Internship Report

WORKING REPORT ON THE PRACTICES OF GENERAL BANKING, LOANS

AND ADVANCE DEPARTMENT AT PUBALI BANK LTD.

by,

M. A. Matin ID: 0620190

An Internship Report Presented in Partial Fulfillment

Of the Requirements for the Degree Bachelor of Business Administration (BBA)

INDEPENDENT UNIVERSITY, BANGLADESH

December 8, 2011



by,

M. A. Matin ID: 0620190

has been approved December 8, 2011

Mohammad Sohel Islam Senior Lecturer

School of Business Independent University, Bangladesh

8th December, 2011

i

Letter of Transmittal December 8, 2011 Mohammad Sohel Islam Senior Lecturer, Marketing School of Business Independent University, Bangladesh Dhaka, Bangladesh. Subject: Submission of the internship working report. Dear Sir,

With due respect and humble submission, I would like to inform you that, it is a great pleasure

for me to submit this working report on “The General Banking, Loans and Advance

Department.”, as a requirement for BBA 499 program. During preparing this working report, I

have gather extended knowledge on working procedure of general banking, loan and advance

section of a reputed commercial bank of BD. I also got an in-depth understanding and

experience, working with their banking software (PIBS) at Pubali Bank Ltd (Principal Branch).

It was my great pleasure & honor that I got the opportunity, working with them.

Sincerely Yours …………………… M.A. Matin ID: 0620190

ii

Acknowledgement

At the very beginning, I would like to express my deepest gratitude to Almighty Allah for giving

me the strength and composure to finish the task within the schedule time.

Internship program is an integral part of BBA degree. Every BBA student is being placed into

different organization to learn something within the pre-stipulated time by observing their

organizational daily practices. In this regard my internship was arranged at Pubali Bank Limited,

Principal Branch at Dilkusha. With deliberate counseling of my intern supervisor Mr. Sohel

Islam, Senior lecturer, Faculty of Marketing, Independent University Bangladesh (IUB), I have

accomplished my internship report successfully. My humble gratitude for his enthusiastic

guidance and consideration during the entire phase of the study made it possible for me to

prepare this report efficiently.

Furthermore specially, I would like to thank Mr. Jagot Chandra Saha (DGM) & Mr. Saiful Islam

(Senior Principle Officer) for giving me full facilities & support to acquire practical experience

and knowledge.

Now at this point, I would like to recall those people’s contribution, who received me as a

member of their Banking family, with whom I worked for the last three months. I would like to

express my deep condolence & gratitude to all the officials and members of Pubali Bank Ltd,

(Principle Branch) for all their guidance and suggestion during my “Internship Program”.

iii

Executive Summary

The report is prepared as part of practical orientation of BBA program. This incorporates the

major activities done by Pubali Bank, Principal branch. The report is a lively narration of various

banking activities like General Banking, Loans and Advance departments and other ancillary

services. As a conventional bank, each branch of PBL has a general banking section where the

primary task of deposit collection, maintenance of accounts and all local services are being done.

It performs the job of fund management on behalf of the whole bank. Another major duty of this

department is maintenance of the accounts and dealing with the clearing house. The loans and

advance section is in charge of proper disbursement of these funds to productive as well as

profitable ventures. The bank also works as both issuing bank, negotiating bank and

reimbursement bank for the international trading. In this dynamic business era, the management

requires proper flow of accurate information consistently to run an organization successfully, so

rationally, information handling of the PBL is quite updated from the previous time in terms of

sophisticated management information system. Facts and figures of these PBL branches clearly

indicate that the Principal Branch of PBL’s graphical trend is a positive sign of improvement and

expansion of activities in all spears of banking.

iv

Table of Contents

Pages

Chapter One 1

1.0 Origin of the report. 1

1.1 Objective of the report. 2

1.2 Methodology 3

1.3 Sources of Data 2-3

1.4 Limitation of the study 3

Chapter Two

2.0 Pubali Bank Ltd 4

2.1 Vision of PBL 4

2.2 Mission of PBL 4

2.3 Organizational chart of PBL 5

Chapter Three

3.0 General banking 6

3.1 Accounts opening section 6

3.1.1 Different types of A/C of PBL principal branch 7

3.1.2 Documents required for opening new accounts 8

3.1.3 Accounts opening procedure 9

3.1.4 Precautionary measures of A/C opening 9

3.2 Interest rate on deposits 9

3.3 Clearing section 10

3.4 Local remittance section 11

3.4.1 Telegraphic Transfer (TT) 11

3.4.2 Procedure of issuing (TT) 12

3.5 Demand Draft (DD) 13

3.5.1 Precaution for demand draft 13

v

3.5.2 Procedure of issuing (DD) 14

3.5.3 Payment of DD 14

3.6 Pay order 15-16

Chapter Four

4.0 Loans & Advance 17

4.1 Layout of Loans & Advance of PBL 17

4.2 Types of Loans 18-20

4.3 Process of Loans 21

Chapter Five

5.0 Task and Responsibility performed by me at Pubali Bank Ltd 22

5.1 General Banking Division 22

5.1.1 Account opening & Cheque books handling section 22

5.1.2 Experiencing the application of PIBS software 22

5.1.3 Collection of check books: 23

5.1.4 Posting request order for new MICR check books to JBSPPL through on

line software

23

5.1.5 Stamping various kinds of documents 24

5.1.6 The Local Remittance (TT/DD/PO) section 24

5.1.7 Customer assistance 24

5.1.8 Balance transfers information of TT receipts towards its destinations

branches

24

5.1.9 Receiving TT massage from different PBL Branches round the country 25

5.2 Loans & Advance section 25

5.2.1 Initials 25

5.2.2 “Application Form and necessary papers” for loan sanctioning 26

5.2.3 Assistances in construction of a proposal 27

5.2.4 Construction of CIB reports and statements 27

5.2.5 Posting the monthly installment of the borrower through the PIBS software 28

5.2.6 Miscellaneous activities 28

vi

LIST OF CHARTS

Pages

2.3 Organizational chart of PBL (Chart no: 1). 5

3.4 Local remittance section (Chart no: 2) 11

3.4.2 Procedure of issuing (TT) (Chart no: 3) 12

3.5.2 Procedure of issuing DD (Chart no: 4) 14

4.1 Layout of Loans & Advance of PBL (Chart no: 5) 17

LIST OF TABLE

Pages

3.0 General banking

Desk associated with general banking (Table no: 1)

