CHAPTER THREE GENERAL BANKING OF JANATA BANK LTD.

CHAPTER 3

GENERAL BANKING OF JBL

Chapter contents……
Chapter Hints……

• Introduction
• Functions of General
Banking
• This section is • Sections of General
designed to show Banking
the bank & its • Account Opening
systems of banking Section
in accordance with • Remittance Section
Janata Bank • Cash Section
Limited. • Transfer
• Clearing & Bills
Section
• Loan Products
Offered by the JBL

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CHAPTER THREE GENERAL BANKING OF JANATA BANK LTD.

3.1 INTRODUCTION

Out of three major sections, General Banking is important one. General banking is the head of
total banking system. Through this section, bank has to receive and disburse money, to develop
banker customer relationship by opening different types of account and providing prompt
services to the customers. This department collects money from the depositor and uses these
deposits to earn profit.

3.2 FUNCTIONS OF GENERAL BANKING

The functions of general banking department of Janata Bank Ltd. are as follows:
 Maintenance of different types Deposit A/C:
 Saving Accounts
 Current Accounts
 Fixed Deposits
 Short Term Deposits
 Other Saving Schemes
 Receipts & payment of cash.
 Handling transfer transactions.
 Operations of clearinghouse.
 Maintenance of accounts with Bangladesh Bank & other banks.
 Collection of Cheques & Bills.
Issue and payment of Demand Drafts, Telegraphic Transfers and Payment Orders.
 Maintenance of Safe Deposit Lockers.
 Maintenance of Internal Accounts of the banks.
 Reporting to the Head Office about daily position of the bank.
 Saving record of all transactions in computer.
 Closing and transfer of different types of accounts.
 Keeping good relation with valued customer.
 Providing necessary support to the customers.

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CHAPTER THREE GENERAL BANKING OF JANATA BANK LTD.

3.3 SECTIONS OF GENERAL BANKING

During my practical orientation in Janata Bank, Feni Corporate Branch, it came to the
observation that general banking section is divided with five areas. These are:
 Account opening section
 Remittance section
 Bills and clearing section
 Cash section
 Mail receive and dispatch section

3.4 ACCOUNT OPENING SECTION

Various tasks are performed in this section. Such as:

 Opening of different types of account.
 Issue of checkbook.
 Transfer and closing of account.
 Enquiry of account.
 Checking The Signature of the client.

3.4.1 Various types of account are offered by Janata Bank:

Janata Bank offers various types of account to its different types of customer .These are as
follows:
 Current deposit (CD) account
 Savings bank (SB) account
 Short term deposit (STD)
 Fixed deposit (FOR)

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CHAPTER THREE GENERAL BANKING OF JANATA BANK LTD.

Savings Bank (SB) Account:

This deposit is intended primarily for small-scale savers. The main objectives of this account, is
promotion of thrift. Savings account is meant for those who want to save at certain amount of
their income and earn interest on that for future needs. All features are more or less like (hat of
CD a/c except for some restriction that is imposed by the bank. Number of withdrawals over a
period of time is limited. .This A/C mainly opens on person name. SB account has the following
properties:
 Opening Amount/ Initial Deposit Tk. 1,000/-
 Service Charge (yearly) Tk. 345/-(including VAT)
 Minimum Balance Requirement Tk. 500/-
 Interest rate 6%
 Time period 5 or 10 years.
 Installment Tk. 100 / 200 / 300 / 400 / maximum 500.
 One cannot withdraw money more than two times in a week.
 The withdrawing amount is not to exceed 75% of the total balance.
 If customer withdraws money more than three times in a week than no interest is given to
customers on his account

Current Deposit (CD) Account:

A current account is an account, which is generally opened by business people for their
convenience. A current account is a running and active account, which may be operated upon
any number of times during a working day. There is no restriction on the number & amount
withdrawals from current a/c. It does not earn any interest.
It has the following properties:
 Opening Amount/ Initial Deposit Tk. 1,000/-
 Service Charge (yearly) not more than Tk. 575/-(including VAT)
 Minimum Balance Requirement Tk. 1,000/-
 Closing charge not more than Tk. 300/-
 Transfer fee Tk.50/-
 Usually open for business purposes.

