“General Banking Activities and Performance Analysis of Trust Bank Limited.”
Generally by the word “Bank” we can easily understand that the financial institution deals with money. But there are different types of banks such as; 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 we can say Commercial banks are a profit-making institution that holds the deposits of individuals & business in checking & savings accounts and then uses these funds to make loans. Both general public and the government are dependent on the services of 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.
Efficacy of customer service is related with progression of operation. We can identify the efficacy of customer service by studying the progress of “Trust Bank Ltd.” From starting to at present. The progress of “The Trust Bank Ltd.” is very rapid with the concern of its profit making and growth of its operation within the country towards the country’s economy.
Trust Bank Limited pursues decentralized management policies and gives adequate work freedom to the employees. This results in less pressure for the workers and acts as a motivational tool for them, which gives them, increased encouragement and inspiration to move up the ladder of success. Overall, I have experienced a very friendly and supporting environment at TBL, which gave me the pleasure and satisfaction to be a part of them for a while. While working in different departments of this branch I have found each and every employee too friendly to me to co-operate. They have discussed in details about their respective tasks. have also participated with their works.
1.3.1 OBJECTIVE OF THE STUDY
The objective of the Internship program is to familiarize students with the real market situation, to compare them with the business theories & at the last stage make a report on assigned task. The main objective of this report is to have an assessment about overall activities of “Trust Bank Ltd.”. How the Bank is providing facilities to its clients & to suggest remedial measure for the development of overall banking activities of “TBL”. In addition, the study seeks to achieve the following objectives:
1.3.2 SPECIFIC OBJECTIVE
- To present an overview of “ Trust Bank Ltd. ”
- To get an overall idea of banking operation from banker’s point of view.
- To study deposit mobilization mechanism and the performance of “Trust Bank Ltd” in terms of deposit mobilization
- To study the investment mechanism and evaluate the performance of “TBL.”
- To understand the recent complexity of banking in Money Laundering. And
- To understand the issue of corporate governance in the banking sector and highlighting the product of “TBL”.
- To identify the limitations in the operation of “Trust Bank Ltd.”
- To recommending some guidelines to improve the overall banking performance of “TBL”
1.4 SCOPE OF THE REPORT
This internship report covers all the trade related products handled by the “Trust Bank Ltd.” such as Foreign Exchange, Cash Dept., Dispatch, Account Opening, Remittance, Accounts, Administration and Loans & Advances etc.
This report has been prepared through extensive discussion with bank employees and with the customers. While preparing this report, I had a great opportunity to have an in depth knowledge of all the banking activities practiced by the “Trust Bank Ltd.” It also helped me to acquire a first hand perspective of a leading private Bank in Bangladesh.
Data collection procedure
This report is the output of 6 weeks long internship program by analyzing the qualitative information collected from secondary sources that contain past and present facts and figures, and conditions of the Trust Bank Limited. This report is based on both primary & secondary information. Majority of the information was collected from secondary sources.
· Conversations with officers & employees of the branch.
· Interactions with the customers at TBL.
· Annual reports,
· Official documents,
· Relevant books
· Journals, and other publications
· Term papers of TBL Training manuals
· Internet & various web sites of TBL.
· Prior research report.
1.6 CONCEPTUAL FRAMEWORK OF THE REPORT
The present study was not out of limitations. But it was a great opportunity for me to know the banking activities of Bangladesh specially “Trust Bank Ltd.” Some constraints are appended bellow—
- The main constraint of the study is inadequate access to information, which has hampered the scope of analysis required for the study. As it is a new bank it could not start all its operation, it was unable to provide some formatted documents data for the study.
- Due to time limitations many of the aspects could not be discussed in the present report.
- 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.
- Another problem is that creates a lot of confusions regarding verification of data.
- The clients were too busy to provide me much time for interview.
- I have had no opportunity to compare the general banking system of the TBL with that of other contemporary and common size banks. It was mainly because of the shortage of time and internship nature.
2.1 BACKGROUND OF “TRUST BANK LTD”
The Trust Bank Ltd. is a private, commercial, scheduled Bank, which obtained license from Bangladesh Bank on July 15, 1999. Presently Army Welfare Trust is the major shareholder. The authorized capital of the Bank is Taka two thousand million and paid-up capital of Taka five hundred million. The Bank was formally inaugurated and listed as a scheduled Bank on November 1999.
The idea of setting up a Bank by Bangladesh Army was first conceived in 1987 and on November 29, 1999 the first branch of the Trust Bank Ltd came in to operation
Composition of the Board of TBL consists of Ex-officio Directors of in-service senior Army personnel, with the Chief of Army Staff as its Chairman and the Adjutant General as its Vice-Chairman.
