Loans and Advances of Pubali Bank Limited
Nawabpur Branch Dhaka.
Sonjoy Kumar Ghosh
MBA Program 2004 (6th
Roll No. 327 (Sl No. 222)
Stream: Strategic & International Management
Department of Management Studies
Faculty of Business Studies
University of Dhaka
Department of Management Studies
University of Dhaka.
February 15, 2007.
The Internship Supervisor
Department of Management Studies
University of Dhaka
Subject: Solicitation for Acceptance of the Internship
I have the pleasure to submit an elaborate internship
report, one of the most important requirements for the
MBA program. I was assigned to work at Pubali Bank
Limited-Nawabpur Branch, where I have observed closely
& studied different practical aspects of the banking
institution. I would like to say has been a great
experienced for me to work in Pubali Bank Limited, which
I have given my utmost effort to reflect experience, skill
and knowledge, which I acquired at the time of orientation
in Bank through this report. All of my efforts will be
successful if the report can serve its purpose.
Sonjoy Kumar Ghosh
MBA Program (Major in SIM)
Roll No. 327, Serial no.222
Department of Management Studies
Faculty of Business Studies
University of Dhaka
First of all I would like to thank Almighty God because I
have completed my study in due time. Then I also give
thanks to my honorable Supervisor, Mrs.Rubina Maleque,
for providing me the necessary direction to do the study on
the topic. I also grateful to Mr. Shym Sundar Banik,
Manager of Pubali Bank Limited Nawabpur Branch,I also
greatful to Partho Protim Acharzo,Senior Officer of Pubali
Bank Limited, Nawabpur Branch, and the other officials
of Pubali Bank Limited, Nawabpur Branch, for their
co-operation in completing my internship and by providing
important information and different materials.
Sonjoy Kumar Ghosh
MBA Program (Major in SIM)
Roll No. 327
Faculty of Business Studies
Department of Management Studies
University of Dhaka.
I Sonjoy Kumar Ghosh, hereby declared that the presented
report of internship named “Internship report on Loans and
Advances of Pubali Bank Limited” is prepared by me after
successfully completion of 3 months work in Pubali Bank
Limited, Nawabpur Branch, Dhaka.
I also conform that the report is only prepared to meet my
academic requirement not for any other purpose. It will not
act anything that will hamper Bank’s confidentiality and
interests. It might not be use with the interest of opposite
bodies of Pubali Bank Limited.
Sonjoy Kumar Ghosh
Experience In Pubali Bank Limited As An InternOne of the modern concepts of economics is financial development. All over the world the financial development has started with the commercial Banking system and the diffusion or scriptural money through the economy. At the very initial stages of financial development of any country, commercial banks play a major role providing financial services to the economy. Banking studies are divided into two categories, they are Theoretical & practical. Co-ordination of theory and practical subjects in the field of Banking studies gets due importance at this moment when the whole are taking preparation to enter into a new Millennium. But in spite of this, we find a gap existing between Theory & practical knowledge. To minimize this gap between Theory & practices, MBA program of Dhaka University has introduced practical orientation in different Banks. It is believed that it brings the students concerned with this program closer to practical area of Financial Institution and projection of knowledge.
To fulfill this objective, I have prepared an Internships Report on "Loans & Advances of Pubali Bank Limited”, Nawabpur Branch. During this period, I have gathered various types of banking knowledge from banking experts of respective Bank and tried to apply my academic knowledge as well as personal competence to the best. I have also tried my best to cover all the significant dimension of the topic assigned.
I along with other 10 students go to the Pubali Bank Limited head office situated at Motijheeel and reported to the Senior Officer of Pubali Bank Limited. The Pubali Bank Limited authority cordially received us.
Then each of us was sent to the different branches of Pubali Bank Limited on 10th Octobor, 2006. I was placed in Pubali Bank Limited Nawabpur Branch for field study from 10th Octobor ’06 to 10th January 2007. I reported to Mr. Shym Sundar Banik, Managing Director of the said Branch and briefed something about his branch and promised me to give any kind of information needed. Then I have started to observe the activities held on that branch and I have found the following major functions:
1. General Banking
Various types of deposit A/C, Transfer, Works of Cash Section, Subsidiary Register Day Book, Clean Cash, General Ledger, Remittance (P/O, DD, MT, TT) Bills Department, Clearing House, Pubali Bank Limited General A/C etc.
2. Loans and Advances
General Advances, Industrial loan, rural & micro credit etc.
Concerned officers of the branch showed and discuss with me about General Banking.
Concerned officers of the Investment Section of the Branch showed the various files and discussed with me how to provide Loan to the Prospective sector of the country.
of the vital parts of MBA program is internship program. At
the end academic course work one need to compete the internship
to gain practical knowledge to have an experience of
implementation of acquired theoretical knowledge. However, at
the end of my MBA course work I was placed in Pubali Bank
Limited at Nawabpur Branch, the largest commercial bank of the
country. During my internship period I have studied almost all the
section of the branch. General banking sector, Loans and advance
Section etc. At the end of my three months internship, I have
gained a thorough knowledge about all of those.
Pubali Bank started its journey as the largest public commercial
bank with a great hope and aspiration. But now it is a private Bank.
Still this bank controls a significant portion of all banking
transactions. With the up gradation of technology the bank is also
trying to keep pace.
