Introduction : Modern banks play an important role in the economic development of a country. Commercial banks are the primary contributors to the economy of a country. Commercial banks are profit making institutions that holds the deposits of individuals and business. As banks are profit earning concerns, they collect deposit at the lowest possible cost and provide loans and advances at higher cost. The differences between two are the profit for the bank. The banks also role plays the human resources development. Banking is service oriented organization. Efficacy of customer service is related with progressive operation. According to the operational activities this report wills describe the scenarios based on the three months internship program in the Uttara Bank Ltd. Kalabagan branch.
1.1 Objectives of the Study
- To Describe and understand general Banking activities of Uttara Bank Ltd.
- To identify problem Related with general Banking Activities of Kalabagan Branch Ltd.
- To make some Recommendation to overcome the problems.
1.2Methodology of the Study
The methodology of the report includes direct observation, oral communication with the employees of all departments of Uttara Bank Ltd Kalabagan Branch, studying files, circulars etc and as well as practical experience. This report is basically qualitative in nature. This information of this report has been collected from two sources:
- 1. Primary Sources of Data
- Face to face conservation with (3) three officers out of (15) fifteen officers.
- Assigned work of those officers.
- 2. Secondary Sources of Data
- Annual report of UBL 2006 and 2007.
- Materials and document of UBL, Kalabagan Branch.
1.4 Method of Data collection
- Face to face conversation.
1.5 Sampling Method
- Convenience Sampling
3. Introduction
General Banking is the heart of all banking business of activities. Total banking activities start with this department. General Banking is the department where this money is collected. In my orientation, at first I was observed this department. General Banking specially deals with account opening, remittance, cash and remittance in this department. I would like to discuss the duties of these desks and some important things related to these departments or sections.
- Account opening
- Cash Department
- Mail receive and dispatch section
- Bills and Clearing Department.
- Remittance Department
3.1 Overall Function of UBL
This is a picture of a commercial bank. It creates surplus deposits by giving low interest and provides loans, taking comparatively high interest. The differentiable interest rates between these two activities are the earnings of commercial banks.
The overall banking of UBL consists of following types of banking activities such as
- Ø Accepting deposit
- Ø Lending of money
- Ø Agency service
- Ø General utility service
1. Accepting Deposit
- Ø Current deposit
- Ø Fixed deposit
- Ø Saving deposit
2. Lending money
- Ø Overdraft
- Ø Loan Account
- Ø Collection of bill
- Ø Correspondence and representative
- Agency service:
3.2. General utility services:
- Ø Issue of letters of credit
- Ø Travelers cheques
- Ø Accepting valuable for safe custody
Now we are going to discuss about the General Banking system of UBL
Classification of Bank Account
Basically bank has two types of deposit, these are
- Ø Demand Deposit
- Ø Time Deposit
3.3 Account Opening Section
Introduction
Desk-1 is engaged in account opening and closing tasks. In Uttara Bank Kalabagan branch. One staff officer is engaged in this task. Computer is used to operate the account information. Following is the job descriptions of desk-1 and some important discussion regarding this desk.
Job Descriptions
1. Opening different types of account.
2. Handling operation of different types of accounts.
3. Responsible for issuing if cheque books.
4. Transferring &closing different types of accounts.
5. Opening & operating PSS and MIS accounts.
6. Giving account statements to the clients.
7. Giving Tele banking services.
8. Making different vouchers regarding above transactions.
9. Giving support to the valued clients of the Bank.
Types of Deposit Accounts
Uttara Bank Ltd. account deposits are following accounts
1) Current Deposit
2) Savings Bank Deposit
3) Special Term Deposit
4) Fixed Deposit
5) Any other Deposit, as may be instructed by Head Office.
3.4 Kinds of Account Holders
Uttara Bank Ltd. open accounts of the following categories of depositors:
1. Individuals
Individual are adult persons of 18 years age or more are competent to enter into contracts. For example a person of below 18 years age is not an adult person. Adult persons include married or unmarried woman, pardanashin woman, and illiterate persons. However, lunatics, persons of unsound mind, and bankrupts are not adult persons.
