. For by reporting purpose a lot of time I went IVTRA to collect necessary
information. On the basis of my practical experience as well as theoretical knowledge, I
have completed the report regarding “An Analysis of the Activities of General Banking
Division of Uttara Bank Ltd. Moghbazar Branch” the main focus of my study is to
analyze the deposit and banking system. Conventional bank is given by interest against
its deposit and lend money or issue securities with fixed interest. Instead it finance in
various schemes approved by council board to achieve its goal.
1.3 Objectives of the Study
The main objectives of the study are to gather practical knowledge regarding banking
system and operation. This practical orientation gives us a chance to coordinate out
theoretical knowledge with the practical experience. The following are of objective for
this practical orientated in bank.
To apply theoretical knowledge in the practical field.
To find out the overall features deposit scheme of UBL
To fined out the overall pictures of investment of UBL.
To identify strength and weakness of lending of overall banding system,
To identify the problems related to investments faced by UBL and other
conventional bank.
1.4 Scope of the Study
The conventional banking system is acquired by the practical knowledge of the Uttara
Bank Ltd. Moghbazar Branch. They are nationally Commercial Banks, local private
Commercial bank. I am working condition set up air-condition. The bank is working
processed used by computer excel. I am acquiring by the knowledge observation face to
face conversation. I required by the one desk to other desk. I am working conventional
banking system of Uttara Bank Limited. The banking division in internship is practical
report of the general banking division. The internship report of the University is an
integral part of the BBA program. So it is obligatory to undertake such task by the
students who desirous to complete and successfully end-up their BBA degree. This also
provides an opportunity to the students to minimize the gap between theoretical and
practical knowledge. During the internship the teachers of the department are attached to
actively and constantly guide the students. Students are required to work on a specific
topic based on their theoretical and practical knowledge acquired during the period of the
internship program and then submit it to the teacher. That is why we have prepared this
report.
1.5 Methodology of the Study
For smooth and accurate study every one have to follow some rules and regulations, the
study impute were collected from two sources
(a) Primary sources
I. Practical desk work
II. Face to face conversation with the officer
III. Directs observations
(b) Secondary Sources
I. Annual Report of UBL
II. Files & Folders
III. Memos & Circulars
IV. Various Publications on Bank
V. Websites
VI. Different circulars sent by Head office and Bangladesh Bank
There are two major methodologies of the study. Describe which are below:
A. Primary Sources.
There are three items of primary sources which are below:
i. Practical Desk Work: - Any student is practical knowledge acquired by the
desk to desk. I acquired practical knowledge one officer to another officer.
ii. Face to face conversation with the officer:- The internship way is the
practical knowledge from the bank officer. The banker are busy all-time.
So , the banker is some time learned by the practical knowledge.
iii. Direct Observation:- Direct Observation are acquiring by the knowledge.
It is possible acquired by the practical knowledge.
B. Secondary Sources.
There are some secondary sources. Describe are which secondary sources:
i. Annual Report of UBL:- The annual report of UBL are needed by the making
report. The report are making by the needed by the internship of the Bachelor of
Business Administration.
ii. Files and Folders:- The file and folders are needed by the internship report
completed by the Bachelor of Business Administration. The file and folders are
needed by the cover page forwarding loan section .
iii. Websites:- The websites are needed by the internship report by the completed by
the BBA program.
iv. Different circulars sent to Head Office and Bangladesh Bank: - The diffident
circulars sent to Head office of the Bangladesh Bank. At first any circular is
Bangladesh bank sent to Head office message.
1.6 Limitations of the Report
There were some problems while I conducting the orientation program, a whole hearted
effort was applied to conduct the orientation program and to bring a reliable and fruitful
result, in spite of having the whole hearted effort, there exit some limitation which acted
as a barrier to conduct the program. The limitations were…
Three months time is not enough for such an extensive study. It is very difficult to
collect all the required information in such a short period.
Due to some legal obligation and business secrecy banks reluctant to provided
data. For this reason, the study limits only on the available Published data and
certain degree formal and informal and informal interview.
The Bankers are very busy with their jobs, which lead me little time to consult
with.
Lack of experience.
Learning all the banking function about credit within just two and half months
was really tough.
Another limitation of this report is banks policy of not disclosing some data and
information for obvious reason, which could be very much useful.
CHEPTER TWO
Profile of the Organization2.1 An Overview of Uttara Bank Limited.
Uttara Bank is one of the largest and oldest private sector commercial bank in
Bangladesh, with years of experience. Adaptation of modern technology both in
terms of equipment and banking practice ensures efficient services to clients 209
branches at home and 600 affiliates worldwide create efficient networking and reach
capability. Uttara is a bank that serves both clients and country.
2.2 Historical Background of UBL
Uttara Bank Limited is deeply related with the history tradition and living standard
of human of the country. This Bank started its operations on 28 th January 1965 as a
commercial bank by Eastern Banking Corporation, which is interpreting by a private
organization. In 1972 the Bank takes this name Uttara Bank. It had been limited
company in 1983 that is named Uttara Bank limited. On 21st August 1983 it
2.3 Objectives of Uttara Bank Ltd.
The objectives of UBL are follows:
Mobilizing deposit from the surplus economic unit to deficit economic unit.
