General Banking/ Retail Banking:

General Banking Department is considered as the direct customer service center. It is the
starting point of all the banking operation. It opens new accounts, remits funds, honor
cheque, takes deposits, issues bank draft and pay order etc. Following are the major
banking:

 Account opening section

 Clearing section
 Cash section
 Remittance

Account Opening

It is a customer service section. Here three employees of the bank are always ready to serve
their customers. In this section people come to open different kinds of accounts, and schemes..
They are very friendly and cordial to their clients. Here the employees also issue new
checkbooks, help customer to open various types of a/c, and help customers about various types
of d deposit scheme etc. They also use computer for posting purposes below is list of who can
open different types of account:

 Individual
 Sole proprietorship
 Partnership Firm
 Private/Public limited companies
 Clubs
 Societies

Necessities of Opening Bank Account

Safety preservations

 Creation of savings attitude

 Facilities of risk less income
 Formation of national capital
 Economic development
 Establishment of social securities

Types of Account

A. Savings Accounts.

1. Individual A/C

2. Joint NC

3. Non trading concern.

B. Current Accounts

1. Individual A/C

2. Proprietorship A/C

3. Partnership NC

4. Limited Company NC

C. Fixed Term Deposit (FDR)

D. Short Term Deposit (STD)

E. Special Savings Deposit Scheme (SSS)

F. Special Deposit Scheme (SDS)

Saving Account

Savings account is meant for those who want to save a certain amount of their income
and earn interest on that for future needs. All features are more or less like that of CD
a/c except for some restriction that is imposed by the bank. Number of withdrawals over
a period of time is limited. The withdrawing amount is not to exceed 25% of the total
balance.

Current Account

Individuals, sole proprietorship firm, partnership firm, limited companies be it private

or public, clubs, societies etc may open current deposits accounts. Current accounts are
most suitable for all types of organizations since frequent withdrawals do not result in
a penalty. There is no interest earned from current deposit account.

Short Term Deposit

Short-term deposits accounts are special notice account, which are kept under short term
deposit ledger. The rate of interest on STD is subject to change from time to lime. Any

With drawls from this account require seven-day prior notice.

Fixed Term Deposit

Deposit for a fixed period specified in advance. The banks not maintain cash reserves
against this deposit. The bank offers higher rates of interest on FDR. Minimum deposit
is Tk 10,000/-.

Special Saving Scheme (SSS):

 A SSS customer has to deposit fixed amount of money each month for a definite period
of time, normally for 5 to 10 years. A depositor can open a SSS account for deposit of
Tk., 500/-, Tk.1000/-, Tk. 2,500/-, Tk. 5,000/-, Tk.10, 000/- etc in each month.

Account Opening Procedure

The relationship between banker and his customer begins with the opening of an
account. Initially all the accounts are opened with a deposit of money by the customer
and hence these accounts are called deposit accounts.

The deposit liabilities of a banker are classified into two categories:

 Time liabilities or term deposit

 Demand liabilities or demand deposit

Time liabilities or term deposit:

Term deposits are included all those deposits which are deposited with the bank for a
fixed period specified in advance such as fixed deposits or ten deposits. NCCBL
provides different types of term deposits service to their customer such as-

 Fixed Deposit Receipt (FDR)

 Sanchay Patra
 Short Term Deposit (STD)
 Barrier Certificate Deposit (BCD)
 Special Saving Scheme (SSS)

Fixed Deposit Receipt:

Fixed deposit accounts are repayable after the expiry of the predetermined period fixed
by the customer. The period of the FDR ranges from three months to one year. Longer
the period, the rate of’ interest is higher. Amount of FDR is payable once a time. If the
client does not withdraw the amount and give’ further instructions for renewal within
one month from the date of maturity, then the FDR account would get renewed for a
further three months and the rate of interest would prevailing rote for fixed deposit.

Demand liabilities or demand deposit:

The amount which is payable on demand is called demand deposit account.

There are two types of demand deposit account:

 Savings account

 Current account
 Account statement:

Any company or individuals may want to know their balance. For that they have to
provide their account no and starting and ending date of transaction they want to know.
The procedure is they will write this information to the register khata and receive the
computer printed statement by giving signature.

Cash Section

Cash

Cash department is an important department of any bank. Cash amount is the main
source of all banking activities. For that every day bank has to remain certain amount
in cash in accordance with the rules and regulations of Bangladesh Bank. Cash section
is a very sensitive organ of the branch and handle with extra care.

Functions of Cash Section

The cash department mainly performs the following functions:

• Cash Receipt

• Cash Payment.

Remittance

Remittance:

Remittance is the best mediums to transfer funds from one place to another. This
function eliminates the individual difficulties and the hazards in transformation of
physica1 cash from one place to another.

Peop1e can send their money from outside or within the country. According to that we
can divide the remittance into two categories:

 Local remittance
 Foreign remittance

Local remittance:

Transferring money among the country is called local remittance. In NCCBL, they
provides following services:

Local Remittance

 Pay Order
 Demand Draft
 Telegraphy/Telephone Transfer

Pay order:

Pay order is a document of money. It would be released from that bank where it
is issued a P.O. request may come for different purpose such as from any
department, normal cash remittance etc.

 Requirements for P.O.: For issuing a P.O. issuer must have an account in the branch
of the bank.
 P.O. processing: Following procedure should be performed by the clients:
 Client has to fill up the P.O. application form which requires the information as to
whom it is done, purpose, amount of money, applicant’s signature, address and
account no.
 Bank will charge commission and VAT for issuing a P.O.

General Banking:
General banking is the heart of all business banking activities. General banking
department performs the core function of bank, operates the day-to-day transactions.
It is the storage point of all kinds of transaction of foreign exchange department,
loans and advance department and itself.

Functions of General Banking:

The functions of general banking department are as follows:

1. Maintenance of Deposit A/Cs/ Saving accounts/ Current accounts/cash credit

deposits/Fixed deposits/short term deposits/margin deposits/Bond
deposits/F.C. Bond deposits.
2. Receipts & payment of cash.
3. Handling transfer transactions.
4. Operations of clearing house.
5. Maintenance of accounts with Bangladesh Bank & other banks.
6. Collection of Cheques & Bills.
1. Issue and payment of Demand Drafts, Telegraphic Transfers and
payment Orders.
2. Executing customers standing Instructions.
9. Maintenance of safe Deposit Lockers.
10. Maintenance of Internal Accounts of the banks.
11. Reporting to head office about daily position.
12. Saving all transaction record in computer.
13. Closing and transfer of different types of accounts.
 14. Keeping good relation with valued customer.
15. Providing necessary support to the customers.

Sections of General Banking:

 Account opening section
 Remittance section
 Bills and clearing section
 Cash section
 Mail receive and dispatch section

Account Opening Section:

One of the vital sections under general Banking is the account opening section.
Banker customer relationship begins through this section. Various tasks are
performed in this section. Such as:

 Opening of different types of account.

 Issue of checkbook.
 Transfer and closing of account.
 Enquiry of account.
Fixed Deposit Account
They are also known as time liabilities or term deposits. These are deposits, which
are made with the bank for a fixed period specified in advance. The bank need not
maintain cash reserves against these deposits and, therefore, the bank offers higher
rates of interest on such deposits. These deposits generally constitute more than half
of the deposits with the banks.

Opening and operation of fixed deposit account. The depositor has to fill in an
application form wherein he mentions the amount of deposit, the period for which
deposit is to be made and the name/names in which the fixed deposit receipt is to be
issued. In case of a deposit in joint names, the banker also takes the instructions
regarding payment of money on maturity of the deposit, i.e., whether payable jointly
or payable to either or survivor, etc. The banker also takes the specimen signatures
of the depositors). A Fixed Deposit Receipt is then issued to the depositor
acknowledging receipt of the sum of money mentioned therein. It also contains the
rate of interest and the date on which the deposit will fall due for payment.

Payment of Interest: It is usually paid on maturity of the fixed deposit. But the bank
may pay interest to depositor every three or six months or credit the money of interest
to his savings or current account, at his request These days banks have started a novel
scheme of ‘reinvestment plans’, whereby the customer gets the benefit of compound
interest The interest to his fixed deposit account every quarter earns further interest
in the subsequent period and the total amount with interest is paid to him on the
maturity of the deposit
Advance against fixed deposits. In case an advance is granted against a deposit
under reinvestment scheme, accrued interest should also be taken into account for
determining the amount of advance.

At the time of getting a loan, the deposit, receipt, duly discharged, has to be
surrendered to the Bank. The bank notes down its Hen on the deposit receipt. The
receipt is returned to the borrower on repayment of the loan and the fact that the
bank has jilted its lien over the deposit receipt is noted down on the receipt.

Surrender of deposit receipt before the maturity date. A banker is not bound to
accept surrender of the deposit before its maturity date. However, in practice the
banker accepts such a request from its customer and makes payment of the amount
due under the deposit receipt even before its maturity date.

Deposit receipt is not a negotiable instrument A Fixed Deposit Receipt is not a

negotiable instrument, the words “Not transferable” are clearly written on it.
However, it can be assigned. The assignor should hand over the deposit receipt duly
discharged to the assignee with a letter giving up all his claims regarding such
deposit. However, the title of the assignee will not be better than that of the assignor.

Deposits in joint names: A bank frequently in joint names receives deposits. In the
absence of any other agreement the bank will not be discharged by payment to any
of the joint depositors- The payment should be made to all joint depositors or
surviving depositors together with the legal representative of those deceased. In case
joint deposit account is to be operated by “either or survivor”, the bank will be
discharged by payment to any of the joint account holders on maturity of the deposit
or to the survivor in the event of death of any of the joint depositors. However, no
variation or ‘revocation of instructions in a joint account can be made without the
consent of the other joint account holders in any case. For example, where a loan is
to be obtained on a fixed deposit receipt or a fixed deposit receipt is to be encased
before the expiry of its term, one of the joint account holders cannot get it done so
without the authority of the other depositors even when the account is to be operated
by ”either or survivor”,

Cheques against fixed deposits No cheque can be drawn against a fixed deposit in
absence of any agreement. The position holds good even in cases where deposit has
matured unless the customer makes such arrangement or gives instruction to the
bank to transfer the amount to his savings or current account.
Exemption from stamp: duty A fixed deposit with a bank is exempt from stamp
duty provided the person who deposits the money and the person to with in it is later
on to be accounted for are the same.

Loss of fixed deposit receipt: In the event of a fixed deposit receipt being lost, the
payment of the amount due under the receipt or duplicate receipt can be obtained
from the bank by filling in an Indemnity Bond. The bank should make a note of this
fact in the Fixed Deposit Ledger for future guidance.

