Executive Summary: This report is a combination of three months internship

program in National Bank Limited.

Bank a little word but plays a very significant role in each country for the
economic development. Even it is become impossible now a day to think about a
countrys economical environment excluding banking system. Whatever the
countries are standing poor, less develops, developing or developed but all the
countries should have the banking system. Banking system is the heart of each
countrys economic body. Economic, momentary and fiscal all the policy directly
or indirectly depends on banking system for its better implementation.

National Bank Limited is a banking company in comported in the Peoples

Republic of Bangladesh with limited liability. The task of satisfying the export-
import group, deposit group and borrower group is the first priority here. It aims at
maintaining the high quality of service, has already achieved at the same time
being in a sound financial health. Credit risk and quality risk are well under
control. The management of National Bank has been focusing on these key issues
for ensuring a better base foe their bank to stand on.

The internship report is divided into two parts the organizational part and the
project part. The organizational part includes the company profile, company
background, nature of business, vision mission, goals, objectives, capital structure,
organization and management structure, products and services, human resources,
market and target customers, organizational strategy. The project part consists of
General Banking Activities. In this analysis, I am tried to find out some
recommendation issues that might be an accurate way to overcome the drawbacks
of National Bank Limited. I acknowledge different banking functions and day-to-
day banking operation on my way to complete this internship. In this report I have
explained my best in respect of my real life experience gather from different
department.

Chapter-1

Introduction & Background of the study

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1.1. Background of the study:

Internship program has been included to BBA curriculum for providing talent, up-
to date and smart, efficient executives. Internship means gaining supervised
experience.

Internship program offers an opportunity to know the environment of a

particular organization. By doing this program, I have developed and refined my
theoretical knowledge gained in the classroom. This program provides exciting
experience of planning, culture, behavior of employee and management style of
that organization, which helps me to fill the gap between theoretical and real
practical world.

Theoretical knowledge does not make a person perfect. To implement the academic
knowledge, practical knowledge related to it, is important. A perfect consideration
between theory and practice is important in the context of modern business world.
In order to resolve the dichotomy between theory and practice, the Mohammad
pur KendriyaCollege arranges internship program as a partial completion of BBA
program. This program is necessary for every student to complete his or her
academic degree. Internship program brings students closer to the business theory
and practical and thereby help them to substantiate their knowledge so that they
can prepare themselves to start a successful career.

Under the internship program, every student is assigned to an organization with a

view to acquire practical knowledge. After taking practical knowledge, each
student is required to prepare a report on the selected organization under the
guideline of his/ her assigned teacher.

As a participant in this program, I was place at National Bank Limited,

Mohammadpur branch, for a period of three months.

1.2. Objectives of the Study:

The main objective of the internship program is to formalize me with the real
market situation and help me learn how bookish concepts are used in the real
market. Therefore, from the very beginning of the study I have tried my level best
to conduct my internship with a view to achieve some specific objectives and I
have gone across the various department of the bank to acquire some related
information and functioning procedure regarding those department.

The objectives of the study are mentioned below:

1.To acquire knowledge about the different operations of a bank

2. To know the services those a banks provides for its customers.

3. To go through all the departments of a bank and observe what actually happened
in these departments.

4. To find out how the general banking system of a bank runs.

1.3. Scope of the report:

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This report has been prepared through extensive discussion with bank employees,
clients and officers and on the information gathered from the annual report and
prospectus of National Bank Limited. I have got the great opportunity to have an
in-depth knowledge of the General Banking of NBL.

1.4. Limitations of the Study:

Although I have got the full co-operation from employees, clients officers of NBL
and they also gave me much time to prepare this report properly in the way of my
study, I have faced some difficulties, which made my conduction of the program
little hazardous.

Some of these are mentioned below:

1. It should be certainly mentioned that the time two months is very short to get the
total view of the banking functions.

2. The officers were quite busy with their regular activities. For this reasons it was
also a little problem to collect detail information from them.

3. In some cases, they could not be able to supply me any information for the
reason that they have no printed documents.

4. Office secrecy was one of the most important problems. Disclosing of some
information was restricted.

5. In case of secondary data collection, there was very little secondary

information. There were few support books, reports, journals, etc. moreover, the
branch office had very little of this information. Thats why bulk of it had to be
collected from the head office.
 6. As the officers were very busy with their day-to-day work, they could
provide very little time.

Chapter-2

Literature Review

There are numerous research reports on the different activities and programs of
National Bank Limited. Again, there are more studies on NBLs service expansion
program. The human resource department arranges different research program to
identify its problems and inefficiencies. And by this way it tries to resolve their
problems to provide excellent services to its customers.

Beside that every year a number of students of different universities conduct their
internship program in different branches of National Bank Limited. After the
completion of their internship program they submit a report on their study to the
Senior Vice President of Human Resource Department, Head Office, National
Bank Limited. In their reports they flash out some recent problems and draw some
recommendations about what the management of NBL should do to resolve these
problems.

Like every year a number of students conducted their internship program in NBL.
Among them a student of American International University-Bangladesh,

named Md. Mobarak Hossain, mentioned in his report that the absence of online
banking system in NBL is the main constraint of its success. The top management
should start the online banking system as soon as possible if it wants to reach at the
desired position. The top management has already taken the necessary steps to start
online banking system. It can be expected that the customers of NBL will get the
online banking service from the next year.

Another student of DhakaUniversity named Fahima Bushra students of MBA

Program work on the Foreign Exchange Management of NBL in the last year. In
her report she mentioned that the information technology of NBL is poor and the
management should take necessary steps to improve its information technology.
Because of this inefficiency managers required to do a lot of duplication work.
Now the top managers of NBL try to ensure all types of technological support in
their all branches.

Chapter-3..
Methodology of the study

3.1. Introduction:

The nature of this report is descriptive. So instead of doing any survey, observation
method is used to complete this qualitative research. I have tried to collect all such
information that will reflect the actual situation of the bank for any report. I have
collected various types of primary and secondary data while I was performing my
job. I have collected various data from various sources by face to face interview
with the employees working in different departments of National Bank Limited,
Mohammadpur branch, personal investigation bankers of different branches of
NBL, circulars sent by Head office and maintaining daily diary which contains all
the activities that has been observed in the bank.

3.2. Population:

The report has prepared on general banking practice system of National Bank
Limited. Therefore, for the purpose of the study, all the branches of, National Bank
Limited has been considered as the population of the study.

3.3. Sampling Unit:

Only one branch of National Bank Limited has been taken as the sampling unit for
the study, i.e. Mohammadpur branch.

3.4. Sampling method:

Random sampling method has been used for the purpose of the study.

3.5. Sources of data:

The report is based on both primary and secondary sources of information.

Interviewing the managers and officers of the bank, talking to the customers, the
primary data have been collect. Further more different publications of the bank
annual reports and the bank websites have been used for the purpose of collecting
secondary data.

3.5.1. Primary sources of data:

1. Practical desk work.

2. Opinions and suggestions of bank officials.

3.5.2. Secondary sources of data:

1. Annual report of NBL.

2. Published booklet of NBL.

3. Various published document.

3.6. Method of data collection:

For the purpose of the study, two methods of data collection have based:

a) Observation method.

b) Interview method.

3.7. Analytical tools and software:

To make the report more understandable and give a nice look, different analytical
tools and software, have been used to prepare the report.A number of flowchart,
graph, table

and different computer software are used.

Chapter-4.

Organizational Profile

4.1. Historical Background:

National bank Ltd is the first and major private sector commercial bank in
Bangladesh fully owned by the Bangladeshi Entrepreneurs. The Bank started its
operation from 23rd March 1983. As a result of the collective effects of the some
eminent bankers, of failure in playing due to role in mobilizing small savings of the
teeming millions and providing improved clients services to them in our country,
the Government gave right decision to allow establishing banks in private sector.
National Bank Limited was born as the first hundred percent Bangladeshi owned
Bank in the private sector. From the very inception it is the firm determination of
National Bank Limited to play a vital role in the national
economy. It is determined to bring bank the long forgotten taste of banking
services and flavors. It wants to serve each one promptly and with a sense of
dedication and dignity.

NBL prudently and boldly faced the challenges of various adverse situations
prevailing in the post independence Bangladesh and has now established it self as
one of the most successful bank of the country. People in all regions can easily
avail of the services of NBL through its 121 branches spread all over the country.
Besides, the bank has been smoothly conducting its overseas activities with utmost
efficiency through its 415 correspondents in 75 countries of the world. NBL has
drawing with 32 overseas exchange houses including the gulf overseas exchange.
In order to provide modern banking services to satisfy the demand of the country
and the people, all branches of the bank have been brought under computer
network. It is able to reach with lighting speed the

hard-earned foreign exchanges of non-resident Bangladeshis to their near and dear

ones at home through the world renewed Western union. The bank maintains round
the clock communication with the external world using the latest information
technology services of SWIFT and REUTERS. In order to give improved and risk
free banking services to the valuable clients, all arrangements for launching line
banking are its final stage. Since the very beginning the bank extended much
emphasis on overseas operation and handled a sizeable quantum of homebound
foreign remittance. The Bank established extensive drawing arrangement network
with Banks and Exchange companies, located in

important countries of the world. Expatriates Bangladeshi wage earners residing in

those countries can now easily remit their hard earned money to the country with
confidence safety and speed.