Cater to all different segments of retails and wholesale customer.
Being a high quality distributor of products and services.
Serve the people of the country by providing financial assistance.
Help the nation in reducing the employment problem by securing services to
a large number of people.
Ensure balanced economic development though out the country.
To expand business.
To keep position in the competitive market.
To contribute in profitability of UBL.
2.4 Features of UBL
The bank is committed to turn all its activities as per council board. UBL through its
steady progress and continuous success has earned the reputation of being one of the
leading private sector banks of the country. The distinguishing features of UBL are
as follow:
All its activities are conducted on interest banking system according to
council board.
Establishment of participatory banking instead of banking in debtor creditor
relationship.
Investment is made though deterrent modes permitted under council board.
Investment income of the bank shared with depositors according to a ratio to
endure a reasonable fair rate of return on their depositors.
It aims are to introduce a welfare oriented banking system and also to
establish equity and justice in the field of all economic activities.
It extends economic and financial services to the poor , helpless and height
income group of the people for their economic up liftman particularly in the
rural areas.
It plays a vital role in human resource development and employment
generation particularly for the unemployed youths.
Its aim is to achieve balanced growth and equitable development of the
country through diversified investment operations particularly in the priority
sector and in the less developed.
It extends cooperation to the poor the helpless and the height income group
for their economic development.
2.5 Functions of UBL
The operation of Uttara Bank Limited. Can be divided into three major categories:
2.5.1 General banking : it includes:-
a) Mobilization of deposits.
b) Receipts and payment of cash.
c) Handling transfer transaction
d) Operations of clearing house
e) Maintenance of accounts with Bangladesh band and other bank
f) Collection of cheque and bill
g) Issue and payment of Demand Draft, telegraphic transfers and payment
order
h) Executing customers standing instructions
i) Maintenance of safe deposit lockers
j) Maintenance of internal accounts of the bank
While doing all the above noted work UBL issue cheques-book, Deposit account opening
form, SS card, Ledgers, Cash book. Deposit account ledgers, preparation statement of
accounts. Pass Book, Balance of different accounts and calculated profits
UBL offers to open the following account to the depositors:
Current Account
Saving Account
Term Deposit account. (3 month/6month /12 month /36month / 60 month)
Cash Credit Account
2.5.2 Foreign Exchange Business
Foreign Exchange Business plays a vital role in providing substantial revenue on the
bank income pool.
Opening letter of credit against commission for importing industrial
agricultural and other permissible items under council board.
Opening letter of credit on the principle of sale, on the principle of under
wage earner scheme.
Handling of export /import document.
Negotiation of export and import document when discrepancy occurs.
Financing import under import board.
Financing to export on profit or loss sharing
Handling inward and outward remittance.
2.5.3 Other activities
The UBL performs the following task for the welfare of the nation. There are
some point which is below:-
Income generating scheme for the unemployed youth of the nation.
Monorom sale center for marketing homemade garment, handicraft and
other items.
Education scheme for assisting poor scholar student to case and help
them to continue their study.
Health scheme for fulfillment of health needs of rural people.
Uttara University was established to extend service to the student.
UTTARA BANK LIMITED
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 DECEMBER 2008
Table: 01
2008 2007
Notes Taka Taka
OPERATING INCOME
Interest Income 18.1 4,084,288,089 4,084,288,089
Interest paid on deposits,
borrowings etc
19 2,200,521,205 1,876,351,450
Net Interest Income 1,883,766,884 1,121,081,427
Income from Investment. 20 784,896,516 921,189,131
Commission, Exchange and
Brokerage
21 907,895,386 744,994,717
Other Operating Income 22 431,106,660 356,650,099
Total operating income 4,007,665,446 3,143,915,37
4
OPERATING EXPENSES
Salary and allowances 1,272,357,540 1,158,073,662
Rent, taxes,insurance,electricity
etc
151,877,811
188,502,215
Legal expenses 9,429,329 48,215,055
Postage,stamp,telecommunication
etc.
39,680,054
48,215,055
Stationery,printing,advertisements
etc
51,324,787
40,275,975
Managing Director's salary &
allowances and fees
6,424,333
5,060,000
Directors' fees and expenses 29 2,264,000 1,916,000
Auditors' fees 250,000 130,000
Repair, maintenance and 30 107,256,133 85,308,986
depreciation
of Bank's property
Other expenses 31 166,472,931 138,653,184
Total operating expenses 1,807,336,918 1,677,679,817
Operating profit 2,200,328,528 1,466,235,557
Add: Profit on sale of fixed asset 32 105,289,644 -
Profit before provision 2,305,618,172 1,466,235,557
Provision 207,500,000 322,500,000
Provision for loans & advances 33 92,550,000 255,800,000
Provision for off balance sheet
exposures
34 57,450,000
44,200,000
Provision for outstanding
unrecognized entries
35 55,000,000
-
Transfer to gratuity fund - 20,000,000
Transfer to benevolent fund 2,500,000 2,500,000
Profit before tax 2,098,118,172 1,143,735,557
Provision for Tax 959,600,000 734,200,000
Current tax 940,000,000 727,000,000
Deferred tax 19,600,000 7,200,000
Profit after tax
1,138,518,172 409,535,55
7
Retained surplus brought forward 3,196,722 22,990,765
Profit available for appropriation 1,141,714,894 432,526,322
Appropriations 1,140,000,000 429,329,600
Statutory reserve 1,000,000,000 30,000,000
General reserve 140,000,000 -
Issue of bonus share - 399,329,600
Retained earnings 1,714,894 3,196,722
Earning per share (EPS) 40 142.55 51.28
The profit and losses are chart collect by the internet of the Uttara Bank Ltd.
