Professional Documents
Culture Documents
General Banking System of NBL
General Banking System of NBL
Bank a little word but plays a very significant role in each country for the
economic development. Even it is become impossible now a day to think about a
countrys economical environment excluding banking system. Whatever the
countries are standing poor, less develops, developing or developed but all the
countries should have the banking system. Banking system is the heart of each
countrys economic body. Economic, momentary and fiscal all the policy directly
or indirectly depends on banking system for its better implementation.
The internship report is divided into two parts the organizational part and the
project part. The organizational part includes the company profile, company
background, nature of business, vision mission, goals, objectives, capital structure,
organization and management structure, products and services, human resources,
market and target customers, organizational strategy. The project part consists of
General Banking Activities. In this analysis, I am tried to find out some
recommendation issues that might be an accurate way to overcome the drawbacks
of National Bank Limited. I acknowledge different banking functions and day-to-
day banking operation on my way to complete this internship. In this report I have
explained my best in respect of my real life experience gather from different
department.
Chapter-1
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Theoretical knowledge does not make a person perfect. To implement the academic
knowledge, practical knowledge related to it, is important. A perfect consideration
between theory and practice is important in the context of modern business world.
In order to resolve the dichotomy between theory and practice, the Mohammad
pur KendriyaCollege arranges internship program as a partial completion of BBA
program. This program is necessary for every student to complete his or her
academic degree. Internship program brings students closer to the business theory
and practical and thereby help them to substantiate their knowledge so that they
can prepare themselves to start a successful career.
The main objective of the internship program is to formalize me with the real
market situation and help me learn how bookish concepts are used in the real
market. Therefore, from the very beginning of the study I have tried my level best
to conduct my internship with a view to achieve some specific objectives and I
have gone across the various department of the bank to acquire some related
information and functioning procedure regarding those department.
3. To go through all the departments of a bank and observe what actually happened
in these departments.
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This report has been prepared through extensive discussion with bank employees,
clients and officers and on the information gathered from the annual report and
prospectus of National Bank Limited. I have got the great opportunity to have an
in-depth knowledge of the General Banking of NBL.
Although I have got the full co-operation from employees, clients officers of NBL
and they also gave me much time to prepare this report properly in the way of my
study, I have faced some difficulties, which made my conduction of the program
little hazardous.
1. It should be certainly mentioned that the time two months is very short to get the
total view of the banking functions.
2. The officers were quite busy with their regular activities. For this reasons it was
also a little problem to collect detail information from them.
3. In some cases, they could not be able to supply me any information for the
reason that they have no printed documents.
4. Office secrecy was one of the most important problems. Disclosing of some
information was restricted.
Chapter-2
Literature Review
There are numerous research reports on the different activities and programs of
National Bank Limited. Again, there are more studies on NBLs service expansion
program. The human resource department arranges different research program to
identify its problems and inefficiencies. And by this way it tries to resolve their
problems to provide excellent services to its customers.
Beside that every year a number of students of different universities conduct their
internship program in different branches of National Bank Limited. After the
completion of their internship program they submit a report on their study to the
Senior Vice President of Human Resource Department, Head Office, National
Bank Limited. In their reports they flash out some recent problems and draw some
recommendations about what the management of NBL should do to resolve these
problems.
Like every year a number of students conducted their internship program in NBL.
Among them a student of American International University-Bangladesh,
named Md. Mobarak Hossain, mentioned in his report that the absence of online
banking system in NBL is the main constraint of its success. The top management
should start the online banking system as soon as possible if it wants to reach at the
desired position. The top management has already taken the necessary steps to start
online banking system. It can be expected that the customers of NBL will get the
online banking service from the next year.
Chapter-3..
Methodology of the study
3.1. Introduction:
The nature of this report is descriptive. So instead of doing any survey, observation
method is used to complete this qualitative research. I have tried to collect all such
information that will reflect the actual situation of the bank for any report. I have
collected various types of primary and secondary data while I was performing my
job. I have collected various data from various sources by face to face interview
with the employees working in different departments of National Bank Limited,
Mohammadpur branch, personal investigation bankers of different branches of
NBL, circulars sent by Head office and maintaining daily diary which contains all
the activities that has been observed in the bank.
3.2. Population:
The report has prepared on general banking practice system of National Bank
Limited. Therefore, for the purpose of the study, all the branches of, National Bank
Limited has been considered as the population of the study.
Only one branch of National Bank Limited has been taken as the sampling unit for
the study, i.e. Mohammadpur branch.
Random sampling method has been used for the purpose of the study.
For the purpose of the study, two methods of data collection have based:
a) Observation method.
b) Interview method.
To make the report more understandable and give a nice look, different analytical
tools and software, have been used to prepare the report.A number of flowchart,
graph, table
Chapter-4.
Organizational Profile
National bank Ltd is the first and major private sector commercial bank in
Bangladesh fully owned by the Bangladeshi Entrepreneurs. The Bank started its
operation from 23rd March 1983. As a result of the collective effects of the some
eminent bankers, of failure in playing due to role in mobilizing small savings of the
teeming millions and providing improved clients services to them in our country,
the Government gave right decision to allow establishing banks in private sector.
