CHAPTER 01

INTRODUCTION

1
1.1 Introduction

The internship program is an opportunity for the students and it bears a great significant for us.
It familiarizes the student with the practical business operations. The students of internship
program get the chance to understand the real business world closely and familiarize
themselves with internal and external expects of business. It gives them an opportunity to
develop the analytical skill and scholastic aptitude.

All over the world the dimension of banking has changing rapidly due to deregulation,
technological innovation and globalization. Commercial banks in Bangladesh have to keep
pace with the change in global business. Now banks have to compete in market place both with
the local institutions as well as with the foreign institutions.

To survive and thrive in such a competitive banking world, two important requirements are
development of appropriate financial infrastructure by the central bank and development of
“professionalism” in the sense of developing an appropriate manpower structure and its
expertise and experience. To introduce skilled banker, only theoretical knowledge in the field
of banking studies is not sufficient. An academic course of the study has a great value when it
has particular application in real life situation. So, I need proper application of my knowledge
to gate some benefit from my theoretical knowledge make it more tactful. When I engage
myself in such fields to make proper use of my theoretical knowledge in my particular life
situation. Such theoretical knowledge is obtained from a course of study at only the half way
of the subject matter. Internship implies on other the full application of the method and
procedures through rich acquire of subject matter can be forcefully applied in my day-to-day
life situation. Such a procedure of particular application is known as internship.

1.2 Objective of the Study

There are several types of objectives involves here for this study. The objectives of are
 To analyze the Bank’s overall performance.

 To know the procedure of General Banking operation.

 To know about the services provided by the Bank.

 To acquire the knowledge of practical operations and the function of the Bank.

 To gain an overall idea and know about the financial position of the Bank.

2
  To find out the exiting problems of the Bank (Branch).

 To recommend solutions to the exiting problem.

 To show the trend of the key financial indicate faced by the Bank Branch.

1.3 Scope of The Study

In the period of my involvement at Mugdapara Branch of Uttara Bank Limited where I

joined as an internee, I hope to understand the “Accounting Tools & Techniques of General
Banking Activities of Uttara Bank Limited” as my selected topics. My working area for
internship program was the Mugdapara Branch of the Bank. I tried with all my best to observe
the overall banking operations and day-to-day transactions & functions of the branch. For the
purpose of the relevant information of other branch and also head office, I am communicate
with the branch manager of Mugdapara Branch with the help of my branch advisor and also
tring to visit Head office and other branches for collecting information an overall banking
operation.

1.4 Rational of The Study

Historically Bangladeshi bank has been burdened with huge number of classified loans. As a
result the burden of bad dept. has a negative impact of their new investment. Many financial
institutions are trying to avoid giving long term loans to the industries, especially to new
industries. In this situation the concept of syndicate financing is a new concept in Bangladesh.
When I am successfully complete this study, it can be used to identify the performance of
Uttara Bank Ltd. And also invent new technique, which can be used to prevent a good loan to
become a classified loan and these technique can also be used in other Banks to get the same
benefit.

3
1.5 Methodology

The report has been prepared on the basis of experience gathered during the period of
internship. For preparing this report, I have participated in group discussions with my fellow
interns, collected data and sent some questionnaires to the selected Officials and interviewed
some of them. I also studied different files of the bank.
For the purpose of my study both the primary and the secondary information will be used for
analyses.

1.5.1 Primary Sources:

1. Personal observation.
2. Desk work in different section.
3. Discussion with the bank’s officers.
4. Discussion with my bank’s advisor/supervisor.

1.5.2 Secondary Sources:

1. Annual report of the Bank.

2. Publications of Bangladesh Bank.
3. Different types of book related with banking.
4. Newspaper.
5. Website information.

1.5.3 Data Analysis:

For the purpose of my study, it was analyzing the data on the Bank. For these purpose the
following techniques have been used:

1. Horizontal Analysis.
2. Vertical Analysis.
3. Ratio Analysis.
4. Trend Analysis.

4
1.6 Limitation of the Study
To prepare this report, I will face some limitations, which are mentioned in the follows:
1.6.1 Time Limitation:
1.6.2 Lack of Data:
1.6.3 Limitation of Scope:
The main and the first constraints is time that hinder to
cover all aspect of the study. In three month it’s not
possible to cover learning about any bank properly and
also going to write a report on this. So limitation of time
is the main problem.
If anyone can wise than he can gather primary data to the
banks employees. But this data is not proper for writing
a report. Secondary data is also very rears. It is just only
the annual report and the web site. But in the web site the
information is updated and is not properly given.
While collecting data, the authority did not disclose
much information due to the confidentially of the Bank.
5
CHAPTER 02
ORGANIZATIONAL PROFILE

6
2.1 Historical Background of UBL:
Uttara Bank Ltd. has been a nationalized Bank in the name of Uttara Bank under the
Bangladesh Bank (Nationalization) order 1972, formally known as eastern Banking
Corporation limited.

 Uttara Bank Ltd. Started functioning from 28.01.1965

 Consequent upon the amendment of Bangladesh bank ( Nationalization) order 1972
 Uttara Bank Ltd. Converted into Uttara bank Ltd. As a public limited company in the
year 1983 and obtained business commencement certificate on 21.08.1983
 Uttara Bank Ltd. Floated its shares in the year 1984
 Uttara Bank Ltd. Has 223 branches all over Bangladesh
 The bank is listed in the Dhaka stock exchange ltd. And also in Chittagong stock
exchange ltd
 It publicly quoted company for trading of its shears.
 The registered office of the bank is located in 90, Motijheel commercial area, Dhaka-
1000
 Uttara Bank is one of the largest and oldest private sector commercial bank in Bangladesh,
with years of experience. Adaptation of modern technology both in terms of equipment and
Banking practice ensures efficient networking and reach capability. Uttara is a Bank that serves
both clients and country.

UBL is one of the largest private Banks in Bangladesh.

 It operates through 223 fully computerized branches ensuring best possible and fasted services
to its valued clients.
 The Bank has more than 600 foreign co-respondents worldwide.
 Total number of employees nearly 3780.
 The board of directors consists of 15 members.
 The Bank is headed by the managing director who is the chief executive officer.

The head office is located at Bank’s own 18-storied building at Motijheel, the commercial
center of the capital, Dhaka.

UBL Networks
Corporate Offices ( Corporate Branch & Local Office )
2
Regional Office
12
Worldwide Affiliates
600
Total Branches ( Including Corporate Branch & Local Office )
223

7
 Authorized Dealer Branches
38
Treasury & Dealing Room
1
Training Institute
1
Man Power
3730

2.2 Vision:
To become a leading banking institution which play a pivotal role in the development of the
country.

1. Prime objective is to deliver a quality that demonstrates a true reflection of its vision.
2. To provide quality service to the customer.
3. Bring total satisfaction to its clients, sponsors and employees.

2.3 Mission:
1. Continuous improvement in our business policies.
2. Cost reduction integration of the technology at all level.

Uttara Bank Ltd. has 223 branches all over Bangladesh. Mugdapara Branch is one of them.
Like other branch it’s operate several department. They are like
1. General Banking
2. Loan and Advance

In this branch operation is mostly covered by the computer system. By the use of computer
here operate is like clearing, e-mail, money laundering, clean cash and all types of letter/
application and other related works with computer.

Through there are a little bit work of Foreign exchange, but FDD, LC, SC, LSC, DD, MT, TT
are doing here.

8
2.4 Performance of Uttara Bank Ltd.
Uttara Bank Ltd. Closed the year 2014 recording significant growth in every sector despite
various types of economic crises. Improvement in deposit, loans & advance, compliance on
corporate Governance, success in foreign trade business and effective risk management have
placed the bank in a sound footing during the year under report. The bank made satisfactory in
all area of business operation in 2014.

2.4.1 Share Capital:

The authorized capital of the Bank was Tk. 6,000 million as on 31.12.2014. The paid up capital
of the Bank has been increased to Tk. 4000.8 million from Tk. 3,637 million due to declaration
of 10 percent bonus share of the year 2013. The total equity of shareholders of the Bank at the
end of the year 2014 stood at Tk. 12,179.9 million.

TAKA IN MILLION

12,179.90
10,679.40
9,796.90
9,634.00

2011 2012 2013 2014

Figure: Share Capital

2.4.2 Reserve Fund:

The reserve fund of the bank increased to Tk. 2,890.2 million during the year by registering
40.70 percent increases over last year’s Tk. 2054.2 million.

9
2.4.3Deposit:
The Bank deposit at Tk.114,158.7 million as of December, 2014 compared to Tk.111,300.1
million in 2013, thus recording 2.57% growth, Competitive interest rates, attractive deposit
products, deposit mobilization efforts of the Bank and confidence reposed by the customer in
the Bank contributed to the notable growth in deposit.

Deposit & Advance (Taka in Million)

120,000.00

100,000.00

80,000.00

60,000.00

40,000.00

20,000.00

0.00
2011 2012 2013 2014

Figure: Deposit & Advance

2.4.4Investment:
The total investment portfolio of the Bank stood at Tk. 437.81 crore in December 31, 2014 as
compared to previous year recording a decline by 22.60 percent.

The Uttara Bank Limited is primary dealer of Government securities. The Bank as a primary
dealer is purchase the unsold Bond/ bill which are put to auction in order to keep underwriting
commitment. As a result the investment in Bond and Treasury bill increased. Besides one of
the investment activities of the Bank was maintenance of statutory Liquidity Reserve which
mainly comprise Government Treasury Bond and Treasury bill of different terms, National
prize Bond, Government Approved Debenture and ICB shares. The Bank invested total Tk.
42,787.9 million in Government securities in 2014.

10
2.4.5 Investment in Treasury Bonds and Others Securities:
Utilization of surplus fund was a major function of treasury department. Due decline of surplus
fund against previous year the entire investment of the Bank stood at Tk. 42,787.9 million at
the close of the year 2014. Mentionable that Bank has been able to increase loans and advance
in small business as well as different sector by reducing investment. One of the investment
function of the Bank was maintenance of “Statutory Liquidity reserve” which generally
compromise of Govt. Treasury Bills and Bonds (HTM) of various tenures, National Prize
Bonds and Govt. approved Debenture. The shares of Govt. securities were amounted to Tk.
42,787.9 million in total investment. Which was 45,749.5 million in the previous year.

Head wise position of Bank’s invested Fund at the end of the Year 2014 is given below:

Head of Investment (Taka in million)

Treasury bills and bonds 42,336.7
Approved Debenture (in purchase price) 10.0
Share & Debenture of ICB sponsored
companies 6.7
Prize bond 13.2
Shares of companies:
1. Eastern Bank Ltd. 104.0
2. Karmasangsthan Bank 10.0
3. ICB (Approved) 199.4
4. CDBL 1.6
5. Other companies 106.3 421.3
Total 42,787.9

11
2.5 SWOT Analysis For Uttara Bank Limited
Strength Weakness

1) Uttara Bank is one of the largest and 1) There banking system is not fully
oldest private-sector commercial bank automation system.
in Bangladesh.
2) They have over two hundred twenty 2) There security (security camera) system
three (223) branch for customer service. has to improve.
3) The bank has more than 600 foreign
correspondents worldwide. 3) There MIS is not so strong.
4) They have over 3730 employees for
ensure best possible and fastest services 4) The absence of certain strengths may be
to its valued clients. viewed as a weakness.
5) Uttara is a Bank that serves both clients
and country. 5) They working system is known also
6) They have an 18-storied building at manual system.
Motijheel of their own.
7) Working environment of UBL is such
wonderful.

Opportunities Threats

1) The external environmental analysis 1) Compete with the huge number of

may reveal certain new opportunities for competitors in the market.
profit and growth.

2) They have a great opportunity of leading 2) Change in the external environmental

banking institution and to play a pivotal role also may present threats to the firm.
in the development of the country though
they have 223 branches. 3) Going with new strategy would be risky.

