OVERVIEW OF SOUTHEAST BANK LIMITED
EXECUTIVE SUMMARY
SOUTHEAST Bank Limited is a scheduled Bank under private sector established and was incorporated on March 12, 1995. The main function of the bank is intermediation i.e. collecting funds from the surplus units of the economy in the form of deposit and mobilizing deposit to the deficit units of the economy in the form of credit.
As a second generation bank SOUTHEAST Bank Ltd. shows its excellence in banking arena. The growth of SOUTHEAST Bank is immense and its expansion is accelerated day by day. Among 38 branches Corporate Branch plays a major role in the commercial sector in Bangladesh.
During the 2 months period worked in different departments at Corporate Branch and obtain some meagre idea about General Banking, Accounts Department, and Foreign Trade & Credit Department.
In General Banking learned the process of the Account Opening, formalities involve in different accounts; in the Accounts department which involve in different accounting tools, financial statement, and cash management related issues; in Foreign Trade department learned about L/C formalities, Travellers & Miscellaneous check etc; and in Credit department learned different forms of loan offerings, credit analysis etc which predict the vastness of banking activities.
This report is divided into six chapters. Chapter one contains the elements of project parts and remaining chapter contains the elements of organization parts. In organization chapter one discusses the structure human resource, mission, guidelines, financial information and policy of the organization, etc; General banking includes customer’s services, cash management and remittance. Credit structure describes different types of credit facilities, different level of approval. Foreign Exchange chapter discusses import and export section. Last following chapter discuss findings and bibliography.
CHAPTER ONE
INTRODUCTION
OVERVIEW OF SOUTHEAST BANK LIMITED
BANK PROFILE
Southeast Bank Limited has a long and relishing heritage. It is a second generation bank which was established in 1995 with the vision to stand out as a pioneer banking institution in Bangladesh and contribute significantly to the national economy. It was incorporated on March 12, 1995 as a Public Limited Company. Certificate of Commencement of Business of the bank issued by the registrar of Joint Stock Company and firms was also dated March 12, 1995. The banking license for the bank was issued by Bangladesh Bank on March 23, 1995. The Bank and its first branch at the busiest commercial hub of the country at 1 Dilkusha C/A, Dhaka was opened on May 25, 1995 by Mr. N. Saifur Rahman, the then honorable finance Minister, Govt. of the Peoples Republic of Bangladesh as the chief guest. The authorized capital of the bank is Taka 3,500 Million. Is capital and reserve reached Taka 6,468.36 Million as on December 31, 2007. The Bank had 1116 staff of home 91 are executive, 873 are officers and 152 are other staff as on December 31, 2007.
The sponsors of the bank are the leading business personalities and eminent industrializes of the country having stakes in various segments of the national economy. Currently Mr. Alamgir Kabir FCA a professional CA is the chairman of the bank. Mr. Neaz Ahmed Managing Director of the bank is an eminent banker of the country who has 30 years experience in both foreign and local private sector banks to his credit.
The bank is managed by a team of efficient professionals. There prevails a positive organization climate in the bank that generate filling of dignity, trust, discipline and openness in its people and result in motivating them to post better result continuously in the bank. The culture of maintaining congenial work environment has further enabled the staff to bench mark themselves better against management expectation. A commitment to quality and excellence in service is the hallmark of their identity.
Southeast Bank is today as synonym of quality banking products. It has a divers array of carefully tailor products and services to cater to the needs of all customer segments. They have structured their operational strategies to address the spatial and often complex needs of the customer. In the growth graph it has generated net profit of Taka 1222.97 Million after provision and income tax in the year 2007. The curve keeps soaring upwards with dawn of everyday. Today southeast Bank is one of the leading and most successful banking institutions in Bangladesh with a total assist base of Taka 64370.69 Million as on December 31, 2007. The credit rating of the bank for the year 2007 was done by Credit Rating Agency of Bangladesh (CRAB). They have rated the Bank A-1 for the long term. Commercial Bank Rated in this category are adjudged to be strong banks.
Core values
- Integrity
- Respect
- Fairness
- Harmony
- Team Spirit
- Courtesy
- Commitment
- Service Excellence
- Insight and Spirit
- Enthusiasm for Work
- Business Ethics
Core Strength
· Transparent and quick decision making
· Efficient team of performers
· Satisfied Customers
· Internal control
· Skilled Risk Management
· Diversification
· Core Competencies
· Knowledge
· Experience and Expertise
· Customer Orientation / Focus
· Transparency
· Determination
· Zeal for improvement
· Pursuit of disciplined growth strategy
· Reliability
Corporate Profile
- Name of the Company : Southeast Bank Limited
- Chairman : Alamgir Kabir, FCA
- Vice Chairman : Tillaghar Holdings Limited
- Represented by Abdul Hye
- Managing Director : Neaz Ahmed
- Company Secretary : Muhammad Shahjahan
- Legal Status : Public Limited Company
- Date of Incorporation : March 12, 1995
- Registered Office : 1, Dilkusha C/A (3rd Floor), Dhaka-1000
- Line of Business : Banking
- Authorized Capital : Tk.3,500.00 million
- Paid Up Capital : Tk.2,281.76 million
- Year of Initial Public Offer : 1999
- Stock Exchange Listing : April 10, 2000 (DSE) & April 24, 2000 (CSE)
- Phone : 9550081, 9567271-2
- Fax : 9550086, 9550092-94, 9571052-3
- SWIFT : SEBDBDDHXXX
- E-mail : info@sebankbd.com
- Website : www.sebankbd
Vision
To be a premier banking institution in Bangladesh and contribute significantly to the national economy.