National Bank Limited was born as the first hundred percent Bangladeshi owned
Bank in the private sector. From the very inception it is the firm determination of
National Bank Limited to play a vital role in the national
economy. It is determined to bring bank the long forgotten taste of banking
services and flavors. It wants to serve each one promptly and with a sense of
dedication and dignity.
NBL prudently and boldly faced the challenges of various adverse situations
prevailing in the post independence Bangladesh and has now established it self as
one of the most successful bank of the country. People in all regions can easily
avail of the services of NBL through its 121 branches spread all over the country.
Besides, the bank has been smoothly conducting its overseas activities with utmost
efficiency through its 415 correspondents in 75 countries of the world. NBL has
drawing with 32 overseas exchange houses including the gulf overseas exchange.
In order to provide modern banking services to satisfy the demand of the country
and the people, all branches of the bank have been brought under computer
network. It is able to reach with lighting speed the
NBL has been able to create a special image at home and abroad by introducing
different banking products in accordance with the expectations requirements of
people of the country. NBL was the pioneer bank to allow back-to-back LC facility
without any margin to the entrepreneurs of garment industry during the Eighties,
thereby helping the industry thrive to its present position. This has not only
contributed to enrich of the countrys foreign exchange reserves, but also opened
employment opportunities for a large numbers of labor force of the country. As a
pioneer in this sector, NBLs name will remain in golden letters.
NBL has been the pioneer in promoting readymade garment industries and still is
the single largest financier in this sector. In the early 80s when garment industry in
Bangladesh was experiencing a process of trial, the bank foresights the bright
prospect of this sector and extend finance to the deserving and promising
entrepreneurs. It provided them with financial support including market
information and advice .NBL is the first bank to introduce international Master
Card in Bangladesh, which has facilitated the users to get benefit to different
facilities in home and abroad. NBL is the first among private sector banks, which
has set an uncommon precedence of extending fully, supervised collateral
agriculture credit in the brained area of Rajshahi district to help small farmers to
grow.
The wise directions and guidance of a prudent and versatile Board of directors and
concerted efforts of a team of well-qualified and professionally heightened
executives and officials have brought an extraordinary distinctiveness for the bank.
Above two thousand dedicated executives, offers and staffs working day and night
to serve its customers satisfactorily. Through strong commitment base, the bank
has introduced new products like Credit card, E-cash. The popularity of the bank
has gained momentum with quick money transfer arrangement anywhere in world
in association with Western Unions U.S.A
The Bank engaged in all types of commercial Banking services within the
stipulations laid down by Bank Companies Act 1991 and directives as received
from Bangladesh Bank from time to time. The Bank within the stipulations laid
down by Bank Companies Act-1991 and directives as received from Bangladesh
Bank from time to time provides all types of Commercial Banking Services.
Mainly National Bank Limited collects deposit from the people at lower rate and
invests the same to the people again at higher rate. And difference between lower
rate of deposit and higher rate of investment is the earnings of the Bank. National
Bank Limited mainly invests in industrial sector like short term, middle term as
well as long term for import of capital machineries, establish new industry and
working capital assistances with this Bank plays a significant role in Bangladesh
economy.
a) General Banking
6. Loyal and committed employees who make lasting customer relationships and
7. National Bank Limited also operates according to certain key business values.
The main vision of the National Bank Limited is to develop the economy of
Bangladesh by profitable investment of public money and build up their
confidence to the private institution. To ensuring highest standard of clientele
services through best operation of latest information, technology, making due
contribution to the national economy and establishing ourselves firmly at home and
abroad as a front ranking bank of the country is our cherished vision.
4.5. Mission:
The missions of the National Bank are as follows: The aim of NBL is to become
one of the leading Banks in Bangladesh by its prudence, fair and quality of
operation.
1. Its effort for expansion of its activities in home and abroad by adding new
4. It intends to meet the needs of its clients and enhance its profitability by
creating corporate culture.
4.6. Objectives:
4. Pushing the policy of nurturing balanced growth of the bank in all sectors.
banking products.
7. Expanding the banks area of investment by taking part in syndicated large loan
financing.
9. Upholding the image of the bank at home and abroad by pushing dynamic and
time befitting banking activities.
Alongside providing the best services to the clienteles, patronizing and taking part
in social development activities as well as making due contribution to growth of
the national economy.
As the financial services industry is a very competitive industry, the main strategy
of NBL is the organic growth to build branches and strengthen their distribution
network.
They will continue to invest and expand in Bangladesh as fast as local regulations
allow.
Credit Quality Maintaining credit quality and understand the role in managing
losses.
(TK in
million)
2. To make investment.
8. To ensure the best uses of its creativity, well disciplined, well manages and
perfect growth.
welfare of the society, the National Bank Foundation was set up in 1989. With
financial assistance of the Foundation, The National Bank Public School and
College has been established in Moghbazar Dhaka. There are a total of 820
students studying in the school
section from class 1st to 10th, while there are 120 students at the college section. In
2006, a total of 70 students appeared at the SSC Examination, of which 87% came
out successful. In the college section, a total of 90 students appeared at the HSC
Examination, of which 81% came out successful.