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CHAPTER THREE GENERAL BANKING OF JANATA BANK LTD.

 Current a/c may be individual or joint or partnership firm or company or association or

club or can be formed on any name. It provides the following facilities:
 Overdraft facility,
 Other facilities like collection of checks transfer of money, rendering
Agency and general utility services
 Nomination facility

Fixed Deposit Receipt (FDR) Account:

In this category are included the deposit with the bank for a fixed period which is
specified at the time of making the deposit. Such deposits are therefore called fixed
deposits or term deposits. A fixed deposit is repayable on the expiry of a specified period,
chosen by the depositor to suit his purpose and to enable him to get back money us and
when he needs it. The fixed deposit may be made for 3 months, 6 months, 1 year, 2 year or
3 year. As the date of repayment of fixed deposit is determined in advance, the banker
needs not keep more cash reserves against it and can utilize such amount more profitably.
The banker therefore offers higher rate of interest on such deposits. Fixed deposit has
grown in importance and popularity in our country during recent years. When a matured
FDR is withdrawn, the principle amount along with the interest amount (deducting 10%
tax from the total) is paid to the client. Income tax of the customer having TIN is 15%.

The rate of interest and the terms of the Fixed Deposit receipt are given below:
Term 3 months 6months 1 year & above

Interest rate 10% 10.50% 10.50%

Short Term Deposit (STD):

Monthly saving scheme product brought to the welfare for the customers who call it as a Janata
Bank Saving Deposit Scheme (JBSDS). Who doesn’t have the big amount of money to deposit at
a time in the bank but want to get accumulated money with profit after a certain period of time,

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CHAPTER THREE GENERAL BANKING OF JANATA BANK LTD.

for them this opportunity is opened to deposit monthly in the bank. One can open this account
more than one as well as jointly. Minority can open account with guardian. This product has a
variation with different figure starting from 500 to 10,000 for 10 years like this:

Monthly Installment 10 years

500/- 1,00,000/-
1,000/- 2,00,000/-
2,000/- 4,00,000/-
3,000/- 6,00,000/-
4,000/- 8,00,000/-
5,000/- 10,00,000/-
10,000/- 20,00,000/-

It has the following properties:

 Opening Amount/ Initial Deposit Tk. 1000/-
 Service Charge (yearly) Tk. 575/-
 Minimum Balance Requirement Tk. 1000
 Interest rate 5.5%

3.4.2 Various types of product offered by JBL:

JBL Bank offers various types of product to its different types of customer. These are as follows:
 JBL Regular Deposit Account (JRDA)
 Education Deposit Scheme (EDS),
 Medical Deposit Scheme (MDS).
 Foreign Currency Deposit.
 Janata Bank Saving Pension Scheme (JBSPS).
 Janata Bank Double Benefit Scheme (JBDBS).
 Staff Loan.
 Computer Loan.
 House Building Loan.

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CHAPTER THREE GENERAL BANKING OF JANATA BANK LTD.

 Agriculture Loan.

Medical Deposit Scheme (MDS):

 Some people want to open A/C short period of time. Based on this demand and
expectation, JBL has brought Medical Deposit Scheme. For two years or four years &
six years there is excellent and attractive opportunity to deposit. Individually/Jointly
can open this account. Minor can open this a/c with help of matured guardian. The
pattern of the monthly income scheme is like this:

Education Deposit Scheme (EDS):

 This product offers to be normally a student in different years and with different
figures of money. To get certain and bright future, Janata Bank has brought this
product. It has 2, 4 and 6 years period wise saving facility benefit. To do so one can
apply for more than one A/C. Jointly and with guardian below 18 can also open this
account. It’s pattern like this:

 Foreign currency deposit:

Maintaining foreign currency account through its Authorized Dealer Branches
Janata Bank Limited gives an opportunity. Bangladesh Nations residing abroad or Foreign
Nations residing abroad or Bangladesh and foreign firms operating in Bangladesh or
abroad or Foreign missions and their expatriate employees can use this deposit service.
For account opening two copies of recent photograph, nominee’s photograph, passport
copy, ID of residence in abroad is required.
Benefits: No initial deposit is required to open the account; interest will be offered
1.75% for US Dollar account, 3.00% for Euro account and 3.25% of GBP account;
interest provided on daily product basis on the credit balance (minimum balance of US
Dollar 1000/- or GBP 500/- at least for 30 days) maintaining in the account

 Lease Finance:
 Janata Bank Limited offers leasing facility for clients with easy installment facility.

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 Financing Area
 Capital machinery.
 Different equipment’s.
 Gas, Diesel generator and Power plant.
 Medical equipment’s.
 Lift or elevator.
 Information Technology equipment’s.
 Construction equipment’s.

Agriculture Loan:
JBL provides agriculture loan for poor farmers or landless farmers without any security for
cultivation of seasonal crops, vegetable etc. JBL, REB Branch is the pioneer of agriculture loan
in Bangladesh among all branches of JBL. From starting of REB Branch, it provides agriculture
loan with very nominal interest rate. For economic year 2011-12 target of agriculture loan
disbursement for REB Branch is Tk.3.00 crore. REB Branch disburses this loan among farmers
as group basis.
Cards:
JBL provides two types of card facilities one is Q-cash (ATM) Debit and Credit card.
Credit Card:
JBL Credit Card is accepted in many merchant outlets around the world. Our wide range of
merchants include hotels, restaurants, airlines, & travel agents, shopping malls and departmental
stores, hospitals & diagnostic centers, jewelers, electronics & computer shops and many more.

3.4.3 Documents to be obtained for different types of account:

When anyone comes to open an account he has to submit some documents to the banker.
Different types of documents need for different customers. Some common documents required
for all types of account are:
• Introduction recommendation.

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CHAPTER THREE GENERAL BANKING OF JANATA BANK LTD.

• Specimen signature card

• Account opening agreement form
• Two copies of Photograph of account holder and two copies of
nominee (if any).
• Deposit slips book.
• Cheque-book requisition slip
• Letter of mandate authorizing another person to operate the account on
behalf of the account holder.
• National ID Card
• Birth Certificate

3.5 REMITTANCE SECTION

Remittance of funds is a very crucial service of JBL. It aids to remit fund from one place to
another place on behalf of its customers as well as non- customers of bank. JBL has its branches
in the major cities of the country and therefore, it serves as one of the best mediums for
remittance of funds from one place to another.
The main instruments used by JBL, local Office Branch for remittance of funds.
 Payment Order Issue/Collection
 Demand Draft Issue/Collection
 T.T. Issue/Collection
 IBC/OBC/LBC Collection.

3.5.1 Payment Order Issue/Collection:

The pay order is an instrument issued by bank, instructing itself a certain amount of money
mentioned in the instrument taking amount of money and commission when it is presented in
bank. Only the branch of the bank that has issued it will make the payment of pay order.

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Procedure of Issuing Payment Order:

 Obtain P.O, application from duly filled in and signed by the Purchaser/application.
 Receive the amount in cash/transfer with commission amount.
 Issue Pay Order
 Enter in Pay Order register

3.5.2 Charges:
A commission of 0.10% is taken on the draft value & 15% vat on DD commission & Tk.25/= is
taken as postal charge.

3.5. 3 Demand Draft (D.D)

This is an instrument through which customer's money is remitted to another

person/firm/organization in outside the clearinghouse area from a branch of one bank to an
outstation branch of the same bank or to a branch of another bank (with prior arrangement
between that bank with the issuing branch): This is an order instrument in which the issuing
branch gives instruction to the payee/drawer branch to pay certain amount of money to the order
of certain person/firm/organization. Commission, vat and postage are charged for issuing DD.