The Trust Bank Ltd. having a spread network of 35 branches across Bangladesh and plans to open few more branches to cover the important commercial areas in Dhaka, Chittagong, Sylhet and other areas in 2008. The Bank sponsored by the Army Welfare Trust (AWT), is first of its kind in the country with a wide range of modern corporate and consumer financial products. The Trust Bank Ltd. has been operating in Bangladesh since 1999 and has achieved public confidence as a sound and stable Bank.
In addition to ensuring quality Customer services related to general banking the bank also deals in Foreign Exchange transactions. In the mean time the bank has extended credit facilities to almost all the sector of the country’s economy. The bank has plans to invest extensively in the country’s industrial and agricultural sectors in the coming days.
It has also plans to promote the agro-based industries of the country. The bank has already participated in syndicated loan agreement with other banks to promote textile sectors of the country. Such participation would continue in the future for greater interest of the overall economy. Keeping in mind the client’s financial and banking needs, the bank is engaged in constantly improving its services to the clients and launching new and innovative products to provide better services towards fulfillment of growing demands of its customers.\
o CORPORATE INFORMATION AT A GLANCE
- Banking License received on : 15th July. 1999
- Certificate of incorporation received on : 17th June 1999
- Certificate of Commencement of business received on : 17th June 1999
- First branch licenses on : 9th August 1999
- Formal inauguration on : 29th November 1999
- Sponsor Shareholders : Army Welfare Trust
- Number of Branch : 35
2.2 NATURE OF BUSINESS:
The Trust Bank Ltd offers full range of banking services that include:-
- Deposit banking
- Loans & advances
- Financing inland
- International remittance facilities
The bank offers a full scale commercial banking includes:–
- Foreign Exchange transactions
- Consumer & Corporate Banking
The bank has plans to invest extensively in the country’s industrial and agricultural sectors in the coming days. The bank has participated in syndicated loan agreement with other banks. Such participation would continue in the further for greater interest of the overall economy. The bank is keen to constantly improve its services to the clients and launching new & innovative products to provide better services towards fulfillment of growing demands of its customers.
Trust bank limited recently at the end of the year 2006 changed their name from “The Trust Bank Limited” to “Trust Bank Limited” and also changed their logo to bring the bank more closer to the general public.
“Previous Logo” “New Logo”
2.3 BOARD OF DIRECTORS
General Moeen U Ahmed, ndc, psc
Chief of Army Staff, Bangladesh Army
Maj Gen Md Matiur Rahman, ndu, psc
Adjutant General, Bangladesh Army
Brig Gen Md Zillur Rahman, MCPS, MSC
Brig Gen S M Mahbubul Karim
Brig Gen Md Rafiqul Islam, ndc, psc
Brig Gen Mohd Mahbubul Hasan, ndc, psc
Brig Gen Md Aminul Hasan, ndc, psc
Professor Md. Abdullah
Mr. Iqbal U Ahmed
Mr. Farhad Uddin
2.4 Organizational Structure of Trust Bank Ltd.
2.5 Vision Statement of “Trust Bank Limited”
- To build a sustainable and respectable financial institution.
- To be a leading Commercial Bank, with a social focus, assisting in the economic development of the country.
· The Profit of the bank used for the Socio-economic development of the members of the Bangladesh Army and thereby the nation as a whole.
2.6 Mission Statement of “Trust Bank Limited”
- Achieving sound and profitable growth in Assets & Liabilities, with focus to maintain non-performing assets at acceptable levels.
- To build long-lasting, credible and mutually dependable relationships with customers.
- Efficiently managing interest and operating costs.
- To excel in rendering superior customer service.
- To be the preferred employer among Banks in Bangladesh.
