Overall performance of NBL
1.3. Objective Of The Report
The main objective of this report is to introduce with the Overall Activities and Performance of the bank and to give myself the opportunity to use this information in preparing a report on a firm.
The objective of the study may be viewed as:
1. General objective 2. Special objective
The general objective of the study is to prepare and submit a report on the topic “Overall Activities and Performance of National Bank Ltd.”
· Identify the strategies for NBL Bank Ltd. implementing in constant prosperity of the company.
· Analyzing the performance trends of the fast growing banking corporation.
· To find out the Management problems and solve the problems
· To satisfy the shareholders by informing about the company.
· To give some idea about its management and organization structure.
· To develop our capabilities as an employee in realistic field of the job market.
Data have been collected from both primary and secondary source.
· Register and file study from different department of the branch.
· Computer data from accounts section of the branch.
· Officer’s desk papers, vouchers etc.
· Direct communication with the clients.
· Different papers of National Bank Ltd.
· Annual report of National Bank Ltd.
· Paper cutting and textbook.
1.5. Scope Of The Report
The scope of the study may be stated as under:
· The study would help top management in planning and decision making.
· The study would help management in identifying the key areas of weakness and strength.
· The study would aware the top management to take corrective and appropriate measure timely to improve the company performance.
· The study would also help the shareholders as a guide to company’s present and future position.
1.6. Limitation Of The Report
Although I have obtained wholehearted co-operation from employees of National Bank Limited, Mohakhali Branch, they could not manage enough time to deal with my report. On the way of my study, I have faced the following problems that may be termed as the limitations! shortcomings of the study.
Budgeted time for the Study: The first obstruct is time itself Due to time limit, the scope and dimension of the study has been curtailed. NBL Bank Limited is a big organization. It was very tough to deal with this bank within this short time. On the other hand due to short time I was unable to interview all the customers who have taken loan.
Data Insufficiency: It was difficult to collect data from such a big organization. Because of some divisional and confidential problem, I could not get enough information
Banking Sector in Bangladesh
2.1 Definition of bank:
A bank is a financial institution whose primary activity is to act as a payment agent for customers and to borrow and lend money. It is an institution for receiving, keeping, and lending money.
Banks have influenced economies and politics for centuries. Historically, the primary purpose of a bank was to provide loans to trading companies. Banks provided funds to allow businesses to purchase inventory, and collected those funds back with interest when the goods were sold. For centuries, the banking industry only dealt with businesses, not consumers. Banking services have expanded to include services directed at individuals, and risk in these much smaller transactions are pooled.
The name bank derives from the Italian word banco “desk/bench”, used during the Renaissance by Florentines bankers, who used to make their transactions above a desk covered by a green tablecloth.<href=”#cite_note-1″ title=””> However, there are traces of banking activity even in ancient times.In fact, the word traces its origins back to the Ancient Roman Empire, where moneylenders would set up their stalls in the middle of enclosed courtyards called macella on a long bench called a bancu, from which the words banco and bank are derived. As a moneychanger, the merchant at the bancu did not so much invest money as merely convert the foreign currency into the only legal tender in Rome—that of the Imperial Mint.<href=”#cite_note-2″ title=””>
2.2 Law of banking:
Banking law is based on a contractual analysis of the relationship between the bank and the customer. The definition of bank is given above, and the definition of customer is any person for whom the bank agrees to conduct an account.
The law implies rights and obligations into this relationship as follows:
- The bank account balance is the financial position between the bank and the customer, when the account is in credit, the bank owes the balance to the customer, when the account is overdrawn, the customer owes the balance to the bank.
- The bank engages to pay the customer’s cheques up to the amount standing to the credit of the customer’s account, plus any agreed overdraft limit.
- The bank may not pay from the customer’s account without a mandate from the customer, e.g. a cheque drawn by the customer.
- The bank engages to promptly collect the cheques deposited to the customer’s account as the customer’s agent, and to credit the proceeds to the customer’s account.