This report intends to give a comprehensive view of the bank. It
consists of seven parts. First part consists of introduction and
Banking . Third part consists of Organizational overview of Pubali
Bank Limited. Forth part deals with general banking. Fifth part
involves loans and advances. Sixth part involves papers to be
submitted to get a loan and finally seventh part consists conclusion
Letter of transmittal
Experience as an Intern
Chapter I: Introduction of the Report
1.1. Background of the study
1.2. Justification of the report
1.3. Schedule of internship
1.4. Objective of the study
1.5. Methodology of the study
1.6. The flow chart of the study
1.7. Sources of data
1.8Limitation of the study 6
Chapter II: A Brief History of Banking
2.2. Evolution of the World Bank
2.3. Emergence of Modern Banking
2.4. Bank Development in Bangladesh
Chapter III: Overview of Pubali Bank Limited
3.1. History of Pubali Bank Limited
3.2. Performance of Pubali Bank Limited
3.3. Organizational structure of Pubali Bank
3.4. Managerial Hierarchy of Pubali Bank
3.5. Corporate Branches of Pubali Bank
Chapter IV: General Banking Services of Pubali Bank Limited
4.1. Account Opening
4.2. Types of Deposit Account
4.3. Operation of Cheques
4.4. Transfer of Account
4.5. Dormant Account
4.6. In-operative Account
4.7. Closing of an Account
4.8. Bank Remittance(DD/MT/TT&PO)
4.9. Suspense and Sundry Deposit Account
Local Short Credit
4.13.Short Credit 41
4.14.Demand Draft Received for Collect 42
Chapter V: Loans and Advances
5.2. Classification of General Advances
5.3. Credit Policy of Pubali Bank Limited
5.4. Interest Rate Policy
5.5. Total Credit Line
5.7. Principles of General Advances
5.8. Industrial Credit Department
Chapter VI: Papers to be Submitted to Get a Loan
6.1. For Fresh/New Proposal
6.2. For Renewal/ Enhancement Proposal
6.4. Credit Proposal & Approval Form
Chapter VII: Conclusion
7.1. Problem Findings
7.2. Policy Guidelines/Recommendations
7.3. Concluding Remarks
INTRODUCTION OF THE REPORT
1.1 Background of the study
In the age of globalization, the importance of banking sector is beyond description. Banking sector is going ahead with the improvement new technological innovation. Introduction of modern technology has made banking sector user friendly and more competitive. The banks of Bangladesh are not lag behind. The banks of Bangladesh are keeping pace. To survive in the financial market and to play significant role both technological implementation and skill manpower are accessory in which Department of Management Studies of D.U. is playing a significant role. By providing skilled manpower, Department of Management Studies ahs given the banking sector a momentum. And the internship program has made the effective. By studying at the University of Dhaka, one gains an extensive theoretical knowledge and the internship program makes that knowledge effective. Theoretical knowledge has a great value but without having theoretical knowledge it might be vain. In this regard, the internship program is fulfilling the lacking of practical knowledge of the graduates of Department of Management Studies. After completing the internship program the graduates become more effective in that particular field.
1.2 Justification of the Report
Due to market economy the competition among nationalized, foreign and private commercial banks and the expectation of the customers become rapidly growing concerning the banking operation & how customer service becomes more attractive. Reciprocating the sentiment, commercial banks are trying to elevate their traditional service to a better standard, to meet the challenging needs. Side by side, these banks have now concentrated their
their existence. Under the above circumstances, it has become necessary for Pubali Bank, a leading commercial bank, to focus its' attention towards the improvement of the customer service through its' multi-purposeful activities. That is why it is quite justified to make an in-depth study about its operation and evaluate service provided by this bank and scope for its' improvement. This is the exploratory study that evaluates the functions of Pubali Bank. The study may help formulating policy regarding the ideas relating to the feelings of the customers & bankers. Now it is hoped that it may have some significance to Pubali Bank and those who want to develop Pubali Bank.
Since financial area is my preferred area to build up my career, this study will vehemently help me to go forward and improve my career path.
1.3 Schedule of Internship
On the very first day at the Pubali Bank, I was welcomed by the Managing Director of Nawabpur Branch, Mr. Shym Sundar Banik. I was assigned for practical orientation at Nawabpur Branch of Pubali Bank. During my practical orientation, I was guided by Mr. Shajhan Mahmood, SPO, of the branch. He gave me some direction in choosing, schedule or orientation at various departments of the branch; I started with General Banking Department. The schedule, although not water-tight has given below:
Date of Orientation (2006) Departments
10 Octobor ’06- 25November ‘06 General Banking 26November’06-10 January ‘07 Loans & Advances
1.4 Objective of the Study:
Application of theoretical knowledge in the practical field.
Understand the real management situation and try to suggest for improving existing problems.
To analyze the financing system of the Bank to find out if the Bank has any field to improve upon and to have greater contribution towards country's economy.
To examine the profitability and productivity of the Bank.
To acquire knowledge about the every day banking operation of Pubali Bank.
1.5 Methodology of the Study
While conducting the study, sources were explored for primary information and data. But hardly any updated data could be found. In the absence of updated information or data dependence on secondary data has been inevitable. However, whenever possible primary data has been used. Data were also collected by interviewing the responsible officers and from some documents & statements printed by the Pubali Bank. Pubali Bank also helped me in collecting data providing books and Bank’s annual report.
1.6 The flow chart of the Study
a) Official records of Pubali Bank b) Face to face conversation
SECONDARY SOURCES a) Annual report b) Working papers c) Office files d) Selected Books e) Printed forms PLANNING
DESIGNING THE LAY OUT QUESTIONNAIRE DEVELOMENT COMMUNICATING THE APPROACH
-THE LITERATUREREVIEW -THEORIETICAL CONSIDERATION METHODOLOGY COLLECTING INFORMATION ANALYZING
PREPARING THE REPORT
SUBMISSION OF THE REPORT
1.7 Sources of Data
The following sources have been used for the purpose of gathering and collecting data as required.
a) Official records of Pubali Bank b) Face to face conversion
Secondary Data a) Annual report b) Working papers c) Office files d) Selected Books e) Printed forms
1.8 Limitation of the study
Although I have obtained wholehearted Co-operation from employee of Pubali Bank Nawabpur Branch, they were extremely busy. So they were not able to give much time as they and I would like. Besides, total duration of internship is not sufficient to give me more than a superficial idea of the functioning of the various departments I was rotated through. On they way of my study, I have faced the following problems which may be termed as the limitation/short coming of the study. These are as follows:
a) The main constraint of the study was insufficiency information, which is required for the study.
b) Since the Bank personnel are very busy with their activities, as a result they failed to co-operate with me to complete this report.
c) The major limitation of the study was shorter time period. For an analytical purpose, adequate time is required. But I was not given adequate time to prepare such as in-depth study.
d) Such a study was carried out by me for the first time. So, in-experience is one of the main factors that constituted the limitation of the study.
A BRIEF HISTORY OF BANKING
.A bank is one, who in the ordinary course of his business receives money, which he repays by honoring cheques of persons from whom or on whose account he receives it. Banks deal mainly with money and credit. They purchase and sell money and credit.
2.2. Evolution of the Word “Bank”:
Etymology deals with the roots and origin of the word ‘bank’. According to some writers the word bank derived from the word BANCO, BANCUS, BANQUE, and BANC, all of which mean bench upon which the early bankers used to display their coins and transact business in the market place.