The bank now continues its operation with 35 branches across the country mainly in Dhaka, Chittagong, Jessore, Sylhet, Sirajgong and Mymensingh. The district wise pictorial presentation of the branches appears as follows:
Thirty Five branches of Trust Bank Limited are located in the following areas:
|Branch ID||Branch Name||Branch Address||Branch Phone Number|
|0001||Head Office||Peoples Insurance bhaban|
36,Dilkusha C/A (2nd, 16th, & 17th Floor Dhaka-1000 )9570261,9570263,
Fax – 880-2-95723150002Principal Branch (PB)98 Shaheed Sarani,
Dhaka Cantonment, Dhaka-12069871074,9871095,9888068
Fax – 8750011
Ext – 7506 (Army)0003Sena Kalyan Bhaban (SKB)Sena Kalyan Bhaban, 195, Motijheel C/A, Dhaka-1000Chief Manager : 7121263
Manager : 9561721
PABX – 7126157, 956051 FAX – 880-2-71639770004Bogra Cantonment BranchBogra Cantonment,
Fax : 051-784160005Comilla Cantonment BranchComilla Cantonment,
Fax – 770230006CTG Cantonment BranchBangladesh Tea Board Bhaban
171-172 Baijid Bostami Road Nasirabad, Chittagong031-2581170(T&T-PABX) 031-2581171(T&T-PABX) 031-2581172(Fax) 031-683680(Direct) 031-681551-9,Ext-3178(Army) 01914403178(Mobile) 01713400503(Mobile)0007Rangpur Cantonment BranchRangpur Cantonment,
Fax – 0521-673710008Jessore Cantonment BranchJessore Cantonment01713-400503,0421 61043
Ext – 3178
Fax – 0421 610430009Mymensingh Cantonment Branch Mymensingh Cantonment Branch Mymensingh.01713-039178,091 55601-3
Ext – 3178, 09162371,
Fax – 091 623710010Saver Cantonment Branch Saver Cantonment, Saver, Dhaka01713-034198, 01715407266,
Fax – 77084040011Jalalabad Cantonment Branch Jalalabad Cantonment Branch
Jalalabad , Sylhet01713-046337,0821-2872135, 710001-6
Ext – 2365, 3178
Fax – 0821 7621350012Agrabad Branch 109 Shilpa Bank Bhaban , Chittagong01713-104241, 031-720188, 031 814462-3
Fax – 031-7157910013Shaheed Salauddin Cantonment Branch Shaheed Salauddin Cantonment,
Ext – 3178
Fax – 09225 561410014Dhanmondhi Branch BDR Gate No – 4, PeelKhana , BDR
Head Quarters, Dhaka0171-3014641
Fax – 96775710015Khatungonj Branch 205, Main Road, Plot No- 218,
Kahtunganj, Chittagong01713-103481,031 627860,
Fax – 88 031 8417190016Gulshan Corporate Branch 110 Gulshan Avenue, Dhaka0171-30360174, 8828088,
Fax – Ext – 132, Foreign Exchange – 1150017Dilkusha Corporate Branch Peoples Insurance Bhaban
36, Dilkusha C/A (1st Floor)
Dhaka -10000171-3062127, 9560944
Fax – 95607930018Raddisson Branch Airport Road, Joar Sahara, Dhaka07173-090078, 8752066,
Fax – 87520650019Khaja Yunnis Ali Medical College & Hospital Branch Enayetpur, Sirajgonj01713-047399, 01710660415
Fax – 880751638530020CDA Avenue Branch Holding No – 1827(New),
Elite House (1st & 2nd floor), CDA Avenue, Chittagong01713- 043157,
031 2550936 -7 Ext -133
Fax – 88 031 25509360021Sylhet Corporate Branch BMA Bhaban, Chowatta, Kotoewali,
Fax – 0821 7191390022Millenium Branch Beer Shrestho ShaheedJahangir
Gate 546, Dhaka Cantonment
Dhaka-120601713-034197, 02 87120756,
Fax – 88 02 87120750023Uttara Branch Holding 111/A (Ground & 1st floor)
Road 7, Sector 4,
Uttara, Dhaka – 123007173-062127, 8911052
8921312, 89226500024Halishahar Branch Monirat Plaza, 230/A, Block – G
Road – 4 , Port Connecting Road
Barapool , Halishahar01819-313708,
Fax – 031 25125910025Biani Bazar Branch Al Amin Super Market
College Road , Beanibazar sylhet01716-929400
Fax – 08223 560090026Moulovibazar Branch Holding-10, Court Road,
Thana – Kotwali
Fax – 0861 628840027Goala Bazar Branch Hazi Nasirullah Market (1st floor)
Main Road, Union – Goalabazr
Thana -Osmaninagar, Sylhet0171068371, 01715-7470910028Mirpur Branch Road – 3 Block – A, Section – 11
Mirpur, Dhaka9008310, 9008218, 9008310
Fax – 90083590029Naval Base BNC, Isha Khan, naval Base
Anchor Building Potenga0171-3452830, 031 747833, 741834
Fax – 031 7418310030Kawran Bazar Zenith Tower, 40, Kawran Bazar
Dhaka0171- 30414200031FeniKazi Center , Holding – 106
SSk Road, Feni0171- 1123463, 0331635350032Joypara Branch Ashan Ali Moshan Ali Shooping Complex ,
union – Raypura
Thana – Dohar
District – Dhaka01716 – 274920, 03894680402,
0173 – 00318270033Joydebpur Branch Vaowal Point
Vill – Vogra, Up – Bason
Po – National University
Thana – Joydebpur,
Fax – 92628590034Narsingdi Branch Salam Mension, Holding 13/9
Thana – Narsingdi
Dis – Narsingdi01713- 0057305
0628-516860035Narayangonj Branch 1 No.B.B. Road, Alam Khan Road (ist & 2nd Florr )
OVERALL BANKING ACTIVITIES OF TRUST 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, Following departments are under general banking section.
