Overall banking system of United Commercial Bank Limited (UCBL)

Table-2 indicates that the total number of Deposit both Demand Deposit & Time Deposit is 2662349 in the August 2009. In the same month it was 2214675 in the previous year 2008. So there is an increase of 447674 Deposits.

3.4 Advances

Bottom of Form

Table-3 shows that the total credit of the banks is 2816621in the August 2009. In the same month it was 2420627 in the previous year 2008. So there is an increase of 395994.

3.5 Conclusion

The banking sector of Bangladesh comprises of four categories of scheduled banks. These are nationalized commercial banks (NCBs-04), government owned development finance institutions (DFIs-05), private commercial banks (PCBs-30) and foreign commercial banks (FCBs-09). All the banks are registered & operate under the Banking Companies Act 1991. The commercial banking system dominates the financial sector with limited role of Non-Bank Financial Institutions and the capital market. The controller of the banking sector of Bangladesh is Bangladesh Bank. It has working as the central bank of the country since the independence of the country. Its prime jobs include issuing currencies, maintaining foreign exchange reserve. So, it can be strongly said that Bangladesh has a strong & efficient banking sector. That is why; banking sector of Bangladesh has become an attractive place for investment. Now, more & more foreign banks are becoming interested to make investment.

Chapter –4

An Overview of UCBL

CHAPTER FOUR: AN OVERVIEW OF UCBL

4.1 Brief picture of UCBL

Sponsored by some dynamic and reputed entrepreneurs and eminent industrialists of the country and also participated by the Government, UCB started its operation in mid 1983 and has since been able to establish one of the largest networks of 107 branches as on 2011 among the first generation banks in the private sector.

With its firm commitment to the economic development of the country, the Bank has already made a distinct mark in the realm of Private Sector Banking through personalized service, innovative practices, dynamic approach and efficient Management. The Bank, aiming to play a leading role in the economic activities of the country, is firmly engaged in the development of trade, commerce and industry thorough a creative credit policy.

Incorporated on : 26^th June, 1983.

Started operation on : 13^th November, 1983.

Contact Address : UCBL, Corporate Head Office

House # CWS(A)1,

Gulshan Avenue,Dhaka-1212

Bangladesh

PABX : 8852500

SWIFT : UCBLBDDH

Email : info@ucbl.com

Web : www.ucbl.com

4.2 Mission, Vision & Values

To assist high quality service to customer and to participate in the growth and expansion of our national economy and to satisfy clients, share holders and employees.

^{To be the bank of the} 1^st choice through maximizing value of clients shareholder & employees and contributing to the national economy with social commitments.

The values of UCBL are:

· Put customer first

· Emphasize on professional ethics.

· Maintain quality at all levels

· Believe in being a responsible corporate citizen

· Say on the believes

· Foster participative management.

4.3 Management

The Bank has in its Management a combination of highly skilled and eminent bankers of the country of varied experience and expertise successfully led by Mr. M. Shahjahan Bhuiyan, a dynamic banker, as its Managing Director and well educated, energetic and dedicated person working with missionary zeal for the growth and progress of the institution.

4.4 Organizational structure

4.5 Products & Departments

Products

Departments

• Clients Accounts Department
• Remittance Department (Inland)
• General Services Department
• Cash Department
• Accounts Department

§ Credit Administration Department.

§ Marketing, Business & Development Department

§ Import Department

§ Export Department

• Remittance Department (Foreign)

General Banking Department

General Banking department is considered as the direct customer service center. The clients and customers build their impression whether they are going for further dealings with the bank or not on the basis of their service. Moreover this is the first impression about the bank. So general section must be taken carefully. Functions of General Banking Department

is discussed below:

Functions:

§ Establishing Banker Customer relationship,

§ Remitting customer’s money from one place to another,

§ Collecting bills for customers,

§ Taking deposit and honoring Cheque drawn over Principal Branch.

ORGANIZATIONAL SET UP OF GENERAL BANKING DEPARTMENT:General Banking Department constitutes with the following sections:

1. Account Opening Section

Banking business is very much correlated with banker customer relationship. To be a customer one person must have some sort of with the banker. Account Opening section establishes this relationship by opening new accounts.

