Introduction

This is an Internship Report. Bachelor of Business Administration (BBA) Course requires a three months attachment with an organization followed by a report assigned by the supervisor in the organization and endorsed by the faculty advisor. I took the opportunity to do my Internship in a banking service provider organization which is the largest and oldest privatesector commercial bank in Bangladesh Uttara Bank Limited Under the proper guidance of onsite supervisor Md. Alamgir Hossain who is the manager of Uttara Bank Limited. I have conducted my study on Commercial Banking operations and services of Uttara Bank Limited. My faculty supervisor Rafiqul Islam professor of daffodil international university also approved the topic and authorized me to prepare this internship report as part of the fulfillment of requirement and gave me proper guidance and assistance over time.

Background of the Study

All over the world the dimension of Banking has been changing rapidly due to Deregulation, Technological innovation and Globalization. Banking in Bangladesh has keep pace with the global change. Now Banks must compete in the market place both with local institution as well as foreign ounces. To survive and thrive in such a competitive banking world, two important requirements are Development of appropriate financial infrastructure by the central Bank and Development of professionalism in the sense of developing an appropriate manpower structure and its expertise and experience. To introduce skilled Banker, only theoretical knowledge in the field of banking studies is not sufficient. An academic course of the study has a great value when it has practical application in real life situation. So, I need proper application of my knowledge to get some benefit from my theoretical knowledge make it more tactful. When I engage myself in such fields to make proper use of my theoretical knowledge in my practical life situation. Such theoretical knowledge is obtained from a course of study at only the half way of the subject matter. Internship implies on other the full application of the methods and procedures implies on the other full application of the methods 1

and procedures through rich acquire of subject matter can be forcefully applied in my day-today life situation. Such a procedure of practical application is known as Internship.

Objective of the Study

The objective of the report is to have a real live exposure in the banking Sector. It will help to develop my knowledge in sector. This practical Orientation gives me a change for the Coordination of theoretical knowledge with the practical experience. The following are of objectives for this practical orientation in bank. To find out the position of Uttara Bank Limited in the banking industry and also find out how its present strategy is working. To analyze the comparative performance of Uttara Bank Limited and some other selected private commercial banks. To know the successive position of each bank. To analyze the banks performance in some key areas. To find out existing problems of the bank. To formulate alternative strategies for solving the problems. To recommend some better solutions for solving the problems. To formulate an implementation plan for the recommended steps. To formulate contingency plan as a safeguard for changing.

Significance of the Study

Historically Bangladeshi bank is huge number of loan. As a result the burden of bad debt has a negative impact of their profitability as well as their new Investment. May Financial Institutions are trying to avoid giving long-term loan to the Industries, especially in new industries. In this situation the concept of Syndicate Financing is new concept in Bangladesh. After successful completion of this study, it can be used to identify the performance of UBL and also invent new technique, which can be used to prevent a good loan to be a classified loan and these technique can also be used in other banks to get the same benefit. 2

Research Methodology
Research Design Both descriptive and exploratory researches have been selected to analyze this paper. Here the researcher discussed the credit appraisal procedure of UBL and critically analyze the appraisal procedure with the standard one. Comparison analysis has also been taken part in this study. Data Collection Procedures There are two main sources of collecting data. To complete this report data has been collected from both primary and secondary sources. The primary data has been gathered by formal discussion with the credit officials and borrowers. Some secondary data has also been collected to make the report more concrete. These data has been collected from different financial statements, annual

Limitations
To prepare this report, I have faced some limitations, which are mentioned below. Limitation of time: It was one of the main constraints that hindered to cover all Aspects of the study. Lack of Secondary: The annual brochure was the main secondary sources of information that was not enough to complete the report and private the reader a clear idea about the bank. Limitation of the Scope: While collecting data, they did not disclose much information due to the confidentially of the organization.

Evolution and Development of banking system in Bangladesh

Evolution of Bank The modern banking system is an evolutionary growth right from the Middle Ages. The genesis of modern bank lay in the functions performed by the Merchant with wide reputation commanding confidence far and near could easily finance domestic and foreign trade. The famous merchant houses established branches to trade centers at home and abroad began to use credit devises to accommodate their customers Jagath Seth, for example, had his branch office in London in the 18th century. Even earlier the indigenous hounds, which finance domestic trade in India was the innovations of the local merchants. In this credit operation in these credit operations in the ancient merchant houses lay the germs for the development of the important credit instrument lately known as bill of exchange and these merchants were virtually forerunner of the modern exchange banks. The second ancestor of banks was the moneylender. The moneylender thus was an embryonic banker performing duel functions lending money and mobilization of savings. Exactly the modern bank does this as a lineal descendant of the ancient moneylender. The third in the chain of ancestors stood the goldsmith have safe vaults for the safe upkeep or their gold stocks. They were the embodiments of safety and security. Naturally, people with valuables and jewelers approached goldsmiths for safe custard. Initially the goldsmiths charged commission for safe upkeep. The practice later on changed as the goldsmith utilized the deposits for earning profits. A modern Bank then comes in itself the functions of all the there ancestors like the merchant it makes a specialty of financing foreign trade like the money lender collects savings and end like the goldsmith provides a convenient mechanism by which people can make payments to each other.

Development of banking in Bangladesh

Bank system was practiced in the Indian subcontinent from the ancient period. In Indian subcontinent merchants, goldsmith moneylenders were the primary bankers. During the Moghal period banking and credit business was enchanted rapidly. Then the agency house of jagth Seth was similar to the merchant house of Lombardy Street. In 1700 AD Hindustan Bank was established as the first joint stock bank. In 1784 Bengal Bank and in 1786 General bank of India was lunched. Then both the bank absolved respectively in 1793 and 1832.

During the early period of Nineteenth century in 1806 Bank of Bengal in 1840 Bank of Bombay and in 1843 Bank of Madras was established. These Banks were called Presidency Bank. Then in 1920 these three banks merged to Imperial Bank of India. In 1947 after the separation bank business in our country faced a severe disaster as non Muslim Bankers left to India. Then Reserve bank of India acted as the Central Bank of Pakistan in 1948 to rebuild the Bank Business State Bank of Pakistan was established as central bank of Pakistan.

In 1971 Bangladesh became independent. After liberation Bangladesh Bank was automated with the assets and liabilities of former State Bank of Pakistan. It is the central bank of Bangladesh. During Pakistan period in our country there were 1090 branches of 12 commercial banks. Three foreign banks were also active with 14 branch offices. Before liberation 80% of banking activities of our country was controlled by Pakistan. Consequently Bangladesh traders and industrialists didnt get notable help from the Commercial Banks. After liberation reformed the destroyed economy on 26th March 1972 the banking sector of Bangladesh was nationalized. After nationalization government of Bangladesh changed the entire bank to six banks which are Sonali Bank, Rupali Bank, Janata bank, Agrani Bank, Pubali Bank & Uttara bank. their role in development of trade and commerce of Bangladesh as well as in the development of economy.

Banking Structure in Bangladesh

Banking system of Bangladesh comprises of different types of bank and financial institutions. The name of our central bank is Bangladesh Bank it is the director and regulator of banking system of Bangladesh. Banking structure in Bangladesh is briefly described below. Bangladesh Bank is the central bank of Bangladesh. It is director of money market in Bangladesh. It regulates the activities of other banks of Bangladesh through credit control, exchange control etc. Commercial bank both the public and private sectors of commercial bank are active in Bangladesh. There are 4 nationalized commercial banks- Sonali Bank, Rupali Bank, Agrani Bank, Janata bank. In 1983 priority gives on private sector of banking business. As a result two nationalize bank was handed over to private sector, which are Pubali and Uttara bank and now Rupali bank is supposed to hand over in the private sector. Now in our country a large number of private banks are doing banking business.

