Banking System of NCC Bank Limited

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Banking System of NCC Bank Limited, Bangladesh

Chapter- 1


Chapter- 2

About The Internship

1.1) Definition of Internship

Internship is a process to achieve practical knowledge about some theoretical lesson. Its most important aspect is to acquire knowledge about the real position. As a practical subject, Management needs some practical knowledge. Marketing of Business studies includes an internship programs for its Bachelor of Business Administration (BBA) programs.

According to Polin Efro (1977).Social Research is such a scientific effort which tries to discover new information through some rational and organized system, which tries to examine the reliability of former information, and which tries to make to new theories, systems and conceptions to understand and Explain a human attitude .Practical work is achieved to fulfill our knowledge. In practical work, we can realize some problems and possible determinants of their solution.

1.2) Objectives of Internship

Primary objectives of internship are to provide some practical knowledge, which will increase the practical experience with theoretical knowledge managerial efficiency. It helps to achieve real knowledge, perfect investigation, above discussion of known and unknown matter, techniques and experience. However, we can mention the objectives program of internship in the following ways:

  • To show the guideline for searching various necessary information to solve the organizational problems.
  • To add new information with established ways.
  • To identify problems and recommends to solve them.
  • To realize what kinds off organization can contribute to the economic development of a country.
  • To determine entire actual situation of the organization.

Another important objective of practical training is to implement the knowledge of practical training in the practical life.

  • To prepare pragmatic report about entire management of organization.
  • To make comprehensive solutions of problems to increase the diversification and modification of marketing.
  • To show about the profitability, liquidity and solvency.
  • To investigate the techniques those are used in decision-making.
  • To show about the conditions of the Bank and its goodwill to the public.
  • To identify managerial problems and eradicate those.

1.3) Importance of Internship

Goods and services are produced for the purpose of using in daily life. Similarly,

Theoretical knowledge is acquired for the purpose of applying in the practical life.

The propensity of application of theoretical knowledge in practical life successfully internship program is absolutely necessary because theoretical knowledge will be fruitful if it can be applied in the practical life. When we can implement the theoretical knowledge practically, we can say the knowledge is successful; otherwise the achieved knowledge is valueless. Internship program is the way of implementing the theoretical knowledge practically. However, the importance of internship may be described in the following ways:

As internship program is the practical implementation of the theoretical knowledge, it helps to increase the quality and effectiveness of the trainer.

We can only know the problems of an organization in directly through theoretical knowledge, but we can know the nature of the problems, problems of the various departments, methods of solving the problems through the practical training. So it is very important to identify the problems and eradicate the problems.

The trend of all activities is an organization becomes growing through practical training.

  • To Innovate new technique of management.
  • To realize the present condition of the institution.
  • To make policy for development of the organization.
  • It mentally prepares for their professions.

Internship program acts as a bridge between theoretical knowledge and managerial practice. Internship acts as a guideline during the service period. By internship program students can understand limitations, shortages and practicability of their knowledge and thereby can take necessary action for removing these limitation and shortages.

1.4) Statement of the Problem

NCC Bank is playing a remarkable role for the economic and social development of Bangladesh. NCC Bank at Narsingdi Branch is also playing such type of role.

The activities of this bank are widely diversified. But I have got only 90 working days for my internship program.

These ninty working days programs are not sufficient to acquire complete knowledge about overall activities of the bank. So, it may have some sort of problems in deed besides there may have a big problem in collecting primary and secondary data. It is not abnormal that I may have problem of knowledge. Moreover, it might be said that data have reliable and valid as much as possible. So, I tried my best to prepare my report according to the information available to me.

Chapter- 3

About of study

2.1) Introduction

Bachelor of Business Administration (BBA) is a professional course. The course is designed with an excellent combination of practical and theoretical aspects. After completing BBA certain times is preserved for internship. As a student of BBA with the requirement of my course I was assigned to National Credit and Commerce Bank limited (NCCBL) to Narsingdi Branch, Narsingdi for my internship. However, I was very much interested to know how to develop banks. So I chose the research topic as “Overall Banking System and Performance Analysis of NCC Bank Ltd.”

They intend to ensure the trust and confidence of the customers through focused customer orientation, quality of service and state-of the art technology, transparency in dealing and adopting the best practices of Corporate Governance, achieving excellence in all the endeavors to create value for all the stakeholders. The significant challenge posed before them is the maintenance of the quality of business simultaneously with its information and business consolidation processes. This report is prepared based on the: topic “Overall Banking System and Performance Analysis of NCCBL. Due to this practice the remittance department of NCC Bank has been growing to provide a good participation in the profitability of the Bank.

Basically, this report is highlighted on overview of NCC Bank Ltd, Structure, Analysis, Present status, Performance of NCCBL, Deposit Mobilization, Utilization of Fund, Foreign Exchange, Own Experience, Recommendation and conclusion.

