Financial Performance Analysis of National

Credit and Commerce bank Limited”

Anderkilla Branch , Chittagong
( THIS INTERNSHIP REPORT IS SUBMITTED FOR THE PARTIAL FULFILMENT OF THE
DEGREE OF BACHELOR OF BUSINESS ADMINISTRATION WITH A MAJOR FINANCE )

Prepared By :
Md. Raihan Uddin Farajee
Matric No: B-071180
Program : BBA
Semester: Spring 2011

Supervised By :
Dr.Sk.Sirajul Islam
Associate professor
Faculty of Business studies

Internship Duration : 5th Sep.to 3rd nov.2011

Submission date : 06th Dec. 2011.

…………………………………….............
Signature of Supervisor

Department of Business Administration

Faculty of Business Studies
International Islamic University Chittagong

1
 Letter of Submission

5th Dec.2011
To
The Head
Department of Business Administration
International Islamic university Chittagong

Subject : Submission of the Internship Report .

Dear Sir,
It is a great pleasure for me that I have the opportunity to submit the internship report on
“Financial Performance Analysis of National Credit and Commerce bank Limited”
Anderkilla Branch

The internship program gave me an opportunity to have an exposure to the working

environment and on-the –job experience of National Credit and Commerce Bank
Limited. I have acquired a good understanding on overall banking activities of a bank.

I have tried my level best to put meticulous effort the preparation of this report .Any
shortcomings or fault may arise as my unintentional mistakes. I will wholeheartedly
welcome any clarification and suggestion about any view and conception disseminated
through report.

Sincerely yours

……………………
(Md.Raihan Uddin Farajee)

Matric No : B-071180
Program :BBA(Finance & Banking)
Department of Business Administration
International Islamic University Chittagong.

2
 Acknowledgement

I am grateful to Almighty Allah Who enables me to complete this job, with enthusiasm &
vigor .I’m expressing my heartiest thanks to those persons who provide me cooperation
and wise suggestion & also helped me to prepare my internship report.

I would like to thank my Supervisor , Dr.Sk.Sirajul Islam, Associate professor

,Department Business Administration, international Islamic University Chittagong. His
constant guidance and advice played the pivotal role in making this report a success .He
always gave me his suggestion that were crucial in making this report as flawless as
possible.

I also take this opportunity to convey my heartiest congratulations to some officialsof

NCCBL,Anderkilla Branch, who had responded cordially to meet my needs relating to
the report and gave me feeling that I am not along taking this great responsibility. Of
them I would like to mention the name of Mr.Taher Ahmed , vice president & Manager
of NCC Bank Ltd. Anderkilla Branch, Chittagong,for arranging the internship program in
their esteemed organization. I am also grateful to Mr.Selim(Deputy Manager) of NCC
Bank Ltd.Anderkilla Branch, who supports me by whatever means they had.

I would like to offer a special thank to Mrs.Shamima Akter,Mrs.Selina Akter,Mrs.Zaria

Khanam,Ms.Ashrafun Nahar ,Mr.Ekramul Hoque & apologize to those whom I’ve not
mentioned in this acknowledgement.However,I remain grateful to them.

And finally I would like to thank all the officers and staff of NCCBL , Anderkilla Branch
who help me and show me cordial during the internship period.Their support makes me
complete the report successfully.

3
 Executive Summary

National Credit and Commerce Bank Limited is a financial institution that registered
under the Company Act 1994. It also guided by the Bank Company Act 1991 and
Bangladesh Bank Ordinance 1972 .It first stared its operations on 25 th November 1985 as
the name of National credit Limited. NCC Bank has been playing effectively an
important role not only for profit maximizing but also in economic development of
Bangladesh.

The data has been collected from primary sources as well as from secondary sources,
such as personal interview with the officers, practical deskwork , Annual report and
different Manuals of NCCBL.
I got very little opportunity to do practical work during the internship period and the
availability of documents was inadequate.

In the present competitive financial market, each organization has to operate efficiently in
its optimum capacity. On the eve of the arrival of the year 2006, each Bank has been
preparing to face new kind of challenges from the various fields. My reports contains six
parts : Introduction, overview of NCC Bank Limited, performance of deposit,
performance of loan & advance, performance of foreign exchange & last part include
problems identification, summary of main finding and recommendation and conclusion.

This report mainly emphasizes the “Overall Performance of NCC Bank Ltd,” Anderkilla
Branch, which covers the three main parts.
In the deposit section, operational profit gradually increased year from 6.37 crore to
80.53 crore. The growth rate of deposit of this branch is declining year by year but the
rate is positive.

4
The Loan and Advance section meet various loan demand of the customer and this
section earn in 2007 9.13 crore and 39.57 crore in 2010, which increased gradually year
by year.

The Foreign Exchange Department assists the import and export business in the way of
opening L / C. In 2010 this branch earn most of its revenue from import financing
(4473024%) rather than export financing(.27%) under the trade operation, as the import
are high compared to the exports in NCCBL, Anderkilla Branch.

The profit after tax figure of the bank at the end of the year stood of Tk. 677.18 million
regarding an increase of 41.31% over the previous year’s figure of tk.479.22million and
paid up capital was increase to tk.1352.01 million. Although the growth of deposit and
advances are positive in the year 2010 but the marginal growth is declining compared to
2009 and considering the economics and political situation of the country during that
period that growth seems to be reasonable.

Though the report I made every effort to be as current and up to date as possible in the
presentation of theories concepts and examples.

In this report I mentioned some strength, weakness, opportunities and treats of NCCBL
.the authority of the bank may be benefited by these recommendations.
Finally, it can be said that if the management implement the suggestions that have been
provided in these report will make the bank as “a bank of your choice”

I generally hope that my report will aid in understanding the of operation of the bank.

I sincerely appreciate the assignment.

5
Chapter one:

Introduction

6
1.1 Background of the study:
Bachelor of Business Administration (BBA) is a specialized program .This program is
designed with an excellent combination of practical and theoretical aspect. After
completion the BBA examination three month is preserved for internship .As a student of
BBA with the requirement of my course .I was assigned at National Credit And
Commerce Bank, Anderkilla Branch, Chittagong for my internship.

