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Internship Report
on
“Practices on General Banking”
A study on Jamuna Bank Limited Jubilee Road islami Banking Branch Chittagong
CHAPTER-One
1.1 INTRODUCTION:-
A bank is a financial intermediary that accepts deposits and channels those deposits into lending activities. Banks are a fundamental component of the financial system, and are also active players in financial markets. The essential role of a bank is to connect those who have capital (such as investors or depositors), with those who seek capital. Today’s world is changing very rapidly as new business are emerging by placing the old ones. Towards the end of century, people feel a growing uneasiness about the future. Many countries suffer from chronic high employment, a persistent deficit and deteriorating purchasing power. Like the other business, banking practices are also changing at an incredible pace. To deal with this changing environment infusion of professionalism into banking services along with proper diversification of products & services is essential.
Jamuna bank ltd(JBL), Jubilee road Islami Banking Branch, Chittagong is a bank of new generation and is one step ahead from other banks not only in making profit but also in serving people in an efficient way on the basis of Shariah. To meet the customer needs and demand, the bank has launched some lucrative products & services that show their deep orientation toward marketing philosophies.
General banking is the starting point of all the banking operations. It is the department, which provides day-to-day services to the customers. Every day it receives deposits from the customers and meets their demand for cash by honoring cheques. It opens new accounts, remit funds, issue bank drafts and pay orders etc. Because bank is a financial organization, so as a part of service organization this department should satisfy to their client with the best services. Banking goodwill will be effected if customer service department cannot satisfy to their clients properly. Since bank is confined to provide the service every day, general banking is also known as ‘retail banking’.
1.2 Objectives of the Report:
The main objective of writing this report is to fulfill the partial requirements of the MBA program.
The objective of the study can briefly be stated as following:
Ø To know about the general banking system of JBL
Ø To know the organizational framework of the bank
Ø To apply theoretical knowledge in the practical field
Ø To identify the problems related to the general banking
Ø To suggest ways of improving the service standard that accommodates a rapidly growing customer volume
1.3 METHODOLOGY OF THE STUDY:-
The data needed for conducting the study have been collected from the primary sources as well as secondary sources. In this regard information have been collected from the publish reports, working in seminar library. Moreover in collecting the necessary data, care has been taken so that all the variables that may in some way can’t affect the objectives of the study. The information that I used in this study is collected by the following way:
The sources of primary and secondary data may be shown as under:
A. Primary Sources:
· Practical Deskwork.
· Observation in the organization.
· Face to face contact with the officials.
· Face to face conversation with the clients.
B. Secondary Sources:
· Manuals of JBL
· Different publications on banks.
· Annual Report (2008, 2009) of the bank.
· Past research books & journals.
· Documents of General banking
The collected data and information have been tabulated, processed, analyzed and graphically presented in order to make the study more informative, useful and purposeful.
1.4 SCOPE OF THE STUDY:-
As Jamuna Bank Jubilee road branch is the islami banking branch, the report focuses on the banking activities based on Islamic Shariah.
1.5 Limitations of the Study:-
Despite of wholehearted effort to make the report more meaningful there may be some limitations:
These are as follows:
¨ The present study emphasize on “General Banking System”. 3 Month is not enough time to cover the topics
¨ For the lack of our practical knowledge, some shortcoming may be available in this report.
¨ It is not possible to get all sorts of information due to official confidentiality.
However I have tried my best to make the report most representative.
CHAPTER 2
Overview of Jamuna Bank Ltd.
2.1 PROFILE:
Jamuna Bank Limited has started its operation on 3rd June 2001 . And within short time it has reached at breakeven position. Coming into operating profit within such a short span of time by any commercial bank is a rare achievement.
The economic environment in which the bank came into existence was under strain resulting from a global economic slowdown. With the change of government in 2001, there were less economic activities due to deterioration of the major macroeconomic balances. The situation deteriorated further after the events of September 11, and the country’s manufacturing and export sectors were going down. The situation further worsened due to exclusion of “Third Generation” banks from access to low cost public funds. JBL was never dependent on government deposit, but the new policy raised the cost of deposits further and JBL could not escape from the indirect impact. In a situation like this, the Board of Directors did not make any compromise on the quality of assets of the bank. The management was able to generate steady growth in business. In the process JBL was able to maintain a satisfactory capital adequacy ratio. Bangladesh Bank’s new guidelines about limit on portfolio concentration have necessitated diversification of the bank’s investment. As a result small and medium enterprises have been receiving financial assistance.
JBL has improved its image in the society as an Islamic Bank. This resulted from the combined efforts and approach of the members of the Board of Directors, the dedication of the Managing Director and his term, and the way the bank served their valued clients.
To provide clientele services in respect of international trade it has wide correspondent banking relationship with local & foreign banks covering major trade & financial centers at home & abroad. The management is advised to improve the quality of human resources through continuous training and motivation. Steps are also taken towards making optimum use of IT. The bank has plans to open more branches to expand the network.
2.2 CORPORATE INFORMATION:
Name of the Company : Jamuna Bank Limited.
Legal Form : A Private Limited Company incorporate in
company act 1994.
Date of certificate of Incorporation : 2nd April 2001 .
Date of certificate of
Commencement of Business : 1st May 2001 .
Registered Office : Printers Building
5, Rajuk Avenue Dhaka .
Total Number of sponsor directors : 13
Number of Branches : 58
Website : www. jamunabankbd.com
CORPORATE SLOGAN:
Your Partner For Growth
2.3 Corporate Mission
MISSION
The Bank is committed to satisfying diverse needs of its customers through an array of products at a competitive price by using appropriate technology and providing timely service so that a sustainable growth, reasonable return and contribution to the development of the country can be ensured with a motivated and professional work-force.