SWOT Analysis

Internal Factors External Factors

Strengths Weaknesses Opportunities Threats

Figure: SWOT Analysis

12
 UTTARA BANK LIMITED
BALANCE SHEET
AS AT 31 DECEMBER 2014

2014 2013
PROPERTY AND ASSETS Notes Taka Taka
Cash 04 10,701403,843 8,775,080,704
Cash in Hand (including foreign currencies) 2,371,010,602 2,685,850,825
Balance with Bangladesh Bank and its
agent Bank(s) (including foreign currencies) 8,330,393,241 6,089,233,879
Balance with other Banks and
financial institutions 05 1,012,268,602 1,419,777,400
In Bangladesh 54,762,804 523,349,441
Outside Bangladesh 957,505,798 896,427,959

Money at call and short notice 06 460,000,000 600,000,000

Investments: 07 42,787,914,497 45,749,476,371

Government 42,359,906,191 44,638,631,012
hers 428,008,306 1,110,845,359
Loans and Advances: 08 74,198,912,815 64,829,765,851
Loans, cash credits, over drafts etc. 71,312,996,622 61,181,473,090
Bills purchased and discounted 2,885,916,193 3,648,292,761
Fixed assets including land, building
furniture and fixtures 09 3,351,964,701 3,204,271,407
Other Assets 10a 7,963,268,899 7,456,268,224
Non-Banking Assets 10b 71,276,237 75,399,854
TOTAL ASSETS 140,547,009,594 132,110,043,811

13
Liabilities:
Borrowings from other Banks,
Financial Institutions and Agents 11 2,068,330,312 55,856,997

Deposits and other accounts: 12a 113,836,737,696 110,989,817,867

Current and other accounts etc. 43,951,345,758 41,986,398,330
Bills payable 2,417,499,268 1,799,303,242
Saving bank deposits 28,464,319,302 24,984,705,080
Fixed deposits 36,849,717,017 40,484,068,695
Other deposits 2,153,856,351 1,735,342,520
Other liabilities 13a 12,425,360,489 10,363,225,564
TOTAL LIABILITIES 128,330,428,497 121,408,900,428

CAPITAL/SHARE HOLDERS' EQUITY

Paid up capital 14.2 4,000,803,370 3,637,093,980
Statutory reserve 15 4,030,837,039 3,680,837,039
Other reserves 16 3,087,257,251 2,390,506,675
Surplus in profit and loss account 17a 1,097,645,237 992,668,383
Total equity attributable to equity holders
12,216,542,897 10,701,106,077
Non-controlling interest 38,200 37,306
TOTAL LIABILITIES AND SHARE HOLDERS'
EQUITY 140,547,009,594 132,110,043,811

14
 UTTARA BANK LIMITED
CONSOLIDATED PROFIT & LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2014

2014 2013
Notes Taka Taka
OPERATING INCOME :
Interest Income 19.1.a 9,439,769,828 9,261,110,722
Interest paid on deposits, borrowings etc. 20a 7,260,076,507 8,302,433,489
Net Interest Income 2,179,693,321 958,677,233
Income from Investment. 21 4,378,147,115 4,447,142,890
Commission,Exchange and Brokerage 22 786,774,740 879,974,481
655,211,100
Other Operating Income 23 573,722,170

Total operating income 7,918,337,346 6,941,005,704

OPERATING EXPENSES
Salary and allowances. 24 2,729,167,778 2,563,440,679
Rent, taxes,insurance,electricity etc. 25 386,371,886 310,673,620
Legal expenses 26 16,724,222 13,932,373
Postage,stamp,telecommunication etc. 27 107,921,574 80,443,934
Stationery,printing,advertisements etc. 28 108,892,992 96,207,426
Managing Director's salary & allowances and fees 29 12,833,680 11,760,420
Directors' fees 30 2,094,000 1,602,000
Auditors' fees 31 520,000 530,000
Repair, maintenance and depreciation
of Bank's property 32 294,928,538 194,695,240
Other expenses 33 422,803,588 517,794,222

Total operating expenses 4,082,258,258 3,791,079,914

Profit before provision 3,836,079,088 3,149,925,790

Provision 910,000,000 455,000,000

Provision for loans & advances 34 904,748,000 450,000,000
Provision for Other 35 252,000 -
Transfer to benevolent fund 5,000,000 5,000,000
Profit before tax 2,926,079,088 2,694,925,790
Provision for Taxation 1,521,827,852 1,375,458,317
Current tax 1,521,827,852 1,289,549,014
Deferred tax 85,909,303
Profit after taxation 1,404,251,236 1,319,467,473
Retained earning brought forward 17.1 43,394,895 1,714,894

15
Profit available for appropriation 350,000,000 350,000,000
Appropriation
Statutory reserve 350,000,000 350,000,000
General reserve - -

Retained surplus 17a 1,097,645,237 992,668,383

Earning per share (EPS) 40a 3.51 3.30

16
 UTTARA BANK LIMITED
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2014

Particular 2014 2013

Cash flows from operating activities (A)

Interest receipt in cash 13,777,286,483 13,661,534,694

Interest payment (7,260,076,507) (8,302,433,489)
Dividend receipts 79,748,918 53,887,579
Fees, commission & exchange receipt in cash 786,774,740 879,974,481
Recoveries of loans previously written off 47,135,388 174,299,018
Cash payments to employees (2,742,001,458) (2,575,201,099)
Cash payment to suppliers (154,192,740) (115,955,631)
Income tax paid (1,290,315,022) (1,167,447,323)
Receipts from other operating activities 526,586,782 480,912,082
Payments for other operating activities (953,064,452) (945,148,944)
Cash generated from operating activities before
changes in operating assets & liabilities 2,817,882,132 2,144,421,368
Increase/decrease in operating assets & liabilities (3,048,406,617) 2,078,502,975
Statutory deposits - -
Purchase/sale of trading securities 295,033,826 (1,513,383,831)
Loans & advances to other banks 140,000,000 (400,000,000)
Loans & advances to customers (other than banks) (9,369,146,964 (3,501,202,358)
Other assets (2,163,651,918) 2,022,873,973
Deposits from other banks/borrowings 178,590,765 (233,793,029)
Deposits from customers (other than banks) 2,668,329,064 17,448,417,509
Other liabilities on account of customers 5,555,919 5,555,919
Other liabilities 5,196,882,691 (11,749,965,208)
Net cash received from operating activities (230,524,485) 4,222,924,343

Cash flows from investing activities (B)

Proceeds from sale/payments for purchase 2,666,528,048 (2,237,859,744)

Purchase of property, plants & equipment’s (372,864,446) (511,195,031)
Sale of property, plants & equipment’s 1,235,314 620,492
Net cash received in investing activities 2,294,898,916 (2,748,434,283)
Cash flows from financing activities (C)

Receipts from issue of loan capital & debt securities - -

Payment for redemptions of loan capital & debt securities - -

17
Receipts from issue of ordinary share - -
Dividend paid (545,564,090) (495,967,363)
Net cash received from financing activities (545,564,090) (495,967,363)

Net increase/decrease in cash & cash equivalents (D) (A+B+C) 1,518,810,341 978,522,697
Effects of exchange rate changes on cash & cash equivalents (E) - -
Opening cash & cash equivalents (F) 10,194,862,104 9,216,339,407
Closing cash & cash equivalents (G) (D+E+F) 11,713,672,445 10,194,862,104
Cash & cash equivalents at end of the year
Cash in hand 2,371,010,602 2,685,850,825
Balance with Bangladesh bank & its agent banks 8,330,393,241 6,089,233,879
Balance with other banks & financial institutions 1,012,268,602 1,419,777,400
11,713,672,445 10,194,862,104

18
2.6 ASSETS:
As of 31st December 2014 total asset of the Bank stood at Tk. 140,810.3 million whit an
increase of 6.36 percent as against 2013. The increase of asset was mainly driven by significant
growth of customer’s deposits which were used for funding in loans & advances & holding of
securities. The increase in asset is determined by investments & loans & advances.

TAKA IN MILLION

140,810.30
132,385.50
123,790.60
97,417.90

2011 2012 2013 2014

Figure: Assets

2.6.1 CASH:
Cash in hand stood at Tk. 2,371 million in 2014 as against tk. 2,685.9 million of the previous
year.

2.6.2 Investment:
Uttara Bank Limited is a primary dealer of government securities. The Bank as a primary dealer
is to purchase the bond/bill which is put to auction in order to keep underwriting commitment.
As a result band & Treasury bill increased. Government approve ICB share. The bank invest
total Tk. 42, 787.9 million in 2014 as compared to Tk. 45,749.5 million of the previous year.

19
 Investment (Taka in Million)

2011
2014 15%
28% 2011
2012
2012 2013
27%
2014
2013
30%

Figure: Investment

2.6.3 Loan and Advance:

Uttara Bank Limited 2014 steady growth in ihe credit protfolio postion of 14.45 percent. Tk.
74,198.9 million during the year 2014 as compared to tk. 64,829.8 million of previous year.
Average loan per branch stood at tk. 332.7 million.

2.6.4 Liabilities:
Total liabilities of the Bank stood at Tk. 128,630.4 million as of 31 December 2014 registering
a growth of 5.69 percent over the last year. This was mainly due to increase in customers
deposits.

2.6.5 Other Liabilities:

During the year 2014 other liabilities of the Bank increased to tk. 12,403.4 million from Tk.
10,350.2 million of 2013.

20
 TAKA IN MILLION

12,403.40
10,665.70

10,350.20
8,402.20

2011 2012 2013 2014

Figure: Other Liabilities

2.6.6 Total Share Holders Equity:

Shareholders’ equity of common size balance sheet of Uttara Bank ltd. shows 10,679.4 million
and 12,179.9 million in the year 2013 and 2014 respectively basing on total liabilities and
shareholders’ equity in each year. Shareholder equity includes Share capital, Share premium
account, reserve and surplus, and revolution surplus. The Bank has increase their shareholder’s
equity, it’s a better side for the organization.
12,179.90
10,679.40
9796.9
9634

2011 2012 2013 2014

Figure: Total Share Holders Equity

21
2.6.7 Net Interest Income:
The net interest income of the Bank under review stood at tk. 2,152.6 million as against Tk.
939.9 million of the previous year.

2.6.8 Total Operating Expense:

In the year 2014 total operating expense stood at Tk. 4,081.2 million as against Tk.
3,788.5 million which was previous year.

2.6.9 Net Profit before Tax:

Net profit of the bank before tax stood at Tk. 2,902.8 million as against Tk. 2,680.4
million of the previous year

2.6.10 Net Profit after Tax:

Net profit of the bank after tax stood at Tk. 1,389.4 million in 2014 as against Tk.
1,310.4 million of the previous year thus records a growth of 6.03 percent.

Per-Tax &Post-Tax Profit (Taka in Million)

3,500.00
3,000.30
2,902.80
3,000.00 2,680.40
2,536.40
2,500.00

2,000.00
1,650.30
1,310.40 1,389.40
1,500.00 1,236.40

1,000.00

500.00

0.00
2011 2012 2013 2014

Pre-Tax Post -Tax

Figure: Net Profit after Tax

22
2.6.11 Provision for tax:
Provision for tax for the year was Tk. 1.513.4 million compared to Tk. 1,370 million
of previous year. According to Bangladesh accounting standards (BAS) 12 current tax
of Bank has been calculated.

2.7 Corporate Governance:

In recent times, corporate governance has been considered most essential aspect of efficient
management of the company fairness, transparency accountability and responsibility are the
minimum standard of acceptable corporate behavior today. Uttara Bank Limited continues to
ensure the compliance of corporate governance as per Securities and Exchange Commission
rules and regulation. Corporate governance establishes specific responsibility and ensures
accountability. A report regarding corporate governance has been shown in the annual report.

2.8 Corporate Social Responsibility:

Uttara Bank Ltd. embraces a culture of continuous involvement to fulfill our corporate social
responsibility. We have a deep commitment, loyalty and a high sense of responsibility to our
nation and its people. Uttara Bank Ltd. Conforms to all of the astringent regulations issued by
the government and the Bangladesh Bank. As per of our corporate social responsibility, Bank
contributes greatly to the nourishment of the country’s all types of calamities, arts, culture and
sports. As part of its strong commitment to upholding corporate social responsibility, Bank
donated Tk. 23.4 million to chief advisers relief fund to the massively distressed people who
were affected by flood & devastating cyclone ‘Sidr’ in 2014.

23
2.9 Uttara Bank Limited at a Glance
Company Profile
Name of organization
Uttara Bank Limited

Year of Establishment
1964 Eastern Banking Corporation then After 1971
Uttara Bank Limited
Authorized Capital
Tk.3200.00 Million
Paid in capital
Tk.1597.00
Face value Per Share
Tk.100
Number of Director:13
Number of Branch :217
Managing Director
Shamsuddin Ahmed
Contract Address
Uttara Bank Limited
90,Motijheel Commercial Area
Dhaka-1000,Bangladesh
GPO Box 217 & 818
Phone:8802-9551162
Fex:8802-7168376
SWIFT:UTBLBDDH
E-Mail: uttara@citecho.net,
Web: www.uttarabank-bd.com
Cable
Bankers

24
Board of Directors

1. Mr. Azharul Islam Chairman

2 Mr. Iftekharul Islam Vice Chairman

3 Mr.Syed A.N.M Wahed Director

4 Engr. Tofazzal Hossain Director

5 Mr. Asif Rahman Director
6 Mr. Faruque Alamgir Director

7 Mr. MD. Arif Rahman Director

8 Dr. Md. Rezaul Karim Mazumder Director

9 Mr. M. Tajul Islam Director
10 Prof. Dr. Abu Hossain Siddique Director
11 Col. Engr.M.S. Kamal (Retd.) Director

12 Md. Abul Barq Alvi Director

13 Dr. Md. Nazmul Karim Chowdhury Director

14 Mr. Shaikh Abdul Aziz Managing Director & CEO

25
Hierarchy of management of Uttar Bank:

CHAIRMAN

BOARD OF DIRECTORS

MANAGING DIRECTORS

ADDITIONAL MANAGING DIRECTORS

DEPUTY MANAGING DIRECTORS

ASSISTANT MANAGING DIRECTORS

GENERAL MANAGER

DEPUTY GENERAL MANAGER

ASSISTANT GENERAL MANAGER

SENIOR PRINCEPLE OFFICER

PRINCIPLE OFFICER

OFFICER GRADE-1

OFFICER GRADE-2

ASSISTANT OFFICER

OFFICE ASSISTANT

26
2.9.1 Organogram of risk Management process
Following organogram for risk management process has been functioning for risk assessment
as per Bangladesh Bank instruction:
COE/MD
Chief Risk Officer
DMD
DMG/GM/EGM
SO/PO/SPO/AGM SO/PO/SPO/AGM SO/PO/SPO/AGM SO/PO/SPO/AGM SO/PO/SPO/AGM
Dealing Officer Dealing Officer Dealing Officer Dealing Officer Dealing Officer
Collection of Monthly Arrangement of Calculation of Risk Assessment of Conduct of periodic
Risk Management monthly Risk Appetite its review & capital under stress test analysis of
data, scrutiny & modification all board Basel 2 accord Banks own resilience
Management,
preparation of memo preparation & application of capacity etc.
Preparation of
monthly Risk submission of Action plan to
minutes, keep out Bank
Management paper papers/returns to
etc. Presentation & all Bangladesh Bank etc. from excessive
related works etc. risky business etc.

