Performance Analysis of Various Departments of ONE Bank Limited

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Performance Analysis of Various Departments of ONE Bank Limited

INTRODUCTION

Bank act a significant role in the business sectors and in the industrialization of a country. Principally the banks take deposits from the customers against interest and lend it to the borrowers against interest termination period. Under these conditions of bank offers different interest rates and other options to the customers to remit and deposit their money. These options are vary common among all the banks, but only the customer services and other facilities differ from bank to bank.

Within our Country there are government banks, Semi government banks, Private sector commercial bank of Bangladesh and also it is the second-generation private bank in Bangladesh. It started its important moment when Bangladesh economy was undergoing through massive economy reforms and pursuing unilateral and multilateral trade liberalization with the backdrop of the World Bank made international Monitory Fund (IMF) recommendation. This ONE Bank with its 30 branches in manipulate location of the country is providing the best quality services to the clients and customers.

Jatrabari branch is the new branch of the ONE Bank. There are twenty employees working in the ONE Bank, Jatrabari Branch. Md. Sharifur Rahman Assistant Vice President is the head of the branch. They follow on principal, fine span of management as a result of which the management can put straight care on all the divisions.

For the duration of my 3 months internship period from 18^th February to 18^th May 2008 in the Jatrabari branch of ONE Bank. Those types of experiences I have acquired these are bring together to formulate this report.

OBJECTIVE OF THE STUDY

The main purpose of the study is to know the overall operational performance of the ONE Bank Ltd, through different aspects of the banking sector and its effectiveness in this regard. Beside the primary objective of this report is to achieve practical knowledge about banking to observe what the basic bank services,

But the specific objectives of the study are given below –

?To gather comprehensive knowledge on overall banking functions of the ONE Bank Ltd.

? 3 months internship program in the organization in order to know about the policy of general Banking, Account’s and advances and loan recovery techniques.

? Interviewing the concerned people to get information about the organizations present and future plan regarding this topic.

?To trace the origin of the ONE Bank Ltd.

?Collect the documents related to this topic.

? Study of books, journals and articles.

?I have followed the case study method.

?To identify the weakness and problem in successful/effective Credit Management system.

?To analyze the disbursement and recovery performance of Loans and Advances.

?To understand the need and objective of Credit Management.

?To have an idea of the existing system of Loan and Advance

innovated and practiced by the ONE Bank Ltd.

?To explain the meaning and concept of Credit Management.

?To acquire in depth knowledge on about the ONE Bank Ltd. Credit Management.

SCOPE OF THE STUDY

This report covers the ONE Bank Ltd organizational over view, management and organizational structure, functions performed by the ONE Bank Ltd. Scope of this report is very confined concentrate only on the generalization banking system of the ONE Bank Ltd in development of capital market of Bangladesh. Moreover this far evaluating the performance I kept my thinking on accounts, general banking, credit and advances, identification of problems regarding credit management, types of credit extended, sector of credit allocation and foreign exchange only for this reasons my capacity is very little area.

METHOD OF THE STUDY

The study involves various types of information past and present policies, procedures and tactic of credit management. There are various tactic have been used in preparing this report.

SOURCES OF DATA:

The data collection method of study consists of both of primary and secondary sources. But majority of the information was collected from secondary sources.

(1) Primary Sources: The primary sources include interviewed with the bankers, discussion with the officials of the ONE Bank Ltd, experts opinions comments and my work experiences.

(2) Secondary Sources: The Secondary sources are the annual reports, monthly reports of the ONE Bank Ltd, relevant books, newspapers, journals, published documents office circular and others published prospectus.

NON-AVAILABILITY SUFFICIENT DATA:

To recognize the facts about the study in a practical way and more clearly quantitative appearance of information its represented by data. It was very difficult to collect data, which is very essential, because the branch of any new bank that is newly established therefore could not afford required secondary data in all area of the study.

BE SHORT OF RECORDS:

Sufficient books publications; Fats and Figures are not available. These constrict narrowed the scope of accurate analysis. If these limitations were not been there, the report would have been more useful and attractive.

