Banking Activities of United Commercial Bank Limited

EXECUTIVE SUMMARY

BBA is a professional degree. To fulfill this degree Internship course  is a associate course which enable the students to gather practical experience where the student wants to make his/her carrier. My internship course was assigned at United Commercial Bank, New Eskaton Branch, under the supervision of Mr Nur Alam Siddique, Lecturer, Department of Business Administration, Stamford UniversityBangladesh. My internship was on the “THE BANKING ACTIVITIES OF UNITED COMMERCIAL BANK LIMITED FOCUSING ON LOAN AND ADVANCE”. So I have tried to analyze how they are operating their banking system. A company’s main objective is to gain more profit to benefit its stakeholders using a perfect management system. UCBL is not different from them. So my internship report refers how the bank drives its banking operation and how it benefits itself and its stakeholders.

Form the first the vision of the “United Commercial Bank Limited” is to always strive to achieve superior financial performance, be considered a leading bank by reputation and performance. UCBL is heading towards it’s destination with outstanding performance of it’s General Banking, General Advance and Foreign Exchange Department, Specially in the New Eskaton Branch General Advance Division is the most Income generating sector and is income is increasing day by day along with the profit of whole branch,

In total  period of my internship and after analyzing the data that I got from the New Eskaton Branch, the feedback that I have got that the financial soundness and management skill of United Commercial  Bank Limited is quite good but no outstanding. The performance of the bank is well in some sectors than the previous year but in some sectors the position of the bank is worsen especially at the position of the return to the stakeholders. So the management team and the top level authority and executives of the bank should become concern about the management skill of the bank which can benefit more and more to its stakeholders.

Background of the study

A commercial bank performs an imperative function in the economy.  It helps to mobilize money by a continuous procedure of borrowing and lending money. It accumulates its capital through both own sourcing and out sourcing (depositors are the major part of out sourcing). This amount is then lent to the other party. Being a ser vice industry provides various services to its customers. So, every commercial bank has to think about their customer first, because the customers are the sovereign.

This report has been prepared as the partial fulfillment of BBA program in Stamford UniversityBangladesh. To complete the BBA program successfully each participants required to undergo internship program in an organization for three months to learn practical knowledge of business activities. To accomplish the aforesaid requirement, I am assigned as an internee in United Commercial Bank Ltd, New Eskaton Branch for 3 months starting from August 01, 2010.

Objectives of the study

The objective of the report is to gather practical knowledge particularly regarding any business organization and its operations.  Theoretical classes of Bachelor of Business Administration program provides us knowledge regarding theories and models whereas internship program gives us the chance to view those systems and their operations (based on theories and models) in practice.  Apart from this broad objective we can identify the objectives of this report as follows:

• Understanding the environment, functions and management of the organization for my case it is UCBL Bank.
• Narrating experience in working in UCBL
  • To apply theoretical knowledge in the practical filed in order to formulate a problem to work on.
  • Defining and analyzing the problem.
  • To learn about banking more thoroughly.
  • To relate the theoretical knowledge with the practical content.

Methodology

I joined as an intern in UCBL Eskaton Branch on August 1, 2010. I was assigned to work under all the 3 departments within 3 months. I was allocated for 1 month for each department. I worked under each officer and learn from them directly. I frequently ask questions and obey their instructions.

Rational of the study: As my study title is “THE BANKING ACTIVITIES OF UNITED COMMERCIAL BANK LIMITED FOCUSING ON LOAN & ADVANCE”, it is clear that the scope of this study has spread over whole customers of the organization both corporate and retail. The scope of the study has been divided in two parts. One is operational scope and another is time scope. These are described   below:-

Operational Scope:   The operational scope of this study has been confined working under all the departments for 3 months.

Time Scope:  This report has accomplished with in the period of three months started from August 01, 2010.

Sources of Information:

I have elaborated different types of secondary data in my research. Sources of secondary information can be defined as follows:

Internal Sources

• Bank’s Annual Report.
• Financial Statement.
• Any information regarding the Banking sector

External Sources

•   Different books and periodicals related to the banking sector.
•   Websites.
•   Newspapers.

Data collection Method:                

As I worked over there as an Intern for about 3 months, they have allowed me to collect the information from their files, books, audit reports etc. Sometimes they have provided data verbally & I took note of that. Maximum time I retrieved data through my observation to them.

Limitation

While doing this paper, I have faced several obstacles. They were –

The website of UCBL does not contain updated information.

UCBL does not possess any Annual Report or Brochure after 2005.

I have to submit the report within short period of time.

United Commercial Bank Limited (UCBL) is one of the first generation private sector Banks in Bangladesh, commenced its commercial operations from mid 1983 and has since been able to establish one of the largest network of 100 branches in six different districts United Commercial Bank Ltd. offers all kinds of Commercial Corporate and Personal Banking services covering all segments of society within the framework of Banking Company Act and rules and regulations laid down by our central bank. Diversification of products and services include Corporate Banking, Retail Banking and Consumer Banking right from industry to agriculture, and real state to software.

