Chapter 1: Introduction

1.1 Origin of the Report:
As a prerequisite of obtaining Masters of Business Administration (MBA) degree from Faculty of Business Studies, University of Dhaka, and Every student has to go through an internship program. To fulfill the internship requirement I am being employed in IFIC Bank Limited, a well reputed specialized commercial bank. Under the supervision of Mr. Nazmul Karim Chowdhury, Professor, Dept. of Management Studies. I have been assigned to prepare an internship report on “General Banking System of IFIC Bank Limited”. This report is written to comply with that instruction.

1.2 Rationale of the study:
Banks have of course a vital role in promoting and accelerating the economic development process as per the demand of time through the implementation of finance for industrial & agricultural project, domestic and foreign trade and allocating the fund to various off-firm employment and self-employment generation projects. Focusing the light and considering the every pros and cons on available statistical data it has been apparently accepted that IFIC Bank Ltd. has continued to register its steady progress in the field of deposits, advances & foreign exchange business. In view of the sluggish nature of the economic activities over the years the deposit performance of IFIC Bank Ltd is more or less satisfactory. The low rate of economic growth, high rate of unemployment, illiteracy, growth rate of population, low rate of credit recovery etc. are the impediment factor of economic development of a country. Despite of this obstructed IFIC Bank Ltd. has shown a mediocre performance.

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1.3 Objectives of the Report:
The main object of the study is to know & g the General Banking System of a bank, more over the study is conducted for the following objective      

To know about the overall General Banking procedure of IFIC bank. To have knowledge about the activities of IFIC Bank Limited. To know the clearing procedure. To identify the customer relationship of IFIC Bank Limited. To know the bank’s cash section. To identify the problems face by the bank in opening a bank account. Suggest several guidelines to overcome these problems.

To fulfill the requirement of the internship program under BBA program.  To formulate a viaduct between the theories and practical procedures of banking day to day operation.  To gain practical experiences and view the application of theoretical knowledge in the real life.

2.4 SCOPE AND DELIMITATION OF THE STUDY
This study will deal with the General Banking department of IFIC Bank, where all the functions are vital issue. This study will be confined to the Mohakhali Branch of IFIC Bank. The overall function will perform in the bank and will be covered for the study. The corporate office of the bank will also be contacted to have meaningful information about the study.

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1.5 Methodology:
Sources of Data: Both Primary and Secondary data are used in preparing this The details of the sources of data are as follows: Primary Source  Practical work exposure with IFIC Bank Limited  Face to face conversation / Interview with the Bank Officials  Observations Secondary Sources:  Annual Report of IFIC Bank Limited  Training materials of the Bank  Periodicals published by Bangladesh Bank  Various books, journals, articles etc.  Web sites. report.

1.7 Limitations of the Study:
 Credit risk management is a vast area for studying. Different departments

participate in credit risk management. I had a limited exposure to all those departments during my internship period. Therefore not all information or observation presented throughout the report is from first hand experience.  This report is considered only credit risk of IFIC Bank limited, there are also other risks of a bank namely: Asset and liability risk, Foreign exchange risk, internal control and compliance risk, Money laundering risk.  Lack of experience has also acted a constraint for the exploration of the topic. Another limitation of the study is lack of sufficient work experience in the credit division during my internship

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Chapter 2: Overview

2.1 Background of the IFIC Bank
International Finance Investment and Commerce Bank Limited (IFIC Bank) is banking company incorporated in the People’s Republic of Bangladesh with limited liability. During 1972 it was taken under national ownership. At that time it’s paid up capital was 69.13 crore and profit figure was 42 lakhs. During September 1983 it was privatized under Privatization Act. At that time this deposit was 231.03 crore and profit figure was 5.06 crore. 95% of its shareholder is public and rest of share holds by Government. The bank earned ever-highest operating profit during the year 2002 among all private banks of Bangladesh (except Islami Bank BD Ltd.) The bank earned an operating profit of Tk. 131.18 crore during the year 2002. Overall management of the bank is vested in a 13member board of directors with the managing director as the chief executive. In December 2000, the bank had a total of 1,659 employees and 54 branches including two overseas. But in December 2010, the bank had a total of 2315 employees and 95 branches. In 1983 when the Government allowed banks in the private sector, IFIC was converted into a fully fledged commercial bank. The Government of the People’s Republic of Bangladesh now holds 32.75% of the share capital of the field of trade and commerce own 8.62% of the share capital and the rest is held by the general public.

2.2

Vision of IFIC

Giving economic service in social and business sectors to be the leader of the banking sectors and develop it.