6

3.2 Interest rate on deposits (Table no:2) 9

Chapter Six

6.0 Problems and Recommendations 29

6.1 Problem that have encountered 29-31

6.2 Recommendations 32-34

7.0 Conclusion 35

Appendix 36-46

Acronyms 47

Bibliography 48

1 Working report on the practice of general banking, loans & advance of PBL.

Chapter One

1.0 Origin of the report

The Internship program, itself is an attempt to provide the graduates an orientation to a real life

situation, in which they can observe and evaluate the use and applicability of their theoretical

concepts, taught in the classroom. As per the norm, this report is the requirement to fulfill the

internship program as well as the BBA program which is assigned as the course, named BUS

499 for the students to help them out, to have a practical knowledge of the work in a real official

environment for a semester in order to gain practical experience. The organizational attachment

started on September 4, 2011 and ended on December 4, 2011. My university supervisor Mr.

Sohel Islam and organization supervisor Mr. Jagot Chandra Saha (DGM) (Principal Branch

Dilkusha of Pubali Bank Limited) suggested me the topic of my report. This report covers the

organizational overview of the Pubali Bank Ltd, Management and Organizational Structure,

various functions performed by the Pubali Bank Ltd. It also covers overview of the General

Banking, Loans & Advance departments. Identification of some problems associated with these

departments of The Pubali Bank Ltd. Principal Branch.

1.1 Objective of the report

1.1.1 General Objectives:

This study is intended for providing me a valuable practical knowledge about the banking

operation system in Bangladesh. The prime objective of the study is to examine the performance

of Pubali Bank Ltd.


1.1.2 Specific Objective:

To accomplish the partial requisite of BBA program and achieve of good judgment with

theoretical base.

To have a revelation on the banking environment of Bangladesh.

To review the consumer banking services and operating system of Pubali Bank Ltd.

To evaluate the factors affecting performance of the Bank.

To suggest the better ways of enhancing the performance of the Bank.

To make myself confident and active in future to finger my job.

1.2 Methodology

While conducting the study, various sources were explored for primary information and data

collection. But hardly any updated data could be found. In the absence of updated information or

data, dependence on the secondary source has been inevitable. However, wherever, possibly

majority of the primary data has been used. Data were also collected by interviewing the

responsible officers and from some documents & statements printed by the bank and the website

of PBL. There have been used some statistical tools and graphical representation to find out

different types of analytical results and interpretations.

1.3 Sources of Data

The following sources have been used for the purpose of gathering and collecting data as

require.

1.3.1 Primary data:

1. Practical desk work.

2. Face to face conversation with the officers and clients.

3. Official record of PBL.

4. Data collection of own supervision.


1.3.2 Secondary Data:

1. Annual report of PBL.

2. Official files and folders.

3. Working papers

4. Selected books.

5. Published and unpublished documents

6. Memo and circular

7. Website.

1.4 Limitation of the study

The limitation of the study is defined by the extensive of the facts covered by the study and

those that left out. However, these limitations can be presented in the following lines:

The first limitation is that the complete picture of the Pubali Bank’s activities within the

period of my internship program failed to demonstrate. So, my intention was to focus on

the task that have done and also was to make it consistent with other part of the report.

Some how the report has offset with quality regarding interpretations due to its page

limitations, which apparently seems to be the most severe limitation.

Another limitation of this report in non-availability of the most recent data & information

about the different activities of Pubali Bank policy, of not disclosing some data &

information for confidential reasons, which could be very much useful.

In spite of all these limitations, this is my attempt to put the best effort as far as possible.


Chapter Two

2.0 Pubali Bank Ltd

Pubali Bank Limited is a reputed private commercial bank established on May 20.1984.

Licensing no Bl/DA/1/84. In exercise of the powers conferred on the Bangladesh Bank under

section 28(1) of the banking companies’ ordinance 1962 as adopted in Bangladesh Pubali Bank

Limited; Bank authorized to open the branch at 26 Dilkusha commercial area (Local Office) P.S

Motijheel district Dhaka. Condition mention in this office letter no. BCD (D) 200/42(a)/145. The

bank has been widely acclaimed by the business community from small entrepreneurs to large

traders and industrial conglomerates. Within very short period of time it has been able to create

an image for itself and has earned significant reputation in the country’s Banking sector as a

bank of vision. Presently it has 406 branches, in terms of operations the Principal branch is one

of the big and important branches of PBL.

This intended to ensure the trust and confidence of the customers through trying to focus on

customer orientation qualities of services and state of art technology.

The company philosophy-A Bank for the 21st century has been precisely the essence of the

legend of the Bank success.

2.1 Vision of Pubali Bank Ltd

To hold the position of best private commercial Bank in Bangladesh with adherence to

meticulous compliances of rules and regulations and strong commitment to corporate social

responsibility.

2.2 Mission of Pubali Bank Ltd

(A) To get recognition as a dynamic, innovative and customer supportive Bank.

(B) To maintain continuous & steady growth with utmost transparency and to diversify

development of resources.

(C) To enhance continuous development of information & technology to meet the demand

and challenges of the time.


2.3 Organizational Chart of PBL

Chart no: 1

Chairman

Vice Chairman Directors

Managing Director

Company Secretary General Manager Law consultant

Deputy General Manager

Asst. General Manager

Senior Principal Officer

Principal Officer

Officer

Junior Officer


Chapter three

3.0 General Banking

This is the starting point of banking operation at Pubali Bank Ltd, Principle branch similar

like all other banks. In the general banking department almost all the service provides to the

customer is basically day to day service. Every day customer comes at the bank and they deposit

and withdraw money in their accounts through their deposit form and issuing cheque. It opens

new accounts, remit funds, issues telephonic transfer, bank drafts and pay orders etc. Since bank

is confined to provide the services everyday, general banking is also known as ‘retail banking’.

