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General Banking Business Of Prime Bank Limited

EXECUTIVE SUMMARY

Prime Bank Ltd. was created and commencement of business started on 17^th April 1995. As a fully licensed commercial Bank, Prime Bank Limited is being managed by a highly professional and dedicated team with long experience in banking. The Bank has been graded as a top class Bank in the country through internationally accepted CAMEL rating. Prime Bank Limited offers all kinds of Commercial, Corporate and Personal Banking services covering all segments of society within the framework of Banking Company Act and rules and regulations laid down by Bangladesh Bank.

The aim of the Bank is to participate actively in the socioeconomic development of the nation by operating a commercially sound banking system. To accept deposit from the customer and to lend the deposit again to customer is the Prime business of Prime Bank.

Banking system occupies an important place in a nation’s economy. A banking institution is indispensable in a modern society. Bangladesh banking sector is lagging for behind in adopting these changes. It is governed by the rules and regulation of Central Bank of the country i.e. Bangladesh Bank and Security and Exchange Commission. The bank companies are forced to comply the best accounting practices. Every bank of our country has a division named Financial Administration Division (FAD) which takes care of the accounting issues of the Bank. Among the accounting based FAD personnel who know the banking operation better can contribute more in the banks.

The bank has been graded as a top class bank in the country through internationally accepted CAMEL Rating. Prime Bank Limited offers all kinds of commercial, corporate and personal banking services covering all segments of society within the framework of banking rules and regulations laid down by the Central Bank. Diversification of products and services include corporate banking, retail banking and consumer banking right from industry to agriculture, real state, software and other sectors.

V

Banks have a key role to develop the General Banking business in our country. Commercial banks provide General Banking services to their customers. Though General Banking business is challenging, it offers an excellent opportunity to accelerate the growth of the bank’s own business. Prime Bank Ltd. is one of the major players in the General Banking business. It has been enjoying an escalating growth in General Banking business. Income from the General Banking business has a large contribution to PBL’s overall profit. Thus General Banking business has become one of the major sources of revenue for the bank.

Deposit Schemes Section is the most influencing factor of General Banking income. General Banking income also enjoys an increasing trend and this is a positive sign for PBL. The General Banking services provided by the bank are really good. The customers of the bank are satisfied. General Banking is always a prominent site of business for all commercial banks. Bangladesh is also economically dependent on General Banking business. Currently 52 Banks are operating in Bangladesh. One the other hand, Bank innovate new products and services to attract their desired customers. Prime Bank also has different types of Credit Program. The management at the Prime Bank Mohakhali Branch also decided to furnish the Consumer Credit with necessary instruments. Prime Bank Ltd. is one of the most potential Banks in the banking sector. Human resources, in the branch, need to be equipped with adequate banking knowledge. Majority of the human resources must be having basic knowledge regarding money, banking, finance and accounting. Bank can arrange training program on these subjects.

There are computers almost in every branch in the Prime Bank, but it does not mean that the bank is maintaining a network among them. Moreover by adopting this system the bank can join the modern banking along with e-commerce concept. The main problem is that the foreign banks and other private commercial banks have started providing these facilities. Bank has many attractive deposit schemes.

1.1 OBJECTIVES OF THE REPORT

The objectives of the study are as follows:

• To identify different General Banking available in Prime Bank Limited.
• To know about the Accounting Opening functions of General Banking.
• To know about the Local Remittance Section of general banking.
• To know about the Deposit Schemes Section of general banking.
• To know about the Clearing Section of General Banking.
• To know about the Cash Section of General Banking.

1.3 SCOPE OF THE REPORT

This report will cover the details of Prime Bank’s practices about various General Banking. Now days General Banking is very much important for fixed income people. In this report, will try to focus on the various GB schemes, its functions, its history, using business correspondence analysis of this sector as well as its role in our economy. It will also cover the GB procedures and performance of Prime Bank Ltd. Finally it will incorporate an evaluation of the various GB in comparison to other competitor private banks and recommends some measures to strengthen more its General Banking.