2.9.2 Bank’s Own Premises:

A magnificent 18 Storied Bank’s own building located at the hub of Motijheel Commercial
Area within the Metropolitan City of Dhaka signifies the concrete symbol of tradition and
stability of the Bank. Different Departments of Head Office and Corporate Branch have been
functioning in the same building covering 10 floors. The remaining 8(Eight) floors have been
rented out to the different Insurance Companies and Commercial Enterprises. Local Office,
Eastern plaza Branch, Hotel Isakha Branch, Dar-us-Salam Road Branch, Lease Financing Unit
in Eastern Tower Building, Nabagram Branch in Manikgonj, Zonal Office and KDA Branch
in Khulna and Shaheb Bazar Branch in Rajshahi are also working in other Bank’s own
Building.

27
Branch Location all over Bangladesh Zonal Offices of UBL:

Dhaka Central Zone. Khulna Zone.

Dhaka South Zone. Sylhet Zone

Dhaka North Zone. Barisal Zone.

Narayangonj Zone. Mymensingh Zone.

Chittagong Zone. Bogra Zone

Rajshahi Zone. Comilla Zone.

Zonal Offices of UBL:

Zonal Office of UBL

# Dhaka Central Zone.

# Dhaka South Zone.
# Dhaka North Zone.
# Narayangonj Zone.
# Chittagong Zone.
# Rajshahi Zone.
# Khulna Zone.
# Sylhet Zone
# Barisal Zone.
# Mymensingh Zone.
# Bogra Zone
# Comilla Zone.

28
Graphically UBL Countrywide Branches:

Figure: Graphical UBL Countrywide Branches

29
2.9.3 Human resources of Uttara Bank Limited
Human resources are one of the key elements of success in case of any kind of business.
Banking sector is not exceptional. So the authority believes that investment in human
resources will ultimately return high dividend and also consider as intellectual property of
the Bank. The Bank offer competitive complete package to the employees. They also
identify the importance of well trained professional staff whose skill and commitment will
help the bank to achieve the goal. They also recognize the importance of employee’s
participation in standardization and general wellbeing of the company. They believe that
their success depends on employees who are working for together in the interest of the
client. The authority have follow the below policies for the development of human
resources.
 The Bank committed to nurturing the employee relationship by continuous
development of innovative rewards and incentive programs that focus on long and
short term operational and strategic goals.
 Give emphasis on team work, training and philosophy of internal promotion to
enhance the empowerment of employees.
 For free exchange of positive ideas within the workplace a policy is adopted for
open, honest and two way communication.
 For maintaining human resources they reward them with performance bonus,
overseas trip, promotions and increments reasonably.
Besides developing the human resources professionally with the view of Uttara Bank Limited has
established a library where all sorts of books including professional books are available so that the
officers and executives can sharpen and updated their knowledge.

The total manpower of the Bank in different grades as on

31.12.2014 was an under:

Executive (Asstt. General Manager & above) 157 4.21%

Offcers 2,328 62.41%
Asstt Oficers 505 13.54%
Others 740 100%
Total 3,730 100%

30
 Figure: Human Resource

2.9.4 Statutory & Other Reserve

The statutory & other reserve increased to Tk. 8,179.1 million during the year by
registering 16.14 percent increase over Tk. 7,042.3 million of the last year.

Figure: Capital & Reserve

31
 THREE YEARS AT A GLANCE
(Amount in Million)
Sl.No Particulars 2014 2013 2012
Income Statement
1 Gross Income 15,181.1 15,245.1 13,674.3
2 Gross Expenditure 11,368.3 12,109.7 10,412.9
3 Gross Profit 3,812.8 3,135.4 3,261.4
4 Pre tax Profit 2,902.8 2,680.4 2,536.4
5 Post-tax Profit 1,389.4 1,310.4 1,236.4
Balance Sheet
6 Authorized Capital 6,000 6,000 6,000
7 Paid-up-Capital 4,000.8 3,637.1 3,306.4
8 Reserve Fund & Other Reserves 8,179.1 7,042.3 6,490.5
9 Shareholders’ Equity 12,179.9 10,679.4 9,796.9
10 Deposit 114,158.7 111,300.1 93,658.6
11 Advances (Gross) 74,198.9 64,829.8 61,328.6
12 Investment 42,787.9 45,749.5 41,998.2
13 Guarantee Business 2,394.2 2,566.9 1,878.6
14 Export Business 13,447.3 14,306.8 14,192.9
15 Import Business 45,870.9 40,336.8 35,418.6
16 Foreign Remittance 52,030.2 44,301.3 43,585.6
17 Fixed Assets 3,352 3,204.3 2,843.4
18 Total Assets 140,810.3 132,385.5 123,790.6
19 Classified Loans & Advance 5,875.7 5,209.5 5,161.9
20 Total Off Balance Sheet Exposures 25,358.2 18,775.9 12,005.3
BIS Capital Measures
21 Required Provision 9,616.7 8,195.2 7,518.7
22 Actual Capital 11,493.3 10,203.8 9,300.6
Credit Quality
23 Required Provision 1,530.8 1,357.7 1,740.9
24 Provision Maintained 1,542 1,419.5 1,803.5
25 Required Prov. Against off Balance 253.6 187.8 120
Sheet Exposures
26 Provision Maintained 254 188 120.1
Share Information
27 Earning Per Share (Face value tk.10) 3.47 3.28 3.40
28 Market Value Per Share (tk.10) 25.90 31.10 38.10
29 Price Earning Ratio (Time) 7.46 9.48 11.21
30 Book Value Per Share (NAV) 30.44 29.36 29.63
Operating Performance Ratio
31 Advance Deposit Ratio 0.65:1 0.58:1 0.65:1
32 Total Advance/Classified Advance (%) 7.92% 8.04% 8.42%
33 Total Advance/Classified Advance(net) % 5.48% 5.85% 4.32%
34 Income from Equity (%) 11.41% 12.27% 12.62%
35 Income from Assets (%) 0.99% 0.99% 1.00%
Other Information
36 Number of Shareholders 76,389 82,081 74,336
37 Number of Branches 223 220 215

32
38 Number of Employees 3,730 3,769 3,560
39 Human Resource Development 4,421 1,958 1,855

33
CHAPTER 03
GENERAL BANKING

34
3. Introduction of UBL, Mugdapara Branch:
Uttara Bank Limited, Mugdapara Branch is situated at the Awal Super Marker (1st floor)
126/2, North Mugdapara Dhaka-1214. It has been providing banking service for the
customer of Mugda & nearby area.

3.1 General Banking

There are several types of departments perform in a Bank. General Banking is one of the most
important departments for banking sector. General Banking department is that department
which is mostly exposed to the minimum number of bank customers. It is the introductory
department of the bank to its customers. There are no businesses in the world who does not
think about profit. All business concern about profit through selling product or provide
services. A bank provides various type of financial service to its customers for profit.
Mugdapara Branch of Uttara Bank Ltd. Has all required of general banking and all these section
are run by manpower with their high quality banking knowledge.

Under General Banking department the following sector are included:

 Account opening department

 Cash department
 Clearing department
 Collecting department
 Local remittance department
 Loan and advanced.

In the following they are shortly describe:

3.2 Account opening department

The relationship started with the customer and the bank by opening the account. Initially all
the accounts are opened with a deposit of money by the customer. But in this day there are
several types of rules and regulation provided by the government for opening the account. This
is only for the terrorist (JMB) arise of our country that damages the total nation. Now if anyone
wanted to tell about their money sources and face various types of question.

35
3.2.1 Function of The Department:
The function of the department is to perform the following main function:
 Accepting Deposit
 Opening of Account
 Cheque Book Issue Transfer of Account
 Transfer to Account
 Closing of Account

3.2.2 Accepting Deposit:

Deposits are life blood of a commercial bank. Without deposit there are no accounts can be
opened. In Mugdapara Branch there are various types of account are offered for the various
customer. They are different group. They are like:
 Demand Deposit Account
 Time Deposit Account
 Fixed Deposit Account

3.2.3 Demand Deposit Account:

The amount in account are payable in demand so it is called demand deposit account. The
following accounts are under demand deposit accounts:-

 Current Account
 Saving Account
 STD (short notice term deposit)
 CC

3.2.4 Current Account:

These types of account can be opened by both individual and business concern. A current
account holder can draw cheque on his account for any amount for any number of times in a
day as the balance in his account permits. When the amount is than the account holder may be
remind it a few days ago. This account provides no interest. The minimum balance to be
maintained is Tk. 2000. No new account can be opened with a cheque.

3.2.5 Savings Account:

Individuals for savings purposes open this type of account. Current interest rate of these
accounts is 5.50% per annum. A minimum balance of TK. 1000 is required to be maintained
in a SB account interest on CB account is calculated and accrued monthly and credited to the
account half yearly. Interest calculation is made for each month on the basic of the lowest
balance at credit of an account in the month. A depositor can withdraw from his SB account
not more than twice a week up to an amount not exceeding 25% of the balance in the account.

36
  Any Bangladesh national residing home or abroad may open savings account with
UBL.
 This account may be opened in single/joint name.
 The account holder may nominate his nominee in this account.
 The nominee can get the balance amount without submitting succession certificate after
the death of account holder.
 This account bears usual rate of interest.

3.2.6 Requirement for Opening of the A/C.

 Account opening form as per format below. The account opening form and signature
card to be filled in and duly signed.
 Two copies passport size photographs of the account holder.
 Photograph of nominee (if any) duly attested by the account holder.
 Photocopy of the 1st 7 pages of the passport for non-resident Bangladeshi national.
Signature in the account opening form/card must be same with the signature of the passport.

3.2.7 Special Notice Term Deposit (STD):

The deposit in this account is withdrawal on prior notice varying from 7 to 29 days and 30 days
or more. The interest is paid on the balance of the account. Current interest rate is 6.50% per
annum.
 Govt., semi-Govt., autonomous organization and an individual may open STD account
with UBL.
 UBL offers attractive/competitive rate of interest in STD account.
7 Days’ notice required to withdraw big amount.

3.2.8 Opening Procedure:

For opening such A/C, application in the prescribed from along with a set of specimen signature
duly verified by Bangladesh mission abroad or by a reputable bank of any other person known
to the Bank, should be obtained by the brandies. In case of persons, already maintain any F.C
A/C or N.F.C.D. A/C with them, reference to that F.C A/C will serve, the purposes of
introduction, the branch may verify the signature from the specimen signature and already
available with them. Only one such F.C A/C can be maintained and the balance in the A/C
should not exceed $30,000- or equivalent pound sterling at any one time. The A/C holder is
also required to submit photocopies of passport, visa, and work permit/contract. Ac this is a
current account no interest is paid to the A/C holder.

37
3.2.9 Time Deposit Account:

The amount in this A/C is payable only after stipulated time. The following A/CS are under
time deposit a/c: Fixed deposits which are repayable after the expiry of fixed period and
negotiable. Bearer certificate of deposits (BCD), which are repayable after the expiry of fixed
period but are negotiable. These are not renewable. Non-resident foreign currency deposits are
them deposits maturing after 1 month, 3 month and 1 year. This A/C’s can be opened either in
U.S dollar or pound sterling. No interest is case of premature encashment.

3.2.10 Fixed Deposit Account

These are deposit, which are made with the bank for a fixed period specified in advance. The
band need not maintain each reserve against these deposit and therefore, bank gives high rate
of interest on such deposits. A FDR is issued to the depositor acknowledging receipt of the sum
of money mentioned therein. It also contains the rate of interest and the data on which the
deposit will fall due for payment.

3.3 Interest on deposits

Particular Rate of interest

Interest rate on deposits:
Savings deposits 4.50%
Special notice deposits (STD) 8.00%
Fixed deposits (time deposits)
3 Month 7.50%
6 month 7.75%
1 year 8.00%
2 years and above 8.00%
3 years above 8.00%

38
3.4 Opening of Account
It includes two steps. They are:-
1. Account opening procedure.
2. Classification of customer.

3.4.1 Account Opening Procedure:

Document needed for each accounts separately:
(Current/ saving accounts)

3.4.2 Current Account

# Limited company
 Certificate of incorporation.
 Certificate of commencement of business.
 Memorandum of association.
 Article of association.
 Power of attorney.
 Resolution of the board of director authorizing opening of an accounts.
 Societies/club/association.
 Other than above mentioned common documents resolution of who operates the accounts
must be noted.

# Proprietorship Firm:

Name of the authorized persons, designation, specimen, signature card, trade license, and
passport/chairman certificate.

# Partnership Firm:
* Account must be opened in the name of firm.
* The form should describe the name and address of the entire partner.
* Trade license from City Corporation is needed.
* Partnership deed.
* Letter of authority is achieving.

39
 Account opening procedure

Applicant fills up the He is requested to fill up the An account holder needs

application in the specimen signature card introduction form an account
prescribe form holder

After depositing cash Issuance of deposit slip and the The authorized officer
Cheque book is issued must be made in cash. scrutinizes the introduction
and examines the document

Figure: Account opening procedure

1. Account opening from duly filled up.

2. Specimen signature card in duplicate.

3. Certified copy of bylaws, rules and regulation in case of corporation and autonomous
body are to be obtained.
4. Certified copy of the resolution-authorizing opening of an account.

5. List of member of the executive committee and list of directors are to be obtained.

6. Partnership deed, in case of partnership.

7. Certification of a corporation in case of both public and private limited companies.

8. Memorandum/articles of associations, resolution of the board of directors authorizing

opening of the accounts for limited companies and corporation.