- right to combine the customer’s accounts, since each account is just an aspect of the same credit relationship.
- The bank has a lien on cheques deposited to the customer’s account, to the extent that the customer is indebted to the bank.
- The bank must not disclose the details of the transactions going through the customer’s account unless the customer consents, there is a public duty to disclose, the bank’s interests require it, or under compulsion of law.
2.3 Historical background of the banking institution in Bangladesh:
Banks have influenced economies and politics for centuries. Historically, the primary purpose of a bank was to provide loans to trading companies. Banks provided funds to allow businesses to purchase inventory, and collected those funds back with interest when the goods were sold. For centuries, the banking industry only dealt with businesses, not consumers. Banking services have expanded to include services directed at individuals, and risks in these much smaller transactions are pooled.
The name bank derives from the Italian word banco “desk/bench”, used during the Renaissance by Florentines bankers, who used to make their transactions above a desk covered by a green tablecloth.<href=”#cite_note-1″ title=””> However, there are traces of banking activity even in ancient times.
In fact, the word traces its origins back to the Ancient Roman Empire, where moneylenders would set up their stalls in the middle of enclosed courtyards called macella on a long bench called a bancu, from which the words banco and bank are derived. As a moneychanger, the merchant at the bancu did not so much invest money as merely convert the foreign currency into the only legal tender in Rome—that of the Imperial Mint.
2.4 Beginning Banking operation in Bangladesh:
After independence of Bangladesh the government of Bangladesh was formally to change the administration of the territory now constitute Bangladesh. The government promulgated a law called Bangladesh bank order 1971 (acting president order no 2 of 1971). By this order the state bank of Pakistan was declared to be deemed as Bangladesh bank and officers, branches and assets of said state bank was declared to be deemed as officers, branches of Bangladesh bank. On the date there existed 14 scheduled banks with about 3042 branches all over the world.
On the 16th December 1971 there existed the following 12 banks in Bangladesh namely:
|Existing Bank||New Bank|
|12. Eastern Banking Corporation Ltd.||Uttara Bank|
2.5 Banking Operation of Bangladesh:
|Table 1: Structure of the Banking System in Bangladesh
(March 2008 )
|Type of Bank||No.||No. of Branches||% of Total Asset||% of Total Deposit|
|Source: Bangladesh Bank|
The banking sector of Bangladesh comprises four categories of scheduled banks. As of June 2007, 49 scheduled banks are operating in Bangladesh with a network of 6318 branches. The structure of the banking system in Bangladesh is categorized in the following table.
The number of banks in all now stands at 49 in Bangladesh. Out of the 49 banks, 4 are Nationalized Commercial Banks (NCBs), 30 local private commercial banks (PCBs), 10 Foreign Commercial Banks (FCBs) and the rest five are Development Financial Institutions (DFIs). Sonali Bank is the largest among the NCBs while Pubali is leading in the private ones. Among the 12 foreign banks, Standard Chartered has become the largest in the country. Besides the scheduled banks, Samabai (Cooperative) Bank, Ansar-VDP Bank, Karmasansthan (Employment) Bank and Grameen bank are functioning in the financial sector. The number of total branches of all scheduled banks is 6,318 as of June 2007. Bangladesh Bank (BB) regulates and supervises the activities of all banks. The BB is now carrying out a reform program to ensure quality services by the banks.
3.1 Historical Background of The National Bank Limited
The National Bank Limited (NBL) has a prolonged and glorious heritage in the banking industry in Bangladesh. It is the pioneer in the local private commercial was inaugurated on March 1983 under the supervision of Bangladesh Bank. A glorious fact of the National Bank Limited is its approval as first private commercial bank from Bangladesh Bank in our country.
Economic development activities in the post liberation period required service from private commercial Banks. To fulfill this demand as well as to improve the commercial banking ser-vice in Bangladesh, the National Bank Limited emerged as a private limited company. The National Bank Limited is a remarkable addition to the private sector branch banking in Bangladesh. Aiming at offering commercial banking service to the customer’s door around the country, the National Bank Limited established 100 branches up to this year. This is the highest number for any private commercial bank operating in Bangladesh. This organization achieve customer’s confidence immediately its establishment in domestic and international markets.
