General Banking and Foreign Exchange Process of The City Bank Ltd
1.1 Introduction
As a strongest Bank, The City Bank Ltd is doing potential accomplishment in our country where more than thousand employees working whole around the Bangladesh.
We have divided my objectives in on 3(three) major parts.
Ø General Banking of the City Bank Limited.
Ø Foreign exchange mechanism of the City Bank Ltd.
Ø To describe the customer service process of The City Bank Limited.
History of the Bank
2.1 History of the City Bank LTD
The city bank ltd. was incorporated as a public limited company with limited liability on the 14th march 1983 (formal inauguration march 27,1983) under companies act 1913 in Bangladesh with the primary objective to carry on all kinds of banking business. The bank is listed with Dhaka Stock Exchange and Chittagong Stock Exchange Limited. Functioning as a conventional bank in the country since 1983, it has been able to consolidate its position in the banking sector. The bank has been able to establish a solid presence with the customers and general public, through its improved services, value addition in the economy and increasing shareholders value. At present it is also operating Islamic banking facilities.
It started its operation in 1983 with the authorized capital Tk. 200 million and paid up capital was Tk. 34 million. Up to December 31,2005 Authorized capital Tk. 1,750,000,000, Paid-up Capital of the Bank stands at Tk. 720,000,000.
At present the bank is operating through 77 Branches at most key points of the country. It carries out all banking activities through its branches in Bangladesh. The principal place of business is the registered office at the registered office of the bank is at 3iban Bima Tower, 10, Dilkusha Commercial area, Dhaka-1000. The bank is listed in the Dhaka and Chittagong Stock Exchanges as a publicly quoted company for its shares. A professional team of Bankers is running the day-to-day operation of the bank.
2.2 Company Philosophy
Despite stiff competition among banks operation in Bangladesh, both local and international, The City Bank Ltd. has made a remarkable progress practically in every sphere of its activities. The activities of The City Bank Ltd. are very implicit and vast comparing to that of other bank in the country today. The slogan of the bank is “For Relationship Banking “. The mission of The City Bank Ltd. is to serve the nation through excellent customer services.
The prime objective of The City Bank Ltd. is to create a strong capital base, to earn good profit and pay satisfactory dividend to honorable Shareholders, to achieve the objectives, the bank works for improving the quality of bank’s assets by identifying potential good borrowers. And persuade the clients to open an account in the bank through their wit and intelligence as well as is to maintain the reputation through their customer services oriented facilities. To achieve this desired goal it has intention to pursuit of excellence in the climate of continuous improvement. Because it believes the line of excellence is never ending, it also believes that its strategic plans and business will its strength in competitive environment. Its motto is to provide every single customer services available in today’s banking procedure for their clients.
2.3 The vision of The City Bank Ltd.
To be the leading bank in the country with best practices and highest social commitment.
2.4 The mission of the City Bank Ltd.
1. To contribute to the socio economic development of the country.
2. To attain highest level of customer satisfaction through extension of services by
dedicated and motivated team of professionals.
3. To maintain continuous growth of market share ensuring its steady growth.
4. To maximize bank’s profits by ensuring its steady growth.
5. To maintain the high moral and ethical standards.
6. To ensure participative management system and empowerment of human resources.
2.5 Company Services
The City Bank Ltd. also concentrates the following categories of banking services.
Ø General Banking.
Ø Loan and Advance.
Ø International Trade and Foreign Exchange.
2.6 Customer Services
The City Bank Ltd. is committed to serve the clients in a better way and for this it has been introduced some new innovative things.
2.6 .1 Small & Medium Enterprise (SME) Banking
Considering the growths potentially and demand situation he bank extended credit facilities to small and medium enterprises through SME banking in larger volume in the year 2005 in collaboration with South Asia enterprise development facility (SEDF) and partner banks, the bank took active participation in three daylong road show on SME banking in the city. A separate division was established in the head office to process and handle loans under SME for attaining a respectable market share and successful operation of the scheme. The bank organized several training programs for development of adequate human resources.
2.6 .2 Social Commitments
The city bank Ltd. had demonstrated its social responsibility by taking part in various activities. Significant among them is: donation to
Ø Daridra Durikoron Sangshtha,
Ø Financial assistance to center for rehabilitation of Paralyzed(CRP)
Ø Ozne time financial assistance to Dhaka University Alumni Association.
Ø Continuous financial assistance to special education for intellectually disabled Trust (SEID) etc.
