Brief Poratait of the Trust Bank Limited

BRIEF PORTRAIT OF THE BANK

OVERVIEW OF THE BANK:

Trust Bank Limited (TBL) is one of the leading private commercial Bank having a spread network of 30 branches across Bangladesh and plans to open few more branches to cover the important commercial areas in Dhaka, Chittagong, Sylhet, Khulna, Noakhali, Gazipur and other areas in 2008. The Bank, sponsored by the Army Welfare Trust (AWT), is first of its kind in the country. With a wide range of modern corporate and consumer financial products Trust Bank Limited has been operating in Bangladesh since 1999 and has achieved public confidence as a sound and stable Bank. 

Trust Bank Ltd. is a private, commercial, scheduled Bank, which obtained license from Bangladesh Bank on July 15, 1999. Presently Army Welfare Trust is the major shareholder. The authorized capital of the Bank is Taka two thousand million and paid-up capital of Taka Seven hundred million. Public shares have already been issued on July, 2008. The Bank was formally inaugurated and listed as a scheduled Bank on November 1999.

The idea of setting up a Bank by Bangladesh Army was first conceived in 1987 and on November 29, 1999 the first branch of the Trust Bank Ltd came into operation.

Composition of the Board of TBL consists of Ex-officio Directors of in-service senior Army personnel, with the Chief of Army Staff as its Chairman and the Adjutant General as its Vice-Chairman.

CORPORATE INFORMATION AT A GLANCE

  Banking License received on                                                            : 15^th July.1999

  Certificate of incorporation received on                                           : 17^th June1999

  Certificate of Commencement of business received on                   :  17^th June1999

  First branch licenses on                                                                     : 9^th August1999

  Formal inauguration on                                                                     : 29^th November

1999

  Sponsor Shareholders                                                                       : Army Welfare Trust

  Number of Branch                                                                            : 45

NATURE OF BUSINESS :

Trust Bank Ltd offers full range of banking services that includes

• Deposit banking
• Loans & advances
• Export
• Import
• Financing inland
• International remittance facilities
• Foreign Exchange transactions
• Personal
• Credit
• Consumer & Corporate Banking

The Bank offers a full scale commercial banking including

The bank has plans to invest extensively in the country’s industrial and agricultural sectors in the coming days. The bank has participated in syndicated loan agreement with other banks. Such participation would continue in the future for greater interest of the overall economy. The bank is keen to constantly improve its services to the clients and launching new & innovative products to provide better services towards fulfillment of growing demands of its customers.

VISION AND MISSION STATEMENT:

Vision:

We aim to provide financial services to meet customer expectations so that customers feel

we are always there when they need us, and can refer us to their friends with confidence.

We want to be a preferred bank of choice with a distinctive identity.

Mission:

Our mission is to make banking easy for our customers by implementing one-stop service concept and provide innovative and attractive products & services through our technology and qualified human resources. We always look out to benefit the local community through supporting entrepreneurship, social responsibility and economic development of the country.

STRENGTH AND OPPORTUNITIES OF TBL:

Strengths:

• Sponsored by Bangladesh Army, the largest and most organized group in Bangladesh.
• Well-capitalized Bank with potential to increase capital base.
• Homogenous Board of Directors.
• Computerized customer services.
• Customers’ faith as a stable dependable Bank.

Opportunities:

• Public confidence as a financially stable Bank backed by the Bangladesh Army.
• Control and monitoring of the borrowers can be handled in a more consolidated manner. Less opportunity of bad debts.
• Secured market minimizing risk factors.
• Support from sister organizations.
• More commercial branches.

 BRANCHES:

The bank now continues its operation with 45 branches across the country mainly in Dhaka, Chittagong, Comilla, Jessore, Sylhet , Bogra, Rangpur and Mymensingh. The bank has opened six new branches in the year 2008 in Sylhet, Chittagong, Feni & Dhaka. The  district wise pictorial presentation of the branches appears as follows:

Thirty branches of Trust Bank Limited are located in the following areas:

TERMS & CONDITIONS:

• Minimum deposit of Tk.1, 00,000.00 (Taka one Lac) and multiples thereof.

A person can open more than one account for any amount ( but not less than         Tk.1,00,000.00) in any Branch of the Bank.