Mission
- High quality financial services with state of the art technology
- Fast customer service
- Sustainable growth strategy
- Follow ethical standards in business
- Steady return on shareholders’ equity
- Innovative banking at a competitive price
- Attract and retain quality human resource
- Commitment to Corporate Social Responsibility
Commitment to Clients
Ours is a customer focused modern banking institution in Bangladesh. We deliver unparalleled financial services to Retail, Small and Medium Scale Enterprises (SMEs), Corporate, Institutional, Governmental and individual clients through branch outlets across the country. Our business initiatives center on the emerging demands of the market. Our commitments to the clients are the following:
- Provide service with high degree of professionalism and use of modern technology.
- Create long-term relationship based on mutual trust.
- Respond to customer needs with speed and accuracy.
- Share their values and beliefs.
- Grow as our customers grow.
- Provide products and services at competitive pricing.
- Ensure safety and security of customers’ valuables in trust with us
Brief profile
General Information
| Certificate of Incorporation | March 12, 1995 |
| Certificate of Commencement of Business | March 12, 1995 |
| Bangladesh Bank license | March 23, 1995 |
| First Branch opened | May 25, 1995 |
| Dividend offered in 2005 | 20% |
| Number of Branches | 31 as on 31/12/2006 |
| Number of Employees | 913 as on 31/12/2006 |
| Global Correspondents | 507 as on 31/12/2006 |
| Listing of Shares | DSE & CSE |
Financial Stability (Taka in million
| Authorized Capital | 3,500.00 | |
| Paid-up Capital | 1056.37 | |
| Paid-up Capital and Reserve | ||
| in 2005 | 2236.84 | |
| Deposit | December 31, 2005 | 38258.15 |
| Loans and advances | December 31, 2005 | 32551.09 |
| Investments | December 31, 2005 | 5113.14 |
| Operating Profit | December 31, 2005 | 1473.44 |
| * Initial public offering of shares of Tk. 150.00 million was completed in 1999 | ||
Chairman of the Bank Serving Period
| Mr. M.A. Kashem | March, 1995 – June, 1998 |
| Mr. Ragib Ali | July, 1998 – June, 1999 |
| Mr. Yussuf Abdullah Harun | July, 1999- September, 2002 |
| Mr. Ragib Ali | September, 2002- August, 2003 |
| Mr. Azimuddin Ahmed | August, 2003 – September, 2004 |
| Mr. Alamgir Kabir, FCA | 29th September, 2004 till date |
| Vice Chairman of the Bank | Serving Period |
| Mr. Ragib Ali | March, 1995 to June, 1998 |
| Mr. Azim Uddin Ahmed | July, 1998 to June, 1999 |
| Mr. Ragib Ali | July, 1999 to September, 2002 |
| Mr. Azimuddin Ahmed | September, 2002 to August, 2003 |
| Mr. Ragib Ali | August, 2003 to September, 2004 |
| M/S Tilla Ghar Holdings Limited represented by Mr. Abdul Hai | 29th September, 2004 till date |
| President & Managing Director of the Bank | Serving Period |
| Mr. Syed Anisul Huq | April 4, 1995 to April 3, 2000 |
| Mr. Shah Md. Nurul Alam | July, 1999 to May 11, 2002 |
| Syed Abu Naser Bukhtear Ahmed | 30th May 2002 to 30th Sep. 2004 |
| Mr. M.A. Muhith (M.D. C.C.) | 01st Oct. 2004 to 20th Oct. 2004 |
| Mr. Neaz Ahmed | 21st October, 2004 till date |
Corporate Branch
Opened on:2005-07-30
Eunoos Trade Centre, Ground Floor, Plot # 52-53, Dilkusha C/A, Dhaka-1000
Phone: 9567764\
Fax: 88-02-9567764 Ext-200
Email: hob.co@sebankbd.com
Target profit 130000000 tk
Head of branch:
Mr. Saleh Uddin Ahmed
Senior Executive Vice President
Target profit 130000000 tk
CORPORATE BRANCH PROFILE
SOUTHEAST BANK LIMITED
Corporate Branch
As on : 20/11/2008
Total Deposit : 6051582429.44
Total Advance : 1863319603.47 Demand Deposit : 551120817.14
Profits / Loss : 113132653.12 Time Deposit : 5447803094.67
Application Name Total Account
CURRENT ACCOUNT 601
SAVINGS ACCOUNT 798
SAVINGS ACCOUNT (STAF) 61
SHORT TERM DEPOSIT (7 DAYS) 61
F.C.A 171
F.C.EXP.REN.QUOTA(D) 4
DEPOSIT AWAITING FOR DISPOSAL 13
MARGIN AGT FBP DOCUMENTS 11
F.C.A (P) 2
F.C.A (E) 3
FIXED DEPOSIT RECPT (1 MONTHS) 4
FIXED DEPOSIT RECPT (2 MONTHS) 2
FIXED DEPOSIT RECPT (3 MONTHS) 460
FIXED DEPOSIT RECPT (6 MONTHS) 147
FIXED DEPOSIT RECPT (12 MONTHS) 717
FDR FOR SENIOR CITIGENS 30
NEW PENSION SAVINGS SCHEMES 4Y 7
NEW PENSION SAVINGS SCHEMES 6Y 41
NEW PENSION SAVINGS SCHEMES 8Y 11
NEW PENSION SAVINGS SCHEMES 10Y 97
WAGE EARNER PSS 4Y 2
WAGE EARNER PSS 6Y 1
WAGE EARNER PSS 10Y 1
PENSION SAVINGS SCHEMES 3
EDUCATION SAVINGS SCHEMES 3
MONTHLY SAVINGS SCHEMES 3 YEAR 71
MONTHLY SAVINGS SCHEMES 5 YEAR 351
DBS 363
MONTHLY INCOME SCHEMES 3 YEAR 1
MONTHLY INCOME SCHEMES 3 YEAR 1
