Report on Banking Activities of BASIC Bank Limited

Main purpose of this report is to analysis Banking Activities of BASIC Bank Limited with special reference to Customer Satisfaction Level. The Bank is committed to being a sophisticated prominent and professional institution, providing a one window service to its customers. Through the bank has the mean time found its own special position in the sector at the higher rank of the self. BASIC bank is expected to continue to maintain strong competitive edge in banking sector in Bangladesh in the year ahead.

Introduction

The Bank of Bangladesh Small Industries & Commerce Limited (BASIC) established as Banking Company under the Companies Act 1993 launched its operation January 21, 1989. At the outset, the Bank started as a joint venture enterprise of the Bangladesh Credit Commerce (BCC) foundation with 70 percent shares and Government of Bangladesh (GOB) with the remaining 30 percent shares. The BCC Foundation being non functional following the closure of the BCCI, the Government of Bangladesh took over 100 percent ownership of the Bank on 4 June, 1992. The bank was established as the policy makers of the country felt the urgency for a bank in the private sector for financing Small scale Industries (SSI).BASIC is unique in its objectives. It is a blend of development and Commercial Banks. The memorandum and Articles of Association of the Bank stipulate that 50% of Loan able funds shall be invested in Small and Cottage industries Sector.

Bangladesh Small Industries and Commerce Bank Limited, popularly known as BASIC Bank, are state-owned. However, it is not a nationalized Bank. It is a bank-company and operates on the lines of a private bank. The very name Bangladesh Small Industries and Commerce Bank Limited is indicative of the nature of the bank. It is a blend of development and commercial banks. The Memorandum and Articles of Association of the bank stipulate that 50 percent of loan able funds shall be invested in small and cottage industries sector. Thus the bank’s priority remains with promoting and financing development of small-scale industries in the country. According to Industrial Policy 1999, “Industry” is broadly defined to include both manufacturing and service sectors. “Manufacturing Industry” includes all production, processing, and assembling activities as well as repairing and reconditioning of processed goods. “Service Industry” includes those service-oriented activities, which involve significant use of equipment or fixed assets. Service Industry includes hotel, hospital, clinic, and IT based enterprises. “Small Industry” means enterprise employing fewer than 50 workers and / or with a fixed capital investment of less than Tk. 100 million. “Cottage Industry” covers household-based units operated mainly with family labor. Generally, fixed assets and operating costs together do not exceed more than Tk. 0.5 million per unit of cottage industry. BASIC collects fund from deposits from the members of the public, borrowing and shareholders’ equity.

Functions of BASIC Bank Ltd

The Banks offers-

• Term Loans to industries especially to Small-Scale enterprise.
• Fully fledged commercial banking Service including collection of deposit, short term trade finance, Working capital finance in processing a manufacturing units and facilitating international trade.
• Micro Credit to the urban poor trough Linkage with NGOs with a view to facilitating their access to the formal financial market for the mobilization of resources.
• Financing & Technical support to Small Scale Industries (SSI) in order to enable them to run their enterprises successfully.
• Financing in import and export business like other commercial banks.
• General Banking facilities like CD, FDR, SB, STD, BCD, FCA etc. are available.
• Provides loans on easy terms and conditions.
• It creates loan deposit.
• The bank invest it fund into profitable sector.
• It transfers money by Demand Draft (DD), Pay Order (PO) and Telegraphic Transfer
• The bank is doing the transaction of bill of exchange, Cheque etc. on behalf of the clients.
• BASIC Bank Ltd assists in the Foreign Exchange by issuing Letter of Credit.
• The bank insures the securities of valuable documents of clients.
• It brings the increasing power of dimension of transaction.
• Above all, BASIC Bank Limited helps the businessmen financially by giving discount facility for bill of exchange and by providing the facility of Letter of Guarantee.
• To establish linkage with other institution which are engaged in financing micro credit to little organization
• BASIC keeping pace with the changing environment.
• To corporate and collaborate with institutions entrusted with the responsibility of promoting and aiding SSI sector.
• Deep commitment to the society and growth of national economy.
• To search for newer avenues for investment and develop new products to suit such needs.

Functional Division of BASIC Bank Limited:

The bank has 32 branches, 6 Zones spread throughout the country. At the head office level there are 13 divisions most of which have more than one functional department which are headed by DGM and Training institute by a director with the rank of CGM.  The divisions are as follows

• Personnel Division (PD).
• Establishment & Common Service Division.
• Human Resources Development Division.
• Secretary’s Division (Aboard Division).
• General Credit Recovery Division.
• Industrial development finance division.
• International division.
• Marketing division.
• Control development & co ordination division.
• Audits an inspection division.
• Planning and research and statistics division.
• Computer system and procedures division. And
• Law division.

These are the different division of BASIC bank that are serving their services to the bank as well as to the country with great efforts according to their respective fields.

General banking division:

General Banking is the starting point of all the banking operation and it is the most important and common part of any bank It is the department which provides day to day services to the customer. It is the storage point of all kinds of transactions of foreign exchange division, loans and advance division, other relevant events. Except General Banking functions a bank cannot sustain for long. The reason behind is the huge amount of transactions held in this section. So this section plays a very important role in attracting customer and therefore should be handled with extra care.  General banking performs the following functions. These are as follows.

Functions of General Banking

• Maintenance of Deposit A/C, Saving accounts/ Current accounts/cash credit deposits/Fixed deposits/short term deposits/margin deposits/Bond deposits/F.C. Bond deposits.
• Receipts & payment of cash.
• Handling transfer transactions and operations of clearing house.
• Maintenance of accounts with Bangladesh Bank & other banks.
• Collection of Cheques & Bills.
• Issue and payment of Demand Drafts, Telegraphic Transfers and payment Orders.
• Executing customers standing Instructions.
• Maintenance of safe Deposit Lockers and Internal Accounts of the banks.
• Reporting to head office about daily position.
• Saving all transaction record in computer.
• Closing and transfer of different types of accounts.
• Keeping good relation with valued customer.

