General Banking on FSIB.doc

8/13/2019 General Banking on FSIB.doc

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General Banking on FSIB

Bank is nothing but an intermediary between lender (surplus unit) and borrowers (deficit

unit). Savings and deposits are the main strength of the banks to provide loan. And the

interest earned from the difference borrowing and lending is the major portion of banks

income. Banks also earns from variety of operation.

General banking is the side where banks offer different alternatives to the clients to deposit

and remit their money. Accounts division is also included in general banking. o encourage

the clients! bank offers different options in front of their clients. "ost of these options are

very much similar between the banks! but the customer services and facilities may not be

the same. #irst Security $slami Bank %imited has variety of services provided to the retail as

well as for corporate clients.

he services provided under general banking include the following&

' Account opening

' Account closing

' heue book issue

' *emittance

' learing

' rossing

' +ndorsements

' ,ispatch

Account opening&

$nitially all the accounts are opened through deposit money by the customer and these

accounts are called deposit account. -ormally a person needs to open an account to take

services from the bank. ithout opening an account! one can not enjoy variety of services

from the bank. hus! the banking usually begins through the opening of the account withthe bank.

Bank accounts are mainly of three (/) types&

0. Al1adiah urrent ,eposit Account(,)

2. "udaraba Savings ,eposit Account(SB)

/. "udaraba erm ,eposit *eceipt3Account(",*)

here are also some other types of account facilities provided by the bank. hese are&


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i. Short erm ,eposit (S,)

ii. "udaraba "onthly ,eposit Scheme ("",S)

iii. "udaraba "onthly 4rofit Scheme ("B4S)

iv. "udaraba ,eposit ,ouble Scheme (",,S)

v. Advance Saving Scheme

0. Al1adiah urrent ,eposit Account (,)&

A current account is a running and active account! which may be operated upon any number

of times during a working day. $t is purely demand deposit account because the bank is

bound to pay the amount to the accountholder on demand at any time within the banking

hour. here is no restriction on the number and the amount of withdrawals from a current

account. Generally the minimum amount to be deposited initially is k. 055531 for openinga current account.

2. "udaraba Savings ,eposit Account (SB)&

A saving account is meant for the people of the lower and middle classes who wish to save

a part of their incomes to meet their future need and intend to earn an income from their

savings! it encourages savings of non1trading persons! institutions! society and clubs etc.

he deposits are mostly small amounts. #reuently withdrawals are not allowed.

' 6pening of urrent and saving Account&

A current or a saving account could be opened through the following steps&

Step& 0

Application on the prescribed form& he person willing to open a current account with the

bank has to apply in the prescribed form. he form must be filled up and signed accordingly

by the applicant (s).

Step& 2

,ocumentation& he documents that must be provided by the party3parties willing to open a

current account are mentioned according to different aspects&

i) $ndividual

' wo copies of passport si7e photograph

' $ntroducer8s signature in the A3 opening ard 9 photograph

' -ationality ertificate3passport8s photocopy (duly attested)

' -ominee8s 4hotograph


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' "other8s name

' ,ate of Birth 9 age

' $-

ii) 4roprietorship




' :p1to1date copy of trade license


' "other8s name

' ,ate of Birth 9 age

' Seal

' $-

iii) 4artnership

' 4assport si7e photograph A3 6perator authori7ed by partners) wo copies (each)




' Seal

' $-

' 4artnership deed (from -otary public)! partnership letter

iv) %imited ompany

' 4assport si7e photograph A3 6perator (authori7ed by Board) wo copies (each)


' ompany resolution3onstitution


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' ommon seal of ompany

' "emorandum 9 Articles of association (ertified by ;oint Stock ompany)

' %ist of ,irectors with sign

' ertificate of $ncorporation


' Seal

' $-

v) Societies! lubs! etc

' 4assport si7e photograph A3 6perator (authori7ed by Board) wo copies (each)



' :p1to1date copy of 6ffice Bearers3 Governing Body3 "anaging ommittee

' "emorandum 9 Articles of association

' Seal

$ncase of saving account opening the following documents are reuired&





' +mployer certificate

Step& /

$ntroduction to the Applicant&

he applicant reuired to furnish in the application form the names of the referees from

whom the banker may make reuires regarding the character! integrity and respectability of

the applicants. $n most cases! the customer of the bank does the introduction or some other

person known to the bank by signing on the application form with the account number.

