General Banking and Deposit Scheme Of Rupali Bank Ltd.

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General Banking & Deposit Scheme Of Rupali Bank Ltd.

Part-2

CHAPTER ONE

Introduction

Rationale of the study:

Academic knowledge is far away from the practical knowledge. It is quite out of research to practice all the academic aspects in the reality. Sometimes intuition is more effective for managerial decision or to continue with an ongoing global business trend rather than theoretical aspects that are learned in the institutions or universities. Considering the previous ideas project work is really a praise-worthy program. It brings the students closer to the practice of organization and perfection of knowledge to some extent. On the other hand this project paper and defense on internship carries 3 credit hours.

1.1 Origin of the Report

All over the world the dimension of Banking has been changing rapidly due to Deregulation, Technological innovation and Globalization. Banking in Bangladesh has to keep pace with the global change. Now Banks must compete in the market place both with local institutions as well as foreign ones. To survive and thrive in such a competitive banking world, two important requirements are development of appropriate financial infrastructure by the central bank and development of “professionalism” in the sense of developing an appropriate manpower structure and its expertise and experience. To introduce skilled Banker, only theoretical knowledge in the field of banking studies is not sufficient. An academic course of the study has a great value when it has practical application in real life situation. So, I need proper application of my knowledge to get some benefit from my theoretical knowledge make it more tactful.

In a simple word, Excellence is the Capacity of producing desired result. So, Excellence of customer is, how customers perceive services, how they assess whether they have experienced quality services and whether they are satisfied or not.

When it refers to Excellence of customer, we assume that the dimensions of services and the ways in which customer evaluate services are similar where the customer is internal & external of the organization.

1.2 Background of the Report

After completion of all the courses of BBA every student has to go through a practical orientation in reputed business organization to gather the practical knowledge. Prepared a report based on General Banking & Deposit Scheme Of Rupali Bank Ltd.

1.3 Objectives of the Report

The objectives of the study are as follows:

Broad Objective:

• The broad objective of the report is to know about the General Banking & Deposit Scheme of Rupali Bank Ltd.

Specific Objective:

• To know about the customers’ reliability on service quality of Rupali Bank Ltd.
• To know about the customers’ responsiveness on service quality of Rupali Bank.
• To know about the customers’ assurance on service quality of Rupali Bank Ltd.
• To know about the customers’ empathy on service quality of Rupali Bank Ltd.
• To know about the customers’ tangibles on service quality of Rupali Bank Ltd.
• To analyze the customers satisfaction of service quality of Rupali Bank Ltd.
• To make recommendations for improving the quality of different services provided to the customers by Rupali Bank

1.4 Statement of the problem

In the current study, the researcher will use six important dimensions like reliability, responsiveness, assurance, empathy, Satisfaction and tangibles to find out the customer service quality of Rupali Bank. The problem statement, then, is stated as follows: The current study will identify the customer service quality of Rupali Bank considering key dimensions such as reliability, responsiveness, assurance, empathy, Loyalty, Satisfaction and tangibles.

1.5 Purpose of the Study

The purpose of the study was to present the relationship between service quality with customer satisfaction and customer loyalty in Rupali Bank, the leading public sector bank in Bangladesh. This study attempted to understand the customer perceptions on different service quality dimensions while dealing with this bank.

1.6 Methodology

Sources of Data Collection

The study was conducted based on both the primary and secondary sources of information.

Primary data

Gathered primary data from the customers when they came for services at the office of Rupali Bank Islampur Road Branch. Provided questionnaire to those customers who were interested in participating in the survey.

Secondary data

Annual reports of Rupali Bank, class lectures provided from Rupali Bank Staff College branch, online articles/website of Rupali Bank Ltd.

Population

The questionnaire was distributed to those customers who have taken any kind of services from this bank, whether they are account holder of this bank or not. The Rupali Bank Islampur Road Branch total population is 150. I think that population size is small that is why had taken 50 sample size.

Sample size

For conducting my research total sample size was 50.

Sampling technique

For customer interview I used non probability convenience sample.

1.7 Scope of the Report

This report shows details about Rupali Bank Ltd and its General Banking management. This study will identify the customer service quality of Rupali Bank considering key dimensions such as reliability, responsiveness, assurance, empathy, and tangibles.

1.8 Limitations of the Study

• Secrecy or confidentiality is a crucial matter in this organization. As an intern it was not possible to reach those secret topics.
• Not able to collect information from all the clients.
• Limited service hour.
• It was difficult to find out the gap between rules and regulations and real life practice. So, I went under a huge stress to find out those matters.