Change of names: A banker may receive a request from a customer to change the
name in the Fixed Deposit Receipt or making an addition thereto or deleting a name
therein. The banker has to be very careful in this respect and should comply with the
customer’s request only after examining the legal position in each case. In case, the
receipt was issued in the names of unmarried lady, who now wants to get her name
changed on account of marriage, the banker should comply with such a request since
this is a genuine case. In case a request has been received from the customer to add
the name of any other person in the fixed deposit receipt, the banker should have no
objection to adding of such name since he has the mandate of the customer.
However, in case the receipt is in the name “of two or more persons, the banker
should comply with the request for adding a name only when all the depositors make
such request in writing. In case of the death of a depositor, the deposit can be held
jointly in the names of all the heirs or the amount of deposit may be split equally in
each person’s name depending upon the request received from the heirs of the
deceased. If the original term of the deposit is not reduced, the compliance of such
a request will not be considered as renewal of deposit or its payment before maturity
date,

Savings Bank Deposit Accounts

These deposits are mostly of small amounts and are accepted by banks to encourage
persons of small means to make savings. Frequent withdrawals are not allowed and
interest is generally allowed on monthly balances. The cheque facility is also
available in case the depositor agrees to maintain a minimum balance.

Current Deposit Accounts

In case of current or demand deposits, the bank undertakes the obligation of paying
all cheques drawn against it by the customer till it has adequate funds of the customer
with it. The current account is a running account and, therefore, it never becomes
time barred. The special characteristics of such an account are as follows:

(i) The Primary objective of current account is to save big customers as big
businessmen, joint stock companies, public authorities, etc. from the risk of handling
cash themselves.

(if) The cost of providing current account facilities is considerable to the banks
since they undertake to make payments and collect the bills, drafts, cheques for any
number of times daily. The banks, therefore, do not pay interest on current deposits
while on the other hand some banks charge for incidental charges on such accounts.

DORMANT ACCOUNTS

Dormant Accounts are those accounts, which are without any customer created
transaction for a long time. The law has not prescribed any period after which an
account should be treated as a Dormant Account because of absence of any
transactions by the customer in his account. Every bank has its only policy in this
respect.

There may be several reasons for an account becoming a Dormant Accent. The
depositor might have moved from one place to another without citifying the banker
about his change of address. Ht may have misplaced his passbook and forgotten
about the existence of an account with a particular bank. In some cases the depositor
might have died without bank’s knowledge.

In case of active accounts, there is some measure of control because of periodic

review by the customer of his account. In case of current accounts, the Bank submits
statements of account to the customer at regular intervals. It is presumed that the
customer must have gone through the account and checked about its accuracy. In
case of an active account, the customer is asked to submit his Pass Book from time
to time to the bank so that the bank may pass necessary entries in it. Thus, in case of
an active account, the chances of fraud being committed by the bank’s employees
are much less since the accounts are subject to constant check by the customers.
However, no such controls are available in case of Dormant Accounts. In the absence
f customer’s checks, the Dormant Accounts can easily be manipulates by cheats.
One method of controlling frauds in case of Dormant Accounts is to transfer all of
them into one Ledger; this Ledger should list all the depositors having Dormant
Accounts with the bank with the amount shown against each account. The signature
cards for Dormant Accounts should also be removed from the active file and should
be placed in a Locker under dual control. The card reference of such transfers should
be kept in die active tile. The card should show the name of each depositor and the
date on which the account was transferred to Dormant Account Ledger. In case a
depositor whose account has been taken as a Dormant Account wants to operate such
an account, the entry must be initialed by a responsible official before the account is
permitted to be operated upon. The officer-concerned should also initial the control
sheet when such entries are made.

Remittance Section:
The major function of commercial Banks is mobilization of fund. Other than this,
banks provide ancillary services to its clients. Clients need to remit money from one
place to another for their business or other purposes. Banks fulfill this need of
customers by means of remittance service. Money can be remitted domestically or
internationally, which known as local remittance and foreign remittance.

There are three ways of transferring fund domestically. The modes of transferring
funds are:

 Pay- Order (PO).

 Demand Draft (DD).
 Telegraphic Transfer (TT).

Payment Order / Pay Order (P.O)

This is an instrument issued by the branch of a bank for enabling the

Customer/Purchaser to pay certain amount of money to the order of a certain
person/firm/organization/office within the same clearinghouse area of the pay order-
issuing branch.

Characteristics of P.O

 The issuing branch and paying branch are same.

 Application for payment within the clearinghouse area of the issuing branch.
 This may be open or can be crossed.
 No charge for issuing pays order for account holder.
Demand Draft (D.D)This is an instrument through which customer’s money is
remitted to another person/firm/organization in outside the clearinghouse area from
a branch of one bank to an outstation branch of the same bank or to a branch of
another bank (with prior arrangement between that bank with the issuing branch).
This is an order instrument in which the issuing branch gives instruction to the
payee/drawer branch to pay certain amount of money to the order of certain
person/firm/organization. Commission, vat and postage are charged on issue of DD
entries for issuing DD.

Telegraphic/ Telephonic Transfer (T.T)

This is a mode of transfer of customer’s money from a branch of one bank to another
branch of the same bank through telegraphic/telephonic message. The issuing branch
used to send the message of such remittance through telegraph/telephone adding
certain code number or test number on the basis of test key apparatus developed by
the concerned bank for its different branches. The drawer and the payee are required
to have account with the bank in order for this transaction to take place. TT is issued
against cash, check, letter of instruction etc.

Characteristics of T.T

 Issued by one branch to other branch and message is tale-communicated.

 Remittance/ transfer of money is done through tested tale-messages.
 Remittance is affected on the basis of tested message.
 Test key apparatus is required.
 No charge for issuing pays order for account holder.

Bills and Clearing Section:

Clearing and bills section is an important section of General Banking. This is the
section through which branch has to clear it’s inter branch and inter bank transaction.
Customers do pay and receive the collecting branch the system is known as IBC.

THE CLEARING HOUSE SYSTEM

Meaning: the growth of banking habits among the people has led to greater use of
cheque facility by them. The number of banks and their offices are also constantly
on increase. Every bank receives daily hundreds of cheques, drafts etc., on other
banks. One method of collecting the money of such cheques, drafts etc. are to send
an official to every drawee bank. This method is bound to prove costly and tedious.
The other alternative is to fix a common place where officials of different banks may
meet daily to settle interbrain claims. Such a method is simple and convenient since
it does not involve unnecessary traveling and actual handling of cash. The common
place so fixed is termed as banker’s clearing house.

A clearing house may, therefore, be defined as an organization of barks constituted

for the purpose of settling inter-bank liabilities due to transfer of deposits by a
customer of a particular bank to that of another bank.

Mechanism:

The mechanism of working of a clearing house in general is as follows:

(i) Every bank of the locality which is a member of the clearinghouse prepares
a bank-wise list of cheques received from customers and drawn on different banks
of the locality.

(ii) An official of each bank visits the clearinghouse with the cheques and their
list in the morning. He delivers the cheques to the officials of the respective banks.
Similarly, he also receives the cheques drawn on his bank from the officials of the
other banks.

(iii) The officials return to their respective banks to meet again in the afternoon
to return any dishonored instruments to the officials of the respective banks.

(iv) The official of each bank computes the final balance payable or receivable
by his bank from other banks after taking into account the various amounts of
receipts and payments.

(v) The final settlement is effected by the supervisor of the clearinghouse by

debiting or crediting, as the case may be, the accounts of the respective banks as
maintained with the clearinghouse.

Types of Clearing

1. Outward Clearing: Outward clearing means when a particular branch receives

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

2. Inward Clearing: When a particular branch receives instruments which on them

and sent by other member bank for collections are treated as inward clearing.

Outward Bills for Collection (OBC):

Customers deposit cheque, drafts etc. for collection, attaching their deposit slip.
Instruments within the range of clearing are collected through local clearinghouse.
But the other, which is outside the clearing range, is collected through OBC.
 Inward Bills for Collection (IBC):
In this case bank will work as an agent of the collection bank. The branch receives
a forwarding letter and the bill. Next steps are:

 Entry in the IBC register, an IBC number given.

 The instrument is sent to clearing for collection.
An IBC is dispatched in this regard. If dishonored: in this case the instrument is
returned to the collecting branch along with return Memo indicating the cause of
dishonored.

Cash Section:
Cash section is an important section where cash transactions are made. Cash sections
demonstrate liquidity strength of a bank. It is also sensitive as it deals with liquid
money. Maximum concentration is given while working on this section. Tense
situation prevails if there is any imbalance in the cash account. There are various
systems maintain by cash officer that is under:

 Vault
 Cash Payment
 Cash Receive
 Transaction after banking hour.
The cash department is the riskiest department of the bank. This is the section where
tight security is required to avoid any accidents. There is a limit to be amount of cash
that each counter can carry; carrying of excess cash is avoided for safety reasons.

Cash Receipt
When clients deposit cash in the bank, the bank officer on receipt of the cash and the
pay in slip/credit voucher shall:

 Check and count the received cash.

 Make sure that the amount in word and number in the deposit slip are same.
 Check the account title and the number.
 Both the deposit slip is in order.
 Depositor’s signature is in the slip.
 Receive seal in the slip is a must.
 Write the domination of the currency at the back of the pay in slip or the credit
voucher and affix stamp in the slip/voucher.
 Enter particulars of in slip/credit voucher in the receiving cash officer book.
 At least, send the pay in slip/voucher to the deposit department or to the
respective department.
 Deposit slip must be signed by the respective officer.
 Carbon copy of the deposit slip must be handover to the client with proper
seal and signature.
 Cash Payment
Cheques, demand drafts, pay orders, pay slips and debit cash vouchers etc. are
received from various departments for payment of cash to customers/payees. Prior
payment of cash it is the officer’s duty to make sure that the cheque/or the instrument
has been genuinely passed. The following common precaution is thoroughly
practiced before honoring a cheque:

 Check of it is an open or crossed check.

 The branch name in the cheque.
 The date in the cheque is very crucial. Cheques are normally valid six months
and pre-dated cheques are asked to present after the date given.
 Tk in words and figure of the cheque is same.
 Balance in the account is available.
 The apparent tenor of the cheque. Whether any figure, date or anything has
been altered in the cheque presented. If any, then the respective officer must
check whether the client is making his signature for alteration or not.
 The specimen card signature and signature in the cheque should match.
 Signature of recipient is obtained on the reverse of cheque.
 In case, where a prior arrangement has been made with the bank, a client may
overdraw against a cheque.
Books maintained by cash department:
Vault Register: In this book the amount of cash available in the branch is
maintained. That is, the amount in the vault register book.

