INTERNSHIP REPORT

ON

GENERAL BANKING SYSTEM OF

JANATA BANK&FOREIGN
EXCHANGE

INTERNSHIP REPORT
On
GENERAL BANKING SYSTEM OF JANATA
BANK&FOREIGN EXCHANGE

Submitted to:
Sagib Kumar Ghosh
Asst. Professor
Dept of Marketing Studies &
International Marketing
University of Chittagong
Submitted By
Md. Ataur Rahman
MBA Program
Session-2005/2006
Exam Role: 2006/64
Dept of Marketing Studies &
International Marketing
University of Chittagong

Date of Submission: 5th February 2009

Letter of Submission
Date: 9th February 2009
Sagib Kumar Ghosh
Asst. Professor
Dept. of Marketing Studies and International Marketing
University of Chittagong.
Sub: Submission of internship Report.
Dear Sir,
I am writing in connection with the internship report naming General Banking and
Foreign Exchange of Janata Bank Limited - A Study on JANATA Bank Limited ,
48, Motijheel Corporate Branch, Motijheel,Dhaka.
Under the state of the report, I have been given relevant information from the employees
of JANATA Bank Ltd. for collecting primary data. 1 also have gone through various
publications relating with Janata Bank Ltd. and its operation.
This report provides me an insight on the customer service department of Janata Bank. In
this report I have tried to find out some problem areas related to General Banking and
Foreign Exchange of Janata Bank Limited tried to find out some possible solution to
those particular problems.
I have enjoyed the preparation of the report because it provides me chance to put my
theoretical knowledge in a real life problem. If you need any kind of further information I
will be glad to provide accordingly.
I therefore pray & hope that you would be kind enough to me with accepting this report
and bless me heartily.
Sincerely yours
_________________
Md Ataur Rahman
M.B.A
Session: 2005-2006
Exam Roll: 2006/64

Todays world is changing very rapidly as new businesses are emerging by

placing the old ones. In this new millennium, people feel a growing uneasiness
about the future. Many countries suffer from chronic high un-employment, a
persistent deficit and deteriorating purchasing power. Like the other businesses,
banking practices are also changing at an incredible pace.
In the banking industry, community branch banks have long been the marketing
channels through which customers deposit money and make payments. But the
branch banks may soon become a thing of the past. As a result of advances in
bank automation from automatic teller machine (ATM) to telephone banking
services-fewer than half of bank customer (43%) in the United States now use
bank branches. Half of the countrys 5200 branch offices may disappear within a
decade.
Now it is not easy to operate the banking practices like traditional approaches of
1800 or 1900 A.D. Todays banks need to recognize that they are no longer
geographically bound, and that the introduction of electronic autobahn represents
a whole new delivery channel for financial services.
My honorable supervisor MR. Sajib Kumar Ghosh. Assistant Professor,
Department of Marketing, University of Chittagong.,) directed me all the way
to prepare this report. Without his help and kind co-operation it is not possible for
me to prepare this report.

Executive Summary
As the MBA program is a terminal degree, it is required to have an internship program
for a period of two months on a reputable organization where I can gain practical
experiences what I learned at my theoretical classes. I was keen to have my internship
program at banking sector that is why I joined Janata Bank Ltd.48, Motijheel Corp,
Branch as an internee for two months. They give me the opportunity to gain practical
knowledge and I work on General Banking System and Foreign Exchange department in
this branch by rotation. I have arranged my internship report on Banking activities . My
aspiration is to endow the readers of this report with knowledge, tools and impeding,
necessary to succeed in a Banking environment that is becoming increasingly and
inevitably global. Banking sector now-a-days plays an important role to develop the
economy of a country, especially developing country. It is worthless to say how much
important the banking sector to run the wheel of a countrys economy

In this report:
Chapter one: - I discussed about the General Banking system of Janata Bank, here I
discuss about the overall function of Janata Bank that is Account opening section,
Remittance section, Bills and clearing section, Loan and advance, Cash section, Mail
receive and dispatch section, Accounts Section From above I am in Account opening,
Remittance, Loan and advance and Account section. I know how to open an account,
how to send and receive remittance, How to loan are sanction and allocation, how the
Accounts section are adjust its various transaction.
Chapter Two: Foreign exchange department plays significant roles through providing
different services for the customers. Letters of credit is the key player in the foreign
exchange business. With the globalization of economies, international trade has become
quite competitive. Timely payment for exports and quicker delivery of goods is,
therefore, a pre-requisite for successful international trade operations. To ensure this
purpose, JANATA Bank Limited transmits L/C through SWIFT (Society for Worldwide
Interbank Financial Telecommunication) to the advising bank. JANATA Bank Limited is
providing different sorts of L/C services like L/C opening, Lodgment, BLC (bills under
letter of credit), Back to back LC etc. Foreign exchange department also provide foreign
remittance i.e. travelers cheque, foreign demand draft, endorsement of US$ in passport
etc.
Throughout the report I made my every effort to be as current and up-to-date as possible
in the presentation of theories, concepts and examples.

S/l No
1.

Title
Back ground/ Introduction
Objective of the Study
Methodology of the Study
Importance of the study
Limitation of the Study
Purpose of the report
About Janata Bank ltd.
Vision
Mission
Objective
Values
Business Philosophy
Long term Strategy
Business Area
Organizational Structure
History
Function
Branch network
Management System
Product and Services
General Banking:
Account opening Section
Remittance section
Accounts Section
Loans And Advance Section
Foreign Exchange:
Introduction
Summary of Foreign Exchange procedure
Foreign exchange Mechanism
Guarantee
Export Business (financing) procedure
Import business (Financing and procedure
Letter of Credit
Remittance
Summary and Suggestion for Foreign Exchange
Graphical Analysis
Acronyms
Bibliography
Findings
Areas need to be Improve
Possible Measure
Conclusion

Page No

1.1 INTRODUCTION
Todays fast growing companies need business banking services that fully meet
their expectations for speed, convenience, efficiency and security. To ensure their
optimum level of satisfaction, regarding their necessity for this type of affluent
banking services different types of local as well as multinational banks are coming
up with diverse and dynamic corporate banking services.
The term Bank originally referred to an individual or organization, which acted
as a moneychanger and exchanged one currency for another. According to
Prof. Sayers - Banks are institution whose debt usually referred to as Bank
Deposit- are commonly accepted in final settlement of other peoples debts.
According to the Banking Regulation Act, 1949 Banking means the accepting
money for the purpose of lending or investment of deposit of money from the
public repayable on demand or otherwise and withdraw able by cheques, drafts
order or otherwise.
Banks are playing a vital role in the economic progress of our country. Now-adays, the banks try to give priority in the perspective of our national interest. The
Banking Industry in Bangladesh is one characterized by strict regulations and
monitoring from the central governing body, the Bangladesh Bank. The chief
concern is that currently there are far too many banks for the market to sustain. As
a result, the market will only accommodate only those banks that can transpires
the most competitive and profitable ones in the future.
Bank perform the in dispensable task of intermediating between the two groups
and offering convenient financial service to surplus-spending individuals and
institutions in order to attract fund and these loaning those funds to deficitspending individuals and institutions. Another contribution of bank make their
willingness to accept risky loan from borrower, while issuing low risk securities to
their depositors. Bank also satisfies the strong needs of much customers liquidity.
It is true thus clear that the underlying principle of a business of banking is that the
resources mobilized through the acceptance of deposit must contribute the main
stream of funds, which are to be utilized for lending or investment purpose.

1.2 OBJECTIVE OF THE STUDY

The main objective of the study is to gain practical knowledge and to acquire knowledge
about the practice banking business. In addition, the prime objective of the study is to
know the existing banking business in JANATA Bank Ltd.. The other objectives are
given below:
As a part of the M.B.A. program.
To have an exposure on the banking environment of the Bangladesh.
To define the strategies regarding the strength and weakness of the bank.
To Identifying the difference between theory and practice overall Management
To know the general banking function, its procedures, rules and regulation
To know the activities of the foreign exchange department
To provide information about the BBL to the future researcher and readers who want to
know about this bank.

1.3 METHODOLOGY OF THE STUDY

The data needed for conducting the study has been collected from the primary
sources as well as secondary sources. In collecting the necessary data, care has
been taken so that all the variables that in some way cant affect the objectives of
the study. The information that I used in this study is collected by the following
way:
Primary Data Sources:
Direct working with officials of JANATA Bank Ltd.
Face to face conversation with client.
Practical deskwork.
Observation for the total internee period
Secondary Data Sources:
Manual of JANATA Bank Ltd.
Banks other published information.
Previous research books and journals.
JANATA bank website Browsing
The major portion of data sources has been collected from secondary data sources.
Information required formulating suggestions and recommendation have been
availed from related text and research papers.

1.4 IMPORTANCE OF THE STUDY

Modern Banking system does not execute the normal Banking activities. As a
service oriented organization the management should keep an eye on their retail
products and tout on these for sale. The Bank should design their products in such
a way that can cater to the needs of people of different classes. In fact Banks offers
Its various products (loans and other services). Thus this study focuses on these
products base marketing of financial products as how they are designed for which
segment of customers they are offered, what are their usual benefit, what are the
profits and changes to the customers, what type of promotion measures the Banks
take for marketing these services smoothly and they like.
Basically, this study is conducted to unearth The Performance of General
Baking& Foreign Exchange related activities taken by the Bank and degree of
customer satisfaction. The management should take new faces with innovative
features touting diversified benefits to attract the customers. As a result at that, the
practice of General Baking& Foreign Exchange at the Public Limited Bank have
been the concern this study with analysis of the Janata Bank Ltd. could help the
management to think about their performance whether the present design of the of
General Baking& Foreign Exchange practices are effective or they require to be
re-furnished. The management of this Bank can identify the major bottlenecks of
general Banking services and Foreign Exchange can attention, conviction and
purchase by using this report effectively.

1.5 LIMITATION OF THE STUDY

Objective of the practical orientation program is to have practical exposure for the
students. Our tenure was for two months only, which was somehow not sufficient. After
working whole day in the office it was very much difficult, if not impossible to study
again the theoretical aspects of banking.

Other limitations are as follows:

For the lack of our practical knowledge, some shortcoming may be available in
the paper.
The bank has naturally shown us some indifference connecting its most
confidential information.
The executives of Janata Bank Limited were too busy to spare time for the
internee.
The duration of our internship program is only 2 months. The allocated time is not
sufficient for us to gather knowledge and to make the study a complete and
fruitful one.
The study also suffered from inadequacy of data provided by Janata Bank Limited.

1.6 PURPOSE OF THE REPORT

To identify the historical background of the Janata Bank
To know the objectives behind their establishment.
To know General Banking and Foreign Exchange of Janata Bank
To know the objectives at present condition if they differ from the origin
To identify the major policies by which they are operating now.
To identify the facilities offered by the Janata Bank
To know whether Janata Bank adopted & coped with modern technological
advancement in the banking system.
To identify the social responsibilities of the bank as a social entity.

AN OVERVIEW OF
JANATA BANK LIMITED
2.1

ABOUT JANATA BANK LIMITED

JANATA Bank has already made significant progress. The bank has been graded

as a top class bank in the country through internationally accepted CAMEL rating.
The bank has already occupied an enviable position among its competitors after
achieving success in all areas of business operation.
JANATA Bank will promote broad-based participation in the Bangladesh
economy through the provision of high quality banking services JANATA Bank

will do this by increasing access to economic opportunities for all individuals and
business in Bangladesh with a special focus on currently under-served enterprises
and households across the rural urban spectrum. It believes that the pursuit of
profit and developmental goals is mutually reinforcing. Increasing the ability of
under served individuals and enterprises to build their asset base and access
market opportunities will increase the economic well being for all Bangladeshis
at the same time, this will contribute significantly to the profitability of the Bank.
JANATA Bank intends to set standards as the Market leader in Bangladesh. It will

demonstrate that a locally owned institution can provide efficient, friendly and
Modern full- service banking on a profitable basis. It will produce earnings and
pay out dividends that can support the JANATA activities of JANATA, the Banks
major shareholder. Development and poverty alleviation on a countrywide basis
needs mass production, mass consumption and mass financing. Bank goal is to
provide mass financing to enable mass production and mass consumption, and
thereby contribute to the development of Bangladesh.
JANATA Bank has been striving to provide best-in-the-class services to its

diverse range of customers spread across the country under its many branches all
over the country both in rural and urban area.
JANATA Bank is currently looking for ambitious, goal oriented, enthusiastic,

individuals for various business operations

2.2 VISION OF JANATA BANK

JANATA Bank will be a unique organization in Bangladesh. It will be a

knowledge-based organization where the JANATA Bank professionals will learn
continuously from their customers and colleagues worldwide to add value. They
will work as a team, stretch themselves, innovate and break barriers to serve
customers and create customer loyalty through a value chain of responsive and
professional service delivery. Continuous improvement, problem solution,
excellence in service, business prudence, efficiency and adding value will be the
operative words of the organization.
JANATA Bank will serve its customers with respect and will work very hard to

instill a strong customer service culture throughout the bank. It will treat its
employees with dignity and will build a company of highly qualified
professionals who have integrity and believe in the Banks vision and who are
committed to its success.
JANATA Bank will be a socially responsible institution that will not lend to

businesses that have a detrimental impact on the environment and people.

2.3 MISSION OF JANATA BANK

JANATA Bank will adhere to highly professional and ethical business principles

and internationally acceptable banking and accounting standards.

Every JANATA Bank professional will need first of all a commitment to
excellence in all that he/she does, a keen desire for success, a determination to
excel and a drive to be the best. They will individually and jointly learn
continuously from customers and professional colleagues around the globe to
improve the way they do business so that they are the best. They will walk that
extra mile with enthusiasm and empathy to serve our customers and to solve
problems together so that their customers succeed in their business and remain
loyal to the Bank. They will set up goals for ourselves and then exceed the goals
that we set up. They shall not accept failure.

2.4 OBJECTIVES OF JANATA BANK

JANATA Bank will be the absolute market leader in the number of loans given to

small and medium sized enterprises through out Bangladesh. It will be a world
class organization in terms of service quality and establishing relationships that
help its customers to develop and grow successfully

2.5

VALUES OF JANATA BANK

JANATA BANK LTD. holds the following values and will be guided by them as

they do their jobs.

Creating an honest, open and enabling environment.
Have a strong customer focus and relationships based on integrity, superior
service and mutual benefit.
Strive for profit & sound growth.
Work as a team to serve the best interest of their owners.
Relentless in pursuit of business innovation and improvement.
Value and respect people and make decisions based on merit.
Base recognition and reward on performance.
Responsible, trustworthy and law-abiding in all that they do.

2.6 BUSINESS PHILOSOPHY OF JANATABANK

LTD.
JANATA Bank Ltd, a full service commercial bank with Local and International

Institutional shareholding, is primarily driven by creating opportunities and

pursuing market niches not traditionally met by conventional banks.
Today JANATA Bank is one of the fastest growing banks in the country. In order
to support the planned growth of its distribution, network and for its various
business segments.
The reason JANATA Bank is in business is to build a profitable and socially
responsible financial institution focused on markets and businesses with growth
potential, thereby assisting JANATA and stakeholders build a just, enlightened,
healthy, democratic and poverty free Bangladesh. Which means to help make
communities and economy of the country stronger and to help people achieve their
dreams. They fulfill the purpose by reaching for high standards in everything we
do. For their customers, their shareholders, their associates and their communities
upon, which the future prosperity of their company rests

2.7 THEIR LONG TERM STRATEGY

Summed up in a single sentence, their long-term strategy is to go where the
market is. The SME market in Bangladesh is large. The report produced by the
Shore Bank team, (Ronald Grzywinsky, Mary Houghton and Lynn Pikholz) and
the independent consultant, Kaiser Zaman, indicates that the market size would
be over hundreds of billions of takes. They quote:
As a result of the achievements of the micro-credit providers, Bangladesh now
has an hour glass shaped banking market in which credit and other limited
financial services are valuable to both very large and very large and very small
businesses and very wealthy and very poor individuals. While there is well
known informal system that provides credit to businesses, virtually nothing is
available from either banks or micro finance provider to the million the middle
businesses and individual- who are severely constrained in their ability to produce
and save for lack of access to financial resources and services. Until modern,
competitive financial services are readily available including credit in amounts,
terms and conditions that small can access, Bangladesh will not be able to create
the large middle class that is a prerequisite to social stability.

2.8 BUSINESS AREAS OF JANATA BANK LTD.

There are mainly three major business areas where the BRAC Bank Ltd. is
performing with high reputation. These areas are:
General Banking
Foreign Exchange
Small & Medium Scale Enterprise (SME)
Large Scale Industries
Agriculture Sector
Transport Sector
Financing In Housing Sector& Land Developing

Finance in Home Appliance

Since I completed my internship on General Banking& foreign exchange, it would

be convenient for me to focus General Banking& Foreign Exchange of Janata
Bank.

2.9 ORGANIZATIONAL STRUCTURE

OF JANATA BANK

Board of Directors

Managing Directors (MD)

Deputy Managing Directors (DMD)

General Manager (GM)

Deputy General Manager (DGM)

Assistant General Manager (AGM)

Senior Principal Officer (SPO)

Principal Officer (PO)

Senior Officer (SO)

Officer

History of the Bank

Janata Bank Limited, one of the state owned commercial banks in
Bangladesh, has an authorized capital of Tk. 800 crore (approx. US$
116.79 million), paid up capital of Tk. 259.39 crore (approx. US$ 37.87
million) and reserve of Tk.292.67 crore (approx. US$ 42.73 million). The
Bank has a total asset of Tk. 24406.11 crore (approx. US$ 3562.94
million) as on 31st December 2007. Immediately after the emergence of
Bangladesh in 1971, the erstwhile United Bank Limited and Union Bank
Limited were nationalized and renamed as Janata Bank Limited.
Janata Bank Limited operates through 848 branches
including 4 overseas branches at United Arab Emirates. It
is linked with 1198 foreign correspondents all over the
world.
The Bank employs more than 13(Thirteen)
thousand persons.
The mission of the bank is to actively participate in the
socio- economic development of the nation by operating a
commercially sound banking organization, providing credit
to viable borrowers, efficiently delivered and competitively
priced, simultaneously protecting depositors funds and
providing a satisfactory return on equity to the owners.
The Board of Directors is composed of 11 (eleven)
members headed by a Chairman. The Directors are
representatives from both public and private sectors.
The Bank is headed by the Chief Executive Officer &
Managing Director, who is a reputed banker.
The corporate head office is located at Dhaka with 35 (thirty five) Divisions

Functions of the Bank

Janata Bank provides complete range of services to its customers both domestic and
foreign. Rendering of General Banking Facilities & Utility Services, Deposit
Mobilization, providing various Credit Facilities including Working Capital to Industries,
Investment, Outward & Inward Remittances, Financing Import & Export etc. are the
major functions performed by Janata Bank. In order to provide better services to its
Customers and Correspondents Janata Bank is now more organized to handle
sophisticated operations through a well-trained and efficient Manpower. Recently Janata
Bank has entered into computer operations to provide prompt and efficient services to the
Customers.
Janata Bank has been involved in Micro financing since 1973 through its vast branch
network spread all over the country. Bank has launched these micro credit
programs/projects on its own initiative and also in collaboration with local and foreign
agencies.

Branch network
Janata Bank is one of the largest Nationalized Commercial Bank of Bangladesh.
Presently the bank has been functioning with a network of total 904 branches. The Bank
has been functioning with a net work of Total 897 Branches including 4 Overseas
Branches in U.A.E. Besides Janata Bank, has, at present 780 Foreign Correspondents
abroad. It has 44 Authorized Dealer Branches and 29 Branches to deal with Wage
Earners' Remittances

Management system
The Bank's present Board of Directors comprises of One Chairman and Six Directors
appointed by the Government.

Products and Services

Financing IT sector
Financing of industry
Ready cash
Windows for SMEs
Loan to travel agencies
Loan to diagnostic center
NRB escrow account
NRB gift cheque

Introduction:
Out of three major sections General Banking is important one. General banking
is the heart of total banking system. Through this section bank has to receive and
disburse money, to develop banker customer relationship by opening different
types of account and providing prompt services to the customers. This
department collects money from the depositor and uses these deposits to earn
profit.

FUNCTIONS OF GENERAL BANKING:

The functions of general banking department of SOUTHEAST Bank of
Bangladesh Ltd. are as follows:
1. Maintenance of Deposit A/Cs:
Saving accounts./ Current accounts./cash credit deposits/Fixed deposits/short term
deposits/margin deposits/Bond deposits/F.C. Bond deposits.
2. Receipts & payment of cash.
3. Handling transfer transactions.
4. Operations of clearing house.
5. Maintenance of accounts with Bangladesh Bank & other banks.
6. Collection of Cheques & Bills.
7. Issue and payment of Demand Drafts, Telegraphic Transfers
and payment orders.
8. Executing customers standing Instructions.
9. Maintenance of safe Deposit Lockers.
10. Maintenance of Internal Accounts of the banks.
11. Reporting to head office about daily position.
12. Saving all transaction record in computer.
13. Closing and transfer of different types of accounts.
14. Keeping good relation with valued customer.
15. Providing necessary support to the customers

SECTIONS OF GENERAL BANKING:

During my practical orientation in JANATA Bank, 48, Motijheel Corp. Branch,
Motijheel, Dhaka, it came to the observation that general banking section is
divided with four areas. These are:
Account opening section
Remittance section
Bills and clearing section
Cash section
Mail receive and dispatch section
Accounts Section

Account Opening Section:

One of the vital sections under general Banking is the account opening section.
Banker customer relationship begins through this section. Various tasks are
performed in this section. Such as:
Opening of different types of account.
Issue of checkbook.
Transfer and closing of account.
Enquiry of account.

Various types of account offered by JANATA Bank:

JANATA Bank offers various types of account to its different types of customer.

These are as follows:

Current deposit (CD) account
Savings bank (SB) account
Short-term deposit (STD)
Fixed deposit (FDR)
JBDS (Janata Bank Deposit Scheme)
MDS (Medical Deposit Scheme)
EDS (Education Deposit Scheme)& SPS

Current Deposit (CD) Account:

A current account is an account, which is generally opened by business people for

their convenience. A current account is a running and active account,
which may be operated upon any number of times during a working
day. There is no restriction on the number & amount withdrawals
from current a/c. It does not allow any interest on this account
Opening Amount/ Initial Deposit
Service Charge (yearly)
Minimum Balance Requirement

Tk. 500
Tk. 100
Tk. 5000

Current a/c may be individual, joint / partnership or can be formed

any name. It provides the following facilities:
Overdraft facility.
Other facilities like collection of checks, transfer of money, rendering agency
and general utility services.

Savings Bank (SB) Account:

This deposit is intended primarily for small-scale savers. The main object of this account
is promotion of thrift. Savings account is meant for those who want to save a certain
amount of their income and earn interest on that for future needs. All features are more or
less like that of CD a/c except for some restriction that is imposed by the bank. Number
of withdrawals over a period of time is limited. The withdrawing amount is not to exceed
25% of the total balance. This A/C mainly open a person name
Initial deposit requires to open a savings account is TK.200.
Minimum balance of TK. 200 should maintain in this account.
Interest rate is5.5%
One cannot withdraw money not more than two times in a week.
To withdraw more than Tk 20000 seven days notice is required.
Service charge is not fixed.

Restrictions:
Customer can not withdraws money more than twice in a week ..
If customers draw money more then 25% of the balance at a time then no
interest is given for that n month.
If interest accrued less than TK. 200/- for six month then no interest is given
to customer.

Fixed deposit receipt (FDR) account:

In this category are included the deposit with the bank for a fixed period which is
specified at the time of making the deposit. Such deposits are therefore called fixed
deposits or term deposits.
A fixed deposit is repayable on the expiry of a specified period, chosen by the depositor
to suit his purpose and to enable him to get back money as and when he needs it. The
fixed deposit may be made for 3,6,12,24 or 36 months. As the date of repayment of fixed
deposit is determined in advance. The banker need not keep more cash reserves against it
and can utilize such amount more profitably. The banker therefore offers higher rate of
interest on such deposits the depositor parts with liquidity for a definite period. Fixed
deposits have grown in importance and popularity in our country during recent years.
When a matured FDR is withdrawn, the principle amount along with the interest amount
(deducting 10% tax from the total) is paid to the client.

Fixed Deposit

Interest Rate

3Month to less then 6

Month
6Monthto Less then 12
Month
12 Month to Less then 24
Month
2 Years And Above
Prime Rate: (Applicable
only for Govt. Org)
6Month to Less then 12
Above (12 Month)

7.00%
7.50%
7.75%
8. %
7.50+Prime rate (PR)
General rate+PR

Minimum TK. 5, ooo require to open a fixed deposit account.

