General Banking Operation of Jmuna Bank Limited
Executive Summary This report not only explores Jamuna Bankâ€™s activities as one of the leading non-government companies, but also highlights the operation system & the role of Jamuna Bank Limited in the financial sectors of Bangladesh. Jamuna Bank Limited is a private commercial Bank which is one of the most popular bank in Bangladesh. The Bank started its operation from 3rd June, 2001, during this report it could improve its image in the society as a commercial Bank. Now it has 43 branches in Bangladesh. All branches are situated in the highly demanded areas. As a new Bank, Jamuna Bank Limited has been competing with other private banks where all the banks are adopting different incentive programs to attract the customers. Accordingly, JBL is offering different type of deposit scheme bearing highest rate of return. Lakhpoti Deposit Scheme, Monthly Benefit Scheme, Monthly Saving Scheme, Marriage Deposit Scheme, Double Growth Deposit Scheme, Education Saving Scheme, and Millionaire Deposit Scheme are the most popular offers that are completely new innovation in the banking sector and widely accepted by the clients. With crumble down of the world economy caused by nine eleven attack. It is observed that the competition becomes intensive in the globalization process. Our country has also participated in the race for its existence. Therefore, it becomes obvious for us to increase the field industrialization. Jamuna Bank Limited is playing a vital role in developing industry of the country and putting the national economy competitive with world economy. Developing country like Bangladesh urges a huge amount of investment both in the private and public sectors. Jamuna Bank Limited has been providing a lot of assistance regarding this investment process through its Investment and Foreign Exchange Department. 1.1 Preface Commercial banks in Bangladesh economy are facing increased competition for their business in coming days, like any other emerging market economies. Their business is no longer remaining easy as they were earlier. The real change in the banking business has started to come with the governmentâ€™s decision to allow the business in the private sector in the middle of the eightyâ€™s. This report is an effort to reflect a clear idea about the strategies, activities, and performance of Jamuna Bank Ltd. regarding general banking activities. The General Banking department is the vital part for financial institution. It is linked with all other department. So it is very important to have an effective and sound management System in banking business. Bank is an important and the most appropriate institution for the necessity of the use of money and the protection of the money. As a BBA student, financial institutions are the most
appropriate field to gather the experience and among the financial institutions, Bank is the most prominent place. All over the world the dimension of banking has been altering rapidly due to deregulation, technological modernism and globalization. Now bank must complete the market place both with local institution as well as foreign ones. To survive in this competitive banking world banks entail to develop appropriate financial structure, enlarge professionalism in the sense of developing appropriate manpower structure and expertise and experience. 1.2 Objective of the Report The objectives help in explaining the broad objectives are as follows:
• To give an overview on Jamuna Bank Ltd. and its services, • Focusing on the brief description of general banking, • To know deeply about general banking procedure, • To examine bank’s performance in general banking activities, • To know how they minimize general banking risks, • To focus on some other activities of general banking, • To specify some findings on given topic, and • To reveal some recommendations for better performance in general banking 1.3 Methodology The methodology of this report is very different from conventional reports. Have emphasized on the practical observation though this report has to need some primary and secondary data. Nevertheless, eventually almost the entire report consists of my practical observation. 1.3.1 Source of Data Collection While preparing the report, I have taken information from the following sources: Primary Sources 1. Personal Interview – Face-to-face conversation and in depth interview with the respective officers of the branch. 2. Personal observation – Observing the procedure of banking activities followed by each department. 3. Practical work exposures on different areas of the branch. 4. Informal conversation with the clients or customers. 5. Relevant documents related to the study as provided by the officers. Observation of banking activities. 6. Overflowing Conversation with the in-charge of general banking department of Jamuna Bank Ltd, Dhanmondi Branch. 7. Working with my own experience while internship program. Secondary Sources
• • • • • • • •
Annual report (2007) of the bank, Periodicals published by Bangladesh Bank, Different publications regarding banking functions Websites and Newsletters are also used as major sources. Daily diary (containing my activities of practical orientation in Jamuna Bank Ltd.) maintained by me, Various publications on Bank, Website of Bangladesh Bank, and Different circulars issued by Head Office and Bangladesh Bank
1.4 Limitation Some of the limitations faced in preparing this report are: • • •
• • • • • •
It was very difficult to collect the information from various personnel for their job constraint. Bank secrecy posed a major problem since discloser of some information’s been restricted The officers at the General Banking Department are very much busy with their daily activities. They are interested to help me but have no time to do that. This is the main limitation of the study and the customers are also seem to busy. Sufficient records, publications, facts & figures are not available. These constrains narrowed the scope of real analysis. There were some difficulties in understanding some activities due to not being relevant to the theoretical knowledge. Due to confidentiality the Bank’s policy restricts disclosing some data. The study of such a short course of time is not free from limitation. So time limitation is the main point of limitation. The data relevant for the analysis report writing sometimes could not be collected due to excessive year-ending workload at the branch. During the month of January in the branch, there was excessive year-ending workload, which sometimes acts as a barrier on the way of my effort.
2.1 Introduction of Jamuna Bank Ltd Bank is a financial institution. The economy is mostly dependent on the bank since the bank facilitates the economic and financial transactions. Jamuna bank limited is a fast growing private sector bank and the bank is already has set a slot in terms of quality services to the customers and value addition for the shareholders. The bank made satisfactory progress in all areas of business operation in 2010. Jamuna Bank Ltd. is one of the few banks permitted by the Bangladesh in the early 90’s. These banks are known as the second-generation banks and fortunate to remain immune from the bad loan culture. Jamuna Bank Limited was designed to provide commercial and investment banking services to all types of customer ranging from small entrepreneur to big business firms. Besides investment in trade and commerce, the bank participates in the socioeconomic development through the participation in priority sectors like agriculture, industry, housing and self-employment. Jamuna Bank Limited wants
to establish, maintain, and conduct all types of banking, investments and businesses in Bangladesh and abroad with superior service quality and performance. 2.2 History of JBL Jamuna Bank Limited (JBL) is a Banking Company registered under the Companies Act, 1994 with its Head Office at Printers Building (2nd & 8th Floor), 5, Rajuk Avenue, Dhaka-1000. The Bank started its operation from 3rd June 2001. Jamuna Bank Limited is a highly capitalized new generation Bank with an Authorized Capital and Paid-up Capital of Tk.1600.00 million and Tk.390.00 million respectively. The Paid-up Capital has been raised to 429.00 million and the total equity of the bank stands at 725.00 million as on June 30, 2005. Currently the Bank has 41 (Forty One ) branches 16 in Dhaka, 8 in Chittagong, 2 in Gazipur, 3 in Sylhet, 1 in Bogra, 2 in Naogaon, 1 in Munshigang, 1 in Shirajganj, 1 in Rajshahi, 1 in Narayanganj, 1 in Kushtia, 1 in Dinajpur, 1 in Noakhali, 2 in Comilla (including 10 Rural Branches). The Bank undertakes all types of banking transactions to support the development of trade and commerce of the country. JBL's services are also available for the entrepreneurs to set up new ventures and BMRE of industrial units. Jamuna Bank Ltd., the only Bengali named new generation private commercial bank was established by a group of winning local entrepreneurs conceiving an idea of creating a model banking institution with different outlook to offer the valued customers, a comprehensive range of financial services and innovative products for sustainable mutual growth and prosperity. The sponsors are reputed personalities in the filed of trade, commerce and industries. The Bank is being managed and operated by a group of highly educated and professional team with diversified experience in finance and banking. The Management of the bank constantly focuses on understanding and anticipating customers needs. The scenario of banking business is changing day by day, so the bank's responsibility is to device strategy and new products to cope with the changing environment. Jamuna Bank Ltd. has already achieved tremendous progress within only two years. The bank has already ranked as one of the quality service providers & is known for its reputation. Jamuna Bank offers different types of Corporate and Personal Banking Services involving all segments of the society within the purview of rules and regulations laid down by the Central Bank and other regulatory authorities. Jamuna Bank has launched its Online Banking services on April 05, 2005 2.3 Objective of JBL Objectives represent the results expected from pursuing certain strategies. Objective should be quantitative, measurable, realistic, understandable, challenging, hierarchical, obtainable and congruent among organizational units. Jamuna Bank has established their objectives to achieve their strategic and financial targets to have strong competitive advantage in the banking sector. The objectives for which JBL is established are â€“ O O O O O
To earn and maintain CAMEL rating strong, To establish relationship banking, To remain one of the best bank in Bangladesh, To introduce fully automated banking system, To ensure adequate rate of return on investment,
O O O O O
To keep risk position at an acceptable rate, To maintain adequate liquidity, To maintain healthy growth of business with desired image, To control the system & ensure the transparency, Proper utilization of resources
2.4 Vision of JBL Its Vision is to become a leading banking institution and to play a pivotal role in the development of the country. 2.5 Mission of JBL The bank is committed to satisfying diverse needs of customers through an array of products at a competitive price by using appropriate technology and providing timely service so that a sustainable growth, reasonable return and contribution to the development of the country can be ensured with a motivated and professional work-force. 2.6 Ethics & Social Responsibilities of JBL An organization cannot move along. Organization needs people to generate its activities & people needs organization to get some kind of services. Southeast bank is an organization that is concerned to maximize its profit along with maintaining some kind of social responsibilities. It is fully devoted to fulfill the needs for its customers’ satisfaction as well as it is involved socio-economic development activities. 2.7 Strategies of JBL The Strategies of JBL are –
• • • • • • • • •
To manage and operate the Bank in the most efficient manner to enhance financial performance and to control cost of fund. To strive for customer satisfaction through quality control and delivery of timely services. To identify customers' credit and other banking needs and monitor their perception towards our performance in meeting those requirements. To review and update policies, procedures and practices to enhance the ability to extend better service to customers. To train and develop all employees and provide them adequate resources so that customers' needs can be reasonably addressed. To promote organizational effectiveness by openly communicating company plans, policies, practices and procedures to employees in a timely fashion. To cultivate a working environment that fosters positive motivation for improved performance. To diversify portfolio both in the retail and wholesale market. To increase direct contact with customers in order to cultivate a closer relationship between the bank and its customers.
