General Banking System of Standard Bank Limited

Introduction

Any academic course of the study has a great value when it has practical application in the real life. Only a lot of theoretical knowledge will be of little importance unless it is applicable in the practical life. So we need proper application of our knowledge to get some benefit   from   our theoretical knowledge in our practical life. Building a strong base of practical knowledge is possible through thesis. When theoretical knowledge is obtained from a course of study, it is only the half way of the subject matter. Thesis implies the full application of the methods and procedures through rich acquired knowledge of the subject matter can be fruitfully applied in our daily life, such a procedure of practical application is known as internship.

The internship program is an integral part of the BBA program that all the students have to undergo of Bangladesh University. The students are sent to various organizations where they are assigned to one or more projects. At the end of the program, the internships are required to place the accomplishments and findings of the project through the writing of the internship report covering the relevant topics. During this program, supervisor guides each student one from the university and the other from the organization.

The case study is entitled “General Banking System of Standard Bank Limited (Mohammadpur Branch). As a student of BBA, this study will be more significant in my practical life; I have worked at Mohammadpur Branch of Standard Bank Limited to complete the internship program as an academic requirement.

Scopeof the work

In this internship period, there are lots of learning points. Mainly it helps to gather knowledge about the General Banking activities, and others sector of Standard Bank Ltd.

It consists of opening an account, issuing of cheque book, clearing activities; inter branch transaction, closing of account, collection of bills, issuing FRD, Pay order, and demand draft etc.

 Objective of the Study

The objective of this program and the report can be divided into two types, such as primary objectives and secondary objectives.

Primary Objectives

• To gather an overall idea about general banking activities of Standard Bank Ltd.
• To gain practical experience of Account Opening procedure of a bank.

  Secondary Objectives

• To identify the procedure of collection cash, cheque from customers.
• To identify the procedure of issuing FDR, pay orders, cheque books and demand draft. .
• To identify the procedure of conducting clearing house activities.
• To identify the procedure for collection of local and outward bills.
• To recommend some suggestions to improve general banking activities.

Practical life; I have worked at Mohammadpur Branch of Standard Bank Limited to complete the internship program as an academic requirement.

 Limitations of the Study 

During the course of practical training, I have faced some problems, which might be termed as the limitation of the study. The problems which I faced are as follows:

Non availability of adequate data:  It was very tough to collect data for making a comparative study on the performance of the different area. So I was not able to gather all information data for preparing a more in depth presentation.

Inadequate support from the administration: Since the company personnel of the Standard Bank Ltd are very busy, in some case I could not communicate with them properly where I required and they also could not help me.

Fears to disclosure: The administration was afraid to disclose the organizational information. It was also constraint for the study.

 Literature Review

What is Bank?

Bank is a financial institution that undertakes the banking activity ie.it accepts deposits and then lends the same to earn certain profit.

  Features of Bank:

• Money Dealing
• Acceptance of Deposit
• Grant of loan and advances
• Payment and withdrawal of deposits
• Transfer of funds
• Portfolio management
• Foreign Exchange dealing

What is banking?

In simple words, Banking can be defined as the business activity of accepting and safeguarding money owned by other individuals and entities, and then lending out this money in order to earn a profit.

What is Remittance?

Remittance is any form of money transfer or payment done from your working country to home country.

 What is loan?

Loan is an amount of money advanced to a borrower, to be repaid at a later date, usually with interest. Legally, a loan is a contract between a buyer (the borrower) and a seller (the lender), enforceable under the Uniform Commercial Code in most states.

Pay order?

Negotiable instrument (such as a draft) which instructs a payer bank to pay a certain sum to a third party.

Overview of the organization

General Information 

The Standard Bank Limited witnessed record achievement in its business performance during the year 2011. The Bank was incorporated as a Public Limited Company on May 11, 1999 under the Companies Act, 1994 and it achieved satisfactory progress from its commercial operation since June 03, 1999. SBL introduced several attractive products and services and extended loans and credits to different sectors of the economy. Besides, the Bank has already introduced real time on-line banking and it is now fully automated. Through all these myriad activities, SBL has created a positive impact in the banking sector of the country

 Vision 

To be a modern Bank having the object of building a sound national economy and to contribute significantly to the Public Exchequer.

  Mission 

To be the best private commercial bank in Bangladesh in terms of efficiency, capital adequacy, asset quality, sound management and profitability.

Goals

• Develop a realistic deposit mobilization plan.
• Develop appropriate lending risk assessment system.
• Develop capital plan.
• Develop a system to make good advances.
• Develop a recruitment, compensation, training and orientation plan.
• Develop a plan for offering better customer service.
• Develop appropriate mgt structure, systems, procedures and approaches.
• Develop scientific MIS to monitor bank’s activities.

  Strategies

• Synchronized and steady growth of the bank.
• Utilize all available resources to develop various plans, policies and procedures in each of the objective and goal areas.
• Implement plans, policies and procedures.
• Utilize a team of professional employees.
• Search for a total customized solution of I.T. for the purpose of full automation step.

 Slogan

Slogan, with which the bank is moving forward, is “Setting a new standard in banking”.

  Core Values 

• Shareholders: By ensuring fair return on their investment through generating stable profit
• Customer: To become most caring bank by providing the most courteous and efficient service in every area of their business
• Employees: By promoting the well being of the members of the staff
• Community: Assuring our socially responsible corporate entity in a tangible manner through close through adherence to national policies and objectives.

