1.1 Background of the Study
Banking sector is the driving force for an economic growth of a country. Every commercial bank acts as financial intermediary whose main aim is to earn profit through borrowing and lending funds in the profitable sectors and they also issue different types of credit instruments. Therefore, the Banking system occupies an important place and plays significant role in a nation’s economy building. Necessarily, banking sector also ensure commendable contribution in the economic development of a country and forms the core of the money market in an advanced country. This sort of financial intermediary accepting deposits and granting loans; offers the widest menu of services for different business ventures. Commercial banks have significantly expanded their financial services to the clients and government around the world. In current business world is very dynamic and fast changing. That’s why every professional have to have clear concept regarding this changes and he/she need to conform to these changing environments. In order to become a real professional people’s needed to enter into practical business world. A professional is a person who is skilled in the theoretical, scientific and practical aspect of an occupation and who performs with a high degree of competence.
1.2 Scope of Study
Bangladesh Commerce Bank Ltd is one of the fast growing banks in the country. It’s actively competing with others leading commercial banks. It formally launched business activities on 06.09.1999. This report constructed on the basis of general banking activities of the organization and it covers the organization’s structure, chronological growth and development performance of the commercial banks. The main part of the repot consists of the “General Banking activities of the Bangladesh Commerce Bank Ltd.”. Due to successful completion of essential part of the report have the opportunity to discuss regarding following issues:
· Finding the bridge between academic study and practice in organization.
· Importance of the General activities in banking.
· Finding the bridge between academic study and practice in Organization.
· What are the problems of Overall banking practice in BCBL?
· What are the basic difference between other commercial banks and BCBL’s activities?
· How to maintain the organizational behavior inside the organization.
· How General Banking performance does affects overall progress of the Organization.
1.3Objectives of the Study
There are some certain objectives behind preparing this report. These acted as incentive to make the report. The primary and basic objective is to fulfill the course requirement and then understand the entire banking system of Bangladesh Commerce Bank Ltd (BCBL). Other than these two other objectives are as follows:
· To achieve concept regarding practical business world.
· Find out similarities between academic knowledge and practical field.
· Understanding the organizational environment.
· How to maintain official rules and regulations.
· Understanding the basic activities of Overall banking.
1.4 Review Literature
General Banking
General Banking is an operational function of the bank which consists the management of deposit, cash, clearing house, bills, account opening, security instruments handling, customer services, locker facilities and other ancillary services of the bank besides Advance and Foreign Trade.
· High quality financial services with the assistance of latest technological device.
· Innovation in banking service at a competitive price.
· Steady return on shareholder’s equity.
· Committed to the growth of society and economic development.
2.5 Vision of the Bank
The vision of Bangladesh Commerce Bank Ltd. is to give experience to delight the customers and to give an environment where its own people will excel. At the juncture of global economic activities, BCBL has been driven by the strategic policy, as the prosperous economies of the global village are option. Its aim is to become the leader in banking sector of the country.
2.6 Functions of the Organization
Beside normal Banking business, the bank is engaged in them following activities:
· Borrowing from individual institutions.
· Lending against or without security for local or international trade.
· Carrying out functions of foreign trade and foreign exchange business including opening of L/C, issuance of T/C, Credit card, buying, selling discounting of bills, CDs, Promissory Notes, approved securities, etc.
· Buying and selling of foreign currencies.
· Direct customer Service like payment of utility bills, insurance premiums, receiving dividends, pensions, etc.
· Participating in the capital market as stock-broker and also as portfolio-investor.
· Reliable safe custody of Valuables.
· Providing excellent remittance facilities.
· Publication of Financial Statement.
· Provides withdrawal facilities of Deposits.
2.7 Organizational Structure of BCBL
In the legislative body the chairman is the head of the Board of Directors. There is a Managing Director who is also the President or CEO mainly controls and supervises the major divisions of the Bank. One Deputy Managing Director reports to him. Two Executive Vice President Reports to him. Executive Vice Presidents controls the credit, loan administration, international, financial control, accounts, marketing and human resource Division.
The organizational structure of Bangladesh Commerce Bank Ltd. is quite horizontal where each person reports to only one person, which refers to a very good working environment. For example, each Officer reports to the AVP or VP or SVP, AVP or VP or SVP reports to EVP, EVP reports to DMD and DMD reports to MD.