Ø For the environmental and ecological sustainability, the bank implemented beautification project at different places in Dhaka City during 2005.
Ø For the developments of sports ad games, the bank has been supporting a various tournaments with financial assistance. During the year under review the bank patronize the one-day international (ODI) and test matches between Bangladesh and other test playing countries.
2.7 Online
In order to increase faster services in all 77 branches of the bank computerization was completed in 2007. Side by side online facility is gradually being available across the branch of Dhaka, Chittagong, Sylhet, Bogra and Khulna. During the year 2009, eight new branches have been brought under “Finacle” Software to facilitate online banking service. This process will continue and ‘Any Branch Banking’ through ‘Online’ will be introduced within very short time. The number of branch under online banking increased to 17 by the year 2010.The bank had implemented new ABABIL software in its Islamic Banking branch. These developments will certainly increase the standard of customer services within the bank.
As a service center, bank is always under demand from its customer for better service atmosphere at the branch level. Keeping in view the requirement of customer, bank has renovated seven branches including relocation of two branches in 2009.
Online bill collection
Online bill collection service with Grameen Phone.
2.8 Financing Services provided in different Business sectors
1. Hospital project at Kustia.
2. Pharmaceutical project.
3. Re-rolling mill.
4. Garment industry.
5. Poultry project.
6. Hotel project at Bogra.
2.9 Modern technology for services
Demand for modern services in the banking sector is growing faster. The services are now technology based and this bank is not for from competition. The City Bank already implemented world class Fianacle banking software as one of the major technological initiatives in the IT infrastructure development. Ups to now, 33 branches are under this software. Another factor needs to be under consideration that City Bank is the first among domestic banks to introduce Dual Currency City Card.
2.10 Corporate social responsibility
As one of the leading bank, the City Bank plays its responsibility towards the society and contributed donation to various educational instates, Trustee organizations. The “City Bank Foundation ” has been established for same intention. The foundations aim at gearing up its on ongoing and new initiatives the cause of humanity through viable social welfare.
2.11 Good corporate governance
In the absence of any code of conduct and business principles, it is difficult to have a
Self-assessment of the status of the governance. Bank has developed and adopted various operating instruction and manuals for best practices. Key Performance Indicator (KPI) has been adopted to assess the employee performance.
Bank gas adopted a unique code of conduct and ethical guidelines for the employees. Bank has given stress to the compliance of the rules, regulations and guidelines of Securities and Exchange Commission and Bangladesh Bank. The external auditors were given absolute freedom in the process of audit and to verify the compliance, risk management and preparation of accounts as per IAS and BAS norms. Credit rating agency was engaged for rating the bank every year in order to give a fair view of the investors.
2.12 Challenges and prospect
City Bank is a string and effective player in the financial system. Banks exposure in core business of corporate and retail sectors with wide range of products is expanding. Its strategy will remain to grow in areas of core competence and expand activities in SME and Micro
Finance to the development of national economy. Further to enhance foreign exchange reserve Bank will continue their efforts in mobilization of wage earners remittances with a meaningful presence in the overseas. Side by side, the Bank remains focused on quality business and exercise best practices to achieve satisfactory growth on the upcoming years.
Quick glance at the activities of The City Bank Ltd.
| Particulars | 2010 | 2009 |
| Paid up capital | 1080000000 | 720000000 |
| Total capital | 2601000000 | 2080700000 |
| Capital surplus/ (deficit) | 59500000 | 135300000 |
| Total asset | 47445751884 | 35303744444 |
| Total deposit | 39571945519 | 30647833255 |
| Total loan and advance | 30789021982 | 23326338550 |
| Total contingent liabilities | 13623395805 | 9040114395 |
| Total loan deposit ratio | 77.81 | 76.11 |
| Profit after tax | 240021913 | 540924588 |
| Interest earning asset | 40820243647 | 31913926565 |
| Return on investment | 8.58% | 8.38% |
| Return on asset | 0.58% | 1.75% |
| Income from investment | 431448405 | 285323890 |
| Earning per share (tk) | 22.22 | 75.13 |
| Net income per share (tk) | 22.22 | 75.13 |
| Price earning ratio (times) | 17.55 | 10.24 |
2.13 Products of The City Bank Limited:
2.13 .1 City Credit Card
This is one kind of credit card, which is totally different from service of the bank. This is the only dwell card in credit card service that is we can use it at home and abroad.
Kinds of city card
ü Dual City card
ü Local City card
ü International City card
ü Co brand city card
Type of city card
Ø Gold City card
Ø Silver City card
Ø City card connect (Debit card)
Ø The American Express (Credit Card)
Characteristics of city card
Ø Yearly fee and renew fees are least
Ø It is free of cost for the local part of Dual City card.
Ø Advantage of large POS (Point of Sell) and ATM Network
Ø Community preference for 1st class government officer, businessmen, etc
Ø Monthly fee is only 5% of total cost
Sources of city card
After collecting the form, party will fill up the form properly and forms are available at card division or any branch of city bank. Those who have account in any branch can collect the form & deposit these forms to front desk and later the front desk officer will send the forms to the card division at the principal office.
Cash transaction
50000tk are drawnable within a day but highest tk20000 is possible in one (1) transaction and ATM Transaction is possible not more than 4 times. In case of city gold card highest $1000 could be drawn & $500 through silver card. Maximum 80% of credit limit is drawnable in case of gold card 70% for silver. In international case, this limit is 60% and 50% respectively.
Payment against monthly statement
Payment of Local City card or local part of Dual City card is possible in any branch through the payment slip in cash counter. In case of cheque, it must be deliver to the officer 3 days before the payment due date. In case of international part of Dual City card, payment is possible through the foreign exchange department of authorized dealer branches like corporate office, Gulshan branch, Kawran Bazar branch, and new market branch, etc. Monthly statement & original passport is necessary in payment time.
If the credit limit is not endorse in original passport through card division, then branch officer of foreign exchange will endorse the credit limit & this may not necessary if the card division provide endorsement. In that case, customer copy could be provided through the payment slip.
2.13 2. VISA Electron Debit card
Unique features
With this card a customer can withdraw cash from more than 300 ATM’s in the country. All ATM’s displaying VISA logo will accept this card 24 hours a day and 365 days a year. With this card a customer can shop and dine at hundreds of outlets across the country displaying VISA logo. It allows the right kind of financial planning and budgeting. This card prompts self-discipline to the customers, that is spending money when needed only. No cash and cheque, it is hassle free and safer than carrying cash. Statement will show if money has been withdrawn at ATMs or spent at restaurant /shops. So, record of expenditure is readily available.
There is no extra expense, no interest, no late payment charges, and only a small annual fee.
2.14 Some service products
2.14.1 Lakhpati savings scheme
Any person of Bangladeshi who is 18 or over 18 has eligibility to open the account
Monthly installment for the scheme is 1000 tk and this is fixed term deposit
Total duration is 6 years and total installment no is 72
| Time | Monthly installment | Maturity |
| 6 year (72month) | 1000.00 | 100000.00 |
After the death of the accountholder the nominee will get the amount.
After two years completion of regular installment payment the accountholder might borrow 80% of deposited amount. Any benefit from Lakhpati Savings scheme may come under preview of Income tax, excise duty, source tax, etc will be borne by the customer.
Monthly installment should be paid on the first 10 days of the following month.
2.14.2 Three stage savings scheme
Monthly installment of this scheme is 500 to 5000 tk. This is also fixed and customer can open any no of TSSS (Three-Stage Savings Scheme).
The scheme is for 2/4/6 years and total no of monthly installment is 72.
Maturity payment:
| Period | Interest | Maturity payment |
| 1 year | 8% | 13093.00 tk.(1st stage) |
| 2 year | 9% | |
| 3 year | 10% | 28955.00 tk.(2nd stage) |
| 4 year | 11% | |
| 5 year | 12% | 48548.00 tk.(3rd stage) |
| 6 year | 13% |
2.14.3 Junior savers scheme
Initial deposit for this scheme is 5000 tk., which will be followed by monthly installment of 1000 tk. till maturity. The scheme is for 10 years and 120 equal monthly installment
The scheme is covered by insurance. In case of death of account holder, nominee will get the amount covered by insurance and maximum insurance coverage by an initial deposit is 600000-tk. Insurance premium will be borne by the bank except premature encashment.
Matured value
| Period | Initial deposit | Monthly installment | Matured value |
| 10 years
(120 months) |
5000.00 tk | 1000.00 tk. | 200000.00 tk |
2.14.4 Islamic Banking
The City Bank Ltd. is operating now Islamic banking through some branches in the city. Their preceding years profit is well. The top management always follows up rules and regulations of the Islamic banking and Bangladesh Bank.
2.14.5 Achievements award
The bank has been awarded the Manobadikar Podak 2006 by the Bangladesh society for the enforcement of human rights (BSEHR) for its achievements in beautification, preservation and nurturing of various projects in the city.