2.2) Scope of Study

Internship program gives me a great scope or opportunity for gather experience and knowledge in several areas of Banking by which I can evaluate or expose myself. During:-e first few week of my internship period, I was able to communicate most of the employees of the bank. During the first month I was able to accustom and adapted myself with the working environment of NCC Bank Limited. While preparing this report, I had a great opportunity to have an in depth knowledge of all the banking activities practices by the “NCC Bank Ltd”. It also helps me to acquire perspective of a leading private banking in Bangladesh. In term of Bank we can easily understand that the financial institution deals with money.

2.3) Objectives of the Study

Though the main objective is to prepare myself in such a manner as though I can equip myself with the practical field as well as I will be able to know the different aspect of the banking sector and to evaluate how a bank is performing in Loans and Advance sector. In addition, the study seeks to achieve the following objectives:

o To know the organizational framework of the bank

o To know the work environment and organizational behaviors of the bank

o To get through all the departments of the bank and observe the actual work done

o To find out how the general banking system works

o To see how the loans and advances are provided to the borrowers

o To acquire knowledge about the foreign exchange system of the bank

o To analyze the growth of deposits in the bank

o To analyze the growth of advances in the bank

o To analyze the growth of investments in the bank

o To compare the financial performance among several years of the bank and with other banks

2.4) Methodology

In collecting the necessary data, a special care has been taken so that all the variables may not affect the objectives of the study. Data needed for conducting the study have been collected from the following sources.

a) Primary source and

b) Secondary source

2.4.1 Primary sources

The primary data in this report mainly includes surveying the different departments of the Bank. It includes-

1) Scheduled survey

2) Observation while working in different desks

3) Informal discussion with professionals

2.4.2 Secondary sources

The permanent and printed sources of information. This are-­Annual reports of NCCBL

1) Desk report of related department

2) Brochures of National Credit and Commerce Bank limited

3) Different reference books

4) Study of related books, seminar paper, training papers, Publication of statements.

To collect information to prepare this report I have used secondary data analysis and survey method. Most of the information was collected by Secondary data analysis method. And the rest are collected through survey method. Before telling about my methodology, a brief discussion about the survey and secondary data analysis is given below:

  • Survey-This is a research method in which information is gathered from respondents by asking questions or by using questionnaire. Direct interviews, telephoning. Mails etc are also survey methods that give primary data.
  • Secondary data analysis-These are data that have been previously collected for some other projects than the one at hand. They can be collected from books, reports, the net etc.
  • In secondary data analysis-I have collected data from the training manual of NCC Bank Ltd. which is written by some of the department head of NCC Bank and faculties of BIBM, various credit manual of NCC Bank, various circular of Bangladesh Bank regarding Loans and Advances, files of loans issued etc.
  • In Survey method-I have talked with the bank officials of credit division of NCC Bank Ltd. Narsingdi Branch. They have informed me about the credit management of NCC Bank and gave me idea how it works. They have also answered me about many things which I thought necessary for my report. Beside that, they have explained me various terms and conditions which I found by doing secondary data analysis.

2.5) Rationale of the Study

The word “bank” refers to the financial institution that deals with money transaction. Commercial banks are the primary contributors of the economy of this country. On one hand they are borrowing money from the locals and on the other hand lending the same to the locals as loans and advances. So the people and the government are very much dependent on banks. Moreover, banks are profit earning concerns, as they collect deposits at the lowest possible cost and provide loans and advances at higher rate. The difference between two is the profit for the bank.

This report basically deals with the loan and advance management of National Credit and Commerce Bank Limited (NCCBL) covering the areas like General Banking, Loan and Advance, Foreign Exchange, Remittance, Financial Performance, Online Banking, etc.

The present study is a pioneering attempt in the field of overall activities of NCC Bank Ltd. It is true that, financial performance is really important for realizing original financial position of a bank. In general uses the term fund frequently is used to include

(i) Cash

(ii) Liquid assets

(iii) Current assets

(iv) Working capital

(v) Total resources Again,

According to other fund constitutes the prime importance in starting and operating any business enterprise is the raising and management of funds financial decisions are those which concern the flow of funds from various sources and use of such funds. Efficient management of finance ensures best use of resources to earn profit. Bank finance management is the key to short to intermediate term decision-making in today’s dynamic and volatile banking environment.

This study is taken to enlighten the basic inherent problems of the bank which need a in- depth analysis for the survival of the bank in the situation of its chronics financial problems, such as lack of expected loan recovery, huge outstanding loan, large amount of classified loan and excess overdue loan etc. For continued the present condition of this branch it is now essential to verity its efficiency or lack. As student of BBA (in Finance) I have considered all these matter and planned this study.

2.6) Limitations of the Study

1. Although I have enjoyed full co-operation from employees of NCCBL and they also gave me much time to prepare this report properly in the way of my study, I have faced some difficulties, which can be termed as limitations. They are as follows:

2. It should be certainly mentioned that time constraint is the first limitation of the study. Only three months is not sufficient for gathering perfect knowledge on the vast area of bank.

3. In some cases, they could not be able to supply my topic related data for preparing a more in depth research study. Office secrecy was one of the most important problems. Disclosing of some information was restricted.