NBL has been able to create a special image at home and abroad by introducing
different banking products in accordance with the expectations requirements of
people of the country. NBL was the pioneer bank to allow back-to-back LC facility
without any margin to the entrepreneurs of garment industry during the Eighties,
thereby helping the industry thrive to its present position. This has not only
contributed to enrich of the countrys foreign exchange reserves, but also opened
employment opportunities for a large numbers of labor force of the country. As a
pioneer in this sector, NBLs name will remain in golden letters.

NBL has been the pioneer in promoting readymade garment industries and still is
the single largest financier in this sector. In the early 80s when garment industry in
Bangladesh was experiencing a process of trial, the bank foresights the bright
prospect of this sector and extend finance to the deserving and promising
entrepreneurs. It provided them with financial support including market
information and advice .NBL is the first bank to introduce international Master
Card in Bangladesh, which has facilitated the users to get benefit to different
facilities in home and abroad. NBL is the first among private sector banks, which
has set an uncommon precedence of extending fully, supervised collateral
agriculture credit in the brained area of Rajshahi district to help small farmers to
grow.

The wise directions and guidance of a prudent and versatile Board of directors and
concerted efforts of a team of well-qualified and professionally heightened
executives and officials have brought an extraordinary distinctiveness for the bank.
Above two thousand dedicated executives, offers and staffs working day and night
to serve its customers satisfactorily. Through strong commitment base, the bank
has introduced new products like Credit card, E-cash. The popularity of the bank
has gained momentum with quick money transfer arrangement anywhere in world
in association with Western Unions U.S.A

4.2. Nature of Business:

The Bank engaged in all types of commercial Banking services within the
stipulations laid down by Bank Companies Act 1991 and directives as received
from Bangladesh Bank from time to time. The Bank within the stipulations laid
down by Bank Companies Act-1991 and directives as received from Bangladesh
Bank from time to time provides all types of Commercial Banking Services.
Mainly National Bank Limited collects deposit from the people at lower rate and
invests the same to the people again at higher rate. And difference between lower
rate of deposit and higher rate of investment is the earnings of the Bank. National
Bank Limited mainly invests in industrial sector like short term, middle term as
well as long term for import of capital machineries, establish new industry and
working capital assistances with this Bank plays a significant role in Bangladesh
economy.

The function of the Bank mainly three categories:

a) General Banking

b) Credit and investment

c) Foreign Trade (Import, Export & Remittance)

4.3. Principles and values:

The National Bank Limited is committed to five core business principles:

1. Outstanding customer service.

2. Effective and efficient operations.

3. Strong capital and liquidity.

4. Prudent lending policy.

5. Strict expense discipline.

6. Loyal and committed employees who make lasting customer relationships and

international teamwork easier to achieve support the business principles.

7. National Bank Limited also operates according to certain key business values.

8. The highest personal standards of integrity at all levels.

9. Commitment to truth and fair dealing.

10. Hands-on management at all levels.

11. Commitment to quality and competence.

12. A minimum of bureaucracy.

13. Fast decisions and implementation.

14. Putting the teams interests ahead of the individuals.

15. The appropriate delegation of authority with accountability.

16 .Fair and objective employer.

17. A diverse team.

The main vision of the National Bank Limited is to develop the economy of
Bangladesh by profitable investment of public money and build up their
confidence to the private institution. To ensuring highest standard of clientele
services through best operation of latest information, technology, making due
contribution to the national economy and establishing ourselves firmly at home and
abroad as a front ranking bank of the country is our cherished vision.

4.5. Mission:

The missions of the National Bank are as follows: The aim of NBL is to become
one of the leading Banks in Bangladesh by its prudence, fair and quality of
operation.

1. Its effort for expansion of its activities in home and abroad by adding new

dimension to its banking services is contributed unabated.

2. It is also putting highest priority in ensuring transparency, accountability, and

improved clientele services as well as to its commitment to serve the society

through which it wants to get closer and closer to the people.

3. Its goal is to act as a caring companion in uplifting the national economic

standard through continuous gradation and diversification of its clientele services
in line with national and international requirement

4. It intends to meet the needs of its clients and enhance its profitability by
creating corporate culture.

5. It believes in strong capitalization.

6. Its aim is to ensure its competitive advantages by upgrading banking technology

and information system.

7. It maintains high standard of corporate and business Seths. It provides high

quality financial services to strengthen the well being and success of
individual, industries and business communities.

4.6. Objectives:

The objectives of National Bank are mentioned below:

1. Offering quick and improved clientele services through application of modern

information technology.

2. Playing an important role in the national progress by including improved banker

customer relationship.

3. Ensuring highest possible dividend to the respected shareholders by making

best use of their equity.

4. Pushing the policy of nurturing balanced growth of the bank in all sectors.

5. Consolidating our position in the competitive market by introducing innovating

banking products.

6. Ensuring highest professional excellence for our workforce through

enhancement of their work efficiency, discipline and technological knowledge

7. Expanding the banks area of investment by taking part in syndicated large loan
financing.

8. Increasing finances to small and medium enterprise sector including agriculture

and agro based industries, thus making due contribution to the national economy.

9. Upholding the image of the bank at home and abroad by pushing dynamic and
time befitting banking activities.

10. Ensuring maintenance of capital adequacy and highest profit through

successful implementation of the Management Core Risk Program.

4.7. Business Ideology:

Alongside providing the best services to the clienteles, patronizing and taking part
in social development activities as well as making due contribution to growth of
the national economy.

4.8. Organizational Strategy:

As the financial services industry is a very competitive industry, the main strategy
of NBL is the organic growth to build branches and strengthen their distribution
network.
They will continue to invest and expand in Bangladesh as fast as local regulations
allow.

The principle strategies are

People Attract, retain and reward top performers.

Profitable Growth Growing sales and increase the revenues.

Execution Performing with skill and speed.

Credit Quality Maintaining credit quality and understand the role in managing
losses.

Customer Centered Always providing exceptional customer service.

Ownership The performance and results should be owned.

Efficiency Lowering the costs and wise use of resources.

Financial Highlights of National bank Ltd:

(TK in
million)

Sl. No. Particulars 2009 2008

1. Paid-up capital 2,846.54 1,872.72
2. Total capital 9,124.62 6,519.14
3. Total Assets 92,084.79 72,205.50
4. Total Deposits 76,838.64 60,187.89
5. Total Loans and Advances 65,129.29 50,665.07
6. Advance/Deposit Ratio (%) 84.76% 84.18%
7. Profit after Provision &Tax 2,070.47 1,517.43
8. Amount of Classified Loan 38,808.31 2,729.33
9. Income from Investment 1,779.32 938.92
10. Return on Investment 16.57% 12.20%
11. Return on Assets 2.52% 2.36%
4.9. Functions of National bank Ltd:

Some general function of National Bank are given below-

1. To maintain all types of deposit Accounts.

2. To make investment.

3. To conduct of reign exchange business.

4. To conduct other Banking services.

5. To conduct social welfare activities.

6. To work for continues business innovation and improvements.

7. To bui1d up strong-based capita1ization of the country.

8. To ensure the best uses of its creativity, well disciplined, well manages and
perfect growth.

4.10. National Bank Foundation:

Keeping the view the great objective of contributing to expansion of education an

welfare of the society, the National Bank Foundation was set up in 1989. With
financial assistance of the Foundation, The National Bank Public School and
College has been established in Moghbazar Dhaka. There are a total of 820
students studying in the school

section from class 1st to 10th, while there are 120 students at the college section. In
2006, a total of 70 students appeared at the SSC Examination, of which 87% came
out successful. In the college section, a total of 90 students appeared at the HSC
Examination, of which 81% came out successful.

4.11. Training and Training Institute:

Not number, but diversified work efficiency of human resource is the key to
sustained progress of an institution. Thus, not merely recruitment of workforce but
a regular program for imparting time benefiting training to them is all the more
important. With this realization, The National Bank Training Institution (NBssTI)
was established at Shamoli on 24 October 1989, which is fully residential. Beside
faculty members of the Institute, renewed professionals like banker, economists,
teachers and researches are invited to deliver lectures in training programs. NBTI
has a rich library for use by the trainees. NBL has a program to open a Research
and Publication Division soon. During the years under review 225 employees
attained in training programs arranged by the training institute of the bank. In
every batch, 25 trainees can attain in training program with residential facilities.

4.12. Organizational Structure and Department:

Organizational setup of the National bank Limited is consisting of three

organizational domains. Firstly the central top management, which contains Board
of Directors, Managing Director, Additional Managing Director and Deputy
Managing director. The major responsibilities of this group are to take central
decision and transmit it to the second step.
Secondly the executive level management, which contains Executive Vice
Presidents, Senior Vice Presidents, Vice Presidents and Assistant Vice Presidents.
The major responsibilities of this part are to supervise and control division/
department.