Orientation in bank generally expresses the overall activities of the bank. A bank is a
service oriented as well profit oriented organization. Bank’s aim is to earn profit by
providing service to its customer and satisfying its stakeholders as well as stockholders.
To perform these functions simultaneously the bank divides its operation in three parts:
General Banking, loans and Advances, and Foreign Exchange. To carry and maintain the
work schedule properly and to achieve the ultimate goal all the department of the bank
should concentrate deeply and heartily on their assigned activities. Moreover all
departments are equally important in a bank. Of this is the case why I have intended to do
my internship on orientation in the bank on NCC Bank Limited.

I have tried my level best to use this opportunity to enrich my knowledge on banking
system .After observing thoroughly, I have completed this report on the basis of my
findings and observing relating to the topic.

1.2 Objective of the Study

The objective was to analyze the overall performance of NCCBL, Anderkilla branch
from previous years to 2010 and to find out the weak side and strong side of NCC Bank
on the basis of this analysis and provide some recommendation about how bank can
overcome their weak side and some suggestions of how NCC Bank can improve in future
than other competitors. More precisely I can identify the objectives of this report as
follows:
1. To know organizational structure and its overall banking performance.
2. To carry out financial analysis on the performance of deposit.
3. To carry out financial analysis on the performance of loan & advance.
4. To carry out financial analysis on the performance of foreign exchange.
5. To identify the problem and prospect.
6. To recommend solution and feature program of the bank.

7
1.3 Methodology of the Study:
Relevant data for this report has been collected primarily by direct investigation of
different records.papers, documents, operational process and different personnel. No
structured questionnaire has been used. Information regarding office activities of the bank
has been collected through consulting and discussion with bank personnel. In this report
decisions and calculations have been made basing on past experiences and the available
data of past activities. These data can be collected in any one or more of the following
easy.

1.3.1 Sources of Data:

I have collected data from both primary as well as secondary sources which are used to
prepare the report. The details of these sources are highlighted below:

1.3.1.1 Primary Sources:

Personal interview with the officer of NCC Bank Limited as well as face to face
conversion with the clients.

1.3.1.2 Secondary Sources:

> Annual report of NCC Bank Limited.

> Bank’s statements.
> Different procedures manual published by NCC Bank Limited.
> From research report.
> Different circulars of the Bank.

1.4 Scope of the Study:

At NCC Bank Ltd.Anderkilla Baranch Chittagong , I tired to acquire knowledge about

the overall banking system. The bank had classified its total operation onto different
sections. These are:

> Account opening

> Clearing
> Deposit
> Remittance
> FDR
> Loan & Advance
> Foreign Exchange

8
1.5 Limitations of the Report
Limitations are obvious in any study so do here. Since this is an internship report, the
limitations regarding the internship program have acted as the limitations of the study.
Among others the main limitations are:

 I got very opportunity to do the work practically after understanding the

theoretical lesson, which was very crucial to me.
 Though I got three month time but to me the time is not sufficient enough to
complete and gather perfect knowledge on the vast area of the “Overall Banking
Activities”
 Officials of NCCBL maintain a very busy schedule. So they were not always able
to provide enough time to enlighten the internee students every time, even if they
had the intention to do so.
 Unavailability of sufficient written documents as required for making a
comprehensive study.
 The study also suffered from inadequacy of data provided by the bank.
 The study conducted on only one branch of NCCBL. So there is no chance to
compare with other branch and other bank.
In spite all these limitations I have tried to put in any efforts as far as possible.

9
 Chapter Two
An Overview of NCCBL

10
2.1 Historical Background of NCCBL:

National Credit and Commerce Bank Limited is one of the fastest growing banks among
all the private commercial banks in Bangladesh. Prior to conversion into a schedule
commercial bank, NCCBL was incorporated as public limited investment Company in
Bangladesh on 18th November 1985.It made its journey with a modest beginning on 25 th
November 1985 with its Head office at 7-8 Mothijheel A/C,Dhaka-1000.The aim of the
company was to mobilize resources from within and invest then in such a way so as to
develop country’s industrial trade sector and playing a catalyst role in the from of capital
market as well.
National Credit and Commerce Bank Limited was incorporated in Bangladesh as a
banking company under the Companies Act 1994.The principle place of business is the
registered office at 7-8 Mothijheel Commercial Area, Dhaka 1000. It carryout all banking
activities through its branches in Bangladesh.

The bank is listed with Dhaka Exchange Limited as a publicly quoted company for its
shares.

The bank commenced its banking business with sixteen branches from 17 th May
1993.National Commerce and is a progressive commercial bank in private sector in
Bangladesh. Its gives customize service and maintains harmonious banker customer
relationship. It contributes towards formation of national capital, growth of saving and
investment in trade, commerce and industrial sector.

2.2 Objectives of the Bank

NCCBL has several objectives. These are:

> To encourage and broaden the base of investments.

> To develop the capital market
> To mobilize the saving
> To provide for good profit and sound growth
> To contribute to wards the formation of national capital
> To be most effective bank in terms of technology application

11
> To value and respect the customer and maintain harmonious banker customer
relationship.

2.3 Mission of the Bank

To mobilize financial resources from within and abroad to contribute to Agriculture's,
Industry & Socio-economic development of the country and to play a catalytic role in the
formation of capital market.

2.4 Vision of the Bank

To become the Bank of choice in serving the Nation as a progressive and Socially
Responsible financial institution by bringing credit & commerce together for profit and
sustainable growth.

2.5 Products and service of the bank:

In line with changes in economic policies and with the implementation of financial sector
reforms, the banking sector of Bangladesh witness the introduction of prudential mourns,
Liberalization of interest, rates, abolition of direct lending and entry of new private
banks, in this environment, banks in Bangladesh introduced several products over time.

General Banking Activities:

NCCBL divides the whole general banking department in the following sections:
1 > Account opening department
2 > Deposit Department
3 > Cash Department
4 > Accounts Department
5 > Remittance Department
6 > Advance Department
7 > Foreign Department

12
8 > Clearing Department

Account opening department:

The department of account opening has following function-

* Account opening
* Cheque book issuing
* Signature scanning
* MSS opening
* MSS closing
* Account transfer
* Account closing
*Answering customer quarries

Before opening of a current or saving A/C, the customer must complete the following
formalities:

• Application on the prescribed form

• Furnishing photographs
• Introduction by an A/C holder
• Putting specimen signature in the best specimen card
• Mandate if necessary

After fulfilling the above formalities, NCCBL provides the customer a pay-in-slip
book and cheque book.

