“Overall Banking System of Jamuna Bank Ltd’’
1.1 Introduction
Jamuna Bank Limited (JBL) is a Banking Company registered under the Companies Act, 1994 with its Head Office at Chini Shilpa Bhaban (4th & 8th Floor), 3, Dilkusha C/A, Dhaka -1000. The Bank started its operation from 3rd June 2001. Jamuna Bank Limited is a highly capitalized new generation Bank started its operation with an Authorized Capital of Tk.1600.00 million which is amended by Tk. 4000.00 million and Paid-up Capital of Tk.390.00 million. The Paid-up Capital has been raised to 2964.48 million in March 31,2011. Currently the Bank has 67 branches all over the country. The Bank undertakes all types of banking transactions to support the development of trade and commerce of the country. JBL’s services are also available for the entrepreneurs to set up new ventures and BMRE of industrial units. Jamuna Bank Ltd., the only Bengali named new generation private commercial bank was established by a group of winning local entrepreneurs conceiving an idea of creating a model banking institution with different outlook to offer the valued customers, a comprehensive range of financial services and innovative products for sustainable mutual growth and prosperity. The sponsors are reputed personalities in the field of trade, commerce and industries. The Bank is being managed and operated by a group of highly educated and professional team with diversified experience in finance and banking. The Management of the bank constantly focuses on understanding and anticipating customers’ needs. The scenario of banking business is changing day by day, so the bank’s responsibility is to device strategy and new products to cope with the changing environment. Jamuna Bank Ltd. has already achieved tremendous progress within the few years. The bank has already ranked as one of the quality service providers & is known for its reputation. Jamuna Bank Ltd. offers different types of Corporate and Personal Banking Services involving all segments of the society within the purview of rules and regulations laid down by the Central Bank and other regulatory authorities.
2.1 Organizational Objects:
1. To earn and maintain CAMEL Rating “Strong”
2. To establish relationship banking and improve service quality through development of strategic Marketing plans.
3. Be one of the best banks of Bangladesh.
4. To introduce fully automated systems through integration of information technology.
5. Achieve excellence in customer services and superior to all competitors.
6. Cater to all differentiated segment of retail and wholesale customer.
7. Be a high quality distributor of product and services.
8. To ensure an adequate rate of return on Investment.
9. To maintain a healthy growth of burins with desired image.
10. To ensure optimum Utilization of all available resources.
2.2 Bank’s Mission and Vision:
2.2.1 Vision:
To become a leading banking institution and to play a pivotal role in the development of the country.
2.2.2 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.
2.3 Organogram:
2.3.1 Board of Directors:
Board of Directors of the Bank is a unique combination of both private and Government sector experience. Currently it consists of 13 members elected from the share holders. There are seven directors that represent the sponsors and general public and senior officials in the rank and status of Additional Secretary/Joint Secretary represent the Government. Managing Director is the ex-officio Director of the Board. In line with the guidelines of Bangladesh Bank, a three member Audit Committee of the Board of Directors has been formed to assist the board in matters related to Audit and Internal Control System of the Bank.
| Board of Directors | ||
| 1 | Al-haj Md. Belel Hossain | Chairman |
| 2 | Gazi Golam Murtoza | Vice Chairman |
| 3 | Md. Motior Rahman | Managing Director |
| 4 | Engr. A.K.M. Mosharraf Hussain | Director |
| 5 | Al-haj.M.A. Khayer | Director |
| 6 | Md. Mahmudul Hoque | Director |
| 7 | Md. Tajul Islam | Director |
| 8 | Al-Haj Nur Mohammed | Director |
| 9 | Engr.Md. Atiqur rahman | Director |
| 10 | Al-Haj Md. Rezaul Karim Ansari | Director |
| 11 | Farhad Ahmed Akand | Director |
| 12 | Kanutosh Majumder | Director |
| 13 | Golam Dastagir Gazi Bir Protik | Director |
| 14 | Fazlur Rahman | Director |
| 15 | Shakhawat Abu Khair Mohammad | Director |
| 16 | Md. Sirajul Varosha | Director |
| 17 | Md. Ismail Hossain Siraji | Director |
| 18 | A.S.M.Abdul Halim | Independent Director |
2.3.2 Management Structure
The fourteen members of the Board of Directors are responsible for the strategic planning and overall policy guidelines of the Bank. Further, there is an Executive Committee of the Board to dispose of urgent business proposals.
Besides, there is an Audit Committee in the Board to oversee compliance of major regulatory and operational issues.
The CEO and Managing Director, Deputy Managing Director and Head of Divisions are responsible for achieving business goals and overseeing the day to day operation.The CEO and Managing Director are assisted by a Senior Management Group consisting of Deputy Managing Director and Head of Divisions who supervise operation of various Divisions centrally and co-ordinates operation of branches.Key issues are managed by a Management Committee headed by the CEO and Managing Director. This facilitates rapid decisions.There is an Asset Liability Committee comprising member of the Senior Executives headed by CEO and Managing Director to look into all operational functions and Risk Management of the Bank.
