Overview On Working Process of ABBL

View With Charts And Images

Overview On Working Process of ABBL

EXECUTIVE SUMMARY

The entire working process of ABBL, Islampur Branch is divided into three sections:

(i) General Banking section,

(ii) Credit Section,

(iii) Foreign Exchange Section.

Each section again is consisted of various departments. This report is being presented based on observation from each section. Foremost, have tried to make acquainted with the bank and branch in this report.

Have described every section from the following three perspectives:

1. Understanding,

2. Things are done here,

3. Personal observations.

In first part, have made acquainted with every department of each section. In second part, have shown the works, which are being done in every department of that particular section and in last part, have shown personal observations from each desk where have worked in orientation period. Finally, have presented the performance of this branch for last five years.

1.1Authorization of the study

Banking system occupies an important place in a nation’s economy. A banking institution is indispensable in a modern society. It plays a pivotal role in the economic development of a country and forms the core of the money market in an advanced country. In recent times, the banking sector over the world has been undergoing a lot of changes due to deregulation, technological innovation, globalization etc. Banking sector of Bangladesh is lagging behind in adopting these changes. To thrive well in this changing environment, not only development of appropriate infrastructure is necessary but also infusion of professionalism into banking service is essential. AB bank is designed to focus on theoretical and professional development of people open to take up banking as a career. The course is designed with an excellant combination of theoretical and practical aspects of AB Bank Ltd. for Internship.

As our program director directed us to present the report in different ways, which will be based on the personal observations from every department. The described every department by following way:

(1) Understanding

In this part have tried to make acquainted with every department of this branch.

(2) Things are done here

In this part have tried to see the works, which are being done in each department of the branch.

(3) Personal observations:

In this part have tried to present personal observations from each department of this branch.

Had an opportunity to be acquainted with the practical banking prevail in Islampur Branch, ABBL. The knowledge, which has been acquired in practical orientation Period, has tried level best to show in this report.

1.2 Objective of the study

The main objective of the study is to gather practical knowledge regarding banking system and operation. This practical orientation gives us a chance to Co-ordinate out theoretical knowledge with the practical experience. The following are of objective for this practical orientation in bank:

(a) To apply theoretical knowledge in the practical field.

(b) To help the students in taking up professional courses in the second year.

(c) To have exposure to the functions of general banking section.

(d) To have exposure to the functions of credit section.

(e) To have exposure to the functions of foreign exchange section.

(f) To observe the working environment in commercial banks.

(g) To study existing banker customer relationship.

1.3 Coverage of the study

In this report, three major areas in commercial banks have been covered which are:

(a) General banking section.

(b) Credit section.

(c) Foreign exchange section

1.4 Methodology of the study

For smooth and accurate study every one have to follow some rules & regulation. The study inputs were collected from two sources:

(a) Primary sources

(i) Practical desk work

(ii) Face to face conversation with the officer

(iii) Direct observations

(iv) Face to face conversation with the client

(b) Secondary sources

(i) Annual report of ABBL

(ii) Files & Folders

(iii) Memos & Circulars

1.5 Limitations of the study:

A B Bank is a large financial institution, therefore it is not possible to fund out the true picture within a short period. To prepare the report I have to face some problems & limitations. Those limitations are unavoidable for me. That may causes reduction the quality of my report. Those are:

• Time is very limited because in internship responsibility to attain the organization regularly.
• Bank has no formal guidelines for internship.
• Employees are so busy with their work; they have not enough time to cooperate me.
• Bankers don’t want to disclose all necessary information to me, as I am an external.
• Bank does not have sufficient collection of banking related books, journals, assignment and term paper.

2.1 BACKGROUND OF AB BANK

AB Bank Limited, the first private sector bank under Joint Venture with Dubai Bank Limited, UAE incorporated in Bangladesh on 31st December 1981 and started its operation with effect from April 12, 1982.Dubai Bank Limited (name subsequently changed to Union Bank of the Middleast Limited) decided to off-load their investment in AB Bank Limited with a view to concentrate their activities in the UAE in early part of 1987 and in terms of Articles 23A and 23B of the Articles of Association of the Company and with the necessary approval of the relevant authorities, the shares held by them in the Bank were sold and transferred to Group “A” Shareholders, i.e. Bangladeshi Sponsor Shareholders. During the last 28 years, AB Bank Limited has opened 77 Branches in different Business Centers of the country, one foreign Branch in Mumbai, India and also established a wholly owned Subsidiary Finance Company in Hong Kong in the name of AB International Finance Limited. To facilitate cross border trade and payment related services, the Bank has correspondent relationship with over 220 international banks of repute across 58 countries of the World.

