Internship Report on Marketing Strategy of Southeast Bank Limited

INTRODUCTION

Generally by the word “Bank” we can easily understand that the financial institution deals with money. But there are different types of bank like; Central Banks, Commercial Banks, Savings Banks, Investment Banks, Industrial Banks, Co-operative Banks, etc. But when use the name term “Bank” without any prefix, or qualification it refers to the Commercial banks. Commercial Banks are the primary contributor to the economy of a country. So we can say Commercial Banks are a profit making institution that holds the deposit of the individuals & business in checking & saving account and than uses these funds to make loans. For these, people and government are very much dependent on these banks as the financial intermediary. As banks are profit earning concern; they collect deposit at the lowest possible cost and provide loans and advanced a higher cost. The differences between two are the profit for the bank.
Banking sector is expanding its hand in different events every day. At the same time the banking process is becoming faster, easier, and the banking area 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 opportunity 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.
Southeast Bank Limited is a scheduled commercial bank in the private sector established under the ambit of Bank Company Act, 1991 and incorporated as a Public Limited Company under Companies Act, 1994 on March 12, 1995. The Bank started commercial banking operations on May 25, 1995. During this short span of time the Bank is successful in positioning itself as a progressive and dynamic financial institution in the country. The bank had been widely acclaimed by the business community, from small entrepreneurs to large traders and industrial conglomerates, including the top-rated corporate borrowers for its forward – looking business outlook and innovative financial solutions. Thus within this very short period of time it has been able to create animage and earn significant reputation in the country’s banking sector as a Bank with Vision. Presently, it has 43 branches.

Southeast Bank Limited has been licensed by the Government of Bangladesh as a Scheduled commercial bank in the private sector in pursuance of the policy of liberalisation of banking and financial services and facilities in Bangladesh. In view of the above, the Bank within a period of 10 years of its operation achieved a remarkable success and met up capital adequacy requirement of Bangladesh Bank.

It has been growing fast as one of the leaders of the new generation banks in the private sector in respect of business and profitability as it is evident from the financial statements for the last 10 years.
These transactions are held through the maintenance of ‘Nostro Account’ with group banks and other foreign banks. These transactions are usually processed through the issuance of TT (Telegraphic Transfer), DD (Demand Draft), and CO (Cashier’s Order). SBL Bangladesh is making significant remittance business with inward remittance service. In the recent financial year 2004-05, remittance collected by SBL was worth of US Dollars 96,930,340.02, which was about 2.51% of the total remittance inflow in Bangladesh.

1.2 Background of the Study
The internship program which is necessary to complete the BBA program exercise a significant importance as it enables a student to familiar with the practical business activities. The student work closing with the people of an organization and learn about the function of that organization. This program enables a student to develop his analytical skills and scholastics attitude.

1.3 Sources of Data Collection

The Primary sources are as follows:

Face-to-face conversation with the respective offices and stuffs of the branch and head office.
Face-to-face conversation with clients visited the branch.
Practical with experience in the different desk of the department of the branch covered.
Relevant field study as provided by the officer concern.

The “secondary Sources” of data and the information are:

Annual Report of Southeast Bank Ltd (2008).
Website of the Southeast Bank Ltd (www.sebankbd.com).
Various book articles regarding general banking functions, Foreign exchange operations and credit policies.
Different procedure manual published by Southeast Bank Ltd
Different circular sent by head office of Southeast Bank Ltd. and Bangladesh Bank.

1.4 Rationale of the Study
With the growing competition among nationalized, foreign and private commercial banks as to how the banks operates it banking operation and how customer service can be made attractive. Commercial or private banks are trying to evaluate their traditional banking service to a better standard, to meet the challenging needs. So they pay attention on better performance and existence. Under the above circumstances, it has become necessary for Southeast Bank Limited, one of the private commercial banks, to focus its attention towards the improvement, who are actually executing the policies undertaken by the top management will have a chance to communicate their feelings and will have the feedback about their dealings from the customer.

1.5 Objective of the Report

1.5.1 The primary objective:
The primary objective of preparing this report is to represent the Southeast Bank Limited and to have a clear conception about all of the essential parts of the internship program.
1.5.2 Secondary objective:
To evaluate the customer service of the Southeast Bank Limited
Identify the statistical performance of Southeast Bank Ltd.
Discussion on function and operation of each level of the organization of the Southeast Bank Ltd.
Overview of the Southeast Bank Ltd.
To identify the problem facing by the Southeast Bank Ltd.
To relate theoretical knowledge with practical experience in several functions of the Southeast Bank Ltd.
The present study will help SBL to better understand their level of performance in generating inflow of remittances.
This proposed study will also help SBL to compare their current remittance status with the aggregate remittance inflow in Bangladesh. Comparing with the proportion the bank can take necessary actions to perform the remittance business more efficiently and effectively.
From the perspective point of view, the importance and role of remittances as a major proportion of GDP, export, import and utilization of remittances as savings, investment and consumption can be better understood from this proposed study.
This study will encourage further study in the area of identifying effect of foreign remittance inflow on Bangladesh economy and will provide useful guidelines for similar types of researches.

1.6 Scope of the Study/Report

As I was sent to the Southeast Bank, Motijheel Branch, the scope of the study is only limited to this Branch. The report covers the topic on “Effect of Foreign Remittance Inflow severed by Southeast Bank Ltd on Bangladesh Economy”.
To conduct a study on what is Banking concept I have gathered valuable information from AUB library & Southeast Bank Limited. I have also got some information from web site.

1.7 Origin of the Report

To complete a BBA degree it is necessary to perform an internship program under any reputed organization. This program actually makes a relationship between theoretical and practical knowledge. As a part of the requirement of the BBA Program of the Faculty of Business Administration of Asian University of Bangladesh (AUB) the project was assigned on May 01, 2009. The topic is on “Inward foreign Remittence Management Stady Southeast Bank Limited”.

1.8 Limitations

I had to face different problems while preparing this internship report. At the same time I tried to make an adjustment with those problems.
Those problems are as follows;
It was very difficult to collect the information from various personnel for the job constrain.
Bank policy was not disclosing some data and information for various reasons.
The department people always remain busy due to lack of supporting employees so they could not dedicate their full efforts
Because of the limitation of information some assumption was made. So there may be some personal mistake in this report.
The time 3 months are not sufficient to know all activities of the branch to prepare the report.
I had no opportunity to verify the satisfaction level of clients and receive their suggestions in banking activities.
Unavailability of statistical data on inward and outward remittance through informal channels can be considered as a major limitation.
The study has drawn from the perspective of Bangladesh. The global issues are not considered in this study.
Comparatively few researches have been conducted in Bangladesh in the field of foreign remittance. Therefore, some previous studies that were carried out in a different environment are reviewed in the study. As a result, the findings from those studies may not fit all the time with Bangladesh scenario.
Remittance is associated with other international, political, foreign policy and other related factors which are not considered because of the simplicity of the proposed study.

1.9 Methodology

This report has been prepared on the basis of experience gathered during the period of internship. For preparing this report, I have also get information from annual report and website of the Southeast Bank Ltd. I have presented my experience and finding by using different charts and tables, which are presented in the analysis part.
The details of the work plan are furnished below:
Data collection method
Relevant data for this report has been collected primarily by direct investigation of different records, papers, Documents, operational process and different personnel. . No structured questionnaire has been used. Information regarding office activities of the bank has been collected through consulting and discussion with bank personnel.
Data sources
Both primary and secondary source of data are used to complete this study. These two sources are explained below:
Primary sources:
Face to face conversation with the bank officers and staffs
Conversation with the clients
Different manuals of Southeast Bank Ltd.
Different circulars of Southeast Bank Ltd.
Secondary sources:
Producer manual published by the Southeast Bank Ltd.
Files and documents of the Branch.
Annual report of Southeast Bank Ltd 2008.
Different paper of Southeast Bank Ltd.
Unpublished data.
Different text books.

CHAPTER TWO: OVERVIEW OF BANKING SYSTEM
AT A GLANCE OF SEBL

2.1 AT A GLANCE OF SBL AS ON 30TH JUNE, 1999

Business Reporter

Southeast Bank Limited performed well in the first half despite the difficult economic environment with an increase in operating Profit by 102% to Tk. 138.78 Million compared to the same period last year. The Bank also made its mark in efficiently managing its loan portfolio by keeping the Classified Loans and Advances at 1.98% being one of the lowest in the Banking Sector of the country, says a press release The Board of Southeast Bank Limited (SEBL) takes the privilege to welcome you all to the Fifth Annual General Meeting and has the pleasure to present the Fifth Annual Report of the Bank along with the Annual Account and Auditors Report for the year 1999.

i) Bangladesh Economy-an Overview

Bangladesh is pursuing a prudent monetary and fiscal policy in order to achieve higher economic growth as well as maintaining macro-economic stability. The country has been largely successful in implementing the rehabilitation programs to make up the colossal damage caused by the devastating flood of 1998 and achieved 5.2 percent GDP growth in FY 1999 as against 5.7 percent in the previous year. The inflation rate has come down significantly to 7.2% at the end of November 1999 mainly due to bumper crop production. The monetary and credit policy for FY 2000 has been formulated with the objective of keeping foreign exchange reserves at a satisfactory level and rate of inflation at a tolerable limit. Adoption of measures like massive agricultural credit disbursement and increased input supply have contributed a lot to bumper crop production in FY 1999. Similar measures have also been undertaken to maintain higher growth in agriculture in current FY 2000.

Performance of the Industrial Sector, however, was not satisfactory during the year. After growing by 9.5% in 1997-98, industrial production fell to 2.5% in 1998-99. The total value of GDP, however, increased to US$ 36503 million compared to US$ 34059 million in the previous year increasing per Capita GDP to US$ 282 compared to US$ 268 in last year.

ii) Money and Banking

Monetary and credit policies in Bangladesh were pursued with a view to accelerate the pace of economic activities during FY 1999. Total domestic Credit during the year rose by 13.1% compared to 12.6% in 1998-99, net credit to private sector increased by 13.8% compared to 13% increase in 1997-98. Money supply growth was 8.6% in 1998-99 compared to 4.8% in 1997-98. During the year, Bank deposits increased by 14.2% to Tk. 592340 million which was 11.3% in the preceding year.

Total export earnings during the year 1998-99 was US$ 5324 million compared to US$ 5172 million in 1997-98 showing a growth of 2.9% Total import payment for 1998-99 was US$ 8018 million which was 6.6% higher than that of the previous year. The current account deficit increased to US$ 394 million from US$ 253 million in the preceding year due to increase in import payment during the year.

Bangladesh Bank reduced Bank Rate (the rate at which it lends to Commercial Banks) to 7% from 8% with effect from August 29, 1999. The minimum Cash Reserve Requirement (CRR) of the scheduled banks to be maintained with Bangladesh Bank has been reduced from 5% to 4% However, Statutory Liquidity Requirement (SLR) remained unchanged at 20%.

Bangladesh Bank also placed severe restriction with regard to credit allocation to the Directors of Private Banks (Incidentally since inception, the Directors of Prime Bank do not borrow from their own Bank as a policy decision decision of the Board).

iii) Southeast Bank Limited

Southeast Bank Limited (SEBL) witnessed a considerable improvement in its overall business performance during the year 1999. The Bank achieved satisfactory progress in all areas of its operation and earned an operating Profit of Tk. 360.51 million showing a growth of 63% over the previous year. The Bank, as a prudent measure, marked down the value of investment in shares and securities to market price as on 31-12-99 by complying with International Accounting Standard (IAS-30)

After making full provision, the net pre tax-Profit of the Bank for the year stood at Tk. 316.77 million compared to Tk. 17.39 million in 1998. The return on Assets (ROA) was 5.30% well above the industry average.

iv) Capital Funds

The Authorized and Paid up Capital of the Bank are Tk. 1000.00 million and Tk. 400.00 million respectively. The Bank raised its paid up capital from Tk. 200.00 million to Tk. 400.00 million during the year through Public Issue of 2,000,000 ordinary shares at par value of Tk. 100.00. With the increase of Paid-up Capital to Tk. 400.00 million, the capital base of Southeast Bank Limited (SEBL) has become one of the strongest. The total Capital Funds of the Bank at the year end stood at Tk. 719.23 million against Tk. 293.70 million in the previous year. The Capital Adequacy Ratio is 15.14% as on 31-12-99, which is well above the stipulated 8% required for Banks in Bangladesh. The ratio of Tierl capital is 14.06%.

v) Deposits

Deposits of the Bank grew by 44% to Tk. 7660.02 million as at 31st December 1999 as against national average of 14.20%. The Bank introduced several deposit schemes to encourage and mobilize savings. Major savings schemes include the following :-
• Contributory Savings Scheme
• Monthly Benefit Deposit Scheme
• Special Deposit Scheme
• Education Savings Scheme
• 30 Day’s Term FDR

Our various purpose-oriented deposit schemes have been appreciated by the Public and have gained good popularity. As on 31-12-99, deposits under above schemes stood at Tk. 1005.57 million as against Tk. 812.37 million in the last year showing an increase of 24% over the preceding year.

vi) Loans and Advances

Loans and Advances of the Bank stood at Tk. 5027.37 million as on 31-12-99 against Tk. 3127.77 million last year. During the year under review, the Bank extended loans and advances of Tk. 1899.60 million to the private sector for domestic and international trade as well as for project finance and working capital. Due to liberal Credit to Export Sector, the Bank was able to handle larger volume of Foreign Exchange Business. The Bank also extended a number of project finance and industrial loans in syndication with other Banks.

vii) Leading in Consumer Banking

Southeast Bank Limited(SEBL) is a leading Bank for consumers and small business with a commanding presence in Consumer Credit, Hire Purchase and Lease Finance. The Consumer Credit Scheme of the Bank, which aims to help the fixed income group in raising standard of living, has been widely appreciated. Total 10618 customers have enjoyed Credit facility to the extent of Tk. 480.41 million under the Scheme. The rate of recovery of loan under the scheme is 96%. The Bank also recently introduced Credit Card both domestic and international as principal member of Master Card International.

viii) Quality of Risk Assets

In order to maintain high quality of risk assets, utmost efforts are made by the Board of Directors and by the Management on an ongoing basis. A Credit Committee at Bank’s Head Office sits every day to monitor the quality of loans. As on 31-12-99, the Bank’s ratio of classified loans to total loans is only 1.63% as against 1.77% in the last year which is one of the lowest in Bangladesh. The Bank has made full provision against classified loans in addition to making provision of 1% against unclassified loans.

Southeast Bank Limited(SEBL) follows International Accounting Standard (IAS-30) in assessing the value of its investment in shares at the year end.

3.0 CHAPTER THREE
BACKGROUND

3.1 Overview of Company Background

Southeast Bank Limited is a scheduled commercial bank in the private sector established under the ambit of Bank Company Act, 1991 and incorporated as a Public Limited Company under Companies Act, 1994 on March 12, 1995. The Bank started commercial banking operations on May 25, 1995. During this short span of time the Bank is successful in positioning itself as a progressive and dynamic financial institution in the country. The bank had been widely acclaimed by the business community, from small entrepreneurs to large traders and industrial conglomerates, including the top-rated corporate borrowers for its forward – looking business outlook and innovative financial solutions. Thus within this very short period of time it has been able to create animage and earn significant reputation in the country’s banking sector as a Bank with Vision. Presently, it has 41 branches. .
Southeast Bank Limited has been licensed by the Government of Bangladesh as a Scheduled commercial bank in the private sector in pursuance of the policy of liberalisation of banking and financial services and facilities in Bangladesh. In view of the above, the Bank within a period of 10 years of its operation achieved a remarkable success and met up capital adequacy requirement of Bangladesh Bank.

It has been growing fast as one of the leaders of the new generation banks in the private sector in respect of business and profitability as it is evident from the financial statements for the last 10 years.
Southeast Bank Limited emerged as a new commercial bank to provide efficient banking services and to contribute socio-economic development of the country. . Southeast Bank Limited(SEBL) was established on 17th April, 1995 with an Authorized Capital of Tk. 1000 Million and Paid up Capital of Tk. 100 Million (raised to Tk. 200 Million in 1997) by a group of highly successful entrepreneurs from various fields of economic activities such as shipping, oil, finance, garments, textiles and insurance etc. It is a full licensed scheduled Commercial Bank set up in the private sector in pursuance of the policy of the Government to liberalize Banking & Financial services.
The Chairman of the Bank, Mr. Md. Nader Khan is a renowned business elite of Chittagong. He is also the Chairman of Drum Kulshi Girls High School, Fatikchari, Chittagong and Vice-President of the Governing Body of CIDER International School and also a member of the CIDER Trust. He has also been elected as Vice-District Governor of Lion District 315 B4 for the year 1999-2000.
The former Government of the Bangladesh Bank Mr. Lutfar Rahman Sarkar was the first Managing Director of the Bank. The Bank is being managed by highly professional people having wide experience in domestic and international Banking.
The present Managing Director Mr. Kazi Abdul Mazid has long experience in domestic and international Banking. The Bank has made significant process within a very short time due to its very competent Board of Directors, dynamic management and introduction of various customer friendly deposit and loan products.

The Authorized Capital of the Bank is Tk. 3000 million and the Paid -up Capital is Tk. 1199.12 million.

The Bank provides a broad range of financial services to its customers and corporate clients. The Board of Directors consists of eminent personalities from the realm of commerce and industries of the country.

The Bank is manned and managed by qualified and efficient professionals. The name of the honorable chairman is Md. Abdul jalil, Mr. Shah Md. Nurul Alam is the Managing Director and CEO of the bank. He brings with him a wealth of experience of managing private sector banks in the country.

The Bank is not depending only on interest earnings; rather it strives hard to go for fee-based income from non fund activities of the bank. This type of business include capital market operations like underwriting, portfolio management, mutual fund management, investors’ account as well as commission based business like Letter Of Guarantee, Inland remittance, Foreign remittance etc. These businesses usually do not involve Bank’s fund, but on the contrary, offer immense opportunity and scope to expand bank services to the members of public at large. The head office of the Bank is situated at 61, Dilkusha Commercial Area, Dhaka 1000.

Board of Directors:

Name Designation
Mr. Alamgir Kabir (FCA)
Chairman
Abdul Hye, Representing Tillaghar Holdings Limired
Vice Chairman
Sultana Kashem,MK Holdings Limited represented
Director
Farzana Azim,AD Holdings Limited represented
Director
Tanveer Harun,Bangla Capital Limited represented
Director
Rehena Rahman
Director
Mrs. Sirat Monira
Director
Dewan Musraq Majid Karnafuli Tea Co. Ltd, represented
Director

Managing Director:

Name Designation
Mr. Neaz Ahmed
Managing Director.

Company Secretary:

Name Designation
Muhammad Shahjahan
Company Secretary

Executive Committee:

Name Designation
Mr. Alamgir Kabir (FCA)
Chairman
Abdul Hye
Member
Sultana Kashem
Member
Farzana Azim
Member
Tanveer Harun
Member
Neaz Ahmed Member
Audit Committee:

Name Designation
Abdul Hye
Chairman
Sultana Kashem
Member
Farzana Azim
Member

Shariah Council:

Name Designation
Moulana MD. Aminul Islam
Chairman
Professor Moulana Mohammad Salah- Uddin Vice Chairman
A.S.M. Fakhrul Ahsan Member
Alamgir Kabir, FCA Member
M.A.Kashem Member
Ragib Ali Member
Azim Uddin Ahmed
Member
Neaz Ahmed Member
3.2 Head Office and Branch Network:
Head Office

Address : 52-53, Dilkusha C/A (Level – 2,3 & 16), Dhaka – 1000, Bangladesh.

Telephone : (88-02)9571115, 7160866, 9555466, 7173793

Telex : 632425 SBANK BJ

Fax : 88-02-9550093

E-Mail : info@sebankbd.com

Web site : www.sebankbd.com
SWIFT : SEBD BD DH

Branch Name

Name Address
01. Main Branch Dhaka
02. Principal branch Dhaka
03. Khatunganj Branch Chittagong
04. Agrabad Branch Chittagong
05. Laldighipaar Branch Sylhet
06. Imamganj Branch Dhaka
07. Jubilee Road Branch Chittagong
08. Bangshal Branch Dhaka
09. Sylhet Branch Sylhet
10. Moulvibazar Branch Chittagong
11. Gulshan Branch Dhaka
12. Khulna Branch Khulna
13. Dhanmondi Branch Dhaka
14. Uttara Branch Dhaka
15. Chouhatta Branch Sylhet
16. Kawran Bazar Branch Dhaka
17. Halishahar Branch Chittagong
18. Shahjalal Uposhahar Branch Sylhet
19. New Eskaton Branch Dhaka

20. New Elephant Road Branch Dhaka
21. Agargaon Branch Mohammadpur
22. Chhagainaiya Branch (Islamic Banking) Chhagainaiya
23. Cox’s Bazar Branch (Islamic Banking) Cox’s Bazar
24. Bandar Bazar Branch (Islamic Banking) Bandar Bazar
25. Banani Branch Dhaka
26. Khulna Branch Khulna
27. Feni Branch Feni
28. Motijheel Branch (Islamic Banking) Motijheel
29. CDA Avenue Branch (Islamic Banking) Chittagong
30. Hetimgonj Branch Sylhet
31. Aganagar Bazar Dhaka
32. Corporate Branch Dhaka
33. Pathantula Branch Sylhet
34. Shymoli Branch Mohammadpur

3.4 Southeast Bank Limited

Vision:
Would make finest corporate citizen.

Mission:
Will become most caring, focused for equitable growth based on diversified development of resources, and nevertheless would remain healthy and gainfully profitable Bank.

Objectives:
Strategic objectives
To achieve positive Economic Value Added (EVA) each year.
To be market leader in product innovation.
To be one of the top three Financial Institutions in Bangladesh in terms of cost efficiency.
To be one of the top five Financial Institutions in Bangladesh in terms of market share in all significant market segments we serve.
Financial objectives
To achieve a return on shareholders’ equity of 20% or more, on average.
Core values:
For the customers: Providing with caring services by being innovative in the development of new banking products and services.
For the shareholders: Maximizing wealth of the Bank.
For the employees: Respecting worth and dignity of individual employees devoting their energies for the progress of the Bank.
For the community: Strengthening the corporate values and taking environment and social risks and reward into account.
New technology: Adopting the state-of-art technology in banking operations.

3.5 Corporate Information (Southeast Bank limited) At a Glance
(Information as per last Annual Report 2008)
Name of the bank : Southeast Bank Limited
Status : Private Limited Company
Date of Incorporation : 2nd June, 1999
Head Office : 61, Dilkusha Commercial Area Dhaka-1000
Chairman : Md. Abdul Jalil
Managing Director : Mr. Shah Md. Nurul Alam
Authorized Capital : Tk. 3000 million
Paid up Capital : Tk. 1199.12 million.
Director : 18
Number of Branches : 34
Proposed Branches (2006) : 3
Deposits : 28319.21
Investment : 26046.34
Number of Employees : 1204 (Approx)

3.6 Different Wings of Southeast Bank Limited

Head Office
Chairman’s Secretariat
Managing Director’s Secretariat
Board Department
Share Department
MIS & Computer Department
Human Resources Division
Personnel Department
Training Institute
Establishment Department
Stationary & Records Department
Transport Department
Test Key Department
Disciplinary Department
Marketing Division
Business Development Department
Branches Department
Engineering Department
Public Relations Department
Credit Division
Credit Operation Department
Recovery Department
Lease Financing Unit
Consumer Investigation Bureau ( C I B Unit)
Central Accounts Division
Accounts Department
Statistics Department
Reconciliation Department
Expenditure Control Department
Audit and Inspection Division
Internal Audit Department
External Audit Department
International Division
Treasury Department
Dealing Room

3.7 Hierarchy of Position Structure of Southeast Bank Ltd.

Managing Director

Additional Managing Director

Deputy Managing Director

Senior Executive Vice President

Executive Vice President

Senior Vice President

Vice President

Senior Assistant Vice President

Assistant Vice President

Senior Principal Officer

Principal Officer

Executive Officer

Junior Officer

Assistant Officer

4.0 CHAPTER FOUR

TOPIC ANALYSIS

4.1 A Brief Profile of Southeast Bank Ltd, Motijheel Branch:
I am doing my Internship in Motijheel Branch. The branch is located at Eunoos Trade Center 52 – 53, Dilkusha C/A, Dhaka – 1000, Bangladesh. The office floor is nicely specious that can accommodate good number of customer comfortably.

The branch has efficient human resources that can meet up customer’s needs. Otherwise workload is distributed properly. Besides this interpersonal relationship is remarkable. Most noted strength is customer service. Prompt, cordial & enthusiastic service satisfies most of the customers. Flexible banking service attracts more clients doing banking transactions with the branch. In some cases, customers coming outside the banking hour can honor the cheque & others without delay. Everybody performs his works very well. Under all of their efficient handling, the branch has already been able to introduce itself as one of the best performers among all other branches of Southeast Bank Limited. Southeast Bank Ltd gives interns a good value. They assign some specific jobs that are to be done which a fixed period of time. With the initiation of good job in Southeast Bank Limited of Motijheel branch, they reposed confidence on me and therefore assigned foreign exchange. In fact overall banking practices were entrusted to me within this short period of three months.
The good part of working in Southeast Bank Limited is that, it takes very little time for a new person to get himself familiar with the condition because of the environment of the bank. The environment is very friendly. The staffs are very cooperative which enables a newcomer to feel comfortable and be free very quickly.

Manager
Manager (Operation)
Credit in Charge
Foreign Exchange in Charge
General Banking in Charge

Total Number of Employees: 60 (Sixty)
Department of Mitijheel Branch
General Banking Division
Credit Division
Foreign Exchange Division

4.3 GENERAL BANKING

4.3.1 THE BANKER-CUSTOMER RELATIONSHIP

The Banker-Customer relationship is essentially a debtor-creditor contractual relationship. This relationship may be divided into two categories

Legal relationship

Behavioral relationship
After the contractual relationship is established between the banker and customer, they have to avoid by some implied conditions of the contract as well as practices of the bank.

Some of the conditions and practices are as follows:
Customer is to use cheque books while demanding payment from his account.
Customer should keep cheque books in his safe custody.
Customer must inform the bank on time for any loss of cheque leaf or cheque books.
Customer while depositing money or presenting cheque, they must do that during business hour of the bank.
Banker also should give necessary banking advice and help the customer in various banking activities.