2.3.3 Managerial Hierarchy of Jamuna Bank Ltd. :
2.4 Employee position of Naogaon Branch :
There are 20 employee in Naogaon Branch and their position is given below
| SL NO | Name of The Employee | Designation |
| 01 | Md. Rafiqul Islam | Senior Assistant Vice President |
| 02 | Mst. Farhana Yeasmin Rabbi | First Assistant Vice President |
| 03 | Subash Chandra Saha | Senior Executive Officer |
| 04 | Md Abul Kalam | Senior Executive Officer |
| 05 | Jencina Akter Banu | Senior Executive Officer |
| 06 | A .H .M .Raihanul Alam | Executive Officer |
| 07 | Md. Ruhul Amin | Executive Officer |
| 08 | Md. Abdul Hakim | First Executive Officer |
| 09 | Ratan Kumar Kundu | First Executive Officer |
| 10 | S .M .Golam Feroz | First Executive Officer |
| 11 | Md. Kamruzzaman | Officer (General) |
| 12 | Md. Aynul Haque Shah | Officer (Cash) |
| 13 | Avijit Kumar Bormon | Provisionary Officer |
| 14 | Md. Faruk Alam | Provisionary Officer |
| 15 | Asit Sarker | Driver |
| 16 | Md. Sohel Mollah | Peon |
| 17 | Md. Motiur Hossain | Peon |
| 18 | Md. Abul Basar Mithu | Cleaner |
| 19 | Alam Mondal | Tea Boy |
| 20 | Md.Mehedi Hasan | Peon |
All the employees are well educated and well mannered. The performance of the branch in June, 2011, the deposit target was Tk. 8 Crore and achievement was Tk. 5.25 Crore, the import target was (Tk. 1.5 Crore) and achievement was (Tk. .90 Crore). In case of advance target was (Tk. 8 Crore) and achievement was (5.5 Crore). Most importantly, Profit position in June, 2011 is Tk. 1.10 Crore. Foreign Department plays a vital role in facilitating export and import of the country. It comprises of export, import and Foreign Remittance sections. Through these sections it opens letter of credit, provides different types of loans like; loan against trust receipt (LTR), Loan against imported merchandise (LIM) to its consumers. Naogaon Branch of Jamuna Bank Ltd. abides by all rules and regulations, policies and procedures relating to different banking activities strictly.
2.5 Product and Services:
Jamuna Bank Limited (JBL) engages in wide range of activities from small scale lending to large industrial project financing. It involves other many services. Its range of products & services at glance are as follows:
| Deposit | Loans And Advance | Foreign | Other service |
| Current account | Loans (General) | Demand draft | |
| Savings account | LTR (Quarterly) | Import L/C | Pay order |
| Short term deposit | Cash Credit Hypo | Foreign Remittance | Telegraphic transfer |
| Fixed deposit | Lease Financing (Monthly) | ||
| Other deposit under scheme | Loans Ag. Staff House Building | Selling and buying Foreign currency | |
| Special savings deposit scheme | SOD (Financial Obligation) | ||
| SOD (General) | |||
| SOD (FDR) | |||
| Consumer Credit Scheme | |||
| SME Loan | |||
| LDBP | |||
| PAD (Cash) | |||
| PAD (Back to Back) | |||
| Demand Loan ABP-(BTB L/C) | |||
| Demand Loan ABP-(D/P L/C) |
2.5 Product Description:
2.6.1 Deposit:
A total deposit of Tk.91 Crore in June 2011. Endeavor is underway for augmenting low cost deposit by accommodating good customers at competitive price. For healthy growth of business JBL puts emphasis on no cost and low cost deposit all the time. A number of savings schemes are in place for mobilizing long term deposits which can be planned to be invested in term loans in-the area lease finance, project finance and consortium finance with a view to having better yields. JBL’s such move will motivate the people to have good savings habit, as well. The position of deposit mix of the Bank as on 30.06.2011 is depicted below:
| Types of Deposit | No. of A/C As on 30.06.2011 | Amount of Deposit As on 30.06.2011 |
| Current Deposit | 1060 | 23658750.00 |
| Bills Payable | 400 | 10491312.00 |
| Savings Bank Deposits | 1841 | 46955992.00 |
| Fixed Deposit | 789 | 382093913.00 |
| Short term Deposit | 169 | 43163021.00 |
| Other Deposit Under Scheme | 759 | 23447367.00 |
| Special Savings Deposit Scheme | 4197 | 374697442.00 |
| Total Deposits | 8815 | 904507797.00 |
2.6.2 Current Account:
Most businessmen maintain current deposit accounts in order to make their daily business activities. This accounts funds change most frequently than any other accounts because customers use to withdraw and deposit funds in regular basis. JBL current account meets the needs of individual and commercial customers through the schedule benefit. A Current Deposit Account may be opened by individual, firm, company and club, association, body corporate etc.