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innovative actions and competitive edge make their position unique in giving quality service to all institutions and individuals that they care for.  IFIC want to be the leader among banks in Bangladesh and make their indelible mark as an active partner in regional banking operating beyond the national boundary.  In an intensely competitive and complex financial and business environment.2.3 Mission of IFIC Bank Ltd  IFIC’s Mission is to provide service to their clients with the help of a skilled and dedicated workforce whose creative talents.4 Core Value of IFIC Bank Ltd. for they drive from them their inspiration and drive for onward progress to prosperity. 2.  IFIC committed to the welfare and economic prosperity of the people and the community. These values bind they are people together with an emphasis that they are people are essential to everything being done in the Bank. Internship report on IFIC BANK LIMITED 5 . they particularly focus on growth and profitability of all concerned. IFIC’s core values consist of 6 key elements.

which earns and maintains consumer trust Open Communication • • • IFIC builds customer relationships based on integrity and respect. IFIC is committed to the prosperity of the customers and shareholders. and maintaining a positive attitude reflect IFIC’s commitment to a supportive environment based on teamwork.Integrity • • • IFIC protects and safeguards all customer information IFIC treats everyone in an equitable and consistent manner IFIC creates an environment. Internship report on IFIC BANK LIMITED 6 . Teamwork • Interaction. Performance Driven • In IFIC customers and employees are judged in terms of their performance Continuous Self Improvement • Continuous learning. open communication. self-challenge and strive make ways for self improvement of workforce at IFIC. Quality • • IFIC offers hassle free better service timely IFIC builds-up quality assets in the portfolio. IFIC offers a full line of products and excellent service.

Now the government of the Peoples Republic of Bangladesh holds 49% of shares of the bank.  The bank is doing the transaction of bill of exchange on behalf of the client. is to accept deposited from various customers though various accounts. pay order (PO). Leading industrialists of the country own 34% of the shares and the rest is held by the general public.  The bank insures the securities of valuable documents of the client.  Provide loans on each term and condition. He was the first Chairman and A.  The bank invest it’s funds into profitable sectors.2.  It transfer money by Demand Draft (DD).7 Capital and Reserves: Internship report on IFIC BANK LIMITED 7 .  Above all IFIC Bank Ltd.5 Functions of IFIC:  The main task of the IFIC Bank Ltd. and (TT).  Assists in the foreign exchange by issuing letter of credit. The founder of IFIC Bank Ltd was Jahurul Islam of Islam Group of Industries. Board of Directors of the Bank is a unique combination of both private and Government sector experience.6 Ownership Structure: Previously IFIC Bank Ltd was Government owned bank. Rahman was first Vice Chairman. helps the business man financially by giving discount facility for bill of exchange and by providing the facility of letter of guarantee. F. Currently it consists of 11 Director. etc. 2. Of them eight represent the sponsors and general public and four officials in the rank and status of Additional Secretary/Joint Secretary represent the Government. 2.  It creates loan deposit.S.

63.IFIC bank has been consistently maintaining the ‘Capital Adequacy Ratio’.2180 million respectively at the end of 2010. as prescribed by Bangladesh Bank.20 million respectively in 1983.20 million only in 1983 reserves and Senior Executive of 2010.100 million and Tk. Authorized and paid up capital was Tk.5350 million and Tk. Senior Vice-President First Vice-President Vice-President Senior Assistant Vice-President First Assistant Vice-President Assistant Vice-President Senior Staff Officer (SSO) Staff Officer (SO) Officer Grade-I Probationary Officer Officer Grade-II Assistant Officer Officer Assistant Driver Internship report on IFIC BANK LIMITED Officer Attendant Security Staff 8 . As against tk 21. reserves incased to tk 3585 million at the endVice-President 2.9 Hierarchy Executive Vice-President of the Management of IFIC Bank Ltd. This has been made possible by a policy of building up both capital and reserves. It started with an Authorized and Paid up capital of Tk.

International Banking & Capital Market Division Secretary’s Division Corporate Banking & Marketing Division Finance & Accounts Division Corporate Communication & Support Service Division Human Resource Division Training & Research Division Internal Control and Compliance Division Information Technology Division Card Division Law and Legal Affairs Division 3 4 5 6 7 8 9 10 11 12 13 Internship report on IFIC BANK LIMITED 9 .2.10 Functional Department: The operations and activities at the Head Office are divided into following Divisions: 1 2 Credit Risk Management Division Remedial Asset Management Division Treasury.

Jessore. 85%) Branches are computerized throughout the country. Khulna. Federation.11 Information Technology Structure: *Present information technology structure of IFIC Bank:  Computer System  Computerized Services  Computer System:  Computerized Branches: 44 out of 52 (i.e.2.  Local Area Network: Seven main Branches (i. Internship report on IFIC BANK LIMITED 10 . and Narayanganj & Agrabad) are operating in Local Area Network environment. Dhanmondi. and Sylhet & Khatunganj) out side of Dhaka will be taken under LAN environment very soon. Moulvi Bazar.  Banking Software: It was past when 7 LAN Branches are using BexiBank 4000+ and rests of the 35 Branches are using BexiBank 3000+ for their daily Banking Transaction.e. Six more Branches (i. Rajshahi.e. Motijheel. Bogra. Gulshan. Now They Are using “MAYSIS” a much Upgraded and Well Managed Software.