NBL took participation in Nepal Arab Bank Limited, Nepal in 1995.Under a technical service agreement, NBL is extending management service’s to NBIL, in 1997. Bank opened a representative office in Yangoon, Myanmar. NBL is proud to be, first private Bank in Bangladesh who introduce credit card (Master Card) both local and international. The Bank has made agreement with Western Union Remittance services for speedy transfer of money allover the world.
The National Bank limited provides financing in capital market, Credit line and project financing, investment counseling, Underwriting any guarantee, Port folio management etc along with traditional banking service, Sanchay Prokalpo and Bonus Deposit scheme are- – praiseworthy banking service for the middle and lower income group. Recently, this organization has taken operational decision of two projects: Consumer Credit scheme and Credit Card marketing to widen its service and customer base. The National Bank Limited is always emphasizing the improve banking service and betterment of living standard of the general people of Bangladesh.
3.2 Management Hierarchy of NBL
3.3 Objective & Goals Of National Bank Ltd.
· NBL isalways ready to maintain the highest quality of services by upgrading banking technology prudence management banking and by applying high standard of business ethics through its established commitment and heritage.
· The objective of NBL is not only earn profit but also to keep the social commitment and to ensure its co-operation to the person of all level, to the businessman, industrialist -especially whoare engaged in establishing large scale industry by consortium and the agro-based export oriented medium and small industries by self inspiration.
· NBL is committed to ensure its contribution to national economy by increasing its profitability through professional and disciplined growth strategy for its customer and by creating corporate culture in international banking area.
· NBL believes in building up strong-based capitalization of the country.
· NBL is the first and largest private bank is committed to continue its endeavor by rapidly increasing the investment of honorable shareholders into assets.
· NBL has been working from the very beginnings to ensure the best uses of its creativity, well disciplined, well manage and perfect growth.
· NBL is playing a vital role in socio-economic development of Bangladesh by was of linkage with rest of the world by developing worldwide network in domestic and international operation.
· NBL is preoccupied to encourage the investors for purchasing its share by creating the opportunity of long-term investment and increasing the value of share through prosperity as developed by day.
· NBL is committed to continue its activities in the new horizon of business with a view to developing services oriented industry and culture of morality and its maintenance in banking.
The vision of the National Bank Limited is to develop Bangladesh’s economy by profitable investment of public money and build up their confidence to the private institution.
The missions of the National Bank are as follows:
· We aim to come one of the leading Banks in Bangladesh by our prudence, fair and quality of operation.
· We intend to meet the needs of our clients and enhance our profitability by creating corporate culture.
· We believe in strong capitalization.
· We aim to ensure our competitive advantages by upgrading banking technology and information system.
· We maintain high standard of corporate and business Seth’s.
· We provided high quality financial services to strengthen the well being and success of individual, industries and business communities.
· We intend to plat more important role in the economic development of Bangladesh and its finical relations with the rest of the world by interlining both domestic and international l operations.
3.6 Values of National Bank Limited:
To be one social investment by holding and guiding the following values:
To have a strong customer focus and to build relationship based on integrity, superior service and mutual benefit.
To strive for private and sound growth.
To work as a team to serve the best interests of the organization.
To work for continues business innovation and improvements.
To value and respect people and make decisions based on merit.
To provide recognition and reward on performance.
To value open and honest communication.
The strategic planning approach in NBL is top-down. Top management formulates strategy at the corporate level, and then it is transmitted through the division to the individual objectives. Board of directors or Executive committee usually takes the decision. In this process lower level manager are detached in making process, even brainstorming of lower level manager is absent in decision-making and planning process.
