PRACTICAL ORIENTATION REPORT On AB Bank Limited

View With Charts And Images

PRACTICAL ORIENTATION REPORT?

ON

AB BANK LTD., ROKEYA SORONI BRANCH

INTRODUCTION

1.1.ORIGIN OF PRACTICAL ORIENTATION PROGRAM REPORT

Basically, this report is based on practical data collection method from AB Bank Ltd. as a routine work of making the report. BIBM encourages their students for making the report with completion of theoretical courses of the program of Masters in Bank Management (MBM). In this case was assigned to complete my Practical Orientation Program in AB Bank. This bank is one of the prominent and the first line Private Bank of Bangladesh. Hence collected data by on the job training in AB Bank Ltd. Rokeya Soroni Branch, at Shewrapara, Mirpur, Dhaka-1216.

1.2.OBJECTIVE

The first objective of writing the report is fulfilling the requirement of the MBM program. Beside this, the fundamental objectives of the study within this short program are the followings:

• To achieve an overall practical knowledge concerning banking activities.
• To know how a bank operates their various activities in different areas being a single organization.
• To understand how a bank bridges the depositors and borrowers and serves people in general by providing different services

1.3.RESEARCH METHODOLOGY

For carrying out this internship report had to observe the actual banking operation of AB Bank, Rokeya Soroni Branch, at Shewrapara, Mirpur, Dhaka-1216.Full time practical deskwork and interviewing officers of the bank are the primary material sources of this internship report. Moreover, Annual Report of AB Bank Ltd. training materials books and AB Bank’s website are the secondary sources of our internship report

1.4.SOURCES OF INFORMATION

Primary Sources: Among the primary sources of data, the main sources were:

· To talk with the officials of the Rokeya Soroni branch.

· To observe the daily activities of the officials.

Secondary Sources: Among secondary sources of data, the main sources were:

· Branch Manuals, Annual reports, Web-site of ABBL.

· Different documents and publications regarding Banking functions and activities

· Relevant books.

1.5.LIMITATIONS OF THE STUDY

· The major limitations that have faced during my internship program was time barrier. Two months for Internship Program was not enough to learn all the banking activities.

· It was also difficult to analyze current performance of the respected department.

· Most of the time organizations restrict to disclose their internal information. So to think it was tough to get all the necessary information to prepare the report.

BANK PROFILE

2.1. BACKGROUND OF AB BANK LIMITED

AB bank is one of the first generation bank (PCBs) 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.it incorporated as a public limited under the Companies Act 1913, subsequently replaced by the Companies Act 1994, and governed by the Banking Company Act 1991.

As of December 31, 2007; the Authorized Capital and the Equity (Paid up Capital and Reserve) of the Bank are BDT 2000 million and BDT 4511.59 million respectively. Authorized Capital of the Bank has been increased to BDT 3000 million in the Extra Ordinary General Meeting held on July 16, 2008.

The Sponsor-Shareholders hold 50% of the Share Capital, the General Public Shareholders hold 49.43% and the rest 0.57% Shares are held by the Government of the People’s Republic of Bangladesh. However, no individual sponsor share holder of AB Bank holds more than 10% of its total shares.

The Bank oriented permission to embark upon Merchant Banking from Security and Exchange Commission. It also stared Islamic Banking through its Dhaka Dilkhusha Branch, Dhaka from 21 December 2004 with permission of Bangladesh Bank.

Since beginning, the bank acquired confidence and trust of the public and business houses by rendering high quality services in different areas of banking operations, professional competence and employment of the state of art technology.

During the last 26 years, AB Bank Limited has opened 70 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. AB Bank Limited, the premier sector bank of the country is making headway with a mark of sustainable growth. The overall performance indicates mark of improvement with Deposit reaching BDT 53375.35 million, which is precisely 26.85% higher than the preceding year. On the Advance side, the Bank has been able to achieve 30.76% increase, thereby raising a total portfolio to BDT 40915.35 million, which places the Bank in the top tier of private sector commercial banks of the country. On account of Foreign Trade, the Bank made a significant headway in respect of import, export and inflow of foreign exchange remittances from abroad.

