Internship Report On “General Banking & Foreign Exchange Activities of BASIC Bank Limited: A Study...

8/11/2019 Internship Report On “General Banking & Foreign Exchange Activities of BASIC Bank Limited: A Study on Dilkusha …

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PP r r e e f f aa t t oo r r y y PP aa r r t t



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II nn tt eerr nn sshh iipp R R eepp oorr tt

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“General Banking & Foreign Exchange Activities of

BASIC Bank Limited: A Study on Dilkusha

Corporate Brunch”



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edication

TT hh iiss R R eepp oorr tt iiss dd eedd iiccaa tt eedd tt oo MM yy HH oonn oorr aa bb llee SSuu pp eerr vviissoorr

Professor M. Mokarrom HossainAndMy beloved Younger Brother

Late Md. Rakib Uddin



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II nn tt eerr nn sshh iipp R R eepp oorr tt OO nn

“General Banking & Foreign Exchange Activities of BASIC Bank Limited:

A study on Dilkusha Corporate Brunch”

Supervised by:

Professor M. Mokarrom Hossain Department of Business Administration

Faculty of Business & EconomicsDaffodil International University

Prepared By:

Md. Rayhan Uddin

Id: 101-11-1471

Batch: 25th

Major in Accounting

Department of Business AdministrationFaculty of Business & Economics



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Daffodil International University

Date of Submission : 24.06.2013

Acknowledgement

The successful accomplishment of this report is the outcome of the contribution of a number

of people to whom I am grateful and thanked them from the very deep of my heart. At the

beginning, I would like to express my sincere gratefulness to Almighty Allah for enabling me

to prepare this report in complete form.

I would like to express my special gratitude to my honorable supervisor Prof. M. Mokarrom

Hossain, Faculty of Business & Economics, for providing me much needed suggestions to

prepare this report. His inspiration, kind direction helped me in building courage and

confidence to face the practical situations.

I express my sincere indebtedness to Mr. Abul Kalam Azad, Deputy General Manager

BASIC Bank limited, Dilkusha Corporate Branch , for his kind co-operation and guidance.

The members of BASIC Bank Limited management were very co-operative and helpful.

They helped me by providing various data, guidance and direction.

Thanks to all those persons who helped by providing information and their necessary

materials.



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Letter of Transmittal

,2013To Professor M. Mokarrom HossainDepartment of Business AdministrationFaculty of Business & EconomicsDaffodil International UniversitySubject: Submission of Internship Report.

Sir,

It is a great pleasure to submit my internship report on “General Banking & Foreign

Exchange Activities of BASIC Bank Limited: A study on Dilkusha Corporate Brunch”.

The whole report is based on my academic knowledge of BBA program and practical

experience gained during internship. I tried my best to prepare the report. If any further

clarification required regarding my report, I will gratefully respond to any clarification

required.

Finally, I would like to thank you for kind guidance and help. I hope and pray that you would

be kind enough to accept the report and oblige thereby.

Sincerely Yours

Md. Rayhan Uddin

ID: 101-11-1471

BBA 25 th Batch

Major in Accounting



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Letter of Acceptance

This is to certify Md. Rayhan Uddin, ID: 101-11-1471 has prepared this internship reportentitled “General Banking & Foreign Exchange Activities of BASIC Bank Limited” atDilkusha Corporate branch, under my supervision & guidance, I do here by approve the style& content of this internship report. This is for the partial fulfillment of four year graduationdegree of BBA, Major in Accounting, Daffodil International University.

I wish his ever success in life.

…………………………………………….... Prof. M. Mokarrom HossainInternship SupervisorFaculty of Business & EconomicsDepartment of BBADaffodil International University



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DECLARATION

I solemnly declare that this Internship Report is the outcome of original project work writtenin my own Language and it is not the replica of any other student. It has been submitted forthe partial fulfillment of the requirements of the degree of Bachelor of BusinessAdministration (BBA) under the guidance of honorable supervisor, Professor M. MokarromHossain, Faculty of Business& Economics, Daffodil International University, Bangladesh. Ithas not been submitted to any other University or Institution for any degree.

………………………….

Md. Rayhan Uddin

ID: 101-11-1471Department of Business Administration

Faculty of Business & EconomicsDaffodil International University



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Executi ve Summar y

The internship is designed to bridge the gap between the theoretical knowledge and real life

experience which is a part of Bachelor of Business Administration (BBA) program. It is

designed to have a practical experience while passing through the theoretical understanding.

The report is a combination of three months internship program with BASIC Bank Limited.

The report is about General Banking & Foreign Exchange Operation of BASIC Bank

Limited

The introduction part of this report emphasizes the background, objective, scope,

methodology, data analysis and limitations of the report. The report is descriptive in nature.Overview of BBL includes Objective, business policy, function, and shareholding structure,

board of directors, management committee and continued activities of BASIC Bank Ltd .

Theoretical aspect of this report is general banking of BASIC Bank Ltd. Analysis and

findings part I have analyzed the general banking of BASIC Bank Ltd on the basis of my

experience and observation (which I have got through my internship program).

Usually, the general banking system is very lengthy in BASIC Bank Ltd . All the process

goes through internal meetings and long discussion. I made some recommendations on

general banking of BASIC Bank Ltd.

.



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TABLE OF CONTENT

Part – OnePrefatory Par t

PAGENUMBER

Title Page 2

Dedication 3

Preface 4

Acknowledgement 5

Letter of Transmittal 6

Letter of Acceptance 7

Declaration 8

Executive Summery 9

Table of Contents 10



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List of Tables 16

Part – TwoReport BodyIntroduction

PAGENUMBER

Chapter One Introductory Part

1.1 Rationale of the study

1.2 Objective of the study

1.2.1 General objective

1.2.2 Specific objective

1.3 Methodology of the study

1.3.1 Sources of information anddata

1.3.2 Period Covered

1.3.3 The process of application ofthe techniques and reason

1.4 Limitation of the Study

Chapter Two Organizational Profile ofBASIC Bank Ltd

2.1 Background

2.1.1 Capital structure and ratios



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2.1.2 At a Glance of BASIC BankLimited

2.2 Organizational Goal

2.3 Organizational Structure

2.3.1 Board of Director

2.3.2 Management

2.4 Customer Service

2.5 Return on Equity of BASIC

2.6 Technology of BASIC

2.7 Risk management

2.8 Information and location

2.9 At a Glance of BASIC BankLimited “Dilkusha Branch”

Chapter 3 General Banking Activities ofBASIC Bank Ltd

3.1 GENERAL BANKING

3.2 ACCOUNTS OPENINGSECTION

3.3 COMMON FORMALITIESREQUIRED FOR EVERY

ACCOUNT3.4 Issuing Cheque Book

3.5 Account Enquiry

3.6 Transfer of an Account



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3.7 Closing of an Account

3.8 FIXED DEPOSIT RECEIPT(FDR)

3.8.1 FDR Account

3.8.2 Renewal of FDR

3.8.3 Loss of FDR

3.9 SANCHAYAPATRA

3.10 LOCKER SERVICE

3.11 LOCAL REMITTANCESECTION

3.12 PAY ORDER (PO)

3.13 DEMAND DRAFT (DD)

3.14 TELEGRAPHIC TRANSFER (TT)

3.15 CALL DEPOST RECEIPT (CDR)

3.16 COLLECTION AND CLEARINGSECTION

3.17 Types of Bills for Collection

3.18 Types of cheques forclearing

3.19 CASH SECTION

3.21 ACCOUNTS SECTION

Chapter 4 Foreign Exchange Activitiesof BASIC Bank Ltd



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4.1 Literature Review

4.2 BASIC Bank and Trade Finance

4.2.1 BASIC Bank Statement policy

4.2.2 Function of Trade FinanceDepartment

4.2.3 Parties Involve in TradeFinance

4.3 IMPORT Bills

4.3.1 Import Procedure and Practice

4.3.2 Documentary Credit or L/C

4.3.2.1 Various steps in the operationof Documentary Credit

4.3.2.2 Different types of

documentary credit or L/C :

4.3.2.3 Stage to a documentary Credit

4.3.2.4 Advantages andDisadvantages of

Documentary Credit4.4 EXPORT Bills

4.4.1 Export financing

4.4.1.1. Pre – shipment credit

4.4.1.2 Post Shipment Credit

4.4.2 Operating procedure



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4.4.3 Methods of payment in exportsales

4.5 Collection

4.5.1 Documentary collection

4.5.2 Clean Collection

4.5.3 Advantages andDisadvantages of Clean

Collection4.6 Banks facilities and Services to

Exporter and Importer 4.6.1 Export facilities and Services

4.6.2 Import facilities and services

4.7 Remittance

4.7.1 Inward Remittance

4.7.2 Outward Remittance

4.8 Core Concept of ForeignExchange

4.9 Factor Affecting Fluctuation InExchange Rates

4.9.1 Exchange rate in Bangladesh

and its function over time4.10 Ways of avoiding Exchange

Risk

Chapter Five Findings, Recommendations &Conclusion

5.1 Findings



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5.2 Recommendations

5.3 Conclusion

Part – ThreeAppended Par t

PAGENUMBER

A Bibliography

B Appendices

B.1 Appendix - 01

L ist of Tables PAGENUMBER

1.3.2 Period covered

2.1.1Capital structure and ratios

2.1.2 At a Glance of BASIC BankLimited

2.9. Transactions At a Glance ofBASIC Bank Limited “Dilkusha

Branch”

3.7 Excise Duties Applicable:For All Kinds of Deposits

3.8

Pre-mature Encashment



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of FDR

3.9 Different types ofshanchaypatras

3.10 LOCKER SERVICE

4.3.2.4 Advantages andDisadvantages of

Documentary Credit4.5.3 Advantages and

Disadvantages of CleanCollection

Appendix 01 Bank Performance at a glance



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Part TwoReport Body

Chapter: 1

Introductory Part



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Chapter: 1 Introduction

1.1 Rationale of the study Now a day, foreign trade plays a vital role in banking. It is a system or process in whichone national currency is converted into another and of transferring money from onecountry to another. It is mainly consist of export, import and other foreign Remittance. Ina developing country, foreign direct investment (FDI), export, import, foreign remittanceetc. plays very significant role. There is a great opportunity to invest the foreignremittance which also comes from ―wages earners‖ working abroad, in several

prospective investing fields like energy sector, telecommunication, informationtechnology etc, in our economy.

Maintenance of Deposit A/C, Saving accounts/ Current accounts/cash creditdeposits/Fixed deposits/short term deposits/margin deposits/Bond deposits/F.C. Bonddeposits. Receipts & payment of cash. Handling transfer transactions and operations ofclearing house. Maintenance of accounts with Bangladesh Bank & other banks.Collection of Cheques & Bills. Issue and payment of Demand Drafts, TelegraphicTransfers and payment Orders. Executing customers standing Instructions. Maintenanceof safe Deposit Lockers and Internal Accounts of the banks. Reporting to head officeabout daily position. Saving all transaction record in computer. Closing and transfer ofdifferent types of accounts. Keeping good relation with valued customer.

Therefore, “General Banking and Foreign Exchange ” has an important role to play inthe financial sector of Bangladesh. Consequently, the study of “General Banking andForeign Exchange” the context of Bangladesh‘s developing economy is of greatopportunity.



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1.2 Objective of the study

1.2.1 General objective

The general objective is that; practically know about general banking and foreignexchange actives and it how to apply our real life.

1.2.2 Specif ic objective

To analysis the General Banking Transaction procedures maintained by the BBL

To analysis the Foreign Exchange Transaction procedures maintained by the BBL

To evaluate General Banking and Foreign Exchange performance of The BASIC

Bank Ltd. To identify problems in General Banking & Foreign Exchange operations of The

BASIC Bank Ltd.

To recommend some suggestions for the successful operations of General

Banking and Foreign Exchange activities of the BASIC Ltd.



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Chapter 1: Introduction and Background of the Study

1.3 Methodology of the Study

The following methodology has been followed to come to a successful conclusion ofthe report:-

1.3.1 Sources of I nf ormation and data:

The sources of information are:

Pri mary data

Officers. Conversion with clients. Questionnaire.

Secondary data

Different Circulars issued by the head office of Bangladesh Bank.

Banks Annual reports. (years.2009,2010,2011)

Prior research report.

Some printed materials like brushier, hand notes etc.

Data Collection through personal interviews.

1.3.2 Period covered

Department Total DaysGeneral banking 50Foreign Exchange 40

Total 90

Table 1.1 shows the period covered during the internship



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Chapter 1: Introduction and Background of the Study

1.3.3 The process of appl ication of the techn iques and r eason

A critical analysis of the data has been made through the bar diagram and linegraph over the last five years. This has enabled me to visualize the trend of thevariables of interest over time; indicators of bank perforation have also beencomputed through ratios of variables and spread-burden analysis. In additionROE, Profitability etc. have been critically analyzed.