Example: - To transfer money from Chittagong to Dhaka

3.5.4 T.T. Issue/Collection:

Though TT stands for Telex Transfer it is used as Telephonic Transfer since Telex has
eliminated. Telephonic transfer (TT) is another widely used mode for remittances of funds. In
case of telephone transfer the message for transfer of funds is communicated through tested
telephonic message. JBL generally recovers from the telephone charges in addition to the usual
service charges.

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CHAPTER THREE GENERAL BANKING OF JANATA BANK LTD.

This is a mode of transfer of customer's money from a branch of one bank to another branch of
the same bank through telegraphic/telephonic message.

3.5.5 Online Banking Services:

Now JBL started test basis online banking service in eight branches. As a result customer of one
branch will deposit or withdrawal his/her money through any other branches of JBL at cheapest
cost or service charges. Here it is mentioned that online facilities are available for Current
Deposit A/Cs, Savings Deposit A/Cs & Special Notice A/Cs only.

3.5.6 IBC/OBC:
By OBC, we mean that those Cheques drawn on other banks which are not within the same
clearing house. Officer gives OBC seal and oarsmen on this type of Cheques and later sends a
letter to the manager of the branch of the some bank located in the branch on which Cheque has
been drawn. After collection of that bill branch advises the concerned branch in which Cheques
has been presented to credit the customer account through Inter Branch Credit Advice (IBCA).

3.5.8 Accounts:
Account Department plays most vital role in Banking. Accounts Department is a department
with which each and every department is related. It records the profit & loss A/C and statement
of assets and liabilities by applying of book-keeping. The functions of it are theoretical &
computerized based. JBL REB Branch records its accounts daily, weekly, and monthly every
record.
Basically Accounts Department is not alone. Accounts department is a mix of as follows:
1.Cash
2.Transfer
3. Clearing

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3.6 CASH SECTION

Cash section is an important section where cash transactions are made. Cash sections
demonstrate liquidity strength of a bank. It is also sensitive as it deals with liquid money.
Maximum concentration is given while working on this section. Tense situation prevails if there
is any imbalance in the cash account. There are various systems maintain by cash officer that is
under:
• Vault
• Cash Payment
• Cash Receive
• Evening banking.
Faruk Ahammed (Assistant officer Grad-1) is active as cash in charge. In fact, he maintains cash
related all activities and Md. Alauddin Sharker (Assitt. Executive officer) & Khaleque Hossain
(Assitt. Executive Officer) assist him to accomplish it accurately. This section of any branch
plays very significant role in Accounts Department. Because, it deals with most liquid assets of
the JBL. This section receives cash from depositors and pay cash against Cheque, draft, PO, and
pay in slip over the counter. Every bank must have a cash counter where customer withdrawn
and deposit their money. When the valued client’s deposit their money at the cash counter they
must have to full fill the deposit slip his/her own, then they sing as the depositor option’s then
they deposit their money through cash officer at the cash counter.

3.6.1 Vault
The cash department is the riskiest department of the bank. This is the section where tight
security is required to avoid any accident. There is a limit to be amount of cash that each counter
can carry: carrying of excess cash is avoided for safety reasons. If there is any surplus in the cash
then the excess amount should sent to the Bangladesh Bank or if there is any shortage in the cash
then the shortage amount should be borrowed by the bank from Bangladesh Bank or from the
Head Office or Other Banks,

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3.6.2 Receiving Cash:

Any people who want to deposit money will fill up the deposit slip and give the form along with
the money to the cash officer over the counter. The cash officer counts the cash and compares
with the figure written in the deposit slip. Then he puts his signature on the slip along with the
‘cash received’ seal and records in the cash receive register book against A/C number.
At the end of the procedure, the cash officer passes the deposit slip to the counter section for
posting purpose and delivers duplicate slip to the clients

3.7 TRANSFER
Basically transfer is a type of register maintaining matter. In this register officer write down
every day transactions in Debit and Credit side then the officer calculate both the side of the
register if both side shown same amount, it means that the total day’s transaction is completely
okay Transfer is not a critical sector in banking but it is very important. Transfers play a vital
role in banking sector. Rezaul Karim (Assitt. Executive officer) maintains the transfer to client
A/C.

