Banking System of NCC Bank Limited, Bangladesh

Chapter- 1TopicChapter- 2

About The Internship 1.1) Definition of InternshipInternship is a process to achieve practical knowledge about some theoretical lesson. Its most

important aspect is to acquire knowledge about the real position. As a practical subject,

Management needs some practical knowledge. Marketing of Business studies includes an

internship programs for its Bachelor of Business Administration (BBA) programs.

According to Polin Efro (1977).Social Research is such a scientific effort which tries to discover

new information through some rational and organized system, which tries to examine the

reliability of former information, and which tries to make to new theories, systems and

conceptions to understand and Explain a human attitude .Practical work is achieved to fulfill our

knowledge. In practical work, we can realize some problems and possible determinants of

their solution.

1.2) Objectives of InternshipPrimary objectives of internship are to provide some practical knowledge, which will

increase the practical experience with theoretical knowledge managerial efficiency. It helps to

achieve real knowledge, perfect investigation, above discussion of known and unknown

matter, techniques and experience. However, we can mention the objectives program of

internship in the following ways:

 

To show the guideline for searching various necessary information to solve the

organizational problems.

To add new information with established ways.

To identify problems and recommends to solve them.

To realize what kinds off organization can contribute to the economic development of

a country.

To determine entire actual situation of the organization.

Another important objective of practical training is to implement the knowledge of practical

training in the practical life.

 

To prepare pragmatic report about entire management of organization.

To make comprehensive solutions of problems to increase the diversification and

modification of marketing.

To show about the profitability, liquidity and solvency.

To investigate the techniques those are used in decision-making.

To show about the conditions of the Bank and its goodwill to the public.

To identify managerial problems and eradicate those.

1.3) Importance of InternshipGoods and services are produced for the purpose of using in daily life. Similarly,

Theoretical knowledge is acquired for the purpose of applying in the practical life.

The propensity of application of theoretical knowledge in practical life successfully

internship program is absolutely necessary because theoretical knowledge will be fruitful if it

can be applied in the practical life. When we can implement the theoretical knowledge

practically, we can say the knowledge is successful; otherwise the achieved knowledge is

valueless. Internship program is the way of implementing the theoretical knowledge

practically. However, the importance of internship may be described in the following ways:

 

As internship program is the practical implementation of the theoretical knowledge, it helps to

increase the quality and effectiveness of the trainer.

 

We can only know the problems of an organization in directly through theoretical knowledge, but

we can know the nature of the problems, problems of the various departments, methods of solving

the problems through the practical training. So it is very important to identify the problems

and eradicate the problems.

 

The trend of all activities is an organization becomes growing through practical training.

 

To Innovate new technique of management.

To realize the present condition of the institution.

To make policy for development of the organization.

It mentally prepares for their professions.

Internship program acts as a bridge between theoretical knowledge and managerial practice.

Internship acts as a guideline during the service period. By internship program students can

understand limitations, shortages and practicability of their knowledge and thereby can take

necessary action for removing these limitation and shortages.

1.4) Statement of the ProblemNCC Bank is playing a remarkable role for the economic and social development

of Bangladesh. NCC Bank at Narsingdi Branch is also playing such type of role.

The activities of this bank are widely diversified. But I have got only 90 working days for my

internship program.

These ninty working days programs are not sufficient to acquire complete knowledge about

overall activities of the bank. So, it may have some sort of problems in deed besides there

may have a big problem in collecting primary and secondary data. It is not abnormal that I

may have problem of knowledge. Moreover, it might be said that data have reliable and valid

as much as possible. So, I tried my best to prepare my report according to the information

available to me.

Chapter- 3About of study

2.1) Introduction

Bachelor of Business Administration (BBA) is a professional course. The course is designed

with an excellent combination of practical and theoretical aspects. After completing BBA

certain times is preserved for internship. As a student of BBA with the requirement of my

course I was assigned to National Credit and Commerce Bank limited (NCCBL) to Narsingdi

Branch, Narsingdi for my internship. However, I was very much interested to know how to

develop banks. So I chose the research topic as “Overall Banking System and Performance

Analysis of NCC Bank Ltd.”

They intend to ensure the trust and confidence of the customers through focused customer

orientation, quality of service and state-of the art technology, transparency in dealing and

adopting the best practices of Corporate Governance, achieving excellence in all the

endeavors to create value for all the stakeholders. The significant challenge posed before

them is the maintenance of the quality of business simultaneously with its information and

business consolidation processes. This report is prepared based on the: topic “Overall

Banking System and Performance Analysis of NCCBL. Due to this practice the remittance

department of NCC Bank has been growing to provide a good participation in the

profitability of the Bank.

Basically, this report is highlighted on overview of NCC Bank Ltd, Structure, Analysis,

Present status, Performance of NCCBL, Deposit Mobilization, Utilization of Fund, Foreign

Exchange, Own Experience, Recommendation and conclusion.

2.2) Scope of Study

Internship program gives me a great scope or opportunity for gather experience and

knowledge in several areas of Banking by which I can evaluate or expose myself. During:-e

first few week of my internship period, I was able to communicate most of the employees of

the bank. During the first month I was able to accustom and adapted myself with the working

environment of NCC Bank Limited. While preparing this report, I had a great opportunity to

have an in depth knowledge of all the banking activities practices by the “NCC Bank Ltd”. It

also helps me to acquire perspective of a leading private banking in Bangladesh. In term of

Bank we can easily understand that the financial institution deals with money.

2.3) Objectives of the Study

Though the main objective is to prepare myself in such a manner as though I can equip

myself with the practical field as well as I will be able to know the different aspect of the

banking sector and to evaluate how a bank is performing in Loans and Advance sector. In

addition, the study seeks to achieve the following objectives:

o To know the organizational framework of the bank

o To know the work environment and organizational behaviors of the bank

o To get through all the departments of the bank and observe the actual work done

o To find out how the general banking system works

o To see how the loans and advances are provided to the borrowers

o To acquire knowledge about the foreign exchange system of the bank

o To analyze the growth of deposits in the bank

o To analyze the growth of advances in the bank

o To analyze the growth of investments in the bank

o To compare the financial performance among several years of the bank and with other

banks

2.4) Methodology

In collecting the necessary data, a special care has been taken so that all the variables may not

affect the objectives of the study. Data needed for conducting the study have been collected

from the following sources.

a) Primary source and

b) Secondary source

2.4.1 Primary sources

The primary data in this report mainly includes surveying the different departments of the

Bank. It includes-

1) Scheduled survey

2) Observation while working in different desks

3) Informal discussion with professionals

2.4.2 Secondary sources

The permanent and printed sources of information. This are-Annual reports of NCCBL

1) Desk report of related department

2) Brochures of National Credit and Commerce Bank limited

3) Different reference books

4) Study of related books, seminar paper, training papers, Publication of statements.

To collect information to prepare this report I have used secondary data analysis and survey

method. Most of the information was collected by Secondary data analysis method. And the

rest are collected through survey method. Before telling about my methodology, a brief

discussion about the survey and secondary data analysis is given below:

Survey-This is a research method in which information is gathered from respondents

by asking questions or by using questionnaire. Direct interviews, telephoning. Mails

etc are also survey methods that give primary data.

Secondary data analysis-These are data that have been previously collected for some

other projects than the one at hand. They can be collected from books, reports, the net

etc.

In secondary data analysis-I have collected data from the training manual of NCC

Bank Ltd. which is written by some of the department head of NCC Bank and

faculties of BIBM, various credit manual of NCC Bank, various circular of

Bangladesh Bank regarding Loans and Advances, files of loans issued etc.

In Survey method-I have talked with the bank officials of credit division of NCC

Bank Ltd. Narsingdi Branch. They have informed me about the credit management of

NCC Bank and gave me idea how it works. They have also answered me about many

things which I thought necessary for my report. Beside that, they have explained me

various terms and conditions which I found by doing secondary data analysis.

2.5) Rationale of the Study

The word “bank” refers to the financial institution that deals with money transaction.

Commercial banks are the primary contributors of the economy of this country. On one hand

they are borrowing money from the locals and on the other hand lending the same to the

locals as loans and advances. So the people and the government are very much dependent on

banks. Moreover, banks are profit earning concerns, as they collect deposits at the lowest

possible cost and provide loans and advances at higher rate. The difference between two is

the profit for the bank.

This report basically deals with the loan and advance management of National Credit and

Commerce Bank Limited (NCCBL) covering the areas like General Banking, Loan and

Advance, Foreign Exchange, Remittance, Financial Performance, Online Banking, etc.

The present study is a pioneering attempt in the field of overall activities of  NCC Bank Ltd.  It is true

that, financial performance is really important for realizing original financial position of a

bank. In general uses the term fund frequently is used to include

(i) Cash

(ii) Liquid assets

(iii) Current assets

(iv) Working capital

(v) Total resources Again,

According to other fund constitutes the prime importance in starting and operating any

business enterprise is the raising and management of funds financial decisions are those which

concern the flow of funds from various sources and use of such funds. Efficient management of finance

ensures best use of resources to earn profit. Bank finance management is the key to short to

intermediate term decision-making in today’s dynamic and volatile banking environment.

This study is taken to enlighten the basic inherent problems of the bank which need a in-

depth analysis for the survival of the bank in the situation of its chronics financial problems,

such as lack of expected loan recovery, huge outstanding loan, large amount of classified loan

and excess overdue loan etc. For continued the present condition of this branch it is now

essential to verity its efficiency or lack. As student of BBA (in Finance) I have considered all

these matter and planned this study.

2.6) Limitations of the Study

1. Although I have enjoyed full co-operation from employees of NCCBL and they also gave

me much time to prepare this report properly in the way of my study, I have faced some

difficulties, which can be termed as limitations. They are as follows:

2. It should be certainly mentioned that time constraint is the first limitation of the study.

Only three months is not sufficient for gathering perfect knowledge on the vast area of bank.

3. In some cases, they could not be able to supply my topic related data for preparing a more

in depth research study. Office secrecy was one of the most important problems. Disclosing

of some information was restricted.

4. In case of secondary data collection, there was very little secondary information. There

were few support books, reports, journals, etc. moreover, the branch office had very little of

this information. That’s why bulk of it had to be collected from the head office. As the

officers were very busy with their day to day work, they could provide very little time.

I have also faced several problems during the preparation of this repost. Some of the

limitations of this report are mentioned below:

Credit management is too big to cover: Credit management is a too big to cover

wholly in this limited scope. It required huge time and huge space to cover. So, I have

covered only some important topics of credit management.

Time constraint: I had to prepare this report within a period les than three month

which was not enough to prepare such a report. Because collection and arrangement

of information is a time consuming job. Then again I had to summarize those. So I

had to work in haste.

Brief Description: As there was page limit, I gave a brief discussion about some

topics which require more detailed description. As a result, some topics are not clear

properly.

Very Little Readymade Information: The bank hasn’t adequate amount of

readymade information. As a result, I had to find out the information from many files

and documents, manuals etc. This job was difficult and time consuming.

The problems mentioned above are some of the major problems I have faced during the

preparation of this report. In spite of that, I have tried my level best to make the report as

good as I can.

Chapter- 4

About The NCCBL

3.1) Company Overview

NCC Bank Ltd. is one of the fast growing, leading and prominent bank in the private banking

sector which is run by highly skilled professionals.

3.2) History of NCCBL

National Credit and Commerce Bank Ltd. bears a unique history of its own. The organization

started its journey in the financial sector of the country as an investment company back in

1985. The aim of the company was to mobilize resources from within and invest them in such

way so as to develop country's Industrial and Trade Sector and playing a catalyst role in the

formation of capital market as well. Its membership with the browse helped the company to a

great extent in this regard. The company operated up to 1992 with 16 branches and thereafter

with the permission of the Central Bank converted in to a full fledged private commercial

Bank in 1993 with paid up capital of Tk. 39.00 corore to serve the nation from a broader

platform.

Since its inception NCC Bank Ltd. has acquired commendable reputation by providing

sincere personalized service to its customers in a technology based environment.

The Bank has set up a new standard in financing in the Industrial, Trade and Foreign

exchange business. Its various deposit & credit products have also attracted the clients-both

corporate and individuals who feel comfort in doing business with the Bank.

National Credit and Commerce Bank limited came to reality through the “National Credit

limited”. Prior to conversion into a scheduled commercial bank, National Credit

Limited(NCL) was incorporated as an investment company on 18th November 1985. It made

its January on 25th November 1985 at its registered office and first branch at 7-8 Motijheel

Commercial Area, Dhaka-1 000 with initial authorized capital of 1k. 30 crores. It was mostly

involved in collecting suitable resources and making profitable investments. But within a

very short period of time this investment company turned into a scheduled commercial bank.

It was turned into a bank because it faced many restrictions both collection and disbursement

of funds while it was operating as an investment company. While this turnover was going on

all types of transactions were closed for about fourteen months from April 22”, 1992. After

that, with the permission from the government and Bangladesh Bank, NCL was converted in

a full fledged commercial bank and started its banking operation on 17thMay 1993, in the

name of National Credit and Commerce Bank Limited. It has been registered under the

company act-1913, as a private commercial bank with paid up capital of Tk.39 crores to serve

the nation along with 16 branches.

However, NCCBL runs as per company rule, free from government intervention. Year 1994

& 1995 were the full operation year of the bank. During this period gave emphasis on

considering the affairs of the institution as well as expansion of business work. During last 13

years if its operation NCCBL has acquired commendable reputation by providing sincere

personalized service to its customers through a technology based environment.

3.3) NCC Bank - At Present

Having started its operations as a commercial bank in 1993, recovering from some primary

difficulties, NCCB Bank has now emerged as a major player in the financial sector. Listed in

both the Dhaka and Chittagong bourses since late 1999 with an IPO that raised the paid-up

capital of the bank to Tk.39 crore, the current price levels of its shares and turnover in trading

is evidence of its high rating among investors.

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

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

are still the major sources of credit and exercise great influence on the financial system, it is

extremely important that the country’s banking system should be in good health in the

interest of investment activities, meeting the needs of all kinds of finance and related matters.

Over the years, NCCB has built itself as one of the pillars of Bangladesh’s financial sector

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

The bank has a strong branch network nation wide with 42 branches to effectively address the

needs of its cross- segment customer base.

3.4) NCC BANK at a Glance

Authorized Capital 250 crorePaid up Capital 97.5 croreGeneral and other Reserve 88.49 croreEquity Fund 185.99 croreDeposit 2147.82 croreLoan and Advance 2053.3 croreImport Business 1629.6 croreExport Business 77.6 croreInvestment 301.45 croreOperating Profit 101.8 croreProfit Before tax 68.76 croreProfit after tax 35.20 croreRetained earnings 1.03 croreTotal asset 2611.4 croreFixed assets 30.81 croreNumber of Branch 42No. of staff 1000EPS 36.11 Dividend (Cash) 10%Dividend (Bonus) 10%Return on Equity 18.93Return on Asset 1.35%Capital Adequacy ratio 9.02Classified loan 98.15Provision against Classified Loan 40.57Provision against Unclassified Loan 20.21Loan / Deposit ratio 95.60 %

3.5) Activities of NCCBL 

The world economy is going through various crises arising from insurgent activities at

various parts of the globe. The turbulence also affected Bangladesh Economy adversely as

well. Taka has been devalued. The political unrest caused devastation to the industrial and

service sectors. The business community as a whole, apprehending imminent doom, tried to

negotiate for a compromise among the various concerned parties. The bank earned a

modestly satisfactory result during the year 2008, which contributed in continuing its steady

growth in respect of all major indicators, namely Deposit, Advance, Profit, etc. During the

year NCCBL has concentrated its focus to a number of income increasing sectors such as SME

Financing, Inward Foreign Remittance, etc. Also it has put efforts to bring discipline in

administering Banks Asset through various measures. As a whole, the outcome of these efforts was very

positive and encouraging indeed. Prudent handling of Asset-Liability is of utmost importance for

keeping up profitability at a satisfactory level of any financial institution. During last few

years, with the timely measures taken by the Management under guidance of the Board, it

was possible to sustain steady growth through maintaining asset quality.

The Bank has separate Credit Administration Department, Recovery Department and also a

Task Force for continuous monitoring of difficult loans and advances of the Bank and to

propose ways of recovery of Banks dues. This process will continue in upcoming years also.

Further, the Bank will pay attention to manage liability also so as to build up a strong deposit

base to satisfy investment need of the market. Over the last few years remittance business

contributed remarkably in increasing fee based income of the Bank. In order to motivate and

inspire the Bangladeshis residing abroad to send their hard earned money through legal

Banking channel, NCCBL has taken a number of steps like making remittance arrangements

with different money exchange companies all over the world, participating in fairs and

meetings with remitters and exchange companies, etc. which brought result beyond

expectation. It is a matter of pride that the Bank has been awarded various trophies from

exchange companies like Money Gram for its initiatives in motivating people in this part of the world to

avail of the opportunity of sending money through these enterprises. 

The bank started FRPP, a jointly funded project by DFID in partnership with Bangladesh

Bank under the grant facility called Remittances and Payments Challenge Fund (RPCF) where

Thangamara Mohila Sobuj Shangha (TMSS), an NGO working for empowering the

womenfolk of the country is a partner. Under this project the Bank is using not less than 250 outlets

of  TMSS to deliver remittance to the beneficiaries where it has no Branch.

NCCBL plans to continue this project even after expiry of the RPCF, if proved feasible. 

The Bank has put due emphasis on grooming up its workforce in a technology based working

atmosphere for some time. Also to cater the needs of the customers, very recently NCCBL

started full-fledged real time On Line Banking System with implementation of Flora Banking

UBS Software and introduced Debit Card in the brand name of ³MPower Card. The bank also

introduced a foreign remittance payment card in the brand name of ³MBridge Card´. Banks

Information Technology Division is always engaged in designing need based software and

other programmers to ease the situation for the employees so as to enable them to work more

dedicatedly to satisfy the customers. Of late financing in SMEs has been proven to be very

beneficial for banking sector.

Banks have paid special focus to this sector to expand scopes of extending credit facilities to

enhance sustainable profit. SME has been found to be a very potential avenue of financing,

since it is believed that small and medium entrepreneurs are very hard working and sincere in

paying back Banks money. Banks are optimistic that investing in this sector would not entail

huge volume of default loan like conventional or cooperate financing. 

3.6) Hierarchy of NCCBL

Organization Structure of Foreign Exchange Branch

3.7) Management of NCC Bank 

The twelve members of the Board of Directors are responsible for the strategic planning and overall policy

guidelines of the Bank. Further, there is an Executive Committee of the Board to dispose of urgent business

proposals. Besides, there is an Audit Committee in the Board to oversee compliance of major

regulatory and operational issues.

The CEO and Managing Director, Deputy Managing Director and Head of Divisions are

responsible for achieving business goals and overseeing the day-to-day operation.

The CEO and Managing Director are assisted by a Senior Management Group consisting of

Deputy Managing Director and Head of Divisions who supervise operation of various Divisions

centrally and co-ordinates operation of branches. A Management

Committee headed by the CEO and Managing Director manages key issues. This facilitates

rapid decisions. There is an Asset Liability Committee comprising member of the Senior

Executives headed by CEO and Managing Director to look into all operational functions and

Risk Management of the Bank.