NATURE OF ACCOUNTS (OWNERSHIP STATUS):

UCBL open following types of accounts:

1. Individual Accounts

2. Joint Accounts

3. Proprietorship Firm Accounts

4. Partnership Concerns Accounts

5. Private Limited Companies Account

6. Public Limited Companies Account

7. Accounts of Societies, Clubs, Association etc.

8. Trust Accounts

9. Accounts of Local Authorities

CLOSING OF AN ACCOUNT:

* To close an account, party may be requested to send an application along with the unused leaves of the Cheque Book issued to him.

*After receiving the application the signature of the account holder shall be verified and the number of unused Cheque Leaves should be noted.

*Before the account is closed the manager will approve the application and closing charge being the incidental charge should be debited to the account.

Accounting Entries:

Debit Party’s Account

Credit: Income Account Incidental charge.

CHEQUES:

A cheque is a very important document. Cheque is an instrument in printed form containing an unconditional order, signed by the account holder directing a certain person to pay a certain some of money only to or to the order of a certain person or to the barer of the instrument. A cheque is always supposed to be drawn against the funds in the party’s account in the bank. It may be crossed for safety.

Types of Cheques in a flow chart:

2. Cash & Computer Section

Cash is one of the most important sections of General Banking Department. It deals with cash, the most liquid asset. The value of banking is insured for a certain some of money. When money exceeds the limit it must be sent to the Central bank vault. So Cash In charge should always be concerned about his custody.

Functions of this Section:

• Receiving cash
• Paying cash
• Issuing vouchers
• Making Proper entries in the ledgers

3. Remittance Section

There is some frequent situation; customer of a bank needs to transfer his fund or money to somewhere within the country boundary. It is really a risky thing to carry the money and is costly a well. What they do, just purchase an instrument so that his/her fund can be transferred through his/her own bank. This short of activities is cubed under the Inland Remittance:

§ Demand Draft. (D.D.)

§ Telegraphic Transfer (T.T.)

§ Pay Order (P.O.)

Now I shall discuss briefly about these instruments and their issuing procedure.

Demand Draft (DD):

This is an order to pay money, drawn by one branch of a bank upon another branch of the same bank for a sum of money payable to order on demand.

Telegraphic Transfer (T.T.)

In Telegraphic Transfer (T.T.) the issuing branch sends a telegraphic message to the branch at the other end, to pay a certain amount of money to a named payee’s account maintained with the drawee branch or through a pay order if no account is maintained with the drawee branch. In UCBL, Principal Branch the charge for Telegraphic transfer is Tk. 1.5 per thousand. Telegraphic charge is Tk. 40.

Pay Order:

Pay Order is an instrument, which is issued from a certain branch of a bank and must be encased from the same branch. It is like the cash but not the exactly cash. One who is maintaining an account with UCBL, Principal Branch can purchase a pay order. It is more liquid than cash. It is used for remittance purpose within the clearing area covered by Principal Branch.

4. Bills Section

Customers of UCBL submit many instruments in the related branch bills section for collection. Bills section plays a vital role in collecting these bills. The bills submitted for collection can be divided into two categories.

CATEGORIES:

OUTWARD BILLS FOR COLLECTION:

¨ The instruments are received duly entered in the Pay-in-slip.

¨ The instruments are checked for any apparent discrepancy and are compared with the particulars noted in the Pay-in-Slip and its counterfoil.

¨ The counterfoil is stamped and signed by the officer.

¨ The instruments and the Pay-in-Slip detached from the counterfoil, which is handed over to the customer.

¨ The instruments are stamped

¨ The instruments are suitable endorsed.

¨ The details of the instruments and special instructions are entered in the Outward Bills Collection Register. And a collection number is allotted in serial order which is also noted on the on the instruments and the pay-in –slip.

¨ The instruments are enlisted in the forwarding schedule and any special instructions are noted therein.

¨ The instruments drawn on other banks are sent to the clearing section and instruments drawn on other branches of UCBL are sent direct to the branch concerned.