CHAPTER TWO

Internship and Overview of RBL

Introduction:

Bangladesh economy is a complicated dynamic system of relationship between different agents of society where banks plays a vital role to mobilize the economy. In a dynamic modern economic the Banking institutions make the monetary system more dynamic modern economic functions are meaningless and speed less without bank. To make the social system developed and dynamic no one can deny the role of Bank by any means. Banks act as a financial intermediary to mobilize fund from the surplus to deficit economic units. Now a day, Banks play a vital role as leading financial intermediary to meet the growing need of every economy.

After the emergence of Bangladesh, The Banking system has expanded a lot in the last three decades. Through many private commercial banks have been established, the major portion of banking business is covered by the four Nationalized Commercial Banks, such as ; Sonali, Janata, Agrani and Rupali Bank LTD. In our country, Rupali Bank is treated as the leading Banking institution after the Bangladesh bank.

Rupali Bank Ltd. has a great contribution about overall development of Bangladesh. This Bank tries to improve the socio economic condition of Bangladesh by various programs. Expect this Rupali Bank Ltd has an important role for solving employment problem.

During my fifteen days training at Rupali Bank Ltd. Islampur RoadBranch, Dhaka, I learnt about general banking procedure such as: cash receipt and payments, Remittance, Demand draft, Mail transfer, Telegraphic transfer, Statement of affairs, loans and advance, token issue etc. Though I have an overall idea about Banking, I have to focus on Loan and advance management.

2.2 What is internship?

Internship means to acquire knowledge and information through work at organization.

Internship is a process to achieve practical knowledge about some theoretical lesson. Actually internship means having a practical knowledge from real field of work.

So, internship is a practical training in any business unit to understand the application of theoretical knowledge in practical field and it broadens the students out look.

At present other courses of education has adopted internship as a major requirement. Theoretical knowledge is important for developing understandability of a student. But except of some practical training these theoretical knowledge is incomplete. During internship, the students face various practical problems and thus they learn how to deal with those problems.

2.3 Significance of Internship:

Modern period is the era of large and heavy production and industry. It is also business period and the business in this era has been emerged as globalize business. Due to rapid changed of theoretical knowledge, the academic as well as globalize business condition is volatile in nature. Under this volatile situation, only the theoretical knowledge cannot be helpful because it is quite traditional that cannot be able to adapt with the changing situation. Since each organization always try to maximize its profit earrings, to enhance the concern strategic advantages each firm should conduct internship program. Beside this each academic institution should also introduced more and more internship program as a part of its academic curriculum so that it can teach it student perfectly an practically. The importance and significance of internship program can be out lined through the following points:

1. To improve the quality of academic knowledge.
2. To make skilled labor and students.
3. To increase production and improve the quality of production
4. To find out the techniques and method for the problems faced by an organization.
5. To create better relationship between employees and administration.
6. To formulate better policies and strategies.
7. To implement effective controlling system.
8. To use valuable time of both workers and executives effectively.

Thus it is recognized that internship program is very essential to the firms as well as academic institution for attaining their goals.

2.8 Historical background of the Rupali Bank:

During the Pakistan time this bank was in private form. As per the Bangladesh Bank (Nationalization) order 1972 the government by amalgamating three banks, which were “The Muslim Commercial bank Ltd., “The Standard Bank Ltd.” And “the Australasia Bank limited” was nationalized with authorized share capital of Tk. 5 crores and with a paid up capital of Tk. 1 crore.

It share was divided as 51% for Govt. and 49% for private. But from that time the bank faced continuously loss. For this cause the Govt. decided ot make it nationalized bank. Then its share was divided as 95% of Govt. and 5% for private. Now its is divided as 94.22% for Govt. ans 5.78% for private.

The bank started with 159 branches in 1972. The number of branches of the bank has been increased to 493 on 31-12-2005. Out of the 493 branches 240 branches are in the urban areas and the remaining 252 branches are in the rural areas, and one branch is located in Karachi, Pakistan. The Rupali Bank has 25 Zones and a local office at Dhaka for close supervision and smooth control of the branch. Out of 493 branches, 28 branches are related to foreign exchange transaction and 6 branches are corporate branches.