I. Funds in the Current Deposit Account is payable on demand.
II. No interest is payable on balances of Current Deposit Accounts.
III. Current Deposit Account may be opened with a minimum initial balance of Tk.5,000/-
IV. Minimum balance to be maintained in the account is Tk.1,000/-
V. Customer willing to open Current Deposit Account shall fill up the Account Opening Form (AOF) applicable to him/ her and Specimen Signature Card (SS Card). The customer will sign in the space provided under “Yours faithfully” and on the specimen signature cards.
VI. In case of proprietorship and partnership firms the relevant account opening form is to be filled in and signed by the proprietor/ partner in their individual capacity in the space provided under “Yours faithfully” and on the specimen signature card in their official capacity.
VII. In all other cases including companies etc. the persons opening the account shall fill in the relevant Account Opening Form and sign the Form in the space provided under “Yours faithfully” and in the specimen Signature Card in their official capacity.
VIII. Introduction of acceptable clients to be obtained as per guidelines.
IX. The Manager’s approval for opening account shall be obtained by the concerned staff member.
X. Signatures of the account holder shall be admitted by affixing the stamp “Signature admitted” and signing by the authorized officer. The introducer’s signature shall be verified by affixing the stamp “Signature verified” near the signature by authorized officer.
XI. Blank space of the Specimen Signature Card should be closed by drawing parallel lines.
XII. The particulars of the Account Opening Form shall be entered in the Account Opened and Closed Register as per sequence provided by the computer system.
XIII. The customer shall be provided with Deposit Slip in corporating the Account Number and be advised to make the initial deposit in the account. The amount of initial deposit shall be entered in the Account Opening Form.
XIV. Cheque Book shall be issued on request on completion of all formalities including initial deposit. Cheque series to be entered in the Account Opening Form at the bottom right and authenticated by authorized officer.
XV. After posting of all particulars of the account including cheque series, one authorized officer shall check/ verify the same in the computer screen and record it in the form with signature.
XVI. Manager/ Authorized Officer shall apply sufficient intelligence and common sense to ascertain genuineness of the account holder. No account shall be opened without approval of the Manager.
XVII. Clear instruction regarding operation of the account shall be noted on the Account Opening Form and Specimen Signature Card especially in respect of death of inability of the account holders, or the person operating the account. The account holder shall confirm the instructions under specimen signature.
XVIII. An indemnity shall be obtained from the customer if he/ she signs in language other than English/ Bengali.
XIX. Illiterate persons shall be discouraged to open Current Account. If opened withdrawal shall be allowed on personal appearance of the account holder.
XX. The account opening form shall be sent to the respective computer terminal for posting and S.S. Card shall be retained serially in the S.S. Card Box under custody of Cheque Passing Officer.
XXI. One of the photographs of the Account Holder is to be pasted with AOF and another one with S.S. Card. AOF to be retained in serial order in Pasting File.
XXII. A letter of thanks to be sent to the account holder as well as to the introducer.
XXIII. All new accounts opened during the day shall be personally checked by the Manager at the close of business of each day.
XXIV. Checking officer shall particularly see the introduction, initial deposit in cash or cheque, nature of business of the account holder, Trade License, Partnership Deed/ Memorandum of Articles of Association, Resolution etc.
XXV. Similar Accounts should be noted in the AOF and care should be taken while making posting of transactions in such accounts.
XXVI. The Computer Program used by bank shall provide reference of clients. Branch Manager must ensure that their computer system provides reference of client.
XXVII. Classified Deposit Ownership Program to be maintained in the Computer System for facilitating periodical returns to Bangladesh Bank.
XXVIII. Bank shall provide monthly statement of account to clients as per computer system of the branch.
XXIX. If minimum balance of the account falls below Tk.2,000/- once during the half-year, incidental charge will be recovered as per Head Office Circular.
XXX. Bank at its discretion may close any account with prior notice to the account holder.
XXXI. In case of closure of account by the account holder, branch shall recover closing charges as per schedule of charges.
