Internship Report On IFIC Bank

INTRODUCTION
1.1 Scene behind the Study

Banks play an important role in the development of a country.
Bangladesh Government and Central Bank developed implemented
different rules and regulation on behalf of the healthier economy.
World Bank also gave his favorable eyes to restructure the banking
society. “MBM- for 21st centuries banking” is the most dynamic
innovation for the new millennium. This internship program is part
of our Academic structure. I have tried my best in be oriented with
the practice of banking in real life.
Modern banks play an important part in promoting economic
development of a country. Banks provide necessary funds for
executing various programs underway in the process of economic
development. They collect savings of large masses of people
scattered through out the country, which in the absence of banks
would have remained ideal and unproductive. These scattered
amounts are collected, pooled together and made available to
commerce and industry for meeting the requirements. Economy of
Bangladesh is in the group of world’s most underdeveloped
economies. One of the reasons may be its underdeveloped banking
system. Government as well as different international organizations
have also identified that underdeveloped banking system causes
some obstacles to the process of economic development. So they
have highly recommended for reforming financial sector. Since
1990, Bangladesh Government has taken a lot of financial sector
reform measurements for making financial sector as well as
banking sector more transparent, and formulation and
implementations of these reform activities has also been
participated by different international organization like World Bank,
IMF etc.
In 1996, World Bank published ‘Bangladesh: Agenda for action’ in
which it has suggested a lot of recommendations for economic
development of our country. These recommendations include
special presentation for reforming banking sector. In this agenda,
World Bank has suggested to introduce MBM as follows:
“Professional sings the banking business will generate large, long
term payoffs in the form of a more efficient banking system apart
from functional and technology-related training required at
Bangladesh Bank and the commercial banks. Consideration should
be given to starting a Masters in Bank Management program at the
Bangladesh Institute of Bank Management.”
Practical orientation in IFIC Bank – Motijheel Branch 1

Our high banking official has also felt the importance of having
entry-level officer who are well educated in banking field.
Accordingly, MBM program has been started in earlier of this year.
The entire fourth term of this MBM program has been designed for
gaining practical knowledge about banking and all the MBM
students are required to go to various financial institutions for
practical exposure. Having completed practical orientation, all the
students are also required to submit a report on their experience.
1.2 Objectives of the Study

The primary objective of this study is to attend the course of
Practical Orientation in Banks, which is the subject of MBM 4th
Term. But the objective behind this study is something broader.
Objectives of the study are summarized in the following manner
a. To comply with the entire branch banking procedures
b. To make a bridge between the theories and practical procedures
of banking day to day operations
c. To understand the terms that has been taught in the last nine
months in BIBM and the courses that will be taught in the next
year courses
d. To analyze the performance of the branch as well as IFIC Bank
Limited as a whole.
e. To have some practical exposures that will be helpful for my
second year courses in the MBM program.
1.3 Important of the Report

This report is prepared to give a concrete idea about the dealing
and transactions of any Commercial Bank. I believe that my report
will help a lot those who want an orientation about banking. Bank
management also can be using the information of my observation
for their managerial decision if needed.
1.4 Methodology
This report has been prepared on the basis of experience gathered
during the period of internship form 12 October to 28 December.
Within this period I visited three department namely General
Banking, Advances and Foreign Exchange departments.

Firstly total duration were divided into total working days that
came to a total working day of 58 days and were distributed in the
following manner
Departments Duration In Days
General Banking From 12 October to 30 October 15 Days
Advances From 31 October to 28 November 24 Days

Foreign Exchange From 30 November to 28 December 19 Days
Duration of rotation in different departments in the branch is

shown in the graph below.
I have worked different kinds of desks .I have collected some data

for organize the report. Both primary and secondary data sources
were used to generate this report.
Primary data sources:
1. Schedule survey
2. Informal discussion with professionals
3. Observation while working in different desks etc.
Secondary data sources:

1. Previous internship reports
2. Corporate newsletters
3. Manual
4. Different publications of Bangladesh Bank.

1.5 Organisation of the Report
This report has been prepared in different chapters in order to
explain my experience in the easiest way. Traditional over view is
presented in the 1st chapter. Second chapter contains about the
IFIC Bank at a glance. General banking and its operation in
detailed in the 3rd chapter. Advances are discussed in fourth
chapter. Foreign exchange is discussed in the fifth chapter. Finally,
observation and research consulted wit hare in the chapter six.
1.6 Limitations of the Study

Ten weeks observation and orientation is not enough to be an
expert on commercial banking though I have been received the
maximum assistance from the every individual of the Motijheel
Branch. Definitely, I could not produce an outstanding report for
the time limitations.

BACKGROUND OF IFIC BANK
2.1 Portrait of the Bank

International financial investment and commerce (IFIC) Bank
Limited started banking operations on June 24, 1983. Prior of that
it was set up in 1976 as a joint venture finance company at the
instant of the Government of the People’s Republic of Bangladesh.
Government then held 49 percent shares while the sponsors and
general public held the rest.
The objectives of the finance company were to establish venture
Banks finances companies and affiliates abroad and to carry out
normal functions of a finance company at home.
When the Government decided to open up banking in the privet
sector in 1983 the above finance company was converted a full-
fledged commercial Bank. Along with this, the Government also
allowed four other commercial banks in the private sector.
Subsequently, the Government denationalized two banks, which
were, then fully Government-owned.
While in all these Banks Government is holding nominal 5 percent
shares, an exception was made in the case of the Bank. It retained
40 percent shares of the Bank.
The decision by the Government to retain 40 percent shares in IFIC
Bank was in pursuance of the original objectives, namely,
promotion of the participation of Government and private sponsors
to establish joint venture Banks, financial companies, branches and
affiliates abroad.
2.2 Ownership Structure

The sponsors hold ownership of the Bank in the private sector and
Government of the People’s Republic of Bangladesh. Sponsors and
individuals now own about 62 percent of the share capital and the
Government owns a little more than 38 percent of the shares.
2.3 Capital and Reserves

The Bank started with an Authorized capital of Tk. 100 million in
1983. Paid up capital at that time stood at Tk. 71.50 million only.
Over the last 19 years, the authorized and paid-up capital has
increased substantially. The paid capital stood at Tk. 406.39 million
as on December 31,2001.

The Bank has built up a strong reserve base over the years. In last
19 years its Reserves and Surplus have increased overly. As
against Tk. 21.20 million only in 1983 Reserve and surplus
increased to Tk.622.53 million in 2001. This consistent policy of
building up Reserves has enabled the Bank to maintain a better
adequacy ratio as compared to others.
With the active support and guidance from the Government, the
bank has been showing a steady and improved performance. In its
fifteen years operation, the bank has earned the status of leading
in terms of both business and goodwill.
Starting modest deposit of only Tk. 863.40 million in 1983 the
Bank has closed its business with Tk. 17616.68 million of deposit
as on December 31, 2001. The annual growth rate has mostly been
higher compared to both banking sector growth and individual
growth rates achieved by others.
As against a profit of Tk. 21.94 million in 1984, the Bank earned a
record profit of Tk. 248.00 million for the year ended on December
2001.
2.4 Distribution of Branches

The Bank covers by its activities all the important trading and
commercial centers of the country. As on December 22, 2002 it
had 55 branches within Bangladesh.
2. 5 Operation Abroad
Joint Venture
a. Bank of Maldives - In 1983, IFIC Bank set up a joint venture
bank names Bank of Maldives Limited (BML). It is the first
bank of Maldives. In 1992, as per contract, IFIC Bank handed
over the management of BML to Maldives.
b. Oman-Bangladesh Exchange - To facilitate remittance by
Bangladeshi in Oman, IFIC bank set up a money exchange
company as a joint venture, named Oman-Bangladesh
Exchange.
Branch abroad
a. Pakistan Branch - IFIC Bank opened its first overseas branch
in Karachi, Pakistan. It opened its second branch at Lahore in
Pakistan.

b. Nepal Bangladesh Limited - In December 1993, the Bank got
permission to establish a joint venture bank with 50% equity
capital in Nepal. The Bank known as, Nepal Bangladesh Ltd.
came into operation in June 1994.
2.6 Human Resource Development

The Bank has a Human Resource Development & Research
Department to develop human resources internally. The Academy
is equipped with professional library, modern training aids
professional faculty and other facility. It is now under Personnel &
Human Resource Development & Research Division. The Academy
conducts regularly foundation courses, specialized courses and
seminars on different areas of banking to take care of the
professional needs.
Total manpower stood at 1737 as on December 31, 2001.

2.7 HIERARCHY of the Management of this Bank
S e n i o r E x e c u t i v e V i c e - P r e s i d e n t
E x e c u t i v e V i c e - P r e s i d e n t
S e n i o r V i c e - P r e s i d e n t
F i r s t V i c e - P r e s i d e n t
V i c e - P r e s i d e n t
S e n i o r A s s t t . V i c e - P r e s i d e n t
F i r s t A s s t t . V i c e - P r e s i d e n t
A s s t t . V i c e P r e s i d e n t
S e n i o r S t a f f O f f i c e r
S t a f f O f f i c e r
O f f i c e r G r a d e - I
P r o b a t i o n a r y O f f i c e r
O f f i c e r G r a d e - I I
A s s i t a n t O f f i c e r
O f f i c e A s s i s t a n t
D r i v e r
S e c u r i t y S t a f f
O f f i c e A t t e n d a n t

GENERAL BANKING
3.1 Introduction
General Banking department performs the core functions of Bank
operates the day to day transactions. They take the deposit from
the customer and meet their demand for cash honoring their
cheeks. The department is very rush and the employee here are
too upgrade to their duty. They pass entry of every transaction
within the day. It opens new accounts, remit funds, issues bank
draft and pay order etc. Since Bank is confined to provide these
services everyday, general banking is knows as “Retail Banking”.
3.2 Different Departments of General Banking

It has five major parts in the branch to perform. The sections are
as following
a. Account opening section
b. Remittance
c. Checks clearing
d. Cash
e. FDR
3.3 Different Types of A/C:

3.3.1 CD A/C IN IFIC BANK, Motijheel Branch.
This is very popular type of account among the business people.
The Main feature of this account is that the A/C holder can draw
money from the account as many times as he needs. No interest is
allowed on this type of account. But the depositors in this account
generally get other customer service such as overdraft facility,
collection of cheques, transfer of money, providing agency facility,
and general ancillary services. This minimum amount of balance
required to open account and to be maintained varies accordingly.
In general IFIC Bank, Motijheel Branch asks fir as least Tk. 5000
minimum balance to be maintained. The account opening form
current A/C has to be filled up by the applicant of the account. The
required identification information is collected. Any new holder has
to be introduced by a customer who has as current account in the
bank branch. The introducer can be an officer of the branch also.
For applicants with passports don’t need any introducer as because
for passport holder Government himself is the introducer. A set of
specimen signature is collected fir later verification in the cheque.

3.3.2 Savings (SB) A/C in IFIC Bank Ltd. Motijheel Branch
All the features of current a/c’s are available for savings deposit
accounts accept, a customer can draw money from this type of
account only a limited number of times. The minimum amount of
balance to be maintained with this type of account is Tk. 2000. The
forms for opening this type of A/C is almost like CD A/C except
little exception.
3.3.3 STD A/C in IFIC Bank Ltd., Motijheel Branch

The STD account is a very important class of account in this
branch. The minimum amount of balance has to be maintained
with STD A/C is Tk. 200,000.
3.3.4 Fixed Deposit Receipt (FDR) Account:

During opening of this sorts of account, along with other
conventional procedure, the A/C holder is given the receipt of his
deposited amount and date to maturity of his deposit. An interest
rate ranging from 6% to 9% is offered depending on different
amount and tenure of deposits.
3.4 Account opening

This sections opens accounts. Selection of customer is very
important for the bank because banks success and failure largely
depends on their customers. If customer is bad, they may create
fraud and forgery by their account with bank and thus destroy
goodwill of banks. So, this section takes extreme caution in
selecting its customer base. This section opens the account fir the
customer. In general banking, the account section plays a very
important role. Selection of customer for opening account is very
crucial for the institution. If the account holder finds out irregular
largely depends on their customer. It hampers the goodwill also.
So the bank should be extreme caution in its selection.

