NCC Bank's General Banking & Foreign Exchange

General Banking & Foreign exchange Dept. of NCCBL

CHAPTER-ONE
Introduction

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1.1

Background of the Report

In general sense we mean “Bank” as a financial institution that deals with money. But when we use
the term bank it generally means ‘commercial bank’ that collects the deposit from surplus unit of the
society and then lends the deposits to the deficit units of the society. The word ‘Bank’ was probably
derived from the word ‘Bench’s during ancient time Jews used to do money –lending business sitting
on long benched. First modern banking was introduced in 1668 in Stockholm as ‘savings bank’,
which opened up a new era of banking activities through out the European Mainland.
In the north Asia region, the afghan traders popularly known as Kabliwallas introduced early banking
system. Muslim businessmen from Kabul, Afghanistan came to India and started money lending
business in exchange of interest sometime in 1312A.D, they were known as ‘Kabuliwallas’.
Bank provide means and mechanism of transferring command over resources from those who have an
excess of income over expenditure to those who can make use of the same for adding to the volume of
productive capital. The bank provide them with the safety, liquidity, profitability by means of
different savings media offering varying degrees of a mix of liquidity, return and safety of savings.
The bank uses this savings in higher degrees of return and maximizes their profit in business.

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1.2

Objectives of the report

As a partial of the ‘Masters of Business Administration’ internship is a requirement at the end of the
completion of all the credit courses. The purpose of this study is to earn a real life practical experience
on banking system.
Broad Objective
The main purpose is to be familiar with the real world situation and practical experience in a business
firm. Commercial bank, especially private bank is one of the most important business sectors in
Bangladesh.
The Objectives of the study are as follows:
 To present an overview of NCC Bank Ltd.
 To present the principal activities of NCC Bank Ltd.
 To appraise the performance of the Bank
 To identify the problems

The report mainly conducted with the following objectives:
 To observe how far the policies of Dhanmondi Branch, National Credit and
Commerce Bank Ltd. are contributing to its objective achievement.
 National Credit and Commerce Bank Ltd. is a scheduled commercial bank in the
private sector, which is focused on the established and emerging markets of Bangladesh.
 To study general banking practice and procedure of National Credit and Commerce
Bank Ltd.
 To study foreign exchange practice and procedure of National Credit and Commerce
Bank Ltd.

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1.3 Methodology
We have used both Primary and Secondary methodology. These are as follows:
Primary
•

Observation

•

Practical work with NCCBL

•

Surveys
-

Web surveys

-

Interviews

Secondary
•

Prospectus 2008

•

Training Book (overall banking system), which provides Training Institute of

NCCBL.
•

Journal

•

Research brochures and various publications of national credit and commerce bank

Ltd.
•

Use of published annual report of 2005, 2006 of national credit and commerce bank

Ltd.
•

Official data, book and internet, Periodicals published by Bangladesh Bank.

•

Web site: www.nccbank-bd.com.

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1.4 Limitations of the study
The study is based, no doubt, on the review of published works coupled with empirical investigation.
The following limitations are apparent in the report:
I.

Lack of Sophisticated Knowledge: As a student in research field, we have no

experience in data collection, processing, analyzing interpreting and presenting.
II.

Unavailability and inefficiency to interpret secondary data: From the secondary
sources we have not get available relevant data

III.

Time Limitation: To complete the study, time was limited three months.

IV.

Fears to disclosure: The administration was afraid to disclosure the organizational
information .It was also constraint for the study.

V.

Lack of experience: I am not experienced enough to complete the study because I
am a person of new hand on such study.

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CHAPTER-TWO
An Overview of NCC Bank

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2.1

Historical Background of NCC Bank Ltd.

NAME

NATIONAL CREDIT AND COMMERCE BANK
LIMITED

Date of commencement of MAY 17 1993
Business as full fledged
Commercial Bank
HISTORY

This bank is a conversion of erstwhile National Credit Ltd (ncl),
an investment company largest of its kind, which was established
on 25 Nov 1985.

BRANCHES

53

EMPLOYEES

1210

MANAGEMENT

Management is professional and experienced; headed by Mr.
Nurul Amin. Mr. Amin is one of the senior bankers of the
country having a long banking career. He started his banking
career with state owned Janata Bank in the year 1977 as a
Officer Gr- V and served there till March 1983. He then switched
over to National Bank Limited, first Private sector Bank of the
country, in March 1983. In 1985 he joined National Credit
Limited, the ancestor of NCC Bank Limited, and still has been
continuing since then. During his tenure with NCC Bank he
served in different important capacities like in-charge of one of
the largest branches of the bank, Head of Human Resources
Division, Deputy Managing Director etc. In recognition of his
contribution to the bank, the Board of Directors appointed him as
Managing Director of the bank in February 2005.

MAIN SHARE HOLDERS

Main share holders comprise leading industrialist and business
magnets of the country. The board of directors consists of 13
members. Most of the directors are owners of large of business
groups having high net worth.

MAIN CUSTOMERS

Due to the predecessor company’s involvement investment
financing sector of the country the bank inherited its top
corporate customers. Moreover the bank is involved in import
trade financing. Bulk importers of consumer durable, food
grains industrial raw materials are its customers. The bank has
financed in textile and apparels sectors. The bank has a trend of
choosing customers from diversified groups. The bank has first
class customers in the construction sectors involved in high rise
building, heavy construction and roads and high way
construction.

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2.2 Business Philosophy of NCCBL
2.2.1 Vision
To be in thee forefront of national development by providing all the customers inspirational strength,
dependable support and the most comprehensive range of business solutions, through our team of
professionals who work passionately to be outstanding in everything we do.

2.2.2 Mission
NCCBL shall be at the forefront of national economic development by:
 Setting industry benchmarks of world class standard in delivering customer value through its
comprehensive product range, customer service and all our activities.
 Building an exciting teem – based working environment that will attract , develop and retain
employees of exceptional ability who help celebrate the success of it’s business, customers
and national development.
 Continuously improving productivity and profitability, and thereby enhancing shareholder
value.

2.2.3 Goals
To develop and consolidate a strong client base and ensure all kinds of modern banking facilities by
expanding business and service periphery to full fill the expectations of the shareholders as well as
customer .
Long Term Goal
NCCBL is ready to improve the highest quality customer through its new products and services such
as ATM, ONLINE BANKING & POINT OF SALES transaction.
Short Term Goal
The Major objective of NCCBL is to maximize profit through customer’s satisfactory.

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2.3

Hierarchy of NCCBL

Managing Director
Managing Director
(MD)
(MD)
Depute Managing
Depute Managing
Director (DMD)
Director (DMD)

Assistant Managing
Assistant Managing
Director (AMD)
Director (AMD)

Depute Managing
Depute Managing
Director (DMD)
Director (DMD)

Sr. Executive Vice
Sr. Executive Vice
President (SEVP)
President (SEVP)
Executive Vice
Executive Vice
President (EVP)
President (EVP)
Sr. Vice President
Sr. Vice President
(SVP)
(SVP)
Vice President (VP)
Vice President (VP)

Sr. Asstt.Vice
Sr. Asstt.Vice
President (SAVP)
President (SAVP)
Asstt.Vice President
Asstt.Vice President
(AVP)
(AVP)
Sr. Principal Officer
Sr. Principal Officer
(SPO)
(SPO)
Principal Officer
Principal Officer
(PO)
(PO)
Officer Grad 1 (OG1)
Officer Grad 1 (OG1)

Sr. Officer (SO)
Sr. Officer (SO)

Officer (O)
Officer (O)

Junior Officer (JO)
Junior Officer (JO)

Principal Officer
(PO)
Asstt. Officer
(General)

Asstt. Officer (Cash)

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2.4

Branches of NCCBL

NCCBL Dhanmondi branch started its business on 28.12.1986. It serves all types of banking business
like general banking, foreign exchange, credit and advance, and loan facility. At present, there are 34
employees in Dhanmondi branch.
It is located at 744, Satmosjaid road, Dhanmondi R/A, Dhaka.
Other Branches of NCCBL in Bangladesh:

No of Branches 2006
Division
DHAKA DIVISION

Branch Name
Total Branch - 21
(BABUBAZAR BRANCH, BANGSHAL BRANCH, MITFORD BRANCH, MOGHBAZAR
BRANCH, MOTIJHEEL BRANCH, KAWRAN BAZAR BRANCH, DILKUSHA BRANCH,
DHANMONDI BRANCH, GULSHAN BRANCH, MALIBAGH BRANCH, JATRABARI
BRANCH, MIRPUR BRANCH, FOREIGN EXCHANGE BR, ISLAMPUR BRANCH,
UTTARA BRANCH, ELEPHANT ROAD BRANCH,

NABABGONJ

BRANCH ,

MADHABDI BRANCH, NAWABPUR ROAD BRANCH , MADARIPUR BRANCH ,
BANANI BRANCH)

CHITTAGON
G DIVISION

Total Branch - 17
(JUBILEE ROAD BRANCH, AGRABAD BRANCH, COX’S BAZAR BRANCH,
HALISHAHAR BRANCH, KHATUNGONJ BRANCH, O R NIZAM ROAD BRANCH,
KADAMTALI BRANCH, FENI BRANCH, LAXMIPUR BRANCH, MAJIRGHAT
BRANCH, MADUNAGHAT BRANCH, AREA OFFICE, CTG, BARAIYARHAT BRANCH
,

ANDERKILLA

BRANCH,

HAJIGONJ

BRANCH ,

CHAKARIA

BRANCH,

CHAUMUHANI BRANCH )

KHULNA DIVISION

Total Branch – 2
(KHULNA BRANCH, JESSORE BRANCH)

RAJSHAHI DIVISION

Total Branch – 5
(RANGPUR BRANCH, SYEDPUR BRANCH, PATGRAM BRANCH, RAJSHAHI
BRANCH, BOGRA BRANCH)

SYLHET DIVISION

Total Branch – 5
(LALDIGHIRPAR BRANCH, CHOWHATTA BRANCH, MOULVIBAZAR BRANCH,
BARALEKHA BRANCH, JAGANNATHPUR BRANCH)

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2.5 Products of NCC Bank Ltd.
Bank is a service oriented industry and deals with various financial products and services for financial
gains. Financial products and services products that a bank offers to its customers are mainly
classified as under:

Products
A. Deposit product

a. Savings Deposit.
b. Current Deposit.
c. Short Term Deposit.
d. Fixed Deposit.
e. Special Savings Scheme (SSS).
f. Special Deposit Scheme (SDS)

B. Lending Product

a. Continuous Loan

•

Secured over Draft against financial
obligation. [SOD (FO)]

•

Secured

Over

Draft

against

work

order/real estate etc. [SOD(G)]
•
•

Cash credit (Pledge)

•
b. Demand Loan

Cash credit (Hypothecation)

Export cash credit (ECC)

•

Loan general

•

Demand loan Against ship breaking

•

Payment Against Documents (PAD)

•

Loan Against
(LIM)

•

Loan Against Trust Receipt (LTR)

•

Forced loan

•

Packing Credit

•

Secured over draft against cash incentive

•

Foreign Documentary Bills Purchased
(FDBP)

•

Local Documentary
(LDBP/IDBP)

Imported

Bills

Merchandise

Purchased

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•
c. Term loan

Festival Business Loan

a. Project loan
b. Transport loan
c. House building loan
d. Small Business loan
e. Consumer finance scheme
f. Lease finance
g. Personal loan

C. Money transmission product

a.