Thirdly, the branch operation management, which contains branch manager and
other mid/ lower level management. The major responsibilities of this part are to
the 121 branches of this bank and report to the Head Office from time to time.

4.13. Management structure of National Bank Ltd.:

In 2007 National Bank Limited made commendable progress in all business, like
deposit, credit, fund management, investment, foreign remittance, credit card &
foreign exchange related business. Bank has expended business activities as
holding previously & parallels by diversification its investment to a new product,
as a major financier remarkable portion of total exports of the country.

The management processes are as follows:

4.13 1. Planning:

The strategic planning approach in NBL is top-down. Top management formulates

strategy at the corporate level, and then it is transmitted through the division to the
individual objectives. Board of directors or Executive committee usually takes the
decision. In this process lower level manager are detached in making process, even
brainstorming of lower level manager is absent in decision-making and planning
process.
4.13.2. Organizing:

Organizing of the National Bank Limited is based on Departmentalization. The

organization is divided into twelve departments headed by Executive vice
President or Senior Vice President. In the National Bank Limited the whole
operation is centralized and authority is delegated by written guidelines. These
guidelines are:

1. Operational manual approved by Head Office, where each aspect or banking

operation is elaborately defined.

2. Advance manual including advances limit for different management level.

3. Bad and doubtful recovery manual.

4. Code of conduct.

5. Foreign banking guidelines.

6. Central bank directives.

7. Different management position holders in departments and branches practice

their authorized power in different cases with administrative loophole.

4.13.3. Staffing:

Entry-level recruitment process of the National Bank Limited is conducted in three

ways.

One way is recruitment of probationary officer. Each probationary officer has one-
year probation period. After completion of probation period the officer joins as
officer grade III (b). The career path of probationary officer is headed toward
different management positions. Second way of recruitment is to recruit non-
probationary officer who joins as a assistant officer. The career path of an assistant
officer is lengthier than probationary officer. The third way of recruitment is
recruitment of staff and sub-staff such as typist, Messenger, driver, guard,
attendant, cleaner and other lower level positions. Promotion

policy of NBLis basically based on seniority basis. Sometimes, employees are

promoted to the higher position for their outstanding perfoffi1ance. However, it is
found that the average length of a position held by an employee is around five
years.

4.13.4. Controlling:

The bank has strict control over its all-organizational activities. The Bangladesh
Bank directives indicate some control measures. Audits and inspection are
conducted by different parties to check whether the bank implement these control
system properly or not. The central bank conducts credit inspection by a team. The
National Bank Limited has audit and inspection department to take controlling
measures in internal operations.

Audit and inspection team send to the branches now and then and is responsible for
preparing report that will be submitted to the chief Administration to take
necessary actions.

4.14. Products and services:

Products and services of NBL

Consumer Credit Scheme

Special Deposit Scheme

Monthly Savings Scheme

Credit Card

NBL ATM Service

Western Union Money Transfer

Saving Insurance Scheme

NBL Saving Scheme

National Bank Deposit Scheme

4.14.1. Consumer Credit Scheme

Buying home appliances? Get them through our Consumer Credit Scheme.
National Banks Consumer Credit Scheme gives you a great opportunity to buy

household and office items on easy installments. This scheme gives you the
advantage of part payment to cope with the high price tags of many necessary
home and office appliances.

Television, Refrigerator, VCR, Personal Computer, Photocopier, Washing

Machine, Furniture, Microwave Oven, Car, and a number of other expensive items
are now within your buying range. With this scheme NBL makes better living
possible for people living on fixed income. Customers can buy those home and
office equipments without over taxing their budget.

4.14.2. Special Deposit Scheme

Add to your monthly income, add to your solvency.

For most of the people on fixed income the opportunity to supplement their
monthly earning is a golden one. And NBL Special Deposit Scheme gives a
customer just that.

Under this scheme, customers can deposit money for a term of 5 years. The
deposited money is fully refundable at the expiry of the term. At the same time,
during the term period they can enjoy a monthly profit corresponding to their
deposited amount. As for instance, under this scheme a deposit of Tk.1,10,000 /-
gives a monthly income of Tk.1000 /-.

Table-3: Special deposit scheme of NBL

Deposited Amount Monthly Benefit

Tk. 1,10,000/- Tk. 1,000/-

Tk. 1,65,000/- Tk. 1,500/-

Tk. 2,20,000/- Tk. 2,000/-

4.14.3. Monthly Savings Scheme

See your small savings grow with NBL.

This scheme is specially designed for the benefit of the limited income group
members.
This helps to accrue small monthly savings into a significant sum at the end of the
term. So, after the expiry of the term period the depositor will have a size able
amount to relish on.

Monthly

Installment

Return after 3

Years 9.00%

Return after 5

Years 9.25%

Return after 8

Years 9.50%

500/- 20,627/- 37,896/- 70,849/-

1000/- 41,255/- 75,791/- 1,41,697/-

2000/- 82,510/- 1,51,583/- 2,83,394/-

3000/- 1,23,765/- 2,27,374/- 4,25,091/-

4000/- 1,65,020/- 3,03,166/- 5,66,788/-

5000/- 2,06,274/- 3,78,957/- 7,08,485/-

10000/- 4,12,549/- 7,57,914/- 14,16,970/-.

4.14.4 Credit Card

Safe, Instant and Universal Money.

Through its Credit Card. National Bank Limited has not only initiated a new
scheme but also brought a new life style concept in Bangladesh. Now the dangers
and the worries of carrying cash money are memories of the past.
Credit Card comes in both local and international forms, giving the client power to
buy all over the World. Now enjoy the conveniences and advantages of Credit Card
as you step into the new millennium.

4.14.5. NBL ATM Servicse

NBL ATM card your access to prompt cash.

National Bank Limited has introduced ATM service to its Customers. The card will
enable to save our valued customers from any kind of predicament in emergency
situation and time consuming formalities. NBL ATM Card will give our
distinguished Clients the opportunity to withdraw cash at any time, even in
holidays, 24 hours a day, 7 days a week.

4.14.6. Western Union Money Transfer

Money transfer from anywhere in the World to Bangladesh in minutes.

Joining with the worlds largest money transfer service Western Union, NBL has

introduced Bangladesh to the faster track of money remittance. Now money

transfer between Bangladesh and any other part of the globe is safer and faster than
ever before.

This simple transfer system, being on line eliminates the complex process and
makes it easy and convenient for both the sender and the receiver. Through NBL
Western Union Money Transfer Service, your money will reach its destination
within a few minutes.

For any further information, please contact:

National Bank Limited

International Division

18, Dilkusha Commercial Area

Dhaka-1000

Bangladesh

Tel: 880-2-955 7045

Fax: 880-2-956 3953

4.14.7. Saving Insurance Scheme

Worried about the future? NBL has just the scheme for you

This is an uncertain World and the threatening silhouettes of future catastrophes are
always looming around. This NBL scheme gives your family protection against
the insecurities of the world. This scheme is the first of its kind in Bangladesh. It
combines the benefits of regular savings and insurance scheme, so, you get the
usual rate of interest on the deposited amount while you enjoy the protection of a
comprehensive insurance coverage. Under this scheme, the beneficiaries will get
equal the deposit in case of natural death of the account holder whereas in the
event of accidental death of the account holder the beneficiaries will receive twice
the deposit. As for example, if a customer picks up Easy Class (Tk.50, 000/-)
he/she will get Tk.50, 000/- for natural death and Tk.1,00,000/- for accidental
death apart from his/her deposited amount and interest.

4.15. Consumer services Expansion Program of National bank Ltd:

Present age is the age of competition. A good number of new private commercial
banks came to banking sector in Bangladesh during the last decade. Foreign banks
(Standard chartered, American Express, HSBC, Citibank N.A, etc) also conduct
banking business in Bangladesh very successfully. These new generation banks
introduced many attractable products for customers. National Bank Ltd. is also
introduced many products to attract customers.

The products introduced during the last five years are as follows:

1. Monthly Savings Scheme.

2. E-Cash/ATM card.

3. Consumer Credit Scheme.

4. SWIFT Services.

5. Power Card.

4.15.1. Monthly Savings Scheme:

It is an attractable savings project for limited income group people. National Bank
Ltd. has got quick response in this project. A depositor can deposit 1000-10000
Taka monthly for 3-8 years.

The return is as follows:

Table -5: Monthly Savings Scheme of NBL

Monthly

Installment

Return after 5

Years @ 9.00%

Return after 8

Years @ 9.25%

Return after 10

Years 9.50%

500/- 20,627/- 37,896/- 70,849/-

1000/- 41,255/- 75,791/- 1, 41,697/-

2000/- 82,510/- 1, 51,583/- 2, 83,394/-

3000/- 1, 23,765/- 2, 27,374/- 4, 25,091/-

4000/- 1, 65,020/- 3, 03,166/- 5, 66,788/-

5000/- 2, 06,274/- 3, 78,957/- 7, 08,485/-

10000/- 4, 12,549/- 7, 57,914/- 14, 16,970/-

4.15.2. E- Cash/ ATM CARD:

ATM service is the dynamic process of electronic technology in modern banking.

National bank Ltd. has elevated services to the highest standard by bringing
Electronic banking (E-Banking) and ATM services at the doorstep of clients. Today
the entire banking system has been undergoing are evolution change in providing
improved services to the clients. One of ATM has made the lifestyle of our clients
much easier and comfortable. The note able characteristics of ATM are:

1. Payment facility for 24 hours a day

2. Arrangement for payment of bills

3. Instant inquiry.

4.15.3. Consumer credit Scheme:

National Banks consumer credit scheme gives a great opportunity to buy house
and office items on easy installments. This scheme gives an advantage of part
payment to cope with high price tags of many necessary home and office
appliances. A consumer is the ultimate user of a good. Thus Consumer credit is
the credit, which directly comes into the use of consumer.

Objectives of Consumer Credit Scheme:

The Objectives of Consumer Credit Scheme of National Bank Ltd. is as follows:

a. To bring the credit facility to wide range of customers.

b. To provide financial assistance to the limited income group people toward

buying utility products.

c. To help the professionals to raise their living standard.

d. To participate in the socio-economic development of the country.

Goods and services under the scheme:

Under the Consumer Credit Scheme NBL grants pecuniary help for the
following goods and services.

a. Private car and station wagon new and reconditioned.

b. Refrigerator and deep fridge.

c. Air cooler, Air condition, Room-heater, Water Purifier.

d. Sewing machine.

e. Photocopier.

f. Generator.

g. Other goods that are not mentioned above but are considered essential.

4.15.4. SWIFT Services:

NBL is one of the first few Bangladesh Banks to obtain membership of SWIFT.
SWIFT is a members owned cooperative which a first and accurate
communication network for financial transaction such as Letter of credit, Fund
Transfer etc. By being a member of SWIFT, the bank has opened up possibilities
for uninterrupted connectivity with over 5700 user institutions in 150 countries all
over the world.

4.15.5. Power Card:

In Bangladesh, NBL has first introduced the power card. The use of power card is
very easy and the cost of transactions is very low. So anybody can use it like cash
to do their daily transaction.

4.16. Market and target customers:

Due to the predecessor Companys involvement financing sector of the country, the
bank inherited its top corporate customers. Moreover the bank is involved in
import trade financing. Bulk importers of consumer durable, food gains industrial
raw materials are its customers. The bank has financed in textile and apparels
sectors. The bank has a trade of choosing customer from diversified groups. The
bank has first class customers in the construction sectors involved in high-rise
building, heavy construction and roads and high way construction.

Chapter-5

General Banking

General banking department is the heart of all banking activities .All other
departments are linked with this department. It also plays a vital role in deposit
mobilization of the branch. National Bank Limited provides different types of
accounts, locker facilities, special types of saving scheme and flexibilities of
remittance under general banking.

This department performs the general function of banking In National Bank Ltd.
For performing the operation of this department a good number of people are
allotted. The general banking department of National Bank (Mohammadpur
Branch) consists of the following section:

1. Dispatch section

2. Accounts opening section

3. Cash Management section

4. Remittance section

5. Deposit section

6. Clearing section

7. Credit Card section

8. Loans & Advances Section

9. Western Union Money Transfer section

10. Accounts section

5.1.: DISPATCH SECTION

Dispatch division operates the function of dispatching the intimation letter to the
client, IBCA, IBDA, and OBC to the other banks for internal transaction with
bank. The officer engaged in the dispatch division maintains two types of register
books to entries for record of these documents particulars.

These two types of register books are:

1. Inward mail registers.

2. Outward mail registers.

5.2. ACCOUNTS OPENING SECTION:

Account opening is the gateway for clients to enter into business with bank. It is
the foundation of banker-customer relationship. This is one of the most important
sections of a branch, because by opening accounts bank mobilizes funds for
investment. Various rules and regulations are maintained and various documents
are taken while opening an account. A customer can open different types of
accounts through this department. Such as:

Account opening procedure:

Step 1. The account should be properly introduced by any one of the following:

An existing Current Account holder of the Bank.

Officials of the Bank not below the rank of an Assistant officer.

A respectable person of the locality well known to the manager/Sub-Manager

of the Branch concerned.

Step 2. Receiving filled up application in banks prescribed form mentioning what

type of account is desired to be opened.

Step 3. The form is filled up by the applicant himself / herself.

Two copies of passport size photographs from individual are taken, in case
of firms photographs of all partners are taken.

Applicants must submit required documents

Application must sign specimen signature sheet and give mandate.

Introducers signature and accounts number verified by legal officer.

Step 4. Authorized Officer accepts the application.

Step 5. Minimum balance is deposited only cash is accepted.

Step 6. Account is opened and a Cheque book and pay-in-slip book is given.
Documents required for opening account:

Individual /Joint Account:

1. Introduction of the account.

2. Tow photographs of the signatories duly attested by the introducer.

3. Identity (copy of passport).

4. Joint Declaration Form (For joint a/c only).

5. Employees Certificate (in case of service holder).

Partnership Account:

1. Introduction of the account.

2. Two photographs of the signatories duly attested by the introducer.

3. Valid copy of Trade License.

4. Rubber stamp.

5. TIN number certificate.

6. Identity (Copy of passport).

7. Permission letter from DC/Magistrate (in case of newspaper)

Limited Company:

1. Introduction of the account.

2. Two photographs of the signatories duly attested by the Introducer.

3. Valid copy of Trade License.

4. Board resolution of opening A/C duly certified by the

Chairman/Managing Director.

5. Certificate of Incorporation.
6. Certificate of Commencement (In case of Public limited company).

7. Certified (joint stock) true copy of the Memorandum and Article of Association
of the Company duly attested by Chairman or Managing Director.

8. List of directors along with designation & specimen signature.

9. Latest certified copy of Form xii (to be certified by register of joint

stock companies) (In case of Directorship change).

10. Rubber Stamp (Seal with designation of each person)

11. Certificate of registration (In case of Insurance Company Obtained from

department of Insurance form the Peoples Republic of BD.)

Club / societies account:

1. Introduction of the account.

2. Two photographs for Opening A/C duly certified by President/Secretary.

3. Board Resolution for Opening A/C duly certified by President/Secretary.

4. List of Existing Managing Committee.

5. Registration (if any).

6. Rubber Stamp.

7. Permission letter from Bureau of N.G.O. (In case of N.G.O. A/C)

5.3. CASH MANAGEMENT SECTIOM:

Cash management section of any bank plays vital role in general banking
department because it deals with the most liquid assets. The proper management of
this section entails overall effectiveness of any bank. NBL has a very equipped
cash section.

This section is responsible for the following function:

1. Receipt of deposit.
2. Making payment to the customers.

3. Management of vault of the branch.

5.3.1. Receipt of deposit

This section receives deposit or funds from the customer and the collection
procedure as follows:

1. At first the amount is counted and if ok then verified the purity of the note paid
if there is any confusion of the teller.

2. If the cash notes are satisfactorily sound then the teller marked in color the
amount in word over the deposit slip.

3. At last the receiving officer/ teller signed the deposit slip and by the sign of the

authorized officer the deposit of fund finished in favor of a customer.

4. In case of received of clearing cheque, the cheque is scrutinized at first whether

the cheque is authenticated as per the NI Act. If satisfied then a crossing is marked
so that this cheque never been enchased over the cash counter

5. Then the amount is kept apparently deposited in the customers account and the
cheque proceeds to the clearinghouse accordingly.

5.3.2. Making payment to the customer

The payment is made to the customer only against a valued authentic cheque. the
teller has to follow the following steps in making such payment:

1. Receiving the cheque from the customer.

2. Examining the cheque. In case of examining the cheque, the teller is predated
then the date is to be sure about the following questions:

i. Date of cheque todays or not; if it is predated then the date is with in 6 months
from today;

ii. Amount is written in word and in figure and both is valued same;

iii. Signature is installed and it is as it is the signature kept in

the bank;

iv. There is sufficient amount in the customers accounts for

making payment.

4. If the teller is satisfied regarding the above questions, then he/she debits the

respective party a/c for making payment.

5. If it is a bearer cheque (a cheque where the bearers name is installed instead of

Self/cash) the signature is also taken for the record.

6. Finally the cash paid seal is marked over the cheque leaf for the collection of
the cheque after making the payment to the customers.

5.3.3. Management of the vault

The cash section also manages the vault of the branch. The manager of cash
section is the in charge of the necessary liquid money in the vault for the payment
of the customer.

In this regard, there is specific guideline from the central bank for the limit of the

amount such as:

1. The bank is required to maintain at least 9% of cash balance with Bangladesh

on its total paid up capital.