3.4.1 Accounts Opening Process
Receiving filled up application in bank’s prescribed form

Step 1
mentioning what type of account is desired to be opened
1. The form is filled up by the applicant himself / herself
2. Two copies of passport size photographs from individual

are taken, in case of firms photographs of all partners are
taken
Step 2 3. Applicants must submit required documents
4. Application must sign specimen signature sheet and give

mandate
5. Introducer’s signature and accounts number – verified by

legal officer
Step 3 Authorized Officer accepts the application
Step 4 Minimum balance is deposited – only cash is accepted
Account is opened and a Cheque book and pay-in-slip book is

Step 5
given

3.4.2 Account Opening Procedure with a low Chart
Applicant fills up the application form in the
He required filling up the specimen
For individual introduction is needed by an account holder
The authorized officers scrutinize the introduction and

examine the documents submitted
Issuance of deposit slip and the deposit must be made

in case, no check no draft is acceptable to the bank
After depositing cash one checkbook issued
Account opened
3.5 Target Customers o IFIC Bank, Motijheel Branch

The customers for loan service are categorized as follows:
i. Individual person
ii. Sole proprietorship firm
iii. Partnership firm
iv. Private Limited Company
v. Public Limited Company
vi. Government and semi Government Organization
vii. Bank Employee

3.6 Special Caution or the documents from the Account opener of
the following types
In order to open an account in IFIC bank LTD , Motijheel Branch,
the party has to fill up an account opening form and specimen
signature card provided by the banker. There are different forms
for different types of account. The customer has to fill that
particular form for which account he wants to open. Generally, the
following information is required to open an account:
• Name of the applicant(s)
• Profession/Nature of business
• Permanent & present address
• Special instruction regarding the operation the account (if any)
• Introducer’s name & account number
• Specimen signature in the signature card
• Partner’s name, address and signature (in case of partnership
firm)
• Photocopy of Passport/Ward Commissioner’s certificate/
Chairman certificate of Union parishad/Employer’s certificate
regarding identification and nationality of the person(s)
concerned
• Two copies of photographs
The Bangladesh Bank has recently made the selection of a nominee

by the applicant mandatory and the applicant, in the relevant part
of the form, must attest the photograph of the nominee.
The concerned officers verify the account opening form. If the
particulars are properly filled up and in order, the customer is
entitled to open the account. He has to submit some particular
documents, which vary due to the kinds of the accounts.
Documents required for opening an account:
In order to open any kind of account a customer is required to
submit particular documents that vary due to the kinds of account.
Here are required documents according to the kinds of accounts:

For Individual/joint/Partnership/Social Club:
The bank requires the following documents, which must be up-to-
date and duly completed:
• Account opening form properly filled up and signed by the
applicant(s)
• Specimen signature in the signature card
• Two copies of photographs of each partner/director
• The photos must be attested by the introducer
• Mandate or authority from the opening an individual,
partnership account is to be obtained where a customer want
to authorize another person to operate on his account.
• Certified true copies of by-laws, rules, regulations
constitutions in case of societies, club, association and limited
companies etc.
• Certified copy of resolution authorizing opening and operation
of the account with bank passed by the executive committee/
managing committee of the society/ club of association,
limited companies etc.
• List of the directors.
• Partnership deed or letter of partnership for partnership firm.
For sole proprietorship concern:

• All the general information regarding opening an account
• Trade license
For limited companies/corporation:

• Account opening form.
• Specimen signature card.
• Memorandum and articles of association.
• Resolution of board of directors authorizing opening of the
account with the bank.
• Certificate of incorporation.
• Certificate of commencement at business.
• List of directors

• Individual bio-data of each director & Photocopy of Passport/
Ward Commissioner’s certificate/Chairman certificate of Union
Parishad/Employer’s certificate regarding identification and
nationality of the directors concerned
Minimum deposit for opening an account:

Every customer has to deposit a certain sum of money to
incorporate the account.
• For current account initial deposit is Tk 10,000
• For savings account initial deposit is Tk 5,000
3.7 Chequebook issue:

The following procedures are maintained for issuing a Chequebook:
• Firstly the customer will fill up the cheque requisition form.
• The leaves of the Chequebook under issue shall be counted to
ensure that all the leaves and the requisition slip are intact
and the name & account number shall be written on all the
leaves of the Chequebook and on requisition slip.
• The name and the account number of the customer shall be
written in the Chequebook register against the particular
Chequebook series.
• Then the officer in charge signs the register, Chequebook, and
the requisition slip.
• Then the Chequebook is handed over to the customer after
taking acknowledgement on the requisition slip.
A cover file containing the requisition slip shall be effectively

preserved as vouchers. If any defect is noticed by the ledger
keeper, he will make a remark to that effect on the requisition slip
and forward it to the cancellation officer to decide whether a new
Chequebook should be issued to the customer or not.
3.8 Transfer of an account to another Branch:

Sometimes the customer wants to transfer his account to another
branch due to various reasons. IFIC Bank, Motijheel Branch, also

gives this kind of facility to the customer. In this case, they will
have to submit an application to the branch manager stating the
reasons. The officer verifies the signature and finds out the balance
of the account holder. The holder also submits the rest cheque
leaves along with the application. Then the officer issues an Inter
Branch Credit Advice (IBCA) to that branch and a debit voucher
with the balance of deposit in that account. He also sends the
account opening form and specimen signature card to that new
branch. The new branch officer verifies the customer signature with
account opening form supplied to him. The amount mentioned in
the (IBCA) considered as the initial deposit of the new branch.
3.9. Closing Procedure of an account:

For two reasons an account can be closed:
3.9.1. By Banker: banker has the right to close the account if the
customer does not maintain any transaction six years and the
balance is become lower than the minimum balance.
3.9.2 By Customer: if the customer wants to close his account he
will write an application to the manager and the manager then
close the account.
Firstly, the concerned customer has to apply for closing his/her

account. Then to close the account the cheque book is to be
returned to the bank. After charging the account closing charge the
Manager will close the account. Closing charges are as follows:
For savings bank account--------------20 Taka
For current account----------------------30 Taka
The rest amount of money laid in the respective account is paid to
the customer by a payment order. In case of payment order
certain commissions and vat are cut off from the account.
3.10 Local Remittance

Sending money from one place to another place for the customer is
another important service of banks. And this service is an
important part of country’s payment system. For this service,
people, especially businessmen can transfer funds from one place
to another place very quickly. There are five kinds of techniques for
remitting money from one place to another place.

Bank transfer funds from one place to another place on behalf of
its customers. The main modes of transfer fund are:
These are:
Demand Draft
Pay Order
Telegraphic Transfer
Telephone Transfer
Mail Transfer – Time consuming and not frequently used
Telegraphic and Telephone transfer are almost the same, both are
them are known as TT in short. So the basic three types of local
remittances are discussed below:

Points Pay Order Demand Draft TT
Pay Order gives Demand Draft is an Issuing branch

the payee the order of issuing bank requests
right to claim on another branch of another branch
payment from the same bank to pay to pay specified
Explanation the issuing specified sum of money to the
bank money to payee on specific payee
demand. on demand by
Telegraph/
Telephone
Payment from Payment from ordered Payment from

Payment
issuing branch branch ordered branch
from
only
Within the Outside the Anywhere in the
Generally clearinghouse clearinghouse area of country
used to area of issuing issuing branch. Payee
Remit fund branch. can also be the
purchaser.
Payment is 1.Confirm that the DD 1.Confirm

made through is not forged one. issuing branch
clearing
2.Confirm with sent 2.Confirm Payee
Payment
advice A/C
Process of
the paying 3.Check the ‘Test 3.Confirm
bank Code’ amount
4.Make payment 4.Make payment
5.Receive advice
Only Commission + telex Commission +

Charge
commission charge telephone
Unlike Cheque, there is no possibility of dishonoring of PO/

Possibility of DD/TT because before issuing, issuing bank takes out the
dishonor amount of the instrument in advance from the customer–
common for all instruments

3.10.1 Test Arrangement
For all these techniques of remittance except telephone transfers,
Test is deployed. Test is security number by decoding which the
paying bank can be sure that the DD/TT/MT is not forged one. Only
authorized officers know the test number. Bank maintains secret
code for each of its officers, date, week, year, and amount to be
transferred.
3.10.2 Payment Order

A payment Order (PO) is an instrument to remit fund within a
clearing zone. The PO can only be cashed through the issuing
branch.
3.10.3 Issuing of a Payment Order

The procedures for issuing a PO are as follows:
• Customer submit application to the officer along with money

• Give necessary entry in the bills payable register where payees
name, date, PO- no, etc. are mentioned
• Prepared the instruments
• After approved the instruments by authority, it is delivered to the
customer
• Signature of the customer is taken on the counterpart.
Rate of commission:
Commission Up to Tk
Tk 15 Tk 1 to Tk 1000
Rate of commission:
Commission Up to Tk
Tk 15 Tk 1 to Tk 1000
Tk 25 Tk 1001 to Tk 100000
Tk 50 Tk 100001 to Tk 500000
Tk 100 Above Tk 1000

3.10.4 Demand Draft:
A demand draft is also called the Bankers Draft. It is an
instrument, issued by a particular branch, drawn on another
branch of the same bank, instructing to pay a certain amount of
money. DD is very much popular instrument for remitting money
from one place to another place. The remitter of funds can
purchase a DD making the amount payable to any one including
him. The banker is discharged from liability only by payment in due
course.
According to section 13 of Negotiable Instruments Act, DD is not a
Negotiable Instrument. But a DD has all the attributes of a bill of
exchange. Such as Instrument in writing, containing an
unconditional order, signed by the banker etc. Hence a DD is
treated as bill of exchange.
3.10.5 Procedure for issuing a DD is as follows:

• Deposit money with DD application
• Necessary entries are given to register
• Issuing of the Account payee only crossed instrument.
3.10.6 Telegraphic Transfer:
Telegraphic Transfer are affected by telegram, telephone, telex as

desired by the remitter. Transfer of funds by telegraphic Transfer is
the most rapid and convenient but expensive method.
Some times the remitter of the funds requires the money to be
available to the payee immediately. In that case the banker is
requested to remit the funds telegraphically. Such type of
remittance is called Telegraphic Transfer (TT). But in practice
banker uses telephone to remit fund. Banker uses a test serial to
maintain secrecy.

3.10.7 Procedure for the outgoing TT:
• Deposit of money by the customer along with application form
• In receipt of money a cost memo is given to the customer
containing TT serial number, which is informed to the
awaiting party in the paying branch by the customer.
• Tested telex message is prepared, where TT serial number,
notifying party name is mentioned.
• The telex department confirms transmission of the message.
3.10.8 Procedure for the incoming TT:

• After receiving the telex, it is authenticated by tested
• TT serial number is verified by the “TT in concern branch” register
• Voucher is released in this respect giving accounting treatment
as:
3.10.9 Accounting entries for the PO, DD and MT

Cases PO / DD TT / MT
Cash A/C------------------Dr. Cash A/C------------Dr.
Against Cash – IFIC General A/C ----Cr. IFIC General A/C ---Cr.
Originating Commission A/C ----Cr. Commission A/C ----Cr.
Telex Charge A/C---Cr.
Party A/C------------------Dr. Party A/C------------Dr.

Against Transfer – IFIC General A/C ----Cr. IFIC General A/C ---Cr.
Originating Commission A/C ----Cr. Commission A/C ----Cr.
Telex Charge A/C---Cr.
IFIC General A/C -------Dr. IFIC General A/C -----Dr.
Responding
Party A/C ---------Cr. Party A/C -------Cr.
When Advice IFIC General A/C ------------------------------------------Dr.
Received - for Bills Payable DD Payable A/C ------------------------Cr.
DD
When DD Placed Bills Payable DD Payable A/C ------------------------ -Dr.

Against Advice Party A/C ---------------------------------------Cr.
When DD Paid Sundry Asset DD Paid without Advice A/C -----------Dr.
without receiving Party A/C ----------------------------------------------Cr.
Advice
3.10.10 Cancellation of DD / PO / TT

Application in written to the Manager of the account
Step 1
maintaining branch
Step 2 Verification of the specimen signature

Bills Payable DD Payable ----------------Dr.
Step 3 Incoming
IFIC General A/C --------------------Cr.
Journal
FIC General A/C --------------------------Dr.
Posting Outgoing
Party A/C -----------------------------Cr.
Step 4 Send letter to the paying Bank.
3.11 Cheque Clearing

This section receives all kinds of Cheques in favor of the client for
clearing as the part of their banking service. After receiving the
Cheque it is necessary to endorse it and cross it specially. Basically
the Cheques for clearing are of following types:
Types Explanation Clearing Process
Inward
Cheques received from the Party’s A/C ------Dr.
Clearing
Clearing House, of our bank IFIC General Account -------Cr.
Cheque
Outward These Cheques are directly sent to

Cheques of other
Clearing OBC the respective branch and request
branch of IFIC
(Outward them to send IBCA. When IBCA
Bank within our
Bills for comes, then customer’s accounts
clearing house
Collection) are credited for the amount of the
area
Cheque.
Clearing Cheques of These Cheques are sent to clearing

Cheque another bank house via the Motijheel Branch.
within our When drawee bank honor the
clearing house Cheques, then the account of
area Cheque depositors are credited.

Types Explanation Clearing Process
These Cheques are cleared in two

ways:
Firstly, if any branch of our bank
exists within the clearinghouse
area of drawee bank, then we send
the Cheque to that branch of our
Cheques of
OBC bank and that branch collects the
another bank
(Outward proceeds through clearing house
which is situated
Bills for formalities and sends an IBCA to
outside the
Collection) us.
clearing area
In second way, if there is no
branch of our bank, then we
directly sends the Cheque to the
drawee bank and request them to
send the proceeds by TT, MT, or
DD or by in any other means
These Cheques are settled by

From other branch of IFIC sending IBCA, i.e. debiting
Inward Bank depositor’s account and crediting
Bills for sender’s branch account.
Collection
These Cheques are settled debiting
(IBC) From another bank outside the depositor’s account and sending
clearinghouse DD, MT, TT in favor of sender’s
bank
3.12 Cash Section

Cash department is the most vital and sensitive organ of the
branch as it deals with all kinds of cash transactions. This
department starts the day with cash in vault. Each day some cash
that is opening cash balance are transferred to the cash officers
from the cash vault. Net figure of this cash receipts and payments
are added to the opening cash balance. The figure is called closing
balance. This closing balance is then added to the vault. And this is
the final cash balance figure for the bank at the end of any
particular day. Cash department in the IFIC Bank, Motijheel Branch
is authorized dealer of foreign currency, so it can deal with buying
and selling of foreign currency.