4. In case of secondary data collection, there was very little secondary information. There were few support books, reports, journals, etc. moreover, the branch office had very little of this information. That’s why bulk of it had to be collected from the head office. As the officers were very busy with their day to day work, they could provide very little time.

I have also faced several problems during the preparation of this repost. Some of the limitations of this report are mentioned below:

  • Credit management is too big to cover: Credit management is a too big to cover wholly in this limited scope. It required huge time and huge space to cover. So, I have covered only some important topics of credit management.
  • Time constraint: I had to prepare this report within a period les than three month which was not enough to prepare such a report. Because collection and arrangement of information is a time consuming job. Then again I had to summarize those. So I had to work in haste.
  • Brief Description: As there was page limit, I gave a brief discussion about some topics which require more detailed description. As a result, some topics are not clear properly.
  • Very Little Ready made Information: The bank hasn’t adequate amount of ready made information. As a result, I had to find out the information from many files and documents, manuals etc. This job was difficult and time consuming.

The problems mentioned above are some of the major problems I have faced during the preparation of this report. In spite of that, I have tried my level best to make the report as good as I can.

Chapter- 4

About The NCCBL

3.1) Company Overview

NCC Bank Ltd. is one of the fast growing, leading and prominent bank in the private banking sector which is run by highly skilled professionals.

3.2) History of NCCBL

National Credit and Commerce Bank Ltd. bears a unique history of its own. The organization started its journey in the financial sector of the country as an investment company back in 1985. The aim of the company was to mobilize resources from within and invest them in such way so as to develop country’s Industrial and Trade Sector and playing a catalyst role in the formation of capital market as well. Its membership with the browse helped the company to a great extent in this regard. The company operated up to 1992 with 16 branches and thereafter with the permission of the Central Bank converted in to a full fledged private commercial Bank in 1993 with paid up capital of Tk. 39.00 corore to serve the nation from a broader platform.

Since its inception NCC Bank Ltd. has acquired commendable reputation by providing sincere personalized service to its customers in a technology based environment.

The Bank has set up a new standard in financing in the Industrial, Trade and Foreign exchange business. Its various deposit & credit products have also attracted the clients-both corporate and individuals who feel comfort in doing business with the Bank.

National Credit and Commerce Bank limited came to reality through the “National Credit limited”. Prior to conversion into a scheduled commercial bank, National Credit Limited(NCL) was incorporated as an investment company on 18th November 1985. It made its January on 25th November 1985 at its registered office and first branch at 7-8 Motijheel Commercial Area, Dhaka-1 000 with initial authorized capital of 1k. 30 crores. It was mostly involved in collecting suitable resources and making profitable investments. But within a very short period of time this investment company turned into a scheduled commercial bank. It was turned into a bank because it faced many restrictions both collection and disbursement of funds while it was operating as an investment company. While this turnover was going on all types of transactions were closed for about fourteen months from April 22”, 1992. After that, with the permission from the government and Bangladesh Bank, NCL was converted in a full fledged commercial bank and started its banking operation on 17thMay 1993, in the name of National Credit and Commerce Bank Limited. It has been registered under the company act-1913, as a private commercial bank with paid up capital of Tk.39 crores to serve the nation along with 16 branches.

However, NCCBL runs as per company rule, free from government intervention. Year 1994 & 1995 were the full operation year of the bank. During this period gave emphasis on considering the affairs of the institution as well as expansion of business work. During last 13 years if its operation NCCBL has acquired commendable reputation by providing sincere personalized service to its customers through a technology based environment.

3.3) NCC Bank – At Present

Having started its operations as a commercial bank in 1993, recovering from some primary difficulties, NCCB Bank has now emerged as a major player in the financial sector. Listed in both the Dhaka and Chittagong bourses since late 1999 with an IPO that raised the paid-up capital of the bank to Tk.39 crore, the current price levels of its shares and turnover in trading is evidence of its high rating among investors.

Banks are the pillars of the financial system. Specially, in Bangladesh, the health of the banking system is very vital because the capital market is little developed here. As the banks are still the major sources of credit and exercise great influence on the financial system, it is extremely important that the country’s banking system should be in good health in the interest of investment activities, meeting the needs of all kinds of finance and related matters.

Over the years, NCCB has built itself as one of the pillars of Bangladesh’s financial sector and is playing a pivotal role in extending the role of the private sector of the economy.

The bank has a strong branch network nation wide with 42 branches to effectively address the needs of its cross- segment customer base.