Trends in Bangladesh Economy

Despite price hike of fuel, rice and most commodities in the global market coupled with such natural disaster as flood, cyclone, SIDR etc. in the country the Bangladesh economy showed signs of resilience by maintaining a satisfactory growth momentum during FY08.the government and Bangladesh Bank adopted policies in bringing the country’s economy back to its growth momentum. These policies contributed towards maintaining a strong real GDP growth of 6.2 percent in FY10, declining slightly compared to 6.4 percent of FY09.Economic growth was also aided by a robust growth: in exports and remittances of the expatriates, high US dollar terms, export: – earnings recorded a strong growth of 15.7 percent .At the same time remittances from non-resident Bangladesh nationals increased by 32.4 percent. The country’s external current account balance continued to record a significant surplus with a substantial increase in remittances of the expatriates offsetting trade deficit and services deficit.

The 6.2 percent real GDP growth in FY08 stood, on the supply side, by a robust growth in FY08 stood, on the supply side, by a robust growth in the industry sector along with continued strong growth in the services sector and a moderate growth in the agriculture sector. The industry sector attained 6.9 percent growth in FY08,being 1.5 percent lower than 8.4 percent of FY09.The services sector recorded 6.7 percent growth in FY08,slightly lower than 6.9 percent of FY09.

Domestic savings-GDP ratio stood at 20.1 percent in FY08 reducing slightly from 20.4 percent of FY07.On the other hand, investment –GDP ratio decreased from 24.5 percent of FY07 to 24.2 percent in FY10.

The rising trend of inflation of FY09 as measured by the Consumer Price Index(CPI)continued throughout FY08 due to higher prices of fuel oil and other imported goods in the international market, hindrance from disruptions in production and supply caused by floods, cyclones etc. and demand pressure generated from excess money supply. Annual average CPI (base FY96) inflation as of end June, 2010 rose to 9.9 percent from 7.2 percent as of end of June 2009.

Broad money (M2) growth stood at 17.6 percent in FY10 which was higher than the 17.0 percent growth in FY09 and also higher than the target. This growth in broad money was driven by higher growth in net domestic assets than inferred.Net foreign assets of the banking system increased by 15.1 percent in FY08 compared with the target of 3.4 percent but notably lower than the previous year’s increase of 49.4 percent. The credit to public sector grew by 11.9 percent in FY08 compared with projected growth of 26.4 percent and actual growth of 12.4 percent in FY07 due mainly to downsizing of Annual Development Program (ADP), satisfactory revenue collection and increased flow of foreign fund. The credit to the private sector grew notably by 24.9 percent in FY)* which was higher than 15.0 percent. In FY07 and also higher than projection of 14.9 percent reflecting momentum in economic activities.

The declining trend of interest rates that persisted over a couple of years till FY05 revised in FY08 and continued in FY09.Thereafter weighted average interest rate on bank advances recorded a modest decrease to 12.3 percent as of end June 2010 from 12.8 percent as of end June 2009.Over the same period the weighted average interest rate on bank deposits increased slightly from 6.9 percent to 7.0.

Exports and imports achieved robust and reasonable growth in FY08 and remittances from workers abroad showed a strong growth. Exports increased by 15.7 percent from USD 12,053 million in FY09 to USD 13,945 million in FY10 and remittances from workers abroad recorded 32.4 percent growth from USD 5,979 million in FY07 to USD 7915 million in FY10; while imports increased by 25.6percent from USD 15,511 million in FY09 to USD 19,486 million in FY08.Expressed in percentage of GDP, export earnings and import payments increased from 17.6 percent and 22.7 percent in FY09 to 17.7 percent and 24.7 percent in FY08 respectively.

Gross foreign exchange reserves held by Bangladesh Bank increased by USD 1,072 million to USD 6,149 million at the end of Fy08 from USD 5,077 million at the end of Fy07, about 3.8 months of import cover.

Significant progress has been made in implementing structural reforms in the financial sector especially in the banking sector in respect of corporation if the NCB’s strengthening competitive pressures, loosening government control tightening regulatory oversight and upgrading provisioning standards. Key measures have been taken including increase in the capital adequacy ratio to international norms, tightening in loan classification, issuance of risk guidelines and improvements in corporate governance of banks. The Banking Companies Act, 1991 has been amended for strengthening dynamism in the activities of the banking companies. Reforms aiming at improved fiscal sustainability by expanding the tax base, systematic consolidation of TAX instruments, improving Tax administration and strengthening public expenditure management have also achieved good success.