1.4 METHODOLOGY OF THE REPORT

1.4.1 Research Design

Exploratory research has been conducted for gathering better information that will give a better understanding on various General Banking. Both primary and secondary sources of data collection procedure have been used in the report. Primary data has been collected mainly through the writer’s observation of the approval process and monitoring techniques, informal interviews of executives, officers and employees of Prime Bank Limited.

1.4.2 Sources of Data Collection

To make the Report more meaningful and presentable, two sources of data and information have been used widely.

Source of Data

Figure 1.1: Sources of data

Both primary and secondary data sources were used to generate the report.

The “Primary sources” are as follows-

• Face-to-face conversation with the respective officers and staffs of Prime Bank.
• Informal conversation with the clients.
• Practical work exposures from the different desks of the departments of the Branch.
• Study of the relevant files as instructed as instructed by the officers concerned.

The “Secondary Sources” of data and information are-

• Annual reports of PBL and other Banks.
• Training materials available at the Internet.

1.4.3 Data analysis

The report will be aimed at depicting the various consumer credit schemes of Prime Bank Limited. The data gathered from both primary and secondary sources has been arranged orderly to get a clear picture of the bank’s various consumer credit schemes and the other banks. The study will include both qualitative and quantitative analysis of consumer credit procedures and monitoring tools. Based on the observational information shall also try to evaluate and analyze the problems involved in consumer credit schemes.

1.4 Statement of the Area of Study:

Banking system occupies an important place in a nation’s economy. A banking institution is indispensable in a modern society. It plays a pivotal role in the economic development of a country and forms the core of the money market in an advanced country. In recent times the banking sector over the world has been undergoing a lot of changes due to deregulation, technological innovation, globalization etc. Bangladesh banking sector is lagging for behind in adopting these changes. To thrive well in this changing environment, not only development of appropriate infrastructure is necessary but also infusion of professionalism in to banking service is essential. The Banking sector is one of the highly regulated sectors in our country. It is governed by the rules and regulation of Central Bank of the country i.e. Bangladesh Bank and Security and Exchange Commission. The bank companies are forced to comply the best accounting practices. It strictly follows International Accounting Standard (IAS) norms. It publishes the financial statement every year getting it duly audited by recognized audit firms. Every bank of our country has a division named Financial Administration Division (FAD) which takes care of the accounting issues of the Bank. Most of the personnel who lead these divisions are of accounting background. Among the accounting based FAD personnel who know the banking operation better can contribute more in the banks.

Career in Banking has become very lucrative over the last few years considering the work environment and remuneration package. As a student of Management, cherish to be a banker and that is why had chosen a banking organization for my internship. The chose Prime Bank Limited because it has a good reputation in the banking community.

The internship program has helped a lot to know many banking operations practically which could not be learnt by reading books only. The believe, it will help become a banker and work either in the Financial Administration Division or any other department of a Bank.

1.6 Authorization of the study:

Banking system occupies an important place in a nation’s economy. A banking institution is indispensable in a modern society. It plays a pivotal role in the economic development of a country and forms the core of the money market in an advanced country. In recent times the banking sector over the world has been undergoing a lot of changes due to deregulation, technological innovation, globalization etc. Bangladesh banking sector is lagging for behind in adopting these changes. The course under B.B.A program designed with an excellent combination of theoretical and practical aspects. The whole course is divided in to eight (11^th) semester of 4 month each. After the completion of 11^th semester consisting of theoretical espouser, the students are sent to different organization to obtain some practical espouser in different sectors which would help them in taking up more professional courses in M.B.A. As a student of B.B.A, I have assigned to Mouchak branch, Prime Bank Ltd. for my practical orientation.

As program director directed us to present the report in different way that will be based on the personal observations for one department, for that reasons have chosen General Baking division for my report because have gathered much knowledge from that department. I have described this department by following way:

(1) Understanding:

In this part have tried to make acquainted with the department of this branch.

(2) Things are done here

In this part I have tried to see the things which are being done in department of the branch.

(3) Personal observations:

In this part have tried to present personal observations from GB department of this branch. had an opportunity to be acquainted with the practical banking prevail in Motijheel Branch, PBL. The knowledge, which has been acquired in my practical orientation Period, have tried level best to show in this report.

1.7 Coverage of the study:

In this report, Two major areas in commercial banks have been covered which are:

(a) General Banking section.

– Consumer Deposit scheme

1.8 LIMITATIONS OF THE STUDY

Since the report is concerned with the comparison of General Banking & Foreign Exchange of Prime Bank Limited with other private banks, different private commercial bands, such as, South East Bank Limited, Dhaka Bank Limited, Eastern Bank Limited, HSBC, and Bank Asia Ltd are mainly taken into account. A lot of information could not obtain because the banks were not interested to disclose their information, policy, and data to maintain their secrecy. had to depend on the websites of the respective banks for much information.

There are certain limitations regarding the studies that are summarized below:

• Deficiencies in data required for the study.
• Field practice varies with the standard practice that also created problem.
• Time provided for conducting the study is another important constraint.
• The employees in Prime Bank Limited are so much busy in their responsible fields; they could hardly provide little time to discuss with them.
• Management Information Systems is a very wide spectrum. However the branch does not even have a separate MIS division. could not therefore focus on MIS practices on local banks, as there is not much to deal with.

1.9 Work schedule

Department Rotation:

Table: Work Schedule

Source: Suggested by Branch Manager, PBL, Mouchak Branch

2.1 INCORPORATION OF THE ORGANIZATION

In the backdrop of economic liberalization and financial sector reforms, a group of highly successful local entrepreneurs conceived an idea of floating a commercial bank with a different outlook. For them it was competence, excellence and consistent delivery of reliable service with superior value products. Accordingly, Prime Bank Limited was created and commencement of business started on 17^th April 1995.

Prime Bank Ltd. is operating as a scheduled bank under the banking license issued by Bangladesh Bank, the Central Bank of the country on April 17, 1995 through the opening of its Motijheel Branch at Adamjee Court Annex Building, Motijheel commercial area, Dhaka-1000. PBL was actually registered under the Companies Act of 1913 with its registered office at 5, Rajuk Avenue, Motijheel commercial area, Dhaka-1000 which was later shifted to Adamjee Court Annex Building, 119-120, Motijheel commercial area, Dhaka-1000.

As a fully licensed commercial bank, Prime Bank Limited has being managed by highly professional and dedicated team with long experience in banking. They constantly focus on understanding and anticipating customer needs. As the banking scenario undergoes changes so does the bank and it adjusts and repositions itself to the changed conditions.

In its 10^th year of operation in 2005, Prime Bank has made substantial headway in terms of business growth, profitability and establishing its image as one of the leading private commercial banks. Its march towards reaching greater heights in operation continues with full vigor and enthusiasm. Prime Bank has made significant progress within a very short period of its existence. The bank has been graded as a top class bank in the country through internationally accepted CAMEL Rating. The bank has already occupied an enviable position among its competitors after achieving success in all areas of business operations.

Prime Bank Limited offers all kinds of commercial, corporate and personal banking services covering all segments of society within the framework of banking rules and regulations laid down by the Central Bank. Diversification of products and services include corporate banking, retail banking and consumer banking right from industry to agriculture, real state, software and other sectors.

Prime Bank Limited is a fast growing private bank and it is already at the top slot in terms of quality service to the customers and value addition for the shareholders. In the last few years Prime Bank made satisfactory progress in all areas of business operation. The bank managed to further expand and consolidate its customer base in both of its core businesses and retail banking.

Prime Bank Limited is one of the strong capital based banks in the country with capital adequacy ratio of 10.74% as on December 2004, which is well above the stipulated requirement of 8%. The authorized capital of the bank is Tk. 4000.00 million and paid up capital stood at Tk. 1000.00 million as on 31^st December 2004. On this date the reserve fund of the bank stood at Tk. 986.51 million while the equity fund was Tk.2239.8 million. The total asset of the company was Tk. 32361.62 million in 2004. The sources of fund of Prime Bank Limited are paid up capital (3%), reserves and surpluses (5%), deposits (81%) and other Liabilities (12%). The use funds is concentrated as loans and advances (63%), investments (10%), fixed assets (1%, liquid assets (21%) and other assets (5%).