Desk associated with General Banking

General Banking

1 Account Opening And All Kinds of Deposit Opening Section.

2 Bill and Cheque Clearing Section.

3 Cash & Accounts Section.

4 Issuance of DD/TT/PO/FDR or local Remittance Section

5 Verification and Authorize Section.

Table no: 1

3.1 Account Opening Section

When a customer want to open a deposit account in bank, he/she will have to go the A/C opening

section to know the rules and regulations for opening account and to have the set of documents

required. Since PBL is an authorized dealer, it can open deposit A/Cs denominated both in Taka

and approved foreign currencies.

Deposits are like raw materials out of which credits are created. Deposit accounts are one of the

important sources of funds collections. In order to attract customers, the banks offer different

facilities to various types of account holders. Competition in accepting deposits takes two forms:


(a) Improvement in customer service

(b) Offer a higher rate of interest.

In our country PCBs and foreign banks are appreciated to attract deposit because of their

superior customer services. PBL principal branch with its traditions customer service approaches

are facing difficulties to draw attention of the new potential customers.

Major functions of account opening are given below:

To give answers to the queries regarding account opening

To supply the appropriate type of account opening form

To put a/c number from a computerized sheet on advice of new account

To input data into the PIBS software designated a/c opening form.

To maintain and update the a/c opening file for different types of accounts.

To maintain a register for recording the details of a/c opening

To supply deposit slip books and cheque book on requisition

To act on request for closing and transferring of deposit a/c

3.1.1 Different types of A/C of PBL Principal Office.

1. Current A/C: Interest free and generously withdrawal.

2. Saving Bank A/C: Interest bearing and checkable with some restriction

3. Short Term deposit: Usually interest bearing and withdraw able on short notice.

4. Fixed deposit: Interest bearing and get mature in definite period of time like one year

or six month.

5. Non Resident foreign currency deposit: All non residents of Bangladesh can open

this interest bearing account in the form of term deposit with a minimum amount of

$1000 or equivalent.

6. Private Foreign Currency A/C: Bangladeshi National residing abroad or foreign

nationals may open this a/c with deposit mode.


3.1.2 Documents required for opening new account:

1. Documents Common for all types of Account & Customers

a. Advise of New Account

b. Specimen signature cards

c. Account Opening Agreement Form

d. Photographs of Account Holder

e. Deposit Slips Book

f. Cheque book Requisition slips

g. Letter of mandate is required where necessary

h. National ID/Voter ID

3.1.3 Account opening procedure:

a. Applying in a printed application in a certain stipulated form printed by the bank itself.

b. Supply a set of printed forms required for opening the account which will normally

include

i) Advise of new Account

ii) Specimen Signature Cards

iii) Account Agreement

iv) Deposit slip Book

v) Cheque Book Requisition slip

c. The account should properly introduced by any one of the following

i) An existing Current Account holder of the bank

ii) Officials of the Bank not below the rank of an Assistant officer

iii) A respectable person of the locality well known to the Manager or Sub-

Manger of the Branch concerned.

d. A number of photographs which must be duly attested by the introducer in front of the

manager or responsible officer. The signature of the introducer must be attested. After

being scrutinize the application and the manager or authorized officer may give his

consent to open the account.


e. A package with deposit book, cheque book with a unique A/C No. given to the Customer

maintaining the A/C opening register book.

3.1.4 Precautionary Measures of A/C Opening:

a. Soon after the opening of a new Account a letter of Thanks should be sent to the

introducer.

b. A letter of thanks as per prescribed should also be sent to the account holder immediately

upon opening the account, under registered post with a/c for verification of postal address

as well as genuineness of the Account holder.

c. In case of a new account is opened a proprietorship / partnership firm, having local

business address, a responsible officer of the branch will inform the firm to obtain the

confidential report on the firm.

3.2 Interest rate on deposits

Interest rate of different types of deposits, prescribed by PBL head office.

SI

No.

Types of saving & deposit account Interest Rate

1 Time deposit( FDR accounts)

1.1 One month(in terms of amount) 8.00%

1.2 More than three months but less than six months

(a) Within BDT one million 11.00%

(b) More than BDT one million less than BDT five million. 11.50%

(c) BDT five million or more 12.00%

1.3 More than six months but less than one year. 12.00%

2 Saving Account 4.50%

3 STD/SND Account (amount in BDT)


3.1 a) Less than 10 million. 4.50%

b) More than 10 million but Less than 250 million. 5.00%

c) More than 250 million but less than 500 million. 8.00%

d) More than 500 million but less than 1000 million. 8.50%

e) More than 1000 million. 9.00%

4 PBL special monthly saving scam

Maturity Monthly savings BDT 100 to BDT 15000

a) Three years 8.00%

b) Five Years 9.00%

c) Seven Years 10.00%

d) Ten Years 11.00%

Table no: 2

3.3 Clearing Section

The Cheque Clearing Section of PBL principal office branch sends Inter Branch Debit Advice

(IBDA) to the Head office on the receiving day of the instruments. The main Branch takes those

instruments to the Clearing House on the following day. If the instrument is dishonored, Head

office of PBL sends IBDA to the PBL, Principal Office branch. The total procedure takes three

days if everything goes orderly.

The Cheque Clearing Section of PBL, Principal Office branch sends Outward Bills for

Collection (OBC) to the concerned Paying Bank to get Inter Branch Credit Advice (IBCA) from

the paying Bank. If the instruments are dishonored by the Paying Bank, the Paying Bank returns

it to the PBL,


3.4 Local Remittance Section Local Remittance is used to transfer of funds denominated in Bangladeshi Taka between

banks within the country. It is an order from the Issuing branch to the Drawee Bank/ Branch

responsible for payment of a certain sum of money to the beneficiary. The payment instruction is

sent by Telex / Telegram and funds are paid to the beneficiary through his account maintained

with the Drawee branch or through a pay order if no a/c is maintained with the drawee branch.

