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Janata Bank Limited

Remittance Activities; A Study on Janata Bank Ltd

Table of Contents
Contents

Chapter

Chapter-1
Introduction

Page
No.

Letter of Transmittal
Student Declaration
Acknowledgement
Executive Summary
Acronyms

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ii
iii
iv
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1.1
1.2
1.3
1.4
1.5
1.6
1.7
1.8
1.9

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Introduction
Origin of the Report
Objectives of the report
Scope of the report
Limitations of the Study:
Analysis techniques
Required data
Methodology of the Study
Flow Chart of the Study

2.1 History of Banking


Chapter-2
History
of 2.2 History of Private Banks in Bangladesh
Banking
in 2.3 Current Structure of Banks in Bangladesh
2.4 Bangladesh Economy 2010-11
Bangladesh

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3.1 History of the Bank


3.2 Vision, Values, Mission & Objective of JBL
Chapter-3
3.3 Core operations:
The Bank at a 3.4 Recent performance of JBL
3.5 Management Hierarchy of the Bank
Glance;
3.6 Corporate Social Responsibilities (CSR)
Janata Bank 3.7 Information of Branches
3.8 Products of JBL
Ltd.
3.9 Function of Janata Bank Limited as a
Commercial bank
3.10 Financial Highlights of JBL at a Glance
Performance Analysis

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Chapter-04

4.1 Introduction of the Issue


4.2 Justification of the Report
4.3 Bank Remittance
4.4 Janata Bank Ltd.s Remittance Activities
4.5 Local or Inland Remittance Activities of JBL

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Janata Bank Limited


Remittance Activities; A Study on Janata Bank Ltd

Remittance
Activities:
Study on
Janata Bank
Ltd.

4.6 Demand Draft (D.D.)


4.7 Payment Order (P.O.)
4.8 Mail Transfer (M.T.)
4.9 Telegraphic Transfer (T.T.)
4.10 Financial Data Regarding Local Remittance of
JBL. (RGSM Br.) Dhaka
4.11 Clearing House
4.12 Transfer Delivery
4.13Foreign Remittances Activates in JBL
4.14 Inward Foreign Remittance:
4.15 FDD [Foreign Demand Draft]
4.16 SRC [Speedy Remittance cell]
4.17Financial Data Regarding Inward Foreign
Remittance of JBL (RGSM Br.)Dhaka
4.18 Outward Foreign Remittance.

Chapter-05
5.1 SWOT Analysis of JBL
Finding &
5.2 Findings
Recommendation 5.3 Recommendations

Chapter -06

Conclusion
Reference/Bibliography
Appendix

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List of Figure
Contents
Serial No.
Figure 1.1
Figure 3.1
Figure 3.2
Figure 3.3
Figure 3.4
Figure 4.1
Figure 4.2
Figure 4.3
Figure 4.4
Figure 4.5
Figure 4.6
Figure 4.7
Figure 4.8

Flow Chart of the Study


Organizational Structure of Janata bank limited
CSR activities of Janata Bank Limited of 2010
Product of Janata Bank Ltd.
Function of Janata Bank Limited
How a bank perform its remittance activities
Local or Inland Remittance Activities of JBL
Sample of Demand Draft
Sample of Demand Draft advice Book.
The process of issuance of D.D.
Sample of Payment Order
Example Receipt (MT/TT)
This is the simple of FDD.

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Remittance Activities; A Study on Janata Bank Ltd

List of Graph
Serial No.
Graph 3.1
Graph 3.2
Graph 3.3
Graph 3.4

Graph 3.5
Graph 4.1
Graph 4.2
Graph 4.3
Graph 4.4
Graph 4.5
Graph 4.6
Graph 4.7
Graph 4.8
Graph 4.9
Graph 4.10
Graph 4.11
Graph 4.12
Graph 4.13
Graph 4.14
Graph 4.15

Contents

Page No.

Compare between Operating Profit and Net Profit of JBL


Compare between Non- Interest Income and Interest
Income of JBL
Comparing Net Profit After Tax (NPAT) with four
Nationalized Commercial Bank of Bangladesh
Comparing Return on Investment (ROI) and Return on
Assets (ROA) with four Nationalized Commercial Bank of
Bangladesh
Comparing Earning per Share (EPS) with four
Nationalized Commercial Bank of Bangladesh
D.D. paid without advice both local and foreign from 2009
to 2010
Total D.D. Cancelled at JBL in 2009 and 2010
Total Payment Order Issued at JBL in 2009 and 2010
Total M.T. payable at JBL in 2009 and 2010
Total T.T. payable at JBL in 2009 and 2010
JBL RGSM Branch Dhaka Inward Local Remittance
earning in 2011
JBL Rajanigandha Super Market Branch Dhaka in Inward
Local Remittance earning from 2008 to 2011
Contribution of JBL in Foreign Remittance earning from
2004 to 2011
National Inward Remittance of Janata Bank Limited
National Inward Foreign Remittance of Janata Bank
Limited
National Inward Foreign Remittance of Janata Bank
Limited (Last 3 months of 2011)
National Inward Foreign Remittance of Janata Bank
Limited (Last 3 months of 2011)
Total F.D.D. payable at JBL in 2009 and 2010
JBL Rajanigandha Super Market Branch Dhaka in Inward
Foreign Remittance earning from 2008 to 2011
JBL Rajanigandha Super Market Branch Dhaka in Inward
Local Remittance earning in 2011.

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Remittance Activities; A Study on Janata Bank Ltd

List of Table
Contents
Serial No.
Table 3.1
Table 3.2
Table 4.1
Table 4.2
Table 4.3
Table 4.4
Table- 4.5
Table-4.6
Table-4.7
Table-4.8

Number of Branches
Table 3.2: List of Branches (Grade/Category wise)
JBL RGSM Branch Dhaka Inward Local Remittance
earning in 2011
JBL Rajanigandha Super Market Branch Dhaka in
Inward Local Remittance earning from 2008 to 2011
Web-based Foreign Remittance Instant/Spot Cash
Payment System (EFT).
Country wise Foreign Remittance of JBL from 2004 to
2010
National Inward Remittance of Janata Bank Limited
National Inward Foreign Remittance of JBL (Last 3
months of 2011)
JBL RSMB Dhaka in Inward Foreign Remittance earning
from 2008 to 2011
JBL Rajanigandha Super Market Branch Dhaka in
Inward Foreign Remittance earning in 2011

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Janata Bank Limited


Remittance Activities; A Study on Janata Bank Ltd

Acronyms
JBL
CEO
MD
CSR
A/C
DMCBL
NPAT
ROI
ROA
EPS
HO or H/O

Janata Bank Limited


Chief Executive Officer
Managing Director
Corporate Social Responsibilities
Account
The Dhaka Mercantile Co-operative Bank Limited
Net Profit after Tax
Return on Investment
Return on Assets
Earning per Share
Head Office

PO
DD
TT
MT
CIBTA
IBCA
IBDA
TIN
IBC
OBC
CAD
GD
IDT
ESS
F.D.D
F.T.T.
SRC

Pay Order
Demand Draft
Telegraphic Transfer
Mail Transfer
Computer Inter Branch Transaction Account
Inter Bank Credit Advice
Inter Branch Debit Advice
TAX Identification Number
Inward Bills for Collection
Outward Bills for Collection
Cash Against Documents
General Diary
Inter Data Transfer
Education Savings Scheme
Foreign Demand Draft
Foreign Telegraphic Transfer
Speedy Remittance cell

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Janata Bank Limited


Remittance Activities; A Study on Janata Bank Ltd

Chapter-01

Introduction

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Janata Bank Limited


Remittance Activities; A Study on Janata Bank Ltd

1.1

Introduction

This report has a certain purpose to focus on the operations of Remittance of Janata Bank
Limited. Without any doubt Remittance catches the flash as it has great importance in the
balance of trade in economy. Banks plays a vital role in this discipline.
In the age of globalization, the importance of banking sector is beyond description. Banking
sector is going ahead with the improvement and invention of new services and offerings to
gather and retain more customers. Besides other banking activities Remittance has become
an essential part of a Banks daily activity to perform. In our daily life we usually use the tools
like DD, TT, MT etc. in order to sent money from one place to another. Again, we know that
foreign remittance has a great impact on our national economy. Internship in Janata Bank Ltd
(Rajanigandha Super Market Branch Dhaka) has brought me the opportunity to know
details about various tools of remittance. At the vary beginning of the internee period, I was
too much interested about Loan sanctioning and recovery system of a bank like Janata Bank
Ltd but in a few days I recognized that my branch deals with remittance more then any
other banking activities including loans. Working with remittance system in daily Banking
day turns my attention from loans to remittance which creates the background of the study.

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Janata Bank Limited


Remittance Activities; A Study on Janata Bank Ltd

1.2

Origin of the Report

Although total B.B.A. program combines an excellent blend of theoretical and classroom
knowledge but aside this internship program facilitates a student to bring light on their
theoretical knowledge to apply this in practical ground.
This report is based on an internship program at Janata Bank Limited to gather practical
knowledge about banking activities. This is followed by practical experiences in the
Rajanigandha Super Market Branch Dhakaof Janata Bank Limited. Each intern must carry
out a specific project, in order to report on specific activity of the organization. Consequently
a report based on the projects is to be submitted to both the authority of Janata Bank Ltd and
the University. My topic for this internship report is Remittance Activities:Study on
Janata Bank Ltd. Janata Bank Ltd deals with almost every activities of Banking but
Rajanigandha Super Market Branch Dhaka has a special involvement with remittance. So it is
the main reason behind choosing this topic.

1.3

Objectives of the report

1.3.1 Broad Objective:


The broad objective of this report is to prepare a detailed report on Janata Bank Remittance
Activities and understand the techniques, problems and possible solutions associated with the
issue.

1.3.2 Specific Objective:


The specific objectives of the study are as follows:
To describe different activities in the Remittance section of Janata Bank,
Rajanigandha Super Market Branch Dhaka.
To find out the problems in those activities
To suggest some recommendations to the problems

1.4

Scope of the report

This study would focus on the following areas of Janata Bank Limited.
Actual Remittance activities of Janata Bank Limited.
Overview the current procedure of remittance management.
Overview the current procedure of inward and outward foreign remittance
management.
Organizational structures and responsibilities of management.
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Janata Bank Limited


Remittance Activities; A Study on Janata Bank Ltd

Each of the above areas would be critically analyzed to determine the proper efficiency of
Janata Banks Remittance Management system.

1.5

Limitations of the Study:

There were some problems while conducting the study. A whole hearted effort was applied to
conduct the study and to bring a reliable and fruitful result. In spite of this, there exist some
limitations, which acted as a barrier to conduct the study. The limitations were:
Time limitation: It was one of the main constraints that affected covering all aspects of the
study.Very short time frame- the report had to be conducted in a short duration (3 months).
Lack of Secondary Information: The Remittance data of Janata Bank Ltd. is not much
available over the net. Secondary source of information was not sufficient for the completion
of the report.
Limitation of the Scope: Much confidential information was not disclosed by respective
personnel of the department
In many case the relevant authorities are not helpful to provide information.
The organization maintains strict confidentiality about their financial and other
information. They are afraid of any type of information leakage to their
competitors. So there was always difficulty to have appropriate information from
them.
The main difficulty of the study was insufficiency of current information relevant
to the study.
Consolidated data related to the study were not given due to time shortage.
All required information was not available in any specific branch of the bank and
there was also limited opportunity to visit more than one branch.
Duration of the study was too short to find out the exact calculation from the
employee.
Scope of my study is so wide that analytical and comprehensive study is not
possible.
Lack of sufficient books, papers and journals etc.
Web site of the Organization isnt up to date to gather valuable information.

1.6

Analysis techniques

Both qualitative and quantitative methods were applied for preparing this report. The data
were analyzed and presented by Microsoft excel and shows percentage, graphical
presentation and different types of charts. Best effort was given to analyze the numerical
findings.

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Janata Bank Limited


Remittance Activities; A Study on Janata Bank Ltd

1.7

Required data

I have mainly focused on numerical data in preparing the report. Also I have used theoretical
portion as the demand of the report. Analyzing Remittance management of a bank, both
theoretical and technical knowledge are necessary for execution. Then everything with
accuracy, I have analyzed and made conclusion.

1.8

Methodology of the Study

While conducting the study, sources were explored for primary information and data. But
hardly any updated data could be found. In the absence of updated information or data
dependence on secondary data has been inevitable. However, whenever possible primary data
has been used. Data were also collected by interviewing the responsible officers and from
some documents & statements printed by the Janata Bank Ltd. Janata Bank Ltd. also helped
me in collecting data providing books and Banks annual report.

1.8.1 Study Design


This study is descriptive in nature and so was conducted using assessment of different
historical data along with other sources.

1.8.2 Sources of data


Primary:
a) Personal interview-Face to-face conversation and in depth interview with the respective
officer of the bank.
b) Practical work exposures on different aspects of this field.