Hierarchy Analysis

At present there are 51 scheduled banks operating all over the country. Out of these, 9 are state-owned (including five specialized banks), 29 are private commercial banks and the rest 13 are foreign commercial banks. Private commercial banks are divided into three groups according to their commencement of business. They are familiar in the name of 1st generation, 2nd generation and 3rd generation banks.

1st Generation Banks (Established 1982-1988):

National Bank Ltd, The City Bank Ltd , United Commercial bank Ltd, AB Bank Ltd, IFIC Bank Ltd , Islami Bank Bangladesh Ltd and Al-Baraka Bank Ltd . 2nd Generation Banks (Established 1992-1996):

Eastern Bank Ltd, NCC Bank Ltd, Southeast Bank Ltd, Dhaka Bank Ltd, Al Arafah Islami Bank Ltd, Social Investment Bank Ltd and Dutch-Bangla Bank Ltd. 3rd Generation Banks (Established 1999 to present):

Mercantile Bank Ltd, Standard Bank Ltd, One Bank Ltd, EXIM Bank Ltd, Premier Bank Ltd, Mutual Trust Bank Ltd, First Security Bank Ltd, Bank Asia Ltd, The Trust Bank Ltd, Jamuna Bank Ltd, BRAC Bank, and Shahjalal Islami Bank Ltd.

ORGANIZATIONAL PART

Deposit Schemes
Foreign currency Non- Resident Foreign Currency deposit Account (NFCD). Foreign Currency Account. Resident foreign Currency Deposit Account (RFCD). Local Currency Savings Account. FDR Account. STD Account. Loan/Advances Schemes Consumer Credit Scheme. Personal Loan Scheme. International Banking Treasury and Dealing room. Lease financing. Home Remittance.

UTTARA BANK AT A GLANCE

Uttara Bank is one of the largest and oldest private-sector commercial bank in Bangladesh, with years of experience. Adaptation of modern technology both in terms of equipment and banking practice ensures efficient service to clients. There are some also key related information about this particular bank are given in below. UBL is one the largest private banks in Bangladesh. It operates through 211 fully computerized branches ensuring best possible and fastest services to its valued clients. The bank has more than 600 foreign correspondents worldwide and total number of employees nearly 3562. The Board of directors consists of 14 members. The banks is headed by the Meaning Director who is the Chief Executive Officer The head office is located at Banks own 18-storied building at Motijheel, the commercial center of the capital, Dhaka.

UBL Networks Corporate offices (corporate branch & Local office) Regional office Worldwide affiliates Total Branches (including corporate branch & local office) Authorized Dealer Branches Treasury & Dealing Room Training Institute Man power Figure : Recent survey shows that UBL Networks in Bangladesh

2 12 600 211 38 1 1 3562

UTTARA BANK LIMITED AND ITS SUBSIDIARY CONSOLIDATED BALANCESHEET AS AT 31 DECEMBER 2011 Amount in Taka

10

Notes

2011

2011

PROPERTY AND ASSETS

Cash: Cash in Hand (including foreign currencies) Balance with Bangladesh Bank and its agent Bank(s) (including foreign currencies) Balance with other Banks and financial institutions : In Bangladesh Outside Bangladesh Money at call and short notice 4.00 5,366,014,413 4,976,518,084 389,496,329 22,894,749,80 8 22,735,889,054 158,860,754 54,010,287,47 6 49,384,251,667 4,626,035,809 429,875,944 33,337,210 396,538,734 3.00 6,770,218,585 1,550,160,241 5,220,058,344 6,636,972,108 1,294,274,237 5,342,697,871

5.00

Investments: Government Others

6.00

18,591,127,858 18,429,298,854 161,829,004

Loans and Advances: Loans, cash credits, over drafts etc. Bills purchased and discounted Fixed assets including land, building furniture and fixtures

7.00

48,672,687,127 44,372,359,512 4,300,327,615

8.00

2,762,228,892

2,798,141,777

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Performance of UBL GENERAL BANKING

General Banking Meeting day to day banking General Banking Department usually performs a lot of important banking activities. General banking department is that department which is mostly exposed to the maximum number of bank customers. It is the introductory department of the bank to its customers. All business concerns earn a profit through selling either a product or a service. A bank does not produce any tangible product to sell but does offer a variety of financial services to its customers. The Jatrabari branch of UBL has all the required sections of general banking and these sections are run by manpower with high quality banking knowledge. Hence, a touch of rich customer service is prevailing in the branch. In UBL the following departments are under general banking section: Account opening department. Local remittance department. Cash department. Clearing department. Collection department. In the following Chapters brief discussion on the above departments are presented respectively.

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Account Opening Department

Communication with the Client The relationship between a banker and his customer begins with the opening of an account by the former in the name of the latter. Initially all the accounts are opened with a deposit of money by the customer and hence these accounts are called deposits accounts. Banker solicits deposits from the members of the public belonging to different walks of life, engaged in numerous economic activities and having different financial status. There is one officer performing various functions in this department. Functions of the Department The following are the main functions performed by the department: (i) Accepting of Deposit (ii) Opening of Account (iii) Check Book issue (iv) Transfer of an Account (v) Closing of Account Accepting of Deposits Deposits are life-blood of a commercial bank. Without deposits there are no businesses for the commercial banks of any nature (NCBs, PCBs or FCBs). In this branch the various types of accounts are offered to various customers, which are grouped into: A. Demand deposit account. B. Time deposit account. Demand Deposit Account The amount in accounts are payable on demand so it is called demand deposit account. The following accounts are under demand deposit accounts: 1. Current account. 2. Savings account. 13

3. Short Notice Term Deposit (STD) Current account: This type of account is opened by both individuals and business concerns. Frequent transactions (deposits as well as withdrawal) are allowed in this type of account. A current a/c holder can draw checks on his account for any amount for any numbers of times in a day as the balance in his account permits. This account provides no interest. The minimum balance to be maintained is Tk. 2000. No new account can be opened with a check. Savings Account Individuals for savings purposes open this type of account. Current Interest rate of these accounts is 5.50 % per annum. A minimum balance of Tk. 1000 is required to be maintained in a SB account interest on SB account is calculated and accrued monthly and credited to the account half yearly. Interest calculation is made for each month on the basis of the lowest balance at credit of an account in that month. A depositor can withdraw from his SB account not more than twice a week up to an amount not exceeding 25% of the balance in the account. 3. Special Notice Term Deposit (STD): The deposits in this account are withdrawal on prior notice varying from 7 to 29 days and 30 days or more. The interest is paid on the balance of the account. Current interest rate is 6.50% per annum. Opening Procedure For opening such A/C, application in the prescribed form along with a set of specimen signature duly verified by Bangladesh mission abroad or by a reputable bank of any other person known to the bank, should be obtained by the brandies. In case of persons, already maintain any F.C A/C or N.F.C.D. A/C with them, reference to that F.C A/C will serve, the purpose of introduction, the branch may verify the signature from the specimen signature and already available with them. Only one such F.C A/C can be maintained and the balance in the A/ C should not exceed $ 30.000/- or equivalent pound sterling at any one time. The A/C holder is also required to submit photocopies of passport, visa, and work permit/contract. As this is a current account no Interest is paid to the A/C holder.