2.6.3 Short Term Deposit Account:
Deposits held in this account are payable on short notice. Normally corporate bodies, bank and financial organizations invest their funds temporarily. Now-a-days, private individuals having sound financial means also open this type of deposit accounts. The following rules shall apply:
I. Deposits held in STD Account are payable in 7 (Seven) days notice.
II. Cheque books may be issued to account holders for withdrawal of funds.
III. Repeated withdrawal without notice shall be discouraged.
IV. Interest is payable on balance held on daily product basis as per computer program used by bank.
V. For opening STD Account, AOF used for Current Deposit Account shall be used.
VI. Other formalities are similar to Current Deposit Accounts.
VII. Minimum balance requirement for accruing interest is Tk.100, 000 (Taka one lac) only.
2.6.4 Savings Account:
It is a sound savings for retail customer. Savings bank deposit is popular account maintained in banks. The bank provided Debit card facility for every savings account holder. Thus the account holder can withdraw money from any ATM booths available in the country. Any Person or Persons of more than 18 years having sound mind can open and operate this account singly or jointly. In case of a person below 18 years, a guardian can open and operate this account on his or her behalf. Clubs, Societies, Sole proprietorship firm, Partnership firms, Limited companies either public or private and other similar organization are eligible to open such account.
I. Savings Bank Account may be opened in the name of adult individual who are mentally sound and also jointly in the names of two or more persons payable to either or both or all of them or to the survivor or survivors.
II. Savings Bank Account may be opened in the name of a minor also.
III. Saving Bank Account may be opened in the names of clubs, societies, association and similar institutions and even by government and semi-government offices.
IV. Account shall be opened with at-least a minimum initial deposit of Tk.1,000/-.
V. Interest at the rates fixed by Head Office from time to time is applied half-yearly on the balances held on daily product basis. Now its interest rate is 5 %.
VI. Not more than one account is allowed to be opened in the same name. But this will not be applicable to parents willing to open more than one account in his/ her name in respect of each minor child.
VII. Savings Bank Account shall not be allowed to be overdrawn under any circumstances.
VIII. Account opening formalities like Current Account should be followed.
IX. Savings Bank Account should not be allowed to be operated like Current Account
X. Not more than 25% of the balance can be withdrawn without 7 days notice. Withdrawals in the account shall be allowed twice in a week.
XI. No interest shall be paid to such accounts in the month for violation of the above rules.
XII. Bank shall provide monthly-computerized statement of accounts to account holders instead of passbook.
XIII. Bank may at its discretion close any account with prior notice for repeated return of cheques due to insufficient balance.
XIV. Bank may recover charges up to a maximum of Tk.100/- per instances of cheque return.
2.6.5 Fixed deposit:
JBL offers fixed deposit for different interest rate for different period of time. In the receipt holders name and other particulars are kept as secrete documents on the bank. In the documents the name of nominee is also incorporated.
If any holder of the receipt wishes to en cash receipt before the maturity the bank usually do not pay the interest in the same rate but pays a lump sum amount of interest to the FDR holder.
Features
– Interest is compounded once a quarter
– Loan may be allowed up to 80% of the deposited amount under lien.
– Excise duty and source tax etc. are deductible from the depositor profit.
Interest rate:
1month and less than 3monthes- 10%
3monthes and less than 6monthes- 12%
6monthes and less than 12monthes- 12%
12monthes and Above- 12%
2.6.6 Monthly Saving Scheme (MSS):
Monthly saving scheme is a nature of time deposit and it was introduced in 1983. According to this scheme the investor was required to deposit a fixed amount of money per month Tk. 500/- Tk. 10000/- for a period of 5 years and 10 years. Profit on the invested amount is compounded at the rate of 12.42% for maturity. But the profit rate often varies as the bank follows Islamic shariah Banking Law. [Approximate amount shown in the following table
Table:B.4 Monthly Savings Scheme of Jamuna BankLtd.