• Interest shall be paid ( after adjusting the income tax on the interest amount & excise duty as & when recovered on deposit) immediately transferred to the link account. ‘Link Account’ means the Savings or Current  Account of the applicant of IFFD.
• In case of premature encashment the Bank shall adjust the interest, income tax and other duties (as applicable) from the principal amount.
• An account holder may encash Interest First Fixed Deposit in advance at any time (prior to maturity) by a written application and the account holder will get back the principal amount as per the following manner:
  • If the account is closed within 3 (Three) months, the account holder(s) will get back the self deposited principal amount after adjusting the paid interest and tax amount. The account holder(s) will also receive interest at the prevailing rate of Savings Account only for the fraction period.
  • If the account is closed after 3 (Three) months but before 6 (Six) months, the account holder will be entitled to get back the deposited principal amount (after adjusting the paid interest and tax amount) along with the IFFD interest for the previous completed term (i.e. 3 months) and the savings interest rate for the rest fraction period.
  • If the account is closed after 6 (Six) months but before 12 (Twelve) months, the account holder(s) will be entitled to get back the deposited principal amount (after adjusting the paid interest and tax amount) along with the IFFD interest for the previous completed term (i. e. 6 months) and the savings interest rate for the rest fraction period.
  • In case of death of a depositor, the Account will cease to be operative and the amount deposited so far shall be paid to the nominee, and in absence of nominee to the legal heirs of deceased as per rules in force and subject to comply the condition of premature encashment as given above.
  • After completing the full term or at the maturity, the account holder(s) will be entitled to get back the principal amount only.

NOTE: The effective rate would be 11.11% since the bank will pay interest at the time of opening the account.

SAVINGS CERTIFICATES:

The following Savings Certificates of different denominations are available at the Branch:

 Bangladesh Sanchayapatra (5 years)

 3 months profit based Sanchayapatra (3 years)

 Pensioner Savings Certificate (5 years)

The interest rate allowed to each category is as follows-

Bangladesh Sanchaya Patra :

The detailed break-up of interest for encashment of Bangladesh Sanchayapatra (5 years) appears as follows:

From January 01, 2005 to July 16, 2005 :

 From July 17, 2005 to December 03, 2006 :

 From December 04, 2006 to till date :

 Pensioner Sanchaya Patra:

The detailed break-up of interest for encashment of Pensioner Sanchayapatra (5 years) appears as follows:

From December 04, 2006to till date:

 Schedule of interest for every 3 months

 3 Months Profit Base Sanchaya Patra(3MPBSP) :

The detail break –up of interest for encashment of 3MPBSP appears as follows:

From December 04, 2006 till date:

 Schedule of interest for every 3 months:

 NOTE : From 1st July, 2007, 10% tax on interest income (per fiscal year) above 1,50,000 will be deducted from Sanchaya Patra of individual’s and 10% tax above Tk.3,00,000 interest income (per fiscal year) from joint Sanchaya Patra holders will be deducted at source.

OTHER SERVICES:

The other services offered by the bank exclusively on distinguishable terms and conditions. The aforesaid services are-

a)   Local Remittance- DD, TT, PO etc. & Inter Branch Transactions

b)   Locker Service

c)   Credit/debit/ VISA Card/AT

d)   Trust Tele Banking

e)   Trust SMS Banking

f)    Trust Internet Banking

g)   Visa Electron Service

h)   Visa Credit Card

i)    Passport Service

a.  Local Remittance:

Money remitted from one place to another to the help of the customers for their safety/necessity is called remittance of fund. Local remittance means remittances in local currency that are received/payment in and made out within the country.

 There are two types of Remittances:

i)  Inward Remittance

ii) Outward Remittance

Generally fund may be remitted through a bank to another by issuance of Payment Order, Demand Draft, Telegraphic Transfer and Mail Transfer. What comes in are called inward remittance and what goes out are called outward remittance. Trust Bank Ltd. Offers/issues the following Instruments to remit fund.

Demand Draft (DD):

Demand Draft is an instrument issued by a Bank Drawn on their other branch (outside the local clearing zone) with an advice/ instruction to pay of certain amount to the beneficiary on demand.

Issuance of DD:

Trust Bank follows the following procedures while issuing DD :

1. DD Application from the customer or otherwise.
2. Checking of the DD application form, amount in figure and word, name & account number of the payee and name of the drawee branch.
3. Confirm about cash deposit or cheque payment against the DD.
4. Entry in the DD issuing register and put the serial number branch wise.
5. Preparation of DD in prescribed DD instrument which must be signed by two authorized officer and test number must be putted on the DD if the amount is more than Tk.25, 000.00.
6. An inter branch credit advice (IBCA) must be issued favoring the drawee branch towards payment against the DD.

 Payment of DD:

01. After receiving DD from the client or by otherwise the banker verify the               signatures of the authorized officer of the issuing branch.

02.  The banker checks the Test Number of the DD.

03.  DD may be payable before or after receiving inter branch credit advice (IBCA)       from the issuing branch.

 Entries for Issuance of DD:

Dr: Cash in Hand/ Customer’s Account

Cr:  Payable Account – Demand Draft

Dr:  Payable account – Demand Draft

Cr:  TBL General Account.

Entries for DD payment with Advice:

Dr:  TBL General Account

Cr:  Payable Account – Demand Draft

Dr:  Payable account – Demand draft

Cr:  Cash in hand/Customer’s account/ Clearing adjustment A/C

Entries for DD Payment without Advice:

Dr:  DD Paid without Advice

Cr:  Customer’s Account/ Clearing Adjustment A/C

After receiving Inter Branch Credit Advice (IBCA) from the issuing branch:

Dr:  TBL General Account

Cr:  Payable Account – Demand Draft

Dr:  Payable Account – Demand Draft

Cr:  DD Paid without Advice.

ISSUANCE OF DUPLICATE DD:

When a Draft issued by the bank is reported to have been lost and duplicate is asked for by the purchaser the issuing bank immediately notice the drawee bank by telegram/telex/phone and enquire it is not yet paid as if so, urgently instruct them to mark caution “Stop Payment”. The manager/ dealing officer of the paying bank will personally satisfy himself that the payment against draft is still unpaid before informing the drawing officer to this effect and will himself record the fact that the draft has been reported lost on the relative advice and in the Draft Payable Register in bold letters in red ink.

When a DD has to be issued against the lost draft, a letter of indemnity is taken, this should be appropriately stamped and signed by the buyer and two sign from two witnesses are required. After obtaining these terms from the buyer, permission is taken from the Head Office. Observing all the formalities Head Office will give permission to the issuing branch, then the issuing branch will issue the same in favor of the purchaser, using the same controlling number and date carefully clearly marked “DUPLICATE IS ISSUED IN LIEU OF ORIGINAL”.

CANCELLATION OF DD:

If the purchaser of the draft wants to refund the money by cancellation, the purchaser must apply in writing to the manager along-with the draft giving reason for cancellation. The manager should be satisfied about the genuineness of the application after verifying the signature of the application with that on the reason for cancellation, he will cancel the draft by writing the word “CANCELLED” in bold letter in red ink across the face of draft and attach the cancelled draft with application.

STOP PAYMENT OF A DRAFT:

Normally the payment of a draft cannot be stopped by the bank as it goes against its own commitment in favor of a third party. However stop payment instructions can only be issued by the issuing branch in special circumstances at the request of the purchaser or payee in case of a lost or stolen draft only. In such cases extreme caution is exercised both by the issuing and the drawee branch.

TELEGRAPHIC TRANSFER (TT):  

TT is an order from the issuing branch to the drawee branch for payment of a certain amount of money to the beneficiary. The payment instruction is sent by telephone/telex and funds are paid to the beneficiary on verification of the test number through beneficiary’s account maintained with the drawee branch. It is the quickest method of transferring fund from one place to another.

 ISSUANCE OF TT:

TT Issued from Y Branch to X Branch:

a)      Receive the TT Application Form from the party or otherwise.

b)      Checking the TT Application.

c)      Receive cash at Cash Counter or Debit the require amount from party’s account.

d)     Put the number in the TT application form as per TT register.

e)      Application of test number by the authorized officer.

f)       Passing of the TT message by Telex or over Phone which is to be marked on the TT application invariably with initial of the passing officer.

Entries for Issuance of TT:

Dr:  Party’s Account or Cash or Otherwise

Cr:  TBL General Account.

Procedure for Payment of TT:

The Following procedures will be observed in paying proceeds against TT:

a)      Telephonic message will be recorded direct into the TT Payable Register. The amount is being entered in word and figures and the entries authenticated under full signature of the official verifying the check signals.

Entries will be as follows:

1. Dr: TBL General Account

Cr:  TT Payable Account

1. Dr: TT Payable Account

Cr:  Customer’s Account

b)      Whenever possible, receipt of the TT payment is advised to the payee immediately over telephone.

c)  Separate voucher in respect of each TT Payment Order is prepared crediting the amount    to TT payments orders account, the particulars of which is entered in the            TT payment                 orders account register.

 d)   TT payment orders are sent to the beneficiaries immediately in case their addressed are      advised by the remitting officers or are known to the paying branch.

e)      When a TT payment order is paid it is marked off in the TT Payable Register.

Cancellation of TT:

Sometimes bankers are requested by the applicant for cancellation of TT in writing with some reason. In such cases if the banker satisfied about the genuineness of the request after verifying the signature with the TT application form, the banker send a message by phone for cancellation of the TT urgently to protect the payment. Subsequently the banker will send a message for cancellation of TT along with IBDA for the said amount. But if the payment has been made by the drawee branch against the TT before receiving cancellation message then the banker has no liability from their part.

NOTE: Introduction of On-Line Banking in Trust Bank Ltd has reduces the use of TT in remitting/transferring fund remarkably.

PAY ORDER (PO):

Payment Order/Pay Order is an instrument in writing issued by a remitting bank to make payment of certain amount to the specific beneficiary or person. It is like as bank cheque or Manager’s cheque i.e. money guaranteed for payment. All local payment (within the same clearing zone) whether on behalf of the Bank or Bank’s constitution, will be made by means of pay orders which will be signed by two authorized bankers.

Issuance of Pay Order:

When the customers request for issuance of Pay Order, They normally apply for the same on the prescribed form mentioning name, address, telephone/mobile number of the applicant, reason of the Pay Order, name of the payee along with required money  (with commission Tk.20/= & VAT Tk.3/=) or cheques (in case of account holders) against the same. It is to be noted that Trust Bank Ltd. takes no charge from their account holders for issuance of Pay Order.

Payment of Pay Order:

The bank’s pay orders are in the form of receipt and are, therefore, not transferable. They may be paid to:

1. The payee on identification
2. The payee’s banker who should certify that the amount has been or will be placed to the payee’s credit, or
3. A person holding a letter of authority from the payee whose signature must be attested by the payee and, if the letter direct the bank to pay the money to a certain named person that person must be identified to the bank, then the payment can be made.

Entries for Issuance and Payment of Pay Order:

For Issuance of Pay Order:

Dr: cash in Hand / Customer’s Account

Cr: Bills Payable Account – Pay order

For Payment of Pay Order:

Dr: Bills Payable Account – Pay Order

Cr: TBL General A/C /Cash in Hand/Customer’s A/C / Clearing Adjustment A/C.

Cash Payment is done on the basis of:

1. Pay Order is duly released by the beneficiary.
2. Crossing stamp on the Pay Order is cancelled by two authorized officers.
3. Affixing of Revenue Stamp on the Pay Order and signed by the purchaser.
4. Verification of purchaser’s signature with the original PO issue application form.

INTER BRANCH TRANSACTIONS:

Inter Branch Transaction is made through issuance of an advice issued by a Branch to another specified Branch of the bank for debiting or crediting of specified amount from one branch to another branch. It is not handed over to the customer rather it is sent to the drawee branch through messenger/post office/courier service. The Advice is called IBCA or IBDA.

IBCA: Inter Branch Credit Advice

IBDA: Inter Branch Debit Advice

 Issuance of IBCA & IBDA:

Every branch of Trust Bank Ltd. has a branch code number through which it maintains account relationship with the Head Office, which is called TBL General Account of the branch. When a branch makes transaction with another branch, the transaction is done through Inter Branch Credit or Debit Advice (IBCA or IBDA), wherein the followings are clearly specified for effecting the inter branch transaction perfectly:-

• Name of the Originating Branch with branch Code No.
• Name of the Responding Branch with Branch Code No.
• Originating Date
• Transaction Code No.
• Reference No. (related to the transaction)
• Narration of the transaction (brief description)
• Amount of the transaction
• Signature of the Originating Officer along with another two authorizes signatures.

Responding of IBCA & IBDA:

Upon getting the IBCA or IBDA from the Originating branch, the receiving branch responds the Advice through filling-up the lower position of the advice as follows:-

Dr: TBL General A/C (of the originating branch, in case of responding an IBCA)

Cr:  Client’s A/C or the Appropriate Head of Account.

                                           Or

Cr:  TBL General A/C (of the originating branch, in case of responding an IBDA)

Dr:  Client’s A/C or the Appropriate Head of Account.

The necessary statement of General Account Transaction is forwarded to Trust Bank Ltd., Head Office on everyday basis along with the copies of the supporting advices (of Originating and Responding) for necessary reconciliation at the Head Office.

B. LOCKER SERVICE :

There are some more than 500 lockers at the Dhanmondi Branch of TBL. Of course locker services are also available in the other branches of TBL. The lockers are now rented on Security Deposit Basis instead of yearly or monthly rental Basis. The lockers are allotted on most flexible term and meager Security Deposit refundable at the time of closing the locker.

Size of Locker

Security Deposit of Locker

C ATM CARD :

The bank offers its clients “Free of Cost” ATM (Q- Cash) card. To be a holder of the Card the person needs nothing but to be a client or account holder of the bank. The bank charges no initial card processing cost or no yearly or monthly service charge. It seems to be a value added service to the clients. The card holder of the card can use it in the following banks and locations in Dhaka.

D. TRUST TELE BANKING :

Trust Bank Ltd. has introduced recently “Tele Banking” service for their account holders. To get the service customers have to fill up a prescribed application form. Bank supply a secret PIN (Personal Identification Number) Number to individual customer separately. The customers don’t need to visit the branch. Customer with a secured Personal Identification Number (PIN) & account number can retrieve account information from any phone (T&T or Mobile).The customers have the convenience of requesting the services mentioned below.

• Balance Enquiry
• Exchange Rate Enquiry
• Request for Account Statements
• Enquiry on our Products & Services
• Change of Account Address
• Renewal of Fixed Deposit
• Account Opening Assistance

CONCLUSION

Trust Bank limited pursues decentralized management polices and gives adequate work freedom to the employees. This results in less pressure for the workers and acts as a motivational tool for them, which gives them, increased encouragement and inspiration to move up the ladder of success. The profit earned by the bank is used to the welfare activities of the Trust. The economic service of the bank is open to all caste and class of people. The bank is formatting and accomplishing various welfare projects and activities for the socio economic infrastructural development of the country and the active participation to the up gradation of the comparative feeble class of the society, instead of accumulating profit. It has also been linked with many foreign banks to facilitate the foreign currency transfer by the members of armed forces working in the UN and emigrant Bangladeshi. The report is aimed at studying and understanding the various services offered by TBL to its clients. In addition, the report also studies how Trust Bank Limited has maintained growth in its general banking business by maintaining and enhancing its relationship with its clients.

BIBLIOGRAPHY

• Commercial Bank Management -by Peter S. Rose
• Bank Management & Financial Services – by Peter S. Rose & Sylvia C.Hudgins
• Annual Reports of Trust Bank Ltd. – for the Year 2005, 2006, 2007 & 2008
• Trust Bank Manual – on General Banking
• Office Circular of Trust Bank Ltd – Dated 27.06.07, Ref.TBL/HO/CR/016/07, & Dated: 15.08.07, Ref.TBL/HO/CR/017/07 .
• Auditors Reports on Trust Bank Ltd. -2003, 2004, 2005 & 2006.
• National Board of Revenue – Ref. JARABO/TAX-7/A: A: B: /04/2007/210, Dated: 05.11.2007
• BIBM Library, – Annual reports & Internship reports on Commercial Banks.
• TBL Training Institute -Synopsis.
• Annual Reports of Bangladesh Bank
• Bangladesh Bank Bulletin
• Brochure of Trust Bank Ltd.
• E-mail of Trust Bank Ltd.
• Personnel of TBL Principal Br.