40
3.5 Classification of Customer:
It includes the following things:

 Individual (Personal)

 Proprietorship (Sole trades)

 Partnership firm (Registered or unregistered)

 Joint stock companies (Private limited companies/public ltd.)

 Public sector corporations

 Municipalities/ Municipal/corporation/ local bodies etc.

 Clubs/ Societies/ Associations/ School/College/Universities etc.

 Executors/ Administration

 Trustees

 Illiterate persons
 Constituted attorney
 Wage earners.

3.6 Issue of Cheuque Book:

According to section 60f negotiable instrument act, 1881, a cheque is “A bill of exchange
drawn on a specific banker and not expressed to be payable otherwise than on demand.” To
facilitate withdrawals and payments to third parties by the customer, UBL provides a cheque
book to the customer cheque book contains 10 leaves for savings account while for current
account is 25 or 50 or even 100 leaves. A cheque book issuing register is maintained in this
regard. This register contains the cheque book number, leaf number, issuing date. After giving
this entries to this register, information are send to the computer department for taking
necessary steps to pass the cheques during withdrawal. The cheque book also contains
requisition slip-which is used by the customer to obtain new cheque book. When all the leaves
are used, the customer submits this slip to the bank. A senior official then issues a new cheque
book and subsequent entries are given in the register and in computer.

If the cheque book is lost, the customer has to furnish a guarantee indemnifying by an
application to the bank. After fulfilling this, a new cheque book is issued. Seldom customers
are allowed to use loose cheque if the customer wants to draw money without presenting
previously issued cheque. A separate register is maintained in this regard. But this highly
discouraged in UBL. In a few days ago when the account holder will busy than he send a
representative, the banker issued cheque and provide an acknowledgement with the cheque

41
book. When the acknowledgement are return by the account holder by the signature than he
can draw the cheque. But now the rules and regulation by the government is so heard, so the
account holders have to come for issuing a new cheque book. A fresh cheque can be issue by
following ways.

Issuance of fresh cheque book

Requisition
Banker issuance new
slip filling up Banker verifies the slip cheque book if every
properly along
think in the right form
with the
cheque book
Enter the new cheque book number in the
register book against the specific
customer’s name.

Figure: Issuance of fresh cheque book

3.7 Closing of Account

The following circumstances are usually considered in case of closing an account or justifying
the stoppage of the operation of an account:

Notices given by the customer himself or if the customer is deMadamous to close the account.
1. Death of the customer.
2. Customer’s insanity and insolvency.

`3.8 Local Remittance Department

UBL has its branches spread throughout the country and therefore, it serves as best mediums
for remittance of funds from one place to another. This serves is available to both customers of
the bank. The department, which provides the facility, is known as local remittance department.

Function of the local remittance department

The following are the main function performed by the credit department:
Issuing & payment of demand draft.

All related correspondence with other branch & banks

# Compliance of audit & inspection

42
# Balance of D.D. payable & D.D. paid with advice
# Attached to sanchaya patra and wage Earners development bonds.
# Payment of incoming TT.
# Issuing, encashment of pay order and maintenance of record and proof sheet.
# Issuing and encashment of all kind of sanchaya patres and wage earners development bond.

All related statement & correspondences with Bangladesh Bank & other bank.

# Issuance of local drafts

# Issuing and encashment of BCD
# All related correspondences
# Issuing of outgoing TT
# Issuance of local drafts
# Issuance of TT. ICA. IBCA & IBDA

Transaction Types
1) Collection of Cheque

Up to tk. 25000 @ .15%, minimum Tk. 10.

Above tk. 25000-100000, @ .15%, minimum Tk. 50.

Above 100000- 500000 @ .10%, minimum Tk. 150.

Above 500000 @. 50% minimum tk. 600- maximum Tk. 1200.

2) Demand Draft (D.D)

Local draft is an instrument containing an order of the issuing branch upon another branch
known as drawee branch, for payment of a certain sum of money to the payee or to his order
on demand by the beneficiary presenting the draft itself.

Flow chart of DD payment

Receives Money DD Presented

Figure: 3

Issuing Branch Paying Branch

43
3.9 Cash Department
Cash department of different instruments is made in the cash section. Procedure of cash
payment against cheque is discussed under elaborately. Cash payment of cheque includes few
steps:

First of all the clients comes to the counter with the cheek and give it to the officer in charge
there. The officer checks whether there are two signatures on the back of the cheque and checks
his balance in the computer. After that the officer will give it to the cash in charge. Than the
cash in charge verifies the signature from the signature card and permits the officer in computer
to debit the client’s account by giving posting. A posted seal with teller number is giving. Than
the cheque is giving to the teller person and he after checking everything asks the drawer to
give another signature on the back of the claque. If the signature matches with the one giving
previously then the teller will make payment keeping the paying cheque with him while writing
the denomination on the back of the cheque. Cash paid seal is given on the claque and make
entry in the payment register.

There are few things that shell be scrutinized and checked before making payments.

# Name or the drawer

# Account number
# Specimen signature
# The validity of the cheque and make it sure that is it not postdated or undated.
# The amount in words and figures are same.
# Cash balance calculation.

The calculation is done by the officer in charge of cash section and then manager or authorized
officer will check the balance and sign in the cash balance of the previous day. Total receiving
of the current day is added with the opening balance and total payment is deducted for
calculating the closing balance or each balance.

3.10 Clearing Department

According to the article 37(2) of Bangladesh bank order, 1972, the banks, which are the number
of the clearing house, are called as scheduled bank. The scheduled bank clear the chose draw
upon one another through the clearing house. This is an arrangement by the central bank where
every day representative of the member bank gather in the clear the chouse. Bank for credit of
the procedure to the customer account accept chequs and other similar instruments. The bank
receives such instrument during the day from account holder. Many of these instruments are
draw payable at other bank. If these were to be present at drawer bank to collect the procedure,
it would be necessary to employee many massages for the purpose. Similarly, there would be
many chose draw on this the messengers of other bank would present bank and them at the
counter. The whole process of collection and payment would involve considerable labor, risk
and expenditure. All the labor, delay, risk and expenditure are substantially reduce, by
representation of all the Banks meeting at a specific time, for exchanging the instruments and
arriving at the net position regarding receipt or payment. The place where the bank meet and
settle there is called the clearing house.

44
Function of the department

The following are the main function performed by the department:

1. Pass out ware instruments to the clearing house.

2. Pass inward instruments to representative department.

3. Return instruments in case of dishonor.

4. Prepare IBCA or IBDA for the representative branch and HO.

5. Accounting entries of clearing department.

3.11 Collection Department:

Cheque, drafts etc. are drawn on bank located outside clearing house are sent for collection.
Principal branch collects its client above mentioned instruments from other branch of UBL,
and branches of other than UBL. In case of out ward bills of collection customers’ accounts is
credited after finishing the collection processor and in ward bills customers account is debited
for this purpose.

45
3.12 Organ gram of UBL Mugdapara Branch:

Manager
Moniruzzaman

2nd Officer
Md. Mofiz Uddin

General Banking Lone & Advance Foreing Exching

Cash Department
Department Depertment Depertment

Chif Sir
Md. Sobhan Md. Atik (R M Sir) Mr. Rofik

Surmey Sayed Md. Sadad

S Salina Mrs. Bonani

Uttara Bank limited has 223 (Two hundred twenty three) branches, Most of the branches have
four departments namely:-

 General Banking
 Credit Department
 Foreign Trade
 Accounts Department

General Banking consists of the mane sections in the branch. These are:

 Customer Service
 Accounting Opening/Closing
 Payment order Issue
 Demand Draft Issue/Collection
 Cash department.
 Clearing department

46
  Deposit Department
 Account Transfer
 T.T Issue/Collection
 IBC/OBC Collection etc.

3.12.1 Management of the Branch:

Staff of the Branch consists of 20 members:

SL. Designation Number of Employees

01 Manager(AGM) 01

02 Deputy Manager ( Principal Officer ) 01

03 Senior Principal officer 02

04 Principal officer 02

05 Senior officer 02

06 Officer 05
07 Assistant Officer 01

08 Cash Sorter 01

09 Armed Guard 04

10 Store keeper 01

Total 20

47
CHAPTER-04
CREDIT AND ADVANCE

48
4.1 Loan and Advance:

Categories of loans offered by the Bank UBL:

 Agriculture
 Large and medium scale industries
 Export other commercial lending ( jute and fertilizer)
 Small and cottage industries
 Personal loan
 Others

Some other loans are:

a) Housing loans b) Residential c) Commercials d) Transport e) Cold storage f) Brick field g)

Gold loans h) Against work order i) Against work (FDR) loan against sanchaypatar j) Loan
against WEBD, ICB, unit certificate k) Loans against life Insurance policy l) Other special
program.

4.1.1 Sector Wise Position of Loans and Advance as on 31.12.2014

(Taka in million)
Sector of loans and advance Public/ Nationalized Private Total

1. Agriculture :
a) crops - 1,154.5 1,154.5
b) fisheries - 207 207
c) others - 379 379
2. industrial leading (Term) :
a) large & medium - 774.6 774.6
b) small & cottage - 1,060.1 1,060.1
3. industrial leading (working capital):
a) large & medium
b) small & cottage - 1,202.7 1,202.1
- 1,925.8 1,925.8
4. commercial lending:
a) export - 2,813.8 2,813.8
b) import - 8,387.7 8,387.7
c) internal trade 10.5 40,891.9 40,902.4
5. special programmed:
a) consumer credit scheme (Uttaran) - 135.5 135.5
b) personal loan scheme - 3.0 3.0
c) small business loan scheme - 139.9 139.9
d)Uttaran house repairing and
renovation scheme - 3,542.2 3,542.2

49
6. housing:
a) general housing building loan - 259.8 259.8
b) staff housing building loan - 2,427 2,427
7. leasing financing - 391.8 391.8

8. others - 5,606.2 5,606.2

9. bills disconnected and purchased:

a) in Bangladesh - 2,769.3 2,769.3
b) outside of Bangladesh - 116.6 116.6

Total : loan & advance 10.5 74,188.4 74,198.9

Figure: Loans & Advances

50
4.1.2 Loans and Advances:

The loans and advances of the bank grew impressively during the year a 2014 with a growth
of 14.45% total loans and advances of Bank stood at Tk. 74,198.9 million during the year as
compared to Tk. 64,829.8 million of the previous year. Average loan per branch stood at Tk.
332.7 million. Separation of responsibility among risk management, leading decision and
monitoring function is now being implemented more smoothly by the bank with a view to
improving the quality and soundness of loan portfolio. The bank has rendered diversified and
well-structured advance portfolio due to emphasis on maintaining the quality of assets. Bank
has participated in the syndicate business financing in the year 2014. Major sectors where the
bank has extended the business are mainly imports and exports, commercial enterprises, steel
Re-rolling Mills, readymade garments. Textiles, edible oil and cement factory etc. on the other
hand Bank continues to extended commercial loan to the enthusiastic youths and small
entrepreneur for various sector through the different branch on priority basis during the year.
For this purpose bank is disbursing loan in dairy and poultry to obliterate the poverty and to
create employment opportunities for the destitute. The bank disbursed loan of Tk. 391.8 million

In this sector in the year 2014. To cater the urgent financing need of the service holder having
limited income an amount of Tk. 127 million was disbursed up to 31 December 2014 under
personal loan scheme. Beside the bank distribute loan to the tune of Tk. 829.5 million, Tk.
1701.5 million and Tk. 3486.4 million up to December 2009 under these special projects named
“Uttaran consumer loan scheme” , “Uttaran small business loan scheme” and “Uttaran house
repairing and renovation scheme” respectively.

51
4.1.3 Product and Services of Uttara Bank Ltd

Product and Services

Deposit Scheme Foreign Exchange International Business Loans and

Products Advances
Bank Special Non Resident Foreign Personal Loan
Savings Scheme Currency Deposit Letter of Credit scheme
(SSS) Account (NFCD)
Fixed Term Back to Back Letter of Festival Small
Deposit (FDR) Resident Foreign Business Loan
Credit (BTB L/C)
Currency Deposit Buying and Selling of
Short Term Account (RFCD) Special House
Foreign Exchange
Deposit (STD) Building loan
Foreign Currency
Savings Bank Foreign Demand
Deposit Account Long Term and
Account (SB A/c) Draft
Short term
Money Gram financing
Current Deposit
House Building
Account (CD A/C)
UAE Exchange loan
Current Deposits
(CD)
Placid Express

Figure: Product and Services

4.1.4 Personal Loan:

Personal loan scheme for salaried officers

UBL started personal loan scheme for salaried officials of reputed organizations from 1999 to
meet:-
 Emergency expenses for own marriage of a service-holder or his dependents.
 Emergency expenses of urgent surgical operation/ medical treatment.
 Emergency educational expenses of the children for admission/ purchase of books,
examination fees etc.

52
Special Features

 Any permanent salaried employee aged between 20 to 55 years is eligible to get loan.
 No collateral security is required.
 Maximum amount of loan tk. 1, 00,000.
 Maximum period of loan up to 3 years.

Required Document

 Document related to applicants job to prove himself

 Two copies passport size photographs.
 Photograph of nominee (if any) dully attested by the account holder.

4.1.5 Uttaran Consumer-Credit Scheme:

UBL started Uttaran consumer’s credit scheme from 1996. UBL offers opportunity of financial
assistance for-

 Motor cycle/ car- new or re- conditioned

 Refrigerator/deep freeze.

 Television/VCR/VCP/VCD

 Radio/ two in one.

 Air condition/waters cooler/ water pump.