Federation. Internship report on IFIC BANK LIMITED 11 . which are operating in LAN environment.e. Dhanmondi. Winxp or Novell NetWare operating system. Operating System: Most of our Branches. Gulshan.  Electronic Mail: Six main Branches has (i. and Dhanmondi & Gulshan). are using Windows 2000. are operating their Computer System in DOS (Disk Operating System).  Home Banking: Our Bank is currently engaged in implementing this new service for Bank’s high net-worth selected business clients.  SWIFT Network: Presently our International Division of Head Office is operating their Foreign Trade related transaction through SWIFT Network.   Computerized Services: Tele Banking (Computerized Phone Banking): Our Banking has implemented Computerized Phone Banking technology in 4 Branches (i. Narayanganj & Agrabad) are using Email facility for international and internal correspondence. In future all AD Branches will be brought under Email facility. Federation. Motijheel. which are using BexiBank 4000+.e.  Central Backup System: Presently Information Technology & Computer Division of Head Office is maintaining an Office Central Backup System for all the Computerized Branches and Division of Head Office of our Bank. Motijheel. Branches.

Gulshan. Federation. Credit Division etc. Internship report on IFIC BANK LIMITED 12 . Motijheel.e. Special Project Division.) Of Head Office is in under  consideration. and Narayanganj & Agrabad) under Wide Area Network (WAN) facility to offer our customers “Any Branch Banking” facility.  Shared ATM Network: Setup of Shared ATM Network is in under consideration. Dhanmondi.  Metropolitan Area Network/Head Office Computerization: Network implementation among Divisions (i.e. Moulvi Bazar.  Visa Card: Visa Card already established in current year. Inter Branch Connectivity: Our major plan in the IT sector is to ensure Inter Branch Connectivity of selected major Branches (i.

Chapter 3: General Banking 3. Moreover this is the first impression about the bank. general section must be taken carefully. Functions of General Banking of IFIC are discussed below: • • • • Establishing Banker Customer relationship Remitting customer's money from one place to another Collecting bills for customers Taking deposit and honoring Cheque drawn The functions of the different sections of general banking department are discussed below: General Banking Account Opening Remittance Section Clearing Section Cash Transaction Section Accounts Section Internship report on IFIC BANK LIMITED 13 . The clients and customers build their impression whether they are going for further dealings with the bank or not on the basis of their service. So.1 General Banking Department: General Banking department is considered as the direct customer service center.

Other types of account are usual purpose. Short Term Deposit (STD) Current Account (CD) Fixed Deposit Receipt (FDR) Saving Account (SB) Accounts Opening Department Pension Saving Scheme (PSS) Security Overdraft (SO) Cash Credit (CC) The last two accounts are created in loan purpose.3.2 ACCOUNT OPENING DEPARTMENT A bank has to maintain different types of account for different purposes. The different account opening producers will be discussed in detail in the forward topics. Internship report on IFIC BANK LIMITED 14 .

Introducers who has account on that particulars branch. registration of the club. Current Account (CD) Most business current deposit accounts in order to make their daily business activities. certificate of commencement certificate of incorporation. For private limited company requires articles of association  For public limited company requires articles of association. 3. resolution.1.Different account can be open by Individuals  Sole Proprietorship firms  Partnership firms  Limited companies either public or private  Clubs When an A/C is opened they give entries in the A/C opening register for A/C no. For clubs requires regulations & by laws.2. memorandum. For partnership account requires partnership deed. This account funds change most frequently than any other accounts because customers use to withdraw and deposit funds in regular basis. list of directors etc.  Opening Current Accounts:       Filling up the application form of CD account 2 (Two) copies of photographs. Internship report on IFIC BANK LIMITED 15 .

Saving Bank Deposit (SB) Saving bank deposit is another popular account maintains a bank. and cheque numbers in the cheque book register.  If proprietorship firm.  If the specimen signature matched with the specimen card. clubs. 3. then needs seal). A/C No. Then a cheque book is issued for that client and gives entries His/Firm/Club/Company etc names. then will get payment. then the seal mark of the concern is necessary.  No advance cheque will be allowed.2. companies.  Issue of Cheque Book: Requisition form filled up & signed up by client (if farm or co. So do for the partnership. Payment of Cheques:   No binding in case of payment of cheque of CD account Validity of a cheque is 6 (Six) month after issuing. These deposit accounts are Internship report on IFIC BANK LIMITED 16 . and societies. Saving deposit are suitable for savers who want to save for meeting future needs. At this requisition is transferred to the deposit dept for computer posting.2.

It is a midway between current deposits and fixed deposits.  For private limited company requires articles.  For public limited company requires articles.  Issue of Cheque Book: As it is for the Current account purpose. Internship report on IFIC BANK LIMITED 17 .for people who do not want to keep money for fixed long period.  For partnership account requires partnership deed.  For clubs requires regulations & by laws.  Payment of Cheques: As it is for the Current account purpose. list of directors etc.  Introducers who has account on that particulars branch. 1000. The different matters relating SB account are described in the following discussion:  Opening Saving Accounts:  Filling up the application form of SB account  2 (Two) copies of photographs. resolution. registration of the club. certificate of commencement certificate of inco0rporation. memorandum.  An initial amount of money Tk.