Secondary:
A. Annual report of JBL.
B. Relevant documents related to the study as provided by the officers.
C. Periodicals published by Bangladesh Bank.
D. Different publications and relevant circulars.
E. Official website of JBL
F. Manuals of JBL

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1.9

Flow Chart of the Study


PLANNING
DESIGNING THE LAYOUT

THE APPROACH
The Literature Review
Theoretical Consideration
METHODOLOGY

SUBMISSION OF THE
REPORT
PRIMARY SOURCES
a) Face to face conversation with
Bankers

SECONDARY SOURCES
a) Annual report
b) Working papers
c) Office files
d) Selected Books

COLLECTING INFORMATION

ANALYZING
PREPARING THE REPORT
SUBMISSION OF THE
REPORT
Figure -1.1: Flow Chart of the Study

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Remittance Activities; A Study on Janata Bank Ltd

Chapter-2

History of Banking in Bangladesh

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2.1 History of Banking


The first banks were the merchants of the ancient world that made loans to farmers and
traders that carried goods between cities. The first record of such activity dates back to
around 2000 BC in Assyria and Babylonia. Later, in ancient Greece and during the Roman
Empire, lenders who were based in temples made loans but also added two important
innovations: accepting deposits and changing money. During this period, there is similar
evidence of the independent development of lending of money in ancient China and
separately in ancient India.
The origin of banking, in the modem sense, is traced to Italy. The word Bank also seems to
have originated from Italy. The word Bank is supposed to have been derived from the
German word Banck, meaning a mound or heap (like a small hill), from which Italians
adopted Banco. Others believe that the word bank has been derived from Bancus or banc
or Banque which means a bench at which the money changers or mediaeval bankers used to
charge one kind of money into another and transact their banking business. The early banking
was, however, closely associates with the business of money-changing.
Bangladesh inherited its banking structure from the British regime and had 49 banks and
other financial institutions before the Partition of India in 1947. Bengal Bank, the first
British-Patronized modern bank established in India in 1784, had opened its two branches in
1873 in Sirajganj and Chittagong of Bangladesh region. Thereafter, another branch of Bengal
Bank was opened in Chandpur in 1900. A number of other branches of Bengal Bank were
opened in this region and some branches had been closed in Course of time. There were six
other branches of Bengal Bank in operation in the territory of Bangladesh until the Partition
of British-India in 1947 and these branches were at Chittagong (1906), Mymensing (1922),
Rangpur (1923), Chandpur (1924), and Narayanganj (1926).
Following the emergence of Pakistan in 1947, Stat Bank of Pakistan, the Central Bank of the
country, came into being in July 1948. Later, the National bank of Pakistan, a strong
commercial bank was set up in 1949. In all, 36 scheduled commercial banks were in
operation in the whole Pakistan until 1971. Pakistanis owned most of these banks and only
three of them namely, National Bank of Pakistan, Habib Bank Ltd. and the Australasia Bank
Ltd, had one branch of each in East Pakistan in 1949.During 1950-58, there other Pakistaniowned banks, Premier Bank Ltd., Bank of Bhowalpur Ltd. and Muslim Commercial Bank,
had Opened their branch in East Pakistan. Four Pakistan-owned banks, the United Bank Ltd.,
Union Bank Ltd.(Note: the United Bank Limited and Union Bank Limited were renamed as
Janata Bank.), Standard Bank Ltd. and the commerce Bank Ltd. Conducted banking business
in the Province during 1959-1965.But all of them Had their headquarters in west Pakistan.
East Pakistan had only two banks Owned by local business groups white headquarters in
Dhaka. These were the Eastern Mercantile Bank Ltd. (Presently Pubali Bank Ltd.) and
Eastern Banking Corporation Ltd. (Presently Uttara Bank Ltd.) established in 1959 and 1965
respectively.
In the beginning of 1971, there were 1130 branches of 12 banks in operation in East Pakistan.
The foundation of independent banking system in Bangladesh was laid through the
establishment of the Bangladesh Bank in 1972 by the Presidential Order No. 127of 1972
(which took effect on 16th December, 1971). Through the Order, the eastern branch of the
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former State Bank of Pakistan at Dhaka was renamed as the Bangladesh Bank as a fullfledged office of the central bank of Bangladesh and the entire undertaking of the State Bank
of Pakistan in, and in relation to Bangladesh has been delivered to the Bank.
Bangladesh Bank has been entrusted whit all of the traditional central banking functions
including the sole responsibilities of issuing currency, Keeping the reserves, formulating and
managing the monetary and credit policy, regulating the banking system, stabilizing domestic
and external monetary value, preserving the par value of Bangladesh Taka, fostering
economic growth and development and the development of the countrys market.
Janata Bank Limited is the 2nd largest state owned commercial bank in Bangladesh.
Immediately after the liberation of Bangladesh in 1971, the erstwhile United Bank Limited
and Union Bank Limited were renamed as Janata Bank.
The rate of growth and development of banking sector in the country was extremely slow
until 1983 when the government allowed to establish private banks and started
denationalization process: initially, the Uttara Bank in the same year and thereafter, the
Pubali Bank, and the Rupali Bank in 1986.
Modern banking system plays a vital role for a nations economic development. Over the last
few years the banking world has been undergoing a lot of changes due to deregulation,
technological innovations, globalization etc. These changes in the banking system also
brought revolutionary changes in a countrys economy. Present world is changing rapidly to
face the challenge of competitive free market economy. It is well recognized that there is an
urgent need for better, qualified management and better-trained staff in the dynamic global
financial market. Bangladesh is no exceptions of this trend. Banking Sector in Bangladesh is
facing challenges from different angles though its prospect is bright in the future.

2.2 History of Private Banks in Bangladesh


There were no domestic private commercial banks in Bangladesh until 1982; When the ArabBangladesh Bank Ltd. commenced private commercial banking in the country. Five more
commercial banks came up in 1983 and initiated a moderate growth in banking financial
institutions. Despite slow growth in number of individual banks, there had been a relatively
higher growth of branches of nationalized commercial banks (NCBs) during 1973-83. There
number had increased from 1512 in 1973-74 to4603 in 1982-83.
Financial sector reforms to strengthen the regulatory and supervisory framework for banks
made headway in 2006 although at a slower than expected pace. Overall health of the
banking system showed improvement since 2002 as the gross Non-performing Loans (NPL)
declined from 28 percent to 14 percent while net NPL (less Provision) reduced to 8 percent
from 21 percent. This led significant improvement in the profitability ratios. Although the
Private Commercial Banks (PCB) NPL ratio registered a record low of 6 percent, the four
Nationalized Commercial Banks (NCB) position are still weak and showed very high NPL at

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25 percent. The NCBs have large capital shortfalls with a risk-weighted capital asset ratio of
just 0.5 percent (June 2006) as against the required 9 percent. For the PCBs risk-weighted
capital asset ratio stood at 10 percent. Bangladesh Bank issued a good number of prudential
guidelines during the year 2006 and the first quarter of 2007 which among others relate to:
Rationalization of prudential norms for loan classification and provisioning,
Policy for rescheduling of loans,
Designing and enforcing an "integrated credit risk grading manual",
Credit rating of the banks, and
Revisions to the make-up of Tier-2 capital.

2.3 Current Structure of Banks in Bangladesh


The commercial banking system dominates Bangladesh's financial sector. Bangladesh Bank
is the Central Bank of Bangladesh and the chief regulatory authority in the sector. The
banking system is composed of four state-owned commercial banks, five specialized
development banks, thirty private commercial Banks and nine foreign commercial banks. The
Nobel-prize winning Grameen Bank is a specialized micro-finance institution, which
revolutionized the concept of micro-credit and contributed greatly towards poverty reduction
and the empowerment of women in Bangladesh.
2.3.1 Central Bank
Bangladesh Bank
Pursuant to Bangladesh Bank Order, 1972 the Government of Bangladesh reorganized the
Dhaka branch of the State Bank of Pakistan as the central bank of the country, and named it
Bangladesh Bank with retrospective effect from 16 December 1971.
2.3.2 State-owned Commercial Banks
The banking system of Bangladesh is dominated by the 4 Nationalized Commercial Banks In
which 3 are totally controlled by government and 1 (Rupali Bank) bank is controlled by both
government and private sector. , which together controlled more than 54% of deposits and
operated 3388 branches (54% of the total) as of December 31, 2004.[1] The nationalized
commercial banks are:
Nationalized Commercial Bank of Bangladesh:
1. Sonali Bank
2. Agrani Bank
3. Rupali Bank
4. Janata Bank

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2.3.3 Private Commercial Banks


Private Banks are the highest growth sector due to the dismal performances of government
banks (above). They tend to offer better service and products.
1. United Commercial Bank Limited
2. Mutual Trust Bank Limited
3. BRAC Bank Limited
4. Eastern Bank Limited
5. Dutch Bangla Bank Limited
6. Dhaka Bank Limited
7. Islami Bank Bangladesh Ltd
8. Uttara Bank Limited
9. Pubali Bank Limited
10. IFIC Bank Limited
11. National Bank Limited
12. The City Bank Limited
13. NCC Bank Limited
14. Prime Bank Limited
15. Southeast Bank Limited
16. Al-ArafahIslami Bank Limited
17. Social Islami Bank Limited
18. Standard Bank Limited
19. One Bank Limited
20. Exim Bank Limited
21. Bangladesh Commerce Bank Limited
22. First Security Islami Bank Limited
23. The Premier Bank Limited
24. Bank Asia Limited
25. Trust Bank Limited
26. ShahjalalIslami Bank Limited
27. Jamuna Bank Limited
28. ICB Islami Bank
29. AB Bank
30. Marcantile Bank Limited
2.3.4 Specialized Development Banks
Out of the specialized banks, two (Bangladesh Krishi Bank and RajshahiKrishiUnnayan
Bank) were created to meet the credit needs of the agricultural sector while the other two (
Bangladesh Shilpa Bank (BSB) & Bangladesh ShilpaRinSangtha (BSRS) are for extending
term loans to the industrial sector.The Specialized banks are:
1. Bangladesh Krishi Bank
2. KARMASANGSTHAN Bank
3. RajshahiKrishiUnnayan Bank
4. Progoti Co-operative Landmortgage Bank Limited (ProgotiBanK)

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5. Grameen Bank
6. The Dhaka Mercantile Co-operative Bank Limited (DMCBL)
7. Bangladesh Development Bank Ltd
8. Bangladesh Someday Bank Limited(Cooperative Bank)
9. Ansar VDP Unnyan Bank
10. BASIC Bank Limited (Bangladesh Small Industries and Commerce Bank Limited)
2.3.5 Foreign Commercial Banks
1. Citibank
2. HSBC
3. Standard Chartered Bank
4. Commercial Bank of Ceylon
5. State Bank of India
6. Habib Bank Limited
7. National Bank of Pakistan
8. Woori Bank
9. Bank Alfalah
[Source: www.bangladesh-bank.org -Financial System >Banks , Bangladesh Bank
&http://en.wikipedia.org/wiki/List_of_banks_in_Bangladesh]

2.4 Bangladesh Economy 2010-11


Bangladesh is an advantageous position in relation to world average growth and the growth
of emerging and developing economies. Bangladesh maintained a steady growth in 2010
despite global financial turmoil, but given the increasing demand, the growing power and
energy shortages and poor infrastructure remained major impediments to the countrys
industrial growth. Economic growth in Bangladesh has so far been only insensibly affected
by the ongoing global slowdown, attaining 6.7 percent teal GDP growth in FY 11 following
6.0 percent growth of FY 10. (Appendix- )
Foreign exchange reserve in more than USD 10.14 billion even after ACU adjustment
Agriculture sector achieved a strong growth of 4.7 percent in FY 10 Growth rate of industry
sector slowed down from 6.5 percent in FY 09 to 6.0 percent in FY 10, Service sector
consistently experienced a moderately high performance, contributing to its increasing share
in GDP. During the year 2009-10 contribution of service sector in GDP is 49.9 percent. Gross
investment as percentage of GDP increase, recording 25.0% of GDP in FY 10 compared to
24.37% of GDP in FY 09.
Total foreign remittance during FY 10 stood at USD 10.99 billion, registering a growth of
13.4% over FY 09. Remittance from Saudi Arabia constituted the major share (30.87%) of
the total inward remittance.
Janata Bank has contributed much to attain the achievement in all above sectors and boost the
economy of the country during the year under report.

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Chapter-3

Profile of Janata Bank Ltd. at a Glance

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3.1 History of the Bank


Janata Bank Limited is the 2nd largest state owned commercial bank in Bangladesh.
Immediately after the liberation of Bangladesh in 1971, the erstwhile United Bank Limited
and Union Bank Limited were renamed as Janata Bank. The established of Janata Bank was
happened under the Bangladesh Bank order 1972. It was incorporated as a public Limited
Company on 21, May 07 vide certificate of incorporation No-C66933 (4425)07 in the early
era of privatization. The Bank has taken over the business of Janata Bank at a purchase
consideration of Tk. 2593.90 million as a going concern through a vendor agreement signed
between the Ministry of Finance of the Peoples Republic of Bangladesh and the Board of
Directors on behalf of Janata Bank Limited on 15th November 2007. The operation of Janata
Bank Limited works through 851 branches and including 4 overseas branches at United Arab
Emirates and a subsidiary company named Janata Exchange Company Srl in Italy. It is linked
1202 foreign correspondents all over the world.

3.2 Vision, Values, Mission & Objective of JBL


3.2.1 Vision
Become the effective largest commercial bank in Bangladesh to support socio- economic
development of the country and to be a leading bank in south Asia.

3.2.2 Values

Professionalism

Diversity

Growth

Values
Integrity

Dignity
Accountability

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3.2.3 Mission
Janata Bank Limited will be an effective commercial bank by maintaining a stable growth
strategy, delivering high quality financial products, providing excellent customer service
through an experienced management team and ensure good corporate governance in every
step of banking network.

3.2.3 Objective
The bank plays a vital role in socio-economic development of Bangladesh
A) Agro credit.
B) Micro credit
C) SME Credit
D) Project loan (Industrial credit)
E) General Loan
Maximize profit through customer satisfaction and contributing in national economy.
Doing foreign exchange and trade to uphold the national interest and balance of trade
in favor of Bangladesh.
Blocking all kinds of illegal monitory activities with emphasis on money laundering
as per Govt. instructions and Bangladesh Bank Circulars.
Brining new technology based high quality customer service and products through IT
such as ATM. ONE STOP SERVICE, ONLINE BANKING. CREDIT AND DEBIT
CARD, AUTOMATED CLEARING HOUSE FACILITY.
Giving quality merchant bank service to the customer and maintaining healthy
portfolio.

3.3 Core operations:


Janata Bank Limited, the second largest commercial bank in Bangladesh, has an authorized
capital of Tk. 20000 Million, paid up capital of Tk5000 Million and reserve fund of Tk.10240
Million in 2010.
The Bank has a total asset of Tk. 345234 Million as on 31st December 2010. Immediately
after the emergence of Bangladesh in 1971, the erstwhile United Bank Limited and Union
Bank Limited were nationalized and renamed as Janata Bank Limited.
Janata Bank Limited operates through 872 (up to 2011) branches including 4 overseas
branches at United Arab Emirates. It is linked with 1198 foreign correspondents all over the
world.
The Bank employs more than 13(Thirteen) thousand persons.

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The mission of the bank is to actively participate in the socio- economic development of the
nation by operating a commercially sound banking organization, providing credit to viable
borrowers, efficiently delivered and competitively priced, simultaneously protecting
depositors funds and providing a satisfactory return on equity to the owners.
The Board of Directors is composed of 15 (fifteen) members headed by a Chairman. The
Directors are representatives from both public and private sectors.
The Bank is headed by the Managing Director (Chief Executive), who is a reputed banker.
The corporate head office is located at Dhaka with 35 (thirty five) Divisions.

3.4 Recent performance of JBL


Major Achievement in 2010

Shareholder equity increased to Tk.20390 million in 2010 from Tk.14925 million in


2009.
Classified loan reduced to Tk.-11827 million in 2010 from Tk.14037 million in 2009.
Capital adequacy increased to Tk.23454 million in 2010 from Tk.14765 million in
2009.
Interest margin increased to Tk.7067 million in 2010 from Tk.4490 million in 2009.
Return on asset increased to 1.42 percent in 2010 from 0.95 percent in 2009.
Earning per share (EPS) increased to Tk.98.16 in 2010 from Tk.73.37 in 2009.
Foreign trade increased to Tk.302259 million in 2010 from Tk.206715 million in
2009.
Deposit increased to Tk.286567 million in 2010 from Tk.246175 million in 2009.
Loan and advance increased to Tk.225732 million in 2010 from Tk.166359 million in
2009.
Operating profit increased to Tk.12036 million in 2010 from Tk.8578 million in 2009.
Pre-tax profit increased to Tk.7820 million in 2010 from Tk.5656 million in 2009.
After-tax profit increased to Tk.4908 million in 2010 from Tk.2804 million in 2009.
Janata Bank Limited awarded by ICIC Bank Hong Kongfor batter performance of US
Dollar clearing.
Janata Bank Limited contributed to the National exchange Tk.1557 million in 2010 as
against Tk.830 million in 2009.
Janata Bank Limited distributed Tk.61.29 million for Corporate Social
Responsibilities (CSR) activities in2010 as against Tk.17 million in 2009.