Not number, but diversified work efficiency of human resource is the key to
sustained progress of an institution. Thus, not merely recruitment of workforce but
a regular program for imparting time benefiting training to them is all the more
important. With this realization, The National Bank Training Institution (NBssTI)
was established at Shamoli on 24 October 1989, which is fully residential. Beside
faculty members of the Institute, renewed professionals like banker, economists,
teachers and researches are invited to deliver lectures in training programs. NBTI
has a rich library for use by the trainees. NBL has a program to open a Research
and Publication Division soon. During the years under review 225 employees
attained in training programs arranged by the training institute of the bank. In
every batch, 25 trainees can attain in training program with residential facilities.
Thirdly, the branch operation management, which contains branch manager and
other mid/ lower level management. The major responsibilities of this part are to
the 121 branches of this bank and report to the Head Office from time to time.
In 2007 National Bank Limited made commendable progress in all business, like
deposit, credit, fund management, investment, foreign remittance, credit card &
foreign exchange related business. Bank has expended business activities as
holding previously & parallels by diversification its investment to a new product,
as a major financier remarkable portion of total exports of the country.
4.13 1. Planning:
4. Code of conduct.
4.13.3. Staffing:
One way is recruitment of probationary officer. Each probationary officer has one-
year probation period. After completion of probation period the officer joins as
officer grade III (b). The career path of probationary officer is headed toward
different management positions. Second way of recruitment is to recruit non-
probationary officer who joins as a assistant officer. The career path of an assistant
officer is lengthier than probationary officer. The third way of recruitment is
recruitment of staff and sub-staff such as typist, Messenger, driver, guard,
attendant, cleaner and other lower level positions. Promotion
4.13.4. Controlling:
The bank has strict control over its all-organizational activities. The Bangladesh
Bank directives indicate some control measures. Audits and inspection are
conducted by different parties to check whether the bank implement these control
system properly or not. The central bank conducts credit inspection by a team. The
National Bank Limited has audit and inspection department to take controlling
measures in internal operations.
Audit and inspection team send to the branches now and then and is responsible for
preparing report that will be submitted to the chief Administration to take
necessary actions.
Credit Card
Buying home appliances? Get them through our Consumer Credit Scheme.
National Banks Consumer Credit Scheme gives you a great opportunity to buy
household and office items on easy installments. This scheme gives you the
advantage of part payment to cope with the high price tags of many necessary
home and office appliances.
For most of the people on fixed income the opportunity to supplement their
monthly earning is a golden one. And NBL Special Deposit Scheme gives a
customer just that.
Under this scheme, customers can deposit money for a term of 5 years. The
deposited money is fully refundable at the expiry of the term. At the same time,
during the term period they can enjoy a monthly profit corresponding to their
deposited amount. As for instance, under this scheme a deposit of Tk.1,10,000 /-
gives a monthly income of Tk.1000 /-.
This scheme is specially designed for the benefit of the limited income group
members.
This helps to accrue small monthly savings into a significant sum at the end of the
term. So, after the expiry of the term period the depositor will have a size able
amount to relish on.
Monthly
Installment
Return after 3
Years 9.00%
Return after 5
Years 9.25%
Return after 8
Years 9.50%
Through its Credit Card. National Bank Limited has not only initiated a new
scheme but also brought a new life style concept in Bangladesh. Now the dangers
and the worries of carrying cash money are memories of the past.
Credit Card comes in both local and international forms, giving the client power to
buy all over the World. Now enjoy the conveniences and advantages of Credit Card
as you step into the new millennium.
National Bank Limited has introduced ATM service to its Customers. The card will
enable to save our valued customers from any kind of predicament in emergency
situation and time consuming formalities. NBL ATM Card will give our
distinguished Clients the opportunity to withdraw cash at any time, even in
holidays, 24 hours a day, 7 days a week.
Joining with the worlds largest money transfer service Western Union, NBL has
This simple transfer system, being on line eliminates the complex process and
makes it easy and convenient for both the sender and the receiver. Through NBL
Western Union Money Transfer Service, your money will reach its destination
within a few minutes.
International Division
Dhaka-1000
Bangladesh
Worried about the future? NBL has just the scheme for you
This is an uncertain World and the threatening silhouettes of future catastrophes are
always looming around. This NBL scheme gives your family protection against
the insecurities of the world. This scheme is the first of its kind in Bangladesh. It
combines the benefits of regular savings and insurance scheme, so, you get the
usual rate of interest on the deposited amount while you enjoy the protection of a
comprehensive insurance coverage. Under this scheme, the beneficiaries will get
equal the deposit in case of natural death of the account holder whereas in the
event of accidental death of the account holder the beneficiaries will receive twice
the deposit. As for example, if a customer picks up Easy Class (Tk.50, 000/-)
he/she will get Tk.50, 000/- for natural death and Tk.1,00,000/- for accidental
death apart from his/her deposited amount and interest.
Present age is the age of competition. A good number of new private commercial
banks came to banking sector in Bangladesh during the last decade. Foreign banks
(Standard chartered, American Express, HSBC, Citibank N.A, etc) also conduct
banking business in Bangladesh very successfully. These new generation banks
introduced many attractable products for customers. National Bank Ltd. is also
introduced many products to attract customers.