 Washing machine.

 House hold furniture.

 Cellular telephone.

 Fax.

 Photocopier.

 Electric fan.

 Bi- cycle.

 Dish antenna
.
 Baby taxi, tempo/ micro bus ( for self-employed person)

 Kitchen articles such as oven, micro oven, toaster etc.

53
Special Feature

1. No collateral security is required.

2. Simple rate interest.
3. Quick sanction.
4. Maximum loan amount TK. 300000.
5. 5% incentive on total interest charge.

Required document

 Document related to applicants jobs to prove himself.

 Two copies passport size photocopies.
 Photograph of nominee (if any) duly attested by the account holder.

4.2 Double Benefit Deposit Scheme:

 Any adult Bangladeshi national will be eligible to open this account.

 Minimum tk. 100000 and multiples thereof will be accepted as deposited under this
scheme.

 The period shall be of 6 years term.

 Deposit may be encased before its maturity and no interest will paid if encased 1 year
of deposit.

 Interest will be paid at savings rate if encased after 1 year.

 Advance will be allowed up to 80% of deposit after completion of one year.

 Full amount including, interest will paid on maturity.

 Govt. Tax, surcharge, source- tax, levy, and govt. excise duty will be recovered from
the depositors account.

 Account holder can appoint a nominee against the account.

 Bank reserves the right to close the account at any time and make amendment/ alteration
of the terms & conditions of the scheme without assigning any reason.

54
 CHAPTER-05
FOREIGN TRADE & REMITTANCE

55
5.0 Foreign Exchange
Every country has certain natural advantages and disadvantages in producing certain
commodities while they have some natural disadvantages as well in other areas. As a result we
find that some countries need to import certain commodities while others need to export their
surpluses. Foreign trade brings the fruits of the earth to the homes of the humblest among the
countries. These transactions are the basis upon which international trade is made. As more
than one currency is involved in foreign trade, it gives rise to exchange of currencies which is
known as Foreign Exchange.

As per Foreign Exchange Act., foreign exchange means and includes all deposits, credits and
balances payable in foreign currency as well as foreign currency instruments such as drafts,
TCs, Bill of Exchange, Promissory Notes and Letters of Credit payable in any foreign currency.
This definition implies that all business activities relating to Import, Export, Outward & Inward
Remittances, buying & selling of foreign commissions, etc. come under the purview of foreign
exchange business.
Foreign exchange can simply be defined as a process of conversion of one national currency
into another and of transferring money from one country into another.

Foreign
Exchange
Operation

Foreign
Import Export
Remittance

5.1 Foreign Trade

Foreign trade can be easily defined as a business activity, which crosses national boundaries.
These may be between parties or government ones. Trade among nations is a common
occurrence and normally benefits both the exporter and importer. In many countries,
international trade accounts for more than 25% of their national incomes.
Foreign trade can usually be justified on the principle of comparative advantage. According to
this economic principle, it is economically profitable for the country to specialize in the
production of that commodity in which the producer country has the grater comparative

56
advantage and to allow the other country to produce that commodity in which it has the lesser
comparative advantage. It includes the spectrum of goods, services, investment, technology
transfer etc. This trade among various countries calls for loses linkage between the parties
dealing in trade it has been dealing with more than 40 Countries. The Banks, which provide
such transactions, are referred to as rendering international banking operations. International
trade demands a flow of goods from seller to buyer and of payment from buyer to seller. And
this flow of goods and payment are done through Letter of Credit. UBL follows the rules of
Bangladesh government and Bangladesh bank strictly.

5.2 Import and Export:

To look after the business and also to ensure prompt service to the import 7 export, officers
having exposure and expertise in foreign exchange business have been posted both at Head
office & authorized dealers branches. During the year performance of import business of the
bank was satisfactory. In 2014 import business stood at Tk. 45,870.9 million as compared to
the volume of Tk. 40,336.8 million of 2013. Export business handle by the bank during the
year 2014 amounted to Tk. 13,447.3 million as against Tk. 14,306 million of the preceding
year.

Export & Import ( Amount in Million)

50000
45870.9
45000
40336.8
40000
35418.6
35000 33037.6

30000
25000
20000
15588.5 14306
14192.9 13447.3
15000
10000
5000
0
2011 2012 2013 2014
Export & Import

Figure: Export & Import

57
5.2.1 Import
To obtain Import Registration Certificate (IRC) the following certificates are required:

 Trade License
 Income tax clearance certificate
 National certificate
 Banks solvency certificate
 Asset certificate
 Registration partnership deed (if any)
 Memorandum and article of association
 Certificate of incorporation (if any)
 Rent of the business premises

5.2.2 Import Mechanism

To import, a person should be competent to be and importer’. According to Import and Export
(Control) Act, 1950, the officer of Chief Controller of Import and Export provides the
registration (IRC) to the importer. After obtaining this, the person has to secure a letter of credit
authorization (LCA) from Bangladesh Bank. And then a person becomes a qualified importer.
He requests or instructs the opening bank to open an L/C.

Source of Finance
Import may be allowed under the following sources of finance:
(a) Cash-
i. Cash foreign exchange (balance of the foreign exchange reserve of
Bangladesh Bank);
ii. Foreign currency accounts maintained by Bangladeshi Nationals
working/living abroad.
(b) External economic aid.
Commodity exchange.

Import Procedures
An importer is required to have the following to import through UBL---
i. Applicant has to apply for opening L/C by a prescribed form.
ii. Applicant has to submit the Letter of Intent or Letter of Pro-forma Invoice.
Letter of Intent: Many sellers have their agent in seller’s country. If the
contract of buying is made between the buyers and the agent of the sellers then
Letter of Intent is required.

58
 Letter of Pro-forma Invoice: If the contract is made directly between the
buyers and the sellers then Letter of Pro-forma Invoice is needed.
iii. Applicant has to submit IRC (Indenters Registration Certificate). It is a
certificate being renewed every year. This certificate is necessary if the contract
is made between the buyers and the agents of the sellers. IRC is of two types –
COM and IND. COM is given for commerce purpose and IND is given for
industrial purpose.
iv. Applicant has to submit LCAF (Letter of Credit Authorization Form).
v. Applicant has to submit insurance document.
vi. Applicant has to prepare FORM-IMP.
vii. Recently, there has been made a provision to give a certificate named TIN (Tax
Payers Identification Number). Taxation department issues this certificate.
viii. Then after proper scrutiny bank will open an L/C.
While opening L/C, importer must keep certain percentage of the document value in the Bank
as margin.

5.2.3 Export

In order to Creation of wealth in any country depends on the expansion of production and
increasing participation in international trade. By increasing production in the export sector we
can improve the employment level of such a highly populated country like Bangladesh.
Bangladesh exports a large quantity of goods and services to foreign households. Readymade
textile garments (both knitted and woven), Jute, Jute-made products, frozen shrimps, tea are
the main goods that Bangladeshi exporters export to foreign countries. Garments sector is the
largest sector that exports the lion share of the country's export. Bangladesh exports most of its
readymade garments products to U.S.A and European Community (EC) countries. Bangladesh
exports about 40% of its readymade garments products to U.S.A. Most of the exporters who
export through MBL are readymade garments exporters. They open export L/Cs here to export
their goods, which they open against the import L/Cs opened by their foreign importers

59
5.2.4 Export Policy

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

The export-oriented private sector, through their representative bodies and chambers are
consulted in the formulation of export policies and are also represented in the various export
promotion bodies set up by the government.

5.2.5 Export Incentives

A. Financial Incentives:

Restructuring of Export Credit Guarantee Scheme;

Convertibility of Taka in current account;
Exporters can deposit 40% of FOB value of their export earnings in own accounts in
dollar and pound sterling;
Export Development Fund;
Expansion of export credit period from 180 days to 270 days;
50% tax rebate on export earnings Duty draw back;
Bonded warehouse facilities to 100% export oriented firms;
Duty free import of capital equipment for 100% export oriented firms;

B. General Incentives:

National Export Trophy to successful exporters

Training course on external trade
Arrangement of international trade fairs, commodity-based exhibitions in the country
and participation in foreign trade fairs

C. Other Incentives:

Assistance in improvement of quality and packaging of exportable items

Simplification of exports procedures

60
Export Procedures
The import and export trade in our country are regulated by the Import and Export (Control)
Act, 1950.

Under the export policy of Bangladesh the exporter has to get valid Export registration
Certificate (ERC) from Chief Controller of Import & Export (CCI&E). The ERC is required to
renew every year. The ERC number is to incorporate on EXP forms and other papers connected
with exports.

Export L/C
There are a number of formalities, which an exporter has to fulfill before and after shipment of
goods. These formalities or procedures are enumerated as follows –

1. Obtaining Export Registration Certificate (ERC)

No exporter is allowed to export any commodity permissible for export from Bangladesh unless
he is registered with Chief Controller of Imports and Exports (CCI & E) and holds valid Export
Registration Certificate (ERC). After applying to the CCI&E in the prescribed from along with
the necessary papers, concerned offices of the Chief Controller of Imports and Exports issues
ERC. Once registered, exporters are to make renewal of ERC every year.

2. Securing the order

After getting ERC, the exporter may proceed to secure the export order. He can do this by
contracting the buyers directly through correspondence.

3. Obtaining EXP
After having the registration, the exporter applies to JBL with the trade license, ERC and
the Certificate from the concerned Government Organization gets EXP. If the bank is
satisfied, an EXP is issued to the exporter.

4. Signing of the contract

After communicating with buyer the exporter has to get contracted for exporting exportable
items from Bangladesh detailing commodity, quantity, price, shipment, insurance and
mark, inspection, arbitration etc.

5. Receiving the Letter of Credit

After getting contract for sale, exporter should ask the buyer for Letter of Credit clearly
stating terms and conditions of export and payment.

61
 After receiving L/C, the following points are to be looked for:
a. The terms of the L/C are in conformity with those of the contract.
b. The L/C is an irrevocable one, preferably confirmed by the advising bank.
c. The L/C allows sufficient time for shipment and a reasonable time for registration.
d. If the exporter wants the L/C to be transferable, divisible and advisable, he should
ensure those stipulations are specially mentioned in the L/C.

6. Procuring the materials

After making the deal and on having the L/C opened in his favor, the next step for the
exporter is to set about the task of procuring or manufacturing the contracted merchandise.

7. Endorsement on EXP
Before the exporters with the customs/postal authorities lodge the export forms, they should
get all the copies endorsed by JBL. Before shipment, exporter submits exp. form with
commercial invoice. Then JBL officer checks it properly, if satisfied, certifies the exp.
without it, exporter he cannot make shipment. The customer must declare all exports goods
on the EXP issued by the authorized dealers

8. Disposal of Export Forms

a. Original: customs authority reports first copy of EXP to Bangladesh Bank after
shipment of the goods.
b. Duplicate: Negotiating bank reports the Duplicate to Bangladesh Bank in or after
negotiation date but not later than 14 days from the date of shipment.
c. Triplicate: on realization of export proceeds the same bank to the same authority
reports Triplicate.
d. Quadruplicate: Finally, the negotiating bank as their office copy retains
Quadruplicate

9. Shipment of goods
Exporter makes shipment according to the terms and condition of L/C.

62
10. Presentation of export documents for negotiation
After shipment, exporter submits the following documents to JBL for negotiation.
a. Bill of Exchange or Draft;
b. Bill of Lading
c. Invoice
d. Insurance Policy/Certificate
e. Certificate of origin
f. Inspection Certificate
g. Consular Invoice
h. Packing List
i. Quality Control Certificate
j. G.S.P. certificate
k. Photo – Sanitary Certificate.

5.2.6 Mode of payment of export bill under L/C

As per UCP 600, 1993 revision there are four types of credit. These are as follows:
a. Sight payment
b. Deferred payment
c. By acceptance
d. Negotiation

a. Sight Payment Credit

In a Sight Payment Credit, the Bank pays the stipulated sum immediately against the exporter’s
presentation of the documents.

b. Deferred payment Credit

In deferred payment, the Bank agrees to pay on a specified future date or event, after
presentation of the export documents. No bill of exchange is involved. In UBL, payment is
given to the party at the rate of D.A 60-90-120-180 as the case may be. But the Head office is
paid at T.T clean rate. The difference between the two rates us the exchange trading for the
Branch.

63
c. Acceptance credit
In acceptance credit, the exporter presents a bill of exchange payable to him and drawn at the
agreed tenor (that is, on a specified future date or event) on the bank that is to accept it. The
Bank signs its acceptance on the bill and returns it to the exporter. The exporter can then
represent it for payment on maturity. Alternatively he can discount it in order to obtain
immediate payment.

d. Negotiation Credit:
In Negotiation credit, the exporter has to present a bill of exchange payable to him in addition
to other documents that the bank negotiates.

Securitization of master L/C

a. Defective Points or Clauses appears in the Master L/C:

b. Issuing bank is not reputed
c. Advising credit by the advising bank without authentication.
d. Port of destination absent.
e. Inspection clause.
f. Nomination of specific shipping/Airline or nomination of specified vessel by
subsequent amendment.
g. B/L to blank endorses, to endorse to 3rd Bank, to be endorsed to buyer or 3rd party.
h. No specific reimbursing clause.
i. UCP clause not mentioned.
j. Shipment /presentation period is not sufficient.
k. Original documents to be sent to buyer or nominated agent.
l. FCR or HAWB consigned to applicant or buyer.
m. “Shippers’ load and count is not acceptable “clause.
n. L/C shall expire in the country of the issuing Bank.
o. Negotiation is restricted.

