Posted on 20th Oct 2024 10:57:23 PM Finance Banking and Insurance
1.1 Introduction
Agrani Bank came into being in 1971 with its Head Office in Dhaka through the Bangladesh Bank's (Nationalization) Order 1972 (P. O. No. 26 of 1972) by taking over the assets and liabilities of the erstwhile Habib Bank ltd. and Commercial Bank ltd. respectively operating in the then East Pakistan.
With this change, the customer focus also underwent change which was form selected, 'Class Banking' to mass banking. The newly born country was beset with major economic problems, which included not inheriting a sound banking system due to lack of local entrepreneurial skills this area. The banking infrastructure had to be built from the scratch and services expanded to the rural area to enable wider cross section of the population to avail institutional help and participation the economic activities of the country.
Agrani Bank, being one of the large nationalized commercial banks, is actively participating in the socio-economic development of the country. In order to achieve this objective, it is not only performing commercial banking activities but also extending credit facilities to the deferent poverty alleviation projects in addition to agriculture financing as per guidelines of special agricultural credit program. Out of 872 branches of the Bank, 529 branches are in rural areas through which the bank is administering as many as 29 different programs. The bank has also assisted over 20 NGOs and 30.48 lacs rural farmers, small entrepreneurs and destitute women with an amount of Tk. 1550.38 crores.
In the process of increasing GDP growth rate of the economy, the Bank is extending substantial credit facilities for setting up of different industries. To this context, the export-oriented and other industries of the rural sectors are getting priorities. Keeping in view the challenge of Post-MFA era, Agrani Bank has already given sizeable amount of loans for backward linkage industries.
The authorized capital of the Bank has increased from Tk. 5.00 crores in 1972 to Tk. 800.00 crores in 2004. Paid up capital increased from Tk. 1.00 Crore to Tk. 248.42 crores, deposits increased from Tk. 96.17 crores to Tk. 11742.71 crores, advances increased from Tk. 76.56 crores to Tk. 8931.28 crores and investment increased from Tk. 11.00 crores to Tk. 3150.24 crores, number of Officers increased from 796 to 6770 and staffs increased from 1471 to 5744 during the period 1972 to 2004.
1.2 Organization Structure
Organizational Structure of the office of the general manager, Rajshahi circle consists of general manager, Deputy general manager, Assistant general manager supervise and maintain The administration of Regional office and Take The vital decision Deputy general manager and Assistant general manager and help to take decision. The principal officer maintains the division of Loan. Dept. Recover Dept. legal Dept. Agriculture Dept. Establish Dept. And control Dept. Seven Dept. in the circle office who maintains the above mentioned Dept.
Organization Structure
Agrani Bank, New Market Branch, Rajshahi
Organizational Structure of new market Branch consists of manager, Senior Second office and Some officer who maintain the Dept. of cash deposit, Advance and cash. There are some Junior officer who assist the officer of the respective Dept. Manager supervise of the administration of his branch to operate the branch smoothly.
Clients of Agrani Bank, New Market Branch, Rajshahi
Client of the New market branch consists of service holder, business unit, cookeries, physician and other. Among the client service holder shows the highest number who maintain savings account. Business unit maintain the highest number of current account
According to the Manager of the branch performance of the bank in various banking functions have been satisfactory during the few years.
1.3 Functions of the Cash Department
In this section, we discuss how a check is honored and how cash is collected at the counter. We begin with the formalities involved in cash payment.
Cash Payments
For convenience, the cash payment (check honoring) procedure in illustrated by a flowchart (exhibit 3).
Cash Receipts
Exhibit 1.4 demonstrates how cash is received at the counter of the bank:
Some observation
The check honoring process appeared to be very lazy. By convention, a check is supposed to be honored by 10 minutes, but in practice it take no less than 20 minutes even at the late banking hours when the rush is thin. The process would be much faster if it were assisted by computers. In the world of the electronic checking facilities, the speed at which checks are honored, here seemed no faster than a snail's pace.
In my opinion, the following factors are responsible for the delay in cash delivery:
i) The staffs are not efficient enough.
ii) The officials hardly care the customers. They think customers are bound to come here because it is a nationalized bank. This attitude of the bankers would threaten the bank's survival if our banking industry were more competitive and exclusively privatized.
1.4 Opening an Account
To open an account an individual has to carry out the following formalities:
Once these formalities are carried out in appropriate manner, the applicant is issued a checkbook and considered as a valid account holder of the bank.
In case of joint accounts the applicant must furnish the following information:
i. Name of the parties who will operate the account and sign checks.
ii. At the event of death of either or any of the account holder how the balance will be paid and to whom the securities (if any) will be delivered. The documentary and the special instruction must be signed by all the joint account holders to signify their consent.
iii. If the client is a private or public limited company, the company has to give a description about the type of the account and the operation of the account. Specimen signature of the people who are authorized to open and operate the account and the source of their authority.
1.5 Closing an Account
In order to close an account the holder has to place written application. After getting application, the bank will deduct service charge at an amount of 25 and 50 against savings and current deposit respectively as closing fee from the balance and the rest of the money is given to the customer.
1.6 The function of Deposit Mobilization
Deposit is the lifeblood of a commercial bank. Exhibit 5 demonstrates various deposit and savings schemes of the Agrani Bank, New Market Branch.
Demand Deposits
These are checkable deposit i.e. withdrawable without notice. Check can be drawn on these A/C i.e. current deposits. Savings deposits may be included in this group.
Current Accounts
Current accounts are normally opened for businessman depositors can with draw or deposit as many times as they need. In Agrani Bank, initial deposit is Tk. 1000 and balance must be maintained at least at this amount. No interest is paid on this account.
Savings Accounts
In this account the depositors can deposit money in their account as many times they want but in a week they are allowed to withdraw only 25% of the balance or Tk. 15000 at a time. If any depositor wants to withdraw more than twice in a week or an amount more than 25% of the balance or more than Tk. 15000 at a time, in a week, the customer has to notice the bank at least 7 days before; otherwise the customer will receive no interest for the month. Agrani Bank gives interest @ 7.5% per annum. The required initial deposit is Tk. 50 and this amount must be left in order to keep the account alive. It may be mentioned here 15% of savings deposit is treated demand deposit.
Time Deposit
Time deposits are not repayable on demand. These are repayable after the expiry of certain period, which ordinarily varies from 3 months to 5 years. The rate of interest on these deposits is usually high.
Money at Call and short Notice
This account is as like as current but it is opened only for business organization. In this case, a notice has to be given prior to 7,15 or 30 days from withdrawing money, by the customer. The bank gives interest @ 5.5% per annum.
Fixed Deposit
Fixed deposits are the deposits, which are accepted for a fixed period of time. This type of deposit is very popular to the fixed income earners. Bank maintains different term of this deposit and interest rate varies with the variation of term. Minimum term is 3 months and maximum term is unlimited. The interest rate is limited between 8% and 9.5% per annum in this account.
Deposit pension schemes (DPS)
DPS is as like as fixed deposit but its term is 10 to 20 years. The service holders are the beneficiaries of this DPS. It is a Govt. program. The bank gives interest @ 15% per annum and money can be withdrawn at a time or in installment after maturity. This program has been closed now. If any customer fails to deposits his installments through a year then the contract will be inviolate and he will get interest as like as saving A/C.
Agrani Bank Pension Scheme (APS)
Now DPS program has been classed by the decision of the authority of the state bank. Its term is 5 and 10 years. The rate of interest for 5-year term is 10% and for 10-years term is 12%. Money can be withdrawn at a time or in installment after maturity. If any customer fails to deposit his installment through a year then the contract will be invalid and he will get interest as like as savings A/C.
1.7 Rate of interest for different types of deposit
1. Time Deposit (FDR)
3-6 months deposit 5.25%
6 months - 1 year deposit 5.50%
1-2 year deposit 6.00%
2 year and above 6.25%
2. Short Notice Time Deposit
At least 7 days notice 2%
3. Deposit Pension Scheme (DPS) 15%
4. Agrani Bank Pension Scheme (APS)
10 years period 12%
5 years period 10%
5. Savings Deposit 3.50%
(Same ratio for the urban and village)
1.8 Customer Services
Money Transfer
Agrani Bank earns a huge amount of money by selling several customer services. The New Market Branch of the bank offers the following services.
Instruments of Money Transfer
Demand Draft (DD)
DD is the most popular instrument of remitting fund. It is an order to pay money drawn by one branch of a bank upon another branch of the same bank for a particular sum of money which is payable to order and demand. The commission for DD is Tk. 15 of Tk. 1000 to Tk. 10,000 and additional Tk. 1.5 for every thousand over Tk. 10,000.
Mail Transfer
MT is another means of remitting fund and it is similar to DD except that in case of MT, the customer (who is sending the money) is not provided any papers but a receipt. The bank sends the MT papers under its own responsibility to the respective branch. The commission is Tk. 1.5 per Tk. 1000 and postal charge of Tk. 10 for every issue.
Payment Order
It is a written document. This PO can be encased on that branch from where it is issued. Several supplier organization use this PO and here no account is needed to open with the bank. It is issued locally. The contractors and suppliers use this instrument generally.
Telegraphic Transfer (TT)
It is considered as the quickest mode of remittance. In this case the issuing branch sends a message telegraphically to credit the specified amount to the beneficiary through his account maintained with them or by issuing T.T.T.O if account is not maintained by the beneficiary. Telegraphic message may be coded or independence message but must be tested. Paying branch will decode the TT being satisfied on the contents will make payment by debits to issuing branch entering the TT into TT payable register and preparing a credit voucher for credit to the payees account. But for big amount of TT or in case of any doubt, confirmation must be obtained before making payment.
Collection of Customers' Bills
Customers can liquidate a check drawn upon another bank. Commercial banks perform this function for customers without any charge. The collection procedure is shown in the flowchart below.
1.9 Other Customer Services
Other customer services of this branch include. The bank does not receive any fees for these services.
Collection of electricity bills for PDB
a. Collection of telephone bills for T & T.
b. Collection of water bills for the Rajshahi City Corporation.
1.10 Loan Portfolio
Loan portfolio of the Agrani Bank, New Market branch, Rajshahi comprises the following loans and advances associated with their respective lending rates.
It should be mentioned that the small loan recovery rate at this branch ranges from 70 percent to 75 percent.
1.11 Lending Risk Analysis (LRA)
Lending Risk Analysis (LRA) by Agrani bankNew Market Branch, Rajshahi
Lending Risk Analyzing (LRA) is simply a loan-processing manual. By going through this manual, the Agrani Bank can assess the credit worthiness of its prospective borrowers. Therefore, LRA is such an instrument, which is definitely and directly related with lending information to analyze the borrowers' financial, marketing, managerial and organizational aspects subjectively and objectively. It also facilitates the analyst to know the security risk of the credit. LRA, first of all, has divided the various risks into two groups namely, Business Risk and Security Risk.
Agrani Bank generally follows the following steps:
1. Collect all data available from published sources
2. Visit company to collect company specific data that is not published
3. Interview management to assess their ability and integrity
4. Investigate the security
5. Have an impression (by the credits officer) of company's operations.
After collecting the required information data
1. Prepare financial spreadsheet which includes Balance Sheet, Income Statement, Cash Flow statement and Financial Ratios on the basis of at least 3 years Financial Statements of the borrowers
2. Analysis of Spreadsheet ratios
3. Prepare supplementary questions for company management, if necessary.
CONTENTS
CHAPTER ONE : INTRODUCTION
1.1 Introduction
1.2 Organization Structure
1.3 Function of the Cash Department
1.4 Opening an Account
1.5 Closing an Account
1.6 The function of Deposit Mobilization
1.7 Rate of interest for different types of deposit
1.8 Customer Services
1.9 Other Customer Services
1.10 Loan Portfolio
1.11 Lending Risk Analysis (LRA)
CHAPTER TWO : SPECIAL BANKING
2.1 Definition of Cash Credit
2.2 Classification
2.3 Types of Account
a) Fixed Deposit Account
b) Short Term Deposit Account
c) Deposit Pension Scheme (DPS)
d) Sonali Bank Special Deposit & Pension Scheme
e) Savings Deposit Account
f) Current Deposit Account
g) Call Deposit Account
h) Sundry Deposit Account
2.4 Account Opening
a) Procedures of Opening a CD Account
b) Procedures of Opening a SD Account
2.5 Closing an Account
2.6 When Bank closes an account
2.7 General Banking Function of Cash department
2.8 Cash Payment
2.9 Cash Receipt
2.10 Check Dishonor by Bank
2.11 Profit and Loss Ledger
2.12 Statement of Affairs
2.13 Check Clearing through Clearing House
2.14 Remittance
2.15 Types of Remittance
2.16 Customer Services
CHAPTER THREE : LOAN AND ADVANCE
3.1 Introduction
3.2 Types of Loans and Advances
a) Cash credit
b) Overdraft
c) Industrial credit
d) Staff Loan
e) Small Loan
f) Agriculture Loan
CHAPTER FOUR : DEPOSIT BEHAVIOUR
4.1 Introduction
4.2 Types of Deposit by Sonali Bank, Rajshahi
4.3 Medical College Hospital Barnch
4.4 A brief discussion on various types of deposit by the branch
1) Fixed Deposit
a) Characteristics of Fixed Deposit
2) Short Term Deposit
3) Deposit Pension Scheme (DPS)
4) Savings Deposit
a) Characteristics of Savings Deposit
5) Current Deposit
a) Characteristics of Current Deposit
6) Call Deposit
7) Sundry Deposit
4.5 Interest rate of Deposit
4.6 Deposit Mixed Position at the year 2002
4.7 Trend of Total Deposit
4.8 Account wise Total Deposit
4.9 Deposit Position of Fixed Deposit Account
4.10 Deposit Position of Short Term Deposit Account
4.11 Deposit Position of Deposit Pension Scheme
4.12 Deposit Position of Sonali Bank Special Deposit & Pension Scheme
4.13 Deposit Position of Savings Deposit Account
4.14 Deposit Position of Current Account
4.15 Deposit Position of Call Deposit Account
4.16 An Observation : Change in Number of Deposit Accounts
4.17 Application
4.18 Concluding Remarks
Bibliography
Internship, Report, Cash, Credit, Case, Study, Agrani, Bank, Ltd, New, Market, Branch, Rajshahi, Bangladesh, General, Banking, Opening, Closing, Account, Customer, Services, Loan, Portfolio, Lending, Risk, Analysis, Cash, Credit, Fixed, Short, Term, Deposit, Pension, Scheme, DPS, Savings, Current, Cash, Payment, Receipt, Staff
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