3.4) NCC BANK at a Glance

Authorized Capital 250 crore
Paid up Capital 97.5 crore
General and other Reserve 88.49 crore
Equity Fund 185.99 crore
Deposit 2147.82 crore
Loan and Advance 2053.3 crore
Import Business 1629.6 crore
Export Business 77.6 crore
Investment 301.45 crore
Operating Profit 101.8 crore
Profit Before tax 68.76 crore
Profit after tax 35.20 crore
Retained earnings 1.03 crore
Total asset 2611.4 crore
Fixed assets 30.81 crore
Number of Branch 42
No. of staff 1000
EPS 36.11
Dividend (Cash) 10%
Dividend (Bonus) 10%
Return on Equity 18.93
Return on Asset 1.35%
Capital Adequacy ratio 9.02
Classified loan 98.15
Provision against Classified Loan 40.57
Provision against Unclassified Loan 20.21
Loan / Deposit ratio 95.60 %

3.5) Activities of NCCBL

The world economy is going through various crises arising from insurgent activities at various parts of the globe. The turbulence also affected Bangladesh Economy adversely as well. Taka has been devalued. The political unrest caused devastation to the industrial and service sectors. The business community as a whole, apprehending imminent doom, tried to negotiate for a compromise among the various concerned parties. The bank earned a modestly satisfactory result during the year 2008, which contributed in continuing its steady growth in respect of all major indicators, namely Deposit, Advance, Profit, etc. During the year NCCBL has concentrated its focus to a number of income increasing sectors such as SME Financing, Inward Foreign Remittance, etc. Also it has put efforts to bring discipline in administering Banks Asset through various measures. As a whole, the outcome of these efforts was very positive and encouraging indeed. Prudent handling of Asset-Liability is of utmost importance for keeping up profitability at a satisfactory level of any financial institution. During last few years, with the timely measures taken by the Management under guidance of the Board, it was possible to sustain steady growth through maintaining asset quality.

The Bank has separate Credit Administration Department, Recovery Department and also a Task Force for continuous monitoring of difficult loans and advances of the Bank and to propose ways of recovery of Banks dues. This process will continue in upcoming years also. Further, the Bank will pay attention to manage liability also so as to build up a strong deposit base to satisfy investment need of the market. Over the last few years remittance business contributed remarkably in increasing fee based income of the Bank. In order to motivate and inspire the Bangladeshis residing abroad to send their hard earned money through legal Banking channel, NCCBL has taken a number of steps like making remittance arrangements with different money exchange companies all over the world, participating in fairs and meetings with remitters and exchange companies, etc. which brought result beyond expectation. It is a matter of pride that the Bank has been awarded various trophies from exchange companies like Money Gram for its initiatives in motivating people in this part of the world to avail of the opportunity of sending money through these enterprises.

The bank started FRPP, a jointly funded project by DFID in partnership with Bangladesh Bank under the grant facility called Remittances and Payments Challenge Fund (RPCF) where Thangamara Mohila Sobuj Shangha (TMSS), an NGO working for empowering the womenfolk of the country is a partner. Under this project the Bank is using not less than 250 outlets of TMSS to deliver remittance to the beneficiaries where it has no Branch.

NCCBL plans to continue this project even after expiry of the RPCF, if proved feasible.

The Bank has put due emphasis on grooming up its workforce in a technology based working atmosphere for some time. Also to cater the needs of the customers, very recently NCCBL started full-fledged real time On Line Banking System with implementation of Flora Banking UBS Software and introduced Debit Card in the brand name of ³MPower Card. The bank also introduced a foreign remittance payment card in the brand name of ³MBridge Card´. Banks Information Technology Division is always engaged in designing need based software and other programmers to ease the situation for the employees so as to enable them to work more dedicatedly to satisfy the customers. Of late financing in SMEs has been proven to be very beneficial for banking sector.

Banks have paid special focus to this sector to expand scopes of extending credit facilities to enhance sustainable profit. SME has been found to be a very potential avenue of financing, since it is believed that small and medium entrepreneurs are very hard working and sincere in paying back Banks money. Banks are optimistic that investing in this sector would not entail huge volume of default loan like conventional or cooperate financing.

3.6) Hierarchy of NCCBL

Organization Structure of Foreign Exchange Branch

3.7) Management of NCC Bank

The twelve 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. A Management

Committee headed by the CEO and Managing Director manages key issues. 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.

3.8) Profile of NCC Bank

NCCBANK CATEGORY-A Price Change % Change Open High Low Business Segment
National Credit And Commerce Bank Limited 48.7 4.1 9.19 44.6 49 42 Bank
Volume Outstanding Cap


No of Securities 52Wk




Face Value Market Lot
1.2775e+06 4501.0 450125330 712.00 42.00 10.0 50
Reserve & Surplus (mn) Market Capital (mn) Net Turnover (mn) Net Profit After Tax (mn) Year End Half Year End EPS

3.9) Branch Network of NCCBL

During the year the bank opened 08 branches which raised the total number of branches to 79.The bank has already taken steps to open 06 (Six) more new branches in 2011.

3.9.1 District Wise Branch Distribution

The branches of the Bank cover all the important trading and commercial centers in Bangladesh. As date, it has 65 branches within Bangladesh. All the branches are equipped with computers in addition to modern facilities, logistics and professionally competent manpower.

NCC Bank Ltd. is in the process of opening six more branches at important locations in the country.

3.10) Prime Minister Sheikh Hasina handing over a cheque for second year provided by NCC Bank Ltd.