Trade finance procedure of documentary credit of the BASIC Bank has beencritically evaluated through the analysis of diagram, flow charts. This will

provide the identification of the problems faced by BASIC and ways ofremoving the problems.Protection of foreign exchange risk occurring out of transaction exposure for

BASIC by flowchart.

1.4 Limitation of the Study

Deposit all out co-ordination from the bank official, I faced some limitations. The main problem I faced in preparing the paper was that inadequacy and lack of availability ofrequired data. This report is an overall view of Foreign Exchange of BASIC Bank Ltd. Butthe is some limitation for preparing this report. These barriers, which hinder may work, areas follows:

Difficulty of accessing latest data of internal operation.

Most limitation of this report is Bank‘s policy is not to disclose some dataand information for obvious reason, which could be very much useful.

Lack of Experience on preparing these type of report

Sometimes data could not be verified.

The scope limited by the availability of data.

I was placed to this department for only 3 months of time and working like a

regular employee hindered the opportunity to put the better effort for the

study.

With All this limitation I try my best to make this report as best as possible. So readers arerequested to consider these limitations while reading and justifying any part of my study.



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Chapter: 2

Organizational Profile of BASIC Bank Ltd



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Chapter: 2 Organizational Profile of BASIC Bank Ltd

2.1 Background

Bangladesh Small industries and Commerce (BASIC) Bank Limited was established as a banking company under the companies act 1913 and was incorporated under this act on the2nd august 1988. The Bank launched its operation from the 21 st January 1989. It is governed

by the Banking Companies act 1991. The Bank started as a joint venture enterprise of theBCC foundation with 70 percent share and the Government of Bangladesh (GOB) with theremaining 30 percent shares. The BCC foundation being nonfunctional following the closureof the BCCI, the Govt. of Bangladesh took over 100 percent ownership of the Bank on4thJune 1992. However, the Bank is not nationalized; it operates like a private Bank as before.

BASIC is unique in its objective. It is a blend of development and commercial Bankingfunctions. The memorandum and Articles of Association of the Bank stipulate that 50 percentof loan able funds required to be invested in small and cottage industries sector. As otherscommercial Banks, BASIC provides their clients full-fledged commercial Banking services

including collection of deposits. Short term trade finance, working capital finance in processing and manufacturing units and financing and facilitating international trade.

CAPITAL POSITION (up to 2011)Authorized capital Tk. 2000.00 million.

Paid-up capital Tk. 1964.65 million.

Total Reserve up to31.12.2011 Tk. 2509.78 million

The Bank is required to transfer 50 percent of its net profit before tax to capital

Fund as per the Banking Companies



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Chapter 2: Organizational Profile of BASIC

2.1.1 Capital structure and ratios

At the end of the year 2011 Bank's capitalization stood at 8.68 percent for tier 1 and 10.13

percent for total capital against the total risk weighted assets exceeding the required

minimum levels of 5 percent and 10 percent respectively. Thus the Bank was able to

maintain the confidence of investors and depositors while providing a lucrative return to the

Government, the sole shareholder of the Bank. Details of the capital structure were as

follows:

Particulars 2011 2010

(Amount in million take)Core Capital (Tier 1)

Paid up capital 235759 1964.66Statutory reserve 2224.69 1824.69

Other reserve and surplus 653.17 469.99Total of Tier 1 Capital 5235.45 4259.34

Supplementary Capital (Tire 2)1%general provision on unclassified loans andoff balance sheet exposures 752.35 706.18

Revaluation reserve of HTM and HFTsecurities 123.16 107.55

Total of Tier 2 capital 875.51 813.73Total Capital (Tier 1 +Tier 2) 6110.96 5073.07

Ratios to risk weighted 60304.50 53907.00Capital Ratios to risk weighted Tier 1Capital 8.68% 7.90%Tier 2Capital 1.45% 1.51 %

Total Capital 10.13% 9.41%



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2.1.2. At a Glance of BASIC Bank Limited

Name BASIC BANK LIMITEDDate of incorporation August 2, 1988

Date of inauguration of operation January 21, 1989

Registered office Bana Shilpa Bhaban73, Motijeel Commercial AreaDhaka-1000, Bangladesh.

Head Office Sena Kalyan Bhaban(6t

floor)195, , Motijeel Commercial AreaDhaka-1000, Bangladesh.

Logo

Name of the chairman of the Board Mr. Sheikh Abdul Hye Bacchu

Name of Managing Director Mr. AKM. Sajedur Rahman

Number of Branches (In year 2013) 63

Services provided Deposit scheme, Credit facility and Foreignexchange services

Paid up capital Taka 1964.65 million (2011)

Profit after tax and provision Taka 660.93 million (2011)

Ownership Government of Bangladesh

Banking software used CASTLE

Technology used Member of SWIFT

Earnings per share 33.64 (2011)

E-Mail [email protected]

Website www.basicbanklimited.com

SWIFT BKSIBDDHA015

Number of Authorized Dealer 15

Table : At a Glance of BASIC Bank Limited


mailto:[email protected]


http://www.basicbanklimited.com/






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2.2 Organizational Goal

To employ funds for profitable purpose in various fields with special emphasis on small scaleIndustries.

To undertake project promotion to identify profitable areas of investment.

To search for newer avenues for investment and develop new product to suit such needs.

To establish linkage with other institutions which are engaged in financing micro enterprises?

To co- operate and collaborate with institutions entrusted with the responsibility of promoting and aiding SSI sector.

2.3 Organizational Structure

To achieve its organizational goal, the bank conducts its operation in accordance withthe major policy guidelines laid down by the Board of Directors, the highest policymaking body. The day to day operation off the bank is looked after by themanagement.

2.3.1 Board of Di rector

The Government holds 200 percent ownership of the bank. All the Directorsof the board are appointed by the Government of Bangladesh. The Secretaryof the Ministry of Industries is the chairman of the bank other directors of the

bank are high Government executive. The managing Directo5r are at the present 6 directors including the Managing Director on the board. The presentBoard of Directors of the bank consists of the following members:

2.3.2 M anagement

The management is headed by the Managing Director. He is assisted by theGeneral Manage and Departmental heads in the head office. BASIC isdifferent in respect of hierarchical structure from other Bank in that it is muchmore vertically integrated as far as reporting to the chief executive isconcerned. The Branches in charge of the Bank report directly to theManaging Director and, for functional purpose, to the head of the departments.Consequently, quick decision making in disposal of cases is ensured.




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Organ gram of BASIC Bank Limited

2.4 Customer Service

In this department, the customer service officer is the bank representative and is oftenthe first person contract with clients. The main job of the customer service officer is toattend any concerns expressed by the clients. They are responsible for handling anyquarries by the clients and also serve as initial interviewers and inform future clients of

what kinds of accounts BASIC offers.

They explain what accounts is available for what clients and what prerequisites arenecessary for these accounts. BASIC has saving accounts, current accounts, fixeddeposits, Short- term notice account, Bearer certificate of deposit accounts etc. Thecustomer service department works closely with the Remittance and Bills department.


BOARD OF DIRECTORS

MANAGING DIRECTORS

GMOPERATION

GMDEVELOPMENT

OFFICER INCHARGE

ACCOUNT

OFFICER INCHARGECREDIT

AGMINTERNATIONAL

DGMINDUSTRIAL

CREDIT

AGMESTABLISHMENT

AGMCOMPUTER

DGMADMINISTRATION



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Chart 2.1: Total Asset

Amount in Million TK

Chart 2.1 shows the Total Asset in million taka of BASIC Bank. The Total Assethas increased during the period 2010 to 2011.

Chart 2.2: Placement & Investment Amount in Million TK

Chart 2.2 shows the Placement& Investment in million taka of BASIC Bank. ThePlacement& Investment has increased during the period 2010 to 2011.


Chart 2.3: Operating Income

0

10000

20000

30000

40000

50000

60000

70000

80000

2007 2008 2009 2010 2011

Total Asset

0

2000

40006000

8000

10000

12000

14000

16000

2007 2008 2009 2010 2011

Placement &Investment



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Chart 2.3 shows the Operating Income in million taka of BASIC Bank. TheOperating Income has increased during the period 2010 to 2011.

Chart 2.4: Operating Expenses


Chart 2.4 shows the Operating Income in million taka of BASIC Bank. TheOperating Income has increased during the period 2010 to 2011.

0

200

400

600

800

1000

2007 2008 2009 20010 2011

Operating Income

0

50100

150

200

250

300

350

400

2007 2008 2009 2010 20011

Operating Expenses



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Chart 2.5: Net Income


Chart 2.5 shows the Net Income in million taka of BASIC Bank. The Net Income has increased during the period 2010 to 2011.

Chart 2.6: No of Employee

Number of People

Chart 2.6 shows the No. of Employ of BASIC Bank. The No. of Employhas increased during the period 2010 to 2011.

0

200

400

600

800

1000

2007 2008 2009 2010 2011

Net Income

0

200

400

600

800

1000

1200

2007 2008 2009 2010 2011

No of Employee



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Chart 2.7: Total Deposits


Chart 2.7 shows the Total Deposit in million taka of BASIC Bank. TheOperating Income has increased during the period 2010 to 2011.

2.5 Return on Equity of BASIC

The return on Equity (ROE) of BASIC has decreased in 2011 compared to the year 2010.Interest margin cover has been increased due to increase of interest income of BASIC is in2011. Net profit to Gross income is decreased during the year 2011. The after tax return onaverage asset has been also been decreased in 2011 compared to 2010.

0

10000

20000

30000

40000

50000

60000

70000

2007 2008 2009 2010 2011

Total Deposits



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2.6 Technology of BASIC

The Board attaches grant importance on acquisition and use of appropriate informationtechnology in the bank. Since inception the bank has continued its effort to meet the complexand dynamic needs of customers. BASIC bank has its own software developed in 1991. Localarea network (LAN) has been installed in Head office and 15 branches of the bank. Wide areanetwork (WAN) has been set up between Head office and branches using X.28 leased line ofBTTB. The bank has undertaken a project for5 introduction of ― Any Branch Banking ATM―automated Teller Machine ‖ and De bit Card ― at its 16 branches in Dhaka and Chittagong.The project will be implemented in 2002. Once completed, the valued customers will be ableto withdraw or deposit cash from any branch in Dhaka and Chittagong during office hours,withdraw cash, transfer funds and pay utility bill at any time from any ATM and pay theirshopping bills using a debit card. These system is called centralized.

2.7 Risk management

In banking business, no reward can be expected without risk. In this backdrop, themanagement has established a formal program for managing the business risk faced by the

bank. Considering the present non- performing loan position of the country, BASIC bank isvery much cautious about its investment. Every loan proposal is placed under careful scrutiny

before approval. Proposal of large amount of loans need approval of the board of Directors.Credit lines are established for each borrower or borrower group. Internet audit team andrecovery team exercise close monitoring on every loan transaction. Management regularlyreviews the banks overall assets and liabilities structure and makes necessary changes in themix asset/liabilities of balance sheet. The Bank also has a liquidity policy to ensure financingflexibility to cope with unexpected future cash demand. The Bank takes necessary action toavoid foreign exchange risk which is called as exposure.



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BASIC Bank Dilkusha Branch

2.8. Information and location

Adders: 14 Dilkusha C/A Dhaka-1000 DGM/ Branch in charge : Abul Kalam Azad AGM : Sumit Narayan

SWIFT Code : BKSIBDDH015 Zip Code: 1000Branch Code: 15No of Employ : 64Corporate customer : BAPX, BISIC

Phone : 02-9563793-4Fax : 02-9587150Rent: 30,00,000 (30 lac tk)Advance: 5,00,00,000tk (5 core tk)

2.9. Transactions At a Glance of BASIC Bank Limited “DilkushaBranch ”

Particular Year2010 Year2011

Deposit71494,00,000 624,00,00,000

Advance 72,00,00,000 180,00,00,000

Expenditure 57,00,00,000 180,00,00,000

Net profit 38,90,00,000 53,93,00,000

Total Income 96,00,00,000 229,00,00,000

Import 250,00,00,000 352,00,00,000

Export 470,00,00,000 538,00,00,000



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Chapter: 3

General Banking Activities of BASIC Bank Ltd



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3.1 GENERAL BANKING General Banking Department performs the core functions of the bank. It deals day to daytransactions. It takes the deposit from the customer and meets the customer demands forcash by honoring their checks. Broadly, it has the following core heads-1. Accounts Opening Section2. FDR And Ancillary Services Section3. Local Remittance Section4. Collection And Clearing5. Cash Section6. Accounts Section.

3.2 ACCOUNTS OPENING SECTION Banker-customer relationship begins with the opening of an account by the customer.Opening of an account binds the same into a contractual relationship. But the selection ofcustomer is very crucial. In fact, fraud and forgery of all kinds start by opening of anaccount by the customer (s). So, the bank takes extra care in its selection. One of the basicfunctions of commercial banks is to accept deposits. For accepting deposits both demandand time, BASIC Bank offers the following types of accounts-

1. Demand deposits (Withdraw able on demand)a. Saving Bank Account

b. Current Account

2.

Time deposits (Payable at a fixed date or after a period of notice)a. Fixed Deposit Receipt (FDR) b. Short Term Deposit (STD)

3.2.1Types of Accounts with Terms and Conditions This part covers only following types of accounts-1. Savings Bank Account2. Current Account3. Short Term Deposit (STD) AccountSavings Bank Account

This deposit is primarily for small-scale savers. Hence, there is a restriction onwithdrawals in a week. Heavy withdrawals are permitted only against prior notice. SomeImportant Points are as follows-

Minimum opening deposit of Tk.1000/= is required; Check book issuing balance is also the same (Tk. 1000/=); Withdrawal amount should not be more than 1/4 th of the total balance at a time and limit

twice in a week; Interest rate is 7.5% including 10% excise duty on interest rate. Interest paid twice in a

year depending on monthly minimum balance. When money is deposited within 5 of thefollowing month, then it is counted as monthly minimum balance. If the interest amountis more than Tk. 200 or more, the bank is paid the amount to the customer. Otherwise itis treated as Bank‘s Shadow Profit;



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Can open the A/c individually or jointly. In case of joint a/c, Joint signature is requiredif not authorized otherwise;

Minor (For withdrawal purpose), lunatic, insolvent, pardanshin women (Not mandatory)cannot open such type of account.

Cur rent Account

Current account is purely a demand deposit account. There is no restriction on withdrawingmoney from the account. It is basically justified when funds are to be collected and moneyis to be paid at frequent interval. It is most suitable for private individuals, traders,merchants, importers and exporters, mill and factory owners, limited company‘s etc. SomeImportant Points are as follows- Minimum opening deposit of TK.5000/- is required; There is no withdrawal limit. But in case of large amount say 2 lac or more, bank

requires one day before notice; No interest is given upon the deposited money; The Banker is under an obligation to repay these deposits on demand. So, they are

called demand liabilities of a Banker. The primary objective of such account is to save big customers like businessmen, join

stock companies, public authorities, etc. from the risk of handling a lot of cash. The cost of providing current account facilities is considerable to the Bank as they make

payments and collect the bills, drafts, and checks for any number of times daily. TheBank is, therefore, do not pay interest on current deposits. At the same time, BASIC

bank charges Tk. 200 as Incidental fee; Minimum Tk. 1000 balance must always maintain all the time; Minor cannot open such type of account; Account holder can enjoy SOD or even TOD facility.

STD (Short Term Deposit) Account Normally various big companies, organizations, Government Departments keep money inSTD account. Frequent withdrawal is discouraged and requires prior notice. In BASIC,customers usually give an instruction that their current account will be debited wheneverits deposited amount crosses a certain limit and this amount will be transferred to the STDaccount. The deposit should be kept for at least seven days to get interest. The interestoffered for STD is less than that of savings deposit. Interest is calculated based on dailyminimum product and paid two times in a year. Interest rate is 5.75% including 10%excise duty on interest rate.

3.3 COMMON FORMALITIES REQUIRED FOR EVERY ACCOUNT

1. Duly filled up Account Opening Form.2. Introducer‘s signature on Account Opening Form to be verified by Manager under

full signature.3. Two copies of passport size photograph of account opener(s) duly attested by the

introducer.Note: Mandate or authority form filled up by an individual (s) or account openers areto be obtained if the customer wants to authorize another person to operate an accounton behalf of him/ them.

3.3.1 Documents Required For Each Account Separately

In case of Proprietorship Firm- Declaration of proprietorship.



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Trade license. Tax Identification No (TIN) directed by Bangladesh Bank.In case of Partnership Firm-

Account must be opened in the name of the firm. The firm should describe the names and addresses of all partners. Board Resolution signed by all partners to open the A/C. Photocopy of partnership deed duly attested by notary public. Letter of partnership duly signed by all partners. Trade license from municipality. Tax Identification No (TIN) directed by Bangladesh Bank.

In case of Private Limited Join Stock Company- Memorandum of Association and Articles of Association duly certified by

Chairman or Secretary. Board Resolution duly certified by Chairman/ Secretary authorizing to open the

A/C with the bank and mentioning the name of the person (s) who will operate

the A/C as per provisions of Articles of Association. Certificate of incorporation duly certified by Chairman or Secretary. List of all Directors with Designation, Address & Specimen Signature duly

certified by Chairman or Secretary (Form XII). Latest copy of Balance Sheet Power of attorney. Tax Identification No (TIN) directed by Bangladesh Bank.

In case of Public Limited Join Stock Company- Photocopy of Registration certificate certified by Chairman or Secretary. Memorandum of Association and Articles of Association duly certified by

Chairman or Secretary. Board Resolution duly certified by Chairman/ Secretary authorizing to open the

A/C with the bank and mentioning the name of the person (s) who will operate theA/C as per provisions of Articles of Association.

Certificate of commencement duly certified by Chairman or Secretary. List of members of Managing/ Executive duly certified by Chairman or Secretary. Tax Identification No (TIN) directed by Bangladesh Bank.

In case of Societies/Clubs- Certified copy of Registration certificate under the societies Registration Act,

1962. Certified copy of Resolution for opening and operation of account.

Certified copy of Bye-laws & Regulations/ Constitution. Power of Attorney.In case of Cooperative Society - Copy of Bye-law duly certified by the Co-operative officer. Up to date list of office bearers. Resolution of executive Committee as regards of the account. Certified copy of Certificate of Registration issued by Registrar, Co-operative

Societies.In case of Non-Government College/ School/ Madrasha , - Up to date list of the Governing Body/ Managing Committee. Copy of Resolution of the Governing Body/Managing Committee authorizing

opening and operation of the account duly certified by Gazette Officer.



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In case of Minor’s account -

Putting the word ―MINOR‖after the title of the account. Recording special instruction of operation of the account. The account opening form is to be filled in and signed by either of the parents or

the legal guardian appointed by the Court of Law & not by the Minor.3.4 Issuing Cheque BookFor New and Old Account Fresh checkbook is issued to the account holder only against requisition on the prescribedapplication form. In case of old account, requisition made on the prescribed requisitionslip attached with the checkbook issued earlier. Generate a security no randomly forevery check leaf by Manager or authorized person. Prepare the instrument with respectivesecurity no on the back of each leaf and signed by the authorized person. Make necessaryentries in Check Issue Register . Finally issue the checkbook for client (s).For Duplicate Check Book Duplicate checkbook in lieu of lost one is issued only when an A/C holder personallyapproaches to the bank with an application agreeing to indemnify the bank for the lostcheck book. Verify signature of the A/C holder with the specimen signature card. Seriesnumber of lost checkbook is recorded in the stop payment register and caution should beexercised to guard against fraudulent payment.3.5 Account Enquiry A customer can obtain the statement of his A/C by submission of an application in

prescribed balance enquiry receipt. Normally it is supplied two times in a year. Inaddition, customer can know his current deposit position informally.3.6 Transfer of an Account

Account holder may transfer his account from one branch to another. For this, he/shemust apply with proper reason to the manager of the branch where he is maintainingaccount. Manager then requests to the manager of that branch where the A/C holderwants to transfer his account. Besides, he also sends original copy of account openingform and SSC (Specimen Signature Card) and photocopy of application for transferringthe account with the balance remained in the account.3.7 Closing of an Account

An account may close- When the customer desirous to close the account. When the account is inoperative for a long time. In case of customer‘s death, insanity or insolvency. When the court on that particular A/C issues Garnishee Order.

To close an account, the checkbook is to be returned to the bank. BASIC bank chargesTk. 200/= for the same by debiting the amount from his account and rest amount is then

paid to the customer. Necessary entries are given to the account closing register andcomputer. Finally make sure that A/C holder is completely free from all dues.



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Table- Excise Duties Appli cable: F or A ll Kinds of D eposits Sl. No. Deposit Amount Limit Charge 1. Up to 10,000 Zero2. 10,001 to 1,00,000 Tk. 120Sl. No. Deposit Amount Limit Charge 3. 1,00,001 to 10,00,000 Tk. 2504. 10,00,001 to 1,00,00,000 Tk. 5005. 1,00,00,001 to 5,00,00,000 Tk. 25006. 5,00,00,001 and above Tk. 5000

3.8 FIXED DEPOSIT RECEIPT (FDR) 3.8.1 F DR Accoun t Fixed deposits are time deposits or time liabilities. These are the deposits in which anamount of cash is deposited in Bank for a fixed period specified in advance. Before

opening a Fixed Deposit Account a customer has to fill up an application form whichcontains the followings- Amount in figures Beneficiary‘s name and address Time period Rate of Interest Date of Issue Date of maturity How the account will be operated ( singly or jointly) Signature (s) F.D.R. no. Special instructions (if any)

After fulfilling the above information and depositing the amount, FDR account is openedand a FDR receipt is issued and it is recorded in the FDR Register which contains thefollowing information- FDR account no. FDR (Fixed Deposit Receipt ) no. Name of the FDR holder with address Maturity period Maturity date Interest Rate

In case of FDR Account, the bank does not have to maintain a cash reserve. So, BASIC bank offers a high interest rate in these accounts. The revised interest rates for FDReffected from November 05, 2001 followed by BASIC are-a) For 3 months & above @ 8.25 %

b) For 6 months & above @ 8.50 %c) For 12 months & above @ 8.75 %d) For 24 months & above @ 9.25 %In case of encashment of FDR [say for Tk.X ] on maturity, following accountingtreatments are given-

Interest on FDR A/C —————————— -Cr. [say Tk. P]Excise Duty on FDR —————————— -Dr [say Tk. Q]



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10 % Income Tax on interest ——————— Dr. [say Tk. R]FDR A/C ——————————————— Dr. [Tk. (X+P-Q-R)]Cash A/C ——————————————— Cr. [Tk. (X+P-Q-R)]

If the customer wants to draw the interest only, then the following entries are given –

Interest on FDR A/C ——————————– Dr.Cash A/C ——————————————— Cr.

3.8.2 Renewal of F DR Customer supposes to inform the bank in writing 15 days before the maturity date forencashment. If not, bank normally renews the amount just after the maturity date.Renewal will be for previously agreed maturity period.

3.8.3 L oss of F DR If the instrument is lost from the possession of the holder, the holder is asked to fulfill thefollowing requirements-a) Holder should inform the bank immediately

b) Record a GD (General Diary) in the nearest Police Station.c) Furnish an Indemnity BondOn fulfilling the above requirements, BASIC bank is then issued a duplicate FDR.Table- Pre-mature Encashment of FDR

PERIOD PRE-MATUREENCASHMENT

INTEREST RATE

01 3 months Before 30 days No InterestEvery completed calendar

months

SB (Savings Bank) Rate

02 6 months Before 3 months SB RateBefore maturity butcompletes 3 months

Interest payable at 3 months Rate for a period of 3 months

03 12 months Before 3 months SB RateBefore expiry of 6 months Interest payable at 3 months rate for a

period of 3 monthsAfter expiry of 6 months but

before maturityInterest payable at 6 months rate for a

period of 6 months04 24 months Before 3 months SB Rate

After expiry of 6 months but before maturity

Interest may be allowed at 6 monthsrate for a period of 6 months

After expiry of 12 months but before maturity

Interest may be allowed at 12 monthsrate for a period of 12 months

3.9 SANCHAYAPATRABASIC bank Dilkusha branch is unique for selling Sanchay patra to its customers as itsancillary services on behalf of govt. Sanchay patra is issued by Jatio Shanchay Bureau,guided by Bangladesh Bank. It is received from Bangladesh Bank (BB). People

purchasing these bonds by depositing money in this branch and payment are made on

maturity to customers from this branch only. Every transaction is reported to BB. Within72 hours, otherwise penalty is imposed. Money is realized from BB after making



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payment to customer. This branch gets 1% commission for this service. As a wholefollowing things are conducted by this section- Selling of Shanchaypatra Making payment on maturity Reporting to Bangladesh Bank Calculation of interest Accounting.

Detail s of Shanchaypatra

Table- Showing different types of shanchaypatras

Sl Types Limit Interest

1. 8 years PratirakhaShanchay Patra

Singly- 15 Lac. After 1 year 8.75% and per yr. 1%increases and on maturity 15.75%.Jointly- 30 Lac.

2. 5 years BangladeshShanchay Patra

Singly- 15 Lac. After 1 year 8.50% and per yr. 1%increases and on maturity 12.50%.Jointly- 30 Lac.

3. 5 years Investment Schemeon 6 months rest

Singly- 10 Lac. Interest rate – 12%

4. 3 years Investment Schemeon quarterly rest

Singly- 20 Lac. Interest rate – 12%

Jointly- 40 Lac.

5. 5 years Paribar ShanchayPatra

Singly- 10 Lac. Interest rate- 11.92%. For prematurewithdrawal Postal Shanchay BankSimple Interest Rate is applicable.

3.10 LOCKER SERVICE BASIC Bank Dilkusha branch is also unique for providing locker service to itscustomers. People usually keep their valuables for securing purpose.\Terms and Conditi ons

Renter must have an account either current or deposit.1. All rentals are payable annually in advance.2. Lockers will be rented for a period of one year in the first instance and will

3. In order to terminate the hire written notices must be given at least one week period tothe expiry date of the hire and the locker with its keys must be surrendered to the bank.

4. The renter shall have access to the locker at anytime during the Bank‘s business hours. 5. Lockers may be hired in two or more names but not exceeding four and in such cases

the renters must give explicit instructions as to whether access is to be allowed to eitherrenters singly or two or more of their member jointly.

6. If the renter loses the keys of the locker the bank must be notified without delay. In suchan even all expenses the renter shall pay regarding breaking the locker and substituting afresh lock and keys.

7. In respect of the hire of safe deposit lockers the relationship between the bank and therenter is that of a licensor and licensee and not that of banker and customer.



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Table-: Locker service at a glance

Type of Locker Size (in cm.) TotalNo.

Rented AnnualCharge

Small 58 X 19 X12.5

90 06 Tk. 1200

Medium 58 X 35.5 X12.5

45 08 Tk. 1800

Note: Tk. 1500/= (Refundable) is applicable for all kinds of lockers as security charge.

3.11 LOCAL REMITTANCE SECTION Cash remitting from one place to another is risky. So, Banks remit funds on behalf of thecustomer (s) to save them from any awkward happening through network of their

branches. There are three modes of remitting funds. These ares – Pay Order (PO) Demand draft (DD) Telegraphic Transfer (TT) Call Deposit Receipt (CDR).

3.12 PAY ORDER (PO) Pay order is an instrument, used to remit fund within a clearing zone. Unlike cheque,there is no possibility of dishonoring PO. The PO can only be encashed through the

branch that has issued the instrument.

Pay Order Issuing Process For issuing a PO, following formalities are to be maintained. These are-

Duly filled up the application form by the customer. Deposit money either in cash or by cheque with necessary charges. Prepare the instrument and make necessary entries in the Bills Payable Register where

payee‘s name, date, PO no. etc are noted. Deliver the instrument to the customer after scrutinized and approved by authority by

taking signature of the customer on the counterpart.Accounting Entr y for Pay Order

Drawer‘s/Issuer‘s A/C ————————— -Debit

Bills Payable (PO) A/C ——————————— -CreditIncome A/C Commission —————– ————– CreditIncome A/C Postage ————————————– Credit.

Payment order is a current liability on the part of bank, which is required to be discharged by the beneficiaries against payment in cash or through an account. Modes of Purchasing Pay Order a) By cash

b) By accountc) By transfer of money.

Payment of Pay order



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As the PO issued by the bank is crossed one it is not paid over the counter. On thecontrary, this amount is trans ferred to the payees‘ account. To transfer the amount the

payee must duly stamp the PO. The a/c treatments will be-Bills Payable A/C ——————— -Debit

HO A/C ‗Y‘ branch————————– Credit.Note : Before payment is made, it is duty for issuing bank to examine whetherendorsement was given by the collecting bank or not. If not, dishonor the instrument andmarking the instrument ‗Endorsement Requirement‘. Cancell ation of PO The following procedure is followed to refund the pay order by cancellation:

1. Submit written request to refund the pay order attaching therewith the original PO.2. Verify purchaser‘s signature with the original application form on record. 3. Manager/ authorized person‘s prior permission is required before refunding the amount

of pay order.

4. Pay order should be affixed with a stamp ‗cancelled‘ under proper authentication andthe authorized officer‘s signature on the pay order.

5. No charge is created for cancellation. Refund only the pay order amount.6. The original entries are to be reversed with proper narration.7. Record the cancelled pay order in the Pay Order Issue Register.

L oss of Pay Order If the instrument is lost, the holder is asked to fulfill the following requirements-a) Holder should inform the bank immediately.

b) Record a GD (General Diary) in the nearest Police Station.c) Furnish an Indemnity Bond.

On fulfilling the above requirements, BASIC bank is then issued a duplicate pay orderand marked ‗In lieu of‘. Banker will also mark ‗stop payment‘ on the Bills PayableRegister.Coll ection of Pay Order If the payee is a customer of Mirpur branch, he will deposit it for collection. Then the

branch gives necessary endorsement as a collecting bank. Then the instrument places theissuing bank through clearing house.PO Charge

A commission of TK.40/= is charged for a pay order.

3.13 DEMAND DRAFT (DD)DD is called ‗Banker‘s Draft‘. It is an instrument, issued by a partic ular branch, drawn onanother branch of the same bank, instructing to pay a certain sum of money. It is very

popular instrument for remitting fund from one corner of a country to another. DD isissued in favor of a customer who maintains an a/c with BASIC Mirpur branch. It can beissued against Cash or Cheque. If DD amount is more than Tk.50000/=, a test code isgiven on IBCA. The a/c treatments will be-When DD is issued:

Cash/Customer A/C……………………Debit H/O A/C ‗X‘ branch…………………………Credit



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Income A/c commission………………..……Credit. After giving these entries an Inter Bank Credit Advice (IBCA) is prepared which containsthe controlling number, depicted that the branch is credited to whom it is issued. AnIBCA implies the following entries-

H/O A/C issuing branch………………Debit Drawn on branch……………………………Credit.

Payment Process of DD After receiving the instrument, the IBCA lodgment is done by the branch. Necessaryentries are given in DD Inward Register. Controlling number of the IBCA should matchwith the serial number of this register. The following accounting entries are made infollowing cases-When IBCA comesH/O A/C Issuing branch………………………Dr DD Payable A/C ……………………..……….Cr When instrument comesDD payable A/C.………………………………Dr Customer‘s A/C..………………………………Cr

If advice does not come but instrument comes

Suspense A/C………………………………….Dr Party A/C………………………………………Cr

When advice comesHO A/C Issuing Branch ……………………….Dr

Suspense A/C…………………………………..Cr The banker even on receiving instructions from the remitter cannot stop the payment ofthe instrument. Stop payment can be done in the following cases-i) Loss of draft before endorsement : In this case, ―Draft reported to be lost,

payee‘s endorsement requires verification‖ is marked. ii) Loss of draft after endorsement : In this case, the branch first satisfiesitself about the claimant and the endorsement in his favor.Cancell ation of DD To cancel an issued DD, the client has to submit an application. Issuing branch then

sends an Inter Branch Debit Advice (I.B.D.A.) to the drawn branch against previouslyissued Inter Branch Credit Advice (IBCA). After that the following entries are given-H/O A/C drawn on branch ———————— -Dr.Client‘s A/C ————————————— -Cr.

Issuing of Duplicate DD If the customer wants a duplicate DD, he then is asked to do the following formalities-

1. Throwing an application immediately by the original DD holder.2. Making a General Diary (GD) in the nearest Police Station.3. Furnishing an Indemnity Bond.4. Put a ‗CAUTION‘ mark in the register.

5.

Inform to the Head Office by the issuing branch.6. Inform all the branches by the HO for stop payment.



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7. Issue a new DD (Put the same DD no. and mark DUPLICATE).DD Charge

Commission @ 0.15% but minimum Tk.50/=.Postage charge Tk. 20/= (Fixed).

DD cancellation charge Tk. 50/= (Fixed).

3.14 TELEGRAPHIC TRANSFER (TT)Sometimes the remitter of the funds requires fund immediately. In that case, the banker isrequested to remit the funds telegraphically. Different modes are Telegram, Telephone,Telex, Fax. Telegraphic Transfer is the most rapid and convenient but expensive method.The drawer and the payee should have accounts with BASIC bank. TT is issued againstcash, cheque, and letter of instruction.Procedure for I ssui ng TT Following procedure is followed for issuing a TT.a) Deposit money by the customer along with application form.

b) In receipt of money a cost memo is given to the customer containing TT serialnumber which informs the awaiting party of the paying branch by the customer.c) Tested telex message is prepared where TT serial number, notifying party‘sname is mentioned.d) The telex department confirms transmission of the message.e) Necessary entry is given to the ‗TT Outgoing Register‘. Entries are as follows -Cash/Respective A/C (Issuer)……………..Dr HO A/C Paying branch………….…………Cr (Principal amount)

Income A/C (Commission)…………………Cr Procedure for I ncoming TT

After receiving the telex, it is authenticated by tested. TT serial number is verified withthe ‗TT Incoming - Concern branch‘ Register. Voucher is released in this regard givingthe following accounting entries-HO A/C Paying branch —————————— DrCustomer A/C ————————————— -Cr.TT Charge

1. Commission @ 0.15% of the Principal Amount but minimum Tk.200/=.

2. Telex charge Tk. 50/= (Fixed).

3.15 CALL DEPOST RECEIPT (CDR) CDR is also an instrument, issued by a particular branch, drawn on another branch of thesame bank, instructing to pay a certain sum of money not over the counter to a certain

person or his order. It is as like as Pay Order (PO), but main difference is that PO istreated as bills payable and CDR is treated as sundry deposit. From banker‘s point ofview, it is always desirable but its practice is limited. Only Tk. 40/= (Fixed) is chargedfor this facility. If CDR amount is more than Tk.50000/=, a test code is given on IBCA.When issuing the instrument, accounting treatment will be-Party A/C —————————– Debit



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HO A/C drawn on branch ————— -Credit.After receiving the instrument, accounting treatment will be-

HO A/C Issuing branch ————– Debit.Party A/C ———————————— Credit.

Besides, Staff and very Valued Customer‘s of the bank enjoy Direct Fund Transferfacility. In this case, no commission is charged.

3.16 COLLECTION AND CLEARING SECTIONCollection In modern banking the mechanism has become complex as far as smooth transaction andsafety is concerned. Customer does pay and receive bill from their counterpart as a resultof transaction. Commercial bank‘s duty is to collect bills on behalf of their customer. After that, the following entries are given and a debit voucher is prepared-Balance with Bangladesh Bank —————— DebitCustomers‘ A/C ————————————— -Credit.Receiving Ch eques F or Coll ection In BASIC Bank Limited, cheques of its customers are received for collection from other

banks. In case of receiving cheques, following points should be checked very carefully-1) The check should not carry a date older than the receiving date for more than 6months. In that case it will be a ‗Stale Check‘. Again the check should not be a ‗Postdated‘ one. 2) The amount both in words and figures of the pay-in-slip should be the same andalso it should be in conformity with the check‘s amount both in figures and words. 3) The name mentioned both in the check and the pay-in-slip should be the same.4) The check must be crossed.5) Collecting banker must check whether endorsement is done properly or not.

ENDORSEMENT IN CASE OFPayee‘s A/C will be credited on realization Bills for collection

3.17 Types of Bills for Collection 1. Outward Bills for Collection2. Inward Bills for Collection.

A. Outward Bills for Collection (OBC)If the bill is beyond the clearing range then it is collected by OBC mechanism. Customerdeposits cheques, drafts etc . for collection, attaching with their deposit slip. Instrumentsoutside the clearing range are collected through OBC mechanism . A customer of BASIC

bank Mirpur branch is depositing a check say of Janata Bank, Kotchandpur branch,Jhenidah. Now as a collecting bank, Mirpur branch will perform the following tasks-Procedur e of OBC a) Depositing the cheque along with deposit-slip

b) Crossing of cheques are done indicating Mirpur Br. as a collecting bankc) Endor sement ―Payee‘s A/C will be Credited on realization‖ is given d) Entries are given in the Outward Clearing Register.



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Collecting bank can collect it either by its branch or by the drawer‘s bank . They willforward the bill to that particular branch . OBC number will give on the forwarding letter.

Now following procedures will take place in case of the following two cases.Bi ll s Collected through Br anch

Collecting branch will receive an I .B.C.A. from that particular branch . Accountingtreatment from co llecting branch‘s point of view will be -

HO A/C concerned branch ………………….….Debit Customer A/C …………………………………….…….…Credit Income A/C on commission/ Postage…………….Credit.

Th e process of coll ection i s described below: a) If the bill is drawn on BASIC Bank Mirpur Branch –

1. Bills are sent to that branch through mail or courier;2. Branch collects the bills and sends an IBCA to that Branch;3. Depositor‘s account is credited.

b) If the bill is drawn on another Bank and there is a branch of BASIC – 1. Branch sends the bill direct to the branch of BASIC by OBC schedule.2. Request them to send the proceeds by IBCA and collect the bill.3. That branch of BASIC can collect the through clearing house arrangement exists there.

c) If the bill is drawn on another bank but there is no branch of BASIC-1. Bill is directly sent to that Bank2. Request them to send a draft in favour of this bank by an OBC schedule.3. That bank sends a DD mentioning the Paying Bank4. Then the bill is collected through clearing house process.

Bal ance Sheet Ef fect

OBC creates asset and liabilities simultaneously for bank . When send for collection, it is bank‘s liability and as well as customer‘s liability i .e. banks asset.

Liability head Bills for collection being bills receivable as per contra Asset head Bills receivable being bills for collection as per contra.

Customers liability A/C…………………………Debit Bankers liability A/C…………………………………Credit. After realization (Even if dishonored)Banker‘s liability A/C…………………………………Debit Customer liabilities A/C……………………………………Credit . After realization the contra is settled. This item is a stock variable of balance sheet at a

particular date . Balancing Balancing is done on the banker‘s liability account . The year end balance is shown on

balance sheet.B.Inward bills for collection (IBC) When the banks collect bills as an agent of the collecting branch, the system is known asIBC . In this case the bank will work as an agent of the collection bank . The branchreceives a forwarding letter and the bill. Next steps are as follows-

1. Entry in the IBC register

2. An IBC number is given on the bill.3. Endorsement given- ―Our branch endorsement confirmed‖



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4. The instrument is sent for clearing.Accounting Entr ies- Clearing………………………………………………Debit Miscellaneous Creditor A/C OBC ……………….Credit .

I f honored , the accounting treatment will be-Miscellaneous Creditor A/C OBC…………Debit H.O. Collecting branch A/C………………..……Credit . An IBCA is dispatched in this regardHO A/C agent branch………………………Debit HO A/C collection branch…………………..…..Credit. I f dishonored, The instrument is returned to the collecting branch along with a return memo.CLEARING

According to the Article 37 (2) of Bangladesh Bank Order, 1972, the banks which are amember of the clearing house are called as Scheduled Banks. The scheduled banks clearthe cheques drawn upon one another through the clearing house. This is an arrangement

by the central bank where every day the representative of the member banks sits to clearthe cheques. For clearing there is a department in every Bank. This department receivescheques, drafts and like instruments from its customers for the purpose of collection witha deposit slip over the counter crediting their accounts. Clearing of cheque is donethrough the clearing house in Bangladesh Bank. Every day the first hour starts at 10.00a.m. and returns house at 5.00 p.m.

3.18 Types of cheques for clearing 1. Inward clearing cheques.2. Outward clearing cheques.

A. Inward Clearing Bills It refers the instrument drawn on BASIC bank Mirpur Branch Limited, received fromother banks in the clearing house by their representative (s). Settlement process-Accounti ng entr y passed by thi s branch: Respective A/C …………………………Debit Head Office A/C (Main Br.) ..………………..Credit.

I f cheques are retur ned, BASIC Bank Mirpur Branch passes an IBDA to Main Branch.Then the necessary accounting entries will be-

HO A/C (Main Br.) ……………………..Debit Respective A/C ………………………….……Credit.

B. Outward Clearing Bills It refers the instruments drawn on the other banks received by BASIC bank

Mirpur Branch. They are of three kinds as follows-a) Cheques drawn on another branch of BASIC. The settlement process

b) Cheques drawn on another Bank which is situated within clearing house area.



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3.19 CASH SECTIONCash is the lifeblood of all financial activities. Cash section is a very sensitive point ofthe branch. This section deals with all types of negotiable instruments and it includesvault, used as the store of cash, instruments. The vault is insured up to Tk.20 lac. Insured

amount yet to be enhanced to Tk. 40 lac. Operation of this section begins when the banking hour starts. Cash officer begins his/her transaction with taking money from thevault, known as the opening cash balance. Vault is kept in a more secured place. Theamount of opening cash balance is entered into a register. After whole days‘ tr ansaction,the surplus money remains in the cash counter is put back in the vault and known as theclosing balance. If the cash stock goes beyond this limit, the excess cash is thentransferred to BASIC bank main branch. The main functions of this section are-

1. Cash Receipt2. Cash Payment

Cash Receipt Cash receipt procedure is given below-

1. The depositor first fills up the Deposit-in-Slip.2. Depositor deposits the money.3. Officer receives the money, counts and then enters in the Cash Receipt Register, and

finally signs with seal and dates the deposit-in-slip.4. Slip is then passed to another officer, who enters the receipt details like serial no,

amount, etc. in his register, signs the slip and keeps the banks‘ part of the slip. Other part is given to the depositor.

5. At the end of the day, entries are cross checked with the register kept at the cash counterto see whether the transactions are correct or not.

Accounti ng tr eatment- When cash received, the following entries are made-

Cash A/C……………………….Debit Party‘s A/C………………………….Credit

Cash Payment Some important check points for making the payment are as follows-

Endorsement Endorsement is done by putting signature of the drawer on the back of the negotiableinstrument for the purpose of negotiation. By ‗blank endorsement‘, an order instrument is

made as ‗bearer‘. BASIC bank limited endorses the instrument in the following ways -ENDORSEMENT IN CASE OFPayee‘s A/C credited Pay to Mr.XReceived payment

Payee‘s A/C credited Pay to BASIC bank, Mr.X

Payee‘s A/C credited Pay to Mr.X , BASIC bankCrossing

Generally two types of crossing are practiced, namely- General Crossing and SpecialCrossing. Basically it gives a direction to the paying bank not to pay the check amountover the counter. General c rossing includes ‗A/C payee‘ crossing only. Drawing two

parallel and transverse lines do it. On the other hand, special crossing is like general



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crossing but in addition bank name is also mentioned. This gives the direction to the sameto pay the check only to the banker, whose name appears in the crossing or to his agent.

Cash payment procedure is given below-1. Customer first deposits the check (s) to the cash section. Authorized individual checks

whether it is materially altered, proper endorsed, crossed or not. Being satisfied the totalrequirements; he passes it to the computer for checking the balance. Operator verifiesthe check leaf security no. If matched, then operator signs. Otherwise noticed to theindividual for stop payment;

2. Authorized officer is then verified the signature with the Specimen Signature Card(SSC);

3. Send the instrument to the computer section once again for posting;4. Cash officer is then asked the bearer to sign on the back of the instrument. At the same

he just enters the payment details in his register and pays the money to the bearer;5. At the end of the day, these information must be tallied with computer postings to

ensure the correctness of payment.

Accounting treatment- When cash paid, the following entries are made-

Party A/C……………………….Debit Cash A/C……………………………..Credit

Dishonor of Cheque If the cheque is dishonored, BASIC bank sends a memorandum (cheque return memo) tothe customer stating the reason in the following way-

1. Refer to drawer2. Not arranged for.3. Effects not cleared. May be presented again.

4. Exceeds arrangements.5. Full cover not received.6. Payment stopped by drawer.7. —————–Payee‘s endorsement irregular/ illegible/ required. 8. —————– Payee‘s endorsement irregular/ require Bank‘s confirmation. 9. Drawer‘s signature differs/ required.10. Alteration in date/ figures/ words requires drawer‘s full signature. 11. Cheque is post dated/ out of date/ mutilated.12. Amount in words and figures differs.13. Crossed cheque must be presented through a bank.14. Clearing stamp required/ requires cancellation.15. Addition to Bank‘s discharge should be authenticated. 16. Cheque crossed ―Account Payee Only‖ 17. Collecting Bank‘s discharge irregular/ required.

If the check is dishonored due to insufficiency of funds, BASIC bank charges Tk.100/=as penalty.

3.21 ACCOUNTS SECTION

Accounts department maintains all records of transactions and all types of statement. Atthe end of transaction hour all concerned section sends vouchers of transactions to this

department. Accounts department compares all figures/ amount, contents of transactionswith supplementary statement prepared by computer. If any discrepancy arises regarding



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any transaction then this department reports to the concerned department. Following arethe activities of accounts department:

To record all transaction in the cash book. To prepare daily, weekly, monthly, half-yearly and yearly fund position. To prepare all kinds of statements related to Bangladesh Bank, Head office and

National Board of Revenue (NBR). To prepare monthly salary statement, provident fund statement and administrative

expenditure statement. To make charges for different types of duty.Share !



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Chapter: 4

Foreign Exchange Activities of BASIC Bank Ltd



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Chapter 4: Foreign Trade Activities of BASIC

Chapter: 4Foreign Exchange Activities of BASIC Bank Ltd

4.1 Literature Review

Banks play a very important role in effecting Foreign Exchange Transaction of a country.Mainly transaction with overseas countries is respect of imports; exports and ForeignRemittance come under the preview of foreign exchange transactions. Banks are the vitalsector by which such transactions are effected/settled. Central Bank records all sorts offoreign exchange transaction and therefore, transaction effected by the Banks and otherauthorized quarters are to be reported regularly (Daily, Fortnightly, Monthly, Quarterly,Yearly etc) to Bangladesh Bank by the foreign exchange department of every Banks. ForeignExchange Department plays a vital role to earn the Banks maximum profit. This departmentis classified according to their activities. The foreign exchange department consists of threesections, these are as follows:

Import Section

Export Section

Foreign Remittance Section

Foreign Exchange Department, Banks facilitates their clients in enhancing InternationalTrade. The provision of finance to importers (Trust Receipt Facility, Documentary CreditFacility) and exporters (Negotiation of export Bills, Purchase of Bill for collection)encourages enterprises to engage in trade and enhance their liquidity position. Bank makesthe payment International Trade through letter of credit to the exporter on behalf importers.Banks is a media of fund transfer from one party to another. In International Trade, as bothimporters and exporters in different countries and do not deal with same currency, they haveto confront the risk of currency fluctuation. This exchange risk can be transferred from thetrader to the bank i. e. ready to provide the former with forward foreign exchange or currencyoption so that the importer and the seller can devote their time to their business.



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4.2 BASIC Bank and Trade Finance

BASIC Bank plays an important role in international trade. The trade finance department ofBASIC is efficient of their activities and provides the best services to their clients. The majorclients of BASIC are corporate clients. Performing their activities since 1989, BASIC has avery good relationship with the big corporate clients of Bangladesh. Trade financedepartment consist of Bills (Import) and Bills (Export).

4.2.1 BASI C Bank Statement poli cy

All BASIC employees are responsible for ensuring compliance with the Bank policies and procedures Operational Manual (OM), Know Your Client (KYC), and other policies. It is

imperative that the trade finance staff is fully conversant with all aspects of the above stateddocuments relating to Letter of Credit (L/C), Documentary and clean Collection, BankGuarantee, and Bank to Bank Reimbursement and export Bills.

a. International chamber of commerce (ICC) Uniform Rules, customs and practice:

Transactions relating to L/C, Documentary and clean collection, Bank toBank reimbursement are processed subject to and in conformity with thecurrent versions of International Chamber of Commerce Publication

b. Credit policies:

Bank has their own credit policies and procedures for all Trade financeactivities. These are Credit Principle, Global credit portfolio limit, Creditcategories, Types of credit activities, Credit approval, Credit administration,Credit monitoring and review.

c. Know Your Client (KYC):

Relationship Managers (RM) are responsible for ensuring that client profileare kept current and that copy is distributed in accordance with the BanksKnow your client policy.



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4.2.2 F unction of Tr ade F inance Department

Trade finance consists of the following areas of activity:

Import Bills Export Bills Bills Processing Unit

Basic function:

1. All transactions related to Import Transaction2. All transactions related to Export Transaction

3.

Handling of L/C reimbursements4. Checking and collection of export bills for correspondent Banks.

4.2.3 Parti es I nvolve in Trade F inance

1. The applicant: The applicant is the party that induces the Banks to issuesthe letter of credit. The applicant is normally obligated to reimburse theBank for any payment made under letter of credit.

2. The issuing Bank: The issuing Bank is the Bank that issues the letter ofcredit. The issuing Bank undertakes an absolute obligation to pay upon

presentation of documents drawn in strict conformity with the terms andcondition of the letter of credit.

3. The Advising Bank: An advising Bank simply advises a letter of creditwithout any obligation on its part. However, the advising Bank shall takereasonable care to check the apparent authenticity of the credit that itadvises. The advising Bank is typically a Bank in the Beneficiaries.

4. The Beneficiary: The beneficiary is the party entitled to drawn paymentunder the letter of credit. The beneficiary will have to present the requireddocuments to avail payment under the letter of credit.

5. The Confirming Bank : The confirming Bank confirms that the issuer hasissued a letter of credit. The confirming Bank becomes directly obligatedon the credit to the extent of its confirmation and by confirming the Bankreceives the rights and obligation of an issuer

6. The Nominating Bank : The Bank where drafts drawn under the credit are payable. In case of a usance credit where drafts are to be accepted by thisBank.

7. The Negotiating Bank: The Bank that negotiates document under letter ofcredit upon presentation. Typically advising Bank as nominated asnegotiating Bank



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4.3 IMPORT Bills

Import Bills deals with L/Cs and the issuance of L/Cs for import purposes. The letter of creditserves as a vehicle for the importer and exporter to ensure that their goods and money arecoming. It is important to remember that the Bank deals with documents and not goods.There are various steps towards the issuance of L/Cs; these steps will also BASIC, as will asvarious Banks serving as negotiating, confirming, etc. Banks. L/Cs are used for the purchaseand sale of goods.

L/C are used mainly in trade. They usually include the mode of shipment of a specifiedgoods, and what the port of destination is the expiry of the shipment, the document all need to

be submitted to the issuing Bank, Certificate of Origin, of where the goods is produced,

inspection certificates, as to quantity and quality, are countries may have their own set ofdemands they want to ask.

There are two criteria for importing goods :

1. Commercial ( Normally BASIC takes 50% margin of total values of goods )2. Industrial ( Normally BASIC takes 10% margin of total values of goods)

There are also two types of L/C:

1. Sight L/C : Sight L/C has also to be immediately through advanced payment can beallowed.2. Usance L/C : Usance L/C has also to be paid at a fixed maturity date. For example,

payment upon the receipt of goods.

Beneficiaries that want to apply for a L/C need to have proper credit facilities. Aftercalculating the outstanding, and there is a still room, then L/C is issued. Calculation ofmargin and charges are also done. Upon the receipt of goods, proper documentation iscertified, and then payment is done. The reimbursement of funds can be made in throughnegotiating. They can be negotiated to the Bank of choice of the relevant currency.

4.3.1 I mport Procedure and Practice

1. Regulation2. Import policy3. Licensing for Imports4. Making the purchase contract5. Opening the Letter of Credit6. Amendments to Letter of Credit7. Securing and Lodgment of Documents

8.

Verification and Lodgment of Documents by the L/C opening Bank



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. Chapter 4: Foreign Trade Activities of BASIC

Char t 4.1: I mport busin ess of other Banks (2010 and 2011)


Chart 3.1 shows the import amount in other Banks (2010 and 2011). Ascompared to other Banks BASIC import amount has fallen in 2011.

Chart 4.2: I mport business of BASIC B ank


Chart 4.2 shows the import in million taka of BASIC Bank. The import hasincreased during the period 2010 to 2011.

0

10000

20000

30000

40000

50000

2010 2011

BASIC Bank

Prime Bank

Dhaka Bank

0

2000

4000

6000

8000

10000

12000

14000

16000

2006 2007 2008 2009 2010 2011

Import (Million Tk.)



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Chart 4.3: Amount of Guarantee

Amount of Garments increased as increase the number of Garments which is shownas chart 4.3. It is increased by 30 percent in 2011 as compare in the year 2010.

4 .3.2 Documentary Credit or L/C

Documentary credit is written undertaking given by a Bank ( Issuing Bank, OpeningBank ) to a seller ( Beneficiary, Exporter ) at the request and on the instruction of theBuyer ( Applicant, Importer ) to pay either at sight or at a determinable future date, astated sum of money against stipulated documents and fulfillment of all the termsand condition in the D/C. It is most suitable on the flowing circumstances:

When the importer is not well known, the exporter selling on credit termsmay have importers promise of payments backs by a buyer Banker.

On the other hand, the importer may not wish to pay the exporter until it isreasonably certain that the merchandise has been shipped in the goodcondition. A D/C in this case, can satisfy both the exporter and the importer.

0

200

400

600

800

1000

1200

1400

2006 2007 2008 2009 2010 2011

Garments (Million ok TK)



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4.3.2.1 Var ious steps in the operation of Documentary Credit

The importer and exporter have made a contract before a L/C is issued. Importer applies for a letter of credit from his issuing Bank. Issuing Bank opensa L/C, which is channeled through its overseas correspondent

Bank, known as advising Bank.g Advising Bank informs the exporter of the arrival of the L/C. Exporter ships the goods to the importer or other designated place as stipulated in the

L/C.

Diagram 4.4: Steps in D/C

Documents are sent to issuing Bank for reimbursement or payment. Issuing Bank release documents to importers when the letter makes payment to the

former or against the letter trust receipt facility.

Importer takes delivery of goods upon presenting on the transport documents.

COTRACT ,

IMPORTERBUYER -

APPLICANT

EXPORTERSELLER -

BENIFICIARY

SHIPGOODS

TAKEDELEVERY

GOODS

ISSUING BANK

L/C

ADVISING,CONFIRMING,NE

GOTIATINGBANK

NEGOTIATION OF

EXPORTAPPLY L/C

PREPAREAND PASS

DOCUMENT

ADVISEL/C

RELEASEDOCUMENTS

AGAINSTCASH

SENDDOCUMENT

MAKEPAYMENT



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4.3.2.2 Different types of documentary credi t or L /C :

1.Red clause credit

A red clause credit is a special type of credit with a clause inserted which authorizesthe advising or confirming Bank to make advances to the Beneficiary before

presentation of the documents.

In other wards, it is a pre- shipment finance in the form of a loan the advising /confirming Bank provides to the beneficiary, with payment of principle and interestGuaranteed by the issuing Bank of the client.

Possible risk in issuing a Red Clause credit:

Exporter may use the advance for other purpose. Documents presented from the exporter may have discrepancies

unacceptable to the importer.

2.Revolving Credit

A revolving credit is a credit, which provide for the amount of the credit to berenewed automatically after use without the need to renew the credit every time. ARevolving credit ―With respect to time‖ can be cumulative or non – cumulative.

It can be renewed with respect to either: Time Amount (i,e total value of the credit)

3.Transferable Letter of Credit

A Transferable letter of credit, which can be transferred in whole or in part by theoriginal beneficiary to one or more ― Second Beneficiaries‖ . It is normally used whenthe first beneficiary does not supply the goods himself, but acts as a middleman

between the supplier and ultimate buyer.

4.Standby CreditA standby credit is a guarantee type of documentary credit. It might in many formsuch as pure loan forms, bid bond and performance guarantee form etc

5.Back To Back Credit When beneficiary receives a documentary credit which is not transferable, and he cannot furnish the goods himself, he may arrange with the Banker to issue a second credit(―which is known as Back to Back L/C‖) to a supplier to supply the goods.

The Bank issuing Back to Back Credit will obtain repayment through the mastercredit which is deposited to the issuing Bank of the Back to Back Credit



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FOREIGN COUNTRY BANGLADESH

Diagram 4.5: Shows the Back to Back Credit Procedure

6. Standby CreditA standby credit is a guarantee type of documentary credit. It might in many formsuch as pure loan forms, bid bond and performance guarantee form etc.

7.Confirmed CreditIf a letter of credit is confirmed by a Bank (The advising Bank), this mean that, inaddition to the definite undertaking to the issuing to honor beneficiary‘s draft, theadvising Bank also makes it‘s a promise to pay the beneficiary.

ULTIMATE

BUYERAPPLICA NT L/C

MASTERL/C

ISSUINGBANK

ADVISINGBANK

MIDDLEMANBENIFICIARYOF MASTER

L/CAPPLICANT OF

B/B L/C

B/B L/CISSUING

BANK

ADVISINGBANK/NEGOTIATING

BANK

SUPPLIERBENIFICIARY

OF B.B L/C



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4.3.2.3. Stage to a documentar y Credit(A) Issuance of L/C(B) Execution of Amendment(C) Advising Letter Of Credit(D) Confirming Letter OF Credit(E) Advising Amendment(F) Negotiation(G) The process include following:

At negotiating BankAt issuing Bank

BASIC Bank Banks in beneficiary locate

Di agram 4.6: BASI C involvement in D /C

ISSUING BANK

ADVING BANK

CONFIRMING BANK

CORRESPONENT BANK

NEGOTIATING BANK

BENIFICIARY

REIMBURSEMENT BANK



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4.3.2.4 Advantages and Disadvantages of Documentary Credit

DOCUMENTARY CREDIT

Advantages Disadvantages

IMPORTER * An importer can be assured theexporter has complied with certain

steams and conditions as specified inthe D/C before payment.* He can insist of shipment of goods

with in a certain time by stipulating alatest shipment date.

* He can have export advice fromhis Banker as to the D/C terms.

* He can ask for financialassistance from his Banker such asT/R.

* Protection offered by DCP500.

* Sin ce Banks deals in documentonl y : Goods may not be the sameas these specif ied in the credit.

* I ssui ng Bank are obli gated topay even th rough the condi tionsof goods may be poor.

* D/C commission are r elati velycostly.

* L in e of credit or appli cationis necessary before an importercan open an D /C, th is may causeextr a inconveni ence and is timeconsuming.

EXPORTER * The risk of non – payment islower provided he complies withD/C terms and conditi on.

* I t is a safe method throughwhich to obtain prompt paymentafter shipment.

* The expor ter can have expor tadvice fr om hi s Banker.

* Th e expor ter al so can seekfinancial assistance from hisBanker before the buyer makespayment, such as negotiation ofexpor t Bi lls advance etc.

* I t is comparatively costly.* Sometimes, the terms and

condition can not be fulfilledsuch as unreasonable shipmentdate and expir y date, adding on

D/C the clause of “ Restrictionof a designated vessel to beinformed by D/C amendment “.

* Th e goods are shi pped beforereceiving payment; So it is not100% safe.



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4.4 EXPORT Bills

They deal with incoming L/Cs from various Banks. BASIC usually serves as an advisingBank; but sometimes at request it also serves as confirming and negotiating Bank.


Chart 4.7: Expor t amount i n other Banks

Chart 3.7 shows the export amount in other Banks (2010 and 2011).

This department has to verify L/Cs. As a confirming Bank, BASIC takes responsibility overthe issuing Bank. If the issuing Bank does not pay the beneficiary then BASIC has to as anadvising Bank its job is to verify the L/C, and if it passes their checklist ; Advise it. If alldocuments are in accordance with the L/C then payment can be authorized.


Chart 3.8: Export

Chart 4.8 shows the increasing export in million taka over time supported by BASIC Bank

0

5000

10000

15000

20000

25000

30000

2010 2011

BASIC Bank

Prime BankDhaka Bank

0

2000

4000

6000

8000

10000

12000

2007 2008 2009 2010 2011

Export



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4.4.1. Export fi nancing

Pre – shi pment credit

Post – shi pment cr edit

Financing of exports constitutes an important part of Bank activities. The exporter needsfinance at various stages; some at the Pre – shipment stage and the other of the post – shipment stage.

4.4.1.1. Pre – shi pment credit

Pre – shipment credit, as the name suggest, is given to finance the Activities of anexporter prior to the actual shipment of good. Pre – shipment credit is essentially asshort term credit and liquidated by negotiation or purchase of export bills covering themerchandise. Generally, the Bank grants pre – shipment credit against irrevocable,confirmed, unrestricted letter of credit received by an exporter from an overseas

buyer.

Pre – shipment credit given under the foll owing arr angement:

1. Cash credit against hypothecation:Under these arrangements a credit is sanctioned againsthypothecation of the raw materials or finished goods intended for export.

2. Cash credit against pledge:

Not infrequently, a cash credit limit is sanctioned against pledge ofexportable goods or raw materials.

3. Cash credit against Trust Receipt:

Under this arrangement credit limit is sanctioned against trust receipt.

4. Packing credit:

This facility is generally extended when the goods become ready for theshipment for a very short period. Packing credit is given tothe exporter against the security of railway receipt, steamers receipts etc.



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5. Back to Back Letter of Credit:

Under this arrangement the Bank finances an export by opening a letter ofcredit on behalf of the exporter who has received a letter of credit from theoverseas buyer but is not the actual manufacturers of producer of theexportable goods.

6. Advance under Red clause Letter of Credit:

Under the red clause Letter of Credit, the Bank provides advance to theexporter prior to shipment under the authority of the opening Bank.

Procedure for sanction of pre – shipment f inance:

The following are some of the points that must be borne in mind for this purpose :

1. Export Letter of Credit should from a reputable Bank abroad whose status has to be ascertained. The letter of credit should be irrevocable, unrestricted, and validand preferably confirmed.

2. Expiry date of letter of credit should be properly recorded in the book.

3. The credit worthiness of the exporter and his exporter performance are to beinvariably ascertained.

4. The period for which the credit is sanctioned should be clearly mentioned.

5. Incase of pledge ―Bankers effective control should be mentioned―.

6. Charges documents and other necessary documents as stipulated in the sanction

letter should be properly obtained.

7. Guarantee / Policies should be obtained under the export credit schemeadministered by Insurance Company.



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4.4.1.2. Post Shipment Cr edit

Post – shipment credit is given to the exporter by Banks after the actual shipment ofgoods. The necessity for post shipment credit arises because the exporters who haveshipped the goods have to wait for a long receiving payment for the overseas buyers;the period of waiting depends on the terms of payment. The exporter needs funds tocarry on his normal export activities.

BASIC also finances the export at post – shipment stage on verification of the creditworthiness and soundness of both the buyers and the seller by preparing applicationfor limit (AFL).

1. Negotiating documents under letter of credit

The document generally include

(a) Bill of exchange or Draft(b) Bill of lading(c) Insurance Policy(d) Indent / Proforma Invoice(e) Invoice(f) Certificate of origin(g) Inspection certificate(h) Packing list(i) Weight list and(j) Any other documents specially called for in the letter of credit.

2. Purchase of DP and DA bills

The provision of finance by way of negotiation of documents against payment (DP)and documents against acceptance (DA) bills is generally made in favor of theexporter who have been given bill purchase limit.

The Bank should obtain instruction from the drawer of the bill covering the followingaspects:

Documents against payment or acceptance Instruction to protest

3. Advance Against Bills for collection:

The Bank generally accepts bills for collection of proceeds when they are not drawnunder a letter of credit or when the documents, even through drawn against in L/Cs

contains some discrepancies



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4.4.2. Operating procedur e

1. Telex / Swift Messages:

The procedures are as follows according to the system:

The following Telex and SWIFT Messages to be received from theRegister:

1. Export L/Cs2. Amendments3. Other messages:

Note:a. For unauthenticated messages telex is to be sent to our

correspondent for authentication.b. Some messages are to be sent to local Bank for test

authentication.c. Bills and L/C related messages to be filled in the

respective fill.

2.Advising:


Take reference for Telex, SWIFT and mail L/Cs and amendments from theL/C register.

Fill up L/C checklist. Insert L/Cs and amendments in the system. Making photocopy of all messages. Mail outside Dhaka‘s L/C and amendments by courier and pack mail.

3. Document Mailing


Type bill schedule. Endorse bill of exchange and shipping documents. Endorse in L/Cs. Photocopy of the documents. Shorts Bills. Mail clients information



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4.4.3 Methods of payment in export sales

The following methods of payment are ranked in the order of measuring risk to the exporter.In other wards, they are increasingly unfavorable to the exporter but favored by the importer.

A. Cash in advance

B. Documentary credit or L/C( note : this already explained above the bills import)

C. Documentary collection( note : this defined to next section)

D. Open document

A. Cash in advance

Cash in advance gives exporter the greatest protection because exportereither before shipment or upon arrival of the goods receives of payment.

Sometimes exchange controls of the importers country may cause payment delays oreven prevent method it most suitable.

1. Pays exporter before exporter makesDelivery of goods

2. Delivery of goods upon receipt ofPayment

Di agram 3.9: Cash i n Advance

B. Open account

The credit items are arranged between the buyer and the seller, but the seller has littleevidence of the importers obligation to pay a certain amount at the certain date. This

payment method is, therefore, risky for the seller.

IMPORTERBUYER

DRAWEE

EXPORTERSELLER

DRAWER



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Chapter 4: Foreign Trade Activities of BAS

Diagram 3.10 shows open account procedure

1. Exporters ships the goods before being paid

2. Importer makes payment uponReceipt of goods

Di agram 4.10: Open Account

Although the payment method bears a higher risk for seller, open accounts sales have greatlyexpanded due to the major increase in international trade, and the seller‘s eager to majorexport volume.A comparative statement of the methods of payment is given below with the classification ofrisk category and merits and demerits of each method:

Method Risk Chief advantages Chief disadvantagesCash in advance L No credit extension is

required.Can limit sales potentialdisturb some potential

customer.Sight draft M/L Retains control and title;

Ensured payment before goods are delivered.

If customer does not orcannot accept goods, goodsremains at port of entry andno payment is due.

Letter of credit Irrevocable Revocable

M M/H

Bank accepts theresponsibility to pay; paymentupon presentation of papers.

If revocable, terms canchange during contractweek.

Time draft M/H

Lowers customer resistanceby allowing extended

payment.

Same as sight draft, plus goods are delivered before payment is due or received.

Consignment sales M/H Facilities delivery; Lowerscustomer resistance.

Capital tied up until sales;must establish distributionscredit worthiness; need

political countries; increasedrisk from currency controls.

Open account H Simplified procedure; Nocustomer resistance.

High risk; Seller must finance production;increased risk from currencycontrols.

* L: Low risk ; M: Medium risk ; H: High risk

IMPORTERBUYER

DRAWEE

EXPORTERSELLER

DRAWER



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4.5 Collection

Collection are a method of settling the monitory side of international Trade transactions in both goods and services. Where goods are Involved, the documents allowing the buyer totake delivery of these Goods will be routed through Banks in the exporters and importersCountries.

Chart 4.11 Bi ll s for Collection


Chart 4.11 shows that the total amount of bill for collection over the year. It is increased very sharply growth rate during the 2001 to 2005.

There are two types of collection .

1. Documentary Collection

2. Clean Collection

The first type is documentary collection, which means collection of:

Financial documents and commercial documents. Commercial documents only.

The another type is clean collection. It consists of one or more bills of exchange or promissory notes, for obtaining cash. Clean collection requires no other commercialdocuments to be attached.

00.5

11.5

22.5

33.5

4

4.5

2007 2008 2009 2010 2011

Bill for Collection



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Please refer to the diagram on 4.12 for an explanation ofvarious steps in the operation of the collection: -

Diagram 4.12 shows the collection procedure

1. Goods shipped to buyer

4.Present 5. Makes payment or 7. Pays exportdocument accepts draft

for payment 2. ForwardDocuments

6. Sent payment

3. Forward Documents Forward Documents

Diagram 4.12: Collection

4.5.1 Documentary col lection

These collection entails the use of commercial documentation, they are concernedwith goods and, although not obliged, Bank frequently take steps to protect the goodsin their customers interests.

The payment instruction in a documentary collection is usually a bill of exchange,which is drawn by exporter (Seller) on the importer (buyer)

The bill of exchange that can be drawn is the following two types:

1. Sight bill : A bill of exchange drawn by the drawer (exporter) at sight for immediate payment.2. Term bill : (usance bill) A bill of exchange drawn by the drawer (exporter) and

provides times for the drawer to pay at a fixed or determinable future date, such as 30days sight.

PRESENTINGBANK

EXPORTERSELLER

PRINCIPLE

IMPORTERBUYER

DRAWEE

COLLECTINGBANK

REMITTINGBANK



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4.5.2 Clean Coll ection

Collection, which do not include goods but consist of documentation only, usually a bill of exchange, or occasionally a check, is known as clean collections. They arefrequently used for the settlement of trade on open account and for service rendered,rather than goods supplied. They are very simple for Banks to process since goods arenot directly involved.

The term ―Collection applies‖ to the procedure under which payment to the client fora check, draft or similar instrument is made only after the proceeds have beenreceived from the Drawer. Thus Collection requires special handling.

4.5.3 Advantages and Disadvantages of Clean Col lection

COLLECTIONAdvantages Disadvantages

IMPORTER * For clean collection, buyers

can take possession of thegoods before payment.* For D/A collection, the buyercan inspect and sell the goods

before payment.Terms bill provide the buyerwith a period of credit from theexporter. Hence its liquiditycan improved.

* If he default on an accepted Bill

of exchange (Notwithstanding the poor condition of the goods).Legal action can be taken againsthim.* If he refuse to accept or pay a

bill, pretest by the exporteragainst non – acceptance or theexporter can take non – payment,this can damage the reputation ofthe importer.

EXPORTER

* It is cheaper than D/A.

* A presenting Bank may haveinfluence over the foreign buyer and thus he more able tocollect the payment than anopen account basis.* Exporters may obtain

immediate payment bynegotiation of the bill orapplying for Bank advance.* Exporter can retain controlover the goods D/P.

* Loss of control over goods

under D/A.* No guarantee that buyer will pay because Presenting Banksare to collect the Payment only.* In case of delays or difficulties,an exporter has to bear all the costarising such as demurrage chargesin the importer‘s country.* He has to bear buyer‘s creditrisk and country risk.



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4.6. Banks facilities and Services to Exporter and Importer

4.6.1. Export f acil i ties and Services

Overdraft (O/D): Overdraft are granted to a customer in order to finance hisdaily business requirements and assist his cash flow position.

Bills (Advance): The Bank may agree to offer thus type of finance if thinkingthat the Exporter is reliable

Negotiation of export bills: After the beneficiary has effected shipment, he may

present documents to his Banker for negotiation. Sight bills might be negotiated by the exporter‘s Bank.

Performance Bond: This is a written instrument, issued by a Bank or a suretycompany, stating that the exporter will comply with the terms of the contract withthe buyer, otherwise the buyer will receive compensation for any losses sufferedas a result of the exporter‘s failure to perform under the contract.

Guarantee/Indemnity: Guarantee and Indemnity are Banking service availableto both exporters and importers.

Red clause credit: It is a pre-shipment finance granted to the exporter by and atthe risk of the issuing Bank.

Packing loan: The purpose of packing loan is to help the exporter to buy raw-materials for production or to buy the necessary goods required by the D/C.

Letter of Indemnity: It is a undertaking given by a Bank on behalf of hiscustomer to another Bank. The Bank giving the promise is primarily liable.

Leasing: This is a financial arrangement in which the Banks and their subsidiarycompanies known as lesser of leasing companies hold the title to property orequipment which the customer known as the leases use it.

4.6.2. Import facil i ties and services

A. Overdraft (O/D)

B. Documentary Credit Facility (D/C)

C. Loan against imported merchandise: LAM is an advance to the

importer based on the imported goods as the security.



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D. Trust receipt facility: This is a document executed by a customer whoagrees to hold the goods in trust for and on behalf of the Bank.

E. Shipping Guarantee: A shipping guarantee is an undertaking given by aBank on behalf of his customer to a shipping company to return theoriginal transport documents.

F. Collection

4.7. Remittance

Designing a global Remittance policy,

The task facing International financial executives is to co-ordinate the used of the variousfinancial linkages in a manner consistent with value maximization for the firm as a whole.This tasks require the following four inter-related decisions:

1. How much money (if any) to remit2. When to do so.3. Where to transmit these funds4. Which transfer method(s) to use

A common or shared responsibility with cash development is the custodianship of the volt.Two groups independently monitor the inflow and outflow of financial instruments to andfrom the volt. Bangladesh Bank checks deposits are processed for collection fromBangladesh Bank.


Chart 4.13 shows Remittance in Million taka of BASIC Bank. It is shown that BASIC Banks Remittance business has been increased by steady growth rate during the year 2008 – 2011.

0

5

10

15

20

25

2008 2009 2010 2011

Remittance



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Remittance Department

This Department deals with the basic paying and receiving of funds into the Bank, for theclients. They transfer, or wire money abroad as well as locally through TT or SWIFT, etc..They work very closely with the cash department. They also sell Government bonds to clientsand organizations.

Remittance Department works as an intermediary for clients and actions taken on theiraccounts. Automatic credits and debits are not necessary done, especially in cases ofInternational transactions. They deal with fund transfers both locally and abroad as well.

A principal mode of remitting fund abroad is through SWIFT. Other traditional mode TT,Telex, Mailing of Drafts, and transfer of TCs is also used. In both case of incoming andoutgoing remittances the purpose is to be disclosed. Local fund transfer is also done here,there areas of transfer activities include:

1. Issuance of Pay order2. Salaries3. TT to any where the country4. TT to other parts of the country

4.7.1 Inward Remi ttance

Function in Inward Remittance

Step 1: Fund Received

Step 2: Clarification by

I. Own ClientII. Other Client

III. Foreign Mission and International Bodies

Step 3: If the fund is for own client

I. Check faster accountII. Valid IRC Copy

III. Vat Register CertificateIV. Check the fund accountV. Message transfer date

Step 4: Process the fund



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4.7.2 Outward Remi ttance

Outward Remittance

Bank Condition:Client must have an account in BASIC

Process:1. Travel Mucilaginous2. Document transfer by SWIFT other transaction activities

Types of Transaction (Remittance Department):

1. Govt. Bond Sold2. Govt. Bond interest paid3. Other Bank check collection4. NFCD Open5. NFCD interest paid6. NFCD Encasement7. Credit Advance/Debit Advance8. Outgoing Payment Instruction9. Collection item both local/Foreign10. Incoming Payment Instruction Pay order Installed11. Salary Disbursed12. Foreign Currency Draft Issued13. Correspondence14. Incoming Collection15. Bangladesh Bank Check Collection



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4.8. Core Concept of Foreign Exchange

a. Foreign Exchange Business

In Foreign Exchange Business, the Commodity is Currency, Buying andSelling of any currency against local currency is called Foreign ExchangeBusiness.

According to Bangladesh Bank order 1972, Foreign exchange means foreigncurrency and includes any Instrument drawn, accepted made and issued underclause 13 of section 16 of the Bangladesh Bank order 1972.

b. Foreign Exchange Rate

The rate of exchange is the price of the one currency expressed inters ofanother currency. The rate at which exchange dealer would buy or sell foreignexchange in terms of the domestic currency is known as the rate of exchange.

c. Foreign Exchange Transactions

All transactions related to FOREX are monitored and controlled by theTreasury Department of the Bank. This Department is responsible for

providing all FOREX rate, interest rates. Basically there are two types oftransactions taking place through out of the Bank – spots and forwards.Approximately 95% of all FOREX transactions are spot transactions.

1. Different terms used in foreign exchange

Terminology of foreign exchange market. A foreign exchange rate is the price of onecurrency expressed in terms of another currency.

Spot rate: A spot rate is a rate quoted immediately, for delivery of the currency to the buyer within the working days.

Forward rate: The exchange rate quoted for transaction which called for the deliveryof the currency at future date.

Inter – Bank market: This is a foreign market for commercial Bank‘s only and therate is known as Inter – Bank.



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A F orward E xchange Contract may be either fi xed of option

1. ―Fixed‖ means that performance of the contract may take place on a specified date inthe future.

2. ―Option‖ means that performance of the contract may take place, at the option of thecustomer, on any date before maturity.

Premium and Discount

Forward rate for a currency is quoted as an adjustment to the spot rate. This departmentIs at a either Premium or a Discount. If the forward rate of a currency is more expensive than the spot rate, it is

quoted in premium If the forward rate for a currency is more cheaper than the spot rate, it is quoted

in discount.

Buying rate and Selling rate

Buying rate means the Bank is buying the currency. The customer is selling the

currency to the Bank in this transaction. Selling rate means the Bank is selling the currency. The customer is buying thecurrency to the Bank in this transaction.

Exchange rate is quoted in Buying rate and Selling rate, the difference of the rate isCalled Spread .

2. Relevancy of Foreign Exchange Revenue for BASIC

Revenue generated in Foreign Exchange (FOREX) business has turn out to be animportant element for generating income for BASIC.



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4.9. Factor Affecting Fluctuation In Exchange Rates

M edium and Long -Term Factors:

1. Balance of paymentIf the country suffer from a balance of payment deficit , its currency will depreciate .If, on the other hand, a country experiences balance of payment surplus , its currencywill appreciate .

2. Rate of InflationIf the country suffer from high inflation rate, its currency will depreciate . On the otherhand, if a country experiences a relatively low Inflation rate , its currency will

appreciate.

3. Interest RateThe currency, which gives a relatively high interest rate , will appreciate while thecurrency, which only offer a relatively low interest rate , will depreciate.

Short – Term Factors:

1. Official Intervention2. Hot Money

―Hot Money‖ refers to money, which flows in for speculative purpose. When HotMoney Flows into a country, its currency will appreciate and vice versa. Hot money isa very substantial forces affecting the movement in exchange rate.

4.9.1 Exchange rate in Bangladesh and its function over time

Bangladesh currency is pegged to composite of nine currency. In Bangladesh capitalaccount transaction are regulated even through our currency is made convertible incurrent account of the Balance of Payment in 1993 and therefore our exchange rate istechnically fixed.

The four factors that are usually taken into consideration while determining exchangerate in Bangladesh are given below

Real effective exchange rate (REER has a positive relationship with exchange rate)

Balance of current account (BOCA has a negative relationship with exchange rate)

Foreign Exchange Revenue (FER has a negative relationship with exchange rate

Unofficial exchange rate (UER has a negative relationship with exchange rate).



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4.10. Ways of avoiding Exchange Risk1. Forward exchange contract:

An immediately firm and binding contract For the purchase and sale of a specified quantity At a rate of exchange fixed at a time the contract is made. For delivery at a future time

Types: Contractsa) ―Fixed‖ performance at a specified data in the future

b) ―Option‖ : Performance at any data between two

1. specified date(Note: Option under forward exchange contract should not be mixed up withcurrency option).

2. Currency Option3. Open a foreign currency account

Buy foreign currency and deposit it in a foreign currency account. Any receiptsand payments are to be made from this account so as to avoid any losses in themovement of exchange rate.



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Chapter: 5

Findings, Recommendations & Conclusion



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Chapter: 5

Findings, Recommendations & Conclusion

5.1. FindingsIn recent years, the foreign exchange business of BASIC Bank ltd is increasing at a fasterrate. As a state owned scheduled bank, BASIC Bank Ltd is playing an important role towardthe growth and economic development of Bangladesh. BASIC bank is rendering a stablesupport to the national foreign exchanges business. Although the foreign exchange businessis increasing day by day there are also some obstacles around it which are as follows:

1. One problem relates to technology, the bank must try to adopt newtechnologies. Otherwise the profitability of the bank may hamper.

2. To meet the challenges in the banking industry and to help employees to adaptto the changes and new working condition, training is essential but no suchtraining center has yet been established in BASIC Bank. Moreover, traininggiven to employees is not adequate.

3. Besides, SWIFT is being used in some branches and the head office of the bank for trade finance related operations like documentary credit,documentary collections, fund transfer, guarantee, etc. with optimum security,

but not in all branches.

4. The officers are very helpful to the business men. Some of our business mendo not know exactly the procedures of opening L/C. the officers of BASIC

bank help them properly to execute their business.

5. To make the process easy, bank should give emphasis to use the moderncommunication media like e-mail, fax, internet etc.

6. Modern technical equipment like computer, ups, modem etc. is not sufficientin foreign exchange department, which results in the delay of exchange

process.

7. The data base system of foreign exchange department is not very systematic.Also documentation and filing process of foreign exchange operation is notuser friendly, which sometimes wastes valuable time.

8. Letter of credit (L/C) opening system for the importer is easy. it consumestime and money as well.



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Chapter 5: Finding, Recommendation & Conclusion

5.2. Recommendations

I had the practical exposure in BASIC Bank Ltd. for just twelve weeks, with my littleexperience in the bank in comparison with vast and complex banking system, it is verydifficult for me to recommend. We have observed some shortcomings regarding operationaland other aspects of their banking. On the basis of my observation we would like torecommend the followings:

The branch need to set up well designed IT section by using more updatedtechnology and information.

Adequate on the job training is required for the newly employed personnel.

SWIFT service should be introduced in each and every branch of the bank, whichwill help to smoothen the foreign exchange operations of the bank.

Some officers of the bank are not self motivated. They should be self- motivated by training.

The bank should do more advertisement for attracting new customers.

Bank needs sufficient computer, ups, modem etc for foreign exchange department.

The bank should develop an effective database system to analyze the data offoreign exchange business.

Bank should provide emphasis to make the documentation and filing process offoreign exchange operation user friendly.

Letter of credit L/C opening system for the exporter should be easier.

I think the Management should employ at least few more employee in foreign tradedepartment as I have seen from my practical experience that many customers wait for a longtime for any service as they see that only one concerned official is doing their best to meet therequirements of the customers.



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5: Finding, Recommendation & Conclusion

5.3. Conclusion

BASIC Bank Ltd. is committed to Boost up export, reduce import, raising of Gross DomesticProduct (GDP) and increase employment.

All the branches of BASIC Bank Limited are authorized dealer of Foreign ExchangeBusiness. The authorized dealer motivates the importer to import Raw materials, Fabrics,Frozen fish, jute items, and electronics goods, Accessories, Chemicals, and Vegetable Fatetc.

The import or exports are motivated by the BASIC Bank Limited to the foreign exchange business, particularly to open the letter of credit. A letter of credit offer advantages both tothe importer and exporter. The advantages accruing to either of the parties differ dependingupon the nature of credit opened. There are certain Common benefits accruing from the useof credit as under.

BASIC Bank Limited is playing a vital role in financing import and exports of the country.Without Bank's co-operation, it is not possible to run any business or production activity inthis age. Exports and import need finance in various stages of their activities. Export and

import financing need letter of credit (L/C), payment against documents (PAD), loan againstimported merchandise (LIM) etc. All these facilities are being provided by BASIC BankLimited. For this purpose Bank considers the borrower's business standing, integrity, liabilitywith the bank and term and conditions of the L/C. There is lot of risks involved in foreignexchange business. So, the Basic Bank Limited has to clearly serve the customers from aneutral point and gather the current information about the market.



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Part – ThreeAppended Part

A: Bibliography

I n Text1. ―Foundation of International trade finance‖, KWLUK, The Hong Kong Institute of

Bankers.

2. ―Multinational Business Finance‖ Eiteman, Stonehill and Moffelt. 6 th edition.

3. ―Multinational Financial Management‖, Allan C. Shapiro, 4 th edition.

4.

―Business Finance‖, Prof. M Shahjahan Mina, 3rd

edition.

5. Annual report of Exim Bank, Prime Bank and Dhaka Bank, 2005.

B: Appendices:

On profil e of BASI C Bank

1. BASIC Bank Limited ;Annul Report 2011&2010

2. BASIC Bank policy Guide lines on Foreign Exchange – 2009

3. BASIC Bank Limited Several Booklist

4. BASIC Bank prospectus

Online

1. http://www.basicbanklimited.com/

2. basicbanklimited.com/files/Annual_Report_2011_BASIC_Bank.pdf

3. http://www.basicbanklimited.com/Annual_Report_2010_BASIC_Bank.pdf






Appendix - 01 Bank Performance at a glance

This section deals with performance analysis of BASIC highlighting the certain aspect ofBASIC through chart and the situation of spread, Burden and productivity indicator over thelast five years.

Progress at a glance 2007 2008 2009 2010 2011From the Balance sheet(Million in TK)Authorized Capital 2000 2000 2000 2000 5000Paid-up Capital 1247.4 1309.77 1455.3 964.65 2357.59Reserve & Surplus 1349.17 1672.82 2468.65 2509.78 3124.17Shareholder's Equity 2596.58 2982.59 3923.95 4474.43 5481.76

Fixed Assets 196.11 228.36 232.65 283.12 364.46Total Assets 38773.91 4660.03 54308.31 61569.38 78031.73Deposits 31947.98 38368.23 34501.69 49259.6 62650.73Long-term Debt 1385.81 1708.4 2875.16 2718.46 2788.15Loan & Advances 22263.35 27269.13 29261.53 46341.51 56884.76Placement & Investment 13560.92 15659.03 12244.91 9294.02 13760.82

From the Income Statement(Million Taka)Gross Income 3,549.51 5,060.29 5,162.30 6120.53 8,825.20Gross Expenditure 2458.41 3626.35 3,593.96 4,403.49 6,476.70 Profit before Tax 1091.1 1533.94 1568.34 1717.05 2348.5 Profit after Tax 282.96 549.86 648.85 660.93 976.11 Tax Paid (Cumulative) 2790.98 3538.01 4,225.37 4,948.64 5,987.61

Others (Million Taka) Import Business 21,266.57 27,359.77 33,976.60 42,206 47,087.80 Export Business 16,794.96 22,270.87 19,887.70 23,999 33,061.10

Financial Ratios (Percentage)Capital Adequacy Ratio 12.91 12.04 13.48 9.41 10.13

Capital Fund to Deposit Liabilities 9.23 7.81 11.37 9.08 10.36 Liquid Assets to Deposit Liabilities 49.1 47.7 24.67 12.06 58.01

Loan to Deposit Liabilities 69.69 71.07 84.81 94.08 69.74 Earning Assets to Deposit Liabilities 109.7 114.69 116.44 81.55 114.56Aft T R t A A t 0 83 1 3 1 41 1 24 1 23

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