2. Limit of cash vault up to Tk.1.5 Crore.

3. Limit of a cash counter up to Tk. 1.25 Crore.

4. Limit of cash in transit up to Tk. 75 lacs.

So the cash department is to maintain a cash limit of Tk. 2 Crore 45 lac as whole.
The excess amount of a branch limit is to be proceeded to the account maintained
with Bangladesh Bank.

5.4. Remittance Section:

Remittance means transferring of fund through different instruments other than
cheque.

Remittance includes both inland and foreign remittance. In this section, only the
local remittance is described.

There are two types of remittance:

1. Inward remittance.

2. Outward remittance.

5.4.1. Inward remittance

It consists of the following:

Pay Order payable.

Demand Draft payable.

Telegraphic Transfer payable.

5.4.2. Outward remittance

The outward remittance includes the following:

Pay Order issue.

Demand Draft issue.

Telegraphic Transfer issue.

Procedures & Accounting treatment of outward remittance:

Specific procedure and accounting journals are made for the transfer and the
settlement of the outward remittance.

Procedures and journals for pay order (PO):

Filling of PO application form Receive Cash/ OK transfer Chaque, from the
client Preparation of PO & signed by two officers Bearing power of attorney No
(PA No) Handover the PO to the client along with the copy of application form

Procedures and journals for TT/DD:

Filling of TT/DD application form,

Receive Cash/ OK transfer Chaque From the client

Preparation of DD & signed by two officers Bearing power of attorney No (PA No)

Handover the DD to the client along With the copy of application form

5.5. Deposit Section

Deposit is the lifeblood of a bank. From the history and origin of the banking
system, deposit collection is the main function of a bank.

5.5.1. Accepting deposits:

The deposits that are accepted by NBL like other banks may be classified into two
types.

These are:

a) Demand Deposits

b) Time Deposits

a) Demand deposits:

These deposits are withdrawn able without notice, e.g. current deposits. National
Bank Limited accepts demand deposits through the opening of,

1. Current account

2. Savings account

3. Call deposits from the fellow bankers

b) Time deposits:
A deposit which is payable at a fixed date or after a period of notice is a time
deposit.

National Bank Limited accepts time deposits through Fixed Deposit Receipt
(FDR), Short Term Deposit (STD) and Bewared Certificate Deposit (BCD) etc.
While accepting these deposits, a contract is done between the bank and the
customer. When the banker opens an account in the name of a customer, a contract
arises between them. This contract will be valid one only when both the parties are
competent to enter into contract.

As account opening initiates the fundamental relationship & since the banker has
to deal with different kinds of persons with different legal status, National Bank
Limited officials remain very much careful about the competency of the customers.

5.6. Clearing Section:

Cheques, Pay Order (P.O), Demand Draft (D.D.) Collection of amount of other
banks on behalf of its customer are a basic function of a Clearing Department.

5.6.1. Clearing:

Clearing is a system by which a bank can collect customers fund from one bank to
another through clearing house.

5.6.2. Clearing House:

Clearing House is a place where the representatives of different banks get together
to receive and deliver cheque with another banks.

5.6.3. Member of clearing House:

National Bank Ltd. is a scheduled Bank. According to the Article 37(2) of

Bangladesh Bank Order, 1972, the banks, which are the member of the
clearinghouse, are called as Scheduled Banks. The scheduled banks clear the
cheque drawn upon one another through the clearinghouse.

5.6.4. Types of Clearing:

There are two types of clearing-

A. Outward clearing.
B. Inward clearing.

(A) Outward Clearing:

When the branches of a bank receive cheque form its customers drawn on the other
banks within the local clearing zone for collection through Clearing House, it is
Outward Clearing.

(B) Inward Clearing:

When the branches of a bank receive cheque drawn on them from other banks in
the Clearing House, it is Inward Clearing.

5.6.5. Types of clearing house:

There are two type of clearing house.

These are:

A) Normal clearing house

B) Same day clearing house

(A) Normal clearing house:

1) 1st house: 1st house normally stands at 10 am to 11 am

2) 2nd house: 2nd house normally stands after 3 p.m. and it is known as return

house.

(B) Same day clearing house:

1) 1st house: 1st house normally stands at 11 a.m. to 12 p.m

2) 2nd house: 2nd house normally after 2 p.m. and it is known as return house.

5.6.6. Who will deposit cheque for Clearing?

Only the regular customers i.e. who have Savings, Current, STD & Loan Account
in the Bank can deposit cheque for collection of fund through clearing house.
Transfer:

1. Precaution at the time of cheque receiving for Clearing, Collection of LBC, and

OBC & Name of the account holder same in the cheque & deposit slip.

2. Amount in The cheque & deposit slip must be same in words & in figure

3. Date in cheque may be on or before (but not more than six months back)
clearing house date.

4. Bank & Branch name of the cheque, its number & date in the Deposit slip.

5. Cheque must be signed.

6. Signature for confirmation of date, amount in words / in figure Cutting &

Mutilation of cheque.

7. Cheque should be crossed (not for bearer cheque).

8. Account number in the deposit slip must be clear.

9. Depositors signature in the deposit slip.

5.6.7. Return house

Return House means 2nd house where the representatives of the Bank meet after 3
p.m. to receive and deliver dishonored cheque, which place in the 1st Clearing
House. Cheque may be dishonored for any one of the following reasons:

1) Insufficient fund.

2) Amount in figure and word differs.

3) Cheque out of date/ post- dated.

4) Payment stopped by the drawer.

5) Payees endorsement irregular/ illegible / required.

6) Drawers signature differs / required.

7) Crossed cheque to be presented through a bank.

8) Other specific reasons not mentioned above.

The dishonor cheque entry in the Return Register & the party is informed about it.
Partys signature required in the return register to deliver the dishonor cheque.
After duration, the return cheque is sent to the partys mailing address with Return
Memo.

Responsibility of the concerned officer for the Clearing Cheque:

1) Crossing of the cheque.

2) (Computer) posting of the cheque.

3) Clearing seal & proper endorsement of the cheque.

4) Separation of cheque from deposit slip.

5) Sorting of cheque 1st bank wise and then on branch wise.

6) Computer print 1st Clearing House computer validation sheet.

7) Examine computer validation sheet with the deposit slip to justify the computer
posting.

8) Copy of computer posting in the floppy disk.

5.6.8. Bills Collection

In modern banking the mechanism has become complex as far as smooth

transaction and safety is concerned. Customer does pay and receive bill from their
counterpart as a result of transaction. Commercial banks duty is to collect bills on
behalf of their customer.

5.6.9. Types of Bills for Collection

a) Outward Bills for Collection (OBC)

b) Inward Bills for Collection (IBC)

(a) What is OBC?

OBC means Outward Bills for Collection. OBC exists with different branches of
different banks outside the local clearinghouse. Normally two types of OBC:

1) OBC with different branches of other banks

2) OBC with different branches of the same bank

Procedure of OBC:

1) Entry in the OBC register.

2) Put OBC number in the cheque.

3) Crossing seal on the left corner of the cheque & payees account will be

credited on realization seal on the back of the cheque with signature of the

concerned officer.

4) Dispatch the OBC cheque with forwarding.

5) Reserve the photocopy of the cheque, carbon copy of the forwarding

and deposit slip of the cheque in the OBC file.

(b) Inward bills for collection (IBC)

When the banks collect bills as an agent of the collecting branch, the sys tem is
known as IBC. In this case the bank will work as an agent of the collection bank.
The branch receives a forwarding letter and the bill.

Procedure of IBC:

1. IBC against OBC: To receive the OBC cheque first we have to give entry in the
IBC Register. The IBC number should put on the forwarding of the OBC with date.

2. Deposit of OBC amount: OBC cheque amount is put into the sundry
deposit sundry Creditors account, prepare debit & credit vouch of it. If the OBC
cheque is honored, send credit advice (IBCA) with signature & advice number of
the concern branch for the OBC amount.

3. If the OBC cheque is dishonored, the concerned branch is informed about it.
4. Again place in the clearing house or send the OBC cheque with Return Memo
to the issuing branch according to their information.

5.7. Credit Card Section:

Carrying of cash is not so safe in todays world. There is always a chance of losing
or hijacking of cash. On the other hand, the desire to purchase any desired item of
one may not be fulfilled for the want of cash at the time of that willingness. To
remove these problems, credit card has been introduced which is very popular to
face the mentioned problems.

5.7.1. Meaning of Credit Card

It is a card (usually plastic) that assures a seller that the person using it has a
satisfactory credit rating and that the issuer will see to it that the seller receives
payment for the merchandise delivered.

NBL is the first local bank, which introduced credit card & MasterCard in
Bangladesh in both local and international market in 1997. MasterCard captured
35% of credit card through the world. However present market analysis reflects
that a large number of people whose average income ranges in above Tk.l0000 are
using the credit card. Credit card division is continuing their all-possible efforts for
the participation in the globalize Master Card Program. The number of users of the
credit cards is increasing day by day.

