Introduction

 

Banks are the most important functionary of financial system of a country. They play a dynamic role in the allocation of credit to the productive sectors. They divert and employ the funds in such avenues which are aimed to develop a country’s economy and add to national wealth. Banks transfer the funds from resigns where it is available in plenty to where it can be efficiently utilized. Banks offer necessary finance to set up and run the industries and provide finance to agriculture and other sectors which can create opportunities for the development of national resources and provide employment on a large scale. Inefficiencies in the financial market and institutions inhibit the formal financial sector from performing the proper intermediation services, which have adverse effects on the economic development of Bangladesh. Bank in general performs three basic functions valued by the overall economy.

q  One of these functions is the centralization of credit evaluation and monitoring, which produces information that cannot be easily made public by the borrower. This centralization exploits cost economies and, together with diversified loan portfolio, lowers the price of credit.

q  Second, Banks offer transformation services that convert claims issued by borrowers into instruments that in investors are willing to hold. These claims may be transformed with respect to their maturity, liquidity and credit risk. This special role of banks derives from the social welfare enhancements that can be realized when banks co-ordinate the funding of these illiquid assets with liquid liabilities.

q  Third, banks provide access to payments system and to a clearinghouse for transactions. Public policies to attain safe and sound banking have traditionally been focused on methods to assure the continuous and efficient functioning of their transactions and payments mechanism.

For efficient operation in the banking sector skilled and talented personnel are also needed. On this point of view, this report is prepared to gather adequate knowledge about the operating procedure of the commercial banks of Bangladesh. In this regard the experiences and knowledge gathered during the period of practical orientation and working as an internee in the National Bank Ltd. Shadarghat Branch was manipulated.

Background of the study:

Banking sector in Bangladesh has been flourished during last few decades. It results due to the adoption of privatization policy. Until, Government sector owned, controlled and operated financial sector of Bangladesh with the objective of allocating funds to priority sectors. Loan recovery was not emphasized because the loans were ultimately collectible. the quality of financial intermediation, judged by loan recovery rates, was dismal. But it is a matter of fact that the financial system was not efficient and failed to attain its objective. Then government decides to reform the financial sector and commercial banks now a day have proved themselves as the life blood of modern economy in Bangladesh. No business, trade, exports, imports. Production, all other economic activities can run without the aid of banking. So understanding the above circumstances, I being a business undergraduate student, become interested in the banking sector. Since internship program is the integral part of the MBA program, completed my internship program in one of the commercial bank named National Bank Limited. I was placed in the NBL, Shadarghat Branch and conducted practical training of banking activities for three months from 26, December 2006 to 27, March 2007. It was the requirement of MBA program to perform a study about the internship. This report is the outcome of the study.

Objective of the Report

 

The objective of the internship program is to familiarize myself with the real market situation, to compare them with the business’ theories & at the last stage make a report on the task. The main objective of this report is to review the General Banking Activities of National Bank Ltd. I tried my best to know how the Bank is providing facilities to its clients & to suggest remedial measure for the development of overall banking activities if required. In addition, the study seeks to achieve the following objectives:

♣          To review the present position of National Bank Ltd.

♣          To find out some problems which are faced by National Bank Ltd in customer                recovery.

♣          To determine the qualitative change of customer recovery position.

♣          To determine the sectors that is responsible for increasing the better service.

♣          To familiarize with practical Job Environment.

♣          To have an exposure on the financial institution, especially on banking environment of Bangladesh.

♣          To relate the theories of banking with the practical banking activities.

♣          To present an overview of National Bank Ltd.

♣          To appraise the Trade Service performance of National Bank Ltd.

♣          To identify the problems facing by National Bank Ltd.

♣          To suggest remedial measure for the development of National Bank Ltd.

Methodology of the Study

Study Design

The report was fully investigative in nature. Data have been collected from two sources:

1. Primary sources.

2. Secondary sources.

Data Collection

 

This study is mainly based on secondary data available from the various divisions and departments of National Bank Ltd, in addition to these other necessary information have been collected from the daily news papers, relevant journals, annual reports of National Bank Ltd, Bangladesh bank, Ministry of Finance and Planning and publications of other relevant institutions have also been taken into consideration.

Primary sources of data:

♣ Face to face conversation with the bank officers & staffs

♣ Direct conversation with client.

♣ Different manuals of National Bank Limited

♣ Different circulars of National Bank Limited

Secondary sources of data:

♣          Annual report of National Bank Ltd, 2005

♣          Different papers of National Bank Limited

♣          Unpublished data

♣          Different textbooks

Scope of the Study:

 

This report has been prepared through extensive discussion with bank employees and with the clients. While preparing this report, I had a great opportunity to have in depth knowledge of all the banking activities practiced by the National Bank limited.

Limitations of the Study:

 

The present study was not out of limitations. But as an intern it was a great opportunity for me to know the banking activities of Bangladesh especially National Bank Ltd. Some restraints are disclosed bellow:

♣          The main constraint of the study is insufficiency of information, which was required for the study. There are various information the bank employee can’t provide due to security and other corporate obligations.

♣          Due to time limitations many of the aspects could not be discussed in the present report.

♣          Every organization has their own secrecy that is not revealed to others. While collecting data through interviewing the

employees, they did not disclose much information for the sake of the confidentiality of the organization.

♣          since the bank personals were very busy, they could provide me very little time.

♣          Another significant problem faced during the preparation of this report was the contradictory explanation of a single subject by different employee.

♣          The clients were very busy to provide me much time for interview.

♣          I carried out such a study for the first time, so in experience is one of the main constraints of the study.

Literature review of General Banking Activities

 General Banking:

General banking is the heart of all business banking activities. General banking department performs the core function of bank, operates the day-to-day transactions. It is the storage point of all kinds of transaction of foreign exchange department, loans and advance department and itself.

 

 Functions of General Banking:

The functions of general banking department are as follows:

1. Maintenance of Deposit A/Cs/ Saving accounts/ Current accounts/cash credit deposits/Fixed deposits/short term deposits/margin deposits/Bond deposits/F.C. Bond deposits.
2. Receipts & payment of cash.
3. Handling transfer transactions.
4. Operations of clearing house.
5. Maintenance of accounts with Bangladesh Bank & other banks.
6. Collection of Cheques & Bills.

1. Issue and payment of Demand Drafts, Telegraphic Transfers and payment       Orders.
2. Executing customers standing Instructions.

9. Maintenance of safe Deposit Lockers.
10. Maintenance of Internal Accounts of the banks.
11. Reporting to head office about daily position.
12. Saving all transaction record in computer.
13. Closing and transfer of different types of accounts.
14.  Keeping good relation with valued customer.
15.  Providing necessary support to the customers.

 

 Sections of General Banking:

• Account opening section
• Remittance section
• Bills and clearing section
• Cash section
• Mail receive and dispatch section

 

Account Opening Section:

One of the vital sections under general Banking is the account opening section. Banker customer relationship begins through this section. Various tasks are performed in this section. Such as:

•  Opening of different types of account.
•  Issue of checkbook.
•  Transfer and closing of account.
•  Enquiry of account.

Fixed Deposit Account

They are also known as time liabilities or term deposits. These are deposits, which are made with the bank for a fixed period specified in advance. The bank need not maintain cash reserves against these deposits and, therefore, the bank offers higher rates of interest on such deposits. These deposits generally constitute more than half of the deposits with the banks.

Opening and operation of fixed deposit account. The depositor has to fill in an application form wherein he mentions the amount of deposit, the period for which deposit is to be made and the name/names in which the fixed deposit receipt is to be issued. In case of a deposit in joint names, the banker also takes the instructions regarding payment of money on maturity of the deposit, i.e., whether payable jointly or payable to either or survivor, etc. The banker also takes the specimen signatures of the depositors). A Fixed Deposit Receipt is then issued to the depositor acknowledging receipt of the sum of money mentioned therein. It also contains the rate of interest and the date on which the deposit will fall due for payment.

Payment of Interest: It is usually paid on maturity of the fixed deposit. But the bank may pay interest to depositor every three or six months or credit the money of interest to his savings or current account, at his request These days banks have started a novel scheme of ‘reinvestment plans’, whereby the customer gets the benefit of compound interest The interest to his fixed deposit account every quarter earns further interest in the subsequent period and the total amount with interest is paid to him on the maturity of the deposit

Advance against fixed deposits. In case an advance is granted against a deposit under reinvestment scheme, accrued interest should also be taken into account for determining the amount of advance.

At the time of getting a loan, the deposit, receipt, duly discharged, has to be surrendered to the Bank. The bank notes down its Hen on the deposit receipt. The receipt is returned to the borrower on repayment of the loan and the fact that the bank has jilted its lien over the deposit receipt is noted down on the receipt.

Surrender of deposit receipt before the maturity date. A banker is not bound to accept surrender of the deposit before its maturity date. However, in practice the banker accepts such a request from its customer and makes payment of the amount due under the deposit receipt even before its maturity date.

 

Deposit receipt is not a negotiable instrument A Fixed Deposit Receipt is not a negotiable instrument, the words “Not transferable” are clearly written on it. However, it can be assigned. The assignor should hand over the deposit receipt duly discharged to the assignee with a letter giving up all his claims regarding such deposit. However, the title of the assignee will not be better than that of the assignor.

Deposits in joint names: A bank frequently in joint names receives deposits. In the absence of any other agreement the bank will not be discharged by payment to any of the joint depositors- The payment should be made to all joint depositors or surviving depositors together with the legal representative of those deceased. In case joint deposit account is to be operated by “either or survivor”, the bank will be discharged by payment to any of the joint account holders on maturity of the deposit or to the survivor in the event of death of any of the joint depositors. However, no variation or ‘revocation of instructions in a joint account can be made without the consent of the other joint account holders in any case. For example, where a loan is to be obtained on a fixed deposit receipt or a fixed deposit receipt is to be encased before the expiry of its term, one of the joint account holders cannot get it done so without the authority of the other depositors even when the account is to be operated by ”either or survivor”,

Cheques against fixed deposits No cheque can be drawn against a fixed deposit in absence of any agreement. The position holds good even in cases where deposit has matured unless the customer makes such arrangement or gives instruction to the bank to transfer the amount to his savings or current account.

 

Exemption from stamp: duty A fixed deposit with a bank is exempt from stamp duty provided the person who deposits the money and the person to with in it is later on to be accounted for are the same.

 

Loss of fixed deposit receipt: In the event of a fixed deposit receipt being lost, the payment of the amount due under the receipt or duplicate receipt can be obtained from the bank by filling in an Indemnity Bond. The bank should make a note of this fact in the Fixed Deposit Ledger for future guidance.

