“General Banking Activities of Exim Bank Limited”
Executive Summery
The first chapter of this report is compiled with the information about the origin of the report. In this chapter the booklover will find Introduction of the Report, Background of the Report, Objective of the Report, Scope of the Report, Research Methodology and Limitations.
The second chapter is compiled with the information about Islamic Bank; its definition, objectives, distinguished features, objectives according to the modern age, difference between conventional banking & Islamic Banking and problems of Islamic banking.
In the third chapter the booklover will find the literature review of this report.
Chapter number four consists information of EXIM Bank Ltd. Origin of the bank, organizational objectives, operating & financial review, credit ratings, prime operational area etc. are discussed in this chapter.
The fifth chapter is compiled with the information about different Products and Services of EXIM Bank Ltd. Sectors of EXIM Bank Ltd., products and services etc. are discussed in this chapter.
The next chapter is all about General Banking. Starts with deposit mobilization, different types of accounts, documents required for opening an account, provisional profit rate on different accounts, statement of affairs, issuance of a cheque, remittance of funds, DD, TT, PO etc are elaborately discussed and end with the discussion about Clearing.
The seventh chapter is about Investment of the Bank. In this chapter we will find the different modes of Islamic financing used by EXIM Bank such as Murabaha Import Bills (MIB), Murabaha Trust Receipt (MTR), Izara Bill Baia (IBB) etc. In this chapter we will also find the documentation process of investment of EXIM Bank Ltd.
The eighth chapter is all about Foreign Exchange. Foreign exchange operation of EXIM Bank Ltd., import financing, types of L/C and many more things are discussed in this chapter.
The ninth chapter is about the Customer Satisfaction of EXIM Bank Ltd. according to a survey made on 50 customers of the bank regarding their satisfaction.
Based on the study at the end of the report there are some recommendations given for the betterment of the Bank:
| Short Names | Elaborated Names |
| EXIM | Export Import Bank of Bangladesh Limited |
| NPBs | New Private Banks |
| NCBs | Nationalized Commercial Banks |
| CBL | Commercial Banks Limited |
| BBA | Bachelor of Business Administration |
| BOE | Bill of Exchange |
| BB | Bangladesh Bank |
| WB | World Bank |
| CB | Central Bank |
| GB | General Banking |
| IT | Information Technology |
| L/C | Letter of Credit |
| B/L | Bill of Leading |
| TT | Telegraph Transfer |
| A/C | Account |
| MTD | Mudaraba Term Deposit |
| MSD | Mudaraba Saving Deposit |
| DD | Demand Draft |
| PO | Pay Order |
| ERC | Export Registration Certificate |
| CCH | Cash Credit Hypo |
| LDBP | Local Documentary Bills Purchased |
| LDBC | Local Documentary Bills for Collection |
| MTR | Murabaha Trust Receipt |
| CCP | Cash Credit Pledge |
| CRISL | Credit Rating Information and Services Limited |
| IFC | Investment Finance Corporation |
1. Introduction |
Commercial banks are the most important financial intermediaries. EXIM Bank Ltd. (Export Import Bank of Bangladesh Limited) is one of the best and most important bank for the banking system of Bangladesh. Like other banks & financial intermediaries, they perform a critical function of facilitating the flow of funds from surplus units to deficit units. Commercial banks are basically focused on commercial lending. From the end of 19th century they are providing diversified services.
Like other Commercial banks EXIM Bank Ltd. also have different sections such as section focusing on lending, a section helping in foreign trade, a section collecting deposits etc. This study more or less relates with all the sections but gives much emphasis on the section “Loan & Advance”.
1.1 Background of the Report:
The internship program which is an essential part of the BBA program to complete the degree and exercise a significant importance as it enables a student to become familiar with the practical business activities. The student works closely with the people of an organization and learn about the functions of that organization. This program enables a student to develop his analytical skill and scholastic attitude.
1.2 Objectives of the Report:
(a) General:
· To observe the Islamic Banking Operation of Export Import Bank of Bangladesh Limited.
(b) Specific:
· To learn the implementation of Islamic Mode of Finance in the General Banking System.
· To know about EXIM Bank Ltd. as a whole.
· To observe the major outline of Banking Business.
· To observe investment arrangement.
· To forecast about the necessary documents in Loan & Advance transaction of EXIM Bank Ltd.
· To know about the foreign exchange mechanism practicing at EXIM Bank Ltd.
· To observe foreign correspondents of EXIM Bank Ltd.
· To observe general banking activities.
· To be familiarized with the different components & instruments used in foreign exchange, general banking & investment department.
· To recommend solutions for solving the problems faced by the bank.
· Find out comparative position of the company.
· Find out the customer satisfaction of EXIM Bank Ltd.
