foreign exchange activities of sibl

_______________________________________________________

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PREPARED FOR: Taslima Akter, Lecturer, School of Business, Stamford University- Bangladesh,

PREPARED BY: Md. Akhlakuzzaman ID: B.B.A 3rd Batch B.B.A (Marketing)

January 27, 2007

Taslima Akter,

Lecturer,

School of Business,

Stamford University- Bangladesh,

Re: Submission of internship report on “Enhance banking efficiency by

the foreign exchange activities - The case of Social Investment Bank Ltd.”

Dear Sir,

With due respect, I would like to inform you that I am delighted to present my

internship report on “Enhance banking efficiency by the foreign exchange

activities - The case of Social Investment Bank Ltd.” as a partial requirement of

the course “ORE-102 Professional Orientation”. I employed my best effort for

preparing this report paper.

This report gives me an exceptional experience that will be useful in the future.

I sincerely hope this report will be up to your expectations.

Your kind acceptance and any type of appreciation would surely inspire me. I

will be always available for any supplementary interpretation or clarification if

required.

Sincerely Yours

________________

(Razib Hossain)

Table of Content

Preface i

Acknowledgement ii

Executive summary iii

Part-A

1.0 Introduction 1

1.1 Abstract 2

1.2 Rational of the study 3

1.3 Scope of the study 3

1.4 Objective of the study 4

1.5 Methodology 4

1.6. Research design for questionnaire survey 5

1.6.1 Design Strategy 5

1.6.2 Data Collection Design 5

1.6.3 Sampling Design 5

1.6.4 Software used 6

1.7 Sources of data 6

1.8 Limitations of the study 7

Part-B

2.0 Organization 8

2.1 Introduction 9

2.2 Historical background of SIBL 10

2.3 Objectives & goals of SIBL 11

2.4 Functions of SIBL 12

2.5 Business philosophy of SIBL 12

2.6 Board of directors 13

2.7 The ownership pattern 13

2.8 Human resource 14

2.9 Training institute 14

2.10 Foreign correspondents of SIBL 15

2.11 Overseas operations of SIBL 15

2.12 Some products & services 15

2.13 Rural credit program 16

2.14 Performance of SIBL by the social services 16

2.15 Five years performance at a glance 17

2.16 Balance sheet as on 31th December, 2003 18

Part-C

3.0 Branch operation 21

3.1 General banking 22

3.1.1 Account Opening & Clearing 22

3.1.1.1 Types of Account 22

3.1.1.2 Procedure & rules to open a new account 25

3.1.1.3 Clearing the cheque: 29

3.1.2 Local Remittance 32

3.1.2.1 Telegraph Transfer (TT) 32

3.1.2.2 Pay order 34

3.1.2.3 Pay slip 35

3.1.2.4 Demand Draft 35

3.1.3 Deposit 37

3.1.4 Accounts Department 37

3.1.5 Advance 38

3.1.5.1 Allow Loan For Under These Purpose 38

3.1.5.2 Documents to be obtain 39

3.1.5.3 Definition and Explanation of Credit Facilities 39

3.1.5.4 Principles of loan classification and provisioning 42

3.1.5.5 National Housing 43

3.1.5.6 Equity 44

3.1.5.7 Consumer Credit Scheme 44

3.1.6 Cash 45

3.2 Foreign Exchange Banking 46

3.2.1 Foreign Exchange 46

3.2.1.1 Foreign Trade 46

3.2.1.2 Need for Foreign Trade 46

3.2.1.3 Types of foreign trades dealt in banks 47

3.2.1.4 Import 48

3.2.1.5 Export 53

3.2.1.6 Export finance of BTB L/C 58

3.2.1.7 Documents used in foreign trade retailing to bills 61

3.2.1.8 Financial assistance provided by the banks 71

3.2.2 Foreign Remittance 72

3.2.2.1 Western Union 72

3.2.2.2 Traveler’s Cheque 72

3.2.2.3 Endorsement of cash 74

3.2.2.4 Credit Card 74

3.2.2.5 Issue FDD 74

3.2.2.6 Foreign currency account 75

3.2.2.7 Telegraphic Transfer (TT) 76

Part -D

4.0 Customer satisfaction 77

4.1 Need to Satisfy Customers of SIBL 78

4.2 Identifying Customers Need of SIBL 79

4.3 SIBL Should Provide Quality as the core service 79

4.4 Keep Relationship with customers of SIBL 79

4.5 To Satisfy Customers of SIBL 80

Part-E

5.0 Job satisfaction 81

5.1 The importance of job satisfaction to satisfy employee of SIBL 82

5.2 Need to follow Herzberg’s dimensions to satisfy employee of SIBL 83

5.2.1 Company and administrative policies 84

5.2.2 Supervision 84

5.2.3 Salary 84

5.2.4 Interpersonal relations 85

5.2.5 Working conditions 85

5.2.6 Work itself 85

5.2.7 Achievement 86

5.2.8 Recognition 86

5.2.9 Responsibility 86

5.2.10 Advancement 86

5.3 Six factors that can influence job satisfaction of NBL 87

5.3.1 Opportunity 87

5.3.2 Stress 88

5.3.3 Leadership 88

5.4.4 Work standards 89

5.4.5 Fair Reward 89

5.4.6 Adequate authority 89

Part-F

6.0 Online banking 90

6.1 What is online banking? 91

6.2 Origin of online banking 91

6.3 Brick-to-click banks 92

6.4 Virtual banks 92

6.5 SIBL will get advantage from online banking 93

6.6 Feature that can be give in SIBL’s Online Banking 93

Part-G

7.0 SWOT analysis of SIBL 94

7.1 Strength 94

7.2 Weakness 94

7.3 Opportunity 94

7.4 Threat 94

8.0 Findings 95

8.1 Findings From customer satisfaction questionnaire 96

8.2 Findings from job satisfaction questionnaire 99

9.0 Recommendation 102

10.0 Conclusion 104

11.0 Appendices 105

12.0 Bibliography 112

PREFACE

It is needless to say that theoretical knowledge is most pertinent matter for not only a

student but also everybody. It may be help a man to cope up with all spheres. In spite of

practical knowledge has no alternative especially for a MBA Student who will contribute

to the national economy by rendering service in different sectors of the country. We have

now entered a new century, like globalization. The over all banking system in

Bangladesh has been undergoing a period of reaper change and transformation. Stunned

fluctuations of foreign currencies, constantly changing government regulations and socio-

political condition have made banking sectors difficult. Success now Reuters integration

of corporate suction at a global level and rigorous standards for quality, cost control and

promise. Analytical strength and functional knowledge are no longer sufficient

understanding is needed of the political economic and cultural characteristics of the

country as a whole. One must be familiar with advanced information technologies. One

must break away from narrow functional views of jobs and organizations and apply as

functional knowledge and integrated problem solving skills. Keeping in view the above

noted key points I made in this paper and attempt to measure the condition of Social

Investment Bank Limited (SIBL) as a Commercial Bank.

Under the MBA program every student is assigned a topic and each student is tired to

prepare a report on the selected topic. In this respect I was assigned to study on

“Enhance banking efficiency by foreign exchange activities- the case of Social

Investment Bank Ltd."

.

I have tried my level best to cover all significant distensions of the analysis of the topic. I

think my efforts would be meaningful if this serves the purpose.

ACKNOWLEDGEMENT

At first I must express my sincere gratefulness and cordial respect to Taslima Akter,

Lecturer of School of Business, Stamford University Bangladesh for her valuable

advice, thoughtful comments, advice and in-depth perceptions.

I am really thankful to the management of Social Investment Bank Limited for giving

me a chance to coordinate my internship activities in their organization.

I can never forget the unbelievable cooperation of all the officers of Social Investment

Bank Limited, Foreign Exchange Branch. I think that it was impossible for me to know

and finally to make such a descriptive study and a presentable report on such a wide

aspect like banking with only three months without their extending of helping hands.

I would like to pay my greatest honor to Senior Vice President & Manager Mr.

Jalaluddin Ahamed, Senior Assistant Vice President Mr. Ohidur Rahman, Senior

Assistant Vice President Mr. Md. Jahangir Babul for supervise my internship. I would

like to give my heartiest thanks to Mr. Md. Ashraful Habib, Senior Executive Officer

and Mr. Md. Sanaullah, Senior Officer for serve me the valuable documents and papers,

which help me a lot to prepare the report.

EXECUTIVE SUMMARY

Banking sector plays a vital role in the economic development of every country. Bankers

are the custodian and distributors of liquid capital, which is the lifeblood of commercial

and industrial activities. Not only as the custodian of capital, banks also have a significant

contribution in capital formation. By encouraging savings and investment the banks

increase the productivity of resources of the country and thus contribute to general

prosperity.

With the global march in business and commerce we are rapidly pacing our standard of

living. Also it is true that if we do not keep pace with the ongoing world economic

revolution it would be very difficult for us to be developed. This is why we need to strive

for growth. We need to grow inside our country and then should try cross the national

boundary with the surplus or excess production for foreign currency.

For this government should encourage the entrepreneurs and all other industrialists to

produce exportable and quality products by providing necessarily financial assistance.

This increased foreign business actually fixes the index of our reserve. More imports to

export lowers the national reserve for currency and vice versa.

The Social Investment Bank Limited is a scheduled commercial bank registered under the

Bangladesh Bank and is doing all kinds of banking activities since the last two decades.

The bank covers a wide range of banking and functional activities to individuals, firms,

corporate bodies and other multinational agencies.

I have dared to prepare this report as an obligation to draw an end to my internship

activities. At the very beginning of my internship I talked to my supervisor in order to set

the track of my proceedings in the bank for the period. As per the suggestions of my

supervisor I decided to prepare my report on the “Enhance banking efficiency by foreign

exchange activities- the case of Social Investment Bank Ltd.”. To have brief knowledge

on the bank departments I worked for six weeks in both the General Banking and

Advance Department. For the rest six weeks I worked in the Foreign Exchange

Department.

For take the decision about the prospect of SIBL I will depend on the benefits provided to

customers by SIBL and the procedure to provide this benefits. To know about the

customers opinion and to take their suggestion I survey a questionnaire and also I survey

a questionnaire for take employee’s opinion and their suggestion about themselves.

Which benefits need to add to customers and procedure need to add or change I suggest

for that. As well as I suggest how to motivate the employees more.

While preparing this report I have devoted my utmost effort to give it a practical shape of

the bankers daily doings. For preparing this report actually I did not search for any

special data source. I tried always to reflect my gathered practical sense here.

1.1 ABSTRACT

Internship is an integral part of MBA (Masters of Business Administration) program in

Stamford University-Bangladesh and it contains 6 credits out of 54 credits. This

program is actually a juncture of academic and professional life dealings. It is for to get

some experience of practical work environment and also be familiar with that. It is like

job also.

For coordinating my internship I have placed in Social Investment Bank Limited,

Foreign Exchange, Branch Dhaka. There are 09 sections in Foreign Exchange branch.

They are 1) Clearing 2) Local remittance 3) Advance 4) Foreign remittance 5) Foreign

exchange 6) Cash 7) Deposit 8) Accounts 9) Dispatch. Accordingly I will work all of

the sections. I will devoted my utmost effort and attention to learn the banker’s

functions. After completion of the internship I will render my all knowledge to present

the report on “Enhance Banking Efficiency by the Foreign Exchange Activities - The

case of Social Investment Bank Ltd.”.

The report divided in to four parts. 1) Organizational part 2) Branch operation part 3)

Customer satisfaction part and 4) Employee satisfaction part. In the organizational part

I will incorporate a brief overview of the organizations background history, functions,

business philosophy, ownership pattern, foreign correspondents and overseas

operations and benefits provided to customers by the organization. Branch operation

part will describe the product and service provides to customers by a branch. Customer

satisfaction part will find out how can be satisfied the customers of SIBL as a service

oriented organization and job satisfaction part will find out how can be satisfied the

employees of SIBL as they are main character of bank.

1.2 RATIONALE OF THE STUDY

The economic development of our country mainly depend up the efficiency of the

banking system which can be judged from its working results is so far as, whether the

bankers have been able to read the economic situation properly and are successful in

selecting the promising industrial sectors. Our increased demand for updated

necessaries require importing merchandise from outside. Again whenever we strive

to grow, need to move with positive balance reserve upwards. This is possible if we

produce quality products and make them sale outside the country with strong

confidence. The government of our country and the central bank i.e., the Bangladesh

Bank has decided to extend considerable help in every respect to business people.

Like other nationalized and non-nationalized commercial banks the Social

Investment Bank Ltd. also provide services to the businessmen.

1.3 SCOPE OF THE STUDY

The field of my study is the operation of foreign exchange branch of Social

Investment Bank Limited. For conducting this study an overall knowledge of the total

banking system will necessary because the departments of banking are linked with

each other due to some partial proceedings. The scope of the organizational part

covers the organizational structure, background, objective, function,

departmentalization and business performance of Social Investment Bank limited as a

whole. The main part covers the operational scenario of a branch of Social Investment

Bank. This refers that how the bank help the customers in general banking and foreign

exchange banking. For customer satisfaction and employee satisfaction I have done

questionnaire survey. Based on questionnaire survey I will decided whether they are

satisfied or not and to satisfied them what can be do.

1.4 OBJECTIVE OF THE STUDY

The objective of the Internship is to expose the students in the organizational work

situation and this report is an end result of such organizational involvement. The primary

objective of this report is to explain the real life scenarios in the organizational working

environment. But the objective behind this study may something be broader. Thus the

objectives of the study are:

►To apply theoretical knowledge in the practical field.

►To find out facilities, that’s are provide by Social Investment Bank to its customers.

►How branch’s are provide that to customers

►The process of work of sections of a branch.

►To analyze the performance of Social Investment Bank.

►Whether customers are satisfied or not with present facilities and their expectations

from Social Investment Bank limited. How can be satisfied them.

►Whether employees are satisfied or not and expectations from Social Investment Bank

limited and how can be satisfied them.

►To have some practical exposures that will be helpful for future career growth.

1.5 METHODOLOGY

The twelve weeks internship program took to work in every department in order to

have an overview of the total banking. My organizational supervisor helped me a lot

while working in every department of the branch. Keeping this view in mind I will

write a descriptive report which will divided in four parts.

1. Organizational Part.

2. Branch operation.

3. Customer satisfaction Part

4. Employee Satisfaction Part

The organizational part of this report composed of benefits provided to customers by

the organization. The branch operation part is very brief functional orientation of the

various departments and sections of the bank. In the branch operation part a

description of various conceptual terms, conditions and process strictly related to

every section and its mechanism sketched and reflect a critical sequential and

procedural presentation of the “Enhance banking efficiency by foreign exchange

activities. Customer satisfaction part will find out whether the customers are satisfied

or not with SIBL’s benefits and working process and the employee satisfaction part

will find out whether employees are satisfied or not by doing job in SIBL.

1.6 RESEARCH DESIGN FOR QUESTIONNAIRE SURVEY

Design Strategy:Type: My research type is almost Explanatory.

Purpose: My purpose to introduce quality service.

Time frame: I am assigned of a three months (during internship period) to do the research work.

Scope: I select customer and employee of foreign exchange branch for my questionnaire survey.

Data Collection Design:I planned to go for both Primary Data and Secondary Data collection.

Sampling Design:

For the sampling design I choose non probability sampling for customer and probability

sampling for employee. Because I don’t know who will be my population in case of

customer, They can be any one, who have account in SIBL or any type of transaction in

SIBL and in case of employee I know who are the employee of foreign exchange branch.

We choose non-random for our judgment. In judgment sampling, personal knowledge

and opinion are used to identify the items from the people that are to be included in the

sample. A sample selected by judgment sampling is based on someone’s about the

people.

The basic idea of sampling is that by selecting some of the elements in a population, we

may draw conclusions about the entire population. A population element is the subject on

which the measurement is being taken. It is the unit of study. There are several reasons

for sampling, including i) Lower cost, ii) Greater accuracy of results, iii) Greater speed of

data collection.

Software used

For analyze the data from survey questionnaire I will use the SPSS software.

1.7 SOURCES OF DATA

For preparing this report data and information were needed and collected from both

primary and secondary sources.

Primary data and information were collected through:

i. Discussing with officials;

ii. Talking with clients;

iii. Personal observation & intelligence;

iv. Working with officials as a helping hand.

Secondary information were collected from the following Sources:

i. Files, records, journals, manuals and publications obtained from library of the

bank.

ii. Different circular issued by the head office and Bangladesh bank.

iii. Annual reports of bank.

iv. Official web site of the Social Investment Bank Ltd.

1.8 LIMITATIONS OF THE STUDY

It is obvious that every study has some limitations. The study I have made is of great

importance and require me huge work. While conducting I had to face a number of

problems. Those limiting factors that hampered my smooth workings in bank and

finally in preparing this report are as follows:

1. The organization maintains strict confidentiality about their financial and other

information. They are afraid of any type of information leakage to their

competitors. So there was always lack appropriate information.

