General Banking Activities of Jamuna Bank Ltd

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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 every day, general banking is also known as ‘Retail Banking’. In
Jamuna Bank Ltd Principal Branch, the following departments are under general
banking section:

I  Account opening section

I  Deposit section

I  Cash section

I  Remittance section

I  Clearing section

I  Foreign Exchange section

I  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.

Savings account.

Short Term Deposit (STD)

Current Account:

Savings Account:

Cash Payment

Cash payment is made only against
cheque

This is the unique function of the
banking system which is known as “payment on demand”

It makes payment only against its
printed valid cheque

Cash Receipt

It receives deposits from the
depositors in form of cash

So it is the “mobilization unit” of
the banking system

It collects money only its receipts
forms

Points

Pay Order

Demand Draft

TT

Explanation

Pay Order gives the payee the right to claim payment from
the issuing bank

Demand Draft is an order of issuing bank on another branch
of the same bank to pay specified sum of money to payee on demand.

Issuing branch requests another branch to pay specified
money to the specific payee on demand by Telegraph /Telephone

Payment from

Payment from issuing branch only

Payment from ordered branch

Payment from ordered branch

Generally used to
Remit fund

Within the
clearinghouse area of issuing branch.

Outside the clearinghouse area of issuing branch. Payee can
also be the purchaser.

Anywhere in the country

Payment Process of
the paying bank

Payment is made
through clearing

1. Confirm that the DD is not forged one.

2.Confirm with sent advice

3.Check the ‘Test Code’

4.Make payment

1.Confirm issuing branch

2.Confirm Payee A/C

3.Confirm amount

4.Make payment

5.Receive advice

Charge

Only commission

Commission + telex charge

Telephone

Total amount of PO

Commission

VAT

Up
to TK. 10,000.00

Tk.3

TK.
10,001.00 – TK.1,00,000.00

Tk.
4

TK.
1,00,001.00 – TK. 5,00,000.00

Tk.
8

·  
Types of Clearing:

Responsibility of the concerned officer for the
Clearing Cheque:

Up
to  1 lac
———————————————- 0.15%

Above
1 lac———————————————- 0.10%

Above
5 lac ———————————————- 0.05%

3.6 Foreign Exchange

3.6.0 Foreign Exchange

3.6.1 Documentary Letter Of Credit

3.6.2 Terms Of
Letter Of Credit

3.6.3 Parties To
Letter Of Credit

3.6.4
The Description Of Process

3.6.5 Modes of Sales of Goods

3.6.6 Back-to-Back L/C

Foreign Exchange

3.6.1 Documentary Letter Of Credit

Forms of Documentary Credit

2. Doc. Credit
Application

 

Tenor

Install

Payable Amount

Tenor

Install

Payable Amount

Tenor

Install

Payable Amount

3 Years

500

20750

5 Years

500

37955

10 Years

500

99535

1000

41145

1000

75915

1000

199075

1500

61720

1500

113875

1500

298615

2000

82300

2000

151835

2000

398155

3000

123450

3000

227760

3000

597235

5000

205760

5000

379600

5000

995400

10000

411520

10000

759205

10000

1990800

Tenor

Installment

Payable Amount

3 Years

2435

Tk. 1 Lac

4 Years

1735

Tk. 1 Lac

5 Years

1315

Tk. 1 Lac

Tenor

Installment

Payable Amount

3 Years

24305

Tk. 10 Lac

4 Years

17370

Tk. 10 Lac

5 Years

13225

Tk. 10 Lac

6 Years

10480

Tk. 10 Lac

7 Years

8510

Tk. 10 Lac

10 Years

5085

Tk. 10 Lac

12 Years

3775

Tk. 10 Lac

15 Years

2530

Tk. 10 Lac

Tenor

Installment

Payable Amount

3 Years

244845

Tk. 1.00 Crore

4 Years

175290

Tk. 1.00 Crore

5 Years

133635

Tk. 1.00 Crore

6 Years

105935

Tk. 1.00 Crore

7 Years

86220

Tk. 1.00 Crore

10 Years

51680

Tk. 1.00 Crore

12 Years

38540

Tk. 1.00 Crore

15 Years

25960

Tk. 1.00 Crore

18 Years

18030

Tk. 1.00 Crore

20 Years

14230

Tk. 1.00 Crore

Tenor

Install

-ment

Payable Amount

Tenor

Install

-ment

Payable Amount

Tenor

Install

-ment

Payable Amount

5.5

Years

1000

84375

7.5

Years

1000

127090

10.5

Years

1000

207870

1500

126565

1500

190640

1500

311810

2000

168755

2000

254190

2000

415750

2500

210945

2500

317735

2500

519690

12

Years

1000

260410

15

Years

1000

387050

18

Years

1000

557860

1500

390620

1500

580580

1500

836790

2000

520830

2000

774110

2000

1115720

2500

651040

2500

967640

2500

1394650

Tenor

Installment

Payable Amount

Tenor

Installment

Payable Amount

4

Years

1000

57220

6

Years

1000

95000

1500

85830

1500

142505

2000

114445

2000

190010

2500

143055

2500

237510

8

Years

500

70695

12

Years

500

131115

1000

141400

1000

262240

1500

212100

1500

393360

2000

282800

2000

524480

2500

353505

2500

655605

Tenor

Installment

Payable Amount

Tenor

Installment

Payable Amount

5 Years

500

37705

10 Years

500

98130

1000

75420

1000

196265

1500

113130

1500

294400

2000

150840

2000

392540

2500

188555

2500

490675

5000

377115

5000

981360

Tenor

Installment

Payable Amount

Tenor

Installment

Payable Amount

3 years

12155

500000

5 years

6635

500000

17015

700000

9285

700000

24305

1000000

13265

1000000

Tenor

Installment

Payable Amount

Tenor

Installment

Payable Amount

1 years

1610

20000

2 years

770

20000

4010

50000

1915

50000

8010

100000

3830

100000

12010

150000

5745

150000

Tenor

Installment

Payable Amount

Tenor

Installment

Payable Amount

1 years

810

10000

2 years

385

10000

1610

20000

770

20000

2410

30000

1155

30000

4010

50000

1920

50000

Tenor

Installment

Payable Amount

Tenor

Installment

Payable Amount

1 year

19955

250000

9 years

1960

330000

2 years

9895

260000

10 years

1725

340000

3 years

6525

270000

11 years

1525

350000

4 years

4835

280000

12 years

1365

360000

5 years

3810

290000

13 years

1225

370000

6 years

3125

300000

14 years

1100

380000

7 years

2630

310000

15 years

995

390000

8 years

2255

320000

Tenor

Installment

Payable Amount

3 Years

200

Tk. 8160

5Years

200

Tk. 14880

Deposit

Tenor

Monthly Profit

100000

6 Months

765

100000

1 Year

785

Deposit

Period

Maturity Value

Fixed amount

4 years 4 months

1.5 times the deposit amount

Fixed amount

7 years 4 months

Double amount

Fixed amount

11 years 8 months

Triple amount

Deposit

Tenor

Monthly Profit

50000

3 Years

765

Deposit

Tenor

Monthly Profit

100000

5 Years

785

  1. Continuous Loan
  1. Demand Loan
  1. Term Loan

Ø 
Financial Performance OF
JBL
  Profit

Ø  Deposit and Deposit Mix

Ø  Ø  Ø  Investments

Ø  Dividend

Ø  Manpower

Ø  SWOT Analysis

Ø 

Result Summary

Particulars

Y-2004

Y-2005

Y-2006

Y-2007

Y-2008

Income Statement:

