Allah

Page 1 of 101
1www.AssignmentPoint.com
The BASIC Bank Limited (Bangladesh Small Industries and Commerce Bank Limited)
established as a banking company under the erstwhile Companies Act 1913 launched its
operation in 1989. It is governed by the Banking Companies Act 1991.
The Bank started as a joint venture enterprise of the BCC Foundation with 70 percent
shares and the Government of Bangladesh with 30 percent shares. The BCC Foundation
being nonfunctional following the closure of the BCCI, the Government of Bangladesh
took over 70 percent shares of the BCC Foundation on 4th June 1992 and became 100
percent owner of the Bank.
I have worked all the key major departments of this bank. General Banking Department
plays a vital role in facilitation of the country.
General Banking comprises of account opening, bills, remittance, clearing, cash and
computer sections. Through these it establishes Banker Consumer relationship, collects
bills for customers, remit funds of customers from one place to another, and honor Cheque
drawn on this branch. General banking department provides these services in a faster and
better manner.
Bank investments are greatly emphasized and we can call all this as the 'Heart' of the
bank because they are a major source of bank's income. They are very important to the
economy as a whole because the expansion and condition of the bank investment affect
the level of business activity through their effect on the nation's money supply. The banks
extended its Investment facilities to different sectors to diversity its Investment portfolio in
compliance with credit policies of Bangladesh Bank. Investment Department plays a vital
role in augmenting the bank's growth and earnings. It provides different types of
Investment facilities too its customers like Secured Over Draft, Cash Credit, House
Building Loan, Trust Receipt (TR), Inland Bill Purchase (EBP), Foreign Bill Purchase etc.
To give security to the banks funds, Investment section takes various documents like DP
notes, Letter of Lien, Registered Mortgage of Collateral Security etc. while sanctioning
these Investments.
Page 2 of 101
BRIEF CONTENTS
PART 1 [Introduction]
PARTICULARS PAGE NO.
Cover Page 1
[1.1] Background of the Study 2
[1.2] Objective of the Study
[1.3] Scope of the Study
3
[1.4] Methodology of the Study 4
[1.5] Limitations of the Study
[1.6] Time period of the Study
5
PART 2 [Company Profile]

Cover Page 6
[2.1] Historical Background 7-8
[2.2] Functions 9
[2.3] Lending Criteria 10
[2.4] Board of Directors 11
[2.5] Organizational Goals 12
[2.6] Organogram of BASIC Bank 13
[2.7] Resource & Capabilities 14-15
[2.8] Human Resources 16-17
[2.9] Monetary Financial Resources 18-21
[2.10] Activities 22-23
[2.11] Functional Division of BASIC Bank 24-29
[2.12] Financial Highlights 30
PART 3 [General Banking] Cash & A/C open
Cover Page 31
[3.1] General Banking 32
[3.2] Cash 33-35
[3.3] Types of Account 36-39
[3.4] Papers/Documents required for opening of INDVIDUAL, JOINT,
PROPRIETORSHIP & PERTNERSHIP Account.
40-41
[3.5] Paper/Documents required for opening of LIMITED COMPANYS
A/C
42-44
BRIEF CONTENTS
[3.6] Paper/Documents required for opening of EXECUTORSHIPS A/C 45-46
[3.7] Paper/Documents required for opening of ADMINISTRATOR, CLUB, SOCIETY,
SCHOOL, COLLEGE A/C
47
[3.8] NGO, JOINT VENTURE, & AIRLINES A/C 48-49
[3.9] Special cases in Account Opening. MINOR A/C 50-52
[3.10] Special cases in Account SUVIVOR 53
[3.11] Account Opening of ILLITERATE PERSON 54
[3.12] Special cases in Account Deceased/Stop Payment 55-56
[3.13] Account closing & [3.14] Flow chart 57
[3.15] Issue of Check Book 58
PART 4 [General Banking] DD, TT, P/O.
Page 3 of 101
Cover Page 59
[4.1] Customer Service 60
[4.2] T.T. 61-62
[4.3] D.D. 63-64
[4.4] PAY-ORDER 65-66
[4.5] IBCA & IBDA 67

PART 5 [General Banking] CLEARING HOUSE
Cover Page 68
[5.1] Clearing House 69-70
[5.2] Operational at Branch Level 70-72
[5.3] Activities of Inter Bank Clearing House at Bangladesh Bank 73-74
[5.4] Inward Clearing at Branch Level (2 nd Clearing House 75-76
[5.5] Precautionary Measures 77
PART 6 [FOEIGN EXCHANGE]
Cover Page 78
[7.1] Definition of Foreign Exchange 79-82
[7.2] Category of Foreign Trade 83
[7.3] Foreign Exchange & Foreign Trade Operation 84-85
[7.4] Exports 86-88
[7.5] L/C 89-90
[7.6] Precautionary Step 91
[7.7] Opening L/C 92
[7.8] Back To Back L/C 93-96
[7.9] Foreign Remittance 97
PART 7 [SWOT ANALYSIS, RECOMMENDATION
& CONCLUSION]
Cover Page 98
[7.1] Swot Analysis 99- 102
[7.2] Recommendation 103

[7.2] Conclusion 104
PART 8 [REFERENCES & BIBLIOGRAPHY]
Cover Page 105
[9.1] References 106-107
[9.2] Bibliography 108
CONTENTS OF THE GRAPH
Page 4 of 101
C-1. Number Of Employees of BASIC Bank 17
C-2. Deposit Mix 18
C-3. Utilized Fund 21
C-4. Category of Foreign Trade 83
C-5. Diagram of issuing L/C & B/B, L/C 96
CONTENTS OF THE TABLE
[TABLE-1] CAPITAL POSITION 8
[T-2] BOARD OF DIRECTORS 11
[T-3] EMPLOYEE STATEMENT 16
[T-4] Financial Highlights of BASIC Bank 30
[T-5] General Banking Activities 32
[T-6] Interest Table of FDR 38
[T-7] Interest Table of BCD 39

[T-8] Account Opening Flow Chart 57
Page 5 of 101
PART-ONE
INTRODUCTION
BASIC Bank Limited
Servingpeopleforprogress
Page 6 of 101
[1.1]
BACKGROUND OF THE STUDY:
BASIC Bank Limited is the state owned schedule Bank. Last year Bangladesh
Bank under look a project to review the list of best performing Bank. BASIC Bank
placed topped in that list.
Banking is one of the most important sectors for a countries wealth building
activities. At present the modern business, industrialization foreign trade almost is
dependent on banks. But now a day the banking sector of Bangladesh is suffering
the default culture, which is the consequence or result of bad performance of most
of the banks of Bangladesh.
U.N. declare
BASIC Bank Limited playing an important role toward the growth and economic
development of Bangladesh.
This study is an attempt to produce a constrictive report performance of BASIC

Bank Limited with special features of General Banking activities.
Last year Bangladesh Bank undertook a project to review the global best
practices in the banking sector and examines in the possibility of introducing these
in the banking industry of Bangladesh. Four 'Focus Groups' were formed with
participation from Nationalized Commercial Banks, Private Commercial Banks &
Foreign Banks with representatives from the Bangladesh Bank as team
coordinators to look into the practices of the best performing banks both at home
and abroad. These focus groups identified and selected five core risk areas and
produce a document that would be a basic risk management model for each of the
five 'core' risk areas of banking.
The five core risk areas are as follows: 1. Credit Risks;
2. Asset and Liability/Balance Sheet Risks;
3. Foreign Exchange Risks;
4. Internal Control and Compliance Risks; and
5. Money Laundering Risks.
INTERNATIONAL YEAR OF MICRO CREDIT 2005
BANGLADESH: PIONEER OF MICRO CREDIT
Page 7 of 101
[1.2]
OBJECTIVES OF THE STUDY:
The main objectives of education are to acquire knowledge. To acquire knowledge

ultimately we must do some practical application in addition to theoretical
knowledge. Through this report, I tried my level best to present my practical
knowledge as find out some objectives.
The main objectives of the Report: Company Background.
Companys major functions.
Financial Highlights.
Types of Account.
Paper/Documents required for opening & closing of various
types of Accounts.
Special cases in Account opening.
Cash receive and payment.
Procedures of T.T, D.D, P/O, I.B.C.A & O.B.C.
Clearing House Inward & Outward Clearing.
Investment.
Foreign Trade.
[1.3]
SCOPE OF THE STUDY:
BASIC Bank Limited is the prominent bank in whole banking sector. BASIC
Bank Limited, commercial bank is under general special guidelines of the central
bank framed for the banking system as a whole and for bank of individual sector.
BASIC Bank Limited is not so old bank but now giving emphasis to create a
constructive and meaningful competition with other private sector banks. Also
called new generation bank. BASIC Bank owners are dividing by shares but this
share is not come into the open share market because Government of Bangladesh
is the owner of total shares. It is the one of highly profitable bank.
[1.4]
METHODOLOGY OF THE STUDY:
The following methodology will be followed for the study: Primary Sources, and
Page 8 of 101
Secondary Sources.
Both primary and secondary data sources will be used to generate this report.
Primary Sources:
Primary data sources are scheduled survey, informal discussion with professionals
and observation while working in different desks.
The primary sources of my information are as below:
Direct observation
Special outlook
Questioning the concerned persons.
Discussion with the other Bankers.
Secondary Sources:
The secondary data sources are annual reports, manuals, and brochures of BASIC
Bank Limited and different publications of Bangladesh Bank.
The secondary sources of my information are as belowAnnual report of BASIC Bank Limited
Desk report of the related department
Other manual information
Different reference books of the library
Some of my course elements as related to this report.
To identify the implementation, supervision, monitoring and repayment practiceinterview with the employee and extensive study of the existing file was and
practical case observation was done.
[1.5]
LIMITATIONS OF THE STUDY:
Objective of the practical orientation program is to have practical
exposure for the students. My tenure was for twelve weeks only, which
was somehow not sufficient. After working whole day in the office it way
very much difficult, it not impossible to study again the theoretical aspects
of banking. On the other hand to prepare my internship report I have faced
some limitations as follows.
To collect data and information, it is a common tendency of any
departments to keep back their departmental data and information.
Page 9 of 101
Unavailability to required published documents.
I observed that one or two unskilled and unfair persons are present in
BASIC Bank; they are not able to teach us various aspects.
[1.6]
TIME PERIOD OF THE STUDY:
BASIC Bank Limited
Main Branch
Bana Shilpa Bhaban
(Ground Floor)
73, Motijheel C/A,
DHAKA-1000
General Banking Division : Eight weeks [Major]
Foreign Trade Division : Four weeks
Total : Twelve weeks
Page 10 of 101
PART-TWO
COMPANY PROFILE
BASIC Bank Limited
Page 11 of 101
[2.1]
HISTORICAL BACKGROUND:
The BASIC Bank Limited (Bangladesh Small Industries and Commerce Bank
Limited) establishes as a banking company under the companies Act 1913
launched its operation in 1989. It was incorporated under the Act on the 2 nd of
August, 1988.The Bank started its operation from the 21 st of January, 1989 .It is
governed by the Banking Companies Act 1913.The Bank was established as the
policy makers of the country felt the urgency for a bank in the private sector for
financing Small Scale Industries (SSIs). At the outset, the Bank started as a joint
venture enterprise of the BCC Foundation with 70 percent shares and the
Government of Bangladesh (GOB) with the remaining 30 percent shares. The
BCCI, the Government of Bangladesh took over 100 percent ownership of BASIC
on 4 th June 1992.Thus there is state-owned. However, the Bank is not nationalized;
it operates like a private bank as before.
Basic Bank is unique in its objectives. It is blend of development and commercial
banks. The Memorandum and Articles of Association of the Bank stipulate that
that 50 percent of loan able funds shall be invested in small and cottage industries
sector.
Steady growth in client base and their high retention rate since Banks inceptions
testify to the immense confidence they repose on its services. Diversified products
both liability and assets sides particularly a wide range of lending products related
to development of small industries and micro enterprises, and commercial and
training activities attract entrepreneurs from varied economic fields. Along with
promotion of products special importance is given to individual clients through
providing personalized services. In fact individuals matter in this Bank. This motto
has been followed for development of clientele as well as human resources of the
Bank.
Coping with the competitive and rapidly changing financial market of the country,
BASIC Bank Limited maintains close connection with its clients, the regulatory,
the shareholders (Government of Bangladesh), other banks and financial
institutions.
Page 12 of 101
A BIRDS EYE VIEW:
YEAR 2006 was a fairly good year for the Bank in the face of severe competition
in the Banking industries and changing global and national economic scenario.
The Board of Directors was happy with the overall performance of the Bank,
particularly for maintaining quality of assets and improving shareholders position,
stability and capital position.
[TABLE-1]: Capital Position.
Authorized Capital: TK. 2,000 million.
Paid up Capital: TK. 1455.30 million.
Total Reserve & surplus up to 2009:
TK. 2468.65 Million.
Total assets: TK. 45699.56 million.
Total Loans and Advances at the end of
year: TK.29261.53 million
The Bank is required to transport 20 percent
of its net profit before tax to Capital Fund as