Prime Bank has been very selective in locating branches so that customers are better served. The bank’s currently has a network of 36 branches allover Bangladesh and a booth located at Dhaka Club, Dhaka. The bank also plans to add a few branches to its network that will give the bank strategic advantage in terms of operation and business potential. Prime Bank’s aim is to be the leading bank in the country’s principal markets. The bank by concentrating on the activities in its area of specialization has achieved good market reputation with efficient customer service. Prime Bank consolidated its position and retained its product line and financial services aimed at various target groups. In a challenging market conditions, this bank continued to provide more innovative products and better services to retain and expand its market share. The bank is committed towards providing continuous training to its staff to keep them up to date with modern practices in their respective fields of work. This bank also tries to fulfill its share of community responsibilities. By such measures the bank intends to grow and increase shareholder’s earning per share.

2.2 COMMENCEMENT OF OPERATION

Prime Bank Ltd. started its operation on 17^th April 1995 with an authorized capital of Tk. 1000 million and paid up capital of Tk. 100 million by a group of highly successful entrepreneurs who are established in various fields of economic and business activities. PBL is a fully licensed scheduled commercial bank set up in private sector in pursuance of the Government of Bangladesh to liberalize banking and financial services.

Till now, the branch network of Prime Bank Ltd. increased to 42 with 5 new branches in the last of the year 2005. Currently, there is no proposed branch. The commercial and investment services of PBL range from small enterprises to big business loans to all type of customers. Besides this, the bank actively participates in socio-economic development of priority sectors like agriculture, industry, housing, self-employment, etc. PBL is also a pioneer in providing consumer loans as well as financing the industries and transport sector through attractive leasing and higher purchase scheme.

2.3 VISION OF PRIME BANK LTD.

To be the best Private Commercial Bank in Bangladesh in terms of efficiency, capital adequacy, asset quality, sound management, and profitability having strong liquidity.

2.4 MISSION OF PRIME BANK LTD.

To build Prime Bank Limited into an efficient. Market driven, customer focused institution with good corporate governance structure. Continuous improvement in Bank’s business policies, procedures and through integration of technology at all levels..

2.5 OBJECTIVE OF PRIME BANK LIMITED

Prime Bank aims to continuously update and develop its product line and range of services to cater to the needs of retail and corporate customers. To achieve this goal, efforts have been directed in three main areas:

· Design and introduction of new products and services

· Shaping and developing the system to face new challenges and emerging need of the market

· Full implementation and utilization of the Bank’s excellence program which aims to provide service to customers.

While strengthening risk management and improving asset quality is the main focus of the bank, it is also aware of its responsibility to the society. With this noble intention, Prime Bank Foundation was established in 2001, which took part in diverse charitable and voluntary programs to alleviate poverty and community welfare.

2.6 WALKWAY OF PRIME BANK LTD.

1995: Created and commenced its operation on 17^th April 1995. Renowned banker Mr. Luthfur Rahman Sharker was the first Managing Director of this Bank.

1996: Incorporated in Dhaka Stock Exchange. On 21st November Mr. Sharker resigned.

1997: On 8^th April Mr. Kazi Abdul Mazid took over the leadership of the bank as a Managing Director. No of branches of the bank reached at 16^th covering all divisional city of Bangladesh. Paid up capital reached from TK. 100 to 200 million. One Islamic Banking branch started its operation at Motijheel.

1998: No of branches reached at 18 including two Islamic banking branches.

1999: Mr. Naser Bukhtear Ahmed joined as a deputy Managing Director with lot of experience and foreign banking exposure. No of branches reached at 20. Online banking and credit card facilities were started.

2000: No.1 bank in CAMEL rating announced by Bangladesh Bank in Bangladesh.

Mr. M. Shajahan Bhuian joined as a Senior Executive Vice President came from

United Commercial Bank Limited.

2001: Number of branches reaches at 26. Mr. Kazi Abdul Mazid resigned from the Bank and Mr. Naser Bukhtear Ahmed took over the charge as a Managing Director. Mr. M. Shajahan Bhuian was the Deputy Managing Director. Also the no.1 bank in terms of the CAMEL Rating announced by Bangladesh Bank in Bangladesh.

2002: Mr. Shah Md. Nurul Alam joined as a Managing Director from Southeast Bank Limited after Mr. Bukhtear resigned. Still it the number one bank in terms of CAMEL Rating. Number of branches reached at 27 including three Islamic banking branches.

2005: The number of Prime Bank branches reaches 36, and of it 5 branches are designated Islamic branches complying with the rules of Islamic Shariah the modus operandi of which is substantially different from other branches run on commercial conventional basis.

2.7 PRIME BANK’S ORGANIZATIONAL STRUCTURE

Prime Bank is listed with promoter shareholders’ collectively holding a 46% stake in the bank. One of the main reasons for the bank’s good financial condition is that the bank’s promoters, who have other business interests as well, have refrained from using the bank for insider lending. This is a huge issue for Bangladeshi private banks and together with somewhat lax supervision, is the single biggest factor for the poor financial condition of most private banks. While Prime Bank has so far benefited from its promoter shareholders’ approach of maintaining an arms-length relationship between the bank and their other businesses, whether this would continue to be the case in future, particularly when the second-generation promoters become directors of the bank remains to be seen.

The bank had a rather large board (20 members in all) with representatives from all the major shareholders. Previously central bank norms prevented any one shareholder individually holding an equity stake of greater than 5% in the bank, this was the reason for the 20 directors sitting in the board. The central bank rules in this regard have undergone a slight change. Now the rules are that the individual holding has been enhanced to 10% and the size of the Board will now be restricted to 13 members, which should include at least two independent directors.

The bank’s board has a policy of rotating the Chairman’s position amongst various members; consequently the bank has a new Chairman every year. The executive management also appears a bit top-heavy (relative to the size of the bank) with one additional managing director besides the managing director, a Senior Executive Vice President, four Executive Vice Presidents and many Senior Vice Presidents. Prima-facie the rotating Chairman and the presence of effectively two managing directors may lead to some overlapping responsibilities and possible conflict; however this does not seem to have happened so far in the bank’s history and the bank continues to perform satisfactorily.

2.7.1 Organizational Structure:

Designation in ascending order

2.7.2 Hierarchy of Prime Bank

Chairman

Board of Directors

Executive Committee

Managing Director

Additional Managing Director

Deputy Managing Director

Senior Executive Vice President

Executive Vice President

Senior Vice President

Vice President

Senior Assistant Vice President

Assistant Vice President

First Assistant Vice President

Senior Executive Officer

Executive Officer

Principal Officer

Senior Officer

Management Trainee Officer

Junior Officer

2.8 OWN VIEW ABOUT PRIME BANK LIMITED

Prime Bank Ltd. Mouchak branch is the largest and most profit-earning branch.. In the 1^st floor there is General Banking Division.. The working environment is very good here. Employees can work in a very calm but important area considering its location. The branch has some big clients who are continuously giving earning to the branch. Among them there are Square Toiletries, Saudi Bangla Fish Feed, Index Agro, Computer Valley, , Dhaka Ice Cream,. Ltd, Standard Group, AK Traders, Pacific Motors, TSCO Power, TM International, Kamal Textile Miles, Moon Rady wears

etc. The performance of the branch is very successful. Last fiscal year the branch was well ahead of its target in terms of profit, deposit and loan.

2.9 FINANCIAL PERFORMANCE

Table 2.1: Financial performance

(Taka in million)

Source: Prime Bank Annual Report-2004

2.10 FUNCTIONAL STRUCTURE

2.10.1 GENERAL SERVICE DIVISION (GSD)

The functions of GSD are classified as Establishment and General Banking (GB).

(a) Establishment

The main function of GSD is to procure and supply the tangible goods to branches of PBL. Those are:

• Tangible functions of opening a branch, for example, interior decoration, making lease agreement
• Print all security papers and bank stationeries, forms, registers and distribute them to the branches
• Purchase and distribution of bank’s furniture and fixtures
• Find out the demand of equipment from the branches and divisions and arrange the purchase and delivery of them to the branches concerned
• Install and maintain different facilities in different branches.

(b) General Banking

General department performs the majority functions of a bank. It is the core department of any bank. The activities of GB of PBL are mainly divided into the following categories:

• Account opening section
• Local remittance section
• Online branch banking section
• Deposit scheme section
• Clearing section
• Collection section
• Cash section
• Accounts section

2.10.2 HEAD OFFICE ACCOUNTS

Its deals with the Head Office transactions with banks and its different branches and these are recorded under the following headings:

• Income and expenditure positioning: It maintains all the income and expenditure information
• Cash section: It handles cash expenditure for office operations and payments.
• Bills section: It deals with inland bill transactions.
• Salary and wages section: Salary and wages of head office executives are given from this account.
• Provident fund: Employee provident fund are maintained here.

2.10.3 CONSOLIDATION OF BRANCH ACCOUNTS

All branches of PBL have to periodically send their income and expenditure, profit and loss accounts to head office. This division consolidates all these information and makes statements to submit to Bangladesh Bank.

2.10.4 CREDIT DIVISION

The main functions of this division are:

• To Manage PBL’s credit portfolio
• Receive credit proposal from branches
• Appraise and approve the proposals
• Sanction letters and send them to branches
• Monitor and follow up the loans and advances provided by the bank
• Set up prices for credits and ensure their effectiveness
• Prepare various statements to submit to Bangladesh Bank

2.10.5 INTERNATIONAL DIVISION

This division is responsible for monitoring and supervising the foreign exchange dealings of the bank. It performs the following functions:

• Making guidelines and frameworks for foreign dealings complying the rules of Bangladesh Bank
• Circulating instructions of Bangladesh Bank
• Maintaining correspondence with foreign banks and exchange houses with which it has exchange arrangement
• Maintaining NOSTRO accounts with banks in abroad
• Fixing and sending foreign exchange rates to Authorized Dealer (AD) branches and Bangladesh Bank.

2.10.6 TREASURY

Treasury is considered to be an important division for income generation purpose within the head office. The treasury of PBL continues to efficiently manage bank’s cash flow. It optimizes the investment of the bank’s excess liquidity. Treasury is also expected to provide quality services and products to meet the demand of the customer needs and play a major role in raising bank’s income.

2.10.7 COMPUTER DIVISION

This division operates and keeps the record of all transactions, assets, liabilities of PBL by using integrated software. Though the technology of PBL is not advanced, the computer division tries to provide the following functions:

• Supply and installation of computer as per requirement
• Design software to support accounts operation
• Train the officers and employees about the operation of different software
• Updating the software if there is any lagging in its operation.

2.10.8 MARKETING DIVISION

There are two types of Marketing division. These are:

Asset Marketing: It refers to various kinds of loan and advances. This division maintains communication with corporate clients, gives incentive to take loan from PBL and approaches them to borrow from PBL in profitable projects

Liability Marketing: This refers to marketing for collecting funds through buying of depository products from large depositors. The division communicates to the persons or organization having excess fund of deposit, informs them about the attractive features of the depository products and convince them to invest in PBL in various deposit scheme.

2.10.9 HR DIVISION

The Human Resource Division performs the activities related to administration and personnel. The main functions of HRD are:

• Selection and recruitment of new personnel
• Appropriate placement of human resources
• Maintain the detail about transfer, promotion and leave of personnel
• Training and development of human resource
• Keeping employee records and personal file
• Taking disciplinary action if necessary

2.10.10 CREDIT CARD DIVISION

In 1999, PBL obtained the membership of Master Card and a separate division has been assigned to look after the credit card operation. There are four types of credit card, Local Silver Credit Card, International Silver Credit Card, Local Gold Credit Card, International Gold Credit Card.