According to the some other writers the word ‘bank’ has been derived from the German word ‘BANKE’ which means a joint stock fund. Banking in the ancient times was largely confined to money changing and money lending.
2.3. Emergence of Modern Banking:
In middle Europe the bankers of Lombardy were very famous. They planted the seed of modern banking in England. Among those prominent bankers we can named one who were famous not only in banking but also in political history in Europe. These Lombardy people were very much disturbed in 13’s by internecine work that was followed by plunder by Kaiser Frederick two. Lombardy people in large number as a result started migrating to more settled countries such as England, French, and Belgium.
2.4. Bank Development in Bangladesh:
During Mughal period, indigenous banking flourished. The Subarna bank the bullion trading community used to do banking in the then Bengal. At the British time banking in the form of agency house, exchanging house started to flourish in kolkata., especially in the wake of the swadeshi movement. In 1947 after the separation of Bengal, bank business faced a severe disaster as non-Muslim bankers migrated to India. In order to rebuild the bank business State bank of Pakistan was established as a central bank of Pakistan in 1948. In 1971 Bangladesh became independent. After liberation “Bangladesh bank was automated with the asset and liabilities of former “State bank of Pakistan”. There were several banks before independence of Bangladesh as follows:
(1) The national bank of Pakistan (2) The bank of Vowalpur ltd. (3) The premier bank ltd. (4) The Habib bank ltd. (5) The commerce bank ltd. (6) The united bank ltd. (7) The union bank ltd.
(9) The standard bank ltd. (10) The Australasia bank ltd. (11) The eastern mercantile bank ltd. (12) The eastern banking corporation ltd.
Bangladesh Bank nationalization Order promulgated on 26 March in 1972. After the liberation war the above 1st three banks were converted to The
Sonali Bank, The 2nd two banks were converted to The Agrani Bank, the next two banks were converted to The Janata Bank, the next three banks were converted to The Rupali Bank, the next one bank was converted to The
Pubali Bank and the last bank was converted to The Uttara Bank.
ORGANIZATIONAL OVERVIEW OF
PUBALI BANK LIMITED
ORGANIZATIONAL OVERVIEW OF PUBALI BANK LIMITED
3.1 History Of Pubali Bank LImited
PUBALI BANK LIMITED is the largest
Commercial Bank in Private Sector in
Bangladesh. It provides mass banking services to the customers through its branch network all over the country. This Bank has been playing a vital role in socio-economic, industrial and
development as well as in the overall economic development of the country since its inception through savings mobilization and investment of funds. During the last 5 years the growth rate of bank's earnings is more than 25% on average.
The Bank was initially emerged in the Banking scenario of the then East Pakistan as Eastern Mercantile Bank Limited at the initiative of some Bangalee enterpreneurs in the year 1959 under Bank Companies Act 1913 . After independence of Bangladesh in 1972 this Bank was nationalised as per policy of the Government and renamed as Pubali Bank. Subsequently due to changed circumstances this Bank was denationalized in the year 1983 as a private bank and renamed as Pubali Bank Limited. The Government
liabilities of the Pubali Bank to the Pubali Bank Limited. Since then Pubali Bank Limited has been rendering all sorts of Commercial Banking services as the largest bank in private sector through its branch network all over the country.
3.2 Performance of Pubali Bank Limited:
The authorized capital and Paid up Capital of the Bank stood at Tk.5000.00 million and Tk.400.00 million respectively in 2005. Out of total 7591 Shareholders, 4 nationalized institutions including the Govt.of the People's Republic of Bangladesh held shares of Tk. 11.72 million. The remaining shares of Tk.388.28 million were held by various institutions and individuals.
Statutory and Other Reserves:
During the previous year the statutory reserve and other reserve of the bank stood at Tk.2107.76 million, out of which statutory reserve was Tk.1250.12 million, other reserve was Tk.857.64 million. During the year under review the total reserve stood at Tk,2481.21 million at the end of the year due to increase of general reserve by Tk.573.45 million from current year's profit.
The total deposit at the end of the previous year was Tk. 39789.70million.During the year under review the amount stood at Tk. 44443.03 million which was 11.69% higher than the position of the Previous year.
Borrowing from other Banks:
The borrowing from other Bank, for the business purpose, was Tk.320.20 million as on 31.12.2005.Such borrowing during the previous year was Tk.131.62 million.
Foreign Exchange Business:
Earning from call Loan:
Due to active participation in the inter Bank money market ,total earning from call loan during the year amounted to Tk.429.28 million which was high by Tk. 142.83 million over the amount of previous year.
a) Import business
During the year the bank handled import business worth Tk. 26033.80 million. During the
previous year ,the amount was Tk. 18024.30 million.
b) Export business:
The Bank handled export business worth Tk. 15271.10 million during the year as against Tk.13670.50million in the previous year.
c) Inward Foreign Remittance:
Non resident Bangladeshis sent foreign exchange equivalent to Tk. 14860.30 million during the year ,which was Tk. 11753.00 million during the previous year.
Total investment of the Bank was Tk. 5742.12 million during the previous year. The sectors of investments were mainly Govt. Bonds , Treasury Bills, Approved Debenures,Shares and Debentures of Private institutions.
The total advances of the Bank during the previous year amounted to Tk. 27542.33 million which was Tk. 32639.68 million during the current year. The Bank made advances mainly in sectors such as commercial loan, import and export business, term loan to large and medium scale industries, house building loan, consumer's credit loan.
Position of Profit and Loss:
The total income and total expenditure of the Bank during the year were Tk.4435.90 million And Tk. 3063.27 million respectively resulting in a profit of Tk. 1372.63 million before making provision for bad and doubtful debts and income tax.
Branch Expansion and Modernization:
During the year under review 23 branches were shifted to new premises in more suitable places and 19 branches were refurnished and modernized.
Information Technology and Automation:
For providing quick customer service all the 350 branches of the bank have been computerized including branches situated at the remote areas like Sandwip,Mehidigonj etc. As a result , quick and better customer's service is being possible with less manpower .Bank started to develop an improved Multi user client server Architecture System Software called Pubali Integrated Banking System(PIBS) enabling to provide one stop service to its clients. The Bank entered in internet world through introduction of its web-site www.pubalibangla .com as a result , the name of pubali Bank ltd. included in world Electronic Database. To meet the demand of time Pubali Bank Ltd. has entered into ATM World.