MIS (3 YRS) CIRCULAR 40/2006 3
MIS (5 YRS) CIRCULAR 40/2006 6
DEMAND LOAN 1
TIME LOAN 23
TERM LOAN 36
ADVANCE BLC 15
ADVANCE LTR 78
ADVANCE PC 19
CONSUMER CREDIT SCHEME 10
BLC EDF 14
LOAN AGT FOREIGN BILLS 3
EDUCATION LOAN(SEL) 2
OD AGT FDR 63
OD AGT QASI CASH SECURITY 16
OD AGT NON CASH SECURITY 23
I B P (LOCAL) CLEAN 1
I B P (LOCAL) DOCUMENTS 318
FBP DOCUMENTS 2
Total : 4659
CHAPTER TWO
GENERAL BANKING
Introduction
All business concerns earn a profit through selling either a product or a service. A bank does not produce any tangible product to sell but does offer a variety of financial services to its customers. General banking is the starting point of all the banking operations. It is the department, which provides day-to-day services to the customers. Everyday it receives deposits from the customers and meets their demand for cash by honoring cheques. It opens new accounts, remit funds, issue bank drafts and pay orders etc. Since bank is confined to provide the service everyday, general banking is also known as ‘retail banking’.
Activities of General Banking
· Accounts opening
· Accepting deposits
· Cheque book issue
· Transfer of account
· Closing of account
· Clearing House
· Cash Department
· Dispatch section
· Remittance
· Other services
· Special Saving Scheme
Account opening Section
It is said that, there is no banker customer relationship if there is no A/C of a person in that bank. By opening an A/C banker and customer create a contractual relationship. However, selection of customer for opening an account is very crucial for a Bank.
Before opening of a current or savings account, the following formalities must be completed
1) Application on the prescribed form;
2) The customer information must be filled up with the form;
3) Introduction: The following persons can introduce an A/C opener:
i. An existing current/savings account holder of that branch;
ii. An officer of that branch ;
iii. A respectable person of the society or locality who is well known to the Manager/2nd man of the branch concerned;
4) Furnishing photographs;
5) Banker will supply a set of printed forms required for opening the account, which will normally include:
i. Specimen Signature Cards (SSC);
ii. Deposit Slip Book
iii. Check Book Requisition slips;
6) Customer should carefully read and full-fill the application form;
7) Putting specimen signatures in the specimen card.
8) Any special instructions with regard to operation of the account should be noted on the relevant signature card boldly duly authenticated by the A/C holder should be obtained;
9) The required Account Number for the new Account from the Account Opening Register should be obtained;
10) Obtain the signature and A/C number of the Introducer on the advice and getting the signature properly verified by an Authorized official of the Bank;
11) The Deposit slip properly filled in and signed by the customer;
12) Then the new A/C number should be written at the appropriate place of the Deposit slip and mark new Account on both the copies of the deposit slip and request the customer to deposit the money at the cash counter;
13) Place the signature cards, Advice of new account, a copy of Deposit slip, photographs and other necessary papers/documents etc. in a file;
14) Obtain approval of the Authorized officer for opening the new account on all relevant papers while giving approval for opening an account the Authorized official should be satisfied about the of the Introducer;
15) The Authorized officer on the advice of new A/c and on the specimen signature cards should also attest the signature of the new A/C holder;
16) After approval of the opening of the A/C, get the Cheek book requisition slip signed by the customer;
17) Deliver the checkbook to the customer after properly marking the Account number, name and place of the branch on each leaf of the checkbook;
On completion of account opening open a file for the new a/c holder and file all relevant papers forms etc. Signature cards, copies of Advice, Deposit slip Debit ticket etc. is distributed to concerned departments;
Documents required for all types of Accounts & Customers:
- Advise of New Account (in duplicate)
- Specimen signature cards (in duplicate)
- Account Opening Agreement Form
- Photographs of Account Holders (in duplicate)
- Nationality certificate/Photocopy of valid passport
- Deposit Slips Book
- Cheque book Requisition slips
- Letter of mandate authorizing another person/s to operate the A/C on behalf of the Account holder, where necessary.