¨ Following entries are passed on contra voucher

Dr: Outward Bills Lodged

Cr : Outward Bills For Collection.

¨ The instruments, schedules along with the schedule and voucher are sent to the in charge for checking and signatures.

¨ The instruments are attached with the forwarding schedule and are handed over to Dispatch Department against acknowledgement on the office copy.

¨ The pay in slip is attached to the office copy of the schedule and filled in the “O.B.C. Outstanding File”

¨ The Voucher is sent to the accounts department

¨ .In case the instrument drawn on other bank branch which is not covered by the clearing area of Bangladesh Bank ,forwarding letter are sent direct to that branch for collection and asked them to draw a pay order in favor of Principal Branch on any of the other bank’s office situated in Dhaka.

Realization through Advice:

When the advice is received the following entries are passed.

I. Dr: Bills For Collection (OBC)

Cr: Bills Lodged

II. Dr: HO account (branch concerned)

Cr: Party’s Account

C: Income Account-Postage Received

Cr: Income Account Commission on Bills

Realization through Demand Draft:

When the proceeds are received through draft, following vouchers are prepared and attached with the draft and are sent to the clearing department.

a) Cr: Party’s account

Cr: Income Account Postage Recovered

Cr: Income account Commission on Bills

b) Dr: HO account branch concerned

Cr: Party’s Account

Cr; income account-Postage Receiver

Cr: Income account Commission on Bills

INWARD BILLS FOR COLLECTION:

Procedure:

¨ When instruments are received from our branches or other banks they are checked for any apparent discrepancy and are compared with the particulars in the schedule

¨ The instruments are stamped and the schedule is attempted.

¨ The instruments are suitably discharged,

¨ The details of the schedule and special instruction are entered in Inward bills for collection Register. IBC numbers in serial order are allotted and noted on the schedule and the instruments,

¨ The following entries are passed on the contra voucher,

Dr: Bills Lodged

Cr: Inward Bills Collection

¨ Following vouchers are prepared and attached with the instruments:

1. When bills are received from our branches

Cr: Head Office Account (Branch Concerned)

2.When bills are received from other banks:

Cr: Head Office Account (Branch on Which Demand Draft is to be drawn)

Cr: Income Account Postage Recovered

Cr: Income Account Commission on Bills

¨ The vouchers, schedules and instruments along with the register are sent to the In charge for checking and signatures

¨ The instrument along with the relative vouchers are sent to the clearing department

¨ The contra voucher is sent to the accounts department.

¨ The schedule is filled in the “IBC Outstanding File”

Realization:

When the vouchers are received back from the clearing Department following entries are passed on contra voucher:

Dr: Bills for Collection (IBC)

Cr: Bills Lodged (IBC)

¨ The date of payment is marked on the IBC register.

¨ The RR/SR/TR/BL is stamped and endorsed in favor of the drawee and the bill of exchange is stamped and discharged.

¨ The vouchers and documents along with the register are sent to the in charge for checking and signatures

¨ The documents are delivered to the party against acknowledgement on the reverse of the intimation advice

¨ The schedule and the intimation advice are filed in “L.B.C. paid File”

BALANCING:

Outward Bills For Collection:

The account is balanced on fortnightly basis in the following manner:

¨ Jotting of Outstanding bills is taken from O.B.C. register on the balance book

¨ The balance is agreed with the figures of Outward Bills for collection in the Subsidiary Ledger

Inward Bills For Collection:

The account is balanced on fortnightly basis in the following manner:

¨ Jotting of outstanding bills is taken from O.B.C. register in the Balance Book.

¨ The balance is agreed with the figures of Inward Bills for collection in the subsidiary Ledger.

5. Clearing Section

When a customer of UCBL presents an instrument drawn on other bank for collection, the instrument is collected through clearing house of Bangladesh Bank.

UCBL, Principal Branch takes part in the clearing function on behalf of fifteen branches of UCBL; functioning inside or outside of Dhaka city. The instruments are sent to those banks through clearing arrangement.

Every day two houses are arranged; one in the morning and another in the evening.

