Brac Bank 2014

LETTER OF TRANSMITTAL
December 26, 2013

Mr. Md. Ataur Rahman
Executive Director
Bangladesh Bank Training Academy
Bangladesh Bank
Mirpur-02, Dhaka
Subject: Submission of Report on Practical Training in Brac Bank
Limited".
Dear Sir,
It is an honor and great pleasure for us to submit the report on "Practical
Training in Brac Bank Limited", as a requirement for completing our
Foundation Training Course in Bangladesh Bank Training Academy. We
have tried our level best to make this report a successful one. This report
has given us an opportunity to apply our theoretical expertise and ideas in
combination with the practical experience we have gathered in our
practical training in commercial bank.
We hope you would find the report in appropriate manner. We appreciate
your cooperation and hope you will call upon us with any queries
occasioned by this report. Thanking you and looking forward to receive
your cordial approval of our submission.
Sincerely Yours
_______________________
Md. Habibur Raman
Roll # 40
_______________________
Md. Abdur Rouf
Roll # 41
_______________________
Mohammad Saiful Islam
Roll # 42
Bangladesh Bank Training Academy, Mirpur#02, Dhaka
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ACKNOWLEDGEMENT
The successful accomplishment of this report is the outcome of the

contribution and involvement of number of people, especially those who
took the time to share their thoughtful guidance and suggestions to
prepare the report and it is our pleasure to take this opportunity to
acknowledge the guidance, help and serenity of them.
At the beginning, we would like to pay our gratitude to the Almighty for
giving us the ability to work hard under pressure.
We would like to thank our Organizational Supervisor Mr. Md. Ataur
Rahman, Executive Director, for giving us the opportunity to implement
our knowledge and studies and to offer us the opportunity to use the
resources of this academy for the purpose of this report. We would also
like to thank our Chief Course Director Mr. Sk. Azizul Haque, General
Manager, Chief Course Coordinator Mr. Shaikh Md. Salim, Deputy General
Manager and Module Coordinator of Commercial Banking Training Ms.
Tania Mustafiz, Deputy Director, for their continuous support and
supervision, suggestions and providing us with valuable information that
was very much needed for the completion of this report.
We would also like to thank our Mentor Mr. Sajid Rahman, Head of Large
Corporate, Brac Bank Limited, and Mr. Faisal Rahman, Manager, Learning
& Development, Brac Bank Limited for their guidance in our practical
training.
Lastly, we also express our cordial thanks to our colleagues for their kind
help and cooperation whenever needed.
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EXECUTIVE SUMMARY
This report is prepared on the basis of On Desk Training in Commercial

Banking at BRAC Bank Ltd. The training program helped us to acquire
knowledge about the practical situation of a financial institution. This
program helped us to implement our theoretical knowledge in to practical
and realistic work environment.
In the age of modern civilization, bank is playing vital role to keep the
wheel of economic development moving. Bank provides means and
mechanisms of transferring command over resources of those who have
excess of income to those who can make use of the same for adding to
the volume of productive capital. There are a large number of small
amount of savings that are generally reluctant to invest their surplus
income because of their lack of adequate knowledge about complicated
investment affairs. The bank provides them with the safety, liquidity, and
profitability of savings. Banks take deposits and invest those deposits in
higher degrees of return and maximize their profit in business.
BRAC Bank started its business in 2001 with a clear vision to work as a
catalyst for the vibrant yet unbanked SME sector in Bangladesh. The Bank
focuses on 3P: People, Planet and Profit. This is the brain child of Sir Fazle
Hasan Abed backed by BRAC. BRAC Bank is a financial hypermarket that
offers financial solutions for all strata be it retail, SME, wholesale
banking, capital market, or remittance; but it always had a focus on SME.
This bank was actually founded on a philosophy of keeping trust on the
hopes and dreams of Bangladeshi entrepreneurs and majority have been
beyond the conventional banking reach.
This report is divided into seven parts. The introductory part describes
origin, objectives, methodology and limitation of the report. The second
part contains an overview of BRAC Bank Ltd. The third part consists of
details about the general banking activities. The fourth part represents the
loans and advance department. The fifth part consists of foreign exchange
department. And the last two parts consist of recommendations and
conclusion.
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Page 57
Table of Contents
Particulars
Page No
LETTER OF TRANSMITTAL
01
ACKNOWLEDGEMENT
02
EXECUTIVE SUMMARY
03
Chapter 1: Introduction
06-07
1.1
Origin of the Report
06
1.2
Objective of the Report
06
1.3
Methodology of the Report
07
1.4
Limitations of the Report
07
Chapter 2: Overview of BRAC Bank Limited

08-13
2.1
Present status of BRAC Bank Limited
08
2.2
Corporate Vision, Mission & Core Values
09
2.3
Subsidiaries of BRAC Bank
10
2.4
Divisions of BRAC Bank
10
2.5
Organogram of BRAC Bank
11
2.6
Strategic Business Units of BRAC Bank
12
2.7
Products & Services of BRAC Bank
13
Chapter 3: Functions of General Banking Department

14-26
3.1
Customer Service Section
14
3.2
24
Cash Section
Chapter 4: Loans and Advances

27-40
4.1
SME Credit
27
4.1.1
Documentation of SME Credit
30
4.2
Corporate Credit
33
4.2.1
Credit Risk Management
34
4.2.2
Recovery Unit
35
4.2.3
Credit Risk Assessment
35
4.2.4
Process Flow to CRM
36
Table of Contents
Particulars
Page No
4.2.5
Types of Credit
37
4.2.6
Collection
37
4.3
Retail Credit
38
4.4
Credit Card
39
4.5BankAgro
Processing
& WomenMirpur#02,
Enterprise Re-financing
Bangladesh
Training
Academy,
Dhaka
40
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CHAPTER # 1: INTRODUCTION
1.1 Origin of the Report

Placement or training program is an indispensable part of Foundation Training Program in
BBTA that bridges the gap between the theoretical knowledge and practical situation. We
were assigned to the BRAC Bank in Motijheel Br. & Mirpur Br., Head Office, Back Office
and one of their SME zonal office at Shantinogor, Dhaka to take the real banking experience
in order to reinforce knowledge acquired so far from the BBTA training program. In this
training program, each trainee is required to attend On Desk Training in a bank and to
prepare a report on practical experience. This report is tentatively prepared to complete our
BBTA training program.
1.2 Objectives of the Report

The main objective of the study is to know over all banking of BRAC Bank Ltd. and to have
an overall idea on how it operates in the competitive markets deliver with customers
satisfaction and retain them. Besides this main objective there are some specific objectives.
To know the facilities offered by the BRAC Bank Limited to develop their customers
satisfaction and retain them.
To familiarize rules and regulation provided by Bangladesh Bank.
To know about the marketing process and plan of BRAC Bank Limited that attain it
the premier financial institution.
To be familiar with day to day functioning and services offered by a commercial

bank.
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To make a bridge between the theories and practices on banking operations.
1.3 Methodology of the Report

Different data and information are required to meet the goal of this report. Those data and
information were collected from various sources, such as, primary and secondary which is
shown below:
Primary Sources of Data:
Personal observation.
Face to face conversation with the officers.
Working at different desks of the bank.
Secondary Sources of Data:
Annual report of BRAC Bank Ltd.
Internet.
Bangladesh Bureau of Statistics report.
1.4 Limitations of the Report

Banking contains a huge volume of operation and it is quite impossible to gain knowledge
about all the activities during a research period. The major limitation of the study is
accessibility of certain data. As per banking rules and regulations certain information is not
disclosed to outsiders for safety purpose of the bank. The basic limitations faced in preparing
this report on disclosure procedure of BRAC Bank Limited are:
Interviewing of the officials on specific disclosure items sometimes was not fruitful
because of generalized answers.
In-depth interview with the classified clients were not possible.
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Banks policy of not disclosing some sensitive data and information for obvious
reason posed an obstacle to the practical orientation that could be very much useful.
Non-availability of data and information that are more recent on different activities of
BRAC Bank was a great difficulty to depict the actual and up-to-date business
position of the bank.
CHAPTER # 2: OVERVIEW OF BRAC BANK LIMITED
2.1 Present Status of BRAC Bank Limited

BRAC Bank is a private commercial bank focused on Small and Medium Enterprises
founded on 4th July, 2001. The company consists of 155 branches, 400 SME unit offices, 675
Remittance Delivery Points, Over 320 ATMs and about 8000 employees across the country.
BRAC Banks operation now cuts across all segments and services in financial industry of the
country. With more than one million customers, the Bank has already proved to be the largest
SME financier in just 13 years of its operation in Bangladesh and continues to broaden its
horizon into Retail, Corporate, SME, NRB and other arenas of banking.
The present shareholding structure of BBL is as follows:
Name of Shareholder
% of Shareholding
BRAC
44.64%
International Finance Corporation
5.36%
Sir Fazle Hasan Abed & others
0.007%
Institutions and General Public
50.00%
BRAC Bank practices upon a model where fund accumulated from urban deposits
disseminates in the rural and uplift Small and Medium Enterprises (SME). By now it has
become fourth largest SME bank globally. The company also offers Probashi banking, which
specifically caters to non-resident Bangladeshis abroad. Other areas include customized
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treasury and foreign exchange solutions, cash management and custodial services. In the year
2010, BRAC Bank has been recognized as Asias most Sustainable Bank in emerging markets
by the Financial Times and IFC. In 2011, BRAC Bank has achieved the international award
for Best Retail Bank in Bangladesh by The Asian Banker. In 2013, it won the award for the
Best Managed Bank from the Asian Banker.
2.2 Corporate Vision, Mission and Core Values of BRAC