2.4 Methodological issues/methodology of the study:

The present study will cover the selected of Rupali Bank, Islampur Road Branch, Dhaka. i.e. the study will emphasize the overall position of loan and advanced showing the final variation in efficiency. Taking into account of the branch will make a complete enumeration. Methodology design of the study cover selection of out-let, selection of borrowers, sources of data, presentation of data, collection tools i.e. interview schedule, collection of data, forecasting of data, average, standard deviation, co-efficient of variance etc.

2.5 Sources of data and collection method:

Data means raw form. In order to perform this internship report, I can use various methods to collect and present data. Mainly used two types of data for this purpose:

(a) Primary data

(b) Secondary data

2.6 Collection of Primary data:

Primary data is the data, which is collected from the practical field.

Or

Primary data are those, which are collected a fresh and for the first time and thus happen to be original in character. There are seven methods of collecting primary data. These are as follows:

i) Observation method

ii) Direct interview communication

iii) Present communication.

iv) Through questionnaires

v) Through case study

vi) Survey method

To collect primary data from Rupali Bank, Islampur Road Branch, Dhaka. I used the following methods.

1) Observation method:

In this method, I have to seek the respondents (Officers, staffs and other employees) activities, working system and work. By this way I have collected data and information from this institution.

2) Interview method:

I have collected data by asking questions to the respondents, informal discussions with officers and employees of Rupali Bank, Islampur Road Branch, Dhaka.

3) Questionnaire method:

At first we made a questionnaire as the direction of our supervisor about the Rupali Bank, Islampur Road Branch, Dhaka. Thus from account section, cash section, remittance section and loan and advance section we collection other concern questions and arranged then in that questionnaire. Following this questionnaire we collected information and data from the office staff at Rupali Bank, Islampur Road Branch, Dhaka

2.7 Collection of Secondary data:

Have collected Secondary data from the official records of the bank and have also consulted some published research report, books, journals and articles to fill up the information gap.

Course Calendar-2010

CHAPTER-THREE

GENERAL BANKING

3 Introductions:

One of the objectives of our internship program was to acquaint some with the technical know how of practical banking, for this reason we were, therefore, asked to join Rupali Bank, Islampur Road Branch, as a trainee. The main function of a bank is to collect money deposit from public or institutions and to give loan among deficit units However, the bank is performed other related functions which are discussed in this chapter.

3.1Account Opening

The relationship between the banker and the customer begins with the opening of an account by the customer. Initially all the accounts are opened with a deposit money by the customer and hence these accounts are called deposit account. Usually a person needs to open an account take services form it. Without an opening an account, one can get only a few services from the bank. So the banking begins actually by opening an account with a bank. Generally, there are four types of accounts in our country’s banking system:

i. Current account or Demand Deposit(CD Account)

ii. Savings Deposit(SB Account)

iii. Fixed or Time Deposit(FDR)

i. Current Account

Current account is purely demand deposit account because the bank is bound to pay the amount to the account holder on demand at any time. It is running and active account, which may be operated upon any number of times during a working day. There is no restriction on the number and the amount of withdrawals from a current account. The special characteristics of a current account are as follows:

µ The primary objective of current is to serve big customers such as businessmen, joint stock companies, private limited companies, public limited companies etc. from the risk of handling cash by themselves.

µ The cost of providing current account facilities is considerable to the bank since they undertake to make payments and collects the bills, drafts, cheques for any number of times in a particular day. The bank therefore does not pay any interest on current deposit while on the other hand some banks charge for incidental charges on such account.

µ For opening of a current account minimum deposit of taka 1000/= is required. Introductory reference is also required for opening of such account

Opening a Current Account:

The following documentation and formalities are required for opening a current account:

Documentation of Opening a Current Account

Û For Proprietorship: Up-to-date copy of trade license, Introducer of a CD account holder, Two copies of passport size photographs of account holder, Seal, TIN, VAT certificate

Û For Partnership: up to date copy of trade License, Introducer of a CD account holder, Two copies of passport size photographs of account holder, Photocopy of partnership Deed, notarized by Notary Public, Account agreement (MF-06) and letter of partnership (MF-07), Seal, TIN, VAT certificate

Û For Private Limited Company: Up-to-date copy of trade license, Two copies of passport size photographs of account holder, Certified copy of Memorandum and Articles of Association, signed and sealed by the managing Director, Photocopy of the certified of Incorporation, List of directors as per return of joint stock company with signature ,Seal of each operating persons, Particulars of Directors, Resolution for opening account with the bank

Û For Public Limited Company: Up-to-date copy of trade license, Two copies of passport size photographs of account holder, Certified copy of Memorandum and Articles of Association, signed and sealed by the managing Director, Photocopy of the certified of Incorporation, Seal of each operating persons, Particulars of Directors, Resolution for opening account with the bank, Certificate of commencement of business, List of directors as per return of joint stock company with signature

Û For Societies, Clubs, Associations etc: Up-to-date copy of trade license, Registration from the concerned authority, By laws/ rules and regulations/ constitutions duly signed and sealed by chairman, Resolution for opening account with the bank, Introducer of a CD account holder, Seal of each operating persons.