Man- power& Training
This year, the numbers of officers and employees of the Bank stood at 5088, sixty eight on different subjects were organized at the Bank’s Training Institute and 1740 officials of different levels participated training besides these, Bank utilized the training services rendered by other training institutions.
In August 2005 a one- day National Workshop was held at Dhaka which was attended by all the 350 branch Managers, 16 Regional managers and senior executives of Head Office of the Bank. On the occasion, 18 Branch Managers were awarded for their outstanding performance.
Bank’s Audit Term audited 233 branches & offices during the year under review while inspection of all the 350 branches was conducted by Bank’s Inspection Team.
Meeting of the Board of Directors& its Committees
During the year 2005, 39 meetings of the Board of Directors were held. Policy decisions on different issues were taken in these meeting.
Appointment of Auditors
M/s. Ahmed & Co., Chartered Accountants, M/s.Syful Alam & Co. Chartered Accounts and M/s.K.M.Alam Khaleque & Co., Chartered Accounts were appointed Auditors of the bank for 2005 in the 22nd Annual General Meeting. But due to dissolution of M/.K>M.Alam Khaleque & co., the other 2(two) Chartered Account firms audited the statement of accounts with Due permission of Bangladesh Bank and Securities exchange Commission.
The Board of Directors expresses its gratitude to all Clients, Shareholders and Partners for extending support and co-operation in the activities of the Bank during the 2005.the Board of Directors thanks Government of the People’s Republic of Bangladesh and Bangladesh bank for their co-operation and guidance.
The Directors also wish to place on record the sincere appreciation and thanks for the sincere and dedicated services and co-operation extended by the officers and employees towards overall performance of the Bank during the year under review.
3.3 Organizational Structure of Pubali bank limited:
Designation in ascending order
Sl. No. Designation
1. Managing Director
2. Deputy Managing Director 3. Senior Executive Vice President 4. Executive Vice President 5. Senior Vice President 6. Vice President
7. Senior Assistant Vice President 8. Assistant Vice President 9. First Assistant Vice President 10. Senior Executive Officer 11. Executive Officer 12. Principal Officer Senior Officer 13. Management Trainee 14. Officer 15. Junior Officer Assistant Officer 16. Trainee Assistant
3.4 Managerial Hierarchy of Pubali Bank Ltd:
Board of Directors Executive Committee Managing Director
Additional Managing Director Deputy Managing Director Senior Executive Vice President Executive Vice President Senior Vice President Vice President
Senior Assistant Vice President Assistant Vice President
First Assistant Vice President Senior Executive Officer Executive Officer Principal Officer
Management Trainee Officer Junior Officer
3.5 Corporate Branches Of Pubali Bank Limited
CORPORATE BRANCHES INFORMATION Branch
Name Postal Addresss
Police Station Phone / Telex Agrabad 99, Agrabad Comm. Area Dist. - Chittagong Bangladesh Doublemooring 880 31 716388, 716409 633116 PBAGB BJ B. B. Avenue 65, B.B. Avenue Dhaka-1000 Bangladesh Motijheel 880 2 9550600 880 2 9555406 632236 PUBBA BJ C.D.A C.D.A. Building
P.O. - GPO Chittagong Dist. - Chittagong Bangladesh Doublemooring 880 31 611381, 634710 633117 PBCDA BJ Dhaka Stadium 8, D.I.T. Extension Road Lal Bhaban Dhaka-1000 Bangladesh Motijheel 880 2 9555565 632389 PBLDS BJ Foreign Exchange 24, Motijheel Comm. Area Dhaka-1000 Bangladesh Motijheel 880 2 9561858 880 2 9550952 632411 PUBFE BJ Karwan Bazar Jalalabad Bhaban
22, Karwan Bazar Dhaka-1215 Bangladesh Tejgaon 880 2 8114080 632322 PBLKR BJ Mohakhali 99, Mohakhali Comm. Area Dhaka-1212 Bangladesh Gulshan 880 2 8811044 632287 PBMKH BJ
Motijheel Sena Kallyan Bhaban 195, Motijheel Comm. Area Dhaka-1000 Bangladesh Motijheel 880 2 9551071 880 2 9550635/110 671431 PBMJL BJ Principal 26, Dilkusha Commercial Area Dhaka-1000 Bangladesh Motijheel 880 2 9557323 880 2 9552449 880 2 9557323 671528 PBLLO BJ 3.6 HIGHLIGHTS
As at 31st December(in million taka) Particulars
2001 2002 2003 2004 2005
Authorised capital 5000.00 5000.00 5000.00 5000.00 5000.00 Paid –up Capital 200.00 200.00 200.00 200.00 400.00 Reserve fund and
other Reserve 1338.29 1740.80 1931.76 2107.76 2481.21 Deposits 32291.00 33730.10 35852.60 39789.71 44443.03 Advances 23583.00 26189.50 26282.69 27542.33 32639.68 Investments 4165.80 4400.80 4938.86 5742.12 5536.84 Import Business 12573.00 10500.00 12141.30 18024.30 26033.80 Export Business 11228.00 10214.00 11648.20 13670.50 15721.10 Bridge Finance 8.40 8.30 7.90 7.80 7.29 Total Income 3660.20 3823.50 3569.30 3455.32 4435.90 Total Expenditure 2488.70 2575.70 2704.10 2830.41 3063.27 Pre-Tax Profit 626.50 724.00 345.20 244.90 1042.63 Net Profit 407.20 398.20 189.80 134.70 573.45 Total Assets 39068.30 41895.90 43502.25 46593.28 52671.44 Fixed Assets 565.60 591.30 582.60 545.40 546.48 OTHER INFORMATIONS No. of Employees 5050 4987 4983 4797 5088 No. of Shareholders 6601 6563 6506 6562 7591 No. of Branches 349 350 350 350 350 Earning per Ordinary Share(Taka) 203.61 199.11 94.92 67.65 143.36
GENERAL BANKING SERVICES OF
PUBALI BANK LIMITED
CHAPTER-4 GENERAL BANKING 4.1 Account Opening:
4.1.1 The procedures followed for Opening an Account
Account Opening Form: At first you have to fill up a form given by the respective bank where you are going to open an account. This form contains some information such as: -
a) Name of the Branch. b) Date.
c) Title of the Account. d) Special instruction. e) Name of Account folder. f) Occupation.
h) Description of initial Deposit. i) Verification of the introducer.