CHAPTURE THREE
Literature Review
3.1 What is Bank?
The word “Bank” bas been originated from an Italian word “BANCO” expressing
the meaning. “A tall bench”
A Financial institution which buys money at lower price and sells money at higher
price is called bank.
In the crude language spread means the difference between the deposit rate and
lending rate i.e spread =lending rate-Deposit rate.
Islamic Bank:
Financial institutions whose statute rules regulation and procedures expressing state
its commitment to the Islamic shariah and to the banning of receipts and payments of
interest in any of its activities is called Islamic bank.
3.2 Objective of a Bank.
To facilitate the transferring of fund from the surplus unit to deficit unit
To accelerate the savings
To accelerate the investment
To enhance the economies development
To facilitate the trades and commerce’s
Bangladesh Bank is the Central bank of Bangladesh. It is the monetary authority of the
country. It came into existence under the Bangladesh Bank Order 1972 (Presidential
Order No. 127 of 1972) which took effect on 16 December 1971. Through this order, the
entire operation of the former State Bank of Pakistan in the eastern wing was transferred
to Bangladesh Bank.
Bangladesh Bank has 9 branch offices, two in Dhaka city (sadarghat and Motijheel), and
one each in Chittagong, Khulna, Rajshahi, Sylhet, Bogra, Rangpur and Barisal. The head
office discharges its duties with 28 departments.
History of Bangladesh Bank
After the liberation war, and the eventual independence of Bangladesh, the Government
of Bangladesh reorganized the Dhaka branch of the State Bank of Pakistan as the central
bank of the country, and named it Bangladesh Bank. This reorganization was done
pursuant to Bangladesh Bank Order, 1972, and the Bangladesh Bank came into existence
with retrospective effect from 16 December 1971.
Objectives of Bangladesh Bank
As the central Bank of Bangladesh, the broad objectives of the Bank are :
a) To regulate currency issuance and to keep foreign exchange reserves.
b) To manage the monetary and credit system of Bangladesh with a view to stabilizing
domestic monetary value.
c) To preserve the par value of the Bangladeshi Taka.
d) To promote and maintain a high level of production, employment and real income in
Bangladesh; and to foster growth and development of the country's productive resources.
e) To Reserve all the rights of the bank
Functions of Bangladesh Bank as Central Bank
Bangladesh Bank performs all the functions that a central bank of any country is expected
to perform, and such functions include maintaining the price stability through economic
and monetary policy measures, managing the country’s foreign exchange and the gold
reserve and regulating the banking sector of the country. Like all other central banks
across the globe, Bangladesh Bank is both the Government’s banker and the banker’s
bank, a “Lender of the Last Resort”. Bangladesh Bank, like most of the central banks of
different countries, exercises monopoly over the issue of currency and the banknotes.
Except for the 1 and 2 taka notes, it issues all other denominations of Bangladeshi Taka.
Bangladesh Bank has been entrusted with all the traditional central banking functions
including the sole responsibilities of issuing currency, keeping the reserves, formulating
and managing the monetary policy and regulating the credit system of Bangladesh with a
view to stabilizing domestic and external monetary value and promoting and maintaining
a high level of production, employment and real income in the country. The bank acts as
the banker to the government and accepts government deposits, cheques and drafts, and
undertakes collection of cheques and drafts drawn on other banks. The government
deposits all its cash balances with the Bangladesh Bank free of interest. The bank
transfers government funds from one place to another as requested by the government
and its agencies.
Bangladesh Bank is empowered to act as the watchdog of the country's banking system,
and all scheduled banks are accountable to Bangladesh Bank, which has extensive
powers to ensure soundness of the banking system. No bank can commence banking
business in Bangladesh and no existing bank can open a new branch in or outside the
country or shift any branch from one place to another without obtaining a
license/permission from the Bangladesh Bank.
Organization
The highest official in the bank is the Governor (currently Dr. Atiur Rahman). The
Governor chairs the Board of Director. The Executive Staff, also headed by the
Governor, are responsible for the day to day affairs.
Foreign Relations
Bangladesh Bank has correspondent relationships with one international and 8 foreign
central banks viz., the Federal Reserve Bank of New York, Bank of Canada, Bank of
England, Banque de France, Deutsche Bundesbank, Bank of Japan, Sveriges Riksbank of
Stockholm, Reserve Bank of India and the Bank for International Settlements, Basle.
