General Banking Activities of IFIC Bank Limited

Major purpose of this report is to analysis General Banking Activities of IFIC Bank Limited. Report also discuss on verity of the loan and advances position of IFIC Bank. Other objectives are evaluate the investment activities and observe the current situation of the bank. Finally find out financial problems and provide recommendations for the investment of overall performance of IFIC Bank Limited.

Introduction

In Bangladesh, the number of banks in all now stands at 49, out of which 4 are nationalized commercial banks, 28 local private commercial banks, 12 foreign banks and rest 5 are development financial institute. All these banks and financial institution are under supervision & policy guidance of Bangladesh Bank.

In the backdrop of economic globalization and financial sector reforms, a group of highly successful local entrepreneurs conceived an idea of floating a commercial Bank with different outlook. For them, it was competence, excellence and consistent delivery of reliable service with superior value products.

International Finance Investment And Commerce Bank Limited (IFIC Bank) is a banking company incorporated in the People’s Republic of Bangladesh with limited liability. It was set up at the institute of the Government in 1976 as a joint venture between the Government of Bangladesh and sponsors in the private sector with the objective of working as a finance company within the country and setting up joint venture banks/financial institutions abroad. The Government held 49 per cent shares and the rest 51 per cent were held by the sponsors and general public. In 1983 when the Government allowed banks in the private sector, IFIC was converted into a full-fledged commercial bank. The Government of People’s Republic Of Bangladesh now holds 35% of the share capital of the bank. Leading industrialists of the country having vast experience in the field of trade and commerce own 34% of the share capital and the rest is held by the general public.

As a fully licensed commercial Bank, IFIC Bank Ltd. Is providing services to the clients with the help of highly skilled and dedicated workforce whose creative talents, innovative actions & competitive edge have made its position unique in giving quality service to all institution and individuals it cares for.

IFIC Bank Limited has already made significant progress within a very short period of its existence. The Bank has been graded as 4^th in the country through internationally accepted CAMEL rating. The Bank has already occupied an enviable position among its competitors after achieving success in all areas of business operation.

IFIC Bank Limited offers all kind 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 Bangladesh Bank. Diversification of products and services include Corporate Banking, Retail Banking and Consumer Banking right from industry to agriculture, and real state to software.

Objectives of the Study

The prime objectives of the orientation are:

• To study various desk works of the Malibagh Branch of IFIC Bank Limited.
• To examine general banking activities of IFIC Bank Ltd.
• To verity the loan & advances position of IFIC Bank Ltd.
• To evaluate the investment activities of IFIC Bank Ltd.
• To analyze the performance of the Branch as well as IFIC Bank limited as whole.
• To find out financial problems and provide recommendations for the investment of overall performance of IFIC Bank Ltd.
• To observe the current situation of the bank.
• The objective of the report would lead my career towards success in near future.
• To be successfully ended of my BBA program and to become a graduate as internship is the last requirement which is caring on 4 credits.

Methodology

Selection of the topic:

The topic selected for the study was chosen by me and approved by Md. Shamsul Arefin, Lecturer, Department of Business Administration, Southeast University.

Identifying data sources: Essential data sources both primary and secondary had been identified which were needed to complete and workout the study. To meet up the need of data

• Primary data are used and the study also required interviewing the officials and staffs, clients where necessary.
• Secondary data sources were files, documents, website of the bank, relevant books, etc.

Target Population:

All officers and clients of IFIC Bank Ltd, Malibagh Branch.

Population Size:

• No. of employees of this branch: 20
• No. of clients of this branch: 2500 (approximately).

Sample Size:

• No. of employees: – 12
• No. of clients: – 37

Sources of Data:

Sources of data are given below:

Primary Source

• Consolation with bank officials
• Observation the activities of different departments of IFIC Bank Ltd.
• Discussion with the supervisor
• Face-to-face conversation with the clients

Secondary Source

• Annual Reports & documents of IFIC Bank Ltd.
• Web site of IFIC Bank Ltd.

• Newspaper, journal, articles etc.
• Different Books and periodicals related to the Banking sector
• Bangladesh Bank Report.

Background of IFIC Bank Limited

International Finance Investment and Commerce Bank Limited (IFIC Bank) is banking company incorporated in the People’s Republic of Bangladesh with limited liability. It was set up at the instance of the Government in 1976 as a joint venture between the Government of Bangladesh and sponsors in the private sector with the objective of working as a finance company within the country and setting up joint venture banks/financial institutions aboard. In 1983 when the Government allowed banks in the private sector, IFIC was converted into a full fledged commercial bank. The Government of the People’s Republic of Bangladesh now holds 32.75% of the share capital of the Bank. Directors and Sponsors having vast experience in the field of trade and commerce own 8.62% of the share capital and the rest is held by the general public.

Vision

To become a leading banking institution and to play a pivotal role in the development of the country.

Mission

IFIC Bank Mission is to provide service to our clients with the help of a skilled and dedicated workforce whose creative talents, innovative actions and competitive edge make our position unique in giving quality service to all institutions and individuals that we care for.

IFIC Bank committed to the welfare and economic prosperity of the people and the community, for we drive from them our inspiration and drive for onward progress to prosperity.

IFIC Bank want to be the leader among banks in Bangladesh and make our indelible mark as an active partner in regional banking operating beyond the national boundary.

In an intensely competitive and complex financial and business environment, we particularly focus on growth and profitability of all concerned.

Joint Ventures Abroad

Bank of Maldives Limited

IFIC is the first among the banks in the private sector to have operations abroad. In 1983, the Bank set up a joint venture bank in Maldives known as ‘Bank of Maldives Limited’ (BML) at the request of the Government of the Republic of Maldives. This is the only national bank in that country having branches throughout that country. IFIC Bank managed the affairs of BML from 1983 to 1992. IFIC Bank sold its shares in 1992 to the Government of the Republic of Maldives and handed over the Management of BML to Maldives Government.

NIB Bank Ltd., Pakistan:

IFIC Bank had two branches in Pakistan, one in Karachi and the other in Lahore. Karachi Branch was opened on 26th April 1987, while Lahore Branch was opened on 23rd December 1993.

To meet the Minimum Capital Requirement (MCR) of the State Bank of Pakistan, the Overseas Branches in Pakistan have been amalgamated with a reputed leasing company in Pakistan named National Development Leasing Corporation Ltd. Therefore, the existence of our above Overseas Branches has ceased w.e.f. 2nd October 2003 and a new joint venture bank entitled NDLC – IFIC Bank Ltd. emerged in Pakistan w.e.f. 3rd October 2003. The Bank was subsequently renamed as NIB Bank Ltd. IFIC Bank presently holds 7.31% equity in the Bank.

Nepal Bangladesh Bank Ltd. (NB Bank)

Nepal Bangladesh Bank Ltd. (NB Bank), a joint venture commercial bank between IFIC Bank Ltd. and Nepal nationals, started operation with effect from June 06, 1994 in Nepal with 50% equity from IFIC Bank Ltd.

