Evaluation of General Banking and Foreign Exchange performance of Jamuna Bank Ltd

View With Charts And Images

“Evaluation of General Banking and Foreign Exchange performance of Jamuna Bank Ltd.”

Introduction

1.1 Introduction

Generally by the word “Bank” we can easily understand that the financial institution deals with money. But there are different types of banks like; Central Banks, Commercial Banks, Savings Banks, Investment Banks, Industrial Banks, Co-operative Banks etc. But when we use the term “Bank” without any prefix, or qualification, it refers to the ‘Commercial banks’. Commercial banks are the primary contributors to the economy of a country. So it can be said that Commercial bank is a profit-making institution that holds the deposits of individuals and business in checking and savings accounts and then uses these funds to make loans. For these people and the government is very much dependent on these banks as the financial intermediary. As, banks are profit-earning concern; they collect deposit at the lowest possible cost and provide loans and advances at higher cost. The differences between two are the profit for the bank.

Banking sector is expanding its hand in different financial events every day. At the same time the banking process is becoming faster, easier and the banking arena is becoming wider. As the demand for better service increases day by day, they are coming with different innovative ideas & products. In order to survive in the competitive field of the banking sector, all banking organizations are looking for better service opportunities to provide their fellow clients. As a result, it has become essential for every person to have some idea on the bank and banking procedure.

1.2 Objectives Of The Report

Broad Objective:

· Give an overview of Jamuna Bank.

· To explore General Banking activities of Jamuna Bank.

· To be accustom with the management policy or process of JBL in Bangladesh

· To explore Foreign Exchange activities of Jamuna Bank.

· To observe the working environment in commercial banks.

· To apply theoretical knowledge in the practical filed.

· To study the existing overall banker customer relationship.

Specific Objective

o To fulfill the partial requirement of the internship program as a full credit subject of the BBA program

1.3 Importance Of The Topic:

The topic that has been assigned by the supervisor is “Evaluation of General Banking and Foreign Exchange performance of Jamuna Bank Ltd”. The importance of this topic are given below…

· To describe the customer service process of JBL Bank Limited

· To know how the branches are efficiently controlled.

· To know the operation of commercial banks in Bangladesh

· To be accustom with the management policy or process of JBL in Bangladesh

· Give an idea regarding general banking system and Foreign Exchange.

1.5 Source Of Data:

In order to make the report more meaningful and presentable, two sources of data and information have been used widely.

The “Primary Sources” are as follows:

· Face to face conversation with the bank officers & staffs.

· Informal conversation with the clients

· Practical work exposures from the different desks of the departments of the Branch covered.

The “Secondary Sources” of data and information are:

· Annual report of Jamuna Bank ltd, (2008)

· Monthly reports

· Prospectus of Jamuna Bank Ltd (2008)

· Bangladesh bank publication

· Different textbook

· Different papers of Jamuna Bank Ltd

· Instruction circular and Information circular

· Unpublished data

1.6 Scope Of The Report

This report covered the over all banking system of JBL Bank Limited and also includes the relationship of the customers with the bank as well as the principals covered by the bank as a general banking system and foreign exchange.

1.7 Limitation:

The present study was not out of limitations. But as an intern it was a great opportunity for me to know the banking activities of Bangladesh specially Jamuna Bank Ltd. Some constraints are appended bellow:

· Every organization has their own secrecy that is not revealed to others. While collecting data i.e. interviewing the employees, they did not disclose much information for the sake of the confidentiality of the organization

· Difficulty in gaining accesses to financial sector.

· Non-availability of the most recent statistical data

· Since the bank personals were very busy, they could provide me very little time.

· The clients were too busy to provide me much time for interview.

Organizational Profile

2.0 Organizational Profile

2.1 Jamuna Bank Ltd. in Brief:

Jamuna bank ltd started its activities in June 03, 2001 and under the leadership of Late Mr. S A Chowdhury, 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. Alhaj Nur Mohammad became the honorable chairman after the demise of the honorable founder chairman.

