Overall general banking special focus on customer service and financial products of NCC Bank Limited

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Overall general banking special focus on customer service and financial products of NCC Bank Limited


The liberation war of 1971 begot a country named Bangladesh in the world with distressed financial system and adverse economic condition. As a result, the government had to adopt a development philosophy with an objective to enhance the country’s economic growth. At that time, the government nationalized the banking sector along with other business sectors since the banking activity is a true index of commercial and industrial progress of a country. Although the banking sector was under the close supervision of the government, it could not achieve the major objective for which it was nationalized. Thus, the government in its new industrial policy declared in June 1982 decided to denationalize a large number of public enterprises including the commercial banks. Later in 1989, numerous reform measures were taken by the government to place public enterprises at par with the private sector units in the matters of finance and infrastructure development. As a result, the privatization process of banking sector was further boosted up. Today, the commercial banking sector of Bangladesh has emerged as a healthy business sector with auspicious contribution in our economy. The commercial banking sector of Bangladesh is now an area of turbulent competition with the participation of a large number of Private Commercial Banks (PCBs). National Credit and Commerce Bank Limited, a renowned PCB, has already gained a reputation of excellence in providing commercial banking services in Bangladesh.

Executive Summary

In the backdrop of growing competition among commercial banks, The National Credit and Commerce Bank Limited is one of the leading banks in the local market. Hence, this internship report is aimed at discussing the overall general banking special focus on customer service and financial products of the bank.

The report is divided into many parts. First cover the Organization Part consists of history, type of business, mission, vision, objectives. After that strategic business unit and the overall focus on general banking. General banking is a huge area where my main focus was on the customer services and financial products. In the financial products part I discuss about the existing products of the bank. After that discuss about the strength, weakness, threat and opportunities of the bank in SWOT analysis. And finally proposed some recommendation to improve the customer service and introduce new financial product which will help the bank to survive in the competitive market.

Historical Background of NCC Bank

National Credit and Commerce Bank Limited is one of the second generation domestic private banks in Bangladesh after the war of the independence. It is a scheduled Bank under private sector established under the ambit of Bank Company Act, 1991 and incorporated as Public Limited Company Act, 1994 on 17th May 1993. Prior to conversion into a scheduled commercial bank, National Credit Limited (NCL) was incorporated as public limited Investment Company in Bangladesh on 18th November 1985. It made its journey with a modest beginning on 25th November 1985 at its registered office and first branch at 7-8 Motijheel Commercial Area, Dhaka-1000. The initial Authorized Capital of the company was Taka 30 (Thirty) Crore consisting of 30 (Thirty) Lac ordinary Shares of Tk. 100/- each. A new of opportunities in the field of financial activities was opened for the business. NCL made a careful journey and maintained its successive growth for few years with its qualified professional management under most unpredictable, unregulated, uncertainties and limitations.

Having started its operations as a commercial bank in 1993, recovering from some primary difficulties, National Credit and Commerce Bank Limited has now emerged as a major player in the financial sector. Listed in both the Dhaka and Chittagong bourses since late 1999 with an IPO that raised the paid-up capital of the bank to Tk.39 crore.

Banks are the pillars of the financial system. Specially, in Bangladesh, the health of the banking system is very vital because the capital market is little developed here. As the banks are still the major sources of credit and exercise great influence on the financial system, it is extremely important that the country’s banking systems should be in good health in the interest of investment activities, meeting the needs of all kinds of finance and related matters.

Over the years, National Credit and Commerce Bank Limited has built itself as one of the pillars of Bangladesh’s financial sector and is playing a pivotal role in the extending the role of the private sector of the economy. The bank has a strong branch network nation wide with 32 branches.

Objectives of NCCBL:

Strategic Objectives:

To create new opportunities for its clients.

To give customized services and maintains harmonious banker-client relationship.

To contribute towards formation of national capital, growth of savings & investment intrude commerce & industrial sectors.

To achieve positive Economic Value Added (EVA) each year. To be market leader in product innovation.

To be one of the top three Financial Institutions in Bangladesh in terms of cost efficiency.

To be one of the top five Financial Institutions in Bangladesh in terms of market share in all significant market segments it serves.

Organizational Structure of F. EX. Br. Of NCCBL

Assistant Officer

Management and Staff:

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 Managing Director of the bank, who is the also the Chief Executive Officer. 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.

