1.1 ORIGIN OF THE REPORT:
This report has been prepared as a requirement of the internship program, which is equivalent to a complete course and compulsory for every student of BBA program of Dhaka City College, under National University. The main objective of the internship program is to initialize the students with the actual working experience, introducing to the corporate culture and an exposure to the world outside the theoretical explanation.
This report is based upon the Jamuna Bank Limited, Mirpur Branch, I, Md. Abdullah Al Hadi, was placed for the internship program for three months under the guidance of my faculty advisor Mr. Hafizul Islam and under the organization supervisors M. A. Wadud, The JAVP and Manager of the branch.
1.2 OBJECTIVE OF THE STUDY:
The primary objective of the report is to comply with the requirement of the JBL. However, the objective behind this study is something broader. Objectives of the study are summarized in the following manner:
• A small brief of the banking sector of Bangladesh
• History of Jamuna Bank Limited
• General banking activities of JBL
• working environment in commercial banks
• To apply theoretical knowledge in the practical field
• To study existing banker-customer relationship.
• Lastly recommendation that will improve the whole process.
1.3 METHODOLOGY:
All the information incorporated in this report has been collected both from the primary sources and as well as from the secondary sources.
Primary sources included direct observation and interview of bank staffs. The secondary data has been collected from the MIS of Standard Chartered Bank. To clarify different conceptual matters, Internet and different articles published in the journals and magazines have been used.
1.4 SCOPE OF THE STUDY
As I was sent to JBL, Mirpur Branch, the scope of the study is only limited to this branch, the report covers its overall department wise function, structure and performance. The report also covers details about JBL.
1.5 JOB ROTATION:
Departments Duration
General Banking 1Month
Foreign Exchange 1Month
Advances 1Month
1.6 SOURCES OF DATA:
In order to make the report more meaningful and presentable, two sources of data and information have been used widely.
The “Primary Sources” are as follows:
• Face-to-face conversation with the respective officer and staff of the Branch.
• Informal conversation with the clients.
• Practical work exposures form the different desks of the department of the Branch covered.
• Relevant file study as provided by the officers concerned.
The “Secondary Sources” of Data and information are:
• www.jamunabankbd.com
• Annual Report of JBL.
• Various books, articles, compilations ctc. Reading general banking functions, foreign exchange operations and credit policies.
• Different “Producer Manual” published by JBL.
• Different circular sent by Head office of JBL and Bangladesh Bank.
1.7 LIMITATIONS OF THE STUDY
1. The time, 68 working days, is insufficient to know all activities of the branch and prepare the report.
2. It was very difficult to collect the information form various personal for their job constraint.
3. As some of the fields of banking are still not covered by our courses, there was difficulty in understanding some activities.
4. Another limitation of this report is Bank’s policy of not disclosing some data and information for obvious reason, which could be very much useful.
5. Because of the limitation of information, some assumption was made. So there may be some personal mistake in the report.
2.1 THE GLOBAL ECONOMY
The rise of technology has allowed our environment to be characterized as a global one. “The global economy gave business the ability to market products and services all over the globe. It
has become essential for success in today’s business. “Prior to Globalization, the United States dominated the global economy. In recent years, however, the U.S. share of the global economy has shrunk to approximately 25% and will continue this tend as the economies may newly industrialized countries continue to pick up steam.
This increase in globalization has created many new opportunities, such as niche markets, and requires every one to keep up with globalization in order to stay competitive. As David Shane points out in his articles entitled” Youth must learn skills to succeed in Global Economy”, “Technology and trade separate the economy into two camps those with the skills to participate in the global economy and those who lack them. “ Shane indicates that advances in technology are giving developing countries the ability to compete directly with developed countries in terms of education and skills. With the never increasing Global Economy and widespread use of the internet, people and business are realizing that they are otter competing with people around the world for contracts and business deals.
The Global Economy has created an environment in which many large corporations are becoming transnational firms. This tend has developed in to world wide ‘race to the bottom’ where companies are so focused on staying competitive that they often outsource production to developing countries with the lowest labor, environmental and economic standard. These transitional corporations often lobby their government in order to gain access in to the developing countries. Unfortunately, many developed countries have protectionist policies that do not enable developing countries to export their goods into developed market. Trade barriers more other hamper economic development in the Global South, as compared to the North. New technology like the internet may speed up the reduction of trade barriers. The expanding Global Economy and the reduction trade barriers will create harder competition for the previously protected companies in the developing countries, but may also new possibilities Global markets. Like the new emerging companies like Haier (China), Tata Group (India).
The world economy can be evaluated in various ways, depending on the model use, and this valuation can then be represented in various ways (for example, in 2006 US dollars). It is inseparable form the geography and ecology of Earth, and is therefore somewhat of a misnomer, since, while definitions and representations of the “world economy” vary widely, they must at a minimum exclude any consideration of resources or value based outside of the Earth. For example, while attempts could be made to calculate the value of currently unexploited mining opportunities in unclaimed territory in Antarctica, the same opportunities on mars would not considered a part of the world economy even if currently exploited in some way and could be considered of latent value only in same way as uncreated intellectual property, such as previously unconfined invitation. Beyond the minimum standard of concerning value in product use, and exchange on the planet Earth, definition, representation, models, and valuation of the world economy vary widely.
It is common to limit questions of the world economy exclusively to Human economic activity, and the world economy is typically judged in monetary terms, even in cases in which there is no efficient market to help valuate certain goods or service, or in cases in which a lack of independent research or government cooperation marks establishing figures difficult. Typical examples are illegal drugs and prostitution, which by any standard are a part of the world economy, but for which there is by definition no legal market of any kind.
2.2 ACT OF BANKING IN ECONOMIC DEVELOPMENT OF BANGLADESH
The finance sector remains predominantly bank-based, accounting for 96% of the sector’s resources. While there are sound banks, based on IAS, the banking sub-sector as a whole is technically insolvent. Consolidated data reported tend to have significantly understated provisions. Adjusting partly for the understatements, the financials of the banking sub sector are characterized by about 32% NPL ratio,US$720 million shortfall in provisions, US$1,106 million shortfall in provisions and capital combined, and lossesofUS$685 million after adjusting for the shortfall in provisions in mid 2001. The adjustments would possibly be larger if provisioning as followed by major international auditors were applied. State-owned Commercial Banks (SCBs) also have disproportionately large and unexplained “Other Assets” that include, in particular, jute and other subsidized credits, suspense accounts and various receivables. To what extent these questionable assets have been provisioned remains unclear.
At mid-2001, the US$13 billion stock of financial market instruments was predominantly tilted toward banking products (72.2%), basically in the form of term deposits, and secondarily toward non-bank debt instruments (27.8%), with private sector obligations accounting for 0.4%of all non-bank debt instruments and GOB-related instruments making up for the balance of 99.6%. Of the GOB-related instruments, Savings Schemes, redeemable instruments with disproportionately high yields, accounted for 59.3%, the balance made up of T-Bills (26.7%) and Treasury Bonds (13.9%). Private sector instruments are basically debenture-type issues mainly of one business group listed in the stock exchanges.
The ratio of bank deposits to GDP in Bangladesh has increased from 19.53% in 1990 to 32.35% at end 2001. As the private sector banks are still in a rudimentary stage, they are way behind the SCBs in terms of deposit mobilization and asset accumulation. But classified loans of SCBs are large, constituting 3.94% of GDP in 1990 and8.66% in 2001. In 1990, the SCBs had 27.59% of their total outstanding loans classified, compared to 23.73% in private commercial banks and 20.65% in foreign commercial banks. The NPL ratio reached 44.62% in the SCBs and25.76% in private banks, but in foreign commercial banks, it came down to 3.74% in 2001.The banks achieved some success in reducing the percentage of non-performing assets by 3.31% of cumulative total loans, although in absolute figures it aggravated by 3.32% between 2000 and 2001. NPLs came down from 34.92% (of total loans and advances) in 2000 to31.61% in 2001. About 86.60% or Tk204.35 billion in the total classified loans of Tk235.99 billion in 2001 have been aggregate cost of refinancing for banks and DFIs and specialized banks through issuance of bonds with 10%coupon would be as high as 1.42% of GDP. In comparison, such refinancing cost in India is roughly at 0.75% of GDP.
2.3 THE TERM: BANK
Generally, by the word “Bank” we can easily understand that the financial institution deals with money. But there are different types of banking like, Central Bank, Commercial Bank, Savings Bank, Investment Bank, Industrial Banks, and Co-operative Banks etc. However, when we use the term “Bank” without any prefix, or qualification, it refers to the ‘commercial banks’. Commercial banks are the primary contributors to the economy of a country. So we can say Commercial banks are profit-making institutions that hold the deposits of individual & business in checking & savings accounts and then use theirs funds to make loan. For these people and the government is very much dependent of these bank as financial intermediary. As, Banks are profit-earning concern, they collect deposit at the lowest pos JBL cost and provide loans and advances at higher const. The differences between two are the profit for the bank.
Banking sector is expanding its hand in different financial events every day. At the some time the banking, process is becoming faster, easier and the banking area is becoming wider. As the demand for better service increases day by day, they are coming with different innovative ideas and products. In order to survive in the competitive field of the banking sector, all banking organization are looking for better service opportunities to provide their fellow clients. As a result, it has become essential for every person to have some idea on the bank and banking procedure.
Internship program is essential for every student, especially for the students of Business Administration, which help them to know the real life situation. For this reason, a student takes the internship program at the last stage of the bachelor’s degree to launch a career with some practical experience.
2.4 BANKING SECTOR OF BANGLADESH
The march 1971 Bangladesh was part of Pakistan knows as East Pakistan. Nine month liberation wars result in the certain of Bangladesh on 16 December 1971. At the end of the liberation war, the baking sector of Bangladesh was in total disarray. With the exception of two local banks incorporated in then East Pakistan, the entire bigger local bank becomes in operational. Liberation war left these banks divided and with any corporate officers to guide them as their Head offices was located outside Bangladesh territory. The overseas banking relationships of these banks were also shattered under such situation. Two local banks and a few branches of the then Pakistani banks were functioning in the country. Staring with such humble and choric condition, the Banking Sector of Bangladesh has gown to a great extent.
2.5 CHARACTERISTICS OF THE BANKING SECTOR IN BANGLADESH.
Achievement of high economic growth is the basic objective of present economic policy of Bangladesh government. In achieving this objective, the banking sector plays an important role. All types of financial transactions are mainly done through bank. Any institution that accepts money for the purpose of lending or investment deposits from public, repayable on demand or otherwise, and with transferable by checks can be termed as bank.
The intention of banking is to ensure transfer of money from surplus unit to deficit units. There exist two types of customers in the bank. One who deposits money in the bank for safety and earn interest, while the other borrows that money from the bank to invest in a business as entrepreneurs. Therefore, banks just play the middle man and sincere associate for both the customer.
The Banking Industry in Bangladesh is one characterized by strict regulations and monitoring from the central governing body, the Bangladesh Bank. Since the country’s independence Bangladesh Bank (BB) has been working as the central bank. Its prime jobs include issuing of currency, maintaining foreign exchange reserve and providing transaction facilities of all public monetary matters. BB is also responsible for planning the government’s monetary policy and implementing it thereby.
The Bangladesh Bank has a governing body comprising of nine members with the Governor as its chief. Apart from the head office in Dhaka, it has nine more branches, of which two in Dhaka and one each in Chittagong, Rajshahi, Khulna, Bogra, Sylhet, Rangpur and Barisal. The chief concern is that currently there are far too many banks for the market to sustain. As a result, the market will only accommodate only those banks that can transpire as the most competitive and profitable ones in the future. Currently, the major financial institutions under the banking system includes: Bangladesh bank, Commercial Banks, Islamic Banks, Leasing Companies, Finance Companies
Moreover the banking sector of Bangladesh mainly comprises of
• Nationalized Commercial Banks (NCBs),
• Private banks established in early 1980s,(the first generation banks)
• Private Banks established in 1999, (the second generation banks)
• New Private Sector Banks, (the third generation banks)
● Nationalized commercial Banks (NCBs)
Basically, NCBs are government owned banks; as a result they have branches all over the country. Unfortunately they are operationally inefficient, and technically insolvent. They are used by the government as a means of directed lending. These banks enjoy an enormous and stable customer deposit base providing cheap source of funds. In addition, most large government related dealings are routed through these banks.
● Private Sector Banks – The First Generation Banks
These were established to service the sectors not being addressed by the larger NCBs. They are not subject to state directed lending but have generally suffered from related lending to directors and their extended families.
● Private Sector Banks – The Second Generation Banks
In 1995, six new licenses were granted, that resulted into much improved regulatory system as there was the emergence of better-managed banks with strong capital bases and good asset quality. All the banks gathered in this group and have successfully raised capital from the Secondary Market, with all their shares being traded in the Stock Exchange at premium.
● New Private Sector Banks – The Third Generation Banks
In 1999, again ten new banks were granted licenses to start operations. In this regard there were few who tried to oppose this new proposition saying that the country is being filled with banks. The majority however including World Bank itself identified that there were adequate scope for these banks to survive given the currently gaps in the market, existing interest margins and efficiency/ service level disparities. It is estimated that up to 75% of the Bangladesh economy remains un-banked. While this appears to imply that the newer banks may move downstream in terms of asset quality. In reality the last two sets of new banks are competing successfully with the NCBs and foreign banks are on the top of the market segment.
At present, there are 49 banks in Bangladesh. The structure of banking in Bangladesh is as under:
1. Nationalized Commercial Banks ——————————— 4
2. Specialized Banks ————————————————- 5
3. Private Sector Commercial Banks:
• Conventional Banks —————————————— 25
• Islamic Banks —————————————————- 5
4. Foreign Commercial Banks:
• Conventional Banks ——————————————— 9
• Islamic Banks —————————————————- 1
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49
3.1 OVERVIEW AND HISTORY OF JAMUNA BANK LIMITED
Jamuna Bank Limited (JBL) is a Banking Company registered under the Companies Act, 1994 with its Head Office at Chini Shilpa Bhaban, 3, Dilkusha C/A, Dhaka-1000. The Bank started its operation from 3rd June 2001.Jamuna Bank Limited is a highly capitalized new generation Bank with an Authorized Capital of Tk. 4,000.00 million and Paid-up Capital of Tk.1,313.26 million. The total capital/equity of the bank stands at Tk. 2,444.33 million as on December 31, 2008. Currently the Bank has 44 (Forty Four ) branches-16 in Dhaka City, 8 in Chittagotang, 4 in Gazipur, 3 in Sylhet, 1 in Bogra, 2 in Naogaon, 1 in Munshigang, 1 in Shirajganj, 1 in Rajshahi, 1 in Narayanganj, 1 in Kushtia, 1 in Dinajpur, 1 in Noakhali and 2 in Comilla.
The Bank undertakes all types of banking transactions to support the development of trade and commerce of the country. JBL’s services are also available for the entrepreneurs to set up new ventures and BMRE of industrial units. Jamuna Bank Ltd., the only Bengali named new generation private commercial bank was established by a group of winning local entrepreneurs conceiving an idea of creating a model banking institution with different outlook to offer the valued customers, a comprehensive range of financial services and innovative products for sustainable mutual growth and prosperity. The sponsors are reputed personalities in the filed of trade, commerce and industries.
The Bank is being managed and operated by a group of highly educated and professional team with diversified experience in finance and banking. The Management of the bank constantly focuses on understanding and anticipating customers needs. The scenario of banking business is changing day by day, so the bank’s responsibility is to device strategy and new products to cope with the changing environment. Jamuna Bank Ltd. has already achieved tremendous progress within only Eight years. The bank has already ranked as one of top quality service providers & is known for its reputation. At present the Bank has real-time centralized Online banking branches (Urban & Rural) throughout the Country having smart IT-Backbone. Besides this traditional delivery point, the bank has ATM of its own, sharing with other partner banks & Consortium throughout the Country. The operation hour of the Bank is 10:00 A.M. To 6:00 P.M. from Sunday to Thursday with transaction hour from 10:00 A.M. to 4:00 P.M. The Bank remains closed at Friday and Saturday including government holidays.