Besides, Bangladesh Bank has now invested its foreign exchange reserves with 14 banks
at different international financial centers
CHAPTER FOUR
Analysis and FindingsGeneral Banking Department
General Banking Department is considered as the direct service center. The clients and
customer build their impression whether they are going for further dealings with the bank
or not on the basis of the service in the department, Moreover this department is the one
that gives the first impression about the bank to the clients. So, general department should
be taken carefully.
4.1 Function of General Banking
The functions of general banking are as follows:
Establishing of banker-customer relationship of account opening.
Remitting customer’s money from one place to another.
Collecting bills for customers.
Taking deposits and honoring cheques drawn over local office.
Clearing taking function.
Different Parts of General Banking:
General Banking Department constitutes of the following sections:
Account Opening Section
Cash and Computer Section
Remittance Section
Clearing Section
The functions of the different department are discussed below:
4.1.1 Account Opening:
Banking business is very much correlated with banker customer relationship. To be a
customer one person must have some sort of banking relationship with the bank. Account
opening section establishes that relationship by opening a new account for the customer.
Uttara Bank Limited. Allows its clients to open the following types of accounts and
receives deposits in those accounts. There are three months current accounts opening
seventy only. Every account is needed TK. One thousand only. Saving account this three
month are opening one hundred eighty. The fixed account is not opening by the UBL.
This three months are not opened UBL.
Types of Accounts:
1. Current Deposit
2. Savings Bank Deposit
3. Fixed Deposit
4. Short Term Deposit
Key Features of opening an account in UBL:
1. Current deposit account: Current deposit accounts should be opened with a
minimum amount of TK. 1000/= But under special circumstances in may be
opened with TK. 500/=. It is payable on demand, No interest is paid in these types
of accounts.
2. Savings Bank Deposit Account. Minimum amount of TK.1000/= is required for
opening this type of account, the account may not be retained it the balance falls
below TK.200/= Not more than one account should be opened in one name. A
depositor is allowed to withdraw per week up to 25% of the balance of his or her
account. For calculation of interest the minimum balance at the credit of an
account by the close of 8th the month should be taken into consideration.
Fixed Deposit Account: Fixed deposit accounts are opened for a diced period, varying
from three months to three years or above and are payable at a fixed date of maturity,
interest on this deposit is paid at the rate fixed by Head office of the from time to time
depending on the period of maturity. Interest is payable only at the maturity of the
deposit.
The following table shows different FDR rates:
Years 2001 t0 2007
Table: 01
Periods FDR Rate
From 3 months up to 6 months 9.5%
From 6 months up to 1 year 10%
From 1 year up to 2 year 10.5%
From 2 year up to 3 year 11.5%
The data collect by the Annual Report.
The following table shows different FDR rates:
Years 2008 & 2009
Table: 02
Periods FDR Rate
Saving Account 4.75%
Short-Term Account 3.5 %
From 3 months up to 6 months 7.75%
From 6 months up to 1 year 8%
From 1 year up to 2 year 8.25%
From 2 year up to 3 year 8.50%
The date collects by the Bank Chart of UBL.
4. Short Term Deposit Account: The deposits held in these accounts should be payable
on short time, lice in 7 days or in 30 days. The deposits may be accepted for a certain
period and Head Office fixes the rate of interest from time to time. The STD interest rate
in UBL is 5.5%
Nature of Accounts
UBL may open following types of accounts:
1. Individual Accounts
2. Joint Accounts
3. Proprietorship Firm Accounts
4. Partnership Concerns Accounts
5. Private Limited Companies Accounts
6. Public Limited Companies Accounts
7. Accounts of Societies, Clubs, Association etc
8. Trust Accounts
9. Accounts of Local Authorities
General procedure of opening accounts
Current Deposit Account
The account opening form of current deposit account and specimen signature card
is supplied to the customers, which is filled and signed by them.
In case of individual account, an account holder signs the AOF and SSC in his /
her individual capacity both under yours faithfully and specimen Signature. In
case of partnership firms & proprietary concerns, it is to be signed by the
persons / partners in their individual capacity under Yours Faithfully and in their
official capacity under Specimen Signature. in other cases private and public
limited company both signatures must be in official capacity.
ACD account holder of the bank shall introduce the new account holder. An Elite
of the locality, who is well known to the banker can introduce it, official other
than the staff of UBL can also introduce it.
Clear instructions with regard to operations are noted in the AOF and SSC
Specially in case of death or inability of any kind in regard of the joint account
holder.
The officer in charge of the Deposit Department verifies the signature of the
introducer. The stamp signature verified is affixed near the signature of the
introducer and the deposit officer signs over it.
Approval of the branch in charge in obtained on the Account Opening Form.
The signature of the account holder is admitted by the in charge of deposit
department and signature Admitted stamp is affixed near the specimen signature
of the account holder.
Particulars of the account opening form are entered in the account opened &
closed register in a serial order.
The account number allotted to the new account in given on the AOF, SSC and on
Cheque book requisition slip.
The customer is supplied with a pay in Slip Book and requested to deposit the
money with cash officer.
Cheque is only issued after the account opening form has been completed is all
respects and initial cash deposit has been made. The cheque book series is noted
in the cheque requisition slip.
Particulars of the account opening form are entered in the Reference Book under
alphabetical order.