- Nominee form duly filled in
- Transaction profile duly filled in
Additional documents are to be obtained for opening some special accounts
1) Proprietorship Firm
ü Name of authorized persons, designation, specimen signature card.
ü Trade licence.
ü Tax Receipt ( For export/ import )
ü Declaration of Proprietorship
ü Mandate if operation by third party is to be allowed.
2) Limited Company:
· Certificate of incorporation
· Certificate of Commencement of Business (In case of Public Limited Company only.)
· List of all Directors, Designation, Address, Specimen Signature
· Memorandum of Association
· Article of Association
· Power of attorney.
· Resolution of the Board of Directors authorizing opening of an account.
Accepting Deposits
Accepting deposits is one of the classic functions of commercial banks. The relationship between a banker and his customer begins with the opening of an account by the former in the name of the latter. Initially all the accounts are opened with a deposit of money by the customer and hence these accounts are called deposits accounts. Banker solicits deposits from the members of the public belonging to different lifestyles, engaged in numerous economic activities and having different financial status. There is one officer performing various functions in this department.
The deposits those are accepted by SOUTHEAST Bank may be classified in to:
a) Demand Deposits
b) Time Deposits.
a) Demand Deposits
The amount in accounts are payable on demand so it is called demand deposit account.
SEBL accepts demand deposits through the opening of—
1) Current account
2) Savings account
3) Foreign currency account
1) Current Account
Both individuals and business open this type of account. Frequent transactions are (deposits as well as withdrawal) allowed in this type of account. A current a/c holder can draw checks on his account, any amount, and any numbers of times in a day as the balance in his account permits.
- Criteria of current account followed by SEBL—
- Generally opened by businessmen, government and semi-government organizations; with proper introduction
- No interest is provided for deposited amount;
- Overdraft is Allowed in this account;
- A minimum balance of Tk. 5000/- has to be maintained. Bank has the right to change this minimum balance requirement.
There are several types of current account available at the SEBL-
· Individual Current Account.
· Partnership Current Account
· Proprietorship Current Account
· Limited Company Current Account
· Account of Societies/Clubs etc.
2) Savings Account
Individuals for savings purposes open this type of account. Current interest rate of these accounts is 6% per annum. Interest on SB account is calculated and accrued monthly and credited to the account half yearly. Interest calculation is made for each month based on the lowest balance at credit of an account in that month.
Criteria of savings account followed by SB:
- An appropriate introduction is required for opening the A/C;
- Frequent withdrawal is not encouraged;
- A depositor may withdraw money from his/her account four times in a week;
- 7 days notice is required for withdrawal of large amount;
- Minimum amount of TK.5000 is required as initial deposit and to earn interest; (actually practice is different, one may allowed to open an A/C without the mentioned amount).
- Depositor may withdraw his/her deposited money up to 25% of the Balance in his/her account without notice. The bank may realize service charge in its discretion;
- Depositor will get interest on the amount deposited in his/her account irrespective of any limit;
There are two type of saving account-
- Individual Saving Account
- Joint Saving Account
To open a saving account the followings are required-
- Passport size photo-2 copies
- Introducer’s signature in the a/c opening card
- Nationality certificate/Photocopy of valid passport
- Nominee form duly filled in(with photo)
- Transaction profile duly filled in
3) Foreign Currency account
Another type of account is foreign currency account, where the individuals who live in abroad or works there can open an account in the Bank and send money from abroad on that account.
Time Deposits
A deposit which is payable at a fixed date or after a period of notice is a time deposit. SEBL accepts time deposits through—
1) Fixed Deposit Receipt (FDR)
2) Short Term Deposit (STD)
3) Schemes Deposit
While accepting these deposits, a contract is done between the bank and the customer. When the banker opens an account in the name of a customer, there arises contract between the two. This contract will be a valid only when both the parties are competent to enter in contracts. As account opening initiates the fundamental relationship & since the banker has to deal with different kinds of persons with different legal status, OBL Officials remain very much careful about the competency of the customers.
1) Fixed deposit Account
These are deposits, which are made with the bank for a fixed period specified in advance. The bank needs not to maintain cash reserve against these deposits and therefore, bank gives high rate of interest on such deposits. A FDR is issued to the depositor acknowledging receipt of the sum of money mentioned therein. It also contains the rate of interest and the date on which the deposit will fall due for payment. SEBL offers FDR for different amounts at different interest rates for different period of time. In the receipt holders’ name and other particulars are kept as secrete documents on the bank. In the documents the name of nominee is also incorporated. If any holder of the receipt wishes to en-cash receipt before the maturity the bank usually do not pay the interest. But ONE Bank, as goodwill pays a lump-sum amount of interest to the FDR holder.