Deposit Department:

National Credit and Commerce Bank Limited offers the following types of accounts:
 Current account
 Savings account
 Fixed deposit account
 Short team deposit account
 Special deposit account

13
  Premium team deposit
 Demand deposit

Cash counter:

Bank is the dealer of money. It receives money and pay money.Following are some task
done by the cash counter of NCCBL:

 Cash receiver.
 Cash payment.
 Receives utility bill of T & T etc.
 Working as agent of the time of IPO of different companies.
 Fund management by maintain sufficient amount of cash each date.

Account Department:

The main task of the department is to record all task of transaction of the branch,
confirming accuracy, preparing statement etc.
 Preparing of supplementary sheet
 Marinating cash-cum-day book
 Posting in various ledgers
 Preparing of statement of daily branch transaction accounts
 Preparing of weekly statement of Bangladesh Bank
 Preparing of schedule Bank statement

Local remittance department:

The department of remittance is one of the most significant pert of general banking. The
bank receives and transfers various types of bills through the remittance within country.
At present remittance department helps the operation of foreign remittance cell smoothly.
NCCBL charges commission on the basis of bills amount.
The following types of remittance are provided by the NCCBL:

 Pay order (P.O)

 Demand draft (D.D)
 Telegraphic transfer (T.T)
 Mail transfer (outside the city)
 Pay slip
 Security deposit receipt

14
Advance Department:

For a rapid economic growth of a country, developed banking system can provide the
necessary boost. All of function of a moderns bank, lending is the most important.
NCCBL offers its valuable customers both consumer credit scheme and financing for
small, medium and large scale business and industries that fulfil the requirement of the
bank and have return to the investment as well as satisfy the clients. NCCBL provides
loans and advances to the customer in the following from:

1) General loan scheme

2) Cash credit hypothecation
3) Security over draft (SOD)
4) Lease financing
5) House building and repairing loan
6) Car loan
7) Consumer finance scheme

Characteristics of these types of loans and advances are as follows:

 Loan may be short / mid /long term.

 Interest rate range is 12% to 16%.
 Borrower can debit his loan account once, if necessary then twice or thrice.
 Separate ledger has to be maintained.
 Repayment by installment.
 Interest charged on monthly basis.

Foreign exchange department:

Foreign exchange may be defined as “the system of process of converting one national
currency with another and to transfer money from one country another country”
The bank which is authorized by Bangladesh Bank for dealing Foreign Exchange
business is called authorized dealership. National Credit and Commerce Bank Ltd,
Anderkilla Branch , Ctg. has no authorized dealership license. Foreign trade operation
continued to play a pivotal role in the overall business development.
There are twp types of foreign exchange business:

15
 1) Import Business
2) Export Business

Foreign trade is transacted either in the currency of the exporter’s country or that of the
importer’s country of that of a third country acceptable to both the exporter and the
importer.

Clearing Department:

Collection of cheques, drafts etc. on behalf of its customer is one of the basic function of
a commercial bank. Clearing house is an arrangement under which member banks agree
to meet through their representatives at the appointed time and place to deliver
instruments, drawn on the other and in exchange to receive.

It is the reciprocal claims of one bank against others are off set only the net balance of
drawing on the account of the debtor bank maintained with the central bank.

Type of Clearing:

Outward Clearing: outward clearing means when a particular branch receives

instruments drawn on the other bank within clearing zone and those instruments for
collection through the clearing arrangement is considered as outward clearing for that
particular branch.

Inward Clearing: when a particular branch receives instruments, which on them and
sent by other member bank for collection are treated as inward clearing.

2.6 Functions of NCCBL:

The NCCBL performs all types of functions of a modern commercial bank.

a) The main task of NCCBL is to accept deposit from various customers through various
accounts.
b) Provide loan on easy terms and conditions.
c) It creates loan deposit .
d) The bank invest it fund into profitable sector.
e) It transfers money by Demand Draft (D.D), Pay Order (P.O), and Telegraphic
Transfer (T.T) etc.

16
f) The bank is doing the transaction of bill of exchange, cheque etc. on behalf of the
clients.
g) Bank provides various information, guidance and suggestions for promotion of trade
and industry keeping in view of the overall economic development of the country
h) NCCBL assists in the foreign exchange by issuing Letter of Credit and insures the
securities of valuable documents of clients.
i) It brings the increasing power of dimension of transaction.
j) Above all, NCCBL helps the businessman financially by giving discount facility of
Letter of Guarantee.

2.5 Organization structure of the Bank

NCC Bank Ltd of Bangladesh

EXECUTIVE VICE PRESIDENT

BROAD OF DIRECTORS

MANAGING DIRECTOR

ADDITIONAL MANAGING
DIRECTOR
DEPUTY MANAGING DIRECTOR

EXECUTIVE VICE PRESIDENT

SENOIR VICE PRESIDENT

VICE PRESIDENT

SENIOR ASSISTANT VICE

PRESIDENT
SENIOR PRICIPAL OFFICER

PRINCIPAL PFFICER

SENIOR OFFICER
SENIOR OFFICER
SENIOR OFFICER
OFFICER
SENIOR OFFICER
SENIOOFFICER 17
PROBATIONARY OFFICER

JUNIOR OFFICER
ASSISTANT OFFICER
 2.5 Corporate Information
( Up to 31st Dec. 2010)

Name of the Bank : National Credit and Commerce Bank Limited

Status : Private Limited Company
Inauguration : 25th November, 1985
1st Branch
Inauguration : 22nd December, 2005
Anderkilla Branch
Head office : 7-8 Motijhell C/A, Dhaka-1000
Chairman : Yakub Ali
Managing Director : Mohammed Nurul Amin
Manager of Anderkilla : Taher Ahmed
Branch
Authorized capital : Tk. 2500 million
Paid up capital : Tk .1201.79 million
Number of Branches : 64 branches all over the country Up to 2010
Number of Employee : 1500 above
Deposit : Tk. 28147.34 million
Loan : Tk.24678.38 million
E-mail : [email protected]
Website : www.nccbank-bd-.co