Prime Minister Sheikh Hasina handing over a cheque for second year provided by NCC Bank Ltd. to Mrs. Dr. Rowshan Ara Begum, wife of Lt. Col. Lutfur Rahman Khan, an Army Officer killed in the BDR mutiny. Yakub Ali, Chairman and Mohammed Nurul Amin, Managing Director & CEO of NCC Bank and Nazrul Islam Mazumder, Chairman, BAB were also present on the occasion. Mentionable that NCC Bank have been paying Taka Forty thousand per month to the family of Late Lt. Co. Lutfur Rahman Khan for 10 years. The cheque for Taka four lac eighty thousand was handed over formally on last Sunday at Prime Minister’s Office.


National Credit and Commerce Bank Limited Registered office: 7-8, Motijheel C/A, Dhaka-1000, Bangladesh. PABX: 9561902-4, 9566283, 9563981-3, Fax: 880 2 9566290 Cable: NATCREDIT DHAKA, e-mail : Telex: 642821 NCL BJ, Web : RIGHTS OFFER This is for kind information of all concerned that the Securities and Exchange Commission (SEC) has accorded approval for issuing of Rights Share for raising the paid up capital of the Bank through issuance of 1,14,24,501(One crore fourteen lac twenty four thousand five hundred one) Ordinary Shares of Tk.100.00 each at par,totaling Tk.114,24,50,100(Taka one hundred fourteen crore twenty four lac fifty thousand one hundred) offered on the basis of 1 (one) Rights share for every 2(two)existing shares held on the Record Date. National Credit and Commerce Bank Limited has made such issuance with the objective to maintain its further growth and strengthen the capital base and to comply with the capital adequacy requirements of Regulatory Bodies and implementation of BASEL-II and other regulatory requirements of Bangladesh Bank. Applications for 1(one) Rights Share against every 02(two) existing shares along with the required amount of money (as per Rights Share Offer Document) shall be received at the under mentioned branches of the Bankers to the Issue from 11th April, 2010 to 6th May, 2010 during banking hours. All transactions above Tk.1.00(one) lac must be effected through Demand Draft/Cross Cheque/Pay Orders drawn on the same city/town where subscription money will be deposited. The ‘Record Date’ for determination of entitlement of Rights Shares will be on 16th March, 2010(Tuesday) Shareholders whose names will appear in the Register of Members of the company or in the Depository on the record date (i.e.on 16th March, 2010) are entitled to the Rights Shares. Shareholders must provide their B.O (Beneficiary Owner) Account Number for allotment of the Rights Share. The Rights Share Offer Document relating to issuance of Rights Share will be sent by post/courier service to the registered address of the Shareholders in due time. If the Rights Share Offer Document is not received in time, the concerned Shareholders are requested to contact Head Office, Share Department of the Bank at 7-8, Motijheel C/A, Dhaka-1000, during office hours.

3.10.2 Price Sensitive Information

This is for information of all concerned that the Securities and Exchange Commission (SEC) vides their letter No. SEC/SRMIC/94-09/688 dated 02.11.2010 have given consent to change the denomination of Share value (Face Value) of the shares of National Credit & Commerce Bank Ltd. from Tk. 100/- to Tk.10/- (Taka ten) each with change of market lot thereof from 50 to 250 (two hundred fifty ) shares.

The Board of Directors of the Bank as such, in its 219th meeting held on 2nd November 2010 has fixed the Record Date on 15.11.2010 (Monday) for change of Share value (Face value) of shares of the Bank from Tk.100.00 to Tk.10.00 (Taka ten) each and market lot thereof from 50 shares to 250 (Two hundred fifty) shares.

National Credit and Commerce Bank Ltd. Head Office: 7-8, Motijheel Commercial Area Dhaka-1000, Bangladesh Price Sensitive Information This is for kind information of all concerned that the Security and Exchange Commission (SEC) vide letter No. SEC/CI/RI-10/05-367 dated 23.02.2010 has accorded approval for issuing Rights Share by the bank for rising the paid up capital of National Credit and Commerce Bank Ltd. Through issuance of 1,14,24,501 Ordinary shares of Tk. 100.00 each at par, totaling Tk. 114,24,50,100.00 (Taka One Hundred Fourteen Crore Twenty Four Lac Fifty Thousand One Hundred) offered on the basis of 1 (One) Rights share for every 2 (Two) shares held on the record date. The “Record Date” for entitlement of Rights share, the period of subscription and list of Bankers to the Issue will be disseminated within 3 (three) working days from the date of this letter of approval, as per the Security and Exchange Commission (Rights Issue) Rules, 2006. Dated: Dhaka, February 23, 2010 Sd/- Md. Tarikul Islam Company Secretary.