3.8 Information and Communication Technology:
ICT has an important and great bearing over the policies and procedures of an organization towards management of bulk amount of data, facts and figures, MIS and information processing as well. It has just been introducing some new means of developed operating system in day-to-day operation of an organization especially of a Bank. To keep track on recent development of ICT and adjustment thereon could enable a Bank to use the ICT in an efficient way. NBL is also not behind of using ICT like other contemporary Banks. Introduction of Islamic Banking Version Integrated Pc BANK 2000 software at NBL enables to provide better service to our valued clients. We facilitate our customers Online Banking Facilities through intranet using V-SAT and Radio Link Connectivity. Out of 24 Branches, we have already brought 20 Branches under the network and within 2005we would be able to bring rest of the 4 branches under online. Moreover, using of SWIFT at 9 nos. of our AD branches has added something new and improved means of overseas communication system. To expand the area of services towards the customers, NBL has joined the ATM network under the management contract of M/S Electronic Transaction Limited (ETN).There are 20 ATM booths situated at metropolitan city of Dhaka, Chittagong & Sylhet and the customers are able to enjoy 24 hours remote banking facilities through using of NBL ATM Debit Card. Above all, Management of NBL is very keen to facilitate its customers IT based banking services like Remote banking facilities , EFT(Electronic Fund Transfer) Service i,e, SMS Banking, Phone banking etc., and considering the present and upcoming setup of IT, we have established a separate ICT Department staffed with some experienced computer professionals, who are directly response NBLs for the overall management of ICT within the bank and to explore the ideas of future innovation.
3.9 National Bank Ltd at a glance:
Showing five years financial activities of NBL from the year 2004 to 2008:
|Paid Up Capital||516.00||619.00||805.00||1,208.00||1,872.00|
|Loans & Advances||23129.65||27020.21||32709.68||32,695.14||44,800.18|
|Net Profit After Tax & Provision||170.02||271.67||507.49||980.47||1265.94|
|Book Value per share||308.42||305.50||314.72||318.94||300.81|
|Earnings per share||37.44||43.85||63.01||102.47||113.84|
|Market Value Per Share||594.50||684.50||768.50||851.50||985.50|
|Number Of Employees||2760||3200||4365||5200||7000|
|Number of Branches||53||69||82||90||101|
|Number of Shareholders||5000||7780||9763||12500||15633|
3.10 Number of branches:
At present, NBL has been carrying on business through its 101 branches spread all over the country. Besides, the Bank has drawing arrangement with 415 correspondents in 75 countries of the world as well as with 32 overseas Exchange Companies. NBL was the first domestic bank to establish agency arrangement with the world famous Western Union in order to facilitate quick and safe remittance of the valuable foreign exchanges earned by the expatriate Bangladeshi nationals.
3.8.1 List of Branches with opening date of National Bank Limited:
|Branch name||Opening Date||Branch name||Opening Date|
|Bangshal||31.07.84||Sk. Mojib RD||28.06.95|
|Mymensing||24.02.87||Z.H.Sikdar Women College||04.11.01
3.11 Division of National Bank Limited
3.12 Company Analysis
3.12.1 SWOT analysis of the NBL
Ø NBL provides its customers excellent and consistent quality in every service. It is of highest priority that customer is totally satisfied.
Ø NBL draws its strength from the adaptabilssity and dynamism it possesses. It has quickly adapted to world class standard in terms banking services. NBL has also adapted state of the art technology to connect with world for better communication to integrate facilities.
Ø All the level of the management are solely directed to maintain a culture for the betterment of the quality of the service and development a corporate brand image in the market through organization wide team approach and open communication system.
Ø NBL utilizes state of the art technology to ensure consistent quality and operation. The proof of that can be found in one of its branches, Scotia that is equipped with Reuters and SWIFT. All these facilities will be introduced in every branch vary shortly.
Ø On of the key-contributing factors behind the sources of NBL are its employees who are highly trained and most competent in their own field. NBL provides their employees training both in- house and out side job.
Ø NBL is free from dependence from the ever-disruptive owner supply of our public sources. The required power is enervated by the company through enervator fed on diesel. Water enervation at present is also done by deep tube wells on site and is abundant in quality.