2.10.11 RESEARCH AND DEVELOPMENT

This division is maintained to do the research and development work to innovate new products and services as well as to improve existing products and services.

2.10.12 COMMITTEES AND GROUP DIVISION

Prime Bank Ltd. has both democratic and consultative decision making process. The subordinates are given chance to participate in the goal and objective setting of the bank. In this regard, there are three committees functioning in the bank. These are:

Policy Committee: In this case, the committee members are drawn from the Board of Directors. The committee reviews the principles, policies, rules and gives a decision which later requires the approval of the Board.

Executive Committee: This committee consists of the members of the Board. To approve the matters beyond the delegation of the board, this committee exercises the power delegated by the Board from time to time

Management Committee: This committee consists of the Managing Directors and Head Office Executives. They discuss about the progress and improvement on the guidelines regarding deposit, loans, gives different ideas, decision regarding various issues.

2.11 SOWT ANALYSIS

From practical observation to get the following Strength opportunity, weakness and threat (SOWT).

Strength:

It has well reputation in the market

Not engaged in unfair business practice.

Concentrated market.

Officers are highly educated.

Executives are highly qualified and experienced.

Bank has many attractive deposit schemes.

Well-furnished and Air-conditioned Bank.

Efficient management practice in the Bank.

Weakness:

Deposit is lower than advance.

Short time experience of the Bank.

Officer has limited experience and not enough trained.

Long-term credit is not sufficient.

Small market shares in Banking-business.

Opportunities:

Can increase the credit scheme.

Can increase the advertising of the Bank.

Private Banks becomes more reliable to local public.

Govt. has banned some ‘Jatiya Sanchaya patra’.

Threat:

There are many competitors in the market.

Competitors have more deposit.

Ruling Government is not conducive in the viewpoint of the Bank.

Govt. imposes tax and VAT on profile.

Govt. pressures to reduce interest rate

General Banking

At first have been placed in the General Banking Department. General Banking department performs the majority functions of a bank. It is the core department.

In fact, bank operates with the people’s money. And this process starts with the General Banking department. The activities of the General Banking Department of PBL is mainly divided into the following categories:

• Account Opening Section,
• Local Remittance Section,
• Online Branch Banking Section,
• One Stop Utility Services Section,
• Deposit Schemes Section,
• Clearing Section,
• Collection Section,
• Cash Section,
• Accounts Section,

3.1 Account Opening Section:

To establish a Banker and customer relationship Account opening is the first step. Opening of an account binds the Banker and customer into contractual relationship. But selection of customer for opening an account is very crucial for a Bank. Indeed, fraud and forgery of all kinds start by opening account. So, the Bank takes extremely cautious measure in its selection of customers.

3.1.1 Types of Account:

Mouchak Branch has the following types of accounts:

L Current Account

L Savings Account

L Fixed Deposit Account

3.12Procedure to open an Account:

(1) For opening an account, at first the prospective account holder will apply for opening an account by filling up account opening form. Account opening form consists of the name of the branch, type of account, name of the applicant(s), present address, permanent address, passport number (if any), date of birth, nationality, occupation, nominee(s), special instruction (if any), initial deposit, specimen signature(s) of the applicant(s), introducer’s information etc.

(2) The prospective customer should be properly introduced by the followings:

i. An existing customer of the bank.

ii. Officials of the bank not below the rank of Assistant Officer.

iii. A respectable person of the locality who is well known to the

manager or authorized officer.

(3) Two copies of passport size photograph duly attested by the introducer.

(4) Signature of the prospective account holder in the account opening form and on the specimen signature card duly attested by the introducer.

(5) Then the concerned authority will allocate a number for the new account.

(6) The customer than deposit the “initial deposit” by filling up a deposit slips. Initial deposit to open a current account in PBL is Tk. 10000.00 and saving account is Tk. 5000.00.

After depositing the initial deposit, the account is considered to be opened. PBL maintains all of its accounts in computer. After depositing the initial deposit, PBL records it in the computer by giving new account number. Then it issues chequebook requisition slip by the customer. Then it distributes all relevant papers to respective department.

