The Performance of National Bank Limited

Prepared For: Rubaiyet H Khan School of Business Administration Victoria University of Bangladesh Barek Mansion 50/11/A, Panthapath Dhaka-1205. Email: rubaiyet.khan@gmail.com Supervisor: Miss: Alian Officer National Bank Limited Uttara Branch, Dhaka-1230. Prepared By: Abu kawsar B.B.A 4th batch Date:

Victoria University of Bangladesh Barek Mansion 50/11/A,Panthapath Dhaka-1205 Preface

National Bank Limited is regarded as the pioneer in the private sector banking of Bangladesh. National Bank started its journey with the noble vision of diversifying banking activities into different activities of client service. The bank is also committed to fulfill its responsibilities to the society and the country. Banking is not only a profit-oriented commercial institution but it has a public base and social commitment. Admitting this true NBL is going on with its diversified banking activities. NBL introduced Monthly Savings Scheme, Special Deposit Scheme, Consumer's Credit Scheme and Savings Insurance Scheme etc. to combine the people of lower and middle-income group. A team of highly qualified and experienced professionals headed by the Managing Director of the Bank who has vast banking experience operates bank and at the top there is an efficient Board of Directors for making policies.

Acknowledgement
In preparing a report one needs a number assistance and guidance from reliable sources. This report also stands on the basis of such efforts. I have pleasure to express my gratitude to the internship and placement committee for arranging such a program from which I have carried a lot of practical experience. At the

very outset, I would like to express my profound respect to my honorable teacher, professor Rubaiyet H Khan who is my Supervisor School of Business Administration Victoria University of Bangladesh, for giving me valuable time and all necessary guideline. His continuous supervision has inspired me to make a more feasible report on depth analysis. In preparing the report, I received active co-operations from the VP, second officer, Officer of NBL I sincerely express my heart-felt gratitude to them for their co-operation, which helped me to conduct and complete this report. I extend thanks to Miss: Alian Officer of National Bank limited. I am also like to thank our librarian Mr.Md:.Zakir Hossain who helped me very much by providing relevant information about making this research report. I would be ungrateful if I dint divulge that he assisted me in several ways in making this report; providing some important books on banking and some books on marketing and finance, sharing, consent and given some advise of making a research report. I am also grateful to our laboratory in-charge MR.Imam Hossain who also helped me very much about making some figures on this report. I would also like to thank our Deen M.Mukkaram Hossain , because his association during my BBA program encourage me to do well in the BBA examination. He always insisted on us to do good result in the BBA course. He assisted me giving valuable advice, which would be the key to success in my near for my job field. However this report suffers from many shortcomings. Moreover, I have exerted my best effort in preparing this report. I seek excuse for the errors that might have occurred in spite of my best efforts. Letter of transmittal Date: The Head of Department The School of Business Victoria University of Bangladesh Panth Path, Dhaka. Sub: Submission of Internship Report. Dear Sir, It gives me great pleasure to submit the report on Performance of National Bank Limited, which is a partial requirement of my course. During the service period of my experience, I had a study on performance of National Bank Limited and share my ideas on this topic through this report. I am very grateful to National Bank and you for giving me the opportunity to carry out the study.

Sincerely, Abu Kawsar ID- 110501011 BBA 4th Batch Victoria University of Bangladesh Pantha Path, Dhaka. Letter of the organization

Executive Summary
National Bank started its journey with the noble vision of diversifying banking activities into different activities of client service. The bank is also committed to fulfill its responsibilities to the society and the country. National Bank Limited has its prosperous past, glorious present, prospective future and under processing projects and activities. Established as the first private sector Bank fully owned by Bangladeshi entrepreneurs, NBL has been flourishing as the largest private sector Bank with the passage of time after facing many stress and strain National Bank Limited was born as the first hundred percent Bangladeshi owned Bank in the private sector. The then President of the People's Republic of Bangladesh Justice Ahsanuddin Chowdhury inaugurated the bank formally on March 28, 1983 but the first branch at 48, Dilkusha Commercial Area, Dhaka started functioning on March 23, 1983 Now NBL is on line to establish trade and communication with the Prime International banking companies of the world. As a result NBL will be able to build a strong root in international banking horizon. Bank has been drawing arrangement with well conversant money transfer service agency "Western Union". It has a full time arrangement for speedy transfer of money all over the world. Table of contents Name of the Tropics Part -01 Title page Preface Acknowledgement Letter of transmittal Letter from the organization Executive Summary Name of the Tropics Part -02(Body of the Report) Introduction:Objective of the Report Mission

Vision Nature of the problems Origin of the Report Limitation of the report Methodology what I have applied to prepare this Report Sources of data i) Primary data ii) Secondary data Organizational profile a) Overview of National Bank Ltd. b) Environment of NBL Bank. c) Organization structure. d) Board of director. e) Hierarchy of the Bank. f) Division of NBL g) Branch location all over Bangladesh. My learning / Observations: General Banking Individual Account Joint Account Partnership current account. Public limited current account. Limited company current account. Proprietorship current account General procedure of opening account Demand deposits Current Deposit Time Deposit. Responsibility to Depositors. Interest rate on FDR. Short-time Deposit. Monthly Saving Scheme. Saving Insurance Scheme. Fixed Deposit. Foreign Exchange Division: Import Parties to the L/C Steps for import L/C Operation Account procedure in case of L/C Opening. Export. Foreign remittance. Clearing. Outward and inward clearing.

Writing of Advices. CCS loan E/Cash A/C Investment Division: Investment Investment policy Investment in different sectors Process of loan Other activities of National bank ltd Credit card. NBL ATM service. Western Union Money Transfer. Issuance of DD, TT & PO.DD (Demand Draft). TT (Telegraphic Transfer).PO (Pay Order). Daily activities of Bank. Performance of National Bank limited Balance Sheet at 31 December 2007 Profit and Loss Statement for the Year Ended 31 December 2007 Cash flow for the period ended December 31st, 2007 Five Year's Performance at a Glance. My Opinions: Problems Identified Global Economy. National Economy. Agriculture & Services sectors. Recommendation Conclusion. Part -03 (Appendices): Bibliography Books: dated Periodicals and journals Reports Booklets, Pamphlets, Brochure Others Blank Questionnaire

Introduction
Objectives: To provide standard financial services Profit Maximization Objective of the Report The main objective of this report is to overview performance of National Bank ltd. Every student is required to do internship program in a well-reputed organization for 3 months, after completing all the required courses. After the

internship period, each student or intern has to submit a report about the respective organization. I have completed my internship program in National Bank Ltd. And this report is about this bank. As one of the main objectives of internship is to gather job experience, I have tried to put some of the experiences that I have learnt from my internship in this report. The specific objectives of this report are o To present an overview of National Bank Ltd. o To appraise the performance of National Bank Ltd. o To apprise financial performance of National Bank Ltd. o To identify the problems of National Bank Ltd. o To recommend/ remedial measures of the development of National bank Ltd. Mission: To obtain a suitable position in the banking sector of Bangladesh Vision: A Bank for Performance with Potential Nature of the problems: Have to discuses performance of National Bank Ltd. Have to discuses how there marketing performance. How employees are improve themselves about banking activities. How they help our rural peoples. How they do our social develops. Origin of the Report: The purpose of this report is to focus practical Experiences of my day-to-day work as a part of my internship period. Limitation of the report: The present study was not out of limitations. But as an internee it was a great opportunity for me to know the banking activities in Bangladesh especially national bank limited. Some constraints are appended below: The main constraint of the study is inadequate access to information. The employees did not disclose much information for the sake of the confidentiality of the organization. Since the banks personally were busy, they could provide me very little time. The clients were too busy to provide me much time for interview. Though I have prepared many reports before, I had no experience of internship. So inexperience is one of the main constraints of the study. Limitation of time was a major constraint in making a complete study, due to time limitation. The duration was only twelve weeks. It was too limited to cover all the banking area. Many aspects could not be discussed in the present study.

Lack of comprehension of the respondents was the major problem that created a lot of confusion regarding verification of conceptual question. Confidentiality of data was another important barrier that was faced during the process of this study. As being an intern, it also created some problems as I was unable to acquire hands-on-experience in all the departments, due to the banks policy of maintaining secrecy and also because I did not get the opportunity in all the departments. Methodology what I have applied to prepare this Report Observation Projection Techniques Depth Interviews Interaction with the Customers and Colleagues Methodological Aspect: Sources of Data o Doing practical work in different desks. o Study of old files/documents/formats. o Personal investigation. o My colleagues and Customers. o Collection of Data from different statements and abstracts. o Internet, Brochures, annual report etc. Both the Secondary and Primary Sources have been used to collect data for this research paper. Collection of Primary Data: Many of the data and information were collected from my practical experience and queries from the executives while doing our assignment period at National Bank Ltd. Information and data regarding products & services, interest rates & charges, banking operations, organization structure, management personnel, and policies were collected from these sources Collection of Secondary Data: Data regarding the operations of National Bank Ltd. and analysis of financial statement were collected from secondary sources like annual report, Brochures, Manuals and Publications of National bank Ltd. Organizational profile: National Bank Limited is regarded as the pioneer in the private sector banking of Bangladesh. National Bank started its journey with the noble vision of diversifying banking activities into different activities of client service. The bank is also committed to fulfill its responsibilities to the society and the country. National Bank Limited has its prosperous past, glorious present, prospective future and under processing projects and activities. Established as the first private

sector Bank fully owned by Bangladeshi entrepreneurs, NBL has been flourishing as the largest private sector Bank with the passage of time after facing many stress and strain. The member of the board of directors is creative businessman and leading industrialist of the country. To keep pace with time and in harmony with national and international economic activities and for rendering all modern services, NBL, as a financial institution automated all its branches with computer network in accordance with the competitive commercial demand of time. Moreover, considering its forth-coming future the infrastructure of the Bank has been rearranging. The expectation of all class businessman, entrepreneurs and general public is much more to NBL. Keeping the target in mind NBL has taken preparation to open new branches by the year 2000-2001. The emergence of National Bank Ltd. in the private sector is an important event in the Banking arena of Bangladesh. When the nation was in the grip of severe recession, Govt. took the farsighted decision to allow in the private sector to revive the economy of the country. Several dynamic entrepreneurs came forward for establishing a bank with a motto to revitalize the economy of the country. National Bank Limited was born as the first hundred percent Bangladeshi owned Bank in the private sector. From the very inception it is the firm determination of National Bank Limited to play a vital role in the national economy. We are determined to bring back the long forgotten taste of banking services and flavors. We want to serve each one promptly and with a sense of dedication and dignity. The then President of the People's Republic of Bangladesh Justice Ahsanuddin Chowdhury inaugurated the bank formally on March 28, 1983 but the first branch at 48, Dilkusha Commercial Area, Dhaka started functioning on March 23, 1983. The 2nd Branch was opened on 11th May 1983 at Khatungonj, Chittagong. Today they have total 76 Branches all over Bangladesh. Since the very beginning, the Bank exerted much emphasis on overseas operation and handled a sizeable quantum of homebound foreign remittance. The Bank established extensive drawing arrangement network with Banks and Exchange Companies located in important countries of the world. Expatriates Bangladeshi wage earners residing in those countries can now easily remit their hard-earned money to the country with confidence, safety and speed. In the year 2000, the Bank managed to procure foreign remittance business to the tune of US$88.44 million dollar equivalent to Tk.4,662.10 million compared to Tk.3,986.20 million in the previous year indicating a growth of 16.96% Considering the need for remittance by the expatriates Bangladeshis residing abroad the Bank during the year established drawing arrangement with the Pacific Bank Berhad, Malaysia (now May Bank), Security Exchange Company Limited, State of Kuwait and Dalil Exchange, State of Bahrain.

Our Bank invested 25% equity in Gulf Overseas Exchange Company LLC, a joint venture Exchange Company in Oman, operating since November, 1985 under the management of our Bank. The Bank received Riyal Omani 12,450 equivalent to Tk.1.74 million as dividend for the year 2000. A Representative Office was established in Yangon, Myanamar in October, 1996 by our Bank and obtained permission from the Government of Bangladesh to handle border trade with Myanmar. Opportunities are being explored for further business avenues there. Now NBL is on line to establish trade and communication with the Prime International banking companies of the world. As a result NBL will be able to build a strong root in international banking horizon. Bank has been drawing arrangement with well conversant money transfer service agency "Western Union". It has a full time arrangement for speedy transfer of money all over the world.

Board of Directors
MS. PARVEEN HAQUE SIKDER : Chairperson MR. MD. MAHBUBUR RAHMAN KHAN : Director MR. MD. KHALILUR RAHMAN (MAZNU) : Director MRS. NAHEED PERVIN : Director MR. ZAKARIA TAHER : Director MR. SHAHADAT HOSSAIN : Director MR. M. G. MURTAZA : Director MR. ATAUL HUQ : Director MR. A. M. NURUL ISLAM : Director MR. SALIM RAHMAN : Director MR. S. M. SHAMEEM IQBAL : Director PROF. MAHBUB AHMED : Director CAPT. ABU SAYEED MONIR : Director MR. M. A. MAZID KHAN

: Managing Director Hierarchy of the Bank: CHAIRMAN MD DMD EVP SVP VP AVP Officer Gr.-I Officer Gr.-II Officer Gr.-III Officer Gr.-IIIA Officer Gr.-IIIB Junior Officer Staff Division of NBL 1. Audit & Inspection Division. 2. ATM Card Division 3. Board Secretariat 4. Budget & Monitoring Division. 5. Credit Division-1. 6. Credit Division.-2. 7. Credit Card Division. 8. Classified Loan Recovery Division. 9. Financial Administration Division. 10. General Banking Division. 11. Human Resources Division. 12. International Division. 13. Information System & Technology Division. 14. Law & Recovery Division. 15. Marketing Division. 16. Merchant Banking Division. 17. Public Relations Division. 18. Protocol Division. 19. Reconciliation Division. 20. System & Operations Division. Branch location all over Bangladesh DHAKA DIVISION BARISHAL DIVISION RAJSHAHI DIVISION Dilkusha Commercial Area Barishal Rajshi

Uttara model town Kawran Bazar CHITTAGONG DIVISION Dhanmondi Khatungonj, Chittagong Banany Mymenshing Division Gazipur Division Mymenshing Tongi Joidebpur bazaar Service sectors: Services sector registered 5.8% growth in this year. In 2007 it was 5.4%. Banking sector: Banking sector is a key factor for the national economy. It pays a very important role in attaining a high GNP growth rate by creating job opportunity, Inviting & encouraging investment. At present 4 government banks. 5 specialized banks, 30 private banks and 10 foreign banks are operating in the country. Deposit in total banking sector was tk1,12,793 corer, including this our banking sector comprises taka 88,662 core as loan, three core depositor / clients and 76 lac investment clients. Various steps of reforms have been taken to ensure transparency, dynamistic & stronger role of banks in the national development. Some of those are mentioned below: Disclosure requirements of financial information were substantially enhanced for banks as per the international accounting standard (IAS). Financial statement of the bank will be published in national dailies & website of the bank. Hard steps have been taken to recover defaulted loans. In this year defaulted loan stood at 24% which was 41% in 2006. The minimum capital requirement for bank has been raised to tk 100 crores from 20 crores. Capital adequacy threshold for banks has been raised from 8%to 9%. Lowering the rate of interest can potentate economic development. Bangladesh bank reduced its bank rate from 7% to 6% and fixed SLR to 16% from 20%for all commercial banks. So 1% to 2% reduction in interest rates was noticed in every sector. Bangladesh bank introduced floating exchange rate for Dollar from 31 mat this year. Through all these reforms banking sector has turned into more powerful dynamic and transparent form. My learning/Observation: General Banking Division Uttara Branch The division of general banking plays an important role in all commercial banks.

Its mainly a liability side. National Bank Ltd bank facilitates sections and facilities of general banking. General banking division can be functioned in the following way. One who want to open an account he has to fill up an account opening form. This form is a legal contract between the bank and prospective customers. The rules and regulations for opening of an account vary from customer to customer, if he wants to open different types of accounts. First of all various types of customers such as individual, joint, proprietorship, partnership , private limited company, public limited company, associations, clubs, societies, trusts etc. can open their various types of accounts as their requirements which are mentioned below Individuals Account Savings Deposit Account: If individual wants to open an account than introducers must be needed to open current and savings account that has current or savings account in the bank. The introducer must be signed in the two passport size photographs. Individual must be submitted his/her certificate of word commissioner or the photocopy of the passport (valid). Individual must have a passport size photograph of his nominee signed by him. Individual must have filled up the KYC form (Know Your Customer) for the full-fill of requirement of Bangladesh Bank. Joint Account: This account can be opened by 2 persons or more than 2 persons and each person should fulfill the requirements of individual account. The account holders should mention the mode of operation Partnership current account: For opening this A/c the Conditions are It may be CD A/c It must be opened by the name of the Partnership Firm Partnership Deed must be submitted with the A/c opening form Specific Rubber Stamp of the Firm Photographs of the A/c operative persons Our Branch is collecting two types of deposits, such as: Demand deposits Time Deposits. Limited Company current account: To open an A/c in the name of a Company the following documents and papers must be submitted with the A/c opening form: Memorandum & Articles of Association of the Company Certificate of Incorporation

Resolution of the Board to open A/c with the Bank List of Directors with Signatures Photographs of the operative persons Public Limited Company Current A/c: To open an A/c in the name of a Public Limited Company, the following documents and papers must be submitted along with the A/c opening form: Memorandum & Articles of Association of the Company Certificate of Incorporation Resolution of the Board to open A/c with the Bank List of Directors with Signatures Photographs of the operative persons Certificate of Commencement of Business. Proprietorship current account: It may be CD A/c (Current Proprietor A/c) To open a Proprietorship A/c ---Proprietor of the firm must fill up the Current Proprietorship A/c opening form An Introducer acceptable to Bank must introduce the A/c. Photographs of the Proprietor The specific Rubber-stamp of the Proprietorship firm Valid Trade License General procedure of opening account: Step 9: Account is opened Step 8: Bank preserves the specimen signature card to verify the signature of the client. Step 7: After deposition one checkbook is issued. Step 6: they issue deposit slip and deposit must be made. Step 5: if they are satisfied, they will open the account. Step 4: the authorized officer scrutinizes the application form. Step 3: Application submits the form dully signed by a introducer and along with 2 passport size photo signed by the introducer. Step 1: Bank provides account opening form to the prospective customer or applicant. Demand deposits: These sorts of Deposits are payable without any notification. Our branch is collecting the above deposits through the following way: By opening of; Current account & Saving account Current Deposits: (CD A/c) Current Deposits (CD A/c) is a running A/c where a customer can draw money frequently/continuously. Funds of CD A/c shall be payable on demand. Bank does not allow any interests on CD A/c. CD A/c is generally opened by Business

men, Public Institutions, Corporate Bodies & other organizations who want to operate his A/c numerously & frequently. National Bank Limited provides the following types of current account: Current account for individual (There must be a nominee) Joint current account (There must be a nominee) Time deposits: Time deposits are payable at a fixed date or after notification. Our Branch receives Time deposits through Fixed deposits receipt (FDR), Short-term deposit (STD), MSS (Monthly Saving Scheme), SDS (Special Deposit Scheme) etc. Fixed Deposits (FD) Fixed Deposits (FD A/c) shall be opened for a longer period such as 3 (three) months to 3 (three) years or more. Generally who wants to invest his money safely can open FD A/c. The interest of FD A/c is negotiable & it depends on the volume of deposit and period. At present, our branch is allowing interest from 8% to 10.25% in FD A/c. It may be noted that no introduction is necessary to open FD A/c & The FDR is not negotiable instrument & cannot be transferred by endorsement. Interest rate on FDR: The interest rate of the deposited amount depends on duration and volume of the amount. If duration is long the interest rate is high, and at the same time if the volume of amount is large the interest rate is also high and vice-versa. Period Up to Tk. 50,00,000 Tk. 50,00,000 to Tk. 1,00,00,000 Above Tk. 1,00,00,000 a. 3 months 8. % 8. % 8.50% b. 6 months 8.25% 9% 9.25% c. 1 year 8.50% 9.25% 9.50. % d. 2 year 9.25% 9.50% 10. % e. 3 year 9.50% 10 % 10.50% Short-Term-Deposit (STD): Short Term Deposit or STD Account Opening procedure is similar to that of the current account. The rate of interest on this type of account is 5%. Withdrawals from this type of account require a prior notice of seven days. Special Deposit Scheme For most of the people on fixed income the opportunity to supplement their monthly earning is a golden one. And NBL Special Deposit Scheme gives a customer just that. Under this scheme, customers can deposit money for a term of 5 years. The deposited money is fully refundable at the expiry of the term. At the same time, during the term period they can enjoy a monthly profit corresponding to their

deposited amount. As for instance, under this scheme a deposit of Tk,55,000/gives a monthly income of Tk.500/-. Deposited Amount Monthly Benefit Tk. 55,000/- Tk. 500/Tk. 1,10,000/- Tk. 1,000/Tk. 1,65,000/- Tk. 1,500/Tk. 2,20,000/- Tk. 2,000/Monthly Savings Scheme: This scheme is specially designed for the benefit of the limited income group members. This helps to accrue small monthly savings into a significant sum at the end of the term. So, after the expiry of the term period the depositor will have a sizeable amount to relish on. A monthly deposit of Tk.500/- or Tk.1000/- for 5 or 10 years period earns in the end Tk.40, 100/- or Tk.2, 24,500/- respectively. Monthly Instalment Return after 5 years Return after 10 years Tk. 500/- Tk. 40,100/- Tk. 1,12,500/Tk. 1,000/- Tk. 80,100/- Tk. 2,24,500/Saving Insurance Scheme: This is an uncertain World and the threatening silhouettes of future catastrophes are always looming around. This NBL scheme gives your family protection against the insecurities of the world. This scheme is the first of its kind in Bangladesh. It combines the benefits of regular savings and insurance scheme, so, you get the usual rate of interest on the deposited amount while you enjoy the protection of a comprehensive insurance coverage. Under this scheme, the beneficiary (ies) get equal the deposit in case of natural death of the account holder whereas in the event of accidental death of the account holder the beneficiary (ies) will receive twice the deposit. As for example, if a customer picks up Easy Class (Tk.50,000/-) he/she will get Tk.50,000/- for natural death and Tk.1,00,000/- for accidental death apart from his/her deposited amount and interest. Class Deposit Normal Death Benefit (Including Own Deposit) Accidental Death

Benefit (Including Own Deposit) Easy 50,000/- 1,00,000/- 1,50,000/Convenient 1,00,000/- 2,00,000/- 3,00,000/Classic 2,00,000/- 4,00,000/- 6,00,000/Standard 5,00,000/- 10,00,000/- 15,00,000/Other Activities: Issuance of DD, TT & PO: This Bank offers DD, TT & PO for transferring the funds from one place to another to our Customer. It is Called Inland Remittance. It is one kind of sources of Income of the Branch. Bank can issue DD, TT & PO against cash or Cheque. To issue the above we have to follow some rules & regulations. Issuance of DD. (Demand Draft): DD is a written order from one branch to another branch of the same Bank. It is not payable to bearer of the instrument. In practice, we can not issue DD between Branches within the same city. we need to complete the following steps for issuing a DD Issuance of TT. (Telegraphic Transfer) TT is one kind of telegraphic/Telephonic message order to pay some one the fund between two Branches of the same Bank. It is the quickest & easiest way to transfer fund from one place to another place. The charges for issuing of DD & TT of our Branch DD/TT 0:. 10% of the total DD/TT Amount Telex ChargeTk: 40 fixed VAT : 2% of Commission amount Issuance of PO (Pay Order) PO is a written order, issued by branch of Bank to pay a certain amount to a specific person or organization. Whose favor we issue PO is called Payee. Some time PO is sold to individual on payment of value, and then the individual is called the purchaser. Credit Card: Through its Credit Card, National Bank Limited has not only initiated a new scheme but also brought a new life style concept in Bangladesh. Now the dangers and the worries of carrying cash money are memories of the past. Credit Card comes in both local and international forms, giving the client power to buy all over the World. Now enjoy the conveniences and advantages of Credit Card as you step into the new millennium. NBL ATM Service : National Bank Limited has introduced ATM service to its Customers. The card

will enable to save our valued customers from any kind of predicament in emergency situation and time consuming formalities. NBL ATM Card will give our distinguished Clients the opportunity to withdraw cash at any time, even in holidays, 24 hours a day, 7 days a week. Western Union Money Transfer: Joining with the world's largest money transfer service "Western Union", NBL has introduced Bangladesh to the faster track of money remittance. Now money transfer between Bangladesh and any other part of the globe is safer and faster than ever before. This simple transfer system, being on line eliminates the complex process and makes it easy and convenient for both the sender and the receiver. Through NBL Western Union Money Transfer Service, your money will reach its destination within a few minutes. Western Union is a global leader in Money transfer and message services. With the help of western Union a consumer or a Businessman can transfer money or make payments more quickly and more securely from one part to another part of the world. There are 1, 17,000 Western Union Agent Locations over 185 countries in the world. Its the largest network in the world. Western Union markets transact more than one quarter Billion money every year. In Bangladesh National Bank is the only agent of transferring money. In Bangladesh we can only receive money from abroad but we can not make payment or transfer money from our country to another country of the world on behalf of our customer. At our NBL Uttara Branch we make payment to our customer through western Union with the help of our Foreign Exchange Branch The procedures of Transfer Money through Western Union: In our Branch, we take one of the following documents as a Valid ID before the payment of western Union. Photocopy of 1st three pages of Valid Passport. In case of renewal, the photocopy of renewal page will be added. Nationality Certificate with Photograph from Chairman/Commissioner/MP. The said person will verify the signature photograph of the applicant. Banks Certificate with photograph A/c Maintaining with the Bank. The Authorized Officer/Branch in Charge will verify the signature & photograph of the applicant. Any A/c Holder of our Branch. In this case we will use the A/c Number as ID Voter ID. Service ID (In case of reputed service holder)

Foreign Exchange:
Modes of the Foreign Exchange:

Various services regarding foreign exchange provided by NBL can be segregated into four broad categories: Import Export Foreign Remittance Issuing T/C & Endorsement of Dollar IMPORT: This section perform the major function of import procedure in favor of its clients and provide import financing through guarantee, LIM, PAD, LTR etc. Letter of Credit: Letter of Credit (L/C) is a letter from the importers bank to the exporter that the bills if drawn as per terms and conditions are compiled with will be honored or accepted for deferred payment on presentation. Requirements of opening an L/C are: Trade license, IRC, Membership Certificate, TIN and VAT Certificate, Bond License, Memorandum of Articles (Incase of a limited co.), Registered Deed (Partnership Firm), Resolution and Photographs Parties To Documentary Credit: Commercial Parties: a) Applicant: The applicant is normally the buyer of the goods, i.e. importer who requests his bank to issue a L/C in favor of a named beneficiary against tendering of certain documents. b) Beneficiary: The beneficiary is normally the seller of the goods who receives payment under documentary credit if he has complied with terms and conditions. Bankers: Parties to documentary credit may be an issuing bank, an advising bank, a confirming bank, a reimbursing bank or a nominated bank. a) Issuing bank: The issuing bank or the opening bank is one, which issues the credit. b) Advising Bank: The Advising Bank advises the credit to the beneficiary thereby authenticating the genuineness of the credit. It is normally situated in the country/place of the beneficiary. c) Confirming Bank: A Confirming Bank is one which adds its guarantee to the credit opened by another bank, thereby undertaking the responsibility of

payment/negotiation/acceptance under the credit in addition to that of the Issuing Bank. d) Nominated Bank: A Nominated Bank is that bank nominated by the issuing bank to pay, to incur a deferred payment liability, to accept drafts or to negotiate credit. e) Reimbursing Bank: A Reimbursing Bank is the bank authorized to honor reimbursement claims in settlement of negotiation/acceptance/payment logged with it by the negotiating/accepting/paying Bank. Other related parties: a) Issuer: The Issuer has the responsibility for issuing the goods as provided in the credit. b) Carrier: The Carrier is responsible for safe arrival of the goods at the destination. Types of documentary credit: Revocable D. credit Irrevocable D. credit Confirmed and unconfirmed D. credit Fixed, revolving and installment credits Standby credit Red clause Back to back credit Transferable credit Credit options Documents in a documentary are Commercial Invoice, Certificate of origin, Analysis/quality certificate, packing list, Draft, and Transport documents and Insurance Documents. Steps for import L/C operation 8 steps operation: Step-1 Registration with CCI &E For engaging in international trade, even trader must be first registered with the chef controller of import and export. By paying specified registration fees to the VVI &E the trader will git IRC/ERC (import/Export registration certificate). For open L/C with bank this IRC is must. Step-2 Determination terms of credit The terms of the letter of credit are depending upon the contract between the importer and exporter. The terms of the credit specify the amount of credit, name and address of the beneficiary and opener, tenor of the bill of exchange period and mode of shipment and of destination, nature of credit, expiry date name and number of sets of shipping documents etc. Step- 3 proposal for opening L/C To have an import LC limit an importer submits an application to department to National bank ltd bank. The proposal contains the following particulars:

Full particulars of the bank account Natured amount of limit Required amount of limit Payment terms and conditions Goods to be imported Officered security Repayment schedule Step- 4 Application by importer to the banker to open letter of credit For opening L/C the importer is required to fill up a prescribed application form provided by the banker along with the following documents: 1. L/C Application form 7. Authority to debit account 2. Filled up LCA form 8. Filled up amendment request Form 3. Demand promissory Note 9. IMP form 4. pro-forma invoice 10. insurance cover note and money receipt 5. Tax identification number 11. Membership certificate 6. Import registration certificate 12. rate fluctuation undertaking Step-5- Opening of L/C by the bank for the opener: Taking filled up application form the importer. Collects credit report of exporter from exporters country through his foreign correspondence there. Opening bank then issues credit by air mail / TELEX / SWIFT followed by L/C advice as asked by the opener through his foreign correspondent or branch as the case may be at the place of beneficiary. The advising bank advises the L/C to the beneficiary of his own form where it is addressed to him or merely hand over the original L/C to the beneficiary if it is so addressed. Step- 6 shipment of goods and lodgment of documents by exporter: Then exporter ships the goods to the destination of the importer country. Sends the documents to the L/C opening bank through his negotiating bank. Generally the following documents are sent to the opening banker with L/C: 1. Bill of Exchange 6. Packing List 2. Bill of Lading 7.Advice Details of shipment 3. Commercial invoice 8. Pre-shipment inspection certificate 4. Certificate of origin 9. Vessel Particular 5. A certificate stating that each packer contains the description of goods over the packet. 10. shipment certificate Step- 7 Lodgment of documents by the opening bank from the negotiating bank:

After receiving the documents, the opening banker scrutinizes the documents. If any discrepancy found, it informs the importer. If importer accepts the fault, then opening bankers call importer retiring the document,. At this time many thing can happen. These are indicated in the following: Discrepancy found but the importer accepts o problem occurs in lodgment. Discrepancy found and importer not agreed to accept in this case, importer protest and send back all the documents to the exporter and request his to make in the specified manner. Here banker is not bound to pay because the documents send by exporter is not in accordance with the terms of L/C. Documents are OK but importer is willing to retire the documents in this case bank is obligated to pay the price of exported goods. Since importer did not pay for bill of exchange, this payment by bank is one kind of credit to the importer and this credit in banking is known as PAD. Everything is OK but importer fails to clear goods from the port and request bank to clear- in this case banks clear the goods and takes delivery of the same by paying customs duty and sales tax ect. So, this expenditure is debited to the importers account and in banking it is called LIM. Step- 8 Retirements The importer receives the intimation and gives necessary instruction to the bank for retirement of the import bills or for the disposal of the shipping document to clear the imported goods from the customs authority. The importer may instruct the bank to retire the documents by debiting his account with the bank or may ask for LTR (loan against Trust Receipt). * Accounting procedure in case of L/C Opening. When the officer thinks fit the application to open a L/C, giving the following entries creates the following chargesParticulars Debit/credit Charges in Taka Customers A/C Debit L/C Margin A/C Credit Commission A/C on L/C Credit 50% VAT Credit 15% on commission SWIFT Credit 3000 /= Datamax Credit 1000 /= Stamp Credit 150 /= Postage Credit 300 /= DHL / Courier Credit 1500 /= * After opening of L/C some times alteration to the original terms and conditions

become necessary. These amendments involve changes in A. Unit price B. Extension of validity of the L/C C. Documentary requirements etc. Such amendments can be affected only if all the concerned parties agree i.e. the beneficiary, the importer, the issuing bank and the advising bank. For any amendment the importer must request the issuing bank in writing duly supported by revised / Performa invoice. The issuing bank then the advises the required amendment to the advising bank. L/C amendment commission including postage is charged to the clients A/C. _ Loan against Trust Receipts ( LTR) Advance against a Trust receipt obtained from the customers are allowed to only first class tested parties when the documents covering an import shipment or other goods pledged to the bank as security are given without payment. However, for such advances prior permission / sanction from Head Office must be obtained. The customer holds the goods or their sale proceeds in trust for the bank, till such time, the loan allowed against the Trust Receipts is fully paid off. The trust receipt is a document that creates the bankers hen on the goods and practically amounts to hypothecation of the proceeds of sale in discharge of the lien. _ Loan against imported Merchandise (LIM) Advance (loan) against the security of merchandise imported through the bank may be allowed either on pledge or hypothecation, of goods, retaining margin prescribed or their landed cost, depending on their categories and credit restriction imposed by the Bangladesh bank . Bank shall also obtain a letter of undertaking and indemnity from the parties, before getting the goods cleared though LIM account. _ Payment Procedure of Import Documents This is the most sensitive task of the import Department the official s have to be very much careful while making payment. This task constitutes the following: _ Date of payment Usually payment is made within seven days after the documents have been received. If the payment is become deferred, the negotiating bank may claim interest for making delay. _ Preparing Sale Memo A sale memo is made at B.C rate to the customer. As the T.T &O.D rate is paid to the ID, the difference between these two rates is exchange trading. Finally, an inter branch exchange trading credit advice is sent to ID. _ Requisition for the Foreign Currency For arranging necessary fund for payment a requisition is sent to the international department.

_ Transmission of Message Message is transmitted to the correspondent bank ensuring that payment is being made. EXPORT: Export is the process of selling goods and services to the other country. It has an immense contribution to generating income for the bank. Requirements for the export procedure: In order to export any goods or service to overseas, the exporter should have attested the photocopies of the following documents with the up to date export registration certificate. Other requirements are Commercial Invoice, Certificate of origin, Beneficiary certificate (where the exporter tells about the goods he/she wants to export), Beneficiary fax (confirmation of sending goods to the importer), Packing list, Draft, Transport documents and Insurance Documents. If the bank authority satisfies with all the information provided by the exporter, steps are taken to smooth out the process of export regarding collection of money or opening back to back L/C. Opening back-to-back L/C is a letter of credit backed by the original L/C or the mother L/C to open a new L/C. The bank provides it to the exporter to import the raw material from overseas in order to produce the exportable commodity for the importer. It encourages the exporter to produce more exportable goods. In this case the bank offers some additional facilities i.e. about 120 days to pay back the money where in case of import. L/C is issued for 60 days. FOREIGN REMITTANCE: Foreign Remittance refers to the transfer of fund from one country to another through channel. Foreign Remittance is an important sector where NBL earns a lot of foreign exchange every year. Drawing Arrangements: Drawing Arrangements is made to facilitate remittance through concluding accounting relationship between a bank and corresponding, or an exchange house, which may exist in the following three forms of accounts. 1. NOSTRO A/C: A foreign currency account that a local bank maintains with another bank in abroad. 2. VOSTRO A/C: An account, which a foreign bank maintains with a local bank, is called VOSTRO A/C. 3. LORO A/C: An account, which a third party maintains with a foreign bank, is known as LORO A/C. There are two types of Remittance: a) Foreign Inward Remittance: The remittance in foreign currency, which is received from outside the country to our country is known as Foreign Inward Remittance. The remittance can be performed in two ways:

Visible Inward Remittance-such as export proceeds Visible Inward Remittance -such as family maintenance consultant fee etc. Cash is remitted through TT (Telegraphic Transfer), DD (Demand Draft) etc. b) Foreign Outward Remittance: Foreign Outward Remittance is funds remitted to overseas on behalf of the client. It is of two types: Visible Outward Remittance-such as, payment against import, sale of travelers cheque etc. Visible Outward Remittance-such as, membership fee, subscription fee etc. Issuing T/C & Endorsement of Dollar NBL is an authorized dealer of American Express T/C. at the same time; they can sell T/C and dollar. Every morning they get a telex from the Head Office, which carries the rate of the foreign currency transaction of the day. The payment to the customer is made instantly by debiting foreign bill purchase account. Clearing: Clearing is one of the important jobs of a bank. To run the banking business smoothly and to provide serve to customer, every bank has to collect cheques, POs, Drafts, etc which are drawn on other Bank on behalf of their A/c holder. On the other hand, every Bank has to pay against his A/c holders Instrument, which are received from other Banks. In a word, we can say, the bank need to collect or pay money on behalf of its A/c holder against A/c payee instruments. The process by which way the bank collects or pays the money is called clearing. Clearing House: Clearing House is a place where various Banks representatives gather with their Clearing Instrument and settle each others claims. Normally, Clearing house sits in the Central Bank. Where there is no branch of Central Bank, the clearing house sits in a general place selected by the Central Bank. Clearing is held under the supervision of the Central Bank. In our country, Bangladesh Bank controls the clearinghouse. Bangladesh Bank has divided the whole country in various clearing zones such as, Dhaka, Chittagong, Khulna, Barishal etc. Some where Sonali Bank arranges & controls the clearing house as a representative of Bangladesh Bank. Every Bank does not get the clearing facility. To avail the clearing facility every bank and its branches need to become a member of the Clearing House. Our NBL Uttara Branch is a member of Dhaka Clearing House and our clearinghouse sits in Bangladesh bank. We cannot do our clearing jobs directly. We do our clearing jobs through our Head office at Dilkusha C/A, Dhaka. There are two kinds of Clearing as: o Outward Clearing o Inward Clearing Outward clearing:

The A/c holders of our Branch deposit other Banks instrument in their A/c for collection. We collect it through Outward Clearing and credit the proceeds in their A/c. Description of Outward Clearing: Bank does not involve in clearing house directly. They make their clearing through Head office, Dilkusha. They just prepare the Instrument and send it to clearing department of Head Office for collection. On the other hand, the A/c Holder of our Branch gives our Branchs instrument to their party who is not our A/c holder as payment. The party deposits the following instruments in their A/c for Collection through Clearing house. We receive those instruments from Clearing house and make payment on behalf of our A/c holder. This is called Inward Clearing. Except Clearing Instrument the Clearing Department also Collect the following instruments on behalf of the customer. LBC Cheque: LBC Stands for Local Bills Collection. LBC is a process of collection of instrument, which is held between the two different Branches of the Same Bank in the Same Clearing House. For example, if any A/c holder of our branch deposited a cheque which is drawn on our Babu Bazar Branch. In this case we will collect the proceeds through LBC. OBC Cheque OBC stands for Out Wards Bills Collection. Like LBC it is a process of collection of instrument which is held between the two different Branches of the Same Bank in the Different Clearing House/Different City. For example if any A/c holder of our branch deposited a cheque which is drawn on our Agrabad Branch Chittagong. In this case, we collect the proceeds through OBC. Commission of OBC of our Branch Below Tk. 1 Lac 0.15% Above Tk. 1 Lac 0.10% Postage Charge Tk. 10.00 IBC ( Inward Bills Collection) We collect the instrument on behalf of our a customer through LBC/OBC which are drawn on other Branches of our Bank. Like this collection we also make payment on behalf of our customer against LBC/OBC instrument, which are received from other Branch but drawn on our Branch. For example if any A/c holder of our Branch gives a cheque to his customer who maintains a/c with our Babu Bazar Branch & deposited the Cheque in his A/c. Babu bazar Branch will send the said Cheque to our Branch through LBC for collection. Receiving of this kind of Instrument called IBC. Writing of Advices: Every Branch of our bank has to write Advice for updating their inter Branch Transaction. To serve our customer promptly we have to pay or receive deposits on behalf of our other branches. We receive or payment this deposit through

advice in case of Branch to Branch transactions. Suppose, we have received a TT Message from our Khulna Branch to Pay Tk.1000 to Mr. X, one of our A/c Holder. Here, some one deposits money at our Khulna Brach but payment will be made at our Uttara Branch but we can not receive any cash from Khulna Branch. In this case, we will make the payment to Mr. X and send a Responding TT advice to our Khulna after debiting their CIBTA A/c. There are Many kinds of Advice such as Originating Credit Advice: We issue this kind of advice to credit the deposit in the other Branches A/c against their claim such as payment against Clearing, LBC, OBC, Credit Card Fund, E/Cash A/c, PF, WF, Income tax & various kinds of fund transfer. Responding Credit Advice: When we receive credit advice from the other Branches to credit our A/c called Responding Credit Advice. We receive such kind of advice against Clearing, LBC, OBC, Fund Transfer, Cash remittance etc. Originating Debit Advice: We make payments to the Customer against their instrument or documents on request of any other Branches of our Bank by issuing Originating Debit Advice. In our Branch we generally issue the following advice for payment against Western Union Money Transfer, FDD, etc. Responding Debit Advice: When we receive Debit advice from the other Branches to Debit our A/c called Responding Debit Advice. Originating TT Advice: Every day we issue TT, which is drawn on any other Branches of NBL & transfer The TT Message over Telephone or Telex to the drawee Branch for making payment to the TT favouring person. After receiving the message the drawee Branch makes the payment. Next, we send an Originating TT Advice to the Drawee/Responding Branch as a document of the following issued TT. Responding TT Advice: We receive TT message from other Branches of NBL and make payment to the Payee. In this case we are the drawee branch/Responding Branch. As a document we send Responding TT Advice to the TT Originating Branch. Disbursement CCS Loan: The full elaboration CCS is Consumer Credit Scheme. It is one kind of Loan.National Bank's Consumer Credit Scheme gives a great opportunity to buy household and office items on easy installments. This scheme gives you the advantage of part payment to cope with the high price tags of many necessary home and office appliances. Television, Refrigerator, VCR, Personal Computer, Photocopier, Washing Machine, Furniture, Microwave Oven, Car, and a number of other expensive

items are now within your buying range. With this scheme NBL makes better living possible for people living on fixed income. Customers can buy those home and office equipment's without over taxing their budget. Documents required by our Branch against CCS Loan: Application for loan under CCS Undertaking to pay Monthly Installment. Letter of Authority to Debit Account for payment of Monthly Installment of CCS Price Quotation of the Product, which the applicant wants to buy. o Promissory Note o Letter of Guarantee Guarantee Bond from two persons with their photographs acceptable to Bank Two copies of passport size photographs of the Applicant. IBP (Inland bill purchase) Some times to serve our reliable valued clients financially; we purchase their Instrument in cash which is drawn on other Bank Its called IBP. To do the above we have to do the following works: Fund Transfer to E/Cash A/c There are several ATM Card Booth of our NBL from where the ATM Card Holder can draw cash at any time through punching their ATM Card. Every ATM Card holder maintains a link A/c. From the link A/c we have to transfer the fund to E/cash Account to activate the ATM Card. ATM Card is issued by Head Office ATM Card Division. Every day we receive the status of ATM Card holders from ATM Card Division. Investment Division National Bank ltd is a new generation bank. It is committed to provide high quality financial services/products to contribute to the growth of G.D.P of the country through stimulating trade & commerce, accelerating the pace of industrialization, boosting up export, creating employment opportunity for the educate youth , poverty alleviation, raising standard of living of limited income group and over all sustainable socio-economic development of the country. In achieving the aforesaid objective of the bank, investment operation of the bank is of paramount importance as the greatest share of total revenue of the band is generated from it, maximum risk is centered in it and even the very existence of band depends on prudent management of its investment portfolio. The failure of a commercial bank is usually associated with the problem is investment portfolio and is less often the result of shrinkage in the value of other assets. As such investment portfolio not only features dominant in the assets structure of the, it is critically important to the success of the bank also. In view of the above this investment policy and control guidelines of the bank

has been prepared which is subject to amendment, revision, readjustment and refinement from time to time as may be warranted by the change of circumstances due to passage of time to suite the requirement of the bank. Investment policy: The investment policy should be updated annually to reflect changes in the economic outwork and evolution of banks investment portfolio. The investment proposal should be forwarded to head office for sanction with recommendation showing justification that should include the following: a) industry and business segment focus: The bank shall provide suitable investment services & products for the following sectors, which must meet the other requisites as set by the bank from time to time. Investment in Different Sectors: a) Steel & engineering. b) Food & Allied. c) Agriculture. d) Textile & Garments. e) Pharmaceuticals & Chemicals. f) Paper & paper products. g) Service industries. h) Housing Y real Estate. i) Cement. j) Bricks Fields. k) Edible oil. l) Assembling industry. m) Cottage industry. n) Electronic & Electrical Commodities. o) Construction Company. p) Trading ( retail /whole sale) q) Other Every year at the time of investment budgeting a clear indication of banks appetite for growth to be reflected approved investment budget shall be strictly followed for the development of the bank. b) Investment categories:As initiated by Bangladesh bank vide BCD circular no 33 dared 16-11-89 different kinds of lending were subdivided into 11 categories w.e.f 01-01-90, which was subsequently reduced to 9 vide BCD cirucular no.23 dated 09-10-93 and again to 7 prime sectors vide BCD circular no. 8 dated 25-04-94 for fization of rates of profit by the individual banks on competitive basis depending on the cost of funds, prevailing market condition and monetary policy of the country. Investments have primarily been divided into two major groups: I) Izara bill baia: These are the investments made by the bank whith fixed repayment schedules. The term of investment are defined as following:

Short term : up to 12 months Medium term : more than 12 and up to 36 months. Long term : more than 36 month. II) Continuing investments: these are the investments having no fixed repayment schedule, but have an expiry date at which it is renewable on satisfactory performance. Further all categories of investments have been accommodated under the 7 prime categories as under: 1. Agriculture: Investment facilities to the agriculture sector fall under this category. It is subdivided into tow major heads: a) Investment to primary producers: financing under these categories refers to the investment facilities allowed to production units engaged in farming, fishing, forestry or livestock. Investments to processors or traders of agriculture products are not to be categories as agricultural investments. Investments to tea gardens for production are treated as agricultural investment, but investments to tea gardens for export should be treated under the category investment on export similarly medium and ling term investments to tea gardens are categorized as industrial term lending. B) Investment to dealers / distributors: It refers to the financing allowed to input dealers and (or) distributors in the agricultural sectors. Agriculture investment may include short, medium and long investments as well as continuing investment. As such it may fall under the head lzare bill baia / Izara bill baia (HP) / Izara (LF). 2. Izara bill baia for large & medium scale industry: This category of investments accommodate the medium and long term financing for capital structure formation of new industries or for BMRE of the existing units who are engaged in manufacturing foods and services. 3. Small & cottage industry: These are the medium and long term investments allowed to small & cottage manufacturing industries ( Small industry is presently defined as those establishments whose total investment in fixed capital such as land, building machinery and equipment ( excluding taxes and duties) dies not exceed 30 million take and investment in cottage industries also fall within this definition). No short term or continuing investments are to be included in this category. Like the large & medium scale industry it is also allowed in the form of Izara Bil baia / Izarabill baia (HP) /Izara ( LF). 4. Working capital: Investment allowed to the manufacturing units to meet their working capital requirements, irrespective of their size-bug, medium or small, fall under the

category. These are usually continuing investments and as such fall under the head bai muazzal 5. Investment on export: incestmen facilitate export of all items against letter of credit and / or confirmed export orders fal under this category. It os accommodated under the heads Musharaka per shipment (MCC), Musharaka per shipment (PC), foreign documentary bills purchased (FDVP), local documentary purchase (LDBP) etc. 6. Commercial lending: Short-term investments and continuing investments allowed for commercial purposes other than exports fall under this category. It includes import financing, , financing for internal trade, service establishment etc. no medium and ling term investments are accommodated here. These category of investments are alloyed in the from of a) Murahaha post import (MPI), b) investment against trust receipt (TR) c) Murahaha import bills(MIB), d) baia Muazzal, e) izara bill baia etc for commercial purposes. 7. Other: any investment that does not fall in any of the above categories is considered under the category others it includes investment to I) transport equipments II) Construction works including housing (commercial / residential), III) work order finance, IV) personal investment, etc. Process of Loan Table Table Heads Characteristics Application Applicant applies for the loan in the prescribed form of the bank describing the types and purpose of loan. Sanction 1. Collecting credit information about die applicant to determine the credit worthiness of the borrower. Sources of information. 2. Personal investigation, confidential report from other bank. Head office/ Branch/ chamber of commerce. 3. CIB (central information bureau) report from central bank. i. Evaluation of compliance with its lending policy. ii. Evaluating the proposed security. 4. LRA is must for the loan exceeding one crore as ordered by Bangladesh Bank. 5. If everything is in accordance the loan is sanctioned.

Documentation Then bank prepare a loan proposal which contains terms and conditions of loan for approval of ra or manager. Takes the necessary papers and signatures from borrower Disbursement A loan Account is opened. Where customer A/C . . . . - DR. Respective Loan A/C . . . . . . . . . . . . . . . . . . . . . . -CR.

An Appraisal of National Bank Ltd.

Capital structure: The total asset of NBL amounts to TK 32,034,142 At 30th June 2007 & 30,714253 At 30th June 2006. A brief capital position of the bank is given in the table below. Auditor's Report to the Shareholders of National Bank Limited. Balance Sheet at 31 December 2007 PROPERTY AND ASSETS Amounts in Taka At 31 Dec 2007 At 31 Dec 2006 CASH In hand (including foreign currencies) 653,472,580 551,098,717 With Bangladesh Bank and Sonali Bank (including foreign currencies) 1,420,246,105 1,281,972,449 2,073,718,685 1,833,071,166 Balance with other banks and financial institutions In Bangladesh 1,541,748,039 1,724,376,662 Outside Bangladesh 194,975,825 713,803,147 1,736,723,864 2,438,179,809 Money at call and short notice 1,090,000,000 390,000,000 Investment Government securities 2,246,315,910 1,927,344,455 Others 645,656,360 699,281,328 2,891,972,270 2,626,625,783 Loans and advances Loans, cash credits, overdrafts, etc 18,295,068,022 17,256,001,734 Bills discounted and purchased 1,905,568,709 1,297,666,929 20,200,636,731 18,553,668,663 Fixed assets 797,811,208 485,643,062 Other assets 2,870,616,342 4,954,234,646 Non-banking assets -- -Total Assets 31,661,479,100 31,281,423,129

LIABILITIES AND CAPITAL Amount in Taka At 31 Dec 2007 At 31 Dec 2006 Liabilities Borrowings from other banks, financial Institutions and agents 90,414,943 180,826,425 Deposits and other accounts Current deposits and other accounts 8,340,190,626 7,177,544,858 Bills payable 350,449,132 806,244,633 Savings bank deposits 4,726,516,382 4,217,714,098 Bearer certificates of deposit 251,165,000 282,965,000 Term deposits 11,228,321,931 11,131,816,338 24,896,643,071 23,616,284,927 Other Liabilities 5,101,669,074 6,056,917,164 Total Liabilities 30,088,727,088 29,854,028,516 Capital/Shareholders Equity Paid-up capital 430,273,250 430,273,250 Statutory reserve 588,957,865 508,829,581 Other reserve 153,761,130 153,761,130 Surplus as per Profit and Loss account 399,759,767 334,530,652 Total Shareholders Equity 1,572,752,012 1,427,394,613 Total liabilities and Shareholders Equity 31,661,479,100 31,281,423,129 Contingent Liabilities Acceptances and endorsements Letters of guarantee 8,550,097,635 6,785,792,139 Irrevocable letters of credit 7,413,354,314 7,696,321,152 Bills for collection 1,107,167,734 1,384,550,769 Other contingent liabilities -------- -------Total contingent liabilities 17,070,619,683 15,866,664,060 Other Commitments --- --Total Off-Balance Sheet Items 17,070,619,683 15,866,664,060 Profit and Loss Statement for the Year Ended 31 December 2007 Amount in Taka Year Ended 31 Dec 2007 Year Ended 31 Dec 2006 Interest income 2,057,444,277 1,820,329,468 Less: Interest paid on deposits,

borrowings, etc 1,486,691,442 1,356,096,735 Net Interest income 570,752,835 464.232,733 Income from investment 204,052,663 186,933,354 Commission, exchange and brokerage 749,040,697 752,155,814 Other operating income 274,524,285 229,484,550 Total operating income 1,227,617,645 1,168,573,718 Salary and allowances 486,335,427 443,294,407 Rent, taxes, insurance, lighting, etc 79,166,025 64,454,197 Legal expenses 3,813,345 3,236,030 Postage, stamp, telegram and telephone 47,262,447 49,325,209 Auditors' fee 200,000 236,000 Printing, stationery, advertisements, etc 26,643,356 21,449,803 Managing Director's salary and allowances 1,320,000 900,000 Directors' fee 3,378,863 2,609,441 Repair, maintenance and depreciation of assets 53,952,619 44,465,190 Other expenses 79,656,977 78,678,520 Total operating expenses 781,729,059 708,648,797 Profit before provision 1,016,641,421 924,157,654 Provision for bad and doubtful loans 606,000,000 550,000,000 Provision for diminution in value of investment -- 40,400,000 Other provision 10,000,000 -Total provision 616,000,000 590,400,000 Profit before taxation 400,641,421 333,757,654 Provision for taxation 126,202,047 105,133,661 Profit after taxation 274,439,374 228,623,993 Add: Balance of profit, brought forward 334,530,652 301,740,165 608,970,026 530,364,158 Appropriations : Statutory reserve (80,128,284) (66,751,531) Proposed dividend (129,081,975) (129,081,975) (209,210,259) (195,833,506) Retained earnings, carried forward 399,759.767 334,530,652 Earnings per share 63.78 53.13 Cash flow for the period ended December 31st, 2007 (Taka in "000") 2007 2006

Cash Flows from Operating Activities Interest and commission receipts 2,809,426,214 2,572,485,282 Interest Payments (1,486,691,442) (1,356,096,735) Receipts from other operating activities 274,524,285 299,484,550 Cash payments to employees (480,491,693) (406,873,987) Cash payments to suppliers (48,628,653) (35,891,617) Payments for other operating activities (965,784,678) (209,514,443) Operating profit before changes in operating assets -------------------102,354,033 -------------------793,593,050 (Increase)decrease in operating assets Investment in treasury bills, etc. (266,374,687) (276,781,521) Funds advanced to customers (1,646,968,068) (314,148,715) Other assets 2,083,618,304 (1,705,344,588) Increase (decrease)in operating liabilities Deposits form customers 1,280,358,144 3,357,561,184 Other liabilities (955,248,090) (65,506,377) Dividend paid (129,081,975) (86,054,651) Net Cash from operating activities 468,657,661 1,703,318,382 Cash Flows from Investing Activities Interest receipts 204,052,663 186,933,354 Purchase of fixed assets (347,818,863) (27,079,727) Disposal of fixed assets 3,683,395 -Net Cash from investing activities (140,082,805) 159,853,627 Cash Flows from Financing Activities Decrease in borrowings (90,411,482) (89,851,384) Net cash from financing activities (90,411,482) (89,851,384) Net increase in cash and cash equivalents 238,163,374 1,773,320,625 Cash and cash equivalents at beginning of period(1) 4,668,595,085 2,895,274,460 Cash and cash equivalents at end of period(1)

4,906,758,459 4,668,595,085 (1)Cash and cash equivalents Cash 2,073,718,685 1,833,071,166 Balance with other banks and financial institutions 1,736,723,864 2,438,179,809 Money at call and short notice 1,090,000,000 390,000,000 Prize bonds 6,315,910 7,344,110 Total 4,906,758,459 ============ 4,668,595,085 ============ Five Year's Performance at a Glance (In Million Taka) Particulars 2004 2005 2006 2007 2008 01. Authorized Capital 1,000.00 1,000.00 1,000.00 1,000.00 ---02. Paid-up Capital 391.16 430.27 430.27 430.27 ---03.Reserve Fund 943.90 983.63 997.12 1,142.48 ---04. Deposits 17,364.74 20,258.72 23,616.28 24,896.64 ---05. Advances 16,056.40 18,239.52 18,553.66 20,200.64 ---06. Investment 2,095.02 2,371.35 2,626.62 2,891.97 ---07. Import Business 27,236.50 23,597.10 22,420.04 20,773.20 ---08. Export Business 15,664.00 18,742.40 21,670.80 22,071.00 ---09. Gross Income 1,808.66 1,871.54 2,988.90 3,285.06 ---10. Gross Expenditure 1,407.69 1,667.95 2,064.75 2,268.42 ---11. Profit-Before Tax 400.97 203.59 333.75 400.64 ---12. Profit-After Tax 260.63 78.85 228.62 274.44 ---13. Fixed Assets 396.00 486.93 485.64 797.81 ---14. Total Assets 33,617.50 36,545.28 47,148.08 48,732.10 ---(In Taka) 15. Book value per Share 341.30 328.61 361.74 395.52 **** 16. Market value per Share 65.25 61.60 212.00 287.28 **** 17. Earning per Share 66.62 18.32 53.13 63.78 **** 18. Dividend 10.00% 20.00% 30.00% 30.00% ****

(In Number) 19. Number of foreign correspondents 328 324 326 328 **** 20. Number of Employees 1,917 1,868 2,025 2,073 **** 21. Number of Shareholders 7,800 7,857 8,960 9,052 **** 22. Number of Branches 66 66 66 75 ****

My opinions: Problem Identified

In General banking Division they follow the traditional banking system. The entire general banking procedure is not fully computerized. There is no computer in Remittance Section. Thats why the service is not as prompt as the customers demand. They are not using data bade networking in information technology (IT) Department. So they have to transfer data from branch to branch and branch to head office by using floppy disk and surely it is not a good system. According to some clients opinion introducer is one of the problems to open an account. If a person who is new as a client wants to open account, it is a problem for him/her to arrange an introducer of SB or CD Account. Foreign exchange Division: In foreign exchange Division it is required to communicate with foreign banks frequently and quickly. Besides, this branch is not an AD Branch, so while opening a L/C its required to contact with the Head of the branch which is an AD branch of national bank limited. Investment Division: The investment division takes a long time to process a loan because the process of sanctioning loan is done manually. CIB report is not readily available from Bangladesh Bank. Sometimes the securities taken against the loan are deliberately observed by the employee to unlawfully help the client. Major Finding of the study To increase the efficacy in customer service the National Bank Limited Bank should try to develop the process of providing services. To get a perfect process

of delivering services, the customers should be asked. The other suggestions are as follows: _ Personal relationship should be build with the customers. _ Customers are satisfied with the price charged by National Bank Limited Bank but they are not too much aware about the pricing strategy. Customers awareness should be build over pricing strategy. _ The offices should be decorated with the help of interior design companies. _ Customers are the heart of the organization. They should provide more space in the office and if possible they should have some entertainment facility. _ The employee of the branch should be trained continuously. _ The National Bank Limited Bank should recruit more employees having commerce backgrounds. _ National Bank Limited Bank should apply to transform the branch as an AD branch to facilitate the foreign transactions or trade as the foreign exchange is the most profitable department of each branch. Global economy The year started with the political unrest resulting from US attack in Iraq. Antiwar demonstration and peace procession in every part of the globe to prove the support of the humankind to peace and stability failed to turn around US policy on middle east. Afghanistan and Iraq consecutively. The huge expenditure of the war shook the foundation of US economy. In 2005 output growth rate was 3.0% where as growth rate for US was only. 2.4. The September 2005 IMF world economic outlook projections estimated global output growth of 3.2 percent for 2005 against 3.0 percent of 2004. the estimated global output and trade growth rates were projected to rise to 4.1% and 5.5% in 2005 respectively. SARS virus and bird-flue has devastated the poultry in particular and the global economy as a hole. Which has declined the growth rate f emerging industrial countries of East Asia to 2.5% in 2005 iagains 4.5% in preceding year. Japan showed stability this year but china has declined from 8.0% in 2004 to 7.5% in 2005. In currency markets the US Dollar has depreciated markedly against the EURO & Yen. The pound sterling declined a bit in comparison to the Dollar at around the middle of the year but at the end regained its strong position. National economy: Due to worldwide geopolitical percussion in 2004, the economic downfall & the recession of output & trade growth posed adverse impact on Bangladesh economy. The slowdown in industrial production trade & services sectors deepened the economic retardation of the country. The GDP growth in Bangladesh decreased to 4.4% in 2004 from 5.5% 2003 & 2002. However GDP

growth has been projected to rise significantly in line with the progress of the countrys infrastructural & economic reform. The GDP growth of the current fiscal year picked up to 5.85% which is contributed by the cumulative improvement in Agricultural, industrial, Trade & Services sectors. Agriculture: Last year the growth rate of the agricultural sector was almost zero due to the very low production of paddy, which is the principal food crop. Due to the favorable weather of this year & as the land for cultivation was increased, there were bountiful growth of almost all food crops. Growth in this sector stood at 3.3% fishery & Forestry sectors showed positive growth as well. Industry: Growth in this promising sector stood at 7.3% in this year compared to 6.5% in the previous industry. This year the contribution of industry in total GDP was 27.2%. Service sectors: Services sector registered 5.8% growth in this year. In 2007 it was 5.4%. Banking sector: Banking sector is a key factor for the national economy. It pays a very important role in attaining a high GNP growth rate by creating job opportunity, Inviting & encouraging investment. At present 4 government banks. 5 specialized banks, 30 private banks and 10 foreign banks are operating in the country. Deposit in total banking sector was tk1,12,793 corer, including this our banking sector comprises taka 88,662 core as loan, three core depositor / clients and 76 lac investment clients. Various steps of reforms have been taken to ensure transparency, dynamistic & stronger role of banks in the national development. Some of those are mentioned below: Disclosure requirements of financial information were substantially enhanced for banks as per the international accounting standard (IAS). Financial statement of the bank will be published in national dailies & website of the bank. Hard steps have been taken to recover defaulted loans. In this year defaulted loan stood at 24% which was 41% in 2006. The minimum capital requirement for bank has been raised to tk 100 crores from 20 crores. Capital adequacy threshold for banks has been raised from 8%to 9%. Lowering the rate of interest can potentate economic development. Bangladesh bank reduced its bank rate from 7% to 6% and fixed SLR to 16% from 20%for all commercial banks. So 1% to 2% reduction in interest rates was noticed in every sector. Bangladesh bank introduced floating exchange rate for Dollar from 31 mat this

year. Through all these reforms banking sector has turned into more powerful dynamic and transparent form. Recommendation & Conclusion Recommendation: NBL should pursue advertisement campaign in order to build a strong image among the people. They should carry out aggressive marketing campaign to attract clients. They can give advertisements in newspaper and magazine, television and neon signs. NBL can pursue a diversification strategy in expanding its current line of business. The management can consider options of starting merchant banking. NBL should move towards Online banking operations. It the appropriate time for going for Online banking because some of the banks are already in to the Online banking operation. National Bank ltd. should increase consumer-banking activity. Their consumerbanking activity is so poor. They should increase the consumer banking as early as possible. They should innovate other type of deposit to attract more customers.NBL should increase management efficiency. The bank should try to keep a balance in its operating expenses and operating income. If the operating expenses to operating income are high the bank may face some problem. Default Culture is very much familiar in our country. National Bank Limited should carefully allocate the banks assets to the highest yielding loans while avoiding excessive risk. The bank should reduce the amount of Bad/Loss relative to classified loans. NBL is taking higher risk to get higher return. In this perspective the bank should be concerned about their risk-taking tendency. Now they should take calculate risk. NBL should maintain more cash and deposit balances with other banks. Because it is desirable that banks keep their cash and balance with other bank to such extent so that it can minimize the chance of liquidity crunch. NBL should keep on adding different banking service with its traditional interested based business to generate more non-interest revenues. NBL should develop more strategic planning as to compete with its rival banks.

Conclusion:
National Bank Limited has been trying to operate its business successfully since 1983. The bank has already developed good image and goodwill among its clients by offering excellent services. As a newly established Branch, NBL Uttara is serving at its locality with utmost satisfaction of the customer. So, NBL Uttara Branch has to compete with those banks as well as other Commercial Banks. Today, the whole Banking sector is facing a tough competition and challenge. In

this situation our Branch is in good position than any other Bank of its locality and day-by-day we are increasing our activities & goodwill. Within 20 years of its operation, the bank has grabbed a position in the banking sector. According to the CAMEL rating the banks performance are 3, which is satisfactory. It is expected that in a year or so the rating will be 1, which is strong. So we can say that overall performance is good in banking sector of Bangladesh. From the practical implementation of customer dealing procedure during the whole period of my practical orientation in National Bank Limited Bank I have reached a firm and concrete conclusion in a very confident way. I believe that my realization will be in harmony with most of the banking thinkers. It is quite evident that to build up an effective and efficient banking system to the highest desire level computerized transaction is must. Success in the banking business largely depends on effective lending. Less the amount of loan losses, the more the income will be from credit operation s. the more the income from credit operations the more will be the profit of the National Bank Limited and here lays the success of credit financing. It can be argued that though the results achieved so far are not satisfactory, credit financing is a modern scientific technique for enhancing National Bank Limited banks strength and there lies the opportunities to make it more effective in the future for our own benefit. From the learning and experience point of view I can say that I really enjoyed my internship at National Bank Limited. From the very first day. T am confident that this 03 (three) months internship program at National Bank limited, will definitely help me to realize my further carrier in the job market. Bibliography Books: dated Coachran, S.P.; & Gupta,M.P.,Business Statistics,12th Edition, Sultan Chand & Sons, New Delhi, 2005. Gary, A.,& Kotler, P., Principles of Marketing, Tenth Edition, Prentice-Hall of India private Limited, New Delhi,1999. Gupta, K.N; Lease financing concept and Practice, Bikash Publishing House, New Delhi,1993. Kotler, P.;Marketing Management, 11th Edition, New Delhi, Prentice-Hall of India Private Limited,2003. Kothari, C.R; Qualitive Techniques, 2nd Edition, New Dhlhi, Bikash Publishing Houser Pvt.Ltd.,2004. Levy, P.S., & Lemenshow. S.; Sampling of Populations; Methods and Applications, 3rd Edition, New York, U.S.A;Willey Inc.,1999. Malhotra, N.K.; Marketing Research, 2nd Edition, New Delhi, Prentice-Hall of India Private Ltd.,2000. Mina, M.S.; Business Finance and Financial Management, Dhaka. 11th Edition; Nowroj Prokashoni, Banglabazar, Bangladesh, 2003.

Samuelson, P.A., & Nordhaus, W.D: Econoomicw, 18th Edition, New York, MeGraw Hill, U.S.A. 2005. Periodicals and journals: Chowdhury, A.H., and Islam, N.A.; Interlinkage between banks, NGOs, and informal credit sectors for rural development in Bangladesh, Bank Parkrama. March-june, PP26-31. Adms, D., and Vogel, R.C.; Financial Markets in Low income Countries; Recent Controversies and lessons. World Development, 1986, Volume 14(4) PP 34-39. Anu, Mahmood 1998. Inside Bangladesh Economy. Journal of BIBM, 63 New Eskaton, and Dhaka-1000. Pp 9-21. Philips, J. Challenges to effective Implementation of Micro-Finance Programs in Refugee Setting Forced Migration Review No 20. Oxford, 2004. Leila M. Webster, Randall Riopelle, Anne-Marie Chidzero; world Bank Lending For Small Enterprises 989-1993; World bank Technical paper No.311,1996. Reports: Annual Report of National Bank Ltd. 2007. United States Agency for International Development. Assessing the impacts of micro-enterprise inventions; a framework for analysis, managing for results Working Paper NO &7(March 1995) Booklets, Pamphlets, Brochure: National Bank limited. SAPNO NOY SOTTI National Bank limited. DIGUN LAV Others: National Bank limited. www.national bank limited.com Production Management www.bambooeweb.com Managerial Economics www.mhne.com/solution Investment Analysis & control www.quant.swcollege.com Principal of Marketing www.phindia.com Financial Management www.prenhall.com /wachowiez

Questionnaire
I am a BBA student of Victoria university of Bangladesh and conducting a study on The performance of National Bank limited in Bangladesh. As a part of my research program, this study involves in identifying the factors that affect the banking system based on operational activities of National Bank limited. So, feel free kindly to answer openly all the information provided by you will be kept confidential. Your cooperation and guidance are important for the success of this study and will be very much appreciated. Age: Below-50 Occupation: Service/Business. 6. Which of the following income level do you belong? a. Below Tk. 15000 b. Tk. 15000 to Tk 40000

c. Tk. 40000 to Tk 65000 d. Tk. 90000 to and above 7. How did you know about Loan / investment? a. Advertisement b. From peers c. Bank itself d. Other, please specify . . . . . . . . 8. Do you avail any type of Loan/ investment facility from National Bank Limited? Year Type of Loan/investment First section time Date of section Interest Rate Validity period Second Sanctio n Validity 9. Do you avail any type of Loan/ investment facility from Bank? Year Type of Loan/investment First section time Date of section Interest Rate Validity period Second Sanctio n Validity 10. Specify which type of Loan / investment do you use? a. Cash Credit (CC) b. House Loan

c. SME d. Bimcom 11. What do you think about the outlook of National bank limited? .................................................. .................................................. 12. What is the best thing about the service that you receive from National bank limited your loan / investment? (if any) a. Low profit Charge b. Longer grace period c. Acceptance of terms of the Loan/ investment d. Others, please specify . . . . . . . . . . . . . . . . . . . 13. Are you satisfied with the loan / investment term condition that you receive from National Bank limited? a. yes b. No 14. If you are not satisfied with the service what is the possible reason of it? a. Charges are high b. Facilities are not of high quality c. Service is slow d. The care does not have brand image e. The merchants do not want to accept the term of mortgage f. Others please specify . . . . . . . . . . . . . . . . . . 15. National Bank limited provides its services at the time when it promises to do? a. strongly Disagree b. Disagree c. Neither Agree nor Disagree d. agree 16. Who does National Bank Limited give / Investment facilities more? a. Distributor of capital Machinery b. Entrepreneur of transport c. Businessmen of agricultural Equipments d. Businessmen of office equipment & household equipment. e. Other 17. National Bank limited understands your specific needs? a. yes b. No 18. When the loan/ investment procedure is activated 9 CC, Home loan, SME Baimocm) your receiving prompt notification. a. strongly Disagree b. Disagree c. Neither Agree nor Disagree d. agree. 19. The necessary clarification regarding interest calculation and other changes are given to you. . a. strongly Disagree b. Disagree c. Neither Agree nor Disagree d. agree 20. Does National Bank Limited take initiative about proper use of loan?

a. Yes b. No 21. Do you feel safe in your transaction with National Bank limited? a. yes b. No 22. Does National Bank Limited take care about their corporate customer (borrowers requirement when they need more loan / investment)? a. yes b. No 23. When investment want to enhance their loan sanction period, does National bank limited advice them accordingly? a. Yes b. No 24. Are you notified when the Loan / investment needs to be renewed? a. Yes b. No 25. Does National Bank limited help when you need queries about Loan/ Investment procedures? a. strongly Disagree b. Disagree c. Neither Agree nor Disagree d. agree. 26. what prompted you to become a family member of National Bank Limited . . .......... Thank you for give me your valuable time