Pubali Bank Deposit

Overall Banking Performance of Pubali Bank Ltd
STAMFORD UNIVERSITY BANGLADESH
INTERNSHIP REPORT
ON
Overall Banking Performance of Pubali Bank Ltd
SUBMITTED TO
Sanjida Haider
Lecturer
Department of Business Administration (Finance)
Stamford University Bangladesh
SUBMITTED BY
Dalia Akter
BBA (Major in Finance)
ID NO: 02808828
Batch: 28(Q)
Date of Submission: 8th October, 2009
Letter of Transmittal
October 03, 2009.
To
Sanjida Haider
Lecturer
Subject: Submission of the Internship Report.
Dear Madam,
Here is the report of my internship program in Pubali Bank Ltd, Principal branch. I have
truly enjoyed my three months internship program with Pubali Bank
Ltd Principal
Branch and highly appreciate their co operation in this regard. I tried to reflect the
practical operational aspects of the bank, which is complementary to the theoretical
lessons.
I am very much glad that you have given me the opportunity to prepare this report.
So I therefore pray and hope would you be kind enough to accept my internship report
and oblige thereby.
Sincerely yours
(Dalia Akter)
ID BBA-02808890
Major-Finance
Batch-28(Q)
Department of Business Administration
Supervisors Certification
This is to certify that analysis paper titled Overall Banking Performance of Pubali Bank
Ltd, submitted in partial fulfillment of the requirements for the award of the degree in
Bachelor of Business Administration of Stamford University Bangladesh is a record of
the analysis carried out by Dalia Akter, ID No-02808890 under my active supervision
and guidance and that no part of this report has been submitted for the award of the
degree.
I wish her success in the future.
Supervisor
.
Sanjida Haider
Lecturer
Declaration
I, Dalia Akter, student of Stamford University Bangladesh, solemnly affirm and hereby
declare that the analysis report titled Overall Banking Performance of Pubali Bank
Ltd submitted in partial fulfillment of the requirements for the award of the degree in
Bachelor of Business Administration of Stamford University Bangladesh, is my original
work and not submitted for the award of any degree, under the extensive supervision and
guidance of Mr.Sayeed Ahmed (CFO), Pubali Bank Ltd. and Ms.Sanjida Haider, Lecturer
of Business Administration of Stamford University Bangladesh.
Sincerely yours
(Dalia Akter)
ID BBA-02808890
Major-Finance
Batch-28(Q)
Department of Business Administration
Acknowledgement
At the very beginning I would like to express my deepest gratitude to Almighty Allah for
giving me strength and composure to finish the task within the schedule time.
Internship program is an integrate part of BBA degree. Every BBA student is deputed to
different organization to learn something within the pre-stipulated time by observing their
organization daily practices. In this regard my internship was arranged at Pubali Bank
Limited, Principal Branch with deliberate counseling of lecturer Ms. Sanjida Haider,
Faculty of Business Administration, Stamford University Bangladesh. My heartiest
gratitude for her enthusiastic guidance and consideration during the entire phase of the
study made it possible for me to prepare this report.
I could not possibly thank all of those people who have contributed a lot to prepare this
report. They are of course very special people who cannot go without mention.
Further more I want to pay thanks Mr. Sayeed Ahmed (CFO) to give me full support to
acquire knowledge.
Here again I have to mention who receive me as a member of their Banking family in
introduce with me whom I worked last three months. I would like to express my deep
sense of gratitude and thank to all officials and members for all their continuous guidance
valuable knowledge and suggestion during my Internship Program.
Executive Summary
The report is a prepared as part of practical orientation of BBA program a description of
all activities done by Pubali Bank, Principal branch. The report is lively narration of
various banking activities like General Banking, loans and advance management and
foreign trade financing and other ancillary services.
As a conventional bank branch it has a general banking section where the primary task of
deposit collection, maintenance of accounts, cash and all local services are done. It
performs the job of fund management on behalf of the whole bank. Other main duty of
the department is maintenance of the accounts and dealing with the clearinghouse. The
loans and advance section is in charge of proper disbursement of the funds to productive
as well as profitable ventures. The foreign trade department is in charge of foreign trade
financing. The bank work as both issuing bank, negotiating bank and reimbursement
bank to international trading. Remittance of foreign currencies is another important job of
the department.
In this age when management requires proper flow of accurate information to run an
organization successfully than the banks way of information handling is quite outdated
from the view point of sophisticated management information science.
Facts and figures of the branch clearly indicates that the Principal Branch of Pubali Bank
Limited is as well run branch and the trends of graphs shows a sign of improvement and
expansion of activity in all spears of banking.
TABLE OF CONTENTS
SUBJECT
PAGE NO
CHAPTER ONE
12-16
1.1 Introduction
13
1.2 Objective of the Study
14
1.3 Scope of the study
14
1.4 Methodology
15
1.5 Sources of Data
15
1.6 Limitation of the study
16
------------------------------------------------------------------------------------------------------------
CHAPTER TWO
17-22
2.1 History of Pubali Bank Ltd
18
2.2 About Pubali Bank Ltd
19
2.3Present Status of PBL
19
2.4 Vision of Pubali Bank Ltd
22
2.5 Mission of Pubali Bank Ltd
22
-------------------------------------------------------------------------------------------CHAPTER THREE
23-53
Introduction
General Banking
25
26-53
3.1 Introduction
26
SUBJECT
PAGE NO
3.2
Token Issue
27
3.2.1
Procedure
27
3.2.2
Maintenance of the subsidiary registers for receipt of cheques,

drafts
27
3.3
Account Opening Section
29
3.3.1
Classification of Customer
30
3.3.2
Different types of A/C of PBL Principal Office
30
3.3.3
Documents required for opening new account
31
3.3.4
Account opening procedure
31
3.3.5
Precautionary Measures of A/C Opening
32
3.3.6
Formalities for opening Current A/C and STD A/C
32
3.3.7
Formalities for opening Private foreign currency A/C
33
3.3.8
Issue of Duplicate cheque book
34
3.3.9
Formalities maintained for closing an account
35
3.3.10 Interest rate on deposit
36
3.3.11 Learning of This Section
36
3.4
Clearing Section
37
3.5
Local Remittance Section
38
3.5.1
Telegraphic Transfer (TT)
38
3.5.2
Demand Draft ( DD )
40
3.5.3
Pay Order
46
3.5.4
Learning of This Section
48
3.6
Cash
49
3.6.1
Function of cash department
49
3.6.2
Cash Received tools
49
3.6.3
Cash Receiving Procedure
50
3.6.4
Cash Payment tools
50
3.6.5
Cash Payment Procedure
51
3.7 Accounts Department
52
SUBJECT
CHAPTER FOUR
PAGE NO
54-90
Foreign Exchange
4.1
Introduction
56
4.2
International Trade
58
4.3
Function of Foreign Exchange Department
59
4.4
Import Section
63
4.4.1
Importers Application for L/C Limit/Margin
63
4.4.2
The L/C Application
64
4.4.3
IMP-Form
65
4.4.4
Scrutiny of L/C Application
66
4.4.5
Precautions for issuing L/C
66
4.4.6
Amendment of L/C
67
4.4.7
Credit Report on Beneficiary
67
4.4.8
Presentation of the Documents
68
4.4.9
Examination of Documents
69
4.4.10 Handling of Discrepant Import Document
72
4.4.11 Receiving Documents
73
4.4.12 Lodgment & Retirement
73
4.4.13 Payment against document (PAD)
74
4.4.14 Loan against Imported Merchandise (LIM)
75
4.4.15 Loan against Trust Receipt (LATR)
75
4.5
Export Section
76
4.5.1
Back-to-Back L/C
76
4.5.2
Export L/C
78
4.6
Exchange rate and foreign remittance
82
4.6.1
Exchange rate
82
4.6.2
Foreign Remittance
83
4.7
My Learning
90
SUBJECT
PAGE NO
CHAPTER FIVE
91-104
Loans and Advances

5.1 Introduction
92
5.2 Managers Concern
92
5.2.1 How to locate purpose
92
5.2.2 How to locate security
93
5.2.3 How to locate borrower
94
5.3 Advance Secured and Unsecured
95
5.4 Function of Advance Department
95
5.5 Types of Loan
97
5.6 Process of Loan
101
5.7 State of Classification and Provision for 5 Years of PBL
102
------------------------------------------------------------------------------------------------------------
CHAPTER SIX
105-107
6.1 SWOT Analysis
106
------------------------------------------------------------------------------------------------------------
CHAPTER SEVEN
108-112
7.1 Findings
109
7.2 Recommendation
110
7.3 Conclusion
112
-----------------------------------------------------------------------CHAPTER EIGHT
8.1 Acronyms
8.2 Bibliography
113-115
114
115
CHAPTER
ONE
1.1 Introduction
1.2 Objective of the Study
1.3 Scope of the study
1.4 Methodology
1.5 Sources of Data
1.6 Limitation of the study
Introduction
A bank is a financial institution licensed by a government. Its primary
activities include borrowing and lending money. Many other financial
activities were allowed over time.
All over the world the element of Banking has been changing speedily
due
to
Technological
innovation
and
Globalization.
Banking
in
Bangladesh has to keep pace with the global change. Now banks must
complete in the market place both with local institution as well as
foreign ones. To survive ad thrive in such a competitive banking world,
two important requirements are development of appropriate financial
infrastructure
by
Professionalism
the
in
the
central
sense
Bank
of
and
developing
development
and
of
appropriate
manpower structure and its expertise and experience. To introduce

skilled Banker, only theoretical knowledge in the field of banking
studies is not sufficient. An academic course of the study has a great
value when it has practical application in real life situation.
1.2
Objective of the Study
General Objectives:
This study is intended for providing me invaluable practical knowledge about banking
operation system in Bangladesh. The prime objective of the study is to examine the
performance of Pubali Bank Ltd.
Specific Objective:
To accomplish the partial requisite of BBA program and achieve of good

judgment with theoretical base.
To have a revelation on the banking environment of Bangladesh.
To review the consumer banking service and operating system of Pubali Bank
Ltd.
To evaluate the factors affecting performance of the Bank.
To suggest the better ways of enhancing the performance of the Bank.
To make myself confident and active in future to finger my job.
1.3
Scope of the study
This report covers the organizational overview of the Pubali Bank Ltd, Management and
Organizational Structure, functions performed by the Pubali Bank Ltd. It also covers
overview of the general banking, identification of problems regarding general banking, of
The Pubali Bank Ltd. Principal Branch.
1.4
Methodology
While conducting the study, sources were explored for primary information and data. But
hardly any updated data could be found. In the absence of updated information or data
dependence on secondary has been inevitable. However, wherever possibly primary data
has been used. Data were also collected by interviewing the responsible officers and from
some documents & statements printed by the bank and the website of PBL.
There have been used some statistical tools and graphical representation to find out
different types of analytical results and interpretations.
1.5
Sources of Data
The following sources have been used for the purpose of gathering and collecting data as
required.
Primary data
1. Practical desk work
2. Face to face conversation with the officers and clients.
3. Official record of PBL.
4. Data collection of own supervision.
Secondary Data
1. Annul report of PBL.
2. Official files and folders.
3. Working papers
4. Selected books.
5. Published and unpublished documents
6. Memo and circular
7. Website.
Limitation of the study
1.6
The limitation of the study is defined by the extensive of the facts covered by the study
and those that left out. However, these limitations can be presented in the following lines:
The first limitation is that I failed to sketch the complete picture of the Pubali
Banks activities at the period of my internship programmed. So I tried my best to
focus on what I have done and also tried to make it consistent with other part of
the report.
The second limitation is the lack of intellectual thought and analytical ability to
make in a perfect one.
I have to offset with quality due to time constraint, which apparently seems to be
the most severe limitation.
Another limitation of this report in non-availability of the most recent data &
information of different activities of Pubali Bank policy of not disclosing some
data & information for some reasons, which could be very much useful.
In spite of all these limitations, I have tried to put the best effort as far as possible.
CHAPTER
TWO
2.1 History of Pubali Bank Ltd
2.2 About Pubali Bank Ltd
2.3 Present Status of PBL
2.4 Vision of Pubali Bank Ltd
2.5 Mission of Pubali Bank Ltd
2.1
History of Pubali Bank Ltd
The Bank was initially emerged in the Banking scenario of the then East Pakistan as
Eastern Mercantile Bank Limited at the initiative of some Bengali entrepreneurs in the
year 1959 under Bank Companies Act 1913. After independence of Bangladesh in 1972
this Bank was nationalized as per policy of the Government and renamed as Pubali Bank.
Subsequently due to changed circumstances this Bank was denationalized in the year
1983 as a private bank and renamed as Pubali Bank Limited. The Government of the
People's Republic of Bangladesh handed over all assets and liabilities of the then Pubali
Bank to the Pubali Bank Limited. Since then Pubali Bank Limited has been rendering all
sorts of Commercial Banking services as the largest bank in private sector through its
branch network all over the country.
2.2
About Pubali Bank Ltd
Pubali Bank Limited is a scheduled private commercial bank established on May