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Recently The Bank has been recognized internationally and domestically for
its good performance.

International Award-The Bank of the year-2011 in Bangladesh


Janata Bank Limited has been awarded The Bank of the Year-2011 in Bangladesh
by the London based Financial Magazine The Banker of the Financial Times Group.
This is for the sixth time the bank has been awarded The Bank of the Year. Janata
Bank Limited achieved remarkable progress in the year 2010.
ICMAB Best Corporate Award-2011
Janata Bank Limited has been awarded 'ICMAB Best Corporate Award - 2011' by the
Institute of Cost and Management Accountants of Bangladesh. This Bank secured the
first position among the state owned Commercial Banks in Bangladesh.
International Award -"World's Best Bank Award-2009 in Bangladesh
Janata Bank Limited was awarded Best Bank-Bangladesh in the Global Finance,
World's Best Bank Awards, 2009 by New York based Financial Magazine "Global
Finance". "Global Finance" has identified winning banks based on number of criteria
including growth in Assets, Profitability, Strategic relationships, Customer Service,
Competitive pricing and innovative products.
International Award -"World's Best Bank Award-2008 in Bangladesh
International Award -"World's Best Bank Award-2007 in Bangladesh
International Award -The Bank of the Year-2004 in Bangladesh
Janata Bank Limited receives "Asian Banking Awards 2004" on Financing
Program for Women Entrepreneurship:
Janata Bank Limited gets The Banker Award-2003
International Award-The Bank of the Year-2002
International Award-The Bank of the Year-2001

It may be noted here that Janata Bank Limited has been working hard in improving the
customer services in recent times by introducing a number of IT-based reform measures

3.5 Management Hierarchy of the Bank


3.5.1 Board of Directors
The Board of Directors is composed of thirteen members headed by a Chairman and the
directors comprised of representatives from both public and private sectors and shareholders.
The Bank is headed by the Managing Director (Chief executive) who is a reputed
professional Banker

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3.5.2 Organizational Structure of Janata bank limited


Chairman
Managing Director
Deputy Managing Director
General Manager
Assitant General Manager

Manager
Senior Executive Officer
Executive Officer

Assistant Executive Officer


Support Stuff
Figure-3.1 Organizational Structure of Janata bank limited

3.6 Corporate Social Responsibilities (CSR)


As a state-owned bank, its goal is not only make profit, but also to serve people through our
Corporate Social Responsibilities (CSR) .The Bank has adequate scope to provide financial
assistance to the distressed and deprived people individually and through various
organization towards human development. The Bank pursuing CSR activities with funds
generated from profit. The Bank disbursed Tk.61.29 million in 2010 as against allocated 70
million. CSR aims at maximizing realization of human potentials and minimizing human
deprivation.
CSR activities of Janata Bank Limited of 2010 are given below:-

Corporate Social Responsibilities


7%

7%
25%

Poverty reduction and


rehabilitation
Health

16%

Knowledge building
20%

25%
Disaster mitigation

Figure3.2:- CSR activities of Janata Bank Limited of 2010

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3.7 Information of Branches


Janata Bank Ltd. operates through 868 branches. It is linked to its foreign correspondents all
over the world. Janata Bank Ltd. Also have four overseas branches.

Number of Branches
Branches in Bangladesh

868

Rural Branches

486

Urban Branches
Overseas Branches
Total Branches

382
4
872
Table 3.1 Number of Branches

List of Branches (Grade/Category wise)


SL
01
02
03
04
05
06
07
08
Total

Name
Local Office
Corporate -1 Branches
Corporate -2 Branches
Overseas Branches
Grade - 1 Branches
Grade - 2 Branches
Grade - 3 Branches
Grade - 4 Branches

No
1
12
41
4
204
209
294
107
872

Table 3.2: List of Branches (Grade/Category wise)

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3.8 Products of JBL


JBL offers both corporate and retail banking services with a strong focus on socio economic
development of the country. The bank typically provides short term working capital loan and
limited long term exposure. Moreover, JBL offers micro enterprise and special credit as well
as rural banking. Under corporate banking service JBL provides trade finance, project
finance, syndication etc. On the other hand, consumer loan, deposit scheme, remittance
facilities are served through retail banking. In 2010, JBL launched its merchant banking
operation to diversify its product portfolio.

Deposit
Products

Products
of JBL

Credit
Products

E-Services
ATM
Operation

Current deposit Account , Short


term Deposit, Savings Bank
Deposit Account, Fixed Deposit,
Foreign Currency Deposit,
Monthly Saving Schene, Monthly
Profit Based Saving Csheme,
Janata Bank Savings pension
Scheme (JBSPS), Janata Bank
Deposit Scheme (JBDS), Education
Deposit Scheme (EDS), Medical
Deposit Scheme (MDS), Janata
Bank Monthly Savings Scheme
(JBMSS), Janata Bank Special
Deposit Scheme (JBSDS), Janata
Bank School Banking Savings
Karjakram

Term Loan, Trade Finance,


Import Finance, Export Finance,
SME Financing, Micro Credit,
Agricultural & Rural Credit,
Consumer Credit, Home Loan,
Loan for Merchant Banking

Speedy Remittance Western Union


Money Transfer,
Automated Clearing, Internet
Banking, ATM Banking

Debit Card Operation


Salary Card

Figure 3.3: Product of Janata Bank Ltd.

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3.9 Function of Janata Bank Limited as a Commercial bank

Function of
Janata Bank
Limited

General function

Collecting deposit , Lending


loan , Honouring cheque ,
Creation of medium of
exchange, Discounting bills,
Money transfer etc.

Development
function

Creation of savings and


formation of capital, helps
export and import business,
Investment in development
sector, HR development etc.

Representative
function

Receive and payment as the


representative of clients, selling
of share and securities,

Service function

Transaction of foreign
currencies, information sharing,
Consulting and others service
functions.

Figure 3.4: Function of Janata Bank Limited

3.9.1 Other Services of Janata Bank Limited.


Beside regular banking operation, Janata Bank Limited offers specialized services to different
walks of clients/agencies throughout the country. Under the network of utility services,
customers of different govt. organizations, corporate bodies, local bodies, educational
institutions, students, etc are getting essential benefits from the Bank continuously.
The utility services of Janata Bank Limited's are:
Bills Collection
Payment Made on Behalf of Government
Services Areas

3.9.1.1 Bills Collection

Collecting the gas bills of Titas, Bakhrabad and Jalalabad Gas Transmission and
Distribution Companies.
Regular collection of electricity bills of Dhaka Electricity Supply Authority, Dhaka
Electricity Company, Bangladesh Power Development Board and Rural
Electrification Board.

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Regularly collects the telephone bills of Telegraph and Telephone Board.


Collects Water/Sewerage bills of Water and Sewerage Authority.
Municipal holding tax of City Corporation/ Municipalities is collected by JBL.

3.9.1.2 Payment Made on Behalf of Government

Payment of non- Govt. teachers salaries


Providing girl Students scholarship/stipend & Primary Student Stipend.
Provides army pension
Payment of widows, divorcees and destitute women allowances
Old-age Allowances
Food procurement Bills

3.10 Financial Highlights of JBL at a Glance


Performance Analysis
3.10.1 Compare between Operating Profit and Net Profit of JBL from 2008
to 2010

Taka in Million

Operating Profit and Net Profit of JBL


14000
12000
10000
8000
6000
4000
2000
0
Operating Profit
Net Profit

2006

2007

2008

2009

2010

4213

4963

7003

8578

12037

1681

3145

2982

4907

Year
Source: Janata Bank Annual Report -2010

Graph3.1: Compare between Operating Profit and Net Profit of JBL

The Graph-3.1 shows that, The Net Profit of JBL. up to December 2010 is Tk.4907
Million which is higher than Tk. 2982 Million in 2009. Where, in 2006 the net profit of
JBL is zero.
So we can say that, the growth of Net Profit as compared to Operating Profit is
respectable.

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3.9.2 Compare between Non- Interest Income and Interest Income of JBL
from 2009 to 2010

Taka in Million

20000
15000

10000
5000
0

2009

2010

4722

7283

15401.7

17684.9

Non Interest Income


Interest Income

Year
Source: Janata Bank Annual Report -2010

Graph 3.2: Compare between Non- Interest Income and Interest Income of JBL

The Graph 3.2 shows that, The Non Interest Income of JBL. up to December 2010 is
Tk.7283 Million which is higher than Tk. 4722 Million in 2009. So we can say that, the
growth of Non Interest Income as compared to Interest Income is respectable.

Taka in Million

3.9.3Janata Bank Ltd compare with Nationalized Commercial Bank of


Bangladesh

5000
4000
3000
2000
1000
0
Net Profit Afret tax

Janata
Bank Ltd.
4907

Rupali
Bank Ltd.
600.6

Agrani
Bank Ltd.
3516.8

Sonali
Bank Ltd.
2737.6

Name Of Nationalized Commercial Bank


Source: Annual Report- 2010 of the above Banks
Graph3.3: Comparing Net Profit After Tax (NPAT) with four Nationalized Commercial Bank of
Bangladesh

The Graph3.3 shows that, the Net Profit after Tax (NPAT) of JBL up to December 2010
is Tk.4907 Million which is higher than NPAT of Rupali Bank Ltd. (Tk. 600.6 Million),
Agrani Bank Ltd. (Tk. 351608 Million) and Sonali Bank Ltd. (Tk. 2737.6 Million).

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Percentage

After analyzing the chart we can say that the financial position of Janata Bank Ltd. is
batter than other Nationalized Commercial Bank of Bangladesh.

16.00%
14.00%
12.00%
10.00%
8.00%
6.00%
4.00%
2.00%
0.00%
Return on Investment (ROI)

Retern on Assets (ROA)

Janata
Bank Ltd.
4.89%

Rupali
Bank Ltd.
11.22%

Agrani
Bank Ltd
14.75%

Sonali
Bank Ltd.
9.39%

1.45%

1.15%

1.33%

0.03%

Name of Bank
Source: Annual Report- 2010 of the above Banks

Graph 3.4: Comparing Return on Investment (ROI) and Return on Assets (ROA) with four
Nationalized Commercial Bank of Bangladesh

The Graph 3.4 shows that, the Return on Investment (ROI) of JBL up to December 2010
is 4.89% which is lower than the Return on Investment (ROI) of Rupali Bank Ltd.
(ROI-11.22%), Agrani Bank Ltd. (ROI-14.75%) and Sonali Bank Ltd. (ROI-9.39%).
Where, the Return on Assets (ROA) of JBL up to December 2010 is 1.45% which is
higher than the Return on Assets (ROA) of Rupali Bank Ltd. (ROA-1.15%), Agrani
Bank Ltd. (ROA-1.33%) and Sonali Bank Ltd. (ROA-0.03%).
After analyzing the chart we can say that the financial position of Janata Bank Ltd. is
batter than other Nationalized Commercial Bank of Bangladesh though ROI is lower.

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Taka

Earning Per Share


100
90
80
70
60
50
40
30
20
10
0
Earning Per Share

Janata Bank
Ltd.
98.16

Rupali Bank
Ltd.
48.02

Agroni Bank
Ltd.
64.35

Sonali Bank
Ltd.
30.42

Name of Bank
Source: Annual Report- 2010 of the above Banks

Graph 3.5:- Comparing Earning per Share (EPS) with four Nationalized Commercial
Bank of Bangladesh

The Graph- 3.5 shows that, Earning per Share (EPS) of JBL up to December 2010 is
Tk.98.16 which is higher than EPS of Rupali Bank Ltd. (Tk48.02), Agrani Bank Ltd.
(Tk. 64.35) and Sonali Bank Ltd. (Tk. 30.42).
After analyzing the chart we can say that the financial position of Janata Bank Ltd. is
batter than other Nationalized Commercial Bank of Bangladesh.

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Remittance Activities; A Study on Janata Bank Ltd

Chapter-04

Remittance Activities:
Study on Janata Bank Ltd.

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4.1 Introduction of the Issue


Now a day a modern banker must have to perform a number of ancillary services, besides
performing the two essential functions of accepting deposits and investing its funds.
Remittance of funds can be considered as one of the most important ancillary service
provided by a Bank. With a network of the branches spread over the entire country banks are
eminently suitable institutions for the remittance of funds from one place to another. Bank
remittance is safe, swift, inexpensive, and simple. Bank takes the risk of theft or loss of
customers money in exchange of a very little commission. Again, the reserve of foreign
remittance plays a great role in national economy. With various types of accounts
maintaining in international branches and coordinating international banks these foreign
currencies are being carried sending by non-resident Bangladeshis.

4.2 Justification of the Report


Due to market economy a huge competition exists among the nationalized, foreign and
private commercial banks and therefore the expectation of the customers growing rapidly
concerning the banking operation & how customer service can be more attractive. Bank
Remittance- the way of sending customers money from one place to another, has becomes the
most important part of customer service in recent years. On the other hand, these ancillary
services are generating a great income to the Banks. Under the above circumstances, it has
become necessary for Janata Bank Ltd. to focus its' attention towards the improvement of
various customer services and increase the efficiency to attract and also retain the customers.
That is why it is quite justified to make an in-depth study about its operation and evaluate
service provided by this bank and scope for its improvement. Since marketing is the area of
my study, Bank Remittance seems preferred to me rather then any other banking activities to
study. Thus I think, this study will vehemently help me to go forward and improve my career
path.

4.3 Bank Remittance


One of the most important aspects of the Commercial Banks is rending services to its
customers. Among different services render by a Commercial Banks to its customer
remittance facilities are very well known and popular to the customers. The word
"Remittance" means sending of money from one place to another branch within the country.
There are two types of Remittance: Inward & Outward. The Commercial Banks Remittance
facilities enable its customers to avoid risk arising out of theft or loss in carrying cash money
from one place to another or making payment to some one in another place. Banks take the
risk and ensure payment to the beneficiary in exchange of a little bit benefit known as
Exchange or Commission.

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Different parties in money transfer process:


Normally four types of parties are related to money transfer process:1. Customer [who send money]
2. Issuing Branch [This branch take money from customer and order to pay money to
other bank.]
3. Paying Branch [This branch pay money to the beneficiary]
4. Payee or Beneficiary [Who get money]
Major works of this department:
The following works are done in this department Issuing & Payment of Demand Draft, Payment Order
All related correspondence with other Branches & Banks.
Compliance of Audit & Inspection.
Balance of D.D.& P.O. payable & D.D.& P.O. Paid with advice.
Payment of Incoming TT.
Issuing, encashment of Pay Order and maintenance of record and proof sheet.
Issuance of Local Drafts
Issuing and encashment of BCD.
All related correspondences.
Issuing of Outgoing TT.
Issuance of T.T.ICA, IBCA & IBDA.
Inward foreign remittance collection.
Outward foreign remittance activities.