Change of Name:

Arab Bangladesh Bank Ltd. Changed its name to AB Bank Limited (ABBL) with effect from 14 November 2007 Vide Bangladesh Bank BRPD Circular Letter No-10 dated 22 November 2007.Prior to that Shareholders of the Bank approved the change of name in the Extra-Ordinary General Meeting held on 04 September 2007.

New Logo of ABBL:

Effective 01 January 2008, ABBL changed its Logo as well.

2.2 VISION STATEMENT

“To be the trendsetter for innovative banking with excellence & perfection”

2.3 MISSION STATEMENT

“To be the best performing bank in the country”

2.4 GOAL OF THE BANK

To exceed customer expectations through innovative financial products & services and establish a strong presence to recognize shareholders’ expectations and optimize their rewards through dedicated workforce.

Long term Goal:

Keeping ahead of other competitors in productivity and profitability.

Short term Goal:

To attain budgetary targets fixed in each area of Business.

2.5 BOARD OF DIRECTORS

Following members are also in the Management Committee:

• Head of HR & Transformation

• Head of Financial Institutions and Treasury

• Head of Internal Control & Compliance

• Head of Information Technology

• Head of Credit Risk Management

• Head of Credit Administration Management

• Head of Islami Banking Division

• Head of Retail Banking

• Head of SME

• Head of Risk Management Unit

• Head of Corporate & Structured Finance

• Head of Regions

2.6 MANAGEMENT COMMITTEE

2.7 AUDIT COMMITTEE

Shishir Ranjan Bose FCA, Chairman

Mr.M.Wahidul Haque, Member

Salim Ahmed, Member

Badrul H. Khan, Company Secretary

2.8 STRATEGIES OF AB BANK

AB Bank as a provider of diversified financial service covering a wide spectrum of banking products and service is in a position to offer its’ clients, among other facilities, projects finance, corporate financed, syndication service, treasury based financial solution, auto loan, consumer loans, cash flow based financing products including lease financing, equity financing, risk management tools and advisory service. With its’ experience and know how of the financial market, it is uniquely positioned to take advantage of the opportunity offered to it.

Its’ study of engaging its’ client-centric-relationship groups to aggressively market wide range of products and service to its’ clients has yielded rich dividends. In the projects finance segment, it has mainly focused on structured project finance in the infrastructure, health gas and petrochemical sectors.

2.9 OBJECTIVES OF AB BANK.

The objectives of the bank are as follows:

· Give maximum benefits to the customers and the shareholders.

· Expand the economic sector and reach the service to the common people.

· Ensuring the maximum utilization of human resources through increasing the efficiency.

· Increasing the confidence of traders through making the transaction easier.

· Determining the need of the customer and supply short and long-term financial assistance.

· Proper stewardship and utilization of resources.

· Participate in the various weal-fear activities of the country.

· Making capital market more effective through its presence.

· Maximum utilization of information technology and relate the customers in banking activities.

· Strengthening the discipline in bank management and giving the customers best service through establishing long-term relation.

· Earning a handsome growth in the economy through participating in various social activities and in trade and commerce.

· Increasing the goodwill of the bank in home and abroad.

2.10 PRODUCT AND SERVICES

1. Corporate Banking

2. Corporate Lending

3. Structured Finance

4. SME Loan

5. Project Finance

6. Investment Banking

7. Merchant Banking Wing (MBW)

8. Custodial Service

9. Brokerage Service

10. Non Resident Bangladeshi Banking (NRB)

11. Money Transfer

12. Islamic Banking

13. Card0

2.11 Organizational Structure at Islampur Branch

1. S.M. Mehidi Masud (Senior Officer)

2. Afrin Jahan (Officer)

3. Mursada Sultana (Officer Trainee)

4. Najim Uddin (Officer)

&

Clearing

(Md.Azad Jahirul Islam)

