Overall banking system of NCC Bank Ltd

View With Charts And Images
“Overall banking system of NCC Bank Ltd.”

The prime objective of the report is to know the existing banking business in NCC Bank Ltd. The core objectives of the study are as follows:

• To get real life experience from the organization
• To gather knowledge about the functions and transactions of different departments of the NCC bank.
• To know the organizational framework of the bank.
• To highlight the general banking system.

• To highlight the loans and advances are provided to the borrowers.

• To acquire knowledge about the foreign exchange system of the bank.

• To analyze the growth of deposits in the bank.

• To analyze the growth of advances in the bank.

• To analyze the growth of investment in the bank.


The report is descriptive in nature. In order to make the report more meaningful and presentable, two kinds of data sources and information have been used.

• Primary sources:

Among the primary sources, the main sources are:
1. Face to face conversation with the respective personnel.
2. Direct interaction with the customers.
3. Practical work exposures on different desks of the branch covered.

• Secondary sources:

1. Annual reports of NCCBL.
2. Printed forms and documents supplied by NCCBL.
3. Booklets of international division of NCCBL.
4. Different publications and journals regarding banking activities and policies.
5. Auditor’s reports of NCCBL.
6. Website of NCCBL (www.nccbank.com.bd)


1.5 Work Schedule

My work schedule was planned by rotation
Name of the Department Total Days
• Account Opening Department 5 days
• Credit & Loan Department 10 days
• Foreign Trade (Import) 9 days
• Foreign Trade (Export) 8 days
• Foreign Remittance Department 5 days
• Local Remittance Department 10 days
• Cash & Clearing 12days
• Financial Control & Accounts 10days
• Report Preparation 20 days

There are some limitations in our study. We faced some problems during the study, which we are mentioning them as below-
1. Lack of time:
The time period of this study is very short. We had only 8 weeks in my hand to complete this report, which was not enough. So I could not go in depth of the study. Most of the times, the officials were busy and were not able to give me much time.

2. Insufficient data:
Some desired information could not be collected due to confidentiality of business.
3. Lack of monitory support
Few officers sometime were busy in their job. Sometime they didn’t want to supervise us out of their official work.
4. Other limitations:
As we are newcomers, there is a lack of previous experience in this concern. And many practical matters have been written from our own observation that may vary from person to person.

Overview of the NCC Bank
National Credit and Commerce Bank Ltd. bears a unique history of its own. The organization started its journey in the financial sector of the country as an investment company back in 25th November 1985. The aim of the company is to mobilize resources from within and invest them in such way so as to develop country’s Industrial and Trade Sector and playing a catalyst role in the formation of capital market as well. Its membership with the browse helped the company to a great extent in this regard. National Credit and commerce Bank limited was incorporated in Bangladesh as banking company under the Companies Act 1994. The Bank commenced its Banking business with sixteen Branches from 17 May, 1993. The Bank is listed with Dhaka Stock Exchange Limited and Chittagong Stock Exchange Limited as a public quoted company for its shares. The company raised its authorized capitals to Tk.750 millions as per guidelines set out by the Bangladesh Bank. The paid up capital was fixed at tk.390 million of which 50% the sponsor and the balance 50% of public have paid up i.e. tk.195 million in cash. The sponsors of the new bank consisted of 26 (Twenty six) Members, who comprised the first Board of Directors.
The principal place of business is the registered office at 7-8, Motijheel commercial area, Dhaka 1000. It has 68 branches all over the Bangladesh and the bank has no overseas branch as at 2010. Recent news is that, 22 March 2010, NCCBL’s new branch was opened at Narayongonj & after that another branch was opened at Kalurghat, Chittagong. There will be opened 25 ATM branches & there are already 9 Brokerage House it carries out all banking activities through its branches in Bangladesh.
Since its inception NCC Bank Ltd. has acquired commendable reputation by providing sincere personalized service to its customers in a technology based environment.
The Bank has set up a new standard in financing in the Industrial, Trade and Foreign exchange business. Its various deposit & credit products have
Also attracted the clients-both corporate and individuals who feel comfort in doing business with the Bank.

Anticipating business solutions required by all our customers everywhere and innovatively supplying them beyond expectation
Setting industry benchmarks of world class standard in delivering customer value through our comprehensive product range, customer service and all our activities
Building an exciting team-based working environment that will attract, develop and retain employees of exceptional ability who help celebrate the success of our business, of our customers and of national development
Maintaining the highest ethical standards and a community responsibility worthy of a leading corporate citizen
Continuously improving productivity and profitability, and thereby enhancing shareholders value
To be in thee forefront of national development by providing all the customers inspirational strength, dependable support and the most comprehensive range of business solutions, through our team of professionals who work passionately to be outstanding in everything we do.

Value Pillars of NCC Bank that are central to our core ideologies and that must always be reflected in everything we do:
• We are aggressive in business and self-driven.
• We empower people, create leaders and drive change.
• We treat people with respect and dignity.
• We are personally accountable for delivering on commitments to build high-trust relationship with customers and to ensure customer delight.
• We focus on managing risks and costs in order to be doubly profitable.
• We act in ways that reflect the highest standards of integrity

NCC Bank Limited opened its 65th branch with online facility at Progati Soroni, Badda on 26 January 2010. Vice Chairman of the Bank Lion M. Harunur Rashid MP formally inaugurated the branch as chief guest. Managing Director & CEO Mohammed Nurul Amin presided over the function. Mohammed Nurul Amin, Managing Director & CEO of the Bank in his speech citing various schemes and services of NCC Bank said that the bank would open more branches, SME Centers and branches of Brokerage House in different places of the country in this year. Stressing on social responsibility of the Bank, he said that Bank is not only a profit earning organization but also working for social welfare, which will continue in future.
The bank has by now a network of 17 branches strategically located in different cities. All the branches are functioning in computerized environment and integrated through

