General Banking Practice of Uttara Bank Limited

1

American International University-Bangladesh (AIUB)

INTERNSHIP AFFILIATION REPORT

ON

General Banking Practices of Uttara Bank Limited (Darus-

Salam Branch)

An Internship Report Presented to the Faculty of Business Administration in Partial

Fulfillment of the Requirements for the Degree of Bachelor of Business Administration

Supervised By:

Samira Nuzhat

Assistant Professor

Submitted By:

Kabir Md. Faisal

08-11600-2

Major in Marketing

Date of Submission: 30/11/2011

2

INTERNSHIP AFFILIATION REPORT

ON

General Banking Practices of Uttara Bank Limited (Darus-

Salam-Branch)

3

Letter of Transmittal

November 30, 2011

Samira Nuzhat

Assistant Professor

Faculty of Business Administration

American International University-Bangladesh [AIUB]

Subject: Submission of Internship Report.

Dear Madam,

With due respect, I, Kabir Md. Faisal, ID: 08-11600-2, would like to inform you that, it is

a great pleasure for me to submit the report on General Banking Practices of Uttara Bank

Limited, as a requirement for BBA internship program. While conducting the report, I

have gathered lots of knowledge about general banking, problems and prospects of

banking sectors and the other activities of Uttara Bank Limited in Bangladesh.

I enjoyed the internship. I also feel immense interest at the preparation of the report. This

internship gave me an opportunity to concentrate on the subject matter. Therefore, I

firmly believe that, this report will be able to meet your approval. I would genuinely

appreciate to make further corrections where it seems necessary by you. Your kind advice

will encourage me to conduct more works in future.

It will be my pleasure to appear at your call for any further explanation. I am submitting

this report through OPA.

Sincerely yours,

---------------------

Kabir Md. Faisal

ID. 08-11600-2

Major in Marketing

AMERICAN INTERNATIONAL UNIVERSITY- BANGLADESH (AIUB)

4

Letter of Endorsement

The Internship Report entitled General Banking Practices of Uttara Bank Limited

(Darus-Salam Branch) has been submitted to the Office of Placement & Alumni, in

partial fulfillment of the requirements for the degree of Bachelor of Business

Administration, Major in Marketing, Faculty of Business Administration on 30th

November, 2011 by Kabir Md. Faisal, ID # 08-11600-2. The report has been accepted

and may be presented to the Internship Defense Committee for evaluation.

(Any opinions, suggestions made in this report are entirely that of the author of the report.

The University does not condone nor reject any of these opinions or suggestions).

______________________

Samira Nuzhat

(Assistant professor)

Intern Supervisor

5

Acknowledgement

All praises are due to Almighty Allah who enabled me to complete this report. This report

entitled overview of the overall banking system of Uttara Bank Limited.

I would like to express my sincere gratitude and appreciation to my supervisor, Ms.

Samira Nuzhat. It would not have been possible for me to complete this report without his

help, advice and overall supervision. This constant encouragement and supervision

throughout the period of this study have been greatest inducement for me and directly

contributed to the accomplishment of the task. I am also indebted to Mr. Md. Rafiqul

Islam Khan (Assistant General Manager of UBL Darus-Salam-Road, Mirpur-1). I must

express my appreciation to Mr. SM Akhter Hossain, (Second Manager), Uttara Bank

Limited, Darus-Salam-Road Branch. I am also very grateful to Mr. Md. Nur-E-Alam and

Nargis Akhter (Principal Officer), Mr. SM Rezaul Karim (Officer Grade-2), Aklima

Afroz (Assistant Officer), for their supporting role and along with others who has been

supportive through my internship Report.

Equally, I would also like to thank the authority of American International University-

Bangladesh, for their kind co-operation.

6

Executive Summary

There is a great supportive role of banking system in human society. It plays a vital role

for the economic development of a country. The banking system of Bangladesh is

backward, compared to many other nations. The local banks which are rendering services

to mass people of the country are following the traditional system, which are no longer

followed by bank in other development countries. It brings Bangladesh people to the

touch of modern technology.

Uttara Bank Limited is one of the largest and oldest private sector commercial bank in

Bangladesh, with years of experience. Adaptation of modern technology both in terms of

equipment and banking practice ensures efficient service to clients. 211 branches at homo

and 600 affiliates worldwide create efficient networking and reach capability. Uttara

Bank made its journey like a modern private Bank in 15 September 1983 at its registered

office and other branches. The initial Authorized Capital of the Bank was 20 (Twenty)

core Taka. Which paid capital was 10 [ten] core taka.

General banking section is the heart of banking activities because funds are mobilized

cash transactions are made clearing, remittance and accounting activities are done here. It

makes possible financing of different sectors. My comment is to make a good

environment of financial institution like bank where people can use bank as their

consultant and supervisor of financial work and risk management. As the bank is the

controller of business environment and economical condition of a country they should

know the way of proper marketing policy and strategy. They have available products but

this is limited in a Branch. They should start On-line banking system to survive the

competitive position. Their pricing, promotion and distribution strategy of UBL are also

not satisfactory enough. They capture good position in Place Strategy by their 211

branches at homo and 600 affiliates worldwide. The Bank manages its physical evidence

very carefully, as it can have a profound impact on customers impression. They also

design their process in such a way that leads to competitive, dynamic and very effective

service delivery and result in satisfied customers. They maintain a good relationship with

its customers. Maximum numbers of people have Savings Accounts than other accounts

in UBL. Customers have average and moderate satisfaction on the quality and

performance of General Banking service. But customers have maximum reliability on

Uttara Bank Limited.