2.8 Capital and Branches Jamuna Bank Limited is a highly capitalized new generation Bank with an Authorized Capital and Paid-up Capital of Tk.1600.00 million and Tk.390.00 million respectively. The Paid-up Capital has been raised to 1225.71 million and the authorized capital has been enhanced to tk.4000.00 million as on December 2007. Currently the Bank has 43(Forty three) branches 18 in Dhaka, 2 in Gazipur, 8 in Chittagong, 3 in Sylhet, 1 in Bogra, 2 in Naogaon, 1 in Munshigang and 1 in Narayanganj, 1 in Rajshahi, 1 in Basurhat, 1 in Noakhali, 1 in Shirajgonj, 1 in Dinajpur and 1 in Kushtia ,1 in comilla (including nine Rural and 2 Islamic Banking Branches) 4 branches will be opened at commercially important locations during the year 2010. To provide clientele services in respect of international trade it has established wide correspondent banking relationship with local and foreign banks covering major trade and financial centers at home and abroad.
2.9 Growth of Jamuna Bank Jamuna Bank Ltd., the only Bengali named new generation private commercial bank was established by a group of winning local entrepreneurs conceiving an idea of creating a model banking institution with different outlook to offer the valued customers, a comprehensive range of financial services and innovative products for sustainable mutual growth and prosperity. The bank has already ranked as one of the quality service providers & is known for its reputation. 2.10 Corporate Slogan â€œYOUR PARTNER FOR GROWTHâ€? 2.11 Management Style of JBL Now the companies face the challenge of the new economy, the global challenge, the challenge of meeting stockholderâ€™s needs and the high performance work system challenge. JBL is aware of these challenges to meet its mission and goals. Directed by the mission to provide prompt and efficient services to clients, JBL has successfully celebrated its eighth year of operation. It is managed by a team of professionals having long experience in the banking industry. While the Board sets the management objectives and policies, the management is instrumental in providing the inputs and implementing the strategies set by the Board.
2.12 Hierarchy of JBL Chairman ↑ Managing Director (MD) ↑ Deputy Managing Director (DMD) ↑ Senior Executive Vice President (SEVP) ↑ Executive Vice President (EVP) ↑ Senior Vice President (SVP) ↑ Vice President (VP) ↑ Senior Assistant Vice President (SAVP) ↑ Assistant Vice President (AVP) ↑ Senior Principal Officer (SPO) ↑ Principal Officer ↑ Senior Officer ↑ Officer ↑ Junior Officer Figure1: Hierarchy of Jamuna Bank Ltd
2.13 Products & Services of JBL Figure: Products and services of Jamuna Bank limited
2.13.1 New Product & Services The bank has its concentration for new product and services development for satisfying its customer and increasing its customer base. The bank firmly believes that technology based product and services will play significant role in the performance of the bank as people are getting more
conscious about their service quality. They prefer now faster service with least cost. For delivering faster service, the bank has introduced diversified technical ways that are stated below – 2.13.1 .1 Online Banking Jamuna Bank Limited has introduced real-time any branch banking on April 05, 2005. Now, customers can withdraw and deposit money from any of its 23 branches located at Dhaka, Chittagong, Sylhet, Gazipur, Bogra, Naogaon, Narayanganj and Munshigonj. Our valued customers can also enjoy 24 hours banking service through ATM card from any of Q-cash ATMs located at Dhaka, Chittagong, Khulna, Sylhet and Bogra. All the existing customers of Jamuna Bank Limited will enjoy this service by default. Key features: • Centralized Database • Platform Independent • Real time any branch banking • Internet Banking Interface • ATM Interface • Corporate MIS facility Delivery Channels: • Branch Network • ATM Network • POS (Point of Sales) Network 2.13.1 .2 Corporate Banking The motto of JBL's Corporate Banking services is to provide personalized solutions to their customers. The Bank distinguishes and identifies corporate customers' need and designs tailored solutions accordingly. Jamuna Bank Ltd. offers a complete range of advisory, financing and operational services to its corporate client groups combining trade, treasury, investment and transactional banking activities in one package. Whether it is project finance, term loan, import or export deal, a working capital requirement or a forward cover for a foreign currency transaction, their Corporate Banking Managers will offer you the accurate solution. Their corporate Banking specialists will render high class service for speedy approvals and efficient processing to satisfy customer needs. Corporate Banking business envelops a broad range of businesses and industries. You can leverage on their know-how in the following sectors mainly: • Agro processing industry • Industry (Import Substitute / Export oriented) - Textile Spinning, Dyeing / Printing
Export Oriented Garments, Sweater
Food & Allied
Paper & Paper Products
Engineering, Steel Mills
Chemical and chemical products etc.
• • • • • • • • • •
Information Technology Real Estate & Construction Wholesale trade Transport, Hotels, Restaurants Non Bank Financial Institutions Loan Syndication Project Finance, Investment Banking Lease Finance, Hire Purchase, International Banking Export Finance Import Finance
184.108.40.206 Personal Banking Personal Banking of Jamuna Bank offers wide-ranging products and services matching the requirement of every customer. Transactional accounts, savings schemes or loan facilities from Jamuna Bank Ltd. make available you a unique mixture of easy and consummate service quality. They make every endeavor to ensure their clients' satisfaction. Their cooperative & friendly professionals working in the branches will make your visit an enjoyable experience. 220.127.116.11 International Trade Finance International Trade forms the major business activity undertaken by Jamuna Bank Ltd. The Bank with its worldwide correspondent network and close relationships with key financial institutions provides an extensive trade services network to handle your transactions efficiently. Personnel experienced in International Trade Finance staff their key branches in Dhaka, Chittagong, Sylhet and Naogaon. These offices are the focal point for processing import and Export transactions for both small and large corporate customers. We offer a complete range of Trade Finance services. Their professionals will work with you to develop solutions tailored to meet your requirements, through mobilizing their full range of trade services locally, and drawing on their global resources. We can offer you professional advice on all aspects of International Trade requirements, namely: • • • • • •
Issuing, advising and confirming of Documentary Credits. Pre-shipment and post-shipment finance. Negotiation and purchase of Export Bills. Discounting of Bills of Exchange. Collection of Bills. Assist customers to insure all risks. Foreign Currency Dealing etc.