 

Change of names: A banker may receive a request from a customer to change the name in the Fixed Deposit Receipt or making an addition thereto or deleting a name therein. The banker has to be very careful in this respect and should comply with the customer’s request only after examining the legal position in each case. In case, the receipt was issued in the names of unmarried lady, who now wants to get her name changed on account of marriage, the banker should comply with such a request since this is a genuine case. In case a request has been received from the customer to add the name of any other person in the fixed deposit receipt, the banker should have no objection to adding of such name since he has the mandate of the customer. However, in case the receipt is in the name “of two or more persons, the banker should comply with the request for adding a name only when all the depositors make such request in writing. In case of the death of a depositor, the deposit can be held jointly in the names of all the heirs or the amount of deposit may be split equally in each person’s name depending upon the request received from the heirs of the deceased. If the original term of the deposit is not reduced, the compliance of such a request will not be considered as renewal of deposit or its payment before maturity date,

 

 Savings Bank Deposit Accounts

These deposits are mostly of small amounts and are accepted by banks to encourage persons of small means to make savings. Frequent withdrawals are not allowed and interest is generally allowed on monthly balances. The cheque facility is also available in case the depositor agrees to maintain a minimum balance.

 

Current Deposit Accounts

In case of current or demand deposits, the bank undertakes the obligation of paying all cheques drawn against it by the customer till it has adequate funds of the customer with it. The current account is a running account and, therefore, it never becomes time barred. The special characteristics of such an account are as follows:

(i)         The Primary objective of current account is to save big customers as big businessmen, joint stock companies, public authorities, etc. from the risk of handling cash themselves.

(if)        The cost of providing current account facilities is considerable to the banks since they undertake to make payments and collect the bills, drafts, cheques for any number of times daily. The banks, therefore, do not pay interest on current deposits while on the other hand some banks charge for incidental charges on such accounts.

Opening of Current and Savings Accounts:

Following formalities are required to be completed before a current or a savings account is opened in a bank:

1          Application on the prescribed form. The person desiring to open a current or a savings account with the bank has to make application in the prescribed form. The applicant is required to give his name, address and occupation in the form. He has also to declare that he shall comply with the bank rules in force from time to time for the conduct of the account.

2.         Photographs. As per the recent directives of the Bangladesh Bank the applicant is required to submit two photographs—One to be pasted on the application form and the other on specimen signature sheet.

3.         Introduction or reference. The applicant is also required to furnish in the application form the names of the referees from whom the banker may make enquiries regarding the character, integrity and respectability of the applicant. In most cases the introduction is done by the customer of the bank or some person known to the bank by signing on the application form. The person so signing gives his account number (if any) with the bank or his address.

4.         Specimen Signature. Even customer is required to supply to his banker with one or more specimens of his signature. These signatures are taken on cards, which are indexed and filed in an alphabetical order.

5.         Mandate for an operation of the account by an agent. In case a customer desires to get his account operated upon by another person, the bank will obtain a mandate in writing to that effect as well as the specimen signature of the person in whose favor the mandate is given.

 

6.         Opening the account. After observance of these formalities the bank opens an account in the name of the applicant. The applicant is required to deposit alternative minimum amount is Taka 500/- in case of Savings Account Taka 1000/- in case of Current Account. The bank then provides the customer with.

(a) A pay-in-slip book,

(b) A cheque book,

(c) A pass book,

 

Pay-in-slip book with a view to facilitate the receipt of credit items paid in by a customer, the bank supplies him pay-in-slips either loose or in book form. The customer has to fill up the pay-in-slip at the time of depositing the money with the bank. The cashier with his initials and stamp will return the counterfoil to the customer on the receipt of the money. Separate pay-in-slips are used for savings and the current accounts as well as for cheques and cash deposits.

 

Cheque book To facilitate withdrawals and payments to third parties by the customer, the bank also supplies a cheque book to the customer. In case of savings bank account holders, cheque books are issued only to those customers who agree to maintain a minimum balance. Others may withdraw the money with the heir of withdrawal forms available at the bank’s counter.

Pass book. Passbook is an authenticated copy of the customer’s account with the bank. It is written by the bank and records all dealings between the bank and the customer. The customer sends it periodically to the bank so that the bank may record up-to-date entries. Some banks supply periodical statements of account to the customer in place of the passbook. The customer, particularly a businessman, prepares Bank Reconciliation Statement with the help of pass book or Statement of Account for the purpose of finding out the causes of difference between the balance as shown by his cash book and bank pass book.

 

 Is Pass Book a conclusive evidence of entries made there in?

There has been a conflict of opinion regarding conduciveness of the passbook regarding entries made therein. However, both in England and India in majority of the cases, it has been held that entries in the passbook do not form the conclusive evidence of their correctness crackerjack. Both customer and the bank can indicate the mistakes or omissions and get them rectified. The legal position can be studied from two angles:

(i)            Where the entries are to the advantage of the customer.

(ii)          Where the entries are to the disadvantage of the customer,

Entries to the advantage of the customer: The following points are important in this connection.

(i)         In case the bank gives a wrong credit to fee customer and the customer presuming it to be his own money withdraws it and spends it away, the banker will not be able to debit the customer’s account with such wrong credit

 

This rule is subject to the following conditions:

(a)        The customer will have to prove that he was ignorant of this fact that a wrong credit has been given to him. In those cases where the customer is regularly maintaining his account books and the bank has also been sending him the pass book, it cannot be presumed that the customer had no knowledge of the wrong credit given to him by the bank.

 

(b)       The customer has altered his position to his prejudice by spending the same.

(c)        The banker has the right to inform the customer and rectify when the banker comes to know of it the customer after such information cannot withdraw such money. However, the banker should not dishonor such cheques, which the customer had drawn and issued before notice of such wrong credit was served on him. In case, he does so, the banker can be held liable for damages by the customer for wrongful dishonor of cheques.

Entries to the disadvantages of the customer: In case a wrong debit has be en given to the customer or a due credit has not been given to the customer in the passbook, the legal consequences will be as follows:

(i)         The customer on finding out the mistake may gel the balance rectified. It is to be noted that customer is not bound to examine the Pass Book periodically or regularly.

(ii)        However, the customer will not be entitled to get the mistake rectified if it is proved that:

1. The customer was negligent;
2. The entries in the pass book constitute a settled account; and
3. The position of the banker has been subsequently altered to his prejudice.

 Closing of a Bank Account

A customer’s account may be closed in the following circumstances:

1. The customer may inform the banker in writing of his intention to close the account. The banker cannot ask for his reasons of such closure. It should immediately ask the customer to return the unused cheques and close the account.

1. The banker may itself ask the customer to close his account when the banker finds that the account has not been operated for a long time. A notice to that effect can be given to the customer. In case the customer is not traceable, the amount standing to his credit may be transferred to “Unclaimed Deposits” account. The amount shall be paid to the customer as and when he is traced.
2. In case the banker finds that the customer is not desirable e.g. customer is guilty of having forged cheques or bills of exchange etc or flouting rules of operating the account, the banker may by notice in writing inform the customer of its intention to close the account. However, the banker should follow the following procedure in this connection:

• The banker should give a reasonable time to the customer for making alternative arrangements.
• In case the customer does not come forward to close the account in spite of getting notice for closure of account from the banker, the banker should give a second notice to him stating it clearly that in case he himself does not close his account by a specified date the banker itself will close that account.
• In case the customer does not close the account by the specified date, the banker should by a draft send to him the money lying in his account.

1. In the following cases, the banker should suspend all payments from the customer’s account till the matters are finally settled:

• When the banker receives notice of customer’s death or insanity.
• When the customer becomes insolvent or in case of a company, it goes into liquidation. In such cases the money standing to the credit of the customer will be transferred to the official receiver or the official liquidator as the case may be.
• When the banker receives a Garnishee Order.
• When the banker receives notice from the customer regarding assignment of the balance standing to the credit of his account by him to a third party. The banker in such a case is bound to pay the money to the third party.

 

DORMANT ACCOUNTS

 

Dormant Accounts are those accounts, which are without any customer created transaction for a long time. The law has not prescribed any period after which an account should be treated as a Dormant Account because of absence of any transactions by the customer in his account. Every bank has its only policy in this respect.

There may be several reasons for an account becoming a Dormant Accent. The depositor might have moved from one place to another without citifying the banker about his change of address. Ht may have misplaced his passbook and forgotten about the existence of an account with a particular bank. In some cases the depositor might have died without bank’s knowledge.

In case of active accounts, there is some measure of control because of periodic review by the customer of his account. In case of current accounts, the Bank submits statements of account to the customer at regular intervals. It is presumed that the customer must have gone through the account and checked about its accuracy. In case of an active account, the customer is asked to submit his Pass Book from time to time to the bank so that the bank may pass necessary entries in it. Thus, in case of an active account, the chances of fraud being committed by the bank’s employees are much less since the accounts are subject to constant check by the customers. However, no such controls are available in case of Dormant Accounts. In the absence f customer’s checks, the Dormant Accounts can easily be manipulates by cheats. One method of controlling frauds in case of Dormant Accounts is to transfer all of them into one Ledger; this Ledger should list all the depositors having Dormant Accounts with the bank with the amount shown against each account. The signature cards for Dormant Accounts should also be removed from the active file and should be placed in a Locker under dual control. The card reference of such transfers should be kept in die active tile. The card should show the name of each depositor and the date on which the account was transferred to Dormant Account Ledger. In case a depositor whose account has been taken as a Dormant Account wants to operate such an account, the entry must be initialed by a responsible official before the account is permitted to be operated upon. The officer-concerned should also initial the control sheet when such entries are made.

 Remittance Section:

The major function of commercial Banks is mobilization of fund. Other than this, banks provide ancillary services to its clients. Clients need to remit money from one place to another for their business or other purposes. Banks fulfill this need of customers by means of remittance service. Money can be remitted domestically or internationally, which known as local remittance and foreign remittance.

There are three ways of transferring fund domestically. The modes of transferring funds are:

• Pay- Order (PO).
• Demand Draft (DD).
• Telegraphic Transfer (TT).

 

 Payment Order / Pay Order (P.O)

This is an instrument issued by the branch of a bank for enabling the Customer/Purchaser to pay certain amount of money to the order of a certain person/firm/organization/office within the same clearinghouse area of the pay order-issuing branch.

 

Characteristics of P.O

• The issuing branch and paying branch are same.
• Application for payment within the clearinghouse area of the issuing branch.
• This may be open or can be crossed.
• No charge for issuing pays order for account holder.

Demand Draft (D.D)This is an instrument through which customer’s money is remitted to another person/firm/organization in outside the clearinghouse area from a branch of one bank to an outstation branch of the same bank or to a branch of another bank (with prior arrangement between that bank with the issuing branch). This is an order instrument in which the issuing branch gives instruction to the payee/drawer branch to pay certain amount of money to the order of certain person/firm/organization. Commission, vat and postage are charged on issue of DD entries for issuing DD.

Telegraphic/ Telephonic Transfer (T.T)

This is a mode of transfer of customer’s money from a branch of one bank to another branch of the same bank through telegraphic/telephonic message. The issuing branch used to send the message of such remittance through telegraph/telephone adding certain code number or test number on the basis of test key apparatus developed by the concerned bank for its different branches. The drawer and the payee are required to have account with the bank in order for this transaction to take place. TT is issued against cash, check, letter of instruction etc.