This bank starts functioning from 3rd June 2001 with Mr. Abul Khair as the chairman and Mr. Solaiman Khan Mozlish 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 name of present chairman is Nur Mohamad and Managing Director Mohammad Lakiotullah who is one of the best MD in banking sector. The authorized capital and paid up capital of the bank are Tk.1000.00 million and Tk.313.87 million respectively. Shantinagar Branch of Jamuna Bank Ltd is opened in June 01, 2003. It is situated at 41 Chamilibag, Shantinagar, and Dhaka. The name of the present branch Manager is Md. Belal Hossain.

Customer service is the set of activities an organization uses to win and retain customer’s satisfaction. It can be provided before, during, or after the sale of the product or exist on its own. There are some elements of customer service and the Bank uses these elements, which are as follows:

Organization

1. Identify each market segment.

2. Write down the requirements.

3. Communicate the requirements.

4. Organize processes.

5. Organize physical spaces.

Customer care

i. Meet the customer’s expectations.

ii. Get the customer’s point of view.

iii. Deliver what is promised.

iv. Make the customer feel valued.

v. Respond to all complaints.

vi. Over-respond to the customer.

vii. Provide a clean and comfortable customer reception area.

Communication

viii. Optimize the trade-off between time and personal attention.

ix. Minimize the number of contact points.

x. Provide pleasant, knowledgeable, and enthusiastic employees.

xi. Write documents in customer-friendly language.

Front-line people

xii. Hire people who like people.

xiii. Challenge them to develop better methods.

xiv. Give them the authority to solve problems.

xv. Serve them as internal customers.

xvi. Be sure they are adequately trained.

xvii. Recognize and reward performance.

Leadership

xviii. Lead by example.

xix. Listen to the front-line people.

xx. Strive for continuous process improvement

2.2 Vision

To become a leading banking institution and to play a pivotal role in the development of the country.

2.3 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.

2.4 Features of Jamuna Bank ltd:

There are so many reasons behind the better performance of Jamuna Bank Ltd than any other newly established banks.

· Highly qualified and efficient professionals.

· Jamuna Bank ltd has established a core Research & Planning Division comprising skilled person from the very inception of the Bank.

· Jamuna Bank ltd has become a member of SWIFT system to expedite foreign exchange transaction.

· The inner environments of the all branches of Jamuna Bank ltd have been computerized to provide the promptly & frequently customer services.

· Jamuna Bank ltd provides the attractive interest rate than the other financial bank.

· The bank provides loan to the customers at lower interest rate with easy and flexible condition than the others do.

· Profit earning is not the main aim of the Jamuna Bank Ltd the bank is responsible to maintain the social duties.

· The bank frequent arranges customers meeting to achieve their valuable suggestions.

· Letter of Credit (L/C) commission and other change are very lower than the others bank

2.5 Strategies

· To strive for customer satisfaction through quality control and delivery of timely services

· To identify customers’ credit and other banking needs and monitor their perception towards our performance in meeting those requirements

· To manage and operate the Bank in the most efficient manner to enhance financial performance and to control cost of fund

· To review and update policies, procedures and practices to enhance the ability to extend better service to customers.

· To promote organizational effectiveness by openly communicating company plans, policies, practices and procedures to employees in a timely fashion

· To cultivate a working environment that fosters positive motivation for improved performance

· To diversify portfolio both in the retail and wholesale market

· To increase direct contact with customers in order to cultivate a closer relationship between the bank and its customers

2.6 Aims and Objectives

JBL is always ready to maintain the highest quality of services by upgrading banking technology prudence in management and by applying high standard of business ethic through its established commitment and heritage.

· Jamuna Bank Ltd is always ready to maintain the highest quality of services by upgrading banking technology prudence in management and by applying high standard of business ethic through its established commitment and heritage.

· JBL is committed to ensure its contribution to national economy by increasing its profitability through professional and disciplined growth strategy for its customer and by creating corporate culture in international banking area.

· The objective of JBL is not only to earn profit but also to keep the social commitment and to ensure its co-operation to the person of all level, to the businessman, industrialist specially who are engaged in establishing large scale industry by consortium and the agro-based export oriented medium & small scale industries by self inspiration.

· JBL is committed to continue its activities in the new horizon of business with a view to developing service oriented industry and culture of morality and its maintenance in banking.

· JBL has been working from its very beginning to ensure the best use of its creativity, well disciplined, well managed and perfect growth.

