Report on Principal and Practice of Banking

Executive Summary:

This report is based on a commercial bank of Bangladesh, Eastern Bank Limited and its main features. This is private commercial bank and doing its job with success for long time.

My selected branch is English Road branch. It is a private commercial bank. The bank has 22 brnches.10 of them re in Dhaka.

According to my investigation the bank is serving people with latest banking services nd introducing different types of deposits nd loans. It is also installing new facilities nd services for us.

In this report, I will show some important highlights and then I will focus on the min features of the bank with details. Lastly I will say some suggestive words after analyzing the activities of the bank.

VISSION:

To become the bank of choice by transforming the way it do business and developing a truly unique financial institution that delivers superior growth and financial performance and be the most recognizable brand in the financial services in Bangladesh.

MISSION:

• It will deliver service excellence to all our customers, both internal and external.
• It will constantly challenge its systems, procedures and training to maintain a cohesive and professional team in order to achieve service excellence.
• It will create an enabling environment and embrace a team based culture where people will excel. It will ensure to maximise shareholder’s value.

PRODUCT:

CURRENT ACCOUNT

EBL Current Account is a non-interest bearing account suitable for both corporate and consumer clients. It allows unlimited cash withdrawal facility for customers from any of the 22 EBL branches across the country. There is a minimum balance requirement of Tk. 1.000.00 for maintaining a current account.

SAVINGS ACCOUNTS

EBL Savings Account is suitably designed to meet the savings requirement of the consumer customers willing to save from their hard earned income. It pays interest at competitive rate matching the needs of the customers. Savings Account is very easy to open and can be operated from any EBL branch giving the customers the demographic flexibility. Minimum balance requirement for a savings account is Tk. 15,000.00.

FIXED DRPOSIT ACCOUNT

EBL Fixed Deposits having flexible tenure ranging from one month to three years allow the customers to get more out of their long term investment. Keeping in mind the income requirement of the customers EBL offers high interest rates. It is very simple to open a fixed deposit account from any EBL branch.

EBL SAVINGS INSURANCE ACCOUNTS

EBL SIA works in a very simple way. All one have to do is to keep a minimum balance for at least one year according to the class of deposit you choose. One can withdraw from this account – at any time – any amount that is above the required minimum balance under your chosen deposit class.

EBL SIA not only pays you interest at the prevailing market rates; it also provides valuable insurance coverage for free corresponding to your deposit amount. This is how SIA differs from other usual savings account

During the time of opening the SIA, ones age should be between 18-59 years, and one should be a citizen of Bangladesh, and in good health. EBL will bear the insurance premium cost for life insurance coverage for a minimum of Tk. 50,000/- & maximum Tk. 1,000,000/- (depending on your chosen class of deposit) and insurance will be provided by American Life Insurance Company (ALICO), one of the largest international life insurance companies in the world.

General information of Savings Insurance Account (SIA):

1. Must be a Bangladeshi citizen
2. Age 18-59 years.
3. Must be in good health
4. Must keep minimum balance ( According to customers chosen SIA deposit Class) for a period of one year
5. Customer must appoint a Nominee
6. Interest will be paid @ savings bank account on SIA Deposits
7. Free Life Insurance coverage through ALICO
8. Auto renewal after one year unless advised otherwise by the customer (Subject to renewal of Master Policy between EBL and ALICO)
9. Withdrawal facility of any amount that is more than the minimum balance requirement
10. Account access from any EBL Branch

Deposit Classes and Insurance Coverage under SIA:

HIGH PERFORMANCE ACCOUNT

If one keeps a minimum balance of Tk.20, 000.00 under this account. It offers very competitive rates that are tiered into two slabs for deposits up to Tk. 10 lacs and above Tk. 10 lacs.
The interest on your account is calculated on a daily basis and added to ones deposit half yearly. If ones deposit goes below the Tk. 20,000 limit on any day then he loses interest for that day.
As the EBL High Performance Account is a hybrid account that conjoins the security and growth of a Savings Account with the convenience of a Current Account one gets more out of his money while he enjoys the convenience of unlimited cash withdrawal.
One gets the highest interest rate on his deposit compared to other similar accounts on offer in the market. EBL High Performance Account is available at all the EBL branches in every major city.