Account Maintenance:

Account opening is the base stone toward starting a relationship between a bank and its customers. Banker-customer relationship begins with the opening of an account by the customer. This section within the general banking division handles all the paperwork and formalities that potential customers require to go through when they want to open an account. Customer can open different kinds of deposit accounts as they require.

Different Types of Account:

• Current Account
• Savings Account
• Fixed Deposit
• Short term Deposit

 Current Account:

Both individuals and business open this type of account. Frequent transactions are deposits as well withdrawal allowed in this type of account. Current account is purely a demand deposit account. There is no restriction on withdrawing money from the account. It is most suitable for private individuals, traders, merchants, importers and exporters, mill and factory owners, limited company’s etc. The Primary objective of current account is to save valued customers as valued businessmen, joint stock companies, public authorities, etc. from the risk of handling cash themselves. A current deposit account may have the following characteristics.

• A Current Deposit Account may be opened in the name of person(s) having contractual capacities. Any individuals, firm or a legal corporate body may open a Current Account.
• Drawings are allowed anytime any amount during the banking hour.
• No interest is payable on the accounts.
• Bank can refuse any account opening.
• The Bank reserves the right to close any current account with prior notice.
• It can be permitted to be over drawn.

Savings Account:

This deposit is primarily for small-scale savers. Hence, there is a restriction on withdrawals in a week. Frequent withdrawals are not allowed and interest is generally allowed on monthly minimum balance. Heavy withdrawals are permitted only against prior notice. The cheque facility is also available in case the depositor agrees to maintain a minimum balance. A savings deposit account may have the following characteristics.

• Savings Bank Deposit account may be opened in the name of adult individual or jointly in the names of two or more persons payable either or both or all them or to the survivor with total satisfaction of Bank.
• These are interest bearing deposit accounts. (Present interest rate 7.00% in BASIC Bank Ltd.
• Savings Bank Account shall not be allowed to be overdrawn.
• No interest will be paid in a Savings Bank Account for the month in which withdrawals have been made more than twice a week or over 25% of the balance of his/her accounts without notice. For withdrawal of sum exceeding 25% of the balance, 7 days notice in writing should be given to the bank.
• Interest shall be calculated on the minimum balance at the credit of an account between the close of the 5^th day and the last day of the month.
• Interest will be applied half yearly on 30^th June & 31^st December at the prescribed   rates as advised by Head Office
• Bank may however refuse without assigning any reasons to open savings account by any body.
• The Bank reserves the right to close any Savings Bank Deposit account with prior

Fixed Deposit Account:

This account provides different rate of interest against different amount of deposit for different number of years. A person can open one or more number of accounts for different amount and for different number of periods in his own name or joint name. Though FDR is an A/c, it is something different from other a/c. FDR is a long-term deposit. Usually customers are allowed to open this a/c for a certain period. The rate of interest varies in accordance with the terms of deposit.

This account has the following characteristics:

• Fixed Deposits may be opened by one adult individual singly or by more than one adult individual jointly or by any Government/Private /Autonomous or other organization.
• These deposits shall be opened for a fixed period ranging from three months to two years.
• Interest on FDR shall be payable only after maturity of the FDR along with the principal.
• Payment of FDR will be made on demand after expiry of the maturity period on presentation of FDR duly discharged by the depositor(s).
• For encashment of FDRs before maturity, if FDR is encased before expiry of 3 months no interest would be given. Interest for 3, 6 or 12 months, according to the situation may be given if encased after expiry of such period but before maturity.
• Each time when FDR is opened, it shall be considered as a separate contract.
• Fixed Deposits are neither transferable nor negotiable.
• The interest rate differs from 6% to 7% regarding the time span of FDR

Short Term Deposit:

Normally various big companies, organizations, Government Departments keep money in STD account. It is also a time deposit account. Frequent withdrawal is discouraged and requires prior notice. In BASIC, customers usually give an instruction that their current account will be debited whenever its deposited amount crosses a certain limit and this amount will be transferred to the STD account. The deposit should be kept for at least seven days to get interest. The interest offered for STD is less than that of savings deposit. Interest is calculated based on daily minimum product and paid two times in a year. Interest rate is 5.75%.

This account has the following characteristics:

• Short Term Deposit Account (STD) is opened usually by Corporations, Banks and Financial Institutes etc.
• These deposits can be withdrawn on 7 days’ notice by the account holder(s). Withdrawal is allowed after the expiry of notice period.
• Interest on such deposits are payable at the rate determined by Head Office from time to time.
• Interest shall be calculated on daily product basis and applied half yearly at end of June and December or when an account is closed.

Necessary Documents to Open an Account:

For Individual /Joint Account:

• Need two copies of attested passport size photograph,
• Passport,
• Introductory Certificate from Employer,
• Introductory Certificate from renowned person of the society acceptable to Bank/Financial Institutions, and
• TIN Number (If applicable).

For Proprietorship Firm:

• Need two copies of attested passport size photograph.
• Need valid Trade License from the Municipality/ City Corporation/Union Parishad.
• Tax Identification No (TIN) directed by Bangladesh Bank.
• Utility Bill. (Electric, Gas, Wasa, Land Phone) any one.
• Company Seal.