1.3 Scope of the Report:
An infrastructure of the organization has been detailed, accompanied by a global perspective and look into the future. The scope of this report is limited to the overall description of the company, its services and its position in the market and its marketing strategy.The scope of the study is limited to organizational setup, function and performances of the Satmasjid Road Branch of Export Import Bank of Bangladesh Limited.
1.4 Research Methodology:
The report is prepared on the basis of information collected from both secondary source and primary data collection survey. The secondary information was collected from EXIM Bank Ltd. archive, annual report and materials from various newspapers.In this study, have adopted the under mentioned methods to conduct the activity.
1.4.1 Determining the source of information:
In the next step, have determined the source of information that would be required for the study. Used both primary and secondary data to conduct the study.
(a) Primary data:
Report has collected primary data by interviewing employees and clients of Export Import Bank of Bangladesh Limited. Primary data were derived through discussion with the employees of the organization. Clarification of issues was made from different concerned officials of the Branch. I have collected primary data in the following way:
· Face to face interview with both employees and clients.
· Questionnaire.
· Observing the operational activities of the Branch.
(b) Secondary data:
Different types of secondary data are used in this study. Sources of secondary data are as follows:
· Internal source.
· Annual Report of the Bank.
· Preceding research Report.
· Information regarding foreign exchange, general banking and investment.
(c) External source:
- Different books and periodicals related to Foreign Exchange, General Banking and Investment.
- Bangladesh Bank’s report.
- Newspaper.
- Other internship reports.
- Friends’ suggestion.
- Supervisors’ advice.
1.5 Limitations:
Beside all the efforts faced the following limitations:
- The study on the performance of EXIM Bank is made on the basis of the outcome of the survey made on only Satmasjid Road Branch, Dhanmondi, Dhaka.
- There were scarcity of adequate data and information on the relevant topic as some data are treated as very much confidential.
- The overall evaluation of the performance of EXIM Bank is done on the basis of its performance in the year 2003, 2004, 2005, 2006 and 2007.
- The minority of experience and knowledge of mine acts as constrains to prepare this report.
- Preparation of a report on such topic requires more time than I got to do so.
| Chapter 02
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The banking sector of Bangladesh played an important role towards economic growth of the country. In recent years Central Bank took strict measures to check unauthorized overseas transaction through enacting Anti Money Laundering Act, amending “Artho Rin Adalot Ain” and strengthening supervision by Central Bank to bring transparency in the banking sector. These timely steps have made the banking operations more transparent, acceptable and modern. As a result the image of banking sector has been elevated.
Bangladesh Bank also identified five core risks areas for management of the banks and provided necessary guidelines for implementation. Those are Foreign Exchange Risk Management, Asset Liability Management, Prevention of Money Laundering, Credit Risk Management and Internal Control and Compliance. This initiative will bring in overall discipline in this sector and enhance operational profit.
.Whoever being an individual firm, company or corporation generally deals in the business of money and credit is called bank. In our country, any institution which accepts for the purpose of lending or investment deposits of money from public, repayable on demand or otherwise, with transferable by checks draft order or otherwise can be termed as a bank.
The purpose of banking is to ensure transfer of money from surplus unit to deficit units. Banks of all countries work as the repository of money. The owners look for safety and amount of interest for their deposits with Banks. Entrepreneurs try to obtain money from the banks as working capital and for long-term investment. These entrepreneurs welcome effective and forward-looking advice for investment. Banking sector thus owe a great to the deposit holders on the hand and the entrepreneurs on the other. They are expected to play the role of friend, philosopher, and guide for the deposit holders and the entrepreneurs.
Since liberation, Bangladesh passed through fragile phases of development in the banking sector. The nationalization of banks in the post liberation period was intended to safe the institutions and the interest of the depositors. Those handling the banking sector have borne the burden of putting banks on reliable footings. Despite all that was done, some elements of irregularities appeared. With the assertion of the role of the Central bank, The Bangladesh bank started adopting measures for putting banking institutions on right track. Yet the performance of public sector management of banks left some negative effects in the money market in particular and the economy in general. The agility among the borrowers manipulates the banking sector as a whole. In effect, a default culture appeared on the scene.
The opening of PRIVATE and FOREIGN participants to the banking sector was intended to obtain desirable results from banking. The authorization of private banks was designed to create competition among the banks and competition in the form of efficiency with and the productivity in enterprises funded by banks. Unfortunately, for the people, at large banking sector is yet to obtain the credit for efficiency, credibility, and growth.
2.1 The Banking Arena in Bangladesh
The Banking Sector of Bangladesh comprises of four categories of scheduled banks. These are-
· Nationalized Commercial Banks (NCBs).
· Government Owned Development Finance Institutions (DFIs).
· Private Commercial Banks (PCBs).
· Foreign Commercial Banks (FCBs).