  MONTHLY  INCOME PLAN

EBL Monthly Income Plan is an income plan which helps us to earn a monthly fixed amount on our fixed deposits kept with EBL for a period of 3 years.

All one needs to do is keep TK 50,000/- or multiples of it for a period of 3 years. He will earn TK. 328/-(After deduction of Tax) per month on every deposit of TK. 50,000/-, or TK. 525/-(After deduction of Tax) per month on every deposit of TK. 100,000/- for a period of 3 years. One can open any number of MIP of TK 50,000/- or multiples of TK 50,000/-

Monthly fixed interests will be automatically credited to his linked personal Current /Savings/High Performance account on due date.

General information of Monthly Income Plan (MIP):

1. Easy procedure to open MIP
2. Customer must be a Bangladeshi citizen
3. Over 18 years of age
4. Must be an Account Holder of EBL
5. Customer must appoint a Nominee
6. Minimum balance of MIP is TK 50,000/-
7. Maximum balance any amount in multiples of TK 50,000/
8. A competitive interest rate of 7% per annum.
9. Minimum and maximum period of MIP is 3 years or 36 months
10. Auto renewal of MIP after three years unless advised otherwise by you
11. Upto 90% Loan facility in the form of EBL FastCash/FastLoan against MIP principal amount

12.        Account access from any EBL branch

EBL Monthly Deposit Plan (MDP):

EBL Monthly Deposit Plan is a savings plan which helps one to turn his small monthly savings into a large amount over a period of 5 years. It is a convenient savings mode which helps people’s money to grow. To open a Monthly Deposit Plan all one needs to do is choose any of the six monthly deposit amount options. One may choose more than one Monthly Deposit Plan of different denomination.

One does not have to turn up to the branch for monthly deposit payments. Monthly deposit will be automatically debited from his linked Current/Savings/High Performance account by standing instruction on due dates.

General information of Monthly Deposit Plan (MDP):

1. Easy procedure to open MDP
2. Must be a Bangladeshi citizen
3. Over 18 years of age
4. Must be an Account Holder of EBL
5. Customer must appoint a Nominee
6. Minimum monthly deposit amount is TK 500/-
7. Maximum monthly deposit amount is TK 5,000/-
8. Other Monthly Deposit options are TK 1,000/-, TK 2,000/-, TK 3,000/- & TK 4,000/-
9. Minimum and maximum period of MDP is 5 years or 60 months
10. A competitive interest @ 7.00% compounded monthly
11. Up to 80% Loan facility in the form of FastCash/FastLoan against MDP Deposits after 2 years

      12.     Account access from any EBL Branch

EBL Fast Cash :

EBL Fast Cash is a revolving credit facility. FastCash allows the customer to draw up to a predetermined amount of credit from their Current Account. Customers will only be charged interest for the amount they draw. The minimum limit for EBL FastCash is Tk. 50,000.00

General information of EBL FastCash:

       1. Simple documentation to avail FastCash
2. One must be a Bangladeshi citizen
3. Over 18 years of age
4. One must be an Account Holder of EBL
5. Minimum overdraft limit is TK 50,000/-
6. Maximum overdraft limit is TK 5,000,000/-
7. EBL FDR interest rate + 2.75%: For others
securities 11.00% per annum
8. Interest is charged only on the withdrawn amount
9. Loan is sanctioned within 24 hours of application
10. Up to 90% loan facility of the offered security
11. Loan tenure is one year which is renewable
12. Account access from any EBL branch

 Accepted Securities:

EBL Fixed Deposit Receipts (FDR)

ICB Unit Certificates

                      Wage Earners Development Bonds

EBL Fast Loan :

Fast loan is a short term loan facility from EBL. This loan is fully secured against cash security (EBL FDR, ICB Unit certificates etc.). EBL Fast Loan has convenient repayment period ranging from 12/24/36 EMI’s. EBL FastLoan is priced at competitive rates and loan is sanctioned within 24 hours of application

General information of EBL FastLoan:

1. Simple documentation to avail FastLoan
2. One must be a Bangladeshi citizen.
3. Over 18 years of age
4. One must be an Account Holder of EBL
5. Minimum loan amount is TK 50,000/-
6. Maximum loan amount is TK 5,000,000/-
7. EBL FDR interest rate + 2.75%: For others securities 11.00% per annum
8. Loan is sanctioned within 24 hours of application
9. Flexible loan tenure ranging from minimum one year to maximum three years
10. Easy repayment by Equal Monthly Installments (EMI)
11. Automatic EMI deduction
12. Up to 90% loan facility of the offered security
13. Account access from any EBL branch

Accepted Securities:

1. EBL Fixed Deposit Receipts (FDR)

2. ICB Unit Certificates

3. Wage Earners Development Bonds

EBL Executive Loan:

EBL Executive Loan is any purpose EMI (equated monthly installment) based credit facility for salaried executives.