2. Joint Accounts
More then one adults jointly or adult with minor may constitute join accounts.
3. Sole Proprietorships Concerns
A business or trading concern owned by a single person is sole proprietorship concern.
4. Partnership Firms
A business concern owned and managed by more then one persons which may be registered or net registered) a partnership firm. Persons who have entered into partnership with one another are called individually ‘partners’ and collectively ‘firm’ and the name under which their business is carried on is called the firm’s name.
5. Private Limited Company
A body corporate formed and registered under Company Act, 1994 with limited members and liability having Certificate of Incorporation given by Registrar, Join Stock Companies and Memorandum of Association and Articles of Association.
6. Public Limited Company
A body corporate formed & registered under Company Act, 1994 with limited liability of the shareholders and with no upper ceiling of shareholding having both certificate of incorporation and certificate of commencement given by registrar’ Joint Stock Companies, It must have Memorandum of Association and Article of Association. Corporations, autonomous bodies are organizations created by special acts of the parliament or by the Presidential Order.
7. Trusts
Trusts are created by trust deed in accordance with the law. Trusts are given control of an estate, usually of the deceased for the benefit of certain persons who are called benefit of certain persons who are called beneficiary.
8 Liquidators
Liquidators are appointed by court of law for companies going into liquidation.
9. Executors/Administrators
Executors are appointed by a deceased himself before his death by WILL to settle the accounts of the person after his death. Administrators are appointed by court of law in the absence of the deceased’s WILL.
10. Club/Association/Society
These are organizations created & registered are not registered under Societies Registration Act or Company Act or the Co-operative societies Act.
1l. Co-Operatives
These are registered under Societies Registration Act or Companies Act or the Co-operative societies Act.
12. Non-Government Organization
Non-Govt. Organizations (NGOs) are registered under society’s registration act or Co-operative societies Act.
3.5 Operational Nature of Accounts
Current Deposit Accounts
1) A current account may be opened by any individual, firm, company, club, association, body, corporation,
2) Current Deposit Account shall be opened with a minimum of TK.1000.
3) No current account will be opened with a cheque.
4) Fund in the current deposit account shall be payable on demand.
5) Minimum balance to be maintained in current account is TK.1000.
6) If the minimum balance falls below TK.1000 incidental charges of TK. 50 will be realized half yearly from the account holder.
7) No interest is payable on the balance of current account.
8) The Bank may at its discretion without assigning any reason be able to stop issuance of new cheque book to a customer.
9) The Bank at its discretion may realize maximum of TK. 5 (five) for each cheque drawn on Bank but returned for insufficient balance.
10) The bank reserves the right to close any current account with prior notice.
11) In case of closure of current account, TK.25 is being realized from the account holder.
3.6 Documents for opening an account
- 1. The following documents duty completed shall be obtained from the customer at the time of opening of the Current Deposit Account of Individual, Joint, Partnership Concerns, Societies, Clubs, and Associations etc.
A) Current Deposit Account or Saving Bank Deposit Account Opening form is used for opening of the account according to the choice of customer and/or convenience.
B) Specimen Signature Card in duplicate.
C) Mandate or authority from for operating on an Individual, Proprietorship is to be obtained if a customer wants to authorize another person to operate an account on his behalf.
D) Certified copy of by-laws/rules and regulations/constitutions in case of Societies, Clubs, Associations and Limited Companies etc. and in case of Corporations and Autonomous Bodies. Acts/Ordinance etc. shall have to be obtained.
F) Autonomous Bodies.
I.) Account Opening Form
II. Specimen Signature Card
III. Memorandum of Association and Article of association.
IV. Resolution of the Board of Directors authorizing opening of the account with the Bank.
V. Certificate of incorporation in case of both public and private Ltd. Companies (original is returned to the party and the copies to be attached with the Account Opening Form.)
VI. Certificate of Commencement in case of public limited companies only (original is
Returned to the party and copies are to be attached with the Account Opening Form.)
VII. List of the Directors
3.7 Savings Bank Deposit Accounts
1) Saving Bank Account may be opened in the name of adult individual or jointly in the name of adult individual or jointly in the names of two or more persons payable either, both or all of them or to the survivor or survivors.