For more withdrawal depositors are not entitled for any interest. The amounts are being calculated and applied half-yearly. Specimen signature shall be obtained in CD specimen signature card. depending and the nature of the constituent. 3.  Operating of the Accounts: • Withdrawal form the account will be made by cheque/amount may be transferred as per request letter of the customer. • The date of withdrawal given in the notice shall be recorded in the relative account.  Payment of Interest: No interest shall be allowed if due notice are not received for withdrawal from the account. Internship report on IFIC BANK LIMITED 18 . • If an account is required to be operated like a CD.  Two time withdrawal within a week. Opening short Term Deposit (STD) Accounts: The account may be opened in current individual/ proprietorship/ partnership/ limited co.2. Any Exception will require prior approval of the head office.  No savings account will be allowed to be overdrawn.3. Monthly product is calculated for SB accounts. Interest will be allowed on the daily at all credit of the STD account. account forms as the case may be. Interest Provisions:  The current rate of interest is 6% per month for SB account. then the same is closed immediately and the customer be requested to open a CD account instead. at the end of June and December on when an account is closed.

Any day balance below Tk. 1000/If withdrawal is 25% of total balance.without notice. 25.withdrawal.4.000/. 3.5%  Maturity up to 6 month – Interest rate 12. 50. Fixed Deposit Receipt (FDR):  Category of FDR Accounts: IFIC offers the following category of FDR accounts:  Maturity up to 1 month – Interest rate 12. One over Tk.2. Two times withdrawal within a week.5%  Maturity up to 12 month or 1 year – Interest rate 12. But after 1 year if client not withdraw the amount then FDR automatically renew. Internship report on IFIC BANK LIMITED 19 .000/. More then two withdrawals in a week.5%  Different Provision For FDR minimum period is one month and maximum period 1 year.5%  Maturity up to 3 month – Interest rate 12.  Closing of STD:  The client will make an application to the bank. No Interest will be given if:      Any withdrawal made over Tk.  The bank will take Tk. FDR may be joint or individual. 50 closing to close the account.  Withdrawal: Withdrawal can be made only 2 times in a week.

 Renewal of FDR: If the customer not withdraws the FDR amount then it renewal for next period.  Either or Survivor: In case of joint FDR. It is very important to note that in these cases. 2) Death Certificate: The payee must make an application including the above documents. Some FDR mention either or survivor. The branch forwards it to the head office. The rest of the family members must have to submit the following documents: 1) Succession Certificate of Court mentioning.e. Payment on Maturity:  After maturity period the customers gets the interest plus principal back. The renewed period shall be count as FDR rate of those times. in this case survivor will get the amount of FDR.  Duplication: Internship report on IFIC BANK LIMITED 20 .  If customer wants to withdrawal money from FDR account before maturity then they will get only saving interest rate. who get & what portion. if one partner dies. then the survivor i. the bank have to be very careful.  Payment on Death: It is critical process when FDR holder dies. who is will get the money at maturity or the person’s name in favoring.  If customer wants to withdrawal money from FDR account before maturity then interest will be changed as penalty.

will show it after maturity to take his money back.  Specimen card: The signature of the FDR account holder is maintained in the specimen. then he has to make application to the bank by filling up an indemnity bond.5. 3. given to the applicant after opening the FDR account. after the expiry of the term period the depositor will have a sizeable amount to relish on. Pension Saving Scheme (PSS): This scheme is specially designed for the benefit of the limited income group members. The EDR account holder must surrender his FDR receipt during the payment. For duplicate FDR IFIC charges will be applicable.2.If the customers lost the FDR receipts.[ Internship report on IFIC BANK LIMITED 21 . After the maturity FDR receipt and FDR from are attached together and on the front page of the FDR from bank authority writers “close of FDR account” and gives entry in the ledger. It is also notifying that in case FDR. So. the bank entries the full amount at maturity date in advance when a customer opens a FDR account. This helps to accrue small monthly savings into a significant sum at the end of the term.  Closure: After payment at maturity period the FDR account is closed.  FDR Block: A receipt.

Against deposit of the requisite funds and payment of the remittance charges. Washing Machine.225/- Return after 5 years (TK) 7.532/1.322/40. For most of the people on fixed income the opportunity to supplement their monthly earning is a golden one. and a number of other expensive items are now within your buying range. Furniture. Television. And IFIC Special Deposit Scheme gives a customer just that.661/- 3. This scheme gives you the advantage of part payment to cope with the high price tags of many necessary home and office appliances. Car.266/72. Remittance facility is available to both customer as well as non customers of the bank and in fact this is the third major area of operation of a bank. Photo-Copier. Refrigerator.45. Customers can buy those home and office equipment’s without over taxing their budget.62. VCR.645/81. Microwave Oven. With this scheme IFIC makes better living possible for people living on fixed income. Personal Computer. 3.2.03.6 Consumer Credit Scheme: IFIC Bank’s Consumer Credit Scheme gives you a great opportunity to buy household and office items on easy installments.Monthly Installment (TK) 500/1000/2000/5000/- Return of the 3 years (TK) 8% 20.064/3. bank undertakes to make the equipment amount Internship report on IFIC BANK LIMITED 22 .5% 36.3 Local Remittance Section: Remittance is another best medium to serve fund from one place to another.290/2.

