General Banking System of SBL

General Banking System of SBL

General Banking System is the front-side banking service department. It provides those customers who come frequently and those customers who come one time in banking for enjoying ancillary services. The officers of this department have to perform the following tasks:

1)      Account opening and close.

2)      Collection of cash, cheque from customers.

3)      Issuing of FDR, pay orders, cheque books and demand draft.

4)      Assisting customer to open various deposit scheme.

5)      Conducting clearing house activities.

6)      Collection of local and outward bills.

SBL General banking is divided into six sections.

1)      Account opening section.

2)      Bills Collection and Clearing section.

3)      Remittance section.

4)      Deposit section.

5)      Account Section

6)      Cash section.

Privilege to Open Account 

Who can open Account?

–          Minor (Minor can open the account in the name of the minor’s guardian or jointly with the guardian)

–          Discharged bankrupt

–          Proprietorship firm

–          Partnership firm

–          Limited company

–          Non-trading concerns

–          Co-operative society

–          Corporation and Public body

Who can’t open Account?

–          Minor (Minor is not allowed individually open account)

–          Drunker

–          Undercharged bankrupt

–          Insane

Account Opening Section 

Process of Account Opening

The Banker must keep on his record the particulars of each account holder and his introducer namely, full name, address, occupation, specimen signature, nominee etc. The particulars are essential for identification of the account holders individually so that the banker can discharge his obligation to everyone correctly and to the extent due.

Step: 01- Introduction

It appears established that the banker must not open an account for a stranger to him. Before opening an account he must first satisfy himself about the identity of the proposed account opener, his integrity and respectability. This is essential in order that a fictitious person or a person incapable of making a valid contract does not open an account. To meet the requirement of law the banker has been accustomed to obtaining an introduction for each account from a responsible person known to him or having already a duly introduced account with him, after recording his name, address, occupation and signature in the   account opening form. In addition to this the bank Manager should talk to the proposed account opener in an informal way while opening the account and try to gather as much information as are possible about his affairs and thereby satisfy himself about his bona fides.

About whether the introduction is avoidable while opening an account, can be replied in the affirmative if the banker can ensure without fail that he will not undertake any collection or agency work on behalf of the account holder, and that the operations on the account will be strictly limited to deposits and withdrawals only. This is practically not possible because of varied nature of transactions that the modern banker undertakes on behalf of his customers.

Step: 02- Account Opening Form     

Each banker has his own printed forms, more or less alike, for opening different types of accounts. The relative form is required to be filled up correctly and authenticated by the proposed account opener under his dated signature at the time of opening the account. This document is very important as it governs the relationship between the banker and the account holder, containing an undertaking by the latter that he agrees to comply with the banker’s existing rules for conduct of such an account.

Step: 03- Enclosing Documents

Each account opening form consists of Know Your Customer (KYC-from April, 2002 it is mandatory) form, Transaction profile, and Nomination form. In KYC form interested account opener described himself, about name, occupation, address, and introducer and so on. In Transaction profile he or she filled estimated monthly transactions. And Nomination form is fills up to identify account holders nominee or nominees who will be paid up total or portion of the account’s balance if the account holder died. Except Nomination Form all those are needed for company and other organization. With those documents, some other identification documents like passport, Union Perished Chairman Certificate, Ward Commissioner Certificate, Voter ID Card, Corporate ID card, Memorandum of Associations, Articles of Association, Trade License etc. must be enclosed with the opening form.

Step: 04- Specimen Signature

One or more specimens of the account opener’s usual signature are maintained by the banker on his record. These are the signatures the banker recognizes for the purpose of customer’s signing cheque on the account and issue of other instructions to him or her for execution. Any instruction of the customer under signature not in conformity with the specimens is not to be acted upon by the banker under any circumstances.

Step: 05- Recording of Specimen Signature

Each specimen signature should be individually attested by an authorized officer under his signature and any unattested signature recorded with the banker should be arise doubt as to its genuineness. Where fresh signatures are required to be recorded subsequently the same can be done either on the original signature card if there is space or on a separate signature card. In both the cases the signatures should be attested individually by an authorized officer and the date of recording the signatures should also be noted. But fresh signatures should not be recorded unless requested for by the account holder in writing showing reason and he is known to the banker or properly identified, as otherwise a cheat may put in a signature to defraud the banker.

Step: 06- Custody and Safe-keeping of Signature Cards

The signature cards should always be kept under such a proper custody as to prevent them from falling into unauthorized hands and also to exclude the possibility of fraudulent substitution thereof. There are instances of frauds and forgeries where additional signatures were subsequently inserted in the signature card without authorization or the signature card itself was replaced containing fresh signatures and cheque were paid without noticing the tampering. These frauds and forgeries would not have been possible had the absence of attestation of the signatures individually and the necessity of safe custody of the signature cards been not ignored by the bank officer.

