Impact of Providing Satisfactory Customer Service on Business Growth – A Study on National Credit and Commerce

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Impact of Providing Satisfactory Customer Service on Business Growth – A Study on National Credit and Commerce (NCC)


In the world of consumerism, the business organization strive for the customers satisfaction as number one business strategy whatever may be the product of the organization, either service or non service. Service is the product of Bank. There is a saying that customer service starts right from the stairs of the bank building. The guard at the door is the first person represents the bank, receives a customer with wishes in smiling face.


As a requirement for my Bachelor of Business Administration program I have conducted this report on “Impact of Providing Satisfactory Customer Service on Business Growth – A Study on NCC Bank Limited”. During the internship, a student is required to prepare a report on the organization where he /she has been attached. My supervisor Mr. Ehsanul Huda Chowdhury, Coordinator, Office of Placement and Alumni, AMERICAN INTERNATIONAL UNIVERSITY – BANGLADESH assigned this topic to me.


With the rapid growing competition (due to free market economy) among nationalized, foreign and private commercial banks operates it banking operation and how customer service can be made more attractive, the expectation of the customers has immensely increased. Reciprocating the sentiment, commercial/ private banks are trying to elevate their traditional banking service to a better standard, to meet the challenging needs. Side by side, these banks have now concentrated their attention towards diversification of their products for better performance and existence. Under the above circumstances, it has become necessary for NCC Bank Limited, one of the leading commercial banks, to focus its attention towards the improvement of the customer service. That’s why it is quite justified to make an in-depth study about its operation and evaluate the service provided by this bank and scope for its improvement. The study may help formulating policy regarding NCC Bank Limited the ideas relating to the feelings of the customers and bankers. Further more, executives who are actually executing the policies undertaken by the top management will have a chance to communicate their feelings and will have the feedback about their dealings from the customers.


The following are the general & specific objectives of the report.

1.2.1 General Objectives:

The general Objectives of the report are as follows:

· To fulfill the academic requirements of internship report.

· To acquire practical experience in different banking services of NCC Bank Limited.

1.2.2 Specific Objectives:

The specific objectives of the study are as follows:

  • To present an overview of NCC Bank Limited.
  • To find out the “Impact of Providing Satisfactory Customer Service on Business Growth of NCC Bank Limited”.
  • To gather comprehensive knowledge of the overall banking functions and the expectations of the customers regarding the service level of the bank.
  • To identify the factors contributing to the attractive and operative performance of the local branch of the bank.
  • To make a study of the facts in order to arrive at certain conclusion about overall banking operation.
  • Critically analyst the functions and the operations of each level of the organization of Export NCC Bank Limited.
  • To find out strength and weakens of the organization.
  • To learn how to use of the different ratios in practical fields.
  • To prevent current observation and unique aspects of the bank.


While I preparing this report, I had a great opportunity to have an in depth knowledge of all the divisional work practiced by NCC Bank Limited. It also helped me to acquire a first hand perspective of a leading private Bank in Bangladesh. The scope of this report is to analyze the operation of Export Department and to evaluate the performance of the different departments of NCC Bank Limited.


The methodology of the report is stated below, which was appropriately exercised in achieving the above stated objective.

This study is based on the statements and reports available form the Bank management Information System. Beside these some secondary materials such as books, journals, reports etc. have also helped in preparing the study.

  • Sources of Data Collection:

The data have been collected from the two following sources:

  • Primary Sources:
  • Face to face conversation with the respective officers & staffs of the Branch.
  • Informal conversation with the clients.
  • Personal observation.
  • Desks work in different sections/departments.
  • Secondary Sources:
  • Annual report of the Bank.
  • Consultation of related books and publications.
  • Different statements of branch.
  • Past work on it.
  • Various files, Balance sheet and various documents.
  • Data Processing:

Collected information was processed by the use of computer system. Detailed analysis, working variables and working definitions has been embodied in the report.


  • It was difficult to communicate with the customer, as many of them were hesitant to respond. Therefore, the sample size was not big.
  • Another limitation of this report is Bank’s policy of not disclosing some data and information for obvious reason, which could be very much useful.
  • The outlet owners might have got a little biased on the fact. Because they thought that the study was being prepared for the particular department.
  • Time limit of the study: I could not accommodate be able to spend enough time to make an in depth study for excessive business in official works.
  • Location of the study: The study was conducted only on the head office & more or less Branches level over all branches performance could not be evaluated for time constraints.
  • Shortage of written materials
  • Fear of disclosure
  • Lack of sufficient time of bank personnel

In spite of all this, limitations I have tried to put the best effort as far as possible.