The cash department does remittance of cash. Instruments of local remittances at PBL branches

are follows

Local Remittance

Telegraphic transfer

TT

Demand Draft

DD

Pay Order

Chart no: 2

3.4.1 Telegraphic Transfer (TT):

Telegraphic Transfer is a quick mode of remitting funds over telex or Telegram. Now this

term has used as “Telephonic Transfer” also which is faster than previous one for money

transfer. Following points have to consider for the TT

1. On receipt of T.T payment instructions (Appendix, fig no-6) the following entries are

passed by the Drawee branch if the T.T is found to be correct on verification of Test

Number.

i) Dr. PBL General A/C

Cr Remittance Awaiting Disposal- T.T Payable A/C

ii) Dr Remittance Awaiting Disposal-T.T Payable A/C

Cr Client’s Account A/C.

If the beneficiary does not maintain any a/c with the Drawee Branch a P.O is issued in

favor of the payee and sent to his banker/local address as stated.


2. Every branch maintains a prescribed T.T. Payable Register. All the particulars of T.T are

to be properly recorded in this Register duly authenticated, not only that the TT

associated officer up load the entire TT receipt’s information separately to the PIBS

software designated TT issuance page (Appendix, fig no-7). A separate type of T.T

confirmatory advice is sent to the Drawee branch on the same day. In the case of the T.T

receive, the Confirmatory advice/confirmation copy are being kept as instruction within

the principle branch, which comes from the different TT issuing branch of PBL, the

particulars of the T.T are verified with reference already recoded in the T.T payable

Register.

The Confirmatory advices are kept attached with the relative Ticket number & further

responding entry is required to be passed on receipt of such confirmation copy.

3.4.2 Procedure of Issuing TT:

Chart no: 3

Customers fill up a printed

application form.

Cash Dept. receive cash with commission & 15%VATon commission, telephone charge Tk. 40 and issue debit ticket to L/R

On receiving debit ticket L.R dept. make entries into the register & issue TT and issuing credit advice in triplicate

LR dept prepares TT massage in duplicate for drawee branch and arrange to send the same through test key Dept.


3.5 Demand Draft (DD):

Demand Draft is an instrument containing an order of the Issuing branch upon another

branch known as Drawee branch, for payment of a certain sum of money to the payee or

to his order on demand by the beneficiary presenting the draft itself.

3.5.1 Precautions for Demand Draft:

1. Get the application form properly filled up and signed by the applicant (Appendix, fig-8).

2. Complete the lower portion of the Application form meant for Bank’s Use.

3. Calculate the total amount payable including Bank’s commission/charges etc.

4. If a cheque is presented for the payment of the DD officer should get the cheque duly

passed for payment by the competent authority and record the particulars of DD on the

back of the cheque.

5. If the purchaser desires his account with the branch to be debited for the amount of DD

the officer should get the A/c holder’s signature verified properly, from signature card on

record of the branch and debit client’s a/c for the total amount including commission

charges etc.

6. If cash deposit is desired, request the purchaser to deposit the money at the Teller’s

counter.

7. The teller, after processing the application form, cash or cheque, will validate the

Application form.

8. The first copy of the Application form is treated as debit Ticket while the second copy is

treated as Credit Ticket and sent to Remittance Department for further processing. The

third copy is handed over to the Applicant as customer’s copy.

Each branch maintains a running control serial number of their own for issuance of DD to each

Drawee Branch. This control serial number should be introduced at the beginning or each year

which will continue till the end of the year.

3.5.2 Procedure of issuing D.D:


Chart no: 4

The Remittance Department maintains prescribed DD Issue Register. All the required particulars

of all DD issued should be entered in that Register duly authenticated ,more importantly all the

information of each DD receipts must need to be uploaded to the PIBS software’s designated

page (Appendix, fig no-9). Separate control serial number is being maintained for each Drawee

Branch. Apart from that while issuing local Draft of Tk. 50,000/- and above, branches shall put a

test number in Red-Ink on the upper portion of the drafts so that the drawee branch can

immediately make payment of the DD on presentation after getting the Test agreed.

3.5.3 Payment of DD:

1. When a DD is presented for payment at the paying branch its details are to be carefully

examined with references to the following points.

i) Whether the draft is drawn on their branch

ii) Whether the draft is crossed or not Amount of a crossed draft is not paid in

cash to the payee but to be paid to his account with a bank.

iii) Two authorized officials of the Issuing branch must have signed draft. Their

signatures are to be verified from specimen signature book let to be sure that

Customers fill up a printed Application form.

Cash dept. Receive cash with commission and postage stamps.

The applicant form with verified signature by L/R allows to make entries in to the register and issue inter bank credit advice in favor of Drawee branch

Cash dept. verified the signature of the client and checks the balance of a/c L/R dept. Debit customers a/c


the draft is genuine. The verifier should out his initials in red ink against the

authorized signature in the draft.

iv) Endorsement on the back of the draft must be regular in case the draft is

presented through clearing.

v) The amount of the draft should not exceed the amount protect graphed written

in red ink on the top of the draft.

vi) The payee is to be properly identified in case of case payment.

vii) The particulars of the draft i.e. the draft number date amount and the name of

payee, should be verified from the DD payable Register.

3.6 Pay Order:

a. Pay order issue process

For issuing a pay order the client is to submit an Application to the Remittance

Department in the prescribed form (in triplicate) properly filled up and duly signed by

application. The processing of the pay order Application form, despot of cash/cheque at

the Teller’s country and finally issuing an order etc, are similar to those of processing of

L.D (loan Draft) Application.

As in case of L.D each branch should use a running control serial number of their own for

issuance of a pay order. This control serial number should be introduced at the beginning

of each year which will continue till the end of the year. A fresh number should be

introduced at the beginning of the next calendar year and so on.