· JBL is always pre-occupied to encourage the inventors for purchasing its share by creating the opportunity of long-term investment and increasing the value of share through prosperity as developed day by day

2.7 Corporate Culture:

This bank is one of the most disciplined Banks with a distinctive corporate culture. Here we believe in shared meaning, shared understanding and shared sense making. Our people can see and understand events, activities, objects and situation in a distinctive way. They mould their manners and etiquette, character individually to suit the purpose of the Bank and the needs of the customers who are of paramount importance to us. The people in the Bank see themselves as a tight knit team/family that believes in working together for growth. The corporate culture we belong has not been imposed; it has rather been achieved through our corporate conduct.

2.8 Corporate Mission:

Will become most caring, focused for equitable growth based on diversified deployment of resources, and nevertheless would remain healthy and gainfully profitable bank. Jamuna Bank Ltd aims to become one of the leading Banks in Bangladesh by prudence, flair and quality of operations in their banking sector. The bank has some mission to achieve the organizational goals. Some of them are-

o Its aim to ensure their competitive advantages by upgrading banking technology and information system.

o JBL intend to provide better benefits to their customers and good returns to their shareholders.

o The bank intends to meet the needs of their clients and enhance their profitability by creating corporate culture.

o Jamuna Bank Ltd provides high quality financial services to strengthen the well-being and success of individual, industries, and business communities.

o The bank believes in strong capitalization.

o It maintains high standard of corporate and business ethics.

o Jamuna Bank Ltd extends highest quality of service, which attracts the customers to choose them first.

o The bank maintains congenial atmosphere for which people are proud and eager to word with Jamuna Bank ltd.

o JBL believes in discipline growth strategy.

2.9 Management of Jamuna Bank ltd:

For any financial and non-financial organization, Management is the most valuable and important resources of any kind of organization. And, a well-organize management provides the organization to reach its ultimate goal. Management means planning, organizing, staffing, directing and controlling of all financial and non-financial resources of an organization. Different aspects of management practice in Jamuna Bank Ltd are discussed below:

Planning

Jamuna Bank Ltd has done its planning within the purview of the corporate plan. The overall planning approach in Jamuna Bank Ltd is top-down. Each branch can plan according to the goal imposed by the corporate level. It doesn’t plan independently. And, Jamuna Bank Ltd has a planning division. This department is mainly responsible for the overall planning.

Organizing

Jamuna Bank Ltd is organized as per the existing business locations. It has twelve branches, each of which is a separate entity. Each unit is responsible for own performance and a Senior Vice President (SVP) followed by Manager Heads each. He is directly responsible for the performance of their unit. Within each branch it is organized functionally.

Staffing

The recruitment in Jamuna Bank ltd is done in two ways. One as a “Probationary Officer” for the management program and it has a probation period of one year. Another one is non-management level as “Trainee Officers”. Probationary Officer is recruited in officer category and their career path is headed towards different managerial jobs.

Directing and controlling

The management approach in Jamuna Bank ltd is top-down or authoritative. Information just seeks through lower management layer. Works are designed in such a way that one cannot leave without clearing the tasks as he is assigned for a day. Sitting arrangement in all office is done in a way that the superior can monitor the subordinate all time. Budgeting, rewarding, punishing, etc. are also practiced as control mechanism.

2.10 Human Resources Practices in Jamuna Bank ltd:

Employees are the core resources of any organization. Without them, one cannot run their organization. And, human resources approach is concerned with the growth and development of people toward higher level of competency, creativity and fulfillment. It helps employees become better, more responsible persons, and then it tries to create a climate in which they may contribute to the limits of their improved abilities. It assumes that expanded capabilities and opportunities for people will lead directly to improvements in operating effectiveness. Essentially, the human resources approach means that better people achieve better results.

2.11 Recruitment:

The set-vice rule of Jamuna Bank ltd states the recruitment policy of the bank. In, general the board of directors determines the recruitment policy of the bank from time to time. The minimum entry-level qualification for any official position other than supportive management is a Bachelors degree. However, informally the management prefers a minimum master’s degree for the appointed of probationary officers in the Executive Officer position. The recruitment for entry level positions begins with a formal written test which is conducted and supervised by the Institute of Business Administration, University of Dhaka. After successful completion of the written test, a personal interview is conducted for the successful candidates by a panel of experts comprising of renowned bureaucrats and prominent bankers of the country

General Banking Activities of

Jamuna Bank Ltd.

