View with images and charts Report On Agrani BANK LIMITED COMPANY PROFILE 1.1 A Brief History of Agrani Bank Limited: Agrani Bank is a corporatized commercial bank of Bangladesh established in 1972. Its headquarter is situated at Motijheel in Dhaka, the capital city of Bangladesh. Agrani Bank Limited, a leading commercial bank with 867 outlets strategically located in almost all the commercial areas throughout Bangladesh, overseas exchange houses and hundreds of overseas correspondents came into being in 1972 immediately after the emergence of Bangladesh as an independent state. It started functioning as nationalized commercial bank taking over assets and liabilities of the rest while Habib Bank Ltd. and Commerce Bank Ltd. functioning in the East Pakistan. It has been privatized on 15 th November 2007 and emerged as Agrani Bank Limited (ABL) taking over assets, liabilities and goodwill of Agrani Bank. The authorized capital of the Bank is Tk. 800 crore. It has been corporative on 15th November 2007 and emerged as Agrani Bank Limited (ABL) taking over assets, liabilities and goodwill of Agrani Bank. Agrani Bank Limited is governed by a Board of Directors consisting of 11 (eleven) members headed by a chairman. The Bank is headed by the Managing Director & Chief Executive Officer; Managing Director is assisted by Deputy Managing Director and General Managers. The Bank has 7 Circle Offices, 30 Divisions in head office, 52 Zonal Offices and 867 Branches including 10 Corporate and 40 AD (Authorized Dealer) branches. The Corporate and AD branches are authorized to deal in Foreign Exchange business. 1.2 Agrani Bank at a Glance: Name of the Company Chairman Managing Director & CEO Company Secretary Legal Status Genesis
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Agrani Bank Limited Khondoker Bazlul Hoque, PhD. Syed Abu Naser Bukhtear Ahmed, B.Sc., MBA
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Date of Incorporation Registered Office
Md. Ekramul Hakim Public Limited Company Agrani Bank Limited has been incorported on 17 May 2007 and has taken over the business, assets, liabilities, rights and obligations of Agrani Bank with effect from 1 July 2007. Agrani Bank, which initially emerged as a Nationalized Commercial Bank (NCB) in 1972, following The Bangladesh Banks (Nationalization) Order, 1972 (President Order No. 26 of 1972), has now become a State Owned Commercial Bank (SCB) through a vendor's agreement dated 15 November 2007. 17 May 2007 9D Dilkusha Commercial Area, Dhaka-1000, Bangladesh
Authorized Capital : Paid up Capital : Reserved & Retained : Earnings
Tk. 800 Crore Tk. 497 Crore Tk. 420 Crore
Number of Employees Number of Branches Number of Subsidiary Companies Phone- PABX
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11443 867 2
Fax SWIFT AT H.O. ID Website E-mail
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+88-02-9566153-54, +88-02-9566160-69, +88-029566074-75 +88-02-9562346, +88-02-9563662, +88-02-9563658 AGBKBDDH www.agranibank.org email@example.com firstname.lastname@example.org
Vision To become a leading bank of Bangladesh operating at international level of efficiency, quality and customer service. Mission We operate ethically and fairly within the stringent framework set by our regulators. We fuse ideas and lessons from our regulators. We explore new avenues to become stronger, more efficient and competitive. We apply information and communication technology for the benefit of our customers and employees. We invest to strengthen the future of the bank. Values We value integrity, transparency, accountability and professionalism to provide a high standard of service to all our customers and stakeholders. Strategic Objectives Wining at least 6 percent share of deposits and 4.5 percent share of loans and advances of the Bangladeshi market. Gaining competitive advantages by lowering overall cost compared to that of competitors. Overtaking competitors by providing quality customer service. Achieving technological leadership within the peer group. Strengthening the Bank’s brand recognition. Contributing towards the economic well-being of the country by focusing particularly on SME and agricultural sectors. Strengthening research capability for innovative products. Ethical Standards 1. Be Trustful: We believe in mutual trust and treat our customers in a way so they can trust us.
2. Keep an Open Mind: For continuous improvement of our Bank we keep our minds open to new ideas. We seek opinions and feedback from both customers and team members through which our bank will continue to grow. 3. Meet Obligations: Regardless of the circumstances, we do everything to gain the trust and confidence of customers and clients by honouring our commitments and obligations. 4. Be Transparent: We are transparent in our dealings with customers and all stakeholders. We re-evaluate all printed materials including advertising, brochures, and other business documents making sure that they are clear, precise and professional.
2.1 Structure of the Organization:
Hierarchy of Agrani Bank Board of Directors Chairman Directors Managing Director
Deputy Managing Director
Deputy General Managers
Assistant General Managers
Senior Principal Officers
Officers / Officers (Cash)
Clerical Staff Members
Non-Clerical Staff Members
Figure: 2.1 Structure of the Organization GENERAL BANKING DEPARTMENT All business concerns earn a profit through selling either a product or a service. A bank does not produce any tangible product to sell but does offer a variety of financial products/ services to its customers. General Banking is the starting point of all the banking operations. It is the department, which provides day-to-day services to the customers. Every day it receives deposits from the customers and meets their demand for cash by honoring Cheques. It opens new accounts, remit funds, issue bank drafts, telephonic transfers and pay orders etc. 3.0 Division of General Banking: 3.1 Accounts opening 3.2 Accepting deposits 3.3 Cheque book issue 3.4 Transfer of account 3.5 Closing of account 3.6 Cash Department 3.7 Remittance 3.8 Other services a. ATM service b. Locker Service c. Online facility 3.1 Account Opening Section: It is said that, there is no banker customer relationship if there is no A/C of a person in that bank. By opening an A/C banker and customer create a contractual relationship. However, selection of customer for opening an account is very crucial for a Bank. STEP: 1 Applicant fill up the prescribed application form in recommended form. STEP: 2 Customers are requiring to filling up the specimen signature card. STEP: 3 For individuals introduction is needed by an account holder. STEP: 4 Authorized officers scrutinize the introduction and examine the documents submitted. STEP: 5 Issuance of deposit slip and the deposit must be made in cash. No cheque or draft is acceptable to the Bank. STEP: 6 Account is opened. STEP: 7 After depositing the cash one chequebook, a pay- in-slip book & ATM card are issued. Before opening of a current or savings account, the following formalities must be completed i. Application on the prescribed form; ii. The customer information must be filled up with the form; iii. Introduction: The following persons can introduce an A/C opener: a. An existing current/savings account holder of that branch; b. An officer of that branch; c. A respectable person of the society or locality who is well known to the Manager/2nd man of the branch concerned; iv. Furnishing photographs; v. Banker will supply a set of printed forms required for opening the account, which will normally include: a. Specimen Signature Cards (SSC);
b. Deposit Slip Book c. Check Book Requisition slips; vi. Customer should carefully read and full-fill the application form; vii. Putting specimen signatures in the specimen card. viii. Any special instructions with regard to operation of the account should be noted on the relevant signature card boldly duly authenticated by the A/C holder should be obtained; ix. The required Account Number for the new Account from the Account Opening Register should be obtained; x. Obtain the signature and A/C number of the Introducer on the advice and getting the signature properly verified by an Authorized official of the Bank; xi. The Deposit slip properly filled in and signed by the customer; xii. Then the new A/C number should be written at the appropriate place of the Deposit slip and mark new Account on both the copies of the deposit slip and request the customer to deposit the money at the cash counter; xiii. Place the signature cards, Advice of new account, a copy of Deposit slip, photographs and other necessary papers/documents etc. in a file; xiv. Obtain approval of the Authorized officer for opening the new account on all relevant papers while giving approval for opening an account the Authorized official should be satisfied about the of the Introducer; xv. The Authorized officer on the advice of new A/c and on the specimen signature cards should also attest the signature of the new A/C holder; xvi. After approval of the opening of the A/C, get the Cheque book requisition slip signed by the customer; xvii. Deliver the chequebook to the customer after properly marking the Account number, name and place of the branch on each leaf of the checkbook; On completion of account opening open a file for the new a/c holder and file all relevant papers forms etc. Signature cards, copies of Advice, Deposit slip Debit ticket etc. is distributed to concerned departments; 3.1.1 Duties and Obligations of Introducer: The introducer is secondarily liable to the banker for any fraud-forgery or any violation of the contract between banker and customer. But in practice, introducers usually help banker to find out the customer in case of any offence. 3.1.2 Documents Required for All Types of Accounts & Customers: 1. Advise of New Account (in duplicate) 2. Specimen signature cards (in duplicate) 3. Account Opening Agreement Form 4. Photographs of Account Holders (in duplicate) 5. Nationality certificate/Photocopy of valid passport 6. Deposit Slips Book 7. Cheque book Requisition slips 8. Letter of mandate authorizing another person/s to operate the A/C on behalf of the Account holder, where necessary. 9. Nominee form duly filled in 10. Transaction profile duly filled in. 3.1.3 Additional Documents are to be obtained for Opening Some Special Accounts: I) Proprietorship Firm a) Name of authorized persons, designation, specimen signature card.
b) c) d) e)
Trade licence. Tax Receipt ( For export/ import ) Declaration of Proprietorship Mandate if operation by third party is to be allowed.
II) Partnership Firm a) Account must be opened in the name of the firm. b) The firm should describe the names and addresses of all partners. c) Partnership deed is required which duly attested by Notary Public d) Trade licence from city corporation is needed. e) Tax receipt ( For import/ export ) f) Photocopy of Registration Certificate duly attested by Notary Public in case of a Registered Firm. g) Letter of Partnership duly signed by all the partners, in case of non-Registered Firm. h) Resolution signed by all the partners to open the A/C. i) Mandate as to operation of the A/C. III) Limited Company a) Certificate of incorporation b) Certificate of Commencement of Business (In case of Public Limited Company only.) c) List of all Directors, Designation, Address, Specimen Signature d) Memorandum of Association e) Article of Association f) Power of attorney. g) Resolution of the Board of Directors authorizing opening of an account. IV) Club/Socities/Trustee/Association/Non-Trading Institutions etc. a) Certified copy of Resolution for opening and operation of account b) Certified copy of Bye-laws & Regulations/ Constitution. c) Copy of Government approval (if registered). d) In case of death, A/C should be stopped until the club nominates another person. e) Trust deed is needed-for trustee account. Account Opening Procedure Account opening procedure and also the account operating process of these accounts are similar to Current account and savings account. In addition, it should provide bylaws& Regulations/Constitution and Articles of Association. By providing all required documents it can open a savings account. V) Minorâ€™s Account a) Putting the word "MINOR" after the title of the account. b) Recording special instruction of operation of the account. c) The account opening form is to be filled in and signed by either of the parents or the legal guardian appointed by the Court of Law & not by the Minor. Account Opening Procedure Account opening procedure of minor account is similar to the procedure of savings account. Minors are not allowed to open current accounts. Account can be opened in the name of minor himself (under a guardian)/jointly in the name of the minor and guardian.
VI) 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. VII) Joint Accounts Of Two Or More Persons Mandate for Operation of Accounts A clear authority signed by all the joint A/C holders containing instructions as to who will operate the account and how the account is to be operated should be obtained. The mandate should mention the name of the persons authorized to draw check. In case of death /insanity/insolvency of one or more of the joint a/c holders, the authority will cease to operate. Executor: Probate: From a court of law along with a certified copy of the will duly attested by a notary public. A mandate in case if there is more than one Executor, signed by all the executors, as to how the a/c will be operated. Administrator: Letter of Administration from a court of Law along with a certified copy duly attested by a Notary Public appointing him as an Administrator of the Estate of the deceased. The operation of the a/c is to be allowed as per instructions of the letter of administration. 3.2 Accepting Deposits: Accepting deposits is one of the classic functions of commercial banks. The relationship between a banker and his customer begins with the opening of an account by the former in the name of the latter. Initially all the accounts are opened with a deposit of money by the customer and hence these accounts are called deposits accounts. Banker solicits deposits from the public There are two classes of deposits, which are acceptable to Agrani Bank LTD. They are: I. Demand deposits II. Time deposits I) Demand Deposits The amount in accounts are payable on demand so it is called demand deposit account. ABL accepts demand deposits through the opening ofâ€” a) Current account b) Savings account c) Foreign currency account a) Current Account Both individuals and business open this type of account. Frequent transactions are (deposits as well as withdrawal) allowed in this type of account. A current a/c holder can draw cheques on his account, any amount, and any numbers of times in a day as the balance in his account permits.
Criteria of current account followed by ABL: i. Generally opened by businessmen, government and semi-government organizations; with proper introduction ii. No interest is provided for deposited amount; iii. Overdraft is Allowed in this account; iv. Minimum opening balance is TK.1000; v. A minimum balance of Tk. 1000/- has to be maintained. Bank has the right to change this minimum balance requirement. There are several types of current account available at the ABL: i. Individual Current Account. ii. Partnership Current Account iii. Proprietorship Current Account iv. Limited Company Current Account v. Account of Societies/Clubs etc. b) Savings Account Individuals for savings purposes open this type of account. Interest on SB account is calculated and accrued monthly and credited to the account half yearly. Interest calculation is made for each month based on the lowest balance at credit of an account in that month. Criteria of savings account followed by SB: i. An appropriate introduction is required for opening the A/C; ii. Frequent withdrawal is not encouraged; iii. 7 days notice is required for withdrawal of large amount; iv. Minimum amount of TK.100 is required as initial deposit and to earn interest; v. Depositor may withdraw his/her deposited money up to 25% of the Balance in his/her account without notice. The bank may realize service charge in its discretion; vi. Depositor will get interest on the amount deposited in his/her account irrespective of any limit; There are two type of saving accounti. Individual Saving Account ii. Joint Saving Account To open a saving account the followings are required: 1. Passport size photo-2 copies 2. Introducerâ€™s signature in the a/c opening card 3. Nationality certificate/Photocopy of valid passport 4. Nominee form duly filled in(with photo) 5. Transaction profile duly filled in c) Foreign Currency Account Another type of account is foreign currency account, where the individuals who live in abroad or works there can open an account in the Bank and send money from abroad on that account. To open a current account for club, society etc the followings are required a) Passport size photo-2 copies for each member b) Introducerâ€™s signature in the a/c opening card c) Nationality certificate/Photocopy of valid passport/Voter ID card
d) Nominee form duly filled in e) Transaction profile duly filled in f) Photocopy of Work Permit g) Employment Certificate duly mentioning salary II) Time Deposits A deposit which is payable at a fixed date or after a period of notice is a time deposit. ABL accepts time deposits through— a) Fixed Deposit Receipt (FDR) b) Short Term Deposit (STD) c) Schemes Deposit While accepting these deposits, a contract is done between the bank and the customer. When the banker opens an account in the name of a customer, there arise contract between the two. This contract will be a valid only when both the parties are competent to enter in contracts. As account opening initiates the fundamental relationship & since the banker has to deal with different kinds of persons with different legal status, ABL Officials remain very much careful about the competency of the customers. a) Fixed Deposit Account These are deposits, which are made with the bank for a fixed period specified in advance. The bank needs not to maintain cash reserve against these deposits and therefore, bank gives high rate of interest on such deposits. A FDR is issued to the depositor acknowledging receipt of the sum of money mentioned therein. It also contains the rate of interest and the date on which the deposit will fall due for payment. ABL offers FDR for different amounts at different interest rates for different period of time. In the receipt holders’ name and other particulars are kept as secrete documents on the bank. In the documents the name of nominee is also incorporated. If any holder of the receipt wishes to en-cash receipt before the maturity the bank usually do not pay the interest. But Agrani Bank, as goodwill pays a lump-sum amount of interest to the FDR holder. Procedure of Opening Fixed Deposit Account: Before opening a Fixed Deposit Account a customer has to fill up an application form, which contains the followings: i. Amount in figures ii. Beneficiary’s name and address iii. Period iv. Rate of interest v. Date of issue vi. Date of maturity vii. How the account will be operated (singly or jointly) viii. Signature(s) ix. F.D.R. no. x. Special instructions (if any) After fulfilling the above information and depositing the amount, FDR account is opened and a FDR receipt is issued and it is recorded in the FDR Register, which contains the following information: i. FDR account no. ii. FDR (Fixed Deposit Receipt) no. iii. Name of the FDR holder with address
iv. v. vi.
Maturity period Maturity date Interest rate
Payment of Interest of Fixed Deposit In case of Fixed Deposit Account the bank does not have to maintain a cash reserve. So Agrani Bank limited offers a high interest rate in Fixed Deposit accounts. It is usually paid on maturity of the fixed deposit. ABL calculates interest at each maturity date and provision is made on that â€œMiscellaneous creditor expenditure payable accountsâ€? is debited for the accrued interest. Loss of FDR In case of a lost FDR, the customer is asked to record a GD (General Diary) in the nearest Police Station. After that, the customer has to furnish an Indemnity Bond to ABL. A duplicate FDR is then issued to the customer by the bank. Renewal of FDR The FDR becomes automatically renewed for like periods and amounts, unless this are withdrawn by the depositor or, the bank notifies the depositor in writing at least 15 days in advance of the original Or, any renewed maturity date (s) of its desire to terminate the account or change any term and condition of the account. b) STD Account In ABL, Limited companies, corporate groups, various other big companies, organizations, Government Departments keep money in STD accounts. Frequent withdrawal is discouraged and requires 7 days prior notice. STD Account opening procedure is similar to that of the saving account. Initial Account opening minimum amount requirement Tk. 100. In Short Term Deposit account, the deposit should be kept for at least seven days to get interest. The interest offered for STD is less than that of savings deposit. 5% interest is paid on their deposit. The bank is benefited cause they have to pay less interest and the customers are also benefited because anytime they can divert money .In ABL, usually customers give an instruction to the Bank that their current account will be debited whenever its deposited amount crosses a certain limit and this amount will be transferred to the STD account. c) Special Schemes i) APS (ABL Pension Scheme) A depositor can deposit Tk. 100/200/300/400/500 monthly as per arrangement. This scheme is for at least 5 years at 7% interest rate and the interest is a compounded one. Customers have to pay the installment amount between1 to 10 of each month. If the customers fail to do so then bank will count the installment as classified installment. After 5 years the customer can withdraw the amount (principal+interest) or he/she can withdraw it in installments. ii) ABS (ABL Special Schemes) A customer can deposit Tk. 1000/2000/3000/4000/5000/6000/7000/8000/9000/10000 to his account as per arrangement with the bank. This sort of accounts can be opened for 5 years/10 years. Installment should be deposited within 15th of the month. Compounded interest rate will be counted for the scheme and the interest rates are 7% for 5 years and 8% for 10 years.
Serial No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13.
Type of account Current accounts Savings accounts STD FDR(3 months-<6 month) FDR(1year-more) FDR(6 month-<1 year) DPS APS(5 years) APS(10 years) ABS(5 years) ABS(10 years) FDR(1 year-more) FDR(1year-more)
Interest rate 0% 4% 3.5% 7.25% 7.5% 8% 15% 7% 9% 8% 9% 8.25% 8.5%
Table: 3.1 Interest Rates of different types of Accounts 3.3 Issueing Chequebook to the Customers: STEP 1: Requisition slip filled properly along with the chequebook number. STEP 2: Banker Verifies the Slip. STEP 3: Banker issues new chequebooks if everything in the right form. STEP 4: Enter the new chequebook number in the register book against specific customer’ name. 3.3.1 Issue of Fresh Chequebook: Fresh checkbook is issued to the account holder only against requisition on the prescribed requisition slip attached with the checkbook issued earlier, after proper verification of the signature of the account holder personally or to his duly authorized representative against proper acknowledgment. Procedure of Issuance of a Fresh Chequebook: i. A customer who opened a new A/C initially deposits minimum required money in the account. ii. The account opening form is sent for issuance of a chequebook. iii. Respected Officer first draws a cheque book . iv. The officer who has the signing authority signs in the leaf where the next requisition slip exists in the chequebook. v. The name of the customer is also written down the face on the Requisition slip. vi. The word “Issued on” along with the date of issuance is written down on the requisition slip. vii. Next, the customer is asked to sign in the Chequebook issue register. viii. Then the respected Officer signs on the face of the requisition slip put his initial in the register and hand over the cheque to the customer. 3.3.2 Issue of Duplicate Cheque Book: Duplicate chequebook instead of lost one should be issued only when an A/C holder personally approaches the Bank with an application Letter of Indemnity in the prescribed Performa agreeing to indemnify the Bank for the lost cheque book. Fresh cheque Book in lieu of lost one should be issued after verification of the signature of the Account holder from the
Specimen signature card and on realization of required Excise duty only with prior approval of manager of the branch. Cheque series number of the new checkbook should be recorded in ledger card and signature card as usual. Series number of lost cheque book should be recorded in the stop payment register and caution should be exercised to guard against fraudulent payment. 3.3.3 Issue of New Chequebook (for Old Account): All the procedure for issuing a new Chequebook for old account is same as the procedure of new account. Only difference is those customers have to submit the requisition slip of the old Chequebook with date, signature and his/her address. Computer posting is then given to the requisition slip to know the position of account and to know how many leaf/leaves still not used. The number of new Chequebook is entered on the back of the old requisition slip and is signed by the officer. 3.3.4 Procedure of Issuance of a New Cheque Book: If the cheque is handed over to any other person then the account holder the bank addressing the account holder with details of the Chequebook issues an acknowledgement slip. This acknowledgement slip must be signed by the account holder and returned to the bank. Otherwise the bank will not honor any cheque from this chequebook. At the end of the day all the requisition slips and application forms are sent to the computer section to give entry to these new cheques. 3.4 Transfer of an Account: i. The customer submits an application mentioning the name of the branch to which he wants the account to be transferred. ii. His signature cards, advice of new account and all relevant documents are sent to that branch through registered post. iii. The balance standing at credit in customerâ€™s account is sent to the other branch through Inter Branch Credit Advice (IBCA). iv. No exchange should be charged on such transfer. v. Attention is also given in this connection. 3.5 Closing of an Account: Upon the request of a customer, an account can be closed. After receiving an application from the customer to close an Account, some procedures are followed by a banker. The customer should be asked to draw the final cheque for the amount standing to the credit of his A/C less the amount of closing and other incidental charges and surrender the unused chequeleaves. The A/C should be debited for the account closing charges etc. and an authorized officer of the Bank should destroy unused cheque leaves. In case of joint A/C, the application for closing the A/C should be signed by all the joint holders. A banker can also close the account of his customer or stop the operation of the account under following considerable circumstances: i. Death of customer ii. Customerâ€™s insanity and insolvency iii. Order of the court iv. Specific charge for fraud forgery
3.5.1 Stop Payment of Cheque: A banker can stop payment of cheque of his customer under following considerable circumstances: i. Firstly the account holder will apply to stop the payment of his cheque ii. There is a register for this purpose. The authorized officer keeps it. iii. The officer will see the condition of account and verify everything. iv. In the ledger book, the officer will mark with red ink and the cheque will not be paid. 3.5.2 Dishonor of Cheque: If the cheque is dishonored, there is no practice in ABL to send memorandum (cheque return memo) to the customers. But if the customer wants to know the reason of the dishonor of the cheque than the bank send memorandum stating the reason in the following way: i. Refer to drawer. ii. Not arranged for. iii. Effects not cleared May be present again. iv. Exceed arrangements. v. Full cover not received. vi. Payment stopped by drawer. vii. Payee’s endorsement irregular/illegible/required. viii. Payee’s endorsement irregular, require Bank’s confirmation. ix. Drawer’s signature differs/ required. x. Alterations in date/figures/words require drawer’s full signature. xi. Cheque is post dated/out of date/mutilated. xii. Amount in words and figures differs. xiii. Crossed cheque must be present through a bank. xiv. Clearing stamps required/requires cancellation. xv. Addition to the discharge of Bank should be authenticating. xvi. Cheque crossed “Account Payee Only” xvii. Collecting Bank’s discharge irregular/required. But if the cheque is dishonored due to insufficiency of funds, ABL inform the A/C holder immediately. 3.6 Cash Section: The cash section of Southeast Bank Ltd deals with all types of negotiable instruments, cash and other instruments and treated as a sensitive section of the bank. It includes the vault, which is used as the store of cash, instruments. If the cash stock goes beyond this limit, the excess cash is then transferred to Bangladesh Bank. Keys to the room are kept under control of cash officer and branch in charge. The amount of opening cash balance is entered into a register. After whole days’ transaction, the surplus money remains in the cash counter is put back in the vault and known as the closing balance. Money is received and paid in this section. 3.6.1 Cash Payment: i. First, the client comes to the counter with the cheque and gives it to the officer in charge there. The officer checks whether there are two signatures on the back of the cheque and checks his balance in the computer. After that the officer will give it to the cash in charge. ii. Then the cash in charge verifies the signature from the signature card and permits the officer in computer to debit the client’s account by giving posting. A posted seal with teller number is given.
iii. Then the cheque is given to the teller person and he after checking everything asks the drawer to give another signature on the back of the cheque. iv. If the signature matches with the one given previously then the teller will make payment keeping the paying cheque with him while writing the denomination on the back of the cheque. v. If the instrument is free of all kind of error the respected officer will ask the bearer to sign on the back of it. vi. He will then put his/her initial beside the bearersâ€™ signature. She/he will also sign it on its face, will write down the amount by red pen and will put on a scroll number from his/her scroll register. vii. Then the cheque will be sent to the cash counter. At the cash counter bearer will be asked again to sign on the back of the instrument. viii. The cash officer will then enter the scroll number in his/her register and will pay the money to the bearer. ix. At the end of the day these scroll numbers of the registers will be compared to ensure the correctness of the entries.
3.6.2 Cash Receipt: i. At first the depositor fills up the Deposit in Slip. There are two types of deposit in slip in this branch. One for saving account and another for current account. ii. After filling the required deposit in slip, depositor deposits the money. iii. Officers at the cash counter receives the money, count it, enter the amount of money in the scroll register kept at the counter, seal the deposit in slip and sign on it with date. iv. Then this slip is passed to another officer who enters the scroll number given by the cash counter in his/her register along with the amount of the money, sign the slip and keep the banksâ€™ part of the slip. Other part is given to the depositor. v. All deposits of saving account are maintained by one officer and other accounts by another officer. vi. At the end of the day entries of both of these registers are cross checked with the register kept at the cash counter to see whether the transactions are correct or not. 3.7 Remittance: Bank is a service-oriented industry and deals with public money. They provide services to their clients through different ways. â€œTransfer of money/fund of one person /customer to another person/ firm/ organization through the bank is called remittance. Any Person can remit funds to anyone within the country through any of the branches of the some bank by the following means with nominal charges: I. Pay order II. Demand Draft III. Telegraphic Transfers IV. Money Transfer I) Pay Order This is an instrument issued by the branch of a bank for enabling the Customer/ purchaser to pay certain amount of money to the order of a certain person/ firm/ organization/ office within the same clearinghouse area of the pay order-issuing branch.
The payment order is used for making a remittance to the local creditor. As prevalent, the payment orders are in the form of receipts, which are required to be discharged by the beneficiaries, where applicable on revenue stamps of appropriate value, against payment in cash or through an account. The payment order is not a negotiable instrument and cannot be endorsed or crossed like a banker's draft. Procedure for issuing P.O.: i. Obtain P.O. application form duly filled in and signed by the purchaser/applicant. ii. Receive the amount in cash/transfer with commission amount. iii. Issue P.O. iv. Enter in P.O. Register Payment of Pay order: 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 payeesâ€™ account. To transfer the amount the payee must duly stamp the PO. i. Examine genuinely of the Pay Order ii. Enter in P.O. Register, give contra entry. iii. Debit if found ok for payment. II) Demand Draft The demand draft is a written order by one branch of a bank upon another branch of the same bank to pay a certain sum of money to or to the order of a specified person. This is an order instrument in which the issuing branch gives instruction to the payee/drawee branch to pay certain amount of money to the order of certain person /firm/organization i. A draft is always an order and never a 'bearer' instrument. ii. It is a negotiable instrument like a cheque i.e. it can be endorsed, collected, and delivered to the endorsee. iii. D. D. may be issued to any person and it can also be issued in favor of a firm, company or local authority on written request duly signed by the purchaser. Issue of a Demand Draft i. The purchaser is asked to complete the press-ribbed form, which is treated as an application as well as credit voucher. ii. If against cash- the application is given to the customer to deposit the cash with the cashier. iii. Voucher (Application form) passed duly signed & sealed is delivered to remittance department for preparation of DD. The application for remittance is to be signed by the drawer of cheque. Payment of Demand Draft After Receipt of IBCA: The IBCA received from issuing branch is responded by the drawee branch and then this becomes voucher. Dr. General A/ C- Drawer Br. Cr. Bills Payable A/c-D.D. Payable. Particulars of DD are entered in D.D. Payable Register under initial of an officer. III) Telegraphic Transfer (T.T.) It is an instruction duly tested sent by telex/fax/telegram/ telephone/ express mail etc. to the drawee branch for paying a certain sum of money to a specified person. This mode of transfer
of fund may be affected at the written request an account holder of the branch and against value received from him. It is preferable to obtain a confirmatory cheque from the customer. Characteristics: a. Issued by one branch to another branch and massage is tele-communicated b. Remittance / transfer of money is done through tested tele messages. c. Remittance is affected on the basis of tested message. d. Test key apparatus is required. Issue of T. T: Obtain T.T. application form duty failed in and signed by the purchaser/applicant with full account particulars of the beneficiary. Receive the amount in cash/transfer with prescribed commission, postage, and telephone/telex charge. Prepare T.T. message inserting test number (code number). Enter in T.T. issue register. Issue advice to the payee branch. Dr.: Cash or Cheque Cr.: Gen. A/C Paying Branch Cr.: Income A/C - Commission on T. T. Cr.: Telegram charges. (Cost Memo given to the purchaser) T. T. message prepared in duplicate, checked and signed by the in charge and Manager, tested and transmitted. IBCA prepared in duplicate. The original sent to paying branch as confirmation of message. T. T. Receiving and payment: Go through text of the T. T. carefully and 'Decode' the text and tally the test. - If the test agrees - Pass the Following Vouchers: a. T.T. Advise and Credit Dr. Gen. A/c - Issuing Br. (Responding) Cr. Bills Payable - T.T. Payable Dr. Bills Payable - T.T. Payable Cr. Party A/C. b. T.T. Advice & PAY Dr. Gen. A/C Issuing Branch (Respond) Cr. Bills payable A/C - T.T. payable (T.T. PO is issued and delivered to the Payee) Dr. Bills Payable A/C - T.T. Payable (T.T. PO) Cr. B/P Cash /Clearing (Duly signed by the payee on revenue stamp and identification) IV) Money Transfer (M.T) In the prescribed format the purchaser / the drawer branch instruct the drawer branch to pay a specified sum of money to the payee named in the IBCA preferably by crediting his account. Issuance Procedure of M.T: i. Application in writing in prescribed form ii. Deposit of money including commission iii. Issue of cost memo iv. Entry in M.T. issue register serially v. M.T. advice in IBCA (in block letters) with Test. Vouchers: Dr. Cash / Party A/C Cr. General A/C (Drawee Br)
Cr. income A/C Commission Cr. Postage Charge. 3.8 Other Services: I) ATM Automated teller machine (ATM) is one of the modern financial services provided by bank. This is providing customer collection of money any time he desires. Now a day life is to fast. To consider this, bank creates this service where any customer needs not to follow the banking hour to collect money from his deposit. The Bank is a member of the shared ATM Network provided by Electronic Transaction Network Ltd. (ETN). At present number of ATMs are available throughout Dhaka city. Bankers inspire customers to withdraw money amounted less than tk. 20,000 by ATM card. Procedure: i. It’s mandatory to apply for an ATM card at the time of account opening. ii. An ATM form supplied to the customer specifying the account Name of the account, Account number, address, and telephone No etc. iii. Customer need to fill up an ATM card application form. iv. Jointly an ATM account can be opened. v. Then he is supplied a deposit slip to deposit the cash. vi. Then he gets an ATM. Terms and Conditions: i. At the applicant’s request the Bank may issue the cardholder a card and PIN if the applicant is a depositor of the Bank and remains an account at any bank. ii. The cardholder will pay such charges and fees for the provision of the card and /or PIN as the Bank may prescribe from time to time. iii. All transactions including utility bill payment initiated by the use or purported use of the card shall be debited from the cardholder. iv. A cardholder can withdraw from his account Tk 20,000 per day. But by inserting a card at a time no cardholder can withdraw more than Tk 2000. II) Locker Services Agrani Bank Ltd, Principle Branch is providing facility of locker service for the purpose of safe guarding the valuable property of customers. The person or organization that has any account in bank branch can enjoy this service. They keep their valuable assets in banker’s custody. Customers have right to look after with a key of their individual lockers provided by bank. Terms and Conditions: i. The safe vault will open during the banking hour unless otherwise changed by the bank. ii. All fees and other charges in respect of the lockers will be payable in advance.
iii. The banker will not incur any liability or responsibility for any loss or destruction or damage of any article, document, securities, or valuable in or otherwise the contents of the locker/vault. iv. Either party can terminate this agreement on giving to the other seven days notice in writing expiring prior to the date. v. If the hirer loses the key of the locker, the bank should be notified without delay. III) Online Banking Operation Bank has Real-time On-line Any branch Banking for the clients to facilitate them to deposit / draw or remit funds from their accounts, from one bank to another. Bank authority is providing training to its employees, which will lead to smooth and efficient functioning of the system. Some branches including the principle branch and the head office come under the umbrella of on-line any branch-banking network, which have been started online from this year. Facilities of Online Banking System Customers of one Branch of ABL are able to make transaction like cash withdrawals and deposits, electronic fund transfer, balance inquiry, account statements etc. from any of the ABL Online Branches Under the Umbrella of Online Banking. LOANS AND ADVANCES DEPARTMENT 4.0 Credit Facility: One of the primary functions of commercial banks is sanctioning of credit to the potential borrowers. Bank credit is an important catalyst for bringing about economic development in a country. Without adequate finance, there can be no growth or maintenance of a stable economy. Bank lending is important for the economy, because it makes possible the financing of agriculture, commercial and industrial activities of a nation. At the same time, a bank will, therefore, distribute its funds among various sectors in a manner as to derive sufficient incomes. Loans & advances comprise the most important asset as well as the primary source of earning for the banking/financial institutions. However lending money is exposed to risk and uncertainties. So a prudent banker should always try to make an appropriate balance between the risk and return involved in the loan portfolio management. The lending banker has to take into account various consideration which relates to bank itself, the borrower, the proposal, the socio economic factors etc. An unregulated financial institution might be burdened with innumerable and unmanageable risk while lending money to the people for maximizing potential gains. So the bank should be prudent, farsighted and efficient while deploying its funds. Agrani Bank Limited, being one of the largest private commercial bank of the country, provides funds to agriculture, industry and commerce sector for strengthening the economic base of the country. Hence, it is very clear that, Agrani Bank Ltd. plays an important role to move the economic wheel of the country. 4.1 What is Loan? When an advance is made in a lump sum repayable either in fixed monthly installments or in lump sum and no subsequent debit is ordinarily allowed except by way of interest and
incidental charges. Etc, it is called a Loan. Loan is allowed for a single purpose where the entire amount may be required at a time or in a number of installments within a period of short span. After disbursement of the entire loan amount, there will be repayment by the borrower in installment. A loan once repaid in full or in part cannot be drawn by the borrower. Entire amount of loan is debited to the loan account in the name of the customer and is paid to him/her through his/her SB/CD/Loan account. Sometimes loan amounts are disbursed in cash. 4.2 Purposes of Loan: For purchasing bus, trucks, launches, for construction of building and for capital financing of industrial projects, export finance, import finance, import finance etc. Now days, commercial banks, especially the nationalized commercial bank, in our country, are to make loans under different schemes viz. Agricultural Loans, and loans under self-employment scheme etc. Depending upon the purpose, loans may be repayable within a few months or the repayment period may extend upon a few years. Agricultural loans are generally repayable within a period of 3(three) months to 1(one) year. But repayment of transport loans & house building loans may take longer period comprising a number of years. 4.3 Lending Principles followed by Agrani Bank Ltd.: The Principle of lending is a collection of certain accepted time tested standards, which ensure the proper use of loan fund in a profitable way and its timely recovery. Different authors describe different principles for sound lending. ABL follows the following five principles in its lending activity: i. Safety ii. Security iii. Liquidity iv. Adequate yield v. Diversity vi. Productive purpose vii. National interest i) Safety Safety should get the prior importance in the time of sanctioning the loan. At the time of maturity the borrower may not will or May unable to pay the loan amount. Therefore, in the time of sanctioning the loan adequate securities should be taken from the borrowers to recover the loan. Banker should not sacrifice safety for profitability. Agrani Bank Ltd. exercises the lending function only when it is safe and that the risk factor is adequately mitigated and covered. Safety depends upon: The security offered by the borrower; and the repaying capacity and willingness of the debtor to repay the loan with interest. ii) Liquidity Banker should consider the liquidity of the loan in time of sanctioning it. Liquidity is necessary to meet the consumer need. iii) Security Banker should be careful in the selection of security to maintain the safety of the loan. Banker should properly evaluate the proper value of the security. If the estimated value is less than or equal to loan amount, the loan should be given against such securities. The more the
cash near item the good the security. In the time of valuing the security, the Banker should be more conservative. iv) Adequate Yield As a commercial origination, Banker should consider the profitability. So banker should consider the interest rate when go for lending. Always Banker should fix such an interest rate for its lending which should be higher than its savings deposits interest rate. To ensure this profitability Banker should consider the prospect of the project. v) Diversity Banker should minimize the portfolio risk by putting its fund in the different fields. If Bank put its entire loan able fund in one sector it will increase the risk. Banker should distribute its loan able fund in different sectors. So if it faces any problem in any sector it can be covered by the profit of another sector. vi) A Productive Purpose Agrani Bank exercises its lending function only on productive purpose. vii) National or social interest Agrani Bank also considers national aspect of any project while financing. They take utmost care so that the project cannot be detrimental to the society as well as to the nation. 4.4 Different Types of Loans and Advances: The different types of loans and advances that AGRANI Bank offers are as follows: I. CC (Cash Credit) II. Term Loan III. General house building IV. Consumer credit V. OD (Over draft) VI. Staff Loan VII. Project loan I) CC (Cash Credit) Cash Credit is allowed to the businessmen, traders and industrialists etc. for meeting their working capital requirements. Cash Credit is always allowed against hypothecation or pledge of goods. Hence, Cash Credits are of two types: a) Cash Credit (Hypothecation) b) Cash Credit (Pledge). a) Cash Credit (Hypothecation) Cash Credit allowed against hypothecation of goods is known as Cash Credit (Hypo) limit. In cash of hypothecation, the borrower retains the ownership & possession of goods on which charge of the lending bank is created. Hypothecation is a legal transaction whereby goods are made available to the lending banker as security for a debt without transferring either the property in the goods or either possession. The banker has only equitable charge on stocks, which practically means nothing. Since the goods always remain in the physical possession of the borrower, there is much risk to the bank. So, it is granted to parties of undoubted means with the highest integrity.
The documents which cerate charges of the lending Bank on the hypothecated goods is called letter of hypothecation. By signing this letter hypothecation, the borrower binds himself to give possession of the hypothecated goods to the lending Bank when called upon to do so. As the hypothecated goods remain under the possession of the borrower, such advance is more or less clean. As such, the banker should take the following precaution: The Banker should carefully verify the stocks of hypothecated goods and their market price. Periodical statement of stock duly signed by the borrower should be obtained. Stocks should be duly insured against fire, burglary. Banker should try to obtain sufficient collateral security. The borrower should be trustworthy & prudent customer. The goods are readily saleable and have good demand in the market. The price of the goods, offered as security, is to be calculated as per following principle. Purchase price or market price whichever is lower. The prices of the goods are steady etc. b) Cash Credit (Pledge) Cash Credit allowed against pledge of goods known as Cash Credit (Pledge) limit. In cash of Cash Credit (Pledge) limit, the borrower pledges his goods to the Banker as Security against the credit facility; Pledge has been defined as “a bailment of goods as security for payment of a debt or performance of a promise”. The ownership of the pledged goods remains with the pledge. Banks retain the effective control of the pledged goods. Pledged goods may be stored in a go down of the borrower but under lock and key of the bank. Bank’s guards are posted round the clock to protect the Godown. Sometimes, pledge goods are stored in Bank’s Godown. Bank makes delivery of the pledged goods to the party against payment. Following points should be taken into consideration when allowing Cash Credit (Pledge) limit: i. The quantity of the goods is ascertained. ii. The goods are readily saleable and have a constant & effective demand in the market. iii. The quality of the goods is ensured. The goods are not perishable and will not deteriorate in quality as a result of long short duration storage. iv. Goods are stored in such a Godown where they will not be deteriorated. v. Guard them against risks of pilferage. vi. The borrower has as absolute title to the goods. vii. The prices of goods should be steady and are not subject to violent changes. viii. The valuation of the goods should be made very carefully. Ex: mill price/purchase price/market price/whole sale price “whichever is lower” is the general principal for assessing the valuation of the goods. ix. The goods should be stored in the presence of a responsible bank official. x. The goods are insured against all risks, such as fire, theft etc. and the insurance policy bears “Bank Mortgage Clause”. xi. The stock report is obtained duly signed by the borrower. xii. Stocks must be inspected regularly by the Branch-in-charge. xiii. Stock cards are indicating the quantity of stocks, their value and rate is placed in the go down.
The locks of the go down are sealed and keys are deposited in the branch
II) Term Loan These are the loans sanctioned for repayment in period more than one year. This type of loan is again sub-divided as follows in consideration of sector of finance: a) Term loan- industrial These are the term loans awarded to the large industrial concerns. This facility is usually provided to set up a new industrial project or to modernize and restructure an existing one. Since the time frame of this type of lending do not correspond to the duration of bank's prime source of funding, generally bank predetermines the optimum extent of global exposure in this sector. As such, consideration of bank's existing policies and positions in this sector are of great importance in considering a credit request in this sector. b) Term loan- Cottage industries These are the term loans made to other than industrial concerns, specially the small and cottage industries. It this case also, a thorough analysis is required. III) House Building Loan These loans are alternative of term loan and are the loans made to finance those who require house-building loans for both commercial and non-commercial purposes. Being a variant of term loan, in this cash too, banks usually have predetermined optimum exposure level, which shall always be kept in mind in considering financing under this category. Besides borrower's standing is thoroughly checked and only fairly cleared clients are entertained. House building finance for commercial purposes shall ideally be liquidated, within the time frame of repayment, through the income to be generated from the project. However, client's resourcefulness is of paramount importance, the sector being highly sensitive to economic shocks. Entire location, nature of the property whether freehold or lease hold (if lease hold, conditions of lease as well as confirmation of up to date payment of installment etc. shall be considered), estimated cost vis-Ă -vis borrower's stake, suitability of building's proposed use, duly passed plan/clearance from the competent authority etc. Like industrial term loan, the repayment schedule and moratorium carry a great weight in this type of finance. These types of loans are again sub-divided into two categories in respect of the borrower's identity. IV) Consumer Credit This type of facility is extended to finance purchase of consumer durables, usually at a certain margin. In this sector also bank usually have a set level of warranted global exposure. This scheme is aimed to attract consumers from the middle & upper middle class population with limited income. The borrower should have an account (SB or CD) with the bank. Minimum 25% of the purchase cost of the product is to be deposited by the borrower with the bank as equity before the disbursement of the loan. The rest 75% is to be kept as cash collateral (FDR, Sancheypatra etc.) with the bank. The purchased items are hypothecated with the bank. The disbursement of the loan is effected by debiting time loan / term loan account to be opened in the name of the borrower. Loan amount is disbursed through A/C payee pay order / Demand Draft directly to the seller after submission of the indent, deposit of client equity & completion of documentation formalities. The bank obtains post dated A/C payee checks drawn in favor of the bank for the monthly installments covering the lending period from the borrower & the loan amount is adjusted on the due date of installments.
Officials of government, semi- government, autonomous, semi-autonomous, reputed multinational corporations, locally reputed private organizations, banks and other financial institutions etc. are eligible to avail the facilities under the scheme. However in extending credit, the approving authority should exercise the discretion very creatively so as to assure proper monitoring and repayment. The standing of the organization the official belongs to, be of great importance in extending credit under the scheme. V) OD (Over draft) The overdrafts are generally allowed on a Current account operated upon by cheques. The customer may be allowed a certain limit up to which he can overdraw within a stipulated period of time. In an overdraft account withdrawals & deposits can be made any number of times within the limit and prescribed period. Interest is calculated and charged only on the actual debit balances on daily product basis or may be decided by the competent authority. There are three types of Over Drafts available: a) Temporary Over Draft (TOD) b) Clean Over Draft (COD) c) Secured Over Draft (SOD) a) Temporary Over Draft (TOD) TOD is allowed to honor an important cheque of a valued client without any prior arrangement. As this facility is allowed for a very short period, it is called Temporary Overdraft. Agrani Bank does not practice TOD. b) Clean Over Draft (COD) Sometimes Overdrafts are allowed with no other security except the personal guarantee of the borrowers. These types of overdrafts are called Clean Over Draft. AGRANI Bank also does not practice COD. c) Secured Over Draft (SOD) It is a continuous advance facility. When Overdrafts are allowed against securities they are called Secured Overdrafts. Overdrafts are generally granted to contractors & supplies for carrying on construction works and supply orders and to businessmen for expansion of their business. SOD is generally allowed against securities of fixed & term deposits shares/debentures, PSP, Insurance Policy, real estates, etc: depending on the nature & purpose of advance. By this agreement, the banker allows his customer to overdraft his current account up to his credit limits sanctioned by the bank. The interest is charged on the amount, which he withdraws, not on the sanctioned amount. VI) Staff Loan The employees of the bank get a special credit facility along with the house-building loan and it is the car loan. They can borrow money from the Bank in a low interest rate and buy automobiles. VII) Project Loan Most of the creditors of our country prefer state owned banks for large borrowings. This type of loan is usually provided for large project establishment. Including establishment cost, machinery purchase, working capital, utility connection and other related purposes. Project loans are usually provided against collaterals. It can also be secured through corporate guarantee or syndication.
Serial No. Category 1. Project Loan 2. General House building 3. Staff House Building 4. CC (Hypothecation) 5. CC (Pledge) 6. Consumer Loan 7. CC(hypo-export oriented tannery) Table: 4.1 Interest Rates of different types of Loans
Interest Rate (%) 13 13 5 13 13 14 7+1
4.5 Selection Process of Borrower: Selection of borrower is vitally important step for sanction loan. Due to lack of information and moral hazard, banks have to suffer a lot for the classified loans and advances. If the selection of borrower is correct, that is, the borrower is of good character, capital and capacity or of reliability, resourceful and responsible the bank can easily get the return from the lending. Consequently, monitoring is making much easier for the banker. From this point of view, Agrani Bank Ltd. follows the following procedures: I) Studying Past Track Record After getting an application for a loan, an ABL Official studies the past track record of the applicant. Generally the study includes: a) Account balances and the past transactions; b) Credit report from other banks; c) Information of the Industry by studying market feasibility; d) Financial statements (balance sheet, cash flow statement, and income statement). II) Report from Bangladesh Bank Report from Credit Information Bureau (CIB) of Bangladesh Bank is needed. III) Borrower Analysis Borrower analysis is done from the angle of 4-C (character, capital, capacity, and collateral), 3-R (reliability, resourcefulness, responsibility) and purpose. It follows that the bank forms a rational judgment about the integrity of the borrower, which should be undoubted. The human skill, conceptual skill, operational skill is qualitatively analyzed. IV) Business Analysis Business analysis is done from two angles-terms, conditions, and collateral securities. 4.6 Procedure for Giving Advances: The Loans and Advances Department of Agrani Bank Principal Branch usually follows the below-mentioned procedures and steps for sanctioning any kind of advances as available with the branch: STEP: 1 The prospective borrower has to apply to Agrani Bank for loan by filling up an Application form. Specimen of an Application form has been attached in the Appendix.
STEP: 2 After receiving the loan application forms, Principle Br. Sends a letter to Bangladesh Bank for obtaining a report from there. This report is called CIB (Credit Information Bureau) Report. The purpose of this report is to being informed that whether the borrower has taken loan from any other bank or not if 'yes', then whether these loans are classified or not. CIB report contains the following contents: i. Name of the Borrower ii. Fathers name iii. Permanent address iv. City v. Sector code vi. Nature of ownership STEP: 3 After receiving CIB report if the Bank thinks that the prospective borrower will be a good borrower, then the bank will scrutinize the documents. In this stage, the branch will look whether the documents are properly filled up and signed. STEP: 4 In this stage, the Bank will prepare a proposal. A proposal contains following relevant information: i. Name of the Borrower ii. Nature of Limit iii. Purpose of Limit iv. Extent of Limit v. Security vi. Margin vii. Rate of Interest viii. Repayment ix. Validity Branch Manager has to give attention to the following matters: The interest rate of the loan must not be less than 15.5% and the borrower must maintain 20% margin based on bankerâ€™s customerâ€™s relationship. Except this case, the branch has to send the proposal to the Head Office. Head Office will prepare a minute and submit it before the Executive Committee (EC). The minute has to be passed by EC. STEP: 5 After getting the approval of Bangladesh Bank, it will again come to the Head Office. After the sanction advice, Bank will collect necessary documents (Charge documents). These documents are: i. Joint Promissory Note ii. Single Promissory Note iii. Letter of Undertaking iv. Loan Disbursement Letter v. Debit Figure Confirmation Sheet vi. Letter of Continuity vii. Letter of Authority viii. Letter of Revival
ix. x. xi. xii. xiii. xiv. xv. xvi. xvii. xviii. xix. xx. xxi. xxii. xxiii. xxiv. xxv.
Right of Recall the Loan Letter of Guarantee Letter of Indemnity Trust Receipt Hypothecation of Goods Hypothecation of Vehicles Counter Guarantee Letter of Lien Letter of Lien in case of advance against FDR Letter of Lien And Authority for advances to third parties against Fixed Deposit/ Call Deposit/ Special Deposit or margin or margin deposits Letter of Authority to encash FDR Letter of Agreement for Packing Credit Letter of Guarantee for opening L/C Charges over Bonds or Certificates or Shares etc. by third person, firm or company to secure specific and general liability Memorandum of Deposit of Title Deeds Hypothecation of goods to secure a Demand Cash Credit or Overdraft/ Loan amount Guarantee by Third party.
STEP: 6 Documentation Documentation is a very important aspect of loans and advances. It may be described as the process or technique of obtaining the relevant documents/papers for securing advances. A banker must obtain proper documents to be executed by the borrower to protect the Bank’s interest. Moreover, when money is lent against security of some assets, the document must be got executed in order to give to the banker a legal and binding charge against those assets. The documents for loans and advances can be classified into the two categories namely charge documents and security documents. Charge Documents are a set of printed and prescribed forms, which are executed by the borrowers to protect Bank’s interest while bank is providing loan/advances. Different types of advances are allowed to the customers against different types of securities. 4.6.1 Loan Documentation: First obtain General Document. Then identify the Collateral, Facility and obtain Specific Documents listed hereunder. Leave out documents not called for by the terms of the Credit Approval and Facilities Advice Letter (Sanction Letter). General Documents i. Letter of Borrower requesting for new facilities/renewal ii. Authority of Borrow to Borrower (Letter of authority from partners in case of partnership concern and resolution in case of limited company) – with list of Partners/Directors iii. Form XII certified by RJSC regarding list of existing Directors for limited company iv. Facilities Advice Letter accepted unconditionally by Borrower v. Demand Promissory Note vi. Letter of Continuity vii. Deed of Partnership (for Partnerships: Borrower/ Third Party), By-Laws etc. viii. Memorandum and Articles of Association (for Limited Company Borrower/ Third Party) with Certificate of Association ix. Letter of Arrangement
x. xi. xii.
Letter of Disbursement Revival Letter (Form I & II) CIB Report
Lien of Account i. Resolution to lien account proceeds (for Third Party Partnerships and limited cos.) ii. Letter of Lien and Set Off (Pledge Agreement) Pledge of Deposit(S), Patra i. Resolution of Deposit (for Third Party Partnerships and Limited Company) ii. Fixed Deposit Receipts / Sanchaya Patra / Bonds endorsed by holder(s) iii. Letter of Guarantee by depositor (if the deposit stands in the name of Third Party) iv. Letter of Lien (Pledge Agreement) v. Letter of Authority for encashment of Sanchaya Patra / Fixed Deposits Pledge of Shares i. Resolution to deposit (for Third Party Partnerships and Limited Company) ii. Share Certificate iii. Bank transfer form for each share certificate (Form 117) iv. Memorandum of Deposit of Shares v. Letter of Guarantee by the shareholder (if the share stands in the name of person other than borrower) vi. Irrevocable Letter of Authority for collection of dividends, bonus etc. addressed by the shareholder to the relative companies Pledge of Inventory i. Letter of Pledge / Pledge Agreement ii. Letter of Disclaimer iii. RJSC Search Report (for Limited Company partnerships; Borrower / Third Party) iv. RJSC Form 18, and receipt of filing with RJSC v. Certificate of Registration from RJSC vi. Modification of Letter of Pledge / Pledge Agreement of Inventory vii. RJSC Form 19, and receipt of filing with RJSC viii. Insurance Policy with EBL as jointly insured Hypothecation of Inventory i. Resolution to hypothecation inventory (for Third Party partnerships and limited cos.) ii. Letter of Hypothecation of Inventory / Hypothecation Agreement iii. RJSC Search Report (for Limited Company partnerships; Borrower / Third Party) iv. RJSC Form 18, and receipt of filing with RJSC v. Certificate of Registration from RJSC vi. Modification of Letter of Hypothecation of Inventory vii. RJSC Form 19, and receipt of filing with RJSC viii. Insurance Policy with EBL as jointly insured Hypothecation of Receivables / Book Debts i. Resolution to hypothecation receivables / book debts (for Third Party partnerships and limited company) ii. Letter of Hypothecation of Receivables / Book Debts (Hypothecation Agreement)
iii. iv. v. vi. vii.
RJSC Search Report (for Limited Company / Registered Partnership; Borrower / Third Party) RJSC Form 18, and receipt of filing with RJSC Certificate of Registration from RJSC Modification of Letter of Hypothecation of Receivables RJSC Form 19, and receipt of filing with RJSC
Hypothecation of Machinery and Equipment i. Resolution to hypothecate inventory (for Third Party partnerships and limited cos.) ii. Letter of Hypothecation of Machinery and Equipment / Hypothecation Agreement iii. RJSC Search Report (for Limited Company / Partnerships; Borrower / Third Party) iv. RJSC Form 18, and receipt of filing with RJSC v. Certificate of Registration from RJSC vi. Modification of Letter of Hypothecation of Machinery and Equipment vii. RJSC Form 19, and receipt of filing with RJSC viii. Latest list of machinery & equipment ix. Insurance Policy with EBL as jointly insured Trust Receipts i. Trust Receipt Agreement Assignment of Receivables i. Resolution to assign receivables (for Third Party partnership and limited cos.) ii. Deed of Assignment Receivables iii. Notification and acknowledgement of assignment and confirmation of receivables from the debtor Mortgage i. Letter of Nomination of Third Party mortgagor from Borrower with attested specimen signature of mortgagor ii. Resolution to mortgage and guarantee (for Third Party partnerships and limited company) iii. Copy of Valid ID (for Third Party individual mortgagor) iv. Personal Guarantee from Third Party mortgagor v. Original title deeds of mortgagor and previous owners (Bia-Deeds) vi. C.S., S.A., and R.S. Parchas vii. Mutation Parchas in mortgagorâ€™s name, certified by Assistant Commissioner of Land viii. Duplicate Carbon Receipts for Mutation case ix. Letter of no objection of lessor for mortgagor to mortgage (for leasehold property) x. Land development tax receipts of the immediately preceding Bangali year xi. Municipal holding tax receipts for property in municipalities xii. Building/factory plan with letter of approval xiii. Real Estate Appraisal / Valuation Report xiv. RJSC Search Report (for Limited Company / Registered Partnerships; Borrower/Third Party) xv. Memorandum of deposit of title deeds (for equitable mortgages) with legal counselâ€™s approved draft xvi. Mortgage Deed and registration receipt endorsed by mortgagor (for legal / Registered Mortgage) along with Power of Attorney xvii. RJSC Form 18, and receipt of filing with RJSC if property in the name of limited cos.
xviii. xix. xx.
Certificate of Registration from RJSC Income Tax Clearance Certificate as required for Registration Non Encumbrance Certificate from Land Registrar
Guarantee i. List of Directors/Partners with specimen signatures, certified by company secretary, or chairman, or managing partner (for limited company and partnerships) ii. Resolution of guarantee (for limited company and partnerships) iii. Net Worth Statements (NWS) for individuals / guarantors iv. Letter of Guarantee v. Letter of Counter Indemnity Term Loan Agreement i. Term loan agreement between Borrower and EBL ii. Draft Term Loan Agreement approved by Head of Credit Risk Management Division and Legal Counsel Security Sharing Agreement i. Security Sharing Agreement ii. Draft Security Sharing Agreement approved by Head of Credit Risk Management Division and Legal Counsel Syndication i. Accepted Mandate Letter ii. Accepted Term Sheet iii. Information Memorandum iv. Participation Letters v. Facilities Agreement vi. Powers of Attorney of participation vii. Accepted Free Letter viii. Legal Counsel’s opinion ix. Head of Credit Risk Management and Legal Counsel approval of document STEP: 7 For withdrawing the loan amount, the customer creates a CD account and the loan is transferred to the CD A/C. Afterwards, the customer can withdraw the money. STEP: 8 Credit Disbursements After verifying all the documents, the branch disburses the loan to the borrower. The loan officer disburses the loan to the borrower’s loan account .A “Loan Repayment Schedule” is also prepared by the branch and is given to borrower. STEP: 9 After the disbursement of the loan the bank follows the borrower in the following manner: a) Constant supervision. b) Stock report. c) Break Even analysis d) Rescheduling of repayment. e) Working Capital assessment.
STEP: 10 The loans are repaid in installment. This installment is according to bank directives. Some loans are repaid all at a time. If any loan is not repaid then notices are served to the customer. Sometimes legal actions are also taken for recover the loan. 4.6.2 Classification of Loans and Advances: Loans may be classified in three categories I. Substandard II. Doubtful III. Bad and loss After six month loan become Substandard, after 12 month loan becomes doubtful, after 24 month loan becomes bad and loss. 4.6.3 Criteria for Classification I. Over due period II. Required payment III. Legal action IV. Limit over drawn V. Qualitative judgment I) Overdue Period If the gap between expiry date and reference date is over 5 month then the mode of classification will e substandard, if over 11 month then it will be doubtful, if over 23 month then mode will pad and loss II) Required Payment Either the time period 6 month or the gap between reference date and Expiry date the closest one is chosen. The credit summation for a certain time period (say 3 month) is worked out and is converted into one year time period. If this worked outbalance is higher the Highest debit balance then the loans unclassified and if it is lower than the highest debit balance then the loan is said to be classified. III) Legal Action The classified is considered on the basis of illegal transaction IV) Limited Over Drawn When the borrower with draws money from his loan A/C and the withdrawn amount exceeds the actual sum granted, then loan becomes classified. In this case 45 days are considered for repayment and after 45 days. The loan becomes classified. V) Qualitative Judgment The classification decision is taken on the basis of the qualitative nature of the loan. 4.7 Bank Guarantee: Bank Guarantee is the best way to earn profit without any cost. The exporter pays the payment of the imported goods on behalf of the importer through a bank guarantee. If the importer fails to make the fulfill payment at the moment the bank will remain liable to the exporter until and unless the importer pays the money of the imported goods.
4.7.1 Types of Guarantee: Agrani Bank offers three types of Guarantee, which are as follows: I) Tender or Bid Bond Guarantee The tender guarantee assures the tender that tenders shall uphold the conditions of his tender during the period of the offer as binding and that he /she will also sign the contract in the event of the order being granted. II) Performance Guarantee (PG) A Performance guarantee expires on completion of the delivery or performance. Beneficiary finds that as a guarantee, the contract will be fulfilled in every respect and can retain the guarantee as per provision for long time. Including a clause stating that the supplier can claim under the guarantee, by presenting an acceptance certificate signed by the buyer can counteract this. III) Advanced Payment Guarantee (APG) This type of guarantee is given against work order. This idea can be made clear with the help of an example. Before the beginning of Jamuna Bridge construction, the Government collected money from different sources to pay the contractors in advance. But, there was a risk for the Government that the contractors might not do there construction work even they were paid in advance. So, the Government asked Bank Guarantee from them. Then the contractors submitted Bank Guarantee to the Government. This type of Guarantee is called Advanced Payment Guarantee. 4.7.2 Issuance Procedure of Guarantee: Bank guarantee is a contractual relationship between the account (client) and the beneficiary. For issuing Bank Guarantee, a customer has to apply to ABL in his or her own pad. Normally the bank prepares the format of the guarantee. The proposal for Bank Guarantee contains the following particulars: i. Name of the Borrower with address ii. Nature of Facility iii. Extent of Facility iv. Purpose v. Security vi. Margin vii. Commission viii. Validity ix. Beneficiary x. Liability position of the Borrower xi. Nature of Facility xii. Extent of Facility xiii. Drawing Power xiv. Margin amount (Tk.) xv. Outstanding/ Net exposure (Tk.) xvi. Validity. Then Bank issues Bank Guarantee on Judicial Stamp. The conditions for issuing Bank Guarantee are: i. The customer must maintain a Current Deposit (CD) account. ii. The must keep certain percentage of guaranteed money (usually 2%) as margin.
Bank charges 0.60 % commission on the guaranteed money per quarter (i.e., 3 months). 15% VAT is charged on this commission. After realizing all the above charges, Bank then issues the Guarantee. For this issuance, Banker’s Liability is created When the guarantee is expired, the guarantee is marked as “cancelled” A Guarantee issue Register is maintained to record following information about Guarantee: i. Name of the Customer ii. Account no. iii. Guarantee no. iv. Issuing Date v. Date of Approval/ Reference no. vi. Beneficiary of the Guarantee vii. Amount of Guarantee viii. Margin (percent and amount) ix. Commission x. Date of Expiry. FOREIGN EXCHANGE DEPARTMENT 5.0 Foreign exchange operation is one of major activities of a commercial bank. These operations are also important for a country’s overall trade situation. This department of a bank have a huge impact on export and import activities of a country. Following discussion is based on the activities and there procedure. 5.1 Major Foreign Exchange Activities: There are mainly three major foreign exchange activities. The activities are listed below: I. Export II. Import III. Remittance 5.1.1 Functions of Foreign Exchange in brief: FOREIGN EXCHANGE IMPORT
Opening of L/C
Advising Export L/C Pre- shipment finance Post- shipment finance Figure: 5.1 Foreign Exchange in brief
5.2 Regulations Regarding Foreign Exchange Activities: 5.2.1 Local Regulatory Measures and Related Bodies:
Endorsement FDD Travelers cheque
Our foreign exchange transactions are being controlled by the following local regulations: I. Foreign Exchange Regulatory Act Foreign Exchange Regulation (FERA) Act, 1947 enacted on 11 th March 1947 in the then British India, provides the legal basis for regulation the foreign exchange. This act was adapted in Pakistan and lastly in Bangladesh. II. Guidelines for Foreign Exchange Transactions This publication issued by Bangladesh Bank in the year 1996 in two volumes. This is a compilation of the instructions to be followed by the Authorized Dealers in transactions relating to foreign exchange. III. Foreign Exchange Circular Bangladesh Bank issues F.E. circular from time to time to control the export import business and remittance that is to control the foreign exchange. IV. Export-Import Policy Ministry of commerce issues Export Policy and Import Policy giving basic formalities for Import and Export Business. V. Public Notice Some times CCI &E issues public notice for any kind of change in Foreign Exchange Transaction. VI. Instructions from Ministries Different ministries of the Govt. sometimes instruct the authorized dealer directly or through Bangladesh Bank to follow something required for the government. 5.2.1 International regulations and related regulatory bodies: There are also some international organizations influencing our Foreign Exchange transactions. Few of them are discussed bellow: I. International Chamber of Commerce (ICC) International Chamber of Commerce is a world wide Non-Governmental Organization of thousands of companies. It was founded in 1919. ICC National committees throughout the world present ICC views to their Governments and alert Paris Headquarters about national business concerns. ICC has issued some publications like UCPDC, URC and URR etc., which are being followed by all the member countries. There is also an international Court of Arbitration to solve the international business disputes. II. World Trade Organization( W.T.O) World Trade Organization is another International Trade Organization established on 1 st January 1995. GATT (General Agreement on Tariff & Trade) was established on 1 st January 1948. After completion of itâ€™s 8th round, the organization has been abolished and replaced by WTO. This organization has vital role in international trade through its 124 member countries. 5.3 Letter of Credit: A letter of credit is a letter issued by a bank (know as the opening or the issuing bank) at the instance of its customer (known as the opener) addressed to a person (beneficiary)
undertaking that the bills drawn by the beneficiary will be duly honoured by it (opening bank) provided certain conditions mentioned in the letter gave been complied with. 5.4 Classification of L/C: In different considerations there are many kinds of L/Cs. Some of them are discussed bellow: I. Irrevocable L/C Irrevocable L/C cannot be amended or cancelled without the consent of the beneficiary or any other interested parties. Banks commonly open this type of L/C. II. Revocable L/C This kind of L/C can be amended or cancelled by the Issuing Bank, without the consent of the beneficiary or any other interested parties. If it is not indicated in the L/C, whether it is Revocable or Irrevocable, then the L/C to be treated as Irrevocable. III. Add-Confirmed L/C When a third bank provide guarantee to the beneficiary to make payment, if Issuing Bank fail to make payment, the L/C is called Add-Confirmed L/C. In case of a confirmed L/C a third bank adds their confirmation to the beneficiary, to make payment, in addition to that of Issuing Bank. Confirmed L/C gives the beneficiary a double assurance of payment. IV. Lean Clause It is a normal clause L/C without third bankâ€™s confirmation. V. Revolving L/C It is an L/C where the original amount restores after it has been utilized. How many times and how long, the amount will restore must be specified in the L/C. For example, an L/C opened for USD 1000 and shipment effected for USD 500, now the L/C restored for full value i.e. there is scope to effect further shipment of USD 1000 revolving L/C may be opened to avoid difficulties of opening new L/C. This L/C is not allowed in our present import policy. VI. Transferable L/C If the word â€œTransferableâ€? incorporated in an L/C, then the L/C is transferable. The 1st beneficiary can transfer transferable L/C to the 2 nd beneficiary. But 2nd beneficiary cannot transfer it further to another beneficiary. Transfer may be done to more than one beneficiary, partially, if not prohibited in the L/C. VII. Restricted L/C If advising and/or negotiation of an L/C are restricted to a particular bank, the L/C is called a restricted L/C. VIII. Red Clause L/C A red clause L/C is an L/C, where a special clause is incorporated into it that authorizes the confirming or any other nominated bank to make advances to the beneficiary, before presentation of the documents. In other words this is an L/C, where the Issuing Bank authorizes the negotiating bank to provide pre-shipment finance to the beneficiary. The L/C is called red-clause because, the special clause was originally written in red-ink to draw attention to the unique nature of this documentary credit. Red clause L/C is not allowed in our present import policy.
IX. Green Clause L/C It is an L/C, where the Issuing Bank authorizes the Negotiating Bank to grant storage facilities to the beneficiary. The special clause was originally written in Green-ink, so the L/C is called Green Clause. In both the case of Red Clause and Green Clause L/C, if the exporter fails to ship the goods the financing bank has the right to demand repayment from the Issuing Bank and that bank would have a similar right of recourse against the applicant. X. Clean L/C This is a commercial letter of Credit, wherein the Issuing Bank does not ask any documents as evidence of execution of the deal under the L/C. Under the said L/C only bill of exchange may be negotiated or may be paid without any supporting documents. Clean Letter of //Credit is not permissible in our import policy. XI. Documentary L/C All the commercial letter of credits, where export related documents such as invoice, B/L etc. are required to present with the bill of exchange, is called Documentary Credit. Under this L/C, bill of exchange will not be honoured without other required documents. XII. Straight Documentary Credit Under the irrevocable straight documentary credit, the obligation of the Issuing Bank is extended only to the beneficiary, in honoring draft(s)/ documents and usually expires at the counter of the Issuing bank. This L/C. does not authorize any body to negotiate, purchase the documents. This L/C. is available for payment only at the Issuing Bankâ€™s counter, not available for negotiation. 5.5 L/C can be classified according to Source of Fund: I. Back-To-Back L/C Back to Back import L/C is backed by another export L/C. where import of the goods to be made to execute the export L/C and payment of Back to Back bills to be made normally from related export process, the import L/C is called Back to Back L/C. A Back-to-Back L/C is opened against an irrevocable L/C. The L/C is lien marked with the back-to-back L/C issuing branch. Back to Back L/C may be opened up to 75% of export L/C, (FOB value) and up to 80% where export price is more than USD 60/- per dozen in case of garments industries. II. Cash L/C Where payment of import bills under L/C is being made from (i) Foreign Currency reserve in Bangladesh Bank or (ii) F.C. account with authorized Dealer, the L/C is called Cash L/C. III. Barter L/C Where final settlements are being made through commodity exchange between the nations, the L/C is called Barter L/C. 5.6 L/C Procedure:
IMPORTER (L/C APPLICANT)
L/C OPENING BANK
ISSUE L/C L/C BENEFICIARY
L/C ADVISING BANK/CONFIRMING BANK
Figure: 5.2 L/C Procedures
5.7 Payments Methods under L/C: SightororPayment Paymentcredit credit Sight
Payment methods Payment methods under L/C under L/C
DeferredPayment PaymentCredit Credit Deferred
AcceptanceCredit Credit Acceptance
Negotiation Credit Negotiation Credit
Figure: 5.3 Payments Methods under L/C 5.8 Different Parties Involved in Foreign Exchange Transactions: Normally the following parties are involved to a documentary credit: I. Importer The buyer or the importer is he who initiates the credit. He applies to bank for issue foreign a documentary credit. The obligations between the importer and the issuing bank are governed by the application-cum-agreement submitted by the importer to the bank. He is bound to reimburse the bank, which effects payment or incurred a deferred payment undertaking or has accepted or negotiated under the credit as per terms, and to take up the documents. II.
The issuing or opening bank is the importer’s bank and it issues a letter of credit normally pursuant to the terms of sales contract as set out in the application for the credit by the importer. The issuing bank should nominate the bank, which is authorized to pay or to accept drafts or to negotiate, unless the credit allows negotiation by any bank. III. Exporter The seller or exporter is the beneficiary of the credit. The letter of credit is opened in his favor and addressed to him. The beneficiary has the obligation to make export as per the contract and produce the documents as required by the credit. IV. The Advising Bank It is the bank in the exporter’s country (normally the exporter’s bank), which is usually the foreign correspondent of importer’s bank through which the L/C is advised to the supplier. If the intermediary bank simply advises/notifies the L/C to the exporter part, it is called “Advising Bank”. V. The Confirming Bank If the advising bank also adds its own undertaking to honor the credit while advising the same to the beneficiary, he becomes the confirming bank. In addition, becomes liable to pay for documents in conformity with the L/C’s terms and conditions. The liability of the confirming bank is the primary liability and it is not contingent on the fulfillment of the obligation by the issuing bank. VI. The Accepting Bank Accepting bank is the bank nominated in the letter of credit to accept bills drawn under the credit. If the bank so nominated accepts the nomination, its responsibility to the beneficiary is not only to accept the drafts drawn but also to make payment on their due dates. VII. The Paying Bank Paying bank is a bank in the beneficiary’s country nominated in the letter of credit to make payment against documents to be tendered under the credit. Paying Bank must examine all documents with reasonable care to ascertain that these are drawn in accordance with the terms and conditions of the credit. VIII. Reimbursing Bank The issuing bank may indicate in the credit the name of a bank. From whom the paying/negotiating bank can obtain reimbursement. The documents are sent to the issuing bank. The negotiating/paying bank simultaneously makes a claim with the reimbursing bank for the payment effected. Normally the reimbursing bank would be the bank with which the issuing bank maintains an account. IX. The Transferring Bank If the L/C is transferable, then the 1st beneficiary of the L/C may transfer the L/C to the 2 nd beneficiary, through a bank nominated by the Issuing Bank. This bank is called the Transferring Bank. 5.9 Documents Required for Foreign Exchange Transaction: Export-Import transactions ask for the following documents: I. Transport Documents
II. Insurance Documents III. Commercial Invoice IV. Other Documents I. Transport Documents Transport documents comprises of Bill of Lading, Airway Bills, Truck Receipts, Railway Receipts and Inland Waterway Receipts. Checking points of this document are: i. The Bill of Lading is issued/endorsed to the order of Negotiating Bank. ii. Bill of Lading is clean, showing “Shipped on Board” notation, marked ‘Freight iii. Prepaid” [For CFR Basis] and ‘Freight Collect” [For FOB Basis], not short form, Blank back or pre dated. iv. The Bill of Lading appears the merchandise covers in Commercial Invoice. v. The port of Shipment, Destination, Shipment Date, Name of consignee, vi. Shipping Mark [if any] appears on the Bill of Lading are as per LC term. Bill of Lading is signed by the carrier company or his agent. II. i. ii. iii. iv. v. vi. III.
Commercial Invoice Checking points of this document are: The invoice dated and signed by the beneficiary. The invoice is issued to the party concerned as stated in the LC. Description of goods is as stated in the LC. Unit price mentioned as stated in the LC. Proper Trade-Term is mentioned.
Insurance Documents Checking points of this document are (in case of CIF basis): The Insurance Policy is valid. The policy is issued in the name of LC Issuing bank a/c: importer. The policy is signed by the authorized official of the Insurance Company. The policy is in negotiable form, duly stamped and dated prior the BL date. Description of goods, name of carrying vessel shown in Insurance Policy are same as shown in BL. vii. The policy covers Transshipment [if allowed in L/C] clause. viii. Policy covers 10% above the value of consignment. ix. Policy indicates where and in which currency the claim [if any] will be settled. i. ii. iii. iv. v. vi.
IV. Other Documents As per UCP 500, other documents comprises of all other documents other than Transport Documents, Insurance Documents and Commercial Invoice. i. Certificate of Origin The Certificate is issued by the concerned authority of exporting country as stated in the LC [usually such Certificates are issued by the Chamber of Commerce & Industry of exporting country]. ii. Beneficiary’s Certificate The certificate issued by the beneficiary stating the particulars as stated in the LC.
iii. Packing List The Certificate is issued and prepared by the beneficiary as per instruction given in the LC. iv. Inspection Certificate Checking points of this document are: The Certificate is issued by the competent authority as approved for that country. The Inspection Certificate can also be issued by the beneficiary/manufacturer if allowed in the LC. The Certificate is signed-sealed certificate the contents as required and issued prior to shipment of the goods. v. Bill of Exchange Checking points of this document are: The bill of exchange is drawn by the beneficiary as mentioned in the LC duly signed and dated. The amount is identical with the amount of Commercial Invoice. The amount mentioned in figure and words are consistent. The bill of exchange is in order and/or endorsed properly. 5.10 Import: 5.10.1 Types of Importer: Import is the flow of goods and services purchased by economic agents located in one country from economic agents located in another. Hence, import of merchandise essentially involves two things: bringing of goods physically into the country and remittance of foreign exchange towards the cost of the merchandise and services connected with its dispatch to the importer. In case of import, the importers are asked by their exporters to open letters of credit so that their payment against goods is ensured.
Public Sector (Govt. Org. & Corp.)
Industrial (raw Commercial materials, (finished machineries Figure: 5.4 Import Businesses etc.) products)
Import trade in Bangladesh is controlled under the Import and Export control Act 1950. Authorized Dealer Banks will import the goods into Bangladesh following the import policy, public notice, F.E. circular and other instructions from competent authorities from time to time. 5.10.2 Procedure of Import: Import of merchandise essentially involves two things: i. Bringing of goods physically into the country. ii. Remittance of foreign exchange towards the cost of the merchandise. The Ministry of Commerce through the Chief Controller of Import regulates physical import and Exports being office at the important trade centre while Bangladesh Bank regulates the payment for the imports through its various departments. The following are the steps involved in import of merchandise into Bangladesh. 5.10.3 Registration of Import: In terms of the Importers, Exporters and Indenters (Registration) Order 1981, no person can import goods into Bangladesh unless he is registered with the Chief Controller of Import and Export or exempted from the provisions of the said order. So the following documents are required to be submitted to the licensing authority for registration as importers: i. Questionnaire form duly filled in and signed ii. Income tax registration certificate iii. Trade License from the Municipal or Local Authority iv. Bank certificate v. Nationality certificate vi. Partnership Deed where applicable vii. Certificate of Registration with the Registrar of Joint Stock Companies and Memorandum and Articles of Association in case of Private and Public Ltd. Co. viii. Certificate from the Chamber of Commerce/Registered Trade Association ix. Ownership documents or rent receipts of the place of business x. Any other documents required under the relevant import policy. After submission of the above documents and payment of requisite fees, if the documents are found in order and the C.C.I & E is satisfied, the Import Registration Certificate (IRC) is issued to the applicant-importer. 5.10.4 Import Policy: The Chief Controller of Imports and Exports announces the Import Policy concerning various aspects of imports. The main points covered by the import policy are the following: i. Items eligible for imports during the shipping period. ii. Procedure for formation of groups. iii. The dates for opening of L/C and shipment. iv. The rules for re-validation of the License/LCA and the L/C. 5.10.5 Licensing for Imports: Most imports into Bangladesh require a license from the Licensing Authority. In recent years, the task of licensing has been delegated to the commercial banks. It is done by LCA (Letter of Credit Authorization Form). Blank LCA forms can be obtained by the importer from their banker. The following documents are required to be submitted by the import to his banker: i. LCA Form property filled-in and signed.
ii. iii. iv. v.
LC Application. Purchase Contract in the shape of an Indent or Proforma Invoice. Insurance Cover Note. Membership Certificate from a chamber of Commerce and Industry or Registered Trade Association. vi. Import Registration Certificate (IRC). Receipt of LCA Form and the required documents, the bank should carefully scrutinize the documents. 5.10.6 Examination & Security of Import Documents: In shipment of the goods, the exporter submits the export documents to the negotiating bank. Negotiating bank checks and sends the documents to the issuing bank after negotiation. Upon receipt of the import documents issuing bank will examine the documents carefully. If there is any discrepancy in the documents, bank will decide within 7 banking days, following the day of receipt of the documents, whether it will accept the documents or will refuse. If the issuing bank fail to communicate the refusal to the negotiating bank within 7 days, the documents deems to be accepted. At time of scrutiny the following points to be checked specially: i. Signature of the customer on the L/C application to be verified by authorized/ designated officer. ii. L/C application with all supporting papers to be checked to ensure that the required papers are as per requirement of Guidelines for Foreign Exchange Transactions and are consistent to each other. Bill of Exchange: i. Is the bill drawn in terns of the L/C and does it bear L/C no. and date? ii. Does the amount of the BOE in words and figures agree and is it in the same currency of the L/C? iii. Whether the draft is drawn on the issuing bank or not? Invoice: i. Does the invoice value agree with the amount of the BOE? ii. Does the invoice value clearly state the unit price i.e., FOB/C&E/CIF as mentioned in the L/C? iii. Does the description of goods declared in the invoice agree with that of the L/C? iv. Does the shipping mark on invoice agree with those on B.L /AWB / TR/ RR? v. Does the gross weight and net weight if shown on invoice agree with those on B/L? vi. Custom invoice and /or consular invoice to be presented as per credit terms. Transport Documents i. Has the full set of original transport documents have been submitted? ii. Is the B/L marked ‘ON BOARD’? iii. Is the B/L clean? 5.11 Lodgement: If import documents are found in order, they are to be made entry in the bill register and necessary vouchers to be passed, putting Bill number on the documents. This process is called Lodgement of the bill. The word “Lodgement’ means temporary stay. Since the documents stays at this stage for a temporary period i.e. up to retirement of the documents,
the process is called lodgement. Bank must lodge the documents immediately after receipt of the same, not exceeding 7 banking days, following the day of receipt of the documents, (Article 14, UCPDC-500). 5.11.1 Procedure for Lodgement: Bill Register Bank entry the documents in the bill register. Bill register must include date of lodgement, bill no, bill of exchange no, amount, name of the negotiating bank, B/L no and date, merchandise, retirement date and other particulars. Application of Rate Foreign currency would be converted at Bangladeshi currency selling rate ruling on the date of lodgement. Exchange Control Form IMP & TM form must be filled in and signed by the importer at the time of lodgement. Endorsement of â€œLCAFâ€? LCA form must be endorsed showing utilization of shipment. Noting on the File Utilized amount showing bill number is to be noted on the printed format of L/C file. 5.12 Retirement When the importer release the import documents from the bank by acceptance/cash payment or under post import bank finance, it is known as retirement of the import document. The steps for retirement are as followsi. Intimation to The Importer Bank will intimate the importer with full particulars of the shipment to retire the import documents on receipt of the same as per terms of the credit. ii. Acceptance Usance bill for collection is to be presented to the importer for acceptance. Sight bills need no acceptance if not discrepant. The maturity to be calculated from the date of acceptance or negotiation as per credit terms. A due date diary to be maintained for maturity date. iii. Payment of Import Bills In case of back-to-back usance bills payment to be made on or before maturity date of the bill out of the realized export proceeds. In case of cash sight import bills bank makes payment from its F.C deposit account and will realize the value of foreign currency from the client account. 5.13 Back to Back L/C: The benefit of a L/C (the Master L/C) may be made available to a third party where the primary beneficiary uses the master L/C as security collateral to obtain another L/C (the secondary credit) in favor of the actual supplier. The secondary credit is known as back-toback L/C. A Back-to-Back L/C involves two separate L/Cs. i. One opened in favor of the first or primary beneficiary, and ii. One opened for the account of the first beneficiary in favor of a second beneficiary who is supplying the goods.
The first beneficiary of the Master L/C becomes the applicant for the back-to back L/C. Back-to-Back L/C is commonly known as Buying L/C, whereas Master Export L/C is known as Selling L/C. What percent of export L/C’s value is permitted to open a back-to-back L/C its depend upon the nature of the goods and getting information from the commerce ministry. 5.13.1 Checklist to Open Back-To-Back L/C: i. Applicant is registered with CCI & E and has bonded warehouse license. ii. The master L/C has adequate validity period and has no defective clause. iii. L/C value shall not exceed the admissible percentage of net FOB Value of relative Master L/C. iv. Essence period will be up to 180 days. 5.13.2 Papers Required for Opening an Back-To-Back L/C: i. Import Registration Certificate & Export Registration Certificate. ii. L/C application & LCA form. iii. Proforma Invoice / Indent. iv. Insurance Policy. v. IMP form. In addition to above following papers are required for Readymade Garments Industry: i. Bonded Warehouse license. ii. Quota allocation letter from EPB (where applicable) iii. Letter of disclaimer from landlord if rented premises. 5.13.3 Steps of Opening Back-To-Back L/C: i. Importers’ application to open a BTB L/C against specific Master L/C. ii. Export dept. marks lien of the export L/C and forwards it to the Import dept. iii. L/C opening desk then enters all particulars of the master L/the party registers and maintains account of such master L/C. Any amendment brought in the master L/C is also recorded in the register. iv. Obtain credit report of the beneficiary (where applicable). v. Examination of L/C application form—whether within the credit Limit, dully signed by the concerned person and also signed by the Applicant. vi. Necessary entries into the B.B. L/C opening register.
Obtain credit report
Preparing offering sheet if regular credit line is not available
Mark lien on the master L/C
Issuance of letter of credit
Figure: 5.5 Flow-chart for Issuing Back-to-Back L/C 5.14 Post Import Finance: When the importer does not come forward to retire the import documents, or requests the bank for finance against the imported consignment, then arises the necessity of post import investment. If the consignment is not cleared within 45 days, from the date of arrival, custom authority may auction the consignment under section 167 (8) and amended section 82 of the Custom Act 1969. Bank issues notice to the client, to retire the documents immediately after receipt of the documents and it will scrutinize the documents within 7 working days, from the date of receipt of the documents. If the documents are correct in all respect, the final notice is to be issued to the client before forced clearance of the goods under MPI. 5.15 Export: Export means outflow of goods and services produced in one country, which purchase by Government, Firms and individuals of other countries. Development of a country depends on its participation in the international trade by increasing production and export of commodities and service sector. By way of this a country can improve Employment Generation-Income level-Savings-Growth-Economic Development. The imports and exports trade in Bangladesh is regulated by the Import & Exports Control Act 1950. There are number of formalities an exporter has to fulfill before and after execution of export, some of are as under: 5.15.1 Procedure/ Formalities for Export: The imports and exports trade is regulated by the Import & Exports Control Act 1950. There are number of formalities an exporter has to fulfill before and after execution of export, some of are as under: The intending exporter has to register with CCI&E and obtained Export Registration certificate [ERC]. The ERC number is to be used in all places relating to exports. Security Export Order To secure export order the exporters may contact local chamber commerce of potential buyers, the export promotion bureau, Bangladesh mission abroad and by direct contact with foreign buyer through correspondences. Receiving Letter of Credit After making contact with foreign buyers and reaching on agreed price and terms, conditions the exporters receive Letter of Credit. Procurement and Shipment of Goods After receipt of LC the exporter has to procure or manufacture the contracted goods and ship the same. Preparation and Procurement of Export Documents
After making shipment the exporter has to prepare documents i.e. Bill of Exchange, Commercial Invoice, Beneficiaryâ€™s certificates and procure some documents i.e. Transport Documents, Certificate of Origin, Insurance certificate, Inspection certificate and other documents as required as per L/C terms. Submission of Documents to the Bank for Negotiation After preparation and collection of all documents as per LC terms the exporter has to submit the documents to the bank for Negotiation/Payment/Purchase. 5.15.2 Preshipment Credit: Pre-shipment credit is given to the exporters, for the activities prior to shipment of goods for export. Some example of Pre-shipment credit: Cash for local procurement of raw materials and its related expenses, Procuring & Processing of goods for export, Packing and transportation of goods for export, Payment of insurance premium, Inspection fees, Freight charges etc. Pre-shipment Credits are like the following formsI. Export Cash Credit (Hypothecation) This for of credit is allowed to exporter against hypothecation of raw materials or finished goods intended for export. Since the bank has got no security against this credit except charge documents and lien on export LC, bank obtain letter of hypothecation creating charge against the goods in favor of the bank only but neither the ownership nor the possession on it. II. Export Cash Credit (Pledge) Under this arrangement bank provide finance to the exporter against pledge of goods to be stored in the go down under bankâ€™s control against letter of pledge and other charge documents. In this case the goods remain as security under banks control and possession. In the event of failure of the exporter to honor commitment, the bank can sell the goods for recovery of bank dues. III. Export Cash Credit against Trust Receipt This type of credit facility is allowed to exporter when the exporter wants to utilize the credit for processing, packing and rendering the goods in exportable condition and when it seems that the exportable goods can not be taken in the banks custody. In this case exporter has to execute a stamped in favor of bank and a declaration stating that the goods purchased with financial assistance of bank are held by him in trust for the bank. Collateral security is obtained against this credit also. IV. Packing Credit This type of credit is allowed for a transitional period from dispatch of goods till negotiation of export bills. The purpose of this credit is to pay the transportation cost of goods to be exported. The amount disbursed under export cash credit [hypo/pledge] are to be adjusted from the drawings of packing credit which is, in turn to be adjusted by negotiation of export bills. V. Back to Back Letter of Credit Under this arrangement bank finance exporters by way of issuing back to back letter credit on behalf of exporter for procurement of raw materials and accessories favouring the manufacturer/supplier home and abroad against lien of export LC and collateral security.
VI. Post Shipment Payment Usually the exporter can not afford to wait for a long time for payment to local manufacturer/supplier and other financial obligations. Resulting which the exporters need post-shipment credit facility. Considering the genuine need, and worthiness of export and other security measures bank allow credit facility to exporters. Some form of Post Shipment Credit Facility arei. Negotiation of Documents Under L/C Negotiation means payment of the value of the drafts drawn under the LC. Under this arrangement, upon receipt of credit conform documents from the exporter, banks pay the value of the drafts to exporter. ii. Purchse for DP & DA Bills In this case bank purchases/discounts the DP and DA bills at rate published by the bank. Before allowing such credit bank should check all the documents presented are strictly as per terms and conditions of the LC and there is clear payment instruction in the LC from the LC issuing bank. iii. Advance Against Bills for Collection Exporters can submit the export document to a bank after execution of export for collection of the proceeds but the deal was not under any LC, documents drawn under LC but some discrepancies are there. To meet the exporters need bank can make advance to exporter from 50 to 80% of the bill value considering the relationship, past track record, and obtaining collateral security from exporter. 5.16 Different Methods of International Trade Payments: I. Cash in Advance Under this arrangement, buyer pays the value to exporter against the goods to be shipped and services to be provided in some future date. After receipt of payment exporter ship the goods and provides services to buyers. But the system is disadvantageous for buyer because buyer blocking his fund in advances having no assurance of receipt of goods and service in time as per contract. So such type of payment is considered as risky and expensive for buyers but favorable for seller. II. Open Account Under this method, the sellers are in risky situation because he has to deliver the goods and service to buyer before receiving payment. Buyer makes payment only after receipt of goods and services as per contract terms. So before going such transaction sellers should check the past record, worthiness and business history of the buyer and if it is found satisfactory only seller can proceed further. III. Collection against Payment (D/P) Under this method, exporters ships the goods and draws bill of exchange on the buyer and submit the documents to a bank with instruction to collect the proceeds through its correspondent bank located in the buyers country. In this case documents delivered only against payment. IV.
Collection against Acceptance (D/A)
Under this method, exporters ships the goods and draws bill of exchange on the buyer and submit the documents to a bank with instruction to collect the proceeds through its correspondent bank located in the buyers country. In this case documents delivered against acceptance of Drafts by the buyer. V. Documentary Credit Documentary credit is the classic method. This method reduced payment related risks for both exporter and importer substantially. Because documentary credit is conditional payment undertaking of issuing bank to the exporter against compliance of certain terms and conditions and submission of required documents as per credit terms. So under this payment method both exporter and importers feel safe to deal. 5.17 Examination and Negotiation of Export Documents: 5.17.1 There are many instances where exporters involve themselves in committing fraud so while exporters tendered export documents for negotiation, special care should be taken in checking the said documents to avoid fraud forgery and protect the interest of the bank. Following are some important checking points: 1. Know Your Exporter You should know your customer considering his relationship record and worthiness.
with the bank, previous track
2. Proper Checking of Export L/C LC is authenticated, irrevocable, valid, Free Negotiable in Bangladesh, Payment instruction is clear, issued under UCPDC. 3. Proper Checking of Export Documents Bill of exchange, Commercial invoice, Transport documents and other documents are prepared and presented as per LC terms. 4. Processing of “FDBP” Enter in FDBP Register and dispatch the documents as per LC terms, Send Duplicate copy of EXP Form to Bangladesh Bank within 14 days. 5.17.2 Export Letter of Credit: The export is normally executed against letters of credit opened by overseas buyers. Sometimes shipments are made on CAD, DP, DA or consignment basis without cover of L/C. When export is made against L/C, the exporter should examine the following terms of L/C to avoid any future complicity to execute the order: i. The terms and conditions of L/C are definite, clear and explicit and also are in conformity with those of the contract. ii. The L/C should be an irrevocable one and be confirmed by the advising bank. iii. If the import of the goods is under control in buyer’s country, the buyer holds a valid import license. iv. If the L/C is transferable or otherwise, it should be clearly mentioned in the L/C. v. The L/C should provide sufficient time for shipment and a reasonable time for negotiation. If nothing were mentioned, the shipper would be allowed 21 days to negotiate the documents. If any of the terms of the L/C appears to be vague, ambiguous or too difficult for the banker to ensure compliance, the banker should immediately refer to the concerned correspondent by
letter or cable and get the vagueness removed before advising he L/C to the beneficiary (exporter). On the other hand, if the exporter finds any provisions inconsistent with the underlying contract, he should immediately ask the buyer to carry out necessary amendments though the L/C opening bank. 5.17.3 Shipment: After the contract the exporter takes all necessary steps to ship the goods. He may procure or manufacture the goods. Failure to maintain the delivery schedule will expose the exporter to claim from the buyers for damages on account of non-shipment or late shipment, and in addition the exporter may also loose the patronage of the buyer for future export orders. While shipment and after shipment the exporter should obtain or prepare the following documents: i. EXP Form ii. Photocopy of registration certificate iii. Photocopy of the contract iv. Photocopy of the L/C v. Customs copy of ERF Form for shipment of jute goods and EPC Form for raw jute vi. Freight certificate from the bank in case of payment of the freight at the port of lading is involved vii. Bill of Lading, Railway receipt, Postal receipt, Air way bill or Truck receipt viii. Packing list ix. Certificate of origin x. Shipping instructions xi. Insurance policy. 5.17.4 Issuance of “EXP” Form: All exports must be declared on EXP Form. AD branches supply these forms. The bank certifies EXP form only after confirming the following: i. Arrangements have been made for realization of export proceeds. ii. Bonfires of the importer/consignees abroad iii. Arrangements have been made for receipt by authorized dealer of documents of title to goods, iv. The exporter has signed the EXP. 5.17.5 Disposal of “EXP” Form: i. The EXP forms are quadruplicate. Exporter will complete and singe the EXP. ii. After completing the EXP forms, exporter should submit all copies to the AD for certification. After bank’s certification it to be submitted along with the shipping bill to the custom authorities. Custom authorities affixing their seal and signature will return the duplicate, triplicate and quadruplicate copies to the exporter. The original copy to be forwarded to Bangladesh bank by custom authority. iii. Exporter will submit the remaining copies of EXP forms along with invoice to the AD, through whom payment to be revived. iv. AD should submit the certified duplicate copy of EXP form to the BB within 14 days from the date of shipment. v. Upon receipt of payment, the AD should also submit the triplicate copy of EXP form to BB at the end of the month certifying on the reverse of the form, with monthly summary statement.
5.17.6 Submission of Documents: After the shipment, the exporter submits all these documents to bank for negotiation. The exporter remains in constant touch with the negotiating bank for early negotiation of export bills. If any minor mistake is detected or any document is found missing the same should immediately be corrected or supplied for early settlement of the matter. 5.18 Export Documents Checking: After submission of exports documents by the exporter, bank must check the documents whether all the required documents submitted or not. Bank must examine all documents stipulated in the credit with reasonable care to ascertain whether or not they appear, on their face to be in compliance with the terms and conditions of the credit. Documents not stipulated in the credit will not be examined by the bank. The following points of documents should be carefully scrutinized: I. i. ii. iii. iv. v.
Bill of Exchange Amount of bill differs with invoice Not drawn on L/C issuing branch Not signed Tenor of C/E not identical with L/C Full set not submitted
i. ii. iii. iv. v. vi.
Involve Not issued by the beneficiary Not signed by the beneficiary Not made out in the name of the applicant Description, price, quantity, sales terms of the goods not correspond to the credit Not marked one fold as original Shipping marks differs with B/L and packing list.
Packing List i. Gross weight, net weight and measurement, number of cartoons/ packages differs with B/L. ii. Not marked one fold as original iii. Not signed by the beneficiary iv. Shipping marks differs with B/L
Bill of Lading /Air Way Bill i. Full set of bill not submitted ii. B/L is not drawn or endorsed to the order of IBBL iii. “Shipping on Board”, “Fright Prepaid” or “Freight collect” etc. notations are not marked on the B/L. iv. B/L not indicate the name and capacity of the party i.e. carrier or master, on whose behalf the agent is signing the B/L. v. Shipped on board notation not showing name of pre-carriage vessel/ intended vessel vi. Shipped on board notation not showing port of loading and vessel name (in case B/L. indicated a place of receipt or taking in charge different from the port of lading) vii. Short form B/L. Charter party B/L
V. Export L/C Advising Advising bank shall take reasonable care to check the apparent authenticity of the credit, which it advises. If the bank elects not to advise or cannot establish apparent authenticity, it must inform to the issuing bank without delay. The bank also may advise unauthenticated credit, informing the beneficiary that it has not been able to establish the authenticity of the credit (UCP Article-7). Bank will make entry of the L/C in the L/C advising register with its full particulars putting separate serial number under different issuing bank. Subsequent amendment also to be recorded under the correspondent L/C. Test Key Arrangement Test Key Arrangement is a secret code maintained by the banks for the authentication for their telex messages. It is a systematic procedure by which a test number is given and the person to whom this number is given can easily authenticate the same test number by maintaining that same procedure. TBL, Local Office has test key arrangements with so many banks for the authentication of L/C messages and for the transfer of funds. Modes of Payment The most common methods of payment under a L/C are as follows: SightororPayment Paymentcredit credit Sight
Paymentmethods methods Payment under L/C under L/C
DeferredPayment PaymentCredit Credit Deferred
AcceptanceCredit Credit Acceptance
NegotiationCredit Credit Negotiation
Figure: 5.6 Payment Method under L/C 5.19 Foreign Remittances: These remittance services are providing for exchange foreign currency. These services are as follows: I. II. III.
Foreign Demand Draft Endorsements of US$ in passport Travelerâ€™s Cheque
5.19.1 Foreign Demand Draft (F.D.D): AGRANI Bank accepts the charges for TOEFL, SAT, GMAT etc. through Foreign Demand Draft. ABL opens Student Files to issue Foreign Demand Draft following the permission of Bangladesh Bank. Before issuance of FDD, OBL asks the students to fill up the TM Form, which contains the following particulars— a) Name of the student b) Full address of the student c) Amount of FDD in Foreign Currency d) Purpose of Remittance e) Address of the Institution to which the FDD will be favoured f) Country receiving payment g) Passport no. of the student with date of issue h) Signature of the student 5.19.2 Endorsements of US Dollar in Passport Agrani Bank endorses US$ in passports. To endorse US Dollar, the client has to apply in the prescribed form (TM Form). 5.19.3 Traveler’s Cheque Traveler’s cheques are issued by banks to avoid the risk of loss or inconvenience in having to carry large amount of cash while traveling. The salient features of T.C. are: i) The buyer of T.C. needs not to be a customer of ABL. ii) The buyer has to deposit money with the branch of ABL equivalent to the amount of the T.C. he wants to buy. iii) Each T.C. is signed by the buyer at place marked “when countersigned below with this signature”, before the ABL Officer. iv) T.C. is issued in single name .It is not issued in joint names or names of clubs, societies and companies. v) There is no expiry period for the T.C. CONCLUSION & RECOMMENDATION 6.1 Conclusion: This report has attempted to explain the commercial banking practices that are followed by the Agrani Bank Limited. Also Bibliography: 1. Gulshan, S.S. & Kapoor, G.K., Banking Law and Practice, 2. D R Fraser, Commercial Banking 3. Abul Hashem ,What Banker does (Second Edition) 4. Md. Mubarak Hussain ,General Banking Nitimala & its operation 5. L.R. Chowdhury ,Foreign Exchange 6. Strategic Management: A. Thompson, J, and A, J, Strickland. 7. Gordon, E. & Natarajan, K., Banking: Theory, Law & Practice, Himalaya Publishing House Mumbai 1996
8. Choudhury, Dr. T.A., Modes of Payment in International Trade, 9. Reading Materials on International Trade & Finance (E-102), Bangladesh Institute of Bank Management(BIBM), 2000 10. Sundharam, K.P.M. & Varshney, P.N., Banking Theory, Law and Practice, 11. Sultan Chand & Sons, New Delhi, 1996 12. Agrani Bank Limited Annual Report 2009