UCBL New Eskaton branch is one of the branches which facilitate all kind of facilities that a Bank offers. It has General Banking, General Advance as well as Foreign Exchange Advance Department.

General Banking is the starting point of all the banking operating. It is the department, which provides day-to-day services to the customers. General Banking consists of the many sections in the branch. These are including customer service, account opening/closing, remittance, deposit department, account’s department.

General Advance provides loan and advance products to the client for financing different purpose that fulfill the requirements of the bank and have good return to the investment as well as satisfy the client. The loan and advance products are personal loan scheme, small & medium enterprise loan, working capital financing, import financing, export financing, syndicate lo an, industrial financing etc.

Foreign Exchange Department deals with import, export, and foreign remittance and post import financing. This department is playing an important role in enhancing export earnings, which aids economic growth and, in turn, will be help full for economic development.

United Commercial Bank Limited is the preferred choice in banking for friendly and personalized services, tailored solutions for business needs, global reach in trade and commerce and high yield ON investments, assuring Excellence in Banking Services.

United Commercial Bank Limited (UCBL) is a Bangladesh based financial institution that provides banking services. The services include personal and business banking, loans, credit cards, online banking and money transfer services. The bank primarily operates in Bangladesh, where it is headquartered in Dhaka.

With its firm commitment to the economic development of the country, the Bank has already made a distinct mark in the realm of Private Sector Banking thro ugh personalized service, innovative practices, dynamic approach and efficient Management. The Bank, aiming to play a leading role in the economic activities of the country, is firmly engaged in the development of trade, commerce and industry thorough a creative credit policy.

History

United Commercial Bank Limited incorporated on 26 June 1983 as a public company with limited liability under the Companies Act 1993. The bank obtained per mission to commence business with effect from 26 June 1983 and started banking operations on 29 June 1983 with an authorized capital of Tk. 100 million divided into 1 million ordinary shares of Tk. 100 each.

Mnagement

The Bank has in its Management a combination of highly skilled and eminent bankers of the country of varied experience and expertise successfully led by Mr. M. Shahjahan Bhuiyan, a dynamic banker, as its Managing Director and well educated young, energetic and dedicated officers working with missionary zeal for the growth and progress of the institution.

Corporate Information at a Glance

Hierarchy of UCBL

Products & Services

The Bank provides a broad range of financial services to its customers and corporate clients.

The Products and Services UCBL offers are:

Latest News

27^th Anniversary of UCB  

UCB celebrated its 27th Anniversary on 301th meeting of the Board of Directors. The ceremony was held at Bank’s Head Office Board Room in Gulshan Avenue. The daylong program started ceremoniously at 11:00 am. To celebrate this joyous occasion Chairman of the Bank, Mr. M. A. Hashem along with other Directors: Mr. Kazi Enamul Hoque (Vice Chairman), Hajee Yunus Ahmed (Chairman, EC), Mr. M. A. Sabur, Hajee M. A. Kalam, Mr. Shabbir Ahmed, Mr. Nur Uddin Javed, Mrs.  Sultana Rezia Begum, Mr. Riyadh Zafar Chowdhury, Mr. Tanvir Khan, Mr. Ahmed Arif Billah, Mr. Emran Ahmed, Mr. Nasim Kalam, Mr. Bazal Ahmed, Mr. Saifuzzaman Chowdhury, Mrs. Setara Begum and Mr. Nurul Islam Chowdhury were present on the occasion.

UCB is one of the oldest and leading Commercial Banks of Bangladesh in terms of its assets, deposits, profits, networks, client base and employees.  Being a first generation bank in the private sector, the Bank has been playing a vital role in the economic and social (CSR) activities of Bangladesh. At present, the Bank possesses a huge network through its 100 branches across the country. Besides, the Bank currently works with 329 correspondence covering 102 important countries in all continents of the world.

United Commercial Bank divided its branch into several departments. The departments are:

GENERAL BANKING DEPARTMENT

General Banking is the starting point of all the banking operating. General Banking department aids in taking deposits and simultaneously provides some ancillaries services. It provides those customers who come frequently and those customers who come one time in banking for enjoying ancillary ser vices. It is the department, which provides day-to-day services to the customers. Every day it receives deposits from the customers and meets their demand for cash by honoring cheques. It opens new accounts, demit funds, issue bank drafts and pay orders etc.