Cash Receive Register: This register keeps record of all incoming cash.

Cash Payment Register: Similar to the cash register book, this book keeps tracks
of all outgoing cash that is all payments.

Daily Cash Balance Register: This is the book where cash balance is recorded by
counting the notes and coins that are physically available. The balance in this book
is compare with the vault register, which should be the same. In case there is an
error, then the figures would not match but if no discrepancy is found then anything
is to be worried about.

Mail Receive and Dispatch Section:

Banking is the business of correspondence. Lot of mail comes to the bank and
dispatch from the branch daily. Loss of any document causes much loss for bank.
That is why bank has to record all mail received and dispatched through the bank.

Mail receiving:
All mail comes to the bank recorded in this desk. For this reason a register book
maintained called inward mail register. A number is given on receiving mail and
records particulars of document in the register book.

Mail Dispatching:

Before dispatching mail from the bank, it must record in outward mail register. A
number is given on the mail. Destinations, date of dispatch are recorded in that
register book.

FOREIGN REMITTANCE:
As a part of the foreign exchange operation, foreign remittance activities play a
vital role in any commercial bank. Because both export and import’s finally job
is to being ( Inward Remittance) or pay (Outward Remittance) foreign currency,
which is one of the major functions of this department. In an essence the sale
and purchase of foreign currencies. The last five year positions of the foreign
remittance in this branch are given below

Table: 1 last five year positions of the foreign remittance

2005 2006 2007 2008

104.93 125.44 175.55 362.52

ACHIEVEMENT OF NBL, KAWRAN BAZAR BRANCH:

Now a day it is pointless to declare that homebound foreign remittance is

significantly contributing in building Foreign Exchange Reserve of the country.
Realizing the prospects of the sector, NBL, Kawran Bazar Branch since its
beginning is progressively establishing its network where concentration of
Bangladesh expatriates is higher. At the time passes, NBL Kawran Bazar
Branch achieved the confidence and trust of the Bangladesh wage earners and
successfully handling a significant volume of remittances, which is increasing
day by day. The milestones in the history of NBL Kawran Bazar Branch
achievement are:

SWIFT:

SWIFT stands for “Society for Worldwide Inter-banking Financial

Telecommunication. It regards the safe, quick and reliable media of financial
transactions all over the world. The bank mains round the clock communication
with the external world using the latest information technology services
of SWIFT. In order to give improved and risk free banking services to the
valuable clients, all arrangements for launching line banking are its final stage.
This time bank established relationship management application in 73 countries
besides 32 local places of test key arrangement.

WESTERN UNION MONEY TRANSFAR:

In Bangladesh NBL Kawran Bazar Branch introduced the remittance service of

“Western Union” in 1998. NBL are able to reach with lighting speed the hard-
earned foreign exchanges of non-resident Bangladeshis to their near and dear
ones at home through the world renewed Western union. In the year 2000 the
Bank managed to procure foreign remittance to the tune of US$ 8.44 million
dollar equivalent to TK 4662.10 million compared to TK 3989.20 million in the
previous year indicating a growth of 16.96 % Banking is not only a profit oriented
commercial institution but it has based and social commitment admitting this
true NBL Kawran Bazar Branch is going on with its diversified banking activities

FOREIGN REMITTANCE SECTION:

In the foreign remittance section I stayed for 4 week, like the local remittance
section the purpose of foreign remittance section is to ease the flow funds
between our country and abroad. When an international transaction is made the
payment of the transaction is made trough foreign currencies. Here the foreign
remittance department works as a media between the transactions of the two
currencies. Foreign remittance can be categorized in the following ways:

Inward Remittance:

The Remittance of freely convertible foreign currencies which we receiving from

abroad against which the authorized making payment in the local currency to
the beneficiaries may be called as inward remittance. Inward remittance
comprise remittances on account of exports, family maintenance, donation,
indenting, commission, gift, export brokers, and private remittances on sundry
items, purchase of traveler’s cheque, currency notes and coins. These
remittances can be received y names, business firms or other general A/C like
partnership, club society, Association, Trust, NGO etc.

There are no restriction on inward remittances by Bangladesh Ban other that

the prescribed formalities to be complied with by the exporters and other
recipients. The authorized dealer can freely purchase foreign currencies.
Authorized dealer are required to maintain a proper record of all inward
remittances and furnish such particulars as required on the prescribe returns to
submitted to the Bangladesh Bank.

Cancellation of Inward Remittance:

In the event of any inward remittance which has already been reported to the
Bangladesh Bank, being subsequently cancelled, either in full or in part,
because of non-availability of beneficiary. Authorized dealers must report the
cancellation of thr inward remittance as an outward remittance on form T/M.
The return in which the reversal of the transaction as reported should by
supported by a letter giving the detailed particulars of original amount of
remittance, amount cancelled, reason for cancellation, name and address of the
beneficiary, the date of the return in which the inward remittance was reported.

Outward Remittance:

The remittance in foreign currency which are being made on our country to
abroad is known as foreign outward remittances. Outward remittance
comprises remittance on account of import and private remittance on sundry
items, sale of traverler’ chequq, currency notes and coins etc. As the country is
in a perpetual state Bank scarcity of foreign currency and to seek and maintain
favorable balance of payment before any outward remittances to be made to
out Bangladesh Bank’s prior permission is requires as the foreign exchange
business is restricted and controlled by the Bangladesh Bank.

Outward remittance can be occurred due to the following reasons:

1. Payment of Import bills.

2. Remittance of freight and passage.
3. Agency commission for handling vessels.
4. Oeration expenses of Bangladesh Shipping Corporation and Bangladesh
Biman.
5. Charter of foreign ships and aircraft’s.
6. Employment of overseas agents.
7. Opening branches or subsidiary companies abroad etc.

Modes of Foreign Currencies Received & Paid:

Foreign currency can be received and paid in the following Modes:

 T.T= Telegraphic Transfer
 M.T= Mail Transfer.
 F.D= Foreign Drafts.
 P.O= Payment Order.
 T.C= Traveler’s Cheques.
 Foreign Currency Notes.

IMPORT SECTION:

As foreign activities import is one of the important functions of commercial

banks. The major function is to import goods from aboard. In this section I
stayed 4 weeks and observed the tit-bits of total import process. Some major
activities of this section are preparing proposal, opening L/C, security of import
bills, providing post import finance etc.

EXPORT SECTION:

Besides the import a large volume of profit is generated from export activities in
Kawran Bazar Branch. The major function of this section is to assist our
exporters to exporr their goods to aboard. In this section I stayed many times
and observed different export related activities like opening BTB L/C, providing
acceptance, scrutiny of import papers etc.

OPERATION OF FOREIGN REMITTANCE

FOREIGN EXCHANGE:

Foreign Exchange Department is the international department of a bank. It

deals globally. It facilities international trade through the various modes of
services it possess. If the branch is an authorized dealer in foreign exchange
market, it can remit foreign exchange from home country to foreign countries.
The department mainly deals with foreign currencies. Hence it is called foreign
exchange department. The department brides with the export, import and
foreign remittance.

Following flow chart depicts the multifarious functions usually done by the FED.
FOREIGN REMITTENCE

The transfer of any funds across national boundaries. Foreign remittance

means purchase and sale of freely convertible foreign currencies as admissible
under Exchange Control Regulations of the country. Purchase of foreign
currencies constitutes inward foreign remittance and sale of foreign currencies
constitutes outward foreign remittance.
Types of Foreign Remittance:

There are two types of Foreign Remittance:

Foreign Inward Remittance

Foreign Outward Remittance

Foreign Inward Remittance

Purchase of foreign currencies constitutes inward foreign remittance. For

different use bank can purchase foreign currency such as endorsements.

Foreign Outward Remittance

 Sale of foreign currencies constitutes outward foreign remittance. When bank
sale the foreign currency to its customer or clients then it called outward foreign
remittance. Such as FDD, TT etc.

Activities in foreign remittance in:

The Foreign Remittance department of National Bank Limited Ka wran Bazar

Branch is equipped with a number of foreign remittance facilities. Following are
the types of foreign remittance facilities offered by National Bank Limited
Kawran Bazar Branch.

 Issuance of Foreign Demand Draft (F.D.D)

 Issuance of travelers Cheques (T.C)
 Issuance of foreign T.T (Telegraphic Transfer)
 Disbursement of the cash of incoming F.T.T.
 Collection of F.D.D.

FOREIGN REMITTENCE ACTIVITIES NBL:

As a part of the foreign exchange operation, foreign remittance activities play a

vital role in any commercial bank. Because both export and import’s finally job
is to being ( Inward Remittance) or pay (Outward Remittance) foreign currency,
which is one of the major functions of this department. In an essence the sale
and purchase of foreign currencies. The sale involves exchange of foreign
currency of home currency i.e, conversion of home currency into foreign
currency and the purchase involves exchange of home currency of foreign
currency i.e. conversion of foreign currency in to home currency.

Table-5 Last six Months Inward and Outward Remittance Flow in Kawran
Bazar Branch:

Nov Dec Jan Feb Mar.

Inward

49836.3 55983 587066 475328 432269

Outward

106581 165287 135767 96311.5 82830.2

From the above graph we can easily see that there are many up and downs in
the Inward and outward curve. This is happened due to the world financial
recession many wage earners become panicked and they send their savings to
the country during November and arise in January and now the situation is quite
steady. And in the December due to enough dollar endorsement and many
students went to abroad for higher study which causes rise in the outward curve.

F/C ACCONT OPENING AND MAINTANANCE:

In Kawran Bazar branch one of the major tasks of Foreign Remittance section
is opening and deal with different foreign currency A/Cs foreign currency A/C
can be following types:

F/C General A/C:

This F/C account can be opened only by Bangladeshi citizen (wage earner) who
is working in aboard. He A/C holder may deposit currency notes, Traveler’s
cheque, drafts etc. brought into Bangladesh. Both the A/C holder and nominee
can operate the A/C. The nominee can withdraw every dollar from the A/C but
he/she can not deposit foreign currency in this A/C. Foreign currency can be
remitted to aboard from this A/C but no business deal can be done using this
account.

Residential F/C deposit A/C (RFCD):

Only Bangladesh resident can be open this type of A/C with foreign currency
brought in by the time of their return to Bangladesh from traveling a country.
Any amount brought in with it with declaration to custom authorities on from
“FMJ” can deposited in this A/C (amount below $5000 no need to declaration).
But processed from export or any service from Bangladesh would not be
deposited here. Foreign currencies of their foreign travels (i.e. cash
endorsement in passport and ticket) up to $300 in the from of cash and
reminders can be issued in the traveler’s cheque.

