Foreign Exchange Activities of SIBL
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Transcript of Foreign Exchange Activities of SIBL
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PREPARED FOR: Taslima Akter, Lecturer, School of Business, Stamford University- Bangladesh,
PREPARED BY: Md. Akhlakuzzaman ID: B.B.A 3rd Batch B.B.A (Marketing)
January 27, 2007
Taslima Akter,
Lecturer,
School of Business,
Stamford University- Bangladesh,
Re: Submission of internship report on “Enhance banking efficiency by
the foreign exchange activities - The case of Social Investment Bank Ltd.”
Dear Sir,
With due respect, I would like to inform you that I am delighted to present my
internship report on “Enhance banking efficiency by the foreign exchange
activities - The case of Social Investment Bank Ltd.” as a partial requirement of
the course “ORE-102 Professional Orientation”. I employed my best effort for
preparing this report paper.
This report gives me an exceptional experience that will be useful in the future.
I sincerely hope this report will be up to your expectations.
Your kind acceptance and any type of appreciation would surely inspire me. I
will be always available for any supplementary interpretation or clarification if
required.
Sincerely Yours
________________
(Razib Hossain)
Table of Content
Preface i
Acknowledgement ii
Executive summary iii
Part-A
1.0 Introduction 1
1.1 Abstract 2
1.2 Rational of the study 3
1.3 Scope of the study 3
1.4 Objective of the study 4
1.5 Methodology 4
1.6. Research design for questionnaire survey 5
1.6.1 Design Strategy 5
1.6.2 Data Collection Design 5
1.6.3 Sampling Design 5
1.6.4 Software used 6
1.7 Sources of data 6
1.8 Limitations of the study 7
Part-B
2.0 Organization 8
2.1 Introduction 9
2.2 Historical background of SIBL 10
2.3 Objectives & goals of SIBL 11
2.4 Functions of SIBL 12
2.5 Business philosophy of SIBL 12
2.6 Board of directors 13
2.7 The ownership pattern 13
2.8 Human resource 14
2.9 Training institute 14
2.10 Foreign correspondents of SIBL 15
2.11 Overseas operations of SIBL 15
2.12 Some products & services 15
2.13 Rural credit program 16
2.14 Performance of SIBL by the social services 16
2.15 Five years performance at a glance 17
2.16 Balance sheet as on 31th December, 2003 18
Part-C
3.0 Branch operation 21
3.1 General banking 22
3.1.1 Account Opening & Clearing 22
3.1.1.1 Types of Account 22
3.1.1.2 Procedure & rules to open a new account 25
3.1.1.3 Clearing the cheque: 29
3.1.2 Local Remittance 32
3.1.2.1 Telegraph Transfer (TT) 32
3.1.2.2 Pay order 34
3.1.2.3 Pay slip 35
3.1.2.4 Demand Draft 35
3.1.3 Deposit 37
3.1.4 Accounts Department 37
3.1.5 Advance 38
3.1.5.1 Allow Loan For Under These Purpose 38
3.1.5.2 Documents to be obtain 39
3.1.5.3 Definition and Explanation of Credit Facilities 39
3.1.5.4 Principles of loan classification and provisioning 42
3.1.5.5 National Housing 43
3.1.5.6 Equity 44
3.1.5.7 Consumer Credit Scheme 44
3.1.6 Cash 45
3.2 Foreign Exchange Banking 46
3.2.1 Foreign Exchange 46
3.2.1.1 Foreign Trade 46
3.2.1.2 Need for Foreign Trade 46
3.2.1.3 Types of foreign trades dealt in banks 47
3.2.1.4 Import 48
3.2.1.5 Export 53
3.2.1.6 Export finance of BTB L/C 58
3.2.1.7 Documents used in foreign trade retailing to bills 61
3.2.1.8 Financial assistance provided by the banks 71
3.2.2 Foreign Remittance 72
3.2.2.1 Western Union 72
3.2.2.2 Traveler’s Cheque 72
3.2.2.3 Endorsement of cash 74
3.2.2.4 Credit Card 74
3.2.2.5 Issue FDD 74
3.2.2.6 Foreign currency account 75
3.2.2.7 Telegraphic Transfer (TT) 76
Part -D
4.0 Customer satisfaction 77
4.1 Need to Satisfy Customers of SIBL 78
4.2 Identifying Customers Need of SIBL 79
4.3 SIBL Should Provide Quality as the core service 79
4.4 Keep Relationship with customers of SIBL 79
4.5 To Satisfy Customers of SIBL 80
Part-E
5.0 Job satisfaction 81
5.1 The importance of job satisfaction to satisfy employee of SIBL 82
5.2 Need to follow Herzberg’s dimensions to satisfy employee of SIBL 83
5.2.1 Company and administrative policies 84
5.2.2 Supervision 84
5.2.3 Salary 84
5.2.4 Interpersonal relations 85
5.2.5 Working conditions 85
5.2.6 Work itself 85
5.2.7 Achievement 86
5.2.8 Recognition 86
5.2.9 Responsibility 86
5.2.10 Advancement 86
5.3 Six factors that can influence job satisfaction of NBL 87
5.3.1 Opportunity 87
5.3.2 Stress 88
5.3.3 Leadership 88
5.4.4 Work standards 89
5.4.5 Fair Reward 89
5.4.6 Adequate authority 89
Part-F
6.0 Online banking 90
6.1 What is online banking? 91
6.2 Origin of online banking 91
6.3 Brick-to-click banks 92
6.4 Virtual banks 92
6.5 SIBL will get advantage from online banking 93
6.6 Feature that can be give in SIBL’s Online Banking 93
Part-G
7.0 SWOT analysis of SIBL 94
7.1 Strength 94
7.2 Weakness 94
7.3 Opportunity 94
7.4 Threat 94
8.0 Findings 95
8.1 Findings From customer satisfaction questionnaire 96
8.2 Findings from job satisfaction questionnaire 99
9.0 Recommendation 102
10.0 Conclusion 104
11.0 Appendices 105
12.0 Bibliography 112
PREFACE
It is needless to say that theoretical knowledge is most pertinent matter for not only a
student but also everybody. It may be help a man to cope up with all spheres. In spite of
practical knowledge has no alternative especially for a MBA Student who will contribute
to the national economy by rendering service in different sectors of the country. We have
now entered a new century, like globalization. The over all banking system in
Bangladesh has been undergoing a period of reaper change and transformation. Stunned
fluctuations of foreign currencies, constantly changing government regulations and socio-
political condition have made banking sectors difficult. Success now Reuters integration
of corporate suction at a global level and rigorous standards for quality, cost control and
promise. Analytical strength and functional knowledge are no longer sufficient
understanding is needed of the political economic and cultural characteristics of the
country as a whole. One must be familiar with advanced information technologies. One
must break away from narrow functional views of jobs and organizations and apply as
functional knowledge and integrated problem solving skills. Keeping in view the above
noted key points I made in this paper and attempt to measure the condition of Social
Investment Bank Limited (SIBL) as a Commercial Bank.
Under the MBA program every student is assigned a topic and each student is tired to
prepare a report on the selected topic. In this respect I was assigned to study on
“Enhance banking efficiency by foreign exchange activities- the case of Social
Investment Bank Ltd."
.
I have tried my level best to cover all significant distensions of the analysis of the topic. I
think my efforts would be meaningful if this serves the purpose.
ACKNOWLEDGEMENT
At first I must express my sincere gratefulness and cordial respect to Taslima Akter,
Lecturer of School of Business, Stamford University Bangladesh for her valuable
advice, thoughtful comments, advice and in-depth perceptions.
I am really thankful to the management of Social Investment Bank Limited for giving
me a chance to coordinate my internship activities in their organization.
I can never forget the unbelievable cooperation of all the officers of Social Investment
Bank Limited, Foreign Exchange Branch. I think that it was impossible for me to know
and finally to make such a descriptive study and a presentable report on such a wide
aspect like banking with only three months without their extending of helping hands.
I would like to pay my greatest honor to Senior Vice President & Manager Mr.
Jalaluddin Ahamed, Senior Assistant Vice President Mr. Ohidur Rahman, Senior
Assistant Vice President Mr. Md. Jahangir Babul for supervise my internship. I would
like to give my heartiest thanks to Mr. Md. Ashraful Habib, Senior Executive Officer
and Mr. Md. Sanaullah, Senior Officer for serve me the valuable documents and papers,
which help me a lot to prepare the report.
EXECUTIVE SUMMARY
Banking sector plays a vital role in the economic development of every country. Bankers
are the custodian and distributors of liquid capital, which is the lifeblood of commercial
and industrial activities. Not only as the custodian of capital, banks also have a significant
contribution in capital formation. By encouraging savings and investment the banks
increase the productivity of resources of the country and thus contribute to general
prosperity.
With the global march in business and commerce we are rapidly pacing our standard of
living. Also it is true that if we do not keep pace with the ongoing world economic
revolution it would be very difficult for us to be developed. This is why we need to strive
for growth. We need to grow inside our country and then should try cross the national
boundary with the surplus or excess production for foreign currency.
For this government should encourage the entrepreneurs and all other industrialists to
produce exportable and quality products by providing necessarily financial assistance.
This increased foreign business actually fixes the index of our reserve. More imports to
export lowers the national reserve for currency and vice versa.
The Social Investment Bank Limited is a scheduled commercial bank registered under the
Bangladesh Bank and is doing all kinds of banking activities since the last two decades.
The bank covers a wide range of banking and functional activities to individuals, firms,
corporate bodies and other multinational agencies.
I have dared to prepare this report as an obligation to draw an end to my internship
activities. At the very beginning of my internship I talked to my supervisor in order to set
the track of my proceedings in the bank for the period. As per the suggestions of my
supervisor I decided to prepare my report on the “Enhance banking efficiency by foreign
exchange activities- the case of Social Investment Bank Ltd.”. To have brief knowledge
on the bank departments I worked for six weeks in both the General Banking and
Advance Department. For the rest six weeks I worked in the Foreign Exchange
Department.
For take the decision about the prospect of SIBL I will depend on the benefits provided to
customers by SIBL and the procedure to provide this benefits. To know about the
customers opinion and to take their suggestion I survey a questionnaire and also I survey
a questionnaire for take employee’s opinion and their suggestion about themselves.
Which benefits need to add to customers and procedure need to add or change I suggest
for that. As well as I suggest how to motivate the employees more.
While preparing this report I have devoted my utmost effort to give it a practical shape of
the bankers daily doings. For preparing this report actually I did not search for any
special data source. I tried always to reflect my gathered practical sense here.
1.1 ABSTRACT
Internship is an integral part of MBA (Masters of Business Administration) program in
Stamford University-Bangladesh and it contains 6 credits out of 54 credits. This
program is actually a juncture of academic and professional life dealings. It is for to get
some experience of practical work environment and also be familiar with that. It is like
job also.
For coordinating my internship I have placed in Social Investment Bank Limited,
Foreign Exchange, Branch Dhaka. There are 09 sections in Foreign Exchange branch.
They are 1) Clearing 2) Local remittance 3) Advance 4) Foreign remittance 5) Foreign
exchange 6) Cash 7) Deposit 8) Accounts 9) Dispatch. Accordingly I will work all of
the sections. I will devoted my utmost effort and attention to learn the banker’s
functions. After completion of the internship I will render my all knowledge to present
the report on “Enhance Banking Efficiency by the Foreign Exchange Activities - The
case of Social Investment Bank Ltd.”.
The report divided in to four parts. 1) Organizational part 2) Branch operation part 3)
Customer satisfaction part and 4) Employee satisfaction part. In the organizational part
I will incorporate a brief overview of the organizations background history, functions,
business philosophy, ownership pattern, foreign correspondents and overseas
operations and benefits provided to customers by the organization. Branch operation
part will describe the product and service provides to customers by a branch. Customer
satisfaction part will find out how can be satisfied the customers of SIBL as a service
oriented organization and job satisfaction part will find out how can be satisfied the
employees of SIBL as they are main character of bank.
1.2 RATIONALE OF THE STUDY
The economic development of our country mainly depend up the efficiency of the
banking system which can be judged from its working results is so far as, whether the
bankers have been able to read the economic situation properly and are successful in
selecting the promising industrial sectors. Our increased demand for updated
necessaries require importing merchandise from outside. Again whenever we strive
to grow, need to move with positive balance reserve upwards. This is possible if we
produce quality products and make them sale outside the country with strong
confidence. The government of our country and the central bank i.e., the Bangladesh
Bank has decided to extend considerable help in every respect to business people.
Like other nationalized and non-nationalized commercial banks the Social
Investment Bank Ltd. also provide services to the businessmen.
1.3 SCOPE OF THE STUDY
The field of my study is the operation of foreign exchange branch of Social
Investment Bank Limited. For conducting this study an overall knowledge of the total
banking system will necessary because the departments of banking are linked with
each other due to some partial proceedings. The scope of the organizational part
covers the organizational structure, background, objective, function,
departmentalization and business performance of Social Investment Bank limited as a
whole. The main part covers the operational scenario of a branch of Social Investment
Bank. This refers that how the bank help the customers in general banking and foreign
exchange banking. For customer satisfaction and employee satisfaction I have done
questionnaire survey. Based on questionnaire survey I will decided whether they are
satisfied or not and to satisfied them what can be do.
1.4 OBJECTIVE OF THE STUDY
The objective of the Internship is to expose the students in the organizational work
situation and this report is an end result of such organizational involvement. The primary
objective of this report is to explain the real life scenarios in the organizational working
environment. But the objective behind this study may something be broader. Thus the
objectives of the study are:
►To apply theoretical knowledge in the practical field.
►To find out facilities, that’s are provide by Social Investment Bank to its customers.
►How branch’s are provide that to customers
►The process of work of sections of a branch.
►To analyze the performance of Social Investment Bank.
►Whether customers are satisfied or not with present facilities and their expectations
from Social Investment Bank limited. How can be satisfied them.
►Whether employees are satisfied or not and expectations from Social Investment Bank
limited and how can be satisfied them.
►To have some practical exposures that will be helpful for future career growth.
1.5 METHODOLOGY
The twelve weeks internship program took to work in every department in order to
have an overview of the total banking. My organizational supervisor helped me a lot
while working in every department of the branch. Keeping this view in mind I will
write a descriptive report which will divided in four parts.
1. Organizational Part.
2. Branch operation.
3. Customer satisfaction Part
4. Employee Satisfaction Part
The organizational part of this report composed of benefits provided to customers by
the organization. The branch operation part is very brief functional orientation of the
various departments and sections of the bank. In the branch operation part a
description of various conceptual terms, conditions and process strictly related to
every section and its mechanism sketched and reflect a critical sequential and
procedural presentation of the “Enhance banking efficiency by foreign exchange
activities. Customer satisfaction part will find out whether the customers are satisfied
or not with SIBL’s benefits and working process and the employee satisfaction part
will find out whether employees are satisfied or not by doing job in SIBL.
1.6 RESEARCH DESIGN FOR QUESTIONNAIRE SURVEY
Design Strategy:Type: My research type is almost Explanatory.
Purpose: My purpose to introduce quality service.
Time frame: I am assigned of a three months (during internship period) to do the research work.
Scope: I select customer and employee of foreign exchange branch for my questionnaire survey.
Data Collection Design:I planned to go for both Primary Data and Secondary Data collection.
Sampling Design:
For the sampling design I choose non probability sampling for customer and probability
sampling for employee. Because I don’t know who will be my population in case of
customer, They can be any one, who have account in SIBL or any type of transaction in
SIBL and in case of employee I know who are the employee of foreign exchange branch.
We choose non-random for our judgment. In judgment sampling, personal knowledge
and opinion are used to identify the items from the people that are to be included in the
sample. A sample selected by judgment sampling is based on someone’s about the
people.
The basic idea of sampling is that by selecting some of the elements in a population, we
may draw conclusions about the entire population. A population element is the subject on
which the measurement is being taken. It is the unit of study. There are several reasons
for sampling, including i) Lower cost, ii) Greater accuracy of results, iii) Greater speed of
data collection.
Software used
For analyze the data from survey questionnaire I will use the SPSS software.
1.7 SOURCES OF DATA
For preparing this report data and information were needed and collected from both
primary and secondary sources.
Primary data and information were collected through:
i. Discussing with officials;
ii. Talking with clients;
iii. Personal observation & intelligence;
iv. Working with officials as a helping hand.
Secondary information were collected from the following Sources:
i. Files, records, journals, manuals and publications obtained from library of the
bank.
ii. Different circular issued by the head office and Bangladesh bank.
iii. Annual reports of bank.
iv. Official web site of the Social Investment Bank Ltd.
1.8 LIMITATIONS OF THE STUDY
It is obvious that every study has some limitations. The study I have made is of great
importance and require me huge work. While conducting I had to face a number of
problems. Those limiting factors that hampered my smooth workings in bank and
finally in preparing this report are as follows:
1. The organization maintains strict confidentiality about their financial and other
information. They are afraid of any type of information leakage to their
competitors. So there was always lack appropriate information.