Bank Limited
Corporate Vision
Building profitable and socially responsible financial institution focused on Market and
Business with Growth potential, thereby assisting BRAC and stakeholders to build a just,
enlightened, healthy democratic and poverty free Bangladesh.
Corporate Mission
Sustained growth in Small & Medium Enterprise sector
Continuous low-cost deposit Growth with controlled growth in retail assets.
Corporate Assets to be funded through self-liability mobilization. Growth in Assets
through syndications and investment in faster growing sectors.
Continuous endeavor to increase non-funded income
Achieve efficient synergies between the banks branches, SME unit offices and BRAC
field offices for delivery of remittance and Banks other products and services
Manage various lines of business in a full controlled environment with no
compromise on service quality
Core Values
Value the fact that one is a member of the BRAC family
Creating an honest, open and enabling environment
Have a strong customer focus and build relationships based on integrity, superior
service and mutual benefit
Strive for profit & sound growth
Work as team to serve the best interest of our owners
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Relentless in pursuit of business innovation and improvement

Value and respect people and make decisions based on merit
Base recognition and reward on performance
Responsible, trustworthy and law-abiding in all that we do.
2.3 Subsidiaries of BRAC Bank Limited
BRAC EPL Stock Brokerage

Ltd.
BRAC Investment Ltd.
BRAC SAAJAN Exchange Ltd.
bKash
BRAC IT Service Ltd.
2.4 Divisions of BRAC Bank Limited
Probashi Banking
Retail Banking
SME Banking
Corporate Banking
Division
Human Resources
Division
Technology
Treasury & Financial

Institutions
Research &
Development
Cash Management &

Custodial Services
Risk Management
Finance
Service Division
Quality
Credit Risk
Corporate
Affairs
Management
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2.5 Organogram of BRAC Bank Limited

BRAC Bank follows decentralized organizational structure for delegation of authority and
responsibility to down-the-line staffs. This empowers the managers to take quick decision in
this changing banking environment.
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2.6 Strategic Business Units of BRAC Bank Limited

The main strategic business unit of BRAC Bank Limited is SME banking. Think SME, think
Brac Bank Limited is the main brand ethos of the bank. Brac Bank has around 50% of its
business in SME to serve the missing middle of the country. In addition to SME, it is also one
of the country leaders in retail banking.
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2.7 Products and Services Provided by
Brac Bank
Limited
BRAC Bank has all type of banking products in its basket. What a person needs - deposit of
fund, loan for investment or a credit card for shopping and traveling purpose-just he has to go
to BRAC Bank. However it can increase its NRB products to serve the high remittance
providers of the country.
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CHAPTER # 3: GENERAL BANKING
General Banking is the most important side for every bank. Bank is nothing but a middleman
between lenders (surplus unit) and borrowers (deficit unit). To provide loan bank need huge
amount of money from the depositors. General banking is the side where the bank offers
different alternatives to the client to depositors and remitted their money. To encourage the
clients, bank offers different option in front of the clients. Most of these options are very
much similar among the banks but the customer service and facilities are different.
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General banking of BRAC Bank Ltd. is divided into four parts. These are:
General Banking
Customer Service
Cash
Clearing
Section
Section
Section
Remittance
Section
3.1 Customer Service Section

Customer service department works with specially account opening, account closing,
customer information change, FDR open, FDR encashment, FDR closing, Pay order issue,
Pay order cancellation. This department works with specially banking operational activities,
such as current/savings/easy account open for individual customer, open current account for
companies or sole proprietorship, DPS opening, encashment of DPS. Closing of
current/savings account of individual customer, closing of current company/partnership
account, deceased account, static data change, Debit card issuance, Debit card
replacement, new PIN issue, PIN re-issue, cheque book requisition, dormant accounts,
internet & SMS banking opening, handling loan applications, handling home loan
applications, handling auto loan applications, issuance balance certificates, counter stock
register and daily reconciliation, fund transfer etc.
Account Opening Procedure
Duly filled-up prescribed Application Form (including TP and KYC) by the applicant
with introductory reference by an account holder
Duly fill up the specimen signature card in front of a concerned person by the
applicant
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Verify the introductory reference and examine the documents by the authorized person
Obtaining of photographs of the applicant and nominee, photocopy of NID/Photo

identity card of the applicant, photocopy of utility bill as a proof of contact point
Issue the deposit slip and make deposit in cash. No cheque or draft is acceptable.
An ATM application form is filled in if the customer requests for a Debit card
Activation of account & issue of cheque book (after 3days)
Issuing cheque book

Fresh cheque book is issued to the account holder only against requisition on the prescribed
application form. After verifying the signature of the A/C holder branch issues cheque book
after making necessary entries in Check Issue Register.
Duplicate checkbook in lieu of lost one is issued only when an A/C holder personally
approaches to the bank with an application agreeing to indemnify the Bank for the lost check
book. After verifying the signature of the A/C holder series number of lost checkbook is
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recorded in the stop payment register and caution should be exercised to guard against
fraudulent payment.
Stop Cheques Request

In the following cases stop cheque request may be granted from customers.
Customer In-Person
Mail-in/Drop-in (customers written request submitted by agent)
Phone-In (only through Call Centre)
Stop payment request is entertained only if the customer confirms that the cheques are stolen
or lost or issued under duress. For any other reasons, bank should make the payment against
the cheque if the payee presents it to the bank & the instrument is in order.
Account Enquiry
A customer can obtain the statement of his A/C by submission of an application in prescribed
balance enquiry receipt. Normally it is supplied two times in a year. In addition, customer can
know his current deposit position informally.
Deceased Account
When notice of death of a customer is received at the branch, it is forwarded to the CSO
(Customer Service Officer)/CSM (Customer service manager)/BM (Branch Manager). If
notice of death is received as a result of a notification in the press or upon verbal information,
efforts must be made immediately to obtain sight of the death certificate in order to
authenticate the information already received. CSM/BM/his designate checks the notice /
letter and marks the same having seen and arranges to forward the request to Deposit
Origination and concerned department immediately for further processing to pay the
outstanding balance to the nominee(s).
Dormant Accounts
When accounts not transacted for a certain period of time are marked as Dormant Account
automatically by system. As soon as system automatically flags such accounts as Dormant,
no transaction is allowed in such accounts without manual forced passing of entries. If the
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customer wants to transact in his/her dormant account, customer service officer should advise
the customer that his/her account has been dormant and advise him/her to submit written
request or fills up activation form as available at branches. Dormant accounts should only be
activated when customer is physically present at branch having submitted the photo ID.
Fixed Deposit (FD) /DPS opening

At first Customer approaches to customer service officer and requests for opening a FD/DPS
account. Customer service officer checks the rate sheet and advises interest rates or special
quoted rate if any, based upon the amount. DPS are to be opened only for those customers
who hold account relationship with BRAC Bank Limited. If the customer accepts the rate,
CSO requests customer to complete FD/DPS Account Opening Form with KYC form and
also request to submit necessary documentation. Where FD/DPS Form/instruction - for
existing customers is taken, customer service officer verifies the customers signature and
check the account for sufficient balance if the account is being opened by an account transfer
(for initial deposit). If any restriction mark exists in the existing account, BSSO (Branch sales
and service officer) will refer it to CSO / BM/his designate for decision. In case of joint
account, both the customers need to sign on the form to open the Fixed Deposit under the
same CIF. If the customer wishes to deposit cheque / cash into the deposit account, CSO
completes a deposit slip with details (for new accounts not opened same day Cash / Cheques
will be credited to Branch Sundry A/C) and requests the customer to deposit the same in cash
area. Where clearing cheques are taken for opening the deposit, CSO advises the customer
that the account would be opened subject to realization of the cheque. Branch sales and
service officer takes approval from BSSM/CSM/BM/his designate.
Encashment of FD/DPS
Customer approaches to the customer service officer for encashment of his Fixed Deposit.
For pre-mature encashment, interest payment decision should be guided as per prevailing
guidelines (e.g., no interest will be paid for deposit stayed for less than 3 month; saving
interest rate will be paid for deposit stayed for less than 6 month). Branch sales and service
officer asks customer whether proceeds will be transferred to his / her account or Payment
Order needs to be issued. Customer fills up the encashment form and submits the FD advice
or receipt copy with sign to customer service officer. Customer service officer checks and
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ensures that the FD/DPS is not held under lien and has no reject marks on the FD account.
Customer service officer also ensures that the link account where the proceeds will be
credited has no restriction also. If no lien or restriction exists, customer service officer
processes the request. In case of joint account (even if the operating instruction is Either or
Survivor), both the customers need to sign in the form at the time of premature encashment.
Internet & SMS banking opening