64
5.2.7 Export Financing

Financing exports constitutes an important part of a bank’s activities. Exporters require

financial services at four different stages of their export operation. During each of these
phases’ exporters need different types of financial assistance depending on the nature of the
export contract. UBL plays a vital role in performing such jobs and help the businessmen’s
to carry on their business operation the activities are –

Pre-shipment credit
Post-shipment credit
Pre-shipment credit:

Pre-shipment credit, as the name suggests, is given to finance the activities of an exporter
prior to the actual shipment of the goods for export. The purpose of such credit is to meet
working capital needs starting from the point of purchasing of raw materials to final shipment
of goods for export to foreign country. Before allowing such credit to the exporters the Bank
takes into consideration about the credit worthiness, export performance of the exporters,
together with all other necessary information required for sanctioning the credit in accordance
with the existing rules and regulations. Pre-shipment credit is given for the following
purposes:

Cash for local procurement and meeting related expenses.

Procuring and processing of goods for export.
Packing and transporting of goods for export.
Payment of insurance premium.
Inspection fees.
Freight charges etc.

An exporter can obtain credit facilities against lien on the irrevocable, confirmed and
unrestricted export letter of credit in form of the followings:

i. Export cash credit (Hypothecation)

ii. Export cash credit (Pledge)
iii. Export cash credit against trust receipt.

65
 iv. Packing credit.
v. Back to back letter of credit.
vi. Credit against Red-clause letter of credit.

1. Export cash credit (Hypothecation)

Under this arrangement, a credit is sanctioned against hypothecation of the raw materials or
finished goods intended for export. Such facility is allowed to the first class exporters. As the
bank has got no security in this case, except charge documents and lien on exports L/C or
contract, Bank normally insists on the exporter in furnishing collateral security. The letter of
hypothecation creates a charge against merchandise in favor of the bank. But neither r the
ownership nor the possession is passed to it.

2. Export cash Credit (Pledge)

Such Credit facility is allowed against pledge of exportable goods or raw materials. In this case
cash credit facilities are extended against pledge of goods to be stored in the go down under
Bank’s control by signing letter of pledge and other pledge documents. The exporter surrenders
the physical possession of the goods under banks effective control as security for payment of
Bank dues. In the event of failure of the exporter to honor his commitment, the bank can sell
the pledged merchandise for recovery the advance.

3. Export Cash Credit against Trust Receipt

In this case, credit limit is sanctioned against trust receipt (TR). Here also unlike pledge, the
Exportable goods remain in the custody of the exporter. He is required to execute a stamped
export trust receipt in favor of the Bank, he holds wherein a declaration is made that goods
purchased with financial assistance of bank in trust for the Bank. This type of credit is granted
when the exporter wants to utilize the credit for processing, packing and rendering the goods
in exportable condition and when it seems that exportable goods cannot be taken into Bank’s
custody. This facility is allowed only to the first class party and collateral security is generally
obtained in this case.

66
4. Packing Credit
Packing Credit is essentially a short-term advance granted by a Bank to an exporter for assisting
him to buy, process, manufacture, pack and ship the goods. Generally for movement of goods
from the hinterland areas to the ports of shipment the Banks provide interim facilities by way
of Packing Credit. This type of credit is sanctioned for the transitional period starting from
dispatch of goods till the negotiation of the export documents. Practically except for single
transaction, most of the pre-shipment credits are allowed in the form of limits duly sanctioned
by Bank in favor of regular exporters for a particular period. The drawings are required to be
adjusted fully once within a period of 3 to 6 months. Suiting to the breed and nature of export,
sometimes an exporter may also be allowed to avail a combined Cash Credit and Packing Credit
limit with fixed ceiling on revolving basis. But in no case the borrower would be allowed to
exceed individual credit limit fixed for the purpose. The drawings under Export Cash Credit
limits are generally adjusted by the drawing in packing credit limit, which is, in turn liquidated
by the negotiation of export documents.

5.2.8 Foreign Documentary Bill Purchase (FDBP)

Sometimes the client submits the bill of export to Bank for collection and payment of the
BTB L/C. In that case, Bank purchases the bill and collects the money from the exporter.
MBL subtracts the amount of bill from BTB and gives the rest amount to the client in cash or
by crediting his account or by the pay order.
For this purpose, UBL maintains a separate register named FDBP Register. This register
contains the following information:
# Date
# Reference number (FDBP)
# Name of the drawee
# Name of the collecting Bank
# Conversion rate
# Bill amount both in figure & in Taka.
# Export form number
# Export L/C number

5.2.9 Export Documents Checking

1. A. General verification
a) L/C restricted or not.
b) Exporter submitted documents before expiry date of the credit.

67
 c) Shortage of documents etc.

B. Particular verification
Each and every document should be verified with the L/C.

C. Cross verification
i) Verified one documents to another.
ii) After proper examination or checking of a described
Export document banker may find following discrepancies:

2. General:

Late shipment
Late presentation
L/C expired
L/C over-drawn
Partial shipment or transshipment beyond L/C terms.

3. BILL OF EXCHANGE (B/E)

1. Amount of B/E differ with Invoice.
2. Not drawn on L/C issuing Bank.
3. Not signed
4. Tenor of B/E not identical with L/C.
5. Full set not submitted.

4. COMMERCIAL INVOICE(C/I)
1. Not issued by the Beneficiary.
2. Not signed by the Beneficiary.
3. Not made out in the name of the Applicant
4. Description, Price, quantity, sales terms of the goods not corresponds to the Credit.
5. Not marked one fold as Original.
6. Shipping Mark differs with B/L & Packing List.

68
5. PACKING LIST

1. Gross Wt., Net Wt. & Measurement, Number of Cartoons/Packages differs with B/L.
2. Not market one fold as Original.
3. Not signed by the Beneficiary.
4. Shipping marks differ with B/L.

6. Bill of Lading/Airway Bill etc. (Transport documents)

1. Full set of B/L not submitted.

2. B/L is not drawn or endorsed to the Order of UBL.
3. “Shipped on Board”, “Freight Prepaid” or “Freight Collect” etc. notations are not
marked on the B/L.
4. B/L not indicate the name and the capacity of the party i.e. carrier or master, on whose
behalf the agent is signing the B/L.
5. Shipped on Board Notation not showing name of Pre-carriage vessel/intended vessel.
6. Shipped on Board Notation not showing port of loading and vessel name (In case B/L
indicates a place of receipt or taking in charge different from the port of loading).
7. Short Form B/L
8. Charter party B/L
9. Description of goods in B/L not agree with that of Invoice, B/E & P/L
10. Alterations in B/L not authenticated.
11. Loaded on Deck.
12. B/L bearing clauses or notations expressly declaring defective condition of the goods
and/or the packages.

7. OTHERS

N.N. Documents not forwarded to buyers or forwarded beyond L/C terms.

Inadequate number of Invoice, Packing List, and B/L & Others submitted.
Short shipment Certificate not submitted.
While checking the export documents following things must be taken in consideration

69
5.2.10 Invoice

It is to be scrutinized to ensure the following:

1. The Invoice is addressed to the Importer
2. The full description of merchandise must be given in the invoice strictly as per L/C.
3. The price, quality, quantity, etc. must be as per L/C.
4. The Invoice must be language in the language of L/C.
5. No other charges are permissible in the Invoice beyond the stipulation on the L/C.
6. The amount of draft and Invoice must be same and within the L/C value.
7. If L/C calls for consular invoice, then the beneficiary’s invoice is not sufficient.
8. Number of Invoice will be submitted as per L/C.
9. The shipping mark and number of packing list shown in the B/L must be identical with
those given in the Invoice and other documents.
10. The Invoice value must not be less than the value declared in EXP Forms.
11. Invoice amount must be correct on the basis of price, quantity as per L/C.
12. Invoice amount; indicate sale terms/ in co terms VIZ FOB, CFR, CIF etc.
13. Consular Invoice must be stamped by the local consulate/embassy of the country to which
the goods are imported.

5.3 Foreign Remittance:

Uttara Bank Ltd. Has seen a successful year in 2014 in terms of expansion of its remittance
business with its foreign co-respondent and exchange house. Bank has been continuing to
extend special important on foreign remittance from the begging of its establishment, which is
still prevailing during the year. This Bank has drawing arrangement with the Bank and
exchange companies situated at the important countries of the world. In the meantime the Bank
has been able to draw confidences of Bangladeshi expatriates by easy and quick delivery of
their hard earn foreign remittance to the payees at home. The volume of foreign remittance the
year 2014 stood at 52,030.2 million as compare the volume of taka 44,301.3 million preceding
year registering an increasing of 2.95%. In order to keep pace with the time a scheme namely
“express payment scheme” has been introduce for inward remittance using modern equipment.
Under this scheme a payee having his account with any Branch of Uttara Bank Ltd. gets the
procedures of remittance sent the any part of the world within 2 hours. In the event of his
account being maintained with other banks the proceeds are placed into payees account within
the next working day in the metropolitan cities and division HQ and within only 3 working
days at the places of the country by using DD/PO subject to availability of courier service.
Beside in order to ensure speedy and improve service the bank has also introduce.

70
“Instant cash scheme” for payment of foreign remittance in cash to the customers who have no
account in the bank on submission of passport/ driving licenses/ remittance card ( issued by the
Bank) / voter ID card/ credit card etc. as identity. Under the scheme the Bank will make
payment of procedures in cash if the Bangladeshi expatriates send their money furnishing the
passport/ card holder name and number of the passport / card holder for these payees need not
have any account in the Bank. Under prior arrangement, the remitting company remits their
draft printed at banks international division through the website and delivered the same to the
beneficiary’s home address for payment of money equivalent to foreign currency under a
scheme named “instant cash” .
At the same time the Bank handle foreign remittance business through 48 exchange House one
among them, named “Arabian exchange co. W.L.L.” of Doha at Qatar has been functioning
under Bank’s own management. On the other hand bank has tied with contract with America
based international money to home country from any corner of the world. Payee gets the
proceeds through our 223 Branches with our best efforts in short time.

Foreign Trade (Taka in Million)

60,000.00
52,030.20
50,000.00 45,870.90
43,585.60 44,301.30
40,336.80
40,000.00 37,848.70
35,418.60
33,037.60

30,000.00

20,000.00
15,588.50 14,306.00
14,192.90 13,447.30

10,000.00

0.00
2011 2012 2013 2014

Figure: Foreign Trade

Here FR means foreign exchange, EX means Export, IM means Import. From the graph it is
said that foreign is increased from the previous time which is very good news for the Bank.
Export is almost similar with the previous year. Import which bad for a country also it is
decrease from the previous year. It also a very good achieve for the Bank.
Uttara Bank Ltd. closed the year 2014 recording significant growth in every sector despite
various types of economic crises. Improvement in deposit, loans & advance, compliance on
corporate Governance, success in foreign trade business and effective risk management have
placed the Bank in a sound footing during the year under report. The bank made satisfactory
progress in all area of business operation in 2014.

71
5.3.1 Who Can Open FC Accounts in UBL?
Any Branch of UBL with Authorized Dealership License may, without prior approval of
Bangladesh Bank, open foreign currency A/Cs in their books in the name of:
a) Bangladeshi nationals residing abroad.
b) Foreign nationals residing abroad or in Bangladesh.
c) Foreign firms and companies registered abroad and operating in Bangladesh or abroad.
d) Foreign missions/ Embassies/ UN organizations and their expatriate employees.
e) Diplomatic bonded warehouses (duty free shops).
f) Local and Joint venture contracting firms employed to execute projects financed by
foreign donors/ international donor agencies.
g) Bangladeshi nationals working as employees/ consultants in international bodies in
Bangladesh and drawing pay and allowances/ consultancy fees/ honorarium in foreign
currency.
h) Merchandise and service exporters
i) Bangladeshi Nationals who are ordinarily resident in Bangladesh may open foreign
currency accounts with foreign exchange brought in at the time of their return to
Bangladesh from visits abroad.
j) Industrial enterprises in EPZ.

5.3.2 Currency in which FC A/Cs can be opened

FC Accounts can be opened either in
a) Pound Sterling
b) US dollar
c) Euro
d) Japanese Yen

5.3.3 Papers/ Documents required for opening FC A/C

a) For Bangladesh wage Earners

- Photocopy of 1st seven pages of valid passport and visa page

- Photocopy of employment contract/ appointment letter/ work permit.

- Two copies of passport size photograph of each account holder and nominee duly attested.

72
b) For foreign National/ company/ Firm

- Two copies of photograph of account holder for individual operations of other account holder.

- Copies of relevant pages of passport for individual and operators of other account holder.

- Copies of service contract/ work permit, if any for individual.

- Copies of registration in Bangladesh with Board of investment/ Bangladesh Bank for foreign/ joint
venture firm.

- Copies of the memorandum and articles of Association/ Laws/ Bye Laws, etc. on joint venture
Agreement for joint venture co.

c) Mode of Operation

 Foreign currency A/Cs opened in the name of Bangladeshi nationals working abroad or self-
employee abroad can now be maintained as long as the current holder desires.
 Such accounts may also be opened by the eligible persons with in six months of their return to
Bangladesh.

d) Deposits

 Credit to a foreign currency Account may be made against inward remittance of foreign
exchange in any form of transfer from another FC account on non-resident taka accounts of
Bankers abroad.
 Portion of repatriated export proceeds of Merchandize service export are allowed to credit to
the exporters retention quota account.
 Foreign exchange earned through business done or services rendered in Bangladesh can into be
put into FC accounts.

e) Withdrawals

 Payment may be made freely abroad from these FC accounts to the extent of balance lying there
in. Local disbursements may also be made freely in Take from such foreign currency accounts.
 Funds lying in FC accounts can be utilizing for import of goods and commodities as per
instructions issues by the CCI & E and Bangladesh Bank.