For Partnership Firm

• Certified copy of valid Trade License from the Municipality/ City Corporation/Union Parishad.
• Need Two copies of attested passport size photograph
• Certified copy of the Registration Certificate of Partnership Deed duly attested by Notary Public in case of registered firm.
• Resolution signed by all partners to open the A/C.
• Partnership Account Agreement.
• Passport/ Introductory Certificate from Employer /Introductory Certificate from renowned person of the society acceptable to Bank/Financial Institutions.
• Tax Identification No (TIN) directed by Bangladesh Bank.

For Limited Company:

• Need Two copies of attested passport size photograph
• Certified copy of Certificate of Incorporation by RJSC.
• Certified copy of Certificate of Commencement of Business (in case of Public Limited Company).
• Up to date list of Directors.
• Certified copy of Memorandum & Articles of Association by RJSC.
• Passport/ Introductory Certificate from Employer /Introductory Certificate from renowned person of the society acceptable to Bank/Financial Institutions.
• Certified copy of Resolution of the Board of Directors for opening & operation of the Account.
• Tax Identification No (TIN) directed by Bangladesh Bank.

In case of  Public Limited Join Stock Company:

• Board Resolution duly certified by Chairman/ Secretary authorizing to open the A/C with the bank and mentioning the name of the person (s) who will operate the A/C as per provisions of Articles of Association.
• Photocopy of Registration certificate certified by Chairman or Secretary.
• Certificate of commencement duly certified by Chairman or Secretary.
• Memorandum of Association and Articles of Association duly certified by Chairman or Secretary.
• List of members of Managing/ Executive duly certified by Chairman or Secretary.
• Tax Identification No (TIN) directed by Bangladesh Bank.

In case of Non-Government College/ School/ Madrasha, –

• Up to date list of the Governing Body/ Managing Committee.
• Copy of Resolution of the Governing Body/Managing Committee authorizing opening and operation of the account duly certified by Gazetted Officer.

In case of  Societies/Clubs:

• Certified copy of Bye-laws & Regulations/ Constitution
• Certified copy of Registration certificate under the societies Registration Act, 1962.
• Certified copy of Resolution for opening and operation of account.
• Power of Attorney.

In case of Cooperative Society:

• Certified copy of Certificate of Registration issued by Registrar, Co-operative Societies.
• Copy of Bye-law duly certified by the Co-operative officer.
• Up to date list of office bearers.
• Resolution of executive Committee as regards of the account.

In case of Minor’s account:

A person who has not completed his 18^th year of age is considered to be a   minor. But in those cases where the court appoints guardian to person or property of minor or the property of the minor is put under charge of a Court of Wards during the period of his minority, the person shall become major on completion of 21 years. According to Contract Act minor has no right to sign a contract. So minor cannot open an account. But a Guardian of a minor can open and operate an account by minor’s name.  Guardian of minor can open two types account by signing on stamp by any of the following declarations.

• Putting the word “ MINOR” after the title of the account.
• Recording special instruction of operation of the account.
• The account opening form is to be filled in and signed by either of the parents or the legal guardian appointed by the Court of Law & not by the Minor.

Account Opening Process

Account is opened according to the following steps respectively:

• Duly filled-up prescribed Application Form by the Applicant with introductory reference by an account holder.
• Duly fill up the specimen signature card in front of a concerned person by the applicant.
• Verify the introductory reference and examine the documents by the authorized person.
• Issue the deposit slip and make deposit in cash. No cheque or draft is acceptable.
• Issue one cheque book & a pay- in-slip book.
• Account is opened.

Issuing Cheque Book

Fresh cheque book is issued to the account holder only against requisition on the prescribed application form. In case of old account, requisition made on the prescribed requisition slip attached with the cheque book issued earlier. Generate a security no randomly for every cheque leaf by Manager or authorized person. Prepare the instrument with respective security no on the back of each leaf and signed by the authorized person. Make necessary entries in Cheque Issue Register. Finally issue the cheque book for client (s). Duplicate cheque book in case of lost one should be issued only when an A/C holder personally approaches the bank with an application letter of indemnity in the prescribed pro-forma agreeing to indemnify the bank for the lost cheque book. Fresh cheque book in lieu of lost one should be issued after verification of the signature of the account holder from the specimen signature card and on realization of required exercise duty only with prior approval of manager of the branch. Cheque series number of the new chequebook should be recorded in ledger card signature card as usual. Series number of lost chequebook should be recorded in the stop payment register and caution should be exercised to guard against fraudulent payment.

Transfer of an Account

Account holder may transfer his account from one branch to another. For this, he/she must apply with proper reason to the manager of the branch where he is maintaining account. Manager then requests to the manager of that branch where the A/C holder wants to transfer his account. Besides, he also sends original copy of account opening form and SSC (Specimen Signature Card) and photocopy of application for transferring the account with the balance remained in the account.

Closing an Account

To close an account, parties may be requested to send an application along with the unused leaves of the Cheque Books issued to them.

• By drawing a cheque of the whole amount and a nil balance confirmation to be taken from the account holder.
• Recover the unused the cheque leaves and enter into the “broken chquebook register”.
• Remove the account opening form, specimen signature card and all other papers relating to the closed account.
• Remarks of account closing at the ledger folio should be authenticated by the manager or supervising officials.
• The banker may itself ask the customer to close the account when the banker finds that the account is not being operated for a long time.
• If the account is not operated upon for six months than the banker will try to do the bilateral communication with the account holder, but if the banker does not get any response from the account holder then the account becomes “Dormant” account.
• If the account is not operated upon for two years then the account becomes “inoperative” account.
• A new register for unclaimed deposit account will be maintained called “unclaimed” deposit account.
• For withdrawal at any amount from that account, permission from head office or controlling office wins is required.