3.0 General Banking:

General banking department is the heart of all banking activities. This is the busiest and important department of a branch, because funds are mobilized, cash transactions are made; clearing, remittance and accounting activities are done here.

Since bank is confined to provide the services everyday, general banking is also known as ‘Retail Banking’. In Jamuna Bank ltd Principal Branch, the following departments are under general banking section:

· Account opening section

· Deposit section

· Cash section

· Remittance section

· Clearing section

· Accounts section

3.1 Account Opening Section:

Account opening is the gateway for clients to enter into business with bank. It is the foundation of banker customer relationship. This is one of the most important sections of a branch, because by opening accounts bank mobilizes funds for investment. Various rules and regulations are maintained and various documents are taken while opening an account. A customer can open different types of accounts through this department. Such as:

1. Current Account.

2. Savings account.

3. Fixed Deposit

4. Short Term Deposit (STD)

?Types Of Accounts With Terms And Conditions:

Current Account:

Current account is purely a demand deposit account. There is no restriction on withdrawing money from the account. It is basically justified when funds are to be collected and money is to be paid at frequent interval.

Some Important Points are as follows-

· Minimum opening deposit of TK.5000/- is required, but under special circumstances it may be opened with tk.1000.

· There is no withdrawal limit.

· No Interest more or less is given upon the deposited money;

· Minimum Tk.1000/= balance must always maintain all the time;

· Profit rate is 0.00%.

Savings Account:

This deposit is primarily for small-scale savers. Hence, there is a restriction on withdrawals in a month. Heavy withdrawals are permitted only against prior notice. Some Important Points are as follows-

• Minimum opening deposit of Tk.1000/= is required;
• Minimum Tk. 1000/= balance must always maintain all the time;
• Withdrawal amount should not be more than 1/4^th of the total balance at a time and limit twice in a month.
• If withdrawal amount exceed 1/4^th of the total balance at a time no Profit more or less is given upon the deposited money for that month.
• Profit more or fewer rates are 6.

Fixed Deposit:

The Local Remittance section of Jamuna Bank ltd Shantinagar Branch also issues FDR.They are also known as time deposit or time liabilities. These are deposits, which are made with the bank for a fixed period, specified in advance. The bank need not maintain cash reserves against these deposits and therefore, the bank offers higher of Profit more or less on such deposits.

· Opening of fixed Deposit Account: The depositor has to fill an account form where in the mentions the amount of deposit, the period for which deposit is to be made and name/names is which the fixed deposit receipt is to be issued. In case of a Joint name Jamuna Bank ltd also takes the instructions regarding payment of money on maturity of the deposit. The banker also takes specimen signatures of the depositors. A fixed deposit account is then issued to the depositor acknowledging receipt of the sum of money mentioned there. It also contains the rate of Profit more or less and the date on which the deposit will fall due for payment.

· Term Deposits: These rates are not negotiable. In this table we can find out the percentage that is given by the bank for specific period of time to the customer.

o Fixed deposit: 3 (three) month but less than 1 month Rate of Profit is 9.00%-9.50%

o Fixed deposit: 6 (six) month, but less than 12 month Rate of Profit is 9.25%-9.50%

o Fixed deposit: 12 (twelve) month & above Rate of Profit is 9.00%-9.50%

· Payment of Profit more or less: It is usually paid on maturity of the fixed deposit. Jamuna Bank ltd calculates Profit more or less at each maturity date and provision is made on that “miscellaneous creditor expenditure payable accounts” is debited for the accrued Profit more or less.

· Encashment of FDR: In case of premature FDR< Jamuna Bank ltd is not bound to accept surrender of the deposit before its maturity date. In order to deter such a tendency the Profit more or less on such a fixed deposit is made cut a certain percentage less the agreed rate. Normally savings bank deposit is allowed.

· Loss of FDR: In case of lost of FDR the customer is asked to record a GD (general diary) in the nearest police station. After that the customer has to furnish an Indemnity Bond to Jamuna Bank ltd a duplicate FDR is then issued to the customer by the bank.