The management of the NCC Bank Ltd. is vested on Board of Directors subject to overall supervision on overall policy matter by the board. The power of general supervision and control of the affairs of the bank is exercised by the president the Managing Director of the bank, who is the Chief Executive. The number of directors in the Board is 13, which is within the maximum limit imposed by Bangladesh Bank. The position of the Chairman of the Board and CEO are filled by different individuals.
The Chairman and the Managing Director lead the management team. When a close case of consultation at a greater fathom is required, such issues are often referred to the Executive Committee.
The Bank always tries to ensure recruiting quality manpower to deliver personalized service to its clients. Training institute is engaged in imparting training and organization workshop, seminar on issues having contemporary relevance on regular basis. In the last year 2009, Bank’s training institute has arranged total number of 44 training programs, workshop, seminar, etc. on wide range of topics where large numbers of Officers/ Executives attended. In whole bank there around 2000 staffs. Recently a computer lab has been established in the institute to train up the employees with basic computer knowledge.


Number of Employees at 31 December 2009 was 1664; (2008:1,531) who were in receipt of remuneration for that year which in the aggregate was not less than Tk. 36,000 per annum and those employed for a part of that year who were also in receipt of remuneration of not less than Tk.3,000 per month.

It would be very difficult to control the system effectively, if the jobs are not organized considering their interrelationship and are not allocated in a particular department. If the departments are not fitted for the particular works there would be haphazard situation and the performance of a particular department would not be measured. NCC Bank Limited has done this work very well. There are –

• Human resource Department.
• Financial and Administration Department.
• Monitoring and Inspection Department.
• Marketing.
• Personal Relation Department.
• Merchant Banking and Investment banking.
• Treasury Division
• International Division.
• General Services Division.
• Computer and Information Technology Department.
• Credit Division.
• Corporate Affairs Division.
NCC Bank Limited is a commercial bank, which has to abide by the rules and regulations, prescribed by Bangladesh Bank for scheduled commercial banks. The functions of the bank cover a wide rang of banking and financial activities to individuals firms, corporate bodies and other multinational genies. Present operation areas as follow:
2.9.1. DEPOSIT:
All kinds of deposits like savings, current, short-term, fixed, certificate of deposits are accepted from resident and non-resident customer. Non-resident customers can deposit their money in foreign currency account both in convertible and non-convertible account
2.9.2. CREDIT:
Banks loan greatly emphasized that we can call this as the “Heart” of the banking, because they are a major source of bank income. Loans are very important for country’s economy as a whole because the expansion and contraction of bank loan affect the level of business activity through their effect o the nation money supply. The extended credit facilities to different sector to diversify its credit portfolio in compliance with credit policies of Bangladesh Bank as given below:
Industrial, housing, transport, and contract work, working capital for traders, manufacturing processing plants and export oriented industries, and other business.
NCC Bank finance import by way of opening irrevocable documentary letter of credit granting post import finance such as BLC, LIM, and Advance against T/R etc.
Pre-shipment and post-shipment/export Finance by way of negotiate/purchase discount of export bills, packing credit, back-to -back L/C etc.
Issuing of letter of guarantee (L/G), shipping guaranties, indemnities, performance guaranties, Bid Bond, Stand by L/C etc.

NCC Bank remits money of the clients both within the country and out side the country by telex transfer, telephone transfer, mail transfer, pay order, demand drafts etc. It also receives remittance from Middle Eastern and Western countries.

NCC Bank provides safe deposit, locker services and other miscellaneous services for safety of valuables of the customers. It also provides agency services and acts as trustee for the customers.
To render better services to its customers, NCC Bank limited, introduce online computer systems within the year of its inspection and all the branches of NCC bank are equipped with telex services. NCC bank has also introduced ATM services for 24 hours a day in collaboration with.
The Bank has been taken all possible steps to introduce technology based banking products and services to the customers. In line with this, Bank’s IT Division has already trying to develop all branches in on-line Banking facility, that’s why, they established software “Flora banking System”.


Deposit Products-
Savings Bank Deposit A/C
Short Term Deposit A/
Term Deposit A/C
Premium Term Deposit A/C
Instant Earnings Term Deposit
Special Savings Schmes
Special Fixed Deposit Scheme
Resident Foreign Current Deposit
Non Resident Foreign Current Deposit
Money Double Program

ATM card
Credit Card (Local, International & Dual)
Remittance Products-
Special Interest Rate on Savings and Term Deposits
Wage Earners Welfare Deposit Pension Scheme
Loans for Real Estate (Land Purchase and House Construction/Renovation)
Advance against Regular Remittance
Loans and Advance Products-
Working Capital Financing
Commercial and Trade Financing
Long Term (Capital) Financing
House Building Financing
Retail and Consumer Financing
SME Financing
Agricultural Financing
Import and Export Financing

• Customer Service:
The Bank is committed to offer excellent customer service to remain ahead of competition. With the liberalization of banking & financial industry & increasing customer knowledge & sophistication competitive pricing of products is no longer sufficient in capturing large market share. New product development, know your client program & redesign of the existing products were the strategies adopted by the Bank to serve the customer differently from the competitors.
Key to building meaningful customer relationship is to have well managed system to address and respond to all customers complain in timely manner. Complaint Cell at Head Office maintains all complains and feedback & provide timely resolution of such complain.

• New Product & Services:
The bank has its concentration for new product and services development for satisfying its customer and increasing its customer base. The bank firmly believes that technology based product and services will play significant role in the performance of the bank as people are getting more conscious about their service quality.
They prefer now faster service with least cost. For delivering faster service, the bank has introduced diversified technical ways that are stated below : –
? Online Banking Services,
? L/C Delivery Services,
? Locker Services,
? Merchant Banking Services,
? ATM Service,
? SWIFT Services etc.