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Time Deposit Account The amount in this a/c is payable only after stipulated time. The following accounts are under time deposit a/c: (a) Fixed Deposits which are repayable after the expiry of fixed period and are negotiable. (b) Bearer Certificate of Deposits (BCD), which are repayable after expiry of fixed period. (c) Non-resident Foreign Currency deposits are term deposits maturing after 1 month, 3months, 6months and 1 year. This a/cs can be opened either in U.S. dollar or pound sterling. No interest is paid in case of premature encashment. Fixed Deposit Account These are deposit, which are made with the bank for a fixed period specified in advance. The band need not maintain each reserve against these deposits and therefore, bank gives high rate of interest on such deposits. A FDR is 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. Rate of Interest Interest Rate on Deposits: Savings Deposits Special Notice Deposits (STD) Fixed Deposit (Time Deposits) a) 3 (three) Months b) 6 (six) Months c) 1(one) Year d) 2(two) Years and above e) 3(three) years 5.50% 6.50% 12.50% 12.50% 12.50% 12.50% 12.50%

Table: Interest rate on deposits

15

Opening of Account
It includes the following stages:

Account opening procedure Classification of customers

Account opening procedure

Documents needed for each Account Separately: Current/Saving Deposit Accounts: 1. Savings Accounts: 1. An existing Current Account holder of the Bank, 2. 3. 2. Current Account: Proprietorship Firm: a) Name of authorized persons, designation, specimen, signature Card. b) Trade License. c) Passport/ Chairman Certificate. Partnership Firm: a) Account must be opened in the name of the firm. b) The form should describe the names and addresses of all the partners. c) Trade License from city corp. is needed. d) Partnership Deed and letter of authority is achieved Limited Company: a) Certificate of incorporation. b) Certificate of Commencement of Business. c) Form XII. d) Memorandum of Association. e) Article of Association. 16 Photocopy of Passport / Chairman/Conditioner Certificates. Two (2) copied of Passport size photograph.

f) Power of attorney. g) Resolution of the Board of Director s authorizing opening of an account. Societies/Club/Associations: Other than above-mentioned common documents resolution of who will operate the account must be noted. Applicant fills up the application in the prescribe form He is requested to fill up the specimen signature Card An account holder needs introduction From an account holder.

The authorized officer scrutinizes the After depositing cash, introduction and checkbook is issued examines the document Fig: Flow Chart of Account Opening Procedure Issuance of deposit slip and the deposit must be made in cash

Classification of customers
It includes the following: a) Individual (personal) b) Proprietorship (Sole traders) c) Partnership firms (Registered or Unregistered) d) Joint stock Companies (Private Limited companies/Public ltd.) e) Public Sector Corporations f) Municipalities/Municipal Corporations /Local Bodies etc. g) Clubs/Societies/Associations/Schools/Colleges/ Universities etc. h) Executors/Administrators i) Trustees j) Illiterate persons k) Constituted Attorney and Wage Earners. Issue of Cheque Book Issue of Fresh Check book

17

Fresh checkbook is issued to the account holder only against requisition on the prescribed requisition slip attached with the checkbook issued earlier, after proper verification of the signature of the account holder personally or to his duly authorized representative against proper acknowledgment. Requisition Slip Filled Up Properly Along With The Checkbook Number Banker Issuance New Cheque Book If Every.Think In The Right Form

Banker Verifies The Slip

Enter The New Cheque Book Number In The Register Book Against The Specific Customers Name Figure: Issuance of fresh Check Book B. Issue of Duplicate check book Duplicate checkbook in lieu 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 Performa agreeing to indemnify the Bank for the lost checkbook. Fresh check 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 Excise duty only with prior approval of manager of the branch. Check series number of the new checkbook should be recorded in ledger card signature card as usual. Series number of lost checkbook should be recorded in the stop payment register and caution should be exercised to guard against fraudulent payment. Account Transfer The customer submits an application mentioning the name of the branch to which he wants the account to be transferred. His signature cards, advice of new account and all relevant documents are sent to that branch through registered post with acknowledgment the balance standing at credit in customers account is sent to the other branch through Inter Branch Credit Advice (IBCA). Closing of Account 18

The following circumstances are usually considered in case of closing an account or justifying the stoppage of the operation of an account: Notice given by the customer himself or if the customer is desirous to close the account. Death of the customer. Customers insanity and insolvency. If the branch finds that the account is inoperative for a long period. If Garnishee Order is issued by the Court of Law on the bank branch.

A customer can close out his A/C at any time by submitting an application to the branch. Upon the request of a customer an account can be closed. After receiving an application from the customer to close an Account, the following procedure is followed by a banker. The customer should be asked to draw the final cheque for the amount standing to the credit of his a/c less the amount of closing and other incidental charges and surrender the unused cheque leaves. The a/c should be debited for the account closing charges etc. and an authorized officer of the Bank should destroy unused cheque leaves. In case of joint a/c the application for closing the a/c is to be signed by all the joint holders even if the A/C- is operate by either of them. The last check for withdrawal of the available balance in the A/C is to be signed by all the joint holders.

Local Remittance Department Banking for Common People UBL has its branches spread throughout the country and therefore, it serves as best mediums for remittance of funds from one place to another. This service is available to both customers and non-customers of the bank. The department, which provides the facility, is known as local remittance department. Functions of the Local Remittance Department The following are the main functions performed by the credit department: (a) Issuing & Payment of Demand Draft. (b) All related correspondence with other Branches & 19

(c) Compliance (d) Balance of D.D. payable & D.D. Paid with advice (e) Attached to Sanchaya Patra and Wage Earners Development Bonds. (f) Payment of Incoming TT. (g) Issuing, encashment of Pay Order and maintenance of record and proof sheet. (h) Issuing and encashment of all kinds of Sanchaya Patras and wage Earners Development Bond. (i) All related statements & correspondences with Bangladesh Bank & other Branches. (j) Issuance of Local Drafts (k) Issuing and encashment of BCD. (l) All related correspondences. (m) Issuing of Outgoing TT. (n) Issuance of Local Drafts. (o) Issuance of T.T. ICA. IBCA & IBDA Transaction Types Collection of Cheque Up to TK. 25,000 @ .15%, Minimum TK. 10. Above Tk.25, 000- 1,00,000, @ .15% Minimum Tk.50. Above 1,00,000-5,00,000 @ .10%, Minimum Tk.150. Above 5,00,000 @ .05%, Minimum Tk.600-Maximum 1,200

20

Dank Charge For Issuing DD @ .15% Minimum Tk. 25. Cancellation of Pay order Up to Tk. 500--------------Tk.10. Above Tk. 500-------------Tk.25. Rate of Govt. Excise Duty for a financial year Tk.10,000---------------------------------------Tk.0 Tk.10,000-1,00,000--------------------------Tk.120. Tk.1,00,000-10,00,000----------------------Tk.250. Tk.10,00,000-1,000,000---------------------Tk.550. Tk.1,000,000-5,000,000---------------------Tk.2500. Above Tk.5,000,000-------------------------Tk.5000. Remittance of Fund Any one of the following methods may make remittance of funds from one place to another. 1) 2) 3) Telegraphic Transfer (T.T) Demand Draft (D.D) Pay order (P/O)

Telegraphic Transfer (T.T) It is an order from the Issuing branch to the Drawee Bank /Branch for payment of a certain sum of money to the beneficiary. Telex/ Telegram sends the payment instruction and funds are paid to the beneficiary through his account maintained with the Drawee branch or through a pay order if no a/c is maintained with the drawee branch. T.T Issue Process: 1. The Applicant fill up the relevant part of the prescribed Application form in triplicate duly signs the same and gives it to the Remittance Department.