Overview of NCC Bank Limited

2.0 Organizational Overview of NCC BANK LIMITED.

NCC BANK LIMITED as the name implies a newly formed commercial bank but is the first of its kind in Bangladesh. It has been incorporated in Dhaka, Bangladesh as a public limited company and its Head Office of the Bank is located at 7-8 Motijheel Commercial Area, Dhaka- 1000.

In the world of consumerism the business organization of the world strive for the consumers satisfaction as a number one business strategy whatever may be the product of the organization, either service or non service. Service is the product of bank. There is a saying that customer service starts rights right from the stairs of the bank building. The guard at the door is first person pep resents of the bank, receives a customer with wishes in smiling face.

2.1 Historical Background of the NCC BANK LIMITED.:

NCC BANK LIMITED incorporated under the companies Act 1994, on the June 02, 1999. NCC BANK LIMITED. believes in togetherness with its customers, in its march on the road to growth and progress with service. As a commercial bank we will do all traditional banking business including introduction of a wide rang of savings and credit products, retail banking and ancillary services with the support of modern technology and professional skills.

The NCC BANK LIMITED. commenced formal commercial banking operation from August 03, 1999 with the permission of Bangladesh Bank. The sponsors of the Bank are leading business personalities and reputed industrialists.

The Bank has a sound capital base; its Authorized Capital is TK. 1000.00 Million while its Initial Paid up Capital is TK. 225.00 Million subscribed by the sponsors. To solidify its capital base further the paid up capital will raise to TK. 450.00 Million within a reasonable period by public offering of shares of the Company.

The Bank will be immensely benefited furthermore from the able leadership of the Chairman and the valuable advice and guidance of the Advisor.

The Board of Directors wants to carry out in the management this service industry’s entire administration and credit portfolio independent without any undue influence from out side. The board will formulate policy and give policy directives to the Management. The bank will operate with integrity, competence and farsightedness abiding by all principles and provisions laid down in the Bank Company Act, 1991.

NCC BANK LIMITED will endeavor it’s best in consolidating this sector in helping growth and development of the backward linkage industries. With continuous dependence on the imported raw materials, the country’s RMG sector might find base when the global apparel trade will be wide open in 2005 with the end of multi Fiber arrangements. Development of composite textile sector may be helpful to get out of this problem. Therefore, the NCC BANK LIMITED will lead its mite of the development of this vital sector.

2.2 Mission of NCC Bank Limited.

The NCC Bank Limited has completed its successful existence on its career. Now it has taken a revolution of its business operation in year 2006 searching for incremental improvement in productivity, operational efficiency, and structure consequently. A new organization structure has been developing according to business focus, priorities, and competitive pressures.

2.3 Objectives of NCC Bank Limited.

  • To provide high quality financial services in export and import trade.
  • To provide excellent quality Customer services.
  • To maintain Corporate and business ethics.
  • To profit maximization.
  • To become a trusted repository of customers’ money and their financial advisor.
  • To make our stock superior and rewarding to the customers/share holders.
  • To display team spirit and professionalism.
  • To have a Sound Capital Base.

2.4 Organizational Layout of NCC Bank Limited:

Sub Staff


Senior Principal


Asstt Vice


Senior Asstt. Vice


Vice President
Executive Vice


Senior Executive

Vice President

Deputy Managing




2.5 Audit and Inspection:

During the year 2006, Bank’s internal audit team conducted through inspection of all the Branches. Bangladesh Bank also carried out inspection at Head Office and Branches during the year.

2.6 Correspondent Relationship:

As correspondent Bank are the trade partners in handling International Trade, NCC Bank Limited has established strong business network across the globe. The Bank has established correspondent relationship with the major Banks. At present, the Bank has more than 180 Correspondents. The Bank is well equipped to handle International Trade at each corner of the world.

2.7 Human Resources Department:

There is no alternative to skilled and trained work force in service Industry. Bearing this in mind the well educated, promising and honest workers are being appointed and trained. Bank has given top priority for developing skilled work force and introducing them with modern technologies with the purpose to develop quality customer services. We have recruited experienced Bankers as well as fresh university graduates. The fresh recruits are being trained through Bangladesh Institute of Bank Management (BIBM) and other Training Institute.

2.8 Financial Products and Services:

The Bank has already introduced number of financial products such as Monthly Savings Scheme (Money Grower) and Monthly Income Scheme (Steady Money), Lease Finance. In addition, schemes like Consumers Credit, Credit Card, ATM, On Line Banking and other lucrative schemes will introduce soon.