Formalities of Opening a Current Account:

· Application on the Prescribed Form

The person willing to open a current account with the bank has to make application in the prescribed form. This form must be properly filled up and signed by the applicants.

· Introduction to the Applicant

The applicant also required to furnish in the application form the names of the referees from whom the banker may make inquiries regarding the character, integrity and respectability of the applicants. In most cases the introduction is done by the customer of the bank or some other person knows to the bank by signing on the application form with his/her account number (if any).

· Specimen signature

Every customer is required to supply to his banker with one or more specimens of his/her signature. These signatures are taken on cards, which are preserved by the banker, and his signature of the account holder on the cheques is compared with the Specimen signatures.

· Opening and operating the account

After the above formalities are over, the banker opens an account in the name of applicant. Generally the minimum amount to be deposited initially is tk. 1000/- for opening a current account. Then the bank provides the customer with:

§ A pay in slip/deposit book

With a view of facilitate the receipt of credit items paid in by a customer, the bank will provide him/her pay in slip either loose or in a book forms. The customer has to fill up the pay in slip at the time of depositing the money with the bank. The cashier with his/her initials and stamps will return the counter foil to the customer on the receipt of the money.

§ Cheque Book

To facilitate withdrawals and payments to third parties by the customer, the bank will also provide a cheque book to the customer. But it is noted that to get a cheque book, the customer has to dully fill up the cheque requisition slip to the banker.

ii. Savings account (SB)

A savings account is meant for the people of the lower and middle classes who wish to save a part of their incomes to meet their future need and intend to earn an income from their savings. It aims to encouraging savings of non trading persons, institutions, society and clubs etc. by depositing small amount of money in the bank. Both the elements of time and demand deposit are present in this account.

Opening a Saving Account

For opening a savings account following documentation and formalities are required:

Documentation’s

(a)

· Two copies of passport size photographs of account holder.

· Photograph of the nominee

· Introducer’s reference

· Employer certificate

(b)

· Two copies of passport size photographs of account holder.

· Photograph of the nominee

· Photocopy of passport ( first four pages)

· Introducer’s reference

· Employer certificate

Formalities of Opening SB

• Application on the prescribed form: The person willing to open a savings account with the bank has to make application in the prescribed form. This form must be properly filled up and signed by the applicants.
• Introduction to the Applicant: The applicant also required to furnish in the application form the names of the referees from whom the banker may make inquires regarding the character, integrity and respectability of the applicants. In most cases the customer of the bank does the introduction or some other person knows to the bank by signing on the application form with his/her account number (if any).
• Specimen signature: Every customer is required to supply to his banker with one or more specimens of his/her signature. These signatures are taken on cards, which are preserved by the banker, and his signature of the account holder on the cheques is compared with the Specimen signatures.
• Opening and operating the account: After the above formalities are over, the banker opens an account in the name of applicant. Generally the minimum amount to be deposited initially is tk. 1000/- for opening a current account. Then the bank provides the customer with:

? A pay in slip/deposit book: With a view of facilitate the receipt of credit items paid in by a customer, the bank will provide him/her pay in slip either loose or in a book forms. The customer has to fill up the pay in slip at the time of depositing the money with the bank. The cashier with his/her initials and stamps will return the counter foil to the customer on the receipt of the money.