2.8 Management Team
To achieve the mission, a set of different drivers are mandatory. Commercial banks in Bangladesh are now in hard competition. This is because of the continuous growth of similar service oriented local banks along with special service providing foreign bank due to globalization. BCBL management team is sound experienced and enrich with excellent academic background and the legislative body or Board of Directors are responsible for selection of management team. The Board of Directors also sets objectives, policies and strategies and management team is the instrumental device, who implements those sets by the Board of Directors.
List of Management Personnel are given below…
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2.9 Management Information System
Bangladesh Commerce Bank Ltd. uses branch banking software, developed by a private company on windows platform. The head Office and branches use the software for book keeping, automatic interest calculation, daily transaction listing and auto trials, auto maturity and auto renewal of FDR, automatic integration customer’s ledger and general ledger, printing of general ledger position including balance of subsidiaries, monthly income and expenditure position etc.
2.10 Products and Services of BCBL
BCBL is a rapid growing commercial bank in the country. It’s competing with wide range of product and services that play a convenient role to its attainment. Products and services of Bangladesh Commerce Bank Ltd. are as follows:
General Banking
General banking department offer following products:
· Savings deposits on S/B A/C
· Current deposit A/C.
· Short Term deposit on STD A/C
· Term Deposit
· Fixed Deposit on FDR
· Special Scheme(including double & triple growth deposit, Lacpati Deposit Scheme, Millionaire Deposit Scheme, Marriage Deposit Scheme, Education Deposit Scheme, Kotipoti Deposit Scheme, and new addition nandita & srijoni )
· Consumers Financing
· Lease financing.
Foreign Exchange
Foreign exchange department of the bank provide following service in order for convenience of the customers:
· Issuing Letter of Credit
· Letter of credit advice
· (FDBP) Foreign Document Bill Purchase.
· (FDBC) Foreign Document Bill Collection
· Bill of Exchange
· Negotiating Bills
· Issue of Traveler’s cheques and its encashment
Loans and Advances
Loans and advance department deals with following products and services:
· Financing of small and medium Industries
· Financing of Trade
· Financing if Import and Export
· Micro-Credit and Micro Enterprise schemes
· Credit Scheme for women entrepreneurs
· Consumers credit Scheme
· Special Credit Scheme for service holder
2.11 Special Schemes
Other than the normal banking business the bank has the following special schemes:
· Small and medium scale entrepreneurs credit scheme.
· Scheme for loans to employees.
· Loan scheme for women entrepreneurs.
· Pension deposit scheme for small saver.
· Monthly deposit and profit scheme.
· Credit scheme against share.
· Interest free deposit.
· Agricultural credit Scheme.
· Life time savings Scheme.
2.12 Human Resource Management
BCBL strongly believe that only well qualified manpower can meet the expectations of the clients. For this reason BCBL always conscious regarding its existing Human Resources and frequently hiring efficient manpower to meet the standard of quality services. BCBL often arranging training program for junior level executives at BCBL Institution and senior level officers and executives are sent at BIBM, Mirpur, and Dhaka for higher training. Abreast this BCBL also send its employees abroad for higher training.
2.13 Sources of Funds
There are various sources of funds of Bangladesh Commerce Bank ltd. Basically BCBL accumulate funds from following sources:
Figure: 02, Sources of Fund
2.14 Branches of Bangladesh Commerce Bank Ltd.
Bangladesh Commerce Bank ltd. operates its business activities with 25 branches around the country. Following table shows the Branches’ names, addresses, Telephone no etc.