3.2 MISSION
The Bank is committed to satisfying diverse needs of its customers through an array of products at a competitive price by using appropriate technology and providing timely service so that a sustainable growth, reasonable return and contribution to the development of the country can be ensured with a motivated and professional work-force.
3. 3 VISION
‘To become a leading banking institution and to play a pivotal role in the development of the country. ‘
3.4 GOALS AND OBJECTIVES
●To earn and maintain CAMEL Rating ‘Strong’
●To establish relationship banking and improve service quality through development of Strategic Marketing Plans.
●To remain one of the best banks in Bangladesh in terms of profitability and assets quality.
●To introduce fully automated systems through integration of information technology.
●To ensure an adequate rate of return on investment.
●To keep risk position at an acceptable range (including any off balance sheet risk).
●To maintain adequate liquidity to meet maturing obligations and commitments.
●To maintain a healthy growth of business with desired image.
●To maintain adequate control systems and transparency in procedures.
●To develop and retain a quality work-force through an effective human Resources Management System.
●To ensure optimum utilization of all available resources.
●To pursue an effective system of management by ensuring compliance to ethical norms, transparency and accountability at all levels.
● CORPORATE BANKING
The motto of JBL’s Corporate Banking services is to provide personalized solutions to Their customers. The Bank distinguishes and identifies corporate customers’ need and designs tailored solutions accordingly.
Jamuna Bank Ltd. offers a complete range of advisory, financing and operational services to its corporate client groups combining trade, treasury, investment and transactional banking activities in one package. Whether it is a project finance, term loan, import or export deal, a working capital requirement or a forward cover for a foreign currency transaction, our Corporate Banking Managers will offer you the accurate solution. Our corporate Banking specialists will render high class service for speedy approvals and efficient processing to satisfy customer needs.
Corporate Banking business envelops a broad range of businesses and industries. You can leverage on our know-how in the following sectors mainly:
• Agro processing industry
• Industry (Import Substitute / Export oriented)
– Textile Spinning, Dyeing / Printing
– Export Oriented Garments, Sweater.
– Food & Allied
– Paper & Paper Products
– Engineering, Steel Mills
– Chemical and chemical products etc.
• Telecommunications.
• Information Technology
• Real Estate & Construction •
• Wholesale trade
• Transport • Hotels, Restaurants •
• Non Bank Financial Institutions
• Loan Syndication •
• Project Finance • Investment Banking
• Lease Finance • Hire Purchase • International Banking •
• Export Finance
• Import Finance
● PERSONAL BANKING DIVISION
Personal Banking Division (PBD) introduces to the customers with a variety of products. Our PBD continuously meets the challenges of developing new products and services to match the specific requirements of customers. Personal Banking Division (PBD) issues both VISA Debit Cards and VISA Credit Cards. VISA is the renowned Card brand in the earth. Jamuna Bank Limited is a principal member of VISA Worldwide. Remittance Cell is another successful wing of the Personal Banking Division. Our product range includes:
VISA Debit Cards – You can now avail the convenience of VISA Debit Card. It is the easiest and the most secured way of utilizing your money for 24/7 retail purchases as well as cash withdrawal.
VISA Credit Cards – The JBL Credit Card gives you a fast, convenient and reliable way to pay, 24 hours a day, wherever you are in the world.
● VISA Classic
● VISA Gold
International Credit Cards – JBL International Credit Cards (VISA) allows you flexibility and convenience when you travel internationally. The VISA International card entitles you to exclusive discounts worldwide.
● VISA Dual (Gold)
JBL Remittance Cell – “Remit Fast” is the motto of JBL Remittance Cell. It provides the best & faster services to its customers and connects the world through the renowned money exchange agencies. Such as Placid Nk Corporation, Moneygram Payment System Inc., Raffles Exchange Ltd.UK, Euro Bangla Money Transfer (UK) Ltd., Moneylink,UK, Homelink Remit (UK) Ltd., Rumana Money Services. Customers can avail improved pricing on remittance.
i. Bank Transfer
ii. Instant Cash
iii. Spot Cash
♦ To offer JBL customers a greater banking convenience, They have introduced many modern banking facilities and some are under developments that include:
♦ With JBL’s large ATM network including non-branch ATM across the country you have the privilege of round the clock withdrawal and other account services at customers’ convenience. • Customer can enjoy higher ATM withdrawal limit each day.
♦ No fees on retail purchase and can use our Credit Cards at thousands of retail outlets around the world. • There will be no commission charge on the endorsement of foreign currency for self and spouse.
♦ JBL’s customer service agents are available on 365 days to offer assistance .
● INTERNATIONAL TRADE FINANCE
International Trade forms the major business activity undertaken by Jamuna Bank Ltd. The Bank with its worldwide correspondent network and close relationships with key financial institutions provides an extensive trade services network to handle your transactions efficiently. Our key branches in Dhaka, Chittagong, Sylhet and Naogaon are staffed by personnel experienced in International Trade Finance. These offices are the focal point for processing import and Export transactions for both small and large corporate customers. We offer a complete range of Trade Finance services. Our professionals will work with you to develop solutions tailored to meet your requirements, through mobilizing our full range of trade services locally, and drawing on our global resources. We can offer you professional advice on all aspects of International Trade requirements, namely:
• Issuing, advising and confirming of Documentary Credits.
• Pre-shipment and post-shipment finance.
• Negotiation and purchase of Export Bills.
• Discounting of Bills of Exchange.
• Collection of Bills. Assist customers to insure all risks.
• Foreign Currency Dealing etc.
♦ List of Foreign Correspondents :
To provide International Trade related services we have established Correspondent Banking relationship with 336 locations of 106 world reputed Banks in more than 100 countries.
● JBL’s main Correspondent Banks are:
Citi Bank N.A., Standard Chartered, American Express Bank, Bank of New York, Bank of Nova Scotia, Duetche Bank, Dresdner Bank AG, Habib American Bank, Habib Bank AG Zurich, Bayerische Hypo Vareins Bank, Mashreq Bank PSC, Nordea Bank AB, Royal Bank of Canada, UBS AG, Union De Banques Arabes ET, Francaises, Wachovia Bank NA, Forties Bank S.A/NV, Svenska Handlesbanken, Bank of Ceylon, Banca Toscana, ABN Amro Bank, Commonwealth Bank of Australia, Danske Bank A/S. Absa Bank Ltd., Agricultural Bank of Chaina, Banca Intesa SPA, Banca Italo Albanese, Banca Popolare Commercio E Industria SPA, Bank Austria Credittanstal AG, Bank Commonwealth, Bank Madiri (Europe), Bank of Cyprus, Bank of Bahrain and Kuwait, Bank of Jordan Ltd., Bank Sadarat Iran, Blue Nile Bank, Commercial Bank of Kuwait, Commercial Bank of Qatar Ltd., Development Bank of the Philippines, Dexia Bank SA, EON Bank Berhad, First International Merchant Bank PLC., Foreign Trade Bank of North Korea, Foreign Trade Bank of Vietnam, Hiroshima bank, HVB, Hungary RT, ICICI Bank Canada. Industrial and Commercial Bank of China, ING Bank NV, Islamic Bank of Yemen and for Finance & Investment, Korea Exchange Bank, National Commercial Bank, Shinhan Bank, State Bank of India (Canada) UFJ Bank Ltd., United Bank of India, Bank of Bhutan, Allied Bank Philippines.
● FOREIGN REMITTANCE
Jamuna Bank Ltd. has a network of 19 branches in Bangladesh and 4 more branches are going to be added to network soon. Remittance services are available at all branches and foreign remittances may be sent to any branch by the remitters favoring their beneficiaries.
Remittances are credited to the account of beneficiaries instantly through Electronic Fund Transfer (EFT) mechanism or within shortest possible time. Jamuna Bank Ltd. has correspondent banking relationship with all major banks located in almost all the countries/cities. Expatriate Bangladeshis may send their hard earned foreign currencies through those banks or may contact any renowned banks nearby ( where they reside/work) to send their money to their dear ones in Bangladesh.
To facilitate sending money in Bangladeshi Taka directly, Jamuna Bank Ltd. has Taka Drawing Arrangement with many banks/exchange companies in different countries. The expatriate Bangladeshis may send their money in BDT through the branches/subsidiaries of Jamuna Bank Ltd.
● CREDIT FACILITIES
♦ The main focus of Jamuna Bank Ltd. Credit Line/Program is financing business, trade and industrial activities through an effective delivery system.
♦ Jamuna Bank Ltd. offers credit to almost all sectors of commercial activities having productive purpose.
♦ The loan portfolio of the Bank encompasses a wide range of credit programs.
♦ Credit is also offered to major thrust sectors, as earmarked by the govt., at a reduced interest rate to develop frontier industries.
♦ Credit facilities are offered to individuals including housewives, businessmen, small and big business houses, traders, manufactures, corporate bodies, etc.
♦ Loan is provided to the rural people for agricultural production and other off-farm activities.
♦ Loan pricing system is customer friendly.
♦. Prime customers enjoy prime rate in lending and other services.
♦. Quick appreciation, appraisal, decision and disbursement are ensured.
● Credit facilities are extended as per guidelines of Bangladesh Bank (Central Bank of Bangladesh) and operational procedures of the Bank.
● SHOP FINANCE SCHEME
Objectives:
01. To enable the small business community to run the business smoothly
02. Facilitating expansion of the existing businesses
03. To improve the banking habit of self employed persons
04. To diversify bank’s lending to Small & Medium Enterprises (SME) which
are considered as less risky and help community developments. It may be
noted down that the government is also encouraging investment in SME sector.
Categories of eli gible business:
i) Grocery/departmental/whole sale store
ii) Confectionary/bakery (owned by the bakers)
iii) Stationary shops
iv) Cloth materials & small local garment traders
v) Shoe makers/shops
vi) PVC & plastic product traders/small manufacturers
vii) Tiles/sanitary items retailers
viii) Computer/Photostat/Cyber Café.
ix) Electrical & electronic items retailers
x) Pharmacy
xi) Gift shop/cosmetics shops
xii) Restaurant/fast food joints
xiii) Hardwire shops
xiv) Glass/ceramic retail outlets
xv) Sports kit retailers
xvi) Photo studio
xvii) Rod, Cement & C.I. Sheet (Tin) Shop
xviii) Engineering Workshop
xix) Fertilizer & Pesticide shop
Maximum Loan Amount:
1) Up to a maximum of 10.00 lac in single case or 60% of possession value (distress value to be considered) whichever is lower. However, loan size will depend on creditworthiness of the borrower and the decision of the sanctioning authority.
2) Branch Manager must verify the amount of possession money actually paid before recommending such proposal.
Tenure of the loan limit:
Minimum 01 year – Maximum 03 years from the date of disbursement of the loan
Eligibility criteria:
The applicant must fulfill the following criteria to be eligible for loans and advances under the scheme:
i) Shop owner must run the establishment himself, having at least three years of successful business experience
ii) Valid lease deed for a minimum period of 03 years up to 05 years
iii) Satisfactory conducted deposit account with JBL for minimum 03 months.
iv) To deposit the daily sales proceeds in the account maintained with JBL
v) Agree to abide by credit rules & regulations of JBL
vi) Furnishing net-worth of the applicant/client .
vii) Clean CIB
viii) The bank reserves the right to accept or reject any application without assigning any reason whatsoever.
ix) The intending borrower /loanee shall apply through the letter head of the business firm or through a plain paper requesting the branch manager for sanction of loan under the Shop Finance Scheme
Security:
i) Simple deposit of valid lease deed of agreement of the shop.
ii) A tripartite agreement to be signed in between leaseholder/shop owner/Bank- to the effect that the leaseholder cannot rent out or transfer the leased property without the written consent of the Bank.
iii) The lease deed between the landlord and the borrower must be duly executed & the original lease deed should be kept in the Bank as part of document.
iv) Lease must contain provisions enabling the landlord to forfeit the lease and enable the bank to enforce a right to sell the possession of the shop to liquidate the default debt (if any).
v) Letter of disclaimer by the landlord to facilitate the bank to liquidate the default loan (if any)
vi) Equal numbers of post dated cheques covering amount of each loan installment
Insurance
All borrowing customers’ inventory i.e. Stock-in-trade will be insured against Fire, Rsd & other risks with the Bank’s mortgage clause cost of which will be borne by the shop owner/client/borrower.
Repayment Schedule:
Repayment schedule should be as under:
i) In case of 01 year, 10 monthly installments for the loan limit up to Tk. 3.00 lac with 02 month grace period from the date of disbursement.
ii) In case of 02 year, 22 monthly installments for the loan limit up to Tk.6.00 lac with 02 month grace period from the date of disbursement.
iii) In case of 03 year, 34 monthly installments for the loan limit above Tk.6.00 lac with 02 month grace period from the date of disbursement
● Q-CASH ROUND THE CLOCK BANKING
Jamuna Bank Q-Cash ATM Card enables you to withdraw cash and do a variety of banking transactions 24 hours a day. Q-Cash ATMs are conveniently located covering major shopping centres, business and residential areas in major cities. The network will expand to cover the whole country within a short span of time.
With your Jamuna Bank Q-Cash ATM card you can:
• Cash withdrawal Round The Clock from any Q-Cash logo marked ATM booths.
• POS transaction (shopping malls, restaurants, jewellaries etc)
• Enjoy overdraft facilities on the card (if approved)
• Utility Bill Payment facilities
• Cash transaction facilities for selective branches nationwide
• ATM service available in Dhaka and Chittagong Withdrawal allowed from ATM’s of Jamuna Bank Ltd., AB Bank, The City Bank, Janata Bank, IFIC Bank, Mercantile Bank, Pubali Bank, Eastern Bank Ltd. respectively
• And more to come Is Q-Cash
● LEASE FINANCE
Lease means a contractual relationship between the owner of the asset and its user for a specified period against mutually agreed upon rent. The owner is called the Lessor and the user is called the Lessee. Lease finance is one of the most convenient source of financing of assets viz machinery, equipment vehicle, etc. The user of the assets i.e. Lessee is benefited through tax advantages, conserving working capital and preserving debt capacity. Moreover, Lease is an off-balance sheet item i.e lease amount is not shown in the balance sheet of the lessee and does not affect borrowing capacity.
Leasing enables the lessee to avail the services of a plant or equipment without making the investment or incurring debt obligation. The Lessee can use the asset by paying a series of eriodic amounts called “lease payment” or “lease rentals” to the owner of the asset at the predetermined rates and generally in advance. The payments may be made monthly or quarterly.
Jamuna Bank Ltd., the highly capitalized private Commercial Bank in Bangladesh has introduced lease finance to facilitate funding requirement of valued customers & growth of their business houses.
Lease Items
• Vehicles like luxury bus, Mini bus ,Taxi cabs cars, Pick-up, CNG three wheeler etc .
• Factory equipment.
• Medical equipment
• Machinery for Agro Based Industry
• Construction equipment
• Office equipment
• Generators, Lift & Elevators for commercial place.
• Sea or River Transport.
• Computer for IT Education Center.
● SWIFT
Jamuna Bank Limited is the member of SWIFT (Society for Worldwide Inter-bank Financial Telecommunication). SWIFT is a member owned co-operative, which provides a fast and accurate communication network for financial transactions such as Letters of Credit, Fund transfer etc. By becoming a member of SWIFT, the bank has opened up possibilities for uninterrupted connectivity with over 5,700 user institutions in 150 countries around the world.
SWIFT No.: JAMUBDDH
● ONLINE BANKING
Jamuna Bank Limited has introduced real-time any branch banking on April 05, 2005. Now, customers can withdraw and deposit money from all branches located throughout the Country. JBL valued customers can also enjoy 24 hours banking service through ATM card from any of Q-cash ATMs located at different location throughout the Country..