VISION
To become a leading banking institution and to play a pivotal role in the development of the country.
STRATEGIES
Þ To manage and operate the Bank in the most efficient manner to enhance financial performance and to control cost of fund
Þ To strive for customer satisfaction through quality control and delivery of timely services
Þ To identify customers' credit and other banking needs and monitor their perception towards our performance in meeting those requirements.
Þ To review and update policies, procedures and practices to enhance the ability to extend better service to customers.
Þ To train and develop all employees and provide them adequate resources so that customers' needs can be reasonably addressed.
Þ To promote organizational effectiveness by openly communicating company plans, policies, practices and procedures to employees in a timely fashion
Þ To cultivate a working environment that fosters positive motivation for improved performance
Þ To diversify portfolio both in the retail and wholesale market
Þ To increase direct contact with customers in order to cultivate a closer relationship between the bank and its customers.
OBJECTIVES
Ø To earn and maintain CAMEL Rating 'Strong'
Ø To establish relationship banking and improve service quality through development of Strategic Marketing Plans.
Ø To remain one of the best banks in Bangladesh
Ø To introduce fully automated systems through integration of information technology.
Ø To ensure an adequate rate of return on investment.
Ø To keep risk position at an acceptable range (including any off balance sheet risk).
Ø To maintain adequate liquidity to meet maturing obligations and commitments.
Ø To maintain a healthy growth of business with desired image.
Ø To maintain adequate control systems and transparency in procedures.
Ø To develop and retain a quality work-force through an effective human Resources Management System.
Ø To ensure optimum utilization of all available resources.
Ø To pursue an effective system of management by ensuring compliance to ethical norms, transparency and accountability at all levels.
2.4 organizational sturture of JBL
Managing Director (M.D.)
Additional Managing Director (A.M.D.)
Senior Executive Vice President (S.E.V.P)
Executive Vice President (E.V.P)
Senior Vice President (S.V.P)
Vice President (V.P)
Senior –Assistant Vice President (S.A.V.P)
Assistant Vice President (A.V.P)
First Assistant Vice President (F.A.V.P)
Senior Executive Officer (S.E.O)
Executive Officer (E.O)
First Executive Officer (F.E.O)
Officer
2.5 JBL - AT PRESENT:
Over the years, JBL has built itself as one of the pillars of Bangladesh
a. Authorized Capital: The Authorized capital of the bank is Tk. 4000 million
b. Paid up Capital: The paid up capital is Tk. 1314.26 million
c. Reserve Fund & Other Reserve: The reserve fund of the bank is Tk.1995.36 million
d. Deposit: Deposit of the bank was Tk. 42356.20 million
e. Credit: Credit of the bank was Tk. 32687.75 million
f. Investment: Investment of the bank was Tk. 8503.44 million
g. Operating Income (2008): Operating income of the bank for the year is Tk.2010 million
2.6 Financial Products & Services of Jamuna Bank Limited
Bank is a service-oriented industry and deals with various financial products and services for financial gains. Jamuna Bank Limited is a full service Bank with adverse array of comprehensive range of carefully tailored financial services and customer friendly uncompleted banking products geared for the needs of all customers segments. Financial products and services products that JBL offers to its customers are mainly classified as under:
2.6.1 DEPOSIT PRODUCTS
Deposit products are those products that are collected from the customers to generate funds of the bank. The following deposit products that are launched by JBL:
q Mudaraba Savings A/C
q Al-Wadiah Current A/C (CD)
q Short Term Deposit A/C (STD)
q Fixed Deposit Receipt A/C (FDR)
v Deposit Schemes:
Ø Lakhapati Deposit
Ø Millionaire Deposit
Ø Kotipathi Deposit
Ø Double Growth
Ø Triple Growth
Ø Monthly Benefit
Ø Monthly Saving
Ø Marriage Deposit
Ø Education Scheme
2.6.2 LOAN PRODUCTS
JBL is offering the following loan and advance product to the client for financing different purpose that fulfill the requirements of the bank and have good return to the investment as well as satisfy the client. The loan and advance products are:
Ø Project Financing.
Ø Working Capital Financing
Ø Agricultural Financing
Ø Consumer Financing
Ø Lease Financing
Ø Hire Purchase
Ø SME Financing
Ø House Building
Ø Personal Loan For Women.
Ø Import Financing
Ø Export Financing
Ø Syndication Loan
2.6.3 REMITTANCE PRODUCTS:
JBL offers the following remittance products:
Ø Pay Order (PO )
Ø Demand Draft (DD)
Ø Outward Bills For Collection (OBC)
Ø Security deposit Receipt (SDR)
2.6.4 INTERNATIONAL BUSINESS PRODUCTS:
International Business Products that is offered by JBL are as under:
Ø Letter of Credit (L/C)
Ø Back to Back Letter of Credit (BTB L/C)
Ø Buying & Selling of Foreign Exchange
Ø Foreign Demand Draft (FDD)
Ø Foreign Telegraphic Transfer (FTT)
2.6.5 Other Service Products:
Ø International Trade Finance
Ø Corporate Banking
Ø Tele Banking
Ø SMS Banking
Ø Internet Banking
Ø 24 Hours Banking
2.7 Credit Rating Report:
Long Term
|
Short Term
| |
Rating – 2009
|
A 2
|
ST - 2
|
Rating - 2008
|
A -
|
ST - 3
|
Date of Rating
|
29 th April, 2010
| |
Credit rating Agency of Bangladesh (CRAB) upgrades long term credit rating of Jamuna Bank Limited (JBL) to “A 2” (pronounced as single A) from A- ( pronounced as A minus) and short term rating to “ST-2” from “ST-3” based on audited financials of 31 December, 2009.