Procedure of Opening Fixed Deposit Account:
Before opening a Fixed Deposit Account a customer has to fill up an application form, which contains the followings:
- Amount in figures
- Beneficiary’s name and address
- Period
- Rate of interest
- Date of issue
- Date of maturity
- How the account will be operated (singly or jointly)
- Signature(s)
- F.D.R. no.
- Special instructions (if any)
After fulfilling the above information and depositing the amount, FDR account is opened and a FDR receipt is issued and it is recorded in the FDR Register, which contains the following information:
- FDR account no.
- FDR (Fixed Deposit Receipt) no.
- Name of the FDR holder with address
- Maturity period
- Maturity date
- Interest rate
Payment of Interest of Fixed Deposit
In case of Fixed Deposit Account the bank does not have to maintain a cash reserve. So ONE Bank limited offers a high interest rate in Fixed Deposit accounts.
It is usually paid on maturity of the fixed deposit. SEBL calculates interest at each maturity date and provision is made on that “Miscellaneous creditor expenditure payable accounts” is debited for the accrued interest.
Loss of FDR
In case of a lost FDR, the customer is asked to record a GD (General Diary) in the nearest Police Station. After that, the customer has to furnish an Indemnity Bond to SEBL. A duplicate FDR is then issued to the customer by the bank.
Renewal of FDR
The FDR becomes automatically renewed for like periods and amounts, unless this are withdrawn by the depositor or, the bank notifies the depositor in writing at least 15 days in advance of the original Or, any renewed maturity date (s) of its desire to terminate the account or change any term and condition of the account.
2) STD Account
In SEBL, Limited companies, corporate groups, various other big companies, organizations, Government Departments keep money in STD accounts. Frequent withdrawal is discouraged and requires 7 days prior notice. STD Account opening procedure is similar to that of the saving account. Initial Account opening minimum amount requirement is Tk. 5000.
In Short Term Deposit account, 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. 5% interest is paid on their deposit. The bank is benefited because they have to pay less interest and the customers are also benefited because anytime they can divert money. In SEBL, usually customers give an instruction to the Bank that their current account will be debited whenever its deposited amount crosses a certain limit and this amount will be transferred to the STD account.
Issueing Chequebook to the customers
(A) Issue of fresh checkbook
Fresh checkbook is issued to the account holder only against requisition on the prescribed requisition slip attached with the checkbook issued earlier, after proper verification of the signature of the account holder personally or to his duly authorized representative against proper acknowledgment. .
(B) Issue of Duplicate cheque book
Duplicate cheque book instead of lost one should be issued only when an A/C holder personally approaches the Bank with an application Letter of Indemnity in the prescribed Performa agreeing to indemnify the Bank for the lost cheque book. Fresh cheque Book in lieu of lost one should be issued after verification of the signature of the Account holder from the Specimen signature card and on realization of required Excise duty only with prior approval of manager of the branch. Cheque series number of the new checkbook should be recorded in ledger card and signature card as usual. Series number of lost cheque book should be recorded in the stop payment register and caution should be exercised to guard against fraudulent payment.
(C) Issue of New Cheque book (FOR OLD ACCOUNT)
All the procedure for issuing a new Cheque book for old account is same as the procedure of new account. Only difference is those customers have to submit the requisition slip of the old Cheque book with date, signature and his/her address. Computer posting is then given to the requisition slip to know the position of account and to know how many leaf/leaves still not used. The number of new Cheque book is entered on the back of the old requisition slip and is signed by the officer.
Procedure of issuance of a new cheque book
If the cheque is handed over to any other person then the account holder the bank addressing the account holder with details of the Cheque book issues an acknowledgement slip. This acknowledgement slip must be signed by the account holder and returned to the bank. Otherwise the bank will not honor any cheque from this cheque book.
At the end of the day all the requisition slips and application forms are sent to the computer section to give entry to these new cheques.
Transfer of an account
- The customer submits an application mentioning the name of the branch to which he wants the account to be transferred.
- His signature cards, advice of new account and all relevant documents are sent to that branch through registered post.
- The balance standing at credit in customer’s account is sent to the other branch through Inter Branch Credit Advice (IBCA).
- No exchange should be charged on such transfer.
- Attention is also given in this connection.
Closing of an account
Upon the request of a customer, an account can be closed. After receiving an application from the customer to close an Account, some procedures are followed by a banker. The customer should be asked to draw the final cheque for the amount standing to the credit of his A/C less the amount of closing and other incidental charges and surrender the unused cheque leaves. The A/C should be debited for the account closing charges etc. and an authorized officer of the Bank should destroy unused cheque leaves.
In case of joint A/C, the application for closing the A/C should be signed by all the joint holders.