Private Commercial Banks are again divided into three categories- First Generation, Second Generation and Third Generation.
(i) Nationalized Commercial Banks (NCBs):
In general terms; NCBs are large, operationally inefficient and technically insolvent. They are used as vehicles of government directed lending. These banks enjoy an enormous and stable customer deposit base, which provides a cheap source of funding. In addition, most large government related business is routed through these banks.
(ii) Private Banks-1996:
Six new licenses were granted. These are the better-managed banks with strong capital base and good asset quality and under a much-improved regulatory regime. All the banks clustered in this group have successfully raised capital from secondary market and all the shares are now traded in the stock exchange at premium.
(iii) Private Banks-1998:
Set up to service the sectors not being addressed by the larger NCBs. Not subject to state directed lending but have generally suffered from related lending to directors and their extended families.
(iv) New Private Sector Banks:
Ten new banks have been granted licenses over the year 1999. While some bankers complained that the country is over-banked, the more commonly held view, including that of the World Bank, is that there is adequate scope for these banks to survive given currently untapped gaps in the market, fat in existing interest margins (currently circa 5%), and efficiency/ service level disparities. It is estimated that up to 70% of the Bangladeshi economy remains un-banked. While this appears to imply that the newer banks may move downstream in terms of asset quality but in reality the last two sets of new banks are successfully competing with NCBs and Foreign banks on the top end market segment.
Generally asset quality is poor with the level of non-performing loans at worryingly high levels. Across the whole banking sector, classified loans, as reported by Bangladesh Bank (BB) in December 2002, the Central Bank, were 34.93%. As a percentage of their own total loan portfolio, non-performing loans accounted for 38.55% of the NCBs loan book, and 22.01% of private banks (both categories). In October 2002, the provisioning requirements changed for past due loans from 180 to 90 days, now requiring a 20% provision. Generally, provisioning levels are weak, impairing capital. It is however necessary to understand why the banks carry such high levels of non-performing loans. Firstly, the legal position of banks’ recourse is weakened once a loan is written-off; and secondly, BB imposes a six-year moratorium on write-offs. As the legal system is slow and time consuming, this results in NPBs remaining on the books for longer than would otherwise be the case in other countries. There is also a significant proportion of NPBs, which is due to non-payment by Government or Government owned agencies.
Lower credit growth in 2002, compared to deposits, has meant that the banks now have excess liquidity. With investment rates in call, money market and government bonds remaining static at their lowest levels, some banks are now cutting back on their long-term deposit rates and are refusing to accept large deposits.
Long-term interest rates have traditionally been lower than short-term rates. This inverted yield curve is a fall out from the source of long term lending. Long term lending was traditionally extended by the NCB’s, usually for non-commercial loans, thus setting a low benchmark for longer-term funds.
However care should be exercised when taking comfort from BB’s assertion that it will not allow any bank to fail. While this pledge has held true to date, in effect it means that BB will allow a technically insolvent bank to continue in operation with BB guidance and “Technical” support but BB will not provide a capital injection or write-off government related bad loans.
2.2 Origin of the Bank:
EXIM Bank Limited was established under the rules and regulations of Bangladesh Bank and the ‘Bank companies act. 1991’ in 1999 under the leadership of Late Mr. Shahjahan Kabir, founder chairman who had a long dream of floating a commercial bank which would contribute to the socio-economic development of our country. He had a long experience as a good banker. A group of highly qualified and successful entrepreneurs joined their hands with the founder chairman to materialize his dream. In deed, all of them proved themselves in their respective business as most successful star with their endeavor, intelligence, hard working and talent entrepreneurship. Among them, Mr. Nazrul Islam Mazumder became the honorable chairman after the demise of the honorable founder chairman.
This bank starts functioning from 3rd August, 1999 with Mr. Alamgir Kabir, FCA as the advisor and Mr. Mohammad Lakiotullah as the Managing Director. Both of them have long experience in the financial sector of our country. By their pragmatic decision and management directives in the operational activities, this bank has earned a secured and distinctive position in the banking industry in terms of performance, growth, and excellent management. The authorized capital and paid up capital of the bank are Tk. 1000.00 million and Tk 313.87 million respectively.
Export Import Bank of Bangladesh Limited started its operation as one of the third generation bank but within a short span of time it has become one of the leading and most successful bank not only among the third generation banks but also it superseded many other banks and financial institutions belonging to second and even first generation banks from the point of view of its excellent business performance, extraordinary corporate culture and strong team work under the dynamic leadership of its Management. The Board of Directors has always been very much conscious as to the policy making and framing of strategy of the bank which is being implemented by the Management through its strong workforce comprising skilled human resources having great zeal and excellent team spirit. Transparency, accountability and integrity accompanied by honesty and utmost sincerity are the key factors behind its success. Both the Board and the Management are transparent like crystal clear. EXIM Bank believes that there is no short cut way to achieve the success and as such only hard work can bring the success.