  SBL Management 

Among the living creatures on earth the greatest creation of the Almighty is mankind. Allah has given human being immense power of knowledge, wisdom, intelligence, consciousness and so on. These qualities have made them different from others. By the best use of these qualities in men it has been possible for our world of today to reach this stage of modern science & technology. Of all existing powers, human resources are the most invaluable productive power in our daily life, in organizational needs & in diversified fields of action towards advancement. So, human resources division of standard bank limited plays a very critical role in formulating policies, developing practices and in achieving its goal by properly utilizing the existing skilled manpower and also hunting best hands through an abstract and absolute recruitment policy in the right dimension.

Management hierarchy of the Standard Bank Ltd:

Products & Services

Standard Bank Limited has two types of products & services:

1. Deposit Product

• Current Deposit
• Savings Deposit
• Short Term Deposit
• Fixed Deposit
• Deposits Under Scheme

2. Loan Products

• Secured overdraft
• General Loan
• House building Loan
• Staff Loan
• Transport Loan
• Loan Against Trust Receipt
• Payment against document
• Packing Credit
• Lease Finance
• SME
• Consumer Credit
• Bill Purchase

3.      Services

• Credit Card Services
• Debit Card
• Remittance
• Pay order

Mathodology of The Stady

Methodology of The Study

I have collected my information/data from the following sources, which helped me to make this report. The source has divided by two parts. Such as-

 Primary Sources:

Primary Data is those types of data, which are collected from the root. It’s also called the raw data. There are various tools of collecting primary data…

• Direct observation
• Interviewing  & conversation

 Secondary Sources:

Secondary data are those, which have already collected by some one else and wishes have been passed through the statistical process. This data can be collected by two sources. The sources of information include

• Internal tools:
• Annual report 2011
•  Bank brochures
• General report,
• Magazines / journals / Periodicals
• General banking manual
• Statement of affairs
• Progress report of the Bank
• Bank Rate sheet.
• Official records
• Ø External tools:
  • Website,
  • Banking related Books
  •  Bangladesh Bureau of Statistics report etc.

General Banking System of SBL

General Banking Department of SBL 

General banking 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.

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

 CLEARING SECTION 5.5

Cheque, Pay Order (P.O), Demand Draft (D.D.) Collection of amount of other banks on behalf of its customer are a basic function of a Clearing Department.

Clearing 

Clearing is a system by which a bank can collect customers fund from one bank to another through clearing house.

Clearing House 

The clearing house is an assembly of the locally operating scheduled banks for exchange of cheque, drafts and other demand instruments drawn on each other and received from their respective customers for collection. The house meets at the appointed hour on all working days. Under the chairmanship of the central bank or its agent as the case may be, and works within the regulations framed there on the basis of the prevailing banking practices. The net dues receivable or payable arrived at after off-setting the total amount of the instruments received with that of the instruments delivered, are adjusted through the respective banker’s account maintained with the chairman-banker.

OR

Clearing House is a place where the representatives of different banks get together to receive and deliver cheque with another banks.

Normally, Bangladesh Bank performs the Clearing House in Dhaka, Chittagong, Rajshahi, and Khulna & Bogura. Where there is no branch of   Bangladesh Bank, Sonali bank arranges this function.

The scheduled banks clear the cheque drawn upon one another through the clearinghouse of Bangladesh Bank.

The SBL Mohammadpur Br. sends the instruments through Inter Branch Debit Advice (I.B.D.A). SBL imamgonj Br. acts as an agent in this case. For this, Mohammadpur Br. gives the following entries,

SBL General A/C (Mohammadpur Br.) —————Dr.

Customer’s A/C———————————Cr.

If the instrument is dishonored, the instrument is returned to the Mohammadpur Branch through I.B.D.A. along with the following entries,

Customer’s A/C—————Dr.

SBL General A/C——————Cr.

 Member of Clearing

Standard Bank LTD. is a scheduled Bank. According to the Article 37(2) of Bangladesh Bank Order, 1972, the banks, which are the member of the clearinghouse, are called as Scheduled Banks. The scheduled banks clear the cheque drawn upon one another through the clearinghouse.

Types of Clearing

A)  Outward Clearing:

When the Branches of a Bank receive cheque from its customers drawn on the other Banks within the local clearing zone for collection through Clearing House, it is Outward Clearing.

For example-

The cheque drawn on SBL Mohammadpur Branch. Then the cheque is called inward cheque of SBL Mohammadpur Branch. Accounting treatment:

Customer’s A/C Debit.

SBL General A/C Credit.

B)   Inward Clearing:

When the Banks receive cheque drawn on them from other Banks in the Clearing House, it is Inward Clearing.

For example, the cheque drawn on Mercantile Bank Ltd, Karwan Bazar Branch has been presented on SBL Mohammadpur Br. This cheque is called the outward cheque of SBL Mohammadpur Br. Hence it is said that the cheque which is the inward cheque of one bank is the outward cheque of another bank.

Whenever a cheque is brought to the collection the concerned Officer does two functions:-

    i.      Giving the special crossing with “Standard Bank. Mohammadpur Br. Dhaka”

1. ii.          Endorsed by the collecting bank.

The following table is showing endorsement of instrument in SBL.

 Endorsement  

• Payee’s A/C credited pay to Mr. XXXXX
• Received payment
• Payee’s A/C credited Pay to SBL. Mr., XXXXXX
• Payee’s A/C credited pay Mr. XXXX of SBL
• Payee’s A/C will be credited on realization Bills for Collection

Types of clearing house

 There are two type of clearing house: Those are

1) Normal clearing house

2) Same day clearing house

Normal clearing house:

1^st house: 1^st house normally stands at 10 a.m. to 11a.m

2^nd house: 2^nd house normally stands after 3 p.m. and it is known as return house.