Accounting opening forms are posted in a file in serial order, on the other hand,
the specimen signature cards are placed in the Specimen signature card Box in
numerical order.
Lastly, while issuing new cheque book signature on the cheque book requisition
forms should be properly verified.
Saving Bank Deposit Account
The procedures of opening current deposit accounts are also applicable for opening
the savings bank deposit accounts. There are only the following exceptions.
o Use of separate Account opened & closed Register also reference book and
posting files are different here.
o Pay –in-Slip Book
Fixed Deposit Account:
Account opening form and specimen signature card should be given to the
customer.
Voucher no. SF-12, crediting “Fixed Deposit Account” with the amount of
deposit with full narration should be prepared and should be given to the deposit
cash with the cash officer after recording the particulars. In case of payment by
cheque, it should be attached with the credit voucher and sent to the deposit
department for posting.
On receipt of the vouchers from the cash department, a fixed deposit receipt
should be prepared and recorded.
To admit the signature of the account holder the stamp “Signature Admitted”
should be affixed near the specimen signature card.
The AOF, SSC, the voucher and the recording ledger should be sent to the officer
in charge for signature.
Then the documents should be sent to the manager official for his/her signature on
those.
The branch manager should ensure that the printer number on the deposit receipt
books in use are invariable noted.
At the closing of each business day, the officer in charge should verify the total
amount for which the deposit receipt has been used during the day, both from the
credit vouchers and the counter foils of the various deposit receipts.
Documentation
Current Deposit Account
The following documents duly completed should be obtained from the customer at
the time of opening a current deposit account of:
1. Individual/Joint
2. Partnership Firms
3. Proprietorship counters
4. Societies, Clubs, Associations
The documents are:
√ Account opening form
√ Specimen signature card Mandate for opening an individual account is obtained
where a customer wants to authorize another person to operate the account
√ Certified true copies of by laws in case of societies, clubs, associations and limited
companies etc.
√ Certified copies of resolution authorizing and operating of account with the bank
passed by the Executive committee of the society, club or association and limited
companies etc.
√ List the numbers of the executive committee, list of directors.
Partnership firms
For limited companies, corporation, autonomous bodies the following documents should
be collected.
Account opening form
Specimen signature card
Memorandum and Articles of Association
Resolution of the Board of Director authorizing opening the account with the
bank.
Certificate of Incorporation
Certificate of Commencement of Business
List of Directors
Act / Ordinance etc. in case of corporations/ Autonomous Bodies
Savings Bank Account
Account opening form
Specimen signature card
Mandate should be obtained in case the customer wants to authorize
another person to operate the account
Fixed Deposit Account
Account opening form
Specimen signature card
Short Term Deposit Account
Form, which is used for CD account, can also be used for opening this type of account.
Notice period should be noted in the special instruction column.
Transfer of Account to other Branch
An account holder can request to transfer hid/ her account by gibing the following
instructions:
1) Reasons for transferring the account
2) Address at which he /she is to contacted by the transferee branch
3) The unutilized check book must be returned to the transferring branch before
transferee branch before transfer of account.
At first, the approval should be verified by the manager to transfer the account. Then the
specimen of the for working letter of transferee branch should be sent. After the
application is received duly approved from the manager, the branch transfers the account.
Closing of an Account
To close an account, one may be requested to send an application along with the unused
pages of the check book that is issued to the person. After receiving the application, the
signature of the account holder should be verified and the number of unused pages of the
check book should be noted. Before the account is closed the manager will approve the
application. Lastly closing charge should be debited to the account.
Cheque
A cheque is a very important document. Cheque is an instrument in printed form
containing an unconditional order. Signed by the account holder directing a certain
person to pay certain amount of money only to or to the order of a certain person or to by
barer of the instrument, a cheque is always supposed to be drawn against the funds in the
person’s account in the bank.
Issue of a Cheque Book
At the time of opening an account, a person is required to sign a “Cheque Book
Requisition Slip”. If the account opening form is found complete in all respects, a cheque
book is issued to client, the account number is written in cash leaf of the cheque book and
in it requisition slip. The name and account number of the client is also entered in the
Departmental cheque books issued register against the particular cheque book series and
it is also recorded in the computer. Lastly the requisition slip is preserved as voucher.
4.1.2 Cash section
Cash is one of the most important sections of general banking department because it deals
cash.
Function
Receiving cash
Paying Cash
Issuing Vouchers
Keeping record
4.1.3 There are some frequent situations, such as customer of a bank needs to transfer his
her fund or money to some where within the country boundary , if is really a risky
thing to carry a big amount of money from on place to another so most of the time
they just purchase an instrument or mean so that their fund can be transferred
thorough his/ her own bank. This sort of activities is cubed under the inland
Remittance. These are
Demand Draft
Telegraphic Transfer
Pay Order
These are discussed below:
Demand Draft
This is an order to pay money, drawn by one branch of a bank upon another branch of the
same bank for a sum of money payable to order on demand.
