Amdad NCCB Report

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INTERNSHIP REPORTON

Prepared For:SHAHIDA KHANAM

Lecturer,Department of Business Administration,Sylhet International University,

Prepared By:MD EMDADUR RAHMANRegistration No: - 063201067Roll No. 1137Department of Business AdministrationSylhet International University

Letter of TransmittalFebruary 26, 2011SHAHIDA KHANAMLecturerDepartment of Business Administration,Sylhet International UniversityShamimabad, Bagbari, Sylhet, 3100.Subject: Submission of Internship Report.Dear Madam,

It is my great pleasure to submit the internship report on "Overall Banking System of NCC

Bank Limited" Which is a part of BBA Final Semester to you for your consideration.I made sincere efforts to study related materials, documents, observe operations performedin NCC Bank Limited and examine relevant records for preparation of the report.Within the time limit, I have to make this report as comprehensive as possible. But theremay be some mistakes due to various limitations. For this reason, I beg your kindconsideration in this regard.Thank You.

Yours Faithfully,..............................BBA Final SemesterID No - 1137Department of Business AdministrationSylhet International University.

Letter of acceptance

This is to certify that, Md Emdadur Rahman, ID: 1137, BBA, Sylhet InternationalUniversity, Sylhet has successfully completed his Project report on "Overall Banking


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System of NCC Bank Limited". Laldigirpar Branch, Sylhet under my direct supervision.His work is quite satisfactory.Now I am convinced to permit him to defend his project work before the respective panelof Judges.

I also certify that the project paper is an original one and has not been submitted elsewherepreviously for publication in any form. He is sincere, honest and hard working. I hope thatthis project work will contribute in his career.

I wish him all the success in life.

.Shahida KhanamLecturer,

Department of Business Administration,Sylhet International University, Sylhet.

Content

Chapter-1 IntroductionChapter-2 NCC Bank Ltd.An Over ViewChapter-3 Remittance Function & DepositChapter-4 Loans & CreditsChapter-5 Foreign ExchangeChapter-6 Deposits (2005-2009)Chapter-7 SWOT AnalysisChapter-8 Conclusion:

Overall Banking System Executive Summary

National Credit and Commerce Bank Limited (NCC Bank) is a well established Bank inBangladesh. It is developing and expanding its branches in the country with innovativeproducts and banking services, to gain greater acceptance as an effective and efficientmeans of intermediation and to contribute to the overall wealth creation. This report isprepared as a requirement of the internship phase of BBA program of Sylhet InternationalUniversity of Bangladesh. This report focuses threee months working experiences inNational Credit and Commerce Bank Limited, Foreign Exchange Branch. This report willgive a clear idea about the activities and operational strategies of National Credit andCommerce Bank Limited. The whole working process of NCCBL is divided into 3sections-(1) General Banking, (2) Credit Section, (3) Foreign Exchange. Here first chaptersbasically discuss about the background of the report, objectives and methodologies used inpreparation of the report and limitation faced at preparation. The main objective is toidentify the various activities provided to customers by National Credit and Commercebank Ltd. and descriptive analysis about their operation. Next I have tried to concentrate on


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Internship duties and banking function (general banking, loan and advances and foreignexchange business) and marketing part on the basis of some specific topics. The objectiveof the internship program was to familiarize the student with the practical implementationof the knowledge provides the theoretical aspects of the practical life. It is a pleasure forme to submit the internship report titled Overall Banking System of the National Credit

and Commerce Bank Limited While preparing this report; I have tried to gather as muchinformation as possible

1.1Introduction:Bachelor of Business Administration (BBA) is a professional course. The course isdesigned with an excellent combination of practical and theoretical aspects. Aftercompleting BBA certain times is preserved for internship. As a student of BBA with therequirement of my course I was assigned to National Credit and Commerce Bank limited(NCCBL) to Laldigirpar Branch, Sylhet for my internship. However, I was very muchinterested to know how to develop banks. So I chose the research topic as OverallBanking System and Performance Analysis of NCC Bank Ltd.They intend to ensure the

trust and confidence of the customers through focused customer orientation, quality ofservice and state-of the art technology, transparency in dealing and adopting the bestpractices of Corporate Governance, achieving excellence in all the endeavors to createvalue for all the stakeholders. The significant challenge posed before them is themaintenance of the quality of business simultaneously with its information and businessconsolidation processes. This report is prepared based on the: topic Overall BankingSystem and Performance Analysis of NCCBL.Due to this practice the remittancedepartment of NCC Bank has been growing to provide a good participation in theprofitability of the Bank.Basically, this report is highlighted on overview of NCC BankLtd, Structure, Analysis, Present status, Performance of NCCBL, Deposit Mobilization,Utilization of Fund, Foreign Exchange, Own Experience, Recommendation andconclusion.

1.2 Scope of TheStudyhis internship program gives me a great scope or opportunity for gather experience andknowledge in several areas of banking by which I can evaluate or expose myself. During:-efirst few week of my internship period, I was able to communicate most of the employeesof the bank. During the first month I was able to accustom and adapted myself with theworking environment of NCC Bank Limited. While preparing this report, I had a greatopportunity to have an in depth knowledge of all the banking activities practices by theNCC Bank Ltd. It also helps me to acquire perspective of a leading private banking inBangladesh. In term of Bank we can easily understand that the financial institution dealswith money.

1.3 Objectives of the StudyThough the main objective is to prepare myself in such a manner as though I can equipmyself with the practical field as well as I will be able to know the different aspect of thebanking sector and to evaluate how a bank is performing in Loans and Advance sector. Inaddition, the study seeks to achieve the following objectives:


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o To know the organizational framework of the bank

o To know the work environment and organizational behaviors of the bank

o To get through all the departments of the bank and observe the actual work done

o To find out how the general banking system works

o To see how the loans and advances are provided to the borrowers

o To acquire knowledge about the foreign exchange system of the bank

o To analyze the growth of deposits in the bank

o To analyze the growth of advances in the bank

o To analyze the growth of investments in the bank

o To compare the financial performance among several years of the bank and with otherbanks

1.4 MethodologyzIn collecting the necessary data, a special care has been taken so that all the variables maynot affect the objectives of the study. Data needed for conducting the study have beencollected from the following sources.a) Primary source andb) Secondary sourcePrimary sourcesThe primary data in this report mainly includes surveying the different departments of theBank. It includes-

Scheduled surveyObservation while working in different desksInformal discussion with professionals

Secondary sources:Secondary sources are the permanent and printed sources of information. This are-Annual reports of NCCBLDesk report of related departmentBouchers of National Credit and Commerce Bank limitedDifferent reference booksStudy of related books, seminar paper, training papers, Publication of statements

1.5 Rationale of the StudyThe word bank refers to the financial institution that deals with money transaction.Commercial banks are the primary contributors of the economy of this country. On onehand they are borrowing money from the locals and on the other hand lending the same to


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the locals as loans and advances. So the people and the government are very muchdependent on banks. Moreover, banks are profit earning concerns, as they collect depositsat the lowest possible cost and provide loans and advances at higher rate. The differencebetween two is the profit for the bank.