Same day clearing house:

1^st house: 1^st house normally stands at 11 a.m. to 12 pm

2^nd house: 2^nd house normally stands after 2 p.m. and it is known as return   house.

Who will deposit cheque for Clearing?

Only the regular customers i.e. who have Savings, Current, STD & Loan Account in the bank can deposit cheque for collection of fund through clearing    house.

 Clearing House System

When a branch receives a cheque from its customer (payee) for collection from other bank’s branch, they send it to the BB clearing house or its agent sonali Bank through the principal branch at the last hour (evening). BB clearing house or its agent sorts the cheque with other cheque at night and sends the cheque to the responding branch for payment through its principal branch at second day. The responding branch checks the cheque for honors or dishonors. If it honors the cheque, then it debit the customer (drawer) account and credit GL account of the principal branch and sends an advice to the principal branch about it. But if it dishonors the cheque, then it writes a slip to show the cause of dishonor and attached it with the cheque, and sends it to the principal branch at last hour. Principal sends the cheque to the BB clearing house, for honored cheque clearing house debit the responding bank account and credit collecting bank account, but for dishonored cheque it does not give such entries. After all these works again it sends the dishonored cheque to the principal branch of the collecting bank. Then principal branch sends the cheque to payee’s branch. Payee’s branch give entry for that dishonored cheque.

Slip that is attached with Dishonored Cheque or Other Instruments

 Precaution at the time of cheque receiving for Clearing, Collection of LBC, OBC & Transfer

1) Name of the account holder same in the cheque & deposit slip.

2) Amount in The cheque & deposit slip must be same in words & in figure

3) Date in the cheque may be on or before (but not more than six months back) clearing       house date.

4) Bank & Branch name of the cheque, its number & date in the Deposit slip.

5) Cheque must be signed.

6) Signature for confirmation of date, amount in words / in figure Cutting & Mutilation of cheque.

7) Cheque should be crossed (not for bearer cheque).

8) Account number in the deposit slip must be clear.

9) Depositor’s signature in the deposit slip.

 Return house

Return House means 2^nd house where the representatives of the Bank meet after 3 p.m. to receive and deliver dishonored cheque, which placed in the 1^st Clearing House.

 Cheque may be dishonored for any one of the following reasons:

1)      Insufficient fund.

2)      Amount in figure and word differs.

3)      Cheque out of date/ post- dated.

4)      Payment stopped by the drawer.

5)      ………….Payee’s endorsement irregular / illegible / required.

6)      Drawer’s signature differ / required.

7)      Crossed cheque to be presented through a bank.

8)      Other specific reasons not mentioned above.

The dishonor cheque entry in the Return Register & the party is informed about it. Party‘s signature required in the return register to deliver the dishonor cheque. After duration, the return cheque is sent to the party’s mailing address with Return Memo.

If the cheque is dishonored due to insufficiency of funds than Standard Bank

Charge.25/=as penalty.

 Issuing cheque book

Following procedures are maintained by SBL, Mohammadpur Branch. for issuing Cheque Book.

(a)     Firstly the customer will fill up the cheque requisition form.

(b)    The leaves of the Cheque Book under issue are counted to ensure that all the leaves and the blank requisition slip are intact.

(c)     The officer writes A/C number and Branch name on all the leaves of the checkbook.

(d)    The name and the A/C number of the customer are than entered in the checkbook register against the particular checkbook series.

(e)     Then the officer sightseer, checkbook, and requisition slip.

(f)     Lastly the checkbook is handed over to the customer after taking acknowledgement on requisition slip.

A cover file containing the requisition slip is effectively preserved as vouchers. If any defect is noticed by the ledger keeper, he makes a remark to that effect on the requisition slip and forward it to the cancellation officer to decide whether a new checkbook to be issued to the customer or not.

Per Cheque Book Leaves 3 Taka and vat with 15 percent. This Money Collected from Clients After end of the year.

Cheque

A cheque is an unconditional order of the drawer in writing bearing a date, to the banker maintaining his account to pay on demand, to a named person, his order or bearer, a certain specified sum of money, expressed in both figures and words.

 Parties to Cheque

There are three parties are available to a cheque. They are Drawer, Drawee, and Payee.

• Drawer:

Drawer is the person who draws the cheque i.e. the depositor of money in the bank.

• Drawee:

Drawee is the drawer’s banker on whom the cheque has been drawn.

• Payee:

Payee is the person who is entitled to receive the payment of a cheque.

When a cheque is drawn ‘pay to self’ or ‘pay cash’ the payee is the drawer, his endorsee or bearer, as the case may be depending on the form in which it is drawn namely, order or bearer. A cheque is Payable forthwith on production and no presentment thereof is required as in the case of a bill of exchange or pro note. The payee or endorsee who is in possession of a cheque or the bearer thereof is the holder. A holder becomes a holder is due course when he possesses the instrument for consideration, before it became over-due and without notice that the title of his transferor was defective.

Endorsement and Negotiation

The endorsement is done by the payee or endorsee, as the case may be, by signing on the instrument customarily on its back and where the space is sufficient, on a slip of paper annexed thereto, called ‘allonge’. An order instrument is required to be endorsed by the payee or endorse for the purpose of negotiation. To make the negotiation complete, the endorsement must be followed by delivery of the instrument to the endorsee to make him holder (Ss. 48 &51 NIA). The endorsement should be for transferring the entire property in the instrument, if negotiation is desired and where it is done for transfer of the property partly, or to more than one severally it doesn’t operate as a negotiation. A bearer instrument is not required to be endorsed for the purpose of negotiation and can be negotiated by mere delivery (Ss 47, & 28A, NIA). In case of an order instrument, verbal assignments by mere delivery thereof without endorsement, is not valid and confer no title to the transferee except where equitable assignment is intended.

Types of Endorsement

There are five kinds of endorsements available, namely endorsement in blank, special endorsement, restrictive endorsement, conditional endorsement, and partial endorsement.

 Blank Endorsement

In case of an endorsement in blank the payee or endorser does not specify an endorsee and he simply signs his name. An instrument so endorsed becomes payable to bearer.

Special Endorsement

When the payee or endorser specifies the person to whom or to whose order the instrument is to be paid, the endorsement is called special endorsement or endorsement in full. The specified person i.e., the endorsee then becomes the payee of the instrument. The holder of an endorsed in blank can convert the blank endorsement into an endorsement in full by simply writing the same of any person in the space above the endorser’s signature and thereby, he doesn’t become an endorser to incur any responsibility on the instrument. If an instrument endorsed in blank is followed by a special endorsement, the endorsee must endorse it to give further negotiation.

 Restrictive Endorsement

A restrictive endorsement is one where the endorser prohibits further endorsement of the instrument by his endorsee or constitutes his endorsee an agent for collection.

Conditional Endorsement

A conditional endorsement is one, where the endorser excludes his liability as an endorser or makes his liability conditional. When the endorser wants to avoid his liability on the instrument in the event of it being dishonored, he can do so by writing the words ‘Without Resource’ followed by his signature. But this does not absolve him of his liability with respect to any forgery on the instrument prior to his endorsement. He can by express words in the endorsement, also make his liability dependent upon fulfillment of certain condition. In this case the endorser’s liability is dependent upon fulfillment of the condition, otherwise his liability extinguishes. The payer is not bound by the condition and his payment to the endorsee is valid whether the condition is fulfilled or not.

Partial Endorsement

Though such an endorsement the endorser makes partial transfer of the property in the instrument but this is not operative for negotiation of the instrument. Where the amount of the instrument is partly paid, a note to that effect may be made on it and it may then be endorsed for the balance (s. 56, NIA). This is not done in case of cheque or banker’s drafts.

Types of Cheque

There are three types of cheque. They are bearer cheque, order cheque, and crossed cheque

Bearer Cheque:

A bearer cheque is payable to the bearer and the banker is discharged from liability by payment in due course to the bearer thereof. Unless the form of drawing ‘bearer’ is changed to ‘order’, a bearer cheque is always a bearer one and no endorsement can make it payable otherwise than to the bearer thereof. Though such a cheque is not required to be endorsed for negotiation the recipient of cash must endorse it in token of having received the payment, otherwise the banker is entitled to ask for a receipt, where required, on revenue stamp, for the amount paid by him against the cheque. Further, a transferor by delivery i.e. without endorsement is not liable on the instrument.

Order Cheque:

In case of an order cheque it should purport to be endorsed by or on behalf of the payee. Where an order cheque has been endorsed by payee in favor of another, the endorsee must also sign it to receive the payment in due course. In practice, the banker insists on identification of the payee while making payment of such a cheque in cash. This is done to avoid any chance of being charged with payment out of due course.

Crossed Cheque:

A cheque (also banker’s draft) can be crossed generally or specially to a banker by the drawer, or the holder thereof. The crossing must be on the face of the cheque, there must be two lines drawn transverse and parallel. There cannot be any general crossing without the two transverse lines, with or without the words ‘and company’ or abbreviation thereof, though the name of a banker without the lines is sufficient to constitute a special crossing.

 Payment Cancelled By Cheque

A cheque is payable on due presentation for payment if it is drawn in proper form duly signed by the drawer or his authorized agent, subject to the crossing, if any, and the sufficient credit balance in the concerned account or the arrangement made for an advance and the drawee banker is discharged from liability by payment thereof in due course. In the event of dishonor of a cheque due to a reason other than a valid one, the drawee banker is liable to the drawer for any loss or damage caused thereby.

Payee of Cheque

There must be a person entitled to receive the payment of the cheque either as a payee or his endorsee or bearer. The drawer himself may also be the payee by writing his name, self or pay cash. In the absence of the payee’s name, the cheque cannot be treated as a bearer one nor it can be looked upon as a cheque at all and the better course would be to return it for completion under authentication of the drawer.

Post Dated Cheque

A post dated cheque is one which bears a future date as its date of issue. Such a cheque is valid and its negotiability is not impaired simply because it is post dated. But the banker cannot pay it earlier than its date because the drawer’s mandate is not to pay it earlier.

 Antedated Cheque 

Where a cheque bears a date before the date of its issue it is known as an antedated cheque and is not invalid because of only antedating provided this does not involve any illegal or fraudulent purpose or transaction. A cheque antedated for more than six months becomes stale or out of date as per banking practice.

Stale or Outdated Cheque

As per banking custom a cheque (also banker’s draft) becomes ‘stale’ when it remains circulation for more than six months, though there is no legal sanction in this respect. Such an instrument is not honored by the drawee banker unless revalidated by the drawer. But it does not appear established that the drawer or the endorser of such an instrument is discharged from liability unless barred by limitation of three years.