2. Any type of such presentation requires a long time. But I did not have that much
busy time to concentrate on my work. Duration of this study was too short to have a
sound understanding of the overall banking.
3. Scope of my study is so wide that analytical and comprehensive study is not
possible.
4. Lack of sufficient books, papers and periodicals take me go on serious
brainstorming while preparing this report.
5. Some officials were not so much prepared for giving the data which can help to prepare this report.
6. All customers come to bank to do their work and they have time pressure to do that
work. So when I told them to fill the questionnaire, they reply with sorry to me. So I
don’t able to take large sample size to analyze my questionnaire.
7. The study was conducted only on the Foreign Exchange Branch, Motijheel; all
branches’ performance could not be evaluated for time constraints.
2.1 INTRODUCTION
Since the establishment Social Investment Bank Limited has come forward as a private
commercial bank and very encouragely has come forward as the stimulator of economic
activities in the country. The bank has been entrusted with the responsibility of
undertaking various steps related to the development of the country’s commercial,
industrial and agricultural sectors. The banking sector of a country is called the economic
barometer of the country. As a pioneer commercial bank in the private sector in
Bangladesh Social Investment Bank provides considerable financial helps in the business
sector that imports industrial goods and/or exports excess production outside the country
for profit. Thus for imports the Social Investment Bank provides LIM (Loan against
Import Merchandise) and LTR (Loan against Trust Receipt) facility and for exports
provides both pre shipment and post shipment finances. Thus with these bank helps the
prospects in the business sector has increased more than ever before. Competition has
also increased in the commercial arena and obviously it is a symbol economic uplift of
our country.
2.2 HISTORICAL BACKGROUND OF SIBL
Social investment Bank Limited (SIBL) is a banking company registered under the
companies Act 1994 with its head office 15 Dilkusha C/A, Dhaka-1000. The bank
operates as a scheduled bank under a banking license issued by the Bangladesh Bank,
Central Bank of the country. Bank started its operation from 22, November 1995. SIBL is
a capitalized new generating Bank with an authorized capital and paid up capital of Taka
585 million in 2005 and also. 585 million respectively as of December 2004.Currently
the bank has 24 branches of which 12 in Dhaka, 4 in Chittagong, 1 in Syihet, 2 in
Narayanganj, 1 in Sylhet, 1 in Bogra, 1 in Khulna, 1 in Rajsahi, 1 in Sirajgonj. More
branches are planning to be opened soon. The bank undertakes all types of banking
transaction to support the development of trade and commerce in the country. SIBL
services are also available for the entrepreneurs to set up new ventured and BMRE of
industrial units.
To provide clientele services in respect of international trade it has established wide
corresponded banking relationship with local and foreign banks covering major trade and
financial interest home and abroad.
SIBL understands all types of banking transactions to support the development of trade
and commerce of the country. SIBL’s services are also available for the entrepreneurs to
set up new ventures and BMRE of industrial units.
Since the very inception Social Investment Bank Ltd. is working with the philosophy of
serving the nationals as an ideal and unique financial house. Every organization has some
objectives of its own. The prime objective of Social Investment Bank Ltd. is to earn
profit throw undertaking the responsibility of providing financial help for the
development of the country’s commercial and industrial sector.
2.3 OBJECTIVES & GOALS OF SIBL
SIBL is always ready to maintain the highest quality of services by upgrading
banking technology prudence in management and by applying high standard of
business ethics through its established commitment and heritage.
SIBL is committed to ensure its contribution to national economy by
increasing its profitability through professional and disciplined growth strategy for its
customer and by creating corporate culture in international banking arena.
The objective of SIBL is not only to earn profit but also to keep the social
commitment and to ensure its co-operation to the person of all level, to the
businessman, industrialist-specially who are engaged in establishing large scale
industry by consortium and the agro-based export oriented medium & small scale
industries by self inspiration.
SIBL as the first and the largest private bank is committed to continue its
endeavor by rapidly increasing the investment of honorable share holders into assets.
SIBL believes in building up strong based capitalization of the country.
SIBL is committed to continue its activities in the new horizon of business
with a view to developing service oriented industry and culture of morality and its
maintenance in banking.
SIBL has been working from its very beginning to ensure the best use of its
creativity, well disciplined, well managed and perfect growth.
SIBL is always preoccupied to encourage the investors for purchasing its share
by creating the opportunity of long term investment and increasing the value of share
through prosperity as developed day by day.
SIBL is playing a vital role in Socio-economic development o Bangladesh by
way of linkage with rest of the world by developing worldwide network in domestic
and international operations.
MISSION OF SIBL
High quality financial services with the latest technology.
Fast, accurate and satisfactory customer service.
Balanced and sustainable growth strategy.
Optimum return on shareholders equity.
Introducing innovative Islamic banking products.
Attract and retain high quality human resource.
Empowering real poor families and create local income opportunities.
Providing support for social benefit organizations-by way of mobilizing
funds and social services.
VISSION OF SIBL
Social Investment Bank Ltd started its journey with the concept of 21st Century Islamic
participatory three sector banking model: i) Formal Sector- Commercial Banking with
latest technology; ii) Non-Formal Sector - Family Empowerment Micro-Credit & Micro-
enterprise program and iii) Voluntary Sector - Social Capital mobilization through CASH
WAQF and others. Finally, "Reduction of Poverty Level" is our Vision, which is a prime
object as stated in Memorandum of Association of the Bank with the commitment
"Working Together for a Caring Society".
2.4 FUCNTIONS OF SIBL
1. Mobilization of idle resources of the country by accepting Deposits from the general
public.
2. Granting of Loans and Advances to the individual firms and companies for activating
and developing trade, commerce and industries and other productive activities in the
country.
3. To give facilities to the client and shareholders in a systematic way.
4. To give opportunity of the people to do job in SIBL.
5. To give encourage to the people for savings.
6. To increase investment.
7. To make easy to transfer foreign currency.
8. To identify consumers demand and fulfill their demand by supplying money.
9. To improve economy by borrowing financial facility.
10. To assist capital market.
11. To assist social activities is another function of SIBL.
2.5 BUSINESS PHILOSOPHY OF SIBL
The philosophy of Social Investment Bank limited is to develop the bank into an ideal
and unique.
2.6 BOARD OF DIRECTORS
Major (Retd.) Dr. Md. Rezaul
Haque: Chairman
Mr. Md. Humayun Kabir Khan : Vice Chairman
Alhaj Nasiruddin, : Vice Chairman
Mr. Md. Shah Alam : Director
Alhaj Sultan Mahmood Chowdhury : Director
Mr. Kamal Uddin Ahmed : Director
Mr. Abdul Awal Patwary : Director
Mr. Munshi Akhtaruzzaman : Director
Mr. Ahmed Akbar Sobhan : Director
Mr. Mohammed Shamsuzzaman : Director
Mr. Anisul Haque : Director
Mr. Mohammad Azam : Director
Alhaj Mohd. Afzal Hossain : Director
Mr. Md. Sayedur Rahman : Director
Mr. K. M. Ashaduzzaman : Managing Director
2.7 THE OWNERSHIP PATTERN
This is a private sector commercial Bank providing comprehensive range of Banking
services. The bank is owned as follows:
Promoters 50%
Government 5%
Public 45%
At present the Bank has an amount of Tk. 1000 million of Authorized Capital and Tk.
430.27 million of Paid-up Capital.
2.8 HUMAN RESOURCE
There is no alternative to skilled and trained manpower in service Industry. Bearing this
in mind the well educated, promising and honest workers are being appointed and
trained. Bank has given top priority for developing skilled manpower and introducing
them with modern technologies with the purpose to develop quality customer services.
The Bank has undertaken program to train up its employees of all strata at its own
Training Institute. A highly experienced person was appointed as Director (Training) of
the Institute in the year 2001 with the task of formulating various training modules. Steps
are being taken to shift the Institute to separate premises for facilitating training activities.
Side by side, both inland and foreign training also imparted during the year as usual.
A highly experienced, well educated and motivated workforce is playing vital role
towards growth of the Bank deserve appreciation. The number of Executives and Officers
as on 31st December 2002 was 605 as against 545 as on 31st December 2001.
2.9 TRAINNING INSTITUTE
Well educated peoples are needed to achieve the objectives of a firm. With a view to
build enthusiastic and skilled working force Social Investment Bank Training Institute
was established in 24th October, 1996 at Shyamoli, Dhaka. Every year the Institute
trains sufficient number of employees. Twenty five trainers can trained for each batch
in this institution. By the side of the new employee/officer, it is possible to trained
SIBL’s existing employee/officer. There is a library in SIBL. There is about 2
thousand books remain in this library. Account, Management, Marketing, and
Computer related books are in this library. In 2005, 1283 officer and no-officer was
trained. Not only are those, the executives also trained up here.
2.10 FOREIGN CORRESPONDENTS OF SIBL
In order to gain maximum advantage from Foreign Exchange related business, the Bank
has entered into correspondent relationship with almost all major 122 Banks of 109
countries of the world like Standard Chartered Bank, American Express Bank Limited,
HSBC, HBZ Finance, Mashreq Bank PSC, Dresdner Bank AG and with local banks in
Pakistan, India, Nepal and Bhutan etc with whom we have advising, reimbursing and add
confirming arrangement.
2.11 OVERSEAS OPERATIONS OF SIBL
Social Investment Bank has set up joint venture Exchange Company named Gulf
Overseas Exchange Co. LLc, in Oman contributing 25% of its paid up capital. The
present paid up capital of the company is Riyal Omani 1,82,000.00. The Chairman of the
company is the ex-minister of the government of Oman. The exchange company,
established in 1985, now has three branches in Oman and is being managed fully by
officials of SIBL. The company is running in profit. SIBL is also exploring possibilities
of opening branches in the Middle East, Switzerland and USA. SIBL has entered into the
Management contract with a Kuwati Exchange company to provide management and
technical services. SIBL has acquired equity and management of Nepal Arab Bank Ltd.
which is the largest and highly profitable Private Commercial Bank in Nepal.
2.12 SOME PRODUCTS & SERVICES
Mudaraba Term Deposit Receipts
Mudaraba Savings Deposit
Mudaraba Notice Deposit A/C
Mudaraba Scheme Deposit
Cash Waqf
Mudaraba Hajj Savings Deposit
Mudaraba Monthly Savings Scheme
Mudaraba Bashsthan Savings Scheme
Mudaraba Special Deposit Pension Scheme (5 Years)
Mudaraba Monthly Profit Deposit Scheme
Mudaraba Education Deposit Scheme
ATM Service
2.13 RURAL CREDIT PROGRAM
Agriculture is the main driving force of economy in Bangladesh. And the whole
economic growth of the country depends on the development, modernization and
investment of money in this connection. As a non-Government financial institution
SIBL has been actively participation in rural credit program in the economic activities
for large population of the country since 1992. SIBL has been working intensively in
collaboration with Barindra Multipurpose Development Authority by conducting the
Rural Credit program particularly in Rajshahi, Naoga, Chapainowabgong, and the
northern part of the country in general. In the last 10 years bank has distributed the
credit for Tk.69.85 million. The recovery of loan in this project is 94%. In 2001 bank
has distributed the loan for Tk.7.00million. This is the first program for any private
bank. Moreover, SIBL has been participating in Agro Based Industries and
Technology Development project Loan financed by USAID since 1996.
2.14 PERFORMED SOCIAL RESPOSIBILITY BY SIBL
Social Investment Bank always tries to keep their commitment and try to do
something for the society. SIBL donate blankets for cold ridded peoples every year.
2.16 BALANCE SHEET AS ON 31 TH DECEMBER, 2004
OPERATING PERFORMANCE
Total Operating Income of the Bank as on 31st December 2004 stood at Tk. 670.30 million against Tk. 694.89 million of the preceding year. The Bank made an operating profit of Tk. 414.99 million in 2004 against Tk. 500.54 million of 2003.
A summery of operating result of the Bank as on 31st December 2004 vis-a-vis the position as on 31.12.2003 is shown below:
(Taka in million)
Particulars 31.12.2004 31.12.2003 Growth Rate
Income on Investment 1787.95 1690.95 5.74%
Profit paid to the Depositors 1372.08 1288.08 6.52%
Net Investment Income 415.87 402.87 3.23%
Commission, Exchange & Other Income 254.42 292.02 -12.88%
Total Operating Income 670.30 694.89 -3.54%
Operating Expences 255.31 194.35 31.37%
Profit Before Provision 414.99 500.54 -17.09%
Provision against Investment & Others 262.12 112.50 133.35
Profit Before Tax 152.47 338.04 -54.90%
3.1 GENERAL BANKING
Bangladesh is one of the less developed countries. So the economic development of the
country depends largely on the activities of commercial banks. So we need to emphasis
whether these commercial banks are effectively and honestly performing their functions,
assigned duties and responsibilities. In thus respect we need to know about the general
banking function of those banks as well as The Social Investment Bank Ltd. is to provide
the general banking service.
3.1.1 Account Opening & Clearing
3.1.1.1 Types of Account
Mudaraba Current Deposit Accounts:
Current account may be opened in the name of persons having legal contractual
capacities. Current deposit accounts shall be opened with a minimum of TK
5,000/- for urban branches and TK 1000/- for rural branches. Current deposit
accounts will not bear any profit.
In this kind of account a customer can deposit his money and can write one or more
check to withdraw their money. For doing this, notice is not required. He can deposit it
whenever he/ she wants to and also can withdraw it whenever he/ she wants to.
Mudaraba Saving Deposit Accounts:
Savings accounts are intended for savings of funds of the depositors and as such,
the accounts should be operated with certain limitations as prescribed in the
Savings Bank Rules. Profit of savings accounts shall be allowed at the rates as
advised by Head Office from time to time. Interest on savings account shall
accrue half yearly and be applied on June and 31 st December every year.
Withdrawals from saving account up to a maximum 25% of deposits, which
should not exceed TK. 50,000/-, can be allowed in a week.
This deposit is basically meant for small-scale savers. There is restriction on withdrawals
in a month. Heavy withdrawals are permitted only against prior notice. Profit is paid on
these types of accounts.
Mudaraba Notice Deposit (STD):
In Notice Deposit, the deposit should be kept for at least 7 (seven) days to get interest.
The minimum balance should be Tk.10 (ten) lac. In National Bank various big
companies, Organizations, Government Departments keep money in STD accounts.
Frequent withdrawal is discouraged and requires prior notice.
Mudaraba Term Deposit Scheme:
For most of the people on fixed income the opportunity to supplement their monthly
earning is a golden one. And SIBL Special Deposit Scheme gives a customer just that.
Under this scheme, customers can deposit, money for a term of 5 years. During the term
period they can enjoy a monthly profit corresponding to their deposited amount. As for
instance, under this scheme a deposit of Tk,55,000/- gives a monthly income of Tk.500/-.
Deposited Amount Monthly Benifit
Tk. 55,000/- Tk. 500/-
Tk. 1,10,000/- Tk. 1,000/-
Tk. 1,65,000/- Tk. 1,500/-
Tk. 2,20,000/- Tk. 2,000/-
Mudaraba Monthly Savings Scheme
This scheme is specially designed for the benefit of the limited income group members.
This helps to accrue small monthly savings into a significant sum at the end of the term.
So, after the expiry of the term period the depositor will have a sizeable amount to relish
on.
Monthly After After
Instalment 5 years 10 years
=500/- =40,100/- =1,12,500/-
=1,000/- =80,100/- =2,24,500/-
Mudaraba Saving Insurance Scheme
This is an uncertain World and the threatening silhouettes of future catastrophes are
always looming around. This SIBL scheme gives your family protection against the
insecurities of the world. It combines the benefits of regular savings and insurance
scheme, so, you get the usual rate of interest on the deposited amount while you enjoy the
protection of a comprehensive insurance coverage.
Class Deposit Normal Death Accidental Death
Easy 50,000/- 1,00,000/- 1,50,000/-
Convenient 1,00,000/- 2,00,000/- 3,00,000/-
Classic 2,00,000/- 4,00,000/- 6,00,000/-
Standard 5,00,000/- 10,00,000/- 15,00,000/-
Mudaraba Fixed Deposit Receipt (FDR)
They are also known as time liabilities or term deposits. These are deposits, which are
made with the bank for a fixed period specified in advance. The bank need not maintain
cash reserves against these deposits and therefore, the bank offers high are of profit on
such deposits.
There are different types of rate for different period of FDR, here shows the FDR profit
rate in the Social Investment Bank Ltd. It can be change in any time.
Period (Month) Up to 10 lac Over 10-50 lac Above 50 lac
03 8.50 8.75 9
06 8.75 9 9.25
12 9.25 9.50 9.75
24 9.75 10 10.25
36 & Above ----- 10.75 ------
3.1.1.2 Procedure & rules to open a new account
Mudaraba Savings account
Before opening of a savings Bank Account, the following formalities must be completed
by the customer:
Requirement
1) Introducer
2) 2 copies passport size photograph dully attested by introducer
3) Valid passport/ ward commissioner’s identification certificate
4) Prescribed account opening form filled in properly by intending account holder
5) Putting specimen signatures in the specimen card.
6) Fill the KYC form
7) Initial deposit Tk. 5000/- only
After fulfilling above formalities, opens an account for the client and provide the
customer with a deposit book and a checkbook in case of savings account and currents
account.
Mudaraba Current account (Individual)
Requirement
1) Introducer (current account holder)
2) 2 copies passport size photograph dully attested by introducer
3) Valid passport/ ward commissioner’s identification certificate
4) Prescribed account opening form filled in properly by intending account holder
5) Putting specimen signatures in the specimen card.
6) Fill the KYC form
7) Initial deposit Tk. 5000/- only
Joint Account:
When an account is opened in the names of two or more persons it is called a
joint account. However, it is desirable that the number should not exceed three.
At the time of opening an account, clear and specific instructions shall be
obtained regarding operation of the account and payment of the balance, if any,
to the survivors or surviving members in the event of death of one or more joint
account holders. Account shall be operated by ‘either of us’ or ‘either of us or
survivor, or ‘both of us jointly’ or ‘both of us or survivor’.
Current account (Proprietorship)
No saving account shall be opened in the proprietary concern. Application to
open current accounts will be made on which the name of the proprietor and his
authorized signature must be obtained. All formalities regarding the benefice of
the account openers and the introducer’s rules of the opening of the accounts etc.
must be completed to the absolute satisfaction of the manager.
Requirement
1) Introducer (Current account holder)
2) 2 copies passport size photograph dully attested by introducer
3) Valid passport/ ward commissioner’s identification certificate.
4) Trade license
5) Seal of the firm
6) TIN Certificate
7) Prescribed account opening form filled in properly by intending account holder
8) Putting specimen signatures in the specimen card.
9) Fill the KYC form.
10) Initial deposit Tk. 5000/- only
Partnership:
In case of partnership account,
Requirement
1) Introducer (current account holder)
2) 2 copies passport size photograph dully attested by introducer
3) Valid passport/ ward commissioner’s identification certificate of all partners.
4) Trade license
5) Seal of the firm
6) Partnership deed
7) Prescribed account opening form filled in properly by intending account holder
8) Putting specimen signatures in the specimen card.
9) Fill the KYC form.
10) Initial deposit Tk. 5000/- only
Current Account (Limited Company)
On having the desire to open an account from a limited company, a National Bank
Officer asks for the following documents:
Requirement
1) Introducer (current account holder)
2) 2 copies passport size photograph dully attested by introducer
3) Valid passport/ ward commissioner’s identification certificate of all directors.
4) Trade license of the company
5) Memorandum and articles of association of company(certified copy/ photocopy
dully attested by authorized signatory
6) Board Resolution
7) Certificate of incorporation
8) Certificate of commencement of business (for public limited company)
9) TIN certificate
10) List of directors
11) Seal of the company
12) Prescribed account opening form filled in properly by intending account holder
13) Putting specimen signatures in the specimen card.
14) Fill the KYC form.
15) Initial deposit Tk. 5000/- only
a). The name of the persons who have been authorized to operate the bank account on
behalf of the company.
b). The name of the persons who are authorized to execute documents with the bank on
company’s behalf.
Societies, Clubs and Associations:
In case of these sorts of accounts National Bank requires the following documents:
1 Registration Certificate Under the Societies Registration Act, 1962
2 Copies of Memorandum, Articles of Association
3 Resolution of the Managing Committee.
4 Power of Attorney to Borrow.
Non-government Organization (NGO):
The account opening procedure is same but in exception is that the Registration
Certificate from the Social Welfare Department of Government must be enclosed with
the application.
Joint Account in The Name of Minor:
A minor cannot open an account in his own name due to the incapacity to enter into a
contract. He can open an account in National Bank in Joint name of another person who
will be guardian of him.
3.1.1.3 Clearing the cheque:
According to the Article 37(2) of Bangladesh Bank Order 1972, the banks, which are the
member of the clearinghouse, are called as Scheduled Banks. The scheduled banks clear
the cheques drawn upon one another through the clearinghouse. This is an arrangement
by the central bank where everyday the representative of the member banks gathers to
clear the cheques. Banks for credit of the proceeds to the customer’s accounts accept
cheques and other similar instruments. The bank receives many such instruments during
the day from account holders. Many of these instruments are drawn payable at other
banks.
The place where the banks meet and settle their dues is called the Clearinghouse. The
clearinghouse sits for two times a working day. The members submit the claimable
cheques in the respective desks of the banks and vice-versa. Consequently the debit and
credit entries are given. At the debit summation and the credit summation are calculated.
Then the banks clear the balances through the cheque of Bangladesh Bank. The
dishonored cheques are sorted and returned with return memo.
Clearing is two types:
Inward Clearing:
In Inward clearing process cheques of Social Investment Bank Ltd, Foreign Exchange Branch are deposited in other banks and sent back to Foreign Exchange Branch of Social Investment Bank through clearing house for collection of money. In this process, cheques of Foreign Exchange branch of Social Investment Bank Ltd are sent to the local office of Social Investment Bank at first. Then the local office sent those cheques to the Foreign Exchange Branch.
Process of Inward Clearing:
After receiving the cheques from the local office of Social Investment Bank Ltd,
those cheques are directly send to the computer section for checking the balance
of those specific A/Cs from which money should be collected. If the required
balance is available there then the amount is debited from that account and the
cheque is honored. But in case if the required balance is not available the
authorized officer of clearing department immediately informs to the head of the
general banking or he tries to connect the account holder. If the account holder
does not deposit the required balance immediately the cheque is dishonored.
Finally the authorized officer gives all the entry of those cheques in inward
clearing register. The format of the register book is given below:
Bank From Branch
name
Cheque no. Amount A/C No. Remarks
After giving the entries, a credit advice is sending to the local office of National
Bank Ltd.
Dishonor of cheque
If the cheque is dishonored, Social Investment Bank sends a memorandum (cheque return
memo) to the customer stating the reason in the following way,
(1) Refer to drawer
(2) Not arranged for
(3) Effects not cleared. May be presented again.
(4) Exceeds arrangements
(5) Full cover not received.
(6) Payment stopped by drawer.
(7) Payee’s endorsement irregular/ required.
(8) Payee’s endorsement irregular, require Bank’s confirmation.
(9) Drawer’s signature differs/ required.
(10) Alterations in date/ figures/ words require drawer’s full signature.
(11) Cheque is post dated/ out of date/ mutilated.
(12) Amount in words and figures differs.
(13) Crossed cheque must be presented through a bank.
(14) Clearing stamp required/ requires cancellation.
(15) Addition to Bank’s discharge should be authenticated.
(16) Cheque crossed” Account Payee Only”
(17) Collecting Bank’s discharge irregular/ required.
Process of outward clearing:
For outward clearing cheques, the bearer of the cheque must have an account in
Foreign Exchange Branch of Social Investment Bank Ltd. After the submission
of the cheque, authorized officer gives the entries in software, which is provided
by Bangladesh Bank. The name of the software is Nikash. After giving all the
entries are printed and are enclosed with the cheques. Then all the cheques with
the enclosed sheets are send to the local office of Social Investment Bank Ltd.
for the collection of money. The local office sends it to clearing house.
LBC(Local Bills for Collection) – If the cheque presented by customer is the
cheque of SIBL’s other branch then to collect the money LBC procedure is
follow.
OBC(Outward Bills for collection)- Collection of bills, which is beyond the clearing
range and collected through OBC mechanism.
3.1.2 Local Remittance
Commercial banks in Bangladesh offers the facility of transferring funds, from
one place to another, to their customers as well as to the general public. Such
transfer of funds can be affected either through Demand Draft or Telegraphic
Transfer or Mail Transfer. The aforesaid methods of remitting money from one
place to another within the country are known as Inland Remittance.
3.1.2.1 Telegraph Transfer (TT):
Telegraphic Transfer may be affected at the written request of any person and against value received from him. A written application on the bank’s prescribed form duly signed by the purchaser should be obtained. If the application for issue of telegraphic transfer contains instruction to debit the account of the purchaser, his signature should be verified. It is however, preferable to obtain a confirmation cheque from the customer. The application form is in variably checked on the following points: There should be a branch of Social Investment Bank Ltd in the place on which
Telegraphic Transfer will be issued and the said branch has test arrangement with the
issuing branch.
Full name of the payee and his a/c no., in case instructions are to credit his test
arrangement with the issuing branch.
The amount of T.T Commission 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 T.T by cheque and commission and telegraph charges by cash.
In case of amount tendered by cheque, the drawer on the cheque and the purchaser of
the TT should be the same person, viz., the signature on the cheque and on the
application should tally. Such cheque should be in favor of Social Investment Bank
Ltd
Now, a cost memo for the TT is to be prepared by the officer under his signature
which contains the amount of TT Commission & Telegram charges & is delivered to
the purchaser.
Now the officer concerned as to the amount, name of the beneficiary has correctly
prepared the message, instructions regarding mode of payment and place of payment.
The concern officers should correctly prepare the test.
T.T over telephone may be transmitted on account of valued clients of the bank.
Payment of Telegraphic Transfer:The payment of T.T should be made to the payee or beneficiary after being satisfied in all respect. The serial number of T.T should be entered in T.T payable register on the relative folio next to that of previous message on agreement of test. The issuing branch should be immediately informed if any number is omitted.1. The voucher should be passed. The beneficiary should be intimated the earliest, if
possible may be informed on telephone.
2. If the instructions are to be “Advise and pay, the T.T receipt should be prepared. The
manager and the officer of the branch should sign after checking the name of the
beneficiary, the amount and the name of the issuing branch. The number of T.T
receipt should be noted in the T.T payable Register and on the decoded manages. The
beneficiary should be advised on the printed prescribed form instead of sending the
T.T receipt.
3. When the amounts are credited/ paid the same and should be noted in the T.T payable
register. While making the payment on a T.T receipt, the signatures of the attorney
who have signed be verified cancelled.
4. The T.T receipts are not transferable. They should not bear any endorsement. The
beneficiary is to signed on proper revenue stamp in front of the officer. Party
acceptable should attest the signatures of the beneficiary to the bank.
3.1.2.2 Pay order:
A pay order is a written order, issued by a branch of a bank, to pay a certain sum of money to a specified person or a bank. It may be said to be a banker’s cheque as it is issued by a bank drawn upon and payable by itself. If money will draw in Dhaka city then pay order.Use of pay order A pay order is issued and paid by the same branch of a bank and as such, the drawer
and the drawee are the same. The person or the organization in whose favor it is
issued is known as payee or the beneficiary. It is some times sold to individual on
payment of value who may or may not be a customer and is called the purchaser.
The purchaser should sign the standard application form giving detailed particulars
and request for issue of pay order. The payee or beneficiary must not appear to be
fictitious. His full name and address should be written on the application. Bank
should recover commission of pay order from the purchaser.
A pay order is divided into three parts viz. The actual pay order, The second
counterfoil to be returned by the payee and the first counterfoil to be retained by the
issuing branch as record.
Characteristics & payment: It should be paid to the payee or beneficiary after proper identification or it may be
credited to his account.
A pay order is transferable. As it is a banker’s cheque payable to order the payee/
beneficiary may transfer it, by giving proper discharge on its back, to some one else
who receives payment as the transferee.
It is not generally collected for a persons other that the original payee except in cases
where the depositor is a valued client known to the bank.
Before making payment the signature of issuing officers should be verified and the
date of payment should be marked in the register.
3.1.2.3 Pay slipIf anybody get any amount from SIBL then SIBL issue pay slip. He can deposit the pay order in any bank’s any branch.
Meaning & purpose: A pay slip is a written authorization for making payment-specified person or firm
payable by issuing branch, for a discharged liability of the bank. As pay slip is
originated made payable by the bank in a receipt form there is no need for any
application for its issue.
A pay slip is issued to effect payments on account of bills payable by the bank for
goods and services purchased or availed by it. For example, bank is required to make
payment of bills for the purchase of furniture & fixture, for printing & stationery and
for any other works done on its behalf by the other party on agreement with the bank.
Characteristics & payment:
A pay slip is receipt of payment received by the payee due from the bank. It should be
paid to the payee on proper identification or credited to his account on its being presented
duly discharged by him or revenue stamp of required value. Cash payment should not be
made if it is crossed except to a collecting bank.
3.1.2.4 DEMAND DRAFT
A demand draft is a written order of one branch upon another branch of the same
bank, to pay a certain some of money to or to the order of a specified person.
Drafts are not issued payable to bearer. In practice drafts are not to be drawn
between branches within the same city.
Issue of Demand Drafts:
The customer is asked to complete filling in a form that is treated as an
application as well as voucher. The application form should be checked
carefully.
Commission 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 Remittance
Department against initial in his book.
Draft is prepared and entered in draft issue Register.
Branch-wise serial number is given on the draft besides the printed number
putting on oblique(/) in between. The amount of the protect graphed.
The draft number is written on the voucher.
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
initials the counterfoil of the draft and the Register.
Then the draft and the voucher are sent to the Manager/ Second Officer for
second signature.
The draft is crossed if customers desires and delivered to him against his
acknowledgement on the voucher.
If the amount is tendered by a cheque, the drawer to 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.
A memorandum is issued to the customer if he or she desires.
The cheque is sent for passing and cancellation.
After the cheque is passed, similar procedure as explained above is adopted
for issuing draft.
Telegraphic intimation under test is sent to the drawee branch for drafts of Tk.50,
000/= and over in or as per the existing rules.
3.1.3 Deposit
In the deposit section general ledger & clients accounts are maintained. The computer
system is operated by A to Z software. The main job of the system operator is posting the
cheques or vouchers and providing the balanced data. When a cheque or voucher is
presented for posting, the account number is put in the computer. The computer then
shows the balanced amount of the account. All the information regarding a client or
general ledger can be found here as well. The computer operator also has to print
necessary statements daily for different units of the bank. Party’s individual statement is
also printed. Current accounts statement is printed in every month and savings accounts
statement at an interval of six-months. These statements are then sent to the respective
clients.
After updating these information’s, a copy is made in a cartridge for back- up before
shutting down the system.
At the end of day’s work, the computer operator of Foreign Exchange Branch, SIBL
prepares all the supplementary statements of all the transactions and sends it to the other
employees of the general banking section. In the next morning, all the vouchers &
supplementary statements of the previous day are matched & stapled with each other.
3.1.4 Accounts Department
Recording all kinds of transactions of the Branch, confirming their accuracy and
preparing statements are the main function of this department. Now a days under
computerized Banking system the job of accounts department became very easy. In
computerized account department of Social Investment Bank Limited, the clean cash
statement and supplementary statement on the computer directly prepares party ledger
vouchers. The accountant needs not to prepare these manually. The functions of the
accounts department can be divided into two parts.
Daily functions, and
Periodical functions
3.1.5 Advance
In the current situation bad debt is a general matter in the Banking activities. It is very
difficult to compensate by the business profit. For this reason SIBL adopted some modern
strategy for control bad debt. The Bank continued to extend credit facilities in profitable
productive and priority sectors including trade finance within the policy guidelines of the
Bank. The total advances of the Bank stood at Tk.20200.64 million 31.12.2001 compared
to Tk. 18553.66 million in the last year. The growth rate is 8.87%.
3.1.5.1 Social Investment Bank Limited Allow Loan For Under These Purpose:
1. Cash Credit Hypo
2. SOD (FO)
3. SOD (General)
4. SOD (Bid Bond)
5. Loans (General)
6. Loans Against General House Building (Residence)
7. Loans Against General House Building(Commercial)
8. Loans Against Staff House Building
9. Exporter Cash Credit
10. Loans General (IT)
11. Loans General (ADB)
12. Loans General (Cash Assistance)
13. Loans Against Packing Credit (PC)
14. SOD (Export)
15. Consumer Credit Scheme (CCS)
3.1.5.2 Documents to be obtain:
Loan :1) D.P. Note, 2)Letter of Partnership or Resolution of the Board of Directors, 3) Letter of arrangement ,4) Letter of disbursement, 5) Letter of Pledge,6) Letter of hypothecation, 7) Trust Receipts, 8) Letter of Lien and ownership, 9) Letter of Lien packing credits & 10) Letter of Lien .
Overdraft : 1) D.P. Note, 2)Letter of Partnership or Resolution of the Board of Directors, 3) Letter of arrangement, 4) Letter of continuity,5) Letter of lien & 6) Letter of ownership.
Cash Credit : 1) D.P. Note, 2)Letter of Partnership or Resolution of the Board of Directors, 3) Letter of arrangement, 4) Letter of continuity,5) Letter of Pledge, 6) Letter of hypothecation & 7) Letter of Lien.
Bills Purchased: 1) D.P. Note, 2) Letter of Partnership or Resolution of the Board of Directors, 3) Letter of arrangement,4) Letter of hypothecation-bill.
3.1.5.3 Definition and Explanation of Credit Facilities:
Direct Facilities (Funded):Cash Credit:Cash credits or continuing credits are those which form continuous debits and credits unto a limit and have an expiration date. A service charge, which in effect an interest charge is normally made as a percentage of the value of purchases. These credits may be of the nature of pledged and hypothecated and banks should report these in separate heads incorporated under the main head cash credit. A detailed explanation of Pledge and Hypothecation is given below.
Cash Credit against pledge: Under this arrangement a cash credit is sanctioned against pledge of goods or raw-materials. By signing the letter of pledge, the borrower surrenders the physical possession of the goods under the banks effective control as security for payment of bank dues. The ownership of the goods however, remains with the borrow. The pledge creates an implied lien in favor of the bank on the underlying merchandise. In the event of failure of the borrower to honor his commitment the bank can sell the goods for recovery of the advance. No collateral security is normally asked for grant of such credit.
Cash Credit against Hypothecation: Under this arrangement a credit is sanctioned against hypothecation of the raw materials or finished goods. The letter of hypothecation creates a charge against the goods in favor of the bank but neither the ownership nor its possession is passed on to it, only a right or interest in the goods is created in favor of the bank and the borrower binds himself to give possession of the goods to the bank when called upon to do so. When the possession is handed over the charge is converted into pledge. This type of facility is generally given to the reputed borrowers of undoubted integrity.
1. A loan facility on a customer’s current account at a bank permitting him to overdraw up to certain agreed limit for an agreed period. The terms of the loan are normally that it is repayable on demand or eat the expiration ate of the agreement.
2. Loan against Imported Merchandise (LIM/LTR): This is a loan facility up to a satisfactory limit to the traders/customers by a bank against security of the value of the imported merchandise. This item also includes loan against Trust Receipts.
3. PAD/BLC/BE: A loan facility provided by the banks to the customers against documents/bills.4. Export Credit: All advance facilities provided to the exporters by the banks other than cash credit.5. Term Loan: A bank advance for a specific period repaid with interest under fixed schedules. The term loans may be as follows.6. a) Short Term: Upton and including 12 months.
b) Medium Term: More than 12 months unto and including 60 months.c) Long Term: More than 60 months.
7. Other: Any loan that does not fall in any of the above facilities is considered as “other.” Blocked/Segregated continuing credits when re-scheduled by the banks for payments over a number of periods should also be reported against the head “other”.
Indirect Facilities (Non-Funded) :
1. Guarantee: A credit facility in contingent liabilities form extended by the banks to
their clients for participation in development work like supply of goods and
services.
2. Letter of Credit: A credit facility in contingent liabilities form provided to the
clients by the banks for import/procurement of goods/services.
3. Other: All other non-funded facilities which are not included in any other non-
funded facilities.
3.1.5.4 Revised Rules/Principles of Loan Classification and provisioning:
With a view to classifying, loans & advances will be categorized into four different categories. Such as Continuous Loan, Demand Loan, Fixed Term Loan and Short Term Agricultural and Micro-Credit.
1. Continuous Loan: The loan which has not particular repayment schedule, but contains date of expiry, credit limit etc, will be termed as Continuous Loan.
2. Demand Loan: The loan which is considered repayable only after it is claimed by the banks, will be termed as Demand loan. If contingent or any other liability is converted to Compulsory Loan or Forced Loan then it will be termed as Demand Loan.
3. Fixed Term Loan: The loan which is repayable within a particular period of time as per repayment schedule will be termed as Fixed Term Loan.
4. Short Term Agricultural and Micro-Credit: Those credits which are enlisted as short term credit under the annual credit programmed declared by ACD of Bangladesh Bank will be termed as short term Agricultural Credit. It will also include credit extended to agricultural sector and repayable within a period not exceeding 12 months. The short term Micro-Credit will be that which will not exceed an amount of Tk. 10,000/ and will be repayable within a period not exceeding 12 months. Such loans may be Non-Agricultural Credit, Swanirvor Credit, Waving Credit or banks’ self financed project loan and whatsoever.
3.1.5.5 Housing:
Is a unique savings and loans institution. It is promoted with an authorized capital of
Tk.200 core and subscribed capital of Tk.40 core by a consortium of 18 corporate entities
including 7 insurance companies, 4 banks, 1 development finance company, 6 local
corporate/business groups and 2 non-resident Bangladeshi overseas investors’ forums.
Incorporated in August 1998 as a public Limited Company and licensed by Bangladesh
Bank as a non-banking financial institution, National Housing is engaged in the core
business of promoting savings and home ownership in Bangladesh.
Features of Housing Home Mortgage Loan:
Purpose of Loan
National Housing Home Mortgage Loans are available for
Construction of houses
Purchase of houses or apartments
Renovation, extension or addition to existing houses or apartments
Purchase of housing plots
Amount of Loan
The maximum repayment term is 15 years but not extending beyond the borrower’s 65 birthday or retirement date.
Applicable Rate of Interest
The current rate of interest applicable to your loan is 15.75% calculated on annual rests.
Rate of interest charged to your loan is linked to the prevailing money market conditions
and may vary during the repayment period of the loan.
Disbursement of Loan
The loan can be disbursed at a time or in installments as per your requirement depending
on the status and progress of works of the project subject to investment of your equity in
full.
3.1.5.6 Equity:
Equity and Entrepreneurship Fund (EEF).Government Financed Equity Fund Under
Management of Bangladesh Bank.
The Bangladesh Bank directs the activities of Equity and Entrepreneurship Fund to
encourage the entrepreneurs for investing in risk oriented but potential industry
development financed by the government.
Sectors equity facilities are available
1. Software Industry 2. Food Processing and Agriculture-based industry
The interest?
No interest! The profit/Loss of the project will be distributed among the entrepreneur and
EEE according to ratio of their investment.
3.1.5.7 Consumer Credit Scheme:
National Bank's Consumer Credit Scheme gives you a great opportunity to buy
household and office items on easy installments. This scheme gives you the advantage of
part payment to cope with the high price tags of many necessary home and office
appliances.
Television, Refrigerator, VCR, Personal Computer, Photo-Copier, Washing Machine,
Furniture, Microwave Oven, Car, and a number of other expensive items are now within
your buying range. With this scheme NBL makes better living possible for people living
on fixed income. Customers can buy those home and office equipment's without over
taxing their budget.
3.1.6 Cash
The cash section of Social Investment Bank deals with all types of negotiable instruments, cash and other instruments and treated as a sensitive section of the bank. It includes the vault that is used as the beyond this limit, the excess cash is then transferred to Bangladesh Bank. This section performs the following functions:
Cash Packing:
After the banking hour cash is packed according to the denomination. Notes are counted and packed in bundles and stamped with initial.
Allocation of Currency:
Before starting the Banking hour all tellers give requisition of money through “Teller cash proof sheet”. The head Teller writes the number of the packet denomination wise in “Reserve sheet” at the end of the day; all the notes remained are recorded in the sheet.
3.2 FOREIGN EXCHANGE BANKING3.2.1 Foreign Exchange
3.2.1.1 Foreign Trade:
Foreign trade constitutes a sizable portion of international transactions of a country.
Payment received for exports and made for imports form a substantial part of its
remittances from and to other countries. In our country a major share of the current
balance of payments is made up of exports and imports of merchandise on private and
government account. Thus, trade is the most important factor giving rise to payments
between countries. Foreign trade is a type of specialization, which like other forms of
specialization increases productive efficiency and standard of living of the people of the
country concerned.
3.2.1.2 Need for Foreign Trade:
Foreign trade enables a country to have a much larger flow and much more diversified
form of wealth than what is possible without it. The residents of a country are able to
enjoy the use of commodities which otherwise may not be available to them at all. There
is a wide difference in respect of the material and human resources, stage of technical and
scientific progress, and possession of capital equipment in different countries. No country
is in a position to produce everything in quantities large enough to provide its people a
reasonably high standard of living. A country, therefore, enters into trade relations with
other countries on account of certain basic differences due to topographical reasons in its
economy from theirs.
Commodities are imported because either they cannot be produced in the country at all or
can be produced at a very high cost. Import of such commodities is a convenient and
cheaper way of getting them. In exchange for imports, a country has to export certain
articles because normally imports can be paid for only by exports. A country’s exports
usually comprise commodities the cost of production of which is less than the cost of
importing them. Thus the need of the people of a country for its scarce resources and in
exchange the surplus of some of their resources constitute the import and export stimulate
the foreign trade which is intern mobilized by foreign exchange proceedings.
3.2.1.3 TYPES OF FOREIGN TRADES DEALT IN BANKS
Foreign trades are mainly of two types. These two are: Import Trade & Export Trade.
The import and export trade of Bangladeshis is controlled under the Import and Export
Control Act, 1950. In normal sense the imports involve outward remittances and the
export involves inward remittances. The terms and conditions of contracts between the
importers and the exporters and the eventual remittances in foreign countries are subject
to such restrictions and formalities as are laid down from time to time by the Import and
Export Control and Exchange control in their respective jurisdiction which the importers
and exporters must comply with.
Import Trade:
When a particular country wishes and does bring in some goods and services from
another country, trade occurring between these two countries is called import trade.
Import trade means procurement and purchase of goods and services from another
country or countries. Therefore, purchasing function of international trade is called
import trade.
Export Trade:
Selling of goods and services or other sales related function for the transfer of surplus
goods or services for a value or just to merchandise them abroad trade occur between
countries. Thus export or sale of additional goods and services or surplus goods and
services is called export trade. There is an another peculiar type of export trade named
Re-Export Trade.
3.2.1.4 IMPORT
The bank defines import as to bring in, from abroad, something in kind of goods or services (to behave lawfully). It includes the following services:
1. Letter of Credit (L/C) opening.
2. Presentation/Retirement of import documents.
The import mechanism first involves the issuing of a L/C as an instrument by a bank on behalf of one of its customers, authorizing an individual or a firm to draw draft on the bank or on one of its correspondents for its account under certain conditions stipulated in the credit. Secondly the bank import mechanism involves the retirement of import mechanism on receiving the payment or under certain conditions against the security of payments made by the importer in documents stipulating an advance payment date.
IMPORT OPERATION
Actually the import procedure is a result of a two-party negotiation or contract. Once the importer has accepted the supplier’s offer, he agrees to open a Letter of Credit in favor of the latter. Thus the import procedure of the bank starts with the opening of the credit. The entire import mechanism of this branch is enumerated below.
Terms of Credit: First of all the concerned banker asks the importer to present and show the terms of the credit that the importer wishes to issue. The terms of the letter of credit are based on the contract between the importer and the exporter and the import license or the authorization permits for import under free list as the case may be, issued in the named of the concerned importer. The terms of the credit specify importantly, amount of the credit, name and address of the beneficiary and the opener, particulars of the goods, their make, quantity and price basis, tenor of bill of exchange, period and mode of shipment, whether part shipment allowed, port of shipment and of destination, nature of credit, expiry date, names and number of sets of shipping and other documents.
Letter of Credit Application: For the purpose of the opening the credit the importer is required to fill up and sign a stamped Letter of Credit application, which, in addition to recording the full details of the credit including instruction for booking exchange, serves as an agreement between the banker and the opener.
Presentation of the application for Opening of the Letter of Credit: When the importer requests the bank for the opening of a L/C, by agreeing to the request, the bank makes a promise of payment to the supplier by issuing it. But the importer must make out an application for this purpose. The application must be written in a plain paper or Letter Head pad and it should be submitted being attached with the following certificates and papers:
If the importer is an individual: 1. Current Deposit A/C No.,
2. Partnership Deed and Solvency Certificate (If partnership firm),
3. Article of Association (If Private Limited Company ),
4. Memorandum of Association (If Private Limited Company),
5. Certificate of Commencement of Business (If Public Limited Company),
6. Photocopy of Trade License (valid),
7. Photocopy of VAT Registration Number,
8. Photocopy of Tax Identification Number (TIN certificate),
9. Import Registration Certificate from CCI&E, (Renewed and valid).
10. Required amount of Registration Fee.
IRC issue fee: IRC Issuing Fee
Import Limit
Tk. 500 Highest annual imports limit 5 Lac.Tk. 1500 Highest annual imports limit 15 Lac.Tk. 3000 Highest annual imports limit 50 Lac.Tk. 5000 Unlimited annual import capacity.
Table No.1: Fees for issuing Import Registration CertificateBesides, these documents stated above the bank may ask for certain other documents submitted by the importer prior to issuance of the credit. Like, Photocopy of Membership Certificate of Chamber of Commerce & Industry, photograph of the applicant, Minimum three copies of Proforma Invoice/Indent/Sale Contract (dully accepting the rate of goods offered) etc.
Bank Scrutiny of the Documents Before Opening of the Credit: On receipt of the application form with other required documents submitted by the opener they are thoroughly scrutinized. The points, which are carefully scrutinized, are followings:
1. Indenting the registration number.
2. That the IRC is updated or renewed and valid.
3. That the goods are marketable and legally importable and that it is not difficult for
the beneficiary to comply with all terms and conditions to be incorporated in the
L/C.
4. That the L/C is not going to be opened in favor of the importer.
5. That the importer signs it, agreeing terms and conditions.
6. That the Insurance Cover Note specifies the date of shipment.
7. That it encloses Radioactivity Report in case of food item.
8. That the Import Permission (IMP) form is dully filled in and signed.
9. That the liability, as being applied, is under appropriate limit.
10. That the amount does not exceed the L/C value and is identical with invoice
amount and that the amount in figure and in word is same.
11. That it encloses credit report of the beneficiary in cases when the L/C value is
more than US $ 20,000.
12. That the tenor, if, the draft is strictly in conformity with the terms stipulated in the
L/C i.e., at sight or usance and that the transcription or partial shipment is
allowed.
The terms and conditions of L/C application are consisted with exchange control and import trade regulation, UCPDC – 500. If all the documents are along with application are in order, the concerned banker will advance with these documents for opening.
Preparation of Proposal for the Opening of the Letter of Credit: On careful examination and scrutiny of the documents if the issuing banker assumes that everything is consistent and the application is considerable, then he begins preparing a proposal stipulating the applicant’s financial position, creditworthiness showing the CIB (Credit Information Bureau) report, previous relationship with the bank, total L/C amount, amount of margin proposed by the importer etc. After preparing the proposal of opening the credit the banker will sent it to the import depart department in-charge for approval. In Foreign Exchange Branch the import department is controlled and directed by a Vice President (VP). The VP is given the power to approve and sanction a ‘Limited’ amount of L/C. In other cases, when the L/C amount exceeds the ‘Limit’ or capacity of the branch, approval of ‘Head Office’ will be required for its opening.
After the issuance of L/C the banker asks the importer to sign on some ‘charge documents’. Charge documents are bank-printed documents and these documents get validity as soon as the buyer or the credit seeker signs own it by giving the bank the power to charge the buyer with the rights as given on the documents. Usually these documents are guards against the bank’s guarantee of issuing the credit. When the importer fails to pay or make any other type of default with the credit, the bank use these documents and goes to the court to charge him. The Foreign Exchange branch normally takes the following documents signed by the importer just before mailing of the credit to the advising bank:
1. Promissory Note,
2. Letter of Disbursement,
3. Letter of Continuity, etc.
Release of Import Documents to the importer: After the lodgment vouching the PAD section of the import division ask the importer to make payment due and take delivery of the import documents and bills in order of getting the imported merchandise released
from the port. In this stage of documentary import mechanism again two questions come forward: the response and non-response of the importer to take delivery of the documents and bills. If the buyer agrees to take delivery of the import documents and bills and makes the total payment due (L/C amount – margin amount + interest charged on this deducted amount), the bank retires the import bills on his authorization.
3.2.1.5 EXPORT
Exports, for obvious reasons, are listed in the priority sector in all developing economies. There is no doubt in this fact that export trade constitutes the most substantial base for sustaining the long term development and prospect of a country’s economy. Bangladesh is also now a developing country. So this fact is equally relevant to the concerned economic soundness of Bangladesh. We all know about the ‘Balance of Payment’. If a countries total import outweighs its total export, the country is called to be facing drastic negative (unfavorable) balance of payment. A continuous negative balance of payment of country makes it totally dependent on others. And thus the economic standing and structure of that country gradually collapse. On the other hand a positive (favorable) balance of payment shows the greater amount of export by a country against its total import and shows a sound economic motion. Thus export is a most import mechanism that helps a country to be dependent and to produce goods or merchandise either through its internal resource or through procuring resource from external sources. Whatever the source is the export helps a country to build its capital reserve more promisingly.
Bangladesh is also now very much keen to boost up its export. But the most stumbles’ blocking the process is the non-availability of required finance. There is neither adequate capital in the hands of the exporter to meet up their foreign trade requirements nor their exists an organized capital market to extend fair hand as help for the finance. In view of this, commercial banks of this country are the only real friendly base, which recently have started playing a challenging and pivot role in the business sector through extending both pre and post trade finance to the exporters and importers.
Export Policy 1997-2004: Target:
1. To attain highest national growth by increasing export to regional and
international markets;
2. To reduce gradually the gap between export and import expenditure;
3. To produce export commodity at a competitive price aimed at market retention
and promotion;
4. To avail the opportunity to enter in liberalized and globalize ‘Post-Uruguay
Round International Market’;
5. To make goods exportable and more suitable for foreign markets by
diversification and quality improvement;
6. To establish backward linkage industry and services and identify higher value
added goods;
7. To develop infrastructure for exports;
8. To create skilled manpower in export sector;
9. To upgrade the quality and grading of commodity to an internationally recognized
level.
The normal export mechanism is much like the procedure maintained in a typical import mechanism. Whereas in case of import the party is the importer and the bank acts as the opener of his credit, in case of export the party is the exporter and the bank acts as the negotiator of his documents. In our country the most promising exporters are the garments industries. About 76% of the total exports of our country is made by the garments sector. The underlying reason of success of this sector in exports is the availability of the huge amount of cheap labor. But because of inadequate supply of locally produced quality fabrics and accessories, we have to import about 60% of the fabrics and accessories from abroad for use in the garments industry. This is actually a time consuming and costly process for the garments sector. So considering the significant contribution of the garments sector in the export trade the private commercial banks have undertaken an especial arrangement to provide them with export finance, which is called the foreign Back to Back Letter of credit (BTB).
BANK MECHANISM IN EXPORT
As stated earlier, the foreign trade plays a vital role in the economic advancement process of nation. So the trend or parameters of foreign trade i.e., import and export is of great concern to the government of a country. By the term ‘Export’ we mean carrying of anything from the country of origin to another country in return for a value. The bankers define ‘Export’ as the sending of visible things outside the country for sale. The export is important because with the export earnings we met our import bills. Normally a bank provides the following services as with the party in case of export needs.
Obtaining of Export Registration Certificate (ERC): When the party or the exporter receives any export order after negotiation with the importer, he comes to the bank and asks negotiate his transaction with the importer’s correspondent. In such a case the bank first advise him to obtain Export Registration Certificate from CCI&E (Chief Controller of Import and Export).
Procedure for obtaining ERC: For obtaining Export Registration Certificate (ERC), intending Bangladeshi Exporters are required to apply to the Controllers/Joint Controller/Deputy Controller/assistant Controller of Imports and exports in the prescribed form along with the following documents:
1. Nationality and Assets Certificate of the Proprietor/Partners/Directors;
2. Registered Partnership Deed in case of Partnership Concerns;
3. Memorandum and Article of Association and Incorporation Certificate in case of
Limited Company;
4. Bank Certificate; and Income Tax Certificate;
5. Copy of valid Trade License and
6. Copy of Rent Receipt or the Business Premises.
On receipt of necessary advise from the Offices of the concerned Controller of Imports and Exports, applicants of Export Registration Certificate are required to deposit Registration Fee of Tk. 1000 (subject to change) in to the Government head of account “24- Trade and Commerce-Fees Realized under Import and Export Control Act, 1950” through Bangladesh Bank or Government Treasury Sonali Bank. Copies of Treasury Challans showing payment of fees should be sent to the concerned offices of the CCI&E for enabling them to issue Export registration Certificate. Once it has been registered, the exporters are to make annual payments of Tk. 1000 (subject to change) only for having the ERC renewed.
Receiving Advising of Letter of Credit: Normally the exporter receives Letter of credit in two forms:
1. Cable
2. Original
The imported terms and conditions of the L/C are communicated by the L/C opening bank to the exporter’s bank through cable, which is followed by the original L/C. The L/C received through cable generally covers the following points:
1. The name of the importer;
2. The name of the exporter;
3. Description of goods (in short detail);
4. Expiry date of the Letter of Credit;
5. Shipment date, etc.
Usually, a few days after the receipt of the L/C (cable or original), the exporter’s bank ascertains the correctness of the test number (incase of cable) and the authorized signature. If found in order, the bank brands its stamp on the L/C and put the L/C No. Then the bank makes entry of the particulars of the L/C into the Register of Letters of Credit Established by the Foreign Banks. After that the exporter’s bank sends the original copy of the L/C to the beneficiary (the exporter) without engaging any
responsibility on its part. The particulars of any subsequent amendment of the Letter of Credit are written down in the Register and the amendment is advised to the beneficiary.
Issuing of EXP (Export) Form: After the receipt of the advising bank’s letter, the exporter is required to issue an Export Form by the Authorized Dealers. The ‘EXP’ Forms are numbered serially and issued in quadruplicate. Before the export forms are lodged by the exporters with the Customs/Postal Authorities, they should get all the copies endorsed by the Authorized dealers. For delay in repatriation of export proceeds or non-realization of export proceeds, the exporters render themselves for action under Foreign Exchange Regulation Act, 1947. Authorized Dealers and their officials who certify the export forms also render themselves on such action by the Bangladesh Bank.
Disposal of ‘EXP’ Forms:Original : From Custom Authority to Bangladesh Bank;Duplicate : From Negotiating Bank to Bangladesh Bank after negotiation;
Triplicate : From Negotiating Bank to Bangladesh Bank after realization of the proceeds of the export bill; and
Quadruplicate : Office Copy of Negotiating Bank.
Examination of the Documents: After the issuing of the ‘EXP’ form the exporter proceeds for the shipment of the goods to the buyer’s destiny. As soon as the shipment of goods is made, the exporter prepares the Bill of Exchange and submits it with other export documents to Authorized Dealer for negotiation of the same. As the banker deals only with documents not with the commodity, they should be very much careful about the genuineness and correctness of the documents evidencing shipment of the respective commodities. The banker is to ascertain that the documents are strictly as per the terms of L/C. before negotiation of the export bill, the banker is to scrutinize and examine each and every document with great care. Negligence in the part of the banker may put the importer abroad into unnecessary troubles.
As regard to examination of other documents, it is to be thoroughly checked and ensured that the documents are prepared strictly in conformity with the terms and conditions of the relative L/C.
3.2.1.6 EXPORT FINANCE IN THE FORM OF BTB L/C WITH SPECIAL EMPHASIS ON GRMENT INDUSTRIES
Today the garment products of our country have captured much of the foreign markets successfully. The rise of ‘Garments Industry’ in Bangladesh has been described as the “Rise of phoenix from the ashes”. Starting in late 70’s as a small non-traditional sector of export, Ready-made garments (RMG) emerged as a promising export earning sector of the country by the year 1983. In 1978 the country had less than a dozen small manufacturers of garments industry. But within a span of two decades, the country now
has 2963 registered RMG factories. The sector is now the leading Foreign Exchange earner of the country and a strong driving force of the economy. The RMG sector of Bangladesh now contributes 76% of the country’s total Foreign Exchange earnings through export. For the last 20 years, the sector consistently flourished, sometime @20%. The statistics given in the next page testifies the status and the amazing growth of RMG sector.
It is estimated that garments sector now employ over 1.7 million workers of whom about 85% are women. Starting with an export earning of Tk. 1.00 crore in 1979-80, the phenomenal growth of the industry has created a history by earning of about Tk. 20,500.00 crore in the 1998-99 fiscal year out of Tk. 27,100.00 crore of total export earning of the country which is 75.66% of the total export.
Bangladesh now exports about 100 categories of garment products. The European Union is the topmost buyer of the Bangladeshi garment products. About 52.38% of the total RMG exports were made to the European Union during 1998-99 totaling US$ 2105.64 million. Bangladesh is the fifth largest garments exporter in the European Union Market. The second largest buyer of our RMG products is the United States of America, which import 42.24 of our exported RMG products totaling US$ 1738.33 million. In US market Bangladesh has occupied the sixth position through exporting of the RMG products. This impressive performance has been possible because of the cheap labor cost of production as well as for the high product quality.
Export Finance: “Export or perish” is the slogan of all the countries in the world to have a favorable Balance of payment position in their International Trade and to accumulate national wealth in increasing the GNP of the country. As such, all the countries endeavor to formulate an export policy conducive in fostering the export of the country and thereby increasing export earning. Government therefore always provides some sort of incentives or subsidies in the export trade of the country. The garments in our country are the most vital export parties. About 76% of the total export is made by the garments industries. So considering the significant contribution of this sector the ‘Private Commercial Banks’ have undertaken to provide various soft arrangements and financial incentives and facilities in order boost up the export of RMG sector. Bangladesh Bank issues guidelines to all schedule banks from time to time streamlining the procedures for providing export credit to the RMG sector which are enumerated below:
Working Capital: Against irrevocable Letter of Credit received by the Ready Made Garment Industries, the bank may provide pre-shipment credit including the Back to Back Letter of Credit up to 90% of the value of the export order. For instance, if the amount of a Back to back Letter of Credit opened by the bank is equivalent to 75% of the value of export order, the bank may provide credit facilities in local currency equivalent to 10% to 15% of the value of export order for meeting other local expenses e.g., salary, wages, electricity bill etc.
Back to Back L/C: Banks may extend Back to Back credit facilities to the extent to cover all genuine export orders to garments units enjoying high reputation and standing without asking for any margin or collateral. Back to Back L/C (BTB L/C) facilities may
be allowed against irrevocable Letter of Credit issued by the International Banks of repute. Local Procurement of Fabrics: Banks should also provide credit facility towards working capital to the local fabric manufacturing units on the strength of local Back to Back Letter of Credit opened by the Ready Made Garment Industries against export orders.
BTB L/C for Import of Raw materials to the Supplier/Manufacturer of Fabrics /Accessories: Banks may also open Back to Back Letter of Credit for import of yarn, dues, chemicals, sizing materials for the supplier or manufacturer of fabrics/accessories of garments without margin on deferred payment basis.
Concessional Interest Rate: Concessional rate of interest is being provided to the garment industries for a period of 180 days as pre-shipment credit.
Category Of Back To Back Letter Of Credit: The back to back letter of credit are of
two categories:
a) Foreign Back to Back of Letter of Credit
b) Locals Back to Back Letter of Credit.
Foreign Back to Back Letter of Credit :Because of inadequate supply of locally
produced quality fabrics and accessories, we have to import about 60% of the fabrics
and accessories for use in the garments industry. So the question of opening foreign
back to back letter of credit arises.
Local Back to Back Letter of Credit: On account of readymade garment units under
bonded warehouse system banks may open local BTB L/C against any export order and
master L/C in favor of local manufacturer-cum-supplier of fabrics and accessories.
3.2.1.7 DOCUMENTS USED IN FOREIGN TRADE RELATING TO BILLS
Every import and export involves documentary transaction of goods and services between or among the parties involved (or between or among their supporting banks). Most of the foreign trade and their exchanges are now held in the form of documentary Letter of Credit (LC). Documentary letters of credit issued to finance the shipment of
goods involve the drawing of bills of exchange, which have to be accompanied by what is known as “full set of shipping and non-shipping documents”. The attachment of these documents to the bill is an essential obligation of the seller and the buyer so as to serve the purpose. These typical documents can be divided into two main parts.
These documents are Shipping documents and Non-shipping documents. These documents are the followings:
Shipping Documents: Shipping documents are those documents, which are mainly given by the exporter to the importer after the shipment of the goods or services as been negotiated. It is impossible to release the goods or commodity from ship/port without these documents. These documents are described below: Bills of lading: The bill of lading is one of the most important shipping documents,
which accompany bills of exchange drawn under letters of credit. It is an evidence of
the fact that the exporter has dispatched the goods and gives the exporter title to the
goods and enables him to collect them on arrival at the destination.
The bill of lading is more like a transferable debenture. It is a document signed and
issued by the shipping company or it’s agent acknowledging the receipt of specified
goods for carriage and embodying an undertaking that the goods will be delivered to a
consignee named in the bill, or to his order or assigns, or merely to order.
The document specifies the port of shipment, the destination, and the conditions under
which the goods are received for carriage.
“Clean” and “Claused” Bill of Lading: A bill of lading that indicates that the goods
are in apparent good condition without any without any qualification is known as a
“clean” bill of lading. If, on the other hand, it bears some remark relating to a defect in
packing, such as ‘three bags torn’, ‘some cases broken’, ‘received in dampened
condition’, ‘goods not sufficiently packed’, etc., it is known as a “foul” or “dirty” bill of
lading. It is also known as a “claused” bill of lading. A “claused” bill of lading is not an
acceptable document, unless specifically provided for in the sale and purchase contract.
Such remarks protect the carrier against any claim for losses attributable to bad
packing. They also protect every one else who comes in possession of the bill of lading
for value.
“On Board ” and “Received for Shipment” Bill of Lading: When shipping space is
ample and sailings are regular this type of certificate is easy to get. An “on board ” bill
of lading is satisfactory from the viewpoint of the all the parties concerned. The
consignor is assured that the goods have been loaded and will reach the destination. The
consignee has equal assurance when he receives the documents that the goods will
arrive in time and will be available to him on surrender of the documents.
“Received for shipments” bills of lading have, therefore, vital lacunae and are not
acceptable to buyers and bankers. The buyer receives the documents but may not be
sure that he will get the goods in time. The merchandise may consist of perishable
goods, which, if delayed in transit, may not remain saleable. Buyers and banks,
therefore, ask for “on board” bills of lading.
“Through” Bills of Lading: Sometimes, when goods are carried overland and
overseas, or during the sea voyage have to be transshipped at an intermediate port, the
carrier that takes the goods first issued a “through” bill of lading. A railway company
may issue a “through” bill of lading that serves both as a railway receipt and some kind
of bill of lading for the sea voyage. Such a document, however, lacks authority to bind
the ship owner who undertakes the sea portion of the carriage. This kind of the bill does
not provide any assurance that actual shipment on the named vessel took place. The
banker has a right to reject such a bill in connection with a credit, which calls for
delivery of a bill of lading, unless there is a specific authorization for its acceptance.
“Straight” and “Order” Bill of Lading: A “straight” bill of lading is one, which is
made out in the name of a consignee. At the port of destination it is not necessary to
present a straight bill of lading to take the delivery of goods, except where it is
necessary for the purpose of identification. An “order” bill of lading is one, which is
made out to the order of the consignor or supplier. It can be transferred by endorsement
to other parties. Such a bill of lading usually contains a condition directing the shipping
company to notify the consignee when the goods arrive.
Charter Party Bills of Lading: This is a contract for the hire of whole ship or part of a
ship setting forth in detail the rights and obligations of the owners and liners or
charterers. Charters are usually arranged by “ship brokers”. They are for their services
charging a small commission on the total amount agreed upon for hire.
Charters are divided into “time” charters and “voyage” charters. The former is for
specified period of time, while the latter is for particular voyage. A charter party
specifies, among other details, the particular ports to which the ship is to go, the cargo
to be carried, and the freight to be paid for the hire of the ship.
Stale Bill of Lading: A bill of lading is said to be “stale” if it bears a date subsequent
to the expiry date of the credit under which the goods are shipped. It shows that the
goods were put on board the vessel on a date later than that authorized under the credit.
A bill of lading may also be considered stale if it is presented so long after the sailing of
the carrying vessel that the goods will be reaching the port of destination long before
the buyer will get possession of the goods when they arrive at destination.
Airway Bill: Airway bills or air consignment notes are issued by airlines or their agents
as a receipt of consignment received as carrier. It is normally issued in triplicate and by
the airline. The first copy is for the carrier, the second for the consignee and the third
for the consignor. An airway bill does not constitute a title to the goods and is,
therefore, not a negotiable instrument.
Insurance Policy: There are many risks involved in the import and export business as
the goods are shipped and travel thousands of miles and often more than that to the
buyer’s destiny. There are obvious risks of damage, loss, or destruction of goods during
transit by sea, air or by road. For this reason, the buyer asks insurance of goods to be
shipped to him from the exporter or seller of them. Insurance policy is a kind of
agreement between exporter and Insurance Company to reduce the risk. Exporter sends
this document with shipments to the importer.
Marine Insurance Policy: A marine insurance policy is a contract between the insurer
and the insured whereby the former, in consideration of the payment of a premium by
the latter, agrees to indemnify the latter against loss incurred by him in respect of goods
exposed to “perils of the sea” or to the particular perils insured against. The marine
insurance is the responsibility of the buyers (consignee) under F.A.S., F.O.B. and C&F
contracts and of the seller (consignor) under C.I.F. contract. The sum insured should be
the C.I.F. value of the goods. Where the C.I.F. value cannot be ascertained the amount
should not be less than the amount of the drawing under the credit or invoice value of
the goods. Like a bill of lading it must be negotiated and endorsed where it is payable
to order.
Bill of exchange: The Payment for the goods exported under a letter of credit is
received by the seller or exporter through the medium of a bill of exchange (commonly
called bill or draft) drawn on the buyer for the amount depending on the credit. It is
known as a documentary bill when it is drawn under a documentary credit and hence is
accompanied by other shipping documents. Through this bill of exchange the exporter
orders the importer to pay the value of the goods shipped through this document.
Importer or the respective bank acting on behalf of the importer must sign on this
document. The bill is usually drawn in duplicate of sets of two with the original copy
being known as the First of Exchange and the duplicate the Second of Exchange.
Invoice: The invoice is the important document of the letter of credit. It is the seller’s
bill for the merchandise. In other words, the invoice is a document containing the
description of the goods shipped, their marks, make, quantity, and prices, charges for
packing, freight, insurance etc. as are applicable as per terms of the contract as well as
the name of the carrying vessel and the date of sailing.
There are different types of invoices in use. Such as:
The Commercial Invoice: The commercial invoice is a statement of accounts drawn
by the seller address to the buyer giving the details of the amount stated therein which
is based on the terms of the contract entered into between the buyer and the seller. The
exporter must dully sign a commercial invoice.
Details found in a typical commercial invoice are name and address of the buyer and the seller, the vessel of shipment, port of discharge etc. Also the shipment import and export permit numbers, the number of contract and invoice and other essential details of the transaction are recorded on the invoice. The financial terms of the sale, such as
whether under letter of credit, sight drafts etc., are given. The number of packages and the identifying mark and numbers of them are clearly indicated. The goods contained in the packages are detailed and prices are given item by item. The commercial invoice is neither a document of title, nor it is negotiable. Its main utility is that it acts as a book-device for both seller and buyer. The Consular Invoice: Another special type of invoice named consular invoices are
required depending upon the trade regulations in importing country. It is made out in a
prescribed format, certified and signed by an individual of the importer’s country
national working as a consulate in the exporter country. In some cases it is also seen
that exporter’s own invoice is authenticated by the embassy or consulate instead of
issuing consular invoice. This type of invoice is called legalized invoice.
The Proforma Invoice: Another type of invoice is proforma invoice, which is a form
of quotation to a potential buyer.
The Certified Invoice: Certified invoice is an invoice, which bears a signed statement,
by someone in the importer’s country who have inspected the goods and found them in
accordance with those specified in the contract.
The Certificate of Origin: The regulations in force in some countries require a
certificate of origin of imported goods to be produced before clearance of by customs
and assessment of duty. The certificate is usually required where goods from certain
countries receive preferential treatment, or the import of goods from some countries is
partially or wholly prohibited. This is generally issued by the Chambers of Commerce
of the exporting country and is arranged by the exporter. Sometimes, the certificate of
origin is endorsed on the back of the relative invoice, in which case the whole
document is known as a “certified invoice”.
The Packing List: A packing list serves to indicate the exact nature, quantity, and
quality of the contents of each package in a shipment. The list helps the importer to
identify the goods and check them against his order. Banks may require such a list
when they have financial interest in the merchandise. Clearance of goods through
customs is also facilitated by packing list.
The Other Certificates: Some other certificates are also required with of particular
commodities. A “weight certificate”, signed by a public agency, is often necessary with
goods sold in bulk, such grains, oils and similar products. The importing country may
insist on a “food inspection certificate” from an official inspecting service of the
exporting country when certain foodstuffs of perishable nature such as meat, edible fats
etc., are imported. A “non- dumping certificate” showing the comparative difference in
the domestic and export selling prices, is sometimes required with imports in some
countries to ensure that goods are not being sold at very much lower prices in the
importing countries than the domestic markets of the exporting country.
Inspection Certificate: This is normally issued by an independent inspection company
located in the exporting country certifying or describing the quality, specification or
other aspects of the goods, as called for in the contract and/or the L/C.
Quality Control Certificate: Sometimes the sale contract may demand a certificate
issued by a standards institute or quality control agency in the exporting country
indicating the quality of the merchandise shipped. This is known as a quality control
certificate.
GSP Certificate: When tariff concession is sought from those developing countries
providing preferential treatment to exporters of the developing countries, a GSP
certificate should be obtained from the Export Promotion Bureau (EPB).
Besides the usual shipping documents required under the Letter of Credit or a contract
entered into, the shipping documents in our country are incomplete without being
supported by Exchange Control Forms. These Exchange Control Forms are known as
GRPP Forms, which are completed and submitted by the exporter to the customs
authorities at the time of shipment.
Non-shipping Documents: There are a number of other documents, which have
importance in dispatch of goods in foreign trade. A brief discussion on these documents
is given below:
The Documentary Letter of Credit: A Letter of Credit is issued by a bank (Issuing
Bank) at the request of an importer (applicant) in favor of an exporter (beneficiary)
from whom the importer has contracted to purchase some commodity or commodities.
The importer, the exporter, and the issuing bank are, thus, obviously parties to a Letter
of Credit. There are, however, one or more than one bank that are involved in various
capacities and at various stages to play an important role in the total operation of the
credit.
The Charter Party: In the international trade most of the goods are transferred by
ships. Before exporting of the goods the exporting company or the individual exporter
has to hire a full ship or the part of a ship for the transportation purpose of the
contracted merchandise. A written agreement between the shipping company and the
exporting company delineating the hire of the ship or some portion of it is called
charter party. If the full or the portion of the ship is hired for a particular time period
this is called a “time charter party”. If the full or the portion of the ship is hired for a
particular route, without mentioning the time period then this is called a “voyage
charter party”.
The Ships Reports: In the ship’s report the following information is found:
(a). The name of the ship.
(b). The name of the registered port and the registration number.
(c). Nationality of the ship owner or the name of the state belonging to the ship.
(d). The name of the loading port.
(e). The name of the captain of the ship or the principal of the ship.
(f). Number of the employees and the officers of the ships.
(g). Reports of things used by the employees, captain and officers of the ship.
(h). Detail reports of the transported merchandise.
(i). The name and address of the exporter.
The Trust Receipt: The letter through which the importer recognizes the ownership of
the export or the exported goods and services to pay the value of the goods by the sales
value of his imported goods. On the requirement of the money the importer submits all
the documents of import with the bank and takes loan. Banks keeps the trust letters
with it and returns all other documents to the importer for the delivery of the imported
goods.
The Bill of Entry: Bill of entry is the details report of the imported goods submitted to the port authority or customs authority after the imported goods had reached to the importer’s port. By using the bill of entry, the port authority or customs authority can easily identify the importer’s goods from the other goods. The port authority begins to delivery the goods after they have received the bill of entry. The Bill at Sight: Sometimes, the importer cannot know the details report before
making import. So, he is not able to fill up the bill of sight. In this circumstance, the
importer expresses an individual announcement to the customs authority by expressing
his failure about the bill of sight that he is unable to fill up the bill of sight without
opening the package of the imported goods. This bill of sight is called uniformed bill of
sight. After this declaration the custom authority allows the importer to fill up the bill
of sight after opening the package of the imported goods.
The Letter of Indemnity: If any time, due to some sudden reasons the export
documents don’t reach to the importer duly but goods loaded ship reaches accordingly
then importer gets the ownership of the imported goods by a letter issued by the bank
and signed by both the bank and the importer, such letter is called the letter of
indemnity. Through this letter the bank promises the importer to make indemnity if
there is any demurrage in the delivery of goods.
The Dock Receipt: Dock receipt is that receipt, which is issued by the dock authority
to the exporter after the exportable goods reach to the dock and the authority, gives
clear opinion about the goods to be all right for export.
The Mate’s Receipt: If the exporter does not present the exportable goods to the dock
but presents to the ship captain or mate’s then the ship’s captain gives the exporter a
receipt, which is called mate’s receipts. This is actually a raw receipt.
The Advice Note: The exporter sends a letter to the importer before the necessary
documents like probable sending date, route and other documents reaches the importer.
Through the advice note the exporter informs the importer about exportable goods
before the sending of actual necessary documents.
3.2.1.8 FINANCIAL ASSISTANCE PROVIDED BY THE BANKS
In international trade the most two important terms are the export and the import. As the
mostly dependable financial institution banks are in a position to provide sufficient
financial assistance to the importer and more commonly the exporter so as to conform
smooth flow of a large bulk of foreign trade.
Now a day, both the importers and the exporters of our country receive and/or enjoy a
considerable amount of financial assistance from commercial banks and other financial
institutions.
Pre-Shipment Finance: Pre-shipment finance in taka, more popularly known as
‘Packing Credit Advance’, is short-term working capital finance specially provided to an
exporter against the documentary evidence of having entered into export commitments.
The packing credit is granted at a pre-shipment stage, i.e., at the stage prior to the goods
being shipped and the credit is given for procuring raw material, for paying
manufacturing and packing charges and payment of insurance premium and freight. As
and when the goods are shipped and shipping documents are obtained, the pre-shipment
finance is to be liquidated against the proceeds of export documents tendered.
Post-Shipment Finance: The post-shipment finance is the financial facility extended by
the banks after the goods have been shipped and against the submission of export
documents evidencing the dispatch of goods. Post-shipment finance portfolio is in
existence since the day international trade has been known, but more precisely after the
First World War. After that the international trade is ever increasing, and the shipping
documents against which the exporters are getting financial facilities are well accepted.
Foreign Bills Purchased: This facility is granted when the financing banker is financing
against the shipping documents presented by the exporter but the set of documents
presented is not drawn under a Letter of Credit (LC).
3.2.2 Foreign RemittanceAccording to Foreign Exchange Regulation Act 1947, the commercial banks or the authorized dealer who has the Bangladesh Bank authorization can do Foreign Exchange. According to this Act, TC (Traveler Cheque), Drafts are included in Foreign Exchange. SIBL, Foreign Exchange Branch provides its customer with the foreign remittance facilities by issuing Foreign Demand Drafts, Traveler Cheque, Endorsing passport for cash etc.
3.2.2.2 Traveler’s Cheque:
It is the safest way to carry money from one country to another. It can be change in any
country of the world. Even if the Traveler Cheque (TC) is lost then the holder of the T.C
can inform it to the bank and the bank will inform it to the agencies so that no one can en-
cash the T.C while issuing a Traveler Cheque (T.C) a signature is needed, so that no one
can en-cash it except the holder and also another signature is needed in encashment in
front of the banker. So Traveler Cheque (T.C) is the safest way to carry out side the home
country.
A customer is permitted to endorse maximum US$ 3000 per year for travel in countries other than SAARC countries and US$ 1000 for travel in SAARC countries. If SAARC countries are to be visited by road then maximum US$ 500 can be endorsed per passport per year. At a time cash cannot be endorsed over US$ 500.
Issue of Travelers Cheque: There are some requirements, which are to be fulfilled by the TC publisher:
1. Passport holder himself to be present to issue TC purchasing.
2. The passport has to be a valid one.
3. Air ticket has to be confirmed.
4. Steps involved in issue of TC:
5. After verifying all these documents, the customer as asked to fill up prescribed
application form.
6. In the application the customer states the amount he is willing to endorse and it is
to be verified that his required amount is within the stipulated amount.
7. Then the customer pays cash or by debiting hid account the Travelers Cheque is
issued.
8. Endorsement is given on the passport and on the ticket. Customer fills up the
Travel and miscellaneous form.
9. Purchase application form is prepared and handed over to the purchaser along
with the Traveler Cheque.
10. Entry is given in three registers: Foreign Currency Issue Register, Travelers
Cheque “On Hand” Register and Foreign Currency “In Hand” Register.
Payment of Travelers Cheque: When a customer wants to encash his TC, he has to show his passport and it is to be verified from the passport that he has traveled outside the country. Then -
1. The TC will have to be scrutinized very strictly;
2. If everything in the TC is in order then the customer will be asked to give
signature on the place of “Counter Signature”;
3. If the signature agrees with the one in place of “the signature of the holder” then
the payment will be made through giving cash to the customer or crediting his
A/c;
4. Travelers Cheque will be crossed and endorsement given on the back of the
received TC.
3.2.2.3 Endorsement of cash
Cash Foreign Currency can also be remitted through endorsement in the passport. In case of endorsing cash on passport, the requirements are same as in case of travelers cheque. But the only exception is that the passport holder is not required to be present by himself.
3.2.2.4 Credit Card
Through its Credit Card. Social Investment Bank Limited has not only initiated a new
scheme but also brought a new life style concept in Bangladesh. Now the dangers and the
worries of carrying cash money are memories of the past.
Credit Card comes in both local and international forms, giving the client power to buy
all over the World. Now enjoy the conveniences and advantages of Credit Card as you
step into the new millennium.
Need to maintain FDR(Fixed Deposit Receipt) in SIBL in any branch.
3.2.2.5 Issue FDD
If any draft is send to the name of any organization from abroad then the draft is fill-up
from “C” where the draft holder is to fill-up who has send this draft, from where this
draft has been sent etc. whether family purpose or not, if the draft has been family
purpose then no VAT is required against the draft. For payment of draft concerned officer
maintains a register, which is called Register for foreign Currency paid.
3.2.2.6 FOREIGN CURRENCY ACCOUNT
The accounts maintained in foreign currencies are known as foreign currency account. The Authorized Dealers may open foreign currency accounts in the names of followings without prior approval from Bangladesh Bank.a) Bangladesh nationals residing abroad.
b) Foreign nationals residing in Bangladesh and also the foreign firms registered
abroad and operating in Bangladesh or abroad.
c) Foreign Missions and their expatriate employees.
Branches are mainly deals with two types of foreign currency accounts, namely:
a) Non-Resident Foreign Currency Deposit Account (NFCD).
b) Resident Foreign Currency Deposit Account (RFCD).
Non-Resident Foreign Currency Deposit Account (NFCD)
All nonresident Bangladesh nationals and persons of Bangladesh origin including those having dual nationality and ordinarily residing abroad, may maintain interest bearing
time deposit accounts named “Not-Resident Foreign Currency deposit (NFCD)”Accounts with the Ads.
Eligible persons:a) Bangladesh nationals working and earning abroad.
b) Bangladesh nationals serving with Embassies /High Commission of Bangladesh in
foreign countries including officers/Staff of Govt./Semi
Govt./Autonomous/nationalized sector posted/Deputed abroad.
c) Shore staff posted abroad (Crew of BSC not entitled).
d) Foreign nationals and companies registered and /or incorporated abroad,
institutional investors and 100% (Hundred Percent) Foreign owned industrial unit
of EPZ (Minimum Amount USD 25000/- or equivalent).
Resident Foreign Currency Deposit (RFCD): Ordinary resident of Bangladesh may open and maintain Resident Foreign Currency Deposit (RFCD) accounts with foreign exchange brought-in at the time of their return from travel abroad. Any amount brought in with declaration to Custom Authorities in form FMJ and up to US$ 5000/- brought in without any declaration can be credited to such accounts.
Deposit:The depositors must submit a declaration mentioning the date of return from abroad and the amount of Foreign exchange brought in at the time of crediting to RFCD account to the effect that Foreign exchange (i) is not a receipt against export of goods or services from Bangladesh (ii) is not a commission due from abroad arising from business in Bangladesh.
3.2.2.7 Telegraphic Transfer (TT)
TT is one of the important tools of foreign currency from one country to another. The
person who wants to send TT to the abroad at first he /she has to deposit amount
mentioned in voucher to the cash department. The bank branch through their respective
NOSTRO account that is maintaining any foreign bank account outside the country
generally performs it. The originating bank sends a message to the paying foreign bank
for making payment against the mentioned TT account number. The foreign make
payments to the party and also make debit ‘account’ against respective bank. At the same
time foreign bank send advice to Head Office ID division for acknowledgement the
payment.
To know how much customers are satisfied is a strategic goal for all organizations
involved in the delivery of customer service like a bank. Customer satisfaction is the key
to success. So banks are want customers to be happy with the products and services they
provide. If they feel they have received good value for their money, then business will
prosper
Satisfying customers is an essential element to staying in business in this
modern world of global competition. All must satisfy and even delight their
customers with the value of their services to gain their loyalty and repeat
business. Customer satisfaction is therefore a primary goal of process
improvement programs. A key to success is increasing the value that provides to
customers, and keeping up with customers rising expectations.
4.1 Need to Satisfy Customers of SIBL
Consumers form expectations about the value of marketing offers and make buying
decisions based on expectations. Customer satisfaction with a purchase depends on the
product’s actual performance relative to a buyer’s expectations. A customer might
experience various degrees of satisfaction. If the product’s performance falls short of
expectations, the customer is dissatisfied. If performance matches expectations, the
customer is satisfied. If performance exceeds expectations, the customer is highly
satisfied or delighted.
♣ Today’s most successful banks are raising expectations—and delivering performance
to match. These banks embrace total customer satisfaction.
4.2 Identifying Customers Need of SIBL
Historically, customers were excluded from the product development process. When this
approach is used, the organization producing the product is taking a chance that will
satisfy the customer. In a competitive market place that is global in scope, such an
approach can be disastrous. In the customer side, customer needs are identified clearly as
a normal part of product development.
♣ Most foreign banks and commercial banks are diversify their product according to
customers needs and with evolution of modern banking product.
4.3 SIBL Should Provide Quality as the Core Service
Retention strategies will have little long-term success unless there is a solid base of
service quality and customer satisfaction to build on. This doesn’t necessarily mean that
the firm has to be the very best among its competitors, or “world class” in terms of
quality and customer satisfaction. It must be competitive, however, and frequently better
than that. It does no good to design relationship strategies for inferior services.
♣ Although foreign banks take high charge for their service, people go to them to get
quality service.
4.4 Keep Relationship with Customers of SIBL
Relationship marketing essentially represents a paradigm shift within marketing— away
from an acquisitions/transaction focus toward a retention/relationship focus. Relationship
marketing (or relationship management) is a philosophy of doing business, a strategic
orientation, that focuses on keeping and improving current customers rather than on
acquiring new customers
♣ Banks need to keep relation with existing customer otherwise they will go to other
bank where they will get more facility.
4.5 To Satisfy Customers of SIBL
Becoming a customer-centric organization requires operational management and process
changes to allow the company to quickly adapt to changing customer behaviors. This
may include greater employee empowerment; flexible product/service pricing models;
and expanded product features/benefits. Learning to be truly customer-centric, however,
is not an easy goal to achieve.
Taking a structured, step-by-step look at the current environment is the best way to
identify the right enhancements required by the CRM strategy. This includes:
Identifying services and products being supported
Mapping current business workflows, touch points and inter-dependencies
Reviewing existing technologies, features and capabilities
Discussing operational and business vision
Defining business requirements
Developing enhanced business workflows and processes
Identifying technology functionality gaps
Mapping functionality to business processes
Developing new technology and functionality framework
Developing a conceptual design and prototype plan
Defining business requirements
Job satisfaction of the bankers, who have an important place in the economy, will affect
the quality of the service they render. Job satisfaction of a service oriented organization
like bank is more important. Because if they are satisfied they will work more and will
give service to customers properly.
Job satisfaction is one of the criteria of establishing a healthy organizational structure in
an organization. Employee morale problems can be the result of any number of
workplace problems. If employees don't like a particular supervisor, or feel that their
work isn't appreciated, results will suffer. Getting to the root of the problem is sometimes
a challenge.
Job satisfaction as the sum of all negative and positive aspects related to the individual's
salary, his/her physical and emotional working condition s, the authority s/he has, the
autonomous usage of this authority, the level of success s/he has maintained and the
rewards given due to this success, the social statute maintained in relation with h is/her
job, and his/her relations with his/her colleagues and administrators.
5.1 The Importance of Job Satisfaction to Satisfy Employee of SIBL
The most important evidence which indicates that the conditions of an organization got
worsened, is the low rate of job satisfaction.
Individuals want to maintain statute, high ranks and authority by giving their capabilities
such as knowledge, ability, education, health etc. to their jobs for which they spend most
of their time. The individuals who cannot meet their expectations with regard to their jobs
become dissatisfied. Thus, this dissatisfaction affects the organization for which s/he
works.
Job satisfaction is very important for a person's motivation and contribution to
production. Job satisfaction may diminish irregular attendance at work, replacement of
workers within a cycle or even the rate of accidents.
5.2 Need to follow Frederick Herzberg’s Two dimensions to satisfy employee of
SIBL
Frederick Herzberg theorized that employee satisfaction depends on two sets of issues:
"hygiene" issues and motivators. Once the hygiene issues have been addressed, he said,
the motivators create satisfaction among employees.
Hygiene issues (Dissatisfiers)
Company and administrative policies
Supervision
Salary
Interpersonal relations
Working conditions
Motivators (Satisfiers)
Work itself
Achievement
Recognition
Responsibility
Advancement
To apply Herzberg's theory to real-world practice, let's begin with the hygiene issues.
Although hygiene issues are not the source of satisfaction, these issues must be dealt with
first to create an environment in which employee satisfaction and motivation are even
possible.
5.2.1 Company and administrative policies. An organization's policies can be a great
source of frustration for employees if the policies are unclear or unnecessary or if not
everyone is required to follow them. Although employees will never feel a great sense of
motivation or satisfaction due to your policies, you can decrease dissatisfaction in this
area by making sure your policies are fair and apply equally to all. Also, make printed
copies of your policies-and-procedures manual easily accessible to all members of your
staff. If you do not have a written manual, create one, soliciting staff input along the way.
If you already have a manual, consider updating it (again, with staff input). You might
also compare your policies to those of similar practices and ask yourself whether
particular policies are unreasonably strict or whether some penalties are too harsh.
5.2.2 Supervision. To decrease dissatisfaction in this area, you must begin by making
wise decisions when you appoint someone to the role of supervisor. Be aware that good
employees do not always make good supervisors. The role of supervisor is extremely
difficult. It requires leadership skills and the ability to treat all employees fairly. You
should teach your supervisors to use positive feedback whenever possible and should
establish a set means of employee evaluation and feedback so that no one feels singled
out.
5.2.3 Salary. The old adage "you get what you pay for" tends to be true when it comes to
staff members. Salary is not a motivator for employees, but they do want to be paid
fairly. If individuals believe they are not compensated well, they will be unhappy
working for you. Consult salary surveys or even your local help-wanted ads to see
whether the salaries and benefits you're offering are comparable to those of other offices
in your area. In addition, make sure you have clear policies related to salaries, raises and
bonuses.
5.2.4 Interpersonal relations. Remember that part of the satisfaction of being employed
is the social contact it brings, so allow employees a reasonable amount of time for
socialization (e.g., over lunch, during breaks, between patients). This will help them
develop a sense of camaraderie and teamwork. At the same time, you should crack down
on rudeness, inappropriate behavior and offensive comments. If an individual continues
to be disruptive, take charge of the situation, perhaps by dismissing him or her from the
practice.
5.2.5 Working conditions. The environment in which people work has a tremendous
effect on their level of pride for themselves and for the work they are doing. Do
everything you can to keep your equipment and facilities up to date. Even a nice chair
can make a world of difference to an individual's psyche. Also, if possible, avoid
overcrowding and allow each employee his or her own personal space, whether it be a
desk, a locker, or even just a drawer. If you've placed your employees in close quarters
with little or no personal space, don't be surprised that there is tension among them.
Before you move on to the motivators, remember that you cannot neglect the hygiene
factors discussed above. To do so would be asking for trouble in more than one way.
First, your employees would be generally unhappy, and this would be apparent to your
patients. Second, your hardworking employees, who can find jobs elsewhere.
5.2.6 Work itself. Perhaps most important to employee motivation is helping individuals
believe that the work they are doing is important and that their tasks are meaningful.
Emphasize that their contributions to the practice result in positive outcomes and good
health care for your patients. Share stories of success about how an employee's actions
made a real difference in the life of a patient, or in making a process better. Make a big
deal out of meaningful tasks that may have become ordinary, such as new-baby visits. Of
course employees may not find all their tasks interesting or rewarding, but you should
show the employee how those tasks are essential to the overall processes that make the
practice succeed. You may find certain tasks that are truly unnecessary and can be
eliminated or streamlined, resulting in greater efficiency and satisfaction.
5.2.7 Achievement. One premise inherent in Herzberg's theory is that most individuals
sincerely want to do a good job. To help them, make sure you've placed them in positions
that use their talents and are not set up for failure. Set clear, achievable goals and
standards for each position, and make sure employees know what those goals and
standards are. Individuals should also receive regular, timely feedback on how they are
doing and should feel they are being adequately challenged in their jobs. Be careful,
however, not to overload individuals with challenges that are too difficult or impossible,
as that can be paralyzing.
5.2.8 Recognition. Individuals at all levels of the organization want to be recognized for
their achievements on the job. Their successes don't have to be monumental before they
deserve recognition, but your praise should be sincere. If you notice employees doing
something well, take the time to acknowledge their good work immediately. Publicly
thank them for handling a situation particularly well. Write them a kind note of praise. Or
give them a bonus, if appropriate. You may even want to establish a formal recognition
program, such as "employee of the month."
5.2.9 Responsibility. Employees will be more motivated to do their jobs well if they
have ownership of their work. This requires giving employees enough freedom and
power to carry out their tasks so that they feel they "own" the result. As individuals
mature in their jobs, provide opportunities for added responsibility. Be careful, however,
that you do not simply add more work. Instead, find ways to add challenging and
meaningful work, perhaps giving the employee greater freedom and authority as well.
5.2.10 Advancement. Reward loyalty and performance with advancement. If you do not
have an open position to which to promote a valuable employee, consider giving him or
her a new title that reflects the level of work he or she has achieved. When feasible,
support employees by allowing them to pursue further education, which will make them
more valuable to your practice and more fulfilled professionally.
5.3 Six factors that can influence job satisfaction of SIBL
When these six factors were high, job satisfaction was high. When the six factors were
low, job satisfaction was low. These factors are similar to what we have found in other
organizations.
5.3.1 Opportunity.
Employees are more satisfied when they have challenging opportunities at work.
This includes chances to participate in interesting projects, jobs with a satisfying
degree of challenge and opportunities for increased responsibility. Important: this
is not simply "promotional opportunity." As organizations have become flatter,
promotions can be rare. People have found challenge through projects, team
leadership, special assignments-as well as promotions.
Actions:
Promote from within when possible.
Reward promising employees with roles on interesting projects.
Divide jobs into levels of increasing leadership and responsibility.
It may be possible to create job titles that demonstrate increasing levels of
expertise which are not limited by availability of positions. They simply
demonstrate achievement.
5.3.2 Stress.
When negative stress is continuously high, job satisfaction is low. Jobs are more
stressful if they interfere with employees' personal lives or are a continuing source
of worry or concern.
Actions:
Promote a balance of work and personal lives. Make sure that senior
managers model this behavior.
Distribute work evenly (fairly) within workteams.
Review work procedures to remove unnecessary "red tape" or
bureaucracy.
Manage the number of interruptions employees have to endure while
trying to do their jobs.
Some organizations utilize exercise or "fun" breaks at work.
5.3.3 Leadership.
Employees are more satisfied when their managers are good leaders. This
includes motivating employees to do a good job, striving for excellence or just
taking action.
Actions:
Make sure your managers are well trained. Leadership combines attitudes
and behavior. It can be learned.
People respond to managers that they can trust and who inspire them to
achieve meaningful goals.
5.4.4 Work Standards.
Employees are more satisfied when their entire workgroup takes pride in the
quality of its work.
Actions:
Encourage communication between employees and customers. Quality
gains importance when employees see its impact on customers.
Develop meaningful measures of quality. Celebrate achievements in
quality.
5.4.5 Fair Rewards.
Employees are more satisfied when they feel they are rewarded fairly for the work
they do. Consider employee responsibilities, the effort they have put forth, the
work they have done well and the demands of their jobs.
Actions:
Make sure rewards are for genuine contributions to the organization.
Be consistent in your reward policies.
If your wages are competitive, make sure employees know this.
Rewards can include a variety of benefits and perks other than money.
5.4.6 Adequate Authority.
Employees are more satisfied when they have adequate freedom and authority to
do their jobs.
Actions: When reasonable:
Let employees make decisions. Allow employees to have input on decisions that will affect them. Establish work goals but let employees determine how they will achieve
those goals. Later reviews may identify innovative "best practices."
I.T. is a well known word, meaning Information Technology. The developed
countries of the world reached to the peak of information technology. SIBL have not
alternative to expand of information technology. Tight now, SIBL are facing uneven
competition with many foreign banks in the country. For this, SIBL will have to take
necessary preparation form this moment.
Information Technology and Flow of Information is become very important in the
present world. Social Investment Bank need to develop all their banking transaction
with the help of this technology and need to introduce online banking.
6.1 What is Online Banking?
Most people heard a lot about online banking but probably haven't tried it themselves.
People still pay their bills and deposit checks at bank’s branch, much the way their
parents did. They might shop online for a loan, life insurance or a home mortgage, but
when it comes time to commit, people can feel more comfortable working with his
banker or an agent they know and trust.
Online banking isn't out to change one’s money habits. Instead, it uses today's computer
technology to give people the option of bypassing the time-consuming, paper-based
aspects of traditional banking in order to manage finances more quickly and efficiently.
6.2 Origin of online banking
The advent of the Internet and the popularity of personal computers presented both an
opportunity and a challenge for the banking industry.
For years, financial institutions have used powerful computer networks to automate
millions of daily transactions; today, often the only paper record is the customer's receipt
at the point of sale. Now that its customers are connected to the Internet via personal
computers, banks envision similar economic advantages by adapting those same internal
electronic processes to home use.
6.3 Brick-to-click banks
Today, most large national banks, many regional banks and even smaller banks and credit
unions offer some form of online banking, variously known as PC banking, home
banking, electronic banking or Internet banking. Those that do are sometimes referred to
as "brick-to-click" banks, both to distinguish them from brick-and-mortar banks that have
yet to offer online banking, as well as from online or "virtual" banks that have no
physical branches or tellers whatsoever.
The challenge for the banking industry has been to design this new service channel in
such a way that its customers will readily learn to use and trust it. After all, banks have
spent generations earning our trust; they aren't about to risk that on a Web site that is
frustrating, confusing or less than secure.
Most of the large banks now offer fully secure, fully functional online banking for free or
for a small fee. Some smaller banks offer limited access or functionality; for instance,
you may be able to view your account balance and history but not initiate transactions
online. As more banks succeed online and more customers use their sites, fully functional
online banking likely will become as commonplace as automated teller machines.
6.4 Virtual banks
If anybody don't mind foregoing the teller window, lobby cookie and kindly bank
president, a "virtual" or e-bank may save very real money. Virtual banks are banks
without bricks; from the customer's perspective, they exist entirely on the Internet, where
they offer pretty much the same range of services and adhere to the same federal
regulations as corner bank.
Virtual banks pass the money they save on overhead like buildings and tellers along to
you in the form of higher yields, lower fees and more generous account thresholds.
6.5 SIBL will get advantage from online banking
Convenience: Unlike a corner bank, online banking sites never close; they're
available 24 hours a day, seven days a week, and they're only a mouse click away.
Ubiquity: If anybody out of state or even out of the country when a money
problem arises, he can log on instantly to his online bank and take care of
business, 24/7.
Transaction speed: Online bank sites generally execute and confirm transactions
at or quicker than ATM processing speeds.
Efficiency: One can access and manage all of his bank accounts, including IRAs,
CDs, even securities, from one secure site.
Effectiveness: Many online banking sites now offer sophisticated tools, including
account aggregation, stock quotes, rate alerts and portfolio managing programs
helps to manage all of assets more effectively. Most are also compatible with
money managing programs such as Quicken.
6.6 Feature that can be give in SIBL’s Online Banking
Making payments
Tracking payments
Stop payments by block cheque
Review personal account details, including balances and transactions
Schedule single and recurring transfers between eligible personal accounts
Pay bills online with the optional Online Bill Payment service
View images (front and back) of cleared checks and deposit slips
Receive e-mail notifications to alert to selected account activity
Schedule single one-time transfers or multiple transfers
Set up email notifications to be sent for balance amounts, specific checks cleared
or maturity dates
Transfer money
Open Accounts
Apply for loans
Make loan payments
7.0 SWOT ANALYSIS OF SIBL7.1 Strength:
Wide image
Quality of service
High Commitment of Customer
Financial strength
Efficient management
State of art technology- SWIFT
Human resource expertise
First rate working environment
Diversification of product
7.2 Weakness: Lack Motivation of Workers
No marketing promotion
Number of branches are high, so less supervision of head office
Nor equipped by modern technology
No online banking facility
Lack of communication technology
7.3 Opportunity: Increasing demand of customer finance
Liberalization in create industry
Great optimism in macro industry
Investment in infrastructure development
The Globalization of Business
Foreign investment
Evolution of computer technology
7.4 Threats: Merger & acquisition of bank
Competitor
Similar type of retail banking products
Certain Bangladesh bank’s rules & regulation
Political instability
Crime in country
8.0 FINDINGS
Whatever I found during my internship activities is really a practical work environment
that I didn’t find earlier. This practical knowledge will sure encourage me and give me
backing when I will work in such a financial organization. While working I always tried
to keep my eyes and ears in knowing as best as is possible about the dealings of the
officials with the clients. My novice observation found the findings:
The first finding really made me dishearten there. There is no client service officer in
the branch. For the lacking of such a service hand the clients often suffer the losing of
their vital moments standing before the busy officials for information about their
business.
Like most of the private banks, SIBL also imposes a target deposit for collection
upon its employees. Every employee has to go out for the purpose of deposit collection,
which they call “development purpose”. It is an effective method no question about it,
since many banks of our country rely on this method. But sometime affect negatively and
cause job dissatisfaction. Officers of the desk, where workload is very high, hardly get
the chance to go out for development.
8.1 Findings From Customer Satisfaction Questionnaire
Analysis 1: Age range * Quality of customer service * Service offered Cross tabulation
Note: Most of young people are not satisfied with service offer by SIBL and quality of
customer service. That for may be SIBL don’t offer new technology oriented product.
Analysis 2:
Strongly satisfied Satisfied Neutral Dissatisfied
Process of work
0
2
4
6
8
Co
un
t
Note: The process of work in terms of structured, easy and swift most are satisfied.
Analysis 3:Ratio Statistics for Work meet specification / Performance compared expected
Service offered
Quality of customer service
Total Superio
r
Very satisfactor
yAbout
average
Somewhat unsatisfacto
ryStrongly satisfied
Age range
36-401 1
Total 1 1Satisfied Age
range31-35
0 1 1
36-40 1 0
Total 1 1 2Neutral Age
range21-25
1 0 0 0 1
26-30 2 2 1 0
31-35 1 2 1 1
Total 4 4 2 1 11Dissatisfied
Age range
26-300 2 2
31-35 1 0
Total 1 2 3Strongly dissatisfied
Age range
31-351 1
GroupPrice Related
DifferentialCoefficient of
Dispersion
Coefficient of Variation
Median Centered
Strongly agree .933 .302 35.6%Agree 1.282 .633 91.8%Neutral 1.250 .600 84.9%Disagree 1.000 .000 .Overall 1.285 .686 122.5%
Note: most of peoples are satisfied with work meet specification and performance
compared to their expectation.
Analysis 4:
Ratio Statistics for Helpfulness / Friendliness
GroupPrice Related
DifferentialCoefficient of
Dispersion
Coefficient of Variation
Median Centered
1 1.133 .389 46.3%2 1.320 .435 63.8%3 1.000 .000 .0%4 1.083 .250 39.5%Overall 1.189 .356 54.6%
Note: SIBL’s employees are helpful, friendly to customers
Analysis 5:
Excellent Good Satisfactory Unsatisfactory
Implement of service
3.0
3.5
4.0
4.5
5.0
5.5
6.0
Co
un
t
Note: Most of people are satisfied with service implementation as they do the work in
required time and in specific form.
Analysis 6:
Descriptive Statistics
N Minimum Maximum Mean Std. DeviationQuality of customer service 18 1 4 2.00 .907
Valid N (listwise) 18
Note: Quality of customer service is average of SIBL.
Analysis 7:
Strongly satisfied
Satisfied Neutral Dissatisfied
Work meet specification
0
1
2
3
4
Co
un
t
Solve problem
quickly
Strongly agree
Agree
Neutral
Disagree
Note: SIBL’s employee solve customers problem quickly and meet their specification.
Analysis 8:
Descriptive Statistics
N Minimum Maximum Mean Std. DeviationBanking environment 18 1 3 2.00 .686Valid N (listwise) 18
Note: The banking environment is medium comparatively other private commercial bank.
8.2 Findings From Job Satisfaction Questionnaire
Analysis 1:
Duration of work * Job itself * Proud for org. Cross tabulation
Count Proud for org.
Job itself
Total Strongly satisfied Satisfied Neutral
Strongly agree
Duration of work
15<1 1 2
Total 1 1 2Agree Duration of
work<5
1 0 1
5-104 1
11-15 1 0
Total 6 1 7Neutral Duration of
work<5
0 1 1
5-10 1 0
11-15 0 1
15< 2 0
Total 3 2 5Disagree Duration of
work5-10
1 1
Total 1 1
Note: The employee who are older in SIBL they are satisfied on job and proud for
organization. But the young are less satisfied.
Analysis 2:
Very satisfactory About average Some what unsatsfactory
Degree of motivation
0
1
2
3
4
5
6
Co
un
t
Growth & dev.
possible
Strongly satisfied
Satisfied
Neutral
Dissatisfied
Note: The organizations degree of motivation and future growth & development is
satisfactory but it should be high to motivate the employees.
Analysis 3:
Descriptive Statistics
N Minimum Maximum Mean Std. DeviationPolicy & practice in org. 15 2 4 2.53 .743Valid N (listwise) 15
Note: With policy & practice, employees are more than satisfaction. They like the policy of the bank.
Analysis 4:
Satisfied Neutral Dissatisfied Strongly dissatisfied
Promotion strategy
0
1
2
3
4
Co
un
t
Level of salary
Satisfied
Neutral
Dissatisfied
Note: Compare to other private bank SIBL’s salary is less. So they are less satisfied with
salary as well as with the promotion strategy.
Analysis 5:
Nature of
supervision
High
Good
Satisfactory
Poor
Note: The nature of supervision is good in SIBL.
Analysis 6:
Descriptive Statistics
N Minimum Maximum Mean Std. DeviationTrainning & education 15 1 4 2.13 .915Valid N (listwise) 15
Note: SIBL offer training & education to employees regularly.
Analysis 7:
Quantity of work
Frequency Percent Valid PercentCumulative
PercentValid Strongly
satisfied1 6.7 6.7 6.7
Satisfied 9 60.0 60.0 66.7
Neutral 2 13.3 13.3 80.0
Dissatisfied 3 20.0 20.0 100.0
Total 15 100.0 100.0
Note: With the quantity of work they are satisfied. But some of employee do more work
that create pressure to them.
9.0 RECOMMENDATION
The banks are actually service organizations. The main objectives of the world famous
and successful banking organizations are to making of profit through addressing the
clients time to time with new pieces of service instruments. However my little experience
earned through this internship program took me to customers varying demands. I had
several frank discussions with the clients and officials, which has helped me to know
about the aforesaid findings and draw the following recommendation
Need to introduce Online banking immediately. If it is not possible to introduce
among all branches then introduce in Dhaka, Chittagong initially.
Social Investment Bank may also indulge in Tele Marketing. This will facilitate
them to expand their sale.
SIBL should pursue an aggressive marketing to come up into limelight. Campaign
in order to build up a strong image reputation among the potential customers.
Campaign such as ad in the newspaper & magazine, billboard, neon signs,
publicity message. SIBL can pursue promotion campaign with its customers
particularly the corporate clients to build up a strong rapport. TV ad is also a
major method for attracting the potential customers. As it is a old bank, a strategy
of exposing the bank to the public must be taken so that general people will aware
about the emergence and growth of the bank. Sponsor in organization’s picnic
and arrange or sponsor in cricket match can be method of advertise.
SIBL provides car facility to it’s high officials. Give ad of banks in those cars can
be method of marketing. Then people will see the ad in road and remember there
is a bank name “Social Investment Bank Limited”.
All the foreign banks and other private commercial bank has Customer
relation/support/service officer in all branches. They sit in front of branches they
solve customers problem, answer inquiry of customers etc. SIBL should appoint
customer service officer in all branches.
SIBL should improve its service quality, otherwise it will fall back of other
private commercial bank.
Enhance of remuneration package- The present compensation package at SIBL is
very unimpressive and not capable to attract quality personnel to fill up its
position. Many skilled and devoted officers of the bank are depressed with their
compensation package. The foreign banks and other private banks are pay more
than the SIBL. This is the time that the management should consider revise the
remuneration package in order to attract quality human resource.
SIBL can introduce health facility for their employees. It will motivate them
more.
People need identification. All of private banks has ID for their employee even in
government offices, they also use ID. It is another kind of marketing also. So
SIBL should print ID for their officer.
In foreign banks, they use printed Pay Order, Pay Slip, DD. It looks good and
gentle. So it will be good if print them.
SIBL should differentiate its services adopting the modern facilities and diversify
product.
Bank should provide advances towards the true entrepreneur with reconsidering
conventional system of security and collateral, moreover, the whole process
should be completed within an acceptable time.
The synergy of dedicated manpower, technology, market opportunity can lead the
organization to achieve the goal, a bank must establish and adhere to adequate
policies, practices and procedures for evaluating the quality of asset and the
adequacy of loan provision and reserve.
Social Investment Bank should always monitor the performance of its
competitors.
Evaluate customer’s needs from their perspective and explain logically the
shortcomings.
Use of effective management information systems.
To deliver quality service top management should try to mitigate the gap between
customer’s expectation and employee’s perception.
Use appropriate techniques in evaluating customer need and convenience
professionally.
Effective discipline for all branches.
10.0 CONCLUSION
Form the learning and experience point of view I can say that I really enjoy my internship
in Social Investment Bank Ltd at Foreign Exchange Branch form the very first day. I am
confident that this 3 (three) months internship program at Social Investment Bank Ltd.
will definitely help me to realize my further carrier in the job market.
Performance analysis of a bank is not sufficient within this short time of my internship
period to measure and express perfectly. But it is a great opportunity for me to get use to
with the operational environment of commercial banking of Social Investment Bank. I
have tried by soul to incorporate the research report with necessary relevant information
in my report.
Few loyal committed customer base, lack of modern and effective technology or
facilities, not enough skilled employee in some sector, considering all of these very
important factors. Social Investment Bank should always try to improve their service
level in every terms.
The marketing department should think freshly about their marketing objectives and
practices. Rapid changes can quickly make yesterday’s winning strategies out of date. As
a developing private bank in Bangladesh, Social Investment Bank shouldn’t allow their
client to get dissatisfied with their service. They have their competitors who actively
striving to take the advantages in every side.
To analyze the SIBL as a service oriented organization, branch operation, customer
satisfaction, job satisfaction and other factor finally it can be say that SIBL’s future
prospect in the financial sector is good. But it need to change some policy, management
should monitor all the work of branch level, take strong decision and implement them.
11.0 Appendices
QUESTIONNAIRE------------------------------------------------------------------------------------------------------------I am the student of MBA program at “Stamford University-Bangladesh” The questionnaire has been developed to organize a survey on “Customer Satisfaction of Social Investment Bank Limited”, for fulfilling the requirement of the course curriculum “ORE-102 Professional Orientation”. I appreciate your valuable time and support in discovering the answers of the questions.Information collected will be kept strictly confidential and shall be used for academic purposes only.------------------------------------------------------------------------------------------------------------1) Age range 21-25 26-30 31-35 36<
2) Type of business / serviceGov. service Private service Garments related businessPoultry related business Other business
3) Types of service(s) used in this bank (You can tick more than one) Clearing Local Remittance Foreign Remittance Advance Foreign Exchange
4) Services offered by SIBL Strongly Satisfied Satisfied Neutral Dissatisfied Strongly Dissatisfied
5) Quality of customer service you received from SIBL Superior Very Satisfactory About Average Somewhat Unsatisfactory Very Poor
6) The working process in terms of structured, easy and swift Strongly Satisfactory Satisfactory Neutral Dissatisfactory Strongly Dissatisfactory
7) The time required/ take employees to do work Strongly Satisfactory Satisfactory Neutral Dissatisfactory Strongly Dissatisfactory
8) The work meet the specification / required Strongly Satisfactory Satisfactory Neutral Dissatisfactory Strongly Dissatisfactory
9) What is your opinion about the banking environment of Social Investment Bank Ltd.? Strongly Satisfactory Satisfactory Neutral Dissatisfactory Strongly Dissatisfactory
10) Assessment of SIBL Actual Performance as compared to Expected
Surprising Good As expected Less than expected Poor
11) Assessment of Service provided by SIBL, with regard both to Attitude and Implementation Excellent Good Satisfactory Unsatisfactory Poor
12) Support staff that solves problems quickly Strongly Agree Agree Neutral Disagree Strongly Disagree
14) Overall, how satisfied are you with SIBL’s documentation? Very Satisfied Satisfied Neutral Dissatisfied Very Dissatisfied
15) The employees behavior is cordial, Courteous Strongly Agree Agree Neutral Disagree Strongly Disagree
16) Assessment of officers of SIBL Efficiency with regard to Service High Good Satisfactory Unsatisfactory Poor
17) Assessment of the Level of Professionalism shown by SIBL Personnel Excellent Good Satisfactory Unsatisfactory Lacking
18) Employees are always aware about their responsibility/work Strongly Agree Agree Neutral Disagree Strongly Disagree
19) Ethics in employees Very Satisfied Satisfied Neutral Dissatisfied Very Dissatisfied
20) Please rank the following parameter of employee’s of SIBL in 1-5 scale
1 2 3 4 5HelpfulnessFriendlinessExperienceSkills
21) Assessment of Communication with SIBL employees Excellent Good Satisfactory
Unsatisfactory Difficult
22) Staff are interested in your comments and suggestions Strongly Agree Agree Neutral Disagree Strongly Disagree
23) Employee’s are clearly explained when you don’t understand Always Sometime Never
24) Information provided by officer when calling by phone Strongly Satisfactory Satisfactory Neutral Dissatisfactory Strongly Dissatisfactory
25) Employee’s are answers questions in a confident and knowledgeable manner Always Often Regularly Sometimes Never
26) I would like to have your suggestions on how to improve SIBL’s services--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------.
QUESTIONNAIRE------------------------------------------------------------------------------------------------------------I am the student of MBA program at “Stamford University Bangladesh” The questionnaire has been developed to organize a survey on “Employee Satisfaction of Social Investment Bank Limited”, for fulfilling the requirement of the course curriculum “ORE-102 Professional Orientation”. I appreciate your valuable time and support in discovering the answers of the questions.Information collected will be kept strictly confidential and shall be used for academic purposes only.------------------------------------------------------------------------------------------------------------1) Age range 21-25 26-30 31-35 36<
2) Gender Male Female
3) How long have you worked for this organization <5 5-10 11-15 15<
4) Communication and information flow in your organization Strongly Satisfied Satisfied Neutral Dissatisfied Strongly Dissatisfied
5) Organization’s policy and practices Strongly Satisfied Satisfied Neutral Dissatisfied Strongly Dissatisfied
6) Inter-personal relationships Strongly Satisfied Satisfied Neutral Dissatisfied Strongly Dissatisfied
7) Feeling about the manner in which your efforts are valued Strongly Satisfied Satisfied Neutral Dissatisfied Strongly Dissatisfied
8) The job itself Very Satisfied Satisfied Neutral Dissatisfied Very Dissatisfied
9) Degree of motivation as far as job is concerned Superior Very Satisfactory About Average Somewhat Unsatisfactory Very Poor
10) Current career opportunities Strongly Satisfactory Satisfactory Neutral Dissatisfactory Strongly Dissatisfactory
11) The level of job security High Good Satisfactory Unsatisfactory Poor
12) The nature of supervision High Good Satisfactory Unsatisfactory Poor
13) The extent to which personal growth and development is possible Strongly Satisfactory Satisfactory Neutral Dissatisfactory Strongly Dissatisfactory
14) Fairness in the promotion strategy Strongly Satisfactory Satisfactory Neutral Dissatisfactory Strongly Dissatisfactory 15) Your level of salary w. r. to your experience Strongly Satisfactory Satisfactory Neutral Dissatisfactory Strongly Dissatisfactory
16) Reward for your well works Superior Very Satisfactory About Average Somewhat Unsatisfactory Very Poor
17) Providing bonus and facilities Strongly Satisfactory Satisfactory Neutral Dissatisfactory Strongly Dissatisfactory
18) Support for additional training and education Superior Very Satisfactory About Average Somewhat Unsatisfactory Very Poor
19) The methods of conflict resolution in your organization Strongly Satisfactory Satisfactory Neutral Dissatisfactory Strongly Dissatisfactory
20) The extent of your participation in important decisions Strongly Satisfactory Satisfactory Neutral Dissatisfactory Strongly Dissatisfactory
21) The organizational climate is very cool Strongly Agree Agree Neutral Disagree Strongly Disagree
22) The quantity of work allotted / expected to you Strongly Satisfactory Satisfactory Neutral Dissatisfactory Strongly Dissatisfactory23) I am proud to work for the organization. Strongly Agree Agree Neutral Disagree Strongly Disagree
24) What do you find most satisfying about working at the bank?-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------.25) What do you find least satisfying about working at the bank?-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------.26) I would like to have your suggestions on how to motivate/ satisfied employee’s of SIBL more-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------.
12.0 Bibliography
Books and Journals:
1. Social Investment Bank Annual Report, Issued on 2005
2. Operational manual
3. Lecture sheet serve from SIBL training institute
Internet:
1. www.sibl.com
2. www.bangladeshinfo.com
3. www.google.com