Specimen Signature: Specimen Signature is very important to identify the drawer. This signature is kept in a special card along with drawer's name. This card contains: -
a) Title of Accounts.
b) Specimen Signature of the guarantor of the Account. c) Allotment of Account number.
Pay in slip: It contains filling up of all the particulars of Account and Cash tendered for deposit. Voucher marked new Account.
Cheque requisition Slip: It contains: - a) Verification of Signature.
Ledger: Ledger contains:
a) Entry of Account particulars from account opening form in the ledger. b) Position of the voucher and cheque requisition slip.
c) Supervision of this posting by officer in charge Issue of Pass Book
Filling up the Account opening form in the appropriate file under custody.
4.1.2 Partnership Firm
The consent of all partners. Partnership Deed.
i. The name of the person who will authorize to operate the Account.
ii. The extent of authority given to such persons. iii. Personal Account and a Firm's Account. iv. Creation of mortgage.
v. The retirement of partner. vi. The death of partner.
vii. The insolvency/insanity of a partner
4.1.3 A Joint Stock Company
For opening a company account some documents are needed which are given below:
o Certificate of Incorporation in original along with a true copy. o Copy of Memorandum & Articles of Association certified up to date. o Certificate of Commencement of Business original along with a true
This is not required when
i. The company is private limited company.
ii. The Company is registered before the first day of April 1914 & invites the public to subscribe shares.
iii. The company is limited by Guarantee Balance Sheet and profit and loss statement. The Board Resolution
4.2 Types of Deposit A/C:
Deposit forms the life-blood of a commercial bank. If can't carry on its business only with as own capital. It accepts deposits from the customers on one side and lends it to other borrowers/ customers. By this way it earns some margin of interest, which is one of the most important remunerative sides of its business. In short we can say, bank is an intermediary, which mobilizes funds from surplus economy to deficit economy. Banks deposits can broadly be classified into the following categories:-
Demand deposit- These are repayable whenever the customer asks.
Time deposit- These are repayable after the expiry of period agreed at the time of opening the deposit account. In a Bank, the following types of accounts are opened:-
Current Account. Savings Bank Account. Fixed Deposit Account. Call Deposit Account. Deposit Pension Scheme.
It is purely a demand deposit account. There is no restriction on withdrawing money from this account. As many withdrawals are allowed the customers. It is suitable when funds are to be collected and money is to be paid away at frequent interval.
Current Account is most suitable for private individuals, traders, merchants, importers and exporters, mill and factory owners, limited company's etc. For opening of a current Account minimum deposit of Tk. 1000/- is required along with introductory reference, No interest is given the Current Account deposited money.
Savings Bank Account
This deposit is primary for small-scale savers. The main object of this account is promotion of thrift. Hence there is restriction on withdrawals in a month. Heavy withdrawals are permitted only against prior notice.
Minimum amount of Tk. 200.00 is required as initial deposit. Frequent withdrawal is not encouraged.
Normally withdrawal not allowed more than 1/4th of the balance with maximum of Tk. 1000/- in a week.
7 days notice is required for withdrawal of large amount. The rate of interest is 6.50% against S.B Account.
Fixed Deposit Account
It is popularly known as "Time Deposit". Because these deposits are not repayable on demand but they are withdrawable subject to a period of notice. The prospective fixed deposit holder is expected to till up an application from, prescribed for the purpose, stating the amount and the period of deposit. The application itself contains the rules and regulations of the deposit including the space for specimen signature.
Payment demanded before expiry of agreed date then Penalty is charged.
Introducer is not needed.
Copies of Party and 2 copies of Nominees photograph is needed. Loan is sanctioned against FDR.
Rate of Interest is varies on the period of maturity date.
Duration Rate of Interest
From 3 months and above but less than 6 months 7.5%
From 6 months and above but less than 9 months 8%
From 1 years and above but less than 2 year 8.5%
From 2 years and above but less than 3 year 9% Short Term Deposit Account
Short Term Deposit Account is same as Current Account. Here money is kept for a very short time. A notice is needed prior withdrawal of money.
• 6% interest is given for the actual period. • Notice Period is varies from 7 days to 30 days.
Call Deposit Account
Mainly opened by organization calling tender in which (the suppliers, contractors etc.) deposit requisite amount of carnets money favoring the organization-calling tenders. It is termed as Call Deposit since organization, which opens these accounts, may call withdrawal of the deposited account any time after the expiry of the tender period. No interest is allowed.
Deposit Pension Scheme
A depositor can open any Deposit Pension Account for deposit of Tk. 200/-, Tk. 300, Tk. 500/- in each month. And for this the depositor will have to deposit the specified amount of money by the 8th day of each month either in cash or in cheque. The depositor of this account can select more than one nominee for claiming the deposited money after his death.
A depositor can withdraw the total amount of deposit (Principal + Interest) at a time after a specific period of 10 or 20 years and for this he will be entitled to get Tk. 26344/- for 10 years & Tk. 1,32,920/- for 20 years, after deposit of
4.3 Operation of Cheques:
A cheque is an unconditional order in writing; Drawn on a specified Banker signed by the drawer requiring the Banker to any on demand a certain sum in money to or to the order of specified person or to the bearer and which does not order any act to be done in addition to the payment of money. Thus a cheque involves Three Parties: -
• Drawee (The Banker)
• Payer (To whom cheque is to be paid) The following Procedure in passing a cheque is observed:
The cheque receiving clerk scrutinizing the cheque as to date amounts and signature and hand over the presenter with token number which will also written at the back side of the cheque and pass to the ledger keeper after giving a seal.
The cheque will again be scrutinized by the ledger keeper who satisfies himself as to the order of the cheque and the amount that does not exceed the credit balance.
The ledger keeper then debited the amount from respective account in the ledger book and will pass to the authorized officer who satisfies himself by verifying signature of the account holder very carefully to protect any kind of fraudulence and then pass it to the cash officer for payment.
The presenter presents his token in the counter and cashier makes payment receiving the token after verifying the token given by the receiving clerk and will demand a signature to verify with the previous one.
The procedure discussed earlier is fully manual system which is totally absent Nawabpur Branch. Because, the cash payment & receipt system are fully
computerized which faster the whole customer service. And as a result, now-a day they are not maintaining their previous system and not keeping any ledger book.
4.3.1 Stopped Cheques
• The stopped cheques register will be kept by the manager or the accountant.