This report basically deals with the loan and advance management of National Credit andCommerce Bank Limited (NCCBL) covering the areas like General Banking, Loan andAdvance, Foreign Exchange, Remittance, Financial Performance, Online Banking, etc.1.6. Limitations of the Study1. Although I have enjoyed full co-operation from employees of NCCBL and they alsogave me much time to prepare this report properly in the way of my study, I have facedsome difficulties, which can be termed as limitations. They are as follows:2. It should be certainly mentioned that time constraint is the first limitation of the study.Only three months is not sufficient for gathering perfect knowledge on the vast area ofbank.3. In some cases, they could not be able to supply my topic related data for preparing a

more in depth research study. Office secrecy was one of the most important problems.Disclosing of some information was restricted.4. In case of secondary data collection, there was very little secondary information. Therewere few support books, reports, journals, etc. moreover, the branch office had very littleof this information. Thats why bulk of it had to be collected from the head office. As theofficers were very busy with their day to day work, they could provide very little time

2. 1 History of NCCBLNational Credit and Commerce Bank limited came to reality through the National Creditlimited. Prior to conversion into a scheduled commercial bank, National Credit Limited(NCL) was incorporated as an investment company on 18th November 1985. It made itsJanuary on 25th November 1985 at its registered office and first branch at 7-8 MotijheelCommercial Area, Dhaka-1 000 with initial authorized capital of 1k. 30 cores.It was mostly involved in collecting suitable resources and making profitable investments.But within a very short period of time this investment company turned into a scheduledcommercial bank. It was turned into a bank because it faced many restrictions bothcollection and disbursement of funds while it was operating as an investment company.While this turnover was going on all types of transactions were closed for about fourteenmonths from April 22, 1992. After that, with the permission from the government andBangladesh Bank, NCL was converted in a fully fledged commercial bank and started itsbanking operation on 17thMay 1993, in the name of National Credit and Commerce BankLimited. It has been registered under the company act-1913, as a private commercial bankwith paid up capital of Tk.39 cores to serve the nation along with 16 branches.However, NCCBL runs as per company rule, free from government intervention. Year1994 & 1995 were the full operation year of the bank. During this period gave emphasis onconsidering the affairs of the institution as well as expansion of business work. During last13 years if its operation NCCBL has acquired commendable reputation by providingsincere personalized service to its customers through a technology based environment.

2.2 Objectives of NCCBL


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The main objective are to maximize profit through customer satisfaction which very muchreflects the idea of marketing concept. NCCBL has been ensuring maximum profit byavoiding best and improved customer service along with other corporate objectivesmentioned below:v to provide excellent customer service to its clients, so that they choose NCCBL first for

their banking.V Ensure high returns on investment and services with different service products.V Making profitable investment and grow in annual profit management.V To remain as the market leader through diversification of business and automation ofbanking operations.

2.3 VisionThe purpose of the bank is to become The Bank of Choice in the communities we serve.We accomplish this by offering to our customers the financial services they expect whileproviding a return to our owners. In accomplishing this mission, the bank has now beenfree from all the natures of a problem bank through fulfilling all the conditions set by the

central bank. We proudly say: NCCBL is profit-making and problem-free.

2.4 MissionPhilosophically, 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 whoare in need of its use and who can give ample security that the loans will be paid. From theprofits made from lending money at interest the banker agrees to pay the legitimatedepositors a fixed sum of interest besides safe-guarding the deposits. Moreover the bankfollows the followings as its mission:Maximize the profit within the shortest possible timeTry the best level to satisfy customersEstablish NCCBL as the best performing bank in the country.

2.5 Products & ServicesThe Bank has wide range of product line to suit the need of the strata. In addition toconvention product both Asset and liabilities sides the Bank offers special credit productsfor its customer. This are-

Consumer FinancingLease FinancingSmall loanFestival loanHousing loanLong-term & short term loan financingSyndicationReal Estate & Civil constructionSME & Agro based.

Branch Network of NCCBL


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During the year the bank opened 08 branches which raised the total number of branches to54.The bank has already taken steps to open 06 (Six) more new branches in 2007.

3.1 Deposit MobilizationGeneral banking department is the heart of all banking activities, especially to mobilize the

deposits. All other departments are linked with this department. It plays a vital role indeposit mobilization of the branch. National Bank Limited provides different types ofAccounts, locker facilities, special types of saving scheme and flexibilities of remittanceunder general banking.This department performs the general function of banking. In National Bank Ltd. Forperforming the operation of this department a good number of people are allotted for thepurpose of Deposit Mobilization. The general banking department of National Bank(Foreign Exchange Branch) consists of the following section:1. Dispatch section2. Accounts opening section3. Cash Management section

4. Remittance section5. Deposit section6. Clearing section7. Credit Card section

3.1.1. Dispatch sectionDispatch division operates the function of dispatching the intimation letter to the client,IBCA, IBDA, and OBC to the other banks for internal transaction with bank. The officerengaged in the dispatch division maintains two types of register books to entries for recordof these documents particulars.These two types of register books are:1. Inward mail registers.2. Outward mail registers.

3.1.2. Accounts opening sectionOpening Different Types of AccountsAccount opening is the very first and preliminary job for a bank. As NCCBL does notmake any business contract unless having an account on their bank, so account opening isthe most important work of the general banking division.(I)Current Deposit (CD) Account (A/C): Any businessman, firm, limited companies, localbodies, corporate bodies, etc. can open a current A/C with NCCBL. Current deposit is100% demand deposit and account holder can deposit/withdraw his/her deposits frequentlywithout any limit.Requirements for opening CD A/C: Requirements may vary from types of the organization,such as:Individual Personal ID Copy of a Passport or ward commissioner certificate Any introducer of that respective bank Fill up Know Your Customer (KYC) form.


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Joint Owner Trade license Proprietors ID any introducer of that respective bank

Fill up Know Your Customer (KYC) form.

Limited Company Memorandum of Articles (MOA) Association of Articles (AOA) Certificate of Incorporation.

Features of CD A/C: CD accounts have the following features:

(1).Submitting Tk.5000 to open a current account.(2).It is understood that the balances at credit will not less than Tk.5000. A

minimum charge Tk. 100 must be paid on all operative accounts.(3).Only the form of cheque book supplied by the bank should be used. Chequesmaterially altered will not be paid unless such alteration bears the signature ofthe drawer in full.

(4).The account holders must give the same signature for withdraw money thatdeposited in the bank previously.

(ii) Saving Bank Deposit (SB): Any individual person, local bodies, club, society,association house wife, student, non-profitable organization, etc. can open asaving bank deposit account with NCCBL. Savings bank deposit is both timeand demand deposit, of which 10% is demand and 90% is time deposit and theaccount holder can withdraw his/her deposits twice in a week up to a certainlimit.

Requirements for opening SB A/C: Requirements may vary from types of the organization,such as

IndividualPersonal IDCopy of a Passport or ward commissioner certificateAny introducer of that respective bankNominees photographFill up Know Your Customer (KYC) form.Joint OwnerTrade licenseProprietors IDAny introducer of that respective bankFill up Know Your Customer (KYC) form.Limited CompanyMemorandum of Articles (MOA)Association of Articles (AOA)


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Certificate of Incorporation

Features of SB A/C: SB accounts have the following features:1) Any matured but not unsound mind can open a savings account.2) One account holder can transfer his or her account in the branch to another

branch without any cost if he or she interested.3) Minimum deposit Tk 2,000 to open an A/C4) SB A/C offers 6% interest charges semi-annually to the depositors account.5) One time at least 6 months an A/C holder must transaction with bank to

continue the A/C.6) Charges Tk.250 for close

(iii) Fixed Deposit Account (FDR):Any individual person, businessman, firm, limited companies, local bodies, corporation,corporate bodies, etc. can open Fixed Deposit A/C with NCCBL. FDR is 100% timedeposit and A/C holder can usually withdraw his/her deposits after maturity of the fixed

deposit. However, depositors of FDR can withdraw their deposits before maturity if theydesire.FDR is also known as time liabilities or term deposits. Higher rate of interest isgiven on this type of deposit. Fixed deposits generally constitute more than half of the totaldeposits with the bank.