Name of the Branches |
Address |
Manager/Branch In-Charge |
Contact Numbers |
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Principal
|
Mr. Shamsuddin Ahmed Senior Vice President |
Tel:9571581, 9559831-2 Fax:9553832, Talex:642557BCBLBJ E-mail: bcbl@bdmail.net |
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Banglabazar Branch |
52, North Brook Hall Road, Banglabazar, Dhaka. |
Mr. Kaysarul Islam Vice President |
Tel:712227 Fax:
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124, Shahid Sayed Nazrul Islam Sharany(Narht South Road),Dhaka-1100 |
Md. Abdur Raouf Vice President |
Tel:9566140,7166654 Fax: Talex:632145 BCBLBJ |
Mouchak Branch |
93/1, New circular Road, Dhaka-1217 |
Dewan Md Moniruzzaman Vice President |
Tel:8321072
|
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Mirpur Branch |
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Mr. Ali Azam Chowdhury Vice President |
Tel:7215803
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Moulvy Bazar Branch |
77/6, Moulvy Bazar, Dhaka-1100
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Mr. K.M. Ashraf Hossain Senior Vice President |
Tel:7311051
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Jubilee Road Branch |
360,Enayet Bazar, Chittagong-4000 |
Mr. Md. Ashequl Haque Senior Principal Officer |
Tel:7311051
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Khatunganj Branch |
279, Khatunganj, Chittagong-4000 |
Mr. Md. Jamaluddin Senior Principal Officer |
Tel:011-701536, 031-618821
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Dewanhat Branch |
1128 Shek Mujib Road, Ahmed Mansion, ChittagongG |
Mr. S.M. Alamgir Assistant Vice President |
Tel:011-701745,
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Khulna Branch |
141, Sar Iqbal Road, Khulna. |
Mr. S.M. Waliullah Vice President |
Tel:041-732595
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Dilkusha Branch |
16, Dilkusha C/A, Baliady Mansion
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Mr. Gazi Nazrul Islam Assistant Vice President |
Tel:9571375, 7171263
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Dholai Khal Branch |
23, Goal ghat lane (1st fl.) |
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Tan Bazar Branch |
18, R.K.Mitra Road, Islam super Market Narayan Gang-1400. |
Mr. Anowar Rashid Assistant Vice President |
Tel:7610321,7164750
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Mr. Md. Imany Choery Vice President |
Tel:0821-7232210, 0821-819521
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Daulatpur Branch |
727, Jessor Road, Daulatper, Khulna-9202 |
Mr. Ehsan Ahmed Rouf Assistant Vice President |
Tel:041-762589
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Nawgaon Branch |
Mohammadi Market, Bangabandhu Road, Nawgaon
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Mr. Golam Mostafa Vice President |
Tel:041-762589
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Table: 01, Branches of BCBL
2.15 Foreign Exchange Business
During the short span of life of the Bank, it has got momentum in the area of foreign trade business. It deals in all kinds of export, import, remittance and all other sorts of foreign exchange business. BCBL has got nine major correspondent banks in important business centers of the world and maintain quite a good number of Nostro accounts with many leading banks of the world. It works in the following main areas:
· Letter of Credit (L/C)
· Bill Purchase & discounting
· Export Credit (Pre-shipment & post-shipment)
· Remittances
· Foreign Currency Accounts
· Taka Drawing Arrangements
· Dealing Room
· SWIFT
2.16 SWOT Analysis of the Bank
SWOT provides an opinion and judgment whether an organization’s business condition is healthy or unhealthy. It is shown as bellow:
2.16.1 Strengths
Chief Executive Officer (CEO) or the top management of the Bangladesh Commerce Bank Ltd. has contributed for the growth and development of the Bank is a key strength.
It has strong network and skilled manpower that able to provide quality services.
Positive professional relationships between bank and clients, which is an emotional tie in regular business.
Due to sophisticated system and technological advancement it’s easy to get the information without wasting paper works and time.
The Bank is always trying to add new and modern equipment and facilities to start online service from December next.
Employees are sharing good atmosphere in BCBL so that it gave them reason to work efficiently and to become dedicated in banking.
BCBL maintains corresponding relationship with many foreign banks so that it is an effective measure for the smooth business.
2.16.2 Weaknesses
Market promotional activities are not actively working due to the lack of appropriate initiative and encouragement.
Doesn’t have effective plane for aggressive marketing activities.
People are discouraged to save their money with BCBL due to Problem Bank.
Due to lack of high quality personnel in the top level of management personality businessmen and entrepreneurs are less interested to work with BCBL.
Well qualified personnel are not interested at all to work in BCBL due to less salary.
There is no well-developed infrastructure.
Most of the Branches are suffering for indiscipline problem.
The bank is far behind from technological advancement.
The branches are not well equipped by modern furniture whereas other commercial banks have sophisticated equipment.
2.16.3 Opportunity
Bangladesh Govt. has rendered its full support to the banking sector to develop the country’s economic position, at the same time creating employment opportunity.
It is almost decided that online banking will be started by December 2011 in BCBL and the wide area of network will facilitate the customer in BCBL Banking.
Bank will be able to accommodate knowledgeable, skilled, experienced and hardworking persons by offering attractive remunerations and fringe benefits with nice working environment.
By expanding the business portfolio, BCBL can start the investment business with foreign exchange curriculum.
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By expanding the financing policy with credit facility customers are very much secured in business environment
2.16.4 Threats
Defaulters are seriously affecting the smooth banking culture in Bangladesh. BCBL is a new type of bank which has been started by passing the bills in national assembly with defaulting burdens of BCI -LTD.
Central bank is always supervising the local and foreign banks in Bangladesh and sometimes it is hampering the normal operations of Private Banks.
Though the innovation workings are in continuous process, but the other rival banks are copying it within the short period.
The worldwide trends and acquisitions in financial institutions the concentration goes on competitor’s products and increasing the power in their respective areas.
It is expecting that very shortly more financial institutions are coming with their new products and we should be prepared for hard competition in the following years.
Financial Performance of BCBL
3.1 Introduction
Every bank is the financial institution in nature. Therefore, finance is the blood of any bank. Necessarily the overall growth and development of the bank is totally depends on its financial performance. If the financial performances are being smooth the overall growth would be ensured other than the organizations growth would be disrupted.
3.2 Capital Structure
The capital and reserve of the Bank as on 31st December, 2010 stood at Tk.2237.80crores. The reserve of the Bank increased from Tk.249.1 million during the year from Tk.148.60 million in the year 2009.the bank has made provision against off balance sheet items amounting to Tk. 8.16million in the year 2010.
3.3 Capital and Capital Adequacy Ratio of BCBL
According to the evidence of December 31, 2010.BCBL maintained a capital adequacy ratio of Tk.213.46 crore as on against the requirements of Tk.121.83 crore as set by the Bangladesh Bank as per Act 12 of 1997 up to 31-3-2004. It indicates that the bank maintained a satisfactory capital adequacy ratio during the year2010.
3.4 Deposit
At the end of the December 2010 the deposit of the bank was Tk.1218.76 crore against Tk.760.50 crore during the corresponding period of the previous year. The growth of deposit is 60.26% compared to last year. This growth rate may be termed as a remarkable achievement considering the adverse economic situation of the country during 2010. In the prevailing situation mobilizing of deposit had become very competitive and as a result average cost of fund of the bank in the private sectors had increased compared to previous year. The Bank has given stress on procurement of low cost funds including cost free funds for bringing down the average cost of fund. The deposit of their bank as on December 31, 2010 was as follows:
Particulars |
Crore Taka |
|
Current and Others Deposit |
|
502.65 |
Bills payable A/C |
16.09 |
|
Others deposit |
182.00 |
|
Total |
1218.76 |
Table 04: Deposit
Graph 04: Deposit
3.5 Investment
The investment portfolio of the Bank during the year 2010 was Tk.147.23 crore against Tk71.01 crore in the previous year registering a growth of 107.34%. The portfolio of investment including Govt. Treasury Bills, Prize Bonds, Share in Public Limited Companies etc. The bank has always given emphasis on investment of funds in high yield areas and maintains statutory Liquidity requirements as fixed by Bangladesh Bank. Following listed seven years investment of BCBL.
Year |
Investment |
2010 |
32.90 |
2009 |
21.28 |
2008 |
10.90 |
Table 05: Investment
Graph 05: Investment
3.6 Dividend
Due to shortfall in statutory provision on loans and advances, the bank was not in a position to declare dividend in 2010. Hopefully, the bank able to declare dividend in the next year if Tk.15.00 crore profits is earned in the year 2011 and the Bangladesh Bank allows declaring dividend without providing the required provisions for BCI classified loans and advances.
3.7 Comparative Financial Highlights from 2009 to 2010
F). Investment
Values of investments have been shown as under:
Treasury Bill |
: Face value (Including unearned Income thereon). |
Prized Bond |
: Cost price |
Share and Debenture |
: Cost price |
G). Cash Flow Statement
Cash flow statement is prepared principally in accordance with BAS 7 “Cash Flow Statement” and the cash flow from the operating activities have been presented under direct method as prescribed by the securities and exchange rules 1987 and considering the provision of paragraph 18 (b) of BAS-7 which provides that ‘Enterprise are Encouraged to report cash flow from operating activities using the direct method
3.9 Changes of Equity
Following table shows the changes of equity for the year ended 31 December 2010
Particulars |
Paid up Capital |
Share Premium Account |
Statuary reserve |
Other reserve |
Revaluation Reserve on Securities |
Surplus profit/ Loss |
Total Tk. |
Balance as on 01January 2010 |
920,000,000 |
. |
65792413 |
3848512 |
|
(26127843) |
963513082 |
Share capital BCI Ltd |
39000000 |
. |
. |
. |
. |
. |
39000000 |
Dividend paid during the year |
. |
. |
. |
. |
. |
. |
|
Increased in statutory reserve |
. |
. |
32536744 |
. |
. |
. |
32536744 |
Issuance of Share Capital |
1068742800 |
. |
. |
. |
. |
. |
|
Surplus of revaluation Reserve for HTM securities |
|
. |
. |
. |
11836557 |
|
|
Net Profit/ Loss for the year |
. |
. |
|
. |
|
30771838 |
30771838 |
Balance as on 31 December 2010 |
2027742800 |
. |
98329157 |
3,848,512 |
11836557 |
4643995 |
2146401021 |
Table 09: Changes of Equity
General Banking of BCBL
4.1 Introduction
Every commercial bank deals with different vital division such as:
General Banking division
Loans and Advance division
Foreign Exchange division etc.
Among these three divisions General Banking is the core and leading division. General Banking division is the most important point of all activities. It is the storage point for all kinds of transactions of foreign exchange division, loans and advance division, and other relevant events. Except General Banking functions a bank cannot sustain for long. With the technological advancement this sector is growing tremendously. As a fast growing bank BCBL actively realizing that development and trying to conform to the changing environment.
4.2 General Banking Activities of BCBL
Basically, General Banking division performs the core functions of a bank. It deals day to day transactional activities which include collection of deposit from customers and meet the customers demand for cash. Widely general banking division includes the following sections:
· Account Opening Section/ Deposit Section
· Collection and Clearing Section.
· Cash Section
· Local Remittance Section
· Bill Section
· Accounts Section
· Dispatch Section
· Administrative Section
4.3 Account Opening Section
To become a customer initially need to open an account with a particular bank and then a person is allowed to go for transaction. Through this process banker- customer relationship begins and continues until violation of any condition by the parties. According to the regulation of central bank and commercial bank everybody cannot open an account. In order to open an account customer need to fulfill some certain conditions and requirements provided by the bank.
4.4 Types of Account
As we know there are different type’s accounts, however it depends on bank’s goals, objectives, mission and vision as well. Bangladesh Commerce Bank Ltd. provides the opportunity to open following types of account:
· Savings Bank Account (SB)
· Current Account CA)
· Short Term Deposit (STD)
· Fixed Deposit Ratio (FDR)
· Deposit Pension Scheme (DPS)
4.5 Savings Bank Account (SB)
This account is primarily for small scale saver. Any adult and mentally smooth person can open this type of account through the fulfillment of required conditions. Saving bank account is convenient for the people of the lower and middle classes who wish to save a part of their current incomes to meet their future needs and also intend to earn an income from their savings. However, account holders cannot withdrawal money more than two times in a week but he can deposit any time as he/she wishes. If any customers want to withdraw large amount of money he have to notice the bank early. At present its interest rate is 7.50%. Abreast these some other relevant points listed below:
4.5.1 Requirements to open an Account:
In order to open an account customer need to fulfill following requirements:
· 2 copies of passport size photographs.
· Photocopy of 1-7 pages of valid passport (Absence of passport- driving license/ voter ID card/ Commissioner’s certificate).
· Introducer signature and account number at the back of account holder’s (person going to open an account) photographs.