· Renewal of FDR: In Jamuna Bank the instrument is automatically renewed from the date of its maturity if the customer does not come to en-cash the FDR the period for renewal is determined as the previous one.

STD (Short Term Deposit) Account

Normally various big companies, organizations, Government Departments keep money in STD account. Frequent withdrawal is discouraged and requires prior notice. The deposit should be kept for at least seven days or thirty days to get Profit more or less. The Profit more or less offered for STD is less than that of savings deposit. Profit more or less is calculated based on daily minimum product and paid two times in a year. Profit more or less rate is 5.50%.

? Account Opening Procedure:

?Documents Required For Opening Account

? Individual / Joint Account:

1. Introduction of the account.

2. Two photographs of the signatories duly attested by the introducer.

3. Photo Identity.

4. Joint Declaration Form (For joint a/c only).

5. Employee’s Certificate (in case of service holder).

? Partnership account:

1. Introduction of the account.

2. Two photographs of the signatories duly attested by the introducer.

3. Partnership letter duly signed by all partners (Sign should be similar as stated in Partnership Deed).

4. Partnership Deed duly certified by Notary public.

5. Registration (If any).

6. Resolution of meeting for opening an account.

7. Updated Trade license.

? Proprietorship account:

1. Introduction of the account.

2. Two photographs of the signatories duly attested by the introducer.

3. Valid copy of Trade License.

4. Rubber stamp.

5. TIN number certificate.

6. Photo Identity.

? Limited company:

1. Introduction of the account.

2. Two photographs of the signatories duly attested by the Introducer.

3. Valid copy of Trade License.

4. Board resolution of opening A/C duly certified by the Chairman/Managing Director.

5. Certificate of Incorporation.

6. Certificate of Commencement (In case of Public limited company).

7. Certified (joint stock) true copy of the Memorandum and Article of Association of the Company duly attested by Chairman or Managing Director.

8. List of directors along with designation & specimen signature.

9. Latest certified copy of Form – xii (to be certified by register of joint stock companies) (In case of Directorship change).

10. Rubber Stamp (Seal with designation of each person)

11. Certificate of registration (In case of Insurance Company – Obtained from department of Insurance from the Peoples Republic of BD).

? Club / Societies account:

1. Introduction of the account.

2. Two photographs of the Signatories duly attested by the introducer.

3. Board Resolution for Opening A/C duly certified by President/ Secretary.

4. List of Existing Managing Committee.

5. Resolution of meeting for opening an account.

6. Registration (if any).

7. Rubber Stamp.

8. Permission letter from Bureau of N.G.O. (In case of N.G.O. A/C).

?Closing Of An Account:

Theclosing of an account may happen,

· If the customer is desirous to close the account,

· If the Jamuna Bank ltd finds that the account is inoperative for a long duration.

· If the Jamuna Bank ltd get garnishee order from court.

A customer may close his/her account any time by submitting an application to the branch. The customer should be asked to draw the final check for the amount standing to the credit of his/her account less the amount of closing an other incidental charge and surrender the unused check leaves. The account should be debited for the account closing charge etc. and the authorized officer of the bank should destroy unused check. In case of joint account the application for closing the account should be signed by the joint account holder. The fee for closing of an account is Tk.50.

?Different Schemes:

Besides these types of account Jamuna Bank ltd offers some attractive and profitable schemes to its valuable clients. These are:

? Special Savings Scheme:

Savings helps to build up capital and capital is the prime source of business investment in a country. Investment takes the country towards industrialization, which eventually creates wealth. That is why savings is treated as the very foundation of development. To create more awareness and motivate people to save, Jamuna Bank ltd offers Special Savings Scheme.

The schemes are:

· Monthly saving scheme

· Monthly benefit scheme

· Double/ triple growth benefit scheme

· Lakhpati deposit scheme

· Milloiner deposit scheme

· Kotipati deposit scheme

· Marriage deposit scheme

· Education saving scheme

Terms and conditions of the scheme:

1. Any individual may invest their savings under this scheme. Double Growth Benefit Scheme may open by club or society, limited company, government organization, proprietary concern.

2. The period of deposit is for 3 (eight) years to 20 (twenty) years.

3. Any customer can open more than one account in a branch in different amount in his name or in joint names. A deposit receipt will be issued at the time of opening the account.

4. The depositor can avail loan up to 80% of the deposit under this scheme.

5. If the deposit is withdrawn after six months then savings rate profit will be applied before payment is made. However no Profit more or less will be paid if the deposit is withdrawn within six months.

6. In case of death of the depositor before the term, the deposit (with Profit more or less at savings rate profit) will be given to the nominee. Without nominee the legal heirs/successors will be paid on production of succession certificate.

7. In case of issuing a duplicate deposit receipt the rules of issuing duplicate receipt of Term Deposit will be applicable.

8. The government taxes will be deducted, if necessary, from the accumulated Profit more or less, in future.

Example:

· Money Grower (A Monthly Savings Scheme):

Secure your future with ease. A small savings today will provide you comfort tomorrow. To motivate people to save Jamuna Bank ltd offers above special schemes.

RULES:

1. A form has to be filled at the time of opening the account. No introduction is needed but attested photographs are advised.

2. The depositor can select any of the installment amounts, which cannot be subsequently changed.

3. In case of minors the guardians may open and supervise the account in his favor.

4. A single person can open more than one account for saving under several installment rates.

5. The accumulated deposit with Profit more or less will be returned within one month of completion of a month.

6. The depositor should notify the bank immediately on any change of address.

7. The government tax will be deducted from the Profit more or less accumulated in this scheme.

8. If necessary, at the request of the depositor, the scheme can be transferred to a different branch of the same Bank.

9. The Bank reserves the right to change the rules and regulations of the scheme as and when deemed necessary.

Savings Period And Monthly Installment Rate:

Monthly saving scheme:

· The savings period is for: 3,5,10 years.

· Monthly installment rate is Tk. 500, 1000, 1500, 2000, 3000, 5000, and 10000.

Monthly benefit scheme:

· The savings period is for: 6 months, 1, 3, 5 years.

· Annual installment is Tk 100000/-.

Double/ Triple growth benefit scheme:

· The savings period is for: 6 and 9.5 years.

· Annual installment is 100000.

Lakhpati deposit scheme

· The savings period is for: 3, 4, 5, 6, and 7, 10 years.

· Monthly installment rate is: Tk. 2395, 1695, 1275, 995, 800, 460.

Millionaire deposit scheme

· The savings period is for: 3, 4, 5, 6, 7, 10, 12, 15 years.

· Monthly installment rate is Tk. 23950, 16950, 12750, 9950, 8000, 4600, 3345, and 2170.

Crorepati deposit scheme

· The savings period is for: 3,4,5,6,7,10,12,15,18,20 years

· Monthly installment rate is Tk. 239500, 169500, 127500, 99500, 80000, 46000, 33450, 21485, 14330, and 11100.

Marriage deposite scheme

· The savings period is for: 5.5, 7.5, 10.5, 12, 15, 18 years.

· Monthly installment rate is Tk.1000 1500, 2000, 2500.

Education saving scheme

· The savings period is for: 4, 6,8,12 years.

· Monthly installment rate is Tk. 1000, 1500, 2000, 2500.

Monthly Saving Scheme (MSS):

1. The savings amount is to be deposited within the 10th of every month. In case of holydays the deposit amount is to be made on the following day.

2. The deposits may also be made in advance.

3. The depositor can have a separate account in the Bank from which a standing instruction can be given to transfer the monthly deposit in the scheme’s account.

4. In case the depositor fails to make the monthly installment in time, then 5% on overdue installment amount will be charged. This will be added with the following month’s installment.

Withdrawal:

Generally, withdrawal is not advised before maturity term, but if it is withdrawn before the above term, then Profit more or less will be paid at savings rate. However, no Profit more or less will be paid if the deposit is withdrawn within six months of opening the account.

Loan Advantage:

After two years of savings in this scheme the depositor (if an adult) is eligible for a loan up to 80%of his deposited amount. In that case, Profit more or less rates on the loan will be applicable as per prevailing rate at that time. Only Tk/-200will be collect for service charge.

Reasons For Disqualification From This Scheme:

1. If the depositor fails to pay 3 installments in a row, then he will be disqualified from this scheme and Profit more or less will be applicable as mentioned in withdrawal clause.