The products introduced during the last five years are as follows:
2. E-Cash/ATM card.
4. SWIFT Services.
5. Power Card.
Monthly
Installment
Return after 5
Years @ 9.00%
Return after 8
Years @ 9.25%
Return after 10
Years 9.50%
3. Instant inquiry.
National Banks consumer credit scheme gives a great opportunity to buy house
and office items on easy installments. This scheme gives an advantage of part
payment to cope with high price tags of many necessary home and office
appliances. A consumer is the ultimate user of a good. Thus Consumer credit is
the credit, which directly comes into the use of consumer.
Under the Consumer Credit Scheme NBL grants pecuniary help for the
following goods and services.
d. Sewing machine.
e. Photocopier.
f. Generator.
g. Other goods that are not mentioned above but are considered essential.
NBL is one of the first few Bangladesh Banks to obtain membership of SWIFT.
SWIFT is a members owned cooperative which a first and accurate
communication network for financial transaction such as Letter of credit, Fund
Transfer etc. By being a member of SWIFT, the bank has opened up possibilities
for uninterrupted connectivity with over 5700 user institutions in 150 countries all
over the world.
In Bangladesh, NBL has first introduced the power card. The use of power card is
very easy and the cost of transactions is very low. So anybody can use it like cash
to do their daily transaction.
Due to the predecessor Companys involvement financing sector of the country, the
bank inherited its top corporate customers. Moreover the bank is involved in
import trade financing. Bulk importers of consumer durable, food gains industrial
raw materials are its customers. The bank has financed in textile and apparels
sectors. The bank has a trade of choosing customer from diversified groups. The
bank has first class customers in the construction sectors involved in high-rise
building, heavy construction and roads and high way construction.
Chapter-5
General Banking
General banking department is the heart of all banking activities .All other
departments are linked with this department. It also plays a vital role in deposit
mobilization of the branch. National Bank Limited provides different types of
accounts, locker facilities, special types of saving scheme and flexibilities of
remittance under general banking.
This department performs the general function of banking In National Bank Ltd.
For performing the operation of this department a good number of people are
allotted. The general banking department of National Bank (Mohammadpur
Branch) consists of the following section:
1. Dispatch section
4. Remittance section
5. Deposit section
6. Clearing section
Dispatch division operates the function of dispatching the intimation letter to the
client, IBCA, IBDA, and OBC to the other banks for internal transaction with
bank. The officer engaged in the dispatch division maintains two types of register
books to entries for record of these documents particulars.
Account opening is the gateway for clients to enter into business with bank. It is
the foundation of banker-customer relationship. This is one of the most important
sections of a branch, because by opening accounts bank mobilizes funds for
investment. Various rules and regulations are maintained and various documents
are taken while opening an account. A customer can open different types of
accounts through this department. Such as:
Step 1. The account should be properly introduced by any one of the following:
Two copies of passport size photographs from individual are taken, in case
of firms photographs of all partners are taken.
Step 6. Account is opened and a Cheque book and pay-in-slip book is given.
Documents required for opening account:
Partnership Account:
4. Rubber stamp.
Limited Company:
5. Certificate of Incorporation.
6. Certificate of Commencement (In case of Public limited company).
7. Certified (joint stock) true copy of the Memorandum and Article of Association
of the Company duly attested by Chairman or Managing Director.
6. Rubber Stamp.
Cash management section of any bank plays vital role in general banking
department because it deals with the most liquid assets. The proper management of
this section entails overall effectiveness of any bank. NBL has a very equipped
cash section.
1. Receipt of deposit.
2. Making payment to the customers.
This section receives deposit or funds from the customer and the collection
procedure as follows:
1. At first the amount is counted and if ok then verified the purity of the note paid
if there is any confusion of the teller.
2. If the cash notes are satisfactorily sound then the teller marked in color the
amount in word over the deposit slip.
3. At last the receiving officer/ teller signed the deposit slip and by the sign of the
5. Then the amount is kept apparently deposited in the customers account and the
cheque proceeds to the clearinghouse accordingly.
The payment is made to the customer only against a valued authentic cheque. the
teller has to follow the following steps in making such payment:
2. Examining the cheque. In case of examining the cheque, the teller is predated
then the date is to be sure about the following questions:
i. Date of cheque todays or not; if it is predated then the date is with in 6 months
from today;
ii. Amount is written in word and in figure and both is valued same;
making payment.
4. If the teller is satisfied regarding the above questions, then he/she debits the
6. Finally the cash paid seal is marked over the cheque leaf for the collection of
the cheque after making the payment to the customers.
The cash section also manages the vault of the branch. The manager of cash
section is the in charge of the necessary liquid money in the vault for the payment
of the customer.
In this regard, there is specific guideline from the central bank for the limit of the
So the cash department is to maintain a cash limit of Tk. 2 Crore 45 lac as whole.
The excess amount of a branch limit is to be proceeded to the account maintained
with Bangladesh Bank.
Remittance includes both inland and foreign remittance. In this section, only the
local remittance is described.