2.15 Ethical Bank Environment
The word “Environment” is a generic concept, which embraces the totality of external environmental forces, which may influence any aspect of organizational activity. It also in simple terms means the ability of a corporation to relate its operation and policies to the social environment in ways that are mutually beneficial to the company and to society. Sustainable economical, ecological and social development of own surroundings is key element of all business decision. The City Bank Ltd. promotes sustainable development to meet the needs of the present without compromising the ability of the future generations to meet their own needs. The bank always analyzes its Strength, Weakness, Opportunity, and Threats (SWOT).
The bank also maintain the responsibilities for the society in which it securers. The prime concern of the bank is to influence and to take part in different social and cultural activities. By consulting the activities of the previous years many examples of such activities can be bought into being.
2.16 SWOT Analysis
2.16.1 Strength
Financial strength
The City Bank took a strategy of quality growth by adhering to compliance in all areas of operation. Bank consolidated its position as one of the successful financial institution and maintained satisfactory growth across many of its business lines. Bank remained focused in all key areas covering capital adequacy, meeting provision for loans and advances, good asset quality, sound management, satisfactory earning and strong liquidity.
Recognizes credit rating agency CRISL on the basis of Banks performance for the year 2006 assign Bank “A” in the long term category and “ST-3” in the short term category. Bank was able to make a net profit before tax of tk. 653 million. Deposit of the bank increased by tk. 8924 million indicating a growth of 29%. Loans and advances, which are well diversified, have growth by 32% last year.
Modern technology for services
Demand for modern services in the banking sector is growing faster. The services are now technology based and this bank is not for from competition. The City Bank already implemented world class Fianacle banking software as one of the major technological initiatives in the IT infrastructure development. Ups to now, 33 branches are under this software. Another factor needs to be under consideration that City Bank is the first among domestic banks to introduce Dual Currency City Card.
Corporate social responsibility
As one of the leading bank, the City Bank plays its responsibility towards the society and contributed donation to various educational instates, Trustee organizations. The “City Bank Foundation ” has been established for same intention. The foundations aim at gearing up its on ongoing and new initiatives the cause of humanity through viable social welfare.
Good corporate governance
In the absence of any code of conduct and business principles, it is difficult to have a Self-assessment of the status of the governance. Bank has developed and adopted various operating instruction and manuals for best practices. Key Performance Indicator (KPI) has been adopted to assess the employee performance.
Bank gas adopted a unique code of conduct and ethical guidelines for the employees. Bank has given stress to the compliance of the rules, regulations and guidelines of Securities and Exchange Commission and Bangladesh Bank. The external auditors were given absolute freedom in the process of audit and to verify the compliance, risk management and preparation of accounts as per IAS and BAS norms. Credit rating agency was engaged for rating the bank every year in order to give a fair view of the investors.
2.16.2 Weakness
1. Lack of Adequate Employees:Number of employees is less than the volume
of works, which creates problem for prompt service.
2. Lack of up to date equipment’s:The City Bank Limited has lack of modern technologies and equipment’s like online facilities, fax, cash card and credit card system.
Challenges and prospect
City Bank is a string and effective player in the financial system. Banks exposure in core business of corporate and retail sectors with wide range of products is expanding. Its strategy will remain to grow in areas of core competence and expand activities in SME and Micro Finance to the development of national economy. Further to enhance foreign exchange reserve Bank will continue their efforts in mobilization of wage earners remittances with a meaningful presence in the overseas. Side by side, the Bank remains focused on quality business and exercise best practices to achieve satisfactory growth on the upcoming years.
2.16.3 OPPORTUNITIES
The City Bank Ltd. can pursue a diversification strategy in expanding its current line of business. The management can consider options of starting client service in its merchant banking division. There are several opportunities for The City Bank Ltd. to expand its product line. In this competitive environment The City Bank Ltd. must expand its product line to enhance its Sustainable Competitive Advantage (SCA). As a part of its product line proliferation, The City Bank Ltd. can concentrate more on SME & Agro based industrial loan because these two sectors have huge potential. If The City Bank Ltd. can grab this opportunity then it will be better for the bank.
The City Bank Ltd. should move towards the real time on line banking operations. It is high time that they should go for this because the foreign banks as well as some local banks are already in to the total on line banking operations.
2.16.4 Threats
There are a lot of competitors in banking sector of Bangladesh. So it’s a great threat for them. There are not only the conventional banks but also some other Commercial & Islamic Banks in the market as their competitors. Conventional banks are always trying to understand people that interest and dividend are the same through various seminar, symposiums and publicity.
Despite of marvelous popular support, spectacular success in terms of mobilization of deposit and distribution of profit. Small Industries Bank in Bangladesh yet to achieve the designed level of success due to the absence of appropriate legal framework. All the Government approved securities in Bangladesh are interest bearing.
General banking
3.1 General Banking
General Banking department performs the core functions of a branch. General Banking department is that department which is mostly exposed to the maximum number customers. It is the introductory department of the Bank to its customers. A bank does not produce any tangible product to sell but does offer a variety of financial services to its customers. The Kawran Bazar branch of The City Bank Limited has all the required sections of general banking and these sections are run by manpower with high quality banking knowledge. Hence, a touch of rich customer service is prevailing in the branch. They take the deposit from the customer and pass entry of every transaction within the day. It opens new accounts remit funds, issue Bank drafts and pay order etc. Since Bank is confirmed to provide these services everyday, that’s why the General Banking is known as the ‘Retail Banking’.
3.2 Deposit conceptions of retail banking
(a) Accepting Deposit
Accepting deposit is one of the two classic functions of CBs. Deposit may be classified in to two parts:
1. Time Deposit.
2. Demand Deposit.
(1.0) Time Deposit
A time deposit which is payable at the fixed date or after short notice is known as the Time Deposit. The City Bank Limited accepts time deposit through
q Fixed Deposit Receipt (FDR)
q Short Term Deposit (STD)
q Deposit Pension Scheme (DPS)
q Monthly Fixed Deposit (MFD)
While accepting these deposits, a contract is done between the Bank and the customer. When a banker opens an a/c in the name of a customer then arises a contract between these two. This contract will be a valid one only when the parties are competent to enter contracts. As a/c opening initiates the fundamental relationship and since the banker has to deal with different kind of person with different legal status, The City Bank Ltd. official’s remain very much careful about the competency of the customer’s.
Fixed Deposit (FD)
The depositor’s deposit a fixed amount for a fixed period of time. A FD receipt is issued to the depositor acknowledging receipt of sum money mentioned therein. IT also contains the rate of interest and the date on which the deposit fall due for payment.
STD Account
In STD A/C the deposit should be kept for at least 7 days to get interest. The interest offered for STD is less than that of saving deposit. In The City Bank Ltd. various big company, organization, government departments keep many in STD a/c. Frequent withdrawal is discouraged and requires prior notice.
In The City Bank Ltd., usually customers give an instruction to the Bank that their CA will be debited whenever its deposited amount crosses a certain limit and this amount will be transferred to the STD a/c.
(2.0) Demand Deposit
These deposits are withdrawn able about without notice, e.g. Current Account. The City Bank accepts demand deposit through the opening of
Ø Current Account.
Ø Savings a/c.
Current Account
Current account is an account where numerous transactions can be possible by the account holder within the funds available in its credits. No interest is paid on those deposits. A current is a running and active a/c, which may be operated upon any no of times during a working day. There is no restriction on the amount of withdrawal from a Current Account.
The Primary objectives of CA are to save big customers such as- business men, Joint Stock Company, Public authorities etc. from risk of handling a lot of cash themselves. The cost providing CA facilities is considerable to the Bank since they undertake to make payments
and collect bills drafts, cheque for any no. The Bank is therefore don’t pay interest on current deposit while on the other hand, some Banks charges on a/c’s.
The current account holders enjoy certain additional privileges in comparison to a saving deposit holder:
a) The bank collects third party cheques with the endorsement for their current account
holders.
b) The bank gives overdrafts facilities a certain case.
c) The banks grant the loans and advances though current accounts.
Saving’s Account
To encourage savings habit amongst the general public, bank allows depositors to open savings account. As the name indicates, these accounts are opened for the purpose of savings. Interest is awarded on the balance of the account. Only 13% of the saving deposits are demand deposit and rest of is time deposit.
¨ The Bank offers a reasonable rate of interest.
¨ The no of withdrawals over period of time is limited. Only two withdraws are allowed per week.If there are more than two withdrawals are made in a week no interest will be paid on rest of amount of that month.
¨ The total amount of withdrawals on any date should not exceed 25% of the balance in the a/c unless 7 days advance notice is given.
3.3 Composition of deposit
Banks deposit grew by 29% in 2006. Total deposit stood at tk 39572 million with an increase of tk 8924 million. The deposit position in the year 2005 was tk 30648 million. The growth was supported by branch network and high standard service provided to customers. Fixed deposit remained the main component of deposit contributing about 46% of total deposit.
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3.4 Deposit composition of bank
| No. | Type of deposit | Amount in million | % of share |
| 01 | Current + others | 5815.47 | 14.70% |
| 02 | Savings | 7167.83 | 18.11% |
| 03 | Short term | 2829.34 | 7.15% |
| 04 | Fixed deposit | 18324.06 | 46.31% |
| 05 | Scheme | 5435.24 | 13.73% |
| Total deposit | 39571.94 | 100.00% |
3.5 Different types of customer / Account Holder
Any one can open an account in Bank if he or she is capable of entering in valid contract and a banker’s are willing to enter into the necessary business relation with him. So any of the following can open an
Account
q Individual (personal) account.
q Joint account.
q Partnership firm (Sole traders/ registered or unregistered)
q Joint stock company (Private/Public LTD company.)
q Public Sector Corporation.
q Municipalities/ Local bodies.
q Clubs/Associations/ Schools/ colleges/ Universities.
q Executors/ Administrator.
q Trustee.
3.6 Account Opening Section
The relationship between the customer and the banker begin with the opening of an account by the customer. Opening of an account binds the banker and the customer into contractual relationship. But selection of customer for opening an account is very crucial for a bank. In fact all kinds of ford and forgery start by opening an account. So the banker should take extreme caution in its selection.
3.6.1 Account Opening Procedure
A. Below the process
1. An existing CA holder of the Bank.
2. Officials of the Bank not below the rank of an Assistant officer.
3. A respectable person of the location well known to the Manager/Sub-Manager of the Branch concerned.
B. The type of account, the prospective Customer wishes to open should be ascertain. Highlight the main features of the account obtained necessary papers prescribed for opening of the particular type of account including two copies passport size photo of the account holder duly attested by the Introducer and verified by the Authorized officer of the Bank.
C. Supply a set of printed forms required for opening the account, which will normally
include:
1. Advise of new account.
2. Specimen Signature Cards (SS Card).
3. Account Agreement.
4. Deposit Slip Book.
5. Check Book Requisition Slips.
D. Request the customer to carefully read and fill up the printed forms supplied to him.
E. Signature of the customer on the reserves of the signature card. Any special instructions with regard to operation of the account should be noted on the relevant signature card boldly duly authenticated by the account holder should be obtained.
F. The required account no. For the new account from the account opening register should be obtained.
G. Obtain the signature and account no. Of the Introduces on the advice of new account the
place meant for the purpose and gets the signature properly verified by an Authorized
official of the Bank.
H. The Deposit slip properly filled in and signed by the customer in duplicate should be
collected. Then the new account no. Should be written at the appropriate place of the
deposit slip and request the customer to deposit the money at the Teller’s counter.
I. Get each signature of the Customer) introduces on the Advice of New A/c and on the
signature cards admitted by the authorized official of the Bank using a small rubber
Stamp. The Authorized officer on the advice of new A/c and on the spice men signature
cards should also attest the signature of new a/c hold.
J. After approval of the opening the a/c, get the Chequebook requisition slip signed by the
Customer’s a/c of the amount of Exercise duty payable for the checkbook.
K. Deliver the checkbook to the customer after properly marking the a/c no. Name and place
of the branch on each leaf of the checkbook.
L. On completion of a/c opening opens a file for the new a/c holder and files all relevant
papers forms etc. Signature card copies of advice, Deposit slip Debit ticket etc. is
distributed to concerned departments.
3.6.2 Cheque Book Issue
To facilitate the withdrawals and payments to third parties by the customer, the bank contains ten leaves book to the customer. A savings account chequebook contains ten leaves and a chequebook of current account may be 20 pages or 50 pages. The account number is affixed on corner of each page. The withdrawal pages book contains one extra page called cheque requisition slip, which is signed by the account holder and verified by the authorized officer at the time of issuing a chequebook. The cheque serial is entered both in the chequebook issue register and in computer to the corresponding account.
3.6.3 Transfer of an account
When an account is transferred from one officer to another, the account opening form etc. signed at the time of opening account and any forms or documents which are necessary for its proper conduct at the time of transfer, must be forwarded under cover of form, to the office to which the account is transferred together with the relative mail transfer, specimen signature cards) and standing instruction if any, no exchange should be charged on such transfer. Attention is also invited in this connection.