· Photograph of nominee with the signature of account holder at the backside of nominee’s photograph.
· Initial deposit of TK. 1000.
· Two or more persons can open this account jointly.
· Parents can open an account on behalf of his minor children.
· Any private Organization can open savings account in its own name. In this regard 3324organizations need to submit name, photograph, and specimen signature of specific person who be responsible for the account.
4.5.2 Characteristics of the Savings Account
The basic characteristics of saving bank account are as follows:
· At the time of opening an account customers have to deposit minimum Tk.1000.
· One person can open only one account in one name.
· Interest paid twice in a year depending on monthly minimum balance.
· Minor cannot open an account.
· Customer can deposit money at any times during working hour.
· But customer can withdraw not more than twice in a week.
· Generally this account holder cannot take loan but in special case it might happen.
· The main purpose of this account is to construct fund.
· The Bank provide passbook to deposit money in account.
4.5.3 Types of Savings Account
There are different types of savings account bank offers to its customers such as:
· Home savings account
· School savings account
· Works savings account
· Deposit pension account
· Cumulative savings account
· Loan Deposit account
· Foreign currency account etc.
4.6 Current Account (CA)
Current account is running and active account which may be operated upon any number of times during a working day. Basically it’s a pure demand deposit account. Since there is no restriction on withdrawal and deposit holder can withdraw and deposit money any times in a working day. Basically there are two types current account available in the Bank:
General Current Account
Special Notice Current Account
The basic requirements and characteristics of this account are as follows:
4.6.1 Requirements for Current Account
For person:
· 2 copies of passport size photographs.
· Photocopy of 1-7 pages of valid passport (Absence of passport- driving license/ voter ID card/ Commissioner’s certificate).
· Introducer signature and account number at the back of account holder’s (person going to open an account) photographs.
· Photograph of nominee with the signature of account holder at the backside of nominee’s photograph.
· Initial deposit of TK. 2000.
For joint venture, Associations, and Clubs: If the party is joint venture, Associations, and Club then they have to fulfill following requirements:
· True copies of certificate of incorporation or registration.
· True copies of certificate of commencement of business.
· True copies of memorandum and articles of association.
· True copies of resolution of the board of directors.
For partnership Company:
· Name and address of the firm.
· Partnership deed.
· Trade License
· Endorsement of account holder of the same branch.
4.6.2 Characteristics:
4.13.4.3 Payment Order Working Procedure
Figure 05: Working procedure of Pay Order
4.13.4.4 Cancellation of PO
If it requires canceling pay order then purchaser need go through a predetermined procedure. At purchaser have to submit written application to refund the pay order attaching therewith the original pay order. Then authority will confirm purchaser’s signature with the original signature. Beside this there have to have the permission of authorized employees prior refund the amount of pay order. Pay order should be affixed on the pay order. In order to cancel pay order there does not charge any fees, only refund the pay order amount and finally reserve original entries with proper description.
4.14 Bill Section
The most important and mentionable task of general banking is to collect and payment of different bills on behalf of clients and the government. As a representative of client BCBL perform following basic tasks:
· Bill collection
· Clearing
· Transfer and Delivery
· Outward and inward bill Collection.
4.14.1 Bill collection
Under this section bank collect different types of bill on behalf of clients. Such as- Purchase and sale share and securities, pay the tax and vat, collect and disburse house rent, collect dividend, collect pension fund, invest the money etc. There are basically two different types of bill. Besides, bank receives check for collection from other bank on behalf of clients. In this case following points should be carefully investigated:
· Cheque should not carry more six months from the date of transfer of funds. In that case check would be stale check.
· The amount should be identical both in word and in pay-in slip.
· The name mentioned should be same both in check and in pay- in-slip.
· Check must be crossed.
Clearing
Clearing is one of the mentionable tasks of a commercial bank. Clearing means accomplishments of cheque drown on each other through clearing house. In general clearing house means “A place where representatives of local banks meet at an agreed time each day to exchange cheque and other items drown on each other and to settle the resulting balances. This is an initiative of central bank to accumulate the representatives of schedule bank to clear their cheques. In order for clear the cheque BCBL developed a unique section that is responsible for receive checks, drafts, and other instruments like these from customers for the purpose of collection with a deposit slip over the counter crediting their accounts. Only the schedule banks are allowed to participate in clearing house. According to the Article 37 (2) of Bangladesh Bank Order, 1972, the banks which are the member of clearing house known as schedule bank. Accordingly BCBL is a schedule bank and actively participate in clearing function with clearing house on behalf of the customers.