The bank has migrated all of its conventional banking operation into Shariah based Islami banking since July, 2004 following the decision taken unanimously in the Extra Ordinary General Meeting held on December 28, 2003. Obtaining confirmation from the honorable High Court Division of Bangladesh Supreme Court, the Bank had been converted into a full-fledged Islami Bank based on Shariah from traditional interest based banking and at the grace of Almighty Allah the Bank started functioning as an Islami Bank with effect from July 01, 2004 with the approval of Bangladesh Bank. Before conversion the Bank put option to all of its valued customers through news media in addition to personal contact with them to accept the decision taken by the Bank. It’s a great pleasure that everybody gladly accepted the conversion with appreciation. It is something new in the history of Islami Banking. Because, in so far my knowledge goes, there may be establishment of some Islami Banks since inception at the time of their incorporation. Someone may also experience to see some traditional Banks having a few branches based on Shariah. But total conversion of a conventional Bank into a full-fledged Islami Bank is, perhaps, for the first time is introduced by Export Import Bank of Bangladesh Limited in the World.
Corporate Information’s at a Glance (As per December 31, 2006):
Name of the bank : Export Import Bank of Bangladesh Limited
Status : Private Limited Company
Date of Incorporation : 2nd June, 1999.
Inauguration of the first branch : 3rd August, 1999.
Head Office : 5 Rajuk Avenue, Printers Buildings (5th, 6th, 10th & 13th floor, Dhaka.).
Chairman : Mr. Md. Nazrul Islam Mazumder.
Managing Director : Mr. Kazi Mashiur Rahman (Joined on June 04, 2007)
Authorized Capital : TK. 35000 million.
Paid up Capital : TK. 1713.75 million.
Directors : 10
Number of Branches : 33
Deposits : TK. 35032.02 million
Loan : TK. 32641.27 Million
Number of Employees : 1020.
2.3 Organizational Objectives:
(i) Vision:
The gist of the Vision of EXIM Bank is “Together Towards Tomorrow”.
Export Import Bank of Bangladesh Limited believes in togetherness with its customers, in its march on the road to growth and progress with services. To achieve the desired goal, there will be pursuit of excellence at all stages with a climate of continuous improvement, because, in EXIM Bank, we believe, the line of excellence is never ending. Bank’s strategic plans and networking will strengthen its competitive edge over others in rapidly changing competitive environments. Its personalized quality services to the customers with the trend of constant improvement will be cornerstone to achieve our operational success.
(ii) Mission:
The Bank has chalked out the following corporate objectives in order to ensure smooth achievement of its goals:
· To be the most caring and customer friendly and service oriented Bank.
· To create a technology based most efficient banking environment for its customers.
· To ensure ethics and transparency in all levels.
· To ensure sustainable growth and establish full value of the honorable shareholders.
· Above all, to add effective contribution to the national economy.
. Eventually the Bank emphasizes on:
· Providing high quality financial services in export and import trade.
· Providing efficient customer service.
· Maintaining corporate and business ethics.
· Being trusted repository of customers’ money and their financial adviser.
· Making its products superior and rewarding to the customers.
· Display team spirit and professionalism.
· Sound Capital Base.
· Enhancement of shareholders wealth.
· Fulfilling its social commitments by expanding its charitable and humanitarian activities.
2.4 Operating and Financial Review:
As a commercial Bank, EXIM Bank does all traditional Banking business including the wide range of savings and credit scheme products, retail banking and ancillary services with the support of modern technology and professional Excellency. But the main focus is, for obvious reason, on export and import trade handling and the development of entrepreneurship and patronization of private sectors.