The Pay Order operating officer use the PIBS software designated page (the PO on line

form) in order to up load the applicant’s PO receipt’s information separately which

ultimately facilitate, the fast accomplishment of the overall task (Appendix, fig no-10).

b. Charges for issuing each pay Order commission at the rate prescribed by Head Office is realized from the client and credited to Income A/c as usual.


c. Entries

Dr. Teller’s Cash/client’s a/c

Cr pays Order a/c

Cr commission a/c

d. P.O issue Register

The remittance Department will issue the pay Order’s duly crossed “A/c payee” and will

enter the particulars of the P.O Issued in the prescribed P.O Register duly authenticated.

e. Payment of pay orders

As the P. Os crossed A/c payee, the same are presented to the Issuing branch for payment

either through clearing of for credit to the client’s A/c. Os when presented for payment

are processed in the Remittance Department. On making payment, the relative entry in

the P.O Register is marked of by entering the date of payment in the P.O Register duly

authenticated. The paid instrument is treated as Debit Ticket.

f. Pay order commission charge

Up to Tk.1000 Tk. 15

Tk.1001-100000 Tk. 25

Tk.100, 001-500000 Tk. 50

Above Tk.500000 Tk. 100


Chapter Four

4.0 Loans and Advances

Major source of income for a bank is the earning from credit. Borrower selection is the main

and prime task of this department. Advancing loans is the primary function of the commercial

banks. Without loans country’s industrial and commercial development is not possible.

Therefore, a smooth credit system in banking sector is one of the catalysts for economic

development of a country.

4.1 Layouts of Loans & Advances

Chart no: 5

ADVANCE

Foreign Inland

Advance

(Loans)

Advance

(Overdraft)

Advance

(Discount)

CCS

Transport Loan

HBL (General)

Loan (General)

HBL (Staff)

Project Loan

Education Loan

LTR

LIM

LATR

PAD

TOD

SOD

CC (Hypo)

CC (Pledge)


4.2 Types of Loan

Pubali Bank Principal Branch has the following loan schemes

Continuous Loan

Demand Loan

Term Loan

Short term Agro and Micro Credit

Cash Credit (CC)

Overdraft (OD)

Bank Guarantee

Staff Loan(PBL)

4.2.1 Continuous Loan:

The limited loans with expiry date of loan payment, which can be transacted without any

particular payment schedule, are termed as continuous loan. Following are the various

categories:

1. Small Enterprise Financing (SEF)

2. Consumer Financing (CF)

3. Other than SEF and CF

4.2.2 Demand Loan:

The loans, which become eligible for payment when demanded by the bank, are termed as

demand loan. If contingent or any other debt becomes forced loan, then those are also termed as

demand loan.


Following are the various categories:


2. Consumer Financing (CF)

3. Other than SEF and CF

4.2.3 Term Loan:

The loans which are to be paid within limited term with a particular payment schedule are

known as term loan.

Following are the various categories:

(a) Term loans up to 5 years


2. Consumer Financing (Other than HF & LP)

3. Housing Finance (HF)

4. Loans for Professionals to setup business. (LP)

5. Others

(b) Term loan over 5 years


2. Consumer Financing (Other than HF & LP)

3. Housing Finance (HF)

4. Loans for Professionals to setup business. (LP)

5. Others


4.2.4 Short term Agro and Micro Credit:

The short-term loans which are listed in yearly loan disbursement schedule served by the loan

department of Bangladesh Bank, are termed as short-term agricultural loan and micro-credit. The

loan given to the agricultural sector for less than 12 months is also included in this category. By

short-term loan we mean the loan below Tk 10,000 to be paid within 12 months.

4.2.5 Cash Credit (CC):

a. Cash credit is given through the Cash Credit (CC) account.

b. Cash credit account is basically a current account, however a little difference exist

between them. The distinction between a current account & CC account is that, the

former one is intended to be an account with credit balance and the latter on account is

for drawing of advances.

c. Operation of cash credit is as same as overdraft. The purpose of cash credit is to meet

working capital needs of traders, farmers, and industrialists.

4.2.6 Over Draft (OD):

a. Overdrafts are those drawings which are allowed by the banker in excess of the

balance in the account up to a specified amount for definite period.

b. Generally it is given to the businessmen to maintain their business activities.

c. Any deposit in the SOD account is treated as repayment of overdraft.

d. Generally provided against FDR, any primary security etc.


4.3 Process of Loan

Application

Applicant applies for the loan in the prescribed form of the bank, describing the types and

purpose of loan.

Sanction

a. Collecting credit information about the applicant to determine the credit worthiness of the

borrower. Sources of information

i. Personal Investigation, Confidential Report from other bank, Head

Office/Branch/Chamber of Commerce.

ii. CIB (Central Information Bureau) report from Central Bank.

b. Evaluation of compliance with its lending policy.

c. Evaluating the proposed security

d. If loan amount exceeds 50 lac then bank goes for LRA Analysis.

e. LRA is must for the loan exceeding one crore – as ordered by Bangladesh Bank. LRA has

described at the end of this chapter.

If everything is in accordance the loan is sanctioned

Documentation

a. Then the bank prepares a loan proposal containing terms and conditions of loan for approval

of H.O. or Manager.

b. Takes the necessary papers and signatures from borrower

Disbursement A loan Account is opened where

Dr customer A/C.

Cr Respective Loan A/C.


Chapter Five

5.0 Task and Responsibility performed by me at Pubali Bank Ltd

5.1 General Banking Division

5.1.1 Account opening & Cheque books handling section:

Initially at the very first week of my joining, at the accounts opening and check book handling

section, my immediate supervisor tried to give me a brief description of her routine tasks before

deploying me to any specific task. Later on through my personal observation and superior

officer’s guidance, ultimately allow me to understand the purpose of various types of accounts

along with their features which includes, current account (C/A), saving accounts (SB), STD,

FDR etc. She also assist me, how to deal with clients versatile questions regarding different

accounts opening, what amount of interest rate they will get from these different categories of

accounts, how to locate desired check books from the bundle according to customers

requirements and many more.

5.1.2 Experiencing the application of PIBS software:

By the period of time, with the assistance of my superior officer, gradually the usage of the

PIBS system (Pubali integrated Bank System) (Appendix, fig-1) was understood by me. She

taught me the various functionality of different section of PIBS software in order to put bundle of

in formations, associated with different types of accounts, check book etc. By the automation of

this PIBS software all the input information filtered several of times by the assigned computer

operators, then finally accumulated within the central storage or database of the Pubali bank ltd.

Sometimes my immediate supervisor, while she was busy handling other tasks allow me to enter

all the new customer’s accounts related in formations within the “online customer accounts

opening form” step by step as per the software’s instructions (Appendix, fig-2).


Apart from those computer tasks, one of my regular duties ware to help my superior officer to

verify the new account’s documents, whether to check all the applicants of the newly opened

accounts have fill up all the mandatory sections of the initial accounts opening forms.

5.1.3 Collection of check books:

In the accounts opening and check book collection section, it was my regular duty to help out

the clients through collecting their requested check books from the locker. This task was

accomplished, by following two steps. First step, the specific client’s account numbers was

entered into the search options of a designated excel page (Appendix, fig -3) of PIBS software,

which perseveres all the new check book related in formations, more specifically in which date

the specific client gave the request order for his desired cheque books. In the second step, as per

the issuance date of that cheque book was searched, whether the check book is available or not

within the check book locker, if the desired cheque book was found, then my responsibility was

to hand over it to the specific client immediately after certain verifications.

5.1.4 Posting request order for new MICR check books to JBSPPL through on line

software:

Another part of my daily activities includes uploading the order related information regarding

the new MICR check books . Through an online software these cheque books order were posted

into the pubali bank associated printing organization “Japan Bangladesh securities paper and

printing Ltd”. MICR (Magnetic Ink Character recognition) check book issuance page (Appendix

fig- 4) allow me to upload these new requested check books order information to its designated

online form, where as the PBL associated printing organizations (JBSPPL) will be able to know

how many new check books they are going to print according to the issuance date.

Apart from posting the request order of new check books, another PIBS software designated

page (Appendix fig-5) was used by me in order to deduct BDT 20 for per new check books.

From those client’s accounts who requested for the new check books.


5.1.5 Stamping various kinds of documents:

Sometimes my superior officer gave me various kinds of documents in order to stamp them

with authorization and endorsement seal.

5.1.6 The Local Remittance (TT/DD/PO) section:

Initially at this section my superior officer has tried to give me an in-depth description of his

regular job in this section .At the beginning of these procedures he let me know how a customer

fill up a TT, DD, PO forms as per his necessity. Then what an officer do in order to finish the

rest of the operations.

5.1.7 Customer assistance:

In order to facilitate the overall operation, my superior officer advised me to assist the

customers, whether they could fill up their desired (DD, TT & PO) form accurately.

5.1.8 Balance transfers information of TT receipts towards its destinations branches:

With the help of an official mobile phone, my responsibility was to call up those branches,

where the TT messages of different TT receipts should suppose to go .For better understanding, a

brief description of the TT message transmission procedure is explained below.

The initial procedure generally starts through calling up the designated PBL branch as per the TT

receipt, and then next task was to let the person know that, the call has made from the principal

branch and would like to pass a TT massage. Then step by step my responsibility was to gave all

the information of a specific TT receipts such as favoring person or organization’s name,

address, amounts of money ,Account number ,serial number ,Test number ,TT issue advice no:

etc (reference Appendix, fig-11) to the TT task associated officer of that branch.


5.1.9 Receiving TT massage from different PBL Branches round the country:

Actually this is completely a reserve from of the TT massage transmission procedure .My

duties ware to receive different Branches phone calls and according branch person’s request

filling up the specific TT receipts.

5.2 Loans & Advance section

5.2.1 Initials:

My participation at the loan and advance department started under the supervision of a senior

loan officer and also he was one of the key authorized members who look after the initial steps of

consumer credit scheme (CCS). Now, before getting involved into any specific task he had given

me an over view about the various types of loan and advance scheme of PBL almost for a week.

He incorporated the overall distinction of different types of loans and advances along with the

job description of the officers in various departments who deals up specific types of loan and

advances. Besides, he also let me know about some borrowers along with their profiles, what are

the fundamental concerns of the managers in terms of issuance various types of loans. Again

which mandatory steps that an assigned loan officer must maintain in order to facilitated the

overall loan sanctioning process? For instance ,(i) construction & delivery of central information

bureau(CIB), (ii) construction of proposal after the positive replay of CIB verification & as well

as the associated field investigating officer’s report about the applicant client’s business or

properties etc.

Apart from the assistance of my fellow superior officer, through my personal observation & with

the help of my interpersonal skills & as well as my dedication, I had tried to get an in depth

understanding of the overall loan and advance department of PBL.


5.2.2 “Application Form and necessary papers” for loan sanctioning:

This is the initial stage from where the loan sanctioning procedures usually start. My superior

officer allowed me to verify the loan applications submitted by the clients which are known as

“party application”. Later on he ordered me to check several of documents of the applicants and

asked me to inform him about required information in order to construct a CIB.

During the construction of CIB report, I checked the following papers. (Service holders’

assessment):

Salary certificates from the employer.

Last three months salary accounts statements.

The clients have to submit a guarantee latter from his higher ranked or equivalent

ranked officer to the bank.

The permanent executive of any private organization or a businessman has to collect

and submit a guarantee latter from any reputed and economically solvent person of the

society which needs to be accepted by the bank. Apart from that an FDR will be

accepted in lieu of guarantee.

Now in the case of a business organization or self employed persons’ assessment, I checked

the following papers:

Last six month’s personal accounts statements.

Tread License / latter of in corporation

TIN certificated

Tax return statements (last 3 years)

National ID / Voter ID

Apart from these, finally a copy of CIB kept as an office copy in the branch office, one copy

sent to the head office and another copy sent to the BANGLADESH BANK through a form of

CIB IA (for owner information/ institution) (Appendix, fig-12), CIB IIA (for individual &

director of the business organization) (Appendix, fig-13) and CIB IIIA information (for the


group /related business concern) (Appendix, fig-14). It takes only 2 to 3 days to get a reply from

the BANGLADESH BANK. After verifying all the given information submitted by the applicant

borrowers, if it was found positive then a loan sanctioning procedure moves on towards the next

level.

5.2.3 Assistances in construction of a proposal:

After getting a positive report in terms of CIB from the central bank and as well as from the

inquiry officer’s field investigation, the next step was to construction of a proposal regarding

borrower’s loan sanctioning procedure which preserves lots of information according to the

guide line of PBL.

During the period of proposal construction, my cooperation to the superior officer facilitated the

overall procedure. His request allowed me to review the applicant’s various kinds of proposed

documents and in the case of a business organization. I had also reviewed their annual report and

other necessary information’s and finally let my superior officer know about his requested

information. Apart from these one of my regular duties was to analyze different types of

financial ratios of the applicant borrowers business, which helped the loan sanctioning bank to

forecast the real scenario.

5.2.4 Construction of CIB reports and statements:

Construction of various kinds of CIB reports and statements could be termed as “the common

regular activities” for any loan officers of PBL. More importantly these kinds of CIB reports and

statements contain the updated information or recent status of the existing borrowers. So

rationally, my superior officer was supposed to update the monthly information regarding the

loan takers through constructing the CIB reports. He gave me bundles of paper which contains

numerous loan takers name, account numbers, limit of loans, sanction date, expired date, last

outstanding balance etc. During posting the figures into a designated excel sheet, in order to

create a CIB’s up to date report. My duty was to let the superior officer know all those account

numbers and other information from top to bottom.


Sometimes he also gave me the opportunity to post those figures into the excel sheet, during his

busy schedules (Appendix fig no -15).

5.2.5 Posting the monthly installment of the borrower through the PIBS software:

Sometimes my superior officers allowed me to post the borrower’s monthly installment

cheque through the PIBS software’s designated page. In order to post any installment, initially

my task was to open up the installment posting page from the PIBS software (Appendix fig no:-

16) to debit the installment amount from his saving or current account and then opened up

another PIBS software designated page (Appendix fig no: - 17) in order to credit the installment

amount to the borrower’s loan accounts to adjust.

5.2.6 Miscellaneous activities:

During my working period at these loans and advance department, my purpose was to help

the fellow superior officers in order to print & stamped up many documents with authorized

seals.


Chapter Six

6.0 Problems and Recommendations

6.1 Problem that have encountered:

From the overall study some problems have been identified, those are as follows:

No existence of separate customer care unit:

Now a day delivering superior customer service is one of the major tasks in terms of any

service oriented organization’s current & future progression. But very unfortunately, being such

a big organization PBL principle branch do not have any separate customer care unit in contrast

with other commercial private bank in BD. Within the whole principle branch, the single

accounts opening & cheque book collection officer is actually playing the role of initial customer

care/assistance on behalf of the whole branch. So it is very easy to predicted, that the level of

initial customer care in the principle branch of coerce is not consistent at all, which is obviously

not expected from a commercial bank’s point of view.

High rate of employee turnover:

Through my intensive observation, it has been found that the employee turnover rate at PBL

is high. The majority root level employees claim that, the compensation which they get from the

bank is not adequate in contrast with the other private commercial banks. As a result they are

getting de motivated regarding their assigned job, ultimately while they are getting more

lucrative offer from other organization they just quite there job. Undoubtly it could be termed as

a major problem & a straight loss of investments from a bank’s point of view.


Lack of standardized working environment:

From the employees point of view the working environment of the PBL is not comfortable.

Within the principle branch it has been seen that the air cooler dose not work properly most of

the time through out the whole working day. Not only that the working place is not spacious and

also it is noisy, finally these factors work as a catalyst in order to break up the employee’s level

of concentration regarding their tasks. Apart from these the toilet facilities, of coerce are not up

to the mark too.

Low standard of the ATM service:

Now a day, assuring a promising ATM service for the customers is one of the prime tasks for

any commercial private bank in BD, but very unfortunately the ATM service currently provided

by the PBL is in the infant position. As per the recent scenario, the PBL is having few number of

ATM booths, which have totally failed to attracted those customers who want to enjoy the ATM

services. Apart from that PBL only offer debit card to its customers, still there is no provision of

any credit card facilities. Actually in contrast with PBL, it is well visible that the 3rd generation

competitor banks are capitalizing these opportunities aggressively.

No existence of internet & Mobile phone banking:

Though the authority of PBL had a plan to launch the Internet & Mobile Phone banking

facilities for its customer, but unfortunately still they have not been able to provide their

promised services to those existing & potential customers who demand an updated banking

facilities.

Lack in promotional activities:

The Marketing & other promotional policies which are being adapted by the PBL are not so

modernized in contrast with the existing 3rd generations banks. The point is, though the PBL is


keep launching many lucrative offers in order to attract its new customers but due to the lack of

conveying proper advertisement and other promotional activities, somehow these offers are

failing to reach towards the new customers. It is well known that “conveying new offers to the

customers through a persuasive manner “is one of the prime tasks for any successful

organization.

Lack in proper performance evaluation of the employees:

As per the employees of PBL, it has been found that the top management of PBL does not

evaluate their performance & organizational commitment properly. It is actually a de motivating

factors for those employees, who are concerned regarding their performance. They claim that

due to the lack of proper performance evaluation sometimes the competent officials deprived

from getting their expected promotion. Apart form these they also suspected that the ACR

(Annual Confidential Report) policy which is followed by the top authority for employee’s

performance evaluation is biased. Ultimately these acquisitions are appearing as a serious

organizational problem and as well as question marked towards the top management’s

competency.

Low interest rates regarding various deposit schemes are discouraging the new

customers:

Collections of deposits from the huge numbers of customers is one of the prime task of fund

managements, rationally in order to attract new customers every commercials bank generally try

to offers lucrative amount of interest rate and maturity days upon many kinds of deposits

schemes. PBL is not an exception, but the point is, recently it has been seen that the amount of

the interest rate regarding many deposit schemes which has been offered by the PBL is not that

competitive in contrast with other commercial private bank’s offer, and some officials believe

that somehow this policy is discouraging the new potential customers, undoubtly this critical

policy could be termed as a problem.

Lack of active participation in research and development department.


6.2 Recommendations

In order to get competitive advantage & to deliver quality service, top management of PBL

should try to modify some of their services. For the improvement of the services, the following

measures should be taken:

Improvement of the official Web Site:

The officials’ web site of Pubali Bank Ltd is not up to date .The web site is less informative in

contrast with other commercial banks and it would not leave a good impression on its visitors. So

the recommendation is that, the official web site should be updated to meet the requirements of

its visitors.

Establishment of separate customer care unit:

The top management should deploy a separate customer care officer who will assist various

kinds of customers initially as per their requirements. For instance if any client is facing

complication regarding usage of his ATM card, the assigned customer care officer will try to

give them the solution immediately.

Establishment of a reformed compensation policy:

All the officials are the stakeholders of the PBL, so taking care & motivating all level of

employees, more specifically the stakeholders is one of major tasks of the top authority. The top

authority must understand the psychology of its employees. They must construct an

economically feasible pay structure for its employee’s welfare immediately.


Improvement of the existing ATM service:

The management of PBL immediately should update its ATM service. They can import ATM

machine, even in order to facilitate the service, they may create strategic aliens with other

commercial private banks too. Ultimately they must create a perfect lay out for its ATM service.

Apart from that the management could also thinks about introducing credit card facilities for its

customers.

Development of the Internet & mobile phone banking services:

Internet & Mobile phone banking facilities now a day could be termed as a prospective

phenomenon from the commercial bank’s point of view. So the recommendation would be to

develop these services immediately in order to attract those new customers who demand better

accuracy in daily banking services. More specifically these sorts of services are creating

distinctions in terms of delivering “superior customer service” in between the foreign banks and

the 1st generations domestic private banks like PBL.

Assuring comfortable working environment:

Lack of some basic working facilities are always been a problem for PBL general employees.

So the recommendation would be, the top management should immediately increase the

maintenance facilities.

Implication of a proper performance evaluation:

A regular performance evaluation not only allows the top management to understand the

current progression of the overall employees but also it motivates the overall workforce. So the


recommendation is the top authority of PBL should employ such a performance evaluation

method (like written & viva exams during the promotion period among the selected candidates)

which will give proper recognition to the dedicated employees and also will help the

management to identify the overall loopholes of the existing workforces.

Increasing participation of research and development unit more actively:

Research and development take a very impotent roll in management decision making more

accurately. PBL should conduct both the Qualitative and the Quantitative research for identify

and solve problems like employee turnover, customer dissatisfaction, new demands and wants,

technological up-gradation required, new service development etc.

Development of the existing marketing policies:

The existing marketing policy adopted by PBL is not so updated in contrast with other 3rd

generation private commercial bank .The recommendation would be they must construct a

feasible marketing plan regarding their newly launched services which will be able to reach

towards the existing & as well as new potential customer’s concerns. For instance they could

broadcast attractive advertisement through the Print & Electronic media in such a way that, it

would be persuasive to their targeted customers. They also should focus on the web based

publicity too. Apart from these the management of PBL must need to be aware regarding their

competitor’s marketing strategy.


7.0 Conclusion

There are a number of nationalized and foreign banks operating their business operations in

Bangladesh. The PBL is one of them. For the future planning and succession in terms of

achieving “The Vision” within the ongoing competitive environment, this report could be treated

as a guideline up to some extent. Bank always contributes towards the economic development of

a country. PBL, compared with other banks are contributing more by investing most of their

funds in important projects for the national economic progression. Apart from that, PBL has

always played its’ leading role in socio-economic development of our country. Besides its’

traditional function such as deposit mobilization, deployment of fund in trade, commerce,

industry, agriculture, import & export business, outward and inward remittance, also being a

promising pioneer of all the Bangladeshi commercial private bank, the PBL has always given

lead from the front.


Appendix

Figure 1

Figure 2


Appendix

Figure 3

Figure 4


Appendix

Figure 5

Figure 6


Appendix

Figure 7

Figure 8


Appendix

Figure 9

Figure 10


Appendix

Figure 11


Appendix

Figure no: 12


Appendix

Figure no: 13


Appendix

Figure no: 14


Appendix

Figure15

Figure 16


Appendix

Figure 17


Acronyms

BB Bangladesh Bank

PBL Pubali Bank Limited

CC Cash Credit

C & F Clearing & Forwarding

CIB Credit Information Bureau

IBCA Inter Branch Credit Advice

IBCT Inter branch Credit Transaction

IBDA Inter Branch Debit Advice

IRC Import Registration Certificate

LIM Loan against Imported Merchandise

LATR Loan against Trust Receipt

MBM Masters in Bank Management

OBC Outward Bills for Collection

PAD Payment against Document

SOD Secured Overdraft

SWIFT Society for Worldwide Inter bank Financial Telecommunication

TIN Tax Identification Number


Bibliography

Basudevan, S.V., Theories of Commercial Banking, Reading Materials on Theory & Practice of Banking (B-101), Bangladesh Institute of Bank Management (BIBM), 2000.

Rose Peter. “Commercial Bank Management”, Third Edition, Irwin McGraw-Hill Publisher, 1996.

Others

Diary-Diary has been maintained regularly to record all the activities of practical orientation.

Pubali Bank Limited, Annual Report 2010.

Pubali Bank Limited, Financial Transaction’s Abstract.

Website

www.pubalibangla.com

Internship Report

Education

Transcript of Internship Report