Report on General Banking of Export Import Bank Limited of Bangladesh
EXIM Bank Limited was established in 1999 under the leadership of Late Mr. Shahjahan Kabir, founder chairman who had a long dream of floating a commercial bank which would contribute to the socio-economic development of our country. He had a long experience as a good banker. A group of highly qualified, and successful entrepreneurs joined their hands with the founder chairman to materialize his dream. in deed, all of them proved themselves in their respective business as most successful star with their endeavor, intelligence, hard working, and talent entrepreneurship. Among them, Mr. Nazrul Islam Mazumder became the honorable chairman after the demist of the honorable founder chairman. This bank starts functioning from August 3, 1999 with Mr. Alamgir Kabir, FCA as the advisor, and Mr. Mohammad Lakiotullah as the Managing Director. Both of them have long experience in the fmancial sector of our country. The bank has migrated all of its conventional banking operation into Shariah based Islami banking since July 2004.
Accounts Opening Department
This department deals with opening of different types of account. It is also deals with issuing of cheque books, and different deposit books to the different accounts openers. A customer can open different types of accounts through this department such as:
• Al-Wadia Current Account
• Mudaraba Saving Account
• Mudaraba Monthly Saving Scheme (MSS)
• Mudaravba Monthly Income Scheme (STEADY MONEY)
• Mudaraba Multiples Saving
• Mudaraba Super Saving Scheme
• Fixed Deposit Account
Al-Wadia Current Account
Current Account is an account where the account holders can make numbers of transactions within a working day. There is no restriction on the number, and the amount of withdrawals from the current account within availabilities of funds. Generally, current account is opened for businessman, and trades easy for transaction. But a person can open CD account for specials purpose. In my concentration area that is Bashundhara branch use code for Current Deposit. This code started 111 then rest of the digits. Requirements for the different types of accounts holders are discussed. Some important points are as follows-
Required for opening an account
· TK 1,000 is required to open a deposit account.
· No limit for withdrawal.
· No interest on deposited money.
· TK 1,000 must always be maintained to keep the account active.
Mudaraba Saving (SB) Account
Saving Account (SB) is meant for the people of the lower, and middle classes who wish to save part of their income to meet future needs, and intended to earn an income from their saving. In our Bashundhara branch use code for Saving Deposit, this code started 121 then rest of the digits. For opening of this type of accounts the following requirements are necessary:
Required for opening an account
· TK 5,000 is required to open a deposit account.
· TK 1,000 must always be maintained to keep the account active.
· No interest is given upon the deposited money for that month if
· Withdrawal amount exceed 1/4th of the total balance at a time.
· Withdrawal can occur twice in a month, and amount should not be more than 1/4th of the total balance at a time.
Monthly Saving Scheme (MSS)
It is project of Bank, which is a scheme like DPS. The slogan of this scheme is ‘securing your future with case. A small savings to day will provide you comfort tomorrow’
The saving period is for 5, 8, 10, or 12 years. Monthly installment rate is 500 TK, 1,000 TK, 2,000TK, or 5,000 TK.
Monthly Income Scheme (STEADYMONE1)
Bangladesh is developing country. But in our country opportunity of investment is very low. People of our country always try to save their excess money, and they are looking for where they can deposit the money. According to their demand Bank started this monthly income scheme that really makes good sense. Sure investments for a steady return.
This Scheme Required
Minimum deposit TK. 100,000 the scheme is for three years period, monthly income will be credited to the depositors account on the fifth of each month.
Multi plus Savings
Saving help to build up capital is the prime source of business investment in a country. Investment takes the country towards industrialization. This eventually creates wealth. That is why savings are treated as the very foundation of development. To create more awareness, and motivation people to save, EXIM Bank offers multi plus Savings scheme.