Requirements for opening FDR:Minimum requirement Tk.50,000 to make a FDRAbove Tk.5, 00,000 in case of FDR, a report regarding FDR must be sent toBangladesh.

Interests & other charges:Time Interest Rate1 month 8% p.a.3 months 11.50%p.a.6 months 11.75% p.a.12 months 12%p.a.

Government tax: Government will charge 1 0% income tax on the amount of income frominterest.(iv) Short Term deposit (STD): Any individual person, businessman, firm,

limited companies, local bodies, corporation, corporate bodies, etc. canopena short term deposit account with NCCBL. STD is 100% time deposit and anaccount holder can withdraw his/her deposits with prior notice to the bank.For that reason STD is also called a Special Notice Deposit A/C.

(v) Special savings Scheme (SSS): Any individual person can open a specialsavings scheme deposit account with NCCBL for a tenure of 5/10 years withmonthly deposit of Tk.500 and multiple of Tk.500 up to Tk.10000. SSS A/Cis 100%term deposit and account holder can withdraw his/her deposits aftermaturity of SSS/A/C.

(vi) Special deposit Scheme (SDS): Any individual person, businessman, firm,limited companies, local bodies, corporation, corporate bodies, etc. can


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open a SDS A/C with NCCBL. SSS is a term deposit with payment ofinterest is payable on monthly basis. An account holder can withdrawhis/her deposits after maturity of SDS A/C.

3.1.3. Cash management section:

Cash management section of any bank plays vital role in general banking departmentbecause it deals with the most liquid assets. The proper management of this section entailsoverall effectiveness of any bank. NBL has a very equipped cash section. This section isresponsible for the following function:

1. Receipt of deposit.2. Making payment to the customers.3. Management of vault of the branch.

1. Receipt of deposit This section receives deposit or funds from the customer and thecollection procedure as follows:

At first the amount is counted and if ok then verified the purity of the notepaid if there is any confusion of the teller.word over the deposit slip.At last the receiving officer/ teller signed the deposit slip and by the sign of

authorized officer the deposit of fund finished in favor of a customer.In case of received of clearing cheque, the cheque is scrutinized at first

whether the cheque is authenticated as per the NI Act. If satisfied then acrossing is marked so that this cheque never been enchased over the cashcounter

Then the amount is kept apparently deposited in the customers account andthe cheque proceeds to the clearing house accordingly.

2. Making payment to the customer: The payment is made to the customer only against avalued authentic cheque. The teller has to follow the following steps in making suchpayment:

Receiving the cheque from the customer.Examining the cheque.

In case of examining the cheque, the teller is predated then the date is to be sure about thefollowing questions:

(i) Amount is written in word and in figure and both is valued same;

(ii) Signature is installed and it is as it is the signature kept in the bank;

(iii) There is sufficient amount in the customers accounts for making payment.

Finally the cash paid seal is marked over the cheque leaf for the collectionof the cheque after making the payment to the customers.


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3. Management of the vault:The cash section also manages the vault of the branch. The manager of cash section is thein charge of the necessary liquid money in the vault for the payment of the customer.

3.1.4 Remittance: Foreign Exchange takes place in NCCBL.

Remittance means transferring of fund through different instruments other than cheque.

Remittance is basically two types:

Local remittance.Foreign remittance.

3.1.4.1. Local remittanceRemittance is significant part of the general banking> The bank receives and transfersvarious types of bills through the remittance within the country. Obviously the bankcharges commission on the basis of bills amount NCCBL remittances is safe, swift,

inexpensive and simple.

Types of local Remittance of NCCBL:a) Pay Order(PO)b) Demand Draft(DD)c) Telegraphic Transfer(TT)d) Mail Transfer(MT)

(a) Pay Order(PO):Pay Order is an instrument that contains an order for payment to the payee only incase oflocal payment whether on behalf of the bank or its constitution. Unlike cheque there ispossibility of dishonoring Pay Order. NCCBL charge different amount of commission onthe basis of Pay Order amount.

(b) Demand Draft:By DD any person can send money from one branch to another branch of NCCBL. To sendthe money he/she must fill up the NCCBLs prescribed form of DD and paidcharge/commission and receives DD block. The following information are included in theDD block:

Name of the sender branchv Name and account of the party who receives the money.

For security purposes a confidential test number are included in the DD blockAmount of money to be transferredName of receiver branch

(C) Telegraphic Transfer:To send money urgently NCCBL may be requested for TT on payment of a

nominal charge and telegram charge.Any person urgently sends money from one branch to another branch withinNCCBL through TT.When a message of TT sends through phone from one


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branch to another branch in that time the message received by theauthorized officer who has a right of power of attorney. After that, he/shefills up the TT form.

Following things are included in the TT form:

TT numberIT test numberName and account number of the payeePower of attorney number of the sender and receiver of TT.The amount to be transferred.After fill up the TT form, he tests the test number of TT. If he ensures

thoroughly testing the test number then he credits the account of the payee.On the other hand, if the test number is not proved then he calls back to thesending branch of TT and request to send a new TT.

(d) Mail Transfer:Money can be sent through mail transfer to any body who has an account in any otherbranch of the same bank for this purpose the sender shall have to furnish the details like:

The name of the beneficiary and his account numberThe amount to be transferredThe name of the branch where the account is maintained

3.1.4.2. Foreign remittance:NCC Bank is the member of Money Gram and SWIFT networks. Using the services of thisglobal network, non-resident Bangladesh nationals can send money from abroad to theirhome country within a few minutes without any risk.Types of Foreign remittance

(i) Money Gram: Money Gram is represented in over 115 countries and is available at morethan 25,000 locations worldwide. In the USA alone Money Gram is available at inore than15,000 locations.

Sender completes a send form and gets a receipt. Money Gram Agentgives a Ref:

No. Which has to be passed to the receiver?NCC Bank makes an enquiry on the Money Gram computer network to obtainauthorization to pay recipient and recipient receives the fund.Money Gram is one of the fastest ways to transfer money. Customers using Money Gramcan send or receive money usually within 10 minutes from any world.

To get the money the recipient need not to have a bank account with NCCBank Ltd. NCCBL does not levy extra charge. It gives better exchange rateto the recipient.

(ii) Placid Express : In March 2002, the bank has entered a Taka drawing arrangement withPlacid Express, for home remittances of Bangladeshi expatriates in the United States.


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(iii) X-press money: The X press Money Services would like to welcome NCCBL to theirnetwork. X press Money (XM) is a web-based person-to-person money transfer system thatallows an individual to send/receive money through any of our network agents instantly.All transactions are done through secure servers using 128-bit encryption technology so asto provide maximum security

(iv)Al Fardan: Al Fardan Exchange, the pioneer in money exchange and worldwideremittance services in the U.A.E., established in 1971, is a trusted name for millions ofresidents and expatriates. A modern exchange house with advanced infrastructure andCourteous staff has an extensive network of correspondent banks all over the world tofacilitate faster, completely reliable transactions.(v) Habib express: Habib express is another important medium through which wage earnerremittance is accepted by NCC Bank. Here head office at first enter in system server andreceived necessary information about the amount of remittance, beneficiary who willreceive the amount and any reference number which work as security for Bank as well asbeneficiary. Head office gives information through fax to it respective branch from ~wherereceiver will receive money.

(vi) Dhaka Janata: Dhaka Janata are introduces to provide remittance fucilities to emigrantand other people of Bangladeshi who work as contractual basis in the Italy. Here DhakaJanata also maintain same procedure of getting information from system server includingthe name, reference number, amount, Phone number etc. Here head office sendsinformation through fax to all respective branch. All receivers when come to bank,respective branch check his information with information received from head office.

3.1.5. Deposit SectionDeposit is the lifeblood of a bank. From the history and origin of the banking system,deposit collection is the main function of a bank.

3.1.5.1. Accepting deposits:The deposits that are accepted by NBL like other banks may be classified in to,-

a) Demand Depositsb) Time Deposits

(a) Demand deposits: These deposits are withdrawn able without notice, e.g. currentdeposits. National Bank Limited accepts demand deposits through the opening of, -

Current accountSavings account

(b) Time deposits: A deposit which is payable at a fixed date or after a period of notice is atime deposit. National Bank Limited accepts time deposits through Fixed Deposit Receipt(FDR), Short Term Deposit (STD) and Beared Certificate Deposit (BCD) etc. Whileaccepting these deposits, a contract is done between the bank and the customer. When thebanker opens an account in the name of a customer, a contract arises between them. Thiscontract will be valid one only when both the parties are competent to enter into contract.As account opening initiates the fundamental relationship & since the banker has to deal


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with different kinds of persons with different legal status, National Bank Limited officialsremain very much careful about the competency of the customers.

3.1.6. Clearing:Clearing is a system by which a bank can collect customers fund from one bank to another

through clearing house.(A) Outward Clearing: When the branches of a bank receive cheque form its customersdrawn on the other banks within the local clearing zone for collection through ClearingHouse, it is Outward Clearing.(B) Inward Clearing: When the branches of a bank receive cheque drawn on them fromother banks in the Clearing House, it is Inward Clearing.3.1.6.2 Clearing House: Clearing House is a place where the representatives of differentbanks get together to receive and deliver cheque with another banks.3.1.6.2.1. Types of c1earing houseThere are two type of clearing house Those are

A) Normal clearing house

B) Same day clearing house

(A) Normal clearing house:1) 1st house: 1st house normally stands at 10 am to 11 am2) 2nd house: 2nd house normally stands after 3 p.m. and it is known as return house.

(B) Same day clearing house:1) 19iouse: 1st house normally stands at 11 am. to 12 p.m2) 2nd house: 2 house normally after 2 p.m. and it is known as return

3.1.6.3. Return houseReturn House means 2nd house where the representatives of the Bank meet after 3 p.m. toreceive and deliver dishonored cheque, which place in the 1 g Clearing House. Cheque maybe dishonored for any one of the following reasons:

1) Insufficient fund.2) Amount in figure and word differs.3) Cheque out of date/ post- dated.4) Payment stopped by the drawer.5) Payees endorsement irregular/illegible / required.6) Drawers signature differ / required.7) Crossed cheque to be presented through a bank.8) Other specific reasons not mentioned above.

3.1.6.4 Bills CollectionIn modern banking the mechanism has become complex as far as smooth transaction andsafety is concerned. Customer does pay and receive bill from their counterpart as a result oftransaction. Commercial banks duty is to collect bills on behalf of their customer.

Types of Bills for Collection of Clearing


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a) Outward Bills for Collection (OBC)b) Inward Bills for Collection (lBC)

(a) What is OBC ?OBC means Outward Bills for Collection. OBC exists with different branches of different

banks outside the local clearinghouse.Normally two types of OBC:1) OBC with different branches of other banks2) OBC with different branches of the same bankProcedure of OBC:1) Entry in the OBC register.2) Put OBC number in the cheque.3) Crossing seal on the left corner of the cheque & payees account will be

credited on realization seal on the back of the cheque with signature of theconcerned officer.

4) Dispatch the OBC cheque with forwarding.

(b) Inward bills for collection (IBC):When the banks collect bills as an agent of the collecting branch, the system is knownasIBC. In this case the bank will work as an agent of the collection bank. The branchreceives a forwarding letter and the bill.

Procedure of IBC:1) IBC against OBC: To receive the OBC cheque first we have to give entry in the IBCRegister. The IBC number should put on the forwarding of the OBC with date.

2) Deposit of OBC amount: OBC cheque amount is put into the sundry deposit sundryCreditors account, prepare debit & credit vouch of it. If the OBC cheque is honored, sendcredit advice (IBCA) with signature & advice number of the concern branch for the OBCamount.

3) If the OBC cheque is dishonored, the concerned branch is informed about it.Again placein the clearing house or send the OBC cheque with Return Memo to the issuing branchaccording to their information.Others Activities

3.2. Credit Card Section3.2.1. About Credit Card?It is a card (usually plastic) that assures a seller that the person using it has a satisfactorycredit rating and that the issuer will see to it that the seller receives payment for themerchandise delivered.

Types of Credit CardNational Bank Limited offers mainly two type of credit card according to the geographicalarea. These are Local credit card and International credit card. According to the level of


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income the local and international credit cards are divided into two categories viz. Goldcard and Silver card. These types of credit cards are described below:

(a) Local credit card:Local credit card is valid only in Bangladesh. Outside Bangladesh, the card is invalid.

Local card are two types. They are Gold local card and Silver local card. The card limit ofgold local card is Tk.50000 to Tk. 100000 and silver local card is below Tk.5

(b) International Credit Card:International credit card is valid mainly outside Bangladesh. But for the payment ofroaming facilities for Grameen phone, cardholders can use international credit cardinBangladesh. International credit cards are of two types. These are gold internationalcredit card and silver international credit card. The card limit of gold international creditcard is $2000 to $4000 and silver international credit card below $2000.

3.2.2 Yearly Charges on credit card

National Bank Limited receive card fee for new card and renew card from the cardholder.The rate of card fee for new card and renew card are the same. In case of new card the bankreceives the card fee with the next months bill. The rate of card fee are given in below:

Table: Yearly charges on credit cardType of card Card feeInternational Gold Card US$70.00International Silver card US$ 35.00Local Gold card Tk.2000.00Local Silver Card Tk.1200.00

4.1 Utilization of FundAs a private commercial bank, NCCBL has some inherit commitments to its society. Byutilization the fund from the mobilized deposit NCCBL is fulfilling its commitment whichcan gear up the economic activity. NCCBL has been extending credit facilities to thepotential, productive and priority sectors as per instruction from Bangladesh bank. For abank, good loans and advances are most profitable asset. A big portion of operating incomeis derived from lending. This activity is done by the loans and advance department.

4.1.1. Classification of loans and advancesBank is an institution where clients keep their surplus deposits and these deposits areinvested in trade, commerce and industries in the form of Loans & Advances to earn profit.Apart from earning profit, by lending to priority sector, Bank also helps countryseconomic development. Lending activities of the Commercial Banks are of two natures:

(A) Continuous Credit.(B) Term Loan.In continuous credit the client is given a credit limit for a specified period mostly for 1(one) year. The borrower is allowed to make transaction up to that limit. In other word, hecan deposit and withdraw up to the fixed limit in revolving manner.


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Term Loan, Loan is first disbursed at a time or in phases. Then it is borrowers turn torepay the Loan after a certain fixed period at a time or in installments fixed for within acertain period.

(A) Continuous credit(i) Cash Credit (Hypothecation)(ii) Cash Credit (Pledge) SOD(iii) SOD (Financial Obligation)(iv) SOD (General)

(i) Cash Credit (Hypothecation): This facility shall be available both for Trading Housesand. Manufacturing concerns against primary security of hypothecated inventory/ stocks ofFinished, Raw Materials and machineries. However, as the primary security remains at thedisposal of the borrower with practically no control of the lending institution, NCCBL shallextend such facility only against retention of adequate eligible Collateral Security favoring

bank. Criteria of such Eligible Security shall be as per circular of Head Office and withinthe guideline set by Bangladesh Bank in this regard

(ii).Cash Credit (Pledge): NCCBL shall retain the provision to extend WC finance underthe head. As the Primary Security i.e. Finished or Raw by regulation is supposed to beunder strict control of the bank, the arrangement on practical experience eventually provescumbersome due to numerous difficulties in maintaining the formalities related to strictsupervision and monitoring. Therefore, NCCBL shall prefer to consider such facility onlyunder Hypothecation unless assurance and arrangements are available about compliance onthe spirit of the portfolio.

(iii) Secured Overdraft (Financial Obligation): Credit Facility in the form of Loan andOverdraft can be considered against Lien of various Financial Obligations subject to creditrestriction or any directive as imposed by regulating authorities or Head Office. Necessaryguidelines with regard to extension of the facility shall be as per direction of the HeadOffice/ Bangladesh Bank.

(iv) Secured Overdraft (General):NCCBL shall consider facilities under the portfolio against valid Work Order/SupplyOrders payment against which shall be duly assigned favoring the bank by the workawarding office/ agency. The portfolio in nature shall be of a Loan type and notcontinuous. The WO shall be construed as Primary Security in this regard. However, as thenature of facility carries inherent risk, NCCBL shall prefer Collateral Securities whileconsidering facilities under the head.

(B) Term Loan(i) Project Loan(ii) House Building Loan(iii) Packing Credit(iv) LIM (Loan against Imported merchandise)


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(v) LTR (Loan against Trust Receipt)(vi) Transport Loan(vii) Lease Finance(viii) PAD (Payment against Documents)

(I) Project Loan: NCCBL shall allow Loans for longer duration to enable its investment tobe returned by way of repayment after detailed assessment and feasibility study as per itsguideline for entrepreneurs and investors willing to come to an arrangement in setting upindustries and different production unit complying to rules and regulations of governmentsInvestment & industrial policy. As investment shall be for longer duration and fraught withunforeseen risks, bank shall obviously seek adequate eligible securities to cover itself.Acceptance of such securities shall be as per laid down principles of the bank andBangladesh Bank guidelines in this regard.

(ii) House Building Loan: Bank shall allow credit facilities under such portfolio strictly asper PPG within the Prudential Regulations of Bangladesh Bank for Consumer Financing.

(iii) Packing Credit: This facility also relates to financing at Pre shipment stage. NCCBLshall consider such facility under defined guidelines against export of various commodities.

(iv) Loan against Imported Merchandise (LIM): Loan against the security of merchandiseimported through bank shall be allowed against Pledge of goods. The procedure andconditions for allowing such facility under prior arrangement or forced circumstances shallbe strictly as per related guideline of the bank. Due to inherent complexities, the portfolioshould be discouraged.

(v) Loan Against Trust Receipt (LTR): Bank shall be selective in extending the facility butshall prefer due to comfort in binding the customer legally. Generally such facility shall beagainst arrangement and preferable against collateral security favoring the Bank.

(vi) Transport Loan: NCCBL may extend Transport Loan on close scrutiny of the purpose,Feasibility, experience of the borrower, credit/trust worthiness and above all security aspectas per its guidelines in this regard.

(vii) Lease Finance: An entrepreneur, under this scheme may avail of lease facilities toprocure industrial machinery and equipments, Vehicles etc. (without having to purchase itby down payment) with easy repayment schedule on case to case basis. Rate of interestunder this Scheme is 16% P.A.

(viii) Payment against Documents (PAD): This facility originates against payment ofImport Bills on lodgment of CLEAN shipping documents received from ForeignCorrespondent against Letter of Credit opened on behalf of the customers.

(ix) IBP & FBP (Inland &Foreign Bills Purchased): The facility relates to extension ofcredit at the post Shipment stage. NCCBL shall consider facility under the portfolio torelieve the exporter strictly on complying standing conditions attached to it.


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4.1.2. NCC Banks Special Credit: Its based on the common credit requirement of thesociety. Besides, these products have expandedthe Bank with diversified source of income. These are:

(a) Small Business Loan(b) Personal Loan(c) House Renovation Loan(d) Consumer Finance(e) Festival Business Loan.(f) Festival Personal Loan.(g) NCC Bank Housing Loan Scheme.

(e) Festival Business Loan: The scheme designed to help the genuine businessmen to meetthe extra finance required during festivals like, Eids, Puja. Disbursement of this loan ismade in recycling order which is to be stopped 15 days before the festival day. Maximum

Tk.10.00 lac is allowable under this Scheme @ 16% interest P.A. at quarterly rest.Application fee is Tk.500

(f)Festival Personal Loan: The scheme formulated to meet emergency financial expenses ofthe service holders at the time of festivals like Eids. Puja. Any salaried employee agedbetween 20- 50 years and working in Govt. Semi - Govt. Autonomous organization,corporate bodies, Insurance Co., etc. are eligible to avail of this loan. The disbursement ofthis loan starts before 1 month of festival and continues till festival. Borrower may beallowed to avail of maximum Tk. 15,000/- only for minimum 6 months but not more than15 months @ 16% interest P. A. at quarterly rest. Application fee is Tk. 100/-.

(g) NCC Bank Housing Loan Scheme: In order to enable the service holders/ professionals/ businessmen in purchasing Flat/House, Construction of Building and renovation,the Bank launched Housing Loan Scheme from September 2004. The tenure of the loan ismaximum 12 years and maximum amount of loan is tk.50.00 lac with interest @ 16% P.A.

4.1.3. Modes of Credit:(a) Term Wise Classification:ii) Short term (=1 year to 5 years)ii) Long term (> 5 years)

(b) Nature Wise Classification:i) Loan: fixed in nature, for a particular term or time.ii) Advances: continuous in nature with no fixed repayment schedule but an expirydate, for example: Cash Credit (hypo), Overdraft etc.

(c). Purpose Wise Classification:i).Working Capital: For manufacturing units to meet their short-term obligation

and day-to-day expenditure.


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ii)Fixed Asset Finance: For acquisition of long-term capital assets.

(d). Sector Wise Classification:Commercial Lending: for commercial requirements except export. It is for short andmedium from of loan. Example: LIM, LTR, PAD, SOD, Cash Credit, Loan General.

i. Industrial Credit:ii. Agricultural Creditiii. Transport Creditiv. House Building Loan

(e) Classification based on Fund Involvement:i.Fund Facilities: direct money involvementii. Non-Funded Facilities: where fund is not extended directly.Example: Letter of Credit, Letter of guarantee, Bank Guarantee etc

(1) Types of Credit in Foreign Trade:i. Loan against Imported Merchandise (LIM)ii. Payment against Imported Documents (PAD)iii. Packing Credit (PC)iv. Loan against Trust Receipt (LTR)v. Back to Back Letter of Credit.

The Bank has made remarkable achievement in recovery of non-performing and classifiedloans advances during the period under review, As a result, Banks ratio of classified loansto total loans on December 31, 2006 has come down to 5.62 percent, from 5.66 percent ofthe previous year. This achievement was possible due to continuous monitoring, follow-upand negotiation with the clients.

4.1.4 Lending Authority:The lending officers are broadly categorized as follows-

Managing directorEputy Managing directorExecutive vice presidentSenior vice presidentVice presidentSenior assistant vice presidentAssistant vice president

4.1.5 Sanction of Credit:When a Branch Manager writes a letter to accepting all terms and conditions of loan, it iscalled loan sanction. After the completion of all the formalities of financing a loanproposal, an advising letter is sent to the customer for the credit facilities along with allterms and conditions.The conditions, which are included in the loan sanctions, are given bellow:

a) Limit


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b) Primary Securitiesc) Collateral Securitiesd) The Rate of Intereste) Expiry Date 0 Repayment

5.1. Foreign Exchange:-Foreign Exchange is a process which is converted one national currency into another andtransferred money from one country to other countries. Foreign exchange is the rate ofexchange in the both countrys currency.

In NCCBL, the Foreign Exchange Department has two sectionsImport section

Export section5.1.1 Import Section:Import of merchandise involves two things: bringing of goods physically into the countryand remittance of foreign exchange towards the cost of the merchandise and services

connected with its dispatch to the importer.Import ProcedureProcedure for obtaining IRC (Import Registration Certificate)Submission of LCA (Letter of Credit Authorization) Form:LCA forms distribution:Opening LC:Examination of import documentsDocuments sent to the foreign exporterPayments against documents of release order from the bankReceiving the documents

5.1.1.1 Post Import Finance:Letter of Trust Receipt (LTR): Letter of Trust Receipt occurs when an importer fills up theLTR form and applies for it LTR is permissible only if the importer is a reputed, trustworthy and having done business with the particular bank for a long time. LTR creates anoption for the importer to pay due by future installment.

Loan against Imported Merchandise (LIM): Loan facility up to a satisfactory limit to thetraders customers by the bank against security of the value of the given only to the selectivecustomers who have been doing business with the bank for a long time.

Payment against Documents (PAD): After receiving the documents sent by the foreignexporter which include bill of exchange, shipping documents etc. the importer pays thedues against the documents received by the bank and latter on releases the merchandisesfrom the port. So, after due payments, which include commissions, product price, chargesfor SWIFT, and miscellaneous, the party is eligible to take the release documents from thebank on this payment is called PAD.5.1.2 Export Section: The import and export trade of Bangladesh is controlled under theImport and Export Control Act, 1950. No person who has been granted registration by theChief Controller of Imports and Exports shall indent, import or export any goods into or


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out of Bangladesh except in cases of exemption issued by the government.. The registrationnumber should be quoted on the relative export forms. There are a number of formalities,which an exporter has to fulfill before and after shipments of goods. These formalities orprocedures are enumerated as follows:

The Registration of Exporters

Preparations of the Export DocumentsDispatch of GoodsSend Shipping AdviceNegotiation of DocumentsRealization of Export ProceedsGet the name of the Importer/Buyer:Price/Quotations:Communicate the Acceptance:Obtain Export Code Number:

Keep the goods ready for dispatch:

Inspection of GoodsGetting Shipping Space Get in touch with the Port Authorities are required to be forwardedto the opening banker along with the bill, the credit is called a documentary credit.

5.2. Function of Foreign ExchangeThe Bank actions as a media for the system of foreign exchange policy. For this reason, theemployee who is related of the bank to foreign exchange, especially foreign businessshould have knowledge of these following functions.

i) Rate of exchange.ii) How the rate of exchange works.iii) Forward and spot rate.iv) Methods of quoting exchange rate.v) Premium and discount.vi) Risk of exchange rate.vii) Causes of exchange rate.viii) Exchange control.ix) Convertibility.x) Intervention money.xi) Foreign exchange transaction.xii) Foreign exchange trading.xiii) Export and import letter of credit.xiv) Non-commercial letter of trade.xv) Financing of foreign trade.xvii) Nature and function of foreign exchange market.xviii) Rules and Regulation used in foreign trade.xix) Exchange Airtime

5.3. About of L/C


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On behalf of the importer if the bank undertakes to make payment to the foreign bank isknown as documentary credit or letter of credit. The letter of credit is issued againstpayment of amount by the importer or against satisfactory security.

5.3.1. Application for Opening L/C: At first, an importer will request bankerto open L/C

along with the following documents:1. Indent or Proforma Invoice2. Import Registration Certificate (IRC)3. Taxpayer Identification Number (TIN)4. Insurance cover note with money receipt5. A bank account.6. Membership of chamber of commerce

5.3.2. L/C Application: NCCBL provides a painted form for opening of L/C to theimporter.The importer gives the following information is that form:Full name & address of importer.

Date & place of expiry of the credit.The mode of transmission of document (courier/mail/telex)Whether the confirmation of the credit is requested by the beneficiary or not.Whether the partial shipment is allowed or not.

The type of loading (loading on boarding).Brief description of the goods to be imported.Availability of the credit by sight payment acceptance /deferred payment.Within she specific time duration *the document should be presented.Sales terms (FOB/CIF/C & F).Account number.L/C amount.Shipping mark.H.S. code number of the goods to be imported.IRC number.

LCA numberInsurance cover note.Country of origin.

The above information is given along with the following documents:Proforma Invoice, which gives description of the goods including quantity, Unit price.Four set of IMP form.The insurance cover note, issuing company & the insurance number.

5.3.3. Importers Application for L/C Limit/Margin: To have an import L/C limit, animporter submits an application to NCCBL. In that application he/she gives full detail ofthe following:

Full particulars bank accounts. Nature of business. Required amount of limit. Payments terms & condition Goods to be imported


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Offered security Repayments schedule

5.3.4. LC Margin: LC margin is the amount of down payment or deposit to open the LC.This is a sort of security for the LC purpose. Usually the margin varies from importer to

importer. Generally a regular importer enjoys a lower margin facility from 10%-20% andfor a new customer of the bank the margin may be 80%-100%.Charges: Handling charge per document Tk.1000Accepted Commission:Duration Commission90 Days (1st Quarter) 0.60%120 Days (2nd Quarter) 0.90%180 Days (3rd Quarter) 1.20%Postage charge- Tk.200Stamp charge-Tk. 150SWIFT charge-Tk.3 500 per document

5.3.5. Transmission of L/C:The ways of transmission of L/C are as follows:i) Through SWIFTii) Through Telexiii) Through DHL or FEDEXiv) Through Emergency Mail Service (EMS

5.4. Back to Back or Countervailing Credit:The beneficiary of a documentary credit may, for the purpose of fulfilling his obligationunder the credit, open a counter credit in favour of another party to ship the goods of hispurchaser (importer). This is known as Back to back credit and is issued conditional termsexcept prices and invoices. The difference in the prices goes to the benefit of the originalbeneficiary.

5.5. SWIFT: NCC Bank is a member of society for inters bank financialtelecommunication. Worldwide. It ensures secure messaging having a global reach of 6495Banks and Financial Institutions in 178 countries, 24 hours a day. SWIFT global networkcarries an average 4 million message daily and estimated average value of paymentmessages is USD 2 trillion. SWIFT is highly secured messaging network enables Banks tosend and receive fund transfer, L/C related and other free format messages to and from anybank active in he network. Having SWIFT facility, Bank will be able to serve its customersmore profitable by providing L/C, payment and other messages.

5.6. Form of Letter Of CreditA letter of credit (L/C) may be two forms. These as below:

i) Revocable letter of credit.ii) Irrevocable letter of credit.

(i) Revocable L/C: If any letter of credit can be amendment or change of any clause orcanceled by consent of the exporter and importer is known as revocable letter of credit. A


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revocable letter of credit can be amended or canceled by the issuing bank at any timewithout prior notice to the beneficiary. It does not constitute a legally binding undertakingby the bank to make payment. Revocation is possible only until the documents have beenhonored by the issuing bank or its correspondent. Thus a revocable credit does not usuallyprovide adequate security for the beneficiary.

(ii) Irrevocable L/C: If any letter of credit cannot be changed or amendment without theconsent of the importer and exporter is known as irrevocable letter of credit.Irrevocablecredit constitutions a firm undertaking by the issuing bank to make payment. It therefore,gives the beneficiary a high degree of assurance that he will paid these goods or servicesprovide he complies with terms of the credit.

5.7. Parties to a Letter Of Credit:A letter of credit is issued by a bank at the request of an importer in favor of an exporterfrom whom he has contracted to purchases some commodity or commodities. Theimporter, the exporter and the issuing bank are parties to the letter of credit. There are

however, one or more than one banks that are involved in various capacities and at variousstages to play an important role in the total operation of the credit.a) The opening Bank.b) The Advising Bank.c) The Buyer and the Beneficiary.d) The paying Bank.e) The negotiating Bank.f) The confirming Bank.

(a) The opening Bank: The opening Bank is one that issues the letter Of credit at therequest of the buyer. By issuing a letter of credit it takes upon itself the liability to paythebills drawn under the credit. If the drafts are negotiated by another bank, the opening Bankreimburses that Bank. As soon as the opening Bank, issuing a letter of credit (L/C), itexpress its undertaking to pay the bill or bills as and when they are drawn by thebeneficiary under the credit. When the bills are presented to or when antic is received thatbills have been presented to a paying or negotiating Banks its liability matures.

(b) The Advising Bank: The letter is sent to the bank by mail or telex and forwarded by itto the exporter. The bank providing this service is known as the advising bank. Theadvising bank undertakes the responsibility of prompt advice of credit to the beneficiaryand has to be careful in communicating all its details.

(c) The Buyer and the Beneficiary: The importer at whose request a letter of credit is issuedis known as the buyer. On the strength of the contract that he makes with the exporter forthe purchase of some goods that the letter of credit is opened by the opening bank. Theexporter in whose favor the credit is opened and to whom the letter of credit is addressed isknown as the beneficiary.

d) The paying Bank: The paying bank only pays the drafts drawn under the credit but undertakes no opening bank, by debating the latters accounts with it if there is such an accountor by any other measured up, between the two bankers.


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e) Negotiating bank: The negotiating bank has to be careful in scrutinize that the drafts andthe documents attached there to be in conformity with the condition laid down in the L/C.Any discrepancy may result in refused on the part of the opening bank to honor theinstruments is such an eventuality the negotiating bank has to look back to the beneficiary

for refund of the amounts paid to him.

f) The Confirming Bank: Sometimes an exporter stipulates that a L/C issued in his favor beconfirm by a bank in his own country. The opening this country to add its confirming to thecredit the bank confirming the credit is known as the conforming bank and the credit isknown as confirmed credit.

5.8. Documentary Letter Of Credit (Import/Export Documentation):Documentary letter of credit is such kinds of commercial letter which a bank issue onbehalf of foreign seller (exporter) according to the direction of the (importers) purchasers.The documents shown under are known as export documents form the importers side.

These are:

(i) Bill of exchange: The bill of exchange is that particular instrument through whichpayment is effected in trade deals internal and international.

(ii) Bill of lading: A bill lading is a document of title to goods entitling the holder toreceive the goods as beneficiary or endorsee and it is with the help of this document onreceipt from the exporter that the importer takes possession of the goods . from the carryingvessel at the port of destination.(iii) Airway bill I Railway receipt: When goods to be transported are small in bulk orrequiring speedy delivery or those are perishable in nature on the deal is in between theneighboring countries then mode of transports other than shipping may be resorted to farthe carriage of the goods Airways bill / Railway receipt take place of Bill ~of ladingdepending on the nature of the carrier.

(iv) Proforma invoice: It is the sellers bill for the merchandise. It contains a description ofgoods, the price per unit at a particular location, total value of the goods, packingspecifications, terms of sale, letter of credit, bill of lading number etc. There is no standardform far a commercial invoice. Each exporter designs his own commercial invoice form.The invoice is made out by the seller under his signature in the name of the buyer and mustbe submitted in a set of at least 3 copies. Its main purpose is to check whether theappropriate goods have been shipped and also that their unit price, total value, marking onthe package etc. are consistent with those given in other documents.

(v) Insurance policy: In the international trade insurance policy is a must to cover the riskof loss on consignments while they are on seas, roads, and airways. The insurance is theresponsibility of the buyers (consignee) under FAS, FOB and C&F contracts and of theseller (consignor) under CIF contract. The policy must be of the type as specified in therelative contract / credit. The policy would be for the value of CIF price plus 10 (ten)percent to cover the expenses and that is required to be obtained in the same currency as


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that of the credit and dated not later than the date of shipment with claims* being payableat the destination. It must be properly stamped. Like a bill lading it must be negotiable andbe endorsed where it is payable to order.

(vi) Certificate of origin: This is a certificate issued by a recognized authority in exporting

country certifying the country of origin of the goods. It is usually by the Chambers ofcommerce. Sometimes, it is certified by local consul or Trade Representative of theimporting country as per terms of the credit.

vii) Packing list: The exporter must prepare an accurate packing list showing item by item,the contents of the consignment to enable the receiver of the shipment to check the contentsof the goods, number and marks of the package, quality, per package net weight, grossweight measurement etc.

(viii) Weightiest and Measurement: Issued by recognized authority (like chambers ofcommerce and industry) in exporting country certifying correct weightiest and

measurement of the goods exported.

(ix) Bill of entry: A bill of entry is a document which contains the particulars of theimported goods as well as the amount of customs duty payable. The negotiating bank afterreceived the above documents / papers then this bank scrutiny the documents. Thenegotiating bank sends the original shipping documents to the L/C opening bank andkeeping the second copy with the negotiating bank

5.9. Payment against Documents (PAD) Banks deal in documents and not in goods. If theshipping document against the L/C is in order then the L/C opening bank must have topayment to the foreign bank within 3 days according as Uniform Customs and Practice forDocumentary Credit (UCPDC) 500 of revision of ICC.If the shipping documents have anydiscrepancy, then the L/C opening bank informed to the negotiating bank within 7 days.Otherwise, the shipping documents have not discrepancy. If the importer have not adequatefounds in the bank account then the bank payment to the foreign bank against the shippingdocuments

5.10: Payment Procedure of Import Documents: Payment procedures of NCCBL involvethe following tasks:(a) Date of Payment: Usually payment is made within seven days after the documents havebeen received. If the payment is deferred, the negotiating bank may claim interest formaking delay.

(b) Preparing Sale Memo: As sale memo is made at B.C. rate to the customer. As the T.T &0. D rate is paid to the ID, the difference between these two rates is known as ExchangeTrading. Then an Inter Branch Exchange Trading Credit advice is sent to Inter ID.Requisition for the foreign currency For arranging necessary fund for payment, arequisition is sent to the ID.Transmission of telex: A telex is transmitted to the correspondent bank ensuring thatpayment is being made.


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| 2005 | 2006 | 2007 | 2008 | 2009 |Authorized Capital | 2,500.00 | 2,500.00 | 2,500.00 | 2,500.00 |

5,000.00 |Paid up Capital | 975.04 | 1,201.79 | 1,352.01 | 1,757.62 |

2,284.90 |Reserve fund and other Reserve | 884.90 | 1,215.58 | 1,995.36 |2,863.63 | 4,371.62 |Equity fund | 1,859.94 | 2,417.37 | 3,326.52 | 4,621.25 | 6,656.52

|Deposits | 21,478.22 | 28,147.34 | 34,901.77 | 46,904.66 | 53,900.15

|Loans and Advances | 20,533.13 | 24,678.36 | 32,687.75 | 46,332.69 |

50,387.68 |Investment | 3,010.45 | 3,552.08 | 6,266.62 | 6,526.82 | 9,671.53

|

Import Business | 16,296.30 | 17,646.80 | 28,779.21 | 38,796.88 |33,078.44 |Export Business | 7,776.30 | 8,557.00 | 9,577.92 | 12,522.04 |

11,903.72 |Operating Income | 2,932.00 | 3,913.19 | 5,269.03 | 7,417.64 |

9,333.03 |Operating Expenses | 1,913.66 | 2,645.62 | 3,488.78 | 5,054.15 |

6,195.33 |Operating Profit | 1,018.34 | 1,267.57 | 1,780.25 | 2,363.49 |

3,137.70 |Profit before Tax | 687.60 | 1,056.51 | 1,356.32 | 1,788.96 |

2,686.49 |Profit after Tax | 352.08 | 479.22 | 677.18 | 882.28 |

1,719.50 |Retained Profit | 10.31 | 7.83 | 8.13 | 5.34 | 46.47 |Total Assets (excluding contra) | 26,114.13 | 32,615.01 | 42,522.85 |

57,365.52 | 65,937.49 |Fixed Assets | 308.14 | 353.71 | 522.00 | 775.31 | 849.10

|Number of Branches | 41 | 48 | 53 | 57 | 65 |Number of Employees | 1,000 | 1,118 | 1,230 | 1,400 | 1,496 |Earnings per Share | 36.11 | 39.88 | 50.09 | 50.20 | 75.26 |Dividend: Cash (%) | 10.00 | 10.00 | - | - | - |Bonus (%) | 10.00 | 12.50 | 30.00 | 30.00 | 47.00 |Return on Equity (ROE) (%) | 18.93 | 19.82 | 20.23 | 21.76 | 28.49 |Return on Assets (ROA) (%) | 1.35 | 1.63 | 1.59 | 1.54 | 2.61 |Capital Adequacy Ratio | 9.02 | 9.78 | 10.61 | 10.61 | 13.55 |Nonperforming Loans as % of Total Advances | 4.82 | 4.95 | 4.17 | 4.14 | 2.84

|


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Volume of Non-performing Loans | 981.54 | 1,212.26 | 1,353.31 |1,902.58 | 1,420.57 |Amount of provision against Classified Loans | 405.75 | 523.58 |

644.11 | 912.90 | 720.22 |Amount of provision against Unclassified Loans | 202.14 | 282.09 |

388.78 | 456.07 | 509.67 |Amount of provision against Off-balance sheet exposures | - | - | 51.69 |109.41 | 111.93 |Advance/Deposit Ratio (%) | 95.60% | 87.68% | 93.66% | 98.78%

| 93.48% |

NCCBL is the well reputed and established bank in the private sector. All the branches arecomputerized and people are getting quick benefit from the bank.

6.1 Deposits (2005-2009):From the figure it is seen that the growth has been steady enough. During the year

2009total advances stood at Tk. 53,900.15million and comparing to the advances, theadvance-deposit ratio was 93.48% in the year 2009.6.2 Investment: investment figure of the bank as on 3 Pt December, 2006 stood at Tk.9,671.53 million as against Tk. 6,526.82 million of the previous year-increase being18%.Considering the good rate of return, the bank emphasized on making investment Govt.Treasury bill with a view to utilizing its liquid fund on temporary basis so that the same canbe liquidate to meet urgent requirements.

SWOT Analysis of NCC Bank Limited* Strengths:

* Return on Asset is higher than the Banks total performance and showing increasingtrend.

* Credit / Deposit Ratio is 93.48%, which higher than the overall bank position.* Per employee deposit and profit is higher than the total bank performance.* Employee expense is lower compare to the total Bank ratio of employee expense to

total expense.* The branch has achieved all the targets set by head office.

* Weaknesses:* Cost of deposit is higher than the overall bank deposit rate.* Return on Advance is lower than the total Bank position and showing a decreasing

trend.* Classified advance is 3.49% of total advance of the branch, which is higher that the

overall Bank Position by 1.74 %* Opportunity:

* Large Network coverage of NCCBL across the country is an opportunity for growthin Market.

* Large number of customers deprived of banking services specially in the rural areaswho can be easily attracted

* Well reputation and strong financial Muscle due to strong back up from otherbranches.


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* Threats:* Highly competitive Financial market* Aggressive advertising and superior product offerings by other competitors.Pressure by

other Foreign Commercial Banks

8,1 Conclusion:Modem Commercial Banking is exacting business. The reward are modest, the penaltiesfor bad looking are enormous. And Commercial banks are great monetary institutions,important to the general welfare of the economy more than any other financial institution.It has a vastly sobering and exacting responsibility.

National Credit and Commerce Bank Limited (NCCBL) playing a vital role in financingimport and exports of the country. Without Banks co-operation, it is not possible to runany business or production activity in this age. Exports and import need finance in variousstages of their activities. Export and import financing are letter of credit (L/C), paymentagainst documents (PAD), loan against imported merchandise (LIM) etc. All these

facilities are provided by NCCBL. For this purpose Banks consider the borrowersbusiness standing, integrity, liability with the bank term and conditions of the L/C. There islot of risks involved in foreign business. So, the National Credit and commerce BankLimited (NCCBL) has to clearly justify the customers from a neutral point and gather thecurrent information about the market.

I have worked only in the Elephant Road branch. So I am not able to know about headoffice activities regarding credit and others. Branch officers have to work within limitedboundaries and time to time they have to take permission from the head office. Takingpermission from the head office is time consuming.

From my observation I have found that peoples are interested about that job which givesthem more salary and other facilities. NCC bank should give its employees more salaries,job security and others facilities to hold its existing expert and trained officers.

8.2 Recommendation:

As the study was done in the specific area, so recommendations have been covered inrespect of those areas. NCC Bank authority among which most of them has beenmentioned as suggestion to improve service quality. For the improvement of the service thefollowing measures should be taken:

Customers Convenience: For customers convenience, NCC Bank should provide morepersonnel to deliver faster services to their honorable customer.

Human Development: Development of human resources should be ensured to increaseefficiency in work.

Communication System: Ensure proper communication system and maintenance of file &machineries like phone, computer, fax, and photocopier.


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Interest: More interest should be paid on deposit account so that customers are convincedto deposit their money in bank.

Margin Rate: To decrease margin rate for all clients. This is very risk for the Bank but if

the Bank wants to target many clients, this is very important

Computerization: To ensure error free fast task bank should be fully computerized.

R & D: Research & Development wing must be more extensive & rich.

Strategy: Effective strategies must be undertaken against defaulter.

Project Management: Project Management must be practiced in case of investing in theproject. Feasibility of the project, project planning, monitoring & evaluation should beundertaken.

Managerial Function: NCC Bank must have to follow the management functions (fromplanning & controlling) strictly in all of their business activities.

Financial Analysis: Branch should have a separate section to analyze the financialstatement for fining its profitability & ownership ratios.

Image: Office should be fully decorated to attract people to come into it.

8.3 BibliographyBooks & journals

* Aktaruzzaman, M.S Barua & M.A. Majumder, determinants of workers remittances inBangladesh: an imperial study, working paper series 0713, policy analysis unit,Bangladesh bank.

* Haque, F, General overview of inflow of remittance in Bangladesh economy.* Rahman, M.H. & S.Barua, Recent experiences in the foreign exchange and money

markets, policy note series PN 0703, policy analysis unit, Bangladesh bank.* M.H & .Younus Rahman,, forecasting some key macro economic variables in

Bangladesh, policy analysis unit, Bangladesh bank: working paper series.* Financial sector review, volume 3, number 2, June 2009, Bangladesh bank.* Annual financial report of NCC Bank Limited, Bangladesh.

Websites:

* www.bangladesh-bank.org* www.nccbl.com.bd* www.adb.org* www.undp.org* www.en.wikipidea.org

Amdad NCCB Report

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