Customer service officer requests to the customer to complete the Internet & SMS Banking
form. Customer fills up the form and CSO checks the forms following thing in the system:
Signature of customer
Photo of customer which must be matched with the customer.
Email address and mobile number (clearly written)
PO Issuance
Customer service officer acknowledges the customer about PO issuance charges and asks the
customer whether he has an account in BRAC Bank Limited. Customer service officer
provides the PO issuance form to the customer. Customer fills up the form and signs on it and
submits to the customer service officer. Customer service officer checks the following thing:
Customer signature and photo
Availability of fund
After checking customer service officer signs on the form with seal and issues PO in Finacle
(core banking solution used by BRAC Bank Limited). Then he forwards the form to
CSM/BM/his designate for issuing PO. Accounting treatment for issuing PO is:
Customer Account
Dr
Charge
Cr
Vat Payable
Cr
A/C payable (respective party)
Cr
PAY Order Cancellation:
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Customer service officer provides the PO Cancellation/lost PO form to the customer and
branch sales and service officer acknowledges the customer about charges. Customer fills up
the form with PO leaves and submits to the CSO. If PO is lost then customer must submit GD
copy, Indemnity form and forwarding letter with two witnesses. Service officer checks form
and following thing:
Customers signature and photo
Available fund
PO account and leaves
Customers Name,
Account Number,
PO Serial Number,
Issue Date, Amount
Match PO counterfoil
Previous PO receipt.
Customer service officer cancels the PO from system and takes charge from customer link
account and put cancel seal on the PO leaves. Customer service officer forwards the PO
leaves and voucher copy to the CSM/BM/his designate for verifies the charge and
cancellation.\
Fund Transfer
For fund transfer customer service officer checks the following things before conducting his
fund transfer activities:
Customers signature and photo
Available fund
Account status
Customer service officer transfers the fund as per customer instruction if customers
information match in system and takes voucher prints out. Customer service officer signs on
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the voucher with seal and forwards the voucher copy with form to the CSM/BM/his
designates for verification. CSM/BM/his designate verifies the transaction and gives sign on
the voucher sheet and form with seal. Customer service officer preserves the form with
voucher copy for audit issuances.
Pay Order Bulk and Counter stock register and daily

reconciliation
Customer service officer maintains Pay Order bulk and counter stock register and daily
reconciliation. Branch sales and service officer collects Pay Order leaves from vault. Vault
custodian takes acknowledgement from branch sales and service officer on the vault PO bulk
register book. Branch service officer entries Pay Order leaves on the register book and
reconcile with previous days pay order leaves and sign on the register book. When any
customer service officer requires Pay order leaves then he/she collects pay order leaves from
branch sales and service officer giving sign on the register book .Customer service officer
reconciles Pay Order bulk and counter stock register with system at the EOD and sign on the
register book.
Vouchers Recording and preservation System:

Vouchers are printed from system and customer service manager verifies the entry. Next
working day, customer service manager prints the trial balance, cross checks printed copy of
trial balance is attached with vault proof sheet. Vouchers are preserved as per voucher
preservation process.
Issuance of Debit Card

While new cards are normally issued at the time of opening an account, customers may
requests subsequently for new cards when either a card was not applied for or a joint account
holder applies subsequently, service officer receives request from customer for issuance of
new card. These should be taken through standard form available with the branch. Customer
service officer should check that the said account is active and no reject mark exists therein.
If the status found otherwise, service officer will refer the case to CSM/BM his designate for
decision. Cards must not be issued in the following cases:
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Where operational account requires joint signatures i.e. jointly operated.

To a non-account holder i.e. to persons who may otherwise be authorized to operate
the account.
To company accounts. However, cards may be issued to Sole Proprietors. In such
cases, the cards must be in the name of the sole proprietor and not the name of the
firm.
Debit Cards Damaged and Replacement / New PIN Issue

Customer service officer receives request from customer for a replacement card or a new
PIN. Cards are required to be re-placed, if the cards are lost or cannot be used at the ATM for
any reason or the customer requires a new PIN. If the card has been lost customer service
officer follows process Debit Cards Lost Card. Customer service officer verifies the
signature and card details from the system. Card must be taken back from the customer.
However, PINs should not be taken from the customer even when offered. Customer service
officer destroys the card (should cut the card in two pieces) under dual control with another
staff and both of them sign the application in evidence.
Handling Loan Applications

Customer service officer provides a secured loan application form to the customer and
informed about the required documentation. Customer fills up the application form and
provides the necessary documentation. Customer service officer checks application form and
other following thing:
Customer signature & photo
Available fund
Lien mark etc
Customers release sign on FD receipt or FD advice back page
Customer service officer fills up the CIB form and sends it to the CIB Desk for CIB report
CIB Desk forwards the CIB report through mail to the respective Branch. Customer service
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officer down load the CIB report from mail and take print out. Customer service manager
checks the form and verifies the loan file.
Home Loan Documentations

At first interested customer approaches customer service officer and requests for home loan.
Then customer service officer acknowledges the customer about home loan and interest rate.
Customer service officer provides home loan application form to the customer and informed
about the required documentation. Customer fills up the application form and provides the
necessary documentation. Customer service officer checks application form and other
following thing:
Customer signature & photo
Account number
Customer address
Guarantor information
Bank statement
Required documents (as per PPG)
Customer service officer fills up the CIB form and calculate the installment and forwards the
all documentation and application file to the CSM/BM/his designate for recommendation.
Customer service manager checks the form and verifies the loan file. Service officer sends the
all necessary docs and Application form to the CRM for approval through courier. Credit risk
management conditionally approves the loan file and branch sales and service officer receives
the conditionally approves loan file and takes sign from customer on the conditionally
approves loan file. Customer service officer advices the customer to open loan transaction
account and customer service officer sends the documentation to the legal advisor for legal
vetting. After vetting customer service officer sends the vetted documents to the Loan
Origination for further processing. CIB desk forwards the CIB report through mail to the
respective branch. Customer service officer down loads the CIB report from mail and
forwards the CIB report to the CRM for further processing. Credit risk management approves
the file and sends the final approved file to the respective customer service officer. Customer
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service officer advices the customer to issue insurance as per Brac Bank listed company and
he collects insurance copy and TPA from customer. Branch respective person goes to register
offices for mortgages the property (If Developer Company is not listed in Brac Bank list).
After that CSO checked the following things:
Insurance Copy
Mortgage Copy
TPA form, Blank PDC
Allotment copy and Money receipt
After Disbursement customer service officer collects Pay Order from Loan Origination
Department and hand over to the Developer for delivery to the customer and customer service
officer takes money receipt and pay Orders satisfactory part from the Developer.
Car Loan Documentations

Customer service officer acknowledges the customer about Auto loan and interest rate. He
provides an Auto Loan application form to the customer and informed about the required
documentation. Customer service officer forwards the all documentation with CIB report and
application file to the CSM/BM/his designate for verifying/ recommendation. CSM/BM/his
designate person checks the form and verifies the loan file. Customer service officer sends all
necessary documents with CIB report and Application form to the CRM for approval through
courier. Customer service officer preserves the receive copy for audit issuance. Branch sales
and service officer collects the purchase order from Loan Origination and submits to the
showroom for delivery to the customer. CSO takes the acknowledgement from showroom.
Customer service officer collects the necessary documentation from customer for
disbursement and submit to the retail customer care Help Desk. After Disbursement CSO
collects Pay Order from Loan Origination (LO) and hand over to the showroom for delivery
to the customer and CSO takes money receipt from Showroom.
Closing of an account
An account may close-
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When the customer desirous to close the account.