All the existing customers of Jamuna Bank Limited will enjoy this service by default.
Key features:
• Centralized Database
• Platform Independent
• Real time any branch banking
• Internet Banking Interface
• ATM Interface
• Corporate MIS facility
Delivery Channels:
• Branch Network
• ATM Network
• POS (Point of Sales) Network
• Internet Banking Network
4.1 GENERAL BANKING
General banking is the starting point of the banking operation. It is the department which provides day-to-day services to the customers. Main functions of general banking department are the following:
4.2 ACCOUNT OPENING SECTION
The relationship between banker and customers begins with the opening of an account by the customer. Opening accounts binds the banker and customers into contractual relationship. But selection of customer for opening an account is very crucial for a bank. In fact, fraud and forgery for all kinds start by opening an account. So bank should take extreme caution in this section. A customer can open different types of accounts through this department such as:
• Current Account.
• Saving Account.
• Short Term Deposit (STD) Account.
• Fixed Deposit (FDR) Account.
• Monthly Saving Scheme.
4.1 DOCUMENTS FOR OPENING SOME SPECIAL ACCOUNTS:
There are some requirements that have to be completed for opening an account, each types of requirement of different types of accounts are given bellow:
4.2 CURRENT ACCOUNT:
Current account is the account where the account holders can make numerous transactions with in working day. There is no restriction on the number and the amount of withdrawals from the current account with in availability of funds. As the banker is under the obligation to repay this deposit on demand, no interest is paid in this account. Generally current account is opened for businessmen and traders for easy transaction. But a person can open a current account for special purpose.
4.3 PIVATE FIRM:
Proprietorships Firm:
• Declaration of proprietorship.
• Photograph.
• An introducer of Jamuna Bank Ltd. Introducer must be a CD account holder.
• Photograph must be attested by the introducer.
• Signed and rubber stamp seal of the client.
• Valid trade license from Municipality/ City Corporation.
• Account agreement form.
• Mandate if operation by third party is to be allowed.
4.4 PARTNERSHIP FIRM:
There is a different account form for proprietorship firm. Introduction of running an account is given in this form. The following documents are required to open this type of accounts:
• Photograph.
• An introducer of Jamuna Bank Ltd. Introducer must a CD account holder.
• Photograph must be attested by the introducer.
• Photocopy of partnership deed registered with register of firm duly attested by notary public.
• Photocopy of registration certificated duly attested by notary public in cash of registered firm.
• Letter of partnership duly signed by all partners in cash of non registered firm.
• Resolution signed by all to open the account.
• Mandate as to operation of the account.
• Account agreement form.
• Valid trade license from Municipality/ City Corporation.
4.5 LIMITED COMPANY:
A separate account opening form is used for limited company. There are two kinds of limited company public limited company and private limited company. The bank always takes precautions for opening this type of accounts. Several documents are submitted by the client, which should be checked carefully by the bank to legally in a safe position. The following documents are required to open this type of accounts:
4.6 PRIVATE LIMITED COMPANY:
• Photograph.
• An introducer ofJamuna Bank Ltd. Introducer must a CD account holder.
• Photograph must be attested by the introducer.
• Memorandum of Association and Articles of Association duly certified by the Chairman of Secretary.
• Resolution of Board duly certified by the Chairman/ Secretary/ authorizing to open the account with the bank and naming the persons who will operate the account, as per provision of Articles of Association.
• Principal agreement form.
• Certificate of incorporation duly certified by Chairman/ Secretary.
• List of directors as per return of joint stock Company with signature.
4.7 PUBLIC LIMITED COMPANY:
• Photograph.
• An introducer of National bank. Introducer must a CD account holder.
• Photograph must be attested by the introducer.
• Memorandum of Association and Articles of Association duly certified by the Chairman of Secretary.
• Certificate of incorporation duly certified by Chairman/ Secretary.
• Resolution of Board duly certified by the Chairman/ Secretary/ authorizing to open the account with the bank and naming the persons who will operate the account, as per provision of Articles of Association.
• Principal agreement form.
• Certificate of commencement of business.
• List of directors as per return of joint stock Company with signature.
4.8 CLUB SOCIATY:
The following document duly completed shall be obtained from the customer at the time of current deposit account of association / club / society etc.
• Photograph.
• Signed and rubber stamp seal of the client.
• An introducer ofJamuna Bank Ltd. Introducer must a CD account holder.
• Certified true copy of the constitution.
• Certificate of registration of the association.
• List of the member of governing body.
• Exact of resolution of the association.
4.9 SAVING ACCOUNT (INDIVIDUAL / JOINT):
Savings account (SB) is meant for the people of the lower & middle classes who wish to save part of their incomes to meet their future needs & intended to earn to an income form their savings. For opening of this type of accounts following requirements are necessary:
• Photograph attested by the introducer.
• An introducer of National bank Bangladesh Ltd. Introducer must have the SB account holder.
For joint accounts, signatures of all the account holders are necessary. Interest rate of saving deposit & sort-term deposit (STD) are as follows:
The interest rate on deposits are being revised with effect from 18.11.2008
Types of Deposit Deposit Rates
Savings Bank Deposit (SB)
Short Term Deposit (STD):
Less Than Tk. 1.00 crore
Tk. 1.00 crore and above but less than Tk. 5.00 crore
Tk. 5.00 crore and above but less than Tk. 10.00 crore
Above Tk. 10.00 crore
Bank to Bank 6.00%
4.50%
6.00%
6.50%
7.00%
7.00%
4.10 FIXED DEPOSIT REVENUE (FDR):
FDR is one kinds of fixed deposit scheme. Normally it can be fixed for 01 Month, 03 month, 06 month & 12 month. Its interest rate is higher than normal account.
The required document for FDR is as follows:
• PP size photos (account holder)
• One PP size photo (nominees)
• Photocopy of national ID card
The interest rate on deposits are being revised with effect from 18/11/2008
4.11 LOCAL REMMITENCE SECTOR:
The commercial Bank Remittance facilities to it’s customer is to enable them top avoid risk rising out of profit or loss in cash carrying cash money to one place to another or making payment to some one in another places. Banks take this risk remit the fund on behalf of the customers to save them from any awkward happening through the network of their branches and ensure payment to the beneficiary in exchange of a little bit benefit known as commission. There are four mode of remitting money form one place to another.
♦ Pay Order Issue (PO):
Following procedure is maintained for the issuance of pay order (PO):
• Customer is given a PO form.
• After filling the form carefully, the customer is pays the money in cash or by cheques.
• The concerned teller then issue PO on its specific block. This block has three parts, one for bank and another two for customer. “A/C payee” crossing its sealed on all PO issued by the bank. The teller then writes down the name and address of the beneficiary on the main part of the PO block. In other two part name and address of the customer is written.
• The teller gives an entry to the registry book and maintains the same number of PO block.
• Two authorized officer signed the PO block.
• At the end customer is provided with the two parts of the PO block after signing of the backs of bank’s part.
♦ Demand Draft Issue (DD):
• Customer is supplied with DD form.
• Customer fill up the form, which includes the name of the drawer, name of the payee, amount of money to be sent, commission, name of the drawee branch, signature and address of the drawer.
• The customer may pay in cash or by cheques from his accounts (if any).
• After the money is paid and the form is sealed and signed accordingly it is given to the DD issuing desk.
• Upon block have two parts one for bank and another for customer.
• Bank part contains issuing date, drawer’s name, payee’s name and some of the money and name of the drawee branch.
After finishing all the required information entry of the DD is given in the DD issuing register and at the same time bank issues a DD confirmation slip is entered into the DD advice issue register and a number is put on the confirmation slip form the same register. Later the bank mails this advice to the drawer branch.
4.12 BILLS CLEARING SECTION:
According to the article 37(2) OF Bangladesh Bank order, 1972, the banks which are the number of clearinghouse are called as schedule banks. The schedule banks clear the cheques drawn upon one another through the clearinghouse. This is an agreement by the central bank where every day the representative of the member banks gather to clearing the cheques. Banks for credit of the proceeds to the customers account accept cheques and other similar instruments. The bank receives many such instruments during the day form account holders. Many of these instruments are drawn payable at other banks. As cheques payment order or bill come form a bank with the range of local clearinghouse then it is sent for collection through clearinghouse. The cheques may be crossed or not, if a customer of Jamuna Bank Ltd. deposits cheques of another bank which is with in clearinghouse, then the bank will credit his account, and collect the cheques. Through the amount is credited in the customer’s account but will not get the money until the cheques is honored.
The department in the branch that involves in clearing cheques is known as clearing department. The function of this department is –
1. Preparation of clearing Outward and Inward Lodgment and record maintenance of the same.
2. Batch posting as when required. The procedures are as follows.
(i) The collecting instrument will be received with a credit voucher and customer part of the credit voucher will be returned with a received seal.
(ii) The collecting cheques will be crossed specially.
(iii) An entry has to be given in the outward clearing register along with clearing seal.
(iv) The cheques have to be sent in Jamuna Bank Ltd Local Office and Local Office will clear clearinghouse of Bangladesh Bank.
But when the cheques is drawn for collection form other branch of Jamuna Bank Ltd, with in the range of it clearing area then it no need to go the clearinghouse Bangladesh Bank. This type of cheques can be collected through inward clearinghouse of Jamuna Bank Ltd itself.
At the time of sending instruction of outward clearing the following account procedure has to be done. Essential things for clearing the instrument:
There are three Essential things for clearing the instrument:
(i) Crossing seal.
(ii) Endorsement seal
(iii) Clearing seal
4.13 CASH SECTION:
Cash section is a very sensitive organ in a branch and is handling with extra care. Operation of these section beings at the beginning of the banking hour. Cash officer being his transaction with taking money form the vault, known as the opening cash balance. Vault is kept in a much secured room. Keys to the room under control of the cash officer and branch in charge. The amount of opening cash balances entry into the cash register. After transaction of whole day, the surplus money remain in the cash counter is put back in the vault and known as the closing balance. The maximum amount of money that the branch can kept in its vault is only TK. 1, 50, 00,000/- according to the permission of the Bangladesh Bank and relative insurance policy. Money is received and paid in this section.
Cash Receipt:
• At first the depositor fills the deposit slip. There are two types of deposit slip in this branch. One for saving account and another for current account.
• After filling the required deposit slip, depositor the money.
• Officer at the cash counter receives the money, count it, enter the amount of money in the scroll register kept at the counter, seal the deposit slip and sign on it with date.
• Then this slip is passed to another officer who enters the scroll number given by the cash counter in his register along with the amount of the money, signs the slip and kept the bank’s part of the slip. Other part is given to the depositor.
• At the and of the day entries of the both of the register are cross cheque used with the register kept at the cash counter to see whether the transaction is correct or not.
Cash Payment:
• When a person comes to the bank to cash a cheque he first gives in to if the account have sufficient fund in the computer in charge will post it into the computer.
• There are two computer desks. One for saving account and other for current account. So cheques are deposited at respective computer desk. If the cheques is not dishonor the bearer will get a token as to show that he is the true owner of the cheque while receding the money form cash counter.
• This cheque is then sent to the concern officer. The concerned officer verifies the cheque.
• The officer first checks carefully it has any kind of fraudulent activity. He also check the date of the cheque amount in word in figure and signature of the drawer in the face of the cheques and back side of the cheques. In cash of barer cheques will also put a signature at the back side.
• The officer then put his initial beside the bearer signature. Officer will also sign it on its face. Will write down the amount by red pen will put on a scroll number from his scroll register.
• After this primary procedure the cheques will sent to the cash counter. If it is a bearer cheques then bearer is ask again to sign on the back of the instrument which is also match with the bearer signature.
• If every thing is found alright the cash officer will then enter the scroll number in his registers and will pay the money to the bearer or drawer.
Dishonor of Cheques:
The reasons for dishonoring the cheques are as follow:
• Insufficient fund.
• Payment stopped by drawer.
• Alteration required drawer signature.
• Effect not clear in the cheque.
• Exceed arrangement in the cheque.
• Full cover not received.
• Payee’s endorsement irregular.
• Drawer signature different and required.
• Cheque is post dated.
• Crossed cheque must be presented through a bank.
• Clearing stamp must be required cancellation.
• Cheque crossed “Accounts pay only”.
• Collecting bank discharge irregular.
• No advice.
• Pay order by the treasury officer required.
• Cheques are mutilated.
Deposit Section:
The function of the deposit section is very important. It is fully computerized. The Officer of the deposit section maintains account number of all the customers of the bank. They are used different code number for different account. By this section a depositor can know what is the present position of his/her account. The officer makes three types of transactions such as cash, clearing and transfer.
This section perform the following task
• Post all kind of transaction.
• Provide on demand report.
• Cheque maintenance.
• Preparation of day transaction position.
• Preparation of closing monthly transaction.
Closing Accounts:
In the following situation an account is closed.
• If the customer is willing to close his account.
• Death of the customer.
• Customer’s insanity and insolvency.
• If the branch finds any reasonable ground for closing the account.
• If there is any notice issued by the Court on the bank branch close the account.
In order to close the account, the checkbook is to be returned to the branch. Required charges are realized from the account and the remaining balance is then paid to the customer. Necessary entries are posted to the “A/C Closing Register” and in the computer as well. In case of joint account the application for closing the account should be signed by the joint account holder. The fee for the closing an account is TK. 200 for SB, CD, and STD account.
4.14 ACCOUNTS SECTION:
Accounts department maintains the process of recording classifying, identifying and Calculation of all transaction. It maintains clean cash book, supplementary, voucher register etc. Here also maintains Daily statement, weekly statement, monthly statement etc. We can know about the total profit or loss from the statement of affairs. In clean cash book there are records of three different areas namely cash, clearing and transfer. And here both debit and credit side has to be equal. It is maintained daily basis. After calculating all of these there will be opening balance and closing balance. The closing balance of today will be the opening balance of tomorrow. Finally there will be a great total. In clean cash book there is also the number of total debit voucher and credit voucher.
4.15 LOANS AND ADVANCES:
National Bank Ltd. Introduced Consumer Credit Scheme for its customer approved by the Board of Directors of the Bank with the following loan products:
(1) Vehicle Loan
(2) Domestic Appliances Loan
(3) Office equipment Loan
(4) Entertainment purpose Loan
(5) Loan for intangible items
(6) Others
Bangladesh Bank under cover of BRPD Circular No, 07 dated 3rd November 2004 forwarded “Prudential Guidelines for Consumer Financing”. The Banks were advised to develop products (PPG) under the guidelines and implement the prudential regulation for their Banks. Accordingly a committee was constituted. The committee has set the following Target Segments of the customers for the consumer products:
Target Segments
Any individual having reliable source of income,
Employee of Govt. /Semi Govt./Corporation/Autonomous Bodies.
Employee of reputed Multinational/Corporation and Large Local Corporate.
Employee of reputed Universities/Colleges/Schools. Employee of reputed NGO/Aid Agencies. Other Salaried Person acceptable to Bank.
Tax paying Businessmen having adequate cash flow.
Tax paying Self-employed Person and individual having reliable source of income.
Professional i.e. Physician, Dentist, Engineers, IT Professional etc.
The committee studied existing products available in the market. Considering the market demand and investment opportunities in Consumer Financing Sector, the Committee has formulated the following 7 (seven) products for our Bank to be launched under Consumer Financing design:
1. Auto Loan
2. Consumer Durable Loan
3. Secured Personal Loan
4. Personal Loan
5. Education Loan
6. Loan for Professional
7. House Building Loan
4.16 MINIMUM REQUIREMENTS FOR CONSUMER FINANCING:
Apart from the specific regulations given under each mode of financing separately, general requirements laid down here should be followed while undertaking consumer financing. It may be noted that these are the minimum requirements and should not in any way be construed to restrict the role of the management processes through establishing comprehensive credit risk management systems appropriate to their type, scope, sophistication and scale of operations, The policies, procedures and practices to define risks, stipulate responsibilities, specify security requirements, design internal controls of the Bank ensure strict compliance with them.