A banker can also close the account of his customer or stop the operation of the account under following considerable circumstances:
- Death of customer
- Customer’s insanity and insolvency
- Order of the court
- Specific charge for fraud forgery
Stop payment of cheque
A banker can stop payment of cheque of his customer under following considerable circumstances:
- Firstly the account holder will apply to stop the payment of his cheque
- There is a register for this purpose. It is kept by the authorized officer.
- The officer will see the condition of account and verify everything.
- In the ledger book, the officer will mark with red ink and the cheque will not be paid.
Dishonor of Cheque
If the cheque is dishonoured, there is no practice in OBL to send memorandum (cheque return memo) to the customers. But if the customer wants to know the reason of the dishonor of the cheque than the bank send memorandum stating the reason in the following way:
- Refer to drawer.
- Not arranged for.
- Effects not cleared May be present again.
- Exceed arrangements.
- Payment stopped by drawer.
- Payee’s endorsement irregular/illegible/required.
- Payee’s endorsement irregular, require Bank’s confirmation.
- Drawer’s signature differs/ required.
- Alterations in date/figures/words require drawer’s full signature.
- Cheque is post dated/out of date/mutilated.
- Amount in words and figures differs.
- Crossed cheque must be present through a bank.
- Clearing stamps required/requires cancellation.
- Addition to the discharge of Bank should be authenticating.
- Cheque crossed “Account Payee Only”
- Collecting Bank’s discharge irregular/required.
But if the cheque is dishonored due to insufficiency of funds, OBL inform the A/C holder immediately.
Clearing House
Functions of clearing
- Clearing stands for mutual settlement of claims made in among member banks at an agreed time and place in respect of instruments drawn on each other.
- Clearing house is an arrangement under which member banks agree to meet, through their representative, at the appointed time and place to deliver instruments drawn on them.
- The net amount payable or receivable as the case may be, is settled through an account kept with the controlling bank (Bangladesh Bank/Sonali Bank)
Types of clearing
- Outward clearing
- Inward clearing
Types of returns
- Outward return
- Inward return
Cash section
The cash section of SEBL deals with all types of negotiable instruments, cash and other instruments and treated as a sensitive section of the bank. It includes the vault, which is used as the store of cash, instruments. If the cash stock goes beyond this limit, the excess cash is then transferred to Bangladesh Bank. Keys to the room are kept under control of cash officer and branch in charge. The amount of opening cash balance is entered into a register. After whole days’ transaction, the surplus money remains in the cash counter is put back in the vault and known as the closing balance. Money is received and paid in this section.
Cash Payment
- First, the client comes to the counter with the cheque and gives it to the officer in charge there. The officer checks whether there are two signatures on the back of the cheque and checks his balance in the computer. After that the officer will give it to the cash in charge.
- Then the cash in charge verifies the signature from the signature card and permits the officer in computer to debit the client’s account by giving posting. A posted seal with teller number is given.
- Then the cheque is given to the teller person and he after checking everything asks the drawer to give another signature on the back of the cheque.
- If the signature matches with the one given previously then the teller will make payment keeping the paying cheque with him while writing the denomination on the back of the cheque.
- If the instrument is free of all kind of error the respected officer will ask the bearer to sign on the back of it.
- He will then put his/her initial beside the bearers’ signature. She/he will also sign it on its face, will write down the amount by red pen and will put on a scroll number from his/her scroll register.
- Then the cheque will be sent to the cash counter. At the cash counter bearer will be asked again to sign on the back of the instrument.
- The cash officer will then enter the scroll number in his/her register and will pay the money to the bearer.
- At the end of the day these scroll numbers of the registers will be compared to ensure the correctness of the entries.
Cash Receipt
- At first the depositor fills up the Deposit in Slip. There are two types of deposit in slip in this branch. One for saving account and another for current account.
- After filling the required deposit in slip, depositor deposits the money.
- Officers at the cash counter receives the money, count it, enter the amount of money in the scroll register kept at the counter, seal the deposit in slip and sign on it with date.
- Then this slip is passed to another officer who enters the scroll number given by the cash counter in his/her register along with the amount of the money, sign the slip and keep the banks’ part of the slip. Other part is given to the depositor.
- All deposits of saving account are maintained by one officer and other accounts by another officer.
- At the end of the day entries of both of these registers are cross checked with the register kept at the cash counter to see whether the transactions are correct or not.
Dispatch Section
Those documents that are enter in the branch or exit of the branch must go through this section.
The main objective of this section is-
- Keeping records of the documents send to other branches or banks;
- Letters are send to their respective destination;
- Send these documents safely and correctly;
- Receives documents come through different medium, such as postal service, courier service, via messenger etc;
Two types of letters are continuously received. These are:
- Inward (Registered/Unregistered) letters
- Outward (Registered/ Unregistered) letters
At first recording is required whether it is Inward or Outward Registered/Unregistered letters. Then letters are disbursed to their respective destination. Inward letters are firstly segmented according to their different sections and after that an entry is given to the Inward Register book.