PITIABLE LIBRARY CAPACITY:

Most of the commercial bank has its own modern, rich and wealthy collection of huge and various types of banking related books, Journals, Magazines, Papers, Case studies, Term papers Assignment etc. But the library of the ONE Bank Ltd is not well ornamented.

SLIGHTER PRACTICE:

Practice makes a man competent; I do such kinds of research activity for the first time. For this reason inexperience creates hindrance to go behind the organized and consistent research style.

CHAPTER- 2

Banking overview of

Bangladesh

An overview of

ONE Bank Ltd.

BANKING SYSTEM IN BANGLADESH-A HISTORICAL VIEW:

Bangladesh inherited its banking structure from the British regime and had 44 banks and other financial institutions before the partition of India in 1947.

The Dhaka bank established in 1806 as the first commercial bank in the Bangladesh region of British India. Bengal bank the first British- patronized modern bank established in India in 1784 had opened its two branches in 1873 in Sirajgonj and Ctg. of Bangladesh region. Later in 1862, the Bengal bank purchased the Dhaka bank and opened its first branch in Dhaka in the same year by reconstituting and merging the Dhaka bank. Thereafter, another branch of Bengal bank was opened in Chandpur in 1900 there were six other branches of Bangladesh Bank in operation in the territory of Bangladesh until the partition of British India in 1947.

Following the emergence of Pakistan in 1947 state bank of Pakistan the central bank of the country came into being in July 1948. Later the national Bank of Pakistan a strong commercial bank was set up in 1949. In all 36 schedule commercial banks were in operation in the whole Pakistan until 1971. Pakistanis owned most of these banks and only three of them namely; National Bank of Pakistan, Habib Bank Ltd. and the Australia Bank Ltd. had one branch of each in East Pakistan in 1949. During 1950-58 three other Pakistani owned banks Premier Bank Ltd., Bank of Bhowalpur Ltd. and Muslim commercial bank had opened their branch in East Pakistan. East Pakistan had only to banks owned by local business groups with headquarters in Dhaka. These were the Eastern Mercantile bank Ltd. (presently Pubali Bank Ltd) and Eastern Banking corporation Ltd (presently Uttara Bank Ltd) established in 1959 and 1965 respectively.

In the beginning of 1971, there were 1130 branches of 12 banks in operation in East Pakistan. The foundation of independent banking system in Bangladesh was laid through the establishment of Bangladesh Bank in 1972 by presidential order no – 127 of 1972 (which took effect on 16^th December, 1971). Though the order, the eastern branch of the former state bank of Pakistan at Dhaka was renames the Bangladesh Banks a full fledged office of the central bank of Bangladesh and the entire undertaking of the state bank of Pakistan in, and in relation to Bangladesh has been delivered to the bank.

The Bangladesh Banks (Nationalization) order enacted in 1972 nationalized all banks except foreign ones. Six nationalized Banks were formed through margin the exiting banks of that period.

The rate of growth and development of banking sector in the country was extremely slow until 1983 when the govt. allowed to establish private banks and started denationalization process. Initially, the Uttara Bank in the same year and thereafter, the Pubali Bank, and

the Rupali Bank in 1986.There were no domestic private commercial banks in Bangladesh Until 1982 when the Arab- Bangladesh Banks (AB Bank) commenced private commercial banking in the country. Five more commercial banks came up in 1983 and initiated a moderate growth in banking financial institutions.

There are 52 commercial Banks are survive in Bangladesh, just now. There are some local commercial Banks and some are foreign Commercial Banks.

The local Commercial Bank are given below-

(1) Sonali Bank Ltd.

(2) Rupali Bank Ltd.

(3) Pubali Bank Ltd.

(4) Janata Bank Ltd.

(5) Agrani Bank Ltd.

(6) Al-Arafa Islami Bank Ltd.

(7) Bangladesh Krishi Bank Ltd.

(8) Bangladesh Shilpo Bank Ltd.

(9) Bank Asia.

(10) Basic Bank Ltd

(11) BRAC bank Ltd.

(12) Dhaka Bank Ltd.

(13) Duc Bangla Bank Ltd.

(14) EXIM Bank Ltd.

(15) Eastern Bank Ltd.

(16) First Security bank Ltd.

(17) Grameen Bank Ltd.

(18) Islami Bank Ltd.

(19) Mutual Trust Bank Ltd.

(20) Mercantile Bank ltd.

(21) National Bank Ltd.

(22) National Credit and Commerce Bank Ltd.

(23) One Bank Ltd.

(24) Oriental Bank Ltd.

(25) Prime Bank Ltd.

(26) Premier Bank Ltd.

(27) Southeast Bank Ltd.

(28) Social Investment Bank Ltd.

(29) Shahajalal Islami Bank Ltd.

(30) The City Bank Ltd.

(31) Trust Bank Ltd.

(32) United Commercial Bank Ltd.

There are few Foreign Commercial Bank, these are as follows –

(1) American Express Bank Ltd.

(2) Citi Bank N A

(3) Hong Kong Shanghai Banking Corporation (HSBC).

(4) National Bank of Pakistan.

(5) Standard Charted Bank Ltd.

(6) Shamil Bank Ltd.

(7) State Bank of India.

(8) Worry Bank Ltd.

An overview of ONE Bank Ltd.

History/Background

ONE Bank Limited was incorporated in May, 1999 With the Registrar of Joint Stock Companies under the Companies Act. 1994, as a commercial bank in the private sector.

The Bank is pledge-bound to serve the customers and the community with utmost dedication. The prime focus is on efficiency, transparency, precision and motivation with the spirit and conviction to excel as ONE Bank in both value and image.

The name ‘ONE Bank’ is derived from the insight and long nourished feelings of the promoters to reach out to the people of all walks of life and progress together towards prosperity in a spirit of oneness.

Company Profile

Third generation private commercial bank OBL is a private sector commercial bank dedicated in the business line of taking deposits from public through its various saving schemes and lending the fund in various sectors at a higher margin. However, due attention is given in respect of risk undertaking, risk hedging and if not appropriately hedged, reflection of the same in pricing. In the financing side, the bank’s major concentration is in trade finance covering about 20.88% of total financing as on YE2006 which is mainly a short-term investment. The banks financing concentrate in both, working capital finance and long-term finance. OBL has major concentration of financing in medium and large industries. Since the short-term finance carries low risk compared to long-term finance; the financing strategy of OBL will assist the bank to keep the risk at minimal.

While financing the industrial sector, the major concentration of the bank appeared to be in the textile and RMG sector; both the above sectors cover 30.89% of the total portfolio. OBL also involved in cement construction and transport sector financing. In the investment portfolio, OBL have substantial investment in quoted and non-quoted shares of different organization including some very prospective financial institutions. The bank has shown its acumen in reducing its exposure from ship scrapping sector, steel re-rolling where the bank had investment earlier. With the increase in exposure to RMG, the bank has increased its non-funded business income substantially. With an age of only 8 years, the OBL has taken initiative to launch IT based banking products like ATM facilities, E-banking etc that are praiseworthy.

Our Vision Statement

To establish ONE Bank Limited as a Role Model in the Banking Sector of Bangladesh. To meet the needs of our Customers, Provide fulfillment for our People and create Shareholder Value.

Our Mission Statement

• To constantly seek to better serve our Customers.
• Be pro-active in fulfilling our Social Responsibilities
• To review all business lines regularly and develop the Best Practices in the industry

Working environment to be supportive of Teamwork, enabling the Employees to perform to the very best of their abilities.

Chain Of Command of the Bank

CHAIRMAN

?

Managing Director

?

Executive Vice President

?

Senior Vice President

?

Vice President

?

Senior Asst.Vice President

?

Assistant Vice president

?

Senior Principal Officer

?

Principal Officer

?

Officer

?

Assistant Officer

?

Trainee Asst.Officer

Resources & Facilities

Total full time regular employee strength had increased to 300 by the year-end. Excepting for the new inductees, the remaining employees are all skilled banking professionals with varying degrees of experience and exposure, recruited from the leading local and foreign banks.

