General Banking and Performance Evaluation of Trust Bank Limited

EXECUTIVE SUMMARY

Banking System of Bangladesh has gone through three phases of development – Nationalization, Privatization and lastly Financial Sector Reform. Trust Bank Ltd. (TBL, the 3rdgeneration bank) has started its journey as a private commercial bank on 29 November, 1999.

The whole working area of a modern bank can be divided mainly into 5 (five) Sections, such as – 1) General Banking Section, 2) Cash Section, 3) Loans & Advance Section and 4) Foreign Trade Section 5) Credit.  In a nutshell, it can be described as “Asset Wing & Liability Wing”. Our focus & discussion will be concentrated mainly on General Banking Section.

General Banking is the starting point of all the banking operations. It is the department, which provides day-to-day services to the customer. It opens new accounts, remit funds, issue bank drafts & pay orders etc. Provide customers through quick and sincere service are the goal of the general banking department.

 In this study, a fervent appeal has been made to demonstrate and analyze the general banking practice and the subsequent outcome of Trust Bank Ltd. (TBL), which is passing its childhood period to establish an iconic threshold in the banking arena. Despite of being born in the cantonment, the bank is no more recognized as financial dealer of the armed forces; rather in the passing years, it has aimed at reaching the folk of Bangladesh, irrespective of their caste and designation.

This report has been originated as the master degree prerequisite of the BBA program at the Faculty of Business Administration, Adamjee Cantonment College, Bangladesh. Consulting with both the internship supervisor Mr. Md. Abdul Hakim & the organizational supervisor Mr. Shah Jalal Uddin Khan (SVP) and Chief Manager Millennium Corporate Branch, , the VP and Manager, Trust Bank Ltd. (TBL), Millennium Corporate Branch, have selected the subject matter of the report.

The report contains five (5) chapters. The First chapter of the report describes the introductory words of the internship report and the methodology used in the preparation of the report. The Second chapter contains the historical background of TBL and chapter Three explains the various banking products offered by the bank. The fundamental analysis of bank performance of the bank as starts at chapter Four. The concluding chapter bearing number Five contains the findings during the three-month long internship period, recommendations based on the findings and the overall conclusion.

During the composition of report proper care and uninterrupted concentration has been invested. Moreover, containing some unintentional mistake and printing error is not unusual. I do hope all to be considerate in this regard.

CHAPTER – ONE

INTRODUCTION

BACKGROUND OF THE REPORT:

In the later 19th century, Finance was a part of the Economics. But due to the globalization and more expansion of international trade, Finance place the major role for the economic development. The development of the modern economy would not have been possible without the use of money. A first fundamental characteristic of money is that it is very much like collective goods. It is a parallel relationship between money and Banking. Bank is an important and essential institution for the necessity of the use of money and the protection of the money.

As a BBA student with major in Marketing, Financial institutions are the most appropriate field to gather the experience and among the financial institution Bank is the most prominent place. With a view to supply skilled personals in banking arena, Adamjee Cantonment College has undertaking the Internship training program for the BBA students. As a part of the BBA program I placed in The Trust Bank Limited, Millennium Corporate Branch for having practical exposure in the Bank for three months internship program.

ORIGIN OF THE REPORT: 

This report is submitted after completion of the three months Internship program in the “The Trust Bank Limited” to the Internship supervisor. The program director authorized me to submit the report on “The General Banking System of Trust Bank Limited”. The internship program was started from 16^th May and ends up 16th July 2010.

RATIONALE OF THE REPORT:

This report is a part of my academic program. The BBA program having 120 credits in total contains three (3) credit hours on the job internship program. The internship program has been set for three (3) months period. I believe this study will be beside me in future, especially if I get myself involved in banks and other financial institutions. The program has helped me a lot to understand the organizational atmosphere and behavior.

OBJECTIVE OF THE REPORT:

Objective of the study acts as a bridge between the starting point and the goals of the study.

To illustrate the objectives properly, presented into two parts:

 General:

The main objective of the study is to obtain a clear idea about the General banking and

Foreign Exchange business of TBL’s banking operation.

 Specific:

• To observe the major outline of General and Foreign business.
• To observe the foreign correspondents of TBL.
• To observe the post import financing operations.
• To analysis the expansion of Foreign Trade business of the TBL.
• To identify the problems of it’s financing.
• To problems faced by TBL in general banking and Foreign exchange Business.
• Suggested remedial measures.

SCOPE OF THE REPORT:

The Trust Bank Limited is one of the new generation banks in Bangladesh. The scope of the study is limited to the one branch of Trust Bank Ltd only. The Report has covered organizational structure; background, functions and the performance of the bank. Since I worked in general banking division so my report covers all the activities of general banking of The Trust Bank Limited. While preparing this report I have taken information of the foreign exchange department and general banking department from employees and I have used both primary and secondary data which was available to me. But some information’s, which are confidential, I ignored in my report.

 METHODOLOGY OF THE REPORT:

a SOURCES OF INFORMATION :

Primary Data: Data has been collected primarily through correspondence with the personnel working in different desks, personnel of the head office and other branches, informal conversation with the clients.

Secondary data: The main source of published data is the auditors’ statements of financial affairs which are basically used internally by the bank. Data has also been collected by going through different circulars issued by the head office and Bangladesh bank during the tenor of the internship.

b DETERMINATION OF TIME HORIZON :

In relation to the general banking and financial performance evolution, I have gone through records, reports and documents used currently by the TBL. For the purpose of study, the horizon of three (4), from 2006 to 2009, has been chosen. Over the four year time period, the data relating to the performance of TBL have been evaluated. The basic source of the data is the auditors report used internally by the bank only.

c METHODS OF COLLECTING DATA :

The internship report has been prepared all the basis of “on the job” experience with Trust Bank limited (TBL), SKB Branch located at 195, Motijheel C/A, Dhaka. In spite of the scarcity of published data, I have tried to make the report informative and handy. The data used in the report have been compiled through different complicated ways- direct questionnaire to executives, continuous search on the ongoing accountants’ machine, and interview with internal auditor and external auditors’ report. Working with the organization for a meager period of three month is the main aspect of acquiring data and information to evaluate the culture, working environment and similar sort of affairs of the organization.

d RELIABILITY OF THE DATA :

The data collected are highly reliable in the sense that all data generated in the report are used exclusively by the TBL. The auditors’ report on the financial statements and the correspondence with different desks generate the reliable information to compose the report successfully

e MODEL USED :  

The performance evaluation of TBL has been conducted based on the trend analysis and ratio analysis.

A) Trend Analysis: In the report trend analysis has been used in order to indicate the changes in the level of progress and growth over the last four years starting from 2006 It would show whether the present growth trend of TBL is excellent, good, satisfactory or bad.

B) Ratio Analysis: In the report, significant analysis has been made through the following ratios –

• Capital Adequacy Ratio
• Capital Fund to Deposit Liabilities Ratio
• Liquid Asset to Deposit Liabilities Ratio
• Loan to Deposit Liabilities Ratio
• Earning Asset to Deposit Liabilities Ratio
• After Tax Return on Average Asset Ratio
• Net profit to Gross Income
• After Tax Return on Equity

LIMITATIONS OF THE STUDY:

The Present study was not out of limitations. In preparing the Report, I have experienced some acute problems that have, to some extent, affected the presentation of the report.

There are some limitations in my study. I have been faced some problems during the study which I am mentioning them. The time period of this study is very short. I had only three months in my hand to complete this report, which was not enough. So I could not go in depth of the study. Sometimes the officials were busy and were busy and were not able to give me much time.

Some desired information could not be collected due to confidentially of business. Few officers sometime felt disturbed, as they were busy in their job.

Sometime they didn’t want to supervise me out of their official work. Library management and functioning is not satisfactory at many places and much of the time and energy of us are spent in tracing out the books, Journals, reports, etc. there is also the problem that many of our libraries are not able to get copies of old and new

Acts/Rule. As I am newcomer, there is a lack of previous experience in this concern. And many practical matters have been written from my own observation that may vary from person to person.

CHAPTER-TWO

BRIEF PORTRAIT OF THE BANK

OVERVIEW OF THE BANK:

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

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

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

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

CORPORATE INFORMATION AT A GLANCE

  Banking License received on                                                            : 15^th July.1999

  Certificate of incorporation received on                                           : 17^th June1999

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

  First branch licenses on                                                                     : 9^th August1999

  Formal inauguration on                                                                     : 29^th November

1999

  Sponsor Shareholders                                                                       : Army Welfare Trust

  Number of Branch                                                                            : 45

NATURE OF BUSINESS :

Trust Bank Ltd offers full range of banking services that includes

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

The Bank offers a full scale commercial banking including

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

VISION AND MISSION STATEMENT:

Vision:

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

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

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

Mission:

Our mission is to make banking easy for our customers by implementing one-stop service

concept and provide innovative and attractive products & services through our technology

and qualified human resources. We always look out to benefit the local community through

supporting entrepreneurship, social responsibility and economic development of the

country.

STRENGTH AND OPPORTUNITIES OF TBL:

Strengths:

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

Opportunities:

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

2.6 BRANCHES:

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

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

CHAPTER-THREE

DEPOSIT PRODUCTS AND SCHEMES

DEPOSIT PRODUCTS AND SCHEMES AT A GLANCE:

Deposit Products:

• Current Deposit Account
• Savings Deposit Account (interest calculated on monthly minimum balance of Tk.2000 and above)
• Fixed Deposit (1 month, 3,6,12 months & Above)
• Savings Certificate (Govt. Bond)
• Trust Smart Savers Scheme(TSS)
• Trust Money Double Scheme(TMDS)
• Trust Money Making Scheme(TMMS)
• Trust Education Scheme(TES)
• Monthly Benefit Deposit Scheme (MBDS)
• Lakhopati Savings Scheme (LSS)
• Interest First Fixed Deposit (IFFD)
• Corporate Financing
• Trust Household Durable Scheme
• Trust Marriage Loan Scheme (MLS)
• Trust Car Loan Scheme (CLS)
• Trust Apon Nibash Loan (ANL)
• Trust Micro Credit for Renovation &  Reconstruction of Dwelling Houses(RRDH)
• Trust Doctors Loan
• Advance Against Salary
• Any Purpose Loan (APL)
• Hospitalization Loan
• Trust Education Loan
• Trust Travel Loan
• Trust CNG Conversion Loan

Investment Products:

• International Banking
• Private Foreign Currency Accounts
• Non Resident Foreign Currency Deposit Account
• Resident Foreign Currency Deposit Account
• Travelers’ Endorsement (Cash and Travelers Cheque)
• Remittance of Foreign Currency
• Import and Export Transaction
• Foreign Exchange Dealing
• Purchase of Foreign Currency Drafts, Cheques, Travelers Cheques Wage Earner’s Development Bond

Other Services:

• Local Remittance- DD, TT, PO etc. & Inter Branch Transactions
• Trust Tele Banking
• Trust SMS Banking
• Trust Internet Banking
• Credit/debit/ VISA Card
• Visa Electron Service
• Visa Credit Card Service
• Passport Service
• Locker Service

GENERAL DEPOSIT PRODUCTS:

Trust Bank limited (TBL) offers the general deposit products in the form of various accounts. The bank allows the following kinds of accounts:

a)      Savings Account

b)      Current Account

c)      Short Term Deposit (STD) Account

d)     Fixed Deposit Account

a SAVINGS ACCOUNT :

The summary of the rules and regulations to open a savings account is as follows-

Any person or persons of more than 18 years having sound mind can open and operate this account singly or jointly. In case of a minor (a person below 18 years), a guardian can open and operate this account on his or her behalf.