(i) EXIM Bank at a Glance:
| Figure in crore | |||||
| Sl. No. | Particulars | 2003 | 2004 | 2005 | 2006 |
| 01. | Authorized Capital | 100.00 | 100.00 | 100.00 | 350.00 |
| 02. | Paid-up Capital | 31.39 | 62.78 | 87.90 | 171.38 |
| 03. | Reserve Fund | 22.82 | 35.73 | 57.00 | 81.09 |
| 04. | Deposits | 1524.30 | 1907.82 | 2831.90 | 3503.20 |
| 05. | Investment(General) | 1228.91 | 1933.20 | 2604.60 | 3264.13 |
| 06. | Investment(Shares & Bonds) | 237.70 | 154.30 | 163.30 | 223.33 |
| 07. | Foreign Exchange Business | 3461.96 | 4931.24 | 7294.00 | 9617.51 |
| a) Import Business | 1926.00 | 2678.10 | 4143.20 | 4949.67 | |
| b) Export Business | 1512.46 | 2241.84 | 3128.50 | 4623.46 | |
| c) Remittance | 23.50 | 11.31 | 22.30 | 34.38 | |
| 08. | Operating Profit | 56.27 | 83.58 | 117.58 | 137.87 |
| 09. | Loan as a % of total Deposit | 80.62% | 101.97% | 91.97% | 93.18% |
| 10. | No. of Foreign Correspondent | 185 | 200 | 222 | 246 |
| 11. | Number of Employees | 627 | 768 | 934 | 1020 |
| 12. | Number of Branches | 19 | 28 | 28 | 30 |
| 13. | Return on Assets | 3.15% | 3.44% | 1.65% | 1.73% |
(ii) Financial Overview of the Bank:
The performance of the Bank, during the period under review, is more significant simultaneously in development and achievements of continuous growth rate in all the areas of banking operations. The Bank has successfully been marching ahead with its prime business objective by earning a pre-tax profit of Tk.1,199.49 million registering an annual growth of 12.81% than that of the previous year. It has successfully mobilized Tk.35,32.02 million deposit from depositors and has arranged disbursement of Tk.32,641.27 million as investment to 16,604 accounts as on 31st December 2006 through its 30 Branches. The total income and expenditure of the Bank were Tk.4,967.57 million and Tk.3,588.89 million respectively during the period under review. The return on assets (ROA) after tax was 1.73% well above the industry average. The achievements were possible because of the service excellence of management team with support from a very resourceful and skilled workforce rendering efficient and specialized services.
(iii) Capital and Reserve Fund:
The Bank started its voyage with an authorized Capital of Tk 1000 million with its initial Paid up Capital was Tk. 225 million subscribed by the sponsor in the year 1999. The Capital and Reserve of the Bank as on 31st December 2006 stood at Tk. 3,111.68 million including Paid up Capital of Tk. 1,731.75 million. In the year 2006, the Bank has issued Rights shares to strengthen its Capital base. In this course the Bank has gather an amount of Tk. 571.25 million. The Bank also maid Provision on unclassified Investments which is amounted to take 351.47 million.
(iv) Deposit:
Deposit is one of the principal sources of fund for investment of commercial banks and investment of deposit is the main stream of revenue in the banking business. The total deposit of the bank stood at Tk. 35,032.02 million as on December 2006 against Tk. 28,319.21 million of the previous year which is an increase of 23.70%. This growth rate may be termed as a remarkable achievement for the Bank. The present strategy is to increase the deposit base through maintaining competitive rates of Profit and having low cost of funds.
The following Pie Chart contains the numerical presentation of the Deposit Mix of EXIM Bank-
(v) Investment:
Total amount of Investment of the Bank stood at Tk. 34,641.27 million as on December 31, 2006 as against Tk. 26,046.34 million as on December 31, 2005 showing an increase of Tk. 6,594.93 million with growth rate of 25.32%. Investments are the core asset of a Bank. The Bank gives emphasis to acquire quality assets and does appropriate lending risk analysis and follows all the terms and conditions of CRM (Credit Risk Management) while approving commercial and trade investments to clients.
The following chart contains the numerical representation of last five years Investment of the Bank-
(vi) Investments (Share & Bonds):
The size of the investment portfolio in 2006 is Tk. 2,233.25 million while it was Tk. 1,633.03 million in 2005. The portfolio comprises Islamic Investment Bond, Shares and Prize Bonds.
The following chart contains information of last five years investment portfolio-
(vii) Import Business:
During the year, the Bank opened 25,817 import letters of credit and the import volume stood at Tk. 49,596.73 million with a growth of 19.71% in comparison with previous year.
From the following chart we can see the information of last five years Import Business of the Bank-
(viii)Export Business:
The growth of the Export business has significantly been increased by 47.78%. It stood at Tk. 46,234.59 million as of December 31, 2006 against Tk. 31,285.37 million of the previous year.
In the following chart we can see the information of last five years regarding Export Business of EXIM Bank-
(ix) Foreign Remittance:
Foreign Remittance of the Bank stood at Tk. 343.78 million as of December 31, 2006 as against Tk. 222.97 million in 2005. Besides, the Bank has taken initiatives to make Remittance Arrangements with some leading Exchange Houses at abroad.
(x) Credit Ratings:
In the times, CRISL and IFC are in the process of rating the bank in different aspects. According to the Notification of Reporting of May 07, 2007, CRISL rated Long Term credit as A (Adequate Safety) and Short Term as St-3 (Good Grade).
While IFC expressed its satisfaction regarding the Bank’s operations as well as its position in connection with management of core risk factors and maintenance of good governance along with flawless operations.
Credit Ratings at a glance:
| Particulars | Ratings | Significance |
| Long-Term Credit | A- | Adequate Safety |
| Short-Term Credit | ST-3 | Good Grade |
(xi) Prime Operational Area:
As a commercial Bank, EXIM Bank provides all traditional banking services including a wide range of savings and investment scheme products, Foreign Exchange and ancillary services with the support of modern technology and professional management but the main stress of the Bank is, as the name implies, put on Export and Import trade handling and financing & the Bank has become the pioneer in promoting Readymade Garment Industries and one of the largest financiers in this sector. The Bank provides financial support including market information and advice and today the garment sector constitutes the lion portion of the total export of the Company.
2.5 Head Office and Branch Offices of EXIM Bank
The Bank operates its activities through its Head office located in Dhaka and 33 more Branches located in many places of Dhaka & Bangladesh.
2.6-A Organizational Structure of Export Import Bank of Bangladesh Limited
2.6-B Organizational Structure of Principal Branch
2.6-C Organizational Structure of Satmasjid Road Branch
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3. Introduction
General Banking or cash department is one of the major areas of Formal sector. Through this section bank receives and disburses money, to develop banker customer relationship by opening different types of account and providing prompt services to the customers. It is called a nerve centre of the bank. The officers/staffs engaged in the department not merely deal with cash but they also take important role rendering the better customer services. So cash officers should be well experienced and well behaved towards the valued customers by offering prompt services in receipt and payment of cash with always presenting smiling face. Since bank make profit by investing peoples money so its need to collect money from customer by various way and need to make sure best service for attracting customer.
The whole activity of General Banking/cash department of EXIM Bank is classified in four areas:
3.1 Deposit Mobilization:
Mobilization of resources is one of core components in banking business, particularly for back up support of the growing demand of investment. By deposit mobilization, we mean bringing of potential deposit or idle savings of the surplus unit of the society to invest them as a supply of fund to the deficit unit. In a wider sense, it may also mean bringing potential savings of the people to the banking channel. Deposit is the money kept by the customers, which are repayable on demand and withdrawable by cheques, drafts, order or using other acceptable instrument from bank. Bank gives profit to depositor for keeping money in the bank and also claim servicing charge from the client. By collecting this deposit from depositor bank invests this deposit and earns profit from the borrower of the fund. As more and more deposits are mobilized by a bank its entire activity enlarges and the bank starts making higher returns.
At a glance, the process of Deposit Mobilization is as follows-
3.2 Different Types of Account of EXIM Bank:
Export Import Bank of Bangladesh has different types of account. They are-
· Al-Wadiah Current Deposit Account.
· Mudaraba Deposit Account (RFCD, NFCD).
· Mudaraba Savings Monthly Scheme-Money Grower.
· Mudaraba Income Scheme-Steady Money.
· Mudaraba Super Savings- Double in 6 years.
· Mudaraba Multiplus Savings-More than Triple in 10 Years.
· Mudaraba Education Savings-For Higher Education.
· Mudaraba Hajj Prokalpa.
· Mudaraba CREDIT CARDS.
· Foreign Currency Deposit A/C.
3.3 Papers/Documents Required for Opening an Account:
(a) For Individual/Joint Account:
· Introduction of the Account.
· Two photographs of the Signatory/Signatories duly attested by the introducer.
· Identity (copy of Passport/Chairman Certificate/TIN/Voter ID/T&T/Employee Certificate, Student ID/KYC, TP provided by the Bank).
· Joint Declaration Form (For Joint A/C only).
(b) For Partnership Account:
· Introduction of the Account.
· Two photographs of the Signatory/Signatories duly attested by the introducer.
· Partnership deed duly signed by the all Partners to open & operate the account (Sign
should be similar as stated in Partnership deed).
· Partnership deed certified copy by Notary Public(Deed should be written in Bond of Tk 500/= but if the capital exceed Tk. 25,000/=, bond of Tk. 1000/= is required).
· Registration (if any).
· Rubber Stamp.
· Updated Trade License.
· ID, KYC, TP.
(c) For Proprietorship Account:
· Introduction of the Account.
· Two photographs of the Signatory/Signatories duly attested by the introducer.
· Updated Trade License.
· Rubber Stamp.
· TIN Certificate (if any).
· ID, KYC, TP.
(d) For Limited Company:
· Introduction of the Account.
· Two photographs of the Signatory/Signatories duly attested by the introducer.
· Valid Copy of Trade License.
· Board Resolution of opening A/C duly certified by the Chairman/Managing Director.
· Certificate of Incorporation.
· Certificate of Commencement (In case of Public Limited Company).
· Certificate of (Joint Stock) true copy of the Memorandum and Article of Association of the
Companies (In case of Directorship Change) duly attested by Chairman or Managing Director.
· List of Directors along with designation & specimen signature.
· Latest certified copy of From-XII (to be certified by register of Joint Stock Companies
· (In case of Directorship Change).
· Rubber Stamp (Seal with designation of each person).
· Certificate of registration (in case of Insurance Company) obtained from Department
of Insurance from the Peoples Republic of Bangladesh).
(e) For Club/Societies:
Introduction of the Account.
Two photographs of the Signatory/Signatories duly attested by the introducer.
Board resolution of Opening A/C duly certified by President/Secretary.
List of Existing Managing Committee.
Registration (if any).
Rubber Stamp.
By Laws/Cons.
Permission Letter of Bureau of N.G.O (In case of N.G.O A/C).
(f) For Trust and Provident Funds in Local Currency:
· Two copies of Passport size photographs of the account holder who will operate the account
duly attested by the introducer and authenticated by Authorized Officer.
· Certified copy of the Trust Deed/duly certified by the Chairman/President/Secretary.
· Certified copy of Resolution of Trustee Board for opening & operation of the account
and authorizing specific persons to operate upon the same.
(g) Government Account:
· Resolution for opening Account.
3.4 Provisional Profit Rate on Different Types of Deposit of EXIM Bank:
| Types of Deposit | Provisional Profit Rate |
| 1. Al-Wadia Current Deposit | 0% |
| 2. Mudaraba Deposit Account | 6.00% |
| 3. Mudaraba Short-Term Deposit (MSTD) | 5.00% |
| 4. Mudaraba Term Deposit (MTDR)- | |
| One (01) Month’s MTDR | 8.50% |
| Three (03) Months’ MTDR | 11.25% |
| Six (06) Months’ MTDR | 11.25% |
| One (01)-Three (03) Years MTDR | 11.50% |
| 5. Mudaraba Scheme Deposit- | |
| Mudaraba Monthly Deposit Scheme (MMDS) | |
| A. 05 Years Term | 9.75% |
| B. 08 Years Term | 10.00% |
| C. 10 Years Term | 10.20% |
| D. 12 Years Term | 10.30% |
| 6. Mudaraba Monthly Income Scheme (MIS) {03 Years Term} | 12.00% |
| 7. Mudaraba Super Savings Scheme (MSSS) {06 Years Term} | 12.25% |
| 8. Mudaraba Multiplus Savings Scheme (Triple Amount in 10 Years) | 12.25% |
| 9. Mudaraba Hajj Scheme for different terms | 10.50% |
| 10. Mudaraba Education Scheme for different terms | 10.50% |
3.5 Statement of Affairs of Satmasjid Road Branch of EXIM Bank:
Statement of Affairs as on 31/10/2007
Total Deposit: 1,567,711,125.29
Total Advance: 352,193,796.76
Demand Deposit: 300,001,392.28
Time Deposit: 413,070,193.24
Profit/Loss: 22,072,454.57.
| Application | Total Accounts |
| Al-WADIA CURRENT ACCOUNT | 141 |
| MUDARABA SAVINGS DEPOSIT | 911 |
| MUDARABA SAVINGS DEPOSIT (STAF) | 28 |
| MUDARABA SHORT TERM DEPOSIT (7 D) | 58 |
| BAI MUAZZAL DEPOSIT (CCH) | 145 |
| MUDARABA TERM DEPOSIT (3 MON) | 1,118 |
| MUDARABA TERM DEPOSIT (6 MON) | 154 |
| MUDARABA TERM DEPOSIT (12 MON) | 346 |
| MUDARABA TERM DEPOSIT (24 MON) | 1 |
| MUDARABA TERM DEPOSIT (36 MON) | 33 |
| MUDARABA TERM DEPOSIT (1 MON) | 25 |
| MONTHLY SAVINGS SCHEMES 5 YEARS | 304 |
| MONTHLY SAVINGS SCHEMES 8 YEARS | 57 |
| MONTHLY SAVINGS SCHEMES 10 YEARS | 151 |
| MONTHLY SAVINGS SCHEMES 12 YEARS | 232 |
| SUPER SAVINGS SCHEMES | 176 |
| MULTIPLUS SAVINGS SCHEMES | 14 |
| MONTHLY PFT SAVINGS SCHEME | 200 |
| MONTHLY SAVINGS SCHEMES 5 YEARS | 9 |
| MONTHLY SAVINGS SCHEMES 8 YEARS | 2 |
| MONTHLY SAVINGS SCHEMES 10 YEARS | 5 |
| MONTHLY SAVINGS SCHEMES 12 YEARS | 45 |
| IZARA BILL BAIA (STAFF HB) | 2 |
| IZARA BILL BAIA (EIS) | 5 |
| HIRE PURCHASE EX. CAR SCH | 2 |
| TR (MIB/MURA/MPI) | 4 |
| IZARA BILL BAIA (HP) | 16 |
| MURABAHA IMPORT BILLS (PAD) | 1 |
| BAI-MUAJJAL (CCH) | 3 |
| L.D.B.P (LOCAL) | 15 |
| BAI-MUAJJAL (FIN.OBL) | 77 |
| TOTAL | 4280 |
3.6 Issuance of Check:
When a Client finished the process of account opening then according to banking rules and regulation the client have to maintain and pay some down payment then bank will provide a check requisition sleep.