| Monthly Installment | Maturity Amount After | Maturity Amount After | Maturity Amount After |
| Amount | 5 Years | 8 Years | 10 Years |
| 500 | 42300 | 81500 | 117900 |
| 1000 | 82600 | 163000 | 235800 |
| 1500 | 123900 | 244500 | 353700 |
| 2000 | 165200 | 326000 | 471600 |
| 3000 | 247800 | 489000 | 707400 |
| 5000 | 413000 | 815000 | 1179100 |
| 10000 | 826000 | 1630000 | 2358200 |
There are so many different types of deposit schemes are also available in Jamuna Bank Limited, Naogaon Branch. They are given below
| Scheme Name | Monthly installment Amount | Maturity Period |
| Pension Deposit Scheme | ||
| Marriage Deposit Scheme | ||
| Education Deposit Scheme | 800-4000 | 1 Years |
| Lakpoty Deposit Scheme | 975-2360 | 3-6 Years |
| Millionaire Deposit Scheme | 4500-23600 | 3-10 Years |
| Katipoty Deposit Scheme | 10525-232395 | 3-20 Years |
There are some Special Deposit Under Scheme. They are
| Name of Scheme | Maturity Period |
| Double Growth Deposit Scheme | 6 Years |
| Triple Growth Deposit Scheme | 9 Years |
SWOT Analysis
3.1 SWOT Analysis of JBL :
| STRENGTHS | WEAKNESSES |
| • Experienced top management. | • Marginal capital adequacy . |
| • Satisfactory capital base. | • Exposure to large loan? |
| • Low infection in loan exposure. | • Excessive dependency on term deposits. |
| • Prospective IT infrastructure. | • Weak fund management. |
| • High cost of fund. | |
| • Islamic Branch funds are not ring fenced. | |
| OPPORTUNITIES | THREATS |
| • Regulatory environment | • Increased competition in the market for |
| favoring private sector | quality assets. |
| development. | • Supply gap of foreign currency. |
| • Credit card. | • Over all liquidity crises in money market. |
| • Small and medium enterprises. |
Overall Banking System
4.1 Loans and Advances:
Though there was an unfavorable business environment due to political turmoil throughout the year JBL was in constant efforts to explore different areas of credit operation and could raise the credit portfolios to Tk.100 Crore in June 2011 with an increase of Tk.80 Crore (25%) over that of the preceding year. Its credit facilities were concentrated on Trade Finance, Agriculture and related sector, project finance, wholesale and retail trade, transport sector, hospital & diagnostic centers and syndicate financing for big projects, capacity additions to the manufacturing sector and structured financing for developing infrastructure of the country. Initiatives are underway for helping small and medium entrepreneurs in the ventures for which, in JBL, we are developing SME credit products and strategies. JBL has also increased lending activities to small consumers through Consumer Credit Scheme.
| Types of Loan | No. of A/C As on 30.06.2011 | Amount of Loan As on 30.06.2011 |
| Cash Credit | 130 | 225978961.00 |
| Lease Finance | 17 | 62394434.00 |
| Loan General | 3 | 148780383.00 |
| House Building | 2 | 18795423.00 |
| Overdraft | 241 | 94638063.00 |
| Retail Credit | 20 | 3610782.00 |
| SME | 32 | 15964877.00 |
| Others | 9 | 430126945.00 |
| Total | 454 | 1000289868.00 |
LENDING RATES OF VARIOUS TYPES OF LOANS AND ADVANCES
| No. | Particulars | Range |
| 01 | Term Loan to large and medium Scale Industry | 17.50% (Maximum) |
| 02 | Working Capital to large and medium Scale Industry | 16.50% (Maximum) |
| 03 | Trade Financing | 16.50% (Maximum) |
| 04 | House Building | 16.50% (Maximum) |
| 05 | Consumer Credit | 15.50% ( Mid-Rate) |
| 06 | Overdraft against – | |
| a) FDR
b) Schemes Deposit c) FDR/ Other Deposit instruments issued by other bank |
3.50% above FDR
15.50% ( Mid-Rate) 15.50% ( Mid-Rate) |
|
| 07 | Others | 15.50% ( Mid-Rate) |
SOME POPULAR CREDIT SCHEME:
Depending on the various nature of financing, all the lending activities have been brought under the following major heads:
4.1.1 CC Hypo (Cash Credit Hypothecation)
Cash Credit allowed against hypothecation of an asset is known as Cash Credit (Hypo) of goods on which charge of lending bank is created.
For Cash Credit (Hypo) Bankers take following precaution:
· The banker carefully verifies the stocks of the hypothecated assets and their market price.
· Obtains periodical statement of stock duly signed by the borrower.
· Ensure dial docks are duly insured against fire, burglary with bank clause.
· Obtains sufficient collateral securities.
· Identify that whether the goods are ready saleable and whether they have good demand in the market.
· Ensure the borrowers trustworthiness.
4.1.2 CC Pledge (Cash Credit Pledge) :
Cash Credit allowed against pledge of goods is known as Cash Credit (Pledge). For Cash Credit (Pledge) the borrower pledges his goods to the banker as a security against the credit facility. The ownership of pledge goods remains with thepledged. The bank remains the effective control of borrower but under lock and key of the bank stored in the custody of borrower but under lock and key of the bank. Banks appointed guards are taken care of those goods round the clock. The banks delivered the pledged goods to the party by turns against payment.
For Cash Credit Pledge following points are taken into consideration before allowing:
· Whether the quality of goods is ascertained.
· Whether the goods are easily saleable and those goods must have good demand in the market.
· The quality of goods is ensured. The goods cannot be perishable and will not deteriorate in quality as a result for short and long duration.
· The borrower has the absolute title of goods.
· The prices of the goods have to steady and are not subject to violent change.
· Goods should be stored in the presence of a responsible bank office.
· Ensure that stocks are duly insured against fire, burglary, with bank clause.
· Stocks must be invocated regularly byresponsible bank office.
· The locks of the store are scaled and keys are kept in the bank.