Customer Service

 BASIC Bank has its branches spread through out the country and therefore, it serves as best medium for remittance of funds from one place to another. This service is available to both customers and non-customers of the bank because lots of cash handling from one place to another is risky. BASIC Bank Limited gives customer services through issuing different sort of instruments. They are As follows

• Demand Draft (DD)
• Pay Order(PO)
• Telex Transfer (TT)
• OBC

Demand Draft (DD)

Demand Draft is the most popular instrument used to remit funds on a local basis. It is an order to pay money drawn by one branch of a bank upon another branch or the same bank for a particular sum of money which is payable to order on demand. It is always drawn payable to the order of named payee. In this case client does need account in this bank. These are two types. One is in ward D.D. and another is outward D.D. In this procedure one can transfer money from one place to another place. For this reason money carrying risk is reduced. As well as time also save.

DD Charges

Outward DD

In this case transferee fills up the form where he must write the drawer name and account number and the bank name where branch office collects the money. In D.D. there must have important information as follows:

• D. Number.
• Control number.
• Payee name and account number.
• Amount in ward and amount in figure.
• Branch code of from and to.
• Test number.
• Signature of applicant.
• For D.D. (1 to 49,999) Tk. There is no test number is needed. Greater than 49,999 Tk. D.D. needs test number.
• After that have to register D.D. in the register book. Where bank writes control number, test number, amount in word and figure, payee name and the branch name where it sends.
• The bank makes an advice, which has four parts. Two copies send to the payee’s branch, one copy sends to the head office and the rest one in this banks voucher.

Inward D.D:

When D.D. comes from any branch, then we register it in register book, in this case bank must see the previous serial number. If it is correct, than bank register it in register book. Where bank entry date on the D.D., D.D. number, payee name, amount, and serial number.

Pay Order

A pay order is a draft issued by one bank on another or on its branch and also this is the safest way of making payments, as they are drawn on the bank issuing them. So, there is no scope of fraudulent or cheque bouncing. A pay order is issued only within the members of the Bangladesh Bank clearing house (Dhaka Metro). It is another facility for client to transfer his money to another place. In this case he must have an account in this bank.

Pay-order Charges

Pay Order Issuing Process

• Appropriately filled up the application form by the customer.
• Deposit money either in cash or by cheque with necessary charges.
• Prepare the instrument and make necessary entries in the Bills Payable Register where payee’s name, date, PO etc are noted.
• Deliver the instrument to the customer after scrutinized and approved by authority by taking signature of the customer on the counterpart.

Termination of Pay Order

The following procedure is followed to refund the pay order by cancellation:

• Submit written request to refund the pay order attaching therewith the original PO.
• Verify purchaser’s signature with the original application form on record.
• Manager/ authorized person’s prior permission is required before refunding the amount of pay order.
• Pay order should be affixed with a stamp ‘cancelled’ under proper authentication and the authorized officer’s signature on the pay order.
• No charge is created for cancellation. Refund only the pay order amount.
• Cancellation of the pay order should be recorded in the pay order issue register.

Telex Transfer (TT)

Telex Transfer is that transferring money from one place to another within some time by telephone. The most important of a TT is that its test number. If TT number matches with other branches then payment is happened otherwise not. The test number is that the sum of different code numbers and very confidential. There are two types. One is inward T.T & another is outward T.T. In this procedure one can transfer money from one place to another place. Thus the risk of carrying money is reduced. This procedure is only applicable for in this bank & its other branches. No one can do T.T. from in one bank to another. T.T sender and receiver both must have an account in the receiving and sending branches respectively.

Practice of Inward T.T:

The sending branch informs the receiving branch through telephone. In this case bank must see some important things as follows: –

• T. control number.
• Payee name and account number.
• By order.
• Test number
• Amount in ward and amount in figure.

After getting this T.T. bank check that T.T. and register it in register book. . In this case most important things are test number for client’s security. If the test number doses not match with the register book, then bank inform it to that branch and bank does not pay that money. But usually this type of mistake does not happen. After register T.T. banks make an advice, which has four parts. Bank indicates clearly the date, the amount of T.T. inward and in amount. In this advice bank dose customer accounts debit and head office account credit and write test number. Two copies send to that branch, one to the head office account and the rest one is attach with voucher.

T.T Charges

Practice of Outward T.T:

This is like a reverse method of inward T.T. In this case if any client wants to transfer money or account, he informs bank. Bank informs that branch where the client wants to transfer his amount. In this case, bank communicates with that branch through telephone. Bank must inform the payee name, by order, amount of money, advice number. For an example if any client of our branch wants to T.T. to chittagong after that  he must fill up the form of T.T. where he writes all information as per T.T. form. Then bank check all information and charge commission, vat and telex charge. For any kind of amount of T.T. test number is needed.

OBC (Outward bill for collection)

OBC are two types these are as follows:

• Outward OBC
•  Inward OBC

Outward OBC

A client deposits a cheque/ DD/PO for collection, of other bank or same bank other branch. After depositing the instrument by the customer, at first we justify the genuineness of the instrument. Then we prepare the instrument with crossing and endorsement. Then the instrument is given entry in the OBC register with a sequence OBC number. The OBC number is written on the face of the instrument with OBC seal. A formatted forwarding is prepared to send the instrument to the drawee Bank Branch for collection with request to proceeds the remittance by their Draft/ PO/ IBCA (Incase of same bank other branch). If the instrument is drawn on other bank outside the clearing house area, and if the OBC sending Bank has no branch there, the instrument is directly send to the Drawn on branch. On the other hand if the OBC sending branch has any branch there, they forward to their branch for collection through clearing house.  A liability voucher is preparing with a liability account number in the name of the customer. During the passing of liability Voucher Banker Liability is credited while customer liability is debited. After preparing all procedure papers and instruments are given to the Authorized Officer for checking and sign. Then the instrument with main forwarding sends to the Drawee branch, while the credit voucher or deposit slip remains with office copy forwarding. If the instrument is drawn on same bank outside the clearing house area or inside the clearing house area, the instrument is forward to their branch for collection with internal arrangement (IBCA). The procedures for payment of outward OBC are as follows