In the sleep the account holder fill up his name, address, account number and specific signature then finally bank provide check book to the customer.
If it is not possible for the account holder to regularly maintain all types of transactions and check book withdrawals then he/she can authorize a person on his behalf to operate the account.
To give some one the authority mentioned then the client have to give authorized signature at the check requisition sleep.
3.7 Remittance of Funds:
EXIM Bank has 33 branches throughout the entire country and therefore, they serve as best medium for remittance of funds from one place to another. This service is available to both customers as well as non-customers of the Bank. The following are some of the important modes of transferring funds from one to another through a bank.
3.7.1 Functions of remittance section:
· Handling of all incoming and outgoing foreign and local remittance is the major function for this department.
· Handling of incoming and outgoing T.T.
· Outstation Cheque Collection.
· Outstation Cheque Purchase.
· Demand Draft Handling.
· Other assorted work.
. The Remittance of funds are:
An Inland Remittance:
Any person can remit funds to another through Inland remittance by using the following means of remitting funds with charges-
· Pay Order (PO).
· Demand Draft (DD).
· Telegraphic Transfer (T.T).
· Mail Transfers.
(a) Pay Order:
A pay order is a written statement issued by a branch of the Bank to pay a certain sum of money to a specific person or a bank. It may also be said as banker’s cheque as it is issued by a bank and payable by itself.
Issuance:
1. The application form must be filled up properly.
2. Commission to be calculated as the Bank’s rules as per amount.
3. Total amount due must be paid by the customer at the cash receive counter, after receiving
the cashier will issue a voucher to the PO issue department.
4. The pay order is prepared and entered in the PO issue register. The PO number is then written on the application form and the amount is prtectographed on the face of the PO.
5. The vouchers along with the instrument and register are then sent to the department- in – charge for checking and signature.
6.Then all the documents are sent to the branch in-charge for second signature.
7. 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.
8. After that the following vouchers have to be passed:
DR.IDT (issued by cashier)
CR. Pay order Payable A/C and
CR. Commission on Remittance.
Issue to remember:
1. A PO is transferable. As it is a banker’s cheque payable to order, the beneficiary may transfer it, by giving proper discharge on its back. It is a quasi-negotiable instrument.
2.Before making payment the signature of issuing officers should be verified and the date of payment should marked in the register.
3. If the purchaser requests for cancellation of the PO after its issue, then a written request must be obtained and after verifying his/her signature on the letter, the PO may be cancelled and it must be marked on the PO issued register as such.
4. A PO becomes stale after six months of its issue, it may revalidate if tendered by the
purchaser.
(b) Demand Draft (DD):
This is an instrument through which customers money is remitted to another person/firm/organization in outstation (outside the clearing house area) from a branch of one Bank to an outstation branch of the same Bank or to a branch of another Bank( with prior arrangement between that Bank with the issuing branch).
This is an order instrument in which the issuing branch gives instruction to the payee/drawer branch to pay certain amount of money to the order of certain person/firm/organization. The payee/drawer branch upon receiving the message, decodes the tested message and being fully satisfied, pay the amount by crediting the payees account (if account is maintained with the payee branch). Telegraphic transfer may also be issued favoring the beneficiary who maintains account with other banks. In such case the payee branch issues pay order favoring the payee and handover the P.O the concerned Bank branch for effecting payment to the payee.
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· A draft is always an order and never a bearer instrument.
· It is a negotiable instrument like a cheque that can be endorsed, collected and delivered to the endorsee.
· DD may be issued to any person and it can be issued in favor of a firm, company or local authority on written request duly signed by the purchaser.
Issuance:
1. Filling of DD application form (This form is treated as an application as well as a Voucher).
2. Commission to calculated as per BB rate and written on the space provided on the form. (@15%, min Tk.15/-)
3. 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.
4. 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 protecting graphed on the face of the draft.
5. The vouchers along with the instrument and register are then sent to the department-in-charge for checking and signature.
6. Then the entire documents are sent to the branch in-charge for second signature.
7. After all signatures are completed, the draft is given to the customer and his/her signature must be taken on the counter foil.
8. Preparing advice: an IBCA (For demand draft only) must be prepared, starting the details of the issued draft and must be sent to Drawee Branch; on the same day.
9. Voucher to be passed:
DR. IDT (issued by cahier)
CR. SBL General A/C
CR. Commission on Remittance
Encashment:
1. When a draft is presented for payment, the following things must be checked scrupulously:
a) DD is issued by SIBL
b) DD is drawn on your branch
c) Amount in word and figure