Commercial Banks rated A 2 (Strong Capacity & High Quality) in the long term belong to “Strong Capacity” group. Banks rated A 2 have strong capacity to meet their financial commitments but are somewhat more susceptible to the adverse effects of changes in circumstance and economic conditions than commercial Banks in higher-rated categories. Banks rated in this category are judged to be of high quality and are subject to low credit risk.
Commercial Banks rated in the short term ST-2 (High Grade) category are considered to have strong capacity for timely repayment of obligations. Commercial Banks rated in this category are characterized with commendable position in terms of liquidity, internal fund generation and access to alternative sources of funds.
2.8 SOWT ANALYSIS OF THE BANK:
Internal factors:
1) Strengths
Ø Very good profit margin achieved by the last few years.
Ø It has well reputation in the market
Ø Efficient management practice in the bank.
Ø Good banker-customer relationship.
Ø Well Experienced Employee.
2) Weakness
Ø Inadequate IT infrastructure.
Ø Delay in quick decision-making.
Ø Insufficient promotional activities.
External factors:
3) Opportunities
Ø Credit card business.
Ø Scope of market penetration through diversified products and wide banking network.
Ø It can increase the advertising of the Bank.
4) Threats
Ø Increased competition in the market for public deposits.
Ø Government impose Tax & Vat on profit
Ø Maximum Bank converting into Islamic Banking system.
CHAPTER-3
3.1 BRIEF ON Jubilee Road Islami Banking branch, CHITTAGONG
As the report prepared on Jubilee Road Islami Banking branch, it is essential to get some information about this branch. Jubilee Road branch is the Islami Banking branch of the bank in Chittagong
3.1.1 LOCATION
JBL is located at Jubilee Road, one of the most busiest commercial location of Chittagong
3.1.2 CUSTOMERS
The customer base of JBL, Jubilee road Islamic banking branch, Chittagong
3.2 ORGANIZATION STRUCTURE OF JBL
(Jubilee Road Islamic Banking Branch)
Senior Assistant Vice President (S.A.V.P.)Junior Assistant Vice President (A.V.P.)
Senior Executive Officer(S.E.O.)
Executive Officer (E.O.)
First Executive Officer (F.E.O.)
Officer
3.3 PRESENT POSITION (As on 30st June)
(TK. In Million)
Particulars
|
Tk.
|
Deposit
|
1013.14
|
Advance
|
714.03
|
Letter of credit
|
805
|
Export
|
1857.45
|
Import
|
736.02
|
Import (Back to Back L/C)
|
121.65
|
Income
|
770.90
|
Expenditure
|
521.78
|
Profit
|
249.13
|
3.4 DEPARTMENT OF THE BRANCH: There are several departments of the branch that help for the smooth running of the banking business
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Account opening & customer service Cash
Clearing Ledger/ deposit
Remittance Accounts
Foreign Exchange Loan and Advance
CHAPTER 4
GENERAL BANKING DEPARTMENT
4.1 INTRODUCTION:
All business concerns earn a profit through selling either a product or a service. A bank does not produce a tangible product to sell but does offer a variety of financial services to its customers.
General banking is the starting point of all the banking operations. It is the department, which provides day-to-day services to the customers. Every day it receives deposits from the customers and meets their demand for cash by honoring cheques. It opens new accounts, remit funds, issue bank drafts and pay orders etc. Because bank is a financial organization, so as a part of service organization this department should satisfy to their client with the best services. Banking goodwill will be effected if customer service department cannot satisfy to their clients properly. Since bank is confined to provide the service every day, general banking is also known as ‘retail banking’.
The following sections are performing under this department:-
Ø Deposit & Cheque Section
Ø Cash Transaction Section
Ø Local Remittance
Ø Clearing & Collection Section
Ø Accounts & Accounting Procedures of JBL
Ø Customer Service Desk
4.2 DEPOSIT & CHEQUE SECTION:
A commercial bank is a lender of borrowed money. It borrows from those who have surplus fund, and lend to those who are in need of temporary a accommodation. Banking business first made its acceptance in the process of accepting deposits and up till now it remains principal function of a commercial bank. The following things done in this section:
I. Accepting of deposit
II. Opening of account
III. Cheque book issue
IV. Transfer of account
V. Closing of account
4.2.1 ACCEPTING OF DEPOSIT:
Accepting deposits is one of the two classic functions of commercial banks. Initially all the accounts are opened with a deposit of money by the customer and hence these accounts are called deposits accounts. The deposits those are accepted by JBL, Jubilee Road branch may be classified in to:
A) Demand Deposit. B) Time Deposits.
(A) Demand Deposits:
The amount in accounts are payable on demand so it is called demand deposit account. JBL accepts demand deposits through the opening of -
a) Al- wadiah Current account b) Mudarabah Savings account
(B) Time Deposits:
A deposit which is payable at a fixed date or after a period of notice is a time deposit. JBL accepts time deposits through---
a) Mudarabah Term Deposit (FDR)
b) Short Term Deposit (STD)
c) Mudarabah Monthly Savings Scheme (MSS)
d) Lakhpati Deposit Scheme
e) Millionaire Deposit Scheme
f) Kotipati Deposit Scheme
g) Monthly benefit scheme
h) Mudarabah Double Growth Scheme
i) Mudarabah Triple Growth Scheme
4.2.2 ACCOUNT OPENING SECTION:
It is said that, there is no banker customer relationship if there is no A/C of a person in that bank. By opening an a/c banker and customer create a contractual relationship. However, selection of customer for opening an account is very crucial for a Bank.