Remittance
Inland Remittance
Bank is a service-oriented industry and deals with public money. They provide services to their clients through different ways. “Transfer of money/fund of one person /customer to another person/ firm/ organization through the bank is called remittance. Any Person can remit funds to any one within the country through any of the branches of the some bank by the following means with nominal charges:
Payment order
This is an instrument issued by the branch of a bank for enabling the Customer/ purchaser to pay certain amount of money to the order of a certain person/ firm/ organization/ office within the same clearing house area of the pay order issuing branch.
The payment order is used for making a remittance to the local creditor. As prevalent, the payment orders are in the form of receipts, which are required to be discharged by the beneficiaries, where applicable on revenue stamps of appropriate value, against payment in cash or through an account. The payment order is not a negotiable instrument and cannot be endorsed or crossed like a banker’s draft.
Characteristics
a) The issuing branch and the paying branch is same. (Self drawing)
b) Applicable for payment with the clearing house area of the issuing branch.
c) This is may be open or can be crossed.
Procedure for issuing P O
a) Obtain P.O. application form duly filled in and signed by the purchaser/applicant.
b) Receive the amount in cash/transfer with commission amount.
c) Issue P.O.
d) Enter in P.O. Register
Payment of Pay order
As the PO issued by the bank is crossed one it is not paid over the counter. On the contrary the amount is transferred to the payees’ account. To transfer the amount the payee must duly stamp the PO.
a) Examine genuinely of the Pay Order
b) Enter in P.O. Register, give contra entry.
c) Debit if found ok for payment.
Demand Draft
The demand draft is a written order by one branch of a bank upon another branch of the same bank to pay a certain sum of money to or to the order of a specified person. This is an order instrument in which the issuing branch gives instruction to the payee/drawee branch to pay certain amount of money to the order of certain person /firm/organization
- A draft is always an order and never a ‘bearer’ instrument.
- It is a negotiable instrument like a cheque i.e. it can be endorsed, collected, and delivered to the endorsee.
- D. D. may be issued to any person and it can also be issued in favor of a firm, company or local authority on written request duly signed by the purchaser.
Issue of a Demand Draft
- The purchaser is asked to complete the press ribbed form which is treated as an application as well as credit voucher.
- If against cash- the application is given to the customer to deposit the cash with the cashier.
- Voucher (Application form) passed duly signed & sealed is delivered to remittance department for preparation of DD. The application for remittance is to be signed by the drawer of cheque.
Telegraphic Transfer (T.T.)
It is an instruction duly tested sent by telex/fax/telegram/ telephone/ express mail etc. to the drawee branch for paying a certain sum of money to a specified person. This mode of transfer of fund may be effected at the written request an account holder of the branch and against value received from him. It is preferable to obtain a confirmatory cheque from the customer.
Characteristics
- Issued by one branch to another branch and massage is tele-communicated
- Remittance / transfer of money is done through tested tele messages.
- Remittance is effected on the basis of tested message.
- Test key apparatus is required.
Money Transfer (M.T)
In the prescribed format the purchaser / the drawer branch instruct the drawer branch to pay a specified sum of money to the payee named in the IBCA preferably by crediting his account.
Issuance Procedure of M.T
- Application in writing in prescribed form
- Deposit of money including commission
- Issue of cost memo
- Entry in M.T. issue register serially
- M.T. advice in IBCA (in block letters) with Test.
Other Services
Online Banking Operation
Bank has Real-time On-line Any branch Banking for the clients to facilitate them to deposit / draw or remit funds from their accounts, from one bank to another.
Meanwhile, for the Smooth operation and efficient functioning of the system they have completed the proper training to the related personnel.
All the Branches and the head office come under the umbrella of on-line any branch-banking network, which have been started online from this year.
Facilities of Online Banking System
Customers of one Branch of SEBL are able to make transaction like cash withdrawals and deposits, electronic fund transfer, balance inquiry, account statements etc. from any of the SEBL Branches Under the Umbrella of Online Banking across the country.
Special Saving Scheme:
Monthly income Scheme
Deposit & monthly Income
| Anyone can invest Tk.1,00,000 or its multiple for 3 years or 5 years term and monthly benefit | Monthly Income | |
| Deposited Amount | 3 Years | 5 Years |
| Tk.1,00,000 | Tk. 975/- | Tk.1000/- |
Procedure for paying monthly income
- Income will start from a minimum gap of 30 days from the date of deposit.
- Monthly income will be automatically credited to your designated CD/SB account.
Monthly Savings Scheme
Who can open account?
- Any person of 18years age.
Installment size Tk 500/ or multiple up to Tk. 50,000/
Installment term
- 3 years or 5 years
| MONTHLY INSTALMENT | TOTAL INCOME | |
| (Tk 500/ or multiple up to Tk. 50,000/ ) | 3 Years | 5 Years |
| Tk. 500/- | Tk. 21,405/- | Tk. 40,750/- |
| Tk. 1,000/- | Tk. 42,810/- | Tk. 81,500/- |
| Tk. 5,000/- | Tk. 2,14,050/- | Tk. 4,07,500/- |
| Tk. 10,000/- | Tk. 4,28,100/- | Tk. 8,15,000/- |
| Tk. 50,000/- | Tk. 21,40,500/- | Tk. 40,75,000/- |
Double Benefit Scheme (DBS)
Some Attractive Features of DBS
- Account can be opened at any time of the month.