When the account is inoperative for a long time.
In case of customers death, insanity or insolvency.
When the court on that particular A/C issues Garnishee Order.
To close an account, the checkbook is to be returned to the bank. BRAC bank does not charge
any amount for closing an account. Therefore the outstanding balance then paid to the
customer. Necessary entries are given to the account closing register and computer by making
sure that A/C holder is completely free from all dues.
2.2 Cash Section

Cash is the lifeblood of all financial institutions. Cash section is a very sensitive point of the
branch. This section deals with all types of negotiable instruments and it includes vault, used
as the store of cash instruments. Cash officer begins his/her transaction with taking money
from the vault, known as the opening cash balance. Vault is kept in a more secured place. The
amount of opening cash balance is entered into a register. After whole days transaction, the
surplus money remains in the cash counter is put back in the vault and known as the closing
balance. If the cash stock goes beyond this limit, the excess cash is then transferred to IBCM
(Inter Branch Cash Management). The main functions of this section areCash Receipt
Cash Payment
Cash Receipt
Cash receipt procedure is given below The depositor first fills up the Deposit-in-Slip.
Depositor deposits the money.
Officer receives the money, counts and then enters in the Cash Receipt Register, and
finally signs with seal and dates the deposit-in-slip.
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Slip is then passed to another officer, who enters the receipt details like serial no,
amount, etc. in his register, signs the slip and keeps the banks part of the slip. Other
part is given to the depositor.
At the end of the day, entries are cross checked with the register kept at the cash
counter to see whether the transactions are correct or not.
Cash Payment
Cash payment procedure is given below Customer first deposits the check (s) to the cash section. Authorized individual checks
whether it is materially altered, proper endorsed, crossed or not. Being satisfied the
total requirements; he passes it to the computer for checking the balance. Operator
verifies the check leaf security no. If matched, then operator signs. Otherwise noticed
to the individual for stop payment;
Authorized officer is then verified the signature with the scanned signature;
Cash officer is then asked the bearer to sign on the back of the instrument. At the
same he just enters the payment details in his register and pays the money to the
bearer;
Payment is made with the following delegation of authority:
Teller
- up to Tk. 3,00,000/-
Head Teller
- up to Tk. 10,00,000/-
Customer Service Manager
- up to Tk. 50,00,000/-
Branch Manager
- up to Tk. 1,00,00,000/-
Cluster Manager
- more than Tk. 1,00,00,000/-
At the end of the day, this information must be tallied with computer postings to
ensure the correctness of payment.
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Flow Chart of Cash Management
Cash Receipt
Cash Receipt
Cash Payment
Cash Payment
Entry Pass Receiving

Entry Pass Receiving
Register
Register
Entry Pass Paying

Entry Pass Paying
Register
Register
Receipt Summary
Receipt Summary
Payment Summary
Payment Summary
Cash Balance Book

Cash Balance Book
Volt Register
Volt Register
CHAPTER # 4: LOANS & ADVANCES
4.1 SME Credit
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At present SME Banking Division has a reach in all 64 districts of the country through 400
unit offices. The functional designation of the loan officers who operate at the unit offices is
Customer Relations Officers (CROs). For SME loan operation, BRAC Bank Ltd has in total
400 unit offices, 117 zonal offices, 15 territories, 117 Zonal Managers (ZM), 15 Territory
Managers (TM), 45 Assistant Relationship Managers and 1830 Customer Relationship
Officers (CRO). These CROs work for the Bank to convince clients for taking the SME loan.
A zone is comprised of 1-6 unit offices, where the person in-charge of the zone is known as a
Zonal Manager. The reporting manager of a CRO is the Zonal Manager (ZM) or Associate
Relationship Manager (ARM). Zonal Managers/ Associate Relationship Managers have the
authority to approve a loan up to Tk. 6,00,000/-. There are 137 Zonal offices in SME Banking
at present. A Territory is comprised of 6-11 zones. There are 15 territories at present. The
reporting of a Zonal Manager is the Territory Manager. The Associate Relationship Managers
however report to the Portfolio Managers of Women Entrepreneurs Cell (WEC) and Medium
Business.
Units of SME Banking Division

There are 3 business wings in SME Banking Division.
Small Business Unit
Women Entrepreneur Cell (WEC)
Medium Business Unit
Small Business Unit

This largest business unit of SME Banking Division has long been providing loans to SME
entrepreneurs. Regular business wing offers varying products. SME entrepreneurs mostly
require small finance that this business unit has successfully been offering to all level of SME
borrowers irrespective of business type. In addition to Small finance this business unit is also
offering finance to medium entrepreneurs.
Women Entrepreneur Cell (WEC)

Women Entrepreneurs Cell (WEC), one of its kinds in the banking industry of Bangladesh,
was launched in 2006 under SME Banking Division with an objective to offer access to
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formal finance along with training and technical assistance to the women entrepreneurs
across the country. In line with the vision of financing and developing women entrepreneurs
across the country, Women Entrepreneur Cell (WEC) of SME Banking Division has
accelerated the growth engine of 2469 SMEs with BDT 105 crore in 2010 and has also
arranged training and idea sharing programs for women entrepreneurs. Till introduction WEC
has catered to fund requirement of 3542 customers with BDT 147.83 crore. In order to give a
platform lo SME Women Entrepreneurs to discuss about different issues of SMEs with
related communities and policy makers BRAC Bank took an extra step and sponsored the 2nd
National SME Women Entrepreneurs Conference organized by SME Foundation.
Medium Business Unit

Manufacturing Business Unit (MBU):
The Manufacturing Business Unit was launched in August 2007 under SME Banking
Division. The objective of launching this unit is to better serve the manufacturing sector by
providing sector-focused loan and other services. Understanding the importance of
manufacturing sector, one of the critical sectors for a countrys economic growth, SME
Banking Division started Manufacturing Business Unit and the phenomenal response to this
business division can be apparent from the loan disbursement of BDT 103.40 crore to 2079
customers in 2010.
Supplier and Distributor Finance Unit (SDF):
Supplier and Distributor Finance Unit was launched in September 2007 to engine the growth
of linkage industry, an indispensable sector for any industry.
Commercial Credit Unit (CCU):

The Commercial Credit Unit (CCU) was launched in providing financial services in the Trade
Finance sector with pre and post import facilities. The commercial Credit Unit of SME
Banking Division has met LC retirement of BDT 27.30 crore of 351 SME clients in 2010.
Vehicle Financing Unit:
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This newly formed business unit of SME Banking is aimed at financing the commercial
vehicles of SMEs. This unit will operate in some selected areas of the country.
Product Development and Research Unit:
This unit primarily assesses the market and observes the potential of developing product or
service to cater different requirements of the existing/potential customers of SME Banking.
Product Development wing also develops campaigns and takes initiative to design
merchandises, with the help of the creative and communication division.
SME Operational Risk Management Unit:
This is comprised of several wings one of which is Recovery and Compliance Reporting, a
wing that collects overdue from default clients of SME Banking, follow up litigation against
the default clients and ensure compliance of internal policies and Bangladesh Bank
regulations to the unit offices. Another wing named Coordination maintains liaison of SME
Head office with SME unit offices and other departments. Loan Collection and Legal Affairs
wing provides legal assistance and knowledge to personnel at SME unit offices. Monitoring
unit reviews prevailing processes of SME Banking Division and ensures meticulous business
reporting for smooth operation.
In addition to offering loans, SME Banking Division has also started collecting deposit from
SMEs in a focused way through a dedicated business wing named "Deposit Mobilization
Unit", this unit has started operating from September 2008. This initiative of the bank has
made possible offering complete banking solutions to SMEs. The total deposit of SME
Banking stands at BDT 8970 million as a 30 December 2010.
4.1.1 Documentation of SME Credit

SME Credit team is a unit under Credit Division. The unit manages the credit risk of Banks
SME credit portfolio. The principal function is to process SME loan proposals above certain
amount for approval. Their job responsibility is to
Ensure regulatory policy/PPG/circulars related to sanctioning of a credit facility
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Identify credit risk and mitigates associated with a loan proposal

Recommend for approval/ rejection with appropriate terms and condition after
through credit assessment.
Prudential guidelines for small enterprise financing, credit policy for small enterprise
financing, and PPGs of different SME products are the policy documents often required to be
consulted with during discharging the above responsibilities. After recommendation by the
credit analysts the loan files are presented before appropriate authority for approval. The
approval authority is delegated to officers of the bank according to their experience in related
field.
After being initiated by CROs located in the unit offices across the country and recommended
by respective supervisor the loan files are sent to SME credit for approval, if the loan amount
is beyond the approval authority of ZM/ARM. Credit analysts are assigned to process loan
proposals received from different areas and business units of SME banking division under the
guidance of a manager who has approval authority up to Tk.10,00,000/-. Analysts assess the
proposal with due diligence providing reasonable emphasis on clients requirement and
capacity. During assessment the analysts fulfill a Risk Evaluation Sheet (which covers most
PPG criteria) to ensure compliance with policy and PPG. Identifying key risks involved in the
proposal is one of the most critical and tricky tasks. It requires experience of handling such
clients directly to understand the business modalities and more importantly behavioral issues
viz. reputation, character etc.
A typical SME borrower merely maintains regular banking transaction and often found not
having proper financial records. They often lack definite fund utilization plan. Low
investment in the business is very common in such enterprises. As such assessing
creditworthiness of these borrowers requires more than conventional credit risk management
wisdom. BRAC bank being the pioneer in financing such borrowers in a large volume is
experiencing this phenomenon and developing the expertise by the strategy may be named
Learning by doing.
Loan proposal assessment being the principal function, SME Credit team also contributes to
offsite monitoring of SME portfolio, staff development by training, creation of awareness
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among the related employees by issuing circular from time to time etc. Healthy SME credit
portfolio is the bottom line objective of SME credit team. From the following sources the
team members are scrutinize the client:
CIB (Credit Information Bureau) Report
Loan Application
Financial statement
Other sources: Press report-purchase and sale of property, auctions and
decrees, registration, search report from RJSC
Personal interview: Business, capital with reference to working capital,
experience, purpose of advance, security offered, and types of charge available.
Loan Presentation Forms (LPF)