The evening house is known as return house. Everyday instruments drawn on different banks are sent to the clearing section of Principal Branch from those fifteen branches.

The officers of the clearing section enter bank name, branch name, number, and amount through NIKASH 22 software in the main schedule of Banks. They transfer the particulars of those instruments in a Floppy Disc. At 9.30 am the concerned officers of Clearing section go to the Clearing House of Bangladesh Bank to take part in clearing function. He gives the floppy disk containing those entries to Bangladesh Bank officials. They insert the floppy in the computer and set off the claims of UCBL on other banks.

Every bank has an account with Bangladesh Bank. Now I want to represent the clearing function through an example:

Suppose UCBL has a claim of 15 lacs on Sonali bank.

Bangladesh Bank set of this claim through debiting Sonali Bank’s Account by 15 lacs Taka and crediting UCBL account by 15 lacs Taka.

The officials of UCBL give the instruments of other banks to respective officials of those banks. They also receive the instruments drawn on their bank and come back to UCBL, Principal Branch. They send the instruments of other branches through messengers of those branches. If any Cheque is not passed the messengers bring back the instruments. The officials of clearing section again enter those instruments to the NIKASH22 software. After that they take those return instruments and the floppy disk containing the particulars of those return instruments to the Second House, which take place in the evening. Again the same procedure that took place in first house is done. UCBL officials receive the returned instruments drawn on UCBL and come back to Principal Branch and in the next morning send those return instruments to respective branches.

FUNCTIONS:

The function of the clearing department can be divided into two parts.

1) Inward Clearing

2) Outward Clearing

These functions are discussed below:

Outward Clearing:

· Messengers of different branches bring instruments drawn on other Banks to the clearing section of Principal Branch.

· Bills Section of UCBL Principal Branch also send the instruments drawn on other Banks to the clearing section for collection.

· The clearing stamps are affixed on the instruments and endorsed

· The particulars of these instruments are entered in the main schedule of banks through NIKASH22 software and inserted in floppy disc.

· The diskettes along with the instruments are carried to the clearinghouse. After going there the concerned officials of UCBL gives the instruments to the representative of respective banks.

· Claims of UABL on other banks are set off by Bangladesh Bank through debiting other bank’s accountand creditingUCBL’s account.

· This function is done in the first house.

Inward Clearing:

· The instruments drawn on UCBL are received from other banks in the clearinghouse.

· The amount and numbers of instruments are entered in the house from the main schedule of respective banks.

· The instruments with schedules are arranged branch wise

· The instruments are sent to branches concerned for clearance and IBCAs are collected from them for honored cheques.

· The dishonored instruments are sent back to respective banks through the second house.

6. FDR & BCD section

Fixed Deposit Account:

Fixed deposit accounts are opened for a fixed period varying from three months to three years or above and are payable at a fixed date of maturity. Interest on this deposit is paid at the rate fixed by H.O. from time to time depending on the period of maturity. Interest is payable only at the maturity of the deposit.

The following table shows different FDR rates:

(Source: FDR section of Principal Branch)

Account opening form (SF-16) and specimen signature card shall be given to the customer and get them filled in and signed by him.

Voucher no SF-12 crediting “Fixed Deposit Account” with the amount of deposit with full narration viz. The name of the party, period of deposit, and rate of interest etc. shall be prepared and be given to the depositor to deposit cash with cash officer after recoding the particulars in the scroll book. In case of payment by cheque it shall be attached to the credit voucher and sent to the deposit department for posting and cancellation.

On receipt of the vouchers from the cash department a Fixed Deposit Receipt shall be prepared and entered in the Fixed Deposit Ledger.

To admit the signature of the account holder the stamp ‘Signature Admitted’ shall be affixed near the specimen signature in the account opening form and specimen signature card.

The AOF, SSC, the ledger and the voucher shall be sent to the officer in charge for signature. The in charge shall sign the receipt and initial the ledger. At the time of signing the receipt, he shall verify the authenticity of the voucher.

Then the documents shall be sent to the Manager /Authorized Official for his signature on the receipt and across the stamp ‘Signature admitted’ on the account opening form, Specimen Signature Card, and the related voucher.