The Bank has a strong focus on imparting training towards enhancement of the skills and competencies of the employees. During the year a total of forty-seven training for the employees were organized, both at home and abroad.

Management of the Bank, on a continuous basis, undertakes in-house training initiatives towards raising awareness among the Bank employees with respect to Bank’s policies and instructions and directives of the various regulators so as to ensure that the employees are well informed and empowered towards providing customer services within the framework of laid-down regulatory requirements.

The Bank offers a competitive compensation package towards successfully attracting, retaining and motivating its work force.

Operational Area of ONE Bank Ltd.

Achievements

2004 has been a good year for our bank. We achieved many of our key objectives, made significant provisions and have strengthened our bank’s foundation for a rapid growth in the coming years. We manage our Bank for the benefit of all of our key stakeholders – including shareholders, customers, employees, and the community we serve.

It is a pleasure to inform you that our bank in 2004 recorded an impressive operating profit of Taka 501.49 million during the year, as compared to Taka 260.78 million in 2003. This represents a growth of 92.30 percent over the preceding year. While, during the same period Deposits grew by 35.39 percent and Advances by 58.86 percent.

As reported in the media, the operating profit of the country’s private commercial banks (PCBs) was estimated to have grown by Taka 5.0 billion during the year 2004, which translates to 28.63 Percent growth for the industry over the previous year. Therefore, the growth in percentage terms for ONE Bank has been three & half times the average industry growth. This achievement in a very competitive industry is something that should make us all very proud.

In order to ensure optimization of shareholder capital and our human resources, we continuously assess all of our businesses, based on their return on capital, overall performance and long term potential. In all of our business lines, we continue to pursue ways to reduce cost and operate more efficiently, including technological enhancement. We are also developing standards that are not merely “Common Industry Practice” but the best practices in a given area. This is being appreciated and acknowledged by our valued clients.

Our bank is extremely vigilant in terms of risks monitoring. We keep an eye on loan portfolios and amount of, and changes in, risk provision.

Client in increasing numbers are choosing to do business with our bank because it is customer-driven. No matter whether a corporate or a consumer, we constantly seek to better serve our customer we shall adapt to changing economic conditions, while continuing to develop and enhance our products and services. Our continued customer focus will determine our success in this intensely competitive market place and we shall remain ever committed in meeting this objective. In so doing, we shall strengthen the value of ONE Bank brand.

Chapter -3

General Banking And

Other Services of ONE Bank Ltd.

General Banking Department

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.

Division of General Banking in ONE Bank Limited

Accepting deposits

Accounts Opening

Check Book Issue

Transfer of Account

Closing of Account

Cash Department

Dispatch Section

Remittance

Other services

ATM service

Locker Service

Online Facility

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 ONE Bank Limited 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.

OBL accepts demand deposits through the opening of—

1) Current Account

2) Savings Account

3) Foreign Currency Account

1) Current Account

Both individuals and businesses 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 OBL

• 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;
• Minimum opening balance is TK.5000
• 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 OBL–

• 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 7.5% 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 OBL:

• 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.2000 is required as initial deposit and to earn interest;
• 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/Voter ID card
• Nominee form duly filled in
• 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.

To open a current account the followings are required-

• Passport size photo-2 copies for each member
• Introducer’s signature in the a/c opening card
• Nationality certificate/Photocopy of valid passport/Voter ID card
• Nominee form duly filled in
• Transaction profile duly filled in
• Photocopy of Work Permit
• Employment Certificate duly mentioning salary

b) Time Deposits

A deposit which is payable at a fixed date or after a period of notice is a time deposit. OBL accepts time deposits through—

1) Fixed Deposit Receipt (FDR)

2) Short Term Deposit (STD)

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 a 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. OBL 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 Limited, 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. OBL calculates interest at each maturity date and provision is made on that “Miscellaneous creditor expenditure payable accounts” is debited for the accrued interest.