Opening

(Sslauddin Rahaman)

Chapter: 03 Credit Section

2.12 PERFORMANCE OF AB BANK

GROWTH IN DEPOSIT

(TK.IN MILLION)200527015200631599200747212200862341200975478

Table-1: Growth in Deposit Source: Annual Report, ABBL

PROFIT OF ABBL

(TK.IN MILLION)2005139200627220077662008130220092316

Table-2: Profit of ABBL

Source: Source: Annual Report ,ABBL

GROWTH IN RESERVE AND REVENUE

(TK. IN MILLION)2005202.482006239.642007286.282008315.732009338.30

Table-3: Reserve & Revenue, Source: Annual Report ABBL

GROWTH IN IMPORT

(TK. IN MILLION)2005857320067645.8020079114.9020081012.1020091145.35

Table-4: Growth in Import

Source: Annual Report, ABBL

GROWTH IN LETTER OF GUARANTEE

(TK. IN MILLION)2005922.662006539.202007873200891020091033

Table-5: Growth in Guarantee

Source: Annual Report ABBL

GROWTH IN EXPORT

(TK. IN MILLION)20054344.2620064488.9020075181.3920085690.1020096610.37

Table6-: Growth in Export Source: Annual Report ABBL

Chapter: 03 Internship position, duties & learning point

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. In ABBL Islampur Branch, the following departments are under general banking section:

3.1 Account opening department

3.2 Local remittance department.

3.3 Cash department.

3.4 Clearing department.

3.5 Collection department.

3.6 Financial Control department.

3.7 Sanchayapatras and wage earners bonds department.

3.1 Account opening department

Understanding

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 walks of life, engaged in numerous economic activities and having different financial status. There is one officer performing various functions in this department.

Things Are Done Here

The following things done in this department:

(i) Accepting of deposit

(ii) Opening of account

(iii) Check book issue

(iv) Transfer of account

(v) Closing of account

PERSONAL OBSERVATIONS

Personal observations from this department:

Accepting of deposits:

In this branch the various types of accounts are offered to various customers, which are grouped in to:

A. Demand deposit account.

B. Time deposit account.

A. Demand deposit account:

The amount in accounts are payable on demand so it is called demand deposit account. The following accounts are under demand deposit accounts:

(a) Current account.

(b) Savings account.

(c) Special Notice time deposit (STD).

(d) Resident foreign currency deposit account (RFCD).

(e) (i) Foreign currency account in dollar (FCAD).

(ii) Foreign currency account in pound sterling (FCAP).

(a) Current account.

This type of account is opened by both individuals and business concerns. Frequent transactions (deposits as well as withdrawal) are allowed in this type of account. A current a/c holder can draw checks on his account for any amount for any numbers of times in a day as the balance in his account permits. This account provides no interest. The minimum balance to be maintained is Tk. 5000. No new account can be opened with a check.

(b) Savings account:

Individuals for savings purposes open this type of account. Current Interest rate of these accounts is 8% per annum. A minimum balance of Tk. 200 is required to be maintained in a SB account interest on SB account is calculated and accrued monthly and credited to the account half yearly. Interest calculation is made for each month on the basis of the lowest balance at credit of an account in that month. A depositor can withdraw from his SB account not more than twice a week up to an amount not exceeding 25% of the balance in the account.

(c) Special Notice time deposit (STD):

The deposits in this account are withdrawal on prior notice varying from 7 to 29 days and 30 days or more. The interest is paid on the balance of the account. Current interest rate is 6.50% per annum.

(d) Resident foreign currency deposit account (RFCD):

A Bangladeshi National can deposit foreign currency (dollar and pound sterling) within 6 month of returning from abroad provided the foreign exchange- (i) Is not a receipt against export of goods or services from Bangladesh, (ii) Is not a commission due from abroad arising from business deal in Bangladesh. The balance in the account is withdrawal only when the account holder goes abroad. He can endorse the amount in his passport. Normally bank does not give any interest on this a/c.

(i) Foreign currency a/c in dollar (FCAD).

(ii) Foreign currency a/c in pound sterling (FCAP).

Bangladeshi nationals working and earning abroad other than from Bangladesh sources can open a foreign currency a/c under this scheme after giving declaration regarding his claim. The a/c holder selects a nominee who will operate the a/c on his behalf and fills in a nomination form. The a/c holder is also required to submit photocopies of passport, work permit /contract. As this is a current a/c no interest is paid.