20.1984. Licensing no Bl/DA/1/84. In exercise of the powers conferred on the
Bangladesh Bank under section 28(1) of the banking companies ordinance 1962 as
adopted in Bangladesh Pubali Bank Limited; Bank authorized to open the branch at 26
Dilkusha commercial area (Local Office) P.S Motijheel district Dhaka. Condition
mention in this office letter no. BCD(D) 200/42(a)/145. The bank has been widely
acclaimed by the business community from small entrepreneurs to large traders and
industrial conglomerates within this very short period of time it has been able to create an
image for itself and has earned significant reputation in the countrys Banking sector as a
bank of vision. Presently it has 371 branches in operations Principal branch is one of the
big and important branches of PBL.
This intended to ensure the trust and confidence of the customers through focused
customers orientation qualities of services and state of art technology.
The company philosophy-A Bank for the 21st century has been precisely the essence of
the legend of the Bank success.
2.3
Present Status of PBL
PBL is one of the largest private sectors Bank in Bangladesh with years of experience.
Adaptations of modern technology both in terms of equipment of banking practice ensure
efficient service to clients.
(a) Capital structure of PBL:
The bank was incorporated as a public limited company under the companies act 1994.
The authorized capital and paid up capital of the bank stood at Tk. 5000 million and Tk.
2940 million respectively in 2008. Out of total 24153 shareholders, Bangladesh
government held 72 shares of Tk. 7200 while taka remaining shares of Tk. 2939.99
million where held by various institutions and individuals.
(b) Management structure:

Organizational Chart of PBL
Chairman
Vice Chairman
Directors
Managing Director
General Manager
Company Secretary
Deputy General Manager

Asst. General Manager
Senior Principal Officer
Principal Officer
Officer
Junior Officer
Cash Officer
Law consultant
(c) Information Technology in Automation:

All the 371 branches have been computerized out of which 268 branches have been
running successfully with the in-house developed software, PIBS (Pubali Integrated
Banking System). Pubali Bank limited has implemented Centralized online Banking
system in the year 2008 through its in-house developed software. In the mean time 10
branches in Dhaka, Chittagong and Sylhet have been brought under online banking
system and more 40 branches will included during 2009. The remaining branches will
brought under online banking system gradually. The bank will also extend services to its
customers through internet Banking and mobile phone bank phase wise shortly. The bank
has developed Islamic Banking Software and 2 (two) Islamic banking wings will be
opened in Dhaka and Sylhet shortly. The bank has entered into the internet world through
its website www.pubalibangla.com and has also been operating Automated trailer
machine(ATM) and Point of sale (POS) services to meet the demand at the time.
(d) Other information:

Number of employees: 5321(annual report-2008)
Number of shareholder: 24153(annual report-2008)
Number of branches: 371(annual report-2008)
Earning per ordinary share: 51.54(annual report-2008)
2.4
Vision of Pubali Bank Ltd
To excel as best private commercial Bank in Bangladesh with meticulous observance of

rules and regulations and commitment to corporate social responsibility.
2.5
Mission of Pubali Bank Ltd
(A) To get recognition as a dynamic, innovative and customer supportive Bank.

(B) To maintain continuous & steady growth with utmost transparency and to diversify
development of resources.
(C) To enhance continuous development of information & technology to meet the
demand and challenges of the time.
CHAPTER
THREE
Introduction
General Banking
3.1
Introduction
3.2
Token Issue
3.2.1
Procedure
3.2.2
Maintenance of the subsidiary registers for receipt of cheques,

drafts
3.3
3.3.1
Classification of Customer
3.3.2
Different types of A/C of PBL Principal Office
3.3.3
Documents required for opening new account
3.3.4
Account opening procedure
3.3.5
Precautionary Measures of A/C Opening:
3.3.6
Formalities for opening Current A/C and STD A/C:
3.3.7
Formalities for opening Private foreign currency A/C
3.3.8
Issue of Duplicate cheque book
3.3.9
Formalities maintained for closing an account
3.3.10 Interest rate on deposit

3.3.11 Learning of This Section
3.4
Clearing Section
3.5
3.5.1
Telegraphic Transfer (TT)
3.5.2
Demand Draft ( DD )
3.5.3
Pay Order
3.5.4
Learning of This Section
3.6
Cash
3.6.1
Function of cash department:
3.6.2
Cash Received tools
3.6.3
Cash Receiving Procedure
3.6.4 Cash Payment tools:

3.6.5
Cash Payment Procedure
3.7 Accounts Department
Introduction
PBL survive and thrive in such a competitive banking world, two important requirements
are development of appropriate financial infrastructure by the central bank and
development of professionalism in the sense of developing an appropriate manpower
structure and its expertise and experience.
PBL has contributed in the economy of the country through their dedicated services,
business partnership and customer care over the last fifty years. They have seen
enormous changes over the period and have continued to keep on adopting to changes
their journey ahead.
They has been widely acclaimed by the business communicate from small entrepreneurs
to large traders and industrial conglomerates. PBL conducts all types of commercial
banking activities. The bank involve in most of the areas of commercial banking
operation. PBL has acted as the lead arranger in raising term loan for a number of
projects under syndicate finance and also participate in some case under such financing
arrangement. The also providing personal credit, service related to local and foreign
remittances and several other product.
PBL entered the market at a time when economic policy environment of the country is
poised for higher levels of business activities and growth. The prevailing macro economic
management and governments determination to carry on reforms in the banking sector
provide a supporting and encouraging environment.
General Banking
Introduction
3.1
General banking is the starting point of all the banking operations. It is the department,
which provides day-to-day services to the customers. Everyday it receives deposits from
the customers and meets their demand for cash by honoring cheques. It opens new
accounts, remit funds, issues bank drafts and pay orders etc. Since bank is confined to
provide the services everyday, general banking is also known as retail banking.
According to World Bank, the general people understand the depositing and withdrawal
of money and credit financing. But Bank performs numerous types of services. To deal
these services bank has to maintain many register/ ledger and documents. Some different
jobs that waive the General banking has shown in the following diagram
General Banking
Token
Issue
Section
3.2
A/ C
Opening
Section
Cheque
Clearing
Section
Token Issue
Local
Remittance
Section
Cash &
Accounts
Section
The token issue department uses a register book and different types of tokens decorated
with different letters for different types of accounts. There are two types of tokens. One is
for savings A/C and another is current / other accounts.
3.2.1 Procedure:
The client will encash money from his account will show his cheque to the respective
officer of the desk. The officer will give him a token with particular number after being
sure of his two signatures on the back of the cheque. The officer will give him a token
with a particular number on the back of the cheque. The client will then proceed on for
encashment. The officer then gives an entry about the token number, account name and
the amount in the column of the register book.
The token will be checked by the responsible officer for maintaining at the end of each
business day. Tokens are then handed over to the supervising official concern to keep
them in a locked box. Tokens are checked once a month by the supervising officer in
charge whether tokens is ok or not. When a token is lost it is informed to the head office
for a matter of precaution.
3.2.2 Maintenance of the subsidiary register for receipt of cheques, drafts :
At the counter every cheque, demand draft and other credit instrument tender for the
credit of the customers account will be delivered. Deposits received by post will sent by
the receiving officer to the bills department against acknowledgment of the dealing
officer.
The dealing officer is concerned here about four types entries. They are
1. Local Clearing
2. IBC (Inter Branch Collection )
3. SC (Short Collection )
4. BT (Bank Transfer)
In case of local clearing one bank sends money by cheque or DD which will be collected
in the name of the account holder of this branch. This cheque or DD will be taken to the
clearing house where agents of all banks exchange these instruments. Important thing is
that the paying Bank must be in the local area (Dhaka).
In case of IBC the branches must be of the same banks for short collection, the paying
banker is in the area other than Dhaka whereas bank transfer will be between two
accounts of the same branch.
The dealing officer of this desk should be aware of the following things about
instruments:
Name of the account is very clearly written on the deposit slip.
Full particulars of the deposit instruments such as cheque numbers, name of bank, etc
are properly recorded on the paying slip as required.
The pay in slip has been signed by the depositor.
Full particulars of the railway receipts and instruments of title goods, bills of exchange,
invoice etc. associated with an inland documentary bill received from the depositors
direct at the counter or by post from other branches/ banks endorsement thereon.
All cheques, bills and other instruments are crossed with crossing seal .
After categorizing all the instruments and checked out the preliminary mandatory things,
the dealing officer gives entries in the appropriate column of subsidiary ledger for
crediting the accounts.
3.3
When a customer want to open a deposit account in bank, he/she will have to go the A/C
opening section to know the rules and regulations for opening account and to have the set
of documents required. Since PBL is an authorized dealer it can open deposit A/Cs
denominated both in Taka and approved foreign currencies.
Deposits are like raw materials out of which credits are created. Deposit accounts are one
of the important sources of funds. In order to attract customers the banks offer different
facilities to various types of account holders. Competition in accepting deposits takes two
forms:
(a) Improvement in customer service
(b) Offer a higher rate of interest.
In our country PCBs and foreign banks are appreciated to attract deposit because of their
superior customer services. PBL principal office branch with its traditions customer
service approaches faces difficulties to draw attention of new customers.
Main functions of account opening are given below:
To give answers to the queries regarding account opening
To supply the appropriate type of account opening form
To put a/c number from a computerized sheet on advice of new account
To input date into computer from a/c opening form.
To maintain and update the a/c opening file for different types of accounts.
To maintain a register for cash type of recording details of a/c opening
To supply deposit slip books and cheque book on requisition
To act on request for closing and transferring of deposit a/c
To act on request for closing and transferring of deposit a/c
3.3.1 Classification of Customer:
a) Individual (personal)
b) Proprietorship (Sole traders)
c) Partnership firms (Register or Unregistered)
d) Joint Stock Companies ( Private Limited and Public Limited )
e) Municipalities/Municipal Corporations/Local Bodies etc.
f) Clubs / Societies / Associations /School / Colleges / Universities etc.
g) Executors /Administrators
h) Trustees
i) Illiterate persons
j) Constituted Attorney
k) Wage Earners
3.3.2 Different types of A/C of PBL Principal Office:
1. Current A/C: Interest free and generously withdrawal.
2. Saving Bank A/C: Interest bearing and checkable with some restriction
3.
Short Term deposit: Usually interest bearing and with draw able on short
notice.
4. Fixed deposit: Interest bearing and definite period like one year or six month.
5. Non Resident foreign currency deposit: All non residents of Bangladesh can
open this interest bearing account in the form of term deposit with a minimum
amount of $1000 or equivalent.
6. Private Foreign Currency A/C: Bangladeshi National residing abroad or
foreign nationals may open this a/c with deposit mode from inward.
7. Convertible Take Amount: A type of non-interest bearing current a/c
designed specially for foreigners living here.
8. Private foreign Currency A/C: Bangladeshi nationals residing abroad or
foreign nationals may open this a/c with deposit mode from inward.
3.3.3 Documents required for opening new account:
1. Documents Common for all types of Account & Customers

a. Advise of New Account
b. Specimen signature cards
c. Account Opening Agreement Form
d. Photographs of Account Holder
e. Deposit Slips Book
f. Cheque book Requisition slips
g. Letter of mandate is required where necessary.
3.3.4 Account opening procedure:
a. Applying in a printed application in a certain stipulated form printed by the bank
itself.
b. Supply a set of printed forms required for opening the account which will
normally include
i)
Advise of new Account
ii)
Specimen Signature Cards
iii)
Account Agreement
iv)
Deposit slip Book
v)
Cheque Book Requisition slip
b. The account should properly introduced by any one of the following

i)
An existing Current Account holder of the bank
ii)
Officials of the Bank not below the rank of an Assistant officer
iii)
A respectable person of the locality well known to the Manager or

Sub- Manger of the Branch concerned.
c. A number of photographs which must be duly attested by the introducer in front

of the manager or responsible officer. The signature of the introducer must be
attested. After being scrutinize the application and the manager or authorized
officer may give his consent to open the account.
d. A package with deposit book, cheque book with a unique A/C No. given to the
Customer maintaining the A/C opening register book.
3.3.5 Precautionary Measures of A/C Opening:
a. Soon after the opening of a new Account a letter of Thanks should be sent to the
introducer.
b.
A letter of thanks as per prescribed should also be sent to the account holder
immediately upon opening the account, under registered post with a/c for
verification of postal address as well as genuineness of the Account holder.
c. In case of a new account is opened a proprietorship / partnership firm, having

local business address, a responsible officer of the branch will inform the firm to
obtain the confidential report on the firm.
3.3.6 Formalities for opening Current A/C and STD A/C:
These accounts are meant for business firms and corporate bodies. Initial deposit
requirement is Tk 5000 in addition to common documents required to open a saving a/c
following additional documents will be required for depending upon the nature of the
organization.
Joint Account of two or more persons

Mandate for Operation of Account: A clear authority by all the joint A/C holders
containing instructions as to who will operate the account and how the account is to
be operated should be obtained. The mandate should mention the name of the
persons authorized to draw check. In case of death, insanity, insolvency of one or
more of the joint a/c holders, the authority will cease to operate:
For sole traders:
i)
Trade license
ii)
A certificate with tax identification number from income tax authority
iii)
Seal
iv)
In case of current account an agreement to accept all responsibilities

for all over draws, interest cost and expenditures
For Partnership firms:

i)
Trade license
ii)
Notarized deed of partnership
iii)
A mended in agreement form regarding operation of the account

signed by the entire partnership firm
iv)
Sale/ Stump of the firms
v)
2 copy photo of all partners
vi)
National ID card photocopy for all partners.
For Private and Public Limited Companies

i)
Memorandum and Articles of association
ii)
Certificate of incorporation
iii)
Certificate of commencement of business if its Public limited
iv)
Copy of board resolution to open a/c certificate by the chairman and

secretary
v)
Power of attorney to operate a/c in favor of any one or more of

directors.
vi)
Balance sheet and income statement
vii)
List of Directors and their address and chairman certificate.
3.3.7 Formalities for opening Private foreign currency A/C:

Foreign Currency account may be opened in US dollar, Pound Sterling, Douche Mark
and Japanese Yen. Credit may be made to this A/C against inward remittance from
abroad. Usually this a/c operated like a current a/c but no checkbook are issued against
his a/c. Withdrawals may be made through withdrawals slips. Interest may be paid on this
a/c if it is maintained in the form of term deposit for a minimum of 90 Days
Bangladeshis living abroad can open even without initial deposit. A nominee can be
appointed.
Documents required: When an eligible person is interested to open an F/C account his
passport is to be checked and signature verified. When he is staying abroad his signature
is to be verified and attested by
i)
Bangladeshi embassy on that country
ii)
His banker in this country
iii)
Notary public of that country
Following documents are needed to:

i)
Photocopy of 1st 4 pages of passport
ii)
Photocopy of visa and work permit
iii)
Nominees photo and account no.
iv)
Declaration of source of income.
v)
National ID card photocopy for both a/c holder& nominee.
3.3.8 Issue of Duplicate cheque book:

Duplicate cheque book in lieu of lost one should be issued only when A/C holder
personally approaches the bank with an application. Fresh Cheque Book in lieu of lost
one should be issued after verification of the signature of the Account holder from the
Specimen signature card and on realization of required excise duty only with prior
approval of manager of the branch. Cheque series number of the new cheque book should
be recorded in ledger card signature card as usual. Series number of lost cheque book
should be recorded in the stop payment register and caution should be exercised to guard
against fraudulent payment.
3.3.9 Formalities maintained for closing an account:
The customer may inform the bank in writing of his/her intension to close the
account.
The customer has to apply to the branch in charge for closing the account. Then the in
charge will remark on the account closing application for closing the account.
By drawing a cheque of the whole amount and a nil balance confirmation to be taken
from the account holder.
Recover the unused cheque leaves and enter into the Broken cheque book register
Remove the account opening form, specimen signature card and all other papers
relating to the closed account.
Remarks of account closing at the ledger folio should be authenticated by the
manager or supervising officials
The banker may itself ask the customer to close the account when the banker finds
that the account is not been operated for a long lime.
If the account is not operated upon for 6 months then the banker will try to do the
bilateral communication with the account holder. But if the banker does not get any
response from the account holder then the account becomes Dormant account.
If the is not the operated upon for 2 years then the account becomes inoperative
account.
A new register for unclaimed deposit account will be maintained called unclaimed
deposit account.
For withdrawal at any amount from tat account, permission from head office or
controlling office wins is required.
3.3.10 Interest rate on deposit:

Interest rate different types of deposit as prescribed by PBL head office from time to time
irrespective of size of deposit
Type of Deposits
a. Saving deposit
. Special notice deposit
c. Fixed Deposit
Interest rates
6.25%
6.50%
8.50%
3 Months
8.00%
6 months
8.25%
1year
8.50%
3.3.11 Learning of This Section:
The signature of the account holder use in all banking activities.
The customer may appoint nominee who can handle his account in case of
holders death even in special circumstances with the permission of the account
holder.
Present and permanent address with fathers or husbands name of the concerned
account holder to be recorded very carefully.
The type of account, the prospective Customer wishes to open should be

determined.
In case of proprietorship or partnership business account proper trade license in

the name of business firm should be obtained.
The required Account Number for the Account from the Account Opening register
should be obtained.
Signature and a/c number of the introducer and gets the signature properly
verified by an authorized officer of the bank.
The deposit slip properly filled in and signed by the customer in duplicate should
be collected.
Have to place the signature cards, advice of new account, a copy of deposit slip
photographs and other necessary papers/documents etc in a file and obtain
approval of the authorized officer for opening the new account.
Get each signature of the Customer/Introducer on the Advice of New a/c and on
the signature cards admitted by the authorized officer of the Bank using a rubber
stamp.
When delivering the cheque book account number, name of customer branch seal
on each leaf of the cheque book have to check carefully..
3.4
Clearing Section
The Cheque Clearing Section of PBL principal office branch sends Inter Branch Debit
Advice (IBDA) to the Head office on the receiving day of the instruments. The main
Branch takes those instruments to the Clearing House on the following day. If the
instrument is dishonored, Head office of PBL, sends IBDA to the PBL, Principal Office
branch. The total procedure takes three days if everything goes orderly.
The Cheque Clearing Section of PBL, Principal Office branch sends Outward Bills for
Collection (OBC) to the concerned Paying Bank to get Inter Branch Credit Advice
(IBCA) from the paying Bank. If the instruments are dishonored by the Paying Bank, the
Paying Bank returns it to the PBL, Local Officer Branch describing why the instruments
are dishonored. The procedure takes around a week.
The Cheque Clearing Section of PBL, Principal office branch sends Outward Bills for
Collection (OBC) to the concerned paying Branch to get Inter Branch Credit Advice
(IBCA) from the paying returns it to the PBL, Local Office branch describing why the
instrument is dishonored.
3.5
Local Remittance is used to transfer of funds denominated in Bangladesh Taka between

banks within the country. It is an order from the Issuing branch to the Drawee Bank/
Branch for payment of a certain sum of money to the beneficiary. The payment
instruction is sent by Telex / Telegram and funds are paid to the beneficiary through his
account maintained with the Drawee branch or through a pay order if no a/c is maintained
with the drawee branch. The cash department does remittance of cash. Instruments of
local remittances at PBL branches are follows
Local Remittance
Telegraphic transfer
Demand Draft
TT
DD
Pay Order
3.5.1 Telegraphic Transfer (TT):

Telegraphic Transfer is a quick mode of remitting funds over telex or Telegram. Now
this term has used as Telephonic Transfer also which is faster than previous one for
money transfer. Following points have to consider for the TT
1. On receipt of T.T payment instructions the following entries are passed by the
Drawee branch if the T.T is found to be correct on verification of Test Number.
i)
Dr. PBL General A/C

Cr Remittance Awaiting Disposal- T.T Payable A/c
ii)
Dr Remittance Awaiting Disposal-T.T Payable A/c

Cr Clients Account P.O. A/C.
If the beneficiary does not maintain any a/c with the Drawee Branch a P.O is
issued in favor of the payee and sent to his banker/local address as stated.
2. Every branch maintains a prescribed T.T. Payable Register. All the particulars of
T.T are to be properly recorded in this Register duly authenticated. A separate type
of T.T confirmatory advice is sent to the Drawee branch on the same day. On
receipt of the T.T Confirmatory advice/confirmation copy of telegram from the
issuing branch, the particulars of the T.T are verified with reference to particulars
already recoded in the T.T payable Register.
The Confirmatory advice are kept attached with the relative Ticket No further
responding entry is required to be passed on receipt of such confirmation copy.
On payment of T.T the particulars are to be incorporated in the Extracts Responding
Debit entries as usual as usual and sent to HORC.
Procedure of Issuing TT
Customers fill
up a printed
application
form.
Cash Dept. receive

cash with commission
@ 15% telex charge
Tk. 40 and issue debit
ticket to L/R
On receiving debit ticket

L.R dept. make entries
into the register & issue
TT and issuing credit
advice in triplicate
LR dept prepares telex

massage in duplicate
for drawee branch and
arrange to send the
same through test key
Dept.
3.5.2 Demand Draft (DD):

Demand Draft is an instrument containing an order of the Issuing branch upon another
branch known as Drawee branch, for payment of a certain sum of money to the payee or
to his order on demand by the beneficiary presenting the draft itself.
Precautions for Demand Draft
1. Get the application form properly filled up and signed by the applicant.
2. Complete the lower portion of the Application form meant for Banks Use.
3. Calculate the total amount payable including Banks commission/charges etc.
4. If a cheque is presented for the payment of the DD officer should get the cheque
duly passed for payment by the competent authority and record the particulars of
DD on the back of the cheque.
5. If the purchaser desires his account with the branch to be debited for the amount
of DD the officer should get the A/c holders signature verified properly, from
signature card on record of the branch and debit clients a/c for the total amount
including commission charges etc.
6. If cash deposit is desired, request the purchaser to deposit the money at the
Tellers counter.
7. The teller, after processing the application form, cash or cheque, will validate the
Application form.
8. The first copy of the Application form is treated as debit Ticket while the second
copy is treated as Credit Ticket and sent to Remittance Department for further
processing. The third copy is handed over to the Applicant as customers copy.
Each branch maintains a running control serial number of their own for issuance of
DD on each Drawee Branch. This control serial number should be introduced at the
beginning or each year which will continue till the end of the year.
Procedure of issuing D.D
Customers fill up a
printed Application
form.
Cash dept. Receive

cash with
commission and
postage stamps.
Cash dept. verified the signature

of the client and checks the
balance of a/c L/R dept. Debit
customers a/c
On receiving IDT or
applicant form with
signature verified
L/R make entries in
to the register and
issue inter bank
credit advice in favor
of Drawee branch
The Remittance Department maintains prescribed DD Issue Register. All the required
particulars of all DD issued should be entered in that Register duly authenticated.
Separate folios are opened for each Drawee Branch. While issuing local Draft of Tk.
50,000/- and above, branches shall put a test number in Red-Ink on the upper portion of
the drafts so that the drawee branch can immediately make payment of the DD on
presentation after getting the Test agreed, if otherwise found in order.
Issuing a Duplicate DD
Duplicate DD should not normally be issued unless thoroughly satisfactory evidence is

produced regarding loss a draft. If the DD reported lost/stolen, a duplicate draft may be
issued by the branch on receipt of a written request from the purchaser.
Before issuing a duplicate DD the branch should observe the following:

1. Verify the Purchase signature on the request letter from the signature appearing
on the original application form.
2. Immediately issue a stop payment instruction to the Drawee branch under advice
to Head Office and obtain confirmation of non-payment of the DD acquisition.
3. After the Drawee branch has acknowledgement the stop payment order and
confirmed that the local draft in acquisition remains unpaid at their and
confirmed that the local draft in acquisition remains unpaid at their end, the
Issuing branch should obtain an Indemnity Bond on stamped paper/letter of
indemnity branch should obtain an Indemnity Bond on stamped paper/letter of
indemnity as per prescribed format from the purchase duly signed by hi,. The
branch will therefore write to Head Office, for their approval to issue a duplicate
draft.
4. The Head Office on receipt of request from the issuing branch will immediately
issue a caution circular to all the branches regarding the loss of the local draft
asking them to record stop payment.
5. The Head Office will therefore issue clearance to the Issuing branch for issuing a
Duplicate draft in lieu of original reported lost.
6.
Receipt of clearance from Head Office, the issuing branch will issue a
completely fresh draft marking clearly the words duplicate issued in lieu of
original draft no. dated.in bold letter on
the top of the front page of the draft. The printer serial number on the draft
should not however be struck off. Intimation should be given to the drawee
branch furnishing full particulars of the Duplicate draft. In case of issue of

duplicate foreign draft (F.D.D) the Reconciliation Department, Head Office
(HORC) should also be informed.
7. The particulars of the duplicate draft resemble those of the original draft in all
respects that is all the particulars to the duplicate draft must be identical with
those in the original draft. No further (Inter Branch Credit Advice) IBCA is to be
issued for the duplicate draft.
8. Prescribed duplicate issuance charge is to be recovered for issuing the duplicate
and credited to income a/c.
Cancellation of Demand Draft

The following procedure should be followed for cancellation of a DD:
1) The purchase should submit a written request for cancellation of the DD attaching
therewith the original DD.
2) The Signature of the purchase will have to be verified from the original
application form on record.
3) Manager/ Sub-Managers permission is to be obtained before refunding the
amount on cancellation.
4) Prescribed cancellation charge is to be recovered from the applicant and only the
amount
of
the
draft
less
cancellation
charge
should
be
refunded.
Commission/Postage etc. Charge recovered for issuing the DD should not be

refunded.
5) The DD should be affixed with a stamps canceled under proper authentication and
the authorized offices signature on the DD should also canceled with Red in but
in no case should be torn. The canceled DD should be kept with the relevant
ticket.
6) The original entries are to be reversed giving proper narration. An (Inter Breach
Debit Advice) IBDA for the canceled DD should be issued on the Drawee branch.
7) Cancellation of the DD should also recorded in the L.D Issue Register.
Payment of DD
1. When a DD is presented for payment at the paying branch its details are to be
carefully examined with references to the following points.
i)
Whether the draft is drawn on their branch
ii)
Whether the draft is crossed or not Amount of a crossed draft is not

paid in cash to the payee but to be paid to his account with a bank.
iii)
Two authorized officials of the Issuing branch must have signed draft.
Their signatures are to be verified from specimen signature book let to
be sure that the draft is genuine. The verifier should out his initials in
red ink against the authorized signature in the draft.
iv)
Endorsement on the back of the draft must be regular in case the draft
is presented through clearing.
v)
The amount of the draft should not exceed the amount protect graphed
written in red ink on the top of the draft.
vi)
The payee is to be properly identified in case of case payment.
vii)
The particulars of the draft i.e. the draft number date amount and the
name of payee, should be verified from the DD payable Register.
2. On payment the DD is affixed with the branches Paid stamps and signatures there
on are canceled with red ink. The data of payment is recorded in the DD payable
register necessary accounting entries are also passed and recoded in the books of
Account.
With IBCA
Dr Remittance Awaiting Disposal L.D payable a/c
Cr. Clients Account/Tellers Cash
With IBCA
a. After receiving without Advice a/c
Cr. Clients a/c/Tellers Cash
b. After receiving the IBCA
i.
Dr. PBL general A/c

Cr Remittances Awaiting Deposit DD payable a/c
ii.
Dr Remittances Awaiting Disposal DD payable a/c