Corporate Vision:

To become the Bank of choice in serving the Nation as a progressive and socially responsible financial institution by bringing credit and commerce together for profit and sustainable growth.

Corporate Mission:

To mobilize financial resources from within and abroad to contribute to agricultures,

industry and socio-economic development of the country and to play a catalytic role in the formation of capital market.

Performance of the Bank:

Bank’s performance during the year 2008 was modestly satisfactory, despite two years of uncertainty and gloomy global economy. During the year. Bank could mobilize Deposit of Tk.46, 904.66 million and earned Operational Profit to the tune of Tk.2, 363.49 million, Advance figure as on date stood at Tk.46, 332.69 million. The Authorized Capital of the Bank stood at Tk.2, 500.00 million as on dates whereas Paid-Up Capital rose to Tk.i, 757.62 million as against Tk. l, 352.01 million of 2007. The Reserved Fund increased to Tk.2, 863.62 million registering 43.51% increase over last year’s Tk.l, 995.36 million.

Deposit (2003-2008), figure (in millions):

Bank’s total deposit as on 31/12/2008 stood at Tk.46, 904.66 million registering 34.39% Growth over the last year’s Years appended in the chart below.

Loan and advance (2003-2008), figure (in millions):

The Bank follows its own Credit Policy formulated in the light of country’s applicable laws and norms and CRM guidelines as well. The main focus of the policy is to ensure profitable and viable investment of Bank’s fund. Besides conventional lending, Bank also stressed on funding unconventional sectors. In some instances it has become pioneer in extending credit facilities such as maize, agor, saya etc. As such, the credit portfolio of the Bank is well diversified and covers wide spectrum of business and industrial concerns from textiles to real estate. Credit facilities in micro and SME sector are also gaining momentum.

The bank is very careful in handing credit proposals, Bank disbursed Tk. 56,496 Million

During the year and deposit Advance r4ation was 98.78% in 2008

Investments (2003-2008), figure (in millions):

Investment figure of the Bank as on 31st December, 2008 Bank’s investment stood at Tk.6,526.82 million recording an increase of 4.15% over last year’s Tk.6,266.62 million. Generally, Bank invests its fund in Government Treasury Bill in order to maintain statutory liquidity requirement (SLR) besides yielding good rate of return.

Foreign Exchange Business:

As usual Bank’s Foreign Business contributed largely to its profitability in 2008 also. The Management of the Bank is careful in catering to the Banking needs of the exporters and imports and as such always try to depute competent officers having required expertise in the field. As a result, Bank’s forfeiting trade witnessed impressive development during last few years.

Import (2003-2008) figure (in millions):

During 2008, the Bank handled export & import business for Tk. 12,522.04 million & Tk.38, 796.88 million respectively. Number of Bank’s AD Branches was 20 (twenty) in 2008, which is expected to increase by 3 (three) Branches in 2009.

Remittance (2003-2008, figure in millions):

To expend its network for distribution of remittance, the Bank has taken steps by entering in to an agreement with TMSS-a reputed NGO to use their 250 remote outlets under a joint venture of DFID & Bangladesh Bank called RPCF.

Financial highlights of NCCBL: Tk. In Million

2006 2007 2008
Authorized Capital 2,500.00 2,500.00 2,500.00
Paid up Capital 1,201.79 1,352.01 1,757.62
Reserve fund and other Reserve 1,215.58 1,995.36 2,863.62
Equity fund 2,417.37 3,326,52 4,621.24
Deposits 28,147.34 34,901.77 46,904.66
Loans and Advances 24,678.36 32,687.75 46,332.69
investment 3,552.08 6,266.62 6,526,82
Import Business 17,646.80 28,779.21 38,,796.88
Export Business 8,557.00 9,577.92 12,552.04
Operating Income 3,913.19 5,269.03 7,417.64
Operating Expenses 2,645.62 3,488.78 5,054.15
Operating profit 1,267.57 1780.25 2363.49
Profit before Tax 1056.51 1356.32 1788.96
Profit after Tax 497.22 677.18 882.28
Retained Profit 7.83 8.13 5.34
Total Assets (excluding contra) 32615.01 42522.85 57365.52
Fixed Assets 353.71 522.00 775.31
Number of Branches 48 53 57
Number of Employees 1118 1230 1400
Earnings per Share 35.44 38.53 50.20
Dividend: Cash (%) 10 0 0
Bonus (%) 10 30 10
Cost of Fund (%) 12.50% 30% 30%
Return on Equity (ROE) (%) 19.82 20.23 21.76
Return on Assets (ROA) (%) 1.47 1.59 1.54
Return on investment (ROI) 8 9.24 12.04
Capital Adequacy Ratio 9.78 10.61 10.61
Non-performing Loans as % of Total Advances 4.95 4.17 4.14
“Volume Of Non-performing Loans” 1212.26 1353.31 1902.58
Amount of provision against Classified Loans 523.58 644.11 912.90
Amount of provision against Unclassified Loans 282.09 388.78 456.07
Advance/Deposit Ratio (%) 87.68 93.66 98.78