When the forwarded branch is same bank other branch, if they honor the instrument or if they collect through clearing house, they send an IBCA to the sending branch. If they dishonor, they send the instrument with a return forwarding.  The IBCA is credited to the customer account with their Credit voucher or deposit slip. When the instrument is directly send to the Drawn on branch, if they honor the instrument they issue a draft drawn on any branch situated in OBC sending branch’s clearing house area. They issue the draft with an amount after the reducing amount of their issuing and other (commission, VAT, Postage) cost. After receiving the draft the OBC sending branch send the draft to clearing house by crediting “Sundry Deposit Clearing” account. Then after collecting through Clearing House the amount is deposited to client’s account with Credit voucher or deposit slip by debiting “Sundry Deposit Clearing” account. Total amount of Commission (Tk.50/= up to Tk.50,000/=, and 0.1% for above), VAT (15% on Commission), and Postage (Tk.25/=) charge debited from customer’s account and credited to  Commission, VAT, and Postage account with separate head and account number. And also the amount which was deducted by the DD issuing branch as stated above (Underline) debited from customer’s account to adjust with the credit voucher or deposit slip which was given by the customer with his instrument. A reverse liability voucher is preparing where Banker Liability is debited while customer liability is credited.

Inward OBC

When an instrument (with forwarding) comes to a Bank for collection, in respect of paying bank, it is called inward OBC. At first the genuineness of the instrument is justified. If the instrument drawn on to forwarded branch and collecting branch are same Bank, then an Authorized Officer checks the date, instrument number, Drawer signature, amount in words and figure, payee’s name etc. After satisfying, he sends the instrument to Computer department for posting. An IBCA is issue in favor of collecting bank against the instrument.

Clearing

The customers draw thousands of checks and drafts every day. These are payable at a particular branch of a particular bank. To get payment persons should go to the branch personally. If that bank is situated far away then the term transaction cost and time consuming arises. So the customer can deposit the check and drafts to his own bank and bank will collect the amount on behalf of the customer and credit the amount to that customer. For this purpose, Bangladesh Bank (the central bank) developed a system called “Clearing House” where the entire banks can mutually settled their claim including deposit transfer from one bank to another bank by their respective clients. At the clearing house it is possible to settle the inter-bank liabilities.

Clearing Department works in two ways:

1. Outward Clearing
2. Inward Clearing

Method for Outward Clearing

When parties of a branch place cheques and other instrument of other banks, the collection these cheques and instrument through clearing process is known as outward clearing for that branch.

• Received for clearing seal is stamped on the deposit sleep for the particular cheque.
• Crossing of the cheque are done.
• Payee’s A/C Credited” endorsement.
• Required endorsement seals are given on the back of the cheque depending upon their nature.
• Entry are given in the Outward Clearing register Book
• Clearing” seal is given on the cheque along with date on which the cheque are going to Clearing house
• Head quarter is sorted bank wise and entries are given in the computer
• Get the printout of the entries by bank wise & endorsement must be signed.
• Give the cheque to the officials of the respective bank in the clearing house.

Method for Inward Clearing

When cheques of a branch come for collection through clearing process is known as inward clearing.

• Bankers will verify all essential of the cheque.
• The bank crossing will be given.
• If the cheque is honored respective party will debited and IBCA will be written against this cheque to the local office.
• Dishonored cheque will be sending back to the local office with a return memo describing the reason of dishonored and thus the second house of clearing house.

Software Used for Clearing House

Software called NIKASH supplied by Bangladesh Bank is used in clearing of the cheque and other instruments. The in-charge of clearing section make clearing  section make clearing slip for each cheque through computer using NIKASH and finally this cheque are send to the Bangladesh Bank Clearing house sorting bank wise.

Cash (Receive and Payment)

This section is handles all the cash transaction that take place between the bank and its customers. The function of this department is to receipt and payment of cash. This department receives cash from the depositors and pays cash against cheques, drafts, and pay order pay slip over the counter. It also sensitive as it deals with liquid money. The function of this unit is to receive and payment of cash. Operation of this section begins at the banking hour. Cash officer begins her/his transaction with taking money from the vault, known as the opening cash balance. Vault is kept in a much secured room. Keys to the room are kept under control of cash officer and branch in charge. The amount of opening cash balance is entered into registered. After whole days’ transaction, the surplus money remains in the cash counter is put back in the vault and known as the closing balance. Money is received and paid in this section. The main functions of this section are as follows

• Cash Receive
• Cash Payment

Cash Receive

• At first fill up the deposit slip.
• Deposit the money in this section.
• Officer receives the money and then counts after that register it.
• Officer enters the receipt details like serial no, amount, etc. in his register, signs the slip and keeps the banks’ part of the slip. Other part is given to the depositor.

Cash Payment

• At first submit the cheque with three signatures and fill up other marks.
• Signature is verified by the officer and also if cheque is big amount then second manager verifies the signature.
• Payment of cheque and collection of cheque are in the bank as future document.
• When cash paid seal is given on the cheque after that make entry in the payment register.

Pre-Payment Verifications

There are some important things that will be verified before payments. These are as follows

• Name of the drawer.
• Account number.
• Look the validity of the cheque and make sure that is not post dated.

Bank Vault

All cash, instruments (P.O., D.D., cheque) and other valuables are kept in the vault is insured up to Tk. 10 crore with a local insurance company. If cash stock goes beyond its limit of Tk. 10 crore, the excess money is transferred to Bangladesh Bank & if there is a occurrence of shortage of cash during transaction period; money is transferred or drawn from the central bank. There are three keys of the vault, which are given to three seniors most officers. Daily, an estimated amount of cash is brought out from the vault, for transaction purpose. No more than Tk. 4 Crore brought at once from the vault, on a single day. The amount derived is variable regarding the market demand conditions.

Loan and Advance:

The Loans & Advances department is very important part of the branch operation that also provides administrative support for the lending activities of the branch. Lending is said to be the primary function of a banker and through this function he earns income for the bank by charging interest on the extended credit facility (in the form of loan and advance) to the customer. Bank lending is important to the economy, for it makes possible the financing of agriculture, commercial and industrial activities of a nation. 

Functions of this Department

• Receiving application.
• Credit Information Bureau (CIB) report from Bangladesh Bank.
• Proposal preparation and sending.
• Approval.
• Advice issue.
• Documentation & Disbursement.

Credit Policy of BASIC Bank Limited

The credit policy of any banking institution is a combination of certain accepted time tested standards, and some other dynamic factors determined by the realities of varying and changing situations in the market place. Credit policy lays down the BASIC BANK LIMITED principles and broad parameters of the lending operations. The key is to sound, healthy and profitable credit operation, however, lies in the quality of judgment and sense of promotion of the officers making lending decisions, and their knowledge of the borrowers and the market place.

Types /Classification of Advances

The credit facilities granted by the bank are classified under different account head as under:

• Loan (like short/mid/long term in nature).
• Overdrafts (allowing frequent debit/credit transactions within an agreed limit).
• Trade related facilities (like bills port folio).
• Short term Advances (like continuing facilities).
• Contingent facilities (like Letters of Credit, Letters of Guarantee).

• Generally all facilities, except term loans are repayable on demand. Trade related credit facilities are self-liquidating in nature.

General Procedure for loans and Advance

The following formula is applicable for giving loans to the customer. This are-

• Dully fill-up First Information Sheet.
• Application for credit line.
• Collecting CIB report from Bangladesh Bank.
• Making Credit proposal.
• Project Appraisal.
• Head Office Approval.
• Sanction letter.
• Monitoring and Recovery.

Foreign Exchange

Foreign Exchange Department plays a vital role to earn the Banks maximum profit. When two countries exchange goods or services between them we can called it foreign trade. No country can produce all kinds of goods. Many writers define it in many ways. “International trade is the transaction of goods and services between two or more countries” (Prot. C.P. Kridleberger) was according to proof. O.M. Amos- “International trade are the exchange of goods across national boundaries” And “International trade is a trade among different countries or trade across political frontiers.” Foreign Exchange means foreign currency and it includes any instrument drawn, accepted, made or issued under clause (13), Article 16 of the Bangladesh Bank Order, 1972. The department that deals with foreign correspondence and dealings is known as Foreign Trade Department. Foreign Trade Department deals with Letter of Credit (L/C) operation and foreign remittance. The foreign exchange department of BASIC Bank has three sections, these are as follows:

• Import Section
• Export Section
• Foreign Remittance Section

Functions of Foreign Exchange Department

Exports:

• Pre-shipment advances.
• Purchase of foreign bills.
• Negotiating of foreign bills.
• Export guarantees.
• Advising/ confirming letters- letter of credit.
• Advance for deferred payments exports.
• Advance against bills for collection.

Imports:

• Opening of letter of credit (L/C).
• Advance bills.
• Bills for collection.
• Import loan and guarantees.

Remittances:

• Issue of DD, MT, TT etc.
• Payment of DD, MT, TT etc.
• Sale and enhancement of foreign currency notes.
• Non- resident accounts.

Documents used in Foreign Exchange

• Documentary Letter of Credit
• Bill of exchange.
• Bill of lading.
• Commercial invoice.
• Certificate of origin of goods.
• Inspection certificate.
• Packing List.
• Insurance Policy.
• Pro-forma Invoice/ indent and GSP Certificate.

Foreign Exchange Remittance

Remittance means sending of fund. The word remittance we understand sending/transferring of fund trough a bank from one place to another place which may be within the country or between two countries, one is abroad is called foreign Remittance. This Department deals with the basic paying and receiving of funds into the Bank, for the clients. They transfer, or wire money abroad as well as locally through TT or SWIFT, etc. They deal with Foreign Currency time placements and balance certificates for clients. They work very closely with the cash department. It is the Remittance Department, which also issues monthly salaries both locally and internationally for some of their clients. They also sell Government bonds to clients and organizations. Remittance Department works as an intermediary for clients and actions taken on their accounts. They are here to issue drafts as well as inform clients on changes on their accounts and the causes of those changes. Automatic credits and debits are not necessary done, especially in cases of International transactions. Sometimes credit will be available at a certain value date. They deal with fund transfers both locally and abroad as well. So from this remittance customer are getting services from the bank.

Research part

Introduction to project

The word “satisfied” itself had a number of different meanings for respondents, which can be split into the broad themes of contentment/happiness, relief, achieving aims, achieving aims and happy with outcome and the fact that they did not encounter any hassle:  Many activities are there in this Bank whereas it provides many services in daily to the customer General Banking is the starting point of all banking operation. Everyday it receives deposit from the customer and collects cash by the check. So this section plays a very important role in attracting customer and therefore should be handled with extra care. There are many clients in the BASIC Bank. They are getting services from this section so if general banking performance is good then customer easily can have better service and become satisfied. So to hold the customer they have to provide the good services. Other sections are like Loan and advance and foreign exchange division. Many customers can take loan from this department. And also the departments have many procedures for taking loan. The foreign exchange department consists of export; import and other foreign remittance play an important role in a developing economy.