Ø NBL provides its workforce an excellent place to work in. total complex has been centrally conditioned. The interior decoration was done exquisitely with the choice of soothing colors and blend of artistic that is comparable to any multinational bank.
Ø NBL provides the western union money transfer service for these customers are easily getting the foreign money.
Ø NBL also provide power card service facility. First year Bank is not providing any service charge for the power card.
Ø NBL has very limited human resources compared to its financial activities. There are not many people to perform most of the tasks. As a result many of the employees are burdened with extra workloads and works late hours without any overtime facilities. This might cause high employee turnover that will prove to be too costly to avoid.
Ø Few of the NBL’s products offered to its clients like “Personal Credit (PC)” are lying idle due to proper marketing initiative from the management. These products call easily be made available in attractive way to increase its client base as well as its deposit status.
Ø Government of Bangladesh has rendered its full support to the banking sector for a sound financial status of the country, as it is becoming one of the vital sources of employment in the country now. Such government concern will facilitate and support the long tern vision for NBL.
Ø Emergence of e-banking will open more scope for NBL to reach the clients not only in Bangladesh but also in global arena. It is also facilitate wide area network in between the buyer and the population units of NBL to smooth operation to meet the desired need with least deviation.
Ø All sustain multinational banks and upcoming foreign, private banks posse’s enormous threats to National Bank Limited. If that happens the intensity of competition will rise further and banks will have to develop strategies to compete against an on slough of foreign the banks.
Ø The default risks of all terms of loan have to be minimizing in order to sustain in the financial market. Because, default risk leads the organization towards bankrupt. National Bank has to remain vigilant about this problem so that proactive strategies are taken to minimize this problem if not elimination.
Ø The low compensation package of the employees from mid level to lower level position threats the employee motivation. As a result, good quality employees leave the organization and it effects the organization as a whole.
3.12.2 Analyzing of NBL Performance with financial ratios
Ratio analysis is a powerful tool of financial analysis. A ratio is defined as the indicated quotient of two mathematical impressions and as the relationship between two or more things. In financial analysis, a ratio is used as benchmark for evaluating the financial position and performance of a firm. We are describing some ratios for the measurement of the performance of the bank.
|Net Profit Margin (%)||13.28||1.28||6.59||2.13||12.96|
|Asset utilization (%)||0.01||0.37||0.85||1.49||1.41|
|Net Interest Margin (%)||7.04||12.76||71.67||12.58||16.03|
|Loan Ratio (%)||51.16||41.54||41.45||47.41||46.43|
Return on Equity (ROE)
The rate of return on equity is a good condition last five years. ROE indicates the rate of return on equity capital. Generally bank stockholders prefer ROE to be high. Here, ROE is increased last four years, but last year’s ROE indicates lower than previous year. It is possible, however, that an increase in ROE indicates increased bank’s risk.
From the table we can see that ROE of NBL increasing except 2007. ROE of NBL were 30.79%, 70.54%, 82.94%, 40.55%, and 24.03% in the year 2003 2004 2005 2006 and 2007respectively. ROE has been increased as Net Income of the Bank has been increased over the years.
Return on Asset (ROA)
The rate of return on assets (ROA) measures the ability of management to utilize the real and financial resources of the bank to generate returns. ROA is most commonly used to evaluate bank management.
From the table we can see that ROA of NBL has been increased and decreased over the year from 2003 to 2007. Both ROA and TA of NBL over the last five years.
Net Profit Margin
Net profit margin ratio establishes a relationship between net income and operating income that indicates management efficiency in providing services, administrating and selling the product. It reminds us that bank can increase their earnings and their returns to their stockholders by successfully controlling expenses and maximizing revenues.
The asset utilization ratio represents the ability of management to employ asset effectively to generate revenue. The more income generated per Taka of assets, the more profitable is the bank.
Net Interest Margin
Net Interest Margin measures the net return on the bank’s earning assets.