The Bank has so far opened 17 (seventeen) branches at different important locations in Nepal. IFIC Bank presently holds 25% shares in NB Bank.

Nepal Bangladesh Finance & Leasing Limited (NB Finance):

Nepal Bangladesh Finance & Leasing Co. Ltd. (subsequently renamed as Nepal Bangladesh Finance & Leasing Ltd.), another joint venture leasing company between IFIC Bank Ltd. and Nepali Nationals, started its operation on April 18, 1999 in Nepal. IFIC Bank presently holds 15% share in the company.

Oman International Exchange LLC (OIE)

Oman International Exchange LLC (OIE), a joint venture between IFIC Bank Limited and Oman nationals, was established in 1985 to facilitate remittance by Bangladeshi wage earners in Oman. IFIC Bank holds 25% shares, and the balance 75% is held by the Omani sponsors. The exchange company has a network of 10 branches covering all the major cities/towns of Oman. The operations of the branches are fully computerized having online system.

The affairs and business of the company is run and managed by the Bank under a Management Contract.

Capital and Reserves

The Bank started with an Authorized capital of Tk. 100 million in 1983. Paid up capital at that time stood at Tk. 71.50 million only. Over the last 28 years, the authorized and paid-up capital has increased substantially. The paid capital stood at Tk. 1,743,860,800 as on June 30, 2010.

The Bank has built up a strong reserve base over the years. In last 28 years its Reserves and surplus have increased overly. As against Tk. 21.20 million only in 1983 Reserve and surplus increased to Tk. 1 80,718,719 in 2010. This consistent policy of building up Reserves has enabled the Bank to maintain a better adequacy ratio as compared to others.

With the active support and guidance from the Government, the bank has been showing a steady and improved performance. In its fifteen years operation, the bank has earned the status of leading in terms of both business and goodwill.

Starting modest deposit of only 863.40 million in 1983 the Bank has closed its business with Tk. 4 9,345,354,106 of deposit as on June 30, 2010. The annual growth rate has mostly been higher compared to both banking sector growth and individual growth rates achieved by others.

Capital Adequacy:

Bank has adopted Standardized Approach (SA) for computation of capital charge for credit risk and market risk, and Basic Indicator Approach (BIA) for operational risk as per Guidelines of Bangladesh Bank. Assessment of capital adequacy is carried out in conjunction with the capital adequacy reporting to the Bangladesh Bank.

Bank has capital adequacy ratio of 10.02% as on December 2009 out of which Core Capital (Tier I) Capital Adequacy ratio is 8.22 % and Tier 2 and 3 i.e. Supplementary Capital adequacy ratio is 1.80 % against the minimum regulatory requirement of 10.00%.

Share Holding Structure:

As on December 31, 2009 total holding of shares by the sponsors and Directors of the bank is 41.37% that are allowed tradable subject to prior permission from the SEC and the rest 58.63% are in free float.

Deposit:

In 2009 up to 31st December total deposit amount is Tk. 50001.80 crore.In 31, December,2008 total deposit was Tk. 3609.22 crore, that means in 2009 total deposit is increasing 38.58% related to the 2008.For increasing this total deposit ,rate of interest of IFIC, willingness of increasing the deposit & customer satisfaction are plays  a vital role.

Deposit (Tk. In Crore)

At a glance of IFIC financial Performance of 2008&2009

Table: At a glance of IFIC

International Division

This division is responsible for monitoring and supervising the foreign exchange dealings of the bank. It performs the following functions:

• Making guidelines and frameworks for foreign dealings complying the rules of Bangladesh Bank
• Circulating instructions of Bangladesh Bank
• Maintaining correspondence with foreign banks and exchange houses with which it has exchange arrangement
• Maintaining NOSTRO accounts with banks in abroad
• Fixing and sending foreign exchange rates to Authorized Dealer (AD) branches and Bangladesh Bank.

Branch

The Bank covers by its activities all the important trading and commercial centers of the country. As on March, 30,2011 it had 96 branches within Bangladesh

Human Resources Development

Human Resources Development is focused on recruitment and in-house training for both on the job and off the job Bank staff members through the Bank’s Academy. IFIC Bank Academy – the oldest institution in the private sector – was conceived of as an in-house training center to take care of the training needs of the Bank internally.

Academy is fully equipped with a professional library, modern training aids and professional faculty. Library has about 4941 books on banking, economics, accounting, management, marketing and other related subjects.

Main training activities consist of in-depth foundation programmes for entry level Management Trainees. Specialized training programmes in the areas like general banking, advance, foreign exchange, marketing and accounts etc. are also organized by the Academy depending on need.

Frequently outreach programmes are organized to meet demand for new and specialized skills.

During its 23 years of existence, Academy not only conducted courses, workshops and seminars as required by the Bank, but it also organized training programmes for the Bank of Maldives, Nepal Bangladesh Bank Limited and Oman International Exchange LLC. In addition, Academy has also the credit of organizing system of Bank of Maldives.

In addition to conducting courses internally, The Academy also selects candidates for nomination to various courses conducted by distinguished training organizations in the country including Bangladesh Bank Training Academy and Bangladesh Institute of Bank Management.

The Academy also re-designs its courses, programmes etc, regularly to meet the requirement of new skills arising out of various directives, guidelines of the Central Bank and significant changes in the banking sector from time to time.

Total manpower stood at 2700 (Approximately) as on December 31, 2011.

Corporate Banking

IFIC Bank is providing a wide range of financial services, offering specialist advice and products to corporate clients to meet diverse demands of changing market scenario. We have expertise to customize products & services to meet specific requirements of our clients. We are committed to serve our customer with extensive branch net work all over the country to expedite our client’s business growth. We facilitate your business to face the challenges and realize opportunities, now and in the future. Our main focus is relationship based banking and understanding corporate & institutional business environments.

Our experienced Relationship Managers & their team can respond to and anticipate your needs and give you competitive business advantages. Products and services for commercial and business customers include:

• Working Capital Finance
• Project Finance
• Term Finance
• Trade Finance
• Lease Finance
• Syndication Finance

Working Capital Finance

Business Enterprises engaged in manufacturing/ trading/ service business are eligible to avail Working Capital Loan to meet day to day expenses for processing of manufacturing and selling product & services. Working capital products include both fund and non-fund based products. Fund-based working capital products include secured over draft, cash credit, packing credit, short-term loans payable on demand bank guarantees. Non-fund based products include bank guarantee, performance guarantees and bid bonds are also supporting the business of our customers.

Project Finance

IFIC Bank provides project loan to set up /BMRE of long-term infrastructure and industrial projects/ service unit on the basis of debt and equity rather than the balance sheets of project sponsors. Project financing have been recognized as an important and crucial mode of finance for a financial institution for substantial growth of its industrial credit vis-à-vis managing long term finance. Growth of project finance/Industrial credit of a developing country like Bangladesh is considered as a key parameter for transforming her dream into a mid income country group.