per the Banking companies Act.
CAPITAL
POSITIO
N
Page 13 of 101
[2.2]
FUNCTIONS:
BASIC BANK LIMITED OFFERS:
Term loans to industries especially to small-scale enterprise.
Full-fledged commercial banking services including collection
of deposit, short-term trade finance, working capital finance in
processing and manufacturing units and financing and
facilitating international trade.
Technical support to Small Scale Industries (SSIs) I order to
enable them to run their enterprise successfully.
Micro-credit to the urban poor linkage with Non-Government
Organizations (NGOs) with view facilitating their access to the
formal financial market for mobilization of funds.
In order to perform the above tasks, BASIC works closely with
the clients, the regularly authorities the shareholders
Government Of Bangladesh (GOB), banks and other financial
institution.
CORPORATE STRATEGY: -
Financial establishment of small units industries and businesses and
facilitate their growth.
Steady and sustainable growth.
Investment in a cautious way.
Adoption of new building technology.
Profit maximization.
Establishing small industries.
Page 14 of 101
[2.3]
LENDING CRITERIA:
Entrepreneur:
Entrepreneur/promoter has to be creditworthy and compete enough to run
the proposed industry.
Viability of the Project:
The project should be viable from organizational, technical, commercial,
financial and economic points of view.
Technical Viability:
The project should be technically sound and environment friendly.
Building should be well planned and well constructed.
Commercial viability:
Market prospect potential for the product has to be fully assured at
competitive prices.
Marketing channel for the product should be accessible to the
entrepreneurs.
Financial Viability:
There should be reasonable debt equity ratio as determined by the a bank
on individual case basis.
Debt service coverage ratio should be at least 2.5 times at the optimum
level of production.
IRR should preferably be not less than 20 percent.
Economic viability:
The project should ensure benefit to the national economy and create
sufficient employment opportunity.
[2.4]
Page 15 of 101
BOARD OF DIRECTORS:
As stated earlier the government holds 100 percent ownership of the Bank. The
Government of Bangladesh appoints all the Directors of the Board. The secretary
of the Ministry of Industries is the Chairman of the Bank. Other Directors of the
Bank are high Government and central Bank executives.
The Managing Director is an ex-officio member of the Board of Directors. There

are at present 7 Directors including the Managing Director.
BOARD OF DIRECTORS BOARD OF DIRECTORS BOARD OF DIRECTORS
[1]
Dr. Nurul Amin
Chairman
BASIC Bank Limited
&
Secretary
Ministry of Industries
Govt. of the Peoples
Republic of Bangladesh.
[2]
Mr. Musharraf
Hossain Bhuiyan
Director
BASIC Bank Limited
&
Head Office
Dhaka.
[3]
Mr. Mohammed
Tareque
Director
BASIC Bank Limited
[4]
Mr. S.R.Osmani
Director
BASIC Bank Limited
&
Chairman
Bangladesh Small and
Cottage Industries
Corporation (BSCIC).
[5]
Mr. Md. Ehasanul
Hoque
Director
BASIC Bank Limited
&
Derector Geneneral,
Chief Advisors Office
[6]
Mr. Asaduzzaman Khan
Director
BASIC Bank Limited
&
Executive Director
Bangladesh Bank.
Mr. AKM. Sajedur Rahman
Managing Director
BASIC Bank Limited.
Head Office
Dhaka.
[Table 2]: Board of Directors.
ORGANIZATIONAL STRUCTURE:
NAME OF BOARD OF DIRECTORS:
Page 16 of 101
To achieve its organizational goals, the Bank conducts its operations in accordance
with the major policy guidelines laid down by the Board of Directors, the highest
policy making body. The management looks after the day-to- day operation of the
Bank.
MANAGEMENT:
The Managing Director heads the management. The two General Managers and
Departmental Heads in the Head office assist him. BASIC is different in respect
hierarchical structure from other banks in that it is much more vertically integrated
as far as reporting to the Chief executive is concerned. The Branch Managers of
the Bank report direct to the Managing Director and, for functional purpose, to the
Heads of Departments. Consequently, quick decision making in disposal of assess

is ensured.
[2.5]
ORGANIZATIONAL GOALS:
BASIC BANKS AMBITIONS:
BASIC Bank Limited dedicated their service to the nation through
active financial participation in all segments of economy, small
industries, trade, commerce and service sector etc.
The Banks main manifest to progress as an institution par excellence to
customer satisfaction.
Global Banking has change rapidly and BSIC as worked hard to adapt to
these changes.
To pay a vital role in human development and employment generation.
To undertake project promotion to identify profitable areas of investment.
To search for newer avenues for investment and develop new products to
suit such needs.
To establish linkage with other institution which are engaged in financing
micro enterprise.
BASIC keeping pace with the changing environment.
To corporate and collaborate with institutions entrusted with the
responsibility of promoting and aiding SSI sector.
Deep commitment to the society and growth of national economy.
[2.6] [ORGANOGRAM OF BASIC BANK]

BOARD OF DIRECTORS
Non-Clerical Staff:
Messenger Staff
Security Staff
Assistant General Manager.
Deputy General Manager
International
Division
Credit
Division
Manager
Deputy Manager
Assistant Manager
Senior Officer
Officer
Assistant Officer
Clerical Staff:
Banking Staff
Go-down Staff
CHAIRMAN
Page 17 of 101
[2.7]
RESOURCE AND CAPABILITIES:
MANAGING DIRECTOR
GM
(Operation)
GM
(Admin)
GM
(Audit & Inspection)
Industrial
Credit
Division
Central
Accounts
Establishment
&
Branch Control
Personal
Division DEVELOPMENT
Page 18 of 101
BASIC Bank is a well prepared to and capable of meeting the demand for a broad
range of banking services .It has got adequate resources, both human and physical,
to provide the customers with the best possible services.

PHYSICAL AND TECHNOLOGICAL RESOURCES:
A great deal of investment for developing the physical resource base of the Bank
has been made. BASIC has its presence in all the major industrial and commercial
hubs of Bangladesh in order to cater to the needs of industry and trade. At present,
there are twenty-seven conveniently located branches in all over Bangladesh.
There are ten branches in the capital city Dhaka, Twelve in Chittagong, and Six
in Narayanganj and one each in Narshingdi, Rajshahi, Saidpur, Bogra, Khulna,
Jessore, Sylhet, Moulovibazhar, Barisal, Khatunganj, Chawmuhoni, and Comilla.
MAJOR FEATURES AND BENEFITS OF THESE
BRANCHES:
Global banking has changed rapidly and BASIC as worked hard to adapt to
these changes.
The banks main manifest during force for the banks progress as an
institution par excellence to customer satisfaction.
Fully computerized accounts maintenance.
Well decorated and air conditioned facilities.
To pay a vital role in human development and employment generation.
A fully operational computer network which is currently being
implemented .The work of Local Area Network (LAN) and Wide Area
Network (WAN) installation having reliable and secured communication
between the branches and the Head Office is in progress to facilitate Any
Branch Banking and ATM Services.
Money counting & Money checking machine making cash transactions

easy, security and prompt.
The bank look forward with excitement and a commitment to bring greater
benefits to customers.
Eighteen out of twenty seven branches are authorized dealers of foreign
exchange. This facilities speedy disposal of transaction of export and
import trades.
A group of professional bankers to render personalized services.
BASIC dedicated their service to the nation through active financial
participation in all segments of economy, small Industries, trade, commerce
and service sector etc.
BASIC keeping pace with the changing environment.
Deep commitment to the society and the growth of national economy.
UPCOMING BRANCHES:
Page 19 of 101
BASIC has already undertaken a massive Branch expansion program that would allow
BASIC to establish another two more Branches in key location of the country. The program
is now awaiting Bangladesh Bank clearance and approval some of the new upcoming
branches are listed below.
o Rampura brunch
o Tangail branch
BRANCH NETWORK OF BANGLADESH:

At present, there are twenty-eight conveniently located branches in all over
Bangladesh. These Branches are given below: DHAKA [Ten Branches in the capital city]
CHITTAGONG, [Six Branches in the commercial city]
NARAYANGANJ, [Two Branches in]
NORSHINNGDI, [One each in]
RAJSHAHI,
SAIDPUR,
BOGRA,
KHULNA,
JESSORE,
SYLHET,
BARISAL,
CHAWMUHONI, AND
COMILLA.
[2.8]
HUMAN RESOURCES:
Page 20 of 101
BASIC bank has a well-diversified pool of human resources, which is composed
of people with high academic background. Also, there is a positive demographic
characteristic most employees are comparatively young in age yet mature in

experience .As of 31 st December 2003 the total number of employees is 537.
[Table 3]
TRAINING:
Interactive training on a regular basis, is imported to employees of both
management and non-management levels to meet the challenges in the banking
industry and to help employees adapt to changes and new working conditions.
During he year 2003, a total of 164 employees of the Bank were imparted training
in various fields. Out of them 6 employees participated in training course abroad.
Chart: 1. Number of Employees:
Number & Education level
Of Employees
Employees Category Level of
Education
Age
Managem
ent
Suppo
rt
Staff
Gradua
te
Post
Gradua
te
Belo
w 40
Above
Number 537 330 127 410 427 110
Page 21 of 101
FRESH RECRUITMENT:
The Bank follows strict recruitment policy in order to ensure that only the best
people are recruited. The Bank, so far, has recruited four batches of entry-level
management staff, all of who has excellent academic background.
[2.9]
MONETARY /FINANCIAL RESOURCES:
Page 22 of 101
Like any other financial intermediaries, BASIC is no exception in performing its
core functions viz, mobilization of fund and utilizing such und for profitable
purpose.
Mobilization of Fund:
The main sources of fund for BASIC are: a) Deposit.
b) Borrowing.
Chart:2. Deposit Mix in 2006:

DEPOSIT:
Deposit is the mainstay for BASIC Banks sources of funds. The following
includes the usual types of deposits of the Bank:
Page 23 of 101
Current Deposit-
Different group of industrial customers encouraged to open
current deposit account includes: commercial, small scale
industry, medium scale industry, and large-scale industry.
Minimum requirements for current deposits worth TK 50,000,
and maximum amount can be deposited up to TK 10,00,00000.
Savings Deposit-
General clients are targeted group of savings deposit along with
the industrial customers. Savings deposit has no particulars to
deposit minimum, and maximum. But depositors used to get
deducted facilities for drawing money from the deposited figure.
Term Deposit-
Depositors with a minimum TK10, 000 are given term deposit
facilities for at least six months by means of highest interest
rates. Fix deposit term valid up to six years, and then afterwards
depositor can redeposit the sum. Another form of term deposit
called short-term deposit (STD), a minimal rate of interest given
to deposits whereby depositors can withdraw the after term over.

Both for Fixed Deposit (FDD), and Short Term Deposit (STD),
all type of commercial, and industrial customers are given
preferred services to open a term deposit along with a credit &
commerce account.
DEPOSIT REQUIREMENTS:
In order to stop money laundering Bangladesh Bank issued new agenda for
depositors that is strictly followed by BASIC Bank:
Page 24 of 101
Current Account-
Individual depositors name
Passport size photograph
Income statements
Nationality
Nominee
Referee
Name of the organization
Tax identification number, and
Source of income
Savings account-
Depositors name
Passport sized picture

Income statements
Nationality
Nominee
Referee
Name of the organization
Tax identification number, and
Source of income
Limited companies Account-
Limited companies rules
Constitutional documents
Specimen of authorized persons signature
Limited company accounts memorandum
Articles of association
Power of attorney
Board of directors resolution
Certificate of incorporation
Certificate of commencement, and
List of directors.
Club Society Account-
Clubs or societys board resolution
Membership no
Name of board members, and

Constitutional rules.
Page 25 of 101
BORROWING:
Apart from deposit BASIC receives funds fromBangladesh Bank.
Asian Development Bank.
Authorized agencies.
KFW (Kreditanstalt fur Wieder-aufbau, credit institution for
reconstruction), a German Bank.
UTILIZATION OF FUND:
BASIC utilizes its funds in accordance with its organizational goals and corporate
strategy. Main use is for lending to industrial and trade sectors. Maintenance of
cash and statutory liquidity reserve with the Bangladesh Bank covers 20 percent
demands and time liabilities. Placement of funds in Nostrums Accounts to handle
foreign trade and investment in money market is also done as usual.
Chart:3 Utilized Fund:
Page 26 of 101
[2.10]
ACTIVITIES:
INDUSTRIAL CREDIT:
BASIC Banks services are directed towards promotion and development of the
entrepreneurs in the small industries sector. Its exposure to small industries sector
accounted for 57.21% of the total loans and advances. A small; industry, as per
industrial Policy 1999 has been defined as an industrial undertaking whose total
fixed investors is less than Tk. 100 million. In 2003, total outstanding industrial
loans including term and working capital stood at Tk.6252.50 million, compared
with 2002 Taka of 4653.55 million. It registered a growth of 34.36% over the
previous year. Total outstanding term loans stood at Tk.2273.77 million as on
December 31, 2003. It was compared with previous year growth at 40.75%.
During this year 187-term loan were sanctioned, where 74 projects were new. As
on 31 December, 418 projects were in the portfolio of the bank. The textile sector
including garments being one of the major contributions to national economy
dominated the loan portfolio of the bank. Other sectors financed include
engineering, food and allied industries; chemicals, pharmaceuticals, paper, board,
printing, packaging, glass, ceramics, and other non-metallic goods and jute
products. Recovery rate of project loan was 88 percent.
COMMERCIAL CREDIT:
Page 27 of 101
BASIC Bank lends support towards development of trades, business and other
commercial activities in the country. Short other term trade finance and other nonfund services get full attention in the Bank. The Bank offers a complete range of
services to the exporters and importers by extending various facilities. The Bank
provides cash credit for local trade, export cash credit, packing credit, local and
foreign bills purchase facilities. As on 31 December 2003, total amount
outstanding in respect of these facilities stood at Tk.3029.70 million. This includes
cash credit for local trade; export cash credit including packing credit, local bills
purchase and foreign bills purchase etc.
MICRO CREDIT:
BASIC launched a Micro Credit Scheme in 1994. Micro Credit Scheme provides
support for the poor for generation of employment and income on a sustainable
basis, particularly in urban and suburban areas. The Bank follows three systems of
credit delivery. These are:
Lending to the NGOs who on-lend to their members. At present there are 17
such NGOs.
Lending direct to the target groups or ultimate borrowers under the Banks
own management.
Lending direct to the member-borrowers and NGOs providing non-financial
services like group formation and monitoring and supervision fee. As at the
end of 2003, a cumulative amount of micro credit of TK. 181.00 million was
disbursed. Recovery rate during this period remained at a satisfactory rate of
98.00 percent.
FOREIGN TRADE:
The Bank handles foreign trade in which it has a comparatively large share despite
its small size. BASIC provides various facilities related to L/C and post import
finance like loan against imported merchandise (LIM) and loan against trust
receipt (LTR) to the importers and back to back L/C and pre-shipment finance
facilities like export credit, packing credit and foreign bills purchase (FBP) to
exporters. So far the Bank has established correspondence relationship with as
many as 11 foreign banks in order to facilitate foreign trade. Handing of import
business grew from Tk. 8930.50 million in 2003. Export business handled by the
Bank also increased of Tk.6523.00 million in 2003.
The Bank became a proud member of SWIFT (Society for Worldwide Inter-bank
Financial Telecommunication) that would pave the way to achieving uninterrupted
connectivity in foreign exchange business and fund transfer.
OTHER ACTIVITIES:
Page 28 of 101
The Bank provides services floor remittance, underwriting, guarantee, public
offering of shares etc. The Bank also provides funds to investment and leasing
companies. The Bank has recently created a venture capital fund for equity
support to innovative but risky projects.
[2.11]
FUNCTIONAL DIVISION OF BASIC BANK:
The bank has 28 branches, 6 Zones spread throughout the country. At the head
office level there are 12 divisions most of which have more than one functional
department which are headed by DGM and Training institute by a director with
the rank of CGM.
THE NAMES OF THE DIVISIONS ARE:

Personnel Division (PD).
Establishment & Common Service Division.
Human Resources Development Division.
Secretarys Division (Aboard Division).
General Credit Recovery Division.
Industrial development finance division.
International division.
Control development & co ordination division.
Audits an inspection division.
Planning and research and statistics division.
Computer system and procedures division. And
Law division.
These are the different division of BASIC bank that are serving their services to
the bank as well as to the country with great efforts according to their respective
fields.
FUNCTIONS OF SOME IMPORTANT DIVISIONS:
PERSONNEL DIVISION (PD):
This division is headed by a D.G.M. Under this division, there are five
departments namely: -
Page 29 of 101
1. Recruitment department,
2. Promotion department,
3. Transfer department,
4. Records department, and
5. Salaries and welfare department.
Their functions are as follows: -
Frame personnel policies of the bank and implement these in
harmony with the overall objectives and policies of the bank and
the Government.
Ensure recruitment, promotion, transfer and posting of all
officers and staff of the bank in conformity with policies, rules
and procedures of the bank and the government.
Maintain personnel records the officers and staff and update
those for ensuring appropriate personnel actions such as
promotion, transfer training etc.
Deal with compensation package of the employees that include
such items as salaries T.A. D.A., house rent, and medical bills.
Deal with sports cultural and welfare activities for the
employees.
Carry put overall manpower planning form the bank assess the
need for recruitment, training and development and sources,
methods, and media of training, maintaining and update various
types of data on training and skill of the employees.
Cater training needs of the various categories of the employees

of the bank.
Organization workshop, seminar, symposium and other
programs for developing human resources of the bank.
ESTABLISHMENT AND COMMON SERVICE DIVISION:
Under this division, there are 4 departments namely: 1. Dead stock & Equipment department,
2. General transport pool,
3. Security department, and
4. Divisional administration department.
This division performs the following functions: Procure, supply and repair furniture fixture and other office
equipment.
Collect banks necessary articles security papers etc.
Page 30 of 101
Distribute all sorts of stationary.
Dispatch and receive mail, telephone, telegram telex etc.
Maintain and control vehicles and purchase spare parts tires, tubes
etc. and when necessary.
Deal with divisional staff administrative matters.
HUMAN RESOURCES DEVELOPMENT DIVISION:
Human resources development division performs following

functions: Frame human resources development policies of the bank and
implement these in harmony with the overall objectives and polices
of the bank and government.
Carry out overall manpower planning for the bank assesses the need
for recruitment training and development and sources.
Methods and media of training maintain and skill of the employees.
Cater training needs of the various categories to the employees of the
bank.
BOARD DIVISION:
The Board divisions functions and activities are as follows: Performing ass duties relating to MD/ Review committee/Board of
Directors meeting.
Supervising all functions of MDs secretariat including appointment
with visitors, maintaining liaison with government, autonomous
bodies and other financial institutional.
Dealing with matters relating to fund management bill purchase and
utilization of surplus fund, credit budgeting banks and maintenance
of the records of comparative positions of all financial institutions.
GENERAL CREDIT RECOVERY DIVISION:
It is also one of the vital divisions in the head office and headed by a DGM.
General Credit Monitoring department are:
There are two departments namely: -
Page 31 of 101
1. Advance department.
2. Recovery department.
This division performs the following functions: Co- ordinate and supervise all credit policies and operation of the
bank except rural credit and industrial development credit.
Prepare, monitor and review the central credit budget of the bank.
Supervise all classified advances other than micro credit and
industrial credits.
Exercise special control over jute advances of all branches and
zones.
Take necessary steps for effective recovery efforts.
INDUSTRIAL DEVELOPMENT & FINANCE DIVISION (IDFD):
Under this division there are 4 departments namely: 1. Appeal & sanction department.
2. Implementation department.
3. Follow up & recovery department.
4. Accounts statistics & data feeding department & special
credit department.
IDFD performs the following functions: Appraisal industrial projects and process for sanction,
Inspect, supervise and monitor implementation of projects,

Follow up and supervised use of loans, and
Plan and undertake recovery drives.
INTERNATIONAL DIVISION (ID):
ID performs the following functions: Preparation of the work plan program of the division and distribution
of the same among different departments of the division for action or
information,
Page 32 of 101
Accounts and reconciliation activities of the foreign bank account
and reconciliation of account section,
Import and export finance activities of the import financing section
and export financing section, and
Foreign aid/loan/barter/grant operation activities of the aid and
barter financing section.
CONTROL DEVELOPMENT & CO ORDINATION DIVISION:
This division is responsible for issuance of operational guidance and
instruction to the branches including supply of the operational manual
where required. It also ensures maintenance of the existing systems and
procedures in respect of general banking by the branches.
AUDIT & INSPECTION DIVISION:
Audit & Inspection division is headed by a DGM. There are 6

sections under this division.
This division performs the following functions: Plan and prepare programs for auditing branches.
Select audit these and give audit programs to them for
implementation.
Supervise the activities of the audit team.
Conduct special audit of branches for detection of fraud & forgeries.
Scrutinize audit reports.
Submit consolidated compliance report received from branches to
the commercial audit department ministry of finance and Bangladesh
bank.
PLANNING RESEARCH & STATISTICS DIVISION (PRSD):
It has 4 departments namely: 1. Business & mgmt. Planning department.
2. Research & publication department.
3. Statistics department. and
4. BASIC bank central library.
The functions of PRSD are given following: Identify problem /gap areas of operation and management for the
purpose of conducting research.
Page 33 of 101
Appraise system and procedures for updating.

Evaluate the progress of the bank periodically.
Develop new services & review existing ones for improvement.
Prepare annual reports of the bank.
COMPUTER SYSTEM & PROCEDURE DIVISION (CSPD):
This division has 4 sections these are as follows: 1. Systems and programming section.
2. Computer operation section.
3. Data encoding section. And
4. Banking mechanism section & data control section.
The functions of this division are given below: Identify the computerization needs of the bank.
Co ordinate with other divisions.
Plan oration of the banks computer with optimum benefit.
LAW DIVISION:
Law division has two performing wings. They are: 1. Follow-up and suit filling wing.
2. General and monitoring wing.
Law division performs overall supervision of following: Follow- up and suit filling activities of the concerned
departments.
General and monitoring activities of the concerned departments
pertaining to counseling service to the top management checking
legal prints, drafting lease deeds, checking and verifying

deferent forms of the bank.
[2.12] [Table-4]
Particulars 2008 2009
Authorized capital 2,000.00 2,000.00
Paid-up capital 1309.77 1455.30
Capital Surplus / (deficit) 1672.82 2468.65
Total Assets 4666.03 45699.56
Deposits 38368.23 34501.69
Total Loans and Advances 27269.13 29261.53
Long Term Debt. 1708.4 2875.16
Placement & Investment 15659.03 12244.91
Profit after tax and provision 549.86 648.85
Tax Paid 3538.01 4225.37
Export 22270.87 19887.70
Import 27359.77 33976.6
Loan to Deposits liabilities 71.07 84.81
After tax return on average assets (ROA) 1.30 1.41
Net Profit to Gross income 10.87 12.57
FINANCIAL HIGHLIGHTS OF
BASIC BANK LIMITED:
2005 & 2006 (Million in TK.)
Page 34 of 101
PART-THREE
GENERAL BANKING
OPERATION OF
BASIC Bank Limited
Page 35 of 101
[3.1]
GENERAL BANKING:
General Banking is the most important and common part of any bank. Cause
majority transaction is held in this section. This section has four (4) parts as
follows:
The structure of General Banking as follows:
[Table-5]
GENERAL
BANKING
ACTIVITIES CLEARING
HOUSE
CUSTOMER
SERVICE
DD,TT, & P/O.
ACCOUNT
OPEN
PROCEDURE
CASH RECEIVE
&
PAYMENT
Page 36 of 101
[3.2]
CASH:
Cash section demonstrates liquidity strength of a bank. It also sensitive as it deals
with liquid money. Maximum concentration is given while working on this
section. As far as safety is concerned special precaution is also taken. Tense
situation prevails if there is any imbalance in the case account.
CASH SECTION:
The function of this unit is to receive and payment of cash. The vault limit cash
limit of the branch is TK.15000000 and TK.1000000 respectively. The head teller
is allowed to en cash check up to TK.100000 with her own signature. If additional
cash is required then the second man of the branch makes arrangement on request.
There are one chief officer, one senior officer, and two Banking officers in this
department.
Operation of this section begins at the banking hour. Cash officer begins her/his
transaction with taking money from the vault, known as the opening cash balance.
Vault is kept in a very secured room. Keys to the room are kept under control of
cash officer and branch in charge. The amount of opening cash balance is entered
into registered. 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.
CASH RECEIPT:
At first the depositor fill up the Deposit in the Slip. For saving
account and current account same Deposit in Slip is used in this
Branch.
After filling the required deposit in slip, depositor deposits the
money.
Officers at the cash counter receives the money, count it, enter
the amount of money in the register kept at the counter, seal the
deposit in slip and sign on it with date and keep the banks part
of the slip. Other part is given to the depositor.
All deposit slip of saving; Current and STD A/C are maintained
in accounts section.
Page 37 of 101
CASH PAYMENT:
Cash payment of different instruments is made in the cash section. Procedure
of cash payment against check is discussed below elaborately. Cash payment
of check includes few steps.
First of the entire client comes to the counter with the check and give it to
the officer in charge there. The officer checks whether there are two
signatures on the back of the check and checks his balance in the
computer. After that the officer will give it to the cash in charge.
Then the cash in charge verifies the signature from the signature card and
permits the officer in computer to debit the clients account by giving
posting. A posted seal with teller number is given.
If the signature matches with the one given previously then the teller will
make payment keeping the paying check with him while writing the
denomination on the back of the check.
Cash paid seal is given on the check and make entry in the payment
register.
There are few things that shall be scrutinized and checked before
making payments.
Name of the drawer.
Account number.
Specimen signature.
The validity of the check and make it sure that it is not post dated or
undated.
The amount in words and figures are same.
CASH BALANCE CALCULATION:
The officer in charge of cash section does the calculation and then Sub-manager or
authorized officer will check the balance and sign in the cash balance book. The
balance is maintained in the balance book. Opening balance of current day is the
closing balance of the previous day. Total receive of the current day is added with
the opening balance and total payment is deducted for calculating the closing
balance or cash balance.
Page 38 of 101
CASH PACKING AND HANDLING:
Cash packing and handling needs a lot of care as any mistake may lead to disaster.
Packing after banking hour when the counter is closed, cash are packed according
to denomination. Notes are counted several times and packed in bundle, stetted
and stumped with initial.
TELLER CUSTOMER RELATIONSHIP:
In a bank a person who delivers and receives cash from the cash counter is known
as teller, a customer meets most of the time in a bank with a teller on the counter.
So teller should hold certain quality.
Should be friendly.
Provide prompt service.
Be accurate in his task.
Be carefully.
To have endless patience.
Be smart.
In short, a teller should be efficient otherwise he has to pay.
[3.3]
TYPES OF ACCOUNT:
Keeping an eye on the needs of the customers and to ensure their full satisfaction
BASIC Bank has a full range of deposit products.
There are mainly five types of Accounts are as follows: 1. Savings Deposit (SB)
2. Current Deposit (CD)
3. Short Notice Term Deposit (STD)
4. Fixed Term Deposit (FTD)
5. Bearer Certificate of Deposit (BCD)
Page 39 of 101
1. SAVINGS BANK DEPOSIT ACCOUNTS (S.B):
Savings Bank Deposit account may be opened in the name of adult
individual or jointly in the names of two or more persons payable either or
both or all them or to the survivor with total satisfaction of Bank.
These are interest bearing deposit accounts. (Present interest rate 5.00% in
BASIC Bank Ltd.
Savings Bank Account shall not be allowed to be overdrawn.
Saving Bank Account must not be allowed to be conducted as Current
Account.
The drawings are restricted in respect of both the amount of withdrawal and
the frequency thereof so that the payment of interest does not become non-
compensating for the banker.

No interest will be paid in a Savings Bank Account for the month in which
withdrawals have been made more than twice a week or over 25% of the
balance of his/her accounts without notice. For withdrawal of sum
exceeding 25% of the balance, 7 days notice in writing should be given to
the bank.
Interest shall be calculated on the minimum balance at the credit of an
account between the close of the 5 th day and the last day of the month.
Interest will be applied half yearly on 30 th June & 31st December at the
prescribed rates as advised by Head Office
These accounts intended for individual savings and are not suitable for
business concerns that require frequent withdrawals.
Bank may however refuse without assigning any reasons to open savings
account by any body.
The Bank reserves the right to close any Savings Bank Deposit account
with prior notice.
2. CURRENT DEPOSIT ACCOUNT (C.D):
A Current Deposit Account may be opened in the name of person(s) having
contractual capacities. Any individuals, firm, company, club, association,
and corporate body may open a Current Account.
Drawings are allowed on demand from such an account without any
restriction within the funds available in its credits.
No interest is payable on the balance of current accounts.
Bank may however refuse without assigning any reasons to open current
account by any body.
The Bank reserves the right to close any current account with prior notice.
Page 40 of 101
3. SHORT TERM DEPOSIT ACCOUNTS (STD):
Short Term Deposit Account (STD) are opened usually by Corporations,
Banks and Financial Institutes etc.
These deposits are withdrawn able on 7 days notice by the account
holder(s). Withdrawal is allowed after the expiry of notice period.
Interest on such deposits are payable at the rate determined by Head Office
from time to time. (Present interest rate on STD A/C is 3.00% in BASIC
Bank Ltd.)
Interest shall be calculated on daily product basis and applied half yearly at
end of June and December or when an account is closed.
4. FIXED TERM DEPOSITS (FTD):
Fixed Deposits may be opened by one adult individual singly or by more
than one adult individual jointly or by any Government/Private
/Autonomous or other organization.
These deposits shall be opened for a fixed period ranging from three
months to two years.
Interest on FDR shall be payable only after maturity of the FDR along with
the principal.
Following rate of interest on FDR is prevailing in BASIC Bank Limited.
Following rate of interest on FDR is prevailing in BASIC Bank
Limited.
[Table-6]
Period Interest Rate
3 Months and above 5.75%
12 Months and above
6.25%
Payment of FDR will be made on demand after expiry of the maturity
period on presentation of FDR duly discharged by the depositor(s).
Rate of Interest on
F.D.R.
Page 41 of 101
For encashment of FDRs before maturity, if FDR is encased before expiry
of 3 months no interest would be given. Interest for 3,6 or 12 months, as the
case may be given if encased after expiry of such period but before
maturity.
(Circular no. BASIC/HO/ICD/2000/7583, Dated 14-11- 2000)
Each time when FDR is opened, it shall be considered as a separate
contract.
Fixed Deposits are neither transferable nor negotiable.
5. BEARER CERTIFICATE OF DEPOSIT (BCD):
From 1983 a saving scheme named Bearer Certificate of Deposit (BCD)
has been introduced under circular of Bangladesh Bank to bring the black
money in investment cycle. BCDs are issued for multiples of
Tk.50, 000.00 such as Tk.1, 00,000.00, Tk.1, 50,000.00 and so on for
unlimited amount. No signature is required to issue a BCD. The holder is
owner of BCD.
Who can get it issued: Any individual without disclosing his/her identity
and without Opening any account.
Period: These deposits shall be opened for a fixed period ranging from
three months to two years.
Interest:
Interest rate is 1% bellow as that of FDR.
Following rate of interest on BCD is prevailing in BASIC Bank Limited.
[Table-7]
Period Interest Rate
12 Months and above
6.25%
Rate of Interest on
B.C.D.
Page 42 of 101
[3.4]
Papers /Documents required for opening of
INDIVIDUAL/JOINT, PROPRITORSHIP, & PARTNERSHIP ACCOUNTS:
INDIVIDUAL /JOINT:
Two copies of passport size photograph of the Account holder(s)
or Person(s) who will operate the Account duly attested by
acceptable introducer,
Passport,
Introductory Certificate from Employer,
Introductory Certificate from renowned person of the society
acceptable to Bank/Financial Institutions, and
TIN Number (If applicable).
CAUTIONS:
In Account opening form Name, Present & Permanent address,
Date of birth, Age of account holder, Fathers Name, Mothers
Name, Husbands Name in case of married lady must be filled up
properly in Account opening form.
The Introducer of the proposed new account must be maintained
an account with the branch for at least one year and the account
must have good transactions over the last year.
The details of the identity, address and business of the new
account holder must be verified and the branch In Charge should
be satisfied about the person/firm/companys credibility.
A letter of thanks shall be sent to the introducer and to the account
holder on Banks Standard Form.
PROPRIETORSHIP FIRM:
or person(s) who will operate the Account duly attested by the
introducer.
Certified copy of valid Trade License from the Municipality/ City
Corporation/Union Parishad.
Page 43 of 101
Passport/ Introductory Certificate from Employer /Introductory
Certificate from renowned person of the society acceptable to
Bank/Financial Institutions.
CAUTIONS: Same as Joint/Individual Account.
PARTNERSHIP FIRM:
or person(s) who will operate the Account duly attested by the

introducer.
Certified copy of valid Trade License from the Municipality/ City
Corporation/Union Parishad.
Certified copy of the Registration Certificate of Partnership Deed
duly attested by Notary Public in case of registered firm.
Partnership Account Agreement.
Resolution signed by all partners to open the A/C.
[3.5]
LIMITED COMPANIES ACCOUNTS:
LIMITED COMPANY:
Two copies of passport size photograph of the Account holder(s) /
person(s) who will operate the Account duly attested by the
introducer.
Page 44 of 101
Certified copy of Memorandum & Articles of Association by

RJSC.
Certified copy of Certificate of Incorporation by RJSC.
Certified copy of Certificate of Commencement of Business (in
case of Public Limited Company).
Up to date list of Directors.
Certified copy of Resolution of the Board of Directors for opening
& operation of the Account.
LIMITED COMPANY:
A company registered under Companies Act, 1994
has a legal entity apart from its shareholders.
A Company has been defined as an artificial person
created by law with a perpetual succession and a
common seal.
A Company may, therefore, be defined as a separate
legal person brought into existence by registration or
incorporation under The Company Act, 1994 in
pursuance of several individuals agreeing to form
themselves in to a Company.
Page 45 of 101
PRIVATE LIMITED COMPANY:
Private Limited Company means a company, which by its articles
restricts the right to transfer the shares.
Minimum number of its members is 02 and maximum number
may be 50 not including persons who are in the employment of the
company.
Prohibits any invitation to the public to subscribe for the shares, if
any, or debentures of the company can launch the business after
getting Certificate of Incorporation.
Certificate of Commencement of Business is not required here.
PUBLIC LIMITED COMPANY:
Public Limited Company means a company incorporated under
this Act, which is not a Private Limited Company.
In Public Limited Company has the following specialties by its
articles
Minimum number of its members is 07 and maximum number
may be equal to number of shares.
Shares are transferable.
May invite to the public to subscribe for the shares, if any, or
Debentures of the company.

Certificate of Commencement of Business is required to launch
the business after getting Certificate of Incorporation.
TRUST:
introducer.
Up to date list of Members of the Trustee Board.
Certified copy of Deed of Trust certified by the
Chairman/Secretary of Trustee Board.
Page 46 of 101
Certified copy of Resolution of the Trustee Board for opening &
operation of the Account.
[3.6]
Papers /Documents required for opening of EXECUTORSHIPS
ACCOUNTS:
EXECUTOR:
An executor is a person appointed by a testator for execution of the last will leave
by him. Upon production of probate of the will the executor should be allowed to
close the deceaseds account and deal with the credit balance as per terms and
conditions of the will, affecting the account.

In case of credit balance of the deceaseds account, it is preferable for the banker
that the executor opens the required account as an executorships account instead of
an account in the personal name of the executor.
If there is more than one executor the account should desirably be opened under
the joint signatures of all the executors through they have powers individually and
a definite arrangement made whether operations on the account will be done by
one executor singly or jointly by all, by two or more of them.
Where there is a debit balance in the account arrangement should be made with the
executor for adjustment there of as soon as the executor is able to realize sufficient
of the deceased s assets.
The banker should not allow any transfer of the deceaseds assets. The banker
should not allow any transfer of the deceaseds funds to the personal account of
the executor nor he should allow the executor to raise any personal loan against
security of the deceaseds property. Otherwise, he will be held liable for the
misuse.
The executor is the legal representative of the testator for all purposes and all
property of the deceased vest in him. The executor has power to sue and recover
debts as the deceased had when living as well as to dispose of property and incur
expenses as he may think fit and necessary for administration of the estate subject
to restrictions, if any, as laid down in the will and the probate.
On the death of the executor his duties devolve on his executor and where there is
more than one executor the deceaseds power vests in his survivor co-executor
Page 47 of 101
unless otherwise provided for in the will. An executor cannot normally delegate
his power except to one of them where there is more than one.
Required Paper for an executorships account: Two copies of passport size photograph of the executor / person(s) who
will operate the Account duly attested by appointed by the testator for
execution of the last will leave by him.
Will deed executed by a testator for execution of the last will leave by him
in the front of 02 male or 01 male & 02 female to operate the account.
Will probate accepted by Court.
Power of Attorney executed by a testator for execution of the last will
leave by him favoring the executor in the front of 02 male or 01 male &
02 female to operate the account.
Passport/ Introductory Certificate from Employer /Introductory Certificate
from renowned person of the society acceptable to Bank/Financial
Institutions.
CAUTIONS:
Same as Joint/Individual Account.
The banker should not allow any transfer of the deceaseds assets.
The banker should not allow any transfer of the deceaseds funds to
the personal account of the executor nor he should allow the

executor to raise any personal loan against security of the
deceaseds property.
Otherwise, he will be held liable for the misuse.
Page 48 of 101
[3.7]
ADMINISTRATOR & CLUB/SOCIETY/SCHOOL/COLLEGE
ACCOUNTS:
ADMINISTRATOR:
An administrator is appointed under the authority of a court of competent
jurisdiction where the deceased appointing an executor leaves no will. The
administrator has substantially the same duties and powers as those of the
executor; they differ mainly in the manner of their appointment. While the
executor derives his authority from the will immediately after the testators death,
the administrator derives his authority from the letters of administration, which he
produces to the banker for inspection as an executor produces probate of the will
for the purpose of a bank account. The administrator is also the legal
representative of the deceased with powers to sue, recover debts and incur
expenses. But he may not mortgage, charge or transfer any property without prior
permission of the court granting the letters of administration. On the death of an
administrator the surviving administrator, if any, acts, but on the death of the last
administrator fresh letter of administrator is necessary.

CLUB/ SOCIETY/SCHOOL/COLLEGE ETC:
Two copies of passport size photograph of the Account holder(s) or
person(s) who will operate the Account duly attested by the introducer.
Memorandum & Articles of Association duly certified by the
Chairman/Secretary.
Bye Laws & Regulation/ constitution duly certified by the Chairman or
Secretary.
In case of cooperative society Bye Laws & Regulation/ constitution.
Duly certified by Cooperative Officer.
Resolution of Management Committee/ Executive Committee for
opening & operation of the Account.
Up to date list of Office Bearers/ Governing Body/ Managing
Committee duly certified by the Chairman/ Secretary.
Government approval in case of registered Club/society.
Page 49 of 101
[3.8]
NGO, JOINT VENTURE, & AIRLINES ACCOUNTS:
NGO:

introducer.
Certified copy of Bye Laws & Regulation/ constitution duly certified
by the Chairman/ Secretary.
Certified copy of Resolution of Management Committee/ Executive
Committee for opening & operation of the Account.
Up to date list of Office Bearers/ Governing Body/ Managing
Committee duly certified by the Chairman/ Secretary.
Permission from NGO Bureau.
Permission from Head Office.
(Circular no. BASIC/HO/Gen/2000/14, Dated 18-10- 2000)
JOIN VENTURE COMPANY (BANGLADESHI + FOREIGNER):
introducer.
Copies of passports of A/C operators (1 st 6 pages + visa pages for
foreigners).
List of Directors
Resolution of the Board of directors for opening & operation of the
Account
Permission from Board of Investment.

Joint Venture agreement attested by Notary public
Certified copies of the Memorandum and Articles of Association
Certified copies of incorporation.
Page 50 of 101
AIR LINES:
introducer.
Certified copy of Memorandum & Articles of Association.
Certified copy of Certificate of Incorporation.
Certified copy of Certificate of Commencement of Business (in case of
Public Limited Company).
List of Directors.
Resolution of the Board of Directors for opening & operation of the
Account
Copy of Agreement/Contract with Local GSA. (Attested as above)
Permission from Civil Aviation Authority of Bangladesh.
Permission from Board of Investment of Bangladesh
Permission from Bangladesh Bank

ACCOUNTS OF MUNICIPAL CORPORATIONS, LOCAL
AUTHORITIES, DISTRICT COUNCILS, OTHER PUBLIC
BODIES:
Before opening the account of any Government or Semi-Government
Organization or a Local Body, a certified copy of the Statute or any other law by
which the body is created and governed shall be obtained.
person(s) who will operate the Account duly attested.
Resolution of the Board of Directors for opening & operation of the
Account.
The Name, Address, Signature and Power of the account operator should
be mentioned in mandate.
If the account operator is transferred then posting order and joining report
of newly posted employee are required and the previous person verified
the newly posted employees signature.
Page 51 of 101
[3.9]
SPECIAL CASES IN ACCOUNT OPENING:
MINOR ACCOUNT:
Who is Minor?
A person who has not completed his 18 th year of age is considered to be a minor.
But in those cases where the court appoints guardian to person or property of
minor or the property of the minor is put under charge of a Court of Wards during
the period of his minority, the person shall become major on completion of 21
years.
According to Contract Act minor has no right to sign a contract. So minor cannot
open an account. But a Guardian of a minor can open and operate an account by
minors name.
Guardian of minor can open two types account by signing on stamp by any of the
following declarations.
Minor is not owner of deposited money in minor account but he/she has right to
withdraw money.
Minor is the owner of deposit in minor account.
Minor is not owner of deposited money in minor account
CAUTIONS:
Banker has to take special care so that no overdraft can be made on
minor account. Minor cannot be liable for any loan as minor has no
right to sign a contract.
Minor should not provide chequebooks. But she/he can use cheque
leaf. Minor will sign an only a loose cheque leaf in front of Branch
In Charge so that he/she cannot draw excess amount of money. In
any case, when there is the least doubt, proper identification must be
obtained & banker should inform the Guardian of minor.
No cheque, bill should not receive in minor account. If any dispute
arises minor cannot be liable for any contract.
Page 52 of 101
Minor is owner of deposited money in minor account:
In that case minor cannot withdraw money from this account before being
adult.
CAUTIONS:
Date of birth of minor and the date of attaining majority should
be noted at the top of the Account Opening Form and in the
computer. So that he/she can withdraw money after being
major.
The Guardian who opened the account in the minors name will
introduce the minor after becoming adult to bank. In this
introduction a renowned person should be present as a witness.
How ever the minors account can be opened in his own name
and minor himself can operate the account in the following way:
I. Minor who is 12 years or above may be allowed to maintain
deposit account with us.
II. Normal procedure of introduction and other formalities shall be
observed.
III. The account shall be non-borrowing in nature. Under no
circumstances there shall be any overdraft in this account.
IV. Minor can draw a cheque. If there is wrongful dishonor of such
cheque minor can sue Bank for damage and for wrongful
dishonor. If there is a wrongful payment to the minor, Bank will
not be able to recover such payment. So Branch should be very
cautious for any payment to the minor.
V. In case of death of the minor, his legal heirs would be the
beneficiaries of the Account.
Page 53 of 101
ACCOUNTS OF PARDANSHIL LADIES:
Accounts of Pardanshil ladies shall not be opened unless a respectable party
known has introduced them and acceptable to the Bank provides that they can read
and write English/ Bengali.
Banker should open the account in name of a pardanshil woman only after getting
full information of her social status, education, and proper introduction. Because it
is very difficult to prove in the court that a pardanshil woman willingly opened a
bank account.
CAUTIONS:
The introduction of the pardanshil woman should be taken
satisfactorily.
Accepted responsible person and signature to be made in front of
Authorized Officer/Manager should verify the signature of pardanshil
woman.
If the lady is married, her husbands name, address, occupation should
be written carefully. If her husband is service holder then information

about his employer, place of posting should be written carefully.
No advance should allow in favors of a pardanshil lady.
Accounts of illiterate Pardanshil ladies shall not be opened under any
circumstances.
[3.10]
SPECIAL CASES IN ACCOUNT SURVIVOR:
JOINT ACCOUNT:
In case of accounts to be opened in two or more names, Either or
Survivor containing clear and specific instructions regarding
operations of the accounts. These instructions shall be obtained
under the signatures of all of them.
Page 54 of 101
EITHER OR SURVIVOR
If in the account opening form contains the Instruction Either or
Survivor, in case of death of any joint account holders the balance
will be payable to the survivor with total satisfaction of Bank.
In absences of the instruction Either or Survivor
In the absence of specific instructions in the Form Either
or Survivor balance of the joint account will be payable to
the survivors and the legal representatives of the deceased
joint account holder.
CAUTIONS:
In the event of death of any account holders, the survivor shall be
requested to close the old account and open a new account in the
name of the surviving account holder
No overdraft shall be allowed in a Joint Account, unless all the
parties to the account operate it jointly, and charge documents in
respect of the advance are also signed by all of them.
[3.11]
ACCOUNT OPENING OF ILLITERATE PERSON:
ACCOUNTS OF ILLITERATE PERSON:
An illiterate person can be identify only by his thumb impression & photograph.
Illiterate persons desirous to open account may be allowed to open and operate on
an account under their thumb impression. So banker should take special cautions
to open and operate this account.
Required paper/documents:
i) The introduction of an illiterate person should be taken
satisfactorily.
ii) The thumb impression (left hand) of the depositor must be obtained in
the Account Opening Form and Specimen signature card in the presence
of an authorized Officer / Manager.
iii) Two copies of recent passport size photograph duly attested by
acceptable introducer. One should be pasted on the specimen
Page 55 of 101
iv) Passport/ Introductory Certificate from Employer /Introductory
v) A letter of undertaking shall be obtained from him to the effect that he
will not operate on the account unless he personally come to the Bank
and put his thumb impressions on the cheque in the presence of the
Manager/Authorized Officer.
vi) Wherever possible, brief details of one or two identification marks of the
depositor should be noted on the Account Opening Form and specimen
signature card under authentication of authorized officer/Manager.
CAUTIONS:
i) Only saving account may be open favoring an illiterate person.
ii) Account of Illiterate Person this seal should be marked on
Account Opening Form, specimen signature and ledger.
iii) No chequebook should issue in favor of this account holder.
For withdrawal of money the account holder should be come at bank premises and
he will fill up the loose cheque. He will put his thumb impression on cheque in
front of Manager. After being satisfied on verification the thumb impression and
photograph of specimen signature card the authorized officer will allow him to
withdraw the money.
[3.12]
SPECIAL CASES IN ACCOUNT DECEASED / STOP PAYMENT:
DECEASED ACCOUNT:
In case of death of an individual accountholder, all operations in his account shall
be stopped for with. A Caution mark: Deceased account shall be drawn just
below the balance of the account.
As soon as the information is received either through newspaper or some reliable
source about the death of a constituent, the date of death and source of information
shall be noted in the Computer against the relevant account. Interest on the
account of the Deceased shall not be paid as death terminates the contract with the
Bank.
CAUTIONS:
i) The credit balance of the deceased customer shall not be
paid to any person unless a probate or letter of administration
or succession certificate issued by a competent court is
Page 56 of 101
produced to the Bank and the Bank is satisfied about the bona
fides of the beneficiary.
ii) In special circumstances, Head Office may waived the
above requirement where the Bank is satisfied about the bona
fides of the successors subject to their submitting an
indemnity duly executed on a non-judicial stamp paper along
with two sureties acceptable to the Bank.
iii) The account of a deceased shall not be allowed to be
operated on or transferred under the instructions of any

Executor or Administrator or any claimant under Indemnity
letter or otherwise.
STOP PAYMENT ORDER:
Instructions of stopping payment of any Cheque shall be obtained
from the account holders in writing.
If such instructions are received on telephone or by telegram, a
provisional note in respect thereof shall be made in the Computer
pending receipt of written instructions from the account holder.
Should the Cheque be presented in the meantime, the same should
be returned with the objection Drawers Confirmation Required
The date and time on which those instructions are received shall
be marked on the letter and initiated by an Authorized Officer.
The signature of the account holder shall be verified on the letter.
The instruction shall be passed on the Computer Officer to check
the respective account to ascertain whether that particular Cheque
has already been paid or not.
The Stop Payment instruction should be recorded in the Computer
instantly.
The Stop Payment letters received from the parties shall be kept
in the Stop Payment File.
Page 57 of 101
[3.13]
ACCOUNT CLOSING:
To close an account, parties may be requested to send an application
along with the unused leaves of the Cheque Books issued to them.
On receipt of the application, the following will be done:
The signature of the account holder shall be verified.
The number of unused Cheque Leaves shall be noted there on.
Before the account is closed the Branch In Charge shall approve the
application after asserting the liability, if any, and incidental charges to be
debited to the account.
After debiting the incidental charges to the account, the account holder
shall be advised to draw the remaining balance from his account.
The Account Closed stamp shall be affixed on the Account Opening
Form and Specimen Signature Cards.
The application shall be posted with the account Opening Form and the
Specimen Signature Cards shall be kept separately under lock and key.
An Authorized Officer shall destroy the unused Cheque leaves.
[3.14]
ACCOUNT OPENING PROCEDURE [Flowchart]:
Account Opening Procedure with a Flow Chart: [Table-8]
The authorized officer
scrutinizes the introduction
and examines the document

submitted
Issuance of deposit slip and
the deposit must be made in
cash
After depositing cash,
checkbook is issued
An account holder needs
introduction
He is requested to fill up the
specimen signature sheet
Applicant fills up the
application in the prescribe
form
Page 58 of 101
[3.15]
ISSUE OF CHECK BOOK
ISSUE OF FRESH CHECKBOOK:
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.
Issuance of Fresh check book: -

[Table-9]
Issue of Duplicate checkbook: -
Duplicate checkbook in lieu 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 pro-forma agreeing to indemnify the bank for
the lost checkbook. Fresh checkbook 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 exercise duty only with prior
approval of manager of the branch. Check series number of the new
checkbook should be recorded in ledger card signature card as usual. Series
number of lost checkbook should be recorded in the stop payment register
and caution should be exercised to guard against fraudulent payment.
BANKER ISSUANCE NEW
CHEQUE BOOK IF EVERY
THINK IN THE RIGHT FORM
REQUISITION SLIP
FILLED UP PROPERLY
ALONG WITH THE
CHECKBOOK NUMBER
BANKER VERIFIES THE
SLIP
ENTER THE NEW CHEQUE
BOOK NUMBER IN THE

REGISTER BOOK AGAINST
THE SPECIFIC CUSTOMERS
NAME
Page 59 of 101
[4.1]
PART-FOUR
GENERAL BANKING
OPERATION OF
D.D, T.T, PAY-ORDER
BASIC Bank Limited
Page 60 of 101
CUSTOMER SERVICE:
Through this section customers can do D.D, T.T, PAY ORDER, I.B.C.A, &
I.B.D.A.
PROCEDURES OF D.D, T.T, PAY ORDER, I.BCA, & I.B.D.A:
There are three types of transaction can do through D.D, T.T, & Pay Order as
follows:
Cash Receive cash and send pay order to another branch.
Accounts to Accounts One can transfer his accounts to another
branch through D.D, & T.T.

Clearing If any client submits any cheque of any other bank, in this case
this cheque will collect through clearing house of Bangladesh bank, they
collect it in same process.
[Table-10]
[4.2]
T.T.
D.D.
CUSTOME
R SERVICE PAY
ORDER
I.B.C.A.
O.B.C.
Page 61 of 101
T.T. TELEGRAPHIC TRANSFER:
These are two types. One is inward T.T & another is outward T.T. In this
procedure one can transfer money from one place to another place. For this reason
money carrying risk is reduced. As well as time also save.
This procedure is only applicable for in this bank & its other branches. No one can
do T.T. from in this bank to another bank. Cause for any T.T. clients must have
accounts in this bank.
PROCEDURE OF INWARD T.T:
This means any client of our branch want to does T.T. then he inform his branch
and from that branch inform to main branch through telephone.
In this case bank must see some important things as follows: T.T. control number.
Payee name and account number.
By order.
Test number. [For any amount of money this number must be needed]
Amount in ward.
Amount in figure.
After getting this T.T. bank check that T.T. and register it in register book
according to that branch. In this case most important things is test number.
Cause it maintained for clients security. If the test number doses not match
with the register book then bank inform it to that branch and bank does not
pay that money. But usually this type of mistake does not happen.
After register T.T. banks make an advice, which has four parts. Bank
indicates clearly the date, the amount of T.T. inward and in amount.
In this advice bank dose customer accounts debit and head office account
credit and write test number.
Two copies send to that branch, one to the head office account and one is
attach with voucher.
PROCEDURE OF OUTWARD T.T:
Page 62 of 101
This is like reverse of inward T.T. In this case if any
client wants to transfer money or account, he
informs bank. Bank informs that branch where the
client wants to transfer his amount. In this case,
bank communicates with that branch through
telephone.
Bank must inform the payee name, by order,
amount of money, advice number.
Same as inward T.T. procedure that branch makes
advice against this branch.
For an example if any client of our branch wants to
T.T. to Chittagong then he must fill up the form of
T.T. where he writes all information as per T.T.
form. Then bank check all information and charge
commission, vat and telex charge.
For any amount of T.T. test number is needed.
Charge for T.T. as follows:
[Table-11]
CHARGES PERCENTAGE
Commission Minimum 150TK. Or 0.1% (Which one greater).
VAT 15%.
Telex Charge 50TK. (Fixed)
Note: Inward & Outward T.T.s copy enclose in appendix.

[4.3]
CHARGES ON
T.T.
Page 63 of 101
D.D. DEMAND DRAFT:
Demand Draft is another way to pay money or transfer account one branch to
another branch. In this case one can pay money to his client to any place of
Bangladesh. In this case client does need account in this bank.
These are two types. One is in ward D.D. and another is outward D.D. In this
procedure one can transfer money from one place to another place. For this reason
money carrying risk is reduced. As well as time also save.
PROCEDURE OF OUTWARD D.D:
In this case transferee fill up the form where he must write the
drawer name and account number and the bank name where
branch office collect the money.
In D.D. there must have important information as follows:
D.D. Number.
Control number.
Payee name and account number.
Amount in ward and amount in figure.
Branch code of from and to.
Test number.
Signature of applicant.
For an example if any client of our branch wants to D.D. to Sylhet
then he must fill up the form of D.D. where he writes all
information as per D.D. form. Then bank check all information
and charge commission, VAT and postage charge.
For D.D. (1 to 49,999) Tk. There is no test number is needed.
Greater than 49,999 Tk. D.D. needs test number.
Charges for D.D. as follows:
Page 64 of 101
[Table-12]
CHARGES PERCENTAGE
Commission Minimum 50Tk. Or 0.1% (Which one greater).
VAT 15%.
Postage Charge 25Tk. (Fixed)
Then register D.D. in register book. Where bank writes control
number, test number, amount in word and figure, payee name and
the branch name where it sends.
The bank makes an advice, which has four parts. Two copies send
to the payees branch, one copy sends to the head office and the
rest one in this banks voucher.
PROCEDURE OF INWARD D.D:
When D.D. from any branch, then we register it in register book, in this case
bank must see the previous serial number. If it is correct, than bank register it in
register book. Where bank entry date on the D.D., D.D. number, payee name,
amount, and serial number.
For an example if any D.D. comes from Rajshahi. Then bank does:
Head Office A/c (Rajshahi Br) Dr.
D.D. Payable A/c Cr.
When branch gets that money from head office then bank does:
D.D. payable A/C Dr.
Customer A/C Cr.
Branch office maintain a with head office which is called Head Office Account.
Note: Inward D.D.s copy enclose in appendix.
[4.4]
CHARGES ON
D.D.
Page 65 of 101
PAY ORDER:
Pay orders are the safest way of making payments, as they are drawn on the bank
issuing them. So there is no scope of fraudulent or cheque bouncing. A pay order
is issued only within the members of the Bangladesh Bank clearing house (Dhaka
Metro). It can be issued in favor of a customer holding an account, by debiting his
account and crediting bills payable account. Incase of a non-customer, cash
equivalent of the payment plus order charges is received in cash and held in the
daily suspense account until the payment is made through clearing.
It is another facility for client to transfer his money to another place. In this he
must has an account in this bank. If he has no account in this bank, he can deposit
money in this bank and does Pay Order. But in this case he must need a person
how knows him. He can deposit check, which is confirmed, by Bangladesh banks
clearinghouse. If it is correct than bank does this Pay Order.
Application must fill up the Pay Order form. Where Pay Order number, Payee
name, Amount in figure and in wards.
Bank take commission and VAT as follows:
[Table-13]
CHARGES TK.
Commission 50TK.
VAT-15% of
commission.
8TK.
Note: Pay Order form copy enclose in appendix.
REFUND OF PAY ORDER:
CHARGES ON
PAY-ORDER
Page 66 of 101
The following procedure should be followed for refund of pay order
by cancellation: 1. The purchase should submit a written request for refund

of pay order by cancellation attaching therewith the
original pay order.
2. The signature of the purchaser will have to be verified
from the original application form on record.
3. Manager/ sub-manager's prior permission is to be
obtained before refunding the amount of pay order
cancellation.
4. Prescribed cancellation charge is to be recovered from
the applicant and only the amount of the pay order less
cancellation charge should be refunded. Commission
recorded for issuing the pay order should not be
refunded.
5. The pay order should be affixed with a stamp
''Cancelled'' under proper authentication and the
authorized officer's signature of the pay order should
also be cancelled with red ink but in no case should be
torn. The cancelled pay order should be kept with the
relevant ticket.
6. The original entries are to be reversed with proper
narration.
7. Cancellation of the pay order should also be recorded in
the pay order issue register.

[4.5]
Page 67 of 101
I.B.C.A. & I.B.D.A:
[Inter Bank Credit Advice & Inter Bank Debit Advice]
Check comes from different bank. If these checks come from within Dhaka city
then it goes to clearing house. If these come from outside the city then bank do
OBC (Outward Bills for Collection) against that bank to collect that amount of
money. After receiving the checks and crossing on that check, then put OBC sill
on that checks, then put endorsement sill backside of these check and register it in
the register book.
Then bank makes advice against that bank where the check comes. If the bank
request for OBC to any branch of its. Then bank advice to send I.B.C.A. then
Bank make a liability voucher, where: Customer Liability Dr.
Bankers Liability Cr.
After collection money bank does: Bankers Liability Dr.
Customer Liability Cr.
On the credit voucher bank write the OBC number, Date, in advice, Bank name
and amount.
If the bank request its any branch to collect the amount of money where it needs to
collect, then bank must write the name of the bank where it will be collected. If
bank collects in directly from any bank, in that case bank writes Drawn Yourself.
I.B.C.A. PROCEDURE:
When any branch send I.B.C.A. to this bank, then bank register it into register
book. Where bank write the date, branch name, check number, date on the check,
name of the bank, and amount. Then it is place for clearing and after realization of
that check, and then bank makes a voucher. Where bank doesMisc. A/c Dr.
Branch A/c Cr.
Then Bank registers it in OBC register book.
Page 68 of 101
[5.1]
CLEARING HOUSE:
PART-FIVE
GENERAL BANKING
OPERATION OF
INWARD & OUTWARD
BASIC Bank Limited
Page 69 of 101
ORIGIN OF BANKS CLEARING HOUSE:
Before introduction of the present concept of Clearing House, the

representatives of the banks had to collect the proceeds of the
instruments in Cash from the drawee banks, which involve risk,
time and money. Mr., Arbin first thought about Clearing House to
solve those problems and on the basis of his revolutionary thought
Banks Clearing House was initially established in 1775 in
London as London Clearing.
CLEARING HOUSE:
Clearing House is mechanisms for expeditious settlement of inter
bank claims arising out of their constituents negotiable
instruments in presence of representatives of all member banks. In
Bangladesh, Clearing arrangements exist in the office of the
Bangladesh Bank, at other places in the office of Sonali Bank
where Bangladesh Bank has no Office.
TYPES OF CLEARING HOUSE:
There are two types of Clearing System in Bangladesh.
They are:
Inter-Branch Clearing, and
Inter-Bank Clearing.
Under the system of Inter-Branch Clearing, inter-branch claims of
a particular bank within the City or town area are settled through
their Main Office or Local Office.
But under the system of Inter Bank Clearing, the claims among
the members of the clearing house of different Banks within the

area of clearing house are settled under the direct supervision and
control of Bangladesh Bank and each member bank of the
Clearing House has to maintain their account with Bangladesh
Bank
USEFULNESS OF CLEARING HOUSE:
Clearing House is essential for adjustment of a developed
Banking System. It makes easy settlement of inter-bank claims
Page 70 of 101
and it saves huge cash transactions and consequent danger of loss
in transit and the necessity of holding by every bank of a huge
cash balances for the purpose. The Clearing House is of
incalculable benefit as a time, labor, risk and currency saver.
FUNCTION OF CLEARING HOUSE:
Entire function of Clearing House may be divided into 3
parts:
Operational procedure at Branch Level,
Internal or Inter-Branch Clearing procedure, and
Main Clearing House or Inter-Bank procedure.
[5.2]
OPERATIONAL PROCEDURE AT BRANCH LEVEL:
There are two types of clearing activities at Branch Level:
Outward Clearing,
Inward Clearing.
OUTWARD CLEARING:
Under this system negotiable instruments drawn on other banks are presented in
the respective bank through Clearing House for receiving payment and after
receiving the proceeds of the cheque / instruments the accounts of the respective
clients are credited.
INWARD CLEARING:
Under this system negotiable instruments of different banks presented in the
Clearing House are received by the representative of the respective bank and bring
the instruments of their branches for making payment.
Procedural activities of Outward Clearing System:
Outward Clearing System includes the following activities:
Page 71 of 101
Scrutinizing the correctness of the instruments that received for clearing.
Affixing the branch crossing seal on the face of the instrument.
Affixing branch clearing seal on the deposit slips and on the face of the
instruments.
Making necessary endorsement on the back of the instruments.
Encoding the necessary information of the instruments in the diskette.
Cheque Information:
[Table-14]
Date :
Batch No :
Bank From :
Bank To :
Issue Date :
Cheque Series :
Cheque Sl.No. :
Cheque Number :
Book Number :
Cheque Type :
Cheque A/C No. :
Amount :
Payee Name :
Payee A/C No. :
Amount in deposit slip :
Preparation of schedule bank-wise as well as branch-wise.
Preparation of Outward Clearing Register.
Sorting the instruments bankwise and branchwise.
Ensuring the correctness of encoding regarding the information of
instruments in the diskette, (the outward Clearing Register is checked with
instruments and Deposit slips and make necessary corrections in the
diskette).
Stapling the instruments with the schedule.

Sending the instruments along with diskette to the Main Branch or Local
Office for clearing.
Passing the entries at the time of sending clearing instruments is as under:
For branch other than Main Branch / Local Office:
Page 72 of 101
Debit : Head Office A/C (Main Branch)
Credit : Sundry Clients A/C / other A/Cs
Activities of Internal Clearing House at Main Branch:
Receiving the diskettes containing the information of negotiable
instruments along with instruments supported by its clearing
schedules and necessary Inter Branch Debit Advice (IBDA) from
the representatives of branches.
The diskettes received from the branches are merged and transferred
to a diskette, which is to be presented in the Clearing House at
Bangladesh Bank.
Preparation of Summary Schedule and House Sheet.
Sorting the instruments Bank-wise as well as Branch-wise and
stapling the instruments with the schedules accordingly.
Preparation of summary Outward Clearing Register.
Passing the entries by Main Branch at the time of sending the
instruments to Bangladesh Bank Clearing House are as under:

For Main Branch/ Local Office:
Debit : Suspense A/C Clearing Receivable.
Credit : Sundry Clients A/C / other A/Cs.
Credit : Head Office A/C (Responding the IBDA of Branches)
[5.3]
ACTIVITIES OF INTER BANK CLEARING HOUSE AT BANGLADESH
BANK:
Handing over the diskette and House sheet to the Computer
Section of the Clearing House.
Handing over the bank-wise sorted instruments to the
representatives of the respective Bank.
Page 73 of 101
Diskettes received from different Banks are merged in the
Computer Section of Clearing House and summary House Sheets
of all Banks are prepared separately.
Handing over the summary House Sheet of the Bank to the
respective representative of the Bank. All instruments received
and delivered are
Printed in the Summary House Sheet, which is as under:
BASIC Bank Limited
[Table-15]
1 st Clearing, Dhaka Date:

No. Of
Cheque
delivered
Amounts Name of
the Bank
No. Of cheque
Received
Amounts
Net amount receivable / Payable Tk.
Thus if the delivered amount is greater than the received amount, calculate the
receivable amount which is credited to the respective bank account maintained
with Bangladesh Bank. But, if the delivered amount is less that the received
amount, calculate the payable amount, which is debited from the respective bank
account with Bangladesh Bank.
Representatives of the banks returns to their respective Main
Branch or Local Office with the instruments and diskette that
received from the Clearing House.
Inward Clearing at Inter Branch Clearing House:
Instruments received by a Bank from different Banks in the Clearing House are
sorted branch wise and passes the following entries in two phases:
PHASE I
Debit : Head Office A/C (Other Branches)
Page 74 of 101
Debit : Client s A/C of Main Branch
Credit : Sundry Creditor A/C Clearing Payable.
PHASE II
Entries passed earlier in Clearing Receivable A/C and Clearing Payable A/C are
reversed and the following vouchers are to be passed for adjustment of 1 st Clearing
House activities:
Credit : Clearing Receivable
Debit : Clearing Payable
Debit/Credit : Head Office A/C.
[Debit H.O. A/C if the Clearing Receivable > Clearing Payable or Credit H.O.
A/C if Clearing Receivable is < clearing Payable]
Then the instruments of the branches supported by I.B.D.A.s are delivered to the
respective branches through their Messengers.
[5.4]
INWARD CLEARING AT BRANCH LEVEL (2 ND CLEARING HOUSE):
After having the instruments from the Messenger, the branch checks it out with
their books of account and records whether they can honour all the instruments
received from the Clearing House. If the branch dishonors any instrument for any
reason, they have to return the instrument(s) by debiting Head Office A/C (Main
Branch / Local Office) for the total value of the instruments returned unpaid and
passed the following entries:
Debit: SB / CD / CC / STD A/C of the clients, Pay Order A/C / D.D.

Payable A/C / Draft paid without Advice A/C etc.
Debit: Head Office A/C (Main Branch) for the amount of dishonoured
instrument(s) if any.
Credit: Head Office A/C (Responding the IBDA of Main Branch).
The branch then prepares the return Memo for each returned instrument that
contains instrument No., Amount and reason for its dishonor and recorded it in the
Page 75 of 101
Cheque Return Register. Now the instruments are enclosed with the Return
Memos and are sent to the Main Branch / Local Office with Inter Branch Debit
Advice (IBDA).
After receiving the returned instruments from the branches, instruments are
encoded in the diskette at Main Branch / Local Office and perform the following
activities:
Preparation of schedule,
Preparation of outward clearing return register,
Sorting the instrument bank-wise as well as branch-wise,
Stapling the instrument(s) with the schedule.
The following entries are then passed at Main Branch:
Debit : Clearing Payable
Credit : Head Office A/C (Responding IBDAs of branches).
Then the representative of the bank takes back all the returned unpaid instruments
of branches including themselves along with the diskette to the Clearing House
and deliver the instruments to the representatives of the respective Banks.
Similarly, they also receive back the instruments returned unpaid by other Banks.
Bank account with Bangladesh bank is similarly debited or Credited for the net
amount payable or receivable.
The unpaid instruments received in the Clearing House are sorted branch-wise and
the following entries at Main branch are passed in two phases:
PHASE I
Debit : Sundry Clients A/Cs (Credited earlier)
Debit : Head Office (Branches)
Credit : Clearing Receivable A/C
PHASE II
Page 76 of 101
The entries passed earlier in Clearing Receivable A/C and Clearing Payable A/C
are reversed and the following vouchers are to be passed for adjustment of 2 nd
Clearing House:
Debit : Clearing Receivable A/C
Credit : Clearing Payable A/C
Debit/Credit : Head Office A/C (Head Office)
[Debit Entry if Payable amount > Receivable amount.
Credit Entry if Payable amount < Receivable amount]
Instruments returned back from the Clearing House are then sent back to the
branches with Debit Advice (IBDA) for the value involved with the unpaid
instrument(s) and the following entries are passed by the branches for their
returned instrument(s):
Debit : Sundry Clients A/C (Credited earlier).
Credit : Head Office A/C (Responding the IBDA of Main Branch
[5.5]
PRECAUTIONARY MEASURES:
While making payment of the instruments received the clearing House the
following precautionary measures should be taken:
If the crossing seal of the collecting bank on the face of the
instrument is not affixed the instrument should not be honored.
If the clearing seal with present date is not affixed on the face of the
instrument, the instrument should be returned unpaid.
Date on the face of the instrument must be checked carefully. If the
cheque is post-dated or anti-dated the cheque should be returned
unpaid.
If the cheque does not bear the signature of the drawer on the face of
the cheque, the cheque must be returned.
If the drawers signature of the cheque differs with the Specimen
Signature Card, the cheque should not be honoured.
If the amount in word differs with figures the instrument should not
be honored.
Page 77 of 101
If the instrument does not bear the endorsement on the back the
instrument, the instrument should be returned.
If the drawer stops the instrument, the instrument should be returned
unpaid.
If the instrument is mutilated and the collecting bank does not
confirm the same, the instrument should be returned.
If the alteration in date / figure / words is not confirmed by the
drawer the instrument should not be honored.
If the collecting banks discharge is irregular, the instrument should
be dishonored.
Page 78 of 101
[6.1]
DEFINITION OF FOREIGN EXCHANGE:
PART-SIX
FOREIGN EXCHANGE
OPERATION OF
BASIC Bank Limited
Page 79 of 101
Foreign exchange is a process, which is converted one national currency into

another and transferred money from one country to another countries.
According To MR H. E, EVUTT. Foreign exchange is that section of economic
science which deals with means and method by which right to wealth in one
countrys currency are covered into rights to wealth in terms of another countrys
currency. It involved the investigation of the method, which exchanges the
currency of one country for that of another, the causes which rented such exchange
necessary the forms, which exchange may take and the foreign exchanges are
affected.
FOREIGN TRADE AND FOREIGN EXCHANGE:
International trade refers to trade between the residents of two different countries.
Each country functions a sovereign state with its set of regulations and currency.
The difference between the National Exporters and Importers presence certain
peculiar problems in their conduct of international trade and settlement of the
transaction arising there from. Important among such problems isDifferent countries have different monetary units.
Restrictions imposed by countries on import and export of goods.
Restrictions imposed by nations on payment form and into their countries,
and
Differences in legal practices in different countries.
Foreign exchange means foreign currency and includes: All deposits, credits and balances payable in may foreign currency and any
drafts, travelers checkups, letters of credit and bills of exchange, expressed
or drawn in Indian currency but payable in any foreign currency.

Any instrument payable, at the option of the draw or holder thereof or any
other party there to, Either in Indian currency or in foreign currency or
partly in one and partly in the other. Thus, foreign exchange includes
foreign currency, balances kept abroad and instruments payable in foreign
currency.
NECESSITIES OF FOREIGN TRADE:
Diversity in Natural Resources:
Page 80 of 101
Trade may take place because of the diversity in productive
possibilities among countries. For example one country
may be blessed with a supply of petroleum, while another
may have a large amount of fertile land.
Differences in Tastes:
A second reason for trade lies in preference, Even if the
conditions of production were identical in all regions,
countries might engage in trade if their tastes for goods
were different.
Differences in Costs:
The most important reason for trade is differences some
counties in production costs. For example, manufacturing
processes enjoys economies of scale; that is they tend to
have lower average costs of productions as the volume of

output expands.
PRINCIPLES OF FOREIGN EXCHANGE:
The following principles are involved in foreign exchange:
The entire system
The media used
The monetary unit
THE PRINCIPLE OF COMPARATIVE ADVANTAGE:
It is only common sense that countries will produce and export goods for which
they are uniquely qualified. But there is a deeper principle underlying all trade.
The principal of comparative holds that a country can benefit from trade even if it
is absolutely more efficient (or absolutely lees efficient) then other countries in the
production of every good.
COMPARATIVE ADVANTAGE:
The Principle of comparative advantage holds that each country will
benefit if it specializes in the production and export of those goods
that it can produce at relatively low cost. Conversely, each country
will benefit if it imports those goods that it produces at relatively
high cost. This simple principal provides the unshakeable basis for
international trade.
Page 81 of 101
No country is self-sufficient. One country has to depend on other
countries for various reasons. One country may have a sound

structure in one sector while its other sectors are not so well
structured. As a result naturally it has to depend on another country
to minimize these lacking of those sectors. On the other hand,
according to Ricardo's comparative analysis theory. If a country is
good at various sectors then it will continue its operations in its best
sector, while for the other sectors it will depend on others. When
countries concentrate on their areas of comparative advantage under
free trade, each country is better off. The underlying assumption
here is that countries can concentrate properly in a specified area, as
a result efficiency in production will increase, product quality will
increase while the price be lower. Countries will be able to market
their products at a lower price. The surplus production will be sold
outside of the country which known as export. By doing so countries
will earn foreign currency. Again by spending those currencies they
will buy the required goods from other countries for them that are
known as import. The whole transaction is known as Foreign Trade
and through the exchange of foreign currency the transaction ends
up. Foreign trade is divided into import, export and remittance
FUNCTION OF FOREIGN EXCHANGE:
The bank actions as a media for the system of foreign exchange policy. For this
reason, the employee who is related of the bank to foreign exchange, specially
foreign business should have knowledge of these following functions: -
Rate of exchange.
How the rate of exchange works.
Forward and sport rate.
Methods of quoting exchange rate.
Premium and discount.
Risk of exchange rate.
Causes of exchange rate.
Exchange control.
Convertibility.
Exchange position.
Page 82 of 101
Intervention money.
Foreign exchange transaction.
Foreign exchange trading.
Export and import letter of credit.
Non-commercial letter of credit.
Financing of foreign trade.
Nature and function of foreign exchange market.
Rules and regulation used in foreign trade.
Exchange Arithmetic.
[6.3]
FOREIGN EXCHANGE AND FOREIGN TRADE OPERATIONS:

AUTHORIZED DEALER OR AD HOLDER BANK:
As per section 2 of Foreign Exchange Regulation Act 1947,
Authorized Dealers means a person, for the time being authorized
under section 3 to deal in Foreign exchange. In other words
Authorized Dealers means a Bank, Authorized by Bangladesh Bank
to deal in Foreign under FER Act 1947.
LICENSE FOR AUTHORIZED DEALER:
To get a License for Authorized Dealer, a Bank will apply the
General Manager, Foreign Exchange Policy Department of
Bangladesh Bank, Head Office, Dhaka complying following
conditionsThe Bank must have adequate manpower trained in
Foreign Exchange.
Prospect to attract reasonable volume of Foreign exchange
business in the desire location.
The Bank meticulously complies with the instruction of
Bangladesh Bank.
Page 83 of 101
The Bank will commit to deal in Foreign exchange with in
the limit and will submit periodical returns as instructed
by Bangladesh Bank.
FUNCTIONS OF AUTHORIZED DEALERS:

Authorized dealer can handle all kinds of Foreign exchange instruction as per FER
Act 1947 under the instruction of Bangladesh Bank. Following are the main
function of an Authorized Dealer:
Exchange of Foreign Currencies.
To make arrangement with Foreign Correspondent.
Buying & Selling Foreign Currencies
Handling inward & outward Remittance.
Opening of L/C Settlement of payment.
Investment in Foreign Trade.
Opening and Maintenance of Accounts with foreign Banks under
intimation of Bangladesh Bank.
Export documents handling.
MODES OF THE FOREIGN EXCHANGE:
Various services regarding foreign exchange provided by BASIC
Bank can be segregated into three broad categories:
Export
Import
Foreign Remittance
Issuing T/C & Endorsement of Dollar
[6.4]
EXPORTS:
LEGAL REQUIREMENTS:
Page 84 of 101
Although payment aspects of exports are Bangladesh banks concern, the
export policy order announced by the ministry of commerce controls
physical aspects. Bangladesh bank has set ort elaborate procedure and laid
down detailed rules and regulations concerning export and export
payments. All exports, to which the requirement of declaration applies,
must be declared on the exp. from. The branch should before certifying any
export form, consider and take notice of the following:
I. The intended exporters shall have valid export registration
certificate.
II. Payment for goods exported from Bangladesh should be
received through the branch in freely convertible foreign
currency or in Taka from a nonresident Taka account of a
bank branch or correspondent abroad.
III. Commission, brokerage and other trade charge are
admissible only up to a maximum of 5% of the value of
goods. The charge beyond 5% may be admissible subject to
prior approval of the Bangladesh bank.
IV. In order to avoid any loss of foreign exchange to the
country, the branch should see that
Arrangement has been made for realization of export proceeds
within prescribed period of 04 months.

Arrangements have been made for receipt of title to goods like bill
of Lading, Always Bill etc. by the branch in shipment of goods.
The Exp form is signed either by the exporter or one holding valid
legal power of attorney from exporter an the terms of the power of
attorney are such that both the exporter and the attorney may be
held responsible jointly and severally for realization of export
proceeds.
Bonfires of the buyers/ consignees abroad and their credentials.
V. The branch and its officials certifying the export forms as
well as the exporter render themselves liable to punitive
action under the FER Act for delay in repatriation or nonrealization of export proceeds.
VI. In respect of export of goods by land route or by sea. The
bill of leading. Railway receipts and other documents of
Page 85 of 101
title to cargo should be drawn only to the order of
Mercantile Bank limited.
EXCEPTIONS:
In case of exports of goods against advance payment, the
Bill of Lading, Airway Bill and other transport documents
may be endorse by the branch in favor of foreign importers
of the branch may allow the carrier company to draw the

coc documents in favor of the foreign importers abroad by
the branch.
Export of fresh fish, vegetables, fruits, poultry and other
goods of perishable nature is also exempted from this
directed.
Type A industries in the EPZ may also draw the
documents of title to cargo in favor of the consignee/LC
opening ban.
The branch to whose order the relative railway receipt,
bills of lading etc. are drawn shall endorsed the same to the
order of their foreign correspondents but in no case they
shall make any blank endorsement or endorsed it to the
order of the consignee unless they have obtained specific
or general approval of Bangladesh bank.
IMPORT LEGAL REQUIREMENTS:
Import of merchandise into in Bangladesh is related by the
import policy order (IPO) announced by the ministry of
commerce and / or notifications/ public notices issued by the
ministry of commerce and /or C.C.I & E and Bangladesh
bank.
Before entering into an import transaction countrys legal and
economic framework to be considered. These include:
Restrictive governmental policies

Exchange regulations
Page 86 of 101
Tariffs and transaction
Reporting to the controlling authorities.
It is important to have a general understanding of some of the basic legal bad
economic terminology internationally, within which such trade takes places.
Following ICC publications framework of such terminology and rules governing
international trade.
UCPDC, ICCPUB-500
URR, ICC PUB-525
URC, ICC PUB-522
Inciters 2000 ICC PUB-460 (revised)
[6.5]
L/C (LETTER OF CREDIT):
DEFINITION OF L/C:
On behalf of the importer if the bank undertakes to make payment to the foreign
bank is known as documentary credit or letter of credit.
A letter of credit is an instrument issued by a bank to a customer placing at the
letters disposal such agreed sums in foreign currency as stipulated. An importer is
a country request his bank to open a credit in foreign currency in favor of his
exporter at a bank in the letters country, the letter of credit is issued against
payment of amount by the importer or against satisfactory security. The L/C
authorized the exporter to draw a draft under is terms and sell to a specified bank
in his country. He has to hand over to the bank, will the bill of exchange, shipping
documents and such other papers as may be agree upon between the exporter and
the importer, the exporter is assured of his payment because of the credit while the
importer is protected because documents in respect of export of goods have to be
delivered by the exporter to the paying bank before the payment is made.
FORM OF LETTER CREDIT:
A letter of credit may be two forms. These as below:
1. Revocable letter of credit.
2. Irrevocable letter of credit.
Page 87 of 101
Revocable L/C:
If any letter or credit can be amendment or change of any clause on
canceled by consent of the exporter and importer is known as
revocable letter of credit.
A revocable letter of credit can be amended or canceled by the
issuing bank at any time without prior notice to the bank to make
payment. Revocation is possible only until the issuing bank or its
correspondent has honored the documents. Thus a revocable credit
does not usually provide adequate security for the beneficiary.
Irrevocable L/C:
If any letter of credit cannot be changed or amendment without the
consent of the importer and expediter is known as Irrevocable letter
of credit.
An irrevocable credit constitution a firm undertaking by the issuing
bank to make payment. It the fore, gives the beneficiary a high
degree of assurance the he will pay to his goods or services provide
he complies with terms of the credit.
TYPES OF LETTER OF CREDIT:
Letter of credit is classified into various types according to the method of
settlement employed. All credits must clearly indicate in major categories.
Sign payment credit
Deferred payment credit
Acceptance credit
Negotiation credit
Red close credit
Revolving credit
Stand by credit
DOCUMENTARY REQUIREMENTS FOR OPENING L/C:
Import shall submit following documents for opening L/C:
Valid import registration certificate (commercial/industrial)
Tax identification number certificate
Vat registration certificate

Membership certificate of a recognized trade association as per IPO
Page 88 of 101
A declaration, in triplicate, that the importer has paid income-tax or
submitted income tax returns for the preceding year.
Performa Invoice or indent duly accepted by the importer.
Insurance cover note with money paid receipt covering value goods to the
imported plus 10 percent above.
L/C application form (MF-fx 13) duly signed by the importer.
Letter of credit authorization form (LCAF) commercial or industrial as the
case may be, duly signed by the importer and incorporating New ITC
number of at least 6 digits under the Harmonized systems as given in the
import trade control schedule 1998.
IMP form duly signed by the importer.
[6.6]
PRECAUTIONARY STEPS:
The Branch must ensure that they deal only with know
customers having a place of business in Bangladesh and can
be traced easily should any occasion for this purpose.
The Branch shall assess the financial standing and
credibility of the customers.
[The Branch should also obtain confident report on the

exporter in all cases where the amount of L/C exceeds Tk.
200000/- P/Invoice and Tk. 500000/-against indents.]
The Branch shall verify price so as to ascertain
competitiveness of the commodities to be imported.
The Branch shall verify signature of the importer on L/C
Application Forms (LCAF & IMP Form.
The Branch will not open L/Cs for import of goods through
the customs stations/routes like Sonamashjid, Hili,
Burimary, Birol, etc. unless the importers pay 100% margin
or prior Head Office approval is obtained.
SANCTIONING DOCUMENTATION & LEGAL FORMALITIES:
Approval of Head Office or Branch Manager (where L/C are to be
opened under his delegation) to be obtained before opening L/C(s).
Page 89 of 101
Security documentation to be completed as per sanction/approval
terms prior opening L/C change form such as demand promissory
note, letter of undertaking, letter of debit authority and letter of
guarantee (where applicable) to be obtained with due stamps as per
prevailing stamps act.
[6.7]
OPENING L/C:
The branch may now proceeds for opening the credit in behalf of the own
customers who maintain accounts with them except government organizations.
Necessary entries to be given in the l/c. opening register (MB/FX-03) by
allocating an l/c number and following vouchers are to be passed for completion
of opening transactions at BC selling rate (spot).
Creation of L/C liability (register MBFX-12)
Dr. customers liability on L/C cash
Cr. Bankers liability on L/C cash
(Amount to be rounded off to the nearest Taka)
MARGIN/COMMISSION AND CHARGES:
DR customers A/C: margin commission + FFC+POSTAL/ TELEX
+STAMP+MISC.
CR. Sundry deposit a/c: margin on L/C (cash).
CR. Income A/C: postal/recoveries.
CR. Income A/C: miscellaneous earnings (handling charge, stationary
charges, etc.)
CR. Sundry A/C: miscellaneous earnings (handling charge, stationary
charges, etc.)
CR. Sundry Deposit a/c: F.C.C.
CR. Other Asset A/C: Stamp in hand.
TIME LIMIT FOR OPENING OF L/C:
Page 90 of 101
LCs shall be opened with in 150 days from the date of issuance of LCAF or from
the date of registration of LCAF with Bangladesh bank.
[6.8]
BACK-TO- BACK L/C s:
The branch may open back to back import L/C s against export L/C s received by
export oriented industrial units opening under the bonded warehouse systems,
subject to observance of domestic value addition requirement prescribed by the
NBR/Ministry of commerce from time to time.
The following instructions should be complied with while opening
back import L/C s:
The unit requesting for the facility should possess valid
IRC, ERC and Valid bonded warehouse license
The branch shall hold the Muster Export L/C affixing
banks line stamp thereon and be kept in safe for security
purpose.
The master export L/C should have validity period
adequate to cover the time needed for importation of
inputs, manufacture of merchandise, and shipment to
consignee.
The back-to- back L/C value shall not exceed the
admissible percentage of net FOB value of the relative
mater export L/C (as per prescribed value addition
requirement). For computation of net FOB value of a

master exports L/C, the freight charge, insurance cost and
commission if payable by the exporter shall be deducted
from the L/C value. If the freight element is shown
separately a freight certificate from the shipping company
or agent should be asked for.
The back to back import L/C shall be opened on up the 180
days issuance (DA) basis except in cases of those opened
against export development fund administered by
Bangladesh bank in which case the back to back L/C will
be opened on sight (DP) basis.
Page 91 of 101
Interest for the issuance period shall not exceed LIBOR or
the equivalent interest rate in the currency of settlement.
All amendments of the master export L/C should be noted
down carefully to rule out chances of excess obligation
under the back-to- back import L/C.
Back to back L/C can either be local or foreign. Inland
BTB L/C s denominated in foreign exchange may be
opened in favor of local supplier manufacturer of inputs
against master export l/c and BTB L/CS may in turn be
opened for import of inputs against inland BTB L/C in
favor of local supplier/manufacturer under bonded

warehouse system up to value limits applicable as per
prescribed value addition requirement.
CHECKING OF BACK TO BACK L/C DOCUMENTS:
The relevant documents of Back-to- Back L/C send by negotiating bank will
have to be properly checked.
BILLS OF REGISTER:
After the arrival of documents related with Back to Back L/C, an entry should
have to be given in the Bills of Registers are listed below:
Date received
B/E no.
L/C no.
L/A no.
Received from
Drawn on
Amount (Foreign currency / Rate)
Taka equivalent
Draft (Tenor- due date)
No. Of documents (Draft-invoice- B/Ls-- Others)
Steamer
Date goods cleared
Special instruction from sender
Remarks-further recoveries etc.

Date realized
Remarks- Disposal
Initials
Remarks
Page 92 of 101
ACCEPTANCE OF BACK TO BACK L/C:
After receiving of the documents from the negotiating the
issuing Bank send an acceptance of B/B L/C specifying the
date when they will pay the amount of the related L/C.
NEGOTIATION OF EXPORT DOCUMENTS:
If the documents are found strictly as per the terms of L/C.
i.e. if the documents are free from discrepancy or if the
discrepancies are covered by indemnity of the part, Bank may
negotiate the export documents.
EITHER PURCHASE OR SENDING FOR COLLECTION
EXPORT DOCUMENTS:
If the documents are discrepant, then the Bank will not
purchase them; they will send it for collection. On the other
hand documents are as per the terms of the L/C, and if the
importer is not interested to wait a long period for the fund,
then the issuing bank make arrangement for purchasing the
documents at a discount.
[Chart-5]
BACK TO BACK L/C:
ISSUING BANK
Importer Exporter
L/C
Page 93 of 101
Becomes an
Importer.
Advising Bank
B/B
L/C
ISSUING BANK
Exporter
Diagram: Issuing L/C and B/B L/C
Page 94 of 101
[7.1]
The Banks strength and competitive capabilities can be shown by the SWOT
analysis. The SWOT analysis is grounded in the basic principle that strategymaking efforts must aim at producing a good fit between a companys resource
PART-SEVEN
SWOT ANLYSIS , RECOMENDATION

&
CONLUSION
BASIC Bank Limited
SWOT ANALYSIS:
Page 95 of 101
capability and its external situation. The SWOT analysis of BASIC Bank Limited
is as follows:
S- Strength
i) Reputation of the Bank: Since the inauguration the bank has managed
their activity with their own images to serve their customers. They have
provided services successfully and have achieved goodwill among the
Shariah Based Banks. The Bank is opening with its efficiency and
integrity.
ii) Sponsor: BASIC bank has sponsors from various sectors of
Bangladesh. The most successful entrepreneurs from various sectors
started this company. As a result there was a combination of different
thoughts and skills in the management of the bank, which is very much
essential for success in todays competitive market.
iii) Top Management: BASIC bank has a very competent and experienced
top Management. The current Managing Director Mr. A.H. Iqbal
Hossain has banking experience for a long time period. He had the
experience of marketing and customer relationship management in his
long career. This has helped the bank to achieve its goal.
iv) Shariah Based Banking: BASIC Bank is operating based on Islamic
Shariah. As Bangladesh is a Muslim country, the Shariah banking has
been able to attract customers and achieved a great success in the
private banking sector.
v) Branches: BASIC bank is operating their business all over the country
with 30 branches and still planning to expand their business by opening
Page 96 of 101
new branches in the country. It has strengthened the distribution of the
banks services.
vi) Government Bank: The 100% Share of BASIC Bank is Government.
So it is a very Good Strength for any Company.
W- Weakness:
i) Promotion: The bank does not any formal promotional activity. They
do not give any sort of advertisement or do not have any marketing
activity. They do not even too many billboards. This is why they are far
behind the competitive in the private banking. Even some people do not
know that BASIC Bank is operated according to Shariah.
ii) Remuneration: The remuneration of the officers of BASIC bank is
lower compared to other private banks. Even the internship students are
paid nothing. This is why high skilled human resources are discouraged
to join here.
iii) Online Banking: At Present Every bank try to converted them to the
Online banking. BASIC bank has no Online Banking System. So it is a
great weakness for the Bank. I hope that BASIC Bank also introduce the
Online banking System & serve his Client very Smoothly.
iv) Centralization Decision Making: The decision making of the bank is
too many centralized. No decision is made without the authorization of
the head office. Sometime some quick decision is needed to be taken,
but from the branch, no one can make decision. It is one of the major
draws back of the bank.
Page 97 of 101
v) Lacings of some officer: Some of the officer of the BASIC Bank LTD
are not sincere their work. They do not come regularly; if they come
they do not work properly. They just talk & pass the time. Some of the
officers are not suitable for his position.
O- Opportunity:
i) Consumer Banking: BASIC bank is operating corporate banking. In
our country there is a huge opportunity of consumer banking. So BASIC
bank can reposition their branding and introduce consumer banking with
corporate banking.
ii) ATM: The banking sector of the country is becoming modernized in the
country. People like to draw money any time from anywhere. So ATM
card is getting popularized in the country. BASIC bank can introduce
ATM system in their bank. More Over, Shariah Based banks are not
providing ATM cards. So those who want ATM card but do not like
interest, they can be attracted by ATM card issued by a Shariah Based
Bank.
iii) More Branches: The economy of the country is expanding. The
business outside Dhaka is also expanding. As a result, the demand for
banking service is increasing day by day. So BASIC bank can open
more banks in the country and can expand their business.
iv) Shariah Based Banking: In our country people are religious. Most of
the people are Muslim. They are becoming educated and know the bad
impact of interest. So they are moving towards Shariah based banking.
BASIC bank takes this opportunity.
Page 98 of 101
v) Government Bank: BASIC Bank is Govt. Bank. So it has a great
opportunity to expand itself.
T- Threat
i) Competitions: In Bangladesh, after economic reform, more private
bank has started their operation in the country. They are coming with
different types of attracting products. This has increased the completion
among the private banks.
ii) Devaluation of local Currency: The value of local currency is

decreasing. So investment in local banking is decreasing. More over the
inflation is increasing in the country. So people want to save money but
in many cases they cannot. As a result, the banks are getting less
deposit.
iii) Bank Default: There is a tendency of the people of the country to
become bankrupt. Few days ago Oriental bank has a great suffering. In
our country, the receivable from top 20 bankrupt companies stood 88.36
billion. This is discouraging banks to make new investment.
[7.2]
Basic Bank is one of the top class banks in our country. When I was placed at
Motijheel Brach I didnt have serious problems regarding the operation, customer
service, management, human resource department or anything else.
In spite of this I found few problems as follows:
RECOMMENDATION:
Page 99 of 101
The time to reach Permanent Position from probation period takes
almost two years, which is a very long time process as I
considered and it should be less than two year.
Some Officers of the bank are not self-motivated. They should be
self-motivated by training.
Basic Bank has only 27 branches, which are not so satisfactory to
serve the country widely. It requires more branches throughout

the country.
Some banking operations are still operated in manual basis rather
than computer system that take more time. Computer should be
used in all their activities.
DD, TT takes more time to operate. It should minimize time.
We require some valuable information for the purpose of making
Internship report but these kinds of information is not available.
We strongly suggest helping us in this matter.
[7.3]
The BASIC Bank Limited has been trying to operate its business successfully in
Bangladesh since 1994. Basic Bank has already developed goodwill among its
clientele by offering its excellent services through General banking, Credit
division and Foreign Exchange divisions. This success has resulted from the
dedication, commitment and dynamic leadership among its management over the
CONCLUSION:
Page 100 of 101

periods. The working atmosphere of the BASIC Bank Limited is very simulating.
During the short span of time of its operation, the bank has been successfully to
the position itself as a progressive and dynamic financial institution in the country
due to the following reasons:
Although there was huge loss in the establishment period of the bank due to huge
sunk cost and operating cost, from the second year the bank was gradually able to
reduce cost proportionately through an effective management.
Interest expanses of the bank are reducing proportionately compared to interest
income due to huge accumulation deposits as a result of increasing number of
depositors. The number of depositors and the amount of deposits lie in the upward
trend due to offering attractive services to the customers.
Other income of the bank is also going up every year due to the increase of
commission, exchange and brokerage fees in the foreign exchange section.
Foreign exchange of the bank is operating effectively.
Operating expenses of the bank increasing every year compared to the growth in
deposits.
All this together with its adoption of modern trend of Banking system has enable it
to turn out as potential profiteering financial Institution. My course of internship in
this Bank has been very valuable.
Page 101 of 101

THE END
BASIC Bank Limited
101 of 101
Displaying Internship-Report-on-General-Banking-of-Basic-Bank.doc.

Allah

Загружено:

Сведения о документе

Оригинальное название

Авторское право

Доступные форматы

Поделиться этим документом

Поделиться или встроить документ

Параметры публикации

Этот документ был вам полезен?

Это неприемлемый материал?

Авторское право:

Доступные форматы

Allah

Загружено:

Авторское право:

Доступные форматы

Page 1 of 101

PART 2 [Company Profile]

[4.5] IBCA &amp; IBDA 67

[7.2] Recommendation 103

[T-7] Interest Table of BCD 39

This study is an attempt to produce a constrictive report performance of BASIC

The main objectives of education are to acquire knowledge. To acquire knowledge

of its net profit before tax to Capital Fund as

The Managing Director is an ex-officio member of the Board of Directors. There

Heads of Departments. Consequently, quick decision making in disposal of assess

[2.6] [ORGANOGRAM OF BASIC BANK]

to provide the customers with the best possible services.

Money counting &amp; Money checking machine making cash transactions

BRANCH NETWORK OF BANGLADESH:

characteristic most employees are comparatively young in age yet mature in

Chart:2. Deposit Mix in 2006:

to deposits whereby depositors can withdraw the after term over.

Passport sized picture

Name of board members, and

THE NAMES OF THE DIVISIONS ARE:

Cater training needs of the various categories of the employees

Human resources development division performs following

There are two departments namely: -

Inspect, supervise and monitor implementation of projects,

Audit &amp; Inspection division is headed by a DGM. There are 6

Appraise system and procedures for updating.

legal prints, drafting lease deeds, checking and verifying

compensating for the banker.

or person(s) who will operate the Account duly attested by the

Certified copy of Memorandum &amp; Articles of Association by

Debentures of the company.

conditions of the will, affecting the account.

the personal account of the executor nor he should allow the

administrator fresh letter of administrator is necessary.

Two copies of passport size photograph of the Account holder(s) /

Permission from Board of Investment.

CAUTIONS: Same as Joint/Individual Account.

arises minor cannot be liable for any contract.

be written carefully. If her husband is service holder then information

operated on or transferred under the instructions of any

and examines the document

Issuance of Fresh check book: -

BOOK NUMBER IN THE

branch through D.D, &amp; T.T.

Note: Inward &amp; Outward T.T.s copy enclose in appendix.

by cancellation: 1. The purchase should submit a written request for refund

the pay order issue register.

Before introduction of the present concept of Clearing House, the

the members of the clearing house of different Banks within the

Stapling the instruments with the schedule.

instruments to Bangladesh Bank Clearing House are as under:

1 st Clearing, Dhaka Date:

Debit: SB / CD / CC / STD A/C of the clients, Pay Order A/C / D.D.

Foreign exchange is a process, which is converted one national currency into

or drawn in Indian currency but payable in any foreign currency.

have lower average costs of productions as the volume of

countries for various reasons. One country may have a sound

FOREIGN EXCHANGE AND FOREIGN TRADE OPERATIONS:

FUNCTIONS OF AUTHORIZED DEALERS:

within prescribed period of 04 months.

of the branch may allow the carrier company to draw the

Restrictive governmental policies

Vat registration certificate

[4.5] IBCA & IBDA 67

Money counting & Money checking machine making cash transactions

Audit & Inspection division is headed by a DGM. There are 6

Certified copy of Memorandum & Articles of Association by

branch through D.D, & T.T.

Note: Inward & Outward T.T.s copy enclose in appendix.