B. Time deposit account:

The amount in this a/c is payable only after stipulated time. The following A/Cs are under time deposit A/C:

(a) Fixed deposit account.

(b) Bearer certificate of deposits (BCD).

(c) Non-resident foreign currency deposit.

(a) Fixed deposit account:

These are deposit, which are made with the bank for a fixed period specified in advance. The band need not maintain each 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.

Accounting Entries;

On issue of FDR

(i) Clients Account —————————————- Debit

Time Deposit- F.D.R.———————————————- Credit

On payment at maturity

(i) Time deposit-FDR ————————————–Debit

Clients Account ————————————————– Credit

Monthly Accrual

(i) Interest Expense- F.D.R.——————————-Debit

Accrued interest Payable – FDR ——————————- –Credit

On maturity

(i) Accrued Interest payable- F.D.R. ——————–Debit

Clients Account. —————————————————- Credit

(ii) Tellers each ——————————————– Debit

Bearer Certificate of Deposit————————————– Credit

Other Asset- prepaid Interest – BCD————– Debit

Other liability- Interest payable –BCD ———————— Credit

Monthly Amortization.

(i) Interest Expense – BCD —————————– Debit

Other Asset- Prepaid Interest – BCD. ———————– Credit

On payment at maturity

(i) Other liability- Interest payable- BCD ———— Debit

BCD —————————————————-Debit

Tellers cash——————————————————Credit.

(b) Bearer certificate of deposit (BCD):

Bank also receives fund from the general public against BCD, Which are issued for a fixed maturity tern of 3 months, 6 months and 1 year for a face value of Tk. 25,000, Tk. 50,000, Tk. 75,000, and Tk. 1, 00000. For deposit of amount exceeding Tk. 1 lac, the face value will be increased in multiples of Tk. 25,000 each. Rate of interest on BCD is determined on the date of issue of BCD based on demand and supply of funds in the money market, but in no case interest should be allowed exceeding the prescribed rate applicable for fixed deposit of different tenor.

(c) Non resident foreign currency deposit (NFCD):

Non-resident foreign currency deposits are term deposits maturing after 1 month, 3 months, 6 months, and one year. This a/c’s can be opened either in US dollar or pound sterling. No interest is paid in case of premature encashment. The interest rate is fixed as per London inter bank offer rate (LIBOR), Provided by head office. The a/c is closed within one year from the date of return of the a/c holder to Bangladesh for taking up permanent resident.

Opening of account

A. Account opening procedure

a. Any one of the following should properly introduce the account:

i. An existing Current Account holder of the Bank,

ii. Officials of the Bank not below the rank of an Assistant officer.

iii. A respectable person of the locality well known to the Manager/Sub-Manager of the Branch concerned.

b. The type of account, the prospective Customer wishes to open should be ascertain. Highlight the main features of the account obtained necessary papers prescribed for opening of the particular type of account including two copies passport size photo of the account holder duly attested by the Introducer and verified by the Authorized officer of the Bank.

c. Supply a set of printed forms required for opening the account, which will normally include.

i. Advise of new Account

ii. Specimen Signature Cards

iii. Agreement

v. Deposit slip Book

vi. Check Book Requisition slips.

d. Request the customer to carefully read and fill up the printed

Forms supplied to him.

e. Signature of the customer on the reverse of the signature card. 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.

f. The required Account Number for the new Account from the Account Opening Register should be obtained.

g. Obtain the signature and a/c number of the Introducer on the advice of new accountant the place meant for the purpose and gets the signature properly verified by an Authorized official of the Bank.

h. The Deposit slip properly filled in and signed by the customer in duplicate should be collected. 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 Teller’s counter.

i. Place the signature cards, Advice of new account, a copy of Deposit slip, photographs and other necessary papers/documents etc. in a file and 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 bonafide of the Introducer, keeping in view the operations of his account.

j. Get each signature of the Customer/Introducer on the Advice of New A/c and on the signature cards admitted by the authorized official of the Bank using a small rubber stamp. 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.

k. After approval of the opening of the a/c, get the Checkbook requisition slip signed by the customer. Debit the customer’s Account for the amount of Exercise duty payable for the checkbook.

l. Deliver the checkbook to the customer after properly marking the Account number name and place of the branch on each leaf of the checkbook.

m. 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.