Hence, apart from trade and commercial finance; IFIC Bank Ltd. from the very beginning has been an active partner of the private sector in developing large and medium scale industry of the country. The Bank has been financing Term Loan (Industrial) facility for establishing new project and/or BMRE of various projects in the sectors viz. textile, garments, power, steel, telecom, pharmaceuticals, packaging, consumer products, health, CNG refueling, Real estate.

Term Finance

We are offering short term & mid term finance to you to meet emergency financial needs of our project/business.

Trade Finance

Import:

1. Letter of Credit

Business Enterprises can avail Non-funded facility for import / procurement of raw materials, machinery, equipment, merchandise item.

2. Loan against Imported Merchandize (LIM)

Business Enterprises engaged in import merchandise can avail working capital for retirement of import documents.

3. Loan against Trust Receipt

Business Enterprises engaged in import of merchandise can avail working capital for retirement of import documents.

Export:

1. Pre-shipment finance Back to Back L/C, EDF, ECC, SOD (Working Capital Finance), Packing Credit.

2. Post-shipment finance Foreign Documentary Bills Purchase, Inward Documentary Bill Purchase.

Lease Finance

Lease financing became a thrust sector for individual and small enterprise besides medium and large enterprises. IFIC Bank has been providing lease finance facility to its customer for acquisition of manufacturing and service equipments for all major industrial sectors. The facility helps the customer to have better financial flexibility under budgetary constraints and to enjoy tax benefit. IFIC offers financing vehicles/ CNG conversion/ refueling plant/ sea or river transport, capital machinery/ plat/ equipment/ lift / generator/ boiler, construction equipment/ computer for IT education center, medical equipment etc.

Syndication Finance

IFIC Bank along with other commercial banks has been financing large scale projects under syndication arrangement to raise and meet huge credit need of a company. This arrangement allows the Banks to share expertise among them and diversify its credit risks. To cater the need of leading corporate house IFIC Bank has been raising fund from the banking sector on behalf of the customer through syndication arrangement.

Retail Banking

Retail Banking is mass- banking facility for individual customers to avail banking services directly from our wide branch net work all over the country. We provide one-stop financial services to all individual customers through our innovative products & services to cater their need. With a view to provide faster and more convenient centralized online banking services, most of our branches have been brought under the real time online banking system.

IFIC Bank offers a wide variety of deposit products, loan product & value added services to suit your banking requirements. Products and services for individual customer include: Consumer Finance, Deposit Product, Card, NRB Account, Student File, SMS Banking etc.

Savings Account

IFIC Bank offering the most attractive interest rate of 5% on your Savings Account:

Initial Deposit: Tk. 500.00 at rural branches & Tk. 1000/- for urban branches which should be considered as minimum balance.

• Competitive Interest Rate
• No extra hidden charge
• Debit Card facility
• SMS Banking Facility
• ATM facility
• Online banking facility
• Utility payment service
• Transfer of fund from one branch to another
• Opportunity for availing locker facility

SME Banking

The growth of Small and Medium enterprises (SMEs) in terms of size and number has multiple effects on the national economy, specifically on employment generation, GDP growth, and poverty alleviation in Bangladesh. At present, Small & Medium Enterprise sector is playing a vital role in creation of new generation entrepreneurs and ‘Entrepreneurs Culture’ in the country. Experience shows that borrowers of small enterprise sector prefers collateral free loan since normally they cannot offer high value security to cover the exposure.

To facilitate SME sector of the country, IFIC Bank provides collateral free credit facilities to the small & medium entrepreneurs across the country whose access to traditional credit facilities are very limited. We are offering 15 different products for selected target groups, such as – Easy Commercial Loan, Retailers Loan, Muldhan Loan, Women Entrepreneur’s Loan (Protyasha), Transport Loan, Working Capital Loan, Project Loan, letter of Contractor’s Loan, Bidder’s Loan, Working Capital Loan, Project Loan, Letter of Guarantee, Letter of Credit Loan against Imported Merchandize (LIM), Loan against Trust Receipt etc.

SME Banking

• Easy Commercial Loan
• Retailers Loan
• Transport Loan
• Commercial House Building Loan
• Possession Right Loan
• Contractor’s Loan
• Bidder’s Loan
• Working Capital Loan
• Project Loan
• Letter of Guarantee
• Letter of Credit
• Loan against Imported Merchandize (LIM)
• Loan against Trust Receipt
• Muldhan
• Women Enterpreneur’s Loan (Protyasha)

IFIC Bank Treasury Division          

The Treasury Division of IFIC Bank is engaged with Cash Management, Liquidity Planning and Liquidity Protection. It is also conscious to protect all the bank’s Assets and Profits against loss due to domestic as well as global financial realities, particularly Interest and Exchange Rate fluctuations. The Treasury Department is also regarded as a Profit Center, which generates income by trading instruments in the Financial Market. The Treasury is constituted with well setup Front Office, Mid Office and Back Office.

To manage treasury unit as profit centre, along with guidance from regulatory authorities, the bank equipped itself with clear policies, fit organization structure, deployment of trained staff, modern infrastructural facilities and technological initiatives.

Agricultural Credit

In order to achieve desired growth in agriculture sector of the country, we are committed to increase our present loan portfolio in agricultural sector. IFIC Bank is offering Agriculture Loan products namely i) Krishi Saronjam Rin – for Agriculture Equipments ii) Shech Saronjam Rin –

for irrigation equipments iii) Poshupokkhi & Motsho Khamar Rin – for Live Stock & Fish Culture & iv) Phalphasali Rin – for Fruit Orchard for individuals & group at micro level.

IFIC Card

IFIC Bank provides three types of card-

• Credit Card
• Debit Card
• Prepaid Card

Credit Card

FIC Bank VISA Credit Cards are issued in two types namely Gold and Classic for both local and international use. The Local Cards can be used at any ATM displaying VISA Logo for withdrawal of cash and at any POS displaying VISA Logo for purchase of goods & services within Bangladesh whereas the International Cards can be used at any ATM and POS displaying

VISA logo anywhere in the world. International credit card is a dual currency card and as such you can use the same plastic at home & abroad. Classic cards are for lower limits and less costly.

Maximum Interest Free Period

IFIC credit cardholders can enjoy 20 to 50 days interest free period depending on the date of transaction and the date of statement generation. Therefore, you can make your schedule of spending & payment at your convenience. Interest free period will not be allowed for cash advance.

Flexibility in Repayment

You can repay any amount not less than the minimum payment due within the due date and keep your account regular to enjoy revolving credit facility.

Low Interest Rate

You can enjoy credit facility at lower interest rate of 2% per m

Maximum Cash Withdrawal

You can enjoy cash withdrawal facility up to 60% of your credit limit through ATMs. You can enjoy up to 100% of your credit limit through Bank POS from any branch of IFIC Bank Limited.