Clubs, Societies and other similar organization are eligible to open such account.

• More than one account cannot be opened in the same name.
• A minimum initial deposit of Tk. 2000.00 is required to open such account.
• Money will be withdrawn through cheques. Withdrawal cannot be more than twice a week and generally the amount will not be more than 25% of the balance available, otherwise no interest will be given for that month.
• In case of closure of any account, the bank deducts Tk. 100.00 as closing charge.

INTEREST CALCULATION

 Note: Interest on the Savings deposits is calculated on the minimum monthly balance of each account. Monthly interest is not calculated on the Savings Accounts whose minimum balance is below Tk.2000.00 i.e. if minimum balance is below Tk.2000.00; no interest is calculated on the account during the month. This term becomes effective from May 01, 2006.

b & c: CURRENT AND SHORT TERM DEPOSIT (STD) ACCOUNT :

The summary of the rules and regulations to open a savings account is as follows-

• A minimum deposit of Tk.5000.00 is needed to open a current account.
• The bank charges an incidental charge of Tk200.00 per individual customer and TK.300.00 for corporate customer for every six (6) months for the maintenance of the account.
• In case of the closure, the bank charges Tk.100.00 as closing charge of the account.
• Withdrawal of money is allowed only through the leaves of the cheque book issued by the bank.

INTEREST CALCULATION

d FIXED DEPOSIT ACCOUNT :

The bank allows people to keep their idle money secured and profitable as Fixed Deposit. The interest rate that the bank offers to the fixed depositors is as follows:

 Note: FDR Interest is Subject to 10% government tax on interest earnings.

The Bank deducts the Excise duty annually, the compulsory levy of the government, on the interest earnings in the following structure:

PREREQUISITE OF OPENING AN ACCOUNT:

To open a savings, current or STD account, the following documents are mandatory:

FOR INDIVIDUAL ACCOINT:

• Two copies of Passport size Photograph of the Clients (Attested by introducer or Verified with Passports)
• Passports/ Nationality Certificate/ Employer’s Certificate of the Proprietor.
• Customer Profile.
• Transaction Profile.
• Photograph of the Nominee(s) attested by the account holder.
• TIN Certificate.

FOR JOINT ACCOUNT:

• Passports/ Nationality Certificate/ Employer’s Certificate of the Proprietor.
• Customer Profile.
• Transaction Profile.
• Photograph of the Nominee(s) attested by the account holder.
• TIN Certificate.
• Relationship between the account holders.
• Purpose of opening of the Joint account.

FOR PROPRIETORSHIP ACCOUNT:

• Two copies of Passport size Photograph of the proprietor (Attested by introducer or Verified with Passports)
• Passports/ Nationality Certificate/ Employer’s Certificate of the Proprietor.
• Customer Profile, transaction Profile.
• Photograph of the Nominee(s) attested by the account holder.
• TIN Certificate.
• Trade License.
• VAT Registration (if available)

FOR PARTNERSHIP CONCERN:

·         Two copies of Passport size Photograph of each partner(Attested by     introducer or Verified with Passports)

·         Passports/ Nationality Certificate.

·         Company Profile.

·         Transaction Profile of the concern.

·         Personal Profile of the partners.

·         Photograph of the Nominee(s) attested by the account holder.

·         TIN Certificate.

·         Trade License of the concern.

·         VAT Registration (if available)

·         Relationship between the partners.

·         Attested Photocopy of the Partnership Deed (Deed on Tk 1000.00 stamp)

·         Resolution regarding opening and operation of the account.

FOR COMPANY ACCOUNT:

·         Attested or Certified copy of the Memorandum and Articles of Association.

·         Certificate of Incorporation.

·         Certificate of Commencement of Business (for public ltd. co.).

·         Two copies of Passport size Photograph of all Directors (Attested by introducer or Verified with Passports)

·         Passports/ Nationality Certificate of all Directors of the company.

·         Company Profile.

·         Transaction Profile of the company.

·         Personal Profile of all Directors as per enclosed sheet in the company’s letterhead pad.

·         TIN Certificate.

·         Trade License.

·         VAT Registration (if available).

·         Board resolution of the company regarding opening and operation of the account.

FOR PRIVATE SCHOOL/COLLEGE/MADRASA:

·         Attested or Certified copy of the Constitution.

·         Registration Certificate.

·         List of all Executive Members (as per enclosed format).

·         Two copies of Passport size Photograph of the account operators    (Attested by introducer or Verified with Passports)

·         Passports/ Nationality Certificate of the account operators.

·         Personal Profile of all members of the governing body and Managing Committee.

·         Board resolution regarding opening and operation of the account.

FOR NGO/ CLUB-SOCIETY/CO-OPERATIVE ACCOUNT:

·         Registration Certificate from the Joint Stock Company/ Ministry of Social Welfare.

·         List of all Executive Members (as per enclosed format).

·         Board resolution as per Memorandum regarding opening and operation of the account.

·         Attested or Certified copy of the Constitution/Bylaws.

·         Two copies of Passport size Photograph of all Members (Attested by introducer or Verified with Passports)

·         Passports/ Nationality Certificate of all Members.

·         Profile of the Firm.

·         “No Objection Certificate” from the Ministry of Social Welfare.

ENTRIES TO BE PASSED WHILE OPENNING AN ACCOUNT:

Dr:   Cash Account

Cr:    Party Account (Savings/Current/STD Account)

NEW DEPOSIT PRODUCTS:

To keep in touch with competitive market, the bank has recently introduced Six attractive deposit products. The products having their distinctive have already gained and are gaining the response from the existing and prospective clients. The products are as follows:

a) Trust Lakhopati Savings Scheme (LSS)

b) Trust Money Double Scheme (TMDS)

c) Trust Money Making Scheme (TMMS)

d) Trust Education Scheme (TES)

e) Monthly Benefit Deposit Scheme (MBDS)

f) Interest First Fixed Deposit (IFFD)

a. TRUST LAKHOPATI SAVINGS SCHEME (LSS) :

Under the LSS, the following category of deposit and maturity payment has been declared:

Applying the future value annuity due formula [FV=A {(1+i/m) ^mn – 1}(1+i/m)}/(i/m)],

Where,

FV= Future Value

A= Installment Amount

i= Rate of Interest

m= Number of Period in a year

n= Maturity Period or Number of year,

            It has been found that the effective rate of interest (EAR) is 7.78%

RULES AND REGULATION:

• A person can open more than one account for any size of installment in any branch of the Bank.
• The first installment is to be deposited on any date of the month but the subsequent installment is to be deposited by the 10^th day.
• Advance payment of three installments is acceptable.
• One copy of Passport size Photograph of the account holder is needed to open LSS.
• One copy of Passport size Photograph of the Nominee(s) [attested by the account holder] is also required.
• In the event of failure of to pay installment, the arrear installment(s) should be paid before or along with the next due installment subject to the penalty of Tk50.00 for per installment to be paid.
• In case of premature closure of the account, Tk100.00 is charged as closing charge.
• Loan may be allowed up to 80% of the deposited amount but not below Tk1,00,000.00 against lien or pledge of the same account.
• Any account can be transferred from any branch to another subject to Tk25.00 as Account Transfer Fee.

• In any installment remains unpaid for six consecutive months, the account will be closed automatically and the account will be settled as below:

b. TRUST MONEY DOUBLE SCHEME (TMDS) :

Under the Scheme, the amount deposited at the very inception is doubled in 6 years. The basic structure of this Scheme is as follows:

 TERMS & CONDITIONS:

• An applicant can open TMDS account in his own name, in his/her spouse’s name or in the name of his/her children operated by the guardian. The maximum no. of TMDS accounts from a single family cannot exceed five.
• An order instrument mentioning the amount payable after maturity shall be issued favouring the depositor(s).
• In case of discontinuation of the scheme, account will be settled as per following:

a) If the premature encashment would be occurred within three months in that case no interest will be allowed.

b) If the premature encashment would be occurred after three months in that case he/she will be entitled to get prevailing savings rate.

• The depositor may select nominee(s).
• In case of death of the depositor, the amount at discounted rate will be payable to the nominee(s) or in the absence of nomination, to the legal heirs of the depositor.
• Loan facility may be allowed up to 80% of deposit amount against lien/pledge on such instrument at Bank’s prescribed rates and rules but not below Tk.50,000.
• In case of lost instrument, duplicate instrument shall be issued as per rules of lost instrument in FDR.
• Any Account can be transferred from one branch to another, in that case TK. 25/- will be charged as Account Transfer Fee.
• Interest on this scheme is subject to Income Tax/Levi/VAT etc. as and when imposed by the government.
• The Bank reserves the right to make change/alteration/amendment/addition/modification etc. to the account and to its related charges fees etc. at any time/stage without assigning any reason whatsoever.

c. TRUST MONEY MAKING SCHEME (TMMS) :

Under the Scheme, the client has to pay a down payment of Tk7,500.00 or multiple thereof and the bank contributes Tk42,500.00 or multiple thereof to form a fixed deposit of Tk50,000.00 or multiple thereof with the bank. The client is allowed an interest rate of 10.00% on that deposit. The client has to pay the amount due to the bank through monthly equal installment of Tk855.00 or multiple thereof in 6 years. The client is entitled to get the interest on FDR.

Summary of the scheme

 TERMS & CONDITIONS:

• An applicant can open TMMS account in his own name, in his/her spouse’s name or in the name of his/her children operated by the guardian.
• An FDR for the value combining client’s own deposit  and bank’s contribution will be issued for three years at 10.00% which will be automatically renewed for further one term (Three years).
• In case of death of the depositor, the amount at discounted rate will be payable to the nominee(s) or in the absence of nomination, to the legal heirs of the depositor(s) on production of succession certificate.
• In the event of failure to pay any monthly installment, it will be sole responsible of the TMMS account holder to settle the arrear installment(s) before or along with the next due through a written instruction to the Bank. In such case there will be a penalty of TK.50.00 for per installment amount to be paid with subsequent installment.
• If the client fails to deposit three successive installments, the scheme will be automatically discontinued. In case of discontinuation of the scheme, account will be settled as detailed below:

• Installment will be started from the following month and deadline of each installment is 10th of every month (in case of holiday next working day of every month).
• No loan facility will be allowed against the deposited amount.

d. TRUST EDUCATION SCHEME (TES) :

The TES has been introduced to assist the poor students financially and chronologically. Under the scheme, a student may deposit Tk10, 000.00 or its multiple for a period of three or five years. After the maturity period he or she may get a lump-sum amount of Tk13,400.00 (for three years maturity) or Tk 16,000.00 c or he/she may get monthly education allowance of Tk430.00 (for three years maturity) or Tk520.00 (for five years maturity) for a period of three years after maturity.