2.9 Future Prospect:

Banks drive towards market leadership as well as quality in choosing business will continue during the year 2006 although competition intensified with the opening of more financial institutions. The Bank is optimistic that the volume of business will increase in the coming years through pragmatic and market friendly policies. The Bank shall continue to explore new fields of investment and take steps to open new Branches for banking and capital market related activities. We shall endeavor to adopt customer-oriented policies and introduce new techniques that will help to earn profit and increase greater confidence of the existing/ prospective customer.

2.10Present Organogram of Motijheel Branch:

NCC Bank Limited

Motijheel Branch, Dhaka


Topic Analysis and Desciption

3.1 General Banking

General banking is designed to provide financial services to the general people in saving their money, smoothing transactions for businessperson and ensure security of the precious wealth of the clientele. Bangladesh is one of the less developed countries. Therefore, the economic development of the country depends largely on the activities of commercial banks. So we need to emphasis whether these commercial banks are effectively and honestly performing their functions, assigned duties and responsibilities. In thus respect we need to know about the general banking function of those banks as well as “The NCC Bank Limited.” is to provide the general banking service.

  • Deposit:

A bank is essentially an intermediary of short-term funds. It can carry out extensive lending operations only when it can effectively channels the saving of community. A good banker is one who effectively mobilizes the saving by making it available to productive and priority sectors of the economy thereby fostering the growth and the development of the nation’s economy.

Therefore, deposit is the blood of a bank. From the history and origin of the banking system, we can know those deposit collections the main function of a bank.

  • Accepting Deposit:

The deposits that accepted by NCC Bank Limited like other banks may be classified in to,

(i) Demand Deposits

(ii) Time Deposits.

  • Demand Deposits:

These deposits are withdrawn without notice, e.g. current deposits. NCC Bank Limited accepts demand deposit through the opening of;

A) Current Account

B) Saving Account

C) Call deposits from the fellow bankers

v Time Deposits:

A deposit which is payable at a fixed date or after a period of notice is a time deposit. NCC Bank Limited accepts time deposits through Fixed Deposit Receipt (FDR), Short-term Deposit (STD) and Bearer Certificate Deposit (BCD) etc.

While accepting these deposits, a contract is execute between the bank and the customer. This contract will be a valid one only when both the parties are competent to enter contracts. As account opening initiates the fundamental relationship & since the banker has to deal with different kinds of persons with different legal status, EXIM Bank Officials remain very much careful about the competency of the customers.

3.1.1 Procedure for Opening of Accounts:

Before opening of a currents or savings account, the following formalities must be completed by the customer:

  • Submit application on the prescribed form.
  • Furnishing photograph- 2 (Two) copies.
  • Introducer by an account holder.
  • Passport or commissioner/ Chairman identification certificate.
  • Putting specimen signatures in the specimen card.
  • Mandate, if necessary.

After fulfilling all the requirements, opens an account for the client and provide the customer with a pay-in-slip book and a chequebook in case of savings account and currents account.

3.1.2 Different types of Deposit Accounts and their Formalities:

The Bank provides different types of account under account facilities. These accounts are classified as shown as,

  • Current Account:

Current account is an account is an account where the account holders can make numerous transactions within a working day. There is no restriction on the number and the amount of withdrawals from the current account within availability of funds. As the banker is under the obligation to repay this deposit on demand, no interest is paid in this account. Generally, current account is opened for businesspersons and trades for easy transaction. However, a person can open CD account for special purpose. Requirements for the different types of account holders are discussed below:

  • Types of current account that are provided by the NCC Bank Limited are as follows:
  • In The Name of Individual:

The client has to fill-up an account opening form. Terms and conditions printed on the back of the form. The form contains the declaration clause, special instructions etc. two copies of passport size photograph duly attested by the introducer affixed with the form and passport photocopy first one to five pages.

  • In Joint Name:

In this type, the formality is same as individual account, but in the special instruction clause, either or ‘survivor’ or ‘former or survivor’ clause is marked

· Proprietorship Firm:

There is a different account opening from for proprietorship firm provided by the NCC Bank Limited. For this account, a customer must need to submit the following papers with the form:

In addition, the customer has to submit the valid documents for Proprietorship account

· Introduction of the A/C.

· Two photographs of the signatories duly attested by the introducer.

· Copy of Trade Licence

· Seal of the concern.

· Passport or commissioner/ Chairman identification certificate.

· Tax Paying Identification Number (TIN) along with the application.