3.8) Profile of NCC Bank

NCCBANK CATEGORY-A

Price

Change

% Change

Open

High

Low

Business Se

gment

  National Credit And Commerce Bank Limited

48.7 4.1 9.1

9

44.6

49

42

Bank

Volume

Outstanding Cap(mn)

No of Securities

52WkHigh

52WkLow

Face Value

Market Lot

1.2775e+06

4501.0

450125330

712.00

42.00

10.0

50

Reserve & Surplus (mn)

Market Capital (mn)

Net Turnover (mn)

Net Profit After Tax (mn)

Year End

Half Year End

EPS

3.9) Branch Network of NCCBL

During the year the bank opened 08 branches which raised the total number of branches to

79.The bank has already taken steps to open 06 (Six) more new branches in 2011.

3.9.1 District Wise Branch Distribution

The branches of the Bank cover all the important trading and commercial centers in

Bangladesh. As date, it has 65 branches within Bangladesh. All the branches are equipped

with computers in addition to modern facilities, logistics and professionally competent

manpower.

NCC Bank Ltd. is in the process of opening six more branches at important locations in the

country.

3.10) Prime Minister Sheikh Hasina handing over a cheque for

second year provided by NCC Bank Ltd.

Prime Minister Sheikh Hasina handing over a cheque for second year provided by NCC Bank

Ltd. to Mrs. Dr. Rowshan Ara Begum, wife of Lt. Col. Lutfur Rahman Khan, an Army

Officer killed in the BDR mutiny. Yakub Ali, Chairman and Mohammed Nurul Amin,

Managing Director & CEO of NCC Bank and Nazrul Islam Mazumder, Chairman, BAB were

also present on the occasion. Mentionable that NCC Bank have been paying Taka Forty

thousand per month to the family of Late Lt. Co. Lutfur Rahman Khan for 10 years. The

cheque for Taka four lac eighty thousand was handed over formally on last Sunday at Prime

Minister’s Office.

3.10.1 RIGHTS OFFER

National Credit and Commerce Bank Limited Registered office: 7-8, Motijheel C/A, Dhaka-

1000, Bangladesh. PABX: 9561902-4, 9566283, 9563981-3, Fax: 880 2 9566290 Cable:

NATCREDIT DHAKA, e-mail : nccblit@siriusbb.com Telex: 642821 NCL BJ, Web :

www.nccbank.com.bd RIGHTS OFFER This is for kind information of all concerned that the

Securities and Exchange Commission (SEC) has accorded approval for issuing of Rights

Share for raising the paid up capital of the Bank through issuance of 1,14,24,501(One crore

fourteen lac twenty four thousand five hundred one) Ordinary Shares of Tk.100.00 each at

par,totaling Tk.114,24,50,100(Taka one hundred fourteen crore twenty four lac fifty thousand

one hundred) offered on the basis of 1 (one) Rights share for every 2(two)existing shares held

on the Record Date. National Credit and Commerce Bank Limited has made such issuance

with the objective to maintain its further growth and strengthen the capital base and to

comply with the capital adequacy requirements of Regulatory Bodies and implementation of

BASEL-II and other regulatory requirements of Bangladesh Bank. Applications for 1(one)

Rights Share against every 02(two) existing shares along with the required amount of money

(as per Rights Share Offer Document) shall be received at the under mentioned branches of

the Bankers to the Issue from 11th April, 2010 to 6th May, 2010 during banking hours. All

transactions above Tk.1.00(one) lac must be effected through Demand Draft/Cross

Cheque/Pay Orders drawn on the same city/town where subscription money will be

deposited. The ‘Record Date’ for determination of entitlement of Rights Shares will be on

16th March, 2010(Tuesday) Shareholders whose names will appear in the Register of

Members of the company or in the Depository on the record date (i.e.on 16th March, 2010)

are entitled to the Rights Shares. Shareholders must provide their B.O (Beneficiary Owner)

Account Number for allotment of the Rights Share. The Rights Share Offer Document

relating to issuance of Rights Share will be sent by post/courier service to the registered

address of the Shareholders in due time. If the Rights Share Offer Document is not received

in time, the concerned Shareholders are requested to contact Head Office, Share Department

of the Bank at 7-8, Motijheel C/A, Dhaka-1000, during office hours.

3.10.2 Price Sensitive Information

This is for information of all concerned that the Securities and Exchange Commission (SEC)

vides their letter No. SEC/SRMIC/94-09/688 dated 02.11.2010 have given consent to change

the denomination of Share value (Face Value) of the shares of National Credit & Commerce

Bank Ltd. from Tk. 100/- to Tk.10/- (Taka ten) each with change of market lot thereof from

50 to 250 (two hundred fifty ) shares.

The Board of Directors of the Bank as such, in its 219th meeting held on 2nd November 2010

has fixed the Record Date on 15.11.2010 (Monday) for change of Share value (Face

value) of shares of the Bank from Tk.100.00 to Tk.10.00 (Taka ten) each and market lot

thereof from 50 shares to 250 (Two hundred fifty) shares.

National Credit and Commerce Bank Ltd. Head Office: 7-8, Motijheel Commercial Area

Dhaka-1000, Bangladesh Price Sensitive Information This is for kind information of all

concerned that the Security and Exchange Commission (SEC) vide letter No. SEC/CI/RI-

10/05-367 dated 23.02.2010 has accorded approval for issuing Rights Share by the bank for

rising the paid up capital of National Credit and Commerce Bank Ltd. Through issuance of

1,14,24,501 Ordinary shares of Tk. 100.00 each at par, totaling Tk. 114,24,50,100.00 (Taka

One Hundred Fourteen Crore Twenty Four Lac Fifty Thousand One Hundred) offered on the

basis of 1 (One) Rights share for every 2 (Two) shares held on the record date. The “Record

Date” for entitlement of Rights share, the period of subscription and list of Bankers to the

Issue will be disseminated within 3 (three) working days from the date of this letter of

approval, as per the Security and Exchange Commission (Rights Issue) Rules, 2006. Dated:

Dhaka, February 23, 2010 Sd/- Md. Tarikul Islam Company Secretary.

3.10.3 Price Statistics

Price Statistics Open Price : 44.6 Day's High : 49Last Trade Price : 49 Day's Low : 42Yesterday Close Price : 44.6 No. of Trade : 2232Close Price : 48.7 Total Volume : 1277500    Total Value (mn): 60.0968

3.10.4 Snapshot of NCCB

OPEN

$61.50

PREVIOUS CLOSE

$62.50

DAY HIGH

$62.40

DAY LOW

$60.50

52 WEEK HIGH

11/25/10 - $84.50

52 WEEK LOW

03/2/10 - $27.08

MARKET CAP

--

AVERAGE VOLUME 10 D

1.4M

EPS TTM

--

SHARES OUTSTANDING

0.0

NCCB Does Not Pay DividendsP/E TTM

--

K = Thousands  M = Millions  B = Billions

3.11) Objectives of NCCBL

The main objective is to maximize profit through customer satisfaction which very much

reflects the idea of marketing concept. NCCBL has been ensuring maximum profit by

avoiding best and improved customer service along with other corporate objectives

mentioned below:

To provide excellent customer service to its clients, so that they choose NCCBL first

for their banking.

Ensure high return on investment and services with different service products.

Making profitable investment and grow in annual profit management.

To remain as the market leader through diversification of business and automation of

banking operations.

Customer driven focusing.

.

Total commitment of quality of services.

Ensure quality human resources inside of the organization.

Socio economic change through integration of credit.

3.12) Objective of Corporate Customers

Fast and Accurate Services

Effective Communication

Attractive Pricing (Annual fee 50% discount on card fee)

Strong Communication

Smiling faces of the Bankers

Good Ambience in the Bank

3.13) Our Corporate Offer

Particular Small (10-100) Medium (101-500) Large (500 above)

Card Fee 50% 50% (Negotiable)

Rate of Interest 2% 2% 2%

Cash Withdrawal 2% 2% 2%

Purchase 2% 2% 2%

Maximum period of

interest free 45 Days 45 Days 50 Days

Replacement Card

Fee Charges Charges Free

Late Payment

Charge Charges Charges Free

Excess Over Limit

ChargesCharges Charges Free

3.14) Vision of NCCBL

The purpose of the bank is to become “The Bank of Choice” in the communities we serve.

We accomplish this by offering to our customers the financial services they expect while

providing a return to our owners. In accomplishing this mission, the bank has now been free

from all the natures of a problem bank through fulfilling all the conditions set by the central

bank. We proudly say: “NCCBL is’ profit-making and problem-free.”

To mobilize financial resources from within and abroad to contribute to Agriculture's,

Industry & Socio-economic development of the country and to play a catalytic role in the

formation of capital market.

3.15) Mission of NCCBL

To become the Bank of choice in serving the Nation as a progressive and Socially

Responsible financial institution by bringing credit & commerce together for profit and

sustainable growth.

Philosophically, a bank is a financial institution, which accepts depositors’ money for safe-

keeping and contracts with the depositors to lend this money at interest to individuals who are

in need of its use and who can give ample security that the loans will be paid. From the

profits made from lending money at interest the banker agrees to pay the legitimate

depositors a fixed sum of interest besides safe-guarding the deposits. Moreover the bank

follows the followings as its mission:

Maximize the profit within the shortest possible time

Try the best level to satisfy customers

Establish NCCBL as the best performing bank in the country.

3.16) BOARD OF DIRECTOR 

At present the Board of directors consists of 25 members including the Chairman and Vice

Chairman of the Bank. Out of 25 members 21 of them are the sponsors of the shareholders.

Most of the members are reputed industrialist and businesspersons of our country.

The Chairman heads the Board. Each of the directors is the member of the Board. The

members are obliged to maintain the annual general meeting anddeclare the dividend pay-out

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

individual body that then looks after the periodic issue with the management and tries to

solve the problems. The Board has appointed the management, which is responsible for the

welfare of the Banks directors. Some members of the Board have formed the Executive

Committee. Which organizes a meeting in every week to deal with the minor issues such as promotion of

cadre change of a confirmed employee? Conversely at least one meeting of the Board is held

in every month to deal with major issues such as modification of the existing policy or major

policy reforms. 

3.16.1 The particulars of the Board are presented as under

Name Designation

Yakub Ali Chairman

Md. Harunur Rashid Vice Chairman

Mohammed Nurul Amin Managing Director & CEO.

Abu Mohsin Chairman, Executive Committee of the

Board Principal

Mr..Wazhiullah Bhuiyan Chairman, Audit Committee of the

Board

Mr. Tofazzal Hossain Chirman

Mr.Abdus Salam Director

Mr. A.S.M. Main Director

Uddin Monem Director

Nurul Islam Director

Mr. K.Z. Mahmud Director

Mr. Md. Shahjahan Director

Mr. Md. Mohamad Ali Director

Mr. Fakrul Anwar Director

Md. Abdul Awal Director

Masuda Begum Director

Amjadul Ferdous Chowdhury Director

Mahbubul Alam Director

Ainul Kabir Director

Mostafizur Rahman Director

Alhaj Md Director

Nurun Newaz Director

Md. Humayun Kabir Director

Din M. Rana Director

ORGANOGRAM OF NCC BANK LTD.

The particulars of the board are presented as under

Managing director

Additional managing

Sr. Executive vice

Executive vice present

Senior Executive vice present

Executive vice present (VP)

Sr. Assistant vice

Assistant vice president

Senior principal officer

principal officer (PO)

Senior officer (SO)

Officer grade-1

Officer grade-2

Management trainee

Junior officer (JO)

Assistant officer (AO)

3.16.2 The Board of Directors has recommended stock dividend @ 47%

for the year 2009.

The Board of Directors has recommended stock dividend @ 47% for the year 2009. Date of

AGM: 30.05.10, Time: 11:00 a.m., Venue: Hall of Fame of Bangabandhu International

Conference Centre, Sher-E-Bangla Nagar, Dhaka. Record Date: 08.04.10. The Bank has also

reported EPS of Tk. 75.26, NAV Per share of Tk. 264.10 and Net Operating Cash Flow Per

share of Tk. 86.82 for the year ended on As per clause 30 of DSE Listing Regulations, NCC

Bank Ltd.has informed that a meeting of Board of Directors of the Bank will be held on

30.03.2010 at 3:10 PM for consideration of the accounts of the bank for the year ended on

December 31, 2009 and for declaration of any entitlement for the shareholders.

3.17) Organizational Structure

Organization structures of NCC Bank Ltd. at Narsingdi Branch are as follows: Manager&

Assistant Vice President, Assistant of Manager, Junior Officer, Asstt. Officer. 

3.17.1 NCC Bank opens Narsingdi branch

NCC Bank Limited opened its 70th branch with online facility at Narsingdi on Thursday.

Vice-chairman of the bank, Md Harunur Rashid, inaugurated the branch as chief guest, said a

news release. Banks managing director and chief executive officer Mohammed Nurul Amin

presided over the function while director Khairul Alam Chaklader attended as special guest.

Additional managing director Golam Hafiz Ahmed, senior executive vice president TM

Faruque Chowdhury and senior vice president Fakhrul Islam Chowdhury were also present

on the occasion.

3.17.2 Name of the Chief of the Organization

Md. Nazrul Islam Assistant Vice President & Manager of NCC Bank Ltd. at Narsingdi,

Branch.

3.17.3 Number of Narsingdi Branch of the NCC Bank

The NCC Bank has 79 Branch in Bangladesh. At the Narsingdi branch is 73 numbers Branch

of the NCC Bank. This Branch is opened in 2nd September in 2010.

3.17.4 Objectives of NCC Bank Ltd. at Narsingdi Branch

The main objectives of NCC Bank Ltd. are as follows:

 

3.18) NCC Bank holds managers’ Conference

The three-day ‘Executives & Branch Managers’ Annual Conference-2011’

of NCC Bank Ltd, began in Bogra yesterday.

M. Harunur Rashid MP, vice chairman of the bank, inaugurated the conference as the chief

guest, said a press release.

Mohammed Nurul Amin, managing director and CEO of the bank presided over the

conference while former Chairman Tofazzal Hossain, directors Ainul Kabir, Sohela Hossain

and sponsor M. A. Quasem attended as special guests.

To earnProfit

To give service

To maximize profit and wealth for the

shareholder

Additional Managing Director Golam Hafiz Ahmed, Deputy Managing Directors A K Md

Siddique, Swapan Kumar Das, Mohabbat Khan and T. M. Faruque Chowdhury, other senior

executives and branch managers of NCC Bank were also present on the occasion.

The conference informed that the bank procured total deposits of Tk 69.11 billion while total

loans and advances stood at Tk 63.23 billion at the end of 2010.

Chapter-5

Theoretical Discussion

4.1) Credit

The word “Credit” is derived from Latin word “Credo”, which means, “I believe”. It is

usually defined as one’s ability to buy with a promise to pay. From a banker’s point of view,

credit is the confidence of the lender on the ability and willingness of the borrower to repay

the debts at a future date.

Banks charge a higher interest for loans than the deposit rate given to customers. The

difference in rates is the profit for a bank. 80% of a banks profit comes from the interests.

Loans and advances comprise a large portion of banks assets and this is the backbone of a

bank’s structure. The strength of a bank is primarily judged by the soundness of its loans and

advances. So, the loan and credit department is a very important department of a bank. Credit

policy is very important. If a bank takes very strict credit policy, then the amount of loan will

be less. If the credit polity is flexible, then the amount of loan will be much. But strict credit

policy leads to lesser bad loans. Sometimes, credit policy cannot prevent customer’s bad

intention of not adjusting loans. This is why, strict credit policy is very necessary for every

banks for the safety of their investments.

The main features of credit policy of NCC Bank Ltd. have focus on the following areas:

I. Trade and Commerce

II. Industry

III. Lease Financing

IV. Consumer Financing

V. Small & Medium Enterprise (SME) Financing

Vi. Agriculture & Agro-based Ventures

Vii. Housing Loan Scheme

Viii. Real Estate & Civil Construction.

4.1.1 Modes of Credit

Credit can be categorized according to the nature and modes of payment.

(a) Term Wise Classification:

(i) Short term (=<1 year)

ii) Mid term (=>1 year to 5 years)

ii) Long term (> 5 years& above)

(b) Nature Wise Classification:

i) Loan: fixed in nature, for a particular term or time.

ii-) Advances: continuous in nature with no fixed repayment schedule but an expiry date, for

example: Cash Credit (hypo), Overdraft etc.

(c) Purpose Wise Classification:

i).Working Capital: For manufacturing units to meet their short-term obligation and day-to-

day expenditure.

ii) Fixed Asset Finance: For acquisition of long-term capital assets.

(d) Sector Wise Classification:

Commercial Lending: for commercial requirements except export. It is for short and medium

from of loan. Example: LIM, LTR, PAD, SOD, Cash Credit, Loan General.

i. Industrial Credit:

ii. Agricultural Credit

iii. Transport Credit

iv .House Building Loan

(e) Classification based on Fund Involvement:

i. Fund Facilities: direct money involvement

ii. Non-Funded Facilities: where fund is not extended directly. Example:

4.1.2 Letter of Credit, Letter of guarantee, Bank Guarantee etc.

(1) Types of Credit in Foreign Trade:

i. Loan against Imported Merchandise (LIM)

ii. Payment against Imported Documents (PAD)

iii. Packing Credit (PC)

iv. Loan against Trust Receipt (LTR)

v. Back to Back Letter of Credit.

The Bank has made remarkable achievement in recovery of non-performing and classified

loans advances during the period under review, As a result, Banks ratio of classified loans to

total loans on December 31, 2006 has come down to 5.62 percent, from 5.66 percent of the

previous year. This achievement was possible due to continuous monitoring, follow-up and

negotiation with the clients.

4.1.3 Parties to a Letter Of Credit

A letter of credit is issued by a bank at the request of an importer in favor of an exporter from

whom he has contracted to purchases some commodity or commodities. The importer, the

exporter and the issuing bank are parties to the letter of credit. There are however, one or

more than one banks that are involved in various capacities and at various stages to play an

important role in the total operation of the credit.

a) The opening Bank.

b) The Advising Bank.

c) The Buyer and the Beneficiary.

d) The paying Bank.

e) The negotiating Bank.

f) The confirming Bank.

(a) The opening Bank: The opening Bank is one that issues the letter Of credit at the request

of the buyer. By issuing a letter of credit it takes upon itself the liability to pay

the bills drawn under the credit. If the drafts are negotiated by another bank, the opening

Bank reimburses that Bank. As soon as the opening Bank, issuing a letter of credit (L/C), it

express its undertaking to pay the bill or bills as and when they are drawn by the beneficiary

under the credit. When the bills are presented to or when antic is received that bills have been

presented to a paying or negotiating Banks its liability matures.

(b) The Advising Bank: The letter is sent to the bank by mail or telex and forwarded by it to

the exporter. The bank providing this service is known as the advising bank. The advising

bank undertakes the responsibility of prompt advice of credit to the beneficiary and has to be

careful in communicating all its details.

(c) The Buyer and the Beneficiary: The importer at whose request a letter of credit is issued

is known as the buyer. On the strength of the contract that he makes with the exporter for the

purchase of some goods that the letter of credit is opened by the opening bank. The exporter

in whose favor the credit is opened and to whom the letter of credit is addressed is known as

the beneficiary.

d) The paying Bank: The paying bank only pays the drafts drawn under the credit but under

takes no opening bank, by debating the latter’s accounts with it if there is such an account or

by any other measured up, between the two bankers.

e) Negotiating bank: The negotiating bank has to be careful in scrutinize that the drafts and

the documents attached there to be in conformity with the condition laid down in the L/C.

Any discrepancy may result in refused on the part of the opening bank to honor the

instruments is such an eventuality the negotiating bank has to look back to the beneficiary for

refund of the amounts paid to him.

f) The Confirming Bank: Sometimes an exporter stipulates that a L/C issued in his favor be

confirm by a bank in his own country. The opening this country to add its confirming to the

credit the bank confirming the credit is known as the conflrmin~ bank and the credit is known

as confirmed credit.

4.1.4 Documentary Letter Of Credit (Import/Export Documentation)

Documentary letter of credit is such kinds of commercial letter which a bank issue on behalf

of foreign seller (exporter) according to the direction of the (importers) purchasers. The

documents shown under are known as export documents form the importer’s side. These are:

(I) Bill of exchange: The bill of exchange is that particular instrument through which

payment is effected in trade deals internal and international.

(ii) Bill of lading: A bill lading is a document of title to goods entitling the holder to receive

the goods as beneficiary or endorsee and it is with the help of this document on receipt from

the exporter that the importer takes possession of the goods . from the carrying vessel at the

port of destination.

(iii) Airway bill I Railway receipt: When goods to be transported are small in bulk or

requiring speedy delivery or those are perishable in nature on the deal is in between the

neighboring countries then mode of transports other than shipping may be resorted to far the

carriage of the goods Airways bill / Railway receipt take place of Bill ~of lading depending

on the nature of the carrier.

(iv) Performa invoice: It is the seller’s bill for the merchandise. It contains a description of

goods, the price per unit at a particular location, total value of the goods, packing

specifications, terms of sale, letter of credit, bill of lading number etc. There is no standard

form far a commercial invoice. Each exporter designs his own commercial invoice form. The

invoice is made out by the seller under his signature in the name of the buyer and must be

submitted in a set of at least 3 copies. Its main purpose is to check whether the appropriate

goods have been shipped and also that their unit price, total value, marking on the package

etc. are consistent with those given in other documents.

(v) Insurance policy: In the international trade insurance policy is a must to cover the risk of

loss on consignments while they are on seas, roads, airways. The insurance is the

responsibility of the buyers (consignee) under FAS, FOB and C&F contracts and of the seller

(consignor) under CIF contract. The policy must be of the type as specified in the relative

contract / credit. The policy would be for the value of CIF price plus 10 (ten) percent to cover

the expenses and that is required to be obtained in the same currency as that of the credit and

dated not later than the date of shipment with claims* being payable at the destination. It

must be properly stamped. Like a bill lading it must be negotiable and be endorsed where it is

payable to order.

(vi) Certificate of origin: This is a certificate issued by a recognized authority in exporting

country certifying the country of origin of the goods. It is usually by the Chambers of

commerce. Some times, it is certified by local consul or Trade Representative of the

importing country as per terms of the credit.

vi) Packing list: The exporter must prepare an accurate packing list showing item by item,

the contents of the consignment to enable the receiver of the shipment to check the contents

of the goods, number and marks of the package, quality, per package net weight, gross weight

measurement etc.

(viii) Wightmans and Measurement: Issued by recognized authority (like chambers of

commerce and industry) in exporting country certifying correct weightment and measurement

of the goods exported.

(ix) Bill of entry: A bill of entry is a document which contains the particulars of the imported

goods as well as the amount of customs duty payable.The negotiating bank after received the

above documents / papers then this bank scrutiny the documents. The negotiating bank sends

the original shipping documents to the L/C opening bank and keeping the second copy with

the negotiating bank

Payment against Documents (PAD) Banks deal in documents and not in goods. If the

shipping document against the L/C is in order then the L/C opening bank must have to

payment to the foreign bank within 3 days according as Uniform Customs and Practice for

Documentary Credit (UCPDC) 500 of revision of ICC.

If the shipping documents have any discrepancy, then the L/C opening bank informed to the

negotiating bank within 7 days. Otherwise, the shipping documents have not discrepancy. If

the importer have not adequate founds in the bank account then the bank payment to the

foreign bank against the shipping documents

4.1.5 Payment Procedure of Import Documents

Payment procedures of NCCBL involve the following tasks:

(a): Date of Payment: Usually payment is made within seven days after the documents have

been received. If the payment is deferred, the negotiating bank may claim interest for making

delay.

(b): Preparing Sale Memo: As sale memo is made at B.C. rate to the customer. As the T.T

& 0. D rate is paid to the ID, the difference between these two rates is known as Exchange

Trading. Then an Inter Branch Exchange Trading Credit advice is sent to Inter ID.

Requisition for the foreign currency For arranging necessary fund for payment, a requisition

is sent to the ID.Transmission of telex: A telex is transmitted to the correspondent bank

ensuring that payment is being made.

NCCBL is the well reputed and established bank in the private sector. All the branches are

computerized and people are getting quick benefit from the bank.

4.1.6 Additional Confirmation Commission on Letter of Credit:

The amount of Additional Confirmation Commission on Letter of Credit handled by the Bank

in 2002 and 2003 was nearly same but in 2004, this amount was increased huge amount.

Later on 2005, this amount was decreased huge amount and the difference between 2004 and

2005 was -55.96%. But 2005 and 2006 is nearly same. The chart below shows the growth of

Additional Confirmation Commission on Letter of Credit for last 05 years.

4.1.7 Form of Letter Of Credit

A letter of credit (L/C) may be two forms. These as below:

i) Revocable letter of credit.

ii) Irrevocable letter of credit.

(i) Revocable L/C: If any letter of credit can be amendment or change of any clause or

canceled by consent of the exporter and importer is known as revocable letter of credit. A

revocable letter of credit can be amended or canceled by the issuing bank at any time without

prior notice to the beneficiary. It does not constitute a legally binding undertaking by the

bank to make payment. Revocation is possible only until the documents have been honored

by the issuing bank or its correspondent. Thus a revocable credit does not usually provide

adequate security for the beneficiary.

(ii) Irrevocable L/C: If any letter of credit can not be changed or amendment without the

consent of the importer and exporter is known as irrevocable letter of credit.

Irrevocable credit constitutions a firm undertaking by the issuing bank to make payment. It

therefore, gives the beneficiary a high degree of assurance that he will paid to his goods or

services provide he complies with terms of the credit.

4.2) The importance of Securities in Credit

Securities play a vital role in sanctioning credit. Security means things deposited as a

guarantee of the undertaking or loan to be forfeited in case of failure to repay the same. The

customer/ guarantor should own it. In other words, the assets against which banks allow

credits are called Securities. Good and strong securities help a bank to take decision about

sanctioning credit. It also minimizes the risk. The type of securities offered may be,

Government bonds, share, assignment of book debt or bills receivables, raw material and

finished goods, fixed deposit receipts, land, factory building and other movable and

immovable assets of the borrower. If a borrower becomes unable to adjust his loan, then bank

can recover the loan amount by selling securities. That is why the role of securities is very

important in credit system.

4.3) Sanction of Credit

When a Branch Manager writes a letter to accepting all terms and conditions of loan, it is

called loan sanction. After the completion of all the formalities of financing a loan proposal,

an advising letter is sent to the customer for the credit facilities along with all terms and

conditions.

The conditions, which are included in the loan sanctions, are given bellow:

a) Limit

b) Primary Securities

c) Collateral Securities

d) The Rate of Interest

e) Expiry Date

f) Repayment

4.4) Types of Credit Card

National Bank Limited offers mainly two type of credit card according to the geographical

area. These are Local credit card and International credit card. According to the level of

income the local and international credit cards are divided into two categories viz. Gold card

and Silver card. These types of credit cards are described below:

(a)Local credit card:

Local credit card is valid only in Bangladesh. Out side Bangladesh, the card is invalid. Local

card are two types. They are Gold local card and Silver local card. The card limit of gold

local card is Tk.50000 to Tk. 100000 and silver local card is below Tk.5

(b) International Credit Card:

International credit card is valid mainly outside Bangladesh. But for the payment of roaming

facilities for Grameen phone, cardholders can use international credit card in

Bangladesh. International credit cards are of two types. These are gold international credit

card and silver international credit card. The card limit of gold international credit card is

$2000 to $4000 and silver international credit card below $2000.

4.5) Yearly Charges on credit card

National Bank Limited receive card fee for new card and renew card from the cardholder.

The rate of card fee for new card and renew card are the same. In case of

new card the bank receives the card fee with the next month’s bill. The rate of card fee are

given in below:

Yearly charges on credit card

Type of card fee

International Gold Card US$70.00

International Silver card US$ 35.00

Local Gold card Tk.2000.00

Local Silver Card Tk.1200.00

4.6) NCC Bank Visa Credit Card

NCC Bank has launched its Visa Credit Card Service on August 22, 2005 and we are offering

three types of cards which are Visa Classic, Visa Gold (Local) and Visa Dual Currency Card

(Globally and locally). Since then were able to reach 5000 cards, both corporate and general.

4.6.1 Why NCC Bank Credit Card?

Lowest interest rate in the country (2% per month)

Dual Currency Visa Credit Card

One supplementary card free of cost for lifetime (Spouse only)

Treasure point facilities including foreign part

Shortest process for Dual Currency card, only 24 hours

Roaming Mobile Phone bill payment facilities

Use of additional 142 ATM’s Booth and 600 POS of Dutch-Bangla Bank

4.6.2 Balance Transfer Facilities

If anyone holds other Bank Credit Card, then NCC Bank will issue a credit card with

equivalent limit and will issue a pay order by debiting card A/C from balance transfer option

for the equivalent amount of total outstanding in order to full settlement and cancellation of

other Bank A/C.

4.6.3 Our Commitments

We promise the followings in our services:

Dedicated service at your door steps

Sporty

Faster service

Security of cards

Team work

Patient at our services

Transparency

Quick decisions

4.7) How to transfer funds from NCC Bank account

1. Log in at E-Banking: Select the branch where you maintain your account, type your

Customer Code, First Password and press Sign In.

2. Go to Act Now menu for Balance Transfer, Third Party Transfer and Utility

Payments. You will require the Second Password for all such transfer transactions.

3. The options are elaborated as follows:

4.7.1) For Balance Transfer:

This option allows customer to transfer balance from one account into another account of

same branch. Funds can be transferred to the linked accounts only as filled up in the

application form.

• Select the linked account

• Enter the amount to be transferred

• Write the description

• Press the “Submit” button.

a. For Third Party Transfer:

This option allows customer to transfer Balance from one account into another account

within any branch.

• Select the desired branch

• Enter the account number

• Enter the amount to be transferred

• Write the description

• Press the “Submit” button.

b. For Utility Payments:

Utility payments option allows customers to pay various bills like telephone, electricity,

mobile bills, school bills etc. The options available for utility payments at present are as

follows:

4.7.2 NTC PSTN Bill:

Users can pay their NTC PSTN bill from the Internet Banking Service provided by the bank.

The process is similar as above. It’s done as follows:

• Select the option from the drop box

• Select the bank account to be debited

• Enter the amount to be paid

• Enter NTC PSTN number (8 digits with area code and telephone number i.e.14444444).

• Press the “Submit” button.

4.7.3 NTC Post-Paid Mobile Bill:

Paying your NTC Post-Paid Mobile bill is also a very simple process as described below:

• Select the option from the drop box

• Select the bank account to be debited

• Enter the amount to be paid

• Enter your NTC Post-Paid Mobile number ( the number should be filled up continuously

without any gap,

4.7.4 Recharge E-Sewa Account:

E-Sewa is first online payment gateway for utility services which customers can access

anywhere at any time. eSewa Bank Partners customers having account with any bank will

have the ease in bill payment transactions. For customers who do not have account with e-

Sewa Bank

Partners, the option to recharge their account by a prepaid utility card is

also available. The process for recharge through a bank account is as follows:

• Select the option from the drop box

• Select the bank account to be debited

• Enter the amount to be transferred

• Enter your E-Sewa Id

• Press the “Submit” button.

4. After pressing the Submit button you will be asked to confirm the transfer.

5. Then a confirmation message will show that the transfer has been successful and the

transaction posted.

6. Then you could print the advice or receipt as required

4.8) Wide Range of Acceptance

NCC bank Visa Credit Card is accepted at over 5,000 merchant outlets around the country.

Our wide range of merchants include Hotels, Restaurants, Airline and Travel Agents,

Shopping Malls, Hospitals, Jewellery Shops, Mobile Phone and Internet Service Providers,

Petrol Pumps and many more! Now NCC Bank Visa Credit Cards can also be used at all 142

ATM’s Booth

and 600 POS (Point of Sale) of Dutch-Bangla Bank.

a) Instant Cash Advance

You do not need to carry cash any more if you have a NCC Bank Credit Card. You can

withdraw cash up to 50% of your credit limit from any ATM across the country that shows

Visa logo.

b) Credit Facilities

NCC Bank Visa Credit Card offers you free Credit facility up to 45 days and minimum of 15

days without any interest (Purchase only).

c) Supplementary Card

NCC bank Visa Credit Card holder can also enjoy spouse Credit Card free of cost for lifetime

and issue more Supplementary card.

d) Reward Programs

As a NCC Bank Visa Credit Card holder, you will accumulate Treasure points for every

purchase made by using Visa Credit Card. For every Tk. 50 and USD 1 spent on your Credit

Card, you will earn 1 and 1.5 Treasure Point accordingly and be closer to redeeming the

reward of your choice.

e) Flexible Payment Option

With the NCC Bank Visa Credit Card, you have the convenience to pay as little as 5% of

your outstanding (or Tk. 500, whichever is higher) on the Card account every month, thus

having the power and flexibility to plan your payments.

f) Auto-Debit Payment Facility

With the NCC bank Credit Card, you no longer have to stand in long queues for paying your

monthly bill. You can pay your monthly bill through NCC Bank Account by instruction

Auto-Debit.

g) Corporate Visa Credit Card

Corporate is characteristic of individuals acting together; “a joint identity”; “the collective

mind”; “the corporate good”.

The new dimension of NCC Bank Visa Credit Card is Corporate Credit Card which has

already started to benefit the Corporate Houses.

4.9) Reach Us National Credit and Commerce Bank Ltd.

Card Division

Peoples Insurance Building (10th Floor),

36, Dilkusha Commercial Area,

Dhaka-1000, Bangladesh

Phones: +88.02.955.0575 ; +88.0.955.0557 ; Fax: +88.02.955.0611

Email: cardncc@dhaka.net ; Website: www.nccbank.com.bd

24 Hours Call Center:

+88.02.955.0521 ; +88.02.956.9029

+880.181.714.0369

4.9.1) Brokerage House

Member, Dhaka Stock Exchange Ltd.

Full Service Depository Participant

4.9.2) Treasury Service

Primary Dealer of Govt. Approved Securities

4.9.3) Key developments for (NCCB)

National Credit & Commerce Bank Limited Announces Executive Changes

07/4/2010

National Credit & Commerce Bank Limited has promoted Golam Hafiz Ahmed to additional

managing director. Prior to this assignment, he was the bank's deputy managing director.

National Credit & Commerce Bank Limited Promotes Swapan Kumar Das as Deputy

Managing Director 03/15/2010

Swapan Kumar Das has been promoted to deputy managing director of National Credit and

Commerce (NCC) Bank. Prior to the appointment, he was the senior executive vice president

and Chittagong area in charge of the bank. Das started his banking career as probationary

officer for Janata Bank in 1979 and later joined National Bank in 1983 and NCC Bank in

1985.

4.9.4) Products & Services

The Bank has wide range of product line to suit the need of the strata. In addition to

convention product both Asset and liabilities sides the Bank offers special credit products for

its customer. This are-

Consumer Financing

Lease Financing

Small loan

Festival loan

Housing loan

Long-term & short term loan financing

Syndication

Real Estate & Civil construction

SME & Agro based

4.9.5) Deposit Products

Current A/C

Savings Bank Deposit A/C

Special Notice Deposit (SND) A/C

Term Deposit A/C

Premium Term Deposit A/C

Instant Earnings Term Deposit A/C

Special Savings Scheme

Special Fixed Deposit Scheme

NFCD

RFCD

Money Double Program

4.9.6) Loans and Advance Products

Working Capital Financing

Commercial and Trade Financing

Long Term (Capital) Financing

House Building Financing

Retail and Consumer Financing

SME Financing

Agricultural Financing

Import and Export Financing

4.9.7) Concept Analysis

Credit Management: Credit management is the part of bank management which decides

what type of lending product will be offered, to whom it will be offered, how much it will be

offered and analyze and measure the credit risk on loans and manage all the activities

regarding the loans. The aim of the credit management is to have a secured loan portfolio so

that the bank can earn profit by keeping the depositors savings secured. The entire job

regarding that consist the credit management.

Loan: Loan means lending a fixed amount of money to borrower for a certain period time.

The borrower must repay the loan within the given time period. In Loan, the disbursement

will take place only for one time. The borrower can repay the loan all at a time or by

installment.

Advance: Advance is a little bit different than Loan. In Advance, the borrower is allowed

and credit limit for a given period of time. In that given period, the borrower can withdraw

money as many times as he want but he cannot exceed the credit limit. Again he can repay

several times whenever he wants. In Advance, disbursement and repayment occurs several

times. But at the end of the period, whole credit amount must be repaid to the banks. This

type of credit is allowed to business for their working capital requirement.

Credit Risk Grading Model: This is model to grade the credit risk. Using that model, banks

rank the credit risk and decide whether they would lend or not. Here, a borrower is judged

from different point of view. After judging, if the borrower has a satisfactory grade or mark

then he/she can have the loan.

4.10) Findings and Analysis

4.10.1) Lending Authority:

The lending officers are broadly categorized as follows-

1. Managing director

2. Deputy Managing director

3. Executive vice president

4. Senior vice president

5. Vice president

6. Senior assistant vice president

7. Assistant vice president

4.10.2) Lending Products:

i. Continuous Loan

a) Secured over draft Against Financial obligation

b) Secured over draft against Work order/Real Estate etc.

c) Cash Credit(Hypothecation)

d) Cash Credit(pledge)

e) Export Cash credit

ii. Demand loan

a) Loan general

b) Demand loan Against ship breaking

c) Payment Against Document(PAD)

d) Loan Against Imported Merchandise(LIM)

e) Loan Against Trust receipt(LTR)

f) Forced Loan

g) Packing Credit

h) Secured Over Draft Against Cash Incentive

i) Foreign Documentary Bills purchased(FDBP)

j) Local Documentary Bills purchased(LDBP)

k) Festival Business Loan

iii. Term Loan

a) Project Loan

b) Transport Loan

c) House Building Loan

d) Small Business Loan

e) Consumer Finance Scheme

f) Lease Finance

g) Personal Loan

Cash Credit (Hypothecation): This type of advance is made against the hypothecated

possession and ownership of goods or assets. In Hypothecation, the real possession remains

to the borrower. Loan disbursement and loan repayment occurs several times for a given

amount of money for a given period of time.