Bank’s performance may be termed as satisfactory in respect of Deposit mobilization and profit earning. During the year under review the Bank could enhance quality of its assets and recovered it’s over dues from default borrowers. At the end of 2009, bank’s operating profit stood at tk. 3,137.70 million as against tk. 2,363.49 million of the year 2009.

The Authorized Capital of the bank remained at tk. 5,000.00 million in 2009 as before but Paid- up capital rose to tk. 2,284.90 million as against tk. 1,757.62 million of 2008. The reserved fund increased to tk. 4,371.62 million in 2009 compare to the last year’s (2008) tk. 2,863.63 million.

• Deposit:
As on 31st December 2009, bank’s total deposit stood at tk. 53,900.15 million which is reflecting 14.91% growth over the previous year’s figure of tk. 46,904.66 million.

Deposit mix over the last 05 years appended in the chart below:

• Loan and Advances:
The bank has its own credit policy prepared in conformity with the existing laws and banking norms. The bank sees that investment is made to the sectors yielding significant income. It has both conventional and various credit schemes including Small Business Loan, Housing loan, Festival loan that help in catering to the needs of a large number of customers with diversified sectors and ensures steady earning for the bank.

Loan & advances position over the last 05 years appended in the chart below:

The bank has separate SME wing, Leasing Unit and Syndicated Loan Unit contributing to the income at an increasing trend. In 2009 total advance stood at tk. 50387.68 million. Deposit advance ratio was 93.48% in 2009.

• Investment:
Investment figure of the bank as on 31st December, 2009 stood at tk. 9,671.53 million as against tk. 6,526.82 million of the previous year i.e. 2008 increase being 48.18%.

Investment growth over the last 05 years appended in the chart below:

Since the rate of return in government Treasury bill is good, the bank emphasized on making investment in this bill to utilize liquid fund on temporary basis, which helps maintaining the statutory liquidity equipment successfully.

• Foreign Exchange Business:
The bank has a wide network of correspondence that plays vital role in facilitating its international trade. Like previous years, Foreign Exchange Business played important role to profitability of the bank in 2009.

The foreign trade position over the last 05 years appended in the chart below:

During 2009, the bank handled export & import business to the tune of tk. 11,903.72 million & tk. 33,078.44 million respectively. Bank’s AD License Branches were 20 in 2009; efforts are being taken to increase this in 2010.

In 2009, the bank consolidated its remittance business by taking timely & customer-friendly steps both at home & abroad. In 2009, total remittance received by the bank was more than BDT 13,391.51 million registering 10.69% increases over last year’s figure of BDT 12,098 million.

• Credit Rating of the Bank:

As per the BPRD instruction circular no. 6 dated July 5, 2006, the bank has done its credit rating by the Credit Rating Agency of Bangladesh (CRAB) Limited based on the financial statements dated December 2008, the following rating has been awarded:

Date of Rating
Long Term Short Term
Entity Rating
29.06.2009 A2 ST2

• Treasury:

Through dealing room operations, the bank earned Tk. 822.14 million during 2009 against Tk. 311.07 million in 2008.


Five Years Financial Highlights

Taka in Million (where applicable)
2005 2006 2007 2008 2009
Authorized capital 2500.00 2500.00 2500.00 2500.00 5000.00
Paid up capital 975.04 1209.79 1352.01 1757.62 2284.90
Reserve fund & other reserve 884.90 – – – –
Equity Fund 1859.94 2417.37 3326.52 4621.25 6656.52
Deposits 21478.22 28147.34 34901.77 46904.66 53900.15
Loan & Advances 20533.13 24678.36 32687.75 46332.69 50387.68
Investments 3010.45 3552.08 6266.62 6526.82 9671.53
Import Business 16296.30 17646.80 28779.21 38796.88 33078.44
Export Business 7776.30 8557.00 9577.92 12522.04 11903.72
Operating Income 2932.00 3913.19 5269.03 7417.64 9333.03
Operating Expenses 1913.66 2645.62 3488.78 5054.15 6195.33
Operating Profits 1018.34 1267.57 1780.25 2363.49 3137.70
Profit before Tax 687.60 1056.51 1356.32 1788.96 2686.59
Profit after Tax 352.08 479.22 677.18 882.28 1719.50
Retained Profit 10.31 7.83 8.13 5.34 46.47
Total Assets (excluding contra) 26114.13 31615.01 42522.85 57365.52 65937.49
Fixed Assets 308.14 353.71 522.00 775.31 849.10
Number of Branches 41 48 53 57 65
Numbers of employees 1000 1118 1230 1400 1496
Earning Per Share(EPS) 36.11 39.88 50.09 50.20 75.26
Dividend: Cash (%) 10.00 10.00
Bonus (%) 10.00 12.50 30.00 30.00 47.00
Return on Equity (ROE) (%) 18.93 19.82 20.23 21.76 28.49
Return on Assets (ROA) (%) 1.35 1.47 1.59 1.54 2.61
Capital Adequacy Ratio 9.02 9.78 10.61 10.61 13.55
Non Performing Loans as % of Total Advances 4.82 4.95 4.17 4.14 2.84
Volume of non Performing Loans 981.54 1212.26 1353.31 1902.58 1420.57
Amount of Provision against classified Loans 405.75 523.58 644.11 912.90 720.22
Amount of provision against Unclassified Loans 202.14 282.09 388.78 456.07 509.67
Amount of provision against off-balance sheet exposures – – 51.69 109.41 111.93
Advance/ Deposits Ratio (%) 95.60% 87.68% 93.66% 98.78% 93.48%

Overall Banking System

The Bank which Supervises and controls the activities of all other banks is called Central Bank. It also issues money, controls credit in the country and acts as a representative and financial advisor to the government.
Central Bank: The important functions which a Central Bank performs are discussed below:

1. Issue of Not es:
The central bank has the sole authority of issuing paper note in a country. The central bank issues the paper money and maintains stability of the monetary system in the country. The money issued by the central bank is called “legal tender” the responsibility of keeping its internal and external values stable has been given to the central bank.