Non-Resident F/C deposit A/C (NFCD):

It is an interested term deposit A/C. This A/C can be opened for 1/3/6/12 months
or more basis auto renewal term. All non –resident Bangladeshi nationals and
persons of Bangladeshi origin including who have duel nationality and having
nationality but working aboard can open this A/C at the time on their return to
Bangladesh. This A/C can also be opened by debating the balance of exciting
F/C (wage earner) A/C. The A/C holder can freely repatriate the principal
amount and the interest.

D. F/C Exporter A/C (Retention Quota):

According to the Bangladesh Bank’s order firm or company who is engage in

exporting goods to abroad can retain 7.5% of their exports proceeds to this A/C.
This fund can be utilized to develop their business or to meet up the cost of their
import to support the export.
Term Deposit Receipts (TDR):

This account is quite similar to our general GDR A/C. here the A/C need to open
theA/C with foreign currency. This is also opened for a period of time like
1/3/6/12 months or more basis with auto renewal term.

Interest on F/C Account:

In previous time interest is provided to F/C account but recently NBL has
stopped to provide interest in F/C account except NFDC and TDR because now
Bangladesh Bank also do not provide any interest on the balance of F/C kept
by the authorized dealer. The interest rate of NFCD and TDR (as on 30th June
2009) is given below:

Table: 6 interest rate of NFCD and TDR

CURRENCY 1 MONTH 3 MONTHS 6 MONTHS 1

US$ 0.05% 0.05% 0.48%

GBP 0.00% 0.00% 0.35%

EURO 0.00% 0.03% 0.52%

Requirement to open F/C A/C:

The following supplementary papers are required to open F/c accounts:

1. Application for opening F/C A/C.

2. A/c opening form
3. Declaration form.
4. Letter of authority.
5. Nominee declaration from with Photographs (F/C and RFCD)Cs:
6. Proof of Income
7. Photocopy of passport.
8. KYC form.
9. Job / Tax payee Certificate.

These entire documents should be attested by appropriate body or persons.

Table:7 F/C Account opened in the first four month of 2010 in Kawran
Bazar Branch

A/c Month Jan Feb Mar

F/C Gen 9 2 4

RFCD 11 4 7

NFCD – – –

TDR – – –
 During the first four month F/C general and RFCD A/C opened totally 21 and
27 respectively. This is because many people traveled in different countries
during the last four months and bought dollars from aboard with which they
opened RFCD A/C. On the other had many BD nationals who are working
aboard send their earning and saving due to down turn in the global company.
During the last four months on NFCD and TDR A/C is opened in Kawran Bazar
Branch.

FOREIGN BILLS COLLCETION (FBC):

When a Clients presents a foreign cheque of FDD, first it is registered in the

FBC register with a FBC no, date, beneficiary details with A/C no, and
particulars of the instrument. Then the instrument is sent to the foreign collecting
bank (Gen: NBL uses Standard Chartered Bank for collection) with a forward
letter by endorsement seal o “pls pay to the Standard Chartered Bank, USA.
When the bill is collected the collecting bank cr. NBL’s NOSTRO A/C
maintained with them and sent an advice to NBL’s International Division (ID)
about the collection. Then ID sends an advice to Kawran Bazar‘s F/C A/C and
then the party’s A/C is credited and the debited the ID A/C.

LAST SIX MONTH FBC OF THIS BRANCH:

Table: 8 In November 2009 to April 2010 Foreign Bills collection are given
below:

Nov Dec Jan Feb Mar.

13675 16653 18014 5876 12283

FOREIGN BILL PURCHASE (FBP).

According to the party’s reputation Karwan Bazar purchase foreign cheque of

clients then FBC becomes FBP. During FBP collection enough risk is involved
because in FBP client gets the fund before collection of the instrument and the
collecting Bank also credits the NOSTRO A/C before getting the processed. So,
bank has to take measures to prevent frauds of receiving any collection item.
During foreign bill purchase bank asks the following papers.

 Personal guarantee of client.

 Indemnity Bond from Third Party.
 C-from Declaration.

LAST SIX MONTH FBP OF THIS BRANCH

Table: 9 LAST SIX MONTH FBP OF THIS BRANCH

Nov Dec Jan Feb Mar.

 36238 33896 9965 7596 32835

PROVIDING FOREIGN BANK GUARANTEE:

Providing foreign Bank Guarantee is another important job of foreign remittance

section of Kawran branch. When an international party engages in any
development activity of our country then they has to provide local bank
guarantee as required by the local work provider. In this situation many foreign
banks seeks local bank guarantee by NBL to support their clients. NBL earns a
lot of commission from these services.

DOLLAR INVESTMENT THROUGH BOND:

Any F/C account holder can invest their dollar by purchasing premium Bond or
US dollar Investment Bond. The interest rate in premium bond is 7.5% and US
dollar investment bond is 6.5%. The requirement of purchasing these bonds is
that bond may be issued only in the name of a holder of a holder a non resident
account against remittance from abroad to the account.

SETTLEMENT OF FOREIGN BILLS UNDER INTERNATIONAL CARDS:

NBL offers International Credit Card for RFCD/ FC ge/ERQ A/C holders by
which they can easily pay their international dues or payments and then again
after getting dollar they can deposit the same to the account. The current
interests on the loan by credit card are 16%.

OPENING STUDENT FILES:

Students who is about to go for higher education needs to transfer remittance

to the foreign universities. But as they are not by Bangladesh Bank to carry the
foreign currency directly with them so to remit the educational and
accommodation fees they have to open a student file in NBL. The requirement
to open a student file following papers is needed:

1. Application in a plain paper.

2. Original and photocopy of admission letter/ offer issued by the
educational institute in the name of the student.
3. Original and Photocopy of estimate relating to annual tuition fees, living
expense, and incidental expenses.
4. Attested copies of all educational certificates of the student.
5. Valid passport and visa.
6. Attested two passport size photographs.
7. Application for purchasing foreign currency for studying purchase.
8. To open a student file in NBL TK. 3000 is required. All of these student
file should be reported to Bangladesh Bank with “TM” form in E3/P3
schedule.
 ISSUANCE OF CERTIFICATES:

On the demand of clients sometimes various certificates are issued in favor of

the clients from foreign remittance section. Some of these certificates are:

 Proceeds Realization Certificate: This certificate is issued in favor of the client

to show how much proceeds is gained and the amount of Income tax realized
from the clients which will be reported to the Bangladesh Bank.
 Encashment Certificate: This certificate is issued when some foreign currency
from any F/C A/C is converted into TK. In favor of the client and should be
reported in FCR-1 or FCP-6 in the related months.
 VAT Certificate: This certificate is issued in favor of the client to show how
much fund has been realized from him as VAT, which should be reported to
BB with a challan no, date, and amount deducted.

DOLLAR ENDORSEMENT:

When anybody wants to go aboard for traveler study purpose then they need to
purchase dollar from banks by endorsement. A person can carry $500 by road
and $1000 by Air for SAARC countries for a year. Other than SAARC countries
she/he can carry $3000 for a year where $2000 by cash and $1000 by TC. All
these endorsement must be reported to Bangladesh Bank with TM from in
appropriate schedule.

Procedure of the Dollar Endorsement:

 Client who go to abroad he/ she seen his passport and then officer give a TM
form.
 Client filled up TM from and gives the officer.
 Officer matches the signature of the passport and TM form signature.
 When signature was match then he took his passport and passport’s first five
page photocopy and TM from.
 Then he gives the entry in the computer. Here he/ she record the name of the
pass porter, passport no, dollar amount, location that client gone.
 Officer then give a money receipt in client that paid in the account department.
 When client paid the amount then officer gives the client passport, certificate
and dollar. Here note that dollar are restricted in different countries such as
for go to India a person can get at a time maximum 200 dollar and a year he/
she can five 1500 dollar.
 At the day ending it can recorded in the Bangladesh bank one schedule that
name is E3/P3 schedule.
 And at the month ending it can sent in the Bangladesh Bank at a performance
of the bank in this sector.
List of Important Banking Abbreviations is given below:

Terms Banking Abbreviations

ACF Auto Correlation Function

AD Authorised Dealer

ADB Asian Development Bank

ADR American Depository Receipt

AFS Annual Financial Statement

AIRCSC All India Rural Credit Survey Committee

ASSOCHAM Associated Chambers of Commerce and Industry of India

BIS Bank for International Settlements

BoP Balance of Payments

BSCS Basel Committee of Banking Supervision

BSR Basic Statistical Returns

CAD Capital Account Deficit

CAG Controller and Auditor General of India

CC Cash Credit

CD Certificate of Deposit

CR Ratio Credit Deposit Ratio

CF Company Finance

CFRA Combined Finance and Revenue Accounts

CGRA Currency and Gold Revaluation Account

CII Confederation of Indian Industry

CO Capital Outlay

CP Commercial Paper
CPI Consumer Price Index

CR Capital Receipts

CRAR Capital to Risk-Weighted Asset Ratio

CRR Cash Reserve Ratio

CVC Central Vigilance Commission

DBOD Department of Banking Operations and Development

DCB Demand Collection and Balance

DCCB District Central Co-operative Bank

DCM, RBI Department of Currency Management, RBI

DD Demand Draft

DEIO Department of External Investments and Operations

Terms Banking Abbreviations

DGCI&S Directorate General of Commercial Intelligence and Statistics

DI Direct Investments

DICGC Deposit Insurance and Credit Guarantee Corporation of India

DID Discharge of Internal Debt

DMA Departmentalized Ministries Account

DRI Differential Rate of Interest Scheme

DSBB Dissemination Standards Bulletin Board

DVP Delivery Versus Payment

ECB External Commercial Borrowing

ECB European Central Bank

ECGC Export Credit and Guarantee Corporation

ECS Electronic Clearing Scheme

EDMU External Debt Management Unit

EEA Exchange Equalization Account

EEC European Economic Community

EEFC Exchange Earners Foreign Currency

EFR Exchange Fluctuation Reserve

EXIM Bank Export Import Bank of India

FCA Foreign Currency Assets

FCCB Foreign Currency Convertible Bond

FCNRB(B) Foreign Currency Non- resident (Banks)