3.10.3 Price Statistics

Price Statistics
Open Price : 44.6 Day’s High : 49
Last Trade Price : 49 Day’s Low : 42
Yesterday Close Price : 44.6 No. of Trade : 2232
Close Price : 48.7 Total Volume : 1277500
Total Value (mn): 60.0968

3.10.4 Snapshot of NCCB










11/25/10 – $84.50


03/2/10 – $27.08







NCCB Does Not Pay Dividends P/E TTM

K = Thousands M = Millions B = Billions

3.11) Objectives of NCCBL

The main objective is to maximize profit through customer satisfaction which very much reflects the idea of marketing concept. NCCBL has been ensuring maximum profit by avoiding best and improved customer service along with other corporate objectives mentioned below:

  • To provide excellent customer service to its clients, so that they choose NCCBL first for their banking.
  • Ensure high return on investment and services with different service products.
  • Making profitable investment and grow in annual profit management.
  • To remain as the market leader through diversification of business and automation of banking operations.
  • Customer driven focusing.
  • Total commitment of quality of services.
  • Ensure quality human resources inside of the organization.
  • Socio economic change through integration of credit.

3.12) Objective of Corporate Customers

Fast and Accurate Services

Effective Communication

Attractive Pricing (Annual fee 50% discount on card fee)

Strong Communication

Smiling faces of the Bankers

Good Ambience in the Bank

3.13) Our Corporate Offer

Particular Small (10-100) Medium (101-500) Large (500 above)
Card Fee 50% 50% (Negotiable)
Rate of Interest 2% 2% 2%
Cash Withdrawal 2% 2% 2%
Purchase 2% 2% 2%
Maximum period of interest free 45 Days 45 Days 50 Days
Replacement Card Fee Charges Charges Free
Late Payment Charge Charges Charges Free
Excess Over Limit Charges Charges Charges Free

3.14) Vision of NCCBL

The purpose of the bank is to become “The Bank of Choice” in the communities we serve. We accomplish this by offering to our customers the financial services they expect while providing a return to our owners. In accomplishing this mission, the bank has now been free from all the natures of a problem bank through fulfilling all the conditions set by the central bank. We proudly say: “NCCBL is’ profit-making and problem-free.”

To mobilize financial resources from within and abroad to contribute to Agriculture’s, Industry & Socio-economic development of the country and to play a catalytic role in the formation of capital market.

3.15) Mission of NCCBL

To become the Bank of choice in serving the Nation as a progressive and Socially Responsible financial institution by bringing credit & commerce together for profit and sustainable growth.

Philosophically, a bank is a financial institution, which accepts depositors’ money for safe-keeping and contracts with the depositors to lend this money at interest to individuals who are in need of its use and who can give ample security that the loans will be paid. From the profits made from lending money at interest the banker agrees to pay the legitimate depositors a fixed sum of interest besides safe-guarding the deposits. Moreover the bank follows the followings as its mission:

  • Maximize the profit within the shortest possible time
  • Try the best level to satisfy customers
  • Establish NCCBL as the best performing bank in the country.


At present the Board of directors consists of 25 members including the Chairman and Vice Chairman of the Bank. Out of 25 members 21 of them are the sponsors of the shareholders. Most of the members are reputed industrialist and businesspersons of our country.

The Chairman heads the Board. Each of the directors is the member of the Board. The members are obliged to maintain the annual general meeting anddeclare the dividend pay-out schedule on due time. Moreover, the committee selected by the shareholders represents individual body that then looks after the periodic issue with the management and tries to solve the problems. The Board has appointed the management, which is responsible for the welfare of the Banks directors. Some members of the Board have formed the Executive Committee. Which organizes a meeting in every week to deal with the minor issues such as promotion of cadre change of a confirmed employee? Conversely at least one meeting of the Board is held in every month to deal with major issues such as modification of the existing policy or major policy reforms.

3.16.1 The particulars of the Board are presented as under

Name Designation
Yakub Ali Chairman
Md. Harunur Rashid Vice Chairman
Mohammed Nurul Amin Managing Director & CEO.
Abu Mohsin Chairman, Executive Committee of the Board Principal
Mr..Wazhiullah Bhuiyan Chairman, Audit Committee of the Board
Mr. Tofazzal Hossain Chirman
Mr.Abdus Salam Director
Mr. A.S.M. Main Director
Uddin Monem Director
Nurul Islam Director
Mr. K.Z. Mahmud Director
Mr. Md. Shahjahan Director
Mr. Md. Mohamad Ali Director
Mr. Fakrul Anwar Director
Md. Abdul Awal Director
Masuda Begum Director
Amjadul Ferdous Chowdhury Director
Mahbubul Alam Director
Ainul Kabir Director
Mostafizur Rahman Director
Alhaj Md Director
Nurun Newaz Director
Md. Humayun Kabir Director
Din M. Rana Director


3.16.2 The Board of Directors has recommended stock dividend @ 47% for the year 2009.
The Board of Directors has recommended stock dividend @ 47% for the year 2009. Date of AGM: 30.05.10, Time: 11:00 a.m., Venue: Hall of Fame of Bangabandhu International Conference Centre, Sher-E-Bangla Nagar, Dhaka. Record Date: 08.04.10. The Bank has also reported EPS of Tk. 75.26, NAV Per share of Tk. 264.10 and Net Operating Cash Flow Per share of Tk. 86.82 for the year ended on As per clause 30 of DSE Listing Regulations, NCC Bank Ltd.has informed that a meeting of Board of Directors of the Bank will be held on 30.03.2010 at 3:10 PM for consideration of the accounts of the bank for the year ended on December 31, 2009 and for declaration of any entitlement for the shareholders.