No Cash Security No Down payments No Price Quotation/ Invoice required

Amount: Maximum 6 times gross monthly salary

• Tk. 50,000/- to 10,00,000/- for Salary A/C holders and lien of Terminal Benefits
• Tk. 50,000/- to 6,00,000/- for Salary A/C holders.
• Tk. 50,000/- to 5,00,000/- for loan against Post-dated

             Cheques and 1 Personal Guarantee.

Interest rate:

• 13.25% for Salary A/C holders and lien of Terminal Benefits
• 14.5% for Salary A/C holders
• 15% for loan against Post-dated cheques and 1 Personal
  Guarantee

Tenor:                 12, 24 or 36 months

Eligibility:

Age:                     Between 25 to 52 years

Job experience:  Minimum 4 years of which at least 1 year with current employer.

Income:               Minimum Tk. 15,000/-per month for private
organization and Tk. 10,000/- for government employees

Auto Loan:

EBL Auto Loan is here to help us purchase our dream car. It’s easy and flexible repayment schedule erase our worries about the burden of a loan. Our Auto loan Scheme will allow one to avail credit up to 75% of the car value. We need to be a Bangladeshi national between the age of 25-55, working in a reputed multinational/ local firm or involved in a reputed business.

The maximum repayment period for EBL Auto Loan is 4 years. One can choose 12, 24, 36 or 48 equated monthly installments (EMI) to repay the loan.

Consumer Loan:

EBL Consumer Loan is aimed at solving your personal financial needs. It’s flexible nature allow us to improve your home, office and life style. Its Consumer loan Scheme will allow us to avail credit up to 75% of the price of the item we want to buy.

As a loan customer ine gets to use its online banking services as well. The maximum repayment period for EBL Consumer Loan is 3 years. One can choose 12, 24 or 36 equated monthly installments (EMI) to repay the loan. Its interest rates are competitive in the market. A guaranteed competitive rate .

Loan for Professionals:

EBL Loan for Professionals is meant for the development of our professional life. With a little financial help under EBL’s Loan for Professionals Scheme we can add value to our profession.
If one is a self-employed Doctor, Engineer, Architect, Lawyer, Computer Professional or a Chartered Account, he can buy or import equipment, tools, customized products for use in his chamber. The purchase of the item is expected to directly contribute to the advancement of his professional/ business solution.

One needs to be a Bangladeshi national between the age of 25-60 working in the above mentioned field for at least five years.

Services:

 Locker services:

EBL offers three different types of lockers – small, medium and large. They can be used for the safe keeping of personal belongings (jewelry, documents etc.). However nothing illegal can be kept in the locker. The locker holder has to have an account with EBL to get this service. The yearly rate of the lockers range from the smallest one being TK 1000, the medium one being Tk 1500 and the Large one being TK 2500. This service is available at the following branches of EBL.

1. Dhanmondi
2. Uttara
3. Shantinagar
4. Mirpur
5. Gulshan
6. Sonargaon Road
7. O.R.Nizam Road
8. Rajshahi
9. Bogra
10. Chouhatta (Sylhet)

EBL 5 to 9:

This is a service that gives the customer the option to deposit money in the bank beyond banking hours. All the customer has to do is become a member of the EBL 5 to 9 services by providing a nominal yearly fee. The customer being a member will be given a bag and a lock.

He/she can put in money in the bag lock it and deposit the same in the EBL 5 to 9 safe deposit box kept in the branch any time during 24 hours time. The bag upon deposit in the 5 to 9 deposit box will directly go to the bank’s secured vault. His/her deposit will be credited to the respective account the following day and the deposit bag will be returned to the customer for further deposits in the future.

This is a convenient 24 hour deposit service especially for small traders and shop owners who feels unsafe keeping their money in the shop or carry it home in the night.

Online Banking :

Flexcube@ is the Internet banking solution that delivers the Corporate, Consumer and Investment Banking products to bank’s customers over the Net. Our Internet Banking module is a secure, robust and extensible web banking solution. It is anchored on a reusable component framework that complies with industry standards. Conceived specifically to exploit the potential of the web, its new banking platform delivers a modular solution addressing Consumer, Corporate and Investment Banking. Customers will be able to transfer funds, inquire balance, request for cheque book, pay utility bills on-line etc.

Visa Electron online debit card:

{First time ever in Bangladesh}

EBL Introduces the Visa Electron online debit card:

Unique Features:

1. With EBL Visa Electron one can now draw cash from the Q-cash ATM network, 24 hours a day through out the year. No need to carry excess cash in ones wallet. Ones card is electronically linked to his EBL account.
2. EBL Visa Electron is also accepted at Visa merchants with Electronic P.O.S Visa Symbol, where one can pay for merchandise and services.
3. Acceptance – Hassle free acceptance at network of Q-Cash ATMs currently 10 and to be expanded up to 50 by July 2004 and approximately 1000 POS deployed in major cities.

Photo card – Displays our photo & signature on front of your card for enhanced security.

What else one can do:

1. Account balance checking from ATMs
2. PIN change facility
3. Cheque book request
4. Mini statement inquiry
5. Statement request

Additional EBL services:

1. Avail EBL Internet Banking facility
2. Card for joint account holders as well
3. Real time online transaction.
4. Services of well-trained relationship managers at any of our 22 real-time branches.

ATM Location Details:

1. EBL, Principal Branch, 10 Dilkusha Dhaka
2. EBL, Mirpur Branch, Plot – 14, Main Road -3, Block-A, Sec -11, Mirpur Dhaka
3. EBL, Uttara Branch, Plot- 1A, Road-4, Sector – 4, Uttara Model Town, Dhaka

       Eligibility:

Any EBL account holder can be issued the EBL Visa Electron. If one is an EBL account holder, just drop by at any of its sales and service centers, fill up an Application Form. It will courier your card within 7 working days.

 EBL Visa Electron is the first of its kind in Bangladesh, exactly what we wanted. Become a proud member of EBL card family and discover the vast array of added conveniences- a new dimension in banking!

For More Details: Contact
EBL Cards Division, Head Office,
10 Dilkusha C/A, Dhaka – 1000
Phone: +880-2-7168735 or +880-2-9556360 ext 213,
Web: www.ebl.com.bd

Utility Services Bill Collection:

1. WASA ( only Dhaka)
2. DESA ( Rajshahi, Bogra, Dhaka-Mirpur Branch)
3. PDB ( Chittagong, Rajshahi Jessore)
4. AKTEL

Internet Service Provider Bill

1. Proshikanet
2. Bdcom Online Ltd
3. ConnectBd Ltd
4. Access Telecom (BD) Ltd
5. In-touch Communication Ltd
6. Dhaka Broad Band Network (DBN)
7. Spark System Ltd
8. Agni Systems Ltd
9. Touch Tone Bd Ltd

Tuition Fees Collection:

>Scholastica ( Pvt) Ltd

>Scholastica Transport Service Ltd

>South Breeze

>Mirpur Bangla School

>Aga Khan Education Service System

         >Shahid Smrity School

Student file:

EBL allows students who are going abroad to study to open an account in order to transfer funds to wherever they are going. It takes the step to take the permission (if necessary) from Bangladesh Bank on behalf of the customers. For this it needs all the documents of the student’s previous completed education and his/her (s) acceptance letter from which ever University he/she is going.

2.Corporate Banking:

Corporate Banking is an integrated specialized area of the Bank which addresses the diverse financial needs of Corporate Customers.

Local and Foreign Business Houses (Public and Private Limited Companies), NGO’s , Associations , Not for profit Organizations , Sole Proprietorship Concerns and Various Government Bodies/Corporations etc are considered to be our Corporate Customers .

Corporate Banking has been established in EBL to cope with the banks strategy to transform into a Business Matrix from the existing Geographical Matrix Modules. Corporate Banking Relationship Teams based in Dhaka and Chittagong are available to understand your business and its requirements. They are specialists in developing high quality financial solutions and to assist you in achieving your business objective. Services provided by Corporate Banking are as follows:

• Structuring of Facilities for Corporate Customers.
• Develops understanding of customer businesses and advises Financial Solutions
• Advisory Services/ Financial Consultancy
• Arrange Loan Syndications
• Developing Relationship between the Clients and the Bank
• Processing credit facility requirements and arranging approvals for credit facilities.
• Handles pricing issues and Wallet Sizing Exercises to maximizes the earnings of the Bank as well as of the Client
• Coordinating service delivery of all EBL distribution channels viz.
• Sales and Service centers, Trade Services, Treasury, Credit issues as required for the customer.
• Provides a one stop service for Credit facilities.
• Ensures Corporate customers’ complaints and Service issues are promptly addressed.
• Addresses Credit related issues.
• Coordinates activities of support unit Credit Administration unit which prepares security documentation, security registration, and CIB related issues.

Coordinates activities of operating departments in obtaining Central Bank approvals where necessary.

 3. SME Banking:

Small and Medium Enterprises (SME) in Bangladesh contributed 25% of gross domestic product (GDP) and 80% of the industrial jobs of the country in 2004. According to ADB, the country’s estimated 6 million SMEs and micro enterprises firms of less than 100 employees have a significant role in generating growth and jobs. This is a sector that has its own distinct needs and requires specialized focus. Eastern Bank Ltd. (EBL) has launched SME Banking in early 2005 with this view in mind.

 EBL:

” Provide SMEs with easy access to financing.
” Deliver products that ensure superior returns to our customers.
” Orient customers with industry trends, regulatory issues etc, for their success.
” Value long term relationship banking.

In short, we want to be the partner in your success.

4. Treasury

Treasury unit is a Core banking unit with its leading-edge technology and steadily growing volume of activity in the markets, EBL’s treasury unit and currency dealing desks have consolidated its position as a well-known and well established counterpart in the newly transformed Free Floating rate, dealing daily with a wide circle of both bank and non-bank customers all over Bangladesh. Its everyday business evolves around participation in Money Market & Foreign Exchange Market in a substantial volume.

• Money Market
• Foreign Exchange
• Customer
• Key Areas we focus
• Beyond the rates
• Remittance

 Conclusion:

From the above information’s, we have come to know various important things bout Eastern Bank Limited, English rod branch. This is s successful commercial bank. The bank is operating its operations with great efficiency. But in my opinion it can reach to the top if it takes some steps. These are:-

1.Starting Family Maintenance Deposit

 Under this scheme, one can deposit certain amount of money for five years and in return he will receive benefits on monthly basis. Benefits start right from the first month of opening an account under the scheme and continue upto five years.

2.Starting Double Benefit Deposit Scheme

 Under this scheme, depositor’s money will be doubled in a six-year period.

3.Staring Pension and Family Support Deposit

 Pension and Family Support Deposit can be evolved especially for old age. Under this scheme one can get life long benefit if he deposits specific amount per month for a period of 10 or 15 years. The scheme can also be opened in the name of minors.

4.Consumers’ Credit Scheme

Consumers’ Credit is relatively new field. People with limited income can avail of this credit facility to buy household goods including computer and other consumer durable.

5. Small Loan Scheme

This scheme can be evolved especially for small shopkeepers who need credit facility for their business and cannot provide tangible securities.

6. Doctors’ Credit Scheme
Doctors’ Credit Scheme can be designed to facilitate financing to fresh medical graduates and established physicians to acquire medical equipment and set up clinics and hospitals.

7. Rural Development Scheme
Rural Development Scheme can be evolved for the rural people of the country to make them self-employed through financing various income generating projects. This scheme can be operated on group basis.

8. Women Entrepreneurs Development Scheme
Women Entrepreneurs Development Scheme can be introduced to encourage women doing business. Under this scheme, the Bank can finance the small and cottage industry projects sponsored by women.

9. Car Loan Scheme
Car Loan Scheme can be introduced to enable middle-income people to purchase Cars/SUVs/Jeeps. Government and semi-government officials, employees of autonomous bodies, banks and other financial organizations, multinational companies, reputed private organizations, teachers of recognized public and private universities and businessmen are eligible for the loan facilities

10. Other steps it can take:-

I am giving these suggestions from my view points I m not  professional and I am not experienced in this field, I could be wrong in practical situations. I am suggesting the steps on the basis of other successful bank’s activities.