4.4 Janata Bank Ltd.s Remittance Activities


JBL has its branches in the major cities of the country and therefore, it serves as one of the
best mediums for remittance of funds from one place to another. This service is available to
both customers and non-customers of the bank.
JBL perform both Inward and Outward remittance activities. We can divide remittance
activities of Janata Bank Ltd. By the following wayRemittence
activites at
JBL
Local
\Inland
Remittence

Inward
Remittence

Outward
Remittence

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Foreign
Remittance

Inward
Remittence

Outward
Remittence

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4.5 Local or Inland Remittance Activities of JBL


Local or inland remittance department of JBL performs an important role to send money from
one place to another branch within the country.
We can easily understand the remittance activities in a Bank by the following
Place-2

Place-1

4.
Beneficiary
(Money Receiver)

1.
Customer
(Money Sender)

Go to
Remittance
department

2.
Issuing Branch
(Taking money with
bank commissions)

Pay
Money

Order Send

3.
Paying Branch
(Getting order from
issuing Branch)

Figure4.1: How a bank perform its remittance activities

By this way money is sent from one branch to another branch within the country. Here in
place-1; any customer pays money with bank commission at the Issuing Branch and
Beneficiary collect money from Paying Branch at Place-2.
In this case, the Issuing Branch only sent a written document to the Paying Branch in order to
pay the money to the Beneficiary.
Money is sent from one branch to another branch within the country by following wayBank remittance may be categorized as Demand Draft (DD)
Mail Transfer (MT)
Telegraphic Transfer (TT)
Payment Order (PO)
Traveller Cheques.

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Telegraphic
Transfer (TT)
Demand
Draft (DD)
Inward
Remittance

Payment
Order (PO)
Mail Transfer
(MT)
Traveler
Cheques.

Local or
Inland
Remittance
Activities of
JBL

Telegraphic
Transfer (TT)
Demand
Draft (DD)
Out ward
Remittance

Payment
Order (PO)
Mail Transfer
(MT)
Traveler
Cheques.

Figure- 4.2 : Local or Inland Remittance Activities of JBL

The following register books are to be maintained for remittance concern: DD. MT. TT Advice Register
DD Payment registers Day Book
TT Payment Register Book
Ex-Advice Payment Register Book
Above all this service is performed by the Remittance department efficiently.
Here, I am now explaining in brief the process and activities of local remittance in JBL and
JBL Rajanigondha Super Market Branch, Dhaka as well.

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4.6 Demand Draft (D.D.)


Demand Draft is an instruction payable on demand. It is negotiable instrument issued by the
branch Bank containing an order to another branch of the same Bank to pay a certain sum of
money to a certain person or order on demand. This instrument can be purchased by a
customer from a particular Bank branch for himself or for beneficiary and can handed over to
the purchaser for delivery to the beneficiary. The payee or beneficiary will claim the proceeds
of the instrument by producing the same to the concerned paying branch. Demand Draft may
be paid in cash to the payee on proper identification or the proceeds may be credited to his
account. Banks issue drafts for a nominal commission. The commission depends upon the
amount to be transmitted. The purchaser of the draft needs not to be a customer or account
holder of the Bank. Draft can be crossed also.
Sample of Demand Draft
No. D.D. 012345

Janata Bank Ltd.


.Branch

Data //

On demand pay to .. Or
Order the sum of . Taka(..)
for value received.
Janata Bank Ltd.
..

Officer

For Janata Bank Ltd.


Manager

Figure4.3- Sample of Demand Draft

After analyzing this sample Demand Draft we identify the following feature1. Serial Number (No. D.D. 012345)
2. Branch Name
3. Amount of money (Numerical)
4. Date of Time
5. Name of Beneficiary
6. Amount of money (in ward)
7. Two Officer signature (with P.A. number)
Conformity and inconformity between Cheque and Demand Draft.
Explanation
1. Meaning

2. Facility

Cheque
A cheque is an unconditional
order directing the banker to
pay a certain sum of money
only to or to the order of a
certain person.
The current account and
saving account holders get a

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Demand Draft
A draft is an order to pay money
drawn by one office of a bank
upon another office of the same
bank for a sum of money payable
to order on demand.
Draft is issued to anyone even to
non-account holders.

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cheque facility.
3. Purpose
Cheques are used to make
payments
or
to
settle
transactions. There is no
certainty of payment in the
case of cheques as they can be
dishonored or payment can be
stopped.
4. Drawer
In case of cheque, the drawer
is the customer of the bank.
5. Bank charges The bank may not charge for
issuing the cheque book.
6. Dishonour
Cheques can be dishonored
for various reasons.
7. Stopping of In case of cheque, the drawer
payment
can ask the bank to stop
payment of the cheque even if
it is delivered to the payee.
8. Popularity
Cheques are very common
and
popular
mode
of
payment.
9. Clearance
In case of cheque, there is a
need for clearance.
10. Parties
Three parties are involved in
involved
cheque transaction viz., (a)
Drawer, (b) Drawee, and (c)
Payee.

The main purpose of a draft is to


transfer money from one place to
another or to guarantee the
certainty of payment to the payee.

In case of draft, the drawer is the


bank itself.
The bank charges a nominal fee or
commission to issue a draft.
There is no question of
dishonoring of draft.
In case od draft, the purchaser of
the draft can ask the bank to stop
payment before the draft is
delivered to the payee.
Drafts do not enjoy much
popularity as compared to
cheques.
In case of draft, there is no need
for clearance.
Two parties are involved in draft
transaction viz., (a) Drawer, and
(b) Payee.

4.6.1 Issuance of Demand Draft


While issuing demand Draft, an official must be confirmed about the existence of the Bran
where the DD is to be issued or drawn as asked for by the applicant. Application on Banks
prescribed form (Remittance-226) for DD be obtained from the applicant duly filled and
signed by then. Thereafter, Applicant will be asked to deposit the amount or DD and
exchange Commission commuted correctly at the prescribed rate. On receipt of cash voucher
will be passed and scrolled by the officers. DD will be issued and recorder to the DD issues
register filling the appropriate columns. Test number (if required) is affixed on both DD and
Advice as per instruction. It is mentionable here that DD application is treated as Credit
Voucher or SBG A/C (IBT A/C) and reported to HO, Recon, Division showing credit entry
against contra Branch (paying Branch). The minimum exchange of demand drafts or Bank

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Drafts is Tk. 20/- (including VAT Tk. 3/-) for the amount of Tk. 1 to Tk. 20000.After that
that exchange is charged Tk. 1/-for each Tk. 1000/-, and VAT is 15% of the commission.
The voucher will be passed by the following way- [Issuing Branch]
Cash Transfer

Cheque Transfer

Transfer
order
Mail/Letter

Dr.

Dr. : Partys A/C , Cheque

Dr. : Partys A/C [FormA/C- No.]

: Cash A/c

Cr. : Income A/c ;


Commission on
Remittance

Cr. : Like as Cash

by

Cr. : Like as cash


[Partys app. To be
attached with vouchers]

For any amount of DD issued, a relative DD Advice and sent to paying branch where the
Advice converted into Voucher.
In an advice we find following items:
1. Name of Issuing Branch of JBL and code number.
2. Name of Drawee or Paying Branch of JBL and code number.
3. Date
4. Advice No.
5. D.D. No.
6. Beneficiary name
7. Amount of money both numeric and word.
8. Authorized signature.
This advice is done four copies. First two copies is send to the Drawee/Paying branch, third
copy is send to the Head Office (HO) with daily extracts and the fourth copy is adjoining in
Draft advice Books as an office copy.
Draft advice Book normally printed by special ink and it have a serial number.

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Janata Bank Ltd.


(In Quadruplicate)
Computerized Inter Branch Transaction Credit Advice
(For Demand Draft Only)
Name of Inter Branch Transaction A/C Sub Head

From
Originating Br.

To
Responding Br.

D.D. No

Advice No.
Code No. of the Sub Head of
Inter Br. Transaction A/C.

Name of the Region of


Originating Br.

Originating Br.

Originating Date

Name of the Region of


Responding Br.

Responding Br.
Code

Transaction Code

Particulars

Amount

Total Taka (in wards)


Prepared By

.
Officer (PA No.)

Officer (PA No.)

PORTION ABOVE THIS MUST BE FILLED IN BY THE ORIGINATING BRANCH


Responding Br. Seal
DATE

DEBIT

----------------- RESPONDING

INTER BRANCH TRANSACTION RESPONDING


A/C. SUB HEAD AMOUNT AND
BR. CODE
PARTICULARS AS ABOVE.
Prepared By

Officer (PA No.)

Officer (PA No.)

Quadruplicate copy to be retained by originating Branch as Office Copy. Accts. : 76 (504)


B.M. 5-80.
Figure-4.4: Sample of Demand Draft advice Book

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The client will fill up the Demand Draft Application form.
Teller will receive the cash against the Demand Draft including the Charges & Vat as per
schedule of charges in case the party pays in cash. Teller will put the received stamp on the DD
application & prepare IDT for the entire amount. DD application and IDT to be submitted to the
Remittance Department for issuance of the DD.

For Issuance of DD against cheque or partys instruction, respective account will be debited after
verification of customers signature by the Cash Department.

The Demand Draft shall be prepared Branch wise controlling number will be given on the draft
besides the printed numbers putting an oblique (/) in between. The amount of draft will be
protecting graphed. The description of the DD will be recorded in the DD issuing Register.

The draft number should be written on the voucher & DD Application form.

Draft should be signed jointly by the GB Head & another authorized signatory with P.A. number.

Test is required for money transfer value of Tk.50,000.00 or over. The tested message will be
sent to the paying branch through Fax or E-Mail. Test no. should be written on the CIBTA and on
the face of the Demand Draft in Red Ink.

The CIBTA should be prepared in triplicate. Original to be sent to the drawee branch. Second
copy for the branch accounts department and the third copy should be retained by the Remittance
Department (in the CIBTA book) for ready reference.

Concern Officer must ensure that acknowledgement is obtained from the client or his authorized
representative on the counter folio and issuing register.

Figure4.5: The process of issuance of D.D.

4.6.2 Demand Drafts received for Collect


a) All the Inward Demand Drafts will be received by the Managers or Accountant and
examine by him to ensure that there is no unreasonable gap between the dates of purchased

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receipt at branch. Cases of delay will be reported to the Head Office & a copy to the Regional
Office of the purchase office. These will be numbered with D.D.R numbers, promptly
acknowledge, entered individually in the Demand Draft received for realization register,
without passing any entries.
b) Clearing cheque and cheque on the branches will be paid or returned unpaid the same day.
Other Demand Drafts entered in the register will be presented or payment to the drawee
through the cash department.
c) On realization the proceeds together with the overdue interest, if any Demand Draft will be
credited to the purchasing offices in the Janata Bank General Account sending Transfer
Responding, Advises (TRA) and reported to Head Office on schedule. Unpaid DDR's will be
returned to the purchasing offices along with the objection Memo.

4.6.3 Why D.D. Advice is used in Drawee/ Paying Branch.


When Drawee Branch gets a D.D. advice then this branch will take it as a voucher and the
paying banker will verify the genuineness of that advice by way of verifying the number and
signature. They will also record this information in their D.D. payable register. Then they
passed following voucherDr. : CIBT A/C (Drawee branch zone)
Cr. : Bills Payable A/C : D.D. Payable

4.6.4 Procedure of Payment


Proceeds of Demand Draft is received by the paying bank as and when it responds the
relative advise on the receipt of DD Advises from different branches, the paying banker will
verity the genuineness of the Advice by way of verifying the number and signature. Beside
this, Drafts payable can be made without the Advice of issuing Bank and on that time the
payment is called Acceptance Payment. Before making payment of the DD, the branch will
ascertain the genuine of its issuance as well as the genuine of the payee. Open Drafts may be
paid on proper identification of the payee and crossed Drafts can never be paid in cash over
the counter.

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The process of entry D.D. PaymentIf the payment is to be made If the payment is to be made
after receipt of the Advice
before receipt of the Advice
If the amount of Dr. : Bills Payable A/C , D.D. Dr. : Sundry Assets A/C. D.D.
Paid W/A
draft is pain in cash Payable
Cr. : Cash A/C

Cr. : Cash A/C

If the amount of Dr. : Bills Payable A/C, D.D. Dr. : Sundry Assets A/C , D.D.
paid W/A
draft is pain by Payable
clearing House
Cr. : CIBT A/C Local Office Cr. : CIBT A/C Local Office
If the amount of Dr. : Bills Payable A/C, D.D. Dr. : Sundry Assets A/C , D.D.
paid W/A
draft is pain by Payable
transfer
(from
Cr. : Partys A/C or CIBT A/C
Cr. : Partys A/C or CIBT A/C
Account)

Here, we find that, sometime Drawee Branch is obliged to pay money (Taka) before receive
draft advice. In this case this money is provided from Sundry Assets A/C, D.D. paid W/A.
When that type of advice will get then following voucher will be passed-

Taka In Million

Dr. : CIBT A/C , (Issuing Zone)


Cr. : Sundry Assists A/C , D.D. Paid W/A

2000
1500
1000
500
0
D.D. paid without advice (Local)
D.D. Paid without
advice(Foreign)

2009
1399.48

2010
1580.965

1567.6

616.95
Year

*Source: Janata Bank Ltd. ; Annual Report 2010; Sundry assets; page-147
Graph 4.1: D.D. paid without advice both local and foreign from 2009 to 2010

After analyzing the Graph-4.1we find that in 2010 JBL paid 1580.965 million (Taka)
before receiving D.D. advices which is higher than 1399.48 million in 2009.

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4.6.5. Duplicate DD
In some cases, it may be happened that the DD is lost and reported to the concerned
Branches. In this case, issuing Branch will communicate with the paying Branch and will
obtain confirmation regarding non-payment of the DD & Payment Branch will exercise
cautions against payment of DD including caution marking on the respective DD advice with
the words "Care Reported Lost" issuing Branch will then issue a duplicate DD on obtaining
of indemnity bond from the Applicant signed by two persons known to the Bank s sureties. In
such case, duplicate DD be marked with the words: "DUPLICATE IN LIEU OF ORIGINAL
NO ......."
Issuance of Duplicate Payment Order
Duplicate pay order may be issued on receipt of written request of the purchaser along
with GD at local police station. Signature of the purchaser should be verified from the
original application.
Issuing branch should obtain an indemnity bond on a non judicial stamp paper or
adhesive stamp for the adequate value in presence of at least two witnesses. The
Branch will thereafter write to Head Office for their approval to issue duplicate
payment order.
The Head office on receipt of the request from the issuing branch will immediately
issue caution circular from Cash Against Documents (CAD) to all the branches
regarding loss of the pay order asking them to record stop payment. The Head Office
will thereafter issue clearance to the issuing branch for issuing a duplicate draft in lieu
of original reported lost.
On receipt of clearance from the Head Office, the issuing branch will issue a pay
order
clearly
the
words
DUPLICTAE
ISSUED
INLIEU
OF
ORIGINALPAYMENT ORDER-. DATED------ in bold letters on the top of the
front page of the payment order. The charges for issuance of duplicate pay order
should be realized from the client.
A note to this effect is made on the original application on form and on the Pay Order
Issued Register.
Insurance of duplicate DD be noted against the entry of original one.