3.8 CLEARING & BILLS SECTION

Clearing and bills section is an important section of General Banking. This is the section through
which branch has to clear it's inter branch and interbank transaction. Customers do pay and
receive the collecting branch the system is known as IBC.

3.8.1Clearing:
Clearing is one of the crucial parts of banking. Different Cheques of banks come from different
clients to pass through clearing. In this case this Cheques are sent to the head branch to get
advice whether it will be passed or not and for that it takes minimum one day to credit his or her
account. To perform these types of momentous activities Assistant executive officer Mrs.
Roxanna Sultana is involved.

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CHAPTER THREE GENERAL BANKING OF JANATA BANK LTD.

3.8.2 Types of Clearing Cheque:

JBL Local Office (Head) Branch performs the bill clearing function through Bangladesh Bank.
JBL L/O Branch acts as the agent of all JBL branches for the clearing house of the Bangladesh
Bank. There are two types of Cheque which are
1. Inward clearing cheque.
2. Outward clearing cheque.
3.8.3 Inward Cheque:
Inward cheques are those ones drawn the respective branch which have been presented on other
banks and will be cleared / honored through the clearing house of Bangladesh Bank. Then the
Cheque is called inward cheque of JBL L/O Branch.

Accounting treatment:
Customer’s………………………… A/C Dr.
JBL General ………………………A/C Cr.

3.8.4 Outward Cheque:

Outward Cheques are those ones drawn on other bank branches which are presented on the
concerned branch for collection through clearing house of Bangladesh Bank. These cheques are
called outward clearing Cheques.

3.8.5 Clearing house

Clearing House is a place in the Central Bank where different banks come to settle their
interrelated liabilities.

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CHAPTER THREE GENERAL BANKING OF JANATA BANK LTD.

3.8.6 Clearing House System

The mechanism of working at a Clearing House in general is as follows:
 Every Rank of the locality, which is a member of (he clearinghouse, prepares Bank-wish
list of cheques after receive from customers and drawn on different Banks of the locality.
 An officer, in charge of clearinghouse, goes to the clearinghouse in the morning with the
cheques and their list. He delivers the cheques to the officials of the respective banks.
Similarly, he also receives the cheques drawn on his Bank from the officials of the other
banks.
 The official of each bank computerizes the final balance, payable or receivable by his
Bank alter taking into account the various amount of receipt and payment.
 The official return of their respective Dank to meet again in the afternoon to return any
dishonored instruments to the officials of the respective Banks.
 The final settlement is effective by the supervisor of the clearinghouse by debiting or
crediting, as the case may be, the accounts of the respective Banks as maintained with the
clearinghouse.

3.9 LOAN PRODUCTS OFFERED BY THE JBL

Generally the clients of JBL enjoy two types of Loan / Credit facilities.
These are:
3.9.1 Funded facility includes:
1 .Overdraft (Limit can enjoy within 1 year)
* Cash Credit (HYPO + Mortgage)
* Cash Credit (pledge)
* Secured Over Draft (SOD)
2) Term Loan

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CHAPTER THREE GENERAL BANKING OF JANATA BANK LTD.

>> Personal Term Loan:

a) Personal secured
b) Personal unsecured
c) Auto loan
d) Staff loan
e) Consumer Credit Scheme (C.C.S.)
>> Corporate Term Loan:
a) BLC – Bills under Letter of Credit
b) TR- Trust Receipt
c) FBP- Foreign Bill Purchased
d ) IBP- Inland Bill Purchased
e) Past Due Loan

3.9.2 Non-funded facility includes:

1) Export L/C
2) Import L/C
3) Back to Back L/C
4) Bank Guarantee
Deposits are invested in Trade, Commerce & Industries in term basis i.e., short, medium & long
term.
Deposits come from business, housewives, institutions & small income group etc. who has
excess or available money. It may be said that though banks are performing social
responsibilities by securing both small & large depositors money & also helping industrial, social
& economical development, but like others, prime objective of the institute is maximization it
profit by optimization of resources.

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