73
  No payment for foreign exchange may be made to or on behalf of any resident in Bangladesh
out of the FC account except foreign diplomats or privileged person who has specific authority
from Bangladesh Bank to accept such payment.

5.3.4 Foreign Remittance

There are two types of Foreign Remittance:
* Outward Remittance
* Inward Remittance

5.3.5 Parties to a letter of Credit

The parties are:
The Issuing Bank,
The Confirming Bank, if any, and
The Beneficiary.

Other parties that facilitate the Documentary Credit are:

The Applicant
The Advising Bank
The Nominated Paying/ Accepting Bank and
The Transferring Bank, if any

Issuing Bank
(Bangladesh)

Advising
Bank Reimbursing
(India) Bank
(Japan)

Negotiating
Bank
(India) Figure: Parties to a L/C

74
5.3.6 Regulation for Foreign Exchange Transaction

Many regulation have been devbeloped to do smooth functioning and controlling the
international business. International Chamber of Commerce (ICC) has been playing a vital role
for effective and efficient function in international business. In our country, the Central Bank,
Bangladesh Bank published two foreign exchange guidelines (Foreign Exchange Guide line
Vol-I and Vol- II) Bangladesh bank and CCI and E controls the foreign Exchange business.
The central Bank issued many circulars regarding foreign exchange transactions and they are
the monitoring authority by issuing up-to-date instruction circulars for smooth functioning.
Ministry of commerce issued IMPO ( Import Policy Order and Export Policy Order) and
EXPO.
Foreign exchange transactions are regulated by the following Act/Guidelines/Circular etc:
 Foreign Exchange Regulation Act, 1947.
 Import and Export (Control) Act, 1950.
 Circular issued by the Central Bank.
 Import Policy Order and Export Policy Order and EXPO –published by the ministry of
Finance.
 Public Notices- issued by Chief controller of Import and Export.
 Guidelines / circulars of the Bank.

75
 CHAPTER-06
ONLINE BANKING & GREEN BANKING

76
6.0 Products & Services of Uttara Bank Limited
Products of Uttara Bank Ltd. can be divided into two parts. They are asset product and liability
product. Generally liability product means deposits of many kinds that are payable to parties.
On the other hand, asset products are the products which clients are liable to pay to Bank.
Different types of undertaking by the bank to the clients or on behalf of the clients are also a
type of liability to bank. On the other hand a different type of promises makes by the clients to
bank is considered as bank’s asset. The products and services can be classifying in two ways
& those are.

Deposits products & services Lending/Investment products & services

Corporate Banking Hi-her Purchase

Personal Banking Lease Finance

Online Banking Personal loan for woman
Monthly Savings Scheme Project Finance
Double/Triple Benefit Scheme Consumer Credit
Marriage Scheme Import and Export. Handling Financing
Education Scheme Loan Syndication
Lakhpati Deposit Scheme
Q-Cash ATM
Monthly Benefit Scheme

6.1. Deposit Products & Services

6.1.1. Corporate Banking
The motto of UBL's Corporate Banking services is to provide personalized solutions to
their customers. The Bank distinguishes and identifies corporate customers' need and designs
tailored solutions accordingly.
Uttara Bank Ltd. Driers a complete range of advisory, financing and operational combining
trade, treasury, investment and services to its corporate client groups coin transactional Banking
activities in one package. Whether it is project finance, term loan, import or export deal, a
working capital requirement or a forward cover for a foreign currency transition, there

77
Corporate Banking Managers will offer you the accurate solution, their corporate Banking
specialists will render high class service for speedy approvals and efficient processing to
satisfy customer needs.

Corporate Banking business envelops a broad range of businesses and industries.

Everyone can leverage on our know-how in the following sectors mainly:

 Agro processing industry

 Industry (Import Substitute / Export oriented)

 Textile Spinning, Dyeing / Printing

 Export Oriented Garments, Sweater.

 Food & Allied

 Paper & Paper Products

 Engineering, Steel Mills

 Chemical and chemical products etc.

 Telecommunications.

 Information Technology

 Real Estate & Construction

 Wholesale trade

 Transport • Hotels, Restaurants

 Non-Bank Financial Institutions

 Loan Syndication

 Protect Finance • Investment Banking

 Lease Finance • Hire Purchase • International Banking

 Export Finance.

 Import Finance

78
 6.1.2 Personal Banking
 Personal Banking of Uttara Bank offers wide-ranging products and services matching the
requirement of every customer. Transactional accounts, savings schemes or loan facilities from
Uttara Bank Ltd. make available you a unique mixture of easy and consummate service quality.

 UBL offers the following key Personal Banking Services

 -Current Deposit Account
 -Savings Deposit Account
 -Short Term Deposit Account
 -Fixed Deposit Account

Proprietorship Account
1. Introduction of account
2. Two photographs of the account holder which is attested by the introducer.
3. Valid copy of trade license
4. Rubber stamp
5. TIN number certificate (if any)
6. Copy of voter ID card or passport or commissioner’s certificate

Partnership Account
1. Introduction of account
2. Two photographs of the account holder which is attested by the introducer.
3. Partnership letter duly sign by all partners (sign should be similar as stated in the Deed)
4. Registration (if any)
5. Rubber stamp
6. Updated trade license

Limited company Account

1. Introduction of account.
2. Two photographs of the account holder which is attested by the introducer.
3. Valid copy of Trade license.
4. Board resolution of opening account duly certified by the chairman Managing
Director.
5. Certificate of Incorporation.

79
 6. Certified (Joint Stock) true copy of the Memorandum and Article of Association of the
company. Duly attested by the Chairman of Managing Director.
7. List of director along with designation and specimen signature.
8. Latest certified copy of form – X11 (to be certified by the registrar of Joint stock
companies) in case of directorship change.
9. Rubber Stamp
10. Certified copy of certificate of commencement of Business.
11. Latest audited balance sheet
12. Tin certificate
13. Certificate of Registration (in case of insurance companies)
Club/Societies Account

1. Introduction of the account

2. Two photographs of the account holder which is attested by the introducer.
3. Board resolution for opening account (Duly certified by President/Secretary)
4. List of existing Managing Committee.
5. Registration (if any)
6. Rubber stamp
7. Permission letter from Bureau of N.G.O (in case of N.G.O account)

6.1.3. Q-Cash Round The Clock Banking

Uttara Bank Q-Cash ATM Card enables the costumers to withdraw- cash variety of Banking
transactions 24 hours a day. Q-Cash ATMs are conveniently located covering major
shopping centers, business and residential areas in Dhaka and chittagong. ATMs in Sylhet,
Khulna and other cities will soon start be introduced. The network will expand to cover the
whole country within a short span of time.

With customers Uttara Bank Q-Cash ATM card they can

 Cash withdrawal Round The Clock from any Q -Cash logo marked ATM
booths.
 POS transaction (shopping malls, restaurants, Jewell Aries etc.)
 Enjoy overdraft facilities on the card (if approved)

80
  Utility Bill Payment facilities
 Cash transaction facilities for selective branches nationwide

 ATM service available in Dhaka and Chittagong. Withdrawal allowed from

ATM's of Uttara Bank Ltd., AB Bank, The City Bank, Janata Bank, IFIC
Bank, Mercantile Bank, Pubali Bank, Eastern Bank Ltd. respectively

6.1.4 Lending/Investment Products & Services

6.1.5 Hire Purchase

Hire purchase is a type of installment Credit wider which the Hire purchase agrees to take
goods on hire at a stated rate which is inclusive of the repayment of principle as well as
interest for adjustment of the loan within a specified period.

6.1.6 Lease Finance

Lease means a contractual relationship between the owner of the asset and it’s utter- fur a
specified period against mutually agreed upon rent. The owner is called the Lessor and
the user is called the Lessee.
Lease finance is one of the most convenient sources of financing of assets via
machinery, equipment vehicle, etc. The user of the assets i.e. Lessee is benefited through tax
advantages, conserving working capital and preserving debt capacity. Moreover, Lease
is an off-balance sheet item 1.e lease amount is not shown in the balance sheet of the lessee
and does not affect borrowing capacity.

Leasing enables the lessee to avail the services of a plant or equipment without
making the investment or incurring debt obligation. The Lessee car, use the asset by paying
a series of periodic amounts called "lease payment" or "lease rentals" to the owner of the
asset at the predetermined rates and generally in advance. The payments may be made
monthly or quarterly.
Uttara Bark Ltd., the highly capitalized private Commercial 1 Bank in Bangladesh has
introduced lease finance to facilitate funding requirement of valued customers & growth
of their business houses.

81
6.1.7 Personal loan for women

To make financially sound and solvent surd self-dependent the women.

Three categories of women are under this loan-

1. Self Employed Women

2. Working Women

3. House Wife

6.1.8 Consumer Credit

Consumer credit scheme is relatively new field of micro-credit activities. People with limited
income can avail of this credit facility to buy any household effects including car, computer
and other consumer durable. It is a special credit scheme and the customers allow the loan on
soft terms against personal guarantee and deposit of specified percentage of equity. The loan
is repayable by monthly installment within a fixed period.

6.1.9 Online Banking

IT based banking has a major role to play in rendering improved services to the valued customer
and stakeholder in today’s competitive banking environment. The Bank has taken various
measures for automation of its functions and services. For providing better & faster services &
cope up with fast growing customer base Bank acquired a core banking solution (CBS)
software in 2012 named Bank ULTIMUS and online banking facilities are available in all
Branches of the Bank.

82
6.2 Green Banking
Environment friendly banking is called Green Banking. Environmental concern is at the center
of the green banking strategy. Green Banking is like a normal bank which considers all the
social and environmental factors. It is also called as ethical bank, environmental responsible
Bank, social responsible bank or a sustainable bank and is expected to consider all the social
and environmental factors. The approach to green banking varies from bank to bank however
broad objectives of the banks are to use their resources with responsibility avoiding waste and
giving priority to environment and the society. Ethical banks sometimes working with narrower
profit margins than traditional ones. A Green Bank never invests in the environment threat
project. The environmentalist Bank is Green Bank.
Uttara Bank invested near about Tk. 22, 29, 34,600 up to the year 2014 which are given below:

(Amount in Taka)
Year Solar Bio-gas ETP Brick Vermi- Total
compost
2012 54,01,000 51,83,000 1,50,00,000 - - 2,55,84,000
2013 65,37,000 47,29,000 - - - 1,12,66,000
2014 69,54,600 61,50,000 1,00,00,000 16,25,00,000 4,80,000 18,60,84,600
Total 1,88,92,600 1,60,62,000 2,50,00,000 16,25,00,000 4,80,000 22,29,34,600

83
CHAPTER-07
ANALYSIS

84
7.1 Horizontal Analysis

Balance Sheet
Year 2013 2014
Total Assets 6.8% 6.4%
Total Liabilities 6.6% 5.7%
Total Share Holders Equity 9.1% 14.2%

Graphical Presentation:

Total A Total L Total S H E

14.20%
9.10%
6.80%

6.60%

6.40%

5.70%

2013 2014

Figure: Horizontal Balance Sheet

85
 Income Statement

Year 2013 2014

Net Interest Income (45%) 127.4%
Total Operating Income (4%) 14.1%
Total Operating Expenses (3.5%) 7.7%
Profit Before Tax 5.7% 86%
Profit After Tax 6% 6.4%
Profit Available for Appropriation 6.6% 8%

Graphical Presentation:

140%

120%

100%

80%

60%

40%

20%

0%
2013 2014
-20%

-40%

-60%

NII TOI TOE P B Tax P A Tax PAFA

Figure: Horizontal Income Statement

86
7.2 Vertical Analysis

Balance Sheet

Year 2013 2014

Total Assets 100% 100%
Total Liabilities 92% 91.3%
Total Share Holders Equity 8.1% 7%

Graphical Presentation:

TA T L TSHE
100%

100%

91.30%
92%

8.10%

7%

2013 2014

Figure: Vertical Balance Sheet

87
 Income Statement

Year 2013 2014

Net Interest Income 100% 100%
Total Operating Income 724% 363.3%
Total Operating Expenses 395.4% 187.3%
Profit Before Tax 281.1% 134.2%
Profit After Tax 138% 64.4%
Profit Available for Appropriation 140.1% 66.4%

Graphical Presentation:

800%

700%

600%

500%

400%

300%

200%

100%

0%
2013 2014

NII TOI TOE P B Tax P A Tax PA FA

Figure: Vertical Income Statement

88
7.4 Ratio Analysis
7.4.1 Current ratio
The current ratio, one of the most commonly cited financial ratios, measures the firm’s
ability to meet its short term obligations. The higher the current ratio, the better the liquidity
position of the firm. It is expressed as:

Current Ratio=Current Asset/Current Liabilities

Year 2010 2011 2012 2013 2014

Current 0.77 1.04 1.11 1.04 0.98
Ratio
Source: Annual Report of UBL

Graphical Presentation:

Current ratio

1.11
1.04 1.04
0.98

0.77

2010 2011 2012 2013 2014

Figure: Current Ratio

Interpretation:

That is the higher the current ratio; the more liquid the firm is considered to be. But UBL, Current
ratio is not good because it maintains 0.98tk current assets against 1tk current liabilities where as
normally banking industry maintains 1: 1 current ratio. This graph shows that, the current ratio is
decreasing year by year.