? Cheque Book: To facilitate withdrawals and payments to third parties by the customer, the bank will also provide a cheque book to the customer. But it is noted that to get a cheque book, the customer has to dully fill up the cheque requisition slip to the bank.

iii. Fixed Deposit Receipts (FDR)

These are the deposits, which are made with the bank for fixed period specified in advance. It is purely a time deposit account. The bank doesn’t maintain cash reserves against these deposits and therefore the bank offers higher rates of interest on such deposits. At present the rate of interest for fixed deposit Receipt (FDR) in the Rupali Bank Limited are as follows:

· Various types of account holder need documents and maintain rules relating to open bank account

i) Owner of personal A/c:

If any person opens account in his own name and maintain it, he will be termed as the owner of personal A/c. He has to maintain the bank A/c. Nobody for him can maintain the A/c. The necessary documents require opening personal A/c, which is discussed above.

ii) Owner of joint A/c:

When two or more persons open an account jointly, it is called a joint A/c and such account holders are termed as joint A/c holder. While maintaining, the following rules and regulations are followed:

• The joint account holders or any one of them authorized to operate the A/c may open either a joint account.
• The joint account holders are equally liable for repayment of debt taken from the bank.
• If after the death of a owner, if at least two of them are alive, then the money is withdrawn from the A/c through cheque and new A/c is opened for the alive persons and the money is deposited to the A/c.
• According to the rules of our country is case of joint A/c by husband and wife, the husband is considered as the owner of that A/c.

iii) Joint stock company:

While opening an account in the name of a company, the banker must satisfy himself about the following:

• The name of the company, the shareholders name and addresses.
• Whether the company is registered or not.
• The following document must be collected:

q The signature of the shareholders in the application form.

q A document containing the shares of shareholders, their responsibilities and duties.

q Naming the person or persons who are authorized to operate the bank A/c on behalf of the company.

· If there is any change among the shareholders, it must be informed to the bank.

· All the shareholders are equally liable for the repayment debt taken from the bank.

iv) Public limited company:

While opening an account in the name of public limited company the banker should take the following particulars:

· The application for opening an account

· Naming the person who is authorized by the managing director or managing committee to operate the bank A/c.

· Specimen signature of the customer.

· Certified copy of constitution and memorandum of the company

· List of directors and their signature certified by chairman

· Scrutiny the financial condition, nature of business of the company

· The company is liable for the repayment of debt taken from the bank.

v) Non-trading organization:

Clubs, societies, charitable and religious institutions not engaged in trading activities can open their accounts in the bank. According to the constitution of this institution one or more employee authorized to operate the bank A/c can operate the A/c. If the institutions are not registered, bank account cannot be opened.

vi) Special types of account holder:

A contractual relationship is created between the banker and customer by opening an account. Basically a person whose age is 18 years or more can be competent to open an account with the bank. But there is some special types of account holder specified below:

· Minor: According to the law of Bangladesh, a person who has not competed 18 years of age is a minor. A minor is not capable of entering into a valid contract. A minor cannot open any account or operates it until he completes 21 years. The bank records the date of birth of the minor while opening an account. A banker should be very careful in dealing with a minor. If an overdraft or advance is granted to a minor even by mistake or unintentionally, the banker has no legal remedy to recover the amount from the minor.

· Married women: A married woman is competent to enter into a valid contract. The banker may therefore open an account in the name of a married woman. In case of a debt taken by the married woman her husband shall not be liable. But if the wife works as an agent of his husband, then the husband has to be liable for his wife’s debt. While granting loan to a married woman the banker should therefore examine her owns assets and ensures that the assets are sufficient to cover the amount of loan.

· Illiterate person: Illiterate person cannot sign their names and hence the banker takes their thumb impression as a substitute for signature and also a copy of their recent photograph. An approved witness should attest the application form and the photograph.

· Blind person: A blind person can open account and the procedure would be the same as illiterate persons. In both cases the terms and conditions of opening account should have to be read infant of them and if they agree with it only them the account can be opened.

· Deaf and Dumb: Deaf and Dumb can open account but the respective banker should have to become careful about the background and character of the person.

· Mad and Lunatic: Mad and Lunatic person cannot open a bank account.

(b) Closing of bank account:

The relationship between a banker and his customer is a contractual one and may be terminated by either of them by giving notice of his intention to the other person. The rights and obligation of a banker in this regard is as follows:

• If a customer directs the banker to close his account
• On receipt of the notice of the death of a customer
• If a banker receives a notice regarding the insanity of his customer
• On receipt of a Garnishee order from the court
• Fixed account is closed automatically after the specified date.

(c) Steps of cash management at branch level:

i) Cash Receipt:

The cash receipts procedure, as I found, is summarized below:

· Pay-in-slip or credit voucher are given to the cash counter for depositing cash.

· Cash deposit section checks the title if account, its number, amount in words and figures in the pay-in-slip or credit voucher.

· Cash receiving officer after receiving the cash giving records/denomination of the currency on the back of the voucher shall enter the particulars of the voucher in the cash receiving book under progressive serial number & puts his signature putting the date stamp both on counter foil & pay-in-slip voucher. Then he will pass it on to the officer- in-charge of cash section for his signature along with the register

· The officer will then detach pay-in-slip from the counter foil and return it to the receiving officer along with the register.