4.2.2.1 ACCOUNT OPENING PROCEDURE IN FLOW CHART:
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4.2.2.2 PROCESS OF OPENING OF CURRENT & SAVINGS A/C:
While opening new accounts due diligence must be conducted in order to ascertain the identification o the account holder and the beneficiaries/ nominees. This may be done by obtaining any one of the following :
a) Introduction from a bonafide person whose identity has been duly verified
b) Copy of passport
c) Driving License
d) TIN Registration Certificate and
e) Voter ID card.
Passport size photograph of the account holder & Nominee along with Transaction Profile and Known Your Customer Form (KYC) to be obtained. Thanks letter to be sent to the customer to his/her present address. Contact addresses should be verified. Following formalities are required to be completed before a current or a savings account is opened in a bank.
- Application on the prescribed form
- Introduction of the Applicant
- Specimen Signature
- Mandate for an operation of the account by an agent
- Opening the account
After the above formalities are over, the banker opens an account in the name of the applicant. It is essential that the applicant deposit some amount at the time of opening the account. General the minimum amount to be deposited initially is TK.500/- in case of savings bank account and TK.1000/- in case of a current account. It may vary from bank to bank.
The bank then provides the customer with
a) A pay-in-slip
b) A cheque book
c) Statement of account
a)Al Wadiah Current account
JBL operates Al-Wadiah Current A/C according to the principles of Al-Wadiah which is based on Islamic Shariah. A current account may be opened by an Individual/Joint, Proprietorship, Firm, Partnership Firm, Limited Company, and Club, Society or Association etc. Frequent transactions are (deposits as well as withdrawal) allowed in this type of account. A current a/c holder can draw checks on his account, any amount, and any numbers of times in a day as the balance in his account permits
Criteria of current account followed by JBL
Ø Generally opened by businessmen, government and semi-government organizations; with proper introduction.
Ø No interest is provided for deposited amount
Ø Overdraft is Allowed in this account;
Ø Minimum opening balance is TK.2000
A minimum balance of Tk.25000/- has to be maintained
b) Mudarabah Savings account
Individuals for savings purposes open this type of account. Current interest rate of these accounts is 5% per annum. Interest on SB account is calculated and accrued monthly and credited to the account half yearly. Interest calculation is made for each month based on the lowest balance at credit of an account in that month.
Criteria of savings account followed by JBL
Ø An appropriate introduction is required for opening the A/C;
Ø Frequent withdrawal is not encouraged;
Ø 7 days notice is required for withdrawal of large amount;
Ø Minimum amount of TK.1000 is required as initial deposit;
Ø Depositor will get interest on the amount deposited in his/her account irrespective of any limit;
SYNOPSIS ON TYPES OF ACCOUNT:
a) Individual A/C:
Any person of sound mind having crossed 18 years of age and capable of entering into a contract is eligible to open an individual account in his name
b) Joint Account:
Two or more persons may open Account jointly. The banker should consider the following points while opening and dealing with a joint account:-
c) Minor’s Account:
Person under the age of 18 years is a minor. A minor having no capacity to enter into a binding contract is not allowed to open account by him directly.
d) Proprietary Concern:-
Account of the Proprietary concern should be opened and operated by the proprietor himself like other accounts, proper introductory reference to be obtained.
e) Partnership Firm:-
Account of the partnership firm may be opened in two ways:-
a. Where manager is not authorized to operate
b. Where manager is not authorized to operate. But account must be opened with her by authorized partner(s) or by all the partners.
f) Private Limited Company:- A corporate body formed & registered under company’s act 1913 with limited members & liability having certificate of incorporation given by register, joint stock companies & memorandum of association & articles of association.
g) Public Limited Company:- A corporate body formed & registered under company’s act 1913 with limited liability of the shareholders & with mo upper ceiling of having both certificate of incorporation & certificate of commencement given by register, joint stock companies. It must have memorandum of association & articles of association, autonomous bodies.
PROCESS OF OPENING DEPOSIT ACCOUNTS:
I. Fixed Deposit (FDR):-
Before opening a Fixed Deposit Account a customer has to fill up an application form which contains Amount in figures, Beneficiary’s name and address, Period, Rate of interest, Date of issue, Date of maturity, How the account will be operated ( singly or jointly), Signature(s), F.D.R. No, Special instructions (if any)
After fulfilling the above information and depositing the amount, FDR account is opened and a FDR receipt is issued and it is recorded in the FDR Register which contains FDR account no, FDR (Fixed Deposit Receipt) no, Name of the FDR holder with address, Maturity period, Maturity date, and Interest rate.
In case of Fixed Deposit Account the bank does not have to maintain a cash reserve. So JBL offers 8.5% interest rate in Fixed Deposit accounts.
Loss of F.D.R.:
In case of a lost FDR, the customer is asked to record a GD (General Diary) in the nearest Police Station. After that, the customer has to furnish an Indemnity Bond to JBL a duplicate FDR is then issued to the customer by the bank
Renewal of FDR:
The FDR becomes automatically renewed for like periods and amounts, unless this are withdrawn by the depositor or, the bank notifies the depositor in writing at least 15 days in advance of the original Or, any renewed maturity date (s) of its desire to terminate the account or change any term and condition of the account
II. Short Term Deposit (STD)
In Short Term Deposit account, the deposit should be kept for at least seven days to get interest. The interest offered for STD is less than that of savings deposit. In JBL, various big companies, organizations, Government Departments keep money in STD accounts. Frequent withdrawal is discouraged and requires prior notice. STD Account opening procedure is similar to that of the saving account
Interest rate for STD account----------4.00% per annum
In JBL, usually customers give an instruction to the Bank that their current account will be debited whenever its deposited amount crosses a certain limit and this amount will be transferred to the STD account.
Special Savings Schemes (SSS):-
Special saving scheme (SSS) is more familiar as Deposit Pension Scheme. JBL offer it to its customer to deposit fixed amount of money each month for a definite period of time, normally for 5 to 10 years.