89
7.4.2 Working capital
Net working capital, although not actually a ratio is a common measure of a firm’s overall
Liquidity a measure of liquidity ratio calculated by
Working capital=Current Asset-Current Liabilities

Year 2010 2011 2012 2013 2014

Working -729.41 2085.43 3611.90 1540.70 -672.82
Capital

Source: Annual Report of UBL

Graphical Presentation:

3611.9

2085.43

1540.7

2010 2011 2012 2013 2014

-729.41 -672.82

Figure: Working Capital

Interpretation:

Net working capital of UBL gradually decreasing in Year by Year However, the bank cannot
able to meet up its current obligations. So the Bank should increase its Current asset.

90
7.4.3 Cost Income Ratio:
Cost Income Ratio=Total operating Expenses/Total Operating Income

Year 2010 2011 2012 2013 2014

Cost 49.86% 52.23% 53.36% 45.09% 45.42%

income
ratio
Source: Annual Report of UBL

Graphical Presentation:

Cost income ratio

54.00%
53.36%

52.00% 52.23%

50.00% 49.86%

48.00%

46.00%
45.42%
45.09%
44.00%

42.00%

40.00%
2010 2011 2012 2013 2014

Figure: Cost Income Ratio

Interpretation:

We know that this ratio measures the operating efficiency of the bank by measuring the portion
if the total operating costs relative to the total operating income of that bank and the higher the
ratio, the lower the operating efficiency. In 2012 the operating cost of UBL Bank Ltd. is high
but after that it decreasing. So it can be said that the operating efficiency of the UBL Bank Ltd.
is in good position that is they are able to minimize their operating cost.

91
7.4.4 Price Earning Ratio:

Price Earning Ratio = Market price per share of stock/Earning per share

Year 2010 2011 2012 2013 2014

Price 30.76 15.59 11.21 9.48 7.46
earning
ratio
Source: Annual Report of UBL

Graphical Presentation:

PRICE EARNING RATIO

30.76

15.59

11.21
9.48
7.46

2010 2011 2012 2013 2014

Figure: Price Earning Ratio

92
7.4.5 Total Asset Turnover Ratio:
The total asset turnover indicates the efficiency with which the firm is able to use all its assets
to generate sales.

Total Asset Turnover= Operating Income/Total Asset

Year 2010 2011 2012 2013 2014

Total Asset 0.056 0.059 0.059 0.068 0.064
Turnover
Source: Annual Report of UBL

Graphical Presentation:

TOTAL ASSET TURNOVER RATIO

0.068

0.064
0.059

0.059
0.056

2010 2011 2012 2013 2014

Figure: Total Asset Turnover Ratio

Interpretation:

The Bank total asset turnover ratio in 2010- 2013 that is 0.056- 0.068 which means 5.6 to 6.8
times. We know the greater the total asset turnover; it is more efficient and 4 to 6 times is
slandered position but also depends on industry. But UBL is total asset turnover ratio is
increasing day by day but in 2014 its decreasing which is not good sign.

93
7.4.6 Return on equity:

Return on equity=Net income/Shareholder’s equity

Year 2010 2011 2012 2013 2014

Return on 0.18 0.17 0.13 0.12 0.11
equity
Source: Annual Report of UBL

Graphical Presentation:

RETURN ON EQUITY

0.18
0.17

0.13
0.12
0.11

2010 2011 2012 2013 2014

Figure: Return on Equity

94
7.4.7 Debt Ratio:

The debt ratio measures the preparation of total assets provided by the firm’s creditors.

Debt ratio= Total Liabilities/Total Assets

Year 2010 2011 2012 2013 2014

Debi 0.95 0.95 0.95 0.94 0.91

ratio

Source: Annual Report of UBL

Graphical Presentation:

Debt ratio
0.96

0.95

0.94

0.93

0.92

0.91

0.9

0.89
2010 2011 2012 2013 2014

Figure: Debt Ratio

Interpretation:
This graph shows that, the debt ratio was decreasing year by year. The Debt ratio measures,
the proportion of total assets provides by the firm’s creditors. Their debt ratio were decreasing
trend that indicates positive sign.

95
7.4.8 Equity Multiplier:

Equity Multiplier= Total assets/Shareholder’s equity

Year 2010 2011 2012 2013 2014

Equity 9.46 10.11 12.64 12.40 11.56
Multiplier
Source: Annual Report of UBL

Graphical Presentation:

EQ UI T Y MULT I PLI E R

12.64 12.4
11.56
10.11
9.46

2010 2011 2012 2013 2014

Figure: Equity Multiplier

96
7.4.9 Time Interest Earned Ratio:

The times interest earned ratio, sometimes called the interest coverage ratio, measures the
firm’s ability to make contractual interest payments.
Time Interest Earned Ratio =Earnings before interest and Taxes/Interest
Year 2010 2011 2012 2013 2014
Time 1.11 1.49 1.61 1.95 1.78
Interest
Earned
Ratio
Source: Annual Report of UBL

Graphical Presentation:

Time Interest Earned Ratio

2.5

1.95
2
1.78
1.61
1.49
1.5

1.11
1

0.5

0
2010 2011 2012 2013 2014

Figure: Time Interest Earned Ratio

Interpretation:

Time Interest Earned Ratio on UBL’s is highly satisfying. Because, it’s increasing year by year
but in 2014 it was slightly decrease to 1.78. So UBL should maintain this ratio by minimizing
its operating costs in order to get adequate earnings to satisfying interest obligations.

97
7.4.10 Return on Assets:

Return on Asset=Net income/Total Assets

Year 2010 2011 2012 2013 2014

Return on 0.02% 0.02% 0.01% 0.01% 0.01%
Assets
Source: Annual Report of UBL

Graphical Presentation:

RE T URN O N A SSE T S
0.02%

0.02%

0.01%

0.01%

0.01%

2010 2011 2012 2013 2014

Figure: Return on Assets

98
7.4.11 Investment to Deposit ratio:

Investment to Deposit Ratio=Total investment/Total Deposit

Year 2010 2011 2012 2013 2014

Investment 0.221 0.242 0.332 0.221 0.379
to Deposit
ratio
Source: Annual Report of UBL

Graphical Presentation:

INVESTMENT TO DEPOSIT RATIO

0.379

0.332

0.242
0.221 0.221

2010 2011 2012 2013 2014

Figure: Investment To Deposit Ratio

Interpretation:
Investment to deposit ratio shows that which amount of deposit is used to as investment. UBL
Bank Ltd. investment to deposit ratio is increasing last year .That means, Bank is properly
utilize their deposit.

99
7.4.12 ACID Test Ratio:

Current Assets-Inventory/Current Liabilities

year 2010 2011 2012 2013 2014

ACID test 0.77 1.04 1.11 1.04 0.98
ratio

Source: Annual Report of UBL

Graphical Presentation:

ACID test ratio

1.11
1.04 1.04
0.98

0.77

2010 2011 2012 2013 2014

Figure: ACID Test Ratio

100
7.4.13 Net Profit Margin:

The net profit margin measures the percentage of each sales dollar remaining after all expenses,
including taxes, have deducted. The higher the firm’s net profit margin is better. The net profit
margin is a commonly cited measure of the company’s success with respect to earnings on
sales.

Net Profit Margin=Net profit after tax/operating income

Year 2010 2011 2012 2013 2014

Net Profit 0.04 0.09 0.13 0.28 0.24

Margin

Source: Annual Report of UBL

Graphical Presentation:

NET PROFIT MARGIN

0.28

0.24

0.13

0.09

0.04

2010 2011 2012 2013 2014

Figure: Net Profit Margin

Interprétation:
The Bank net profit margin in 2010-2013 that is 0.04-0.28 which indicates that profit margin
is increasing day by day and its good situation. But in 2014 UBL’s net profit margin is
decreasing which indicates that the banks profit is decreasing.

101
7.5 Trend Analysis:

It is really important to analysis trend in ratio as well as their absolute level. This analysis
informs us whether a company’s financial condition improving or deteriorating.

102
 CHAPTER-08
FINDINGS, RECOMMENDATION
AND CONCLUSION

103
 8. Findings
By analyzing the various data the following finding have been found:
 Uttara Bank Ltd. has already established a favorable reputation in the banking industry
in the country.
 Uttara Bank Ltd. Banks performance may be termed satisfactory in respect of Deposit
mobilization and Profit earning in the year 2014. Due to Modern Banking the number
of Deposit are increasing rapidly.
 Most of the clients in Uttara Bank Ltd. are satisfied with Foreign exchange service of
giving statement.
 All the officers are so much helpful and have a friendly working environment. They
help each other, when any officer falls in trouble.
 The Foreign Exchange Department is very much Strong. Because they use in dealing
with the foreign Bank in term of L/C opening and amendment of L/C, are very much
expedient to the foreign Bank. It is giving a competitive advantage to the Mercantile
Bank Ltd. For this, businessmen like to deal their business with the Uttara Bank Ltd.
 The top executives and officers are very helpful to the clients. Some of our businessmen
do not know the exact procedures of international trade. The officers of Uttara Bank
Ltd. help them to properly execute their business.
 Uttara Bank Ltd. provides little assistance in relation with foreign exchange to the small
entrepreneur comparing to large business houses. Small entrepreneur has to keep higher
margin, sometimes 100%, regarding opening a L/C.

 UBL has limited promotional activities to increase motivate its present and potential
investment client.
 Numbers of employees are fewer than the volumn of works thats creates problem in
prompt service.
 The operations of international trade are as per local and international laws, rules,
customs and practices.
 Financing in the international trade is very crucial for the economy as well as it is risky.
Sometimes the government imposes restriction to import and export some products. As
a result the rate of opening L/C become reduces.

104
 The presence of modern data processing and communication equipment’s is inadequate
in UBL. This cause a considerable degree of inefficiency in the Bank’s performance,
especially in the foreign exchange department.

105
8.1 Recommendations

UBL should -----------

 Do Frequent Marketing Research:

The management of UBL should regularly administer marketing research activities in order to
keep a regular track of satisfaction levels. Regular research should also be conducted to find
out customer expectations about various service aspects. As customer expectations and
satisfaction are not static figures regular research at sufficient intervals should be conducted.

 Handle complains effectively:

UBL should actively manage the complains of various customers and encourages customers to
give feedback about the services. The management should collect, document complaints & use
that information to identify dissatisfied customers, correct individual problems where possible
and identify common service failure points. Research showed that this strategy will radically
improve the overall customer satisfaction.

 Focus on segmentation strategies:

The Bank should concentrate on the various demographic segments that are currently not very
satisfied with the banks services. Products services should be tailored for these segments.
Appropriate research and surveys should be designed to find out the requirements of these
dissatisfied segments. On the other hand, the bank should capitalize on the segments that are
currently very satisfied with the services.

 Do Relationship Marketing:
The Bank should focus more on existing customers in order to build strong and loyal
relationship with them as the survey showed that satisfied customers more aptly or certainly
recommends the Bank to friends and relatives. Thus the power of relationship will foster
positive Word of Mouth Communication and will attract new customers at a lower cost.

106
 Increase bank branches:
Although expanding new branches is very expensive, but as the number of customers is
increasing, very soon the need for establishing new branches would become a necessity & thus,
it could be under consideration.

 Introduce Credit Card Facility:

While handling customers over the counter & also over telephone (as a part of my internship
work), a certain demand for credit card facility was noticed strongly. I think, if UBL introduces
this facility, more customers will be attracted & therefore, UBL will achieve greater market
share.

 Clarify the statements in simpler form:

The bank should redesign the format of its account statement in to a clearer and easily
understandable format. The survey showed a huge amount of dissatisfaction towards the
current format of statements. It should be redesigned with inputs from customers and satisfying
their requirements.

107
8.2 CONCLUSION
Uttara Bank is one of the widely expanded banks in Bangladesh. Sometimes the bank faces
some problem due to its wide network coverage that's why it "has better establishment
coverage.
We see that Uttara Bank Ltd. Mugdapara Branch has a large amount of deposit, which has
full filled its target. Right now the Bank is not providing any sort of Advances because of
blocked a big amount of money of this section. The management has to take necessary steps
for increase its advance; otherwise this branch will never increase its profit. Total word is that
this banks have to minimize its different types of unnecessary expenditure and maximize profit
through launching new schemes and obtain different people's belief.

Despite various adversities the overall growth trend of Uttara Bank Ltd. is upward from last
few years. The Managing Director of the bank has taken it as a challenge to earn more profit
in future. To survive in this competitive market the shaping and reshaping the structure to fit
the time requirement is a must.

108
Appendix

109
 BIBLIOGRAPHY

Reference Books

 Rose, Peter S. (1999), Commercial Bank Management, Sixth Edition, Irwin-

McGraw-Hill New York, pp. 503-515
 Research Methodology of C.R. Kothari
 Chowdhury, L.R., A Text Book on Foreign Exchange: Documents used in
foreign trade (pp.163-224), Fair Corporation, Dhaka.
 Gordon, E. & Natarajan, K., Banking: Theory Law and practice, Himalaya
Publishing House, Mumbai, 1996.
 Sen, A.K., & Mitra, J.K., Commercial Law and Industrial Law: Securities (pp.
402-9). Sri Sripati Bhattacharjee for the World Press Private Ltd., Calcutta.
 Rahman, S., Handbook of foreign exchange transaction: Import (pp.27-60), Mrs.
Dilruba Begum, Dhaka.

Annual Reports
 Annual Report of Uttara Bank Limited 2014.

Website
 www.uttarabank-bd.com
 www.bangladesh-bank.org

Other References
 Daily Statement of UBL
 Monthly Reports
 Schedule Bank Statistics
 Statement of Affairs
 Foreign Exchange Manuals
 Guidelines for Foreign Exchange Transaction
 Practical participation of UBL
 Different Types of Forms of UBL

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