1) Account opening section
2) Deposit section
3) Cash section
4) Remittance section
5) Clearing section
3.1.1 ACCOUNT OPENING DEPARTMENT
A bank has to maintain different types of accounts for different purposes. Trust Bank limited (TBL) offers the general deposit products in the form of various accounts.
Account Opening Procedure in a flow chart
3.1.2 SAVINGS ACCOUNT (SB)
Savings bank deposit is popular account maintained in Banks. The different matters relating SB account are described in the following discussion. The summary of the rules and regulations to open a savings account is as follows:-
- 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 minor (a person below 18 years), a guardian can open and operate this account on his or her behalf.
- Clubs, Societies, Sole Proprietorship firms, Partnership firms, Limited Companies either public or private and other similar organization are eligible to open such account.
- More than one account cannot be opened in the same name.
- A minimum initial deposit of Tk. 1000.00 is required to open such account. And the interest rate of SB account is 7.00%
- Money will be withdrawn through cheque. Withdrawal cannot be more than twice a week and generally the amount will not be more than 25% of the balance available, subject to maximum Tk. 20,000.00.
- In case of closure of any account, the bank deducts Tk. 100.00 as closing charge.
3.1.3 CURRENT ACCOUNT AND SHORT TERM DEPOSIT (STD) ACCOUNT
Most businessmen maintain Current Deposit accounts in order to make their daily business activities. This account’s funds change most frequently than any other accounts because customers use to withdraw and deposit funds in regular basis. The summary of the rules and regulations to open a current account & short term deposit (STD) account as follows:-
- A minimum deposit of Tk. 5000.00 is needed to open a current account.
- The bank charges an incidental charge of Tk 150.00 for every six (6) months for the maintenance of the account.
- In case of the closure, the bank charges Tk. 100.00 as closing charge of the account.
- Withdrawal of money is allowed only through the leaves of the cheque book issued by the bank.
3.1.4 FIXED DEPOSIT ACCOUNT & DOCUMENTS REQUIRED FOR OPENING ACCOUNT
FIXED DEPOSIT ACCOUNT
The bank allows people to keep their idle money secured and profitable as Fixed Deposit. The interest rate that the bank offers to the fixed depositors is as follows:
|SL No||Amount or Slab wise Deposit||Interest rate on Deposit: Maturity wise but based on amount|
|1 Month||3 Months||6 months||1 Year and above|
|01.||Any amount but less than Tk 5 crore.||10.00%||11.50%||12.00%||12.00%|
|02.||Tk 5 crore & above but less than Tk. 10 crore.||11.00%||11.25%||12.00%||12.00%|
|03.||Tk 10 crore & above but less than Tk. 25 crore||11.00%||11.25%||12.00%||12.00%|
|04.||Tk. 25 crore and above||11.00%||11.25%||12.00%||12.00%|
|* Subject to 10% government tax on interest earnings.|
The Bank deducts the Excise duty, the compulsory levy of the government, on the interest earnings in the following structure:
|Minimum Deposit||Maximum Deposit||Excise Duty|
To open a savings, current, STD account, the following documents are mandatory:
a) FOR INDIVIDUAL ACCOINT
· Two copies of Passport size Photograph of the Clients (Attested by introducer or Verified with Passports)
· Passports/ National Identity Card / Employer’s Certificate of the Proprietor.
· Customer Profile.
· Transaction Profile.
· Photograph of the Nominee(s) attested by the account holder.
· TIN Certificate.
b) FOR JOINT ACCOUNT
· Passports/ National Identity Card / Employer’s Certificate of the Proprietor.
· Two copies of Passport size Photograph of the Clients.
· Customer Profile.
· Transaction Profile.
· Photograph of the Nominee(s) attested by the account holder.
· TIN Certificate.
· Relationship between the account holders.
· Purpose of opening of the Joint account.
c) FOR PROPRIETORSHIP ACCOUNT
- Two copies of Passport size Photograph of the proprietor
(Attested by introducer or Verified with Passports)
- Passports/ National Identity Card / Employer’s Certificate of the Proprietor.
- Customer Profile.
- Transaction Profile.
- Photograph of the Nominee(s) attested by the account holder.
- TIN Certificate.
- Trade License.
- VAT Registration (if available)
d) FOR PERTNERSHIP CONCERN
· Two copies of Passport size Photograph of each partner (Attested by introducer or Verified with Passports)
· Passports/ National Identity Card.
· Company Profile.