During the year 2006 the bank has got a profit of Tk.124.25 million from credit
card business. NBL also has got the licenses from international brand Visa Card
and very soon, it will be launched in the country.

5.7.2. NBL & Credit Card

NBL is the first local bank, which introduced credit card & MasterCard in
Bangladesh in both local and international market in 1997. MasterCard captured
35% of credit card through the world. However present market analysis reflects
that a large number of people whose average income ranges in above Tk.l0000 are
using the credit card. Credit card division is continuing their all-possible efforts for
the participation in the globalize MasterCard program. The number of users of the
credit cards is increasing day by day.
During the year 2004 the bank has got a profit of Tk.104.25 million from credit
card business. NBL also has got the licenses from international brand Visa Card
and very soon, it will be launched in the country

5.7.3. Types of Credit Card

National Bank Limited offers mainly two type of credit card according to
the geographical area. These are Local credit card and International credit card.

According to the level of income the local and international credit cards are
divided into two categories viz. Gold card and Silver card. These types of credit
cards are described below:

(a) Local credit card:

Local credit card is valid only in Bangladesh. Out side Bangladesh, the card is
invalid.

Local card are two types. They are Gold local card and Silver local card. The card
limit of gold local card is Tk.50000 to Tk. 100000 and silver local card is below
Tk.50000.

(b) International Credit Card:

International credit card is valid mainly outside Bangladesh. But for the payment
of roaming facilities for Grameen phone, cardholders can use international credit
card in Bangladesh. International credit cards are of two types. These are gold
international credit card and silver international credit card. The card limit of gold
international credit card is $ 2000 to $4000 and silver international credit card
below $2000.

5.7.4. Yearly Charges on credit card

National Bank Limited receive card fee for new card and renew card from the
cardholder.

The rate of card fee for new card and renew card are the same. In case of new card
the bank receives the card fee with the next months bill. The rate of card fee is
given in below:

Yearly charges on credit card

Type of card fee:

5.7.5 Documentation for a credit card

Any person whose monthly income is over 10000 can be a credit card holder of
NBL. The requirements of a card are:
For Local card:

1. The fulfillment of the application form.

2. 2 copies of photographs. (If supplementary card is taken then 2 copies of

photographs of the nominee).

3. TIN certificate.

4. A security. (MSS, SDS or FDR as lien).

5. Charge documents.

For International card:

6. The fulfillment of the application form.

7. 2 copies of photographs. (If supplementary card is taken then 2 copies

photographs of the nominee).

8. TIN certificate.

9. A security. (MSS, SDS or FDR as lien).

5.7.6. Billing of a credit card

National Bank Limited offers the cardholder 15 to 45 days credit facilities. For the
proper billing the bank divided the cardholder into three cycles. These are 0 cycle,
3 cycle and 5cycle. In 0 cycle hill are prepare and send to the cardholder 1st day or
every month and last date of payment is 15th day of the month. In 3cycle bill are
prepare and send to the cardholder 3rd day of every month and last date of
payment is 18th day of the month. In 5cycle bill are prepare and send to the
cardholder 5th day of every month and last date of payment is 20th day of the
month. The cardholder can pay the bill any branch of the National Bank. If any
cardholder fails to pay the bill within the last date then he/she must pay 2%
monthly interest and his/her card stop automatically. But if the cardholder pay

minimum bill (10% of the bill) then he/she must pay the interest on the balancing
amount and can use the card as usual. On the other hand, if the card holder
withdraws any cash amount from the ATM booth (maximum limit is 20% of card
limit) a monthly charge of 2.5% is to be charged from the date of withdraw. In that
case the cardholder will not get the 45 days credit payment facility.

5.8. Loans & Advances Section:

This is the survival unit of the bank. The reason is that until and unless the success
of this section, the survival is a big question. This is the main earning unit of the
bank. Banks accept deposits from the depositors in condition of providing interest
to the depositors in condition of providing interest to them. Now the question is
how bank provides interest to their clients. The simple answer is interest from
advances. The bank provides interest to the borrowers because:

1. To earn interest from borrowers and give depositors the interests get back. The
rest are the profit of the bank.

2. To accelerate economic development.

3. To meet the interest groups.

Credit is a continuous process. Recovery of one credit gives rise to another credit.
In this process of revolving funds, bank earns income in the form of interest. A
bank can invest its fund in many ways. Bank provides loans and advances to
traders, businessmen and industrialists. Moreover, nature of credit may differ in
terms of security requirement, disbursement provision, terms and conditions etc.
Bank often uses loans and advances as an alternative to one another. But,
academically this concept is incorrect. Academically, Advances is the combination
such items where loans is a part only. For this credit section of the banks is known
as advance section.

5.8.1. Types of Advances

It is not possible to discuss all these types of advances in details in this report but
an attempt has been made to analyze the basic difference and characteristics of
these advances all in the following manner:

5.8.1. (A) Overdraft:

Overdrafts are those drawings, which are allowed by the banker in excess of the
balance in account up to a specified amount for definite period. It is given to the
businessmen to increase their business activities. There are two forms of
overdrafts:
1. SOD (Secured Overdraft).

2. Loan General. (LG)

Any deposit in the SOD account is treated as repayment of overdraft. The features
of SOD are:

The interest rate is 14%.

The interest starts from the date of first withdrawal.

Only businessmen can open this and he has to be a current account

holder of the respective branch of NBL.

The security that is kept against the SOD loan are generally FDR, SDS, MSS etc.

5.8.1. (B) Cash Credit (CC):

It is one type of current account. The difference between them is that current
account is intended to be an account with credit balance and the CC is an account
for drawing in advance. Operation of cash credit is same as that of overdraft. The
purpose of cash credit is to meet working capital needs of traders and industrialists.
It is given through the Cash Credit (CC) account.

5.8.1. (C): Inland Bills Purchased (IBP):

Bank purchases two types of Inland Bill. Such as:

Clean Bill and

Documentary Bill.

Clean Bill:

Clean bill are those that requires no payment for documents cheques, Demand
Draft, Telegraphic Transfer, and Mail transfer.

Documentary Bills:
Documentary bills are those that require related documents for payments like Bills
of Exchange, Railway/ Shipment receipt and invoice etc. This bill is often created
in businesses and bank purchases these before their maturity. Thus, purchases of
these bills are one kind of credit to these before their maturity. As bank purchases
these bills on behalf of the business so it is one kind of credit to those businesses.
After maturity, bank presents it to the drawer for encasement.

5.8.1. (D) Employee Loan:

For the betterment of its own employees NBL provides loans. The branch
managers and executives get this facility. Repayment is adjusted from their
monthly salary on an equal monthly installment. 10% of basic salary is contributed
by employee in every month. The staffs can also take loan, which is known as Staff
Loan against Provident Fund (SPF).

The repayment is adjusted from their monthly salary. 10% of basic is also
contributed to the PF by the bank.

5.8.1. (E) Consumer Credit Scheme:

National Banks Consumer Credit Scheme gives a great opportunity to buy

household and office items on easy installments. This scheme gives the advantage
of part payment to cope with the high price tags of many necessary home and
office appliances. To lead a better life NBL provides this credit to consumers to
purchase household items as Television, Refrigerator, Personal Computer,
Furniture, Car etc. The people with fixed

income get this credit. It is a 24 to 48 installment system of 14% interest. The

amount allowed to the borrower is 10000/- to 300000/-.

5.8.2. Creation of charges for securing Loans:

For the safety of the loan, bank requires security from the borrower so that it can
recover the loan by selling security if borrower fails to repay. Creation of charge
means making it available as a cover for an advance. The method of charging
should be legal, perfect and complete. Securities are charges in order to:

1. Protection of interest.

2. Ensuring the recovery of the money lent.

3. Provision against unexpected change.

4. Commitment of the borrower.

A brief description about the securities that is kept against the loans is described
below:

5.8.2. (A) Primary Security

Security deposited the borrower himself to the loan such as FDR, Cash, MSS.

5.8.2. (B) Collateral Security Narrow

1. Sense security deposited by a third party to secure the advances for the
borrower.

2. Wider sense any types of security on which the creditor has a personal right of
action on the debtor in respect of advance common method of charging security
and their nature of security.

5.8.2. (C) Lien

It is the right of the banker to hold the debtors property until the debt is discharged
generally retained by the bank in its own custody or to the hands of the third
party with lien marked. The third party cannot discharge it without the permission
of the bank. In case of need bank needs permission of the court to sell the property.

5.8.2 (D) Assignment

Borrower transfers the right of property or debt to the bank. Life Insurance Policy,
supply bills, book debt of the borrower can be assigned.

3.8.2. (E) Pledge

It is one kind of lien but the bank enjoys more rights on it. In this case, physical
transfer of the goods is must to the bank. Bank can sell the property without the
intervention of the court in case of default on loan.

5.8.2. (F) Mortgage

Mortgage is the transfer of special movable property like land, building, plant
etc. Most common type of mortgage is legal mortgage in which ownership is
transferred to the bank by registration of the mortgage deed.

Another method called equitable mortgage is also used in bank for creation of
charges.