3.12.1 Functions of Cash Department
1. Cash payment is made only against cheque
2. This is the unique function of the banking system
Cash Payment which is known as “payment on demand”
3. It makes payment only against its printed valid
Cheque
1. It receives deposits from the depositors in form of

cash
Cash Receipt
2. So it is the “mobilization unit” of the banking system
3. It collects money only its receipts forms
3.12.2 Cash payment or Cheque cancellation process

Step 1 Receiving Cheque by the employee in the cash counter
Verification of the followings by the cash Officer in the

computer section
1. Date of the Cheque (it is presented within 6 month
from issue date)
Step 2 2. Issued from this branch

3. Amounts in figure and sentence written does not
differ
4. Signature of the drawer does not differ
5. Cheque is not torn or mutilated
Step 3 Gives pay cash seal and sends to the payment counter
Step 4 Payment officer makes payment
3.12.3 Books Maintained by this Section

It keeps account of cash balance in vault in the
Vault Register
bank.
Cash Receipt Register Cash receipt in whole of the day is recorded here.
Cash Payment Cash payments are made in a day are entered

Register here.
Cash calculation for final entry in vault register is

Rough Vault –Register done here, as any error and correction here is not
acceptable.
Balance here is compared with vault register. If

Cash Balance Book
no difference is found, indicates no error.

In book 1 and book 5, notes and currency are recorded by
mentioning their denominations and number of each denomination.
Same set of these books is maintained separately for both local
and foreign currency.
3.13 FDR
This branch maintains a separate section for maintaining Fixed
Deposit. FDR is an important factor for the bank and volume of
FDR determines the investment base of the bank. FDR is found to
be 60% of the total deposit of this branch. Basically this is the
mobilization unit of the Bank. It is obvious to give due importance.
3.13.1 Liquidation of FDR

i. Only the account holder himself and the authorized person can
liquid the FDR after maturity.
ii. In case of joint name, authentication from both is necessary.
iii. In case of ‘Either of Survivorship ‘ clause – any one can
liquid.
iv. In case of Death, the survivor cannot encash the FDR even if
there exist the either or survivor clause – succession
certificate from the court is needed.
v. If demanded before the maturity the last expired duration is
considered to pay interest.
FDR section provides another service on behalf of the government.
These services– this bank issues and encash the following two
government securities:
i. Five Years Bangladesh Sanchay Patra
ii. Pratirakha Sanchay Patra
This section of this branch is also fully computerized. No ledger, no
other subsidiary books are maintained separately in this section. All
entry is given directly in the computer and then necessary
information is printed when required.

3.14 Establishment section
This section deals with employee’s salary, many types of internal
expenses such as purchase of pen, paper, equipment, machinery
and payment of labor cost and employee conveyance. In case of
leave of absence employee collects prescribed form from this
section. This section of the bank is simply maintained by a single
person
3.15 Accounts section

This is obviously an independent and unique department, which
works as the composition of all the departments of the branch,
but it is under the In-Charge of the General Banking in this
branch. This section in this branch is fully computerized. So the
conventional large ledger and journal books are not kept like the
nationalized banks. Only four personnel maintain the entire
accounts section. It receives the vouchers from all departments
and prepares the subsidiaries and maintains accounts.
3.15.1 Books maintained by this section

Daily Position It shows the daily position of the branch
It records all cash transaction of the day under

Clean Cash
different head
It keeps the vouchers from different department along

Extract
with their summary sheet
There are different heads of the general ledger which

General Ledger are prescribed by the head office and the accounts are
maintained through those heads
It is the balance sheet of the concern under periodic

Statement of accounting system. It shows the daily profit of the
Affairs concern along with the asset and liability of the
respective day.

ADVANCE
4.1 Introduction
This is the survival unit of the bank because until and unless the
success of this section the survival is a question to every bank. If
this section is not properly working the bank itself may become
bankrupt. This is important because this is the earning unit of the
bank. Banks are accepting deposits from the depositors in
condition of providing interest to them as well as safe keeping their
interest. Now the question may gradually arise how the bank will
provide interest to the clients and the simple answer is – advance.
Why the bank provides advances to the borrowers –
a. To earn interest from the borrowers and give the depositors
interest back
b. To accelerate economic development by providing different
industrial as well as agricultural advances
c. To create employment by providing industrial loans
d. To pay the employees as well as meeting the interest groups
Credit is continuous process. Recovery of one credit gives rise to

another credit. In this process of revolving of funds, bank earns
income in the form of interest. A bank can invest its fund in many
ways. Bank makes 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.
We often use 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.
Academically Advance is the combined form of the following items
Credit:
 An important function of bank.
 Credit is the finance made available by one party to another.
 Credit is simply opposite of debt. Debt is the obligation to
make future payment.
 Credit is the claim to receive this payment.

 Credit allowed to the potential clients of a bank.
 To earn money in form of interest.
 Receiving back the credit amount after the maturity or as per
contract.
Banking business is like all other profit-oriented business .It

depends mainly on how much profit they con make. Profit is the
yardstick for the bank to move on. Banking is a business that deals
only with money and credit. Banks are profit oriented. They invest
their fund in many to earn income.
Huge amount of income derives from loans and advances. Banks
makes loans and advances to traders, businessman and
industrialists against the security.
4.2 Sources of fund for lending:

1.Own fund:
a) Paid up capital
b) Reserve
c) Undistributed profit/ Retained earning
2.Outside source:
a) Deposit (up to 80%)
b) Borrowings from other banks
c) Refinance.
4.3 General principle of good lending:

1. Saftey-“Safety is the first”
2. Liquidity
3. Purpose
4. Profitability
5. Security
6. Diversity/ spread
7. National interest

4.4 General criterion for selection of borrower:
1. Character-Intention to pay the loan.
2. Capacity-Borrower’s competence in the field of employ to fund
profitably and ability to generate income.
3. Capital-Financial strength to cover a risk.
4. Condition-It general business condition.
5. Collateral-Implies additional security.
4.5 Creation on Charges on Security:

Banks gives different types of loans and advances. Banks take
different types of security for loans and advances. Charging a
security means making it available as a cover for an advance.
The common modes of charging securities are as following:

1. Pledge
2. Hypothecation
3. Mortgage
4. lien
5. Assignment
6. Set-off
4.5.1 Pledge:
Pledge is the bailment of goods as security for payment of a debt
or performance of a promise. Bailment is the delivery of goods by
one person to another for some purpose under a contract.
Delivery of goods:
 Actual delivery
 Symbolic or constructive delivery
Characteristics of a valid pledge:

 The ownership of the goods remains with the pledgor.
 Delivery of goods is necessary.

 Pledgee has aright to retaining the goods for the security until
final payment of debt.
 Right to sell the goods after reasonable notice, if the borrower
default.
Goods should not be accepted as securities in pledge account:

 Chemicals
 Explosive
 Inflammable goods
 Goods that may cause damage
 Non saleable goods
 Goods that have no open market
 Price of goods constantly fluctuate
 Adulterate goods
 Goods of inferior quality
 Old stock of goods
4.5.2 Hypothecation:
In this charge creation method, physically the goods remained in
the hand of debtor. But document of title of goods are handed over
to the banker .The method is also called equitable charge. Since
the goods are in the hand of the borrower, bank inspects the goods
regularly to judge its quality and quantity for the maximum safety
of loan.
Characteristics of hypothecation:
 Only moveable assets and book debts can be hypothecated.
 The charge is floating.
 The stocks are constantly changing.
4.5.3 Mortgage:
When a customer as a security for loan offers immovable property,
like building and land, a charge there on is created by means of a
mortgage.

Elements of mortgage:
1. Mortgagor
2. Mortgage
3. Mortgage money
4. Mortgage deed
5. Mortgage Property schedule
 Land/Building
 Benefits that arise out of the Land/Building
 Things that are attached to the earth
Characteristics of Mortgage:
1. It does not transfer the ownership of the property to the
Mortgagor.
2. It relates only immovable.
3. The object of a mortgage is to give security for the loan.
4. The mortgagor gets back all his rights after repayment of loan.
Types of Mortgage:
1. Legal/Registered Mortgage
2. Equitable Mortgage
3. Mortgage by conditional sale
4. English Mortgage
5. Usufructuary Mortgage
6. Anomalous Mortgage
Banks takes only two types of mortgage:
Legal/Registered mortgage:
In this way the mortgagor transfers to the mortgage the legal title
and interest of the property.

Equitable mortgage:
Another method Called equitable mortgage is also used in bank for
creation of charge. Here mere deposit of title to goods is sufficient
for creation of charge. Registration is not required. But in equitable
mortgage bank an undertaking from the customer that if bank
required, customer is bound to register the property to bank.
4.6 Processing of Loan

Application for loan
Applicant applies for the loan in the prescribed form of bank.
Getting credit information:

The bank collects credit information about the applicant to
determine the credit worthiness of the borrower. Bank collects the
information about the borrower from the following sources:
i. Personal investigation
ii. Confidential Report from other Bank Head Office/Branch/
Chamber of the Commerce
iii. CIB report from Central Bank
Analyzing these information:

Bank then starts examination that whether the loan applied for is
complying with its lending policy. If comply, then it examines the
documents submitted and the credit worthiness. Credit worthiness
analysis, i.e. analysis financial conditions of the loan applicant are
very important. If loan amount is more than 50 Lac then bank goes
for Lending Risk Analysis (LRA) and Spreadsheet Analysis (SA)
which are recently introduced by Bangladesh Bank. According to
Bangladesh Bank rule. LRA and SA are must for the loan exceed
one core.
If these two analyses reflect favorable condition and documents
submitted for the loan appear to be satisfactory, then bank goes
for further action.

4.7 Existing Process of Handling Loans:
The process of sanctioning a loan is as follows:
Getting Loan Proposal from Party
About Project
Collection Information
About Party
Evaluating Project & Proposal

BR. Level Evaluation
Legal Assessment
Evaluating Collateral
Evaluation by Agent
Branch Level
Decision
Principal Officer Leave
Sanctioning & Disbursing Loan
Supervision of Loan
Legal Recovery
Recovery of Loan
Usual Recovery

4.8. Information Collection
The loans and advance department gets a form filled by the party
seeking a lot of information. The information are listed below:
1. Name and address (present and permanent)
2. Constitution or status of the business
3. Date of establishment and place of incorporation
4. Particulars of properties, partners and directors
5. Background and business experience
6. Particulars of personal asset, names of subsidiaries, percentage
of share holding and nature business
7. Details of liabilities in name of borrowers, in names of any
directors
8. Financial statement of for the last three years
9. Nature and details of business/products
10. Details of requested credit facilities
11. Details of securities offered
12. Other relevant information
13. Proposed debt equity ratio
4.9. Relevant Matter of Document Checked Before Sanctioning

Any Loan
a) There must be an account of the person want to take loan. The
account must transact for not less than 3 months to 6 months,
otherwise the loan will not be sanctioned.
b) After checking the duration of A/C than the transaction made by
the account holder must be checked. The debit credit position
must be also checked, because it is related with future
dealings of the borrower.
c) The purpose for what the loan is taken by the borrower is
another important matter to see and check. Whether the
purpose is business or else must be checked with its
marketability. Because there is risk of fraud and forgery by
the borrower by seeing one purpose in cash of ding any illegal
business.
d) The banker should check through security whether it is enough
or not

4.10 Proposal Analysis
The project proposal is analyzed and decision about the project is
taken. The loans and advance department is responsible for the
analysis. After preliminary appraisal of the loan project the final
approval is obtained from the manager. If the loan amount crosses
a certain amount (not fined) manager sends the loan project to the
principal office for final approval. The experts in principal branch
find out different projected ratios and develop an understanding
about the potentiality of the project. Bank evaluates a loan
proposal by considering few predetermined variables. These are
safety, liquidity, profitability, security, purpose of the loans,
sources of repayment, diversification of risks etc. The most
important measure of appraising a loan proposal is safety of the
project. Safety is measured by the security offered by the borrower
and repaying capacity of him. The attitude of the borrower is also
an important consideration; liquidity means the inflow of cash into
the project in course of its operation. The profit is the blood of any
commercial institution. Before approval of any project the bank
authority has to be sure that the proposed project will be profitable
venture. Profitability is assessed from the projected profit and loss
statement. The security is the only tangible remains with the
banker. Securing or collateral is the only weapon to recover the
loan amount. So bank has to see that the collateral it is accepting
is accepting is easy sale and sufficient to cover the loan amount.
Bank cannot sanction loan by only depending on collateral. The
sources of the payment of the project should be a feasible one.
During sanctioning any loan bank has to be attentive about
diversification of risk. All money must not be disbursed amongst a
small number of people. In addition any project must be
established for the national interest growth.
4.11 Collateral Evaluation

The IFIC Bank, Motijheel Branch is very cautions about valuation of
the collateral. The bank officials and simultaneously evaluate the
collateral the party offers by private firm. This two-way valuation of
the collateral increases the accuracy of its value estimated. Three
types of value of the collateral are assumed; current market price,
distress price and price after five years. The legal officers of the
bank check the documents ascertain their impurity.

4.12 Final Decision about the Project
If the loan decision remains with branch level, branch sections the
loan and if the approving authority is head office then the decision
comes to the branch by telex or fax.
4.13 Proper Supervision of the Project

If such provision is kept in the sanction contracts the bank officials
go to the project area and observes how loan is utilized. Of no such
close to supervise the loan is added, even then the bank can see
the performance of the project.
4.14 Forms of Advance:

Banks generally offer different kinds of credit facilities to their
customer. They are different forms with different categories.
The credit facilities may be broadly classified into following
categories:
a) Overdraft
2 b) Loan
4.15 Overdraft:
Overdraft are those advance which is allowed on current account
operated upon by cheques. The customer may be sanctioned a
certain limit within which .he can overdraw his current within a
certain period .The customer can withdrawals or deposits any
numbers of within his limit. Interest is calculated and charged only
on the actual debit balances on daily product basis. Overdraft
facility is generally given to businessman for expansion of their
business.
Bank gives overdraft in following three ways:
 SOD (secured overdraft)
 Cash credit
 Export cash credit

4.15.1 Secured Overdraft (SOD):
Secured overdraft is a continuous credit facility to the customer of
the bank. This kinds of credit facility is given on following security:
 Various kinds of Sanchay Patras
 Government security
 FDR (fixed deposit receipts)
 Shares
 ICB unit certificate
 Work order
If any customer wants to get SOD facility from the Bank, he has to
submit an application to the Bank manager .It must be done in
prescribed form of the bank. In this has to submit details about his
business. After getting application form bank made an office note.
In this note bank officer write down the following things:
 Nature of limit
 Extent of limit
 Security
 Margin
 Rate of interest rate
 Validity
Then the Bank Authority mark the security as a lien in their
register. For getting any credit facility from the Bank the customer
must have a current account in that bank branch. Bank can give up
to 80% credit facility of the security like FDR, BSB, PSP, ICB unit
certificate.
SOD limit for FDR, BSB, PSP, ICB unit certificate:

 Two care from branch level
 Above from head office
SOD limit for different kinds share:

 20 lac from branch label
 If it is more then 20 lac, the branch has to take approved from
head office

For share bank can sanction 70% credit facility for “A” grade share
and 60% for “B” grade share .In case of SOD on share the last six
months average value or present value, which one is higher, is
considered.
SOD on work order:

If any party wants to get SOD facility from the bank after getting
work order, he has to submit an application with reliable security
mention there .In past time bank give SOD facility without any
collateral security. But now bank do not give any SOD facility
against work order .If bank see that all of his papers are eligible for
getting SOD facility, bank asks him to give a power of attorney to
the bank for receiving all kinds of payment for the work. He can
get up to 50%of the amount of the work that he has to done. But
he has to submit his collateral security for that. He gets 50% SOD
facility against his collateral security. After getting power of
attorney bank sends a request letter to the authority by which the
work has been issued. Then that authority sends a letter to the
bank that they will make all of the payment of the party through
the bank. After getting the letter the bank credits the SOD amount
to the customers current account. When bank gets payment from
the authority, they make a ratio and cut off their amount from that
payment.
The following charge documents are taken from the customer:

 D.P (promissory note) note: Three types
1) Single DP note
2) Joint DP note
3) Joint and several DP note
 Letter of arrangement
 Letter of continuity
 Letter of lien for advances against share, stocks and security.
4.15.2 Cash Credit (CC):

Cash credit is the favorite mode of borrowing by traders,
industrialist etc. for meeting their working capital. Cash credit is a
kind of continuous overdraft. For cash credit facilities Banks allow a
limit for his customer. Cash credit facilities is given for one year.

In Banking system cash credit is given for two purpose .The
purpose are as following:
 Working capital
 Trading purpose
It is a favorite mode of advance for the customer. For cash credit

facility bank allow a limit for his customer. The customer can make
continuous transaction with in that limit. CC is given for one year.
After one year the customer can renew his CC facility.
Interest:
For CC facility interest is counted daily basis. That means customer
has to only that amount of interest which is outstanding in his CC
account. Interest is cut off from customer current in tram wise.
Mode of security:
For CC banks take two type of security. These are as following:
 Pledge
 Hypothecation
Pledge:
Pledge means the customer transfer his goods to the bank. But the
ownership ship of the goods is in his position. That means only
transfer the goods to the banks but not ownership.
Hypothecation:
It is a kind of security where neither the ownership nor the position
of the goods is transfer to the bank.
 But nowadays banks do not give any CC facility without any
extra security like Land, Building etc .The security has been
taken by Bank as equitable mortgage.
 If any person wants to get any CC facility from the Bank, he
has to submit an application to the Bank by giving details
condition of his business.
 This has to done in a printed form of the bank.

 In this form the customer mention the limit of his Cc facility,
which is he wants to get from the bank. He also gives details
about security.
 After getting the application bank analysis the application very
carefully.
 If the bank satisfy about his security, bank takes a survey
about the security.
 The banks have some enlisted surveyor. After getting survey
report, if bank personals are satisfied about the security, they
will give CC facility to the customer.
In branch level bank cannot give more then 30lac taka to his customer.
But if bank want give more then 30 lacs. The branch has to get
approval from head office of the bank.
For giving CC bank take following charge document:

1. DP note
2. Letter of arrangement
3. Letter of continuity
4. Letter of hypothecation of goods
5. Stock of goods report
6. Personal guarantee of all the director of the company
7. Deed on additional charge on the fixed assets of the company
8. Form for filling charge with register of joint stock companies
9. Resolution of board of directors
10. Insurance policy for stock
In CC facility bank only allow 50% credit facility of the stock that
the customer has been pledge or hypothecation. Bank gives CC
only for one year. After one year customer has to renewal it.
4.15.3. Export Cash Credit (ECC):

1. ECC to Whom:
ECC facility is allowed to an exporter to finance the purchase
and/or manufacturing of the goods to be shipped by him.

2. Consideration for ECC:
In following this loan, the following should also be taken into
consideration:
a. Bank must obtain insurance cover under Export Credit
Guarantee Scheme of Sadharan Bima Corporation (both
pre-shipment and post-shipment).
b. ECC is utilized solely for the purchase of goods to be
shipped under letter of credit/contract.
c. Goods purchased or under manufacture under this
arrangement are kept separate from all other goods, and
a Stock Report signed by the parties and duly certified by
the shippers or the Clearing Agents or an Officer of the
Bank is submitted to the Bank.
d. Goods are kept fully insured against all risks.
e. Shipment is made through the Clearing Agent approved
by the Bank.
f. Goods under ECC must comply with the terms of the
credit/ contract.
g. No advance is obtained from any other Bank, on the
goods purchased or manufactured with the amount
advanced under the ECC.
h. The original letter of credit/contract is stamped “Under
our Lien” and retained with the Bank so that the
exporters do not avail similar facility with any other Bank
against the same letter of credit.
3. Charge Documents:
Obtain the following charge documents from the exporter:
a. Demand Promissory Note
b. Letter of Lien for ECC
c. Letter of Pledge/hypothecation
d. Letter of Arrangement
e. Letter of Disbursement
f. Letter of Partnership alongwith Registered Partnership
Deed in case of Partnership Accounts.

g. Resolution alongwith Memorandum & Articles of
Association of the Company in case of accounts of Limited
Company. In case of Corporation, resolution of the Board
alongwith Charter.
h. An undertaking from the Directors of the Public Company
to obtain prior clearance from the Bank before declaring
any
4.16 Loan:
In case of loan, the banker advances a lump sum for a certain
period at an agreed rate of interest. The entire amount is paid
an occasion either in cash or by credit in this current account,
which he can draw at any time. The interest is charged for the
full amount sanctioned whether he withdraws the money from
his account of not. The loan may be repaid in installments or
at expire of a certain period. Loan may be demand loan or a
term loan.
Advance made in a lump sum repayment either on fixed

installment basis or in lump sum on subsequent debit except
by way of interest, incidental charge, etc. is called a loan.
After creation of loan there will be only repayment by
borrower. The loan may be repaid in installment or at expire
of a certain period.
Loans are normally allowed to those parties who have either

fixed source of income who desire to pay it in lump sum.
Banks gives different types of loan to his party.
4.17 Types of loans:

The different types of loan that banks give to his party are as
following:
1. Term loan: a) Industrial
b) Transport loan
c) House building loan
d) Others
2. Staff house building loan

3. Loan against trust receipt
4. Staff loan against PF (Provident Fund)
5. Consumer credit
6. LIM (Loan against Imported Merchandise)
7. Loan general/Demand loan
4.17.1 Term Loans:

Types of Loans Characteristics
a. It is given for 3 years at equal monthly installment

Industrial Loans b. 
Grace Period is allowed depending on types of project
c. To facilitate the industrial growth this is given
a. This is given to accelerate the transport facility

nationwide
Transport Loans b. It is given for 3 years at equal monthly installment
c. Others conditions are almost same as the Industrial
Loans
a. This Loan is give for the construction of dwelling house.
House Building b. It is given for 3 years at equal monthly installment

Loans c. Term of this loan is only three years.
d. This Loan is not given frequently.
Others Loan – Actually Agricultural loan is not given from this branch of
Including IFIC Bank but the all other items excluding the mentioned
agricultural Loan above will go under this head of term loans.
4.17.2 Staff house Building Loan (SHBL):

Every employee is eligible to get SHBL, which is 120 times of his
basic salary. For SHBL, the staff has to apply in the prescribed
form of the bank and that form must be send to the head office
through manager of the respective branch by recommendation.
Head office sanction an advice to the manager of the respective
branch with the approval of sanction of SHBL and the term and
condition of the loan.

Grace period – period require to earn visible return

Rate of interest:
Rate of interest is one percent higher then bank rate.
Disbursement of the loan is made through payment order in favor
of the company/person from which the land/building is bought.
Security:
Legal mortgage of that land or flat.
Documents to be obtained:
1. DP note
2. Letter of disbursement
3. Letter of installment
4. Letter of authority for deducting salary
5. Interim guarantee
6. Deed of legal mortgage
7. An undertaking on non-judicial stamp shall be obtained from
the borrower authorizing the bank to realize loan installments
from monthly salary.
8. An undertaking on non-judicial stamp that the bank will have
the right to adjust liability from the service benefits.
Repayment of HSBL loan will start after one year from
disbursement date. The loan has to cut off with in twenty year
from his salary.
4.17.3 Consumer Credit Scheme (CCS):

Eligibility Criteria:
a. The potential borrower must be a national of Bangladesh and
aged at least 18 (eighteen) years.
b. The potential borrower’s employer business or profession, as
the case may be should preferable be located in the same
town/city as his/her residence and lending branch of IFIC
Bank Ltd.
c. The potential borrower must provide his/her permanent
residential address in case he/she is living a rented house/flat.

d. Each prospective borrower must open a Savings Account with
our branch (if not already held).
e. The potential borrower should preferable be a regular Income
Tax and/or other applicable Tax payer. Last Tax paid
assessment certificate prominently indicating TIN should
preferable be submitted with the loan application form.
For service holder:

a. Borrower can be any person employed by a reputed company
as a confirmed employee. He must submit certificate
regarding salary, confirmation and length of service.
b. His minimum monthly take home salary should not be less
than Tk. 5000/- and 3 (three) times of Equated Monthly
Installment (EMI).
c. He must have at least 5 (five) years of employment left.
For Self Employed Person:

A self employed person must be of repute in the respective
profession/business.
a. He must have a net take home income of at least Tk. 10,000/-
per month and 3 (three) times of EMI.
b. He is running his own business for at least 5 (five) years and
has a satisfactory banking relationship with IFIC Bank Ltd.
For defense service personnel:

a. Employer’s certificate should be obtained only from the
commanding officer of borrower’s unit.
b. In case of a solder, the guarantor should not be below the
rank of Junior Commission Officer.
c. The respective unit of the borrower will provide a guarantee
certificate that the borrower will pay the monthly installments
in due time.
All other terms & conditions are same as service holder.
Item Financed:
Domestic Appliances, Office Equipment & Entertainment Equipment

Limit Range:
Tk. 10,000/- to Tk. 7,00,000/-
Loan Amount:
Loan amount will be 80% of the Invoice/Quotation amount.
Down Payment:
Minimum equity contribution will be 20% of the invoice/ quotation
amount which will be realized from the borrower’s Savings
Account.
Interest Rate and Fees:
a. Each set of Application Forms Tk. 30/-
b. Interest rate @ Tk. 14.50 P.A. with quarterly rest.
c. 2% service charge of the loan amount (minimum Tk. 500/-)
will be realized from the borrower’s Savings Accounts.
d. 2% Risk Fund of the loan amount will be realized from the
borrowers’ Savings Account.
Payment Order:
A payment order of the Invoice/Quotation amount will be issued in
fervor of the supplier of the consumer item.
Application Form & Other Forms:
Customer must submit Application Form (Bank’s prescribed form)
duly field in and also submit the following forms,
a. Form A – Letter from the borrower to his/her employer
b. Form B – Employer’s certificate to the Bank
c. Form C – Particulars of guarantor and a letter of guarantee
duly executed from a person acceptable to the Bank.
Photograph:
A recent passport size photograph of the customer (attested by the
employer or the guarantor when customer is a businessman) and
the guarantor (attested by the Gazette Officer).
Delivery Challan & Money Receipt
Borrower must deliver Money Receipt and Delivery Challan of the
asset purchased to the lending.