Payment order/Security Deposit Receipt
(PO/SDR)

b.Demand Draft (DD)
c. Telegraphic Transfer (TT)
d. Outstation Bills for Collection (OBC)

D. International Business products

e. Travelers Cheque.
I. Letter of Credit (L/C)
II. Back to Back Letter of Credit (BTB L/C)
III.Buying and Selling of Foreign Exchange
IV.

Foreign Demand Draft (FDD)

V. Foreign Telegraphic Transfer (FTT)
E. Special Fee Earning Products

I.

Bank Guarantee (B/G)

II. Foreign Bank Guarantee (F.B/G)
III. Credit Card
IV. Portfolio Management
V. Issue Management
VI. Underwriting
VII. Brokerage House
VIII.

Locker Service
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IX.

Issuance of sanchya patra, wage earners

development bond, national investment
bond, prize bond.

F. Social Service Product

I.

Sale of Lottery tickets for collection of
fund for social establishment.

II. Collection of Zakat Fund
III. Collection of Haj Fund

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2.6

NCCBL at a Glance
National Credit and Commerce Bank Ltd.
Performance of the Bank at a Glance
FINANCIAL HIGHLIGHTS
Taka in Million
2002

2003

2004

2005

2006

Authorized Capital

750.00

750.00

750.00

2500.00

2500.00

Paid up Capital

480.48

552.55

607.81

975.04

1201.79

388.01

510.73

761.18

884.90

1215.58

Equity fund

1037.73

1063.28

1368.99

1859.94

2417.37

Deposit

16062.35

14673.42

16069.23

21478.22

28147.34

Investment

2909.15

2966.02

4385.23

3010.45

3552.08

Import Business

13579.50

13089.94

13274.08

16296.30

17646.80

Export Business

4559.00

4967.33

5771.65

7776.30

8557.00

Operating Profit

597.50

624.94

720.49

1018.34

1267.57

18685.19

17439.93

21469.02

26114.13

32615.01

Fixed Assets

267.76

300.41

297.22

308.14

353.71

Earning per Share

44.47

30.99

46.91

36.11

39.88

Dividend: Cash (%)

-

10.00

-

10.00

10.00

Return on Equity (ROE) (%)

20.59

16.10

20.83

18.93

19.82

Return on Assets (ROA) (%)

1.14

0.95

1.33

1.35

1.63

Capital Adequacy Ratio

8.01

9.01

9.05

9.02

9.78

Amount of provision against
Classified Loans

633.75

733.86

650.06

405.75

523.58

Amount of provision against
Unclassified Loans

118.34

118.34

138.90

202.14

282.09

Advance/Deposit Ratio (%)

81.85%

87.58%

94.66%

95.60%

87.68%

Reserve
Reserve

Total
contra)

fund

and

Assets

other

(excluding

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National Credit and Commerce Bank Limited
Profit and Loss Account
For the year ended 31 December 2008
2008

2007

Taka

Taka

Net interest income

1,349,743,364

1,123,357,012

Total operating income

3,317,659,842

2,530,576,172

Total operating expense

954,169,877

750,332,990

Profit before provisions

2,363,489,965

1,780,243,182

National Credit and Commerce Bank Limited
Balance Sheet as at 31 December 2008
2008

2007

Taka

Taka

432,819,168

467,251,137

Balances with Bangladesh Bank and its agent bank (s)
(including foreign currencies)

2,405,273,950

1,825,530,019

Balances with other Banks and Financial Institutions(In
Bangladesh & Outside Bangladesh)

314,112,991

455,514,787

-

-

Investments

6,526,818,661

6,215,402,586

Loans and advances

46,332,688,46
4

32,687,753,165

Fixed assets including premises, furniture and fixtures

775,305,494

521,995,601

Other assets

578,504,998

298,194,075

TOTAL ASSETS

57,365,523,72
6

42,471,641,370

LIABILITIES AND CAPITAL

57,365,523,72
6

42,471,641,370

PROPERTY AND ASSETS
Cash:
In hand (including foreign currencies)

Money at call and short notice

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2.7

Company Analysis

There are two types of Company Analysis.
1. Qualitative (SWOT) Analysis
2. Quantitative (Ratio) Analysis

2.7.1 SWOT Analysis
Strength

Weakness:

I. NCCBL availability of capital is good.

I.

II. Customer satisfaction is positive; Bank
reduces service support of the unprofitable
customer.
III. Honest, reliable,
helpful workforce.

knowledgeable

and

IV. Customer retention is increase so profit
level is increase.
V. NCCBL can be relatively an important
player among the private sector banks in
this area.

Opportunity:
I.

Bank has installed returns screen for

II.

The bank should try to arrange more
training programs for their officials,
quality training will the officials to enrich
them with more recent knowledge of
international trade financing.
Lower capacity.

III.

The bank lacks a division for customer
service, because there are customers who
have no banking knowledge. High price
product deposit, loan, L/C.

IV.

Low liquidity.

Threats:
I.

The earth quake disaster by Tsunami and

smooth operation of foreign currency
dealing.
II.

Seedor is expected to cost is adverse
impact in the coming year.

Remittance and fund transfer purpose

II.

Government

policy

change,

some

customer could take the advantage to
online facility.
III.

government banks are turn into public
bank.

Deposit down turn in international trade,
it has produced steady steam of revenues.

IV.

Banker expresses deep apperception to

III.

Islamic Shariah based banking system.

IV.

Lack

of

planning,

organizing

and

supervising to establishes culture.

the clients for their support patronages.

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2.7.2 Ratio Analysis
Ratio

Profitability Ratio: Profitability ratio refers to the ability of firm to generate revenues in
excess of expenses. In this section, I analysis the ratio of profitability in NCCBL at 2007 or
2008. And I told that, the banks profitability position 2008 is better than 2007.

Profitability Ratio:

2008
I.
Return on equity capital = Net income
after tax / Total equity

2007

21.24%

22.45%

II.

Return on assets (ROA) = Net income
after tax / Total Assets

1.35%

1.47%

III.

Net interest margin = (Interest income
from loans and security invest – Interest
expense on deposit & on other deposit
issued) / Total Assets

3.25%

3.81%

IV.

Net operating Margin = (Total
operating revenues – Total operating
expanses) / Total Assets

3.90%

3.89%

Earning per Share of Stock (EPS) = Net
income after tax / Common equity shares
outstanding.

21.24%

22.45%

The banks net profit margin (NPM) =
Net income after tax / Total operating
revenues

23.98%

25.68%

V.

VI.

VII.

Degree of asset utilization (AU) = Total
operating revenues / Total Assets

5.62%

5.72%

VIII.

Equity multiplier (EM) = Total Assets/
Total equity capital

15.76
times

15.28
times

IX.

Operating efficiency = Total operating
expenses / Total operating revenues

30.64%

32.07%

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Liquidity Ratio: Liquidity ratio refer to the ability of firm to meet its short term financial
obligation when and as they fall due. In this section, I analysis the ratio of liquidity in NCCBL
at 2007 or 2008. And I told that, the banks liquidity position 2008 is better than 2007.


Liquidity Ratio:

I.
Current Ratio = Current Assets /
Current Liabilities
0.12
0.13

II.
0.023
0.056

Quick Ratio = Cash + Short term
marketable Security / Current
Liability

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CHAPTER-Three
General Banking

3.1 Introduction:
All business concerns earn a profit through selling either a product or service. A bank does not
produce any tangible product to sell but does offer a variety of financial services to its customers.
General banking is the starting point of all the banking operations. It is the development, which
provides day to day services to the customers. Everyday it receives deposits from the customers and
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meets their demand for cash by honoring cheques. It opens new accounts, remit funds, issue bank
drafts and pay orders etc. Since bank is confined to provide the service everyday, general banking is
also known as “Retail Banking”.
The following things done in this department:
A. Accepting of deposit.
I.
II.

Opening of account.
Check Book issue

III.

Transfer of account.

IV.

Closing of account.
B. Clearing (Inward & Outward)
C. Supplementary
D. Cash Section
E. Dispatch Section

As on 31st December, 2006, Bank’s total Deposit stood at Tk.28, 147.34 million. Deposit growth over
the last 05 years appended in the chart below.

III.2 Accepting of deposit:

Accepting deposits is one of the two classic functions of commercial banks. The relationship between
a banker and his customer beings with the opening of an account by the former in the name of the

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latter. Initially all the accounts are opened with a deposit of money by the customer and hence these
accounts are called deposits account.
The deposits those are accepted by NCCBL may be classified in to:
a)

Demand Deposits

b)

Time Deposits

Deposit Mix -2008
Bearer
Sundry Certificate of
Deposit,
Deposit,
0.51%
6.46%

Premium Term
Deposit,
1.27%

Special Fixed
Deposit
Scheme,
3.46%

Instant Earning
Deposit,
0.08%

Special
Savings
Scheme,
5.70%
Saving
Deposit,
9.13%

Short term
Deposit,
a) Demand Deposits:
3.43%
The amount in accounts is playable on demand so it is called demand deposit account.
Current
Fixed the opening
NCCBL accepts demand deposits through Deposit, of –
62.30%
I.
Current Account
II.