The branch manager shall ensure that the printed number on the deposit receipt forms and in deposit receipt books in use are invariably noted in the respective ledger in advance.

At the close of each business day the officer in charge shall verify the total amount for which the Deposit receipt have been used during the day both from the credit vouchers and the counter foils of the various deposit receipts.

Barer Certificate of Deposit (BCD):

In this type of deposits interest is pre paid while the instrument is purchased. It is barer document and negotiable. This type of deposit is now totally stopped under instruction of Bangladesh Bank to reduce money launderings.

7. BSP

SAVINGS CERTIFICATE OR SANCHAYA PATRA:

This section deals with buying and selling of Sanchaya Patra. A grade 3A level officer is entrusted with this duty. The National Savings Bureau controls the savings certificate or Sanchaya Patra.

TYPES OF SANCHAYA PATRA:

There are four types of Sanchaya Patra in which all are made for a certain time period. The following types of Sanchaya Patra are made available to buyers for sale at UCBL.

Five Years Bangladesh Sanchaya Patra:

The tenure of BSP is five years. It may be encashed before time of maturity but if it is encased before one year no profit will be given. 14.5% profit is given which is fully out of cash. One person can purchase this sort of BSP up to Fifteen Lac individually and Thirty Lac Jointly. It is not transferable.

At the time of encashment, the signature is checked and payment is made in cash or Cheque or by debiting the client’s account.

Banks receive BSP from BB through requisition. No payment is made to BB at the time of requisition but a register is maintained by BB, which includes the name of the banks, members of BSP received and the amount in Taka. Each bank has to submit a monthly statement, which contains total number sale over the month, date, and the name of the purchaser and amount in Taka. When a customer buy’s a Sanchaya Patra paying cash the following entries are made:

Dr: Cash

Cr: BB Account

4.6 Branch information

UCBL has 107 Branches in Bangladesh

Work force

At present almost 3000 employees are working at UCBL.

Table-4: Overall performance (Term in Crore)

Source: Draft copy of Annual Report 2009-2010

4.8 SWOT analysis on UCBL

From the SWOT Analysis we can figure out the ongoing scenario of the UCBL. That is by doing the SWOT Analysis; it is possible to find out the strengths, weaknesses, opportunities and threats of UCBL. So, to a better view of the present business practices of UCBL, I have done the SWOT Analysis.

In SWOT Analysis, two factors act as prime movers:

Internal factors: which are prevailing inside the concern, which include strength and weakness

External factors: which act as opportunities & threats all over the country?

Strengths

• The Relationship between employer & employee is very much appreciable, which increased the productivity of employee.
• Management team is very strong.
• Highly geographic area.
• Very good profit margin achieved by the last few years.
• Strong capital back to bring available liquidity.
• Efficient and experienced management team.
• Sound Import and Export operation.
• Executives are highly qualified and experienced.
• Staffs are swift in their Activities.

Weaknesses

• Lack of proper information in due time.
• There is no customer complain desk for this reason it sometime creates irritation.
• Customer service is not up to the standard and sufficient.
• Though the bank has launched online banking system, the employees are not coped with this system.
• Unavailability of high- tech electronic facilities.

Opportunities

• Client reliability on UCBL is growing day by day on the bank
• UCBL offers many popular schemes for trade service and these schemes of UCBL promote the traders of the country.
• Branches are increasing day by day since people are interested to do the business.
• Foreign remittance is greatly increased.
• Import and export are increasing gradually, so bank can properly exploit this opportunity.
• Online, SMS Banking Services now available in the bank.
• Credit card & ATM Booth facility also available now.

Threats

• Very competitive market.
• Entry of new commercial bank, leasing companies, and merchant bank etc, they all are competitors.
• Competitors are offering innovative new products and services regularly.
• Political crisis and lack of trust to the foreign investors.
• Government imposes tax and VAT on profit.
• Central Bank’s policies some times are not in favor of the private bank’s policies.
• Frequent fluctuation of domestic currency with US dollar.