· The officer sends the pay-in-slip/ credit voucher to the deposit section in case of pay-in-slips and credit vouchers to the respective section to which it relates.

· Cahier and cash-in-charge puts signature on the book at time of closing cash.

ii) Cash Payment:

Generally cheques, D.D, T.T, M.T, pay order and cash deposit voucher etc. are received from customer and institutions. The formalities are given below:

· The instrument is checked for any discrepancy, posting and cancellation

· Specimen signature of cancellation officer should be available

· Cash is counted and the denomination of notes are written on the reverse of the instrument

· Cash is paid to the bearer of the instrument

· Particulars of the instruments are entered in paying cash book

· Paid instruments are kept with the paying officer

iii) Token issue:

Was assigned to issue token. However I issued token in the following manner:

· At the very outset, I examined the validity of the cheque. In this connection, attention was given of the cheque following points: –

q Date of issue of cheque (a cheque is valid for six months only)

q Signature of the account holder (rubbing, overwriting etc.)

q Amount of cheque (the similarities between the words and figures of the cheque)

q Signature on the reverse page

· After that the amount, token number, account number etc. were entered in the daily transaction register. Usually called day book

· Then, the token was issued to the bearer of the cheque

· Token number was thereafter taken down on the reverse page of the cheque

· After that the cheque was passed on to the other section for other necessary formalities.

It may be mentioned that I had to face acute customer rush in this branch, since this is one of the busiest branch of the town, already mentioned earlier. Everybody wanted to get the work done quickly. Anyway, I tried my best to serve the customer as promptly as possible.

iv) Posting and cancellation of cheque:

At the time of posting of cheques, the cheque is examined carefully. Attention on the following more aspects is given:

· Whether the account had desired amount of money or not.

· Prefectures of serial number of the cheques

After careful examination, the drawing amount of cheque was entered in the ledger.

For cancellation of cheques, Rupali Bank, Islampur Road Branch, Dhaka is followed the bellowed steps:

· The cancellation officer shall keep the specimen signature card under his personal custody.

· All specimen signature cards will be kept in serial order.

· In case of difference of signature, cheques shall not be passed.

· Officer shall not pass any cheque unless it is posted against the account and initialed by the ledger keeper.

· The cancellation shall be made waving a red line across the signature of the drawer of the cheque. The cancellation shall sign in full using red ink the drawer’s signature.

v) Cash Balancing:

The entire cash related employee ensures the balancing of cash on daily basis:

· All cash register written in words and signed

· Checking agreed with each other

· Preparing cash position memo

· Writing cash Balance book

· Checking all registers and signing

· Ensuring that Finance & Banking balance is correct.

· Preparing cash cum daybook

vi) Checking cash in hand:

Cash should be checked as per cash balance books.

· Counting the loose cash entirely also coin

· Petty cash

· Prize bond stick

· Late paid cash/Scrutiny instrument

· Surplus cash if any pass voucher

vii) Cash safe keeping:

All the custodians of cash must ensure overnight safe keeping of cash at branch level. Counted cash to kept under following precaution:

· Iron safe condition

· Strong room as per specification

· Lodgment of keys

· Maintain safe limit

· Excess over limit disposal

viii) Cash Remittance:

Only cash feeding branch is entitled to carry the cash for remittance purpose. Precautions are as follows:

· Cash carrying team with armed guards

· Transport mode, Conventional / non-Conventional

· Cash transit limit

· Cash movement register

d) How to withdraw money from bank:

The bank provides its customer mainly current and savings A/c holder with a chequebook, which is used as an instrument to withdraw money from the bank. The account holder has to mention his name, amount of withdrawal, A/c number and his signature. He has to give his signature on the other side of cheque. After filling the cheque and put it to concern counter, responsible employee gives a token to the depositor. Then the cheque is sent to the computer section to check whether there is available deposit in the depositor’s A/c. If there is available money, the cheque is sent to the cash officer, the cash officer compared the signature with the specimen signature. If there is no difference, then it is signed by the cash officer and sends it to the cash counter. If there is any difference in signature, the depositor has to resign it. When it is sent to the cash counter the A/c holder collect the cash returns the token.

e) Cheque honored by a banker:

When a cheque is submitted to the counter, the cashier issues a token against it. He also examines the date, amount and the name of the branch written in a cheque while taking it. He writes the token number on the opposite side of the cheque and sends it to the computer section.