· Transaction Profile of the concern.
· Personal Profile of the partners.
· Photograph of the Nominee(s) attested by the account holder.
· TIN Certificate.
· Trade License of the concern.
· VAT Registration (if available)
· Relationship between the partners.
· Attested Photocopy of the Partnership Deed (Deed on Tk 1000.00 stamp)
· Resolution regarding opening and operation of the account.
e) FOR COMPANY ACCOUNT
- Attested or Certified copy of the Memorandum and Articles of Association.
- Certificate of Incorporation.
- Certificate of Commencement of Business.
- Two copies of Passport size Photograph of all Directors (Attested by introducer or Verified with Passports)
- Passports/ National Identity Card of all Directors of the company.
- Company Profile.
- Transaction Profile of the company.
- Personal Profile of all Directors as per enclosed sheet in the Company’s letterhead pad.
- TIN Certificate.
- Trade License.
- VAT Registration (if available).
- Board resolution of the company regarding opening and operation of the account.
f) FOR PRIVATE SCHOOL/COLLEGE/MADRASA
· Attested or Certified copy of the Constitution.
· Registration Certificate.
· List of all Executive Members (as per enclosed format).
· Two copies of Passport size Photograph of the account operators (Attested by introducer or Verified with Passports)
· Passports/ National Identity Card of the account operators.
· Personal Profile of all members of the governing body and Managing Committee.
· Board resolution regarding opening and operation of the account.
g) FOR NGO/ CLUB-SOCIETY/CO-OPERATIVE ACCOUNT
- Registration Certificate from the Joint Stock Company/ Ministry of Social Welfare.
- List of all Executive Members (as per enclosed format).
- Board resolution as per Memorandum regarding opening and operation of the account.
- Attested or Certified copy of the Constitution/Bylaws.
- Two copies of Passport size Photograph of all Members (Attested by introducer or Verified with Passports)
- Passports/ National Identity Card of all Members.
- Profile of the Firm.
h) Minor’s Account
· Putting the word “MINOR” after the title of the account (with red color).
· Recording of the special instruction of operation of the account.
The AOF is to be filled in and signed by either the parents or the legal guardian appointed by the court of law and not by the minor.
“No Objection Certificate” from the Ministry of Social Welfare.
3.1.5 Issuing Cheque Book to the Customer
(A) Issue of fresh checkbook
Fresh checkbook is issued to the account holder only against requisition on the prescribed requisition slip attached with the checkbook issued earlier, after proper verification of the signature of the account holder personally or to his duly authorized representative against proper acknowledgment.
Procedure of issuance of a fresh chequebook
· A customer who opened a new a/c initially deposits minimum required money in the account.
· The account opening form is sent for issuance of a chequebook
· Respected Officer first draws a chequebook
· Officer then sealed it with branch name.
· In-charge officer enters the number of the cheque Book in Cheque Issue Register.
· Officer also entry the customer’s name and the account number in the same Register.
· Account number is then writing down on the face of the Cheque Book and on every leaf of the Chequebook including Requisition Slip.
· There is a special technique to sign every leaf of the chequebook with the help of carbon paper. So officer’s signature prints the reverse side of the leaf.
· The name of the customer is also written down on the face of the Chequebook and on the Requisition slip.
- Issue of Duplicate checkbook
Duplicate checkbook instead of lost one should be issued only when an A/C holder personally approaches the Bank with an application Letter of Indemnity in the prescribed Performa agreeing to indemnify the Bank for the lost checkbook. Fresh check Book in lieu of lost one should be issued after verification of the signature of the Account holder from the Specimen signature card and on realization of required Excise duty only with prior approval of manager of the branch. Check series number of the new checkbook should be recorded in ledger card and signature card as usual. Series number of lost checkbook should be recorded in the stop payment register and caution should be exercised to guard against fraudulent payment.
- Issue of New Cheque book (FOR OLD ACCOUNT)
All the procedure for issuing a new Chequebook for old account is same as the procedure of new account. Only difference is that customer has to submit the requisition slip of the old Chequebook with date, signature and his/her address. Computer posting is then given to the requisition slip to know the position of account and to know how many leaf/leaves still not used. The number of new Chequebook is entered on the back of the old requisition slip and is signed by the officer.
o Procedure of issuance of a new chequebook
If the cheque is handed over to any other person then the account holder the bank addressing the account holder with details of the Chequebook issues an acknowledgement slip. This acknowledgement slip must be signed by the account holder and returned to the bank. Otherwise the bank will not honor any cheque from this chequebook. At the end of the day all the requisition slips and application forms are sent to the computer section to give entry to these new cheque.