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4.6.6 Cancellation of Demand Draft


In some cases, the purchaser of the bank draft may ask the issuing branch to return the
amount of DD stating its non requirement. In these cases, the issuing Branch will obtain
written application from the purchaser whose signature must be tallied with the signature
obtained earlier. An amount Tk. 25/- be recovered from the purchaser as cancellation charges
and will be Credited to the Commission A/C the purchaser will acknowledge receipt of the
proceeds writing the words received payment by cancellation and will sign. One revenue
stamp to be affixed on the revenue of the Draft. In this case, payment is made by Debit to
PBG A/C and a relative cancellation advice is sent to the Issuing Branch.

1400000
1200000

Taka

1000000
800000
600000
400000
200000
0
D.D. Cancellation

2009
456725

2010
1361711
Year

*Source: Janata Bank Ltd. ; Annual Report 2010; Sundry assets; page-147
Graph 4.2 - Total D.D. Cancelled at JBL in 2009 and 2010

The Graph 4.2 shows that, the withdrawal of Demand Draft (D.D.) at JBL has been
increased Taka 13,61,711/- in 2010 than Taka 4,56,725/- in 2009.

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4.7 Payment Order (P.O.)


Bank's payment order is an instrument which contains an order for payment to the paid to
effect local payment whether on behalf of the Bank or its constituents. In the beginning stage,
PO was issued only to effect local payments of Bank own obligations. But, at present, it is
also issued to the customers whom they can purchase to deposit as security money or earnests
money. The Bank's payment orders are in the form of receipts and issued by joint signature of
two officials. It ensures payment to the payee as the money deposited by the purchaser of PO
is kept in the Bank's own A/C named "Payment Order A/C". Payment of this instrument to be
made from the branch it has been issued. It is not transferable and, therefore, it can only be
paid to: The payee on identification.
The payee's Banker, who should certify that the amount would be credited to payee's A/C.
A person holding the letter of authority from the payee whose signature must be
authenticated by the payee.
The purchaser by cancellation provided the original PO is surrendered by him to the Bank.

Charges of P.O.
Amount of P.O.
01-20,000
20,001-100,000
100,001-500,000
More than 500,000

No. P.O. 012345

Commission

VAT 15% on
Commission

Total
Taka

20
30
50
100

3
5
8
15

23
35
58
115

Janata Bank Ltd.


.Branch

Data //

Pay
to

.. Or Order the sum of .


Taka(..)
for value received.
For Janata Bank Ltd.
Officer

Manager

Figure4.6- Sample of Payment Order

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After analyzing this sample Demand Draft we identify the following feature1.
Serial Number (No. D.D. 012345)
2.
Branch Name
3.
Amount of money (Numerical)
4.
Date of Time
5.
Name of Beneficiary
6.
Amount of money (in ward)
7.
Two Officer signature (with P.A. number)

4.7.1 Issuance of Payment Orders


Against Cash:
1. The client shall fill up the Payment Order Application Form and deposit the cash over the
counter.
2. After receiving the cash Teller will put the received stamp on the application and prepare
Inter Data Transfer (IDT) (Cash suspense). IDT to be submitted to the concern officer for
issuance the pay order.
3. In case of Issuance of Payment Order against Cheque or by debiting client account,
signature of the authorized person should be verified before debiting the account.
After issuing the payment order concern officer should do the followings:
a) Description of payment order should be recorded in the Register.
b) Payment order number (both receipt & Micro bank) should be written in the
application and the voucher.
c) Ensure that the Branch seal is given on the top of the payment order & protect
to graph and the amount is written in figure & in words.
4. Payment Order will be signed jointly by the GB Head along with another authorized
Signatory.
5. Before hand over to the customer, concern officer must ensure that acknowledgement is
obtained from the client or his authorized representative on the counter folio and issuing
Register & vouchers are sent to Accounts Department at the end of the day.
The following entries are passed:
Debit:

Partys Account (cheque) or Cash A/C


Credit: Bills Payable Account Pay Order.
Credit: Income Account-Commission-PO/TT/DD
Credit:
Vat

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Taka in Million

Payment Order Issued


2600
2400
2200
2000
Payment Order Issued

2009
2152.28

2010
2442.26
Year

*Source: Janata Bank Ltd. ; Annual Report 2010; Bills Payable; page-153
Graph 4.3- Total Payment Order Issued at JBL in 2009 and 2010
The Graph 4.3 shows that, the issuance of Payment Order (P.O) at JBL is increased
Taka 2442.26 Million in 2010 than Taka 2152.28 Million in 2009.

4.7.2 Duplicate PO
As Bank's Payment Order is not transferable, Duplicate thereof is issued to the purchaser
without obtaining letter of indemnity provided they confirm in writing that the originals have
been lost and that these will be returned to the Bank whenever traced.
Issuance of Duplicate Payment Order
Duplicate pay order may be issued on receipt of written request of the purchaser along
with FIR/GD at local police station. Signature of the purchaser should be verified
from the original application.
Issuing branch should obtain an indemnity bond on a non judicial stamp paper or
adhesive stamp for the adequate value in presence of at least two witnesses. The
Branch will thereafter write to Head Office for their approval to issue duplicate
payment order.
The Head office on receipt of the request from the issuing branch will immediately
issue caution circular from CAD to all the branches regarding loss of the pay order
asking them to record stop payment. The Head Office will thereafter issue clearance
to the issuing branch for issuing a duplicate draft in lieu of original reported lost.
On receipt of clearance from the Head Office, the issuing branch will issue a pay
order
clearly
the
words
DUPLICTAE
ISSUED
INLIEU
OF
ORIGINALPAYMENT ORDER-. DATED------ in bold letters on the top of the
front page of the payment order. The charges for issuance of duplicate pay order
should be realized from the client.

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A note to this effect is made on the original application on form and on the Pay Order
Issued Register.

4.7.3 Cancellation of Payment Order


1

On receipt of application along with the Pay Order, signature of the applicant should be
verified from the original application. It must be ascertained that no duplicate P.O. has
been issued against the same.
2 No refund will be made to the purchaser against duplicate without proper endorsement
from the beneficiary of P.O. However, if the payment order not submitted to the
beneficiary and the payment order not utilized amount may be refunded as per purchaser
written request.
3 The following entries are passed:
Debit: Bills Payable Account Pay Order issued.
Credit: Partys Account.
4
5
6

The Payment Order is cancelled by tearing off signatures thereon and a note to this effect
is made on the application form and on the Register. Tee entry is to be reversed.
The cancelled Payment Order should be attached with the debit voucher.
If the Payment Order is placed through clearing by the purchasers Bank, in that case the
Collecting Banks endorsement must confirm that purchasers account is credited.

4.8 Mail Transfer (M.T.)


The facility of transforming money by Mail is available to customers having some sort of an
account with the Bank. The remitter deposits the amount to be transferred with small
commission with the remitting Branch. It is an Advice issued by a Branch to another Branch
for crediting the specified amount to the account of the payee maintained with them. It is a
non-negotiable instrument and generally is not handed over to the customer rather sent
through Post Office to the concerned Branch for credit to the respective amount. In some
cases, proceeds of MT. may be paid to the beneficiary by issuing Payment Order (PO) if he
maintains no account with that branch. In such cases, Full Address of the beneficiary requires
to be mentioned by the applicant. On that time, MT itself treated Advice as well as credit
voucher also of the paying branch; no separable advice is issued by the issuing branch. On
receipt of the MT genuineness is determined by means of verification of signature and test
number (if any payment is made by debit to issuing branch through PBG A/C and reported to
Head Office for reconciliation. Remittance or money by Mail Transfer is relatively cheaper,
quite safer and convenient. Mail Transfer is affected not only for remittances within the
country but also for international remittances. MT for local transfer (say, within the area of

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Dhaka) a special MT register book is maintained as in the case like DD. MT normally issued
from branch to branch of the same Bank. An extra document is needed for Mail Charge.
Normally the Mail is given Tk. 25/- for the amount Tk. 50,000/- and above. Below 50,000/there is no any Mail Charge. The commission charged for MT is given below
Tk. 1 up to Tk. 49,000/- Tk. 15/Tk. 50,000/- and above Tk. 40/Example Receipt (MT/TT)

Date: ......................
Payees Name: ................................................................
Branch Name: ...............................................................
Amount: ................................... Exchange...................
Commission: ........................ Postal Charge: .............

Figure4.7: Example Receipt (MT/TT)


The following register books are to be maintained for remittance concern: M.T. Advice Register
M.T Payment register Day Book
M.T Payment Register Book
Ex-Advice Payment Register Book

M.T. Paybale
4000000
Taka

3000000

2000000
1000000
0
M.T. Paybale

2009
1507414

2010
3647007
Year

*Source: Janata Bank Ltd. ; Annual Report 2010; Bills Payable; page-153

Graph 4.4 - Total M.T. payable at JBL in 2009 and 2010

The Graph 4.4 shows that, the total M.T. Payable at JBL is increased Taka 36, 47,007/in 2010 than Taka 15, 07,414/- in 2009.
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Process of Payment:
After receiving the MT advice it is recorded to the Inward Mail Register. Then it is recorded
in MT payable register and following voucher is passed.
Dr. : CIBT A/C (Drawer zone )
Cr. : Bills Payable A/C , MT Payable
When money transfer to beneficiary A/CDr. : Bills Payable A/C , MT Payable
Cr. : Partys A/c

4.9 Telegraphic Transfer (T.T.)


Telegraphic transfers are affected by telegram, telephone, or telex as desired by the remitter.
Transfer of founds by telegraphic transfer is the most rapid and convenient but expensive
method. For this, telegraphic technologies need to be available in all the areas. In this case,
the issuing branch sends a message telegraphically to credit the specified amount to the
beneficiary through his A/C maintained with them or by issuing TT, PO, if A/C is not
maintained by the beneficiary, Telegraphy message may be codes but must be tested. Paying
branch will decode the TT being satisfied on the contents will make payment by debit to
issuing branch entering the TT into TT Register and preparing a credit voucher for credit to
the payees A/C. But, for big amount of TT or in case of any doubt, confirmation must be
obtained before making payment.
Charges of TT are as follows:
Amount of TT

01-20000
50000
100000

Commission

25
50
100

VAT 15%
on
Commission
8
15

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Telephone / Mail
Charge

Total
Taka

30
30

25
88
145

50

Janata Bank Limited


Remittance Activities; A Study on Janata Bank Ltd

4.9.1 Transfer against Cash


1
2
3

The client shall fill in and sign the T.T. Application Form and deposit TT amount
over the cash counter including the commission/VAT/Postage.
After receiving the cash Teller will prepare IDT (Cash suspense) for the entire
amount and submit to Remittance Department.
Remittance Department will prepare CIBT Account (Computer Inter Branch
Transaction Account) to the Drawee branch. Each CIBTA shall have outward
number. Concern officer will write the remittable amount and the name of the
beneficiary, account number and the Beneficiarys Bank name and branch clearly in
the CIBTA. Money transfer value of Tk.50, 000.00 or over test number shall be
applied on the top of the CIBTA in Red Ink. The IBCA should be signed jointly by
the Branch Head and other authorized signatory. CIBTA to be sent to the drawee
branch by FAX or E Mail when FAX is not available or become out of order.
CIBTA should be prepared in triplicate. The original should be sent to the drawer
branch, second copy to be submitted to branch accounts department and the third
copy will be retained by the remittance department in the CIBTA for ready reference.
Any subsequent corrections or alteration of the TT text must be accompanied by
Nil test along with the cautioning words PLEASE AVOID
DUPLICATION/DUPLICATE PAYMENTS.

4.9.2 Payment against Telegraphic Transfer


1

Incoming TT (CIBTA) may be received through Fax or E-Mail when Fax is not
available or become out of order. After receiving the message (CIBTA) from the
remitting branch concern officer will acknowledge receipt of the said transfer and
verify the signature. Amount for Tk.50,000.00 or above Test no. should be provided
in the CIBTA. GB Head will verify the authenticity of the test and affix a stamp Test
Agreed. And sign. Contents of the incoming TT message shall be recorded in the
Incoming TT Register.

Taka

T.T. Payable
80000000
70000000
60000000
50000000
T.T. Payable

2009
62465871

2010
73011561

Year
Source- Janata Bank Ltd. ; Annual Report 2010; Bills Payable; page-153

Graph 4.5 - Total T.T. payable at JBL in 2009 and 2010

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The Graph 4.5 shows that, the total T.T. Payable at JBL is increased Taka 73011561/- in
2010 than Taka 62465871/- in 2009.

Partys account is credited as under:

Debit:
Computer Inter Branch Transaction Account (CIBTA) -90101006
Credit:
Bills Payable A/C, TT payable
Debit : Bills Payable A/C, TT payable
Credit: Customer/ Partys A/C

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4.10 Financial Data Regarding Local Remittance of JBL


Rajanigandha Super Market Branch (RGSM Br.) Dhaka
4.10.1 Contribution of JBL Rajanigandha Super Market Branch Dhaka in
Inward Local Remittance earning in 2011 from various fields of Local
Remittance activities.
No. of Transaction
Demand Draft (DD)
1040
Mail Transfer (MT)
370
Telegraphic Transfer (TT) 7080
Payment Order (PO)
2340

%
10%
3%
65%
22%

Total

100% 728,316

10830

Amount (Tk.)
72,832
21,849
473,405
160,230

Table 4.1: JBL RGSM Branch Dhaka Inward Local Remittance earning in 2011

Amount
500000

Taka

400000
300000
200000
100000
0
Amount

DD

MT

TT

PO

72832

21849

473405

160230

Graph 4.6 : JBL RGSM Branch Dhaka Inward Local Remittance earning in 2011
After analyzing the above Table 4.1 and Graph 4.6, we find that the highest amount of
remittance is earned from TT at RGSM Branch and then the PO, DD and MT
departments come respectively.

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4.10.2 Contribution of JBL Rajanigandha Super Market Branch Dhaka in


Inward Local Remittance earning from 2008 to 2011
No. of Transaction
Amount (Tk.)

2008
9987
682,450

2009
11015
712,054

2010
10096
708,253

2011
10830
728,316

Table 4.2-: JBL Rajanigandha Super Market Branch Dhaka in Inward Local Remittance
earning from 2008 to 2011

Taka

800000
700000
600000
500000
400000
300000
200000
100000
0
No. of Transaction
Amount

682450

9987

712054

708253

11015

10096

728316

10830

2008

2009

2010

2011

9987

11015

10096

10830

682450

712054

708253

728316

Year

Graph 4.7 : JBL Rajanigandha Super Market Branch Dhaka in Inward Local
Remittance earning from 2008 to 2011
The Graph 4.7 shows that, Inward local remittance through JBL Rajanigandha Super
Market Branch Dhaka. up to December 2011 is Tk.728316/- which is higher than inward
foreign remittance is Tk. 708253/- in 2010. Inward local from JBL Rajanigandha Super
Market Branch Dhaka reached record high of Tk. 712054 million in 2009 against
Tk.682450 million in 2008 and continue to play an important supporting role in
strengthening the economy of the county Janata Bank ltd.