In JBL, a Depositor can open any SSS account for deposit of TK.500/-, TK.1000/-, TK.1500/-, TK.2000/-, TK.3000/-, TK.5000/- and TK.10000/- in each month. The depositor will have to deposit the fixed amount of money by the 20th day of each month. Customer may deposit his money either in cash or in cheque. The depositor can select more than one nominee for this account..
A Depositor can withdraw the total amount of deposit with interest at a time after a specific period of 3, 5 or 10 years.
v Mudaraba Monthly benefit Scheme:
Deposit
|
Tenor
|
Monthly Profit
|
1,00,000/-
|
6 Months
|
765/-
|
1,00,000/-
|
1 Year
|
785/-
|
v Mudaraba Monthly Savings Scheme:
Monthly Deposit
|
3(Three) Years
|
5 (Five) Years
|
10 (Ten) Years
|
Total Amount
|
Total Amount
|
Total Amount
| |
500
|
20,570
|
37,955
|
99,535
|
1000
|
41,145
|
75,915
|
1,99,075
|
1500
|
61,720
|
1,13,875
|
2,98,615
|
2000
|
82,300
|
1,51,835
|
3,98,155
|
3000
|
1,23,150
|
2,27,760
|
5,97,235
|
5000
|
2,05,760
|
3,79,600
|
9,95,400
|
10000
|
4,11,520
|
7,59,905
|
19,90,800
|
v Mudaraba Kotipati ,Millionaire & Lakhpati Deposit Scheme:
Tenor
|
Kotipati
|
Millionaire
|
Lakhpati
|
Monthly
Installment
|
Monthly
Installment
|
Monthly
Installment
| |
3 years
|
2,44,845
|
24,305
|
2,435
|
4 years
|
1,75,290
|
17,370
|
1,735
|
5 years
|
1,33,635
|
13,225
|
1,315
|
6 years
|
1,05,935
|
10,480
| |
7 years
|
86,220
|
8,510
| |
10 years
|
51,680
|
5,085
| |
12 years
|
38,540
|
3,775
| |
15 years
|
25,960
|
2,530
| |
Payable Amount
|
1,00,00,000/-
|
10,00,000/-
|
1,00,000/-
|
v Mudaraba Double Growth Deposit Scheme: It will take 7 Years 4 Months to double a certain amount.
v Mudaraba Triple Growth Deposit Scheme: It will take 11 Years 8 Months to triple a certain amount.
4.2.3 ISSUING CHEQUE BOOK TO THE CUSTOMER:
4.2.3.1 ISSUE OF FRESH CHEQUE BOOK:
Fresh checkbook issue to the account holder only against requisition on the prescribed requisition slip attached with the checkbook issued earlier, after proper verification of the signature of the account holder personally or to his duly authorized representative against proper acknowledgment.
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4.2.3.2 ISSUE OF DUPLICATE CHEQUE BOOK
Duplicate checkbook instead of lost one should be issued only when an A/C holder personally approaches the Bank with an application Letter of Indemnity in the prescribed Performa agreeing to indemnify the Bank for the lost cheque book. Fresh check Book in lieu of lost one should be issued after verification of the signature of the Account holder from the Specimen signature card and on realization of required Excise duty only with prior approval of manager of the branch. Cheque series number of the new checkbook should be recorded in ledger card and signature card as usual. Series number of lost checkbook should be recorded in the stop payment register and caution should be exercised to guard against fraudulent payment.
4.2.3.3 STOP PAYMENT OF CHEQUE:
A banker can stop payment of cheque of his customer under following considerable circumstances
Ø Firstly the account holder will apply to stop the payment of his cheque
Ø There is a register for this purpose. It is kept by the authorized officer.
Ø The officer will see the condition of account and verify everything.
Ø In the ledger book, the officer will marked with red ink and the cheque will not be paid.
4.2.4 TRANSFER OF AN ACCOUNT:
Þ The customer submits an application mentioning the name of the branch to which he wants the account to be transferred.
Þ His signature cards, advice of new account and all relevant documents are sent to that branch through registered post.
Þ The balance standing at credit in customer’s account is sent to the other branch through Inter Branch Credit Advice (IBCA).
Þ No exchange should be charged on such transfer.
Þ Attention is also given in this connection.
4.2.5 CLOSING THE ACCOUNT:
Upon the request of a customer, an account can be closed. After receiving an application from the customer to close an Account, the following procedure is followed by a banker. The customer should be asked to draw the final cheque for the amount standing to the credit of his a/c less the amount of closing and other incidental charges and surrender the unused cheque leaves. The a/c should be debited for the account closing charges etc. and an authorized officer of the Bank should destroy unused cheque leaves.
In case of joint a/c, the application for closing the a/c should be signed by all the joint holders.
A banker can also close the account of his customer or stop the operation of the account under following considerable circumstances:
Þ Death of customer.
Þ Customer’s insanity and insolvency.
Þ Order of the court(Garnishee order)
Þ Specific charge for fraud forgery.
Þ 4.3 CASH SECTION
Cash is a liquid asset. It is cost incurring but itself non-earning and risky. So, banker should know how to manage the cash property to turn it into earning asset. Its management is very important from the following point of view:-
v Safety and security Cash.
v Proper utilization of Cash.
v Cash counter service Development
The following are the steps related to cash handing at branch level:-
1. Receiving of cash
2. Payment of cash
3. Daily balancing of cash
4. Scrutiny of cash
5. Safe keeping of cash
6. Cash remittance
7. Receiving and disposal of Mutilated Notes
To over come all these steps successfully Book of Instruction and time-to-time published circulars should be followed meticulously.