B. Classification of customers

a) Individual (personal)

b) Proprietorship (Sole traders)

c) Partnership firms (Registered or Unregistered)

d) Joint stock Companies (Private Limited companies/Public ltd.)

f) Public Sector Corporations

g) Municipalities/Municipal Corporations /Local Bodies etc.

h) Clubs/Societies/Associations/Schools/Colleges/ Universities etc.

i) Executors/Administrators

j) Trustees

k) Illiterate persons

l) Constituted Attorney

m) Wage Earners.

C. Document required for opening new accounts

A. Documents Common for all types of Accounts & Customers:

1. Advise of New Account (in duplicate)

2. Specimen signature cards (in duplicate)

3. Account Opening Agreement Form.

4. Photographs of Account Holders (in duplicate)

5. Deposit Slips Book.

6. Cheque Book Requisition slips.

7. Letter of mandate authorizing another person/s to operate the A/c on behalf of the Account holder, where necessary.

C. Additional document / forms are to be obtained for opening some special accounts.

Joint Accounts of two or more persons

1. Mandate for Operation of Accounts:

A clear authority signed by all the joint A/C holders containing instructions as to who will operate the account and how the account is to be operated should be obtained. The mandate

should mention the name of the persons authorized to draw check. In case of death /insanity/insolvency of one or more of the joint a/c holders, the authority will cease to operate.

2. Executor:

i. Probate: From a court of law along with a certified copy of the will duly attested by a notary public.

ii. A mandate in case there is more than one Executor, signed by all the executors, as to how the a/c will be operated.

3. Administrator:

i. Letter of Administration from a court of Law along with a certified copy duly attested by a Notary Public appointing him as an Administrator of the Estate of the deceased. The operation of the a/c is to be allowed as per instructions of the letter of administration.

4. Proprietorship Firm.

i. Declaration of Proprietorship

ii. Trade License from Municipality.

iii. Account Agreement Form

iv. Mandate if operation by third party is to be allowed.

5. Partnership Firm:

i. Photocopy of partnership deed registered with Registrar of Firm duly attested by Notary Public.

ii Photocopy of Registration Certificate duly attested by Notary Public in case of a Registered Firm.

iii. Letter of Partnership duly signed by all the partners, in case of non-Registered Firm.

iv. Resolution signed by all the partners to open the a/c.

v. Mandate as to operation of the a/c.

vi. Account Agreement Form

vii. Trade License from Municipality.

6. Private limited Joint Stock Company.

i. Memorandum of Association and Articles of Association duly certified by chairman or secretary.

ii. Resolution of the Board duly certified by chairman /Secretary authorizing to open the a/c with the Bank and naming the persons who will operate the a/c, as per provisions of Articles of Association.

iii. Corporate Agreement Form.

iv. Certificate of Incorporation duly certified by Chairman/Secretary.

v. List of Directors duly certified by Chairman/Secretary.

7. Public limited joint Stock company.

i. Memorandum and Articles of Association duly certified by chairman /secretary.

ii. Certificate of Incorporation duly certified by chairman /Secretary.

iii. Resolution of the Board duly certified by Chairman/Secretary authorizing to open the a/c with the Bank and naming the persons who will operate the a/c as per provisions of Articles of Association.

iv. Corporate Agreement Forms

v. Certificate of commencement of business

vi. List of Directors duly certified by Chairman /Secretary.

8. Clubs/Societies/Trustee/Associations/Non-trading Institutions etc.

ii. Resolution-who will operate the a/c. must be noted-for club

iii. In case of death, a/c. should be stopped until the club nominates an other person.

iv. Trust deed is needed-for trustee

9. Municipal Corporation /Local Bodies:

i. Copy of the Municipal Act/charter duly certified by the chairman /Administrator.

ii. Resolution of Municipal committee authorizing the opening of the a/c in the Bank and naming the persons who will operate the a/c duly certified by the chairman/Administrator.

iii. Accounts of constituted Attorney: Certified copy power of Attorney duly verified with the original by the concerned Bank official under seal and signature.

Issue of Check Book

(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.

Issuance of Fresh checkbook

Figure-1: Issuance of fresh Check Book

Source: Account Opening Department, ABBL, Islampur Branch

B. Issue of Duplicate checkbook:

Duplicate checkbook in lieu 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 Proforma agreeing to indemnify the Bank for the lost checkbook. Fresh check 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. Check series number of the new checkbook should be recorded in ledger card signature card as usual. Series number of lost checkbook should be recorded in the stop payment register and caution should be exercised to guard against fraudulent payment.

Account Transfer:

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 with acknowledgment the balance standing at credit in customers account is sent to the other branch through Inter Branch Credit Advice (IBCA).

Closing of account

Upon the request of a customer an account can be closed. After receiving an application from the customer to close an Account, the following procedure is 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.

3.2 LOCAL REMITTANCE DEPARTMENT

UNDERSTANDING:

ABBL has its branches spread throughout the country and therefore, it serves as best mediums for remittance of funds from one place to another. This service is available to both customers and non-customers of the bank. There are four employees including one officer, three assistant officers in this department.

THINGS ARE DONE HERE

The Following things are done in this department:

(a) Issuing & Payment of Demand Draft.

(b) All related correspondence with other Branches & Banks

(c) Compliance of Audit & Inspection

(d) Balance of L.D. payable & L.D. Paid with advice

(e) Attached to SanchayaPatra and Wage Earners Development Bonds.

(f) Payment of Incoming TT.

(g) Issuing, encashment of Pay Order and maintenance of record and proof sheet.

(h) Issuing and encashment of all kinds of SanchayaPatras and wage Earners Development Bond.

(i) All related statements & correspondences with Bangladesh Bank & other Branches.

(j) Issuance of Local Drafts

(k) Issuing and encashment of BCD.

(l) All related correspondences.

(m) Issuing of Outgoing TT.

(n) Issuance of Local Drafts.

PERSONAL OBSERVATIONS

Personal observations from this department:

Remittance of funds:

Any one of the following methods may make remittance of funds from one place to another.

1. Telegraphic Transfer (T.T)

2. Local Draft (L.D)

3. Pay order (p/o)

(1) Telegraphic Transfer (T.T)

It is an order from the Issuing branch to the Drawee Bank /Branch for payment of a certain sum of money to the beneficiary. Telex/ Telegram sends the payment instruction and funds are paid to the beneficiary through his account maintained with the Drawee branch or through a pay order if no a/c is maintained with the drawee branch.

a. T.T issue process:

1. The Applicant fill up the relevant part of the prescribed Application form in triplicate duly signs the same and gives it to the Remittance Department.

2. Remittance Department will fill up the commission part meant for Bank’s use and request the Applicant to deposit necessary cash or check at the Teller’s Counter.

3. The Teller after processing the Application form, Cash or check will validate the Application form .The first copy is treated as Debit Ticket while the second copy is treated as Credit Ticket and sent to Remittance Department for further processing. The third copy is handed over to the applicant as customer’s copy.

4. Remittance Department will prepare the Telex/Telegram in appropriate form, sign it and send it to the telex Operator/Dispatch Department for transmission of the message.

5. Remittance Department will prepare the necessary advice

6. Debit Advice is sent to the client if client’s a/c is debited for the amount of T.T

7. Debit ticket is used to debit the client’s account if necessary.

8. T.T Confirmation Advice is sent to the Drawee Branch.

9. Credit Ticket (2nd copy of the Application Form) is used to credit the ABBL General Accounts.

b. Accounting entry:

Dr. Cash /client’s A/C

Cr. ABBL General A/C

Cr. Communication.

Cr. Commission.

c. Payment of T. T’s:

1. On receipt of T.T payment Instructions the following entries are passed by the Drawee branch if the T.T is found to be correct on verification of Test Number.

i. Dr. ABBL General A/c

Cr. Remittance Awaiting Disposal- T.T Payable A/c

ii. Dr. Remittances Awaiting Disposal -T.T Payable A/c

Cr. client’s Account /P.O. A/C.

In case the beneficiary does not maintain any a/c with the Drawee branch a P.O is issued in favor of the payee and sent to his banker/local address as the case may be.