3.17) Organizational Structure

Organization structures of NCC Bank Ltd. at Narsingdi Branch are as follows: Manager& Assistant Vice President, Assistant of Manager, Junior Officer, Asstt. Officer.

3.17.1 NCC Bank opens Narsingdi branch

NCC Bank Limited opened its 70th branch with online facility at Narsingdi on Thursday. Vice-chairman of the bank, Md Harunur Rashid, inaugurated the branch as chief guest, said a news release. Banks managing director and chief executive officer Mohammed Nurul Amin presided over the function while director Khairul Alam Chaklader attended as special guest.

Additional managing director Golam Hafiz Ahmed, senior executive vice president TM Faruque Chowdhury and senior vice president Fakhrul Islam Chowdhury were also present on the occasion.

3.17.2 Name of the Chief of the Organization

Md. Nazrul Islam Assistant Vice President & Manager of NCC Bank Ltd. at Narsingdi, Branch.

3.17.3 Number of Narsingdi Branch of the NCC Bank

The NCC Bank has 79 Branch in Bangladesh. At the Narsingdi branch is 73 numbers Branch of the NCC Bank. This Branch is opened in 2nd September in 2010.

3.17.4 Objectives of NCC Bank Ltd. at Narsingdi Branch

The main objectives of NCC Bank Ltd. are as follows:

3.18) NCC Bank holds managers’ Conference

The three-day ‘Executives & Branch Managers’ Annual Conference-2011’ of NCC Bank Ltd, began in Bogra yesterday.

M. Harunur Rashid MP, vice chairman of the bank, inaugurated the conference as the chief guest, said a press release.

Mohammed Nurul Amin, managing director and CEO of the bank presided over the conference while former Chairman Tofazzal Hossain, directors Ainul Kabir, Sohela Hossain and sponsor M. A. Quasem attended as special guests.

Additional Managing Director Golam Hafiz Ahmed, Deputy Managing Directors A K Md Siddique, Swapan Kumar Das, Mohabbat Khan and T. M. Faruque Chowdhury, other senior executives and branch managers of NCC Bank were also present on the occasion.

The conference informed that the bank procured total deposits of Tk 69.11 billion while total loans and advances stood at Tk 63.23 billion at the end of 2010.


Theoretical Discussion

4.1) Credit

The word “Credit” is derived from Latin word “Credo”, which means, “I believe”. It is usually defined as one’s ability to buy with a promise to pay. From a banker’s point of view, credit is the confidence of the lender on the ability and willingness of the borrower to repay the debts at a future date.

Banks charge a higher interest for loans than the deposit rate given to customers. The difference in rates is the profit for a bank. 80% of a banks profit comes from the interests. Loans and advances comprise a large portion of banks assets and this is the backbone of a bank’s structure. The strength of a bank is primarily judged by the soundness of its loans and advances. So, the loan and credit department is a very important department of a bank. Credit policy is very important. If a bank takes very strict credit policy, then the amount of loan will be less. If the credit polity is flexible, then the amount of loan will be much. But strict credit policy leads to lesser bad loans. Sometimes, credit policy cannot prevent customer’s bad intention of not adjusting loans. This is why, strict credit policy is very necessary for every banks for the safety of their investments.

The main features of credit policy of NCC Bank Ltd. have focus on the following areas:

I. Trade and Commerce

II. Industry

III. Lease Financing

IV. Consumer Financing

V. Small & Medium Enterprise (SME) Financing

Vi. Agriculture & Agro-based Ventures

Vii. Housing Loan Scheme

Viii. Real Estate & Civil Construction.

4.1.1 Modes of Credit
Credit can be categorized according to the nature and modes of payment.

(a) Term Wise Classification:

(i) Short term (=<1 year)

ii) Mid term (=>1 year to 5 years)

ii) Long term (> 5 years& above)

(b) Nature Wise Classification:
i) Loan: fixed in nature, for a particular term or time.

ii-) Advances: continuous in nature with no fixed repayment schedule but an expiry date, for example: Cash Credit (hypo), Overdraft etc.

(c) Purpose Wise Classification:

i).Working Capital: For manufacturing units to meet their short-term obligation and day-to-day expenditure.

ii) Fixed Asset Finance: For acquisition of long-term capital assets.

(d) Sector Wise Classification:

Commercial Lending: for commercial requirements except export. It is for short and medium from of loan. Example: LIM, LTR, PAD, SOD, Cash Credit, Loan General.

i. Industrial Credit:

ii. Agricultural Credit
iii. Transport Credit

iv .House Building Loan

(e) Classification based on Fund Involvement:

i. Fund Facilities: direct money involvement

ii. Non-Funded Facilities: where fund is not extended directly. Example:

4.1.2 Letter of Credit, Letter of guarantee, Bank Guarantee etc.

(1) Types of Credit in Foreign Trade:

i. Loan against Imported Merchandise (LIM)

ii. Payment against Imported Documents (PAD)

iii. Packing Credit (PC)

iv. Loan against Trust Receipt (LTR)

v. Back to Back Letter of Credit.