AUTO LOAN
♦ Customer Segment:
Employees of Govt. / Semi Govt. / Corporation / Autonomous body
Employees of commercial Banks, Foreign Bank and other reputed Financial
Employees of reputed Multinational Corporation and large local corporation
Employee of reputed University / college / School
Employee of reputed NGOs/ Aid agencies.
Other salaried person acceptable to the Bank.
Tax paying Business having adequate cash flow,
Tax paying self –employed person and individual having reliable source of income.
♦ Purpose: Purchase of new or recondition vehicles for personal use only (Non- Commercial)
♦ Nationality: Bangladeshi
♦ Eligibility: Customers must have an account with Jamuna Bank Ltd.
♦ Age limit:
Minimum age 25(twenty five).
Maximum age 60(sixty five) years at the time of maturity of loan.
♦ Monthly Income:
Take home salary a minimum of three times of equated monthly installment
For businessmen / individual minimum monthly net income should be three times of equated monthly installment.(Income from flat/ house may be taken in to consideration)
♦Minimum service length:
♦ Service holder in Govt. /Semi-Govt./ Corporation minimum Class-1 officer or equivalent with 5 years confirmed service. In other case, confirmed / regular executives having at least 5 years service / experience
♦ Loan Size: Maximum Tk 15, 00,000 (Tk fifteen lac).
♦ Required documents:
Copy passport size photographs of intending borrowers & guarantor.
Letter of introduction from employer
Bank statement for (for last 6 month)
Personal Net Worth Statement
Copy of passport/Voter IC/ Driving License(if any)
Utility bill copy (Telephone/Gas/Electricity)
Salary Certificate / Trade License.
T.I. Number
Approved plan from the competent authority.
CIB report on the borrower as required.
♦Debt: Equity Ratio: 60:40
♦ Rate of interest: @ 14.50% p.a. with quarterly rests or as revised from time to time.
♦ Tenor:
Maximum 12(twelve) months
Maximum 60(sixty) months
Repayment method: Equal monthly installment
Disbursement mode: Crediting to customer’s Saving / Current account maintained with the bank
First repayment due: One month after the date of disbursement
Loan processing fee: Tk. 2000 to be realized before disbursement of loan
Service charge: @ 1% p.a. on loan amount to be realized before disbursement of loan
Penal interest: Additional 2% p.a. on the overdue amount
Verification of personal details: Bank’s nominated agency or Bank official will verify the address and all telephone numbers of borrower & guarantor.
Substantiation of income following as appropriate
Salary certificate/ Salary Slip
Bank statements
Income Tax Returns of last period
♦ Present address: Borrower must reside for at least 6 months in the present address.
♦ Legal documents:
DP Note
Letter of arrangement
Letter of disbursement
Letter of installment
Letter of awareness from the Employer
Personal guarantee of spouse / parents.
One cheque covering residual amount of loan duly signed by the borrower.
Power of attorney to sell the mortgaged property.
Memorandum of deposit of cheques.
Any other documents if required.
Copy of fitness certificate
Hire purchase agreement
Comprehensive insurance of the vehicle
Authority to debit account for realization of cost of registration / renewal fitness, insurance premium etc.
♦ Other condition:
The borrower (Hire purchaser) shall bear cost of Insurance policy, fitness, tax token etc. every year. The copies of those must be submitted to the bank
CONSUMER DURABLE LOAN
♦Customer Segment:
Employees of Govt. / Semi Govt. / Corporation / Autonomous body
Employees of commercial Banks, Foreign Bank and other reputed Financial
Employees of reputed Multinational Corporation and large local corporation
Employee of reputed University / college / School
Employee of reputed NGOs/ Aid agencies.
Other salaried person acceptable to the Bank.
Tax paying Business having adequate cash flow,
Tax paying self –employed person and individual having reliable source of income.
♦ Purpose:
Purchase of consumer durables for personal/Family use items like-Television,
Refrigerator, Air conditioner, Washing machine, Computers or any other household.
Nationality: Bangladeshi
♦ Eligibility: Customers must have an account with Jamuna Bank Ltd.
Age limit:
Minimum age 25(Twenty five) years
Maximum age 60(sixty) years at the time of maturity
♦ Monthly Income:
i. Take home salary a minimum of three times of equated monthly installment
ii. For businessmen / individual minimum monthly net income should be three times of equated monthly installment.
♦ Minimum length of service/experience:
i. In case of Govt. employees 10 years confirmed service.
ii. In other case 1 year services having 3 years confirmed service with present employer.
iii. Businessman / self employed tax payer individual at least 2 years in business/ profession.
♦ Loan Size: Maximum Tk 1, 00,000 without collateral security.
♦ Required documents:
Copy passport size photographs of intending borrowers & guarantor.
Letter of introduction from employer
Bank statement for (for last 6 month)
Personal Net Worth Statement
Copy of passport/Voter IC/ Driving License(if any)
Utility bill copy (Telephone/Gas/Electricity)
Salary Certificate / Trade License.
T.I. Number
Quotation of the items
CIB report on the borrower as required.
♦ Debt Equity Ratio: 80:20
♦ Rate of interest: @ 16.50% p.a. with quarterly rests or as revised from time to time.
♦ Tenure:
• Minimum 12(twelve) month
• Maximum 36(forty eight )month
♦Repayment method: Equal monthly installment
♦ Disbursement mode: Payment to vendor/Crediting to customer’s Savings /Current A/c
First repayment due: One month after the date of disbursement of the loan.
♦ Loan processing fee: Tk. 500 to be realized before disbursement of loan
♦ Service charge: @ 1% p.a. on loan amount to be realized before disbursement of loan
♦ Penal interest: Additional 2% p.a.on the over due amount
♦ Verification of personal details: Bank’s nominated agency or Bank official will verify the address and all telephone numbers of borrower & guarantor.
♦ Substantiation of income following as appropriate
• Salary certificate/ Salary Slip
• Bank statements
• Income Tax Returns of last period
• Personal Net worth statement.
♦ Present address: Borrower must reside for at least 6 months in the present address.
♦ Restriction on purpose of the facility: No facility can be granted for purposes that are in contradiction with the low of land.
♦ Legal documents:
i. DP Note
ii. Letter of arrangement
iii. Letter of disbursement
iv. Letter of installment
v. Letter of awareness from the Employer
vi. Personal guarantee of spouse / parents.
vii. Memorandum of deposit of cheques.
SECURED PERSONAL LOAN
Customer Segment: Any individual can avail easy loan. Just walk-in to any of JBL’s branch and avail EASY LOAN.
Purpose: No limits for personal needs, needs are endless. JBL’s EASY LOAN is to serve one’s personal financial needs.
Nationality: To avail easy loan from JBL Bank one must be a Bangladeshi.
Age limit: Minimum age of an account holder must be 18(Eighteen years) years
Eligibility: Getting the Loan, if you are an adult person and have an account with JBL bank then you can easily apply for the EASY LOAN.
Required Document: To get easy loan from JBL bank the following documents are required
• 2(Two) copy passport size photographs from the intending borrower.
• CIB report on the borrower on as required.
Security: Pledge of instrument duly discharge by the holder (where applicable)
• FDR with JBL Bank Ltd.
• FDR with other Banks
• ICB unit Certificate
• Wage earner development Bond (WEDB).
• NFCD
• PSS Account / MIS
• Demented shares of A and B group trade in DSE and CSE.
• Any other eligible government’s securities authorized to allow credit facilities
Tenure:
• Maximum 12(Twelve) month for overdraft
• Maximum 36(thirty six) months for Loan General / Term Loan
(Tenure should not exceed maturity of the instrument)
Disbursement mode:
• Overdraft
• Loan General
• Term Loan
Repayment Method:
• Repayment will be made in lump sump within expiry or as per acceptable term.
• Interest to be serviced as and due (SOD/ General loan)
Maximum Loan Size:
a) Maximum 95% of the face value of FDR/NFCD/WEDB etc. Face value would mean the original amount for which the FDE/WEDB/NFCD was issued for the amount renewed.
b) Maximum 100% of the MIS amount where the interest is not allowed to be withdrawn until adjustment of the liability.
c) Maximum 70% of the MIS amount where the interest is allowed on monthly basis.
d) Maximum 100% of the deposit principal amount of PSS account where the deposit
amount is not less than Tk.10, 000
e) Maximum 90% of ICB Unit Certificate face value or quoted ICB buying price
wherever is less.
f) Deviation of above criteria may be considered on special case by the management.
Loan Processing Fee: Loan processing fee only Tk.300
Rate of Interest:
• National Bank FDR: 11% p.a. with quarterly rest of as revised from time to time
• ICB Unit Certificate and other Banks FDR and WEDB: 11.50%
• NFCD: 11.00%
• Pension Saving Scheme: 14.50%
• MIS: 14.50%
• Share: 16.00%
Penal Interest: Additional 2% p.a. on the overdue amount.
Legal Documents:
• DP Note
• Letter of arrangement
• Letter of disbursement
• Letter of installment
• Letter of continuity (for SOD limit)
• Letter if lien on security
• Letter of authority for encashment of security
• Surrender form (For ICB unit certificate)
• Form DB-19(WEDB)
• Confirmation of marking lien from concerned department / branch
• Confirmation of lien from concerned Banks head office (in case of other bank’s FDR)
• Pledge request form 19-1 signed by share holder
• Pledge set up confirmed by CDBL
PERSONAL LOAN
Customer Segment:
• Employees of Govt. / Semi Govt. / Corporation / Autonomous body
• Employees of commercial Banks, Foreign Bank and other reputed Financial
• Employees of reputed Multinational Corporation and large local corporation
• Employee of reputed University / college / School
• Employee of reputed NGOs/ Aid agencies.
• Other salaried person acceptable to the Bank.
• Tax paying Business having adequate cash flow,
• Tax paying self –employed person and individual having reliable source of income.
Purpose: To meet personal financial requirement. The customer has to declare the purpose of the loan and purpose may be as follows:-
i. Marriage expense
ii. Holiday expenses
iii. Emergency medical needs
iv. CNG conversion for own private car
v. Home renovation / interior decoration
vi. Any other purpose
Nationality: Bangladeshi
Eligibility: Customers must have an account with Jamuna Bank Ltd.
Age limit:
Minimum age 25(twenty five).
Maximum age 60(sixty five) years at the time of maturity of loan.
Monthly Income:
i. Take home salary a minimum of three times of equated monthly installment
ii. For businessmen / individual minimum monthly net income should be three times of equated monthly installment.(Income from flat/ house may be taken in to consideration)
Minimum length of service/experience:
i. In case of Govt. employees 5 year confirmed service.
ii. In other case confirmed/ regular employee with three years experience having 6 month employment with present employer.
Loan Size: Maximum Tk 75, 00,000 (Tk seventy five lac)
Required documents:
• Copy passport size photographs of intending borrowers & guarantor.
• Letter of introduction from employer
• Bank statement for (for last 6 month)
• Personal Net Worth Statement
• Copy of passport/Voter IC/ Driving License(if any)
• Utility bill copy (Telephone/Gas/Electricity)
• Salary Certificate / Trade License.
• T.I. Number
• Approved plan from the competent authority.
• Estimated cost of construction/ purchase.
• Letter of allotment in case of flat.
• NOC for mortgage from competent authority
• CIB report on the borrower as required.
Debt: Equity Ratio: 50:50
Rate of interest: @ 16.50% p.a. with quarterly rests or as revised from time to time.
Tenure:
Maximum 12(twelve) months
Maximum 36(thirty six) months
Repayment method: Equal monthly installment
Disbursement mode: Crediting to customer’s Saving / Current account maintained with the bank
First repayment due: One month after the date of disbursement
Loan processing fee: Tk. 1000 to be realized before disbursement of loan
Service charge: @ 1% p.a. on loan amount to be realized before disbursement of loan
Penal interest: Additional 2% p.a. on the overdue amount
Verification of personal details: Bank’s nominated agency or Bank official will verify the address and all telephone numbers of borrower & guarantor.
Substantiation of income following as appropriate
• Salary certificate/ Salary Slip
• Bank statements
• Income Tax Returns of last period
Present address: Borrower must reside for at least 6 months in the present address.
Legal documents:
• DP Note
• Letter of arrangement
• Letter of disbursement
• Letter of installment
• Letter of awareness from the Employer
• Personal guarantee of spouse / parents.
• One cheque covering residual amount of loan duly signed by the borrower.
• Power of attorney to sell the mortgaged property.
• Memorandum of deposit of cheques.
• Any other documents if required.
EDUCATION LOAN
Customer Segment:
Employees of Govt. / Semi Govt. / Corporation / Autonomous body
Employees of commercial Banks, Foreign Bank and other reputed Financial
Employees of reputed Multinational Corporation and large local corporation
Employee of reputed University / college / School
Employee of reputed NGOs/ Aid agencies.
Other salaried person acceptable to the Bank.
Tax paying Business having adequate cash flow,
Tax paying self –employed person and individual having reliable source of income.
Purpose: Higher education of children
Nationality: Bangladeshi
Eligibility: Customers must have an account with Jamuna Bank Ltd.
Age limit: Maximum age 65(sixty five) years at the time of maturity of loan.
Monthly Income:
i. Take home salary a minimum of three times of equated monthly installment
ii. For businessmen / individual minimum monthly net income should be three times of equated monthly installment.
Minimum length of service/experience:
i. In case of Govt. employees 10 years confirmed service.
ii. In other case 10 yeas services having 3 years confirmed service with present employer.
iii. Businessman / self employed tax payer individual at least 10 years in business/ profession
Debt Equity Ratio: 50:50
Rate of interest: @ 16.50% p.a. with quarterly rests or as revised from time to time.
Tenor:
Minimum 12(twelve) month
Maximum 48(forty eight )month
Repayment method: Equal monthly installment
Disbursement mode: Crediting to customer’s Saving / Current Account.
First repayment due: One month after the date of disbursement of the loan.
Loan processing fee: Tk. 1000 to be realized before disbursement of loan
Service charge: @ 1% p.a. on loan amount to be realized before disbursement of loan
Penal interest: Additional 2% p.a.on the over due amount
Verification of personal details: Bank’s nominated agency or Bank official will verify the address and all telephone numbers of borrower & guarantor.
Substantiation of income following as appropriate:
i. Salary certificate/ Salary Slip
ii. Bank statements
iii. Income Tax Returns of last period
iv. Personal Net worth statement.
Present address: Borrower must reside for at least 6 months in the present address.
HOUSE BUILDING LOAN
Customer Segment:
• Employees of Govt. / Semi Govt. / Corporation / Autonomous body
• Employees of commercial Banks, Foreign Bank and other reputed Financial
• Employees of reputed Multinational Corporation and large local corporation
• Employee of reputed University / college / School
• Employee of reputed NGOs/ Aid agencies.
• Other salaried person acceptable to the Bank.
• Tax paying Business having adequate cash flow,
• Tax paying self –employed person and individual having reliable source of income.
Purpose: Purchase of flat / construction of own house.
Nationality: Bangladeshi
Eligibility: Customers must have an account with Jamuna Bank Ltd.
Age limit:
Minimum age 25(twenty five).
Maximum age 65(sixty five) years at the time of maturity of loan.
Monthly Income:
i. Take home salary a minimum of three times of equated monthly installment
ii. For businessmen / individual minimum monthly net income should be three times of equated monthly installment. (Income from flat/ house may be taken in to consideration)
Minimum length of service/experience:
i. In case of Govt. employees 5 year confirmed service.
ii. In other case 5 year services having 3 years confirmed service with present employer.
iii. Businessman / self employed tax payer individual at least 10 years in business/ profession.
Loan Size: Maximum Tk 75, 00,000 (Tk seventy five lac)
Required documents:
• 2 copy passport size photographs of intending borrowers & guarantor.