18
 2.6 Highlights of the Branch
(General information)

Name of the Branch

National Credit and Commerce Bank Limited
Anderkilla Branch, Chittagong

Location
23,A.N Tower, Anderkilla
Chittagong-4000
Telephone Number
2850883

Total number of Employees

Officers 16
Staff 4
Total 20

Branch in Charge

19
 Mr.Taher Ahmed
Vice President & manager

Operation in Charge
Mr. Selim
Deputy Manager

2.7 Organization Structure of Anderkilla Branch,Chittagong.

Vice President (VP)

Assistant Vice President (AVP)

Senior Principal Officer (SPO)

Principal Officer (PO)

Senior Officer (SO)

Officer (G-1)

Junior Officer (JO)

Assistant Officer (AO)

Others

20
]

Chapter Three
Performance of Deposit

21
3.1 Introduction:
General Banking is the starting point of all the banking operations. it is the department ,
which provides up-to-date service to the customers. Through this section bank has to
receive and disburse money, to develop banker-customer relationship by opening
different type of account and providing prompt service to the customer. Everyday it
collects deposit from the customer by allowing broking interest rate, meets their demand
for cash by honouring Cheques and lends it to the customers against ending interest rate.
Lending interest rate in higher than borrowing interest rate, this is the profit for the bank.

3.2 Function of this Department:

• Account opening section

• Remittance section
• Clearing Section
• Account section
• Cash section

3.3 Account opening section:

This section opens different types of account for their valued customers. Selection of
customer is very important for the bank because bank’s success and failure largely
depends on their customers. If customers are bad they creates fraud and forgery by their
account with bank and, this destroys the good will of the banks, So, this section takes
extreme caution in selecting its valued customer.

3.3.1 Types of Account : It work for processing following accounts-

» Current Individual Deposit

22
 » Savings Bank Deposit
»Short term Deposit
»Fixed Deposit Receipt
»Special Savings Scheme
»Money Double Program

3.3.2 Account opening procedure in a flow chart:

Applicant fills up the She/he is required to fill Introducing is needed

Applicant
relevant fills up
application form up the specimen by an account holder.
in the prescribed manner. signature card.

The authorized
officer scrutinizes
the introduction and
examine the
Account is opened. documents submit.

Issuance of deposit
slip and the deposit
must be made in cash.
23
No cheque or draft is
acceptable to the
bank.
 After depositing the
cash one cheque
book is issued.

Operational Nature of Accounts

1) Current Deposit Accounts (CD Account )

A current account is one kind of deposit A/C which fund should be payable on
demand. The client deposit or withdraw any amount as many times as he wishes. Any
individual, firm ,company, club, associates, etc may open current A/C. Bank may,
however, refuse without assigning any reasons to open current account to any body.

- Minimum balance of Tk. 5000 open.

- No current account will bi opened with Cheque.
- Fund in the current deposit account shall be payable on demand.
- Minimum balance to be maintained of Tk. 1000.
- If minimum balance falls then incidental charges of Tk. 50 will be realized half is
early.
- No interest is payable on the balance of CD.
- In case of closing of correct account Tk. 100 is to be realized against incidental
charges.

2) Saving Deposit Accounts ( SB Account )

The deposit is basically meant for small-scale saver. There is a restriction on

withdrawals money in a month.
- 6.00% interest is provided to depositors.
- Minimum balance to be maintained of Tk. 2000.
- A depositor can withdraw two times in a week for more withdrawal depositors are
not entitled for any interest.
- No savings account will be allowed to be overdrawn.

24
 3) Short term deposit ( STD A/C )

It is also knows as term deposit. The interest offered for STD A/C is less that of
Savings A/C.
- Generally opened by big business firm.
- Interest depends on the amount deposited.
- Minimum amount of balance has to be maintained with STD A/C is Tk. 2 lac,
while open.
- Interest is given at a rate of 4.5% (for less than Tk. 1 crore,5% for more than 1
crore,5.5% for more than 5 crore,6% for more than Tk. 10 crore and 2.5 for bank
to bank )
- Minimum amount is Tk. 5000 must be maintained.

4) Fixed Deposit Reserve ( FDR )

- FDR is neither transferable nor negotiable.

- It can be opened by all.
- Provided 6.50% - 11.50% interest.
- Interest rate very on principal amount.
- The deposited principal amounts have not fixed by the bank.
- One can deposit any sum of amount under fixed deposit reserve.
- In case of with drawl before maturity the previous maturity period is considered
to pay interest according to savings interest rate 6.5% it is known as pre matured
en- casement.

5) Special Savings Schemes ( SSS )

This is a scheme to make the customer introduced to the banking system.Under thes
scheme the customers are to pay a certain amount of money at monthly interval up to
period of 5 to 10 years. This scheme includes the following features for the convenience
of the clients.

• The monthly installment of Tk. 500 to 10000 may be deposited every month during the
entire period of the scheme.
• The duration of the scheme is 5 years or 10 years.
•The depositors will be paid a specific amount as the following table:

Monthly deposit (Tk) 5yeras @12.10% 10years @ 12.10%

500 40500 110750
1000 81000 221000
1500 121000 332000

25
 2000 162000 443000
2500 202000 553000
3000 243000 664000
3500 283000 775000
4000 324000 886000
4500 364000 996000
5000 405000 1107000
10000 810000 2215000

A depositor may open one or more accounts of different installments in the same Branch;
loan may be extended up to 80% of the deposit amount.

Interest Rate on various types of deposits:

Types of deposit Rate of interest (% per annual)

FDR for 3 Month 12.00 %
FDR for 6 month 12.25 %
FDR for 12 month 12.50 %
Short term Deposit 5.00 %
Saving Deposit 5.00 %
Special Deposits 12.10 %

26
6) Money Double Program:

1. Name of the product Money Double Program.

2. Type & Tenor Term Deposit Product for a specific period of 6

years that will make double the principal amount
on maturity.

3. Amount DBT 1.00 lac and/ or its multiple.

4. Interest To be expressed in Absolute amount not in terms

of %.