The Bank has made remarkable achievement in recovery of non-performing and classified loans advances during the period under review, As a result, Banks ratio of classified loans to total loans on December 31, 2006 has come down to 5.62 percent, from 5.66 percent of the previous year. This achievement was possible due to continuous monitoring, follow-up and negotiation with the clients.

4.1.3 Parties to a Letter Of Credit

A letter of credit is issued by a bank at the request of an importer in favor of an exporter from whom he has contracted to purchases some commodity or commodities. The importer, the exporter and the issuing bank are parties to the letter of credit. There are however, one or more than one banks that are involved in various capacities and at various stages to play an important role in the total operation of the credit.

a) The opening Bank.

b) The Advising Bank.

c) The Buyer and the Beneficiary.

d) The paying Bank.

e) The negotiating Bank.

f) The confirming Bank.

(a) The opening Bank: The opening Bank is one that issues the letter Of credit at the request of the buyer. By issuing a letter of credit it takes upon itself the liability to pay

the bills drawn under the credit. If the drafts are negotiated by another bank, the opening Bank reimburses that Bank. As soon as the opening Bank, issuing a letter of credit (L/C), it express its undertaking to pay the bill or bills as and when they are drawn by the beneficiary under the credit. When the bills are presented to or when antic is received that bills have been presented to a paying or negotiating Banks its liability matures.

(b) The Advising Bank: The letter is sent to the bank by mail or telex and forwarded by it to the exporter. The bank providing this service is known as the advising bank. The advising bank undertakes the responsibility of prompt advice of credit to the beneficiary and has to be careful in communicating all its details.

(c) The Buyer and the Beneficiary: The importer at whose request a letter of credit is issued is known as the buyer. On the strength of the contract that he makes with the exporter for the purchase of some goods that the letter of credit is opened by the opening bank. The exporter in whose favor the credit is opened and to whom the letter of credit is addressed is known as the beneficiary.

d) The paying Bank: The paying bank only pays the drafts drawn under the credit but under takes no opening bank, by debating the latter’s accounts with it if there is such an account or by any other measured up, between the two bankers.

e) Negotiating bank: The negotiating bank has to be careful in scrutinize that the drafts and the documents attached there to be in conformity with the condition laid down in the L/C. Any discrepancy may result in refused on the part of the opening bank to honor the instruments is such an eventuality the negotiating bank has to look back to the beneficiary for refund of the amounts paid to him.

f) The Confirming Bank: Sometimes an exporter stipulates that a L/C issued in his favor be confirm by a bank in his own country. The opening this country to add its confirming to the credit the bank confirming the credit is known as the conflrmin~ bank and the credit is known as confirmed credit.

4.1.4 Documentary Letter Of Credit (Import/Export Documentation)

Documentary letter of credit is such kinds of commercial letter which a bank issue on behalf of foreign seller (exporter) according to the direction of the (importers) purchasers. The documents shown under are known as export documents form the importer’s side. These are:­

(I) Bill of exchange: The bill of exchange is that particular instrument through which payment is effected in trade deals internal and international.

(ii) Bill of lading: A bill lading is a document of title to goods entitling the holder to receive the goods as beneficiary or endorsee and it is with the help of this document on receipt from the exporter that the importer takes possession of the goods . from the carrying vessel at the port of destination.

(iii) Airway bill I Railway receipt: When goods to be transported are small in bulk or requiring speedy delivery or those are perishable in nature on the deal is in between the neighboring countries then mode of transports other than shipping may be resorted to far the carriage of the goods Airways bill / Railway receipt take place of Bill ~of lading depending on the nature of the carrier.

(iv) Performa invoice: It is the seller’s bill for the merchandise. It contains a description of goods, the price per unit at a particular location, total value of the goods, packing specifications, terms of sale, letter of credit, bill of lading number etc. There is no standard form far a commercial invoice. Each exporter designs his own commercial invoice form. The invoice is made out by the seller under his signature in the name of the buyer and must be submitted in a set of at least 3 copies. Its main purpose is to check whether the appropriate goods have been shipped and also that their unit price, total value, marking on the package etc. are consistent with those given in other documents.

(v) Insurance policy: In the international trade insurance policy is a must to cover the risk of loss on consignments while they are on seas, roads, airways. The insurance is the responsibility of the buyers (consignee) under FAS, FOB and C&F contracts and of the seller (consignor) under CIF contract. The policy must be of the type as specified in the relative contract / credit. The policy would be for the value of CIF price plus 10 (ten) percent to cover the expenses and that is required to be obtained in the same currency as that of the credit and dated not later than the date of shipment with claims* being payable at the destination. It must be properly stamped. Like a bill lading it must be negotiable and be endorsed where it is payable to order.

(vi) Certificate of origin: This is a certificate issued by a recognized authority in exporting country certifying the country of origin of the goods. It is usually by the Chambers of commerce. Some times, it is certified by local consul or Trade Representative of the importing country as per terms of the credit.


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