• Letter of introduction from employer
• Bank statement for (for last 6 month)
• Personal Net Worth Statement
• Copy of passport/Voter IC/ Driving License(if any)
• Utility bill copy (Telephone/Gas/Electricity)
• Salary Certificate / Trade License.
• T.I. Number
• Original Deed
• Bia Deed
• CS, SA, RS, & Hal Parcha.
• Mutation with DCR
• Up to date rent receipt.
• Site Map / Municipal tax receipt.
• Non-encumbrance Certificate
• Approved plan from the competent authority.
• Estimated cost of construction/ purchase.
• Letter of allotment in case of flat.
• NOC for mortgage from competent authority
• CIB report on the borrower as required.
• Money receipt for payment of equity portion in case of flat purchase
Debt Equity Ratio: 50:50
Rate of interest: @ 15.00% p.a. with quarterly rests or as revised from time to time.
Tenure: Maximum 15(fifteen) years
Repayment method: Equal monthly installment
Disbursement mode:
i. Phase wise disbursement by Crediting to customer’s Saving / Current account against progress of work of the construction of house.
ii. Single disbursement to the Real Estate Developer/Owner through payment order on the date of registration of sale deed in case of purchase of flat.
iii. Disbursement on installment basis to the real estate Developer through payment order as per allotment letter and agreed term & condition as stipulated under legal documentation clause.
First repayment due:
i. For purchase of flat six month after the date of disbursement or one month after the date of handing over the flat whichever date is earlier of the loan.
ii. For construction of house depending upon construction period but not exceeding 12 months from the date of first disbursement.
Loan processing fee: Tk. 5000 to be realized before disbursement of loan
Service charge: @ 2% p.a. on loan amount to be realized before disbursement of loan
Penal interest: Additional 2% p.a. on the overdue amount
Verification of personal details: Bank’s nominated agency or Bank official will verify the address and all telephone numbers of borrower & guarantor.
Substantiation of income following as appropriate
• Salary certificate/ Salary Slip
• Bank statements
• Income Tax Returns of last period
• Cash flow from the rental of the proposed property.
Present address: Borrower must reside for at least 6 months in the present address.
Legal documents:
i. DP Note
ii. Letter of arrangement
iii. Letter of disbursement
iv. Letter of installment
v. Letter of awareness from the Employer
vi. Personal guarantee of spouse / parents.
vii. 24 post dated cheques in favor of Bank for payment of monthly installments each duly signed by the borrower. After two years fresh cheque to be obtained.
viii. One cheque covering residual amount of loan duly signed by the borrower.
ix. Power of attorney to sell the mortgaged property.
x. Legal mortgaged of land & building / flat with undivided and undemocratic proportionate share of land.
xi. Memorandum of deposit of cheques.
xii. Any other documents if required.
Special condition: Proposal for purchase of flat is to be considered from the Bank approved Real Estate Developer only
5.1 DEFINITION OF FOREIGN EXCHANGE:
Foreign Exchange is a process which is converted one national currency into another and transferred money from one country to another country.
According to Mr. H. E. Evitt. Foreign Exchange is that section of economic science which deals with the means and method by which right to wealth in one country’s currency are converted into rights to wealth in terms of another country’s currency. It involved the investigation of the method by which the currency of one country is exchanged for that of another, the causes which rented such exchange necessary the forms which exchange may take and the ratio or equivalent values at which such exchanges are effected.
Foreign exchange is the rate of exchange in the both country’s currency.
5.2 FOREIGN TRADE AND FOREIGN EXCHANGE:
International trade refers to trade between the residents of two different countries.
Each country functions as a sovereign State with its set of regulations and currency. The difference in the national of the exporter and the importer presents certain peculiar problems in the conduct of international trade and settlement of the transactions arising there from. Important among such problems are:
(a) Different countries have different monetary units;
(b) Restrictions imposed by countries on import and export of goods;
(c) Restrictions imposed by nations on payment from and into their countries;
(d) Differences in legal practices in different countries.
Foreign exchange means foreign currency and includes:-
(i) All deposits, credits and balances payable in any foreign currency and any drafts, travelers cheques, letters of credit and bills of exchange, expressed or drawn in Indian currency but payable in any foreign currency;
(ii) Any instrument payable, at the option of the drawee or holder thereof or any other party thereto. Either in Indian currency or in foreign currency or partly in one and partly in the other. Thus, foreign exchange includes foreign currency; balances kept abroad and instruments payable in foreign currency.
5.3 FUNCTIONS OF FOREIGN EXCHANGE:
The Bank actions as a media for the system of foreign exchange policy. For this reason, the employee who is related of the bank to foreign exchange, specially foreign business should have knowledge of these following functions :-
i) Rate of exchange.
ii) How the rate of exchange works.
iii) Forward and spot rate.
iv) Methods of quoting exchange rate.
v) Premium and discount.
vi) Risk of exchange rate.
vii) Causes of exchange rate.
viii) Exchange control.
ix) Convertibility.
x) Exchange position.
xi) Intervention money.
xii) Foreign exchange transaction.
xiii) Foreign exchange trading.
xiv) Export and import letter of credit.
xv) Non-commercial letter of trade.
xvi) Financing of foreign trade.
xvii) Nature and function of foreign exchange market.
xviii) Rules and Regulation used in foreign trade.
xix) Exchange Arithmetic.
5.4 LETTER OF CREDIT (L/C):
On behalf of the importer if the Bank undertakes to make payment to the foreign bank is known as documentary credit or letter of credit. A letter of credit is an instrument issued by a bank to a customer placing at the letters disposal such agreed sums in foreign currency as stipulated. An importer is countries request his bank to open a credit in foreign currency in favour of his exporter at a bank in the letters country. The letter of credit is issued against payment of amount by the importer or against satisfactory security. The L/C authorizes the exporter to draw a draft under is terms and sell to a specified bank in his country. He has to hand over to the bank, will the Bill of exchange, shipping documents and such other papers as may be agree upon between the exporter and the importer. The exporter is assured of his payment because of the credit while the importer is protected because documents in respect of export of goods have to be delivered by the exporter to the paying bank before the payment is made.
Form of letter of credit:
A letter of credit (L/C) may be two forms. These as below:
i) Revocable letter of credit.
ii) Irrevocable letter of credit.
(i) Revocable L/C: If any letter of credit can be amendment or change of any clause or canceled by consent of the exporter and importer is known as revocable letter of credit.
A revocable letter of credit can be amended or canceled by the issuing bank at any time without prior notice to the beneficiary. It does not constitute a legally binding undertaking by the bank to make payment. Revocation is possible only until the documents have been honored by the issuing bank or its correspondent. Thus a revocable credit does not usually provide adequate security for the beneficiary.
(ii) Irrevocable L/C: If any letter of credit can not be changed or amendment without the consent of the importer and exporter is known as irrevocable letter of credit.
An irrevocable credit constitution a firm undertaking by the issuing bank to make payment. It therefore, gives the beneficiary a high degree of assurance that he will paid to his goods or services provide he complies with terms of the credit.
Types of Letter Of Credit:
Letters of Credit are classified into various types according to the method of settlement employed. All credits must clearly indicate in major categories.
i) Sight payment credit.
ii) Deferred payment credit.
iii) Acceptance credit.
iv) Negotiation credit.
v) Red close credit.
vi) Revolving credit.
vii) Stand by credit.
viii) Transferable credit.
(i) Sight payment credit: The most commonly used credits are sight payment credits. These provide for payment to be made to the beneficiary immodestly after presentation of the stipulated documents on the condition that the terms of the credit have been complied with. The banks are allowed reasonable time to examine the documents.
(ii) Deferred payment credit: Under a deferred payment credit the beneficiary does not receive payment when his presents the documents but at a later date specified in the credit. On presenting the required documents, he received the authorized banks written undertaking to make payment of maturity. In this way the importer gains possession of the documents before being debited for the amount involved.
In terms of its economic effect a deterred payment credit is equivalent to an acceptance credit, except that there is no bill of exchange and therefore no possibility of obtaining money immediately through a descant transaction. In certain circumstances, how ever, the banks payment undertaking can be used as collateral for an advance, though such as advance will normally only be available form the issuing or confirming bank. A discountable bill offers wider scope.
(iii) Acceptance Credit: With an acceptance credit payment is made in the form of a tern bill of exchange drawn on the buyer, the issuing Bank or the pendent bank. Once he has fulfilled the credit requirements, the beneficiary can demand that the bill of exchange be accepted and returned to him. Thus the accepted bill takes the place of a cash payment.
The beneficiary can present the accented bill to his own bank for payment at maturity or for discounting, depending on whether or not he wants cash immediately. For simplicities sake the beneficiary usually gives on instruction that the accepted bill should be left in the safekeeping of one of the banks involved until it matures. Bill of Exchange drawn under acceptances credit usually has a term of 60-180 days.
The purpose of an acceptance is to give the importer time to make payment. It he sells the goods before payments fall due, he can use the proceeds to meet the bill of Exchange in this way, he does not have to borrow money to finance the transaction.
(vi) Negotiation credit: Negotiation means the purchase and sale of bill of exchange or other marketable instruments. A negotiation credit is a commercial letter of credit opened by the issuing bank in the currency of its own country and addressed directly to the beneficiary. The letter is usually delivered to the addressee by a correspondent bank. This credit is sometimes also as Hand on credit.
The letter of credit empowers the beneficiary to draw a bill of exchange on the using bank, on any other named drawer or on the applicant for the credit. The beneficiary can they present this bill to a bank for negotiation, together with the original letter of credit and the documents stipulated therein.
Payment of the bill of exchange is guaranteed by the issuing bank on the condition that the documents presented by the beneficiary are in order. The most common form of negotiation credit permits negotiation by any bank. In rare case the choice is limited to specified banks.
(iv) Red clause credit: In the case of a red clauses credit, the seller can obtain an advance for an agreed amount from the correspondent bank, goods that are going to be delivered under the documentary credit. On receiving the advances, the beneficiary must give a receipt and provide a written undertaking to present the required documents before the credit expires.
The advance is paid by the correspondent bank, but it is the using bank that assumes liability. If the sellers does not present the required documents in time and fails to refund the advance, the correspondent bank debits the issuing bank with the amount of the advance plus interest. The issuing bank, in turn, has reveres to the applicant, who therefore bears the risk for the advance and the interest accursed.
The clause permitting the correspondent bank to make an advance used to be written on red in home the name red clause credit.
(v) Revolving Credit: Revolving credit can be used when goods are to be delivered in installment at specified intervals. The amount available at any one time is equivalent to the value of one partial delivery.
A revolving credit can be cumulative or non-cumulative means that amount from unused or incompletely used portions can be carried forward to subsequent period. If a credit is non-cumulative, portions not used in the prescribing period case to be available.
(vi) Stand by credit: Stand by credit is encountered principally in the US. Under the laws of most US states, banks are prohibited from issuing regular quarantines, so credits are used instead. In Europe, too the use of this type of credit is increasing by virtue of their documentary credit, stand-by credit are governed by the UCP. However, their function is that of a grantee.
The types of payment and performance that can be guaranteed by stand-by credits include the following:
– Payment of thorium bill of exchange
– Repayment of bank advance
– Payment of goods delivered.
– Delivery of goods in accordance wets contract and
– Execution of construction contracts, supply and install contracts.
In order to enforce payment by the bank, the beneficiary merely presents a declaration stating that the applicant for the credit has failed to meet his contractual obligation. This declaration may have to be accompanied by other documents.
(vii) Transferable credit: transferable credits are particularly well adapted to the requirements of international trade. A trader who receives payment from a buyer in the form of a transferable documentary credit can use that credit to pay his own supplier. This enables him to carry out the transaction with only a limited and lay of his own funds.
The buyer supplies for an irrecoverable credit issued in the traders favor. The issuing bank must expressly designate the credit as transferable.
As soon as the trader receives the confirmation of credit he can request the bank to transfer the credit to his supplier. The bank is under no obligation to affect the transfer except in so far as it has expressly consented to do so.
The costs of the transfer are usually charged to the trader and the transferring bank is entitled to delete them in advance.
PARTIES TO A LETTER OF CREDIT:
A letter of credit is issued by a Bank at the request of an importer in favor of an exporter from whom he has contracted to purchases some commodity or commodities. The importer, the exporter and the issuing bank are parties to the letter of credit. There are however, one or more than one banks that are involved in various capacities and at various stages to play an important role in the total operation of the credit.
i) The opening Bank.
ii) The Advising Bank.
iii) The Buyer and the Beneficiary.
iv) The paying Bank.
v) The negotiating Bank.
vi) The confirming Bank.
i) The opening Bank: The opening Bank is one that issues the letter of credit at the request of the buyer. By issuing a letter of credit it takes upon itself the liability to pay the bills drawn under the credit. If the drafts are negotiated by the bank, the opening Bank reimburses that Bank. As soon as the opening Bank, issuing a letter of credit (L/C), it express its undertaking to pay the bill or bills as and when they are drawn by the beneficiary under the credit. When the bills are presented to or when antic is received that bills have been presented to a paying or negotiating Banks its liability matures.
ii) The Advising Bank: The letter of credit is often transmitted to the beneficiary through a bank in the latter country. The bank may be a branch or a correspondent of the opening bank. The credit is some times advised to this bank by cable and is then transmitted by it to the beneficiary on its own special form. On the other occasions, the letter is sent to the bank by mail or telex and forwarded by it to the exporter. The bank providing this service is known as the advising bank. The advising bank undertakes the responsibility of prompt advice of credit to the beneficiary and has to be careful in communicating all its details.
iii) The Buyer and the Beneficiary: The importer at whose request a letter of credit is issued is known as the buyer. On the strength of the contract that he makes with the exporter for the purchase of some goods that the letter of credit is opened by the opening bank.
The exporter in whose favour the credit is opened and to whom the letter of credit is addressed is known as the beneficiary. As the seller of goods he is entitled to receive payment which he does by drawing bills under the letter of credit (L/C). As soon as he has shipped the goods and has collected the required documents, he draws a set of papers and presents it with the documents to the opening bank or some other bank mentioned in the L/C.
iv) The paying Bank: The paying bank only pays the drafts drawn under the credit but under takes no opening bank, by debating the latter accounts with it if there is such an account or by any other measured up, between the two bankers. As soon as the beneficiary has received payment for the draft, he is out of the picture and the rest of the operation concerns only the paying bank and the opening bank.
v) The Negotiating bank: The negotiating bank has to be careful in scrutinize that the drafts and the documents attached there to be in conformity with the condition laid down in the L/C. Any discrepancy may result in refused on the part of the opening bank to honor the instruments is such an eventuality the negotiating bank has to look back to the beneficiary for refund of the amounts paid to him.
vi) The Confirming Bank: Sometimes an exporter stipulates that a L/C issued in his favour be confirm by a bank in his own country. The opening this country to add its confirming to the credit the bank confirming the credit is known as the confirming bank and the credit is known as confirmed credit.
5.6 CONTENTS OF THE LETTER OF CREDIT:
Banks normally issued letter of credit (L/C) on forms which clearly indicate the banks name and extent of the banks obligation under the credit. The contents of the L/C of different Banks may be different .In general L/C contains the following information:-
i) Name of the buyer: who is also known as the accounted since it is for his account that the credit has been opened?
ii) Name of the seller: Who is also known as the beneficiary of the credit?
iii) Moment of the credit: Which should be the value of the merchandise plus any shipping charges intent to be paid under the credit?
iv) Trade terms: Such as F.O.B and CIF
v) Tenor of the Draft which is normally dependent upon the requirements of the buyer.
vi) Expiration date: Which is specified the latest date documents may be presented. In this manner or by including additionally a latest shipping date, the buyer may exercise control over the time of shipment.
vii) Documents required: Which will normally include commercial invoice consular or customers invoice, insurance policies as certificates, if the source is to be effected by the beneficiary and original bills of lading.
viii) General description of the merchandise: Which briefly and in a general manner duly describes the merchandise covered by a letter of credit?