5. Payment of Interest Interest will be paid/ credit only at maturity

(Necessary Charges & Levies to be realized after
payment /crediting of interest) Interest at a
Predetermined Equal Monthly Rate, to be kept in
Provision A/C until maturity i.e. at the end of each
year interest will not be accumulated with Principal
Amount.

6. Premature Will be discouraged but if insisted by the Depositor

then:
a) For less than 12 months: No interest will be paid
, only Principle Amount, less : Charges will be
refunded.
b) For more than 12 months: interest will be paid at
existing Savings Bank Deposit rate, less: Charge.

a) No “ Auto Renewal” and no extra benefit for

7. Others “Post mature Encashment”
b) In case of requirement Loan may be allowed
against MDP Receipt to the extent of 80% of the
Face Value at an Interest of 16% p.a. following
other rules and regulations applicable for S.O.D
(F.O)

27
3.4. Cash Section
Cash department is the most vital and sensitive organ of a branch as it deals with all kinds
of cash transactions. This department starts the day with cash in vault. Each day some
cash i.e. opening cash balances are transferred to the cash officers from the cash vault.
Net figure of this cash receipts and payments are added to the opening cash balance. The
figure is called closing balance. This closing balance is then added to the vault. And this
is the final cash balance figure for the bank at the end of any particular day.

3.4.1 Function of cash department

- Cash payment
- Cheque cancellation process
- Cash receipt

a) cash payment

Cash payment is made only against cheque.

This is the unique function of the backing system, which is known as “payment on
demand” It makes payment only against its printed valid chepue.

b) cheque cancellation process

Receiving cheque by the employee in the cash counter and verification of the following
by the cash officer in the computer section:
1) Date of the cheque. ( it is presented within 6 month from issue date )
2) Issue from this branch.
3) An amount in figure and in word does not differ.
4) Cheque is not torn or mutilated. Then gives pay cash seal and sends to the
payment counter and payment office makes payment.

c) Cash receipt
Another important function of this department is receipt of cash. Depositors deposit
money in the account through this section by deposit slip.
1) It receives deposit from depositors in the form of cash.
2) So it is the “mobilization unit” of the banding system.
3) It collects money only its receipts from.
4) It receives cash for issuing pay order TT. & DD.

28
Book maintained by this section:

1) Vault register: It keeps accounts of cash balance in vault at the bank.

2) Cash receipt register: cash receipt in whole of the day is recorded here.

3) Cash payment register: Cash payments are made in a day are entries here.

4) Rough vault register: Cash collection for final entry in vault registers dine here as
any error and correction is not acceptable.

5) Cash balance book: Balance here is compared with vault register. If no deference
is found, indicate no error and omission.

3.5 Remittance Section :

In banking business inter-bank transaction is most important. Sending money from one
place to another place for the customer is another important service of the bank. This
service is important part of transaction system. In this service system, people, especially
businessman can transfer funds from one place to another place easily.

- Demand Draft (DD)

- Pay order (PO)

- Telegraphic Transfer (TT)

1) Demand Draft (DD)

DD is an order of issuing branch on another branch of the same bank to pay specified
sum of money to payee on demand. It is generally issued when customer wants to
remit money in any place i.e. outside or the clearing house area of issuing branch.
Payee can be the purchaser himself or another mentioned in the DD. It is safe
technique of transferring money from one place to another.

29
 2) Pay Order (PO)

Pay order should be issued when issuing branch and paying branch are located in a town
or city. Pay order gives the right to claim from the issuing bank. A payment is an
instrument from one branch of the bank to pay a specific sum of money. Unlike cheque
there is no possibility of dishonoring because before issuing pay order the bank takes
money in advance. There are three reasons behind use of P.O :

- Remitting Purpose
- Advice to Pay
- Payment against bill submitted to the bank

3) Telegraphic Transfer (TT)

Telegraphic transfer is a mode of money transfer, which is done through telephone.

Issuing branch requests to another branch to pay specified sum of money to a specific
person on demand by telegraph or telephone. Transfer of fund by TT is the rapid and
Convenient but expensive method.

3.6 Account Section:

This is obviously an independent and unique department, which works as the
composition of all the departments of the branch. This section is fully computerized. So
the conventional large ledger and journal books are not kept like the some nationalized
bank. It receives the vouchers from all departments and prepares the subsidiaries and
maintains accounts.

3.6.1 Functions of Accounts Department :

» To prepare and maintain daily input journal, proof sheet and validation report.
» To prepare flash report of daily liquidity position.
» To maintain and prepare maturity balance sheet
» To maintain trial balance and financial account system
» To prepare clearing difference balance
» Daily posting of vouchers issued by other departments
» Daily statement of affairs
» Originating and responding
» Financial control of the bank is done through this department
» Test agreed is another arrangement maintained for control purpose.
» Test agreed is another arrangement maintained for control purpose

30
» Test control agreed is most important for bank internal control.

3.7 Year wise deposit of NCC Bank Anderkilla branch:

Various types of deposits which are collected by the Branch from the customer are given
below through a table-

Deposit/ Year 2007 2008 2009 2010

Current Deposit 41590856.82 48040926.61 23603144.77 35229544.51
Savings Deposit 25539569 38175860.92 60161254 80809821.41
Term Deposit 110456000 236270951 410443304 541062995
Short Term 16638550 18826601 25423828.81 64382973.77
Deposit
Special Savings 9593549.63 11584845.49 25351479.73 44082124.73
Scheme
Total Deposit 203818525.5 352899185.9 544983011.4 765566859.4

Year wise total deposit position of Anderkilla Branch:

[Graphical Expression of Yearly Deposits Positioon ]

31
Growth rate of current Deposit: From the table we see that, in Anderkilla Branch
in 2006, 2007 and 2008 the amount of CD A/C was Tk.38964480.308, Tk. 41590856.82
and Tk. 48040926.61 and growth rate in 2007 and 2008 was 6.74% and 15.50%
respectively. But in 2008 the growth rate was decreased by increased deposit amount. In
2009 the amount of CD A/C was decreased and growth rate fall by (-50.87%).And in
2010 the amount again increased and growth rate also increased by 49.26%.