Cr DD Paid without Awaiting Disposal DD payable a/c.
As the draft is issued by the Issuing branch, the payee or purchase of the draft cannot give
stop payment instructions to the Drawee branch. If a paying branch receives any request
from the payee/endorsee or the purchase of a draft for stopping payment of the draft, it
will ask them to approach the issuing branch for the purpose. The paying branch should
however exercise necessary precaution in this regard. Only the Issuing branch can issue
instructions for stop payment of draft under special circumstances. However, if a draft on
which stop payment order is received from a court of law the same should be carried out.
Only the purchase can request the Issuing branch for cancellation of a L.D. The drawee
branch can not cancel a L.D. The Drawee branch can accept cancellation instructions
only from the issuing branch. When a draft is cancelled by the Issuing branch the relative
entry is the PBL general a/c is reversed and IBDA from the Issuing branch, the Drawee
branch should reverse the original liability entries the strength of the IBDA and record
suitable remarks in the L.D payable Register Related IBCA of the draft.
3.5.3 Pay Order:

a. Pay order issue process
For issuing a pay order the client is to submit an Application to the Remittance
Department in the prescribed form (in triplicate) properly filled up and duly
signed by application. The processing of the pay order Application form, despot
of cash/cheque at the Tellers country and finally issuing a order etc, are similar to
those of processing of L.D (loan Draft) Application.
As in case of L.D each branch should use a running control serial number of their
own for issuance of a pay order. This control serial number should be introduced
at the beginning of each year which will continue till the end of the year. A fresh
number should be introduced at the beginning of the next calendar year and so on.
b. Charges
For issuing each pay Order commission at the rate prescribed by Head Office is
realized from the client and credited to Income A/c as usual.
c. Entries
Dr. Tellers Cash/clients a/c
Cr pays Order a/c
Cr commission a/c
d. P.O issue Register
The remittance Department will issue the pay Orders duly crossed A/c payee
and will enter the particulars of the P.O Issued in the prescribed P.O Register duly
authenticated.
e. Payment of pay orders
As the P. Os crossed A/c payee, the same are presented to the Issuing branch for
payment either through clearing of for credit to the clients A/c. Os when
presented for payment are processed in the Remittance Department. On making
payment, the relative entry in the P.O Register is marked of by entering the date of
payment in the P.O Register duly authenticated. The paid instrument is treated as
Debit Ticket.
f. Refund of Pay Order
The following procedure should be followed for refund of pay order by
cancellation
1. The purchase should submit a written request for refund of pay order by
cancellation attaching therewith the original pay order
2. The signature of the purchaser will have to be verified from the original
application form on record.
3. Manager/Sub-managers prior permission is to be obtained before refunding
the amount of pay order cancellation.
4. Prescribed cancellation charge is to be recovered from the application and
only the amount of the pay order less cancellation charge should be refunded.
5. The pay order should be affixed with stamps cancelled under should also be
canceled with RED ink but in no case should be torn. The canceled pay order
should be kept with the relevant Ticket.
6. The original entries are to be reversed with proper narrations.
7. Cancellation of the pay Order should also be recorded in the pay order Issue
register #Issue and payment of Pay-order:
Strictly speaking pay-order is not meant for remittance. Because it is payable
by the issuing branch. An order is issued to facilitate fund transfer within a
clearing area.
Dr. Tellers cash/Client A/c
Cr. Manages cheque
Cr. Commission
Up to Tk.1000
Tk. 10
Tk.1001-100000
Tk. 25
Tk.100, 001-500000
Tk. 50
Above Tk.500000Tk. 100

When paying against pay-order following entries are passed
Dr. Managers cheque
Cr Cash/Client A/c
3.5.4 Learning of This Section:
The Applicant have to carefully fills up the relevant part of

the prescribed Application form in triplicate, duly signs the same and
then gives it to the Remittance Department
Responsible Officer have to carefully fill up the

commission part for Banks use and request the Applicant to deposit
necessary cash or cheque at the Tellers counter.
The teller after processing the application form, Cash or

cheque has to validate the Application form. The first copy is treated
as Debit Ticket while the second copy is treated as Credit Ticket and
sent to Remittance Department for further processing. The third copy
is handed over to the applicant as customers copy.
While transferring money using the mobile responsible

officer must be careful about the phone code of each branch and note
the name of responding officer of that branch. Communication
through mobile must carefully handled otherwise any fraud
transaction may happen.
Necessary Advice has to prepare carefully considering the

date, amount, branch code, customer name, transaction code etc.
Debit Advice is sent to the clients a/c is debited for the amount of
T.T
3.6
Cash
The cash section performs some important functions like cash payment and cash
received. Except these two major functions it also performs some other functions like
opening of cash every day balance calculation.
3.6.1 Function of cash department:

Cash department is the busiest and the most important department of the branch. All cash
receipts and payment including inter branch or inter bank cash transactions are done
under the cash department.
Accounting and recording process of this department are very scientific, transparent and
modern. All cash transactions are put into computer in batches and balances are matched.
Unlike traditional banking, separate accounts are maintained for vault cash a/c and
tellers cash a/c respectively.
There is no strict division of work among tellers. Each of them is doing both receipt and
payment. This is possible because cash is preparing separate tellers cash position.
3.6.2 Cash Received tools:

Cash is received in following forms or slips
i)
Deposit slips (for deposit into clients account)
ii)
IBCA For inter branch cash transaction
iii)
I.D.T (inter department ticket)
iv)
Prize Bond
v)
Credit voucher
Cash department not only receives cash but also checks and drafts which are deposited
for collection. Cash proof sheet from each teller and cash transaction with branches or
BB (Bangladesh Bank) are recorded on reserve sheet to find out closing cash reserve. At
the end of the day a summary cash position is prepared and matched with actual cash
position and computer balance report. If their closing position along with the subsidiary
register book then the transactions of the day is ok.
3.6.3 Cash Receiving Procedure:
Received cash by the
teller at cash counter on
deposit slip, credit ticket
etc.
Filling the cash

proof sheet
Counting
the
notes
and
checking denominations given
on the back of the deposit slips,
credit ticket etc. etc.
Having the original and

the duplicate copy of
deposit slips signed by the
cash officer
Returning the
duplicate copy to the
client
Cash proof sheet from cash teller and each transaction are recorded on reserve sheet to
find out closing cash reserve. At the end of the day a summery cash position is prepared
and checked with actual position and computer balance report. If the three closing
position matches, then the transaction of the day are ok .
3.6.4 Cash Payment tools:

1) Cheque, draft, pay order, TT
2) Debit voucher (Realization of FDR proceeds)
3) Debit tickets
4) IBDA (Inter Branch Debit Advice) issued from the branch.
5) IBCA (Inter Branch Credit Advice) issued by another bank of Head office.
Vault Limited TK. 1.00 Crore
Cheque Payment authority to cash in charge TK 1 lac
3.6.5 Cash Payment Procedure:
Presenting Check
(By order or by holder)
Checking computerizes
Statement of Balance of
A/C by the cash in
charge
Scrutiny of Cheque
by the teller
Verification whether
checked by the teller
Approving/canceling the
Cheque by the sign of
cash in charge
When cash is transferred to any other branch the following a/c entries are made with the
passing of inter branch debit advice.
Dr. PBL general A/C
Cr. Reserve cash
When cash is received from any other branch of PBL following entries are made
Dr. Reserve Cash
Cr. Tellers Cash
When tellers take cash from reserve following entries for total receipt
Dr. Reserve Cash
Cr Teller Cash
For total cash received against Inter Department Ticket (IDT) following entries are made:
Dr. Teller Cash
Cr. IDT
At the end of the day for all payments against cheques and debit vouchers following
single entries are made:
Cr Tellers a/c
3.7
Accounts Department
Accounts Department is called as the nerve Centre of the bank. In banking business
transactions are done every day and these transactions are to be recorded properly and
systematically as the banks deal with the depositors money. Any deviation in proper
recording may hamper public confidence and the bank has to suffer a lot otherwise.
Improper recording of transactions will lead to the mismatch in the debit side and in the
credit side. To avoid these mishaps, the bank provides a separate department; whose
functions are to check the mistakes in passing vouchers or wrong entries or fraud of
forgery. This department is called as Account Department.
Besides the above, the bank has to prepare some internal statements as well some
statutory statements which to be submitted to the central bank. Accounts Department
prepares these statements also. The department has to submit some statements to the
Head Office, which is also consolidated by the Head Office later on. The tasks of the
department may be seen in two different angles:
A. Daily Task: The routine daily tasks of the Accounts Departments are as follows,
1. Recording the transactions in the Clean cash books
2.
Recording the transactions in general and subsidiary ledger
3. Preparing the daily position of the branch comprising of deposit and cash
4. Preparing the daily Statement of Affairs showing all the assets and liability of
the branch as per General Ledger and Subsidiary Ledger separately.
5. Making payment of all the expenses of the branch
6. Recording Inter branch fund transfer and providing according treatment in this
regard.
7. Checking whether all the vouchers are correctly passed to ensure the
conformity with the Activity Report, if otherwise making it correct by
calling the respective official to rectify the vouchers.
8. Recording of the vouchers in the Vouchers Register.
9. Packing of the correct vouchers according to the debit voucher and the credit
voucher.
B. Periodical Task: The routine periodical tasks performed by the department are as
follows:
1. Preparing the monthly salary statement for the employees.
2. Publishing the basic data of the branch
3. Preparing the monthly position for the branch which is sent to the Head Office
to maintain Statutory Liquidity Requirement (S.L.R)
4. Preparing the weekly positions for the branch comprising of the break of
sector wise deposit, credit.
5. Preparing the weekly position for the branch comprising of denomination wise
statement of cash in tills.
6. Preparing the quarterly statement (SBS-2 and SBS-3) where SBS-2 shows
classifications of deposits excluding inter bank deposit, deposits under wage
earners scheme and withdrawals from deposit account and SBS-3 shows
classifications of advances (excluding inter bank) and classification of bills
purchased and discounted during the quarter.
7. Preparing the budget for the branch by fixing the target regarding profit and
deposit.
CHAPTER
FOUR
Foreign Exchange
4.1
Introduction
4.2
International Trade
4.3
4.4
Import Section
4.4.1
Importers Application for L/C Limit/Margin
4.4.2
The L/C Application
4.4.3
IMP-Form
4.4.4
Scrutiny of L/C Application
4.4.5
Precautions for issuing L/C
4.4.6
Amendment of L/C
4.4.7
Credit Report on Beneficiary
4.4.8
Presentation of the Documents
4.4.9
Examination of Documents
4.4.10 Handling of Discrepant Import Document

4.4.11 Receiving Documents
4.4.12 Lodgment & Retirement
4.4.13 Payment against document (PAD)
4.4.14 Loan against Imported Merchandise (LIM)
4.4.15 Loan against Trust Receipt (LATR)
4.5
Export Section
4.5.1
Back-to-Back L/C
4.5.2
Export L/C
4.6
4.6.1
Exchange rate
4.6.2 Foreign Remittance
4.7
My Learning
Foreign Exchange
4.1
Introduction
Foreign trade financing is an integral part of banking business. Documentary Credit (also
called letters of credit or "L/Cs") is the key player in the foreign exchange business. With
the globalization of economies international trade has become quite competitive. Timely
payment for exports and quicker delivery of goods is, therefore, a pre-requisite for
successful international trade operations. Growing complexity of international trade,
separation of commercial parties across the globe and operating In a totally unknown
environment underlined the need for evolving a system that balances between the
expectations of the seller and the buyer Documentary Credit has emerged as a vital
system of' trade payment, and fulfilled the requisite commercial need. This system
substantially reduces payment-related risks for both exporter and importer. Not
surprisingly, therefore, the letter of credit is the classic form of international export
payment, especially in trade between distant partners. The bank upon presentation makes
payment, acceptance or negotiation of the credit by the seller of stipulated documents
(e.g., bill of lading, invoice, and inspection certificate).
This part of the report consists of the following areas

1) International Trade : Import & Export
2) Foreign Exchange related banking terms & rules
3) Foreign Exchange rate & foreign Remittance.
Foreign exchange transaction is classified according to their activities:

Foreign Exchange
Export
Govt Sector
Import
Back to Back
Remittance
Private Sector
Outward Remittance
Inward Remittance
4.2
International Trade
International trade is the trade between countries with the rest of the World. Now we live
in a global economy. In the age of globalization each country has free access to the
market of other with quality goods and services.
International Trade has two components as following Import & Export.
International Trade
Import
Export
To handle of International transaction in a sound and efficient manner there must have
a written contract between the buyer & seller. For international trading purpose a Bank or
Banks may involve in this contract and then the contract renamed into a letter of credit. It
is the media under which the international trades are concluded.
4.3

1.
L/C Opening
2.
L/C Amendment
3.
Sanction Payment against Document (PAD), Loan against Imported Merchandise

(LIM), Loan against Trust Receipt (LATR).
4.
T.C issuing
5.
Foreign Bill Purchase (FBP)
6.
Local Bill Purchase (LBP)
7.
Foreign Remittance
8.
FC A/C maintaining
9.
Foreign Currency remitting
Foreign Exchange Mechanism

1) L/C Opening
2) Issue the L/C by issuing Bank and send to advising bank
3) Advised and or confirm the L/C by Advising and Add confirming Bank
4) Submit the documents to Negotiating Bank by export
5) The Negotiating Bank makes payment
6) The Negotiating Bank forward/sends documents to issue bank
7) Issuing Bank makes payment to negotiating bank
8)
A issuing bank instructs to pay or reimburse the paying bank and paying bank
makes payment or reimburse to the negotiating bank
9) Issuing bank sends documents to the importer

10) The importer makes payment
Types of L/C Offered:

Letter of Credit (L/C) can be defined as a Credit Contract whereby the buyers bank is
committed (on behalf of the buyer) to place an agreed amount of money at the sellers
disposal under some agreed conditions. It is also known as documentary letter of credit. It
may be either:
(i)
Revocable: A revocable credit is a credit, which can be amended or

cancelled by the issuing bank at any time without prior notice to the
seller.
(ii)
Irrevocable: It constitutes a definite undertaking of the issuing bank

(since it cant be cancelled or amended without the agreement of all
parties thereto), provided that the stipulated documents are presented
& the seller satisfies the terms and conditions.
Special documentary Credit:

Revolving Credit: It is the credit, which provides for restoring the
credit to the original amount after it has been utilized.
Transferable Credit: the original beneficiary in full or in part to one
or more subsequent beneficiaries can transfer it.
Back-to-Back Credit: It is a new credit opened on the basis of an
original credit in favor of another beneficiary.
Anticipatory Credit: The anticipatory credit makes provision for preshipment payment, to the beneficiary in anticipation of his effecting
the shipment as per L/C conditions.
Red Clause Credit: A red clause credit is a credit with a special
condition incorporates into it that authorizes the confirming Bank or
any other Nominated Bank to make advances to the beneficiary
before presentation of the documents.
Green Clause Credit
Parties Involved in L/C:

There are number of parties involved in a letter of credit and the right and obligation of
the different involved parties will differ from each other. The involved parties to a letter
of credit are named below:
1) The applicant/The importer/The buyer
2) Opening bank/Issuing bank
3) The beneficiary/The Exporter/The seller
4) The Advising Bank/The transmitting Bank/The notifying bank
5) The Confirming Bank
6) The Negotiating Bank
7) The Reimbursing Bank/Paying Bank
Characteristics of the importer who wants to open a letter of credit
Must have an A/C in the branch
Must be a member of the Chamber of Commerce
Must be a TIN holder
Must have IRC(Import Registration Certificate)
VAT(Value Added Tax certificate)
Documentary Credit:
Exporter
1. Sales Contract
Importer
2. Shipment of Goods
4.
Advises/
Confirms
L/C
Export
L/C
Advising/
Confirming
Bank
Pays or
reimburse
5. Presents Documents
for Negotiation
Presenting/
Negotiating
Bank
7. Asks for
Settlement
6. Sends Documents
for
Reimbursement
2. Apply for
L/C
Issuing
Bank
3. Issues L/C
Paying/Reimbursing
Bank
8. Instruct
to pay or
reimburse
Import
L/C
4.4
Import Section
The Ministry of Commerce in terms of the Import & Export (Controls) Act 1950
regulates import of goods into Bangladesh with import Policy Orders issued periodically
& public notices issued from time to time by the office of the Chief Controller of Import
& Export 9CCI&E).
4.4.1 Importers Application for L/C Limit/Margin:
To have an import L/C limit, an importer submits an application to the issuing Bank
furnishing the following information:
1) Full particulars of bank account
2) Nature of business
3) Required amount of limit
4) Payment terms and conditions
5) Goods to be imported
6) Offered to be imported
7) Offered security
8) Repayment schedule.
A credit officer scrutinizes this application and accordingly prepared a proposal (CLP)
and forwards it to the Head Office Credit Committee (HOCC). The Committee, If
satisfied, sanctions the limit and returns back to the branch. Thus the importer is entitled
for the limit.
4.4.2 The L/C Application:

Pubali Bank Limited provides a printed form for opening of L/C to the importer. This
form is known as letter of Credit Application form. A special adhesive stamp is affixed on
the form. While opening the stamp is cancelled. Usually the importer expresses his desire
to open the L/C quoting the amount of margin in percentage.
1)
Full named and address of the importer.
2)
Full named and address of the beneficiary.
3)
Draft amount
4)
Availability of credit by sight payment acceptance/negotiation/deferred payment.
5)
Time bar within which the documents should be presented
6)
Sales type (CIF/FOB/C&F)
7)
Brief specification of commodities, price, and quantity, indent no etc.
8)
Country of origin
9)
Bangladesh bank registration no
10) Import license/LCAF No

11) IRC (Import Registration Certificate) no
12) Account No.
13) Documents required
14) Insurance cover note/Policy no, date amount
15) Name and address of insurance Company
16) Whether the partial shipment is allowed or not
17) Whether the transshipment is allowed or not
18) Last date of shipment
19) Last date of negotiation
20) Other terms and conditions if any
21) Whether the confirmation of the credit is requested by the beneficiary or not.
The above information are given along with the following documents
1) Pro-forma invoice stating description of the goods including quantity, unit price.
(i)
Indent: An indent stating the description of the goods including

quantity, unit price, etc. given by the Supplier/Exporter given by the
Indenter.
(ii)
Proforma Invoice: Proforma Invoice states the description of the

goods
including
quantity,
unit
price,
etc.
given
Supplier/Exporter.
2) The insurance cover notes, issuing company and insurance number.
3) Four set of Import Form (IMP) form.
The Letter Of Credit Authorization (LCA) Form contains the following:
1) Name and address of the importer
2) IRC no. and year of renewal
3) Amount of L/C applied for (Both in figure and in word)
4) Description of item(s) to be imported
5) ITC Number/HS code
6) Stamp and Signature of the importer with seal
4.4.3 IMP-Form:
The IMP form contains the following
1) Name and address of the authorized dealer
2) Amount of remittance to be permitted (i.e. L/C amount)
3) LCA form number, date, and value in Tk.
4) Description of goods, quantity
5) Invoice value in Foreign Currency (i.e. L/C amount)
6) Country of origin
7) Port of Shipment
8) Name of steamer/airline (i.e. by road/by ship/by Air)
9) Port of Importation
10) Indenters name and address
11) Indenters Registration number with CCI & E and Bangladesh bank
12) Full name and address of the Applicant
13) Registration number of the Applicant with CCI & E
14) Type of LCAF
by
the
4.4.4 Scrutiny of L/C Application:

The dealing Officer scrutinizes the application in the following manner1) The terms and conditions of the L/C must be complied with UCPDC 500
2) Exchange Control & Import Trade Regulation
3) Eligibility of the goods to be imported
4) The L/C must not be opened in favor of the importer
5) Radioactivity report in case of goods item
6) Survey reports in certificate in case of old machinery
7) Carrying vessel is not of Israel or of Serbia-Montenegro
8) Certificate declaring that the item is in operation not more than 5 years in case of
car.
4.4.5 Precautions for issuing L/C:
After submission of documentary letter of credit application form, the concerned officer
scrutinizes the terms and conditions that mentioned in application. He must check the
following things:
1)
Whether the terms and conditions of L/C application are consistent with
Exchange control and import Trade regulation UCPDC-500.
2)
L/C must not be opened in favor of the importer of his agent.
3)
The importer agreeing all terms and conditions mentioned in the application
must sign L/C.
4)
Indenting registration number.
5)
Whether IMP form dully filled and signed.
6)
Validity of Import Registration Certificate (IRC).
7)
Insurance cover note with date of shipment.
8)
The Harmonize System (HS) code of the goods
9)
The balance of the accounts of the importer
10) The goods are not from Israel and vessels to be used is not of Israel
11) The issuing officer will try to keep as much margin as possible.
4.4.6 Amendment of L/C:

Parties involved in a L/C particularly the seller and the buyer cannot always satisfy the
terms and conditions in full as expected due to some obvious ad genuine reasons. In such
situation, the credit should be amended. Issuing Bank transmits the amendment by tested
telex to the advising bank. In case of revocable credit, it can be amended or cancelled by
the using bank at any moment and without prior notice to the beneficiary. If the L/C is
amended, service charge telex charge is debited from the party account accordingly.
4.4.7 Credit Report on Beneficiary:
Before opening of letter of credit, the Authorized Dealer (A/D) branch must obtain a
confidential report on the supplier/beneficiary through its correspondent bank/ recognized
credit agencies.
Accounting and voucher to be passed
Vouchers for Margin Deposit
At the time of opening the L/C the importer is to deposit cash margin as per sanction
terms. After deposit of the cash margin the Authorized Dealer (A/D) or non- Authorized
Dealer (A/D) branch shall credit the same in their Margin Deposit Account. The
following vouchers are to be passed:
Dr. Customers Current A/C
Cr. Other Deposit-Margin Deposit L/C (Foreign)
The following liability vouchers for L/C are to be passed
Dr. Customers Liability under Foreign L/C
Cr. Acceptance Liability under Foreign L/C
Showing Accounting Treatment at The Time Of L/C Opening
Particulars
Debit/ Credit
Charges in Taka
Customers A/C
Debit
L/C Margin A/C
Credit
Commonly 10-30%
Commission A/C on L/C
Credit
0.5%
VAT
Credit
15% on commission
SWIFT Charge
Credit
Tk. 2000/=
Foreign Courier Charge (FCC)
Credit
US$ 25/=
Stamp
Credit
Tk. 150/=
Others
Credit
Tk. 200/=
Source: Principal Branch, Pubali Bank Ltd.

4.4.8 Presentation of the Documents:
The seller being satisfied with the terms and the conditions of the credit proceeds to
dispatch the required goods to the buyer and after that have to present the documents
evidencing dispatch of goods to the negotiating bank on or before the stipulated expiry
date of the credit. After receiving all the documents, the negotiating bank then checks the
documents against the credit. If the documents are found in order then the bank will pay,
accept, or negotiate to issuing bank checks the documents. The usual documents are
1)
2)
3)
4)
5)
6)
7)
8)
9)
Commercial Invoice
Bill of lading
Certificate of origin
Packing list
Shipping advice
Non negotiable copy of bill of lading
Bill of exchange
Pre-shipment Inspection report
Shipment certificate
4.4.9 Examination of Documents:
Import documents include a lot of forms and certificates. Proper checking or inspection
can only ensure the correct and smooth foreign exchange or trade. While checking those
documents following things need to be ensured.
The Letter of Transmittal
Following points have to consider
Addressed to L/C issuing branch.
Current date.
Documentary Credit number.
Documents enumerated are attached.
Value of the documents and the value mentioned in the cover are the same;
Whether any discrepancy has been noted and whether payment,
acceptance or negotiation was effected against an indemnity or under
reserve.
The Documentary Credit

Correct referenced documentary credit.
Still valid (not expired/cancelled).
Balance in the Documentary Credit is sufficient to cover the value of the
drawing.
Draft/Bill of Exchange
Draft bears the correct L/C number;

Correctly dated;
Name of the Drawer corresponds with the name of the beneficiary;
Drawn on the correct drawer indicated in the L/C;
Amount in words agrees with the amount in figures;
Beneficiary has duly signed the draft;
Tenor is as required by the credit;
No restricted endorsement;
Value of the draft and the value of invoice are identical.
Commercial Invoice
Beneficiary as stated in the documentary credit issues that.
Issued in the name of the applicant (the buyer) named in the documentary
credit.
Description of goods correspondent exactly to that stated in the credit.
Description of goods, value and unit price matches that of the
documentary credit as regards to the amount and currency.
Currency of the invoice is the same as stipulated in the credit.
Value of invoice does not exceed the available balance of the credit.
Invoice is signed as required in the credit.
Correct numbers of original is presented.
Terms of shipment, the invoice amounts correspond proportionally to the
dispatched quantity.
Marine/Ocean Bill of Lading

Issued by a shipping company.
Full set of originals issued and presented.
Consignees name and address and correct as stated in the credit;
Bill of lading bears a date of issue, duly signed by the issuer and the name
of the ship appears;
Port of departure and post of destination are correct.
Bill of landing bears an on board shipped notation
Name of notify parts name and address are correct.
Goods have been loaded on board, or shipped on a named vessel (indicates
the name of the carrier and it is signed or authenticated by the master or a
named agent for or on behalf of the master.
Correctly marked Freight prepaid or Freight collect.
Issuer has properly authenticated the alteration on the bill of lading.
Goods are consigned as stipulated in the credit (to order of a named
consignee i.e. to the order of the L/C issuing bank.
Bill of lading has been properly endorsed;
Bill of lading is issued to be correct order party as required by the

documentary credit.
Airway Bill
Consignees name and address and the airports of departure and destination
are stated in the Airway bill are consistent and in agreement with the terms
of credit. An air transport document is evidence of contract of carriage
between the carrier and the sender. It is not a document of title of goods;
Document indicates the name of the carrier;
Issuer is the carrier (identifiable as the carrier) or a named agent of the
named carrier;
Airway bill indicates the actual flight date and flight numbers;
Carrier signs that document;

Consignees name and address and notify partys name and address are
correct.
Issuer authenticates any alternations;
Correctly marked Freight Prepaid or Freight collect etc;
Shippers (consignors) copy being presented.
Certificate of Origin
Country of origin of the goods as stated as in the certificate agrees with the
terms of the credit;
Certificate has been signed as required by the credit;
Stipulated authorities have authenticated the certificate.
Packing List
A unique document and not combined with any other documents;
List contains all the necessary information especially concerning the
packing units;
Data on it is consistent with that of the other documents.
4.4.10 Handling of Discrepant Import Document:
While making scrutiny & examination of the documents, the A/D branches shall ensure
thata) Full set of documents as stipulated in the credit has been received.
b) The documents have been drawn strictly as per L/C terms.
The dealing officer checks whether these documents have any discrepancy or not. Here
discrepancy means the dissimilarity of any of the documents with the terms and
conditions of L/C.
4.4.11 Receiving Documents:

If the beneficiary is being satisfied with the terms and conditions of the L/C then dispatch
the goods to the buyer. After that dispatch the documents evidence dispatching of goods
to the negotiating bank on or before the stipulated expiry date of the L/C. After receiving
all the documents, the negotiating bank then checks the documents against the credit. If
the documents are found in order, the bank will send it to the issuing bank.
4.4.12 Lodgment & Retirement:
While lodgment of the import bills under cash L/C, A/D branch shall reverse the liability
vouchers passed at the time of opening L/Cs.
Reversal of the liability vouchers:-
Dr. Acceptance liability under Foreign L/C

Cr. Customer liability under Foreign L/C
Lodgment vouchers to be passed:-
Dr. PAD (Payment against document) Account

Cr. Head Office ID through PB General A/C
Cr. Interest Account
Cr. Commission Account- L/C Misc. Handling Commission A/C
Transfer of Margin to PAD Account:-
Dr. Other deposit-Margin deposit L/C (Foreign)

Cr. PAD Account
Lodgment means retirement of funds. If the documents receiving from the negotiating
bank issuing bank also carefully scrutinize all the documents.
4.4.13 Payment against document (PAD):

This is most sensitive task of the import department. The officials have to be very much
careful while making payment. This task constitutes the following.
Date of Payments:
Usually payment is made within seven days after the documents have been received. If
the payment is become deferred, the negotiating bank may claim interest for making
delay.
Preparing Sale memo:
A sale memo is made at B.C rate to the customer. As the T.T & D.D rate is paid to the ID,
the difference between these two rates is exchange trading. Finally an inter branch
exchange trading credit Advice is sent to ID.
Requisition for the foreign currency:
For arrangement necessary fund for payment, a requisition is sent to the international
Department.
Transmission of telex
For arranging necessary fund for payment bank ensure that payment is being made.
For PAD the following voucher will be passed:
Dr. PAD (Payment against Document)
Dr. Margin on L/C
Cr . Income A/C on PAD
Cr. Income A/C interests on PAD
Cr. Commission on PAD
Reverse entry is given:
Dr. Acceptance liability under Foreign L/C
Cr. Customer liability under Foreign L/C
4.4.14 Loan against Imported Merchandise (LIM):

Loan against import merchandise through the bank may be allowed retaining margin
prescribed on their landed cost, depending on the categories and credit restrictions
imposed by the Bangladesh bank/head office from time to time. Branches shall also
obtain letter of undertaking and indemnity from the clients, before getting goods cleared
through LIM account clearance of the goods should be taken through Approved Clearing
Agent of the Bank.
The following point must be taken to consideration while allowing advance against the
security of imported goods.
Storage of imported goods under Lim facility may be allowed for specified time as
prescribed by Bangladesh Bank/head office of the bank which period importer should
take delivery of the goods against payment, generally part delivery is not allowed from
LIM Account. This may however; it must be ensure that the landed cost the merchandise
is properly worked out before the goods are delivered to the customers against
proportionate payment. Landed cost of valuable and less valuable items should not be
average together. LIM A/C should properly maintain by the bank, Vouchers will be
Dr. LIM A/C
Cr. PAD A/C
4.4.15 Loan against Trust Receipt (LATR):
If the documents are required to deliver against LATR (Loan against Trust Receipt), prior
approval is required from Head Office. Documents to be delivered to the Importer
through approved C&F agent for clearance of good for a certain period on the merit of
goods & nature of business. For LATR the following vouchers are to be passed:
Dr. LATR A/C
Cr PAD A/C
4.5
Export Section
In the export section two types of L/Cs are opened
Back to Back L/C
Export LC
4.5.1 Back-to-Back L/C:

A back-to-back mechanism involves two separate L/Cs. One is master export L/C and
another is back-to-back L/C. On the strength of Master L/C Bank issues Back to Back
L/C. Back to Back L/C is commonly known as Buying L/C. On the contrary, Master
Export L/C is known as Selling.
Features of Back-to-Back L/C:
Is an import L/C procedure goods/raw materials further processing
Is opened based on Export L/C
Is a kind of Export Finance
Export L/C is at sight but back to back L/C
No margin is required to open Back to Back L/C
Checklist to open Back-to-Back L/C:
Application is registered with CCI & E and has bonded warehouse License.
The Master L/C has adequate period and has no defective clause
L/C value shall not exceed the admissible percentage of net FOB value of relative
Master LC
Usage period will be up to 180 days
Papers required opening back to back L/C
Import registration certificate & Export Registration certificate
L/C Application & LCA form.
Proforma Invoice/Indent
Insurance Policy
IMP form
In addition to above following papers are required for read made garments
industry
Bonded warehouse license
Quota allocation letter from EPB (where applicable)
Letter of disclaimer from Landing if rented premises.
Steps to issue Back-to-Back L/C
Obtain all required papers
Check the credit limit
Prepare offering sheet if regular credit line is not available
Mark lien on the master L/C
Issue the L/C
Payment under back-to-back L/C
Payment at maturity out of exports proceeds
In case of export failure or non-realization/Short realization of export proceeds

forced loan i.e. Pad has to be created in order settle the back-to-back L/C
payment.
Precautionary measures:
Including the clause for pre-shipments inspection certificate
Shipping guarantee under no circumstances
Discrepant documents shall not be accepted
Proper care regarding amendments of Master L/C
Accounting Treatment for Back-to-Back L/C

When the documents is arrived the following vouchers are passed
Customers Ac--------------------Dr
Commission on acceptance Cr
In case of payment, if the fund is at hand, the accounting entries are sundry deposit
Margin on AcceptanceDr
Customers A/C..Cr
If the party is paid foreign currency B.C rate is applied in this regard. International
Department takes the T.T.O.D rate. If the payment is made to ID in local currency in
national rate ID following T.T Clear rate. When the party is to pay OD sight rate is
followed.
If the fund is not available to make the payment, the following vouchers are to be passed.
PAD.Dr
Customers ACCr
Reporting to Bangladesh Bank:
At the end of every month, the reporting the following information is mandatory:
a) Filling of E-2/P-2 schedule of S-1 category; which covers the entire month
amount of import category of goods, currency, country etc.
b) Filling of E-3/P-3 schedule for all charges, commission with T/M form.
c) Disposal of IMP form, which including
(i)
Original IMP is forwarded to Bangladesh Bank with invoice

and indent
(ii)
Duplicate IMP is kept with the bank along with the bill of
entry/certified invoice.
(iii)
Triplicate IMP is kept with the bank for office record.
(iv)
Quadruplicate is kept for submission to Bangladesh Bank in

case of imports where documents are retired.
4.5.2 Export L/C:

The other type of L/C facility offered by Pubali Bank Limited is Export L/C. Bangladesh
export a large quantity of goods and services to foreign households. Ready made textile
garments (both knitted and woven), jute, Jute made products frozen shrimps, tea are the
main goods that Bangladesh exporters exports to foreign countries.
Formalities for Export L/C:

The export trade of the country is regulated by the exports (control) Act, 1950. The
formalities of export L/C are as follows
1)
ERC: Exporters must hold a valid Export Registration Certificate (ERC). The
ERC is required to be renewed every year. The ERC number is to be incorporated
on EXP forms and other documents connected with exports.
2)
Obtaining EXP: After having the registration, the exporter applies to Pubali
Bank Ltd. With the trade license, ERC and the Certificate from the concerned the
exporter, An EXP from contains the following particulars:
i)
ii)
iii)
iv)
v)
vi)
vii)
viii)
ix)
3)
Name and address of Authorized Dealer

Particulars of the commodity to be exported with Code
Country of Destination
Port of Destination
Quantity
L/C value in Foreign Currency
Terms of sale
Name and address of Importer/Consignee
Bill of Landing/Railway Receipt/ Airway Bill/Truck Receipt/Post
Parcel received no and date
x)
Port of shipment/Post office of Dispatch
xi)
Land customer post
xii)
Shipment date
xiii) Name of the exporter with address
xiv) CCI & Es Register number and date of the exporter
xv)
Sector (Public or Private) under which the Exporter falls.
Securing the order: Upon registration, the exporter may proceed to secure the
export order. Contracting the buyers directly through correspondence can do this.
4)
Signing of the contract.
5)
Procuring the materials. After making the deal and on having the L/C opened in
his favor, the next step for the exporter is to set about the task of procuring or
manufacturing the contracted merchandise.
6)
Registration of Sale: This is needed when the terms proposed to be exported are
raw jute and jute goods.
7)
Shipment of goods: The following are the documents normally involved at the
stage of shipment.
i)
Export form
ii)
Photocopy of registration certificate
iii)
Photocopy of the contract
iv)
Photocopy of the L/C
v)
Customs copy of ERF form shipment of jute goods and EPC form for
raw jute.
vi)
Freight certificate from the bank in case of payments of the freight at

the port of landing is involved
vii)
Railway receipt, Berg Receipt of truck Receipt
viii)
Shipping instructions
ix)
Insurance policy
After that exporter submit all these documents along with a letter of indemnity to Pubali
Bank for negotiation. An officer scrutinizes all the documents. If the documents is a
clean one. Pubali Bank purchases the documents the documents on the basis of banker,
customer relationship. This is known as foreign Documentary bill purchase (FDBP).
Procedure for Foreign Documentary Bill Purchase (FDBP)

If all the documents are in order then the bank purchase the documents. Several things
should be checked at the time of purchasing.
How much back-to-back and PC (packing Credit) facility the client has taken.
After taking all these charges, the rest amount is paid to the client and a FDBP account is
opened.
After purchasing the documents, Pubali Bank given the following entries:FDBP A/CDr
Customer A/CCr
(Before realization of proceeds)
Head Office, ID A/CDr.
FDBP A/C..Cr
(Adjustment after realization of proceeds)
Foreign Documents Bills for Collection (FDBC):

Pubali Bank forwards the documents for collection due to the following reasons
i)
If the documents have discrepancies
ii)
If the exporter is new client
iii)
The banker is in doubt.
Foreign documentary bills for collection signify that the exporter will receive payment
only when the issuing bank gives payment. The exporter submits duplicate EXP from and
commercial invoice subsequently. The of the bill is calculated and the following
accounting entries are givenHead office A/C
Clients A/C
Government Tax A/C
Postage A/C
Income A/C. Profit on exchange Cr.
Dr. @ T.T Clean

Cr @ O.D Sight
Cr. % invoice value
Cr
After passing the above vouchers, an inter Branch exchange trading debit advice is sent
to debit the NOSTRO account. Pubali Bank has NOSTRO accounts with its reimbursing
bank. An FDBC register is maintained, where first entry is given when the documents are
forwarded to the issuing bank for collection and the second one is done after realization
of the proceeds.
4.6
4.6.1 Exchange rate:

Exchange rate and is the rate at which a specific currency can be exchanged with a
standard foreign currency. A foreign exchange transaction is either sells or purchase
transaction. Therefore, the bank would quote two different rates of exchange.
Buying Rate & Selling rate:
The rate at which the central bank of any country buys foreign money is called buying
rate. On the other hand, the rate at which the central bank of any country sells foreign
money is called selling rate:
Classification of Exchange Rate:

1) Fixed Rate
2) Floating Rate:
Independent Floating
Managed floating
Pegging
o Single currency
o Composite currency: a SDR, & b) Other basket
Exchange Rate Quotation:

Exchange rate quoted by the following two ways:
Direct: If the exchange rate is expressed in variable units of domestic currency for
a fixed unit foreign currency. It is also called pence rate.
Indirect: If the exchange rate is expressed in variable units of foreign currency for
a fixed unit of domestic currency. It is also called currency rate.
4.6.2 Foreign Remittance:

"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.
The transaction of the authorized dealer in foreign exchange involves either outward or
inward remittances of foreign exchange from one country to another.
Foreign remittances of two kinds
(i)
Inward remittance &
(ii)
Outward Remittance
The term Inward remittance including not only remittances by TT, MT, Draft etc but
also purchase or bills travelers cheque etc.
On the other hand, remittance from our country is called outward foreign remittance.
The foreign remittance department of Principal Branch, Pubali Bank, Dhaka is equipped
with a number of foreign remittances facilities, which are
1) Issuance of Foreign Demand draft
2) Issuance of Traveling Cheques
3) Endorsement of US $ in Passport
4) Opening of Foreign Account
5) Opening of Student file
Foreign Demand Draft (FDD):
Pubali Bank accepts the charges for TOEFL, SAT, GMAT etc. through foreign demand
draft. Pubali Banks opens students files to issue foreign demand draft following the
permission if Bangladesh bank. Before issuance of FDD Pubali Bank asks the students to
fill up the Travel & miscellanies (TM) form, which contains the following particulars.
1) Name of the students
2) Full address of the students
3) Amount of FDD in foreign currency
4) Purpose of Remittance
5) Address of the institution to which the FDD will be favored
6) Country of receiving payment
7) Passport No of the students with date of issue
8) Signature of the student
The TM is sent to Bangladesh Bank with photocopies of the Passport of the students and
the FDD issued.
Cancellation of FDD
i.
Application by party with original FDD.
ii.
Signature verified, checking in the counterpart.
iii.
Cash debit voucher to return money to customer:

Dr- HO A/C @ T. T. clean
Cr- Party /Cash A/C
iv.
IBETDA & Purchase memo @ T. T. Clean.
v.
Cancellation mark on the register & instrument.
The procedure seems to be peculiar as party depositing money and getting money back at
the same time but this has been adopted to avoid complications.
Stop payment
When the instrument is lost party shou1d inform it immediately to the bank in application
along with the photocopy of the draft. Bank should check it with ID whether payment has
been made against this FDP if paid then party won't get back his money. But if it still lies
outstanding, then a telex message is given to the drawn on bank instructing 'STOP
PAYMENT'. Drawn on bank will reimburse the amount to ID, who then will give a credit
memo to the issuing branch. The remaining procedure is same as draft cancellation.
Issuance of Travelers cheque (TC):

Pubali bank limited issued only American Express Travelers cheque. For TC customer
has to fill up TM from. He has to fill up the purchase form. Purchase for, has four copies.
One copy for American Express Bank, one copy for Pubali Bank and two copy for the
customer. For TC Pubali Bank limited charges 1% as commission.
Requirements for purchasing TC:
There are some requirements that are to be fulfilled by the Travelers cheque purchaser.
The requirements are
i)
Passport holder himself has to present while issuing Travelers cheque.
ii)
The passport must be a valid one
iii)
Air ticket has to be confirmed
Opening of Foreign Account:

Pubali Bank limited opens foreign account. Foreign account is used for receiving foreign
currency from abroad or for sending the currency to abroad. It can be used in favor of a
person or in favor of exporters.
Following papers are required to open a foreign account:
i)
Exporters foreign currency account opening form (application form,

two signature cards duly filled in an signed with authenticated seal and
introduction)
ii)
Two copies of passport size photographs of each operator attested by

chairman of the company.
iii)
Export registration certificate.
iv)
Attested photocopy of the membership certificate of the concerned

association (BGMEA)
v)
An export proceeds realization certificate-declaration/undertaking

regarding the utilization of foreign currency.
vi)
Incase of Limited company

(a) Memorandum & articles of Association of the company.
(b) Power of Attorney
(c) Resolution of the Board of Directors.
(d) Certificate of Incorporation.
(e) Certificate of Commencement of Business
(f) List of Directors
(g) Trade License
Student file opening:

Student can endorse $200.00 at a time in his own name. But if the amount exceeds $
200.00 then the student has to open a student file. For opening a student file, the
following documents are required:
i)
Preliminary application and information admission
ii)
Letter of approval of the student by the University.
iii)
A filed up application form for foreign currency in abroad
iv)
Transcript given by the Board for S.S.C/H.S.C equivalent examination.
v)
A photocopy of 1-7 form.
In case of tuition feeds, application must send the currency in favor of the institute. He
can not take the fees of the institute with him personally. Usually a student has to endorse
at least one third of the feeds of a year.
As an authorized dealer the principal branch of PUBALI BANK LIMITED also provides
its customer foreign remittance facilities by FBC, LFBC, sale and purchase of FCY, FTT.
Foreign Bills Collection

A foreign bill for collection refers to collection procedure of foreign DD/PO/Cheques as
per arrangement between PUBALI BANK LIMITED and its corresponding banks. The
collection procedure is as follows:
i. Entries in the FBC register and get a FBC number. This number will be on the
bill and be treated as reference no.
ii. Forward the bill along with a forwarding letter to the corresponding bank. Send
the draft through courier service and keep a courier receipt in the file.
iii. Crossing on the bill indicating UC131, as a collecting bank. Endorsement on
the back of the bill-"Payee's A/C will be credited on realization.
iv. Prepare a liability voucherDr- Customers' liability @National rate
Cr- Bankers' liability
v. A photocopy of the bill to be kept on the file
Realization
ID will send a credit memo to the concerned branch informing that Nostro A/C has been
credited.
Prepare a credit advice:
Dr- HO A/C @Ready buying
Cr-Party A/C @T.T. clean
Reversal
Dr- Bankers liability @Notional rate
Cr- Customers liability
Branch to Branch
Whenever another branch of PUBALI BANK LIMITED forwards an instrument to the
principal Branch to collect it on its behalf, the branch has to do it as the collecting agent
but confirming branch endorsement and putting own FBC on the bill. Rest of the
procedure remains the same. At the last stage an IBCA will be originated from the
principal Branch crediting concerned branch and debiting HO A/C.
Balance Sheet Impact
The Balance Sheet will display the figure of the bill until reversal voucher is released and
thus will constitute contra item on the part of the bank in the following manner.
ASSET
- Bills Receivable being Bills for Collection.
LIABILITY - Bills for Collection being Bills Receivables.

Local Foreign Bills Collection
Instruments originating outside Bangladesh but drawn on a Bangladeshi Bank Is known
as Local Foreign Bill. In LFBC forwarding letter is sent to the local drawn on
bank/branch along with the instrument and payment instruction is given to them.
However payment instruction differs depending on the currencies in which the A/C is
maintained.
The collection procedure involves payment instruction by a P.O./D.D. favoring the
beneficiary. The instruments, after receiving will be send for collection through preparing
a credit advice:
Accounting Procedure
Dr- Clearing A/C
Cr- Party A/C
LFBC: Collection of FTT
Sometimes FTT arrives at another bank whereas beneficiary's account lies in PUBALI
BANK LIMITED, In that case receiving bank of FTT informs to this bank to collect the
proceeds. This collection procedure to come under LFBC mechanism. Here a letter is
forwarded to that bank giving payment instruction and all other procedures remain the
same.
Sale of FCV (Cash)
PUBALI BANK LIMITED sells US dollar only to the customers who want to visit
abroad. No other currency is sold to public, as per the practice of this bank, not due to
any regulatory covenants. 'Travel quota entitlement of Bangladeshis for travel by air to
countries other than SAARC countries and Myanmar shall now the US $3000 per person
per calendar year. For SAARC countries and Myanmar this quota stands reaffixed at US
$1000 for travel by air and US $500 for travel by land.
The maximum limit of US $300 that may be taken in cash either in US dollar ($) or any
other convertible currency.
The stages of cash dollar ($) selling is as follows:
1) Application form filled in by the customers with two TM forms. Accounting
treatment in this regard would be:
Dr- Cash A/C
Cr- FCY on hand $ SPL @Cash Book Rate
Cr- Income A/C
Tk.200 (Endorsement charge)
Cr- Income A/C
(Diff between Cash sell & Cash book rate)
2) Sale memo to ID @cash sale rate.

3) Photocopies of the passport of' first six pages, visa (only for student), PP
renewal (if any) and pages recording endorsement of foreign exchange, and photocopies
of the pages of ticket showing name of the passenger, route and date of journey and
endorsement of foreign exchange along with the relative Travel & Miscellanies (TM)
form.
4) Endorsement on the passport.
5) In each case of release of foreign exchange for travel abroad, photocopies of
first six pages of the passport and the page recording endorsement of foreign exchange
along with the relative TM form should be sent to Bangladesh Bank along with report of
the transaction in the usual monthly returns.
Purchase of Foreign Currency (FCY)
Purchase of foreign currency means legal encashment of US $ from a bank. The
procedures are as follows:
i. Prepare a debit voucher (equivalent to cash debit voucher)
Dr- FCY on hand $ SPL @Cash Buy Rate
Cr- Cash
ii. Purchase memo @ Cash Buy Rate.
iii. Proceeds Certificate (Legal Document of Encashment) for customer.
4.7
My Learning
1. Pubali Bank, Principal branch has SWIFT facilities. Very few bank in our country
offer this. By using this modern technology Principal branch provide fastest service
on L/C operating to its client.
2. Pre-shipment inspection certificate should obtain from the exporter of back-to-back
L/C. Because it reduces fraud and forgery in case of import against master export
L/C. But all the time the bank does not want it.
3. In some cases, this branch takes different Margin and commission on L/Cs from
different customer. A customer is allowed to open a L/C even with 10% margin. I
think that the bank should review the customers' behavior for a period and should
develop a certain policy in this regard.
4. Pubali Bank, Principal branch do not practice revocable L/C.
5. The bank should try to arrange more training programs for their officials. Quality
training will help the officials to develop the knowledge of International Trade
Financing.
6. Pubali Bank, Principal branch does not have adequate number of skilled manpower in
foreign exchange department.
7. With the pressure of the top management the employees are some time bound to do
things, which is beyond the rules and regulations.
In case of month end report so many register has to be maintained which is time
consuming. Number of register can be lessening with the help of computers.
CHAPTER
FIVE
Loans and Advances
5.1 Introduction
5.2 Managers Concern
5.2.1 How to locate purpose
5.2.2 How to locate security
5.2.3 How to locate borrower
5.3 Advance Secured and Unsecured

5.4 Function of Advance Department
5.5 Types of Loan
5.6 Process of Loan
5.7 State of Classification and Provision for 5 Years of PBL
Loans and Advances
5.1
Introduction
Major source of income of a bank is the earning from credit. Borrower selection is the
main and prime task of this department. Advancing loans is the primary function of the
commercial banks. Without loans countrys industrial and commercial development is not
possible. Therefore, smooth loan system in banking sector is a catalyst for economic
development of a country.
5.2
Managers Concern
In the process of loan Manager has to ensure three things:

1) How to locate purpose
2) How to locate security
3) How to locate borrower
5.2.1 How to locate purpose:
Manger has to ensure that the loan will generate adequate cash. For that matter the loan
should be engaged in productive activities. Such an employment will increase economic
activities, promote trade and commerce, create employment avenues and increase
movement of goods and flow of cash. This flow of cash is known in the banking concept
as cash generation. If there is enough cash generation, funds will automatically flow into
the borrowers accounts with the bank and will show a satisfactory turnover in accounts
which the lending bank always demands. This is why the managers speculation should
be making the highest cash through the employment of the advances.
5.2.2 How to locate security:
As soon as the evaluation of purpose is done manager will examine and evaluate in the
following manner the securities offered by the prospective borrower:
a) Security is the source of information on the prospective borrower. If offered are
valuable properties like land, building, shares of stocks or pledged goods, these
will offer adequate information about the borrower as to his financial position.
b) If securities are hypothecated stocks of raw materials for production, these will
offer adequate information about the borrower as to his ability or capacity to
utilities
c) Securities (tangible or intangible) offer a yardstick for measuring the extent of
involvement of the borrower himself. The lending banks investment of funds is a
joint venture of the banker and the borrower. The securities offered are the
borrowers portion of involvement i.e. his equity or capital. Thus the greater is his
involvement, the better for the banks. The borrower in that case will think twice
that if the business goes wrong, it is who will suffer most. Thus it will be in his
own interest that he will avail and utilize the loan as per agreed stipulations. Thus
the best way to safeguard the lending banks interest is, as far as possible to
maximize the banks commitment.
d) The branch Managers responsibility as to provide security is also to see how
much control he will be in a position to exercise on the entire stocks of the
borrower.
5.2.3 How to locate borrower:

In appraising a loan process, the selection of the prospective borrower is the most vital
point. The borrower is the real actor and must be in position to achieve the purpose for
which the loan has been requested. In selecting ideal borrower, the branch manager thus
assumes the greatest responsibility. Capital is another point to indicate the borrowers
position. He should be given loan in proportion to this own investment as working
capital. As a general rule a bank should not sanction loan more than the investment of the
borrower.
Then the consideration of borrowers capacity - whether the borrower can utilize the
funds or not.
Of all the qualifications of a prospective borrower, character is undoubtedly the greatest.
While the capacity and capital are the factors upon which depends his ability to repay the
money advanced, the character of the borrower indicates his intention to repay the loan.
To select the ideal borrower the following points have to consider:
a) Branch records: The manager may have first hand information on a prospective
borrower by a reference to his records. The turnover of his financial dealings is
reflected in the ledger folios of his branch.
b) Borrowers Record: The prospective borrower may be advised to submit his
books of accounts balance sheet etc. for examination by the manager. These
financial tools reflect the position of his assets and liabilities and a fair idea about
the capital and capacity of the borrower.
c) Personal Enquires: As an individual the borrower must be a desirable person in

the society. He must have integrity. There are some factors such as the sobriety,
the promptness of payment goods habits personality, the ability and the
willingness to carry a project
Advance Secured and Unsecured
5.3
1. Secured Advance: Secured advance are those advances which are secured by
tangible securities of adequate value over which the bank has either absolute or
constructive control in addition to the personal guarantee of the customer.
2. Unsecured Advance: The advances which are granted to a constituent of
undoubted standing and reliability and only in exceptional circumstances and for
short period without any tangible security are called unsecured advances.
5.4
Functions of Advance Department
Ensuring that funds are disbursed only after compliance with terms and conditions or
required documents received.
Make sure that the bank has always valid and current loan documentation.
Ensuring that the collateral security is adequate at times to support the loans.
Keeping the loan documentation under safe custody.
Ensuring that the bank receives sufficient valid insurance cover whenever
required from a recognized insurance company.
Monitoring the receipt of periodical receivable. Debiting the client for all charges,
interest etc.
Maintaining the central liability records for all extensions of credit and balancing the
totals with General Ledger
LOAN&ADVANCES
ADVANCE
Inland
Advance
(Loans)
Foreign
Advance
(Overdraft)
Advance
(Discount)
PCS
TOD
LTR
Transport Loan
SOD
LIM
HBL( General)
CC(Hypo)
PC
Loan( General)
CC( Pledge)
FPB
HBL( Staff)
IBP
Project Loan
LPDB
Furniture Loan
PAD
5.5
Types of Loan
Pubali Bank Principal Branch has the following loan schemes
Continuous Loan
Demand Loan
Term Loan
Cash Credit (CC)
Overdraft (OD)
Bank Guarantee
Staff Loan(PBL)
Continuous Loan:
The limited loans with expiry date of loan payment, which can be
transacted without any particular payment schedule, are termed as continuous loan.
Following are the various categories:
1. Small Enterprise Financing (SEF)
2. Consumer Financing (CF)
3. Other than SEF and CF
Demand Loan
The loans, which become eligible for payment when demanded by the bank, are termed
as demand loan. If contingent or any other debt becomes forced loan, then those are also
termed as demand loan.
2. Consumer Financing (CF)
3. Other than SEF and CF
Term Loan
The loans which are to be paid within limited term with a particular payment schedule are
known as term loan.
(a) Term loans up to 5 years
2. Consumer Financing (Other than HF & LP)
3. Housing Finance (HF)
4. Loans for Professionals to setup business. (LP)
5. Others
(b) Term loan over 5 years
2. Consumer Financing (Other than HF & LP)
3. Housing Finance (HF)
4. Loans for Professionals to setup business. (LP)
5. Others
Short term Agro and Micro Credit:
The short-term loans which are listed in yearly
loan disbursement schedule served by the loan department of Bangladesh Bank, are
termed as short-term agricultural loan and micro-credit. The loan given to the agricultural
sector for less than 12 months is also included in this category. By short-term loan we
mean the loan below Tk 10,000 to be paid within 12 months.
Cash Credit (CC)

a. Cash credit is given through the Cash Credit (CC) account.
b. Cash credit account is basically a current account, however a little difference exist
between them. The distinction between a current account a CC account is that the
former is intended to be an account with credit balance and the latter an account for
drawing of advances.
c. Operation of cash credit is as same as overdraft. The purpose of cash credit is to
meet working capital needs of traders, farmers, and industrialists.
Over Draft (OD)

a. Overdrafts are those drawings which are allowed by the banker in excess of the
balance in the account up to a specified amount for definite period.
b. Generally it is given to the businessmen to maintain their business activities.
c. Any deposit in the SOD account is treated as repayment of overdraft.
d. Generally provided against FDR, any primary security etc.
OD and CC amount as on 30th June, 2008
Over Draft
11,787,897,330
Cash Credit
12,202,851,147
Bank Guarantee
a. The bank is very often requested by his customer to issue guarantees on behalf of
their party committing to make an unconditional payment of certain amount of
money to the third party, if the customer (on whose behalf guarantee is given)
becomes liable, or creates any loss or damage to the third party.
b. It is a contingent liability for the bank and 3% commission is charged for this. After
the expiry of the period bank is no longer liable to the third party.
c. Generally issued by the banker for payment of tender. Paying customs duty, sales
tax, insurance premium, guarantees are also issued on behalf of the customer.
Bid Bond
Generally issued while dropping tender for work.