2. Government’s Bank:
The central bank acts as the banker to the government. It collects money due to the government from different sources and makes payments of debts on behalf of the government. It keeps accounts of the internal and external loans of the government and plays the role in its management in monitory affairs.

3. The Central bank acts as banker to other commercial banks:
The commercial banks are to keep a certain percentage of their deposits with the central bank. The central bank by raising or lowering this percentage can control to a great extent the capacity of commercial banks to advance credit.

4. Credit Control:
One of the major functions of the central bank is credit control. The loans given by the commercial banks increase the supply of money in the country. If the total supply of money increases because of excessive advance made by the commercial banks, there may be inflation in the country. The central bank adopts different credit control policies with a view to controlling inflation and deflation.

5. Lender of the Resort:
The central bank functions as a lender of the last resort. When the commercial banks face financial crisis and fail to obtain loans from other source, they approach the central bank for loans. In this situation, the commercial banks face financial crisis, so the central bank is called the tender of the last report.

6. Clearing House:
The central bank acts as a cleaning hose for the settlement of mutual debts and credits of the commercial banks. In the day to day business transactions, cheques are used. This creates debits and credits among the commercial banks. The central bank settles the inter bank debits and credits through cheques.

7. Maintenance of foreign exchange rate:
The central bank tries to maintain the stability of exchange rate of the domestic currency in terms of foreign currencies. For this purpose it purchases and sells foreign currencies.

8. Development Activities:
The Central bank plays an important role in the economic development of a country. Collection of important data, undertaking research for economic development and giving assistance in making budget are the functions of central bank.

9. Other Functions:
In addition to the above functions, the central bank performs many other functions. For example, the central bank of every country functions as the store house of the international currencies and the representative of the World Bank. The central bank preserves gold, silver and other valuable metals. It also preserves the foreign currencies earned.
Commercial banks are the heart of trade and commerce. The functions of a commercial bank are discussed below:

1. Receiving deposits:

One of the most important functions of a commercial bank is to receive deposits from the public. Generally deposits of a bank are three types, (a) current deposits (b) saving deposits and (c) fixed deposits. The deposit which can be with drawn at any time by the by the depositor is called current deposit. Bank does not pay any interest on this deposit. Money from the savings account can be withdrawn once or twice in a week. The banks pay small interest to depositor for this deposit. The deposits which can be withdrawn after a specified period of time is called fixed deposit. The depositors of fixed deposits are paid interest at a high rate.

2. Giving Loans:

The Second major function of the commercial bank is to give loans. It keeps a certain percentage of the deposits received from the public and lends the rest to businessmen and industrialists. Generally, the commercial banks keep valuable property as mortgage against these loans.

3. Creation of medium of exchange:

One of the important functions of commercial banks is to create medium of exchange. Now a- days the power of issuing notes lies alone with the Central Bank. The commercial banks issue cheque, bank darfts, bonds, traveler’s cheques act as medium of exchange.

4. Rediscounting bond:

Rediscounting bonds and bills of exchange is another important function of a commercial bank. The owner of the bond can get cash money before the maturity of the bond by rediscounting it. The banks earn profit out of the scheme.

5. Helping Internal and Foreign Trades:

The commercial banks help the buyers and sellers in making payment in the internal and foreign trades. The majority of tasks of foreign trade are done though the commercial banks.

6. Transfer of money:

Commercial banks transfer money rapidly and safely from one place to another. The banks issue cheque, bank drafts, pay order, traveler’s cheques and make telegraphic transfers and thus help us in transferring money from one place to another.

7. Other Function:

Besides the functions mentioned above, a commercial bank performs other activities as agents for the benefit of its clients. Out of these the following may be mentioned as remarkable:

a) It purchases and sells bonds, stocks, shares and debentures as representative of the customer.
b) It makes payments of house rent, income tax, Insurance Premium and telephone and electric bills on be half of the clients.
c) It makes payments of house rent, income tax, insurance premium and telephone and electric bills on be half of the clients.
d) It keeps their valuable ornaments, documents etc. as safe deposits.
Banks are financial intermediary institutions. The core is to mobilize the financial surplus of saver in the form of deposits & allocate these savings to the credit worthy borrowers of different sector of economy in the form of loans & advances. The advance of the intermediary functions between the savers & investors would certainly in the lower level of savings & investment & thus lower the economic growth. There is a well recognized maxim that economize development of a country is indispensible. That development of the financial intermediaries & instrument (both in case of deposit & advance) will lead to the development of the economy of a country.
After liberation, the Bangladesh Government of the newly born country being recognized as Bangladesh in the world society made the entire existing Bank’s, Bima, Financial Institutions, and Nationalized Banks except three Foreign Banks by an Ordinance named as “Bangladesh Bank Ordinance Dated the 26th March, 1972.”

According to the President Ordinance 127 of the 6th of December, 1972 State Bank of Pakistan of East Bengal is considered as “Bangladesh Bank” and also got acceptance as a ‘Central Bank of Bangladesh’. Under the reformation plan of banking system, the following Banks were renamed which were before liberation period:

• Janata Bank Limited
• Pubali Bank Limited
• Rupali Bank Limited
• Uttara Bank Limited
• Agrani Bank Limited
• Bangladesh Silpa Bank
• Sonali Bank Limited
A number of foreign private commercial bank which were operating since earlier days were the only commercial banks in the private sector. These foreign private banks with limited branch network could only meet a small portion of the financial needs of the private sector in the country. In the early eighties with liberalization of the economy as also for catering to the credit needs of the emerging private sector a number of commercial banks were allowed in the private sector. Consequently upon the strategy of economic development based on increasing role of the private sector and after a decade long experience of public banking system, following the nationalization of all banks, the government has taken steps to set up commercial banks in the private sector.