PROCEDURES OF OPENING THE L/C:
The importer after receiving the preformed invoice from the exporter, by applying for the issue of a documentary credit, the importer request his Bank to make a promise of payment to the supplier. Obviously, the bank will only agree to this request if it can rely on reimbursement by the applicant. As a rule accepted as the sole security for the credit particularly if they are not the short of commodity that can be traded on an organized market, such an arrangement would involve the bank in excessive risk outside its specialist field. The applicant must therefore have adequate funds in the bank account or a credit line sufficient to cover the required amount.
Banks deal in documents and not in goods. Once the bank has issued the credits its obligation to pay is conditional on the presentation of the stipulated documents with in the prescribed time limit. The applicant cannot prevent a bank from honoring the documents on the grounds that the beneficiary has not delivered goods on redder reissues as contracted.
The importer submits the following documents before opening of the L/C:
a. Tax Identification Number (TIN)
b. Valid Trade License.
c. Import Registration Certificate (IRC)
The Bank will supply the following documents before opening of the L/C:
a. LCA form.
b. Application and Agreement form.
c. IMP form
d. Necessary charge documents for documentation.
The above documents / papers must be completed duly signed and filled in by the party according to the instruction of the banker
DOCUMENTARYLETTEROF CREDIT (IMPORT/EXPORT CUMENTATION):
Documentary letter of credit is such kinds of commercial letter which a Bank issue on behalf of foreign seller (exporter) according to the direction of the (importers) purchasers. The documents shown under are known as export documents form the importer’s side. These are:-
The exporter submits the following papers/documents to the Negotiating bank:
i) Bill of exchange / Draft.
ii) Bill of lading.
iii) Airway bill / Railway receipt.
iv) Commercial invoice.
v) Insurance policy.
vi) Certificate of origin.
vii) Packing list.
viii) Weightment & measurement list.
Ix) Other etc.
(i) Bill of Exchange: The bill of exchange is that particular instrument through which payment is effected in trade deals internal and international. The payment for the goods is received by the seller through the medium of a bill of exchange drawn on the buyer for the amount depending on the contract. It is a negotiable instrument. There are five main parties involved in a bill of exchange. They are:-
(a) Drawer
(b) Drawee
(c) Payee
(d) Endorser
(e) Endorsee
(ii) Bill of lading: A bill lading is a document of title to goods entitling the holder to receive the goods as beneficiary or endorsee and it is with the help of this document on receipt from the exporter that the importer takes possession of the goods from the carrying vessel at the port of destination.
(iii) Airway bill / Railway receipt: When goods to be transported are small in bulk or requiring speedy delivery or those are perishable in nature on the deal is in between the neighboring countries then mode of transports other than shipping may be resorted to far the carriage of the goods Airways bill / Railway receipt take place of Bill of lading depending on the nature of the carrier.
(iv) Commercial Invoice: It is the seller’s bill for the merchandise. It contains a description of goods, the price per unit at a particular location, total value of the goods, packing specifications, terms of sale, letter of credit, bill of lading number etc. There is no standard form far a commercial invoice. Each exporter designs his own commercial invoice form. The invoice is made out by the seller under his signature in the name of the buyer and must be submitted in a set of at least 3 copies. Its main purpose is to check whether the appropriate goods have been shipped and also that their unit price, total value, marking on the package etc. are consistent with those given in other documents.
(v) Insurance policy: In the international trade insurance policy is a must to cover the risk of loss on consignments while they are on seas, roads, airways. The insurance is the responsibility of the buyers (consignee) under FAS, FOB and C&F contracts and of the seller (consignor) under CIF contract. The policy must be of the type as specified in the relative contract / credit. The policy would be for the value of CIF price plus 10 (ten) percent to cover the expenses and that is required to be obtained in the same currency as that of the credit and dated not later than the date of shipment with claims* being payable at the destination. It must be properly stamped. Like a bill lading it must be negotiable and be endorsed where it is payable to order.
(vi) Certificate of Origin: This is a certificate issued by a recognized authority in exporting country certifying the country of origin of the goods. It is usually by the Chambers of commerce. Some times, it is certified by local consul or Trade Representative of the importing country as per terms of the credit.
(vii) Packing List: The exporter must prepare an accurate packing list showing item by item, the contents of the consignment to enable the receiver of the shipment to check the contents of the goods, number and marks of the package, quality, per package net weight, gross weight, measurement etc.
(viii) Weightment and Measurement: Issued by recognized authority (like chambers of commerce and industry) in exporting country certifying correct weightment and measurement of the goods exported.
(ix) Bill of Entry: A bill of entry is documents which contain the particulars of the imported goods as well as the amount of customs duty payable.
The negotiating bank after received the above documents / papers then this bank scrutiny the documents. The negotiating bank sends the original shipping documents to the L/C opening bank and keeping the second copy with the negotiating bank.
Payment Against Documents (PAD)
Banks deal in documents and not in goods. If the shipping document against the L/C is in order then the L/C opening bank must have to payment to the foreign bank within 3 days or 72 hours according as Uniform Customs and Practice for Documentary Credit (UCPDC) 500 of revision of ICC.
If the shipping documents have any discrepancy, then the L/C opening bank informed to the negotiating bank within 7 days. Otherwise, the shipping documents have not discrepancy. If the importer have not adequate founds in the bank account then the bank payment to the foreign bank against the shipping documents.
L/C OPERATION OF JBL:
Today JBL is one of the leading and most successful Banking enterprises in the country. If pay a great role in the economy of the country. By export-import business the Bank play a great role to the economy of Bangladesh. JBL is one of the greatest bank in export-import business.
Foreign trade plays a vital role in the economic advancement process of a nation. So the trend of country’s foreign trade, i.e. import & export is of a great concern to the government of a country. Fluctuation in the parameters of foreign trade immediately brings about some impact on the total economy. As such the nature, trend and the volume of foreign trade are required to keep peace with the national economic needs and objective. There may be some areas where emphasis is to be given while there may be others which deserve restrictions or discouragement. Moreover the items of import & export value and volume of the same, the corresponding time period, sources of fund far payment and receipt, all these factors are to be considered very carefully for making necessary adjustment to match with the national economic policies as well as achieve balanced economic growth through the inter policy and inter policy co-ordination.
International trade policy relates to commercial policy which has two main components of Import policy relates to commercial policy which has two main components of Import policy and Export policy. With a view to achieving favorable balance of payment position as well as to encouraging or well to encouraging or well regulated and need based foreign trade of the country, the government formulates the national commercial policy i.e. import and export policy for a certain period considering all the favorable & unfavorable aspects of the nation’s previous trade performance as well as the future requirement and prospects.
As the policy matter and the operational of import & export trade are quite different, two separate policies for import & export trade are formulated by the government. Import policy refers to government policies account for a particular fiscal period envisaging the allocation of fund available from various sources for import of certain quantity of certain goods. The main purpose of the policy is to conserve scare foreign exchange & to ensure its utilization for the import of goods and services which have national priority. The selected persons on institutions those who have got valid Import Registration Certificate (IRC) form the Chief Controller of Import and Export (CCI & E) can import and they are known as importers.
These importers can import goods as entitled in each year as per import policy by opening letter of credit (L/C) through bank i.e. Authorized Dealer (A.D). Authorized Dealer means the branches of commercial banks, those who are authorized / licensed by the Bangladesh Bank to deal in foreign Exchange. Letter of Credit may be defined as the letter as the letter of undertaking or letter of guarantee issued by the L/C opening bank on behalf of the importer submits all the documents as mentioned in the L/C submits all the documents as mentioned in the L/C within the time schedule to his bank i.e. exporters bank.
Before opening L/C in favour of the exporter the entitlement of the importer (total amount in taka he can import as per import policy) to be registered with Bangladesh Bank. For this purpose the importer is to apply through L/C. Authorization form (LC A form). This is a set in quintuplicate and the authorized dealer will issue LCA form to the individual importer at their request. After filled up and signed up the appropriate column of the LCA from, the importer will submit it to Authorized Dealer who rnturn forward the same to Bangladesh Bank for registration where fund is purchased from Bangladesh Bank. After registration Bangladesh Bank forward the 1st and 2nd copy of LCA form to the Authorized Dealer, 3rd and 4th copy to CCI & E and keep the 5th copy as their office copy. 1st copy of LCA is known as Exchange Control copy against which Authorized Dealer can open L/C at the request of the importer. 2nd Copy is known as custom purpose copy which will be handed over to the importer who will clear the goods from the port on its arrival through this custom purpose copy of LCA along with other shipping documents.
OPEN AN L/C THE IMPORTER:
Now the importer will come to his Bank with a request to open an L/C along with the following documents / papers:-
1) L/C application and agreement Form (Bank’s prescribed application form) with adhesive stamp of Tk. 150 (Flexible).
2) Indent / Performa Invoice / Contract – 3 copies.
3) Insurance cover note with premium paid receipt.
4) IMP from one set duly signed by the importer.
5) Any other documents if necessary.
Authorized Dealer will scrutinize the documents and open the L/C infavour of the exporter by converting the Bangladesh Taka into foreign currency at the existing B.C selling rate of exchange. Care must be taken so that the limit of Bangladesh Taka is not exceeded in any way. The foreign currency value of the L/C must correspond the equivalent amount of Bangladesh Taka if LCA registered with Bangladesh Bank.
The Authorized Official of the Authorized Dealer will check the L/C very carefully and signed the same jointly and forward the 1st and 2nd copy to their foreign correspondent situated at the nearest place of the exporter. Thus Bank is known as Advising Bank. On receipt of the L/C the Advising Bank after verification of the duplicate copy at their end.
On getting the L/C the exporter prepares the goods and ship the same as per instruction of the L/C and obtain a Bill or Lading from the shipping Authority. The exporter will prepare bill of exchange, Invoice and other documents as specified in the L/C and submits the same along with the original copy L/C to his bank within the time mentioned in the L/C. The Bank with whom the exporter submits the documents is known as Negotiating Bank as this negotiates the document i.e. makes payment to the exporters.
The negotiating bank will scrutinize the documents with terms and conditions of the L/C very carefully. If every thing is in order the bank will make payment of the amount of L/C to exporter in their local currency by debiting to their own account. Subsequently the negotiating bank will claim the L/C with whom the Head Office of L/C opening bank maintained foreign currency amount.
This is known as Reimbursing Bank. Reimbursing Bank will make payment to the negotiating bank by debit to L/C opening Bank’s Head Office A/C. Simultaneously the negotiating bank will forward all the documents submitted by the exporter to the L/C opening bank as per instruction of the L/C. The date of forwarding letter of negotiating bank should be date of negotiation of documents.
On receipt of the shipping documents from the negotiating bank, the L/C opening bank will carefully scrutinize the documents with terms and conditions of the relative L/C. If there is no discrepancy, the documents will be lodged. Lodgment of documents means the entry of the particulars of the documents in the Register and preparation of vouchers by converting the foreign currency amount into Bangladesh Taka as the exchange rate prevailing on that date. This amount is due to the importer. The importer will be asked to take delivery documents by making payment of the bill amount excluding the margin deposited at the time of opening L/C. Payment of bill amount and to take delivery of documents by the importers is known as Retirement of Import Bills.
After taking delivery of documents from the L/C opening bank, the importer will clear the goods which has already been arrived or due to arrive from the customs authority on submission of these documents along with the custom purpose copy of LCA From.
Retirement of Document
On receipt of the copy of lodgment voucher from the Bank, the importer will deposit the required amount and taka delivery of the shipping documents. This stage is known as Retirement of Impart Bills.
Before retirement of impart bills, the L/C opening bank will calculate the charges which are to be realized from the importer.
Retirement vouchers to be prepared:
Dr. Opener A/C
Dr. Sunday Deposit A/C (Margin on L/C)
Cr. PAD / Draft Amount
Any other charges vouchers if necessary.
SCRUTINY OF DOCUMENTS:
The L/C opening bank being received the documents from the negotiated bank will scrutinize the documents with the respective L/C terms and condition.
i) Forwarding schedule of Negotiating Bank
– Whether there is any instruction.
– Whether these instruction can be complied with.
– Whether the negotiating commission realized.
ii) Bill of Exchange (Draft)
– Whether it is drawn in order.
– Whether the amount of draft corresponds with the L/C amount.
– Draft amount should be equal or less than the L/C amount.
– Whether the date of the draft of the within the date as per L/C etc.
iii) Bill of Lading (B/L)
– Whether the B/L is clean i.e. there is no clause like some cartons are broken or any other clause.
– Whether there is signature of shipping Authority.
– Whether the date of B/L is within the date of shipment as per L/C.
– Whether the freight is prepared or not as per L/C terms.
– Whether the part of shipment and part of destination are similar as per L/C.
– Whether the title of B/L belongs to L/C opening bank.
– Whether the full sets of B/L dispatched by negotiating bank etc.
iv) Commercial Invoice
– Whether the full particulars of goods have been incorporated.
– Whether the amount of invoice corresponds with the amount of Bill of Exchange and as per the L/C terms.
– Whether IRC No. LCA No etc. have been incorporated.
– Whether it is signed by the beneficiary.
v) Other Documents
– Whether all other documents are prepared as per L/C.
After securitization, the official concerned may found the following :-
i) Documents are in order i.e. no discrepancy.
ii) Minor discrepancy-Acceptable to the importer.
iii) Major discrepancy-May be acceptable to the Regulation or those are irremovable.
After performing necessary formalities & entry in respective registers documents to be handed over to the importer on proper acknowledgement after certification and endorsement of the documents.
Monthly Return
On the last working day of the month returns of bills lodged during the month through IMP From to be sent to Foreign Exchange Department, Bangladesh Bank.
DISPOSAL OF IMP FORM:
Original = From L/C opening bank to Bangladesh Bank after lodgment of documents.
Duplicate = To be filled by the L/C opening bank with exchange control copy of Bill of Entry submitted by the importer after clearance of the goods from the customs authority.
Triplicate = Office copy of L/C opening bank.
Quadruplicate = From L/C opening to Bangladesh Bank if the importer does retire the documents.
LOAN AGAINST IMPORTED MERCHANDISE – LIM (POST IMPORT FINANCE):
Definition of LIM:
Import Finance plays vital role in a country’s foreign trade business. Import of goods and service are needed no only for export production but also to supply domestic industry with the necessary inputs which are not locally available or available at uneconomic cost and are needed for expansion and development.
Loan against Imported Merchandise (LIM) is a facility provided by the Bank to the importers who are in shortage of fund to retire the import bills and thus to clear the goods from the post authority. In other works it may be referred as an advance against merchandise.
Cases of Lim Account:
LIM Accounts may be created in the following two cases:-
a) LIM Account on importer’s request.
b) Forced LIM Account.
c) LIM Account in importer’s request
After lodgment of documents, the importers concerned to be intimated for early retirement of the documents by paying outstanding bill amount including other charge. If the importer is not in a position to retire the bill out of his own sources at that moment may request the bank to clear the goods by creating LIM Account. On receipt of the importer request the official of the import bills section will prepare an office note by calculating the total landed cost of the consignment. To ascertain the landed cost the following points to be considered.
Efforts should be taken so that at least 20% to 30% margin of the landed cost may realize from the importer. Realization of margin will depend on the banker customer relationship and also on the marketability of the goods.
The following charge documents have to execute by the importer:-
i) DP Note (Demand Promissory note).
ii) Letter of Arrangement.
iii) Letter of Disbursement.
iv) Letter of pledge.
v) Any other document of necessary.
The branches Manager are not empowered to sanction the LIM A/Cs in favour of the importers for clearance the goods without obtaining the approval from Head Office.