FCNRA Foreign Currency Non Resident Account

FCNRD Foreign Currency Non Repatriable Deposit

FDI Foreign Direct Investment

FEMA Foreign Exchange Management Act

FI Financial Institution

FICCI Federation of Indian Chambers of Commerce and Industry

FII Foreign Institutional Investor

FIMMDA Fixed Income Money Market and Derivatives Association of India

FISIM Financial Intermediation Services Indirectly Measured

FLAS Foreign Liabilities and Assets Survey

FOF Flow of Funds

FPI Foreign Portfolio Investment

FRA Forward Rate Agreement

FRN Floating Rate Note

GDP Gross Domestic Product

GDR Global Repository Receipt

G-Sec Government Securities

IBRD International Bank for Reconstruction and Development

IDRBT Institute for Development and Research in Banking Technology

IEPF Investors Education and Protection Fund

IFSC Indian Financial Sysytem Code

IFC Indian Financial Corporation

IFCI Industrial Finance Corporation of India

IIBF International Institute of Banking and Finance

IIBI Industrial Investment Bank of India

IFC International Finance Corporation

IFR Investment Fluctuation Reserve

IIP Index of Industrial Production

IMF International Monetary Fund

IP Interest Payment

ISDA International Swaps and Derivative Association

ISO International Standards Organisation

KYC Know Your Customer

KVP Kissan Vikas Patra

KVIC Khadi and Village Industries Corporation

LAF Liquidity Adjustment Facility

LAS Loans and Advances by States

LDB Land Development Bank

LERMS Liberalised Exchange Rate Management System

M1 Narrow Money

M3 Broad Money

MA Moving Average

MCA Ministry of Corporate Affairs

MIGA Multilateral Investment Guarantee Agency

MSS Market Stabilisation Scheme

NABARD National Bank for Agriculture and Rural Development

NBFC Non Banking Financial Companies

NEC Not Elsewhere Classified

NEER Nominal Effective Exchange Rate

NFA Non Foreign Exchange Assets

NFD Net Fiscal Deficit

NHB National Housing Bank

NIF Note Issuance Facility

NPA Non Performing Assets

NPV Net Present Value

NSSF National Small Savings Fund

OD Over Draft

OECD Organisation for Economic Cooperation and Development

OLTAS Online Tax Accounting System

PACS Primary Agriculture Credit Societies

PD Primary Deficit

RD Revenue Deficit
RE Revenue Expenditure

REER Real Effective Exchange Rate

RIB Resurgent India Bonds

RLA Recoveries of Loans and Advancements

RTC Repayment of Loans to Centre

RoC’s Registrars of Companies

RR Revenue Receipts

RRB Regional Rural Bank

RTP Reserve Tranche Position

RUF Revolving Underwriting Facility

RWA Risk Weighted Asset

SCARDB State Co-operative Agriculture and Rural Development Bank

SCB State Co-operative Bank

SCB Scheduled Commerical Bank

SDDS Special Data Dissemination Standards

SDR Special Drawing Right

SEBI Securities Exchange Board of India

SFC State Financial Corporation

SIDBI Small Industries Development Bank of India

SIDC State Industrial Development Corporation

SLR Statutory Liquidity Ratio

SMG Standing Monitoring Group

SNA System of National Accounts

TB’s Treasury Bills

TC Temporary Change

TT Telegraphic Transfer

UCN Uniform Code Number

UTI Unit Trust of India

WPI Wholesale Price Index

YTM Yield to Maturity

ADB=Asian Development Bank
AGM= Annual General Meeting
ALCO= Assests Liability Committiee
ATM= Automated teller machine
BACH= Bangladesh automated Clearing House
BACPS= Bangladseh Automated Cheque Processing System
BALCO= Branch Anti-Money Laundering Compliance Office
BB=Bangladesh Bank
BCP= Basel Core Principle
BEFTN= Bangladesh Electronic Fund Transfer Network
BRPD= Banking Regulatory Policy Department
CAD= Credit Administrative Department
CAMELS= Capital Assests Management Earning Liquidity Securities Annalysis
CAR=capital Adequecy Ratio
CBA= Collecting Barganing Agent
CCU= Central CompliUnit
CIB=Credit Information bureau
CIF=Customer Information Form
COI=Control Of Insurance
CRAB=Credit Rating Agency of Bangladesh
CRISL=Credit rating Information service Ltd
CRM= Credit Risk Management
CRR=Cash Reserve Requirement
CTR= Cash Trabsaction Report
DD=Demand Draft
DDA=Direct Deposit Access
DMB= Deposit Money Bank
DSCR= Debth Service Gover Ratio
EFT= Elctronic Fund Transfer
EGM= Extra- ordinary General Meeting
EPB= Export Information Bureau
EPB= Export Promotion Bureau
EPS=Earning Per Share
FDA= Fixed Deposit Account
FDBP= Foreign Development Bill Purchase
FDD= Foreign Demand Draft
FDD= Foreign Demand Draft
FIs=Financial Institutions
FIU= Financial Intelligent Unit
FSRP= Financial Sector Reform Project
FSS= Financial Spread Sheet
IBC= Inward Bill For Collection
ICC= International Chamber of Commerce
ICDEP= Interest During Construction Period
IMF=International Monetary Fund
IPO= Initial Public Offering
KYC= Know Your Customer
LAAB= Laon Against Accepted Bill
LDBP= Local Development Bill Purchase
LIM+ Laon against Imported Merchandise
LRA+ Lending Risk Annalysis
LTR= Loan Against Trust Receipt
LTV=Loan To value
MDGs=Millennium Development Goals
MICR= Magnetic Ink Character Recognition
MRA=Micro-credit Regulatory Ratio
MTCN= Moneu Trabsfer Control number
MTD= Money Term Deposit Account
NFCD= Non Resident Foreign Currency deposit
NIM=New Issue Market
NPL= Non Performing Loan
NPL= Non Performing Loan Account
NPV= Net Present value
OBC= outward Bill for Collection
PDC+= Product development Council
PES= Price Earning Ratio
POS= Point Of Sale
REER= Real Effecting Exchange Rate
Repo= Re-purchase
RJSC= Registrar of Joint Stock Company
RTGs= real Time Gross Settlement
RWA=Risk weighted Assest
SBS= Schedule Banking Statistics
SEC= Securities and Exchange commission
SLR=Statutory liquidity ratio
SMA= Special Mention Account
SS= Sub-standard
STL=Short Term Loan
STR= Suspicious Transaction Report
SWIFT= Society for World Wide Inter financial Telecomunication
UCPDC+ uniform Customs and Practices for Documentary Credits
Terms in this set (40)
All federally chartered banks must be corporations.

True

Commercial banks offer their services only to businesses.

False

Record keeping is an important part of securing your money in a bank.

True

Credit cards issued by banks are a form of lending.

True

It is illegal for banks to charge higher interest rates for loans than they pay depositors.

False

Generally speaking, banks offer customers fewer services today than they did 20 years ago.

False

A credit union is a non-for-profit organization.

True

Money is a medium of exchange for people to use to trade things of value.

True

There was no form of paper currency in colonial America.

False

In the absense of a national banking system, state banks grew in number and influence in the early
years of the United States.

True

The National Banking Act of 1864 founded an adaptable, flexible system of central banking for the
United States.

False

An increase in the money supply and incomes often causes prices to go up as well.

True

By law, every bank in the United States must be part of tbe Federal Reserve System.

False

One of the main functions of the Federal Reserve is to serve as a bank of other banks.
True

The flow of money has a direct effect on how the economy performs.

True

Liquidity is variable, depending on the nature of the asset.

True

The agreed-upon value of money in the United States today is based on the government's supply of
gold at Fort Knox, Kentucky.

False

Banks can loan customers the money it has on deposit, minus the reserve requirement.

True

A dollar bill represents an obligation of the government to provide a commodity of value to you.

True

Generally speaking, when interest rates are high more credit is accessible and the economy tends to
grow quickly.

False

The prime rate is usually the same among major banks.

True

Most banks offer essentially the same types of accounts.

True

A transaction account allows transactions to occur at any time and in any number.

True

Basic checking accounts pay interest on the balance deposited in the account.

False

Banks may require up to a seven-day notice from a depositor who wants to withdraw money from a
time deposit.

True

Principal is the price paid for using money.

False

Banks are free to change governing documents, but they must give customers written notice of
changes.

True

Check use in the United States is beginning to decline.

True

A check cannot be negotiated until it has been endorsed.

True

A full endorsement limits both the transferability and the further negotiability of a check.

False

You must pay off your credit card account in full at the end of every month.

False

The fastest-growing segment of banking security issues involves safeguarding the technology that
makes doing business possible.

True

Fraud prevention occupies more resources of the banking industry than any other activity except
routine processing.

True

Personal loans do not require that a specific purpose be stated.

True

The amount a borrower pays to use the principal of a loan is called a fee.

False

Subprime rates are higher-than-normal interest rates offered to a less-than-perfect credit applicant.

True

If a credit applicant has opened many new accounts recently, thar is probably a sign that the
applicant is very creditworthy.

False

Paying off a loan early saves the consumer no money if the sum-of-digits method has been used to
figure finance charges.

True

One consequence of credit overextension is a ruined credit rating.

True

The Truth in Lending Act prohibits bill collectors from using deceptive or abusive tactics.

False.
Banks are only lenders of money to customers.
False. Banks are both borrowers and lenders of money. As borrowers they pay interest and as lenders,
they grant loans and get interest.
Money lenders are institutional sources of agricultural credit.
False. Money lenders are non-institutional sources of rural credit.
Agricultural credit enhances the capacity to buy the physical inputs needed for agricultural production.
True.
Interest is the extra money paid by the borrower to the lender.
True.
If the interest charged for 18 months is 0.15 times the money borrowed, then the rate of interest per year
is 12%.
False
Let the money borrowed be Rs. 100.
Interest (I) charged = 0.15 × Rs. 100 = Rs. 15
Rate of interest ={100×15}{(100×1.5)}×100 =10%
If the interest charged for 18 months is 0.15 times the money borrowed under simple interest, then the rate
of interest per year is _______

10%.
Let the money borrowed be Rs. P.
Interest (I) charged =0.15×Rs.P=Rs.0.15P
Using I = PRT100 and substituting P = 0.15P , T = 1.5 years (18 months) we get
0.15P = PR(1.5)100
Solving we get R = 10%

Some Important Questions:

Question: Which of the following is not a local bank? Ans: Habib Bank Ltd.
Question: Which banks starts telephone banking in Bangladesh firstly? Ans:
Standard Chartered Bank
Question: Which is the first privatized bank of Bangladesh? Ans: AB Bank Ltd.
Question: How many specialized banks in bangladesh at present? Ans: 5
Question: Which of the following is not a commercial Bank? Ans: Bangladesh Shilpa
Bank
Question: Bangladesh Development Bank establish in– Ans: 3 January 2010
Question: How many commercial banks are there in Bangladesh? Ans: None of
these
Question: What is the name of central Bank of Bangladesh? Ans: Bangladesh Bank
Question: IPO stands for– Ans: Initial Public Offering
Question: Which of the following is not the functions of central bank? Ans: receiving
diposit
Question: ‘Blue Chips’ are– Ans: Industrial shares considered to be a safe
Investmant
Question: In which year was Southeast Bank established? Ans: 1995
Question: When was ‘Bank of England’ established? Ans: in 1694
Question: The oldest private foreign Bank of our country: Ans: Standard Chartered
Bank
Question: When was the London Banker’s clearing house, the first clearing house of
the world established? Ans: in 1845
Question: Grameen Bank is– Ans: an NGO
Question: Which is an investment bank in the public sector? Ans: None of these
Question: How do commercial banks create money? Ans: by making loans to
customers
Question: What Type of bank is the Exim Bank? Ans: Commercial
Question: Dhaka Bank Ltd. started to provide Islamic banking services in the year–
Ans: 2006
Question: Which of the following Nationalized Commercial Bank of Bangladesh is
privatized firstly? Ans: Rupali Bank Ltd.
Question: How many schedule banks in bangladesh at present? Ans: 48
Question: What is the most abundant form of money (measured by value) in a
developed economy? Ans: bank deposits
Question: The first private sector bank in bangladesh is– Ans: AB Bank Ltd.
Question: A ‘bear market’ means, that share price are– Ans: falling
Question: In a closed economy, if the income velocity of circulation of money
remains constant,what will be the result of an increase in the money supply? Ans: a
proportionate increase in the level of money income
Question: The founder of the Grameen Bank is– Ans: Professor Mohammad Yunus
Question: Which of the following is true about Dhaka Bank Ldt.? Ans: None of these
Question: Money can be easily acquired and disposed of without high costs and with
relative certainty as to its value. Ans: liquidity
Question: What will result in an increase in the transaction demand for money? Ans:
an increase in the proportion of workers paid monthly, rather than weekly
Question: Other things remaining unchanged, what is likely to be a consequence of
an increase in net cash withdrawals from the commercial banks? Ans: a restriction in
the ability of the commercial banks to lend
Question: Devaluation of money results in an increase in– Ans: Export
Question: Which not of the following is not a naionalised Commercial Bank(NCB)?
Ans: AB Bank Ltd.
Question: How many foreign banks in bangladesh? Ans: 9
Question: Dhaka Stock Exchange established in— Ans: 28 April 1954
Question: In which circumstance will an increase in the public sector deficit not lead
to an increase in the money supply other things being equal? Ans: The deficit is
financed by an increase in government borrowing from private individuals
Question: Which of the following banks has recently been declared to be a Public
Ltd. Co.? Ans: Sonali
Question: BASIC Bank Ltd. started its operation in the year– Ans: 1989
Question: ‘Pari Passu’ means– Ans: Ranking equally
Question: Which organization is the regulator of the capital market? Ans: Securities
and Exchange Commission
Question: What is the former name of the Sonali Bank Limited? Ans: National Bank
of Pakistan
Question: An/a — payment is made out of gratitude moral obligation, kindness rather
than to fulfil a legal oblization. Ans: Ex garation
Question: Which is the first foreign bank in Bangladesh? Ans: Standard Chartered
Bank
Question: Who had earlier offered to buy out the majority shares of Rupali Bank?
Ans: Prince Bandar Bin Mohammed
Question: Which of the following is the function of commercial bank? Ans:
Acceptence of deposit
Question: National Bank Limited starts its operation in Bangladesh? Ans: 23 March
1983
Question: Jamuna Bank Ltd. started formal operation in Bangladesh in the year–
Ans: 2001
Question: What is the name of Central bank of USA? Ans: Federal Reserve System
Question: In which year was Grameen Bank established? Ans: 1983
Question: Southest Bank is listed in: Ans: Both DSE & CSE

7) What are the different ways you can operate your

accounts?

You can operate your bank accounts in different ways like

a) Internet banking

b) Telephone or Mobile banking

c) Branch or Over the counter service

d) ATM ( Automated Teller Machine)

8) What are the things that you have to keep in concern

before opening the bank accounts?

Before opening a bank account, if it is a saving account, you have to check the
interest rate on the deposit and whether the interest rate remains consistent
for the period. If you have the checking account, then look for how many
cheques are free to use. Some banks may charge you for using paper cheques
or ordering new cheque books. Also, check for different debit card option that
is provided on opening an account and online banking features.

9) What is ‘Crossed Cheque’ ?

A crossed cheque indicates the amount should be deposited into the payees
account and cannot be cashed by the bank over the counter. Here in the
image, number#2, you can see two cross-lines on the left side corner of the
cheque that indicates crossed cheque.
10) What is overdraft protection?

Overdraft protection is a service that is provided by a bank to their customer.

For instance, if you are holding two accounts, saving and credit account, in the
same bank. Now if one of your accounts does not have enough cash to
process the cheques, or to cover the purchases. The bank will transfer money
from one account to another account, which does not have cash so to prevent
check return or to clear your shopping or electricity bills.

11) Do bank charge for ‘overdraft protection’ service?

Yes, bank will charge on ‘overdraft protection’ services but the charges will be
applicable only when you start using the service.

12) What is (APR) Annual Percentage Rate?

APR stands for Annual Percentage Rate, and it is a charge or interest that the
bank imposes on their customers for using their services like loans, credit
cards, mortgage loan etc. The interest rate or fees imposed is calculated
annually.

13) What is ‘prime rate’?

Basically, ‘prime rate’ is the rate of interest that is decided by nations (U.S.A)
largest banks for their preferred customers, having a good credit score. Much
‘variable’ interest depends on the ‘prime rates’. For example, the ‘APR’ (Annual
Percentage Rate) on a credit card is 10% plus prime rate, and if the prime rate
is 3%, the current ‘APR’ on that credit card would be 13%.
14) What is ‘Fixed’ APR and ‘Variable’ APR?

‘APR’ (Annual Percentage Rate) can be ‘Fixed’ or ‘Variable’ type. In ‘Fixed APR’,
the interest rate remains same throughout the term of the loan or mortgage,
while in ‘Variable APR’ the interest rate will change without notice, based on
the other factors like ‘prime rate’.

15) What are the different types of banking software

applications are available in the Industry?

There are many types of banking software applications and few are listed
below

a) Internet banking system: Internet banking allows the customers and

financial institution to conduct final transaction using banks or financial
institute website.

b) ATM banking (Automated Teller Machine): It is an electronic banking

outlet, which allows customers to complete basic transaction.

c) Core banking system: Core banking is a service provided by a networked

bank branches. With this, customer can withdraw money from any branch.

d) Loan management system: The database collects all the information and
keeps the track about the customers who borrows the money.

e) Credit management system: Credit management system is a system for

handling credit accounts, assessing risks and determining how much credit to
offer to the customer.

f) Investment management system: It is a process of managing money,

including investments, banking, budgeting and taxes.

g) Stock market management system: The stock market management is a

system that manages financial portfolio like securities and bonds.

h) Financial management system: Financial management system is used to

govern and keep a record of its income, expense and assets and to keep the
accountability of its profit.
16) What is the ‘cost of debt’?

When any company borrows funds, from a financial institution (bank) or other
resources the interest paid on that amount is known as ‘cost of debt’.

17) What is ‘balloon payment’?

The ‘balloon payment’ is the final lump sum payment that is due. When the
entire loan payment is not amortized over the life of the loan, the remaining
balance is due as the final repayment to the lender. Balloon payment can
occur within an adjustable rate or fixed rate mortgage.

18) What is ‘Amortization’?

The repayment of the loan by instalment to cover principal amount with

interest is known as ‘Amortization’.

19) What is negative Amortization?

When repayment of the loan is less than the loans accumulated interest, then
negative Amortization occurs. It will increase the loan amount instead of
decreasing it. It is also known as ‘deferred interest’.

20) What is the difference between ‘Cheque’ and ‘Demand

draft’?

Both are used for the transfer of the amount between two accounts of same
banks or different bank. ‘Cheque’ is issued by an individual who holds the
account in a bank, while ‘Demand draft’ is issued by the bank on request, and
will charge you for the service. Also, demand draft cannot be cancelled, while
cheques can be cancelled once issued.

21) What is debt-to-Income ratio?

The debt-to-income ratio is calculated by dividing a loan applicant’s total debt

payment by his gross income.

22) What is adjustment credit?

Adjustment credit is a short-term loan made by the Federal Reserve Bank (U.S)
to the commercial bank to maintain reserve requirements and support short
term lending, when they are short of cash.

23) What do you mean by ‘foreign draft’?

Foreign draft is an alternative to foreign currency; it is generally used to send

money to a foreign country. It can be purchased from the commercial banks,
and they will charge according to their banks rules and norms. People opt for
‘foreign draft’ for sending money as this method of sending money is cheaper
and safer. It also enables receiver to access the funds quicker than a cheque or
cash transfer.

24) What is ‘Loan grading’?

The classification of loan based on various risks and parameters like

repayment risk, borrower’s credit history etc. is known as ‘loan grading’. This
system places loan on one to six categories, based on the stability and risk
associated with the loan.
25) What is ‘Credit-Netting’?

A system to reduce the number of credit checks on financial transaction is

known as credit-netting. Such agreement occurs normally between large
banks and other financial institutions. It places all the future and current
transaction into one agreement, removing the need for credit cheques on
each transaction.

26) What is ‘Credit Check’?

A credit check or a credit report is done by the bank on a basis of an

individual’s financial credit. It is done in order to make sure that an individual
is capable enough of meeting the financial obligation for its business or any
other monetary transaction. The credit check is done keeping few aspects in
concern like your liabilities, assets, income etc.

27) What is inter-bank deposit?

Any deposit that is held by one bank for another bank is known as inter-bank
deposit. The bank for which the deposit is being held is referred as the
correspondent bank.

28) What is ILOC (Irrevocable Letter Of Credit)?

It is a letter of credit or a contractual agreement between financial institute

(Bank) and the party to which the letter is handed. The ILOC letter cannot be
cancelled under any circumstance and, guarantees the payment to the party.

It requires the bank to pay against the drafts meeting all the terms of ILOC. It
is valid upto the stated period of time. For example, if a small business wanted
to contract with an overseas supplier for a specified item they would come to
an agreement on the terms of the sale like quality standards and pricing, and
ask their respective banks to open a letter of credit for the transaction.
The buyer’s bank would forward the letter of credit to the seller’s bank, where
the payment terms would be finalized and the shipment would be made.

29) What is the difference between bank guarantee and letter

of credit?

There is not much difference between bank guarantee and letter of credit as
they both take the liability of payment. A bank guarantee contains more risk
for a bank than a letter of credit as it is protecting both parties the purchaser
and seller.

30) What is cashier’s cheque?