Subsequently Government followed a denationalization policy-allowing establishment of banking institution in the private sector and released three nationalized banks in the private sector. They are:

• Uttara Bank Limited
• Rupali Bank Limited
• Pubali Bank Limited

In present time a large number of private banks have been established. According to their commencement of business these private commercial banks are divided into three groups. They are familiar in the 1st Generation, 2nd generation & 3rd Generation

• 1st Generation of Banks (1982-1988)
National Bank Limited, City Bank Limited, United commercial Bank Limited, AB Bank Limited, International Finance Investment and Commerce Bank Ltd, Islamic Bank Bangladesh Limited & Al-Baraka Bank Bangladesh Limited.
• 2nd Generation of Banks (1992-1996)
Eastern Bank Limited, National Credit & commerce Bank Limited, Southeast Bank Limited, Dhaka Bank Limited, Al-Arafah Islamic Bank Limited, Social Investment Bank Limited & Dutch-Bangla Bank Limited etc.
• 3rd Generation Banks (1999 to present)
Mercantile Bank Limited, Standard Bank Limited, One Bank Limited, EXIM Bank limited, Premier Bank limited, Mutual Trust Bank Limited, First Security Bank Limited, Bank Asia Limited, The Trust Bank Limited, Jamuna Bank Limited & BRAC Bank Limited etc


Banks play an important role in economic growth of developing country. Generally, economic development involves investment in various sectors of financial system. The banks collect savings from the people and mobilize saving for investment in industrial project. The investors borrow from banks to finance the projects. Promote the growth rate through the reorientation of loan policy. Special funds are provided to the investors for the completion of projects. The banks provide a guarantee for industrial loan from international agencies. The foreign capital flows to developing countries for investment in projects.

Besides normal banking the banks perform agency services for the client. The banks buy and sell securities, make rent payments, receive subscription funds and collect utility bills for the government departments. Thus these banks save time and energy of busy peoples. Banks arrange foreign exchange for the business transaction with other countries. The facility of foreign currency account has resulted in an increase of foreign exchange reserves. By opening a letter of credit the banks promote foreign trade.

The banks are not simply collecting funds but also serve as a guide to the customer investment of their funds. The policy of banks is an instrument in wide dispersal of credit in country.

We know, the modern banking system plays a critical role in underpinning economic development. Over the last few years the banking world has been undergoing a lot of change due to deregulation, technological innovations, globalization etc. These changes also made revolutionary changes of a country’s economy. Present world is changing rapidly to face the challenging of competitive free market economy. It is well recognized that there is an urgent need for better qualified management & better-trained staff in the dynamic global financial market. Bangladesh is also including in that trend. Banking sector in Bangladesh is facing challenges & also tries to overcome all those challenges though its prospect is bright in the future.

Against the background of Financial Sector Reform Policies in Bangladesh, National Credit and Commerce Bank Ltd. has resulted in great success in all areas of operation with a view to improve the socio-economic development of the country.
Day by day function of this bank also provides some services & facilities which are most equal to an international banking system. It helps the banks to get closer towards the consumers. ATM, Credit card, worldwide correspondence etc are the popular products of this bank which has worldwide demand as well as into the country’s.
For my internship I choose this bank because of its potentiality & fast growing attitudes which make it popular & well acceptable to all within a short period of time.


4.1: The Aspects of General banking
General banking department is the “Heart” of the all-banking activities. It performs the core functions of bank, operates the day to day transactions. It is the storage point for all kinds of transaction of foreign exchange department, loans and advances department & itself. General Banking department generally deals with the following sections:-
• Account Opening Section
• Cash Section
• Bills & Clearing Section
• Remittance Section
• FDR Section
• Accounts section

The relationship between banker and customer begins with the opening of an account by the customer. Opening an account binds the banker and customer into contractual Deposit Account relationship. In fact, all kinds of fraud and forgery start by opening an account. So the bank should take extreme caution in section customers. CURRENT DEPOSIT ACCOUNT:
A current deposit account may be operated in several times during a working day. There is no restriction on the number and the amount of withdraws from a current account and the banker does not allow any interest on the current account.
As the banker is under an obligation to repay these deposits on demand, they called demand liabilities of a bank. To meet such liability the banker keeps sufficient cash
Reserves against such deposit. There are two facilities for the people who open a current account. They are:-
o Over draft facility
o Collection of check transfer of money rendering agency, general utility service.
A person can open a current a/c or any entity. The entity can be a partnership firm, limited company, proprietorship firm, association, clubs etc. For opening a current account of the above, the requirements and steps, which are followed by this branch, are like: –

• Individual Account opening:
There is an individual application form for opening personal current a/c. The person, who wants to open this type of a/c, is said to fulfill the following requirement:
a) Name/ Father’s Name/ Husband’s Name
b) Present and Permanent Address
c) Occupation
d) Mandate in Writing
e) Declaration of Nominee
f) Letter of Introduction
g) Specimen Signature
h) Two copies of passport size photograph
i) Initial deposit of Tk.5000

• Joint-Stock Companies, Association, Clubs etc. Account opening:
In case of opening a current a/c of joint- stock companies, association, clubs etc. the following requirements are said to fulfill:
a) True copies of certificate of incorporation or registration (in case of companies and registered bodies)
b) True copies of certificate of commencement of business (in case of limited company)
c) True copies of memorandum and articles of association (in case of limited company). The rules of regulation by laws (in case of associations, clubs etc.)
d) True copy of resolution of the Board of Directors of Managing committee / Governing Body, regarding conduct of account.
e) Certificate list containing names and signature of the Board of Directors/ Officer Bearers.

