General Banking Activities of Sonali Bank Limited.A Study on Mithapukur Branch, Rangpur.

A Study on General Banking Activities of Sonali Bank Limited
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An Internship Report
On
General Banking Activities of Sonali Bank Limited.
A Study on Mithapukur Branch, Rangpur.
Prepared By
Md. Zahidul islam
ID. No: 1220036
Reg. No: 000004436
BBA 4th
Year 2nd
Semester
Department of Finance and Banking
Begum Rokeya University, Rangpur.
Date of Submission: February 5, 2018

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INTERNSHIP REPORT
ON
“General Banking Activities of Sonali Bank Limited”
Submitted to the Department of Finance and Banking Begum Rokeya University,
Rangpur in Partial Fulfillment for the Degree of Bachelor of Business
Administration (BBA) in the year 2016.
Course Code:FIN 4207
Course Title: Internship program
SUPERVISOR
Md. Sazzad Hossain Patwary
Assistant Professor
Department of Finance and Banking,
SUBMITTED BY
Md. Zahidul islam
ID No: 1220036
Reg. No: 000004436
BBA 4th
Year 2nd
Semester
Date of Submission 05-02-2018

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Dedication
Dedicated to My
Beloved Parents and
Supervisor

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Letter of Submission
February, 05, 2018
To,
Assistant Professor
Subject: An Internship Report on General banking Activities of Sonali Bank
limited.
Dear Sir,
I am pleased to present the final internship report under the title of “General banking
activities of Sonali Bank Limited, A Study on Mithapukur Branch, Rangpur.”
The report is prepared as per the requirement of BBA in Department of Finance and
Banking. This report is extremely valuable to me as it has helped me to gain practical
experience regarding General Banking Activities. My internship with Sonali Bank
Limited has been a worthwhile experience and the exposure to such organization is
definitely valuable to me.
In completing the report, I have tried my level best in imparting every available
details of the Bank avoiding unnecessary amplification of the report. I hope that this
report will meet the standards of your Judgments.
Sincerely yours,
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
Md. Zahidul islam
Id No: 1220036
Reg. No: 000004436
BBA 4th
Year 2nd
Semester

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Declaration
I hereby declare that, the internship report under the title of “general banking
activities of Sonali Bank Limited: A Study on Mithapukur Branch, Rangpur”
has been prepared by me under the supervision of Md. Sazzad Hossain Patwary,
Assistant Professor, Department of Finance and Banking, Faculty of Business Studies,
I also declare that all the information embodied in this report is original and neither
this report nor any part of this report has been submitted elsewhere for the award of
any other degree or any other purpose.
Md. Zahidul Islam
Id No: 1220036
Reg. No: 000004436
BBA 4th
Year 2nd
Semester

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SUPERVISOR’S CERTIFICATE
This is to certify that Md. Zahidul islam is a student of department of Finance and
Banking, ID:1220036, has successfully completed his “Internship Program” entitled
“General Banking activities of Sonali Bank Limited”-a study on Sonali Bank,
Mithapukur Branch, Rangpur, under my supervision as the partial fulfillment of BBA
award in Finance and Banking.
He has done his job according to my supervision and guidance. He has tried his level
best to do this successfully. I think this program will help him in the future to build up
his career. I wish his success and prosperity.
……………………………
Assistant professor

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Acknowledgement
Preparation of this report required assistance, guidance and also took valuable time of
many important and prestigious personalities. I want to express my gratitude to
Manager, of Sonali Bank Limited for providing me the opportunity to do my
internship. I worked with all the concerned officers of Sonali Bank Ltd, Mithapukur
Branch, Rangpur.Who kindly provide me the information and training and other
employee of that branch helped me a lot about my practical experience in the bank. I
would like to express my sincere gratitude to all officers of this branch who had
responded cordially to meet my need relating to the report and give me their support.
To convey my gratitude to Mr. Md. Abdul Latif Sarkar (Manager of Sonali Bank
Limited,Mithapukur Branch, Rangpur).
Then I would like to give special thanks to my course supervisor Md. Sazzad
Hossain Patwary, Assistant Professor, Department of Finance and Banking, Begum
Rokeya University, Rangpur who has given me the opportunity and directions to
prepare such a meaningful report. I am also satisfied to work under his supervision
and care.
Finally, appreciation is extended to those of my friends and family especially my
supervisor who helped me to get the chance for internship program in the Bank.

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PREFACE
Internship is the integral and basic requirement of all the business study programs.
Because it is the practical implication of the theoretical knowledge which we have
taught in our business Subjects to gain further knowledge and experience about
professional business activities. It Equips us with the necessary knowledge, skills and
values of business culture which are basic Requirement of the business professional
and which also helps new graduates to perform Professionally as they get first step in
their practical professional life. For this reason I was placed at Sonali Bank Limited,
Mithapukur Branch, Rangpur, Where I have done my 3 month internship. During
my internship tenure I have gained a lot of Knowledge about Banking Operations
under the supervision and guidance of my Internship Supervisors. During my whole
duration I was rotated in the different section of the branch and was thoroughly
briefed about the procedures of different banking operations by the concerned staff.
My internship report contains all the knowledge which I have learnt there.

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EXECUTIVE SUMMERY
Now a days Modern Banking presents an extensive variety of economic services
which includes credit, funds, and payment services. Establishing a good brand image
of honesty to the shareholders is the vital characteristic of banking process. Internship
program is an extensive process which helps a student to attain realistic understanding
along with theoretical. Any Study which has no relation with on the job learning is
actually not a learning at all and doesn’t help to recognize genuine situation of
business world. I have obtained a huge bunch of practical knowledge on General
Banking procedures performed by SBL Mithapukur Branch by getting chance to do
internship here. As part of completing my graduation, I needed to complete a three
month period of Internship program. I decided to do my Internship at SBL, I was
consigned to do my intern in General Banking Activities. In General banking
activities I took the opportunity to learn about as much as possible while I was
working on the division.
Since General Banking is the main point of discussion in this report that is why I
mostly discussed its diagnosis and necessity. General banking operation includes
general account’s opening, requirements of opening accounts, schemes, rate of
interest on deposit, cheque clearing and bills department sections, collection section,
local remittance department and customer services.
CHAPTER ONE
Introduction

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1.1 Introduction
Bank is a financial institution which deals with money. Not all banks are the same.
There are different types of banks: co-operative banks, savings banks, investment
banks and central banks. Because of its transitional role, banking system occupies a
vital place in a country’s economy. It confirms distribution and re-allocation of assets
and keeps up the motion of economic activities. As monetary intermediaries, banks
stand between investors who invest capital and debtors who demand capital. It
assembles asset for both the public and private sectors, and provides inventive
answers to meet the requirements of entrepreneurs and government agencies. Thus the
banking segment plays a key role in the evolution of Bangladesh’s economy. After the
independence of Bangladesh in 1971, six state owned commercialized banks were
composed, two state owned banks that specialized in lending to the agriculture and
industry, three foreign banks including standard chartered bank. The banking industry
has faced momentous expansions from 1980’s. Private Banks has entered in banking
industry, Micro finance banks grew rapidly, which has provided assistance to meet the
needs of poor citizens.
The Sonali Bank limited was established in Bangladesh as a banking company. I
worked in the General Banking (account opening, clearing, transfer, deposit and cash,
loan department, of this bank). This gave me the opportunity to know more on
different aspects of the company. So, I have prepared my internship report on
“general banking” of Sonali Bank Limited.

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1.2 Objectives of the Report:
a. General objective:
 To analyze The General banking System, Loan and Advances of “The Sonali
Bank Limited.”
b. Specific objectives:
 To get enough knowledge about General banking activities of SBL.
 To Know about Central bank requirements for the commercial banks on Loan
and Advances.
 To analyze the Credit Management statement of SBL by using some statistical
measures.
 To find out the internal system & actual General banking, Loan and Advances
process of SBL.
 To point out the major findings of the report & provide some valuable
recommendations based on them.

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1.3 LITERATURE REVIEW
The core service (“what” is being offered) has features that shape customer perception
and differentiate one service provider from another (Sureshchandar et al. 2002;
Brogowicz et al. 1990; Rust & Oliver 1994, Schneider & Bowen 1995; Kotler 1984).
Lichtenstein and Williamson (2006) focuses on attention, accessibility, convenience,
self-efficacy, usability, risks and costs, relative advantage, knowledge and support as
important factors that affect the consumer’s perception on the e- banking activities of
any bank.
DeLone and McLean IS Success Model and Trust-Commitment Theory focuses on
the Web site quality, service quality, perceived security, perceived privacy, user
satisfaction, trust, commitment, usage and loyalty as some factors that affect and
influence consumer satisfaction (Susanto and Zo, 2011).
In this paper focouson the present situation or credit policy of bangladesh bank
towards attaining financial enclose ,the bank is responsible to its region as same to
the green banking Activities. (shafiqul, I., & Chandra, D., 2013)
In recent year several studies in to the bank failure and to find that assets quality is
to the indication of the insolvency of a bank (Messai, S., 2013)
1.4 Methodology of the study
This study aims to gather the experience in the work place regarding the deposit
sectors. To prepare the report following secondary sources are utilized. For preparing
this report I have used some information from the following sources
 Deposit Desk officers, Mithapukur Branch,SBL,
 Annual report,
 Corporate head office,
 The company websites.
Data Analysis:
This is a descriptive report. To complete this Report I have used 2 years data, 2015
and 2016. The data gathered from secondary sources were arranged orderly to get a

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clear picture of the Sonali bank Deposit management policy regarding collecting
process and monitoring. Study includes both qualitative and quantitative analysis of
General Banking Activities. Here all the graphical expression are expose with the help
of column chart, line chart.
 Techniques:
Data-collection techniques allow us to systematically collect information about our objects of
study (people, objects, phenomena) and about the settings in which they occur. In the
collection of data we have to be systematic. If data are collected haphazardly, it will be
difficult to answer our research questions in a conclusive way. However, I’ve used some
statistical techniques to analyze the data. One is -
a. Ratio Analysis.
b. Trend Analysis
 Tools:
The tool those I’ve used to implicate the techniques for analyzing data, are simple MS Word
& MS Excel.
1.5 Scope of the study
I have been assigned in the Rangpur, Mithapukur Branch of Sonali Bank Limited and
thus covered me the way to get myself familiarized with the banking environment for
the first time. Indeed, I have had an opportunity to gather experience by working in
the different departments of the Branch. The area of concentration of this report is
confined to investigating different aspects of the banking transactions as well as
problems and prospects and the activities of bank by this way an endeavor is made to
give recommendations for removing the problems.

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1.6. Limitations Regarding the Study:
The Report is faced by some limitation. The Major Limitations are follows:
Time is inadequate:
Three months internship program is not sufficient to know the deep things. The
allocated time is not sufficient for us to gather knowledge and to make the study as a
complete and fruitful one. It was one of the main constraints that affected covering all
aspects of the study.
Lack of primary Information:
The study also suffered from inadequacy of primary data. Secondary source of
information was also not sufficient for the completion of the report. Much
confidential information was not disclosed by respective personnel of the department.
Other limitations are as follows:
For the lack of our practical knowledge, some shortcoming may be available
in the paper.
The bank has naturally shown us some indifference connecting its most
confidential information.
The employees in this branch are so much busy in their responsible fields;
they could hardly provide little time to discuss with them.
There are some places where I can’t access.

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CHAPTER TWO
Financial system in Bangladesh

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1.7 Financial system in Bangladesh
A financial system is a system that to channels funds from lenders to borrowers, to
create liquidity and money to provide a payments mechanism, to provide financial
service such as insurance and pensions and to offers to portfolio adjustment facilities.
A developed financial system is one that has a secure and efficient payment system,
security market and financial intermediaries that arrange financing and derivative
markets and financial institutions that provide access to risk management instruments.
The present structure of the financial system in Bangladesh comprises of various type
of banks, insurance companies, and non-bank financial institution.
The Financial System of Bangladesh consists of three broad sectors.
They are:
1. Formal sector
2. Semi-formal sector
3. Informal sector
The sectors have been categorized in accordance with their degree of regulation. The
formal sector includes all regulated institutions like banks, non-bank financial
institutions (FIs), insurance companies, capital market Intermediaries like brokerage
houses, merchant banks etc.; micro finance institutions (MFIs).
The semi-formal sector includes those institutions which are regulated otherwise but
do not fall under the jurisdiction of Central Bank, Insurance Authority, Securities and
Exchange Commission or any other enacted financial regulator. This sector is mainly
represented by Specialized Financial Institutions like House Building Finance
Corporation (HBFC),Palli Karma Sahayak Foundation (PKSF), Someby
Bank, Grameen Bank etc., Non-governmental organizations (NGOs) and discrete
government programs.
The informal sector includes private intermediaries which are completely unregulated.
 Formal Sector:
The formal sector of the financial system of Bangladesh comprises two sub-sectors:
1. Financial Market

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2. Regulators & Institutions
 Financial market
There are three types of financial markets in Bangladesh. They are:
1. Money Market : Banks, Non-bank Financial Institutions, and Primary Dealers
2. Capital Market : Investment Banks, Credit Rating Companies, and Stock
Exchanges
3. Foreign Exchange Market : Authorized Dealers.
 MoneyMarket:
The primary money market is comprised of banks, FIs and primary dealers
intermediaries and savings & lending instruments, treasury bills as instruments. There
are currently 15 primary dealers (12 banks and 3 FIs) in Bangladesh. The only active
secondary market is overnight call money market which is participated by the
scheduled banks and FIs. The money market in Bangladesh is regulated by
Bangladesh Bank (BB), the Central Bank of Bangladesh
 Capitalmarket:
The primary segment of capital market is operated through private and public offering
of equity and bond instruments.The secondary segment of capital market is
institutionalized by two (02) stock exchanges-Dhaka Stock Exchange and Chittagong
Stock Exchange. The instruments in these exchanges are equity securities (shares),
debentures, corporate bonds and treasury bonds. The capital market in Bangladesh is
governed by Securities and Commission (SEC)
 Foreign Exchange Market:
In the foreign exchange market banks are free to buy and sale foreign currency in the
spot and also in the forward markets. However, to avoid any unusual volatility in the
exchange rate, Bangladesh Bank, the regulator of foreign exchange market remains
vigilant over the developments in the foreign exchange market and intervenes
by buying and selling foreign currencies whenever it deems necessary to maintain sta
bility in the foreign exchange market.

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 Money market & its instruments
The money market is used by a wide array of participants, from a company raising
money by selling commercial paper into the market to an investor purchasing CDs as
a safe place to park money in the short term. The money market is typically seen as a
safe place to put money due the highly liquid nature of the securities and short
maturities, but there are risks in the market that any investor needs to be aware of
including the risk of default on securities such as commercial paper. The primary
money market is comprised of banks, FIs and primary dealers’ as intermediaries and
savings & lending instruments, treasury bills as instruments. There are currently 15
primary dealers (12 banks and 3 FIs) in Bangladesh. The only active secondary
market is overnight call money market which is participated by the scheduled banks
and FIs. The money market in Bangladesh is regulated by Bangladesh Bank (BB), the
Central Bank of Bangladesh. The developed money market has the following
characteristics:
(i) Existence of Central Bank,
(ii)Highly organized commercial Banking System
(iii)Existence of sub-markets
(iv) Healthy competition in sub-markets
(v) Integrated structure of money market
(vi) Availability of proper credit instruments.
(vii) Adequacy and Elasticity of funds
(viii) International attraction
(ix) Uniformity of interest rates
(x) Stability of prices and
(xi) Highly developed Industrial system
 Money Market Instruments:
The common types of money market securities traded in Bangladesh are given below:
i) Treasury Bills (T-Bills)
ii) Repurchase Agreements (Repo or Reverse Repo)
iii) Commercial Papers
IV) Certificate of Deposit
v) Banker's Acceptance
 Treasury Bills or T-Bills:

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Treasury Bills, one of the safest money market instrument, are short term borrowing
instruments of the Central Government of the country issued through the Central
Bank. They are zero risk instruments. It is available both in the primary market as
well as secondary market. T-bills are short-term securities that mature in one year or
less from their issue date. They are issued with three-month, six-month and one-year
maturity periods. The Central Government issues T-Bills at a price less than their face
value (par value). They are issued with a promise to pay full face value on maturity.
So, when the T-Bills mature, the government pays the holder its face value. The
difference between the purchase price and the maturity value is the interest income
earned by the purchaser of the instrument-Bills are issued through a bidding process
at auctions. The bid can be prepared either competitively or non-competitively. In
case of competitive bidding, the return on maturity is specified in the bid. In case the
return specified is too high then the T-Bill might not be issued to the bidder. In case of
non-competitive bidding, return required is not specified and the one determined at
the auction is received on maturity.
 Commercial paper:
Commercial paper is short term debt instruments issued by well known, credit worthy
firms. It is generally not issued in Bangladesh. But only types of commercial papers
available are- the bills of exchange and promissory notes, mutual funds
etc. Negotiable Certificates of Deposit (NCDs): NCDs are certificates that are issued
by large commercial banks as a short term source of fund. The nonfinancial
corporations often purchase NCDs. The minimum denomination is not fixed in
Bangladesh. Maturities on NCDs normally range from 15 to 1 years. It provides
return in the
Form of interest along with the difference between the price at which NCDs is
redeemed and the purchase price.
 Repurchase Agreements:
With RA or repo one party sells securities to another party with an agreement to
repurchase it back at a specific date and price. Financial institutions often participate
in RA.
 Bankers Acceptance:
It indicates that a bank accepts responsibility for a future payment which is commonly
used for international trade. Maturity of it is ranged from 30 to 270 days. The return
from it is above T-bill yield.
Capital Markets & its instruments
A market in which individuals and institutions trade financial securities.
Organizations/institutions in the public and private sectors also often sell securities on
the capital markets in order to raise funds. Thus, this type of market is composed of
both the primary and secondary markets. Both the stock and bond markets are parts of
the capital markets. For example, when a company conducts an IPO, it is tapping the
investing public for capital and is therefore using the capital markets. This is also true
when a country's government issues Treasury bonds in the bond market to fund its

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spending initiatives. A. Regulatory Bodies The Securities and Exchange Commission
(SEC) exercise powers under the Securities and Exchange Ordinance 1969, Securities
and Exchange Commission (SEC) Act 1993, Depository Act, 1999. It regulates
institutions engaged in capital market activities. B. Participants in the Capital Market
The SEC has issued licenses to institutions to act in the capital market of these, 52
institutions are Merchant Banker & Portfolio Manager while 16 are the Asset
Management Companies and 9(one) acts as Security Custodians beyond these
institutions SEC issuing 9 (nine) registration certificate for Credit Rating Companies.
Stock Exchanges
There are two stock exchanges:
a) The Dhaka Stock Exchange (DSE) and
b) The ChittagongStock Exchange (CSE) which deals in the secondary capital market.
DSE was established as a Public Limited Company in April, 1954 thereafter CSE in
April, 1995. As on June 15, 2012 the total number of enlisted securities with DSE and
CSE were 237 and 204 respectively. Out of 281listed securities including mutual fund
with the DSE, 237 were listed companies, 41 mutual funds.
Functions of SE are:
1. Regulating the business of the Stock Exchanges or any other securities market.
2. Registering and regulating the business of stock-brokers, sub-brokers, share
transfer agents, merchant bankers and managers of issues, trustee of trust deeds,
registrar of an issue, underwriters, portfolio managers, investment advisers and other
intermediaries’ in the securities market.
3. Registering, monitoring and regulating of collective investment scheme including
all forms of mutual funds.
4. Monitoring and regulating all authorized self-regulatory organizations in the
securities market.
5. Prohibiting fraudulent and unfair trade practices relating to securities trading in any
securities market.
6. Promoting investors’ education and providing training for intermediaries of the
securities
Market.
7. Prohibiting insider trading in securities.
Capital market instruments:
Bonds:
Bonds are long term debt securities issued by corporations & government agencies to
support their operations.
Mortgages:

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Mortgages are long term debt obligations created to finance the purchase of real
estate.
Stocks:
It is also called equity securities. Stocks are certificates representing ownership in the
corporations that issued them. It has higher rate of return but also exhibit a higher
degree of risk.

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CHAPTER TREE
Banking Sector in Bangladesh

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Banking Sector in Bangladesh
Definition of Bank:
A bank is a financial institution that accepts deposits from the public and creates
credit. Lending activities can be performed either directly or indirectly through capital
markets. Due to their importance in the financial stability of a country, banks are
highly regulated in most countries. Most nations have institutionalized a system
known as fractional reserve banking under which banks hold liquid assets equal to
only a portion of their current liabilities. In addition to other regulations intended to
ensure liquidity, banks are generally subject to minimum capital requirements based
on an international set of capital standards, known as the Basel Accords.
Banking history of Bangladesh:
The formally known ‘State Bank of Pakistan’ was renamed as ‘Bangladesh Bank’
right after Bangladesh’s independence. The Bangladesh Bank automatically became
official foreign exchange reserve institute. It was too accountable for currency
control, monitoring exchange and credit control. In the early 1970s, the government
decided to permit foreign banks to continue their business and nationalize the local
banks.
In that very decade of 1970s, the primary concern of the government was to develop
the country’s agricultural industry. This resulted in the Krishi Bank extending loans to
more farmers. In the later decades, however, the county’s focus shifted to
industrialization; resulting in various difficulties in the economic growth process.
Lack of proper private activity guidelines and proper methods on loan giving were
more significant of these problems. It was not until the late 1980s that these
difficulties were being overcome and compensated for the agro sector. However the
financial institutions failed to recover the loans the industrial sector. Interestingly,
Grameen Bank has set an ideal example of how things should be managed during this
devastating time. The bank gave out small amount of loans to the poor population in
order for themselves to be self-employed. The selection process for giving out these
loans was extraordinary. They gave loans mostly to women who were subordinated;

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these women became self-employed and hence paid back when were helped with
guidance to run their business. In the mid ‘1980s, the government adopted new
policies for recovery. It did not work. Government-owned banks continued to fail on
recovering the loans. In the 1990s, many private banks started to emerge. Local group
of companies became aggressive in investment so the money flow was rather big.
Bangladesh Bank played key role in managing these private banks with modern
outlook. As consciences the banking sector grew many folds. Throughout the 2000s,
governments maintained positive economic policies. The economy grew, so did the
Bangladesh's banking sector and business sector. Since 2011 however, many banking
scams took place, mainly at government owned banks. This created a bad vibe which
is still to recover from.
Banks
After the independence, banking industry in Bangladesh started its journey with 6
nationalized commercialized banks, 2 State owned specialized banks and 3 Foreign
Banks. In the 1980's banking industry achieved significant expansion with the
entrance of private banks. Now, banks in Bangladesh are primarily of two types:
Scheduled Banks: The banks which get license to operate under Bank Company Act,
1991 (Amended up to 2013) are termed as Scheduled Banks.
Non-Scheduled Banks: The banks which are established for special and definite
objective and operate under the acts that are enacted for meeting up those objectives,
are termed as Non-Scheduled Banks. These banks cannot perform all functions of
scheduled banks.
There are 57 scheduled banks in Bangladesh who operate under full control and
supervision of Bangladesh Bank which is empowered to do so through Bangladesh
Bank Order, 1972 and Bank Company Act, 1991. Scheduled Banks are classified into
following types:
State Owned Commercial Banks (SOCBs): There are 6 SOCBs which are
fully or majorly owned by the Government of Bangladesh.
1. Sonali Bank Ltd.

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2. Agrani Bank Ltd.
3. Rupali BankLtd.
4. Janata Bank Ltd.
5. Bangladesh Development Bank Limited.
6. Basic Bank Limited.
Specialized Banks (SDBs): 2 specialized banks are now operating which were
established for specific objectives like agricultural or industrial development. These
banks are also fully or majorly owned by the Government of Bangladesh.
1. House Building Financial Corporation (HBFC)
2. Palli Karma Sahayak Foundation (PKSF)
Private Commercial Banks (PCBs): There are 40 private commercial banks
which are majorly owned by the private entities. PCBs can be categorized into two
groups:
Conventional PCBs: 31 conventional PCBs are now operating in the industry. They
perform the banking functions in conventional fashion i.e interest based operations.
1. AB Bank Limited
2. Bangladesh Commerce Bank Limited
3. Bank Asia Limited
4. BRAC Bank Limited
5. City Bank Limited
6. Dhaka Bank Limited
7. Dutch-Bangla Bank Limited
8. Eastern Bank Limited
9. IFIC Bank Limited
10. Jamuna Bank Limited

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11. Meghna Bank Limited
12. Mercantile Bank Limited
13. Midland Bank
14. Modhumoti Bank Limited
15. Mutual Trust Bank Limited
16. National Bank Limited
17. National Credit & Commerce Bank Limited
18. NRB Bank Limited
19. NRB Commercial Bank Limited
20. One Bank Limited
21. Premier Bank Limited
22. Prime Bank Limited
23. Pubali Bank Limited
24. South Bangla Agriculture & Commerce Bank Limited
25. Southeast Bank Limited
26. Standard Bank Limited
27. The Farmers Bank Limited
28. Trust Bank Limited
29. Sonali bank limited
30. Uttara Bank Limited
31. Shimanto Bank Ltd
Islami Shariah based PCBs: There are 8 Islami Shariah based PCBs in
Bangladesh and they execute banking activities according to Islami Shariah based
principles i.e. Profit-Loss Sharing (PLS) mode.
1. Islami Somaz Bank Limited
2. Al-Arafah Islami Bank Limited

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3. EXIM Bank Limited
4. First Security Islami Bank Limited
5. ICB Islamic Bank Limited
6. Islami Bank Bangladesh Limited
7. Shahjalal Islami Bank Limited
8. Social Islami Bank Limited
Foreign Commercial Banks (FCBs):
9 FCBs are operating in Bangladesh as the branches of the banks which are
incorporated in abroad.
1. Bank Al-Falah Limited
2. Citibank N.A
3. Commercial Bank of Ceylon PLC Habib Bank Limited
4. National Bank of Pakistan
5. Standard Chartered Bank
6. State Bank of India
7. Punjab National Bank
8. Woori Bank
9. HSBC
 Non-Scheduled Banks
Non-Scheduled Banks are licensed only for specific functions and objectives, and do
not offer the same range of services as scheduled banks.
1. AnsarVDP Unnayan Bank
2. Karmashangosthan Bank
3. Probashi Kollyan Bank
4. Grameen Bank
5. Jubilee Bank

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6. Palli Sanchay Bank
CHAPTER FOUR
Overview of Sonali Bank Limited

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3.1 Overview of Sonali Bank Limited
A Bank is usually defined as a financial institution which deals with money. Today
however, the functions of a bank have increased so much that it is considered a very
vital agent of development in country like ours. Because of their positive involvement
in trade, industry, business finance and a host of their allied services, today bank are
very important part of an Economy. Sonali Bank is a state-owned commercial bank in
Bangladesh. It is the largest bank of the country with a total of 1204 branches. Out of
them, 563 branches in rural and 647 branch in urban area. Number of computerize
Branches 1199 and ATM 76. A fully state-owned enterprise, the bank has been
discharging its nation-building responsibilities by undertaking government entrusted
different socio-economic schemes as well as money market activities of its own
volition, covering all spheres of the economy. Sonali Bank Limited singularly enjoys
the prestige of being the agent of the Central Bank of Bangladesh in such places
where the guardian of the money market has chosen not to act by itself.
Sonali Bank was established in 1972 under the Bangladesh Banks (Nationalization)
Order, through the amalgamation and nationalization of the branches of National
Bank of Pakistan, Bank of Bhowalpur and Premier Bank branches located in East
Pakistan until the 1971 Bangladesh Liberation War. When it was established, Sonali
Bank had a paid up capital of 30 million taka. In 2014, its authorized and paid up
capital increased to BDT Tk.60000.0 Million and BDT 31,200.0 Million respectively.
The bank has been converted to a Public Limited Company with 100% ownership of
the government and started functioning as Sonali Bank Limited from November 15,
2007 taking over all assets, liabilities and business of Sonali Bank. After
corporatization, the management of the bank has been given required autonomy to
make the bank competitive & to run its business effectively.
Sonali Bank Limited is governed by a Board of Directors consisting of 11 (Eleven)
members. The Bank is headed by the Managing Director & CEO, who is a well-
known Banker and a reputed professional. The corporate head quarter of the bank is
located at Motijheel, Dhaka, Bangladesh, and the main commercial center of the
capital.

30
3.2 Nationalization of Sonali Bank in Bangladesh:
Immediately after the Government of Bangladesh Consolidated its authority, it
decided to adopt socialist pattern of society as its goal. Hence in order to implement
the above mentioned state policy; the Government of Bangladesh decides to
nationalize all the banks of the country accordingly on the 26th March, 1972,
Bangladesh Banks ( Nationalization) Order , 1972 (President Order No.26 of
1972)was Promulgated.
Existing Bank New Bank
1.National Bank of Pakistan
2.Bank Bahwalpur Ltd
3.Premer Bank Ltd
Sonali Bank Ltd.
3.3 Corporate profile of Sonali Bank limited:
Name of the Company Sonali Bank Limited
Chairman Mr. Md. Ashraful Moqbul
Managing Director and CEO Mr.Md.obayedullah Al Masud
Company Secretary Mr. A..K.M.Sajedur Rahman khan
Legal Status Public Limited Company
Genesis Emarged as Nationalised Commercial Bank
in 1972, following the Bangladesh Bank
(Nationalization) Order No. 1972(PO No.26
of 1972)
Date of Incorporation 03 June, 2007
Date of Vendor’s Agreement 15 November, 2007
Registered Office 35-42, 44 Motijheel Commercial Area,
Dhaka, Bangladesh
Authorized Capital Taka 10.00 billion
Paid-up Capital Taka 9.00 billion

31
Number of Employee 26,085
Number of Branches 1191
Dialogue Your Trusted Partner in Innovative
Banking.
Phone-PABX 9550426-31, 33, 34, 9552924
FAX 88-02-9561410, 9552007
SWIFT BSONBDDH
Web-site www.sonalibank.com.bd
E-mail sbhoid@bdmail.net
sbhoitd@btcl.net.bd
Logo

32
3.4 Organization Structure of Sonali Bank:
3.5 Board of Directors
Mr. Md. Ashraful Moqbul
Director and Chairman
Former Senior Secretary
Bangladesh National Parliament Secretariat
Govt. of the People's Republic of Bangladesh
Mr. Md. Fazlul Haque
Director

33
Additional Secretary
Bank & Financial Institutions Division, Ministry of Finance
Mr. Md. Mahboob Hossain
Director
Former Joint Secretary
Mr. Md. Shaheb Ali Mridha
Director
Mr. Kazi Tariqul Islam
Director
Mrs. Sabera Aktari Jamal
Director
Former Deputy Managing Director, Uttara Bank Limited
Mr. Afzal Hossain
Director
Freedom Fighter,
Former Director, BDBL(BSRS)
and Scout Leader
Mr. Muhammed Asadullah
Director
Retired UN Executive
Mr. A.K.M Kamrul Islam, FCA, FCS
Director
Dr. Md. Nurul AlamTalukder
Director

34
Ex-Managing Director
Bangladesh House Building Finance Corporation
Mr. Md. Obayed Ullah Al Masud
CEO & Managing Director
Sonali Bank Limited
3.6 VISION OF SBL
Socially committed leading banking institution with global presence.
In our journey towards continuous excellence we are striving to become county’s
leading commercial bank offering one-step service of a wide range of value added
products and services meeting the need of our customer; conducting our business
ethically in accordance with the laws of banking while optimizing the best utilization
of the most modern state-of-the-art technological solution through creation of a
proactive organizational culture based on sound team sprite, fairness, mutual
understanding and pragmatic leadership always remaining open to new ideas and
adaptable to the best practice in the market insuring recognition and quality banking
experience to our customers and deliver best value to all ore stake holders as well.
3.7 MISSION OF SBL
Dedicated to extend a whole range of quality products that support divergent needs of
people aiming at enriching their lives, creating value for the stakeholders and
contributing towards socio-economic development of the country.
Apart from there are some missions of SBL as follows:
 Transformation into a service-oriented technology-driven profit earning bank.
 Ensure fast, accurate and best-in-class customer service.
 Balanced and suitable growth strategy.
 Introducing innovative banking products.
 Attract and retain high quality human resource.
 Empowering real poor families and create local income opportunities.
 Providing support for social benefit organizations-by way of mobilizing funds
and social services.

35
3.8 SLOGAN OF SBL
“Your trusted partner in innovating banking.
3.9 Objectives of Sonali Bank Ltd.
The main objectives of the bank are to provide all types of banking services to the
door steps of people. The bank participates in various socio-economic development
activities and also takes part in implementation of various polities and program made
by government. As the largest state oriented and professional managed leading
bank of the country.
1. To earn profit.
2. To alleviate poverty.
3. To create Employment.
4. To ensure Regional Development.
5. To maintain Security of money
3.10 Functions of Sonali Bank Ltd.
Main functions of Sonali Bank are:-
1) Receiving of money on deposits.
2) Conducting cash transaction of customers who have current account.
3) Attending bills of exchange and draft of customers.
4) Section of loan.
5) Provide other services to the customer’s;
6) Transfer of money
7) Collection of receipts.
8) 8. Collecting interest, dividends, rents, pension etc.
9) Acts as an advisor
 Core Values
Sonali Bank Limited (SBL)’s Core Value proposition consists of ten key elements.

36
Ethics: Everyone must ensure adherence to ethical practices of Banking.
Objectivity: All person will have definite objective in carrying out their tasks.
Integrity: Protection and safeguard of customers’ interest is a vital element for
societal trust.
Excellence: Excellent performance and effectiveness are preconditions to ensure
quality service to the large customer base of the bank.
Innovation: New and innovative products are the needs of the time for which
continuous action oriented researches are carried out.
Commitment: Every employee is committed to work up to the expected level to
ensure satisfaction of valued customers.
Self-Reliance: Each employee will have ownership attitude towards the bank and self
confidence in his work for betterment of the bank.
Transparency: Information is to be kept open for all so that stakeholders can have
proper ideas about the bank’s activities.
Accountability: All employees are responsible for their activities and will remain
accountable to their respective superior for accomplishment of task.

37
Chapter Five
A special study on
Sonali bank Ltd, Mithapukur Branch,
Rangpur.

38
4.1. Introduction:
There are many commercial banks in Bangladesh. Sonali Bank Ltd. Is one of them,
now it is one of the largest commercial govt. bank in Bangladesh .It has 1204
branches all over the country and Mithapukur branch is one of them. As it is situated
at the nearest point of the Rangpur town, its function is very much large in nature.
4.2 Sonali Bank Ltd., Mithapukur Branch at a glance:
Bank Name Sonali Bank Limited
Branch Name Mithapukur Branch
Address Mithapukur, Rangpur
Telephone 05225 87025
Branch Code 109
SWIFT Code BSONBDDH
Routing Number 200851091
District Rangpur
Service Hours Sunday: 10:00 am - 4:00 pm
Monday: 10:00 am - 4:00 pm
Tuesday: 10:00 am - 4:00 pm
Wednesday: 10:00 am - 4:00 pm
Thursday: 10:00 am - 4:00 pm
Friday: Closed
Saturday: Closed

39
4.3. Objectives of this Branch:
Since this branch situated at the Nearest in Rangpur town, so its objective is to
actively participate in the economic development of this area by giving loan in the
different sectors and collect deposit from the people. By collecting deposit, the bank
gives loans to its clients. The objectives of this branch is not different from the
objectives of Sonali Bank ltd. With low interest rate, so that small traders can take
loan from this bank and invest to their trade. So main objective of this branch is
participating in the economic trade commerce and socio economic development of
this area.
4.4. Some Features of Sonali Bank Limited, MB
Sonali Bank Limited, Mithapukur Branch, Rangpur is engaged in conventional
commercial banking. It is the pioneer in introducing and launching different customer
friendly Deposit Schemes to tap savings of the people for channeling the same to the
productive sectors of the economy for uplifting the standard of living of the limited
income group of the population, the Bank has introduced Consumer Credit Scheme by
providing financial assistance in the form of loan to the consumers for procuring
household durable, which already have encouraging responses. The Bank is
committed to continuous research and development so as to keep pace with modern
banking. The operations of the Bank are computerized to ensure prompt and efficient
services to the customers.

40
4.5. Hierarchy of Sonali Bank Limited, MB
Hierarchy position of this Branch is given below:
Manager
Senior officer
Officer
Officer Cash
Junior officer
Fig 03: Branch Hierarchy Position of Mithapukur Branch, Rangpur

41
4.6. Employee chart of Mithapukur Branch:
Sl No. Designation of the employee No. employee
1 Principal Officers 4
2 Senior officer 3
3 Officer 2
4 Security guard (Ansar) 4
5 PTS 6
4.7. Major Activities of the Branch
 All functions of General Banking Division
 Credit proposal receiving and granting
 Provide bank guarantee and solvency certificate
 Provide Locker services
 SME and School Banking services
 Internet Banking services
 Virtual Card services
4.8. Deposit Products:
 Savings Bank (SB) Account
 Current (CD) Account
 Fixed Deposit Receipt (FDR)
 Short Notice Deposit (SND)
 Double Benefit Scheme (DBS)
 Monthly Savings Scheme (MSS)
 Pension Savings Scheme (PSS)
4.9. Loans& Advances:

42
SBL provides the following loans and advances to the clients:
 Working Capital Finance
 Overdraft (OD)
 Project Finance
 Syndicated Loan
 Packing Credit
 Loan Against Export Bill
 Loan Against Trust Receipt
Sonali Bank Ltd. provides those loans and advances which contains easy features and
smooth repayable system for the client in different terms. The recovery rate of those
loans is very satisfactory of SBL.
4.10. Corporate Social Responsibility (CSR):
Sonali Bank operates under a double bottom line agenda where Bank's sustained
growth objectives and social responsibility go hand in hand as it strives towards a
poverty free, prosperous Bangladesh. The Bank considers CSR activities not as a
voluntary service but incorporates this with core Banking operation as long term
sustainable ongoing process with a view to increase Bank's brand image.
In other words, the Bank strives to establish corporate social responsibility as a key
strategy or corporate excellence in banking to maximize stakeholders benefit.
Whether it is a donation to a hospital, providing fund for sporting events or a
contribution during natural calamities, SBL and its CSR activities reach the elements
of the society for helping the people.
The Bank with a view to institutionalize corporate social responsibility, established
Sonali Bank Foundation in 1972 to participate in social work. However, up to the year
2008 CSR activities of Sonali Bank Limited had been confined in the form of grants
and donations. In 2009, the Board of Directors has identified education sector as the
area of activities for sustainable development of human resources. To begin with the
secondary education sector has been selected as the area of concentration. So far the
foundation has awarded scholarships to a number of 828 students through its long
term and renewable scholarship program.

43
Chapter Six
Overview of General Banking Activities of
Sonali Bank Ltd., Mithapukur Branch,
Rangpur

44
5.1 General Banking:
Day to day transaction of banking system is the main operation and is generally
executed by general banking sector. It has to meet the customers demand for cash and
to receive investment from them. It has various operations and that includes opening
new accounts, forwards customer’s money from one place to another through issuing
bank draft, pay order, endorsement, inward and outward cheque clearing. It is also
known as Retail Banking. In SBL, Mithapukur Branch, departments under general
banking section are:
 Accounts Opening Section
 Deposit Section
 Cash Section
 Bills and Clearing Section
 Loan and Advance Section
 Accounts Section
5.2 Account Opening:
Account Opening is the gateway for clients to enter into transaction with the bank. It
is the foundation of banker-customer relationship. A customer can open different
types of accounts through this department. Such as-
 Current account.
 Savings account.
 Short Term Deposit Account (STD).
 Fixed Deposit Receipts (FDR).
 Special Deposit Pension Scheme (SDPS).
 Sonali Deposit Scheme (SDS).
 Education Deposit Scheme (EDS).
 Medical Deposit Scheme (MDS).
The rules related to open Account

45
An application is to be submitted in the prescribed form of the bank to open a bank
account. The form of opening an account includes the following
1. Account opening form: This form requires personal information about the
account holder. It is the white color.
2. Application form: This form requires information about the introducer of
account holder. It is of blue color.
3. Transaction Profile: This form requires information about the probable limit
of transaction i.e. the limit of deposit. The limit of drawing, sources of the
money etc. It is of white color.
4. KYC Profile form: This form requires details information about the account
holder. It facilitates CAMEL rating.
To open an account, an individual has to carry out the
following formalities:
 Obtain a prescribed application form from the bank
 Submit the duly completed form with necessary papers to the
concerned officer.
 Face a brief interview
 Put specimen signature in the signature card supplied by the bank.
 Deposit of money
 Get counter folio of the payment slip.
 The account procedure is completed.
Once these formalities are carried out in appropriate manner, an account number is
posted against the application. Then a check book is issued in favor of the applicant
and he is considered as a valid account holder of the bank.
Total Customers over the three years of this branch:
Year 2015 2016 2017
Total Customers 23,637 25,867 26,345

46
Interpretation:
5.3 Types of Account:
Sonali Bank has several types of deposits for its customers.
 Savings Bank Account:
This is an interest bearing account and only individual person can open this type of
accounts providing necessary documents.
 Fixed Deposit Account:
There are deposits which are made with the bank for a fixed period of specified in
advance. The bank does not maintain cash reserves against this cash deposit. And
therefore, the bank offers higher interest rate on such deposits. These deposits
generally constitute 50% or more of the total deposits. Usually, customers are allowed
to open this account for a certain period of time and the rate of interest varies in
accordance with the terms of the specified time. If any holder wishes to draw money
before expire of time, he/ she is not given the entitled interest rate.
This account is opened for a fixed period of time this type of account is very popular
to the fixed income earners. Sonali Bank, Rangpur Mithapukur Branch, maintains
different terms of this deposit and interest rate varies with the variation of term. The
minimum term is 3 months. The branch maintains fixed deposit account for maximum
term of 3 years. A fixed deposit account holder has to deposit his money with the
bank at a time and the amount of deposit is drawn at the maturity of the account. But
2015
2016
2017
Total Customers
23,637
25,867
26,345
2015 2016 2017

47
in case of emergency a fixed deposit A/C holder can withdraw his money before
maturity. Interest rate on this account varies according to term of deposit. Sonali
Bank, Mithapukur Branch, Rangpur, pays the following interest rates on Fixed deposit
A/C:
Duration Rate of interest
3 months or more but less than 6 months 7.50 %
6 months or more but less than 1 year 7.75 %
1 Year or more but Maximum 3 year 8.00 %
 Current Deposit (CD) Account:
It is popular known as Current Account. Any individual, company, firm, may open
this type of account in its own name. This is non-interest bearing account which
implies that no interest will be provide in this account.
 Short Term Deposit (STD) Account:
This is opened and operated for short term and for specific purpose. It is also an
interest bearing account but rate of interest is generally below the savings rate.
5.4 Account Growth of SBL, Mithapukur Branch:
Types of A/C 2015 2016 2017
Fixed deposit receipt A/c 220 285 308
Special notice deposit 80 95 110
Current Accounts 794 845 992
Table: Account growth of SBL, Mithapukur Branch

48
Graphical Representation:
Interpretation:
We can see here that three types of account increases over the years. Fixed deposit
account increased fast from 2015 to 2016 but a slow increase in 2017.Special notice
deposit account increases at the same rate over the three years but in current account
the rate of growth is high in 2017.
Savings Account Growth:
Type of A/C 2015 2016 2017
Savings Accounts 19693 20444 21441
Graphical Representation:
0
200
400
600
800
1000
1200
Fixed deposit receipt A/c Special notice deposit Current Accounts
2015 2016 2017

49
Interpretation:
The growth of saving account in this branch is somewhat consistent over the
subsequent years.
5.5 Double Benefit Scheme (DBS):
Double Benefit Scheme (DBS) Account is a time specified deposit scheme for clients
where the deposited money will be doubled on maturity. It's a great option to double
your unused money after a specific time. Amount to be deposited TK.10000 or its
multiple; Deposited amount will be doubled in 6 years; DBS accounts can be opened
both for Individual and Corporate bodies.
5.6 Monthly Savings Scheme (MSS):
Dreams may turn into reality through Southeast bank's Monthly-Savings Scheme
(MSS). It's a hassle Free Deposit. Loan of Maximum 80% against the lien of the MSS
amount deposited can be availed. It can close the account before maturity.
18500
19000
19500
20000
20500
21000
21500
22000
Savings Accounts
2015 2016 2017

50
5.7 Pension Savings Scheme (PSS):
It offers clients to save their hard earned money every month for a secured future.
Loan of Maximum 80% against the lien of the PSS amount deposited can be availed.
Client has to pay the Installment amount by 15th day of a Month. Advance
Installment can be provided. Installment amount can be given from any branch of our
Bank.
5.8 Millionaire Deposit Scheme (MDS):
Millionaire Deposit Scheme (MDS) Account is a time specified monthly deposit
scheme for clients where the deposited money will become millions on maturity. With
this great offer, you can become a millionaire after a specified term. Tenor is
4,5,6,7,8,9 and 10 years term; Credit facility for maximum of 2 years can be availed at
any time during the period of the scheme. MDS Account can be opened both for
Individual and Corporate bodies.
5.9 Deposit growth of SBL, Mithapukur Branch, Rangpur:
Total deposit: The total deposit of this branch is below:-
Year 2015 2016 2017
Total deposit(in
million)
493.697129 534.512343 593.343325
Figure: Total deposit

51
Graphical presentation:
Interpretation: We can see that in 2016 the total deposit growth was 8.30 % from
2015 but in 2017 an excellent growth can be found in this branch that is 11.05%.
Fixed deposit:
Year 2015 2016 2017
Fixed deposit(in million) 33.20834 27.69423 30.21080
Table:
Graphical representation:
0
100
200
300
400
500
600
700
Total deposit
2015 2016 2017
2015, 33.20834
2016, 27.69423
2017, 30.2108
2015 2016 2017
Fixed deposit
2015 2016 2017

52
Special notice deposit:
Year 2015 2016 2017
Special notice deposit
(in million)
23.86565 31.98456 35.04804
0
10
20
30
40
Special notice deposit
Chart Title
2015 2016 2017

53
Savings Account:
Year 2015 2016 2017
Savings account(in million) 234.56 270.98 330.50
Double Benefit Scheme (DBS):
Year 2015 2016 2017
Double Benefit Scheme(in million) 23.01 21.08 26.84
0
50
100
150
200
250
300
350
2015 2016 2017
Savings account

54
 Collection of Cheques and Bills:
For collection of cheques and bills the bank follows two systems:
5.3. CASH SECTION
Bank as a financial institution, accept surplus money from the people as deposit and
give them opportunity to withdrawn the same by cheque or by any other instrument.
Among the banking activities, cash department plays a vital role. It does the main
function of a commercial bank. Receiving the deposit and paying the cash on demand.
5.3.1 Cash Receiving Procedures:
The work of cash receiving counter is to examine the deposit slip. Depositor uses the
prescribed deposit slip supplying by the bank for depositing cash, cheque, draft; pay
order etc. in all types of deposit the teller must cheque the following things:
 The slip has been properly filled up. The title of the account and its number.
 The amount in figure and in words is same.
 Data of the instrument.
0 5 10 15 20 25 30
Double Benefit Scheme(in million)
2017 2016 2015

55
After checking all these things the teller will accept cash, cheque, draft, pay order etc.
against deposit slip. The teller will place the cash in cash drawer according to
denominations. The teller will place signature and affix “cash received” and record in
the cash received register book against the account number. At the end of this
procedure, the cash officer passes the deposit slip.
4.3.2 Cash Payment Procedures:
In order to safeguard the position the banker has to observe the following precaution
before honoring a cheque:
 A cheque must be locked whether it is an incomplete cheque.
 The playing officer should see whether the cheque is drawn on his/her branch.
 He must see whether the cheque is postdated or pre dated. A teller must not
pay any post-dated cheque.
 The officer must carefully see the apparent tenor of the cheque. If it is
mutilated or martially altered then the officer must not honor it.
 The officer must compare the signature of the cheque with the signature on the
specimen card
 The officer must verify the regularity of the endorsement.
 The officer may allow overdue against a cheque if prior arrangement is done
with the bank. p to the computer section for posting purpose and returns the
customer’s copy.
5.4 LOAN AND ADVANCE SECTION
For any commercial bank deposit and loan are two important sections. To service in
the market banks have deal with the deposited money. They have to use the deposit
efficiently in profitable sector. So dealing with the loan is very crucial for the bank.
5.4.1 General Advance:

56
This is the survival unit of the bank because until and unless the success of this
section the survival is a question to every bank. This is important because this is the
earning unit of the bank. Bank credit is an important catalyst for bringing about
economic development in a country. If this section is not properly works the bank
may become bankrupt. No growth of maintenance of a stable economy is possible
without adequate financial supporting banks are accepting deposits from the
depositors in condition of providing interest to them as well as safe keeping their
interest. Now the question may gradually arise how the bank will provide interest to
the clients and the simple answer is – advance. Why the bank does provides advances
to the borrowers-
1. To earn interest from the borrowers and give the deposits interest back.
2. To accelerate economic development by providing different industrial as well as
agricultural advances.
3. To create employment by providing industrial loans.
4. To pay the employees as well as meeting the interest groups.
5.4.2 Loan Proposal and Sanction Process:
The total process of proposal and sanction is a continuous process. In a particular
stage the describe loan is sanctioned or rejected by the authority. The total process
consist maximum of 6 steps:
Step 1- the client apply for a certain amount of loan in a prescribed form which is
available in the branch office. He has to mention the amount; the purpose, the
mortgage property that he can assure and the time when he wish to enjoy the amount.
Step 2- The branch manager and the cashier then take the responsibility to visit and
evaluate the concern. They have to prepare a credit report mentioning the present
condition, assets and liabilities ratio, and reputation along with the origin of the
concern. He should be some recommendation about the dependency of the firm.
Step 3- Then the credit report is forwarded to the original office for approval. In the
regional office two dealing officer under the direct supervision of AGM made some

57
other recommendations by considering the credit report and direct investigation. Then
they will justify the net worth of the concern and its economic position.
Here if the amount is with the ability of the regional head (AGM) he can sanction the
loan. Otherwise the proposal file will be forwarded to the principal office. If the
dealing officers found something dissatisfied they can reject the proposal.
Step 4- The head of the corporate branch (DGM) can sanction a certain level of
amount greater than the regional office. Here the file is strictly observed by the
dealing officers under the direct supervision of DGM. He may sanction the mentioned
amount or reject for the logical cause or send to the GM office or Head office for the
further consideration.
Step 5- After reviewing every aspect of the loan proposal the GM can approve the
proposal up to certain level. He may reject or send the file to the managing director
for the director’s approval. Here it may be sanctioned or rejected.
Step 6- after the approval of the proposal in any of the stage region to the board of
directors. Bank send the proposal file along with the necessary papers of the mortgage
and to verify the validity of the ownership of the property for a little dissatisfaction of
the solicitor the proposal may be rejected. Otherwise he will request the bank to
disburse the amount.
5.4.3 Lending Principles:
In order to secure a balance between liquidity, profitability and security, sonali bank
follows the following principles of sound lending-
Liquidity: Liquidity means enchasing ability of security i.e. securities that are more
easily cashable are more liquid. So while lending money to any project or industry,
adequate care has to be taken so that the liquidity is not compromised. That’s why
Sonali bank chooses such securities which possess sufficient liquidity.
Safety: While lending depositor’s money, there should be guarantee of returning the
funds. Sonali Bank exercises the lending function only when it is safe and that the risk
factor is adequately mitigated and covered. Safety depends upon.
 Diversity:

58
There is a proverb “Don’t put all the eggs in a basket”. Keeping the proverb in mind,
Sonali bank invests its funds in different types of securities of different industries
situated in different regions of the country.
 Yield:
In order to survive and development, each bank has to make profit. From the
commercial point of view, Sonali bank considers sufficient yield or return while
financing a project.
5.5 Other Services
Some Popular Loan Product Offered By SBL:
SBL provide different type of loan facility for its clients on the basis of the client’s
demand. Mostly used loans and advance by the customers are as follow:
 Import Loan Pledge
 Staff House Building Loan
 General Housing
 Loan Against Foreign Bill Purchased
 Loan Against Trust Receipt (LTR)
 Exporters Development Fund & Packing Credit
 Education Loan
 Working Capital Loan
 Any Purpose Loan
 Marriage Loan

59
Money laundering measure:
Money laundering:
Money laundering is concealing the transformation of profits from illegal activities
and corruption into ostensibly "legitimate" assets. The dilemma of illicit activities is
accounting for the origin of the proceeds of such activities without raising the
suspicion of law enforcement agencies. Accordingly, considerable time and effort is
put into devising strategies which enable the safe use of those proceeds without
raising unwanted suspicion. Implementing such strategies is generally called money
laundering. After money has been suitably laundered or “cleaned”, it can be used in
the mainstream economy for accumulation of wealth, such as acquisitions of
properties, or otherwise spent. Law enforcement agencies of many jurisdictions have
set up sophisticated systems in an effort to detect suspicious transactions or activities,
and many have set up international cooperative arrangements to assist each other in
these endeavors.
Why do people launder money?
Criminals commit three basic types of crime - crimes of passion or honour, crimes of
violence or vandalism and economic crimes. Ignoring minor vandalism, most crime is
economic crime - that is crime that is committed to make money. They commit crime
for two reasons - one is for kicks - to prove they can do it and get away with it; the
other is because they think they can make more money from the crime than they
can make from the same amount of legitimate endeavour.
When they make money from crime, criminals use it for one of three purposes - to
invest in another crime, to hide to use later or to spend now.
One of the most tried, tested and successful methods of investigating crime is to
follow the money. So criminals want to move the money further and faster than
investigators can follow it - and from time to time they want to put it into a black
hole so that investigators simply cannot follow it.
Sometimes, investigators who think that someone may have been involved in a
crime may start with that person's known finances and work backwards. This is now
causing changes in laws which presume that a criminal who has been convicted of
past offences can be subject to confiscation orders unless he can prove the
provenance (origin) of his wealth to be legitimate.
So, the criminal needs to get the money out of the black hole in such a way that he
can explain where he got it from.

60
One way in which suspicion is raised is by someone spending more money than their
known income would support. So, that hairdresser who never has any customers but
drives a new convertible would raise suspicions.
Tax evaders launder money so that they can lie about where money and assets came
from in order to evade tax. Or they hide money in bank accounts that they think the
revenue authorities find out about - sometimes in the names of children or elderly
relatives. Or they simply operate outside that part of the economy where records
are kept.
Measures against money laundering:
The Banks’ take a risk-based approach. In many cases, it is up to the institutions
themselves to assess the risk of a client laundering money or financing terrorists. They
must implement measures accordingly. Those measures may vary from a simple client
screening to not entering into or discontinuing a business relationship.
Screening of clients
Institutions must screen their clients to know who they are doing business with. This
enables the institutions to recognize and manage the risks of certain clients.
Reporting unusual transactions
If an unusual transaction takes place, institutions must report it to the Financial
Intelligence Unit (FIU). The institutions must ensure that their staff are familiar with
the latest developments in money laundering and terrorist financing trends, techniques
and methods. They must be able to recognize unusual transactions and transaction
patterns, in order to comply with the Banks’.
Commercial Bank training obligation
The Commercial banks’ require institutions to train their staff. The frequency and
scope of that training depend on the risk involved and therefore on whether an
institution deals with clients or transactions that carry a high risk of money laundering
or terrorist financing.

61
Chapter six
Performance Analysis Though Ratio & SWOT
Analysis

62
4.1.2 Total Deposit Status of SEBL, Rangpur Branch: Deposits are the main sources of cash
inflow of the Bank and for the Branch as well. The amount of total deposit of Rangpur
branch and growth are given below according to the Branch’s Statement of Affaires. Table
4.1.2: Total Deposit. Year Total Deposit Growth 2014 628,213,687. ------- 2015 681,380,092.
8.46% 2016 977,694,659. 43.49% Source: Statement of affaires of SEBL, Rangpur Branch.
Table 4.1.2 presents the trends of total deposit over the three year. The shows the total
deposit is tk. 628,213,687 in year 2014; tk. 681,380,092 in the year 2015; and tk.
977,694,659 in the year 2016. It has been observed that the growth in 2015 over 2014 was
8.46% where in 2016 was 43.49%. People deposit only that time when they have some
excess money. In 2015 we see that the growth is lower than the 2016 just because of the
previous year political unrest, for which people‘s business condition were not good as well
as their deposit.

63
Performance Analysis of SBL Though Ratio:
6.1 CURRENT RATIO
This ratio is calculated by dividing the total current assets of an institution by its total current
liabilities. It shows how any institution like SBL meets its current liabilities through its
current assets.
Current Ratio = Current Assets / Current Liabilities
2016 2015
Total current asset 978732840900 860661989264
Current liabilities 1032363213915 866819309134
Result .95 .9928
Here the current ratio is very low. the bank has over current liabilities than its current asset,
and it has risker position to pay its current debt .
6.2 LEVERAGE RATIOS
Leverage ratios are used to calculate the financial leverage of an organization. It helps to get a
specific idea of the institution's methods of financing. There are several types of ratios which
main factors are debt, equity, assets and interest expenses.
6.3 LONG-TERM DEBT TO EQUITY RATIO
Long term debt to equity ratio is one of the financial leverage ratios which are used in
banking sectors to know the link between the long term debt and equity. The ratio is
calculated by taking the institution's long-term debt and dividing it by the total value of its
equity.
Long-term Debt to Equity Ratio = Long-term Debt / Total Equity
2016 2015
Long term debt 102080884792 101894186173
Total equity 67119211636 71515752941
Result 1.52 1.43
Here the result is not satisfactory,becauseit has higher long term debt than its total equity.

64
6.4 TOTAL DEBT TO EQUITY RATIO
It is one of the banking financial leverage which is calculated by dividing its total liabilities
by stockholders' equity. It mainly indicates the proportion of equity and debt that a bank is
using to finance its assets.
Total Debt to Equity Ratio = Total Debt / Total Equity
Particulars 2016 2015
Total debt 1134444098707 968713495307
Total equity 67119211636 71515752941
Result 16.9 13.54
Here the total debt is 16 times more than its total equity and its 2016 ratio is 3.4% higher then
2015
6.5 TOTAL DEBT TO TOTAL ASSET RATIO
Total debt to total asset ratio measures a bank’s financial risk. It determines how much of the
bank’s assets have been financed by the debt. It is calculated by total debt dividing by the
institution's total assets.
Total Debt to Total Asset Ratio = Total Debt / Total Asset
Particulars 2016 2015
Total debt 1134444098707 968713495307
Total asset 1201563310343 104022924824
Result .94 .90
This ratio is satisfactory .the result 2016 is .94 and 2015 is .90
6.6 LOAN TO ASSET RATIO
It is calculated by dividing the amount of loans by the amount of total assets at a bank.
Loan to Asset Ratio = Total Loans/Total Asset
2016 2015
Total loan 386,652,700,217 348,444,032,978
Total asset 1201563310343 1040229248249
Result .321 .334

65
The higher the ratio the more risk to the bank, so here the position of bank is very
satisfactory.
6.7 SWOT ANALYSIS –Sonali bank view
During my internship period in sonali bank I have found some aspects relating to the bank’s
strength, opportunity, weakness and threats, which are more or less. I think affecting the
bank’s performance in total which are given below:
STRENGTHS:
 As a largest bank, it has qualified, professional and experienced manpower.
Structural set-up & business location is strategic.
 Sonali bank assets position is quite satisfactory & now there is no fund crisis.
 Sonali bank has requisite strength and opportunity to sustain the challenge of
the market economy.
 Being a nationalized banking organization, it always get government support
in all of.
 Its operations and new projects if is viable.
Weakness:
 In Sonali Bank, arises problem of manpower because of there is no new.
 Recruitment for a long period.
 Bureaucracy official process hampered the daily internal workflow. Management –
employee relation is not good in some case.
 Rules and regulations of govt. sometimes make problem for the bank
OPPORTUNITIES:
 Expansion of new area of investment.
 Scope of automation will open a big door of opportunity.
 All out efforts for deposit mobilization.
 In case of fund crisis sonali bank gets govt. support as it is a govt. owed concern.
 Gear-up recovery through setting up of pragmatic recovery targets.
 Undertake need-based training program &full computerization of bank’s activities.

66
Threats:
 Newly developed privatized & foreign banks.
 Facing a great competition with other commercial banks and financial institutions.
 Loan recovery systems are very weak & policies are not practices in some cases.
 Induction of certain harder banking rules and regulations.

67
Chapter Seven
Conclusion and Recommendation

68
7.1 CONCLUSION:
Sonali Bank is the largest bank as well as the largest employer in both the public and
private sectors in Bangladesh. The bank is playing an important role in the
socioeconomic development through the development of industrial sectors by
providing all the conventional banking services as well as some specialized financing
activities to the economy. So in conclusion it can be said that every organization has
its positive as well as negative consequences and in case of sonali bank existence of
the later one is less than the earlier one and as the management is determined to reach
the pick of success it seems that in near future the negative will be eliminated.
During the course of my practical orientation I have tried to learn the practical
banking activities to realize it with my theoretical knowledge, which I have
greathearted and going to acquire from various course of my BBA program.
7.2RECOMMENDATIONS:
 SBL should provide more computers for each branch.
 SBL also take proper step to improve their online banking services and
provide best services to customer.
 SBL Credit Policy mainly focuses on Macro Economic Development which is
blessing for middle and large scale business house and industry. They should
provide more loans to small and lower scale business with easy conditions.
 SBL Should use Data Base Networking in Information Technology (IT)
Department.
 In foreign exchange department it is required to communicate with foreign
banks frequently and quickly. To make the process easy modem
communication media for example e-mail, Fax and win fax, Internet etc.
Should be used.
 Only SWOT analysis cannot be a helpful technique for evaluating credit
proposal. SBL should aware of performance, financial stability, Competitive
advantage etc. of applicant borrower.
 SBL not providing the credit cards in market which now a day’s one of the
most important part of banking. So they are losing too many customers. They
should provide Credit Card to Customers.

69
Reference
1.Kotler P (1984). Marketing Management: Analysis, Planning and Control. Prentice-
Hall, Englewood Cliffs, NJ
2.Annual Reports of Sonali bank.
3.Aries Susanto and HangjungZo, “Factors Influencing Users’ Acceptance in Internet
Banking Success:Proposinga Unified Model” - 2011 2nd International Conference on
Networking and Information Technology IPCSIT vol.17 (2011) © (2011) IACSIT
Press, Singapore)
4.Brogowicz A, Delene L &Lyth D (1990). A Synthesised service quality model with
managerial implications. International Journal of Service Industry Management,
1(1), 27-
5.Sureshchandar G, Rajendran C &Anantharaman R (2002). Determinants of
customer perceived service quality: A confirmatory factor analysis approach. Journal
of Service Marketing, 16(1), 9-34. 45.
7. Messai, S., (2013) Micro and Macro Determinants of Non-performing
Loans.International Journal of Economics and Financial Issues, 3(4), 852-860.

General Banking Activities of Sonali Bank Limited.A Study on Mithapukur Branch, Rangpur.

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