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4.11 Clearing House


Clearing House is an organization of banks constituted for the purpose of settling inter-bank
liabilities due to transfer of deposits by a customer of a particular Bank to that of another
Bank. Every scheduled Bank is a member of the Clearing House. Representatives of all the
scheduled banks assemble at the Clearing House on each business day with Bank-wise list of
cheques, drafts etc. received from customers and drawn on different Banks under the
jurisdiction of the Clearing House. The Clearing House sits at the appointed hour on all
working days under the leadership/supervision of a House Super of the Central Bank or its
agent as the case may be, and works within the regulations framed thereof on the basis of
prevailing banking practices. At present the clearing house sits four times for settling
payment of cheques, drafts, bills etc.
1. 1st clearing house sits at 9.30 a.m. for delivery and receipt of the instrument from each
other.
2. Same Day Clearing House sits at 11.00 a.m. for quick settlement of payment of the
instruments of Tk.5.00 lac and above drawn on other local branches within the 5 k.m. area.
3. 1st Return House for the same day clearing sits within the transaction hours i.e. by 3.00
p.m.
4. 2nd Clearing Return House sits for return of the instruments after 5.00 p.m.
At present central bank provides an Automated Clearing House to settle the daily transactions
against receipt of instruments through deposit slips for collection of funds through the use of
most modern electronic terminals/computer situated at banks who are members,
representatives or associates of the clearing systems. The net dues receivable or payable
arrived at after off-setting the total amount of the instruments delivered, are adjusted through
the respective banks clearing account maintained with the Central Bank or its agent.

4.11.1 Functions and Procedures:


On receipt of the cheques, drafts, bill of exchange etc. by the Cash Dept. for clearing
purpose, the respective Teller/Cashier affix Seal/Stamp Special Crossing immediately on
the top portion of the instruments in the left hand corner on the face of the said instrument in
order to ensure the safe transmission of the money to the Payees A/c. The clearing
department Affixes clearing seal/stamp with date on the face of the instruments. Then the
clearing cheques/instruments are given proper endorsement by putting recorded signature on
the back of the instruments through the authorized officials/representatives of the bank
branch.

Outward clearing:
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Accounting Entries: Clients depositing cheques/instruments of other banks for crediting the
proceeds in their Accounts i.e. called outward clearing:
Dr. : Clearing Adjustment A/c
Cr. : Respective clients A/c (voucher deposit slip)
Cr. : Other branches by responding CIBTA

Outward clearing cheques returned:


Dr. : Respective clients A/c
Dr. : Other Branches through IBDA (originating)
Cr. : Head Office/Balance with Bangladesh Bank A/C (if it is on line posting)
Messengers of different branches bring instruments drawn on other Banks to the clearing
section of Local Office.
Bills Section of JBL Local Office also sends the instruments drawn on other Banks to the
clearing section for collection.
The clearing stamps are affixed on the instruments and endorsed
The particulars of these instruments are entered in the main schedule of banks through
NIKASH22 software and inserted in floppy disc.
The diskettes along with the instruments are carried to the clearinghouse. After going
there the concerned officials of JBL gives the instruments to the representative of
respective banks.
Claims of JBL on other banks are set off by Bangladesh Bank through debiting other
banks account and crediting JBL account.
This function is done in the first house

Inward Clearing:
Dr. :Respective Client (voucher cheques/other instruments - for Honored Figures.)
Dr. : Other Branch CIBTA (responding)

In case of Inward clearing cheques return:


Dr. : Head Office (Balance with Bangladesh Bank A/c) (if it is on line posting)
Cr. : Clearing Adjustment A/c

The instruments drawn on JB are received from other banks in the clearinghouse.

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The amount and numbers of instruments are entered in the house from the main schedule
of respective banks.
The instruments with schedules are arranged branch wise
The instruments are sent to branches concerned for clearance and IBCA (inter branch
credit advice) are collected from them for honored cheque.
The dishonored instruments are sent back to respective banks through the second house.

4.12 Transfer Delivery


Exchange the value of a cheque/draft performed by one branch to another branch of a same
bank in a particular area is called Transfer Delivery.
Handling Procedure: Transfer Delivery procedure is two types:
A. Outward Transfer Delivery
B. Inward Transfer Delivery
Flow Sequence:

4.12.1. Outward Transfer Delivery (O.T.D.)


1. Receipt of instruments along with the pay-in-slip from customer.
2. Scrutiny of instruments and the pay-in-slip.
3. Affixed Seal:
i. Transfer Delivery Seal
ii. Special Crossing Seal
iii. Endorsement seal
4. Return of Counter foil to the Customer.
5. Separation of pay-in slip and instruments.
6. Sorting of instruments branch-wise.
7. Preparation of schedule one for each branch.
8. Enter into Transfer Delivery Register by serially.
9. Affixing Sl.No. which called Transfer Delivery No. & Transfer Delivery stamp on
Instrument & pay in slip.
10. Preparation of Transfer Delivery House and totaling thereof.
11. Balancing of transfer delivery i.e., aggregate of Transfer Delivery pay-in slip should
agree with total of Transfer Delivery House.
12. Release of pay-in-slip filing in pending file for credit to the respective accounts.
13. Delivery of transfer Delivery instruments with schedule to respective Br./T.D. House.

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4.12.2. Inward Transfer Delivery (I.T.D.)


4.12.2.1In T.D. House:
1.
2.
3.
4.
5.

Receive from various branches.


Verification of instruments by physical counting.
Sorting of branch wise. (drawn on)
Preparation of Lodgment voucher.
Delivery to drawee branches.

4.12.2.2In Different Branches.


1. Receipt of instruments with schedule and the advice (From Local Office)
2. Counting of instrument.
3. Totaling of amounts as per instruments and the schedule separately to balance
Transfer Delivery Received.
4. A single credit voucher is prepared for crediting the amount to Local Office, It will be
the responding entryDr. : Party A/C
Cr. : CIBT A/C
5. Release of instruments to the various departments for debiting the respective account.
6. Preparation of advice voucher against credit voucher.

4.12.3 Outward Transfer Delivery (O.T.D.) Return:


1. Receipt of unpaid instruments from the department concerned along with reason
memo.
2. Preparation of schedule.
3. Preparation of House.
4. Balancing of schedule and house by comparing their respective totals.
5. Preparation of voucher and advice.
6. Delivery to the messenger to Local Office (Instruments, Schedule)

4.12.4 Inward Transfer Delivery (I.T.D.) Return:


1. Receipt of unpaid instrument schedule and advice from local Office.
2. Counting of Instrument.
3. Jotting of amounts from the instruments and comparing the total with amount as per
advice received.
4. Responding of advice.
5. Preparation of party Debit Voucher
Dr. : Party A/C
Cr. : Local Office (CIBTA)
6. Recover of Postal Charges if applicable.
7. Entry into cheque return Register.
8. Return of instruments with reason memo to the party.

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4.13 Foreign Remittances Activates in JBL


On the era of globalization and free economy, business has changed its shape and has spread
all over world. Now a day, banking business has not been limited only within the commercial
banking; it spread with different types of money and finance related business. Investment
banking, merchant banking as a brokerage house, syndicated business, correspondent
banking, foreign trade, currency dealing etc. There is no national or geographic limitation for
the business. As the Bangladeshi citizens/ nationals are migrating all over the world, created
scope/ opportunity for money transfer business as a global phenomenon. In the post 9/11 era,
national and international regulators are more vigilant against Anti Money Laundering
(AML) and Anti Terrorist Financing, resulting appreciation for fund transfer through Bank
and registered Financial Institutions.
Previously, the educated and well-off class of the remitters (Expatriate Bangladeshis) used to
send money through banking as well as illegal channels, but the uneducated and so called
under-privileged class of the remitters generally does not have access to banking channel and
used to send money through illegal channel. Due to high service charges, the underprivileged
do not maintain account with schedule banks and cannot use the money transfer facility of the
banks. This unique characteristic of the remitters creates the scope of operation for Financial
Intermediates basically Exchange House Operations.
Importance: Demand for inward remittance has immense importance, because remittance, the
portion of international migrant workers earnings sent back from the country of employment
to the country of origin, plays a central/crucial role in the economy of our country. At the
same time with micro economic development process, as remittance often provide a
significant source of foreign currency, increase national income, finance import and
contribute to the balance of payment improvement. These wage earners' remittance helps
building external sector viabilities of our country. Inward remittance is relatively less volatile
source of foreign exchange. Expatriate Bangladeshi workers remittance contributes
immensely to the economy with strong positive impact on growth, employment and Balance
of payment.
Currently, inward remittance is higher than the combined flow of foreign aid disbursement
and foreign direct investment. Though increasing, the current growth rate of remittance is still
much lower than the total flow of migrants from Bangladesh.
Remittance Systems of Janata Bank Limited: To speed up distribution of remittance send by
various foreign banks and exchange companies Speedy Foreign Remittance Payment System
has been introduced in phases since May 2009. Currently, 860 branches of our bank are onlined with Speedy Foreign Remittance Payment System, through which remittances from
Foreign Banks/Exchange Companies are being paid/credited to beneficiaries account on the
same day. Till date, 53 Foreign Banks/Exchange Companies sending remittance to Janata

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Bank under Taka Drawing Arrangement with Janata Bank Ltd. Main Feature of Foreign
Remittance Payment System stated below:

For further expedite foreign remittance payment/distribution system Instant/Spot cash


payment system also introduced by our bank. It was started with Western Union on 2009.
Currently, numbers of Exchange Companies are operating their Instant/Spot cash operation
with us.

Table 4.3: Web-based Foreign Remittance Instant/Spot Cash Payment System (EFT).
There are two types of foreign Remittance Activities
1. Inward Foreign Remittance
2. Outward Foreign Remittance.
Janata Bank Ltd. is performed both inward and outward foreign remittance activities.

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4.14 Inward Foreign Remittance


In the case of in-ward foreign remittance the foreign currency is entered in Bangladesh.
Previously for transfer foreign currency the customer was must have an Account in Bank like
- Janata Bank Ltd. But in the present time a customer can get foreign currency without having
an Account in the respective branch or any Bank like- Janata Bank Ltd.
Country wise Foreign Remittance of JBL from 2004 to 2009
Figure in Million
Country

2004

2005

2006

2007

2008

2009

JanataEchange
Co., Italy

1182.5

2077.1

3102.1

3513

2289.8

144.8

5638

5666.7

9188.3

12548.8

16207.7

2279.5

2901.7

4714

6878.2

8738.1

Janata
Bank, 5196
UAE Branches
Other Exchange 2143.5
Co.
Kuwait

3468.6

4089.3

5652.6

7615.9

7780.1

6764.3

Saudi Arabia

4057.9

3762.7

3598.3

3025.2

4536

7718.2

Oman

1129.8

1095.6

1106.2

1171

1341.6

1038.7

Bahrain

785.2

817.4

853.2

834.5

916.7

716.1

Greece

537.9

697.9

591.5

524.5

UK

2213.3

6174.9

Qatar

196.1

190.8

149.2

173.6

200.6

118.9

United States

26.9

29.2

132.8

15.

222.3

285.7

Malaysia

1139.3

623.9

264.2

208.7

113.2

23.9

Singapore

0.2

0.4

5.3

0.7

20.2

98.1

Korea

23.2

2.5

Canada

166.7

6.6

7.2

Australia

1404

Other
sources 4556.4
(SWIFT/Telex)

5945.7

5288

5484.4

6272.1

6334.2

Grand Total

26572.8

29257.3

36788

45924.4

56190.1

24063.5

*Source: Janata Bank Ltd. Website


Table 4.4: Country wise Foreign Remittance of JBL from 2004 to 2009

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Year wise JBL contribution


60000
50000
40000
30000
20000
10000
0

2004
2005
2006
2007
2008
2009
2010
Year wise JBL contribution ($
24063.5 26572.8 29257.3 36700 45924.4 56190.1 52640
million)

Graph-4.8: Contribution of JBL in Foreign Remittance earning from 2004 to 2011


The Graph-4.8 shows that, Inward foreign remittance through Janata Bank Ltd. up to
December 2010 is Tk.52640 million which is lower then inward foreign remittance is Tk.
56,190 million in 2009. Foreign remittances from NBRs reached record high of Tk.
45924 million in 2008 against Tk.36788 million in 2007 and continue to play an
important supporting role in strengthening the economy of the county Janata Bank ltd.

The achievement of Janata Bank Ltd. in attracting foreign remittance as compared to


countrys performance is given below:-

2010
2009
2008
2007

Janata Bank Ltd


52,640 Million
56,190 Million
45924 Million
36788 Million

National
802,270 Million
738,773 Million
616442 Million
451890 Million

Percentage
6.56%
7.60%
7.45%
8.12%

*Source: Janata Bank Ltd. ; Annual Report 2010; Directors Report-Foreign Remittance; page-78

Table- 4.5: National Inward Remittance of Janata Bank Limited

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1000000

802270

800000

738773
616442

600000
400000
200000

451890
52640

56190

45924

36788
2010

2009

2008

2007

JBL Remittance

2010
52640

2009
56190

2008
45924

2007
36788

National Remittance

802270

738773

616442

451890

*Source: Janata Bank Ltd. ; Annual Report 2010; Directors Report-Foreign Remittance; page-78

Graph 4.9 National Inward Remittance of Janata Bank Limited

Percentage
10.00%
8.00%

8.12%

7.60%

7.45%

2010

2009

2008

2007

6.56%

7.60%

7.45%

8.12%

6.56%

6.00%
4.00%
2.00%
0.00%
Percentage

*Source: Janata Bank Ltd. ; Annual Report 2010; Directors Report-Foreign Remittance; page-78

Graph 4.10- National Inward Foreign Remittance of Janata Bank Limited

The above Graph 4.9 & Graph 4.10 shows that, Inward National Foreign Remittance up
to December 2010 was 802,270 Million and Inward Foreign Remittance through Janata
Bank Ltd. was 52640 Million, which was 6.56% of total countrys remittance. In 2009,
Inward National Foreign Remittance was 738773 Million where Inward Foreign
Remittance through Janata Bank Ltd. was 56190 Million, which was 6.56% of total
countrys remittance. In 2008 and 2007 Inward National Foreign Remittance were
616442 Million and 451890 Million respectably where Inward Foreign Remittance

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through Janata Bank Ltd. were 45924 Million and 36788 Million which was 7.45% and
8.12% of total countrys remittance respectively.
After analyzing the above chart, we find that the achievement of JBL in attracting
foreign remittance is increased year by year except 2009 and 2010 due to economic
crises. But on the contrary, the percentage of foreign remittance through JBL is
decreased year by year as compared to countrys foreign remittance.