• Partnership/ Proprietorship Company Account opening:
To open a current a/c on the name of any partnership or proprietorship company, the following documents are required:

a) Filled up application form stating about the name and address of the firm.

b) Partnership deed

c) Trade License.

d) Two copies of photographs.

e) Endorsement of an a/c holder of the same branch. (for partnership companies).

f) Undertaking / declaration about the partnership is taken by the bank in a white paper (for proprietorship firm)

• Private & Public Limited Company Account opening:imam

The documents are required by the bank to open a current a/c be:
a) Copy of the certificate of incorporation or registration.

b) Copy of the certificate of business.

c) True copy of memorandum of association and articles of association abide by laws.

d) True copy of resolution of the Board of Directors / Managing Committee /Governing Body regarding conduct of the account.

Certificate list containing the names and signature of the Board of Directors / Officer Bearers. In order to open an account, the customer is first of all asked to fill up the application form given from the bank. The bank requires few documents of the client due to the producers, such as proposal for opening an a/c, name and full address (both present and permanent).
Scenarios of current deposit account of NCCBL:
Last five (5) years current deposit of NCCBL as below-

2004 2005 2006 2007 2008
14% 15% 16% 17% 19.1%
Table-1 Annual Report: 2004-2008


In the year 2000 and 2001 NCCBL’s current deposit was 11% but in the year 2002 and 2003 this current deposit decreased because of more competition in the market. Again in the year 2004 they were able to increase their current deposit at 10.03% by using their goodwill, dedication and service to the giant business people. It is also indicates that the NCCBL gain the faith of business people. SAVING DEPOSIT ACCOUNT:

• A saving a/c is meant for the person of the lower and middle classes who wishes to save a part of their income to meet their future needs and intend to earn an income from their saving.

• A saving a/c is meant for the person of the lower and middle classes who wishes to save a part of their income to meet their future needs and intend to earn an income from their saving.

• The entire feature are like CD a/c except some restrictions imposed by the bank.

• The bank offers a reasonable rate of interest.

• The number of withdrawals over period of times is limited. Only two withdrawals are permitted per week. But more than that no interest will be paid on rest of the amount for that month.

• The total amount of one or more withdrawals on any date should not exceed 25% of the balance in the a/c unless 7 days advance notice is given.

Scenarios of Savings Deposit account of NCCBL:

2004 2005 2006 2007 2008
10% 11% 8% 11.5% 13.62%
Table-2 Annual Report: 2004-2008

Figure-02: Saving Deposit

As we see the graph of savings deposits of NCCBL, it is moved up wards year to year, except 2001. In the year 2001 it was 9% of total NCCBL’s deposit, but fallen it down in 2002 at 7%.

Then after this deposit curve rising up wards up to 2005. It indicates individual client or house hold feel secured keeping their money with NCCBL. mention individual client because most of the business client like to operate their business by CD account but individual or house hold prefer to continue their transaction by savings account. Interest rate is another factor of deposit. Present interest rate of savings deposit is @ 6% of NCCBL.

The necessary requirements for opening a saving account:

a) Name
b) Father’s or Husband Name
c) Permanent and Present Address
d) Occupation
e) Special Instruction regarding operation of the a/c
f) Mandate in Writing
g) Declaration of nominee
h) Letter of introduction
i) Specimen signature
j) Two copies of passport size photograph
k) Initial deposit of Tk. 1000
In this, the deposits are supplied with the pass and cheque book for depositing and withdrawal purposes of money for which the banker maintain saving bank a/c opening register. SHORT TERM DEPOSIT:
Special notice a/c which is commonly known as short term deposit a/c will be kept in the short term deposit ledger. The customer should dully sign a/c opening form and specimen signature card.

• Entries Passed:
A deposit slip shall be prepared crediting the STD a/c with the amount of the deposit.
STD a/c (Party)———Cr.

If the amount shall be deposited by check or transfer of a/c, the following entries shall be passed—
Party C/D, S/D a/c———-Dr.
STD a/c——————————–Cr
The a/c opening form shall be pasted in the passing file in numerical order. The credit voucher shall be passed in the STD a/c of the party. In case of letter of authority to debit the STD a/c of the customer, voucher will be prepared and the following entries shall be passed:-
STD a/c (Party)—————Dr.
C/D (Party)————————Cr.

Minimum 7 days notice period is required for withdrawal of any sum of money from STD a/c. Banker is not legally liable to the customer, if the check is dishonored under the following conditions, although the check is properly drawn:
* If the fund is insufficient.
* If the payment is stopped by the drawer.
* If payment is stopped by the court by issuing garnishee order.
* Any competent authority issues Attached order.
* Check is presented after the death of the customer.
* Notice of assignment.
* Check presented after the business/banking hour as declared earlier.
• Letter of Introduction:
This is a letter of certification, from a person, who is a valid customer of that particular branch and maintaining any kind of a/c. usually a customer from other branch is not allowed to be the introducer, but it is permitted. The process of introducing a new client can be done on the form itself. There is a space in the application where the introducer will write his/her a/c no. and sign his/her specimen signature. It always advisable on the part of the banker to allow the prospective customer to open an a/c only with a proper introduction from a responsible person, known to both the parties.
A letter of introduction always protects a banker in the following ways:-
• Protection against fraud.
• Protection against invariant overdraft.
• Protection against undiscouraged bankrupt.
• Protection against negligence under sec. 131 of NI Act.
• Protection against giving incorrect information follow the bank.

• Declaration of Nominee
The person who wants to open an a/c can mention one or two nominee. The application will give a declaration in the space given on the a/c opening form, stating the name and father’s name, age address, relation and percentage of share (if more than one). The a/c holder can change the nominee any time and it will be valid, only after the of the a/c holder.
The applicant will sign on the application and he will be provided with an extra paper where he will sign three or more signatures, which he has to maintain all through the duration of the account.

• Interview At the time of the opening of a new a/c, this concerned branched always takes an interview with prospective customer so as to obviate the chances of preparation of any fraud at the letter stage.