• Immediately on receipt of a letter or telegram to stop payment of a cheque, the time of its receipt should be noted thereon under the initial of the manager or the account.
• The ledger keeper concerned and he passing officials should be informed immediately and particulars of the cheques register under authentication or the manger or accountant. The time of receipts of the recording of the stopped cheques register being noted on the letter also under the initials of the clerk and the manager or accountant.
4.4 Transfer of Accounts:
When an account is transferred from one office to another, the account opening form etc. signed at the time of opening account and any forms or documents signed subsequently which are necessary for its proper conduct at the time of transfer, must be forwarded under cover of form, to the office to which card (s) and standing instruction if any, no exchange should be charged on such transfer. Attention is invited in this connection.
As far as possible, the fullest, information regarding the character, means standing of the constituents and the way to the account has been conducted must be given to the receiving office.
4.5 Dormant A/C:
• All Current accounts which have not been operated upon for six months should be marked in Red ink "CARE-DORMANT ACCOUNT- FIRST WITHDRAWAL TO BE REFERRED TO THE MANAGER". The ledger should be scrutinized for this purpose by a number of the supervising staff in March, June,
• All savings accounts which have not been operated upon for one year should also be marked in Red ink.
4.6 In-operative A/C:
• No withdrawal what so ever should be permitted on as in-operative account without the specific permission of the manager who will satisfy himself beyond doubt that the withdrawal in order.
• Annually on the 29th
June, the balances of all accounts, which have lying in in-operative current account for ten years, should be transferred to the unclaimed deposit A/C.
• The account opening forms, specimen signature cards, either or survivorship forms and all other documents relating to the in-operative accounts transferred to the unclaimed deposit account must be kept separately in the strong room in the personal custody of the Manger.
4.7 Closing of an Account:
A banker can close the account of his customer or justices the stoppage of the operation of the Account under following considerable circumstances: -
• Notice given by the customer himself • Death of customer
• Customer's insanity and insolvency • Order of the court.
4.8 Bank Remittance (DD/MT/TT & PO):
One of the most important aspects of the Commercial Banks is rending services to its customers. Among different services render by a Commercial Banks to its customer remittance facilities are very well known and popular to the customers. The word "Remittance" means sending of money from one place to another branch within the country. There are two types of Remittance: Inward & Outward.
The Commercial Banks Remittance facilities to its customer is to enable them to avoid risk arising out of theft or loss in carrying cash money from one place to another or making payment to some one in another places. Banks take the risk and ensure payment to the beneficiary in exchange of a little bit benefit known as Exchange or Commission.
Considering the Urgency and nature of transaction, the mode of Bank remittance may be categorized as: -
Demand Draft (DO) Mail Transfer (MT) Telegraphic Transfer (TT) Payment Order (PO)
The following register books are to be maintained for remittance concern: -
DD. MT. TT Advice Register DD Payment register Day Book TT Payment Register Book
Ex-Advice Payment Register Book
4.8.1 Demand Draft:
Demand Draft is an instruction payable on demand. It is negotiable instrument issued by the branch Bank containing an order to another branch of the same Bank to pay a certain sum of money to a certain person or order on demand. This instrument can be purchased by a customer from a particular Bank branch for himself or for beneficiary and can handed over to the purchaser for delivery to the beneficiary. The payee or beneficiary will claim the proceeds of the instrument by producing the same to the concerned paying branch. Demand Draft may be paid in cash to the payee on proper identification or the proceeds may be credited to his account. Banks issue drafts for a nominal commission. The commission depends upon the amount to be transmitted. The purchaser of the draft needs not to be a customer or account holder of the Bank. Draft can be crossed also.
Issuance of Demand Draft
While issuing demand Draft, an official must be confirmed about the existence of the Bran where the DD is to be issued or drawn as asked for by the applicant. Application on Banks prescribed form (F-117) for DD be obtained from the applicant duly filled and signed by then. Thereafter, Applicant will be asked to deposit the amount or DD and exchange Commission commuted correctly at the prescribed rate. On receipt of cash voucher will be passed and scrolled by the officers. DD will be issued and recorder to the DD issues register filling the appropriate columns. Test number (if required) is affixed on both DD and Advice as per instruction.
It is mentionable here that DD application is treated as Credit Voucher or SBG A/C (IBT A/C) and reported to HO, Recon, Division showing credit entry against contra Branch (paying Branch). For any amount of DD issued, a relative DD Advice and sent to paying branch where the Advice converted into Voucher.
The minimum exchange of demand drafts or Bank Drafts is Tk. 17/- (including VAT Tk. 2/-) for the amount of Tk. 1 to Tk. 9000. After that that exchange is charged Tk. 1.5 for each Tk. 1000/-.
Procedure of Payment
Proceeds of Demand Draft is received by the paying bank as and when it responds the relative advise on the receipt of DD Advises from different branches, the paying banker will verity the genuineness of the Advice by way of verifying the number and signature. Beside this, Drafts payable can be made without the Advice of issuing Bank and on that time the payment is called Acceptance Payment. Total amount of advice will be debited to SBG A/C and credited to Drafts payable A/C on production of Demand Draft by the beneficiary payment will be made by Debit to the account credited earlier. If the payment is to be made before receipt of the Advice, DD is paid being recorded in Ex-Advice Register by Debiting the Drafts Payable Ex-Advice A/C (DD paid without Advice). On receipt of the Advice, it will be entered into DD/MT Advice Received Register or Draft Payable Register and the amount will be credited to Drafts Payable A/C. DD paid without Advice as the case may be.
Before making payment of the DD, the branch will ascertain the genuiness of its issuance as well as the genuiness of the payee. Open Drafts may be paid on proper identification of the payee and crossed Drafts can never be paid in cash over the counter.
Cancellation of Draft
In some cases, the purchaser of the bank draft may ask the issuing branch to return the amount of DD stating its non-requirement. In these cases, the issuing Branch will obtain written application from the purchaser whose signature must be tallied with the signature obtained earlier. An amount Tk. 25/- be recovered from the purchaser as cancellation charges and will be Credited to the Commission A/C the purchaser will acknowledge receipt of the proceeds writing the words received payment by cancellation and will sign. On revenue stamp to be affixed on the revenue of the Draft. In this case, payment is made by Debit to PBG A/C and a relative cancellation advice is sent to the Issuing Branch.