Summary of the scheme

e. MONTHLY BENEFIT DEPOSIT SCHEME (MBDS) :

The benefit of the scheme will be paid on monthly basis. As such this is called Monthly Benefit Deposit Scheme (MBDS).

TARGET GROUP:

•  The persons who intend to meet the monthly budget of their families from the income out of their deposit. They may be retired service holders, housewife of businessman & other professionals.
• Trusts and Foundations or other associations, which award monthly scholarship/stipends to students etc.

TERMS & CONDITIONS:

• Deposit of TK.1, 00,000.00 (Taka One Lac) or multiples thereof shall be acceptable under the Scheme.
• The deposit shall be for a period of 5 (five) years. The principal amount is refundable on maturity.
• Profit shall be paid  on monthly basis @ Tk.900.00 and net off taxes @ Tk.810.00 per Tk.1,00,000.00
• Payment of monthly profit shall start from the subsequent month after a clear minimum gap of 30 days from the date of deposit.
• Normally, the deposit will not be en-cashable before 5 (Five) years. But  if any depositor intends to withdraw his deposit before maturity due to certain unavoidable reasons, he/she would be allowed to do so in the following manner:

• No benefit including interest shall be allowed for pre-mature encashment within three

               months

           • If the accounts/deposits are closed/encashed after three months of its opening, benefit       shall be allowed on the deposit at existing normal Savings Deposit Rate.

           • If the amount of monthly profit already paid exceeds the amount at normal Savings

              Rate, the difference shall be realized from the principal deposit amount, if and when

              necessary.

• In case of death of a depositor, the Amount shall cease to be operative and the amount deposited so far including interest as per SL. No. 5 shall be paid to the nominee, to the legal heirs of deceased as per rules in force.
• The depositor must have a separate Savings Bank Account with the Branch wherein the benefit on the amount so deposited shall be credited every month.
• The Receipt will not be transferable.
• Advance against lien on such Receipt can be allowed up to 80% of the deposit bearing normal rate of interest prevail at the time of allowing Overdraft/Loan.
• Income Tax @ Tk.10% will be deducted on the income received from the deposit and Excise Duty will be realized as per prevailing rules.

f. INTEREST FIRST FIXED DEPOSIT ( IFFD ) :         

This is a smart scheme in the sense; depositor gets the interest first and can reinvest it. Interest First Fixed Deposit works like normal FD except with one unique feature added to it. The customer receives interest in advance i.e. at the time of placing the deposit. The customer doesn’t have to wait for maturity of the fixed deposit; instead he/she can use the interest immediately and keep the investment intact till the maturity as per following arrangement.

TERMS & CONDITIONS:

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

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

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

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

 SAVINGS CERTIFICATES:

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

 Bangladesh Sanchayapatra (5 years)

 3 months profit based Sanchayapatra (3 years)

 Pensioner Savings Certificate (5 years)

The interest rate allowed to each category is as follows-

Bangladesh Sanchaya Patra :

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

From January 01, 2005 to July 16, 2005 :

From July 17, 2005 to December 03, 2006 :

 From December 04, 2006 to till date :

Pensioner Sanchaya Patra:

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

From December 04, 2006to till date:

 Schedule of interest for every 3 months

Months Profit Base Sanchaya Patra(3MPBSP) :

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

From December 04, 2006 till date:

Schedule of interest for every 3 months:

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

OTHER SERVICES:

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

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

b)   Locker Service

c)   Credit/debit/ VISA Card/AT

d)   Trust Tele Banking

e)   Trust SMS Banking

f)    Trust Internet Banking

g)   Visa Electron Service

h)   Visa Credit Card

i)    Passport Service

a.  Local Remittance:

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

There are two types of Remittances:

i)  Inward Remittance

ii) Outward Remittance

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

Demand Draft (DD):

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

Issuance of DD:

Trust Bank follows the following procedures while issuing DD :

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

 Payment of DD:

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

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

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

Entries for Issuance of DD:

Dr: Cash in Hand/ Customer’s Account

Cr:  Payable Account – Demand Draft

Dr:  Payable account – Demand Draft

Cr:  TBL General Account.

Entries for DD payment with Advice:

Dr:  TBL General Account

Cr:  Payable Account – Demand Draft

Dr:  Payable account – Demand draft

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

Entries for DD Payment without Advice:

Dr:  DD Paid without Advice

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

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

Dr:  TBL General Account

Cr:  Payable Account – Demand Draft

Dr:  Payable Account – Demand Draft

Cr:  DD Paid without Advice.

ISSUANCE OF DUPLICATE DD:

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

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

CANCELLATION OF DD:

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

STOP PAYMENT OF A DRAFT:

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

 TELEGRAPHIC TRANSFER (TT):  

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

 ISSUANCE OF TT:

TT Issued from Y Branch to X Branch:

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

b)      Checking the TT Application.

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

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

e)      Application of test number by the authorized officer.

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

Entries for Issuance of TT:

Dr:  Party’s Account or Cash or Otherwise

Cr:  TBL General Account.

Procedure for Payment of TT:

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

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

Entries will be as follows:

1. Dr: TBL General Account

Cr:  TT Payable Account

1. Dr: TT Payable Account

Cr:  Customer’s Account

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

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

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

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

Cancellation of TT:

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

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

PAY ORDER (PO):

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

Issuance of Pay Order:

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

Payment of Pay Order:

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

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

Entries for Issuance and Payment of Pay Order:

For Issuance of Pay Order:

Dr: cash in Hand / Customer’s Account

Cr: Bills Payable Account – Pay order

For Payment of Pay Order:

Dr: Bills Payable Account – Pay Order

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

Cash Payment is done on the basis of:

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

INTER BRANCH TRANSACTIONS:

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

IBCA: Inter Branch Credit Advice

IBDA: Inter Branch Debit Advice

 Issuance of IBCA & IBDA:

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

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

Responding of IBCA & IBDA:

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

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

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

                                           Or

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

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

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

B. LOCKER SERVICE :

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

Size of Locker

Security Deposit of Locker

C ATM CARD :

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

D. TRUST TELE BANKING :

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

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

           At present the service is free of charge.

E. TRUST SMS BANKING :

Trust Bank Ltd. has recently introduced SMS Banking service for the account holders of the bank. The service is available 24 hours & 7 days a week. Account holders may request their account balance & mini statement over SMS. Bank’s automated SMS service will return the result of their query over SMS. A small charge is applicable for this service.

How to Subscribe for the Service:

1. Interested customer shall fill out a service request form available at the branches.
2. Customer shall provide a valid mobile phone number of local service provider.

Customer will send the SMS to #01713244905

How to Send SMS:

• Ø For Balance Query :

        “bal<space>PIN” and send it to 01713244905 (Bank will assign a PIN)

              For Example:

        If PIN is 1499, customer will write “bal<space>1499” and send it to 1713244905

• For Mini Statement :

      “sta<space>PIN” and send it to 01713244905

             For Example:

             If PIN is 1499, customer will write “sta<space>1499” and send it to 01713244905.

A small charge is applicable for this service.

F. TRUST INTERNET BANKING :

Customer with a user ID and password can login to our secured Internet Banking site and access account information. The service is free of charge at present.

G. VISA ELECTRON SERVICE :

It is a debit card. This will replace all Q-cash card previously issued. The new card can be used at all ATMs & POS terminals that honor VISA. ATM Cash withdrawal limit per day is Taka 40,000. This is a card for TBL account holders only. Free for customers for the first year. No card fee for employees. The fee will be imposed for all for replacement of lost, stolen or damaged cards. This is not a Credit Card.

H. VISA CREDIT CARD :

Visa Credit Cards are four types:

                  a)   Visa Classic local (Silver color) – can be used only in Bangladesh

b)   Visa Gold local (Gold color) – can be used only in Bangladesh

c)   Visa Classic International (Silver color) – can be used only outside Bangladesh.

d)   Visa Gold International (Gold color) – can be used only outside Bangladesh.

         e)   Visa Gold Dual (Gold color) – Can be used both in & out of Bangladesh.

I. PASSPORT SERVICE :

Most recently Trust Bank Ltd. has introduced Passport Issue & Renewal service in the Bank for the general public. People don’t need to go to the Passport Office to get new Passport or for Renewal of Passport. The Bank will work as an agent of the Passport Office. The Bank will receive necessary papers & documents directly from the public for Renewal and Issuance of New Passport, and will charge Tk.200.00 as service charge in addition to the prescribed fee of the govt. for issuance of passport. The Bank will forward the papers and documents (received from the applicant) to the Passport Office. Passport Office will issue the passport after scrutinizing the papers and documents within the prescribed time and will forward the Passport to the respective Bank. The applicant will come to the bank after a certain (prescribed) period to receive the Passport.

Who Can Apply for Passport?

1. Any Bangladeshi citizen residing permanently in Bangladesh.

The Applicant will have to do:

1. Properly filling-up of 2 copies prescribed form issued by the Passport Office

       in English or Bengali by ink.

1. 2 copies of attested passport size photo should be attached with the two application form by gum/adhesive.

1. The following persons can attest the photo and the application form of Passport:

a)      Member of Parliament

b)      The Mayor, Deputy Mayor or the Commissioner of City Corporation

c)      Gazetted Officer

d)     University’s Teacher

e)      Chairman of the City Corporation, Upo-zilla Council and Union Council

f)       Principal of non-govt. College.

g)      Headmaster of non-govt. high school

h)      Editor of Daily News Paper

i)        Municipal Commissioners

j)        The Officers of the State Owned Bank and Self Oriented Organization or Corporation, who are at least in the 7^th grade or above 7^th grade in the New National Salary Scale.

1. The applicant has to pay Tk.200.00 (Two Hundred) excess as service charge of Bank along with prescribed fee of the Govt. (which are as follows) for the issuance of Passport.

1. Cash deposit receipt (counterfoil/carbon copy) of passport issue fee deposited to the Bank, must be attached with the application form.

Documents to be submitted with the Application Form:

1. 3 copies of Passport size and 1 copy of stamp size attested photo.
2. In case of amendment of name, certificate of S.S.C. or same graded examination or affidavit from the first class magistrate court and advertisement published in the news paper have to submit.
3. In case of amendment of age, S. S. C. or same graded examination certificate or birth certificate or birth registration certificate have to submit.
4. In case of change of occupation, certificate in favor of changed occupation have to submit.
5. In case of change of the permanent address, voter list, voter identity card or certificate issued by the persons mentioned in clause no.3 or any dependable evidence of the changed address must be submitted with the application.
6. To include the name of the children the birth certificate of the children has to be submitted with the application form. But in case of adopted child legal certificate have to be submitted.
7. If the passport is reported to be lost, in that case to apply for a new one, copy of GD entry of the lost passport from the nearest Police Station and advertisement published in the news paper should be submitted with the application form.
8. If any one wants to surrender his/her passport for any reason, he/she has to submit Passport Book along with the application form. In that case the rule of new passport will be applicable.
9. In case of service holders of the govt. /semi govt. /self-oriented concern, NOC/occupational certificate in the prescribed form have to be attached.
10. To receive the Passport Book, the applicant has to Show the deposit slip.