ATM service:

The bank has joined the shared ATM Network Bangladesh with a pool of seven banks. The client of any member bank will have access to any ATM situated at different locations of Dhaka city. This bank’s clients will get 24 hours cash withdrawal and utility bills payment facility. 16 ATMs will be installed gradually in Dhaka city and the network will be extended to other cities of the country in the near future.

Electronic Banking:

The Bank has been taken all possible step to introduce technology based Banking products and Services to the customers. In line with this, Bank’s IT Division has already developed

On-line banking facility in all branches. That’s why, they established software “Flora banking System”. Number of Credit Card marketed crossed 4000 mark

Credit Card:

To provide best possible customer services to its clients, the bank is going to launch Master Credit Card shortly.

Money grams:

Money gram is one of the innovative products of the bank. This has been functioning satisfactorily and rendering prompt and efficient services to the wage earners.


The bank has become a member of SWIFT and is providing a fast and accurate communication network for financial transactions to their valued clients through uninterrupted connectivity with thousands of user institutions in 150 countries around the world.

Chapter- Two

“General Banking Department”

General Banking Department:

General banking department is the key point of the all banking activities. It is the introductory department of the bank to its customers. It performs the day to day transactions. It is the storage point for all kinds of transaction of foreign exchange department, loans and advances department and itself. The Foreign Exchange branch of NCC Bank has all the required sections of general banking. The following sections are run under general banking:-

  • Deposit Section
  • Account Opening Section
  • Cash Section
  • Bills & Clearing Section
  • Remittance Section
  • Accounts section.

Deposit Section:

The Relationship between banker and his customer begins with the opening of an account by the former in the names of the letter. Initially all the accounts are opened with of money by the customer and hence these accounts are called deposit accounts. Accepting of deposits of deposits of money from the public is one of the essential functions of a banker according to the definition of banking given in the Banking Companies Act 1991.

Types of Deposit Account:

Broadly speaking, the deposit account is classified into two categories;

1) Term deposits.

2) Demand deposits

Term deposits:

Term deposits are included all those deposits which are deposited with the bank for a fixed period specified in a advance such deposits are therefore, called fixed deposits or term deposits.

NCCB offers following attractive rates of profit to its Depositors on Term & Savings Deposits:

Term deposits

Nature of Deposits Band of Rate of Interest
Fixed Deposit 1 month 8.00% – 8.50%
Fixed Deposit / Bearer Certificates for 3 months 9.00% – 9.25%
Fixed Deposit / Bearer Certificates for 6 months 9.25% -9.50%
Fixed Deposit / Bearer Certificates for 1 year 9.75%- 10.50%
Fixed Deposit / Bearer Certificates for 2 years 10.25%- 11.25%
Fixed Deposit /Bearer Certificates for 3 years 10.75%- 11.50%

Fixed Deposit Account:

These are deposits, which are made with the bank for a fixed period specified in advance. The banks not maintain cash reserves against these deposits, and therefore, the bank offers higher rate of interest on such deposits. These deposits generally constitute more than half of the deposits with the banks.

Opening of fixed Deposit account:

The depositor has to fill in an application from wherein he mentions the amount of deposit. The period for which deposit is to be made and the name in which the fixed deposit receipt is to be issued.

Payment of Interest:

Category of Deposits Interest Rate
3 months 8.00%
6 months 8.25%
FDR for 12 months 8.50%

It is usually paid on maturity of the fixed deposit or on the date of anniversary, which is applicable. But the bank may pay interest to depositor every six months or credit the money of interest to his savings or current account, at his request.

Account Opening Section:

It is said that there is no banker customer relationship if there is no account of a person in that bank. By opening an account banker and customer create a contractual relationship. However, selection of customer for opening an account is very crucial for a bank.

(a):Nature of A/C:

· Individual

· Joint

· Proprietorship

· Partnership

· Limited company-1) Public. 2) Private.

· Educational/ Institutional/club/Society/Association etc.

· Trust/Executors/N.G.O.

(b): Type of A/C:

a. Current

b. Savings

c. Double money scheme

d. SSS-Special saving Scheme

e. STD-Short term deposit

f. Fixed deposit/MDD


h. Premium/Interest Earning term deposit


j. Others.

Account Opening Procedure:

To open an account following formalities to be performed by the customer:

1. Application on the prescribed form,

2. Introduction

3. Photographs

4. Specimen Signature Card (SSC)

5. Cheque book requisition slip

6. Customer should carefully read and fill up the application form

7. Putting specimen signatures in the signature card

8. Any special instructions for operating the account should be noted on the signature card duly authenticated by the account holder.

9. The required account number for the new account has to be obtained.

10. Obtain the signature and A/C number of the introducer.

11. Pay in slip is to be filled up and minimum initial amount has to be deposited.

12. Place the signature cards, advice of a new account, a copy of deposit slip, photographs and other required documents etc. in a file.

13. Thanks letter to be sent to the address mentioned by the customer to welcome the customer as well as verify the address.

14. Finally, a cheque book is issued marked with the account number and branch seal. 3.2.2: Application form for account opening:

Contents of the application form for opening a saving or a current account are;

· Name of the Applicant

· Father’s / Husband’s Name

· Present Address

· Permanent Address

· Occupation


· Contact Number

· Special instructions for operation of the account

· Nominee

· Specimen signature

· Introducer’s Name and Signature

· Amount deposited.

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. 1000.

Join 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.)

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:

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

Current Deposit accounts:

A current account is a running and active account, which may be operated upon any number of times during a working day. There is no restriction on the number and the amount of withdrawals from a current account.

Savings Bank Accounts:

A saving bank account is meant for the people of the lower and middle classes who wish to save a part of their incomes to meet their future needs and intend to earn an income from their savings. The banks, therefore, impose certain restrictions on the savings bank account and also offer a reasonable rate of interest. The need of keeping cash reserves against such deposits is comparatively larger vis-à-vis the fixed deposits.

The necessary requirements for a saving account:

· Appropriate introduction is required to open the A/C.

· Frequent withdrawals are discouraged.

· Initial deposit requires the amount of minimum Tk. 500.00

· Interest is deposited in the account depending on the deposited amount.

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 pan 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 wavs:-

· 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 follows the banker.

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.5000 as initial deposit for saving a/c and Tk. 1OOOfor current a/c.

Operation Instruction:

If any party wants his/her a/c to be operated by somebody else, s/he will provide the banker in writing statement about the operator.

Pay in Slip, Check Book:

The customer is supplied with a pay in slip book to use for depositing cash or check of bill into a/c. The customer is also supplied with a checkbook for drawing money as and when the customer wishes, which normally contains 10 to 50 pages.

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. Dr: Cash

Cr: STD a/c (Party)

If the amount shall be deposited by check or transfer of a/c, the following entries shall be passed—

Dr: Party C/D, S/D a/c.

Cr: STD a/c

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:-

Dr: STD a/c (Party)

Cr: C/D (Party

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 5years and 10 years maturity for Tk. 500 and 1000.

Monthly Saving Scheme:

SL. No. Monthly deposit 5years@12.10% 10years@12.10%
1 500 40,500 1,10,750
2 1,000 81,000 2,21,500
3 1,500 1,21,500 3,32,250
4 2,000 1,62,000 4,43,000
5 2,500 2,02,500 5,53,750
6 3,000 2,43,000 6,64,500
7 3,500 2,83,500 7,75,250
8 4,000 3,24,000 8,86,000
9 4,500 3,64,500 9,96,750
10 5,000 4,05,000 11,07,500
11 10,000 8,10,000 22,15,000

Total Account

NCC Bank, F.EX.Br.

As PerDecember 31,2009

Type of Account Number of Account
Current Accounts 1010
Savings Accounts 1830
Short Term Deposits 48
Special Savings Scheme 712
Term Deposit 807
Sub Total (Deposit): 4407
Advance- Cash credit 29
Advance-Discounts 347
Advance- Festivals 7
Advance- Overdrafts 94
House Renovation Loan Scheme 1
Lease finance Scheme 7
Loan against house building 3
Loan against IMP. Merchandise 8
Loan against Trust Receipts 151
Loan General 22
Payment against Document 15
Personal loan scheme 11
Short term loan 5
Small business loan scheme 4
Sp House building loan 2
Staff loans 24
Sub Total (Loan): 730
Grand Total: 5137

Cash Department:

Cash section of F. Ex. 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 check, draft, pay order pay in slip, over the counter. Cash department serves the following services-

· Cash Receipt

· Payment of cash

· Balancing, Checking and safe custody of cash

· Inter Branch Remittance of Cash

· Maintenance of accounts with Bangladesh Bank/Other banks

· Telegraphic Transfer (TT) discounting

· Insurance of cash

· Manage excess or shortage of cash, mutilated defective notes.

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:

Dr: Cash

Cr: Customer’s a/c

Cash Disbursement:

The drawer who wants to receive money against check conies to the cash payment counter and presents his check to the officer. The officer verifies the following information:

o Date of the check,

o Signature of the a/c holder,

o Material alteration

Where the check is crossed or not,

o Where the check is endorsed or not,

Chapter- Three

“Foreign Exchange Department”


Foreign Trade is the out-come of the interaction of a large number of complex variables. The competitive cost, opportunity cost, price advantages and preference, economics of scale, intensity of demand; consumer tastes etc. influence the flow of international trade. Trade between nations ought to lead to a transfer of resources from one country to another on mutual beneficial terms. Various theories of international trade have been developed by economists of classical school such as Adam smith, David Ricardo, John Stuart Mill and Alfred Marshal. Theory of absolute advantage enunciated by Adam Smith. Theory of comparative cost advantage developed by Ricardo, Purchasing power parity theory was popularized by Gustav Cassel, after 1s‘ world war. The framework of modern theory, factors of proportion theory has been laid by the works of Heckscher, Olin and Haberler.

Foreign Exchange:

“Foreign Exchange” means foreign currency and includes any instrument drawn, accepted, made or issued under clause (13) of article 16 of the Bangladesh Bank order, 1972, all j deposits credits and balances payable in any foreign currency and any draft, traveler’s ! cheque, letter of credit and bill of exchange expressed or drawn in Bangladesh currency

but payable in any foreign currency. (As per foreign exchange Regulation Act, 1947) Foreign Exchange is simply the changing of one currency for another. It involves cross border buying and selling of foreign currency and the moving of funds in and out of the country. Foreign Exchange is required for settlement of international payments in connection with import of goods into the country as well as for meeting payments of freight charges, insurance banking, debt servicing and travel etc.

The need for foreign exchange:

The need for foreign exchange is reality seen when two countries have a totally different from of money. It is needed for settlement of debts between the two countries. It has three principle meanings:

1) The entire system under which the settlement of international obligations are conducted,

2) The Medium used : and

3) The monetary unit or the rate at which media are quoted.

Foreign Exchange
Import Section
Export Section
Remittance Section

Foreign Exchange department (FXD):

Foreign Exchange department is one of the key areas for development of the carrying out business. Foreign Exchange Business is conducting on the strength of Foreign Exchange regulation act 1947 has amended up to date in Bangladesh. And all the procedures and transaction relating to the Foreign Exchange Business is conducted as per Uniform Customs and Practices for Documentary Credit (UCPDC), ICC publication on -500 1993 And uniform rules for collections UCR-522. Every bank in Bangladesh is conducting their Foreign Exchange Business as guidelines of Foreign Exchange transactions vol-1982-1986. A lot of works relating to export or import are done by banks. While performing those tasks bank should be very much cautious as lot of complexities are there. Foreign trading is strictly controlled by Bangladesh Bank. Therefore ant deviation or mistake will cost a bank more.