Step: 07- Initial Deposits

The initial deposits for opening an account may be for any amount but the bankers sometimes prescribe a minimum. This initial deposit should be in cash or at the most if unavoidable, a cheque drawn by the account opener in favor of or a banker’s draft payable to the banker with whom the account is opened. A cheque collected for initial deposit in an account cannot be said to have been collected for a ‘customer’ in good faith and without negligence for the purpose of protection under section 131 of N/A if the account opener has no tile to the cheque.

Step: 08- Thanks Letter

After initial deposits the banker doesn’t issue cheque at the same time. Bank sends Thanks Letter to thanking the account openers to open accounts in its branch. This letter treats customers as honorable persons as well as it creates good faith and relationship with the bank. But most important thing of this letter that it is one kind of technique to verify the validity of the customers given information. Because, when the registered letter is returned because of wrong information about their name or addresses, it cannot be explained that there is a possibility of fraudulent. And then banker must have to stop the accounts and issue of the cheque.

Step: 09- Issue of Cheque Book

If the account opener is known person, then cheque book can be issued before the Thanks Letter. For issue of a cheque book there should be a request from the account holder. The first one is issued on basis of the request printed on the account opening form but not before the account is opened. No cheque book will be issued except by an authorized officer. While issuing a cheque book the account number should be noted on each leaf. This is essential for identification of the concerned account easily on receipt of a cheque on any other account. Immediately, after issue of a cheque book, its number should be noted on the ledger page of the account under dated authentication of an authorized officer.

Deposit Section 

Deposit is the lifeblood of a bank. From the history and origin of the banking system

We know that deposit collection is the main function of a bank.

 Accepting deposits

The deposits that are accepted by Standard Bank like other banks may be classified in to,—

a) Demand Deposits

b) Time Deposits

a) Demand deposits:

These deposits are withdrawn able without notice, e.g. current deposits. Standard Bank accepts demand deposits through the opening of,-

i) Current account

ii) Savings account

iii) Call deposits from the fellow bankers

b) Time deposits:

A deposit which is payable at a fixed date or after a period of notice is a time deposit. Standard Bank accepts time deposits through Fixed Deposit Receipt (FDR), Short Term Deposit (STD) and Bearer Certificate Deposit (BCD) etc.

While accepting these deposits, a contract is done between the bank and the customer. When the banker opens an account in the name of a customer, there arises a contract between the two. This contract will be valid one only when both the parties are competent to enter into contracts. As account opening initiates the fundamental relationship & since the banker has to deal with different kinds of persons with different legal status, Standard Bank   officials remain very much careful about the competency of the customer

 Types of Deposit Accepted By SBL (Mohammadpur Br):

Account opening is the gateway for clients to enter into business with bank. It is the foundation of banker customer relationship. This is one of the most important sections of a branch, because by opening accounts bank mobilizes funds for investment. Various rules and regulations are maintained and various documents are taken while opening an account. A customer can open different types of accounts through this department. Such as:

 These three types of accounts are most important for bank. And another account are following:

• Fixed Deposit Receipt (FDR) Account
• Deposit Scheme Account.
• Bearer Certificate of Deposit

 Savings Account

This deposit is primarily for small-scale savers. There are certain limitations in Savings Account, i.e., customer can draw only three days in a week, if they want to get interest on the deposited money. If a customer draws more than twice in a week he will not receive any interest for that month. Heavy withdrawals are permitted only against prior notice. Some Important Points are as follows-

•   Minimum opening deposit of Tk.2000/= is required;
•   For saving account interest rate is 6%,
•   Minimum Tk. 1000/= balance must always maintain all the time;
•   Withdrawal amount should not be more than 1/4^th of the total balance at a time and limit twice in a month.

Customer Benefit:

  Cheque book facility

  Opportunity to apply for safe deposit locker

  Utility payment service

  Collect foreign remittance

  Transfer of fund from one branch to another by-

–          Demand draft

–          Mail transfer

–          Telegraphic transfer

–          Online banking service.

 Current Deposit Account

The Mohammadpur branch of Standard Bank facilitates customers with different types of current account. There are current accounts for individuals, proprietorship firms; partnership firms, Joint Stock Company, school, college, association, trust and N.G.O. Account opening form for these categories are different.

Some terms and documents may differ but the overall process of account opening is similar to that of the saving account. Here I like to state what kinds of information to be furnished in the form and which documents customer should provide.