 

Characteristics of T.T

• Issued by one branch to other branch and message is tale-communicated.
• Remittance/ transfer of money is done through tested tale-messages.
• Remittance is affected on the basis of tested message.
• Test key apparatus is required.
• No charge for issuing pays order for account holder.

 

Bills and Clearing Section:

Clearing and bills section is an important section of General Banking. This is the section through which branch has to clear it’s inter branch and inter bank transaction. Customers do pay and receive the collecting branch the system is known as IBC.

 THE CLEARING HOUSE SYSTEM

Meaning: the growth of banking habits among the people has led to greater use of cheque facility by them. The number of banks and their offices are also constantly on increase. Every bank receives daily hundreds of cheques, drafts etc., on other banks. One method of collecting the money of such cheques, drafts etc. are to send an official to every drawee bank. This method is bound to prove costly and tedious. The other alternative is to fix a common place where officials of different banks may meet daily to settle interbrain claims. Such a method is simple and convenient since it does not involve unnecessary traveling and actual handling of cash. The common place so fixed is termed as banker’s clearing house.

A clearing house may, therefore, be defined as an organization of barks constituted for the purpose of settling inter-bank liabilities due to transfer of deposits by a customer of a particular bank to that of another bank.

 

Mechanism:

 The mechanism of working of a clearing house in general is as follows:

(i)         Every bank of the locality which is a member of the clearinghouse prepares a bank-wise list of cheques received from customers and drawn on different banks of the locality.

(ii)        An official of each bank visits the clearinghouse with the cheques and their list in the morning. He delivers the cheques to the officials of the respective banks. Similarly, he also receives the cheques drawn on his bank from the officials of the other banks.

 

(iii)       The officials return to their respective banks to meet again in the afternoon to return any dishonored instruments to the officials of the respective banks.

(iv)       The official of each bank computes the final balance payable or receivable by his bank from other banks after taking into account the various amounts of receipts and payments.

(v)        The final settlement is effected by the supervisor of the clearinghouse by debiting or crediting, as the case may be, the accounts of the respective banks as maintained with the clearinghouse.

 

Types of Clearing

 

1. Outward Clearing: Outward clearing means when a particular branch receives instrument drawn on the other bank within the clearing zone and those instruments for collection through the clearing arrangement is considered as outward clearing for that particular branch.

2.  Inward Clearing: When a particular branch receives instruments which on them and sent by other member bank for collections are treated as inward clearing.

 

Outward Bills for Collection (OBC):

Customers deposit cheque, drafts etc. for collection, attaching their deposit slip. Instruments within the range of clearing are collected through local clearinghouse. But the other, which is outside the clearing range, is collected through OBC.

 

 Inward Bills for Collection (IBC):

In this case bank will work as an agent of the collection bank. The branch receives a forwarding letter and the bill. Next steps are:

• Entry in the IBC register, an IBC number given.
• The instrument is sent to clearing for collection.

An IBC is dispatched in this regard. If dishonored: in this case the instrument is returned to the collecting branch along with return Memo indicating the cause of dishonored.

 Cash Section:

Cash section is an important section where cash transactions are made. Cash sections demonstrate liquidity strength of a bank. It is also sensitive as it deals with liquid money. Maximum concentration is given while working on this section. Tense situation prevails if there is any imbalance in the cash account. There are various systems maintain by cash officer that is under:

• Vault
• Cash Payment
• Cash Receive
• Transaction after banking hour.

The cash department is the riskiest department of the bank. This is the section where tight security is required to avoid any accidents. There is a limit to be amount of cash that each counter can carry; carrying of excess cash is avoided for safety reasons.

 Cash Receipt

When clients deposit cash in the bank, the bank officer on receipt of the cash and the pay in slip/credit voucher shall:

• Check and count the received cash.
• Make sure that the amount in word and number in the deposit slip are same.
• Check the account title and the number.
• Both the deposit slip is in order.
• Depositor’s signature is in the slip.
• Receive seal in the slip is a must.
• Write the domination of the currency at the back of the pay in slip or the credit voucher and affix stamp in the slip/voucher.
• Enter particulars of in slip/credit voucher in the receiving cash officer book.
• At least, send the pay in slip/voucher to the deposit department or to the respective department.
• Deposit slip must be signed by the respective officer.
• Carbon copy of the deposit slip must be handover to the client with proper seal and signature.

 Cash Payment

Cheques, demand drafts, pay orders, pay slips and debit cash vouchers etc. are received from various departments for payment of cash to customers/payees. Prior payment of cash it is the officer’s duty to make sure that the cheque/or the instrument has been genuinely passed. The following common precaution is thoroughly practiced before honoring a cheque:

• Check of it is an open or crossed check.
• The branch name in the cheque.
• The date in the cheque is very crucial. Cheques are normally valid six months and pre-dated cheques are asked to present after the date given.
• Tk in words and figure of the cheque is same.
• Balance in the account is available.
• The apparent tenor of the cheque. Whether any figure, date or anything has been altered in the cheque presented. If any, then the respective officer must check whether the client is making his signature for alteration or not.
• The specimen card signature and signature in the cheque should match.
• Signature of recipient is obtained on the reverse of cheque.
• In case, where a prior arrangement has been made with the bank, a client may overdraw against a cheque.

 Books maintained by cash department:

Vault Register: In this book the amount of cash available in the branch is maintained. That is, the amount in the vault register book.

Cash Receive Register:  This register keeps record of all incoming cash.

Cash Payment Register: Similar to the cash register book, this book keeps tracks of all outgoing cash that is all payments.

Daily Cash Balance Register: This is the book where cash balance is recorded by counting the notes and coins that are physically available. The balance in this book is compare with the vault register, which should be the same. In case there is an error, then the figures would not match but if no discrepancy is found then anything is to be worried about.

 

Mail Receive and Dispatch Section:

Banking is the business of correspondence. Lot of mail comes to the bank and dispatch from the branch daily. Loss of any document causes much loss for bank. That is why bank has to record all mail received and dispatched through the bank.

Mail receiving:

All mail comes to the bank recorded in this desk. For this reason a register book maintained called inward mail register. A number is given on receiving mail and records particulars of document in the register book.

Mail Dispatching:

Before dispatching mail from the bank, it must record in outward mail register. A number is given on the mail. Destinations, date of dispatch are recorded in that register book.

About NBL

 Introduction:

National Bank Limited (NBL) is a Public Company Limited by shares in the Country, with commendable operating performance. Directed by the mission to provide prompt and efficient services to clients, NBL provides a wide range of commercial banking services also. Bank has achieved success among its peer group within a short span of time with its professional and dedicated team of management having long experience, commendable knowledge and expertise in convention with modern banking. With all its resources, the management of the Bank firmly believes that the Bank would be able to encounter problems that may arise both at micro and macro economic levels.

NBL incorporated in Bangladesh under company Act 1994. It is also guided by The Bank Company Act 1991 (and its subsequent amendments) and Bangladesh Bank Ordinance 1972, so as to enable the company for doing banking business.

Historical Background of NBL:

NBL has been flourishing as the largest private sector Bank with the passage of time after facing many stress and strain. The members of the board of directors are creative businessman and leading industrialist of the country. To keep pace with time and in harmony with national and international economic activities and for rendering all modern services, NBL, as a financial institution automated all its branches with network in accordance with the competitive commercial demand of time. Moreover, considering its forth-coming future the infrastructure of the Bank has been rearranging. The expectation of all class businessmen, entrepreneurs and general public is so high. Keeping the target in mind NBL has taken preparation to open new branches by the year 2006-2007.

The emergence of National Bank Ltd. in the private sector is an important event in the Banking arena of Bangladesh. When the nation was in the grip of severe recession, Govt. took the farsighted decision to allow in the private sector to revive the economy of the country. Several dynamic entrepreneurs came forward for establishing a bank with a motto to revitalize the economy of the country.

National Bank Limited was born as the first hundred percent Bangladeshi owned Bank in the private sector. From the very inception, it is the firm determination of National Bank Limited to play a vital role in the national economy.

The then President of the People’s Republic of Bangladesh Justice Ahsanuddin Chowdhury inaugurated the bank formally on March 28, 1983 but the first branch at 48, Dilkusha Commercial Area, Dhaka started functioning on March 23, 1983. The 2nd Branch was opened on 11th May 1983 at Khatungonj, Chittagong. Today it has total 91 Branches all over Bangladesh.

Since the very beginning, the Bank exerted much emphasis on overseas operation and handled a sizeable quantum of homebound foreign remittance. The Bank established extensive drawing arrangement network with Banks and Exchange Companies located in important countries of the world. Expatriates Bangladeshi wage earners residing in those countries can now easily remit their hard-earned money to the country with confidence, safety and speed.

In the year 2000, the Bank managed to procure foreign remittance business to the tune of US$88.44 million dollar equivalent to Tk.4,662.10 million compared to Tk.3,986.20 million in the previous year indicating a growth of 16.96%

Considering the need for remittance by the expatriates Bangladeshis residing abroad the Bank during the year established drawing arrangement with the Pacific Bank Berhad, Malaysia (now May Bank), Security Exchange Company Limited, State of Kuwait and Dalil Exchange, State of Bahrain.

Our Bank invested 25% equity in Gulf Overseas Exchange Company LLC, a joint venture Exchange Company in Oman, operating since November, 1985 under the management of our Bank. The Bank received Riyal Omani 12,450 equivalent to Tk.1.74 million as dividend for the year 2000.

A Representative Office was established in Yangon, Myanamar in October, 1996 by our Bank and obtained permission from the Government of Bangladesh to handle border trade with Myanmar. Opportunities are being explored for further business avenues there.

Now NBL is on line to establish trade and communication with the Prime International banking companies of the world. As a result NBL will be able to build a strong root in international banking horizon. Bank has been drawing arrangement with well conversant money transfer service agency “Western Union”. It has a full time arrangement for speedy transfer of money all over the world.

Banking is not only a profit-oriented commercial institution but it has a public base and social commitment. Admitting this true NBL is going on with its diversified banking activities. NBL introduced Monthly Savings Scheme, Special Deposit Scheme, Consumer’s Credit Scheme and Savings Insurance Scheme etc. to combine the people of lower and middle-income group.

A team of highly qualified and experienced professionals headed by the Managing Director of the Bank who has vast banking experience operates bank and at the top there is an efficient Board of Directors for making policies.

 

 Functions of the NBL:

• The main task of the NBL is to accept deposited from various         customers through various accounts.
• Provides loans on easy terms and condition.
• It creates loan deposit.
• The bank invest it fund into profitable sector
• It transfers money by Demand Draft (DD), Pay Order (PO) and  Telegraphic Transfer etc.
• The bank is doing the transaction of bill of exchange, Cheque etc. on  behalf of the clients.

• NBL assists in the Foreign Exchange by issuing Letter of Credit.
• The bank insures the securities of valuable documents of clients.

• It brings the increasing power of dimension of transaction.
• Above all, NBL helps the businessmen financially by giving discount           facility for bill of exchange and by providing the facility of Letter of         Guarantee.

 Mission & Vision of NBL:

Mission of NBL:

In line with its vision, NBL has developed a mission statement, which reads as follows and is self-explanatory:

a) To deliver service excellence to all the customers, both internal and external.

b) NBL will constantly challenge its systems, procedures and training to maintain a cohesive and professional team in order to achieve service excellence.

c) To create an enabling environment and embrace a team based culture where people will excel.

d) To maximize shareholder’s value.

 Vision of NBL:

The vision of NBL is to become “A Bank for Performance with Potential” by transforming the way they do business and developing a truly unique financial institution that delivers superior growth and financial performance and be the most recognizable brand in the financial service in Bangladesh.

NBL dreams to become the bank of choice of the general public, which includes both the consumer and the corporate clients. They want to build such an image that whenever people will think of a bank, they will think of NBL. In order to build up such an image, NBL has taken up some attractive promotional campaign. They are targeting the young generation in particular because research has shown that people usually have a soft corner for the first bank of their lives and tend to stick to it if they are satisfied with its services. With this plan in mind, NBL is trying to project itself as a vibrant and dynamic organization by introducing state-of-the-art banking technology that will make banking easier and hassle-free to the young generation.

Business Principles and Values of NBL:

The NBL Group is committed to the following ‘Business Principles’:

• Outstanding customer service;
• Effective and efficient operations;
• Strong capital liquidity;
• Expense discipline;
• NBL Conservative lending policy;
• Strict also operates according to certain key Business Values:
• The highest personal standard of integrity at all levels;
• Commitment to truth and fair dealing;
• Openly esteemed commitment to quality and competence;
• A minimum of bureaucracy;
• Fast decisions and implementation;
• Putting the Group’s interests ahead of the individual’s;
• The appropriate delegation of authority with accountability;
• Fair and objective employer;
• Merit approach to recruitment/selection/promotion process;
• The promotion of good environmental practice and sustainable development, and commitment to the welfare and development of each local community;
• A commitment for complying with the spirit and letter of all laws and regulations

 Business Philosophy of NBL:

The philosophy of NBL is to develop the bank into an ideal and unique banking institution. The perception is that NBL should be quite different from other privately owned and managed commercial bank operating in Bangladesh. NBL is to grow as a leader in the industry rather than a follower. The leadership will be in the area of service, constant effort being made to add new dimension so that clients can get “Additional” in the matter of services to commensurate with the needs and requirements of the country’s growing society and developing economy.

The present management has turned the bank into new business philosophy. The three main businesses that the bank is currently structured in are:

Corporate.

Consumer.

Treasury.

The branches of the bank are now termed as “Customer Service” which are solely concentrated providing service to the corporate and consumer clients and maintain relationship with them.

Global economic perspective:

 

The growth of world economy, according to World Bank’s study on Global Economic Prospects 2005, has been broadening over the past few years. Real GDP growth of the world is expected to be 3.20% in the year 2005 which is remarkably higher than that of the previous years due to improvements in macroeconomic fundamentals, enhanced structural flexibility, a stronger economic climate and progress toward reducing trade barriers. However, International Monetary Fund (IMF) had forecasted 4.30% growth for 2005.

The economic growth had gained momentum and now well entrenched in most of Asia, which represents a solid starting point for long term growth and in all possibilities would increase the likelihood of the developing countries to meet their Millennium Development Goals. If such favorable environment sustains for long, the developing countries would surely be able to achieve rapid and sustained per capita growth at a level of 3.50% per annum between 2006 and 2015, which would enable them to halve the incidence of extreme poverty by 2015.

Global growth rate slowed down to some extent in the year 2005 and is expected to slide further to 3.20% in the year 2006, mainly due to increase in oil and commodities price. According to Global Economic Prospects 2005, high oil prices have dramatically worsened the poverty of the poorest oil importing countries. These spiraling fuel prices have acted as an impediment to recovery of the world’s economies of some countries which did not fully participate in the global expansion. On the other hand, the high fuel prices acted as a moderating influence, where aggregate demands were already buoyant.

The same study also found that in Asia continent, excepting the South East Asia, the service sector registered a big climb. This is not surprising because services are assumed to be income elastic and a relative rise in the share consumption is understood. This effect is reinforced by the relatively high rate of productivity growth in manufacturing. In high growth regions in East Asia and South Asia, where GDP is forecasted to be 5.40% and 6.30% respectively for the year 2005, exists two contrasting scenario. In South Asia the employment in agriculture shifted mostly to services, with a small increase in industrial output. In East Asia, employment in agriculture shifted more evenly between industry and services. However, long-term growth in South Asia is forecasted to average about 5.50% during 2006-2015 as the contribution to growth from the private sector continued to rise.

 

Economic Outlook of Bangladesh:

The Government continued to take necessary measures with a view to recovering the losses caused by the devastating floods and other natural calamities of the previous year. Efforts were made to boost export and loans were extended for rapid and sustainable development and expansion of the Small & Medium Enterprise (SME). In the year 2005, the country again passed through a year of socio-political chaos. Series of terrorist activities across the country stifled investors’ confidence and curtailed the economic activities to some extent. Spiraling oil price in international market, among others, caused crisis of foreign currency in domestic foreign exchange market. Besides, increase in interest rate coupled with exchange rates hampered normal economic growth and left its scar on the country’s economy.

Even with all these adversities brewing around, the country successfully combated the aftermath of post MFA era. GDP growth is likely to exceed 5.40% in FY 2005. With the exception of agriculture, the growth in production was broad based covering wide range of activities in non-crop agriculture, industries and services. Robust annual growth of manufacturing sector, estimated at 8.50% by the Bureau of Statistics, is partly the result of strong growth in the fourth quarter. It is reflected in the movement of quantum index of the manufacturing industries, covering mainly, medium and large-scale industries, which witnessed about 8.80% growth in the fourth quarter of FY 2005.

Consumer Price Index (CPI) inflation, according to the study of Economic Trend by Bangladesh Bank, exhibited a moderate trend during the first half of the year and showed an upward trend in the second half of FY 2005. The point-to-point inflation during the year increased from 5.50% in December 2004 to 6.70% in March 2005 and further to 7.40% in June-2005.

Fiscal development in the last quarter of the year followed the pattern observed during the preceding years, namely both revenue collection and government expenditure increased at a much faster rate than the preceding quarters, reflecting strong seasonal impact, while quarterly fiscal deficit also increased which was financed mainly by increased level of domestic bank and non-bank borrowings.

Following marked deterioration of external current account balance, as well as the balance of payments position in the third quarter, the performance of the external sector improved in the fourth quarter due to some slowdown in import demand due to crisis in the local foreign exchange market and in the face of a rise in the growth of the export earnings and remittances.

Coming to the banking sector in Bangladesh, available data on the banking system indicates that the profitability ratios of banks witnessed a healthy improvement during the year 2005, especially in the fourth quarter. The growth in the operating profit of the private banking sector in the year 2005 registered at 29% over 2004. On the other hand, the macroeconomic challenges, faced by the policymakers, were to facilitate orderly adjustments of exchange rate and interest rate in order to maintain macroeconomic balance in the face of external sector adversities of continuing escalation in oil price and post MFA era uncertainties.

 

NBL Reinforces its Turf:

National Bank successfully maintained its growth during the year 2005 in terms of business and profitability, with its operating profit registering a growth over the previous year. The Bank diversified its business in new areas of commercial banking operations, trade finance, working capital finance, term finance etc. Notable among the above was the Bank’s investment in Incepta Pharmaceuticals ltd. which is expected to go into operation by the following year.

Strategic operational milieu to achieve the goals:

In line with the previous year, our relentless effort to maximize shareholders value, continued in 2005, aimed ever changing and increasingly competitive and turbulent environment. To achieve overall success, our operational strategies were to further diversify our income streams, improve fee-based earnings, enhance productivity and manage credit risk efficiently. During the year under review, the Bank has extended its service arms by installing 5 Automated Teller Machines (ATMs) and 10 new Branches to reach the customers doorsteps.

 Corporate Governance of NBL:

In recent times, much emphasis is being put on corporate governance. In order to uphold the code of corporate governance, all policy matters are taken and guidelines are being followed in conformity with the practices of good governance.

The activities of Board of Directors, as always, are transparent and based on highest professional norms and ethics, which provide strategic planning and policy guidelines of the Bank. During the year 2005, the Board met several times. Through its extended arms, meeting of the Executive Committee, the Board was held in 2005 for reviewing the performance of various activities of the Bank designated to them. In NBL, the core of corporate governance, in its essence, is the enhancement of shareholders value whilst being ethical and accountable to the society and ecology. The bank always conducted highest ethical standards, which are in the best interest of all its stakeholders.

At the management level, important decisions of the Bank are being taken through a number of Committees, namely Management Committee, Credit Committee, Purchase Committee, asset liability committee and likewise, headed by the Managing Director and comprising of senior executives as their members, which not only ensures best management practice but also guarantees transparency, impartiality and fairness in all its decision-making process.

 Core Risk Management:

Risk is an integral part of our banking industry and the mainstay of our risk management principle is to find equilibrium between risk and return. Bangladesh Bank, in October 2003, undertook a project for implementing Core Risk Management System in every bank by identifying 5 (five) core risk areas of banks. The bank has taken the necessary measures for implementation of the same and is continuously striding ahead for its full compliance. The Bank attaches highest importance to risk management. Managing credit risk, as always, starts first from the very process of selection of quality borrowers, followed by a well defined credit checking, risk analysis and approval process, which are carried out by competent personnel at different tiers. All the credit functions are constantly being supervised and monitored, not only to keep the credit portfolio in sound footing but also for recovery/ regularization of loan accounts. For ensuring perfection of security documentation, NBL is still continuing the unique process of rechecking of security documentation by a second legal adviser, other than the lawyer who vetted it originally. Above all, our Bank, as you know have installed a high tech Banking Software that allows better and more effective monitoring of loan portfolio than before.

 

 Corporate Social Responsibilities (CSR):

The ethos of NBL for pursuing its activities in social arena has got further momentum with enthusiasm and support. National Bank Foundation was established by the board of directors of National Bank in 1989. With the financial help of the foundation, National Bank Public School and College was established at Mogbazar, Dhaka. After establishment, NBL is continuously facilitating with sports and cultural activities. As a continuation of it, NBL has patronized the “National Bank Volleyball league” arranged by Bangladesh Volleyball federation. NBL never hesitate to extent the hand of help in case of natural calamities and national cultural festival.

National and International Award:

National Bank Limited was the recipient of “Most Outstanding Performance among Banks in South Asia-2005” international award.

 Environmental Management Policy:

Sustainable ecological and socio economic developments of the society are a pivotal element of all business decisions of NBL. A thriving physical environment has a bearing not only on the quality of life in any society but also has great impact on long-term sustainability of any corporate entity. NBL’s policies are to nourish and support the environment and consequently the quality of life of the society in general, through which the Bank intends to enhance the trust and goodwill within the society.

The Bank’s lending policies are supportive and nourishing for the environment. The Bank has its own environmental impact assessment when it assesses the viability of projects. Projects are assessed not purely on its capacity to generate profit or to repay principal and interest but also its impact on social and environmental aspects.

 Money Market-Local and Foreign:

 

Local Money Market: During the years 2003 and 2004 the market showed almost continuous liquidity surplus compelling the market players as well as market monitors and capital market watchdog to reduce the price of money, specially the interest rate. The obvious result was increased lending coupled with steep inflation. The increase of Cash Reserve Requirement (CRR) and Statutory Reserve Requirement (SLR) during the year might bring some positive effect on inflation but affects liquidity adversely resulting in the money market becoming dry. The inter-bank rates went as high as 70% from less than 2.00% and remain skyrocketing for first half of the year. The average inter-bank rate was around 13% compared to around 6.00% in the previous year against the bank rate of 5.00%, 28 days Treasury bills rate of 4.00% and reverse-repo rate of 4.50%. Many a reasons, namely a significant rise of imports of capital machinery and food grains, high price of petroleum products, had contributed to the liquidity crisis. The Treasury bills and bond yields and reverse-repo rates increased along with hiking interest rates of different savings instruments.

This bank, in line with Bangladesh Bank’s Guidelines separated Front and Back Office of the Treasury Division and equipped the Divisions with well-experienced and efficient personnel. The Treasury Office of the Bank was always vigilant to cope up with the changing market situation.

changing market situation. Although the volume of transactions was increased significantly, the Bank was able to maintain statutory liquidity requirements throughout the year successfully.

During the difficult period, our treasury team had actively engaged in applying various money market derivatives and tools to maintain the required liquidity.

 

 Local Foreign Exchange Market:

The country experienced a more or less steady foreign exchange market during the entire year of 2005 which however shoot-up in the beginning of 2006 and reach as high as BDT72.00 per US$ 1 .The average rate of BDT per US$ was 61.57 during the month of January 2005 which, however, increased up-to BDT66.06 in December, 2005.

The foreign exchange deals of NBL were more or less limited to commercial transactions only during the year 2005. Treasury deals were not executed in view of the prevailing market condition. We, however, like previous years offered competitive exchange rates to our clients keeping in view the philosophy of the bank “Trusted Partner” and better customers’ satisfactions.

Bank’s export during the year was Tk. 22,144.00 million as against the import of Tk. 26,029.00 million. The corresponding figures during the previous year were Tk.13, 581.00 million and Tk. 25,974.00 million. It is evident from the statistics that in the year under review the export was 82% of import leaving a gap of only 18% while in the previous year the import export gap was 48%. This minor gap was met from the local market with a view to maintain the Bank’s open limit position.

 

 International Trade:

Import and export of the country grew substantially in FY2005 over the previous year. Robust growth was observed in import of cotton, yarn and other staple fibers, which in turn reflects a strong and healthy export-related activity in the textile sector. The import growth was also attributable to the increase in domestic consumption and investment demand, as well as higher price of some major items, like food and oil, in international market and also import of food grain in increasing quantity to cover shortfall due to flood. On the other hand, garments continued to occupy overwhelming three-fourth share of our exports with miscellaneous items grouped under “Other” category continued to show a robust growth of in FY2005.

Capital Market

After strong performance in the preceding quarters, capital market indicators showed some decline during the fourth quarter of FY05, as evidenced by a decline in market capitalization, turnover and general price index. Market capitalization, turn over and general price index declined by 4.8%, 12.30% and 10.70% respectively during the said quarter. However, number of listed securities and issued equity & debt increased marginally by 0.40% and 4.60% respectively during the year under review. During the year, the domination of banks and pharmaceuticals in total market capitalization continued with a significant contribution from the cement industries.

The capital market of the country in 2005 witnessed resurgence in public confidence with the price index of shares in both the bourses of the country registering a steady and steep increase. Among them, the shares of banks and financial institutions contributed mostly to the rise of the price index, which attracted the majority of investors resulting in hectic trading of these shares.

The General Index of Dhaka Stock Exchange Ltd. at the end of December 2005 peaked at 1677.35. Total market capitalization of all shares and debentures of the listed securities at the end of December 2005 stood atTk.233, 075 million.

The closing price of NBL’s share at the end of 2005 was Tk. 746.50 per share of Tk.441.36 each. It is notable that the intrinsic value of shares in NBL continues to rise and remain profitable.

 

 Deposits, Advances and Investment:

 

Deposits: The deposit graph will depict that the deposit base of the Bank continues to register a steady growth and stood at Tk. 3,298.40 million as on December 2005 as against Tk. 2897.34 million in December 2004, which is an increase of 13.84%.

Overall deposit mix of the Bank also showed marked improvement with the time deposits stood at 84.67% and demand deposits stood at 15.33%, which during the year 2004 was 87.86% (time deposits) and 12.14% (demand deposits).

Advances: As stated earlier, NBL is in the forefront in implementing the guidelines for managing five core risks in banking, one of which is credit risks, as put forth by Brangladesh Bank.

Loans and advances stood at Tk 2702.03 million in 2005 as against Tk. 2312.96 million in 2004, an increase of 16.82%. The Bank concentrated in financing small and medium enterprises (SME), mostly in backward linkage industries.

Classified loan position as on December year end stood at Tk. 357.35 million which is 1.77% of the total loans and advances.

 

Operating Results and Profit Appropriation: Gross Income:

The gross income of the Bank increased to Tk 2304.68 million in 2005 as against Tk. 1961.94 million in 2004, an increase of 17.49%.

 

Gross Expenditure:

The gross expenditure of the Bank stood at Tk.1453.35 million in 2005 as against Tk. 1226.80 million in 2004, an increase of 18.57%.

 

 Operating Profit:

The operating profit for the year 2005 was Tk. 851.3 million as against Tk. 735.15 million in 2004, an increase of Tk. 116.15 million or 15.80% over 2004. While net profit (before tax) for 2005 stood at Tk 581.12 million against Tk. 484.21 million of 2004, an increase of Tk.  million 96.91 or 20.01% over 2004. Tk. 100.00 million had been transferred to Statutory Reserve, although this transfer was not mandatory as per the relevant provision of the Bank Companies Act, 1991, but the Board of Directors recommended the said transfer to further strengthen the financial base of the Bank to meet any unforeseen eventualities. Provision for tax during the year 2005 amounted to Tk. 309.46 million as per the existing tax law of the country.

Dividend:

The board of Directors is continuously making every effort to uphold and protect the interest of all categories of shareholders and in line with our firm belief in the policy of stable growth with stable return, have recommended dividend of Tk. 30% bonus share for the year 2005 as per the permission from shareholder.

Human Resources Development:

NBL sincerely believes investment in human resources ultimately pays high dividend and also recognize that intellectual capital is the most important asset for the Bank. The vibrancy of the Bank emanates from its people who are the proud recipient of highest priority. NBL, since its inception, is blessed with a very good set of efficient and cognizant professionals in its work team. They are highly committed, prudent, sincere, and dynamic and goal oriented. Its workforce has all the potentials of exploiting real opportunities in the banking arena and maximizing benefit of the stakeholders.

In order to maintain transparency and set-up of an example of upholding justice for deserving candidates from different class of the society, the bank engaged reputed and independent entity to conduct competitive tests for recruitment of fresh officers for the bank. To cope up with its ambitious expansion program of 2006, the bank recruited 74 probationary officers.

The core human resource policy of the Bank is to retain and develop the quality work force through appropriate and need base training, both locally and internationally, as well to attract them by most competitive compensation package, handsome incentives, congenial work environment and career path progression for the deserving employees. Besides the bank has recruited 39 experienced and

To attract and retain qualified and efficient staff, NBL has formulated a number of well thought policies for the welfare of its employees, in the form of Gratuity Fund, NBL Superannuation Fund, NBL Employees House Building Loan Scheme, and Car Lease Finance Scheme etc. Moreover, the Bank in consideration of inflationary pressure, very recently enhanced the compensation package of the employees of the Bank.

 

Election of the Directors:

In terms of Article 105 and 106 of the Articles of Association of the Company, at the Annual General Meeting in every year, one-third of the Directors for the time being or if their number is not three or multiple of three, then the number nearest to one-third shall retire from the office. Accordingly, as per Article 105 and 106, the following Directors will retire from their respective offices. Mr A. B. M. Tajul Islam, Mr. Zakaria Taher, Mr. S. M. Shamim  Iqbal, Mr. Shahsat Hossain and Lt. colonel (rtd.) Md. Azizul Ashraf PSC will retire and this issue will be dealt with in terms of BRPD Circular Letter No. 12 dated April 26, 2003 of Bangladesh Bank and subsequent amendment thereon, but all of them are still eligible for re-election in terms of Article 107.

 

 Organizational Structure of NBL:

          Chairperson (Owner)

↓

      Directors (Owners)

↓

              Managing Director (MD)

↓

                        Additional Managing Director (AMD)

↓

                 Deputy Managing Director (DMD)

↓

              Executive Vice President (EVP)

↓

       Senior Vice President (SVP)

↓

               Vice President (VP)

↓

                 Assistant Vice President (AVP)

↓

 Senior Principal Officer (SPO)

↓

   Principal Officer (PO)

    ↓

           Officer

   ↓

              Assistant officer

↓

        Junior Officer

    ↓

               Probationary Officer

Banking Products:

                                                           

Deposit:

Term Deposit:                      

Savings Deposit Account                               Monthly Term Deposit

Current Deposit Account                                Term Deposit 3 Months

Short Term Deposit Account              Term Deposit 6 Months

Resident Foreign Currency Deposit   Term Deposit 12 Months

Foreign Currency Deposit                              Term Deposit 12 Months

Convertible Taka Account                              Term Deposit 24 Months

Non-Convertible Taka Account                      Term Deposit 24 Months 1 Year Payout

Exporter’s FC Deposit (FBPAR)                    Term Deposit 36 Months

Current Deposit Account-Bank                      Term Deposit 36 Months

Short Term Deposit Account-Bank                6 Months Payout

 

Loan & Advances:                                        Term Deposit 36 Months 1-Year Payout

Loan against. Trust Receipt                            Term Deposit above 36 Months

Transport Loan                                                Monthly Term Deposit Banks

Consumer Credit Scheme                              Term Deposit 3 Months Banks

Real Estate Loan (Res. & Comm.)                 Term Deposit 6 Months Banks

Loan Against. Accepted Bill                            Term Deposit 12 Months Banks

Industrial Term Loan                                       1-Month Td Nfcd

Agricultural Term Loan                                   3 Months Td Nfcd

Lease Finance                                                6 Months Td Nfcd

Other Term Loan

General Banking Department of NBL Shadarghat Branch

 

 General Banking:

 

General banking is the heart of all business banking activities. General banking department performs the core function of bank, operates the day-to-day transactions. It is the storage point of all kinds of transaction of foreign exchange department, loans and advance department and itself. General banking department generally deals with the following sections:

A. Account opening section

B. Account section

C. Clearing

D. Remittance

 

Account Opening Section:

The relationship between customer and banker begins with opening of an account by the customer. Opening an account binds banker and customer into contractual relationship. All kinds of fraud and forgery is initiated by opening an account. So, the bank should take extreme caution in selecting customers.

NBL, Shadarghat Branch mainly operates the following accounts:

  A. Current Deposit (CD)

  B.  Savings Deposit (SB)

  C. Fixed Deposit (FDR)

  D. Short Term Deposit (STD)

  E. Monthly Saving Scheme (MSS)

 

Account Opening Section of NBL Shadarghat Branch:

 

Current Account Opening:

A current deposit account may be operated in several times during a working day. There is no restriction on the number and the amount of withdrawals from a current and banker does not allow any interest on this account. It is important to mention here that NBL has imposed interest on current account recently, which is a unique offer in the banking industry.

As the banker is under obligation to repay these deposits on demand, they are called demand liabilities of a banker. To meet such liabilities the banker keeps sufficient cash reserves against such deposit. There are two facilities for the person who opens a current account. They are:

• Overdraft facility
• Collection of check transfer of money rendering agency, general utility service.

A person can open a current account or any entity the entry can be a partnership firm, Ltd, company, proprietorship firm, association, clubs etc. for opening a current a/c of the above, the requirements and steps, which are followed by this branch are the following

 For a person:

 

There is an individual application from for opening personal current account. The person, who wants to open this type of a/c, is said to fulfill the following requirements:

• Name, father’s/husbands name
• Occupation
• Mandate in writing
• Declaration of nominee
• Letter of introduction
• Specimen signature
• Two copies of passport size photographs
• Initial deposit of Tk 1000.

For Joint stock companies, Association, Clubs etc:

 

In case of opening a current a/c of joint stock companies, association, clubs etc, the following requirements are said to fulfill:

• True copies of certificate of incorporation or registration
• True copies of certificate of commencement of business (in case of limited companies only)
• True copies of memorandum and articles of association ( in case of limited companies)
• Regulation by laws (in case of associations, clubs etc)
• True copies of resolution of the board of Directors of Managing committee/Governing body, regarding conduct of a/c.
• Certificate list containing names and signature of Directors/Officer bearers.

 

 For Partnership/Proprietorship Company:

 

To open a current a/c on the name of any partnership or proprietorship company, the following documents are required:

• Filled up application from stating about the name and address of the firm.
• Partnership deed.
• Trade license.
• Two copies of photograph.
• Endorsement of an a/c holder on the same branch.
• Undertaking / declaration about the partnership is taken by the bank in a write paper (for proprietorship firm)

For public and private limited company:

 

The documents required to open a current a/c will be:

• Copy of certificate of incorporation or registration, trade license.
• Copies of the Certificate of Business.
• True copy of memorandum of association and articles association abide by the law.
• True copy of resolution of the board of Directors / Managing Directors /Governing Body regarding conduct of the a/c.
• Certificate list containing names and signature of Directors/Officer bearers.
• In order to open an account, the customer is first of all asked to fill up the application form given from the bank. The bank requires few documents of the client due to the procedure, such as proposal for opening an account, name and full address, occupation.

 

Saving Account Opening:

A saving is meant for the person of the lower and middle classes who wishes to save a part of their income to meet their future needs and intend to earn an income from their saving.

All the features are like CD a/c as no restriction imposed by the bank.

• The bank offers a reasonable rate of interest.
• The necessary steps for opening a saving a/c.
• Names and Addresses of the party.
• Occupation.
• Father’s / Husband’s name
• Mandate in writing.
• Declaration of nominee.
• Letter of introduction.
• Power of attorney.
• Specimen signature.
• Two copies of passport size photograph.
• Initial deposit of Tk 1000.
• In this, the deposit supplied with the pass and checkbook for depositing and withdrawal purpose of money for which the banker maintain saving bank a/c opening register.

 

Short Term Deposit:

 

Special notice account that is commonly known as short-term deposit a/c will keep in the short-term ledger. The customer should dully sign a/c opening form and specimen signature card.

Entries Passed:

 

A deposit shall be prepared crediting the STD a/c with the amount of deposit.

Cash—————-Dr

                       STD a/c —————-Cr

 

If the amount is deposited by the check or transfer a/c, the following entries shall be passed.

Party C/D, S/D a/c————–Dr

                       STD a/c———————————–Cr

The account opening shall be pasted in the pasting file in numerical order.

The credit voucher shall be passed in the STD a/c of the party.

In case of letter of attorney to debit the STD a/c of the customer voucher will be prepared and the following entries shall be passed:

STD a/c (party) —————-Dr

                       C/D (party) —————————Cr

 

Minimum seven days notice in required for withdrawal of any sum from STD a/c

Banker is not legally liable to the customer, if the check is dishonored under the following conditions, although the check is properly drawn:

• If the fund is insufficient.
• If the payment is stopped by the drawer.
• If payment is stopped by the court by issuing garnishee order.
• Any competent authority issues attached order.
• Check is presented after the death of the customer.
• Notice of assignment.
• Check presented after the business/banking hour as declared earlier.

 

 Letter of introduction:

 

This is a letter of certification, from a person, who is valid customer of that particular or any other branch and maintaining any kind of a/c. usually, a customer from other branch is not allowed to be the introducer, it is permitted. The process of introducing a new client can be done on the form itself. There is a space in the application form where the introducer will write his/her a/c no, addresses and sign his/her specimen signature.

It is always advisable on the part of the banker to allow the prospective customer to open an a/c only with a proper introduction from a responsible person, known to both the parties. A letter of introduction always protects a banker in the following ways-

• Protection against fraud.
• Protection against inadvertent overdraft.
• Protection against un-discharged bankrupt.
• Protection against negligence under sections 131 of Nl act.
• Protection against giving incorrect information to allow banker.

Declaration of nominee:

 

The person who wants to open an a/c can mention one or two nominee. The application will give a declaration in the space given on the a/c opening form, stating the name and father’s name, age, address, relation and percentage of share. The a/c holder can change the nomination any time and it will be valid, only after the death of the a/c holder.

Specimen signature:

The applicant will sign on the application and he will be provided with an extra paper where he will sign three or more signatures, which he has to maintain all through the duration of the account.

 

Interview: At the time of the opening of a new a/c, this concerned branch always takes an interview with prospective customer so as to obviate the chances of preparation of any fraud at the latter stage.

Initial deposits:

 

It is always a common practice among the bankers to allow a new customer to open an account only in cash and NBL takes tk.500 as initial deposit for saving account and tk.1000, for current deposit a/c.

Operating Instruction/Mandate in writing:

 

If any party wants his a/c to be operated by somebody else, he will provide the banker in writing statement about the operator.

Verification of documents:

 

The banker should verify some of the important documents, like the Memorandum of Association, Article of Association, and by laws copy etc. In other cases, the verification of certain other documents like, Trust Deed Probate, letter of administration etc, may be needed.

Conversation with the provision of special acts, since a banker is to deal with different classes of customers, he has to be thoroughly conversant with certain laws.

Pay in slip, Checkbook and Passbook:

The customer is supplied with a part-in-slip to use for depositing cash or check of bill into a/c. the customer is also supplied with a check book for drawing money as and when the customer wishes, which normally contains 10 to 20 bank forms. If the customer dose not likes to have checkbook, then he can make use of suck kind of form.

In addition to the above, a customer is given a passbook, which reflects the customer’s a/c in the banker’s ledger. It usually contains the rules and regulations of the bank and terms and conditions of deposits.

 Fixed Deposit Accounts:

A fixed deposit account is repayable after the expiry of a predetermined period fixed by the customer himself. The period varies from three months to three years. The customer may open his/her account for different time periods, which may be for three months, six months, one year, two years and three years.

Though FDR is an A/c, it is something different from other a/c. FDR is a long-term deposit. Usually customers are allowed to open this a/c for a certain period. The rate of interest varies in accordance with the terms of deposit.

 Opening of FDR:

There is a prescribed form for opening FDR. No introducer and photograph is required for opening this a/c a minimum amount as determined by the H.O is required to open such an account.

 

 Premature Encashment of FDR:

A depositor has the right to claim for refund of his deposit before expiry of the fixed term there of. Bank may in special consideration allow premature encashment on application of the deposit subject to the under noted condition:

• For FDR which are 3 months maturity no interest will be payable at premature encashment, only the principle amount will be refunded.
• When premature encashment is allowed of and FDR with tenure of over 3 months, interest will be paid if enchased before expiry of 6 months at the rate of 3months prescribed interest rate.
• Premature encashment is allowed of and FDR with tenure of over 6 months, interest will be paid if enchased before expiry of over 12 months at the rate of 6 months prescribed interest rate and the same theory will also be applicable for premature FDR encashment of 2 years and 3 years.

Monthly Savings Scheme (MSS):

This scheme is specially designed for the benefit of the limited income group members. This helps to accrue small monthly savings into a significant sum at the end of the term. So, after the expiry of the term period the depositor will have a sizeable amount to relish on.

A monthly deposit of Tk.500/- or Tk.1000/- for 5 or 10 years period earns in the end Tk.40,100/- or Tk.2,24,500/- respectively

  Closing of an account:

A customer may close his/her account any time by submitting an application to the manager or to the branch in charge. The account of the customer is then checked to see how much money is still in it. The customer is then asked to draw a final check for the final account in the account excluding account close charge and other incidental charges. The customer then surrenders remaining checks to the respective officer who tears off these checks. Vouchers are then issued debiting the particular account and crediting.

In case of joint account the application to close the account must be signed by the holders even though the account is operated either of them. The entire joint holder should also sign the last check of withdrawal of the available balance in the account.

 

 Clearing Department of NBL, Shadarghat Branch:

Cheque clearing section of NBL, Shadarghat Branch

Branch receives checks, Demand Draft (DD) and Pay orders etc. from its customers for collection. It also plays in behalf of its customers for those instruments that come to it through clearinghouse. When instruments of NBL are sent for collection or received for payment through clearinghouse it is called inter bank clearance or IBC. These are when instruments of NBL are sent for collection or received for payment through clearinghouse it is called inters bank clearance or IBC. These are treated in a little different manner than instruments of other banks.

When the checks are presented to a bank by the other bank by the other banks for collection of fund and to credit that into the party’s account, the instruments must be cleared through Bangladesh Bank Clearing House. A receiving officer receives checks by a deposit slip over the counter. Clearing section examines:

• When the paying bank within Dhaka City
• When the paying bank outside Dhaka City
• When the paying bank is one of their own branch

 

The paying bank within Dhaka City:

The check clearing section of NBL Shadarghat branch receives Inter Branch Debit Advice (IBDA) from the branches on the receiving day of the instruments. The NBL, Shadarghat Branch takes those instruments to the clearinghouse on the following day. If the instruments are dishonored, the respective branch sends IBDA to the other local branches. The total procedure takes three days to encash the instrument if everything is in order.

The paying bank outside Dhaka City:

The check clearing section of NBL Shadarghat Branch receives outward Bills for Collection (OBC) to the concerned paying bank to get IBDA from the paying bank. If the paying bank dishonors the instrument, the paying bank returns it to the respective branch with the description of the causes of dishonoring instruments. The procedure takes around a week.

The paying bank of their own branch:

The check clearing section of NBL Shadarghat Branch sends Outward Bills for Collection (OBC) to the concerned paying bank to get Inter Branch Credit Advice (IBCA) from the paying branch. If the paying bank dishonors the instrument branch, the paying branch returns it to NBL Shadarghat Branch describing why the instrument is dishonored.

 Cash Department of NBL, Shadarghat Branch:

Cash is the most liquid asset and it should be dealt with very carefully. So this department is really handled with extreme care. This departs starts the day with cash in vault. All cash receipts and payments are made through this department. This departs starts the day with cash in vault. All cash receipts and payments are made through this department.

Cash section is very sensitive organ of the branch and handled with extra care. Interns are not authorized to deal in this section because of its sensitivity. But I was fortunate enough to know the procedures of this section. Operating of this section begins at the start of the banking hour Cash Officer begins his/her transaction with taking money from vault, known as the opening cash balance. Vault is kept in vary secured room. Keys of room are kept under control of cash officer and branch in charge. The amount of opening cash is entered into a register.

After a whole day’s transaction, the surplus money remaining in the cash counter is put back in the vault and known as the closing balance. Money is received and paid in this section.

Cash Receipt:

Money is received through cash with the help of deposit slip or through the negotiable instruments. On receipt of pay in slip/credit voucher the receive cash officer shall:

• Check the title of A/c, its number, amount in words and figures.
• Receive cash dully counted and checked.
• Write denomination of currency on the back of the pay in slip or credit voucher.
• Keep cash in drawer during business hours.
• Enter particulars of pay in slip or credit voucher in the receiving cash officer book.
• Authorized officer check the particulars entered in the receiving ash officer’s book.
• Send the pay in slip or credit voucher to the deposit department or to the respective department.

 Cash payment:

Upon the receipt of the instrument for payment, the cash officer observes the following things:

• The date of the check
• Signature of the account holder
• Where the check is crossed or not
• Where the check is endorsed or not
• Where the amount in word and the amount in figure correspond or not
• Where there is sufficient balance or not
• Where there is a stop payment or not
• Where there is any legal obstruction or not (i.e., Garnishee Order)

If all the particulars are in order, the cash officer makes payment to the customer.

Pay Order (PO):

It is like cash but not exactly cash. It is an instrument, which is issued from a certain branch of a bank and must be encased from the same branch. Unlike check, there is no possibility of dishonoring pay order because before issuing pay order bank takes out money of the pay order in advance.

It is not a negotiable instrument because it can’t be endorsed or crossed.

Pay order gives payee the right to claim payment from the issuing branch. In other wards it is an undertaking by the issuing bank to pay a certain sum of money to the payee or to order on demand.

Commission @ 10.00 tk. Per pay order regardless of the amount and VAT @ 15% is charged on commission. The sum of VAT and Commission is collected from the customer.

Entries for PO:

 

Clients A/c———————————–Dr

Pay order—————————————————–Cr

Income A/c commission on remittance————Cr

Refund of Pay Order:

The following procedure should be followed for refund of pay order by cancellation:

• The purchaser should submit a written request for refund of pay order by cancellation attaching therewith the original pay order.
• The signature of the purchaser will have to be verified from the original application from on record.
• Prescribed cancellation charges should be refunded. Commission recorded for issuing the pay order should not be refunded.
• The PO should be affixed with a stamp “cancelled” under proper authentication and dully signed by authorized officer.
• The original entries are to be reversed with proper narration.
• Cancellation of the pay order should also be recorded in the pay order register.

After receiving the document the officer inters them in a register kept in his/her desk and distributes them to the appropriate sections. When papers or documents are sent for official purpose the officer enters them in another register, writes down the address in the envelope and sends them through proper channel.

Dispatch section NBL Shadarghat Branch performs another duty. It enters the transfer instruments in the scroll and sends those to the computer section.

Accounts Department of NBL Shadarghat Branch:

Account is the Nerve Center of a bank. Account department maintains all records of transactions and all types of statement. At the end of transactions hour all concerned departments send to this department vouchers of transactions. The account section of NBL Shadarghat branch is fully computerized. The computer now maintains the ledgers; Computer also provides all the statements required for the branches, head office and Bangladesh Bank.

Account department compares all figures/amounts, contents of transaction with supplementary statement prepared by computer. If any discrepancy arises regarding any transaction then this department reports to the concerned department.

Following are the activities if account department.

• To record all transactions in the cashbook.
• To record all transactions in the general and subsidiary ledger
• To prepare daily fund position, periodic statements of affairs etc.
• Prepare necessary statement for reporting purpose
• To pay all expenditure on behalf of the branch
• Make salary statement and pay salary
• Branch to branch fund remittance and supporting accounting treatment
• Budgeting for branches

The bank mainly provides following services to customers.

• Provide solvency Certificate
• Provide statement of affairs to customers. It is provided daily, weekly, monthly, and yearly also.

Analysis, Findings and suggestions

 Analysis of the quality of general banking services of NBL through survey:

General banking activities are the basic activities of a commercial bank. The efficiency of the banking activities determines the overall profit earning capability. In order to evaluate the quality of banking services of NBL, interviews were made to collect the opinions of different clients and employees of NBL, Shadarghat branch. Since all the clients and employees were busy, it was not possible to make extensive interview rather sample survey were made. Here 37 persons were interviewed with a written questionnaire and the responses were 100%. The analysis of the survey is as follows:

Results of the survey

1. In which occupation do the account holder belongs?

Fig.8

From the survey, it was found that about two-third of the NBL customers are service holders while none is individual businesspersons or big corporations.

 

2. For how many years you are receiving the service of NBL as a client?

By analyzing the information from the survey, it was found that in the last three years, the number of customers of NBL has increased substantially as more than half of the customers opened their account in last three years.

3. What type of account you have in NBL?

From figure above, it can be seen that most of the clients have savings account in National Bank. They also have current accounts, which are mainly opened for business purposes. People have also opened loan account to get financial assistance from the bank for buying things like car, furniture, computer etc.

 

4. Do you agree with the statement? – “The interest rate of the savings account is reasonable compared to other banks.”

Fig.11

From the survey it is found that only 22% clients of NBL agree or strongly that the interest of the savings account is reasonable, whereas about half of the clients think that it should be higher.

5. Do you agree with the statement? –“The interest rate of the STD account is reasonable compared to other banks.”

Fig.12

From the above graph, it can be easily seen that half of the STD account holders neither agree nor disagree about the interest rate offered by NBL for the STD account holders. Whereas 33% of them disagrees on the issue and the rest agrees.

 

6. Do you agree with the statement? –“The interest rate of loan is reasonable in NBL”

Fig.13

Most of the respondents find the interest rate of NBL on loan very reasonable than any other banks. They consider the facility as a lucrative opportunity for them.

 

 

7. Do you agree with the statement? –“The interest rate of Fixed Deposit (FDR) of NBL is very attractive.”

Half of the respondents think that the interest rate offered for FDR of NBL is not attractive enough.

8. Do you have any deposit scheme in NBL?

Fig.17

Investors in deposit schemes are more interested in getting future profit from their deposit schemes. They also consider the amount of money to be invested for opening the deposit schemes.

10. Do you agree with the statement? – “The terms and conditions of the deposit scheme are reasonable.”

Fig.18

Almost half of the clients think that the terms and conditions of the deposit schemes are reasonable. But certain portion also thinks that they are not.

11. Do you agree with the statement? – “National Bank Limited is providing quality ATM services in comparison to other private banks”

Fig.19

More than 47% of the respondents think that the ATM services provided by National Bank limited are worst. Only 20% of the respondents believe that the ATM services are best and others respondents opine that services are good as well as bad. So it can be conclude that the services are not competitive in comparison to other private commercial banks.

 

12. Do you agree with the statement? – “the services of NBL Power cards are outstanding from viewpoint of customers.”

 

Fig.20

More than 60% of the respondents think that power card services of NBL are outstanding from the view point of customers. The rest of the respondent does not think. So we observe that more than 90% of the respondent provides the positive attitude a rest of the respondents provide negative attitude. So we can conclude that overall services of NBL power cards are excellent.

13. Do you agree with the statement? – “Service of the credit card of National Bank is excellent.”

Fig.21

Almost half of the clients think that the service of credit cards of National Bank Ltd. is excellent. Whereas near about 30% respondents believe that the service needs to be improved.

 

14. Do you agree with the statement? – “Bank officials at front desk are very efficient.”

Fig.22

Almost half of the clients think that the efficiency of officials at front desk of National Bank Ltd. is excellent. Whereas near about 30% respondents believe that the service needs to be improved.

15. Do you agree with the statement? – “The bank officials respond to all complaints.”

Fig.23

Almost 40% of the clients think that the bank officials respond to all complaints of National Bank Ltd. whereas near about 30% respondents believe that service of the bank officials regarding complaints needs to be improved.

 

16. Do you agree with the statement? – “Bank officials at cash sections are very efficient and friendly towards the customers.

Fig.24

Although 41% of the respondents feel that the bank officials at cash sections are very efficient, but there are 35% of the others who feel that the bank officials should be improved at cash sections.

17. Do you agree with the statement? – “The process for applying and getting loan in NBL is not time consuming.”

Fig.25

More than half of the respondents think that the processing time for loan is very time consuming as there are lot of formalities that have to be maintained before providing loans. Whereas only a small portion thinks the process is fast and not time consuming.

18. Do you agree with the statement? – “The loan officers of the bank are helpful and friendly during conversation with the clients.”

Fig.26

About 56% of the respondents agree that the loan officers are cooperative and helping while getting the required information about loan facilities.

 

19. Do you agree with the statement? – “The decoration of the branch is very attractive.”

Fig.27

Most of the respondents think that the decoration of the branches is not attractive enough to provide a sense of elite ness among the minds of clients.

20. Do you agree with the statement? – “The Branch has all the security facilities.”

Fig.28

Most of the respondents think that the security facilities of National Bank Ltd. are not adequate enough to provide efficient services. They feel that it should be improved rapidly to ensure the security of clients’ investments.

 

21. Do you agree with the statement? – “Opening account in National Bank is very useful for personal or business purpose.”

Fig.29

Almost half of the respondents feel that an account in National Bank Ltd. is very useful to them as individuals as well as organizations due to the provisions of many value-worthy facilities.

 

5.3 Summary and objective of the questionnaire:

During the internship period at NBL, Shadarghat Branch, several interviews were made. The objectives of the questions are as follows:

• In which occupation do the account holder belongs?

Objective: the objective of the question is to know the occupation of the account holder. Because the profession of a person determines what sort of banking service he/she may require. The banking service requirements of a service holder are not the same to that of a businessman. A businessman may need 24 hours banking service. Thus the level of satisfaction is related to the occupation of the account holder.

• For how many years you are receiving the service of a NBL as a client?