The Exporter

(Seller of Goods)

Authorized Dealer

The banker deals in foreign exchange when he \$ so authorized by the Bangladesh Bank under section 3 of the foreign exchange Regulation Act, 1947 are known as Authorized

Agency Arrangement:

International agency arrangements are being maintained between the banks of different

countries for the purpose of the easy and early settlement of accounting procedures arising out of internet bank (home & abroad) transactions. Agency arrangement refers to an arrangement for conducting banking transactions between an authorized Dealer and a foreign bank branch. Each one is the foreign correspondent of the other.

Our Bank has two types of agents:

1) Those with whom we maintain account.

2) Those with which we have no account.

Import formalities of NCC bank:


No country can produce the goods and services that it requires. However, one country may produce one item of goods more, but any other goods less or not at all. Thus, in order to meet human wants, international trade takes place in between the countries. It is said that a country will engage to produce only those items in which it has the comparative advantage because of natural endowments and skills and imports from others it cannot produce at all or can produce only at higher cost than the supplies. So, Imports and Exports of goods and services in between countries assume a very important role for any one’s national life, specifically for the developing countries like ours, because our entire efforts of national development is dependent on foreign assistance to a greater extent.

NCC bank foreign exchange dept. plays a vital role to earn the bank’s maximum profit. The dept. is classified according to their activities. The foreign exchange dept. consists of three-





Import trade in Bangladesh is controlled under the Import and Export control Act 1950. Authorized Dealer Banks will import the goods into Bangladesh following the import policy, public notice, F.E. circular and other instructions from competent authorities from time to time. The import functions of the branch as far I have understood are discussed below:

Import of goods and services essentially involves two types:

1) Bringing of goods into the country physically or utilizing the services;

2) Making payments there -against in foreign exchange.

Imports and Exports of goods into Bangladesh is regulated by the Ministry of Commerce through the offices of CCI & E under import and Export (Control) Act, 1950 and the foreign exchange is regulated by Bangladesh Bank through its Exchange Control Department.

Types of Importer:

1) Industrial Importers

2) Commercial Importers

3) Actual Users

4) Import by Ministries, Govt, Departments and other Public Sector Agencies.

5) Lease Financing Importers.

a):L /C Opening Bank:

The bank opens L/C at the request of his customer/ importer favg. Exporter of abroad called the L/C opening bank.

b): Advising bank:

A Credit may be advised/available to a beneficiary through another bank (the advising bank) without engagement on the part of advising Bank, but the advising bank shell take reasonable care to check the apparent authenticity of the credit.

c): Negotiation:

In banking, Negotiation means the sale and purchase of bills of exchange and documents. In documentary Negotiation means giving the value for drafts or documents by the bank authorized to negotiation. Mere examination of documents without giving value does not constitute a negotiation.

d): Reimbursing bank:

Reimbursing bank Whish bank, at the request by issuing bank, make payment to negotiating bank/claiming bank upon receipt of reimbursement claim as per credit terms. The reimbursing bank debits the nostro account of issuing bank on the basis of reimbursement instruction.

Documentary Requirements for Opening L/C

Importer shall submit following documents for opening L/C:

(a) Valid Import Registration Certificate (IRC) (commercial/industrial)

The following rjgrsons/purposes are exempted from Registration:

1) Govt. Departments

ii) Local Authorities & Statutory Bodies

iii) Recognized Educational Institutions

iv) Hospitals

v) Import of Capital Machinery for own use

(b) Tax Identification Number Certificate

(c) VAT Registration Certificate

(d) Membership Certificate of a recognized Trade Association as per 1PO

(e) A declaration, in triplicate, that the importer has paid income-tax or submitted income tax return for the preceding year

(f) Pro forma Invoice or Indent duly accepted by the importer

(g) Insurance Cover Note with Money Paid Receipt covering value of goods to be

imported plus 10 (Ten) percent above

h) L/C application Form (MF-fx 13) duly signed by the importer

i) Letter of Credit Authorization Form (LCAF), commercial or industrial as the case may be, duly signed ‘by the importer and incorporating New ITC number of at least 6(six) digits

under the Harmonized System as given in the Import Trade Control Schedule 1988.

j) IMP Form duly signed by the importer

Importer should provide following information in the L/C


· Full Name and Address of the Beneficiary,

· Brief description of goods keeping conformity to the L/C indents,

· Currency amount of L/C, Unit price quantity, quality of goods,

· Origin of the goods,

· Mode of transport,

· Last date of shipment

LCA FORM (Letter of credit Authorization From):

LCA form is given to the Party by the Bank before opening the L/C.