NOTE:    i)     The applicant must have to come physically to submit the                                            application form.

                ii)    Passport Book will be issued 64 pages for 10 years term for the                       people of 18 years & above 18 years aged and 48 pages for 05                                    years term for the children / dependant of less than 18 years old.

List of Passport Service Available Branches of TBL:

Followings are the list of passport service available (new issue & renewal) Branches of Trust Bank Ltd:

LENDING SCHEMES:

The bank lends the deposited money on different sectors and at different rates. A summary of sector wise lending and lending rate is as follows:

a TRUST HOUSEHOLD DURABLES LOAN  :

Confirmed Service holders, Businessman, Professionals have supportive cash flow to repay the loan, are eligible to avail the loan. The purpose of the loan is for purchasing household items for personal use. The rate of interest is 16% and the duration of the loan is 3 years. The loan limit is up to Tk.5.00 Lac.

b TRUST MARRIAGE LOAN  SCHEME :

Bank Provides loan up to Tk.3, 00,000.00 to meet the money for marriage purpose. Easy monthly installment for a maximum period of 36 months. The rate of interest is 17% and the down payment/equity is 20%. Age limit is 25-60 years for guardian and 25-40 years for the potential bride/ bridegroom.

c TRUST CAR LOAN  SCHEME :

Loan up to Tk.20, 00,000.00 available for purchase of new & recondition car. Maximum period for repayment is 60 months. For Minibus & Trucks the loan limit is Tk.50.00 Lac. The rate of interest is 16% and the Down Payment is 20%.

d. APON NIBASH LOAN (ANL) :

Any Bangladeshi (single or jointly with other co-borrowers e.g. spouse/son), more specifically Salaried People (employees of Govt./Autonomous body/Financial Institution/Public Ltd./Private Ltd. Co. having corporate structure, Teachers of any school/college/university), Professionals (Doctor/Engineer/Accountants. IT Professionals & Management Consultant) and Self-Employed Businessman (in business at least for five years) are eligible for the loan. The purpose of the loan is for purchasing apartment, constructing new house and taking over of House Building Loans from other Banks/Non- Bank Financial Institutions. The loan limit is Tk.50.00 Lac and the rate of interest is14.50%-15.00% for up to 15 years term. Down Payment/Equity of the loan is 40% for construction of house and 30% for purchasing of new apartment/house.

e TRUST MICRO CREDIT FOR RENOVATION & RECONSTRUCTION OF DWELLING HOUSE (RRDH) :

Small loans of Tk. 20,000.00 Tk. 30,000.00 and Tk. 40,000.00 are given to the low-income group for improving standard and quality of living. This Loan facility is only for the defense personal (army/navy/air force) for 3 years duration @12.00% p. a.

f. ANY PURPOSE LOAN :

This loan is available for the fixed income people i.e.  employee of the Govt. Organizations/Semi-Government Organizations/Autonomous Bodies/ Multinational Companies/ Banks/ Insurance Companies/ Educational Institutions/Corporate Bodies to meet instant financial requirements. The loan limit is Tk.5.00 Lac for 3 years and the rate of interest is 17%.

CHAPTER – ONE

INTRODUCTION

 BACKGROUND OF THE REPORT:

In the later 19th century, Finance was a part of the Economics. But due to the globalization and more expansion of international trade, Finance place the major role for the economic development. The development of the modern economy would not have been possible without the use of money. A first fundamental characteristic of money is that it is very much like collective goods. It is a parallel relationship between money and Banking. Bank is an important and essential institution for the necessity of the use of money and the protection of the money.

As a BBA student with major in Marketing, Financial institutions are the most appropriate field to gather the experience and among the financial institution Bank is the most prominent place. With a view to supply skilled personals in banking arena, Adamjee Cantonment College has undertaking the Internship training program for the BBA students. As a part of the BBA program I placed in The Trust Bank Limited, Millennium Corporate Branch for having practical exposure in the Bank for three months internship program.

ORIGIN OF THE REPORT: 

This report is submitted after completion of the three months Internship program in the “The Trust Bank Limited” to the Internship supervisor. The program director authorized me to submit the report on “The General Banking System of Trust Bank Limited”. The internship program was started from 16^th May and ends up 16th July 2010.

 RATIONALE OF THE REPORT:

This report is a part of my academic program. The BBA program having 120 credits in total contains three (3) credit hours on the job internship program. The internship program has been set for three (3) months period. I believe this study will be beside me in future, especially if I get myself involved in banks and other financial institutions. The program has helped me a lot to understand the organizational atmosphere and behavior.

OBJECTIVE OF THE REPORT:

Objective of the study acts as a bridge between the starting point and the goals of the study.

To illustrate the objectives properly, presented into two parts:

 General:

The main objective of the study is to obtain a clear idea about the General banking and

Foreign Exchange business of TBL’s banking operation.

 Specific:

• To observe the major outline of General and Foreign business.
• To observe the foreign correspondents of TBL.
• To observe the post import financing operations.
• To analysis the expansion of Foreign Trade business of the TBL.
• To identify the problems of it’s financing.
• To problems faced by TBL in general banking and Foreign exchange Business.
• Suggested remedial measures.

SCOPE OF THE REPORT:

The Trust Bank Limited is one of the new generation banks in Bangladesh. The scope of the study is limited to the one branch of Trust Bank Ltd only. The Report has covered organizational structure; background, functions and the performance of the bank. Since I worked in general banking division so my report covers all the activities of general banking of The Trust Bank Limited. While preparing this report I have taken information of the foreign exchange department and general banking department from employees and I have used both primary and secondary data which was available to me. But some information’s, which are confidential, I ignored in my report.

 METHODOLOGY OF THE REPORT:

a SOURCES OF INFORMATION :

Primary Data: Data has been collected primarily through correspondence with the personnel working in different desks, personnel of the head office and other branches, informal conversation with the clients.

Secondary data: The main source of published data is the auditors’ statements of financial affairs which are basically used internally by the bank. Data has also been collected by going through different circulars issued by the head office and Bangladesh bank during the tenor of the internship.

b DETERMINATION OF TIME HORIZON :

In relation to the general banking and financial performance evolution, I have gone through records, reports and documents used currently by the TBL. For the purpose of study, the horizon of three (4), from 2006 to 2009, has been chosen. Over the four year time period, the data relating to the performance of TBL have been evaluated. The basic source of the data is the auditors report used internally by the bank only.

c METHODS OF COLLECTING DATA :

The internship report has been prepared all the basis of “on the job” experience with Trust Bank limited (TBL), SKB Branch located at 195, Motijheel C/A, Dhaka. In spite of the scarcity of published data, I have tried to make the report informative and handy. The data used in the report have been compiled through different complicated ways- direct questionnaire to executives, continuous search on the ongoing accountants’ machine, and interview with internal auditor and external auditors’ report. Working with the organization for a meager period of three month is the main aspect of acquiring data and information to evaluate the culture, working environment and similar sort of affairs of the organization.

d RELIABILITY OF THE DATA :

The data collected are highly reliable in the sense that all data generated in the report are used exclusively by the TBL. The auditors’ report on the financial statements and the correspondence with different desks generate the reliable information to compose the report successfully.

e MODEL USED :  

The performance evaluation of TBL has been conducted based on the trend analysis and ratio analysis.

A) Trend Analysis: In the report trend analysis has been used in order to indicate the changes in the level of progress and growth over the last four years starting from 2006 It would show whether the present growth trend of TBL is excellent, good, satisfactory or bad.

B) Ratio Analysis: In the report, significant analysis has been made through the following ratios –

• Capital Adequacy Ratio
• Capital Fund to Deposit Liabilities Ratio
• Liquid Asset to Deposit Liabilities Ratio
• Loan to Deposit Liabilities Ratio
• Earning Asset to Deposit Liabilities Ratio
• After Tax Return on Average Asset Ratio
• Net profit to Gross Income
• After Tax Return on Equity

LIMITATIONS OF THE STUDY:

The Present study was not out of limitations. In preparing the Report, I have experienced some acute problems that have, to some extent, affected the presentation of the report.

There are some limitations in my study. I have been faced some problems during the study which I am mentioning them. The time period of this study is very short. I had only three months in my hand to complete this report, which was not enough. So I could not go in depth of the study. Sometimes the officials were busy and were busy and were not able to give me much time.

Some desired information could not be collected due to confidentially of business. Few officers sometime felt disturbed, as they were busy in their job.

Sometime they didn’t want to supervise me out of their official work. Library management and functioning is not satisfactory at many places and much of the time and energy of us are spent in tracing out the books, Journals, reports, etc. there is also the problem that many of our libraries are not able to get copies of old and new

Acts/Rule. As I am newcomer, there is a lack of previous experience in this concern. And many practical matters have been written from my own observation that may vary from person to person.

CHAPTER-TWO

BRIEF PORTRAIT OF THE BANK

 OVERVIEW OF THE BANK:

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

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

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

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

CORPORATE INFORMATION AT A GLANCE

Banking License received on                                                            : 15^th July.1999

Certificate of incorporation received on                                           : 17^th June1999

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

First branch licenses on                                                                     : 9^th August1999

Formal inauguration on                                                                     : 29^th November

1999

Sponsor Shareholders                                                                       : Army Welfare Trust

Number of Branch                                                                            : 45

NATURE OF BUSINESS :

Trust Bank Ltd offers full range of banking services that includes

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

The Bank offers a full scale commercial banking including

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

VISION AND MISSION STATEMENT:

Vision:

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

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

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

Mission:

Our mission is to make banking easy for our customers by implementing one-stop service

concept and provide innovative and attractive products & services through our technology

and qualified human resources. We always look out to benefit the local community through

supporting entrepreneurship, social responsibility and economic development of the

country.