3.2 NEW DEPOSIT PRODUCTS
To keep in touch with competitive market, the bank has recently introduced four attractive deposit products. The products having their distinctive have already gained and are gaining the response from the existing and prospective clients. The products are as follows:
3.2.1 TRUST SMART SAVERS SCHEME (TSSS)
Under the TSSS, the following category of deposit and maturity payment has been declared:
DepositAmount Payable at Maturity
(3 years)Amount Payable at Maturity
(5 years)Amount Payable at Maturity
(7 years)Amount Payable at Maturity
RULES AND REGULATION
- The maximum number of TSSS account from a single family can not exceed five.
- The first installment is to be deposited on any date of the month but the subsequent installment is to be deposited by the 10th day.
- Advance payment of three installments is acceptable.
- One copy of Passport size Photograph of the account holder is needed to open TSSS.
- One copy of Passport size Photograph of the Nominee(s) [attested by the account holder] is also required.
- In the event of failure of to pay installment, the arrear installment(s) should be paid before or along with the next due installment subject to the penalty of Tk. 50.00 for per installment to be paid.
- In case of premature closure of the account, Tk 100.00 is charged as closing charge.
- Loan may be allowed up to 80% of the deposited amount but not below Tk 1, 00,000.00 against lien or pledge of the same account.
- Any account can be transferred from any branch to another subject to Tk. 25.00 as Account transfer fee.
In any installment remains unpaid for six consecutive months, the account will be closed automatically and the account will be settled as below:
|Different duration Treatment||Applied rate of Interest|
|Less than six month||No interest|
|More than six month but less than three years||Prevailing interest rate on Savings Account|
|More than three years but Less than five years||Matured value of three years and rest as per the prevailing interest rate on Savings Account|
|More than five years but Less than seven years||Matured value of five years and rest as per the prevailing interest rate on Savings Account|
|More than seven years but Less than ten years||Matured value of seven years and rest as per the prevailing interest rate on Savings Account|
3.2.2 TRUST DIGOON LAABH SCHEME (TDLS)
Under the Scheme, the amount deposited at the very inception is doubled in 7 years. The basic structure of this Scheme is as follows:
|Deposit Value||Matured Value||Year||Effective Rate of Interest (EAI)|
|10,000.00 or multiple thereof||Double of the deposited amount||7 years||10.40%|
SOURCE: From interview with the In-charge of FDR department of Trust Bank Ltd, Dhanmondi Branch.
The bank lags behind in this project. Other contemporary banks offer the scheme with a maturity period of 6 years that result in the Effective Interest Rate (EAI) of 12.25%.
3.2.3 TRUST MONEY MAKING SCHEME (TMMS)
Under the Scheme, the client has to pay a down payment of Tk 7,500.00 or multiple thereof and the bank contributes Tk 42,500.00 or multiple thereof to form a fixed deposit of Tk 50,000.00 or multiple thereof with the bank. The client is allowed an interest rate of 10.00% on that deposit. The client has to pay the amount due to the bank through monthly equal installment of Tk 855.00 or multiple thereof in 6 years. The client is entitled to get the interest on FDR.
Summary of the scheme
|Client’s Own Deposit||Tk 7,500.00 or multiple thereof|
|Bank’s Contribution||Tk 42,500.00 or multiple thereof|
|FDR Value||Tk 50,000.00 or multiple thereof|
|Installment Size||Tk 855.00 or multiple thereof|
3.2.4 TRUST EDUCATION SCHEME (TES)
The TES has been introduced to assist the poor students financially and chronologically. Under the scheme, a student may deposit Tk 10,000.00 for a period of three or five years. After the maturity period he or she may get a lump-sum amount of Tk 13,400.00 (for three years maturity) or Tk 16,000.00 c or he/she may get monthly education allowance of Tk 430.00 (for three years maturity) or Tk 520.00 (for three years maturity) for a period of three years after maturity.
Summary of the scheme
|Term||Deposit Amount||Monthly education allowance after maturity of 3 years continuity||lump-sum amount payable at maturity|
|3 years||Tk. 10,000.00||Tk. 430.00||Tk. 13,400.00|
|5 years||Tk. 10,000.00||Tk. 520.00||Tk. 16,000.00|
3.3 CASH DEPARTMENT
- Opening of Cash: Beginning balance is used to start daily transaction.
- Maintenance of Receipt and Payment Registers while receiving & paying
o Different amount of cash.
· Previously issued cheque will be paid if issued 6 months before.
· Advance issued cheque cannot be made payment even one day before.
