Overall Banking Operations
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Overall Banking Operations Document Transcript

  • 1. Internship Report on Overall banking operations; A practical study on JBL, Kadirgonj branch, Rajshahi Submitted to the Department of Management of Rajshahi University in partial fulfillment of requirement for the award of the MBA degree Under the supervision of Prof. Dr. ANM Jahangir Kabir Department of Management University of Rajshahi Rajshahi- 6205 By Md. Rokonuzzaman Exam Roll No: 04107262 MBA in Management Session: 2003-2004 University of Rajshahi Rajshahi- 6205 April 20, 2010 0 Department of ManagementMBA; Internship repot University of Rajshahi Rajshahi- 6205
  • 2. Chapter objectives To be acquainted with the Background of JBL. To know about the Role and Function of JBL as a Commercial Bank. To be acquainted with different Branches of JBL at Rajshahi. To be acquainted with the Background of JBL, Kadirgonj Branch; Rajshahi. 1 Department of ManagementMBA; Internship repot University of Rajshahi Rajshahi- 6205
  • 3. Theoretical discussionJanata Bank Limited, one of the state owned commercial banks in Bangladesh, has an authorized capital of Tk. 20000million (approx. US$ 289.85 million), paid up capital of Tk. 5000.00 million, reserve of Tk.8202.00 million and retainedsurplus Tk. 2737.00 million. The Bank has a total asset of Tk. 282423.00 million as on 30th November 2009. Immediatelyafter the emergence of Bangladesh in 1971, the erstwhile United Bank Limited and Union Bank Limited were renamed asJanata Bank. On 15th November, 2007 the bank has been corporatised and renamed as Janata Bank Limited. Janata Bank Limited operates through 851 branches including 5 overseas branches at United Arab Emirates. It is linked with 1202 foreign correspondents all over the world. The Bank employs more than 13(Thirteen) thousand persons. The mission of the bank is to actively participate in the socio- economic development of the nation by operating a commercially sound banking organization, providing credit to viable borrowers, efficiently delivered and competitively priced, simultaneously protecting depositors funds and providing a satisfactory return on equity to the owners. The Board of Directors is composed of 13 (Thirteen) members headed by a Chairman. The Directors are representatives from both public and public sectors. The Bank is headed by the Chief Executive Officer & Managing Director, who is a reputed Banker. The corporate head office is located at Dhaka with 10 (ten) Divisions comprizing of 37 (thirty seven) Departments.Purposes of Janata Bank as a Commercial BankJanata Bank limited is a prominent financial institution that aims to meet the following purposes…. Making profit The 1st and foremost purpose of Janata Bank is to attain profit generally through collecting deposits and lending this money to earn interest income or by making investment. Providing service and relation development This bank increases the volume of financial transaction through the development of relation with the clients. Increasing flow of money Janata Bank in replace of currency uses different medium as cheque, bank draft, pay order, latter of credit when doing transaction. Thus it increases the actual flow of currency. Collecting more deposit and money lending As a commercial bank Janata Bank aims to collect as much as possible money from the clients through different type of deposit. Janata Bank however serves the following social purposes……. Creating savings: Janata Bank offers different kinds of Savings Accounts and thus simulates the people to make savings. Formation of capital: The accumulation of savings enables Janata Bank to form capital. Ensuring safety: This bank has another purpose to ensure the safety of its client’s depository money. Investment and Industrialization Janata Bank through short-term, intermediate-term and long-term investment simulates the investment and industrialization in the country. Employment facility: Besides earning profit Janata Bank offers employment facility to the community people and thus helps increase income. Figure- 01: District wise branches of Janata Bank 2 Department of ManagementMBA; Internship repot University of Rajshahi Rajshahi- 6205
  • 4. Functions of Janata Bank as a commercial bank General functions Collecting deposits; Lending loan; Honouring cheques; Creation of medium of exchange; Discounting bills; Money transfer etc. Functions of Janata Bank Development functions Creation of savings and formation of capital, Helps export and import business, Investment in development sectors, HR development etc. Representative functions Receive and payment as the representative of clients; Selling of shares and securities; Work as the “oci” etc. Service functions Transaction of foreign currencies; Information sharing consulting and others service functions Figure- 02: Function of Janata Bank In briefJanata Bank in RajshahiTable-01: No. of Branches under Rajshahi Division Office Corp. Branch Divisional Office 01 Rajshahi (Area Office) 01 01 27 Chanpai Nawabganj 01 09 (Regional Office) Natore (Regional Office) 01 22 Naogaon (Regional Office) 01 24 Rangpur (Area Office) 01 01 20 Pabna (Area Office) 01 01 16 Kurigram (Reginal Office) 01 12 Bogra (Area Office) 01 01 20 Serajganj (Regional Office) 01 23 Gaibandha (Reginal Office) 01 08 Dinajpur (Area Office) 01 01 14 Thakurgaon (Reginal Office) 01 11 Total : 13 05 211Grand Total : 224Divisional Office, Rajshahi Rajshahi Corporate BranchKadirgonjPO : GhoramaraP.S.: BoaliaDist.: RajshahiPost Code: 6100Tele : 775637 3 Department of ManagementMBA; Internship repot University of Rajshahi Rajshahi- 6205
  • 5. Janata Bank Kadirgonj Branch; Rajshahi JBL at Kadirgonj Branch in Rajshahi was established in December 12, 1980 to meet the increasing demand ofbanking activities in Rajshahi divisional area. The 1st manager to this branch was Mr. Anowarul Hoque (The SO of thebank).However in November 11; 2007 Janata Bank was renamed as Janata Bank Limited. At this branch with new name the 1stmanager was Mr. Md. Soleman Ali Pramanic (The PO of the bank).Organizational Structure Senior executive officer Executive officer Assistant executive Assistant Assistant Assistant officer executive officer executive officer executive officer Officer Officer Officer staffs Peon Figure-3: Organogram of JBL, Kadirgonj Branch; RajshahiIt should be mentioned since JBL was established in December 12; 1980 at Kadirgonj in Rajshahi, it is increasing its areas ofoperations day by day and getting vital concerns of people in the sector of financial and commercial. 4 Department of ManagementMBA; Internship repot University of Rajshahi Rajshahi- 6205
  • 6. COLLECTION OF DATAChapter objectives To know about Data and Information. To be acquainted with various Sources of Data and Information. To know about different Techniques of Data collection. 5 Department of ManagementMBA; Internship repot University of Rajshahi Rajshahi- 6205
  • 7. IntroductionData and Information constitute the foundation of composing and interpreting the reports of any types and on anything.When gathering data we should consider many kinds of sources and different methodologies to collect these.However to get a clear concept about data and information is and important prior study of composing and interpretingreports of any type.Meaning of DataData are insightful facts and events that provide the bases of decision making. They are collected from the sources that arenot yet used by otherelase.Meaning of InformationInformation is processed data. They are facts and events that are used by others and can be found available.Methodologies used in data collectionEvery report should be data based. As a part of the MBA program, in the internship report available data and informationhave been presented. To ensure the accurate data based report a numbers of methodologies have been used to collect therequired data and information.However before we know the methodologies let know the classification of data and wherefrom the data and information arecollected. Classification of Data Primary Data Secondary Data Figure-4: Classification of dataMethodologies used to collect primary dataThe data that are collected directly and that are still not used by other person or authority are called primary data. Themethodologies are as follows………. Observation method Observation method is the act of watching something or somebody carefully for a period of time especially, to learn something. To collect data whatever required preparing the report a comprehensive observation to management and to other activities of the bank is made. Interview method Interview method is a formal meeting at which somebody is asked questions to see if they are suitable for a particular job. To collect data, the face to face meeting with the employees of the bank (JB, Kadirgonj Branch) is made. Questionnaire method Questionnaire is a formulated series of questions, especially for statistical analysis. To collect the data, a set of questionnaire is served to the employees of Janata Bank, Kadirgonj Branch, Rajshahi.Colleton of secondary dataSecondary data means data that are already available. To obtain the secondary data a number of sources are used that are asfollows…… 6 Department of ManagementMBA; Internship repot University of Rajshahi Rajshahi- 6205
  • 8. Various publication of Janata Bank limited. Technical and trade journals. Books, newspapers and magazines. Financial reports and income statement of JB Collection of information from internet. The documents and papers kept in the bankConclusionI however tried to collect the data and information with the help of a comprehensive insight to the overall banking operationsof Janata Bank limited Kadirgonj Branch, Rajshahi. To ensure the reliability and accuracy of the data and information thehelp of the branch’s employees serve as the primary sources of data and the statistical reports and the documents of businessoperations of the branch served as the secondary sources of data and information. 7 Department of ManagementMBA; Internship repot University of Rajshahi Rajshahi- 6205
  • 9. GENERAL BANKINGChapter objectives To know how an Account in Bank can be opened. To be acquainted with different types of Bank Account. To know about Cash Management at Branch level. To know about the daily Accounting process of Bank at branch level. To know about the trends of deposits at Kadirgonj Branch; Rajshahi. To know about different services provided by JBL, Kadirgonj Branch; Rajshahi. 8 Department of ManagementMBA; Internship repot University of Rajshahi Rajshahi- 6205
  • 10. IntroductionGeneral Banking functions are the common and frequent function of the commercial banks. It serves as the section ofbanking from which the commercial bank collects the deposits to form funds for lending loan and the bank yields income ofgreat extent by doing these functions.However as a Commercial Bank Janata Bank Limited, Kadirgonj Branch, Rajshahi does the General Banking functions inthe following manner………..Opening an account at Janata BankThe depositors served as the basic source of deposit that leads to form the funds to lend loans to others. A transaction with adepositor is launched with the opening of account in the bank. I was informed that various types of Bank Accounts areopened in the bank, that is to say, C.D A/cs, S.B Deposit A/cs, F.D A/cs, D.P.S A/cs, S.T.D A/cs, Call deposit and Sundrydeposit Accounts.I was trained as to how a Current Deposit (C.D) Account is usually opened. The procedure relating to C. D. account issummarized below. Person intending to open a Bank Account shall apply in a prescribed form, duly filled in. He will put at least three specimen signatures in the signature card supplied by the bank and given two passport size photograph. Application form and signature card shall be dully verified by a competent officer. Bank officer shall carefully check specimen signature of the client and verify the genuine of the introducer. After these formalities, an account number is posted against the application and hence he or she becomes a holder of a Bank Account with the bank. Usually the client is required to deposit at least Tk. 100 in saving and Tk.1000 in Current Account. The Banker therefore provides the customer with a pay in slip book, a chequebook and a passbook.Various types of Account holder need documents and maintain rules relating to open Bank AccountOwner of personal A/c: If any person opens account in his own name and maintain it, he will be termed as the owner of personal A/c. Hehas to maintain the bank A/c. Nobody for him can maintain the A/c. The necessary documents require opening personal A/c,which is discussed above.Owner of Joint A/c: When two or more persons open an account jointly, it is called a joint A/c and such account holders are termed asjoint A/c holder. While maintaining, the following rules and regulations are followed: The joint account holders or any one of them authorized to operate the A/c may open either a joint account. The joint account holders are equally liable for repayment of debt taken from the bank. If after the death of a owner, if at least two of them are alive, then the money is withdrawn from the A/c through cheque and new A/c is opened for the alive persons and the money is deposited to the A/c. According to the rules of our country is case of joint A/c by husband and wife, the husband is considered as the owner of that A/c.Joint Stock Company: While opening an account in the name of a company, the Banker must satisfy himself about the following: The name of the company, the shareholders name and addresses. 9 Department of ManagementMBA; Internship repot University of Rajshahi Rajshahi- 6205
  • 11. Whether the company is registered or not. The following document must be collected:  The signature of the shareholders in the application form.  A document containing the shares of shareholders, their responsibilities and duties.  Naming the person or persons who are authorized to operate the bank A/c on behalf of the company. If there is any change among the shareholders, it must be informed to the bank. All the shareholders are equally liable for the repayment debt taken from the bank.Public Limited Company:While opening an account in the name of public limited company the Banker should take the following particulars: The application for opening an account Naming the person who is authorized by the managing director or managing committee to operate the bank A/c. Specimen signature of the customer. Certified copy of constitution and memorandum of the company List of directors and their signature certified by chairman Scrutiny the financial condition, nature of business of the company The company is liable for the repayment of debt taken from the bank.Non-trading Organization:Clubs, societies, charitable and religious institutions not engaged in trading activities can open their accounts in the bank.According to the constitution of this institution one or more employee authorized to operate the bank A/c can operate theA/c. If the institutions are not registered, Bank Account cannot be opened.Special types of Account holder: A contractual relationship is created between the Banker and customer by opening an account. Basically a personwhose age is 18 years or more can be competent to open an account with the bank. But there is some special types of accountholder specified below: Minor: According to the law of Bangladesh, a person who has not competed 18 years of age is a minor. A minor is not capable of entering into a valid contract. A minor cannot open any account or operates it until he completes 21 years. The bank records the date of birth of the minor while opening an account. A Banker should be very careful in dealing with a minor. If an overdraft or advance is granted to a minor even by mistake or unintentionally, the Banker has no legal remedy to recover the amount from the minor. Married women: A married woman is competent to enter into a valid contract. The Banker may therefore open an account in the name of a married woman. In case of a debt taken by the married woman her husband shall not be liable. But if the wife works as an agent of his husband, then the husband has to be liable for his wife’s debt. While granting loan to a married woman the Banker should therefore examine her owns assets and ensures that the assets are sufficient to cover the amount of loan. 10 Department of ManagementMBA; Internship repot University of Rajshahi Rajshahi- 6205
  • 12. Illiterate person: Illiterate person cannot sign their names and hence the Banker takes their thumb impression as a substitute for signature and also a copy of their recent photograph. An approved witness should attest the application form and the photograph. Blind person: A blind person can open account and the procedure would be the same as illiterate persons. In both cases the terms and conditions of opening account should have to be read infant of them and if they agree with it only them the account can be opened. Deaf and Dumb: Deaf and Dumb can open account but the respective Banker should have to become careful about the background and character of the person. Mad and Lunatic: Mad and Lunatic person cannot open a Bank Account.Closing of Bank Account: The relationship between a Banker and his customer is a contractual one and may be terminated by either of themby giving notice of his intention to the other person. The rights and obligation of a Banker in this regard is as follows: If a customer directs the Banker to close his account On receipt of the notice of the death of a customer If a Banker receives a notice regarding the insanity of his customer On receipt of a Garnishee order from the court Fixed account is closed automatically after the specified date.Steps of Cash Management at Branch Level: Cash Receipt: The cash receipts procedure, as I found, is summarized below: Pay-in-slip or credit voucher are given to the cash counter for depositing cash. Cash deposit section checks the title if account, its number, amount in words and figures in the pay-in-slip or credit voucher. Cash receiving officer after receiving the cash giving records/denomination of the currency on the back of the voucher shall enter the particulars of the voucher in the cash receiving book under progressive serial number & puts his signature putting the date stamp both on counter foil & pay-in-slip voucher. Then he will pass it on to the officer- in-charge of cash section for his signature along with the register The officer will then detach pay-in-slip from the counter foil and return it to the receiving officer along with the register. The officer sends the pay-in-slip/ credit voucher to the deposit section in case of pay-in-slips and credit vouchers to the respective section to which it relates. Cahier and cash-in-charge puts signature on the book at time of closing cash.Specimen to Scroll book to cash receipts Janata Bank limited Kadirgonj Branch; Rajshshi Scroll book SL no. Account no. Account Mailing Tele charge Commission Bill’s Amount type Charge Commissi- (tk) on Figure -5: Specimen to Scroll Book 11 Department of ManagementMBA; Internship repot University of Rajshahi Rajshahi- 6205
  • 13. Cash Payment: Generally cheques, D.D, T.T, M.T, pay order and cash deposit voucher etc. are received from customer andinstitutions. The formalities are given below: The instrument is checked for any discrepancy, posting and cancellation Specimen signature of cancellation officer should be available Cash is counted and the denomination of notes are written on the reverse of the instrument Cash is paid to the bearer of the instrument Particulars of the instruments are entered in paying cash book Paid instruments are kept with the paying officerToken issue: I was assigned to issue token. However I issued token in the following manner:At the very out set, I examined the validity of the cheque. In this connection, attention was given of the chequefollowing points: - Date of issue of cheque (a cheque is valid for six months only) Signature of the account holder (rubbing, overwriting etc.) Amount of cheque (the similarities between the words and figures of the cheque) Signature on the reverse page After that the amount, token number, account number etc. were entered in the daily transaction register. Usually called day book Then, the token was issued to the bearer of the cheque Token number was thereafter taken down on the reverse page of the cheque After that the cheque was passed on to the other section for other necessary formalities.Specimen to token book for cash payment Janata Bank limited Kadirgonj Branch; Rajshshi Token Book SL no. Cheque no Account no. Amount (tk) Figure-6: Specimen to token bookIt may be mentioned that I had to face acute customer rush in this branch, since this is one of the busiest branch of the town,already mentioned earlier. Everybody wanted to get the work done quickly. Any way, I tried my best to serve the customeras promptly as possible.Posting and Cancellation of Cheque:At the time of posting of cheques, the cheque is examined carefully. Attention on the following more aspects is given: Whether the account had desired amount of money or not. Prefectures of serial number of the cheques After careful examination, the drawing amount of cheque was entered in the ledger. 12 Department of ManagementMBA; Internship repot University of Rajshahi Rajshahi- 6205
  • 14. Specimen to SB/ CD ledger book page no……… Janata Bank Limited Date of opening Acc: ……… SB/CD Ledger Account no: … Issued cheque Date From To Initial Name: ………………………………….. Introducer’s acc. no: …………. Profession: ……………………………… Address: ……………………………………. Date Particular Cheque Withdraw Deposit Initial Balance Day to Interest no. submit st No. of Maturity months Balance C/F Figure- 7: specimen to SB/ CD ledgerFor cancellation of cheques, Janata Bank, Kadirgonj Branch, Rajshahi is followed the bellowed steps: The cancellation officer shall keep the specimen signature card under his personal custody. All specimen signature cards will be kept in serial order. In case of difference of signature, cheques shall not be passed. Officer shall not pass any cheque unless it is posted against the account and initialed by the ledger keeper. The cancellation shall be made waving a red line across the signature of the drawer’s of the cheque. The cancellation shall sign in full using red ink the drawer’s signature.Cash Balancing: The entire cash related employees ensure the balancing of cash on daily basis: All cash register written in words and signed Checking agreed with each other Preparing cash position memo Writing cash Balance book Checking all registers and signing Ensuring that Balance is correct. Preparing cash cum daybookSpecimen to Daily Cash Book Janata Bank Limited Kadirgonj Branch; Rajshahi Daily cash book Cash Clearing Transfer Total Code Particulars General Cash Clearing Transfer Total no Ledger no Figure-8: Specimen to daily cash book 13 Department of ManagementMBA; Internship repot University of Rajshahi Rajshahi- 6205
  • 15. Checking Cash in hand: Cash should be checked as per cash balance books. Counting the loose cash entirely also coin Petty cash Prize bond stick Late paid cash/Scrutiny instrument Surplus cash if any pass voucherCash safe keeping:All the custodians of cash must ensure overnight safe keeping of cash at branch level. Counted cash to keep under followingprecaution: Iron safe condition Strong room as per specification Lodgment of keys Maintain safe limit Excess over limit disposalCash Remittance: Only cash feeding branch is entitled to carry the cash for remittance purpose. Precautions are as follows: Cash carrying team with armed guards Transport mode, Conventional / non-Conventional Cash transit limit Cash movement registerCheque honored by a Banker: Placing Cheque at Issuing token Entry made in ledger counter book Cash counter entry Entry in tally book Verify the initial of and payment client Figure-9: Payment procedure against chequeCheque Dishonored by a Banker:If a cheque is dishonored the Banker return it to the depositor. The statutory duty of a bank is to honor his customer’s but itis dishonored in the following circumstances: If the amount mentioned in the cheque is greater than that of deposit. If the cheque is past dated or a stole cheque. If the cheque contains an apparent material alteration, which is not properly mentioned by the drawer. If the signature of the drawer is a forged one or does not tally with his specimen signature. On receipts of reliable information about the death of the customer. 14 Department of ManagementMBA; Internship repot University of Rajshahi Rajshahi- 6205
  • 16. If a debtor commits an act of insolvency as defined in the insolvency law. If the cheque is not submitted during the banking hour. If the Banker comes to know about the defective title of the party.Collection of Deposit Section: Janata Bank, Kadirgonj Branch, Rajshahi collects deposits from surplus unit in the following forms:Time Deposits: Fixed Deposits Receipt (FDR) Short Term Deposits (STD) Deposit Pension Scheme (DPS) JBSPS Savings Bank Deposits (SB)b) Demand Deposit Janata Bank Limited Kadirgonj Branch; Rajshahi Current Deposits Numbers of different deposits SL Sundry Deposit of accounts Types Number of accounts Percentage (%) 01 Current Deposits 219 10.36 Sundry Deposits 02 Savings Bank Accounts 1738 82.28 03 Fixed deposit receipts of Credit Margin on Letters 30 1.42 04 Deposit pension scheme Guarantee Margin on Letters of 05 0.24 05 Short term deposit 08 0.36 06 FRD Employees Contributory Provident Fund 18 0.84 07 JBSPS Employees General Provident Fund 78 3.69 08 Others 24 1.13 Janata Bank Employees Pension Fund Total numbers of deposits 2112 100% Janata Bank Employees Pension and Death Cum-Retirement Benefit Fund. Table-01: Numbers of different depositsDemand Deposit-Current Account: Current Account is the most suitable for public, individuals, traders, merchants, importer and exporters,mill and factory owners etc.For opening of a Current Account minimum deposit of Tk. 1000 is required along with introductory reference.No interest is given is the Current Account. One can enjoy maximum flexibility and convenience when he/she opens CurrentAccount with Janata Bank Ltd.General Characteristics: CD accounts are unproductive in nature as banks loadable fund is concerned. Sufficient fund has to be kept in liquid form, as Current Deposits are demand liability. Thus huge portion of this fund become non-performing. For this reason banks do not pay any interest to CD Account holders. There is no restriction on the number and the amount of withdrawals from a Current Account. 15 Department of ManagementMBA; Internship repot University of Rajshahi Rajshahi- 6205
  • 17. Service charge and incidental charges are recovered from the depositors since the bank make payments and collect the bills, drafts, cheques, for any number of times daily. Businessmen and Companies are the main customers of this product. The Banks through Current Accounts grant the loans and advances. In practice of Janata Bank Ltd, a minimum balance of Tk. 1000 has to be maintained.Saving account: The saving account is primarily for small-scale savers The main objective of this accent promotion ofthrift. Hence there is restriction on with drawn in a month.General Characteristics: As per Bangladesh Bank instruction 90% of saving deposits are treated as time liability and 10% of it as demandliability. Inte4rest is paid on this account. Janata Bank Ltd offers a reasonable rate of interest for Saving A/C. Generally, Banks require a 7-day prior notice if the total amount of one or more withdrawals on any date exceeds 25% of the balance of the account. In practice there is no restriction about drawing money from Savings Account. Any time holders of such account any draw money of any amount without prior notice. The number of withdrawals in a week is limited. Only two withdrawals are permitted per week. If there are more than two withdrawals in a week, no interest will be paid on the rest amount for that month. Generally householders, individuals and other small-scale savers are the clients of this account. Minimum Balance of Tk. 500 is to be maintained. Interest will be counted on the minimum balance from the date 1-6 of a month. No service charge as it is an interest bearing account.Heavy Withdraws are permitted only against permitted only against prior. Minimum amount of Tk. 500 is required as aninitial deposit. Frequent withdraw is not allowed. The current rate of interest is 6%. 16 Department of ManagementMBA; Internship repot University of Rajshahi Rajshahi- 6205
  • 18. Trend of deposits 900 800 700 600 500 400 300 200 100 Deposits 0 2003 2004 2005 2006 2007 2008 2009 Graph-1: Trend of depositsSTD account (short Term deposit): This kind of account is opened normally by various big companies, organizations, Government department etc.This account is operated like Current Account. The deposits held in STD A/C are payable on short notice for 7 days or 30days. The interest rate of STD is 4% Different big organizations, companies and other Govt. Departments maintain ShortTerm Deposit A/C.General Characteristics: Customers deposit money for a shorter period of time. STD account can be treated as semi-term deposit. STD should be kept for at least seven days to get interest. The interest offered for STD is less than that of savings deposit. Volume of STD A/C is generally high. In JBL, various big companies, organizations, Government Departments keep money in STD accounts.Time Deposit: Deposits are life blood of a commercial Bank. Since commercial bank deals with other people’s money,without deposits there is no business for the commercial bank. Accepting deposits is one of the main functions of JBL.Fixed Deposit Receipt:Fixed deposits are the deposits in which an amount of cash is deposited in Bank for a fixed period specified in advance.These deposits are time deposits. Normally the money on a fixed deposit is not repayable before the maturity date of a fixedperiod. At the time of opening the deposit account, the Banker issues a receipt acknowledging the receipt of money ondeposit account. It is popularly known as FDR. 17 Department of ManagementMBA; Internship repot University of Rajshahi Rajshahi- 6205
  • 19. Deposit time interest rate (%) 3 (Three)” 7.00% 1(One) Year and above 7.50% Source: Janata Bank Ltd; Kadirgonj BranchIf any depositor wishes to withdraw his/her money before maturity he/she is allowed to do so. But interest will be givenaccording to the prescribed rate for that term. This instrument is also accepted as primary security or collateral securityagainst any advance or loan of the bank. Janata Bank Limited Kadirgonj Branch; Rajshahi Target VS Achievement (in lakhs) Subject head Particulars 2003 2004 2005 2006 2007 2008 2009 Deposit Target 490.00 767.00 767.00 465.00 596.00 657.0 869.05 Achieved 676.06 683.12 434.56 541.89 597.25 846.55 428.18 Classified Target 0.06 0.19 0.16 0.00 0.32 1.20 0.65 loans Achieved 0.03 0.17 0.00 0.00 0.58 2.73 1.35 Income Target 1.00 0.86 1.10 1.10 2.15 2.15 3.10 excpt Achieved 0.67 0.67 0.00 1.73 1.96 4.08 5.17 interest Remittances Target 0.50 0.10 0.10 0.00 0.06 1.20 4.55 Achieved 0.00 0.00 0.00 0.00 0.59 5.33 12.32 Profit Target (-)8.50 (-)3.50 10.00 2.50 1.00 3.80 6.25 Achieved -4.20 8.42 1.92 0.86 3.76 5.47 12.10 Table-02: Target vs Achievement( General banking)Bills and Remittance: Remittances of funds are one of the most importance aspects off commercial banks in rendering services to itscustomers. Among various services rendered by a commercial bank to its customers, remittance facilities are very wellknown and popular.The word remittance means sending of money from one place to another through post and telegraph Bank expands this fromone branch and making arrangement for payment to another branch within the country. In general there are two types ofbank remittance- Inward Remittance Out ward Remittance Bank takes the risk and ensures payment to the beneficiary by charging the customer commission. Janata BankLtd., Kadirgonj Branch gives their customers the opportunity of different kinds to billing and to remit ford from one place toanother. The instruments which are used to remittance and billing are D.D, T.T, SDR and Pay order.Demand Draft (DD): Demand draft is a negotiable instrument issued by a particular branch of a bank containing an order to anotherbranch of the same bank to pay a fixed sum of money to a purchased by for himself or order on demand. 18 Department of ManagementMBA; Internship repot University of Rajshahi Rajshahi- 6205
  • 20. This instrument can be purchased by for himself or for beneficiary and can be handed over to the purchaser. The delivery tothe beneficiary bank issues drafts for a nominal commission. The commission depends upon the amount to be transmitted.Janata Bank charges the commission on D.D minimum charge is Tk. 15.Procedures for Issuing a DD: DD application from filled in and money deposited by the customer. Necessary entries are given to a register name DD OUT- concern (drawn on) branch. A number, which is taken from this register, is known as “Controlling number”. An “Account payee only” crossed instrument given.Telegraphic Transfer (TT): Telegraphic Transfer is quicker than a transfer of amount by DD. TT is the most rapid and convening butexpensive method. Telephone, Telex, Fax is different mode of TT. If an applicant wants to remit the amount urgently to thepayee is another city or district he/she may request the Banker to send it by TT. The branch generally recovers from the telexcharge in additional to usual service charges.T.T. issued-Its procedure: Application by customer along with money given. In receipt of money a cost memo is given to the customer containing TT serial number. The customer informs this number to the awaiting party in the other branch. Tested fax message is prepared, where TT serial no and the name of the concern party to whom the money will be credited is mentioned. Activity report is received from the telex department confirming transmission of message.TT Payable-practice: After receiving the telex message it is sent for test agree. TT serial number is scrutinized in the “TT IN- concern branch” register. Voucher is released in this respect giving accounting treatment as. H/O (Concern Branch) A/C ………………. Dr. Customer A/C ……………………………... Cr.Charges and Commission: TT 15 percent and minimum Tk. 25 with telex charge Tk. 50 vat on commission and telex charge 15% regarding.Security Deposit Receipt (SDR): SDR is one kind of bill which use the government tender. From SDR bank earns a big amount. Janata BankRajshahi Branch gives credit facility against on SDR. 19 Department of ManagementMBA; Internship repot University of Rajshahi Rajshahi- 6205
  • 21. Pay Order (PO): Payment order is a written document. This pay order can be enacted on the branch from where it is issued. Severalsuppliers, Organizations use this PO. It is issued locally.The procedure for selling P.O. is as follows: Purchasing must be an A/C holder of JBL, Rajshahi Branch. Depositing money with P.O. application form. Giving necessary entry in the Bills Payable (P.O.) register; Payee’s name, date, P.O. No. etc. Preparing the instrument. After it has been scrutinized & approved by higher authority, the instrument is delivered to customer. Signature of customer is taken is the counterfoil.ConclusionFrom the aforementioned discussion it become clear that JBL, Kadirgonj Branch; Rajshahi does almost all the operations ofgeneral banking and in the recent years it has been yielding better performance in case of deposit collection and in provingthe general banking services to meet it’s purpose of profit earning and rendering social service. 20 Department of ManagementMBA; Internship repot University of Rajshahi Rajshahi- 6205
  • 22. LOAN & ADVANCE BANKINGChapter objectives To know about Loan and Advance. To know about the types of Loans and Advances. To know the process of loan handling at Branch level. To be acquainted with different types of Documents for loan handling. To know about the Security measures against the Loan To know about Recovery process of loans. 21 Department of ManagementMBA; Internship repot University of Rajshahi Rajshahi- 6205
  • 23. IntroductionJanata Bank is a Nationalized Commercial Bank. The main task of a commercial bank is to collect deposit in a comparativelow rate of interest and to pay loan is a comparative high rate of interest. A bank has to bear deposit cost and by it’s earningfrom grating loans. If it fails to bear these costs by it’s earning from granting loan, its business will be closed. In myinternship program, a critical analysis of credit disbursement in presented in this part of the report. Definition of LoanLoan means lending money to someone on trust. In another word, lending money from the bank in productive purpose iscalled loan. Objectives of the LoanThe goal of a commercial bank is to earn profit so the objectives of loan of Janata Bank Kadirgonj Branch to earn profit. ButJanata Bank is a Govt. bank. That is why economic development is the main objectives of this bank loan. Sources of Loanable Fund:This bank collect deposits from people and various organizations at a certain rate of interest payable to them and lend thismoney to people at certain rate of interest, more than the rate of collecting money.The main source of Banks loanable fund is deposit, International Financial Institutions (such as IDAJFDC) grant and Govt.grant are the other source of banks loanable fund. Types of LoanThe Janata Bank Kadirgonj Branch, Rajshahi provides the following types of loan. Cash CreditA cash credit is a fluctuation account and is operated in the same way as a Current Account on which an overdraft has beensanctioned. Under this system the Banker specifies a limit up to which the customer is permitted to borrow against thesecurity of tangible assets. The interest rate for cash credit is 6.50%. The maturity for cash credit is one year. Over Draft (OD)When the bank allows it’s faithful Current Account holders to draw more amount of money that of the individuals deposit iscalled overdraft. The OD loan in this branch is amounting Tk. 533247.00 in March 31; 2010. House Building Loan (Staff)It is given to the employees of the bank. The house building loan in this branch is amounting Tk. 26238533.75 in March 31;2010. Janata Bank Limited Kadirgonj Branch; Rajshahi Sector wise loans; March 31; 2010 SL Sector wise loans Amount (tk) Percentage (%) 01 Rural loans 2133289.00 06.45 02 General loans 1271527.00 03.85 03 House building loans (employee) 26238533.75 79.34 04 PF loans 93398.00 0.28 05 Overdraft 533247.00 1.61 06 Security overdraft 634698.00 1.92 07 Cash credit 2157740.00 6.50 Total loans outstanding 33062432.75 100% Table- 03: Sector wise loans 22 Department of ManagementMBA; Internship repot University of Rajshahi Rajshahi- 6205
  • 24. Rural LoanThis type of loan provided by this branch is made under the special investment program. In march 31; 2010 it was amounting2133289.00 and was 6.45% of total loan outstanding. General LoanThis Bank also paid general loan that was amounting 1271527.00 in March 31; 2010 and was 3.85% of total loans.Security overdraftWhen the bank allows it’s clients to draw security overdraft. The SOD loan in this branch is amounting Tk. 634698.00 inMarch 31; 2010 that was 1.92% of total loan outstanding. PF LoansProviding PF loan is one of the important operations of the bank. In March 31; 2010 it was amounting 93398.00 that was0.28% of total loan outstanding. Sector wise loans 80 70 60 50 40 30 20 10 0 Rural loans General loan EHBL PF loan Overdraft SOD CC Graph-02 : Sector wise loan Definition of Loan DisbursementWhen bank distributes its fund in various ways to various sectors to earn profit, to operate banking function and to give someinterest to deposit holders, then it is called disbursement. Janata Bank Limited Kadirgonj Branch; Rajshahi Statement of numbers of borrower; March 31; 2010 Serial Sector Number of borrowers Total Remarks no UC SME SS DF BL 01 02 03 04 05 06 07 08 09 01 Continuous 19 - - - - 19 loan 02 Demand loan - - - - - - 03 Term loan up 49 15 12 2 9 87 23 to 5 years Sub total 68 15 12 2 9 106 23 04 Staff loan 75 - - - - 75 Grant total 143 15 12 2 9 181 23 Table- 04: Statement of number of Borrowers 23 Department of ManagementMBA; Internship repot University of Rajshahi Rajshahi- 6205
  • 25. No of borrowers UC SME SS DF BL 150 100 50 BL NUmber DF SS 0 SME UC Categories Graph- 03: Disbursement of Loans Judgment of Loan PolicyAt the time of lending, bank judges the customers credit worthiness. Bank collects information from various sources for thesecurity of credit information which is very essential for unsecured loan. Bank can collect information from the followingsources:The Process of Lending LoansWhen lending loan to the client the bank as well as the client has to maintain some formalities which most importantlyincludes the preparation and maintenance of certain manner prescribed by the banking act as well as the regulatoryprovisions of the state. Loan Application FormFrom the application form bank seeks information about…………………….. Customer business experience Amount of assets and liabilities History of business Name of advance sought. Period of advance Source of repayment Ownership and changes there in. analysis of financial statement Analysis of past Transaction mad with the bank Credit information Bureau Report (CIB Report) Other bank. Personal interview 24 Department of ManagementMBA; Internship repot University of Rajshahi Rajshahi- 6205
  • 26. After collecting information, bank analysis this information and assess as the acceptability of credit of the applicant.For the secured loan, bank gives priority to the security that has the followings features: Marketability of the security. Price stability. Consistency. Durability. Position of the property.The conditions, which are maintained in the branch for issuing loans, are: Name and address of the borrowers: Nature of debt Amount of debt Primary deposit Term of loan Terms of loan Margin Interest rate Special conditionNecessary DocumentsIn case of loan the issuance of loan, some documents must be presented to ensure the validity of the client about the contracthe/ she is going to make with the bank.The bank wants to make sure that we are lending the loan to right person or organization from whom/ which is possible torecover the amount disbursed.The instrument which are necessary for issuing debt: Letter of continuity Letter of arrangement Letter of disbursement Letter of hypothecation. Statement of monitoring signed by manager Memorandum of deposit title dead. Power of attorney in case of failure to repay debt. Guarantee of owner of property. A passport size photograph.Other Documents Documents common to all sorts of loans and advances are specified below. Demand Promissory Note: D.P. note is an unconditional written promise made by the borrower to the Bank to repay the amount of loans / advances at a fixed or determinable future date along with interest at a stated rate. 25 Department of ManagementMBA; Internship repot University of Rajshahi Rajshahi- 6205
  • 27. Letter of Arrangement: The borrower acknowledges the Bank’s right to cancel the facility allowed at any time without assigning any reason and with or without prior notice. Letter of Continuity: The borrower undertakes to remain liable on the D.P. Note and other loan documentation even if the liabilities are fully or partially adjusted during the tenure of the credit facility and even through the account may show credit balance from time to time. Letter of Revival: the document refers to the law of limitation whereby documents become time barred after 3 years from the date of execution. The period of limitation within which a sent for recovery of the overdue loans/ advances to be filed the ordinary period of 3 (Three) years from the date on which the facility was extended. The limitation period for mortgage is 12 years beginning on the date of the mortgaged deed The borrower through “Letter of revival” confirms having precluded enforcement of limitation law, and also confirms to remain liable on Promissory Note and other documents executed notwithstanding the law.Legal Documents: Memorandum and Articles of Association (Limited Company). … Registered partnership deed (Partnership firm). Trade License. Board resolution covering corporate borrowing power and execution of security documents (limited Company). Resolution of the partners for availing of credit facility and for execution of security documents.The legal advisor of the banks judges the legal side of immovable security and concludes that whether it is acceptable or not.Steps of Documentation: Obtaining of the instruments / documents. Stamping. Execution. Witnessing. Registration. Preservation.Obtaining Documents:The documents to be obtained depend upon 3 (Three) factors: Nature of security Type of facility Legal status of the borrower Figure-10: Factors to be considered when obtaining documents 26 Department of ManagementMBA; Internship repot University of Rajshahi Rajshahi- 6205
  • 28. Stamping of Documents: According to the provisions of stamp Act 1899, all documents chargeable with duty shall have to be stamped adequately and, properly before or at the time of execution. An unstamped and insufficiently stamped document cannot be admitted in evidence or cannot form the basis of a legal suit.Types of Stamps are: Judicial Non judicial Adhesive EmbossedExecution of Documents: Documents must be executed (signed) by the person (s) concerned competent to do so either in official capacity orin personal capacity as the case may be. In other words, execution of documents must be done by the borrower authorizedrepresentative. Security against the loansWhen bank lend loan to the person or to the organization it privileges to keep some security measures against the loans itpaid to the respective clients. Thus the bank makes ensure that if the clients fail to repay the loan amount at the due date thebank will be able to recover the amount.Types of security can be shown in the following way: Security Personal Security Impersonal Security Collateral Security Lien Pledg Hypothecation Mortgag Charge Actionable Claim e e Figure- 11: Types of securitiesA Short discussion on the securities against loan Lien:Lien is the right of a person is the possession of goods to retain them until debts due to him have been satisfied. Lien can beclassified in two categories. Particular lien: a particular hen is a right to retain goods in respect of which the debt arises. General lien: A general hen arises out of the general dealings between two parties and covers any property that one party may be holding for the other. Pledge:A pledge is contract where by an article is deposited with a lender or a promise as security for the repayment of a loan orperformance of a promise. To complete a contract of pledge delivery of goods to the Banker is necessary. That is goods mustbe movable. 27 Department of ManagementMBA; Internship repot University of Rajshahi Rajshahi- 6205
  • 29. Hypothecation:Hypothecation means creating some claim in goods or related documents without transferring their possession to theownership related documents is passed to the creditor but the possession. Thus it is a reverse process of pledge. Mortgage: Mortgage has been defined in section 58 of Transfer of Property Act 1882. It is the transfer of interest on theproperty by way of charging immovable property for the security of loan amount. Therefore, for the purpose of securing loanamount when an immovable property is charged for transfer interest on the property is known as mortgage. Classification of Mortgage: On the basis of transfer of title is the mortgaged property mortgage can be classified as ……………….. Simple/Registered Mortgage and Equitable Mortgage. Simple / Registered Mortgage: In a legal mortgage the legal title to property is transferred in favor of the mortgagee (Bank) by mortgage deedduly vetted by legal adviser / retainer. The deed is registered is the Registrar / Sub-Registrar’s office. This method isexpensive as it involves registration charge & stamp duty. After adjustment of the loan the title of the property is to beredeemed. Equitable Mortgage: An equitable mortgage is affected by mere delivery of documents of title of property to the mortgagee (Bank). Itdoes not require registration. Assignment : An assignment means a transfer by one person of a right, property or debt (existing or future) to another person.The person who assigns the right, property or debt is called the assignor. The person to whom the right etc, are assigned iscalled the assignee. Actionable ClaimsIn banking, the usual subject of assignment is “actionable claims” Actionable claim means acclaim to any debt other than adebt secured by mortgage of immovable property or hypothecation or pledge of moveable property or to any beneficialinterest in moveable property not in the possession either actual or constructive of the claimant which the civil courtrecognized as affording grounds for relief, whether such debt, or beneficial interest be existent accruing, conditional orcontingent. In other words, an actionable claim is an unsecured claim to money which is actionable i.e; for recovery of whichan action may be brought in court. Valuation of Security: Valuation of security is very important for the lending Banker. Therefore valuation of security must be donewith…………….. 28 Department of ManagementMBA; Internship repot University of Rajshahi Rajshahi- 6205
  • 30. Careful verification of sources, Nature of procurement, In respect of quality, In respect of quantity and Considering possible risks. Margin: Margin is a cushion against any possible shortage. It is a portion of borrower’s contribution. The fixation of margindepends on the nature and type of security and the financial stability of the customer and also keeping in view the restrictionsimposed by the Bangladesh Bank / Head Office from time to time. In case of goods and produce, reasonable margin shouldbe retained for covering any shortage due to shrinkage, fluctuation of rate, fall in prices and charging of bank interest. In case of advance allowed against merchandise imported through bank, the amount of margin fixed should bededucted from the landed cost of the goods. For allowing advances against goods in trade locally purchased the amount ofmargin fixed should be deducted from the invoice value or ex- factory prices, as the case may be.Process of handling loans: Proposal Evaluating Project and Evaluating by agent About About Project Client Legal Evaluating assessment Collateral Branch level evaluation Supervi se –of Sanctioning Disbursing Decision the and loan loan Documentation Recovery of Head office Branch level the loan Level Usual Legal recover recover Figure-12: Loan handling diagram Witnessing: The following documents are required to be mandatory attested by at least 2 (Two) witnesses. Mortgage deed 29 Department of ManagementMBA; Internship repot University of Rajshahi Rajshahi- 6205
  • 31. Sale deed Gift deed Assignment of life insurance policy Will. Registration of Documents: Registration is not applicable for all the documents. In the following few cases registration of documents isnecessary to give legal effect to the instruments. The assignment of an insurance policy to be registered with the respective insurance company. The mortgage deedvetted by the legal retainer to be registered with the office of the Sub-Registrar. Fixed and floating charges on the assets of alimited company to be registered with the Registrar of Joint stock Company. Preservation of Documents: Upon completion of all the documentation formalities “ documentation checklist” to be prepared consisting of thelist of documents. The checklist should be examined and signed by an authorized officer. Documents should be kept in safecustody preferably in the Vault. Separate files to be maintained for each customer. Documents movement register should bemaintained under the supervision and signature of an authorized officer. In case of loan: Letter of Disbursement. Letter of Authority (if required) Letter of Hypothecation (when goods are hypothecated as security). Insurance Policy (if required). Any other document as stated in Sanction Advice. In case of overdraft: Letter of Continuity. Letter of Authority (if required) Letter of Hypothecation (when goods are hypothecated as security) Insurance Policy (if required). Any other Document as stated in Sanction Advice. In case of cash credit: Letter of Continuity Letter of Authority (if required) Letter of Pledge/Hypothecation. 30 Department of ManagementMBA; Internship repot University of Rajshahi Rajshahi- 6205
  • 32. Insurance Policy under Bank’s Mortgage clause. Letter of Disbursement incase of renewed warehouse. Any other Document as stated in Sanction Advice. Advance against Lien of FDR/ Insurance policy etc: Vehicle Loan: Letter of Hypothecation of vehicles (in separate form) Photocopy of blue book Photocopy of route permit Insurance policy under Bank’s mortgage clause Any other documents stated in Sanction Advice Legal Mortgage: Mortgage deed (certified copy) Registration receipt in original Chain of documents for title (original if available) C.S.S.A and R.S parch Up to date Rent Receipt Non-encumbrance certificate Power of Attorney (if asked for) Legal opinion Valuation Certificate Location plan etc. /Site plan etc.The Strategies of loan RecoveryThe Commercial Bank provides loan to different sectors but the Bank should pay extra concern to recover the loan. Thefollowing strategies however can be taken for this purpose. Strategies of loan recovery Persuasion Task Force Loan rescheduling Remission interest Taking legal actions Figure-13: Strategies of loan Recovery 31 Department of ManagementMBA; Internship repot University of Rajshahi Rajshahi- 6205
  • 33. PersuasionIt is primary step to recover the loan. It however includes……… Communication by manager with the loan taker. Discussion with loan taker how can render help to him. Notify the loan taker with a written notice. Meet the loan taker at the date when he made noticed. Discussion with the guarantor.Forming Task forceTask force works as a team in the case of recovering loan. The task force consists of…………. Chairman : Managing Director Members : GM of Head Office Coordinator : GM (Recovery) Secretary : AGM (Recovery)Loan ReschedulingThe application of rescheduling includes the following considerations……………………… When the loan taker uses the loan amount to other purpose(s). Whether the loan taker is unwilling to repay the loan amount. Checking the cash flow statement, income statement, financial statement of the loan taker. After being satisfied abut the loan taker as per the bank’s requirement the bank will take decision of making rescheduling the loan amount.Interest RemissionIt is another important strategy of loan recovery. The remissions of the interest amount encourage the loan taker to repay theloan amount as he gets the opportunity to repay low amount than he required paying. The remissions are offered to………….. Loans pertinent to foreign trade Industrial loans. General loan sections.Taking legal ActionsThis strategy of loan recovery is germane to suit case against the loan taker. The banks use the notice from the court againstthe loan taker. The loan taker or the guarantor also forced by the legal authority to surrender the mortgage property to meetthe legal claim by the bank.ConclusionAs a commercial bank JBL, Kadirgonj Branch; Rajshahi follows all the provisions regarding the loan and advancemanagement of Janata Bank Limited. The branch however does the loan and advance operation to some specific areas andthe branch is likely to lend the secured loans. 32 Department of ManagementMBA; Internship repot University of Rajshahi Rajshahi- 6205
  • 34. EVALUATION OF PERFORMANCEChapter objectives To be acquainted with SWOT Analysis. To know about the Trends of growth in different section of operation of JBL, Kadirgonj Branch; Rajshahi. To know about the Prospects of this Branch. 33 Department of ManagementMBA; Internship repot University of Rajshahi Rajshahi- 6205
  • 35. IntroductionPerformance evaluation is the study of an institution that shows the conducting activities and various comparisons toward thefunction or different components of the institution. To compare with different functions, this process try to justify the realcondition, it target and achievement. Finally, performance evaluation makes a recommendation and conclusion on the basisof different indicators. Manager must understand the environment and markets within which business operates. The mainelements of environment are markets, institutions, interest rates and taxes. Markets where capital is raised, securities aretraded and stock price is established. Janata Bank Limited Kadirgonj Branch; Rajshahi Financial statement (condensed form); March 31; 2010 Liabilities Amount (tk) Assets Amount (tk) Current Deposit 21479977.84 Cash 1245845.73 Sundry deposit 3029734.14 Rural loans 2133289.00 Savings bang account 70019864.23 General loans 12171527.00 Short term deposit 2622668.70 House building loans 26238533.75 Fixed deposit receipt 3289683.00 PF loans 93398.00 Deposit pension scheme 941556.00 Over draft 533247.00 JBSPS 2503569.00 Security over draft 634698.00 Education deposit scheme 318237.00 Cash credit 2157740.00 Medical deposit scheme 140797.00 Furniture and fixtures 2844284.00 Issued pay order 138582.81 Stationary 82097.76 Issued pay slip 9049.00 Stamps 3900.00 DD payable 90053.00 Suspense accounts 2082587.54 MT payable 5978.00 Advance 1000.00 Intt. Suspense account 38674.00 Prize bonds 2000.00 Bills accepted for receipt 288039.00 Sundry assets 743432.11 Income section 1631050.00 Outstanding bills 288039.00 CIBTA 65642242.11 Expense section 64949.75 Grand total 106647452.72 Grand total 106647452.72 Table- 05: Financial StatementSWOT ANALYSIS:At the corporate level, the strategic Management process of an organization involves the environmental. This environmentalscanning is done both on the internal environment: Strength and weaknesses and external environment: opportunities andthreats of the organization.In internal environment strengths are those factor that influence the organization to do better are weaknesses are those factorsthat lack the organization form its optimum performance. On the other hand external environment at analysis shows theopportunities or scope of development and external coming there at for the business.After doing my report on the service of the JBL. I have found both better performance in some sectors of the of the bank andalso weak services as well that occur lacking to do better. There are also some eternal factors which height has business.SWOT Stands For: Strengths 34 Department of ManagementMBA; Internship repot University of Rajshahi Rajshahi- 6205
  • 36. Weaknesses Opportunities ThreatsObjective of SWOT analysis: To asses overall strong competitive position. To decide whether to continue current strategy or not. To determine possible course of actions. Development of functional strategy.Strength: Janata Bank is a modern public Bank. It has more capacity to adopt new technology when the environment will bechanged. This Rajshahi branch has various types of strength elements. Such kind of strength are representing below: The Image/Goodwill of this branch is very good. The market share of this branch is satisfactory than others Public Bank in Rajshahi. The product portfolio or scheme of this branch is exception than other private Bank of this district such as National Bank, MBL Bank and IBBL. The branch has good communication with their client. For this the client of this branch is too much loyal upon this branch. The client is favorable regarding Foreign Exchange service of this branch. The branch has huge amount of deposit and market potentiality. This branch has skilled and experienced personnel whom are properly handle clients need in right time and right place. The working place of this branch is too much upgraded so the employee feels interest to work here and have enough security for the personnel and client.Weakness: A weakness is a limitation or deficiency in resources, Skills and capabilities that seriously impedes effectiveperformance. When I study in Kadirgonj Branch some problem surface to me those internal problems mention in the below: Corporate head office provide various types of product or scheme but Rajshahi branch cannot provide all those scheme to the client still now such as Contributory Savings Scheme (CSS), Special Deposit Scheme (SDS), Monthly Benefit Deposit Scheme (MBDS) and Education Savings Scheme (ESS). The credit section of head office sanction various types of credit but Rajshahi branch con not able to provide those entire credit scheme to the client.Opportunity:In my study on Kadirgonj Branch some opportunity surface to me. Those opportunities of Janata Bank are given below: Rajshahi is very old town. It is a big region in North Bengal. There is a lot of cultivating land here. Peoples ofRajshahi cultivate different kinds of agricultural product for this reason various types of agro based industry set up inRajshahi. To set up those types of industry huge capital is needed those people try to collect their capital Bank loan. So there 35 Department of ManagementMBA; Internship repot University of Rajshahi Rajshahi- 6205
  • 37. is a treat opportunity for banking section to provide credit facilities and other banking service to fulfill the need ofbusinessman and other professional people. Janata Bank, Kadirgonj Branch is situated at the central point of Rajshahi. So it is very easy to communicate withthis Bank for all kinds of people and people can easily and safely to come here. Many types of middle class people live in Rajshahi. Janata Bank Ltd. provides various types of products/Schemeand credit facilities to fulfill banking need of those people. So, it is great opportunity for this branch to collect deposit fromthe savory and the bank give credit facilities to the loan seeker from those deposit funds. In the modern time the all business activities are operating by modern technology. To collect the moderntechnology the business man has to invest large capital to get modern service in business field. If the businessman gets thosemodern technological services they have to take shelter under the shadow of Bank to fulfill their capital requirement andtransfer money.Opportunities however are…….. The investment potential of Bangladesh is attracting foreign inventors. Therefore JBL has opportunity to expand the banking bashes with more banking facility. The bank has enough opportunity to increase deposits by offering hew attractive deposit services / product. JBL has the opponent to launch their individual Tk. Credit card in Bangladesh with their ATM card. JBL can invite internet based E-Banking in Bangladesh.Threats: Some foreign banks and public banks are coming threat to JBL. Now a days different foreign & public bank are also offering similar types of retail lending service like JBL. so it all competitors fight with the some weapons the natural result is declining profit. Bangladesh Bank providing new rules and regulations for the banking institutions made tougher banking business. When there the rules and regulations suit the organization or not it must obey these that some time imposes barriers on daily normal operation.From the above discuss we can say that Janata Bank Limited is one of the largest privatized Bank of the country. OverallPerformance of Janata Bank Limited is satisfactory. But to face challenges of Globalization, Janata Bank Ltd. should torestructure its operation to improve as a first generation bank.Prospect of Future Growth: The target market of Janata Bank Limited Rajshahi Branch is a small and middle class businessman the bank istrying to expand their target group. This branch always provides standard service to the customers. Beside a group tocustomer can take bank loan against low interest for their special purpose. So this Bank is going on the bases of costleadership and differentiation strategy. JBL Rajshahi branch is trying creating value than competitor’s services and thisbranch has control cost driver such as learning resource proper utilization, interrelationship and time control. The futuregrowth of this branch is high because this branch already achieves success which is given below: 36 Department of ManagementMBA; Internship repot University of Rajshahi Rajshahi- 6205
  • 38. Janata Bank Limited Kadirgonj Branch; Rajshahi Target VS Achievement (in lakhs) Subject head Particulars 2003 2004 2005 2006 2007 2008 2009 Deposit Target 490.00 767.00 767.00 465.00 596.00 657.0 869.05 Achieved 676.06 683.12 434.56 541.89 597.25 846.55 428.18 Classified Target 0.06 0.19 0.16 0.00 0.32 1.20 0.65 loans Achieved 0.03 0.17 0.00 0.00 0.58 2.73 1.35 Income Target 1.00 0.86 1.10 1.10 2.15 2.15 3.10 excpt Achieved 0.67 0.67 0.00 1.73 1.96 4.08 5.17 interest Remittan- Target 0.50 0.10 0.10 0.00 0.06 1.20 4.55 ces Achieved 0.00 0.00 0.00 0.00 0.59 5.33 12.32 Profit Target (-)8.50 (-)3.50 10.00 2.50 1.00 3.80 6.25 Achieved -4.20 8.42 1.92 0.86 3.76 5.47 12.10 Table- 06: Target VS Achievement in different sectionIn the following table the trends of deposit collection by Janata Bank, Kadirgonj Branch, Rajshahi is shown …………….. Years Target (in lakhs) Achieved (in lakhs) 2003 490.00 676.06 2004 767.00 683.12 2005 767.00 434.56 2006 465.00 541.89 2007 596.00 597.25 2008 657.00 846.55 2009 869.05 428.12 Table- 07: Deposits: Target VS AchievedGraphical presentation of this data ……………. Deposits: Target VS Achieved 869.05 490 767 767 465 596 657 Target 676.06 683.12 434.56 541.89 597.25 846.55 428.12 Achieved 0 500 1000 1500 2000 2500 3000 3500 4000 4500 5000 2003 2004 2005 2006 2007 2008 2009 Graph-04: Deposits Target VS Achievement 37 Department of ManagementMBA; Internship repot University of Rajshahi Rajshahi- 6205
  • 39. In the following table the trend of classified loans lends by Janata Bank, Kadirgonj Branch, Rajshahi is shown …………….. Years Target (in lakhs) Achieved (in lakhs) 2003 0.06 0.03 2004 0.19 0.17 2005 0.16 0.00 2006 0.00 0.00 2007 0.32 0.58 2008 1.20 0.73 2009 0.65 1.35 Table- 08: Classified loans: Target VS AchievedGraphical presentation of this data ……………. Classified loan: Target VS Achieved 3 2.5 2 2003 2004 2005 1.5 2006 2007 2008 1 2009 0.5 2009 2008 2007 2006 0 2005 2004 Target Achieved 2003 Graph- 05: Classified loans: Target VS Achieved 38 Department of ManagementMBA; Internship repot University of Rajshahi Rajshahi- 6205
  • 40. In the following table the trends of income except interest earned by Janata Bank, Kadirgonj Branch, Rajshahi is shown…………….. Years Target (in lakhs) Achieved (in lakhs) 2003 1.00 0.67 2004 0.86 0.67 2005 1.10 0.00 2006 1.10 1.73 2007 2.15 1.96 2008 2.15 4.08 2009 3.10 5.17 Table- 09: Income except interest: Target VS AchievedGraphical presentation of this data ……………. Classified income except interest: Target VS Achieved 6 5 4 3 2 1 0 Target Achieved 2003 2004 2005 2006 2007 2008 2009 Graph- 06: Income except interest: Target VS Achieved 39 Department of ManagementMBA; Internship repot University of Rajshahi Rajshahi- 6205
  • 41. In the following table the trends of income except interest earned by Janata Bank, Kadirgonj Branch, Rajshahi is shown…………….. Years Target (in lakhs) Achieved (in lakhs) 2003 0.50 0.00 2004 0.10 0.00 2005 0.10 0.00 2006 0.00 0.00 2007 0.06 0.59 2008 1.20 5.33 2009 4.55 12.32 Table- 10: Remittance: Target VS AchievedGraphical presentation of this data ……………. Remittance: Target VS Achieved 14 12 10 8 6 4 2 0 Target Achieved 2003 2004 2005 2006 2007 2008 2009 Graph- 07: Remittance: Target VS Achieved 40 Department of ManagementMBA; Internship repot University of Rajshahi Rajshahi- 6205
  • 42. In the following table the trends of Profits earned by Janata Bank, Kadirgonj Branch, Rajshahi is shown …………….. Years Target (in lakhs) Achieved (in lakhs) 2003 - 8.50 - 4.20 2004 - 3.50 8.42 2005 10.00 1.92 2006 2.50 0.86 2007 1.00 3.76 2008 3.80 5.47 2009 6.25 12.10 Table-11: Profits: Target VS AchievedGraphical presentation of this data ……………. Profit: Target VS AChieved 14 12 10 8 6 2009 4 2008 2007 2 2006 2005 0 2004 2003 Target Achieved 2003 2004 2005 2006 2007 2008 2009 Graph- 08: Profits: Target VS Achieved 41 Department of ManagementMBA; Internship repot University of Rajshahi Rajshahi- 6205
  • 43. The Deposit, Classified loan, Income except interest, Remittance and Profit position of JBL, Kadirgonj Branch; Rajshahi atMarch 31, 2010 are given below………… Janata Bank Limited Kadirgonj Branch; Rajshahi Target VS Achievement (in lakhs). March 31; 2010 Subject head Particulars Duration January February March Deposit Target Yearly 1242.34 1242.34 1242.34 Achieved Monthly 1154.57 1107.59 1044.46 Classified loans Target Yearly 360.57 360.57 360.57 Achieved Monthly 0.16 0.18 0.27 Income excpt interest Target Yearly 6.00 6.00 6.00 Achieved Monthly 0.24 0.45 0.69 Remittances Target Yearly 17.00 17.00 17.00 Achieved Monthly 0.60 0.94 1.50 Profit Target Yearly 13.15 13.15 13.15 Achieved Monthly 0.99 1.92 5.66 Table-12: Target VS Achieved (March 31; 2010)Graphical presentation of this data ……………. 1200 1000 800 600 400 200 0 January February March Deposits Classified loan Income except interest Remittance Profits Table-10: Target VS Achieved (March 31; 2010) 42 Department of ManagementMBA; Internship repot University of Rajshahi Rajshahi- 6205
  • 44. ConclusionAfter the statistical analysis and presentation of data, we see, in every year the growth rates are upswing to next immediateyear. The sequence of this growth rate gives a good symbol to the JBL regarding the following issues ……….. Success in tremendous growth in future trend of deposit. Success in credit and advance. Successful foreign transaction. Tremendously increases of customer increasing total income. An upswing trend in profit earning of the Branch. 43 Department of ManagementMBA; Internship repot University of Rajshahi Rajshahi- 6205
  • 45. FINDINGS AND RECOMMENATIONSChapter Objectives To be acquainted with the Problems the Branch suffering from. To discover some Recommendation to meet the solutions of the Problems. To draw a Conclusion of the entire Report. 44 Department of ManagementMBA; Internship repot University of Rajshahi Rajshahi- 6205
  • 46. Identification of the ProblemsDuring my practical study at JBL, Kadirgonj Branch, Rajshahi I have got found some problems that are hamper makingelement to the banks operations and the way of profit making of the branch as well.I however took the help of following techniques to do this… Personal observation and InterviewThus the following problems are identified……….. Shortages of employees and staffs. Unfavorable working environment. Slow operation regarding different functions. Absence of modern technologies. High paper work. Limited loan sanction. Lack of knowledge of employees and staffs about modern technology.RecommendationsTo make solve the abovementioned problems the following recommendations can be made so that the problems can be madesolved……… Adaptation of new technologies. Ensuring interconnectivity among the branch with internet facility. Recruitment of employees as per the requirement. Upgrading the working environment. Developments of Managers by providing them with modern managerial know how. Reducing the paper work. Expanding the areas of loan disbursement. Training to the employees. 45 Department of ManagementMBA; Internship repot University of Rajshahi Rajshahi- 6205
  • 47. ConclusionBank is a financial intermediary. Banks take deposit at a cost and lend at a higher rate to cover its operational expenses andmake some profit. In this process, if loans are stuck-up, the entire process becomes jeopardized.However, as one of the leading Commercial Bank, JBLKB is playing an important role in its area of business in mobilizingfinancial resources through deposit collection and loan disbursement. It helps creating and maintaining a sound businessenvironment in the economy.In my internship program, I have Analyzed total Deposit Position, Account wise Deposit Position, Deposit composition ofthe Branch. In analyzing the data provided by the Bank, it is seen that, the Deposit position of the Branch is satisfactory. 46 Department of ManagementMBA; Internship repot University of Rajshahi Rajshahi- 6205
  • 48. ABBREVIATIONS A.G.M. : Assistant General Manager BL : Bad Loss CC : Cash Credit CD : Current Deposit DD : Demand Draft D.G.M. : Deputy General Manager D.M.D. : Deputy Managing Director EDS : Education Pension Scheme DF : Doubtful DPS : Deposit Pension Scheme FDR : Fixed Deposit Receipt G.M. : General Manager JBL : Janata Bank Limited JBLKB : Janata Bank Limited, Kadirgonj Branch JBDPS : Janata Bank Deposit and Pension Scheme M.D. : Managing Director MT : Mail Transfer OD : Over Draft OL : Other Loan P.O. : Principal Officer SB : Savings Bank Account S.L : Small Loan SME : Small and Medium Enterprises S.O. : Senior Officer S.P.O. : Senior Principal Officer SS : Sub Standard STD : Short Term Deposit TT : Telegraphic Transfer UC : Unclassified 47 Department of ManagementMBA; Internship repot University of Rajshahi Rajshahi- 6205
  • 49. BIBLIOGRAPHY 1. Annual Report of Janata Bank Ltd. 2007-2009 2. Janata Bank Ltd. General Banking Manual (1992) 3. Janata Bank Ltd. Advance Manual (1992) 4. www.janatabank-bd.com 5. Peter Rose, Commercial Bank Management 6. Janata Bank Consumers loan guidelines 7. Circulars issued by JBL time to time 8. Money and Banking: Md. Abdul Hamid. 9. Md. Mahi, 1985, Cash Credit, Janata Bank 10. Some published and unpublished research report. 11. Different ledger books of the branch. 12. Amrita Vivek Sarker, “General Procedures of Recovery of Stuck up advances” 48 Department of ManagementMBA; Internship repot University of Rajshahi Rajshahi- 6205
  • 50. List of Figures, Tables and Graphs Figure-01 : District wise branches of Janata Bank Figure-02 : Function of Janata Bank In brief Figure-03 : Organogram of JBL, Kadirgonj Branch; Rajshahi Figure-04 : Classification of data Figure-05 : Specimen to scroll book Figure-06 : Specimen to token book Figure-07 : Specimen to SB/ CD ledger Figure-08 : Specimen to daily cash book Figure-09 : Payment procedure against cheque Table- 01 : Numbers of different deposits Graph-01 : Trend of deposits Table-02 : Target vs Achievement (General banking) Table- 03 : Sector wise loans Graph-02 : Sector wise loan Table- 04 : Statement of number of borrowers Figure-10 : Factors to be considered when obtaining documents Graph- 03 : Disbursement of loans Figure- 11 : Types of securities Figure-12 : Loan handling diagram Figure-13 : Strategies of loan recovery Table- 05 : Financial Statement Table- 06 : Target VS Achievement in different section Table- 07 : Deposits: Target VS Achieved Graph-04 : Deposits Target VS Achievement Table- 08 : Classified loans: Target VS Achieved Graph- 05 : Classified loans: Target VS Achieved Table- 09 : Income except interest: Target VS Achieved Graph- 06 : Income except interest: Target VS Achieved Table- 10 : Remittance: Target VS Achieved Graph- 07 : Remittance: Target VS Achieved Table-11 : Profits: Target VS Achieved Graph- 08 : Profits: Target VS Achieved Table-12 : Target VS Achieved (March 31; 2010) 49 Department of ManagementMBA; Internship repot University of Rajshahi Rajshahi- 6205