 STRENGTH AND OPPORTUNITIES OF TBL:

Strengths:

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

Opportunities:

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

BRANCHES:

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

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

CHAPTER-THREE

DEPOSIT PRODUCTS AND SCHEMES

DEPOSIT PRODUCTS AND SCHEMES AT A GLANCE:

Deposit Products:

• Current Deposit Account
• Savings Deposit Account (interest calculated on monthly minimum balance of Tk.2000 and above)
• Fixed Deposit (1 month, 3,6,12 months & Above)
• Savings Certificate (Govt. Bond)
• Trust Smart Savers Scheme(TSS)
• Trust Money Double Scheme(TMDS)
• Trust Money Making Scheme(TMMS)
• Trust Education Scheme(TES)
• Monthly Benefit Deposit Scheme (MBDS)
• Lakhopati Savings Scheme (LSS)
• Interest First Fixed Deposit (IFFD)
• Corporate Financing
• Trust Household Durable Scheme
• Trust Marriage Loan Scheme (MLS)
• Trust Car Loan Scheme (CLS)
• Trust Apon Nibash Loan (ANL)
• Trust Micro Credit for Renovation &  Reconstruction of Dwelling Houses(RRDH)
• Trust Doctors Loan
• Advance Against Salary
• Any Purpose Loan (APL)
• Hospitalization Loan
• Trust Education Loan
• Trust Travel Loan
• Trust CNG Conversion Loan

Investment Products:

International Trade:

• International Banking
• Private Foreign Currency Accounts
• Non Resident Foreign Currency Deposit Account
• Resident Foreign Currency Deposit Account
• Travelers’ Endorsement (Cash and Travelers Cheque)
• Remittance of Foreign Currency
• Import and Export Transaction
• Foreign Exchange Dealing
• Purchase of Foreign Currency Drafts, Cheques, Travelers Cheques Wage Earner’s Development Bond

Other Services:

• Local Remittance- DD, TT, PO etc. & Inter Branch Transactions
• Trust Tele Banking
• Trust SMS Banking
• Trust Internet Banking
• Credit/debit/ VISA Card
• Visa Electron Service
• Visa Credit Card Service
• Passport Service
• Locker Service

GENERAL DEPOSIT PRODUCTS:

Trust Bank limited (TBL) offers the general deposit products in the form of various accounts. The bank allows the following kinds of accounts:

a)      Savings Account

b)      Current Account

c)      Short Term Deposit (STD) Account

d)     Fixed Deposit Account

a SAVINGS ACCOUNT :

The summary of the rules and regulations to open a savings account is as follows-

Any person or persons of more than 18 years having sound mind can open and operate this account singly or jointly. In case of a minor (a person below 18 years), a guardian can open and operate this account on his or her behalf.

Clubs, Societies and other similar organization are eligible to open such account.

• More than one account cannot be opened in the same name.
• A minimum initial deposit of Tk. 2000.00 is required to open such account.
• Money will be withdrawn through cheques. Withdrawal cannot be more than twice a week and generally the amount will not be more than 25% of the balance available, otherwise no interest will be given for that month.
• In case of closure of any account, the bank deducts Tk. 100.00 as closing charge.

INTEREST CALCULATION

 Note: Interest on the Savings deposits is calculated on the minimum monthly balance of each account. Monthly interest is not calculated on the Savings Accounts whose minimum balance is below Tk.2000.00 i.e. if minimum balance is below Tk.2000.00; no interest is calculated on the account during the month. This term becomes effective from May 01, 2006.

b & c: CURRENT AND SHORT TERM DEPOSIT (STD) ACCOUNT :

The summary of the rules and regulations to open a savings account is as follows-

• A minimum deposit of Tk.5000.00 is needed to open a current account.
• The bank charges an incidental charge of Tk200.00 per individual customer and TK.300.00 for corporate customer for every six (6) months for the maintenance of the account.
• In case of the closure, the bank charges Tk.100.00 as closing charge of the account.
• Withdrawal of money is allowed only through the leaves of the cheque book issued by the bank.

INTEREST CALCULATION

d FIXED DEPOSIT ACCOUNT :

The bank allows people to keep their idle money secured and profitable as Fixed Deposit. The interest rate that the bank offers to the fixed depositors is as follows:

 Note: FDR Interest is Subject to 10% government tax on interest earnings.

The Bank deducts the Excise duty annually, the compulsory levy of the government, on the interest earnings in the following structure:

PREREQUISITE OF OPENING AN ACCOUNT:

To open a savings, current or STD account, the following documents are mandatory:

FOR INDIVIDUAL ACCOINT:

• Two copies of Passport size Photograph of the Clients (Attested by introducer or Verified with Passports)
• Passports/ Nationality Certificate/ Employer’s Certificate of the Proprietor.
• Customer Profile.
• Transaction Profile.
• Photograph of the Nominee(s) attested by the account holder.
• TIN Certificate.

FOR JOINT ACCOUNT:

• Passports/ Nationality Certificate/ Employer’s Certificate of the Proprietor.
• Customer Profile.
• Transaction Profile.
• Photograph of the Nominee(s) attested by the account holder.
• TIN Certificate.
• Relationship between the account holders.
• Purpose of opening of the Joint account.

FOR PROPRIETORSHIP ACCOUNT:

• Two copies of Passport size Photograph of the proprietor (Attested by introducer or Verified with Passports)
• Passports/ Nationality Certificate/ Employer’s Certificate of the Proprietor.
• Customer Profile, transaction Profile.
• Photograph of the Nominee(s) attested by the account holder.
• TIN Certificate.
• Trade License.
• VAT Registration (if available)

FOR PARTNERSHIP CONCERN:

·         Two copies of Passport size Photograph of each partner(Attested by     introducer or Verified with Passports)

·         Passports/ Nationality Certificate.

·         Company Profile.

·         Transaction Profile of the concern.

·         Personal Profile of the partners.

·         Photograph of the Nominee(s) attested by the account holder.

·         TIN Certificate.

·         Trade License of the concern.

·         VAT Registration (if available)

·         Relationship between the partners.

·         Attested Photocopy of the Partnership Deed (Deed on Tk 1000.00 stamp)

·         Resolution regarding opening and operation of the account.

FOR COMPANY ACCOUNT:

·         Attested or Certified copy of the Memorandum and Articles of Association.

·         Certificate of Incorporation.

·         Certificate of Commencement of Business (for public ltd. co.).

·         Two copies of Passport size Photograph of all Directors (Attested by introducer or Verified with Passports)

·         Passports/ Nationality Certificate of all Directors of the company.

·         Company Profile.

·         Transaction Profile of the company.

·         Personal Profile of all Directors as per enclosed sheet in the company’s letterhead pad.

·         TIN Certificate.

·         Trade License.

·         VAT Registration (if available).

·         Board resolution of the company regarding opening and operation of the account.

FOR PRIVATE SCHOOL/COLLEGE/MADRASA:

·         Attested or Certified copy of the Constitution.

·         Registration Certificate.

·         List of all Executive Members (as per enclosed format).

·         Two copies of Passport size Photograph of the account operators    (Attested by introducer or Verified with Passports)

·         Passports/ Nationality Certificate of the account operators.

·         Personal Profile of all members of the governing body and Managing Committee.

·         Board resolution regarding opening and operation of the account.

FOR NGO/ CLUB-SOCIETY/CO-OPERATIVE ACCOUNT:

·         Registration Certificate from the Joint Stock Company/ Ministry of Social Welfare.

·         List of all Executive Members (as per enclosed format).

·         Board resolution as per Memorandum regarding opening and operation of the account.

·         Attested or Certified copy of the Constitution/Bylaws.

·         Two copies of Passport size Photograph of all Members (Attested by introducer or Verified with Passports)

·         Passports/ Nationality Certificate of all Members.

·         Profile of the Firm.

·         “No Objection Certificate” from the Ministry of Social Welfare.

ENTRIES TO BE PASSED WHILE OPENNING AN ACCOUNT:

Dr:   Cash Account

Cr:    Party Account (Savings/Current/STD Account)

 NEW DEPOSIT PRODUCTS:

To keep in touch with competitive market, the bank has recently introduced Six attractive deposit products. The products having their distinctive have already gained and are gaining the response from the existing and prospective clients. The products are as follows:

a) Trust Lakhopati Savings Scheme (LSS)

b) Trust Money Double Scheme (TMDS)

c) Trust Money Making Scheme (TMMS)

d) Trust Education Scheme (TES)

e) Monthly Benefit Deposit Scheme (MBDS)

f) Interest First Fixed Deposit (IFFD)

a. TRUST LAKHOPATI SAVINGS SCHEME (LSS) :

Under the LSS, the following category of deposit and maturity payment has been declared:

Applying the future value annuity due formula [FV=A {(1+i/m) ^mn – 1}(1+i/m)}/(i/m)],

Where,

FV= Future Value

A= Installment Amount

i= Rate of Interest

m= Number of Period in a year

n= Maturity Period or Number of year,

It has been found that the effective rate of interest (EAR) is 7.78%

RULES AND REGULATION:

• A person can open more than one account for any size of installment in any branch of the Bank.
• The first installment is to be deposited on any date of the month but the subsequent installment is to be deposited by the 10^th day.
• Advance payment of three installments is acceptable.
• One copy of Passport size Photograph of the account holder is needed to open LSS.
• One copy of Passport size Photograph of the Nominee(s) [attested by the account holder] is also required.
• In the event of failure of to pay installment, the arrear installment(s) should be paid before or along with the next due installment subject to the penalty of Tk50.00 for per installment to be paid.
• In case of premature closure of the account, Tk100.00 is charged as closing charge.
• Loan may be allowed up to 80% of the deposited amount but not below Tk1,00,000.00 against lien or pledge of the same account.
• Any account can be transferred from any branch to another subject to Tk25.00 as Account Transfer Fee.

• In any installment remains unpaid for six consecutive months, the account will be closed automatically and the account will be settled as below:

b. TRUST MONEY DOUBLE SCHEME (TMDS) :

Under the Scheme, the amount deposited at the very inception is doubled in 6 years. The basic structure of this Scheme is as follows:

 TERMS & CONDITIONS:

• An applicant can open TMDS account in his own name, in his/her spouse’s name or in the name of his/her children operated by the guardian. The maximum no. of TMDS accounts from a single family cannot exceed five.
• An order instrument mentioning the amount payable after maturity shall be issued favouring the depositor(s).
• In case of discontinuation of the scheme, account will be settled as per following:

a) If the premature encashment would be occurred within three months in that case no interest will be allowed.

b) If the premature encashment would be occurred after three months in that case he/she will be entitled to get prevailing savings rate.

• The depositor may select nominee(s).
• In case of death of the depositor, the amount at discounted rate will be payable to the nominee(s) or in the absence of nomination, to the legal heirs of the depositor.
• Loan facility may be allowed up to 80% of deposit amount against lien/pledge on such instrument at Bank’s prescribed rates and rules but not below Tk.50,000.
• In case of lost instrument, duplicate instrument shall be issued as per rules of lost instrument in FDR.
• Any Account can be transferred from one branch to another, in that case TK. 25/- will be charged as Account Transfer Fee.
• Interest on this scheme is subject to Income Tax/Levi/VAT etc. as and when imposed by the government.
• The Bank reserves the right to make change/alteration/amendment/addition/modification etc. to the account and to its related charges fees etc. at any time/stage without assigning any reason whatsoever.

c. TRUST MONEY MAKING SCHEME (TMMS) :

Under the Scheme, the client has to pay a down payment of Tk7,500.00 or multiple thereof and the bank contributes Tk42,500.00 or multiple thereof to form a fixed deposit of Tk50,000.00 or multiple thereof with the bank. The client is allowed an interest rate of 10.00% on that deposit. The client has to pay the amount due to the bank through monthly equal installment of Tk855.00 or multiple thereof in 6 years. The client is entitled to get the interest on FDR.