Free Supplementary Card

First two supplementary cards are free. You can select any two from your near & dear persons and give them supplementary credit cards. They can also enjoy and share your credit limit. You can also allow specific limits for them within your credit limit.

Calculation of Interest

No interest will be calculated on the amount other than cash advance if the total billing amount is paid within the payment due date. In case of part payment or no payment, interest @2% per month will be applied from the date of transaction on daily product basis until the outstanding balance is fully paid.

Minimum Documents Required

Filled-in Application Form, 2(two) copies of photograph, copy of TIN Certificate, Salary Certificate/Pay Slip (for Service Holder), Bank Account Statement ( for Businessman/Self Employed Persons) Copy of Passport (for International Card)and Photocopy of National ID. Other documents may be required for assessment of individual credit worthiness.

Submission of Application

Filled-in Application Form along with other required documents may be submitted directly to the Card Division of Head Office or to any branch of IFIC Bank Limited.

Debit Card

IFIC Bank VISA Debit Card can be used at any ATM displaying VISA Logo for withdrawal of cash and at any POS displaying VISA Logo for purchase of goods & services within Bangladesh. ATM transactions are to be secured by Personal Identification Number (PIN) known by the concerned customer only. POS transactions will not require PIN. However, all the transactions are to be authorized by the system electronically

IFIC debit card is issued against any individual savings/ current account maintained with any branch of IFIC Bank Limited. The designated savings/current account can be operated by using the debit card without using cheques 24 hours in a day, 7 days in a week, 365 days in a year.

The customers are not required to pay any charge for transactions at Merchant Point of Sale (POS) for purchasing goods and services. For cash withdrawal from ATM/Branches, a little charge may be applied.

No interest will be calculated on cash withdrawal or purchases. No minimum amount due and no hassle of payment of monthly bills.

Minimum Documents Required

Filled-in Application Form, 1(one) copy of photograph

Submission of Application

Filled-in Application Form is required to be submitted to the branch where the designated account is maintained.

Prepaid Card

IFIC Bank VISA Prepaid Card can be used at any ATM displaying VISA Logo for withdrawal of cash and at any POS displaying VISA Logo for purchase of goods & services within Bangladesh. ATM transactions are to be secured by Personal Identification Number (PIN) known by the concerned customer only. POS transactions will not require PIN. However, all the transactions are to be authorized by the system electronically. Prepaid card is safer than carrying cash and more convenient than writing cheques.

IFIC Prepaid card is issued by the branches instantly on filling-up the Application Form and making initial deposit. There is no need to have any account with the Bank. Prepaid card are suitable for the customers who does not maintain any account with IFIC. No interest will be calculated on cash withdrawal or purchases. No minimum amount due and no hassle of payment of monthly bills.

Minimum Documents Required

Filled-in Application Form, 1(one) copy of photograph and Photocopy of National ID.

Submission of Application

Filled-in Application Form is required to be submitted to any branch of IFIC Bank Limited.

IFIC Bank POS

Bank POS are available at all the branches of the Bank. Any IFIC Card Holder can withdraw cash from any branch of IFIC Bank Ltd. through Bank POS. Credit Card Holders can withdraw cash up to 100% of their credit limit.

SMS Banking  

Welcome to the convenience of accessing your banking needs from anywhere anytime. IFIC Bank Ltd. catered the demand of time in the era of modern banking technology through SMS Banking Service. It is indeed a fast, secure, convenient, economical and quickest way of banking. The service is available round the clock seven days a week. Get real-time banking information and be in touch any time with IFIC Bank from your mobile. You can check your balance, account information, or even get your mini account statements through IFIC SMS Banking Service.           

Account Service

Push /Pull Services

• Balance Enquiry
• Mini Statement Request (Last 5 Transactions)
• Foreign exchange Rate enquiry
• Fixed Deposit Rate enquiry
• Interest Rate enquiry
• Branch Location enquiry
• PIN Change
• Help

Push Services

• Bank Product Information
• Greetings
• Loan Installment Notification (overdue)
• Any other Massage

About General Banking

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 services. In some general banking activities, there is no relation between banker and customers who will take only one service form bank. On the other hand, there are some customers with who bank are doing its business frequently. 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. since bank in confined to provide the service everyday general banking is also known as retail banking.

General banking is a common banking operation done through the bank. The general banking (GB) department performs day to day services to the valuable customer. Cash is considered as most valuable staff to carry on banking operation. Every day bank receives deposit from the customer and pays them by honoring cheque. The common activities like cheque clearance, pay order, opening a new account, issuance of cheque books, Demand draft etc are performed through the general banking department.

Accounts Opening Section

This section opens different types of account for their valued customers. Selection of customer is very important for the bank because bank’s success and failure largely depends on their customers. If customers are bad they creates fraud and forgery by their account with bank and, this destroys the good will of the banks. So, this section takes extreme caution in selecting its valued customer.

This section opens accounts. Selection of customer is very important for the bank because banks success and failure largely depends on their customers. If customer is bad, they may create fraud and forgery by their account with bank and thus destroy goodwill of banks. So, this section takes extreme caution in selecting its customer base. This section opens the account for the customer. In general banking, the account section plays a very important role. Selection of customer for opening account is very crucial for the institution. If the account holder finds out irregular largely depends on their customer. It hampers the goodwill also. So the bank should be extreme caution in its selection.

Types of Accounts

• Savings Account
• Current Account
• Fixed Deposit Receipt (FDR)
• Special Notice Deposit (SND) Account
• Monthly Income Scheme (MIS)
• Double Return Deposit Scheme (DRDS)
• Three Years Deposit Plus (3YDP)
• Pension Savings Scheme

Account Opening Process

Receiving filled up application in bank’s prescribed form mentioning what type of account is desired to be opened 1. The form is filled up by the applicant himself / herself 2. Two copies of passport size photographs from individual are taken; in case of firms photographs of all partners are taken Step 2 3. Applicants must submit required documents 4. Application must sign specimen signature sheet and give mandate 5. Introducer’s signature and accounts number – verified by legal officer Step 3 Step 4 Step 5 Authorized Officer accepts the application Minimum balance is deposited – only cash is accepted Account is opened and a Cheque book and pay-in-slip book is given-

Step l- Receiving filled up application in bank’s prescribed form mentioning what type of account is desired to be opened.

Step 2- The form is failed up by the applicant.

Step 3-Two copies of passport sized photographs for individual and in case of firms photographs of all partners are necessary.

Step 4-Applicant must submit required document.

Step 5-Applicant must sign specimen signature sheet and give mandate.

Step 6-Introducer’s signature and accounts number verified.

Step 7- Authorized officer accepts the application

Step 8- Minimum balance is deposited only cash is acceptable.

Step 9- Account is opened and deposit slip and a cheque book has given.