if the advice is received before presentation of DD it would be paid from “Bills Payable A/C DD payable” and if the DD is presented before receipt of the Advice it would be paid from suspense A/C DD PAID W/A. PAYMENT OF DD: • After issuing a bank draft to the purchaser. Feature of Draft: • It is drawn by one office of a bank upon another office of the same bank. as the case may be.available to a particular person or his order in a particular branch of the same bank or on other banks with agency arrangement. Money transmission / remittance are effected by way of issue • • • Demand Draft (DD) Telegraphic Transfer (TT) Payment Order (PO) 3. the Drawee branch verifies the signature of the authorized officials on the draft with the specimen signature maintained with them and if other wise in order pays the amount in cash or by transfer to account. • The Draft may be paid in two ways. DEMAND DRAFT (DD): According to the section 85 (A) of the negotiable instruments Act.1. intimating about the issue of the Draft. Internship report on IFIC BANK LIMITED 23 . a bank draft / demand draft is “an order to pay money drawn by one office of the bank upon other office of the same bank for the sum of money payable to order on demand. the issuing branch sends an Inter Branch Credit Advice (IBCA) to the Drawee branch. • On receipt of the Draft for payment.3.

• After signature the draft is handed over to the purchaser against acknowledgement on the voucher or on the back of the counter-foil. the application is treated as credit voucher for head office account. After receipt of cash. • Branch wise serial number is given on the draft after the printed number putting an oblique in between.• • It is payable on demand. In other words it cannot be made payable to the bearer. • After close of business branch wise ICBA are prepared for all the draft issued during the day and dispatched to the respective branches. • The Draft number is written on the voucher and Draft block. Issue of Duplicate demand draft: Internship report on IFIC BANK LIMITED 24 . Issue of the Demand Draft: • A standard DD application from duly completed and signed by the applicant with his full address is required. Concerned voucher is delivered to Remittance Department for issue of DD. voucher an register are sent to the Officer-in-Charge/ Manager for signature. • The Draft is prepared by the concerned Department and entered in the Draft Issue Register. Its payment is to be made to the person whose name is mentioned therein or according to his order. • The Draft may be marked crossed it the purchaser desires and a cost memo is issued.

Stop Payment of DD: The Issuing Branch instructs for stop payment of a DD when the purchaser approaches the issuing branch to do the same through an application. Telegraphic Transfer (TT): It is an order of the Issuing Branch to the paying Branch to pay a certain sum of money to the beneficiary. Cancellation of Demand Draft: The purchaser can request the issuing branch to the DD.• The signature of the applicant is to be verified from the original filled in DD application form. • The drawee branch is to be informed about the loss of the draft so that caution is exercised by them. 3. After getting instructions from the issuing branch to cancel the DD.2. The beneficiary should maintain an account with the IFIC Bank to get facility. • The draft is issued with mark “DUPLICATE” in red ink without altering the printed no and repeating the original serial number.3. a duplicate draft is issued to the purchaser after obtaining an indemnity Bond. Before sending the massage. the issuing Branch must be sure that there is a test arrangement for authenticating the Telegraphic / Telex message with the branch designed to make payment. A note to this effect is made in the original DD application form and DD issued register and the Drawee branch is to be advised of issue of the duplicate draft. Internship report on IFIC BANK LIMITED 25 . TT transaction is done in between the two branches of the same Bank only. • On receipt of confirmation from the drawee branch that the draft is still outstanding in their book and that caution is being exercised by them.

Payment of TT: The procedure of the payment of TT is as follows: • Remittance in charge receives incoming Test No. TT No amount in words and figure. amount in wards and figures. TT no. • Two copies of ICBA are prepared in which one copy is sent to the Head Office for reconciliation through the account department and another copy is preserved as an office copy. name of beneficiary and name of the remittance in charge of the issuing Branch with P. agrees and TT No supports the serial no. • If Test No. • An authorized officer verifies incoming Test & TT no with the controlling no and A/C no of the beneficiary whether he has an A/C with the paying Branch or not.A no are sent over the telephone.Issuance of the Telegraphic Transfer (TT): The procedure of issuing TT massage are as follows: • • The customer asked to complete TT application form.A. Internship report on IFIC BANK LIMITED 26 . • Debiting IFIC General A/C and crediting Bills Payable A/C TT payable entries are passed. • Out going Test No.5 per thousand with minimum charge Tk. the coded TELEX / FAX MESSAGE IS SEND to the end. particulars are given posting to the TT payable register. • • Entries are given to the register to maintain the controlling number and records. 25 and telephone charge tk 50 along with the fund are realized from the customer. Out going Test number is prepared for any amount of money and TT no is allocated on the basis of controlling no. no. name of the beneficiary and name of the remittance in charge with P. • If the paying branch is not reached by the telephone. Commission @ 1.