4.3.2 Rights of the Customer and Bank
Rights of a customer Duties & obligations of a bank

Right to deposit money in his A/C on time Must credit the deposited amount to the customer’s A/C
Right to demand repayment by issuing cheque or written order properly in proper time and place Must honor cheque if otherwise in order
Right to get pass book/statement of A/C Must supply pass book/statement of A/C as demanded
Right to stop payment on his cheque Must abide by the stop payment order
Right to give standing instructions Must abide by the instructions
Right to claim interest of his deposit balance in the interest bearing account Must pay/credit interest as per rule
Right to have secrecy of his account Must maintain secrecy of customer’s A/C if the banker’s not bound to disclose it under certain conditions
Right to claim damages of any loss and for defamation due to wrongful/willful dishonor of cheque by the bank Must compensate the loss
Right to demand the proceeds of the instrument deposited for collection and collected accordingly Must collect the proceeds of the instrument in customer’s A/C and honor the cheque drown against the amount
Right to claim money paid by bank from his A/C wrongly or payment is not made in due courses. Payment should be made in due courses in good faith and without negligence
Right to return deposit if not in proper manner and time Must deposit the amount properly and in time
Right to return the cheque if not drown properly or in time or for some other reason Must demand payment by issuing cheque or written order properly

4.3.3 Termination of Banker-Customer Relationship
The legal relation between banker and customer may be terminated with a notice given by both of them with a view to close the account. Beside, there are some reasons for termination of legal relationship. Some of these are stated below:
After the death of customer
When a customer declared insolvent by the court
When a customer become lunatic etc.

4.3.4 Forms of Deposit, Opening and Operation of Deposit Accounts and their legal Aspects

The relationship between the banker and the customer begins with the opening of an account by the customer. Initially all the accounts are opened with a deposit money by the customer and hence these accounts are called deposit account. Actually in our country the bank deposits take three different forms:
Current or Demand Deposit
Savings Deposit
Fixed or Time Deposit

4.3.5 Current or Demand Deposit

Current account is purely a demand deposit account. It is a running and active account, which may be operated upon any number and the amount of withdrawal from a current account. It is noted that the bank does not provide any interest on current account. The special characteristic of a current account are as follows:

The primary objective of current account is to save big customers as big businessman, joint stock companies, private limited companies, public limited companies etc from the risk of handling cash themselves.
The cost of providing current account facilities is considerable to the bank since they undertake to make payments and collects the bills, drafts, cheques for any number of times daily. The bank therefore does not pay interest on current deposit while on the other hand some banks charge for incidental charges on such account.
For opening of a current account minimum deposit of Taka 1000/= is required. Introductory reference is also required for opening of such account.

4.3.6 DOCUMENTATION

PROPRIETORSHIP;
Trade License
Photograph

PARTNERRSHIP;
Trade License
Photograph
Partnership Deed

PRIVATE LIMITED;
Trade License
Photograph of Directors
Certified copy of Memorandum and Articles of Association
Certificate of incorporation
List of Directors as per return of joint stock company with signature
Resolution for opening account with the bank

PUBLIC LIMITED;
Trade License
Photograph of Directors
Certified copy of Memorandum and Articles of Association
Certificate of incorporation
Certificate of commencement of business
List of Directors as per return of joint stock company with signature
Resolution for opening account with the bank.

4.3.7 FORMALITIES

4.3.7.1 Application on the prescribed form
The person desiring to open a current account with the bank has to make application in the prescribed form. This form must be properly filled up and signed by the applicants.

Introduction of the application
The applicant also required to furnish in the application form the names of the referees from whom the banker may make inquires regarding the character, integrity and respectability of the applicants. In most cases the introduction is done by the customer of the bank of some other person known to the bank by signing on the application form with his/her account number (if any).

Specimen Signature
Every customer is required to supply to the bank with one or more specimens of his/her signature. These signatures are taken on cards, which are preserved by the bank, and the signature of the account holder on the cheques is compared with the specimen signature.

Mandate for operation of the account by an agent
In case a customer desires to get his/her account operated upon by another person then the bank will obtain a mandate in writing to that effects as well as the specimen signature of the person in whose favor the mandate is given.

Opening and operating the account
After the above formalities are over, the banker opens an account in the name of applicant. Generally the minimum amount to be deposited initially is Taka 1000.00 for opening a current account. Then the bank provides the customer with:
A Pay-in-Slip/Deposit Book:
With a view to facilitate the receipt of credit items paid in by a customer, the bank will provide him/her pay-in-slip either loose or in a book forms. The customer has to fill up the pay-in-slip at the time of depositing the money to the bank. The cashier with his/her initials and stamps will return the counterfoil to the customer on the receipt of the money.
Chequebook:
To facilitate withdrawals and payment to third parties by the customer, the bank will also provide a Chequebook to the customer. But it is noted that to get a Chequebook, the customer has to dully fill up the cheque requisition slip to the banker.

4.3.8 SAVINGS ACCOUNT (SB)
A savings bank is meant for the people of the lower and middle classes who have to save a part of their incomes to meet their future need and intend to earn an income from their savings. It aims at encouraging savings of non-trading person(s), institution(s), society, clubs etc by depositing small amount of money in the bank. Both the elements of time and demand deposit are present in this account.

RESTRICTION ON WITHDRAWALS AND DEPOSIT
Frequent withdrawal is not encouraged
Minimum amount of Tk. 1000.00 is required as initial deposit
Normally withdrawal not allowed more than 1/4th of the balance
The rate of interest is 8.5% against S.B. Account.

PAYMENT OF INTEREST

The rate of interest payable by the Bank’s on deposit mention in the savings account will determine by the respective Bank. Interest is now calculated in the minimum balance to the credit of the account during the period from 1st to the last day of each calendar month on every half year at the end of JUNE and DECEMBER. In this regard Southeast Bank Ltd. is providing 8.5% interest on savings account.
Opening a Savings Account
For opening a savings account these documents are required:
Documents:
Two copies of passport size photographs
Introductory reference
Account opening and closing formalities of Savings Account
Formalities for savings account opening and closing are same as current account.

4.3.9 FIXED DEPOSIT ACCOUNT (FDR)

These are the deposit, which are made with the bank a fixed period specified in advance. It is purely a time deposit account. The bank does not maintain cash reserves against these deposits and therefore the bank offers higher rates of interest on such deposits. Interest is paid at rate determined by the length of the period of deposit; the higher is the rate of interest. Loan is sanctioned against FDR.

OPENING AND OPERATION OF FIXED DEPOSIT ACCOUNT

The depositor has to fill in an application from wherein he/she mentions the amount of deposit, the period for which deposit is to be made the name(s) in which the fixed deposit receipt is to be issued. In case of deposit in joint names, the banker also takes the instructions regarding payment of money on maturity of deposit i.e. whether payable jointly or payable to either or survivor etc. the banker also takes the specimen signature of the depositor(s). A Fixed deposit Receipt is then issued to the depositor acknowledging receipt of the sum of money mentioned therein. It also contains the rate of interest and the date on which the deposit will fall due for payment. In this account no transaction is allowed and no cheque book is issued. Customers are given Fixed Deposit Receipt only.