21

2. Remittance Department will fill up the commission part meant for Bank's use and request the Applicant to deposit necessary cash or check at the Teller's Counter. 3. The Teller after processing the Application form, Cash or check will validate the Application form .The first copy is treated as Debit Ticket while the second copy is treated as Credit Ticket and sent to Remittance Department for further processing. The third copy is handed over to the applicant as customers copy. 4. Remittance Department will prepare the Telex/Telegram in appropriate form, sign it and send it to the telex Operator/Dispatch Department for transmission of the message. 5. Remittance Department will prepare the necessary advice 6. Debit Advice is sent to the client if clients a/c is debited for the amount of T.T 7. Debit ticket is used to debit the client's account if necessary. 8. T.T Confirmation Advice is sent to the Drawee Branch. 9. Credit Ticket (2nd copy of the Application Form) is used to credit the UBL General Accounts. b) Accounting Entry Dr. Cash /client's A/C Cr. UBL General A/C Cr. Communication. Cr. Commission. c. Payment of T. Ts: On receipt of T.T payment the Drawee branch passes Instructions the following entries if the T.T is found to be correct on verification of Test Number. 22

i. Dr. UBL General A/c Cr. Remittance Awaiting Disposal- T.T Payable A/c ii. Dr. Remittances Awaiting Disposal -T.T Payable A/c Cr. client's Account /P.O. A/C. In case the beneficiary does not maintain any a/c with the Drawee branch a P.O is issued in favor of the payee and sent to his banker/local address as the case may be. Every branch maintains a prescribed T.T. Payable Register. All the particulars of T.Ts are to be properly recorded in this Register duly authenticated. A separate type of T.Tconfirmatory advice is sent to the Drawee branch on the same day. On receipt of the T.T Confirmatory advice/ confirmation copy of Telegram from the Issuing branch, the particulars of the T.T are verified with reference to particulars already recorded in the T.T payable Register. The Confirmatory advises are kept attached with the relative Ticket No further responding entry is required to be passed on receipt of such confirmation copy. On payment of T.T the particulars are to be incorporated in the Extracts of Responding Debit entries as usual and sent to HORC.

23

Demand Draft (D.D) Local Draft is an instrument containing an order of the Issuing branch upon another branch known as Drawee branch, for payment of a certain sum of money to the payee or to his order on demand by the beneficiary presenting the draft itself.

Application submitted to Branch

Issuing Branch prepares DD Fig: Flow Chart for a DD

Branch gives DD to Purchaser

Purchaser sends DD to Payee

Payee Presents DD to Branch

Paying Branch pays the amount

24

a. Process of Issuing a Demand Draft: 1. Get the Application form properly filled up and signed by the applicant. 2. Complete the lower portion of the Application Form meant for Bank's use. 3. Calculate the Total taka amount payable including Bank's commission /charges etc. 4. If a cheque is presented for the payment of the D.D officer should get the check duly passed for payment by the competent authority and record the particulars of D.D on the back of the cheque. 5. If the purchaser desires his account with the branch to be debited for the amount of D.D the officer should get the A/C. holders signature verified properly, from signature card on record of the branch and debit client's a/c for the total amount including commission/ charges etc. 6. If cash deposit is desired, request the purchaser to deposit the money at the Tellers Counter. The Teller, after processing the Application Form, Cash or Cheque, will validate the Application form. 8. The first copy of the Application form is treated as Debit Ticket while the second copy is treated as Credit Ticket and sent to Remittance Department for further processing. The third copy is handed over to the Applicant as customer's copy. 9. Each branch maintains a running control serial number of their own for issuance of D. D. on each Drawee branch. This control serial number should be introduced at the beginning of each year, which will continue till the end of the year.

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b. D.D Issue Register: The Remittance Department maintains prescribed D.D Issue Register. All the required particulars of all D. Ds issued should be entered in that Register duly authenticated. Separate folios are opened for each Drawee Branch. While issuing local Drafts of TK.50, 000/- and above, branches shall put a test number in RED INK on the upper portion of the drafts so that the Drawee branch can immediately make payment of the D.D on presentation after getting the Test agreed, if otherwise found in order. c. Issue of Duplicate Draft: Duplicate D.D should not normally be issued unless thoroughly satisfactory evidence is produced regarding loss of a draft. If the D.D is reported lost/stolen, a duplicate draft may be issued by the Issuing branch on receipt of a written request from the purchase. d. Cancellation of Demand Draft (DD): The following procedure should be followed for cancellation of a D.D: 1. The purchase should submit a written request for cancellation of the D.D attaching therewith the original D.D. 2. The signature of the purchase will have to be verified from the original application form on record. 3. Manager /Sub -Manager's prior permission is to be obtained before refunding the amount on cancellation. 4. Prescribed cancellation charge is to be recovered from the applicant and only the amount of the draft less cancellation charge should be refunded. Commission/Postage etc. charge recovered for issuing the D.D should not be refunded. 5. The D.D should be affixed with a stamp Cancelled under proper authentication and the authorized officer's signature on the D.D should also be cancelled with

26

Red in but in no case should be torn. The cancelled D.D should then be kept with the relevant Ticket. 6. The original entries are to be reversed giving proper narration. An IBDA for the cancelled D.D should be issued on the Drawee branch. 7. Cancellation of the D.D should also be recorded in the D.D Issue Register. e. Payment of D.D: 1. On receipt of Credit Advice (IBCA) from the Issuing branch the following responding entries are then be passed by the Drawee branch. Dr. UBL General A/c Branch Cr. Remittance Awaiting Disposal D.D payable A/c Extracts of responding entries are to be sent to HORC on the same day. 2. When a D.D is presented for payment at the paying branch its details are to be carefully examined with references to the following points: a. Whether the draft is drawn on their branch. but to be paid to his account with a bank. b. Two authorized officials of the Issuing branch must have signed draft. Their signatures are to be verified from specimen signature book let to be sure that the draft is genuine. The verifier should put his initials in red ink against the authorized signatures in the draft. c. Endorsement on the back of the draft must be regular in case the draft is presented through clearing. The amount of the draft should not exceed the amount protect graphed /written in red ink on the top of the draft. Whether the draft is

crossed or not Amount of a crossed draft is not paid in cash to the payee

27

d. The payee is to be properly identified in case of cash payment. The particulars of the draft i.e. the draft number date amount and the name of payee, should be verified from the D.D payable Register. 3. On payment the D.D is affixed with the branches Paid stamp and signatures there on are cancelled with red ink. The date of payment is recorded in the D.D payable Register necessary accounting entries are also passed and recorded in the books of Accounts
Receives Money DD Presented

Issuing Branch

Sends Advice of Drawing

Paying Branch

Issues DD

Payment of DD Fig : Flow Chart of DD Payment f. Accounting Entries: With IBCA: Dr. Remittance Awaiting Disposal D.D payable a/c Cr. client's Account/Teller's Cash. Without IBCA: A. Dr. D.D paid without Advice a/c Cr. Client's a/c/Teller's Cash. B. After receiving the IBCA I. Dr. UBL General A/c Cr. Remittances Awaiting Disposal - D.D payable A/c ii. Dr. Remittances Awaiting Disposal - D.D payable A/c Cr. D.D Paid without Advice A/c. 28

Pay Order a. Pay Order Issue Process: For issuing a pay order the client is to submit an Application to the Remittance Department in the prescribed form (in triplicate) properly filled up and duly signed by applicant. The processing of the pay order Application form, deposit of cash/cheque at the Teller's counter and finally issuing an order etc, are similar to those of processing of D.D. Application. As in case of D.D each branch should use a running control serial number of their own for issuance of a pay order. This control serial number should be introduced at the beginning of each year, which will continue till the end of the year. A fresh number should be introduced at the beginning of the next calendar year and so on. b. Charges: For issuing each pay Order commission at the rate prescribed by Head Office is realized from the client and credited to Income A/c as usual. c. Entries: Dr. Teller's Cash /Client's a/c ---------------------------------------------------------Debit Cr. pay Order a/c. ---------------------------------------------------------------------- Credit Cr. commission a/c. --------------------------------------------------------------------Credit d. Refund of Pay Order: The following procedure should be followed for refund of pay order by cancellation: 1. The purchase should submit a written request for refund of pay order by cancellation attaching therewith the original pay order. 2. The signature of the purchaser will have to be verified from the original application form on record. 3. Manager/ Sub-manager's prior permission is to be obtained before refunding the amount of pay order cancellation.