Q Partnership:

In case of partnership account, the bank asks for,

  • A copy of the partnership agreement (Partnership Deed)
  • A letter signed by all the partners containing the following particulars.
  • The name and addresses of all partners
  • Update Trade Licence
  • The nature of the firm’s business
  • Passport / commissioner/ Chairman identification certificate.
  • The name of the partner authorized to operate the account in the name of the firm, including the authority to draw, endorse and accepting the bills and mortgage and sell the properties belonging to the firm.
  • Seal of the concern.
  • Limited Company:

An account opening form is used for limited company. There are two kinds of limited company, public limited and private limited company. The bank always takes precautions for opening this type of accounts. Several documents submitted by the clients, which should be checked carefully by the bank to be legally in a safe position.

To open a limited company current account, an NCC Bank Limited officer asks for the following documents for Limited Co. Account.

  • Introduction of the A/C.
  • Two photographs of the signatories duly attested by the introducer.
  • Signature and seal of the client.
  • Trade License.
  • Certified copy of memorandum and articles of association.
  • Certificate of incorporation.
  • Passport or commissioner/ Chairman identification certificate.
  • Board Resolution for opening A/C dully certified by the chairman/managing director.
  • List of directors along with designation & specimen signature.
  • Latest certified copy of form – XII (to be certified by registrar of joint stock company)
  • Certificate from the registrar of joint stock co. is entitled to commence business (in case of Public Ltd. Co)
  • Certificate from Board of Investment (in case of joint venture or foreign co.)
  • Work permit order from Ministry of Industry. (In Case of Foreign Nation)
  • Joint venture agreement (in case of joint venture)
  • Societies, Clubs and Associations:

The following documents duly completed shall be obtained from the customer at the time of current deposit account of Association /Club/Charity/ Trust/ Society etc.

In case of these sorts of accounts, NCC Bank Limited requires the following documents:

  • Two photographs of the signatories duly attested by the introducer.
  • Registration Certificate Under the Societies Registration Act, 1962
  • Copies of Memorandum, Articles of Association
  • Resolution of the Managing Committee.
  • Power of Attorney to Borrow.
  • Seal of the concern.
  • Non-Government Organization (NGO):

The account opening procedure is same but in exception is that the Registration Certificate from the Social Welfare Department of Government must be enclosed with the application.

  • Joint Account in the Name of Minor:

A minor cannot open an account in his own name due to the incapacity to enter a contract. He can open an account in NCC Bank Limited in Joint name of another person who will be guardian of him.

  • Savings Bank Account (Individual/Joint):

Savings bank account (SB) is meant for the people of the lower and middle classes who wish to save part of their incomes to meet their furniture needs and intended to earn to an income from their savings.There is restriction on withdrawals in a month. Heavy withdrawals are permitted only against prior notice. For opening of this type of accounts, the following requirements are necessary:

  • Photograph attested by the introducer.
  • Passport or commissioner/ Chairman Identification certificate.
  • An introducer of NCC Bank Limited. Introducer can be SB or CD account holder.
  • For joint accounts, signatures of all the account holders are necessary.
  • Short-term Deposit (STD):

In Short-term Deposit, the deposit should be kept for at least seven days to get interest. The interest offered for STD is less than that of savings deposit. In NCC Bank Limited various big companies, Organizations, Government Departments keep money in STD accounts. Frequent withdrawal is discouraged and requires prior notice.

  • Fixed Deposit Receipt (FDR):

They are also known as time liabilities or term deposits. These are deposits, which are made with the bank for a fixed period specified in advance. The bank need not maintain cash reserves against these deposits and therefore, the bank offers high are of interest on such deposits.

In NCC Bank Limited, fixed deposit account is opened in two forms – Midterm (MTD), which is less then one year & the other is Term Deposit, which is more than one year.

  • Opening of Fixed Deposit Account:

The depositor has to fill an application form where in he mentions the amount of deposit, the period for which deposit is to be made the name/ names is which the fixed deposit receipt is to be issued. In case of a deposit in Joint name, NCC Bank Limited also takes the instructions regarding payment of money maturity of the deposit. The banker also takes the instructions regarding payment of money on maturity of the deposit. The banker also takers the instructions regarding payment of money on maturity of the deposit. The banker also takes specimen signatures of the depositors. A fixed deposit account is then issued to the depositor acknowledging receipt of the sum of money mentioned therein. It also contains the rate of interest & the date on which the deposit will fall due for payment.