Registration is not required. In both the cases, the mortgaged property is retained in
hand of the property.

5.8.3 Principles of sound lending:

In order to secure a balance between liquidity Profitability, and security, NBL

following principles of sound lending:

5.8.3. (A) Liquidity

While lending, adequate care is taken to ensure the liquidity of the lien item. In this
case, NBL choose such securities, which possess such liquidity.

5.8.3. (B) Safety

National Bank exercises the lending function only it is safe and the risk factor is

adequately mitigated and covered. Safety depends upon the security offered by the
borrower.

5.8.3. (C) Diversity

In order to minimize the risk, National Bank invests its fund in different industries
of different industries situated in different regions of the country.

5.8.3. (D) Yield

From the commercial point of view, National Bank considers sufficient yield of
return while financing a project.

5.8.3 (E) Productive Purpose

National Bank exercises its lending function only on productive purpose.

5.8.3 (F) National or Social Interest

National Bank also considers national aspect of any project while financing. They
take utmost care so that the project cannot be determined to the society as well as
to the nation.

5.8.4. Selection of Borrower:

In lending, the most important step is the selection of the borrower. Due, to the

asymmetric information and moral hazard, banks have to suffer a lot due to the
classified loans and advances, which weakens the financial soundness of the bank.
If the selection of the borrower is correct, that is the borrower is a good character,
capital and capacity or of reliability, resourceful and responsible the bank can
easily get the return from them.

This point of view, NBL follows the following procedures:

5.8.4. (A) Studying past track record

After getting an application for a loan the past record of the applicant is carefully

studied. Generally such studies includes

i. Account balances and past transactions

ii. Credit report from other banks

iii. Information of the industry by studying market feasibility

iv. Financial statements (balance sheet, cash flow statement, and income

statement). If the borrower is a sole proprietor then the single entry accounting

treatment is converted into double entry system.

v. If the amount is more then TK. 10 lac then report from credit information

bureau of Bangladesh Bank is collected.

5.8.4(B) Borrower analysis

Borrower analysis is based on 5-cs (character, capital, capacity, collateral,

creditworthiness) and 3-r (responsibility, reliability and resourcefulness). It follows
that the bank forms a rational judgment about the integrity of the borrower which
should be undoubted.

5.8.4. (C) Credit approval procedure

After receiving the application from the client, National Bank Limited prepares a
Credit Line Proposal (CLP) and forwards the same to the Head Office to place
before Head Office Credit Committee (HOCC) for approval. It includes

1. Request for credit limit of customer.

2. Project profile/ profile of business.

3. Copy of trade license duty attested.

4. Copy of T I N certificate.

5. Certificate copy of Memorandum & Articles of Association, certificate of

incorporation, certificate of commencement of business, Resolution of the

Board, Partnership Deed (where applicable).

6. 3 years balance sheet and profit & loss account.

7. Personal net worth statement of the owner/ directors/partners etc

8. Valuation certificate of the collateral security in banks form with photograph of

the security.

9. CIB enquiry form duly filled in (for proposal of above 10 lac).

10. Credit report from other banks.

11. Stock report duly verified.

12. Indent/ Performa invoice/Quotation.

13. Statement of accounts.

5.8.5. Documentation:

Documentation can be described as the process of technique of obtaining the

relevant documents. In spite of the fact, that banker leads credit to a borrower after
inquiring the character, capital, capacity, collateral, creditworthiness of the
borrower NBL obtains proper documents executed from the borrower, and he must
obtain proper documents executed from the borrower to protect him against willful
defaults. Documentation contains the precise terms of granting loans and thereby
serve as important evidence in the law courts if the circumstances so desire. Charge
documents as required by the different types of advances are mentioned below:

5.8.5(A) Loan:

1. Letter of arrangement.

2. Letter of disbursement.

3. Letter of partnership (firm) or Board of resolution (Limited companies).

4. Letter of pledge.

5. Letter of hypothecation.

6. Letter of lien and ownership.

7. Letter of credit for packing credit.

8. Letter of lien. (in case advance against FDR).

9. Letter of lien and transfer authority.

10. Legal documents for mortgage of property.

11. Copy of sanction letter mentioning detail of terms and condition duly

acknowledge by the borrower.

12. Trust receipt.

13. D P Note.

5.8.5 (B) Overdraft

 1. Letter of partnership.

2. Letter of arrangement.

3. Letter of continuity.

4. Letter of lien.

5. Letter of lien and ownership/share transfer form (in case of advance

against share).

6. Letter of lien and transfer authority.

7. Legal documents for mortgage of property.

8. D P Note.

5.8.5 (C) Cash Credit:

1. Letter of partnership (partnership firm) or Board of resolution (in case of

Limited company).

2. Letter of arrangement.

3. Letter of continuity.

4. Letter of hypothecation. (In case of CC).

5. Legal documents for mortgage of property.

6. Letter of pledge or arrangement of pledge.

7. D P note.

5.8.5(D) Bills Purchased:

1. Letter of partnership (partnership firm) or Board of resolution (in case of

limited

company).
2. Letter of arrangement.

3. Letter of acceptance, where it calls for acceptance by the drawee.

4. Letter of hypothetical of bill.

5.9. Western Union Money Transfer Section:

National bank Ltd. signed an agreement with the Western Union Financial services,
USA in 1993. Millions of people from different parts of the world are sending
money with confidence to their near and dear through the western union has the
most modern technology for remitting money within quiets possible time from any
part of the world through their more than 170000 representatives in 190 countries
and regions has established a unique money transfer system with western union of.
Through an online computer system units can be instantly of the world. 56.17
million dollar was remitted to this bank through this organization during the year
2003.NBL brought a substantial amount of foreign exchanges in to the country
through the western union in 2003, which is 44% higher than that of 2002 The
western union is a globally reputed name in money transfer services and data
exchange forever 150 years. Western union has continued its tradition of
possessing the latest technology and handling wide scale remittances.

Payment of remittance by expatriate Bangladeshis through the western union are

being made at 121 branches of NBL. These branches are connected with the on-
line computer system of the western union.

The special feature of services is as follows:

Fast: Remits money in minutes

Safe: World-class security system

Easy: Over 2, 00,000 agents locations across 200

Countries and territories worldwide

Reliable: Trusted by millions for over 150 years.

5.10. Accounts section:

Accounts Department is called as the nerve Center 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. 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 function is to check the mistakes in passing vouchers or wrong entries or
fraud of forgery. This department is called as Accounts Department. If any
discrepancy arises regarding any transaction this department repot to the concerned
department.

Besides these, the branch has to prepare some internal statements as well as some
statutory statements, which are to be submitted to the Central Bank and the Head
Office.

This department prepares all these statements.

Workings of this department:

Recording the transactions in the cash book.

Recording the transactions in general and subsidiary ledger.

Preparing the daily position of the branch comprising of deposit and cash.

Preparing the daily Statement of Affairs showing all the assets and liability of the
branch as per General Ledger and Subsidiary Ledger separately.

Making payment of all the expenses of the branch.

Recording inters branch fund transfer and providing accounting treatment in this
regard.

Preparing the monthly salary statements for the employees.

Preparing the weekly position for the branch which is sent to the Head Office to

maintain Cash Reserve Requirement (C.R.R)

Preparing the monthly position for the branch which is sent to the Head Office to
maintain Statutory Liquidity Requirement (S.L.R)
Make charges for different types of duties.

Preparing the budget for the branch by fixing the target regarding profit and
deposit so as to take necessary steps to generate and mobilize deposit.

Checking of Transaction List.

Recording of the vouchers in the Voucher Register

Packing of the correct vouchers according to the debit voucher and the credit

voucher.

Chapter-6..

Findings and Analysis

Findings of the Report:

After analyzing the annual report and other papers, the evolution of performance
analysis and on the basis of my study I have got some findings about the National
Bank Limited.

These are mentioned below:

1. NBL is the pioneer of private sector banking business in Bangladesh. . As a

result it has a huge branch operation with 100 branches and 2000 manpower
causing large employment opportunity.

2. The fund management system is very effective. For keeping this system
effective,

3. Necessary changes in credit policy, loan and advance policy, provision for
provision are made continuously.

4. The Officers engaged in loan management is very much aware in choosing right
person to provide loan to ensure its recovery.

5. The top management is more conscious about the liquidity of bank.

6. The strength of the Bank lies on the top management of the company and
the financial soundness of the sponsors, as they are all well reputed personalities
in the Bangladesh. This impressive lay of National Bank Ltd. helps to have a
good image.

7. The top management gives its highest attention in the operation of

fund Management.

8. The customer service is very much impressive than other financial institution.

9. Remittances, both local and foreign are effective manner of customers.

10. Computerization is speeding up the performance of the organization. The

top management recently has to decide to start online banking system. This
decision will motivate the employees who are very effective in computer skills.