2. Every branch maintains a prescribed T.T. Payable Register. All the particulars of T.Ts are to be properly recorded in this Register duly authenticated. A separate type of T.T confirmatory advice is sent to the Drawee branch on the same day. On receipt of the T.T Confirmatory advice/ confirmation copy of Telegram from the Issuing branch, the particulars of the T.T are verified with reference to particulars already recorded in the T.T payable Register.

The Confirmatory advises are kept attached with the relative Ticket No further responding entry is required to be passed on receipt of such confirmation copy.

On payment of T.T the particulars are to be incorporated in the Extracts of Responding Debit entries as usual and sent to HORC.

(2) Local Draft (D.D)

Local Draft is an instrument containing an order of the Issuing branch upon another branch known as Drawee branch, for payment of a certain sum of money to the payee or to his order on demand by the beneficiary presenting the draft itself.

a. Process of Issuing a Local Draft.

1. Get the Application form properly filled up and signed by the applicant.

2. Complete the lower portion of the Application Form meant for Bank’s use.

3. Calculate the total Taka amount payable including Bank’s commission /charges etc.

4. If a cheque is presented for the payment of the L.D officer should get the check duly passed for payment by the competent authority and record the particulars of L.D on the back of the cheque.

5. If the purchaser desires his account with the branch to be debited for the amount of L.D the officer should get the A/C. holder’s signature verified properly, from signature card on record of the branch and debit client’s a/c for the total amount including commission/ charges etc.

6. If cash deposit is desired, request the purchaser to deposit the money at the Teller’s Counter.

7. The Teller, after processing the Application Form, Cash or Cheque, will validate the Application form.

8. The first copy of the Application form is treated as Debit Ticket while the second copy is treated as Credit Ticket and sent to Remittance Department for further processing. The third copy is handed over to the Applicant as customer’s copy.

9. Each branch maintains a running control serial number of their own for issuance of L. D. on each Drawee branch. This control serial number should be introduced at the beginning of each year, which will continue till the end of the year.

b. L.D Issue Register:

The Remittance Department maintains prescribed L.D Issue Register. All the required particulars of all L. Ds issued should be entered in that Register duly authenticated. Separate folios are opened for each Drawee Branch. While issuing local Drafts of

TK.50, 000/- and above, branches shall put a test number in RED INK on the upper portion of the drafts so that the Drawee branch can immediately make payment of the L.D on presentation after getting the Test agreed, if otherwise found in order.

c. Issue of Duplicate Draft

Duplicate L.D should not normally be issued unless thoroughly satisfactory evidence is produced regarding loss of a draft. If the L.D is reported lost/stolen, a duplicate draft may be issued by the Issuing branch on receipt of a written request from the purchase.

Before issuing a duplicate L.D the branch should observe the following:

1. Verify the Purchase’s signature on the request letter from the signature appearing on the original application form.

2. Immediately issue a stop payment instruction to the Drawee branch under advice to Head Office and obtain confirmation of non-payment of the L.D in acquisition.

3. After the Drawee branch has acknowledged the stop payment order and confirmed that the local draft in acquisition remains unpaid at their end, the Issuing branch should obtain an Indemnity Bond on stamped paper /letter of indemnity as per prescribed format from the purchase duly signed by him. The branch will thereafter write to head office, for their approval to issue a Duplicate draft.

4. The Head Office on receipt of request from the issuing branch will immediately issue a caution circular to all the branches regarding the loss of the local draft asking them to record stop payment.

5. The Head Office will thereafter issue clearance to the Issuing branch for issuing a Duplicate draft in lieu of original reported lost.

6. Prescribed duplicate issuance charge is to be recovered for issuing the duplicate draft and credited to Income A/c.

d. Cancellation of Local draft

The following procedure should be followed for cancellation of a L.D:

1. The purchase should submit a written request for cancellation of the L.D attaching therewith the original L.D.

2. The signature of the purchase will have to be verified from the original application form on record.

3. Manager /Sub -Manager’s prior permission is to be obtained before refunding the amount on cancellation.

4. Prescribed cancellation charge is to be recovered from the applicant and only the amount of the draft less cancellation charge should be refunded. Commission/Postage etc. charge recovered for issuing the L.D should not be refunded.