Cash Credit (Pledge): When any advance is made against the pledge of goods or assets then

it is known as Cash Credit (Pledge). The possession and ownership passes to the Bank. Bank

takes the control of the assets or goods. Loan disbursement and loan repayment occurs

several times for a given amount of money for a given period of time.

Loan General: When any loan is made in lump sum repayment in fixed monthly installment

or in lump sum repayment only to the bank officers or employers of NCCBL then it is known

as Loan general.

Loan against Trust Receipt: This type of loan is given to importer to pay the credits against

imported goods. This type of loan is given on the basis of personal guarantee or reputation of

the borrower.

Loan against Imported Merchandise: This loan is given to pay the credits to importer after

taking imported goods under bank’s control.

Loan against Packing Credit: In packing credit, the banks give loan to exporter to prepare

the goods for export against a certain L/C.

Payment against Document: To pay the foreign exporter after receiving the goods and

proper documents, the bank creates a loan account on the name of the importer and from that

account pay to the foreign exporter.

Foreign Documentary Bills Purchased: When any loan is given to exporter against any

foreign documentary bills then it is known as Foreign Documentary Bills Purchased.

Local Documentary Bills Purchased: When any loan is given to seller against any local

documentary bills then it is known as Local Documentary Bills Purchased.

House Building Loan: This type of loan is given to build house against the mortgage of that

property. This type of loan is repaid in monthly fixed installment.

Personal Loan: When any loan is given for any personal purpose not for business against

any security then it is known as Personal Loan.

Project Loan: When any long term loan is given to any project or for stating any project then

it is known as Project Loan.

Transportation Loan: When any loan is given to purchase vehicle against personal

guarantee of borrower then it is known as Transportation Loan.

4.10.3) Principle of Sound lending

It is imperative precept of banking everywhere that advances are made to customer in

reliance on his promise to repay, rather than the security held by the banker. Security is

required by the banker as a protection against unexpected default in repayment by the

customer. So it is necessary for any bank to develop sound and safe lending policies and

practicing principles of sound lending. Principles of sound lending are: 

I. Safety

II. Liquidity

III. Profitability

IV. Purpose

V. Security

VI. Dispersal/ Spread, and

VII. National interest

Safety

Safety first should be guiding principle of a banker.  So far as his advances are concerned,

because the very existence of a bank depends on the safety of its outstanding, which should

never be sacrificed to the profit earnings capacity of its advances. This has led people to

believe that a bank never advance any loan unless it is fully secured. To maintain a banking

concern in sound condition, it is very essential that the safety of its advances to customers

should be its first principle.

There payment capacity of a borrower depends on the borrowers a) capacity to pay and b)

willingness to pay.

Liquidity

Liquidity is the availability of bank funds on short notice.  It is not enough that the money

will come back, it is also necessary that it must come back on demand or in accordance with

agreed terms of repayment. The borrower must be in a position to repay within a reasonable time

after a demand for repayment is made; otherwise, the liquidity position of the bank is endangered.

Profitability

Commercial bank has to distribute its resources in a manner hat they meet the twin

requirements of liquidity and profitability.  A banker has; therefore, to see that major portion

of the assets owned by it are not only liquid but also aim at earning a good profit. The working funds of a

bank are collected mainly by means of deposits from the public and interest has to be paid on these

deposits.

Purpose

A banker would not through away money for any purpose of which the borrower wants. The

purpose should be productive so that the money not only remains safe but also provides a

definite source of repayment. The banker should study the purpose for which the loan is required

and the resources from which the borrower is expected to repay.  If the funds borrower is

employed for unproductive purposes like marriage ceremony, pleasure trip, repayment of old

debts etc., or speculative activities, there payment in the normal course will become

uncertain.   Bankers also discourage advances for a hoarding of stocks.

Security

It is the practice of banks not to lend money without any security. The security offered for an

advance is insurance or a cushion to fall back upon in case of need.  A banker would not

normally like to recover the advance from the safe of the security.

They would prefer an advance to come back from the normal source.  Security serves as a

safety value for an unexpected emergency. Security may be of i) Primary security and ii)

Collateral security

Dispersal/Spread

The advances should be as much broad-based as possible and must be in keeping with the deposit

structure. The advance must not be in one particular direction or to one particular industry;

because any adversity faced by that particular industry will have serious repercussions on the

bank.  Again advance must not be granted in one area alone.

There should be spread of advances against different securities, industries as well as areas.

Thus, by a diversification of the advance a banker will be able to spread his risks and considerably

improve the safety of advance.

National interest

National interest banking industry has significant role to play in the economic development

of a country. The banker would lend if the purpose of the advance is for overall national development

plans necessitating flow of credit to propriety sector in the larger national interest.

4.11) Interest Rates and Fees of Loans

Interest Rates of Different Loans and Advances

Types of Loans Interest RateSOD(Against FDR) 3% above the FDR rateSOD(SSS/DPS) 16%Cash Credit(Hype) 16%Cash Credit(Pledge) 16% Agriculture 11.50%Loan(General) / Term Loan(Large and Medium scale Industry)

14%

Loan(General) / Term Loan(Small cottage Industry)

14%

Working Capital to industry 14%Packing Credit 7%Export Cash Credit 7%Payment against Document 15%-16%Loan against imported merchandise 15%-16%Loan against trust receipt 15%-16%Local Documentary bill purchased 14.50%Foreign Documentary bill purchased 14.50%Housing Loan 14%House Building Loan Scheme 14.50%Small Business Loan 16%House Repairing / Renovation Loan 16%Personal Loan 16%Consumer Finance Scheme 16%Lease Finance 16%

4.11.1) Fees of Loans and Advances:

Pre Sanction Charge:

o 3 copy CIB inquiry from tk.50 each

o Survey Report Charge: Tk.2000 and above (based on collaterals value and

number)

o Legal opinion charge about the security offered to mortgaze.

Post Sanction Charge:

o Stamp charge: Tk.150 to Tk.550

o Mortgage Fee: From Tk.5000 to above (Based on collateral assets’ value )

o Insurance of hypothecated goods(If goods are pawned as security): Insurance

charge on the hypothecated goods’ value.

o Service Charge: 1% o the total loan amount.

o Security Charge (For Small Business Loan, House Renovation and Repairing

Loan, Personal Loan): 1% on total loan value.

o Risk Charge (For Small Business Loan, House Renovation and Repairing

Loan, Personal Loan): 1% on total loan value.

4.12) Credit Analysis

Credit analysis is the analysis of financial statement of business/customers for the purpose of

lending. Credit analysis are conducted to determine whether the customer is creditworthy and

whether the customer has sufficient cash flows and back up assets to repay the loan. The

main purpose of credit analysis is to ascertain whether the loan can be serviced by the

customer and whether the bank is adequately protected to realize the loan in the event of

default by the borrower to repay loan.

Major issues/questions analyzed/ examined in credit analysis:

a) Is the borrower creditworthy?

b) Whether purpose of the loan is consistent with bank’s credit policies and Govt.

Regulations

c) Whether customer/or his business have the ability to generate enough cash to repay

the loan?

d) Whether sufficient security ha been offered, so that in the event of default bank’s fund

can be recovered. Whether bank’s claim on that security can be established without

risk/ with low risk.

e) Fixing of amount of loan, loan terms and conditions, documentations, etc. meet the

needs of the borrower and to protect the interest of the bank.

Is the borrower creditworthy?

a. Character:

- to determine whether the borrower has responsible attitude towards borrowed

funds and whether he will have every effort to repay what is owed.

- Responsibility, truthfulness, serious purpose ad serous intention to repay loans

make up the characters of the borrower.

b. Capacity:

- whether customer requesting loan has the authority to request a loan and have

the legal standing to sign loan agreement and documents (minor / resolution of

the Board of Directors in case of limited company, partnership deed in case of

partnership firms, etc)

c. Economic Condition/Assets:

- whether borrower has sufficient asses to repay the loan the loan (cash business

assets plus other immovable and movable properties)

- other loans and liabilities of the borrower

d. Credit history/credit habit:

- whether loans borrowed by the customers previously and how those earlier

loans were handled.

- whether there is any loan default earlier

- whether legal action has ever been taken against him for recovery of default

loan.

e. Credit rating:

- Credit rating of the borrower by Credit Rating Agencies.

Purpose of loan:

- customer must have an well-defined purpose for requesting the loans

- the purpose of the loan must be consistent with the bank’s existing credit

policy.

- The purpose of the loan also should have consistent with Govt. regulations.

Business position:

a. Cash flow:

- three sources to repay loan: i) cash flows generated from sales income, ii) the

sale or liquidation of assets, or iii) funds raised by issuing debt or equity

securities. Bank’s prefer cash flow as the principle source of loan repayment

because assets sales can weaken a borrowing customers and make the bank’s

position as creditor less secured.

- Cash flow = Net profits (revenues less expenses) + Non cash expenses

(Depreciation).

- History of earning and sales- whether there is history of steady growth in

earnings or sales and whether there is high probability that such growth will

continue.

b. Condition:

- analysis of recent trends in the borrower’s business/ industry and whether

changing economic condition might effect business or loan. (effects or

recession or inflation, etc.)

c. Control:

- whether there is chances of changes in Govt. policy or law which could

adversely affect borrower’s business.

Security of Loan:

Three securities of loan: i) most preferred is business’s income cash flow from which the

customers will repay loan, ii) second security consists of customer’s balance sheet / his assets

that can be liquidated or adjustment of loan and iii) Guarantees from owner’s from a third

party.

Primary security:

Collateral security: Collateral security serves two purposes for a lender first, if the borrower

can not pay, the collateral gives the lender the right to seize or sell those properties to cover

the amount of loan default. Secondly, collateral security gives the lender a psychological

advantage over the borrower. Borrowers in this situation feel more obligated to word hard to

repay the loan to avoid loosing valuable asses.

Loan amount / Loan terms and conditions / Loan documents:

- loan amount should be fixed such a way that it will require the needs of the

customer or his business. Proper accommodation of a customer may involve

lending more or less money than asked for over a longer or shorter period than

requested. May customer don not know their own financial needs.

- Loan terms and conditions should be framed in such a way that they will

protect bank’s interest as well as customer’s purpose. The loan agreement

must be structured in such a way that the borrower may be able to service the

loan and be able to comfortably repay the loan as per schedule.

- Loan documents must be executed properly, so that bank can establish its

claim against the assets or earnings of the customer to recover the bank’s

funds rapidly at low cost and with low risk, in the event of default by the

borrower.

- If necessary, certain restriction (covenants) may be imposed on the borrower

in loan agreement so that the borrower may bot indulge to such activities

which could threaten the use and recovery of bank’s fund.

- The process of recovering bank’s funds - when and where can taking action to

get its fund retuned also must be carefully spelled out in loan agreement.

4.13) Borrower Selection Process

Character: The character of a borrower means the ability of the borrower to earn money by

using the borrowed fund and repay the loan timely with interest. The character of a borrower

can be measured by analyzing two things –

Integrity: To measure analyze the Integrity following things should be considered:

o Past activities of the Borrower: It can be done only for those who had taken

loan from the earlier. Whether the loan taken earlier was repaid timely,

described collateral matched with the actual, the transactions were done by

maintaining the rules of the bank, the financial statements provided were

correct - by analyzing those things a banker can have a idea about the past

activities of the borrower.

o By collecting and analyzing various information: Generally by visiting the

area where the borrower resides or his business organization exists, by talking

with local people, by taking personal interview of the borrower, collecting

information from newspaper and local authority various information about the

borrower can be collected.

o Analyzing collected documents: A borrower has to submit a lot of

documents. By examine the documents where they show the actual

information, a banker can have a idea about the integrity of the borrower.

o Transaction analysis: Generally a borrower is an account holder of the bank.

By analyzing the transaction of his account, a banker can have idea about the

borrower’s integrity. Whether he deposit money regularly, write check by

considering his balance, collect funds from others for a short a period to show

a good balance to bank etc. – by analyzing those things the integrity of a

borrower can be known.

o Analyzing the period of relation with the bank: If the Borrower carry out

transaction with the bank with good reputation, the banker can have a idea

about his/hr integrity than the borrower who is doing transaction with the bank

recently.

Reliability: Reliability is the inclination to do any work with any person or

organization by believing on the activities or behavior of a that person or

organization.

Borrower should be a person or organization, whose activities or behavior would

create trust in banker’s mind that they would have their loan back. Analyzing the

following things, reliability on a borrower is created:

Fulfillment of promise or repayment of earlier loans properly

Proper usage of earlier loans

Social Status

Realistic Business plan

Capacity:

Business Capacity: The main source of earning money is business. If the borrower

can not earn money from business, he/she would not be able to repay the loan. In this

circumstance, to select the borrower the most important thing is Borrower’s business.

From the followings, one can have idea about the business capacity:

Business’s previous growth: By analyzing the previous years’

production, sales, profit growth the idea about the business’s growth

can e generated.

Competitive advantage: Analyzing the price of the product, quality,

production, growth rate of sales & profit, per unit cost and market

share the competitive advantage of any business can be known.

Adopted method and capacity to implement: In competitive market

the success of a business depends on adopted method and ability to

implement that. There should be similarity of taking and

implementation of method In every stage of the business. The bank

should have confidence on the methods taken in the business.

Ability to use the strength and remove the weakness: A business

may have several strength and weakness on which the success of a

business depends. The business should have the capacity to use the

strength and remove the weakness.

Cash flow: By analyzing the cash flow, the source of cash and use of

cash can be known. The ability to use the cash and earn cash is the key

to future success.

Management Capacity: The capacity of the owner, director, managers depends on the

following things:

Physical Ability

Educational qualification

Training

Experience

Willing to work

Perseverance

Self-confidence

Self-reliability

Presence of mind etc.

The ability of work with staff/ workers depends of the following:

Organ gram

Change in Management

The relation of staff/ workers with management

Time to take decision

Ability to take right decision

Analyzing the above things, one can have the idea about the owner, director,

managers.

Capital: Capital is the backbone of a business. Adequate capital helps to run the business

with efficiency. In case of any accident, if the amount of capital is high, then the accident can

be recovered by the capital. That is why capital of a business is compulsory item to run the

business. To know the condition of capital the following things are analyzed:

Asset and liability Position: Analyzing the current and fixed assets the

utilization of capital and loans can be known if all the capital is invested in

fixed assets then working capital would be colleted by loans. In this case, the

success of business depends heavily on the mentality of the lender.

Again there should be similarity between the equity and liabilities of the

business. If the liability is higher than equity there would be hassle of getting

the loan, increase of interest expense which will lead the business to loss.

Equity should be higher than liabilities because if the liability is higher than

equity than there would higher probability of default. These things should be

considered.

The probability of owner to provide additional capital: In future the

business may require money for any reason. Then if the owner can not provide

additional capital, the business organization would not be able to maintain its

regular activity. As a result, the business may fail. So, it is required to know

whether the owner has desire or ability to provide additional capital for

business expansion or if necessary.

Ratio Analysis: By doing ratio analysis, one can have idea about the capital

condition of the business. From various ration one can know whether the

business have adequate capital or the capital is being used properly etc.

Condition: In selection of borrower, one of the most important thing is analyzing the

condition of the associated businessman and the business. Because if in a condition when the

business face serious competition and as a result it’s business goes down, in this situation the

borrower may not be able to repay the loan. That’s why analyzing the related condition of the

business and owner is so important. The following things should be considered to have an

idea about the related condition of the business:

Growth of the Industry: Whether the industry of the particular business has

any growth potentiality that has to be considered. Because if the industry does

not have any growth potentiality, the business will not be able to make profit

in long run. SO analyzing the growth of an industry is very necessary.

Competitive condition: What is the competitive advantage, who are the

competitors, what is the growth of the business compare to competitors, what

is the competitive price, quality, and production amount, process etc. – these

are things necessary to analyze before sanctioning of a loan.

Threat of new entry: If any new firm enters in an existing industry the

competition increase. Because of increased competition the borrower may fail

and the loan would not be repaid. That’s why before making any loan to any

business the entry and exit barrier should be considered of that industry to

have an idea about the threat of new entry.

Government assistance: Sometimes the success of a business depends on

whether the government wants to encourage or discourage the business. By

imposing / waiving tax or tariff government encourage or discourage any

particular business. Whether the borrower/ related business have any

government assistance or not that has to be considered.

Demand of the product: The demand of any product may be limited to any

particular area. In this case, the business of the product depends on the

particular area or particular group. Again the product distributed through few

dealers. In this case, the distribution / business depend on those particular

distributor group. These things has to considered before making any loan.

Collateral: Which assets are acceptable as collateral can be known by analyzing the

following things:

Whether there would be favorable judgment if case is filed to sale the

associated assets: To have a favorable judgment the following things should

be considered:

Whether the ownership of property and documents of ownership

are correct?

Whether the connected assets can be mortgaged?

Whether the borrower can influence the legal authority/

Whether the assets can be taken over after having judgment: To take over the

assets the following things should be considered:

The assets should have real existence.

The size, type, and location should be such that it can be taken

over.

Whether any other person or organization has taken over the assets

by force?

Whether the owner is so powerful that to take over the assets the

help of law making authority will not be available?

Whether the assets can be sold: Whether the assets is saleable can be known

by analyzing the following things:

The asset will have existence during sale.

The assets has to have such quality, quantity so that it can be sold.

The assets has to have demand in the market.

There should be customer for the assets and the customer will not

face any problem during purchase of asset.

Whether the sale proceed of assets I adequate enough to adjust the loan: For

that the analyzing of followings is necessary:

How much time will be required to sale the assets by taking legal

steps?

What would be the approximate sale price during sale?

How much would be the expenditure to sale the asset?

What is the present value of the money which would be received at

the time of sale?

By analyzing the above things, one should decide whether any particular assets can be taken

as collateral

4.14) Credit Risk Grading ModelTo measure the credit risk, the NCCBL follows the CRGM (Credit Risk Grade Model)

provided by the Bangladesh Bank. In this model the whole loan is measured in five criteria.

And there are assigned points for every criterion. And the total grade point of all the criteria

is 100. The criteria and their assigned points are mentioned below:

i. Financial Risk - 50

ii. Business/ Industrial Risk - 18

iii. Management Risk - 12

iv. Security Risk - 10

v. Relationship Risk - 10

A credit will be considered as ‘Good’ if it scored more than 85, ‘Acceptable’ if it scored

between 75-84, ‘Marginal / Watch List’ if it scored 65-74, ‘Special Mention’ if it scored 55-

64, ‘Sub-standard’ if it scored 45-54, ‘Doubtful’ if it scored 35-44, ‘Bad & Loss’ if it scored

less than 35.

A borrower whose credit risk grade is above 75 which means minimum “Acceptable”, will

get the loan.

The Credit Risk Grading Score Model is explained below with an example of a imaginary

Borrower Mr. X.

4.14.1) Credit Risk Grading Score Sheet

Borrower: Mr. X Aggregate Score: 76

Risk Grading: Acceptable

Group Name (if

any):

Branch:

Industry/Sector: YYY

Date of Financials:

Completed by:

Approved by:

Number Grading Short Score 1 Superior SUP Fully cash secured, secured by

Government/International Bank

Guarantee

2 Good GD 85+

3 Acceptable ACCPT 75-84

4 Marginal/ Watch list MG/WL 65-74

5 Special Mention SM 55-64

6 Substandard SS 45-54

7 Doubtful DF 35-44

8 Bad & Loss BL <35

Criter

iaWeight Parameter Score Score

Obtained

Actual

Paramete

r

A.

Financ

ial

Risk

50%

1. Leverage: (15%)

Debt Equity Ratio (×) -

Times

Total Liabilities to Tangible

Net worth

All calculations should be

based on annual financial

statements of the borrower

(audited preferred).

Less than 0.25×

0.26× to 0.35 x

0.36× to 0.50 x

0.51× to 0.75 x

0.76× to 1.25 x

1.26× to 2.00 x

2.01× to 2.50 x

2.51× to 2.75 x

More than 2.75×

15

14

13

12

11

10

8

7

0

.36 13

2. Liquidity: (15%)

Current Ratio (×) - Times

Current Assets to Current

Liabilities

Greater than 2.74×

2.50× to 2.74 x

2.00× to 2.49 x

1.50× to 1.99 x

1.10× to 1.49 x

0.90× to 1.09 x

0.80× to 0.89 x

0.70× to 0.79 x

Less than 0.70×

15

14

13

12

11

10

8

7

0

3.64 15

3. Profitability: (15%)

Operating Profit Margin

(%)

Operating Profit

×100

Sales

Greater than 25%

20% to 24%

15% to 19%

10% to 14%

7% to 9%

4% to 6%

1% to 3%

Less than 1%

15

14

13

12

10

9

7

0

17.50% 13

4. Coverage: (5%)

Interest Coverage Ratio

(×)-Times

Earning Before Interest

& Tax (EBIT)Interest on debt

More than 2.00×

More than 1.51× Less

than 2.00×

More than 1.25× Less

than 1.50×

More than 1.00× Less

than 1.24×

Less than 1.00×

5

4

3

2

0

43.64 5

Total Score–Financial

Risk

50 46

CriteriaWeight

ParameterScore

Actual

Parameter

Score

ObtainedB. Business/Industry

Risk 18%

1. Size of Business (Sales in BDT

crore)

The size of the borrower’s business

measured by the most recent year’s

total sales. Preferably based on

audited financial statements

> 60.00

30.00 – 59.99

10.00 – 29.99

5.00 - 9.99

2.50 - 4.99

< 2.50

5

4

3

2

1

0

< 2.50 0

2. Age of Business

The number of years the borrower

has been engaged in the primary line

of business.

> 10 years

> 5 - 10 years

2 - 5 years

< 2 years

3

2

1

0

7 Yrs. 2

3. Business Outlook

A critical assessment of the medium

term prospects of the borrower,

taking into account the industry,

market share and economic factors.

Favorable

Stable

Slightly Uncertain

Cause for Concern

3

2

1

0

Stable 2

4. Industry Growth Strong (10%+)

Good (>5% - 10%)

Moderate (1% -

5%)

No Growth (<1%)

3

2

1

0

Good 2

5. Market Competition Dominant Player

Moderately

Competitive

Highly

Competitive

2

1

0

Moderately

Competitive

1

6. Entry/Exit Barriers Difficult

Average

Easy

2

1

0

Average 1

Total

Score-Business/Industry Risk

18 8

Criteria Weight

ParameterScore

Actual

Paramete

r

Score

Obtained C.

Managem

ent Risk

12%

1. Experience

(Manageme

nt & Management

Team) The quality

of management

based on the

aggregate number

of years that the

Senior Management

Team has been in

the industry.

More than 10 years in the related

line of business

5–10 years in the related line of

business

1–5 years in the related line of

business

No experience

5

3

2

0

5-10 yrs.

In the

related

line of

business

3

2. Second Line/

Succession

Ready Succession

Succession within 1-2 years

Succession within 2-3 years

Succession in question

4

3

2

0

Ready

Successio

n

4

3. Team Work Very Good

Moderate

Poor

Regular Conflict

3

2

1

0

Moderate 2

Total Score-

Management Risk

12 9

Criteria Weight

Parameter

ScoreActual

Parameter

Score

Obtaine

d

D. Security Risk 10%

1. Security Coverage (Primary) Fully pledged

facilities/substantially cash

covered/Reg. Mortg, for HBL

4 Simple

Hypothecati

on / lien on

1

Criteria WeightParameter

Score Actual

Parameter

Score

Obtaine

d

Registered Hypothecation

(1st charge/1st Pari passu charge)

2nd Charge/Inferior charge

Simple hypothecation/

negative lien on assets.

No security

3

2

1

0

assets

2. Collateral Coverage

(Property Location)

Registered Mortgage on

Municipal Corporation/Prime

area property.

Registered Mortgage on

Pourashava/semi-urban area

property

Equitable Mortgage or No

property but plant & machinery

as collateral

Negative lien on collateral

No collateral

4

3

2

1

0

No collateral 0

3. Support (Guarantee) Personal guarantee with

high net worth or Strong

Corporate Guarantee

Personal Guarantees or

Corporate Guarantee with

average financial strength

No Support/Guarantee

2

1

0

Personal

guarantee

with high

net worth or

strong

Corporate

Guarantee

2

Total Score- Security Risk 10 3

Crit

eriaWeight

Parameter Score

Actual

Parame

ter

Score

Obtained

E.

Rela

tions

hip

Risk

10%

1. Account Conduct More than 3 (three) years accounts

with

faultless record

Less than 3 (three) years accounts

with

5

4

2

More

than 3

yrs. In

account

s with

5

Crit

eriaWeight

Parameter Score

Actual

Parame

ter

Score

Obtained faultless record

Accounts having satisfactory

dealings

with some late payments

Frequent Past dues & Irregular

dealings

in account

0

faultless

record

2. Utilization of Limit

(actual/projection)

More than 60%

40% - 60%

Less than 40%

2

1

0

More

than

60%

2

3. Compliance of

Covenants / Conditions

Full Compliance

Some Non-Compliance

No Compliance

2

1

0

Fully

complia

nce

2

4. Personal Deposits

The extent to which the

bank maintains a personal

banking relationship with

the key business

sponsors/principals.

Personal accounts of the key

business

Sponsors/ Principals are maintained

in the

bank, with significant deposits

No depository relationship

1

0

Personal

accounts

of the

key

business

Sponsors

/

Principal

s are

maintain

ed in the

bank,

with

significa

nt

deposits

1

Total Score-Relationship

Risk

10 10

Grand Total- All Risk 100 76

4.14.2) Definition of Risk Grading:

Risk Grade Score Definition

Superior Fully cash secured,

secured by

Government/Internati

onal Bank Guarantee

Facilities are fully secured by cash

deposits, government bonds, or a counter

guarantee from a top tier international

bank. All security documentation should

be in place.

Good 85+ The repayment capacity of the borrower

is strong. The borrower has excellent

liquidity and low leverage, consistently

strong earning and cash flow and

unblemished credit risk.

Acceptable 75-84 Adequate financial condition though may

not be able to sustain any major or

continued setbacks. These borrowers are

not as strong as “Good” grade borrowers

but should still demonstrate consistent

earnings, cash flow, and have a good

track record.

Marginal/

Watch list

65-74 These borrowers warrant greater

attention due to condition affecting the

borrower, the industry or the economic

environment. These borrowers have an

above average risk due to strained

liquidity, higher inconsistent earnings.

Special

Mention

55-64 These borrowers have potential

weaknesses that deserve management’s

close attention. If left uncorrected, these

weaknesses may result in a deterioration

of the repayment prospect of the

borrower.

Substandard 45-54 Financial condition is weak and capacity

or inclination to repay is in doubt. These

weaknesses jeopardize the full settlement

of loans.

Doubtful 35-44 Full repayment of principal and interest

is unlikely and the possibility of loss is

extremely high. However, due to

specifically is identifiable pending

factors, such as litigation, liquidation

procedure or capital injection, the asset is

not yet classified as Loss.

Bad & Loss <35 These assets are long outstanding with no

progress in obtainng repayment or in the

late states of wind up / liquidation.

4.15) Policy on Loan Classification and Provisioning:

Loan Classification:

Loan classification means giving each and every loan case a status like Unclassified

(Standard & Special Mention Account), Substandard, doubtful and bad/loss through

verification of borrower’s repayment performance on a particular date while provisioning

means setting aside fund from the profit against possible loan loss. This is done for

safeguarding the depositor’s owners’ equity and ensuring proper recycling of funds so as to

accelerate the economic growth of a country. Besides, a proper loan classification and

provisioning system ensures credibility of the financial system that in turn restores trust and

confidence in the minds of the depositors.

Categories of Loans for Classification:

All loans and advances will be grouped into four categories for the purpose of classification,

namely

Continuous loan

Demand loan

Fixed Term loan

Short Term Agricultural and Micro Credit

Continuous Loan: The loan accounts in which transactions may be made within certain limit

and have an expiry date for full adjustment will be treated as continuous loans.

Demand Loan: The loans that become repayable on demand by the bank will be treated as

Demand Loan. If any contingent or any other liabilities are turned to forced loans (i.e.

without any prior approval as regular loan) those too will be treated as Demand Loan.

Fixed Term Loan: The loans, which are repayable within a specific time period under a

specific repayment schedule, will be treated as Fixed Term Loans.

Short Term Agricultural Credit: Short Term Agricultural Credit will include the short term

credits as listed under the Annual Credit Program issued by the Agricultural Credit

Department of Bangladesh Bank. Credits in the agricultural sector repayable within less than

12 months will also be included herein. Short term Micro Credits will include any micro-

credits for les than Tk.10000 /= and repayable within less than 12 months, be those termed in

any names such as Non-agricultural credit, self-reliant credit, Weaver’s credit of bank’s

individual project credit.

4.15.1) Basis for loan Classification:

A. Objective Criteria

1. Any Continuous Loan if not repaid/renewed within the fixed expiry date for repayment

will be treated as irregular just from the following day of the expiry date. This loan will be

classified as Special Mention Account (SMA) if it is kept irregular for 3 months, Sub-

standard (SS) if it is kept irregular for 6 months or beyond but less than 9 month, as

‘Doubtful’ if for 9 months or beyond but less than 12 months and as ‘Bad-Debt’ if for 12

months or beyond.

2. Any Demand Loan will be considered as Special Mention Account (SMA) if it remains

unpaid for 3 months, Sub-standard if it is remains unpaid for 6 months or beyond but not

over 9 months from the date of claim by the bank or from the date of forced creation of the

loan; likewise the loan will be considered as Doubtful and Bad/loss if remains unpaid for 9

months or beyond but not over 12 months and for 12 months and beyond respectively.

3. In case any installment(s) or part of installment(s) of a Fixed Term Loan is not repaid

within the due date, the amount of unpaid installment(s) will be termed as ‘defaulted

installment’ & will be considered as Special Mention Account (SMA) if it remains unpaid

for 90 days and above but less than 180 days.

10.1.1.1 In case of Fixed Term Loans, which are repayable within the maximum five years of

time:-

If the amount of ‘defaulted installment’ as equal to or more than the amount of installment(s)

due within 6 months, the entire loan will be classified as ‘Sub-standard’.

If the amount of ‘defaulted installment’ is equal to or more than the amount of installment(s)

due within 12 months, the entire loan will be classified as ‘Doubtful’.

If the amount of ‘defaulted installment’ is equal to or more than the amount of installment(s)

due within 18 months, the entire loan will be classified as ‘Bad-Debt’.

10.1.1.2 In case of Fixed Term Loans, which are repayable in more than five years of time:-

a) If the amount of ‘defaulted installment’ is equal to or more than the amount of

installment(s) due within 12 months, the entire loan will be classified as ‘Sub-

standard’.

b) If the amount of ‘defaulted installment’ is equal to or more than the amount of

installment(s) due within 18 months, the entire loan will be classified as ‘Doubtful’.

c) If the amount of ‘defaulted installment’ is equal to or more than the amount of

installment(s) due within 24 months, the entire loan will be classified as ‘Bad-Debt’.

10.1.2. The Short Term Agricultural and Micro Credit will be considered irregular if not

repaid within the due date as stipulated in the loan agreement. If the said irregular status

continues the credit will be classified as ‘Sub-standard’ after a period of 12 months, as

‘Doubtful’ after a period of 36 month and as ‘Bad-Debt’ after a period of 60 months from

the stipulated due date as per loan agreement.

B. Qualitative Judgment:

If any uncertainty or doubt arises in respect of recovery of any Continuous Loan, Demand

loan or Fixed Term Loan, the same will have to be classified on the basis of qualitative

judgment be it classifiable or not on the basis of objective criteria.

If any situational changes occur in the stipulations in terms of which the loan was extended or

if the capital of the borrower is impaired due to adverse conditions or if the value of the

securities decrease or if the recovery of the loan becomes uncertain due to any other

unfavorable situation, the loan will have to be classified on the basis of qualified judgment.

Besides, if any loan is illogically or repeatedly rescheduled or the norms of re-scheduling are

violated or instances of (propensity to) frequently exceeding the loan-limit are noticed or

legal action is lodged for recovery of the loan or the loan is extended without the approval of

the proper authority, it will have to be classified on the basis of qualitative judgment.

4.15.2) Classification of loans and advances

Bank is an institution where clients keep their surplus deposits and these deposits are invested

in trade, commerce and industries in the form of Loans & Advances to earn profit. Apart

from earning profit, by lending to priority sector, Bank also helps country’s economic

development. Lending activities of the Commercial Banks are of two natures:

(A) Continuous Credit.

(B) Term Loan.

In continuous credit the client is given a credit limit for a specified period mostly for 1 (one)

year. The borrower is allowed to make transaction up to that limit. In other word, he can

deposit and withdraw up to the fixed limit in revolving manner.

On the other, in case of Term Loan, Loan is first disbursed at a time or in phases. Then it is

borrower’s turn to repay the Loan after a certain fixed period at a time or in installments fixed

for within a certain period.

(A) Continuous credit

(i) Cash Credit (Hypothecation)

(ii) Cash Credit (Pledge) SOD

(iii) SOD (Financial Obligation)

(iv) SOD (General)

(v) OD etc

(i) Cash Credit (Hypothecation): This facility shall be available both for Trading Houses

and. Manufacturing concerns against primary security of hypothecated inventory/ stocks of

Finished, Raw Materials and machineries. However, as the primary security remains at the

disposal of the borrower with practically no control of the lending institution, NCCBL shall

extend such facility only against retention of adequate eligible Collateral Security favoring

bank. Criteria of such Eligible Security shall be as per circular of Head Office and within the

guideline set by Bangladesh Bank in this regard

(ii).Cash Credit (Pledge): NCCBL shall retain the provision to extend WC finance under the

head. As the Primary Security i.e. Finished or Raw by regulation is supposed to be under

strict control of the bank, the arrangement on practical experience eventually proves

cumbersome due to numerous difficulties in maintaining the formalities related to strict

supervision and monitoring. Therefore, NCCBL shall prefer to consider such facility only

under Hypothecation unless assurance and arrangements are available about compliance on

the spirit of the portfolio.

(iii) Secured Overdraft (Financial Obligation): Credit Facility in the form of Loan and

Overdraft can be considered against Lien of various Financial Obligations subject to credit

restriction or any directive as imposed by regulating authorities or Head Office. Necessary

guidelines with regard to extension of the facility shall be as per direction of the Head Office/

Bangladesh Bank.

(iv) Secured Overdraft (General): NCCBL shall consider facilities under the portfolio

against valid Work Order/Supply Orders payment against which shall be duly assigned

favoring the bank by the work awarding office/ agency. The portfolio in nature shall be of a

Loan type and not continuous. The WO shall be construed as Primary Security in this regard.

However, as the nature of facility carries inherent risk, NCCBL shall prefer Collateral

Securities while considering facilities under the head.

(B) Term Loan

(i) Project Loan

(ii) House Building Loan

(iii) Packing Credit

(iv) LIM (Loan against Imported merchandise)

(v) LTR (Loan against Trust Receipt)

(vi) Transport Loan

(vii) Lease Finance

(viii) PAD (Payment against Documents)

(I) Project Loan: NCCBL shall allow Loans for longer duration to enable its investment to

be returned by way of repayment after detailed assessment and feasibility study as per its

guideline for entrepreneurs and investors willing to come to an arrangement in setting up

industries and different production unit complying to rules and regulations of government’s

Investment & industrial policy.

As investment shall be for longer duration and fraught with unforeseen risks, bank shall

obviously seek adequate eligible securities to cover itself. Acceptance of such securities shall

be as per laid down principles of the bank and Bangladesh Bank guidelines in this regard.

(ii) House Building Loan: Bank shall allow credit facilities under such portfolio strictly as

per PPG within the Prudential Regulations of Bangladesh Bank for Consumer Financing.

(iii) Packing Credit: This facility also relates to financing at Pre shipment stage. NCCBL

shall consider such facility under defined guidelines against export of various commodities.

(iv) Loan against Imported Merchandise (LIM): Loan against the security of

merchandise imported through bank shall be allowed against Pledge of goods. The procedure

and conditions for allowing such facility under prior arrangement or forced circumstances

shall be strictly as per related guideline of the bank. Due to inherent complexities, the

portfolio should be discouraged.

(v) Loan Against Trust Receipt (LTR): Bank shall be selective in extending the facility but

shall prefer due to comfort in binding the customer legally. Generally such facility shall be

against arrangement and preferable against collateral security favoring the Bank.

(vi) Transport Loan: NCCBL may extend Transport Loan on close scrutiny of the purpose,

Feasibility, experience of the borrower, credit/trust worthiness and above all security aspect

as per its guidelines in this regard.

(vii) Lease Finance: An entrepreneur, under this scheme may avail of lease facilities to

procure industrial machinery and equipments, Vehicles etc. (without having to purchase it by

down payment) with easy repayment schedule on case to case basis. Rate of interest under

this Scheme is 16% P.A.

(viii) Payment against Documents (PAD): This facility originates against payment of

Import Bills on lodgment of CLEAN shipping documents received from Foreign

Correspondent against Letter of Credit opened on behalf of the customers.

(ix) IBP & FBP (Inland &Foreign Bills Purchased): The facility relates to extension of

credit at the post Shipment stage. NCCBL shall consider facility under the portfolio to relieve

the exporter strictly on complying standing conditions attached to it. NCC Bank’s Special

Credit: It’s based on the common credit requirement of the society. Besides, these products

have expanded.

The Bank with diversified source of income. These are:

(a) Small Business Loan

(b) Personal Loan

(c) House Renovation Loan

(d) Consumer Finance

(e) Festival Business Loan.

(f) Festival Personal Loan.

(g) NCC Bank Housing Loan Scheme.

4.15.3) Claim of guarantee

In case the guarantee is presented for encashment and balance of customers account including

cash margin held is sufficient to cover the amount of guarantee, the same should be paid by

pay order to the debit of customers account. It the balance is not sufficient the customer

should be asked to deposit the amount of shortfall immediately, and in case of his failure, the

bank must pay the claim by forced loan in borrowers account before statement of claim under

guarantee furnished by the banks it must be ensured that the claim is justified as per term of

guarantee. The customer shell also be informed as usual before settlement of the claim.

4.15.4) Accounting Procedure of the interest of classified loans:

Of any loan pr advances is classified as SMA, ‘Sun- standard’, and ‘Doubtful’, interest can be

charged in the loan account; but the interest thus charged cannot be transferred to income

account. The total interest charged in the SMA, Sub-standard, and Doubtful loan account will

have to be preserved in the ‘Interest Suspense Account’.

If any loan or advances is classified as ‘Bad Debt’, charging of interest in the same account

will be suspended in case of filing a law-suit for recovery of such loan, interest for the period

till filing of the suit can be charged in the loan account loan in order to file the same for the

amount of the principle plus interest. But interest thus charged in the loan account has to be

preserved in the ‘Interest Suspense’ Account. If any interest is charged in any ‘Bad Debt’

account for any other special reason, the same will be preserved in the ‘Interest Suspense’

account.

If classified loan or part of it is recovered i.e. real deposit is effected in the loan account, first

the interest charged and not charged is to be recovered from the said deposit and the principal

to be adjusted afterwards.

A Continuous credit, Demand loan or a Term loan which will remain overdue for a period of

90 days or more, will be put into the “Special Mention” account and interest accrued on such

loan will be credited to ‘Interest Suspense’ account , instead of crediting the same to Income

Account.

4.16) Maintenance of Provision:

A. Banks will maintain provision at the following rates in respect of Classified,

Continuous, Demand loan, and Fixed Term Loans:

Loan classification system (rate of provision)

(As per BRPD circular letter no.08 dated: 16.09.2005 & BRPD circular dated 06.122005)

Overdue

Procedure

Status of CL Stac and Micro

Credit

All other Credit

Rate of Provision on

base for provision

Rate of provision on

base for provision

Less than 3

months

Standard 5% General provision:

@1% (Except Small

Enterprise Financing)

@25 Small Enterprise

Financing

@5%Consumer

Financing

3 months &

above

Special

Mention

(SMA)

5% 5%

3 months or

more but less

than 6 months

Sub-

Standard

5% 20%

More than 6

months but

less than 12

months

Doubtful 5% 50%

12 months or

more

Bad/Loss 100% 100%

B. Provision will be made maintained at the above rate on the balance to be ascertained by

deducting the amount of ‘Interest Suspense’ and the value of eligible securities from the

outstanding balance of classified loan. General provision @1% against unclassified loans is

also to be mentioned.

C. In the definition of Eligible Securities mentioned in the above paragraph the following

securities will be included:

List of eligible securities with their percentage of value:

(as per BRPD circular letter No-05 dated 27.04.2005)

Eligible Securities % to be considered

Market value of gold/ornaments kept in the bank’

custody

100%

Duly discharged financial instruments like FDR,(PSP

Government bonds)

100%

Guarantee made by the government/Bangladesh Bank 100%

Easily marketable goods pledged under banks custody 50%

Market value of mortgaged land and building 50%

Duly discharged share certificates considering the face

value or last six months average market value whichever

is lower

50%

4.17) Deposit Mobilization

General banking department is the heart of all banking activities, especially to mobilize the

deposits. All other departments are linked with this department. It plays a vital role in deposit

mobilization of the branch. National Bank Limited provides different types of Accounts,

locker facilities, special types of saving scheme and flexibilities of remittance under general

banking.

This department performs the general function of banking. In National Bank Ltd. For

performing the operation of this department a good number of people are allotted for the

purpose of Deposit Mobilization. The general banking department of National Bank (Foreign

Exchange Branch) consists of the following section:

1. Dispatch section

2. Accounts opening section

3. Cash Management section

4. Remittance section

5. Deposit section

6. Clearing section

7. Credit Card section

1. Dispatch section

Dispatch division operates the function of dispatching the intimation letter to the client,

IBCA, IBDA, and OBC to the other banks for internal transaction with bank. The officer

engaged in the dispatch division maintains two types of register books to entries for record of

these documents particulars.

These two types of register books are:

1. Inward mail registers.

2. Outward mail registers.

2. Accounts opening section

Opening Different Types of Accounts

Account opening is the very first and preliminary job for a bank. As NCCBL does not make

any business contract unless having an account on their bank, so account opening is the most

important work of the general banking division.

(I)Current Deposit (CD) Account (A/C): Any businessman, firm, limited companies, local

bodies, corporate bodies, etc. can open a current A/C with NCCBL. Current deposit is 100%

demand deposit and account holder can deposit/withdraw his/her deposits frequently without

any limit.

Requirements for openining CD A/C: Requirements may vary from types of the organization,

such as:

Individual

• Personal ID

• Copy of a Passport or ward commissioner certificate

• Any introducer of that respective bank

• Fill up Know Your Customer (KYC) form.

Joint Owner

• Trade license

• Proprietor’s ID

• Any introducer of that respective bank

• Fill up Know Your Customer (KYC) form.

Limited Company

• Memorandum of Articles (MOA)

• Association of Articles (AOA)

• Certificate of Incorporation.

Features of CD A/C: CD accounts have the following features:

(1).Submitting Tk.5000 to open a current account.

(2).It is understood that the balances at credit will not less than Tk.5000. A minimum charge

Tk. 100 must be paid on all operative accounts.

(3).Only the form of cheque book supplied by the bank should be used. Cheques materially

altered will not be paid unless such alteration bears the signature of the drawer in full.

(4).The account holders must give the same signature for withdraw money that deposited in

the bank previously.

(ii) Saving Bank Deposit (SB): Any individual person, local bodies, club, society,

association house wife, student, non-profitable organization, etc. can open a saving bank

deposit account with NCCBL. Savings bank deposit is both time and demand deposit, of

which 10% is demand and 90% is time deposit and the account holder can withdraw his/her

deposits twice in a week up to a certain limit.

Requirements for opening SB A/C: Requirements may vary from types of the organization,

such as

Individual

Personal ID

Copy of a Passport or ward commissioner certificate

Any introducer of that respective bank

Nominee’s photograph

Fill up Know Your Customer (KYC) form.

Joint Owner

Trade license

Proprietor’s ID

Any introducer of that respective bank

Fill up Know Your Customer (KYC) form.

Limited Company

Memorandum of Articles (MOA)

Association of Articles (AOA)

Certificate of Incorporation

Features of SB A/C: SB accounts have the following features:

1) Any matured but not unsound mind can open a savings account.

2) One account holder can transfer his or her account in the branch to another branch

without any cost if he or she interested.

3) Minimum deposit Tk 5,00 to open an A/C

4) SB A/C offers 6% interest charges semi-annually to the depositor’s account.

5) One time at least within 6 months an A/C holder must transaction with the bank to

continue the A/C.

6) Charges Tk.250 for close

(iii) Fixed Deposit Account (FDR):

Any individual person, businessman, firm, limited companies, local bodies, corporation,

corporate bodies, etc. can open Fixed Deposit A/C with NCCBL. FDR is 100% time deposit

and A/C holder can usually withdraw his/her deposits after maturity of the fixed deposit.

However, depositors of FDR can withdraw their deposits before maturity if they desire.

FDR is also known as time liabilities or term deposits. Higher rate of interest is given on this

type of deposit. Fixed deposits generally constitute more than half of the total deposits with

the bank.

Requirements for openinR FDR:

Minimum requirement Tk.50,000 to make a FDR

Above Tk.5, 00,000 in case of FDR, a report regarding FDR must be sent to Bangladesh.

Interests & other charjies:

Time Interest Rate

1 month 8% p.a.

3 months 11.50%p.a.

6 months 11.75% p.a.

12 months 12%p.a.

Government tax: Government will charge 1 0% income tax on the amount of income from

interest.

(iv) Short Term deposit (STD): Any individual person, businessman, firm, limited

companies, local bodies, corporation, corporate bodies, etc. can open a short term deposit

account with NCCBL. STD is 100% time deposit and an account holder can withdraw his/her

deposits with prior notice to the bank. For that reason STD is also called a Special Notice

Deposit A/C.

(v) Special savings Scheme (SSS): Any individual person can open a special savings scheme

deposit account with NCCBL for a tenure of 5/10 years with monthly deposit of Tk.500 and

multiple of Tk.500 up to Tk.10000. SSS A/C is 100%

term deposit and account holder can withdraw his/her deposits after maturity of SSS/A/C.

(vi) Special deposit Scheme (SDS): Any individual person, businessman, firm, limited

companies, local bodies, corporation, corporate bodies, etc. can open a SDS A/C with

NCCBL. SSS is a term deposit with payment of interest is payable on monthly basis. An

account holder can withdraw his/her deposits after maturity of SDS A/C.

3. Cash management section

Cash management section of any bank plays vital role in general banking department because

it deals with the most liquid assets. The proper management of this section entails overall

effectiveness of any bank. NBL has a very equipped cash section. This section is responsible

for the following function:

1. Receipt of deposit.

2. Making payment to the customers.

3. Management of vault of the branch.

1. Receipt of deposit This section receives deposit or funds from the customer and the

collection procedure as follows:

•At first the amount is counted and if ok then verified the purity of the note paid if there is

any confusion of the teller.

•word over the deposit slip.

•At last the receiving officer/ teller signed the deposit slip and by the sign of the authorized

officer the deposit of fund finished in favor of a customer.

•In case of received of clearing cheque, the cheque is scrutinized at first whether the cheque

is authenticated as per the NI Act. If satisfied then a crossing is marked so that this cheque

never been enchased over the cash counter

•Then the amount is kept apparently deposited in the customers account and the cheque

proceeds to the clearing house accordingly.

2. Making payment to the customer: The payment is made to the customer only against a

valued authentic cheque. the teller has to follow the following steps in making such payment:

•Receiving the cheque from the customer.

•Examining the cheque.

In case of examining the cheque, the teller is predated then the date is to be sure about the

folipwing questions:

(ii)Amount is written in word and in figure and both is valued same;

(iii)Signature is installed and it is as it is the signature kept in the bank;

(iv)There is sufficient amount in the customer’s accounts for making payment.

•Finally the “cash paid” seal is marked over the cheque leaf for the collection of the cheque

after making the payment to the customers.

3. Management of the vault:

The cash section also manages the vault of the branch. The manager of cash section is the in

charge of the necessary liquid money in the vault for the payment of the customer.

Chapter- 6

Remittance & Others

5.1) Remittance Products

Special Interest rate on Savings and Term Deposits

Wage Earners Welfare Deposit Pension Scheme

Loans for Real Estate (Land purchase and House construction/renovation)

Advance against Regular Remittance

5.2) Remittance Service

Correspondence arrangement with more than 330 Financial Institutions all over the World

For Wage Earners Remittance we have Agency arrangement with 12 reputed Exchange

Houses covering major Locations of our Expatriates

5.3) Mode of Remittance

The modes of remittance by the wage earned are:

1. T.T – Telegraphic transfer.

2. M.T – Mail transfer.

3. F.D – Foreign Draft.

4. T.D.D – Taka demand Draft.

5. T.C – Traveler cheque.

6. Foreign currency notes.

5.4) Foreign Exchange

Foreign Exchange is a process which is converted one national currency into another and

transferred money from one country to other countries. Foreign exchange is the rate of

exchange in the both country’s currency.

In NCCBL, the Foreign Exchange Department has two sections

•Import section

•Export section

1) Import Section

Import of merchandise involves two things: bringing of goods physically into the country and

remittance of foreign exchange towards the cost of the merchandise and services connected

with its dispatch to the importer.

Import Procedure for obtaining IRC (Import Registration Certificate) Submission of LCA

(Letter of Credit Authorization) Form distribution:

Opening LC:

1) Examination of import documents sent to the foreign exporter

2) Payments against documents of release order from the bank

3) Receiving the documents

Post Import Finance:

LTR (Letter of Trust Receipt): Letter of Trust Receipt occurs when an importer fills up the

LTR form and applies for it LTR is permissible only if the importer is a reputed, trust worthy

and having done business with the particular bank for a long time. LTR creates an option for

the importer to pay due by future installment.

Loan against Imported Merchandise (LIM): Loan facility up to a satisfactory limit to the

traders customers by the bank against security of the value of the given only to the selective

customers who have been doing business with the bank for a long time.

Payment against Documents (PAD): After receiving the documents sent by the foreign

exporter which include bill of exchange, shipping documents etc. the importer pays the dues

against the documents received by the bank and latter on releases the merchandises from the

port. So, after due payments, which include commissions, product price, charges for SWIFT,

and miscellaneous, the party is eligible to take the release documents from the bank on this

payment is called PAD.

2) Export Section

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

Act, 1950. No person who has been granted registration by the Chief Controller of Imports

and Exports shall indent, import or export any goods into or out of Bangladesh except in

cases of exemption issued by the government. The registration number should be quoted on

the relative export forms. There are a number of formalities, which an exporter has to fulfill

before and after shipments of goods. These formalities or procedures are enumerated as

follows:

~ The Registration of Exporters

~ Preparations of the Export Documents

> Dispatch of Goods

> Send Shipping Advice

~ Negotiation of Documents

~ Realization of Export Proceeds

~ Get the name of the Importer/Buyer:

> Price/Quotations:

~ Communicate the Acceptance:

~ Obtain Export Code Number:

Keep the goods ready for dispatch: Inspection of Goods Getting Shipping Space.

Get in touch with the Port Authorities Are required to be forwarded to the opening banker

along with the bill, the credit is called a documentary credit.

Function of Foreign Exchange:

The Bank actions as a media for the system of foreign exchange policy. For this reason, the

employee who is related of the bank to foreign exchange, specially foreign business should

have knowledge of these following functions

i) Rate of exchange.

ii) How the rate of exchange works.

iii) Forward and spot rate.

iv) Methods of quoting exchange rate.

v) Premium and discount.

vi) Risk of exchange rate.

vii) Causes of exchange rate.

viii) Exchange control.

ix) Convertibility.

x) Intervention money.

xi) Foreign exchange transaction.

xii) Foreign exchange trading.

xiii) Export and import letter of credit.

xiv) Non-commercial letter of trade.

xv) Financing of foreign trade.

xvii) Nature and function of foreign exchange market.

xviii) Rules and Regulation used in foreign trade.

xix) Exchange Airtime

5.4.1) Foreign Exchange takes place in NCCBL.

Remittance means transferring of fund through different instruments other than cheque.

The following two types of Remittance are performed by NCCBL.

Types of remittance: Remittance is basically two types:

1) Local remittance.

2) Foreign remittance.

Local remittance

Remittance is significant part of the general banking> The bank receives and transfers

various types of bills through the remittance within the country. Obviously the bank charges

commission on the basis of bills amount NCCBL remittances is safe, swift, inexpensive and

simple.

Types of local Remittance of NCCBL: The local remittance includes the following:

a) Pay Order(PO)

b) Demand Draft(DD)

c) Telegraphic Transfer(TT)

d) Mail Transfer(MT)

(a) Pay Order(PO):

Pay Order is an instrument that contains an order for payment to the payee only incase of

local payment whether on behalf of the bank or its constitution. Unlike cheque there is

possibility of dishonoring Pay Order. NCCBL charge different amount of commission on the

basis of Pay Order amount.

(b) Demand Draft:

By DD any person can send money from one branch to another branch of NCCBL. To send

the money he/she must fill up the NCCBL’s prescribed form of DD and paid

charge/commission and receives DD block. The following information are included in the

DD block:

•Name of the sender branch

Name and account of the party who receives the money.

•For security purposes a confidential test number are included in the DD block

•Amount of money to be transferred

•Name of receiver branch

(C) Telegraphic Transfer:

• To send money urgently NCCBL may be requested for TT on payment of a nominal charge

and telegram charge.

• Any person urgently sends money from one branch to another branch within NCCBL

through TT.

When a message of TT sends through phone from one branch to another branch in that time

the message received by the authorized officer who has a right of power of attorney. After

that, he/she fills up the TT form. Following things are included in the TT form:

i). TT number

ii). IT test number

iii). Name and account number of the payee

iv). Power of attorney number of the sender and receiver of TT.

v). The amount to be transferred.

vi) After fill up the TT form, he tests the test number of TT. If he ensures througli testing the

test number then he credits the account of the payee. On the other hand, if the test number is

not proved then he calls back to the sending branch of TT and request to send a new TT.

(d) Mail Transfer:

Money can be sent through mail transfer to any body who has an account in any other branch

of the same bank for this purpose the sender shall have to furnish the details like:

•The name of the beneficiary and his account number

•The amount to be transferred

•The name of the branch where the account is maintained

Foreign remittance

NCC Bank is the member of Money Gram and SWIFT networks. Using the services of this

global network, non-resident Bangladesh nationals can send money from abroad to their

home country within a few minutes without any risk.

Types of Foreign remittance

(i) Money Gram: Money Gram is represented in over 115 countries and is available at more

than 25,000 locations worldwide. In the USA alone Money Gram is available at inore than

15,000 locations.

• Sender completes a “send” form and gets a receipt. Money Gram Agent gives a Ref:

No. Which has to be passed to the receiver?

NCC Bank makes an enquiry on the Money Gram computer network to obtain authorization

to pay recipient and recipient receives the fund.

Money Gram is one of the fastest ways to transfer money. Customers using Money uGram

can send or receive money usually within 10 minutes from any world.

• To get the money the recipient need not to have a bank account with NCC Bank Ltd.

NCCBL does not levy extra charge. It gives better exchange rate to the recipient.

(ii) Placid Express: In March 2002, the bank has entered a Taka drawing arrangement with

Placid Express, for home remittances of Bangladeshi expatriates in the United States.

(iii) X-press money: The X press Money Services would like to welcome NCCBL to their

network. X press Money (XM) is a web-based person-to-person money transfer system that

allows an individual to send/receive money through any of our network agents instantly. All

transactions are done through secure servers using 128-bit encryption technology so as to

provide maximum security

(iv)Al Fardan: Al Fardan Exchange, the pioneer in money exchange and worldwide

remittance services in the U.A.E., established in 1971, is a trusted name for millions of

residents and expatriates. A modern exchange house with advanced infrastructure and

Courteous staff, has an extensive network of correspondent banks all over the world to

facilitate faster, completely reliable transactions.

(v) Habib express: Habib express is another important medium through which wage earner

remittance is accepted by NCC Bank. Here head office at first enter in system

server and received necessary information about the amount of remittance, beneficiary who

will receive the amount and any reference number which work as security for Bank as well as

beneficiary. Head office gives information through fax to it respective branch from ~where

receiver will receive money.

(vi) Dhaka Janata: Dhaka Janata are introduces to provide remittance fucilities to emigrant

and other people of Bangladeshi who work as contractual basis in the Italy. Here Dhaka

Janata also maintain same procedure of getting information from system server including the

name, referance number, amount, Phone number etc.Here head office sends information

through fax to all respective branch. All receivers when come to bank,respective branch

check his information with information received from head office.

5.16) Deposit Section

Deposit is the lifeblood of a bank. From the history and origin of the banking system, deposit

collection is the main function of a bank.

Accepting deposits:

The deposits that are accepted by NBL like other banks may be classified in to,-

a) Demand Deposits

b) Time Deposits

(a) Demand deposits: These deposits are withdrawn able without notice, e.g. current

deposits. National Bank Limited accepts demand deposits through the opening of, -

o Current account

o Savings account

o Call deposits from the fellow bankers

(b) Time deposits: A deposit which is payable at a fixed date or after a period of notice is a

time deposit. National Bank Limited accepts time deposits through Fixed Deposit Receipt

(FDR), Short Term Deposit (STD) and Beared Certificate Deposit (BCD) etc. While

accepting these deposits, a contract is done between the bank and the customer. When the

banker opens an account in the name of a customer, a contract arises between them. This

contract will be valid one only when both the parties are competent to enter into contract. As

account opening initiates the fundamental relationship & since the banker has to deal with

different kinds of persons with different legal status, National Bank Limited officials remain

very much careful about the competency of the customers.

5.17) Schedule of Charges

A) Foreign Exchange Transactions:

S/N Type of Services Nature of Charges Charges to be revised asper Bangladesh Bank instruction

1 LC opening at sight Commission: For firstquarter and subsequenteach quarter or partthereof

@ 0.40%

2 LC opening under deferredpayment/Usance

Commission: For firstquarter and subsequenteach quarter or partthereof

@ 0.50%

3 LC opening at 100% cashmargin

Commission:For first quarter andsubsequent each quarter orpart thereof

@ 0.25%

4 LC opening under Back toBack

Commission: For firstquarter and subsequenteach quarter or part thereof

@ 0.40%

5 For Transmission of LC,Amendment of LC,Confirmation,Cancellation, ForeignCorrespondent charge

Courier Charge (Local)At actualCourier Charge (Foreign)Mailing ChargeTelex/SWIPTFC Charge if charges are onapplicants account

At actual

6 LC Advising Charge Commission Tk.750/-7 LC amendment

advisingcharge

Commission Tk.750/-

8 LC Transfer Charge Commission Tk.750/-9 Acceptance

commission ofDrafts/Bills under deferred

Commission: For f i r s tquarter and subsequenteach quarter or partthereof

@ 0.40%

payment/Usance LC includinggarments related BTB LC

10 Confirmation charge for localLC

Commission @ 0.20%

11 Foreign CorrespondentCharges (FCC) Local part

Nil

12 Data Max Charges Nil13 Handling Charges Nil14 Copy Document

EndorsementCharges

Nil

15 LC cancellation or expiredunutilized LC charges

Nil

16 Export Bill Negotiation

Commission @ 0.15% per quarter

17 Export Bill Collection

Commission @ 0.15% per quarter

18 Issuance of certificate for Backto Back LC

Fees Tk.500/-

19 C&F Certificate issue charge

Fees Tk.500/-

20 Issuance of PRC Fees Tk.500/-21 FDBP Overdue Interest ln case the exporter

submitsexport documents complyingcredit terms under irrevocablesight letter of credit and banknegotiates documents, nooverdue interest is to be chargedon exporter's account as per'Export Policy 2006-09'

B) General Banking:

S/N Type of Charges Charges to be revised as per Bangladesh Bank instruction

1 Service Charge on Accounts:i. Current Deposit/STD

Free

2 ii. Savings Deposit Free3 iii. All Loan Accounts iii. Tk.500.00 half yearly

on each loan account except Agri-Loan.Free for Agri-Loan account.

4 Account Maintenance Fee i. SB Account Tk.300.00 On half yearly basisii. CD Account Tk.500.00 On half yearly basis

5 Account Closing Charges i. STD/CD: Tk.300.00ii. SB: Tk.200.00iii. FDR & Other Schemes: Nil (For premature encashment

6 Account Transfer Fee Free7 Balance Confirmation

Certificate (BC)Regular two half yearly : FreeTk.200.00 for issuance of additional BC other than regular half yearly.

C) Advance & Other Charges:

S/N Type of Charges Charges to be revised as per BangladeshBank instruction

1 Issuance of certificate for opening "Beneficiary Owner'sAccount"

Tk.100/-

2 Early settlement fees of loan @2%3 Counter Transaction Fee Nil4 Charge documents on Agri-Loan At actual, not exceeding

Tk.500.00

5.18) Clearing

Clearing is a system by which a bank can collect customers fund from one bank to another

through clearing house.

(A) Outward Clearing: When the branches of a bank receive cheque form its customers

drawn on the other banks within the local clearing zone for collection through Clearing

House, it is Outward Clearing.

(B) Inward Clearing: When the branches of a bank receive cheque drawn on them from

other banks in the Clearing House, it is Inward Clearing. 3.1.6.2 Clearing House: Clearing

House is a place where the representatives of different banks get together to receive and

deliver cheque with another banks.

5.18.1) Types of c1earing house

There are two type of clearing house:

A) Normal clearing house

B) Same day clearing house

(A) Normal clearing house:

1) 1st house: 1st house normally stands at 10 am to 11 am

2) 2~K~ house: 2nd house normally stands after 3 p.m. and it is known as return house.

(B) Same day clearing house:

1) 19iouse: 1st house normally stands at 11 am. to 12 p.m

2) 2~k house: 2nd house normally after 2 p.m. and it is known as return

5.18.2) Return house

Return House means 2nd house where the representatives of the Bank meet after 3 p.m. to

receive and deliver dishonored cheque, which place in the 1 g Clearing House. Cheque may

be dishonored for any one of the following reasons:

1) Insufficient fund.

2) Amount in figure and word differs.

3) Cheque out of date/ post- dated.

4) Payment stopped by the drawer.

5) Payee’s endorsement irregular/illegible / required.

6) Drawer’s signature differ / required.

7) Crossed cheque to be presented through a bank.

8) Other specific reasons not mentioned above.

5.18.3) Bills Collection

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

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

transaction. Commercial bank’s duty is to collect bills on behalf of their customer.

Types of Bills for Collection of Clearing

a) Outward Bills for Collection (OBC)

b) Inward Bills for Collection (l B C)

(a) What is OBC?

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

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

1) OBC with different branches of other banks

2) OBC with different branches of the same bank

Procedure of OBC:

1) Entry in the OBC register.

2) Put OBC number in the cheque.

3) “Crossing seal” on the left corner of the cheque & “payees account will be credited on

realization” seal on the back of the cheque with signature of the concerned officer.

4) Dispatch the OBC cheque with forwarding.

(b) Inward bills for collection (IBC)

when the banks collect bills as an agent of the collecting branch, the system is known as IBC.

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

forwarding letter and the bill.

Procedure of IBC:

1) IBC against OBC: To receive the OBC cheque first we have to give entry in the IBC

Register. The IBC number should put on the forwarding of the OBC with date.

2) Deposit of OBC amount: OBC cheque amount is put into the “sundry deposit sundry

Creditors account”, prepare debit & credit vouch of it. If the OBC cheque is honored, send

credit advice (IBCA) with signature & advice number of the concern branch for the OBC

amount.

3) If the OBC cheque is dishonored, the concerned branch is informed about it. Again place

in the clearing house or send the OBC cheque with Return Memo to the issuing branch

according to their information.

5.18.4) Others Activities

Utilization of Fund

As a private commercial bank, NCCBL has some inherit commitments to its society. By

utilization the fund from the mobilized deposit NCCBL is fulfilling its commitment which

can gear up the economic activity. NCCBL has been extending credit facilities to the

potential, productive and priority sectors as per instruction from Bangladesh bank. For a

bank, good loans and advances are most profitable asset. A big portion of operating income is

derived from lending. This activity is done by the loans and advance department.

5.19) About of LIC

On behalf of the importer if the bank undertakes to make payment to the foreign bank is

known as documentary credit or letter of credit. The letter of credit is issued against payment

of amount by the importer or against satisfactory security.

5.19.1) Application for Opening LIC

At first, an importer will request banker to open L/C along with the following documents:

2. Indent or Proforma Invoice

3. Import Registration Certificate (IRC)

4. Taxpayer Identification Number (TIN)

5. Insurance cover note with money receipt

6. A bank account.

7. Membership of chamber of commerce

L/C Application

NCCBL provides a painted form for opening of L/C to the importer. The importer gives the

following information is that form:

• Full name & address of importer.

• Date & place of expiry of the credit.

• The mode of transmission of document (courier/mail/telex)

• Whether the confirmation of the credit is requested by the beneficiary or not.

• Whether the partial shipment is allowed or not.

• The type of loading (loading on boarding).

• Brief description of the goods to be imported.

• Availability of the credit by sight payment acceptance /deferred payment.

• Within she specific time duration *the document should be presented.

• Sales terms (FOB/CIF/C & F).

• Account number.

• L/C amount.

• Shipping mark.

• H.S. code number of the goods to be imported.

• IRC number.

• LCA number

• Insurance cover note.

• Country of origin.

The above information is given along with the following documents:

• Proforma Invoice, which gives description of the goods including quantity, Unit price.

• Four set of IMP form.

• The insurance cover note, issuing company & the insurance number.

Importer’s Application for L/C Limit/Margin: To have an import L/C limit, an importer

submits an application to NCCBL. In that application he/she gives full detail of the

following:

Full particulars bank accounts.

• Nature of business.

• Required amount of limit.

• Payments terms & condition

• Goodstobe imported

• Offered security

• Repayments schedule

LC Margin: LC margin is the amount of down payment or deposit to open the LC. This is a

sort of security for the LC purpose. Usually the margin varies from importer to importer.

Generally a regular importer enjoys a lower margin facility from 10%-20% and for a new

customer of the bank the margin may be 80%-100%.

• Charges: Handling charge per document Tk.1000

Accepted Commission:

Duration Commission

90 Days (Pt Quarter) 0.60%

120 Days (2fld Quarter) 0.90%

180 Days (3Tc~ Quarter) 1.20%

Postage charge- Tk.200

Stamp charge-Tk. 150

SWIFT charge-Tk.3 500 per document

Transmission of L/C: The ways of transmission of L/C are as follows

i) Through SWIFT

ii) Through Telex

iii) Through DHL or FEDEX

iv) Through Emergency Mail Service (EMS)

5.20) Back to Back or Countervailing Credit:

The beneficiary of a documentary credit may, for the purpose of fulfilling his obligation

under the credit, open a counter credit in favour of another party to ship the goods of his

purchaser (importer). This is known as Back to back credit and is issued conditional terms

except prices and invoices. The difference in the prices goes to the benefit of the original

beneficiary.

5.21) SWIFT

NCC Bank is a member of society for inters bank financial telecommunication. Worldwide. It

ensures secure messaging having a global reach of 6495 Banks and Financial Institutions in

178 countries, 24 hours a day. SWIFT global network carries an average 4 million message

daily and estimated average value of payment messages is USD 2 trillion.

SWIFT is highly secured messaging network enables Banks to send and receive fund transfer,

L/C related and other free format messages to and from any bank active in he network.

Having SWIFT facility, Bank will be able to serve its customers more profitable by providing

L/C, payment and other messages.

Chapter- 7

MARKETING STRATEGY AND

MANAGEMENT OF A NEW PRODUCT

6.0 MARKETING STRATEGY

The bank has concentration for developing new products and services according to its

customer demand. I have found some new product ideas from respondents. And from those I

have tried to develop a marketing strategy for a product “Mobile Banking”, which is not so

much familiar in our country. So if it is possible to lunch by NCC bank limited then they can

take competitive advantages.

First of all the market will be segmented according to demographic market

segmentation. Because the consumer needs, wants, and usage rate often very closely with

demographic variables. To select target market segment undifferentiated marketing strategy

will be used. And it will be positioned by providing more consumer value than competitors at

reasonable price.

6.1 MARKET ANALYSIS

Bangladesh is amongst the poorest countries in the world, with 50% of people living

in poverty and a gross national income (GNI) per capita of $470. Despite of the difficult

business environment, the mobile communications sector is growing rapidly and is cited as

the fastest growing industry in Bangladesh. The mobile communications sector began in

Bangladesh with the licensing of a single company, Pacific Bangladesh Telecom Ltd (PTBL)

in 1991. In 1996, three national GSM (Global System for mobile communication) licenses

were granted and this opened upon the mobile communications sector to a wider subscriber

base. Currently, six mobile network operators are currently licensed to operate in Bangladesh.

Geographic coverage increased from 48% in December 2004 to over 85% in December 2007

including rural and Chittagong Hill Tract areas.

In Bangladesh the numbers of GSM mobile subscribers 44.64 million at the end of

January, 2009 while number was 36.42 million at the end of January 2008. So, mobile

devices become prominent to every level of people of Bangladesh. And gradually people

accept mobile not only their communication device but also an information transfer media

which is highly necessary for their livelihood. The fall in prices of handsets, SIM and calling

services, primarily due to reductions in handset import duties and the SIM activation tax

alongside the impact of competition, has increased the affordability of mobile telephony and

lead to the observed increase in penetration rates. Among different services of mobile phones

short Messaging Service (SMS) has become the most popular and cheapest service. It permits

us sending message of alphanumeric characters between mobile phones.

Considering these issues, SMS technique can be integrated in Bangladesh banking

sector. It is the nature of human being to get services within short time. In our country,

several private banks such as Dhaka Bank Ltd, Dutch –Bangla Bank Ltd, Eastern Bnak Ltd,

Brac Bank Ltd and STB have introduced the facilities of online banking, phone banking and

at last SMS banking with too limited services. But national banks such as Sonali Bank, Janata

Bank, Agrani Banks and other specialized financial institutions like Krishi Bank do not

provide such facilities. A huge amount of our country people are the clients of these banks.

So there is a great opportunity for NCC bank to penetrate their market by offering m-banking

facilities and increase revenue.

6.2 STRATEGIC INTENT

Mobile Banking will fulfill four major objectives, which are closely related to each

other.

i. Increasing Sales Volume

ii. Increasing Revenue

iii. Reducing Costs of Distribution

iv. Increasing Customer Satisfaction

i. Increasing Sales Volume

Mobile Banking can contribute to achieve this goal by following means:

a) Anytime, anywhere access to banking services;

b) Availability of push services to suggest transactions on an urgent basis, e.g. to sell

certain stocks when a crisis erupts;

ii. Increasing Revenue

Mobile Banking can also serve as a source of revenue. Mobile services can be offered

on a premium basis. The price, in this case, should be reasonable enough so that

customers are willing to pay them but at the same time they should be – from a financial

point of view – higher than the costs incurred by the bank. Additional revenues can be

generated in two ways:

a) Offering innovative, premium services to existing customers;

b) Attracting new customers by offering innovative services. Where by new customers

contribute to revenue generation not only by utilizing mobile services but also by

using other conventional distribution channels.

iii. Reducing Costs of Distribution

Due to increased competition a distribution channel must organize business processes

efficiently so as to reduce distribution costs. Mobile Banking can contribute to achieve this

goal by following means:

a) The Bank doesn’t need to open more branches, because customers will get

services through mobile.

b) As against Internet Banking, Mobile Banking makes it possible to offer

ubiquitous, semi personal consulting services in real time.

c) Increasing Customer Satisfaction

Mobile Banking may help increase the customer satisfaction by following means:

Innovative “anywhere, anytime” services customized for individual preferences and current

geographic location of the customer provide value-added to the customer; Customers don’t

need to wait for services in a queue.

6.3 TARGET MARKET STRATEGY

At first the market will be segmented according to demographic market segmentation.

Because the target market of the product will be middle class & lower middle class people.

Core target groups of Mobile Banking are often divided in three categories:

i. The Youngsters: The segment of 15-20 years old youth has acquired an important

role in the growth of mobile telecommunications and related services. This group is

willing to experiment with innovative products and services. The younger, often on

the move, demand ubiquitous, anytime service.

Though the younger as a group is hardly relevant for banks from a financial

perspective, they represent the prospective clientele of working tomorrow and need to

be cultivated in the middle to long-term marketing strategy of the banks.

ii. The Young Adults: Also this segment is thought to be technology- and innovation

friendly. Though this group too is financially not very strong, many members of this

group are known to be involved in stock market activities. Further, this group can be

expected to enter in short to medium-run a professional carrier so that it needs to be

cultivated in order to retain customers of this age-group even after they enter

professional lives.

iii. The Business People: This group of customers, generally in the age-group of 26-50

years, is thought to be the most important one for Mobile Banking. Members of this

group are generally well educated and economically well-off. They need to be

professionally often on the move and carry mobile devices to ensure accessibility. For

this reason they are ideal candidates to use services offered via mobile devices. From

the banks’ perspective this group is particularly attractive on account of its relative

economic prosperity and the need for financial services, e.g. home loans for young

families.

In order to fulfill the requirements of these customer groups banks tend to look at

Mobile Banking as a promising option. However, these services also have their own utility

for the banks.

6.3.1 TARGET AREA

At first Dhaka city will be main targeted area. (After that it will be extended in other

cities, (Dhaka, Chittagong, Shylet, Rajshahi, Khulna, and Barisal).

6.4 POSITION IN MARKET

Based on current market situation we can start competing from 8th position in the market

basis on efficient service.

6.4.1 PROPOSED POSITION

Provide Fast and efficient service

Ensure security and more committed

HOW TO TAKE THIS CHALLENGE:

The bank had to take some strategies according to marketing mix strategies (7p) to

achieve goal that are, Product policy, Pricing policy, Promotion policy, Distribution policy,

Physical evidence, People and Process. Those are shown in below:

6.5 PRODUCT STRATEGY

Now a day’s customers are really want much more than just products, like

environment of bank and behavior of the bank officers. So the product has to be designed by

considering these factors. The name of the product is “Mobile Banking”. “Mobile Banking

refers to provision and availment of bank-related financial services with the help of mobile

telecommunication devices.

The scope of offered services may include facilities to conduct bank and stock market

transactions, to administer accounts and to access customized information.”

Mobile Banking, as defined above, includes a wide range of services. These services

may be categorized as following:

a) Mobile Accounting

Mobile Accounting is sometimes characterized as transaction-based banking services

that revolve around a bank account and are availed using mobile devices. Not all Mobile

Accounting services are however necessarily transaction-based. A more precise definition of

Mobile Accounting would therefore characterize it as “availment of account-specific banking

services of non-informational nature”. Mobile Accounting services may be divided in two

categories to differentiate between services that are essential to operate an account and

services that are essential to administer an account.

Services in Mobile Accounting

Account Operation Account Administration

Money remittances & transfers Access administration

Standing orders for bill payments Changing operative accounts

Money transfer to sub-accounts Blocking lost cards

Subscribing insurance policies Cheque book requests

b) Mobile Brokerage

Brokerage, in the context of banking- and financial services, refers to intermediary

services related to the bourse, e.g. selling and purchasing of stocks.

Mobile Brokerage can be thus defined as transaction based mobile financial services

of non-informational nature that revolve around a securities account Mobile Brokerage

divided in two categories to differentiate between services that are essential to operate a

securities account and services that are essential to administer that account.

Services in Mobile Brokerage

Account Operation Account Administration

Selling & purchasing financial

instruments (e.g. securities)

Access administration

Order book administration

c) Mobile Financial Information

Mobile Financial Information refers to non-transaction based banking- and financial

services of informational nature. Mobile Financial Information services include subsets from

both banking and financial services and are meant to provide the customer with anytime,

anywhere access to information.

The information may either concern the bank and securities accounts of the customer

or it may be regarding market developments with relevance for that individual customer.

The information may be customized on the basis of preferences given by the customer

and sent with a frequency decided by him. The information should be provided, ideally, on

both, pull and push basis.

Information services are an integral part of Mobile Accounting and Mobile Brokerage

but they may also be offered as a stand-alone, independent module, i.e. Mobile Financial

Information can be offered without offering Mobile Accounting or Mobile Brokerage but

vice versa is not feasible.

Services in Mobile Financial Information

Account Information Market Information

Balance inquiries / Latest transactions Foreign exchange rates

Statement requests Market and bank-specific interest rates

Threshold alerts Commodity prices

Returned cheque / cheque status Stock market quotes and reports

Credit card information Product information & offers

Branches and ATM locations -

Helpline and emergency contact -

Information on the completion status -

“Today’s customers want to organize banking transactions while on the move,

irrespective of opening hours”. Banks are responding to this development by introducing

mobile services. For the first time NCC bank Ltd will offer SMS based Mobile banking and

service in mobile financial information.

6.5.1 STEPS OF MOBILE BANKING

Mindful of their previous experience, many banks are cautious in their approach to

this new generation of consumer banking products. There are many technological and

behavioral obstacles to overcome—some analysts predict that it could take 10 years for

mainstream adoption. But in order to participate in this market, banks need to get started now,

or risk losing customers.

Drawn from its collective experience in this space, there are five steps to mobile

banking, as well as key underlying concepts for each stage.

i. Short- message service (SMS) banking

Typically, the first step banks take when creating a mobility service is to enable some

form of SMS alerts. SMS is easy to use and deploy, and it’s available on virtually every

handset. After registering a cell phone by sending a short code to the bank’s SMS address,

consumers can use the system to get alerts—for example, if their balance falls below a certain

level, or a check above a certain amount is processed. Some banks offer a two-way service,

enabling consumers to make balance inquiries.

But SMS does have limitations. Messages are limited to 160 characters in total length,

and confidentiality can be a concern because all information is sent as clear text.

ii. Simple banking

Functionality beyond SMS can be enabled using a more robust application

environment, which allows more complex activities, such as request transaction histories and

transfer funds between different accounts at the bank. In general, there are two ways of doing

this:

Use the wireless application protocol (WAP): WAP is similar to HTML, and is

designed for a mobile phone. Consumers use the browser in their phone to access

a specialized Web site, entering and receiving any information while connected.

Use Java technology MIDlets, which are a simple application runtime technology

that offers an enhanced user experience by taking advantage of the unique

characteristics of a particular handset—for example, a large screen or more

function keys.

iii. Complex banking

With more robust security and transaction capabilities in place, the next step is the

ability to pay one-time bills (positive payment). A customer is alerted that a one-time bill is

due, payment is enabled, and the payment is confirmed. At this stage, other bank services and

financial information, such as credit card management, foreign currency exchange rates,

interest rates, can also be made available.

iv. Person-to-person payments

Transferring funds from one user to another via mobile phones is the next step. This is

an appealing capability, because there is a large, existing market of people who are paying

fees to make person-to-person payments (or remittances). The infrastructure requirements are

much more demanding, as trust, security, and interoperability must reach from one cell phone

across one or more bank systems, to another cell phone. This stage demands robust security,

as it is very difficult to reverse a transaction in case of fraud.

v. Mobile commerce

The mobile banking end game is more than checking balances and paying bills. The

goal for mobile banking initiatives is to replace credit and debit card products with cell

phones—mobile commerce. Multiple credit cards, debit cards, and any other current form of

transactions, along with membership cards, library cards, and loyalty cards can be conducted

with a specially-enabled cell phone or PDA. Mobile commerce is expected to allow banks to

generate greater electronic payment volume through the combination of electronic loyalty

programs, mobile marketing, and contactless payments.

Mechanisms to instill and maintain trust are needed at this stage. Consumers are

understandably concerned about the safety of their bank accounts, and banks need to trust all

partners, and protect data as it moves across the network to multiple partners and service

providers.

Bank and cell phone providers are in very early trial stages with near field communication

(NFC) payment chips, similar to PayPass, embedded into cell phones. Customers can

enable transactions at new POS terminals by placing the phone near the terminal.

Additional transaction approval can be authorized by entering a PIN on the handset. Pilot

tests show that consumers enjoy a greater sense of security with this technology.

Companies act as a “Trusted Service Manager” is working to provide a firewall between

the multiple back-end entities, enabling banks, and carriers to control customer data.

INITIAL SERVICES WILL BE OFFERED BY NCCBL

NCCBL will start there m-banking with SMS banking, which is the easiest and secure. There

are several types of operations that can perform by SMS Banking. Some example of SMS

format shown in below:

SMS Account Details – SAD

Message Format Example

SAD <MIN> <Short Acc. No.> SAD 6699 203.280.6996

SMS Account Balance - SAB

Message Format Example

SAB<MIN> < Short Acc. No.> SAB 6699 203.280.6996

SMS Statement Request – SST

Message Format Example

SST <MIN> <Short Acc. No.> <Start Date>

<End Date>

SST 6699 203.280.6996 2006-01-28 2006-02-

28

Note: Start Date and End Date are in YYYYMMDD format, i.e. 28th February, 2006 would

be 20060228

SMS Cheque Book Request – SCB

Message Format Example

SCB <MIN> <Short Acc. No.> SCB 6699 203.280.6996

SMS Stop Cheque Request – SSC

Message Format Example

SSC <MIN> <Short Acc. No.> <Start Chq. SSC 6699 203.280.6996 1727979 1727931

No.> <End Chq. No.>

Note: If only a single cheque is to stop, then you can skip the <End Chq. No.> portion

SMS Cheque Status Inquiry – SCS

Message Format Example

SCS <MIN> <Short Acc. No.> <Chq. No.> SCS 6699 203.280.6996 1727979

SMS Bill Pay – SPB

Message Format Example

SPB <MIN> <Short Acc. No.> <Payee ID>

<Payment Mode> <Bill Amt.> <Memo>

SPB 6699 203.280.6996 GP BIL 1200

0171500646

Chapter- 8

Financial Policy

7.1) Trade Finance & Correspondent Bank

Successful companies today are fully aware that they need to be able to rely on the services

of a bank that can handle international trade with a good hand. Ever since its conversion into a

full-fledge bank in 1993,

NCC Bank has been an accomplished Trade Finance´ bank. With a highly professional team

experienced and competent professionals we are able to provide a wide range of services to

companies engaged in international trade. NCCBL has also positioned itself as an established

correspondent Bank. Through a worldwide network of 260 correspondent Banks, NCCBL is present

in all key areas of the globe. Our ambit of correspondents includes top ranking international

banks with a global reach.

7.2) Authorized capital

The authorized Capital of the bank remained unchanged at TK. 5000 Million in the last four years

(2006-2009)

7.2.1) Paid up capital  

The bank raised its paid up capital from Tk. 1757.62 million to Tk. 2284.90 million during the year, through

issuance of 47% bonus share.

7.2.1) Reserve Fund 

The reserve fund increased toTk. 3749.64 million in 2009 from Tk. 2863.62 million in 2008 registering

a growth of 30.94%.

 

7.3) Capital Market Operation 

The Bank continued to par ticipateint he day to day transactions of Dhaka Stock Exchange as

a memionber of DSE and expect to earn substantial income through capital market operation

in future. The Bank has already established a separate Brokerage House with a view to

facilitating the investors to operate the cap it al market in a hassle free atmosphere. The Bank

al so bought membership of Chittagong stock exchange. 

7.3.1) Operation result

The operational Profit of the bank during 2009 was Tk. 3137.70 million as against Tk.

2363.49 million in 2008 recording an appreciable growth of 32.75 percent which was

possible due to prudent lending and efficient management of funds. The net profit thus stood

at Tk. 1719.50 million.

 

7.3.2) Network of branches

The bank has planned to expand its business network to reach large section of  the potential

Clients living in remote areas. The Total number f branches were 74th as on22th November,

2010.

7.4) Trade & commerce 

This broad category encompasses large business houses dealing with imported consumer

items, medium and small import business houses trading in similar item and finally, shop

keepers, distributors, whole sellers, retailers and small manufacturers scattered across the

country. While allowing facilities under the segment of trade & commerce, bank shall ensure

that mere increase in the volume of business portfolio and relevant income generated from it

is not the prime consideration as it involves payment in costly foreign exchange in case of

foreign trade.

Therefore, trading in non-essential items shall be discouraged for the greater interest of the

country.

7.5) The domain of industry financing of NCC Bank Ltd

The domain of industry financing of  NCC Bank Ltd. basically comprises of:Capital financing in

the form of term loan Working  capital financing; & Financing of small cottage industries.

Financing for establishment of new industries or reinvestment to existing industries is a

specialized function of the bank.

NCCBL policy would be a selective approach to term loan financing to small scale industries

and export oriented or import substitute industries which enjoy high degree of national

economic priority. In case of financing in this sector bank would prefer syndication with

other banks to keep a balanced portfolio.

The core of NCCBL lending activities shall be the working capital financing to large and

medium scale industries as well as small scale industries. Track record of operational

performance of the industries, credit worthiness of the entrepreneur, and reasonable security

coverage shall form the basis of lending policies. Working capital financing to newly set up

industries will also be considered on careful examination of validity, cash flow prospects, and

entrepreneurial competence.

7.6) Lease financing

NCC Bank Ltd. to keep its contribution to the growth of national GDP, accelerate the total

economic development by infusing the fund in productive sector in more efficient and

effective way, diversity its portfolio and satisfy the customers need would go for leases finance

for:

I. Setting up of small and cottage industries/projects.

II. Financing of existing projects.

III. Transports (both road & marine).

7.7) Consumer financing

In order to help the fixed income group in fulfilling their demand to upgrade the standard of living

NCCBL has launched some consumer credit scheme such as:

I. Personal Loan Scheme

II. Festival Personal Loan Scheme

III. Education Loan Scheme

IV. Household appliance

V. Furniture & fixture

VI. Air conditioner 

VII. Fax machine & cellular phone

VIII. Motor cycle/car

IX. Other equipments

7.8) Small & medium enterprises financing

According to ACSPD circular no.8 dated 26/05/08 of Bangladesh Bank Small &Medium

Enterprise are defined taking into account that the basic criteria for both type of business concern

will not be public limited company.

 A large section of our business community consists of small and medium business owners who are

conducting there business with own resources without availing much support from financial

institutions.  Banks major concentration shall be under this sector under the following

categories:

I. Small Business Loan

II. Festival Small Business Loan

III. Earnest Money Financing Scheme

IV. Financing of Service Concern

V. Financing of Trading Concern

VI. Financing of Manufacturing Concern

7.9) Financial Performance of NCC Bank

Year

Earning

per share

Net Asset Value Per Share  

Net Profit After Tax (mn) 

Price Earning

Ratio  

% Dividend

% Dividend Yield  

2010            2009 75.26  26.400  1719.50  15.26  47   2008 50.20  230.73  882.28  9.47  30   2007 50.09  218.83  677.17  8.81  30  - 2006 39.88  177.64  479.22  7.25  10.0012.5  3.46 2005 36.11  168.77  352.08  6.45  1010  4.30 2004 46.92  202.30  285.16  6.67  30  - 2003 79.12  155.39  79.12  14.40  10.0010  4.85 2002 44.47  170.48  213.68  4.27  15  - 2001 48.34  122.61  232.28  4.23  18.0012  8.81 2000 34.30  122.63  96.94  6.36  10.0010  11.45 

7.10) SWOT Analysis for the Branch

SWOT analysis was done to identify the factors affecting profitability of our branch business.

Strength.

 

I. Congenial working environment of the branch.

II. Quality manpower who wants to serve customer well.

III. Branch situated in a prime location of the city.

IV. Online facility

Weakness

 

I. Imbalanced rank and profile of staffs in the branch; Manager is a Sr.Vice

President and Deputy Manager is only Senior Officer.

II. In adequate training facility to improve managerial skills

III. No any branch clearing facility

IV. Inadequate manpower in cash, general banking, and advancesdepartment.

V. At least an ATM booth is required adjacent to branch.

Opportunity

 

II. Trade finance business.

III. Increase small savings

IV. Lease finance to professionals-doctor, finance to small and cottage industry.

Threat

I. Latest technology adoption- ATM, Alert Banking, Phone Banking- by

competitors.

II. Small segment of large-scale business concern in the city.

III. Risky SME financing due to borrowers easy access to NGO loan, whichmay lead

to over finance and reduce borrowers’ credit worthiness.

IV. CIB report is not available to trace out NGO loan made to borrower.

V. Customer preference to deposit to FDR which increase cost of fund.

VI. Intense competition among competing banks to grab business, which maylead to

unsecured financing.

7.11) Share of NCC Bank

November 15, 2010 NCCBANKFollowing the change of the denomination of shares and market lot with effect from 15.11.10

(record date), the new face value of the shares of the Bank will be Tk. 10.00 instead of Tk.

100.00 per share, market lot will be 250 shares instead of 50 shares and the new adjusted

open price of shares will be Tk. 70.80 per share.

a. Share Percentage of NCC Bank

Electronic Share?

Listing Year

Share Percentage Directorr /Sponsor

Govt.

Institute

Foreign

Public

Yes 2000 46.39 0 21.22 0.3 32.09

7.12) Profit and Loss Account of NCCBL in 2010

7.13) Statement of change in Equity of NCCBL in 2010

7.16) Financial Ratio Analysis of the NCC Bank Ltd.

Financial ratio analysis is the calculation and comparison of ratios which are derived

from the information in a bank's financial statements. The level and historical trends of these

ratios can be used to make inferences about a bank's financial condition, its operations and

attractiveness as an investment.

For this assignment I select NCC Bank to calculate and compare between 2008 and 2009

7.17) Conclusion

Modem Commercial Banking is exacting business. The reward are modest, the penalties for

bad looking are enormous. And Commercial banks are great monetary institutions, important

to the general welfare of the economy more than any other financial institution. It has a vastly

sobering and exacting responsibility.

National Credit and Commerce Bank Limited (NCCBL) playing a vital role in financing

import and exports of the country. Without Bank’s co-operation, it is not possible to run any

business or production activity in this age. Exports and import need finance in various stages

of their activities. Export and import financing are letter of credit (L/C), payment against

documents (PAD), loan against imported merchandise (LIM) etc. All these facilities are

provided by NCCBL. For this purpose Bank’s consider the borrower’s business standing,

integrity, liability with the bank term and conditions of the L/C. There is lot of risks involved

in foreign business. So, the National Credit ant commerce Bank Limited (NCCBL) has to

clearly justify the customers from a neutral point and gather the current information about the

market.

I have worked only in the Elephant Road branch. So I am not able to know about head office

activities regarding credit and others. Branch officers have to work within limited boundaries

and time to time they have to take permission from the head office. Taking permission from

the head office is time consuming.

From my observation I have found that peoples are interested about that job which gives

them more salary and other facilities. NCC bank should give its employees more salaries, job

security and others facilities to hold its existing expert and trained officers.

7.18) Recommendation

As the study was done in the specific area, so recommendations have been covered in respect

of those areas. NCC Bank authority among which most of them has been mentioned as

suggestion to improve service quality. For the improvement of the service the following

measures should be taken:

Customer’s Convenience: For customer’s convenience, NCC Bank should provide more

personnel to deliver faster services to their honorable customer.

Human Development: Development of human resources should be ensured to increase

efficiency in work.

Communication System: Ensure proper communication system and maintenance of file &

machineries like phone, computer, fax, and photocopier.

Interest: More interest should be paid on deposit account so that customers are convinced to

deposit their money in bank.

Margin Rate: To decrease margin rate for all clients. This is very risk for the Bank but if the

Bank wants to target many clients, this is very important

Computerization: To ensure error free fast task bank should be fully computerized.

R & D: Research & Development wing must be more extensive & rich.

Strategy: Effective strategies must be undertaken against defaulter.

Project Management: Project Management must be practiced in case of investing in the

project. Feasibility of the project, project planning ,monitoring & evaluation should be

undertaken.

Managerial Function: NCC Bank must have to follow the management functions (from

planning & controlling) strictly in all of their business activities.

Financial Policy: Branch should have a separate section to analyze the financial statement

for fining its profitability & ownership ratios.

G L O S S A R Y

NCCBL (National Credit & Commerce Bank Limited)A/C (Account)BOE (Bill of Exchange)SB (Savings Account)CD (Current Account)DD (Demand Draft)DP Note (Demand Processing Note)FC (Foreign Currency)FDD (Foreign Demand Draft)IBC (Inward Bills for Collection)IBCA (Inter Branch Credit Advice)IBDA (Inter Branch Debit Advice)

L/C (Letter of Credit)OBC (Outward Bills for Collection)PO (Payment Order)TC (Travelers Cheaqe)TIN (Tax Identification Number)TT (Telegraphic Transfer)STD (Short Term Deposit)FDR (Fixed Deposit Receipt)CC (Cash Credit)C & F (Clearing & Forwarding)IBCT (Inter Branch Credit Transfer)SOD (Secured Overdraft)SSS (Special Saving Scheme)SSD (Staff Saving Deposit)OBT (Online Balance Transfer)M-Banking (Mobile Banking)GSM (Global System for Mobile Communication) GPRS (General Packet Radio Service)PDU (Protocol Data Unit)SMSC (Short Message Service Center)XML (Extensible Markup Language) AT (Attention Commands)GSM (Global System for Mobile Communication)GPRS (General Packet Radio ServiceASCII (American Standard Code for Information Interchange)DPS (Deposit Protection Service) GNI (Gross National Income)PTBL (Pacific Bangladesh Telecom Ltd)WAP (Wireless Application Protocol)MIN (Mobile Identification Number)PIN (Personal Identification Number)

BIBLIOGRAPHY

o www.nccbank-bd.com o www.bangladeshbank.org o http://www.iajet.org/webfile/current_1.3_2010/Push%20Pull%20Services

%20Offering%20SMS%20Based.pdfo http://www.mblbd.com/html/sms.php