Interest rate of Fixed Deposit

Rate of Interest varies depending on the period of maturity date as well as the amount.

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 OBL. 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) Short Term Deposit (STD) Account

In OBL, 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 Tk. 2000.

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 OBL, 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.

Total 139 short-term deposits (7 days) and 1 short-term deposit (5 months) is opened in this year, up to 31/07/04 only in Principal Branch.

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.

Account Opening Procedure in a Flow Chart

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 (not below the rank of an Assistant Officer.);

iii. A respectable person of the society or locality who is well known to the Manager/2^nd 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/Voter ID card
• 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

• Name of authorized persons, designation, specimen signature card.
• Trade licence.
• Tax Receipt ( For export/ import )
• Declaration of Proprietorship
• Mandate if operation by third party is to be allowed.

2) Partnership Firm

• Account must be opened in the name of the firm.
• The firm should describe the names and addresses of all partners.
• Partnership deed is required which duly attested by Notary Public
• Trade licence from city corporation is needed.
• Tax receipt ( For import/ export )
• Photocopy of Registration Certificate duly attested by Notary Public in case of a Registered Firm.
• Letter of Partnership duly signed by all the partners, in case of non-Registered Firm.
• Resolution signed by all the partners to open the A/C.
• Mandate as to operation of the A/C.

3) Clubs/Societies/Trustee/Associations/Non-trading Institutions etc

• Certified copy of Resolution for opening and operation of account
• Certified copy of Bye-laws & Regulations/ Constitution.
• Copy of Government approval (if registered).
• In case of death, A/C should be stopped until the club nominates another person.
• Trust deed is needed-for trustee.

Issueing Chequebook to the customers

(A) Issue of fresh Cheque Book

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.

Procedure of issuance of a fresh Cheque Book

• A customer who opened a new A/C initially deposits minimum required money in the account.
• The account opening form is sent for issuance of a Cheque book
• Respected Officer first draws a Cheque book
• Officer then sealed it with branch name.
• In-charge officer enters the number of the Cheque Book in Cheque Issue Register.
• Officer also entry the customer’s name and the account number in the same Register.
• Account number is then writing down on the face of the Cheque book and on every leaf of the Cheque book including Requisition Slip.
• The officer who has the signing authority signs in the leaf where the next requisition slip exists in the Cheque book.
• The name of the customer is also written down on the face of the Cheque book and on the Requisition slip.
• The word “Issued on” along with the date of issuance is written down on the requisition slip.
• Number of Cheque book and date of issuance is also written on the application form.
• Next, the customer is asked to sign in the Cheque book issue register.
• Then the respected Officer signs on the face of the requisition slip put his initial in the register and hand over the Cheque to the customer.

(B) Issue of Duplicate Cheque Cook

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 dishonored, 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.
• Full cover not received.
• 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.

Cash Section

The cash section of ONE Bank Limited, Jatrabari Branch 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

Among different services rendered by a Commercial Bank to its customers, Remittance facilities are very important and popular to the customer. Remittance of funds means sending money from one place to another, Money Order, Telegraphic Money Order through Telegraphic/ Post Office are the common method of sending small amount. But for larger amounts banks provide this facility to its customers by means of receiving money at one branch of the bank and arranging for payment in another branch within/ outside the country.

This facility is extended to its customers to enable them to avoid risk arising out of theft, loss, etc. in carrying of cash money from one place to another for making payment to some one at some other places or to utilize themselves at some other places.

ONE Bank Limited, Gulshan Branch is also providing the assistance to its clients to make their required Remittance. Considering the urgency and nature of transaction the methods of Remittance is categorized as under:

Payment Order (PO)

Demand Draft (DD)

Telegraphic Transfer (TT)

Money Transfer (MT)

Traveler’s Cheques (TC)

Payment Order (PO)

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 Pay Order

a) The issuing branch and the paying branch are the 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 a Pay Order

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

Procedure for Payment of a Pay Order

a) Examine genuinely of the Pay Order

b) Enter in P.O. Register, give contra entry.

c) Debit if found ok for payment.

Payment Order Charges