Service charge TK. 200 realized half yearly on customers account.

Various types of Savings Schemes offered by Janata

Bank:
Janata Bank Deposit Scheme (JBDS)
Special advantage with this scheme is that after the scheduled period the client can
withdraw the full amount or can draw pension on monthly basis. Besides the client
can open account in his name in any branch.

Procedure for operation of Janata Bank Deposit Scheme (JBDS) :

The applicant should be of minimum 18 years age and Bangladeshi national.
The account holder can appoint one or more nominees.
On the death of the account holder his / her nominee can withdraw the whole amount of
money.
The account holder can change or cancel his nominee through a written notice.
On the death of the account holder, the nominees will be entitled to withdraw the deposit
according to the instruction of the account holder.
The account becomes inoperable on the death of the account holder.
The account under this scheme should be opened within the 10 th day of any month against
deposit of the first installment in cash.
Monthly installment: TK.500, 1000,2000,5000,10000,20000
Tenure:

10 Years.

The monthly installment must be paid by the 10th day of every month.
In case of delay a fine @TK. 2 per day of defaulted installment will be charged and the
fine must be paid with the installment.

Features of the Janata Bank Deposit Scheme (JBDS):

Monthly Installment Quantum
TK.

Money at the end of 10

years TK.

500
1000

94609
188218

2000

375435

5000
10000
20000

937088
1873176
3745352

Total Amount=Principal amount+Interest+Bonus amount

The money will be paid out on maturity according to the table above, but Tax / Duty and
other charges may be adjusted from the amount in the account.

Education Saving Scheme (ESS):

Client can nominate their children and open not more than three accounts.
Procedure for operation of Education Saving Scheme (PSS):
The applicant should be of minimum 18 years age and Bangladeshi national.
Monthly installment:

TK.500,

1000,2000,3000,4000,5000,6000,7000,8000,9000&10000.
The monthly installment must be paid by the 10th day of every month.
In case of delay a fine @ TK. 2 per day of defaulted installment will be charged and
the fine must be paid with the installment.
The account under this scheme should be opened within the 10 th day of any month
against deposit of the first installment in cash.

Features of the Education Saving Scheme (ESS) account:

It may be 4 years, 6 years,8 years& 10years.
Installments are TK.1000, 2000,3000,4000&5000
The maturity amount varies its time & installment.
The money will be paid out on maturity, but Tax / Duty and other charges may be
adjusted from the amount in the account.

Medical Deposit Scheme (MDS):

The applicants / depositors should be of minimum 18 years age, being of sound mind,
and a Bangladeshi national.

Features of the MDS Account:

The deposit under SBDS will be affected after expiry of each period as per the chart
provided below:
Monthly Installment
(MIQ) TK.
500
1000
2000
3000
4000
5000
6000
7000
8000
9000
10000

Quantum

Money at the end of 5 years

period. TK.
38225
75425
149900
224350
298799
373249
447700
522149
596599
671089
745898

The money will be paid out on maturity according to the table above, but Tax / Levy/
Excise and other charges as applicable will be adjusted from the amount.

SPS Account:
Now a days it is obsolete
Documents to be obtained for different types of account:

When anyone comes to open an account he has to submit some documents to the
banker. Different types of document needs for different customer. Some common
documents require for all types of account are:
Introduction recommendation.
Specimen signature card.
Account opening agreement form.
Two copies of Photograph of account holder and two copies of nominee (if
any).
Deposit slips book.
Cheque-book requisition slip.
Letter of mandate authorizing another person to operate the account on behalf
of the account holder.
Special instruction either or survivofor joint account

Certain types of documents are needed for special customers. These are:
Proprietorship Account:
Document requires for proprietorship business to open an account are:
Introducers with account number.
Valid trade license from Dhaka City Corporation, Attested copy should be
submitted.
Receipt of Tax revenue copy from Dhaka City Corporation.

Partnership Account:

Documents to be obtained for opening an account of partnership firm are:

Trades license or board resolution.
Deeds of partnership signed by all partners.
Signature of at least two witnesses.
Two copies photograph of each partner.
Partnership resolution signed by all partners to open account.
Resolution must indicate authorized person who operates the account.

Limited Company Account:

Document required for Limited Company account to open an account are:

Memorandum and Articles of Association of Company.
Power of Attorney
Resolution of Board of Director.
Certificate of incorporation.
Certificate of commencement of business in case of public limited company.
List of director.
Two copies of passport size photograph of account operators.
Others: name director s with signature, minutes of board of director.

Remittance Section:
The major function of commercial Banks is mobilization of fund. Other than this, banks
provide ancillary services to its clients. Clients need to remit money from one place to
another for their business or other purposes. Banks fulfill this need of customers by
means of remittance service. Money can be remitted domestically or internationally,
which known as local remittance and foreign remittance.
There are three ways of transferring fund domestically. The modes of transferring
funds are:
Pay- Order (PO).
Demand Draft (DD).
Telegraphic Transfer (TT).
Mail Transfer (MT)
SDR
Pay Slip

Payment Order / Pay Order (P.O)

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

Characteristics of P.O
The issuing branch and paying branch are same.
Application for payment within the clearinghouse area of the issuing branch.
This may be open or can be crossed.
Charge
Demand Draft (D.D)
This is an instrument through which customers money is remitted to another
person/firm/organization in outside the clearinghouse area from a branch of one bank to
an outstation branch of the same bank or to a branch of another bank (with prior
arrangement between that bank with the issuing branch). This is an order instrument in
which the issuing branch gives instruction to the payee/drawer branch to pay certain
amount of money to the order of certain person/firm/organization. Commission, vat and
postage is charged on issue of DD entries for issuing DD.

Telegraphic/ Telephonic Transfer (T.T)

This is a mode of transfer of customers money from a branch of one bank to another
branch of the same bank through telegraphic/telephonic message. The issuing branch
used to send the message of such remittance through telegraph/telephone adding certain
code number or test number on the basis of test key apparatus developed by the
concerned bank for its different branches. The drawer and the payee is required to have
account with the bank in order for this transaction to take place. TT is issued against cash,
check, letter of instruction etc.
Characteristics of T.T
Issued by one branch to other branch and message is tale-communicated.
Remittance/ transfer of money is done through tested tale-messages.
Remittance is affected on the basis of tested message.
Test key apparatus is required.
Charge is Tk.50
Security Deposit Receipt (SDR)
It is used only for tender, auction etc.
Pay Slip:
Used internally
.

Introduction:

Accounts division is the nerve center of a bank. As all transactions carried by a bank is
being legalized as far as accounting is concerned. If transactions were not recorded
properly there would be dis-equilibrium in state of the bank. There can be imbalance in
the cashbook thus the whole mechanism will collapse. The regular tasks of department
are:
To record all transactions in the cash book.
To prepare daily fund position, weekly position, periodic statement of affairs.
Prepare necessary statements for reporting purpose.
To pay all expenditures on behalf of the branch.
Make salary statements and pay salary.
Branch to branch fund remittance and supporting accounting treatment.
Prepare statements for customer.
Publishing basic data of the branch etc.

General practices of an Accounts Department:

BASIC maintains slip system of accounting.

Scrutinizing Vouchers:

At the day end all vouchers are sent to the accounts department by the respective
department from where vouchers are originated. On the next day an `activity report is
received from computer department. The activity report is the detail statement of all the
transactions carried by the branch of a particular date. It is the summary of all account
position. It also displays cash, clearing, transfer position, individual deposit account
position etc.

Provisioning:

Accounts department make provision for different deposit accounts. Provisioning means
keeping the record of expense, which has occurred by non-cash way. This department
also made depreciation of assets that is one kind of non-cash expense

Statement Prepared in Account Section:

The following weekly/ monthly/ quarterly and half-yearly statements should be

submitted to Central Accounts Division of Head Office:
SL
No
01
02
03
04
05
06
07
08
09

Particulars of Statement

Period

Last date of submission to HO.

Weekly Position

Weekly

By every Saturday

S.B.S.1

Monthly

10th next month

Sector Corp.

Monthly

10th next month

S.B.S.2

Quarterly

5th next month

Quarterly Statement of Scheduled

Bank
Statement of Bearer Certificate of
Deposit

Quarterly

7th next month

Quarterly

5th next month

Half Yearly

7th next month

Monthly

1st next month

Monthly

1st next month

Statement of Deposit Landing

and Borrowing
Business Performance report
SLR Statement

Introduction:

The

two main functions of a bank are borrowing money from public by accepting

deposit and lending to the public for the development of trade, commerce, industry and
agriculture. Banks give some interest to depositors for deposit and take higher interest for
lending. The margin is the banks profit. So, lending is by far the most important function
of modern bank. The strength of a bank is, thus, primarily judged by the soundness of its
advances. A wise and prudent policy in regard to advances is considered an important
factor inspiring confidence in the depositors and prospective customers of a bank.
Advances not only play an important part in gross earnings of bank, but also promote the
economic development of the country. All types of business activity includes trade,
industry and agriculture have to depend on bank finance in one form to offer. Bank by
channeling accumulate savings of the nation into productive uses, help both the
depositors and the borrowers. JANATA BANK disburses advances in two broad areas.
These are industrial credit and commercial credit scheme.

Industrial credit:

Industrial

credits are given for industrial purpose. The sector where some process

involves is called industry, such as shape of material. Industry can be two types:
1. Manufacturing industry- Cement, steel factory etc.
2. Service industry- Hotel, transport etc.

Industrial credit is given for two purposes:

Term loan - fixed assets financing.
Working capital - current assets financing sport, etc

Commercial Credit:
Commercial credits are given for trading purpose. Where no process involved. JANATA
Bank lends support towards development of trade, business and other commercial
activators of Loans and Advances:

The making of loans and advances has always been prominent and profitable function of
a bank. Sanctioning credit to customers and others out of the funds at its deposal is
one of the principle services of a modern bank. Advances by JANATA Bank are
made in different forms. Such as:
Overdraft
Cash credit
Term loan
Bills Portfolio
Packing Credit
Bank Guarantee
Commercial Loan

Overdraft (OD):

The overdraft is a kind of advances always on a current account operated upon by

cheque. The customer may be sanctioned a certain limit upon which he can overdraw his
current account within a stipulated period. Here, withdrawal or deposits can be made any
number of times of the convenience of the borrower provided the total amount withdrawn
does not, at any time exceed the agreed limit. Interest is calculated and charged only on
the actual debit balance on daily (produced) basis. While in a current account cheques are
honored if the balance is in credit, the OD arrangement enables a customer to draw over
and above his own balance up to the extent of the limit stipulated.
For example, if there is a credit balance of TK. 10,000/= in a customers current account
and an OD limit of TK. 10, 000/- is sanction to the customer, then he can draw cheques
up to TK. 20,000/-. There is no restriction unlike in case of loan, on drawing more then
once. OD facilities are generally granted to businessman for expansion of their business.

It is essential that a letter of continuity must be obtained in case of OD account. The letter
makes the customer liable to the final balance of his account by confirming the
intervening debits and credits in his account.
JANATA Bank has the following types of OD:
SOD against financial obligation
SOD against FDR
SOD general
Others

Year wise Overdraft Position of the

JANATA Bank,48, Motijheel Corp. Branch.
(Amount in Million Tk.)

Year
SOD against financial obligation
SOD against FDR
SOD general
Total

2007

2006

2005
-

Cash Credit (C.C):

A Cash Credit is an arrangement by which the customer is allowed to borrow up to a
certain limit. This is a permanent arrangement and the customer need not borrow the
sanctioned amount at once, but draw the amount as when required. He can put back any
surplus amount, which he may find with him. Thus cash credit is an active and running
account to which deposit and withdraws may be elected frequently. Interest is charged
only for the amount withdrawn and not for the limit amount. If customer does not use the
cash credit limit to fulfill extent, the bank makes a commitment charge. Cash Credit
provides elastic form of borrowing since the limit fluctuates according to the needs of
businessman. Cash Credit is favorite mode of borrowing by large commercial and
industrialists for meeting their working capital requirements. The limit of cash credit is
allowed generally for one year.
Interest rates for Cash Credit:
Cash Credit
C.C.(Industrial) Working capital requirement
C.C. Commercial/ Trade

Interest Rates
13%
13%

JANATA BANK provides three types of Cash Credit (CC) facilities. These are ----

Cash Credit (Hypothecation)

Cash Credit (Pledge)
Cash Credit(Export)
Year Wise Cash Credit Position of the
JANATA Bank, 48, Motijheel Corp. Branch
(Amount in Million Tk.)
Year
Cash Credit (Hypothecation)
Cash Credit (Pledge)
Cash Credit(Export)
Total

2007
423
1
424

2006
336
0.60
336.60

2005
207
207

Term Loan:
The loan which, is repayable in fixed fixture date, is called term loan. This loan is made
to large well-established business enterprise for financing capital expenditure.
Businessman requires this loan for purchase or renovation of funds, buildings, and
factory sheds, and machinery etc. the loan is to be repaid for according to a scheme of
repayment by installments. Installments may be monthly, quarterly, semiannually,
annually depending on type of loan. This type of is given for long term, mid term, short
term and requires large investment. Market study and environment is necessary before
allowing such loan. SOUTHEAST charges 13% interest for such loan.
Year Wise Loans (General) Position of the
JANATA Bank,48, Motijheel Corp. Branch
(Amount in Million Tk.)

Year
Loans General

2007
211

2006
66

2005
56

Staff Loan:
JANATA Bank provides loan facilities to its employees. Interest rates vary on the
nature and objective of loan. Basically staff loan is disbursed for staff house building
purpose and household consumption. In case of staff loan repayment procedure is
followed on monthly basis.
Year Wise Staff Loan Position
JANATA Bank, 48, Motijheel Corp. Branch
(Amount in lac Tk.)

Year
Staff Loan

2007
40

2006
7

2005
9

Bills Portfolio:
Bank can allow credit to customers in the way of purchasing and discounting bills. When
client submit bills, a margin (covering also the interest on the loan) amount is deducted
from the face value of the bill and the rest is provided to the client .Bills can be local or
foreign. This may be clean or documentary. Documentary bill is supported by various
documents such as --Local Bill Purchase supported by Documents [LBP (D)]
Foreign Bill Purchase supported by Documents [LBP (D)]
Year Wise Bills Portfolio Position of the
JANATA Bank, 48, Motijheel Corp. Branch

(Amount in Million Tk.)

Year
Local Document Bills Purchase
Foreign Document Bills Purchase
Total

2007
15
5
20

2006
8
4
12

2005
5
3
8

Packing Credit:
Packing Credit (P.C.) is provided to the client against confirmed export orders (Export
L/C) covering maximum 90% of the value of the order. As the name implies this type of
loan is provided to procure & process the raw materials for making finished goods to be
exported. This loan is provided at reduced interest rate as per Bangladesh Banks
instruction. However, Bank can avail refinance subsidy from Bangladesh Bank to
compensate the reduced interest rate. The packing credit is adjusted through the export
proceeds.
The Export L/C becomes primary security for the loan. The loan is sometimes
collateralized by equitable mortgage of property. In any case Export Finance Guarantee
from Sadharan Bima Corporation has to be obtained before the lain is disbursed.
Year Wise Packing Credit Position of
JANATA Bank, 48, Motijheel Corp. Branch
(Amount in lac Tk.)

Year
Packing Credit

2007
21

2006
10

2005
8

Bank Guarantee:
Bank Guarantee is also a non-funded facility provided to the client. Bank on
behalf of the client undertakes to pay agreed amount of money at certain time if
client fails in due performance. Bank Guarantee is generally provided in Lieu of
earnest money for bidding in tender by the client (Bid Bond) or as guarantee for
due performance of contracted work (Performance Guarantee). Janata Bank
generally provides guarantee facility for maximum one year. Usually 10% - 25%
margin is obtained from the client against the guarantee amount

Commercial Loan:

This type of credit facilities is mainly related to post import financing. It is given for
short period. PAD, LIM, LTR are fall in this category. A detail about these credits has
been discussed in foreign trade par

PAD:

This means payment against documents. After getting documents from negotiating bankopening bank informs importer for clear the documents and bank creates a loan account.
30 days are allowed for this type of loan. Bank charge interest @ 13% in this credit
facility. The Bank that establishes the letter of credit is bound to honor its commitment to
pay for import bills when these are presented for payment, if drawn strictly in terms of
the letter of credit. The foreign correspondent, which negotiates the documents, gets
payment as per stipulated reimbursement terms of the L/C to the debit of the account of
the L./C opening banks F. C account. The opening bank lodge the shipping documents in
their books and responds to the debit advice originated by foreign correspondent to the
debit of payment against documents (PAD) account. In fact, the amount stands as
advance to the importer, which is adjusted by delivery of documents against payment, or
by allowing post import finance such as LIM or LTR.

LIM:

Loan against Imported Merchandise (LIM) is connected with import facilities. As per
pre-arrangement or under forced situation when the client is unable torture the LC
documents, bank then clear the imported goods from the customs and store it in banks
warehouse. LIM is given for maximum 60days within which customer has to adjust
liability and take delivery of the imported goods from the banks custody. Bank charges
interest @ 13% on this credit facility. Loan against imported merchandise is allowed
against imported merchandise storing the same in banks custody. The bank through its
approved clearing agent clears the merchandise. The advance is adjusted by delivering
the goods against payment by the importer. The documents remain with the Bank.

LTR:

Loan against Trust Receipts (LTR) is also post-import finance facility. This type of
facility is given to creditworthy and selective customer. In LTR goods are sent to the
customers godown after clear from Port. Customer has to adjust liability within 30,60,90
days or the days determine by the client and banker of taking such facility. Bank charge
interest @ 13% for this credit facility.

Year Wise Commercial Loan Position of the

JANATA Bank, 48, Motijheel Corp. Branch
(Amount in Million Tk.)

Year
Payment Against Documents (PAD)
Loan against Trust Receipts (LTR)
Total

2007
128
312
440

2006
225
166
391

2005
40
71
111

Year Wise Loans Position of the

JANATA Bank 48, Motijheel Corp. Branch
(Amount in Miillion)
Different Types
of Loan
Overdraft
Cash Credit
Loans General
Staff Loan
Packing Credit
Bills Portfolio
Commercial Loan
Total

2007

Distribution

2006

Distribution

In %
210
424
211
4
2
20
440
1311

16%
32%
16%
0.30%
0.20%
1.5%
34%
100%

2005

In %
242
335
69
1
1
11
391
1050

23%
32%
7%
1%
37%
100%

123
207
56
1
1
7
111
506

Distribution
In %
24%
41%
12%
1%
22%
100%

Documents required for procuring Loan Proposal:

Following are the client should supply the documents:
TIN certificate of the client.
Bank statement for last two years.
Up to date trade license.
Present liability position of the company and owners.
Name and Address of the Sister concern
Export and Import performance.
Personal information in a prescribed from.
Balance sheet for the last three years
Memorandum & Article of association signed by the Managing Direct
Profile of directors or partners
Procedures of Loan Sanction and Disbursement:
Bank follows some necessary steps to sanction loan to borrower. This procedure mainly
applicable for sanctioning and disbursing term loan although other advancing procedures
are also follows nearly the same procedure

First Information Sheet

Loan Application From

Credit Investigation

Loan Appraisal

Credit List Proposal

Sanction Letter

Loan Documentation

Loan Disbursement

Follow Up

Loan Adjustment

Recovery of Loan

Credit Investigation and Loan Appraisal:

After getting Loan application from the customer, bank started appraisal of the loan.
For this bank
First collect necessary information about the client.
And then with help of this information bank appraisal the loan application.

Collection Of Credit Information:

For the purpose of assessing the creditworthiness of a borrower a banker has to collect
the above-mentioned information from a number of sources. Every bank maintains a
Credit investigation department at its head office and main offices in larger cities to
collect information regarding the financial position of its borrowers. At other centers,
branch mangers perform credit investigation. The credit information is collected through
the following sources:
Borrower: Most of the information may be secured from the borrower directly. The
loan application form seeks basic information about the borrower and his business. The
banker may examines his accounts books and note his past dealings with other banks or
parties :
Market Reports: Banks try to find out the creditworthiness of the party by making
enquiries from the brokers, traders and businessmen in the same trade or industry.
Their individual opinions may differ but a balanced opinion may be formed about the
borrower on the basis of the feelings expressed by a number of such persons.
Exchange of Credit Information amongst Banks: It is the practice and
customary usage amongst banks to exchange credit information relating to the
constituents in their mutual interest. But the credit reports exchanged by banks are
brief and superficial. They are in general and guarded terms. Banks are reluctant to
exchange meaningful credit information because they apprehend that legal protection
available to them will be lost if more facts are divulged to the enquiring banks. A
study Group appointed by the Reserve Bank concluded the existing legal protection
is adequate to permit banks to exchange meaningful credit information on their
constituents. The study Group, therefore, suggested that:
i) There should be free and frank exchange of credit information amongst the banks;
and
ii) There should be qualitative change in the contents of credit reports, which should
highlight the management practices of the customers, their behavioral pattern with
their buyers, sellers and with the bank instead of concentrating entirely on the worth
of assets and financial strength. Similarly, the customers ability, business acumen
and integrity and willingness to honor commitments should also be covered in the
Credit Reports.

iii) A central agency, to be called Credit Information Trust, i.e., CREDIT be

established for organized collection, collation, storage and exchange of credit
information amongst the banks.
Loan appraisal:
With the help of the above information the bank appraise the loan proposal by the
following points:
Credit Worthiness of the client on the basis of 5 Cs.
i) Capital, ii) Character, iii) Capacity, iv) Control and v) Collateral
Background of the Clients family.
Nature and scope of the business of client.
Market reputation of the client.
Turnover of the business of client.
Dealings of client with the bank and turnover in clients bank account.
Clients business experience.
Worth & property of the client.
Location of business/firm/industry.
Amount and Purpose of the loan.
Turn over of the sister concern ( if any).

Risk Factors:
Before Loan settlement the Banker must carefully remember the Risk Factor. The
following situation and circumstances may tell upon the companys performance.
a) Unforeseen situations and circumstances leading to bad investment.
b) Sudden change in social economic environment.
c) Continued political unrests leading to disruption in banking business.
d) Loans provided to the parties may turn bad to some extent leading to reduction of
profit, which may require the Bank to make higher provision. This will result in lower
profits.
e) If contingent liability then net profit will be adversely affected. It will also
adversely affect the cash flow of the Bank.

f) Banking sector particularly nationalized commercial Bank have 40% Bad Loan but in
private sector Bank, this rate comparatively lower at present. In this event if investment
turns bad this percentage to up therefore bear risk.
g) In the event of introduction of any new laws/regulations by any regulatory body of the
country may lead to risk.
h) Potential changes in global or national policy may impose risk

Preparation of Loan Proposal and Sanction:

Branch if satisfied with the client and want to sanction credit to the client then it prepare
a loan proposal with all details as discussed above and send to the higher authority for
approval.
Credit proposal is include with the following:
Application of the borrower
Stock Report
Undertaking from the borrower
Valuation report of Collateral
If higher authority approved then branch will sanction credit to the client.

Necessary documents for Loan Settlement:

For SOD against F.D.R/P.S.P./Saving Scheme/General Loan:
a) Demand promissory (D.P.) note.
b) Letter of Arrangement.
c) Letter of Lien.
d) Letter of C

For SOD General, Cash Credit (C.C.) Hypothecation:

a) Demand promissory (D.P.) note.

b) Letter of Arrangement.

c) Letter of Hypothecation.

d) Letter of continuity.

Supplementary Arrangement.

For Staff Loan:

a) Demand promissory (D.P.) note.

b) Letter of Undertaking.

c) Letter of Authority.

d) Letter of installment.

e) Letter of Disbursement.

f) Letter of Arrangement.

g) Letter of Hypothecation.
Hypothecation/pledge

h) Supplementary letter of

For Public Limited Company:

With the above documents Personal Guarantee of all directors is

Loan Disbursement
Loan is allowed for a single purpose where the entire amount may be required at a time
or in a number of installments within a period of short span. After disbursement of the
entire loan amount, there will be only repayment by the borrower. A loan once repaid in
full or in part, cannot be drawn again by the borrower. Entire amount of loan is debited to
the loan A/C in the name of the customer and is paid to him through his STD/CD
Account. Some times loan amounts are disbursed in dash.

Follow up and recovery of the Loan:

After disbursement of lone to a client it is the sole duty of the disbursing branch to follow
up loan, whether it is properly utilized or not. So report on development and submit the
same to the manager/sanctioning authority. If loans properly follow up by the disbursing
branch, then the risk of default will minimize.