O. Signature of two authorized officer. IBDA is prepared in duplicate the original is sent to the reconciliation department of Head Office through account department and true copy is kept as an office document. Issuance of pay order: For issuing a pay order. the following procedures are maintained• Client is to submit an application to the remittance department in the prescribed from properly filled and duly signed. Payment Order (P. and borrowing from other banks. Payee’s name 4.3. It may be called as the Chaque of the Bank because bank pays house rent. Issuing Branch order itself to pay the amount containing by the amount containing by the instrument. • The issuing branch gives posting to pay-order register. It is issued as a means of local remittance. 2. • The client pays the equivalent amount of pay order plus interest on it in cash or by cheque. Amount in words and figure 5. and shortage of clearing house and other necessary cots through P.• • Party A/C is credited by debiting Bills Payable A/C TT Payable. Internship report on IFIC BANK LIMITED 27 . Serial no and date.O) Pay order is an undertaking of a certain branch to pay a certain sum of money in favor of a customer. It can be negotiated through endorsement and delivery. Banker can sell it in exchange of commission.3. It has the following characteristics1. 3. telephone bill. electricity bills. Name of the branch 3.

Clearing of Cheque is done through the clearing house in the Bangladesh Bank. • Finally.O and separates it from the deposit slip. Actually most of major client deposit their account in different kinds of bank Internship report on IFIC BANK LIMITED 28 . Pay order issued & income A/C commission on pay order entries are passed.4. The authorized officer cancels the P.• Debiting Cash and crediting Bills Payable A/C. Nature of clearing house: • • 1st Clearing House Return Clearing House 3. P. Payment of Pay order: As the pay order crossed A/C payee. On presentation the Pay-Order is verified and marked for transferred. the presents it with deposit slip to the issuing Branch for payment through the clearing house or for credit to clients account. it is prepared and delivered to the customer. After receiving Cheque it is necessary to endorse it and cross it specially.O is sent to the issuing Branch through clearing house and proceeds are credited to the concerned account. The party is allowed to withdraw the amount after getting clearance the originating branch. 3. Clearing House Process: Every bank has an officer of clearinghouse who is work with Bangladesh Bank clearing house.4 Clearing Section This section receives all kinds of check in favor of the valued client for clearing on the part of their banking services.1.

Clearing officer check all the cheques and deposit slip very carefully and then he received the cheque. After that the clearing officer posts all the cheques in computer software which is recognized through Bankgladesh bank computer department.  The instrument is arranged bank branch wise.1 Outward clearing:  The instruments drawn on the other Banks received from the clients are sent to the clearing house for collection called outward clearing.4. 3.2.  Schedules are prepared for each branch of a bank and main schedule for a bank. Then clearing officer seal all the cheques in advance date after that the officer endorsement all the cheques and sign all the cheques.4.cheques.  The particulars of the instrument and the voucher are entered into the outward clearing register  The register is balanced  The instrument is suitably discharged / endorsed. All the cheques are posted in the computer by branch wise. Types of Cheque for Clearing: There are four types of Cheques for clearing: • • • • Outward clearing Inward clearing Outward Bills for collection Inward bills for collection 3. Internship report on IFIC BANK LIMITED 29 .2. then officer print the entire document and staple all the cheques by branch wise this is called schedule of clearing house.

 The instruments along with IDBA and house page are sent to the clearing house.3 Outward bills for collection (OBC): When General branch receives Chaque from other banks or other branches of same Bank is called OBC.2.  Incase of other branch if any instrument returned unpaid for any reason shall be given to the sending bank through General Branch with return memo. To send the bills to the paying bank the following procedure are maintained- Internship report on IFIC BANK LIMITED 30 .4. General branch will give an IDBA to the concerned branch.  For the amount of return Chaque IFIC. 3. 3. Finally a single debit voucher debiting IFIC general A/Cs department along with third copy of IDBA and deposits slips.2 Inwards Clearing :  The Chaque or other instruments drawn on branch received from other banks through clearing house are checked whether they are crossed or endorsed properly.  For payment of the instrument all formalities for Chaque payment are maintained. The total of the schedules is taken and agreed with that of the register.4.  The house page is prepared in duplicate.2.

against the OBC No.A no. and prepares a credit advice to the collecting bank. signature of the officers and their P.  After getting advice from the paying bank the proceeds of the Cheques is deposited to the account of the customer. and gives necessary entries to the register.2.  Counter foil is given back to the customer.  The manager sends the said instrument to the bills in charge. the bank maintains the following procedures Cheques along with forwarding schedules are received by the manager. Only account holders Cheques are received.  After realization the amount from the customer the officer sanctions IBC No.  The banker presents the Cheques to the customers.  It is received with the pay-in-slip.  Necessary entries are given to the concerned register.  Pay-in-slip is kept in OBC outstanding file.4.4 Inwards bills for collection (IBC): For the inward bills for collection.  Monthly statement is prepared if the outstanding is more than two months.  Cheques are duly endorsed. 3. Internship report on IFIC BANK LIMITED 31 .  Balancing is done for the outstanding amount.  Forwarding schedule is prepared and attached with the Cheques and sent to the paying bank.  The bills in charge examine the endorsements.