4.1.3 Overdraft:
The overdraft is always allowed on a special A/C operated upon cheques. The customers may be allowed a certain limit up to which he can overdraw within a specific period of time. In an overdraft A/C withdrawal and deposit can be made any number of times within the limit and prescribed period. Interested is calculated and charged only on the actual debit balances on daily product basis.
Overdraft are three types
1. Temporary overdraft (TOD)
2. Clean overdraft (COD)
3. Secured overdraft (SOD)
4.1.4 Temporary overdraft (TOD):
Temporary overdraft (TOD) is allowed to honor cheques which is future dated for the valued client without any prior arrangement. This kind of facilities is provided for short time.
4.1.5 Clean overdraft (COD):
Sometimes Overdrafts are allowed with no other security except personal security of borrowers.
4.1.6 SOD Secured overdraft (SOD) :
When Overdrafts are allowed against security is known as secured overdraft (SOD)
Purposes:
· To businessman for expansion of their business.
· To contractors and suppliers for carrying construction works and supply orders.
Securities:
· Lien on fixed/term deposits.
· Shares/Debentures/Protiraksha Sanchay Patra
· Insurance Policy.
· Mortgage on real estates and properties.
Interest Rate: 15.50 % per annum
4.1.7 Payment against Document (PAD) :
Payment made by the Bank against lodgment of shipping documents of goods imported through L/C falls under this head. It is an interim advance connected with import and is generally liquidated against payments usually made by the party for retirement of the documents for release of imported goods from the customs authority. It falls under the category “Commercial Lending”.
Eligibility:
PAD is generally granted to importer for import of goods.
Interest Rate: 15.50 % per annum
4.1.8 Internal Bills Purchased (IBP) :
This kind of arrangements is allowed for purchase of internal bills. Some times Contractors need money to his liquidity problem. To avoid thus kind of situation they want to take loan against their future dated cheque.
Eligibility:
Internal Bills Purchased is usually provided for future dated cheque against some service charge before 21 days of the maturity date.
4.1.9 Loan against Imported Merchandise (LIM) :
This is as similar as CC Pledge. But these loans are provided to the selected customers with internal contract.
Eligibility:
This loan is only for old and some special customers.
4.1.10 Loan against Trust Received (LTR):
Under this arrangement, credit is allowed against trust receipt and the exportable goods remain in the custody of exporter but he is required to execute a stamped export trust receipt in favor of the bank. Where the declaration is made that he holds Purchased with financial assistance of the bank lit trust for the bank.
Eligibility:
LTR is generally granted to exporter for exportation of goods.
Interest Rate: 15.50 % per annum.
4.1.11 Local/Foreign Documentary Bills Purchased (LDBP/FDBP) :
Under this arrangement, credit is allowed for exporter for or exportable goods. Banks provide all the agency commission. Its pay back period is 21 days.
Eligibility:
LDBP/FDBP is generally granted to exporter for exportation of goods.
Interest Rate: 15.50 % per annum
4.1.12 Letter of Credit:
Issuing letter of credit is one of the important services for JBL. A letter of credit is a document authorizing by the bank for a specific amount of money. Two types of L/C are provided by JBL.
Demand Loan ABP Back T o Back L/C)
Demand Loan ABP (Deferred Payment, L/C)
Eligibility:
This facility is given to the exporter/manufacturer /producer
Terms and Conditions:
· It should stipulate the name of the loan/credit/grant.
· It should bear the name of the designed bank.
· Item mentioned in the LCA form must contain with the permissible item.
4.1.13 Loans (General):
When an advance is made in a lump sum repayable either in fixed monthly installment or in lump sum and no subsequent debit is ordinarily allowed except by way in interest and incidental charges etc. This is loans (general). Loan is allowed for a single purpose where the entire amount may be required at a time or ina number of installments within a period of short Spam. After disbursement of the entire loan amount, there will be only repayment made by the borrower. Loan once repaid in full or in part cannot be drawn again by the borrower. Entire amount of the loan A/C in the name of the customer and is paid to hen through his SB/CD A/C. Sometimes loan amount are disbursed in cash.
This loan is repayable within few months or few years.
Securities:
1. Lien on fixed/term deposits.
2. Shares/Debentures/Protiraksha Sanchay Patra.
3. Insurance Policy
4. Mortgage of Real estates and properties
5. Hypothecation of stock/Stock/Machinery.
Interest Rate: 15.50 % per annum
4.1.14 Lease Finance:
Jamuna bank Ltd. is the first private commercial bank, in Bangladesh who introduced lease finance facilities for funding requirement of valued customers & growth of their business.
Lease Items:
· Vehicles like luxury bus, Mini bus, Taxi Cabs Cars, Pick-Up Van Etc.
· Factory equipment.
· Medical equipments.