Growth rate of saving deposit: From the table we see that, in Anderkilla Branch in
2006, 2007 and 2008 the amount of saving A/C has been increased year by year. But the
rate has been increased in decreasing rate.

Growth rate of Fixed Deposit : In Andedkilla Branch, the growth rate of FDR in
2008,2009 and 2010 has been decrease ( 110.47% ), (68.80% ),and ( 28.95% ),but the
amount increased year by year.

Growth rate of Term Deposit: In Anderkill Branch the growth rate of Term
Deposit has been fall gradually but the amount of term deposit was increases.

3.8 Growth in deposits :

When the income of the people surpasses consumption expenditure then they can save
the surplus amount. By collecting the surplus income as deposit bank assist in capital
formation, which boasts the investment of a country. In this report a study has been
conducted on the deposit of NCCBL, Anderkilla Branch that has been shown by the
following figure:

Figure in crore
Year 2007 2008 2009 2010

Deposit 20.39 35.29 54.50 76.56

32
 Growth rate deposits: (Figure in crore )

80 76.56
70
60 54.5
50
40 35.29
30
20.39
20
10
0
2007 2008 2009 2010

Statement of Affairs of NCCBL, Anderkilla Br.

Comment:

It appears from the above graph that deposit volume of Anderkilla branch has increased
from 20.39 to 76.56 crore during the year 2007 to 2010. The volume of deposit gradually
increased. It can be inferred from the upward trend of deposit curve is that a positive
conception has been grown in the mind of people ( depositors ) regarding the services
offered by NCCBL, Anderkilla Brunch.

33
 5.75% 4.61%
8.40% 10.56%

70.68%

CD SB TERM DEPOSIT SHORTTERM DEPOSIT SPECIALSCHEME

34
 Chapter Four
Performance of Loan & Advance

35
4.1 Introduction:
This is the survival unit of a bank because until and unless the success of this section is a
question to every bank. If this section is not properly working, the bank it self may
become bankrupt. This is important because this is the earning unit of the bank. Banks
are accepting deposits from the depositors in condition of providing interest to them as
well as safe keeping their deposits. Now the question may gradually arise how the bank
will provide interest to the clients and the simple answer is advance.
We often use loans and advances as an alternative to one another. But academically this
concept is incorrect. Advance is the combination of such items where loan is a part only
for this credit section of the bank

4.2 Major types of Loan and Advances:

All loan and advance that are provided by this bank can be categorized into there heads
according to the mature and characteristics of each product:

ADVANCE

Continuous Loan Term Loan Loan General

4.3 Various type of Loan:

36
1 (Loan General):

Short term, medium term and long term loans allowed to individual /firm/ industries
for a specific purpose but for a definite period and generally repayable by
instilments fall under this head. This type of lending are mainly allowed to
accommodates fall under the categories (1).Large & Medium Scale industry and
(2). Small and Cottage Industry. Very often term financing for (1) Agriculture & (2)
Others are also included here.

2 House Building Loan (General):

Loan allowed to individual/ enterprise for construction of house (residential of
commercial) fall under this types of advance. The amount is repayable by monthly
instilment within a specified period. Such advances are known as HBL.

3 SBLS (Small Business Loan Scheme):

It is issued on small business for small traders.
Requirement to take loan:
In case of SBLS, the interest rate is @ 17% per annually. The interest is calculated
after each three months.
4 PLS (Personal Loan Scheme):

It is issued on the basis of salary statement of a person. The salary per month must
be Tk. 50000/= interest rate is @ 17%.

5 LFS (Lease Financing Scheme):

It is issued against buying vehicle.
Term and condition:
a. Interest rate is @ 17%
b. The vehicle must be bought by joint venture name of the Bank and Loan
Holder.

6 SOD (FO ):
It is issued against FDR and DPS.

In case of FDR:
1) The rate of interest is 3% above than the interest rate of FDR annually.
2) It is issued maximum 80% of FDR ,
3) Maximum duration is one year.
In case of DPS:
1. The interest rate is @ 15% due to uncertainty in the long term to
continue the DPS.
2. It is issued maximum 80% of FDR.
3. Maximum duration is one year.

37
7 SOD (General):

It is issued against Export and Working capital. Generally it is issued for those clients
who enjoy composite credit facilities such as who have CD A/C, STD A/C and a loyal
customer.

8 Cash Credit (Hypothecation):

In the case of cash credit the ownership and possession of the goods remain with the
borrower. By the virtue of hypothecation agreement the bank can take the possession of
the goods hypothecated, if the borrower default. Bankers are in that case, entitled to take
legal action against the debtor not only for the debt but also for branch of trust.

9 Cash credit (Pledge):

 The nature operational work, and characteristics of CC-PLEDGE in as same as

CC-HYPO.
 CC-PLEDGE in different form CC-HYPO only from the securities of business
goods against the loan amount.
 It is charged against properties where the ownership may remain to the
borrower but the possession is passed to the bank.
 Instrument- pledge Deed.

10. Payment Against Document (PAD):

PAD is associated with import and import financing. The bank opening letter of credits
bound to honor its commitment to pass for import bills when these are presented for
payment provided that it is drawn strictly in terms of the letter of credit, in fact the
amount their sends advanced on behalf of the importer.

11. Loam Against Imported Merchandise (LIM):

In many cases, a bank has to clear the goods imported under letter of credit at the request
of the borrower. When the importer does not come forward to retire the documents
inspire of repeated reminders bank has on forced circumstances to clear the imported
consignment on arrival of the same to avoid demurrage at the port that adds to the burden
of commitment. When the importer fails to retire the documents or request for clearance
of goods, the outstanding under PAD is transferred to LIM account.

12. Trust Receipts (TR):

This is an arrangement under which credit is allowed against trust receipts and imported
or exportable goods remain in the custody of the importer or exporter but he is to execute
a stamped trust receipt in favor of the bank where a declaration is made that goods

38
imported or bought with the bank’s financial assistance are held by him in trust for the
bank

13. Export Cash Credit (ECC):

ECC are extended to an export to facilitate the export of goods & commodities for which
there is export letter of credit or contract on hand. It is a pre-shipment & short-term credit
to be liquidated out of the proceeds of export documents, which include negotiation, or
purchase of export documents.