Interest
Income

1004.35

1374.38

2095.51

2230.26

2890.65

Interest
Expenses

726.06

1045.46

1606.88

1774.39

2321.88

Net Interest Income

278.29

328.92

488.63

455.87

568.77

Income from Investment

80.44

126.30

255.66

474.48

666.15

Non
Interest Income

153.74

249.59

398.73

398.25

517.58

Non
Interest Expenses

203.64

284.87

441.70

504.40

712.30

30.54


91.02

212.69

368.33

471.43

Contribution
to Jamuna Bank Foundation

4.33

Profit
before Tax and Provision

308.83

419.94

701.32

824.20

1035.87

Provision
for Loan, Advance and Assets

35.13

56.63

201.35

419.16

174.39

Provision
for Tax (including deferred tax)

117.75

163.49

246.57

315.93

382.04

Profit After Tax

155.95

199.82

253.40

89.11

479.44

Balance Sheet:

Authorized
Capital

1600.00

1600.00

1600.00

4000.00

4000.00

Paid
up Capital

429.00

429.00

1072.50

1225.71

1313.27

Reserve
Funds

245.65

487.46

629.33

647.01

1131.07

Shareholders’
Equity

607.32

807.14

1562.47

1656.49

2160.73

Deposits
(Core & Bank)

10450.16

14454.13

17284.81

20924.02

27307.94

Advances

6722.80

11011.83

12796.63

16617.45

21036.86

Investments

1163.70

2037.84

2552.67

5390.03

4238.63

Fixed
Assets

97.99

106.46

137.36

174.40

609.09

Total Assets (Excluding Contra)

13491.52

16863.77

20157.02

26405.40

31646.63

2903.96


5445.68

6574.38

6409.26

9169.47

Foreign Exchange Business:

Import
Business

7923.90

12151.90

15457.66

22191.84

30311.71

Export
Business

4790.80

6521.80

11583.64

13990.33

18617.43

Capital Adequacy:

Risk
weighted Assets

5846.04

9010.43

11506.17

15081.07

20516.43

Tier
I Capital (Capital & Shareholders Equity)

607.32

807.14

1562.47

1651.58

2131.02

Tier
II Capital

67.33

109.32

139.36

221.14

313.32

Tier
III Capital

Total Capital

674.65

916.46

1701.83

1872.72

2444.34

Tier
I Capital Ratio

10.39

8.96

13.58

10.95

10.39

Tier
II Capital Ratio

1.15

1.21

1.21

1.47

1.52

Tier
III Capital Ratio

Total Capital Ratio

11.54

10.17

14.79

12.42

11.91

Credit
Quality:

Volume
of Non-performing Loans

2.83

51.05

643.37

840.34

598.31

%
of NPLs to total Loan & Advances

0.04

0.46

5.03

5.06

2.84

Provision
for Un-classified Loans

67.00

113.83

139.03

220.81

298.13

Provision
for Classified Loans

1.04

10.21

181.47

518.85

296.29

Share
information:

Number
of Share of Outstanding

4.29

4.29

10.73

12.25

13.13

Earnings
per Share Taka (EPS)

36.35

46.58

31.94

8.04

38.21

Book
value per Share/ NAV

141.57

188.14

145.68

135.14

164.53

Market
price per Share (Taka)

391.58

431.02

266.71

Price
Earnings Ratio (Times)

12.26

53.61

6.98

Dividend:

Cash
Dividend

1.5%

Stock
Dividend

1:4

1:7

1:14

1:4.26

Other
Information:

Number
of Branches

19

23

29

35

39

Number
of Employees

447

525

631

861

935

Number
of Correspondents

333

390

643

715

715

Total
Income

1397.27

1727.20

2749.90

3102.99

4074.39

Total
Expenditure

1088.44

1307.26

2048.58

2278.79

3034.19

Operating
Profit

308.83

419.94

701.32

824.21

1040.20

Profit
Before Tax

273.70

363.31

499.97

405.04

865.82

Profit
After Tax

155.95

199.82

253.40

89.11

479.44

Ratio Analysis

Sl.No

Particular

2008

2007

2006

2005

2004

Performance Ratio %

01

Return
on Average Assets (ROAA)

2.98

1.74

2.70

2.39

2.35

02

Return
on Average Assets (after tax)

1.65

0.38

1.37

1.32

1.34

03

Return
on Average Equity (after tax)

25.12

5.54

21.39

28.25

29.46

04

Net
Interest Margin (Average)

4.78

4.39

4.39

3.24

3.35

05

Net
Interest Margin

4.46

3.88

4.06

2.93

2.87

06

Efficiency
Ratio

40.64

37.96

38.64

38.40

39.74

07

Return
on Investment

15.72

8.80

10.02

6.20

6.91

08

Profit
Margin

21.25

13.05

18.18

21.03

19.59

09

Return
on Risk Weighted Assets

4.22

2.69

4.35

4.03

4.68

10

Burden
Coverage

58.96

63.59

74.43

72.57

65.66

11

Ratio
of Fees Income

10.31

10.34

11.96

11.00

9.57

12

Interest
Yield

13.77

12.77

13.87

10.68

11.58

13

Marginal
Cost of Fund

8.38

7.64

8.98

6.82

7.08

14

Burden
Cost of Fund

9.27

8.13

9.67

7.22

7.63

15

Burden
Yield on Advances

14.73

13.58

15.34

12.09

11.90

16

Profit
on Lending

5.46

5.45

5.67

4.87

4.27

17

Yield
on Advances

14.40

13.15

14.81

12.72

13.04

18

Interest
expenses to Total Expenses

76.52

77.87

78.44

79.97

81.29

19

Salary
Exp. To Total Overhead Exp.

57.89

47.36

43.38

43.33

48.46

20

Salary
Exp. To Fees Income

98.18

74.49

58.28

59.71

73.81

21

Expense
Coverage

72.66

78.96

90.27

86.52

75.50

22

Return
on paid –up Capital

36.51

7.27

23.63

46.58

36.35

23

Productivity
Ratio

32.24

29.68

32.74

31.37

29.19

24

Per
Employee Deposit

29.21

24.30

28.81

27.53

23.38

25

Staff
per Branch

23.97

24.60

21.43

21.88

22.35

26

Capital
to Deposit (%)

8.95

8.95

9.85

6.34

6.46

Asset Quality Ratio %

01

Nonperforming
Loan to Total Loan

2.84

5.06

5.03

0.46

0.04

02

Loan
Loss Reserve to Total Loan

2.83

4.45

2.50

1.13

1.01

03

Loan
Loss Reserve to NPL

99.35

88.02

49.81

242.98

2404.24

04

NPL
Reserve to NPL

49.52

61.74

28.21

20.00

36.75

05

Loan
to Deposit

77.04

79.42

74.03

76.18

64.33

Capital Ratio/ Regulatory Capital
Ratio %

01

Total
Risk- Based Capital Ratio

11.91

12.42

14.79

10.17

11.54

02

Tier
I Risk-Based Capital Ratio

10.39

10.95

13.58

8.96

10.39

03

Leverage
Capital ratio (Capital)

10.42

10.98

9.76

15.18

15.91

04

Leverage
Capital ratio (Equity)

11.95

12.45

10.63

17.23

17.67

05

Average
Equity to average Assets

6.58

6.91

6.40

4.66

4.55

Financial Performance OF JBL

Profit

In 2008 Jamuna Bank Limited posted an operating profit of
tk.1040.20 million as against tk.824.21 million in 2007 with a spectacular
growth of 26.21 percent over the preceding year. After having made necessary
provisions for loans and advances tk.174.39 million in accordance with the
instruction of Bangladesh Bank Net Income  Before Tax (NIBT) stood at tk.865.82 million
in the year under review against tk 405.04 million in the preceding year. An
amount of tk 382.05 million has been kept as provision for payment of tax .Thus
Net Income after tax and provision stood at tk.479.44 million in 2008 which was
tk.89.11 million in 2007.