  • Payment of Interest:

It is usually paid on maturity of the fixed deposit. NCC Bank Limited calculates interest at each maturity date and provision is made on that “Miscellaneous creditor expenditure payable accounts” is debited for the accrued interest.

  • Encashment of F.D.R:

In case of premature FDR, NCC Bank Limited is not bound to accept surrender of the deposit before its maturity date. In order to deter such a tendency the interest on such a fixed deposit is made cut a certain percentage less an agreed rate. Normally savings bank deposit interest rate is allowed.

  • Loss of FDR:

In case of a lost FDR, the customer is asked to record a GD (General Diary) in the nearest Police Station. After that, the customer has to furnish an Indemnity Bond to NCC Bank Limited a duplicate FDR is then issued to the customer by the bank.

  • Renewal of FDR:

InNCC Bank Limited, the instrument is automatically renewed within seven days after the date of its maturity if the customer does not come to en-cash the FDR. The period for renewal is determined as the previous one.

  • Bearer Certificate of Deposit (BCD):

The bearer certificate deposit is a document of title similar to time deposit receipt issued by the bank. The document is a bearer document, hence readily negotiable. Whoever presents it to the bank has the right to get the money. There is no prescribed interest rate on such funds but NCC Bank Limited offers 1% less than the rate of the term deposit of different maturity. The face value of the instrument is the future value. The face value is the sum of the principal amount and the interest. It is beneficial to both NCC Bank Limited and the investor because of the following reasons, –

(I) The banker is not required to encase the deposit before the date of maturity.

Hence, it is assured of funs for a minimum period.

(II) The investor is assured of ready liquidity. In case of need he can sell the

Certificate in the secondary market.

As the identification of the owner is not given in the instrument, it is very much popular. During the Encashment of the instrument, the excise duty and income tax (10%) is deducted. In case of premature Encashment, the principal amount is only paid to the customer.


Cash section of any bank plays a vital role in general banking procedure. Because NCC Bank Limited deals with all types of negotiable instruments, cash, and other instruments and treated are as a sensitive section of the bank. It includes the vault that is used as the beyond this limits, the excess cash is then transferred to Bangladesh Bank.

There are also some electronic counting machines by which a huge amount of cash money can be counted within a few minutes.

This section performs the following functions:

1. Cash Packing:

After the banking hour, cash packed according to the denomination. Notes that accounted and packed in bundles and stamped with initial.

2. Allocation of Currency:

Before starting the Banking hour, all tellers give requisition of money through “ Teller cash proof sheet”. The head Teller writes the number of the packet denomination wise in “Reserve sheet” at the end of the day, all the notes remained are recorded in the sheet. Cash Receiving Procedure:

The work of cash receiving counter is examining deposit slips. Depositor uses the prescribed deposit slip supplied by the bank for deposit cash, cheque, draft, pay order etc. In all types of deposits, the teller must check the following things:

· The slip has been properly filled up.

· The title of the account and its number.

· The amount in figure and in words is same.

· Instrument signed by the depositor.

· Date of the instrument.

After checking all these things the teller will accept cash, cheque, draft, pay order etc. against deposit sleep. The teller will place the cash in the cash drawer according to denominations. The teller will place signature and affix “ cash receipt, rubber seal” and record in the cash received register book against the account number. At the end of this procedure, the cash officer passes the deposit slip to the computer section for posting purpose and returns the customer’s copy.

Date Particulars Dr.(Tk.) Cr.(Tk.)
xxxx Cash A/C Dr.

Customer’s A/C Cr.

xxxxx xxxxx Cash Payment Procedures:


In order to safe guard the position the playing banker has to observe the following precaution before honoring a cheque:

· A cheque must be looked whether it is an opened or closed cheque.

· The paying officer should see whether the cheque is drawn on his /her branch.

· He must see if the cheque is post dated or pre dated. A letter must not pay any post-dated cheque.

· The officer must carefully see the apparent tenor of the cheque. If it is mutilated or materially altered then the officer must not honor it.

· The officer must compare the signature of the cheque with the signature on the specimen card.

· The officer must verify the regularity of the endorsement.

· The officer may allow overdue against a cheque if prior arrangement is done with the bank.