- The scheme is admissible for any individual (singly or jointly) or institution.
- The deposit of Tk. 10,000/- or its multiple will be double in 6 years.
- Multiple Accounts can be opened in single name.
CHAPTER FOUR CREDIT
Introducción
have worked in the Credit department about the middle of orientation at SEBL, Corporate Branch. The first thing I have noted that this section is the smallest in terms of space or manpower. The main customers of credit are the corporate customers who are doing actually import-export business.
This department is headed by an AVP. The man next to him is in the rank of Executive Officer. have observed the activities they are performing and try to learn from them. observations are described in the later part of this section.
Why Banks Go for Lending?
Lending is the one of the core functions of a bank. The major portion of bank funds is employed by way of loans and advances, which is the most profitable employment of its funds too. The major part of bank’s income is earned from interest and discount on the funds so lent. It is the major source of income to cover the interest which is incurred due to mobilization of deposit, operating expenses and also to earn profit. Lending nevertheless is not without certain inherent risk largely depending on the borrowed funds a banker cannot afford to take undue risk in lending. While lending his funds, a banker, therefore, follows a very cautious policy and conducts his business on the basis of the well-known principles of sound lending in order to minimize the risk.
Principle of Lending Followed BY SOUTHEAST Bank:
The Principle of lending is a collection of certain accepted time tested standards, which ensure the proper use of loan fund in a profitable way and its timely recovery.
The five principles of lending activities are:
1. Safety
2. Security
3. Liquidity
4. Diversity
1. Safety
Safety should get the prior importance at the time of sanctioning the loan. At the time of maturity the borrower may not be able to pay the loan amount. Banker should not sacrifice safety for profitability.
MBL invests its money on safe and sound projects,
2. Security
Banker should be careful in the selection of security to maintain the safety of the loan. Banker should properly evaluate the proper value of the security. The securities which can be easily liquidated should get more importance. There are two types of securities, Primary Security and Collateral Security.
3. Liquidity
Banker should consider the liquidity position of the bank at the time of sanctioning loan. If bank faces liquidity crisis than it might need to borrow at a very high rate from the money market, and the customer looses their faith on the bank. Loan should be sanctioned considering the maturity of different liabilities that bank need to pay in future so that at that period there will be no crisis.
4. Diversity
Banker should minimize the port polio risk by putting its fund in the different fields. If Bank put its entire loan able fund in one sector it will increase the risk. Banker should distribute its loan able fund in different sectors. So if it faces any problem in any sector it can be covered by the profit of another sector.
Functions of Credit Section:
The following things are done in this department:
· Preparation of sanction letter as per Ho approval.
· Monitoring & follow-up of credit facilities extended from this Br.
· Preparation for proposal of Project loan for boards Approval.
· All works related to custodial service.
· All type of correspondence related to credit section.
· Preparation of Credit Memos for approval/renewal of the Credit facilities.
· Processing of Consumer Credit Loans & preparation of all statements of the Consumer Credit Loans.
Types of Credit Facilities:
The credit section of SEBL Corporate Branch provides two kinds of credit facilities
· Funded Credit Facilities.
· Non-Funded Credit Facilities.
Funded Facilities:
These are facilities that are associated with direct fund involvement.
These include:
a) Secured Overdraft (SOD)
b) Cash Credit (hypothecation)
c) Advance against work order
d) Lease Finance
e) Advance against FDR.
f) Staff Loan
g) House Building loan
h) Time loan
i) Term Loan
j) Small loan Scheme
k) General Loan
Non-Funded Facilities:
There is no direct monetary involvement.
These include:
· Bank Guarantee.
· Letters of Credit.
Credit section processes only bank guarantee, L/C is processed by Foreign Exchange section.
FUNDED FACILITIES
Secured Overdraft:
Overdraft is an arrangement where a borrower is allowed to withdraw over and above his credit balance in his current account up to an agreed limit. In SOD loan normally overdraft facility is allowed only once. Since his account is overdrawn, he can credit any number of times he wants. In SOD, there exists a first class security most commonly FDR, Work order, Savings scheme balance etc. Each overdraft facility requires separate approval.
CC (Hypothecation):
It’s a kind of short term continuous loan which is used for financing working capital of a firm. Overdraft facility is sanctioned against the primary security of hypothecation of raw materials and or finished goods. The borrower by signing a letter of hypothecation, duly stamped, creates a charge for an amount of debt but neither the possession nor the ownership is passed on the bank. The borrower binds him to give possession of the goods to the bank when called upon to do so. Practically the bank has no security in this case except the charge documents. Hence the bank insists on the borrower on furnishing some collateral securities. The borrower is permitted to draw and repay any number of times, provided the total amount overdrawn does not exceed the agreed limit.
Advance against work order: