Practice of Banking in NCC Bank Ltd

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“Practice of Banking in NCC Bank Ltd.”

CHAPTER-1

1.2. Problems and purpose: Main task of this Topic is to find out the Practice banking of NCCBL which is related with work Experience. In order to complete the above topic tried to understand the core functions of the commercial banks and how NCC Bank Ltd applies the Practices Banking in their organization with their clients. The general functions and operations of a commercial bank are given below:-

01. To offer several Deposit schemes beside general accounts.

02. To offer a number of Loan schemes.

03. Accelerate and Promote Local and Foreign Trades.

04. Provide money transfer system to clients and customers.

05. Prevents Money Laundering.

And also another important purpose of this study is to find out the advantage and disadvantage of NCC Bank Ltd by practicing those systems.

1.3. Scope: In order to do this report have collected several relevant reference books having relations with “Practices of Banking in Bangladesh. As was working in the NCC bank, Banani Branch, I got the opportunity to work in the different divisions of the bank. The officers helped me to work and understand various activities of different departments of the overall banking such general banking, loan & advance, foreign exchange, etc. Have also collected some recent informations from Bank’s Annual Report, brushiers and other articles, and NCCBL Web page.

1.4. Limitations: At the time of doing this study we have faced a lot of problems. If we could overcome these problems this study could be more resourceful and could show more clear and specific paths for “Practice of Banking in NCC Bank Ltd.” Some of the limitations of this study have been pointed bellow.

1. Limited time

2. Limitation of resources

3. Absence of a database system

4. Interview of experts

5. Emplyees are too busy.

1.4.1. Limited time: Three month time is not enough to prepare this kind of research based report, at list six months should be given to do this report.

1.4.2. Limitation of resources: Limited resource is one of the biggest problems that we face. We could not find any article or reports done on this problem before in our university library we also could not find enough books in the library from which we could take some important point or could build our concepts to create new ideas.

1.4.3. Absence of a database system: Not only in our university but also in anywhere of our country, we don’t have a resourceful database system, or limited access to those database system, from which we could collect important information to do any research or to rich our knowledge of information.

1.4.4. Interview of experts: I could not arrange any interview with any expert from whom some important ideas or direction could be arranged to complete this study.

1.4.5. Employees are too busy: Though the employees of the branch were so much helpful, they had a little scope to describe us every mechanism in a detailed way, as they are too much busy.

1.5. Sources and methods of collecting information: In this study we used secondary sources of data to know about the NCC Bank Ltd Mission, Vision, Forward, and Services through browsing internet. And different books have also been used to give definitions and other short notes.

1.5.1. Primary Sources of data:

• Face to face conversation with the bank officers & staffs.
• Informal conversation with the clients.

1.5.2. Secondary Sources of data:

• Annual report of NCCBL (2005-2006).
• Different papers, brushiers, and articles of NCCBL.
• Website of NCCBL (www.nccbank-bd.com).
• Auditor’s Report of NCCBL (www.nccbank-bd.com).
• Bank’s record.

1.6. Methodology of the study

§ Analysis technique: All statistical analysis was done by using MS Excel and MS Access.

§ Data tabulation, reporting and findings: After collecting information MS Excel and MS Access were used to analyze information, Graphical tools were used to get clear picture of the situation. Different problems and prospects were sorted and recommendations were made to improve the situation. A report is prepared and submitted to the authority for evaluation.

1.7. Report preview: In the following pages, first of all a brief discussion about the overall position and structer of this bank. Then the core functions, Products & Services, the bank is providing have been added. Immediate after, the brief discussion on operations and functions practicing by the NCC bank ltd appears. Then comes the limitations of banking sector in Bangladesh those we have find out through our study and last of all a contribution has made to find out the ways to achieve a sound banking industry in order to have a strong economic base.

CHAPTER-2

2.1 Historical Background of the organization

National Credit and Commerce bank Ltd, formerly the National Credit Limited was primarily established as an investment company in November 1985 to further the business activity and industrialization in Bangladesh to create new employment opportunities, by acting as a catalyst for the attraction of new entrepreneurs, capital, skills, and technology. It has been converted to schedule commercial bank in May 1993.

The initial authorized capital of the Bank was Tk. 75.00 crore and, paid–up capital Tk. 19.50, crore at the time of conversion which is now raised, to Tk. 39.00 crore paid–up. The sponsors of the new bank consisted of 26 (Twenty six) Members, who comprised the first Board of Directors. The share price of the bank is currently being quoted at both Dhaka and Chittagong Bourses at an average price of Tk. 165/- against per value of Tk. 100/-.

NCC Bank based upon its commendable business performance for the year ended 2000, has meanwhile declared dividend at the rate of 20% (cash 105 plus Bonus 10%). The Bank which started with 16 branches in 1993, has at present 27 (twenty seven) branches and 03 (three) Booths located in prime commercial areas of Dhaka, Chittagong, Sylhet, Feni, Khulna, Jessore and Rangpur District Headquarters, out of which as many as 15 (fifteen) are Authorized Dealer Branches, fully equipped for dealing in direct foreign exchange businesses.

NCC Bank is now positioned to best suit the financial needs of its customers and make them partners of progress.

2.2 Mission of the NCCBL:

A bank is a financial institution which accepts depositors money for safe-keeping and contracts with the depositors to lend this money at interest to individuals who are in need of it’s use and who can give ample security that the loans will be paid. From the profits made from the lending at interest the banker agrees to pay the legitimate depositors a fixed sum of interest besides safe guarding the deposits.

We shall be at the front position of national economic development by;

· Anticipating business solutions required by all our customers everywhere and innovatively supplying them beyond expectation

· Setting industry benchmarks of world class standard in delivering customer value through our comprehensive product range, customer service and all our activities

· Building an exciting team-based working environment that will attract, develop and retain employees of exceptional ability who help celebrate the success of our business, of our customers and of national development

· Maintaining the highest ethical standards and a community responsibility worthy of a leading corporate citizen

· Continuously improving productivity and profitability, and thereby enhancing shareholder value

2.3 Vision of the NCCBL

To be in the front position of national development by providing all the customers inspirational strength, dependable support and the most comprehensive range of business solutions, through our team of professionals who work passionately to be outstanding in everything we do.

2.4 Values of the NCCBL

· To have a strong customer focus and build relationship based on integrity, superior service and manual benefit.

· To work as a team to serve the best interests of the group

· To work for business innovation and improvements.

· To value and respect the people and make decision based on the merit.

· To provide recognition and reward on performance.

· To be responsible, trustworthy and law-abiding in every sphere.

2.5 Goals of the NCCBL

To share a significant portion of the banking sectors by utilizing available manpower and state of the art technology for maximization of the shareholders wealth.

2.5.1 Long Term Goal:

To maximize the wealth of the shareholders.

2.5.2 Short term Goal:

To earn satisfactory rate of return on investment by providing wide range services.

NCC Bank Limited is a progressive commercial bank in private sector in Bangladesh. It’s creates new for its clients. It gives customized services and maintains harmonious banker client relationship. It contributes towards formation of national capital, growth of savings and investment in trade, commerce and industrial sectors. It’s provides different types of commercial banking services to the customers of all strata in the society with in the stipulation laid down in the bank companies Act 1999, rules and regulations by the Bangladesh Bank from time to time.

2.6 Objective of the NCC Bank Limited

• To create new opportunities for its clients.
• To give customized services and maintains harmonious banker-client relationship.
• To contribute towards formation capital, growth of savings & investment in trade, commerce & industrial sectors.

Dividend forecast for next five years:

As per Section 9 (1) (i) of the right issue rules, 1988 the Dividend forecast for next five years is as follows:

2.7 Business Philosophy

The Philosophy of NCCBL is to develop the bank into an unique banking institution. The sponsor perception is that NCCBL should be quite different from other privately owned and managed commercial bank operating in Bangladesh.

The management has turned the bank onto new Business Philosophy. The business of the bank was concentrated on the 64 branches divided into zones. The management of NCCBL leaded by the Mr. Md. Nurul Amin has changed the business philosophy into business matrix. The three main Businesses are:

• Corporate
• Consumer
• Treasury

2.8 Human Resources:

The driving force behind NCCBL has always its employees. The bank recognizes that professional development of its people is vital to establishing workers as a provider of quality service. In this regard, the bank has expanded its training facilities. The number of executives and officers as on 31^st December 2005 was 778 against 660 as on 31th December 2004

2.9 Main Share Holders

Main shareholders comprise leading industrialist and business of the country. The board of directors consists of 26 members. Most of the directors are owners of large of business group having high net worth.

2.10 Main Customers

Due to the predecessor company’s involvement investment financing sector of the country the bank inherited its top corporate customers. Moreover the bank is involved in import trade financing. Bulk importers of consumer durable, food grains industrial raw materials are its customers. The bank has financed in textile and apparels sectors. The bank has a trend of choosing customers from diversified groups. The bank has first class customers in the construction sectors involved in high rise building, heavy construction and roads and high way construction.

2.11 Net work of Branches:

NCC Bank Ltd. always considers client service the most vital factor to face ever-increasing competition and challenge in the Banking sector and as such places on it utmost importance.

NCCBL has 58 (Fifty three) branches all over the country. Of them 21 have been already brought under On-line Banking facility and others are under completion of IT Network. The numbers of authorized dealer branches are 17. Moreover worldwide international correspondent’s network of the Bank has been continuously expanding covering the important countries in all the countries of the world. To cope with modern banking requirement ATM. SWIFT has already been introduced to speed up international transactions and passing of L/Cs at HEAD OFFICE. SWIFT will soon be introduced at all the A.D branches of the Bank.

The name of the branches, their addresses are given in the appendix-1.

2.12 Divisions of NCCBL

2.12.1 Credit Division:

The Credit Division is one of the most essential and valuable divisions of every commercial banks. The Credit Division of the bank deals with issues regarding corporate finance, general credit, special schemes such as House Building Loan (HBL) and Consumer Credit Scheme (CGS) etc.

2.12.2 Audit, Inspection, Recovery Distribution:

Although the loan Administration Division is not at per with the Credit Division of the bank in terms of human resource, the performance of the bank relies heavily on this division. It is responsible for credit monitoring, documentation, distribution L.D.O’s (Loans, Discounts and Overdrafts), preparing MSOCF (Monthly statement of outstanding credit facilities) and dealing with TR (Trust Receipt) etc.\

2.12.3 Central Account Division:

This division monitors several important functions of banking operations performed in different branches across the country. It deals with accounts, financial planning, budget and monitoring, preparation of returns and statement, reconciliation, maintenance of PF (provident Fund), gratuity and superannuating fund, local treasury etc.

2.12.4 Human Resource Division:

The necessary of having an efficient Human Resource Division is one of the unique requirements for the success of any business organization. National Credit and Commerce Bank Limited unlike other commercial banks has a proficient Human Resource Division that deals with recruitment and manpower planning, performance evaluation, disciplinary actions, promotion, cadre charge, employee service rules and benefits, training and development. An Executive Vice President leads this division with the assistance of a Vice President.

2.12.5 Establishment Division:

Logistic and General Services Division is considered as the centre for providing necessary supporting services to other department as will as the employee. The function of this division includes providing utility services, maintenance of premises, and purchase of printing and general stationery, dispatch and transport pool. A Senior Vice President monitors this division.

2.12.6 International Division:

The role of the International Division is very vital to providing various banking service to the clients. This division also maintains the mutual relationship with many corresponding banks on several issues such as agency and credit line arrangement, reconciliation, authorized signature control, TKC (Test key control), issuance of power of attorney, fund management and treasury operations (foreign) etc.

2.12.7 Information Technology Division :

It is very significant to adapt with the ongoing information technology revaluation to provide faster services to the clients. The Information Technology Division supervises the overall computerization of the banking operations and networking, provides system support, deals with data processing and data entry, procures and maintain hardware, maintain and develop software required by the bank to facilitate and support the day to day operations.

2.12.8 Card Division:

The core functions of the Card Division include dealing with issues regarding debit card, ATM card, and customer and vendors management. A first Vice President heads this division.

2.12.9 Marketing and Branch Division:

This division is expected to deal with issues regarding marketing of asset and liability products, branch expansion etc. this division involves introducing new financial products. It also deals with renovation of new branches and location of new branches.

2.12.10 Training Division:

The main objective of this division is to make the employees efficient. Usually this division offers training to their employee time to time. This is helpful to the employee to do their job efficiently and effectively.

2.12.11 Public Relation Division:

The main objective of the public relation department is to make a bridge within the organization and outsiders. This division directly deals with general public.

2.13 ORGANIZATIONAL STRUCTURE:

The Organizational Flow Chart of NCC BANK LTD:

Executives

Non-Executives

2.14 Findings

2.14.1 Deposit of NCCBL

As on December31, 2007 banks total deposit stood at Tk. 34901.77 million. Deposit growth over last 05 years appended in the chart below

Table Deposit of NCCBL

2.14.2. Loan and advance of NCCBL

During the year total advance stood at tk32687.75 million deposit advance ratio was 94% in 2007

TableLoan and advance condition

2.14.3

Investment of NCCBL

Investment figure of the bank as on 31^st December, 2007 stood at Tk.6,266.62 million as against Tk. 3,552.08 million of the previous year I.e. 2006 Increase being 76.42% .

2.14.4 Foreign exchange business of NCCBL

During 2007, the bank Handled export & import business to the tune of tk. 9,577.92 million & Tk. 28,779.21 million respectively.

Figure in Million

2.14.5 Remittance Business of NCCBL

The NCC bank has been trying to motivate expatriates to send their hard earned money to their family in Bangladesh. In 2006 remittance was 3,856.00 million and 2007 Increase 7,443.50 million.

Figure in Million

2.14.6 Operational Profit of NCCBL

2.14.7 Present Situation:

The following table shows the balance sheet as at December31, 2007

CHAPTER-3

3.1 General banking department

General section is considered as the direct customer service center. It is the starting point of all the banking operation. It opens new accounts, remits funds, honor cheques, takes deposits, issues bank draft and pay order etc. General banking is also known as retail banking. Following are the major section in General banking.

• Account opening section.
• Remittance section.
• FDR section.
• Cash section.
• Clearing & Bills Section
• Dispatch Section

3.2 Account opening section

According to the law and practice the banker – customer relation arises only from contract between the two. And opening of account is the contract that establishes the relationship between a banker and a customer. So this section plays a very important role in attracting customer and therefore should be handled with extra care.

Individual or firm intended to open account in the branch applies for opening account in a prescribed form. The form is duly filled in by the applicant himself. The applicant is also required to fill the specimen signature sheet. Applicant must submit required documents with application form. Different kinds of document are needed for different kinds of account. For individual only introduction by another account holder of the bank is sufficient. But for firm and others, relevant documents must be submitted. Then the authorized officer scrutinizes the introduction and examines the documents submitted. If everything appears satisfactory then he opens account.

Types of Account

Following types of account are generally opened by the NCC Bank:

• Savings Deposits Account.
• Current Account.
• Short Term Deposit.
• Fixed Deposit (FDR/SSS/SDS).
• Money Double Program.
• Foreign Currency Account (Resident/non-resident).
• Premium/Instant Earning Term Deposit.
• Others.

3.2.1 Savings Deposits Account.

NCC bank ltd. Offers interest on every day’s balance in savings account @ 06.00%.

Requirements for opening Savings Deposits Account

• Photocopy of valid passport or personal ID issued by ward commissioner/union perished chairmen.
• 2 copies of account holder’s recent photo duly attested by the introducer.
• 1 copy of nominee’s photo duly attested account holder.
• Introducer who have account in NCCBL, Uttara branch.
• Nominee form signed by nominee and duly attested by account holder.
• Minimum cash deposit Tk. 1,000 at the time of opening account.

To open a saving account customer will have to fill up an application from supplied by the bank. The form contains following particulars:

1. Name of the applicant.
2. Name of father/husband of the applicant.
3. Profession of the applicant.
4. Two Photographs.
5. Present address.
6. Permanent Address.
7. Introduction by any account holder or by a person acceptable to the bank.
8. Verification by the concerned officer of the branch.
9. Signature of the applicant.

After filling the form applicant will have to sign thrice on the specimen signature card. Most important thing is that these signatures must match with the signature on application form. These documents are then checked by the concerned officer and sent to the manager of the branch. Manager rechecks all the information and talk with the applicant to know more about him/her. When he is fully satisfied he put his signature on the form and verifies the signature. If any special instructions are required manager write it down at the end of the specimen signature card.

The form and the specimen signature card then sent to the officer who put an account number on the form and on the card. After completion of the above mentioned formalities a new account is opened with the bank for the new customer. Account can be open in joint name by to or more parties but who will operate the account it should be mentioned in the application. To obtain a cheque book the new account holder must deposit at least Tk. 1000/= in the account. This amount may vary depending on nature of the relationship of the person with the bank.

3.2.2 Current Account

NCC bank ltd. facilitates customers with different types of current account. There are current accounts for individuals, joint, proprietorship firms, partnership firms, limited company, educational institution, club, society, association etc.

Account opening forms for these categories are different. Some terms and documents may differ but the overall process of account opening is similar to that of the saving account. Here I like to state what kinds of information to be furnished in the form and which documents customer should provide.

Requirement of CD account may vary upon individual, legal status of company and clubs, societies and associates.

3.2.2a. Individual CD A/C

· 2 copies passport photos of the A/C holder.

· Valid passport must be renewed/commissioner certificate of the A/C holder.

· Introducer.

· Photos of A/C holder must be attested by the introducer

· Transaction declaration and KYC form should be fully filled up.

· Minimum amount of taka 5000 is required to open CD A/C.

3.2.2.b. Joint CD A/C

· 2 copies passport photos of the A/C holder.

· Valid passport must be renewed/commissioner certificate of the A/C holder.

· Introducer.

· Photos of A/C holder must be attested by the introducer.

· Transaction declaration and KYC form should be fully filled up.

· Minimum amount of taka 5000 is required to open CD A/C.

3.2.2.c. Sole Proprietorship

· 2 copies passport photos of the A/C holder.

· Valid passport must be renewed/commissioner certificate of the A/C holder.

· Introducer.

· Photos of A/C holder must be attested by the introducer.

· Transaction declaration and KYC form should be fully filled up.

· Minimum amount of taka 5000 is required to open CD A/C.

· Valid Trade license.

· Valid Seal.

3.2.2.d. Partnership

· If two members formed partnership (2+2)=4, 4 copies passport photos are required.

· Valid passport must be renewed/commissioner certificate of the A/C holder.

· Introducer.

· Photos of A/C holder must be attested by the introducer

· Resolution, memorandum and article of association of particular company man-dad who is going to operate the A/C Tk 1000, registration form registry office.

· Certificate of incorporation and partnership Deed.

· Transaction declaration and KYC form should be fully filled up.

· Minimum amount of taka 5000 is required to open CD A/C.

· Valid Trade license.

· Valid Seal.

· TIN Tax Identification Number.

3.2.2.e. Limited Company

· 2 copies passport size photos of account.

· Photocopy of valid passport.

· Photocopy of Valid Trade license.

· Certified copy of certificate of incorporation.

· Photocopy of TIN certificate.

· Certificate of memorandum and article of association.

· Certificate of commencement of business (if public limited company)

· Seal of account operating directors.

· Introducer with CD account holder.

· Minutes of board meeting with clear instruction of operating the account of company’s pad.

· Minimum deposit of taka 5000/=

3.2.3 Short Term Deposit Accounts (STD)

Short term deposit or STD account opening procedure is similar to that of the saving account. The rate of interest on this type of account is 06.00% per annum. The deposits held in STD A/C are payable on short notice.

Requirements for opening STD A/C

• Account opening agreement form.
• Specimen signature card.
• Approval of authority.

3.3 Remittance Section

Customers of a bank need to transfer his fund or money to anywhere within the country they can do it through the remittance section of the bank. Remittance section of general banking deals with only local remittances. During my internship I have observed branch deals with 3 types of local remittances. These are:

• Demand Draft (DD)
• Pay Order (PO)
• Telegraphic Transfer (TT)

3.3.1 draft Demand

This is an order to pay money, drawn by one office of a bank upon another office of the same bank for a sum of money in any place, which is outside of the clearing house area of issuing branch. It is a negotiable instrument. It can be crossed or not. For payment of DD bank checks the ‘Test Code’ first mentioned on the draft. If test code agrees, then the bank makes payment. The issuing bank sends an advice about the DD to the paying branch, for further confirmation. Demand Draft is an instrument containing an order by the issuing branch upon another branch known as drawee branch, to pay a certain sum of money to the payee or to his/her order on demand.

3.3.1.a.Demand draft issue

• Customer is supplied width DD form.
• Customer fill up the form which includes the name of the drawer, name of the payee, amount of money to be sent, exchange, name of the drawee branch, signature and address of the drawer.
• The customer may pay in cash or by transferring the amount from his/her account (if any).
• After the money is paid and the form is sealed and signed accordingly it is given to the DD issuing desk.
• Upon receiving the form concerned officer issue a DD on a particular block.
• DD block has two parts, one for bank and another for customer.
• Bank’s part contains issuing date, drawer’s name, payee’s name, sum of the money and name of the drawee branch. Customer’s part contains issuing date, name of the payee, sum of the money and name of the drawee branch.
• After furnishing all the required information entry of the DD is given in the DD issue register and at same time bank issue a DD confirmation slip addressing the drawee branch. This confirmation slip is entered into the DD advice issue register and a number is put on the confirmation slip from the same register. Later on the bank mails this slip to the drawee branch.

The number of DD is put on the DD form. Next the customer signs on the back of the DD and is supplied with his/her part of DD.

3.3.1.b.Demand Draft Payment

When a DD is brought for payment, the branch check out the following matters:

1. Whether the DD is drawn on them
2. Whether it is crossed or not
3. Whether it is properly signed by authorized officers of the issuing branch
4. The branch then checks out whether the confirmation slip has arrived or not
5. If the confirmation has not arrived, the DD is given entry in the Ex-advice register.

3.3.2.Pay Order (PO)

It is like cash but not exactly cash. It is an instrument which is issued from a certain branch of a bank and must be enchased from the same branch. Unlike cheque, there is no possibility of dishonoring pay order because before issuing pay order bank takes out money of the pay order in advance. It is not a negotiable instrument because it can not be endorsed or crossed.

Payment order or PO gives payee the right to claim payment from the issuing branch. In other words it is an undertaking by the issuing bank to pay a certain sum of money to the payee or to order on demand.

3.3.2.a. Pay order (Issue)

Following procedure is maintained for the issuance of PO:

1. Customer is supplied with PO form.
2. After filling the form the customer pays the money in cash or by cheque.
3. The concerned officer then issues PO on its specific block. This block has three parts, one for bank and other two for the customer. A/C Payee crossing is sealed on all pay orders issued by the bank.
4. The officer then writes down the number of the PO block on the PO form.
5. Two authorized officers sign the block.
6. At the end customer is provided with the two parts of the block after signing on the back of the banks part.

3.3.2.b Pay Order (Payment)

As the PO issued by the bank is crossed one it is not paid over the counter. On the contrary the amount is transferred to the payees’ account. To transfer the amount the payee must duly stamp the PO.

3.3.3 Telegraphic Transfer (TT)

In case of TT the issuing branch sends a telegraphic message to another branch to pay a certain some of money to a named payee account. Test code is furnished on the TT message for the protection of it. Generally for such kind of transfer, payee should have account with the paying bank; otherwise it is very difficult for the paying bank to recognize the exact payee.

At customer’s request branch transfers fund to another branch through telex and it is known as the TT, in short. TT facility is available only in that branch having telex facility. The procedure of issuing and paying TTS are stated below:

3.3.3.a. TT (Issue)

1. Customer fills up the TT form and pays the amount along with commission in cash or by cheque.
2. The respected officer issues a cost memo after receiving the TT form with payment seal, then signs it and at last give it to the customer.
3. Next a TT confirmation slip is issued and its entry is given in the TT issues register.
4. A test number is also put on the face of the slip. Two authorized officer signs this slip.
5. Telex operator then transfers the message to the drawee branch mentioning the amount, name of the payee, and name of the issuing branch, date and test number.
6. The confirmation slip is send by post.

3.3.3.b. TT (Payment)

1. When a TT arrives through telex it is sent to the respected officer for the verification of the test number. If the test number is OK, the officer writes down ‘Test Agreed’ on it and signs it. Otherwise a message is sent back to the issuing branch for the correction of the test number.
2. After agreeing the test the branch issues a debit voucher and accredit voucher – debiting the issuing branch and crediting the payees account. Branch also issues a credit advice slip addressing the payee informing him/her about the arrival of the money.
3. Later, when the confirmation slip arrives the contra date, on which the payment was made, is put on it and the officer sign it.

3.4 Fixed Deposit Receipt (FDR) Section

Fixed Deposit Receipt Account deposit is taken for some maturity period:

Requirements for opening FDR A/C

• Account agreement form.
• Amount and period of deposit must be mentioned clearly.
• Specimen signature card.
• Approval of the authority.
• Photograph.

Fixed deposit is the amount deposited by the customer for a fixed period of time. In NCC bank ltd this time period is one month, three months, six months and one year etc.

The duration and the rate of interest on different time period FDR is shown in the table below:

Table- Duration and Rate of interest

3.4.1 Opening procedure of FDR Account

• Bank provides the interested customer a fixed deposit form.
• Customer fills the form, which contains name of the customer, amount of money, duration, rate of interest etc.
• After filling the form customer pay the money in cash or by cheque.
• After receiving the form from the customer the respected office look for the cash seal or transfer seal. If any of these are present and the form is properly singed the officer provides a specimen signature card to the customer.
• Customer signs thrice on the specimen signature card along with his/her full name.
• At the same time respected officer issue a fixed deposit receipt on the specific FDR block.

This block has two parts, one for customer and another for the bank, containing same information on both parts. These are:

• Name of the customer.
• Amount of money deposited.
• Date on which the money is deposited.
• Due date – on which the FDR will be matured.
• Duration for which FDR has been made.
• Rate of interest to be paid.

When all required information is written on the block it is signed by at least officers and the manager verifies the specimen signature and put his sign on it.

Before taking his/her part of the FDR block the customer must sign on the back of the part to be kept in the bank and the signature must match the signatures on the specimen signature card. An FDR is renewed automatically for three months if the customer does not come to cash if after the maturity period. It can also be renewed upon the direction of the customer.

3.5 Cash Section

Cash is the most liquid asset and it should be dealt very carefully. So this department is really handed with intensive care. This department starts the day with cash in vault. All cash receipts and payments are made through this department.

Cash section is a very sensitive organ of the branch and handle with extra care. I was not authorized to deal in this section because of its sensitivity. But I was fortunate enough to know the procedures of this section. Operation of this section begins at the start of the banking hour. Cash officer beings his/her transaction with taking money from the vault, known as the opening cash balance. Vault is kept in a much secured room. 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 day’s 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.

3.5.1 Cash Receipt

Depositors deposit money in their account through this section by deposit slip. This section also receives cash from customer for opening pay order, bank draft, telex transfer etc. This is bank’s all cash receipts are taken by this department.

• At first depositor fill 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 bank’s part of the slip. Other part is given to the depositor.
• In this branch, two different officers maintain two different scroll books for entering such entries. But cash counter maintains one scroll book.
• All deposits of saving account are maintained by one officer and other accounts by another officer.
• All 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.

3.5.2 Cash Payment

This section accepts the cheques from the depositors for payment in cash. After receiving cheque, first the cheque is scrutinized whether it is a valid one. Cash officer judges the amount both in figure and the word, date of the cheque and signature etc. Then finally authorized officer compares the signature on the cheque with the specimen signature, and check whether the balance in the account is sufficient. If a very thing is satisfactory, then payment is made against the cheque. This department is also make payment against various debit vouchers for various miscellaneous expenses of the branch.

• When a person comes to the bank to cash a cheque, s/he first gives it to the computer desk to know the position of the check and posting of the cheque. If the account has sufficient fund the computer in charge will post it into the computer, will sign it and seal it.
• This cheque is then sent to the concerned officer. There are two officers who verify the cheques – one for savings and similar types of account and another for current and similar types of account.
• After receiving the cheque respected officer first checks it very carefully for any kind of fraudulent activity. S/he also checks the date of the cheque, amount in word, amount in figure and signature of the drawer.
• If the instrument is free of all kind of error the respected officer will ask the bearer to sign on the back of it.
• S/he will then put his/her initial beside the bearers’ signature. S/he will also sign it on its fact, 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.

3.6 Clearing & Bills Section

NCC bank receives different types of instruments, such as cheque, PO, DD etc from its customers for collection. It also pays on behalf of its customers for those instruments that come to it through clearing house. When instruments of NCC are sent for collection or received for payment through clearing house it is called Inter Bank Clearance or IBC. These are:

When the cheques are presented to a bank by the other banks for collection of fund then a receiving officer, receiver check by a deposit slips.

3.6.1 Inward Clearing

When instruments are sent to the bank vie clearinghouse, it entered into the clearing in register. The officer checks the instruments thoroughly before it is sent to the computer section for posting. If any kind of error is found in any instrument it is dishonored and sent back with appropriate reason for doing so. Instruments are also dishonored for insufficiency of fund.

3.6.2 Outward Clearing

After filling the deposit in slip bearer of the instrument deposits the instrument to the respected officer. Upon receiving the instrument the respected officer checks the essential features of the instrument and whether the deposit in slip is filled accordingly or not. Then (s) he crosses the instrument with a sea containing banks and branch’s name, signs the deposit in slip and provides the customer with counter foil of the slip.

It is then given entry in the clearing out register mentioning the name of the bank and branch of it, amount of money in deposit in slip, amount of money in the instrument, number of the instrument and date of then it. In case IBC only name of the bank is omitted. Then the officer separates the instrument from the deposit in slip. Deposit in slip is kept in the bank and the instrument is sent for clearing.

3.7 Dispatch Section

Dispatch section plays a great role in banking business. Because all documents coming in the branch or going out of the branch must pass this section. This section maintains all records of the documents send to other branches or banks and makes best effort to send these documents safely and correctly. This section also receives documents come through different medium, such as postal service, courier service, via messenger etc.

After receiving the document the officer inters them in a register kept in his/her desk and distribute them to the appropriate sections. When papers or documents are sent for official purpose the officer enters them in another register, write down the address on the envelope and send them through proper channel.

Dispatch section of local office branch performs another duty. It enters the transfer instruments in the scroll book and then sends those to the computer section.

CHAPTER-4

4.1 Types of Loan and Advance

NCCBL provide the following loan and advance

1. Small business loan scheme.
2. House renovation loan scheme.
3. Personal loan scheme.
4. Staff Car loan.
5. Loan against provident fund.
6. Staff house building loan
7. Secured over draft (Financial obligation.)
8. Cash credit (Hypothecation)
9. Festival Small business loan.
10. House building loan.
11. Loan against trust receipt.
12. Agricultural loan.

4.1.1Small business loan scheme

· Target group: Business/Cottage industries.

· Interest: 17%

· Amount: 1-5 lac.

· Maturity period: 1-5 years.

Essential Document:

• Parties Application.
• Trade license.
• Income statement(Business)
• Bank proposal.
• Security: land, property.
• 2 Guarantor

Calculation of monthly installment under SBLS @17.00% including one month grace period:

Table: Monthly installment of SBLS

4.1.2 House Renovation/Reconstruction Loan scheme

· Target group: Salary person.

· Interest: 17%

· Amount: 1-5 lac.

· Maturity period: 1-10 years.

Essential Document:

• Parties Application.
• Applicant Salary Certificate.
• All the papers of security.
• Bank proposal.
• Security: land, property
• 2 Guarantor

Calculation of monthly installment under HRRLS @17.00% including three month grace period:

Table: Monthly installment of HRRLS

4.1.3 Personal loan scheme.

NCC bank giving loan for purchasing Television, Refrigerator, VCR, Computer, washing machine, Furniture and other item.

· Target group: Salary person.

· Interest: 17%

· Amount: 20,000-1,00,0000 .

· Maturity period: 6 month to three years.

Essential Document:

• Parties Application.
• Applicant Salary Certificate.
• Bank proposal.
• 2 Guarantor

Calculation of monthly installment under PLS @17%