2. In case of death of the depositor the scheme will mark deceased to function. The amount will be handed over to the nominee of the deceased depositor. In case of absence of the nominee the bank will handover the accumulated amount to the successor of the deceased.

Example:

? Monthly Benefit scheme:

A monthly income scheme that really makes good senses a sure investment for a steady return.

Highlights Of The Scheme:

1. Minimum deposit Tk 100,000/-

2. Higher monthly income for higher deposit.

3. The scheme is for 6 months, 1, 3, 5 years.

4. Monthly income will be credited to the depositor’s account after one month.

Example:

Objectives:

1. An account is to be opened by filling up a form.

2. The Bank will provide to the customer a deposit receipt after opening the account. This receipt is non-transferable.

3. If the deposit is withdrawn before maturity term, then saving rate of profit will be applicable and paid to the depositor. However, no profit will be paid if the deposit is withdrawn within six months of opening the account and monthly income paid to the customer will be adjusted from the principal amount.

4. A depositor can avail loan/quard up to 80% of the deposit amount under this scheme. In this case, profit will be charged against the loan, the monthly income will be credited to the loan account until liquidation of the loan amount inclusive of profit.

3.2 Deposit Section:

Deposit is the lifeblood of a bank. From the history and origin of the banking system

We know that deposit collection is the main function of a bank.

Accepting deposits

The deposits that are accepted by Jamuna Bank ltd like other banks may be classified in to,

a) Demand Deposits

b) Time Deposits

Demand deposits:

These deposits are withdrawn able without notice, e.g. current deposits. Jamuna Bank ltd accepts demand deposits through the opening of –

a) Current account

b) Savings account

c) Call deposits from the fellow bankers

Time deposits:

A deposit which is payable at a fixed date or after a period of notice is a time deposit. Jamuna Bank ltd accepts time deposits through Fixed Deposit Receipt (FDR), Short Term Deposit (STD).

While accepting these deposits, a contract is done between the bank and the customer. When the banker opens an account in the name of a customer, there arise contracts between the two. This contract will be valid one only when both the parties are competent to enter into contracts. As account opening initiates the fundamental relationship & since the banker has to deal with different kinds of persons with different legal status, Jamuna Bank ltd officials remain very much careful about the competency of the customers.

3.3 Cash Section:

Banks, as a financial institution, accept surplus money from the people as deposit and give them opportunity to withdraw the same by cheque, etc. But among the banking activities, cash department play an important role. It does the main function of a commercial bank i.e. receiving the deposit and paying the cash on demand. As this department deals directly with the customers, the reputation of the bank depends much on it. The functions of a cash department are described bellow:

Functions of Cash Department

? Cash packing:

After the banking hour cash is packed according to the denomination. Notes are counted and packed in bundles and stamped with initial.

? Allocation of currency:

Before starting the banking hour all tellers give requisition of money through “Teller cash proof sheet”. The head teller writes the number of the packet denomination wise in “Reserve sheet” at the end of the day, all the notes remained are recorded in the sheet.

3.4 Local Remittance:

Carrying cash money is troublesome and risky. That’s why money can be transferred from one place to another through banking channel. This is called remittance. Remittances of funds are one of the most important aspects of the Commercial Banks in rendering services to its customers.

Types of remittance:

· Between banks and non banks customer

· Between banks in the same country

· Between banks in the different centers.

· Between banks and central bank in the same country

· Between central bank of different customers.

The main instruments used by the Jamuna Bank ltd of remittance of funds are-

· Payment order ( PO)

· Demand Draft ( DD)

· Telegraphic Transfer (TT)

The basic three types of local remittances are discussed below

· Test – key Arrangement: Test key arrangement is a secret code maintained by the banks for the authentication for their telex messages. It is a systematic procedure by which a test number is and the person to whom this number is given can easily authenticate the same test number by maintaining that same procedure. Jamuna Bank ltd has test key arrangement with so many banks for the authentication of LC message and for making payment.

· Commission for PO: Jamuna Bank ltd charges different amount of commission on the basis of Payment order amount. The bank charges for pay order are given in the following chart:

3.5 Clearing Section:

Cheque, Pay Order (P.O), Demand Draft (D.D.) Collection of amount of other banks on behalf of its customer is a basic function of a Clearing Department.