11. Top management guidance to its subordinates is very much friendly.

12. Special schemes like consumer credit scheme, monthly saving scheme,
insurance scheme etc. are very popular.

13. The overall working environment of the office is very nice.

14. Lack of professional data entry operators.

15. Not a proper skilled human resource in every department.

16. Inadequate workforce in new branches. One is required to do two or

three departments work.

17. Lack of proper coordination among different departments.

18. In adequate facilities in maintaining the operation of ATM card, Master card,
Visa card etc.

Chapter-7..

SWOT and PEST Analysis Of the organization

7.1. SWOT Analysis of the organization:

Every organization has some strength that helps it to survive, some weakness that
push it backward, some opportunities that helps it to compete and also some threats
that keeps it aware. NBL also has some SWOTs. These are mentioned below.

7.1.1. Strengths of the organization:

NBL is a very competitive organization. It is operated by a very efficient

management group. There is a good employee-employer relationship in its head
office and also its all branches. It has a healthy dislike of is competitors. NBL has
sponsored to the top programs, seminars, writing competition and gained valuable
coverage. In Bangladesh, it has 121 branches to provide services to the people. All
these branches are located in such a place in where customers feel comfortable and
safe to make their transaction. There are 2529 staffs who work for NBL either in
back office or in front office. It has a better financial position than others in the
banking business. It is strong at research and development, as is evidenced by its
evolving and innovative product & service range. NBL has more social awareness
than other banks in Bangladesh right now.

7.1.2. Weakness of the organization:

The organization does not have a diversified range of products & services. Still the
bank is not fully computerized. Manual registers are used in some cases. However,
the income of the business is still heavily dependent upon its share on the retail
market. It caters less the corporate market than the SCB. This may leave it
vulnerable if for any reason its market share erodes. The retail sector is very price
sensitive. But it pay very less interest than other banks. So, if they found higher
interest rate offering by other private banks of Bangladesh then they will loose
customers. It has less promotion campaign than the other bank, because they
believe brand value is the top promoting entity for the company.

7.1.3 Opportunities of the organization:

NBL has a goodwill that it provides different banking services to the people with a

minimum cost and cut a very little charge on its transactions. Although it already
has 121 branches to provide services to its customers, it also has the opportunity to
build up more branches to make more convenient for the customers. The banking
business of NBL and its other social activities have increased day by day.
Sophisticate customer service scheme of the NBL more preferable to customers
than other banks. Products & services development offers NBL many
opportunities. There is the opportunity to develop products and services such as
insurance business & huge investment in capital market etc.

Such high value items will tend to have associated with them, high profits. There
are also global marketing events that can be utilized to support the brand such as
the sports & other cultural activities.

7.1.4. Threats of the organization:

NBL is exposed to the international nature of trade. It has to deals in different

currencies and so costs and margins are not stable over long periods of time. Such
an exposure could mean that NBL may be doing banking business at a loss. The
new technology emerges to protecting the currency value & use options for better
credit rate earnings. The market for banking sector is very competitive. The model
developed by NBL to be worlds local bank is now commonly used and to an
extent is no longer a basis for sustainable

competitive advantage. Competitors are developing alternative brands to take away

the market share of NBL. The roles and regulation of the government and
conventional laws of Bangladesh are also act as threats for the growth of banking
business development in Bangladesh.

As discussed above in weaknesses, the retail banking sector is becoming price

competitive. This ultimately means that retail consumers are transacting in bank
around for a better deal. So if NBL charges a comparative high price for a bank
account service, or loan rate service, then the customers could go to the other bank
to compare fees & charges for the exactly the same services, and will take decision
the cheaper of the two.

Such customers price sensitivity is a potential external threat to HSBC.

Converting Threats into Opportunities

NBL has to expose its international nature of trade more efficiently. It has to
recover costs and maintains margins over long periods of time. The new
technology has to use to protecting the currency value & use options for better
credit rate earnings. NBL has to come to with other sort of criterion thats why the
competitor have to fight very long to copy that exposure. NBL has to give a better
deal in the banking fees & charges for the customers for the retail banking sector.
Converting Weakness into Strength:

NBL has to focus equally to both ranges of customers either retail or corporate. It
has to build up a proper strategy thats why the corporate customers can be
interested to open more of corporate account in NBL. NBL also has to give higher
interest rate for various products & services to gain more market share in banking
business. They have to advertise their brand name more. They can sponsor their
name for various social activities, which will bring up NBL value more to the local
customers. They can also make social awareness to the local customers.

7.2. PEST Analysis:

We know that a scan of the external macro-environment in which the firm operates
can be expressed in terms of the following factors:

1. Political.

2. Economic.

3. Social.

4. Technological.

NBL considers the PEST analysis very important to understand better the local

environment before beginning the marketing process. NBLs environmental

analysis is a continuous process.

NBLs environment is made up from:

The internal environment internal customers like, office technology, wages and
finance etc.

The micro-environment external customers like agents and distributors,

suppliers, competitors

The macro-environment Political and legal forces, Economic forces, Socio-

cultural forces and Technological forces. These are known as PEST factors.

7.2.1. Political Factors

The political arena has a huge influence upon the regulation of NBLs businesses.
We can consider the following aspects

1. The political environment is not stable, so as the banking sector. Though the

business activity is wholly regulated by Bangladesh Bank, in a country like

Bangladesh, NBLs banking activity is depending on the political culture of

Bangladesh.

2. Government policy influence laws that regulate NBLs business.

3. The governments position on marketing ethics, culture & religion is totally

based on custom & culture of Bangladesh. So, NBL is following that custom.

7.2.2. Economic Factors

NBL considers the state of a trading economy in the short and long-terms. The
interest rates for various accounts are quite attractive. The bank also invested a
huge portion of money to the T-bill market. The level of inflation also affects the
business values in Bangladesh. Though as being a fore bank it can adjust that
inflation very easily.

7.2.3. Socio cultural Factors:

NBL considers the social and cultural factors considerably. Like-

1. It thinks about the principle religion of the country and gives its employees the
best possible benefit for that. Two bonuses in a year are based on two Eid festivals.

2. The attitudes towards other products and services of other competitive banks are
marked specifically. They try to update their system & procedure in a standard
manner.

3. Our mother tongue is Bengali. I saw the top level mangers are converse with
one another in Bengali.

4. NBL knows that, the people of Bangladesh are very emotional in nature. So, it
tries to adopt that emotion in their business for better understanding the local
customer.
7.2.4. Technological Factors

Technology is vital for competitive advantage, and is a major driver of

globalization.

NBL allows a better technology for its products and services to be made more
cheaply and to a better standard of quality to the customer. These technologies
offer consumers and businesses more innovative products and services such as
ATM machine.

NBL offers its customers to a new way to communicate with consumers e.g.
Customer Relationship Management (CRM) etc.

Chapter-8

Recommendations and Conclusions

Recommendations:

I have some points to focus which will help the bank to improve the efficiency as
well as the quality of work. The points are as follows:

1. Management should set proper planning for its operations of each and every
work for the whole bank as well as all branches of NBL.

2. Management must design the jobs on priority basis.

3. As the top management has decided to start online banking system, necessary
steps should be taken to make this decision implement as soon as possible.

4. As NBL is a service providing organization, it should introduce new and

dynamic services to serve the people and capture the target market

5. It is necessary to assign required qualified manpower for every job.

6. The proper managerial observation and cooperation are required.

7. All branches should properly maintain all documents on daily basis.

8. It must avoid the duplication of work through better communication.

9. It also tries to avoid duplication in any case through accuracy and efficiency.
10. It is required to develop some effective motivational programs.

11. Top management must ensure the proper implication of IT in all branches.

12. And most of all ensure proper communication with head office and other
branches.

Conclusion:

I acknowledged different banking functions and day to bay banking operation on

my way to complete this internship.

From my starting day to up to date my practical implementation of customer

dealing procedure during the whole period practical orientation in NBL at Mirpur
branch, I have to try my best to reach a firm and concrete a conclusion very
confident way. In this report I have explained my best in respect of my real life
experience gathered from different departments. I believe that my realization will
be in harmony with most of the banking thinkers. Now a day banking sector is
more competitive. To achieve a proper reward about performance, it is essential to
satisfy its customer by providing them different valuable and dynamic services.
Because a satisfied customer will talk to others about the services those he/she is
very justifiable enjoying and a satisfied customers statement is more effective than
a thousand of commercial advertisement. People depend on the people is the
mode of human civilization. Therefore, the importance to satisfy customer

is increasing day by day in the private commercial sector especially in the private
banks.

As all the activities those are required to provide valuable services to its customers
to make them satisfy, are related with the fund management system, NBL is so
much careful about its fund management system. NBL always gives its highest
attention in monitoring and managing the bank fund, which is consists of fund,
capital, reserve, deposit, loan and advance. At present NBL is successful in
effectively and efficiently managing these vital issues. In spite of that, in order to
keep its success continue and reach at the pinnacle of success it, its managers,
board of directors and employee must have the comprehensive and clear idea about
the reserve, fund, loan, capital, deposit and liquidity regarding the smooth control
of bank and continue its vital operation toward countrys economic development.