Repayment Arrangement:
a. The installment shall be payable monthly on or before 7th of
the subsequent month.
b. Post dated cheques of the amount equal to the installment
size (one of each installment) and one undated cheque
(double of installment size) in favour of IFIC Bank Ltd. should
be submitted before disbursement of the loan.
Penal Interest:
Penal Interest for delay payment will be charged @ Tk. 50/- if the
installment is not paid within 15 days from the 7th of each month.
Thereafter, penal interest for delayed payment will be charged @
Tk. 75/- for subsequent delay of each 15 days.
4.17.4 Staff loan against provident fund:

IFIC bank has so long been allowing loan to staff against provident
fund upto 80% of their own contribution adjustable in 24 (twenty
four) equal monthly installments.
We are now pleased to inform you that Management has, of late,
decide to allow loan to staff against their provident fund as per the
following criterion: -
Sl. Criterion P.F. Loan Repayment
No. ceiling period
(Maximum)
i) Employees having less than 5 80% of own 48 equal

years continuous confirmed contribution monthly
service in the Bank installments
ii) Employees having 5 years less 60% of both 48 equal

than 7 years continuous confirmed contribution monthly
service in the Bank installments
iii) Employees having 7 years less 70% of both 48 equal

than 10 years continuous contribution monthly
confirmed service in the Bank installments
iv) Employees having 10 years above 80% of both 48 equal

continuous confirmed service in contribution monthly
the Bank installments
This facility will come into force with immediate effect.
All other terms & conditions will remain unchanged.

4.17.5. Advances (Loans) Against Trust Receipts:
1. Advance Against Trust Receipts:
a. Advance against a Trust Receipt obtained from the customers
are allowed when the documents covering an important
shipment are given (to first class parties only) without
payment.
b. The customer holds the goods or their sale proceeds in trust for
the Bank, till such time, the loan allowed against the Trust
Receipt is fully paid off.
c. The Trust Receipt is a document which creates the Banker’s lien
on the goods and practically amounts to hypothecation of the
proceeds of sale in discharge of the lien.
2. Period Of Trust Receipt:
The period of Trust Receipt may be 30, 60 or 90 days as allowed
by the Head Office. The loan is adjustable within this period. It
should be noted that the sale proceeds of goods held in Trust must
be deposited in the Bank by the borrower irrespective of the period
of the Trust Receipt.
3. Charge Documents:
Obtain the following charge documents allowing the advance:
a. Demand Promissory Note.
b. Trust Receipt.
c. Letter of Arrangement.
d. Letter of Disbursement.
e. Letter of Partnership alongwith Registered Partnership
Deed in case of Partnership Accounts.
f. Resolution along with Memorandum & Articles of
Association of company in case of accounts of Limited
Company. In case of Corporation, resolution of the Board
along with Charter.
g. Personal guarantee of Director in case of limited
company.
h. Insurance Policy covering the goods against all risk with
bank Mortgage clause is obtained where Trust Receipt
facility is allowed against imported goods.
i. The particulars of LIM transactions should be recorded in
LIM Register and LIM liability Ledger.

4.17.6. Advance (Loan) Against Imported Merchandise (LIM):
A. Head Office Approval For LIM:
a. Advance (Loan) against the security of merchandise
imported through the Bank may be allowed with prior
approval from Head Office retaining margin prescribed on
their Landed Cost, depending on their categories and
credit restrictions imposed by the Bangladesh Bank.
b. Branches shall also obtain a letter of undertaking and
indemnity on our standard form from the parties, before
getting the goods cleared through LIM Account.
c. Clearance of the goods should be made through approved
Clearing Agent of the Bank.
B. Points For Consideration In Granting LIM:

The following points must be taken into consideration while
allowing advance against the security of imported goods:
a. Storage of imported goods under LIM facility may be allowed
for specified time as prescribed by Bangladesh Bank within
which period importer should take delivery of the goods
against payment.
b. Generally part-delivery is not allowed from LIM Account. This
may, however, be allowed only on specific request.
4.18 Loan Classification:

Every Bank has to send a quarterly CIB Report to the Bangladesh
Bank for amounts due up to TK.50,000 mentioning the name of the
borrower and the purpose for which loan has been sanctioned and
a monthly statement for the amount due more 1 core Taka.
Bangladesh Bank provides CL (Classification Form) to every bank
for preparing this report. The procedure for loan classification is
given by Bangladesh Bank under BRPD circular no 16, dated
06/12/1998.

According to Bangladesh Bank there are four types of loan:
If any borrower fails to repay his amount or installment within the
following time period then it will fall under the following classification
status.
Types of loan
Classification Continuous loan Demand loan Term loan up Term loan

(C/C; O/D.) (LIM; PAD; FBP; to 5 years above 5 years
IBP)
Less than 3 Less than 3 Less than 6 Less than 12

Unclassified
months months months months
3 months or 3 months or 6 months or 12 months or

Substandard more but less more but less more more
than 6 months than 6 months

Doubtful more but less more but less more more
than 12 months than 12 months

Bad loan
more more more more
Bank should preserve following provisions for continuous, forced, and

term loan.
a) For unclassified loan -------------------------------------1%
b) For substandard loan-------------------------------------20%
c) For doubtful loan-----------------------------------------50%
d) For bad loan---------------------------------------------100%
4.19 Lending Risk Analysis – LRA:

LRA is a very important and vital analysis for deciding whether the
loan proposal is potential or not. Many types of scientific,
mathematical, statistical and managerial tools and devices are
required to perform this analysis. Before LRA the following analysis
were used to analyze the loan proposals.
This branch maintains a prescribed format containing 14 pages for
Lending Risk Analysis, which includes a spreadsheet to analyze a
lot of things. It is not possible to discuss the entire LRA in this
report but the entire framework under which it works has given in
the following manner:

4.19 Decision matrix from LRA:
Select overall risk from matrix
Status 1 2 3 4
A A A A
B B B B
Criteria
C C C C
D D D D
Decision Good Acceptable Marginal Poor
1A - Indicates that the loan is least risky hence it should or could

be given
From the LRA sheet we can calculate the following numbers and
plotting them into the matrix we can arrive into the decision of
lending. The calculated result criteria is as under
1 2 3 4
Business Risk
13 – 19 20 - 26 27 - 34 34 ++
A B C D
Security Risk
-20 ~ -15 -14 ~ 0 0 ~ 10 10 ++
4.20 Issuance of Bank Guarantee:

A. Meaning:
Issuance of Bank Guarantee on behalf of its clients is a common
banking service to be rendered by a commercial bank within the
preview of credit portfolio of the bank. Guarantees are expressed
commitment of the bank to make good any financial loss the beneficiary
of the guarantee may sustain when the party named in the guarantee
on whose behalf the guarantee is issued fails to perform the contract.
B. Purpose:
Commensurate with the need as may be warranted by multifarious
directional ever increasing business activities of its clients a bank may
be required to issue various types of guarantee like: tender bond,
performance bond, advance payment guarantee, investment bank
guarantee and other miscellaneous type to join in a single bond of
surety undertaking direct obligation under the surety bond.

C. Precaution:
Whatever may be the type of the guarantee, before issuance, the
specimen of the guarantee should be thoroughly examined to ascertain
that it has no ambiguity. The issues like (1) the extent of liability
(guarantee amount/interest/charges etc.), (2) validity (contract
period/claim submission period/clause of extension etc.) and (3)
responsibility of the bank (on demand unconditional/at own initiative
etc.) should stand clearly defined.
D. Duration:
Normally a bank issues guarantees for a period not exceeding one year
at a varying percentages of margin and security determined. On the
basis of customer banker relationship and nature of liability undertaken.
A bank may also issue guarantee for longer duration or a continuing
bank guarantee subject to its security aspect well taken care of.
E. Application:
While approached for issuance of a bank guarantee, the branch should
as ask the customer to submit the following papers.
a) A written request for the guarantee specifying the purpose,
amount, period and the security offered.
b) The details of the security other than the cash margin.
c) Specimen of the guarantee (in case a prescribed proforma does
not exit, a specimen may be drafted to suit the requirement
incorporating the amount, tenor and purpose with bank’s
obligation clearly spelled out).
F. Formalities:
While deciding the issue a guarantee, the following should obtained
prior to issuance.
a) Cash margin as may be determined.
b) Counter guarantee signed by the client.
c) Specimen of guarantee duly approved by the customer.
In case the guarantee is covered by any other security other than cash
margin which may generally be following types:
a. Fixed Deposit Receipt.
b. Sanchaya Patras or any other financial obligation.

c. Pledge/hypothecation of goods and procedure of construction
materials/equipment etc.
d. Mortgage of immovable properties.
In such circumstances the legal requirements should be got completed
and other charge documents as may be required in relation on the type
of security should be obtained.
G. Central Bank Rules:

It may be noted that as per directives of the Central Bank, in force,
besides the margin determined on the basis of customer- banker
relationship the uncovered portion of the guarantee is to be got covered
by readily realized security.
H. Records To Be Maintained:
The particulars of the guarantee issued should be recorded in the Letter
of Guarantee Register and Letter of Guarantee margin ledger. Safe-in-
safe-out register should be used for entering the counter guarantee
(indemnity), other charge documents/mortgage documents if any.
Bank gives local guarantee as well as foreign guarantee.

Commission:
Local – 3% of guarantee
Foreign – 2% of guarantee
15% vat on commission
Local guarantee three party:
1. Principle (party)
2. Guarantee (Bank)
3. Beneficiary
Foreign guarantee: Four party:

1. Principal
2. Foreigner
3. Local bank
4. Beneficiary
5. Agent (if any)

Foreign Exchange
5.1 Introduction:
Foreign Exchange Department is international department of Bank.
It deals globally. It facilitates international trade through its
various modes of services. It bridges between importers and
exporters. If the branch is authorized dealer in foreign exchange
market, it can remit foreign exchange from local country to foreign
country. This department mainly deals in foreign currency. This is
why this department is called foreign exchange department.
Some national and international laws regulate functions of this
department. Among these, Foreign Exchange Act, 1947 is for
dealing in foreign exchange business, and Import and Export
Control Act, 1950 is for Documentary Credits (UCPDC – 1993
revision & International Chamber of Commerce Publication no –
500) is also an important law for settlement of terms and
conditions between exporter and importer in international trade.
Governments’ Import &Export policy is another important factors
for import and export operation for banks.
5.2 Import Operation:

Introduction: Import of merchandise essentially involves two
things, bringing of goods physically into the country and remittance
of foreign exchange towards the cost of the merchandise and
services connected with its dispatch to the importer. The first part
is regulated by the ministry of commerce while Bangladesh Bank
regulates the payments for these imports.
Import section helps business and other people to import goods. In
international environment, buyers and sellers are often unknown to
each other. So seller always seek guarantee for the payment for
his goods exported. Here is the role of bank. Bank gives export
guarantee that it will pay for the goods on behalf of the buyer. This
guarantee is called Letter of Credit. Thus the contract between
importer and exporter is given a legal shape by the banker by its
‘Letter of Credit’.
When a buyer goes to import some goods from a foreign buyer, he
request his bank makes payments to the exporter of goods. And
the bank recovers the amount from the importer.

5.3 Importer Categories:
a) Commercial Importer
b) Industrial Importer
c) Leasing Company
d) Actual User
e) Government
5.4 Procedure And Mechanism For L/C Opening:

Issuing documentary credit:
a) The buyer and seller conclude a sales contract providing for
payment by document credit
b) The buyer instructs his bank- the issuing bank- to issue a
credit in favour of the seller (Beneficiary)
c) The Issuing bank ask another bank usually in the country of
the seller, to advise and perhaps also to add its confirmation
to the documentary credit
d) The advising or confirming bank informs the seller that the
credit has been issue
5.4.1 Parties to a documentary credit:

Importer Who applies for L/C
It is the bank which opens/issues a L/C on behalf of
Issuing Bank
the importer.
It is the bank, which adds its confirmation to the credit
Confirming Bank and it, is done at the request of issuing bank.
Confirming bank may or may not be advising bank.
It is the bank through which the L/C is advised to the
exporters. This bank is actually situated in exporters
Advising or
country. It may also assume the role of confirming
Notifying Bank
and/or negotiating bank depending upon the condition
of the credit.
It is the bank, which negotiates the bill and pays the
Negotiating amount of the beneficiary. The advising bank and the
Bank negotiating bank may or may not be the same.
Sometimes it can also be confirming bank.
Paying or It is the bank on which the bill will be drawn (as per
Accepting Bank condition of the credit). Usually it is the issuing bank.
It is the bank, which would reimburse the negotiating
Reimbursing
bank after getting payment – instructions from issuing
bank
bank.