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4. Prescribed cancellation charge is to be recovered from the applicant and only the amount of the pay order less cancellation charge should be refunded. Commission recorded for issuing the pay order should not be refunded. 5. The pay order should be affixed with a stamp ''cancelled'' under proper authentication and the authorized officer's signature of the pay order should also be cancelled with RED ink but in no case should be torn. The cancelled pay order should be kept with the relevant Ticket. 6. The original entries are to be reversed with proper narrations. 7. Cancellation of the Pay Order should also be recorded in the pay order Issue Register.

Cash Department
Front Office Operation The cash department deals with all types of negotiable instruments, cash, and other instruments and treated as a sensitive section of the bank. Now a day in modern banking cash department is also known as front office. Functions of the Department The following are the main functions performed by the department: (a) Shall be responsible for all Cash & Cash Items related matters including record keeping of the informations received regarding cash remittances (b) Shall supervise the Cash Remittance under direct guidance of Sub-Manager (c) Shall be responsible for any receipts and payments as per circular issued from time to time. And keeping liaison with the Bangladesh Bank, Cash department. Cash Payment

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Cash payment of different instruments is made in the cash section. Procedure of cash payment against cheque is discussed under elaborately. Cash payment of cheque includes few steps: 1) First of the entire client comes to the counter with the check and give it to the officer in charge there. The officer checks whether there are two signatures on the back of the cheque and checks his balance in the computer. After that the officer will give it to the cash in charge. 2) Then the cash in charge verifies the signature from the signature card and permits the officer in computer to debit the clients account by giving posting. A posted seal with teller number is given. 3) Then the cheque is given to the teller person and he after checking everything asks the drawer to give another signature on the back of the cheque. 4) If the signature matches with the one given previously then the teller will make payment keeping the paying cheque with him while writing the denomination on the back of the cheque. 5) Cash paid seal is given on the cheque and make entry in the payment register. There are few things that shall be scrutinized and checked before making payments. i. ii. iii. iv. Name of the drawer Account number Specimen signature The validity of the cheque and make it sure that it is not post dated or undated. v. The amount in words and figures are same.

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Cash Balance calculation The calculation is done by the officer in charge of cash section and then manager or authorized officer will check the balance and sign in the cash balance book. The balance is maintained in the balance book. Opening balance of current day is the closing balance of the previous day. Total receive of the current day is added with the opening balance and total payment is deducted for calculating the closing balance or cash balance. Clearing Department Clearing House Operation According to the Article 37(2) of Bangladesh Bank Order, 1972,the banks, which are the member of the clearinghouse, are called as Scheduled Banks. The scheduled banks clear the chouse drawn upon one another through the clearinghouse. This is an arrangement by the central bank where everyday the representative of the member banks gathers to clear the chouse. Banks for credit of the proceeds to the customers accounts accept Chouse and other similar instruments. The bank receives many such instruments during the day from account holders. Many of these instruments are drawn payable at other banks. If they were to be presented at the drawee banks to collect the proceeds, it would be necessary to employ many messengers for the purpose. Similarly, there would be many chouse drawn on this the messengers of other banks would present bank and them at the counter. The whole process of collection and payment would involve considerable labor, delay, risk and expenditure. All the labor. Risk, delay and expenditure are substantially reduced, by the representatives of all the banks meeting at a specified time, for exchanging the instruments and arriving at the net position regarding receipt or payment. The place where the banks meet and settle their dues is called the Clearinghouse.

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Functions of the Department

The following are the main functions performed by the department: a) b) c) d) Pass outward instruments to the Clearing-House. Pass inward instruments to respective department. Return instruments incase of dishonor. Prepare IBCA or IBDA for the respective branch and HO. Accounting Entries of Clearing Department The following entries are given if the cheques are honored, Customer A/C ________________________Debit UBL General A/C _________________________Credit UBL Principal Branch clears its cheques through the Head Office as well as the cheques of other branches, because it is only permitted. The other branches send the instruments through I.B.D.A UBL Principal Branch acts as an agent in this case. For this concern branch gives the following entries, UBL General A/C__________________Debit Customers A/C____________________________Credit If the instrument is dishonored, the instrument is returned to the concerned branch through I.B.D.A. along with the following entries, Incase of return(For Inward instrument) UBL General A/C ____________________ Debit Customers A/C _______________________________Credit. In case of return(For Outward instrument) Customer A/C _________________________Debit UBL General A/C___________________________Credit. In case of returning an instrument the respective officer usually looks for following reasons, Account closed Insufficient fund Not arranged for 33

Payment stopped Refer to drawer Effects not cleared may be presented again Amount in words and figures differs Drawers signature differs Alteration require drawers full signature Mutilation requires drawers confirmation Cheque post dated out of date Date incomplete/missing Payees endorsement require/ irregular Payees endorsement requires bank confirmation Clearing house stamp missing Not drawn on UBL Present through banker.

If the check is dishonored due to insufficiency of funds, UBL charges TK. 50/- as penalty.

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Bills & Cheque Collection Checks, drafts etc. are drown on bank located outside clearing house are sent for collection. Principal Branch collects its clients above-mentioned instruments from other branches of UBL and branches other than UBL. In case of out ward bills for collection customers account is credited after finishing the collection processor. And in case of in ward bills customers account is debited for this purpose. So it place dual role as follows: i) Collecting Banker ii) Paying Banker. There is one officer working over desk in this department. Functions of the Department The following are the main functions performed by the department: a) b) c) d) Preparing of Outward and Inward Collection Item. Inter-Branch Transfer. Batch posting and checking as and when required. Other works as and when require. Applicability of Collection Collection is done when: (i) Paying Bank is located out side Dhaka City. (ii) Paying Bank is other branches of UBL situated inside Dhaka City. Paying Bank is Outside Dhaka City Collection department of Principal Branch, UBL sends outward bills for collection (OBC) to the concerned paying bank to get inter Bank Credit Advice (IBCA) from paying Bank. If the paying bank dishonors the instrument, the same is returned to principal Branch. (ii)The Paying Bank of their Own Branches Inside Dhaka City Collection Department sends transfer delivery item to other branches of same bank situated inside Dhaka City. Upon receiving IBCA customers a/c is credited. 35

Daily Task The routine daily tasks of the Accounts Department are as follows: 1.Recording the transactions in the cashbook. Recording the transactions in general and subsidiary ledger. 2.Preparing the daily position of the branch comprising of deposit and cash. 3.Preparing the daily Statement of Affairs showing all the assets and liability of the branch as per General Ledger and Subsidiary Ledger separately. 4.Making payment of all the expenses of the branch. Recording inters branch fund transfer and providing accounting treatment in this regard. 5.Checking whether all the vouchers are correctly passed to ensure the conformity with the Activity Report; if otherwise making it correct by calling the respective official to rectify the voucher. 6.Recording of the vouchers in the Voucher Register. Packing of the correct vouchers according to the debit voucher and the credit voucher. Periodical Task The routine periodical tasks performed by the department are as follows: 1. Preparing the monthly salary statements for the employees. 2. Publishing the basic data of the branch. 3. Preparing the weekly position for the branch which is sent to the Head Office to maintain Cash Reserve Requirement (C.R.R) 4 . Preparing the monthly position for the branch which is sent to the Head Office to maintain Statutory Liquidity Requirement (S.L.R) 5. Preparing the weekly position for the branch comprising of the break up of sector wise deposit, credit etc. 6. Preparing the weekly position for the branch comprising of denomination wise statement of cash in tills. Preparing the budget for the branch by fixing the 36