The loan ratio indicates the extent to which assets are devoted to loan as opposed to other assets.
From the table we can see that Loans and Advances Ratio of the bank has been increasing and decreasing. As bank generate its major portion of income from interest income. So, bank generates its major portion of income from interest income. So, bank has to disburse more Loans and Advances for maximizing their income. In the year 2007, the bank engaged 61.39% of its TA in loans and advances.
3.12.3 Risk Analysis
|Degree of Operating Leverage (DOL)||1.06x||1.09x||1.40x||1.18x||1.30x|
|Degree Of Financial Leverage (DFL)||1.00x||1.07x||1.08x||1.00x||1.07x|
|Degree Of Total Leverage (DTL)||3.10x||3.08x||2.48x||2.18x||2.37x|
3.12.4 Capital Position of National Bank Ltd.:
(Figures in million taka)
|Components of capital structure||2008||2007|
|Proposed bonus share for the year 2005||—||94.00|
|Proposed bonus share for the year 2006||—||121.00|
|Proposed bonus share for the year 2007||—||232.00|
|1%provision on unclassified investment||125.70||102.79|
|Investment Loss Off –setting Reserve||8.15||8.15|
3.12.5 Share Range of National Bank Ltd.:
3.13 Expansion of Customer Service
· Western Union Money Transfer
Joining the world largest money transfer service, NBL has introduced Bangladesh to the fastest track of money remittance. Western Union is a Very familiar name in the world of money transfer for sending speedy money from one country to another country in a few minutes. NBL has made an arrangement with Western Union Remittance Services, which has over 127 years experience for speedy remittance or money with more than 140 countries, Now NBL is on line to establish trade and communication with the prime international banking companies of the world. As a result NBL will be able to build a strong root in international banking horizon. Bank has been drawing arrangement with well conversant money transfer service agency “Western Union”. It has a full time arrangement for speedy transfer of money all over the world.
· Credit Card Activities:
National Bank Limited is the first local bank that introduced credit card: Master Card in Bangladesh in both local and international market in 1997. Master Card captured 35% of credit card through the world. However present market analysis reflects that a large number of people whose average income ranges in above Tk.10000 are using the credit card. Credit card division is continuing there all possible efforts for the participation in the globalize Master Card Program and the number of users of the credit cards huge been increasing day by day.
During the year the bank has ousted a profit of Tk. 96.70 million from credit card business. NBL also get licenses from international brand Visa Card, very soon, it will lunched.
· NBL ATM Service:
National bank limited introduced ATM service to its customer. The card will enable to save our valued customers from any kind of predicament in emergency situation and time consuming formalities. NBL ATM card will give our distinguished clients the
to withdraw cash at any time, even in holidays, 24 hours a day a week.
Charges for ATM card: –
ATM cardholders have to pay 1000 taka annually and in the case of card lost subscriber also pay additional 300 taka.
· NBL Commitment to the society:
NBL always shows a strong and positive commitment to the services of the society. IN 1998, the bank donated Tk. 5.50 million to prime minister Relief fund for the flood- affected people of Bangladesh.
· NBL Power Card:
It is a prepaid card. No need of any account of NBL branch. Application form available at any NBL branch and card center. No annual fee for the first year. Renewal fee tk 200.00 only. Local card limit 1000at minimum or its multiple. International card limit-US$ 500.00 at minimum. Refill through any NBL branch. Drawing cash from NBL ATMs free of charge & from ATMs under Q-Cash network-Tk 10.00 per transaction from other ATM-Tk 100.00. Loading fee for international card will be charged @1% of the loaded amount. Cash withdraw fee (abroad) 2% of the cash drawn amount or US $.2.00, whichever is higher. Accepted at all VISA POS merchants. Cash withdrawal at all ATM booths bearing VISA and Q-Cash logo.( Except HSBC Bangladesh). Utility bill payment. It is a prepaid card. No need of any account of NBL branch. Application form available at any NBL branch and card center. No annual fee for the first year. Renewal fee Tk 200.00 only. Local card limit 1000at minimum or its multiple. International card limit-US$ 500.00 at minimum. Refill through any NBL branch.