· Clearing: Clearing is a system by which a bank can collect customers fund from one bank to another through clearing house.

· Clearing House: Clearing House is a place where the representatives of different banks get together to receive and deliver cheque with another banks.Normally, Bangladesh Bank performs the Clearing House in Dhaka, Chittagong, Rajshahi, Khulna & Bogra. Where there is no branch of Bangladesh Bank, Sonali bank arranges this function.

· Member of Clearing House: Jamuna Bank ltd. is a scheduled Bank. According to the Article 37(2) of Bangladesh Bank Order, 1972, the banks, which are the member of the clearinghouse, are called as Scheduled Banks. The scheduled banks clear the cheque drawn upon one another through the clearinghouse.

· Types of Clearing:

A) Outward Clearing: When the Branches of a Bank receive Cheque from its customers drawn on the other Banks within the local clearing zone for collection through Clearing House, it is Outward Clearing.

B) Inward Clearing: When the Banks receive Cheque drawn on them from other Banks in the Clearing House, it is Inward Clearing.

· Types of clearing house: There are three types of clearing house: Those are

1) Normal clearing house

2) Same day clearing house

3) Special Clearing House

Normal clearing house:

1) 1^st house: 1^st house normally stands at 10 a.m. to 11a.m

2) 2^nd house: 2^nd house normally stands after 3 p.m. and it is known as return house.

Same day clearing house:

1) 1^st house: 1^st house normally stands at 11 a.m. to 12 pm

2) 2^nd house: 2^nd house normally stands after 2 p.m. and it is known as return house.

Special clearinghouse:

· 1^st house : 1^st house normally stands at 11 a.m. to 12 pm

· 2^nd house: 2^nd house normally stands after 7 p.m. and it is known as return house.

(Special clearing generally held on yearly, half yearly closing of Bank and sometimes Eid-ul Fatr and Eid Ul Azha)

· Who will deposit cheque for Clearing: Only the regular customers i.e. who have Savings, Current, STD & Loan Account in the bank can deposit cheque for collection of fund through clearing house.

· Precaution at the time of Cheque receiving for Clearing, Collection of LBC, OBC & Transfer:

1. Name of the account holder same in the Cheque & deposit slip.

2. Amount in the Cheque & deposit slip must be same in words & in figure

3. Date in the Cheque may be on or before (but not more than six months

4. back) clearing house date.

5. Bank & Branch name of the Cheque, it’s number & date in the Deposit slip.

6. Cheque must be signed.

7. Signature for confirmation of date, amount in words / in figure Cutting &

8. Mutilation of Cheque.

9. Cheque should be crossed (not for bearer Cheque).

10. Account number in the deposit slip must be clear.

11. Depositor’s signature in the deposit slip.

Return House:

Return House means 2^nd house where the representatives of the Bank meet after 3 pm. to receive and deliver dishonored Cheque which placed in the 1^st Clearing House.

Cheque May Be Dishonored For Any One Of The Following Reasons:

1) Insufficient fund.

2) Amount in figure and word differs.

3) Cheque out of date/ post- dated.

4) Payment stopped by the drawer.

5) ………….Payee’s endorsement irregular / illegible / required.

6) Drawer’s signature differs / required.

7) Crossed Cheque to be presented through a bank.

8) Other specific reasons not mentioned above.

The dishonor Cheque entry in the Return Register & the party is informed about it. Party‘s signature required in the return register to deliver the dishonor Cheque. After duration, the return Cheque is sent to the party’s mailing address with Return Memo.

Dishonor of Cheque:

If the Cheque is dishonored, JBL sends a memorandum (Cheque returns memo) to the customer stating the reason in the following way,

· Refer to drawer

· Not arranged for

· Effects not cleared. May be presented again.

· Exceed arrangements

· Full cover not received.

· Payment stopped by drawer

· Payee’s endorsement irregular/ required.

· Payees endorsement irregular, require banks confirmation.

· Drawer’s signature differs/ required.

· Alterations in date/figures/words require drawer’s full signature.

· Cheque is post dated/ differs.

· Crossed Cheque must be presented through a bank.

· Clearing stamp required/ requires cancellation.

· Addition to bank discharge should be authenticated.

· Cheque crossed “account payee only”

· Collecting bank discharge out of date/