5.4.2 Settlement:
a) The seller sends the documents evidencing the shipment to

the bank where the credit is available
b) After checking the documents meet the credit requirements,

the bank makes payment
c) This bank then sends the documents to the issuing bank
d) The Issuing bank after checking that the documents meet the
credit requirement makes reimbursement in the pre-agreed
manner
e) The issuing bank then sends the documents to the Buyer
f) Reimbursement is obtained in the pre-agreed manner

5.4.3The following diagram brings out clearly the operation of letter of
credit:
sale(1) Contract of
Exporter
London Importer
(Beneficiary) Dhaka
Ships goods to (5) (Applicant)
Forwards Presents Recovers Applies

L/C to Docs and Amount For
(4) Obtains Form Opening
Payment (8) of L/C
Form (2)
(6)
Midland Bank Obtains

Modern Bank
London Reimbursement
Advising/ Form Dhaka
(Issuing Bank)
Negotiating Bank (7)
Opens L/C and sends it to

(3)

5.4.4 Steps for import L/C Operation:
Step 1 - Registration with CCI&E:
1. For engaging in international trade, every trader must be first
registered with the Chief Controller of Import and Export.
2. By paying specified registration fees to the CCI&E. the trader
will get IRC/ERC (Import/Export Registration Certificate), to
open L/C with bank, this IRC is must.
Step 2 - Determination terms of credit:

1. The terms of the letter of credit are depending upon the
contract between the importer and exporter. The terms of the
credit specify the amount of credit, name and address of the
beneficiary and opener, tenor of the bill of exchange, period
and mode of shipment and of destination, nature of credit,
expiry date, name and number of sets of shipping documents
etc.
Step 3 - Application by importer to the banker to open letter of credit:

1. For opening L/C, the importer is required to fill up a prescribed
application form provided by the banker along with some
required documents
Step 4 - Opening of L/C by the bank for the opener:

1. Taking filled up application form from the importer
2. Collects credit report of exporter from exporter’s country
through his foreign correspondence there.
3. Opening bank then issues credit by air mail or cable followed
by credit advice as asked for by the opener through his foreign
correspondent or branch as the case may be, at the place of
beneficiary. The advising bank advises the credit to the
beneficiary on his own form where it is addressed to him or
merely hands on the original credit to the beneficiary if it is so
addressed.

Step 5 – Shipment of goods and submission of documents by exporter:
1. Then exporter ships the goods to the destination of the
importer country
2. Sends the documents to the L/C opening bank through his
negotiating bank. Generally the following documents are sent
to the Opening Banker with L/C:
Step 6 -Lodgment of Documents by the opening Bank from the

negotiating bank:
1. After receiving the documents, the opening banker scrutinizes
the documents. If any discrepancy found, it informs the
importer. If importer accepts the fault, then opening bankers
call importer retiring the document. At this time many thing
can happen. These are indicated in the following:
⇒ Discrepancy found but the importer accepts - no problem
occurs in lodgment.
⇒ Discrepancy found and importer not agreed to accept - In
this case, importer protest and send back all the
documents to the exporter and request his to make in the
specified manner. Here banker is not bound to pay
because the documents send by exporter is not in
accordance with the terms of L/C.
⇒ Documents are OK but importer is willing to retire the
documents - In this case bank is obligated to pay the
price of exported goods. Since importer did not pay for
bill of exchange, this payment by bank is one kind of
credit to the importer and this credit in banking is known
as FORCED PAD.
⇒ Everything is O.K. but importer fails to clear goods from
the port and request bank to clear - In this case banks
clear the goods and takes delivery of the same by paying
customs duty and sales tax etc. So, this expenditure is
debited to the importer’s account and in banking it is
called LIM.

5.4.6 Flow Chart for opening of L/C for importing at a glance:
Following document
Documents Banker examines the
duly signed:
submitted by the liability position of
L/C application form importer. the importer form
LCA form Indent/ Proforma different department
IMP form invoice insurance
Authority to debit
account D.P Note
Credit report of the

exporter asked from
the negotiating bank
1. Original IRC submitted to the bank

L/C opened and sends to 2. TIN certificate
advising Bank through mail or 3. Trade license (up to date( copy
telex
4. Chamber membership certificate (copy)
Sanctioned by the Bangladesh

Bank
Positive Report Negative Report
Send documents

5.4.7 Insurance coverage:
- ICC
- ND (Non-delivery)
- War
- SRCC (Srike Riot, Civil Commotion)
5.4.8 Guide Lines of opening L/C’s:

• Import policy & export policy
• Foreign Exchange Regulation Act
• Foreign Exchange Circular
• Public Notices
5.4.9 Requirements of an Importer:

1. Current account maintained with the bank
2. IRC (Import Registration Certificate)
3. TIN (Tax Identification Number)
4. Membership certificate from enlisted business concerns
• In a year, TIN & membership certificate must be submitted
to bank
5.4.10 Letter of Credit Proposal:

It includes:
• Liability position of concerned party
• Liability position of Associates
• Total liability
• Proposal L/C
• Grand Total liability
• Remark about margin, amount, account, goods, basis
repayment
• Approval

5.4.11 L/Cs SET:
1. Demand promissory note-02 copies
2. L/C application-01 copies
(Application & agreement for confirmed irrevocable without
recourse to drawers L/C)
3. LCA form – 6 copies make a set
(LCA application form in lieu of import license)
4. Insurance cover note with money receipt
5. Request letter for opening L/C- 01 copies
6. Declaration of an importer – 01 copies
7. Authority to debit account – 01 copies
8. Request letter for amendment – 01 copies
9. Pro-forma invoice
10. IMP form (Foreign exchange regulation act 1947 – 04 copies
make a set)
11. Debit voucher (corresponding credit)
12. L/C copy (06 copies)
• 02 copies to advising bank, 01 for advising bank & other for
exporter
• 02 copies to importer, 01 copy as officer advising copy & other
customs clearance
13. L/C forwarding letter 01 copies
14. Reimbursement authorization – 03 copies
5.4.12 L/C application form:

It includes:
1. L/C No.
2. Name & full address of openers
3. Name & full address of beneficiary
4. Amount of foreign currency
5. Nature of goods imported

6. Name of indentor
7. Document accompanied
8. Name of insurance company
9. Shipment information
10. Approval (for use of bank only)
11. Terms and conditions (overleaf)
5.4.13. Letter of Credit:

It includes-
1. Irrecoverable documentary credits No.
2. Name of advising bank
3. Beneficiary’s name
4. Name of Applicant
5. Amount specified
6. Shipment
7. Expiry
8. Accompanied documents
a) Invoice
b) Full set of (Shipped on board/ocean bill of lading/truck
receipts)
c) Insurance cover
1. Shipment information
I) Shipment from ................ to ...................
ii) Partial shipment allowed/prohibited
iii) Transshipment allowed/prohibited
1. Special conditions
2. Instructions for negotiating bank
3. Other terms and conditions

5.4.14 Accounting Treatment:
Contra voucher (2 copies make a set)
DR: Customers liability L/C cash [copy for accounts & other for
file]
Con. CR: Bankers liability L/C cash
(It is taken in nearest thousand)
DR: Party accounts (3 copies)
• 1 copy for accounts
• 1 copy for party
• 1 copy for file
CR: Sundry deposit- Margin on L/C cash (2 copies)
• 1 copy for accounts
• 1 copy for file
Income A/C; Commission; L/C cash (1 copy)
+
Income A/C; other Receipt; TLX recoveries (1 copy)
+
Income A/C; Other Receipts; Postage recoveries (1 copy)
5.5 Lodgment of Import Bill:

Accounting Treatment:
Contra voucher
CR: Customers liability L/C cash
Contra DR: Bankers liability L/C cash
DR: PAD cash (Inv. Value)

CR: IFIC Bank General A/C – H/O
DR: PAD/Party A/C (Interest from value date to lodgment date)
CR: Income A/C Intt. Received on PAD Cash.

5.6 Retirement of Import Document:
On receipt of information letter the importer approaches the bank
for retirement of the documents against full payment of bank’s
dues including interest on PAD and other charges. After recovery of
dues bank will handover the documents to the party by endorsing
the documents in favour of the party.
Dr. Party A/C/LIM/T.R. Loan/Other Loan
(PAD created amt. + Intt. on PAD lodgment date to retirement
date- Margin on L/C cash- Intt. Payable on Margin)
Dr. Sundry deposit margin on L/C Cash + Intt. Payable on margin
(if applicable).
Cr. PAD Cash
CR: Income A/C Intt. Received on PAD (From lodgment date to
retirement date)
After retirement the following particulars to be noted in the PAD
retirement register: Date, PAD no. L/C No., Name of the Party, PAD
Amt. Interest, Others, Total amt., L/C margin, Net amt.
5.7 Shipping Guarantee:

When needed: In absence of original documents for clearance of
goods
Procedure:
1. Party application
2. Submission of invoice and transport receipt
3. Scrutinize of submitted non-negotiable copy
4. Proper voucher making
5. Certified seal on non-negotiable copy
6. Letter of authorization/No objection certificate
7. Letter of guarantee to the shipping line

Mentioning:
• B/L No.
• Port of lading
• Brief description
• Marks
Joint seal/signature
Party’s signature & seal
and
For International Finance Investment
and commerce Bank Limited
Motijheel, Dhaka
Authorized Signature
Back side of L/G Form:
Please deliver to the order of
M/S ............................................................
For International Finance Investment
and commerce Bank Limited
Motijheel, Dhaka
Authorized Signature
Accounting Process:
DR: Party A/C
CR: Sundry deposit margin on L/C Cash
CR: Income A/C Commission on PAD Cash
When original documents come to out hand, then
DR: Sundry deposit margin on L/C Cash
CR: IFIC Bank General Account – H.O
5.8 Export Operation:

Bangladesh exports a large quantity of goods and services to
foreign households. Readymade textile garments (both knitted and
woven), Jute, Jute-made products, frozen shrimps, tea are the

main goods that Bangladeshi exporters exports to foreign
countries. Garments sector is the largest sector that exports the
lion share of the country’s export. Bangladesh exports most of its
readymade garments products to U.S.A and European Community
(EC) countries. Bangladesh exports about 40% of its readymade
garments products to U.S.A. Most of the exporters who export
through IFIC are readymade garment exporters. They open export
L/Cs here to export their goods, which they open against the
import L/Cs opened by their foreign importers.
Export L/C operation is just reverse of the import L/C operation.
For exporting goods by the local exporter, bank may act as
advising banks and collecting bank (negotiable bank) for the
exporter.
a. As an advising bank:
It receives documents from the foreign importer and hands it over
to the exporter. Sometimes it adds confirmation on the L/C on
request from the Opening Bank. By adding confirmation, it
assumes the responsibility to make payment to the exporter.
b. As Negotiating Bank:
It negotiates the bills and other shipping documents in favor of the
exporter. That is, it collects the proceeds of the export-bill from the
drawee and credits the exporter’s account for the same. Collection
proceed from the export bill is deposited in the bank’s NOSTRO
account in the importer’s country. Sometimes the bank purchases
the bills at discount and waits till maturity of the bill. When the bill
matures, bank presents it to the drawee to encash it.
In our country, Export and Import operation of bank is very much
related with one another because of use of Back to Back and
maturity of payment for Back-to-Back L/C is set in such that it can
be paid out of export proceeds. So export and import sections
works as one unit. These two operations can hardly be separated
from one another in the branch.
5.9 Back to Back L/C:

For procurement of raw materials and accessories banks
sometimes provide finance by opening Back to Back L/C on
strength of the L/C received by its customer (exporter) for export
from Bangladesh. Back to Back L/Cs are frequently used for export
of ready made garments. Back to Back L/C does not involve cash
outlay the pre-shipment stage. It constitutes a commitment to pay

when the goods are shipped as per the terms of the credit. The
original L/C and lien on imported goods constitute the bank’s
security.
5.9.1 Documents submitted at the time of BB L/C opening:
1. Demand promissory note – 02 copies
2. L/C application – 01 copies
(Application & Agreement for confirmed irrecoverable without
recourse to drawers L/C)
3. LCA form – 06 copies make a set
(LCA application form in lieu of import license)
4. Insurance cover note with money receipt
5. Request letter of opening L/C – 01 copies
6. Declaration of an importer – 01 copies
7. Authority to debit account – 01 copies
8. Request letter for amendment – 01 copies (Necessary for
amendment only)
9. Pro-forma invoice
10. IMP form (Foreign exchange regulation act. 1947-04 copies
make a set).
5.9.2. After BB L/C Opening:

1. L/C copy (06 copies)
• 02 copies advising bank – 01 for advising bank & other
exporter
• 02 copies to importer– 01 as officer copy & other for customs
clearance
• 02 copies for opening bank– 01 copy as office copy & other for
CCI & E
2. L/C forwarding letter – 01 copies
3. Reimbursement authorization – 03 copies
5.9.3 Voucher:
Contra voucher
DR: Customer’s liability L/C BB

Contra CR: Banker’s liability L/C BB
LODGMENT
Contra voucher
CR: Customer’s liability L/C BB
Contra DR: Banker’s liability L/C BB
IFDBC (Inward Foreign Documentary Bill for Collection) Creation
Contra voucher
DR: Foreign Bills Lodged A/C
Contra CR: Foreign Bills Collection A/C
5.9.4 BB L/C Payment:

Contra voucher
CR: Foreign Bills Lodged A/C
Contra DR: Foreign Bills Collection A/C
Debit voucher (Double currency voucher)
DR: Exporter’s F.C A/C
Credit voucher (Double currency voucher)
CR: IFIC Bank General A/C – ILO
(It is supported by IBETCA)
5.11. PAD (EDF):
At the period of creation
DR: PAD (EDF)
CR: IFIC Bank General A/C – H.O
(Supported by IBETCA)
At the period of realization:
DR: IFIC Bank General A/C – H.O
(Supported by IBETCA)
CR: PAD (EDF)
DR: EFC A/C
CR: IFIC Bank General A/C- H.O
+
CR: Income A/C – Interest Others

5.11 Forced PAD:
When needed: Due to failure of export shipment
Approval: Post facto approval is needed from Exchange
Control Policy department, Bangladesh Bank
Intimation: Intimation is sent to member custom, National
Board of Revenue
Payment: Payment is given by debiting PAD A/C
Amount = Invoice value + Interest charged
At the period of creation:

DR: PAD amt. (forced)
CR: IBDA (sent by H.O & responded by branch)
At the period of realization:
DR: Exporter’s EC A/C Notional Rate
DR: IFIC Bank General A/C- H.O [At ready buying rate]
CR: PAD (FORCED) [TT buying rate]
+
CR: IFIC Bank General A/C- H.O
(amt. = 20% exchange gain)
+
CR: Income A/C- Exchange gain
(amt. = 80% exchange gain)
Total Gain: Foreign Currency (in US$) * (Ready buying rate = TT
buying rate)
5.12 Export Negotiation:

If the export documents are in order then the concept of FDBP
emerges.
FDBP Amount = Document value – BB L/C Finance – 5% of doc
value as load.
• 5% of doc. Value is taken as load amount for payment of
interest against BB L/C

DR: FDBP A/C
CR: Party A/C (CD)
+
STD A/C Used as inking find)
+
Income A/C – Postage Recovery (DHI charge)
+
Sundry deposit A/C – Sundry Creditors
(It covers both income tax and local commission)
Local Commission Payment:
DR: Sundry Deposit A/C - Sundry Creditors
CR: PO (In favour of concerned buying house)
+
Income A/C – Commission on Remittance Inland
Buying house commission: Usually commission rate is
mentioned in the back page of L/Cs supported by transfer mechanism.
5.13 FDBC (Foreign Documentary Bill for Collection):

If export documents are not in order then banker sends the
documents for collection.
FDBC amount = Draft amount
Accounting Process:
At the time of creation:
Contra Voucher
DR: Foreign Documentary Bills Receivable
Con CR: FDBC for collection
At the time of realization of export bill:
Contra Voucher
CR: Foreign Documentary Bills Receivable
Con. DR: FDBC for collection
DR: IFIC Bank General A/C- H.O (100%)

CR: EFC – 80%
+
FCAD – 50%
+
Other ........... 15%
• CD A/C
• STD A/C
• DHL Charge – Tk. 1500
• Local Commission (if any)
• Tax (if any)
• Handling Charge – Tk. 500
Tax: For garments Doc Value * 0.25
For others, Doc Value * 0.50%
Exchange Gain Calculation:

Total Exchange Gain = FDBP value x (debating rate purchased rate)
Or = FDBC value x (debating rate purchased rate)
Earning of H.O (Ex. Gain) = FDBP x 20%
5.14 L/C under EDF:

1. Exporter development Fund is created by Bangladesh Bank to
give encourage to the exporter in Bangladesh.
2. Generally Back-to-Back L/C is Usance L/C that is here bill of
exchange is payable after some maturity date say 90 or 120
days after the date of acceptance/negotiation. But some
foreign seller may require sight payment. Here import L/C
matures first. In that case Bangladesh Bank gives the fund to
the bank to pay the price of imported goods in favor of the
local purchaser of raw materials. When export proceeds come,
first Bangladesh Bank loan to the importer is adjusted and
remaining part goes to the importer of raw materials.

5.15 Cash L/C:
1. Generally bank requires 25% margin for opening cash L/C.
2. The rest 75% will be recovered after reaching the Bill of
Exchange from the foreign exporter.
5.16 Nature of Credit:
a. All import credit is generally documentary credit that is

bill of exchange must contain documents to the title of
goods. Mere presentation of B/E by exporter is not sufficient
Document & for honoring the bill in case of Documentary credit.
clean credit
b. Clean credit requires no document with B/E for it’s
honoring. Clean L/C is not allowed in Bangladesh except with
the prior approval of the Exchange Control of the country.
a. In revocable L/C, the opener of L/C can anytime withdraw
his commitment to honor the Bill of Exchange of the
Revocable & Exporter.
Irrevocable b. In case of irrevocable L/C, banker cannot withdraw his
obligation. Here his commitment is legal obligation. In
international trade, only irrevocable L/C is used.
a. Sometimes the exporter may not rely on the L/C of our
bank. Exporter requires the L/C to be confirmed by another
bank situated in his country. Then on request of issuing
Bank, any bank in exporter’s country gives guarantee about
Adding the payment. This is called Confirming Bank. Generally this
Confirmation confirming bank is Advising Bank.
b. By adding such confirmation, confirming banks
undertakes the liability to honor the Bill of Exchange of
exporter and for this it debit the account of Issuing Bank with
it.
a. Sometimes, the importer may require amendment to be
Amendment of made in L/C.
Credit b. But this amendment must be made with the consent of
exporter otherwise amendment will have no validity.
Validity and a. All L/C must mention the expiry date of L/C within which
Expiry of documents for payment/acceptance/negotiation must be
Credit presented.
b. This date must exceed the last date of shipment.
c. L/C must also stipulate a specified time period after the
date of issuance of the bill of lading or other shipping
documents, during which presentation of documents for
payment / acceptance / negotiation must be made.
d. In the absence of a specified period of time being
stipulated the period will be assumed to be 21 days from the

date of the bill of lading.
5.17 Kinds of Credits occurred in L/C operation:

During L/C operation some Credit facilities evolved to the importer
and exporter. This credit facilitates are mentioned below
a. It is given to the exporter for processing of raw

Export Cash materials like light, gas, water, rent etc. to manufacture
Credit the goods for export.
(ECC) b. This is pre-shipment credit and short-term in
nature.
a. This loan is related to cash L/C.
b. After opening L/C, foreign exporter sends goods to
the importer and a bill of exchange along with shipping
Payment documents to the L/C opening bank. Upon receiving bill of
Against exchange and other documents, bank immediately make
Document payment to the exporter if no discrepancies are found on
(PAD) the shipping documents. Bank hands over the shipping
documents to the importer only after his recovery of the
payment from the importer. Since bank pay to exporter
on the basis of shipping documents, this is called Payment
Against Documents.
a. LIM is occurred from PAD.
b. After payment to the exporter on the basis of
shipping documents, bank recovers the amount from the
importer. Sometimes for financial crisis, importer fails to
pay the amount stipulated in bill of exchange to the
Loan Against Opening Bank. In this case, he request to the bank to
Imported treat PAD as credit and handover the shipping documents
Merchandise to him so that he can clear the imported goods from the
(LIM) port. Then banks convert the PAD to regular credit and
hand over the documents to the importer, and take the
imported goods as security for the loan. Since this loan is
given on the imported goods, this is called Loan against
Imported Merchandise. Duration of this loan is one month
only. If the loan is no repaid after one month, it is treated
as forced LIM.
a. This loan is given to the exporter.
b. When local exporter gets a Usance bill of exchange,
he has to wait until the maturity of the bill for receiving
Foreign Bills
payment. Sometimes he cannot wait until maturity and
Purchased
request the bank to purchase it. If bank decides to
(FBP)
purchase it, then it makes payments to the exporter
against the bill of exchange. Upon maturity, banks
present it to the drawee of the bill for encashment. Bank
purchases it at discount.

a. When L/C opener has no sufficient fund to purchase
Foreign Exchange to open L/C, then bank provides him
IP Loan credit to purchase necessary foreign exchange under the
WES/SEM. This loan is called Import Loan under
WES/SEM or IP loan.
5.18 Inland L/C Operation:

Inland L/C operation is same as Import/Export L/C operation. It
opens L/C on request from the buyer in favor of the seller. That is,
it undertakes the responsibility to make payments to the seller on
behalf of the buyer. Most of the inland L/C is ‘Back to Back L/C’ and
currency involved is denominated in foreign currency (Dollar or
Pound).
5.19 Foreign Remittance Department:

This bank is authorized dealer to deal in foreign exchange
business. As an authorized dealer, a bank must provide some
services to the clients regarding foreign exchange and this
department provides these services.
The basic function of this department are outward and inward
remittance of foreign exchange from one country to another
country. In the process of providing this remittance service, it sells
and buys foreign currency. The conversion of one currency into
another takes place at an agreed rate of exchange, which the
banker quotes, one for buying and another for selling. In such
transactions the foreign currencies are like any other commodities
offered for sales and purchase, the cost (convention value) being
paid by the buyer in home currency, the legal tender.

5.19.1 The remittance process involves the following four modes
Bank sell Dollar / Pound for using in abroad by the
purchaser. The maximum amount of such sell is
Sell mentioned in the Bangladesh Bank publication of
Cash ‘Convertibility of Taka for Currency Transactions in
Remittance Bangladesh’.
Dollar/
Pound Bank can purchase dollar from resident and non –
Purcha resident Bangladeshi and Foreigner. Most dollars
se purchased comes from realization of Export Bill of
Exchange.
TC is useful to traveler abroad. Customers can
Issue encash the TC in abroad from the drawee bank. TC
of TC is alternative to holding cash and it provides better
security than holding cash in hand.
Traveler’s If any unused leaf of TC is surrendered bank buys
Buying
Cheque it from the customer. All payments are made in
Of TC local currency. Banks generally buy only those TC.
(TC)
This bank for collection receives unused leaves of
TC for
traveler’s cheque issued by another banks.
collecti
Generally it takes 21 days for collection and
on
customer can draw cash after one month.
It remits fund by tested TT via its foreign

Outwar
correspondence bank in which it is maintaining its
d TT
Telex NOSTRO Account.
Transfer It also makes payment according to telegraphic
Incomi
message of its foreign correspondence bank from
ng TT
the corresponding VOSTRO Account.
Bank issue Demand Draft in favor of purchaser or any other

according to instruction of purchaser. The payee can collect
Foreign
it for the drawee bank in which the Issuing bank of Demand
Demand
Draft holds its NOSTRO Account. Bank also makes payment
Draft
on DD drawn on this bank by its foreign correspondence
bank through the VOSTRO Account.
In these processes of remittance, bank must have to make profit

as a business institution. Profit is made in two ways –
a) Commission charged
b) Difference in the buying and selling rate.

5.19.2 Inward Remittance:
In this case foreign currency is received from foreign
correspondents in shape of T.T., D.D, or M.T which are drawn on.
In such cases, the following vouchers to be passed: Rate- T.T.
clean buying rate.
DR: IFIC Bank General A/C – H.O.
CR: Customers A/C
While purchasing cash currency the following entries have to be
passed
DR: Foreign Currency in Hand
CR: Customer A/C
(O.D Buying rate to be applied)
5.19.3 Outward Remittance:

In this case foreign currency goes to abroad in the form of T.T, D.D
or M.T against Bangladesh Bank approval.
In such cases vouchers to be passed are as under:
DR: Customer A/C : T.T OD selling rate
CR: IFIC Bank General A/C – H.O: to be applied
In case sale the following vouchers to be passed:
DR: Customer A/C
CR: Foreign Currency in Hand
5.19.4 Insurance of T.C/Cash dollar and endorsement:

• Maximum travel quota allowed in a calendar year up to US$
3000 for other than SAARC countries and Myanmar against
confirm air ticket.
• In SAARC countries and Myanmar is US$ 1000 by air & 500 by
land.