Step&


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Specimen signature&

+very customer is reuired to supply to his banker with one or more specimens of his3her

signature. hese signatures are taken on cards! which are preserved by the banker! and his

signature of the account holder on the cheue is compared with Specimen signatures.

#inal Step&

After the above formalities are over! the banker opens an account in the name of applicant.

hen the bank provides the customer with&

' A pay in slip3deposit book& o facilitate the receipt of credit items paid in by a customer!

the bank will provide the customer a pay in slip either loose or in a book forms. he

customer has to fill up the pay in slip at the time of depositing the money with the bank. he

casher with his3her initials and stamps will return the counter foil to the customer on the

receipt of the money.

' heue Book& o facilitate withdrawals and payments to third parties by the customer! the

bank will also provide a cheue book to the customer. But it is noted that to get a cheue

book! the customer has to dully fill up the cheue reuisition slip to the banker.

' losing of urrent or Saving Account&

A customer8s account with a bank may be closed for the following circumstances&

0. :pon the reuest of a customer! an account can be closed.

' he customer may inform the bank in written of his3her intention to close the account.

he customer has to apply to the branch in charge for closing the account. hen the in

charge will remark on the account closing application for closing the account.

' By drawing a cheue of the whole amount and a nil balance confirmation to be taken from

the account holder.

' *ecover the unused cheue leaves and enter into the =Broken cheue book *egister>

' *emove the account opening form! specimen signature card and all other papers relating

to the closed account.

' *emarks of account closing at the ledger folio should be authenticated by the manager of

supervising officials.

2. he bank may itself ask the customer to close the account when the banker finds that the

account is not been operated for a long lime.

' $f the account is not operated upon for ? months the banker will try to do the bilateral

communication with the account holder! but if the banker does not then the account

becomes =,ormant> account get any response from the account holder

' $f this not the operated upon for 2 years then the account becomes =inoperative> account.


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' $f the current account lying in =inoperative> current account for many years then the

account will be transferred to the =unclaimed deposit account.

' A new register for unclaimed deposit account will be maintained called =unclaimed

deposit account.

' #or withdrawal at any amount from the account! permission from head office or

controlling office wins is reuired.

/. "udarabah erm ,eposit *eceipt3Account (",*)&

hese are the deposits! which are made with the bank for fi@ed period specified in advance.

$t is purely a time deposit account. he bank doesn8t maintain cash reserves against deposits

and therefore the bank offers higher rates of interest on such deposits. A #,* is issued to

the depositor acknowledging receipt of the sum of money mentioned therein.

4rocedure of 6pening #i@ed ,eposit Account&

Before opening a #i@ed ,eposit Account a customer has to fill up an application form!

which contains the following&

' Amount in figures

' Beneficiary8s name and address

' 4eriod

' *ate of interest

' ,ate of issue

' ,ate o of maturity

' ow the account will be operated (singly or jointly)

' Signature (s)

' #. ,. *. no

' Special instruction (if any)

After fulfilling the above information and deposit the amount! #,* account is opened. A

#,* receipt is issued and it is recorded in the #,* *egister! which contains the following

information&

' #,* account no.

' #,* no.

' -ame of the #,* holder with address


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' "aturity period

' "aturity date

' $nterest rate

At present the rate of interest for #i@ed ,eposit *eceipt (#,*) in the #irst Security Bank

%imited are as follows&

1111111111111111111111111111111111111111111111111

#or 0 month $nterest rate for is 02.!

1111111111111111111111111111111111111111111111111

#or / month $nterest rate for is 02.C5

1111111111111111111111111111111111111111111111111

#or ? month $nterest rate for is 0/.!

6ther ypes of ,eposit Accounts&

here are also some other types of account facilities provided by the bank. hese are&


ii. "onthly Saving Schemes ("SS)

iii. "udaraba ,eposit ,ouble Scheme (",,S)


$t is also a time deposit account. he formalities for opening is of this account are to those

reuired for current account. he only difference is that! freuent withdrawal is discouraged

and D days notice is reuired for withdrawal of any sum and interest is paid.

$n Short erm ,eposit Account! interest offered is less than of savings deposit! ? interestis paid on this deposit.

ii. "onthly Saving Schemes ("SS)

"onthly Saving Scheme is that kind of scheme of #SB%! where deposit is monthly

installments of various si7es for a fi@ed deposit and the benefit is lump sum returns after

various terms of period.

otal Savings amount according to monthly ,eposit amount and period! details are as

under&


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4eriod E "onthly Amount E "onthly Amount E "onthly Amount E "onthly Amount E

"onthly Amount E "onthly Amount E "onthly Amount E "onthly Amount E

E 055 k E 2C5 k E C55 k E 0!555 k E 0!C55 k E 2!555 k E 2!C55 k E C!555 k E

5C yrs E F!5C5 E 25!D55 E 5F yrs E 0C!?55 E

he objectives of this scheme are&

' Building the habit of saving

' Attract small savers

' Saving for rainy days

' +nsure regular income flow

So this scheme is introduced to attract depositors and encourage saving (mainly the smaller

earner people).

iii. "onthly Benefit Saving Scheme ("BSS)

"onthly Benefit Scheme is that kind of scheme! where a fi@ed amount of money has to bedeposited every month for five years.

"onthly benefit amount on the deposited amount are as under&

,eposited Amount E "onthly Benefit Amount E

k. ?D!55531 E k. C5531 E

k. 0!/

k. 2!?F!55531 E k. 2!55531 E

k. ?!D5!55531 E k. C!55531 E

k. 0/!


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iv. ,ouble Benefit ,eposit Scheme (,B,S)

$n this scheme! a fi@ed amount of money! say k. C5!555 or it8s multiply for ? years has to

be deposited. After ? years deposited amount will be doubled.

,eposit amount to be doubled in ? years! details are as under&

4eriod E ,eposited Amount E $nterest with deposit E 4ayable amount with interest at maturity

E

?.C years E B,. 05!55531 E ,ouble E B,. 25!55531 E

?.C years E B,. 2C!55531 E ,ouble E B,. C5!55531 E

?.C years E B,. C5!55531 E ,ouble E B,. 0!55!55531 E

?.C years E B,. 0!55!55531 E ,ouble E B,. 2!55!55531 E

?.C years E B,. 2!55!55531 E ,ouble E B,.

?.C years E B,. C!55!55531 E ,ouble E B,. 05!55!55531 E

he objectives of this scheme are&

' Give ma@imum profit

' elp in meeting specific needs like education! marriage etc.

' *emittance&

Sending money from one place to other places for the customer8s is another important

service of banks and this service is an important part of countries payment system. #or this

service! people specially businesspersons transfer funds from one place to another very

uickly. here are various types of remitting money! such as&

a. 4ay 6rder (46)

he pay order is used for making a remittance to the local creditor. 4ay order gives thepayee the fight to claim payment from the issuing bank it can be en1cashed from issuing

bank only. :nlike cheue! there is no possibility of dishonoring pay order because before

issuing pay order bank takes out the money of the pay order in advance. 4ay 6rder cannot

be endorsed or crossed and so it is not negotiable instrument.

H

b. ,emand ,raft (,,)&

,emand draft is an order of issuing bank on another branch of the same bank to pay

specified sum of money to the payee on demand that is the named person or order of thedemand. $t is generally issued when customer wants to remit money in any place! which is


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out side of the clearing1house area of issuing branch. 4ayee can be purchaser himself or

another mentioned in the ,6. $t is a negotiable instrument and it can be crossed or not.

c. elegraphic or elephonic ransfer ()&

his method transfers money to one place to another place by telegraphic message. hesender branch will reuest another branch to pay reuired money to the reuired payee on

demand. Generally! for such kind of transfer payee should have account with the paying

bank. 6therwise it is very difficult for the paying bank to recogni7e the e@act payee.

hen sending money is urgent then the bank uses telephone for remittance. his service is

only provided for valued customers! who is very reliable and with which banks have long1

standing relationship.

d. "ail ransfer Advice ("A)&

here the remitter desires the banker to remit the funds to the payee instead of purchasing adraft himself the banker does it through a mail transfer advice. he payee must have an

account with the paying officer as the amount remitted in such a manner is meant for credit

to the payee8s account and not for cash payment. $t is the least used techniue for

transferring fund. here there is no tele@ machine or telephone line then this method is

used.

' learing&

learing house is an assembly of the locally operating scheduled banks for e@change of

cheue! drafts! pay orders and other demand instruments drawn on each other and receivedfrom their respective customers for collection. he house meets at the appointed hour on all

working days under the supervision of two central bank officers or its agent as the case may

be! and works within the regulations framed therefore on the basis of prevailing banking

practices. $n Bangladesh! clearing house sites at Bangladesh bank where there is no office of

the Bangladesh bank! Sonali bank acts as agent of Bangladesh bank.

here are mainly two types of clearing system in Bangladesh! such as&

' $nternal clearing or inter branch clearing or inward clearing.

' +@ternal clearing or inter banks clearing or outward clearing.

he entire number banks representative daily conducts two meetings at a fi@ed time. $n their

first meeting they handover cheue! drafts etc. passed! which has drawn upon them. $n case

there are certain cheues! which could not be honored are returned to the presenting banks

with the reason of non1payments in the second meeting at he clearing1house.

a. 6perating 4rocedure&

learing operations are completed in three stages&

' 6peration at branch level


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' 6peration at internal clearing house

' 6peration at the clearing house in Bangladesh Bank

Bangladesh Bank clearing their house sites twice in a day. $n its first meeting Bangladesh

Bank clearing1house received instruments and distributes the same among therepresentatives comes with returned instruments and distributing among the representatives.

b. Software&

Software called -$IAS supplied by Bangladesh Bank is used in clearing of the cheue

and other instruments. he in1charge of clearing section makes clearing slip for each cheue

through computer using -$IAS and finally these cheues are sent to the Bangladesh

Bank learing1ouse sorting bank wise.

' rossing&

rossing cheue is written across the face of the cheue within two parallel lines. his

practice becomes common even outside of clearing house! as an element of safety.

a. 4urpose of crossing&

' o avoid possible loss that may occur by open cheue getting into the hands of wrong

parties

' rossing is a direction to the paying bank to pay the money generally to a bank or aparticular bank so that it can be easily traced out for whose use the money was received.

Jb. #orms of crossing&

General rossing&

' -ot negotiable

' And company and co

' -ot transferable

Special rossing&

' 4ayee A3 only

' -ot negotiable

' +ndorsements&

An endorsement is the mode of negotiating! a negotiable instrument.

' ,ispatch&


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,ispatch includes all correspondence! letter! statements! returns! and telegrams. his

dispatch is also known as "ail. ,ispatch is primarily divided into two types&

$nward& $t means what are receives from the outside.

6utward& $t means what sent to the outside.

$t is also divided into (a) 6rdinary. (b) *egistered and (c) %ocal.

General Banking on FSIB.doc

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