Procedure of issuing D.D
Against Cash
A client is asked to complete a form. This is treated as an application as well as credit
voucher for head office account. Commission charges are calculated and inserted the
voucher is given to the client to deposit the cash; the cashier receives the cash and
delivers the voucher to the remittance department against initials in his/her book. Draft is
prepared and recorded in the Draft issued register. The amount of the draft is also
protecting graphed. The draft number is written on the voucher, then the officer in charge
checks and signs the draft and the other vouchers. After that a second officer gives his/her
signature in the draft and also in the other vouchers. a credit voucher and head office
advices are sent to the accounts department. Lastly, advices are sent to Dispatch section
for onward transmission to the respective branches.
Against Cheque
The Cheque is sent for passing and collection. After the Cheque is passed, similar
procedures are Explained in case of cash are adopted.
Against letter of instructio
The letter is cent to the deposit section for verification of signatures. The letter is attached
with the debit voucher. After the debit voucher is passed, similar procedures as explained
in case of cash are adopted.
Cancellation of D.D
On receipt of application along with the demand draft for its cancellation the signature of
the applicant is verified from of original application form. The genuineness of the D.D is
also examined. Before the drags is cancelled it is ascertained they no duplicate draft has
been issued and the drawee branch has not paid the same earlier, the draft is cancelled by
tearing out the signature there on and a note on this effect in red ink is made in the
original application form. Lastly, the cancelled draft is attached with the debit voucher.
Payment of D.D
On receipt of advice from drawing branches the particulars are checked and initialed by
the in-charge.
Payment in cash
First a token is issued. The dates, amount in words and figures, branch drawn upon and
signatures on the drafts are checked. A stamp is affixed on the face of the draft.
Particulars are recorded. The draft is sent towards the officer in-charge for cancellation,
after cancellation its dent back for payment. In case of any irregularity in the draft an
advice letter is sent to obtain the confirmation of the branch.
Payment in clearing
Collecting bank’s crossing, stamp and discharge are checked. Other procedures are
similar with the payment is cash.
Telegraphic Transfer
In telegraphic transfer the issuing branch sends a telegraphic message of the branch at the
other end to pay a certain amount of money to named payee’s account maintained with
the drawee branch.
Issue of a Telegraphic Transfer
Against cash
The client is asked to complete form which is also treated as credit voucher for head
office account branch concerned. A credit voucher is prepared for telegrams charges. Test
of telegram is prepared and handed over to the in charge. The test is then checked, coded
and tested by the in-charge. The message is typed on form in duplicate, the test in then
signed by the in-charge and also by the manager. Original telegram and the confirmation
are sent to the dispatch section.
Against Cheque
Commission charges are calculated and inserted. Client is advice to draw cheques,
favoring the branch and deposit the same to the receiving cashier. Cashier then receives
cheque and cent it to the officer in charge for passing and cancellation, the client is asked
to fill up the application form, particulars are recorded, ATT number is written in the
voucher and the voucher is then signed by the officer in charge. After that similar
procedure is followed like the TT against cash.
Against letter of instruction
At first, the letter is sent to deposit department for verification of signature. After that the
procedures are same as in the TT against cash.
Payment of T.T
Telegram is detected and test verified by the in charge and the manager. If the test does
not match a telegram is sent to the concerned branch asking them to repeat the message
with correct test. If the test marches, a stamp is fixed on the telegram and signed by the
officer.
Advice to payee
When TT advice is received by the paying branch from the issuing branch, the advice is
recorded. Then the officer in charge signs it, after the sign of the in charge, the manager
signs it. Lastly, the receipt is sent of the payee.
Payment Order
Pay order is an instrument, which is issued from a certain branch of a bank and must be
encased from the same branch. It is like the cash but not exactly cash, one, who is
maintaining the account with UBL, can purchase a pay order. it is used for remittance
purpose within the clearing area covered by the branch.
Issuing Procedure
Against Cash
At first, the client is asked to complete a form. This is treated as credit voucher.
Commission is charge and a voucher is prepared crediting Income Account Commission.
After receiving the voucher from the cash section duly signed by the in charge, the pay
order slip is prepared according to the voucher. The number of the officer in-charge
checks it and signs. After his/her sign another sign is taken form an officer as second
signature.
Against Cheque
The cheque is passed. After that the procedures are same the PO against cash.
Against Letter of Instruction
The letter is sent to the deposit section for verification of signatures. Other procedures are
same as the P. O against cash.
Payment of Pay Order
When a client submits a PO for payment, at first it is authenticated by comparing its
particular with the records. If it matches then a seal is given. After that the records and
the PO is given to the officer to verify it. If the officer finds that its OK then he/she signs
it and it to the cash section for payment.
4.2.3 Clearing
When a customer of UBL presents an instrument drawn on other bank for collection, the
instrument is collected through clearing house of Bangladesh Bank. Every day two
houses are arranged in Bangladesh Bank. One in the evening and another in the morning.
The evening house is known as return house. Everyday the instruments that are drawn go
to the officer of the clearing section. He enters bank name, branch name, number and the
amount through a software named “Nikash22” in the main schedule of banks. Then the
officer makes a copy of it and goes to the clearing house of Bangladesh Bank.
Bangladesh Bank official take the copy. Then they set off the claims of UBL on other
banks.