1. Inward remittance.
2. Outward remittance.
Specific procedure and accounting journals are made for the transfer and the
settlement of the outward remittance.
Preparation of DD & signed by two officers Bearing power of attorney No (PA No)
Handover the DD to the client along With the copy of application form
Deposit is the lifeblood of a bank. From the history and origin of the banking
system, deposit collection is the main function of a bank.
The deposits that are accepted by NBL like other banks may be classified into two
types.
These are:
a) Demand Deposits
b) Time Deposits
a) Demand deposits:
These deposits are withdrawn able without notice, e.g. current deposits. National
Bank Limited accepts demand deposits through the opening of,
1. Current account
2. Savings account
b) Time deposits:
A deposit which is payable at a fixed date or after a period of notice is a time
deposit.
National Bank Limited accepts time deposits through Fixed Deposit Receipt
(FDR), Short Term Deposit (STD) and Bewared Certificate Deposit (BCD) etc.
While accepting these deposits, a contract is done between the bank and the
customer. When the banker opens an account in the name of a customer, a contract
arises between them. This contract will be valid one only when both the parties are
competent to enter into contract.
As account opening initiates the fundamental relationship & since the banker has
to deal with different kinds of persons with different legal status, National Bank
Limited officials remain very much careful about the competency of the customers.
Cheques, Pay Order (P.O), Demand Draft (D.D.) Collection of amount of other
banks on behalf of its customer are a basic function of a Clearing Department.
5.6.1. Clearing:
Clearing is a system by which a bank can collect customers fund from one bank to
another through clearing house.
Clearing House is a place where the representatives of different banks get together
to receive and deliver cheque with another banks.
A. Outward clearing.
B. Inward clearing.
When the branches of a bank receive cheque form its customers drawn on the other
banks within the local clearing zone for collection through Clearing House, it is
Outward Clearing.
When the branches of a bank receive cheque drawn on them from other banks in
the Clearing House, it is Inward Clearing.
These are:
2) 2nd house: 2nd house normally stands after 3 p.m. and it is known as return
house.
2) 2nd house: 2nd house normally after 2 p.m. and it is known as return house.
Only the regular customers i.e. who have Savings, Current, STD & Loan Account
in the Bank can deposit cheque for collection of fund through clearing house.
Transfer:
1. Precaution at the time of cheque receiving for Clearing, Collection of LBC, and
OBC & Name of the account holder same in the cheque & deposit slip.
2. Amount in The cheque & deposit slip must be same in words & in figure
3. Date in cheque may be on or before (but not more than six months back)
clearing house date.
4. Bank & Branch name of the cheque, its number & date in the Deposit slip.
Mutilation of cheque.
Return House means 2nd house where the representatives of the Bank meet after 3
p.m. to receive and deliver dishonored cheque, which place in the 1st Clearing
House. Cheque may be dishonored for any one of the following reasons:
1) Insufficient fund.
The dishonor cheque entry in the Return Register & the party is informed about it.
Partys signature required in the return register to deliver the dishonor cheque.
After duration, the return cheque is sent to the partys mailing address with Return
Memo.
7) Examine computer validation sheet with the deposit slip to justify the computer
posting.
Procedure of OBC:
3) Crossing seal on the left corner of the cheque & payees account will be
credited on realization seal on the back of the cheque with signature of the
concerned officer.
When the banks collect bills as an agent of the collecting branch, the sys tem is
known as IBC. In this case the bank will work as an agent of the collection bank.
The branch receives a forwarding letter and the bill.
Procedure of IBC:
1. IBC against OBC: To receive the OBC cheque first we have to give entry in the
IBC Register. The IBC number should put on the forwarding of the OBC with date.
2. Deposit of OBC amount: OBC cheque amount is put into the sundry
deposit sundry Creditors account, prepare debit & credit vouch of it. If the OBC
cheque is honored, send credit advice (IBCA) with signature & advice number of
the concern branch for the OBC amount.
3. If the OBC cheque is dishonored, the concerned branch is informed about it.
4. Again place in the clearing house or send the OBC cheque with Return Memo
to the issuing branch according to their information.
Carrying of cash is not so safe in todays world. There is always a chance of losing
or hijacking of cash. On the other hand, the desire to purchase any desired item of
one may not be fulfilled for the want of cash at the time of that willingness. To
remove these problems, credit card has been introduced which is very popular to
face the mentioned problems.
It is a card (usually plastic) that assures a seller that the person using it has a
satisfactory credit rating and that the issuer will see to it that the seller receives
payment for the merchandise delivered.
NBL is the first local bank, which introduced credit card & MasterCard in
Bangladesh in both local and international market in 1997. MasterCard captured
35% of credit card through the world. However present market analysis reflects
that a large number of people whose average income ranges in above Tk.l0000 are
using the credit card. Credit card division is continuing their all-possible efforts for
the participation in the globalize Master Card Program. The number of users of the
credit cards is increasing day by day.
During the year 2006 the bank has got a profit of Tk.124.25 million from credit
card business. NBL also has got the licenses from international brand Visa Card
and very soon, it will be launched in the country.