1) Name and address Of the party—

2) IRC NO—

3) Sector of Industry,—

4) Whether the unit is Ad-hoc or Regular—

5) Source of financing —

6) Particulars of CCI& E’s Public Notice with date or provision of import policy order—

7) List of item(s) to be imported with ITC classification No.

Description of item(s) to be imported ITC No. Restricted individual itemshae showing

a) The Branch must ensure that they deal only with known customers having a place of business in Bangladesh and can be traced easily, should any occasion arise for this purpose.

b) The Branch shall all assess the financial standings & credibility of the customers with a view to ensure satisfactory arrangement for retirement of the documents.

c) The Branch should also obtain confidential report on the exporter in all cases where the amount of the L/C exceeds Tk.2, 00,000.00 against P/invoice and Tk. 5, 00,000.00 against indents.

d) The Branch shall verify prices so as to ascertain competitiveness of the commodities to be imported.

e) The Branch shall also see the marketability of the commodities to be imported.

f) The Branch shall verify signature of the Importer on L/C Application Forms, LCAF & IMP


g) The Branch will not open L/Cs for import of goods through the customs stations/routes like Sonamasjid, hili, Burirnary. Birol etc. unless the importers pay 100% margin or prior Head Office approval is obtained.

Sanctioning; Documentation & Legal Formalities

Approval of Mead Office and/or Branch Manger (where L/Cs are to be opened under his delegation) is to be obtained before opening L/C(s).

Security documentation is to be completed as per sanction/approval terms prior to opening of L.C. Charge Forms such as Demand Promissory Note, Letter of Undertaking, Letter of xv”~ Debit Authority & Letter of Guarantee (where applicable) to be obtained with due stamps as per prevailing Stamp Act rate.

For opening L/C the client must be submit to the bank an application in the printed form of NCC bank. This L/C application is also an agreement between NCC bank and the importer.

Along with the L/C application the importer must submit:-

i. Performa Invoice,

ii. Insurance Confronted,

iii. Four set of IMP form,

(1): IRC:

It is obtain from CCI&E duly supported by required papers like-

1) Bank certificate

2) Trade license

3) Certificate from local chamber of commerce

4) Income tax clearance certificate, importer who has been IRC earlier, careful observation is to make that IRC is renewed.

Importer then should come in contract with the exporter directly by taking a rate quotation (called Proforma invoice) or an indent from an indenting house (representative of the exporter who stays in importers country & offers rate of commodities on behalf of the exporler).This indentor have to be registered with CCI&E as indenter and they are provided with indenting registration number) on the basis of the INCOTERM and come to his banker with the following paper for opening Letter of credit


It is also given to the party by the Bank before opening L/C for fill-up the party

IMP No. A.D’s Code Serial No. Year
2 3 4 5 6
L/C Authorization Form Registration No.of L/C Authorization from with Bangladesh Bank Registration unit Description of Goods I.T.C


Quantity of goods Invoice value in foreign currency
Number Date Unit Quantity
7 8 9 10 11 12
Country of origin port of shipment Name of Steamer /Airline and date of shipment Port of importation in Bangladesh or name of country of ultimate destination Indent or,s name and address Indent or ‘s Registration on with
C.C.I & E Bangladesh

Definition of L/C:

Letter of credit is an undertaking/ instrument issued by a bank on behalf of the Buyer/ Importer in favor of the exporter whereby the bank undertakes to pay the exporter a certain fixed amount against delivery of documents specified in the credit within a stipulated time, if the terms and conditions of a letter of credit have been complied with. As per UCP-600(Article -2) Credit means any arrangement, however named or described, that is irrevocable and thereby constitutes a definite undertaking of the issuing bank to honour a complying presentation.

Honour means:

· To pay at sight if the credit is available by sight payment.

· To incur a deferred payment undertaking and pay maturity if the credit is available

by deferred payment

· To accept a bill of exchange C’ Draft”) drawn by the beneficiary and pay at maturity if the credit is availabl