Loan Presentation Forms (LPF) includes the following documents:
Credit Memorandum
Work sheet for Working Capital Requirement
Income Statement
Balance Sheet
Cash Flow Statement
Financial Ratios
Checklists etc
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Credit Transaction
Credit Transaction involves:
Risk of non payment
Timing
Security
Extra cost
Legal aspects
Economic influence
Credit Applications
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Credit Applications should include, as a minimum, the following details:

o Amount and type of loan(s) proposed.
o Purpose of loans
o Loan Structure (Tenor, Covenants, Repayment Schedule, Interest)
o Security (if any)
There shall be an internal audit and control function designed and strengthened in a way so
that it can efficiently undertake an objective review of the small enterprise finance portfolio
from time to time by assessing various risks and possible weaknesses. The internal audit
should also assess the adequacy of the internal control and ensure that the required policies
and standards are developed and practiced. Internal audit should also comment on the steps
taken by the management to rectify the weaknesses pointed out by them in their previous
reports for reducing the level of risk.
Sanction Letter
All letters addressed to the borrowers sanctioning credit facilities are prepared in duplicate
and signed by two authorized officers of the bank. Among the two authorized officer one is a
manager of the credit team. If the terms and conditions of loan sanction letter are acceptable
to him, the borrower should return the duplicate copy duly signed.
4.2 Corporate Credit

Corporate credit means- a contractual agreement in which a corporate (other than individual,
like partnership concern, co-operative society, club, Non-Government Organization (NGO)
and limited company both public and private) client receives something of value now and
agrees to repay the lender the principle with interest at some later date.
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Objectives of Corporate Credit Team:

The objectives of Corporate Credit Team are as follows:
Managing credit risk
Managing credit risk exposure
Compliance with the rules/guidelines of Bangladesh Bank
Compliance with the rules/policies of BRAC Bank
4.2.1 Credit Risk Management of BRAC Bank Limited

The main duties and responsibilities of this particular department is to give a thorough check
on the client files and decide whether the asking amount of the loan should be cover or not.
By using certain software the work of this department has been made easier as they can do
this whole calculation in a short period of time. For transparency in the operations during the
entire credit period the units mentioned below has been set up:
Credit Approval Committee
This department is responsible for the final check where the loan is approved and sent for
disbursement.
Loan Administration Department
This is the department where all the calculations are done and financial transactions are
considered. Loan Administration Department ensures compliance with all legal
formalities, completion of all documentation security of the proposed credit facility and
finally disburses the amount.
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4.2.2 Recovery Unit

This is also one of the most important departments with CRM that is responsible for
collecting back the loan once it has been disbursed.
With the help of this unit the bank is successfully giving loans to its clients and very
effectively monitoring their businesses. In case of problem customers Brac Bank has a very
effective Collection Unit which performs its task to recover money from clients by
performing certain process which helps them to still maintain a decent relationship with their
customers. The credit division reports to the Managing Director (MD), while the Loan Admin
reports to the CCO (Chief Credit Officer). The above arrangement has not only ensured
division of duties and accountability but also helps minimize the risk while ensuring the
quality of the credit portfolio. In determining the credit limit, the instructions of Bangladesh
Bank is strictly followed.
4.2.3 Credit Risk Assessment:

Before extending credit facilities bank has to be satisfied that the applicant qualifies the
following five essentials:
Character- Intention to pay the loan
Capacity- Borrowers competence in the field of employ to fund profitability and

ability to generate income
Capital- Financial strength to cover a risk
Conditions- It is general business condition
Collateral- Implies additional securities
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Credit Risk Grading:

Credit Risk Grading system is a dynamic process and technique are followed in different
banks for measuring credit risk. Eight grading of CRG:
1.
Superior
2.
Good
3.
Acceptable
4.
Marginal / Watch List
5.
Special Mention Account
6.
Substandard
7.
Doubtful
8.
Bad & Loss
4.2.4 The Process Flow of Files that Comes to CRM
Approve: When all the documents found ok and income expense is reasonable, all the
information found good as per PPG, usually a file is approved. Approved file sent to Retail
Banking Operations department.
Query: This is the 2nd option of taking decision regarding any file. It means that the
submitted file has any lacking in its document and information. It follows that the files send
back to the Branches or Sales Team for fill up the lacking. Branches/Sales teams re-submit
the files after fulfillment of the information.
Decline: Credit analyst has to proof his decision by clarifying the reason i.e. why the
applicant is not eligible to get a loan. A decline may be sent back after the approval given by
Head of Credit (HOC). Files may be declined for the followings reasons:
does not comply with PPG
any fake information submitted (Businessmen for Salary loan etc).
Fake Bank Statement
Income expense mismatch
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Customer Profile
Company Profile
Fake Salary Slip
Black listed organization
If the file previously declined
Any 3rd party information about the person or his organization.
Current loan performance of other employee of the organization
Negative verification report regarding customer, organization or guarantor.
4.2.5 Types of Credit Offered by BRAC Bank

Over Draft
Term Loan
Lease Finance
Loan Against Trust Receipt (LATR)
Revolving Loan
Trade Finance
Letter of Credit (LC) / Letter of Guarantee (LG)
Back to Back LC
4.2.6 Collection
Customers are provided with an offer letter or banking arrangement letter during
disbursement where the total payment mode is described. When a customer fails to fulfill the
agreed terms or misses the required payment, the account then enters to Collections.
Collection Department is responsible for collecting the overdue amount from the delinquent
customers. There are different stages involved in collections after an account enters
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delinquency till regularization of the account by recovering the overdue. The aging of an
account in collections is with reference to the days since missed payment. Basically
collection can be broadly divided into four stages:
Servicing
Locating
Collecting
Cancellation and Write-Off
Servicing: The collector informs the defaulting customer about the status of his/her account
and the balance owing. The customer has to be requested to settle his outstanding as soon as
possible.
Locating: It is followed when the collector is unable to establish contact with the customer. It
involves acquiring information from different sources to establish contact with the customer.
This literally means to document all possible string of events, which could eventually lead to
the customer.
Collecting: The collector attempts to convince the customer by selling the benefits /
consequences so that the customer makes payment of the arrears.
Cancellation and Write-Off: This is a final step where the account is flagged as highly
delinquent and 100% charge off at this point and the facility to be cancelled. Attempts are
made to recover the amount from the customer at one go or in installments. If payment is not
received for more than 12 months after the charge off the account may be written off. This
could be deferred if there is any hope for recovery. However, we are also following the write
off policy of central bank.
4.3 Retail Credit

Retail lending department is the business wing under Retail Banking Division, responsible
for increasing net asset book of retail banking. Products consist of unsecured personal loans,
hypothecated car loan, secured facilities and home loan offered to individual customers.
Acquiring of the businesses is done by retail banking channels which are branch, direct sales,
premium banking and telesales. Target markets are salaried individuals, self employed people
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and businessman who are eligible to be financed as per the banks internal guideline as well
as per the prudential guideline of the central bank. During the year 2008, the bank established
lending relationships with more than 11,000 new customers where the total disbursement
amount was BDT 6,283 million. Home loan being a very new entrant in the retail lending
portfolio, could successfully finance 147 units of home with a volume of BDT 346 million. A
total of 788 units of vehicles were financed with a volume of BDT 844 million. Under cash
secured facility, they financed BDT 2,582 million and under unsecured personal loan they
financed BDT 2,511 million. The portfolio was mixed in a way so that it minimizes the risk
of the portfolio and increases the profitability of the bank. With proper training and selective
market targeting, they were focused to add positive growth to business and develop human
resources, which in the long run will take the retail business miles ahead.
4.4 Credit Card

Consumer or personal credit card is comprised of advances made to individuals to enable
them to meet expenses or to purchase, on a deferred- payment basis, goods or services for
personal consumption. Such credit card may be used not only to obtain consumer goods or
services but to refinance debts which originated when such purchases were made. In this case
they can withdraw a percent of cash of their limit if they want. The special features of the
card are 10 percent cash back facility, 50 days interest free period, free three months
insurance coverage, access to all Visa ATMs and outlets and 24-hour customer service
through phone banking. The interest rate will be 2.5 per cent per month and 30 percent per
year. There are two types of credit card:
Silver Credit Card
Golden Credit Card
Eligibility of getting Credit Card

o Employee.
o Self-employed.
o Professionals.
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o Land lord who has rental agreement copy.
Credit Limit
Credit limit is different for different customer. The limit of Brac Bank credit card is Tk.10000
to Tk.500000. It depends on the average credit transaction (A.C.T) and average monthly
balance (A.M.B) of the customer bank statement. Amount of credit will be allowed keeping
in view the repayment capability of the customer. The amount of credit shall be determined in
such a manner that the minimum installment or payment does not exceed 50% of the
disposable income (take home salary/ income) of the customer. The minimum installment
size will not exceed one third of the take home salary for officers only so as to enable the
customer to repay the loan easily. Minimum payment size also depends on the limit of the
credit card.
4.4 Agro Processing & Women Enterprise Re-financing