|Satmasjid Road||761, Satmashjid Road, Dhanmondi||Dhaka|
|Uttara||Hossain Tower, Next to over Bridge||Dhaka|
|Dilkusha||48, Dilkusha C/A||Dhaka|
|Gulshan||97/1 , Gulshan Avenue||Dhaka|
|Malibagh||474, Malibagh, DIT Road||Dhaka|
|Karwan Bazar||BTMC Bhavan, Karawan Bazar||Dhaka|
|Dhaka Varsity||Administrative Building||Dhaka|
Division Of General Banking
General banking department is the heart of all banking activities. This is the busiest and important department of a branch, because funds are mobilized, cash transactions are made; clearing, remittance and accounting activities are done here.
Since bank is confined to provide the services everyday, general banking is also known as ‘retail banking’. In NBL Bank LTD, the following departments are under general banking section:
i) Account Opening Section
ii) Deposit Section
iii) Cash Section
iv) Remittance Section
v) Clearing Section
vi) Accounts Section
4.1 Account Opening Section:
a) Different Types of Accounts
Account opening is the gateway for clients to enter into business with bank. It is the foundation of banker customer relationship. This is one of the most important sections of a branch, because by opening accounts bank mobilizes funds for investment. Various rules and regulations are maintained and various documents are taken while opening an account. A customer can open different types of accounts through this department. Such as
· Current Deposit.
· Savings Account.
· Short Term Deposit (STD)
· Fixed Deposit
Current account is purely a demand deposit account. There is no restriction on withdrawing money from the account. It is basically justified when funds are to be collected and money is to be paid at frequent interval.
Some Important Points are as follows-
· Minimum opening deposit of TK.1000/- is required;
· There is no withdrawal limit.
· No interest is given upon the deposited money;
· Minimum Tk.1000 balance must always maintain all the time;
This deposit is primarily for small-scale savers. Hence, there is a restriction on withdrawals in a month. Heavy withdrawals are permitted only against prior notice. Some Important Points are as follows-
Minimum opening deposit of Tk.5000 is required;
Minimum Tk.1000 balance must always maintain all the time;
Withdrawal amount should not be more than 1/4th of the total balance at a time and limit twice in a month.
If withdrawal amount exceed 1/4th of the total balance at a time no interest is given upon the deposited money for that month.
Short Term Deposit (STD)
Normally various big companies, organizations, Government Departments keep money in STD account. Frequent withdrawal is discouraged and requires prior notice. The deposit should be kept for at least seven days to get interest. The interest offered for STD is less than that of savings deposit. Interest is calculated based on daily minimum product and paid two times in a year. Interest rate is 6.00%.
The Local Remittance section of National Bank Ltd. Foreign Exchange Branch also issues FDR.
They are also known as time deposit or time liabilities. These are deposits, which are made with the bank for a fixed period, specified in advance. The bank need not maintain cash reserves against these deposits and therefore, the bank offers higher of interest on such deposits.
Opening of fixed Deposit Account: The depositor has to fill an account form where in the mentions the amount of deposit, the period for which deposit is to be made and name/names is which the fixed deposit receipt is to be issued. In case of a Joint name National Bank Ltd. also takes the instructions regarding payment of money on maturity of the deposit. The banker also takes specimen signatures of the depositors. A fixed deposit account is then issued to the depositor acknowledging receipt of the sum of money mentioned there. It also contains the rate of interest and the date on which the deposit will fall due for payment.
Term Deposits: These rates are not negotiable. In this table we can find out the percentage that is given by the bank for special period of time to the customer.
Fixed deposit 3 (three) month
|SL no.||Range of amount||Rate of Interest|
Fixed deposit: 6 (six) month
|SL no.||Range of amount||Rate of Interest|
Fixed deposit: 12 (twelve) month