4.3.1 RECEIVING OF CASH:
Receipt of cash is the source of cash at branch. It may be from customer, from central bank, from any other bank or any other branch of the same bank.
Receiving Process:-
Ø Checking of deposit vouchers Account Amount Word and Figures.
Ø Count the Cash if possible manually or by the counting machine.
Ø Check the Notes- Mutilated, Mismatched or forged.
Ø Put signature in the deposit voucher including counter foil.
Ø Pass on the credit voucher with counter foil to the receiving cashier.
Ø At the close of business hour sum up the register and tally it with the Receiving registers.
Ø Cancel the un- received figure and put signature.
Ø Totaled the entries and match it with the receiving total.
Ø Count the no. of vouchers and write in stamped case and put signature.
Ø Checked by officer and countersigned.
Cash is used by a bank for the payment to its customer through Cheque, Draft, PO , PS, TR, TTR, SDR, FDR, etc. The surplus cash is remitted to cash feeding branch.
4.3.2 PAYMENT OF CASH
Process:-
Ø Every payment must be paid in due course.
Ø Scrutiny of the instrument before payment,
Ø Passed for payment by canceling officer.
Ø Amount, date, endorsement/order/bearer.
Ø Obtain bearer signature on the backside of the instrument.
Ø Tally the signature with the same obtained at the time to token, Release tally book.
Ø Write denomination on backside of the instrument.
Ø Affix cash paid stamp no. 26 in the face of the instrument.
Ø Entry the figure of the instrument in paying cashier book no.
Ø Return the un-paid instruments.
Ø Total the tally book.
Ø Total the entries and balance it with the token and tally total.
Ø Write in word the total a mount and put signature.
Ø Release of paid instrument from the paying cashier book.
Ø Send the vouchers to the respective department.
4.3.3 CASH BALANCING:
All employee related to cash must ensure the balancing of cash has done correctly on daily basis. For balancing of cash following works have to perform:-
Þ All cash register must be totaled and duly written in words and signed.
Þ Balancing them with each other.
Þ All register must be duly counter signed by checking officer.
Þ Balancing the register with the physical cash.
Þ Pass voucher if any surplus or short cash.
Þ Prepare cash position memo.
Þ Write cash balancing book.
Þ Ensure accounting of balance is correct.
Þ Prepare cash cum Day Book.
In the computerized branch hard copy “Day End” position is to be signed by cash in charges and cash officer.
4.4 REMITTANCE:
Remittance of fund means transfer of money from one place to another. The Bank remits fund through the network of their branches throughout the entire country and thus the bank serves as the best medium for remittances of funds. These sorts of activities of the bank, therefore, reduce the individual difficulties of troubles of physical carrying of cash from one place to another.
Types of Remittance:
a) Inland b) Foreign
Modes of Remittance
a) DD – Demand Draft c) Security Deposit Receipt (SDR)
b) PO – Pay Order
Demand Draft (DD):
DD is a Negotiable Instrument. A DD is an order to pay money drawn by one office of the bank upon other office to the same bank for a sum of money payable to order on demand.
Issuance
- Filling of DD application form. (This form is treated as an application as well as a voucher)
- Commission to calculated as per BB rate and written on the space provided on the form. (1%, min Tk.15/-)
- Total amount due must be paid by the customer at the cash receive counter, after receiving the cashier will issue a voucher for the DD issue department.
- The Draft is prepared and entered in the draft issue register. The draft number is then written on the application form and the amount is protect graphed on the face of the draft.
- The vouchers along with the instrument and register are then sent to the department-in-Charge for checking and signature.
- Then all the documents are sent to the Branch In-Charge for second signature.
- After all signatures are complete, the draft is given to the customer and his / her signature must be taken on the counter foil.
- Preparing advice: An IBCA (For Demand Draft only) must be prepared, stating the details of the issued draft and must be sent to “Drawer Branch”, on the same day.
- Voucher to be passed: Dr. IDT (issued by cashier)
Cr. JBL General A/C
Cr. Commission on Remittance
Encashment
- When a draft is presented for payment, the following things must be checked:
a. DD is issued by JBL.
b. DD is drawn on your branch.
c. Amount is word and figures agree.
d. DD issue is not more than six months earlier.
- Verify the signature on the Draft, verify the test number if any.
- Then the draft is sent to the department in-charge for cancellation.
- After cancellation, payment is made to the customer.
- If the DD is placed before arrival of IBCA / Advice, then make payment by passing the following:
Dr. DD paid w/o Advice
Cr. Customer a/c
When the IBCA arrives then the following vouchers must be passed:
Dr. JBL General a/c
Cr. DD paid w/o Advice
- If the DD placed after arrival of IBCA / Advice, then make payment by passing the following vouchers:
Dr. JBL General a/c
Cr. DD payable a/c
Dr. DD payable a/c
Cr. Customer a/c
Pay Order (PO ):
A pay order is a written under, issued by a branch of bank, to pay a certain sum of money to a specific person or a bank. It may be said as to be a banker’s cheque as it is issued by a bank and payable by itself.
Issuance
- The application form must be filled up properly.
- Commission to be calculated as BB rules
Up to 10,000/- : Tk. 18/-(VAT Tk 3/-)
Tk. 10,000/- to Tk. 1,00,000/- : Tk. 29/-(VAT Tk 4)
100001/- to 500000 : Tk. 46/-(VAT Tk 6)
Above Tk. 500000 : Tk. 58/- (VAT Tk.8)
- Total amount due must be paid by the customer at the cash receive counter, after receiving the cashier will issue a voucher for the
- The Pay Order is prepared and entered in the
- The vouchers along with the instrument and register are then sent to the department-in-charge for checking and signature.