target regarding profit and deposit so as to take necessary steps to generate and mobilize deposit. 7. Preparing an Extract which is a summary of all the transactions of the Head Office account with the branch to reconcile all the transactions held among the accounts of all the branches. Clients services No. of clients of the branch are increases. Branch always well concern no. Of clients and their service level. All the people of the branch take their seats before 15 minutes of starting works and not go out with out authority permission or clients presence. Cash received and payment are made very swift for the clients remittance, both local and foreign, bills collection and payment are swift always cautious about customer seating arrangements, good behavior with entertainment to customer, quick issuing of D, D, T.T.P.O., M.T. quick clearing, forwarding, statements prepared for clients.60% of customer has reliability of its services. Clients satisfactions Branch has achieved significant customer satisfaction through its dedicated services. Customer response regarding different factors of satisfaction is enclosed where shows that average 56% of the customer like the branch for good quality of services. Opinion about location, decoration and surroundings of the branch; Branch has rich decoration (23%), ,surroundings of the branch also goods(37 %), customer somehow satisfied with technology, skilled people, delivery of services (35%) but customer are not feel convenience location.(5%). Branch charge, commission, interest, other charges are also fair for customer (75%). branch has good reputation in the market (45%), and customer are confident always able on its service reliability (67%). In response of the answer of question types of service customer choice in this branch it shows that 60%, customer like foreign business services. In response to the answer of question customer come for banking services it shows that 50% customer come at noon, 58% customer come beginning and end of the months for services. So workload become much at noon, and beginning and end of the month. In res. pones of the answer of question customer problems of the branch it shows that major problem of the branch is no parking facility for customer (70%). Few customers are not feel convenience location of 37

the branch (25%) .In response to the answer of competitive situation of the branch it shows that branch are always better than competitor in terms of good services, quality of services, bank charges, skilled staff, friendly with customer, but has low competitive advantages in modern technology with some up to date like standard chartered, NCC, one bank and others. Suggestion from customer for future improvement, new services, credit cards, suitable location, money automation services, ready cash, car parking facility for customers, attractive decoration, quick delivery of services. Motivation of the Employee Most of the employees are satisfied with management practices, incentive, bonus, working environment of the branch. But few of them have argument about working loads, working hours of the branch. They have to work late hours with out any overtime, incentive. Some of them have argument about training and human development. They need training to adapt with technology that bank has introduced- new way of writing DD, MT.TT.P.O. And other advice. Some of the employees express opinion about changing of the branch and improving their working environment. Most of employees are committed to work more if the authority implement new pay scale for them. In response of the questionnaire concerned with employee feelings it shows that 90% of the people feel very good in the branch 30% people dissatisfied with branch location and hygienic environment. 40% people loss their interest due to high working loads and long duration of works. 60% people are not satisfied with their present remuneration. According to them their pay scale, incentive are not competitive. 80% people claim more increment bonus, and suitable location of the branch. 10% people say teamwork are not properly work here, due to management discriminate attitude towards them. 60% people recommended for modern technology, with training for improving their skills and reduce their working loads.

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Major Problem In General Banking Problem in general banking arises while issuing and responding different types of D.D, M.T, and P.O. T.T, SC.LSC, D.D. IBP, D.D.P. due to different between actual amount and written amount in those botchers. This problem most repeated occurs in general banking for misunderstanding of written amount or not consciously read the amount in words in advice. Another problem is while issuing and responding of M.T, T, T, and same message are sending from different branch. These happen due not use the seal of message confirmation by telephone. Then it needs to send several message and much hazards occurs in reconciliation. Another problem occur due to not getting of advice of Mt., T, T, DD from different branch. And making schedule for reconciliation is not possible for head office. Another problem occur in clean cash when so many Boucher may attach with other categories. Management efficiency of the Branch Management of the branch is very efficient. Discipline is strictly followed in all activities of the branch. Management always followed banks norms, culture, and ethics. Management immediately implements any circular from head office, Bangladesh banks, and finance ministry that appropriate for them. Any types of new technology, new method of written report, submission of statement immediately implement in the branch. Branch manager always concern his duties and responsibility. Always he observes all the officers works in front of their table. In case of any types of error in the works by an officer he immediately take measure to rectify it. Always concern following of banking guidelines in all banking activities. He always concern about customer satisfactions well as entertainment of the valuable clients. In case of any complain form customer in any banking service he accept it and rectify. Always take suggestion from the clients for their future satisfaction. Manager also conscious about employee satisfaction as well as their claims and argument. And try to give appropriate solution of their problem. He always conscious about building teamwork among them. In case of any employees absence he fill the gaps by other officers so that any official works are not pending. Managers directly observe performance of the officers and report them to the higher authority for promotion. He also concern who are non-performer and take appropriate measure for them. Official discipline are strictly followed, no employees and officer cannot go out of 39

office without permission of manager. Employees have to wear official dress, present in their desk, until finished of the official works. In case of any disobey of official discipline immediately actions are taken regarding him. Management also concern hygienic working environment, such as pure drinking water, canteen for lunch, entertainment for the staff, neat and cleanness of the branch, toilet bathroom facility, prayers place for the people. And always try to improve branch environment. Loans and advance of Uttara Bank at Jatrabari branch Categories of loans offered by the branch

Agriculture Large and medium scale industries Export Other commercial lending (jute and fertilizer) Small and cottage industries Consumer Loan Personal loan Others

a) Housing loans b) Residential c) Commercials d) Transport e) Cold storage f) Brick field g) Gold loans h) Against work orders i) Against work FDR J) Loans against sanchaypatra k) loans against WEBD, ICB, unit certificate l ) loans against life insurance policy k) Others special progra Classified loans and provision Un-recovered loans

Irregular loans

SubMajor findings standard loans

Doubtful debt

Bad debt

Loans are un-recovered as these are sanctioned against improper documents. Loans are given as the order of direct higher authority. 40

Loans are not properly utilized, loans was cautioned for one sector but used in Other sector. Lack of sufficient interest. Financial loss in business of the creditor. Loans are given without proper inspection of pledged assets or hypothecation. Loans are un-recovered due to value of the collateral assets are not properly assessed. Maximum loans are cash credit instead of collateral credit. Loans are un-recovered due to present govt. policy has lack ness to take legal action against loan defaulter. Loans are sanction-limited sector. Maximum loans are c.c. / abnormal money excess of c.c. Loans are sanctioned against discrepant documents/ documents are not properly examined. Loans are given loans are given without following Bangladesh bank B.P.R.D. Creditor is not available found in the country.

Credit management and recovery of classified loans As classified loans increase provision rate, create adverse effect on investment .in order to accelerate the investment, reduce inflation and to attain target growth rate the following guideline have to be follow:

Undertaking step for recovering of all classified money. Properly audit creditor financial situation, willingness of repayment of loans money, creditor sources of income property. Bank must take urgent measure for recovery of loan money. Examining properly all documents and charges documents. And submitting to harm dept. takes immediate legal action by examining the accurateness of all the documents and amended documents by the direction of head office. Employing well-qualified advocates for UN recovered loans money collection against powerful and large amount creditor. Branch manager have to be concern regarding quick settlement of all suit cases, in the case date bank representative must present in the court and provide information to the competent authority. Strictly follow guideline of Bangladesh bank while sanction loans. 41

Take accurate guarantee from the creditor so that creditor get no provision/ evasion of not pay bank due money. Branch must achieve annual and half yearly budget target so that amount of classified loans may be concern by higher authority and take appropriate action. Bank have to be set up a more strengthen R&M department. Branch manager have to be directly consult with the Deputy GM of R &M. Head office has to employee a former D.C. as a legal advisor in order accelerated recovery of classified loans. Measure must be taken all debts before they are being classified or before expiry dates that loans not be classified. Precaution must be taken while approval of loans proposal in H.O. must justify real situation of using loans granted loans, incase e of any discrepant document or any claim against loans must inform H.O. for not sectioning loans to that applicant.