Terms, and Conditions of the Scheme
Any individuals, educational institution, government organization, etc. may investment their saving under this scheme. The deposit can be made in multiples of TK 5,000. The period of deposit is for 10 years. Any customer can open more than one account in a branch in his name or in joint names. A deposit receipt will be issued at the time of opening the account. Any amount can be deposited in multiples of TK. 10,000. Some Example is given in the table below:
Table 1: Examples of Terms, and Conditions of the Scheme
|Deposit||Term||Payable at maturity||Payable amount|
Fixed deposit Account
There are deposits, which are made with the Bank for a fixed period specified in advance. The Bank do not maintained the cash reserves against these deposits, and therefore. The Bank offers higher rates of profit on such deposits. These deposits generally constitute 50% or more of the total deposit. Usually customers are allowed to open this account for a certain period, and the rate of profit varies in accordance with the terms of deposit. The terms, and their rate of interest EXIM Bank Ltd are as follows:
List of Deposit Rate
|Deposit Rate||Provisional Profit Rate|
|Mudaraba Savings ‘Deposit||7.00%|
|Mudaraba Short Term Deposit||6.00%||.|
|Mudaraba Term Deposit|
Carrying money is difficult, and risky. That’s why money can be transferred from one place to another through banking channel. This is called remittance. Remittance of funds is one of the most unportant aspects of the commercial bank in rending services to its customer. Commercial Bank in Bangladesh offer the facility of transferring funds, from one place to another, of their customer as well as to the general public following the rules of Money Laundering Act. Such transfer of fund can be effected either through Demand Draft of telegraphic transfer. The aforesaid two methods of remitting money from one place to another within the country is know as inland remittance. While it is for out side Bangladesh the same is called foreign remittance. The advantage of the facility is the quick transfer of money with minimum cost and also the risk of physical transportation of cash is eliminated.
Types of remittance
Between banks, and non banks customer, within the same country, banks in the different centers, central bank in the same country, and central bank for different customer. The main instruments used by the EXIIM Bank of remittance of funds are
• Payment Order (P0)
• Demand Draft (DD)
• Telegraphic Transfer (IT)
Pay Order is same as Demand Draft. Pay order is suitable in the within the city. Because by depositing is in any bank, and in any branch a customer can collect money. In that case a specific amount of charge must be given to the bank as commission, and vat. Example: suppose Ismail purchase a pay order for Limon in the must have an account in a bank. In that case Ismail should have to buy a 4 taka revenue stamp. Pay order can be bank to bank or bank to other bank.
Purpose of Pay Order:
a) The purpose of a pay order is to effect transfer of fund from one hand to another. Such transfer of fund should be for a specific purpose only. That is, when a bank intends to make payment on its own behalf or an individual desires to furnish a guarantee of. payment by a bank on his account to some one else who does not accept his cheque, it is issued for undercharged liability.
b) A pay order may be issued to effect payment its own account by one bank to another bank in settlement of cheque returned after clearing house, proceeds of TT, against call money received etc.
c) It may be issued by the bank in payment of its other dues like Income Tax, house rent, etc.
d) A pay order may also be sold to any person, who desires to offer the same in payment of earnest money and other dues to Govt. agencies, Autonomous bodies, Companies, Local Authorities, etc. in the course of business and other dealings.
Cancellation and Revalidation:
a) If the purchaser requests for cancellation of the pay order after its issue and before it passed to the hand of the payee, the same can be done after obtaining a written request from him verify his signature on the letter of request.
b) But if the purchaser requests cancellation and refund of the amount, after lapse of some time, the consent of the payee as to refund is required to be produced by the purchaser.
c) If the purchaser is a valued customer a pay order may be cancelled as a very special case, in the absence of a written consent from the payee after obtaining sufficient indemnity from the purchaser.
d) A pay order, which has become stale, may be revalidated if tendered by the purchaser.
Accounting Procedure of P0:
Issuance of P0
|Dr.||: Cash/Party’s A/C|
|Cr.||: Bills Payable: (Pay Order A/C)|
|Cr.||: Income A/C Commission of pay order|
|Cr.||: Vat on Banking Service|
|Payment of Pay Order:|
|Dr.||: Bills Payable: (Pay Order A/C)|
|Cr.||: Payee of the PO of Collecting Bank.|
Pay Order commission, and other charge
Table 3: List of Pay Order Commission, and vat
|1 to 10,000
10,1001 to 100,000
100,001 to Above
Demand Draft is a written order by one branch of a bank upon another branch of the same bank to pay certain amount of money to the order of a specified person. DD may issued to any person, and it can also be issued in favor of a firm, company or local authority on written request properly signed by the purchases. It is an order to pay certain amount. Its include issuing date, name of payee, serial number, hidden code, amount in words, and figurers, verifications of authority officer. It is negotiable instrument like cheque. It can be endorsed, collected, and delivered to the endorsee. Its also include DD test number must given for the amount of 25,000, and above. Signed by two party holders, it is an order not a bearer instrument, prepared of Inter Branch Credit Account (IBCA), and sends out.
Issue Of Demand Draft:
· The customer is asked to complete filling a form of DD which is treated as an application as well as voucher. The application form should be checked carefully.
· Commission VAT & Telephone charges are calculated and inserted in the case provided in the form.
· The voucher given to the customer to deposit the cash with the cashier.
· The cashier receives the cash and delivers the voucher to the deposit incharge who will handover the same to Remittance department against initial in his book.
· Draft is prepared and entered in drafts issued Register and the DD number to be written on the voucher.
· Branch-wish serial number is given on the draft besides the printed number putting on oblique (I) in between. The amount of the draft is protectographed.
· Draft Block and the Voucher along with the register are sent to the officer in charge for checking and signatures. He signs the draft and Voucher and initialed the counterfoil of the draft and the Register.
· Then the draft and Voucher are sent to the Manager/Second Officer for Second signature.
· Test of the Draft to be inserted upon the DD, if it is for above Tk,. 25,000/-
· The draft is normally crossed and delivered to him (the purchaser) against his acknowledgement on the Voucher.
· If the amount is tendered by a cheque, the drawer of the cheque and the purchaser of the draft should be the same person, i.e., the signature on the cheque and on the application form must tally.
o The cheque is sent for passing and cancellation.
· After the cheque is passed similar procedure as explained above is adopted for issuing draft.
Cancellation Of Demand Draft :
The purchaser may request to cancel the draft purchased by him and ask for refund of money. For cancellation of a draft the following points should be kept in mind.
· On receipt of application along with the demand draft for its cancellation the signature of the application is verified from the original application form and the genuiness of the Demand Draft is examined.
· Before the draft is cancelled it is ascertained that no Duplicate Draft has been issued.
· If the date if issue of the draft is earlier, consent of the payee in writing should be obtained.
· If the draft is in favour of a company, semi-government body or government official, consent of the payee in writing is essential.
· If the draft has been negotiated, the draft should not be cancelled.
· The signatures of officer on the draft should be crossed but in no case torn, and the draft be marked Cancelled’. A note in respect of cancellation should be made in the draft issued Register and on the application.
· The cancelled draft should be attached to debit voucher along with the request letter of the purchaser.
· In case of cancellation of a DD, payment procedure would be Dr. HO General a/c drawee branch & Credit Payee.
· The drawee branch must be advised about the cancellation of draft through copy of Debit advice, second copy to be sent to Head Office and the third one to be kept with the debit Voucher.
Revalidation Of Demand Draft:
a) A draft like cheque becomes stale after lapse of six months from the date of issue. The purchaser of the draft may approach the issuing branch to rev alidate the draft to make it payable again.
b) The draft should be examined and there must be no alteration in the draft.
c) The purchaser must give a letter in writing requesting for the revalidation of the draft. His signature on the letter should be duly verified by an officer.
d) All particulars of the draft should be compared from the Draft issued Register. Before the draft is revalidated it is ascertained that no duplicate draft has been issued. A note about revalidation of the particular draft be made in the Register.
e) A Rubber stamp reading ‘Revalidated on should be affixed on the draft under the signatures of two authorized official.
The drawee branch should be intimated about the revalidation of the draft. A note to this effect in the remarks against the related entry in the draft payable Register should be made at the drawee branch.
DD Accounting Procedures:
Issuance of DD
|: Party’s A/C/Cash
: EBG A/C (…………………..Br.)
|Cr.||: Income C/C Commission|
|Cr.||: Vat on Banking Service|
Payment of DD with advice
|Dr.||: EBG A/C (……………………Br.)|
|Cr.||: Bills Payable: (DD Payable)|
|Dr.||: Bills Payable: (DD Payable)|
|Cr.||: Party’s A/C|
Payment of DD without Advice
|Dr.||: DD paid without Advice (Suspense A/C)|
|Cr.||: Bills Payable: (DD Payable)|
|Dr.||: Bills Payable: (DD Payable)|
|Cr.||: Party’s A/C|
After receipt of DD Advice
|Dr.||: EBG A/C (……………………..Br.)|
|Cr.||: DD paid without advice (Suspense A/C)|
Telegraphic Transfer (Ti):
Telegraphic Transfer may be effected at the written request of any person and against value received from him. A written application on our prescribed form duly signed by the purchaser should be obtained. if the application for issue of telegraphic transfer contain instruction to debit the account of the purchaser his signature should be verified. It is however, preferable to obtain a confirmatory cheque from the customer.
Application of TT
The application form should be invariably checked on the following points:
a) That we have a branch in the on which Telegraphic Transfer will be issued and the said branch has Test arrangement with the issuing branch.
b) Full name of the payee and his account, in case instructions are to ‘Credit this account’, or full address in case the instructions are to ‘advise & pay’ are there.
c) The amount of T.T., commission VAT and Telegram charges should be received from the purchaser. The total amount may be paid in cash or tendered by a cheque if he is customer of the branch. Some times, the customer may also desire to pay the amount of Telegraphic transfer by a cheque and commission and telegram charges by cash.
d) Incase of amount tendered by chque, the drawer of the cheque and the purchaser of the T.T. should be the same person, viz, the signature on the cheque and on the application should tally. Such cheque should be in favour of EXIM Bank Ltd. or yourselves.
e) Now, a cost memo for the T.T. is to be prepared by the officer under his signature, which contains the amount of T.T. commission & Telegram charges & is delivered to the purchaser.
f) Entry to be passed serially in the TI issue register (branch wise)
g) Now the massage has been correctly prepared by the officer concerned as to the amount, name of the beneficiary, instruction regarding mode of payment and place of payment.
h) The test should be correctly prepared by the concern officer.
i) T.T. over telephone to be transmitted. Branches with teleprinter facilities should transmit T.T. massage through Telex.
j) TI advice to be prepared in triplicate in our printed form in respect of the TT. Original copy to be dispatched to the TI paying branch, second copy to be sent to Head Office along with Head Office General account credit sheet of the transaction day and the rest copy to be retained with the TI issue voucher.
Accounting Procedure Of TT Issue:
Dr. Cash/Parties a/c.
Cr. Exim Bank General a/c……………..branch.
Cr. Commission on IT a/c.
Cr. VAT a/c.
Cr. Telephone Charge a/c.
Different between pay order, and demand draft
There are some different between pay order, and demand draft. In case of demand draft both the payer, and payee need to have account. But there is no certain rule for pay order. PO is used in the same clearing area. DD is used for all kinds. DD can not be done in the same clearing area. DD is drawn on certain Bank officer. But there is no certain rule for PO.
Cheques, Pay Order (P.0), Demand Draft (DD) collection of amount of other banks on behaves of its customer are basic functions of a clearing department.
Clearing is a system by which a bank can collect customer’s funds from one bank to another through clearing house.
Clearing house is place where the representative of different banks get together to receive, and send cheque with another banks.
Normally Bangladesh Bank performs the clearing house in Dhaka, Chittagong, Rajshahi, and Khulna, and Bogra. Now they launch the clearing house at Rangpur. Where there is no branch of Bangladesh Bank, Sonali bank arranges this function.
Type of Clearing
There are two types of clearing. They are given bellow:
a) Outward Clearing
b) Inward Clearing
When the branch of a bank received cheque from its clients drawn on the other banks within the local clearing sector for collection through clearing house its called Outward Clearing. The instruments are received duly entered in the voucher/deposit slip to be recorded in the subsidiary Book. The particular of the instrument are entered in the outward clearing register/computer. The instruments are arranged bank-branch wise. The computer diskette with the relative instrument are sent to our Motijheel Branch for clearing purpose. The entry is passed as under:
Dr. EBG A/c – Motijheel Branch Cr. Deposit A/c –
Dr. Depositor A/cCr. EBG A/c – Motijheel Branch (For the return & by responding the IBDA)
The amount of the instrument received from the branches & the clients are entered in the outward clearing Register/Computer & IBDA’s are entered in IBDA received register.
The clearing house Book/Computer diskette is prepared in duplicate & the total is to be agreed with the clearing register/computer.
The following entries to be passed by the main branch i.e. Motij heel Branch while instruments are sent to clearing house i.e. Bangladesh Bank to give the accounting effects:
Dr. EBG A/c, FAD, Ho Cr. Party’s A/c (Motijheel branch) Cr. EBG A/c (Concerned branch)
When the banks received cheque drawn on them from other banks in the clearing house its called Inward Clearing. The instruments drawn on our Bank as received from other Banks in clearing house are entered in the clearing house Book/Computer from the main schedule of the respective Bank mentioning the amount & the number of the instruments & the following entries are to be passed:
Dr. Sundry Depositor A/cIPD/DD Payable etc. A/c (Motijheel Branch)
Cr. EBU A/c (Sub-members/concerned branch)
Cr. EBG A/c FAD, H.O
Advantage of Cleaning House:
a) Settlement of Mutual Transaction.
b) Risk Minimization.
c) Liquidity facility.
Who will deposit cheque for dewing?
Only the regular customers who have savings, current, Short Term Deposit (STD), and loan account in the bank can deposit cheque for collection of fund ‘through clearing house. Safety measure at the time of cheque received for clearing, collection of OBC & Transfer.
· Name of account holder similar in the cheque & deposit side.
· Amount in the cheaque & deposit slip must be similar in words & in figure.
· Date in the cheque may be on or before (but not more then six months back) clearing house data.
· Bank & branch name of the cheque, its number & data in the deposit slip.
· Cheque must be signed.
· Signature of confirmation of data amounts in words or in figure cutting & disfigurement of cheque.
· Cheque should be crossed. (Not for bearer cheque)
· Account number in the deposit slip must be clear.
· Depositor’s signature in the deposit slip.
Definition of Cheque:
Cheque is one kind of Negotiable instruments. It is an unconditional written order, bearing date to the banker from the drawer, where maintaining his account to pay. on demand a certain specified sum of money expressed in both figures and words, to the named person his order of bearer.
According to sec-6 of NIA-1881-A cheque is a bill of exchange drawn upon a specified banker and not expressed to be payable otherwise than on demand.
Qualities of Cheque:
a) Written order
b) Unconditional order
c) Order on a banker where the drawer maintains his account
d) Signature & date
e) Specified payee-Person or to bearer
f) Specified amount both in figure & amount
g) Specified 3 (Three) parties-Drawer, Drawee & Payee
h) Printed format
i) Payable in legal tender currency
j) Presentation for payment
Issuance of Cheque Book:
The deposit accepted by the Banker should be with drawable by cheques. Withdrawals are allowed by effecting remittances or by book transfer under written instruction of the account holder.
Through it seems to issue of a cheque book is an easy task, but various risks are involved there. The concerned officers have to be more careful and cautious/conscious while issuing a cheque book and remember the pre-requisites conditions before issuing of a cheque book.
Cheque may be dishonored for any one of the following reason
ü Insufficient fund.
ü Amount in figure and word differs.
ü Cheque out of data or post dated.
ü Payment stopped by the drawer.
ü If the cheque is post dated/stale.
ü If there is not sufficient fund in the account.
ü If the signature of the cheque dose not agree with that of SS card.
ü If the amount in figure & word differs.
ü If the cheque is mutilated but not confirmed by the authorized officer.
ü If the cheque is Ante-dated.
ü If there is a material alteration but not confirmed by the drawer.
ü If there is notice of death, insanity & insolvency of the A/C holder of
winding up of a company.
ü If cheque is account payee but presented at cash counter.
ü If (garnishee order/Attachment order received from the court.
ü Stop payment order from the account holder.
ü Endorsement incorrect.
ü Endorsement required.
ü Endorsement irregular.
ü Account crossed cheque presented at cash counter.
ü Closed account.
ü Whether the cheque is presented after office hour.
ü Whether the cheque is presented at a branch where the client has no account.
ü Joint account but cheque is signed by one person.
In the event of dishonor of a cheque due to the reasons other than valid one, the drawee branch is liable to the drawee for any loss or damage caused thereby as per NLA-Sec-85 (1).
Cheque book issue and register
After running out the cheque book clients place the part of cheque to the MTO to get the new one. After verification of the older one it is recorded to the register book, and given to the clients the new one.
Format of Cheque Book Register
Customer come & tells that they need a cheque book, and we provide the cheque book for Current Account & Saving Account. Then we go for cheque book issue register.
Format of Cheque Book Register
|Date of Issue||Account No||Name of Account Holder||Particular of cheque Initial book issue||Customer sign|
Format of In voice Clearing Register
In general banking department they follow the traditional banking system. The entire general banking procedure is not fully computerized. Every day after 2pm they collect Demand Draft (DD), and Pay Order (P0) our duty was entry the register book. This is the format that we worked.
Format of Invoice Clearing Register
|Name of||Name of||Cheque||Name of|
|SL. No.||the bank||the Branch||No.||Account||the deposit||A/C No.|
In modem banking the machinery has become complex as far as smooth transaction, and safety is concerned. Customer does place, and receive bill for their ‘counter part due to transaction. Commercial banks duty is to collect bill on behalf of their customer.
Types of bills for collection.
1) Outward Bills for Collection (OBC)
2) Inward Bills for Collection (1BC)
Outward Bills for Collection (OBC)
OBC means Outward Bills for Collection. OBC exists with different branches of different banks outside the local clearing house. Normally two types of OBC.
1) OBC with different branches of other banks.
2) OBC with different branches of the same bank.
Procedure of OBC
i. Entry in the OBC register.
ii. Put OBC number in the cheque.
iii. ‘Crossing seal’ on the left corner of the cheque & payees account will credit on realization ‘seal on the back of the cheque with signature of the concern officer.
iv. Dispatch the OBC cheque with forwarding.
v. Reserve the photocopy of the cheque, carbon copy of the forwarding, and deposit slip of the cheque in the
Inward Bills for Collection (IBC)
When the banks collect bills as an agent of the collecting branch, the system is known as [BC. In this case the bank will work as an agent of the collection bank. The branch receives a forwarding letter, and the bill.
Procedure of IBC
i. [BC against OBC: To receive the OBC cheque first we have to give entry in the [BC register. The [BC number should put on the forwarding of the OBC with date.
ii. Deposit of OBC amount: OBC cheque amount is pt into the ‘sundry deposit-sundry creditors account’, prepare debit, and credit voucher of it. If the OBC cheque is honored, send credit advice (IBCA) with signature, and advice number of the concern branch for the OBC amount.
iii. Again place in the clearing house or send the OBC cheque with return memo to the issuing branch according to their information.
Commission for collection
List of commission for collection
|Type of service||Nature of
|Existing (IN Tk.)|
Collection of out station cheque/
Commission i. Up to Tk 25,000/-@ 0.20% Minimum Tk.25/
ii. Tk. 25,000/to 1.00/Lac @ 0.20% Minimum
|iii. From Tk. 100,001/ to 500,email@example.com%
Minimum Tk. 200/
|iv. Over 500,firstname.lastname@example.org% Minimum Tk. 600/
Maximum Tk. 3,000/
Postage charge At actual Minimum Tk. 25/
Strength, And Weakness of the EXIM Bank Limited
Analyzing its general banking activities strength, and weakness scenario will be as follows.
ü Energetic as well as smart team work in general banking department
ü Good Management.
ü Corporation with each other.
ü Good banker customer relationship.
ü Transparent and quick decision making.
ü Lac of own ATM service.
ü Lack of advertisement policy.
ü Lack of computerized information system.
ü Online banking has not being introduced yet in few branches.
Findings In General Banking Department Of The EXIM Bank Limited
Ø In general banking department they follow the traditional banking system. The entire general Banking procedure in not fully computerized. As a result some processes for instance collecting money from the deposit take a long time to perform.
Ø The clearing section cheque clearing procedure is also lengthy process.
Ø There is no computer in Accounts Opening Section, and Remittance section. That’s why the service is not on time as the customer’s demand.
Ø Lack of variety of service is also a drawback of the general Banking area of the Bank of Bangladesh Ltd. The bank provides only some traditional service to its client. As a result Bank is falling behind in competition.
Ø They are not using database net working in Information Technology (IT) department. So, they have to transfer data from branch to branch to head office by using floppy disk, This thing happened everyday, and sure it is not good system.
Ø In case of opening an account some big parties come to open accounts in reference with the high official of the Bank. They do not submit all papers that required opening an account.
Ø According to some clients opinion introducer is one of the problems to open an account. If a person who is now in the city wants to open an account, it is a problem for him/her to arrange an introducer of SB or CD accounts holder.
EXIM Bank web site