4.3.10 OTHER TYPES OF DEPOSIT ACCOUNTS
There are some other types of deposit account maintained by the bank as well as Southeast Bank Limited. Such as:
Short Term Deposit (STD)
It is also a time deposit account. The formalities for opening of this account are similar to those required for current account. The only difference is that 7 (seven) days notice is required for withdrawal of any sum and interest is paid. If the withdrawal on demand is desired, it may be paid to the for-feature of interest for the period of notice or the expired period of notice.

Call Deposit Account (CDA)
Mainly open by organization calling tender in which (the supplier, contractors etc) deposit requisite amount of earnest money favoring the organization calling tenders. It is termed as Call Deposit since organization which opens this account may call withdrawal of the deposited account any time after expiry of the tender period. No interest is allowed here.

4.3.11 CROSSING
Crossing of cheques, which is now universally adopted had its origin in LONDON CLEARING HOUSE. The name of the bank, whose claim was cleared, was written across the face of the cheque within two parallel lines. In the beginning of 19th century, this practice becomes common even outside of clearing house, as all elements of safety.
Normally two types of cheque used in the bank. Such as;
Open Cheque: A cheque, which capable of being paid over the counter is cash, is known as open cheque.
Crossed Cheque: Those, which can only be paid to the banker for crediting the proceeds to the amount of its payee.

FORMS OF CROSSING

General Crossing
Under section 123 of Negotiable Instrument Act 1881, a cheque crossed generally is defined as under:
“Where a cheque bears across its face an addition of the words ‘and company’ or any abbreviation thereof, between two parallel transverse lines or of two parallel transverse lines simply, either with or without the words ‘not negotiable’ that addition shall be deemed a crossing and the cheque shall be deemed to be crossed generally.”

Special Crossing
Where a cheque bears across its face an addition of the name of the bank, either with or without the words ‘not negotiable’ that addition shall be deemed a crossing, and the cheque shall be deemed to be crossed specially and to be crossed to the banker.
A cheque may be crossed by any of the following:
The drawer of a cheque
The holder of the cheque. Where a cheque is issued uncrossed, its holder may cross it generally or specially.
The banker, in whose favor the cheque has been crossed specially, may again cross it especially in favor of another banker. The later bank in such case acts as the agent of the former.

Stopped Cheques
The stopped cheques register will be kept by the manager or the accountant. Immediately or receipt of a letter or telegram to stop payment of a cheque, the time of its receipt should be noted there or under the initial of the manager or the accountant. The ledger keeper concerned and he passing officials should be informed immediately and particulars of the cheques register under authentication of the manager or accountant.

4.3.12 ENDORSMENTS

An endorsement is the mode of negotiating a negotiable instrument. According to the section 15 of the Negotiable Instrument Act, 1881, an endorsement is “when the maker or holder of a negotiable instrument sign the same, otherwise then as such maker, for the purpose of negotiation, on the back or face thereof or on a slip of paper annexed thereto………………he is said to endorse the same and is called the endorser.”
Essentials of a valid endorsement
An endorsement in order to operate, as a negotiation must comply with the following conditions:
It must be written on the instrument itself and be signed by the endorser.
The endorsement must be of the entire instrument.
Where a negotiable instrument is payable to the order of two or more payees or endorsees that are not partners, all must endorse unless the one endorsing has authority to endorse for the others.
Where in a negotiable instrument payable to order, the payee or endorsee is wrongly designated or his name miss-spelt, he/she should sign the instrument in the same manner as the given in the instrument. Though he/she may add, if he/she thinks fit, his/her proper signature.
Where there are two or more endorsements on an instrument, each endorsement is deemed to be made in the order in which it appears on the instrument, until contrary is proved.
An endorsement may be made in blank or special. It may also be restrictive.

4.3.13 CLEARING

The clearing house is an assembly of the locally operating scheduled banks for exchange of cheques, drafts and other demand instruments drown on each other and received from their respective customers for collection. The house meets at the appointed hour on all working days under the chairmanship of the Central Bank or its agent as the case may be, and works within the regulations framed therefore on the basis of prevailing banking practices. In Bangladesh, clearing house sites at Bangladesh Bank but where there is no office of the Bangladesh Bank, Sonali Bank acts as an agent of Bangladesh Bank.

There are mainly two types of banking systems in Bangladesh, such as:
Internal Clearing or Inter——-branch Clearing.
External Clearing or Inter——banks Clearing.

How it works:
All the member of banks representative daily conduct two meetings at a fixed time. In their first meeting they handover cheque, drafts etc passed, which are drawn upon them. In case there are certain cheques, which could not be honored the same are returned to the presenting banks with the reasons of nonpayment in the second meeting at the clearing house.
In this meeting also the final position of house is prepared and respective accounts of the member banks are debited or credited depending upon their individual payments or collection position. After that the bankers individually debit the accounts of their customers with cheques, with cheques, which are returned unpaid.

4.3.14 DISPATCH

Dispatch includes all correspondence, letters, statements and returns and telegrams. This dispatch is also known as mail. The dispatch is primarily divided into two categories:
Inward: It means what are receives from the outside.
Out Ward: It means what are sent to the outside.
This dispatch also divided into (a) Ordinary, (b) Registered and (c) Local. Every correspondence should have an office copy and one additional copy is also retained in the master file of the office.

Working procedure for inward mail:
Registered the inward mail registered.
A local mail registered.
Currency note received & money order will be entered in a special notebook.
Working procedure for out word mail:
Registered the mail in the out word register and put the dispatch number.
Equitable sum is advanced for postages by debit to charge account and credit to postage book under the authentication of the manager.

4.3.15 BANK RECEIPTS AND PAYMENTS (CASH)

Cash Receipt
Money deposited in cash by the constituents at the cash counter of bank excluding that of government transaction is known as Bank Receipt (Cash). Different types of forms are used for cash deposits for different types of accounts. Particulars of some forms are furnished below:
Current or Savings account pay-in-slip
Application for fixed deposit receipt
Credit Voucher
Draft or mail transfer application form
T.T, Pay Order application form
Call deposit application form
Demand loan pay-in-slip

Cash Payments
Banks payment includes all kinds of payments excluding those of treasure section. Extreme precautions must be taken at all levels through, which instruments like cheques, drafts, etc is disposed of. All the instruments received at the general banking counter will be preliminary checked by the dealing officer who will enter the instruments in the respective ledger. In case of cheques the following particulars will be scrutinized:
Date (Whether postal dated or anti dated)
Amount in word and figure
Crossed or Open
Bearer or Order
Style of signature as available in the ledger
Prohibitory or Stop payment of cheque.
Late Payments
Incase of any late payments instruments must be debited in the ledger and passed in the usual manner. It will be entered in the cash paid sheet in the above manner and cash book under authentication of the manager and the cash officer. It must be noted with “Late” mark under initial of the manager with date.