Deposit and Deposit Mix

In Commercial banks operation starts
with mobilization of resources i.e. tapping of deposits and then they said
resources are deployed as loans, advances and investments for the purpose of
maximizing wealth which means deposits have dominance in Commercial bank’s
operation. That is why there is common saying that deposit is the lifeblood of
a bank. In keeping with this JBL attaches utmost importance to the deposit
mobilization campaign and to the optimal deposit mix for minimizing COF as far
as practicable. A stiff competition persisted in the market as to deposit
mobilization and there was a pressure on interest rate. Besides, instability in
political atmosphere was adversely affecting business, which stood as a
hindrance to the smooth operation of banks including deposit mobilization. Despite
all these unfavorable factors JBL was able to instill confidence in customers
as to its commitments to the depositors and borrowing  customers 
and thereby could mobilize a total deposit of tk.27307.94 million in
2008 against that of tk. 20924.02 million in the preceding year showing an
increase of tk..6383.92 million Being 30.51 percent. Endeavor is underway for
augmenting low cost deposit by accommodating good customers at competitive
price. For healthy growth of business JBL puts emphasis on no cost and low cost
deposit all the time. A number of savings schemes are in place for mobilizing
long term deposits which can be planned to be invested in term loans in the
area lease finance, project finance and SME with a view to having better
yields. JBL’s such move will motivate the people to have good savings habit, as
well. The comparative position of deposit mix of the bank as on 31.12.2008 and
31.12.2007 are 27307.94 and 20924.02 (Figure in BDT million)

Loans & Advances

Though there was an unfavorable
business environment due to political turmoil throughout

the year JBL
was in constant efforts to explore different areas of credit operation and
could

raise the
credit portfolios to tk.21036.86 million in 2008 with an increase of tk.  4419.41

(26.59%) over that of the preceding
year. The total credit was on 31.12.2007 was Tk.16617.45 million

The total import business handled by
the bank in 2008 was tk. 30311.71 compared to Tk.22191.84 million in the
preceding year registering a rise of tk.8119.87 million being 36.59 percent. A
sizeable L/C’s were also opened by the bank in the year under review. The
import items included industrial raw materials, machinery, consumer goods, and
fabrics, accessories etc. The bank handled export business worth tk 18617.43
million in the year under report. In 2007 total export business handled by the
bank was tk. 13990.33 million. Thus there was an increase of tk.4627.10 million
in export business handle by the bank being 33.07 percent over the preceding year.
The major export item was Readymade Garments.

Investments

The investment portfolio of the bank
as on 31.12.2008 stood at tk. 4238.63 million from tk. 5390.03 million as on
31.12.2007.The investment portfolio was blended with government treasury bills
amounting to tk 1589.46 million, Treasury Bonds of tk. 2595.39 million,
investment in primary share and zero coupon bonds of tk1.16 million. The bank’s
major portion of investment is in Govt. Treasury Bills and Bonds for the
purpose of fulfilling statutory Liquidity Requirement.

Dividend

Jamuna Bank Ltd is continuously
upgrading itself with a view to be competitive and to remain the leader of the
Banking Industry. It has distributed a substantial amount of dividends in the
preceding years and also strengthens the platform of the Bank. The percentages
of distribution of Dividends are as follows:

Table

Year

2003

2004

2005

2006

2007

2008

Cash
dividend

Nil

14%

25%

8%

40%

Nil

Stock
dividend

Nil

Nil

12.50%

24%

Nil

23.50%

Total

Nil

14%

37.50%

32%

40%

23.50%

 

Manpower

The Manpower of the Bank is
increasing steadily and proportionately with the expansion of branches and
activities of the Bank. At the end of 2008, the total manpower of the Bank
stood at 938. The Bank is trying to ensure optimum utilization of its manpower
by improving the standard of their efficiency and quality of service. 

Table

Year

2004

2005

2006

2007

2008

No. of Manpower

237

343

500

627

938

5.8 SWOT Analysis

SWOT
analysis is the detailed study of an organization’s exposure and potential in
perspective of its strength, weakness, opportunity and threat. This facilitates
the organization to make their existing line of performance and also foresee
the future to improve their performance in comparison to their competitors. As
though this tool, an organization can also study its current position, it can
also be considered as an important tool for making changes in the strategic
management of the organization.

So, we can say
that it is a technique used by the credit officers to evaluate credit proposal
submitted by company especially by the production concern. Here,

S –   Denotes
Strength

W – Denotes
Weakness

O – Denotes
Opportunity

T – Denotes
Threat

à Strengths:

 — Jamuna
Bank ltd has already established a favorable reputation in the banking industry
of the country. It is one of the leading private sector commercial banks in
Bangladesh. The bank has already shown a tremendous growth in the profits and
deposits sector.

—  Jamuna Bank ltd has provided its banking
service with a top leadership and management position. The Board of Directors
headed by its Chairman Mr. Md. Nazrul Islam is a skilled person in business
world. Alamgir Kabir, the Advisor of the bank is a reputed senior chartered
accountant having 30 years vast experience in accounts, audit, and finance&
banking at home and abroad.
Mr. Mohammed Lakiotullah is the Managing Director of the bank management
team. The top management officials have all worked in reputed banks and their
years of banking experience, skill, and expertise will continue to contribute
towards further expansion of the bank.

Jamuna Bank ltd has already achieved a high growth rate
accompanied by an impressive profit growth rate in 2008. The number of deposits
and the loans and advances are also increasing rapidly.

Jamuna Bank ltd has an interactive corporate culture. The
working environment is very friendly, interactive and informal. And, there are
no hidden barriers or boundaries while communicate between the superior and the
employees. This corporate culture provides as a great motivation factor among
the employees.

à
Weaknesses:

  The bank failed to provide a strong
quality-recruitment policy in the lower and some mid level position. As a
result the services of the bank seem to be Deus in the present days.

  The poor service quality has become a
major problem for the bank. The quality of the
service at Jamuna Bank Ltd is higher than the Dhaka Bank, Prime Bank or
Dutch Bangla Bank etc. But the bank has to compete with the Multinational Bank

— In terms of promotional sector,
Jamuna Bank ltd has to more emphasize on that. They have to follow aggressive
marketing campaign.

à Opportunities:

—  In order to reduce the business risk, Jamuna
Bank ltd has to expand their business portfolio. The management can consider
options of starting merchant banking or diversify into leasing and insurance
sector.

— The activity in the secondary financial market has direct
impact on the primary financial market. Banks operate in the primary financial
market. Investment in the secondary market governs the national economic
activity. Activity in the national economy controls the business of the bank.

—  Opportunity in retail banking
lies in the fact that the country’s increased
population is gradually learning to adopt consumer finance. The bulk of
our population is middle class. Different types of retail lending products have
great appeal to this class. So a wide variety of retail lending products has a
very large and easily pregnable market.

 
A large number of private banks coming into the market
in the recent time. In this competitive environment Jamuna Bank ltd must expand
its product line to enhance its sustainable competitive advantage. In that
product line, they can introduce the ATM to compete with the local and the
foreign bank. They can introduce credit card and debit card system for their
potential customer.

 
In addition of those things, Jamuna Bank ltd can introduce
special corporate scheme for the corporate customer or officer who have an
income level higher from the service holder. At the same time, they can
introduce scheme or loan for various service holders.

 
And the scheme should be separate according to the
professions, such as engineers, lawyers, doctors etc

Threats:

— All
sustaining multinational banks and upcoming foreign and private banks pose
significant threats to Jamuna Bank ltd. If that happens the intensity of
competition will rise further and banks will have to develop strategies to
compete against these local and
foreign banks.

 
The default risks of all term loans have to be minimized
in order to sustain in the financial market. Because of default risk the
organization may become bankrupt. Jamuna Bank ltd has to remain vigilant about
this problem so that proactive strategies are taken to minimize this problem if
not eliminate.

 
The low compensation package of the employees from mid
level to lower level position is not able to keep the employee motivation. As a
result, good quality employees leave the organization and it effects the
organization as a whole.