Contribution to National Inward Foreign Remittance of Janata Bank Limited (3


months)
Months

National earning
(Millions U.S. $)

Janata bank
(Millions U.S. $)

Percentage

October
November
December

1039.48
908.79
1144.38

71.20
58.62
82.520

6.85%
6.45%
7.21%

Table-4.6: National Inward Foreign Remittance of Janata Bank Limited (Last 3 months of
2011)

1200

1144.38
1039.48
908.79

Million U.S. $

1000
800
600
400

82.52

58.62

71.2

200

National earning

October
1039.48

November
908.79

December
1144.38

Janata Bank Ltd.

71.2

58.62

82.52

Months

Graph 4.11- : National Inward Foreign Remittance of Janata Bank Limited (Last 3 months of 2011)

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Million U.S. $

7.21%

7.40%
7.20%
7.00%
6.80%
6.60%
6.40%
6.20%
6.00%
Percentage

6.85%
6.45%

October
6.85%

November
6.45%

December
7.21%

Months

Graph 4.12 : National Inward Foreign Remittance of Janata Bank Limited (Last 3 months of 2011)

The Graph 4.11 & Graph 4.12 show the comparison between inward foreign remittance
through Janata bank Ltd. and inward national foreign remittance of last three months
[October, November, and December] in 2011.
After analyzing the above charts and tables, we find that the achievement of JBL in
attracting foreign remittance is increased month by month in 2011. And on the
contrary, the percentage of foreign remittance through JBL is also increased month by
month as compared to countrys foreign remittance.

By reducing lead-time, has ensured quick delivery of foreign remittance, an NBR branch has
been opened to serve exclusively Non-resident Bangladeshis through Speedy Money
Remittance System with instant to the beneficiaries. Anybody willing to remit foreign
currency from any corner of the world can use wide network of the bank. The remittance
reaches to the beneficiary within 3 days without charging any commission. Our worldwide
network includes 4 branches in UAE, 2 exchange houses in Italy and correspondent
relationship with all the major Banks and all important trade centers of the world.
Recently Janata Bank Ltd. has launched its Speedy Foreign Remittance Payment System
which enables beneficiaries to receive their money within shortest possible time. The
beneficiary also gets information of remittance through automated S.M.Sgt.s a secured, easy,
cost effective and speedy way of remittance for the remitter. Janata bank Ltd. has signed an
agreement with Western Union Network to facilitate wide range of remittance of the globe.
Both the organizations make it possible to receive the money from about 300,000 locations of
200 countries instantly with prevailing mutual mechanism and workforce.
The Foreign Remittance department of Janata Bank Ltd. is equipped with a number of
foreign remittance facilities.

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Following are the types of foreign remittance facilities offered by Janata Bank Ltd. 1.
2.
3.
4.
5.

Collection of Foreign Demand Draft (F.D.D)


Issuance of travelers Cheques (T.C.)
Issuance of foreign T.T (Telegraphic Transfer)
Disbursement of the cash of incoming F.T.T.
SRC [Speedy Remittance cell]
a) SRC- to Account
b) SRC- to Instant/Spot cash.
c) SRC- TTR/ Payment Order (P.O.)
7. Janata bank Ltd. has signed an agreement witha) Western Union Network
b) IME Spot Cash
c) Placid Express Spot Cash
d) NBL pay out
e) Xpress money etc.
to facilitate wide range of remittance of the globe.

Following are the types of inward foreign remittance facilities offered by Janata Bank
Ltd.; Rajanigandha Super Market Branch Dhaka

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4.15 FDD [Foreign Demand Draft]


FDD means Foreign Demand Draft. FDD is used for both Inward and Outward foreign
remittance transfer. These types of inward FDD was issued in past when no online
transaction remained. Presently this is not popular due to its difficult procedure and more
time consuming.
In the foreign country, there are several agents who receive money on behalf of Janata Bank
Ltd. and send this money in Bangladesh (Janata Bank Ltd.) via FDD.Some agents area) BEC- Baharain Export Company.
b) Dollarco
c) Janata Export etc.

BEC- Baharain Export Company


No. F.D.D. 012345
Beneficiary
S.M. Razib Al-Mahmud.
.
With JANATA BANK LTD. ;Rajanigandha Super Market Branch Dhaka A/C
Taka
One Lac Only
.
Tk. = 100,000/Officer

Officer
Figure4.8: This is the simple of FDD.

When this type of FDD is collected by the Janata Bank Ltd. Rajanigandha Super Market
Branch, Dhaka then banker will verify the genuineness of the Advice by way of verifying the
number and signature. If the copy of FDD is verified successfully then the money is
transferred to the customers Accounts.

Taka

F.D.D. Payable
1000000
0
F.D.D. Payable

2009
728779

2010
601894
Years

*Source: Janata Bank Ltd. ; Annual Report 2010; Bills Payable; page-153
Graph 4.13- - Total F.D.D. payable at JBL in 2009 and 2010

The Graph 4.13 shows that, total F.D.D. payable through Janata Bank Ltd. up to
December 2010 is Tk.601894 which is lower than F.D.D. Payable is Tk. 728779 in 2009.

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4.15 SRC [Speedy Remittance cell]


SRC means Speedy Remittance Cell which is now most popular transaction system due to
less time consuming. This type of transaction make with the help of internet. Its also called
on-line banking system.
Janata Bank Limited has a network of 872 domestic branches in Bangladesh covering the
entire country including the rural areas. Remittance services are available at all branches and
foreign remittances may be sent to any branch by the remitters favoring their beneficiaries.
Remittances are credited to the account of beneficiaries instantly or within shortest possible
time with the help of SRC Speedy Remittance Cell.Janata Bank Limited has correspondent
banking relationship with all major banks located in almost all the countries/cities. Expatriate
Bangladeshis may send their hard earned foreign currencies through those banks or may
contact any renowned banks nearby (where they reside/work) to send their money to their
dear one in Bangladesh.
In this case, the foreign agent or Banks or Janata Banks foreign branch collect remittance
and send remittance to the Head Office (H/O) of Janata Bank Ltd. 110 Motijheel C/A
Dhaka-1000 via internet. They send an E-mail report with some information.
Some Common Information are1. Name of Issuer or customer.
2. Name of Beneficiary.
3. Name of Branch. (Where beneficiary collect money)
4. Amount of Currency (Taka).
5. Date of Issue.
6. MTCN Money Transfer Controlling Number.
After receiving the E-mail report from responding foreign agents the Head Office verify this
report and then send this report to the beneficiary branch of Janata Bank Ltd.
One can send money from abroad by these three ways1. SRC- to Account
2. SRC- to Instant/Spot cash.
3. SRC- TTR/ Payment Order (P.O.)

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4.16.1 SRC- to Account


In this case the money is transferred directly to the beneficiary Account. So in this case the
beneficiary mast have an Account in any branch of Janata Bank Ltd.
Example:
Suppose Janata Bank Ltd. Abu Dhabi Branch send a SRC- to Account to the Janata Bank
Ltd. Head Office (H/O), 110 Motijheel C/A Dhaka-1000. The beneficiarys (receiver)
responding branch is Rajanigandha Super Market Branch Dhaka-1206. The Beneficiarys
Account No. is 100023-0 and the amount of taka is Tk. 100,000/-.
When the H/O receives this E-mail report from Abu Dhabi Branch then H/O verify this report
and send this report to the beneficiary branch (Rajanigandha Super Market Branch) of Janata
Bank Ltd.
Remittance officer of Rajanigandha Super Market Branch will receive that report from H/O
and transfer the amount of money to the beneficiary Account. Then the beneficiary withdraws
this money by cheque.
In this case following voucher will be passed by responding branch:
Debit : CIBT A/C
Credit : Partys A/C

4.16.2 SRC- to Instant/Spot cash.


In this case the beneficiary can get money without having an Account in Janata Bank Ltd.
Janata Banks foreign agent collect money from customer and send an E-mail massage with a
(MTCN) Money Transfer Controlling Number.
After receiving the E-mail massage from responding foreign agents the Head Office verifies
this report and then send this report to the beneficiary branch of Janata Bank Ltd.
Example:
Suppose Janata Bank Ltd. Dubai Branch send an SRC- to Instant/Spot cash to the Janata
Bank Ltd. Hade Office (H/O), 110 Motijheel C/A Dhaka-1000. The beneficiarys (receiver)
responding branch is Rajanigandha Super Market Branch (RGSM) Dhaka-1206. The

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Beneficiarys name is S.M. Razib and the amount of taka is Tk. 100,000/- and Money
Transfer Control Number (MTCN) is 120152000002.
When the H/O receives this E-mail massage from Dubai Branch then H/O verifies this report
and sends this report to the beneficiary branch (Rajanigandha Super Market Branch) of Janata
Bank Ltd.
Rajanigandha Super Market Branchs officer receives the massage with a MTCN. The officer
will print the massage and wait for beneficiary.
When the beneficiary comes to the bank then he/she will ask to the officer he has an SRC- to
Instant/Spot cash.
Then the officer of RGSM Branch will provide a form to fill-up. In this form the beneficiary
will provide following informationa. Name of Issuer or customer.
b. Name of Beneficiary.
c. Name of Branch. (Where beneficiary collect money)
d. Amount of Currency (Taka).
e. MTCN Money Transfer Control Number.
f. Address of Beneficiary.
g. Photocopy of National I.D. card or Passport.
Then the officer of RGSM branch will verify this information with H/O massage. If all the
information is correct, the officer will give cash memo and the beneficiary will collect money
from the cash counter.
In this case following voucher will be passed by responding branch
Debit : CIBT A/C
Credit : Sundry Deposit (S/D) A/C , Sundry creditors
Debit : Sundry Deposit (S/D) A/C , Sundry creditors
Credit: Suspense A/C , Instant Cash.

4.16.3 SRC- TTR/ Payment Order (P.O.)


SRC- TTR/ Payment Order (P.O.) is a special type of Speedy Remittance Cell where the
money is sent from foreign branch of JBL to the Head Office (H/O) of Janata Bank Ltd.
Dhaka for payment to other Bank customers A/C.

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Example:
Suppose Mr. S.M. Razib lives in Dubai. He wants to send money to his father by Janata Bank
Dubai Branch. But the problem is that his father has no Account in Janata Bank Ltd. But his
father has an Account in ABC Bank Ltd.
In this case the JBL Dubai Branch receives the money and sends SRC- TTR/ Payment
Order (P.O.) massage to Janata Bank Ltd. Head Office (H/O), 110 Motijheel C/A Dhaka1000 to provide money on account of Mrs. Habib & Sons A/C No.- 2000010-1 at ABC
Bank Ltd. Rajanigandha Super Market Branch.
When the H/O receives this E-mail massage from Dubai Branch then H/O verifies this
massage and the H/O may send this massage to the nearest branch of ABC Banks Ltd.
Rajanigandha Super Market Branch. Suppose the nearest branch of ABC Bank Ltd is Janata
Bank Ltd. Rajanigandha Super Market Branch.
When the H/O of JBL sends the SRC massage to the Janata Bank Ltd. Rajanigandha Super
Market Branch then the officer of RGSM Branch will receive the massage and issue a
Payment Order against the ABC Bank Ltd. Rajanigandha Super Market Branch with the
beneficiarys Account Name and A/C number.
Then Janata Bank Ltd. Rajanigandha Super Market Branch will send the Payment Order
(P.O.) to the ABC Bank Ltd. Rajanigandha Super Market Branch and ABC RGSM Branch
will collect money via Clearing House and then transfer the money to the beneficiary
Account.
In this case following voucher will be passed by Janata Bank Ltd. Rajanigandha Super
Market BranchDebit : CIBTA
Credit: Bills Payable A/C, Payment Order (P.O.) issue.

4.16.3: Janata Bank Ltd Collect and provide foreign remittance


on be half other Money Transfer Company
Janata bank Ltd. has signed an agreement witha) Western Union Network
b) IME Spot Cash
c) Placid Express Spot Cash
d) NBL pays out
e) Xpress money etc.
to facilitate wide range of remittance of the globe.

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This is like as SRC- to Instant/Spot cash but in this case Head office of Janata Bank Ltd.
does not provide any massage to the branches. The responding company provides a software
and pass-ward which is operated by the officers of the branches via internet. In every
transection Janata Bank Ltd. find some commission from the above company.
Western Union is one of the most popular money transfer network in the world. About 40%
transection of foreign remittance is done by Western Union.
So for better understand of this process here I explain about Western UnionRestrictions and Special Notes
Sending from Bangladesh:
Send remittances are not allowed from Bangladesh.
Receiving in Bangladesh:
Receivers must present a valid acceptable form of ID to collect all remittances.
Receiver must present correct Money Transfer Control Number (MTCN).
General Information:
All locations are closed on Friday.
Money Transfer payments are reserved for private consumer use only and cannot be
paid for commercial or business purposes.
How to Pick Up a Money Transfer
It is easy to receive money in person, just go to any of worldwide Agent locations .One can
find an Agent location in a variety of places, like Janata Bank Ltd. Rajanigandha Super
Market Branch, other banks, travel agencies, post offices, airports, and currency exchange
offices etc.
STEP 1: Visit an Agent location
Provide the Agent with the following information:
The Money Transfer Control Number (MTCN) from Sender's receipt is required.
Sender's first and last names.
City and country the money was sent from.
The amount that was sent.
Beneficiarys first and last names, address, and telephone number.
STEP 2: Identify
Simply give the Agent beneficiarys identification card (Like National I.D. Card or Passport)
STEP 3: Sign the Receipt
Review and sign the receipt that the Agent gives.
STEP 4: Receive the Money
If all the information is correct the Agent will give cash memo and the beneficiary will
collect money from the cash counter.

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By this way one customer can collect foreign remittance from any agents of Western Union.
Other companies also transfer money by the same way with the help of their agents via
internet within a short time.

4.17 Financial Data Regarding Inward Foreign


Remittance of JBL Rajanigandha Super Market Branch
(RGSM Br.)Dhaka
Contribution of JBL Rajanigandha Super Market Branch Dhaka in
Inward Foreign Remittance earning from 2008 to 2011

No. of Transaction
Amount (Tk.)

2008
1961
996,650

2009
2096
10,25,250

2010
2490
11,56,960

2011
2691
13,18,510

Table-4.7JBL Rajanigandha Super Market Branch Dhaka in Inward Foreign Remittance


earning from 2008 to 2011

Taka

Inward Foreign Remittance


1500000
1000000
500000
0
No. of Transaction
Amount

2008

2009

2010

2011

1961

2096

2490

2691

996650

1025250

1156960

1318510

Year
Graph 4.14: JBL Rajanigandha Super Market Branch Dhaka in Inward Foreign Remittance earning
from 2008 to 2011

The Graph-4.14 shows that, Inward foreign remittance through Janata Bank Ltd.
RGSM Branch up to December 2011 is Tk.1318510 which is lower then inward foreign
remittance is Tk. 1156960 in 2010. Foreign remittances from JBL RGSM Branch
reached record high of Tk. 10252520 in 2009 against Tk.996650 in 2008 and continue to
play an important supporting role in strengthening the economy of the county Janata
Bank ltd.