5.19.5 For T.C Sale:
I) DR: C/D A/C or cash : Selling Cash & T.C
CR: WES Fund purchase A/C : Rate to be applied
+
CR: Income A/C – Commission
ii) DR: F.C Fund A/C : Notional Rate
For T.C Settlement, authorize, AMEX, NY, USA to debit our A/C
along with purchase agreement.
5.19.6 For Cash (US Dollar/pound) Sale:

i) DR: C/D A/C or cash : Selling Cash & T.C
CR: WES Fund purchase A/C : Rate to be applied
CR: Foreign Currency in Hand WES
T.C or Cash issued by debiting F.CA.D A/C
5.19.7 For T.C Sale:

i) DR: F.C Fund A/C : Notional Rate
CR: FC Fund A/C
DR: Cash or C/D SB A/C

(For Settlement)
For Cash sale

i) DR: F.C.A.D A/C
CR: Foreign Currency in Hand WES

5.19.8. Foreign Bill Purchased (FBP):
DR: Foreign Bill Purchased
CR: C/D or Branch (IBCA)
- Instruments to be sent to AMEX, NY through R.I., if drawn on NY
- Other currencies instrument to be sent directly to the respective
Bank or to out correspondent.
5.19.9 Foreign Bill for Collection (FBC):

Instruments to be sent for collection as above procedure on
realization entries to be passed as under:
CR: C/D or Branch (IBCA)
Purchase of Cash of Dollar from other Bank
i) DR: WES Fund purchase A/C
CR: Balance with Bangladesh Bank
(Bangladesh Bank Cheque issued)
ii) DR: Foreign Currency in Hand WES: Notional Rate
CR: F.C Fund A/C
F.C Fund Transferred to Head Office

i) DR: F.C Fund A/C
ii) DR: F.C Fund A/C : Mid Rate

CR: WES Fund Purchase A/C: T.T Clean Rate
CR: Income A/C – Others

5.20 Miscellaneous Services by this Department:
Students who are desirous to study abroad can open file in the
Student File bank. By opening this file, bank assures the remittance of funds
in abroad for study.
‘Non –resident Investors’ Taka Account is account
NRIT
Account Non-resident Bangladeshi can deposit foreign currency for
investment in security of stock exchanges.
Foreign Currency accounts opened in the names of Bangladeshi
F.C. nationals or persons of Bangladeshi origin working or self-
Account employed abroad can now are maintained as long as the
account holders desire.
Stands for Non-resident Foreign Currency Deposit
NFCD Eligible persons may open such accounts even after their return
to Bangladesh, within six months of their arrival.
Stands for Resident Foreign Currency Accounts
RFCD Persons ordinarily resident in Bangladesh may maintain foreign
Accounts currency accounts with foreign exchange brought in at the time
of their return to Bangladesh from visit abroad. Balance of such
accounts is freely remittable abroad.
5.21 Opening of F.C Account:

Requirements:
1. Application
2. Employers certificate or any confirmation certificate/job
certificate
3. Photograph (one copy)
4. Nominee’s Application form along with Nominee’s photograph
(02 copies)
If Applicant wants to open his/her account wish cash US
Dollar/Pound entries to be passed as under:
CR: FCAD A/C No. ................. of ............ Notional Rate
5.22 OPERATION OF F.C A/C:

A. For depositing cash foreign exchange:

B. For depositing foreign cheque/D.D/T.C etc:
DR: Foreign Bill Purchased
For collection instruments on receipt of credit advice from foreign
correspondent the following entries to passed:
CR: Foreign Bill Purchased
C. For T.T and other instruments drawn on IFIC Bank Ltd.:
CR: FCAD A/C No. ................. Of ............
5.23 NFCD ACCOUNT(Non-resident Foreign currency deposit):

A. Procedure of opening NFCD A/C
• Opening NFCD A/C from F.C A/C
DR: FCAD A/C
CR: NFCD A/C
(NFCD receipt to be issued)
on maturity, interest will be paid as under-
For interest:
i) DR: F.C Fund A/C
CR: NFCD A/C
ii) DR: Interest paid on NFCD A/C

CR: WES Fund Purchase A/C
At the time of encashment:

i) DR: NFCD A/C : Notional Rate
CR: FCAD A/C
ii) DR: FCAD A/C : Notional Rate
CR: F.C Fund A/C
iii) DR: WES Fund Purchase A/C: TT/OB Buying Rate
CR: Customer’s A/C

CONCLUSION AND RECOMMENDATION
6.1 Conclusion:
During the three months internship program at Motijheel Branch,
almost all the desks have been observed more or loss. This internship
program, in fast, has been arranged for gaining knowledge of practical
banking and to compare this practical knowledge with theoretical
knowledge. Comparing practical knowledge with theoretical involves
identification of weakness in the branch activities and making
recommendations for solving the weakness identified. Though all
departments and sections are covered in the internship programme, it
is not possible to go to the depth of each activities of branch because of
time limitation. So, objectives of this internship programme have not
been fulfilled with complete satisfaction. However, highest effort has
been given to achieve the objectives the internship programme.
During the internship, it is found that the branch provides all the
conventional banking services as well as some specialized financing
activities to the economy. Foreign exchange services department the
largest department of the branch in terms of manpower and profit
earned. In this year, it earns more than 60% of branch’s total profit.
Thus by providing this various services, Motijheel Branch, IFIC Bank is
playing an important in the banking system and in the payment system
of Bangladesh.
6.2 Observation:
Though I am not in any position to provide any assistance for the
betterment of this branch, but I am expressing my taste from the three
months observation:
i. Bank can more flexible on customer service. It can introduce
credit card, increase consumer credit scheme etc. Actually
service diversification is mandatory to survive in the
competitive atmosphere.
ii. Lending processing is more or less cumber some and time
consuming. All the necessary steps are needed to be
processed through head office. If it is possible to minimize
consumer will be benefited.
iii. In the modern information era the branch badly needs the
interest facility for faster communication. By introduction this
ultimately branch and customer both will be benefited.

iv. About eighty employees for a branch that deals one hundred
voucher (Average) per day is seemed over employed to me.
Operating cost of this branch is one of the important reasons
the cost of fund.
v. Maximum employees don’t have any proper training in
banking. It is better for the employees if they are offered
training session to be familiar with the bank’s custom.
6.3 Recommendation:
Although this branch is making huge amount of profit and
generating large volume of deposit, a number of problems have
been detected while working this branch. These problems along
with the recommendations for solving them are stated here.
6.3.1 Speed up processing of loan application:

Processing of terms loan takes at least three – six months and
short- term loan takes about one month in the branch. Most of this
time is spent for correspondence between Head Office and Branch.
In developed economy, banking system takes on average 3-8
weeks for processing term loan and 7-15 days for short- term loan.
If loan processing time is lengthy, it will not get good borrower. So
the branch manager should be given more power to sanction loan.
This power can eliminate the time, which would be lapsed in
correspondence between Head Office and Branch. Branch should
have independent appraiser for appraising term loan proposal. Now
term loan is appraised by Head Office appraiser.
6.3.2 Bank should immediately enter into the credit card market:
This bank does not have any plan to enter into the Credit Card
Market. It is well versed that tomorrow’s payment will be consisted
of only plastic money (Credit Card). A large part of business
transaction will be done by credit card in near future. In western
world, more than 50% of transactions are in credit card. If this
bank does not prepare from now on, it cannot compete in the
future market. So, the branch should give special attention to the
introduction of Credit Card.

6.3.3 Introduction modern technology:
With out using modern technology no bank can even think of
remaining in the business in near future. So the bank must decide
right now how it can equip its branches with modern technology.
Use of modern technology in one sense can increase cost but
another sense it increases productivity highly and it attract big
clients. It can introduce ATM services in branch. Use of automatic
machine like cash counter machine, ATM brings speed in banking
services.
6.3.4 Information System should be developed:

For information transfer, branch uses primitive ways of telex,
messenger and personal visit. It makes correspondence with the
head office by peon or orderly. For international correspondence
the branch uses telex machine, which is very costly. And in the
branch, manager has to visit specific desk for collecting
information. Paper communication is too involved between
manager and employees. But branch can use INTERNATE for both
local and international correspondence. E-mail can reduce the telex
cost substantially. Within the branch, they can use computerized
information system for correspondence between manager and
employees. Bank should take urgent decision to create own WEB
Page in INTERNATE so that it can communicate with others very
quickly.
6.3.5 Development of human resources:

Human resource is another sector for the branch to be developed
urgently. Human resources, in the branch, are not equipped with
adequate banking knowledge. Some of the human resources are
lack of basic knowledge regarding money, banking finance and
accounting. Without proper knowledge in these subjects, efficiency
cannot be optimized. Bank can arrange training programme on
these subjects from time from these lacking.
6.3.6 Reduce classified loan on an emergency basis:

It is observed in the loans and Advances department that classified
loan is about to 36% of the total portfolio. Such a big share of
classified loan indicates weakness in the lending policy of branch.
Probably bank’s customer selection process is not right. Bank
should take special action in order to reduce the amount of
classified loan. Although branch is maintaining the required

provision for its classified loan, branch should consider recovering
classified loan on an emergency basis. For this bank should
motivate the defaulter for repaying. If motivation failed, then bank
should be stringent about the defaulter and take legal action.
Branch must be careful about the quality of its services. Quality of
services is needed to attract new customer and to exist customer
base. One thing which is very much important for the any bank in
that actually customers are bank’s assets and bank’s real capital is
public confidence. Without customer no bank can alive. So bank
should take extreme care in customer satisfaction.
6.3.7 Bank should be innovative and diversified in its services:

This branch provides only conventional services. Modern banking
today is introducing various kinds of deposit account with different
attractive features each of which may attract different groups of
people. For example, Saving Certificate Scheme introduced by
Islami Bank is one of its unique services in the banking in
Bangladesh. Even the bank does not provide any ‘Customer Loan’
facility, which has been found very much profitable for those banks
who have introduced it in their banking services.
Bank should diversify its banking services and add new features in
its services so that it can attract customers from all groups of
people. Financial Engineers of IFIC Bank should be innovative in
developing new banking services, which will attract customers and
reduce costs. It can introduce customer loan scheme, provide
bridge loan, or can engage in lease financing. It can also
underwrite shares of newly incorporated public companies.
6.3.8 Bank must try to be computerized:

There are computers almost in every branch in the IFIC Bank, but
it does not mean that the bank is maintaining a network among
them. The networking system obviously charges a high installation
cost, but it will definitely reduce the overhead costs and an error
free banking may be in progress. Moreover by adopting this system
the bank can join in modern competition of along with e-commerce
concept. The main problem is that the foreign banks and other
private commercial banks have started providing these facilities, so
introduction of these facilities will be added as modern facilities
enhanced, rather it will be a question of survival in the next decade
for the bank.

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INTRODUCTION

1.1 Scene behind the Study

Practical orientation in IFIC Bank – Motijheel Branch 1

1.2 Objectives of the Study

1.3 Important of the Report

Practical orientation in IFIC Bank – Motijheel Branch 2

Advances From 31 October to 28 November 24 Days

Duration of rotation in different departments in the branch is

I have worked different kinds of desks .I have collected some data

Secondary data sources:

Practical orientation in IFIC Bank – Motijheel Branch 3

1.6 Limitations of the Study

Practical orientation in IFIC Bank – Motijheel Branch 4

2.1 Portrait of the Bank

2.2 Ownership Structure

2.3 Capital and Reserves

Practical orientation in IFIC Bank – Motijheel Branch 5

2.4 Distribution of Branches

Practical orientation in IFIC Bank – Motijheel Branch 6

2.6 Human Resource Development

Practical orientation in IFIC Bank – Motijheel Branch 7

Practical orientation in IFIC Bank – Motijheel Branch 8

3.2 Different Departments of General Banking

3.3 Different Types of A/C:

Practical orientation in IFIC Bank – Motijheel Branch 9

3.3.3 STD A/C in IFIC Bank Ltd., Motijheel Branch

3.3.4 Fixed Deposit Receipt (FDR) Account:

3.4 Account opening

Practical orientation in IFIC Bank – Motijheel Branch 10

Receiving filled up application in bank’s prescribed form

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

2. Two copies of passport size photographs from individual

Step 2 3. Applicants must submit required documents

4. Application must sign specimen signature sheet and give

5. Introducer’s signature and accounts number – verified by

Step 3 Authorized Officer accepts the application

Step 4 Minimum balance is deposited – only cash is accepted

Account is opened and a Cheque book and pay-in-slip book is

Practical orientation in IFIC Bank – Motijheel Branch 11

Applicant fills up the application form in the

He required filling up the specimen

For individual introduction is needed by an account holder

The authorized officers scrutinize the introduction and

Issuance of deposit slip and the deposit must be made

After depositing cash one checkbook issued

3.5 Target Customers o IFIC Bank, Motijheel Branch

Practical orientation in IFIC Bank – Motijheel Branch 12

The Bangladesh Bank has recently made the selection of a nominee

Practical orientation in IFIC Bank – Motijheel Branch 13

For sole proprietorship concern:

For limited companies/corporation:

Practical orientation in IFIC Bank – Motijheel Branch 14

Minimum deposit for opening an account:

3.7 Chequebook issue:

A cover file containing the requisition slip shall be effectively

3.8 Transfer of an account to another Branch:

Practical orientation in IFIC Bank – Motijheel Branch 15

3.9. Closing Procedure of an account:

Firstly, the concerned customer has to apply for closing his/her

3.10 Local Remittance

Practical orientation in IFIC Bank – Motijheel Branch 16

Practical orientation in IFIC Bank – Motijheel Branch 17