A special refinance scheme of Tk. 5 billion was launched in 2009 to provide agriculture loan
at a lower interest rate with flexible conditions and without any collateral to the landless,
marginal and sharecroppers deprived of loan facilities of the country. BRAC, the largest NGO
of the country was assigned responsibility to implement this program. From January, 2012 to
June, 2013 BRAC Bank already disbursed about Tk. 76 crore in agro-processing refinancing.
On the other hand, in women enterprise re-financing, BRAC Bank disbursed Tk. 17.5 crore in
2012 and Tk. 6.5 crore in 2013 (up to July).
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CHAPTER # 5: FOREIGN EXCHANGE
5.1 Resident Foreign Currency Account (RFCD)

Resident Foreign Currency Account is an interest bearing foreign currency account. The fund
in this account is kept as deposit. The account can be maintained in USD, GBP, or Euro. The
account does not have ATM or Debit card facility. Any Resident Bangladeshi national, who
has returned from abroad within the last 30 days, can open RFCD Account as per Bangladesh
Bank requirement. This account cannot be opened in joint name. Minimum amount required
to open is USD 1000 or GBP 500 or equivalent currency in Euro. Interest in foreign exchange
shall be payable on balances in such accounts if the deposits are for a term of not less than
one month and the balance is not less than US $ 1000 or GBP 500 or its equivalent.
5.2 Non-Resident Foreign Currency Account (NFCD)

Non-Resident Foreign Currency Deposit (NFCD) Account is an interest bearing foreign
currency account. The accounts are kept in the nature of Term Deposits. The account can be
maintained in USD, GBP, or Euro. The account does not have ATM or Debit card facility.
Bangladeshi nationals staying in another country and earning foreign currencies or after their
return to Bangladesh within last six months can open NFCD Account. Minimum amount
required to open is USD 1000 or GBP 500 or equivalent currency in Euro. In cases of Foreign
Nationals and Organizations, minimum amount of term deposit should be USD 25,000 or its
equivalent in GBP, or Euro. The accounts are in the nature of term deposits maturing after
one month, three months, six months and one year. In case of premature repayments, the
interest amount will be forfeited. Interest on deposit of NFCD account is exempted from the
tax payable under the Income Tax.
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5.3 Foreign Remittance

Remittance Service is one of the core business areas of BRAC Bank Limited. The bank has
introduced a highly secured, innovative and quality remittance service based on advanced
technology. Through this service any one can send money to his/her relatives from abroad
even to the remotest area of the country within maximum 72 hours. At present BRAC Bank
Limited is considered one of the top most leading Banks in serving non-resident
Bangladeshis. No other banks in Bangladesh have offered such a wide range of products and
quality service to the NRB segment so far. These wide ranges of product and services are
backed by a very dynamic IT security and business support team of BRAC Bank Limited.
Remittance Receiving Methods of BRAC Bank Limited

There are three ways BRAC Bank Limited receives inward remittances from abroad:
Exchange Houses
Western Union &
SWIFT
5.3.1 Remittance Through Exchange Houses

Currently BRAC Bank has remittance arrangement with around 32 Exchange Houses located
mainly in USA, UK, Canada, Italy, Malaysia and almost all major countries of Middle East.
Most of the exchange houses send the transactions through Gmail. Some other exchange
houses upload the transactions in their web server and Brac Bank gets them from their web
pages. Most of the exchange houses send a bunch of transactions with a test key which will
be exactly matched in the system of BRAC Bank. Then the bank will become sure that this
set of transaction is specified for it.
Process Flow of Remittance through Exchange Houses

Remitters are to come to the Exchange company/nearest bank, which has an accord with the
BRAC Bank for remittance purposes to send money to Bangladesh. Then Exchange company
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in turn sends Tested payment instructions to BRAC Bank Head Office through E-mail.
Exchange Companies place cover funds in NOSTRO account, which is then encashed to
BDT and placed to their accounts with BRAC Bank. After getting Tested payment
instructions from Exchange Company or Bank the remittance department started coordinate
all the activities related disburse all these money. Remittance department verifies the message
by decoding the test number and be sure that sufficient fund is available in their account.
Execution: Execution team plays an important role in NRB services. Execution team works
as a shifting duty. Execution team Download of the payment instructions then they matching
the Test number. If the test numbers are matching then they execute the transaction. Now they
Segregate and sorting of payment mode and location. They use the Eldorado to remove the
duplication.
Download of the payment instructions: The executive team receives the payment
instructions from Exchange House through email. Few Exchange House who have web-based
instruction, upload the instruction at their web site.
Test matching: There some prefix number used for security. Test matching is must to ensure
security of the payment instructions. If Test Number differs, we do not execute the instruction
and send the information to Exchange House.
Segregation and sorting of payment mode and location: Segregation is one of the most
crucial parts of the payment services. The success of the transactions depends on successful
segregation. The segregation part involves with defining the area of the payment. There are
many things, which the executive teams need to consider during segregation.
Area of the Beneficiary or Beneficiary Bank.
Bank of the Beneficiary (TT arrangement)
BRAC outlet office location.
Branch location.
Exchange House instruction (Pay Cash or Bank Transfer) etc.
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They always choose the best option for the payment considering time of payment and cost.
There are different modes for payment instructions:
Pay order
TT instruction to local banks.
Direct Credit to BRAC bank account.
Pay Cash from Branch or BRAC Outlet etc.
Database (Eldorado entry) of the payment instruction: Eldorado entry of the payment
instruction is important for payment services. Exchange Houses are sending payment
instruction in different formats. Eldorado helps to keep them in a common platform. This
database software helps to:
Avoided duplication.
Permanent record of the instructions.
SRS instructions of the Bank transaction instruction.
Auto Pay order printing
Make common format of the different Exchange Houses instruction.
PSI (Payment Service Investigation): The main objective of Payment service investigation
is to identify the error and problem regarding payments. It also involves with the monitoring
of payment. They basically make query through phone call. There are different kind of error
can occur, like:
Error can occur from Exchange House side.
Error can occur from execution end.
Error can occur from delivering payment instruction.
Error can occur from Beneficiary Bank side. etc
Function of Exchange House Query Team:

Handling queries of respective Exchange Houses
Timely and professionally handling of client queries and resolve critical queries of
different locations
Effective follow up of all queries and ensure proper feedback to Exchange Houses
Effective correspondence with Exchange Houses
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Amendment and Cancellation/Call back requests fund from different locations as per
instruction by Exchange Houses
Take necessary steps to speed up the outstanding payments (with Corresponding
Banks and BRAC BDP)

Ensure proper record/documents keeping
Maintain Exchange House queries in Excel Sheet
Ensure day-end report to Supervisor/Manager
5.3.2 Remittance Through Western Union

In Bangladesh Western Union is operating for about last 14 years and BRAC Bank is the
Authorized Agent of Western Union since March 2004. Currently 16 private banks are
providing the service as agent of Western Union Money Transfer, of which BRAC Bank
holds the first position. Not only that, in 2006, Gulshan Branch has become a member of
Club 500 of Western Union, which is the club of top 500 WU locations throughout the
world. Fund can be remitted from any country of the world through Western Union.
Beneficiary can get the money in either of the following ways:
If the beneficiary is within BRAC bank network, he/she can collect fund in cash from
our branch showing required documents.
If the beneficiary is in remote area where we dont have branch network, beneficiary
can collect fund in cash from nearest BRAC BDP locations showing required
documents.
Required Documents
To receive money through Western Union, the beneficiary of the remittance needs to bring
MTC Number (Money Transfer Control Number) and a Photo ID (Passport, Driving License,
Voter ID, Employee ID, and Student ID). Also Beneficiary has to fill up TRM (To Receive
Money)
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5.3.3 Remittance Through SWIFT

SWIFT stands for (Society for World Wide Inter-bank Financial Transaction). This is the
most preferred mode of money transfer between financial institutions by sending messages
via a dedicated and encrypted computer network. It provides a standard format for
transmitting payments, stock transactions, letters of credit and other financial messages to
more than 7,500 member banks, broker-dealers and investment organizations around the
world.
Founded
in
1973
as
the
Society
for
Worldwide
Interbank
Financial
Telecommunication, millions of transactions worth several trillions of dollars are sent each
day with an average transit time of 20 seconds. Working like a bank routing number, a
SWIFT code is widely used to transfer funds between banks. The Society for Worldwide
Interbank Financial Telecommunication ("SWIFT") runs a worldwide network by which
messages concerning financial transactions are exchanged among banks and other financial
institutions. As of November 2009 SWIFT linked over 7.800 financial institutions in 202
countries and estimates that it carries payment messages averaging more than six trillion US
dollars per day. SWIFT is a cooperative society under Belgian law, owned by its member
financial institutions with offices around the world. SWIFT's headquarters are located in La
Hulpe near Brussels. It was founded in Brussels in 1973, supported by 239 banks in 15
countries. It started to establish a common language for financial transactions and a shared
data processing system and worldwide communications network. Fundamental operating
procedures, rules for liability etc., were established in 1975 and the first message was sent in
1977. SWIFT has operations centers located in Culpeper, Virginia in the United States, and
also the Netherlands.
5.4 Remittance Disbursement Methods of BRAC Bank