18.104.22.168 List of Foreign Correspondents To provide International Trade related services we have established Correspondent Banking relationship with 336 locations of 106 world reputed Banks in more than 100 countries. Their main Correspondent Banks are – Citi Bank N.A., Standard Chartered, American Express Bank, Bank of New York, Bank of Nova Scotia, Duetche Bank, Dresdner Bank AG, Habib American Bank, Habib Bank AG Zurich, Bayerische Hypo Vareins Bank, Mashreq Bank PSC, Nordea Bank AB, Royal Bank of Canada, UBS AG, Union De Banques Arabes ET, Francaises, Wachovia Bank NA, Forties Bank S.A/NV, Svenska Handlesbanken, Bank of Ceylon, Banca Toscana, ABN Amro Bank, Commonwealth Bank of
Australia, Danske Bank A/S. Absa Bank Ltd., Agricultural Bank of Chaina, Banca Intesa SPA, Banca Italo Albanese, Banca Popolare Commercio E Industria SPA, Bank Austria Credittanstal AG, Bank Commonwealth, Bank Madiri (Europe), Bank of Cyprus, Bank of Bahrain and Kuwait, Bank of Jordan Ltd., Bank Sadarat Iran, Blue Nile Bank, Commercial Bank of Kuwait, Commercial Bank of Qatar Ltd., Development Bank of the Philippines, Dexia Bank SA, EON Bank Berhad, First International Merchant Bank PLC., Foreign Trade Bank of North Korea, Foreign Trade Bank of Vietnam, Hiroshima bank, HVB, Hungary RT, ICICI Bank Canada. Industrial and Commercial Bank of China, ING Bank NV, Islamic Bank of Yemen and for Finance & Investment, Korea Exchange Bank, National Commercial Bank, Shinhan Bank, State Bank of India (Canada) UFJ Bank Ltd., United Bank of India, Bank of Bhutan, Allied Bank Philippines.
2.13.1 .6 Foreign Remittance Jamuna Bank Ltd. has a network of 19 branches in Bangladesh and 4 more branches are going to be added to network soon. Remittance services are available at all branches and foreign remittances may be sent to any branch by the remitters favoring their beneficiaries. Remittances are credited to the account of beneficiaries instantly through Electronic Fund Transfer (EFT) mechanism or within shortest possible time. Jamuna Bank Ltd. has correspondent banking relationship with all major banks located in almost all the countries/cities. Expatriate Bangladeshis may send their hard earned foreign currencies through those banks or may contact any renowned banks nearby ( where they reside/work) to send their money to their dear ones in Bangladesh. To facilitate sending money in Bangladeshi Taka directly, Jamuna Bank Ltd. has Taka Drawing Arrangement with many banks/exchange companies in different countries. The expatriate Bangladeshis may send their money in BDT through the branches/subsidiaries of Jamuna Bank Ltd 2.13.1 .7 Credit Facilities • The main focus of Jamuna Bank Ltd. Credit Line/Program is financing business, trade and industrial activities through an effective delivery system. • Jamuna Bank Ltd. offers credit to almost all sectors of commercial activities having productive purpose. • The loan portfolio of the Bank encompasses a wide range of credit programs. • Credit is also offered to major thrust sectors, as earmarked by the govt., at a reduced interest rate to develop frontier industries. • Credit facilities are offered to individuals including housewives, businessmen, small and big business houses, traders, manufactures, corporate bodies, etc. • Loan is provided to the rural people for agricultural production and other off-farm activities. • Loan pricing system is customer friendly. • Jamuna customers enjoy Jamuna rate in lending and other services. • Quick appreciation, appraisal, decision and disbursement are ensured. • Credit facilities are extended as per guidelines of Bangladesh Bank (Central Bank of Bangladesh) and operational procedures of the Bank.
2.13.1 .8 Interest Rates of Loans & Advances Sl #
Type of Landings
10% (Mid Rate)
Term Loan to Large & Medium Scale Industry
14.00% (Mid Rate)
Term Loan to Small Industry
13.50% (Mid Rate)
Working Capital to Industry
14.00% (Mid Rate)
14.50% (Mid Rate)
14.50% (Mid Rate)
15.00% (Mid Rate)
Credit to Non Bank Financial Institution
15.00% (Mid Rate)
2.13.1 .9 Shop Finance Scheme Objectives 1. To enable the small business community to run the business smoothly
2. Facilitating expansion of the existing businesses 3. To improve the banking habit of self employed persons 4. Noted down that the government is also encouraging investment in SME sector. Categories of eligible business 1) Grocery/departmental/whole sale store 2) Confectionary/bakery (owned by the bakers) 3) Stationary shops 4) Cloth materials & small local garment traders 5) Shoe makers/shops 6) PVC & plastic product traders/small manufacturers 7) Tiles/sanitary items retailers 8) Computer/Photostat/Cyber Cafe 9) Electrical & electronic items retailers 10) Pharmacy
11) Gift shop/cosmetics shops 12) Restaurant/fast food joints 13) Hardwire shops 14) Glass/ceramic retail outlets 15) Sports kit retailers 16) Photo studio 17) Rod, Cement & C.I. Sheet (Tin) Shop 18) Engineering Workshop 19) Fertilizer & Pesticide shop
Maximum Loan Amount 1) Up to a maximum of 10.00 lac in single case or 60% of possession value (distress value to be considered) whichever is lower. However, loan size will depend on creditworthiness of the borrower and the decision of the sanctioning authority. 2) Branch Manager must verify the amount of possession money actually paid before recommending such proposal. Tenure of the loan limit Minimum 01 year - Maximum 03 years from the date of disbursement of the loan Eligibility criteria The applicant must fulfill the following criteria to be eligible for loans and advances under the scheme: i. Shop owner must run the establishment himself, having at least three years of successful business experience ii. Valid lease deed for a minimum period of 03 years up to 05 years iii. iv.
Satisfactory conducted deposit account with JBL for minimum 03 months.
Agree to abide by credit rules & regulations of JBL
vii. viii. ix.
To deposit the daily sales proceeds in the account maintained with JBL Furnishing net-worth of the applicant/client. Clean CIB The bank reserves the right to accept or reject any application without assigning any reason whatsoever. The intending borrower loanee shall apply through the letter head of the business firm or through a plain paper requesting the branch manager for sanction of loan under the Shop Finance Scheme.
Security i. Simple deposit of valid lease deed of agreement of the shop. ii.
A tripartite agreement to be signed in between leaseholder/shop owner/Bank- to the effect that the leaseholder cannot rent out or transfer the leased property without the written consent of the Bank.
iii. iv. v. vi.
The lease deed between the landlord and the borrower must be duly executed & the original lease deed should be kept in the Bank as part of document. Lease must contain provisions enabling the landlord to forfeit the lease and enable the bank to enforce a right to sell the possession of the shop to liquidate the default debt (if any). Letter of disclaimer by the landlord to facilitate the bank to liquidate the default loan (if any) Equal numbers of post dated cheques covering amount of each loan installment
Insurance All borrowing customers inventory i.e. Stock-in-trade will be insured against Fire, Rsd & other risks with the Bank mortgage clause cost of which will be borne by the shop owner/client/borrower. Repayment Schedule Repayment schedule should be as under: i. In case of 01 year, 10 monthly installments for the loan limit up to Tk. 3.00 lac with 02 month grace period from the date of disbursement ii. In case of 02 year, 22 monthly installments for the loan limit up to Tk.6.00 lac with 02 month grace period from the date of disbursement iii. In case of 03 year, 34 monthly installments for the loan limit above Tk.6.00 lac with 02 month grace period from the date of disbursement 2.13.1 .10 Q-Cash Round The Clock Banking Jamuna Bank Q-Cash ATM Card enables you to withdraw cash and do a variety of banking transactions 24 hours a day. Q-Cash ATMs are conveniently located covering major shopping centers, business and residential areas in Dhaka and Chittagong. ATMs in Sylhet, Khulna and other cities will soon start be introduced. The network will expand to cover the whole country within a short span of time. With a Jamuna Bank Q-Cash ATM card one can: i. Cash withdrawal Round The Clock from any Q-Cash logo marked ATM booths. ii. iii.
POS transaction (shopping malls, restaurants, jewellaries etc)
Utility Bill Payment facilities
ATM service available in Dhaka and Chittagong Withdrawal allowed from ATM's of Jamuna Bank Ltd., AB Bank, The City Bank, Jamuna Bank, IFIC Bank, Mercantile Bank, Pubali Bank, Eastern Bank Ltd. respectively
Enjoy overdraft facilities on the card (if approved) Cash transaction facilities for selective branches nationwide
Jamuna Bank Limited has installed its first Q-cash ATM at Dhanmondi Branch, Dhaka. Jamuna Bank is going to issue VISA card soon. In line with the issuance of Q-cash products JBL is going to introduce VISA card very soon. 2.13.1 .11 Lease Finance Lease means a contractual relationship between the owner of the asset and its user for a specified period against mutually agreed upon rent. The owner is called the lesser and the user is called the Lessee.
Lease finance is one of the most convenient sources of financing of assets via machinery, equipment vehicle, etc. The user of the assets i.e. Lessee is benefited through tax advantages, conserving working capital and preserving debt capacity. Moreover, Lease is an off-balance sheet item i.e. lease amount is not shown in the balance sheet of the lessee and does not affect borrowing capacity. Leasing enables the lessee to avail the services of a plant or equipment without making the investment or incurring debt obligation. The Lessee can use the asset by paying a series of periodic amounts called lease payment or lease rentals to the owner of the asset at the predetermined rates and generally in advance. The payments may be made monthly or quarterly. Jamuna Bank Ltd., the highly capitalized private Commercial Bank in Bangladesh has introduced lease finance to facilitate funding requirement of valued customers & growth of their business houses Lease Items • Vehicles like luxury bus, Mini bus, Taxi cabs cars, Pick-up, CNG three-wheeler etc. • Factory equipment. • Medical equipment • Machinery for Agro Based Industry • Construction equipment • Office equipment • Generators, Lift & Elevators for commercial place. • Sea or River Transport. • Computer for IT Education Center 2.13.1 .12 SWIFT Jamuna Bank Limited is the member of SWIFT (Society for Worldwide Inter-bank Financial Telecommunication). SWIFT is a member owned co-operative, which provides a fast and accurate communication network for financial transactions such as Letters of Credit, Fund transfer etc. By becoming a member of SWIFT, the bank has opened up possibilities for uninterrupted connectivity with over 5,700 user institutions in 150 countries around the world 2.13.1 .13 Trading of Government Treasury Bond & Other Govt. Securities The Bangladesh Bank for trading 5 years & 10 Years Treasury Bonds and other Government Securities have nominated Jamuna Bank Limited as a Primary Dealer. 1. Eligibility criteria: • Individuals and institutions resident in Bangladesh, including provident funds, pension funds, bank and corporate bodies shall be eligible to purchase the BGTBs. • Individuals and institutions not resident in Bangladesh shall also be eligible to purchase the BGTBs, with coupon payment and resale/redemption proceeds transferable abroad in foreign currency subject to fulfillment of conditions as mentioned in the Bangladesh Govt. Treasury Bond Rules-2003. 2. Loan facility: JBL offers loan up to 95% of the present value of the bond/other securities against lien of the above instrument for their customers. 2.14 Risk Management
The risk management of Jamuna Bank Limited evolves identification, measurement, monitoring and controlling risk to ensure that: • • • •
The Bank’s risk exposure is within the limits established by Board of Directors. The Bank’s risk taking decisions are in line with the business strategy and objectives set by board of Directors of the bank as well as Bangladesh Bank guidelines. The bank’s risk taking decisions are explicit and clear. Sufficient capital as buffer is available to take risk.
2.14 .1 Market Risk Jamuna Bank Limited is exposed to market risk in variety of ways. Market risk exposure is mainly explicit in portfolio of Bangladesh Government Treasury Bonds held under HFT(held for trading) conversely, Market risk is implicit such as interest rate risk due to mismatch of loans and Foreign Exchange Risk due to maturity mismatch of foreign currency positions. The portfolios are being revalued at an interval at current market price of marketing to market basis. Beside, the portfolios have been synchronized and line with Bangladesh Bank guidelines of risk based Capital Adequacy for interest rat risk and foreign exchange risk. 2.14 .2 Interest Rate Risk Interest Rate Risk arises when there is a mismatch between positions. The bank’s landing, funding and investment activities give arise to Interest Rate Risk. The Bank Assess Interest Rate Risk in earning perspective which is traditional approach to Interest Rate Risk assessment and obtained by measuring the change in the Net Interest income(nll) on Net Interest Margin (NIM) i.e. the different between total interest income and total interest expanses. 2.14 .3 Foreign Exchange Risk The Bank also exposed to Interest Rate Risk, which arises from the maturity mismatching of foreign currency position. It also includes settlement risk. The total holding position is being revalued on market on monthly basis. 2.15 Operation Strategy Presently the bank is using ‘Flora Bank’, a branch banking software developed by Leads Corporation developed on MSSQL Server on Windows platform. The Head Office and the branches use the software for bookkeeping, automatic interest calculation, daily transaction listing and audit trails, auto maturity and auto renewal of FDR, automatic integration of customers’ ledger and General Ledger, printing of General Ledger position including balance of subsidiaries, monthly income and expenditure position etc. The bank has joined the shared ATM Network Bangladesh offered by ETN along with eight other member banks. This service is presently available in Dhaka, Chittagong and Sylhet. JBL is member of SWIFT. It has also installed Router System at the Head Office to have live access to information from international money market for dealing in Foreign Exchange. But from the viewpoint of ideal requirement for modern bank, competing with international banks, the IT facilities of JBL need further improvement.
2.16 Financial Performance of JBL Financial Performance of this Bank were growth continuously, those are shown in below: 2.16.1 Profit In 2008 Jamuna bank limited posted an operating profit of tk.824.21 million as against tk.701.32 million in 2007 with a growth of 17.52 percent over the preceding year. After having made necessary provisions for loans and advances tk.419.16 million in accordance with the instructions of Bangladesh bank net income before tax (NIBT) stood at tk.405.04 million in the rear under review against tk.499.97 million in the preceding rear. An amount of tk.315.93 million has been kept as provision for payment of tax. Thus Net income after tax and provision stood at tk.89.11 million in 2009 which was tk.953.40 million in 201 Figure: Profit in year 2009 to 2010 Profit 1200 1000 800 Profit
600 400 200 0
Yea r 2.16.2 Import Business The total import business handled by the bank in 2009 was tk. 22191.84 million compared to tk.15457.66 million in the preceding year registering a rise of tk. 6734.18 million being 43.57 percent. A sizeable L/C was also opened by the bank in the year under review. The import items included individual raw materials machinery, consumer goods, fabrics, accessories etc. Figure: Foreign Exchange Business â€“ Import Foreign Exchange Business (Import) 30000 25000 20000 15000 10000 5000 0 I-04
Cu rre nc y (Ta ka)
2.16.3 Export Business The bank handled export business worth tk. 13990.33 million in the year under report in 2009 export business handled by the bank was tk. 11583.64 million. Thus there was an increase of tk. 2406.69 million in export business handled by the bank, being 20.78 percent over the preceding year. The major export item was ready made garments.2.18 Foreign Exchange Business (Export) 18000 16000 14000 12000 10000 8000 6000 4000 2000 0
Cur ren cy (Tak a)
Year Figure: 2-4, Foreign Exchange Business â€“ Export 2.17 Performance Analysis of JBL Seven years at a glance (Figure in million â€“ where applicable) SI. NO.
Paid up Capital
Tier I Capital
Tier II Capital
Profit after tax
Number of 715 correspondents
Income from 474.48 investment
Earning share taka
Net assets per 135.14 shara taka
Source: Annual Report of JBL, 2009 3.1 Introduction The general banking department does the most important and basic works of the bank. All other departments are linked with this department. It also plays a vital role in deposit mobilization of the branch. Actually general banking is called the mother of banking. However, PBL provides different types of accounts, locker facilities and special types of savings scheme under general banking. 3.2 Account Opening Section The relationship between banker and customer begins with the opening of an account by the customer. Selection of customer for opening an account is very crucial for a bank. In fact, fraud and
forgery of all kinds start by opening account. So, the Jamuna Bank Limited takes highest caution in this regard. However, PBL opens the following accounts for its customers: • • • •
Current account (CD A/C) Savings account (SB A/C) Shot term deposit (STD A/C) Fixed deposit account (FDR A/C)
A brief on this Accounts are given below: 3.2.1 Current Account Current account is purely a demand deposit account. Basically it can be open for the purpose of business. There is no restriction on withdrawing money from this account. It is suitable when funds are to be collected and money is to be paid away at frequent interval. It is the most suitable for private individuals, traders, merchants, importers and exporters, mills and factory owners, limited companies etc. For opening a current account minimum deposit tk. 5,000/- is required along with introductory reference. No interest is given on the current account deposit money. The following points are important– 1. A current account is a running and active account. There is no restriction on the number and the amount of withdrawals from a current account. 2. The banker is under an obligation to repay these deposits on demand, so they are called demand liabilities of a banker. 3. The primary objective of current account is to save customers such as businessmen, join stock companies, public authorities, etc. from risk of handling a lot of cash money. 4. The bank does not pay interest on current deposits while on the other hand, some bank charge for incidental charges on such accounts. 5. The bank provides overdraft facilities also in certain cases. 6. The account holder can withdraw the deposited money from his account with the cheque, which will be issued to the against his account number. 7. The cancellation fee for current account is tk. 100. 8. An account holder can withdraw and deposit money in his account in several times in a week. There are several types of current account which are stated below: • • • • •
Current Deposit Account for Individual/Joint Account. Current Deposit Account for Private firm (Proprietorship concern). Current Deposit Account for Private firm (Partnership concern). Current Deposit Account for Limited Company. Current Deposit Account for the account of Societies, Clubs, etc.