4.8.2 Mail Transfer
The facility of transforming money by Mail is available to customers having some sort of an account with the Bank. The remitter deposits the amount to be transferred with small commission with the remitting Branch. It is an Advice issued by a Branch to another Branch for crediting the specified amount to the account of the payee maintained with them. It is a non-negotiable instrument and generally is not handed over to the customer rather sent through Post Office to the concerned Branch for credit to the respective amount. In some cases, proceeds of MT. may be paid to the beneficiary by issuing Payment Order (PO) if he maintains no account with that branch.
In such cases, Full Address of the beneficiary requires to be mentioned by the applicant. On that time, MT itself treated Advice as well as credit voucher also of the paying branch, no separable advice is issued by the issuing branch. On receipt of the MT genuineness is determined by means of verification of signature and test number (if any payment is made by debit to issuing branch through PBG A/C and reported to Head Office for reconciliation.
Remittance or money by Mail Transfer is relatively cheaper, quite safer and convenient. Mail Transfer is affected not only for remittances within the country but also for international remittances. MT for local transfer (say, within the area of Dhaka) a special MT register book is maintained as in the case like DD. MT normally issued from branch to branch of the same Bank. An extra document is needed for Mail Charge.
Normally the Mail is given Tk. 25/- for the amount Tk. 50,000/- and above. Below 50,000/- there is no any Mail Charge. The commission charged for MT is given below
Tk 1 up to Tk. 49,000/- Tk. 15/-
Tl. 50,000/- and above Tk. 40/-
Specimen Receipt (MT/TT)
4.8.3 Telegraphic Transfer
Telegraphic transfers are affected by telegram, telephone, or telex as desired by the remitter. Transfer of founds by telegraphic transfer is the most rapid and convenient but expensive method. For this, telegraphic need to be available in all the areas. In this case, the issuing branch sends a message telegraphically to credit the specified amount to the beneficiary through his A/C maintained with them or by issuing TT, PO, if A/C is not maintained by the beneficiary, Telegraphy message may be codes but must be tested. Paying branch will decode the TT being satisfied on the contents will make payment by debit to issuing branch entering the TT into TT Register and preparing a credit voucher for credit to the payees A/C. But, for big amount of TT or in case of any doubt, confirmation must be obtained before making payment.
Payees Name: ...
Branch Name: ...
Amount: ... Exchange...
Commission: ... Postal Charge: ...
4.8.4 Payment Order
Bank's payment order is an instrument which contains an order for payment to the paid to effect local payment whether on behalf of the Bank or its constituents. In the beginning stage, PO was issued only to effect local payments of Bank own obligations. But, at present, it is also issued to the customers which they can purchase to deposit as security money or earnests money. The Bank's payment orders are in the form of receipts and issued by joint signature of two officials. It ensures payment to the payee as the money deposited by the purchaser of O is kept in the Bank's own A/C named "Payment Order A/C". Payment of this instrument to be made from the branch it has been issued. It is not transferable and, therefore, it can only be paid to: -
• The payee on identification.
• The payee's Banker, who should certify that the amount would be credited to payee's A/C.
• A person holding the letter of authority from the payee whose signature must be authenticated by the payee.
• The purchaser by cancellation provided the original PO is surrendered by him to the Bank.
As Bank's Payment Order is not transferable, Duplicate thereof is issued to the purchaser without obtaining letter of indemnity provided they confirm in writing that the originals have been lost and that these will be returned to the Bank whenever traced.
In some cases, it may be happened that the DD is lost and reported to the concerned Branches. In this case, issuing Branch will communicate with the paying Branch and will obtain confirmation regarding non-payment of the DD & Payment Branch will exercise cautions against payment of DD including caution marking on the respective DD advice with the words "Care Reported Lost" issuing Branch will then issue a duplicate DD on obtaining of indemnity bond from the Applicant signed by two persons known to the Bank s sureties. In such case, duplicate DD be marked with the words:
Insurance of duplicate DD be noted against the entry of original one.
4.9 Suspense and Sundry Deposit A/C:
Under Bank's regulations not more than two suspense accounts shall be kept at any branch. The only accounts of this nature allowed are, therefore, suspense account for debit items and suspense account for credit items, the former being a general ledger account and the latter a current account.
Maintenance of salary Register & Preparation of salary voucher & returns, Provident Fund, Pension Found Rules, Medical Facilities, Leave Rules Records, Income Tax, T. A rules, Group Insurance. Beside this, the total branch information Targeting Profit, Achieved Profit, Total Outstanding loans and Advances etc. maintained here.
4.11 Dispatch Section:
Dispatch section is fully controlled by the Establishment Department. Any kind of letter DD, TT, MT, Cheque and Telex also are transferred and received through this section, There are two types of letter they continuously received. They are:
a) Inward (Registered/ Unregistered) letters b) Outward (Registered/ Unregistered) letters
At first recording is required whether it is Inward or Outward Registered/ Unregistered letters. Then, letters are disbursed to their respective destination. Inward letters are firstly segmented according to their different sections and after that an entry is given to the Inward Register book. For local letters which area is not far from the branch are delivered through Messengers. In such cases, firstly the entry is to be made in Dispatch register Book and then a Peon
Book is to be maintained which contains only Dispatch No... and Receiver's Address. For this, the Messenger will get Tk. 20/- as convince.
A special Register Book is to be maintained for TT, MT, DD, P/O and for Cheque another book is reserved. Stamp, Envelope which is kept under cash officer and in a small box can be inspected at any time. to meet the expense of Stamp and envelope a Dr. Voucher is needed for withdrawal money from the Branch Account. For registered letters, Vouchers are to be recorded here as document.
Local Dispatch Khata (including Peon Book). Register Dispatch Khata (For Registered Letters). Ordinary Register Khata (For Unregistered Letters). Inward Register Books.
Special Register Books for DD, MT, TT etc. and for Cheque respectively.