NBL is the first local bank, which introduced credit card & MasterCard in
Bangladesh in both local and international market in 1997. MasterCard captured
35% of credit card through the world. However present market analysis reflects
that a large number of people whose average income ranges in above Tk.l0000 are
using the credit card. Credit card division is continuing their all-possible efforts for
the participation in the globalize MasterCard program. The number of users of the
credit cards is increasing day by day.
During the year 2004 the bank has got a profit of Tk.104.25 million from credit
card business. NBL also has got the licenses from international brand Visa Card
and very soon, it will be launched in the country
National Bank Limited offers mainly two type of credit card according to
the geographical area. These are Local credit card and International credit card.
According to the level of income the local and international credit cards are
divided into two categories viz. Gold card and Silver card. These types of credit
cards are described below:
Local credit card is valid only in Bangladesh. Out side Bangladesh, the card is
invalid.
Local card are two types. They are Gold local card and Silver local card. The card
limit of gold local card is Tk.50000 to Tk. 100000 and silver local card is below
Tk.50000.
International credit card is valid mainly outside Bangladesh. But for the payment
of roaming facilities for Grameen phone, cardholders can use international credit
card in Bangladesh. International credit cards are of two types. These are gold
international credit card and silver international credit card. The card limit of gold
international credit card is $ 2000 to $4000 and silver international credit card
below $2000.
National Bank Limited receive card fee for new card and renew card from the
cardholder.
The rate of card fee for new card and renew card are the same. In case of new card
the bank receives the card fee with the next months bill. The rate of card fee is
given in below:
Any person whose monthly income is over 10000 can be a credit card holder of
NBL. The requirements of a card are:
For Local card:
3. TIN certificate.
5. Charge documents.
8. TIN certificate.
National Bank Limited offers the cardholder 15 to 45 days credit facilities. For the
proper billing the bank divided the cardholder into three cycles. These are 0 cycle,
3 cycle and 5cycle. In 0 cycle hill are prepare and send to the cardholder 1st day or
every month and last date of payment is 15th day of the month. In 3cycle bill are
prepare and send to the cardholder 3rd day of every month and last date of
payment is 18th day of the month. In 5cycle bill are prepare and send to the
cardholder 5th day of every month and last date of payment is 20th day of the
month. The cardholder can pay the bill any branch of the National Bank. If any
cardholder fails to pay the bill within the last date then he/she must pay 2%
monthly interest and his/her card stop automatically. But if the cardholder pay
minimum bill (10% of the bill) then he/she must pay the interest on the balancing
amount and can use the card as usual. On the other hand, if the card holder
withdraws any cash amount from the ATM booth (maximum limit is 20% of card
limit) a monthly charge of 2.5% is to be charged from the date of withdraw. In that
case the cardholder will not get the 45 days credit payment facility.
This is the survival unit of the bank. The reason is that until and unless the success
of this section, the survival is a big question. This is the main earning unit of the
bank. Banks accept deposits from the depositors in condition of providing interest
to the depositors in condition of providing interest to them. Now the question is
how bank provides interest to their clients. The simple answer is interest from
advances. The bank provides interest to the borrowers because:
1. To earn interest from borrowers and give depositors the interests get back. The
rest are the profit of the bank.
Credit is a continuous process. Recovery of one credit gives rise to another credit.
In this process of revolving funds, bank earns income in the form of interest. A
bank can invest its fund in many ways. Bank provides loans and advances to
traders, businessmen and industrialists. Moreover, nature of credit may differ in
terms of security requirement, disbursement provision, terms and conditions etc.
Bank often uses loans and advances as an alternative to one another. But,
academically this concept is incorrect. Academically, Advances is the combination
such items where loans is a part only. For this credit section of the banks is known
as advance section.
It is not possible to discuss all these types of advances in details in this report but
an attempt has been made to analyze the basic difference and characteristics of
these advances all in the following manner:
Overdrafts are those drawings, which are allowed by the banker in excess of the
balance in account up to a specified amount for definite period. It is given to the
businessmen to increase their business activities. There are two forms of
overdrafts:
1. SOD (Secured Overdraft).
Any deposit in the SOD account is treated as repayment of overdraft. The features
of SOD are:
The security that is kept against the SOD loan are generally FDR, SDS, MSS etc.
It is one type of current account. The difference between them is that current
account is intended to be an account with credit balance and the CC is an account
for drawing in advance. Operation of cash credit is same as that of overdraft. The
purpose of cash credit is to meet working capital needs of traders and industrialists.
It is given through the Cash Credit (CC) account.
Documentary Bill.
Clean Bill:
Clean bill are those that requires no payment for documents cheques, Demand
Draft, Telegraphic Transfer, and Mail transfer.
Documentary Bills:
Documentary bills are those that require related documents for payments like Bills
of Exchange, Railway/ Shipment receipt and invoice etc. This bill is often created
in businesses and bank purchases these before their maturity. Thus, purchases of
these bills are one kind of credit to these before their maturity. As bank purchases
these bills on behalf of the business so it is one kind of credit to those businesses.
After maturity, bank presents it to the drawer for encasement.