· Rules for Passing a Cheque:

In order to enable the branches to facilitate their day-to-day transaction smoothly/ efficiently/ accurately, the following schedule of Power for passing of Cheques/ Instrument signature of vouchers shall come into force with immediate effect:

  • An authorized officer shall pass cheque for less than TK. 10,000.00 singly after proper supervision in computer print out.
  • Cheques for TK. 10,000.00 & above but below TK. 50,000.00 shall be passed jointly by any two authorized officers after proper supervision by any one officer in the computer printer out. He will however also ensure that no fictitious/ wrong credit in the account has been posted on the day by referring to credit vouchers of the day.
  • Cheques for TK. 50,000.00 & above shall be passed under joint signatures of two officers, one of whom must be Manager of the branch. The procedures regarding supervision of cheque as at (2) above must however be followed.
  • All suspense’s A/C (Debit) vouchers, Sundry Deposit (Debit) vouchers, Credit A/C Debit Vouchers, Expenditure A/C vouchers must be signed by the incumbent in-charge of the branch with any other authorized officer. As at the close of Business of the day all transactions (both debit & credit) shall be checked by referring to computer print out and relative cheque/ vouchers.

Accounting treatment:

Date Particulars Dr. Cr.
xxxx Customer’s A/C Dr.

Cash A/C Cr.

xxxxx xxxxx

A part from the above it will also be ensured that the total amount of debit & credit totaling to Current A/C, Saving, STD & Term Deposit corresponds with the total of cash receipt/ payment, transfer clearing (both outward and inward).

v Dishonor of Cheque:

If the cheque is dishonored, NCC Bank Limited sends a memorandum (Cheque return memo) to the customer stating the reason in the following way,

  • Refer to drawer;
  • Not arranged for;
  • Effects not cleared & may be presented again;
  • Exceeds arrangements;
  • Full cover not received;
  • Payment stopped by drawer;
  • Payee’s endorsement irregular/ required;
  • Payee’s endorsement irregular, require Bank’s confirmation;
  • Drawer’s signature differs/ required;
  • Alterations in date/ figures/ words require drawer’s full signature;
  • Cheque is post dated/ out of date/ mutilated;
  • Amount in words and figures differs;
  • Crossed cheque must be presented through a bank;
  • Clearing stamp required/ requires cancellation;
  • Addition to the discharge of Bank should be authenticated;
  • Cheque crossed” Account Payee Only”
  • Collecting Bank’s discharge irregular/ required.

If the cheque is dishonored due to Insufficiency of funds than NCC Bank Limited charges TK. 25/= as penalty.


Remittance is another significant part of the general banking. The bank receives and transfers various types of bills through the remittance within the country. Through timely and effective remittance a bank can earn substantial amount of income. Telegraph transfer can do remittance, mail transfer, traveler’s cheque, drafts, and cheque. There are two steps of remittance:

  • Inland Remittance:

By using ways, we can do it. When one bank sends these T.T, M.T, T.C or cheque to another bank than it will be called inland remittance. It is done within the country from one bank to another.

  • Foreign Remittance:

When a bank got this T.T, M.T, T.C, and cheque from outside bank, which is not situated in the home country than it will be called foreign remittance. Using these methods also has done it.

  • Parties to Remittance:

1. Remitter/ Purchaser,

2. Drawer/ Issuing Branch

3. Drawee/ Paying branch

4. Payee

  • Advantages/ purposes:
  • It facilities transfer of money from one place to another;
  • Removes the risk of carrying cash physically;
  • Minimizes the cost of sending money from one place to another;
  • Offers maximum convenience for transferring amounts;
  • Increases the business of a bank.
  • Types of Remittances:

Bank has a wide network of branches allover the country and offer various kinds of remittance facilities to the public. The main instruments sued by the EXIM Bank of remittance of funds are:

  • Payment Order (PO)
  • Demand Draft (DD)
  • Telegraphic Transfer (TT) Payment Order (PO)

An instrument is used to remit fund within a local area, i.e., within a certain clearinghouse area. For Example, if we want to remit fund from one place of Dhaka to another place of Dhaka we generally use payment order.

Accounting treatment: PO by Cash

Date Particulars Dr.(Tk.) Cr.(Tk.)
Xxxx Cash A/C Dr.

Bill payable (PO) Cr.

PO commission Cr.

xxxx xxxx


Account treatment: PO by Cheque

Date Particulars Dr.(Tk) Cr.(Tk)
Xxxx Cheque(A/C. No)A/C Dr.

Bill payable (PO) Cr.

PO commission Cr.

xxxx xxxx


NCC Bank Limited charges different amount of commission based on payment order amount. The bank charge for pay order are given in the following chart:

Total amount of PO Commission/Charge in TK.
Up to Tk.10,000 Tk.15/-
Tk.10,001- Tk.1,00,000 Tk.25/-
Tk.1,00,001 – Tk.5,00,000 Tk.50/-
Tk.5,00,000 and Above Tk.100/- Demand Draft (DD)

It is an instrument that is drawn on one banker office to another, or other banker’s branch to pay certain sum of money to the named person. It is generally used to remit fund from one corner of the country to another. For, Example: if we want to remit fund from Dhaka to Chittagong. We use DD. DD is very much popular instrument for remitting money from one corner of the country to another. Commission for DD is 0.15% of the principal amount.

