General Banking Activities of IFIC Bank Ltd.

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View with images and charts General Banking Activities of IFIC Bank Ltd.

CHAPTER-ONE 1.1 IFIC Profile International Finance Investment and Commerce Bank Limited (IFIC Bank) is banking company incorporated in the People’s Republic of Bangladesh with limited liability. It was set up at the instance of the Government in 1976 as a joint venture between the Government of Bangladesh and sponsors in the private sector with the objective of working as a finance company within the country and setting up joint venture banks/financial institutions aboard. In 1983 when the Government allowed banks in the private sector, IFIC was converted into a fully fledged commercial bank. The Government of the People’s Republic of Bangladesh now holds 32.75% of the share capital of the Bank. Directors and Sponsors having vast experience in the field of trade and commerce own 11.42% of the share capital and the rest is held by the general public. 1.2HISTORICAL BACKGROUND OF IFIC BANK LTD. IFIC Bank (International Finance, Investment and Commerce Bank Limited) originally named as International Finance and Investment Company was formed in October 1976. It obtained certificate of commencement on 28 February 1977 as an INVESTMENT BANKING company. The company was established mainly to carry out banking and other financial business outside Bangladesh (especially in the oil-rich Middle-Eastern countries) either singly or in collaboration with other companies, banks and financial institutions. Bangladesh Bank allowed IFIC to transform itself into a banking company and accordingly, it was renamed and after completion of required legal formalities, it started full-fledged commercial banking operations on 24 June 1983. Initially, the bank's authorized capital was Tk 100 million divided into 1 million ordinary shares of Tk 100 each. The paid up capital was Tk 71.5 million, which rose to Tk 80 million in 1986. 60% of the shares of the company were A-class ordinary shares owned by its sponsors and members of the general public. The remaining 40%, grouped as B-class ordinary shares, were held by the government of Bangladesh. On 31 December 2000, the authorized and paid up capital, after being enhanced several times, stood at Tk 500 million and 279.35 million respectively. On that date, total shareholders equity of the bank was Tk 1,120.48 million and its reserve funds totaled Tk 648.20 million, which comprised statutory reserves (Tk 378.48 million) and general reserve and retained surplus (Tk 269.72 million). The bank is listed with Dhaka and Chittagong STOCK EXCHANGEs. IFIC conducts all types of commercial and investment banking functions. Deposits with the bank in 1984 were Tk 863.40 million and they rose to Tk 6,594 million in 1990, and to Tk 15,505.87 million in 2000. The bank follows flexible interest rate policy and the interest rates offered by it on its deposits since 1 May 1998 varied between 7.5% and 10.5%.


Total lending of the bank had increased from Tk 576.51 million in 1984 to Tk 16,233.79 million in 2000. Interest charged by the bank on its lending varied between 10% and 16.5% depending on area of lending and maturity. Insider lending (loans to directors) of the bank accounted for 18% of its total loans and advances as on 31 December 2000. On the same date, the bank's non-performing (classified) loans stood at Tk 6,130.8 million (37.77% of total loans and advances). In December 2000, the total investment of the bank other than loans and advances accounted for Tk 3,375.43 million and the investment portfolio comprised government TREASURY BILLS, PRIZE BONDS, and shares and debentures of local and foreign companies. Foreign Exchange business of the bank during the year 2000 stood at Tk 36,500 million, which included export financing (Tk 16,546 million) and import servicing (Tk 15,886 million). Total assets of the bank excluding off-balance-sheet items were valued at Tk 24,918.96 million in 2000, when the value of off-balance-sheet assets was Tk 8,048.2 million. In the same year, the bank earned a net profit (after tax and provisions) of Tk 192.93 million. Profitability of IFIC was seriously affected by the compulsory retaining of a huge amount of provision for classified loans and the transfer of accrued interest on non-performing loans to suspense account. Overall management of the bank is vested in a 13-member board of directors with the managing director as the chief executive. In December 2000, the bank had a total of 1,659 employees and 54 branches including two overseas. 1.3 Goals and Objectives of IFIC Bank ο ο ο ο ο ο ο ο ο ο ο ο ο ο ο ο ο

To build up strong pillar of capital. To promote trade, commerce and industry. To discover strategies for achieving systematic growth. To improve and broaden the range of product and services. To develop human resource by increasing employment opportunities. To enhance asset of shareholders. To offer standard financial services to the people. To create congenial atmosphere so that the client becomes interested to deal with the IFIC bank limited. To keep business morality. To develop welfare oriented banking service. To offer highest possible benefit to customers. As to its position among its counterparts is held high to let the viewers cast their very first look at it. To carry on the business of discounting and dealing in exchange of specie and securities and all kinds of mercantile banking. To provide for safe-deposit vaults and the safe custody of valuables of all kinds. To carry on business as financiers, promoters, capitalists, financial and monitory agents, concessionaires and brokers. To act as agents for sale and purchase of any stock, shares or securities or for any other momentary or mercantile transaction. To 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 Bangladesh bank.


1.4 Vision, Mission, and Core Values 1.4.1Vision To be best private commercial Bank in Bangladesh in terms of efficiency, capital adequacy, asset quality, sound management and profitability having strong liquidity. 1.4.2 Mission To build IFIC Bank Limited into efficient, market driven, customer focused institution with good corporate governance structure. To provide service to our clients with the help of a skilled and dedicated workforce whose creative talents, innovative actions and competitive edge make our position unique in giving quality service to all institutions and individuals that we care for. 1.4.4Core Values For our customers: To become most caring bank-by proving the most courteous and efficient service in every area of our business For our Employees: Promoting the well– being of the members of the staff. For our Shareholders: Ensuring fair return on their investment through generating stable profit For our Community: Assuming our role as a socially responsible corporate entity in a tangible manner through close adherence to national policies and objectives and upholding ethical values. 1.5 Present Ownership Structure The Government of the People’s Republic of Bangladesh now holds 32.75% of the share capital of the Bank. Directors and Sponsors having vast experience in the field of trade and commerce own 11.42% of the share capital and the rest is held by the general public. Board of Directors Unlike others bank in the private sector, Board of directors of this bank is an unique combination of both private and Govt. sector experience. Currently it consist eleven (11) directors, of them seven represent the sponsors and general public and four senior officials in the rank and status of Join secretary/ Additional secretary represent the government. The Managing Director is the ex-officio director of the board. Current Board of Director is: • • • •

Mr. Salman F Rahman Chairman Mr. Abu Tahir Mohammad Golam Maruf Director Mr. Aminur Rahman Director Mr. Syed Anisul Huq Director


• • • • • • • •

Mr. Mohammed Nayem Syed Director Mr. S.M. Faruqi Hasan Director Mr. Tanim Noman Sattar Director Mr. Mahmudul Huq Bhuiyan Director Arastoo Khan Director Syed Monjurul Islam Director Mohammad Ali Khan , ndc Director Mosharraf Hossaian Director

Gov. nominated Gov. nominated Gov. nominated Gov. nominated Managing

(Source: IFIC Bank Limited, North brook hall road Branch) 1.6 Management Structure: The eleven members of the Board of Directors are responsible for the strategic planning and overall policy guidelines of the Bank. Further, there is an Executive Committee of the Board to dispose of urgent business proposals. Besides, there is an Audit Committee in the Board to oversee compliance of major regulatory and operational issues. The CEO and Managing Director, Deputy Managing Director and Head of Divisions are responsible for achieving business goals and overseeing the day to day operation. The CEO and Managing Director are assisted by a Senior Management Group consisting of Deputy Managing Director and Head of Divisions who supervise operation of various Divisions centrally and co-ordinates operation of branches. Key issues are managed by a Management Committee headed by the CEO and Managing Director. This facilitates rapid decisions. There is an Asset Liability Committee comprising member of the Senior Executives headed by CEO and Managing Director to look into all operational functions and Risk Management of the Bank.


Managing Director Deputy Managing Director Senior Executive Vice President

Executive Vice President Senior Vice President

First Vice President Senior Asst. Vice President

First Asst. Vice President Assistant Vice President Senior Staff Officer

Staff Officer Officer Grade I Officer Grade II Assistant Officer Office Assistant

Office Attendant

(Source: IFIC Bank Limited, North brook hall road Branch) 1.7 Hierarchy of Management IFIC Bank has eighteen hierarchy levels which are shown sequentially from the top levels-


1.8 MANGERIAL POLICIES i) ii) iii) iv) v) vi)

Financial policies Procurement policies Marketing policies Promotional policies Lending policies Personal policies

i) FINANCIAL POLICIES The financial policies of any bank are the most important policies through which the whole banking activity is conducted. These policies are primarily conducted on: • •

Source of funds Use of funds

SOURCE OF FUNDS: The bank finance policy is acquiring funds from the following sources: • • • • •

Deposits of account holders. Interest on advances and loans granted to the borrowers. Income and commission from the services provided by the bank. Bank opens various types of accounts for its customers Services are provided for earning. Interest income and commission bank providing the services to its customer.

ii) PROCUREMENT POLICIES Procurement policies are more concerned with manufacturing organizations. In bank industry that is service industry procurement means the procurement of funds from various sources such as deposits. It involves attracting and holding the funds of the depositors. After the acquisition of funds, the bank invest the acquire funds. One alternative is to lend its money and earned interest markup or invest in govt. securities etc. as already mentioned in the above paragraph the major sources of funds for a bank are the deposit of the general and the other sources of income includes interest or markup charges received for various services offered by the bank to its clients. A bank tries to attract maximum no. Of accounts so that it can increase it’s deposits and these lending ability. In order to get maximum no. of accounts the staff of the bank must be efficient as compared to the other banks and the manager of the branch must take personal interest in attracting deposits. Good quality of the service is the key to success.

iii) MARKETING POLICIES Marketing policies are also one of the most important policies because they are related to the growth of the organization. Marketing for a bank would mean:


1. Creation of new product and services. 2. The bank marketing must be consumer oriented. Following are the marketing policies of the IFIC. a. Keeping the track of latest development in the world and incorporating the latest and most modern equipment to make the banking procedures simple and easy for the customers. b. Development of products for the customers. c. Giving good services and maintaining good relations with the customers. These policies can be implemented by providing the right product and service to the customer at the right place, at the right time, at the right price. It is necessary for the managers to keep in touch with consumers, observe their needs and develop products, which meet their needs.

iv) PROMOTIONAL POLICIES Public relation and advertising has assumed a great importance in the modern banking business. As for as promotional activities are concerned, the main objective of the bank is to inform the existing clients and other people about its new products or change in the existing services. IFIC establishes its purpose through: 1. Direct contact with customers. 2. Relation with business organizations. 3. Community relations.

v) LENDING POLICIES: Every bank has its own lending policies except for those, which are common for all the banks, i.e. the policies, which are imposed on all the commercial banks by the SBP, are known as prudential regulations. The lending policies of IFIC are as follows: 1. The bank only invests in those sound and viable projects, which have good rate of return. 2. Bank prefers to advance loan to their account holders. 3. Loan is given to reliable person only. 4. No political loan is sanctioned by bank. 5. Any account holder can apply for running finance or demand finance. The manger appraises the past record of account holder and his credit worthiness. If he finds any thing wrong he can refuse to sanction the amount. 6. The bank while taking security prefers govt. Securities to shares. 7. It also advances working capital loans.

vi) PERSONAL POLICIES: Personal policies have an important role in the success of an any organization. IFIC have its proper personal policies. Good personal policies motivate the employees towards hardworking. Following are the main personal policies of IFIC: 1. Selection of employees on merit 2. Selection of capable employees.


3. 4. 5. 6.

Attractive salary package for motivation of employees. To train and develop the future management of the bank. Every employee must have certain set of clearly defined duties Effective communication at al levels of the organization.

1.9 Corporate Objectives: IFIC Bank’s objectives are reflected in the following areas: • • • • • •

Highly personalized service. Customer-driven focus. Total commitment to quality. Contribution in the economy. Quality of human resources. Commitment to its clients at each level.

The company believes that communication with, and feedbacks from its clients help it achieve its goal of providing world-class product and services. IFIC Bank regularly conducts client satisfaction surveys and make immediate accommodations and adjustments where needed. It also constantly monitors its standards, and strives to meet clients’ requirements. 1.10 Risk Management In view of the global recognition towards need of an effective risk management and control systems in financial sector, IFIC Bank being cognizant of the importance of the subject, has prepared and implemented the following policy guidelines on Risk Management: • Credit Risk Management • Asset Liability Management • Foreign Exchange Risk Management • Internal Control & Compliance • Prevention of Money Laundering 1.11

Joint Ventures Abroad

1.11.1 Bank of Maldives Limited IFIC is the first among the banks in the private sector to have operations abroad. In 1983, the Bank set up a joint venture bank in Maldives known as 'Bank of Maldives Limited' (BML) at the request of the Government of the Republic of Maldives. This is the only national bank in that country having branches throughout that country. IFIC Bank managed the affairs of BML from 1983 to 1992. IFIC Bank sold its shares in 1992 to the Government of the Republic of Maldives and handed over the Management of BML to Maldives Government. 1.12.2 NIB Bank Ltd., Pakistan IFIC Bank had two branches in Pakistan, one in Karachi and the other in Lahore. Karachi Branch was opened on 26th April 1987, while Lahore Branch was opened on 23rd December


1993.To meet the Minimum Capital Requirement (MCR) of the State Bank of Pakistan Therefore, the existence of our above Overseas Branches has ceased w.e.f. 2nd October 2003 and a new joint venture bank entitled NDLC - IFIC Bank Ltd. emerged in Pakistan w.e.f. 3rd October 2003. The Bank was renamed as NIB Bank Ltd. IFIC Bank presently holds 7.31% equity in the Bank. 1.12.3 Nepal Bangladesh Bank Ltd. (NB Bank) Nepal Bangladesh Bank Ltd. (NB Bank), a joint venture commercial bank between IFIC Bank Ltd. and Nepal nationals, started operation with effect from June 06, 1994 in Nepal with 50% equity from IFIC Bank Ltd. The Bank has so far opened 17 (seventeen) branches at different important locations in Nepal. IFIC Bank presently holds 25% shares in NB Bank. 1.12.4 Nepal Bangladesh Finance & Leasing Limited (NB Finance) Nepal Bangladesh Finance & Leasing Co. Ltd. (subsequently renamed as Nepal Bangladesh Finance & Leasing Ltd.), another joint venture leasing company between IFIC Bank Ltd. and Nepali Nationals, started its operation on April 18, 1999 in Nepal. IFIC Bank presently holds 15% share in the company. 1.12.5 Oman International Exchange LLC (OIE) Oman International Exchange LLC (OIE), a joint venture between IFIC Bank Limited and Oman nationals, was established in 1985 to facilitate remittance by Bangladeshi wage earners in Oman. IFIC Bank holds 25% shares, and the balance 75% is held by the Omani sponsors. The exchange company has a network of 10 branches covering all the major cities/towns of Oman. The operations of the branches are fully computerized having online system. The affairs and business of the company is run and managed by the Bank under a Management Contract. 1.13 CREDIT RATING ON IFIC BANK LIMITED Table 2.1: Credit rating on IFIC Bank Limited Long Term

Short Term

Surveillance Rating 2008

A

ST - 2

Entity Rating - 2007

A

ST - 3

Outlook

Stable

Date of Rating

June 29, 2009

(Source: IFIC Bank Limited, North brook hall road Branch) Credit Rating Information and Services Limited (CRISL) has assigned A (pronounced as single A) rating in the long term and ST - 2 in the short term to International Finance Investment and Commerce (IFIC) Bank Limited for the year 2008. The above rating has been given in consideration of the Bank's good fundamentals such as good capital adequacy, good financial performance, sound liquidity position, increasing trend in market share and decreasing trend in NPL. However, the above has been constrained, to some extent, by high


loan deposit ratio, decline in internal capital generation ratio and dependence on term deposits. Bank/ Financial Institutions rated in this category are adjudged to offer adequate safety for timely repayment of financial obligations. This level of rating indicates a corporate entity with an adequate credit profile. Risk factors are more variable and greater in periods of economic stress than those rated in the higher categories. The short term rating indicates high certainty of timely payment. Liquidity factors are strong supported by good fundamentals and the risk factors are very small. Credit Rating Information and Services Limited (CRISL) also viewed the bank with "stable outlook" on the basis of its consistent increase in operational efficiency. 1.14 Specialized Areas & Major Highlights of the IFIC Bank 1.14.1 VISA Card IFIC Bank VISA Credit has been launched in June 2007. The bank successfully launched VISA Card-Credit Card which created a new dimension in its customer service and consumer financing. It can be used for withdrawal of cash from ATM or purchase of goods and services from any point of sales (POS) displaying VISA Logo. Recently the bank launched VISA Debit Card and Prepaid Card. The Debit Cards are issued to the customers who have been maintaining Savings/Current account with our online branches. Prepaid cards are issued by the branches instantly. For Prepaid cards, it is not necessary to maintain any account with the bank. Bank POS has been installed at all the branches which will facilitate the card holders for withdrawal of cash from any branch of IFIC Bank. 1.14.2 “Your Satisfaction is First” Slogan Like any other country of the world, the people living in the urban areas of our country lead a very busy life. Time is very valuable to them. Despite this, they are to waste their valuable time at the counter of different Banks and other Institutions for payment of their monthly bills of different utility services like Electricity, Telephone, Water, Gas etc. They, 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 Point. With this end in view, IFIC Bank Limited has introduced a slogan entitled “YOUR SATISFACTION IS FIRST”. The slogan is designed to provide all the required services to the customer in making payment of their various bills on their behalf from the counter of the Bank irrespective of location. 1.14.3 IFIC Line- (Any Branch Banking) Online Branch Banking The Bank has set up a Wide Area Network (WAN) across the country to provide online branch banking facility to its valued clients. Under the Scheme, clients of any branch shall be able to do banking transaction at other branches of the bank. Any amount can be deposited or transferred under IFIC Line. In the system, however, at present there is a limit for cash withdrawal through bearer or by account holder himself. 1.14.4 Information and Communication Technology


Banks are constantly upgrading their technological platform to enhance customer value management capability for profit maximization. Accordingly, Real Time Online Banking, ATM, Credit Card, Debit Card / Prepaid Card, POS, SMS Banking; KIOSK etc. have been introduced in the domestic Banking Arena. IFIC Bank has introduced the following updated technology for the valued clients: o Introduction of Real Time Online Banking System in 56 branches out of total 74 Branches and up gradation of Head Office with Misys Online Banking Solution. o Establishment of ATM interface with core Banking solution. o Credit Card, Debit card / Prepaid Card and POS. 1.14.5 Customer care IFIC bank’s firm commitment to excellent customer service delivery has resulted to remarkable progress in all areas of operation during 2006. With the liberalization of banking and financial industry and increasing customer knowledge and sophistication, competitive pricing of products is no longer sufficient in capturing large market share. The continuous improvement in delivery of products and services, reduction of turn around time for loan processing, on-line deposits and remittance payments payment has the key differentiation for winning the customer satisfaction... Advertisement has been given in TV channels for developing awareness of the anti money laundering initiatives of the Bank 1.14.6 Corporate Social Responsibility (CSR) Globally, the notion of Corporate Social Responsibility (CSR) is fast gaining acceptance. IFIC Bank manages its business in a responsible way and contributes to the society and environment in which it operates. • • • • • • • •

Vocational training program for migrant workers Education for life program IFIC school/orphanage Education program for tokai/street children Medical training for midwives IFIC health care centre Eye camp And other related programs.

1.14.7 Human Resource Development: Human Resources Development (HRD) activities aim at fulfilling the Bank's Mission. One of our four major missions of IFIC is to: "Provide service to their clients with the help of a skilled and dedicated workforce whose creative talents, innovative actions and competitive edge make their position unique in giving quality service to all institutions and individuals that they care for." Skilled and dedicated workforce with creative talents, innovative actions are not always readily available. Appreciating the scarcity of such manpower, the Bank /Tom the very beginning laid importance to HRD that conceptually includes activities like: pre-recruitment drill, recruitment, induction training in the Academy, job rotation, placement and posting, reward and promotion. All these activities are planned by the Bank in an integrated way aiming at manpower with required technical, managerial, human and conceptual skills.


Management of IFIC Bank not only appreciates the need of skills required for day to day banking but also realizes the need for skills to meet the global and national financial and economic environments that are changing fast. Meeting the needs of new skills arising out of Financial Sector Reforms Programme (FSRP) is also a major concern of the management.

1.14.8 THE ACADEMY At the very beginning, the Bank laid a foundation by setting up an Academy at Head Office under Human Resource Development Division to develop human resource internally. Equipped with a professional library, modem training aids, professional faculty and other facilities, the Academy of the Bank is a leading one among the Banks in private sector. The Academy regularly conducts foundation courses, specialized courses and seminars in different areas of banking to take care of the professional banking needs. In addition, officers are regularly sent to Bangladesh Institute of Bank Management (BI8M) and Bangladesh Bank Training Academy for professional training. Sending officers abroad for higher training is a regular feature. A Research Department also works in aid of HRD and other operational areas. Academy Objectives IFIC Bank Academy, established in 1983 as an in-house training institution, takes care of the training need of the employees of the Bank. The objectives of the Academy are to: ♦ Make available skilled and dedicated workforce within shortest possible time by Reducing time required for on-the-job training. ♦ To develop understanding about law and practice of banking through foundation training; ♦Develop understanding about human/conceptual skill and organizational culture ♦ impart managerial skills to groom future Executives and to keep existing Executives upTo-date with national and international environment. Types of Programs For fresher, Foundation Courses on elementary knowledge of banking are organized. Specialized Courses on the areas like Credit, Foreign Exchange, Accounts, Inspection, and Marketing etc. are meant for officials working in those areas. Senior level courses are run on specific knowledge area. Certain courses are a blend of different knowledge areas. Approaches to Teaching The Academy holds need-based training courses/workshops/seminars etc. which are finalized by HRD Division in consultation with various departments and senior Executives at Head Office. Training inputs are constantly reviewed/modified for achieving the Bank's objectives. Methods in training include: discussion lecture/workshop/case study/games/role play/ film show/simulation/group work & presentation/project visit and so on. 1.14.9 On-The-Job Training


Foundation courses have to parts: ♌ Theoretical training in the academy and ♌ Job rotation. The officers on probation are required to under go both in a period if one year. During this period three –phased training is provided. On the theoretical training in, say, General Banking the officers required to under go under go rotation in General Banking Activities under the supervision of the HRDD. Similar process is followed in case of Credit and foreign Exchange. Products and services: IFIC bank is providing a wide range of financial services offering specialist advice and products to corporate clients to meet diverse demands of changing market scenario. We have expertise to customize products and services to meet specific requirements of our clients. We are committed to serve our customer with extensive branch network all over the country to expedite our clients business growth. We facilitate your business to face the challenges and realize opportunities, now and in the future. Our main focus is relationship based banking and understanding corporate and institutional business environments. Our experienced Relationship Manager and there team can respond to anticipate your needs and give you competitive business advantages. Products and services for commercial and business customers include, working capital finance, project finance, term finance, trade finance , lease finance, syndicated loan etc. Deposits, Loans and Advances:

Deposits 54724

60000 50000 40000 30000 20000 10000

16482

20483

28069

36022 Deposits

0 Deposits

2004 16482

2005 20483

2006 28069

2007 36022

2008 54724


CHAPTER-TWO LEARNING PART 2.0 Introduction The general banking development does the most important and basic work of the banks. All other developments are linked with this department. It also plays a vital in deposit mobilization of the branch. IFIC Bank Ltd. provides different types of accounts, locker facilities and special type of saving scheme under General Banking- For proper functioning and excellent customer service this department is divided in to various namely as follows: •

Accounts opening section

Dispatch section

Cash section

Bills and clearing section

Remittance section

Accounts section

2.1 Account Opening Section: Account opening is the gateway for clients to enter into business with bank. It is the foundation of banker customer relationship. This is one of the most important sections of a branch, because by opening accounts bank mobilizes funds for investment. Various rules and regulations are maintained and various documents are taken while opening an account. Table 3.1: Various rules and regulations for opening an account. Step1

The account should be properly introduced by any one of the following:  An existing Current Account holder of the Bank  Officials of the Bank not below the rank of an Assistant officer.  A respectable person of the locality well known to the manager / sub- Manager of the Branch concerned


Step2 Step3

Receiving filled up application in bank’s prescribed form mentioning what type of account is desired to be opened. • The form is filled up by the applicant himself/herself. • Two copies of passport size photographs from individual are taken; in case of firms photographs of all partners are taken. • Applicants must submit required documents • Application must sign specimen signature sheet and give mandate • Introducer’s signature and accounts number- verified by legal officer.

Step 4

Authorized Officer accepts the application.

Step 5

Minimum balance is deposited – only cash is accepted.

ACCOUNT OPENING PROCEDURE & PRECAUTIONS

Know your customer

The objective of knowing a customer is to have a fair idea about the identity, financial resources, and general information about the customer at the time when the relationship is established. A banker must have following information about the customer:

• Customer name: Enter complete name as mentioned in original ID card /other business documents. Nature of business /profession: if customer is of salaried class enter his employer name. If the customer is a businessman, trader, sole proprietor, enters the business name, for example “Jamil Traders” etc.also enters the customer’s title/position and address of the business/employer. Address with P.O.BOX is not acceptable. Similarly remarks like “Private service”, “business” are not acceptable, rather specify what type of company/business the customer is associated with for example Manager Philips Electrical Company.

Address:

Enter the complete business/residential address. With in the brackets you may also provide prominent address identification marks for ease of physically locating the address.

Contact Numbers:

Enter home, official, mobile, fax number and e-mail address (if available). Banker can verify the number by giving the customer a courtesy call or by sending him a e-mail.

Other/ secondary/ mailing address:

Some customer may volunteer their parents or siblings’ addressor second home address or a mailing address other than a permanent address.


Special instructions: Clear-cut special instructions must be obtained from customers. If the customer has not given any special instruction specified column must be cancelled by drawing a line, as this column must not be left blank in any circumstance. • Existing/other bankers: Almost most all the bankers usually have a banking relationship with another bank. In case of customer who does not have an existing banking relationship, or does not want to disclose the existing relationship, then it is strongly recommended that at least for some time this particular account must be kept under observation. 2.2 Different types of account A customer can open different types of account though this department such as:  Current account  Saving account  Short-term deposit (STD) account  Fixed deposit (FD) account  Bearer certificate deposit account (BCD)  Monthly income scheme (MIS)  Monthly saving scheme (MSS)  Super saving scheme (SSS)  Multi plus saving scheme (MFSS)  Smart saving scheme Requirement of opening an account: There are requirement that have to be completed for opening an account. 2.3 Current account Current account is an account where the account holders can make numerous transactions within a workday. There is no restriction on the number and the amount of withdrawals from the current account within available of funds. As the bank is under the obligation to repay this demand on interest is paid in this account. Generally, current account is opened for businessmen and trades for easy transition. But a person can open CD (current) account for special purpose. Requirement for the different types of accounts holders are discussed below.

• Proprietorship Firm There is a different account opening form for proprietorship firm provided by IFIC Bank Ltd. For this account, a customer must need to submit the following papers with the form; Enclose Document for proprietorship account  Introduction of the A/C.  Two photographs of the signatories duly attested by the introducer.  Copy of trade license


 Seal of the concern

• Partnership Firm There is an account opening form for partnership firm. Instructions for running an account are given in this form. Required document for partnership account are given below:  Introduction of the A/C.  Two photographs of the signatories duly attested by the introducer  Partnership letter duly signed by all partners.  Partnership Deed duly certified by Notary Public.  Registration (if any)  Seal of the concern  Update Trade License

• Limited Company An account opening form is use for limited company. There are two kinds of limited company, public limited and private limited company. The bank always takes precautions for opening this type of accounts. Several document submitted by the clients, which should be checked carefully by bank to be legal in a safe position.  Introduction of the A/C.  Two photographs of the signatories duly attested by the introducer  Signature and seal of the client.  Trade License  Certified copy of memorandum and articles of association.  Certified of incorporation.  Board resolution for opening A/C dully certified by the chairman/managing director  List of director along with designation & specimen signature  Latest certified copy of form XII (to be certified by registrar of joint stock company)  Certificate from board of investment (in case of joint venture or foreign co.)  Certificate from the register of joint stock co. is entitled to commence business in case of public Ltd. co)  Work permit order form Ministry of Industry. (In case of Foreign Nation)  Joint venture agreement (in case of joint venture)

Societies, Clubs and Associations

IFIC Bank requires the following documents duly completed shall be obtained from the customer at the time of current deposit account of Association/Club/Trust/ Society etc. Enclose Documents for Societies Club account:  Introduction of the A/C


 Registration Certificate Under the Societies Registration Act, 1962  Copies of Memorandum, Articles of Association Board Resolution for Opening A/C dully certified by president/secretary.  List of exhibiting managing committee.  Seal  Bylaws 2.4 Saving Account (Individual /Joint) Before opening of a savings Bank Account, the following formalities must be completed by the customer: Requirements are:  Introducer  2 copies of passport size photograph dully attested by introducer  Valid passport/ ward commissioner's identification certificate  Prescribed account opening form filled in properly by intending account holder  Putting specimen signatures in the specimen card.  Fill the KYC form  Initial deposit Tk. 5000/- only After fulfilling above formalities opens an account for the client and provide the customer with a deposit book and a checkbook in case of savings account and currents account for joint account, signatures of all the account holders are necessary. 2.5 Short-term Deposit (STD) In Short-term Deposit, the deposit should be kept for at least 7 (seven) days to get interest. The minimum balance should be Tk.10 (ten) lac. In IFIC Bank various big companies, Organizations, Government Departments keep money in STD accounts. Frequent withdrawal is discouraged and requires prior notice. Instance, under this scheme a deposit of Tk. 55,000/gives a monthly income of Tk.500/2.6 Fixed Deposit Receipt (FDR) Account They are also known as time liabilities or term deposits. These are deposits, which are made with the bank for a fixed period specified in advance. The bank need not maintain cash reserves against these deposits and therefore, the bank offers high are of interest on such deposits. There are different types of rate for different period of FDR, here shows the FDR interest rate in the IFIC Bank Ltd. It can be change in any time. Table 3.2: Fixed Deposit Receipts interest rate Period (Month)

Below 50 lac

1 month but less than 3 5.00% months

25 lac & above

50 lac & above

5.00%

5.00%


3 months but less than 6 7.75% months

8.00%

8.25%

6months but less than 1 8.00% year

8.25%

8.25%

1 year & above

8.50%

8.75%

8.75%-9.00%

2 years & above

8.60%

8.85%

8.85%-9.15%

(Source: IFIC Bank Limited, North brook hall road Branch)

2.7 Monthly Income Scheme This scheme is specially designed for the benefit of the limited income group members. This helps to accrue small monthly savings into a significant sum at the end of the term. So, after the expiry of the term period the depositor will have a sizeable amount to relish on. Table 3.3: Final amount of monthly income Scheme. Monthly Installment

After 5 years

After 10 years

=500/-

=40,100/-

=1,12,500/-

=1,000/-

=80,100/-

=2,24,500/-

(Source: IFIC Bank Limited, Bangshal Branch) 2.8 Monthly Saving Scheme This scheme is specially designed for the benefit of the limited income group members. This helps to accrue small monthly savings into a significant sum at the end of the term. So, after the expiry of the term period the depositor will have a sizeable amount to relish on. Table 3.4: Final amount of monthly saving Scheme No.

Monthly Installment (TK.)

After 3 year After 5 year After 8 year (TK.) @ (TK.) @ (TK.) @ 9.00% 9.25% 9.50%

1.

500

20627

37896

70849

2.

1000

41255

75791

141697

3.

2000

82510

151583

283394

4.

3000

123765

227374

425091

5.

4000

165020

303166

566788


6.

5000

206274

378957

708485

7.

10000

412549

757914

1416970

(Source: IFIC Bank Limited, North brook hall road Branch)

2.9 Special Deposit scheme (SDS) For most of the people on fixed income the opportunity to supplement their monthly earning is a golden one. And IFIC Special Deposit Scheme gives a customer just that- Under this scheme, customers can deposit money for a term of 5 years. During the term period they can enjoy a monthly profit corresponding to their deposited amount. As for instance, under this scheme a deposit of Tk. 55,000/- gives a monthly income of Tk.500/-. Table 3.5: Monthly Benefit Special Deposit scheme. Deposited Amount

Monthly Benefit

Tk. 55,000/-

Tk. 500/-

Tk. 1,10,000/-

Tk. 1,000/-

Tk. 1,65,000/-

Tk. 1,500/-

Tk. 2,20,000/-

Tk. 2,000/(Source: IFIC Bank Limited, North brook hall road Branch)

2.10 Saving Insurance Scheme (SIS) This IFIC scheme gives family protection against the insecurities of the customers. It combines the benefits of regular savings and insurance scheme. So, they get the usual rate of interest on the deposited amount while they enjoy the protection of a comprehensive insurance covers. 2.11 Non-government Organization (NGO) The account opening procedure is same but in exception is that the Registration Certificate from the Social Welfare Department of Government must be enclosed with the application. 2.12

Joint Account in The Name of Minor

A minor cannot open an account in his own name due to the incapacity to enter into a contract. He can open an account in IFIC Bank in Joint name of another person who will be guardian of him. 2.13

Issuing Cheque Books

The following procedures maintained of a cheque book:


 At first the customers will fill up requisition form.  The levels of the cheque book under issue shall be counted to ensure that all the levels and the bank requisition slip are intact and name and the account number shall be written on the cover page of cheque book and its requisition slip.  The name and account number of the customer shall be entered in the cheque register against the particular cheque book series.  Then the officer in charge of the deposit department signs the register, cheque book and requisition slip.  Then the cheque book is handed over to the customer after taking acknowledgement on the requisition slip and the register book. A cover file containing the requisition slip shall be effectively preserved as voucher. If the ledger keeper notices any defect, he will make a remark to that on the requisition slip and forwarding it to the cancellation officer to decide whether a new cheque book should be issued or not. 2.14

Procedure of account closing

A customer may close his/her account any time by submitting an application to the branch. The customer should be asked to draw the final cheek for the amount standing to the credit of his/ her account less the amount of closing another incidental charge and surrender the unused cheques levels. The account should be debited for the account closing charge etc. and the authorized officer of the bank should destroy unused cheque levels. In case of joint account the application for closing the account should be signed by the joint account holders. The fee for closing an account is Tk-25/-for SB A/C and Tk-50/-for CD or STD A/C. 2.15 Dispatch Section Dispatch division mainly operates the limitation of dispatching the intimidation latter to the client, Inter Bank Credit Advice (1BCA), Inter Bank David Advice (IBDA), out ward Bill Collection (OBC) to the other banks for internal transaction with the bank. Beside dispatch branches, another bank, negating bank (in case of Import), and opening bank (in case of Export) in the name of IFIC Bank Limited, Banshal branch. The officer engaged in the dispatch devotion maintains two types of register books to keep entries of those documents particulars. These two types of books are: 1. Inward mail 2. Outward mail Outward mail is also such types 1-By hand 1. Local courier 2. Overseas courier When the officer receives papers from outside the branch, it is required to give a dispatch no, on the paper. The officer put number on that paper and on the basis of nature of document he takes decision how it has to be dispatched. Some time he gives the document by hand to other party. At the beginning of the month, he withdraws. Money from bank, by issuing a


debit voucher for the payment of dissipating hills. He writes all the expansion of dissipating in the register and payment. At the end of the month, he calculates his total expenses; he refunds it to the bank by creating a credit voucher. 2.16 CASH SECTION All physical movement of cash in the bank is made through the cash department. Normally cash department performs following functions       

Receipt Payments Act according to any standing instructions Transfer of funds from one account to another Handling of ATM Verification of signatures Posting

2.17 Cash receipt section In this section the cashier in following manner receives cash:

Process of deposits Fill- up deposit

Deposited on

slip

Receipt Customer

Cashier counts the

Cashier counts the

amounts and fulfills other

amount and fulfills other

requirement

requirements

2.18 Cash payment section In this section honoring the cheque through following process makes payment.

Process of payment

Cheque is presented at counter

Cheque is recorded


Cashier counts the

Cancellation

amount

officer

&

cancels

payment is made

cheque

Two signatures on

Posting is made

back of the cheque by customer

2.19 Cash Section Activities Cash section of any bank plays a vital role in general banking procedure. Because it deals with the most liquid assets. There is several counters work simultaneously in cash section of IFIC Bank Ltd. Bangsal branch. There are also some electronic counting machines by which a huge amount of cash money can be counted within a few minutes.

Cash Packing

After the banking hour cash is packed according to the denomination. Notes are counted and packed in bundles and stamped with initial.

• Allocation of Currency Before starting the Banking hour all tellers give requisition of money through "Teller cash proof sheet". The head Teller writes the number of the packet denomination wise in "Reserve sheet" at the end of the day; all the notes remained are recorded in the sheet.

• Cash Receiving Process The work of cash receiving counter is examining deposit slips. Depositor uses the prescribed deposit slip supplied by the bank for deposit cash, cheque, draft, pay order etc. in all types of deposits the teller must check the following things:  The slip has been properly filled up.  The title of the account and its number.  The amount in figure and in words is same.  Instrument signed by the depositor.  Date of the instrument.

• Cash Receiving Seal The main components on the cash receiving seal are


 Name of the bank.  Name of the branch.  Date  Cash Received.

• Cash Payment Process In order to safe guard the position the playing banker has to observe the following precaution before honoring a cheque.  A cheque must be looked whether it is an opened or closed cheque.  The playing officer should see whether the cheque is drawn on his/her branch.  He must see if the cheque is post dated or pre dated. A letter must not pay any post dated cheque.  The officer must carefully see the apparent tenor of the cheque. If it is mutilated or materially altered then the officer must not honor it.  The officer must compare the signature of the cheque with the signature on the specimen cards.  The officer must verify the regularity of the endors4ement.  The officer may allow overdue against a cheque if prior arrangement is done with the bank.

• Passing the Cheque After verifying the above-mentioned things the officer passes it to computer section for more verification. After that it is passed to \the cash to make payment. By putting pay cash seal the cash officer make it clean to pay. The cash officer gives the cash amount to the holde4r and record in the paid register. Dishonor of cheque: A banker can dishonor a cheque in the following situations:  Insufficient fund.  Payment stopped by drawer.  Alternation require in drawer signature.  Effect not cleaning the cheque.  Fill cover not received.  Payees’ endorsement irregular/illegible/required.  Drawer's signature differs/required  Clearing stamp required/requires cancellation  Addition to Bank's discharge should be authenticated  Cheques crossed" Account Payee Only  Cheques are post dated/ out of date/mutilated  Collecting Bank's discharge irregular/required.


• Types of notes  Issue Note: Issue notes are the notes, which the client take or receive without any objection.  Non-issue Notes: Non-issue notes are t5he notes that are obsolescence or banned in our country and that not being taken by the client.  Torn Note: Torn note are the note that are being separated by dividing three parts.  Solid Notes: Solid notes mean the types of notes whose written part is being ambiguous by some only thing. 2.20 CLEARING DEPARTMENT

• MEANING OF CLEARING

The word clearing has been derived from the word “Clear” and is defined as “ a system by which banks exchange cheques and other negotiable instruments drawn on each other within a specific area and thereby secure payment for their clients through the Clearing House At specified time” in an efficient way”. 1. Since clearing does not involve any cash etc. and all the transaction take place through book entries, the number of transaction can be unlimited. 2. No cash is needed as such the risk of robbery, embezzlements and pilferage is totally eliminated. 3. As major payments are made through clearing, the banks came manage cash payments at the counters with a minimum amount of cash in vaults. 4. A lot of time, cost and labor are saved. 5. Since it provides an extra service to the customer of banks without any service charges or costs, more and more people are inclined and attracted towards banking.

• CLEARING HOUSE It is a place where representatives of all banks sit together and interchange their claims against each other with the help of controlling staff of Bangladesh Bank And where there is no branch of Bangladesh Bank the designated branch of Sonali Bank Ltd. act as controlling member instead of Bangladesh Bank.

• MEMBERSHIP CEASES  It ceases to be a scheduled Bank.  It is not able to meet its liabilities.  Bangladesh Bank or Central Govt. prohibits it to receive fresh deposits. • RULES AND REGULATIONS HAVE CLEARING HOUSE Timing :( Sunday through Thursday) i.

1st Clearing at 10:00 a.m.

ii.

2nd Clearing at 2.30 p.m.


 Each bank will send competent representative to exchange the cheques.  Each bank is required to insure that all cheques and other negotiable instruments are properly stamped and suitably discharged  An objection memo must accompany each and every cheque when return unpaid duly initialed.  Each bank is required to maintain sufficient funds in the principal account with SBP to meet the payment obligations.  The Bangladesh Bank debit the account of each member of the clearinghouse with the proportionate working expenses incurred on the operation of clearing house. These expenses are very nominal. 2.21 OUTWARD CLEARING AT THE BRANCH The following points are to be taken into consideration while an instrument is accepted at the counter to be presented in outward clearing:       

The name of the branch appears on its face where it is drawn. It should be stale or post dated or without date. Amount in words and figures does not differ. Signature of the drawer appears on the face of the instrument. Instrument is not mutilated. There should be no material alteration, if so, it should be properly authenticated. If order instrument suitably indorsed and the last endorsee’s account being credited.  Endorsement is in accordance with the crossing if any.  The amount of the instrument is same as mentioned on the paying-in-slip and counterfoil.  The title of the account on the paying-in-slip is that of payee or endorsee (with the exception of bearer cheque). If an instrument is in order than our bank special crossing stamp is affixed across the face of the instrument. Clearing stamp is affixed on the face of the instruments, paying-in-slip and counterfoil (The stamp is affixed in such a manner that half appears on counterfoil and paying-in-slip). The instrument is suitably discharged, where a bearer cheque does not require any discharge and also an instrument in favor a bank not need be discharged. The instrument along with pay-in-slip is retained while the counterfoil is given to the customer duly signed. Then the following steps are to be taken: 1. The particulars of the instrument and the pay-in-slip or credit voucher are entered in the outward clearing register. 2. Serial no. Is given to each voucher. 3. The register is balanced; the credit vouchers are balanced from the instruments and are released to the respective departments against acknowledgement in the register. 4. The instruments are arranged bank wise. 5. The schedules are prepared in triplicate, two copies which are attached with the relevant instrument and the third is kept as office copy.


6. The house page is prepared from schedules in triplicate. 7. The schedules and house pages are signed by the house in charge with branch stamp. 8. The grand total of the house page is taken and agreed with that of the outward clearing register. 9. The instrument along with duplicate schedule and house page are sent to the main office. However the amount is kept in float till final status of various instruments is known from respective paying banks in second dealing. The entry of the instrument returned unpaid is made in Cheques returned Register. If the instrument is not to be presented again in clearing then a covering memo is prepared. The covering memo along with returned instrument and objection memo is sent to the customer who sent the same to his account. 2.22 INWARD CLEARING OF THE BRANCH 1. The particulars of the instruments are compared with the list. 2. The instruments are detached and sort out department wise. 3. The entry is made in the inward clearing register (serial no. Instrument no. Account no. Is written). 4. The instruments are sent to the respective departments 5. The instruments are scrutinized in each respect before honoring the same. 2.23 OUTWARD CHEQUES RETURNED UNPAID These are the cheque returned unpaid by us in inward clearing. due to some objections. 2.24 INWARD CHEQUES RETAINED UNPAID These are the cheques retained unpaid to us which were lodged by us in Outward Clearing. 2.25 RETURN OF CHEQUES AFTER CLEARING HOUSE Suppose all cheques received in the inward clearing are passed and later on it is found that a cheque should have been returned, in such cases, we contact the collecting branch and request them not to make payment against the proceeds of the cheque which was not returned unpaid by us in due time. the cheque with objection memo along with a covering letter is sent to the collecting branch, making request to issue a payment order in favor to balance the Cash-cumday book we may debit suspense account sundry debtors with the approval of the manager. When the payment order is received, it is lodged in clearing and suspense account, sundry debtors is adjusted accordingly. 2.26 SPECIAL CLEARING In addition to the normal clearing function at Clearing house it is mutually agreed to hold an extra clearing at the clearing house on the particular day and time which is known as “special clearing� it is arranged due to the rush of work arising out of say, more Holidays declared by


the Central Govt. at a time, but normally special clearing is held on last working day of our half yearly and yearly closing i.e. 30th June and 31st Dec. every year. 2.27 ONLINE BANKING Online banking means that the customer of IFIC can deposit / withdraw funds in / from other branches of IFIC. IFIC bank provides online facility to all its branches. Table 3.6 ONLINE Charge in Different Transaction S.I. NO.

Transacted Amount

Rate of charges

1

Same clearing zone

Free

2

Up to 50000 (Inter clearing zone)

Free

3

50001-200000(Inter clearing zone)

Tk.50+VAT

4

200001-400000(Inter clearing zone)

Tk.100+VAT

5

400001-600000(Inter clearing zone)

Tk.200+VAT

6

600001-1000000(Inter clearing zone)

Tk.300+VAT

7

1000001-1500000(Inter clearing zone)

Tk.500+VAT

8

1500001-2000000(Inter clearing zone)

Tk.800+VAT

9

Above 2000000(Inter clearing zone)

Tk.1200+VAT

S.I. NO.

Transacted Amount

1

Same clearing zone

Free

2

Up to 50000(Inter clearing zone)

Free

3

50001-250000(Inter clearing zone)

Tk.50+VAT

4

250001-500000(Inter clearing zone)

Tk.100+VAT

5

500001-1000000(Inter clearing zone)

Tk.200+VAT

6

1000001-1500000(Inter clearing zone)

Tk.400+VAT

(Cash deposit and cash withdrawal)

Rate of charges

(Fund Transfer)


7

1500001-2000000(Inter clearing zone)

Tk.800+VAT

8

Above 2000000

Tk.1000+VAT

(Source: IFIC Bank Limited, Bangshal Branch) LOCKERS IFIC bank offers facility of lockers to its customers. There are three sizes of lockers available: Table 3.7 Lockers Charge Size of lockers

Charges of locker

Large

TK.3500 Yearly

Medium

TK.2700 Yearly

Small

TK.2000 Yearly (Source: IFIC Bank Limited, Bangshal Branch)

2.28 Remittance Section: Local carrying cash money is trouble and risky, that’s why money can be transferred from one place to another through banking channel. This is called remittance. Remittance of funds is one of the most important aspects of the commercial Bank in rendering services to its customers. Remittance means transfer of money from one place to another. It is one of the safest ways to transfer money from one place to another. National Bank Ltd. has 91 brunches so they have strong network through whole country and they can easily remit money most of the districts with in the country. For transferring money National bank ltd offers different instruments such as: • • • •

Telegraphic transfer(TT) Pay order (PO) Demand draft (DD) Pay slip

2.29 Type of remittance: • • • • •

Between bank and non banks customer. Between bank in the same country. Between banks in the different centers. Between bank and central bank in the same country. Between central bank of different customers.


Points

Pay Order

Demand Draft

TT

Explanation

Pay order gives the payee the right to claim payment from the issuing bank

Demand Draft is an order of issuing bank on another branch of the same bank to pay specified sum of money to payee on demand.

Issuing branch requests another branch to pay specified money to specific payee on demand by Telegraphy Telephone

Payment from

Payment from Payment from ordered Payment from ordered Issuing branch branch branch

Generally used Within the Outside the Anywhere in the to remit fund clearinghouse area clearinghouse area of country of issuing branch issuing branch payee can also be the purchaser. 1. Confirm that the 1. Confirm issuing Payment Payment is made DD is not forged branch process of the through clearing one. 2. Confirm payee paying bank 2. Confirm with sent AIC. advice 3. Confirm amount 3. Cheek the “Test 4. Make payment code� 5. Receive advice 4. make payment Charge

Only Commission

Commission charge

+

telex Commission telephone

+

(Source: IFIC Bank Limited, Bangshal Branch) 2.30 Pay Order (PO): Pay order is an order by an issuing branch or bank upon client for made payment of the amount maintained there in that named pay on according to client order. Pay order issued only for local payment. Commission: For issuing pay order client should pay 50 taka as commission up to 5 laces, Above 5 laces 100 and 15 taka for VAT. Procedure for cancel pay order: It has been seen that usually pay order cancel in two certain situation which is as follows:Situation one: When client issued any pay order in the name of any payee. If payee does not accept the pay order then payee put his seal and signature back side on the pay order then payee returns to the client. The client of the pay order has deposited it on his account after that authorized officer issue one debit and voucher. Debit voucher: - pay order accounts Credit voucher: - clients account


Situation two: If client wants to cancel his pay order before submitted then have to submit as application for deposited that pay order amount to his account. In this client should paid cancellation charges. Which as follows: • •

UP to 500 taka charge 10 taka Above 500 taka charge 25 taka

2.31 Demand draft (DD): 1) DD incoming 2) DD outgoing Requirements for sending DD: Procedure for sending DD: When client want to transfer money from IFIC, Bangshal branch to NRL, Agrabad branch (suppose) then following ways he should follow • • •

At first collect DD form from remittance division Deposit money in cash department which he mentioned in DD form. Client should have account in National at Motijheel branch and sending place Client Should paid commission, VAT. Then client collect cost memo from remittance division, this cost memo work as an evidence in favor of client. The authorized officer put test code and registers it in the DD payment register book then authorized officer send massage to the Agrabad branch by telephone or telex. This massage contains client account number, test number, amount. Characteristics of demand draft (DD): • •

It is drawn on one branch upon another branch of the same bank It payment ca only that whose name mentioned in the pay orders.

Commission: • •

Up to 2500 taka commission 25 taka. Above 25000 taka every one thousand carry 1 taka.

VAT: - VAT is 15% of commission. 2.32 Issue of Demand Drafts  The customer is asked to complete filling in a form that is treated as an application as well as voucher. The application form should be checked carefully.  Commission charges are calculated and inserted in the case provided in the form.  The voucher given to the customer to deposit the cash with the cashier.  The cashier receives the cash and delivers the voucher to Remittance  Department against initial in his book.


 Draft is prepared and entered in draft issue Register.  Branch-wise serial number is given on the draft besides the printed number putting on oblique (/) in between. The amount of the protect graphed.  The draft number is written on the voucher.  Draft block and the voucher along with the register are sent to the officer in charge for checking and signatures. He signs the draft and voucher and initials the counterfoil of the draft and the Register.  Then the draft and the voucher are sent to the Manager/ Second Officer for second signature.  The draft is crossed if customers desires and delivered to him against his acknowledgement on the voucher.  If Cheques tender the amount, the drawer to and the purchaser of the draft should be the same person, i.e. the signature on the Cheques and on the application form must tally.  A memorandum is issued to the customer if he or she desires.  The Cheques is sent for passing and cancellation.  After the Cheques is passed, similar procedure as explained above is adopted for issuing draft. 2.33 Accounts Section This is a very much crucial department for each branch of a commercial bank. Records of all the transactions of every department are kept here as well with other respective branches. Accounting department verifies all financial amounts and contents of transactions. If any discrepancy arises regarding any transaction this department to concerned department. Tasks of accounting department Accounting department plays a vital role in commercial banking. In private banking sector Accounting departments of National Bank Limited perform its task properly. The activities of accounts sectors are as follow:  Record all the transaction in the cashbook.  Record all the transaction in general land subsidiary ledger.  Prepare daily fund functions, weekly position, periodic statements of affairs etc.  Periodic necessary statements for reporting purpose.  Pay all expenditure on behalf of the branch.  Make salary statement and pay salary.  Branch to Branch fund remittance and support for accounting treatment.  Budgeting for branch.  Make charges for different types of duties.  Checking of transaction list.  Recording of the vouchers in the voucher register.


CHAPTER-THREE ANALYSIS PART 3.1 SWOT Analysis Every organization is composed of some internal strengths and weaknesses and also has some external opportunities and threats in its whole life cycle. The following will briefly introduce the customer to the IFIC Bank internal strengths and weaknesses, and external opportunities and threats as I have explored in the past ten weeks. 3.1.1 Strengths •

Customized Solution: The management of the bank believes in customer focused banking rather than the product oriented banking. The products and services designed by the bank are specifically tailored to the individual needs of its customers.

Superior Quality: IFIC Bank provides its customers excellent quality of service. It gives the first priority to customer satisfaction.

Ethical Concerns and Pubic Image: The organizations showing concern for the people, ethics, and environment enjoy good public reputation and are able to reap the benefits in the long run. IFIC management is quite sensitive to this issue.

Dynamism: IFIC Bank draws its strength from the adaptability and dynamism it possesses. It has quickly adapted to world class standard in terms of banking services. IFIC Bank has also adapted state of the art technology to connect with the world for better communication to integrate facilities.

Financial Strength: IFIC Bank is a finally sound company backed by the huge resource. As result customers feel comfortable in dealing with the company.

Efficient Management: All the levels of the management of IFIC Bank are solely directed to maintain a culture of the betterment of the quality of the service and development of a corporate brand image in the market through organization wide term approach and open communication system.

State of the Art Technology: IFIC Bank utilizes state-of-the-art technology to ensure consistent quality and operation. The corporate office is equipped with SWIFT (SWIFT is a banking software, used by IFIC Bank). All other branches are also equipped with SWIFT system. Experts:


The key contributing factor behind the success of the IFIC Bank is its employee, who is highly trained and most competent in their own field. Bank Asia provides their employees training both in-house and outside job. •

In-House Utility: IFIC Bank is free from dependence on ever disruptive power supply of our public sources. The company generates the required power through generator fed on diesel. Water generation is done by deep tube wells on site and in abundance . Excellent Working Environment: IFIC Bank provides its workforce an excellent place to work in. Total complex has been centrally air conditioned. The interior decoration was done exquisitely with choice of soothing colors and blend of artistic that is comparable to any overseas bank.

3.1.2. Weaknesses •

Limited Workforce: IFIC Bank has limited human resources compared to its financial activities. There are not many people to perform most of the tasks. As a result many of the employees are burdened with extra workloads and work late hours with out any overtime facilities. This might cause high employee turnover that will prove to be too costly to avoid.

Manual Book-keeping: Although the bank has computerized accounting system but, still the bankers use to make their entries in the accounting register.

Problem in Delivery: Few of the IFIC Bank products offered to its clients like “Personal Credit (PC)” is lying idle due to proper marketing initiative from the management. These products can easily be made available in attractive ways to increases its client base as well as its deposit status.

3.1.3. Opportunities •

Government Support: Government of Bangladesh has rendered its full support to the banking sector for a sound financial status of the country, as it has become one of the vital sources of employment in the country now. Such government concern will facilitate and support the long-term vision of IFIC Bank.

Evaluation of E-Banking: Emergence of e-banking will open more scope for Bank Asia to reach the clients not only in Bangladesh but also in the global banking arena. Although the bank has already entered the world of e-banking but yet to provide full electronic banking facilities to its customer. A proper blend of Banking and information technology might give the bank leverage to its competitors. Nevertheless there are ample opportunities for IFIC Bank to go for product innovation in line with the modern day need. The bank has yet to develop credit card facility, lease financing and merchant banking.


3.1.4. Threats •

Merger and Acquisition: The worldwide trend of merging and acquisition in financial institution is causing concentration. The industry and competitors are increasing in power their respective areas.

Poor Telecommunication Infrastructure: As previously mentioned, the world is advancing e-technology very rapidly. Though IFIC Bank has taken effort to join the stream of information technology, it is not possible to complete the mission due to poor technology and infrastructure of our country.

Frequent Currency Devaluation: Frequent devaluation of Taka exchange rate fluctuations and particularly South-East Asian currency crisis adversely affects the business globally.

High Employers Turnover: As discussed above, the job satisfaction level of the employee is very low resulting in high turnover, which is bad for any organization as there are huge monetary and nonmonetary costs involved in the fresh recruitments.

Emergence of Competitors: Due to high customer demand, more and more financial institutions are being introduced in the country. There are already 52 banks of various types are operating in the country. Many banks are entering the market with new and lucrative products. The market for banking industry is now a buyer dominated market. Unless IFIC Bank can come up with attractive financial products in the market, it will have to face steep competition in the days to come. CHAPTER-FOUR FINDINGS, CONCLUSION AND RECOMMENDATION

4.1 FINDINGS IFIC Bank limited as a new generation commercial bank has facing a lot of problems in comparison to other banks. These problems are related to operation of daily banking activities, opening new branches, Bangladesh Banks rules and regulations, customer services, customer behavior, maintenance of liquid assets, lack of experienced personnel etc. The major findings and limitations faced by the bank are recorded as follows:

• In opening A/C some additional documents are required by the bank for record. Only

this is very difficult for the customer to understand sometimes and discourages the average person to create accounts in IFIC Bank Ltd. • Most of the bankers are not very expert and well-known in modern technology.


• According to central bank order every bank has to provide MICR cheque book to

account holder that will be used specially for “Account Payee” but to get this cheque book it requires at least fifteen days that delay customer transactions.

• When a client wants to open an A/C s/he must need an introducer, sometime it creates problems for the clients.

• Theoretically any person can purchase pay order, demand draft and telex transfer by

depositing money and commission. But the person who wants to purchase these should have account in the bank branch. These will discourage customers to transact with bank.

• There is a rule to deposit at least an amount of money in case of opening an account.

But it is not strictly followed. Sometimes more money is asked from a new customer who discourages him to open an account in the bank.

• The products and services provided by IFIC Bank Ltd are not sufficient in comparison to other banks so that the bank is lagging behind in competition.

• Banks are heavily regulated by the central bank of Bangladesh but due to lack of

knowledge or experience of the employees the rules are not always maintained strictly.

• All customers are not concerned about the latest technology based services and all are not readily interested to accept the technology-based services.

4.2 CONCLUSION From the very of civilization of time Banking activities is a critical job and the present days banking business is very competitive and complex. Banking sector, as a service sector of Bangladesh continues to contribution to a great deal in the economy of Bangladesh. International Finance Investment and Commerce Bank Limited (IFIC Bank) is banking company. It was set up at the instance of the Government in 1976 as a joint venture between the Government of Bangladesh and sponsors in the private sector with the objective of working as a finance company within the country and setting up joint venture banks/financial institutions aboard. IFIC BANK LTD. is marching in an aggressive way to reach the all levels of clients and customers, which ensure certain, and mentioning position in the market. 4.3 RECOMMENDATION As a new generation commercial bank yet IFIC BANK LTD. facing to some serious problems but it is also true that these problems may be turn into opportunity if the authority takes some initiatives. The initiatives may be as follows: • • • • • •

Multipurpose new schemes should be introduced to attract the clients and to enhance the deposit. Account opening process should be made easy to attract the customer. Political and organizational pressure should be eliminated in case of transaction. Bank should regularly review and update the present marketing strategy. The working condition should be improved. Employees must be provided with adequate working equipment in order to provide better customer service. IFIC Bank Ltd. Bangshal branch should provide MICR cheque book to all clients as soon as possible to get customer satisfaction.


• • • • •

IFIC Bank Ltd. should recruit experienced personnel from other banks and financial institutions in order to provide better and efficient banking services and ensuring growth. New branches should be opened in the economically promising area. Modern banking Technology should be arranged in all sector for providing better services. Bankers Customer relation should be closer and regular communication with the customer should be maintained. Bank should be arranged proper idea about modern technology to all service holders.

Prospectus/ Annual Report Prospectus of IFIC Bank Ltd (2009&2010) Prudential Regulations for Small Enterprises Financing (2009&2010) Annual Report (2008), IFIC Bank Ltd, Dhaka, Bangladesh Annual Report (2009), IFIC Bank Ltd, Dhaka, Bangladesh


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