5. The L.D should be affixed with a stamp Cancelled under proper authentication and the authorized officer’s signature on the L.D should also be cancelled with Red in but in no case should be torn. The cancelled L.D should then be kept with the relevant Ticket.

6. The original entries are to be reversed giving proper narration. An IBDA for the cancelled L.D should be issued on the Drawee branch.

7. Cancellation of the L.D should also be recorded in the L.D Issue Register.

e. Payment of L.D

1. On receipt of Credit Advice (IBCA) from the Issuing branch the following responding entries are then be passed by the Drawee branch.

Dr. ABBL General A/c Branch

Cr. Remittance Awaiting Disposal L.D payable A/c

Extracts of responding entries are to be sent to HORC on the same day.

2. When a L.D is presented for payment at the paying branch its details are to be carefully examined with references to the following points

a. Whether the draft is drawn on their branch.

b. Whether the draft is crossed or not Amount of a crossed draft is not paid in cash to the payee but to be paid to his account with a bank.

c. Two authorized officials of the Issuing branch must have signed draft. Their signatures are to be verified from specimen signature book let to be sure that the draft is genuine. The verifier should put his initials in red ink against the authorized signatures in the draft.

d. Endorsement on the back of the draft must be regular in case the draft is presented through clearing.

e. The amount of the draft should not exceed the amount protect graphed /written in red ink on the top of the draft.

f. The payee is to be properly identified in case of cash payment.

g. The particulars of the draft i.e. the draft number date amount and the name of payee, should be verified from the L.D payable Register.

3. On payment the L.D is affixed with the branches Paid stamp and signatures there on are cancelled with red ink. The date of payment is recorded in the L.D payable

Register necessary accounting entries are also passed and recorded in the books of Accounts.

Accounting entries

With IBCA:

Dr. Remittance Awaiting Disposal L.D payable a/c

Cr. client’s Account/Teller’s Cash.

Without IBCA

A. Dr. L.D paid without Advice a/c

Cr. Client’s a/c/Teller’s Cash.

B. After receiving the IBCA

i. Dr. ABBL General A/c

Cr. Remittances Awaiting Disposal – L.D payable A/c

ii. Dr. Remittances Awaiting Disposal – L.D payable A/c

Cr. L.D Paid without Advice A/c.

g. Stop payment of L.D

As the Issuing branch issues the draft, the payee or purchaser of the draft cannot give stop payment instructions to the Drawee branch. If a paying branch receives a y request from the payee/endorsee or the purchaser of a draft for stopping payment of the draft, it will ask them to approach the issuing branch for the purpose. The paying branch should however exercise necessary precaution in this regard. Only the Issuing branch can issue instructions for stop payment of draft under special circumstances. However, if a stop payment order is received from a court of law the same should be carried out. If a draft on which stop payment order has been issued buy account is presented for payment the same should be returned unpaid with the answer court prohibited payment quoting court order number and date.

h. Cancellation of L.D

Only the purchaser can request the Issuing branch for cancellation of a L.D. The drawee branch cannot cancel a L.D. The Drawee branch can accept cancellation instructions only from the Issuing branch, when the Issuing branch the relative entry in the ABBL general a/c is reversed cancels a draft and IBDA is issued on the Drawee branch. On receipt of the advice of cancellation through IBDA from the Issuing branch, the Drawee branch should reverse the original liability entries on the strength of the IBDA and record suitable remarks in the L.D payable Register/ related IBCA of the draft.

(3) Pay order

a. Pay order issue process

For issuing a pay order the client is to submit an Application to the Remittance Department in the prescribed form (in triplicate) properly filled up and duly signed by applicant. The processing of the pay order Application form, deposit of cash/cheque at the Teller’s counter and finally issuing an order etc, are similar to those of processing of L.D. Application.

As in case of L.D each branch should use a running control serial number of their own for issuance of a pay order. This control serial number should be introduced at the beginning of each year, which will continue till the end of the year. A fresh number should be introduced at the beginning of the next calendar year and so on.

b. Charges

For issuing each pay Order commission at the rate prescribed by Head Office is realized from the client and credited to Income A/c as usual.

c. Entries

Dr. Teller’s Cash /Client’s a/c ———————————————————— debit

Cr. pay Order a/c. ———————————————————————- credit

Cr. commission a/c. ———————————————————