Types of Clearing: Basically two types of clearing available:
· Outward Clearing: When the branches of a bank receive cheques from its customers drawn on the other banks within the local clearing zone for collection through clearing house.
· Inward Clearing: When the bank receives cheque drawn on it from other banks in order for clearing function.
4.14.2.1 Considerable Factors to receive Cheque
The Bank carefully consider following factors at the time of receiving the cheques for clearing:
· Name of the account on the cheque and Deposit slip.
· Amount in the Cheque must be both in word and figure.
· Bank and Branch name, number and date of the cheque.
· Cheque must be signed by the holder.
· Cheque should be crossed.
· Account number in the cheque must be clear.
· Signature of the depositor.
4.14.3 Outward and inward Bill Collection
This is the transaction occur outside and the debts that arise due to transaction among different branches of different banks are settled through Outward and inward Bill Collection.
4.15 Cash Section
Cash section is most vital and significant section of the bank. Let’s they say cash is the blood of the bank. The main task of this section is receive and payment of money. As we know it has two major counters-
Cash receive counter
Cash payment counter
4.15.1 Cash Receive Counter
In receive counter two/three efficient persons are responsible for cash collection. In this section cheque, pay order, drafts etc. are being received. These tasks accomplish through a predetermined process-
· At first customer need to fill up the deposit slip provided by the bank.
· Deposit the slip to cashier.
· Cashier receives money, confirm the amount and then enter into the cash receipt register book and finally sign with seal and date in the deposit slip.
· Slip then passed to another officer who is responsible for taking details like serial number, amount etc. and return deposit slip to customer.
Cash payment
Cash payment counter is responsible only for payment of cash on the basis of check, pay order, drafts etc. In terms of cash payment bank initiate some extra care regarding following things- whether the cheque is crossed or not, endorsement, date, specimen signature, amount, and other relevant things. To pay money bank follow process:
· At customer need to deposit the cheque to the cash section.
· Authorized individual verify required things- whether it is properly crossed if it is being cross cheque, endorsement, date, amount, signature, and also ensure current balance in the account and then it send to cashier if everything is positive.
· Cashier is then asked bearer to sign on the back side of the cheque and pay the money.
· Then cashier enter payment details into register book.
Account Section
It’s regardless to analyze how much significant the account section are! Let’s the say account is the nerve center of the bank. Everyday huge transaction occur in different section, account section regularly keep record each and every transaction. In banking business bank need to go for various transaction and these transactions are to be recorded properly and systematically. If the bank fails to record this transaction in an appropriate manner it might happen mismatch and misunderstanding between bank and customers and it also mismatch in the debit and credit side. To avoid this violence bank developed account section which is responsible record keeping of all transactions required information, prepare different statement and other relevant things. Basically accounts supply information to other sections of the bank according their requirement. Generally account section of BCBL responsible for following activities:
· Record keeping of all transactions in the cash book.
· Recording the transactions in general and subsidiary ledger.
· Packing of the correct vouchers according to the debit voucher a credit voucher.
· Constructing the daily position of the branch comparing of deposit and cash.
· Make payment of all expenses of the branch.
· Recording inters branch fund transfer and providing accounting treatment in this regard.
· Preparing monthly salary statements for the employees.
· Preparing weekly position for the branch which is sent to the Head Office to maintain cash reserve requirements.
· Checking transaction list.
· Recording of the vouchers in the voucher register.
· Preparing the daily statement of affairs showing all the assets and liability of the branch as per general ledger and subsidiary ledger separately.
5. Consumers Credit Scheme
Domestic useable items i.e. Computer, Photocopier, Furniture, Washing Machine, Air Cooler, Refrigerator, Sewing Machine, Car; Pressure Cooker etc are financed for comfortable and modern living of the people of limited source of income.
