Chapter One

INTRODUCTION

1.1 Introduction
Economic history shows that development has started everywhere with the banking system and its contribution towards financial development of a country is the highest in the initial stage. Schumpeter (1933) regarded the banking system as one of the two main agents (other being entrepreneurship) in the whole process of development. eynes also emphasi!ed the role of banking services in the process of economic development of a country" while S#E was addressing the #ouse of $ords regarding %nternational and &onetary System ('uoted in Sharma 19()). &oreover *le+ander ,erschenkron (19-.) in his popularly known /,erschenkron0s #ypothesis1 e+plained the banking system as the key role player at certain stage of the industriali!ation process. &odern banking system plays a vital role for a nation0s economic development. 2ver the last few years the banking world has been undergoing a lot of changes due to deregulation" technological innovations" globali!ation etc. 3hese changes in the banking system also brought revolutionary changes in a country0s economy. 4resent world is changing rapidly to face the challenge of competitive free market economy. %t is well recogni!ed that there is an urgent need for better" 'ualified management and better5trained staff in the dynamic global financial market. 6angladesh is no e+ceptions of this trend. 6anking Sector in 6angladesh is facing challenges from different angles though its prospect is bright in the future. 3he course under 6.6.* program designed with an e+cellent combination of theoretical and practical aspects. 3he whole course is divided into eight (() semesters of - months each. *fter the completion of (th semester consisting of theoretical e+posure" the students are sent to different organi!ation to obtain some practical e+posure in different sectors which would help them in taking up more professional courses in &.6*. *s a student of 6.6.*" % have assigned to 6.6. *venue branch" 3he 7ity 6ank $td. for my internship. *s &8 program director directed us to present the report in different way that will be based on the personal observations from each department. % have described each department % have worked in by following way9

(1) Understanding:
%n this part % have tried to make ac'uaintance with the departments % have worked of this branch.

(2) Things are done here

%n this part % have tried to see the things what are being done in each department of the branch.

(3) Personal observations:

%n this part % have tried to present my personal observations from each department of this branch. % had an opportunity to be ac'uainted with the practical banking prevailing in 6anga 6andhu *venue 6ranch" 3he 7ity 6ank $td. 3he knowledge" which has been ac'uired in my %nternship 4eriod" % have tried my level best to show in this report.

1.2 Work schedule

De art!ent "otation: ()*+ $, T-+ D+P)"T*+(T ,eneral 6anking 7redit department .<5=)5=195=-5=1(5=-5=3ill now ,"$* T$ (U*.+" $, D)/# .-

#chedule #ource9 Suggested by 6ranch &anager" 7ity 6ank $td" 6. 6. *venue 6ranch.

1.3 $b%ectives o& the stud'

3he ob:ective of the study is to gather practical knowledge on banking system and operation. 3his internship gives us a chance to co5ordinate with the theoretical knowledge and the practical e+perience. 3he following are of ob:ective for internship in bank9 3o apply theoretical knowledge in the practical field. 3o have e+posure to the functions of general banking section. 3o analy!e the service procedure of 4rime 6ank $td. 3o know the banking operation. 3o know the area of ,eneral 7redit. 3o know the process of loan disbursement. 3o know the process of loan collection. 3o know the documents of credit. 3o know the import ; E+port finance procedure.

1.0 1overage o& the stud'

%n this report" three ma:or areas in commercial banks have been covered which are9 (a) (b) (c) ,eneral banking section. 7redit section. >oreign e+change section

1.2 *ethodolog' o& the stud'

>or smooth and accurate study every one has to follow some rules ; regulations. 3he study input were collected from two sources9

(a) Pri!ar' sources

(i) (ii) (iii) (iv) (v) 4ractical desk work >ace to face conversation with the officer ?irect observations >ace to face conversation with the client 7onsultation with the >ollowing 4ersons

&@. &d. *bdul #alim" Senior Aice 4resident ; &anager" 76$" 66 *venue 6r. &r. *.S.& Shokrana" Aice 4resident" 46$" 66 *venue 6r. &r. &ohammad &orta:a" Senior E+ecutive 2fficer" 7redit ?epartment" 76$"66 *venue 6r. &d. Sohel @ana" 2fficer" *ccounts Section.

(b) #econdar' sources

(i) (ii) (iii) (iv) (v) (vi) *nnual report of 7ity 6ank $td. >iles ; >olders &emos ; 7irculars ?aily diary (containing my activities of practical orientation) maintained by me" Aarious publications on 6ank" Bebsites"

?ifferent circulars sent by #ead 2ffice and 6angladesh 6ank.

<

1.3 4i!itations o& the "e ort

3here were some problems while % have undergone the internship program. * wholehearted effort was applied to conduct the internship program and to bring a reliable and fruitful result. %n spite of having the wholehearted effort" there e+its some limitations" which acted as barrier. 3he limitations were 555 3he study was limited only to the 7ity 6ank $imited" 6.6. *venue 6ranch. *nother 4roblem was time constraints. 3he duration of my internship 4rogram was only two months. 6ut this time is not enough for a complete and fruitful study. 3he 6ank was a busy one having heavy rush of people" whom officers need to deal with. So allocation of time for an internee is very much tough for the officers of the bank. Sometimes % was assigned to do some :obs without e+plaining why this work is to be done. 3his situation has created a lot of problems to understand why a specific function is being performed.

Chapter TWO

OVERVIEW OF THE BANK

2.1 +volution o& the Word 5.ank6:

3he word bank originated from %talian word /6anca1 which means long bench. %n ancient time %talian Cews merchant used to do business of lending money by sitting on the bench. %t is assumed that the word /bank1 derived from the word 6anca. 3o meet the e+pense of war of 11D1 one type of credit certificate was launched in %taly at an interest rate of )E. %t was called as &onte in %talian language and 6anke in ,erman language when ,erman language was widely used in %taly. *s a result the word 6anke gradually changed to the word 6anca from which the word 6ank originated.

2.2 The +!ergence o& *odern .anking:

3he linguistics and etymology suggests an interesting story about banking origins. 6oth the old >rench word /6an'ue1 and the %talian word 6anca were used centuries ago to mean a bench or moneychangers table. 3his describes 'uite well what historians have observed concerning the first bankers" who lived more than .=== years ago. 3hey were money changers" sitting usually at table or in a small shop in the commercial district" aiding travellers who came to town by e+changing foreign coins for local money or discounting commercial notes for a fee in order to supply merchants with working capital. 3he first bankers probably used their own capital to fund their activities" but it was not long before the idea of attracting deposit and securing temporary loans from wealthy customers became a source of bank funding. $oans were then made to merchant0s shippers and landowners at rates of interests low as - percent per annum to as high as <( percent a month for the riskiest venturesF &ost of the early bank was ,reek in origin. 3he banking industry gradually spread outward from the classical civili!ations of ,reece and @ome into northern and western Europe. 3he early bank in Europe were places for safe keeping of valuable items (such as gold and silver bullion) as people were fearing loss of their asset due to war" theft" or e+propriation by government. Bhen colonies were established in Gorth and South *merica" old world banking practices were transferred to the new world.

2.3 .anking in .angladesh

Since early 6ritish rule" the history of banking in 6angladesh territory shows that the traditional trade5networks developed before the banks invaded rural areas. *nd the banking services have slowly flourished in 6angladesh territory. Even today" in many places" D

moneylenders provide credit services. Small shopkeepers and businessman use informal credit at high interest rate" traditional &aha:an"s money lending business gradually declined due to e+pansion of bank and the micro credit programs of G,2s" 7ooperative banks and government agencies.

Public #ector .anks:

?uring the liberation war in 19D1" the economic" political" and social systems including the banking system were severally damaged. *t that time" all big and medium financial institutions e+cept two small banks had their head office in the Best 4akistan. 3he non56engali owners and managers of the financial establishments that operated in East 4akistan had abandoned them. *fter independence in 19D1" the new government had to take over management and ownership of all such institutions. 3he bank Gationali!ation 2rder 19D. was issued to nationali!e banks and financial institutions (e+cept those incorporated abroad) in order to control chaos in the field of ownership" party bureaucracy" the intelligentsia" and pressure group. 6y several orders

si7 nationali8ed co!!ercial banks ((1.)9 one industrial bank (.#.)9 one agricultural
bank (.:.)9 and one industrial develo !ent &inancial institution (.#"#) were created 3he banks and financial institutions" which originated during the 4akistan period and were merged" and renamed and functioning after independence of 6angladesh. %n the year 19(3" the government allowed private sector to participate in the banking business. 3he 4ubali 6ank and the Httara 6ank were denationali!ed in 19()" due to non5profitability. 3his action reduced the number of G760S to four. Such restructuring of public sector banks was in order to play their role in industry" agriculture" e+porting" self Iemployment etc.

Private co!!ercial banks:

3aking advantage of the liberali!ation policy of the government regarding participation of private sector in the banking business" a number of private banks were established in Iand I after 19(3. Bith the emergence of private banks in 6angladesh" a competitive situation in the sector has been created. Gow there are ). commercial banks in 6angladesh. 3he emergence of private banks has added a new dimension to the banking system in 6angladesh. 3he private commercial banks show a steady growth in terms of number of branches deposits and advances.

,oreign banks:
3he state bank of %ndia opened one branch Culy 5September 19D). %n 19D)" the four foreign banks operating in 6angladesh were9 *merican E+press %nternational 6anking 7orporation" ,rind $ays 6ank" 3he 7hartered 6ank and the State 6ank of %ndia. Gow there are more than 1) foreign banks. 3he historical process shows the influence of the various social groups in the governance of the country and the banking systems. ?uring the 6ritish regime banking was concentrated only in the areas of commercial and administrative importance. Bith the independence of %ndia and 4akistan" the banking sector had to be reshaped. 3he government of 4akistan had to take ma:or initiatives for the growth and e+tension of banking services to the different sectors of the economy and also to different regions. %ndependence of 6angladesh was yet another ma:or change in the banking sector. %mmediately after independence of 6angladesh" banks started their operations under full government ownership. $ater" some of the banks were denationali!ed and the government allowed banks to be established in the private sector. 6anking operations have been diversified and a number of speciali!ed banks were established. ?evelopment finance institutions also e+ist to supplement the baking sector in an effort to boost the economyJ government has been following a pragmatic policy relating to the banking sector in 6angladesh. ?espite many odds and problems now facing banking sector" it is e+pected that it would be able to meet up the challenges ahead" particularly of the nest century.

2.4 COMPANY STATUS 2.0.1 .ackground o& 1it' .ank 4i!ited

7ity 6ank $td started its operations on .( &arch 19(3 with an authori!ed capital of 3k .== million divided into ."==="=== ordinary shares of 3k 1== each and paid up capital of 3k 3< million" of which 3k 3= million was paid up by its promoters and the remaining amount by the government of the 4eopleKs @epublic of 6angladesh. %n .===" the bankKs paid up capital rose to 3k 1-= million" of which 3k (= million was subscribed by the sponsorsLpromoters and the remaining amount by the general public. 2n 31 ?ecember .===" the bankKs reserve fund was 3k .-3.1 million as compared to 3k 1.)... million in 199). 6ut there was shortfall in total capital

ade'uacy ratio of the bank during 199D5.=== as per 6%S (6ank for %nternational Settlement) standards to be followed by banks operating in 6angladesh. 3he management of the bank is vested in a 135member board of directors. 3hat includes the chairman and a vice5chairman. 3he managing director is the chief e+ecutive. 3hree deputy5 managing directors" three e+ecutive vice presidents" fourteen vice presidents" fifty5four assistant vice presidents and some other employees of different categories assist him. 3he total number of employees of the bank stood at 1"(<) at the end of business year .===. 3hat time the bank had D- branches throughout the country. Si+ty5one of them were urban and 1) were rural. %t had - regional offices established at the - divisional townsLcities. 3he bank conducts all types of commercial banking activities. 7ore businesses of the bank include deposit mobili!ation" lending and foreign e+change dealings. *t the end of the initial year of its operations in 19(3" the total deposits were 3k 3.=.. million" which rose to 3k 11"-=3.. million in .===. 3otal and net loans and advances of the bank amounted to 3k 9"9-<.million and 3k D"-9(.. million respectively in ?ecember .===. 3he broad economic sectors in which the bank provides lending are agriculture (=.(=E)" term loans to large and medium scale industries (1(E)" housing (1.D)E)" working capital and commercial lending (3)E)" import (9.9E)" e+port (1=.)E) and others (.<.=)E). 3he 'uality of the bank;s lending assets deteriorated due to huge non5performing loans. 3he ratio of its classified loans was <3E in 199D" <=.()E in 1999 and 39.)DE in .===. 3otal assets of the bank including off5balance sheet items accounted for 3k 3="(=-.9 million in .===" when its gross earning assets and li'uid assets were valued at 3k 1<"((<.3 million and 3k -"<3=.( million respectively. %n 1999" the total foreign e+change business handled by the bank stood at 3k 9"(3(.3 million (import (DE). ?ealings in foreign remittances were only 3k (1) million during 1999. 2ut of its D- branches" 19 are now authori!ed to deal in foreign e+change. 3he bank has correspondent relationships with .)) bankLbank offices and other financial institutions abroad. 3otal investment of the bank at the close of the year 1999 was 3k 1"<9..( million" of which 3k 1"1<= million was in
3@E*SH@8 6%$$ s.

2ther investments included those in shares and

securities. 3he income on all investments that year was 3k 1=1.1 million. 3he bank earned an operating income of 3k 1"3)-.) million and incurred operating e+penses of 3k 3D).D million in business year .===. Get profit of the bank before deducting ta+ and provision for classified

1=

loans stood at 3k 1((.3 million in the same year. *fter appropriation of operating profit with accumulated losses of 3k 1.1.- million" the bank still suffered a cumulative loss of 3k --.D million up to ?ecember .===.

Source9 %nternet

11

2.0.2 <oals and ob%ectives o& The 1it' .ank 4i!ited

3o build up strong pillar of capital. 3o promote trade" commerce and industry. 3o discover strategies for achieving systematic growth. 3o improve and broaden the range of product and services. 3o develop human resource by increasing employment opportunities. 3o enhance asset of shareholders. 3o offer standard financial services to the people. 3o create congenial atmosphere so that the client becomes interested to deal with the prime bank limited. 3o keep business morality. 3o develop welfare oriented banking service. 3o offer highest possible benefit to customers. *s to its position among its counterparts is held high to let the viewers cast their very first look at it. 3o carry on the business of discounting and dealing in e+change of specie and securities and all kinds of mercantile banking. 3o provide for safe5deposit vaults and the safe custody of valuables of all kinds. 3o carry on business as financiers" promoters" capitalists" financial and monitory agents" concessionaires and brokers. 3o act as agents for sale and purchase of any stock" shares or securities or for any other momentary or mercantile transaction. 3o establish and open offices and branches to carry on all or any of the business abroad and within the country provided prior permission is obtained from 6angladesh bank.

2.0.3 $ eration
3he 7ity 6ank $imited" since its inception is an %35focused 6ank. 3he bank has by now a network of DD branches strategically located in different cities. *ll the branches are functioning in computeri!ed environment and integrated through Bide *rea Getwork (B*G) .3he

1.

branches are full Ifledged units and can provide all commercial and investment banking service raging from small and medium enterprises to big business conglomerates and houses. 3he 6ank always tries to reduce its dependence on interest earnings by giving more emphasis on the fee I based income through introduction of capital market operation and $easing .3he 7apital &arket operation includes 4ortfolio &anagement" %nvestors *ccount" Hnderwriting" &utual >und &anagement etc. 3he 6ank introduced modern system of $easing 2peration as in practice with 6anks in all other countries of the world. 3he $ease >inance portfolio of the bank is the first of its kind in a 7ommercial 6ank in 6angladesh. Entrepreneurship ?evelopment 3raining is arranged to impart operational skill and modern techni'ue of management to introduce new entrepreneurs in the field of industriali!ation on the basis of participatory finance. 7ity 6ank $imited is one of first few 6angladeshi 6anks who have become member of SB%>3 (Society for Borldwide %nter56ank >inancial 3elecommunication). SB%>3 is a member owned co5operative" which provides a fast and accurate communication network for financial transactions such as letters of 7redit" >und transfer etc. 4rime 6ank $imited is operating branches on both interest based 6anking and %slamic Sariah based 6anking. 3he %slamic Sariah based 6anking is completely different >rom the conventional one. 3he 6ank is &aintaining separate set of accounts for %slamic 6anking branches according to the standard adopted by >inancial *ccounting and *uditing organi!ation for %slamic >inancial %nstitution. 7ity 6ank $imited will try to achieve e+cellence in customer service. 3he customer is most important for them. 3heir policy is customer driven. 3he 6ank has introduced Special Savings SchemesJ Special 7redit Scheme for the benefit of the low5income group" especially for the self Iemployment of the educated youth.

2.0.0 *ission and vision o& 1it' .ank 4i!ited

3he effort of 7ity 6ank $imited is focused on delivery of 'uality service in all areas of banking activities with the aim to add increased value to shareholders investment and offer highest

13

possible benefits to the customers. 3here must have the mission as well as vision what should back every efforts of the organi!ation. as it is said that / mission without vision is a daydream and vision without mission is a nightmare1.

*ission:

To contribute to the socio=econo!ic develo !ent o& the countr'. To attain highest level o& custo!er satis&action through e7tension o& services b' dedicated and !otivated tea! o& ro&essionals. To !aintain continuous gro>th o& !arket share ensuring ?ualit'. To !a7i!ise bank6s ro&its b' ensuring its stead' gro>th. To !aintain the high !oral and ethical standards. To ensure artici ative !anage!ent s'ste! and e! o>er!ent o& hu!an resources. To nurture an enabling environ!ent >here innovativeness and er&or!ance is re>arded.

@ision:
To be the leading bank in the countr' >ith best ractices and highest social co!!it!ent.

1<

2.4.5 Managerial Hierarchy of City Bank Ltd.

7hairman Aice 7hairman ?irectors &anaging ?irector *sstt. Secretary ?eputy &anaging ?irector Senior E+ecutive Aice 4resident E+ecutive Aice 4resident Senior Aice 4resident 7onsultant >irst Aice 4resident Aice 4resident Senior *ssistant Aice 4resident *ssistant Aice 4resident

3op &anagement

E+ecutive $evel &anagement

&id $evel &anagement

>irst *ssistant Aice 4resident Senior E+ecutive 2fficer E+ecutive 2fficer 4rincipal 2fficer

Cunior $evel &anagement

Senior 2fficer &anagement 3rainee 2fficer Cunior 2fficer *ssistant 2fficer

2.0.3.#$WT )nal'sis
>rom my practical observation" % get the following Strength opportunity" weakness and threat (S2B3).

1)

#trength:
%t has well reputation in the market Got engaged in unfair business practice. 7oncentrated market. 2fficers are highly educated. E+ecutives are highly 'ualified and e+perienced. 6ank has many attractive deposit schemes. Bell5furnished and *ir5conditioned 6ank. Efficient management practice in the 6ank.

Weakness:
?eposit is lower than advance. Short time e+perience of the 6ank. 2fficer has limited e+perience and not enough trained. $ong5term credit is not sufficient. Small market shares in 6anking5business.

ortunities:
7an increase the credit scheme. 7an increase the advertising of the 6ank. 4rivate 6anks becomes more reliable to local public. ,ovt. has banned some MCatiya Sanchaya patra0.

Threat:
o 3here are many competitors in the market. o 7ompetitors have more deposit. o @uling ,overnment is not conducive in the viewpoint of the 6ank. o ,ovt. imposes ta+ and A*3 on profile. o ,ovt. pressures to reduce interest rate

1-

2.0.A Per&or!ance "evie> o& The 1it' .ank 4td.

Per&or!ance at a <lance (a!ount in !illion T:.):
Particulars
Authorized Capital Paid-up- Capital Statutory Reserve !ther Reserve Retai"ed #ar"i"$s %otal Shareholders #&uity (eposits )oa"s a"d Adva"*e +,port #-port +"vest,e"t %otal Asset %otal +"*o,e %otal #-pe"se Pro.it /e.ore Provisio" %otal Provisio" Pro.it /e.ore %aProvisio" .or %a0#% Pro.it A.ter %aRetur" o" #&uity 123 Retur" o" Asset Capital ade&ua*y Ratio 123 Credit (eposit Ratio #PS 1%4.3 /oo5 6alue Per Share 1%4.3 ,ar5et 6alue Per Share1%4.3 0o. o. e,ployee #-e*utive !..i*ers Sta..s 0o. o. /ra"*hes A7( /ra"*hes 0o. o. Shareholders

2001
400.00 160.00 160.00 10 .12 80.00 50 .12 1718 .'8 1272'.22 1 50 .20 '82.10 1'77.'5 20726.40 174'.07 1 41.68 407. ' 1840.80 222.5' 142.5' 80.00 17.272 0.422 6.6 2 742 50.00 14.45 266.80 1688 141 '58 58' 76 20 256

2002
400.00 240.00 17 .10 240.60 1 0.00 78 .70 1'68 . 0 1 884.'0 12262.60 621 .50 2511.40 24481.60 2120.8' 156'.66 551.2 485.60 65.6 52. 0 1 . 2.072 0.062 8.162 712 5.55 26.54 00.00 1751 142 1011 5'8 76 20 027

2003
400.00 240.00 21 .81 240.60 102.78 7'7.21 20046. 1 14778.55 172'2.74 771'.70 7'.26 2 6'8.56 2475.04 17''.17 675.87 472.41 20 .46 1'0.00 1 .46 1.702 0.062 6.562 742 5.61 2'. 7 227.65 16'2 164 '4 585 77 20 247

2004
1750.00 480.00 78.42 240.60 78.4 1417.47 222 6.'6 17027.84 17'0'.'4 121'8.6' 161. 8 26 75.56 2707.84 1785.7' '22.05 ''.00 82 .05 442.7' 80.26 4. 42 1.522 '.782 772 7'.22 2 0.70 877.75 180 178 10 2 5' 77 20 486

2005
1750.00 720.00 604.61 240.60 .17 1'58.40 0647.8 2 26. 4 21 6 .21 18218.'7 648.27 5 0 .74 476.85 2227.'' 1248.86 117.' 11 0.' 5'0.00 540.' 2.052 1.752 '.6 2 762 75.1 272.00 770.75 182' 20 1022 604 77 20 5678

Source9 *nnual @eport .==)

1a ital B "eserve

1D

76$ as a first generation bank has strengthened its capital base by raising the authori!ed capital to 3 . 1D)= million and paid up capital to 3k.D.= million. 3he capital ade'uacy ratio was 9.-) at the end of .==).

De osits
3he deposit as at 31st ?ecember .==) rose to 3k.3=-<( million registering a growth of 3(E over preceding year (3k....3- million).

?eposit mi+ of bank as on 31st ?ec. .==) stood as follows9 #.4 (o T' e o& De osit
1. .. 3. <. ). 7urrent and others Savings Short term >i+ed deposit Scheme Total

)!ount
)=9=.<( )(.=.<. .3.<.9= 1.<)1.-) <9-=.3( 3D30A.E3

in C o& share
1-.-1 1(.99 D.)9 <=.-3 1-.1( 1DDC

!illion Tk.

4oans and advances

3he 6ank continued to reengineering process to raise its assets portfolio by implementing new credit policy with diversified and well structured asset portfolio and separation of responsibilities and segmentation of divisions. 3he outstanding amount of loans and advances as on 31st ?ecember .==) stood at 3k..33.- million with a record growth of 3k.-.9( million (3DE). 3he outstanding amount at the same period of previous year was 3k.1D=.D million. 7ity bank $imited has a plan to maintain the following proportions to design and maintain credit portfolio9

1(

Table: Com a!a"#$e Po%#"#o& o' Se("o! W#%e E) o%*!e

A% o& ,-.-2../ S+. No. Se("o! Amo*&" 0#& m#ll#o& TK.1 TK. 2 o' %3a!e

1 2 3

Agriculture L & M Industry (Term Loan) "or#ing $a%ital & $ommercial lending '(%ort )inance

171.00 35 2.30 &73!.7! 37*2. 0 0! .*1 22 . * 27!1.7 2,,24.,.

0.73 15.1! 37. 7 1*.13 17.55 0.!* 11.!7 -.....

5 * 7

Im%ort )inance +ousing ,t-ers To"al

19

(on=Per&or!ing 4oan
Gon5performing loan dropped to 3k.133. ().D1E of total loan portfolio) million only from an amount of 3k.1(== (1=.<(E of total loan portfolio) million of previous year.

%n million 3k.

?uring .==) a significant amount of 3k.3=3 million was recovered from non5performing loan.

.=

I! ort
%mport growth in .==) is19E(3k.1D91= in .==< to 3k..13-3 in .==)).

+7 ort
3he bank achieved significant growth (<9E) in .==).

.1

2.0.E P"$DU1T# )(D #+"@I1+# $, 1.4

Since commencement of banking operation" 7ity bank $imited has not yet only gained enormous popularity but also been successful in mobili!ing deposit and loan products. 3he bank has made significant progress within a very short time period due to its dynamic management and introduction of various consumer5friendly loan and deposit products. *ll the products and services offered by the bank can be classified under two ma:or heads9

De osit Products
&onthly 6enefit ?eposit Scheme >i+ed ?eposit Scheme Saving ?eposit *ccount(3hree Stage Saving Scheme) G>7? (Gon @esident >oreign 7urrency ?eposit *ccount) G%3* (Gon @esident %nvestor0s 3aka *ccount)

4oan Products
7onsumers0 7redit Scheme $ease >inance #ire 4urchase Small and &edium Enterprise 7redit Scheme $oan *gainst Shares and Securities #ouse 6uilding >inancing Scheme >inancing Scheme >or 7ontractors 7omputer Software >inancing Scheme 7ity 6ank &aser 7redit 7ard 7ity 6ank A%S* 7redit 7ard Borking 7apital >inancing %mport >inancing E+port >inancing %ndustrial >inancing

$ther #ervice

..

7onsistent with the modern edge and competing in the competitive market" 7ity 6ank $imited has introduced some innovative banking services that are remarkable in a country like 6angladesh. 3he services offered by the bank are as follows9

$n=line .anking
3he bank has set up Bide *rea Getwork (B*G) across the country within its all branches to provide on5line branch banking facility to tits valued customers. 3he service named />inacle 7ore1 has opened up several possibilities of improved customer services. Hnder this facility client of one branch are able to do banking transaction at any other branch of the bank. 3he bank hosted its Beb Site (www.citybank.com) to facilitate dissemination of information about the banking services and facilities of 7ity 6ank $imited all over the world.

In&or!ation Technolog' in .anking $ eration

4rime 6ank $imited has adopted automation in banking operation from the first day of its business. 3he main ob:ective of this automation is to provide efficient and prompt services to its valued clients. *t present all the branches of the bank are computeri!ed under HG%N operating system to provide best security to the information. 7ity 6ank $imited is providing comprehensive range of banking services with utmost care and efficiency to its customers. *uto 3eller &achine is used to count money properly to save client0s valuable time as well. 3he customer can draw moneyLcash from their account within a minute. s

#WI,T #ervice
7ity 6ank $imited is one of the first few 6angladeshi 6anks to obtain membership of SB%>3 (Society for Borldwide %nter5bank 3elecommunication). SB%>3 is a members0 owned cooperative which provide a first and accurate communication network for financial transactions such as $etter of 7redit" >und 3ransfer etc.

2.0.F."ecent Per&or!ance at a glance o& Banga Bandhu(B.B) Avenue Branch

/ear .==) .==-(C*G 5CHGE) De osit target (in crore) -= D3.-D )chieve!ent (in crore) )D.3) D3.3< C 9<.) 99.))

.3

/ear /ear .==) .==) .==-(C*G5 .==-(C*G5 CHGE) CHGE)

Pro&it target (in crore) +7 ort target (in crore) D.== ). <.)= (D.)=

)chieve!ent (in crore) )chieve!ent (in crore) -..= D3.=) 3.3< <-..D

C C ((.)D 1<=.<) D<... )..((

/ear .==) .==-(C*G5 CHGE)

I! ort target(in crore) 1== 1==

)chieve!ent (in crore) 13<.1< <9.11

C 13<.1< <9.11

/ear .==) .==-(C*G 5CHGE)

"ecover' target (in lac) 1(= <=

)chieve!ent (in lac) 1( 3.3=

C 1=.== D.)

/ear .==) .==-(C*G 5CHGE)

)dvance target (in crore) (= 1=).-(

)chieve!ent (in crore) (-.39<.(.

C 1=D.9) (9.D.

.<

"ecover' o& 1lassi&ied 4oans

@ecovery of 7lassified $oans up to 31st ?ecember .===9 3 ..=.93 lac. *fter this year the year wise recovery position of classified accounts are given below9

/ear
.==1 .==. .==3 .==< .==) .==-(Can.5 Cune)

1lassi&ied a!ount at the 'ear end (in DDD T:.)

.3"DDD 1)"-9) 1<"()) 1"=13 1".3. 11(.D- lac

"ecover' during the 'ear (in DDD T:.)

3".-1D. 13"3)3 1"13( .")=. ..3= lac

#tate!ent o& $verdue .ill o& +ntr'

/ear
6.6.*vn. 6r.

2DD1
Gill

2DD2 2DD3 2DD0

. Gill Gill

2DD2
3

Total Total )!ount

) H.S. O .D"=.-..=

"ecover' and de&aulting install!ents and a!ount under consu!er credit sche!e &or the !onth o& *a' 2DD3:
1. Go. of total borrowers .. 3otal authori!ed loans 3. 3otal amount disbursed <. 3otal amount recovered ). 3otal amount outstanding -. 3otal overdue amount 9 -. 93 93 93 93 93 . <"<--"D1=.== . <"<--"D1=.== . 3"(D3"33).== . 1"((1")=-.(( . )=9"3==.==

Position o& ne>l' develo ed liabilit' roducts (Gan=Gune 2DD3)

.)

(a!e o& the roduct

3SS (3hree Stage Saving Scheme) &6S (&onthly 6enefit Scheme) CSS (Cuniors Savers Scheme) $SS ($achpoti Savings Scheme)

Total aHc o ened Total a!ount

D-( =Gill Gill ."<=="=== .".)="=== 5 5

Chapter THREE

5ENERA+ BANKIN5
.-

<+(+")4 .)(:I(<
*t first % have been placed in the ,eneral 6anking ?epartment. ,eneral 6anking department performs the ma:ority functions of a bank. %t is the core department. %n fact" bank operates with the people0s money. *nd this process starts with the ,eneral 6anking department. 3he activities of the ,eneral 6anking ?epartment of 76$ are mainly divided into the following categories9 *ccount 2pening Section" $ocal @emittance Section" 2nline 6ranch 6anking Section" 2ne Stop Htility Services Section" ?eposit Schemes Section" 7learing Section" 7ollection Section" 7ash Section" *ccounts Section"

3.1 )ccount $ ening #ection:

3o establish a 6anker and customer relationship *ccount opening is the first step. 2pening of an account binds the 6anker and customer into contractual relationship. 6ut selection of customer for opening an account is very crucial for a 6ank. %ndeed" fraud and forgery of all kinds start by opening account. So" the 6ank takes e+tremely cautious measure in its selection of customers.

3.1.1 T' es o& )ccount:

7urrent *ccount.

.D

Savings *ccount. >i+ed ?eposit *ccount.

3.1.2 Procedure to o en an )ccount:

>or opening an account" at first the prospective account holder will apply for opening an account by filling up account opening form. *ccount opening form consists of the name of the branch" type of account" name of the applicant(s)" present address" permanent address" passport number (if any)" date of birth" nationality" occupation" nominee(s)" special instruction (if any)" initial deposit" specimen signature(s) of the applicant(s)" introducer0s information etc. 3he prospective customer should be properly introduced by the followings9 i. *n e+isting customer of the bank. ii. 2fficials of the bank not below the rank of *ssistant 2fficer. iii. * respectable person of the locality who is well known to the authori!ed officer. 3wo copies of passport si!e photograph duly attested by the introducer. Signature of the prospective account holder in the account opening form and on the specimen signature card duly attested by the introducer. 3hen the concerned authority will allocate a number for the new account. 3he customer than deposit the /initial deposit1 by filling up a deposit slips. %nitial deposit to open a current account in 46$ is 3k. 1===.== and saving account is 3k. )==.==. *fter depositing the initial deposit" the account is considered to be opened. 76$ maintains all of its accounts in computer. *fter depositing the initial deposit" 76$ records it in the computer by giving new account number. 3hen it issues che'uebook re'uisition slip by the customer. 3hen it distributes all relevant papers to respective department. manager or

3.1.3 )ctivities and a ers necessar' &or o ening an account:

())

Goint )ccount:

%f the account is a :oint account" then the :oint account holder should submit a declaration and operational instructions of the account along with their signature. 3he declaration is

.(

Any balance to the credit of the account is and shall be owned by us as joint depositors. Any liability whatsoever incurred in respect of this account shall be joint and several.

(.)

Partnershi &ir!:

3he following documents have to be submitted for preparing an account of a partnership firm9 4artnership deed. (a) %f the partnership firm is a registered one" then one copy of registration forms. (b) %f not" then a copy of certificate from the notary public.

(1)

4i!ited 1o! an':

* copy of resolution of the company that the company decided to open an account in the 7ity 6ank. 7ertified true copy of the &emorandum ; *rticles of *ssociation of the 7ompany. 7ertificate of %ncorporation of the company for inspection and return along with a duly certified 4hotocopy for 6ank0s records. 7ertificate from the @egistrar of Coint Stock 7ompanies that the company is entitled to commence business (in case of 4ublic $td. 7o. for inspection and return) along with a duly certified 4hotocopy for 6ank0s records. $atest copy of balance sheet. E+tract of @esolution of the 6oardL,eneral &eeting of the company for opening the account and authori!ation for its operation duly certified by the 7hairmanL&anaging ?irector of the company. vii) $ist of ?irectors with address (a latest certified copy of >orm5N%%)

>or the opening of an account of a limited company" following documents have to be submitted9

(D)

1lubH#ociet':
Hp to date list of office bearers. 7ertified copy of @esolution for opening and operation of account. 7ertified copy of 6yelaw and @egulationsL7onstitution.

>ollowing documents have to be obtained in case of the account of the club or society9

.9

 (+)

7opy of ,overnment *pproval (if registered).

1oo erative #ociet':

7opy of 6yelaw duly certified by the 7o5operative 2fficer. Hp to date list of office bearers. @esolution of the E+ecutive 7ommittee as regard of the account. 7ertified copy of 7ertificate of @egistration issued by the registrar" 7o5operative societies.

>ollowing documents have to be obtained in case of the account of 7ooperative Society9

(,)

(on=<ovt. 1ollege H #chool H *adrasha H *uktab:

>ollowing documents have to be obtained in case of the account of non5govt. college L school L madrasha L muktab9 (<) Hp5to5date list of ,overning 6odyL&anaging 7ommittee. 7opy of @esolution of the ,overning 6odyL&anaging 7ommittee authorising opening and operation of the account duly certified by ,a!etted 2fficer.

Trustee .oard:

>ollowing documents have to be obtained in case of the account of trustee board9 4rior approval of the #ead 2ffice of 76$. 7ertified copy of ?eed of 3rust" up to date list of members of the 3rustee 6oard and certified copy of the @esolution of 3rustee 6oard to open and operate the account. (-)

*inor6s )ccount:

>ollowing documents have to be obtained in case of the account of minor9 4utting the word /&%G2@1 after the title of the account. @ecording of the special instruction of operation of the account. 3he *2> is to be filled in and signed by either the parents or the legal guardian

appointed by the court of law and not by the minor.

3.2 4ocal "e!ittance:

3=

$ocal remittance is one of the main components of general banking. 3he activities of local remittance are 555 i. ii. iii. iv. 3elegraphic 3ransfer" ?emand ?raft issue" 4ay order. 4ay slip.

3.2.1 Telegra hic Trans&er (TT):

%t is an order from the issuing branch to the drawee bank L branch for payment of a certain sum of money to the beneficiary. 3he payment instruction is sent by tele+ and funds are paid to the beneficiary through his account maintained with the drawee branch or through a pay order if no account is maintained with the drawee branch.

Procedure o& issuing TT:

>ollowing procedures are followed while issuing of 339 3he applicant fills up the relevant parts of the prescribed application form in triplicate" duly signed the same and gives it to the ,6. ,6 will fill up the commission part for bank0s use and re'uest the applicant to deposit necessary cash or che'ue at the cash booth. ,6 will prepare tele+ in appropriate form" sign it and send it to the tele+ operator for transmission of the message. ,6 will prepare necessary advice. ?ebit advice is sent to the client if client0s account is debited for the amount of 3.3. 3.3. 7onfirmation *dvice is sent to the drawee branch. 7redit 3icket (second copy of the application form) is used to credit the 76$ ,eneral *ccount. 3he first copy of the application form will be treated as ?ebit 3icket while the second copy will be treated as 7redit 3icket. 3he third copy will be handed over to the applicant as customer0s copy.

)ccounting Treat!ent:
>or telegraphic transfer" 46$ gives the following entries555 7lient0s *ccount 7ity ,eneral *ccount 3ele+ *ccount ?r. 7r. 7r.

31

7ommission *ccount

7r.

Pa'!ent o& T.T.

2n receipt of 3.3. the drawee branch passes payment instructions the following entries if the 3.3. is found to be correct on verification of the 3est numberP a) 7ity ,eneral *ccount ?*? *ccount I 33 4ayable b) ?*? *ccount I 33 4ayable 7lient0s *ccountL4ay 2rder ?r. 7r. ?r. 7r.

%n case the beneficiary does not maintain any account with the drawee branch a pay order will be issued in favor of the payee and sent to his banker L local address as the case may be. Every branch maintains a prescribed 3.3. 4ayable @egister. *ll the particulars off 3.3. are to be properly recorded in this register duly authenticated. * separate 3ype of 3.3. confirmation advice is sent to the drawee branch on the same day. 2n receipt of 3.3. confirmation advice" the particulars of 3.3. are verified with reference to particulars already recorded in the 3.3. payable register.

3.2.2 De!and Dra&t (DD):

Sometimes customers use demand draft for the transfer of money from one place to another. >or getting a demand draft" customer has to fill up an application form. 3he form contains date" name and address of the applicant" signature of the applicant" che'ue number (if che'ue is given for issuing the ??)" draft number" name of the payee" name of the branch on which the ?? will be drawn and the amount of the ??. 3he form will be duly signed by the applicant and by the authori!ed officer.

Process o& issuing 4ocal Dra&t:

>ollowed procedures are followed while issuing local draftP ,et the application form properly filled up and signed by the applicant. 7omplete the lower portion of the form for the bank0s use. 7alculate the total amount including the bank0s commission.

3.

%f the che'ue is presented for of the local draft" the officer should get the che'ue duly passed for payment by the authori!ed person and record the particulars of local draft on the back of the che'ue. %f the client wants to debit his account for the payment of the draft amount" the officer should get the account holder0s signature verified properly" from signature card on record of the branch and debit clients account for the total amount including commission. 3he first copy of the application form will be treated as ?ebit 3icket while the second copy will be treated as 7redit 3icket and kept by the ,6. 3he third copy is handed over to the applicant as customer0s copy. 3he ,6 ?epartment maintains a prescribed $.?. %ssue @egister. *ll the re'uired particulars of $?s issued by 76$ should be entered in that register duly authenticated.

Issue o& Du licate Dra&t:

?uplicate ?raft is not normally issued unless getting of satisfactory evidence is produced regarding loss of the draft. %f the $.?. is reported to be lost or stolen" the issuing branch on receipt of a written re'uest from the purchaser may issue a duplicate draft 6efore issuing duplicate $.?. the branch should observe the followingsP i) ii) iii) Aerify the purchaser0s signature on the re'uest letter from the signature appearing on the original application form. %mmediately issue a stop payment instruction to the drawee branch under advice of head office and obtain confirmation of non5payment the $.?. in ac'uisition. *fter the drawee branch has acknowledged the stop payment order and confirmed that the local draft in ac'uisition remains unpaid at their end" the issuing branch should obtain an %ndemnity 6ond on stamp paper as per prescribed format from the purchaser duly signed by him. 3he branch will thereafter write to head office for their approval to issue a duplicate draft. iv) 3he head office on receipt of the re'uest from the issuing branch will immediately issue a caution circular to all the branches regarding the lost of the local draft asking them to record stop payment. v) 3he head office will thereafter issue clearance to the issuing branch for issuing for issuing a duplicate draft in lieu of original reported lost. 33

vi)

2n receipt of the clearance from head office" the issuing branch will issue a completely fresh draft marking clearly the words duplicate issued in lieu of original draft no. dated .in bold letters on the top of the front page of the draft. 3he printed serial number on the draft should not however be struck off. %ntimation should be given to the drawee branch furnishing full particulars of the duplicate draft.

vii)

3he particulars of the duplicate draft must resemble those of the original draft in all respects" i.e." all the particulars to the duplicate draft must be identical with those in the original draft. Go further %67* is to be issued for the duplicate draft.

viii)

4rescribed duplicate issuance charge is to be recovered for issuing the duplicate draft and credited to /%ncome *ccount1.

1ancellation o& 4ocal Dra&t:

3he followings are followed while canceling a $.?.P 3he purchaser should submit a written re'uest for cancellation of the $.?. attaching therewith the original $.?. 3he signature of the purchaser will have to be verified from the original application form. &anager0s prior permission is to be obtained before refunding the amount of draft. 7ancellation charge is to be recovered from the applicant and only the amount of the draft less cancellation charge should be refunded. 7ommission charge" posted charge etc. recovered for issuing the $.?. should not be refunded. 3he original entries are to be reversed giving proper narration. *n %6?* for the cancelled $.?. should be issued on the drawee branch. 7ancellation of $.?. should also be recorded in the $.?. %ssue @egister.

Pa'!ent o& 4.D.:

Bhile payment of $.?. 76$ performs the following functionsP i) 2n receipt of 7redit *dvice (%67*) from the issuing branch the following entries are to be passed I 7ity ,eneral *ccount ?r. ?*? *ccount 7r. 3<

ii)

Bhen $.?. is presented for payment at the paying branch" its details are to be carefully e+amined with reference to the following pointsP a) b) c) Bhether the draft is drawn on the $ocal office. Bhether the draft is crossed or not. *mount of crossed draft is not paid in cash to the payee but to be paid to his account with a bank. ?raft must have to be signed by two authori!ed officers of the issuing branch. 3heir signatures are to be verified from the specimen signature book for being sure that draft that the draft is genuine. 3he verifier should put his initial. d) e) f) g) Endorsement on the back of the draft must be regular in case the draft is presented through clearing. 3he amount of the draft should not e+ceed the amount written in red ink at the top of the draft. 3he payee is to be properly identified in case of cash payment. 3he particulars of the draft i.e. the draft number" date" amount and the name of the payee should be verified from the $.?. 4ayable @egister.

iii)

%n case of payment" the draft should be cancelled with red ink. 3he date of payment should be recorded in the $.?. 4ayable @egister.

)ccounting Treat!ent:
Bhile payment9 ?*? I$.?. 4ayable *ccount ?r. 7lient0s *ccount *n %67* should be sent with this. 7r.

#to

a'!ent o& 4ocal Dra&t:

3he payee or purchaser of the draft cannot give stop payment instruction to the drawee branch. %f the paying branch receives a re'uest from the purchaser of the draft for stopping payment of the draft" it will ask the purchaser to approach the issuing branch about the purpose. 3he paying branch should however e+ercise necessary precaution in this regard. 2nly the issuing branch can issue instruction for stop payment of the draft under special circumstances. 3)

3.2.3 Pa' $rder (P$):

>or issuing a pay order" the client is to submit an application to ,6 in the prescribed form. 3his form should be properly filled up and signed. >or issuing pay order 76$ charges commission on the following rateP I ,or Part' 3 )= plus A*3 1)E $ther than Part': Q >or 3k. 1 to )="===" the commission is 3k.)= plus A*3 1)E Q >or 3k. )="==1 and above" the commission s 3k. 1== plus A*3 1)E

Pa'!ent o& Pa' $rder:

3he pay order is presented to the bank either through clearance or for credit to the client0s account. Bhile payment" relative entry is given in the pay order register with the date of payment.

1ancellation o& Pa' $rder:

3he following procedure should be followed for the cancellation of the pay order9 3he client should submit a written re'uest for canceling the pay order attaching therewith the original pay order. 3he signature of the purchaser will have to be verified from the original application form. &anager0s prior permission is to be obtained before refunding the amount of the pay order. 7ancellation charge is to be recovered from the applicant and only the amount of the pay order less cancellation charge should be refunded. 7ommission recorded for issuing of the original pay order should not be refunded. 3hen the officer should write /cancelled1 on the pay order 3he original entries should be reversed with narration. 7ancellation of the pay order should also be recorded in the register.

3-

3.3 $nline .anking:

3.3.1 ,inacle 1ore:
3he 6ank has set up a Bide *rea Getwork (B*G) across the country to provide 2nline 6ranch 6anking facility to its valued clients. Hnder the Scheme" clients of any branch shall be able to do banking transaction at other branches of the bank. Hnder this system a client will to be able to do following type of transactions9 7ash withdrawal from hisLher account at any branch of the 6ank irrespective of location. 7ash deposit in hisLher account at any branch of the 6ank irrespective of location. 7ash deposit in otherKs account at any branch of the 6ank irrespective of location. 3ransfer of money from hisLher account with any branch of the 6ank. *ny amount can be deposited or transferred under 4rime $ine. %n the system" however" at present there is a limit for cash withdrawal through bearer or by account holder himself.

3.3.2 "e?uire!ent o& ,inacle 1ore service:

3he 7lients who has account in 7ity bank or who will open account in 7ity bank and would be interested to maintain substantial deposits in Savings" 7urrent or S3? accounts" will be eligible to get >inacle 7ore Service. %ntending and eligible clients have to apply in prescribed application form to the branch to get the online service from the bank. 3he client should submit two copies photographs and signature cards along with the application form. 3o avail the >inacle 7ore service" no charge should be paid for online transaction within a locality where the account is domiciled. 6ut charges should be paid by the customer for inter city online transaction.

$nline Transaction *e!bershi ,ee:

&embership fee of 3k. )=L5 per month for the 2nline 6ranch 6anking Service.

3.0 De osit #che!es o& 1it' .ank 4i!ited

6ank is the largest organi!ation of mobili!ing surplus domestic savings. >or poverty alleviation" we need self5employment" for self5employment we need investment and for investment we need savings. %n the other words" savings help capital formations and the capital formations

3D

help investments in the country. 3he investment in its turn helps industriali!ation leading towards creation of wealth of the country. *nd the wealth finally takes the country on road to progress and prosperity. *s such" savings is considered the very basis of prosperity of the country. 3he more the growth of savings" the more will be the prosperity of the nation. 3he savings rate in 6angladesh is one of the lowest in the world rate of domestic saving being 1D.D( E. %n order to improve the savings rate" >inancial %nstitutions responsible for mobili!ation of savings should offer attractive Savings Schemes so that the marginal propensity to save increases. 3he savings do not" of course" depend only on the 'uantum of income but largely depend on the habit of savings of the people. 76$ has formulated the following Savings Schemes9 &onthly 6enefit ?eposit Scheme" >i+ed ?eposit Scheme" 3hree Stage Savings Scheme"

3.0.1. *onthl' .ene&it De osit #che!e

3his is a ?eposit Scheme where the depositor gets a fi+ed amount of profit every month without disturbance to the principle. 3he Scheme is designed to attract9 1) 3he retirement benefits of service holders. .) 3he investment of Bage Earners who want to pay a fi+ed amount monthly to their family0s dependents in 6angladesh from the profit of their investment. 3) 3he deposit of those persons who intend to meet the monthly e+pense of their family from the income of their deposit. <) %nvestment of fund of 3rusts and >oundations which award monthly Scholarships L Stipends to students. )) 3rusts and founders or other associations" which award monthly scholarshipLstipends to students etc.

,eatures
De osit )!ount Tk. 1"=="=== to 3 . 1"=="=="=== Period 3he scheme is for .yearsL 3 yearsL ) years. "eturn 3(

Ter! . years 3 years ) years

De osit (T:.) 1"=="=== 1"=="=== 1"=="===

*onthl' Interest (T:.) Interest 9== 9== 9<) (T:.) (1= (1= ()=

)&ter

Ta7

R 3a+es if any" applicable. )dditional .ene&it 3hese &6?S allows you to en:oy loan facility up to 9=E of your deposit amount. Ter!s B 1onditions 4ayment of monthly profit shall start from the subse'uent month after a clean minimum gap of 3= days from date of deposit. Gormally" the deposit will not be encashable before maturity. 6ut if any depositor intends to withdraw his deposit before maturity" the following rules will apply9 5 5 5 Go benefit including interest shall be allowed for premature encashment within one year. %f the accountsL deposits are closedL encased after one year of its opening" benefit shall be allowed on the deposits at e+iting savings deposits rate. %f the amount of monthly profit already paid e+ceeds the amount payable at e+iting savings rate" the difference shall be reali!ed from the principal deposit amount" if and when necessary. 5 %f the client fails to deposit installment for consecutive 3 months" in this case the scheme will be closed for ad:usting loan. %n case of death of a depositor" the *L7 shall cease to be operative and the amount deposited so far shall be paid to the nominee" as mentioned in the account opening form" and in absence of nominee" to the legal heirs of deceased as per rules in force.

3.0.2 Three #tage #avings #che!e (T###)

>or regular income people it is a good opportunity to deposit money for long term in high interest rate. ?etails are9

3erm9

. yearsL< yearsL- years

&onthly deposits9 3k.)==53k.)===

39

)n e7a! le o& total su! a&ter !aturit' (>here !onthl' install!ent Tk.2DD):
3erm 1 year . year 3 year < year ) year - year %nterest @ate (E 9E 1=E 11E 1.E 13E 3k..(" 9)) (.nd stage) 3k.<(" )<( (3rd stage) 3otal sum after maturity 3k.13" =93 (1st stage)

3.2 UTI4IT/ #+"@I1+# #1-+*+:

$ike any other country of the world" the people living in the urban areas of our country lead a very busy life. 3imes are very valuable to them. ?espite this" they are to waste their valuable time at the counter of. ?ifferent 6anks and other %nstitutions for payment of their monthly bills of different utility services like Electricity" 3elephone etc. 3hey" as such" face enormous difficulties for payment of their monthly bills in time. Such inconveniences of the urban people can be removed by making an arrangement to collect all the bills of various utility services at one 4oint.

#co e o& #ervices: =

3he scheme is designed to provide all the re'uired services to the customer in making payment of their following bills on their behalf from the counter of the 6ank9 3o pay Electricity 6ills 3o pay 3elephone 6ills 3o pay ,as 6ills 3o pay B*S* 6ills 3o pay %nsurance 4remium 3o pay #ouse @ent 3o collect #ouse @ent 3o pay &unicipal 3a+es 3o collect 4ension &oney

<=

 %ssuance and @enewal of $icense of 3A" @adio" etc. *ny other like Services.

$b%ectives
3o help the customers in payment of their different utility 6ills in time and thereby relieve them of their worries and save their valuable time. 3o help different corporationsL organi!ations in timely collection of their 6ills. 3o help the senior citi!ens of the country in collecting their 4ension &oney every month. 3o e+tend financial assistance to the customers by way of overdraft in timely payment of their 6ills.

De osit "ate $&&ered b' 1.4

#4. =1. Particulars De osit "ate Short 3erm ?eposit a) 6elow 3k.1.== 7rore ).==E b) >rom 3k. 1.== 7rore but below -.==E 1=.== 7rore 7) 3k 1=.== 7rore and above Saving ?eposit >i+ed ?eposit (>?@) a) 153 &onths b) <511 months c) 1(2ne) 8ear and above -.)=E -E U to 1.DD 1rore 11E 1.E 13E

=.. =3.

3.3 1learing #ection

*ccording to the *rticle 3D(.) of 6angladesh 6ank 2rder" 19D." the banks" which are the member of the clearinghouse" are called as Scheduled 6anks. 3he scheduled banks clear the che'ue drawn upon one another through the clearinghouse. 3his is an arrangement by the central bank where everyday the representative of the member banks gathers to clear the che'ue. 6anks for credit of the proceeds to the customers0 accounts accept 7he'ue and other similar instruments. 3he bank receives many such instruments during the day from account holders. &any of these instruments are drawn payable at other banks. %f they were to be presented at the drawee banks to collect the proceeds" it would be necessary to employ many messengers for the purpose. Similarly" there would be many che'ue drawn on this the

<1

messengers of other banks would present bank and them at the counter. 3he whole process of collection and payment would involve considerable labour" delay" risk and e+penditure. *ll the labour" @isk" delay and e+penditure are substantially reduced" by the representatives of all the banks meeting at a specified time" for e+changing the instruments and arriving at the net position regarding receipt or payment. 3he place where the banks meet and settle their dues is called the 7learinghouse.

3.3.1 )ctivities o& the #ection:

(a) 4reparation of 7learing 2utward and %nward $odgement and record maintenance of the same. (b) 6atch posting as and when re'uired. 2n receipt of instruments" the same is endorsed here. 3hen clearing section will sent %6?* to head 2ffice for clearing purpose and on receipt of %67* from #ead 2ffice amount is credited to customers account and vice versa. %f the instrument is return then the same is given back to the customer.

3.7 Collection Section:

7hecks" drafts etc. are drown on bank located outside clearing house are sent for collection. 6.6. *venue 6ranch collects its client0s above5mentioned instruments from other branches of 76$ and branches other than 76$. %n case of out ward bills for collection customers account is credited after finishing the collection processor. *nd in case of in ward bills customers account is debited for this purpose. So it place dual role as follows9 i) ii) 7ollecting 6anker 4aying 6anker.

3.A.1 )ctivities o& the #ection:

4reparing of 2utward and %nward 7ollection %tem. %nter56ranch 3ransfer. 6atch posting and checking as and when re'uired. 2ther works as and when re'uire. <.

1ollection is done >hen

(i) 4aying 6ank is located out side ?haka 7ity. (ii) 4aying 6ank is other branches of 46$ situated inside ?haka 7ity.

(i)

Pa'ing .ank is outside Dhaka 1it':

76$ sends 2utward 6ills for 7ollection (267) to the concerned paying bank to get %nter 6ank 7redit *dvice (%67*) from paying 6ank. %f the paying bank dishonours the instrument" the same is returned to principal 6ranch.

(ii)

The Pa'ing .ank o& their o>n branches inside Dhaka 1it':

7ollection ?epartment sends transfer delivery item to other branches of same bank situated inside ?haka 7ity. Hpon receiving %67* customer0s aLc is credited.

,.6.2 P!o(e7*!e% 'o! O*"8a!7 B#ll% 'o! Colle("#o&:

?epositing the che'ue along with deposit5slip 7rossing of the che'ue are done indicating the 6ranch as collecting bank

Endorsement /4ayee0s *L7 will be 7redited on reali!ation1 is given Entries are given in the 2utward 7learing @egister 1o!!ission &or 1ollection 9 &inimum 3 . )= to ma+imum 3 .D==.

3.E )ccounts #ection:

%n banking business transactions are done every day and these transactions are to be recorded properly and systematically as the banks deal with the depositors0 money. *ny deviation in proper recording may hamper public confidence and the bank has to suffer a lot. %mproper recording of transactions will lead to the mismatch in the debit side and credit side. 3o avoid these mishaps" the bank provides a separate department whose function is to check the mistakes

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in passing vouchers or wrong entries or fraud or forgery. 3his department is called *ccounts ?epartment. 6esides these" the branch has to prepare some internal statements as well as some statutory statements" which are to be submitted to the 7entral 6ank and the #ead 2ffice. 3his department prepares all these statements.

3.E.1 ,unctions o& )ccounting De art!ent:

Be can divide the functions of accounting department into two categories. 2ne is day5to5day task and another is periodical task. a. Da' to da' &unctions: #ere day5to5day function refers to the every day tasks. *ccounting department of 76$ performs the following day to day functions9 @ecording of transaction in the cashbook" general and subsidiary ledger. 4reparing the daily position of deposit and cash. &aking the payment of the e+pense of the branch. @ecordings of inter branch fund transfer. 7hecking whether all the vouchers are correctly passed. @ecording the voucher in the voucher register. 4acking and maintains the total debit and total credit vouchers.

b. Periodical &unctions: 4eriodical functions of accounts department include the

preparation of different weekly" fortnightly" monthly" 'uarterly and annual statement. 3he accounts department prepares the following statements9 &onthly statement of deposits" loans and advances" profit and loss etc. Suarterly statement of deposits" loans and advances" profit and loss etc.

8early statement of deposits" loans and advances" profit and loss etc. 8early statement of classified $oans and *dvances. Statement of *ffairs. 8early 6udget of the 6ranch" etc

3.F 1ash #ection:

<<

7ash section is a very sensitive organ of the branch and handle with e+tra care. 2peration of this section begins at the start of the banking hour. 7ash officer begins hisLher transaction with taking money from the vault" known as the opening cash balance. Aault is kept in a much5 secured room. eys to the room are kept under control of cash officer and branch in charge. 3he amount of opening cash balance is entered into a register. *fter whole days0 transaction" the surplus money remain in the cash counter is put back in the vault and known as the closing balance. &oney is received and paid in this section.

3.F.1 1ash "ecei t:

*t first the depositor fills up the ?eposit in Slip. >or saving account and current account same ?eposit in Slip is used in this 6ranch. *fter filling the re'uired deposit in slip" depositor deposits the money. 2fficers at the cash counter receives the money" count it" enter the amount of money in the register kept at the counter" seal the deposit in slip and sign on it with date and keep the banks0 part of the slip. 2ther part is given to the depositor. %n this branch" i.e." 6.6.*.6ranch" two different officers maintain two different books for entering such entries. 2ne officer and other accounts by another officer maintain all deposits of saving account. *t the end of the day entries of both of these registers are cross checked with the register kept at the cash counter to see whether the transactions are correct or not.

3.F.2 1ash Pa'!ent:

Bhen a person comes to the bank to cash a che'ue" heLshe first gives it to the computer desk to know the position of the check and posting of the che'ue. %f the account has sufficient fund the computer in charge will post it into the computer" will sign it and seal it. 3his che'ue is then sent to the concerned officer. 3here are two officers who verify the che'ues I one for savings and similar types of account and another for current and similar types of account. *fter receiving the che'ue respective officer first checks it very carefully for any kind of fraudulent activity. (S) #e also checks the date of the che'ue" amount in word" amount in figure and signature of the drawer.

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 %f the instrument is free of all kind of error the officer will ask the bearer to sign on the back of it. #e will then put hisLher initial beside the bearers0 signature. SLhe will also sign it on its faceJ will write down the amount by red pen. 3hen the che'ue will be sent to the cash counter. *t the cash counter bearer will be asked again to sign on the back of the instrument. 3he cash officer will then enter the details of the che'ue in hisLher register and will pay the money to the bearer. *t the end of the day these registers will be compared to ensure the correctness of the entries.

3.1D 1onclusion
.ank is the largest organi8ation o& !obili8ing sur lus do!estic savings. )ttractive #avings #che!es are o&&ered b' 1.4 such as 1ontributor' #avings #che!e9 *onthl' .ene&it De osit #che!e9 # ecial De osit #che!e9 +ducation #avings #che!e9 ,i7ed De osit #che!e9 1it' .ank *one' #che!e9 1it' .ank Insured ,i7ed De osit #che!e as >ell as di&&erent accounts to save money. Schemes are designed concentrating in different purposes to help the fi+ed income group people to help in need. 6ank52fficials are also whole5hearted and dedicated to serve their customer with utmost care.

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Chapter FOUR

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+OAN AND ADVANCE

er!ices "ffered #y Credit $e%art&ent'

6ank is a financial intermediary whose prime function is to move scarce resources in the form of credit from savers to those who borrow for consumption and investment. 3he word /credit1 is derived from the $atin word /credere1" which means to trust. 3he fundamental nature of credit is that an element of trust e+ists between buyer and seller5whether of goods or money. %n a modern industrial society 6anks are uni'uely important because of their ability to create money. $ending comprises a very large portion of a 6ank0s total assets and forms the backbone of the 6ank and interest on lending constitutes the highest proportion of income of a 6ank. *s such credit 'uality remains the prime indicator of its commercial success. Hnsound credit reduces the ability of a 6ank to provide credit towards profitable borrowers and undermine li'uidity and solvency. 3herefore lending is very important for the profitability and success of a 6ank. Bhen a bank advances a loan" it does not pay the amount in cash. 6ut it opens an account in his name and allows him to withdraw the re'uired amount by che'ue. 6anks provide credit facilities to businessmen by way of loans and advances" overdraft and cash credit. Bhen a loan is granted or overdraft is sanctioned" the amount of loan or overdraft is entered in the account of the customer and he is allowed to draw a che'ues up to the amount agreed upon. 3hus the bank creates a deposit in the name of the borrower. 6asically credit is the function by which people can perform their :ob by depositing and lending money from the bank with an implied interest rate and bank performs here as a middleman. 6anks create money and credit. %t happens in two ways. >irst" when a customer is granted loan" he has to sign a promissory note and receive in turn" a bank0s demand deposit" or cash. 3he promissory note does not act as money but it

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receives money and can readily spend almost everywhere. 3hus it creates credit. Second" the entire systems of banks also create money as the deposits generated by lending flow from bank to bank. 6y law" each bank must set aside a fractional reserve behind each deposit it receives and the remaining e+cess can be loaned out. Go single bank can lend out more than its e+cess reserves" the entire banking system can create a multiple volume of deposit money through credit creation.

0.1 #alient &eatures o& 1it' bank6s 1redit Polic':

*ssets are built based on customer0s deposit" which should not e+ceed 9=E of customers based deposit. @ate of interest is variable based on customers0 integrity and risks associated. 3ype of security varies on the basis of risks associated in credit. ?iversification from all angel vi!. type of credit" geographical location" si!e of credit" sectors and sub5sectors etc. 7redit operations are carried out in branch through branch credit committee as per authority delegated to head of branch and through #ead 2ffice 7redit 7ommittee in respect of credit sanction authority delegated to the 7E2. 7redit @isk ,rading is done in all cases. *ssessment of volume or amount of credit properly. Htmost care is taken in providing loans to directors.

0.2 1redit Port&olios and "atio o& 1it' .ank 4i!ited:

3he 6ank continued to reengineering process to raise its assets portfolio by implementing new credit policy with diversified and well structured asset portfolio and separation of responsibilities and segmentation of divisions. 3he outstanding amount of loans and advances as on 31st ?ecember .==) stood at 3k..33.- million with a record growth of 3k.-.9( million (3DE). 3he outstanding amount at the same period of previous year was 3k.1D=.D million. 7ity bank $imited has a plan to maintain the following proportions to design and maintain credit portfolio9

<9

3able9 7omparative 4osition of Sector Bise E+posure S+. No. 1 2 3 5 * 7 A% o& ,-.-2../ Amo*&" 0#& TK. 2 o' %3a!e m#ll#o& TK.1 171.00 35 2.30 &73!.7! 37*2. 0 0! .*1 22 . * 27!1.7 2,,24.,. 0.73 15.1! 37. 7 1*.13 17.55 0.!* 11.!7 -.....

Se("o!

Agriculture L & M Industry (Term Loan) "or#ing $a%ital & $ommercial lending '(%ort )inance Im%ort )inance +ousing ,t-ers To"al

0.3 T' es o& .ank 1redit:

&odern banking operations touch almost every sphere of economic activity. 3he e+tension of bank credit is necessary for e+pansion of business operations. 6ank credit is a catalyst for bringing about economic development. Bithout ade'uate finance there can be no growth or maintenance of a stable output. 6ank lending is important to the economy" for it makes possible the financing of agricultural" commercial and industrial activities of a nation. 3he credit facilities are generally allowed by the bank may be in two broad categories. 3hey are9

1. ,unded ,acilities:
)unded .acilities can also /e di0ided into t-e .ollo1ing categories2 4oans: i) ii) iii) iv) 0) $verdra&ts: *gainst hypothecation of goodsLstock *gainst pledge of goodsLstock )= 7ontinuous $oans ?emand $oans. 3erm $oans up to ) years 3erm $oans over ) years 3-ort Term Agro4$redit and Micro credit

 *gainst any other permissible securities. $ther advances: *gainst import bills. *gainst imported merchandise. *gainst 3rust receipts (3L@). *gainst E+port 6ills 4urchasedL?iscounted *gainst Bork order *gainst other securities.

2. (on=,unded ,acilities:
$etter of credit ($L7) $etter of ,uarantee ($L,)

0.0 T' es o& )dvances $&&ered b' 1.4:

1. #ecured )dvances: ). 3he following type of secured advances are allowed against tangible securities sub:ect to margin restrictions9 $oan (,eneral) #ouse 6uilding $oan 2ther $oans to Staff 7ash 7redit (#ypothecation) 7ash 7redit (4ledge) #ire54urchase $ease >inancing 7onsumers0 7redit S2? (>2) S2? (B2) S2? (23) S2? (EN42@3) S2? (%&42@3) 4*? (4ayment *gainst ?ocuments)

)1

 6$7 (6ills *gainst $etter of 7redit) $%& ($oan *gainst %mport &erchandise) $3@ ($oan *gainst 3rust receipt) %64 4acking 7redit >?64 (>oreign) >?64 ($ocal) >64

.. These advances are allo>ed against the &ollo>ing securities:

Shares of various 7ompanies approved by #ead 2ffice from time to time and listed in the Stock E+change. 3erm ?eposit @eceipts issued by any 6ranch of our 6ank. $ien on balance in Savings *L7" 7urrent *L7. and other Savings Schemes ,overnment 4romissory Gotes. Aarious Sanchaya 4atras Surrender value of $ife %nsurance 4olicies. BE?6 *ssignment of bills against work ordersLsupply orders and receivables. Stock of goods in trade (4ermissible goods only) pledged or hypothecated. #ypothecation of power driven vehicles or watercraft. #ypothecation of capital &achineries and e'uipments. %mmovable 4roperty. %mported merchandise 5 pledged or hypothecated. 3rust @eceipts. %mport 6ills (4*?s) 6ills 4urchased Scheduled 6ankL%nsurance ,uarantees E+port 6ills %nland 6ills. 4ersonal ,uarantee 7orporate ,uarantee ).

2.

Unsecured )dvances:

*n unsecured or clean *dvance is one" which is granted to a constituent without obtaining any security. %n such case only charge documents are held an unsecured facility may be allowed in e+ceptional circumstances" only for a short period" with definite repayment arrangement" sub:ect to restrictions imposed by 6angladesh 6ank or any other competent authority" with prior approval of #ead 2ffice" to a customer on the basis of his personal credit worthiness" standing and reliability. ). Unsecured )dvances include: i) i) 6. %. * customer should not ordinarily be permitted to overdraw his account without security. #owever" an unsecured facility may be allowed in e+ceptional circumstances" only for a short period" with definite repayment arrangement" sub:ect to restrictions imposed by 6angladesh 6ank or any other competent authority" with prior approval of #ead 2ffice" to a customer on the basis of his personal credit worthiness" standing and reliability. %%. %t shall not be granted unless the Sanctioning *uthority has full confidence in the ability and reputation of the customer to repay it" on demand" or at its maturity if it is a loan. ?efinite arrangements for repayment" whether by installments or otherwise" must" as a rule" be made. 7lean 2verdrafts" and 7lean $oans.

0.2 Procedure o& <iving )dvance:

1. 3he borrower has to apply to 76$ for loan by filling up of a specific application form. 2. *fter receiving loan application form" 76$ sends a letter to 6angladesh 6ank for obtaining a report when loan amount e+ceed 1== lac. 3his report is called 7%6 (7redit %nformation 6ureau) report. 3. *fter receiving 7%6 report" if the bank thinks that the prospective borrower will be a good borrower" then the bank will scrutini!e the documents. %n this stage" the bank will look whether the documents are properly filled up and signed. 0. 3hen come processing stage. %n this stage" the bank will prepare a proposal. * proposal contains all relevant information (e.g. name of the client" type of the loan" amount of the loan" period of giving loan" security" date of application" financial data" etc.) 6ranch incumbent )3

($ocal 2ffice) has the discretionary power to sanction loan (S2?) up to 3k..) lac against financial obligations by informing head office. 6ut in that case" the branch manager has to give attention on the following matters9 a) 3he interest of the loan must not be less than 1<E" and b) 3he borrower must maintain 1=E margin. E+cept this case" the branch manager has to send a proposal to the head office. %t %s fall under the delegation of &anaging ?irector (&?)" the &? approves the loan. %f it is again beyond the delegation of &?" head office will prepare a proposal and submit it before the e+ecutive committee of the 6oard. 3he proposal has to be approved by the e+ecutive committee (E7). *fter getting the proposal approved head office issue a sanction advice. *ccording to that sanction advice" at the branch the following activities are done9 1. * sanction advice will be prepared in favour of the client. documents). 3. *fter receiving all the documents" the bank will disburse the loan to the borrowers. >or withdrawing the loan amount" customer creates a current account and the loan amount is transferred to this account. .. *fter the sanction advice" bank will collect necessary documents (charge

0.3 4ending Princi les:

3he bankers have to follow some principles or policies or take into consideration some factors for lending money on sound basis. %n working out these principles" or constituents a banker is e+posed to the following three basic 'uestions. %s the borrower credit worthyT *re loan terms" or in other words" loan agreements properly structured and documentedT #as the bank been able to perfect its claim on the assets or securitiesT

%f a banker handling a credit can find the answers to the above three basic 'uestions in a proper fashion lending operation carried out by him based on the same is e+pected to be sound. 3o answer the 'uestion as to whether the borrower is credit worthy a banker is to have clear idea about the following 70s concerning the borrowers. i. 7haracter )<

ii. 7apacity iii. 7ash >low iv. 7ollateral v. 7ondition vi. 7ontrol

The 316s re&lect the &ollo>ing oints9 >hich should be ke t in !ind &or sound lending:
Safety Security $i'uidity *de'uate return (4rofitability) Supervision GationalLSocial interest 7redit 7ontrol 4olicy of 6angladesh 6ank Cudicious selection of 7ustomers 4urpose

%t is to be always remembered that the 6ank is the custodian of public money and as such we must be :udicious" careful and selective while lending out the depositors0 money to ensure timely recovery. 3he deciding factors for recovery of loans are selection of right type of borrowers" end5use of credits and effective follow5up and proper supervision.

0.A #ecurities:
3o make the loan secured" charging sufficient security on the credit facilities is very important . 3he banker cannot afford to take the risk of non5recovery of the money lent . 76$ charges the following two types of security" 5 Pri!ar' securit': 3hese are the security taken by the ownership of the items for which bank provides the facility.

))

 1ollateral securit': 7ollateral securities refer to the securities deposited by the third party to secure the advance for the borrower in narrow sense . %n wider sense" it denotes any type of security on which the bank has a personal right of action on the debtor in respect of the advance.

*odes o& 1harging #ecurit':

There are di&&erent !odes o& charging securit' are e7ercised b' the bank: 1. Pledge: 4ledge is the bailment of the goods as security for payment of a debt or performance of a promise. * pledge may be in respect of goods including stocks and share as well as documents of title to goods such as railway receipt" bills of lading" dock warrants etc . duly endorsed in bank0s favour. 2. -' othecation: %n case of hypothecation" the possession and the ownership of the goods both rest the borrower . 3he borrower to the banker creates an e'uitable charge on the security. 3he borrower does this by e+ecuting a document known as *greement of #ypothecation in favour of the lending bank. 3. 4ien: $ien is the right of the banker to retain the goods of the borrower until the loan is repaid . 3he bankers0 lien is general lien. * banker can retain all securities in his possession till all claims against the concern person are satisfied. 0. *ortgage: *ccording to section ()() of the 3ransfer of 4roperty *ct" 1((. mortgage is the M0transfer of an interest in specific immovable property for the purpose of securing the payment of money advanced or to be advanced by way of loan" e+isting or future debt or the performance of an engagement which may give rise to a pecuniary liability1 . %n this case the mortgagor does not transfer the ownership of the specific immovable property to the mortgagee" only transfers some of his rights as an owner. 3he banker e+ercises the e'uitable mortgage.

0.E Docu!entation9
?ocumentation can be described as the process or techni'ue of obtaining the relevant documents. %n spite of the fact that banker lends credit to a borrower after in'uiring about the character" capacity and capital of the borrower" he must obtain proper documents e+ecuted from the borrower to protect him against wilful defaults . &oreover" when money is lent against some )-

security of some assets" the document must be e+ecuted in order to give the banker a legal and binding charge against those assets. ?ocuments contain the precise terms of granting loans and they serve as important evidence in the law courts if the circumstances so desire . 3hat0s why all approval procedure and proper documentation shall be completed prior to the disbursement of the facilities.

0.E.1 1harge Docu!ents:

,ollo>ing charge docu!ents are necessar' >hile giving loans. 4etter o& guarantee: 3his is a document given by the proprietor" directors or the third party in favor of the principal debtor. 3he beneficiary of this document is the bank. Surety is bound to pay the guaranteed amount if such situation arises. 1ounter guarantee: 3he principal debtor agreeing that if the guarantor pays any amount" the principal debtor is bound to pay this amount gives this guarantee. 4etter o& authorit': 6y this letter" the principal debtor gives the authority to the bank to debit the current account or investment account of the principal debtor for the following cases9 i. ii. iii. iv. Bages of the stock keeper and stock guard. @ent of the stock. %nsurance premium and *ny other e+penses regarding these functions.

4etter o& recall the loan: 3his letter is given to the bank by the borrower" giving the bank the right of recalling the loan amount at any time if the borrower fails to repay any one of the installments. *nd the borrower cannot protest such recalling. 4etter o& continuit': 6y this letter" the borrower agrees that the promissory note given by the bank will be act as security for the repayment of the ultimate balance or sum remaining unpaid on account of the overdraft or advance. 4etter o& revival:

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6y this letter" the borrower agrees that he will be liable to bank for payment of the promissory note with interest in respect of all present and future indebtedness liabilities secured thereby which promissory note is to remain in force with all relative securities" agreements and obligations. Goint ro!issor' note: 3his promissory note is given to the bank by the borrower if the borrowers are more than one person. #ingle ro!issor' note: 3he borrower to the bank gives this promissory note if the borrower is a single person. 4etter o& undertaking 3his document is given to the banker by the borrower acknowledging the right to cancel the facility at any time with or without intimation to the borrower. 4oan disburse!ent letter: 6y this letter" the borrower re'uest to disburse the loan sanctioned in his favor by the bank. *ll the persons" in whose names the account is opened" should sign the letter. 1harge over bonds or certi&icate o& shares etc.: %t is a document given by the borrower to the banker declaring that the stocks" shares" debentures" securities and investments which are now deposited to the bank and which may from time to time be deposited by the borrower shall stand charged and hypothecated to bank as security for the payment to bank on demand of the balance of the loan amount and of any other indebtedness and liability to the bank of any kind whether mature or accruing and whether incurred alone or :ointly with others and whether as principal or surety including all interest document" commission" e+penses" charges and costs incurred by the bank in relation any such indebtedness or liability. 4etter o& lien against &i7ed de osit recei t: 6y this letter" the borrower gives the right to the bank to hold the >i+ed ?eposit @eceipt (>?@) if the borrower fails to repay or ad:ust the loan on demand or discharge the liabilities to bank. %n this letter" >?@ number" issuing branch" name of the favoring person and amount are written. 4etter o& authorit' to encash ,D": 6y this letter" the borrower gives the right to bank to encash the >?@ in case of need. #ere the amount and address of the bank of issue and the signature of the holders are given. *e!orandu! o& de osit o& title deeds:

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%t is a deed that is necessary in case of mortgage by deposit of title deed or e'uitable mortgage. #ere the mortgagor agrees that he has deposited necessary documents of the property to the bank. -' othecation o& goods to secured a de!and cash credit or overdra&t or loan account: #ere the amount of loan" interest" and the name of the borrowers are written. #ere the bank and the borrowers agree on the following terms9 Security 6alance due to the bank 6orrowers not to the encumber or parts of the goods Sale %nspection %nsurance &argin %nterest rate @epayment Sale of goods ?eficiency Surplus Statement of account 7ontinuing security 3itle Saving 7hange of borrowers and Gotices. <uarantee b' third art': Sometimes third party guarantee is needed for allowing loan. #ere third party gives the guarantee that of the principal debtor fails to repay the loan" and then the guarantor will be bound to repay the loan to bank. -' othecation o& vehicle: 3his document is necessary in case of transport loan. #ere the borrower hypothecated the vehicle to the bank. %n case of failure of repay the loan" bank will sell the vehicle to collect the money. )9

0.E.2 Docu!ents re?uired &or relevant advances:

1. 4oan: a. b. c. d. e. f. g. h. i. :. k. l. m. ? 4 Gote signed on revenue stamp $etter of arrangement. $etter of disbursement. $etter of partnership (partnership firm) or 6oard of resolution (limited companies). $etter of pledge. $etter of hypothecation. $etter of lien and ownership L share transfer form (in case of advance against share). $etter of lien for packing credit. $etter of lien (in case of advance against > ? @) $etter of lien and transfer authority.(in case of advance against 4 S 4" 6 S 4) $egal documents for mortgage of property (*s draft by legal adviser) 7opy of sanction letter mentioning details of terms and condition duly acknowledge by the borrower 3rust receipt.

2. $verdra&t: a. b. c. d. e. f. g. h. a. b. c. d. ? 4 Gote. $etter of partnership. $etter of arrangement. $etter of continuity. $etter of lien. $etter of lien and ownership Lshare transfer form (in case of advance against share). $etter of lien and transfer authority. $egal documents for mortgage of property. ? 4 Gote. $etter of partnership.(in case of partnership farm) or 6oard of resolution (in case of limited company) $etter of arrangement. $etter of continuity

3. 1ash 1redit:

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e. f. g. a. b. c. d. e.

$etter of hypothecation U%n case of cash credit (#ypothecation)V $egal documents for mortgage of property $etter of pledge or *greement of pledge. U%n case of cash credit (pledge)V

0. .ills urchased: ? 4 Gote. $etter of partnership. (in case of partnership farm) or 6oard of resolution( in case of limited company) $etter of arrangement. $etter of acceptance" where it calls for acceptance by the drawee. $etter of hypothecation of bill.

0.F 4oan #che!es $&&ered .' 1.4:

1onsu!er 1redit #che!e <eneral 4oan #che!e 4ease ,inance #!all and *ediu! +nter rise -ouse .uildingH) art!ent 4oan #che!e

0.F.1 1onsu!er 1redit #che!e:

7onsumer 7redit is the credit" which is provided to people having fi+ed but regular income for ac'uiring consumer durables and other assets for personal use to service from their monthly income. 7onsumer credit is a collateral free credit. $b%ectives o& the sche!e9 3o sell our services to a wide range of customers and increases our 77S portfolio. 3o introduce and carry on collateral free credit operation. 3o improve the standard of living of the fi+ed income bracket people. 3o take part in the socio5economic development of the country. 3o ensure access to credit by mass people as far as possible. #ecurit': a. 3he client will submit crossed che'ue in advance for all the stipulated instalments in favour of the bank towards repayment of loan including interest.

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b. 3he customer will provide following personal guaranteeL6ank ,uaranteeL%nsurance guarantee according to the 6ank0s 4rescribe formsLfinancial instruments. (a!e o& securit' 4ersonal ,uarantee >inancial %nstruments 6ank ,uarantee %nsurance ,uarantee 2wnership of vehicles %nsurance for Aehicle 7orporate ,uarantee 1harge Docu!ents: $etter of declaration ?emand 4romissory Gote $oan agreement under consumers 7redit Scheme $etter of #ypothecation $etter of ,uarantee $etter of *uthority 2ther @e'uired charge documents ,or a car or an' other vehicles: 4hotocopy of 6lue 6ookL 7ertificate of @egistration 4hotocopy of 7ertificate of %nsurance. Particulars >or Employee of govt. semi5govt.; corporate organi!ations. >or 6usinessmen and employees of Gon 7orporate 4rivate 2rgani!ations. 4ersonal ,uarantee will be waived. 4ersonal ,uarantee will be waived. 4ersonal ,uarantee will be waived Sole name of 6ankLCoint name of 6ank and customer. 7omprehensive coverage from acceptable %nsurance companies. >or corporate arrangement with #ead 2ffice approval.

#u ervision and *onitoring:

The !echanis! o& su ervision and !onitoring are as &ollo>s.

-.

 @egular checking the balance of clients S6L7? *L70s. @egular communication with defaulting customers and guarantors5 physicallyLover telephone. %ssuance of letter to customers immediately after dishonour of che'ue.

%ssuance of letter to defaulting customers and respective guarantors. 7ontact the employers of the defaulting customers (*fter =3 overdue instalment). %ssuance of legal notice to the customers and guarantors prior to the classification of the loan %ssuance of appreciation L greeting letter to the regular customers. 4eriodical visit to the customer to maintain relationship and supervision of supplied articles. $egal actions to be taken after all possible efforts to recover the 6ank0s dues have gone in vain.

0.F.2 <eneral 4oan #che!e

?epending on the various nature of financing" all the lending activities have been brought under the following ,eneral $oan9 #hort ter! 4oan *ediu! ter! 4oan 4ong ter! 4oan

*ore s eci&icall' this is classi&ied as &ollo>s:

i) ii) i) vi) vii) 1ontinuous 4oans: >or Small Enterprise >inancing(SE>)" 7onsumer >inancing(7>)" 2rher than SE> ;7> etc. De!and 4oans: >or SE>" 7>"; others. Ter! 4oans u to 2 'ears: >or SE>" 7> (other than #> ;$4)" #ouse >inancing (#>)" Ter! 4oans over 2 'ears: >or the same as previous. #hort Ter! )gro=1redit and *icro credit

$oans for 4rofessionals to Set Hp 6usiness ($4)" 2thers(other than S&E ; 7>)

3he loans are allowed to individualLfirmLindustries for a specific purpose but for a definite period and generally repayable by installments fall under this head. 3his type of lending are mainly allowed to accommodate financing under the categories (i) $arge ; &edium Scale %ndustry and (ii) Small ; 7ottage %ndustry. Aery often term financing for (1) *griculture (ii) 2thers.

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0.F.3 4ease ,inance

$ease financing is one of the most convenient long5term sources of ac'uiring capital machinery and e'uipment. * client is given the opportunity to have a right to use an asset" usually for an agreed period of time" against payment of rent. 3he lease is obligated to make lease payment until the e+piration of the lease agreement" which corresponds to the useful life of the asset.

$b%ectives
1it' .ank 4td. has introduced the lease &inance >ith the &ollo>ing ob%ectives: 3o assist the genuine and capable entrepreneurs for ac'uiring E'uipments to undertake enterprises without e'uity. 3o encourage the new and educated young entrepreneurs to undertake productive venture and demonstrate their creativity and thereby participate in the national development. 3o participate in the industrial development of the country. 7apital &achinery and

4ease Ite!sH +?ui !ent

7ity 6ank $td. offers lease finance for ac'uiring the use capital machinery" e'uipments" medical instruments" automobiles etc. 3he customers are entitled to decide the specification" price and model of the lease itemL e'uipment. 6ank will purchase the item (s) in accordance with the specifications given by the clients.

#ecurit'
3he entrepreneur will be re'uired to provide the following securities9 1.3he lease items will remain in the name of the 6ank i.e. 6ank will be the sole owner of the leased items. 2.7ollateral securities having li'uidation value covering at least 1==E of the amount of finance. 3.?eposit of $isted Shares" Gational Savings certificates" %76 unit certificates" *ssignment of $ife %nsurance 4olicies" 6ank ,uarantee" and %nsurance ,uarantee etc. will also be acceptable as collateral securities. 0.%n case of e+isting industrial units re'uiring 6&@E" change may be created the e+isting >i+ed *ssets as collateral securities for the finances. %n case of e+isting *utomobile enterprise" creation of charge on the e+isting vehicles will also be acceptable as collateral securities. 2.

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%n case of default in payment of lease rental for consecutive . (two) months" the %n case of taking over the lease items by the 6ank before maturity the $essee

6ank will take over the lease items without giving any prior notice. will be liable for the loss" if any" caused to the 6ank for such 4remature taking over. 3he 6ank will e+ercise close and intensive supervision of such pro:ect. *n officer of the 6ank will be engaged separately for supervision of such pro:ects to ensure proper utili!ation of the lease items and time repayment of the monthly rentals.

Trans ort 4easing:

3ransport is one of the most widely traded lease items in the developed as well as developing countries of the world. 3he reasons behind success of transport leasing in many countries could by attributed to ta+ benefit" efficiency in found management and above all to the fact that user could e+clusively use the leased transport by paying reasonable rental. 3he ma:or issues of transport leasing are detailed below9 1. #election o& @ehicle 3he customer has the right to decide the brand of vehicle" negotiate the price with the manufacturers of dealers" and arrange after sales services with the supplier. 2. )c?uisition 1ost 3he ac'uisition cost shall be the actual purchase price after bargaining and all other incidental e+penses incurred by the 6ank including financial e+penses. 3. 4ease Ter! %n case of 3ransport leasing" the term shall be ma+imum < (four) years starting from the date of e+ecution. 6ut when the lease is cancelled for any reason the lessee will have to return the vehicle to the 6ank together with the stipulated loss value mentioned in the agreement. 0. 4ease "ental $ease rentals calculated on the basis of ac'uisition cost and lease term shall be paid monthly. 2. Insurance 3he vehicle shall be covered by %nsurance throughout the lease term with the coverage decided by the 6ank. 3he lessee shall pay the premium. 3. "e air B *aintenance 3he lessee shall be obliged to maintain the vehicle for ensuring its normal operation and shall be solely responsible for lossL damage as long as it is in his possession. *ccordingly" repairing and maintenance cost for normal operation during the lease period shall be borne by the lessee. -)

A. "egistration 3he lessee will arrange the registration of the vehicle in the name of the 6ank at his own cost and also pay annual ta+es and fees payable to the concerned authority. %n case of his failure" 6ank will do it and recover the cost from him.

0.F.0 #!all and *ediu! +nter rise 1redit sche!e:

%t is the prime concern for the nation to generate income through creation of :ob opportunity and employment. 7reation of :ob opportunity in large scale is not a easy task. Bhat can be done is to help self5employment through financial support. >or this @eason 7ity 6ank has chosen the scheme S&E to boost up entrepreneurs with innovative idea" spirit and potentiality.

areas.

$b%ectives o& the #che!e:

3o 4rovide credit >acilities to the Small and &edium si!e entrepreneurs in urban and sub5urban 3o flow credit for creation of employment and generation of income 3o assist potential entrepreneurs. 3o assist dependence on moneylender. 3o make the small and medium enterprise self5reliant. 3o develop saving habit and making ac'uaintance with banking facilities. 3o inspire for undertaking small pro:ects for creation of employment.

#ecurities a) @egistered mortgage of loan and building (if available). b) &ortgage L *ssignment of possession right. c) *ssignment of security money" advance rent" if any. d) *ssignment of trade receivable not older than 9= days. e) #ypothecation of machineries" e'uipment" vehicles" stock5in5trade" raw materials" work5in5process and finished good. &) 4ersonal ,uarantee from person acceptable to the bank. g) 4ost dated che'ue. h) $ien on depositsLsaving certificatesLfinancial certificates. i) *ny other securities to be deemed suitable by the bank depending on the situation like insurance guarantee" assignment of contract" security money etc.

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 Period o& 4oan: a) %n case of continuous loan9 =1(one) year. b) %n case of 3erm $oan9 )(five) years or above. *ode o& "e a'!ent:

i) %n case of continuous loan credit turnover in the account must be e'ual to the limit in a 'uarter and full ad:ustment within the validity period. ii) %n case of term loan" the loan should be repaid by monthly instalments through post5date che'ues as per schedule. iii) Sale proceed should be deposited in the account regularly.

0.F.2 -ouse .uilding H ) art!ent 4oan #che!e

$oans allowed to individualLenterprises for construction of house (residential or commercial) fall under this type of advance. 3he amount is repayable by monthly installment within a specified period. Such advances are known as $oan (-.4=<+(). $oans allowed to our 6ank Employees for purchase Lconstruction of house shall be headed Staff $oan (-.4=#T),,).

0.1D Issuing $& .ank <uarantee:

6ank ,uarantee is a profitable product of a bank. Sometimes customers need bank guarantee for their business purposes. 76$ offers three types of guarantee I i. ii. iii. .id bond: 3his guarantee is given to the business people for the purpose of participating in the tender. Per&or!ance guarantee: 3his guarantee is in favour of the client for assuring that the client will perform some specific works. )dvance a'!ent securit': 6y this guarantee" 76$ gives assurance of payment in case of advance payment. %t helps in deposit mobili!ation. 3he procedure of each guarantee is same. >or issuing bank guarantee" customers have to apply to 76$ in their own pad. 3hen bank issue guarantee on :udicial stamp. 6ut the conditions for issuing bank guarantee are that 555 1. 7ustomers must maintain a current account.

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.. 7ustomers must keep certain percentage of guaranteed money as margin. a. >urthermore" customer has to maintain certain some other re'uirements.

0.1D.1 )ccounting Treat!ent "egarding .ank <uarantee:

Bhile issuing guarantee" bank performs the following function9 7ustomer0s $iability ?r. 6anker0s $iability 7r. 6anker0s liability becomes credit because the guarantee becomes the liability of the bank. %f the bank pays the guaranteed amount to the beneficiary" then 76$ reverses the entry and collects money from the customer and issues the bank draft. 6ut sometimes" while the guarantee remains unused" customer gives another written in his own pad. 3hen again bank reverse the previous entry. 76$ also issue revolving bank guarantee.

0.11 1redit Disburse!ent:

#aving completely and accurately prepare the necessary loan documents" the loan officer ready to disburse the loan to the borrower0s loan account. *fter disbursement" the loan needs to be monitored to ensure whether the terms and conditions of the loan fulfilled by both bank and client or not.

0.12 1redit *onitoring9 ,ollo>=U )nd #u ervision:

7redit monitoring implies that the checking of the pattern of use of the disbursed fund to ensure whether it is used for the right purpose or not. 76$ 2fficer checks on the following points9 a. 3he borrower0s behaviour of turnover. b. 3he information regarding the profitability" li'uidity" cash flow situation and trend in sales in maintaining various ratios. 4ending "ate $&&ered b' 1.4: #l. 1 2 3 0 2 3 Particulars 3erm $oan (4ro:ect $oan) Borking 7apital >unding 4re5Shipment E+port 7redit (4acking 7redit) 3rade >inance (7ash 7redit" #ire 4urchase" 3@ $oan" %64 etc) SmallL7ottage and S&E (3erm $oan) 2ther Special 4rogram (2ther than 7ommercial) 4ending "ate 1<.==E to 1-.==E 1-.==E D.==E 1-.==E 1-.==E to 1(.==E 1-.==E

-(

2thers9 5 a) $oan against >?@" &6?S" 77S and all

3.==E above the ?eposit @ate 1<.==E to 1-.==E

other scheme ?eposit of 4rime 6ank $imited b) $oan against Shares Source9 *dvance ?epartment" 7ity 6ank" 6.6. *venue 6ranch

0.13 1lassi&ication Procedure:

*fter the date of e+piry" if the borrowers do not ad:ust their loan" 76$ at first gives a notice to them. 3he period of giving notice depends on the nature of the loan. >or continuous loan" 76$ gives notice for three months. >or five5year term loan" 76$ gives notice for si+ months. *nd for more than five5year term loan" 76$ gives notice for more than 1. months. *fter giving notice" if the borrower does not repay the loan" the loan will be considered as classified. 2th #T)<+ 14)##I,I1)TI$( 1lassi&ication #tatus Unclassi&ied (U1) Standard Special &ention *ccount (S&*) Substandard (SS) De!and 4oan = to . months 3 months or above below but 4ength o& overdue "ate o& 1ontinuous Ter! 4oan Ter! 4oan Provision 4oan (.elo> 2 /r) ()bove 2 /r) = to . = to . months = to . 1E months 3 months or above but below months - months and above but below 9 months 9 months and above but below 1. months 1. months and above 3 months or above but below months - months or above but below 1. months 1. months or above but below 1( months 1( months or above months 3 months or above but below 1. months 1. months or above but below 1( months 1( months or above but below .< months .< months or above 1==E )=E .=E )E

1lassi&ied (14)

months - months or above below but 9

?oubtful (?>)

months 9 months or above below but 1.

months 6ad ; $oss 1. months or (6$) above

,ollo>ing !easures are available &or non=re a'!ent o& loan= 3o issue notice for ad:ustment

-9

3o issue legal notice for filing suite. 3o encash securities (in case of demand loan) 3o issue legal notice for selling the hypothecated goods (in case of transport loan" 3o issue suite for foreclosure. >inally to sue in money loan court or insolvency court which is suitable.

cash credit5hypo).

0.10 1onclusion
7redit &anagement policies and techni'ues used in 76$ at present is comparable to international standards. 3he officials follow the policy very strictly. 3hey are choosy and conservative in sanctioning loan. 3he proposal is thoroughly scrutini!ed by the loan sanctioning authority. 3he total function of the credit division is monitored periodically. 3he bank0s classified loan to the total *dvance is very low. &anagement and others related to 7ity 6ank are trying to formulate new services and products.

Chapter Five

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PROB+EMS9 RECOMMENDATION : CONC+USION

Proble!s
7ity 6ank $td. is one of the most potential 6anks in the banking sector. %t has a large portfolio with huge assets to meet up its liabilities and the management of this bank is e'uipped with the e+pert bankers and managers in all level of management. So it is not an easy :ob to find out the drawbacks of this branch. *ccording to my observation and study the following limitations are prevailing9

Insu&&icient industrial loans:

%t seemed to me that the bank having a large amount of deposit is not encouraging the large scale producers that much of long term industrial loans to accelerate the economy as well as to help the economy to solve unemployment problem.

I! ro er Division o& 4abour In The Desk:

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3here is lack of division of labour in the branch. 3herefore every body has to handle every type of banking services. 3his decreases the level of performance of the personnel" though it reduces monotonousness. 6ut lack of division of labour hampers the discipline of working environment. So customers are to wait for some time for the desired service" which is contrary to the 6aking0s ob:ective.

Insu&&icient *an o>er:

3he number of human resources in import section and in clearing section is really insufficient to give services to huge number of customers. So" number of staff should be increased in those sections.

4ack o& having .usiness :no>ledge

&ost of the personnel have no business education. So the are making mistakes in some cases like selection of customers" financial analysis" dealing with customers" selection of account holders and in some other cases.

#e!i skilled -u!an "esources9

#uman resource is another sector for the branch to be developed urgently. #uman resources" in many cases" have limited banking knowledge. &a:ority of the human resources have limited basic knowledge regarding money" banking" finance and accounting.

Insu&&icient 1ash 1ounting ,acilit':

7ash section is not well e'uipped. $imited cash counting machines create bottleneck which delay to serve to customer.

I! ro er *aintenance o& ,iles:

7ity 6ank $td. gives personali!ed services. 3hey cannot properly maintain the customer files. %n many cases" application forms are not properly filled up and documents are not properly filed.

I! ro er *aintenance o& $&&ice Pre!ises:

6. 6. *ve. 6ranch is supposed to be very neat and clean and well decorated. 6ut sometimes it loses its glamour. 3he cleaners are not regular in their duties and files and papers are kept here and there by the officers during the busy hour. &oreover" the sitting arrangement is very insufficient comparing with the number of customers.

Inco! lete 1o!!unication #'ste! and *aintenance o& *achineries:

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Sometimes 7ommunication System remains out of order and it is also true for the photocopiers. $ess attention is given on proper maintenance of phone" computer" fa+ machine and photocopier.

Insu&&icient ,or!s and @ouchers:

3here are always shortages of application forms" vouchers" etc. in the branch.

#lo> online service:

2nline service is not dynamic and moderni!ed. Sometimes services are being delayed. >or this reasons" customers are to wait for long time" which is a threat for loosing customer.

"eco!!endation
%t is a large organi!ation and banking is a comple+ and comprehensive task. So it is difficult for me" by my little knowledge" to recommend to solve the problems. 6ut as an eyewitness of some problems % am :ust giving some instructions" which may be followed. So 'o! "3e #m !o$eme&" o' "3e %e!$#(e "3e 'ollo8#&; mea%*!e% ma< be "a=e&:

Providing !ore industrial loans:

&uch of long term industrial loans should be provided to accelerate the economy as well as to help the economy to solve unemployment problem.

+nsure Pro er Division o& 4abor In The Desk:

3o ensure proper service proper division should be maintained.

+nsure #u&&icient *an o>er:

3he number of human resources in import section and in clearing section is really insufficient to give services to huge number of customers. So" number of staff should be increased in those sections.

(eed Personnel having .usiness :no>ledge

&ost of the personnel have no business education. So selection of employee from business school can give proper solution.

Develo !ent o& -u!an "esources9

#uman resource is another sector for the branch to be developed urgently. #uman resources" in the branch" need to be e'uipped with ade'uate banking knowledge. &a:ority of the human resources must have basic knowledge regarding money" banking" finance and accounting.

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Bithout proper knowledge in these sub:ects" efficiency cannot be optimi!ed. 6ank can arrange training program on these sub:ects.

1ash 1ounting Procedure #hould .e Develo ed:

7ash section should be well e'uipped. &ore cash counting machine should set up.

+nsure Pro er *aintenance o& ,iles:

7ity 6ank $td. gives personali!ed services. *ll the officers have to give concentration to the customers" while maintaining the customer files. Every staff should try to reduce these irregularities.

+nsure Pro er *aintenance o& $&&ice Pre!ises:

6. 6. *ve. 6ranch is supposed to be very neat and clean and well decorated. 3his habit must be changed. &oreover" the sitting arrangement is very insufficient comparing with the number of customers. So this branch of 76$ must pay attention to this issue.

+nsure

Pro er

1o!!unication

#'ste!

and

*aintenance

o&

*achineries:
Sometimes 7ommunication System remains out of order and it is also true for the photocopiers. *ttention should be given on proper maintenance of phone" computer" fa+ machine and photocopier.

+nsure #u&&icient ,or!s and @ouchers:

3here are always shortages of application forms" vouchers" etc. in the branch. 3hese >orms and vouchers must be maintained in sufficient 'uantity. 2therwise" customer service will be hampered

$&&er #o!e 4oan and De osit #che!e +7clusivel' &or The Pre!iu! 1usto!ers:
*ll the lending and savings packages offered to the 4remium customers are same as offered to the general customers" e+cepting the waiver of service charges for 4remium 2nes. 7ity 6ank $imited should try to introduce more attractive lending and savings scheme to its 4remium customers to create more business for the 6ank. 3he 6ank can pay more attention to this segment of customers" as it is the most solvent group from which income can be generated if the package is designed properly.

*ore <i&ts and Discounts &or The Pre!iu! 1usto!ers:

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4remium 7ustomer should be offered occasional gifts and discounts" which can make the 4remium Service more attractive and keep consumer delight. 3he interest rates on several loan and deposit schemes should be differentiated for the 4remium customers.

,ast online service:

2nline service should be dynamic and moderni!ed. Sometimes services are being delayed. >or this reasons" customers are to wait for long time" which is a threat for loosing customer.

1onclusion
Gotwithstanding some limitations 3he 7ity 6ank $td. is doing better and holding a good percentages of market share in banking sector. 76$" the first generation bank in 6angladesh came into being in 19(3 under the entrepreneurship of 1. prominent businessmen in the country. Established with the ob:ective of bringing about a 'ualitative change in the sphere of banking and financial management" the bank today serves its customers spread across DD branches within 6angladesh and 3== overseas connections. 76$ provides services tailored to the specific needs of the customers in the area of trade" comers and industry" besides the domestic network. Bhile services like 7redit 7ards" *3&s and SB%>3 payment systems are already in place" the bank plans to introduce @eal 3ime 2nline %ntegrated 6anking System with all modern delivery channels in the future. 76$ has earned recognition at the national and international level. %t was one of the 1. banks in 6angladesh to be evaluated by *S%* BEE for *sset" ?eposit and 4rofit and was ranked among the top )== banks in *sia. 6esides" the bank also received the /3op 3en 7ompany1 awarded from the 4rime &inister of 3he 4eople0s @epublic of 6angladesh for the period 199.5 93. So" if the 6ank can remove all of its present problems" it will be able to reach to its mission ; vision.

.ibliogra h':
6rochures of 7ity 6ank $imited. 7ity 6ank0s Bebsite5>>>.cit'bank.co! 7ity 6ank *nnual @eport .==). D)

,eorge #. #empel and ?onald ,. Simonson (199()" 6ank &anagement9 3est and 7ases" )th Edition" Gew 8ork9 South5Bestern 4ub. Coel 6essis (.==1) @isk &anagement in 6anking" 3 rd Edition" Gew 8ork9 Cohn Biley ; Sons %ns. 4eter S. @ose (.==1)" 7ommercial 6ank &anagement" ) th Edition" Gew 8ork9 %rwin 4rofessional 4ub. 4eter S. @ose and Sylvia 7onway #udgins (.==3)" 6ank &anagement ; >inancial Services" )th Edition" Gew 8ork9 &c,raw5#ill. @eading &aterials on ,eneral 6anking ; 7redit ?epartment. @adhaswami" &. and S. A. Aasudevan (.===)" 3e+t 6ook of 6anking" 3 rd Edition" Gew ?elhi9 S. 7hand ; 7ompany $imited. 3imothy B. och and Steven Scott &acdonald (.==.)" 6ank &anagement" ) th Edition" Gew 8ork9 South5 Bestern 4ub. Boelfel" 7harles C. (199<)" Encyclopedia of 6anking and >inance I 1= th Edition" Gew ?elhi9 S. 7hand ; 7ompany $imited.

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