2) Account may be opened in the names of Clubs, Associations and Similar Institutions.
3) Calculation of interest at the rate prescribed by H.O. will be made for each calendar month up to a maximum balance of TK. 10, 00000.00 (Ten) Lac taka.
4) No interest will be calculated and paid to the credit balance of an account from the date of death of the account holder if such death terminates the relationship or the contract between the account holder and the Banker.
5) No savings account shall be allowed to be overdrawn.
6) Bank received the right to stop the issuance of new cheque book or any from to the customer.
7) Savings Bank Account must not be allowed to be conducted as Current Account.
8) In the event of closing an account within 3 months of its opening, the account holder wilt be charged TK. 50 to cover the cost of servicing the account during the period. For usual closure, the charges will be TK. 25.
9) Customers are required to inform the Bank immediately of the loss of passbook or cheque. Non- reporting of such loss will constitute negligence on the part of the account holder and the Bank shall never be responsible for any loss of the concerned account caused by ‘fraud, forgery.
10) Every change of address should be intimated to the Bank.
11) Bank reserves the right to close any account without assigning any reason.
12) Notice of stop payment of any cheque will be made by the account holder in written, which will be recorded. But the Bank may not accept any responsibility if it is overlooked.
13) The bank may accept ‘Standing Instruction’ from the account holder to make periodical payment to Insurance Companies, Clubs, and Societies etc. against payment of prescribed service charge.
14) For non-maintenance of minimum balance of TK. 100 the Bank may charge TK. 10 to the account holder. For issuance of duplicate passbook, the bank will charge TK.10.
15) For issuance of duplicate passbook, the bank will charge TK. 10.
3.8 Documents for opening an account
For opening Saving Bank accounts, following document s are necessary:
a) Account opening form
b) Specimen Signature card.
c) Mandate or authority shall be obtained in case the customer wants to authorize another person to operate on the account.
3.9 Special Notice Deposit Account (SND/STD)
1) Special Notice Deposit Accounts popularly known as STD are opened usually by Corporations bank and Financial institutions.
2) These deposits holders are able to withdrawn on 7 to 29 days notice by the account holder. Withdraws are allowed after the expiry of notice period.
3) Interest on such deposits are payable at the rate determined the H.O from time to time.
4) Interest shall be calculated on daily product basis.
3.10 Documents for opening an account
Short Term Deposit Account shall be opened in the Account Opening Forms, used for Current Deposit Account on the top of which the word “special Notice Deposit Account” shall be written in Block Letters and the Notice period shall be noted on the Special instruction Column,
3.11 Fixed Deposit
1) Fixed deposits are neither transferable nor negotiable.
2) Fixed deposits may be opened by one adult individual signature or by more then one adult individual can signatures jointly.
3) FDR may be opened in the name of minor jointly with the guardian.
4) These deposits shall be opened for a fixed period ranging from three months to three years or maturity.
5) Interest on FDR will paid at the rate fixed by H.O. from time to time, depending on the period of maturity.
6) Interest on FDR will be payable only after the maturity of the FDR alone with the principal.
7) Customer may have the option of withdrawing interest accrued every six months or maturity leave the interest with the principal to be compounded provided that the FDR is for more than one year.
8) Interest ceases to accrue on overdue FDR after the expiry of the fixed period. However interest may be paid as H.O. circular.
9) Payment of FDR will be made on demand after the expiry of the maturity period on presentation of FDR duly discharged by the depositor.
10) The FDR may be paid before the expiry of the maturity period at the request of the party. For payment of interest, bank follows the circular of H.O. in this regard.
11) If payment of FDR in the names of two or more persons is demanded before the maturity by one of the depositors, consent of the other depositor must be obtained even if it is marked “either or survivor”.
12) Duplicate FDR may be issued if requested by the customer only on procurement of the Indemnity Bond. However, if FDR is in joint names, Indemnity Bond from all the depositors is to be obtained.
13) If a FDR is issued in the name of an unmarried lady, after her marriage the surname of the lady may be changed.