Limited
The payment modes that are used by BRAC Bank Limited to disburse the remittances are:
Pay Cash: This is an instruction to BRAC Bank branches to make cash payments to clients.
If the beneficiary does not have any account with BRAC Bank or other Bank, cash payment
is made from BBL branches from different location.
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BRAC BDP Transfer: If the instructions are to pay cash to a person at a village without a
branch or BRAC Bank, the money is transmitted though BRAC BDP. After receiving the
instruction and money from the money is exchange agency, BRAC Bank sands an instruction
to BDP for paying to the beneficiary.
Direct Credit: When the beneficiary has any account with BRAC bank, we just credit the
fund directly to his account. This is the easiest and quickest way to get remittance from
abroad.
Pay Order: If the beneficiary does not have account with BRAC bank but with other bank
under clearing zone of Bangladesh Bank, a Pay Order is issued favoring the beneficiary.
Demand Draft (DD): We have direct DD (Demand Draft) arrangements with Sonali Bank,
B.B. Avenue Branch, Dhaka. When the beneficiary A/C is in Sonali Banks branch with
which Brac Bank has DD arrangement, then it can be used.
Telegraphic Transfer: If the beneficiary bank is out of Dhaka and BRAC bank network
(remote area) & has telephone facility, we execute the transaction through other banks TT.
Accounts are credited within 24 hours. It is also the fastest non-cash method of payment.
Mail Transfers: If beneficiary bank is out of Dhaka (remote area) & does not have
Telephone facility, we execute the transaction through other bank Mail Transfer (MT).
Advice & Pay: When BBL doesnt have correspondence with Beneficiary bank and there is
no BDP also, then we need to issue an Advice & Pay.
5.5 Import Section

Import trade in Bangladesh is controlled under the Import and Export control Act 1950.
Authorized Dealer banks will import the goods into Bangladesh following the import policy,
public notice, F.E. circular and other instructions from competent authorities from time to
time. The major import items financed by Brac Bank are capital machinery, Hot Roll Steel,
electronic equipment, rice, wheat, seeds, palm oil, cement clinkers, dyes, chemicals, raw
cotton, garments accessories, fabrics, cotton etc. To import, a person should be competent to
be an importer. According to Import and Export (Control) Act, 1950, the officer of Chief
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Controller of Import and Export provides the registration (IRC) to the importer. After
obtaining this, the person has to secure a letter of credit authorization (LCA) from
Bangladesh Bank. And then a person becomes a qualified importer. He requests or instructs
the opening bank to open an L/C.
5.5.1 Import Procedures

Registration with CCI&E: For engaging in international trade, every trader must be first
registered with the Chief Controller of Import and Export. By paying specified registration
fees and submitting necessary papers to the CCI&E. the trader will get IRC (Import
Registration Certificate). After obtaining IRC, the person is eligible to import.
Purchase Contract between importers and exporter:
o Now the importer has to contact with the seller outside the country to obtain the
Performa invoice/indent, which describes goods.
o Indent is got through indenters a local agent of the sellers.
o After the importer accept the preformed invoice, he makes a purchase contract with
the exporter declaring the terms and conditions of the import.
o Import procedure differs with different means of payment. In most cases import
payment is made by the documentary letter of credit (L/C) in our country.
Letter of credit: A Letter of credit is a letter issued by a bank (known as the opening or the
issuing bank) at the instance of its customer (known as the opener) addressed to a person
(known as beneficiary) undertaking that the bills drawn by the beneficiary will be duly
honored by it (opening bank) provided certain conditions mentioned in the letter gave been
complied with. L/C can be classified according to source of fund:
Back to Back L/C: It is an Arrangement in which one irrevocable letter of credit
serves as the collateral for another. The advising bank of the first letter of credit
becomes the issuing bank of the second letter of credit.
Cash L/C: Where payment of import bills under L/C is being made from (1) Foreign
Currency reserve in Bangladesh Bank or (2) F.C. account with authorized Dealer, the
L/C is called Cash L/C.
Documents used in LC operation:
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Bill of Exchange
Bill of Lading
Commercial of invoice
Certificate of origin
Inspection certificate
Packing list
Insurance document
Pro Forma Invoice (PI)/Indent
5.5.2 Import Financing

Payment against Document (PAD): Brac Bank starts PAD procedure after getting all
documents from the exporter of importer as evidence of exporting goods. Documents
required for PAD is mentioned below:
Original (Non-negotiable) bill of Leading.
Commercial Invoice.
Certificate of Insurance.
Certificate of Origin.
Bill of exchange.
Pre-shipment Inspection Certificate.
Packing List.
Clean Report of Findings (CRF).
Loan against Trust Receipt (LTR): Under this LTR, Loan is allowed only to first class
importers. Here only on the basis of trust without paying anything or a partial amount, the
importer takes the documents. Then importer is allowed 60-90 days time to make payment.
Loan against Imported Merchandise (LIM): The imported goods come to the port the
party may fall into financial crisis and requests the bank to clear the goods from the port
making payment to the exporter. In this case the party later may take the goods partly or fully
from Brac Bank by making required payment (if he/she takes the goods time-to-time payment
will be adjusted simultaneously).
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5.6 Export Section

Export policies formulated by the Ministry of Commerce, which provide the overall guideline
and incentives for promotion of exports in Bangladesh. Export policies also set out
commodity-wise annual target. It has been decided to formulate these policies to cover a fiveyear period to make them contemporaneous with the five-year plans and to provide the policy
regime.
5.6.1 Export Procedures

Registration of Exporters: For obtaining ERC, intending Bangladeshi exporters are required
to apply to the Chief Controller of Import and Export. By paying specified registration fees
and submitting necessary papers to the CCI&E. the trader will get ERC (Export Registration
Certificate). After obtaining IRC, the person is eligible to export.
Securing the Order: After getting ERC certificate the exporter may proceed to secure the
export order. He can do this by contacting the buyers directly or through agent.
Signing the Contract: After communicating buyer, exporter has to get contracted (writing or
oral) for exporting exportable items from Bangladesh detailing commodity, quantity, price,
shipment, insurance and marks, inspection and arbitration etc.
Receiving Letter of Credit: After getting contract for sale, exporter should ask the buyer for
Letter of Credit (L/C) clearly stating terms and conditions of export and payment. The
following are the main points to be looked into for receiving/ collecting export proceeds by
means of Documentary Credit:
The terms of the L/C are in conformity with those of the contract;
The L/C is an irrevocable one, preferably confirmed by the advising bank;
The L/C allows sufficient time for shipment and negotiation.
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.
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Shipment of goods: Then the exporter should take the preparation for export arrangement for
delivery of goods as per L/C and incomers, prepare and submit shipping documents for
Payment/ Acceptance/ Negotiation in due time.
Documents submission: In this step exporter who confined with BRAC Bank will prepare export
related documents and submit those documents for negotiation. According to those documents BRAC
Bank collects proceeds from the former issuing banks.
5.6.2 Export Financing

Financing exports constitutes an important part of a banks activities. Exporters require
financial services at four different stages of their export operation. During each of these
phases BRAC Bank provides different types of financial assistance depending on the nature
of the export contract are as follows:
Pre-shipment credit
Post-shipment credit
Pre-shipment credit
Pre-shipment credit, as the name suggests, is given to finance the activities of an exporter
prior to the actual shipment of the goods for export. BRAC Bank provides different type of
pre-shipment credit to its worthy customers for various purposes, such as cost of production
or purchase, packing, internal transport cost, export duty or tax etc. An exporter can obtain
credit facilities against lien on the irrevocable, confirmed and unrestricted export letter of
credit in form of the followings from:
Export cash credit (Hypothecation)
Export cash credit (Pledge)
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Export cash credit against trust receipt.
Packing credit.
Export Cash Credit (Pledge): BRAC Bank provides such credit facility to exporter by
pledge of exportable goods or raw materials. Here pledged goods are kept in banks control
and failure of the exporter to honor his commitment, BRAC Bank can sell the pledged
merchandise for recovery the advance.
Export Cash Credit against Trust Receipt: In this case, BRAC Bank provides credit limit
is sanctioned against trust receipt (TR). Its also unlike pledge facility, only difference is that
the exportable goods remain in the custody of the exporter. This facility is allowed by the
bank only to the first class party and collateral security is generally obtained in this case.
Packing Credit: Packing Credit is essentially a short-term advance granted by BRAC Bank
to an exporter for assisting him to buy, process, manufacture, and pack and ships the goods.
The highest limit of providing PC to a first class exporter is 10% of total export value. The
following charge documents are obtained and duly stamped prior to disbursement:
Demand Promissory Note
Letter of Arrangement
Letter of Lien of Packing Credit (On special adhesive stamp)
Letter of Disbursement
Packing Credit Letter
Post Shipment Credit