Amount of Cheque

The law does not specify whether the amount of a cheque is required to be expressed both in words and figure. But as per banking practice the amount is stated both in words and figure. Where the amount in words and figure differs, the amount stated in words will prevail. If the banker pays the amount of a cheque expressed in words even though it is higher than that expressed in figure, the banker may be protected under law but in practice, he does not pay a cheque with discrepancy. To pay the smaller amount is also not the general custom.

 Sufficient Balance

The payment of a cheque is subjected to the drawer’s having sufficient credit balance in his account (s. 31, NIA) unless an arrangement has been made by the drawer for an overdraft. When the balance is not sufficient to meet the whole amount of the cheque, the payee cannot demand a part payment nor the banker is bound to make such a payment, as the cheque cannot be considered as an assignment of funds in order to enable the payee have an equitable claim on the drawer’s balance.

Drawer’s Signature

The banker cannot debit his customer’s account with the amount of cheque if the customer’s signature thereon is forged as this is not the order of the customer. It is the duty of the banker to acquaint himself with the customer’s specimen signature and before payment of a cheque, he must compare the signature with the specimen one on his record. Where a forgery is detected subsequent to the debit of the account and the forgery is found to be directly due to or is intimately connected with negligence of the customer in the safe keeping of the cheque book, the banker is entitled to debit his account.

 No Payment for Valid Cheque:

A cheque does not become payable even if it is valid for payment, where-

• Its payment has been stopped by the drawer in writing
• There is notice of customer’s death
• There is notice of customer’s bankruptcy
• There is notice of customer’s insanity
• There is knowledge of defective title of the holder
• Misappropriation of trust funds by the customer
• Garnishee order & Court injunction or any other court order restraining the customers from operating the account

Responsibility of the concerned officer for the Clearing Cheque:

1. Crossing of the cheque. (Cheque and Crossing)

A “Cheque” is a bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand. [According to section-6, negotiable Instrument Act, 1881.]

A cheque may be classified into:

a)      An open cheque which can be presented for payment by the holder at the counter of the drawer’s bank.

b)      A crossed cheque which can be paid only through a collecting banker.

2. (Computer) posting of the cheque.

3. Clearing seal & proper endorsement of the cheque.

4. Separation of cheque from deposit slip.

5. Sorting of cheque 1st bank wise and then on branch wise.

6. Computer print 1^st branch wise & then bank wise.

7. Preparation of 1^st Clearing House computer validation sheet.

8. Examine computer validation sheet with the deposit slip to justify the computer posting .

Bills   Collection: 

In modern banking the mechanism has become complex as far as smooth transaction and safety is concerned. Customer does pay and receive bill from their counterpart as a result of transaction. Commercial bank’s duty is to collect bills on behalf of their customer.

 Types of Bills for Collection

a)      Outward Bills for Collection (OBC).

b)      Inward Bills for Collection (IBC).

a)    OBC

OBC means Outward Bills for Collection .OBC exists with different branches of different banks outside the local clearing house. Normally two types of OBC:

1)      OBC with different branches of other banks

2)      OBC with different branches of the same bank

Procedure of OBC:

1)      Entry in the OBC register.

2)      Put OBC number in the cheque.

3)       “Crossing seal” on the left corner of the cheque & “payees account will be credited on realization “seal on the back of the cheque with signature of the concerned officer.

4)      Despatch the OBC cheque with forwarding.

5)      Reserve the photocopy of the cheque, carbon copy of the forwarding and deposit slip of the cheque in the OBC file.

Commission for collection:

 b)   Inward bills for collection (IBC)

When the banks collect bills as an agent of the collecting branch, the system is known as IBC. In this case the bank will work as an agent of the collection bank. The branch receives a forwarding letter and the bill.

Procedure of IBC:

1. IBC against OBC: To receive the OBC cheque first we have to give entry in the IBC Register .The IBC number should put on the forwarding of the OBC with date.
2. Deposit of OBC amount: OBC cheque amount is put into the “sundry deposit-sundry Creditors account”, prepare debit & credit voucher of it . If the OBC cheque is honored, send credit advice (IBCA) with signature & advice number of the concern branch for the OBC amount.
3. If the OBC cheque is dishonored, the concerned branch is informed about it .
4. Again place in the clearing house or send the OBC cheque with Return Memo to the issuing branch according to their information.

 RemittanceSection

 Local Remittance

Remittance of funds means transfer of money from one place to another through the banking channel.

Remittance of funds is ancillary services of SBL like other commercial banks. It aids to remit fund from one place to another place on behalf of its customers as well as non- customers of bank. SBL has its branches in the major cities of the country and therefore, it serves as one of the best mediums for remittance of funds from one place to another.

 Types of remittance:

• Between banks and non banks customer
• Between banks in the same country
• Between banks in the different centers.
• Between banks and central bank in the same country
• Between central bank of different customers.
• Payment order ( PO)
• The main instruments used by SBL, Mohammadpur Br. for remittance of funds Demand Draft ( DD)
• Telegraphic Transfer (TT

Payment order (PO):

Pay Order gives the payee the right to claim payment from the issuing bank. Payment is made from issuing branch only. Generally remit fund within the clearinghouse area of issuing branch. Bank charge only commission for this. However party must have an account with the bank, so that whenever the fund refund they (party) can collect it. But for the student and the pay order for job purpose of any applicant, account with the bank is not mandatory. Because in this case fund are non-refundable (verified by charged amount).