14) If an FDR is issued to one individual, at his request, another name may be added to the FDR.
15) If FDR is in joint names and request for adding another name, comes from one of the
depositors, such change cannot be made without the consent of all other depositors.
16) On death of the depositors, bank may allow the name of one or more legal heirs or legal representatives to be added jointly or individually.
Such deposits can be held jointly in the names of all the heirs or its amount may be split according to law of inheritance. In such cases if the original term of the deposits is not reduced, it will not be considered as renewal of the deposit.
17) Each time FDR is opened, it shall be considered as a separate contract.
18) Various deposits in the name of the same depositor or in the names of the members of the same family shall not be treated as one deposit.
3.12 Documents for opening a Fixed Deposit account
a) Application from for FDR
b) Specimen Signature Card.
3.13 Cash Department
Introduction
Cash department is mainly engaged with cash receipt and cash payment. In Uttara Bank Kalabagan branch there are number of employees in this section. This department is under the General Banking Department. There is also another officer who is engaged with canceling and verifying the cheque .There is three cash officer in this department. There is a compute officer who is mainly engaged with posting the cheques. Computer is used for posting the transaction. One cash officer is engaged with payments with amount and another two officers receives the money.
3.14 Job Descriptions
In charge of Cash & Computer Department
1. Providing the jobs cash & computer section as over all in charge.
2. Keeping keys of vault and iron safe as joint custodian.
3. Processing of voucher of cash receipt & cash payment.
4. Cancellation of cheques up to TK.100000/- singly and above TK.100000/- jointly.
5. Checking and rechecking of computer posting of all payment & receipt vouchers, including cheque requisition slip.
6. Maintaining standing instruction and stop payment register.
7. Ensuring collection of withdrawal notice against SB account & verification of signature there of.
8. Supervising cash remittance to & from Kalabagan Branch.
9. Supervising the preparation of parties statement as per there request & dispatching
10. Distributing statement of accounts to the parties on monthly basis.
11. Checking of daily cash receipt and payment register.
12. Verifying signature against cheque book requisition.
3.15 Receipt and Payment of Cash
Receipt of Cash
-in-Slip to the Deposit Department and Credit Vouchers to the respective department to 01. Pay-in-Slip or Credit Voucher filled in by the customer or department is given to the cash counter for depositing cash.
02. Cash Receiving Officer shall check the title of account, its number, amount in words and figure in the Pay-in-slip and Credit Voucher.
03. After receiving the cash, Receiving Officer will record the denominations of the Currency on the back of the voucher and enter the particulars in the Cash Receiving Book under progressive serial number. He will put his signature affixing the date stamp both in counter folio and Pay-in-Slip/voucher and he will pass on the same along with the Register to the Officer-in-charge of Cash Department for his signature.
04. Officer-in-charge of Cash Department detaches Pay-in-Slip from the counter folio and returns it along with the Register to Receiving Officer and retains the Pay-in-Slip/Credit Voucher.
05. Officer-in-Charge will send the Pay which it relates.
06. Manger or Authorized Officer will check and sign the book at cash closing time.
Receiving Officer totals the amounts entered in the Cash Receiving Book at the close of the business and he is agreed with the total of actual cash received.
Cash Receipt after Banking Hours
01. Cash receipt later or in the evening shift is taken in the next day’s date.
02. Procedure for receipt in same as explained in the fore going paragraphs.
03. Cash so received and balanced are put separately in the safe of the strong room.
3.16 Payment of Cash
01. Cheques, Demand Drafts, Pay Order, Pay Slip, Mail Transfer Receipts, Telegraphic Transfer Receipts and Debit Cash Vouchers etc. are received from the customers and various departments for encashment.
02. The instruments are checked for any apparent discrepancy, posting and cancellation.
03. Specimen Signature of cancellation Officer should be made available with the paying officer.
04. Cash is counted and denominations of notes are written on the reverse of the instrument.
05. Signature of the bearer is obtained on the reverse of the instrument.
06. Cash is paid to the bearer of the {instrument}.
07. Stamp is affixed on the face of the instrument and signed by the Paying Officer.
08. Particulars are of the instrument are entered in Paying Cash Book.
09. Paid instruments kept with the Paying Officer,
10. At the close of business, the amounts entered in the Paying Cash Book are totaled.
The total is agreed with the amount paid.
11. The total is written in words and figures.
12. Entries in the Register are initialed by the officer and the Register is returned to the
Department concerned.
13. The instruments are returned to the bearer of the instruments.
3.17 Payment of Cash after Banking Hours
01. The practice of payment of instrument after banking hours is to be exercised very special case and only in case of very good customers.
02. The instrument is posted in the Ledger Book in the next day’s date and cancelled as usual before payment is made.
03. Payment is made only to the drawer in case of cheques or the 1st payee in case of Demand draft, Telegraphic Report etc.
Customer Service Department and Establishment
Introduction
This department deals with employees’ salary, many types of internal expenses such as Purchases of pen, paper, equipment, machinery and payment of labor cost and employee conveyance. Also this department deals with opening & encashment of FDR. Calculating and balancing FDR. This department also issues Pratirokha Sanchay Patra. Many services are also delivered from this department. In case of leave of absence employee collects prescribed form from this department. In Uttara Bank Kalabagan Branch, this department is maintained by two officers. One deal with Desk-1 and the other one deal with Desk-2.
3.18 Job Descriptions
01. Opening & encashment of FDR, BCD, NFCD A/C, calculating and balancing FDR.
02. Preparing statement of FDR, BCD & NFCD.
03. Corresponding with Bangladesh Bank, Head Office and different organization.
04. Issuing PSP (Protirokha Sanchay Patra).
Desk-2
01, Opening and closing Locker-Maintaining flies and Registers of Locker,
02. Preparing vouchers related to Locker rents.
03. Corresponding with Locker clients.
04. Holding keys of Locker vault door, grill door & non-rented Looker chambers.
05. Preparing monthly salary, salary and P.F. statement.
06. Preparing vouchers related to establishments, bills & different types of expense
3.19 Clearing and Remittance Department
Introduction
The main objective of clearing and remittance department is to provide an extra facility to the customer other than cash receipt and payment. They are dividing this department into two parts. One is Clearing & Transfer Delivery section, and the other one is Local Remittance section, in Uttara Bank Kalabaqgan Branch. I am trying to present my findings in the following parts regarding these two sections.
Clearing & Transfer Delivery
Inward Clearing
01. The instruments drawn on Uttara Bank Ltd. is received from other Banks in the Clearing House by the representing branch of the Bank.
02. The amount and number of instruments received are entered in the House Book from the main schedules of respective banks.
03. The amount of instruments delivered, received and difference is written in a slip is provided in the Clearing House and the Slip is returned.
04. The instruments with schedule are arranged branch wise.
05. A copy of each schedule is detached.
06. The amount of each schedule received is entered in the House ages of the respective branches.
07. The respective House pages are totaled and the total of each is noted on a Slip and a grand total is taken out.
08. The grand total is agreed with the total of the House Book.
09. The instruments are sent to the respective branches with Slip showing total amount and number of instruments.
10. The instruments are sent to the branches concerned for clearance along with the IBDA with the total amount of the instruments.
11. The House pages along with the duplicate schedules’ are filed.
12. Particulars of the instruments are compared with the schedule and the Slip and the schedules are detached (Receipt of instruments in the Branches),
13. The instruments are sent to the respective departments and the schedules are filed.
3.20 Outward Clearing
01 the instrument and the voucher are entered in the Outgoing Clearing Register.
10. Serial number is given on each voucher.
11. The Register is balanced; the vouchers are separated from the instruments and
released after lodgment to the respective departments against acknowledgement in the
Register.
12. The instruments are arranged bank-branch-wise.
13. The Sub-Main-Schedules are prepared in duplicate, two copies of which are attached with the relative instruments.
14. The grand total of the schedules is taken and agreed with that of the Register.
15. The House Page is prepared in duplicate.
16. The UBL . The instruments drawn on other banks are received duly entered in the Pay-in-Slip or voucher.
02. The instruments are checked and compared with the particulars noted in the Pay-in-Slip and its counter folio.
03. In case an Order instrument is being deposited in second payee’s account, guarantee is obtained from the second payee on the reverse of the instruments,
04. In case the payee’s name on the specially crossed instrument differs slightly from that of the depositor, the instrument may be accepted but only from the customer’s well known to the Bank and after obtaining an Indemnity which is attached to the Pay-in- Slip.
05. Proper stamp(s) is/are affixed on the instruments and on Pay-in-Slip and the counter folio.
06. The instrument is suitably endorsed / discharged.
07. The instrument along with the Pay-in-Slip is sent to the In-charge for checking and signature.
08. The instrument and Pay-in-Slip are detached from the counter folio which is handed over to the customer.
09. The particulars of General A/C Clearing House representing branch is debited with the amount of the instruments and IBDA is sent to that branch and the party’s account is credited.
17. The instruments with the schedules are sent to the branch representing to the Clearing House.
18. The instrument is received in the manner similar to that explained in foregoing parties.
19. The instruments with schedules are received from the branches.
20. The instruments with schedules are rearranged bank-branch-wise.
21. The branches are entered in the Outward Clearing Register.
22. The Main Schedule of each Bank is prepared and total amount of the respective sub-
main-schedules are entered thereon.
23. The House Page is prepared in duplicate, and total is balanced with that of the
Register.
24. The instruments with schedules received from the branches are sent to the Clearing House.
25. The instruments are delivered to the respective Banks.
3.21 Inward Transfer Delivery
For payment of bills presented to a particular branch of the Bank through another branch of the Bank, the procedures are the same as those applicable to Inward Clearing. The only exception is that there are no clearing house formalities. The concerned branches of the Bank directly deal with Inter-branch clearing.
Outward Transfer Deliveries
For collecting of Bills by a particular branch of the Bank, drawn on another branch of the Bank the procedures are the same as those applicable to Outward Clearing. The only exception is that there are no clearing house formalities. The concerned branches of the Bank directly deal with Inter-branch clearing.
Local Remittance
Sending money from one place to another place for the customer is another important service of banks. And this service is an important part of country’s payment system. For this service, people, especially businessmen can transfer funds from one place to another place very quickly.
There are five kinds of techniques for remitting money from one pace to another place. These ‘ are:
1. Demand Draft
2. Pay Order
3. Telegraphic Transfer
4. Telephone Transfer
5. Mail Transfer – Time consuming and not frequently used
3.22 Accounts Department
Introduction
Accounts Department is observably an autonomous and unique department, which works as the composition of all other departments of the branch, but it is under the In-Charge of the General Banking in this branch. This section in this branch is fully computerized. So the conventional large ledger and journal books are not kept like the nationalized banks, in Uttara Bank Kalabagan Branch, there is one officer working in this department: This department receives the vouchers from all departments and prepares the subsidiaries and maintains accounts.
Job Descriptions
GB in-charge is also the in-charge of Accounts Department. Followings are the duties of GB in charge as the in-charge of Accounts Department.
In-charge of Accounts Department
1. Checking of General Ledger
2. Preparation of statements, such as –
Weekly
(a)Calculation of interest of UBL Bank Gen. A/C
(b)Statement of weekly position of Deposit (Input-I, Input-2 etc)
Monthly
(a) Statement of SBS-1
(b)Statement of Sector Corporation
(c) Statement of Affairs
(d)Statement of Sundry Deposit Sundry Creditors A/C
(e)Statement of Suspense A/C. Sundry Debtors A/C
(f) Statement of Income and Expenses Analysis (Profit-Loss)
Quarterly
(a) Statement of Small Deposit up to Tk. 25,000/-.
(b)Statement of size-wise and interest wise break-up of deposit.
(c) Statement of Sbs-2
Yearly
(a)Processing and forwarding annual closing statement to H.O.
(b) Supervision of all other working related to Accounts Department.Officer Grade-1
1. Handling transfer of voucher.
2. Preparation of Supplementary.
3, Prepared the Daily position.
4. Posting in General Ledger.
5. UBL Gen. A/C. Ledger posting.
6. Voucher counting & posting.
7. Preparation of Extract,
8. Preparation of weekly position.
Officer Grade-2
1. Posting on General Ledger.
2. IFIC Gen. A/C. Ledger posting.
3. Preparation of Extract.
4. Prepared the Supplementary.
5, Prepared the Daily position.
6, Handling Transfer Register,
7. Handling Subsidiary Ledger.
3.23 Books Maintained by this Department
Daily Position It shows the daily position of the branch.
Clean Cash It records all cash transaction of the day under different head.
Extract It keeps the vouchers from different department along with their summary sheet.
General Ledger There is different heads of the general ledger which are prescribed by the head office and the accounts are maintained through those heads.
Statement of Affairs It is the balance sheet of the concern under periodic accounting system. It shows the daily profit of the concern along with the asset and liability of the respective day.
3.24 Rates of Interest on Deposit and Lending
In my orientation period, the branch received the circular 836, issued by Head office regarding revised interest rate on Deposit & Lending As approved by the Board of Directors the Management has further revised the rate of interest on the following categories of advances, which will effect from 1st February 2006.
A. Deposit
Types of Deposit Rate of Interest
1. SB Account 6.50%
2. STD Account 5.50%
3. Fixed Deposit
a) 3 month & above but less than 6 month 8.25%
b) 6 month & above but less than 1 year 8.50%
c) 1 month & above but less than 2 year 9.00%
d) 2 month & above but less than 3 year 9.25%
e) 3 years 9.50%
No FDR be accepted issued beyond 3 years
B. Lending
Working capital
a) Jute 14.50%
b) Other 13.50% to 15.00%
Export
a) P.C. against export of raw jute 7.00% (Fixed)
b) O.D. against export of leather produces 7.00% (Fixed)
c) O.D. against export of Categories of lending Rate of Interest
1. Agriculture
a) Crop Loan 10.00%
b) Agro-based Industries 10.00%
Large Medium Scale Industries 15.00%
other commodities 7.00% (Fixed)
Categories of lending Rate of Interest
Others Commercial lending
a) Jute trading 14.50%
b) Fertilizer trading 13.50 to 15.00%
c) Other trading 13.50 to 15.00%
Small and cottage Industries 13.50 to 15.00%
Others
a) Housing
b) Residential 14.50%
c) Commercial 14.50%
b) Transport 14.50% to 15.00%
c) Cold storage 14.50% to 15.00%
d) Brick field 14.50% to 15.00%
e) Loan against work order 14.50% to 15.00%
f) Loan against D.R 2% above the rate allowed on
FDR
g) Loan against DPS 15.00%
h) Loan against WEDB & Unit certificate 14.50%
i) Loan against Surrendered value of life
Insurance of policy 15.00%
j) Special Program
# Consumer loan 15.00%
# Personal loan 15.00%
# Small business 15.00%
# House repair renovation loan 14.00%
3.25 Bank Guarantee
A contract of guarantee has been defined under section 126 of the contract Act as “a contract of performing a promise or discharging the liability of a third party incase of his/her default. The person giving the guarantee is called “security” and the person on whose account the guarantee is given is called the “principle debtor” and the beneficiary of the guarantee is called the “creditor”.
Meaning
Issuance of a bank guarantee on behalf of the client’s is a common banking service rendered by a commercial bank. Guarantees are expressed commitment to make a good of any financial loss the beneficiary of the guarantee may sustain when the party named in the guarantee on whose account i.e. the principal debtor, guarantee is issued, fails to perform the contract and or discharge his /her obligation under the guarantee. In this situation to give financial help it is the responsibility of the bank to pay the money to the beneficiary or creditor of the guarantee according to the agreement.
Purposes
In keeping with the ever increasing business need of its client’s bank may be required to issue guarantee against advance payment, in the shape of bid bonds, performance bond, investment bank and guarantee and the like.
Classification
It may be three types
For payment of the creditor or the principal debtor by the guarantor.
For payment of price of goods sold.
Fidelity guarantees i.e. to discharge liability of a person for good conduct of a service holder.
Precaution
Before the issuance, the sample of the guarantee should be thoroughly examined to identify the problem. The extent of the liability should be clearly defined. It also should be ascertained before issuance of the guarantee whether the client would need further credit facility to enable him/her to discharge his/her obligation under the proposed guarantee. Possibilities of such eventuality should be examined very carefully before issuing guarantee.
Duration
Normally bank issues guarantee for a period not exceeding one year at different percentages of margin and security determined on the basis to the banker –customer relationship and the nature of liability undertaken may be issued basis on the security aspect.
3.26 How to guarantee is revoked
By notice for revocation –will be effective only for the transaction after receipt of the receipt of the notice, but not for the transaction already entered into before receipt of notice.
Death of surety – automatically revoked for future transaction after death
After surety’s liability is discharged.
When surety is discharged
Notice for revocation –for future transaction only.
Death of surety – for future transaction only.
Variation in the contract – if done without surety’s consent.
Release or discharge of the principal debtor
Application
When customers are interested to take the guarantee the manager should ask for submission of the following papers
A written request specifying the purpose , amount ,period, and the security offered with supporting peppers
The details of the security other than cash margin
Specimen of the guarantee. incase a prescribed specimen doesn’t exist, a specimen may be drafted to suit the requirement incorporating the amount , tenor and purpose with bank’s obligation
Bangladesh Bank Rule
As per directive of central bank, enforce, besides margin fixed on the basis of banker customer relation, the uncovered portion of the guarantee is to be got covered by readily realizable security
Findings and analysis
- More employees:
The Kalabagan branch is am over staffed branch .The number of employees of this branch is more than its requirement.
- Customer services are not well:
Although they try to provide well services but they can not satisfy their customers. Lack of technological knowledge is the main reason of their failure. Sometimes some clients are found who can not write but bank employees are not cordial to them. So the customers express their dissatisfactions.
- Laciness of computer skills:
There is no person in the branch who knows the computer well. Small problems in computers which are not properly solved create major problems. Especially it happens for money gram process.
- Tuesday like holiday:
Previously I mentioned that the Kalabagan branch is a market–based branch. Tuesday is the holiday for Kalabagan
CBA affected:
Three employees of the Kalabagan Branch are involved with CBA politics. Some times it creates problem because they are not available when needed
- No desk for interns:
There is no desk for the intern in the Kalabagan branch. So there is less opportunity for the trainee’s to learn.
No paying for interns:
The UBL doesn’t pay for interns.
Conclusions
Uttara Bank Limited has started their journey in the year of 1964, named as Eastern Bank Corporation. They already have passed 44years in banking. They had to struggle a lot against the different economic, social, climatic and political unpleasant environments. So they have huge experiences about the overall environment of Bangladesh .For this reason, they are comfortably doing their banking activities..
Uttara Bank limited plays a significant role in various fields of the economy, such as industry, trade and commerce, transportation, and deposit mobilization etc. They have a great contribution to the agricultural development of our country which is the most important for us. The bank also plays a crucial role in human resources development and creating new employment opportunities. It also under takes various social welfare activities for the betterment of the society and in this context; the bank has established the Uttara Bank Foundation. It has managed the employment for a large number of people in our country. It is another great contribution to the country.
Recommendations
I suggest the following guidelines for the UBL Kalabagan Branch
Reduce the number of employees:
The bank should transfer the number of employee to that is surplus to get the proper output from their employee.
Increase the computer skill:
To increase the computer skills of employees, the bank should provide training. Though they have knowledge about computer but it is not enough. So bank should provide training to their employees to make them efficient in computer.
Ensure the smart personnel:
It is market-based branch so clients gathering are more and most of the customers are businessmen, so to deal with this type of customers the bank needs smart, knowledgeable and intellectual personnel’s to provide the best services.
Working environment for the employee:
Compare with other the private banks’ the working environment of this Branch is not satisfactory. So, UBL should develop working environment and good relationships amongst employees
Provide internship desk:
This branch is renowned for the internship. So bank should provide the internship desks.
Provide remuneration for the internship:
The UBL should provide some remuneration for their interns.