· Machinery for agro based industry.
· Construction and office equipment.
· Sea or river transport and computer for IT education center.
Security /Collaterals:
The following securities are acceptable.
· Ownership of leased assets before the period of loan adjustment.
· Collateral securities in the form of land & building/Fixed Deposits/other cash collateral /Wage Earners Development Bond having liquidation value covering at least 100% amount of finance.
· Deposit of A category shares, National Savings Certificates, ICB Unit Certificates, assignment of life insurance policies, Bank Guarantee also be allowed as collateral securities.
· Creation of charge of axed assets of file existing industrial units requiring BMRE. Creation of charge on the existing vehicle will also be acceptable as securities.
Charges :Bank charges are modest and competitive.
Lease Deposit:
Before disbursement of lease finance, the lessee shall have to deposit 3 months rentals in advance, which will be adjusted at the end of the lease period.
Grace Period:
For capital machinery and equipment, maximum grace period of 6 (six) months may he allowed for installation/commercial production.
Payment Date:
Rental payments shall be made every month and there shall be three payment dates as detailed below.If Lease executed.
Between 1st to 10th ………5th of subsequent months
Between 11st to 20th……15th of subsequent months
After 20th ………………25th of subsequent months.
Insurance Coverage:
The vehicle /Equipment /Lease asset shall have to be covered bya comprehensive insurance policy throughout the whole lease term at lessees own cost in the name of Jamuna Bank Limited. The premium shall be on account of lessee.
Repair and Maintenance of Leased items:
The lessee is obliged to maintain the vehicle/Equipment in good working order and is solely responsible for any loss or damage as long as it is in his possession. Repair and maintenance cost for taking care of normal wear and tear and keeping it in good running condition during the lea–se, pen-0d shall’ be the responsibility of lessee.
Transfer price/Lease Renewal Rental:
On final adjustment of the lease finance, the lessee may have an option to purchase the equipment at 5% of the lease finance. Besides the above option, tile lessee may renew the lease on year-to-year basis or return, the equipment to the bank.
4.1.15 Consumer Credit Scheme :
Consumer credit is recently new field of micro credit activities; people who have limited income can avail of this credit facility to buy any household effects including car, computer, household and other commercial durables. JBL plays a vital role in extending the consumer credit.
Eligibility:
The borrower must be the employee of the following organization.
- Government Organization
- Semi- Government Organization
- Multinational Organization
- Bank and insurance Company
- Reputed Commercial Organization
- Professionals
Nature:
Mid term Micro Credit
Interest Rate: 15.50 % per annum
Terms and Conditions:
· Client will procure the specified articles from the dealer/agent /shop acceptable by the Bank.
· All of the papers /cash memo etc. related to the procurement of the goods will be in the name of bank ensuring ownership of the goods. The ownership will be transferred in the name of the client after full adjustment of Banks due.
· The clients will have to bear all the expenses of license, registration and insurance etc.
· The clients will have to bear the cost of repair and maintenance of the acquire articles.
4.2 International Trade Services:
4.2.1 Import Business:
The total import business handled by the Bank in June2011 was Tk.92.25 million compared to Tk.72.50 million in the preceding year registering a rise of Tk.19.75 million being 27.4 percent. A sizeable L/C’s were also opened by the Bank in the year under review. The import items included industrial raw materials, machinery, consumer goods, fabrics, accessories etc.
4.2.2 Export Business:
In Jamuna Bank Ltd. Naogaon Branch, there is export business.
Procedures for opening accounts:
Opening account with a bank is the way of creating a banker customer relationship. In other words, it is a contract between banker and customer. With this contract, bankers enter into certain obligations and responsibilities.
Proper introduction serves as a precaution against fraud and forgeries and safeguard against inadvertent overdraft to bank. Obtaining proper introduction may absolve the banker from the charges of negligence for conversion. So, while opening a new account, emphasis would be given without exception to introductory reference and inquiry. The following instruction to be followed while opening account: – Introduction of Account to be obtained from a respectable client acceptable to bank.
I.The introduction shall be obtained in writing in the respective column of Account opening form.
II. For opening savings bank account of individual either singly or jointly, passports and identity cards may be accepted for introduction, but subsequently proper introduction may be obtained.
III. Introduction of Current Account by members of the staff may be allowed but shall be discouraged as far as possible.
IV. Current Account shall preferably be introduced by another Current Account holder acceptable to bank.
V. Introduction of Account holder of other branch may be accepted with caution. In that case the introducer’s signature must be verified by authorized officer of that branch and authenticated by a forwarding letter.
VI. Photographs of account holder must be attested by the introducer.
VII. Letter of thanks is issued to introducer in Bank’s standard specimen.
Closing an Account:
During the study we were taught how to close a bank account before maturity. In order to close an account before maturity the holder has to place a written application to the bank. After receiving the application the bank will deduct service charge at an amount necessary for the respective account as closing fee from the balance and rest of the money is given to the account holder.