  • Different between Pay Order and Demand Draft:

There are some difference between pay order and demand draft, which are:

  • In case of Demand Draft, both the payer and payee need to accounts. But there is
    • no certain rule for pay order.
  • PO is used in the same clearing area, DD is used for all kinds. DD cannot be done in the same clearing area.
  • DD is drawn on a certain bank office. However, there is no certain rule for PO. Telegraphic Transfer (TT):

Some times the remitter of the fund wants that money to be available to the remitter immediately in that case bankers are requested to remit the fund telegraphically. Here the remitter bears the additional charge for telex/telephone. Charge for TT is 0.15% of the principle amount and the additional charge for telex/telephone is Tk.50/-. In case of TT both the parties must have account.

Accounting treatment: TT

Date Particulars Dr.(TK.) Cr.(TK.)
xxxx Cash A/C Dr.

TT A/C Cr.

TT commission A/C Cr.

TT charge A/C Cr.

xxxxx xxxxx




For safety and security in financial transaction people use financial instrument like DD, PO, Cheque etc. commercial bank’s is to collect these financial instruments on behalf of their customer. The process that the banks use is known as clearing and collection.

The main function of this section is to collect instrument on behalf of the customers through Bangladesh Bank Clearing House, Outside bank clearing (OBC), Inter Branch Clearing (IBC), upon the receipt of the instruments this section examines the following things:

  • Whether the paying bank within the Dhaka city.
  • Whether the paying bank outside the Dhaka city.
  • Whether the paying bank is their own branch.


The following procedures are taken for collection,


v Essential things for clearing the instruments:

There are three essential things required for clearing the instruments:

1. Crossing seal.

2. Endorsement seal.

3. Clearing seal

  • Clearing:

According to the Article 37(2) of Bangladesh Bank Order 1972, the banks, which are the member of the clearinghouse, called as Scheduled Banks. The scheduled banks clear the Cheques drawn upon one another through the clearinghouse. This is an arrangement by the central bank where everyday the representative of the member banks gathers to clear the Cheques. Banks for credit of the proceeds to the customer’s accounts accept Cheques and other similar instruments. The bank receives many such instruments during the day from account holders. Many of these instruments are drawn payable at other banks. If they were to present at he, drawer banks to collect the proceeds it would be necessary to employ many messengers for the purpose. Similarly there would be many Cheques drawn on this the messengers of other banks would present bank and then at the counter. 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 representative of all the banks meeting at a specified time, for exchanging the instruments and arriving at the net position regarding receipt or payment.

The place where the banks meet and settle their dues are called the Clearinghouse. The clearinghouse sits for two times a working day. The members submit the climbable Cheques in the respective desks of the banks and vice-versa. Consequently the debit and credit entries are given. At the debit summation and the credit summation are calculated. Then the banks clear the balances through the cheque of Bangladesh Bank. The dishonored Cheques are sorted and returned with return memo.


This is a very much crucial department for each branch of a commercial bank. Records of all the transactions of every department are kept here as well with other respective branches. Accounting department verifies all financial amounts and contents of transactions. If any discrepancy arises regarding any transaction this, depart report to the concerned department. Tasks of account department:

Accounts department plays a vital role in commercial banking. In private banking sector accounts department of NCC Bank Limited, performs its take property. The activities of account section are as follows:

· Record all transaction in the Cashbook.

· Record all transaction in general and subsidiary ledger.

· Prepare daily fund function, weekly position, periodic statement of affairs etc.

· Prepare necessary statement for reporting purpose.

· Pay all expenditure on behalf of the branch.

· Make salary statement and pay salary.

· Branch to branch fund remittance and support for accounting treatment.

· Budgeting for branch.

· Make charges for different types of duties. Closing of an Account:

The closing of an account may happen,

  • If the customer is desirous to close the account.
  • If NCC Bank Limited finds that the account is inoperative for a long duration.
  • If the court on NCC Bank Limited issues garnishee, order.

To close the account the Chequebook is to be returned to the bank. NCC Bank Limited takes all the charges by debiting the account and the remaining balance is then paid to the customer. Necessary entries are given to the account closing register and computer.


Other product and services offered by EXIM Bank Ltd. are as follows:

  • Locker services:

The locker services of the NCC Bank Limited with a view to expanding services to the clients, for safe keeping of Jewellery, valuables, documents etc. Customers can withdraw their personal effects in a convenient time .It is given to strict privacy that even bank officials are not permitted to know what types of item the customer is putting inside the locker.

  • Grameen Phone Bills Collection:

NCC Bank Limited made an agreement with Grameen phone to receive the Grameen phone bills.

3.2 Credit Operations:

Credit operations is one of the significant schemes of the NCC Bank Limited. It contributes a huge portion of income in the NCC Bank Limited total revenue. It provides different types of loan to its borrowers as a lender. The bank operates advance facilities through different branches but the entire loan sanction procedure is controlled and monitored by Head Office.

Certain terms and condition are followed when sanctioned to the borrowers. Now credit operations is discussed in detail as follows:


The NCC Bank Limited is a new generation Bank. It is committed to provide high quality financial services/products to the growth of G.D.P. of the country through stimulating trade & commerce, accelerating the pace of industrialization, boosting up export, creating employment opportunity for the educated youth, poverty alleviation, raising standard of living of limited income group and over all sustainable socio-economic development of the country.

In achieving the affaire said objectives of the Bank, Credit Operation of the Bank is of paramount importance as the greatest share of total revenue of the Bank is generated from it, maximum risk is centered in it and even the very existence of Bank depends on prudent management of its credit port-folio. The failure of a commercial Bank is usually associated with the problem in credit portfolio and is less often the result of shrinkage in the value of other assets. As such, credit portfolio not only features dominant in the assets structure of the Bank, it is critically important to the success of the Bank also.

To provide a broad guide line for the Credit Operation towards achieving the objectives of the Bank, for efficient and profitable deployment of its mobilized resources and to administer the Credit port-folio in the most efficient way, a clearly defined, well planned, comprehensive and appropriate Credit policy and control guidelines of the Bank is a pre-requisite.

In view of the above, this Credit Policy and Control Guidelines of the Bank has been prepared which is subject to amendment, revision, re-adjustment and refinement from time to time as may be warranted by the change of circumstances due to passage of time to suit the requirement of the Bank.

The purpose of this policy statement, which replaces all previous ones, is to set out the credit policies of the Board of Directors. The policies are described under the following headings: –

· Credit Principles

· Global Credit port-folio limits

· Types of Credit activities

· Credit administration

· Credit approval


The Following are the principal to be adopted for lending authority, approval, monitoring and control on a basis consistent with the global operational objectives and business strategies of the Bank.

I. General:

The Bank shall provide suitable credit services and products for the markets in which it operates. Loans and advances shall normally be financed from customers’ deposits and not out of temporary funds or borrowing from other Banks.

Credit will be allowed in a manner, which will in no way compromise the Bank’s standards of excellence and to customers who will complement such standards.

All Credit extension must comply with the requirements of Bank’s Memorandum & Articles of Association, Banking Companies Act 1991 as amended from time to time, Bangladesh Bank’s instruction & other applicable rules & regulations.

II. Structural:

The authority structure for extension of Credit should enable effective adaptation to changes in the economic, technological, regulatory and competitive environment within which the Bank operates.

III. Performance:

The Conduct and administration of the loan portfolio should contribute, within defined risk Limitation, to the Bank’s achievement of profitable growth and superior return on the capital of the Bank.

Credit advancement shall focus on the development and enhancement of customer relationship and shall be measured based on the total yield for each relationship with a customer (on a global basis), though individual transaction should also be profitable.

Credit facilities will be extended to those companies/ persons, who can make best use of them, thus helping to maximize our profit as well as economics growth of the country. To ensure achievement of this objective we will base our lending decision mainly on the borrower’s ability to repay.

If credit facilities are granted on a transaction/one-off basis, the yield from the facility should be commensurate with the risk.

IV. Loan pricing:

Interest on various lending categories will depend on the level of risk and type of security offered. It should be borne in mind that rate of interest is the reflection of risk the transaction. The higher is the risk, the higher is the interest rate.

Interest may be reviewed at least once in 6 month and more often when appropriate. Fixed interest rate should be discouraged. Preferable all rates should vary with cost of funds fluctuation based on a spread for profit.

Effective yield can be enhanced to the extent thee borrower are required to maintain deposits to support borrowing activities. Commitment fee and Service charges should further improve yield where possible. All pricing of loans should however have relevance with the market condition and be approved by the executive committee/ Managing Director from time the time.

V. Administration/ Monitoring:

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