3.6.4 Closing the account
A banker can close the account of his customer or justifies the stoppage of the operation of the account under considerable circumstances:
Ø Notice given by the customer himself.
Ø Death of customer.
Ø Customer’s insanity and insolvency.
Ø Order of the court.
Ø An application to close the account from customer is received.
Ø Chequebook is destroyed.
3.7 Telegraphic Transfer (TT)
TT is “Account payee only instrument. The customer can enjoy this facilities only A/C in the down on branch. Telegram, telephone, telex, or fax as desired by the remitter effects TT. Transfer of the funds by telegraph is most repaid and convenient but expensive method. The drawer and payee should have a/c with the bank. TT is issued against cash, cheque and later of instrument.
3.7.1 Procedure for out going TT
Ø Deposits of money by the customer along with filled application form.
Ø A cash memo is given to the customer containing TT serial no…
Ø Tested telex message is prepared, when TT serial no. Notifying party name, a/c no is mentioned.
Ø Telex section officer confirms transaction of message.
3.7.2 Procedure or incoming TT
After receiving the telex message, it is authenticated by verify cod no Serial no. Etc. It is called the test for TT. For example:
Ø There is the TT serial no.
Ø Payment serial no.
Ø Branch serial no. (It is written on ABC book, which will not to another branch.)
Ø Date code no
Ø Amount code no.
Ø Managers code no.
Ø Officer codes no.
3.8 Pay order (PO)
This is an instrument issued by the branch of a bank for enabling the customer/ purchaser to pay certain amount of money to the order of a certain person/ firm/ organization/ department/office in the same clearinghouse area of the pay order-issuing branch.
(a) Pay order has different characteristics
Ø The issuing branch and the paying branch are same.
Ø Application for payment with in the clearinghouse area of the issuing branch.
Ø This may be open or can be crossed.
(b) Procedure of P.O. issue
Ø Obtain PO application form duly filled in and signed by the applicant.
Ø Receive the amount in cash/transfer with commission amount.
Ø Issues pay order.
Ø Enter in pay order register.
(c) Procedures of pay order payments
Ø Examine genuinely of the pay order.
Ø Enter in to pay order register and give contra entry.
Ø Debit if fund ok for payment.
(d) Canceling a pay order
The party will submit the pay order along with an application mentioning the reason of cancellation. If the pay order is submitted to the favoring party endorsement will be given on the pay order.
Party will be charged an amount of TK.60/- as per cancellation charge. No cancellation charge will be charged if the favoring party will released the pay order. For every commission government charges 15% VAT of the commission.
3.9 Opening FDR account
The necessary steps for opening of an FDR account are
1. Filling up the prescribed FDR account opening application form.
2. Signing on the SS card.
3. Depositing the FDR amount.
4. Accepting the FDR Receipt.
3.9.1 The FDR Block
The FDR block has different parts. The smaller one remains in the bank along with FDR block and the other one is received by the account holder as FDR receipt. The account holder as FDR receipt receives both of the other. Both of the FDR pages contain the same information.
A FDR slip contains the following information:
1. Serial number of the FDR.
2. Issuing data.
3. Received form (name of the account holder).
4. Sum of the TK.
5. The rate interest and period.
6. Date of maturity.
7. Two authorized officer’s sign.
3.9.2 FDR account opening
In Fixed Deposit receipt party could deposit for 1 month, 3 month, 6 month or 1 year and time block offers different interest rate. Below is the table describing this:
| FDR | Rate (%) | Remarks |
| Eligibility: Interest accrued
Less than tk. 2000 will not be |
||
| For 1 month | 8 | |
| For 3 month: | ||
| Up to tk. 1 crore | 10.25 | |
| Tk. 1 crore to 5 crore | 10.50 | |
| Above tk. 5.00 crore | 10.75 | |
| For 6 month: | ||
| Up to tk. 1 crore | 10.50 | |
| Tk. 1 crore to 5 crore | 10.75 | |
| Above tk.5.00 crore | 11.00 | |
| For 1 year: | ||
| Up to tk. 1 crore | 10.75 | |
| Tk. 1 crore to 5 crore | 11.00 | |
| Above tk. 5.00 crore | 11.25 |
These interest rates is calculated and revised by finance division located at the corporate office of The City Bank Ltd. And forwarded to all the branches.
3.9.3 Payment of matured FDR
In case of matured FDR interest is paid with the principle amount but pre maturated FDR does produce minimal interest. Suppose party opens an FDR for 1 year and after 8
FDR A/C Debit.