Initial Deposit:
It is always a common practice among the bankers to allow a new customer to open an a/c only in cash and NCC Bank main branch takes Tk.1000 as initial deposit for saving a/c and Tk. 5000 for current a/c.
• Operation Instruction:
The banker should verify some of the important documents, like the Memorandum of Association, Article Association by laws Copy etc. In verification of certain other documents like, trust Deed Probate, Letter of Administration etc. may be needed. Conversant with the provision of special acts, since a banker is to deal with different classes of customers, s/he has to be thoroughly conversant with certain laws.

• Pay in Slip, Checque Book and Pass Book:
The customer is supplied with a pay in slip book to use for depositing cash or checque of bill into a/c. The customer is also supplied with a checque book for drawing money as and when the customer wishes, which normally contains 10
to 50 bank forms. If the customer does not like to have a cheque book, then he/she can make use of withdrawal
Form for withdrawing money. But there is no use of such kind of form in this branch. In addition to the above, a customer is given a passbook, which reflects the customer’s a/c in the banker’s ledger. It usually contains the rules and regulations of the bank and terms and conditions of deposits.

Scenario of Short Term Deposit of NCCBL:

2004 2005 2006 2007 2008
8% 6% 5% 5% 4.57%
Table-3 Annual Report: 2004-2008

If Short Term Deposit is less, better for bank. So, this declining graph is good NCCBL FIXED DEPOSIT ACCOUNTS:
A fixed deposit a/c is repayable after the expiry of a predetermined period fixed by the customer himself. The period varies from three months to five years. The customer may open his/her a/c for different time periods, which may be for three months, six months, one year, two years, three years, four years, five years.
Though FDR is an a/c, it is something different from other a/c. FDR is a long-term deposit. Usually customers are allowed to open this a/c for a certain period. The rate of interest varies in accordance with the terms of deposit. The terms and their rate of interest in NCCBL are as follows:

Category of Deposits Interest Rate Amount Limit
3 months 8.00% Up to 1 lac
6 months 8.25% Above tk.1 lac to below tk.1 Core
FDR for 12 months 8.50% Rate same as above
Note: This configuration active from November 2008, for a short time.
The amount of FDR is payable once at a time. After the term for which the a/c was opened, the FDR gets its maturity. Paying the principle amount plus interest less 10% income tax then fulfills the claim.
• Opening of FDR:
There is a prescribed form for opening FDR. No introducer photograph is required for opening this a/c account. A minimum amount as determined by the head office is required to open such an a/c.
Table-04 Fixed Deposit Interest Rate

Fixed Deposit/Bearer Certificate of Deposit for 1 Month 8%
Fixed Deposit/Bearer Certificate of Deposit for 3 Months 8.25%
Fixed Deposit/Bearer Certificate of Deposit for 6 Months 8.50%
Fixed Deposit/Bearer Certificate of Deposit for 1 Year 8.50%
Fixed Deposit/Bearer Certificate of Deposit for 3 Year and above 9 %
Scenarios of NCCBL Fixed deposit:

Fixed Deposit of NCCBL for 2000-2005 as under-

2004 2005 2006 2007 2008
58% 61% 66% 73% 78.43%
Table-5 Annual Report: 2004-2008

Figure-04: Fixed Deposit Scheme
In case of Fixed Deposit, clients consider two things- one is interest rate and another is certainty of their money. That means financial strength and stability of the concern bank. NCCBL’s interest rate is not equal or higher than their competitors, but their fixed deposit curve is moving upwards. It is a great achievement for NCCBL.

• Premature Encashment of FDR:
A depositor has the right to claim for refund of his/her deposit before expiry of the fixed term thereof. Bank may in special consideration allow premature encashment on application of the depositor subject to the under noted conditions:

a) For FDR which are 3 months or 6 months maturity no interest will be payable, only the principle amount will be refunded.

b) When premature encashment is allowed of and FDR with tenure of over 6 months no interest will be paid if enchased before expiry of 6 months.

c) For FDR having maturity of 12 months and above only interest for the period of up to the proceeding day of encashment less amount for month, shall only paid.

d) It may be noticed that the rate of interest shall be the same as originally contracted.

• Closing of FDR:
If a FDR holder wants to take interest after maturity, banker should consider the following rates:
? Interest Rate
? Excise Duty
? Tax Rate

• Process to know interest rate of any matured FDR:
For Example:
Fixed deposited amount= “X”
Calculate interest= (principal amount*interest rate)
Calculation of any matured FDR= [{(X+ interest) – (principal+ interest) *10% tax} – access duty] MONTHLY SAVING SCHEME:
It is a new project of NCCBL, which is a scheme like DPS in our bank it is called SSS. This scheme started from 1998. The installment payment is to be made to the bank within the first 10 days of each month. It can be opened for 5 years and 10 years maturity for Tk. 500 and 1000.

Monthly Installment
5 Years 10 Years
500.00 40,000 1,12,000
1000.00 80,000 2,24,000
Cash section of nay branch plays a very vital role in general banking department. Because it deals with the most liquid assets. NCCBL has a very equipped cash section. This section receives cash from depositors and pays cash against cheque, draft, pay order, pay in slip, over the counter. Cash Receive Section:
Any person to deposit money will fill up the deposit slip and give the form along the money to the cash officer over the counter. The cash officer counts the cash and compares with figure written in the deposit slip. Then he puts his signature on the slip along with the ‘cash received’ seal and record in the cash receive register book against the number. At the end of this procedure, the cash officer passes the deposit slip to the computer section for posting purpose and delivers the duplicate slip to the client
Account Treatment:
Cash a/c——————-Dr.
Customer’s a/c—————-Cr.
Cash section of nay branch plays a very vital role in general banking department. Because it deals wish the most liquid assets. NCCBL has a very equipped cash section. This section receives cash from depositors and pays cash against cheque, draft, pay order, pay in slip, over the counter. Cash Disbursement:
The drawer who wants to receive money against cheque comes to the cash payment counter and presents his check to the officer. The officer verifies the following information:
• Date of the checque
• Signature of the a/c holder
• Material alteration
• Where the checque is crossed or not
• Where the checque is endorsed or not
• Where the amount in figure and in word correspondent or not
Then he/she sends the checque to the computer for posting. If the computer officer finds everything in order, then he/she passes the cheque to the cash officer to payment by putting ‘pay cash’ seal on the checque. The cash officer gives the cash amount to the holder.
Account Treatment:
Customer’s a/c————Dr.
Cash a/sc————————Cr.