Deposit,
7.66%

Savings Account
 Current Account:

Both individuals and business open this type of account. Frequent transaction are (deposit as well as
withdrawal) allowed in this type of account. A current a/c holder can draw checks on his account, any
amount, and any numbers of times in day as the balance in his account permits.
Criteria of current account followed by NCCBL•

Generally opened by businessman, government and Sami-government

organizations; with proper introduction.
•

No interest is provided for deposited amount.

•

Overdraft is allowed in this account.

•

Minimum opening balance is Tk 5000.

•

Current deposit may be opened in the name of Firm, Corporate Bodies, Joint

Stock Companies.
 Savings Account:
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Individuals for savings purposes open this of account. Current interest rate of these accounts is 6%
per annum. Interest on SB account is calculated and accrued monthly and credited to the account half
yearly. Interest calculation is made for each month based on the lowest balance at credit of an account
in that month. A depositor can withdraw from his SB account not more than twice a week up to an
amount not exceeding 25% of the balance in the account.
Criteria of savings account followed by NCCBL:
•

An appropriate introduction is required for opening the A/C.

•

Frequent withdrawal is not encouraged.

•

A depositor may withdrawal money from his/her account twice in a week.

•

7 days notice is required for withdrawal of large amount.

•

Minimum opening balance is Tk 1000.

•

Depositor may withdrawal his/her deposited money up to 25% of the balance in

his/her account without notice, the bank may relies service charge in its discretion in addition
to forfeiture of interest for that month.
•

Depositor will get interest on the amount deposited in his/her account irrespective of

any limit.
b)

Time Deposits:

A deposit which is payable at a fixed date or after a period of notice is a time deposit.
NCCBL accepts time deposits throughI.

Fixed Deposit Receipt (FDR)

II.

Special Savings Scheme (SSS)

III.

Short Term Deposit (STD)

IV.

Special Fixed Deposit Scheme (SDS)

 Fixed Deposit Receipt (FDR)
These are deposits, which are made are made with the bank for a fixed period specified in advance.
The bank needs not to maintain cash reserve against these deposits and therefore, bank gives high rate
of interest on such deposits. A FDR is issued to the depositor acknowledging receipt of the sum of
money mentioned therein. It also contains the rate of interest and the date on which the deposit will
fall due for payment. NCCBL is now opening fixed deposit account only 3 years.
Procedure of opening FDR:

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Before opening a Fixed Deposit Receipt a customer has to fill up an application form, which contains
the followings:
 Amount in figures
 Beneficiary’s name and address
 Period
 Rate of interest
 Date of issue
 Date of maturity
 How the account will be operated (single or jointly)
 Signature (s)
 F.D.R. no.
 Special instructions (if any)
After fulfilling the above information and depositing the amount, FDR account is opened a FDR
receipt is issued and it is recorded in the FDR register, which maintains the following information:
 FDR account no.
 FDR no.
 Name of the FDR holder with address
 Maturity period
 Maturity date
 Interest rate

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Payment of Interest:
In case of FDR account the bank does not have to maintain a cash reserve. So NCCBL offers a high
interest rate in FDR. It is usually paid on maturity of the fixed deposit. NCCBL calculates interest at
each maturity date and provision is made on that “Miscellaneous creditor expenditure payable
accounts” is debited for the accrued interest.
Rate of interest varies depending on the period of maturity date,
Duration

Rate of Interest

3 months

8.00-8.50%

6 months

8.50-9.00%

12 months

9.00-9.50%

36 months

9.50%

Loss of FDR:
In case of lost FDR, the customer is asked to record a GD (General Diary) in the nearest Police
Station. After that, the customer has to furnish an Indemnity Bond to NCCBL. A duplicate FDR is
than issued to the customer by the bank.
Renewal of FDR:
The FDR becomes automatically renewed for like periods and amounts, unless this are withdrawn by
the depositor or the bank notifies the depositor I writing at least 15 days in the original or any renewed
maturity date (s) of its desire to terminate the account or charge any term and condition of the
account.
 Special Savings Scheme (SSS)
Special Savings Scheme (SSS) is more familiar as Deposit Pension Scheme. NCCBL offer it to its
customer to deposit fixed amount of many each month for a definite period of time, normally for 5 to
10 years.
Like ‘Deposit Pension Scheme’, this scheme includes the following features for the convenience of
the clients.


The monthly installments of Tk. 500/- to Tk. 2500/- may be deposited every month

during the entire period of the scheme.
 The duration of the scheme is 5 years or 10 years.
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 The depositors will be paid a specified as per the following table:

Monthly
installment (Taka)

Duration
5 years

10 years

500/-

40,000/-

1,12,500/-

1,000/-

80,000/-

2,24,500/-

1,500/-

1,20,000/-

3,37,500/-

2,000/-

1,60,000/-

4,50,000/-

2,500/-

2,00,000/-

5,62,500/-

A depositor may open one or more accounts of different installments in the same Branch.
Loan may be extended up to 80% of the deposited amount.
 Short Term Deposit (STD)
In short Term Deposit account, the deposit should be kept for at least seven days to get interest. The
interest offered for STD is less than that of savings deposit. In NCCBL, various big companies,
organizations, Government Departments keep money in STD accounts. Frequent withdrawal is
discouraged and requires prior notice. STD account opening procedure is similar to that of the savings
account.
•

Interest rate for STD account – 4.50%

In NCCBL, usually customers give an instruction to the Bank that their current account will be
debited whenever its deposited amount crosses a certain limit and this amount will be transferred to
STD account.

25 | P a g e


 Special Fixed Deposit Scheme (SDS)
It is popularly known as “Time Deposit”. Because these deposits are not repayable on demand but
they are, withdraw able subject to a period notice. The prospective fixed deposit holder is expected to
fill an application from prescribed for the purpose, stating the amount and the period of deposit. The
application itself contains the rules and regulations of the deposit including the space for specimen
signature.
Criteria of Special Fixed Deposit Scheme (SDR) followed by NCCBL:


Any amount of Tk. 1, 00,000/- or its multiple may be deposited under this scheme.



Duration of the Scheme is 3(three) years.



Monthly interest will be given to the depositor against the deposited amount

according to the following schedule.

Amount Deposit (Tk.)

Monthly profit (Tk.)

50,000/-

500/-

1,00,000/-

1,000/-

2,00,000/-

2,000/-

3,00,000/-

3,000/-

4,00,000/-

4,000/-

5,00,000/-

5,000/-

6,00,000/-

6,000/-

7,00,000/-

7,000/-

8,00,000/-

8,000/-

9,00,000/-

9,000/-

10,00,000/-

10,000/-

26 | P a g e


3.2.1 Account Opening Section
It is said that, there is no banker customer relationship if there is no A/C of person in that bank. By
opening a banker and customer create a contractual relationship. However, selection of customer for
opening an account is very crucial of a bank.
Fig: Account Opening Procedure in a flow chart

Applicant fills up
Applicant fills up
the relevant
the relevant
application form in
application
the prescribed
the prescribed
manner..
manner

She/he is required to
She/he is required to
fill up the specimen
fill up the specimen
signature card.
signature card.

Account is opened

After depositing the cash one
After depositing the cash one
cheque book & pay-in-slip book
cheque book & pay-in-slip book
is issued.
is issued.

For individual
For individual
introduction is needed
introduction is needed
by an account holder.
by an account holder.

The authorized officer
The authorized officer
scrutinizes the
scrutinizes the
introduction and
introduction and
examines the
examines the
documents submitted.
documents submitted.

Issuance of deposit slip
and the deposit must be
made in cash. No cheque
or draft is acceptable to
the Bank.

Before opening of current or savings account, the following formalities must be completed
I.
II.
III.

Application on the prescribed from;
The customer information is filled up with the form;
Introduction:
27 | P a g e


The following persons can introduce an a/c opener:


An existing current/savings account holder of that branch;



An officer of that branch (not below the rank of an Assistant Officer.);



A respectable person of the society or locality who is well known to the

Manager/2nd man of the branch concerned.
IV.
V.

Furnishing photographs;
Banker will supply a set of printed forms required for opening the account, which will
normally include:



VII.
VIII.

Deposit Slip Book;


VI.

Specimen Signature Cards (SSC);

Check Book Requisition Slip;

Customer should carefully read and full-fill the application form;
Putting specimen signatures in the specimen card;
Any special instruments with regard to operation of the account should be noted on
the relevant signature card boldly duly authenticated by a/c holder should be obtained;


The required Account Number for the new Account from the Account

opening Register should be obtained;
IX.

Obtain the signature and a/c number of the Introducer on the advice of new
accountant the placement for the purpose and gets the signature properly verified by an
Authorized official of the bank;

X.
XI.

The deposit slip properly filled in and signed by the customer;
Then the new a/c number should be written at the appropriate place of the Deposit
slip and mark new Account on both the copies of the deposit slip and request the customer to
deposit the money at the cash counter;

XII.

Place the signature cards, Advice of new account, a copy of Deposit slip, photographs
and other necessary papers/documents etc. in a file;

28 | P a g e


XIII.

Obtain approval of the Authorized officer for opening the new account on all relevant
papers while giving approval for opening an account the Authorized official should be
satisfied about the of the Introducer;

XIV.

The Authorized officer on the advice of new a/c and on the specimen signature card
should also attest the signature of the new a/c holder;

XV.

After approval of the opening of the a/c, get the cheque book requisition slip signed
by the customer.

XVI.

Deliver the cheque book to the customer after properly marking the account number,
name and place of the branch on each leaf of the cheque book;

XVII.

On completion of account opening a file for the new a/c holder and file all relevant
papers forms etc. Signature cards, copies of Advice, Deposit slip, Debit etc. is distributed to
concerned departments.

Classification of Customers
•

Individual (Personal)

•

Proprietorship (Sole traders)

•

Partnership (Registered or Unregistered)

•

Limited Company (Public/Private)

•

Educational Institution, Club, Society, Association etc.