The main cause of select the topic understands the different banking activities with the special customer satisfaction level. From this report I have tried to find out the customer satisfaction level that means how mush satisfied the customer of this bank. Finally come to findings and to provide some valuable recommendations for help out of the bank.

Objectives of the Report

We know that objective is important each and every work and without this is not possible to complete or finish the work that is meaningless. So to make a report I have some objectives also.

Broad objectives:  To understand the customer satisfaction of BASIC Bank customers concerning the affectivity of the banking activities of BASIC Bank.

Specific Objectives: 

1. To know whether customer are satisfied
2. To find out the causes of dissatisfaction
3. To know about the problems of the customer
4. To give suggestions / solutions to solve those problems.

Scope of the project

The study focuses about the banking activities and satisfaction of the customer and can know the possible ways to improve the services. The scope of this report is limited to only this branch of Dhaka Metropolitan Area not whole BASIC Bank.

Methodology of the project

There are many sources of the information have been used all over this report. The information and data for this report have been collected from the primary and secondary sources.

Primary sources:

I prepared a questionnaire for the clients who visited the branch. And I collected data from the clients by Face-to-face conversation to know the satisfaction level of the customer of BASIC Bank.

Research design

Questionnaire based study have conducted by me. The questionnaire of my survey have made by considering the likerd scale.

Sample Design

I have considered the different section of people who have an account in this bank. In total I have completed my survey with 50 respondents.

Data Gathering

To carry out my survey, I need to prepare a questionnaire to have actual output. After that I have collected the data based on my schedule.

Data processing and analyzing

After collecting the data I have placed into my report. For this purpose I have used Microsoft word and excel for graph.

Secondary Sources:

• Annual report of BASIC Bank Limited.
• Website of the BASIC Bank Limited.
• Data from the bank’s archive.
• File study
• News paper, Journals, Article etc

Analytical Part

To meet up our objectives, we surved 50 customers, On the basis of this survey we try to know the satisfaction of the customer of BASIC Bank limited.

Respondent profile

Table: Gender of the Respondent

Source: Field Survey

According to this table we can say that most of the customers are male that means 86% customer are male where as minimum customer are female that means only 14% customer are female. Table 1.1 data can be shown graphically.

Occupation of the Respondent:

BASIC Bank has many clients. Every person’s occupations are different. That’s why the question was asked to identify different occupation of the respondent.

Table: Occupation of the Respondent

Source: Field Survey

 Table shows that out of 50 respondent maximum customers are Business man that means 58% customers are business man. Where as minimum customers are students that means only 4% customers are students. 22% customers are service holder and 8% customers are house wife. And the remaining 8% are others occupation. Table data can be shown graphically.

Accounts duration/Year:

It means that duration of the account. The question was asked to identify duration of the account of the customer.

Table- Accounts duration/Year

Source: Field Survey

Table shows that out of 50 customer maximum customer have account for one year to less than two year that means 40% customers have account for one year to less than two year. Where as 28% customers have account for less than one year. The rest of the 32% customers have account for more than two year.

Different types of Accounts:

It means that the accounts are not similar one with another. The question was asked to identify which account the customers have of this bank.

Table-Different types of accounts

Source: Field Survey

 Table Shows that out of 50 customer’s maximum customers have current account that means 36% customers have current account. Where as minimum customer have fixed deposit accounts that means only 12% customers have fixed deposit account in this bank. 30% customer have savings account and remain 22% customer have others.

Customer choose BASIC Bank because of its image:

Image of the bank means bank the reputation of the bank. . That’s why this question was asked to identify how many respondents choose this bank for image.

Table-Image if the Bank

Source: Field Survey

Table Shows that out of 50 customers maximum customers are agreed to this statement that means 32% customers are agreed choose the bank for image. Where as minimum customers are strongly disagreed that means only 8% customers are strongly disagreed. 24% customers are strongly agreed and 20% customers are neutral. And the rest of 16% are Disagreed.

For Better service quality:

Service quality means bank are providing the different services to the customer so how those service quality. That’s why this question was asked to identify how many respondents choose this bank for better service quality.

Table-Better Service Quality

Source: Field Survey

Table Shows that out of 50 customers maximum customers are agreed about this statement that means 38% customers are agreed choosing the bank for better service quality. Where as minimum customers are strongly disagreed that means only 6% customers are strongly disagreed. 28% customers are strongly agreed and 20% customers are neutral. And remain 8% customers are Disagreed.

For Advance Technology:

Advance technology means the technology which is updated and very fast. That’s why this question was asked to identify how many respondents prefer this bank for advance technology.

 Table- Advance Technology

Source: Field Survey

Table Shows that out of 50 customer’s maximum customers are neutral about this statement that means 30% customers are neutral for advance technology. Where as minimum customers are strongly disagreed that means only 10% customers are strongly disagreed. 24% customers are agreed and 22% customers are disagreed. And remain 14% customers are strongly agreed.

Customers’ rating about transaction acceleration:

Acceleration of transaction means the speed of transaction. Here the customer evaluate on the basis of the speed of transaction. That’s why this question was asked to identify how many respondents like this bank on the basis of acceleration of transaction.

Table- Acceleration of transaction

Source: Field Survey

Table shows that out of 50 customer’s considerable portion rated excellent.36% customers said excellent, where as minimum customers that means 8% customers rated as very bad. 24% customers rated as good and 22% customers rated as average. And remaining 10% customers rated as bad about acceleration of transaction.