· Evening Banking: Can only receive cash. No payment can be made except
o Some special cases.
o TBL Dhanmondi Branch provides “Sheba Service” in this branch
3.4 REMITTANCE & BILLS DEPARTMENT
Local remittance is one of the main components of general banking. The components of local remittance are-
Telegraphic Transfer (TT)
Demand Draft issue (DD)
Saving Certificate Issue (Sanchaypatra issue),
REMITTANCE & BILL SECTIONS ARE
· Issue and payment of Pay Order, Pay Slip, Demand Draft, etc.
· Execution of Inward and Outward Telegraphic Transfer
· Non client services like T.T. and Pay Order
· Follow up with clients
· Internal and local collection of cheque and bills.
i. Telegraphic Transfer (TT)
It is an order from the issuing branch to the drawee bank / branch for payment of a certain sum of money to the beneficiary. The payment instruction is sent by telephone and funds are paid to the beneficiary through his account maintained with the drawee branch or through a pay order if no account is maintained with the drawee branch. No charge is required for TT.
ii. Demand Draft (DD) Issue
Sometimes customers use demand draft for the transfer of money from one place to another. It is must need for sending money out side Dhaka city. For getting a demand draft, customer has to fill up an application form. The form contains date, name and address of the applicant, signature of the applicant, cheque number (if cheque is given for issuing the DD), draft number, name of the payee, name of the branch on which the DD will be drawn and the amount of the DD. The form will be duly signed by the applicant and by the authorized officer. TBL charges 15% commission on the face value of DD as service charge.
iii. Shanchaya Patra
Shanchaya patra is received from Bangladesh bank (BB). People purchasing these bonds by depositing money in this branch and payment are made on maturity to customers from this branch only. Every transaction is reported to Bangladesh bank. In case of issuance, report to be reached to BB within 48 hours, otherwise penalty is imposed. Money is realized from BB after making payment to customer.
Various types of Shanchaya Patras are sold here. They are as follows:
- 5 years Bangladesh Bank Shanchaya patra (5 BSP):
Duration of this Shanchaya patra is 5 years. Any person who purchases this Shanchaya patracanwithdraw his/her interest only after 5 years at the time of maturity along with capital. Any single individual can buy Bangladesh Bank Shanchaya patra for up to TK. 50 lac. And jointly can buy for up to TK.1 Crore. Interest Rate: 12.5% After 5 years.
· Month Profit Based Sanchaya patra(3MPBSP):
Duration of this Shanchaya patrais 3 years. Any person who purchases this Shanchaya patracanwithdraw his/her interest in every 3 month but capital can be withdrawn after the maturity period. Any single individual can buy 3 MPB Shanchaya patra up to TK. 50 lac. And jointly can buy for up to TK.1 Crore.
Interest Rate: 11.5% after 3 year
After every three (03) month 2,875/= Tk. will be given against 1 Lac. Taka as interest.
· Pensioner’s Sanchaypatra
Duration of this Shanchaya patrais 5 years. Any person (Retired) who purchases this Shanchaya patracanwithdraw his/her interest in every 3 month but capital can be withdrawn after the maturity period. Any single individual can buy Pensioner’s Sanchaypatra up to TK. 30 lac.
Interest Rate: 12.50% after 5 year
After every three (03) month 3,125/= Tk. will be given against 1 Lac. Taka.
iv. Pay Order
For issuing a pay order, the client has to submit an application in the prescribed form. This form should be properly filled up and signed. The procedure of the issuing pay order is similar to that of the Telegraphic transfer. For issuing pay order TBL charges commission on the following rate—
|Pay Order [Local] issuance||No charge for account holder|
Tk. 20/- for non-customers/clientsPay Order[Local] cancellationTk. 20/- per instrumentIssuance of Duplicate InstrumentTk. 100/- per instrument plus stamp charges for indemnity at actual.
PAYMENT OF PAY ORDER
The pay order is presented to the bank either through clearance or for credit to the client’s account. While payment, relative entry is given in the pay order register with the date of payment.
In case of collecting DD, P0, PS following things are to be carefully checked:
· Instrument of TBL
· Crossing Seal
· Clearing Seal
· Branch Name
· Amount same in word & figure
· Signature verification
· Avoid the stop order PO, DD
· Test key verification. Every TT must have test key.
· DD over Tk.50000/- must have test key
· Maintenance of PO/TT/DD issue & payable books
· Balancing at the end of the month.
3.5 PRODUCTS & SCHEMES
3.5.1 DEPOSIT PRODUCTS
· Savings Deposit Account (interest calculated on monthly minimum balance of Tk.2000 and above)
3.5.2 INVESTMENT PRODUCTS
3.5.3 INTERNATIONAL TRADE
· Travelers’ Endorsement (Cash and Travelers Cheque)
· Remittance of Foreign Currency
· Import and Export Transaction
· Foreign Exchange Dealing
· Purchase of Foreign Currency Drafts, Cheque, Travelers Cheque
· Wage Earner’s Development Bond
3.6 OTHER SERVICES
There are two services offered by the bank exclusively on distinguishable terms and conditions. The aforesaid services are-
3.6.1 Locker Service
There are some more than 500 lockers at the Dhanmondi Branch of TBL. The lockers are now rented on Security Deposit Basis instead of yearly or monthly rental Basis. The lockers are allotted on most flexible term and meager Security Deposit refundable at the time of closing the locker.