4.9 Conclusion

United Commercial Bank Limited (UCBL) is one of the leading private commercial Bank. As a commercial bank, UCBL Bank provides all traditional banking services including a wide range of savings and investment scheme products, foreign exchange and ancillary services with the support of modern technology and professional management. The Bank maintain the highest ethical standards and community responsibility worthy of leading corporate citizen and now searching for continuous improvement in productivity, operational efficiency and thereby enhancing local customer value and strengthen foreign syndicate relationship. Now, UCBL is one of the largest banks operating in Bangladesh having 89 branches throughout the country, the bank provides excellent banking services & has a warm relationship with its clients. Moreover, it has efficient management team. The bank concentrates on continuous improvement is banking services. So as a private bank, UCBL is running steadily and within a very near future, it would take a vital responsibility for the national economy.

Chapter –5

A Brief Profile of Barisa

CHAPTER FIVE:

A BRIEF PROFILE OF BARISAL BRANCH

5.1 Introduction

Barisal Branch started its journey since 31-03-1987 as the 32^th branch of UCBL. The bank is now in the top position among the competitor private banks in the area. The branch is always achieving better and better in respect of increasing number of deposits, loan sanctioned, number of accounts etc. Almost every day huge number of customers is gathering in this branch for doing banking satisfactorily. It is an authorized dealer of foreign exchange. The total manpower of this branch is 20. The branch is headed by an FAVP (First Assistant Vice President).The branch is just beside the BIBIR PUKUR, Barisal. As it is in the busy area of the city, the customer appearance in the bank is very high. In this branch, the people are mostly courteous, friendly in nature and eager to help despite the tremendous workload. So as a private bank, UCBL is running steadily and within a very near future, it would take a vital responsibility for the national economy.

Products of UCBL Barisal Branch:

UCB Multi Millionaire

UCB DPS Plus

Western Union Money Transfer

SMS Banking Service

Online Service

Credit Card

Monthly Savings Scheme

Deposit Insurance Scheme

Inward & Outward Remittances

Travelers Cheques

Trade Finance

Industrial Finance

Consumer Credit Scheme

Locker Service

Departments

• Client Accounts Department
• Remittance Department
• General Services Department
• Cash Department
• Accounts Department

§ Credit Administration Department.

§ Marketing, Business & Development Department

5.2 Organizational structure:

Account Opening Section:

I work Account Opening Section. UCB Bank open the following types of accounts and may receive the deposits in those accounts.

Liabilities Products:

# Current Deposit

# Savings Bank Deposit

# Fixed Deposit

# Short Term Deposit

# Monthly Savings Deposits

Cash & Computer Section:

Cash is one of the most important sections of General Banking Department. It deals with cash, the most liquid asset. The value of banking is insured for a certain some of money. When money exceeds the limit it must be sent to the Central bank vault. So Cash In charge should always be concerned about his custody.

Functions of this Section:

• Receiving cash
• Paying cash
• Issuing vouchers
• Making Proper entries in the ledgers

Remittance Section

There is some frequent situation; customer of a bank needs to transfer his fund or money to somewhere within the country boundary. It is really a risky thing to carry the money and is costly a well. What they do, just purchase an instrument so that his/her fund can be transferred through his/her own bank. This short of activities is cubed under the Inland Remittance:

§ Demand Draft. (D.D.)

§ Telegraphic Transfer (T.T.)

§ Pay Order (P.O.)

Transaction through online.

Bills Section

Customers of UCBL, Principal Branch submit many instruments in the bills section for collection. Bills section plays a vital role in collecting these bills. The bills submitted for collection can be divided into two categories.

# Outward Bills

#Inward Bills

Clearing Section

When a customer of UCBL presents an instrument drawn on other bank for collection, the instrument is collected through clearing house of Bangladesh Bank.

Every day two houses are arranged; one in the morning and another in the evening.

The evening house is known as return house. Everyday instruments drawn on different banks are sent to the clearing section of Barisal Branch.

The officers of the clearing section entry bank name, branch name, number, and amount in their register. Every bank has an account with Bangladesh Bank.

.The function of the clearing department can be divided into two parts.

3) Inward Clearing

Disclaimer: