Report On Uttara Bank Limited (Part-3)

Short Term Deposit Account: The deposits held in these accounts should be payable on short time, lice in 7 days or in 30 days. The deposits may be accepted for a certain period and Head Office fixes the rate of interest from time to time. The STD interest rate in UBL is 5.5%

Nature of Accounts

UBL may open following types of accounts:

1. Individual Accounts

2. Joint Accounts

3. Proprietorship Firm Accounts

4. Partnership Concerns Accounts

5. Private Limited Companies Accounts

6. Public Limited Companies Accounts

7. Accounts of Societies, Clubs, Association etc

8. Trust Accounts

9. Accounts of Local Authorities

General procedure of opening accounts

Current Deposit Account

The account opening form of current deposit account and specimen signature card is supplied to the customers, which is filled and signed by them.

In case of individual account, an account holder signs the AOF and SSC in his / her individual capacity both under yours faithfully and specimen Signature. In case of partnership firms & proprietary concerns, it is to be signed by the persons / partners in their individual capacity under Yours Faithfully and in their official capacity under Specimen Signature. in other cases private and public limited company both signatures must be in official capacity.

ACD account holder of the bank shall introduce the new account holder. An Elite of the locality, who is well known to the banker can introduce it, official other than the staff of UBL can also introduce it.

Clear instructions with regard to operations are noted in the AOF and SSC Specially in case of death or inability of any kind in regard of the joint account holder.

The officer in charge of the Deposit Department verifies the signature of the introducer. The stamp signature verified is affixed near the signature of the introducer and the deposit officer signs over it.

Approval of the branch in charge in obtained on the Account Opening Form.

The signature of the account holder is admitted by the in charge of deposit department and signature Admitted stamp is affixed near the specimen signature of the account holder.

Particulars of the account opening form are entered in the account opened & closed register in a serial order.

The account number allotted to the new account in given on the AOF, SSC and on Cheque book requisition slip.

The customer is supplied with a pay in Slip Book and requested to deposit the money with cash officer.

Cheque is only issued after the account opening form has been completed is all respects and initial cash deposit has been made. The cheque book series is noted in the cheque requisition slip.

Particulars of the account opening form are entered in the Reference Book under alphabetical order.

Accounting opening forms are posted in a file in serial order, on the other hand, the specimen signature cards are placed in the Specimen signature card Box in numerical order.

Lastly, while issuing new cheque book signature on the cheque book requisition forms should be properly verified.

Saving Bank Deposit Account

The procedures of opening current deposit accounts are also applicable for opening the savings bank deposit accounts. There are only the following exceptions.

Use of separate Account opened & closed Register also reference book and posting files are different here.
Pay –in-Slip Book

Fixed Deposit Account:

Account opening form and specimen signature card should be given to the customer.
Voucher no. SF-12, crediting “Fixed Deposit Account” with the amount of deposit with full narration should be prepared and should be given to the deposit cash with the cash officer after recording the particulars. In case of payment by cheque, it should be attached with the credit voucher and sent to the deposit department for posting.
On receipt of the vouchers from the cash department, a fixed deposit receipt should be prepared and recorded.
To admit the signature of the account holder the stamp “Signature Admitted” should be affixed near the specimen signature card.
The AOF, SSC, the voucher and the recording ledger should be sent to the officer in charge for signature.
Then the documents should be sent to the manager official for his/her signature on those.
The branch manager should ensure that the printer number on the deposit receipt books in use are invariable noted.
At the closing of each business day, the officer in charge should verify the total amount for which the deposit receipt has been used during the day, both from the credit vouchers and the counter foils of the various deposit receipts.

Documentation

Current Deposit Account

The following documents duly completed should be obtained from the customer at the time of opening a current deposit account of:

Individual/Joint
Partnership Firms
Proprietorship counters
Societies, Clubs, Associations

The documents are:

√ Account opening form

√ Specimen signature card Mandate for opening an individual account is obtained where a customer wants to authorize another person to operate the account

√ Certified true copies of by laws in case of societies, clubs, associations and limited companies etc.

√ Certified copies of resolution authorizing and operating of account with the bank passed by the Executive committee of the society, club or association and limited companies etc.

√ List the numbers of the executive committee, list of directors.

Partnership firms

For limited companies, corporation, autonomous bodies the following documents should be collected.

Account opening form

Specimen signature card

Memorandum and Articles of Association

Resolution of the Board of Director authorizing opening the account with the bank.

Certificate of Incorporation

Certificate of Commencement of Business

List of Directors

Act / Ordinance etc. in case of corporations/ Autonomous Bodies

Savings Bank Account

Account opening form

Specimen signature card

Mandate should be obtained in case the customer wants to authorize another person to operate the account

Fixed Deposit Account

Account opening form

Specimen signature card

Short Term Deposit Account

Form, which is used for CD account, can also be used for opening this type of account. Notice period should be noted in the special instruction column.

Transfer of Account to other Branch

An account holder can request to transfer hid/ her account by gibing the following instructions:

1) Reasons for transferring the account

2) Address at which he /she is to contacted by the transferee branch

3) The unutilized check book must be returned to the transferring branch before transferee branch before transfer of account.

At first, the approval should be verified by the manager to transfer the account. Then the specimen of the for working letter of transferee branch should be sent. After the application is received duly approved from the manager, the branch transfers the account.

Closing of an Account

To close an account, one may be requested to send an application along with the unused pages of the check book that is issued to the person. After receiving the application, the signature of the account holder should be verified and the number of unused pages of the check book should be noted. Before the account is closed the manager will approve the application. Lastly closing charge should be debited to the account.

Cheque

A cheque is a very important document. Cheque is an instrument in printed form containing an unconditional order. Signed by the account holder directing a certain person to pay certain amount of money only to or to the order of a certain person or to by barer of the instrument, a cheque is always supposed to be drawn against the funds in the person’s account in the bank.

Issue of a Cheque Book

At the time of opening an account, a person is required to sign a “Cheque Book Requisition Slip”. If the account opening form is found complete in all respects, a cheque book is issued to client, the account number is written in cash leaf of the cheque book and in it requisition slip. The name and account number of the client is also entered in the Departmental cheque books issued register against the particular cheque book series and it is also recorded in the computer. Lastly the requisition slip is preserved as voucher.

4.1.2 Cash section

Cash is one of the most important sections of general banking department because it deals cash.

Function

Receiving cash
Paying Cash
Issuing Vouchers
Keeping record

4.1.3 There are some frequent situations, such as customer of a bank needs to transfer his her fund or money to some where within the country boundary , if is really a risky thing to carry a big amount of money from on place to another so most of the time they just purchase an instrument or mean so that their fund can be transferred thorough his/ her own bank. This sort of activities is cubed under the inland Remittance. These are

Demand Draft

Telegraphic Transfer

Pay Order

These are discussed below:

Demand Draft

This is an order to pay money, drawn by one branch of a bank upon another branch of the same bank for a sum of money payable to order on demand.

Procedure of issuing D.D

Against Cash

A client is asked to complete a form. This is treated as an application as well as credit voucher for head office account. Commission charges are calculated and inserted the voucher is given to the client to deposit the cash; the cashier receives the cash and delivers the voucher to the remittance department against initials in his/her book. Draft is prepared and recorded in the Draft issued register. The amount of the draft is also protecting graphed. The draft number is written on the voucher, then the officer in charge checks and signs the draft and the other vouchers. After that a second officer gives his/her signature in the draft and also in the other vouchers. a credit voucher and head office advices are sent to the accounts department. Lastly, advices are sent to Dispatch section for onward transmission to the respective branches.

Against Cheque

The Cheque is sent for passing and collection. After the Cheque is passed, similar procedures are Explained in case of cash are adopted.

Against letter of instruction

The letter is cent to the deposit section for verification of signatures. The letter is attached with the debit voucher. After the debit voucher is passed, similar procedures as explained in case of cash are adopted.

Cancellation of D.D

On receipt of application along with the demand draft for its cancellation the signature of the applicant is verified from of original application form. The genuineness of the D.D is also examined. Before the drags is cancelled it is ascertained they no duplicate draft has been issued and the drawee branch has not paid the same earlier, the draft is cancelled by tearing out the signature there on and a note on this effect in red ink is made in the original application form. Lastly, the cancelled draft is attached with the debit voucher.

Payment of D.D

On receipt of advice from drawing branches the particulars are checked and initialed by the in-charge.

Payment in cash

First a token is issued. The dates, amount in words and figures, branch drawn upon and signatures on the drafts are checked. A stamp is affixed on the face of the draft. Particulars are recorded. The draft is sent towards the officer in-charge for cancellation, after cancellation its dent back for payment. In case of any irregularity in the draft an advice letter is sent to obtain the confirmation of the branch.