CASH MANAGEMENT DEPARTMENT

Cash section demonstrates liquidity strength of a Bank. It is also sensitive as it deals with liquid money. It is the most important department that is contributing to the earning of the banking terms of goodwill and customer satisfaction with their quality and prompt services. Cash department of UCB Eskaton Branch is well equipped and decorated. There is also electronic counted machine and computers with online system in this department. Balance of account can be seen with few seconds. So cash payment can be made very promptly. Transaction involving cash is called cash transactions. The cheques/ instrument / vouchers which are paid in cash over the counter are cash transactions. It has two types of services:

• Cash Receipt
• Cash Payment

Procedure of Cash Receipt

The depositor will use the prescribed deposit slip supplied by the bank to deposit cash /cheques demand draft/ pay order etc. All cash receipt voucher shall be received by the teller. Cash receipt counter performs its job as follows:

1. First checks if the deposit slip is properly filled up containing title of account, account number, date, amount in word and figures and depositors sign.
2. Cash is received by the cash receiving officer, twice counted and matched with the deposit slip and also write down the denomination of notes behind the cheque.
3. Cash receiving officer write down the amount in figure and in words ON the front side of the cheque.
4. Cash received stamp is affixed on the face of the deposit slip along with the signature of the cash receiving officer.
5. Record it in the Record Book and put scroll no in the cheque
6. Deposit slip is credited and posted in the concerned account in the system.
7. Counter folio is given to the depositor as receipt. One consolidated cash debit voucher is posted in the system to balance the cash.

Opening Balance of Cash + Receipts – Payments = Balance

The closing balance of today will be the opening balance of tomorrow. This department is one of the most important departments of the Bank. All the books maintained in this department are checked by officer.

►   Cash Insurance Limit

►   Maintenance of Cash Remittance

The In-charge of Cash Department maintains the cash remittance according to the rules of the Bank. If the cash manager thinks that the amount of money cross the limit, then he called the Principal Branch to takes the extra amount of money or vice versa. Inter Branch Credit Ad vice (IBCA) is used for such transaction.

►   On-Line Banking Operations

The UCBL has 100 branches and all transactions among the branches are done through Online. UCBL uses bamk ultimus customized software for its day to day transaction. The activities are:

• Deposit cash in any branch in any account
• Withdraw cash from any branch
• Transfer from any account to any branch

Procedure of Cash Payment

At this counter cash is paid to the customer on demand by placing a cheque over counter. Payment counters per forms its job as follows:

1. A.    Check the cheque leaf whether it is worded properly. This cheque covers Branch seal, Date (Date must be current date or 180 days earlier), amount in figure and word, and finally signature of the Drawer. We also check here whether the word “Bearer” is crossed away or the cheque is in the name of any company or firm.
2. B.     Verify the signature with the specimen signature and give verification seal and signature of the verifier.
3. C.    Check proper endorsement is given behind the check leaf in case of Check Drawn on Payees in the name of any Firm. For cheques in the name of Firm Attestation is required along with Firm’s common seal to be paid over the cash counter.
4. D.    Account is debited and then the officer cancels cheque. It is posted in the system and posting stamp and transaction number is affixed on it.
5. E.     Cheque is handed over to the cash payment officer for payment.
6. F.     Take one more receiver signature on the back of the cheque is taken from the holder to match with the first one and then cash is paid to the payee. And also write down the denomination of notes behind the check.
7. G.    Cash paid stamp is affixed on the face of the cheque. Entry is passed in the cash payment register.
8. H.    Give posting in Bank Ultimus and debit Drawer account and note the transaction no. on the top of the cheque.

Cash Book Balance

At the end of the working day cashier is responsible to maintain the cash balance book. The cash book contain the date, opening balance, detail of cash payment and received  in figures, closing balance, denomination of government notes (Currency). It is checked by manager. The consolidated figure of receipt and payment of cash is entered in the cash book and the closing balance of cash is drawn from that i.e.

ACCOUNT OPENING DEPARTMENT

Responsibility of the customer service starts with opening of new account in the name of new customer. This is the starting point of the client bank relationship. By opening an account, the bank bridge it’s customer to avail the facilities provided by the bank.

Types of Account

UCBL has several types of deposits for its customers. Like-

 Savings Bank (SB) Account

This is an interest bearing account and only individuals can open this type of accounts.

Current Deposit (CD) Account

It is popular known as Current Account. Any individual, company, firm, may open this type of account in its own name. This is non-interest bearing account.

Short Term Deposit (STD) Account

This is opened and operated for short term and for specific purpose. It is also an interest bearing account and where rate of interest is generally below the savings rate.

 Fixed Deposit Receipt (FDR) Account

Individuals, Firms, Companies, Associations may open this account. The deposit is taken for a specific fixed period of time, such as 3 months, 6months, 1-year etc.

There are few schemes UCBL is offering its customers. Such as-

•   Monthly Savings Schemes
•   Deposit Pension Scheme Plus
•   Money Multiplier
•   Money Maximize Scheme

Rates of Interest on Deposits

Formalities for Open an Account

For opening the account, the first hand requirements are-

• Application on the prescribed form
• Introduction of the applicant
• Specimen signature
• Two copies of passport size recent photograph with attested by the introducer.

At first customer service desk want to know whether the customer has introducer to open the account or not? If yes then give him/her a printed Account opening Form along with Specimen Signature Card, Customer Transaction Profile Form and Information form on Money Laundering. After that, request customer to fill up the form duly and submit the form with required documents.