Each day some cash i. After receiving the instrument the cash officer should Cheque it for any apparent discrepancy. Net figure of this cash receipts and payments are added to the opening cash balance. 3.1 Function of cash department: • • • Cash Payment Chaque collection process Cash receipt 3.5.e. 2. Internship report on IFIC BANK LIMITED 32 . It will be posted in the computer to debit the account. This closing balance is then added to the vault. He will examine the apartment tenor of the Cheque very carefully and compare the signature of the Cheque with the SS Card.5.2 Cash Payment: Steps are as follows: 1. The figure is called closing balance. And this is the final cash balance figure at the end of any particular day. The cash officer will send the instrument to the collection officer. 3.5 Cash Transaction Section Cash Transaction department starts the day with cash in vault. amount in words & figure etc. date of the check. opening cash balance are transferred the cash officer from the cash vault.3.

it will be given back to the bearer marking the cause of the “Return Memo”. if fund is available. If any Cheque is returned unpaid. Once the cheque is cancelled that is Okayed for payment The officer compares the signature of the customer with that on the signature card in the software. Then he makes an entry Internship report on IFIC BANK LIMITED of the cheque and cancels it by singing across the 33 cheque . 9. The officer receives it and issues the customer in a token The officer now verifies the ledger of the customer. 10. 7. 5. 11. The In charge will cheek the entries and instrument to find out the correctness of the payment and put an initial against each entry. Then he will affix ‘CASH PAID’ seal. 3. he passes the cheque to the second officer. the cancellation officer will cancel the Cheque and put a “PAY CASH” seal. 12. If the customer’s A/C position is O. 6.4. 5000/-. After getting the cancelled instrument the cash officer will pay the cash to the party.3 The procedure of Paying Cash at the Counter: Customer places the cheque to the officer.k. At the end of the day the total amount entered in the paying cash register will agree with the total paid amount.5. He will make on entry into the ledger and write the denominations on the backside of the Cheque. 8. Finally the instruments will be sent to the accounts department. Double cancellations are necessary for the amount more than tk.

After credited cashier return the deposit slip to the customer.4 The Procedure of receiving Cash at the counter: Customers place the deposit slip & amount to the cashier Cashier counts the amount of money first and then cashier pass the deposit slip to the another officer with a seal of received.Cashier enters the amount of the cheque in the software & pays appropriate amount to the customer. It records the profit & loss Internship report on IFIC BANK LIMITED 34 . 3.6 Accounts Department: Accounts Department is play most vital role in Banking. 3. Accounts Department is a department with which each and every department is related.5. the cashier credited the amount to the customer. After verifying the receipt.

Weekly Position 11. Transfer Book 2. Supplementary 3. Half-Yearly Statement 15. Daily Position Statement 10. Salary Register g. Salary Statement 14. Daily Statement of Affairs 9. Income Ledger b. General Ledger 5. Provisional Income and Expenditure 12. Sundry Asset Ledger e. Suspense A/C Ledger f. The following ledgers are maintained and statements are prepared in the Accounts Department1. Annual Closing Balance Chapter 6 Recommendations & Conclusion Internship report on IFIC BANK LIMITED 35 . Salary Disbursement Register 6. Clean Cash Book 4. Sundry Deposit Ledger d. Accounts Monthly Statement 13. Subsidiary Ledger a. Voucher Register 7. The functions of it are theoretical & computerized based. Expenditure Ledger c. Balance Book 8.A/C and statement of assets and liabilities by applying “Golden Rules” of book-keeping.

I have found a strong effort made by the officials of Kawranbazar branch to comply with the guideline issued by Bangladesh Bank and Head office in order to mitigate the risk of lending. to make their lending risk more optimal and more smooth recovery path they can do the followings: Improvement of Credit Risk Grading Systems: An industry wise integrated Credit Risk Grading system should be developed. So that risk can measure for different industry of business. Mohakhali Branch. So that. Single credit proposal should not approve without having Clean CIB Report from Bangladesh Bank.Recommendations After studying and Analyzing all the available data and documents of IFIC Bank Limited. related to credit risk management. Sufficient Workforce & allocate a standard Risk Assessment time: Sufficient risk managers should recruit in Credit Risk Management Division and a standard time should allocate for a credit proposal analysis. risk managers could go through the credit proposal for risk managers and have sufficient time for better analysis and assessment Credit Report: Credit report should obtain for all sort of credit proposal. However there are scope of development. Development of tools and techniques for Credit Risk Management: Internship report on IFIC BANK LIMITED 36 .