It is issued when customer gets a specific work-order. Here bank
Performance
guarantees that his customer is willing and able to complete the
Bond
required work, and bank takes the responsibility of completing the

contracted work.
Staff Loan
1. STAFF HOUSE BUILDING LOAN SHBL
a. 120 times of the basic salary is provided as SHBL

b. Bank Rate + 1%, interest is charged to the employee
c. Repayment is adjusted from their monthly salary
d. Repayment is made at equal monthly installment
2. STAFF LOAN AGAINST PROVIDENT FUND SPF
a. 10% of basic is contributed by employee in every month

b. 10% of basic is also contributed to the PF by the Bank
c. Repayment is adjusted from their monthly salary
d. Maximum Sanction from PF
5.6
Process of Loan
Application
Applicant applies for the loan in the prescribed form of the bank describing the types and
purpose of loan.
Sanction
a. Collecting credit information about the applicant to determine the credit worthiness of
the borrower. Sources of information
i.
Personal Investigation, Confidential Report from other bank, Head

Office/Branch/Chamber of Commerce.
ii.
CIB (Central Information Bureau) report from Central Bank.
b. Evaluation of compliance with its lending policy.

c. Evaluating the proposed security
d. If loan amount exceeds 50 lac then bank goes for LRA Analysis.
e. LRA is must for the loan exceeding one crore as ordered by Bangladesh Bank. LRA
has described at the end of this chapter.
If everything is in accordance the loan is sanctioned
Documentation
a. Then the bank prepares a loan proposal containing terms and conditions of loan for
approval of H.O. or Manager.
b. Takes the necessary papers and signatures from borrower
Disbursement
A loan Account is opened where
Dr customer A/C.
Cr Respective Loan A/C
5.7
State of Classification and Provision for 5 Years of PBL
(Figures in Million)
SL
Particulars
2004
2005
2006
2007
2008
Deposit
39789.7
44443.0
48675.9
57996.8
73016.51
Total Loans &
27542.3
32639.6
40386.6
50549.1
Advance
a) Unclassified
19790.8
24747.4
35208.4
46006.8
57450.27
b) Classified
7751.5
7892.2
3206.82
2514.90
2219.31
a) Required amount
321.85
289.22
104.97
113.98
137.82
b) Provision Obtained 145.79
216.87
111.48
117.67
142.78
c) Not Obtained/Short 243.77
102.95
65.05
36.88
49.57
573.45
845.53
1353.51
1515.23
No
1.
2.
3.
61788.15
of Provision
fall
4.
Net Profit/Loss
134.70
With the passage of time the bank is expanding day by day. That is what we see
that the amount of deposit is increasing gradually from year 2004 to 2008.Total deposit of
the bank was TK 73016.51 million during 2008 showing 25.90% increase than the
previous year.
Total advances of the bank as on 31st December 2008 stood at TK. 61788.15
million showing an increase of Taka 11238.98 million @22.23% growth. .
Due to expansion the bank is offering more loans to its clients. That is why we see that
the amount of loan is increasing gradually from year 2004 to 2008.
Again from the figures and graphs above we see that during the year the bank made
provision of TK. 305.00 million against loans and advances, diminution in value
investments, exposure of Off Balance sheet items and provision of TK. 1515.23 million
which is higher than previous year. Profitability of the bank has increase 19.55% in the
year of 2008.
CHAPTER
SIX
SWOT Analysis
Introduction
SWOT is an acronym for the internal Strength and Weakness of a firm and the
environmental Opportunity and Threat facing that firm. So if we consider Pubali Bank as
a business firm and analyze its strength, weakness, opportunity and threat, the scenario
will be as follows:
Strength:
(a) Good management.
(b) Cooperation with each other.
(c) Usage of faster pc bank software.
(d) Membership of SWIFT.
(e) Good banker-customer relationship.
(f) Online Banking services.
(g) Strong financial position.
(h) Strong position of CAMEL rating.
(i) Huge business area.
(j) Excellent monitoring and supervision.
(k) Energetic as well as smart teamwork.
Weakness:
(a) Lack of proper motivation, training and job rotation.
(b) Lack of experience employees in junior level management.
(c) Lack of own ATM services.
(d) Tendency to leave the bank in quest of flexible environment.
Opportunity:
(a) Expand market.
(b) Growth of sales service.
(c) Change in political environment.
(d) Lunching own ATM card.
Threat:
(a) Different service of FCBs (Phone Banking / Home Banking)

(b) Daily basis interest on deposit offered by HSBC.
(c) Entrance of new PCBs
.
CHAPTER
SEVEN
7.1
Findings
7.2
Recommendation
7.3
Conclusion
7.1
Findings
I have find out some points by screening the whole study, which is expressed as major
findings. I have analyzed the data sincerely and carefully and have tried to identify
appropriate findings. Moreover, conversations with the PBL officials were very
significant for these findings.
After overall appraisal of PBL, the major findings are as follows:
# Position: Pubali Bank Limited is the pioneer in private sector banking operations of the
country.
# Operational Orientation: Its major operations are development & welfare oriented.
# Management System: Management system of PBL is fully democratic.
# Requirements of Bangladesh Bank: PBL always maintains the rules declared by
Bangladesh Bank.
#Training Facilities: PBL provides training facilities to its officer of the bank and also
provides executive development & internship program.
#Management Functions: The management functions (from planning to control) are not
clearly present in their various activities.
# Computerization: Most of the activities are computerized.
# Manual Work: Paper-based works are still existed in branch.
# Decoration: It is a leading bank of Bangladesh but it has no attractive appearance in
office environment.
7.2
Recommendation
In order to get competitive advantage & to deliver quality service, top management
should try to modify the services. For the improvement of the service the following
measures should be taken:
# Customers Convenience: For customers convenience, PBL should provide more
personnel to deliver faster services to their honorable customer.
# Human Development: Development of human resources should be ensured to increase
efficiency in work.
# Communication System: Ensure proper communication system and maintenance of
files & machineries should modernize.
# Interest: More interest should be paid on deposit account so that customers are
convinced to deposit their money in bank.
# R & D: Research & Development wing must be more extensive & rich.
# Strategy: Effective strategies must be undertaken against defaulter.
# Project Management: Project Management must be practiced in case of investing in
the project. Feasibility study of the project, project planning, monitoring & evaluation
should be undertaken.
# Managerial Function: PBL must have to follow the management functions (from
planning to control) strictly in all of their business activities and also operation the bank.
# Financial Analysis: Branch should have a separate section to analyze the financial
statement for fining its liquidity, profitability & ownership ratios.
# Strict Rules for arrival and departure for the employee: Management should strict about
the arrival and departure time for the employees.
# Job Rotation: In PBL job rotation is fully absent job rotation is very important to make
the entire employee efficient for all departments.
# Appreciation: No doubt that in PBL female employees is more efficient and hard
working than male employees. It is very important to appreciate them and give them
proper respect. Because if they get the appreciation then they can increase their volume
of work. It is not only for the female it is also important both for male and female
employees.
# Image: Office should be fully redecorated to attract people to conic into it.
Some other important factor that should be focused on the development process:
# Time consumed at service level should be minimized at optimum level.
# Evaluate customers needs from their perspective and explain logically the
shortcomings.
# Improve office atmosphere to give customers better feeling.
# Use of effective MIS (Management information system).
# To deliver quality service top management should try to mitigate the gap between
customers expectation & employees perception.
7.3
Conclusion
There are a number of nationalized and foreign banks operating their activities in
Bangladesh. The PBL is one of them. For the future planning and the successful operation
in achieving in its PBL goal in this current competitive environment this report can be a
guideline.
Bank always contributes towards the economic development of a country. PBL,
compared with other banks are contributing more by investing most of their funds in
fruitful projects leading to increase in production. It is obvious that right thinking of this
bank including establishing a successful network over the country and increasing
resources, will be able to play a considerable role in the portfolio of development
financing in the developing country like ours.
PBL continues to play its leading role in socio-economic development of the country as a
companion of Independent Bangladesh. Besides its traditional function such as deposit
mobilization, deployment of fund in trade, commerce, industry, agriculture, import &
export business, outward and inward remittance as an agent of Bangladesh Batik of PBL
has emerged as the pioneer of playing key role in the country.
Pubali Bank is a private bank but it has no attractive environment ii their branch and all
branches are not computerized, even total cash are not properly use when this bank
develop their all branch by attractive environment and computerized. On the other hand
cash are properly used at that time this bank reached in the top-level private bank in our
country. If the Bank cannot fulfill these things, they cannot run in the future with their
competitors Bank.
CHAPTER
EIGHT
8.1 Acronyms
8.2 Bibliography
8.1
Acronyms
BB
PBL
BL
CC
C&F
CIB
CRF
EPB
ERC
EXP
For
m
IBCA
IBCT
IBDA
ID
IMP
Form
IRC
LIM
LATR
MBM
OBC
PAD
SOD
SWIFT
TIN
Bangladesh Bank
Pubali Bank Limited
Bill of Lading
Cash Credit
Clearing & Forwarding
Credit Information Bureau
Clean Report Findings
Export Promotion Bureau
Export Registration Certificate
Export Form
Inter Branch Credit Advice
Inter branch Credit Transaction
Inter Branch Debit Advice
International Division
Import Form
Import Registration Certificate
Loan against Imported
Merchandise
Loan against Trust Receipt
Masters in Bank Management
Outward Bills for Collection
Payment against Document
Secured Overdraft
Society for Worldwide Inter bank
Financial Telecommunication
Tax Identification Number
8.2
Bibliography
Brigham, Eugene F Joel E. Houston, Fundamental of Financial

Management, Ninth Edition, Harcourt Publisher International Company,
2001.
Basudevan, S.V., Theories of Commercial Banking, Reading Materials on
Theory & Practice of Banking (B-101), Bangladesh Institute of Bank
Management (BIBM), 2000.
Rose Peter. Commercial Bank Management, Third Edition, Irwin McGrawHill Publisher, 1996.
Others
Diary-Diary has been maintained regularly to record

all the activities of practical orientation.
Bangladesh Bank, Guideline for Foreign Exchange Transactions, Volume 1 &
2
Pubali Bank Limited, Manual of Foreign Exchange.

Pubali Bank Limited, Annual Report 2008
Pubali Bank Limited, Financial Transactions Abstract.
Website
www.pubalibangla.com
www.google.com

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Overall Banking Performance of Pubali Bank Ltd

STAMFORD UNIVERSITY BANGLADESH

Overall Banking Performance of Pubali Bank Ltd

Date of Submission: 8th October, 2009

1.2 Objective of the Study

1.3 Scope of the study

1.5 Sources of Data

1.6 Limitation of the study

2.1 History of Pubali Bank Ltd

2.2 About Pubali Bank Ltd

2.3Present Status of PBL

2.4 Vision of Pubali Bank Ltd

2.5 Mission of Pubali Bank Ltd

Maintenance of the subsidiary registers for receipt of cheques,

Account Opening Section

Different types of A/C of PBL Principal Office

Documents required for opening new account

Account opening procedure

Precautionary Measures of A/C Opening

Formalities for opening Current A/C and STD A/C

Formalities for opening Private foreign currency A/C

Issue of Duplicate cheque book

Formalities maintained for closing an account

3.3.10 Interest rate on deposit

3.3.11 Learning of This Section

Local Remittance Section

Telegraphic Transfer (TT)

Learning of This Section

Function of cash department

Cash Received tools

Cash Receiving Procedure

Cash Payment tools

Cash Payment Procedure

3.7 Accounts Department

Function of Foreign Exchange Department

Importers Application for L/C Limit/Margin

The L/C Application

Scrutiny of L/C Application

Precautions for issuing L/C

Credit Report on Beneficiary

Presentation of the Documents

4.4.10 Handling of Discrepant Import Document

4.4.11 Receiving Documents

4.4.12 Lodgment & Retirement

4.4.13 Payment against document (PAD)

4.4.14 Loan against Imported Merchandise (LIM)

4.4.15 Loan against Trust Receipt (LATR)

Exchange rate and foreign remittance

Loans and Advances

5.2 Managers Concern

5.2.1 How to locate purpose

5.2.2 How to locate security

5.2.3 How to locate borrower

5.3 Advance Secured and Unsecured

5.4 Function of Advance Department

5.5 Types of Loan

5.6 Process of Loan

5.7 State of Classification and Provision for 5 Years of PBL

6.1 SWOT Analysis

manpower structure and its expertise and experience. To introduce

Objective of the Study

To accomplish the partial requisite of BBA program and achieve of good

To have a revelation on the banking environment of Bangladesh.