As a service oriented organization, a bank has to perform some extra services on behalf of his customer. The main function of this section is to collect instruments on behalf of his customers through Bangladesh Bank clearing house. Outward Bills for Collection (OBC), inward Bills for Collection (IBC). Upon the receipt of the instruments this section examines the followings:

• Whether the paying bank outside Dhaka City
• Whether the paying bank of their own branch
• Whether the paying bank within Dhaka City

Generally speaking, clearing means settlement but from Banker’s point of view it refers to the procedure of receipts & payments of proceeds of cheques and other instruments through banks.

Clearing House is a place where the representatives of all member banks meet together and settle mutual obligations of banks arising out of cheques & other instruments drawn on one bank and deposited with another bank for collection, under a special arrangement. The characteristic of the clearing house is that at the time of coming to this place the representative of very bank brings with him all cheques etc drawn on other banks along with schedules and delivers the cheques to the clearing house and receives cheques etc drawn on his bank and on the basis of cheques etc. delivered & received the mutual obligations between banks is ascertained and settled through their respective bank accounts maintained with the Central Bank or any other bank which conducts the clearing house.

• Types of Clearing:

There are two types of Clearing, such as (a) Internal or Inter-branch Clearing and (b) Inter-Bank Clearing. Under the 1st type all branches of the same bank situated in a particular city settle their mutual obligations through the main branch of the bank. In some banks the term “Transfer Delivery” is used to mean internal clearing. In the other case, in one city the obligations between all banks are settled. In this case Bangladesh Bank or Sonali Bank performs the function of the Clearing House in Bangladesh.

• Kinds of Clearing:

The Clearing House activities may be grouped into two part, (1) Outward clearing and (2) Inward Clearing.

1) Outward Clearing Procedure

• Receipt of instrument with paying in slip.
• Checking of instrument & paying in slip.
o Affixing of seal
? Special Crossing seal.
? Clearing Seal (Instrument & Paying in slip)
? Endorsement Seal with signature.
• Singing of counterfoil and returning it with seal to the depositor.
• Separation of instrument from paying in slip.
• Sorting of instrument bank wise and branch wise.
• Preparation of schedule- branch wise.
• Preparation Bank wise schedule.
• Preparation of clearing House sheet.
• Tallying of totals of paying in slips with the totals of Clearing House sheet.
• Making of entries in Clearing Register (Outward)
• Preparation of vouchers.
• Sending of instruments to main branch with schedule.
• Collection of credit advice from Main Branch.
2) Inward Clearing Procedure
? Receipt of instruments with schedule
? Checking of instruments.
? Sending of instruments to different Departments/Sections for posting
? Preparation of Vouchers and sending of credit advice to main branch.

• Clearing Return Procedures:

o Outward clearing Return
? Preparation of return memo.
? Making of entry in clearing return Register.
? Preparation of schedule.
? Sending of instruments to main branch before second clearing.

o Inward Clearing Return
? Receipt of instrument with return memo.
? Preparation of Party debit Voucher.
? Making of entry in cheque return Register.
? Sending of instrument with return memo and party debit advice to party by post or through peon.

A lot of cash handling from one place to another is risky. So bank remits funds on behalf of the customers to save them from any awkward happening through the network of their branches. There are three ways of remitting fund from one place to another. There are as follows:-
I. Pay Order (PO)
II. Demand Draft (DD)
III. Telegraphic Transfer (TT)/ Mail Transfer (MT) Pay Order
A pay order is an instrument to remit fund within a clearing zone. A pay order is an order by the issuing bank upon itself to make payment of the amount mentioned therein to the named payee or according to his order.
Characteristics are given below:-

a) Pay order are issued only for locals payment
b) A pay order is not a negotiable instrument
c) Its holder can not acquire a better tittles than what the transferor had
d) Its payment also cannot be easily stopped or countermanded

o Processing of Pay Order

• Procedures of pay order payments:

o Examine genuinely of the pay order.
o Enter in to pay order register and give contra entry.
o Debit if fund ok for payment.

o Money Gram:

Money Gram is one of the innovative products of the bank. This has been functioning satisfactory and rendering prompt and efficient services to the wage earners. Money Gram is represented in over 115 countries and is available at more than 25,000 locations worldwide. In the USA alone Money Gram is available at more than 15,000 locations. All one has to visit a conveniently situated Money Gram agent anywhere in the world and handover the money where they want to send their relatives or friends along with the one-off transaction fee. Bank Draft
According to sec. 85(A) of NI Act, a bank draft is an order to pay money drawn by one officer of the bank upon other office of the same bank for a sum of money payable to order on demand.
Characteristics are given below:-

o It is drawn by one office of a bank upon some another office of the same bank
o It is payable on demand
o Its payment is to be made to the person whose name is mentioned therein or according to his order, i.e.
o It cannot be made payable to the bearer.

o Parties of the Demand Draft:

• The drawer branch,
• The drawee branch,
• The payee,
• The remitter does not remain a party to the instrument.

• Issue of Duplicate Draft:
In case a draft is reported lost and a duplicated draft is required to be issued. The banker should take the following steps:

• It should satisfy itself regarding genuineness of the party requesting issue of a duplicate draft,
• It should obtain the necessary conformation of the drawer branch that the