After checking it by the computer, it is found that there is available money to the customer A/c. The cashier sends it to the cash officer. The cash officer examines the specimen signature. If there is no difference in it then he signs the cheque, drawing a line from one end to other on the cheque. It is termed as honor of a cheque.

f) Cheque dishonored by a banker:

If a cheque is dishonored the banker return it to the depositor. The statutory duty of a bank is to honor his customer’s but it is dishonored in the following circumstances:

· If the amount mentioned in the cheque is greater than that of deposit.

· If the cheque is past dated or a stole cheque.

· If the cheque contains an apparent material alteration, which is not properly mentioned by the drawer.

· If the signature of the drawer is a forged one or does not tally with his specimen signature.

· On receipts of reliable information about the death of the customer.

· If a debtor commits an act of insolvency as defined in the insolvency law.

· If the cheque is not submitted during the banking hour.

· If the banker comes to know about the defective title of the party.

3.3 Collection of Deposit Section:

Rupali Bank, Islampur Road Branch, Dhaka collects deposits from surplus unit in the following forms:

a) Time Deposits:

· Fixed Deposits (FD)

· Short Term Deposits (STD)

· Deposit Pension Scheme (DPS)

· Rupali Bank Special Deposit & Pension Scheme (SDPS)

· Savings Deposits (SD)

b) Demand Deposit

· Current Deposits

· Call Deposits

· Sundry Deposit

Sundry Deposits

· Margin on Letters of Credit

· Margin on Letters of Guarantee

· Employees Contributory Provident Fund

· Employees General Provident Fund

· Rupali Bank Employees Pension Fund

· Rupali Bank Employees Pension and Death Cum-Retirement Benefit Fund.

3.4 Loan and Advance Section:

The main function of bank is to collect money from public or institution and to give loan to them. Lending of money in productive purpose by the bank is called loan, which is acceptable for the country. It duration is longer than that of advance. There are five vital types of loan and advance such as:

a) General Advance

b) Industrial credit

c) Rural credit

d) International trade finance and

e) Bill purchase & discount.

Those are discussed below in detail:

a) General Advance:

The credit, which is given by the bank, in general except agriculture, industry and international trade, is called General Advance.

Different types of general advance are as follows:

i) Cash credit: It is a continuous and general trading loan whose minimum amount is 1 Lac. There are two types of cash credit namely:

· Cash credit-hypothecation

· Cash credit-pledge

But cash credit hypothecation has been continued. Its rate of interest is 15%. If it is for working capital purpose, its interest rate is 14%.

ii) Consumer credit (Demand loan): It has been introduced in 2001 in this branch. Bank gives this loan for buying consumer goods like TV, Freeze etc.

iii) Over draft: In case of advances sanctioned by way of our draft the customer sanctioned a limit up to which be can overdraw his

Current account within a stipulated period. This is a fluctuating account where the balance sometimes may be debit and sometimes may be credit. Overdraft is fully secured such as:

· Overdraft against FDR

· Loan against DPS and SDPS

· Loan against saving certificate

· Loan against life insurance policy

· Loan against stocks of public ltd. company in accordance with rule and regulation of Bangladesh Bank

iv) Small Loan: This loan is given to cottage industry, small trader, small-scale industries and other self-employed persons. Limit of this loan is from Tk. 1000 to 100000. To give this loan bank collects necessary information about the loan holder and about the nature of the business.

v) House building loan (General): Bank gives this loan in general. Any people who fulfill the terms and conditions house-building loan can get this type of loan.

vi) House building loan (Staff): Staff of Rupali Bank can get this loan, which is a good opportunity of the employees of Rupali Bank.

b) Industrial credit:

It is a long-term loan, which is supplied by the bank to industrial customers. There are some special named industrial credits such as:

· Loan under Rupali Bank industrial credit scheme (project)

· Loan under external credit program

· Working capital to industries- Hypothecation and

· Working capital to industries-Pledge.

c) Rural credit:

This type of loan is lent to the rural production based sector. These are some important rural credit namely:

· Loan under Rupali Bank agro-based industrial credit scheme

· Working capital to agro-based industries hypothecation

· Working capital to agro-based industries-pledge

· Agricultural credit

d) International trade finance:

This loan is given to finance the international trade. International traders suffer from lack of money. To solve this problem Rupali Bank has introduced this kind of credit. Some important Inter