6. Special Credit Scheme for Service-holder
Under this scheme service-holders of govt. bank or autonomous bodies are provided with 6 month's basic salary as loan realizable in 18 equal installments. Professionals are also covered under this special credit.
4.17.2 Considerations of Bank in Granting Loans and Advances
Basically main task of the bank is to earn profit through borrowing and lending money. That’s why bank need to proceed some significant principles to provide loans from its fund. At the time of granting loan BCBL consciously investigates followings:
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4.17.3 Classification of Advances
The Bangladesh Commerce Bank Ltd. classified its advances/ credit program in following forms:
4.17.3.1 Bank Advances on the basis of the objectives/ Uses
A. Commercial Credit
B. Non- Commercial Credit
A. Commercial Credit: Bank provides this type of credit for the purpose of national and international business. Commercial credit may be short term or long term.
B. Non- Commercial Credit: Bank provides this credit for non- commercial purpose. The bank offers this credit to purchase house, Home materials, Social development, traveling, education, etc.
4.17.3.2 Bank’s Advances on the basis of Duration
Short Term Credit: Bank offers this type of loan for very short time. The maximum duration of this loan is one year and minimum one hour. Basically individual, firms and industries are the main customer of this loan.
Mid Term Loan: Bank also provides credit for mid term between short term and long term. The maximum duration of this credit is less than five years and minimum one year. Bank charge a certain percentage of interest against this credit and that is 11%-14%. Customers of the Long term credit are-
· General Businessman
· Importer
· Exporter
· The bank demand borrower land and properties as collateral against this loan.
Long Term Credit: Bank offers this credit for long term, generally bank grants this credit for five years to twenty years duration. Bank charge high interest against long term credit it is 15%-20%.
Normally bank grants long term credit under a certain project. However, bank provide long term loan to purchase land and machineries, house building, construction of industry and machineries purchase, etc. Bank also grants long term credit for small and cottage industries, fisheries, etc.
4.17.3.3 Loan
Among all the advances loan is most significant and comparatively high demandable to the customers. Generally bank provides this loan through credit account, it does not provide in cash. Customers draw by the cheque from his / her account. Normally, loan need to repay within a certain time period. However, customers are allowed to repay loans in installment. Necessarily bank demand high interest on different types of loan and customers are instructed to pay interest with principle amount of loan. BCBL grant loans for following different purposes:
· Purchasing Transportation
· Agricultural activities
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BCBL make arrangement for foundation training for all of officers in order for their better development at Bank’s own institute and BIBM.
Bill section is most cash liquidity handle in banking transaction.
Some problems of BCBL
Until now the bank apply traditional banking system, the bank is far behind from modernization.
The Bank could not introduce proper automation and database system. Only a few branch use automation system.
The working environment of the bank is not modern like other commercial bank.
The cash section of the bank could not properly develop. In order for cash receive and payment they employ traditional system that is extensive time consuming.
The bank did not formally develop the job description and job responsibility. That’s why one employee’s need to work in different working area.
Last but not the list banks depend on deposit collection less than to give loan.
They have no normal credit or debit card.
Some branches are to much less busy then other branches.
They have no ATM Booth.
Just principals Branch create more foreign transaction then others branches.
7. Conclusion
Its high committed toward better customer services. The Bank by concentrating on the activities in its area of specialization has achieved good market reputation with effective customer services. The bank is committed to keep its working force modern by providing continuous training to its staff in their respective field of work. BCBL Pledges to maximize customers’ satisfactions through services and building a trusting relationship with customers, which has stood the least of time for the last seven years.
The bank offers wide ranges product line in order for customer convenience and marketing activities in banking is the most significant. Basically, General Banking activities are the driving force of the Organization. Abreast this bank also offers credit to all sectors of commercial activities having productive purpose and successfully performs foreign exchange activities.
Recommendations
After analysis of all the gathered information and other relevant things the Bangladesh Commerce Bank Ltd. should consider the following matters.
Since today’s business world totally technology depended so the Bank should develop online banking system as soon as possible.
To sustain in the competitive market bank should modernize the working environment.
The Bank performs business activities with only 25 of its branches. Therefore in order to capture the market share bank should immediately enhance number of branches.
Retrieved October 10, 2010, from www.bcbl-bd.com.