Report On Agrani BANK LIMITED

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Report OnAgrani BANK LIMITED

COMPANY PROFILE

1.1 A Brief History of Agrani Bank Limited:

Agrani Bank is a corporatized commercial bank of Bangladesh established in 1972. Its headquarter is situated at Motijheel in Dhaka, the capital city of Bangladesh.

Agrani Bank Limited, a leading commercial bank with 867 outlets strategically located in almost all the commercial areas throughout Bangladesh, overseas exchange houses and hundreds of overseas correspondents came into being in 1972 immediately after the emergence of Bangladesh as an independent state. It started functioning as nationalized commercial bank taking over assets and liabilities of the rest while Habib Bank Ltd. and Commerce Bank Ltd. functioning in the East Pakistan. It has been privatized on 15^th November 2007 and emerged as Agrani Bank Limited (ABL) taking over assets, liabilities and goodwill of Agrani Bank. The authorized capital of the Bank is Tk. 800 crore.

It has been corporative on 15^th November 2007 and emerged as Agrani Bank Limited (ABL) taking over assets, liabilities and goodwill of Agrani Bank.

Agrani Bank Limited is governed by a Board of Directors consisting of 11 (eleven) members headed by a chairman. The Bank is headed by the Managing Director & Chief Executive Officer; Managing Director is assisted by Deputy Managing Director and General Managers. The Bank has 7 Circle Offices, 30 Divisions in head office, 52 Zonal Offices and 867 Branches including 10 Corporate and 40 AD (Authorized Dealer) branches. The Corporate and AD branches are authorized to deal in Foreign Exchange business.

1.2 Agrani Bank at a Glance:

Name of the Company	:	Agrani Bank Limited
Chairman	:	Khondoker Bazlul Hoque, PhD.
Managing Director & CEO	:	Syed Abu Naser Bukhtear Ahmed, B.Sc., MBA
Company Secretary	:	Md. Ekramul Hakim
Legal Status	:	Public Limited Company
Genesis	:	Agrani Bank Limited has been incorported on 17 May 2007 and has taken over the business, assets, liabilities, rights and obligations of Agrani Bank with effect from 1 July 2007. Agrani Bank, which initially emerged as a Nationalized Commercial Bank (NCB) in 1972, following The Bangladesh Banks (Nationalization) Order, 1972 (President Order No. 26 of 1972), has now become a State Owned Commercial Bank (SCB) through a vendor’s agreement dated 15 November 2007.
Date of Incorporation	:	17 May 2007
Registered Office	:	9D Dilkusha Commercial Area, Dhaka-1000, Bangladesh
Authorized Capital	:	Tk. 800 Crore
Paid up Capital	:	Tk. 497 Crore
Reserved & Retained Earnings	:	Tk. 420 Crore
Number of Employees	:	11443
Number of Branches	:	867
Number of Subsidiary Companies	:	2
Phone- PABX	:	+88-02-9566153-54, +88-02-9566160-69, +88-02-9566074-75
Fax	:	+88-02-9562346, +88-02-9563662, +88-02-9563658
SWIFT AT H.O. ID	:	AGBKBDDH
Website	:	www.agranibank.org
E-mail	:	agrani@agranibank.org
		info@agranibank.org

Vision

To become a leading bank of Bangladesh operating at international level of efficiency, quality and customer service.

Mission

We operate ethically and fairly within the stringent framework set by our regulators. We fuse ideas and lessons from our regulators. We explore new avenues to become stronger, more efficient and competitive. We apply information and communication technology for the benefit of our customers and employees. We invest to strengthen the future of the bank.

Values

We value integrity, transparency, accountability and professionalism to provide a high standard of service to all our customers and stakeholders.

Strategic Objectives

n Wining at least 6 percent share of deposits and 4.5 percent share of loans and advances of the Bangladeshi market.

n Gaining competitive advantages by lowering overall cost compared to that of competitors.

n Overtaking competitors by providing quality customer service.

n Achieving technological leadership within the peer group.

n Strengthening the Bank’s brand recognition.

n Contributing towards the economic well-being of the country by focusing particularly on SME and agricultural sectors.

n Strengthening research capability for innovative products.