(Auto) Source tax A/C
Excise Duty
Pay slip/ (SB/CD) A/C
Interest Credit
Months he /she want to withdraw, then interest will be given for 6 months, not for 1 year.
Pay slip
Stamp is mandatory, when closes the FDR account, this is needed. It contains the signature of the accountholder, which is verified later.
Auto renewal of FDR
If the account holder allows the provision of auto renewal then the FDR account will be auto renewed after the maturity. The renewal will be for another three month.
Preparing bill, statements
Accounts section makes the salary statement for the employee at the end of the month and also some bills like
Ø Conveyance: Going outside in office time for official purpose.
Ø Entertainment: Supplying tea
Ø Table stationary
Ø Office stationary
Ø Beautification
Ø Electricity fitting and replacement
Ø Furniture
Ø Magazine: Pay the bill of newspaper and magazine.
3.10 Clearing house
According to the article 37(2) of Bangladesh Bank Order.1972 the banks, which are the member of the clearinghouse are called as Schedule banks. The scheduled bank clear the house drawn upon one another through the clearinghouse. This is an arrangement by the central bank where everyday the respective member banks gathers. Banks for credit of the proceed s to the customers’ accounts accept cheque and other similar instruments. The bank receives many such instruments during the day from account holders. City Bank Kawran Bazar branch receives different types of instruments, such as check, pay order, demand draft (DD), from its customers for collection. It also pays on behalf of its customers for those instruments that come to it through clearinghouse. When instruments of City Bank are sent for collection or received for payment through clearinghouse it is called Inter Branch Collection or IBC. The whole process of collection and payment would involve considerable labor, delay, risk and expenditure, all the labor. Risk delay and expenditure are substantially reduced, by the representatives of all the banks meeting at a specified time, for exchanging the instruments and arriving at the net position regarding receipt.
3.10.1 Transfer delivery
The process of collection of cheque’s and other instruments from branch to branch of a bank is known as transfer delivery.
Preparing instrument for transfer delivery
ü The branch received the instruments through deposit slip.
ü All the essential of an instrument is then checked.
ü Entry is given in outward register.
ü Courier/ attendant sends the check with a schedule to the drawer branch.
Responding the instruments through transfer delivery
ü The responding branch will collect the instrument from the messenger.
ü Entry is given in inward register.
ü If the instrument is honored then responding branch will send an IBCA.
Accounting entries for main Branch:
Party a/c Dr.
H.O a/c (responding branch) Cr.
Accounting entries for main branch: H.0 a/c Dr.
Party a/c Cr.
3.10.2 Out ward Bill Collection (OBC)
Collection of check of a bank outside the clearing zone is known as OBC. It refers the instruments drawn on the other Banks received by the City Bank Ltd.
System of OBC Lodgment
Ø Accepting the instrument with deposit receipt from the client.
Ø Investing the instrument and deposit receipt carefully, specially date of check, amount, and account number, name, and sign of depositor.
Ø The following seals are applied on the instruments; like OBC seal with OBC number, Endorsement seal.
Ø Entry in the OBC registers.
Ø Making two copies of schedule. One is enclosed with the instrument for collecting and the other one ID used as office copy.
Ø A contra voucher will be written. The entries:
Customer Liability Dr.
Banker’s Liabilities Cr.
Ø Instrument attached with forwarding schedule is send to the bank on which the check has been drawn.
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3.10.3 Inward bills Collection (IBC)
When a check comes to the bank from another branch outside the clearing area, the process is called IBC. After collection of check an IBCA is send to the OBC sending branch.
Sending the OBC is not enough for marking payment. We send the remained on instrument drawee bank to send back the instrument may be placed more than one time for payment.
3.11 Cash section
Cash:
Receive and payments in cash are the prime task of the cash section. Everyday cash balancing is done at the end of the transaction. There are three limits in cash section; they are the
1. Counter limit,
2. Volt limit
3. Transit limit.
How many accounts have to be kept in the counter, volt and transit decided by the size and mode of transaction of the branch.
Functions of f the department
a) Shall be responsible for all cash and cash items related matters including record keeping
of the information are received regarding cash remittances.
b) Shall supervise the cash remittance under direct guidance of Sub-Manager.
c) Shall be responsible for any receipts and payments as per circular issued from time to time.
d) Keeping liaison with the Bangladesh Bank, Cash department.
3.11.1 receipt
The account holders are prescribed deposit