On getting approval from Head Office on the Office Note the branch will send the documents to the port city branch by indorsing the bill of lading infavour of them with certification of invoice for clearance the goods through importers nominated as well as Bank’s approval C & F agent. In the forwarding letter clear instructions to be given for dispatching the goods either by train or by truck duly insured Branch Managers will have to take prior approval from International Division, Head Office to create LIM Account in favour of importers. Before sending the documents to the port city branch and under taking on prescribed from with special adhesive stamp of Tk. 80/- (Flexible) regarding the stipulated period sanctioned to the importer to be obtained.
The following accounting entries and vouchers are generally to be passed in the set of Retirement Vouchers on the same day at the branch:-
Dr. Customer A/C
Dr. LIM
Cr. IBTA / Pay order
Cr. PAD
The particulars of LIM A/C must be entered and voucher to be posted in the LIM Register.
After clearance, the goods should be stared either in Bank’s go down or in importer’s go down under bank’s lock and key and the particulars of goods to be entered in the space provided in the LIM Register. At the same time issuance of goods covering fire and other risk to be made. Go down staff salary, go down rent (if the goods stored at the Bank’s go down) and other miscellaneous charges in connection with the LIM A/C will be paid by debit to party’s LIM A/C under advice to the importer.
b) Forced Lim Account
Immediately after lodgment of documents the branch incumbent and concerned dealing official shall vigorously peruse importers far retirement of bills. PAD should not remain outstanding fare more than 30 days from the date of lodgment on as per norms.
If the party fails to retire the documents within 30 days or within the date of arrival of ship which ever is earlier the branch should sent the documents for clearance the goods. Other formalities in connection with the forced LIM A/C will be the same as in the case of LIM A/C created on importer’s request.
No further L/C’s of the party for whom the Bank was forced to clean the consignment and the party failed to take delivery of the goods within the time specified below under the head disposal of LIM stocks should be opened without prior approval from Head Office even if the same is within the discretionary power of branch Manager.
a) The LIM liability should be adjusted within a maximum period of 45 days from the date of storage for commercial importer and 60 days for industrial importers. (It may very as per circular)
b) Part delivery against payment may also be allowed if so desired by the party to clear the LIM liability within the aforesaid time, after recovery margin over the landed cost if possible, but such payment should be proportionate with outstanding LIM liability taking into account the interest, go down rent and other charges up to eventual date of final delivery. This should be so arranged that with the last delivery the entire LIM liability is fully adjusted. Special care should however to take to protect bank’s interest in case where all the packets / bundles are not of equal size quality and price.
c) Additional 30 days may be allowed to both commercial and industrials, if so approached by them for final adjustment. In the event of importer’s failure to lift the goods on payment of bank’s dues in full even within the extended period of 30 days, the following steps shall be taken by the branch incumbent:
i) Final notice shall be issued on importer’s giving 15 days time for payment.
ii) Incase on response is received from importer legal notice shall be served on the party giving another 15 days time for payment.
iii) In case the concerned borrowers do not liquidate the liability within the stipulated time limit, but come forward with prayer for further time, in such cases branch incumbents may allow further 30 days time only provided he is satisfied that importer will be in a position to repay the outstanding dues within the extended period under advice to Head Office.
iv) In case the party fails to liquidate their liability within the extended time granted as mentioned in the proceeding paras the goods should be disposed off in public auction.
v) For disposal of the import consignment, a Disposal Committee shall be constituted by Head Office on receipt of a report form Branch incumbent that the consignment need to be disposal off by public auction as per Head Office standing instruction. The Disposal Committee shall be concerned with the Head Office as Chairman, Manager of main Branch and Manager of concerned branch or as decided by the H.O.
vi) A notice for public auction of the goods should be published by the Disposal Committee at least in two National Dailies (one Bengali and English). In all cases of public auction required earnest money shall be 5% to be fixed by Head Office of the quoted amount in the farm of Demand Draft / Payment Order. This condition must invariably be mentioned in the public notice inviting quotations for sale of import consignments. The Disposal Committee should open the tenders and select the highest bidder.
vii) The committee may also reject the highest offer if the price quoted is less than the normal market price and shall immediately call for fresh tenors.
viii) It there be any shortfall after disposal of goods, a case should be filed for the recovery of the short full amount, in the court of law immediately against the importer / guarantor concerned under intimation to Head Office.
ix) The branches shall invariably send monthly LIM statement on the prescribed form duly filled in as usual to Head Office (ID)
LETTER OF TRUST (LTR):
By executing the standard letter of trust (or trust receipt) the customer acknowledges receipt of the documents of title to the goods, as the case may be and agrees to hold them and the relative goods, when delivery thereof is taken by him, in trust as agents for the bank until the goods are sold or used for the express purpose for which they were released to him. The customer also undertakes to keep the transaction separate and assign and deposit with the bank the sale proceeds immediately realization but in any case not later than time period stipulated in the letter. Further, the customer undertakes to keep the goods insured and in the event the goods or may part thereof cannot be used by him for the declared purpose or on demand being made by the bank for the return of the documents / goods, he promised to restore the goods or documents to the bank’s custody. The trust receipt, thus, enables the importer customer to take re-delivery of the documents pledged to the pledge bank.
EXPORT FINANCING: BACK TO BACK L/C. PAYMENT OF IMPORT BILLS:
Export Financing:
Financing of export credits is made in two stages:
Pre-shipment stage.
Post-shipment stage
Packing Credit (Pre-shipment financing)
Packing credit is short-term advance granted by a Bank to an exporter against valid export L/C contract for the purpose of purchase of materials or finished goods or manufacturing, processing, packing, transporting up to ware house/ port of shipment etc, of exportable for export.
Voucher to be passed:
Packing Credit——-Dr.
Exporter’s A/C——–Cr.
Adjustment:
FBP/FDBC—————–A/C
Packing credit————–Cr.
Income A/C interest on PC———-Cr.
Back-To-Back L/C: (Pre-Shipment Financing):
Back-to-back L/C means one credit backs another credit. It is new credit in favor of another beneficiary. Sometimes beneficiary/seller of a credit himself is unable to supply goods specified in the L/C and required to purchase from another supplier by opening second credit.
Besides, the normal formalities and requirements (for L/C opening) the following formalities and documents are also required for opening back-to-back L/C:
1) Master L/C
2) Valid bonded were house license
3) Quota allocation for quota items
4) ERC in addition to IRC
5) Indemnity/undertaking
6) No objection from previous banker (if any)
7) Factory inspection certificate
8) BGMEA Membership
Vouchers and accounting treatments are the same normal L/C opening except margin. In this case, no margin is taken by the bank. After lodgment, maturity date of the import bill is intimated to foreign bank as per L/C terms. The documents are delivered to the order of opener duty indorsed for clearance of goods from custom authority. Goods are cleaned through approved clearing and forwarding agent of the bank.
Voucher To Be Passed:
Banker’s liability for L/C——Dr.
Customer’s liability for L/C—- Cr.
Reversal of contra Lodgment
Customer’s liability on IFBC L/C——Dr
Party’s A/C ———Dr.
Income A/C Bank charges—–Cr. (if any)
Payment Of Import Bills:
Payment of Import bills is at maturity from the relative export proceeds repatriated. The required foreign exchange for payment of import bills is kept in a separate account, out of repatriate proceeds of relative export. Party wise and export L/C- wise funds are kept in FBPAR (foreign Bills Awaiting Remittance) account from export proceeds for payment of bills at maturity.
Others:
Loro Account:
Loro account means “their account with you “. Account maintained by third party is known as Loro Account. This account may be either in foreign currency or home currency.
Nostro Account:
Nostro Account means “Our account with you:. The account that a home bank maintains with a foreign bank is known as Nostro account. For example, Dhaka Bank’s US Dollar account maintained with City Bank NA New York, USA is NOSTRO Account of Dhaka Bank.
Vostro Account:
Vostro Account means “your account with us”. The account maintained by a foreign bank is known as vostro account. We can term nostro account when referred to its account holder (foreign bank) by home bank as vostro account. For example, State Bank of India’s taka account maintained with Dhaka Bank is a vostro account of Dhaka Bank.
EXPORT L/C PROCESS PARTIES DOCUMENTS ACCOUNTING TRETMENT VOUCHERS OF EXPORT L/C:
EXPORT SECTION
Payment for goods exported from Bangladesh should be received through an Authorized Dealer in freely convertible foreign currency or in Bangladesh Taka from a Non-Resident Account.
5.16.1 Parties To Export Transactions:
1) L/C Issuing Bank
2) Importer
3) L/C Advising Bank
4) Exporter
5) Confirming Bank (If any)
6) Negotiating Bank
7) The paying/Reimbursing
5.16.2 Export L/C
Export L/Cs is issued by a foreign bank favoring Bangladeshi exports through our banks having correspondent relationship with them.
5.16.3 Services Provided By Banks Against Export L/C:
A) Advising of export L/C:
The advising bank getting the import L/C sent by the issuing bank located abroad will advise the L/C to the beneficiary without any engagement or responsibly on their part. It will see the following only:
I. Authenticity of L/C (Test agreed in case of Telex L/C and signature verified in case (air mail L/C).
II. Merchandise specified in the L/C is permissible and clauses incorporated in the L/C are not against country’s regulations.
B) Add Confirmation of Export L/C:
Bank may add additional confirmation to export L/C where there is specific instruction from the L/ C issuing bank to do so. Additional confirmation of L/C gives the seller a double assurance of payment. Bank’s requirement of adding confirmation:
I. Issuing Bank should be a reputed bank.
II. Credit line/Arrangement with the L/C issuing bank.
III. L/C clause is to be acceptable to confirming bank
IV. Approval from the competent authority for adding confirmation of export L/C.
V. Confirmation charges are to be recovered as per rules.
C) Negotiating of Export L/C:
Documents/papers to be submitted by exporter to bank for negotiation/collection against export L/C. the exporter submit the documents to bank as per requirement of bank. List of export documents is as follows:
I. Export L/C
II. EXP Form
III. Bill of exchange
IV. Invoice
V. Bill of Lading
VI. Packing List
VII. Certificate of Origin
VIII. Inspection Certificate
IX. Insurance Document
X. Weight List
XI. Any other documents as per L/C
Bank must scrutinize all the documents stipulated in the credit with reasonable care to ascertain whether they confirm with the terms and conditions or not. If the documents are drawn strictly in terms of the credit, the bank may negotiate and pay the value of export bill to the exporter at:
OD buying rate (Sight Draft)
Usance rate (For DA Bill)
Appropriate rate for DP Bill
5.16.4 Accounting Treatment:
After adjustment of pre-shipment credit:
FBP (foreign bill purchased) A/C Dr.
Party’s A/C Cr.
5.16.5 Realization of Export Proceeds:
On receipt of credit of the export bill from the foreign correspondent, banks realize the bill at specified rate and following vouchers are passed.
H/O (ID) ————–Dr.
FBP A/C—————-Cr.
Income A/C on exchange earning ——Cr.
5.16.6 Collection Documents (Voucher):
Export documents not covered by and L/C documents not drawn in terms of the credit are accepted on collection basis with the shipper authority at their documents are forwarded through foreign correspondents to the drawee for payment or acceptance. After realization of the bills on collection, export is paid appropriate rate after adjustment of liabilities on his account (if any)
Voucher to be passed:
Lodgment (Accepted for sending on collection):
FBPL A/C Dr.
FBPC A/C Cr.
Realization: (Reverse Of Contra Voucher)
FDPC A/C Dr.
FBPL A/C Cr.
H/O (ID) A/C Dr.
Party’s A/C Cr.
Income on com/charge Cr.
IMPORT PROCEDURE. IMPORT PROCESS AGAINST LC:
5.17.1 Import section:
Import section of any Bank deals with L/C opening and post import financing i.e. LIM & LTR. Now the procedure from opening L/C to disbursement against L/C is given below.
5.17.2 Application for opening L/C:
At first, an importer will request banker to open L/C along with the following documents.
1. An application
2. Indent or Performa Invoice
3. Import Registration Certificate (IRC)
4. Taxpayer Identification Number (TIN)
5. Insurance cover note with money receipt
6. A bank account.
7. Membership of chamber of commerce
Indent or Performa Invoice:
Indent or Performa invoice is the sale contract between seller and buyer in import-export business. There is slight difference between indent and Performa invoice. The sales contract, which is direct correspondence between importer and exporter, is called Performa invoice. There is no intermediary between them. On the other hand, there may be an agent of exporter in importer’s country. In this regard, if the sale contract is occurred between the agent of exporter and importer then it is called indent.
5.17.3 Delivered forms by banker to Import:
After scrutinizing above-mentioned documents carefully, officer delivers the following forms to be filled up by importer and banker should check:
Whether the goods to be imported is permissible or not.
Whether the goods to be imported is demandable or not.
The forms are:
• Import Merchandized Permit Form (IMP).
• L/C Application Form (L/CAF).
• L/C Authorization Form (L/CAF).
5.17.4 Preparation of L/C by Bankers:
Bank’s officer prepares L/C when above mentioned forms are to be submitted by customer or importer. Before preparing L/C SIBL officer scrutinizes the application in the following manner.
The terms and conditions of the L/C must be complied with UCPDC 500 and Exchange Control & Import Trade Regulation.
Eligibility of the goods to be imported.
The L/C must not be opened in favor of the importer.
Radioactivity report in case of food item.
Survey reports or certificate in case of old machinery is required. Bank of the importer is called ‘L/C Issuing Bank’. Then issuing bank inform it’s corresponding bank, called “Advising Bank’ or ‘Confirming Bank” located in exporter’s country to advice and the credit forward to the exporter and simultaneously officer makes L/C opening vouchers.
Desk Work:
1. One debit voucher to be passed.
2. Corresponding credit voucher to be passed (Margin, commission, postage, stamp, F.F.C. and others).
3. Liability voucher to be passed.
Accounting treatment:
L/C Applicants A/C or Customer’s A/C Dr.
Margin A/C Cr.
Commission A/C Cr.
Postage A/C Cr.
Stamp A/C Cr.
F.FC. (foreign corresponding charge) A/C Cr.
Telex charge A/C Cr.
Other A/C Cr.
Customer’s liability A/C Dr.
Banker’s liability A/C Cr.
5.17.5 Lodgment And Retirement Of Import Bills (Under Cash L/C):
Lodgment Of Import Bill:
The documentary letter of credit (L/C) constitutes of the important methods of financing trade. Because of the phenomenal growth in world trade and commodity wise diversification of trade its importance has significantly increased.
On receipt of the documents from the negotiating Bank, the L/C opening bank will make entry the particulars of the documents into Inward Foreign Bill Register and prepare the voucher by converting the foreign currency into Bangladesh Taka. This stage is known as lodgment of import bills.
The full sets of documents which are submitted by the exporter to his bank as per terms and conditions of the L/C are known as shipping documents.
The L/C opening bank may receive these shipping documents from his foreign correspondent (bank) in two ways.
i) Documents on collections basis.
ii) Negotiated Documents.
i) Documents on collection Basis:-
The shipping documents which are not negotiable by the exporter’s bank due to some discrepancies will be sent to L/C opening bank on collection basis. The collection bank (exporter’s bank) will mention the discrepancies on their forwarding schedule.
On receiving the documents the L/C opening bank will further scrutinize the documents with the L/C and inform the importer regarding discrepancies found in the documents. If these are acceptable to the importer and or permissible with the existing exchange control Regulation, the documents will be lodged and L/C opening bank will send the payment instruction to the collecting bank.
ii) Negotiated Documents
The documents which has already been negotiated i.e. the exporters bank (this bank is known as negotiating bank) has made payment to the exporter against the documents submitted by him may be termed as negotiated documents. Generally these documents are free from discrepancies. Though these documents are supposed to be free from any discrepancy, the L/C opening bank must scrutinize and confirm that there is no discrepancy in the documents.