Size of Locker
Security Deposit of Locker
3.7 Debit Card
The bank offers its clients Debit Card. To be a holder of the Card the person needs nothing but to be a client or account holder of the bank. The bank charges no initial card processing cost. The yearly service charge of a debit card is Tk300.00. It seems to be a value added service to the clients.
3.8 DISPATCH DEPARTMENT
Dispatch is one of the primary departments of banking activities. Dispatch can be categorized into two parts:
3.8.1 Inward Register
3.8.2 Outward Register – (a) Courier
(b) By Post
3.8.1 Inward Register
In inward register all the incoming documents are received and registered according to date. Then, Documents are transferred to different departments according to their destiny.
3.8.2 Outward Register
The documents, which are needed to mail to different branches of TBL in Bangladesh or outside Bangladesh, are registered in outward register and mailed by courier or by post, which one is suitable.
3.9 LOANS AND ADVANCES DEPARTMENT
The bank lends the deposited money on different sectors and at different rates. A summary of sector wise lending and lending rate is as follows:
There are two types of Loan:
1) Short-Term Loans: Time period is less than 1 year
2) Long -Term Loans: Time period is 1 year & above
Loans and advances Department is the most important department of a bank. Banks borrows money from the public by accepting Deposits from them and then lending it to a borrower for a specific period of time to be repaid with a certain amount of interest. This Dept. is one of the main sources of TBL’s profits.
When bank wants to give loans of advances to a borrower, first of all he has to do LRA (Lending Risk Analysis) and when loan amount is 20, 00,000 & above this analysis is compulsory. Because the amount, which is given to, a borrower, actually comes from the public and it is repayable on demand. So, bank has to be careful when giving loans and advances. When banks can not collect the loan amount with interest, they have to bear losses.
If TBL agrees to give loans and advances to a borrower after analyzing all sorts of risk, then the borrower writes an application addressing the manager and the amount, business types, securities etc. also are mentioned in the application. After getting the application the manager scrutinizes it for justifying all information whether genuine or not. and after doing this he sanctions the loan. He can also collect the borrower’s credit report from CIB(Credit Information Bureau ) Department of Bangladesh Bank (If the borrower takes loans above Tk. 1,00,000 from any bank, that bank will send this credit reports to the Bangladesh Bank.
The manager can sanction specific amount of loans and advances (In this branch it is Tk. 15, 00,000). If the loan amount crosses this limit, then he will recommend it to regional office. Regional manager also has limit for sanctioning loans and advances. If the amount of loans and advances above his limit, he will recommend it to the head office. Then head office will sanction that loans and advances.
TBL sanctions loans and advances under certain terms of conditions. When the borrower‘s loan is sanctioned, he is known through intimation/ a copy of sanction letter. If he accepts all terms of conditions, then he has to come within 3, 7, or 15 days whatever mentioned in the sanction letter.
· Selection of Borrower
In extension of bank credit, nothing is more significant than selection of borrower. While choosing a borrower, bank must study three things: Character, Capacity and in Capital or in other words Reliability, Responsibility, Resourcefulness of a party.
- LENDING SCHEMES
The bank lends the deposited money on different sectors:
a) TRUST CONSUMER DURABLE SCHEME :
Loans up to Tk, 60,000.00 available for purchase of household durable. Tenure ranges from 6 months to 24 months.
b) TRUST MARRIAGE LOAN SCHEME:
Bank Provides loan up to Tk. 1, 00,000.00 for marriage. Easy monthly installment for a maximum period of 48 months.
c) TRUST CAR LOAN SCHEME:
Loan up to Tk. 3,00,000.00 available for purchase of car. Maximum period for repayment is 48 months only.
d) TRUST HOUSING LOAN SCHEME (THLS):
House Building loan up to Tk. 12.50 lac available for expansion of residential buildings. Easy monthly installment for a maximum period of 07 years.
e) TRUST MICRO CREDIT FOR RENOVATION & RECONSTRUCTION OF DWELLING HOUSE:
Small loans of Tk. 20,000.00 Tk. 30,000.00 and Tk. 40,000.00 are given to the low-income group for improving standard and quality of living.
· TBL Car Loan,
· TBL House Hold Durables Loan,
· TBL Doctors Loan,