Rating on expertise in solving problem:

Expertise in solving the problem mean when the customers feel any problem in that time the problem is easily solved. That’s why this question was asked to identify how many respondents approximating this bank for expertise in solving the problem.

Table- Expertise in solving problem

Source: Field Survey

Table shows that out of 50 customer’s maximum customers rated as average. That means 38% customers said average about expertise in solving problem. Where as minimum customers rated as very bad that means only 2% customers rated as very bad. 24% customers rated as good and 16% customers rated as excellent. And remaining 20% customers rated bad about acceleration of transaction.

Rating on Public Relation and Media Information:

Public relation and media information to the customer that mean gives the message to the customer through advertising by media.

Table-Public Relation and Media Information

Source: Field Survey

Rating on ATM (VISA) or credit card facility:

Automated Teller Machine (ATM) provides better services than to withdraw money by standing in a queue.

Table: ATM (VISA) or credit card facility

Source: Field Survey

Table shows that out of 50 customer’s maximum customers rated as very bad about this statement that means 76% customers said very bad about ATM (VISA) or credit card facility. Where as minimum customers said average that means only 8% customers rated as average. And the rest 16% customers rated as bad about ATM (VISA) or credit card facility. Table 2.3 data can be shown graphically.

Rating on the Bank’s charge against services:

This point is one of the most important points which customers pay a deep attention when they are going to open an account or another thing.

Table- Charges of the Bank

Source: Field Survey

Table shows that out of 50 customer’s maximum customers rated as good about this statement that means 38% customers said good about charge of the bank. Where as minimum customers said very bad that means only 8% customers rated as very bad. 28% customers rated as average and 14% customers rated as bad. And remaining 12% customers rated as excellent.

Rating on wide range of service:

 Wide range of service

Source: Field Survey

Table shows that out of 50 customer’s maximum customers rated as good about this statement that means 56% customers said good about wide range of service. Where as minimum customers said very bad that means only 4% customers rated as very bad. 18% customers rated as excellent and 14% customers rated as average. And remaining 8% customers rated as bad. Table 2.5 data can be shown graphically.

Customer Relationship Management:

It means that relationship between Bank and the customer. That’s why the question was asked to identify how the relationship between bank and customer.

 Table-Customer relationship Management

Source: Field Survey

Table shows that out of 50 customer’s maximum customers are agreed about customer relationship management. That means 38% customers are agreed. Where as minimum customers are strongly disagreed that means 4% customer are strongly disagreed. 28% customers are strongly agreed and 24% customers are neutral. And the remaining 6% customers are disagreed. Table 2.6 data can be shown graphically.

Recommendation:

It is very difficult for me to recommend about BASIC Bank limited because I have been there only three months. So from my point of view I think that BASIC Bank can follow the steps.

• Use of advanced technology:

The BASIC bank limited should have used advanced technology such as intranet service, online system, task sharing, computerized documentation, and high tech software and so on. BASIC bank should introduce Management information system (MIS) system to mobilize its day to day activities. It will help the employee to do their work more quickly and at the same time maintaining their quality of work and also helps to work efficiently and effectively and get it enabled to provide services according to the customers’ needs and wants.

• Increase the interest rate to attract more customers and stop switching of the existing customers.

Interest rate on savings deposit should be increased.  Interest rate on fixed deposit should be increased. Because savings and fixed deposit interest rate is very low of BASIC Bank compare to other Bank. So the bank should increase the interest rate.

• Increase ATM booths and mobile service

BASIC Bank does not have that much ATM booth. People cannot withdraw money by any time based on their needs. So ATM booth should be increased in many places.

• Inform customers about the existing products and services through advertising

BASIC Bank should give message through advertising about their various services in different TV channels, radio, newspapers etc. They should inform to the customer what their existing product is and up coming product.

• Discover new scheme:

At present BASIC bank does not have credit card or debit card facility. So Credit card, Debit card facility should be established. They should give some sought of loan like car loan, education loan, etc to the customer.

• Skill employee

The bank should produce the required number of effective and efficient employee by the different type of training where the right person does the right job at the right time for banking benefits.

Beside the above statement I found some following relevant recommendation

• Some division should assign right number of employee to do the banking activities smoothly.
• BASIC bank should use different types of marketing strategy for attracting customers.
• BASIC bank should provide to the customers quick service in order to open a new account.
• The bank should give optimum level of remuneration to the intern person for becoming them more rechargeable.
• BASIC bank should arrange some entertaining elements like, television or other visual elements which can make refresh to the customers while they waiting for withdraw money or other banking activities.

Conclusion:

BASIC Bank is unique in terms of constitution, its mandate, and its objectives and modus operand. The Bank is committed to being a sophisticated prominent and professional institution, providing a one window service to its customers. Through the bank has the mean time found its own special position in the sector at the higher rank of the self. BASIC bank is expected to continue to maintain strong competitive edge in banking sector in Bangladesh in the year ahead. Through bank’s specialization and integrated approach, the bank aims to build a strong position in the industrial development of Bangladesh. The bank also plans to maintain its focus on managing capital and costs to maximize shareholders value. In this environment the bank expects to make further gains in revenue, income and return on capital.

As an internee in BASIC Bank Bangladesh Limited at karwan Bazar Branch I have learned many things and found some sought of things after analyzing. If management of this bank concentrate on this then it will be better. I think to pull the new customer and to hold the existing customer it is important. Then they successfully compete in the customer retention which will be better for this bank.

So the bank must make a positive attempt to be more outward looking in their goals and aware what is happening. They must also emphasize on the domestic scenario more closely and analyze any strategies of their competitors. The bank must accept any failures and think of them as an objective to pursue future goals.