4.4 Yearly Statement of Cash Credit :(HYPO)

SL NO. Description of Year 2007 Year Year Year
Hypothecated 2008 2009 2010
stock
Rate of interest 13% 13% 13% 13%
01 Cookeries 50 50 65 90
Items
Growth Rate ….. 0% 30% 38.47%
02 Automobiles ……. ……. 35 50
Growth Rate ……. …… ……. 42.86%
03 Stationeries 5 5 5 10
items
Growth Rate …… 0% 0% 100%
04 Clothes & 80 77 205 190
readymade
garments
Growth Rate …… -3.75% 166.23% -7.31%
05 Paper items 12 12 15 25
Growth Rate …… 0% 25% 66.67%
06 Umbrella ……. 30 70 70
Growth Rate …… …… 133.33% 0%

39
07 Timber ……. ……. 60 75
Growth Rate …… ….. 25%
08 Electronic ….. …… 100 110
items
Growth Rate ……. ….. ……. 10%
09 Spices ……. …… 10 15

Growth Rate …….. ……… 50%

10 Various types ……. …… 20 …….
of plastic
compound
11 Fabrics ……. ……. ….. 25

Total CC ( HYPO ) 147 174 585 660

Total growth rate of CC 18.37 236.20 12.82
(HYPO )

From the table we see that, total growth rate CC (HYPO) in 2007 was 10.37% and in
2009 and 2010, there is tremendous fall in CC (HYPO).

At cookeries items the bank gave CC (HYPO) 34.01%, 28.73%, 11.11%, and 13.63% in
2007, 2008, 2009 and 2010 respectively, which was fall gradually tear by year.
In Clothes and readymade garments the bank gave CC (HYPO) 54.42, 44.25%, 35.04%
and 28.78%in 2007, 2008, 2009, and 2010 respectively, which was fall gradually year by
year.
At electric items the bank gave 17.09% and 16.66% in 2009 and 2010 respectively.
At Automobiles the bank gave 5.98% and 7.57% in 2009 and 2010.
At timber the bank gave 10.25% & 11.37% In 2009 & 2010 respectively which gradually
increased day by day.

4.5 Yearly Statement of Different Types of Loan Scheme:

Under its credit policy the bank operates through a number of conventional and various
credit schemes including Small Business Loan, Housing Loan, Personal Loan Scheme,

40
House Renovation and Repair Loan Scheme which playing effectively in the market and
ensures steady earnings for the bank. Bank’s Leasing Unit have also contributes to the
income during the year as before.
(Fig in Lac)
Name loan Interest rate 2007 2008 2009 2010
scheme
SBLS 17% 80 69 49 44
Growth rate -13.92% -28.99% -10.20%
PLS 17% .75 ……. …….. ……..
HRRLS 17% …… …… 3 ……
LFF 17% 60 …… 60 …….
Growth rate ……. ……. 0% …….
SOD 13% ……. …….. 65 …..
(General )
HLS 13% 15 108 137 ……
Growth rate …. 620% 26.86% …….

SBLS- Small Business Loan Scheme

PLS- Personal Loan Scheme
HRRLS- House Repair and Renovation Scheme
LFF- Lease Financing Facility
SOD (General) - Secured Over Document
HLS- House Lone Scheme

Comment:

From the table, we see that the growth rate in SBLS in 2008 was negative i.e. (
-13.92% ) BS 2009 and 2010 the growth rate was also negative but decrease.
In PLS, HRRLS, LFF and SOD (General) there was no growth rate because the bank
gave loan once in these four years.

41
The growth rate of HLS in 2008 was 6.20% 2009 was 26.86%.

Year 2008 2009 2010

Loan and Advances 16.56 18.06 17.90

Loan and Advances

18.5
18 18.06
17.9
17.5
17 Loan& Advances
16.5 16.56

16
15.5
2008 2009 2010

Source : Statement of Affairs

Comment:

From the above graph we gave seen that, from 2009 to 2010 Loan and Advance sanction
amount is increased, but in 2010 it was fall.

4.6 Comparison of Deposit & Loan and Advances:

42
 Figure in crore
Year 2008 2009 2010
Deposit 35.29 54.50 76.56
Loan and Advances 16.56 18.06 17.90

Comparison of Deposit & Loan Advances

of NCCBL ,Anderkilla Branch

80 76.56
70
60 54.5
50
40 35.29 Deposit
30 Loan
20
10
0
2008 2009 2010

Comment:

The comparison is showing that the growth of Deposit is faster than Loan and Advances.

43
4.7 Achievement of Profit From Anderkilla Branch in last four
years.

Year Profit Growth of Target of the

the Branch Branch
2007 1,19000000 1,30,00000
2008 1,95,00000 2000000
2009 3,20,0000 3000000
2010 5,0600000 400000000

(Figure in Million)

44
 Chapter Five
Findings, Recommendations, SWOT
analysis & conclusion

45
Findings:

A short summary of the findings are presented in the following way:

• The growth rate of deposit during the year 2009 was 80.89%, although the growth
rate is positive but comparison with previous two years’ growth of 73.14% and
54.43%. It seems to be declining.
• This branch is concentrating investment in small and medium enterprise.
• The branch also concentrating only SBLS.
• The growth rate of CC (HYPO) during the year 2009 was 12.82%, although the
growth rate is positive but comparison with previous two years’ growth of
18.17% and 23.20% It seems to be declining.
• In the year 2009, we see that deposit is greater than loan and advances.
• Import business is more than export business.
• In this branch the amount of export and import has been increased more than
previous year.
• No. of L/C opening is less compare to previous year because of fluctuation of
exchange rate.
• Income earned from foreign exchange business is increasing year by year.
• Local L/C is less than foreign L/C.
• The bank is competitive and innovative compared to other foreign banks like
HSBC, and Standard Chartered Bank. For this reason threat of other bank is more.
• It is revealed that the overall performance of NCCBL is still better than that of
other banks considering the economic point of view.
• Recently management committee is changed so new management board take
some development strategy to develop the overall NCC bank.