Precaution while sanction of new loans: Banker must analysis borrower nature of business, experience in business, qualification, and goodwill. Income sources, profit from invested money, ability to repayment of loans money.

Before submit loans proposal banker must properly examine risk and guaranteed value from loans. With a view to properly assessed the proposal of the borrower banker must filled application including borrower cash flow, personal net worth, description of mortgage assets, assets and liability ratio and submit the proposal to H/O.

Banker must be insuring that borrower mortgage property is not pledged to other bank. While sanction loans above 10-lac proposal must be submitted to Bangladesh bank with details description of use of loans money. Lending risk must analysis before sanction Tk. 50 lac. Banker must inspect practically while renews of loans with a view to Asses property actual market value.

Sanctions of Loans and subsequent stages: 42

 All security document and charges document must be properly completed. Banker must be ensured utilization of money so that one sources sanctioned loan may not other sources by the borrower. The bank must inform any unwillingness of utilization of loans money by the borrower and proper legal action must be taken against him. Bank must rewarded and encourage those borrower who regular repayment of loans and must give preference to him for loan sanction. Branch must present report to Bangladesh B.R.P.D. About problem and performance of recovery of classified loans, legal action against those borrowers according to Bangladesh bank B.R.P.D. circulation. Branch manager must be ensuring about obedience of all the above steps.

FOREIGN EXCHANGE
Foreign exchange Foreign Exchange is very lucrative & profitable in modern Banking business. Its recognized as a way of generating maximum profit with low investment. In other Banking like advance needs high capital investment. But foreign exchange required comparatively low investment. In foreign business complexity is high due to rapid change in technology especially for a bank consists of so many branches dispersed in a wide region. The system is easy for a bank to control rich in capital equipped with modern technology concentrated in a small areas. Technology is necessary to prepare quick statement, getting information, preparing reports. Now technology is a turbulent in foreign exchange business. To survive in the competition a bank has to adapt with this changes. For this it will require skilled manpower, on line banking, 24- hours banking services, high capital investment. Problems arise in foreign exchange for changes in economical and political business environmental changes of the country. Changes in exchanges rate, change in currency rate, govt. rules and regulations, create problems while dealing in foreign business. So it needs always a conscious mind for successfully dealing in foreign business.

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How to open an L/C For opening an L/C there must be a relationship between banker and customer through opening an account with the bank. Procedures for opening bank accounts: 1. Before opening accounts clients must submit some paper a) In case of company must submit annual financial statement b) In case of individual must submit all types of income tax payment certificate. There are three types of bank account. A) Savings account b) current account c) STD d) FDR a) For opening bank account first have to fill up application form b) Then have to use to reference that have existing relation ship with the bank or all ready maintain accounts with the bank. c) Two copies resent attest p.p. photograph. Put three-specimen signature on the signature cards. d) Write in details amount of deposits and nominee person address relation with account holders who will hold the account in the absence of clients. e) Enclosed memorandum of associations and articles of associations along with form. 1. L/C must be open through current account. 2. Perquisite for opening L/C Have to take some charge documents from the party a) Trading licensee b) chamber of commerce certificate c) last fiscal year income tax certificate. Then the importer have to submit a proposal for opening L/C along with

L/C application. License no. Performa invoice. Partys application. L.c. set 44

IRC. Insurance covered note.

L/C dealing officer have to properly check the Performa invoice description of goods along with its price, quantity, quality, sources of export country, marketability of goods, shipment dates, shipping days, bill of entry. Packing list, certificate of origin, H.S. code no, Brand new. Certificate of taxpayers from tax commissioner. Trade License from city commissioner. Certificate from import and export registration department. Money receipt from insurance company to reduce risk export port to import destination. L/C Authorization form of the bank contains IRC number, shipping period, description of goods date of l./c issues. - 1 copy for Bangladesh banks. With name and address of dealer remittance, l./c form, description of goods, inventor name, price for exchange clearance. One copy for custom purpose, another copy for office record. Nature of L/C 1. Cash L/C (sight) 2. Cash L/C 3. Inland B/B L/C (sight) 4. Foreign B/B L/C 5. L/c under AID loans 6. Import from EPZ B/B/L/C) 7. Import from EPZ B/B/L/C) (sight) 8. Import from EPZ 9CASH L/C (SIGHT) 9. L/C UNDER sta. 10. Others

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A L/C is most suitable under following conditions When the importer is not well known. The exporter selling on credit may wish to have the promise of payment. When the importer doesnt want to pay the exporter until it is reasonable certain that the merchandise has been shipped in good condition. L/C procedure: The various steps involved in the operation of credit are described as follows

The importer and exporter have contract before a L/C has been issued. The importer applies for a L/C from his banker known as the issuing bank. He may use his credit lines. The issuing bank opens the L/C that is channeled through its overseas correspondent bank, known as advising bank. The advising bank informs the exporter of the arrival of the credit. Exporter ships the goods to the to the importer or other designed place as stipulated in the L/C. Meanwhile the exporter also prepares his own documents and collects transport documents or other documents from relevant parties. All documents will be sent to his banker, which is acting as negotiating bank. Negotiation of export bills occurs when the banker agrees to provide him with finance. In such case he obtains payment immediately upon presentation of documents. If not the documents will be sent to the issuing bank for payment or an approval basis in the next step. Documents are sent to issuing banker reimbursing bank, which is a bank nominated by the issuing bank to honor reimbursement from negotiating bank for reimbursement or payment. Issuing bank honors to its undertaken to pay the negotiating bank on condition that the documents comply with the L/C terms and conditions. Issuing bank releases documents to the importer when the letter makes payment to the former or against the letter trust receipt facilities. The importer takes delivery of goods upon presentation of the transport (usually shipping documents). 46

Parties involved in letter of credit The applicant: The applicant is the parties who generally approaches in order to issue the L/C. generally the applicant ids the exporter who reaches an agreement with the exporter before approach in the bank to issue the L/C. The issuing bank; The bank issuing the L/C is known as issuing bank and it is usually the bank with which the importer maintains an account. The issuing bank undertakes an absolute obligation to pay upon presentation of documents. The advising bank: The correspondent bank sends the L/C is commonly referred to as advising bank. The advising bank simply advises the L/C without any obligation on its part. However, the advising bank shall take reasonable care to check the apparent authenticity of the credit that it advises. The beneficiary: The beneficiary or exporter is the party entitled to draw payment under L/C. The Beneficiary will have to present the required documents to avail payment under L/C. The Confirming bank: The confirming bank confirms that the issuing bank has issued a letter of credit. The confirming directly obligated on the credit to the extent of its confirmation and by confirming it acquires the right and obligation of an issuer. The negotiating bank; The bank that agrees to examine the documents under the L/C and pay t5he beneficiary is called the negotiating bank. Typically, the advising bank is nominated as the negotiating bank.

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Back to back L/C Back to back L/c is mostly issued in Bangladesh. When a beneficiary receives a letter of credit, which is not transferable, and he cannot furnish the goods himself, he may arrange with his banker to issue a second credit, which is known as back-to-back L/C to supplier to supply the goods. As both L/C cover the same goods the back to back credit must be issued with identical terms to the muster L/C, except that the credit amount, unit price if any are smaller. The expiry date under the back-to-back credit is earlier while the latest shipment date may have to be advanced. The bank issuing back-to-back credit will obtain repayment through muster credit, which is deposited to the issuing bank of the back-to-back credit. The bank must try to maintain control of the documents and hold them after payment to the supplier pending receipt of its customers invoices and present the documents itself for payment under the muster credit in favor of its customer. Main business of Foreign exchange department The primary business of foreign exchange department of Barisal branch is to make reimbursements and payments on behalf of the issuing bank. Besides acting as the correspondent bank for reimbursing bank or the payee bank, branch also advice s negotiates, and confirm letter of credits. Acting as the negotiating and confirming Barisal branch earns a commission, which is a percentage of the total L/C amount. This Percentage varies depending on the risk of non-payment by the importer. On the other hand branch earns a flat rate fixed commission when it acts as the advising bank as well as when it authorized to make reimbursement on behalf of the issuing bank. Reimbursement made either to ACU Dollar account AMEX Calcutta, or to US$ dollar account in AMEX New York. These reimbursements contribute to a major portion revenue of foreign exchange department.