For the betterment of its own employees NBL provides loans. The branch
managers and executives get this facility. Repayment is adjusted from their
monthly salary on an equal monthly installment. 10% of basic salary is contributed
by employee in every month. The staffs can also take loan, which is known as Staff
Loan against Provident Fund (SPF).
The repayment is adjusted from their monthly salary. 10% of basic is also
contributed to the PF by the bank.
For the safety of the loan, bank requires security from the borrower so that it can
recover the loan by selling security if borrower fails to repay. Creation of charge
means making it available as a cover for an advance. The method of charging
should be legal, perfect and complete. Securities are charges in order to:
1. Protection of interest.
A brief description about the securities that is kept against the loans is described
below:
Security deposited the borrower himself to the loan such as FDR, Cash, MSS.
1. Sense security deposited by a third party to secure the advances for the
borrower.
2. Wider sense any types of security on which the creditor has a personal right of
action on the debtor in respect of advance common method of charging security
and their nature of security.
It is the right of the banker to hold the debtors property until the debt is discharged
generally retained by the bank in its own custody or to the hands of the third
party with lien marked. The third party cannot discharge it without the permission
of the bank. In case of need bank needs permission of the court to sell the property.
Borrower transfers the right of property or debt to the bank. Life Insurance Policy,
supply bills, book debt of the borrower can be assigned.
It is one kind of lien but the bank enjoys more rights on it. In this case, physical
transfer of the goods is must to the bank. Bank can sell the property without the
intervention of the court in case of default on loan.
Another method called equitable mortgage is also used in bank for creation of
charges.
Registration is not required. In both the cases, the mortgaged property is retained in
hand of the property.
While lending, adequate care is taken to ensure the liquidity of the lien item. In this
case, NBL choose such securities, which possess such liquidity.
National Bank exercises the lending function only it is safe and the risk factor is
adequately mitigated and covered. Safety depends upon the security offered by the
borrower.
In order to minimize the risk, National Bank invests its fund in different industries
of different industries situated in different regions of the country.
From the commercial point of view, National Bank considers sufficient yield of
return while financing a project.
In lending, the most important step is the selection of the borrower. Due, to the
asymmetric information and moral hazard, banks have to suffer a lot due to the
classified loans and advances, which weakens the financial soundness of the bank.
If the selection of the borrower is correct, that is the borrower is a good character,
capital and capacity or of reliability, resourceful and responsible the bank can
easily get the return from them.
After getting an application for a loan the past record of the applicant is carefully
iv. Financial statements (balance sheet, cash flow statement, and income
statement). If the borrower is a sole proprietor then the single entry accounting
v. If the amount is more then TK. 10 lac then report from credit information
After receiving the application from the client, National Bank Limited prepares a
Credit Line Proposal (CLP) and forwards the same to the Head Office to place
before Head Office Credit Committee (HOCC) for approval. It includes
4. Copy of T I N certificate.
the security.
5.8.5(A) Loan:
1. Letter of arrangement.
2. Letter of disbursement.
4. Letter of pledge.
5. Letter of hypothecation.
11. Copy of sanction letter mentioning detail of terms and condition duly
13. D P Note.
2. Letter of arrangement.
3. Letter of continuity.
4. Letter of lien.
8. D P Note.
Limited company).
2. Letter of arrangement.
3. Letter of continuity.
7. D P note.
company).
2. Letter of arrangement.
National bank Ltd. signed an agreement with the Western Union Financial services,
USA in 1993. Millions of people from different parts of the world are sending
money with confidence to their near and dear through the western union has the
most modern technology for remitting money within quiets possible time from any
part of the world through their more than 170000 representatives in 190 countries
and regions has established a unique money transfer system with western union of.
Through an online computer system units can be instantly of the world. 56.17
million dollar was remitted to this bank through this organization during the year
2003.NBL brought a substantial amount of foreign exchanges in to the country
through the western union in 2003, which is 44% higher than that of 2002 The
western union is a globally reputed name in money transfer services and data
exchange forever 150 years. Western union has continued its tradition of
possessing the latest technology and handling wide scale remittances.
Besides these, the branch has to prepare some internal statements as well as some
statutory statements, which are to be submitted to the Central Bank and the Head
Office.
Preparing the daily position of the branch comprising of deposit and cash.
Preparing the daily Statement of Affairs showing all the assets and liability of the
branch as per General Ledger and Subsidiary Ledger separately.
Recording inters branch fund transfer and providing accounting treatment in this
regard.
Preparing the weekly position for the branch which is sent to the Head Office to
Preparing the monthly position for the branch which is sent to the Head Office to
maintain Statutory Liquidity Requirement (S.L.R)
Make charges for different types of duties.
Preparing the budget for the branch by fixing the target regarding profit and
deposit so as to take necessary steps to generate and mobilize deposit.
Packing of the correct vouchers according to the debit voucher and the credit
voucher.
Chapter-6..
After analyzing the annual report and other papers, the evolution of performance
analysis and on the basis of my study I have got some findings about the National
Bank Limited.
2. The fund management system is very effective. For keeping this system
effective,
3. Necessary changes in credit policy, loan and advance policy, provision for
provision are made continuously.
4. The Officers engaged in loan management is very much aware in choosing right
person to provide loan to ensure its recovery.