A cashier cheque issued by the bank on behalf of the customer and takes the
guarantee for the payment. The payment is done from the bank’s own funds
and signed by the cashier. The cashier cheque is issued when rapid settlement
is necessary.

31) What do you mean by co-maker?

A person who signs a note to guarantee the payment of the loan on behalf of
the main loan applicant’s is known as co-maker or co-signer.

32) What is home equity loan?

Home equity loan, also known as the second mortgage, enables you to borrow
money against the value of equity in your home. For example, if the value of
the home is $1, 50,000 and you have paid $50,000. The balance owed on your
mortgage is $1, 00,000. The amount $50,000 is an equity, which is the
difference of the actual value of the home and what you owe to the bank.
Based on equity the lender will give you a loan.
Usually, the applicant will get 85% of the loan on its equity, considering your
income and credit score. In this case, you will get 85% of $50,000, which is
$42,500.

33) What is Line of credit?

Line of credit is an agreement or arrangement between the bank and a

borrower, to provide a certain amount of loans on borrower’s demand. The
borrower can withdraw the amount at any moment of time and pay the
interest only on the amount withdrawn. For example, if you have $5000 line of
credit, you can withdraw the full amount or any amount less than $5000 (say
$2000) and only pay the interest for the amount withdrawn (in this case
$2000).

34) How bank earns profit?

The bank earns profit in various ways

a) Banking value chain

b) Accepting deposit

c) Providing funds to borrowers on interest

d) Interest spread

e) Additional charges on services like checking account maintenance, online

bill payment, ATM transaction

35) What are payroll cards?

Payroll cards are types of smart cards issued by banks to

facilitate salary payments between employer and employees. Through payroll
card, employer can load salary payments onto an employee’s smart card, and
employee can withdraw the salary even though he/she doesn’t have an
account in the bank.

36) What is the card based payments?

There are two types of card payments

a) Credit Card

b) Debit Card

37) What ACH stands for?

ACH stands for Automated Clearing House, which is an electronic transfer of

funds between banks or financial institutions.

38) What is ‘Availability Float’?

Availability Float is a time difference between deposits made, and the funds
are actually available in the account. It is time to process a physical cheque
into your account.

For example, you have $20,000 already in your account and a cheque of
another $10,000 dollar is deposited in your account but your account will
show balance of $20,000 instead of $30,000 till your $10,000 dollar cheque is
cleared this processing time is known as availability float.

39) What do you mean by term ‘Loan Maturity’ and ‘Yield’?

The date on which the principal amount of a loan becomes due and payable is
known as ‘Loan Maturity’. Yield is commonly referred as the dividend, interest
or return the investor receives from a security like stock or bond, interest on fix
deposit etc. For example, any investment for $10,000 at interest rate of 4.25%,
will give you a yield of $425.

40) What is Cost Of Funds Index (COFI)?

COFI is an index that is used to determine interest rates or changes in the

interest rates for certain types of Loans.

41) What is Convertibility Clause?

For certain loan, there is a provision for the borrower to change the interest
rate from fixed to variable and vice versa is referred as Convertibility Clause.

42) What is Charge-off?

Charge off is a declaration by a lender to a borrower for non-payment of the

remaining amount, when borrower badly falls into debt. The unpaid amount is
settled as a bad debt.

43) What ‘LIBOR’ stands for?

‘LIBOR’ stands for London Inter-Bank Offered Rate. As the name suggest, it is
an average interest rate offered for U.S dollar or Euro dollar deposited
between groups of London banks. It is an international interest rate that
follows world economic condition and used as a base rate by banks to set
interest rate. LIBOR comes in 8 maturities from overnight to 12 months and in
5 different currencies. Once in a day LIBOR announces its interest rate.
44) What do you mean by term ‘Usury’?

When a loan is charged with high interest rate illegally then it is referred as
‘Usury’. Usury rates are generally set by State Law.

45) What is Payday loan?

A pay-day loan is generally, a small amount and a short-term loan available at

high interest rate. A borrower normally writes post-dated cheques to the
lender in respect to the amount they wish to borrow.

46) What do you mean by ‘cheque endorsing’?

‘Endorsing cheque’ ensures that the cheque get deposited into your account
only. It minimizes the risk of theft. Normally, in endorsing cheque, the cashier
will ask you to sign at the back of the cheque. The signature should match the
payee. The image over here shows the endorsed cheque.

47) What are the different types of Loans offered by banks?

The different types of loans offered by banks are:

a) Unsecured Personal Loan

b) Secured Personal Loan

c) Auto Loans

d) Mortgage Loans

e) Small business Loans

48) What are the different types of ‘Fixed Deposits’?

There are two different types of ‘Fixed Deposits’

Special Term Deposits: In this type of ‘Fixed Deposits’, the earned interest on
the deposit is added to the principal amount and compounded quarterly. This
amount is accumulated and repaid with the principal amount on maturity of
the deposit.

Ordinary Term Deposits: In this type of ‘Fixed Deposits’, the earned credit is
credited to the investor’s account, once in a quarter. In some cases, interest
may be credited on a monthly basis.

The earned interest on fixed deposits is non-taxable. You can also take a loan
against your fixed deposit.

49) What are the different types of Loans offered by

Commercial Banks?

Start-Up Loans

This type of Loan is offered to borrower to start their business and can be
used to build a storefront, to acquire inventory or pay franchise fees to get a
business rolling.

Line of Credit

Lines of credit are another type of business loan provided by commercial

banks. It is more like a security for your business; the bank allows the customer
to withdraw the amount from readily available funds in an adverse time.
Customer or Company can pay back over time and withdraw money again
without going into the loan process.

Small Business Administration Loans

It is a Federal Agency (U.S) that gives funding to small businesses and

entrepreneurs. SBA (Small Business Administration) loans are made through
banks, credit unions and other lenders who partners with SBA.
50) What is ‘Bill Discount’?

‘Bill Discount’ is a settlement of the bill, where your electricity bill or gas bill is
sold to a bank for early payment at less than the face value and the bank will
recover the full amount of the bill from you before bill due date. For example,
electricity bill for XYZ is $1000; the electricity bill company will sell the bill to
the bank for 10% to 20% discount to the face value. Here, the bank will buy
the electricity bill for $900 whose face value is $1000, now the bank will
recover, full amount of bill from the customer i.e $1000. If the customer fails to
pay the bill, the bank will put interest on the outstanding bill and ask the
customer for the payment.

51) What is ‘Bill Purchase’?

In ‘Bill Purchase’ the loan will be created for the full value of the draft and the
interest will be recovered when the actual payment comes. For example, a
‘Sight draft’ is presented for which the loan is created for 100% of the draft
value. The money is received after 7 days, and then the interest will be
recovered for 7 days along with the principal amount.

52) What is ‘Cheque Discount’?

Cheque discounting service is offered only by few banks. For instance, if you
have a cheque of $3000 outstation and the cheque will take 7 seven days for
clearance, then bank will offer you a service for early payment. The bank can
make an early payment, but they will pay only for certain percentage of the
actual amount, here they will pay you $2000 but they will charge interest on it
and the remaining $1000 will be paid, once the outstation cheques get clear.

About NBL
 Introduction:
National Bank Limited (NBL) is a Public Company Limited by shares in the
Country, with commendable operating performance. Directed by the mission to
provide prompt and efficient services to clients, NBL provides a wide range of
commercial banking services also. Bank has achieved success among its peer group
within a short span of time with its professional and dedicated team of management
having long experience, commendable knowledge and expertise in convention with
modern banking. With all its resources, the management of the Bank firmly believes
that the Bank would be able to encounter problems that may arise both at micro and
macro economic levels.

NBL incorporated in Bangladesh under company Act 1994. It is also guided by The
Bank Company Act 1991 (and its subsequent amendments) and Bangladesh Bank
Ordinance 1972, so as to enable the company for doing banking business.

Historical Background of NBL:

NBL has been flourishing as the largest private sector Bank with the passage of time
after facing many stress and strain. The members of the board of directors are
creative businessman and leading industrialist of the country. To keep pace with time
and in harmony with national and international economic activities and for rendering
all modern services, NBL, as a financial institution automated all its branches with
network in accordance with the competitive commercial demand of time. Moreover,
considering its forth-coming future the infrastructure of the Bank has been
rearranging. The expectation of all class businessmen, entrepreneurs and general
public is so high. Keeping the target in mind NBL has taken preparation to open new
branches by the year 2006-2007.

The emergence of National Bank Ltd. in the private sector is an important event in
the Banking arena of Bangladesh. When the nation was in the grip of severe
recession, Govt. took the farsighted decision to allow in the private sector to revive
the economy of the country. Several dynamic entrepreneurs came forward for
establishing a bank with a motto to revitalize the economy of the country.

National Bank Limited was born as the first hundred percent Bangladeshi owned
Bank in the private sector. From the very inception, it is the firm determination
of National Bank Limited to play a vital role in the national economy.

The then President of the People’s Republic of Bangladesh Justice Ahsanuddin

Chowdhury inaugurated the bank formally on March 28, 1983 but the first branch at
48, Dilkusha Commercial Area, Dhaka started functioning on March 23, 1983. The
2nd Branch was opened on 11th May 1983 at Khatungonj, Chittagong. Today it has
total 91 Branches all over Bangladesh.
Since the very beginning, the Bank exerted much emphasis on overseas operation
and handled a sizeable quantum of homebound foreign remittance. The Bank
established extensive drawing arrangement network with Banks and Exchange
Companies located in important countries of the world. Expatriates Bangladeshi
wage earners residing in those countries can now easily remit their hard-earned
money to the country with confidence, safety and speed.

In the year 2000, the Bank managed to procure foreign remittance business to the
tune of US$88.44 million dollar equivalent to Tk.4,662.10 million compared to
Tk.3,986.20 million in the previous year indicating a growth of 16.96%

Considering the need for remittance by the expatriates Bangladeshis residing abroad
the Bank during the year established drawing arrangement with the Pacific Bank
Berhad, Malaysia (now May Bank), Security Exchange Company Limited, State of
Kuwait and Dalil Exchange, State of Bahrain.

Our Bank invested 25% equity in Gulf Overseas Exchange Company LLC, a joint
venture Exchange Company in Oman, operating since November, 1985 under the
management of our Bank. The Bank received Riyal Omani 12,450 equivalent to
Tk.1.74 million as dividend for the year 2000.

A Representative Office was established in Yangon, Myanamar in October, 1996 by

our Bank and obtained permission from the Government of Bangladesh to handle
border trade with Myanmar. Opportunities are being explored for further business
avenues there.

Now NBL is on line to establish trade and communication with the Prime
International banking companies of the world. As a result NBL will be able to build
a strong root in international banking horizon. Bank has been drawing arrangement
with well conversant money transfer service agency “Western Union”. It has a full
time arrangement for speedy transfer of money all over the world.

Banking is not only a profit-oriented commercial institution but it has a public base
and social commitment. Admitting this true NBL is going on with its diversified
banking activities. NBL introduced Monthly Savings Scheme, Special Deposit
Scheme, Consumer’s Credit Scheme and Savings Insurance Scheme etc. to combine
the people of lower and middle-income group.

A team of highly qualified and experienced professionals headed by the Managing

Director of the Bank who has vast banking experience operates bank and at the top
there is an efficient Board of Directors for making policies.
Functions of the NBL:
 The main task of the NBL is to accept deposited from various customers
through various accounts.
 Provides loans on easy terms and condition.
 It creates loan deposit.
 The bank invest it fund into profitable sector
 It transfers money by Demand Draft (DD), Pay Order (PO) and Telegraphic
Transfer etc.
 The bank is doing the transaction of bill of exchange, Cheque etc. on behalf
of the clients.
 NBL assists in the Foreign Exchange by issuing Letter of Credit.
 The bank insures the securities of valuable documents of clients.
 It brings the increasing power of dimension of transaction.
 Above all, NBL helps the businessmen financially by giving
discount facility for bill of exchange and by providing the facility of
Letter of Guarantee.

Mission & Vision of NBL:

Mission of NBL:

In line with its vision, NBL has developed a mission statement, which reads as
follows and is self-explanatory:

a) To deliver service excellence to all the customers, both internal and external.

b) NBL will constantly challenge its systems, procedures and training to maintain a
cohesive and professional team in order to achieve service excellence.

c) To create an enabling environment and embrace a team based culture where

people will excel.

d) To maximize shareholder’s value.

Vision of NBL:

The vision of NBL is to become “A Bank for Performance with Potential” by

transforming the way they do business and developing a truly unique financial
institution that delivers superior growth and financial performance and be the most
recognizable brand in the financial service in Bangladesh.

NBL dreams to become the bank of choice of the general public, which includes
both the consumer and the corporate clients. They want to build such an image that
whenever people will think of a bank, they will think of NBL. In order to build up
such an image, NBL has taken up some attractive promotional campaign. They are
targeting the young generation in particular because research has shown that people
usually have a soft corner for the first bank of their lives and tend to stick to it if they
are satisfied with its services. With this plan in mind, NBL is trying to project itself
as a vibrant and dynamic organization by introducing state-of-the-art banking
technology that will make banking easier and hassle-free to the young generation.

Business Principles and Values of NBL:

The NBL Group is committed to the following ‘Business Principles’:

 Outstanding customer service;

 Effective and efficient operations;
 Strong capital liquidity;
 Expense discipline;
 NBL Conservative lending policy;
 Strict also operates according to certain key Business Values:
 The highest personal standard of integrity at all levels;
 Commitment to truth and fair dealing;
 Openly esteemed commitment to quality and competence;
 A minimum of bureaucracy;
 Fast decisions and implementation;
 Putting the Group’s interests ahead of the individual’s;
 The appropriate delegation of authority with accountability;
 Fair and objective employer;
 Merit approach to recruitment/selection/promotion process;
 The promotion of good environmental practice and sustainable development,
and commitment to the welfare and development of each local community;
 A commitment for complying with the spirit and letter of all laws and
regulations
Business Philosophy of NBL:
The philosophy of NBL is to develop the bank into an ideal and unique banking
institution. The perception is that NBL should be quite different from other privately
owned and managed commercial bank operating in Bangladesh. NBL is to grow as
a leader in the industry rather than a follower. The leadership will be in the area of
service, constant effort being made to add new dimension so that clients can get
“Additional” in the matter of services to commensurate with the needs and
requirements of the country’s growing society and developing economy.

The present management has turned the bank into new business philosophy. The
three main businesses that the bank is currently structured in are:

Corporate.

Consumer.

Treasury.
The branches of the bank are now termed as “Customer Service” which are solely
concentrated providing service to the corporate and consumer clients and maintain
relationship with them.

Global economic perspective:

The growth of world economy, according to World Bank’s study on Global

Economic Prospects 2005, has been broadening over the past few years. Real GDP
growth of the world is expected to be 3.20% in the year 2005 which is remarkably
higher than that of the previous years due to improvements in macroeconomic
fundamentals, enhanced structural flexibility, a stronger economic climate and
progress toward reducing trade barriers. However, International Monetary Fund
(IMF) had forecasted 4.30% growth for 2005.

The economic growth had gained momentum and now well entrenched in most of
Asia, which represents a solid starting point for long term growth and in all
possibilities would increase the likelihood of the developing countries to meet their
Millennium Development Goals. If such favorable environment sustains for long,
the developing countries would surely be able to achieve rapid and sustained per
capita growth at a level of 3.50% per annum between 2006 and 2015, which would
enable them to halve the incidence of extreme poverty by 2015.

Global growth rate slowed down to some extent in the year 2005 and is expected to
slide further to 3.20% in the year 2006, mainly due to increase in oil and
commodities price. According to Global Economic Prospects 2005, high oil prices
have dramatically worsened the poverty of the poorest oil importing countries. These
spiraling fuel prices have acted as an impediment to recovery of the world’s
economies of some countries which did not fully participate in the global expansion.
On the other hand, the high fuel prices acted as a moderating influence, where
aggregate demands were already buoyant.

The same study also found that in Asia continent, excepting the South East Asia, the
service sector registered a big climb. This is not surprising because services are
assumed to be income elastic and a relative rise in the share consumption is
understood. This effect is reinforced by the relatively high rate of productivity
growth in manufacturing. In high growth regions in East Asia and South Asia, where
GDP is forecasted to be 5.40% and 6.30% respectively for the year 2005, exists two
contrasting scenario. In South Asia the employment in agriculture shifted mostly to
services, with a small increase in industrial output. In East Asia, employment in
agriculture shifted more evenly between industry and services. However, long-term
growth in South Asia is forecasted to average about 5.50% during 2006-2015 as the
contribution to growth from the private sector continued to rise.
Economic Outlook of Bangladesh:
The Government continued to take necessary measures with a view to recovering
the losses caused by the devastating floods and other natural calamities of the
previous year. Efforts were made to boost export and loans were extended for rapid
and sustainable development and expansion of the Small & Medium Enterprise
(SME). In the year 2005, the country again passed through a year of socio-political
chaos. Series of terrorist activities across the country stifled investors’ confidence
and curtailed the economic activities to some extent. Spiraling oil price in
international market, among others, caused crisis of foreign currency in domestic
foreign exchange market. Besides, increase in interest rate coupled with exchange
rates hampered normal economic growth and left its scar on the country’s economy.

Even with all these adversities brewing around, the country successfully combated
the aftermath of post MFA era. GDP growth is likely to exceed 5.40% in FY 2005.
With the exception of agriculture, the growth in production was broad based
covering wide range of activities in non-crop agriculture, industries and services.
Robust annual growth of manufacturing sector, estimated at 8.50% by the Bureau of
Statistics, is partly the result of strong growth in the fourth quarter. It is reflected in
the movement of quantum index of the manufacturing industries, covering mainly,
medium and large-scale industries, which witnessed about 8.80% growth in the
fourth quarter of FY 2005.

Consumer Price Index (CPI) inflation, according to the study of Economic Trend by
Bangladesh Bank, exhibited a moderate trend during the first half of the year and
showed an upward trend in the second half of FY 2005. The point-to-point inflation
during the year increased from 5.50% in December 2004 to 6.70% in March 2005
and further to 7.40% in June-2005.

Fiscal development in the last quarter of the year followed the pattern observed
during the preceding years, namely both revenue collection and government
expenditure increased at a much faster rate than the preceding quarters, reflecting
strong seasonal impact, while quarterly fiscal deficit also increased which was
financed mainly by increased level of domestic bank and non-bank borrowings.

Following marked deterioration of external current account balance, as well as the

balance of payments position in the third quarter, the performance of the external
sector improved in the fourth quarter due to some slowdown in import demand due
to crisis in the local foreign exchange market and in the face of a rise in the growth
of the export earnings and remittances.

Coming to the banking sector in Bangladesh, available data on the banking system
indicates that the profitability ratios of banks witnessed a healthy improvement
during the year 2005, especially in the fourth quarter. The growth in the operating
profit of the private banking sector in the year 2005 registered at 29% over 2004. On
the other hand, the macroeconomic challenges, faced by the policymakers, were to
facilitate orderly adjustments of exchange rate and interest rate in order to maintain
macroeconomic balance in the face of external sector adversities of continuing
escalation in oil price and post MFA era uncertainties.

Important activities of the Bank

NBL was the first domestic bank to establish agency arrangement with the world
famous Western Union in order to facilitate quick and safe remittance of the valuable foreign
exchanges earned by the expatriate Bangladeshi nationals. NBL was also the first among
domestic banks to introduce international Master Card in Bangladesh. In the meantime, NBL
has also introduced the Visa Card and Power Card. The Bank has in its use the latest
information technology services of SWIFT and REUTERS. NBL has been continuing its
small credit program for disbursement of collateral free agricultural loans among the poor
farmers of Barindra area in Rajshahi district for improving their lot. Alongside banking
activities, The year 2007 marked the addition of yet another golden stair in the chronicle of
NBL’s success story.. The Bank invested 25% equity in Gulf Overseas

Exchange Company LLC, a joint venture Exchange Company in Oman, operating since
November, 1985 under the management of our Bank. The Bank received Riyal Omani 11875
equivalent to Tk.2.10 million as dividend for the year 2006. Now NBL is on line to establish
trade and communication with the Prime International banking companies of the world. As a
result NBL will be able to build a strong root in international banking horizon. Bank has been
drawing arrangement with well conversant money transfer service agency “Western Union“.
It has a full time arrangement for speedy transfer of money all over the world. Banking is not
only a profit-oriented commercial institution but it has a public base and social commitment.
Admitting this true NBL is going on with its diversified banking activities.

Mission

Efforts for expansion of our activities at home and abroad by adding new dimensions to our
banking services are being continued unabated. Alongside, we are also putting highest priority
in ensuring transparency, account ability, improved clientele service as well as to our
commitment to serve the society through which we want to get closer and closer to the people
of all strata. Winning an everlasting seat in the hearts of the people as a caring companion in
uplifting the national economic standard through continuous up gradation and diversification
of our clientele services in line with national and diversification of our clientele services in line
with national and international requirements is the desired goal we want to reach.

Vision

Ensuring highest standard of clientele services through best application of latest information
technology, making due contribution to the national economy and establishing ourselves firmly
at home and abroad as a front ranking bank of the country are our cherished vision.