Incase of documents which has no discrepancy and documents with minor discrepancy (if accepted by the importer) are to be lodged, where the major discrepancy is found, it is the duty of the L/C opening banks to send a cable / Telex to the negotiating bank with instruction to credit the amount to the L/C opening banks A/C which was paid to the exporter, because the documents are not accepted and also to seek instruction regarding disposal of the documents. The particulars of these documents to be entered are separate column or separate Inward Foreign Bill Register under the head Foreign Bill under Reserve.
Procedures of Lodgment:
After securitization, if it is fund in order the officer concerned will brand a rubber stamp “Checked and Found Correct” which will be followed by his initial.
Amount in foreign currency to be converted into Bangladesh Taka with the exchange rate (B.C selling) prevailing on the date of lodgment.
Particulars of documents to be entered in the “Inward Foreign Bills Register”
Preparation of Vouchers: The following vouchers are to be prepared :-
a) Lodgment voucher:
Dr. PAD / Draft amount + Negotiation commission (if any)
Cr. H.O, I.D / (Reimbursing Bank) A/C
B) Liability voucher to be reversed which was originated at the time of opening L/C
Dr. Barker’s liability on L/C (Cash)
Cr. Customers liability on L/C (Cash)
Forwarding Documentary Credit By Advising Or Confirming Bank:
There are usually two banks involved in a documentary credit operation. The issuing bank and the 2nd bank, the advising bank, is usually a bank in the seller’s country. The issuing bank asks another bank to advise or confirm the credit. If the 2nd bank is simply “advice or credit”, it will mention that when it forwards the credit to seller, such a bank is under no commitment or obligation to pay the seller.
If the advising bank is also “confirming the credit”, this mention that the confirming bank, regardless of any other consideration, must pay accept or negotiate without recourse to seller. Then the bank is confirming bank.
FOREIGN REMITTANCE:
Foreign Demand Draft (FDD):
Bank or exchange company issues the Foreign Demand Draft for the charges for TOEFL, SAT, GMAT, registration fee, membership fee and also for the application or processing fee for the student who are interested to study abroad. Bank opens Student Files to issue Foreign Demand Draft following the permission of Bangladesh Bank (central bank). Before issuance of FDD, bank asks the students to fill up the TM Form; which contains the following particulars –
• Name of the student
o Full address of the student
o Amount of FDD in Foreign Currency
o Purpose of Remittance
o Address of the Institution to which the FDD will be favored
o Country receiving payment
o Passport no. of the student with date of issue
o Signature of the student
The TM Form is sent to Central Bank with photocopies of the Passport of the student and the FDD issued.
Commission for issuance of FDD @ Tk.500.
Commission for Cancellation of FDD @ Tk.500.
The foreign bank/exchange company on local bank usually issues foreign Demand Draft. It is an order to pay a certain sum to a certain person or as his instruction, issued by the bank on its overseas branch or on its correspondent bank. The demand draft is handed over to the purchaser who sends it to the beneficiary. The beneficiary obtains payment on presentation to the bank on which the draft is drawn.
Encashment of FDD may take place in two ways-
Purchase
Sending for collection.
Purchase:
The following criteria must be fulfilled:
Firstly, the party applies for a Foreign Bill Purchase (FBP) to limit the facility, which is approved by the Head Office authority for a certain period.
The local banks will entertain valued clients with this facility.
The party will give an undertaking regarding adjustment of FBP liabilities which is offered to him
In case of non-realization of proceeds (FDD).
It is necessary that all relevant charge documents (D.P. Note, Personal Guarantee etc.) be collected from the party.
The following vouchers are passed after it is posted in the FBP register;
Dr. – FBP (at the spot buying rate)
Cr.-Income A/C Commission others
Cr. – Income A/C Postage
The FDD is sent to the American Express Bank, Dhaka for collection along with a R.L. It is drawn on a foreign bank in abroad otherwise it is sent to the respective bank on which the FDD is drawn. After giving endorsement on the backside of the FDD.
After realizing proceed, the following vouchers are passed-
Dr. – MTBL G/A
Cr. – FBP (liability adjusted)
Cr. – Income A/C (Exchange Gain)
Sending for collection:
It is posted in the Foreign Bills for Collection. The following functional activities are undertaken for a FBC:
i. It is posted in the FBC register. FBC No. Is assigned to the FDD.
ii. Then it is sent for collection to the branch of the bank on which it is drawn. If it is drawn on a foreign bank in abroad, it is sent to the AMEX. Dhaka along with a R.L. and liability voucher.
a. Dr- FBR
b. Cr- FBC
Foreign Inward & Outward Remittance:
‘Foreign remittance’ means purchase and sale of freely convertible foreign currencies as admissible under Exchange Control Regulations of the country. Purchase of foreign currencies constitutes inward foreign remittance and sale of foreign currencies constitutes outward foreign remittance.
So we see that there are two types of Foreign Remittance:
Foreign Inward Remittance
Foreign Outward Remittance
The Foreign Remittance department of MTBL Dilkusha Branch is equipped with a number of foreign remittance facilities. Following are the types of foreign remittance facilities offered by MTBL Dilkusha Branch.
INWARD REMITTANCE:
Inward remittance refers to the extent where the Bank makes payment to the client against foreign demand draft. Bank will make payment to the client by verifying the, test number, and signature of the authorized officer.
Two forms as prescribed by Bangladesh Bank are used for purchase of Foreign Currencies such as.
EXP Form: Remittances received against exports of goods from Bangladesh are done by form EXP.
Form C: Inward remittances equivalent to US$2000/- and above are done by
Form” C”. However, declaration in Form C is not required in case of remittances by Bangladesh Nationals working abroad.
Contribution to the Economic Development By Overseas Employment
Overseas employment and workers’ remittances contribute significantly to the economic
development of the country through reduction of unemployment and augmenting foreign exchange reserves and income. A sizeable number of Bangladeshi professionals, skilled, semi-skilled and unskilled labor force are employed in different countries including the Middle East. With a few exceptions, manpower export has been increasing every year. A total of 2.50 lakh Bangladeshis had gone abroad for employment in FY 2004-05, which is 9.75 percent higher than the previous year.
The number stood at 2.91 lakh in FY 2005-06, which is 16.4 percent higher than the previous year. In FY 2006-07, manpower exports reached 5.64 lakh, which is 93.81 percent higher than the previous year. During 1976 to June 2007 manpower having strength of about 48.9 lakh has been exported.
Due to the increase of skilled manpower export and the creation of facilities to send remittances from abroad expatriate worker’s remittances flow has been increasing gradually. It may be noted that in FY 2005-06, the remittances from expatriate Bangladeshi workers stood at US$ 4801.88 million reflecting 24.78 percent rise over the previous year. In FY2006-07, remittances stood at US$ 5978.47 million reflecting 24.50 percent rise over the previous year.
OUTWARD REMITTANCE:
It refers to the extent where by the Bank issues foreign demand draft. The Bank charges TK.300 per Demand Draft.
Two forms are used for Outward remittance: IMP Form: All outward remittance on account of Imports is done by form IMP.
T.M. Form: For all other outward remittances form T.M. is used.
COLLECTION OF FOREIGN CURRENCY INSTRUMENTS:
To collect proceed of Foreign Instrument following procedures to be maintained:
1. Receive instrument with deposit slip.
2. Affix crossing stamp of the Bank.
3. Entry in the register putting IBCA number.
4. Affix endorsement “pay to the order of any Bank or trust company, prior endorsement guaranteed”.
5. Instrument to be sent to adjacent correspondents.
MISCELLANEOUS SERVICES GIVEN BY FOREIGN EXCHANGE DEPARTMENT:
Student
File Students who are desirous to study abroad can open file in the bank. By opening this file, bank assures the remittance of funds in abroad for study.
NRIT
Account ‘Non –resident Investors’ Taka Account is an account by which Non-resident Bangladeshi can deposit foreign currency for investment in security of stock exchanges. For such accountholders, 5% of primary shares are reserved.
F.C.
Account Foreign Currency accounts are opened in the names of Bangladeshi nationals or persons of Bangladeshi origin working or self-employed in abroad and are maintained as long as the account holders’ desire.
NFCD Stands for Non-resident Foreign Currency Deposit Eligible Persons may open such accounts even after their return to Bangladesh, within six months of their arrival.
RFCD
Accounts
Stands for Resident Foreign Currency Accounts Persons ordinarily resident in Bangladesh may maintain foreign currency accounts with foreign exchange brought in at the time of their return to Bangladesh from visit abroad. Balance of such accounts is freely remittable to abroad.
6.1 STRENGTH
Financial Strength: JBL is a finally sound company backed by the enormous resource. As result customers feel comfortable in dealing with the company.
Dynamism: JBL draws its strength from the adaptability and dynamism it possesses. It has quickly adapted to world class standard in terms of banking services. JBL has also adapted state of the art technology to connect with the world for better communication to Integrate facilities.
Good Banker – Customer relationship: The relationship between customer & the banker are very good. Many customers are doing their transaction from the establishment of the bank only for the good relationship.
Company Reputation: The JBL has created a good reputation in the banking industry of the country. And already it has established 41 branches all over the Bangladesh. The popularity of this bank is increase day by day also in the general public area.
Online Banking Services: The JBL already introduced in online banking service. The customer can do their transaction through online.
6.2 WEAKNESSES
Lack of employees in General Banking: General Banking is called the heart of a bank, because it’s directly related with the customer. There are a few employees in general banking.
Lack of more attractive deposit scheme: The JBL bank has no more attractive deposit scheme. Whether the others bank have lots of attractive deposit scheme.
Lack of own ATM service: The JBL Bank is introduced its ATM service. But it’s not popular like others bank (EBL, DBBL etc.)
6.3 OPPORTUNITIES
Launching own ATM card services: The JBL Bank introduce the ATM card service. It’s help to the customer to provide the better service.
Government Support: Government of Bangladesh has rendered its full support to the banking sector for a sound financial status of the country, as it has become one of the vital sources of employment in the country now. Such government concern will facilitate and support the long-term vision of JBL Bank.
6.4 THREATS
Merger and Acquisition: The worldwide trend of merging and acquisition in financial institution is causing concentration. The industry and competitors are increasing in power their respective areas.
Multinational Bank: The Rapid expansion of multinational bank poses a potential threat to new bank. Due to the booming energy sector, more foreign banks are expected to operate in Bangladesh. Moreover, the existing foreign banks such as HSBC, CITI N.A, and Standard Chattered are now pursing an aggressive branch expansion strategy.
Upcoming Banks: The upcoming private local & multinational banks posses a serious threat to the existing banking networks of JBL. It is expected that in the next few years more commercial banks will emerge. If that happens the intensity of competition will rise further and banks will have to develop strategies to compete against and win the battle of banks.
Daily basis interest on deposit: The other new bank (HSBC provided the daily basis interest rate on deposit). Only short term depositor can get this benefit by HSBC.
Different services of FCB’S (Phone Banking/Home Banking/SMS Banking): Now some others third generation commercial banks provide home banking. The customer can get any financial information through phone or SMS. BRAC Bank.
Overall
• There is a central generator. But due to load shading every day it cannot work due to lacking of fuel and mismanagement, while no printer does not work and employee and client seats idle some times.
• Poor cooperative of the officers and the pions
• Insufficient employee.
• They are not using Data Base Networking in IT department. So they have to transfer data form branch to branch and branch to Head Office by using floppy disk and it is not a good system.
• Lack of sufficient financial data / information in their own website to the visitor or customer.
General Banking (GB)
• In general banking they follow the traditional banking system.
• Lack of verity of services is also a drawback of the general banking area of the JBL. The bank provided only some traditional limited services to his clients.
• In Accounts section the main problem is lack of manpower for that reason single employee cannot complete the job on time.
Loans & Advance
• Lack of attractive loan scheme for the customer
• The loans and advances department takes a long time to process a loan because the process of sanctioning loan is done manually.
• Bankers face enormous problem to fill up loan related paper like parties loan application, stock report, Net worth valuation report etc.
• CIB inquiry form does not provide information about new client of the bank.
Foreign Exchange
• Lack of modern IT system to communicate with foreign bank.
• Documentary systems are not moderns so employee wastes their time for looking document.
6.5 Recommendation:
It is a large organization and banking is a complex and comprehensive task. So it is difficult for me, by my little knowledge, to recommend solving the problems. But as an eyewitness of some problems I am just giving some instructions, which may be followed. So for the improvement of the service the following measures may be taken:
Providing more industrial loans:
Much of long-term industrial loans should be provided to accelerate the economy as well as to help the economy to solve unemployment problem.
Providing realistic data against loan:
The customer must have to provide the true and accurate data for getting the loan facilities.
● Real judgment before sanctioning the credit card:
When a credit card is issued for the customer, he should justify by the KYC policy. It is a sanative issue for the credit division. So the relevant officer must take the responsibilities to recover the loan.
● Regular monitoring of the loan / credit:
It should regular monitoring the loan and credit. Without doing so, sometimes it may create problem.
● Proper maintenance of co- letterers:
The co letterers that the party submits against the loan must have to maintenance properly. For avoiding the future problem, all the documents should properly justified.
● Ensure Proper Division of Labor In The Desk:
To ensure proper service proper division should be maintained.
● Ensure Sufficient Manpower:
The number of human resources in import section and in clearing section is really insufficient to give services to huge number of customers. So, number of staff should be increased in those sections.
● Need Personnel having Business Knowledge:
Most of the personnel have no business education. So selection of employee from business school can give proper solution.
● Development of Human Resources:
Human resource is another sector for the branch to be developed urgently. Human resources, in the branch, need to be equipped with adequate banking knowledge. Majority of the human resources must have basic knowledge regarding money, banking, finance and accounting. Without proper knowledge in these subjects, efficiency cannot be optimized. Bank can arrange training program on these subjects.
Ensure Proper Maintenance of Files:
● Jamuna Bank Ltd. gives personalized services. All the officers have to give concentration to the customers, while maintaining the customer files. Every staff should try to reduce these irregularities.
● Ensure Proper Maintenance of Office Premises:
Imaging branch is supposed to be very neat and clean and well decorated. This habit must be changed. Moreover, the sitting arrangement is very insufficient comparing with the number of customers. So this branch of JBL must pay attention to this issue.
● Ensure Proper Communication System and Maintenance of Machineries:
Sometimes Communication System remains out of order and it is also true for the photocopiers. Attention should be given on proper maintenance of phone, computer, fax machine and photocopier.
● Offer Some Loan and Deposit Scheme Exclusively for the National Customers:
All the lending and savings packages offered to the National customers are same as offered to the general customers, excepting the waiver of service charges for National Ones. National Bank Limited should try to introduce more attractive lending and savings scheme to its National customers to create more business for the Bank. The Bank can pay more attention to this segment of customers, as it is the most solvent group from which income can be generated if the package is designed properly.
● More Gifts and Discounts for the National Customers:
National Customer should be offered occasional gifts and discounts, which can make the National Service more attractive and keep consumer delight. The interest rates on several loan and deposit schemes should be differentiated for the National customers.
● Fast online service:
Online service should be dynamic and modernized. Sometimes services are being delayed. For this reasons, customers are to wait for long time, which is a threat for loosing customer.
CONCLUSION:
The Jamuna Bank Limited is a very recent bank in the banking business area. It was incorporated on March23, 19 from 3rd June 2001 in Bangladesh as a Public limited Company under company Act, 1994. So within this short time the bank already get the popularity in the people.
The bank is spreading its operation through all over the Bangladesh. Recently this bank has almost 41 branches in all over the Bangladesh. So very recent it will increase their branches to meet up the people demand.
In its lending operations, the Bank has learnt a lot from its past experiences. Hopefully the JBL is able to improve in all its areas especially in the lending operations. In the comparison with the other commercial banks, we see that the JBL is badly away from other bank. But in some cases the JBL performs the best with the comparison to the other banks. It happened only for the cause of lacking in experiences. With the passes of time the JBL will be able to maintain same success in all its credit areas like other bank. We hope that this bank will compete with the first class bank of Bangladesh very soon.
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