- Then all the documents are sent to the branch in-charge for second signature.
- After all signatures are complete, the Pay Order draft is given to the customer and his/her signature must be taken on the counter foil.
- Pass the following voucher:
Dr. Cash Or, Cheque
Cr. Pay Order Payable a/c
Cr. Commission on Remittance
Encashment:
a. When a Pay Order is presented for payment, the following things must be checked scrupulously:
I. Pay Order is issued by your branch.
II. Amount word and figure agree.
b. Pay Order issue register must be update by marketing that PO as paid.
c. Then the PO is sent to the department in-charge for cancellation.
d. Pass the following voucher and make payment:
Dr. Pay Order Payable a/c
Cr. Client a/c
Issues to remember:
- A
- Before making payment the signature of issuing officers should be verified and the date of payment should marked in the register.
- If the purchaser requests for cancellation of the
- A
4.5 CLEARING SECTION:
Jamuna Bank Ltd. ,Jubilee Road Islami Banking branch receives different types of instruments, such as cheque, PO , DD etc. from its customers for collection. It also pays on behalf of its customers for those instruments that come to it through clearing house. When instruments of JBL are sent for collection or received for payment through clearing house it is called Inter Branch Collection or IBC. These are treated in a little different manner than instruments of other banks.
Outward clearing bills
It refers the instruments drawn on the other Banks received by the JBL. They are of three kinds.
v Cheques drawn on another branch of JBL. The settlement process
 |
Accounting entry
Party a/c : Dr.
IBDA : Cr.
v Checks drawn on another Bank, which is situated within clearing house area.
Accounting Entry
Party A/C : Dr.
IBDA : Cr.
Outward bills for collection
Checks drawn on another Bank or a branch of JBL which is situated outside the clearing house area. These bills are called OBC. The process of collection is described below.
ë If the bill is drawn on a branch of JBL:
 | |||
 | |||
ë If the bill is drawn on another Bank and there is a branch of JBL:
ë If the bill is drawn on another Bank but there is no branch of JBL :
Accounting Entry
Party A/C : Dr.
Suspense clearing adjustment : Cr.
If the bills are collected by the drawer’s bank, the drawer’s branch sends a D.D. to the collecting bank. The customer’s A/C is debited for the DD charge. The following entries are given for sending the D.D.:
Clearing A/C : Dr
Customer A/C : Cr.
And the following entries are given for the charges:
Customer A/C : Dr.
Income A/C Commission : Cr.
Postage : Cr.
In either case, OBC number is given.
PROCEDURE
¨ Depositing the cheque along with deposit-slip;
¨ Officer checks the essential features of the instrument and whether the deposit in slip is filled accordingly or not;
¨ Crossing of the cheques are done indicating Principal Branch as collecting bank;
¨ Endorsement “Payee’s A/C will be Credited on realization” is given;
¨ Entries are given in the Outward Clearing Register;
¨ Then the officer separates the instrument from the deposit in slip. Deposit in slip is kept in the bank and the instrument is sent for clearing;
¨ Messenger sends these instruments to the clearinghouse;
Inward clearing bills
It refers the instrument drawn on JBL, Jubilee Road Islami banking Branch received from other Banks in the clearing house by the representative . Settlement process is as follows:
 |
Necessary entry passed by this branch:
Respective A/C : Dr
Head office A/C (Main Br) : Cr
If cheques are returned –
Jubilee Road Islami banking Branch received from Branch sends an IBDA to
Principle Branch.
Necessary entry:
Head office A/C (Main Br) : Dr.
Respective A/C : Cr.
Procedure
¨ Firstly the instrument is entered into the clearing register, when it is sent to the bank via clearinghouse;
¨ The officer verifies the instruments thoroughly before it sent to the computer section for posting;
¨ If any kind of error is found in any instrument it is dishonored and sent back with appropriate reason for doing so;
¨ Instruments may dishonor for insufficiency of fund;
The information is then sending to the clearinghouse for taking appropriate action;
4.6 ACCOUNTS SECTION:
In banking business transactions are done every day and these transactions are to be recorded properly and systematically as the banks deal with the depositors’ money. Any deviation in proper recording may hamper public confidence and the bank has to suffer a lot. Improper recording of transactions will lead to the mismatch in the debit side and credit side. To avoid these mishaps, the bank provides a separate department whose function is to check the mistakes in passing vouchers or wrong entries or fraud or forgery. This department is called Accounts Department.
Besides these, the branch has to prepare some internal statements as well as some statutory statements, which are to be submitted to the Central Bank and the Head Office. This department prepares all these statements.
FUNCTIONS OF ACCOUNTS DEPARTMENT:
Function:
- To prepared and maintain daily input journal, proof sheet, and validation report.
- To prepare flash report daily liquidity position.
- Other miscellaneous work of the department.
- Daily statement of affairs.
- Original of responding.
- Financial control of the bank is done through this department.
- Test agreed is another arrangement maintained for control purpose. Test control agreed is most important for bank internal control.
- To prepare in chime and expenses statement.
- To maintain and prepare maturity balance sheet.
- Daily posting of voucher issued by all departments.
- To prepare clearing difference balance.
Statements Prepared by Accounts Section:
- Sector wise balance position.
- Foreign currency statement.
- Maturity balance sheet.
- As per circular supplied by accounts department.
- Liquidity position.
- Branch trail balance.
- Income Expenses statement.
- Exporters foreign currency.
Register Maintained by General Banking Section:
- Inward and outward dispatch register.
- Pay Order, DD and TT issuing and payment register.
- Cheque clearing register.
- IBDA register.
- Account opening register.
- Cheque issuing register likes CD, SB and SND.
- IBCA issuing and receiving register.
- Cheque returning register.
- IBC and OBC register.