Summary of the scheme

TERMS & CONDITIONS:

• An applicant can open TMMS account in his own name, in his/her spouse’s name or in the name of his/her children operated by the guardian.
• An FDR for the value combining client’s own deposit  and bank’s contribution will be issued for three years at 10.00% which will be automatically renewed for further one term (Three years).
• In case of death of the depositor, the amount at discounted rate will be payable to the nominee(s) or in the absence of nomination, to the legal heirs of the depositor(s) on production of succession certificate.
• In the event of failure to pay any monthly installment, it will be sole responsible of the TMMS account holder to settle the arrear installment(s) before or along with the next due through a written instruction to the Bank. In such case there will be a penalty of TK.50.00 for per installment amount to be paid with subsequent installment.
• If the client fails to deposit three successive installments, the scheme will be automatically discontinued. In case of discontinuation of the scheme, account will be settled as detailed below:

Installment will be started from the following month and deadline of each installment is 10th of every month (in case of holiday next working day of every month).

• No loan facility will be allowed against the deposited amount.

d. TRUST EDUCATION SCHEME (TES) :

The TES has been introduced to assist the poor students financially and chronologically. Under the scheme, a student may deposit Tk10, 000.00 or its multiple for a period of three or five years. After the maturity period he or she may get a lump-sum amount of Tk13,400.00 (for three years maturity) or Tk 16,000.00 c or he/she may get monthly education allowance of Tk430.00 (for three years maturity) or Tk520.00 (for five years maturity) for a period of three years after maturity.

 Summary of the scheme

e. MONTHLY BENEFIT DEPOSIT SCHEME (MBDS) :

The benefit of the scheme will be paid on monthly basis. As such this is called Monthly Benefit Deposit Scheme (MBDS).

TARGET GROUP:

•  The persons who intend to meet the monthly budget of their families from the income out of their deposit. They may be retired service holders, housewife of businessman & other professionals.
• Trusts and Foundations or other associations, which award monthly scholarship/stipends to students etcTERMS & CONDITIONS:

• Deposit of TK.1, 00,000.00 (Taka One Lac) or multiples thereof shall be acceptable under the Scheme.
• The deposit shall be for a period of 5 (five) years. The principal amount is refundable on maturity.
• Profit shall be paid  on monthly basis @ Tk.900.00 and net off taxes @ Tk.810.00 per Tk.1,00,000.00
• Payment of monthly profit shall start from the subsequent month after a clear minimum gap of 30 days from the date of deposit.
• Normally, the deposit will not be en-cashable before 5 (Five) years. But  if any depositor intends to withdraw his deposit before maturity due to certain unavoidable reasons, he/she would be allowed to do so in the following manner:

• No benefit including interest shall be allowed for pre-mature encashment within three

               months

• If the accounts/deposits are closed/encashed after three months of its opening, benefit       shall be allowed on the deposit at existing normal Savings Deposit Rate.

• If the amount of monthly profit already paid exceeds the amount at normal Savings

Rate, the difference shall be realized from the principal deposit amount, if and when

necessary.

• In case of death of a depositor, the Amount shall cease to be operative and the amount deposited so far including interest as per SL. No. 5 shall be paid to the nominee, to the legal heirs of deceased as per rules in force.
• The depositor must have a separate Savings Bank Account with the Branch wherein the benefit on the amount so deposited shall be credited every month.
• The Receipt will not be transferable.
• Advance against lien on such Receipt can be allowed up to 80% of the deposit bearing normal rate of interest prevail at the time of allowing Overdraft/Loan.
• Income Tax @ Tk.10% will be deducted on the income received from the deposit and Excise Duty will be realized as per prevailing rules.

f. INTEREST FIRST FIXED DEPOSIT ( IFFD ) :         

This is a smart scheme in the sense; depositor gets the interest first and can reinvest it. Interest First Fixed Deposit works like normal FD except with one unique feature added to it. The customer receives interest in advance i.e. at the time of placing the deposit. The customer doesn’t have to wait for maturity of the fixed deposit; instead he/she can use the interest immediately and keep the investment intact till the maturity as per following arrangement.

TERMS & CONDITIONS:

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

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

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

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

SAVINGS CERTIFICATES:

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

 Bangladesh Sanchayapatra (5 years)

 3 months profit based Sanchayapatra (3 years)

 Pensioner Savings Certificate (5 years)

The interest rate allowed to each category is as follows-

Bangladesh Sanchaya Patra :

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

From January 01, 2005 to July 16, 2005 :

From July 17, 2005 to December 03, 2006 :

From December 04, 2006 to till date :

 Pensioner Sanchaya Patra:

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

From December 04, 2006to till date:

 Schedule of interest for every 3 months

 Months Profit Base Sanchaya Patra(3MPBSP) :

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

From December 04, 2006 till date:

Schedule of interest for every 3 months:

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

OTHER SERVICES:

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

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

b)   Locker Service

c)   Credit/debit/ VISA Card/AT

d)   Trust Tele Banking

e)   Trust SMS Banking

f)    Trust Internet Banking

g)   Visa Electron Service

h)   Visa Credit Card

i)    Passport Service

a.  Local Remittance:

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

There are two types of Remittances:

i)  Inward Remittance

ii) Outward Remittance

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

Demand Draft (DD):

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

Issuance of DD:

Trust Bank follows the following procedures while issuing DD :

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

Payment of DD:

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

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

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

Entries for Issuance of DD:

Dr: Cash in Hand/ Customer’s Account

Cr:  Payable Account – Demand Draft

Dr:  Payable account – Demand Draft

Cr:  TBL General Account.

Entries for DD payment with Advice:

Dr:  TBL General Account

Cr:  Payable Account – Demand Draft

Dr:  Payable account – Demand draft

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

Entries for DD Payment without Advice:

Dr:  DD Paid without Advice

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

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

Dr:  TBL General Account

Cr:  Payable Account – Demand Draft

Dr:  Payable Account – Demand Draft

Cr:  DD Paid without Advice.

ISSUANCE OF DUPLICATE DD:

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

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

CANCELLATION OF DD:

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

STOP PAYMENT OF A DRAFT:

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

 TELEGRAPHIC TRANSFER (TT):  

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

ISSUANCE OF TT:

TT Issued from Y Branch to X Branch:

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

b)      Checking the TT Application.

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

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

e)      Application of test number by the authorized officer.

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

Entries for Issuance of TT:

Dr:  Party’s Account or Cash or Otherwise

Cr:  TBL General Account.

Procedure for Payment of TT:

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

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

Entries will be as follows:

1. Dr: TBL General Account

Cr:  TT Payable Account

1. Dr: TT Payable Account

Cr:  Customer’s Account

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

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

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

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

Cancellation of TT:

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

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

PAY ORDER (PO):

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

Issuance of Pay Order:

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

Payment of Pay Order:

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

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

Entries for Issuance and Payment of Pay Order:

For Issuance of Pay Order:

Dr: cash in Hand / Customer’s Account

Cr: Bills Payable Account – Pay order

For Payment of Pay Order:

Dr: Bills Payable Account – Pay Order

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

Cash Payment against Pay Order:

Cash Payment is done on the basis of:

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

INTER BRANCH TRANSACTIONS:

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

IBCA: Inter Branch Credit Advice

IBDA: Inter Branch Debit Advice

 Issuance of IBCA & IBDA:

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

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

Responding of IBCA & IBDA:

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

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

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

Or

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

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

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

B. LOCKER SERVICE :

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

Size of Locker

Security Deposit of Locker

C ATM CARD :

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

D. TRUST TELE BANKING :

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

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

At present the service is free of charge.

E. TRUST SMS BANKING :

Trust Bank Ltd. has recently introduced SMS Banking service for the account holders of the bank. The service is available 24 hours & 7 days a week. Account holders may request their account balance & mini statement over SMS. Bank’s automated SMS service will return the result of their query over SMS. A small charge is applicable for this service.

How to Subscribe for the Service:

1. Interested customer shall fill out a service request form available at the branches.
2. Customer shall provide a valid mobile phone number of local service provider.

Customer will send the SMS to #01713244905

How to Send SMS:

• Ø For Balance Query :

“bal<space>PIN” and send it to 01713244905 (Bank will assign a PIN)

              For Example:

If PIN is 1499, customer will write “bal<space>1499” and send it to 1713244905

• For Mini Statement :

“sta<space>PIN” and send it to 01713244905

For Example:

If PIN is 1499, customer will write “sta<space>1499” and send it to 01713244905.

A small charge is applicable for this service.

F. TRUST INTERNET BANKING :

Customer with a user ID and password can login to our secured Internet Banking site and access account information. The service is free of charge at present.

G. VISA ELECTRON SERVICE :

It is a debit card. This will replace all Q-cash card previously issued. The new card can be used at all ATMs & POS terminals that honor VISA. ATM Cash withdrawal limit per day is Taka 40,000. This is a card for TBL account holders only. Free for customers for the first year. No card fee for employees. The fee will be imposed for all for replacement of lost, stolen or damaged cards. This is not a Credit Card.

.H. VISA CREDIT CARD :

Visa Credit Cards are four types:

a)   Visa Classic local (Silver color) – can be used only in Bangladesh

b)   Visa Gold local (Gold color) – can be used only in Bangladesh

c)   Visa Classic International (Silver color) – can be used only outside Bangladesh.

d)   Visa Gold International (Gold color) – can be used only outside Bangladesh.

e)   Visa Gold Dual (Gold color) – Can be used both in & out of Bangladesh.

I. PASSPORT SERVICE :

Most recently Trust Bank Ltd. has introduced Passport Issue & Renewal service in the Bank for the general public. People don’t need to go to the Passport Office to get new Passport or for Renewal of Passport. The Bank will work as an agent of the Passport Office. The Bank will receive necessary papers & documents directly from the public for Renewal and Issuance of New Passport, and will charge Tk.200.00 as service charge in addition to the prescribed fee of the govt. for issuance of passport. The Bank will forward the papers and documents (received from the applicant) to the Passport Office. Passport Office will issue the passport after scrutinizing the papers and documents within the prescribed time and will forward the Passport to the respective Bank. The applicant will come to the bank after a certain (prescribed) period to receive the Passport.

Who Can Apply for Passport?

1. Any Bangladeshi citizen residing permanently in Bangladesh.

The Applicant will have to do:

1. Properly filling-up of 2 copies prescribed form issued by the Passport Office

in English or Bengali by ink.

1. 2 copies of attested passport size photo should be attached with the two application form by gum/adhesive.

1. The following persons can attest the photo and the application form of Passport:

a)      Member of Parliament

b)      The Mayor, Deputy Mayor or the Commissioner of City Corporation

c)      Gazetted Officer

d)     University’s Teacher

e)      Chairman of the City Corporation, Upo-zilla Council and Union Council

f)       Principal of non-govt. College.

g)      Headmaster of non-govt. high school

h)      Editor of Daily News Paper

i)        Municipal Commissioners

j)        The Officers of the State Owned Bank and Self Oriented Organization or Corporation, who are at least in the 7^th grade or above 7^th grade in the New National Salary Scale.