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Contribution of JBL Rajanigandha Super Market Branch Dhaka in


Inward Foreign Remittance earning in 2011
Activities
SRC [Speedy
Remittance cell] of
JBL

From Other
company
(JBL as an Agent)

SRC- Account
SRC- to Instant/Spot cash.
SRC- TTR/ Payment Order
(P.O.)

Percentage
(%)
18%
23%
03%

237,332
303,257
39,555

40%
07%
05%
1.5%
2.5%
100%

527,404
92,296
65,926
19,778
32,962
13,18,510

Western Union Network


IME Spot Cash
Placid Express Spot Cash
NBL pay out
Xpress money etc.
Total

Taka

Table-4.8: JBL Rajanigandha Super Market Branch Dhaka in Inward Foreign Remittance
earning in 2011

Taka

Inward Foreign Remittance earning


600000
500000
400000
300000
200000
100000
0
SrC-to
ARCWestern
SRCIME Spot
Instant/S TTR/Pay Union
Account
Cash
pot cash
ment Network
Taka 237332

303257

39555

527404

92296

Placid
Express
Spot
Cash

NBL pay
out

Xpress
money
etc.

65926

19778

32962

Graph 4.15: JBL Rajanigandha Super Market Branch Dhaka in Inward Local Remittance
earning in 2011.

The Table-4.8 & Graph 4.15 show that , The inward foreign remittances come to RGSM
Branch of JBL from Western Union Network that is 40% and from the system of SRC
(to instant spot cash) is in the second position in this regard which is 23%. Then the
others come chronologically.

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4.18 Outward Foreign Remittance


When remittance is sending from Bangladesh to abroad like London then it is called Outward
Foreign Remittance. But Outward Foreign Remittance is highly restricted by the Bangladesh
Government. Only some especial branch of all Banks can send money from Bangladesh to
abroad under Bangladesh Banks rules& regulation.
In Janata Bank Ltd. following branches are only responsible and involved with outward
foreign remittance activities.
a) Local Office Dhaka.
b) Foreign Exchange Branch, Bitul-Mukaram Dhaka.
c) JanataBovon Corporate Dhaka.
The Foreign Remittance department of Janata Bank Ltd. is equipped with a number of
foreign remittance facilities. Following are the types of outward foreign remittance facilities
offered by Janata Bank Ltd. 1. Issuance of Foreign Demand Draft (F.D.D)
2. Issuance of travelers Cheques (T.C.)
3. Issuance of foreign T.T (Telegraphic Transfer)
4. Disbursement of the cash of incoming F.T.T.
But Janata Bank Ltd. Rajanigandha Super Market Branch is not involved with these types of
activities.

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Chapter-05

Finding & Recommendation

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5.1 SWOT Analysis of JBL


At the corporate level, the strategic Management process of an organization involves the
environmental. This environmental scanning is done both on the internal environment:
Strength and weaknesses and external environment: opportunities and threats of the
organization.
In internal environment strengths are those factor that influence the organization to do better
are weaknesses are those factors that lack the organization form its optimum performance. On
the other hand external environment at analysis shows the opportunities or scope of
development and external coming there at for the business.
After doing my report on the service of the JBL. I have found both better performance in
some sectors of the bank and also weak services as well that occur lacking to do better. There
are also some eternal factors which height has business.
A particular SWOT analysis discloses the following issues for an organization that an
organization achieved over the time of its operation by analyzing its both internal and
external environment: The SWOT analysis of Janata Bank Ltd. is shown below:
S- Strengths
W-Weakness
O-Opportunities
T-Threats

Objective of SWOT analysis:

To asses overall strong competitive position.


To decide whether to continue current strategy or not.
To determine possible course of actions.
Development of functional strategy.

Strengths:
Janata Bank is a modern public Bank. It has more capacity to adopt new technology when the
environment will be changed. This JBL Rajanigondha Super Market Branch, Dhaka as well
as Janata Bank Ltd. has various types of strength elements. Such kind of strength are
representing below:
Second Largest bank of the country.
Wide network of 861 Branches across the countries.
Holds a sound reputation in the banking industries.
Sponsoring by the government.
Personalized services.
Sending money through Janata Bank Ltd is an easy and inexpensive process
Well connected distribution channel from Head Office to all branches.
Healthy correspondent relationships with foreign banks.
Provide a record business in international trade and remittance.
Majority of the branches run with computers under centralized network.
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Sound and large capital base.


Sustainable growth.
Support employees commitment to short and long term goals
Employees are helped to productive.
There is a helpful climate to help employees grows and accomplish in the interests of
the organization the things of which they are capable.
The manager also helps their employees to solve their problems and accomplish their
work.
They treat their employees as a essential part of the organization and the
psychological result is a feeling of participation and the task involvement in the
organization

Weakness:
A weakness is a limitation or deficiency in resources, Skills and capabilities that seriously
impedes effective performance.
When I study in JBL Rajanigondha Super Market Branch, Dhaka some problem surface to
me those internal problems mention in the below:
Discouraging small entrepreneurs
JBL provides clean Import Loan to most of its solvent clients. But they usually do not
want to finance small entrepreneurs whose financial standing is not clean to them.
Absence of strong marketing activities
JBL currently don't have any strong marketing activities through mass media e.g.
Television. TV ads play vital role in awareness building. JBL has no such TV ad
campaign. Although they do a lot of CSR activities compared to other banks.
Not enough innovative products
In order to be more competitive in the market, JBL should come up with more new
attractive and innovative products. This is one of the weaknesses that JBL is currently
passing through but plans to get rid of by 2010.
Lack of Proper Motivation
The salary at JBL is very decent, but it lacks other sorts of motivation. Incentives such
as bonuses are given for acquiring a particular figure, but all in all these are the only
motivational factors.
Outdated Software and Hardware at JBL Rajanigondha Super Market Branch.
Some of the PCs in this branch have very outdated hardware which is very slow and
affects the customers and hence the performance of the bank as a whole. The software
themselves are pretty old Flexcube is from 2003, Microsoft Office XP is used. All
of these prevent smooth operations.

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Opportunity:
In my study on JBL Rajanigondha Super Market Branch, Dhaka some opportunity surface to
me. Those opportunities of Janata Bank are given below:
Distinct operating procedures
Repayment capacity as assessed by JBL of individual client helps to decide how much one
can borrow. As the whole lending process is based on a client's repayment capacity, the
recovery rate of JBL is close to 100%. This provides JBL financial stability & gears up JBL
to be remaining in the business for the long run.
Country wide network
The ultimate goal of JBL is to expand its operations to whole Bangladesh. Nurturing this type
of vision & mission & to act as required, will not only increase JBL's profitability but also
will secure its existence in the log run.
Experienced Managers
One of the key opportunities for JBL is its efficient managers. JBL has employed experienced
managers to facilitate its operation. These managers have already triggered the business for
JBL as being new in the market.
Huge Population
Bangladesh is a developing country to satisfy the needs of the huge population, a large
amount of investment is required. On the other hand, building EPZ areas and some Govt.
policies easing foreign investment in our country made it attractive to the foreigners to invest
in our country. So, JBL has a large opportunity here.
BASEL II
Implementation of BASEL II would definitely provide benefits. But it requires a lot of
monitoring. For this JBL has formed BIU (BASELL II Implementation Unit). BASEL II is
basically a framework set forth by Bangladesh Bank to reduce credit risk, operational risk
and market risk. This would definitely aid JBL if it is stringently followed

Threats:

Rapid advance in computers and management information system.


Lack of E-Banking facilities.
Top management of giant.
Complex organizations cannot be authoritarian in the traditional sense and be
effective.

From the above discuss we can say that Janata Bank Limited is one of the largest privatized
Bank of the country. Overall Performance of Janata Bank Limited is satisfactory. But to face
challenges of Globalization, Janata Bank Ltd. should to restructure its operation to improve
as a first generation bank.

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5.2 Findings
During my practical study at JBL, Rajanigondha Super Market Branch, Dhaka I have got
some problems that hamper in making element to the banks operations and the way of profit
making of the branch as well.
I however took the help of following techniques to do this
Personal observation and
Interview
Thus the following problems are identified1) Process of money transfer:
Sending money through Janata Bank Ltd. is a complex process.
2) Lack of E-Banking facilities:
Most of the Branches of Janata Bank Ltd. has very outdated internet modem which is
very slow. The maximum speed of these modems is 3Kb/s and sometime connection
or network is disconnected. All of these prevent smooth operations of E-Banking as
well as remittance activities.
3) Absence of modern technologies:
Less involvement of technology and lot of entries of a single transaction in various
register books make tasks time-consuming. Some of the PCs in this branch have very
outdated hardware which is very slow and affects the customers and hence the
performance of the bank as a whole. The software themselves are pretty old Flex
cube is from 2003, Microsoft Office XP is used. All of these prevent smooth
operations.
4) Lack of knowledge of employees and staffs about modern technology:
Most of the employees in Janata Bank Ltd. Rajanigondha Super Market Branch,
Dhaka has not enough knowledge about modern technology such as- process of
check and print SRC report from head office, Western Union Network activities etc.
5) Lack of integrity and shortage:
Lack of integrity and shortage of employees are the main concerns in achieving the
target profit from Remittance.
6) Lack of Concentrating on the channeling of remittances:
However, Janata Bank Ltd. plays a great role in sending money to various rural areas
through its countrywide network but concentration on the channeling of remittances
activities is not enough.
7) Position in International Banking: A strong position in international Banking and a
great link with various foreign exchange companies makes the process of collecting
the foreign remittance easier to this bank.
8) Contribution of JBL in Foreign Remittance earning:
The achievement of JBL in attracting foreign remittance is increased year by year
except 2009 and 2010 due to economic crises. But on the contrary, the percentage of

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foreign remittance through JBL is decreased year by year as compared to countrys


foreign remittance.
9) Absence of strong marketing activities
JBL currently don't have any strong marketing activities about remittance facilities
through mass media e.g. Television. TV ads play vital role in awareness building.
JBL has no such TV ad campaign. Although they do a lot of CSR activities compared
to other banks.
10) Absence of strong Customer relationship :
Proper customer relationship activities are not enough in Janata Bank Ltd. as
compared to other privet commercial banks.
11) Not enough innovative products :
In order to be more competitive in the market, JBL should come up with more new
attractive and innovative products about remittance.

5.3 Recommendations
To make solve the abovementioned problems the following recommendations can be
made so that the problems can be solved
1. Process of money transfer:
Remittance collection from the Bank should be a much easier and hassle free job for
the beneficiaries. Process flow should be smoother so that the waiting time for them is
decreased.
2. E-Banking facilities:
Janata Bank Ltd. should be used high speed internet modem for smooth operations of
E-Banking as well as remittance activities.
3. Adaptation of new technologies:
4. All of the PCs in this branch should be changed with update hardware and software
which is very fast.
5. Training to the employees:
6. A very strong and systematic training program creates the bankers efficient; the
disciplined environment makes them active.
7. Removing integrity and shortage:
The Gap between Head office and branches will have to be removed in order to
improve the situation. Reinforcement should be involved with the given target.

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8. Concentrating on the channeling of remittances


Janata Bank Ltd. is now concentrating on the channeling of remittances. This should
be continued and enhanced. The vast network of JBL enables them to reach the
remote rural areas. Utilizing the micro finance systems and keeping poverty
alleviation in mind, the process can be taken further.
9. Position in International Banking
The highest volume of remittances is sent from Saudi Arabia. Effort should be thus
given to ensure the utilization of the remittance coming from that region and hence
can be customized according to the regions specialty or characteristic traits of the
remitters.
10. Contribution of JBL in Foreign Remittance earning:
To increase the percentage of foreign remittance earning JBL should be provided the
best E-Banking facility than other bank. For this reason JBL should try to establish
On-line banking system. Because most of the Inward foreign remittance is enter in
Bangladesh via On-line.
11. Strong marketing activities:
Better marketing policy should be applied in order to attain and retain more customers
in this competitive market.
12. Customer relationship:
Janata Bank is still conducting remittance business because of price sensitive market,
but without a proper customer relation it would be difficult to survive in the long run.
13. Creating innovative products:
Janata Bank Ltd. can create special accounts categorizing to the different
classifications of the beneficiaries, requirements according to the family size, and
utilization arena.
14. Others:
Janata Bank Ltd. can also take following steps Reduction of transaction time
Reduction of transaction costs (by cutting commission fees)
Making remittances tax-free
Simplifying formalities
Regular monitoring to ensure service
Maintaining where possible the same exchange rate as the informal market

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Conclusion
In modern Banking, Remittance of Funds is one of the most important ancillary services
performed by every type of Banks. A nationalized commercial bank like Janata Bank Ltd can
perform it with better than other banks because of a wider network of branches and lower
service charge. Again, a strong position in international Banking and a great link with various
foreign exchange companies makes the process of collecting the foreign remittance easier to
this bank. Besides these advantages, a lot of lacking like- shortage of manpower, Gap
between officers of Head office & Branches, etc becomes a matter of concern. Remittancethe subject of my study is a very small part of Janata Bank Ltd.s. Activity, but it generates a
portion of profit. So, by removing or at least reducing the bank should try to achieve the
targeted amount fixed by the top management.

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Reference

Annual Report of Janata Bank Ltd. 2010


Annual Report of Rupali Bank Ltd. 2010
Annual Report of Rupali Bank Ltd. 2010
Annual Report of Agrani Bank Ltd. 2010
Annual Report of Sonali Bank Ltd. 2010
Janata Bank Ltd. General Banking Manual (1992)
Janata Bank Limited website: www.janatabank-bd.com
Circulars issued by JBL time to time
Different ledger books of the branch.
Money and Banking: Md. Abdul Hamid.
Md. Mahi, 1985, Cash Credit, Janata Bank
http://theguardianbd.com/history.html

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Appendix 1

Source- Janata Bank Ltd. Annual Report 2010, Page- 35

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Appendix 2
Five years Comparative Financial and Operational performance
Particulars

2006

2007

2008

2009

2010

Authorized Capital

8000

8000

8000

20000

20000

Paid up Capital

2595

2595

2595

5000

5000

Reserve Fund

1727

3224

4183

8207

10224

Deposits

182947

198636

221336

246175

286567

Advance

138493

121200

144678

166359

225732

Investment

24785

55862

57824

72533

57514

Revenue

16272

18522

20922

24074

30614

Cost

12059

13559

13919

15496

18577

Operating Profit

4213

4963

7003

8578

12037

Provisions for
Loan/Assets

10707

11698

9051

8748

8975

Net Profit

---

1681

3145

2982

4907

Export

70897

71855

85418

88653

118515

Import

128809

84065

129413

118525

183744

Total Number of
Employees

14772

13860

13379

13122

12826

No.of foreign
Correspondent

1198

1198

1202

1208

1215

No. of Branches

848

848

849

851

872

(including 4 Overseas
Br.)

Source- Janata Bank Ltd. Annual Report 2010, Page- 36

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Appendix 3
Balance Sheet As At 31 December, 2010

Source- Janata Bank Ltd. Annual Report 2010, Page- 109

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Appendix 4
Profit And Loss Account
For the year ended 31December, 2010

Source- Janata Bank Ltd. Annual Report 2010, Page- 111

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