Payment in clearing

Collecting bank’s crossing, stamp and discharge are checked. Other procedures are similar with the payment is cash.

Telegraphic Transfer

In telegraphic transfer the issuing branch sends a telegraphic message of the branch at the other end to pay a certain amount of money to named payee’s account maintained with the drawee branch.

Issue of a Telegraphic Transfer

Against cash

The client is asked to complete form which is also treated as credit voucher for head office account branch concerned. A credit voucher is prepared for telegrams charges. Test of telegram is prepared and handed over to the in charge. The test is then checked, coded and tested by the in-charge. The message is typed on form in duplicate, the test in then signed by the in-charge and also by the manager. Original telegram and the confirmation are sent to the dispatch section.

Against Cheque

Commission charges are calculated and inserted. Client is advice to draw cheques, favoring the branch and deposit the same to the receiving cashier. Cashier then receives cheque and cent it to the officer in charge for passing and cancellation, the client is asked to fill up the application form, particulars are recorded, ATT number is written in the voucher and the voucher is then signed by the officer in charge. After that similar procedure is followed like the TT against cash.

Against letter of instruction

At first, the letter is sent to deposit department for verification of signature. After that the procedures are same as in the TT against cash.

Payment of T.T

Telegram is detected and test verified by the in charge and the manager. If the test does not match a telegram is sent to the concerned branch asking them to repeat the message with correct test. If the test marches, a stamp is fixed on the telegram and signed by the officer.

Advice to payee

When TT advice is received by the paying branch from the issuing branch, the advice is recorded. Then the officer in charge signs it, after the sign of the in charge, the manager signs it. Lastly, the receipt is sent of the payee.

Payment Order

Pay order is an instrument, which is issued from a certain branch of a bank and must be encased from the same branch. It is like the cash but not exactly cash, one, who is maintaining the account with UBL, can purchase a pay order. it is used for remittance purpose within the clearing area covered by the branch.

Issuing Procedure

Against Cash

At first, the client is asked to complete a form. This is treated as credit voucher. Commission is charge and a voucher is prepared crediting Income Account Commission. After receiving the voucher from the cash section duly signed by the in charge, the pay order slip is prepared according to the voucher. The number of the officer in-charge checks it and signs. After his/her sign another sign is taken form an officer as second signature.

Against Cheque

The cheque is passed. After that the procedures are same the PO against cash.

Against Letter of Instruction

The letter is sent to the deposit section for verification of signatures. Other procedures are same as the P. O against cash.

Payment of Pay Order

When a client submits a PO for payment, at first it is authenticated by comparing its particular with the records. If it matches then a seal is given. After that the records and the PO is given to the officer to verify it. If the officer finds that its OK then he/she signs it and it to the cash section for payment.

4.2.3 Clearing

When a customer of UBL presents an instrument drawn on other bank for collection, the instrument is collected through clearing house of Bangladesh Bank. Every day two houses are arranged in Bangladesh Bank. One in the evening and another in the morning. The evening house is known as return house. Everyday the instruments that are drawn go to the officer of the clearing section. He enters bank name, branch name, number and the amount through a software named “Nikash22” in the main schedule of banks. Then the officer makes a copy of it and goes to the clearing house of Bangladesh Bank. Bangladesh Bank official take the copy. Then they set off the claims of UBL on other banks.

4.3 Loan Section & Credit Section

In case of loan, the banker advances a lump sum for a certain period at an agrees rate of interest. The interest is charged for the amount the client withdraws from his/her account. The banker considers the following 5C’s before sanctioning the loan.

Character: The most valuable asset of a person which is based on the integrity and reliability of the borrower.

Capacity: This indicates the borrower’s ability to employ the funds profitability and repay the advance.

Capital: It refers to the borrower’s own funds invested in the business.

Collateral: It indicates the security offered by the borrower.

Condition: It refers to external factors that are current business situation of the country.

Functions of loan Department

The functions of loan department are as follows:

Ensuring that funds are disbursed only after compliance with terms and conditions or required documents received.
Make sure that the bank has always valid and current loan documentation.
Ensuring that the collateral security is adequate at times to support the loans.
Keeping the loan documentation under safe custody.
Monitoring the receipt of periodical receivables.
Debiting the client for all charges, interests etc.
Marinating the central liability records for all extensions of credit and balancing the totals with General Ledger.