Finally it can be said that, top management officials have experience skill and
proficiency on banking. JBL has got impressive decoration, for that it
creates the attention of the potential customers. Lovely environment boost up
capability of the employees. Besides these JBL has adequate capital, high
interest rate for DPS and Savings account and its goodwill. For poor
employment system, JBL is loosing its reputation. For this reason right people
are also not in right place for reference appointment. Another weakness is low
interest rate of FDR, for which JBL is loosing their customers. This analyzes
the opportunity, which will be available to a company in near future, such as
withdraw of tax, incentives, export, exemption and more credit facilities etc.
JBL can also adopt diversification strategy in expanding the business line into
leasing and insurance company. It analyzes
the threats, which may face the company such as international law, withdraw of
most favorable nation (MFN) and GSP facilities etc. Some contemporary,
multinational and upcoming banks are competitors of JBL. These bank poses
threat for JBL. So JBL should take necessary steps to compete with them.

Comparison of performance among JBL, AB bank ltd& HSBC Ltd.

AB
Bank is known as one of leading bank of the country since its commencement 27
years ago. It continues to remain updated with latest products and services,
considering consumer and client perspectives. AB Bank has thus been able to
keep their consumer’s and client‘s trust while upholding their reliability,
across time. On the other hand,
The Hongkong and Shanghai Banking Corporation Limited (HSBC),
Bangladesh Branches (the Bank) commenced its banking operations in Bangladesh
on 3 December 1996 after obtaining its banking license from Bangladesh Bank on
17 April 1996. HSBC is incorporated in Hong Kong and its ultimate holding
company HSBC Holdings plc (the Group) is incorporated in England.

In
spite of adverse market conditions, AB bank ltd concluded the 2008 financial
year with good results. The Bank’s consolidated profit after taxes amounted to
taka 230 crore or which is 21 % higher than that of 2007 and HSBC concluded the
2008 financial year with profit after taxes amounted to taka above 193 crore
which is 13.7 % higher than that of 2007 whereas JBL earned profit of tk.
479437923 in 2008 with a spectacular growth of 438.02 percent over the
preceding year. Thus in terms of profit JBL has shown a good performance though
it is novice bank compare to AB bank ltd and HSBC Ltd. Moreover, in 2008, the
deposit of the AB bank rose by 1518 crore i.e.; 28.45% and the deposit of the
HSBC rose by above 666 crore i.e;15% whereas the deposit of the JBL was
tk.27307.94 million in 2008 against that of tk. 20924.02 million in the
preceding year showing an increase of tk.6383.92 million being 30.51 percent .
Thus, JBL has shown a decent performance in terms of the deposit compare to AB
bank ltd and HSBC Ltd.

In
addition, in 2008, the diversified loan portfolio of AB Bank grew by 38.60% and
the diversified loan portfolio of HSBC Ltd grew by 1.5 % whereas JBL raise the
credit portfolios to tk.21036.86 million in 2008 with an increase of tk.
4419.41 (26.59%) over that of the preceding year. Besides, JBL has established
more than 41 branches around the Bangladesh within 8 years whereas AB bank Ltd
has established 74 branches within 27 years and HSBC has established 9 branches
within 13 years. Thus it’s providing evidence that JBL has accelerated their
business activities more smoothly compare to AB Bank Ltd and HSBC ltd.

On
the other hand, Credit Rating Information and Services Limited (CRISL) upgrades
the rating of JBL Long term to A(pronounced as single A minus) from
“BBB+” and reaffirms short-term rating to “ST-3”.The above rating has been done
in consideration of Bank’s visible improvement in fundamentals such as capital
adequacy, liquidity position, and profitability of real time online banking etc.
Financial institution rated this category are adjudged to offer adequate safety
of timely repayment of financial obligations. This level of rating indicates a
corporate entity with an adequate profile whereas AB bank maintained its sound
credit rating in 2008 to that of the previous year. The Credit Rating Agency
awarded the bank A1 rating in the long term and ST-2 rating in the short term.
On the other hand, Credit Rating Agency of Bangladesh
(CRAB) Limited has affirmed AAA (Pronounced Triple A) rating in the long
term and ST-1 rating in the short term to The Hongkong and Shanghai
Banking Corporation Limited, Bangladesh Branches. Commercial banks rated in the
long term AAA belong to ‘Highest Safety’cohort. Banks rated in this category
are adjudged to be the strongest banks, characterized by excellent financials,
healthy and sustainable franchises, and a first rate operating environment. Moreover
AB Bank ahead from JBL in terms of dividend payment, they declared a 200% stock
dividend to its shareholders whereas JBL has declared 23.50%, in contrast, HSBC
LTD is a multinational bank and not listed company of SEC that’s why it does
not declare any dividend in Bangladesh.

Highlights Of the overall activities of the JBL, AB bank and HSBC Bank
ltd.

Sl#

Particulars

2008 Taka(JBL)

2008 Taka(AB Bank Ltd)

2008 Taka(HSBC Bank Ltd)

Changes in %(JBL)

Changes in %( AB Bank Ltd)

Changes in %( HSBC Ltd)

1

Paid-up Capital

1313265200

2229785400

125.56

200

2

Total Capital

2444338501

7439796153

9649320438

30.52

55.48

20.8

3

Capital surplus/deficit

392695301

1644359819

5871788049

7.70

397.53

27.3

4

Total Assets

31646629499

84053612585

64583724210

19.85

32.26

16.3

5

Total Deposits

27307936141

68560474323

51163855497

30.51

28.45

15.0

6

Total loans Advances

21036861012

56708771906

34302744271

26.59

38.60

1.5

7

Total contingent liabilities& commitments

9169471638

2607430983

30243116602

43.07

40.26

54.8

8

Credit-Deposit Ratio

77.04%

82.71

67

(3.00)

7.90

-11.8

9

Ratio of classified loans against total loans

2.84%

2.99

2.04

(43.87)

(30.60)

59.4

10

Profit after taxation

479437923

2300621640

1937357086

438.02

20.86

13.7

11

Amount of classified loans

598309000

506000000

(28.80)

(35.05)

12

Provision kept against classified loans

296285000

658205595

597310009

(42.90)

(0.26)

38.3

13

Provision surplus/deficit

81600219

191187497

43.62

3554.0

14

Cost of fund

12.49%

11.09%

21.15%

1.88

5.22

-12.9

15

Interest earning Assets

27668329466

68593162817

59377560694

1052.47

39.40

44.3

16

Non- Interest earning Assets

3978300033

15460449768

5206163516

65.71

7.80

-63.8

17

Return on Investment(ROI)

16%

21.22%

4%

81.82

(7.23)

-75.0

18

Return on Assets(ROA)

1.51%

3.12%

3%

344.12

(8.63)

0.0

19

Income from Investment

666152122

2152888463

419372118

40.40

24.14

7.6

20

EPS

36.51

103.18

$6.65

402.20

20.86

21

Net earning per share

38.21

103.18

375.25

20.86

22

Price-earning ratio

6.98

7.97

$ 7.3945

(86.98)

(20.31)

Comments on Financial Highlights:

·
In
case of total capital, JBL has increased it with a spectacular growth of 30.52
percent over the preceding year. On the other hand, in 2008, the total capital
of AB and HSBC Ltd increased to 55.48 and 20.8 percent compare to prior year.
As JBL is a novice bank compare to AB and HSBC, they show a decent performance
in order to raise their total capital.

·
·
In
respect to Return on Assets (ROA), JBL has utilized its assets very efficiently
and increased to 344.12 % whereas AB bank has failed to utilize its asset and
decreased to 8.63.In contrast, there is no change of Return on Assets (ROA of
HSBC ltd, it remain the same compare to previous year.

·
In
respect to Income from Investment, JBL has earned a higher income from its
investment and increased to 40.40 in 2008 compare to 2007 whereas AB has earned
a lower income from its investment and increased to 24.14 in 2008.On the other
hand HSBC is lowest in order to earn income from its investment which is 7.6 %
higher than that of 2007.