1. The applicant has to pay Tk.200.00 (Two Hundred) excess as service charge of Bank along with prescribed fee of the Govt. (which are as follows) for the issuance of Passport.

Cash deposit receipt (counterfoil/carbon copy) of passport issue fee deposited to the Bank, must be attached with the application form.

Documents to be submitted with the Application Form:

1. 3 copies of Passport size and 1 copy of stamp size attested photo.
2. In case of amendment of name, certificate of S.S.C. or same graded examination or affidavit from the first class magistrate court and advertisement published in the news paper have to submit.
3. In case of amendment of age, S. S. C. or same graded examination certificate or birth certificate or birth registration certificate have to submit.
4. In case of change of occupation, certificate in favor of changed occupation have to submit.
5. In case of change of the permanent address, voter list, voter identity card or certificate issued by the persons mentioned in clause no.3 or any dependable evidence of the changed address must be submitted with the application.
6. To include the name of the children the birth certificate of the children has to be submitted with the application form. But in case of adopted child legal certificate have to be submitted.
7. If the passport is reported to be lost, in that case to apply for a new one, copy of GD entry of the lost passport from the nearest Police Station and advertisement published in the news paper should be submitted with the application form.
8. If any one wants to surrender his/her passport for any reason, he/she has to submit Passport Book along with the application form. In that case the rule of new passport will be applicable.
9. In case of service holders of the govt. /semi govt. /self-oriented concern, NOC/occupational certificate in the prescribed form have to be attached.
10. To receive the Passport Book, the applicant has to Show the deposit slip.

NOTE:    i)     The applicant must have to come physically to submit the                                            application form.

ii)    Passport Book will be issued 64 pages for 10 years term for the                       people of 18 years & above 18 years aged and 48 pages for 05                                    years term for the children / dependant of less than 18 years old.

List of Passport Service Available Branches of TBL:

Followings are the list of passport service available (new issue & renewal) Branches of Trust Bank Ltd:

 LENDING SCHEMES:

The bank lends the deposited money on different sectors and at different rates. A summary of sector wise lending and lending rate is as follows:

a TRUST HOUSEHOLD DURABLES LOAN  :

Confirmed Service holders, Businessman, Professionals have supportive cash flow to repay the loan, are eligible to avail the loan. The purpose of the loan is for purchasing household items for personal use. The rate of interest is 16% and the duration of the loan is 3 years. The loan limit is up to Tk.5.00 Lac.

b TRUST MARRIAGE LOAN  SCHEME :

Bank Provides loan up to Tk.3, 00,000.00 to meet the money for marriage purpose. Easy monthly installment for a maximum period of 36 months. The rate of interest is 17% and the down payment/equity is 20%. Age limit is 25-60 years for guardian and 25-40 years for the potential bride/ bridegroom.

c TRUST CAR LOAN  SCHEME :

Loan up to Tk.20, 00,000.00 available for purchase of new & recondition car. Maximum period for repayment is 60 months. For Minibus & Trucks the loan limit is Tk.50.00 Lac. The rate of interest is 16% and the Down Payment is 20%.

d. APON NIBASH LOAN (ANL) :

Any Bangladeshi (single or jointly with other co-borrowers e.g. spouse/son), more specifically Salaried People (employees of Govt./Autonomous body/Financial Institution/Public Ltd./Private Ltd. Co. having corporate structure, Teachers of any school/college/university), Professionals (Doctor/Engineer/Accountants. IT Professionals & Management Consultant) and Self-Employed Businessman (in business at least for five years) are eligible for the loan. The purpose of the loan is for purchasing apartment, constructing new house and taking over of House Building Loans from other Banks/Non- Bank Financial Institutions. The loan limit is Tk.50.00 Lac and the rate of interest is14.50%-15.00% for up to 15 years term. Down Payment/Equity of the loan is 40% for construction of house and 30% for purchasing of new apartment/house.

e TRUST MICRO CREDIT FOR RENOVATION & RECONSTRUCTION OF DWELLING HOUSE (RRDH) :

Small loans of Tk. 20,000.00 Tk. 30,000.00 and Tk. 40,000.00 are given to the low-income group for improving standard and quality of living. This Loan facility is only for the defense personal (army/navy/air force) for 3 years duration @12.00% p. a.

f. ANY PURPOSE LOAN :

This loan is available for the fixed income people i.e.  employee of the Govt. Organizations/Semi-Government Organizations/Autonomous Bodies/ Multinational Companies/ Banks/ Insurance Companies/ Educational Institutions/Corporate Bodies to meet instant financial requirements. The loan limit is Tk.5.00 Lac for 3 years and the rate of interest is 17%.

The Retail Banking Unit of Trust Bank Ltd. is also lends the following loans for the Retail Consumers:

a)      Doctors’ Loan

b)      Advance Against Salary

c)      Hospitalization Loan

d)     Education Loan

e)      Travel Loan

f)       CNG Conversion Loan etc.

LENDING RATE:

The bank lends the deposited money on different sectors and at different rates. A summary of sector wise lending rate is as follows:

INTERNATIONAL BANKING:

The Trust Bank Limited, with its wide correspondent relationship with major banks in the world is totally capable to meet your needs of foreign currency transactions and foreign trade services. You can open and maintain Accounts in foreign currencies like US Dollar, Pound Sterling, and Japanese Yen and even in Euro with us. With its own Dealing Room, TBL is able to offer competitive Exchange Rate for all major currencies of the world.

• FA Account (Foreign Nationals)
• FC Account (Bangladeshi Nationals)
• NFCD A/C
• RFCD A/C
• FC Account (Foreign Nationals)
• Completed Account opening Form signed by the account holder/s and introduced by an existing customer who has a relationship with us at least for 6 months.
• Copy of 1^st six pages of passport and relevant page with more than 6 months visa of staying in Bangladesh. (Photocopy of document must be certified as “Original seen/sighted”) Photograph/s of the signatory/signatories/account holders duly attested by the introducer. Form QA- 22 (in duplicate) Copy of work permit from Ministry of Industries (where applicable) Documented proof of address verification to be retained with the mandate. This is also applicable for;
• To open an account when the person not being present personally i.e. in a non-face to face scenario is to obtain at least one additional form of evidence (e.g. copy of utility bills/bank statements/tax clearance certificate/ employer letter/home visit) over and above what would have been obtained in the corresponding face to face situation.
• Local Legal & Compliance should be consulted, in case of doubt on the acceptable identification evidence for a particular customer type.
• Welcome & follow-up letter’ as part of additional address verification.
• Completed KYC template.

CHAPTER FOUR

PERFORMANCE OF THE BANK: AS A WHOLE

 Trust Bank Limited is a scheduled commercial bank established under the Bank Companies Act 1991 and incorporated as a public limited company under the companies act, 1994 in Bangladesh on 17 June 1999 with primary objective to carry on all kinds of banking businesses in and outside. As on 31 December 2006, the bank had 18 branches. By the 31 October 2008 the bank has opened another ten branches gearing the total number as 30. The comparative performance of the bank among different years appears as follows:

A)  TREND ANALYSIS:

ANALYSIS FROM THE BALANCE SHEET:

For the purpose of analysis the financial data of 2005, 2006, 2007 and 2008 have been taken

based on the availability of the data. The key points of the financial statements take the following figure:

a  AUTHORIZED CAPITAL:

The Authorized Capital of the bank was Tk 100.00 crore in 2005 which was increased in subsequent year 2006 by twofold. In 2007 and also in 2008 the authorized capital stands for the same worth of Tk. 200.00 crore. It is due to the bank’s future expansion philosophy and to keep rein with the market competitiveness and also for the requirement of Bangladesh Bank circular.

b  PAID-UP CAPITAL :

The paid-up capital was also increased by Tk 15.00 crore in 2005 materializing the total value of Tk50.00 Crore. The increment was done because of the bank’s future expansion philosophy and to keep rein with the market competitiveness. In the year 2008 the bank increased its Paid-up capital up to Tk.70.00 Crore by issuing shares through IPO.

c  SHAREHOLDERS’ EQUITY:

The equity of the Shareholders in 2005 was Tk.454,301,755. In 2006 it has increased by 91.65% as the total of Tk.870,685,941. In 2005, it was amounted Tk.991,972,309 being the increase of 118.38% on that of 2005. In the year 2008 the Shareholders Equity stood Tk.115,42,61,983 which was 154.07% higher than the year 2005. It is due to the expansion of the bank and the financial more strength of the army Welfare Trust.

d  STATUTORY RESERVE :

In 2005, the Statutory Reserve of the bank was Tk. 24,604,405 which stands at Tk. 67,881,642 in the year 2006. It was an increase by a gross amount of Tk 43,276,837 or by 175.88% on that of 2005. In 2007, the Statutory Reserve stands at Tk. 113,138,916, an increase by 359.83%. In the year 2008 the Statutory Reserve was near about double than the year 2007. It is due to the rise of the bank’s overall capital and the regulation under the Banking Act 1991 to keep a certain percentage (20%) of share capital or profit as statutory reserve.

e  FIXED ASSETS :

Fixed assets include Furniture and Fixture, Office equipment, Motor vehicles, office renovation and leasehold land. The depreciation on the fixed assets is charged on straight line basis at the following rates:

Furniture and Fixture                                      10% p.a

Office equipment                                            20% p.a

Motor vehicles                                                20% p.a

Office decoration                                            12% p.a

Fixed assets after deducting accumulated depreciation were in 2005 Tk.61,369,226, in 2006 Tk.83,971,729 , in 2007 Tk.110,616,082 and in 2008 Tk.14,60,54,811. It is because of the expansion of branches during that period.

f  TOTAL ASSETS :

Total assets of the bank consists of –

• Cash in hand and with Bangladesh Bank and Sonali Bank.
• Balance with other banks and financial institution.
• Money at call and short notice.
• Loan and Advances.
• Fixed assets (Furniture and Fixture, Office equipment, Motor vehicles, Office Renovation and LeaseholdLand)
• Other Assets

Total Assets of the bank was Tk.7, 858,833,009 in 2005 and Tk.12, 085,815,830 in 2006- a 53.786% increment. The value of total assets stood at Tk.14,807,905,231 in 2005-a 88.42% increase. It shows the advancement of the bank responding the market.

g  TOTAL DEPOSITS :

The Total Deposit of the bank was-

 The pictorial graph and the subsequent numerical figure show that the deposit collection was more than double than that of 2005. In 2007, total deposit was increased by 40.5% than the deposit of accumulated in 2006. So it is vivid from the viewpoint of deposit collection the performance of the bank in 2006 was far better than 2007 and in 2008 the position was  much much better than 2007.

h  LONG-TERM DEBT :

Here, the long term debt represents the borrowing from other banks, financial institutions and agents. The illustration depicts that the long term debt of the bank significantly decreased in 2007. The year wise actual long term debt was as follows:

i  LOANS AND ADVANCES :