Ethical Standards

1. Be Trustful: We believe in mutual trust and treat our customers in a way so they can trust us.
2. Keep an Open Mind: For continuous improvement of our Bank we keep our minds open to new ideas. We seek opinions and feedback from both customers and team members through which our bank will continue to grow.
3. Meet Obligations: Regardless of the circumstances, we do everything to gain the trust and confidence of customers and clients by honouring our commitments and obligations.
4. Be Transparent: We are transparent in our dealings with customers and all stakeholders. We re-evaluate all printed materials including advertising, brochures, and other business documents making sure that they are clear, precise and professional.

2.1 Structure of the Organization:

Figure: 2.1 Structure of the Organization

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 products/ 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. Every day it receives deposits from the customers and meets their demand for cash by honoring Cheques. It opens new accounts, remit funds, issue bank drafts, telephonic transfers and pay orders etc.

3.0 Division of General Banking:

3.1 Accounts opening

3.2 Accepting deposits

3.3 Cheque book issue

3.4 Transfer of account

3.5 Closing of account

3.6 Cash Department

3.7 Remittance

3.8 Other services

a. ATM service

b. Locker Service

c. Online facility

3.1 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.

STEP: 1 Applicant fill up the prescribed application form in recommended form.

STEP: 2 Customers are requiring to filling up the specimen signature card.

STEP: 3 For individuals introduction is needed by an account holder.

STEP: 4 Authorized officers scrutinize the introduction and examine the documents submitted.

STEP: 5 Issuance of deposit slip and the deposit must be made in cash. No cheque or draft is acceptable to the Bank.

STEP: 6 Account is opened.

STEP: 7 After depositing the cash one chequebook, a pay- in-slip book & ATM card are issued.

Before opening of a current or savings account, the following formalities must be completed

i. Application on the prescribed form;

ii. The customer information must be filled up with the form;

iii. Introduction: The following persons can introduce an A/C opener:

a. An existing current/savings account holder of that branch;

b. An officer of that branch;

c. A respectable person of the society or locality who is well known to the Manager/2^nd man of the branch concerned;

iv. Furnishing photographs;

v. Banker will supply a set of printed forms required for opening the account, which will normally include:

a. Specimen Signature Cards (SSC);

b. Deposit Slip Book

c. Check Book Requisition slips;

vi. Customer should carefully read and full-fill the application form;

vii. Putting specimen signatures in the specimen card.

viii. 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;

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

x. 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;

xi. The Deposit slip properly filled in and signed by the customer;

xii. 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;

xiii. Place the signature cards, Advice of new account, a copy of Deposit slip, photographs and other necessary papers/documents etc. in a file;

xiv. 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;

xv. 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;

xvi. After approval of the opening of the A/C, get the Cheque book requisition slip signed by the customer;

xvii. Deliver the chequebook 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;

3.1.1 Duties and Obligations of Introducer:

The introducer is secondarily liable to the banker for any fraud-forgery or any violation of the contract between banker and customer. But in practice, introducers usually help banker to find out the customer in case of any offence.

3.1.2 Documents Required for All Types of Accounts & Customers:

1. Advise of New Account (in duplicate)
2. Specimen signature cards (in duplicate)
3. Account Opening Agreement Form
4. Photographs of Account Holders (in duplicate)
5. Nationality certificate/Photocopy of valid passport
6. Deposit Slips Book
7. Cheque book Requisition slips
8. Letter of mandate authorizing another person/s to operate the A/C on behalf of the Account holder, where necessary.
9. Nominee form duly filled in
10. Transaction profile duly filled in.

3.1.3 Additional Documents are to be obtained for Opening Some Special Accounts:

I) Proprietorship Firm

a) Name of authorized persons, designation, specimen signature card.

b) Trade licence.

c) Tax Receipt ( For export/ import )

d) Declaration of Proprietorship

e) Mandate if operation by third party is to be allowed.

II) Partnership Firm

a) Account must be opened in the name of the firm.

b) The firm should describe the names and addresses of all partners.

c) Partnership deed is required which duly attested by Notary Public

d) Trade licence from city corporation is needed.

e) Tax receipt ( For import/ export )

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

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

h) Resolution signed by all the partners to open the A/C.

i) Mandate as to operation of the A/C.

III) Limited Company

a) Certificate of incorporation

b) Certificate of Commencement of Business (In case of Public Limited Company only.)

c) List of all Directors, Designation, Address, Specimen Signature

d) Memorandum of Association

e) Article of Association

f) Power of attorney.

g) Resolution of the Board of Directors authorizing opening of an account.

IV) Club/Socities/Trustee/Association/Non-Trading Institutions etc.

a) Certified copy of Resolution for opening and operation of account

b) Certified copy of Bye-laws & Regulations/ Constitution.

c) Copy of Government approval (if registered).

d) In case of death, A/C should be stopped until the club nominates another person.

e) Trust deed is needed-for trustee account.

Account Opening Procedure

Account opening procedure and also the account operating process of these accounts are similar to Current account and savings account. In addition, it should provide by-laws& Regulations/Constitution and Articles of Association. By providing all required documents it can open a savings account.

V) Minor’s Account

a) Putting the word “MINOR” after the title of the account.

b) Recording special instruction of operation of the account.

c) The account opening form is to be filled in and signed by either of the parents or the legal guardian appointed by the Court of Law & not by the Minor.

Account Opening Procedure

Account opening procedure of minor account is similar to the procedure of savings account. Minors are not allowed to open current accounts. Account can be opened in the name of minor himself (under a guardian)/jointly in the name of the minor and guardian.

VI) NGO:

The account opening procedure is same but in exception is that the Registration Certificate from the Social Welfare Department of Government must be enclosed with the application.

VII) Joint Accounts Of Two Or More Persons

Mandate for Operation of Accounts

A clear authority signed by all the joint A/C holders containing instructions as to who will operate the account and how the account is to be operated should be obtained. The mandate should mention the name of the persons authorized to draw check. In case of death /insanity/insolvency of one or more of the joint a/c holders, the authority will cease to operate.

Executor:

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

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

Administrator:

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

3.2 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 public

There are two classes of deposits, which are acceptable to Agrani Bank LTD. They are:

1. Demand deposits
2. Time deposits

I) Demand Deposits

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

ABL accepts demand deposits through the opening of—

a) Current account

b) Savings account

c) Foreign currency account

a) Current Account

Both individuals and business open this type of account. Frequent transactions are (deposits as well as withdrawal) allowed in this type of account. A current a/c holder can draw cheques 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 ABL:

i. Generally opened by businessmen, government and semi-government organizations; with proper introduction

ii. No interest is provided for deposited amount;

iii. Overdraft is Allowed in this account;

iv. Minimum opening balance is TK.1000;

v. A minimum balance of Tk. 1000/- has to be maintained. Bank has the right to change this minimum balance requirement.

There are several types of current account available at the ABL:

i. Individual Current Account.

ii. Partnership Current Account

iii. Proprietorship Current Account

iv. Limited Company Current Account

v. Account of Societies/Clubs etc.

b) Savings Account

Individuals for savings purposes open this type of account. Interest on SB account is calculated and accrued monthly and credited to the account half yearly. Interest calculation is made for each month based on the lowest balance at credit of an account in that month.

Criteria of savings account followed by SB:

i. An appropriate introduction is required for opening the A/C;

ii. Frequent withdrawal is not encouraged;

iii. 7 days notice is required for withdrawal of large amount;

iv. Minimum amount of TK.100 is required as initial deposit and to earn interest;

v. 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;

vi. Depositor will get interest on the amount deposited in his/her account irrespective of any limit;

There are two type of saving account-

i. Individual Saving Account

ii. Joint Saving Account

To open a saving account the followings are required:

1. Passport size photo-2 copies
2. Introducer’s signature in the a/c opening card
3. Nationality certificate/Photocopy of valid passport
4. Nominee form duly filled in(with photo)
5. Transaction profile duly filled in

c) 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 for club, society etc the followings are required

a) Passport size photo-2 copies for each member

b) Introducer’s signature in the a/c opening card

c) Nationality certificate/Photocopy of valid passport/Voter ID card

d) Nominee form duly filled in

e) Transaction profile duly filled in

f) Photocopy of Work Permit

g) Employment Certificate duly mentioning salary

II) Time Deposits

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

a) Fixed Deposit Receipt (FDR)

b) Short Term Deposit (STD)

c) Schemes Deposit

While accepting these deposits, a contract is done between the bank and the customer. When the banker opens an account in the name of a customer, there arise 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, ABL Officials remain very much careful about the competency of the customers.

a) 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. ABL 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 Agrani Bank, as goodwill pays a lump-sum amount of interest to the FDR holder.

Procedure of Opening Fixed Deposit Account:

Before opening a Fixed Deposit Account a customer has to fill up an application form, which contains the followings:

1. Amount in figures
2. Beneficiary’s name and address
3. Period
4. Rate of interest
5. Date of issue
6. Date of maturity
7. How the account will be operated (singly or jointly)
8. Signature(s)
9. F.D.R. no.
10. 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:

1. FDR account no.
2. FDR (Fixed Deposit Receipt) no.
3. Name of the FDR holder with address
4. Maturity period
5. Maturity date
6. 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 Agrani Bank limited offers a high interest rate in Fixed Deposit accounts.

It is usually paid on maturity of the fixed deposit. ABL calculates interest at each maturity date and provision is made on that “Miscellaneous creditor expenditure payable accounts” is debited for the accrued interest.

Loss of FDR

In case of a lost FDR, the customer is asked to record a GD (General Diary) in the nearest Police Station. After that, the customer has to furnish an Indemnity Bond to ABL. 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.

b) STD Account

In ABL, 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. 100.

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 cause they have to pay less interest and the customers are also benefited because anytime they can divert money .In ABL, 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.

c) Special Schemes

i) APS (ABL Pension Scheme)

A depositor can deposit Tk. 100/200/300/400/500 monthly as per arrangement. This scheme is for at least 5 years at 7% interest rate and the interest is a compounded one. Customers have to pay the installment amount between1 to 10 of each month. If the customers fail to do so then bank will count the installment as classified installment. After 5 years the customer can withdraw the amount (principal+interest) or he/she can withdraw it in installments.

ii) ABS (ABL Special Schemes)

A customer can deposit Tk. 1000/2000/3000/4000/5000/6000/7000/8000/9000/10000 to his account as per arrangement with the bank. This sort of accounts can be opened for 5 years/10 years. Installment should be deposited within 15th of the month. Compounded interest rate will be counted for the scheme and the interest rates are 7% for 5 years and 8% for 10 years.

Serial No.	Type of account	Interest rate
1.	Current accounts	0%
2.	Savings accounts	4%
3.	STD	3.5%
4.	FDR(3 months-<6 month)	7.25%
5.	FDR(1year-more)	7.5%
6.	FDR(6 month-<1 year)	8%
7.	DPS	15%
8.	APS(5 years)	7%
9.	APS(10 years)	9%
10.	ABS(5 years)	8%
11.	ABS(10 years)	9%
12.	FDR(1 year-more)	8.25%
13.	FDR(1year-more)	8.5%

Table: 3.1 Interest Rates of different types of Accounts

3.3 Issueing Chequebook to the Customers:

STEP 1: Requisition slip filled properly along with the chequebook number.

STEP 2: Banker Verifies the Slip.

STEP 3: Banker issues new chequebooks if everything in the right form.

STEP 4: Enter the new chequebook number in the register book against specific customer’ name.

3.3.1 Issue of Fresh Chequebook:

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 Chequebook:

i. A customer who opened a new A/C initially deposits minimum required money in the account.

ii. The account opening form is sent for issuance of a chequebook.

iii. Respected Officer first draws a cheque book .

iv. The officer who has the signing authority signs in the leaf where the next requisition slip exists in the chequebook.

v. The name of the customer is also written down the face on the Requisition slip.

vi. The word “Issued on” along with the date of issuance is written down on the requisition slip.

vii. Next, the customer is asked to sign in the Chequebook issue register.

viii. 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.

3.3.2 Issue of Duplicate Cheque Book:

Duplicate chequebook 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.

3.3.3 Issue of New Chequebook (for Old Account):

All the procedure for issuing a new Chequebook 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 Chequebook 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 Chequebook is entered on the back of the old requisition slip and is signed by the officer.

3.3.4 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 Chequebook 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 chequebook.

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.

3.4 Transfer of an Account:

i. The customer submits an application mentioning the name of the branch to which he wants the account to be transferred.

ii. His signature cards, advice of new account and all relevant documents are sent to that branch through registered post.

iii. The balance standing at credit in customer’s account is sent to the other branch through Inter Branch Credit Advice (IBCA).

iv. No exchange should be charged on such transfer.

v. Attention is also given in this connection.

3.5 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 chequeleaves. 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:

i. Death of customer

ii. Customer’s insanity and insolvency

iii. Order of the court

iv. Specific charge for fraud forgery

3.5.1 Stop Payment of Cheque:

A banker can stop payment of cheque of his customer under following considerable circumstances:

i. Firstly the account holder will apply to stop the payment of his cheque

ii. There is a register for this purpose. The authorized officer keeps it.

iii. The officer will see the condition of account and verify everything.

iv. In the ledger book, the officer will mark with red ink and the cheque will not be paid.

3.5.2 Dishonor of Cheque:

If the cheque is dishonored, there is no practice in ABL 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:

i. Refer to drawer.

ii. Not arranged for.

iii. Effects not cleared May be present again.

iv. Exceed arrangements.

v. Full cover not received.

vi. Payment stopped by drawer.

vii. Payee’s endorsement irregular/illegible/required.

viii. Payee’s endorsement irregular, require Bank’s confirmation.

ix. Drawer’s signature differs/ required.

x. Alterations in date/figures/words require drawer’s full signature.

xi. Cheque is post dated/out of date/mutilated.

xii. Amount in words and figures differs.

xiii. Crossed cheque must be present through a bank.

xiv. Clearing stamps required/requires cancellation.

xv. Addition to the discharge of Bank should be authenticating.

xvi. Cheque crossed “Account Payee Only”

xvii. Collecting Bank’s discharge irregular/required.

But if the cheque is dishonored due to insufficiency of funds, ABL inform the A/C holder immediately.

3.6 Cash Section:

The cash section of Southeast Bank Ltd 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.

3.6.1 Cash Payment:

i. 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.

ii. 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.

iii. 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.

iv. 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.

v. If the instrument is free of all kind of error the respected officer will ask the bearer to sign on the back of it.

vi. 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.

vii. 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.

viii. The cash officer will then enter the scroll number in his/her register and will pay the money to the bearer.

ix. At the end of the day these scroll numbers of the registers will be compared to ensure the correctness of the entries.

3.6.2 Cash Receipt:

i. 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.

ii. After filling the required deposit in slip, depositor deposits the money.

iii. 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.

iv. 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.

v. All deposits of saving account are maintained by one officer and other accounts by another officer.

vi. 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.

3.7 Remittance:

Bank is a service-oriented industry and deals with public money. They provide services to their clients through different ways. “Transfer of money/fund of one person /customer to another person/ firm/ organization through the bank is called remittance. Any Person can remit funds to anyone within the country through any of the branches of the some bank by the following means with nominal charges:

1. Pay order
2. Demand Draft
3. Telegraphic Transfers
4. Money Transfer

I) Pay Order

This is an instrument issued by the branch of a bank for enabling the Customer/ purchaser to pay certain amount of money to the order of a certain person/ firm/ organization/ office within the same clearinghouse 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.

Procedure for issuing P.O.:

i. Obtain P.O. application form duly filled in and signed by the purchaser/applicant.

ii. Receive the amount in cash/transfer with commission amount.

iii. Issue P.O.

iv. Enter in P.O. Register

Payment of Pay order:

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

i. Examine genuinely of the Pay Order

ii. Enter in P.O. Register, give contra entry.

iii. Debit if found ok for payment.

II) Demand Draft

The demand draft is a written order by one branch of a bank upon another branch of the same bank to pay a certain sum of money to or to the order of a specified person. This is an order instrument in which the issuing branch gives instruction to the payee/drawee branch to pay certain amount of money to the order of certain person /firm/organization

i. A draft is always an order and never a ‘bearer’ instrument.

ii. It is a negotiable instrument like a cheque i.e. it can be endorsed, collected, and delivered to the endorsee.

iii. D. D. may be issued to any person and it can also be issued in favor of a firm, company or local authority on written request duly signed by the purchaser.

Issue of a Demand Draft

i. The purchaser is asked to complete the press-ribbed form, which is treated as an application as well as credit voucher.

ii. If against cash- the application is given to the customer to deposit the cash with the cashier.

iii. Voucher (Application form) passed duly signed & sealed is delivered to remittance department for preparation of DD. The application for remittance is to be signed by the drawer of cheque.

Payment of Demand Draft

After Receipt of IBCA: The IBCA received from issuing branch is responded by the drawee branch and then this becomes voucher.

Dr. General A/ C- Drawer Br.

Cr. Bills Payable A/c-D.D. Payable.

Particulars of DD are entered in D.D. Payable Register under initial of an officer.

III) Telegraphic Transfer (T.T.)

It is an instruction duly tested sent by telex/fax/telegram/ telephone/ express mail etc. to the drawee branch for paying a certain sum of money to a specified person. This mode of transfer of fund may be affected at the written request an account holder of the branch and against value received from him. It is preferable to obtain a confirmatory cheque from the customer.

Characteristics:

1. Issued by one branch to another branch and massage is tele-communicated
2. Remittance / transfer of money is done through tested tele messages.
3. Remittance is affected on the basis of tested message.
4. Test key apparatus is required.

Issue of T. T:

Obtain T.T. application form duty failed in and signed by the purchaser/applicant with full account particulars of the beneficiary. Receive the amount in cash/transfer with prescribed commission, postage, and telephone/telex charge. Prepare T.T. message inserting test number (code number). Enter in T.T. issue register. Issue advice to the payee branch.

Dr.: Cash or Cheque

Cr.: Gen. A/C Paying Branch

Cr.: Income A/C – Commission on T. T.

Cr.: Telegram charges. (Cost Memo given to the purchaser)

T. T. message prepared in duplicate, checked and signed by the in charge and Manager, tested and transmitted. IBCA prepared in duplicate. The original sent to paying branch as confirmation of message.

T. T. Receiving and payment:

Go through text of the T. T. carefully and ‘Decode’ the text and tally the test. – If the test agrees – Pass the Following Vouchers:

1. T.T. Advise and Credit

Dr. Gen. A/c – Issuing Br. (Responding)

Cr. Bills Payable – T.T. Payable

Dr. Bills Payable – T.T. Payable

Cr. Party A/C.

2. T.T. Advice & PAY

Dr. Gen. A/C Issuing Branch (Respond)

Cr. Bills payable A/C – T.T. payable (T.T. PO is issued and delivered to the Payee)

Dr. Bills Payable A/C – T.T. Payable (T.T. PO)

Cr. B/P Cash /Clearing (Duly signed by the payee on revenue stamp and identification)

IV) Money Transfer (M.T)

In the prescribed format the purchaser / the drawer branch instruct the drawer branch to pay a specified sum of money to the payee named in the IBCA preferably by crediting his account.

Issuance Procedure of M.T:

i. Application in writing in prescribed form

ii. Deposit of money including commission

iii. Issue of cost memo

iv. Entry in M.T. issue register serially

v. M.T. advice in IBCA (in block letters) with Test.

Vouchers:

Dr. Cash / Party A/C

Cr. General A/C (Drawee Br)

Cr. income A/C Commission

Cr. Postage Charge.

3.8 Other Services:

I) ATM

Automated teller machine (ATM) is one of the modern financial services provided by bank. This is providing customer collection of money any time he desires. Now a day life is to fast. To consider this, bank creates this service where any customer needs not to follow the banking hour to collect money from his deposit. The Bank is a member of the shared ATM Network provided by Electronic Transaction Network Ltd. (ETN). At present number of ATMs are available throughout Dhaka city. Bankers inspire customers to withdraw money amounted less than tk. 20,000 by ATM card.

Procedure:

i. It’s mandatory to apply for an ATM card at the time of account opening.

ii. An ATM form supplied to the customer specifying the account Name of the account, Account number, address, and telephone No etc.

iii. Customer need to fill up an ATM card application form.

iv. Jointly an ATM account can be opened.

v. Then he is supplied a deposit slip to deposit the cash.

vi. Then he gets an ATM.

Terms and Conditions:

i. At the applicant’s request the Bank may issue the cardholder a card and PIN if the applicant is a depositor of the Bank and remains an account at any bank.

ii. The cardholder will pay such charges and fees for the provision of the card and /or PIN as the Bank may prescribe from time to time.

iii. All transactions including utility bill payment initiated by the use or purported use of the card shall be debited from the cardholder.

iv. A cardholder can withdraw from his account Tk 20,000 per day. But by inserting a card at a time no cardholder can withdraw more than Tk 2000.

II) Locker Services

Agrani Bank Ltd, Principle Branch is providing facility of locker service for the purpose of safe guarding the valuable property of customers.

The person or organization that has any account in bank branch can enjoy this service. They keep their valuable assets in banker’s custody. Customers have right to look after with a key of their individual lockers provided by bank.

Terms and Conditions:

i. The safe vault will open during the banking hour unless otherwise changed by the bank.

ii. All fees and other charges in respect of the lockers will be payable in advance.

iii. The banker will not incur any liability or responsibility for any loss or destruction or damage of any article, document, securities, or valuable in or otherwise the contents of the locker/vault.

iv. Either party can terminate this agreement on giving to the other seven days notice in writing expiring prior to the date.

v. If the hirer loses the key of the locker, the bank should be notified without delay.

III) Online Banking Operation

Bank has Real-time On-line Any branch Banking for the clients to facilitate them to deposit / draw or remit funds from their accounts, from one bank to another.

Bank authority is providing training to its employees, which will lead to smooth and efficient functioning of the system.

Some branches including the principle branch and the head office come under the umbrella of on-line any branch-banking network, which have been started online from this year.

Facilities of Online Banking System

Customers of one Branch of ABL are able to make transaction like cash withdrawals and deposits, electronic fund transfer, balance inquiry, account statements etc. from any of the ABL Online Branches Under the Umbrella of Online Banking.

LOANS AND ADVANCES DEPARTMENT

4.0 Credit Facility:

One of the primary functions of commercial banks is sanctioning of credit to the potential borrowers. Bank credit is an important catalyst for bringing about economic development in a country. Without adequate finance, there can be no growth or maintenance of a stable economy. Bank lending is important for the economy, because it makes possible the financing of agriculture, commercial and industrial activities of a nation. At the same time, a bank will, therefore, distribute its funds among various sectors in a manner as to derive sufficient incomes.

Loans & advances comprise the most important asset as well as the primary source of earning for the banking/financial institutions. However lending money is exposed to risk and uncertainties. So a prudent banker should always try to make an appropriate balance between the risk and return involved in the loan portfolio management. The lending banker has to take into account various consideration which relates to bank itself, the borrower, the proposal, the socio economic factors etc. An unregulated financial institution might be burdened with innumerable and unmanageable risk while lending money to the people for maximizing potential gains. So the bank should be prudent, farsighted and efficient while deploying its funds.

Agrani Bank Limited, being one of the largest private commercial bank of the country, provides funds to agriculture, industry and commerce sector for strengthening the economic base of the country. Hence, it is very clear that, Agrani Bank Ltd. plays an important role to move the economic wheel of the country.

4.1 What is Loan?

When an advance is made in a lump sum repayable either in fixed monthly installments or in lump sum and no subsequent debit is ordinarily allowed except by way of interest and incidental charges. Etc, it is called a Loan. Loan is allowed for a single purpose where the entire amount may be required at a time or in a number of installments within a period of short span. After disbursement of the entire loan amount, there will be repayment by the borrower in installment. A loan once repaid in full or in part cannot be drawn by the borrower. Entire amount of loan is debited to the loan account in the name of the customer and is paid to him/her through his/her SB/CD/Loan account. Sometimes loan amounts are disbursed in cash.

4.2 Purposes of Loan:

For purchasing bus, trucks, launches, for construction of building and for capital financing of industrial projects, export finance, import finance, import finance etc. Now days, commercial banks, especially the nationalized commercial bank, in our country, are to make loans under different schemes viz. Agricultural Loans, and loans under self-employment scheme etc. Depending upon the purpose, loans may be repayable within a few months or the repayment period may extend upon a few years. Agricultural loans are generally repayable within a period of 3(three) months to 1(one) year. But repayment of transport loans & house building loans may take longer period comprising a number of years.

4.3 Lending Principles followed by Agrani Bank Ltd.:

The Principle of lending is a collection of certain accepted time tested standards, which ensure the proper use of loan fund in a profitable way and its timely recovery. Different authors describe different principles for sound lending.

ABL follows the following five principles in its lending activity:

i. Safety

ii. Security

iii. Liquidity

iv. Adequate yield

v. Diversity

vi. Productive purpose

vii. National interest

i) Safety

Safety should get the prior importance in the time of sanctioning the loan. At the time of maturity the borrower may not will or May unable to pay the loan amount. Therefore, in the time of s