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Sevice offered by foreign exchange department of Uttara Bank at Jatrabari branch Barisal branch offered a wide services for its relation ships other bank and clients both home and aboard. These. Service are related to trade finance, international payment, investment, trading services. Credit items Letter of credit (L/C) negotiation Letter of credit (L/C) confirmation. Letter of credit (L/C) advising. Reimbursement authorizations. Payment instruction and Export bills collections. Foreign Remittances All types of L/C money, students fees, and other charges are sending to foreign country through remittance. After negotiation between importer and exporter, getting all documents, payments of goods are made to the exporter bank (advising bank) from U.S.A. Amex bank. But must be arrangement with that bank. After entering the goods in the importer country, getting bills of entry from the custom, exporter send all documents to the issuing bank. Issuing bank then judge the accurateness of these documents and calculate total due with interest, commission, and other charges, deduct amount of margin that was prepaid while opening L/C after preparing dock statement-all the entry transaction is reported to a c-form to Bangladesh bank where total foreign currency record is maintain in commodity wise.

Non-credit items

Findings
While working on Uttara Bank Limited, Jatrabari Branch, I have attained a newer kind of experience. After collecting and analyzing data I have some findings. These findings are completely my personal view to research work. Uttara Bank Limited has lack of strong supervision for which loans are defaulted. Uttara Bank Limited also hasnt proper monitoring system.

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Branches are very much enthusiastic to provide more service to the clients. Investment Division is an efficient department. They are very much prompt to give decision to their valued client. Head Office Credit committee sits regularly on weekly basis. They never keep any things pending.

Lack of good cooperation is identified among the work procedures and among the employees of the bank, which results in lengthiness and ineffective service. The employees of the bank cannot provide effective and efficient services to the customers because of lack of computer facility. The investment of the branch is too low in comparison to the total deposits of the branch. The Bank has given less emphasis on long-term financing. Uttara Bank Limited has also shortage of efficient management information system. The employees of this branch is not satisfied The manager of this branch is able to use all of its resources properly Working environment of this branch is not so good

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Suggestion for the management for future improvement Developing team sprit manager have to take details information regarding employees i9ncome family, no of children, where they study, personal problem, claim of works and have to give solution for them, So those in case of any officer absence they can run official works cooperative with others and develop team sprit in their works. Make cautious to every employees management have make cautious to every employees that they to work with make out, and opening their eyes and ear so that any mistake can not occur in their works. Reducing all unnecessary charges- manager has cautious about branch profit so unnecessary charges have to reduce. Proper utilization of branch resources- Branch has to use all resources, such as capital, funds, deposit, loans and advances, assets, equipment properly. Manager has to use the work force properly, so that some of the employees cannot spend their time idly while others do works. Placement of officer to reduce work loads- Management have to write letter to head office for providing them more qualified staff to increase efficiency of the branch. Modern technology- management has to take measure for arrangement of modern technology to speed up works and reduce their labor. Q- Cash or ready cash services- In order to tackle competition, and speed up customer branch need to introduce new services, such as ready cash, or q-cash like other private bank- to increase customer satisfaction, and no. Of clients. As customer always interested about new services like ready cash that can reduce their time, cost risk, traffic jam. In ready cash system they can with draw their money from any branch where he intentioned, not need physically present that branch. Strictly followed of business ethics Manage have to care about following of business ethics in all the activities-not take any gift from customer- in case of offer tactfully avoid gift.

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Not pending of official works- management have to cautious about not pending of works, sending report to the head office accurate time, sending advices, TRV to different branch to appropriate time, quickly response to audit report. Shift the branch in suitable location As customer feels many disturbances to come here so the branch has to be shifted in a suitable location with parking facility. Improving working environmentAs the branch has space limitation, seating place, so management have to improve working environment. Branch need separate place for officials and customer saying prayers. Increasing deposits as branch deposits are comparatively low than loans and advance so branch need to take measure to increase deposit through opening new clients account. Human resources development Management always has to emphasis on human resources development of the branch they have not rely only on few employees. Management has to take measure for employee training for future improvement of their skills. Expanding service range and Increasing branch assets Branch should expand services range; they should introduce new service that are not copied by the competitor as well as service offered by competitor bank. Branch have to emphasis on increasing its own assets, it should buy own building, purchases more equipment, and other assets to reduce extra charges. Implementation of New Pascal As employees has strong expectation about to implement of new pay scale. It is great expectations that new pay scale have already design for them so management should immediately implement the new scale to increase their motivation level.

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Making list of non performer of the branch Some of the employees who idly spend their time or busy other business branch need to make of those non-performer and take immediate action towards them such as suspend, demotion, transfer, fine etc. Work ethics and Client satisfaction Employee of the branch has to be followed work ethic in all-official activities. Management should always work for their client satisfaction. They should take all necessary arrangement for customer satisfaction through improvement of branch environment, location, security, parking facility new service etc. Customer retention Management have to take steps to retain customer. They should build a strong relationship with their existing customer so that they cannot swift away to competitor bank. Because retention is six time important than attention of new customer. Expanding investment base Branch should expand investment base, they should not depend only on limited sector of investment, they should invest all profitable sector to increase their profit and maintain growth level. Reducing bank charges where necessary Branch should reduce charges for price sensitive customer especially who transaction high volume of business. Being more marketing oriented Branch has to take more marketing oriented for success in future. The should take strategic marketing plan to increase their profit and growth. A problem service organization face is that they may be unaware of all the capabilities they have. This is due to bank intangible elements particularly human skills and aptitude. Organization fails to audit all the areas to manage the farm capability. This is because intangibility of their capability.

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The particular range of services offered will be developed in response to internal needs and external influences. Customer and user perceptions of product lines can often give services marketer insight into ways in which service product mix should extended or reduced service product lines stretched or shortened. CONCLUSION Uttara Bank Ltd is the largest non-government organization throughout or this region. It is working mass people about aquaculture, social welfare and income generation of this region. Leadership style process accomplished half of its organizational activities. Employees are the lifeblood of organization and leadership style are the way to motivate and maintain that. Work mood is associated leadership style in many senses. An appropriate leadership style can bring the job satisfaction among employees. Uttara Bank Ltd is such non-government organization is highly concerned with those factors of Leadership style. They apply an effect ion style to implement the organizational objectives. From apply an effective style to seen that effective Leadership style bring a great and fruitful success of the organizations.

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Bibliography

Annual Report of Uttara Bank Limited, 2010 Annual Report of Uttara Bank Limited, 2011 Brochure of Uttara Bank Limited. Web-www.uttarabank-bd.com.bd. Bank management, Fith Edition, George H. Hemple, Donald G. Simonson. Business Communication, Sixth Edition, Raymond v. Lesiker Jhon D. Pettit, JR. Commercial Banking Fourth Edition, by Edward W Reed / Edward K. Gill. Financial Institutions Management, A Modern Perspective Anthony Saunders. Marketing Management, Third Edition by Kotler & Armstrong. Advertising & Promotion, Sixth Edition By Belch & Belch.

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