8. The customer service is very much impressive than other financial institution.
12. Special schemes like consumer credit scheme, monthly saving scheme,
insurance scheme etc. are very popular.
18. In adequate facilities in maintaining the operation of ATM card, Master card,
Visa card etc.
Chapter-7..
The organization does not have a diversified range of products & services. Still the
bank is not fully computerized. Manual registers are used in some cases. However,
the income of the business is still heavily dependent upon its share on the retail
market. It caters less the corporate market than the SCB. This may leave it
vulnerable if for any reason its market share erodes. The retail sector is very price
sensitive. But it pay very less interest than other banks. So, if they found higher
interest rate offering by other private banks of Bangladesh then they will loose
customers. It has less promotion campaign than the other bank, because they
believe brand value is the top promoting entity for the company.
NBL has a goodwill that it provides different banking services to the people with a
minimum cost and cut a very little charge on its transactions. Although it already
has 121 branches to provide services to its customers, it also has the opportunity to
build up more branches to make more convenient for the customers. The banking
business of NBL and its other social activities have increased day by day.
Sophisticate customer service scheme of the NBL more preferable to customers
than other banks. Products & services development offers NBL many
opportunities. There is the opportunity to develop products and services such as
insurance business & huge investment in capital market etc.
Such high value items will tend to have associated with them, high profits. There
are also global marketing events that can be utilized to support the brand such as
the sports & other cultural activities.
competitive. This ultimately means that retail consumers are transacting in bank
around for a better deal. So if NBL charges a comparative high price for a bank
account service, or loan rate service, then the customers could go to the other bank
to compare fees & charges for the exactly the same services, and will take decision
the cheaper of the two.
NBL has to expose its international nature of trade more efficiently. It has to
recover costs and maintains margins over long periods of time. The new
technology has to use to protecting the currency value & use options for better
credit rate earnings. NBL has to come to with other sort of criterion thats why the
competitor have to fight very long to copy that exposure. NBL has to give a better
deal in the banking fees & charges for the customers for the retail banking sector.
Converting Weakness into Strength:
NBL has to focus equally to both ranges of customers either retail or corporate. It
has to build up a proper strategy thats why the corporate customers can be
interested to open more of corporate account in NBL. NBL also has to give higher
interest rate for various products & services to gain more market share in banking
business. They have to advertise their brand name more. They can sponsor their
name for various social activities, which will bring up NBL value more to the local
customers. They can also make social awareness to the local customers.
We know that a scan of the external macro-environment in which the firm operates
can be expressed in terms of the following factors:
1. Political.
2. Economic.
3. Social.
4. Technological.
NBL considers the PEST analysis very important to understand better the local
The internal environment internal customers like, office technology, wages and
finance etc.
1. The political environment is not stable, so as the banking sector. Though the
Bangladesh.
NBL considers the state of a trading economy in the short and long-terms. The
interest rates for various accounts are quite attractive. The bank also invested a
huge portion of money to the T-bill market. The level of inflation also affects the
business values in Bangladesh. Though as being a fore bank it can adjust that
inflation very easily.
1. It thinks about the principle religion of the country and gives its employees the
best possible benefit for that. Two bonuses in a year are based on two Eid festivals.
2. The attitudes towards other products and services of other competitive banks are
marked specifically. They try to update their system & procedure in a standard
manner.
3. Our mother tongue is Bengali. I saw the top level mangers are converse with
one another in Bengali.
4. NBL knows that, the people of Bangladesh are very emotional in nature. So, it
tries to adopt that emotion in their business for better understanding the local
customer.
7.2.4. Technological Factors
NBL allows a better technology for its products and services to be made more
cheaply and to a better standard of quality to the customer. These technologies
offer consumers and businesses more innovative products and services such as
ATM machine.
NBL offers its customers to a new way to communicate with consumers e.g.
Customer Relationship Management (CRM) etc.
Chapter-8
Recommendations:
I have some points to focus which will help the bank to improve the efficiency as
well as the quality of work. The points are as follows:
1. Management should set proper planning for its operations of each and every
work for the whole bank as well as all branches of NBL.
3. As the top management has decided to start online banking system, necessary
steps should be taken to make this decision implement as soon as possible.
9. It also tries to avoid duplication in any case through accuracy and efficiency.
10. It is required to develop some effective motivational programs.
11. Top management must ensure the proper implication of IT in all branches.
12. And most of all ensure proper communication with head office and other
branches.
Conclusion:
is increasing day by day in the private commercial sector especially in the private
banks.
As all the activities those are required to provide valuable services to its customers
to make them satisfy, are related with the fund management system, NBL is so
much careful about its fund management system. NBL always gives its highest
attention in monitoring and managing the bank fund, which is consists of fund,
capital, reserve, deposit, loan and advance. At present NBL is successful in
effectively and efficiently managing these vital issues. In spite of that, in order to
keep its success continue and reach at the pinnacle of success it, its managers,
board of directors and employee must have the comprehensive and clear idea about
the reserve, fund, loan, capital, deposit and liquidity regarding the smooth control
of bank and continue its vital operation toward countrys economic development.