However, JBL shows a good
performance in some area but it should give more concentration on some
particular area where it becomes unable to display its control such as total
contingent liabilities& commitments, Capital surplus/deficit and so on. 

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-

v  Minimum opening deposit of TK.5000/-
is required, but under special circumstances it may be opened with tk.2000

v  There is no withdrawal limit

v  No Interest more or less is given
upon the deposited money

v  Minimum Tk.2000/= balance must always
maintain all the time

v 
Profit rate is 0.00%

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-

v 
Minimum
opening deposit of Tk.1000/= is required.

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

v 
Withdrawal
amount should not be more than 1/4th of the total balance at a time
and limit six transactions in a month.

v 
If
withdrawal amount exceed 1/4th of the total balance at a time no
Profit more or less is given upon the deposited money for that month.

v 
Profit more or fewer
rates are 6.

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:

Step 1

The account should be properly
introduced by Any one of the following:

§  An existing Current Account holder
of the Bank.

§  Officials of the Bank not below the
rank of an Assistant officer.

§  A respectable person of the
locality well known to the Manager/Sub-Manager of the Branch concerned.

Step 2

Receiving filled up application in
bank’s prescribed form mentioning what type of account is desired to be
opened.

Step 3

§  The form is filled up by the
applicant himself / herself

§  Two copies of passport size
photographs from individual are taken, in case of firms photographs of all
partners are taken

§  Applicants must submit required
documents

§  Application must sign specimen
signature sheet and give mandate

§  Introducer’s signature and accounts
number – verified by legal officer.

Step 4

Authorized Officer accepts the
application.

Step 5

Minimum balance is deposited – only
cash is accepted.

Step 6

Account is opened and a Cheque book
and pay-in-slip book is given.

►Documents Required For Opening Account

Introduction of the account.

Two photographs of the signatories
duly attested by the introducer.

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

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

Introduction of the account.

Two
photographs of the signatories duly attested by the introducer.

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

Partnership Deed duly certified by
Notary public.

Registration (If any).

Resolution of meeting for opening an
account.

Updated Trade license.


Proprietorship account:

Introduction of the account.

Two
photographs of the signatories duly attested by the introducer.

Valid copy of Trade License.

Rubber stamp.

TIN number certificate.

Photo Identity.

Limited company:

Introduction of the account.

Two photographs of the signatories
duly attested by the Introducer.

Valid copy of Trade License.

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

Certificate of Incorporation.

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

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

List of directors along with
designation & specimen signature.

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

  Rubber Stamp (Seal with designation
of each person)

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

Club / Societies account:

Introduction of the account.

Two photographs of the Signatories
duly attested by the introducer.

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

List of Existing Managing Committee.

Resolution of meeting for opening an
account.

Registration (if any).

Rubber Stamp.

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

►Closing Of An Account:

The closing of an account may happen,

q  If the customer is desirous to close
the account,

q  If the Jamuna Bank Ltd finds that the
account is inoperative for a long duration.

q  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 another 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.

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 below:

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:

Ø  Between banks and non banks customer

Ø  Between banks in the same country

Ø  Between banks in the different
centers.

Ø  Between banks and central bank in the
same country

Ø  Between central bank of different
customers.

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

Ø  Payment order ( PO)

Ø  Demand Draft ( DD)

Ø  Telegraphic Transfer (TT)

The basic three types of local remittances are
discussed below

Ø  Test – key Arrangement:Ø  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 is a system by which a bank can collect customers
fund from one bank to another through 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.

[

·
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.

: 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.

  : 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

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

Same day clearing house:

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

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

Special clearinghouse:

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

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

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

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

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

back) clearing house date.

Cheque must be signed.

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

Mutilation of Cheque.

Cheque should be crossed (not for
bearer Cheque).

  Account number in the deposit slip
must be clear.

  Depositor’s signature in the deposit
slip.

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

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

 

Insufficient fund.

Amount in figure and word differs.

Cheque out of date/ post- dated.

Payment stopped by the drawer.

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

Drawer’s signature differs /
required.

Crossed Cheque to be presented
through a bank.

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.

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

Ø  Refer to drawer

Ø  Not arranged for

Ø  Effects not cleared. May be presented
again.

Ø  Exceed arrangements

Ø  Full cover not received.

Ø  Payment stopped by drawer

Ø  Payee’s endorsement irregular/
required.

Ø  Payees endorsement irregular, require
banks confirmation.

Ø  Drawer’s signature differs/ required.

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

Ø  Cheque is post dated/ differs.

Ø  Crossed Cheque must be presented
through a bank.

Ø  Clearing stamp required/ requires
cancellation.

Ø  Addition to bank discharge should be
authenticated.

Ø  Cheque crossed “account payee only”

Ø  Collecting bank discharge out of
date/ mutilated.

Ø  Amount in words and figures
irregular/required.

If the Cheque is dishonored due to
insufficiency of funds than JBL charges TK. 50/= as penalty.

Crossing of the Cheque.

(Computer) posting of the Cheque.

Separation of Cheque from deposit
slip.

Sorting of Cheque 1st bank wise and
then on branch wise.

Computer print 1st branch
wise & then bank wise.

Preparation of 1st
Clearing House computer validation sheet.

Examine computer validation sheet
with the deposit slip to justify the computer posting

·
In modern banking the mechanism has become complex as far as
smooth transaction and safety is concerned. Customer does pay and receive bill
from their counterpart as a result of transaction. Commercial bank’s duty is to
collect bills on behalf of their customer.

Types of Bills for Collection

i.  
Outward Bills for Collection (OBC).

Inward Bills for Collection (IBC).

What is OBC?

 

OBC means Outward Bills for
Collection .OBC exists with different branches of different banks outside the
local clearinghouse. Normally two types of OBC:

OBC with different branches of other
banks out of clearing house.

OBC with different branches of the
same bank.

Procedure of OBC:

Entry in the OBC register.

Put OBC number in the Cheque.

Dispatch the OBC Cheque with
forwarding.

Reserve the photocopy of the Cheque,
carbon copy of the forwarding and deposit slip of the Cheque in the OBC file.

Commission for collection:

Inward bills for collection (IBC)

When the banks collect bills as an
agent of the collecting branch, the system is known as IBC. In this case the bank will work as an agent of the collection
bank. The branch receives a forwarding
letter and the bill.

Procedure of IBC:

IBC against OBC: To receive the OBC
Cheque first we have to give entry in the IBC Register .The IBC number should
put on the forwarding of the OBC with date.

Deposit of OBC amount: OBC Cheque
amount is put into the “sundry deposit-sundry Creditors account”, prepare debit
& credit voucher of it. If the OBC Cheque is honored, send credit advice
(IBCA) with signature & advice number of the concern branch for the OBC
amount.

If the OBC Cheque is dishonored, the
concerned branch is informed about it.

Again place in the clearing house or
send the OBC Cheque with Return Memo to the issuing branch according to their
information.

 

Foreign exchange is an important
department of Jamuna Bank Limited, which deals with import, export and foreign
remittances. Foreign Exchange is an International Department of the Bank. It
facilitates international trade through its various modes of services. It
bridges between importers and exporters. This department mainly deals in
foreign currency, that’s why it is called foreign exchange department.

This department is playing an
important role in enhancing export earnings, which aids economic growth and in
turn it helps for the economic development. On the other hand, it also helps to
meet those goods and service, which are most demandable and not adequate in our
country.

Foreign
Exchange Department is divided in to three sections
.

Letter of credit is a credit contract where the
Opening/Issuing Bank is committed to place an agreed amount of money at the
beneficiary’s disposal under some agreed conditions.

A revocable credit is one where the issuing bank is at
liberty to revoke that is it can cancel the credit at any time. According to
UCPDC (Uniform Customs for Practice of Documentary Credit), a revocable credit
may be amended or canceled by the issuing bank at any time and without prior
notice to the beneficiary before shipment of consignment against the L/C.

: An irrevocable L/C is one, which cannot be revoked or
amended by the bank with the concurrence of the interested party.