•

Trust

•

Executors

•

N.G.O

Application from for current/savings account
Following are the contents of application from for opening savings/current A/C
•

Name of the Applicant

•

Father’s name/Husband’s name

•

Mother’s name
29 | P a g e


•

Date of Birth

•

Present Address

•

Occupation

•

Nationality

•

Phone No.

•

Special instruction for operation of the account

•

Nominee

•

Specimen Signature

•

Introducer name

•

Introducer’s signature

•

Amount deposited.

Additional documents are to be obtained for opening some accounts
1.

Proprietorship Firm:
•
•

Trade license.

•

Tax Receipt (For export/import)

•

Declaration of Proprietorship

•
2.

Name of authorized persons, designation, and specimen signature card.

Mandate if operation by third party is to be allowed.

Partnership Firm:
•

Account must be opened in the name of the firm.

•

The firm should describe the names and addresses of all partners.

•

Partnership deed is required which duly attested by Notary Public.
30 | P a g e


•

Trade license from City Corporation is needed.

•

Tax receipt (for import/export)

•

Photocopy of Registration Certificate duly attested by Notary Public in case

of a registered firm.
•

Letter of Partnership duly signed by all the partners, in case of non-

registered firm.
•
•
3.

Resolution signed by all the partners to open the a/c.
Mandate as to operation of the a/c.

Clubs/Societies/ Trustee/Associations/Non-trading Institutions etc:
•

Certified copy of Resolution for opening and operation of account.

•

Up to date list of office bearers.

•

Certified copy of Bye-laws and Regulations/Constitution.

•

Copy of Government approval (if registered).

•

In case of death, a/c, should be stopped until the club nominates another

person.
•
4.

Trust deed is needed-for trustee.

Joint Accounts of two or more persons

Mandate for Operation of Accounts
A clear authority signed by all the joint A/C holders containing instructions as to who will operate the
account and how the account is to be operated should be obtained. The mandate should mention the
name of the persons authorized to draw check. In case of death/insanity/insolvency of one or more of
the joint a/c holders, the authority will cease to operate.
Executor:
•

Probate: From a court of law along with a certified copy of the will duly

attested by a notary public.

31 | P a g e


•

A mandate in case if there is more than one Executor, signed by all the

executors, as to how the a/c will be operated.
Administrator:
•

Letter of Administration from a court of law along with a certified copy duly

attested by a Notary Public appointing him as an Administrator of the Estate of the
deceased. The operation of the a/c is to be allowed as per instructions of the letter of
administration.

5.

Private Limited Joint Stock Company
•

Memorandum of Association and Articles of Association duly certified by

Chairman of Secretary.
•

Resolution of the Board duly certified by chairman/secretary authorizing to

open the a/c with the Bank and naming the persons who will operate the a/c, as per
provisions of Articles of Association.
•
•

Certificate of Incorporation duly certified by Chairman/Secretary.

•
6.

Corporate Agreement Form.

List of Directors duly certified by Chairman/Secretary.

Public Limited Joint Stock Company
•

Memorandum

and

Article

of

Association

duly

certified

by

Chairman/Secretary.
•

Certificate of Incorporation duly certified by Chairman/Secretary.

•

Resolution of the Board duly certified by Chairman/Secretary authorizing to

open the a/c with the Bank and naming the persons who will operate the a/c as per
provisions of Articles of Association.
•

Corporate Agreement Form
32 | P a g e


•
•
7.

Certificate of commencement of business.
List of Directors duly certified by Chairman/Secretary.

Co-operative Society/Societies Limited
•

Copy of Byelaw duly certified by the Co-operative officer.

•

Up to date list of office bearers.

•

Resolution of Executive Committee as regards of the account.

•

Certified copy of Certificate of registration issued by Registrar, Co-operative

Societies.

8.

Trustee Board
•

Prior approval of Head office of the Bank.

•

Certified copy of Deed of trust, up to date list of members of the trustee

Board and certified copy of the Resolution of trustee Board to open and operate the
account.
9.

NGO

•The account opening procedure is same but in exception is that the Registration Certificate
from the Social Welfare Department of Government must be enclosed with the application.

3.2.2

Issuing Cheque Book To The Customers

A. Issue of fresh cheque book

Fresh cheque book is issued to the account holder only against requisition on the prescribed
requisition slip attached with the cheque book issued earlier, after proper verification of the signature
of the account holder personally or to his duly authorized representative against proper
acknowledgment.
33 | P a g e


Fig: Cheque Book Issue in a Flow Chart

Requisition slip filled
properly along with
the cheque book
number.

Banker Verifies
the Slip

Banker issues new
cheque book if
every thing in the
right from

Enter the new cheque book
number in the register book
against
the
specific
customer’s name.

Procedure of issuance of a fresh cheque:


A customer who opened a new a/c initially deposits minimum required money in the

account.


The account opening from is sent for issuance of a cheque book.



Respected officer first draws a cheque book



Officer than scaled it with branch name.



In-Charge officer enters the number of the cheque book in cheque issue register.



Officer also enters the customer’s name and the account number in the same register.



Account number is then writes down on the face of the cheque book and on every leaf of the

cheque book including requisition slip.


There is a special technique to sign every leaf of the cheque book with the help of carbon

paper. So officer’s signature prints the reverse side of the leaf.


The name of the customer is also written down on the face of the cheque book and on the

requisition slip.


The word “Issued on” along with the date of issuance is written down on the requisition.
34 | P a g e




Number of cheque book and date of issuance is also written on the application from.



Next, the customer is asked to sign in the cheque book issue register.



Then the respected officer signs on the face of the requisition slip put his initial in the

register and hand over the cheque to the customer.
B. Issue of New Cheque Book (For old Account)
All the procedure for issuing a new cheque book for old account is same as the procedure of new
account. Only difference is those customers have to submit the requisition slip of the old cheque book
with date, signature and his/her address. Computer posting is than give to the requisition slip to know
the position of account and to how many leaf/leaves still not used. The number of new cheque book is
entered on the back of the old requisition slip and is signed by the officer.

C. Procedure of issuance of a new cheque book:


If the cheque is handed over to any other person then the account holder the bank

addressing the account holder with details of cheque book issues an acknowledgement slip.
This acknowledgement slip must be signed by the account holder and returned to the bank.
Otherwise the bank will not honor any cheque from this cheque book.


At the end of the day all the requisition slips and application forms are sent to the

computer section to give entry to these new cheque.


Then cutting the cheque book issuing charge.

3.2.3 Transfer of an Account


The account submits an application mentioning the name of the branch to

which he wants the account to be transferred.


His signature cards, advice of new account and all relevant documents are

sent to that branch through registered post.


The balance standing at credit in customer’s account is sent to the other

branch through Inter Branch Credit Advice (IBCA)


No exchange should be charged on such transfer.
35 | P a g e




3.2.4

Attention is also given in this connection.

Closing the Account

Upon the request of a customer, an account can be closed. After receiving an application from the
customer to close an account, the following procedure is followed by a banker. The customer should
be asked to draw the final cheque for the amount standing to the credit of his a/c less the amount of
closing and other incidental charges and surrender the unused cheque leaves. The a/c should be
debited for the account closing charges etc. and an authorized officer of the bank should destroy
unused cheque leaves.

In case of joint a/c, the application for closing the should be signed by all the joint holders.
A banker can also close the account of his customer or stop the operation of the account under
following considerable circumstances:


Death of Customer.



Customer’s insanity and insolvency.



Order of the court (Garnishee order)



Specific charge for fraud forgery.

•Stop Payment of Cheque:
A banker can stop payment of cheque of his customer under following considerable circumstance:


Firstly the account holder will apply to stop the payment of his

cheque


There is a register for this purpose. It is kept by the authorized

officer.


The officer will see the condition of account and verify everything.

36 | P a g e




In the ledger book, the officer will marked with red ink and the

cheque will not be paid.
• Dishonor of Cheque:
If the cheque is dishonored, NCCBL send a memorandum (cheque return memo) to the customer
stating the reason in the following way:


Refer to drawer.



Insufficient Fund.



Not arranged for.



Effects not cleared May be present again.



Exceed arrangements.



Full cover not received.



Payment stopped by drawer.



Payee’s endorsement irregular/illegible/required.



Payee’s endorsement irregular, require bank’s confirmation.



Drawer’s signature differs/required.



Alterations in date/figures/words require drawer’s full signature.



Cheque is posts dated/out of date/mutilated.



Amount in words and figures differs.



Crossed cheque must be present through a bank.



Clearing stamps required/requires cancellation.



Addition to the discharge of bank should be authenticating.



Cheque crossed “Account Payee Only”



Collecting bank’s discharge irregular/required.

37 | P a g e


3.3 Clearing (Inward & Outward)

Types of Clearing: There are two types clearing
I.
II.


Outward Clearing
Inward Clearing

Outward Clearing:

When a particular branch receives instructions drawn on the bank within the clearing zone and sends
those instructions for collection through the clearing arrangement is considered in outward clearing
for that particular branch. This branch is known as collecting branch.
Inward Clearing:
When a particular branch receives instructions, which are on themselves and sent by other member
banks for collection are treated as inward clearing of that branch.
Types of Returns: There are two types Returns
I.

Outward Returns

II.

Outward Returns

 Outward Returns:
Clearing returns (outward) include those cheques that were presented to us by other banks but we
have to return them unpaid to the collecting banks due to various reasons.
 Outward Returns:
Clearing returns (inward) consists of those instruments which were presented by us to
other banks for payment but have been returned and unpaid by them due to specified reason
through the clearing house.