4.3 Loan Section & Credit Section
In case of loan, the banker advances a lump sum for a certain period at an agrees rate of
interest. The interest is charged for the amount the client withdraws from his/her account.
The banker considers the following 5C’s before sanctioning the loan.
Character: The most valuable asset of a person which is based on the integrity
and reliability of the borrower.
Capacity: This indicates the borrower’s ability to employ the funds profitability
and repay the advance.
Capital: It refers to the borrower’s own funds invested in the business.
Collateral: It indicates the security offered by the borrower.
Condition: It refers to external factors that are current business situation of the
country.
Functions of loan Department
The functions of loan department are as follows:
Ensuring that funds are disbursed only after compliance with terms and conditions
or required documents received.
Make sure that the bank has always valid and current loan documentation.
Ensuring that the collateral security is adequate at times to support the loans.
Keeping the loan documentation under safe custody.
Monitoring the receipt of periodical receivables.
Debiting the client for all charges, interests etc.
Marinating the central liability records for all extensions of credit and balancing
the totals with General Ledger.
Advance (Overdraft)
Secured overdrafts, Temporary overdraft, Cash Credit (Hypothecation), Cash Credit
(Pledge) are covered in this type of advance. Overdraft is an arrangement between a
banker and his client by which the later one is allowed to withdraw over and above his
credit balance in the CD account up to an agreed limit, a cash credit differs from
overdraft in the respect that CC is used for long term and overdraft is used for short term.
Temporary Overdraft (TOD)
Bank sometimes grant unsecured overdraft for small amounts to clients having CD
account with the bank. TOD is permitted only when reliable sources of funds are
available to the borrower for repayment. It is usually provided against DD, cheque etc.
which have been presented for collection but not yet collected. Though these documents
are not lined but these are kept in the respective departments for collection. When these
are collected, the advances are realized from the proceeds of these instruments.
Secured Overdraft (SOD)
Banks permit overdraft against securities like FDR, DPS, savings certificate, word order
etc, Currently, UBL issues SOD only against financial obligations. They are:
Share Certificate
FDR
ICB Unit Certificate
Savings Certificate
Wage Earners Development Bond (WEBD)
Defense Certificate
Cash Credit (Hypothecation)
The mortgage of movable property for securing loan is called hypothecation.
Hypothecation is a legal transaction whereby goods are made available to the lending
banker as security for a debt without transferring either the property in the goods or either
possession. The banker has only equitable charge on stocks, which practically means
nothing. Since the goods always remain in the physical possession of the borrower, there
is much risk to the bank. So it is granted to parties of undoubted means with the highest
integrity.
Cash Credit (Pledge)
Pledge is the bailment of goods as security for payment of a debt or performance of a
promise. In a contract of pledge, bailer must deliver the goods pledged to the bailer cither
actually or constructively. Transfer of possession is the judicial sense, is essential in the
valid pledge. In case of pledge goods the bank acquire the possession of the goods or a
right to hold goods until the repayment for credit with a special right to sell after due
notice to the borrower in the event of non-repayment.
Advance department of Moghbazar branch deals with the following types of loans.
1) Personal Credit Scheme
2) Transport Loans
3) Loan (General)
4) House Building Loan
5) House Building Loan
6) Staff Car Loan
Required Information for Loan Sanction
Prior to loan sanction, investigation should be made about the person’s business, trade
experience, dealings, assets and liabilities etc. this information should be taken from
various sources. His/her account statement with others banks should also be included is
this investigation, financial statements and income tax returns should be checked. Lastly,
personal interview should be taken.
So, before sanctioning a loan a banker should consider the following points:
Loan Application
Trade License, Partnership Deed, Memorandum of Association.
Market Report
Study of Accounts
Financial Statement
Personal Interview
Other Bank’s confidential opinion
CIB report of Bangladesh Bank
For sending proposals to the Head office the following documents are required:
Loan application
Photograph of the borrower
Declaration of the borrower
Credit report on the borrower, which should be prepared by the branch
Limit sanction advice
Statement of stock
Documents—memorandum of deposit of title deed.
- Mutation Certificate
- Up to date pay receipt
- Legal opinion
- Valuation certificate of the property
Different types of loans are discussed below
Personal Credit Scheme
It is a personnel facility provided to the stalls of the Moghbazar branch. These loans are
provided for buying necessary householder items. At first a staff applies for loan in a
prescribed form. He / she affix the statement of his /her savings the statement of his/her
savings account and quotation of the good from three sellers of that good. After receiving
the application the authorized officer verify it. He / she prepared a credit proposal and
sends it to the Credit Division of Head Office. The credit division appraises the proposal
on the basis of the balances in the account, the designation of the employee. If credit
division id satisfied it fixes the margin, amount of loan, mode of payment, rate of interest
and instruct for obtaining other necessary documents from the staff. Credit division
prepares a sanction letter mentioning all those information, after getting the letter the
advance department informs the staff about that. A pay order is prepared in favor of the
seller with the amount of loan and margin provided by the staff. The staff handover the
pay order to the seller and gets his/her goods. The goods are hypothetic to the bank.