3.6.2 Some
Important Terms of Letter Of Credit

Sometimes the importer may require
amendment to be made in the L/C, but this amendment must be made within the
consent of exporter, otherwise amendment will have no validity.

Sometimes the importer may not rely
on the L/C issuing bank. Exporter requires the L/C to be confirmed by another
bank situated in his country. Then on request of issuing bank, any bank in
exporter’s country gives guarantee about the payment. This is called confirming
bank. By adding such confirmation, confirming banks undertakes the liability to
honor the bill of exchange of exporter.

Validity and Expiry of
Credit: All L/C must
mention the expiry date of L/C with in which the documents for payment
/acceptance must be presented. This must exceed the date of issuance of the
bill of lading or other shipping documents, during which presentation of
documents for payment/acceptance must be made.

Under FOB basis, the exporter quotes
the price covering all his expenses until the goods duty packed are delivered
“on board”, the carrying vessel named and arranged by the buyer with the
freight and the insurance being paid by the buyer. The importer bears any cost
incurred and all risks from the time the goods are placed on board inclusive of
those arising out of the ship’s failure on berth.

Cost and Freight(C
& F): In this
case the exporter quotes the FOB price plus insurance cost. The
responsibilities of carrying out all formalities for shipment of the goods
developed upon the seller.

CIF (Cost, Insurance and
Freight): Under CIF,
the exporter quotes C&F price plus the insurance cost. The responsibility
of carrying out all formalities for shipment of the goods develop upon the
seller.

FAS (Free alongside
Ship): Under FAS,
the seller quotes the price covering all his charges until such time as goods
are loaded on Train at the specified railway station. The buyer is responsible
for all charges from the time he takes delivery of all goods from the
exporter’s yard.

The seller quotes the price of the
goods ex-factory on the date agrees. The importer is responsible for all
further necessary arrangements and charges.

3.6.3 Parties to Letter Of Credit

1. Importer (Buyer)/Applicant

2. The issuing Bank (Opening Bank)

3. The Advising Bank/Notifying Bank

4. Exporter/seller

5. Confirming Bank

6. Negotiating Bank

7. The paying/Accepting/Remitting Bank

The person who request the bank
(opening bank) to issue letter of credit. As per instructing and on behalf of
the applicant bank opens L/C in line with the terms and conditions of the
seller contract between the buyer and the seller.

Opening Bank/Issuing
Bank: The bank which
open/issue letter of credit on behalf of the applicant/importer. Issuing bank’s
obligation is to make payment against presentation of documents drown strictly
as per terms of the L/C.

Advising/Notifying
Bank: The bank
through which the L/C is advised/forward to the beneficiary (exporter). The
responsibility of the advising bank is to communicate the L/C to the
beneficiary after checking the authenticity of the credit. It acts as an agent
of the issuing bank without having any engagement on their part.

Beneficiary of the L/C is the party
in whose favor the letter of credit is issued. Usually they are the seller or
exporter.

The bank which under instruction in
the letter of credit adds confirmation of making payment in addition to the
issuing bank. It is done at the request of the issuing bank having arrangement
with them. This confirmation constitutes a definite undertaking of the part of
confirming bank in addition to that of issuing bank.

The bank which negotiates documents
and pays the amount to the beneficiary when presented complying credit terms.
If the negotiations of documents are not restricted to a particular bank in the
L/C, normally negotiating is the banker of the beneficiary.

Reimbursing / Paying
Bank: The bank
nominated in the letter of credit by the issuing bank to make payments
stipulated in the document, complying with reimbursing bank.

The Plan of
Payments By Means Of the Letter Of Credit

3.6.4 The
Description of Process

à
The
contract is concluded between the importer and exporter.

à
The
importer addresses in serving bank with the request to let out irrevocable the
letter of credit (to open the letter of credit) according to condition to the
contract and transfers the sum of a covering under the letter of credit.

à
The
bank of the buyer opens the required letter of credit and the
bank-correspondent asks to notify the supplier on opening the letter of credit.

à
Straight
Bank (the bank-correspondent of the bank-emitter) informs the supplier on
opening of the letter of credit.

à
The
exporter organizes transportation of the goods by means of the conclusion of
the agreement with the transport or insurance company and receives the
transport invoice or insurance policy.

à
The exporter gives, according to the contract,
the following documents:

Ø  Proforma Invoice,

Ø  Commercial Invoice,

Ø  Bill of loading,

Ø  Insurance policy,

Ø  Packing sheet/list,

Ø  Certificate of quality,

Ø  Others.

à
And
other documents straitening to bank for payment under the documents. It is
supposed, that all documents correspond to conditions of the letter of credit.
In this case we proceed from the assumption, that straitening and executing
bank is the same.

à
The
executing bank checks all the documents on conformity to the letter of credit
and if not it is found out of any divergences are found out; executing bank can
work with one of the following ways:

à
To
send the documents for collection to Bank-Emitter,

à
To
pay the documents after reception form the exporter of the letter of guarantee,

à
To
pay the documents after reception of consent with divergences from the
Bank-Emitter.

à
Executing
Bank sends the documents to the bank-emitter according to the conditions,
stipulated by the letter of credit.

à
Executing
bank sends the requirement about a covering (with the invoice of the addressee
under the letter of credit) to confirming bank.

à
The
Bank-Emitter notifies the buyer on arrival of the documents.

à
The
importer receives from the bank-emitter the documents.

à
The
importer gives the invoice of the transport company for reception of the goods.

à
After
reception if the goods from the transport

3.6.5 Modes of Sales of Goods

Cash in advance: Risk is minimum and The
Proforma invoice is issued.

Open Account: Goods
are sent first and payment is made afterwards. There are no intermediaries.
Proforma invoice is used here as well.

Documentary Collection: Same as an open account but the use of bank as an
intermediary. Here the risk is zero. Here the bank acts like an agent.

Documentary Credit: L/C

Here modes 1, 2 and 3 are built on
good faith and relationship, but mode 4 comes with a third party guarantor.

3.6.6 Back-to-Back L/C:

Back-to-back L/C means one credit
backs another. It is new credit in favor of another beneficiary. Sometimes
beneficiary seller of a credit himself is unable to supply goods specified in
the L/C and required to purchase from another supplier by opening second
credit. Besides, the formalities and requirements for (L/C opening) the
following formalities and documents are also required for opening back-to-back
L/C

Master L/C

Valid bonded wear house licenses

Quota allocation for quota items

ERC in addition to IRC

Indemnity/Undertaking

No objection from previous banker

Factory inspection certificate

BGMEA Membership

3.6.7 Accounts
Section:

Accounts Department is called as the
nerve Centre of the bank. In banking business, transactions are done every day
and these transactions are to be recorded properly and systematically as the
banks deal with the depositors’ money. . Improper recording of transactions will
lead to the mismatch in the debit side and in the credit side. To avoid these
mishaps, the bank provides a separate department; whose function is to check
the mistakes in passing vouchers or wrong entries or fraud or forgery. This
department is called as Accounts Department. If any discrepancy arises
regarding any transaction this department report to the concerned department.

Besides these, the branch has to
prepare some internal statements as well as some statutory statements, which
are to be submitted to the Central Bank and the Head Office. This department
prepares all these statements.

Workings of this department:

Ø  Recording the transactions in the cashbook.

Ø  Recording the transactions in general and subsidiary
ledger.

Ø  Preparing the daily position of the branch comprising
of deposit and cash.

Ø  Preparing the daily Statement of Affairs showing all
the assets and liability of the branch as per General Ledger and Subsidiary
Ledger separately.

Ø  Making payment of all the expenses of the branch.

Ø  Recordings inter branch fund transfer and providing
accounting treatment in this regard.

Ø  Preparing the monthly salary statements for the
employees.

Ø  Preparing the weekly position for the branch which is
sent to the Head Office to maintain Cash Reserve Requirement (C.R.R)

Ø  Preparing the monthly position of the branch, that is
sent to the Head Office to maintain Statutory Liquidity Requirement (S.L.R).