Advance (Overdraft)

Secured overdrafts, Temporary overdraft, Cash Credit (Hypothecation), Cash Credit (Pledge) are covered in this type of advance. Overdraft is an arrangement between a banker and his client by which the later one is allowed to withdraw over and above his credit balance in the CD account up to an agreed limit, a cash credit differs from overdraft in the respect that CC is used for long term and overdraft is used for short term.

Temporary Overdraft (TOD)

Bank sometimes grant unsecured overdraft for small amounts to clients having CD account with the bank. TOD is permitted only when reliable sources of funds are available to the borrower for repayment. It is usually provided against DD, cheque etc. which have been presented for collection but not yet collected. Though these documents are not lined but these are kept in the respective departments for collection. When these are collected, the advances are realized from the proceeds of these instruments.

Secured Overdraft (SOD)

Banks permit overdraft against securities like FDR, DPS, savings certificate, word order etc, Currently, UBL issues SOD only against financial obligations. They are:

Share Certificate
FDR
ICB Unit Certificate
Savings Certificate
Wage Earners Development Bond (WEBD)
Defense Certificate

Cash Credit (Hypothecation)

The mortgage of movable property for securing loan is called hypothecation. Hypothecation is a legal transaction whereby goods are made available to the lending banker as security for a debt without transferring either the property in the goods or either possession. The banker has only equitable charge on stocks, which practically means nothing. Since the goods always remain in the physical possession of the borrower, there is much risk to the bank. So it is granted to parties of undoubted means with the highest integrity.

Cash Credit (Pledge)

Pledge is the bailment of goods as security for payment of a debt or performance of a promise. In a contract of pledge, bailer must deliver the goods pledged to the bailer cither actually or constructively. Transfer of possession is the judicial sense, is essential in the valid pledge. In case of pledge goods the bank acquire the possession of the goods or a right to hold goods until the repayment for credit with a special right to sell after due notice to the borrower in the event of non-repayment.

Advance department of Moghbazar branch deals with the following types of loans.

1) Personal Credit Scheme

2) Transport Loans

3) Loan (General)

4) House Building Loan

5) House Building Loan

6) Staff Car Loan

Required Information for Loan Sanction

Prior to loan sanction, investigation should be made about the person’s business, trade experience, dealings, assets and liabilities etc. this information should be taken from various sources. His/her account statement with others banks should also be included is this investigation, financial statements and income tax returns should be checked. Lastly, personal interview should be taken.

So, before sanctioning a loan a banker should consider the following points:

Loan Application
Trade License, Partnership Deed, Memorandum of Association.
Market Report
Study of Accounts
Financial Statement
Personal Interview
Other Bank’s confidential opinion
CIB report of Bangladesh Bank

For sending proposals to the Head office the following documents are required:

Loan application
Photograph of the borrower
Declaration of the borrower
Credit report on the borrower, which should be prepared by the branch
Limit sanction advice
Statement of stock
Documents—memorandum of deposit of title deed.

– Mutation Certificate

– Up to date pay receipt

– Legal opinion

– Valuation certificate of the property

Different types of loans are discussed below

Personal Credit Scheme

It is a personnel facility provided to the stalls of the Moghbazar branch. These loans are provided for buying necessary householder items. At first a staff applies for loan in a prescribed form. He / she affix the statement of his /her savings the statement of his/her savings account and quotation of the good from three sellers of that good. After receiving the application the authorized officer verify it. He / she prepared a credit proposal and sends it to the Credit Division of Head Office. The credit division appraises the proposal on the basis of the balances in the account, the designation of the employee. If credit division id satisfied it fixes the margin, amount of loan, mode of payment, rate of interest and instruct for obtaining other necessary documents from the staff. Credit division prepares a sanction letter mentioning all those information, after getting the letter the advance department informs the staff about that. A pay order is prepared in favor of the seller with the amount of loan and margin provided by the staff. The staff handover the pay order to the seller and gets his/her goods. The goods are hypothetic to the bank.

Loans against Transport

These types of loan are usually provided to the client who wants to start transport business, or need a transport for carrying goods. The client brings quotation from three sellers of the vehicle. License of the vehicle is made in joint name of the banker and the client. Payment is made directly to the seller through a pay order. At the payment of the loan the client becomes the only owner of the vehicle.

Loan

The purpose of this type of loan is not specific. It can be sanctioned against any kind of security. Securities can be BSB, PSP.Share certificate, WEDB, FDR etc. Here the money is directly transferred to the clients account.