46
Recommendation:

The following are some of the recommendation that might be useful in improving the
business condition of the branch:
 Since this report covers post performance of the branch (2005-2009) in various
aspects like deposit, advances, import and export business etc. Which may be
useful to look back and set a target for the future if it may simply servs as record
of past performance presented graphically.
 This branch has highest deposit in term deposit (70.68%), so the bank should
concentrate in other deposits like SSS, SB deposit to attract client by increasing
interest rate.
 The bank can minimize the cost of fund by avoiding excessive dependency on
term deposit and increasing the total capital of the bank. By reducing the cost of
capital the bank by reducing the cost of capital the bank will also be able to
charge lower interest on lending.
 Deposit is the main earning asset of the commercial bank. To make the bank
more competitive, the proportionate share of deposit mobilization should be
competitive both in terms of deposit and depositors. Hence, it is expected that
NCCBL should take care in this regard.
 Though this branch concentrating only SBLS, it should concentrate also in PLS,
SOD, HRRLS.
 Although income from import business is more than export business, the bank
should look forward in getting more export business, as the government has
recently increased import duty, which may slow down imports and the
government has recently increased import duty which may slow down imports
and the governments’ new policy seems to be more favorable for export.

47
 Local L/C is less than foreign L/C; bank should encouraged client to open local
L/C.

 The branch should give more emphasis on its loan and advances, as the loan and
advances are short compared to deposit. It can do this by decreasing interest rate.
 The bank should include more products in its product lines and it must be
innovative in designing the new products. This will make them more defending
against their strong competitors (HSBC,SCB etc )
 Employee satisfaction should be ensured for quality services. If the employee is
de-motivated and dissatisfied, no further measure will work.
 The manager do his job without shouting and understanding the wrong of the
employee that did in a polite manner. Then the employee is more motivated and
when they did the same work they will be done it more sincere.
 Bank should reduce their administrative cost, by reducing unnecessary expense.
Few other important factors that should be focused on the development process :
- Evaluate customer’s needs from their perspective and explain locally the
shortcomings.
- Evaluate customer’s needs from their perspective and explain locally the
shortcomings.
- Customer’s convenience should receive priority over other.
- Improve office atmosphere to give customers better feeling.
- Use of effective management information systems.

48
SWOT Analysis:

To survive in the competitive markets every organization should prepares SWOT

(Strength, Weakness, Opportunity and Threat) analysis. From SWOT analysis an
organization can forecast about the problems and prospects and can take corrective
measures to cope up with the new environment. From the SWOT analysis we can figure
out the ongoing scenario of the NCCBL. That is by doing the SWOT analysis, it is
possible to find out the strength, weakness, opportunities and threats of NCCBL and find
out the corrective measures comparing with other banks. Two factors are emphasizing in
this SWOT analysis. These factors are internal factors and external factors.

The internal factors are:

I. Finance
II. Product and Service
III. Management
IV. Control and Communication
V. Technology

The external factors are :

I. Economy
II. Market and Competition
III. Social Communication
IV. Technology
V. Branches & Location

49
Internal Factor Competitive Strengths & Weakness
+ Easy availability of funds from corporate branch foe financing trade
+ Very good profit margin achieved by the last few years
+ Good turnover
Finance - Deposit is short as compared to loan and advances
+ Efficient in trade service & presses flexible
+ Competitive interest rate and smooth service
+ Bank quickly expanding its business all over the country
Product & Service + Online banking service
- Branches has no authority on granting advances without thr prior
approval from head office
- Very few products are available for general customer / narrow product
line
+ Efficient & experienced management team
+ Directors of the bank are not over ruling the decisions made by the
management team
+ Narrow organization structured
Management - Lack of accountability
- Only few employees possess in-depth competencies
+ Low record of defaulters as the advances are made after close scrutiny
Control & and proper collateral is obtained
+ Regular audit from Head Office & Bangladesh Bank
Communication
+ Maintain KYC ( Know Your Customer )
+ Maintain informal communication

- Traditional banking system is followed

+ Computerized Banking
Technology
+ ATM technology
+ Foreign remittance facility through internet
Note : ‘+’ Indicates Strength & ‘- ‘ Indicate Weakne

External Factors Competitive Opportunities & Threats

+ A strong financial source and ample resources to grow the

50
Economy resources
+ Rapid growth of small & medium enterprises
- Our economy now passing recession this also affects the bank
- Commercial activities are mot increases as expected
- Emergences of more new commercial banks and their branches
+ It has now global market reputation
Market & Competition
- Other banks have competitive standing in term of creating new
products and services
Social Communication + Better social relationship with clients, not only priority customer
but also others
- Less media focus (Advertise on TV or Dailies )
Technology + NCCBL provides credit card facility to the customer
+ ATM service enhance the customer service
Branches & Location + Center of business area

Note : ‘+’ Indicate Opportunity & ‘-‘Indicates Threat

Conclusion:
Performance analysis of a bank is not so sufficient to measure and express perfectly
within the short time of my internship period. But it is a great opportunity for me to get
used to with the operational environment of commercial banking of NCC bank,
Anderkilla branch. I have tried by soul to incorporate the necessary relevant information
in my report.

51
Proper financial system of a country can contribute towards the development of the
country of economy. The commercial banks play an important role in this regard. The
banking sector plays an important role in modern society a private banks are more
competitive, diversified and dynamic compared to traditional banking system.

National Credit and Commerce Bank Ltd. Anderkilla branch has been established with
this objectives of providing efficient and innovative banking service to the people of all
sectors of our country. The bank is committed to contribute as much as possible within its
limitations for the economic growth and for ensuring locative value of its available
resources.

Top management of NCC should conduct a comprehensive study or survey on the

branches performances, its management’s performance and the employee’s performance
and their motivation as well.

I hope that the bank will complete with the first class bank of Bangladesh very soon.

Reference:
( a ) F. Brigham, 2010, Essentials of Managerial Finance, Chapter No: 7-8.
( b ) Anon, 2010, Annual report of NCC Bank Limited, Anderkilla Branch.
( c ) Anon, 2010, Statement of Affairs NCC Bank Limited, Anderkilla Branch.
( d ) Official Web Site of the bank : www.nccbank.com.bd
( e ) NCCBL, Anderkilla Branch, general regulations.

52
(F ) Training Report of NCCBL, Anderkilla Branch.

53