7

Table of Contents

Chapter Page

Cover Page

Title page

Letter of Transmittal

Letter of Endorsement

Acknowledgement

Executive Summary

Chapter 1 (Introduction)

1. a. Rationale

1.b. Background

1.b.1 Uttara Bank- at Present

1.b.2 Vision

1.b.3 Mission

1.b.4 Goal

1.b.5 Slogan

1.b.6 Organogram (The Higher Authority and Board of Directors)

1.b.7 The Organogram of Uttara Bank Limited of Darus Salam Branch

1.c. Objectives

1

2

2

3

3

4

4

4

5

6

7

Chapter 2 (Activities Undertaken)

2.a. Work-Related

2.a.1 General Banking

2.a.2 Customer Services of Uttara Bank Limited

2.a.3 Account opening section

2.a.3.1 Current Account

2.a.3.2 Savings Bank Account

2.a.3.3 SND (Short Notice Deposit) Account

2.a.3.4 Fixed Deposit Receipt Account/ FDR Account

2.a.3.5 Short term Deposit/ STD Account

2.a.4 Remittance

2.a.4.1 Foreign Remittance

2.a.4.2 Local Remittance

8

9

9

10

10

11

11

12

12

13

15

15

16

8

2.a.4.2.1 Payment Order (P.O)

2.a.4.2.2 Demand Draft (D.D)

2.a.4.2.3 Telegraphic Transfer (TT)

2.a.5 Collection Process

2.a.5.1 Outward Bills for Collection (OBC)

2.a.5.2 Inward bills for collection (IBC)

2.a.6 Account Department

2.a.6.1 Clearing

2.a.6.2 Transfer

2.a.6.3 Cash

2.b. Organization-wide

2.c. Other relevant activities

16

18

18

19

20

20

20

21

23

23

24

26

Chapter 3 (Constraints and proposed course of action for improvement)

3.a. Identified/Observed in the Organization

3.b. Academic Preparation

27

28

30

Chapter 4 (Lessons learned from the internship program)

4.a. Implications to Organization/Company Based Affiliation

4.b. Implications to Universitys Internship Program

4.c. Other

31

32

32

32

Chapter 5 (Concluding Statements)

5.a. Recapitulation / Summary

5.b. Recommendations for Future Strategic Actions

33

34

34

Chapter 6 (References)

6.1 Bibliography

66..22 AAbbreviation

35

36

37

9

Chapter- 1

Introduction

a. Rationale

b. Background

c. Objectives

10

1. a. Rationale

The Rationale of the study is to analyze the general banking practice of Uttara Bank Ltd.

Any academic course of study has a great value when it has practical application in real

life. Only a lot of theoretical knowledge is less important unless it has practical

attachment. The internship program is a partial requirement to take test of real life

challenge conducted by the intern. It is important part of BBA program. After completion

of the program period a student must present a report on the assigned topic to the

supervisor and the department. This program is three months duration and the report to be

prepared on the basis of practical working experience after working at least three months

at Uttara Bank Limited with the employees of this organization to complete the program.

In consulting with the supervisor of the program the selected topic is General Banking

Practice of Uttara Bank Ltd.

1.b. Background

Uttara Bank formed in 1972 as a scheduled bank with assets and liabilities of the Eastern

Banking Corporation set up in East Pakistan on 28 January 1965. It started banking

business 22 June 1965 and became a member of the Dhaka Clearing House on 17

September 1965. At the time of establishment, Eastern Banking Corporation had a paid

up capital of Tk 1.42 million and deposit resources of about Tk 10 million. It was the only

scheduled bank formed with capital raised entirely from the small income group of people

of East Pakistan.

Eastern Banking Corporation was nationalized under the Bangladesh Banks

Nationalization Order 1972 and its name was changed to Uttara Bank. At that time, the

bank had 162 branches. The government retracted 95% of its share capital and allowed it

to operate as a private bank. It was transformed into a limited company on 15 September

1983 then it made its journey like a modern private Bank at its registered office and other

branches. The initial Authorized Capital of the Bank was 20 (Twenty) core Taka. Which

paid capital was 10 [ten] core taka. Government hold 6% share and rest 94% shares are

distribute in privet sector. Uttara Banks head office is situated in Motijheel c/a. Dhaka-

1000. A new opportunity in this field of financial activities was opened for the business.

UBL made a careful journey and maintained its successive growth for few years with its

11

qualified professional management under most unpredictable, unregulated, uncertainties

and limitations. The bank is listed with both Dhaka and Chittagong Stock Exchanges.

1. b.1 Uttara Bank- At Present

Uttara Bank is one of the largest and oldest private sector commercial bank in

Bangladesh, with years of experience. Adaptation of modern technology both in terms of

equipment and banking practice ensures efficient service to clients. 211 branches at home

and 600 affiliates worldwide create efficient networking and reach capability. Uttara is a

bank that serves both clients and country.

Like clothes shops, candy shops, bake shops, food shops, Uttara Bank Limited is not a

debt shop the term being used by many to call the present say banks. It is now been

called a modern bank that undertakes all its operation at international standard.

Although Uttara Bank Limited faces some primary difficulties in past, it has now

emerged as a major player in the financial sector. It is listed in both Dhaka and

Chittagong bourses IPO that raised the paid-up capital of the bank to Tk.10 core. In 31

March 2010 reserve fund was Tk 621.4 core.

Banks are the pillars of the financial system. Specially, in Bangladesh, the health of the

banking system is very vital because the capital market is little developed here. As the

banks are still the major sources of credit and exercise great influence on the financial

system, it is extremely important that the countrys banking systems should be in good

health in the interest of investment activities, meeting the needs of all kinds of finance

and related matters.

Over the years, Uttara Bank Limited has built itself as one of the pillars of Bangladeshs

financial sector and is playing a pivotal role in the extending the role of the private sector

of the economy. The bank has a strong branch network nation wide with 211 branches.

1.b.2 Vision

To be in the front of national development by providing all the customers inspirational

strength, dependable support and the most comprehensive range of business solution

through the team of professional that work passionately to be outstanding in everything to

do.

12

1.b.3 Mission

UBL shall be the forefront of national economic development by:

Anticipating business solutions required by all customers everywhere and innovative

supplying them beyond expectation.

Setting industry benchmarks of world class standard delivering customer value

through comprehensive product range, customer service and all activities building an

exciting team-based working environment that will attract develop and retain

employees of exceptional ability who help celebrate the success of business, of our

customer and of national development.

Maintaining the highest ethical standards and a community responsibility worthy of a

leading corporate citizen.

Continuously improving productivity and profitability, and thereby enhancing

shareholder value.

1.b.4 Goal

To share a significant portion of the banking sectors by utilizing available manpower and

also state of the art technology for maximizing the shareholders wealth.

Long Term Goal: To maximizing the wealth of the shareholders.

Short Term Goal: To earn satisfactory rate of return on investment by providing

wide range of banking service.

1.b.5 Motto

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1.b.6 Organogram (The Higher Authority and Board of Directors)

At present there are 15 members in the Board of Directors. In Board of Directors 1,

chairmen1, Management Director and 13 directors are involved in Board of directors.

According to the Banking Company Act, Management Directors are not elected by the

directors. They are appointed by Bangladesh Bank from outer sources.

However the members are obliged to maintain annual general meeting and declare the

dividend payout schedule on due time. Moreover, the committee selected by shareholders

represents individual body that then looks after the periodic issue with the management

and tries to solve the problem.

Chairman

Azharul Islam

Vice Chair-man

Iftekharul Islam

Directors

Abul Barq Alvi Col. Engineer M. S. Kamal (Retd.)

Syed A. N. M. Wahed Sk. Amanullah

Major. General Prof. M. A. Mohaiemaen (Retd.) Dr. Md. Rezaul Karim Mazumder

Lt. Col. Dewan Zahedur Rahman (Retd.) Engineer Tofazzal Hossain

Mohammed Farooq Muhammad Quamrul Ahsan

Asif Rahman

Managing Director

Shamsuddin Ahmed

Secretary

Md. Fazlur Rahman

14

Uttara Bank Ltd.

Darus salam Road Branch Code-1529

GENERAL BANKING

DEPARTMENT

FOREIGN EXCHANGE

DEPARTMENT

LOAN & ADVANCE

DEPARTMENT

MR. MD. RAFIQUL ISLAM KHAN

ASSISTANT GENERAL MANAGER

Md. Golam Mostofa

Mr. S.M Akhter Hossain

Md Abdul Mamun

Chowdhury

K.M. Nur-E-Alam Khan

Mrs.Nargis Akhter

S.M.Rezaul Karim

Lina Sultana

Monira Sultana

Aklima Afroze

Principal Officer

Officer

Assistant Officer

Advance Officer

Md. Ehteshamul Hoque

Md. Parvez Ahmed

Md. Faisal Ahmed

Nasrin Sultana

Principal Officer

(Cash In charge)

Md. Motahar Hossain Seikh

CASH DEPARTMENT

Officer

Md. Majher Hossain

Sabina Yeasmin

Assistant Officer

Senior Principal Officer

(Relationship Manager)


(Foreign Incharge)


Senior Officer

Md. Abdus Samad Azad

Senior Officer

Senior Officer

1.b.7 The Organogram of Uttara Bank Limited of Darus Salam Branch

15

1.c. Objectives

The main objective of this study is to know about the general Banking Practices and

customer service of Uttara Bank Limited. To do this study, we know that how UBL

continuous their general banking practices and what policies they use were examined.

Moreover the study embodied the following specific objectives:

o To know the general banking practice of the bank.

o To find out the limitation of the general banking practice.

o To prescribe some essential steps to prevail over such limitation.

o To acquire practical knowledge about organizational activities.

o To have an idea about the departmental customer service activities.

o To have an overall idea about the UBL.

16

Chapter- 2

Activities Undertaken

a. Work-Related

b. Organization- Wide

c. Other Relevant Activities

17

2.a. Work-Related

2.a.1 General Banking

Financial institution/ intermediary that mediates or stands between ultimate borrowers

and ultimate lenders is knows as banking financial institution. Banks perform this

function in two\ ways- taking deposits from various areas in different forms and lending

that accumulated amount of money to the potential investors in other different forms.

General Banking is the starting point of all the banking operating. General Banking

department aids in taking deposits and simultaneously provides some ancillaries service.

It provides those customers who come frequently and those customers who come one

time in banking for enjoying ancillary services. In some general banking activities, there

is no relation between banker and customers who will take one service from bank. On the

other hand, there are some customers with who bank are doing its business frequently. It

is the department, which provides day-to-day services to the customers. Everyday it

receives deposits from the customers and meets their demand for cash by honoring

cheques. It opens new accounts, demit funds, issue bank drafts and pay orders etc. since

bank in confined to provide the service everyday general banking is also known as retail

banking.

18

2.a.2 Customer Services of Uttara Bank Limited:

Professional merit and Competency, Flexibility, Determination and Dedication are the

core resources that UBL consider to be of paramount importance for building a client

oriented modern banking. Customer satisfaction is UBL foremost professional

undertaking. Therefore, a satisfied client is UBL precious product and they consider them

UBL ambassador in the market. Mrs. Lina Sultana is the customer service in charge of

UBL Darus-Salam Branch.

2.a.3 Account opening section

I spent 15 days in account opening section. Here my job was to provide information about

different types of accounts and what are the procedures to open an account.

Account opening is the gateway for clients to enter into business with bank. It is the

foundation of banker customer relationship. This is one of the most important sections of

a branch, because by opening accounts bank mobilizes funds for investment. Various

rules and regulations are maintained and various documents are taken while opening an

account. A customer can open different types of accounts through this department. Such

as:

General Banking

Customer

Service

Account opening/

Closing Remittance Account

Department

Clearing

Transfer

Cash

Payment Order

issue/

Cancellation

D.D

Issue/Collection

T.T

Issue/Collection

Collection

Process

IBC

OBC

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1. Current Account

2. Savings Account

3. Short Notice Deposit (SND)

4. Fixed Deposit Receipt Account/ FDR Account

5. Short term Deposit/ STD Account

2.a.3.1 Current Account:

Current account is purely a demand deposit account. There is no restriction on

withdrawing money from the account. It is basically justified when funds are to be

collected and money is to be paid at frequent interval. Some important points have been

discussed in the project part.

Opening of Current Account:

Collect an Account opening form from the Bank.

Fill all the requirements of the form.

Nominee is must be specified. One passport size picture of the nominee should

be given.

Photograph is most important for any account.

to open this account the most important things is that Voter ID card, Passport

Photocopy or the Word Commissioner Certificate must have to add with the

account opening form and also enclose the form 12 with the account opening

form.

2.a.3.2 Savings Bank Account

This deposit is primarily for small-scale savers. Hence, there is a restriction on

withdrawals in a month. Heavy withdrawals are permitted only against prior notice. Some

Important Points have been discussed in project part.

Opening of Saving Account:



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be given.


The account holder sign of his/her own self in front or the specific bank

principle Officer in the account opening form.

To open this account the most important things is that Voter ID card, Passport


account opening form.

2.a.3.3 SND (Short Notice Deposit) Account

Normally various big companies, organizations, Government Departments keep money in

STD account. Frequent withdrawal is discouraged and requires prior notice. 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. Interest is calculated based on daily minimum product and

paid two times in a year. Interest rate is 6.00%.

2.a.3.4 Fixed Deposit Receipt Account/ FDR Account

Any Bangladeshi national residing home or abroad may open FDR with Uttara Bank

Limited. FDR may be opened single/joint name for a period of 3, 6, 12, 24 and 36

months. Uttara Bank Limited offers attractive/competitive rate of interest in FDR.

FDR Account:




be given.


the account holder sign of his/her own self in front or the specific bank

principle Officer in the account opening form.

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To open this account the most important things is that Voter ID card, Passport


account opening form.

2.a.3.5 Short term Deposit/ STD Account

Govt. Semi-Govt. Autonomous organization and an individual may open STD Account

with Uttara Bank Limited. Uttara Bank Limited offers attractive/competitive rate of

interest in STD Account. 7 days notice required to withdraw big amount.

Checklist of Documents to be obtained for various types of Accounts

Individual / Joint Account

1. Introduction of the account.

2. Two photographs of the signatories duly attested by the introducer.

3. Identity (copy of passport).

4. Joint Declaration Form (For joint a/c only).

5. Employees Certificate (in case of service holder).

Partnership account



3. Partnership letter duly signed by all partners (Sign should be similar as stated

in Partnership Deed).

4. Partnership Deed duly certified by Notary public.

5. Registration (If any).

6. Updated Trade license.

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Proprietorship account



3. Valid copy of Trade License.

4. Rubber stamp.

5. TIN number certificate.

6. Identity (Copy of passport).

7. Permission letter from DC/ Magistrate (in case of newspaper)

Limited company


2. Two photographs of the signatories duly attested by the Introducer.

3. Valid copy of Trade License.

4. Board resolution of opening A/C duly certified by the Chairman/Managing

Director.

5. Certificate of Incorporation.

6. Certificate of Commencement (In case of Public limited company).

7. List of directors along with designation & specimen signature.

8. Rubber Stamp (Seal with designation of each person)

9. Certificate of registration (In case of Insurance Company Obtained from

department of Insurance from the Peoples Republic of BD).

Club / societies account


2. Two photographs of the Signatories duly attested by the introducer.

3. Board Resolution for Opening A/C duly certified by President/ Secretary.

4. List of Existing Managing Committee.

5. Registration (if any).

6. Rubber Stamp.

7. Permission letter from Bureau of N.G.O. (In case of N.G.O. A/C).

23

Account Closing:

I also gathering some experience about some account closing process. Basically for two

reasons, one account can be closed. One is by banker and other is by the customer.

By banker: If any customer doesnt maintain any transaction within six years and the

A/C balance becomes lower than the minimum balance, banker has the right to close an

A/C.

By customer: If the customer wants to close his A/C, he writes an application to the

manager to close his/her A/C. After receiving the consumers application, the officer

verifies the balance of his/her account. Then he calculates the interest and other charges

accumulated on the account. If it bears a credit balance, the officer writes an advice

voucher. He posts necessary accounting entries to account section. Then the balance is

returned to the customer and lastly the account is closed.

2.a.4 Remittance:

I spent 1 month in this section. Here my job was to write pay orders, keeping entries of

pay orders, DDs and Transfers.

There are two types of Remittance in Uttara Bank Limited (UBL). There are:

1. Local Remittance

2. Foreign Remittance

Local Remittance is consisted by Payment order (PO), Demand Draft (DD), Telegraphic

Transfer (TT). On the other hand Foreign Remittance is consisted by foreign earn which

is conducted by who are living another country.

2.a.4.1 Foreign Remittance

Uttara Bank Limited is the members of Money Gram and SWIFT networks. Using the

services of these global network, non resident Bangladesh nationals can send money from

abroad to their home country within a few minutes without any risk, Besides Money

Gram, they have also arrangement with foreign money exchange companies like U.S.E.

24

Exchange Co. Redha-al-Ansari Co. etc. through which Bangladeshi expatriates can remit

these money to their relatives in home country very easily and safely using SWIFT

network. MoneyGram and SWIFT mechanism ensure 100% secured and quickest

possible mode of money transfers from abroad tour country and Bangladeshi money

receivers are enjoying these facilities through us. Uttara Bank Limited is rendering

exceptional services to its clients by arranging such private remittance of money from

foreign countries to Bangladesh.

2.a.4.2 Local Remittance:

Carrying cash money is troublesome and risky. Thats why money can be transferred

from one place to another through banking channel. This is called remittance.

Remittances of funds are one of the most important aspects of the Commercial Banks in

rendering services to its customers.

Types of remittance:

Between banks and non banks customer

Between banks in the same country

Between banks in the different centers.

Between banks and central bank in the same country

Between central bank of different customers.

The main instruments used by the Uttara Bank of local remittance of funds are

1. Payment order (PO)

2. Demand Draft (DD)

3. Telegraphic Transfer (TT)

2.a.4.2.1 Payment Order (P.O)

The pay order is a document which instructs a bank to pay a certain sum to a third party.

Such orders are normally acknowledged by the bank which provides a guarantee that the

payment will be made. Only the branch of the bank that has issued will make the payment

of pay order. The procedures for issuing a Pay Order are as follows:

25

1. Deposit money by the customer along with application form.

2. Give necessary entry in the bills payable (Pay Order) register where

payees name, date, PO no, etc is mentioned.

3. Prepared the instrument.

4. After scrutinizing and approval of the instrument by the authority, it is

delivered to customer.

By cash:

Cash A/C ..Debit

Bills payable (PO) A/C ...Credit.

Income on commission A/C Credit.

By account:

Customers A/C ..Debit

Bills payable (PO) A/C Credit.

Income on commission A/C Credit.

By transfer:

UBL General/ other Dept Clients A/C.Debit

Bills payable (PO) A/C ..Credit.

Income on commission A/C...Credit.

PO A/C is the current liabilities of bank, which is acquired to be discharged by

beneficiaries against cash or through an account.

Cancellation of a Pay Order:

If a buyer wants to cancel it, he should submit a letter of instrument in this regard and

also return the instrument.

Bills payable (PO) .Debit

Customer A/C..Credit

26

2.a.4.2.2 Demand Draft (D.D):

The person intending to remit the money through a Demand Draft (DD) has to deposit the

money to be remitted with the commission which the banker charges for its services. The

amount of commission depends on the amount to be remitted. DD is treated as the current

liability of the bank as the banker on the presentation of the instrument should pay the

money. The banker even on receiving instructions from the remitter cannot stop the

payment of the instrument. Stop payment can be done in the following cases:

Loss of draft before endorsement: In this case, Draft reported to be lost, payees

endorsement requires verification is marked.

Loss of draft after endorsement: In this case, the branch first satisfies itself about the

claimant and the endorsement in his favor.

2.a.4.2.3 Telegraphic Transfer (TT)

Telegraphic transfer (TT) is another widely used mode for remittances of funds. In case

of telex transfer the message for transfer of funds is communicated through tested

telephone. UBL generally recovers from the telex charges in addition to the usual service

charges.

Issuing of TT:

UBL follows the following procedures:

1. The customer deposits money with UBL to be sent.

2. The customer obtains a cash memo containing TT serial number.

3. TT serial number, notifying part name is mentioned in the telex message.

4. The Telex Department confirms transmission of the telex.

Accounting entries for TT:

Cash A/C Clients A/C -----------------------Dr.

UBL General A/C (Darus-Salam branch)---------------Cr.

27

So the basic three types of local remittances are discussed below:

Points Pay Order Demand Draft ( D.D) Telegraphic Transfer

(TT)

Explanation Pay Order gives the

payee the right to

claim payment from

the issuing bank

Demand Draft is an order

of issuing bank on another

branch of the same bank to

pay specified sum of

money to payee on

demand.

Issuing branch requests

another branch to pay

specified money to the

specific payee on

demand by Telegraph

/Telephone

Payment from Payment from

issuing branch only

Payment from ordered

branch

Payment from ordered

branch

Generally used

to Remit fund

Within the clearing

house area of issuing

branch.

Outside the clearinghouse

area of issuing branch.

Payee can also be the

purchaser.

Anywhere in the country

Payment

Process of the

paying bank

Payment is made

through clearing

1. Confirm that the DD is

not forged one.

2.Confirm with sent

advice

3.Check the Test Code

4.Make payment

1.Confirm issuing

branch

2.Confirm Payee A/C

3.Confirm amount

4.Make payment

5.Receive advice

Charge Only commission Commission + telex

charge

Commission +

Telephone

2.a.5 Collection Process:

In modern banking the mechanism has become complex as far as smooth transaction and

safety is concerned. Customer does pay and receive bill from their counterpart as a result

of transaction. Commercial banks duty is to collect bills on behalf of their customer.

There are two types of collection process. There are:

1. Outward Bills for Collection (OBC).

2. Inward Bills for Collection (IBC).

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2.a.5.1 Outward Bills for Collection (OBC)

OBC means Outward Bills for Collection .OBC exists with different branches of different

banks outside the local clearinghouse. Normally two types of OBC:

1) OBC with different branches of other banks.

2) OBC with different branches of the same bank.

2.a.5.2 Inward bills for collection (IBC)

When the banks collect bills as an agent of the collecting branch, the system is known as

IBC. In this case the bank will work as an agent of the collection bank. The branch

receives a forwarding letter and the bill.

2.a.6 Account Department:

Accounts Department is called as the nerve Centre of the bank. In banking business,

transactions are done every day and these transactions are to be recorded properly and

systematically as the banks deal with the depositors money. Improper recording of

transactions will lead to the mismatch in the debit side and in the credit side. To avoid

these mishaps, the bank provides a separate department, whose function is to check the

mistakes in passing vouchers or wrong entries or fraud or forgery. This department is

called as Accounts Department. If any discrepancy arises regarding any transaction this

department report to the concerned department.

Besides these, the branch has to prepare some internal statements as well as some

statutory statements, which are to be submitted to the Central Bank and the Head Office.

This department prepares all these statements.

Workings of this department:

Packing of the correct vouchers according to the debit voucher and the credit

voucher

Recording the transactions in the cashbook.

Recording the transactions in general and subsidiary ledger.

Preparing the daily position of the branch comprising of deposit and cash.

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Preparing the daily Statement of Affairs showing all the assets and liability of the

branch as per General Ledger and Subsidiary Ledger separately.

Making payment of all the expenses of the branch

Recording inters branch fund transfer and providing accounting treatment in this

regard.

Preparing the monthly salary statements for the employees

Preparing the weekly position for the branch which is sent to the Head Office to

maintain Cash Reserve Requirement (C.R.R)

Preparing the monthly position for the branch which is sent to the Head Office to

maintain Statutory Liquidity Requirement (S.L.R)

Make charges for different types of duties

Preparing the budget for the branch by fixing the target regarding profit and

deposit so as to take necessary steps to generate and mobilize deposit.

Checking of Transaction List.

Recording of the vouchers in the Voucher Register.

Accounts department consisted by 3 things. There are:

1. Clearing

2. Transfer

3. Cash

2.a.6.1 Clearing:

Clearing is one of the magical parts of banking. I really enjoyed this part of the accounts

department and banking sector. In Uttara Bank Limited clearing in charge is Mr. SM

Rezaul Karim (Officer Grade- II), I did work with him.

Types of Clearing 1. Outward Clearing: When the Branches of a Bank receive cheque from its

customers drawn on the other Banks within the local clearing zone for collection

through Clearing House, it is Outward Clearing.

2. Inward Clearing: When the Banks receive cheque drawn on them from other

Banks in the Clearing House, it is Inward Clearing.

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Clearing House Process:

In Bangladesh Bank, there is a very large room, which contains fifty (50) or more tables

for each bank that is called the clearing house. Every bank has an officer of clearinghouse

who works with Bangladesh Bank clearing house. Actually most of the major clients

deposit their account in different kinds of bank cheques. Clearing officer check all the

cheques and deposit slip very carefully and then he received the cheque. After that the

clearing officer posts all the cheques in computer software which is recognized through

Bangladesh bank computer department. Then clearing officer seal all the cheques in

advance date after that the officer endorsement all the cheques and sign all the cheques.

All the cheques are posted in the computer by branch wise, then officer print the entire

document and staple all the cheques by branch wise this is called schedule of clearing

house. It is a very difficult job to staple all the cheques, because some times the cheques

are huge in quantity, it may be 250 to 400, this is very vital job because every cheque

must have to staple very carefully, it means cheque amount and the print sheet amount

and cheque branch must have to be same. If the cheques staple in wrong direction, the

cheque may be return from another bank, thats why UBL not to be able to credited party

account.

All of the procedures of clearing have to be completed before 10 am in the morning. The

clearing officer checks the entire banks cheque and he puts all the cheques in bank wise.

Then the officer of UBL have to calculate all the cheques by using calculator machine,

Staple pin remover, and then he divides all the cheques as UBL Branch wise.

Automated Clearing House

Bangladesh Bank launched the newly introduced Automated Clearing House, as part of

its move to digitalize the countrys banking system. Under the new automated system,

banks will not need to send their cheques physically to the clearing house at the central

bank for effecting fund transfer. Now the banks can do the job online from their own

offices using machine readable cheques and the funds will be transferred electronically.

However, the banks can also drop their cheques at the Automated Clearing House at

Bangladesh Bank where the machine can take image and data of 300 cheques per minute.

The new magnetic ink character recognition encoded cheques have already been

31

introduced by different banks to integrate with the new system. The encoded cheques will

reduce the cheque clearance time to only two hours from the two days required so long

(SM Rezaul Karim, Clearing in charge, October 18, 2011).

2.a.6.2 Transfer:

Transfer is not a critical sector in banking but it is very important. Transfers play a vital

role in banking sector. So now we have to know what transfer is: basically transfer is a

type of register maintaining matter. In this register officer write down every day

transactions in Debit and Credit side then the officer calculate both the side of the register

if both side shown same amount, it means that the total days transaction is completely

okay.

2.a.6.3 Cash:

Cash department is the most vital and sensitive organ of the branch as it deals with all

kinds of cash transactions. This department starts the day with cash in vault. Each day

some cash that is opening cash UBL are transferred to the cash officers from the cash

vault. Net figure of this cash receipts and payments are added to the opening cash UBL.

The figure is called closing UBL. This closing UBL is then added to the vault. And this is

the final cash UBL figure for the bank at the end of any particular day. Cash department

in the UBL, Federation Branch is authorized dealer (AD) of foreign currency, so it can

deal with buying and selling of foreign currency. I spent 10 days of my intern period at

cash section. Here my job was to taking entries of customers deposits and IPOs.

Functions of Cash Department

Cash Payment: Cash payment is made only against UBLs printed valid cheque.

Cash Receipt: It receives deposits from the depositors in the form of cash.

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Cash Payment Process:

2.b. Organization-wide

In Uttara Bank Limited, there is another section; there are Foreign exchange division and

loan department. I spent 3 days in those sections.

Foreign exchange

Foreign exchange is the means and methods by which rights to wealth in a countrys

currency are converted into rights to wealth in another countrys currency. In banks when

we talk of foreign exchange, we refer to the general mechanism by which a bank converts

currency of one country into that of another. Foreign Exchange Department (FED) is the

international department Bangladesh Bank issues license to scheduled banks to deal with

foreign exchange. These banks are known as Authorized Dealers. If the branch is

1

2

3

4

Receiving Cheque by the employee in the cash counter

Verification of the followings by the cash Officer in the computer

section

Amounts in figure and sentence written does not differ

Signature of the drawer does not differ

Gives pay cash seal and sends to the payment counter

Payment officer makes payment

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authorized dealer in foreign exchange market, it can remit foreign exchange from local

country to foreign countries. So Uttara Bank, Principal branch is an authorized dealer.

There are two kinds of foreign exchange transaction:

A) Import

B) Export

Loans and Advance

This is the survival unit of the bank because until and unless the success of this

department is attained, the survival is a question to every bank. If this section does not

properly work the bank it may become bankrupt. This is important because this is the

earning unit of the bank. Banks are accepting deposits from the depositors in condition of

providing profit to them as well as safe keeping their interest. Now the question may

gradually arise how the bank will provide profit to the clients and the simple answer is

Loans & Advance.

34

Process of Loan

Heads Characteristics

Application Applicant applies for the loan in the prescribed form of the bank

describing the types and purpose of loan.

Sanction

1. Collecting credit information about the applicant to determine the

credit worthiness of the borrower. Sources of information

2. Personal Investigation, Confidential Report from other bank, Head

Office/Branch/Chamber of Commerce.

3. CIB (Central Information Bureau) report from Central Bank.

i. Evaluation of compliance with its lending policy.

ii. Evaluating the proposed security.

4. LRA is must for the loan exceeding one core as ordered by

Bangladesh Bank.

5. If everything is in accordance the loan is sanctioned.

Documentation

Then bank prepare a loan proposal which contains terms and conditions

of loan for approval of H.O. or Manager.

Takes the necessary papers and signatures from borrower.

Disbursement

A loan Account is opened.

Where customer A/C-------------------------Dr.

Respective Loan A/C -------------------Cr.

2.c. Other relevant activities

In the 2 months internship program I spent 1 day in National Heart Foundation Hospital

(N.H.F.H). UBL has a booth in the N.H.F.H. The main responsibility is UBL booth is

receiving money from the patient and giving salary of the hospitals employee. Here my

job was receiving cash memo from the patient and also provide information about

different types of accounts for the hospital employees and what are the procedures to

open an account.

35

Chapter- 3

Constraints/ Challenges and proposed course of action for

improvement

a. Identified/Observed in the Organization

b. Academic Preparation

36

3.a. Identified/Observed in the Organization

After doing internship in UBL, I have found some problems in the bank according to my

perspective. They are.

Theoretically any person can purchase pay order, demand draft and telex transfer

by depositing money and commission. But the person who wants to purchase

these should have account in the bank branch. These will discourage customers to

transact with bank. So my suggestion is to withdraw this rule.

If any customer wants to deposit money/pay T&T and other bills then he needs to

take a scroll number from the front desk. In the scrolling process, the

officer/receptionist writes the account number, amount and date on a register

book. After that, while depositing money in the cash counter, the cash officer

again writes the same things on another register book. I think this scrolling

process wastes customers valuable time and should be stopped immediately.

In opening accounts some additional documents are needed as per the rules. Like

trade license, member of Dhaka chamber of commerce and industry (DCCI) in

Dhaka city. Again some documents are not essential practically as referred in the

rules and regulations. For example, The photo of the introducer.

The web-site of UBL is not updated. Only a few amount of information are given

there. In addition, there is some information given which is totally unnecessary for

a client. So, I think that unnecessary information should be removed from the

website and some necessary information should be given there such as, how to

open an account, what are the interest rates of different accounts etc.

They have very few numbers of Automated teller Machine (ATM) booths.

Though UBL have contract with Dutch Bangla Bank Limited to use their booths

in all over Bangladesh but DBBL booths are expensive for the customers because

they charges a fee for every transaction.

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There is a rule to deposit at least an amount of money in case of opening an

account. But it is not strictly followed. Sometimes more money is asked from a

new customer who discourages him to open an account in the bank. I think the

amount should be fixed at a level that is not altered from customer to customer.

When a client try to open an A/C he/she must have to need an introducer,

sometime it may create a problems for the clients.

There are only 6 computers in UBL DarusSalam branch, but managers room

there are no computers. I have done 2 months internship over there and within this

period I havent seen any initiative to buy more computers.

The number of security cameras are also very few. So the management authority

should increase the number of security cameras in case of bank safety.

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3.b. Academic Preparation

This internship period is very important for any student. So it also gives me an

opportunity to learn practical knowledge about banking. It gives me also some valuable

learning. But on the other hand as a major in marketing student it was also very tough to

learn all process about banking. Because as a marketing student in university we learn

about brand, product, consumer behavior, sales policy and others etc. But in internship

period I have done my entire job of general banking. If I would be an accounting or

finance student then it would be easy.

On the other hand this internship period learned about professional condition. It also

learned me about professional behavior, how office employees behave with others, how

they maintain the banking procedure. And sometimes, I observed how they build up good

communication with new and existing customer.

So I can say that it gives me a great opportunity to learn about professional life. I hope so

this will be relevance of the near future job environment of any organization.

39

Chapter- 4

Lessons learned from the internship program

a. Implications to Organization/Company

b. Implications to Universitys Internship Program

c. Other

40

4.a. Implications to Organization/Company Based Affiliation

I learned different types of valuable lessons from this internship period. This is really

helping me to develop my personal skills. In this internship period I observed that, how

employees behave with clients. And what type of behave clients are want to expect from

bank. As a major in marketing student, it helps me very much. As a marketing student, I

think customer is the important part of every organization. So in this internship period, I

got valuable lessons and also develop my knowledge, skills, and behavior. By working in

UBL the knowledge learnt would be helpful enough to sustain with the real

organizational environment.

I have also learned about professional life. In 2 months internship period, I saw that some

of employees have a good leadership skill which is inspire me very much. And they are

also shared their experience with me and also gave me great advice.

4.b. Implications to Universitys Internship Program

Any academic course of study has a great value when it has practical application in real

life. Only a lot of theoretical knowledge is less important unless it has practical

attachment. The internship program is a partial requirement to take test of real life

challenge conducted by the intern. It is important part of BBA program. So some practical

knowledge which is intertwined with academic course, internship gives those

opportunities to acquire that knowledge.

4.c. Other

In this internship period I have learned about punctuality. And it helps me in near future

when I work in different organization.

41

Chapter- 5

Concluding Statements

a. Recapitulation /Summary

b. Recommendations for Future Strategic Actions

42

5.a. Recapitulation / Summary

At present there is no such organization in the world that is free from problem and

challenges. Every concern has to strive and struggle a lot to be more profitable and to go

more competitive edge. The management of UBL is taking strategic steps to enable the

bank to emerge as a strong and progressive institution. It is continuing to make efforts to

refine its products and operations to make them more compatible. New deposit schemes

have been introduced and an action plan to maintain revenue growth in future.

As the business and economic conditions remain uncertain, UBL continues to develop

new products like it has been doing in past.

5.b. Recommendations for Future Strategic Actions

I enjoyed very much my internship period. Uttara Bank Limited has given me the

opportunity to do my internship program for three months and provided me a wide range

of scope to observe the different functions of bank through the cordial assistance of its

members. I had the scope to observe the functions of general banking. I have learned lot

of things of these two departments such as how to deal with customers, how to open an

account, issue Pay Order, and the clearing operation of the bank.

And everything is happen for the university; in this affiliation reports every time I want

try to learn all of things about general banking system. Because prepare an affiliation

report, always I would be a sincere about my job. So personally I think, affiliation report

conduce a student to get practical knowledge about the organization and also particular

job.

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Chapter- 6

References

6.1 Bibliography


44

6.1 Bibliography

Departments of Uttara Bank Limited

General Banking Department

Foreign Exchange Division

Annual Reports

Annual Report of Uttara Bank Limited 2008



Website

www. Uttarabank-bd.com

45


UBL Uttara Bank Limited

BB Bangladesh Bank

AD Authorized Dealer

L/C Letter of Credit

SWIFT Society for Worldwide Inter-bank Financial Telecommunication

FED Foreign Exchange Department

PO/SDR Payment order/security deposit receipt

DD Demand Draft

T.T Telegraphic Transfer

FDD Foreign Demand Draft

SND Short Notice Deposit

OBC Outward Bills for Collection

IBC Inward Bills for Collection

C.R.R Cash Reserve Requirement

S.L.R - Statutory Liquidity Requirement

CIB - Credit Information Bureau