Current Account (individual):

Mohammadpur branch uses the forms distributed by the SBL head office for opening a current personal/ individual account. A customer should meet the following requirements to see an account has been opened in his/ her name:

• Name of the applicant
• Profession or business of applicant
• Address of the applicant
• Photographs of the applicant
• Introduced by an account holder of the branch
• Signature on the application form
• Signature on the specimen signature card
• Verification of details and signatures by authorized officer.

Current Account (Proprietorship):

To open a proprietorship current account photocopy of trade license, attached by the concerned officer, is required along with the procedure mentioned for individual current account.

Current Account (Partnership):

Opening procedure of a partnership current account is almost same as the opening of individual current account but some additional documents are required which are follows:

• Partnership deed
• Letter of partnership
• Trade license

Current Account (Joint Stock Company):

 All the formalities of individual current account opening should be met for the opening of Joint Stock Company; additionally following documents also should be submitted to the bank. These documents are:

• Registration certificate from Register of  joint stock companies
• Certificate incorporation
• Memorandum of association
• Articles of association
• Annual audit report
• Copy of board Resolution containing
• the authorized persons have to operate the bank account on behalf of the company.
• Name of the persons authorized to deal documents with the bank.

SBL current account meets the needs of individual and commercial customers through its schedule benefit.

Customer Benefit:

• Cheque book facility
• Opportunity to apply for safe deposit locker facility
• Collect foreign remittance in both T.C. and Draft.
• Transfer of fund from one branch to another by
  • Telegraphic Transfer
  • Demand Draft
  • Mail Transfer
  • Collection of cheque through  clearing house
  • Online banking service.

 Short Term Deposit (STD)

Short Term Deposit or STD account opening procedure is similar to that of the saving account. The difference is the interest rate.

Bank Deposit:

 Other than Bank Deposit:

• Public Bank Deposit: ( Govt., Semi Govt., Autonomous Body, Educational Institutions, Association, Trust and NGO)

• Private Deposit:

Features:

• Minimum 7 days notice is needed for the withdrawn of the both STD. but it is now become practice to withdrawn money by the client without any earlier notice.
• If any financial organization or any autonomous bodies open this account then no excise duty will be deducted but tax will be deducted.
• Interest rate is calculated on daily basis.

Fixed Deposit Receipt

Fixed Deposit is the amount deposited by the customer for a fixed period of time. It offers comparatively higher rate of interest. For 1 month interest rate is 9%, for 3 months interest rate is 11%, for 6 months interest rate is 11.5% and for 1 year interest rate is 12%.

Procedure of FDR Account:

• Bank provides the interested customer a Fixed Deposit form.
• Customers fill the form, which contains name of the customer, amount of money, duration, rate of interest etc.
• After filling the form customer pay the money by cash or cheque.
• After receiving the form from the customer the respected officer look for the cash seal or transfer seal. If any of these are present and the form is properly signed the officer provides a specimen signature card to the customer.
• Customer signs thrice on the specimen signature card along with his or her full name.
• At the same time respected officer issue a fixed deposit receipt on the specific FDR block.
• This block includes:
• Name of the customer
• Amount of money deposited
• Date on which the is deposited
• Due date- on which the FDR will be matured.
• Duration for which FDR has been made.
• Rate of interest to be paid.

An FDR is renewed automatically if the customer does not come to cash it after the maturity period. It can also be renewed upon the direction of the customer.

Features:

• Interest is compounded once a quarter
• Loan may be allowed up to 80% of the deposited amount under lien.
• Exercise duty and source tax etc. are deductible from the depositor profit.

Bearer Certificate of Deposit (BCD):

The objective of BCD is to convert black money into white and to reduce Hindu business. Bearer Certificate of Deposit account is almost same as Fixed Deposit account. But in case of BCD account no name and address are mentioned, the customer opens this type of account as a bearer, any person who bears the BCD receipt can encase it. Another difference of BCD with FDR is that the customer deposits the money deducting the interest. At the maturity he withdraws the total money for which he opened the BCD account.

Interest rate on BCD account is same as fixed deposit account:

For 3 months @ 9.25%

For 6 months @ 9.50%

For 1 Year or above @ 9.75%

Accounting treatment in case of issuing of BCD,-

Cash A/c Debit.

BCD A/c Credit.

Accounting treatment in case of encashment of BCD,-

BCD A/c ………………….Dr.

Excise Duty on Deposit ……..Cr.

Tax on Interest ……………….Cr.

Cash A/C …………………Cr.

In a very recent circular of the central Bank i.e. Bangladesh Bank directed all commercial bank’s not to open any BCD Account due to preventive measures and protection of Money Laundering.

Deposit Scheme:

Under deposit scheme, the Standard Bank Ltd (SBL) offers different types of products (scheme) to help the fixed income people to save money and meet any future financial obligations. The schemes offer a large amount of money after a certain period of time if the account holders deposit a specific amount on monthly basis. The schemes are-

•  Three stage savings scheme
•  Monthly benefit scheme
•  DI+ (Double Income Plus) Account
•  SRDP (SBL Regular Deposit Program
• SSRIP (SBL Regular Income Program)
•  SBL Millionaire Plus
•  SBL Lakhopati plus
•  Marriage savings scheme
•  Juniors savers scheme
•  Lakhpati scheme.

 Monthly Benefit scheme (MBS)

The Monthly Benefit Scheme (MBS) is a deposit scheme where the depositor gets monthly benefit out of his deposit. The scheme is designed for the benefit of persons who intend to meet the monthly budget of their families from the income out of their deposit.

Any citizen of Bangladesh can open this scheme. The scheme can be opened in the name of an individual only. MBS is perfect for those 18 of age or older. To open the scheme requires deposit of BDT 1, 00,000/= or its multiples but maximum BDT 1,00,00,000/=. The deposit will be for a period of 2/3/5 years and the principal amount is refundable on maturity.

Monthly Benefit: Benefit will be as per the following example:

 SBL Regular Deposit Program (SRDP):

If any monthly installment remains unpaid for 5 (five) consecutive months, the account will be closed automatically and the account will be settled as detailed below:-

 If failure to pay monthly installment on due dates he/she will pay penalty of Tk. 20/-(Twenty) next subsequent installment.

Monthly Installment, Tenure and Maturity Value will be as per following Schedule:-

 SBL Regular Income Program (SRIP):

• SBL Regular Income Program is an income program, which helps you to earn a monthly fixed amount on your deposits at SBL for period of 3 years.
• Deposit of Tk. 50,000/- (Fifty Thousand) and multiples thereof but maximum limit of Tk. 25, 00,000/- (Taka Twenty Five Lac) at a time and depositor will earn 36 equal monthly profit.

   Depositor can earn money due date as per following schedule:-

N. P: This schedule changeable.

 SBL Double Income plus (DI+) Program:

• Deposit of Tk. 10,000/- (Ten Thousand) and multiples thereof will be acceptable under this program.
• A specially designed receipt shall be issued for the deposit under this program.
• . The instrument shall be issued for 5 years 6 month.
• At maturity after 5 years 6 month the depositor will be get double plus (DI+).
• If any depositor intends to withdraw his deposit before maturity, the following rules will apply:-

a)      No benefit including interest/profit shall be allowed for pre-mature encashment within 1 (one) year.

b)      If the accounts/deposits are closed/en-cashed after 1 (one) year of its opening interest shall be allowed on the deposit at prevailing FDR Interest Rate.

• The instrument will be acceptable as collateral security against any investment subject to registering lien with the issuing Branch.
• In case of instrument get lost, the procedure for the issuance of a duplicate receipt will be the same as applicable in case of loss of FDR.

 SBL 5 (Five) Lac Savings Scheme:

• Anybody can open this scheme by Deposited Tk. 5,000/-(five thousand) only per Month.
• The tenure of the scheme is 6 (six) years.
• After Six Years Depositor will get Tk. 5,20,000/-.
• If failure to pay monthly installment on due dates he/she will pay penalty of Tk. 20/-(twenty) on next subsequent installment.
• In case of premature close of the account the account holder will get savings rate interest but not interest less than 6 (six) months.
• If 4 (four) consecutive monthly installment unpaid the account will be closed automatically.

SBL Millionaire Plus (SLP+) Programs:

• The depositor will have the option to choose any installment size at the time of opening of the account and will not be allowed change the size of installment afterwards.
• In case of premature closing of the account minimum after 1 (one) year completion, the account holder will get Saving Rate of Interest only. But no interest will be paid before 1 (one) year completion of continued payment.
• In case of premature close of the account the account holder will get savings rate interest but not interest less than 6 (six) months.
• If any client fails to pay monthly installment on due dates in maximum 4 (four) months he/she will pay penalty of Tk. 20/- (Twenty) per month to the next subsequent installment.
• If any client fails to pay 4 (four) consecutive monthly installments the account will be closed automatically.

Monthly Installment, Tenure and Maturity Value will be as per following Schedule:

SBL Millionaire plus (SMP+) Program:

• The depositor will have the option to choose any installment size at the time of opening of the account and will not be allowed change the size of installment afterwards.
• In case of premature closing of the account minimum after 1 (one) year completion, the account holder will get Saving Rate of Interest only. But no interest will be paid before 1 (one) year completion of continued payment.
• If any client fails to pay monthly installment on due dates in maximum 4 (four) months he/she will pay penalty of Tk. 20/- (Twenty) per month to the next subsequent installment.
• If any client fails to pay 4 (four) consecutive monthly installments the account will be closed automatically.