Customer Service Desk: Actually customer service section is include with the account opening section,the function of customer service desk to provide potential service, solve the any problem and inquiry of customer.
CHAPTER-5
DATA ANALYSIS AND FINDINGS
5.1 FINDINGS OF THE STUDY:
As the study is concentrated with General banking system of JBL, I have tried to find out its performance, strategies, policies and effectiveness and the satisfaction level of customers
5.1.1 PERFORMANCE OF Jamuna bank, Jubilee road Islami Banking Branch, AT A GLANCE:
Deposit:
The deposit volume of Jamuna bank, Jubilee road Islami Banking Branch, Chittagong
Year
|
2005
|
2006
|
2007
|
2008
|
2009
|
2010(Aug)
|
Deposit
|
184.91
|
301.31
|
420.71
|
534.34
|
961.14
|
1297.25
|
(TK.inMillion)
OPERATING PROFIT:
Despite various setbacks in economy, banks performance may be termed as satisfactory in respect of deposit mobilization and profit earning. At the end of the year Branch’s operating profit stood at Tk. 83.09 Million as against tk. 35.08 Million of the year 2008 and in 2010(august) the profit reached at 85.06..
Year
|
2005
|
2006
|
2007
|
2008
|
2009
|
2010
|
Operating Profit
|
14.32
|
30.47
|
31.47
|
35.08
|
83.09
|
85.06
|
(Tk. In Millions)
From the graph we see that the profit is increasing every year.
Number of Account Opened:
Deposit Products
|
2010(Aug)
|
2009
|
2008
|
2007
|
Mudaraba Savings Deposit(SB)
|
450
|
812
|
341
|
11
|
Al-wadiah Current Account(CD)
|
156
|
253
|
108
|
02
|
Mudarabah Term Deposit(FDR)
|
240
|
331
|
364
|
17
|
Mudarabah Monthly Savings Scheme
|
280
|
336
|
416
|
10
|
Mudarabah Double Growth Scheme
|
23
|
36
|
78
|
04
|
From the graph we see that number of accounts are increasing every year.
Chapter-6
6.1 Findings:
The problems as observed during internship at JBL (Jubilee Road Branch) are as follows:
Ø Online banking service is limited here.
Ø High commission charge responsible for declining of the PO , TT, DD amount.
Ø It has lack of training program for their employees ,such as Seminar, Workshop etc.
Ø It has shortage of staff.
Ø ATM and Quick Cash is important in globalization. But this system are not sufficient in JBL.
Ø It has no separate marketing department. But it is very essential in globalization.
There are many employees but they’re not well trained. Because they have come form various education discipline which is not relevant with this field.
6.2 RECOMMENDATIONS:
JBL needs to launch more of their own ATM Booth so that their customers can withdraw cash at a low commission.
- JBL Bank should open more branches in the sub-urban and rural areas all over
- Continuous advertisement need to be circulated in electronic and print media to inform and make popular of the JBL products.
- JBL management should try to bring new IT products & services. This will increase income and through IT, JBL can provide better services to its customers.
- To attract more clients JBL has to create a new marketing strategy, which will increase the total export-import business.
- General Banking operations of other banks are more dynamic and less time consuming. JBL should take some initiative to complete with those banks.
- Funds should be available in the vault so that customer can withdraw their money on demand.
- Build new offices or make the adjustments in the interior design so that customers along with the employees do not feel congested and can work freely.
- Though customers are satisfied with the courteousness, warmly greeting is replaced by the artificial one. Proper warm greetings, more polite and helpful behavior could get the highly satisfied customer.
- Long-term training very much required for the officials.
- With all the above-mentioned recommendations, also require another important thing that is effective and efficient guidance from the Bangladesh Bank.
Conclusion
Banking sector being a service sector of Bangladesh Bangladesh
Islamic financial institutions have gained good momentum over a short period of time. JBL is one of the Islamic Financial Institutions of Bangladesh. In order to maintain this momentum JBL has to expand its activities on the lines of contemporary financial market. For this, it will have to develop innovative products in line with Shariah,
The main challenges come from the Non-Islamic Banks. For facing these challenges, JBL needs to build good customer relationship for gaining confidence of the depositors. And this confidence is only possible by rewarding depositor’s fund with good return. Moreover, JBL needs to focus on market research and development of new financial products to compete with other banking institutions. Besides this, JBL needs to recruit some experts who have the knowledge of financial market as well as Islamic Banking System to operate the institution effectively & efficiently.
JBL needs to undertake initiatives in the field of product designing and these essentially requires employing dedicated experts who have a genuine interest in advancing the cause of Islamic Finance and well conversant with conventional market. Moreover the Bank has to make strong lobby with the Central Bank and other commercial banks based on Islamic Shariah to sustain its positions in the market.
BIBLIOGRAPHY
Article and Documents:
Ø Annual Report of Jamuna Bank Limited
Ø Jamuna Bank Limited Profile
Ø Circulars of JBL
Ø Leaf-tests of welfare oriented investment of JBL
Ø Article of “Letter of credit” By Dr. Toufic A Chowdhury
Ø Export Procedures / Formalities – Sk. Harun Ar Rashid, Faculty member, BIBM
Ø Import procedures / Formalities- Sk. Harun Ar Rashid, Faculty member, BIBM
Ø Informal Manual of JBL
Ø Some workshop’s synopsis.
Books :
Ø Banking theory law and practice Sudharam & Varshney.
Ø International Business, Ricky w Griffin
Web site:
Ø www.jamunabankbd.com
Ø www.bdbank.com
Ø www.nbr.com
MOHAMMAD RAYHAN UDDIN,
LL.B. (HONOURS), LL.M, MBA
MOBILE NO: +8801914676110