Loans and advances of the bank constitute different purpose loans (repair and maintenance of dwelling house, customer durable loan scheme, car loan, term loan, loans against Trust Receipt etc), cash credit (cash credit, cash collateral) and overdraft (normal overdraft, secured overdraft).The total loans (excluding bill purchased & discounted), cash credits and overdrafts etc. for the four years was as follows-

 The graphical and numerical presentation depicts that loans and advances increased by 54.6% in 2006 and 116.82% in 2007 (taking 2005 as the base year). The growth level of loan and advances is about the same rate both in 2007 and 2008.

j  INVESTMENT :

Investment includes investment in government securities and investment in shares. The numerical figure of investment appears as follows:

Overall investment increased by 69.79% in 2006 being a total of Tk 3,220,777,070. But in 2007 the value of investment decreased by Tk 772,823,292 or 24% in comparison with that of 2006. In the year 2008 the overall investment was increased by 33.19% than the year 2007. The graphical presentations of Yearly Investments are as follows:

ANALYSIS OF THE PROFIT AND LOSS ACCOUNT:

The profitability of any business concern can be understood by analyzing the Profit And Loss Account of that concern. Profit And Loss Account shows the revenue generated, corresponding expenditure and the resulting profit or loss.  Analysis of the Profit And Loss Account of the Trust Bank Ltd. exhibits the following summarized information:

a OPERATING INCOME : 

In this competitive market this bank earned Tk.1, 444,597,936 in 2007 which is 38.06% greater than the gross income of 2006. It clearly indicates that this is a growing organization and will continue its success in the coming years.

b OPERATING EXPENDITURE:

Here the ratio of expenditure in 2007 has decreased than that of previous year. But the percentage of expenditure has increased @ 46.79% in 2007 which is more than the percentage increase in the Gross revenue.

c PROFIT BEFORE TAX :

The Actual Profit before Tax of the bank was as under:

From the information mentioned above a comment can be made that Year-2006 was its “Golden Age”. But in 2007 it also increased its “profit before tax” and gained a honorable position in the banking sector. In the year 2008 the Bank earned a remarkable Profit which is near about double than the profit of the year 2007.

d  PROFIT AFTER TAX :

The Actual Profit after Tax of the bank was as under :

And the amount for the provision of tax was –

From the above mentioned statement, it is vivid that the net profit touches the peak in 2006 by accomplishing a stunning rise of 217.68%. But the journey of increasing profit can be backward in 2007. The After Tax Net Profit went down by 43.95% in 2007 comparing the profit of 2006 the Provision for Tax played a significant role in this respect. Of course, the After Tax Net Profit in the year 2008 shows the upper trend which was 116.59% higher than the year 2007.

NUMBER OF BRANCHES:

Like other commercial banks it has not centralized its branches only in Dhaka and around Dhaka. It is trying hardly to spread the banking benefits to the door of general people. So it added three new branches in the Year-2005, four new branches in 2006 and six new branches in the year 2007.

TREND OF OTHER FINANCIAL STATEMENT ISSUES:

B) RATIO ANALYSIS:

Comment: Although the cost of fund went down in 2007 by 0.07%, the profitability of the bank was declining. Return on Investment went down significantly by 12.13% and the Return on Assets also went down by more than half i.e. 0.97%. Moreover, there was a shortage of capital adequacy in 2007 as the ratio fell down from 15.20% to 12.49%, although the Credit in response to Deposit increased by a little bit, by 1.40%. So it can be said that investment was not efficiently made. Concentration should also be given to the Capital, Deposit and Credit Management.

CHAPTER FIVE

DISCUSSION AND FINDINGS

SWOT Analysis of Trust Bank Limited:

SWOT Analysis is an important tool for evaluating the company’s Strengths, Weaknesses, Opportunities and Threats. It helps the organization to identify hoe to evaluate its performance and can scan the macro environment, which is turn would help the organization to navigate in the TurbulenceOcean of competition. Following is given the

SWOT analysis of The Trust Bank:

 STRENGTHS:

Sponsors:

The Trust Bank has founded by The Army Welfare Trust. The main sponsor for this bank is Sena Kalyan Sangstha. The chairperson of this bank is Chief of Army Staff and directors are also appointed by the sangstha, that’s why the sponsor does not have any problem for the fund.

Top Management:

The top management of the bank, the key strength for The Trust Bank has contributed heavily towards the growth and development of the bank. The top management officials are army’s highest position holder, so they have a good idea about the current situation.

Company goodwill:

The Trust Bank has created a good reputation in the banking industry of the country. Their main customers are army persons. The popularity of this bank is increase day by day also in the general public area.

Retail Banking:

The bank has already lunched retail-banking division to sell their products as well as increase customers or clients

Modern Facilities and Computer:

From the very beginning The Trust Bank tries to furnish their work surroundings with modern equipment and facilities. For speedy service to the customer, The Trust Bank had installed money-counting machine in the teller counter. The bank has computerized banking operation under software called PC banking. More over computer printed statements are available to internal use and occasionally for the customers. The Trust Bank is equipped with telex and fax facilities.

Rousing Branches:

From the formative stage of The Trust Bank tried to furnish their branches by the impressive style. Their well-decorated branches gets attention of the potential customer, this is one kind of positioning strategy. The Millennium Branch is also impressive and is comparable of foreign banks.

Interactive Corporate Culture:

The corporate culture of The Trust Bank is very much interactive compare to other local organization. This interactive environment encourages the employee to work attentively. Science the banking jobs is very much routine work oriented and lovely environment boots up the work capability of the employees.

Online Banking:

It is so important for every bank because today’s world is very much dependent on computer which means E-banking. By offering such kinds of facilities TBL increase clients and maximize customer’s satisfaction.

Attractive location:

TBL branches location are attractive that most of branches are located near the army cantonments and also charming location, which convey historical evidence.

Infrastructure facilities:

TBL’s maintains good infrastructure inside and outside at the office that brings positive feelings about the banks in the minds of the customers. EX-separate room for manager and others senior officers which keep the individual personality.

Micro credit

There is a micro credit division, which is strength of TBL. Islamic banking Introduction of Islamic Banking

WEAKNESSES:

Limitation of Information System (PC Bank):

PC bank is not comprehensive banking software. It is desirable that a more comprehensive banking system should replace PC bank system.

Hierarchy Problem:

The hierarchy problem treated as a weakness for The Trust Bank, because the employee will not stay for a long. So there will be a chance of brain drain from this bank to other bank.

Advertisement Problem:

There is another weakness for The Trust Bank is advertisement. Their media coverage is so much low that people do not know the bank thoroughly.

Limited Branches:

Limited branches are another weakness of TBL among most other commercial bank.

OPPORTUNITIES:

Diversification:

The Trust Bank can pursue diversification strategy in expanding its current line of business. They do not serve not only the army but also the general people.

Business Banking:

The investment potential of Bangladesh is foreign investors. So EBL has opportunity to expand in business banking.

Credit Card:

There is an opportunity to launch Credit Card in Bangladesh by EBL. Beside this, EBL can acquire services for cards like VISA, MASTER CARD etc. So that they can enhance the market based card service.

New Branches:

TBL has great opportunity to expand branches in different EPZ and other commercial areas.

Expand Micro Credit Program:

This is the possible way to earn more profit by limited investment. If TBL emphasize in this

division it has huge opportunities to maximize their profit among other divisions.

THREATS:

Contemporary Banks:

The contemporary banks of The Trust Bank like: Dhaka Bank, Dutch Bangla Bank, National Bank, Mutual Trust Bank, Mercantile Bank are its major rivals. They are carrying out aggressive campaign to attract lucrative clients as well as big time depositors. The Trust Bank should remain vigilant about the steps taken by these banks, as these will in turn affect The Trust Bank strategies.

Multinational Bank:

The Rapid expansion of multinational bank poses a potential threat to new PCB’s. Due to the booming energy sector, more foreign banks are expected to operate in Bangladesh. Moreover, the existing foreign banks such as HSBC, AMEX, CITI N.A, and Standard Chattered Grindlays are now pursing an aggressive branch expansion strategy. Since the foreign banks have tremendous financial strength, it will pose a threat to local bank to a certain extant in terms of grabbing the lucrative clients.

Default Culture:

Default culture is very much familiar in our country. For a bank, it is very harmful. As The Trust Bank is new, it has not faced it seriously yet. However as the bank grows older it might become big problems.

Others:

• Poor economical condition of our country.
• Entrance of new private commercial banks
• Different attractive service offered by some foreign banks.
• Daily basis interest on deposit offered by some Multinational banks.
• Existing cards service of different banks.

CHAPTER SIX

CONCLUSION AND RECOMMENDATION

CONCLUSION

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

The success of Trust Bank limited is largely credited to its friendly, co-operative approach, understanding the special banking needs of each and every client and concern for the benefits and welfare. From the beginning, the prime objective of Trust Bank limited was to increase capitalization, to maintain disciplined growth and high corporate ethics standard and enhance the health of the share holders. Its customer service is very much impressive than of other financial institutions. Their effective strategy, time demand offerings, up to date rules and regulations to cope with international market and their friendship customer services easily impress the clients. So, now Trust Bank limited is in leading position in Financial Institutional sectors in Bangladesh. The financial performance of the bank in recent years is pretty well. Moreover, any laxity in operational ground can considerably be compensated through the cordial services provided by a staff of talented officers or employees.

Proper financial system of a country can contribute towards the development of that country’s economy. In our country Bangladesh, banks have a leading power to its financial system. For this reason, the banks should have a potential role to make our financial system.

In this arena, private commercial banks are playing a vital role in the development of our economy. But Govt. and Bangladesh Bank play a crucial role to the private commercial banks
 RECOMMENDATION

Through conducting this study I have acquired some practical knowledge about export import business in Bangladesh & and other relevant matters. Now I would like to provide some recommendation which may be helpful to promote the export import business of The Trust Bank Limited as well as Bangladesh. As per earnest observation some suggestions for improvement of the situation are given below:

• For attracting more clients The Trust Bank Limited has to create a new marketing strategy which will increase the total export import business.
• Effective and efficient initiative is necessary to recover the default loans.
• Attractive incentive package for the exporter will help to increase the export and accordingly it will diminish the balance of payment gap of The Trust Bank Limited.
• Introduction of attractive WES which will increase the remittance.
• For the foreign exchange officials long terms training very much essential.
• For a sound and stale foreign exchange operation, The Trust bank Limited should give more emphasis on the foreign exchange department.
• Foreign exchange operation of other renowned commercial banks is more dynamic and less time consuming. The Trust Bank Limited should take some initiative to compete with those banks.
• Bank can provide foreign market reports which will enable the exporter to evaluate the demand for their products in foreign countries.

 BIBLIOGRAPHY

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

 REFERENCES

• Annual Report 2007, 2006 & 2005 of Trust Bank Limited.
• “Banks and Banking” Published by Bangladesh Bank statistics Department.

Internet:

• http://www.bssnews.net
• http://www.news.bbc.co.uk
• http://www.southasianmedia.net
• http://www.wto.com
• http://www.google.com
• http://www.trustbankbd.com