Ø  Make charges for different types of duties

Ø  Preparing the budget for the branch by fixing the
target regarding profit and deposit so as to take necessary steps to generate
and mobilize deposit.

Ø  Checking of Transaction List

Ø  Recording of the vouchers in the
Voucher Register.

Ø  Packing of the correct vouchers
according to the debit voucher and the credit voucher.

The Product and Services of

Jamuna Bank Ltd

Deposit Scheme:

Besides Fixed Deposits, Savings Bank
deposits and Current Account Deposits, the Bank has introduced the following
customer friendly deposit schemes:

1. Pension Savings Scheme (PSS)

1. Monthly Saving Scheme (MSS)

2. Lakhpati Deposit Scheme

3. Millionaire Deposit Scheme:

4. Kotipoti Deposit Scheme:

5. Marriage Deposit Scheme (MDS):

6. Education Savings Scheme

7. Pension Savings Scheme (PSS)

8. Car Deposit Scheme:

9. Travel Deposit Scheme:

10. Household Durable Deposit Scheme:

11. Mudaraba Hajj Saving Scheme:

12. Rural Deposit:

13. Monthly Benefit Scheme (MBS)

14. Money Multiplier Deposit Scheme:

15. Sangsar Deposit Schemes:

16. Senior Citizen Benefit Scheme:

Monthly Saving Scheme (MSS)

 

Savings is the best friend in your
bad days. Small savings can build up a prosperous future. Savings can meet up
any emergencies. JBL has introduced Monthly Savings Scheme (MSS) that allows
you to save on a monthly basis and get a handsome return upon maturity. If you
want to build up a significant savings to carry out your cherished dream, JBL
MSS is the right solution.

Savings Plan and Benefit:

 

Eligibility:

v 
MSS
account can be opened at any Branch of JBL

v 
For
opening a MSS account, maintenance a savings account with JBL is required

Facility:

v 
The
concerned customer can avail loan facility up to 80% of the deposited amount

v 
They
can deposit the monthly instilment at any branch of JBL and the same through
on-line banking

v 
Monthly
installment can be automatically collected from your savings account maintained
with JBL

v 
Customer
can choose any day of the month as installment date

Terms & Conditions:

v 
Bank
reserves the right to close the scheme if customers fail to
deposit3-consecutive installments

v 
If
the scheme is closed within 6-months, customer will get the deposited amount
only and no interest/profit will be paid for the scheme. If it is closed after
6-months, customers will get the deposited amount along with the interest at
the normal savings rate up to the time of closure

v 
The
above figures are indicative only and subject to change from time to time

v 
Money
Laundering Prevention Act shall be exercised as per rules of Bangladesh Bank

v 
No
loan facility will be allowed from any other Bank(s)/Financial Institution
against the deposited amount except JBL

To become a lakhpati is a dream to
most of the people of Bangladesh especially to the lower and lower middle class
income group. We experience our expectations and wants are enormous in nature
in our small span of life. To meet our deposit and wants we need right plan.

Keeping the above in mind JBL has
introduced “Lakhopati Scheme” which has flexibility in report of maturity and
monthly installment as per affordable capacity.

Savings Plan and Benefit:

Terms & Conditions:

v 
Bank
reserves the right to close the scheme if customers fail to
deposit3-consecutive installments

v 
If
the scheme is closed within 6-months, customer will get the deposited amount
only and no interest/profit will be paid for the scheme. If it is closed after
6-months, customers will get the deposited amount along with the interest at
the normal savings rate up to the time of closure

v 
Duties
and taxes are payable by the customers as per government rules

v 
The
above figures are indicative only and subject to change from time to time

v 
Money
Laundering Prevention Act shall be exercised as per rules of Bangladesh Bank

Millionaire Deposit Scheme:

It is a dream for many small savers
to become a millionaire. The word ‘Millionaire’ is really exciting. This dream
can be a reality if you have a calculated plan and strong determination. JBL
has introduced ‘Millionaire Deposit Scheme’ which has flexibility in respect of
period and monthly deposit as per your affordable capacity for giving a sum of
Tk. 1.00 (One) Million i.e. Tk. 10.00 (Ten) Lac at a time.

Savings Plan and Benefit

Eligibility:

v 
Millionaire
Deposit account can be opened at any Branch of JBL

v 
For
opening a millionaire deposit account, maintenance a savings account with JBL
is required

v 
Customer
can deposit monthly installment through any of our online branches

v 
Understanding
instruction system, Customer can deposit money automatically his accounts

Terms & Conditions:

v 
Bank
reserves the right to close the scheme if customers fail to deposit 3-consecutive
installments

v 
If
the scheme is closed within 6-months, customer will get the deposited amount
only and no interest/profit will be paid for the scheme. If it is closed after
6-months, customers will get the deposited amount along with the interest at the
normal savings rate up to the time of closure

v 
Duties
and taxes are payable by the customers as per government rules

v 
The
above figures are indicative only and subject to change from time to time

v 
Money
Laundering Prevention Act shall be exercised as per rules of Bangladesh Bank

Kotipoti Deposit Scheme:

To become ‘Kotipati’ is simply a
dream for the most of the populace of Bangladesh. It is realizable for high
income group who have strong determination and savings habit. If you decide and
plan to save money from your regular income, you can own Tk. 1.00 Crore easily
by making a planned savings. In this regard, JBL has introduced “Kotipati
Deposit Scheme” offering the savings plan fit to your income and to execute
your dream to be a Kotipati by monthly deposit at your affordable capacity. You
can take advantage of the “Kotipati Deposit Scheme” from JBL and plan for your
golden future accordingly.

Savings Plan and Benefit

Eligibility:

v 
Kotipati
Deposit account can be opened at any Branch of JBL

v 
For
opening a Kotipati deposit account, maintenance a savings account with JBL is
required

Terms & Conditions:

v 
Bank
reserves the right to close the scheme if customers fail to deposit
3-consecutive installments

v 
If
the scheme is closed within 6-months, customer will get the deposited amount
only and no interest/profit will be paid for the scheme. If it is closed after
6-months, customers will get the deposited amount along with the interest at
the normal savings rate up to the time of closure

v 
Duties
and taxes are payable by the customers as per government rules

v 
The
above figures are indicative only and subject to change from time to time

v 
Money
Laundering Prevention Act shall be exercised as per rules of Bangladesh Bank

Marriage Deposit Scheme (MDS):

Marriage of children, especially
daughter is a matter of great concern to the parents. Marriage of children
involves expense of considerable amount. Prudent parents make effort for
gradual building of fund as per their capacity to meet the matrimonial expense
of their children specially daughters. Parents get relief and can have peace of
mind if they can arrange the necessary fund for marriage of their children, no
matter whether they survive or not till the marriage occasion.

It can be a great help to the parents
if there is any scope of deposit of a modest amount as per their financial
capacity, which grows very fast at high rate of interest yielding a sizeable
amount on maturity

With this end in view JBL has
introduced Marriage Deposit Scheme, which offers you an opportunity to build up
your cherished fund by monthly deposit of small amount at your affordable
capacity.