When Bank Closes an Account:
The relationship between bank and his customer is a contractual one and may be terminated by either of them. Bank closes an account in the following situations: -If a customer places written application to the bank to close his account.
a. If the customer does not properly follow the rules and regulations necessary to operate his account.
b. If the bank is notified the message of death of a customer.
c. If the bank receives a notice regarding the insanity of his customer.
d. If the bank receives a garnishee order from court.
e. Others.
Receipt of Cash:
Cash may be deposited either by deposit Slips for SB/ CD/ CC accounts or by other credit voucher like single credit voucher, pay order/ Draft/ T.T. application forms. Branches shall ensure the following:
I. Cash receiving officer shall check the deposit slip/ credit voucher/ application form as to its title of account, number and amount in words and figures.
II. The cash currency notes shall be counted physically /by cash counting machine as per denominations of the currency notes on the back of the voucher /deposit slip. The officer will enter the particulars in the cash Receiving Register and sign on the related deposit slip/voucher and affix “Cash Received” Stamp with date. He/she shall write the amount in words and figures in red ink across the deposit slip/voucher/ application form in token of receipt of the money. He /She shall send the register along with the deposit slip/voucher for signing on the same and authenticating the receipt in the register by the in-charge of the department.
III. The officer in-charge shall retain the original of deposit Slip and other vouchers and send them to respective desk for postings/actions. The duplicate voucher (counter foil) shall be handed over to the depositor/client.
IV. At the close of business the cash receiving officer shall add all the entries in the register and if agreed with the actual cash received by him, shall hand over the register for checking by officer-in-charge.
V. Receiving Cash officer will hand over the cash to the entire cash in-charge duly checked by him.
Payment of Cash:
Cheques, Cash Debit Vouchers, Fixed Deposit Receipts, Monthly Term Deposit Receipts, Bearer Certificates of Deposit, Demand Drafts, may be placed for payment at the counter by clients, beneficiaries and various departments for encashment. Branches shall ensure the following:
I. The instrument is checked for any apparent discrepancy and evidence of posting and cancellation.
II. Specimen Signature of cancellation officer shall be available with cash paying officer for convenience of payment.
III. On being satisfied, the cash paying officer shall count cash for payment and the denominations of notes are written on the reverse of the instrument invariably.
IV. Signature of the bearer is obtained on the reverse of the instrument and compared with the signature already obtained from the bearer while presenting the instrument.
V. If the presenter is found to be the same person, cash is handed over to the bearer/presenter.
VI. “Cash Paid” Stamp is affixed on the face of the instrument and signed by the cash paying officer.
VII. Particulars of the instrument are entered in the cash payment register.
VIII. Paid instruments are preserved with the cash paying officer.
IX. At the close of bank hour, the amounts entered in the cash payment register is totaled. The total must agree with the totals of cash paid.
X. The total is written in the cash payment register in words and figures.
XI. The officer-in-charge of cash department shall check the entries and instruments to ascertain that the payment has been made correctly and shall release the instruments from cash payment register by his initials against each entries in the cash payment register.
XII. The officer-in-charge also checks and signs the entries.
XIII. The cheques/instruments are sent to accounts department for stitching and preservation.
4.2.3 Remittance, Bills and Endorsements.
Payment of Telegraphic Transfer:
Receipt of message and verifying the below condition then payment
I. The in-charge and the manager verify the test message.
II. If the test-number, payees A/C number and title of the A/C does not agree a telex is sent to the branch concern asking them to rectify the message with correct test number and other particulars.
III. If the test-number agrees and all other information is correct, test agreed seal is affixed on the message and signed by the officers.
Where the payee does not have any account in the drawee branch a Pay Order/ Pay Slip is issued in favour of the payee an delivered to his banker on the same day.
Issue and Payment of Pay-Orders:
I. The customer is asked to fill up the application that is treated as a credit voucher for: Bills Payable Account-Pay-Order issued.
II. The voucher is given to the customer to deposit the cash with the cashier.
III. The cashier receives the cash and delivers the vouchers to Remittance Department against initials in his book.
IV. Pay-Order is prepared and entered in Pay-Order Issued Register. The amount of the Pay-Order is protect graphed.
V. The Pay-Order number is written on the vouchers.
VI. Pay-Order Register and the vouchers along with the register are sent to the officer-in-charge for checking and signature.
VII. After officer-in-charge’s signature, the pay-order and the voucher are sent to Manager/Second officer for second signature.
VIII. Acknowledgement of the purchasers of P.O. shall be obtained on the back of the counterfoils of the instruments.
IX. The vouchers are sent to Account Department.<