4.12 Local Short Credit (LSC)
If a cheque or bill comes to Pubali Bank from another branch of Pubali Bank or other than Pubali Bank outside the Clearing Area, then Pubali Bank Collects that Check from that Pubali Bank or through nearest Pubali Bank of that Bank. The collecting Pubali Bank collects by the process of LSC from other Bank and sends a TRA (Transfer Responding advice) to the payee Bank. For example, if a customer of Pubali Bank Dilkusha Corporate Branch, Dhaka, deposits a cheque of Rupali Bank Ltd., Pabna then the procedure done by the collecting Pubali Bank is as follows:
a) The cheque is first deposited through a received seal with the help of a slip.
b) The collecting bank gives a crossing with "Pubali Bank Dilkusha Corporate Branch". It indicates that the mentioned Bank is the collecting Bank.
c) Entry for outward Clearing register is given with clearing seal and giving the cheque a "S" (subsidiary) seal.
d) The cheque is then registered in SC register and a SC number is given. e) Endorsement is given like "Payee's A/C will be credited on realization. The agent of collecting branch will do as follows:
i) Entry has to be given to LSC register along with number.
ii) Then the instrument is sent to clearing for collection. For this case, the accounting procedure is
Clearing A/C of Payee Dr. Clearing Adjusting A/C Cr. iii) If the instrument is honored, then Clearing A/C of Payee Dr.
Pubali Bank General A/C Cr.
If any payment is dishonored then the Payee Branch sends a non-payment Advice to the Collecting Branch.
4.13 Short Credit
Customers deposit (cheque, drafts etc.) for collection along with deposit slip. Instruments within the range of clearing are collected through Local clearing House but for outside the clearing house ranges are collected through SC. For example, customer of Pubali Bank Dilkusha Corporate Branch, Dhaka, deposits a cheque of Pubali Bank, Pabna Branch. For this purpose, the collecting Bank Pubali bank Dilkusha Corporate Branch, Dhaka will do as follows:
i) The cheque is first deposited through a Received seal with the help of a slip.
ii) The collecting Bank gives a crossing with "Pubali Bank Dilkusha Corporate Branch". It indicates that the mentioned Bank is the
iii) Entry for forward Clearing Register is given with Clearing seal and giving the cheque a "S" (subsidiary) seal.
iv) The cheque is then registered in SC Register and a SC number is given.
v) Endorsement is given like "Payee's A/C will be credited on realization".
Accounting procedure after SC collection:
Pubali Bank General A/C Dr.
Customers A/C Cr.
Customer A/C Dr.
Commission A/C Cr.
P & T A/C Cr.
4.14 Demand Drafts received for Collect:
a) All the Inward Demand Drafts will be received by the Managers or Accountant and examine by him to ensure that there is no unreasonable gap between the dates of purchased receipt at branch. Cases of delay will be reported to the Head Office & a copy to the Regional Office of the purchase office. These will be numbered with D.D.R numbers, promptly acknowledge, entered individually in the Demand Draft received for realization register, without passing any entries.
b) Clearing cheque and cheque on the branches will be paid or returned unpaid the same day. Other Demand Drafts entered in the register will be presented or payment to the drawee through the cash department. c) On realization the proceeds together with the overdue interest, if any
Demand Draft will be credited to the purchasing offices in the Pubali Bank General Account sending Transfer Responding, Advises (TRA)
and reported to Head Office on schedule. Unpaid DDR's will be returned to the purchasing offices along with the objection Memo.
4.15 Transfer Scroll:
a) The Bank transfer scroll the object of which is to balance the transfer vouchers before the Clean Cash Book is posted will be written up by a clerk. The clerk responsible for presentation of the vouchers will enter in the transfer sheet simultaneously ant the supervising official passing the transfer vouchers will authenticate the entries.
b) All cheques and transfer vouchers will be entered in the transfer scroll sheet and numbered with their scroll number under initials of the scroll writer. All transfer vouchers, including those which are not individually entered in the transfer scroll/sheet, will be branded with the paid or received date stamp.
4.16 Clearing House
As a cheque payment order or bill come from a Bank within the range of local Clearing House then it is sent for collection through Clearing House. The Cheque may be crossed or not, if a customer of Pubali Bank deposits a cheque of another Bank which is within clearing, then Pubali Bank will Credit his Account and collect it (cheque). Though the amount is credited in the customers account but will not get the money until the cheque is honored.
Collection procedure for clearing:
i) The cheque is first deposited through a received seal with the help of a slip.
ii) The collecting Bank gives a crossing with "Pubali Bank Dilkusha Corporate Branch". It indicates that the Mentioned Bank is the Collecting Bank.
iii) Then an entry has to be given in the Outward Clearing Register along Clearing and an "S" (subsidiary) Seal.
iv) After that, the cheque has to be sent to Pubali Bank Local Office along with other cheques (if any). These sorts of vouchers are prepared for this purpose.
If the cheque is drawn on other branch of Pubali Bank within the same Clearing area then it needs be collected through inward Clearing House of Pubali Bank itself.
If the cheque is or other than Pubali Bank then the Cheque has to be sent to the Bangladesh Bank Main Clearing House through Pubali Bank Local Office clearing house.
4.17 Clear Cash Book
The clean cash book which is the abstract of cash day's transactions classified under the general ledger headings, will be compiled from the totals of the various books subsidiary to the clean cash book including the day books in which the relative vouchers have been entered in details under authentication and will be cheeked there form by unauthorized official.
Clean Cash Book is written to:
Test the arithmetical accuracy of one day transaction. Consolidate one try transaction.
Help position in the general ledger.
Test the closing cash balance of the branch.
The clean cash book writer must see before taking the total in the clean cash book from the subsidiary books/ day books that the books duly checked and authenticated by the authorized officials.
The clean cash book will be checked daily from the subsidiary registers/ day books by an authorized supervising official who will agree the entries under each head the respective registers/ day books. Bach morning the Manger will scrutinize the whole of the previous
After the daily balance all vouchers should be collected by the clean cash book writer and handed over to a supervising official who will lick them up overnight, under protection from Fire, together with all current records.
4.18 The General Ledger:
The Accounts to be kept in Branches General Ledgers are as under: Pubali Bank General Account
Fixed Deposit Account Short Term Deposit Account Fixed Deposit Interest Account Savings Bank Account
Call Deposit Account Current Account Pay Order Account Drafts Payable Account
Drafts Payable Ex-advice Account Demand Loan Account
Cash Credit Account
Foreign Bill Purchase & Negotiable Account Bill for Collection Account
Force Loan Against Back to Back L/C Account Advance Against Merchandise Account
Discount Account Interest Account Exchange Account Commission Account Charges Account Profit & Loss Account Stationery Account
Performance of General banking of this Branch is good. This is one of the profitable branch or Pubali Bank. Customer service is good. Cash section is fully computerized and free from Y2K problem and as a result money transaction occurs very quickly.