Savings Plan and Benefit

Eligibility:

v 
Marriage
Deposit account can be opened in the name of children below the age of 18-years
along with legal guardian

v 
For
opening a marriage deposit account, maintenance a savings account with JBL is
required

Terms & Conditions:

v 
Bank
reserves the right to close the scheme if customers fail to deposit3-consecutive
installments

v 
If
the scheme is closed within 6-months, customer will get the deposited amount
only and no interest/profit will be paid for the scheme. If it is closed after
6-months, customers will get the deposited amount along with the interest at the
normal savings rate up to the time of closure

v 
Duties
and taxes are payable by the customers as per government rules

v 
The
above figures are indicative only and subject to change from time to time

v 
Money
Laundering Prevention Act shall be exercised as per rules of Bangladesh Bank

Education Savings Scheme:

Education is a basic need of every
citizen. Every parent wants to impart proper education to their children.
Education is the pre-requisite for socio-economic development of the country.
As yet, there is no arrangement of free education to the citizens from the
government level. As such, there should be pre-arrangement of fund to ensure
higher education of the children. Otherwise higher education may be hindered
due to change of economic condition, income of the parents at the future time
when higher education shall be required. Today higher education is becoming
expired day by day. Parents can get relief and can have peace of mind if they
can arrange the necessary fund for higher education of their children. As such,
JBL has introduced ‘Education Savings Scheme’ which offers you an opportunity
to build up your cherished fund by monthly deposit of small amount at your
affordable capacity or initial lump sum deposit to yield handsome amount on a
future date to meet the educational expenses. Under this Scheme you have the
different attractive options to avail the future benefit i.e. withdrawal of the
total amount accumulated in lump sum withdrawing monthly benefit to meet
educational expense keeping the principal amount intact or to withdraw both
principal and accumulated profit monthly for certain period.

Savings Plan and Benefit

Eligibility:

v 
Education
Savings account can be opened in the name of children beow the age of 18-years
along with legal guardian

v 
For
opening a education savings account, maintenance a savings account with JBL is
required

Terms & Conditions:

v 
Bank
reserves the right to close the scheme if customers fail to deposit
3-consecutive installments

v 
If
the scheme is closed within 6-months, customer will get the deposited amount
only and no interest/profit will be paid for the scheme. If it is closed after
6-months, customers will get the deposited amount along with the interest at
the normal savings rate up to the time of closure

v 
Duties
and taxes are payable by the customers as per government rules

v 
The
above figures are indicative only and subject to change from time to time

v 
Money
Laundering Prevention Act shall be exercised as per rules of Bangladesh Bank

Pension Deposit Scheme:

Savings Plan and Benefit:

Car Deposit Scheme:

Savings Plan and Benefit

Travel Deposit Scheme:

Savings Plan and Benefit

Household Durable Deposit Scheme:

Savings Plan and Benefit

Mudaraba Hajj Saving Scheme:

Savings Plan and Benefit

Rural Deposit:

Savings Plan and Benefit:

Jamuna Bank Ltd has introduced
Monthly Benefit Scheme (MBS) for the prudent persons having ready cash and
desiring to have fixed income on monthly basis out of it without taking risk of
loss and without encasing the principal amount. This scheme offers highest
return with zero risk. You can plan your monthly expenditure with the certain
monthly income under the scheme.

Deposit Plan and Benefit:

Note:
Government tax and other charges, if any are included with the above
benefit/figure.

How to Apply:

You have to open an account with any
branch of JBL. The above noted monthly benefit will be deposited in this
account in each month.

Eligibility:

v 
Any
person having age of above 18-years can participate in this scheme through
opening a savings or current account with any branch of JBL.

v 
Customer
must be Bangladeshi Nations/Citizen.

v 
Persons
below 18-years of old may open this account with his/her legal guardian

Characteristics:

v 
Minimum
deposit :   Tk. 1.00 (One) Lac

v 
Maximum
deposit  :   Any
amount multiple of Tk.1.00 (One) Lac

v 
After
opening the account, the profit element will be deposited in that account

v 
Upon
maturity the term may be renewed for the next tenure.

Overdraft Facility:

The concerned customer can avail loan
facility up to 80% of the initial deposit.

Terms & Conditions:

v 
Bank
reserves the right to change the rate of profit during the tenure of deposit.

v 
No
loan facility will be allowed from any other Banks/Financial institution
against the deposited amount except JBL.

v 
The
initial deposited amount and term shall not be changed before maturity.

v 
If
the scheme is closed within 6-months, customer will get the deposited amount
only and no interest/profit will be paid for the scheme. If it is closed after
6-months, customers will get the deposited amount along with the interest at
the normal savings rate up to the time of closure

v 
Duties
and taxes on the deposit, if any, are payable by the customers as per
government rules.

v 
Money
Laundering Prevention Act shall be exercised as per rules of Bangladesh Bank

Money Multiplier Deposit Scheme:

For people who have cash flow at this
moment and want to get it increasing quickly JBL has introduced Multiplier
Deposit Scheme.

Deposit Plan and Benefit:

How to Apply:

You have to open an account with any
branch of JBL having deposit of the above figure.

Eligibility:

v 
Any
person having age of above 18-years can participate in this scheme through
opening a savings or current account with any branch of JBL.

v 
Customer
must be Bangladeshi Nations/Citizen.

v 
Persons
below 18-years of old may open this account with his/her legal guardian

Characteristics:

v 
Minimum
deposit :   Tk. 50,000.00 (Fifty Thousand Only)

v 
Maximum
deposit  :   Any
amount

Overdraft Facility:

The concerned customer can avail loan
facility up to 80% of the initial deposit.

Terms & Conditions:

v 
Bank
reserves the right to change the rate of profit during the tenure of deposit.

v 
No
loan facility will be allowed from any other Banks/Financial institution
against the deposited amount except JBL.

v 
The
initial deposited amount and term shall not be changed before maturity.

v 
If
the scheme is closed within 6-months, customer will get the deposited amount
only and no interest/profit will be paid for the scheme. If it is closed after
6-months, customers will get the deposited amount along with the interest at
the normal savings rate up to the time of closure

v 
Duties
and taxes on the deposit, if any, are payable by the customers as per
government rules.

v 
Money
Laundering Prevention Act shall be exercised as per rules of Bangladesh Bank

Sangsar Deposit Schemes:

Deposit Plan and Benefit:

Characteristics:

v 
Minimum
deposit :   Tk. 50,000.00 (Fifty Thousand Only)

v 
Maximum
deposit  :   Any
amount multiple of Tk. 50,000.00 (Fifty Thousand Only)

Senior Citizen Benefit Scheme:

Deposit Plan and Benefit:

LOAN SCHEMES

Loan is an arrangement in which a lender
gives money or property
to a borrower, and the borrower agrees to return
the property or repay the money, usually along with interest, at some future point in time.

Classification of Loan:

Continuous Loan:

Ø  Continuous loan are: Cash Credit (CC)
Loan, SOD (FDR) Loan, SOD (FO) Loan, SOD (General) Loan etc.

Ø  CC Loan is for trade finance and also
daily transaction process

Ø  Interest Rate is 13% for CC Loan

Ø  SOD (FDR) gives 90% loan of his/her
FDR, and Interest rate is FDR rate + 2.5%

Demand Loan:

Ø  Demand loans are Loan Against Trust
Received (LTR), Payment Against Document (PAD), Loan Import Merchandise (LIM)

Ø  Demand loan is for importer

Ø  Interest Rate is 13%

Term Loan:

Ø  Term Loan are: SME Loan ( Small and
Medium Enterprise), SE Loan ( Small Enterprise), Loan General etc.

Ø  Interest Rate is 16% for SME and SE
Loan and This loan is without security loan

Ø  General Loan is for big industry and
interest rate is 13% to 16%

Jamuna Bank Ltd. Offers credit to almost all sectors of commercial activities having
productive purpose.

v 
The
loan portfolio of the Bank encompasses a wide range of credit programs.

v 
Credit
is also offered to major thrust sectors, as earmarked by the Govt. at a reduced
interest rate to develop frontier industries.

v 
Credit
facilities are offered to individuals including housewives, businessman, small
and big business houses, traders, manufactures, corporate bodies etc.

v 
Loan
is provided to the rural people for agricultural production and other off-farm
activities.

v 
v 
Prime
customers enjoy prime rate in lending and other services.

v 
Quick
appreciation, appraisal, decision and disbursement are ensured.

v 
Credit
facilities are extended as per guidelines of Bangladesh Bank (Central Bank of
Bangladesh) and operational procedures of the Bank.

Evaluation of Financial

Performance






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