• Current Deposit Account for Private firm (Proprietorship concern) Documents required 1) A/C opening form. 2) Introducer of CD A/C holder in this bank. 3) Signature form/card. 4) If it is used for the purpose for business, it must require trade license. 5) Photocopy of character certificate or photocopy of passport. 6) Two-copy passport size photo & Declaration certificate. • CD for partnership A/C Documents required 1. Partnership deed 2. List of partners with their address 3. Copy of trade license 4. Photographs of signatories 5. Separate nomination form duly signed by the nominee & the account holders and photograph of the nominee duly signed by the account holders • CD for Private & Public Limited Company A/C Documents required 1. Trade license 2. Photograph of the director 3. Certified copy of the memorandum and articles of association 4. Certificate of incorporation 5. List of directors as per return of joint stock Company with signature 6. Resolution for opening account with the bank 7. Signature of the introducer 8. TIN certificate 9. Certificate of commencement • CD for Association/Club/Charity A/C Documents required 1. 2. 3. 4. 5. 6.
Two copies of photograph of the person(s) who will operate the account. Certified copy of memorandum and articles of association Certified copy of bye laws and regulations Certified copy of resolution for opening and operation of the account Photograph of signatories Up-to-date list of office bearers/ government body/managing committee
3.2.2 Savings Account Savings account is allowed for all people. Anyone can run this account for his personal or business purposes. To open this account depositor have to give at least Tk.5000 at the time of opening. The main objective of this account is to promote lower income people to save their portion of their income for their future use. Hence there is restriction on withdrawals in a month. Heavy withdrawals are permitted only against prior notice.
• • • •
Any adult person can open this account with his own name or with some one else that joint account. Any minor can open this account with the guidance of the guardian. Any company/ club can open this account. Any illiterate person can open this account with his thumbprint. So he can withdraw money from his account in the presence of himself.
However the other noticeable features of the saving account are as follows: • Frequent withdrawal is not encouraged. • Normally withdrawal not allowed more than ¼ of the balance. • One may allow withdrawn his amount maximum twice a week. • Seven days notice is required for withdrawal of large amount. • Account holder is not allowed to withdraw the amount more than 25000 at a time. • The rate of interest is 6% against savings account. • The depositor can deposit money in his account in several times. But if he wants to deposit pay order, cheque draft etc., he has to cross that instrument as an account payee. • If the account holder wants to close his account he has to pay a cancellation charge that is tk.100/- for the saving account. • The number of leaves in the saving account’s cheque book is 10. 3.2.3 Fixed Deposit Receipt Actually Fixed Deposit Receipt (FDR) is not an account. It merely deposits receipt. It is popularly known as “Time Deposit”. Because these deposits are not repayable on demand but they are withdraw able subject to a period of notice. The prospective fixed deposit holder is expected to fill up an application form prescribed for the purpose stating the amount and the period of deposit. The application itself contains the rules and regulations of the deposits including the space for specimen signature. The general features of FDR are as follows: • • • • • •
Payment made on expiry of agreed period. FDR allowed for one, three, six and twelve month period. Payment demanded before expiry of agreed date then penalty may be charged. Introducer is not needed in this case. Two copies of account holder and nominees photograph are needed. Loan may be sanctioned against FDR.
INTEREST RATE OF FIXED DEPOSIT RECEIPT SL. #
Rate of Interest (%) 7.5%
Below Tk. 5 crore
Tk. 5 crore & above
Below Tk. 5 crore
Tk. 5 crore & above
Below Tk. 5 crore
Tk. 5 crore & above
One year & above
Table: Interest Rate of Fixed Deposit Receipt of Jamuna Bank Ltd.
3.2.4 Short Term Deposit Short Term Deposit Account opening procedure is similar to that of the savings account. The rate of interest on this type of account is: Sl. #
Rate of interest
Below Tk.1 crore
TK.1 crore & over Tk. 1 crore
Table: Interest Rate of Short Term Deposit of Jamuna Bank Ltd. 3.2.5 Documents Necessary to Open an Account • • • • • •
Account opening form-to be filled in and signed by each account holder. 2 copies of passport size photographs of the account holder attested by the introducer. 1 copy passport size photograph of the nominee attested by the account holder. Copy of passport / voter identity card/ chairman’s certificate. Fill up declaration form (Under Money Laundering Prevention Act-2) To fill up Know Your Customer (KYC) Form.
The procedure to open an Account is given as following: Step Five
Include data in Registry Book
Transfer A/C Form to IT Department
Submit of A/C Opening Form
Delivery Deposit Book to A/C Opener
Step Three Fill up form & Attachment of Necessary Documents
Step Two Collect Form
Step Eight Deposit Money to Activate Account
Final Step Collection of Cheque Book
Step One Select Type of Account Note: This is a sample of process to open an Account. But varies the required documents to open that particular account. The requirements to different accounts have mentioned earlier. 3.2.6 Documents that Are Given to the Account Holder After all the account opening formalities have been completed Bank opens an account in the name of the applicant. Bank provides customer: 1. A Deposit slip 2. A Cheque book 3. A Receipt book 3.2.7 Issuance Cheque Book to the Customer After opening an account the account holder need a cheque book to withdraw money from the bank whenever he or she needed. However, cheque book issuance procedures of PBL are as follows: 1. Issuance of cheque book (for new account): In order to get a new cheque book the account holder need to fill up the specific application form. 2. Issuance of cheque book (for existing account): In case of existing account the cheque requisition are in the cheque book where a white pages lies containing the name and account number of the account holder. Whenever the leaves of the cheque
finished the account holder submit it to cheque issue officer requesting to issue a new cheque book with his/her signature. However, for both the cases the following procedures are needed to follow to issue a new cheque book. a. After getting the requisition the respective officer required to verify the account holder’s signature and identification. It is very important task. No cheque can be issued without verification. b. Now the officer needs to attach round and branch seal on cheque. c. After that it needs to be attached account number seal on the cheque. d. In this stage two officers’ initial is needed on the cheque. e. Now it needs to entry on the cheque issuie register and signature on the register of the client. f. Finally verifying all the necessary seal, initial the officer issue the cheque and submit the requisition form to the computer section. g. Thus a new cheque book can be issued for both the new or existing client. Total procedures have to done very carefully because most of the fraud found in this case.
3.2.8 Other Term Deposit Accounts • • • •
Monthly Benefit Deposit Scheme (MBDS A/C) Contributory Savings Scheme (CSS) Double Benefit Deposit Scheme (DBDS) House Building Deposit Scheme (HBDS)
3.2.9 Monthly Benefit Deposit Scheme (MBDs) MBDS is another main part of Jamuna Bank Ltd. This account is created for the benefit of the people who intend to meet the monthly budget of their families from the income out of their deposit. This scheme is suitable for trusts, club and foundations or other associations, which award monthly scholarships to the students etc. We know the bank is the most secured place to deposit money. So, people can come and run this account quite easily for big savings with little installment per month. The terms and conditions for operating MBDS account: 1. To open a MBDS account the client has to use its form and must have an introducer and also the name of the nominee. If the client give attested photograph, it would be helpful at the time of closing the account. 2. The deposit of Tk. 25,000 and multiples thereof, but maximum Tk. 25, 00,000 shall be acceptable under the scheme. 3. The deposit shall be for a period of 5 years. The principal amount is refundable on maturity. 4. Profit shall be paid on monthly basis @ Tk. 1,000/- & net of taxes @ Tk. 900/- per Tk.1, 00,000.
5. Payment of monthly profit starts from the subsequent month after a clear minimum gap of 30 days from date of deposit. 6. If the mailing addresses of the depositors changes, he/she immediately have to inform it to the bank. 7. Income tax, Tk. 10% will be deducted on the income received from the deposit. 8. The client can transfer his/her account to another branch of the same bank by only for special cause. 9. The receipt is not transferable. 10. Advance against lien on such Receipt can be allowed up to 80% of the deposit bearing normal rate of interest prevalent at the time on Overdraft/Loan. 11. In case the instrument is lost the procedure for issuance of a duplicate will be the same as applicable in case of loss of FDR. 12. During the period of such Overdraft/Loan, the monthly benefit shall be credited to the concerned Overdraft/Loan. 13. Normally, the deposit is not encashable before 5 years. But if any depositor can withdraw his deposit before maturity due to certain unavoidable reasons, he/ she will be allowed to do so in the following manner: â€˘ â€˘
No benefit including interest shall be allowed for pre-mature encashment within one year. If the accounts/deposits are closed/ enchased after 1 year of its opening, benefit shall be allowed on the deposit at existing normal savings deposit rate. â€˘ If the amount of monthly profit already paid exceeds the amount payable at normal savings rate. 14. The bank has the right to change the rules or update the whole thing of MBDS 3.2.10 Contributory Savings Scheme Contributory savings scheme is suitable for middle & upper class people who want to save money for future use. In this project depositor have to deposit money for five years any installment size at the time of opening of the A/C. Any person can open the scheme by following proper guidance. At the time of opening account under CSS customer must refer his/her SB A/C. No. for his /her pension amount or may open SB A/C at the time of maturity for getting monthly pension amount. Lump sum amount shall be paid after maturity or monthly pension shall be paid for the next 5 years according to the size of deposit. For example, a brief chart of lump sum amount and monthly pension installment payable are shown in the following chart:
Size of monthly After 5 years Pension for next 5 deposit terminal value years
Table-: An Example of Monthly Pension Installment Payable (Lump Sum Amount) Some other features are mentioned below: 1. The depositor is not allowed change the size of installment afterwards. 2. A person can open more than one account for different size of installments in any branch of the bank. 3. The specified amount on maturity at any slab shall be paid after one month from the date of deposit of the final installment. 4. The installment shall be payable by 8th day (in case of holiday the next working day) of every month. 5. Normally the depositor can not withdraw money before maturity except certain unavoidable reasons. 6. When a depositor fails to deposit any installment, he/she will have to pay a fine @ 5% of the overdue amount payable at the time of depositing the next installment or maximum Tk. 500/-. 7. The bank at its discretion may allow inter branch transfer of the A/C holder. 3.2.11 Double Benefits Scheme This offer is very attractive for the person who has additional money in hand. By this account people can deposit their money for a period of six years and after the maturity he/she will get double money back. By this account people can use their ideal money by which he cannot earn or cannot able or donâ€™t feel secure to invest on business. Under this project his/her money can be fully secured with some benefit after few years. The benefits categories are mentioned in the following table: Double Benefit Scheme: Period
Deposit Amount Interest with deposit (Taka One Time)
Payment Amount with Interest on Maturity
Table: Benefit Categories of Double Benefit Scheme of Jamuna Bank Ltd. There are some features which are mentioned below 1. Photograph of the nominee attested by the depositor. 2. The scheme carries free life insurance coverage facility. 3. Income tax may be deducted as imposed by the government on the interest amount at the time of maturity. 4. Normally no withdrawal will be allowed before maturity. But if any depositor intends to withdraw his deposit before maturity, the following rules will apply: a) No benefit including interest/profit shall be allowed for pre-mature encashment within 1 year. b) If the accounts/deposits are closed / encashed after 1 year of its opening, benefit shall be allowed on the deposit at normal savings deposit rate.
3.2.12 House building deposit scheme This scheme is another attractive scheme for interested people who are willing to invest money for different periods for future use. It is normally suitable for the retired person. Besides minor can open the scheme complying all formalities related with opening of minorâ€™s account. For house building loan facilities it is the most perfect scheme because the depositor will be allowed to take loan from the bank against it. According to the installment and duration of the deposit, equity building amount shall be Tk.10 lac/Tk.20 lac and a chart in this regard is mentioned below: Monthly deposit
Payment after the Age limit (for HBL investment period (in facilities only) Taka)
Table: Monthly Deposit, Investment Period, Age Limit, Payment after the IP of House Building Deposit Scheme 3.3 Account Closing It is a general right for every account holder to close his or her account at any time s/he find inconvenient to continue. But also has some formalities. The person needs to apply to the manager of the specific branch mentioning the reason for the account closing also the date when he would like to close his/her account with 100/- account closing charge. 3.4 Remittance Section This department is another important part of the Bank. This department also issues and receives PO, PS, DD, TT, etc. By this department clients can send their money to different places of the country or in the world. This department is helps the bank to domestic and international transaction for the clients.
The items of this dept. are following: 3.4.1 Pay Order (Po) Process of issuing Pay order Customer is supplied a Pay Order form with a commission voucher and vat on banking service voucher. After filling the form the customer pays the money in cash or by cheque. The concerned officer then issues PO on its specific block. The officer then writes down the number the PO block on the PO form then two authorized officers sign the block. At the end customer is provided with the two parts of the block after signing on the block of the bankâ€™s part. Accounting procedure of pay order: a) On issuing of PO 1. Cash A/C of party A/C PBL General A/C
Income A/C commission on PO ---------Cr. 2. PBL General A/C --------------- Dr. Bills Payable A/C- P.O ----------Cr. b) On encashment of P.O.
Bills Payable A/C ---------------Dr. Party A/C ------------------------Cr. Payment of Pay Order (PO): AS the PO issued by the bank is crossed one it is not paid over the counter. On the contrary the amount is transferred to the payees account. To transfer the amount the payee must duly stamp the PO. Commission and VAT on PO. Amount
Table: Commission & VAT on Pay Order
3.4.2 Demand Draft (DD) A demand draft is a written order of one branch upon another branch of the same bank, to pay a certain some of money to or to the order of a specified person. Drafts are not issued payable to bearer. In practice, drafts are not to be drawn between branches within the same city. Process of DD Issue: • • • • • • •
Customer is supplied a DD form with a commission voucher and vat on banking service voucher. Customer fill up the form which includes the name of payee, amount of money to be sent, exchange, name of the drawer branch, signature and address of the drawer. The customer may pay in cash or by transferring the amount from his / her account (if any). After the money is paid and the form is scaled and signed accordingly it is given to the DD issuing desk. Upon the receiving the form concerned officer issues a DD on a particular block. The DD block has two parts, one for bank and another for customer. Bank’s part contains issuing date, drawer’s name, payee’s name, sum of the money and name of his drawer branch. Customer’s part contains issuing date, name of the payee, sum of the money and name of the drawer branch.
After furnishing all the required information entry is given in the DD Issue register and register and at the same time bank issue a DD confirmation slip addressing the drawer branch. This confirmation slip is entered into the DD advice issue register and a number is put on the confirmation slip from the same register. Later on the bank mails this slip to the drawer branch. At least two Grade -1 officer sign the DD block and amount is sealed on the DD with a special red seal to protect if from material alteration. The number of DD is put on the DD form. Next the customer is supplied with his/her part. Payment of DD: •
• • • •
• • •
When a DD is brought for payment, the branch check out the following matters: Whether the DD is drawn on them. Whether it is crossed or not. Whether it is properly signed by the authorized officer of the issuing branch. The branch then checks out whether the confirmation slip has arrived or not. If the confirmation has not arrived, the DD is given entry in the Ex-Advice register. Concerned officer writes down the date on which the DD was paid on the confirmation slip and sign on it. When the confirmation slip arrived before the DD, it is entered into the DD advice register and kept in a file. Later on, when the DD arrives the date is put on the confirmation slip and the above mentioned procedure is applied. When the situation of payment arises concerned officer checks out whether it is crossed or not. If it is crossed he should just transfer the amount to the account mentioned in the DD by crediting the account and debiting the issuing branch. If all the particulars are all right and the payee is genuine bank made the payment.
3.4.3 Pay Slip Pay slip is generally used for bank’s internal payment purpose. It has been observed that the bank has issued a pay slip in the name of payee then the principal office has sent the pay slip with a forwarding letter. Two copy of the forwarding have sent to the Head office. In the photocopy of the forwarding the authorized officer has given signature has written “received” so that this paper can be used as a document that the Head Office has got the pay slip with in order. This paper has put in the principal office as a document. Then the pay slip has been given to the person, the creditor of the bank as a supplier. 3.4.4 Telegraphic/Electronic Transfer There may be certain types of fund transfer for which a customer may wish to specify the payment system in its instruction to the Bank. In such cases, the Bank will attempt to execute the instructions as specified by the Customer. Jamuna Bank Limited reserves the right to route the funds transfer via any means available in order to execute the transfer instructions on the specified payment date. Neither the Bank nor subsequent banks in the process will necessarily investigate discrepancies between names and identifying or account numbers and may execute instructions on the basis of the
number given in the instructions even if such number identifies a person different from the named bank or beneficiary. Dd & Tt Charge Commission minimum Tk.-20 up to 20,000 & after that per thousand tk.-1 + vat 15% for TT telex charge Tk.-50+vat15% of comm. Of telex. Online Banking Online banking is the banking activities conducted from home, business, or on the road, instead of at a physical bank location. It has capabilities ranging from paying bills to securing a loan electronically. It saves time and money for users. Considering these, PBL started online services with several branches. It is available for all customers- both cash deposit and withdrawals, cheque deposit and transfer in CD, SB, STD, and Loan accounts. 3.5 Data Entry Section A strong computer network system exits here. Total 16 PC are available here and all are connected with LAN. Three PC of foreign exchange department is connected with internet for foreign transaction of L/C and others. One is connected with all branches of PBL for online transactions. But a separate section exists in general banking section. Two officers and two computers are available in this section. They perform all type of posting of the day of this branch; make statement for the customer about their financial status and produce various types of statement and supplementary documents for future reservation and verifying purpose. 3.6 Cash Section The Jamuna Bank Limited has a heavy equipped cash section. Cash is received and disbursed in this section. The cash section consists of three junior officers.
3.6.1 Cash Receive Section Any person can deposit money by filling up the deposit slip or pay in slip and gives the form along with the money to the officer. The officer checks the A/C number, amount of taka both in words and in figure. Then the officer gives the entry to the receiving cash book and also writes the denomination of currency at the book of deposit slip. Then the officer sends the deposit slip counterfoil credit voucher and cash book for rechecking the particulars and for a second signature. After this second signature stamp â€œcash receivedâ€? is given over the credit voucher. At the end of the day total of scroll book are entered in the cash book and total of the credit vouchers are found out and checked with the previous entries. The process is same for cash received the date of the next day. 3.6.2 Cash Disbursing Section The JBL received various financial instruments for encashment. The common instrument handled by the branch is cheque, demand draft, pay orders, and debit cash vouchers etc. This instrument is hacked for apartment tenor. If the instrument is all right it is sent for posting by computer. After posting, signature is verified by the head. Then the cheque is sent for cancellation. After checking the A/C number, payee instruction and date the cancellation, officer cancels the cheque. There after the
payment is done. The process is same for other financial instrument along with the clearing step. Bearer cheque is paid in cash cross cheque is balanced to the A/C. 3.6.3 Transaction Cash Money At first the cash officer gives some money from the vault to the officer who makes payment to the clients and keeps a record of that amount. There are two teller desk from which the payment is being made. At the end of the payment period the balance must be adjusted with the records of the transaction. That is the received balance; the payment balance must be similar with the balance on the receiving and the payment register book. 3.6.4 Cash Balance Book This is a book on which the balancing record of the cash has maintained, the opening balance has to be always the previous day’s closing balance. At the end of the transaction hour, all the receipts have to be added with opening balance and then the payments have to be deducted from the total balance. After deducting this balance has constituted the opening balance of the next transaction day. This is the process of maintaining the opening and closing balance of cash in Jamuna Bank Limited which have observed by this duration. 3.7 Cheque Section Cheque book issue has described below in terms of some cases observed in the bank. 3.7.1 Cheque book issue to the person except owner of the accounts It has been observed that a client that is owner of the account has wanted to draw a cheque book by another person from the bank then the authorization letter of the owner to draw this cheque book must have submitted by the bearer. In the authorization letter the bearer’s signature must have to be verified by the owner of the account.
3.7.2 Cheque book issue to the account holder When an existing account holder wants to draw a cheque book from the bank then he comes to the bank with the requisition slip which is already fixed in the cheque book that was delivered to him before this newly one. There is acquisition slip in every cheque book issued by the Jamuna Bank Limited. It has been observed that if the owner of the account has wanted to draw a cheque book by a bearer then the bearer’s signature has appeared on the top left hand side (on the back of the requisition slip) on the requisition slip. And the bearer signature has been authenticated by the account holder by a signature, which has appeared on the bottom left hand side (on the back side of the requisition slip) just below the bearer’s signature. 3.7.3 When the cheque book is lost
It has been observed that when a cheque book has been lost by an account holder, the holder of the account must have filled a indemnity bond which have been authorized by a guarantor. The guarantor must have to maintain an account in the Jamuna Bank Limited and the signature of the guarantor must have to appear on the indemnity bon 3.7.4 Indemnity Bond Indemnity bond describes that if there is any loss or liability for the issuing of this new cheque book despite the old cheque book is lost; the guarantor will be liable for this loss or liability. Process: At first the requisition slip has to be filled by the account holder. On the requisition slip the main components are: 1) The name of Bank 2) The name of the branch 3) Date 4) CD/SB Account No 5) Containing no. of leaves 6) Name of the account 7) First serial no and last serial no of the leaf 8) Address of the account holder 9) Signature of the account holder 10) Signature of the authorized officer Then these components have to be filled by the account holder, the authorized officer and the cheque book issued who are on the desk for giving services to the client. The desk man then gives entry in the “Cheque Book Issue Register”. The components on the register book are date of issue, cheque serial no, account no of the account holder. 3.8 Clearing Section This department has three main jobs. They are: 1. Inward cheque clearing 2. Outward cheque clearing 3. Attending house
3.8.1 Inward Cheque Clearing This is the opposite flow of the Inward cheque clearance. When PBL’s cheque sends to other person of other Bank, that Bank will do the same thing to claim money from Jamuna Bank Ltd. with the same procedure like Inward clearing of that Bank. At the time of Outward Cheque for clearing, the things must have to be checked: The Clearing Seal, The Endorsement Seal, and The Branch Seal. 3.8.2 Outward cheque clearing Whenever any branch of Jamuna Bank Ltd. receives a cheque of other Bank to collect money, then the branch sends the cheque to its Head Office. The Head Office arranges the cheques separately by the name of different bank and then it send to the respective bank for clearance by the clearinghouse. Those cheques of different Bank to collect money for the ordered person are called Inward Cheque for clearing. Then these cheques go for entry in to the Inward Registry Book and Database of Clearing Department.
Bangladesh Bank conducts this job of clearinghouse name HOUSE. This is done twice a day- First house and Return house. First house is to deliver cheques and collect cheques from other banks. Return house is to return the honored cheques. The practice among the bank is to give only the name of those cheques, which were not honored. Note: Bangladesh Bank keeps separate A/C for the entire bank and settles the balance considering the flow of cheque in both ways that is Inward & Outward. As soon as the principal branch gets the clearance it sends an Inter Branch Transaction Advice (IBTA) to the branch, who has sent the cheque for collection. Receiving the IBTA is considered as clearance for the payment to the party. • Cost of clearing The collection cost normally varies with the distance and PBL does not take any charge for collection within Dhaka City or within the district. But when anyone issue check of PBL without having enough sufficient money in the account, the clearing dept. will cut Tk.100 fine for this. • L.B.C The word LBC means Local Bills for Collection. It is applied on transaction between inter branch. Issuing cheque / DD from one branch to another branch of the same Bank. Suppose Gulshan branch have issued a cheque to Banani branch. After received the cheque the Banani branch will give a seal of Crossing, LBC seal and Endorsement seal on that check and will issue forwarding on Gulshan Branch. IBTA: Inter Bank Transaction Account • I.B.C IBC means Inward Bills for Collection. It is the reverse of LBC. In this case gulshan branch will receive cheque and give a seal of Crossing, LBC and Endorsement seal on the cheque and send it to Banani branch with an Advise. The transaction will be as follows: Check A/C IBTA Gulshan
• O.B.C The word OBC means Outward Bills for Collection. There are two types of OBC: 1) Outside Zone 2) With Different Branch 1) Outside Zone: It is used only for issuing DD or TT. Under this system any other bank of different area can issue DD/TT to this branch. The TT is used for inter branch transaction. 2) With Different Branch: Under this system clients can issue DD/TT to different branches of this Bank
22.214.171.124 Receiving of cheques: It has been seen that when the cheques of Sonali Bank, HSBC etc. has deposited in the Dhaka, Karwan Bazar branch of Jamuna Bank, the different accounts which have been maintaining in those particular branches then that particular branches have sent that instrument to the local office (Jamuna Bank) for collection. 126.96.36.199 IBCA to the branches: Then the Jamuna Bank (Local Office) has given an IBCA in the hand of the sender of those particular branches and has taken a signature on a register book. IBCA bears the documents of the total amount of cheques received by the local office from the particular branches. IBCA has described that the Jamuna general accounts (those particular branches) have credited. 188.8.131.52 Sorting and Scheduling: The Jamuna Bank (local office) then has made the schedule of the cheques drawn on different banks. That the bank has separated those instruments according to the bank wise and then separated according to branch wise. Then the bank has added the figures of the instrument for the particular branches in a schedule paper. 184.108.40.206 Given entry to the Computer: The bank has given entry to the computer. There some row box in the clearing. These are from the bank, to the bank, account number, cheque serial number, branch name, issuing date etc. If the balance of Jamuna Bank in the Bangladesh Bank account has shown the debit figure then it has been assumed that the drawn amount of instruments drawn on Jamuna Bank by other banks has exceeded the amount of instruments drawn on other banks by Prime Bank. 220.127.116.11 Return of the instrument: It has been seen that when some instruments have been returned from other banks to the local office of Jamuna Bank. Then the bank has put those in the drawer and then the bank has written a letter to owner of instruments to make them known about the matter. The instruments have been turned with a â€œReturn Memoâ€? which has shown the reasons for what the instruments have been dishonored. When the client has withdrawn the returned instrument from the bank the bank officer has written on the pay slip return.
18.104.22.168 IBDA: When the instruments of the Jamuna Bank (another branches) have been returned from the other bank on which the instruments have been dawn, the Jamuna Bank has sent a IBDA (Inter Branch Debit Advice) to that branch separately amounting to the instruments received from that particular branches of Jamuna Bank. 3.9 Accounts Section
1) Collection of clearing cheque from client and send to the main branch to present clearing house for collection without any charge. 2) Computer entry of clearing cheque and credit posting. 3) Voucher sorting reconciliation with supplementary summary. 4) Voucher arrangement and preparation of voucher cover. 5) Preserve daily cash position trial balance. 6) To prepare salary sheet and record all the stationary cost. 7) To provide solvency certificates. 8) If the supplementary summary and voucher are not same his duty to find out the discrepancies. And other works demanded by the authority 3.10 Dispatch Section This section is responsible for receiving the entire letter from outside of the bank and to send the entire letter from the bank. For this the section keeps a register book. It’s also received the entire document and anything addressing the book. However two types of letters are continuously received in the branch. These are: 1) Inward (registered/ unregistered) letters. 2) Outward (registered/ unregistered) letters. This is in short about general banking which I have learned from the bank at the time of my internee period. If the cash received and cash payment, transfer received and payment are same and no fraud is found then the day transaction is closed and it is time to go. Dispatch division mainly operates the functions of dispatching the intimation letter to the client, IBCA, IBDA, OBC to the other banks for their internal transaction with the banks. Dispatch division receives the documents come from the negotiating bank, from the opening bank (incase of export) and any other documents, letter, papers etc. in the name of main branch (Prim Bank). The officer engaged in the dispatch division maintains a register book to keep entries those documents. When the officer receives paper from outside then the officer seals on that paper “received” and when the officer sends paper to the outside of the bank then the bank seals on the paper “dispatch” and puts his signature on that documents.
The acronym for SWOT stands for: • • • •
Strength Weakness Opportunity Threat
The SWOT analysis comprises of the organization’s internal strength and weaknesses and external opportunities and threats. SWOT analysis gives an organization an insight of what they can do in future and how they can compete with their existing competitors. This tool is very important to
identify the current position of the organization relative to others, who are playing in the same field and also used in the strategic analysis of the organization. In the world every organization has some strength, weakness, opportunities, threats; as well Jamuna Bank Ltd. also. The bank does different activities by its operation. In between these activities general banking activities communicates with its major portion of client. And through the general banking operation, the bank goes to the society with its aphorism for serving the society. Though there existing some strong competitor in the society or market, for this Jamuna Bank Ltd. must have to know its strength, weakness, opportunities, threats and should do the SWOT analysis in all respect or in general. 4.1 Strengths Banking Experience of 8 years provides JBL the strength of being one of the market leaders in this sector. This strength of JBL is totally unmatched by any other commercial bank in Bangladesh, as the long term success of a bank heavily depends on its reputation while dealing with every sensitive commodity like money. JBL received many awards during 2007. JBL is the recipient of 1 st prize under ICAB National Awards three times in a row from 2005. Credit Rating Information and Services Limited (CRISL) rated the Bank as A+ Considering its good profitability, best asset quality and diversified product lines. As the 6th largest listed company at Dhaka Stock Exchange JBL has strong confidence among the investors, both individual and institution.JBL focus strongly on remittance business and with that aim they opened rural branches where remittance business concentrates. JBL opened Exchange House at Singapore, Jamuna also entered into agreement with various exchange houses at USA, UK, Middle East and South Asian countries for inward foreign remittances of the wage earners. To be the most efficient Bank JBL has chosen T24 of Temenos Holdings, NV Netherlands Antilles as the core banking Software (CBS) for the first time in Bangladesh. In Bangladesh JBL has wide range of customer base and is operating efficiently in this country.JBL has a bulk of qualified, experienced and dedicated human resources.JBL has the reputation of being the provider of good quality services to its potential customers 4.2 Weaknesses JBL has fewer branches than their competitors. Such as JBL have only 61 branches whereas other private commercial bank has more than 200 branches all over the country.JBL do providing very few no. of ATM facility to the customers. This is one of the major weaknesses of JBL 4.3 Opportunities The population of Bangladesh is continuously increasing at a faster rate. The countryâ€™s growing population is gradually and increasingly learning to adaptation of consumer finance. As the bulk of our population is middle class, different types of products have very large and easily pregnable market.The activity in the secondary financial market has direct impact on the primary financial market. Investment is a national socio economic activity. And activity in the national economy controls the bank. JBL is now focusing on lending to SME and Retail sector. The bank is not only providing credit but also decided to popularize the SME sector by participating in various trade shows organized in the country. Bangladesh has a huge consumer base for maintaining several accounts. So JBL has the opportunity to keep these customers by reducing its current fees and charges.
4.4 Threats In today’s economy, substantial amount is remaining idle and currently the investment in the secondary market by foreign is relatively low. These economic situations of the country indicate political threats. Increased competition by other banks is also another threat to JBL. Furthermore, the new comers in private sector like Dutch Bangla Bank, Exim Bank, BRAC Bank, Southeast Bank, Mercantile Bank, Premier Bank are also coming up with very competitive force.
Findings in different sections of the Bank: 5.1 General Banking Department According to some client’s opinion, introducer is one of the problems to open an account. If a person who is new in the city wants to open an account it is a problem for him/her to arrange for an introducer of SB or CD accounts holder. 5.2 Foreign Exchange Department Modern technical equipment such as Fax machine is not sufficient in foreign exchange department. As a result the exchange process makes delay and it is also complicated. 5.3 Investment Department Sometimes the securities taken against the loan are deliberately overvalued by the employee to unlawfully help the client. As a result if the client fails to repay the loan the bank authority can not collect even the principal money invested by selling of those assets. It is also very important factor that leads to loan default. The investment department takes a long time to process a loan.
6.1 Recommendation To the Company –
In order to improve the image of the bank and to create enough public awareness about the service offerings, bank should establish separate Marketing department. Plan should be developed to employ professionally qualified marketing people and induction should be confirmed after proper training.
All the branches should be equipped with enough modern facilities like- computers & other technologies.
New strategies should be developed to divert to quality banking rather than quantity.
New promotional activities should be adopted.
The limit in case of cash withdrawal under Jamuna Line through bearer or by account holder himself should be reconsidered.
To the Customers –
The customers of Jamuna Bank who have continuous interaction with the bank and have sound deposits in their accounts should be given value and due importance. This would greatly help in saving the time of both the bank and the customer.
The overall customer services should be improved more and the customers need to be accommodated in a more courteous and friendly manner.
There should be separate counter with well-mannered trained employees for providing guidance and every kind of information to customers.
Customer should be more facilitated at the time of payment of utility bills to avoid rush and mismanagement.
The service should be more cost effective. To the Employees –
Qualified and skilled staff should be promoted based on their performance level.
Employees should be provided more opportunities to attend and participate in seminars and lectures on banking.
The employees should also be given due importance. Every year special prizes and incentives must be given to extraordinary workers to motivate them.
They should be more dedicated to their works.
JBL should give proper attention on staff training and should provide enough facilities to encourage their participation.
6.2 Conclusion Excellence in banking is the motto of Jamuna Bank Limited. Whether in personal, corporate, treasury or trade transactions SBL is committed to provide the best. Despite many challenges, SBL has been able to maintain the momentum of profit growth and strong performance in its core businesses for the seventh year in a row. Among the total banking sector in Bangladesh, now JBL has made remarkable progress practically in every sphere of his activities. In the last few years of operations, JBL has not only earned good reputation in the market but also performed well in terms of financial performance and it becomes possible because of strong management team of JBL. Moreover, so from the above discussion now it is clear that JBL the pioneer of banking sector in Bangladesh. To this end in view, the bank always keeps them abreast with the latest technological development at home and abroad.
Annual Report, 2009, Jamuna Bank Limited (SJIBL)
Jamuna Bank home page,2010, www.Jamunabankbd.com.>
Jamuna Bank Limited is a private commercial Bank which is one of the most popular bank in Bangladesh. The Bank started its operation from 3r...