This type of credit refers to the credit facilities extended to the exporters by the banks after
shipment of the goods against export documents. BRAC Bank provides following post
shipment credit to the exporters through:
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Foreign Documentary Bill Purchase (FDBP)
Advances against Export Bills surrendered for collection
Foreign Documentary Bill Purchase (FDBP): Most of the client submits the bill of export
to bank for collection and payment of the Back To Back L/C. In that case, BRAC Bank
purchases the bill and collects the money from the exporter. The bank subtracts the amount of
bill for PC and BTB payment and gives the rest amount to the client in cash or by crediting
his account or by the pay order.
Advances against Export Bills surrendered for collection: BRAC Bank also accepts bills
for collection of proceeds when they are not drawn under an L/C or when the documents,
even though drawn against an L/C contain some discrepancies. The bank generally negotiates
bills drawn under L/C, without any discrepancy in the documents, and the exporter gets the
money from the bank immediately. However, if the bill is not eligible for negotiation, the
exporter may obtain advance from the bank against the security of export bill. In addition to
the export bill the bank generally asks for collateral security like a guarantee by a third party
and equitable/registered mortgage of property.
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CHAPTER # 6: FINDINGS & RECOMMENDATION

6.1 SWOT Analysis of BRAC Bank:
Strengths:
Unique and sustainable business model targeting SME & rural sector
Wide distribution network comprising 155 branches, 400 SME unit offices, 320
ATMs and 675 Remittance Delivery Points
Dedicated and energetic human resources of about 8,000.
Real time banking with state of the art technology.
Wide range of products and services for both individuals and enterprises
Backward and forward support from parent (BRAC) and sister concerns
Strong Brand image
Weaknesses:
Less focus on main stream corporate banking
High loan provisioning (as a legacy of low quality loan disbursement)
High staffing cost compared to other banks of same size
Distribution channels is not offering full pledged banking
Opportunities:
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E-commerce and E-banking

Entering into foreign market
Bundle offer of insurance with banking products
Network business of alternate channels with other banks
Selling of banking products through BRAC/bKash offices
Threats:
Increasing & innovative fraud & forgery
Commencement of newly entrant banks
Political & economic instability
Low investment opportunities
6.2 CSR & Ethical Practices by BRAC Bank:
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To expand and carryout social activities in a focused way, BRAC Bank has launched a CSR
Desk with a dedicated team. The desk is initiated in line with the guidance of Bangladesh
Bank, which helps the bank to put focus on different CSR activities and ensure transparency.
BRAC Bank Limited follows the 3Ps (People, Planet and Profit) philosophy in its operation.
Besides core business, the bank carries a strong emphasis on Corporate Social Responsibility
initiatives that support the people and protect the planet. BRAC Bank prioritizes on
sustainable development approach rather than short term CSR programs. Currently, BRAC
Banks CSR program focuses on Environment, Education, Health, Young leadership, Culture
& heritage and Community development.
6.3 Recommendations:
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With our little experience in the bank with vast and complex banking system, it is very
difficult for us to recommend. However on the basis of our observation we would like to
recommend the following points:
Though the performance of general customer services is good, but all the employees
are not well trained (who are on contract basis). The department needs to recruit
expert human resources to provide good customer service, which will bring
effectiveness of the banks operation.
The employees are given deposit target, which creates extra pressure to them for that
reason they cannot freely provide customer service. They had to spend most of their
time to fill up their target. If the bank can reduce the pressure then they could be able
to provide good service.
In BRAC Bank, minimum balance in savings account is Tk. 50,000/- for getting
interest which seems to quite high compare to other banks. This criterion should be
changed for encouraging the small depositors.
Annual charge for Debit card and credit card is comparatively higher. It would be
minimized.
Though BRAC Bank focuses on SME banking; but in true sense the marginal
customers cannot get enough lending support from the bank. The bank has to take
initiatives in this regard.
CHAPTER # 7: CONCLUSION
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Proper financial system of a country can contribute towards the development of that countrys
economy. In our country Bangladesh, banks have a leading power to its financial system. For
this reason, the banks should have a potential role to make our financial system. In this arena,
private commercial banks are playing a vital role in the development of our economy. In
recent years of banking business, BRAC Bank Limited has shown better performance
comparing to the other banks. It proposes to set standards as the market leader in Bangladesh.
It demonstrates that a locally owned institution can provide efficient, friendly and modern
banking service on a profitable basis. The bank has maintained and achieved strong position
in all key areas covering capital adequacies, asset quality, sound management, impressive
earning and strong financial position.
BRAC Bank has introduced a highly secured, innovative and quality service based on
advanced technology. They have wonderful opportunities in the market to utilize this and
they can easily survive in the industry with full profitability by adopting some current
relevant strategies. The bank promises to fulfill every possible customer needs with high
quality service and satisfaction. To become a market leader in providing banking services,
introduction of sophisticated banking instruments i.e., online banking services, internet
banking, and ATM services requires time. BRAC Bank Limited is maintaining its
competitiveness by leveraging on its online banking software and modern IT infrastructure.
BRAC Bank pioneered lending to small and medium-sized enterprises in Bangladesh, which
represent the bulk of economic activity but go ignored by the bigger lenders. The bank has
contributed to a more inclusive growth model for Bangladesh.
REFERENCES
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Annual Reports of BRAC Bank Ltd.

Various types of publications of BRAC Bank Ltd.
www.bracbank.com
www.google.com
www.bangladesh-bank.org
Page 57

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Brac Bank 2014

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LETTER OF TRANSMITTAL

December 26, 2013

Bangladesh Bank Training Academy, Mirpur#02, Dhaka

The successful accomplishment of this report is the outcome of the

Bangladesh Bank Training Academy, Mirpur#02, Dhaka

This report is prepared on the basis of On Desk Training in Commercial

Bangladesh Bank Training Academy, Mirpur#02, Dhaka

Bangladesh Bank Training Academy, Mirpur#02, Dhaka

Objective of the Report

Methodology of the Report

Limitations of the Report

Chapter 2: Overview of BRAC Bank Limited

Corporate Vision, Mission & Core Values

Subsidiaries of BRAC Bank

Divisions of BRAC Bank

Organogram of BRAC Bank

Strategic Business Units of BRAC Bank

Products & Services of BRAC Bank

Chapter 3: Functions of General Banking Department

Chapter 4: Loans and Advances

Documentation of SME Credit

Credit Risk Management

Credit Risk Assessment

Process Flow to CRM

1.1 Origin of the Report

1.2 Objectives of the Report

To familiarize rules and regulation provided by Bangladesh Bank.

To be familiar with day to day functioning and services offered by a commercial

Bangladesh Bank Training Academy, Mirpur#02, Dhaka

To make a bridge between the theories and practices on banking operations.

1.3 Methodology of the Report

1.4 Limitations of the Report

Bangladesh Bank Training Academy, Mirpur#02, Dhaka

CHAPTER # 2: OVERVIEW OF BRAC BANK LIMITED

2.1 Present Status of BRAC Bank Limited

International Finance Corporation

Sir Fazle Hasan Abed & others

Institutions and General Public

Bangladesh Bank Training Academy, Mirpur#02, Dhaka

2.2 Corporate Vision, Mission and Core Values of BRAC

Bangladesh Bank Training Academy, Mirpur#02, Dhaka

Relentless in pursuit of business innovation and improvement

2.3 Subsidiaries of BRAC Bank Limited

BRAC EPL Stock Brokerage

BRAC SAAJAN Exchange Ltd.

BRAC IT Service Ltd.

2.4 Divisions of BRAC Bank Limited

Treasury & Financial

Cash Management &

2.5 Organogram of BRAC Bank Limited

Bangladesh Bank Training Academy, Mirpur#02, Dhaka

2.6 Strategic Business Units of BRAC Bank Limited

Bangladesh Bank Training Academy, Mirpur#02, Dhaka

2.7 Products and Services Provided by

Bangladesh Bank Training Academy, Mirpur#02, Dhaka

CHAPTER # 3: GENERAL BANKING

Bangladesh Bank Training Academy, Mirpur#02, Dhaka

3.1 Customer Service Section

Account Opening Procedure

Bangladesh Bank Training Academy, Mirpur#02, Dhaka

Obtaining of photographs of the applicant and nominee, photocopy of NID/Photo

Activation of account & issue of cheque book (after 3days)

Issuing cheque book

Bangladesh Bank Training Academy, Mirpur#02, Dhaka