3.1.3Activities & papers necessary for opening an account:

(A) Joint Account:

If the account is a joint account, then the joint account holder should submit a declaration and operational instructions of the account along with their signature. The declaration is

“Any balance to the credit of the account is and shall be owned by us as joint depositors. Any liability whatsoever incurred in respect of this account shall be joint and several.”

(B) Partnership firm:

The following documents have to be submitted for preparing an account of a partnership firm:

i) Partnership deed.

ii) (a) If the partnership firm is a registered one, then one copy of registration forms.

(b) If not, then a copy of certificate from the notary public.

(C) Limited Company:

For the opening of an account of a limited company, following documents have to be submitted:

L A copy of resolution of the company that the company decided to open an account in the Prime Bank.

L Certified true copy of the Memorandum & Articles of Association of the Company.

L Certificate of Incorporation of the company for inspection and return along with a duly certified Photocopy for Bank’s records.

L Certificate from the Registrar of Joint Stock Companies that the company is entitled to commence business (in case of Public Ltd. Co. for inspection and return) along with a duly certified Photocopy for Bank’s records.

L Latest copy of balance sheet.

L Extract of Resolution of the Board/General Meeting of the company for opening the account and authorization for its operation duly certified by the Chairman/Managing Director of the company.

L List of Directors with address (a latest certified copy of Form-XII).

(D) Club/Society:

Following documents have to be obtained in case of the account of the club or society:

i) Up to date list of office bearers.

ii) Certified copy of Resolution for opening and operation of account.

iii) Certified copy of Bye-Law and Regulations/Constitution.

iv) Copy of Government Approval (if registered).

(E) Cooperative Society:

Following documents have to be obtained in case of the account of Cooperative Society:

i) Copy of Bye-Law duly certified by the Co-operative Officer.

ii) Up to date list of office bearers.

iii) Resolution of the Executive Committee as regard of the account.

iv) Certified copy of Certificate of Registration issued by the registrar, Co-operative societies.

(F) Non-Govt. College / School / Madrasha / Muktab:

Following documents have to be obtained in case of the account of non-govt. College / school / madrasha / muktab:

i) Up to date list of Governing Body/Managing Committee.

ii) Copy of Resolution of the Governing Body/Managing Committee authorising opening and operation of the account duly certified by Gazetted Officer.

(G) Trustee Board:

Following documents have to be obtained in case of the account of trustee board:

i) Prior approval of the Head Office of PBL.

ii) Certified copy of Deed of Trust, up to date list of members of the Trustee Board and certified copy of the Resolution of Trustee Board to open and operate the account.

(H) Minor’s Account:

Following documents have to be obtained in case of the account of minor:

i) Putting the word “MINOR” after the title of the account.

ii) Recording of the special instruction of operation of the account.

iii) The AOF is to be filled in and signed by either the parents or the legal guardian appointed by the court of law and not by the minor.

3.2Local Remittance Section:

Local remittance is one of the main components of general banking. The activities of local remittance are —

i. Telegraphic Transfer,

ii. Demand Draft issue,

iii. Saving Certificate Issue (Sanchaypatra issue),

iv. Pay order.

· Telegraphic Transfer:

It is an order from the issuing branch to the drawee bank / branch for payment of a certain sum of money to the beneficiary. The payment instruction is sent by telex and funds are paid to the beneficiary through his account maintained with the drawee branch or through a pay order if no account is maintained with the drawee branch.

Procedure of issuing TT:

Following procedures are followed while issuing of TT:

i) The applicant fills up the relevant parts of the prescribed application form in triplicate, duly signed the same and gives it to the GB.

ii) GB will fill up the commission part for bank’s use and request the applicant to deposit necessary cash or cheque at the cash booth.

iii) The first copy of the application form will be treated as Debit Ticket while the second copy will be treated as Credit Ticket. The third copy will be handed over to the applicant as customer’s copy.

iv) GB will prepare telex in appropriate form, sign it and send it to