 Issuing of Pay Order:

The procedures for issuing a Pay Order are as follows:

1. Deposit money by the customer along with application form.
2. Give necessary entry in the bills payable (Pay Order) register where payee’s name, date, PO no, etc is mentioned.
3. Prepared the instrument.
4. After scrutinizing and approval of the instrument by the authority, it is delivered to customer. Signature of customer is taken on the counterpart.

A customer can purchase PO in different modes:

1. By cash: Currently it is not permitted by the SBL, Head Office.
2. By account:
3. By transfer:

PO A/C is the current liabilities of bank, which is acquired to be discharged by beneficiaries against cash or through an account.

Demand Draft (DD)

Demand Draft is an order of issuing bank on another branch of the same bank to pay specified sum of money to payee on demand. Payment is made  from ordered branch. Generally remit fund outside the clearinghouse area of issuing branch. Payee can also be the purchaser. Bank confirm through checking the ‘Test Code’ Bank charge a commission and telex charge for it.

 Mail Transfer Advice

Issuing branch requests another branch to pay specified money to the specific payee on demand by Telegraph /Telephone. Payment is made from ordered branch. TT can be remit anywhere in the country. Bank charge a commission plus telephone charge. However this service is available only for a limited number of customer. Mail Transfer Advice

Where the remitter desires the banker to remit the funds to the payee instead of purchasing a draft himself, the banker does it through a Mail Transfer Advice. The transfer is so called as the advice is dispatched to the paying office by ordinary mail. The payee must have an account with the paying office as the amount remitted in such a manner, is meant for credit to the payee’s account and not for cash payment.

 Issuing of TT

SBL follows the following procedures:

i)                    The customer deposits money with SBL to be sent.

ii)                  The customer obtains a cash memo containing TT serial number.

iii)                TT serial number, notifying part name is mentioned in the telex message.

iv)                The Telex Department confirms transmission of the telex.

 Locker Service

SBL Mohammadpur Br.is going to providing facility of locker service for the purpose of safeguarding the valuable property of customers. The person or organization that has any account in bank branch can enjoy this service. They keep their valuable assets in banker’s custody. Customers have right to look after with a key of their individual locker provided by bank. SBL maintains the following types of lockers:

—— Large locker.

—— Medium locker.

—— Small locker.

For enjoying this service, clients have to give charge yearly Tk. 1500, Tk. 1250 and Tk. 700 for large, medium and small locker respectively

Account Section 5.7  

Accounts Department is called as the nerve Centre of the bank. In banking business, transactions are done every day and these transactions are to be recorded properly and systematically as the banks deal with the depositors’ money. . Improper recording of transactions will lead to the mismatch in the debit side and in the credit side. To avoid these mishaps, the bank provides a separate department; whose function is to check the mistakes in passing vouchers or wrong entries or fraud or forgery. This department is called as Accounts Department. If any discrepancy arises regarding any transaction this department report to the concerned department.

 Workings of this department:

• Ø Recording the transactions in the cashbook.
• Ø Recording the transactions in general and subsidiary ledger.
• Ø Preparing the daily position of the branch comprising of deposit and cash.
• Ø Preparing the daily Statement of Affairs showing all the assets and liability of the branch as per General Ledger and Subsidiary Ledger separately
• Ø Making payment of all the expenses of the branch.
• Ø Recording inters branch fund transfer and providing accounting treatment in this regard.
• Ø Preparing the monthly salary statements for the employees.
• Ø Preparing the weekly position for the branch which is sent to the Head Office to maintain Cash Reserve Requirement (C.R.R)
• Ø Preparing the monthly position for the branch which is sent to the Head Office to maintain Statutory Liquidity Requirement (S.L.R)
• Ø Make charges for different types of duties
• Ø Preparing the budget for the branch by fixing the target regarding profit and deposit so as to take necessary steps to generate and mobilize deposit.
• Ø Checking of Transaction List
• Ø Recording of the vouchers in the Voucher Register & packing of the correct vouchers according to the debit voucher and the credit voucher

 Statement of Accounts

The statements are generally issued two times in a year, but sometimes it is issued several times by responding the customers’ application for necessity. The necessity of such statement of accounts was presumably felt in order to keep the account holders apprised of the position of their accounts so that their confidence in the banker remains unshaken. But with the gradual expansion of banking habits unauthorized withdrawals and misappropriations of customers’ deposits through unscrupulous means are on the increase. To check such fraudulent transactions it is all the more necessary now-a-days to send statements of accounts to the customers so that they can by themselves check up the balances of their accounts.

Statement Charge: Standard Bank Collected yearly 230 taka for statement withdraw from Clients.

Closing of an Account

For two reasons, one can be closed. One is by banker and other is by the customer.

 By banker:

If any customer doesn’t maintain any transaction within six years and the A/C balance becomes lower than the minimum balance, banker has the right to close an A/C.

By customer:

If the customer wants to close his A/C, he writes an application to the manager urging him to close his A/C.

Different procedures are followed in cash of different types of A/C to close. Fixed deposit A/C is closed after the termination of the period. BCD A/C is closed when the certificate is surrendered.

Closing process for current & savings A/C:

1. After receiving customer’s application the officer verifies the balance of the A/C.
2. He then calculates interest and other charges accumulated on the A/C.
3. If it bears a credit balance, the officer writes advice voucher. He gives necessary accounting entries post to accounts section.
4. The balance is returned to the customer. And lastly the A/C is closed.