Staff Car Loan

This is a personal facility provided to the higher officials of the bank. Officials of the post of A.G.M. and above can get this loan, the car is licensed in the name of the bank and staff jointly. The bank makes payment of the installment of the loan from its own fund. When the loan is fully recovered, the staff becomes the owner of the car.

House Building Loan

This type of loan is provided to the staff for building their own house; the staff must have a land to make the house. The land and the building is mortgaged to the bank. The loan is realized from the monthly salary of the staff. At the dime of sanctioning the loan the monthly salary of the staff, his/her designation, balance of his/her account etc are taken into account.

This type of loan is provided to the clients of the bank to build house. Registered mortgage of the land and building is taken from the client.

4.4 SWOT Analysis of UBL

SWOT analysis provides an opinion and adjustment whether organizations currently position is satisfactory or not.

4.4.1 Strengths

All the level of the management is solely directed to maintain a culture for the betterment of the quality of the service.
The bank has earned customer loyalty as organizational loyalty.
Skilled personals have developed professional relationships with their customers and clients, which is an emotional tie on regular business.
UBL is always trying to add new and modern equipments.
Employees are sharing good atmosphere in UBL so that it gave them reason to work efficiently and to become dedicated in banking.
UBL maintain corresponding relationship with many foreign banks so that it is an effective measure for the smooth business.
The top management officials all have had reputed of banking experience, skill and proficiency.

4.4.2. Weaknesses

The advertising and promotional activities of this bank are up to the mark.
Reference appointment is very much effective in UBL. As a result of this there are many who are only drawing salaries at the end of the month but making a minimum contribution towards the organization.
There are some officers who work hard but are not appreciated by the authority.
AIBL has not set up proper network system among branches.
A remarkable portion of the total human resources is inefficient.
The bank does not have any research and development division.

4.4.3. Opportunities

The bank can introduce more innovative and modern customer service to better survive in the competition.
They can also offer micro credit business for individual and small business.
It is high time that they should move toward the online banking operation; because some banks are already introduce the online banking operation.
Bank will be able to accommodate knowledgeable. Skilled, experience and hard working person by offering attractive remunerations and fringe benefits with nice working environment.
By expending the financial policy with credit facility customer are very much secure in business environment.

4.4.4. Threats

Central bank (Bangladesh bank) is always supervising the local and foreign banks in Bangladesh and sometimes it is hampering the normal operation of private bank.
Through the innovation working is in continuous process, but the other rival banks are copying it within the short time.
The world in advancing toward technology very fast. Though UBL taken effort to join the stream, it is not possible to complete the mission due to the poor technological infrastructure of our country.
The contemporary banks of UBL like National Bank, Dutch Bangla Bank, Prime Bank are its major rivals.
They are carrying our aggressive campaign to attract lucrative corporate client as well as big time depositor.
Local competitors can also capture a huge market share by offering similar products and services provided by the bank.

5.1 Recommendations

As per earnest observation some suggestion for the important of the situation are given below:

To attract more clients UBL has to create a marketing strategy, which will increase the total exporter-import business.
Effective and efficient initiatives are necessary to recover the default loans.
Attractive incentives package for the exporter will help to increase the exporter and accordingly if well diminish the balance of payment gap of UBL.
Long-term training very much required for the foreign exchange official.
Places, Firstly it is registered on the supplementary sheet, then it come for computer posting and lastly it comes to the section in charge for verification of the signature and for cancellation, after that it goes to the cash payment officer for final payment, for this system, the client has to frequently enquire that whether his/her check has been passed for payment or not, also it takes their valuable time, so. UBL needs to change this system and move on to a better Cheque passing system.
Due to lack of one stop service, the client of UBL ha to move on from one desk to another. Now in modern banking system, this type of movement is considered as one type of harassment.
The bank should launch new products such as auto teller machine, tele bank etc for betterment of customer services.
Strict supervision must be adopted in case of high-risk borrowers. Time to time visit the project should be done by the bank officials.

5.2 Conclusion

Banking sector being a service of Bangladesh continues to contribution to a great in the economy of Bangladesh, Uttara Bank Ltd. Is one of the leading banking services of the country.

I also think that there is bright future waiting for the Uttara Bank Ltd. Another thing I have to mention here that the UBL is going through he oath in which they need to go and as like today it will bring more and welfare oriented activities in the banking sector in the years to come.