Loans against Transport
These types of loan are usually provided to the client who wants to start transport
business, or need a transport for carrying goods. The client brings quotation from three
sellers of the vehicle. License of the vehicle is made in joint name of the banker and the
client. Payment is made directly to the seller through a pay order. At the payment of the
loan the client becomes the only owner of the vehicle.
Loan
The purpose of this type of loan is not specific. It can be sanctioned against any kind of
security. Securities can be BSB, PSP.Share certificate, WEDB, FDR etc. Here the money
is directly transferred to the clients account.
Staff Car Loan
This is a personal facility provided to the higher officials of the bank. Officials of the post
of A.G.M. and above can get this loan, the car is licensed in the name of the bank and
staff jointly. The bank makes payment of the installment of the loan from its own fund.
When the loan is fully recovered, the staff becomes the owner of the car.
House Building Loan
This type of loan is provided to the staff for building their own house; the staff must have
a land to make the house. The land and the building is mortgaged to the bank. The loan is
realized from the monthly salary of the staff. At the dime of sanctioning the loan the
monthly salary of the staff, his/her designation, balance of his/her account etc are taken
into account.
This type of loan is provided to the clients of the bank to build house. Registered
mortgage of the land and building is taken from the client.
4.4 SWOT Analysis of UBL
SWOT analysis provides an opinion and adjustment whether organizations currently
position is satisfactory or not.
4.4.1 Strengths
All the level of the management is solely directed to maintain a culture for the
betterment of the quality of the service.
The bank has earned customer loyalty as organizational loyalty.
Skilled personals have developed professional relationships with their customers
and clients, which is an emotional tie on regular business.
UBL is always trying to add new and modern equipments.
Employees are sharing good atmosphere in UBL so that it gave them reason to
work efficiently and to become dedicated in banking.
UBL maintain corresponding relationship with many foreign banks so that it is an
effective measure for the smooth business.
The top management officials all have had reputed of banking experience, skill
and proficiency.
4.4.2. Weaknesses
The advertising and promotional activities of this bank are up to the mark.
Reference appointment is very much effective in UBL. As a result of this there
are many who are only drawing salaries at the end of the month but making a
minimum contribution towards the organization.
There are some officers who work hard but are not appreciated by the authority.
AIBL has not set up proper network system among branches.
A remarkable portion of the total human resources is inefficient.
The bank does not have any research and development division.
4.4.3. Opportunities
The bank can introduce more innovative and modern customer service to better
survive in the competition.
They can also offer micro credit business for individual and small business.
It is high time that they should move toward the online banking operation;
because some banks are already introduce the online banking operation.
Bank will be able to accommodate knowledgeable. Skilled, experience and hard
working person by offering attractive remunerations and fringe benefits with nice
working environment.
By expending the financial policy with credit facility customer are very much
secure in business environment.
4.4.4. Threats
Central bank (Bangladesh bank) is always supervising the local and foreign banks
in Bangladesh and sometimes it is hampering the normal operation of private
bank.
Through the innovation working is in continuous process, but the other rival
banks are copying it within the short time.
The world in advancing toward technology very fast. Though UBL taken effort to
join the stream, it is not possible to complete the mission due to the poor
technological infrastructure of our country.
The contemporary banks of UBL like National Bank, Dutch Bangla Bank, Prime
Bank are its major rivals.
They are carrying our aggressive campaign to attract lucrative corporate client as
well as big time depositor.
Local competitors can also capture a huge market share by offering similar
products and services provided by the bank.
CHAPTER FIVE
Recommendations and Conclusion
5.1 Recommendations
As per earnest observation some suggestion for the important of the situation are given
below:
To attract more clients UBL has to create a marketing strategy, which will
increase the total exporter-import business.
Effective and efficient initiatives are necessary to recover the default loans.
Attractive incentives package for the exporter will help to increase the exporter
and accordingly if well diminish the balance of payment gap of UBL.
Long-term training very much required for the foreign exchange official.
Places, Firstly it is registered on the supplementary sheet, then it come for
computer posting and lastly it comes to the section in charge for verification of
the signature and for cancellation, after that it goes to the cash payment officer for
final payment, for this system, the client has to frequently enquire that whether
his/her check has been passed for payment or not, also it takes their valuable time,
so. UBL needs to change this system and move on to a better Cheque passing
system.
Due to lack of one stop service, the client of UBL ha to move on from one desk to
another. Now in modern banking system, this type of movement is considered as
one type of harassment.
The bank should launch new products such as auto teller machine, tele bank etc
for betterment of customer services.
Strict supervision must be adopted in case of high-risk borrowers. Time to time
visit the project should be done by the bank officials.
5.2 Conclusion
Banking sector being a service of Bangladesh continues to contribution to a great in
the economy of Bangladesh, Uttara Bank Ltd. Is one of the leading banking services
of the country.
I also think that there is bright future waiting for the Uttara Bank Ltd. Another thing I
have to mention here that the UBL is going through he oath in which they need to go
and as like today it will bring more and welfare oriented activities in the banking
sector in the years to come.
Bibliography
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2. Yearly Report, Uttara Bank Ltd.
3. website: www.uttarabank_bd.com
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