 CASH SECTION

Banks, as a financial institution, accept surplus money from the people as deposit and give them opportunity to withdraw the same by cheque, etc. But among the banking activities, cash department play an important role. It does the main function of a commercial bank i.e. receiving the deposit and paying the cash on demand. As this department deals directly with the customers, the reputation of the bank depends much on it. The functions of a cash department are described below.

 Function of Cash Department:

Cash Payment:

1. Cash payment is made only against cheque
2. This is the unique function of the banking system which is known as “payment on demand”
3. It makes payment only against its printed valid Cheque

Cash Receipt

1. It receives deposits from the depositors in form of cash
2. So it is the “mobilization unit” of the banking system
3. It collects money only its receipts forms

Cash packing:

After the banking hour cash is packed according to the denomination. Notes are counted and packed in bundles and stamped with initial.

Chapter 06

SWTO Analysis

SWOT Analysis of The SBL 6.1  

SWOT analysis is one of the most important steps in formulating strategy. Using the organization as a context, manager context assess internal strength and weakness as well as external opportunity and Threat. The goal is then to develop good strategies that exploit opportunities and strengths, neutralize threats and weakness.

Reviewing this SWOT analysis from time to time would help evaluate the bank’s position. It would help the management in comparing their strength of the past with those of the present and to what extent the management has been able to overcome the weaknesses.

 Last Five Years Financial Report  

                (Figure in Millions)

Total Assets                                                                                                               (Figure in Million Taka)

Table 1: Total Assets growth from 2006 to 2012

Figure 1: Total Assets growth from 2006 to 2010 (in Million TK)

Analysis:

As of 31 December 2012 total asset of the Bank was tk.87462 million where it was 68325 million in 2011.

Deposits                                                                                                                      (Figure in Million Taka)

Table 2:  Deposit growth from 2006 to 2010

Figure 2: Deposit growth from 2006 to 2010 (in Million TK)

Analysis:

SBL always tried to give the highest return on the deposits from the customers. The deposits of SBL reached the level of TK. 5,834.44 crore during 2012 from TK. 4,255 of the previous year. The growth rate is 37.10%. Cost of deposit for the year stood at 7.83% compared to the previous year’s cost of 9.33%. The increase in deposit was possible due to superior customer service delivery of the branch level.

Loans and Advances                                                                         (Figure in Million Taka)

Table 3: Loan and Advances growth from 2006 to 2010

Figure 3: Loan and Advances growth from 2006 to 2010 (in Million TK)

Analysis:

Total loan & advances figure of the bank has risen up to TK. 51,757.69 million as on December 31, 2010 in comparison to TK. 38055.43 million as on December 31, 2009, which indicates as on increased by 36% over the figure of last year. During this time bank has concentrated to explore new and diversified avenues for investment with the objectives of developing and maintaining a sound portfolio ensuring profitability and risk mitigation.

Investment                                                                    (Figure in Million Taka)

Table 4: Investment growth from 2006 to 2010

 Figure 4:  Investment growth from 2006 to 2010 (in Million TK)

Analysis:

During the year 2010, SBL investment portfolio comprised with government Treasury bill and other security. In the year 2010, the size of investment portfolio raised at TK. 7607 million against TK. 5340 million in the year 2011 showing and increasing of 38.52%.

 Capital Adequacy Ratio                                                                         (Figure in Percentage)

 Table 5: Capital Adequacy Ratio growth from 2006 to 2010.

 Figure 5: Capital Adequacy Ratio growth from 2006 to 2010 (%)

Analysis:

Capital adequacy ratio is measured by the ratio of the total capital to the risk weighted assets. Capital adequacy ratio is stood at 10.30% of Risk weighted assets at the end of 2010.Where requirement was 9% of RWA.

 Operating Profit                                                                             (Figure in Million Taka)

Table 6: Operating profit growth from 2006 to 2010

 Figure 6: Operating profit growth from 2006 to 2010(in Million TK)

 Analysis:

Standard Bank Limited generated an operating profit of TK. 277.08 crore in 2010 compared to TK. 152.98 crore in 2009 making a growth of 81.08%. After all provision including general provision on unclassified loan, profit before tax stood at TK. 237.64 core compared to previous year’s TK.128.42 crore registering a growth of 84.98%.

 Earnings per Share (Taka)

                             Table 7: Earning per share growth from 2006 to 2010

Figure 07: Earnings per Share growth from 2006 to 2010 (in TK)

Analysis:

As of 31 December 2010 EPS of the Bank was tk.43.15 per share where it was 24.09 per share in 2019.

Number of Branch                                                              (Figure in Number)

Table 8: No of Branch growth from 2008 to 2012

Figure 8: No of Branch growth from 2006 to 2010

Analysis: As of 31 December 2010 no. of new branches opened by the Bank was 58 where it was 41 branches in 2006.

Chapter 07

Major Findings

Major Findings of SBL

Standard Bank Ltd, branch office is well decorated. It has all kinds of logistics support- well furnished, high security system, central AC, well lighting etc. The whole environment is very pleasant. Clients are satisfied with that. Customers are, however satisfied with the overall service. Most of the clients claim that service charge of this bank is very reasonable which have increased customer satisfaction level. One thing I have found that customers are not satisfied with the transaction hour and with the ATM booth system. They want availability of this system. Whenever I asked about the quality of service, clients agree that the quality of service of SBL is good. Because they are offering lots of service and that are important. SBL offers those services what customers want. SBL always tries to maintain the service quality. SBL is committed to their clients regarding good relationship.

This is the most important part of my report titled “General banking activities of Standard Bank Limited (Mohammadpur Branch)”. In findings part I am interpreting the results of my study which are stated below in points:

 Most of the clients have FDR. Among 764 accounts, 238 numbers of clients have FDR account in 2011, because SBL FDR offers higher rate of interest. For a month duration the interest rate is 9%, for 3 months duration interest rate is 11%, for 6 months duration interest rate is 11.5% and for 1 year duration interest rate is 12%.

  Account opening procedure of the bank is lengthy; also introducer is a problem for the new clients.

  Most of the clients received their MICR check book within 4-6 days after providing their requisition.

  Short term deposit rate is comparatively lower in SBL. SBL provides 4 percent for below 5 crore where Pubali bank provides 7 percent.

  The bank should introduce their own ATM facilities, at present they are using the ATM booths of other banks. For per transaction using DBBL ATM booth it costs Tk. 11 for their SBL clients.

  The statements are generally issued two times in a year, but sometimes it is issued several times according to the necessity of the customers. The necessity of such statement of accounts was presumably felt in order to keep the account holders apprised of the position of their accounts so that their confidence in the banker remains unshaken. For bank statement SBL Charges Taka 230 per annum.

 The employees of GB department are very helpful to their customer regarding open an account, to write down deposit book & cheque book etc.

  Bank provides debit or credit card to their account holder when necessary, but the process is lengthy.

  The bank newly introduced the telephonic banking services under general baking division. Employees of General Banking Division of SBL responsive to provide their new telephonic services.

 Complain box of the branch is not routinely checked by the branch manager.

 SBL (Mohammadpur Br) needs some technological advancement regarding its current MIS. At present the bank uses Stealar software for general banking purpose which is not effective enough to handle huge number of clients.

 On the job training is not sufficient for the employees of General Banking Division of SBL.

   The SBL Mohammadpur Br. Sends the instruments through Inter Branch Debit Advice (I.B.D.A) to clearing house for clearing.

 For enjoying locker service, clients of SBL have to give charge yearly Tk. 1500, Tk. 1250 and Tk. 700 for large, medium and small locker respectively.

 Lack of motivation for the employees of SBL in the current restructure regarding achieving individual target. The management does not review each employee’s performance in case of achieving their target.

Chapter 08

Recommendations & Conclusion of SBL

Recommendations

Standard Bank Limited is a well established bank in Bangladesh. It is providing high quality services to the customer since 1999. But it has some limitations that are mentioned above. Some recommendations are made to overcome these problems which are shown below-

Increased managerial supervision is very much needed to assess whether the target no. of account is opened within specified time period.

General banking division should be divided into more sections because in General banking division there are six sections which are directly related with customer. To improve service for their clients SBL should increase number of employees in general banking division to provide better services. Bank should improve personal relationship with their client through a well structured general banking division.

Bank should provide emphasis on IT infrastructure to deliver superior service to the customers, they should introduce new software to handle huge number of clients.

 SBL should introduce prime rate for the best customers which will attract the good customers. It is observed that sometimes irregular clients got facilities instead a regular customer who does not get necessary facility.

To motivate the employees of SBL the bank should restructure the remuneration structure of the employees by setting individual target for each employee for a specified period. The manager should review each employee’s performance in case of achieving their target.

 Introducer is an important factor for opening an account. Most of the new clients do not have introducer. Bank should concentrate into the problem to increase new customers.

 Bank should make the procedure of issuing card short and try to issue the card quickly.

Complain or suggestions box for the customers should be monitored regularly to identify the dissatisfaction areas of the clients.

To increase the level of customer satisfaction bank should offer new product and provide better service depends on customers’ needs. They can introduce Islamic Banking wing in Mohammadpur Branch.

Monthly providing of account statements may increase customer’s loyalty to the bank. Also the statement charge should be reduced as it is frequently needed today by their clients.

Bank should introduce ‘Night banking’ like BRAC bank if possible. Then customer will be benefited and satisfaction level will automatically increase.

 Conclusion

Lots of new commercial bank has been established in last few years and these banks have made this banking sector very competitive. So, now banks have to organize their operation and do their operations according to the need of the market. Banking sectors no more depend on a traditional method of banking. In this competitive world this sector has trenched its wings wide enough to cover any kind of financial services anywhere in this world. The major task for banks, to survive in this competitive environment is by managing its assets and liabilities in an efficient way.

As an internee student in STANDARD Bank Bangladesh Limited at Mohammadpur, Branch, Dhaka I have truly enjoyed my internship from the learning and experience viewpoint I am confident that three month internship program at STANDARD Bank Bangladesh Limited will definitely help me to realize career in the job market. It’s a new branch with one and half year operation only but I think it would be able to increase the wealth because of the location.

During the course of my practical orientation I have tried to learn the practical banking to realize my theoretical knowledge, what I have gathered and going to acquire from various courses. It is great pleasure for me to have practical exposure of STANDARD Bank Limited, because without practical exposure it couldn’t be possible for me to compare the theory with practice.

So in conclusion it can be said that every organization has its positive as well as negatives and in case of STANDARD Bank Bangladesh Limited existence of the later one is less than the earlier one and as the management is determined to reach the pick of success it seems that in near future the negatives will be eliminated. Eleven years is a very short span of time and the organization, which can establish itself as one of the most reputed private commercial Bank in the country within this short period deserves special credit and with their able leaders STANDARD Bank will reach the highest level of success very shortly. I wish the bank all success prosperity in their field.