Objective: the sustenance with NBL as a client may show how much the account holder is satisfied with the account. The long lasting customer, of course, will be more satisfied that that of short lasting customer. Because the long lasting customer has seen many ups and downs for long time. So the question has been asked to know about the time period for which the account holder is receiving services.

• What type of account you have in NBL?

Objective: there are different types of accounts in NBL. Such as savings account, current account, short term Deposit account, cash credit account. Savings accounts are suitable for service holder while current account provides different services and packages. Cash credit account provides financial assistance to the client. An individual may have all type of account simultaneously.

• Do you agree with the statement? –“ the interest rate of the savings account is reasonable compared to other banks”
• Do you agree with the statement? –“ the interest rate of the STD account is reasonable compared to other banks”

Objective: the aim to open savings account is to get more some interest. There are lots of banks operating in the country and they are paying competitive interest as well. If NBL does not provide interest at a reasonable rate, then the clients shall switch off to others. So the question has been asked to know what the clients their about interest rate on savings and STD account.

:

• Do you agree with the statement? –“the interest on loan is reasonable in NBL.”

Objective: the interest of loan is higher than the interest on deposit. So what the       customer think about the interest rate of loan is very important.

• Do you agree with the statement? –“ the interest rate of fixed  deposit (FDR) of NBL is very attractive”

Objective: FDR is generally considered as a long term deposit source for a commercial bank. As more and more deposits will be collected by the bank, the financial condition and profitability will be higher as well. So they need to attract the clients who have surplus money. For this reason, it is asked to know whether the customer thinks the FDR’s interest rate as attractive or not.

• Do you have any deposit scheme in NBL?

Objective:

• What is the reason for choosing the deposit    scheme?

Objective:

• Do you agree with the statement? –“the terms and conditions of the deposit schemes are reasonable”

Objective:

• Do you agree with the statement? –“NBL is providing quality ATM services in comparison to other private banks”

Objective: the private banks of Bangladesh are providing very nice ATM facilities. NBL is one of them. So this question has been asked to know whether the quality of the ATM services is competitive or not. It has been observed that the number of ATM booth is very limited though it has a large number of branches all over the country.

• Do you agree with the statement? “the services of NBL power cards are outstanding from the view points of customer”

Objective: power cards are debit cards issued by NBL. It is used to withdraw cash, pay utility bills, restaurant bills, shopping bills etc. there are lots of cards issued by other banks also. So the above question has been asked to know whether the customer thinks that the services of NBL power card is excellent or not.

• Do agree with the statement? “The services of NBL debit card is excellent”

Objective; credit card is one of type of loan which is collateralized by FDR or some thing like this. Credit card is used for shopping both in home and abroad. So the question has been asked whether the service of the credit card NBL is excellent or not.

• Do you agree with the statement?” banks officers at the front desk are very efficient”

Objective: the efficiency of the front desk officers can attract the customer and it is an important factor of customer’s satisfactions. So the question has been asked to whether the front desk officers are efficient or not.

• Do you agree with the statement? “The bank officers respond to all complaints”

Objective: responds to various complaints from customers is the vital part of the service quality. To provide quality banking services, the bankers have to consider the well and woe of the clients. To know this the above question has been asked.

• Do you agree with the statement? “The bank officers at cash sections are very efficient and friendly towards the customer”

Objective: cash section is the most sensitive part of the bank. The efficient and friendly behavior is required from them although they have to deal with a lot of customers during the office hours

• Do you agree with the statement? “The process for applying and getting loan in NBL is not time consuming”

Objective: the process of sanctioning is not simple task. It involves rigorous tasks. So generally it require time and sometime the customers become disturbs for this delay. So to know what they think about the process the question has been asked.

Do you agree with the statement? “The loan officers of the banks are helpful and friendly during conversation with clients”

Objective: the loans officers are powerful personnel of the bank in the loan sanction process. So they should be friendly. To know whether they are really friendly and helpful or not, the above question has been asked.

• “Decoration of the branch is very attractive” do you agree with the statement?

Objective: the decoration of the branch should be attractive because it ensures the working environment is good or not. So the above question has been asked.

• Do you agree with the statement? “the branch has all the security facilities”

Objective: security is the prime requisite of the bank. if the customer does not feel secured, then he/she will not come to the branch again. So this question has been asked.

• Do you agree with the statement? “Opening account in NBL is useful “

Objective: this is a concluding question. It is asked to know what the individual think about the overall usefulness of the banking services.

 Findings:

From the survey important topics were found. Some of them are negative while some are need to be improved. The findings are as follows:

1. It was found that the account holders of NBL, Shadarghat Branch are business persons and service holders where service holders are the domination.
2. The account holders are receiving services for the time between 1-3 years is the dominating numbers. The numbers of clients staying for more than year 3 years and less than one year are small in number.
3. The account holder generally maintain savings account. Probably the reason is that the service holders are dominant number of account holders
4. Most of the account holders think that the interest rate on savings account is reasonable compared to other bank.
5. A diverse customer has been found about whether the STD accounts interest rate is reasonable or not. Some of the respondent thinks it as reasonable while other thinks unreasonable.
6. Most of the respondent opines that the interest rate of loan in NBL is reasonable in comparison to other banks. They finds it as very attractive financing source.
7. Most of the respondent agree that the interest rate of FDR is not so attractive in comparison to others private banks. So this rate should be increased.
8. Most of the individual have NBL deposit scheme.
9. The individuals invest in deposit scheme to get future benefit plan from their scheme.
10. Many of the individual thinks that the terms and conditions of the deposits schemes are reasonable.
11. There is no sufficient ATM booth for NBL. So the ATM facility can not extent at a high rare. The clients have to rely on others ATM which costs much to them. So the performance of ATM is not so strong. NBL should install mare ATMs through out the country immediately.
12. It was found that the service of NBL power card is excellent. It is said on the sense that the power card is able provide the card holders with prompt services.
13. The respondent opines that the credit card is accepted by the authorized card merchant. Because the cost regarding with the card is low. Of course some negative opinions were found in this aspect.
14. Almost half of the customers think that the efficiency of official at front desk are excellent. Meanwhile near about 30% respondent believe that the service needs to be improved.
15. Almost 40% of the clients think that the officials respond to all complaints where as near about 30% believe that service of the bank regarding complaint needs to be improved.
16. It was found that the bank officials at cash sections are very efficient, but there are some individual feels that the bank officials should improved at cash sections.
17. Most of the individual believe that the loan sanctioning process is so time consuming as there are lot of formalities that have to be maintained before providing loans. Where as only a small portion thinks the process is fast and not time consuming.
18. Half of the respondents think that the loan officers are cooperative and helpful.
19. Most of the respondents think that the decoration of the branch is not attractive enough to provide a sense of elite ness among the minds of clients.
20. Most of the respondents think that the security facilities of NBL are not adequate enough to provide efficient services. They feel that it should be improved rapidly to ensure the security of clients’ investment.
21. Almost half of the clients think that the opening an account in NBL is very useful to them as individuals as well as organizations due to the provisions of many value –worthy facilities.

 

 Overall Findings

From results of survey, we can see that during last few years, numbers of clients of National Bank has grown rapidly, which indicates that the bank has been successful to attract clients. But there are certain factors that the bank management should look at. Customers are not happy with the interest rate of savings account as most of the competitors of National Bank Ltd. are offering higher interest rate, which attracts more clients to those banks. Respondents consider the interest rate on loan of National Bank is pretty reasonable, where as they consider the interest rate on FDR is not very attractive. Respondents strongly recommend that the bank should immediately install more ATM Booth all over the country and improve the power card services to retain old customers as well as attract potential customer and attracts clients. Most of the respondents are attracted to the deposit schemes of the National Bank as they think these schemes will be able to help them to fulfill their financial needs. Customers also expressed their concern about the lengthy process for applying and getting loan. Most of the respondents think that the security facilities of National Bank Ltd. are not adequate enough to provide efficient services. Last but not least majority of the respondents think opening account in National Bank is helpful for their business purposes as well individual purposes.

 

5.6 SWOT ANALYSIS:

By analyzing the performance of the bank, we get the following Strengths, Weaknesses, Opportunities and Threats (SWOT).

Strengths:

1.         NBL is the first generation private bank in Bangladesh.

2.         It has well reputation in the market.

3.         Not engaged in unfair business practice.

4.         Executives are highly educated and experienced.

5.         NBL allows all local remittances such as TT, DD, PO, etc. free of cost.

6.         Bank has many attractive deposit schemes.

7.         Well-furnished and Air-conditioned Banks.

8.         Efficient management practice in the Bank.

9.         Located in important commercial area.

 

Weaknesses:

1.         Officers in the junior level are not highly qualified.

2.         Absence of long-term credit.

3.         Small market shares in banking business.

4.         All the branches are not A.D. branches.

5.         Lack of promotional activities.

6.        NBL has not launched on-line banking system yet.

Opportunities:

1.         Can increase the credit scheme.

2.         Private Banks becomes more reliable to local public.

3.         Have opportunity to increase market share.

4.         Private Banks can contribute more in the economic development of our country.

5.         By doing social welfare activities it can create a good impact on public mind.

Threats:

1.         There are many competitors in the market.

2.         Govt. pressures to reduce interest rate.

3.         Banking technologies are changed.

4.         Govt. imposes tax & VAT on profit.

 

Conclusion

Concluding Remark

There are a number of nationalized and foreign banks operating their activities in Bangladesh. Among them National Bank Limited is one of the leading commercial bank.

NBL has introduced a new dimension in the field of innovative and benevolent banking in our country. The bank has successfully made a positive contribution to the economy of Bangladesh with in very short period of time. Its profit is gradually increasing. It plays a great role in collecting scattered Deposit, Loan settlement and International Trade etc. The Bank ensures quality services to the customers. For better growth and healthy economic position, it should introduce new and lucrative long-term credit schemes especially for new investors and schemes for poverty alleviation like micro credit.

I hope NBL do more work for socio-economic development besides their banking business. To keep pace with ever-changing uncertain domestic business environment and face the challenges of revised global economic scenario, the bank should be more   pro-active and responsive to introduce new marketing strategy to hold the strong position in home and abroad.

For the future planning and the successful operation in its prime goal in this current competitive environment I hope this report can provide a good guideline. I wish continuous success and healthy business portfolio of National Bank Limited (NBL), Gulshan Branch, and Dhaka.

References

 

• Annual Report – 2005, National Bank Ltd.

• Chowdhurry, Dr. T.A., An Overview of Banks and Their Services

• Reports submitted by several internship students.

• Rose, Peter S., Commercial Bank Management, McGraw-Hill Companies Inc., Boston, 1996.

• Donald R Frasher, Benton E Gup, James W. Kolari, Commercial Banking, New York, USA.

• Mannur H.G. International Economics2nd Edition, Vikas 1999.

• Personnels of NBL, Shadarghat Branch

• Manager & Vice president of NBL, Shadarghat Branch

• Web site of NBL www.nblbd.com

•  William G. Zikmund, Business Research Methods, 4^th edition