2.2. VISION & MISSION

Vision Statement

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

Mission Statement

“To be the best performing bank in the country

2.3. CORPORATE INFORMATION OF AB BANK LIMITED

2.3.1. Name of the Company

Arab Bangladesh Bank Ltd. Changed its name to AB Bank Limited (ABBL) with effect from 14^th November 2007.

2.3.2. The Logo

Effective 1^st January, 2008 AB Bank Ltd changed its logo. The coat of arms of the new logo is inspired by traditional ‘shital pati’ or ‘sleeping mat’. The knit and the pattern of interlace in the new logo that echoes the intricate weave of sital pati symbolizes bonding. This boning reflects the new sprit of AB bank.

2.3.3. Legal Form:

A public limited company incorporated on 31^st December, 1981 under Companies Act, 1913 and listed in the Dhaka Stock Exchange Ltd and Chittagong Stock Exchange Ltd.

2.3.4. Contact and Communication

Commencement of Business	27th February 1982
Registered Office	BCIC Bhaban, 30-31, Dilkusha C/A
	Dhaka 1000, Bangladesh.
	GPO Box : 3522
	Tel: (+8802) 9560312
	Telefax: (+8802) 9564122, 23
SWIFT:	ABBLBDDH
E-mail:	info@abbank.com.bd
Web:	www.abbank.com.bd
Auditors	ACNABIN (Chartered Accountants)
Tax Consultant	K.M. Hassan & Co. (Chartered Accountants)
Legal Retainer	A. Rouf & Associates

2.3.5. Branches of AB Bank Limited

Table 1: Branches of AB Bank Limited (According to the Division)

Division	Number
Dhaka	26
Chittagong	23
Khulna	06
Rajshahi	06
Sylhet	08
Barisal	01
Total	70

Table 2: Branches of Ab Bank Limited (According to Urban/Rural)

	2006	2007
Urban	50	47
Rural	20	19
Total	70	66

Figure 1: Branch Opening Network

2.3.6. Board of Directors

· M. Wahidul Haque (Chairman)

· Salim Ahmed (Vice Chairman)

· Feroz Ahmed (Director)

· M.A. Awal (Director)

· Shishir Ranjan Bose (Director)

· Faheemul Huq (Director)

· Sayeed Alfaz Hasan Uddin (Director)

• Misaal Kabir (Director)
• Md. Salah Uddin (Director)
• Md Masbahul Haque (Director)
• Md Anwar Jamil Siddiqi (Director)
• Dr. M. Imtiaz Hossain (Director)
• Kaiser A. Chowdhury (Director)

2.3.7. Management Committee

• Kaiser A. Chowdhury President & Managing Director
• Niaz Habib Deputy Managing Director, Corporate
• Faruq M Ahmed Deputy Managing Director, Credit
• Shamim Ahmed Chaudhury Deputy Managing Director, Operations
• M. A. Abdullah Head of Change Management and HRM
• Fazlur Rahman Senior Executive Vice President, Head of Investment Banking
• Badrul H. Khan Senior Executive Vice President,

Chief Finance Officer

• Abu Hena Mustafa Kamal Executive Vice President, Head of Financial Institution and Treasury
• Akhtar Hamid Khan Executive Vice President, Head of Risk Asset Management
• Md. Azad Hossain Executive Vice President, Head of Regional Relationship Management – Dhaka Region
• Reazul Islam Senior Vice President, Head of Information Technology
• Amzad Hossain Senior Vice President, Head of Internal Control & Compliance

2.3.8. Operational Network Organ gram

		Vice President
			Executive Vice President

Figure 2: Operational network Organ gram

(Source: Branch Operating Manual’08)

2.4. NATURE OF BUSINESS

The AB Bank Ltd offers full range of banking services that include

· Deposit banking

· Loans & advances

· Local Remittance

· Export

· Import

· Financing inland

· International remittance

· facilities

The bank offers a full scale commercial banking including

· Foreign Exchange transactions

· Personal

· Credit

· Consumer & Corporate Banking

2.5. PERFORMANCE OF AB BANK LTD.

Table 3: Year-wise Performance of the Bank

(taka in million)

Particulars	2007	2006	Changes in %
Paid up Capital	743.26	571.74	29.9
Total Capital	4785	2664	79.61
Capital Surplus	330	67	392.5
Total Assets	63549	47989	32.42
Total Deposit	53375	42076	26.85
Total Loans & Advances	40915	31289	30.77
Total Contingent Liabilities	27287	21112	29.25
Profit after Tax and provisions	1903	532	257.71
Loans classified during the year	779	205	280.00
Provision kept against classified loans	659	415	58.79
Provision Surplus/(shortage)	56	34	64.70
Cost of Fund	10.54%	10.04%	4.98
Interest Earning Assets	49207	36648	34.27
Non-interest earning assets	14342	11341	26.46
Income from investment	1734	974	78.02

Table 4: Key Performance Indicators

Particulars	2007	% change	2006	2005	2004	2003
Earning per share	256.10	4.28	93.08	31.26	18.19	3.63
P/E Ratio (times)	10.00	4.28	9.59	11.68	20.95	53.89
Book Value per Share (TK.)	607.00	34.37	451.74	293.76	251.22	240.96
Return on Equity (ROE-%)	42.19	104.71	20.61	10.64	7.24	1.53
Return on Asset (ROA-%)	3.41	207.21	1.11	0.50	0.39	0.07
Capital Adequacy Ratio	10.75	16.47	9.23	9.17	9.09	9.17
Credit Deposits Ratio (%)	76.66%	3.09	74.36	78.16	60.10	60.10
Ratio of Classified Loans against total loans and advances	4.31%	7.21	4.02	8.21	11.37	19.25
Asset Utilization Ratio	77.43	1.39	76.37	72.60	68.48	62.58

2.5.1. Deposit

The total deposited amount in AB Bank Ltd. has increased from Tk.47212 mil to Tk. 62341 mil. The growth rate is 26.85%.

Figure 3: Deposit Performance

2.5.2. Deposit Classification

The deposit sector of AB Bank Ltd is segmented mainly into three parts i.e. Savings Deposit, Current Deposit and Fixed Deposit. Deposit concentration mainly titled towards the high cost deposit while low cost deposit comprise of 37.53%.

Figure 4: Deposit Mix (in million taka)

2.5.3. Credit

Total loans and advances increased in 2007 from 40915.35 million to 31289.25 million. The growth rate is 30.76%.

Figure 5: Credit Performance

Figure 6: Sectoral Credit

2.5.4. Operating Profit

The operating profit of AB Bank Ltd is increasing at a rate 72.27%. The trend of operating profit is given below.

Figure 7: Operating Profit

2.5.5. Earning Per Share

Good operational performance enables AB bank Ltd to enhance the shareholders value as the Earning Per Share (EPS) stood up to 175.27 which is 34.67% over last year’s EPS of 134.13.

Figure 8: earning Per Share

2.5.6. Interest Income

Net interest income (NIM) at the end of the year was more than doubled compare to last year. As a matter of fact, interest income from loans and advances grew in volume riding on the positive growth in the loans and advances portfolio of the bank. During the year , growth in interest on loans and advances outpaced the growth in interest expanse on deposits. Moreover, bank increased its income from interbank money market operations during the year which has positive impact on NIM.

Figure 9: Net Interest income

2.5.7. Islamic Banking Profit

Islamic Banking Business (IBB) has made remarkable progress in its third year of operation in 2007 through its efficient service and products designed to cater to particular segment of customers. The scenario of IBB is given below.

Figure 10: IBB Profit, Deposit and Investment

2.6.ONLINE BANKING

AB Bank Ltd. is geared with the latest gadgets of Information Technology to serve their clients. To provide efficient and quick service to its clients AB Bank Ltd provides ‘Composite Network’ among it’s branches through Micro Wave Radio Link.

• Can deposit cash or check in any of the Branches
• Can draw cash of any amount from any of the Branches
• Can deposit money for ATM accounts in any of the Branches

2.7.FUTURE PLAN

To surpass customer expectations, the management likes to turn this bank into a world-class bank so that all banking related services could be provided efficiently and effectively. Automation will play a vital role. All the branches will come under one network so that customers will enjoy the banking services. Corporate clients will be provided banking services at their doorsteps. Mobile ATM services will be introduced so that customers can be served in any corner of the cities. This service will help to ease the tension of carrying large quantity of money during the salary period. Phone banking and internet banking will allow the customers to withdraw and transfer money at any time. More specifically the bank will provide the following:

· Electronic Fund transfer

· Electronic L/Cs

· Mobile ATM service

· Utility bill payment through ATM cards

· One stop service

· SMS Banking.

BRANCH PROFILE

3.1. PROFILE OF AB BANK LTD., ROKEYA SORONI BRANCH

AB Bank Ltd., Rokeya Soroni Branch has started its operation on 13^thApril 2002. It is non Authorized Dealer branch. To meet up the customers’ need the Branch has efficient human resources. The entire job is assigned properly among the officers. The branch provides one stop banking services by using comprehensive banking software.

Corporate Information

Address	923, Rokeya Soroni Road, Shewrapara, Mirpur, Dhaka-1216
Tel:	9014290, 9012607
Fax:	9012607
E-mail:	rkys@abbank.com.bd
Branch Code	4022

3.2. DEPARTMENT AND SECTIONS

q general banking department

· Account Opening

· Local Remittance & Clearing

· Fixed deposit

· Sanchaypatra

· Cash Section

q Loans and Advance department

· Credit Service Section

· Credit Administration Section

· Disbursement Section

· Monitoring, Follow up Section and Recovery Section.

q foreign trade department

· Import Section

q accounts departmen

Figure 11: Branch Organogram

Table 5: Balance Sheet Analysis

In Lac Taka

Particulars	Dec-07	Jul-07	Jul-08	Growth %
Cash	62	66	137	106
Loans & Advances	2835	1608	3402	112
Regular	2403	906	3006	232
SMA	55	178	260	46
Classified	377	524	136	(74)
ABBL G/A-Taka	3874	3728	5864	57
Other Assets	261	303	222	(27)
Total Assets	7031	5705	9625	69
Deposits	6867	5581	9422	69
Current & other demand deposit	869	735	1125	53
Savings & STD	1946	1629	2206	35
FDR & other	4025	3217	6091	89
Other Liabilities	164	124	203	63
Total Liabilities	7031	5705	9625	69

Table 6: Profit & Loss Account Analysis

In Lac Taka

Particulars	Dec-06	Jul-07	Jul-08	Growth%
Interest income	178	87	238	174
Pool Interest Income	443	200	310	55
Interest Expense	372	161	366	127
Net Interest Income	249	125	182	45
Non-funded Income	34	16	34	115
Total income	283	141	216	53
Salary & Allowance	53	27	52	95
Other overhead	42	22	31	40
Net operational income	188	92	133	44

Table 7: Business Analysis

In Lac Taka

Particulars	Dec-06	Jul-07	Jul-08	Growth%
Profit	188	92	133	44
Deposit	6867	5581	9422	69
Loan	2835	1608	3402	112
Import	731	231	720	212
Guarantee	340	50	519	946
Past due loan	432	701	396	(44)

Table 8: Ratio Analysis

Particulars	Dec-07	Jul-07	Jul-08	Growth%
Cost of Deposits	7.06%	6.35%	7.99%	25.88%
Overhead Cost	1.80%	1.93%	1.82%	-5.51%
Cost of Fund	8.86%	8.27%	9.81%	18.57%
Average Interest Income (Yield)	11.21%	11.00%	12.77%	16.08%
Average Interest spread	2.35%	2.72%	2.95%	8.54%
Non-funded income over total income	12.04%	11.31%	15.92%	40.83%
Interest margin	40.13%	43.74%	33.19%	-24.11%
Cost Income Ratio	71.21%	69.49%	77.19%	11.10%
Loan Deposit Ratio	41.28%	28.81%	36.11%	25.34%
Demand vs. Total Deposit	13.05%	13.16%	11.94%	-9.30%
Saving & STD vs. Total Deposit	28.34%	29.18%	23.41%	-19.78%
Time Vs Total Deposit	58.61%	57.65%	64.65%	12.13%
% of Classified Loan	13.30%	32.57%	3.99%	-87.75%
Loan vs. Total Asset	40.32%	28.18%	35.35%	25.43%
Sallary & Allowances vs Operating Cost	56.10%	54.56%	62.53%	14.62%
Profit per Employee	8.56	4.62	5.77	24.95%
Cost per Employee	2.43	1.34	2.27	69.65%
Number of Employee	22	20	23	15.00%
Recovery Income	2.84	1.12	0.08	-93.13%

3.3. HEALTH STATUS OF BRANCH

It depends on the three sectors. They are deposit, credit and profit of the branch.

3.3.1. Deposit Section

Both the deposit in amount and number of deposit account are increasing. For deposit amount the growth rate is 35.79% and for the number of deposit account it is 17.96%.

Table 9: Deposit Status of Rokeya Soroni Branch

Particular	2002	2003	2004	2005	2006	2007	2008
Deposit(in lac)	2746.54	1719.85	3984.15	2975.86	3252.11	6867	9325
No of Deposit	1097	1691	2494	3009	2890	3568	4209

Figure 12: Percentage growth in Deposit amount and Number of deposits

3.3.2. Credit Section

Both the number of credit and the total amount in credit is increasing but in 2005 it started to decrease. But now the credit amount is increasing at a growth rate 19.85% and the number of credit is increasing at a growth rate 31.25%.

Table 10: Credit Status of Rokeya Soroni Branch

Particular	2002	2003	2004	2005	2006	2007	2008
LDOs (in Lac)	594.05	1715	2043.07	2015	1308	2836	3399
No of LDOs	135	343	291	270	209	240	315

Figure 13: Percentage growth in LDOs amount and Number of LDOs

3.3.3. Profit

AB Bandk, Rokeya Sharani Branch has made profit Tk. 197.00 lac during October 2008. During the last year this branch had made profit Tk. 188.00 lac. This next year the branch has targeted to make profit Tk. 300.00 lac. But if the branch continues with this profit figure, it can not able to reach its targeted. The profit history shows that at the end of every quarter the branch makes highest profit than other months and the profit figure goes to the pick at the end of a financial year, i.e., closing the year.

Figure 14: Profit Status of Rokeya Soroni Branch

3.4. CONCLUDING REMARKS

In the Rokeya Soroni Branch the time deposit is increasing highly which becomes the main reason behind the high growth of cost in deposit. Though they can manage low overhead cost. Whereas their growth in cost per employee is higher than the growth in profit per employee . This branch can also manage high non funded income. This branch is normally practiced SME and CCS loans for the socioeconomic condition of Shewrapara. That’s why they can manage a good net interest income. The total classified loans have a sharp decreasing rate in last two years. From the above information we can conclude that this branch is improving but at slow growth rate. Due to socio economic condition of Shewrapara this branch is mainly deposit oriented branch where SME products are highlighted.

GENERAL BANKING

INTRODUCTION

General Banking is the department, which provides day-to-day services to the customers. It consists with different departments. They are:

• Account opening Section
• FDR and Sanchypatra Section
• Deposit Scheme
• Remittance Section
• Cash Section

ACCOUNT OPENING SECTION

This department is worked as a front desk for the ABBL. From that place any person or corporate body may become a customer by opening a savings or current account or other account. So the legal contractual relationship of banker and customer begins from the Account Opening Department.

Kinds of Account

In broadly I can divide Account into two Parts. They are as follows-

(i) Interest Base (Savings A/C and STD)

(ii) Interest Free (Current A/C)

• Savings Deposit Account

The saving deposit account is popular among small-scale savers. Hence, there is a restriction on number of withdrawals and amount to withdraw. The features are

· Interest is paid on this account. AB bank offers 6% rate of interest for SB A/C..

· The number of withdrawals over period of time is limited. Only two withdrawals are permitted per week. If there are more than two withdrawals are made in a week, no interest will be paid for that month.

· If any A/C holder withdraws 10000 he will not get the interest for that month.

· Generally householders, individuals and other small-scale savers are the clients of this account.

· Minimum Balance of Tk 5,000 is to be maintained.

· Interest is paid on daily basis charged half yearly in June and December.

· The service charge for savings account is Tk. 250.00 half yearly.

· Closing charge is normally Tk. 300 with 15% VAT. But in case of closing with in three months the charge will be Tk. 500.

• Current Deposit Account

As it is a demand deposit account, there is no restriction on withdrawing money from the account. It is basically justified when funds are to be collected and money is to be paid at frequent interval. It is most suitable for private individuals, traders, merchants, importers and exporters, mill and factory owners, limited company’s etc. The general characteristics are

· Bank does not pay any interest to CD Account holders.

· There is no restriction on the number and the amount of withdrawals from a current account.

· Service charge and incidental charges are recovered from the depositors since the bank make payments and collect the bills, drafts, cheques, for any number of times daily.

· Businessmen and companies are the main customers of this product.

· The Banks through current accounts grant the loans and advances

· In practice of ABBL, a minimum balance of TK.10000 has to be maintained.

• Short Term Deposit Account (STD)

Normally various big companies, organizations, Government Departments keep money in STD account. the features are

· Customers deposit money for a shorter period of time.

· STD account is treated as semi-term deposit

· The opening balance is 10000.

· In practice, AB bank offers 5.0% rate of interest (half yearly compounding) for STD account on daily minimum balance. Volume of STD A/C is generally high. In AB bank, the minimum balance is 500000 to get the 5% interest.

· Frequent withdrawal is discouraged and requires prior notice.

· the service charge is 250 Tk. Half yearly.

· The charge for closing account is 300 and 500 for closing with in three months of opening.

Basic Requirements for Opening A/C

1. A/C Opening form, that is know as KYC (know your customer), duly filling by A/C holder.

A/C opening from contents: –

a. Title of A/C

b. A/C holder’s Name, Father’s & Mother’s name

c. Nationality

d. Marital Status

e. Present & Permanent Address

f. Contract Number.

g. Occupation, Personal Income, Source of Income

h. Expected Transaction Profile

i. Terms & Conditions form

2. 2 copies Passport size Photograph attested by the introducer.

3. 1 copy Passport size Photograph of Nominee attested by the A/C Holder.

4. Nationality Certificate (any one from below) :

1. Valid Bangladeshi Passport

2. National ID Card

3. Commissioner Certificate

5. Age proved certificate (any one from below)

i) SSC Certificate,

ii) Valid Passport,

iii) Driving License,

iv) Voter ID card etc

6. Five Signatures of A/C Holder

7. One Signature of Nominee.

8. Introduction of an A/C holder

9. Signature in the Signature Specimen Card

10. Estimated Transaction Profile

11. Initial Deposit

i) For Savings A/C: 5000 Tk.

ii) Current A/C:10000 Tk.

Prerequisite of Opening Different Type of Accounts

A) Individual and Joint Account

Any individual can be account holder of AB bank by fulfilling the above requirements. But minimum two and maximum three can form a joint account. For joint account all above requirements need to be fulfilled by all A/C holders. But only one Nominee can be selected (except the A/C holders) by them.

B) Sole Proprietorship Account

Bedsides the basic requirements the extra documents that needed to open a sole proprietorship account are

· Copy of valid Trade License issued by Local Government authority (City Corporation, Pourashava, Union Parishad etc.)

· Permission from Bangladesh Bank (For Buying House, Indenting or other specific businesses)

· TIN issued by Income Tax Authority

C) Limited Company Account

The requirements to open a Limited Company Account

· Bank’s prescribed Account Opening application form

· Certified copy of the Memorandum & Articles of Association of the Company

· Certificate of incorporation

· Certificate of commencement of Business (For Public Limited Companies only)

· Extract of the Board resolution sanctioning the account opening and signing authority

· List of the Director with address in form – XII.

· Photograph of the signatories

· Copy of valid Trade License

· Introducer’s signature in the A/C opening form and at the back of the photograph(s) of Account holder(s).

· List of names with Appointment letter and Specimen Signature of the Persons authorized to operate the Account.

· The personal identity of all the directors or beneficial owner(s) proprietor of the Firm has to be established by any of the documents as mentioned in Individual or Joint Customer category.

D) Partnership Account

a. Bank’s prescribed Account Opening application form signed by the partners in front of BM/RM/CSM

b. Certified copy of Partnership Deed/ Agreement

c. List of the Partners with Address

d. Extract of resolution of the partners Meeting

e. Copy of valid Trade License

f. Photograph of the signatories/ Partners

g. Specimen signature card (To be signed by the signatories in front of BM/RM/CSM

h. Introducer’s signature in the A/C opening form and at the back of the photograph(s) of Account holder(s).

i. Identity of all Partners/ Directors must be verified in line with the requirements for personal customers. Where a formal partnership agreement exists, a mandate from the partnership authorizing the opening of an account and conferring authority on those who will operate it should be obtained.

j. Evidence of the trading address of the business or partnership should be obtained and a copy of the latest report and accounts (audited where applicable).

k. An explanation of the nature of the business or partnership should be ascertained (but not necessarily verified from a partnership deed) to ensure that it has a legitimate purpose.

General Practice of AB Bank Ltd. For All Types of Accounts

• Account Opening Register

After fulfilling all the requirements for opening account necessary entries are given in the account opening register. There are several registers for several accounts as SA, CA and STDR etc. Date of opening, name of the account holder, nature of the business, address, initial deposit and introducer’s information are recorded in that register. New accounts number is given from the list of new numbers provided by the Bank.

• Register of Alphabetic

After opening the account, the name of the account holder is maintain and listed in a register according to his/her name’s first alphabet.

• Check Book

Checkbook is issued to the new customer after two or three days of opening account by receiving checkbook requisition slip. Two separate checkbooks are given for current and saving accounts. CA accounts check book consists 20 and 100 leafs, while SA account checkbook has 20 leafs. There has a check book issue register in this regard; where check book number, leaf number, date issue etc. information are kept on the register. After that the check book requisition slip’s numbers are posting in the computer program which is linked with online.

Closing of Accounts:

1. To close an account, parties may be requested to send an application along with the un?used leaves of the Cheque Books if any, issued to them.

2. On receipt of the application, the following to be taken:

• The signature of the account?holder shall be verified and
• The number of unused Cheque Leaves shall be noted thereon.
• Then the officer in charge, who shall write thereon the balance of the account and initial it.

3. Before the account is closed the Manager shall approve the application after ascertaining the liability, if any, and closing charges to be debited to the account.

4. Debiting the closing charges to the account, the account?holder shall be advised to draw the remaining balance from his account. If however, the account is closed due to recovery of half yearly bank charges, the account?holder shall be advised with a request to return the unused cheque leaves to the Bank.

The following entries shall be passed on the recovery of closing charges

Debit: Party’s Account

Credit: Income Account?closing charges

5. After observing all the above formalities the respective account to be marked as closed in the PC.

6. The “Account Closed” stamp shall be affixed on the Account Opening Form and Specimen Signature Cards.

7. The advice shall be handed over to the account holder or shall be sent to him through cash Department.

8. The application shall be filed with the Account Opening Form and the Specimen Signature Cards shall be kept separately under lock and key.

9. The unused Cheque leaves shall be destroyed by an Authorized Officer, keeping due record in the Application and Account Open & Closed Register, under his signature.

Inter-Branch Transfer Of Accounts:

In case of transfer of accounts from one branch from another branch, there are several steps to be followed by The ABBL Ltd.

· In case of transfer of account from one Branch to another, letter of request of the accountholder desiring the transfer of the account shall be taken in writing by the transferring Branch as per specimen appended below along with the unused cheque book/leaves returned by the account holder.

• The unused cheque leaves shall be destroyed by the Account Opening Officer and recorded on the Account Opening Form and cheque Book Issued Register.

When on receipt of the letter is requested from the party, transferring account from the Branch will do the following steps.

· Account holder’s signature on the letter of request shall be verified from Specimen Signature recorded on the Specimen Signature Card with the branch. The letter of request shall be sent to the Ledger?Keeper for writing the balance of the account on the letter under his initials.

· The approval of the Manager to transfer the account must be obtained.

· All the particulars on Account Opening Form especially “Address and introduction” shall be thoroughly checked.

· Signature should be verified by the authorized officers.

· It is required to ensure that the Account Opening Form and other relevant documents have been checked thoroughly; the forwarding letter for transfer of account should be filled in and signed by the Manager only. When the application for transfer is received duly approved from the Manager, the respective Specimen Signature Cards and Account Opening Form will be taken out. The branch transferring the account shall pass the following entries-

Debit: Party’s Account

Credit: ABBL Account (Transferee branch)

FDR SECTION

This branch maintains a separate section for maintaining Fixed Deposit. FDR is found to be 66.4% of the total deposit of this branch. This is the mobilization unit of the Bank.

Features of FDR

1. It is done for a fixed period of time.
2. The AB Bank ltd issues FDR for different periods with different rate of interest.
3. A normally high rate is offered to FDR. So it is known as high cost liability to the bank.

Steps to open FDR

1. An KYC form should be filled up by the depositor.
2. The specimen signatures of the depositor(s)is taken by the banker
3. To open a FDR account the deposit money can be deposited by in cash or in cheque.
4. Necessary entries are given in computer system.
5. An FDR is then issued to the depositor acknowledging receipt of the sum of money mentioned therein. It also contains the rate of interest & the date on which the deposit will fall due for payment.

Interest Rates on F.D.R

Interest rate differs with different time periods and the amount of deposit. The rate is given below considering these.

Table 11: Interest rate on FDR

Fixed Deposit (Time Deposits) Interest rate
3 (three) Months
000,001 to 10,00,000	11.75%
10,00,001 & above	12.25%
6 (six) Months
000,001 to 10,00,000	12.00%
10,00,001 & above	12.25%
1 (one) Year
000,001 to 10,00,000	12.50%
10,00,001 & above	13%
2 (two) Years	12.75%

Interest Payment:

1. Interest is usually paid annually or on maturity of the fixed deposit. AB bank credits interest on maturity date.
2. Depositors have the options to receive interest through his savings or current account, payment order or in cash at his request.

Premature Encashment of FDR:

1. With post approval of Head Office the AB bank Ltd. Allows the client premature encashment.
2. For premature encashment the saving account’s interest rate is given instead of the FDR interest rate.
3. A closing charge of amount Tk 50 is realized from the FDR A/C.

FDR Renew Process:

• FDR holder can renew his FDR after maturity with interest or without interest at his discretion.
• He can renew it for the same period or any other period.

• FDR is automatically renewed after the date of its maturity if the holder doesn’t encash the same. In case of auto renewal, maturity periodremains same.

In Case of Loss

If the instrument is lost from the possession of the holder, the holder is asked to fulfill the following requirements-

• Holder should inform the bank immediately

• Record a GD (General Diary) in the nearest Police Station.
• Furnish an Indemnity Bond

On fulfilling the above requirements, AB bank is then issued a duplicate FDR.

SANCHAYPATRA

The following Savings Certificates of different denominations are available at the Branch:

· Bangladesh Sanchayapatra (5 years)

· 3 months profit based Sanchayapatra (3 years)

Table 12: Interest Rate on Sanchaypatra

SL	Type of Sanchayapatra	Rate of interest
01	3 months profit based Sanchayapatra (3 years)	11.5%
02	Bangladesh Sanchayapatra (5 years)	12.50%

DEPOSIT SCHEME

MSDS

MSDS means “Monthly Saving Deposit Scheme”. If the client hasn’t any account in the bank he or she can open a MSDS account. MSDS can be opened in different amounts for different time period. The interest rate also differs for different time periods. The rate is given below

Table 13 : Interest Rate on Different Time Period

Amount	Time Period	Interest Rates
Minimum 500 Tk toMaximum 5000 Tk	5 years	11%
Minimum 500 Tk toMaximum 5000 Tk	10 years	11.5%

The monthly subscription shall be deposited by 10^th (calendar date) of each month. If he/she fails to deposit within the time, he/she has to pay the penalty amount and it is 10% of the mon