Account Opening Formalities

In order to open an account in IFIC bank Ltd., Malibagh Branch, the party has to fill up an account opening form and specimen signature card provided by the banker. There are different forms for different types of account. The customer has to fill that particular form for which account he wants to open. Generally, the following information is required to open an account:

• Name of the applicant(s)
• Profession/Nature of business
• Permanent & present address
• Special instruction regarding the operation the account (if any)
• Introducer’s name & account number
• Specimen signature in the signature card
• Partner’s name, address and signature (in case of partnership firm)
• Photocopy of Passport/Ward Commissioner’s certificate/ Chairman certificate of Union perished/Employer’s certificate regarding identification and nationality of the person(s) concerned
• Two copies of photographs

The Bangladesh Bank has recently made the selection of a nominee by the applicant mandatory and the applicant, in the relevant part of the form, must attest the photograph of the nominee. The concerned officers verify the account opening form.

If the particulars are properly filled up and in order, the customer is entitled to open the account. He has to submit some particular documents, which vary due to the kinds of the accounts. Documents required for opening an account: In order to open any kind of account a customer is required to submit particular documents that vary due to the kinds of account. Here are required documents according to the kinds of accounts:

For Individual/joint/Partnership/Social Club:

The bank requires the following documents, which must be up-to date and duly completed:

• Account opening form properly filled up and signed by the applicant(s)
• Specimen signature in the signature card
• Two copies of photographs of each partner/director
• The photos must be attested by the introducer
• Mandate or authority from the opening an individual, partnership account is to be obtained where a customer want to authorize another person to operate on his account.
• Certified true copies of by-laws, rules, regulations constitutions in case of societies, club, association and limited companies etc.

• Certified copy of resolution authorizing opening and operation of the account with bank passed by the executive committee/ managing committee of the society/ club of association, limited companies etc.
• List of the directors.
• Partnership deed or letter of partnership for partnership firm.

For sole proprietorship concern:

• All the general information regarding opening an account
• Trade license

For limited companies/corporation:

• Account opening form
• Specimen signature card.
• Memorandum and articles of association.
• Resolution of board of directors authorizing opening of the account with the bank.
• Certificate of incorporation.
• Certificate of commencement at business
• List of directors

Individual bio-data of each director & Photocopy of Passport/ Ward Commissioner’s    certificate/Chairman certificate of Union Parishad/Employer’s certificate regarding identification and nationality of the directors concerned.

Minimum deposit for opening an account:

Every customer has to deposit a certain sum of money to incorporate the account.

• For current account initial deposit is Tk 10,000
• For savings account initial deposit is Tk 5,000

Issuing Cheque Books to the Customer

The bank issues 10 leaves cheque book for savings account and 20, 50 and 100 leaves cheque books for current account. To complete the issuing of cheque books a customer has to fill up the requisition form for cheque books. Then a new cheque book will be filled up by the account number of the customer. The requisition slips are maintained and recorded in a register as voucher.

The following procedures are maintained for issuing a Chequebook:

Firstly the customer will fill up the cheque requisition form. The leaves of the Chequebook under issue shall be counted to ensure that all the leaves and the requisition slip are intact and the name & account number shall be written on all the leaves of the Chequebook and on requisition slip. The name and the account number of the customer shall be written in the Chequebook register against the particular Chequebook series. Then the officer in charge signs the register, Chequebook, and the requisition slip. Then the Chequebook is handed over to the customer after taking acknowledgement on the requisition slip.

A cover file containing the requisition slip shall be effectively preserved as vouchers. If the ledger keeper notices any defect, he will make a remark to that effect on the requisition slip and forward it to the cancellation officer to decide whether a new Chequebook should be issued to the customer or not.

Dormant Account

If any account is inoperative for more then one year is called dormant account. To operate this accounts manager’s permission is necessary.

Transfer of Account

Account holder may transfer his account from one branch to another branch. For this he must apply to the manager of the branch where he is maintaining his account. Then the manager sends a request to the manager of the branch where the account holder wants to transfer his account for opening the account.

Sometimes the customer wants to transfer his account to another branch due to various reasons. IFIC Bank, Malibagh Branch, also gives this kind of facility to the customer. In this case, they will have to submit an application to the branch manager stating the reasons. The officer verifies the signature and finds out the balance of the account holder. The holder also submits the rest cheque leaves along with the application. Then the officer issues an Inter Branch Credit Advice (IBCA) to that branch and a debit voucher with the balance of deposit in that account. He also sends the account opening form and specimen signature card to that new branch. The new branch officer verifies the customer signature with account opening form supplied to him. The amount mentioned in the (IBCA) considered as the initial deposit of the new branch.

Closing of Account

For two reasons an account can be closed:

By Banker: banker has the right to close the account if the customer does not maintain any transaction six years and the balance is become lower than the minimum balance.

By Customer: if the customer wants to close his account he will write an application to the manager and the manager then close the account. Firstly, the concerned customer has to apply for closing his/her account. Then to close the account the chequebook is to be returned to the bank. After charging the account closing charge the Manager will close the account. Closing charges are as follows:

For savings bank account—————-20 Taka

For current account———————–30 Taka

To close an account parties may be request to send an application along with the unused leaves of the cheque book. On receipt of the application the following steps are taken.

i) The signature of the account holder is verified.

ii) The number of the unused cheque leaves shall be noted therefore.

iii) Debiting the incidental charges to the account.

iv) The account holder is advised to draw the remaining balance.

The rest amount of money laid in the respective account is paid to the customer by a payment order. In case of payment order certain commissions and vat are cut off from the account.

Portrait of Deposit of IFIC Malibagh Branch (Fig. in Thousands)

Table: Portrait of Deposit

Kinds of Accounts Holders

Branch may open accounts of the following categories of depositors:

1) Individuals – Individuals are adult persons of 18 years age or more who are competent to enter into contracts

2) Joint accounts – More than one adults jointly or adult with minor(s) may constitute joint accounts.

3) Sole Proprietorship concern – A business trading concern owned by a single adult person is sole proprietorship concern.

4) Partnership firms – A business concern owned and managed by more than one persons which may be registered or not registered is a partnership firm.

5) Private limited – A body corporate formed and registered under companies Act 1994, with limited members.

6) Public limited – A body corporate formed & registered under companies Act 1994 with Limited liability of the shareholders and with no upper ceiling of shareholding both Certificate of incorporation and certificate of commencement has given by registrar.

7) Trusts – Trusts are created by trust deed in accordance with the law.

8) LIQUIDATORS – Liquidators are appointed by court of law for companies going into liquidation

9) EXECUTORS – Executors are appointed by a deceased himself before his death by “With” to settle the accounts of the person after his death.

10) Club/Associations/Societies – There are organizations created & registered or not registered under societies registration act.

11) Co-operatives – There are corporate bodies registered under societies registration Act or companies Act or the co-operative societies Act.

12) Non-Govt. Organization – NGOs are voluntary organizations created & registered and society’s registration Act or co-operative societies Act.

13) Non-Trading concern – These are organization registered under societies registration Act or companies Act or co-operative societies Act.

Cash Section

Cash department is the most vital and sensitive organ of a branch as it deals with all kinds of cash transactions. This department starts the day with cash in vault. Each day some cash i.e. opening cash balance are transferred to the cash officers from the cash vault. Net figure of this cash receipts and payments are added to the opening cash balance. The figure is called closing balance. This closing balance is then added to the vault. And this is the final cash balance figure for the bank at the end of any particular day.

Functions of Cash Department

Cash Payment

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Cheque Cancellation Process

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Cash Receipt

Cash Payment:

Banks payments include all kinds of payments excluding those of treasury sections. Extreme precautions must be taken at all levels through, which instrument like cheque, drafts, etc. are disposed. All the Instruments received at the general banking counter will be preliminary checked by the dealing officer who will enter the instruments in the respective ledger. In case of cheque the following particulars will be scrutinized:

• Date (whether post dated or entry dated)
• Amount in word & in figure
• Crossed or open
• Bearer or order
• Style of signature  as available in the leisure
• Prohibitory order or stop payment of cheques.
• Cash payment is made only against cheque.
• This is the unique functions of the backing system which is known as “payment on demand”.
• It makes payment only against its printed valid cheque.

The Cash Officer will follow the following procedures at the time of payments of cheques / other instruments over the cash counter:

Step-1

The client will submit the instruments in the computer department first. The Computer officer and cheque passing authorized officer will verify the instrument & posted the instrument. Then it will be sent to the cash counter.

Step-2

After getting the instrument the cash officer will verify the instrument & if necessary the cash can tell the clients to sign in the backside of the instrument.

Step-3

Cash Officer will record the denomination of notes & coins on the backside of the instrument.

Step-4

The Officer will enter the cheque in the cash payments register where the denomination of notes & coins will also be recorded.

Step-5

The Cash officer will give the amount to the clients at the cash counter & tell the clients to count it immediately and if needed any quarry.

Step-6

All cheques drafts, debit voucher etc must be branded with “ Cash paid” stamp with the current date.

Step-7

After payment the cash department for the purpose of clean Cash Book will send the vouchers.

Step-8

The head of the cash department is responsible for debit vouchers being branded with the cash paid date stamp immediately they are paid & manager must supervise him/ her in this matter as any laxity is extremely dangers

Cheque Cancellation Process

Receiving cheque by the employee in the cash counter and verification of the following by the cash officer in the computer section:

• Date of the cheque. (it is presented within 6 month from issue date)
• Issued from this branch.
• An amount in figure and in word does not differ.
• Cheque is not torn or mutilated. Then gives pay cash seal and sends to the payment counter and payment office makes payment.

Cash Receipt

Money deposited in cash by the constituents at the cash counter of the bank excluding that of government transaction is known as bank receives (cash). Different typos of form are used for cash deposits for different type accounts. Particulars of some forms are furnished below:

• Current or Savings Accounts pay in slip
• Applications for Fixed Deposit Receipt
• Credit Voucher
• Draft or Mail transfer Application Form
• Telegraph Transfer (T.T) Pay Order Application Form Called Deposit Application Form
• Demand Loan Pays in Slip
• It receives deposit from depositors in from of cash.
• So it is the “mobilization unit” of the banking system.
• It collects money only its receipts from.

Step-1

The Depositor will fill up the appropriate the form properly. The concerned officer working at the General Banking Counter will initial the form relating to the new account.

Step-2

Receiving the cash & voucher at the cash counter, the cash officer will count the cash correctly. Then the voucher will be branded  “Cash Received” seal. Then the Assistant Cash Officer was willing the denomination of the notes & coins in the backside of the voucher. After tax Assistant officer will sign the voucher

Step-3

The Cash Officer will check up the voucher & entered t6he amount in the cash receipt register & put the scroll number. Then the Officer will voucher & send to the computer department.

Step-4

The Officer computer department entry the transaction into the computer & put the posted seal & treasure on the voucher.

Step-5

At the end of the transaction the Cash Officer will total the cash receipt book & the total figure should be tally with scroll maintained by the officer whose scroll will also be totaled. The physical cash received at the counter must be equal to the total figure of the scrolled.

Telegraphic Transfer (TT)

Issuing branch requests to another branch to pay specified sum of money to a specific person on demand by telegraph or telex or telephone. Transfer of fund by TT is the rapid and Convenient but expensive method.

 TT (Issue):

• Customer fills up the TT form and pays the amount along with commission in cash or by cheque.
• The respected officers issues a cost memo after receiving the TT form with payment seal, then sign it and at last give it to the customer.
• Next a TT confirmation slip is issued and its entry is given in the TT issue register.
• A test number is also put on the face of the slip. Two authorized officer signs this slip.
• The respective officer transfers the message to the drawee branch mentioning the amount, name of the payee, name of the issuing branch, date, test number and his her power of attorney (P.A.) number.
• The confirmation slip is send by post.

Inward Bills for Collection (IBC)

Lecture Publication purchases a pay order from Malibagh Branch of IFIC bank in favor of Continental Courier Service. The beneficiary organization deposits a pay order to the Narshingdi Branch for collection. IFIC bank (Narshingdi Branch) asks for sending an IBCA (Inter Branch Credit Advice) from the IFIC bank (Malibagh Branch). Since the NBH Branch of IFIC bank ltd receipts an order from Narshingdi branch for sending an IBCA the branch (Malibagh) is liable to send IBCA as the issuance and payment of pay order must be settled at the same bank. The common account (IFIC General Account) of IFIC bank is credited by sending IBCA.

Outline of IBC:

Transfer Delivery (IBTD)

IBTD is another way for cheque clearing. Let me give an example to understand IBTD. “Jupiter Motor” for instance has an account at Malibagh branch. They receive a cheque from other party (for example “Navana Auto”) as business deals. Navana Auto has received a loan from another branch of IFIC bank ltd for example Federation branch on a condition to carry on every transaction with their branch. Since Jupiter Motor receives a cheque, they are supposed to collect the amount from federation branch. But Jupiter Motor pays the cheque to Malibagh branch of IFIC bank to transfer the amount instead of collecting amount from the federation branch. In this condition Malibagh branch cannot do debit the client account (Navana). The Malibagh branch does the IBDA advice on Motijeel branch. Then they send it to the federation branch of IFIC bank in order to transfer the amount in favor of Jupiter motor company.

Liquidation of FDR

i. Only the account holder himself and the authorized person can liquid the FDR after maturity.

ii. In case of joint name, authentication from both is necessary

iii. In case of Death, the survivor cannot encash the FDR even if there exist the either or survivor clause – succession certificate from the court is needed.

iv. If demanded before the maturity the last expired duration is considered to pay interest.

FDR section provides another service on behalf of the government. These services– this bank issues and encash the following two government securities: i. ii. Five Years Bangladesh Sanchay Patra Pratirakha Sanchay Patra.

This section of this branch is also fully computerized. No ledger, no other subsidiary books are maintained separately in this section. All entry is given directly in the computer and then necessary information is printed when required.

Accounts Section

This is obviously an independent and unique department, which works as the composition of all the 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. Only four personnel maintain the entire accounts section. It receives the vouchers from all departments and prepares the subsidiaries and maintains accounts.

Books maintained by this section

General Ledger: Daily Position Clean Cash Extract It shows the daily position of the branch It records all cash transaction of the day under different head It keeps the vouchers from different department along with their summary sheet There are different heads of the general ledger which are prescribed by the head office and the accounts are maintained through those heads of.

Statement 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

Establishment Section

This section deals with employee’s salary, many types of internal expenses such as purchase of pen, paper, equipment, machinery and payment of labor cost and employee conveyance. In case of leave of absence employee collects prescribed form from this section. This section of the bank is simply maintained by a single person.

Locker Facilities

Locker facility is available in this branch. Generally people keep their valuable ornaments in the locker. Lockers are three sizes one are small and other are middle and big. If any body want to open a locker s/he has to pay rent Tk. 1800 for big size, Tk. 2500 for large and Tk. 1200 for small size annually. Any individual can open a locker.

Types of Advance

Total loans & advances of the Bank as on 31 December 2009 was Tk.3779.39 crore as against Tk.3301.84 crore in the year 2008, showing an increase by 14.43% over the preceding year. The Loans and advances cover up the areas of corporate, SME, agriculture retail and credit Card. The credit portfolio of the Bank also included mix of scheme loans, namely- Renovation and Reconstruction of Dwelling House Loan (RRDH), Consumers Durable Loan (CDS), Marriage Loan, Car Loan, HBF Loan and Commercial Loan. Corporate lending is still the core business of the Bank and continues to remain the major segment of the business. While providing loans to our customers the policy of Bangladesh Bank is strictly followed. The portfolio has been further diversified to avoid risk of single industry concentration and remains in line with the Bank’s credit norms relating to risk quality. The Customer Relationship has been strengthened and frequent visits to the clients have been ensured for further cementing existing relationship.

Loans & Advances (Tk in crore)

This is the survival unit of a bank because until and unless the success of this section is a question to every bank. If this section is not properly working, the bank it self may become bankrupt. This is important because this is the earning unit of the bank. Banks are accepting deposits from the depositors in condition of providing interest to them as well as safe keeping their deposits. Now the question may gradually arise how the bank will provide interest to the clients and the simple answer is advance.

We often use loans and advances as an alternative to one another. But academically this concept is incorrect. Advance is the combination of such items where loan is a part only for this credit section of the bank.

All loan and advance that are provided by this bank can be categorized into there heads according to the nature and characteristics of each product:

Nature of Different Types of Advance

Cash Credit HYPOTHECATION (CC HYPO)

Cash credit is given through the cash credit account. Cash credit is an active and running account where deposit and withdrawals may be made frequently. The debit balance of the account on any day can not exceed the agreed limit.

Instrument HYPOTHECATION DEED.

50% margin requires opening a CC account. (varies)

Operation of cash credit is same as that of overdraft the purpose of cash credit is to meet working capital needs of traders, farmers, and industrialist.

It is granted only the first class parties.

It is charged against a property where neither the ownership nor the possession is passed to the bank.

Cash Credit PLEDGE

• The nature, operational work, and characteristics of CC- PLEDGE in as same as CC­HYPO.
• CC.PLEDGE in different from CC-HYPO only from the securities or business goods against the loan amount.
• It is charged against properties where the ownership may remain to the borrower but the possession is passed to the bank.
• Instrument – Pledge Deed.

Secured Overdraft (SOD)

• Overdrafts are those drawings, which are allowed by the banks in excess of the balance in the current account up to a specified amount for definite period as arranged for.
• Generally it is given to the businessmen to increase their business activities.
• Usually provide against FDR, PSS, i.e. financial obligation or any primary securities. The interest charges from the date of first withdraw.
• Interest is calculated and charged only on the actual debit balance on daily product basis.
• Balance of OD account are fluctuates
• The interest rate of SOD is 3% above of FDR interest rate if the FDR is in our Bank.
• If the FDR is in other bank then the interest r1te is 14.50%

Industries Loan

It is a term loan.

It is given for three (3) years at equal installment.

Grass period is allowed of this types of loan.

Grass period is the period that require to earn visible returns.

Others loan

Loan provided for other purpose which is productive and less risk rather industrial sector are treated as others loan.

The terms and conditions of these types of loan are same as industry loan.

House Building Loan

This loan is give for the construction of building house. It is gives for three (3) years at equal monthly installment. This loan is not provides frequently.

Staff House Building Loan (SHBL)

120 times of BASIC salary is provided as SHBL. Bank rate + 1 % interest is charged to the loan amount. Repayment adjusted from their monthly salary. Repayment is made at equal monthly installment.

Consumes Credit Scheme

Under this scheme credit is given to the customer to purchase necessary and luxury commodities like computer, motor vehicle, television, refrigerator, music system sewing machine, furniture etc.

Other then the employee it is given to the valuable client.

It is a 24,36,48 installment system @ 15.50% interest.

Stuff loan against Provident Fund (SLPF)

10% of basic in contributed by employee Repayment is adjusted from their on they salary. Maximum sanction from PF.

Loan against PSS

This loan is provides against PSS fund. 80% are given of the PSS fund.

This is 100% secured for the bank.

Payment Against Document (PAD)

The importers are to open letter of credit through any bank for importing goods. Most of the time they are to extend credit to the importers if not prohibited by Bangladesh bank. This loan creates, on receipt of shipping documents from the negotiating bank, is transferred and lodged to PAD.

PAD is associated with import and import financing. The bank opening letter of credit is bound to honor its commitment to pass for import bills when these are presented for payment provided that it is drawn strictly in terms of the letter of credit, in fact the amount their sends advanced on behalf of the importer.

Loan against imported Merchandise (LIM)

In many cases, a bank has to clear the goods imported under letter of credit at the request of the borrower. When the importer does not come forward to retire the documents inspire of repeated reminders bank has on forced circumstances to clear the imported consignment on arrival of the same to avoid demurrage at the port which adds to the burden of commitment. When the importer fails to retire the documents or request for clearance of goods, the outstanding under PAD is transferred to LIM account.

After clearance, consignments are taken delivery by the importer on full payment of bank’s liability. Normally part delivery is not allowed while on LIM A/C. when the delivery in part is desired by the importer, the LIM is converted into cash credit account retaining proper margin and executing charge documents, the delivery is effected themselves on obtaining pro rate payment.

Trust Receipts (TR)

This is an arrangement under which credit is allowed against trust receipts and imported or exportable goods remain in the custody of the importer or exporter but he is to execute a stamped trust receipt in favor of the bank where a declaration is made that goods imported or bought with the bank’s financial assistance are held by him in trust for the bank.

Export Cash Credit (ECC)

ECC are extended to an export to facilitate the export of goods & commodities for which there is export letter of credit or contract on hand. It is a pre-shipment & short term credit to be liquidated out of the proceeds of export documents which include negotiation or purchase of export documents.

Securities Against Advance

The following securities are to be obtained by the branches depending on the nature of advances while allowing secured advances to the parties.

• Pratirakshya Sanchay Patra, Bangladesh Sanchay Patra, ICB unit certificates, Wage Earner Development Bond.
• Fixed Deposit Receipt issued by any branch of IFIC Bank Limited.
• Shares quoted in the Dhaka Stock Exchange Limited.
• Pledge of goods and produce.
• Hypothecation of goods, produce and machinery.
• Immovable property.
• Fixed assets of a manufacturing unit.
• Cheques, Drafts, Pay Order, Railway Receipts, Steamer Receipts, Burge Receipts of the Govt. or Corporations.
• Shipping document.

 Which Advance Against Which Securities

All securities are not suitable for all types of advances. Each security has its own suitability. Specific securities to be obtained by the branches while allowing advance are shown below against the types of advances:

Table: Advanced against Securities.

Process of Loan Sanction

Step-1: Sanctioning by the competent authority  A secured advance may be grant to a party only after getting a limit sectioned from the competent authority.

Step-2: Loan/Advance Proposal

For obtaining a loan/advance the party must make an application in standard form in writing to the branch where he maintains his operative account. After receiving the application from the party, the branch manager will take immediate steps to compile report regarding the party based on the following sources of information:

• Personal investigation
• Confidential supports from
• Other banks,
• Chamber of commerce
• CIB from Bangladesh bank as the earnable.
• Trading account P/C, B/S. M/A if’ any and other documents submitted by the party.
• The average balance and the present maintained in the account.
• The nature of operations during the last six months and the date of opening

Step-3: Preparation of limit proposals

The branch, may prepare a limit proposal after being fully satisfied with the following points:

• The financial position of the party.
• Purpose for which advance is required.
• Nature of securities offered.
• The payment arrangement.

Step-4: Renewal Proposal.

Step-5: Approval by Head Office and Branch responsible.

• Limit proposal sent to HO.
• Sanction/reject
• Receive the limit section advice.

 Step-6: Disbursement of loan.

Step-7: Loan monitoring and administration.

Portrait of Advance Division of IFIC BANK, Malibagh Branch  Tk. In Thousand

As per Statement of affairs as on Nov10, 2004.

Classification of Loan

Advance may classified or unclassified are determine on the basis of regularity of loan recovery.

Classified: The repayments of advance which have no regularity are classified. That means which are irregular in nature, overdue installment of payment, and expire the due date. There are three standards of classification:

• Sub Standard
• Doubtful
• Bd loan

Unclassified Loan: the repayment of advance which have regularity are called unc1assifiec advance. This is a clean loan that is these is no over.

As per summery sheet as at 09.11.2004 IFIC Bank Malibagh Branch.

Eligible security

• For land and building 50%.
• Financial obligation 100%.

Interest suspense

• Total balance of interest against classified loan.

Base for provision

• Formula: Outstanding – Interest surpasses – Eligible security
• In case of unclassified advance the base for provision should kept 1 % of the total Outstanding amount.
• In case of bad loan the base for provision should kept 100% of the total outstanding Amount
• In case of doubtful loan the base for provision should kept 50% of the total outstanding amount.
• In case of sub standards loan the base for provision should kept 20% the total outstanding amount.

Basically this standards of classification are depends on the expansion of time. There are separate systems of classification for each type of loan. Each banking institution have develop there own system of loan classification. At IFIC Bank Ltd. Malibagh branch, what I have seen in the advance division that classification of loan is a system of observation rather to measure of classify the credits which has provided by this bank.

Findings

IFIC Bank is one the first time established bank in Bangladesh. IFIC Bank has been suffering a few problems.

• In general banking system they follow the traditional banking system.
• IFIC bank recently have started online banking operation. Some of the employees are not able to perform better use of computer operating system. And all employees are not trained on online banking system.
• Before starting online system banks should have to done train up their employees. But employees got seven days training on their own branch on the banking hours. Meantime they don’t provide better services to the client.
• When a joint stock company comes to open an account if the company happens to be an existing one, the banker should demand copies of the balance sheet and profit & loss account, which will reflect the financial growth of the company and its soundness, but in practice companies and the bankers as well don’t even bother.
• Officers of the bank are competent. Even though many of them simply know the working procedure of what they are doing but don’t know the philosophy behind doing those.
• In case of online banking service IFIC Bank charge is Tk.1000.00 yearly, which is high compare with other bank.
• According to a few clients opinion introducer is one of the problems to open an account. If a person who is new of the city wants to open account, it is a problem of him/her to arrange an introducer of SB or CD accounts holder.
• The loans and advances department takes a long time process a loan because the process of sanctioning loan is done manually.
• Political influence is one of the major problems in Bangladesh. Due to political intervention, the bank becomes obliged to provide loans in most cases, which are rarely recovered. Bank has to face this in convenience situation almost every year.

Recommendation

In order to get competitive advantage and to deliver quality service, top management should try to modify the services.

• In addition, with the present services they should include more services.
• As the clients are not in favor of introducer system that currently present, if possible the rule of introducing to open an account should be changed.
• Up to date Banking software should be use to give better service to the customers.
• In advance section to recovery loan and the delay problems. Special monitoring cell should work in the field level.
• The loan sanction process should be easier that the clients can feel convenient to take loan from the bank.
• Manpower should be increase in cash and front desk sections.
• IFIC Bank Ltd. should focus on their promotional activities.
• They should also focus on the marketing aspects to let customers know about their products and offerings and more promotion should be given to attract new customer.
• The absent of Corporate Social Responsibility (CSR) is caused for destruction of the image of the company. The Bank somehow pollutes the environment. It is an own responsibility to do something for improvement of the environment. The IFIC bank must closer look on this issue since other competitors spend huge amount of money.
• It is strongly recommended that the company must inaugurate a separate marketing department in order to explore new area in order to provide banking service where competitor has not been captured the market yet.

Conclusion

International Finance Investment and Commerce Bank Limited (IFIC) is a well reputed Bank. It is committed to provide high quality financial services/products to contribute to the growth of GDP of the country through stimulating trade and commerce, accelerating the pace of industrialization, boosting up export, creating employment opportunity for the educated youth, poverty alleviation, raising standard of living of limited income group and overall sustainable socio-economic development of the country.

IFIC Bank makes a strong position through it’s varies activities. Its number of clients, amount of deposits and investment money increase day by day. This bank already has shown impressive performance in investment.

The internship program duration 3 months helped me to enhance my banking knowledge which could not be possible to know if I had not been a chance to access at IFIC Bank Ltd. It is not possible to know each and every banking operational activity within this period, but I am confident that the knowledge that I have achieved so far, would definitely help me to realize my further carrier in job market. During the course of my practical orientation I have tried to learn the practical banking activity to relate it with my theoretical knowledge, what I have gathered.