Reduce of Political pressure & influence of the Directors and Management: It is unavoidable of Political pressure & influence of the Directors and Management. Adequate information & Documents: Adequate information and documents should prove in the credit proposal so that Risk Managers can make their decision with a very minimum time. So. So. Banks should have a regular training and development program so that a risk manager does know every risk matter and assessment techniques. Consequently some techniques should introduce so that those pressure and influence will be reduced. new and effective credit risk management tools and techniques should be introduced by the help of IT Division. Internship report on IFIC BANK LIMITED 37 . Build up Co-ordination with others related Division: Banks moves by a team effort. strong co-ordination with the related divisions and departments is very important.e. CIB which are not sufficient for all kinds of risk management. Development & Training: Training is the key factor for development of the risk manager’s skills. CRG.Banks has a few numbers of tools and techniques for credit risk assessment i.

leverage and profitability must be analyzed.Financial Analysis: An analysis of a minimum of 3 years historical financial statements of the borrower should be presented. Strong Security Coverage: Adequate collateral security should obtain by the borrower as security. Supplier – Buyer Analysis: Any customer or supplier concentration shall be addressed. guarantor’s financial statement should also be analyzed. strike. Where reliance is placed on a corporate guarantor. Specifically. cash flow and the strength of the borrower’s balance sheet. as these could have a significant impact on the future viability of the borrower. So that in case of bank may save from financial losses. banks and borrower can save themselves from financial losses. It must be clearly stated whether or not the application/proposal is in compliance with Bank’s Credit Policy lending guidelines. Insurance Coverage: Insurance coverage should obtain for every funded and non funded credit facility. cash flow. So that in case of uncertainty and damage like fire. The analysis should address the duality and sustainability of earnings. Internship report on IFIC BANK LIMITED 38 . Adherence to Lending Guidelines: The Credit Applications/ Appraisals must be prepared in line with Bank’s lending guidelines. riot etc.

Bank should develop the relationship with the customer. Conclusion Internship report on IFIC BANK LIMITED 39 . customer satisfaction is very much important. Kawranbazar Branch if these are attained in case of credit risk management. As a result Special Mention Accounts and deteriorating credit are increasing day by day. Develop Customer Banker relationship: Today is the time for relationship banking & for better performance. As a result nonperforming loan will be reduced as well as the financing will steer the wheel strongly in the economy of Bangladesh.Follow-up and monitoring: Credit quality depends on close follow-up and monitoring of loans. The follow-up and monitoring of loans is not strong here. The above recommendations will be advantageous for the IFIC Bank Ltd. So.

Diversify export. boost up export earning. Proper credit management can give the strength a bank to increase the flow of credit facility. and credit recovery should be smoothen. and will be able to extend the credit facility to different sectors. increase the inflow of FDI.Bank and financial institutions can be compared with the heart of an economy. it is growing in every aspect in every day. to help to continue this growth credit flow. if the circulation of money is not normal the economic growth will be hurdled. credit circulation. set up new industrial unit. so in coming days I hope bank and financial institutions of Bangladesh will be more efficient in managing credit risk. Bangladesh is a growing economy. Internship report on IFIC BANK LIMITED 40 . and increase the productivity credit facility must be extended. In order to increase more employment.

Eugene F.  Annual Report of IFIC 2005-2010  www.  “Bank Company law”. “Essential of Managerial Finance”.  “Bangladesh Bank Order. Brigham. Bangladesh Bank. (1998-99. David Van House. Bangladesh Bank.com Internship report on IFIC BANK LIMITED 41 . 127 of 1972). Department of Public Relations and Publications. (President Order No.centralbank.(13th edition).ificbankbd.  Annual repot of the Securities and Exchange Commission. Banking and Financial Markets” – (2nd Edition). 1991. a division of Harcourt Collage Publishers  Ministry of Finance (MOF). 1999-2000). Thomson south-western  Scott Besley. “Money.Bibliography  Roger LeRoy Miller.org  www. 1972”.com  www.Bangladesh-Bank. Activities of Bank Financial Institutions. the Dryden press. Government of Bangladesh (GOB).

C D.D DF EWS EPB FBP FDR GATT GOB HOCC IBCA IFIC KYC LIM L/C LTR MICR NPL NBFI PAD Asian Development Bank Automated Teller Machine Account Branch Credit Committee Bill of Exchange/Bill of Entry Capital Adequacy Ratio Credit Information Bureau Credit Line Proposal Credit Risk Grading Credit Risk Management Documentary Credit Demand Draft Doubtful Early Warning Signals Export Promotion Bureau Foreign Bill Purchase Fixed Deposit Receipt General Agreement for Tariffs and Trade Government of Bangladesh Head Office Credit Committee Inter Branch Credit Advice International Finance Investment & Commerce Bank Limited Know Your Customer Loan Against Imported Merchandise Latter of Credit Loan Against Trust Receipt Magnetic Ink Character Recognition Non-Performing Loan Non Bank Financial Institute Payment Against Document Elaboration Internship report on IFIC BANK LIMITED 42 .Related Acronyms Acronyms ADB ATM A/C BCC BE CAR CIB CLP CRG CRM D.

P Pre-Shipment Inspection Packing Credit Statutory Liquidity Reserve Society for World-Wide Inter bank Financial Telecommunication Small & Medium Enterprise Strength. Sub-Standard Special Drawing Rights Suspicious Transaction Report Secured Over Draft Telegraphic Transfer Transaction Profile Internship report on IFIC BANK LIMITED 43 .T T. Threats. Weakness. Opportunities.PSI PC SLR SWIFT SME SWOT SS SDR STR SOD T.

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