3.3.1 Procedures of Outward Clearing:

Sequence

38 | P a g e




First tire: Collecting Branch

1. The instrument is deposited duly entered in the pay-in-slip or voucher.
2. The instrument is checked for apparent discrepancy and is compared with the
particular noted in the pay-in-slip.
3. In case an order instrument is being deposited in second payee’s account, guarantee is
obtained from the second payee and is attached to the pay-in-slip.
4. In case the payee’s name on the specially crossed instrument differs slightly that of
the depositor, the instrument may be accepted but only from customers well known to the
bank and after obtaining an indemnity which is attached to the pay-in-slip.
5. Stamping:
Special Crossing: On the instrument
Clearing Stamp: Both on instrument and pay-in-slip.
Endorsement: Back of the instrument.
6. Duly signed and return of counterfoil to the customer.
7. The particulars of the instrument and voucher are entered in the Outward Clearing
Register/Computer.
8. The Register is balanced; the vouchers are separated from the instruments.
9. Prepare voucher: Dr. Suspense A/C: Clearing Adjustment
Cr. All pay-in-slip/vouchers
Voucher to be passed on the following working day.
10. Sorting of instruments bank-branch wise and accordingly prepares sub-main
schedules.
11. Prepare House page according to main schedules.
12. Tallied house with Outward clearing Register.
13. The house with instrument sent to Principal/Local Office/Main branch (2 nd tire)

39 | P a g e


14. In the following working day prepared voucher is to be passed. If any return and
unpaid instrument is received from principal branch, in addition to above voucher the
following voucher will be passed.
Dr. Party A/C
Cr. Suspense A/C: Clearing Adjustment
15. When advice is received from Principal/Local Office, than following voucher is to be
passed.
Dr. Head office A/C
Cr. Suspense A/C: Clearing Adjustment
Outward clearing bills

It refers the instruments drown on the other banks received by the NCCBL.

Cheques drawn on another branch of NCCBL. The settlement process:

Cheques are directly sent
to the respective branch.

OBC received along the
instrument by the
respective branch.

When
IBCA
comes
customer’s account is
credited.

Entry passed in OBC
register
of
that
branch

IBCA is sent from that
branch to this branch.

Cheque drawn on another bank, which is situated within clearing house area.
40 | P a g e


Cheque are collected
by Sonargang Road Br.

IBDA along with bills
are sent to Principal
Br.

Depositor’s account is
credited with NCCBL
Sonargang Road Br.



These bills are sent
to clearing house
from principal Br.

If drawer’s Bank honors
the bill then

Second tire: Principal Branch/ Local office/ Main Branch

Instrument received by this, office: same as previous section SL. 1 to 9.
Lodgment by this branch:
1. Received house page with instruments from the branches.
2. Recorded the amount in a register from house page.
3. The instruments with schedules are rearranged bank-branch wise and prepare main
schedules for each bank.
4. Prepare house page.
5. The instruments with schedules, house page and the house book are sent to the
clearing house through bank representative.



Third tire: Clearing House (Bangladesh Bank/Sonali Bank).
The instruments are delivered to the respective banks.

41 | P a g e


3.3.2 Procedures of Inward Clearing:
Sequence


First tire: Clearing House (Bangladesh Bank/Sonali Bank).

1. The instruments are drown on our bank are received from other banks in the clearing
house.
2. The amount and number of instruments received are entered in the house book from
the main schedule of respective banks.
3. The amount of instruments delivered, received and the differences are written on a
figure provided in the clearing house.



Second tire: Principal Branch/Local Office/Main Branch

1. The instruments with schedules are arranged branch wise.
2. The amount of each schedule received is entered in the house pages of the respective
branch.
3. The respective house pages are totaled and check the amount with total amounts
instruments received from all banks.
4. The instruments are sent to respective branches with the slip showing total amount
and number of instruments.
5. The instruments sent to the branches concerned for clearance and Advice is collected
from them for honored cheques.



Third tire: Paying Branch
42 | P a g e


1. Particulars of the instruments are compared with the schedule.
2. The instruments are sent to the respective departments for honoring them.
3. For the total value of honored cheques pass the following vouchers:
Dr. Party A/C (already debited by instruments)
Cr. Head Office A/C
4. Dishonored cheques (if any) with reason, memo and Credit Advice sent Principal
Branch.

Nikash Software:
Clearing House manual and paper based in many advanced countries have gradually extended their
range of activities to include automated and electronic means for settlement of payment transactions.
Computerization of clearing operations was the first major step towards modernization of the
payments system. The introduction of technology for clearing operations started from December 1997
using Microprocessor based computer system. These systems are used for generating settlement
reports on the basis of input data containing the value of (cheques/ instruments presented) claims of
one bank over the other banks in the clearing house. Clearing balancing and settlement, which used to
take a long time due to differences and error in manual balancing, were reduced, apart from providing
accuracy in the final settlement.
Nikash is the software developed for entering and processing of clearing and processing of clearing
house data. Programs are written under FoxPro database program. This operation manual describes
the 1st House menu, Receipt menu, Payment menu, Return House menu, Clearing menu, Maintenance
menu and Exit menu to prepare data diskette for clearing house. All necessary code files are included
in the software.
This package has developed for the use of member bank/branches of the clearing house, Bangladesh
Bank, Dhaka.

3.4 Cash section:
The cash section of NCCBL deals with all types of negotiable instruments, cash and other instruments
and treated as a sensitive section of the bank. It includes the vault, which is used as the store of cash,
43 | P a g e


instruments. If the cash stock goes beyond this limit, the excess cash is then transferred to Bangladesh
Bank.
Keys to the room are kept under control of cash officer and branch in charge. The amount of opening
cash balance is entered in to a register. After whole day’s transaction, the surplus money remains in
the cash counter is put back in the vault and known as the closing balance. Money is received and
paid in this section.
Cash payment:


First of the entire client comes to the counter with the cheek and gives it to the officer

in charge there. The officer checks whether there are two signatures on the back of the cheque
and cheques his balance in the computer. After that the officer will give it to the cash in
charge.


Then the cash in charge verifies the signature from the signature card and permits the

officer in computer to debit the client’s account by giving posting. A posted seal with teller
number is given.


Then the cheque is given to the teller person and he after checking everything asks

the drawer to give another signature on the back of the cheque.


If the signature matches with the one given previously ten the teller will make

payment keeping the paying cheque with him while writing the denomination on the back of
the cheque.


If the instrument is free of all kind of error the respected officer will ask the bearer to

sign on the back of it.


He will then put his/her initial beside the bearers’ signature. She/he will also sing it

on its face, will write down the amount by red pen will put on a scroll number from his/her
scroll register.


Then the cheque will be sent to the cash counter. At the cash counter bearer will be

asked again to sign on the back of the instrument.


The cash officer will then enter the scroll number in his/her register and will pay the

money to the bearer.


At the end of the day these scroll numbers of the registers will be compared to ensure

the correctness of the entries.
44 | P a g e


The Procedure of Paying Cash at the Counter
Counter
Customers place the
check to the officer
(LO).
The
officer
receives
the
check,
enters its particulars in a
register and issues the
customer a token.

The LO now verifies
the ledger of the
customer.
If
the
customer’s
account
position is okay, he
passes the cheque to
the second officer.

The second officer compares
the signature of the customer
with that on the signature
card kept in his custody.
Then he makes an entry of
the check in another register
and cancels it by signing
across the cheque.

Cashier enters the
amount of the check in
the cash register and
pays the appropriate
amount
to
the
customer.

Once the check is cancelled
that is okayed for payment,
it is brought to the cashier
by a peon.

Counter
At the end of the
banking hour a trial
balance is prepared from
and all the registers are
compared with one
another.

Cash Receipt:


At first the depositor fills up the deposit in slip. There are two types of deposit in slip

in this branch. One for saving account and another for current account.


After filling the required deposit in slip, depositor deposits the money.
45 | P a g e




Officers at the cash counter receives the money, count it, enter the amount of money

in the scroll register kept at the counter, seal the deposit in slip and sign on it with date.


Then this slip is passed to another officer who enters the scroll number given by the

cash counter in his/her register along with the amount of the money, sign the slip and keep the
banks’ part of the slip. Other part is given to the depositor.


At the end of the day entries of both of these registers are cross checked with the

register kept at the cash counter to see whether the transactions are correct or not.

The Procedure of receiving Cash at the Counter
Counter
After placing deposit
slip,
the
respective
officer makes an entry to
scroll register book.

counter
The receipt and cash
are
placed
before
cashier. He counts the
amount of money first
and then makes an
entry
to
another
register book

At the end of the
banking hour a trial
balance is prepared
from receipt register.

3.5

Then the cashier passes the
register to the second
officer.

After verifying the receipt,
the cashier returns the
counter folio of the deposit
slip to the customer and
keeps the other portion in
his custody.

Local Remittance Section

Banks have a wide network of branches all over the country and offer various kinds of remittance
facilities to the public. The remittance of the funds by banks is made through different methods. They
are:

46 | P a g e




Demand Drafts



Pay Order



Pay Slip



Mail Transfer



Telegraphic Transfer

A) Demand Drafts (DD)
Demand Draft is an order to pay money, drawn by one branch of a bank upon another branch of the
same bank for a sum of money payable to order on demand. A draft cannot be drawn payable to
named payee. The draft is prepared with care regarding the name of the payee, the amount and the
office on which it is drawn. The issuing officer sends to the drawee an advice containing the
particulars of the draft.
B) Pay Order (PO)
Banks payment order is an instrument that contains an order for payment to the payment to effect
local payment whether on behalf of the bank or its constituents. The banks payment offer is in the
form of receipts and issued by the joint signature of two officials. It is not transferred and therefore it
can only be paid to:



The payee in identification



The payee’s banker, who would certify that the amount would be credited to

payees account.


A person, holding the letter of the authority from the payee whose signature

must be authenticated by the payee.
NCCBL charges different amount of commission on the basis of payment order amount which are
given below:

Amount of Payment Order

Commission

Vat

Up to Tk. 10,00,000/-

10

2

Tk. 10,00,001/- to 5,00,000/-

20

3

5,00,001/- and above

50

8

47 | P a g e


C) Mail Transfer (MT)
Mail transfer is an advice regarding remittance of funds sent by one branch to another branch of the
same bank, at the written request of applicants.
D) Telegraphic Transfer (TT)
Telegraphic transfer is the quickest methods of transferring funds from one place to another place.
The remitter branch sends a telegraphic message to the others branch, to pay a certain sum of money
to a named payee. Such a message is usually sent in coded language. There are two procedure should
be followed for TT.

3.6 Dispatch Section
Those documents that are enter in the branch or exit of the branch must go through this section.
The main objective of this section is;


Keeping record of the documents send to other branches or bank.



Letters are sending to their respective destination.



Send these documents safely and correctly.



Receives documents come through different medium, such as postal service, courier

service, via messenger etc.


Dispatch section of Dhanmondi Branch performs another duty. It enters the transfer

instruments in the scroll book and then sends those to the computer section.
Two types of letters are continuously received. These are:
I. Inward (Registered/Unregistered) letter.
II. Outward (Registered/Unregistered) letter.

At first recording is required whether it is Inward or Outward Registered/Unregistered letters. Then
letters are disbursed to their respective destination. Inward letters are firstly segmented according to
their different sections and after that an entry is given to the Inward Register book.

48 | P a g e


Books Maintained


Local Dispatch Khata (including Peon Book)



Register Dispatch Khata (For Registered letter).



Ordinary Register Khata (For Unregistered letter).



Inward Register Books.



Outward Register Books.

CHAPTER-Four
Foreign Exchange

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4.1 Introduction:
Foreign Exchange is the mechanism by which the currency of one country gets converted in to
currency of another country to effect ‘International Trade’ payment. This mechanism by which
commercial investments and others transactions between countries are being settled. It involves with
the purchase and sell of the money of foreign countries and transferring of exchange balance from
bank to bank.
Bank largely depends in its Foreign Exchange Business to ensure profitability. To look after the
Business and also to ensure prompt service to the Import & Export officers having exposure and
expertise in Foreign Exchange Business have been posted both at Head Office & Authorized Dealer
Branches. During 2006, the Bank handled Export & Import Business to the tune of Tk.8, 557.03
million & Tk.17, 646.84 million respectively.
Bank’s wide network of correspondence plays vital role in facilitating its International Trading. At
present, total number of correspondents is 335.

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With a view to facilitating housebound remittance, the Bank made arrangements with a number of
exchange companies during the year. These arrangements brought significant development in
remittance business. We are going to expand this network in near future.

4.2 Sources of foreign exchange and uses of foreign exchange:
Sources of foreign currency of a nation•

Proceeds from Export of commodities.

•

Proceeds from Export of service at abroad.

•

Foreign remittance. (inward by non-resident wage earner/ gifts grants form other

country)
•

Foreign AID/Loan/Credit/Barters.

•

Foreign Direct Investment (FDI).

•

Income on investment receipt from abroad, foreign tourist/travelers.

Uses of foreign exchange•

Payment against imports of commodities from other nations.

•

Payment for services from abroad.

•

Providing gifts grants/donation to other nations.

•

Investment made to abroad.

•

Transfer of profit arising from foreign investment.

•

Residence travel to other nations (tourist/travelers)

•

Maintenance of am basis/consulate office at abroad.

4.3 Role of Bank in Foreign Exchange:
The banks which are dealing in foreign exchange and providing facilities for conversion of one
currency in to another on vice versa are known as authorized dealers in foreign exchange. A bank is
said to buy or sell foreign exchange when it handles the claims drown in foreign currency or the
currency notes and coins of other countries. In the facilitations of international trade performance for
51 | P a g e


importing and exporting by opening letter of credit advising confirming negotiating and remittance of
export proceeds.

4.4 Exchange Rate:
The rate at which one currency is converted in to another currency is the rate of exchange between the
currencies concerned. The conversion of currency is done by bank who deals in foreign exchange.
The rate of exchange is the price of one currency expressed in terms of another currency. (For
Bangladesh, Exchange rate means the price of foreign exchange in terms of Bangladesh Taka)

4.5 Exchange Rate System:
Exchange Rate System can be classified as•

Fixed: Exchange rates are either held constant on are allowed to fluctuate only within

narrow boundaries.
•

Freely Floating: Exchange rates would determine market forces without any

intervention from government.
•

Managed Float: Exchange Rate System that lies some where between and freely

floating system.
•

Pegged: Involves a policy of pegging a currency’s value to another currency on to

same currency on to same other units of accounts.

4.6 Types of Foreign exchange Departments:
Foreign exchange & foreign trade are being routed in NCC bank Ltd. through the following:
1)

Import

2)

Export

3)

Remittance

1. Import:
Import of merchandise essentially involves two things, bring of goods physically into the country &
remittance of foreign exchange toward the cost of the merchandise and services connected with
dispatch of the merchandise. The physical import is regulated by the ministry of commerce through
the chef controller of imports & export while Bangladesh Bank regulates the payments of these
imports through its exchange control department.

52 | P a g e


2. Export:
Export is vis-a-visa of import. The import and export normally made against latter of credit through
dependent upon the buyer & seller relationship. Detail procedure of import & export to be discussed
in ahead.

3. Remittance:
Remittance means transfer of fund. Latin the word “Remittance” we understand transfer of fund from
one place to another place with may be within the country or between two countries. Remittance and
which in effected between two countries is called foreign remittance.

4.7 Function of AD in Foreign Exchange & Foreign Trade of NCCBL:
The Authorized Dealer Bank has vital role in the foreign trade of a country. They provide the
finance needed to execute the transaction. They from the conduit pipe through which the
documents and money are exchange between the exporter and importer. They act as the
extended arm of the reserve bank of Bangladesh in a provision of the foreign exchange
regulation act 1947. For the banks foreign exchange dealing is a specialized activity with
good potential for profits.

FOREGN EXCHANGE TRANSACTION PERFORMED BY AUTHORIZED DEALER
Trade
ImportForeign Export
L/C
Finance
L/C

Amend me
Advising

Confirming

Foreign Foreign
Remittance
Exchange

Advising

-Outward
(DD, TT, MT)

Others
Transactions

-Inward

Confirm

FC Treasury
Operation

ECC (H)

F.c.Depo
Private
Accounts

Dealing Room

Corresponding

-Management

Banking

F/C Accts

-FC Fund Mgt.Dealing

Agency

ECC (P)

TC Sale &
Encashment

PC

Issuance

NFCD

-Cross Fcry

Arrangement

LIM

BBL/C

Dollar

RFCD

-US$/BDT

CC (P)

FDBP

Bond

FC (WES)

Forward-Dealing

Foreign
Guarantee/Bond

LTR

FDBC

PAD
IFDBC

IFDBC

NOSTRO
Reconciliation
Exchange Rate
Exchange position

53 | P a g e
Exchange House


F/C Cash
Sales/
Purchase
Notes
Coins

&

4.8 Import Section
4.8.1 Introduction:
Import is the process of purchasing goods from overseas. Import of goods into Bangladesh is
regulated by the ministry of commerce in terms of the import and export (control) act 1950, with
import policy orders issued periodically and public notices issued from time to time by the chief
controller of import and Export (CC in terms of importers, exporters and indentures (Registration)
order 1981. No person can import goods into Bangladesh unless he/she is registered with the CCI&E.
On the next step, the importer applies to Bangladesh Bank through authorized dealer for import
goods.

4.8.2 Types of Importer:
Import is the flow of goods and services purchased by economic agent located in one country from
economic agents located in another. Hence, import of merchandise essentially involves two things:
bringing of goods physically into the country and remittance of foreign exchange towards the cost of
the merchandise and service connected with its dispatch to the importer. In case of import, the
importers are asked by their exporters to open letter of credit so that payment against goods is
ensured.

Importer
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Private Sector

Public Sector
(Govt. Org. & Corp.)

Commercial

Industrial

Actual Users

(Finished product)

(Raw materials, machineries
etc.)

Fig: Types of Importers
PARTIES INVOLVED IN FOREIGN EXCHANGE BUSINESS:
The Mechanics of Import and Export:

st
1st: Exporter ships the goods

Importer

Importer Preference

Exporter

nd
2nd: Importer pays after goods received

1st: Importer pays for the
goods
Importer

Exporter Preference

Exporter

2nd: Exporter ships the goods after being
paid

DOCUMENTATION:
•

A bill of loading, or, B/L, is issued to the exporter by a common carrier transporting

the merchandise. It will be described more fully later in this chapter.
•

A signed commercial invoice is issued by the exporter and contains a precise
55 | P a g e


description of the merchandise. Unit prices, financial terms of sale, and amount due from the
importer are indicated, as are shipping conditions related to charges, such as “FOB” (free on
board), “FAS” (free alongside), “CFR” (cost and freight), or “CIF” (cost, insurance, freight).
•

Insurance documents must be as specified in the contract of sale and must be issued

by insurance companies or their agents. The insurance may be issued to the exporter, who
must then endorse the policy to the importer, or it may be issued in the name of the importer.
Insurance must be of types and for risks specified in the letter of credit.
•

Packing lists may be required so that the contents of containers can be identified,

either for customs purposes or for importer identification of the contents of separate
containers. In addition, an export declaration prepared by the exporter to assist the
government in the preparation of export statistics may be required.

Shipping deadline: Most importers insist on a specified deadline or time interval by which the
shipment will be made. If the goods in question are particularly time-sensitive (such as products for
seasonal sale), remedies will be included in the sales contract for failure to meet time commitments.
Payment instructions: Which of the parties—the exporter or the importer—is to pay such charges as
freight, insurance, import duties, handling fees, taxes, etc., must be specified carefully in the sales
contract. The currency in which all payments are to be made benzene importer and exporter must also
b specified dearly. The payment terms state whether cash is to be paid in advance, whether letters of
credit are required, and what documents need to be presented against payment, consignments, or
payment on open account. These terms must be detailed, in the sales-contract. The following section
on key documents will elaborate on these payments term concepts.
Packaging and marking: Depending on the nature of the goods, proper packaging may be critical to
preserving and protecting items being shipped. Proper markings on the inner and outer boxes and
containers are needed to conform to customs regulations in countries. These markings typically
include clear and conforming invoices of the value of all items for import duty calculation and
payment purposes.
Warranties, guarantees, and inspections: Assurances regarding the performance or qualities
demonstrated by the goods from the exporter ma also be included in the sales contract. This may
include not only protection against product defects and proper performance, but protection against any
consequential damages from defective parts or performance. In some cases, the Importer may wish to
have the right to inspect the goods before paying (and even the right to inspect the goods while being
manufactured before shipping). These stipulations should of course be delineated in the sales contract.

4.8.3 Requirements of Import
56 | P a g e


In order to import a product from aboard, the importer is obliged to open L/C with a bank. To process
the import business, photocopies of following paper need to be attached with the application form:
•

An up-to-date Trade License

•

Import Registration Certificate

•

Membership Certificate of the Chamber of Commerce or the Related Business

Community
•

Tax identification Number (TIN)

•

Pro-forma Invoice or Indent

CHART OF EXPORT-IMPORT FINANCING:
The Bank as the Import/Export Intermediary:

1st: Importer obtains bank’s promise
to pay on importer’s behalf
Importer
2nd: Bank promises exporter
to pay on behalf of importer.

6th: Importer
pays the bank
Bank
5th: Bank “gives” merchandise
to the importer

4th: Bank pays
the exporter

Exporter
3rd: Exporter ships “to the bank”
trusting banks’ promise.

57 | P a g e


4.8.4 Letter of Credit (L/C)
Letter of Credit (LJC) is an agreement between an importer and a bank (Issuing bank). The bank to
the importer provides letter of credit in order to purchase goods from the exporter. The bank acts on
behalf of the clients to deal with the exporter and the clients make the payment after receiving the
goods accordingly. It is one of modern credit facility that provides assurance, that exporter of goods
will receive his payment from importer. Subject to the condition that the beneficiary exporter submits
documents conforming to the term of L/C. It contains a brief description shipping date and the
expiration date after which the payment will no longer be made. This type of letter is issued by
commercial bank.

4.8.5 Types of Documentary Letter of Credit
Documentary Credits are basically two types. It may be either
•

Revocable

•

Irrevocable

Revocable Credit
This type of credit can be revoked or cancel at any time without consent of, or notice of the
beneficiary. As per Article 8 (a) of UCPDC 5000 “A revocable Credit may be amended or cancelled
by the issuing Bank at any moment and without prior notice to the Beneficiary”. In case of seller
(Beneficiary), Revocable Credit involves risk, as the Credit may be amended or cancelled while the
goods are in transit and before the documents are presented, or although presented, before payment
has been made. The seller would then face the problem of obtaining payment. On the other hand,
Revocable Credit gives the buyer maximum flexibility, as it can be amended or cancelled without
prior notice to the seller up to the moment of payment by the issuing bank at which the issuing bank
has made the Credit available. In modem banking, the use of revocable credit is not widely spread.
Irrevocable Credit:
The Irrevocable Credit is a commonly used type of documentary credit. The Credit which cannot be
revoked varied or changed/amended without the consent of a parties-buyer (Applicant), seller
58 | P a g e


(Beneficiary), Issuing Bank and Confirming l3ank (in case of confirmed LC). As per Article 9 (a) of
UPCDC 500, an irrevocable Credit constitutes a definite undertaking of the issuing Bank, provided
that the stipulated documents are presented to the Nominated Bank or to the issuing Bank and that the
terms and conditions of the Credit are complied with. Irrevocable Credit gives the/seller greater
assurance of payments, but he remains dependent on an undertaking of a foreign bank, Irrevocable
Credit may be unconfirmed.
Special types of Letter of Credit (L/C)
•

Revolving letter of credit (L/C)

•

Transferable letter of credit (L/C)

•

Back-to-Back letter of credit (L/C)

•

Red clause letter of credit (L/C)

•

Green clause letter of credit (L/C)

4.8.6 Features of Letter of Credit
•

It is a documentary credit.

•

It contains a directive for honoring a bill, a check of specific amount.

•

Banks work as representative of the importer.

•

It contains as representative of the importer.

•

It contains a definite time period.

•

It works as a contract among different parties to it. It bears a specific date

•

A bank issues it.

Advantages of Letter of Credit
To the exporter



A letter of credit is generally a very safe method of obtaining payment provided the

exporter complies with the terms of credit.


An irrevocable credit cannot be amended without his knowledge agreement.



A confirmed irrevocable undertaking of a bank generally in the exporter’s country.



A credit open in his favor can often lead to a credit being opened on his behalf in

favor of his supplier (to-back credit); alternatively the credit may be transferable.

59 | P a g e




Finance may be available by means of:- negotiating of his bills. The exporter has

indirect control of the document of title.


Better than collection as a means of securing payment.

To the Importer
Protect own position by stating the precise documentation required.


He should consider making a status report on the supplier and in the case of a large

order call for a performance bond.


Credit can be obtained from the exporter by insisting on the use of a term bill or

exchange.


He could also consider the use of a revocable credit, which would be particularly

appropriate where the goods are, dispatched in part shipments as soon as the first lot of
goods arrives. The importer can inspect them and if they are not up to quality, can cancel
the credit, hopefully before other shipments are mode.


The advising bank will only make payment when the exact document Specified has

been received.


Once the specified documents which will usually be the documents of title are in the

hands of the advising bank then it will only be a matter of time before they are sent to the
issuing bank allowing him to collect the goods subject to their safe arrival.


Finance may be available by means of


Ordinary bank loan / overdraft



Loan against imported merchandise.



Acceptable credit.

4.8.7 Documentation required for opening L/C
In order to open a L/C, a client has to submit the following papers:
•

A photocopy of Membership Certificate from “The Chamber of Commerce” or the

Related Business Community
•

Import Registration Certificate (IRC)

•

Trade License VAT

•

Certificate of incorporation

•

Memorandum of article

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•

Insurance cover note

•

IMP form LCA form

•

Import Policy Order

•

Current deposit A/C Income Tax Document

•

Contingency Liability Voucher

4.8.8 Procedure of L/C Opening and Payment
•

NCCBL identify whether the goods (will be imported) are in the import list, which is

selected by the government of Bangladesh.
•

Justify the clients credit worthiness by collecting social status• information form after

business or from after bank credit report.
•

Judge whether the importers goods bear good quality and more is a market of goods.

•

Secures the documents efficiently.

•

If every thing is OK, then the client proposes to fill up the prescribed form,

•

The sum percent of total amount of L/C should be deposited and get admonition

form.
•

Then it is registered in L/C register book.

•

Three copies of L/C are prepared.

•

Two out of three is sent to advising bank and rest are sent to reimbursing bank with

order to pay claim to the negotiating bank.
•

Advising bank sent one copy with advice to ship to the importer.

•

Exporter submits necessary documents to the negotiating bank and receipts his/her

claim.
•

Negotiating bank sent two same letter of payment to the issuing bank and importer.

Simultaneously the negotiating banks demand his/her claim from reimbursing bank.

Payment System
•

At sight Payment Deferred Payment

4.8.9 Charges of L/C
•

L/C commission
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•

VAT 15% OF L/C amount

•

Postage Tk 200

•

Miscellaneous tk 150

•

Stamp tk 150

•

SWIFT Charge TK.3000

4.8.10 Parties involved in a Letter of Credit:

Importer/ Buyer

Opening Bank

Exporter/ Beneficiary

Advising Bank

Negotiating Bank

Conforming/ Reimbursing Bank

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Importer/Buyer: Importer/Buyer is the party who opens L/C on behalf of exporter by issuing bank.
Opening/ Issuing Bank: Opening/Issuing Bank is the bank which opens or issues a L/C on
behalf of the importer. It is also called the importer's /buyer's bank.
Exporter/Beneficiary: Exporter/Beneficiary is the party in whose favor the UC is established.
Advising Bank: Advising Bank is the bank through which the UC is advised to the exporting country
& it may be a branch of the opening bank or a correspondent bank. It may also assume the role of
conforming and/or negotiating bank depending upon the conditions of the credit.
Negotiating Bank: Negotiating Bank is the bank that negotiates the bills & pays the amount to the
beneficiary. It has to carefully scrutinize the documentary credit before negotiating in order to see
whether the documents apparently are in order or not. The advising bank & the negotiating bank may or
may not be one & the same.
Reimbursing Bank: Reimbursing Bank is the bank, which would reimburse payment/claim to the
negotiating bank. It is to be nominated by the issuing bank.

Circulation Cycle of L/C:
Indenters

Seller (Exporter)

Buyer (Importer)

Advising Bank
Confirming Bank

Issuing Bank

Negotiating Bank

63 | P a g e

Reimbursing Bank


4.8.11 Import financing:
SOD (Importer)
Advance allowed in foreign currency for opening L/C to import good, fall under this type of lending.
This is also an advance of temporary period, which is also known as pre finance.
PAD (Payment Against Document)
Payment against lodgment of shipping documents of goods, imported through L/C fans under this
head. It is an in term advance connected with import and is generally liquidate shortly against
payment, usually made by the party for retirement of documents to release goods from customer
authority as payment has to be made within 7 days after the documents have been received and
negotiating bank may claim interest for making delay.
Loan against Imported Merchandise (LIM)
Advance allowed for retirement of shipping documents and release of goods, imported through LIC
taking effective control over the goods by pledge in to downs under bank’s lock and key fall under
this type of advance. This is also a temporary advance connected with import, which is known as
post-import financing would falls under the category “Commercial Lending”.
Loan against Trust Receipt (LTR):
Advance allowed for retirement of shipping documents would release goods imported through L/C
falls under trust with the arrangement that sale proceeds should be deposited to liquidate the advance
within a given period This is also a temporary advance connected with import, and known as post
import financing would and under the category “Commercial Banking”.
Major problems in the operation of L/C
•

Bank deals with documents not with goods, but sometimes goods are not as per

document.
•

Over invoicing by mist up conspiracy of buyer and supplier.

64 | P a g e


•

In advance of pre-shipment inspection supplier may inferior goods and for that the

bank faces some problem.
•

If the market price of the goods falls and the party maintains less the liquid money of

margin then the party would not release the goods.
•

In absence of insurance cover note with access risk.

•

In case of frequent change in tax, tariff duty and the exchange rate of Taka with

foreign currency.

4.9 Export Section
4.9.1 Introduction:
Export is the process of selling goods ad services to the other country The bank is making vast
revenue by hailing export trade Export formality introducing Back-to-Back letter of credit facility and
boded warehouse system, which acts as catalytic force for the success of the industry As the low
initial capital requirement, short gestation period, high turnover ratio to investment and due to
availability of Back-to-Back UC facility, one could go into production within a period of four to six
months time Because of the prospect of quick turnover, the commercial banks also come forward to
finance these enterprises, of which NCCBL is the pioneer By 2000, the number of garments industry
had grown to more than 3500 registered units, which accounted for 73% of the total export earnings
65 | P a g e


of the country This impressive performance has been possible as the buyers, who find East Asia too
expensive as supply source, have been attracted by Bangladesh’s relatively low cost of production and
high quality proud According to Foreign regulation act, 1947, none can export by post and otherwise
than by post any goods either directly or indirect to any place outside of Bangladesh, unless a
declaration is furnished by the exporter to the collector of customers or to such other person as the
Bangladesh Bank may specify in this behalf that foreign exchange representing the full exporter value
of the goods has been or will be disposed of in a manner and within a period specified by Bangladesh
Bank. Payment for goods exported from Bangladesh should be received through an authorized dealer
in freely convertible foreign currency or in Bangladeshi Taka from a Non-resident Account. The
Export section deals with two types of credit that are as follows
•

Exporter letter of credit

•

Back-to-Back letter of credit

4.9.2 Exporter letter of credit
The other type of L/C facility offered by NCCBL is export. L/C. Bangladesh exporters a large
quantity of goods and services to foreign households. Readymade textile garments (both knitting and
wove) jute, jute-made products, frozen shrimps, tea are the main goods that the Bangladeshi exporter
to foreign countries. Garments sector is the largest sector that exports the lion share of countries
export. Bangladesh exports about 40% of its readymade garments products to USA, most of the
exporter who export through NCCBL are readymade garments exporters. They open against the
import L/C opened by their foreign importers.

4.9.3 Export Documentation
In any business especially in export business documentation is one of the most important part.
Implementation of a business contract much depends on preparing and submitting the documentation
properly. In order to export any goods or services to overseas, the exporter should have affixed the
photocopies of the following documents for export:
•

Export Registration Certificate (ERG)

•

Bill of exchange

•

Bill of Lading /Airway Bill /Truck Receipt.

•

Commercial invoice Certificate Of Origin

•

Mate Certificate
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•

Packing List

•

Insurance Coverage

•

Beneficiary Certificate where the exporter tells about the goods he/she wants to

export
Besides, more documents are required for some specific goods. Following are the documents under
this category:
•

Quality control Certificate (for food products)

•

GSP Certificate (for handicrafts products)

•

Consular Invoice (for Middle countries)

•

Inspection Certificate

The types and number of the documents are to be submitted to implement the export contract are
mentioned in the LIC. Banker’s negotiation of bill depends upon these documents.

4.9.4 Back-to-Back Letter Of Credit
Back to Back LIC is a type of pre—shipment finance by way of opening L/C in favor of a local or
foreign supplier for purchase of raw materials or the finished merchandise, as the case may be, to
execute export order. This type of L/C is only opened on the strength of an export order received by
way of an L/C or firm contract with or without realization of cash margin or collateral security
depending upon banker—customer relationship. In awarding this type of facility particular care shall
be taken to see that there remains adequate time to process the raw materials /intermediary or finished
products imported under 88 LIC to execute the work order.

Features of Back-to-Back Letter Of Credit
Back to Back is an import L/C to procure goods I raw materials for further.
BTB is operand based on Export L/C / BTB is a kind of Export Finance. Export L/C is at sight, but
Back to Back L/C is at unasked scrutiny. No margin is required to open Back to Back L/C.

Necessary documents required by bank for opening BACK TO BACK L/C
•

Prescribed application and agreement of LIC duly stamped and signed

•

A set of LCAF(Letter Of Credit Authorization Form) duly filled in and signed
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•

Pro-forma Invoice! Indent duly accepted

•

IMP From duly signed

•

Insurance Cover Note along with Money Receipt

•

Letter of authority to recover Bank’s charges from account

•

Necessary charge documents duly stamped and signed

4.9.5 Financing for Exporter
Pre-Shipment Export Financing
During the process of manufacturing the exportable garments, the exporter may face working capital
crisis, which causes late shipment of goods. To avoid this situation, banks may also finance (besides
BTB L/C facility) pre shipment export financing to the exporter in the from of packing Credit! Export
cash credit maximum 10% of the master! Export L/C to meet up overhead and factory expanses i. e.
salary, office rent, telephone bill, electricity bill.
The PC I ECC Allowed Earlier may be Adjust with Interest at the Time of Negotiation: After
negotiation of export bills, the documents are sent abroad usually to the Export L/C opening bank as
per instruction of Master L/C. The negotiation bank claim reimbursement of the proceeds from the
bank as mentioned in the Master LIC. The negotiation bank also advice the L/C issuing bank to remit
the proceeds to Head Office A/C maintained with correspondence abroad advice to negotiation bank.
Foreign Documentary Bills for Purchased (FDBP)
Finally, after manufacturing the garments the export of the same is made. The Exporter then submits
the related shipping documents to the bank for I collection. After receipt of the documents, the same is
duly scrutinized with the respective Export L/C and if found drawn strictly in conformity with L/C
terms and conditions a portion of balance documents value (after deduction of BIB, Term loan, FDR,
PC/ECC with interest, Local Commission, Foreign Commission, Bank Commission, Reimbursement
charges etc.) is negotiated if requested by the party.
Discrepant export documents must not be negotiated without prior approval of the Foreign Master
L/C issuing bank. The discrepancies may be classified as major or minor. There may be some
discrepancies, which are removable, and then exporters to be advised to remove the discrepancies.
Then documents are sent on collection (FDBP) basis for major discrepancies.
Local documentary Bills for Purchased (LDBP)

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When export is done in local then importers opens a L/C in his/her bank (associating bank). Importers
import supplying accessories from his/her supplier (exporter) and it is done in deferred payment.
Importer pays the payment by giving L/C to exporter. But exporter needs cash payment from his/her
advising bank against the L/C. The advising bank finances the exporter 90% of the L/C value and
takes 10% of value of L/C as interest @15%.

4.10 Foreign Remittance
These remittance services are providing for exchange foreign currency. These services are as follows:
1.

Foreign Demand Draft.

2.

Traveler’s Cheque.

3.

Money Gram.

1.

Foreign Demand Draft: NCCBL accepts the charges for TOEFL, SAT, GMAT etc.

through Foreign Demand Draft. NCCBL opens Student Files to issue Foreign Demand Draft
following the permission of Bangladesh Bank. Before issuance of FDD, NCCBL asks the
students to fill up the TM from, which contains the following particulars-



Name of the student



Full address of the student



Amount of FDD in Foreign Currency



Purpose of Remittance



Address of the Institution to which the FDD will be favored



Country receiving payment



Passport no. of the student with date of issue



Signature of the student

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2.

Traveler’s Cheque: Traveler’s cheques are issued by banks to avoid the risk of loss

or inconvenience in having to carry large amount of cash while traveling. The salient features
of T.C. are :

 The buyer of T.C. needs not to be a customer of NCCBL.
 The buyer has to deposit money with the branch of NCCBL equivalent to the amount
of the T.C. he wants to buy.
 Each T.C. is signed by the buyer at place marked “when countersigned below with
this signature”, before the NCCBL officer.
 T.C. is issued in single name. It is not issued in joint names or names of clubs,
societies and companies.
 There is no expiry period for the T.C.

3.

Money Gram: National Credit and Commerce Bank Limited is very happy to

announce to have joined hands with Money Gram Payment Systems Inc to serve expatriates
to send money back home quickly from anywhere in the word. Moreover, money can also be
sent quickly through Money Gram from Bangladesh to other parts of the World as is done
through the banking channel. At the moment we are concentrating on home remittances being
sent by the expatriates.
Money Gram Payment system Inc is a non-back provider of electronic money transfer service. Money
Gram is providing its customers a service of an unsurpassed quality and superior value. Money Gram
has over 25,000 Agent locations throughout the world. Persons anywhere require transferring cash
quickly, reliably, conveniently and at attractive prices to more than 115 countries can depend Money
Gram agents for the service.
Process:


Sender goes to the Money Gram agent location to transfer his money to

Bangladesh.


Sender initiates transfer by completing “send” format at Money Gram agent

location.

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

Sender gets receipt and notifies recipients of the transaction reference

number.


Recipients goes to the Money Gram agent (in Bangladesh it NCCBL)

location, fill out a “Receive” from to request funds and shows proper identification.


Receiving Agent contact the Money gram transaction center (Head office of

NCCBL) to obtain authorization to pay recipient.


Recipients receive the funds.

Money Gram is one of the fastest ways to transfer money. Customers using Money Gram can send or
receive money usually within 10 minutes from anywhere in the world. At NCC Bank we provide the
Recipients immediate attention ad due care. We have made it a point to pay the Recipient within
minutes. The Recipients need not require having a bank account. We do not levy any extra charge.
We give a better exchange rate to the Recipient. The Recipient can approach any for the NCC Bank
branches at his convenience for payment.

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My observation
I.

NCCBL Motijheel branch has SWIFT facilities. Very few banks in our country offer this
facility. By using this modern technology Motijheel branch, provide fastest service on L/C
operating to its client.

II.

Per-shipment inspection certificate should obtain from the exporter of back to back L/C.
Because it reduce it fraud and forgery in case of import against master export L/C, but all the
time this pre-shipment inspection certificate are not wanted by the bank.

III.

In case of Export L/C, sometimes insist to give their payments though their documents are
found discrepant. In some cases, Bank has to give payment to these customers for different
reasons. I think the bank should be as stricter as possible about giving payments against
discrepant documents without hurting the customer.

IV.

In many cases, the foreign banks want confirmations from other foreign banks with which
this bank has correspondence. This proves the poor financial condition of our country. Banks
should try to improve this situation.

V.

The bank should try to arrange more training programs for their officials. Quality training will
help the officials to enrich them with more recent knowledge of International Trade
Financiering.

VI.

The bank lacks a division for customer service, because there are customers who have no
banking knowledge. So they need to be properly guided. Sometimes the officers are so busy
they do not have enough time to spare.

VII.

NCCBL is one of the largest private commercial Bank in our country. Therefore, it must think
seriously to adopt on line banking in all branches.

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NCC Bank's General Banking & Foreign Exchange

NCC Bank's General Banking & Foreign Exchange

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