2. Any type of such presentation requires a long time. But I did not have that much

busy time to concentrate on my work. Duration of this study was too short to have a

sound understanding of the overall banking.

3. Scope of my study is so wide that analytical and comprehensive study is not

possible.

4. Lack of sufficient books, papers and periodicals take me go on serious

brainstorming while preparing this report.

5. Some officials were not so much prepared for giving the data which can help to prepare this report.

6. All customers come to bank to do their work and they have time pressure to do that

work. So when I told them to fill the questionnaire, they reply with sorry to me. So I

don’t able to take large sample size to analyze my questionnaire.

7. The study was conducted only on the Foreign Exchange Branch, Motijheel; all

branches’ performance could not be evaluated for time constraints.

2.1 INTRODUCTION

Since the establishment Social Investment Bank Limited has come forward as a private

commercial bank and very encouragely has come forward as the stimulator of economic

activities in the country. The bank has been entrusted with the responsibility of

undertaking various steps related to the development of the country’s commercial,

industrial and agricultural sectors. The banking sector of a country is called the economic

barometer of the country. As a pioneer commercial bank in the private sector in

Bangladesh Social Investment Bank provides considerable financial helps in the business

sector that imports industrial goods and/or exports excess production outside the country

for profit. Thus for imports the Social Investment Bank provides LIM (Loan against

Import Merchandise) and LTR (Loan against Trust Receipt) facility and for exports

provides both pre shipment and post shipment finances. Thus with these bank helps the

prospects in the business sector has increased more than ever before. Competition has

also increased in the commercial arena and obviously it is a symbol economic uplift of

our country.

2.2 HISTORICAL BACKGROUND OF SIBL

Social investment Bank Limited (SIBL) is a banking company registered under the

companies Act 1994 with its head office 15 Dilkusha C/A, Dhaka-1000. The bank

operates as a scheduled bank under a banking license issued by the Bangladesh Bank,

Central Bank of the country. Bank started its operation from 22, November 1995. SIBL is

a capitalized new generating Bank with an authorized capital and paid up capital of Taka

585 million in 2005 and also. 585 million respectively as of December 2004.Currently

the bank has 24 branches of which 12 in Dhaka, 4 in Chittagong, 1 in Syihet, 2 in

Narayanganj, 1 in Sylhet, 1 in Bogra, 1 in Khulna, 1 in Rajsahi, 1 in Sirajgonj. More

branches are planning to be opened soon. The bank undertakes all types of banking

transaction to support the development of trade and commerce in the country. SIBL

services are also available for the entrepreneurs to set up new ventured and BMRE of

industrial units.

To provide clientele services in respect of international trade it has established wide

corresponded banking relationship with local and foreign banks covering major trade and

financial interest home and abroad.

SIBL understands all types of banking transactions to support the development of trade

and commerce of the country. SIBL’s services are also available for the entrepreneurs to

set up new ventures and BMRE of industrial units.

Since the very inception Social Investment Bank Ltd. is working with the philosophy of

serving the nationals as an ideal and unique financial house. Every organization has some

objectives of its own. The prime objective of Social Investment Bank Ltd. is to earn

profit throw undertaking the responsibility of providing financial help for the

development of the country’s commercial and industrial sector.

2.3 OBJECTIVES & GOALS OF SIBL

SIBL is always ready to maintain the highest quality of services by upgrading

banking technology prudence in management and by applying high standard of

business ethics through its established commitment and heritage.

SIBL is committed to ensure its contribution to national economy by

increasing its profitability through professional and disciplined growth strategy for its

customer and by creating corporate culture in international banking arena.

The objective of SIBL is not only to earn profit but also to keep the social

commitment and to ensure its co-operation to the person of all level, to the

businessman, industrialist-specially who are engaged in establishing large scale

industry by consortium and the agro-based export oriented medium & small scale

industries by self inspiration.

SIBL as the first and the largest private bank is committed to continue its

endeavor by rapidly increasing the investment of honorable share holders into assets.

SIBL believes in building up strong based capitalization of the country.

SIBL is committed to continue its activities in the new horizon of business

with a view to developing service oriented industry and culture of morality and its

maintenance in banking.

SIBL has been working from its very beginning to ensure the best use of its

creativity, well disciplined, well managed and perfect growth.

SIBL is always preoccupied to encourage the investors for purchasing its share

by creating the opportunity of long term investment and increasing the value of share

through prosperity as developed day by day.

SIBL is playing a vital role in Socio-economic development o Bangladesh by

way of linkage with rest of the world by developing worldwide network in domestic

and international operations.

MISSION OF SIBL

High quality financial services with the latest technology.

Fast, accurate and satisfactory customer service.

Balanced and sustainable growth strategy.

Optimum return on shareholders equity.

Introducing innovative Islamic banking products.

Attract and retain high quality human resource.

Empowering real poor families and create local income opportunities.

Providing support for social benefit organizations-by way of mobilizing

funds and social services.

VISSION OF SIBL

Social Investment Bank Ltd started its journey with the concept of 21st Century Islamic

participatory three sector banking model: i) Formal Sector- Commercial Banking with

latest technology; ii) Non-Formal Sector - Family Empowerment Micro-Credit & Micro-

enterprise program and iii) Voluntary Sector - Social Capital mobilization through CASH

WAQF and others. Finally, "Reduction of Poverty Level" is our Vision, which is a prime

object as stated in Memorandum of Association of the Bank with the commitment

"Working Together for a Caring Society".

2.4 FUCNTIONS OF SIBL

1. Mobilization of idle resources of the country by accepting Deposits from the general

public.

2. Granting of Loans and Advances to the individual firms and companies for activating

and developing trade, commerce and industries and other productive activities in the

country.

3. To give facilities to the client and shareholders in a systematic way.

4. To give opportunity of the people to do job in SIBL.

5. To give encourage to the people for savings.

6. To increase investment.

7. To make easy to transfer foreign currency.

8. To identify consumers demand and fulfill their demand by supplying money.

9. To improve economy by borrowing financial facility.

10. To assist capital market.

11. To assist social activities is another function of SIBL.

2.5 BUSINESS PHILOSOPHY OF SIBL

The philosophy of Social Investment Bank limited is to develop the bank into an ideal

and unique.

2.6 BOARD OF DIRECTORS

Major (Retd.) Dr. Md. Rezaul

Haque: Chairman

Mr. Md. Humayun Kabir Khan : Vice Chairman

Alhaj Nasiruddin, : Vice Chairman

Mr. Md. Shah Alam : Director

Alhaj Sultan Mahmood Chowdhury : Director

Mr. Kamal Uddin Ahmed : Director

Mr. Abdul Awal Patwary : Director

Mr. Munshi Akhtaruzzaman : Director

Mr. Ahmed Akbar Sobhan : Director

Mr. Mohammed Shamsuzzaman : Director

Mr. Anisul Haque : Director

Mr. Mohammad Azam : Director

Alhaj Mohd. Afzal Hossain : Director

Mr. Md. Sayedur Rahman : Director

Mr. K. M. Ashaduzzaman : Managing Director

2.7 THE OWNERSHIP PATTERN

This is a private sector commercial Bank providing comprehensive range of Banking

services. The bank is owned as follows:

Promoters 50%

Government 5%

Public 45%

At present the Bank has an amount of Tk. 1000 million of Authorized Capital and Tk.

430.27 million of Paid-up Capital.

2.8 HUMAN RESOURCE

There is no alternative to skilled and trained manpower in service Industry. Bearing this

in mind the well educated, promising and honest workers are being appointed and

trained. Bank has given top priority for developing skilled manpower and introducing

them with modern technologies with the purpose to develop quality customer services.

The Bank has undertaken program to train up its employees of all strata at its own

Training Institute. A highly experienced person was appointed as Director (Training) of

the Institute in the year 2001 with the task of formulating various training modules. Steps

are being taken to shift the Institute to separate premises for facilitating training activities.

Side by side, both inland and foreign training also imparted during the year as usual.

A highly experienced, well educated and motivated workforce is playing vital role

towards growth of the Bank deserve appreciation. The number of Executives and Officers

as on 31st December 2002 was 605 as against 545 as on 31st December 2001.

2.9 TRAINNING INSTITUTE

Well educated peoples are needed to achieve the objectives of a firm. With a view to

build enthusiastic and skilled working force Social Investment Bank Training Institute

was established in 24th October, 1996 at Shyamoli, Dhaka. Every year the Institute

trains sufficient number of employees. Twenty five trainers can trained for each batch

in this institution. By the side of the new employee/officer, it is possible to trained

SIBL’s existing employee/officer. There is a library in SIBL. There is about 2

thousand books remain in this library. Account, Management, Marketing, and

Computer related books are in this library. In 2005, 1283 officer and no-officer was

trained. Not only are those, the executives also trained up here.

2.10 FOREIGN CORRESPONDENTS OF SIBL

In order to gain maximum advantage from Foreign Exchange related business, the Bank

has entered into correspondent relationship with almost all major 122 Banks of 109

countries of the world like Standard Chartered Bank, American Express Bank Limited,

HSBC, HBZ Finance, Mashreq Bank PSC, Dresdner Bank AG and with local banks in

Pakistan, India, Nepal and Bhutan etc with whom we have advising, reimbursing and add

confirming arrangement.

2.11 OVERSEAS OPERATIONS OF SIBL

Social Investment Bank has set up joint venture Exchange Company named Gulf

Overseas Exchange Co. LLc, in Oman contributing 25% of its paid up capital. The

present paid up capital of the company is Riyal Omani 1,82,000.00. The Chairman of the

company is the ex-minister of the government of Oman. The exchange company,

established in 1985, now has three branches in Oman and is being managed fully by

officials of SIBL. The company is running in profit. SIBL is also exploring possibilities

of opening branches in the Middle East, Switzerland and USA. SIBL has entered into the

Management contract with a Kuwati Exchange company to provide management and

technical services. SIBL has acquired equity and management of Nepal Arab Bank Ltd.

which is the largest and highly profitable Private Commercial Bank in Nepal.

2.12 SOME PRODUCTS & SERVICES

Mudaraba Term Deposit Receipts

Mudaraba Savings Deposit

Mudaraba Notice Deposit A/C

Mudaraba Scheme Deposit

Cash Waqf

Mudaraba Hajj Savings Deposit

Mudaraba Monthly Savings Scheme

Mudaraba Bashsthan Savings Scheme

Mudaraba Special Deposit Pension Scheme (5 Years)

Mudaraba Monthly Profit Deposit Scheme

Mudaraba Education Deposit Scheme

ATM Service

2.13 RURAL CREDIT PROGRAM

Agriculture is the main driving force of economy in Bangladesh. And the whole

economic growth of the country depends on the development, modernization and

investment of money in this connection. As a non-Government financial institution

SIBL has been actively participation in rural credit program in the economic activities

for large population of the country since 1992. SIBL has been working intensively in

collaboration with Barindra Multipurpose Development Authority by conducting the

Rural Credit program particularly in Rajshahi, Naoga, Chapainowabgong, and the

northern part of the country in general. In the last 10 years bank has distributed the

credit for Tk.69.85 million. The recovery of loan in this project is 94%. In 2001 bank

has distributed the loan for Tk.7.00million. This is the first program for any private

bank. Moreover, SIBL has been participating in Agro Based Industries and

Technology Development project Loan financed by USAID since 1996.

2.14 PERFORMED SOCIAL RESPOSIBILITY BY SIBL

Social Investment Bank always tries to keep their commitment and try to do

something for the society. SIBL donate blankets for cold ridded peoples every year.

2.16 BALANCE SHEET AS ON 31 TH DECEMBER, 2004

OPERATING PERFORMANCE

Total Operating Income of the Bank as on 31st December 2004 stood at Tk. 670.30 million against Tk. 694.89 million of the preceding year. The Bank made an operating profit of Tk. 414.99 million in 2004 against Tk. 500.54 million of 2003.

A summery of operating result of the Bank as on 31st December 2004 vis-a-vis the position as on 31.12.2003 is shown below:

(Taka in million)

Particulars 31.12.2004 31.12.2003 Growth Rate

Income on Investment 1787.95 1690.95 5.74%

Profit paid to the Depositors 1372.08 1288.08 6.52%

Net Investment Income 415.87 402.87 3.23%

Commission, Exchange & Other Income 254.42 292.02 -12.88%

Total Operating Income 670.30 694.89 -3.54%

Operating Expences 255.31 194.35 31.37%

Profit Before Provision 414.99 500.54 -17.09%

Provision against Investment & Others 262.12 112.50 133.35

Profit Before Tax 152.47 338.04 -54.90%

3.1 GENERAL BANKING

Bangladesh is one of the less developed countries. So the economic development of the

country depends largely on the activities of commercial banks. So we need to emphasis

whether these commercial banks are effectively and honestly performing their functions,

assigned duties and responsibilities. In thus respect we need to know about the general

banking function of those banks as well as The Social Investment Bank Ltd. is to provide

the general banking service.

3.1.1 Account Opening & Clearing

3.1.1.1 Types of Account

Mudaraba Current Deposit Accounts:

Current account may be opened in the name of persons having legal contractual

capacities. Current deposit accounts shall be opened with a minimum of TK

5,000/- for urban branches and TK 1000/- for rural branches. Current deposit

accounts will not bear any profit.

In this kind of account a customer can deposit his money and can write one or more

check to withdraw their money. For doing this, notice is not required. He can deposit it

whenever he/ she wants to and also can withdraw it whenever he/ she wants to.

Mudaraba Saving Deposit Accounts:

Savings accounts are intended for savings of funds of the depositors and as such,

the accounts should be operated with certain limitations as prescribed in the

Savings Bank Rules. Profit of savings accounts shall be allowed at the rates as

advised by Head Office from time to time. Interest on savings account shall

accrue half yearly and be applied on June and 31 st December every year.

Withdrawals from saving account up to a maximum 25% of deposits, which

should not exceed TK. 50,000/-, can be allowed in a week.

This deposit is basically meant for small-scale savers. There is restriction on withdrawals

in a month. Heavy withdrawals are permitted only against prior notice. Profit is paid on

these types of accounts.

Mudaraba Notice Deposit (STD):

In Notice Deposit, the deposit should be kept for at least 7 (seven) days to get interest.

The minimum balance should be Tk.10 (ten) lac. In National Bank various big

companies, Organizations, Government Departments keep money in STD accounts.

Frequent withdrawal is discouraged and requires prior notice.

Mudaraba Term Deposit Scheme:

For most of the people on fixed income the opportunity to supplement their monthly

earning is a golden one. And SIBL Special Deposit Scheme gives a customer just that.

Under this scheme, customers can deposit, money for a term of 5 years. During the term

period they can enjoy a monthly profit corresponding to their deposited amount. As for

instance, under this scheme a deposit of Tk,55,000/- gives a monthly income of Tk.500/-.

Deposited Amount Monthly Benifit

Tk. 55,000/- Tk. 500/-

Tk. 1,10,000/- Tk. 1,000/-

Tk. 1,65,000/- Tk. 1,500/-

Tk. 2,20,000/- Tk. 2,000/-

Mudaraba Monthly Savings Scheme

This scheme is specially designed for the benefit of the limited income group members.

This helps to accrue small monthly savings into a significant sum at the end of the term.

So, after the expiry of the term period the depositor will have a sizeable amount to relish

on.

Monthly After After

Instalment 5 years 10 years

=500/- =40,100/- =1,12,500/-

=1,000/- =80,100/- =2,24,500/-

Mudaraba Saving Insurance Scheme

This is an uncertain World and the threatening silhouettes of future catastrophes are

always looming around. This SIBL scheme gives your family protection against the

insecurities of the world. It combines the benefits of regular savings and insurance

scheme, so, you get the usual rate of interest on the deposited amount while you enjoy the

protection of a comprehensive insurance coverage.

Class Deposit Normal Death Accidental Death

Easy 50,000/- 1,00,000/- 1,50,000/-

Convenient 1,00,000/- 2,00,000/- 3,00,000/-

Classic 2,00,000/- 4,00,000/- 6,00,000/-

Standard 5,00,000/- 10,00,000/- 15,00,000/-

Mudaraba Fixed Deposit Receipt (FDR)

They are also known as time liabilities or term deposits. These are deposits, which are

made with the bank for a fixed period specified in advance. The bank need not maintain

cash reserves against these deposits and therefore, the bank offers high are of profit on

such deposits.

There are different types of rate for different period of FDR, here shows the FDR profit

rate in the Social Investment Bank Ltd. It can be change in any time.

Period (Month) Up to 10 lac Over 10-50 lac Above 50 lac

03 8.50 8.75 9

06 8.75 9 9.25

12 9.25 9.50 9.75

24 9.75 10 10.25

36 & Above ----- 10.75 ------

3.1.1.2 Procedure & rules to open a new account

Mudaraba Savings account

Before opening of a savings Bank Account, the following formalities must be completed

by the customer:

Requirement

1) Introducer

2) 2 copies passport size photograph dully attested by introducer

3) Valid passport/ ward commissioner’s identification certificate

4) Prescribed account opening form filled in properly by intending account holder

5) Putting specimen signatures in the specimen card.

6) Fill the KYC form

7) Initial deposit Tk. 5000/- only

After fulfilling above formalities, opens an account for the client and provide the

customer with a deposit book and a checkbook in case of savings account and currents

account.

Mudaraba Current account (Individual)

Requirement

1) Introducer (current account holder)


3) Valid passport/ ward commissioner’s identification certificate



6) Fill the KYC form


Joint Account:

When an account is opened in the names of two or more persons it is called a

joint account. However, it is desirable that the number should not exceed three.

At the time of opening an account, clear and specific instructions shall be

obtained regarding operation of the account and payment of the balance, if any,

to the survivors or surviving members in the event of death of one or more joint

account holders. Account shall be operated by ‘either of us’ or ‘either of us or

survivor, or ‘both of us jointly’ or ‘both of us or survivor’.

Current account (Proprietorship)

No saving account shall be opened in the proprietary concern. Application to

open current accounts will be made on which the name of the proprietor and his

authorized signature must be obtained. All formalities regarding the benefice of

the account openers and the introducer’s rules of the opening of the accounts etc.

must be completed to the absolute satisfaction of the manager.

Requirement

1) Introducer (Current account holder)


3) Valid passport/ ward commissioner’s identification certificate.

4) Trade license

5) Seal of the firm

6) TIN Certificate



9) Fill the KYC form.


Partnership:

In case of partnership account,

Requirement



3) Valid passport/ ward commissioner’s identification certificate of all partners.

4) Trade license

5) Seal of the firm

6) Partnership deed





Current Account (Limited Company)

On having the desire to open an account from a limited company, a National Bank

Officer asks for the following documents:

Requirement



3) Valid passport/ ward commissioner’s identification certificate of all directors.

4) Trade license of the company

5) Memorandum and articles of association of company(certified copy/ photocopy

dully attested by authorized signatory

6) Board Resolution

7) Certificate of incorporation

8) Certificate of commencement of business (for public limited company)

9) TIN certificate

10) List of directors

11) Seal of the company





a). The name of the persons who have been authorized to operate the bank account on

behalf of the company.

b). The name of the persons who are authorized to execute documents with the bank on

company’s behalf.

Societies, Clubs and Associations:

In case of these sorts of accounts National Bank requires the following documents:

1 Registration Certificate Under the Societies Registration Act, 1962

2 Copies of Memorandum, Articles of Association

3 Resolution of the Managing Committee.

4 Power of Attorney to Borrow.

Non-government Organization (NGO):

The account opening procedure is same but in exception is that the Registration

Certificate from the Social Welfare Department of Government must be enclosed with

the application.

Joint Account in The Name of Minor:

A minor cannot open an account in his own name due to the incapacity to enter into a

contract. He can open an account in National Bank in Joint name of another person who

will be guardian of him.

3.1.1.3 Clearing the cheque:

According to the Article 37(2) of Bangladesh Bank Order 1972, the banks, which are the

member of the clearinghouse, are called as Scheduled Banks. The scheduled banks clear

the cheques drawn upon one another through the clearinghouse. This is an arrangement

by the central bank where everyday the representative of the member banks gathers to

clear the cheques. Banks for credit of the proceeds to the customer’s accounts accept

cheques and other similar instruments. The bank receives many such instruments during

the day from account holders. Many of these instruments are drawn payable at other

banks.

The place where the banks meet and settle their dues is called the Clearinghouse. The

clearinghouse sits for two times a working day. The members submit the claimable

cheques in the respective desks of the banks and vice-versa. Consequently the debit and

credit entries are given. At the debit summation and the credit summation are calculated.

Then the banks clear the balances through the cheque of Bangladesh Bank. The

dishonored cheques are sorted and returned with return memo.

Clearing is two types:

Inward Clearing:

In Inward clearing process cheques of Social Investment Bank Ltd, Foreign Exchange Branch are deposited in other banks and sent back to Foreign Exchange Branch of Social Investment Bank through clearing house for collection of money. In this process, cheques of Foreign Exchange branch of Social Investment Bank Ltd are sent to the local office of Social Investment Bank at first. Then the local office sent those cheques to the Foreign Exchange Branch.

Process of Inward Clearing:

After receiving the cheques from the local office of Social Investment Bank Ltd,

those cheques are directly send to the computer section for checking the balance

of those specific A/Cs from which money should be collected. If the required

balance is available there then the amount is debited from that account and the

cheque is honored. But in case if the required balance is not available the

authorized officer of clearing department immediately informs to the head of the

general banking or he tries to connect the account holder. If the account holder

does not deposit the required balance immediately the cheque is dishonored.

Finally the authorized officer gives all the entry of those cheques in inward

clearing register. The format of the register book is given below:

Bank From Branch

name

Cheque no. Amount A/C No. Remarks

After giving the entries, a credit advice is sending to the local office of National

Bank Ltd.

Dishonor of cheque

If the cheque is dishonored, Social Investment Bank sends a memorandum (cheque return

memo) to the customer stating the reason in the following way,

(1) Refer to drawer

(2) 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/ required.

(8) Payee’s endorsement irregular, require Bank’s confirmation.

(9) Drawer’s signature differs/ required.

(10) Alterations in date/ figures/ words require 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.

Process of outward clearing:

For outward clearing cheques, the bearer of the cheque must have an account in

Foreign Exchange Branch of Social Investment Bank Ltd. After the submission

of the cheque, authorized officer gives the entries in software, which is provided

by Bangladesh Bank. The name of the software is Nikash. After giving all the

entries are printed and are enclosed with the cheques. Then all the cheques with

the enclosed sheets are send to the local office of Social Investment Bank Ltd.

for the collection of money. The local office sends it to clearing house.

LBC(Local Bills for Collection) – If the cheque presented by customer is the

cheque of SIBL’s other branch then to collect the money LBC procedure is

follow.

OBC(Outward Bills for collection)- Collection of bills, which is beyond the clearing

range and collected through OBC mechanism.

3.1.2 Local Remittance

Commercial banks in Bangladesh offers the facility of transferring funds, from

one place to another, to their customers as well as to the general public. Such

transfer of funds can be affected either through Demand Draft or Telegraphic

Transfer or Mail Transfer. The aforesaid methods of remitting money from one

place to another within the country are known as Inland Remittance.

3.1.2.1 Telegraph Transfer (TT):

Telegraphic Transfer may be affected at the written request of any person and against value received from him. A written application on the bank’s prescribed form duly signed by the purchaser should be obtained. If the application for issue of telegraphic transfer contains instruction to debit the account of the purchaser, his signature should be verified. It is however, preferable to obtain a confirmation cheque from the customer. The application form is in variably checked on the following points: There should be a branch of Social Investment Bank Ltd in the place on which

Telegraphic Transfer will be issued and the said branch has test arrangement with the

issuing branch.

Full name of the payee and his a/c no., in case instructions are to credit his test

arrangement with the issuing branch.

The amount of T.T Commission and Telegram charges should be received from the

purchaser. The total amount may be paid in cash or tendered by a cheque if he is

customer of the branch. Some times, the customer may also desire to pay the amount

of T.T by cheque and commission and telegraph charges by cash.

In case of amount tendered by cheque, the drawer on the cheque and the purchaser of

the TT should be the same person, viz., the signature on the cheque and on the

application should tally. Such cheque should be in favor of Social Investment Bank

Ltd

Now, a cost memo for the TT is to be prepared by the officer under his signature

which contains the amount of TT Commission & Telegram charges & is delivered to

the purchaser.

Now the officer concerned as to the amount, name of the beneficiary has correctly

prepared the message, instructions regarding mode of payment and place of payment.

The concern officers should correctly prepare the test.

T.T over telephone may be transmitted on account of valued clients of the bank.

Payment of Telegraphic Transfer:The payment of T.T should be made to the payee or beneficiary after being satisfied in all respect. The serial number of T.T should be entered in T.T payable register on the relative folio next to that of previous message on agreement of test. The issuing branch should be immediately informed if any number is omitted.1. The voucher should be passed. The beneficiary should be intimated the earliest, if

possible may be informed on telephone.

2. If the instructions are to be “Advise and pay, the T.T receipt should be prepared. The

manager and the officer of the branch should sign after checking the name of the

beneficiary, the amount and the name of the issuing branch. The number of T.T

receipt should be noted in the T.T payable Register and on the decoded manages. The

beneficiary should be advised on the printed prescribed form instead of sending the

T.T receipt.

3. When the amounts are credited/ paid the same and should be noted in the T.T payable

register. While making the payment on a T.T receipt, the signatures of the attorney

who have signed be verified cancelled.

4. The T.T receipts are not transferable. They should not bear any endorsement. The

beneficiary is to signed on proper revenue stamp in front of the officer. Party

acceptable should attest the signatures of the beneficiary to the bank.

3.1.2.2 Pay order:

A pay order is a written order, issued by a branch of a bank, to pay a certain sum of money to a specified person or a bank. It may be said to be a banker’s cheque as it is issued by a bank drawn upon and payable by itself. If money will draw in Dhaka city then pay order.Use of pay order A pay order is issued and paid by the same branch of a bank and as such, the drawer

and the drawee are the same. The person or the organization in whose favor it is

issued is known as payee or the beneficiary. It is some times sold to individual on

payment of value who may or may not be a customer and is called the purchaser.

The purchaser should sign the standard application form giving detailed particulars

and request for issue of pay order. The payee or beneficiary must not appear to be

fictitious. His full name and address should be written on the application. Bank

should recover commission of pay order from the purchaser.

A pay order is divided into three parts viz. The actual pay order, The second

counterfoil to be returned by the payee and the first counterfoil to be retained by the

issuing branch as record.

Characteristics & payment: It should be paid to the payee or beneficiary after proper identification or it may be

credited to his account.

A pay order is transferable. As it is a banker’s cheque payable to order the payee/

beneficiary may transfer it, by giving proper discharge on its back, to some one else

who receives payment as the transferee.

It is not generally collected for a persons other that the original payee except in cases

where the depositor is a valued client known to the bank.

Before making payment the signature of issuing officers should be verified and the

date of payment should be marked in the register.

3.1.2.3 Pay slipIf anybody get any amount from SIBL then SIBL issue pay slip. He can deposit the pay order in any bank’s any branch.

Meaning & purpose: A pay slip is a written authorization for making payment-specified person or firm

payable by issuing branch, for a discharged liability of the bank. As pay slip is

originated made payable by the bank in a receipt form there is no need for any

application for its issue.

A pay slip is issued to effect payments on account of bills payable by the bank for

goods and services purchased or availed by it. For example, bank is required to make

payment of bills for the purchase of furniture & fixture, for printing & stationery and

for any other works done on its behalf by the other party on agreement with the bank.

Characteristics & payment:

A pay slip is receipt of payment received by the payee due from the bank. It should be

paid to the payee on proper identification or credited to his account on its being presented

duly discharged by him or revenue stamp of required value. Cash payment should not be

made if it is crossed except to a collecting bank.

3.1.2.4 DEMAND DRAFT

A demand draft is a written order of one branch upon another branch of the same

bank, to pay a certain some of money to or to the order of a specified person.

Drafts are not issued payable to bearer. In practice drafts are not to be drawn

between branches within the same city.

Issue of Demand Drafts:

The customer is asked to complete filling in a form that is treated as an

application as well as voucher. The application form should be checked

carefully.

Commission charges are calculated and inserted in the case provided in the

form.

The voucher given to the customer to deposit the cash with the cashier.

The cashier receives the cash and delivers the voucher to Remittance

Department against initial in his book.

Draft is prepared and entered in draft issue Register.

Branch-wise serial number is given on the draft besides the printed number

putting on oblique(/) in between. The amount of the protect graphed.

The draft number is written on the voucher.

Draft block and the voucher along with the register are sent to the officer in

charge for checking and signatures. He signs the draft and voucher and

initials the counterfoil of the draft and the Register.

Then the draft and the voucher are sent to the Manager/ Second Officer for

second signature.

The draft is crossed if customers desires and delivered to him against his

acknowledgement on the voucher.

If the amount is tendered by a cheque, the drawer to and the purchaser of the

draft should be the same person, i.e. the signature on the cheque and on the

application form must tally.

A memorandum is issued to the customer if he or she desires.

The cheque is sent for passing and cancellation.

After the cheque is passed, similar procedure as explained above is adopted

for issuing draft.

Telegraphic intimation under test is sent to the drawee branch for drafts of Tk.50,

000/= and over in or as per the existing rules.

3.1.3 Deposit

In the deposit section general ledger & clients accounts are maintained. The computer

system is operated by A to Z software. The main job of the system operator is posting the

cheques or vouchers and providing the balanced data. When a cheque or voucher is

presented for posting, the account number is put in the computer. The computer then

shows the balanced amount of the account. All the information regarding a client or

general ledger can be found here as well. The computer operator also has to print

necessary statements daily for different units of the bank. Party’s individual statement is

also printed. Current accounts statement is printed in every month and savings accounts

statement at an interval of six-months. These statements are then sent to the respective

clients.

After updating these information’s, a copy is made in a cartridge for back- up before

shutting down the system.

At the end of day’s work, the computer operator of Foreign Exchange Branch, SIBL

prepares all the supplementary statements of all the transactions and sends it to the other

employees of the general banking section. In the next morning, all the vouchers &

supplementary statements of the previous day are matched & stapled with each other.

3.1.4 Accounts Department

Recording all kinds of transactions of the Branch, confirming their accuracy and

preparing statements are the main function of this department. Now a days under

computerized Banking system the job of accounts department became very easy. In

computerized account department of Social Investment Bank Limited, the clean cash

statement and supplementary statement on the computer directly prepares party ledger

vouchers. The accountant needs not to prepare these manually. The functions of the

accounts department can be divided into two parts.

Daily functions, and

Periodical functions

3.1.5 Advance

In the current situation bad debt is a general matter in the Banking activities. It is very

difficult to compensate by the business profit. For this reason SIBL adopted some modern

strategy for control bad debt. The Bank continued to extend credit facilities in profitable

productive and priority sectors including trade finance within the policy guidelines of the

Bank. The total advances of the Bank stood at Tk.20200.64 million 31.12.2001 compared

to Tk. 18553.66 million in the last year. The growth rate is 8.87%.

3.1.5.1 Social Investment Bank Limited Allow Loan For Under These Purpose:

1. Cash Credit Hypo

2. SOD (FO)

3. SOD (General)

4. SOD (Bid Bond)

5. Loans (General)

6. Loans Against General House Building (Residence)

7. Loans Against General House Building(Commercial)

8. Loans Against Staff House Building

9. Exporter Cash Credit

10. Loans General (IT)

11. Loans General (ADB)

12. Loans General (Cash Assistance)

13. Loans Against Packing Credit (PC)

14. SOD (Export)

15. Consumer Credit Scheme (CCS)

3.1.5.2 Documents to be obtain:

Loan :1) D.P. Note, 2)Letter of Partnership or Resolution of the Board of Directors, 3) Letter of arrangement ,4) Letter of disbursement, 5) Letter of Pledge,6) Letter of hypothecation, 7) Trust Receipts, 8) Letter of Lien and ownership, 9) Letter of Lien packing credits & 10) Letter of Lien .

Overdraft : 1) D.P. Note, 2)Letter of Partnership or Resolution of the Board of Directors, 3) Letter of arrangement, 4) Letter of continuity,5) Letter of lien & 6) Letter of ownership.

Cash Credit : 1) D.P. Note, 2)Letter of Partnership or Resolution of the Board of Directors, 3) Letter of arrangement, 4) Letter of continuity,5) Letter of Pledge, 6) Letter of hypothecation & 7) Letter of Lien.

Bills Purchased: 1) D.P. Note, 2) Letter of Partnership or Resolution of the Board of Directors, 3) Letter of arrangement,4) Letter of hypothecation-bill.

3.1.5.3 Definition and Explanation of Credit Facilities:

Direct Facilities (Funded):Cash Credit:Cash credits or continuing credits are those which form continuous debits and credits unto a limit and have an expiration date. A service charge, which in effect an interest charge is normally made as a percentage of the value of purchases. These credits may be of the nature of pledged and hypothecated and banks should report these in separate heads incorporated under the main head cash credit. A detailed explanation of Pledge and Hypothecation is given below.

Cash Credit against pledge: Under this arrangement a cash credit is sanctioned against pledge of goods or raw-materials. By signing the letter of pledge, the borrower surrenders the physical possession of the goods under the banks effective control as security for payment of bank dues. The ownership of the goods however, remains with the borrow. The pledge creates an implied lien in favor of the bank on the underlying merchandise. In the event of failure of the borrower to honor his commitment the bank can sell the goods for recovery of the advance. No collateral security is normally asked for grant of such credit.

Cash Credit against Hypothecation: Under this arrangement a credit is sanctioned against hypothecation of the raw materials or finished goods. The letter of hypothecation creates a charge against the goods in favor of the bank but neither the ownership nor its possession is passed on to it, only a right or interest in the goods is created in favor of the bank and the borrower binds himself to give possession of the goods to the bank when called upon to do so. When the possession is handed over the charge is converted into pledge. This type of facility is generally given to the reputed borrowers of undoubted integrity.

1. A loan facility on a customer’s current account at a bank permitting him to overdraw up to certain agreed limit for an agreed period. The terms of the loan are normally that it is repayable on demand or eat the expiration ate of the agreement.

2. Loan against Imported Merchandise (LIM/LTR): This is a loan facility up to a satisfactory limit to the traders/customers by a bank against security of the value of the imported merchandise. This item also includes loan against Trust Receipts.

3. PAD/BLC/BE: A loan facility provided by the banks to the customers against documents/bills.4. Export Credit: All advance facilities provided to the exporters by the banks other than cash credit.5. Term Loan: A bank advance for a specific period repaid with interest under fixed schedules. The term loans may be as follows.6. a) Short Term: Upton and including 12 months.

b) Medium Term: More than 12 months unto and including 60 months.c) Long Term: More than 60 months.

7. Other: Any loan that does not fall in any of the above facilities is considered as “other.” Blocked/Segregated continuing credits when re-scheduled by the banks for payments over a number of periods should also be reported against the head “other”.

Indirect Facilities (Non-Funded) :

1. Guarantee: A credit facility in contingent liabilities form extended by the banks to

their clients for participation in development work like supply of goods and

services.

2. Letter of Credit: A credit facility in contingent liabilities form provided to the

clients by the banks for import/procurement of goods/services.

3. Other: All other non-funded facilities which are not included in any other non-

funded facilities.

3.1.5.4 Revised Rules/Principles of Loan Classification and provisioning:

With a view to classifying, loans & advances will be categorized into four different categories. Such as Continuous Loan, Demand Loan, Fixed Term Loan and Short Term Agricultural and Micro-Credit.

1. Continuous Loan: The loan which has not particular repayment schedule, but contains date of expiry, credit limit etc, will be termed as Continuous Loan.

2. Demand Loan: The loan which is considered repayable only after it is claimed by the banks, will be termed as Demand loan. If contingent or any other liability is converted to Compulsory Loan or Forced Loan then it will be termed as Demand Loan.

3. Fixed Term Loan: The loan which is repayable within a particular period of time as per repayment schedule will be termed as Fixed Term Loan.

4. Short Term Agricultural and Micro-Credit: Those credits which are enlisted as short term credit under the annual credit programmed declared by ACD of Bangladesh Bank will be termed as short term Agricultural Credit. It will also include credit extended to agricultural sector and repayable within a period not exceeding 12 months. The short term Micro-Credit will be that which will not exceed an amount of Tk. 10,000/ and will be repayable within a period not exceeding 12 months. Such loans may be Non-Agricultural Credit, Swanirvor Credit, Waving Credit or banks’ self financed project loan and whatsoever.

3.1.5.5 Housing:

Is a unique savings and loans institution. It is promoted with an authorized capital of

Tk.200 core and subscribed capital of Tk.40 core by a consortium of 18 corporate entities

including 7 insurance companies, 4 banks, 1 development finance company, 6 local

corporate/business groups and 2 non-resident Bangladeshi overseas investors’ forums.

Incorporated in August 1998 as a public Limited Company and licensed by Bangladesh

Bank as a non-banking financial institution, National Housing is engaged in the core

business of promoting savings and home ownership in Bangladesh.

Features of Housing Home Mortgage Loan:

Purpose of Loan

National Housing Home Mortgage Loans are available for

Construction of houses

Purchase of houses or apartments

Renovation, extension or addition to existing houses or apartments

Purchase of housing plots

Amount of Loan

The maximum repayment term is 15 years but not extending beyond the borrower’s 65 birthday or retirement date.

Applicable Rate of Interest

The current rate of interest applicable to your loan is 15.75% calculated on annual rests.

Rate of interest charged to your loan is linked to the prevailing money market conditions

and may vary during the repayment period of the loan.

Disbursement of Loan

The loan can be disbursed at a time or in installments as per your requirement depending

on the status and progress of works of the project subject to investment of your equity in

full.

3.1.5.6 Equity:

Equity and Entrepreneurship Fund (EEF).Government Financed Equity Fund Under

Management of Bangladesh Bank.

The Bangladesh Bank directs the activities of Equity and Entrepreneurship Fund to

encourage the entrepreneurs for investing in risk oriented but potential industry

development financed by the government.

Sectors equity facilities are available

1. Software Industry 2. Food Processing and Agriculture-based industry

The interest?

No interest! The profit/Loss of the project will be distributed among the entrepreneur and

EEE according to ratio of their investment.

3.1.5.7 Consumer Credit Scheme:

National Bank's Consumer Credit Scheme gives you a great opportunity to buy

household and office items on easy installments. This scheme gives you the advantage of

part payment to cope with the high price tags of many necessary home and office

appliances.

Television, Refrigerator, VCR, Personal Computer, Photo-Copier, Washing Machine,

Furniture, Microwave Oven, Car, and a number of other expensive items are now within

your buying range. With this scheme NBL makes better living possible for people living

on fixed income. Customers can buy those home and office equipment's without over

taxing their budget.

3.1.6 Cash

The cash section of Social Investment Bank deals with all types of negotiable instruments, cash and other instruments and treated as a sensitive section of the bank. It includes the vault that is used as the beyond this limit, the excess cash is then transferred to Bangladesh Bank. This section performs the following functions:

Cash Packing:

After the banking hour cash is packed according to the denomination. Notes are counted and packed in bundles and stamped with initial.

Allocation of Currency:

Before starting the Banking hour all tellers give requisition of money through “Teller cash proof sheet”. The head Teller writes the number of the packet denomination wise in “Reserve sheet” at the end of the day; all the notes remained are recorded in the sheet.

3.2 FOREIGN EXCHANGE BANKING3.2.1 Foreign Exchange

3.2.1.1 Foreign Trade:

Foreign trade constitutes a sizable portion of international transactions of a country.

Payment received for exports and made for imports form a substantial part of its

remittances from and to other countries. In our country a major share of the current

balance of payments is made up of exports and imports of merchandise on private and

government account. Thus, trade is the most important factor giving rise to payments

between countries. Foreign trade is a type of specialization, which like other forms of

specialization increases productive efficiency and standard of living of the people of the

country concerned.

3.2.1.2 Need for Foreign Trade:

Foreign trade enables a country to have a much larger flow and much more diversified

form of wealth than what is possible without it. The residents of a country are able to

enjoy the use of commodities which otherwise may not be available to them at all. There

is a wide difference in respect of the material and human resources, stage of technical and

scientific progress, and possession of capital equipment in different countries. No country

is in a position to produce everything in quantities large enough to provide its people a

reasonably high standard of living. A country, therefore, enters into trade relations with

other countries on account of certain basic differences due to topographical reasons in its

economy from theirs.

Commodities are imported because either they cannot be produced in the country at all or

can be produced at a very high cost. Import of such commodities is a convenient and

cheaper way of getting them. In exchange for imports, a country has to export certain

articles because normally imports can be paid for only by exports. A country’s exports

usually comprise commodities the cost of production of which is less than the cost of

importing them. Thus the need of the people of a country for its scarce resources and in

exchange the surplus of some of their resources constitute the import and export stimulate

the foreign trade which is intern mobilized by foreign exchange proceedings.

3.2.1.3 TYPES OF FOREIGN TRADES DEALT IN BANKS

Foreign trades are mainly of two types. These two are: Import Trade & Export Trade.

The import and export trade of Bangladeshis is controlled under the Import and Export

Control Act, 1950. In normal sense the imports involve outward remittances and the

export involves inward remittances. The terms and conditions of contracts between the

importers and the exporters and the eventual remittances in foreign countries are subject

to such restrictions and formalities as are laid down from time to time by the Import and

Export Control and Exchange control in their respective jurisdiction which the importers

and exporters must comply with.

Import Trade:

When a particular country wishes and does bring in some goods and services from

another country, trade occurring between these two countries is called import trade.

Import trade means procurement and purchase of goods and services from another

country or countries. Therefore, purchasing function of international trade is called

import trade.

Export Trade:

Selling of goods and services or other sales related function for the transfer of surplus

goods or services for a value or just to merchandise them abroad trade occur between

countries. Thus export or sale of additional goods and services or surplus goods and

services is called export trade. There is an another peculiar type of export trade named

Re-Export Trade.

3.2.1.4 IMPORT

The bank defines import as to bring in, from abroad, something in kind of goods or services (to behave lawfully). It includes the following services:

1. Letter of Credit (L/C) opening.

2. Presentation/Retirement of import documents.

The import mechanism first involves the issuing of a L/C as an instrument by a bank on behalf of one of its customers, authorizing an individual or a firm to draw draft on the bank or on one of its correspondents for its account under certain conditions stipulated in the credit. Secondly the bank import mechanism involves the retirement of import mechanism on receiving the payment or under certain conditions against the security of payments made by the importer in documents stipulating an advance payment date.

IMPORT OPERATION

Actually the import procedure is a result of a two-party negotiation or contract. Once the importer has accepted the supplier’s offer, he agrees to open a Letter of Credit in favor of the latter. Thus the import procedure of the bank starts with the opening of the credit. The entire import mechanism of this branch is enumerated below.

Terms of Credit: First of all the concerned banker asks the importer to present and show the terms of the credit that the importer wishes to issue. The terms of the letter of credit are based on the contract between the importer and the exporter and the import license or the authorization permits for import under free list as the case may be, issued in the named of the concerned importer. The terms of the credit specify importantly, amount of the credit, name and address of the beneficiary and the opener, particulars of the goods, their make, quantity and price basis, tenor of bill of exchange, period and mode of shipment, whether part shipment allowed, port of shipment and of destination, nature of credit, expiry date, names and number of sets of shipping and other documents.

Letter of Credit Application: For the purpose of the opening the credit the importer is required to fill up and sign a stamped Letter of Credit application, which, in addition to recording the full details of the credit including instruction for booking exchange, serves as an agreement between the banker and the opener.

Presentation of the application for Opening of the Letter of Credit: When the importer requests the bank for the opening of a L/C, by agreeing to the request, the bank makes a promise of payment to the supplier by issuing it. But the importer must make out an application for this purpose. The application must be written in a plain paper or Letter Head pad and it should be submitted being attached with the following certificates and papers:

If the importer is an individual: 1. Current Deposit A/C No.,

2. Partnership Deed and Solvency Certificate (If partnership firm),

3. Article of Association (If Private Limited Company ),

4. Memorandum of Association (If Private Limited Company),

5. Certificate of Commencement of Business (If Public Limited Company),

6. Photocopy of Trade License (valid),

7. Photocopy of VAT Registration Number,

8. Photocopy of Tax Identification Number (TIN certificate),

9. Import Registration Certificate from CCI&E, (Renewed and valid).

10. Required amount of Registration Fee.

IRC issue fee: IRC Issuing Fee

Import Limit

Tk. 500 Highest annual imports limit 5 Lac.Tk. 1500 Highest annual imports limit 15 Lac.Tk. 3000 Highest annual imports limit 50 Lac.Tk. 5000 Unlimited annual import capacity.

Table No.1: Fees for issuing Import Registration CertificateBesides, these documents stated above the bank may ask for certain other documents submitted by the importer prior to issuance of the credit. Like, Photocopy of Membership Certificate of Chamber of Commerce & Industry, photograph of the applicant, Minimum three copies of Proforma Invoice/Indent/Sale Contract (dully accepting the rate of goods offered) etc.

Bank Scrutiny of the Documents Before Opening of the Credit: On receipt of the application form with other required documents submitted by the opener they are thoroughly scrutinized. The points, which are carefully scrutinized, are followings:

1. Indenting the registration number.

2. That the IRC is updated or renewed and valid.

3. That the goods are marketable and legally importable and that it is not difficult for

the beneficiary to comply with all terms and conditions to be incorporated in the

L/C.

4. That the L/C is not going to be opened in favor of the importer.

5. That the importer signs it, agreeing terms and conditions.

6. That the Insurance Cover Note specifies the date of shipment.

7. That it encloses Radioactivity Report in case of food item.

8. That the Import Permission (IMP) form is dully filled in and signed.

9. That the liability, as being applied, is under appropriate limit.

10. That the amount does not exceed the L/C value and is identical with invoice

amount and that the amount in figure and in word is same.

11. That it encloses credit report of the beneficiary in cases when the L/C value is

more than US $ 20,000.

12. That the tenor, if, the draft is strictly in conformity with the terms stipulated in the

L/C i.e., at sight or usance and that the transcription or partial shipment is

allowed.

The terms and conditions of L/C application are consisted with exchange control and import trade regulation, UCPDC – 500. If all the documents are along with application are in order, the concerned banker will advance with these documents for opening.

Preparation of Proposal for the Opening of the Letter of Credit: On careful examination and scrutiny of the documents if the issuing banker assumes that everything is consistent and the application is considerable, then he begins preparing a proposal stipulating the applicant’s financial position, creditworthiness showing the CIB (Credit Information Bureau) report, previous relationship with the bank, total L/C amount, amount of margin proposed by the importer etc. After preparing the proposal of opening the credit the banker will sent it to the import depart department in-charge for approval. In Foreign Exchange Branch the import department is controlled and directed by a Vice President (VP). The VP is given the power to approve and sanction a ‘Limited’ amount of L/C. In other cases, when the L/C amount exceeds the ‘Limit’ or capacity of the branch, approval of ‘Head Office’ will be required for its opening.

After the issuance of L/C the banker asks the importer to sign on some ‘charge documents’. Charge documents are bank-printed documents and these documents get validity as soon as the buyer or the credit seeker signs own it by giving the bank the power to charge the buyer with the rights as given on the documents. Usually these documents are guards against the bank’s guarantee of issuing the credit. When the importer fails to pay or make any other type of default with the credit, the bank use these documents and goes to the court to charge him. The Foreign Exchange branch normally takes the following documents signed by the importer just before mailing of the credit to the advising bank:

1. Promissory Note,

2. Letter of Disbursement,

3. Letter of Continuity, etc.

Release of Import Documents to the importer: After the lodgment vouching the PAD section of the import division ask the importer to make payment due and take delivery of the import documents and bills in order of getting the imported merchandise released

from the port. In this stage of documentary import mechanism again two questions come forward: the response and non-response of the importer to take delivery of the documents and bills. If the buyer agrees to take delivery of the import documents and bills and makes the total payment due (L/C amount – margin amount + interest charged on this deducted amount), the bank retires the import bills on his authorization.

3.2.1.5 EXPORT

Exports, for obvious reasons, are listed in the priority sector in all developing economies. There is no doubt in this fact that export trade constitutes the most substantial base for sustaining the long term development and prospect of a country’s economy. Bangladesh is also now a developing country. So this fact is equally relevant to the concerned economic soundness of Bangladesh. We all know about the ‘Balance of Payment’. If a countries total import outweighs its total export, the country is called to be facing drastic negative (unfavorable) balance of payment. A continuous negative balance of payment of country makes it totally dependent on others. And thus the economic standing and structure of that country gradually collapse. On the other hand a positive (favorable) balance of payment shows the greater amount of export by a country against its total import and shows a sound economic motion. Thus export is a most import mechanism that helps a country to be dependent and to produce goods or merchandise either through its internal resource or through procuring resource from external sources. Whatever the source is the export helps a country to build its capital reserve more promisingly.

Bangladesh is also now very much keen to boost up its export. But the most stumbles’ blocking the process is the non-availability of required finance. There is neither adequate capital in the hands of the exporter to meet up their foreign trade requirements nor their exists an organized capital market to extend fair hand as help for the finance. In view of this, commercial banks of this country are the only real friendly base, which recently have started playing a challenging and pivot role in the business sector through extending both pre and post trade finance to the exporters and importers.

Export Policy 1997-2004: Target:

1. To attain highest national growth by increasing export to regional and

international markets;

2. To reduce gradually the gap between export and import expenditure;

3. To produce export commodity at a competitive price aimed at market retention

and promotion;

4. To avail the opportunity to enter in liberalized and globalize ‘Post-Uruguay

Round International Market’;

5. To make goods exportable and more suitable for foreign markets by

diversification and quality improvement;

6. To establish backward linkage industry and services and identify higher value

added goods;

7. To develop infrastructure for exports;

8. To create skilled manpower in export sector;

9. To upgrade the quality and grading of commodity to an internationally recognized

level.

The normal export mechanism is much like the procedure maintained in a typical import mechanism. Whereas in case of import the party is the importer and the bank acts as the opener of his credit, in case of export the party is the exporter and the bank acts as the negotiator of his documents. In our country the most promising exporters are the garments industries. About 76% of the total exports of our country is made by the garments sector. The underlying reason of success of this sector in exports is the availability of the huge amount of cheap labor. But because of inadequate supply of locally produced quality fabrics and accessories, we have to import about 60% of the fabrics and accessories from abroad for use in the garments industry. This is actually a time consuming and costly process for the garments sector. So considering the significant contribution of the garments sector in the export trade the private commercial banks have undertaken an especial arrangement to provide them with export finance, which is called the foreign Back to Back Letter of credit (BTB).

BANK MECHANISM IN EXPORT

As stated earlier, the foreign trade plays a vital role in the economic advancement process of nation. So the trend or parameters of foreign trade i.e., import and export is of great concern to the government of a country. By the term ‘Export’ we mean carrying of anything from the country of origin to another country in return for a value. The bankers define ‘Export’ as the sending of visible things outside the country for sale. The export is important because with the export earnings we met our import bills. Normally a bank provides the following services as with the party in case of export needs.

Obtaining of Export Registration Certificate (ERC): When the party or the exporter receives any export order after negotiation with the importer, he comes to the bank and asks negotiate his transaction with the importer’s correspondent. In such a case the bank first advise him to obtain Export Registration Certificate from CCI&E (Chief Controller of Import and Export).

Procedure for obtaining ERC: For obtaining Export Registration Certificate (ERC), intending Bangladeshi Exporters are required to apply to the Controllers/Joint Controller/Deputy Controller/assistant Controller of Imports and exports in the prescribed form along with the following documents:

1. Nationality and Assets Certificate of the Proprietor/Partners/Directors;

2. Registered Partnership Deed in case of Partnership Concerns;

3. Memorandum and Article of Association and Incorporation Certificate in case of

Limited Company;

4. Bank Certificate; and Income Tax Certificate;

5. Copy of valid Trade License and

6. Copy of Rent Receipt or the Business Premises.

On receipt of necessary advise from the Offices of the concerned Controller of Imports and Exports, applicants of Export Registration Certificate are required to deposit Registration Fee of Tk. 1000 (subject to change) in to the Government head of account “24- Trade and Commerce-Fees Realized under Import and Export Control Act, 1950” through Bangladesh Bank or Government Treasury Sonali Bank. Copies of Treasury Challans showing payment of fees should be sent to the concerned offices of the CCI&E for enabling them to issue Export registration Certificate. Once it has been registered, the exporters are to make annual payments of Tk. 1000 (subject to change) only for having the ERC renewed.

Receiving Advising of Letter of Credit: Normally the exporter receives Letter of credit in two forms:

1. Cable

2. Original

The imported terms and conditions of the L/C are communicated by the L/C opening bank to the exporter’s bank through cable, which is followed by the original L/C. The L/C received through cable generally covers the following points:

1. The name of the importer;

2. The name of the exporter;

3. Description of goods (in short detail);

4. Expiry date of the Letter of Credit;

5. Shipment date, etc.

Usually, a few days after the receipt of the L/C (cable or original), the exporter’s bank ascertains the correctness of the test number (incase of cable) and the authorized signature. If found in order, the bank brands its stamp on the L/C and put the L/C No. Then the bank makes entry of the particulars of the L/C into the Register of Letters of Credit Established by the Foreign Banks. After that the exporter’s bank sends the original copy of the L/C to the beneficiary (the exporter) without engaging any

responsibility on its part. The particulars of any subsequent amendment of the Letter of Credit are written down in the Register and the amendment is advised to the beneficiary.

Issuing of EXP (Export) Form: After the receipt of the advising bank’s letter, the exporter is required to issue an Export Form by the Authorized Dealers. The ‘EXP’ Forms are numbered serially and issued in quadruplicate. Before the export forms are lodged by the exporters with the Customs/Postal Authorities, they should get all the copies endorsed by the Authorized dealers. For delay in repatriation of export proceeds or non-realization of export proceeds, the exporters render themselves for action under Foreign Exchange Regulation Act, 1947. Authorized Dealers and their officials who certify the export forms also render themselves on such action by the Bangladesh Bank.

Disposal of ‘EXP’ Forms:Original : From Custom Authority to Bangladesh Bank;Duplicate : From Negotiating Bank to Bangladesh Bank after negotiation;

Triplicate : From Negotiating Bank to Bangladesh Bank after realization of the proceeds of the export bill; and

Quadruplicate : Office Copy of Negotiating Bank.

Examination of the Documents: After the issuing of the ‘EXP’ form the exporter proceeds for the shipment of the goods to the buyer’s destiny. As soon as the shipment of goods is made, the exporter prepares the Bill of Exchange and submits it with other export documents to Authorized Dealer for negotiation of the same. As the banker deals only with documents not with the commodity, they should be very much careful about the genuineness and correctness of the documents evidencing shipment of the respective commodities. The banker is to ascertain that the documents are strictly as per the terms of L/C. before negotiation of the export bill, the banker is to scrutinize and examine each and every document with great care. Negligence in the part of the banker may put the importer abroad into unnecessary troubles.

As regard to examination of other documents, it is to be thoroughly checked and ensured that the documents are prepared strictly in conformity with the terms and conditions of the relative L/C.

3.2.1.6 EXPORT FINANCE IN THE FORM OF BTB L/C WITH SPECIAL EMPHASIS ON GRMENT INDUSTRIES

Today the garment products of our country have captured much of the foreign markets successfully. The rise of ‘Garments Industry’ in Bangladesh has been described as the “Rise of phoenix from the ashes”. Starting in late 70’s as a small non-traditional sector of export, Ready-made garments (RMG) emerged as a promising export earning sector of the country by the year 1983. In 1978 the country had less than a dozen small manufacturers of garments industry. But within a span of two decades, the country now

has 2963 registered RMG factories. The sector is now the leading Foreign Exchange earner of the country and a strong driving force of the economy. The RMG sector of Bangladesh now contributes 76% of the country’s total Foreign Exchange earnings through export. For the last 20 years, the sector consistently flourished, sometime @20%. The statistics given in the next page testifies the status and the amazing growth of RMG sector.

It is estimated that garments sector now employ over 1.7 million workers of whom about 85% are women. Starting with an export earning of Tk. 1.00 crore in 1979-80, the phenomenal growth of the industry has created a history by earning of about Tk. 20,500.00 crore in the 1998-99 fiscal year out of Tk. 27,100.00 crore of total export earning of the country which is 75.66% of the total export.

Bangladesh now exports about 100 categories of garment products. The European Union is the topmost buyer of the Bangladeshi garment products. About 52.38% of the total RMG exports were made to the European Union during 1998-99 totaling US$ 2105.64 million. Bangladesh is the fifth largest garments exporter in the European Union Market. The second largest buyer of our RMG products is the United States of America, which import 42.24 of our exported RMG products totaling US$ 1738.33 million. In US market Bangladesh has occupied the sixth position through exporting of the RMG products. This impressive performance has been possible because of the cheap labor cost of production as well as for the high product quality.

Export Finance: “Export or perish” is the slogan of all the countries in the world to have a favorable Balance of payment position in their International Trade and to accumulate national wealth in increasing the GNP of the country. As such, all the countries endeavor to formulate an export policy conducive in fostering the export of the country and thereby increasing export earning. Government therefore always provides some sort of incentives or subsidies in the export trade of the country. The garments in our country are the most vital export parties. About 76% of the total export is made by the garments industries. So considering the significant contribution of this sector the ‘Private Commercial Banks’ have undertaken to provide various soft arrangements and financial incentives and facilities in order boost up the export of RMG sector. Bangladesh Bank issues guidelines to all schedule banks from time to time streamlining the procedures for providing export credit to the RMG sector which are enumerated below:

Working Capital: Against irrevocable Letter of Credit received by the Ready Made Garment Industries, the bank may provide pre-shipment credit including the Back to Back Letter of Credit up to 90% of the value of the export order. For instance, if the amount of a Back to back Letter of Credit opened by the bank is equivalent to 75% of the value of export order, the bank may provide credit facilities in local currency equivalent to 10% to 15% of the value of export order for meeting other local expenses e.g., salary, wages, electricity bill etc.

Back to Back L/C: Banks may extend Back to Back credit facilities to the extent to cover all genuine export orders to garments units enjoying high reputation and standing without asking for any margin or collateral. Back to Back L/C (BTB L/C) facilities may

be allowed against irrevocable Letter of Credit issued by the International Banks of repute. Local Procurement of Fabrics: Banks should also provide credit facility towards working capital to the local fabric manufacturing units on the strength of local Back to Back Letter of Credit opened by the Ready Made Garment Industries against export orders.

BTB L/C for Import of Raw materials to the Supplier/Manufacturer of Fabrics /Accessories: Banks may also open Back to Back Letter of Credit for import of yarn, dues, chemicals, sizing materials for the supplier or manufacturer of fabrics/accessories of garments without margin on deferred payment basis.

Concessional Interest Rate: Concessional rate of interest is being provided to the garment industries for a period of 180 days as pre-shipment credit.

Category Of Back To Back Letter Of Credit: The back to back letter of credit are of

two categories:

a) Foreign Back to Back of Letter of Credit

b) Locals Back to Back Letter of Credit.

Foreign Back to Back Letter of Credit :Because of inadequate supply of locally

produced quality fabrics and accessories, we have to import about 60% of the fabrics

and accessories for use in the garments industry. So the question of opening foreign

back to back letter of credit arises.

Local Back to Back Letter of Credit: On account of readymade garment units under

bonded warehouse system banks may open local BTB L/C against any export order and

master L/C in favor of local manufacturer-cum-supplier of fabrics and accessories.

3.2.1.7 DOCUMENTS USED IN FOREIGN TRADE RELATING TO BILLS

Every import and export involves documentary transaction of goods and services between or among the parties involved (or between or among their supporting banks). Most of the foreign trade and their exchanges are now held in the form of documentary Letter of Credit (LC). Documentary letters of credit issued to finance the shipment of

goods involve the drawing of bills of exchange, which have to be accompanied by what is known as “full set of shipping and non-shipping documents”. The attachment of these documents to the bill is an essential obligation of the seller and the buyer so as to serve the purpose. These typical documents can be divided into two main parts.

These documents are Shipping documents and Non-shipping documents. These documents are the followings:

Shipping Documents: Shipping documents are those documents, which are mainly given by the exporter to the importer after the shipment of the goods or services as been negotiated. It is impossible to release the goods or commodity from ship/port without these documents. These documents are described below: Bills of lading: The bill of lading is one of the most important shipping documents,

which accompany bills of exchange drawn under letters of credit. It is an evidence of

the fact that the exporter has dispatched the goods and gives the exporter title to the

goods and enables him to collect them on arrival at the destination.

The bill of lading is more like a transferable debenture. It is a document signed and

issued by the shipping company or it’s agent acknowledging the receipt of specified

goods for carriage and embodying an undertaking that the goods will be delivered to a

consignee named in the bill, or to his order or assigns, or merely to order.

The document specifies the port of shipment, the destination, and the conditions under

which the goods are received for carriage.

“Clean” and “Claused” Bill of Lading: A bill of lading that indicates that the goods

are in apparent good condition without any without any qualification is known as a

“clean” bill of lading. If, on the other hand, it bears some remark relating to a defect in

packing, such as ‘three bags torn’, ‘some cases broken’, ‘received in dampened

condition’, ‘goods not sufficiently packed’, etc., it is known as a “foul” or “dirty” bill of

lading. It is also known as a “claused” bill of lading. A “claused” bill of lading is not an

acceptable document, unless specifically provided for in the sale and purchase contract.

Such remarks protect the carrier against any claim for losses attributable to bad

packing. They also protect every one else who comes in possession of the bill of lading

for value.

“On Board ” and “Received for Shipment” Bill of Lading: When shipping space is

ample and sailings are regular this type of certificate is easy to get. An “on board ” bill

of lading is satisfactory from the viewpoint of the all the parties concerned. The

consignor is assured that the goods have been loaded and will reach the destination. The

consignee has equal assurance when he receives the documents that the goods will

arrive in time and will be available to him on surrender of the documents.

“Received for shipments” bills of lading have, therefore, vital lacunae and are not

acceptable to buyers and bankers. The buyer receives the documents but may not be

sure that he will get the goods in time. The merchandise may consist of perishable

goods, which, if delayed in transit, may not remain saleable. Buyers and banks,

therefore, ask for “on board” bills of lading.

“Through” Bills of Lading: Sometimes, when goods are carried overland and

overseas, or during the sea voyage have to be transshipped at an intermediate port, the

carrier that takes the goods first issued a “through” bill of lading. A railway company

may issue a “through” bill of lading that serves both as a railway receipt and some kind

of bill of lading for the sea voyage. Such a document, however, lacks authority to bind

the ship owner who undertakes the sea portion of the carriage. This kind of the bill does

not provide any assurance that actual shipment on the named vessel took place. The

banker has a right to reject such a bill in connection with a credit, which calls for

delivery of a bill of lading, unless there is a specific authorization for its acceptance.

“Straight” and “Order” Bill of Lading: A “straight” bill of lading is one, which is

made out in the name of a consignee. At the port of destination it is not necessary to

present a straight bill of lading to take the delivery of goods, except where it is

necessary for the purpose of identification. An “order” bill of lading is one, which is

made out to the order of the consignor or supplier. It can be transferred by endorsement

to other parties. Such a bill of lading usually contains a condition directing the shipping

company to notify the consignee when the goods arrive.

Charter Party Bills of Lading: This is a contract for the hire of whole ship or part of a

ship setting forth in detail the rights and obligations of the owners and liners or

charterers. Charters are usually arranged by “ship brokers”. They are for their services

charging a small commission on the total amount agreed upon for hire.

Charters are divided into “time” charters and “voyage” charters. The former is for

specified period of time, while the latter is for particular voyage. A charter party

specifies, among other details, the particular ports to which the ship is to go, the cargo

to be carried, and the freight to be paid for the hire of the ship.

Stale Bill of Lading: A bill of lading is said to be “stale” if it bears a date subsequent

to the expiry date of the credit under which the goods are shipped. It shows that the

goods were put on board the vessel on a date later than that authorized under the credit.

A bill of lading may also be considered stale if it is presented so long after the sailing of

the carrying vessel that the goods will be reaching the port of destination long before

the buyer will get possession of the goods when they arrive at destination.

Airway Bill: Airway bills or air consignment notes are issued by airlines or their agents

as a receipt of consignment received as carrier. It is normally issued in triplicate and by

the airline. The first copy is for the carrier, the second for the consignee and the third

for the consignor. An airway bill does not constitute a title to the goods and is,

therefore, not a negotiable instrument.

Insurance Policy: There are many risks involved in the import and export business as

the goods are shipped and travel thousands of miles and often more than that to the

buyer’s destiny. There are obvious risks of damage, loss, or destruction of goods during

transit by sea, air or by road. For this reason, the buyer asks insurance of goods to be

shipped to him from the exporter or seller of them. Insurance policy is a kind of

agreement between exporter and Insurance Company to reduce the risk. Exporter sends

this document with shipments to the importer.

Marine Insurance Policy: A marine insurance policy is a contract between the insurer

and the insured whereby the former, in consideration of the payment of a premium by

the latter, agrees to indemnify the latter against loss incurred by him in respect of goods

exposed to “perils of the sea” or to the particular perils insured against. The marine

insurance is the responsibility of the buyers (consignee) under F.A.S., F.O.B. and C&F

contracts and of the seller (consignor) under C.I.F. contract. The sum insured should be

the C.I.F. value of the goods. Where the C.I.F. value cannot be ascertained the amount

should not be less than the amount of the drawing under the credit or invoice value of

the goods. Like a bill of lading it must be negotiated and endorsed where it is payable

to order.

Bill of exchange: The Payment for the goods exported under a letter of credit is

received by the seller or exporter through the medium of a bill of exchange (commonly

called bill or draft) drawn on the buyer for the amount depending on the credit. It is

known as a documentary bill when it is drawn under a documentary credit and hence is

accompanied by other shipping documents. Through this bill of exchange the exporter

orders the importer to pay the value of the goods shipped through this document.

Importer or the respective bank acting on behalf of the importer must sign on this

document. The bill is usually drawn in duplicate of sets of two with the original copy

being known as the First of Exchange and the duplicate the Second of Exchange.

Invoice: The invoice is the important document of the letter of credit. It is the seller’s

bill for the merchandise. In other words, the invoice is a document containing the

description of the goods shipped, their marks, make, quantity, and prices, charges for

packing, freight, insurance etc. as are applicable as per terms of the contract as well as

the name of the carrying vessel and the date of sailing.

There are different types of invoices in use. Such as:

The Commercial Invoice: The commercial invoice is a statement of accounts drawn

by the seller address to the buyer giving the details of the amount stated therein which

is based on the terms of the contract entered into between the buyer and the seller. The

exporter must dully sign a commercial invoice.

Details found in a typical commercial invoice are name and address of the buyer and the seller, the vessel of shipment, port of discharge etc. Also the shipment import and export permit numbers, the number of contract and invoice and other essential details of the transaction are recorded on the invoice. The financial terms of the sale, such as

whether under letter of credit, sight drafts etc., are given. The number of packages and the identifying mark and numbers of them are clearly indicated. The goods contained in the packages are detailed and prices are given item by item. The commercial invoice is neither a document of title, nor it is negotiable. Its main utility is that it acts as a book-device for both seller and buyer. The Consular Invoice: Another special type of invoice named consular invoices are

required depending upon the trade regulations in importing country. It is made out in a

prescribed format, certified and signed by an individual of the importer’s country

national working as a consulate in the exporter country. In some cases it is also seen

that exporter’s own invoice is authenticated by the embassy or consulate instead of

issuing consular invoice. This type of invoice is called legalized invoice.

The Proforma Invoice: Another type of invoice is proforma invoice, which is a form

of quotation to a potential buyer.

The Certified Invoice: Certified invoice is an invoice, which bears a signed statement,

by someone in the importer’s country who have inspected the goods and found them in

accordance with those specified in the contract.

The Certificate of Origin: The regulations in force in some countries require a

certificate of origin of imported goods to be produced before clearance of by customs

and assessment of duty. The certificate is usually required where goods from certain

countries receive preferential treatment, or the import of goods from some countries is

partially or wholly prohibited. This is generally issued by the Chambers of Commerce

of the exporting country and is arranged by the exporter. Sometimes, the certificate of

origin is endorsed on the back of the relative invoice, in which case the whole

document is known as a “certified invoice”.

The Packing List: A packing list serves to indicate the exact nature, quantity, and

quality of the contents of each package in a shipment. The list helps the importer to

identify the goods and check them against his order. Banks may require such a list

when they have financial interest in the merchandise. Clearance of goods through

customs is also facilitated by packing list.

The Other Certificates: Some other certificates are also required with of particular

commodities. A “weight certificate”, signed by a public agency, is often necessary with

goods sold in bulk, such grains, oils and similar products. The importing country may

insist on a “food inspection certificate” from an official inspecting service of the

exporting country when certain foodstuffs of perishable nature such as meat, edible fats

etc., are imported. A “non- dumping certificate” showing the comparative difference in

the domestic and export selling prices, is sometimes required with imports in some

countries to ensure that goods are not being sold at very much lower prices in the

importing countries than the domestic markets of the exporting country.

Inspection Certificate: This is normally issued by an independent inspection company

located in the exporting country certifying or describing the quality, specification or

other aspects of the goods, as called for in the contract and/or the L/C.

Quality Control Certificate: Sometimes the sale contract may demand a certificate

issued by a standards institute or quality control agency in the exporting country

indicating the quality of the merchandise shipped. This is known as a quality control

certificate.

GSP Certificate: When tariff concession is sought from those developing countries

providing preferential treatment to exporters of the developing countries, a GSP

certificate should be obtained from the Export Promotion Bureau (EPB).

Besides the usual shipping documents required under the Letter of Credit or a contract

entered into, the shipping documents in our country are incomplete without being

supported by Exchange Control Forms. These Exchange Control Forms are known as

GRPP Forms, which are completed and submitted by the exporter to the customs

authorities at the time of shipment.

Non-shipping Documents: There are a number of other documents, which have

importance in dispatch of goods in foreign trade. A brief discussion on these documents

is given below:

The Documentary Letter of Credit: A Letter of Credit is issued by a bank (Issuing

Bank) at the request of an importer (applicant) in favor of an exporter (beneficiary)

from whom the importer has contracted to purchase some commodity or commodities.

The importer, the exporter, and the issuing bank are, thus, obviously parties to a Letter

of Credit. There are, however, one or more than one bank that are involved in various

capacities and at various stages to play an important role in the total operation of the

credit.

The Charter Party: In the international trade most of the goods are transferred by

ships. Before exporting of the goods the exporting company or the individual exporter

has to hire a full ship or the part of a ship for the transportation purpose of the

contracted merchandise. A written agreement between the shipping company and the

exporting company delineating the hire of the ship or some portion of it is called

charter party. If the full or the portion of the ship is hired for a particular time period

this is called a “time charter party”. If the full or the portion of the ship is hired for a

particular route, without mentioning the time period then this is called a “voyage

charter party”.

The Ships Reports: In the ship’s report the following information is found:

(a). The name of the ship.

(b). The name of the registered port and the registration number.

(c). Nationality of the ship owner or the name of the state belonging to the ship.

(d). The name of the loading port.

(e). The name of the captain of the ship or the principal of the ship.

(f). Number of the employees and the officers of the ships.

(g). Reports of things used by the employees, captain and officers of the ship.

(h). Detail reports of the transported merchandise.

(i). The name and address of the exporter.

The Trust Receipt: The letter through which the importer recognizes the ownership of

the export or the exported goods and services to pay the value of the goods by the sales

value of his imported goods. On the requirement of the money the importer submits all

the documents of import with the bank and takes loan. Banks keeps the trust letters

with it and returns all other documents to the importer for the delivery of the imported

goods.

The Bill of Entry: Bill of entry is the details report of the imported goods submitted to the port authority or customs authority after the imported goods had reached to the importer’s port. By using the bill of entry, the port authority or customs authority can easily identify the importer’s goods from the other goods. The port authority begins to delivery the goods after they have received the bill of entry. The Bill at Sight: Sometimes, the importer cannot know the details report before

making import. So, he is not able to fill up the bill of sight. In this circumstance, the

importer expresses an individual announcement to the customs authority by expressing

his failure about the bill of sight that he is unable to fill up the bill of sight without

opening the package of the imported goods. This bill of sight is called uniformed bill of

sight. After this declaration the custom authority allows the importer to fill up the bill

of sight after opening the package of the imported goods.

The Letter of Indemnity: If any time, due to some sudden reasons the export

documents don’t reach to the importer duly but goods loaded ship reaches accordingly

then importer gets the ownership of the imported goods by a letter issued by the bank

and signed by both the bank and the importer, such letter is called the letter of

indemnity. Through this letter the bank promises the importer to make indemnity if

there is any demurrage in the delivery of goods.

The Dock Receipt: Dock receipt is that receipt, which is issued by the dock authority

to the exporter after the exportable goods reach to the dock and the authority, gives

clear opinion about the goods to be all right for export.

The Mate’s Receipt: If the exporter does not present the exportable goods to the dock

but presents to the ship captain or mate’s then the ship’s captain gives the exporter a

receipt, which is called mate’s receipts. This is actually a raw receipt.

The Advice Note: The exporter sends a letter to the importer before the necessary

documents like probable sending date, route and other documents reaches the importer.

Through the advice note the exporter informs the importer about exportable goods

before the sending of actual necessary documents.

3.2.1.8 FINANCIAL ASSISTANCE PROVIDED BY THE BANKS

In international trade the most two important terms are the export and the import. As the

mostly dependable financial institution banks are in a position to provide sufficient

financial assistance to the importer and more commonly the exporter so as to conform

smooth flow of a large bulk of foreign trade.

Now a day, both the importers and the exporters of our country receive and/or enjoy a

considerable amount of financial assistance from commercial banks and other financial

institutions.

Pre-Shipment Finance: Pre-shipment finance in taka, more popularly known as

‘Packing Credit Advance’, is short-term working capital finance specially provided to an

exporter against the documentary evidence of having entered into export commitments.

The packing credit is granted at a pre-shipment stage, i.e., at the stage prior to the goods

being shipped and the credit is given for procuring raw material, for paying

manufacturing and packing charges and payment of insurance premium and freight. As

and when the goods are shipped and shipping documents are obtained, the pre-shipment

finance is to be liquidated against the proceeds of export documents tendered.

Post-Shipment Finance: The post-shipment finance is the financial facility extended by

the banks after the goods have been shipped and against the submission of export

documents evidencing the dispatch of goods. Post-shipment finance portfolio is in

existence since the day international trade has been known, but more precisely after the

First World War. After that the international trade is ever increasing, and the shipping

documents against which the exporters are getting financial facilities are well accepted.

Foreign Bills Purchased: This facility is granted when the financing banker is financing

against the shipping documents presented by the exporter but the set of documents

presented is not drawn under a Letter of Credit (LC).

3.2.2 Foreign RemittanceAccording to Foreign Exchange Regulation Act 1947, the commercial banks or the authorized dealer who has the Bangladesh Bank authorization can do Foreign Exchange. According to this Act, TC (Traveler Cheque), Drafts are included in Foreign Exchange. SIBL, Foreign Exchange Branch provides its customer with the foreign remittance facilities by issuing Foreign Demand Drafts, Traveler Cheque, Endorsing passport for cash etc.

3.2.2.2 Traveler’s Cheque:

It is the safest way to carry money from one country to another. It can be change in any

country of the world. Even if the Traveler Cheque (TC) is lost then the holder of the T.C

can inform it to the bank and the bank will inform it to the agencies so that no one can en-

cash the T.C while issuing a Traveler Cheque (T.C) a signature is needed, so that no one

can en-cash it except the holder and also another signature is needed in encashment in

front of the banker. So Traveler Cheque (T.C) is the safest way to carry out side the home

country.

A customer is permitted to endorse maximum US$ 3000 per year for travel in countries other than SAARC countries and US$ 1000 for travel in SAARC countries. If SAARC countries are to be visited by road then maximum US$ 500 can be endorsed per passport per year. At a time cash cannot be endorsed over US$ 500.

Issue of Travelers Cheque: There are some requirements, which are to be fulfilled by the TC publisher:

1. Passport holder himself to be present to issue TC purchasing.

2. The passport has to be a valid one.

3. Air ticket has to be confirmed.

4. Steps involved in issue of TC:

5. After verifying all these documents, the customer as asked to fill up prescribed

application form.

6. In the application the customer states the amount he is willing to endorse and it is

to be verified that his required amount is within the stipulated amount.

7. Then the customer pays cash or by debiting hid account the Travelers Cheque is

issued.

8. Endorsement is given on the passport and on the ticket. Customer fills up the

Travel and miscellaneous form.

9. Purchase application form is prepared and handed over to the purchaser along

with the Traveler Cheque.

10. Entry is given in three registers: Foreign Currency Issue Register, Travelers

Cheque “On Hand” Register and Foreign Currency “In Hand” Register.

Payment of Travelers Cheque: When a customer wants to encash his TC, he has to show his passport and it is to be verified from the passport that he has traveled outside the country. Then -

1. The TC will have to be scrutinized very strictly;

2. If everything in the TC is in order then the customer will be asked to give

signature on the place of “Counter Signature”;

3. If the signature agrees with the one in place of “the signature of the holder” then

the payment will be made through giving cash to the customer or crediting his

A/c;

4. Travelers Cheque will be crossed and endorsement given on the back of the

received TC.

3.2.2.3 Endorsement of cash

Cash Foreign Currency can also be remitted through endorsement in the passport. In case of endorsing cash on passport, the requirements are same as in case of travelers cheque. But the only exception is that the passport holder is not required to be present by himself.

3.2.2.4 Credit Card

Through its Credit Card. Social Investment Bank Limited has not only initiated a new

scheme but also brought a new life style concept in Bangladesh. Now the dangers and the

worries of carrying cash money are memories of the past.

Credit Card comes in both local and international forms, giving the client power to buy

all over the World. Now enjoy the conveniences and advantages of Credit Card as you

step into the new millennium.

Need to maintain FDR(Fixed Deposit Receipt) in SIBL in any branch.

3.2.2.5 Issue FDD

If any draft is send to the name of any organization from abroad then the draft is fill-up

from “C” where the draft holder is to fill-up who has send this draft, from where this

draft has been sent etc. whether family purpose or not, if the draft has been family

purpose then no VAT is required against the draft. For payment of draft concerned officer

maintains a register, which is called Register for foreign Currency paid.

3.2.2.6 FOREIGN CURRENCY ACCOUNT

The accounts maintained in foreign currencies are known as foreign currency account. The Authorized Dealers may open foreign currency accounts in the names of followings without prior approval from Bangladesh Bank.a) Bangladesh nationals residing abroad.

b) Foreign nationals residing in Bangladesh and also the foreign firms registered

abroad and operating in Bangladesh or abroad.

c) Foreign Missions and their expatriate employees.

Branches are mainly deals with two types of foreign currency accounts, namely:

a) Non-Resident Foreign Currency Deposit Account (NFCD).

b) Resident Foreign Currency Deposit Account (RFCD).

Non-Resident Foreign Currency Deposit Account (NFCD)

All nonresident Bangladesh nationals and persons of Bangladesh origin including those having dual nationality and ordinarily residing abroad, may maintain interest bearing

time deposit accounts named “Not-Resident Foreign Currency deposit (NFCD)”Accounts with the Ads.

Eligible persons:a) Bangladesh nationals working and earning abroad.

b) Bangladesh nationals serving with Embassies /High Commission of Bangladesh in

foreign countries including officers/Staff of Govt./Semi

Govt./Autonomous/nationalized sector posted/Deputed abroad.

c) Shore staff posted abroad (Crew of BSC not entitled).

d) Foreign nationals and companies registered and /or incorporated abroad,

institutional investors and 100% (Hundred Percent) Foreign owned industrial unit

of EPZ (Minimum Amount USD 25000/- or equivalent).

Resident Foreign Currency Deposit (RFCD): Ordinary resident of Bangladesh may open and maintain Resident Foreign Currency Deposit (RFCD) accounts with foreign exchange brought-in at the time of their return from travel abroad. Any amount brought in with declaration to Custom Authorities in form FMJ and up to US$ 5000/- brought in without any declaration can be credited to such accounts.

Deposit:The depositors must submit a declaration mentioning the date of return from abroad and the amount of Foreign exchange brought in at the time of crediting to RFCD account to the effect that Foreign exchange (i) is not a receipt against export of goods or services from Bangladesh (ii) is not a commission due from abroad arising from business in Bangladesh.

3.2.2.7 Telegraphic Transfer (TT)

TT is one of the important tools of foreign currency from one country to another. The

person who wants to send TT to the abroad at first he /she has to deposit amount

mentioned in voucher to the cash department. The bank branch through their respective

NOSTRO account that is maintaining any foreign bank account outside the country

generally performs it. The originating bank sends a message to the paying foreign bank

for making payment against the mentioned TT account number. The foreign make

payments to the party and also make debit ‘account’ against respective bank. At the same

time foreign bank send advice to Head Office ID division for acknowledgement the

payment.

To know how much customers are satisfied is a strategic goal for all organizations

involved in the delivery of customer service like a bank. Customer satisfaction is the key

to success. So banks are want customers to be happy with the products and services they

provide. If they feel they have received good value for their money, then business will

prosper

Satisfying customers is an essential element to staying in business in this

modern world of global competition. All must satisfy and even delight their

customers with the value of their services to gain their loyalty and repeat

business. Customer satisfaction is therefore a primary goal of process

improvement programs. A key to success is increasing the value that provides to

customers, and keeping up with customers rising expectations.

4.1 Need to Satisfy Customers of SIBL

Consumers form expectations about the value of marketing offers and make buying

decisions based on expectations. Customer satisfaction with a purchase depends on the

product’s actual performance relative to a buyer’s expectations. A customer might

experience various degrees of satisfaction. If the product’s performance falls short of

expectations, the customer is dissatisfied. If performance matches expectations, the

customer is satisfied. If performance exceeds expectations, the customer is highly

satisfied or delighted.

♣ Today’s most successful banks are raising expectations—and delivering performance

to match. These banks embrace total customer satisfaction.

4.2 Identifying Customers Need of SIBL

Historically, customers were excluded from the product development process. When this

approach is used, the organization producing the product is taking a chance that will

satisfy the customer. In a competitive market place that is global in scope, such an

approach can be disastrous. In the customer side, customer needs are identified clearly as

a normal part of product development.

♣ Most foreign banks and commercial banks are diversify their product according to

customers needs and with evolution of modern banking product.

4.3 SIBL Should Provide Quality as the Core Service

Retention strategies will have little long-term success unless there is a solid base of

service quality and customer satisfaction to build on. This doesn’t necessarily mean that

the firm has to be the very best among its competitors, or “world class” in terms of

quality and customer satisfaction. It must be competitive, however, and frequently better

than that. It does no good to design relationship strategies for inferior services.

♣ Although foreign banks take high charge for their service, people go to them to get

quality service.

4.4 Keep Relationship with Customers of SIBL

Relationship marketing essentially represents a paradigm shift within marketing— away

from an acquisitions/transaction focus toward a retention/relationship focus. Relationship

marketing (or relationship management) is a philosophy of doing business, a strategic

orientation, that focuses on keeping and improving current customers rather than on

acquiring new customers

♣ Banks need to keep relation with existing customer otherwise they will go to other

bank where they will get more facility.

4.5 To Satisfy Customers of SIBL

Becoming a customer-centric organization requires operational management and process

changes to allow the company to quickly adapt to changing customer behaviors. This

may include greater employee empowerment; flexible product/service pricing models;

and expanded product features/benefits. Learning to be truly customer-centric, however,

is not an easy goal to achieve.

Taking a structured, step-by-step look at the current environment is the best way to

identify the right enhancements required by the CRM strategy. This includes:

Identifying services and products being supported

Mapping current business workflows, touch points and inter-dependencies

Reviewing existing technologies, features and capabilities

Discussing operational and business vision

Defining business requirements

Developing enhanced business workflows and processes

Identifying technology functionality gaps

Mapping functionality to business processes

Developing new technology and functionality framework

Developing a conceptual design and prototype plan

Defining business requirements

Job satisfaction of the bankers, who have an important place in the economy, will affect

the quality of the service they render. Job satisfaction of a service oriented organization

like bank is more important. Because if they are satisfied they will work more and will

give service to customers properly.

Job satisfaction is one of the criteria of establishing a healthy organizational structure in

an organization. Employee morale problems can be the result of any number of

workplace problems. If employees don't like a particular supervisor, or feel that their

work isn't appreciated, results will suffer. Getting to the root of the problem is sometimes

a challenge.

Job satisfaction as the sum of all negative and positive aspects related to the individual's

salary, his/her physical and emotional working condition s, the authority s/he has, the

autonomous usage of this authority, the level of success s/he has maintained and the

rewards given due to this success, the social statute maintained in relation with h is/her

job, and his/her relations with his/her colleagues and administrators.

5.1 The Importance of Job Satisfaction to Satisfy Employee of SIBL

The most important evidence which indicates that the conditions of an organization got

worsened, is the low rate of job satisfaction.

Individuals want to maintain statute, high ranks and authority by giving their capabilities

such as knowledge, ability, education, health etc. to their jobs for which they spend most

of their time. The individuals who cannot meet their expectations with regard to their jobs

become dissatisfied. Thus, this dissatisfaction affects the organization for which s/he

works.

Job satisfaction is very important for a person's motivation and contribution to

production. Job satisfaction may diminish irregular attendance at work, replacement of

workers within a cycle or even the rate of accidents.

5.2 Need to follow Frederick Herzberg’s Two dimensions to satisfy employee of

SIBL

Frederick Herzberg theorized that employee satisfaction depends on two sets of issues:

"hygiene" issues and motivators. Once the hygiene issues have been addressed, he said,

the motivators create satisfaction among employees.

Hygiene issues (Dissatisfiers)

Company and administrative policies

Supervision

Salary

Interpersonal relations

Working conditions

Motivators (Satisfiers)

Work itself

Achievement

Recognition

Responsibility

Advancement

To apply Herzberg's theory to real-world practice, let's begin with the hygiene issues.

Although hygiene issues are not the source of satisfaction, these issues must be dealt with

first to create an environment in which employee satisfaction and motivation are even

possible.

5.2.1 Company and administrative policies. An organization's policies can be a great

source of frustration for employees if the policies are unclear or unnecessary or if not

everyone is required to follow them. Although employees will never feel a great sense of

motivation or satisfaction due to your policies, you can decrease dissatisfaction in this

area by making sure your policies are fair and apply equally to all. Also, make printed

copies of your policies-and-procedures manual easily accessible to all members of your

staff. If you do not have a written manual, create one, soliciting staff input along the way.

If you already have a manual, consider updating it (again, with staff input). You might

also compare your policies to those of similar practices and ask yourself whether

particular policies are unreasonably strict or whether some penalties are too harsh.

5.2.2 Supervision. To decrease dissatisfaction in this area, you must begin by making

wise decisions when you appoint someone to the role of supervisor. Be aware that good

employees do not always make good supervisors. The role of supervisor is extremely

difficult. It requires leadership skills and the ability to treat all employees fairly. You

should teach your supervisors to use positive feedback whenever possible and should

establish a set means of employee evaluation and feedback so that no one feels singled

out.

5.2.3 Salary. The old adage "you get what you pay for" tends to be true when it comes to

staff members. Salary is not a motivator for employees, but they do want to be paid

fairly. If individuals believe they are not compensated well, they will be unhappy

working for you. Consult salary surveys or even your local help-wanted ads to see

whether the salaries and benefits you're offering are comparable to those of other offices

in your area. In addition, make sure you have clear policies related to salaries, raises and

bonuses.

5.2.4 Interpersonal relations. Remember that part of the satisfaction of being employed

is the social contact it brings, so allow employees a reasonable amount of time for

socialization (e.g., over lunch, during breaks, between patients). This will help them

develop a sense of camaraderie and teamwork. At the same time, you should crack down

on rudeness, inappropriate behavior and offensive comments. If an individual continues

to be disruptive, take charge of the situation, perhaps by dismissing him or her from the

practice.

5.2.5 Working conditions. The environment in which people work has a tremendous

effect on their level of pride for themselves and for the work they are doing. Do

everything you can to keep your equipment and facilities up to date. Even a nice chair

can make a world of difference to an individual's psyche. Also, if possible, avoid

overcrowding and allow each employee his or her own personal space, whether it be a

desk, a locker, or even just a drawer. If you've placed your employees in close quarters

with little or no personal space, don't be surprised that there is tension among them.

Before you move on to the motivators, remember that you cannot neglect the hygiene

factors discussed above. To do so would be asking for trouble in more than one way.

First, your employees would be generally unhappy, and this would be apparent to your

patients. Second, your hardworking employees, who can find jobs elsewhere.

5.2.6 Work itself. Perhaps most important to employee motivation is helping individuals

believe that the work they are doing is important and that their tasks are meaningful.

Emphasize that their contributions to the practice result in positive outcomes and good

health care for your patients. Share stories of success about how an employee's actions

made a real difference in the life of a patient, or in making a process better. Make a big

deal out of meaningful tasks that may have become ordinary, such as new-baby visits. Of

course employees may not find all their tasks interesting or rewarding, but you should

show the employee how those tasks are essential to the overall processes that make the

practice succeed. You may find certain tasks that are truly unnecessary and can be

eliminated or streamlined, resulting in greater efficiency and satisfaction.

5.2.7 Achievement. One premise inherent in Herzberg's theory is that most individuals

sincerely want to do a good job. To help them, make sure you've placed them in positions

that use their talents and are not set up for failure. Set clear, achievable goals and

standards for each position, and make sure employees know what those goals and

standards are. Individuals should also receive regular, timely feedback on how they are

doing and should feel they are being adequately challenged in their jobs. Be careful,

however, not to overload individuals with challenges that are too difficult or impossible,

as that can be paralyzing.

5.2.8 Recognition. Individuals at all levels of the organization want to be recognized for

their achievements on the job. Their successes don't have to be monumental before they

deserve recognition, but your praise should be sincere. If you notice employees doing

something well, take the time to acknowledge their good work immediately. Publicly

thank them for handling a situation particularly well. Write them a kind note of praise. Or

give them a bonus, if appropriate. You may even want to establish a formal recognition

program, such as "employee of the month."

5.2.9 Responsibility. Employees will be more motivated to do their jobs well if they

have ownership of their work. This requires giving employees enough freedom and

power to carry out their tasks so that they feel they "own" the result. As individuals

mature in their jobs, provide opportunities for added responsibility. Be careful, however,

that you do not simply add more work. Instead, find ways to add challenging and

meaningful work, perhaps giving the employee greater freedom and authority as well.

5.2.10 Advancement. Reward loyalty and performance with advancement. If you do not

have an open position to which to promote a valuable employee, consider giving him or

her a new title that reflects the level of work he or she has achieved. When feasible,

support employees by allowing them to pursue further education, which will make them

more valuable to your practice and more fulfilled professionally.

5.3 Six factors that can influence job satisfaction of SIBL

When these six factors were high, job satisfaction was high. When the six factors were

low, job satisfaction was low. These factors are similar to what we have found in other

organizations.

5.3.1 Opportunity.

Employees are more satisfied when they have challenging opportunities at work.

This includes chances to participate in interesting projects, jobs with a satisfying

degree of challenge and opportunities for increased responsibility. Important: this

is not simply "promotional opportunity." As organizations have become flatter,

promotions can be rare. People have found challenge through projects, team

leadership, special assignments-as well as promotions.

Actions:

Promote from within when possible.

Reward promising employees with roles on interesting projects.

Divide jobs into levels of increasing leadership and responsibility.

It may be possible to create job titles that demonstrate increasing levels of

expertise which are not limited by availability of positions. They simply

demonstrate achievement.

5.3.2 Stress.

When negative stress is continuously high, job satisfaction is low. Jobs are more

stressful if they interfere with employees' personal lives or are a continuing source

of worry or concern.

Actions:

Promote a balance of work and personal lives. Make sure that senior

managers model this behavior.

Distribute work evenly (fairly) within workteams.

Review work procedures to remove unnecessary "red tape" or

bureaucracy.

Manage the number of interruptions employees have to endure while

trying to do their jobs.

Some organizations utilize exercise or "fun" breaks at work.

5.3.3 Leadership.

Employees are more satisfied when their managers are good leaders. This

includes motivating employees to do a good job, striving for excellence or just

taking action.

Actions:

Make sure your managers are well trained. Leadership combines attitudes

and behavior. It can be learned.

People respond to managers that they can trust and who inspire them to

achieve meaningful goals.

5.4.4 Work Standards.

Employees are more satisfied when their entire workgroup takes pride in the

quality of its work.

Actions:

Encourage communication between employees and customers. Quality

gains importance when employees see its impact on customers.

Develop meaningful measures of quality. Celebrate achievements in

quality.

5.4.5 Fair Rewards.

Employees are more satisfied when they feel they are rewarded fairly for the work

they do. Consider employee responsibilities, the effort they have put forth, the

work they have done well and the demands of their jobs.

Actions:

Make sure rewards are for genuine contributions to the organization.

Be consistent in your reward policies.

If your wages are competitive, make sure employees know this.

Rewards can include a variety of benefits and perks other than money.

5.4.6 Adequate Authority.

Employees are more satisfied when they have adequate freedom and authority to

do their jobs.

Actions: When reasonable:

Let employees make decisions. Allow employees to have input on decisions that will affect them. Establish work goals but let employees determine how they will achieve

those goals. Later reviews may identify innovative "best practices."

I.T. is a well known word, meaning Information Technology. The developed

countries of the world reached to the peak of information technology. SIBL have not

alternative to expand of information technology. Tight now, SIBL are facing uneven

competition with many foreign banks in the country. For this, SIBL will have to take

necessary preparation form this moment.

Information Technology and Flow of Information is become very important in the

present world. Social Investment Bank need to develop all their banking transaction

with the help of this technology and need to introduce online banking.

6.1 What is Online Banking?

Most people heard a lot about online banking but probably haven't tried it themselves.

People still pay their bills and deposit checks at bank’s branch, much the way their

parents did. They might shop online for a loan, life insurance or a home mortgage, but

when it comes time to commit, people can feel more comfortable working with his

banker or an agent they know and trust.

Online banking isn't out to change one’s money habits. Instead, it uses today's computer

technology to give people the option of bypassing the time-consuming, paper-based

aspects of traditional banking in order to manage finances more quickly and efficiently.

6.2 Origin of online banking

The advent of the Internet and the popularity of personal computers presented both an

opportunity and a challenge for the banking industry.

For years, financial institutions have used powerful computer networks to automate

millions of daily transactions; today, often the only paper record is the customer's receipt

at the point of sale. Now that its customers are connected to the Internet via personal

computers, banks envision similar economic advantages by adapting those same internal

electronic processes to home use.

6.3 Brick-to-click banks

Today, most large national banks, many regional banks and even smaller banks and credit

unions offer some form of online banking, variously known as PC banking, home

banking, electronic banking or Internet banking. Those that do are sometimes referred to

as "brick-to-click" banks, both to distinguish them from brick-and-mortar banks that have

yet to offer online banking, as well as from online or "virtual" banks that have no

physical branches or tellers whatsoever.

The challenge for the banking industry has been to design this new service channel in

such a way that its customers will readily learn to use and trust it. After all, banks have

spent generations earning our trust; they aren't about to risk that on a Web site that is

frustrating, confusing or less than secure.

Most of the large banks now offer fully secure, fully functional online banking for free or

for a small fee. Some smaller banks offer limited access or functionality; for instance,

you may be able to view your account balance and history but not initiate transactions

online. As more banks succeed online and more customers use their sites, fully functional

online banking likely will become as commonplace as automated teller machines.

6.4 Virtual banks

If anybody don't mind foregoing the teller window, lobby cookie and kindly bank

president, a "virtual" or e-bank may save very real money. Virtual banks are banks

without bricks; from the customer's perspective, they exist entirely on the Internet, where

they offer pretty much the same range of services and adhere to the same federal

regulations as corner bank.

Virtual banks pass the money they save on overhead like buildings and tellers along to

you in the form of higher yields, lower fees and more generous account thresholds.

6.5 SIBL will get advantage from online banking

Convenience: Unlike a corner bank, online banking sites never close; they're

available 24 hours a day, seven days a week, and they're only a mouse click away.

Ubiquity: If anybody out of state or even out of the country when a money

problem arises, he can log on instantly to his online bank and take care of

business, 24/7.

Transaction speed: Online bank sites generally execute and confirm transactions

at or quicker than ATM processing speeds.

Efficiency: One can access and manage all of his bank accounts, including IRAs,

CDs, even securities, from one secure site.

Effectiveness: Many online banking sites now offer sophisticated tools, including

account aggregation, stock quotes, rate alerts and portfolio managing programs

helps to manage all of assets more effectively. Most are also compatible with

money managing programs such as Quicken.

6.6 Feature that can be give in SIBL’s Online Banking

Making payments

Tracking payments

Stop payments by block cheque

Review personal account details, including balances and transactions

Schedule single and recurring transfers between eligible personal accounts

Pay bills online with the optional Online Bill Payment service

View images (front and back) of cleared checks and deposit slips

Receive e-mail notifications to alert to selected account activity

Schedule single one-time transfers or multiple transfers

Set up email notifications to be sent for balance amounts, specific checks cleared

or maturity dates

Transfer money

Open Accounts

Apply for loans

Make loan payments

7.0 SWOT ANALYSIS OF SIBL7.1 Strength:

Wide image

http://www.southtrust.com/st/PersonalBanking/OnlineBanking/OnlineBakingontheWeb/email_notifications.htm

http://www.southtrust.com/st/PersonalBanking/OnlineBanking/OnlineBakingontheWeb/p_onlinebanking_checkimage.htm

http://www.southtrust.com/st/PersonalBanking/OnlineBanking/OnlineBakingontheWeb/p_onlinebanking_billpayment.htm

http://www.southtrust.com/st/PersonalBanking/OnlineBanking/OnlineBakingontheWeb/p_onlinebanking_transferfunds.htm

http://www.southtrust.com/st/PersonalBanking/OnlineBanking/OnlineBakingontheWeb/p_onlinebanking_accountinformation.htm

Quality of service

High Commitment of Customer

Financial strength

Efficient management

State of art technology- SWIFT

Human resource expertise

First rate working environment

Diversification of product

7.2 Weakness: Lack Motivation of Workers

No marketing promotion

Number of branches are high, so less supervision of head office

Nor equipped by modern technology

No online banking facility

Lack of communication technology

7.3 Opportunity: Increasing demand of customer finance

Liberalization in create industry

Great optimism in macro industry

Investment in infrastructure development

The Globalization of Business

Foreign investment

Evolution of computer technology

7.4 Threats: Merger & acquisition of bank

Competitor

Similar type of retail banking products

Certain Bangladesh bank’s rules & regulation

Political instability

Crime in country

8.0 FINDINGS

Whatever I found during my internship activities is really a practical work environment

that I didn’t find earlier. This practical knowledge will sure encourage me and give me

backing when I will work in such a financial organization. While working I always tried

to keep my eyes and ears in knowing as best as is possible about the dealings of the

officials with the clients. My novice observation found the findings:

The first finding really made me dishearten there. There is no client service officer in

the branch. For the lacking of such a service hand the clients often suffer the losing of

their vital moments standing before the busy officials for information about their

business.

Like most of the private banks, SIBL also imposes a target deposit for collection

upon its employees. Every employee has to go out for the purpose of deposit collection,

which they call “development purpose”. It is an effective method no question about it,

since many banks of our country rely on this method. But sometime affect negatively and

cause job dissatisfaction. Officers of the desk, where workload is very high, hardly get

the chance to go out for development.

8.1 Findings From Customer Satisfaction Questionnaire

Analysis 1: Age range * Quality of customer service * Service offered Cross tabulation

Note: Most of young people are not satisfied with service offer by SIBL and quality of

customer service. That for may be SIBL don’t offer new technology oriented product.

Analysis 2:

Strongly satisfied Satisfied Neutral Dissatisfied

Process of work

0

2

4

6

8

Co

un

t

Note: The process of work in terms of structured, easy and swift most are satisfied.

Analysis 3:Ratio Statistics for Work meet specification / Performance compared expected

Service offered

Quality of customer service

Total Superio

r

Very satisfactor

yAbout

average

Somewhat unsatisfacto

ryStrongly satisfied

Age range

36-401 1

Total 1 1Satisfied Age

range31-35

0 1 1

36-40 1 0

Total 1 1 2Neutral Age

range21-25

1 0 0 0 1

26-30 2 2 1 0

31-35 1 2 1 1

Total 4 4 2 1 11Dissatisfied

Age range

26-300 2 2

31-35 1 0

Total 1 2 3Strongly dissatisfied

Age range

31-351 1

GroupPrice Related

DifferentialCoefficient of

Dispersion

Coefficient of Variation

Median Centered

Strongly agree .933 .302 35.6%Agree 1.282 .633 91.8%Neutral 1.250 .600 84.9%Disagree 1.000 .000 .Overall 1.285 .686 122.5%

Note: most of peoples are satisfied with work meet specification and performance

compared to their expectation.

Analysis 4:

Ratio Statistics for Helpfulness / Friendliness

GroupPrice Related

DifferentialCoefficient of

Dispersion

Coefficient of Variation

Median Centered

1 1.133 .389 46.3%2 1.320 .435 63.8%3 1.000 .000 .0%4 1.083 .250 39.5%Overall 1.189 .356 54.6%

Note: SIBL’s employees are helpful, friendly to customers

Analysis 5:

Excellent Good Satisfactory Unsatisfactory

Implement of service

3.0

3.5

4.0

4.5

5.0

5.5

6.0

Co

un

t

Note: Most of people are satisfied with service implementation as they do the work in

required time and in specific form.

Analysis 6:

Descriptive Statistics

N Minimum Maximum Mean Std. DeviationQuality of customer service 18 1 4 2.00 .907

Valid N (listwise) 18

Note: Quality of customer service is average of SIBL.

Analysis 7:

Strongly satisfied

Satisfied Neutral Dissatisfied

Work meet specification

0

1

2

3

4

Co

un

t

Solve problem

quickly

Strongly agree

Agree

Neutral

Disagree

Note: SIBL’s employee solve customers problem quickly and meet their specification.

Analysis 8:


N Minimum Maximum Mean Std. DeviationBanking environment 18 1 3 2.00 .686Valid N (listwise) 18

Note: The banking environment is medium comparatively other private commercial bank.

8.2 Findings From Job Satisfaction Questionnaire

Analysis 1:

Duration of work * Job itself * Proud for org. Cross tabulation

Count Proud for org.

Job itself

Total Strongly satisfied Satisfied Neutral

Strongly agree

Duration of work

15<1 1 2

Total 1 1 2Agree Duration of

work<5

1 0 1

5-104 1

11-15 1 0

Total 6 1 7Neutral Duration of

work<5

0 1 1

5-10 1 0

11-15 0 1

15< 2 0

Total 3 2 5Disagree Duration of

work5-10

1 1

Total 1 1

Note: The employee who are older in SIBL they are satisfied on job and proud for

organization. But the young are less satisfied.

Analysis 2:

Very satisfactory About average Some what unsatsfactory

Degree of motivation

0

1

2

3

4

5

6

Co

un

t

Growth & dev.

possible

Strongly satisfied

Satisfied

Neutral

Dissatisfied

Note: The organizations degree of motivation and future growth & development is

satisfactory but it should be high to motivate the employees.

Analysis 3:


N Minimum Maximum Mean Std. DeviationPolicy & practice in org. 15 2 4 2.53 .743Valid N (listwise) 15

Note: With policy & practice, employees are more than satisfaction. They like the policy of the bank.

Analysis 4:

Satisfied Neutral Dissatisfied Strongly dissatisfied

Promotion strategy

0

1

2

3

4

Co

un

t

Level of salary

Satisfied

Neutral

Dissatisfied

Note: Compare to other private bank SIBL’s salary is less. So they are less satisfied with

salary as well as with the promotion strategy.

Analysis 5:

Nature of

supervision

High

Good

Satisfactory

Poor

Note: The nature of supervision is good in SIBL.

Analysis 6:


N Minimum Maximum Mean Std. DeviationTrainning & education 15 1 4 2.13 .915Valid N (listwise) 15

Note: SIBL offer training & education to employees regularly.

Analysis 7:

Quantity of work

Frequency Percent Valid PercentCumulative

PercentValid Strongly

satisfied1 6.7 6.7 6.7

Satisfied 9 60.0 60.0 66.7

Neutral 2 13.3 13.3 80.0

Dissatisfied 3 20.0 20.0 100.0

Total 15 100.0 100.0

Note: With the quantity of work they are satisfied. But some of employee do more work

that create pressure to them.

9.0 RECOMMENDATION

The banks are actually service organizations. The main objectives of the world famous

and successful banking organizations are to making of profit through addressing the

clients time to time with new pieces of service instruments. However my little experience

earned through this internship program took me to customers varying demands. I had

several frank discussions with the clients and officials, which has helped me to know

about the aforesaid findings and draw the following recommendation

Need to introduce Online banking immediately. If it is not possible to introduce

among all branches then introduce in Dhaka, Chittagong initially.

Social Investment Bank may also indulge in Tele Marketing. This will facilitate

them to expand their sale.

SIBL should pursue an aggressive marketing to come up into limelight. Campaign

in order to build up a strong image reputation among the potential customers.

Campaign such as ad in the newspaper & magazine, billboard, neon signs,

publicity message. SIBL can pursue promotion campaign with its customers

particularly the corporate clients to build up a strong rapport. TV ad is also a

major method for attracting the potential customers. As it is a old bank, a strategy

of exposing the bank to the public must be taken so that general people will aware

about the emergence and growth of the bank. Sponsor in organization’s picnic

and arrange or sponsor in cricket match can be method of advertise.

SIBL provides car facility to it’s high officials. Give ad of banks in those cars can

be method of marketing. Then people will see the ad in road and remember there

is a bank name “Social Investment Bank Limited”.

All the foreign banks and other private commercial bank has Customer

relation/support/service officer in all branches. They sit in front of branches they

solve customers problem, answer inquiry of customers etc. SIBL should appoint

customer service officer in all branches.

SIBL should improve its service quality, otherwise it will fall back of other

private commercial bank.

Enhance of remuneration package- The present compensation package at SIBL is

very unimpressive and not capable to attract quality personnel to fill up its

position. Many skilled and devoted officers of the bank are depressed with their

compensation package. The foreign banks and other private banks are pay more

than the SIBL. This is the time that the management should consider revise the

remuneration package in order to attract quality human resource.

SIBL can introduce health facility for their employees. It will motivate them

more.

People need identification. All of private banks has ID for their employee even in

government offices, they also use ID. It is another kind of marketing also. So

SIBL should print ID for their officer.

In foreign banks, they use printed Pay Order, Pay Slip, DD. It looks good and

gentle. So it will be good if print them.

SIBL should differentiate its services adopting the modern facilities and diversify

product.

Bank should provide advances towards the true entrepreneur with reconsidering

conventional system of security and collateral, moreover, the whole process

should be completed within an acceptable time.

The synergy of dedicated manpower, technology, market opportunity can lead the

organization to achieve the goal, a bank must establish and adhere to adequate

policies, practices and procedures for evaluating the quality of asset and the

adequacy of loan provision and reserve.

Social Investment Bank should always monitor the performance of its

competitors.

Evaluate customer’s needs from their perspective and explain logically the

shortcomings.

Use of effective management information systems.

To deliver quality service top management should try to mitigate the gap between

customer’s expectation and employee’s perception.

Use appropriate techniques in evaluating customer need and convenience

professionally.

Effective discipline for all branches.

10.0 CONCLUSION

Form the learning and experience point of view I can say that I really enjoy my internship

in Social Investment Bank Ltd at Foreign Exchange Branch form the very first day. I am

confident that this 3 (three) months internship program at Social Investment Bank Ltd.

will definitely help me to realize my further carrier in the job market.

Performance analysis of a bank is not sufficient within this short time of my internship

period to measure and express perfectly. But it is a great opportunity for me to get use to

with the operational environment of commercial banking of Social Investment Bank. I

have tried by soul to incorporate the research report with necessary relevant information

in my report.

Few loyal committed customer base, lack of modern and effective technology or

facilities, not enough skilled employee in some sector, considering all of these very

important factors. Social Investment Bank should always try to improve their service

level in every terms.

The marketing department should think freshly about their marketing objectives and

practices. Rapid changes can quickly make yesterday’s winning strategies out of date. As

a developing private bank in Bangladesh, Social Investment Bank shouldn’t allow their

client to get dissatisfied with their service. They have their competitors who actively

striving to take the advantages in every side.

To analyze the SIBL as a service oriented organization, branch operation, customer

satisfaction, job satisfaction and other factor finally it can be say that SIBL’s future

prospect in the financial sector is good. But it need to change some policy, management

should monitor all the work of branch level, take strong decision and implement them.

11.0 Appendices

QUESTIONNAIRE------------------------------------------------------------------------------------------------------------I am the student of MBA program at “Stamford University-Bangladesh” The questionnaire has been developed to organize a survey on “Customer Satisfaction of Social Investment Bank Limited”, for fulfilling the requirement of the course curriculum “ORE-102 Professional Orientation”. I appreciate your valuable time and support in discovering the answers of the questions.Information collected will be kept strictly confidential and shall be used for academic purposes only.------------------------------------------------------------------------------------------------------------1) Age range 21-25 26-30 31-35 36<

2) Type of business / serviceGov. service Private service Garments related businessPoultry related business Other business

3) Types of service(s) used in this bank (You can tick more than one) Clearing Local Remittance Foreign Remittance Advance Foreign Exchange

4) Services offered by SIBL Strongly Satisfied Satisfied Neutral Dissatisfied Strongly Dissatisfied

5) Quality of customer service you received from SIBL Superior Very Satisfactory About Average Somewhat Unsatisfactory Very Poor

6) The working process in terms of structured, easy and swift Strongly Satisfactory Satisfactory Neutral Dissatisfactory Strongly Dissatisfactory

7) The time required/ take employees to do work Strongly Satisfactory Satisfactory Neutral Dissatisfactory Strongly Dissatisfactory

8) The work meet the specification / required Strongly Satisfactory Satisfactory Neutral Dissatisfactory Strongly Dissatisfactory

9) What is your opinion about the banking environment of Social Investment Bank Ltd.? Strongly Satisfactory Satisfactory Neutral Dissatisfactory Strongly Dissatisfactory

10) Assessment of SIBL Actual Performance as compared to Expected

Surprising Good As expected Less than expected Poor

11) Assessment of Service provided by SIBL, with regard both to Attitude and Implementation Excellent Good Satisfactory Unsatisfactory Poor

12) Support staff that solves problems quickly Strongly Agree Agree Neutral Disagree Strongly Disagree

14) Overall, how satisfied are you with SIBL’s documentation? Very Satisfied Satisfied Neutral Dissatisfied Very Dissatisfied

15) The employees behavior is cordial, Courteous Strongly Agree Agree Neutral Disagree Strongly Disagree

16) Assessment of officers of SIBL Efficiency with regard to Service High Good Satisfactory Unsatisfactory Poor

17) Assessment of the Level of Professionalism shown by SIBL Personnel Excellent Good Satisfactory Unsatisfactory Lacking

18) Employees are always aware about their responsibility/work Strongly Agree Agree Neutral Disagree Strongly Disagree

19) Ethics in employees Very Satisfied Satisfied Neutral Dissatisfied Very Dissatisfied

20) Please rank the following parameter of employee’s of SIBL in 1-5 scale

1 2 3 4 5HelpfulnessFriendlinessExperienceSkills

21) Assessment of Communication with SIBL employees Excellent Good Satisfactory

Unsatisfactory Difficult

22) Staff are interested in your comments and suggestions Strongly Agree Agree Neutral Disagree Strongly Disagree

23) Employee’s are clearly explained when you don’t understand Always Sometime Never

24) Information provided by officer when calling by phone Strongly Satisfactory Satisfactory Neutral Dissatisfactory Strongly Dissatisfactory

25) Employee’s are answers questions in a confident and knowledgeable manner Always Often Regularly Sometimes Never

26) I would like to have your suggestions on how to improve SIBL’s services--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------.

QUESTIONNAIRE------------------------------------------------------------------------------------------------------------I am the student of MBA program at “Stamford University Bangladesh” The questionnaire has been developed to organize a survey on “Employee Satisfaction of Social Investment Bank Limited”, for fulfilling the requirement of the course curriculum “ORE-102 Professional Orientation”. I appreciate your valuable time and support in discovering the answers of the questions.Information collected will be kept strictly confidential and shall be used for academic purposes only.------------------------------------------------------------------------------------------------------------1) Age range 21-25 26-30 31-35 36<

2) Gender Male Female

3) How long have you worked for this organization <5 5-10 11-15 15<

4) Communication and information flow in your organization Strongly Satisfied Satisfied Neutral Dissatisfied Strongly Dissatisfied

5) Organization’s policy and practices Strongly Satisfied Satisfied Neutral Dissatisfied Strongly Dissatisfied

6) Inter-personal relationships Strongly Satisfied Satisfied Neutral Dissatisfied Strongly Dissatisfied

7) Feeling about the manner in which your efforts are valued Strongly Satisfied Satisfied Neutral Dissatisfied Strongly Dissatisfied

8) The job itself Very Satisfied Satisfied Neutral Dissatisfied Very Dissatisfied

9) Degree of motivation as far as job is concerned Superior Very Satisfactory About Average Somewhat Unsatisfactory Very Poor

10) Current career opportunities Strongly Satisfactory Satisfactory Neutral Dissatisfactory Strongly Dissatisfactory

11) The level of job security High Good Satisfactory Unsatisfactory Poor

12) The nature of supervision High Good Satisfactory Unsatisfactory Poor

13) The extent to which personal growth and development is possible Strongly Satisfactory Satisfactory Neutral Dissatisfactory Strongly Dissatisfactory

14) Fairness in the promotion strategy Strongly Satisfactory Satisfactory Neutral Dissatisfactory Strongly Dissatisfactory 15) Your level of salary w. r. to your experience Strongly Satisfactory Satisfactory Neutral Dissatisfactory Strongly Dissatisfactory

16) Reward for your well works Superior Very Satisfactory About Average Somewhat Unsatisfactory Very Poor

17) Providing bonus and facilities Strongly Satisfactory Satisfactory Neutral Dissatisfactory Strongly Dissatisfactory

18) Support for additional training and education Superior Very Satisfactory About Average Somewhat Unsatisfactory Very Poor

19) The methods of conflict resolution in your organization Strongly Satisfactory Satisfactory Neutral Dissatisfactory Strongly Dissatisfactory

20) The extent of your participation in important decisions Strongly Satisfactory Satisfactory Neutral Dissatisfactory Strongly Dissatisfactory

21) The organizational climate is very cool Strongly Agree Agree Neutral Disagree Strongly Disagree

22) The quantity of work allotted / expected to you Strongly Satisfactory Satisfactory Neutral Dissatisfactory Strongly Dissatisfactory23) I am proud to work for the organization. Strongly Agree Agree Neutral Disagree Strongly Disagree

24) What do you find most satisfying about working at the bank?-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------.25) What do you find least satisfying about working at the bank?-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------.26) I would like to have your suggestions on how to motivate/ satisfied employee’s of SIBL more-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------.

12.0 Bibliography

Books and Journals:

1. Social Investment Bank Annual Report, Issued on 2005

2. Operational manual

3. Lecture sheet serve from SIBL training institute

Internet:

1. www.sibl.com

2. www.bangladeshinfo.com

3. www.google.com

http://www.bangladeshinfo.com/

http://www.nbl.com/

foreign exchange activities of sibl

Documents

foreign trades

enhance banking

putting specimen

social investment

marine insurance

foreign exchange

influence

short term