4.3.16 PAYMENTS AND COLLECTIONS OF CHEQUES

In the banking sector, bill of exchange is one of the important instruments. “A Bill of Exchange is an instrument in writing containing an unconditional order, signed by the maker, directing a certain person to pay on demand or at a fixed determinable future time a certain sum of money only to or to the order of a certain person, or to the bearer of the instrument”. But cheque is the most important instrument in the bill of exchange. ‘A cheque is a bill of exchange drawn on a specific bank and not expressed to be payable otherwise than on demand’.
There are two types of cheque in the bank. Such as:
Open Cheque: A cheque capable of being paid over the counter in cash is known as open cheque.
Crossed Cheque: Those, which can only be paid to a banker for crediting the proceeds to the accounts of its payee is called Crossed Cheque.

Essential elements/requisites of a cheque
It must be written
It must contain an order to pay on demand or at fixed or determinable future
The order must be an unconditional one
The drawer must sign it
The drawee must be certain
The sum payable must be certain
The instrument must contain an order to pay a certain sum
The payee must be certain
Payments of Open Cheque

An open cheque may either be bearer or order. Where the cheque payable to order purports to be indorsed by or on behalf of the payee, the drawee is discharged by payment in due course. Where a cheque is originally expressed to be payable to bearer the drawee is discharged by payment in due course to the bearer thereof; not withstanding any endorsement whether in full or in blank appearing therein and not withstanding that such endorsement purports to restricts or exclude further negotiation.

Payments of Crossed Cheque

Where a cheque is crossed generally the banker on whom it is drawn shall not pay it otherwise than to a banker. Where a cheque is crossed specially to more than one bank except when crossed to an agent for the purpose of collection of the banker on whom it is drawn shall refuse payment thereof.
Where the banker on whom a crossed cheque is drawn has paid the sum in due course the banker paying the cheque and the drawer thereof respectively the entitled to the same rights and be placed in the same position in all respects as they would respectively be entitled to and placed in if amount of the cheque had been paid to and received by the owner thereof.

Collection of Cheques

There is no legal obligation on a banker to collects cheque drawn on other banks for a customer. But as a practice the collection of cheques and bills on behalf of the customer has become one of important function of o bank. A banker collecting a cheque for a customer has no better title than that of his customer a cheque belonging to another person can be held liable for conversion.
A banker who has good in faith and without negligence received payment for a customer of a cheque crossed generally or specially to himself shall not, in case the title of the cheque proves defective incur any liability to the true owner of the cheque by reason only of having received such payments. Thus the statutory protection given to the collecting banker can be claimed only for crossed cheques.

4.3.17 LOCAL REMITTANCE
Sending money from one place to another for customers is another important service of banks and this service is an important part of countries payment system. For this service, people especially businessmen can transfer funds from one place to another very quickly. There are four types of remitting money, such as:

Pay Order (PO):
Pay Order gives the payee the right to claim payment from the issuing bank. It can be en-cashed from issuing bank only. Unlike cheque, there is no possibility of dishonoring pay order because before issuing pay order bank takes out money of the pay order in advance. Pay order cannot be endorsed or crossed and so it is not negotiable instrument.

Demand Draft (DD):
Demand Draft is an order of issuing bank on another branch of the same bank to pay specified sum of money to the payee on demand. It is generally issued when customer wants to remit money in any place, which is out side of the clearinghouse area of issuing branch. Payee can be purchaser himself or another mentioned in the DD. It is a safe technique of transferring money from one place to another. Bearing money may be risky. It is a negotiable instrument and it can be crossed or not.
For payment of DD, paying branch first has to be confirmed that the DD is not forged one. First bank checks the “Test Code” mentioned on the draft. If “Test Code” agrees then believe that DD is not forged and make payments. For further confirmation, the issuing bank sends an advice about the DD to the paying branch. Without advice the paying branch generally does not pay.

Telegraphic Transfer or Telephonic Transfer (TT):
By this method money is transferred to another place by telegraphic messages. The sender branch will request another branch to pay required payee on demand. Generally for such kind of transaction payee should have account with the paying bank. Otherwise it is very difficult for the paying bank to recognize the exact payee. Test Code is also furnished on the TT message for the protection of it.
When sending money is urgent the bank use telephone for remittance. This service is only providing for valued customers, who is very reliable and with, which banks have long standing relationship.

Mail Transfer (MT):
It is the least used technique for transferring fund. Where there is no telex machine or telephone line then this method is used. It is also time consuming and risky because mail may be missed.

Clear Cash Book:
The clear cash book which is the abstract of each day’s transactions classified under the general ledger heading. It will be complied from the totals of the various books subsidiary to the clear cash book including the day books in which the relative vouchers have been entered in details under authentication and will be checked there form by unauthorized official.
Clear Cash Book is written to:
Test the arithmetical accuracy of one day transaction.
Consolidate one day transaction
Help position in the general ledger
Test the closing each balance of the branch.
R&D: Investment into the Future
Excellent in banking operation depend largely on a well equipped and efficient Research and Development Division. Such activities require the investment of substantial resources and a set of qualified personnel with multidisciplinary background. Although it is not possible at this stage to undertake R&D activities similar to those of the banks in the developed countries, Southeast Bank has established a core Research and Planning Division comprising skilled persons form the very inception of the Bank.

Information Technology
Banking operations of the branches have been computerized to minimize costs and risks and to optimize benefits and increase overall efficiency for improved services. The Bank generates the relevant financial statements at the end of the day. The Bank has installed Reuters Screen for smooth operation of foreign currency dealings. The Bank has also hosted a web page of its own to take a place in the World Wide Web. On-line Banking has been introduced by the Bank to provide better services to the customer. The Bank has introduced ATM ‘Q-Cash’. The Bank has installed SWIFT to facilities quick international trade and payments arrangement. The Bank has already introduced VISA debit and credit cards.

4.4.1 Principal of Advances

The granting of advances is one of the most important functions of a Bank and the test of Bank strength depends considerably on the quality of its advances and proportion they bear to the total deposit. Although receipt from exchange, commission and Banks charges contribute a fair amount of the profits or commercial Banks, its earning are chiefly derived from interest charged on loans and discount. A wise and prudent policy with regard to advances is therefore considered an important factor inspiring confidence in the depositors and customers of a Bank. Traditionally Banks have been following three cardinal principal of lending they are: Safety, Liquidity and Profitability. Loans and advances may be made either of the borrowers and the latter is called secured advances. Confidence in the borrower is the basis of unsecured advances.

4.4.2 Different Type of Loans and Advances
As initiated by Bangladesh Bank vide BCD circular no: 33 dated 16/11/89 different kinds of lending were subdivided into 11 categories w.e.f. 01/01/90 which was subsequent reduced to 9 vide BCD circular no: 23 dated 09/10/93 and again to 7 prime sectors vide BCD circular no: 8 dated 25/04/94 for fixation of rates of interest by the individual Banks on competitive basis depending on the cost of funds, prevailing marketing condition and monetary policy of the country. Loans and advances have primarily been divided into two major groups:

Fixed term loan

There are the advances made by the bank with fixed repayment schedules. The term of loan are defined as follows:
Short term : Up to 12 months
Medium term : more than 12 and up to 36 months
Loan term : More than 36 months

Continuous Credits

These are the advances having no fixed repayment schedule, but have an expiry date of which it is renewable on satisfactory performances. Depending on the various nature of financing, all the lending activities have been brought under the following major heads.

Cash Credit Hypothecation

A cash credit is an arrangement by which the customer is allowed to borrow money up to a certain limit. This is a permanent arrangement and the customer need not draw the sanctioned amount at once, but draw the amount as and when required. He can back surplus amount, which he may find with him. Thus cash credit is an active and running A/C which deposits and withdrawals may be affected frequently. Interest is charged only for the amount withdrawn and not for the whole amount charged. Cash credit arrangements are usually made adjust pledge or hypothecation of good.

Overdraft (OD)

Overdraft is an arrangement between a bank and his customer, which the latter is allowed to withdraw over and above his credit balance in the current up to an agree limit. This is only temporary accommodation usually granted against securities. The borrower is permitted to draw and repay any number of times, provided the total amount overdrawn doesn’t exceed limit. The interest is charge for the amount drawn and for the amount sanctioned. A cash credit is used for long term for the businessmen are doing regular business whereas overdraft is made occasionally and for short duration.

SOD (Other)

Advances allowed against assignment of work order for execution of contractual works falls under this head. The advance is generally allowed for a specific purpose. It is not a continuous loan.

SOD (General)

Advances allowed to the individuals/firms against the financial obligations i.e. line of F.D.R. or Defense Savings Certificate, ICB unit certificate etc.

Secured Overdraft (SOD)

It is a continuous advance facility. By this agreement the bankers allowed his customer to overdraft his current A/C up to his credit limits sanctioned by the bank. The interest is charged on the amount, which he withdraws, not on the sectioned amount. SEBL sections SOD against different security. Based on different types of security, we can divide the following category of the facility.

SOD (Export)

Advance allowed purchasing foreign currency for payment against L/Cs (Back to Back) where the exporter cannot materialize before the date of import payment.

IBP (Inland Bill Purchase)

Payment made through purchase of inland bills/cheques to meet urgent requirement of the customer falls under this type of credit facilities. This temporary advance is adjustable from the proceeds of bills/cheques purchased for collection. It falls under the category ‘commercial lending’.

Packing Credit (P.C.)

Advance allowed to a customer against specific L/C firm contract for processing/ packing of goods to be exported falls under this head and is categorized as ‘Packing Credit’. The advances must be adjusted form proceeds of the relevant exports within 180 days. It falls under the ‘Export Credit’.

F.D.B.P. (Foreign Documentary Bill Purchase)

Payment made to a customer through purchase/negotiation of a foreign documentary bill falls under this category. This temporary advance is adjustable from the proceeds of the shipping/export documents. It falls under the category ‘Export Credit’.

F.D.B.P. (Local)

Payment is made against documents representing sell of goods to local export oriented industries, which are deemed as exports as which are denominated in Local Currency / Foreign Currency falls under this category. This liability is adjustable form proceeds of the bill.

F.B.P. (Foreign Bill Purchase)

Payment made to a customer through purchase or foreign currency Cheques / Draft falls under this head. This temporary advance is adjustable form the proceeds of the cheque / draft.

L.D.B.P. (Inland Documentary Bill Purchase)

Payment made to a customer through purchase of inland documentary bills. This temporary liability is adjustable from proceeds of the bill.

Financial Products and Services
The Bank has launched a number of financial products and services since its inception. Among them Monthly Savings scheme, Family Maintenance Deposit, Double Benefit Deposit Scheme, Special Saving Scheme, Pension and Family Support Deposit, Staff Loan, Consumer Credit Scheme, Small Loan Scheme, Hire Purchase, Lease Finance, Doctors’ Credit Scheme, Rural Development Scheme, Women Entrepreneurs Development Scheme, SME Financing Scheme, Project Loan, Personal loan Scheme, Car Loan Scheme have attained wide acceptance among the people.

Staff Loan

The bank provides advances to the staff are known as Staff Loan. Rate of interest is the bank rate. The loan is adjusted from the employee’s salary.

Consumer Credit Scheme

Consumer Credit Scheme is a relatively new field of micro-credit activities. People with limited income can avail of this credit facility to buy any household effects including car, computer and other consumer durable. It is special credit scheme and the customers allow the loan on soft terms against personal guarantee and deposit of specified percentage of equity.
Performance review:
(BDT in million)
Type Volume %
Deposits Under Scheme 10,278.58 39.95
FDR 8,787.53 34.16
Call Deposits 640.00 2.49
Savings 1,473.58 5.73
Current 840.35 3.27
STD 744.76 2.89
Others 2,962.63 11.52
Total 25,727.43 100

Source: Annual report 2005 Southeast Bank Limited.
* Liquid Assets =Cash + Balance with Bangladesh Bank + Deposit with other Banks+ Money at Call and Short Notice + Investments.

4.4.10 Steps of Investment analysis
CIB report analysis
Credit Information bureau (CIB) was set up a decade ago (August 18,1992) in Bangladesh bank to act as an unfailing cure to the devil of bad debt. Subsequently, Since December, 1992 CIB has been collecting detailed credit information in respect of individual borrower/owners vide various prescribed forms developed and designed from time according to the need arising out of the changing circumstances influencing the banking and financial system of the country. CIB reports are provides all the transaction/Account information of individual/firm with other banks or financial institutions.
The basic objectives with which CIB was established is to reduce the credit risk and the extent of the default loan by extending lending and other facilities only to the genuine borrowers.

After getting the CIB report from the Bangladesh bank the investment division of SEBL bank will analyze the report. If the investment division found clean/well transaction record with the previous banks then they will send it to the Head office for further investigation. If the head office found the client solvent enough for provide loan then the head office will provide sufficient direction to the branch officer for dealing with the client.

4.4.11 Operation of the Bank

Deposits

The Bank mobilized total deposits of BDT 25,727.43 million as of December 31, 2005 as compared to BDT 22, 385.19 million in 2004. Competitive interest rates, attractive deposit products, deposit mobilization efforts of the Bank and confidence reposed by the customers in the Bank contributed to the notable growth in deposits. The Bank evolved a number of attractive deposit schemes to cater to the requirement of small and medium savers. This improved not only the quantum of deposits; it is also brought about qualitative changes in the deposits structure.