Deposit Schemes of Southeast Bank

Deposit Schemes of Southeast Bank

A close review on Dhanmondi Branch

Introduction

A Country has lots of financial institutions for having the financial backbone of the country’s economics. Banking Sector is one of them. A bank is a financial institution as well as an intermediary that accepts deposits and helps those deposits into lending activities either directly by loaning or through capital markets. Southeast Bank is one of them. It links the customers who have capital deficits and customers who have surpluses. It also plays an important role in price level in country by buying and selling the bills of exchange.

Background of the study

I choose the topic as advised by the Southeast Bank “Analysis of Deposit Schemes of Southeast Bank” to prepare a comprehensible report. This report has been made on the information of Hammond Branch of this bank. With the growing competition among different commercials banks as to how the banks run its banking operation & how customer’s service can make more attractive as the expectation of the customers has been increasing day by day. Now they concentrated their attention towards diversification of their product for better performance & existence. For the above picture Southeast Bank Limited, one of the leading commercial banks, focus on the improvement of the customers service by introducing different kind of deposits. This study helps to know the nature of functions of various types of deposit products.

Objectives of the Study

Primary Objective: The primary objective of this study is to gain practical knowledge of the related field as a part of the partial requirement of BBA program.

Secondary Objective:

  • To know the performance of deposits sector last three (3) months
  • To know the procedure of collection deposits
  • To evaluate the present condition of deposits

Significance of the Study

Collection of deposit is an important sector of any bank. This study helps me to know the function of various types of deposit and the ways bank collects its’ deposit from their clients. The authority of SEBL can use this report for decision making. This study assists to observe the present problem and also helps them to take necessary initiative for further development and improvement for ensuring its service to the customer.

Methodology of the Study

This study aims to gather the experience in the work place regarding the deposit sectors. To prepare the report following sources are utilized.

Primary Sources

The primary data are collected from the customers and bank stuffs from the branch.

Formal interview method is used to collect the primary data.

Secondary data:

For preparing this report I have used some information from the following sources:

  • Annual report
  • Corporate head office
  • The company websites

Introduction of Southeast Bank Limited:

Southeast Bank Limited is a listed Bank under private sector established under the field of bank Company Act, 1991 and Incorporated as a Public Limited Company under Companies Act, 1994 on March 12, 1995. The Bank started commercial banking operations effective from May 25, 1995 during this short span of time the Bank had been successful to position itself as a progressive and dynamic financial institution in the country. The Bank had been widely acclaimed by the business community, from small entrepreneur or large traders and industrial conglomerates, including the top rated corporate borrowers for forward-looking business outlook and innovative financing solutions. Thus within this 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 with vision. Presently, it has thirty four branches in operation. The emergence of Southeast Bank Limited has been an important event in the financial sector of Bangladesh. Southeast Bank Limited has been awarded license by the Government of Bangladesh as a Scheduled Bank in the private sector.

SEBL’s Vision

To be a premier banking institution in Bangladesh and contribute significantly to the national economy is the vision of Southeast Bank Ltd.

SEBL’s Mission

  • High quality financial services with slate of the art technology.
  • Fast & accurate customer service.
  • Sustainable growth strategy
  • Follow ethical standards in business.
  • Steady return on shareholders’ equity.
  • Innovative banking at a competitive price.
  • Attract and retain quality human resource.

SEBL’s Core Values

  • Integrity
  • Respect
  • Fairness
  • Harmony
  • Team spirit
  • Courtesy
  • Commitment
  • Service Excellence
  • Insight and Spirit
  • Enthusiasm for Work
  • Business Ethics

SEBL’s Corporate Slogan

“A Bank with Vision”

SEBL’s Organizational Structure

The organizational structure of Southeast Bank Limited is quite horizontal were each person reports to only one person which refers to a very group-working environment for example. One Executive Vice President is the head of branch one First Vice President (Operation Manager) and the in Charges of credit and foreign exchange department directly report to the EVP. The Operation Manager controls the general banking, cash, accounts and computer department.

Branch Profile

Organizational Overview of SEBL, Dhanmondi Branch:

Dhanmondi is an important place & now it is one of the busiest places in Dhaka city for business purpose. In Dhanmondi, SEBL launched its branch in 18th November 1998. This branch located in House#23 (new), Road# 16 (new)! 27 (old), Dhanmondi R/A, Dhaka.

Departments of Dhanmondi Branch:

SEBL, Dhanmondi Branch mainly has three Departments:

  1. General Banking Department
  2. Investment Department
  3. Foreign Exchange Department

Under General banking department the sections are:

  1. Cash counter
  2. Front desk
  3. FDR section
  4. Clearing
  5. Accounts

Products of the SEBL, Dhanmondi Branch:

This Branch offers different types of deposit products to its customers. Besides this, it also offers:

  • Clearing House
  • Open BOA/C
  • Pay order
  • Remittance Business
  • Western Union Money Transfer Services
  • SWIFT service
  • Locker service
  • ATM service
  • Working Capital Finance
  • Overdraft (OD)
  • Project Finance
  • Syndicated Loan
  • Packing Credit
  • Loan against Export Bill
  • Small & Medium Enterprise (SME) Banking

DEPOSIT SCHEME:

Deposit schemes are one kind of transaction which is used for safekeeping money. Bank deposits are made to deposit accounts at a banking institution. The holder has the right to withdraw any deposited funds. The “deposit” itself is a liability owed by bank to the depositor.

Types of deposit schemes:

  • Current Deposit: Current Deposit account is a transactional account where there is no restriction on number of transactions in the account. It can be opened for individuals and business concerns including non-profit organizations.
  • Fixed Deposit Receipt: Fixed Deposit Receipt account offers the customers the opportunity to invest a fixed amount for a fixed period at a fixed rate of interest. The customers have the option to re-invest their funds both principal and interest amount on maturity and the interest amount being paid into their CD or SB accounts.
  • Double Benefit Scheme account is a time specified scheme for clients where the deposited will be doubled on maturity.
  • Special Notice Deposit account is an interest bearing deposit where advance notice of 7 to 30 days required for amount withdrawal. SND A/C is opened by firms, corporate financial institution.
  • Millionaire Deposit Scheme Account is a time specified monthly deposit scheme for clients where the deposited money will become one million on maturity

What is deposit?

Money placed into a banking institution for safekeeping. Bank deposits are made to deposit accounts at a banking institution, such as savings accounts, checking accounts and money market accounts. The account holder has the right to withdraw any deposited funds, as set forth in the terms and conditions of the account. The ‘deposit” itself is a liability owed by the bank to the depositor (the person or entity that made the deposit). And refers to this liability rather than to the actual funds that are deposited.

Overview of deposit products of SEBL

A deposit account is a banking account, at a banking institution that allows money to be deposited and withdrawn by the account holder. These transactions are recorded on the bank’s book and the resulting balance is recorded as a liability for the bank and present the amount owed by the bank to the customer. Bank invests those depositors’ amount and earns profit that’s run its banking business. Like others, SEBL can’t imagine their banking business without deposit. It is their most important activity as a commercial bank to collect deposits from the customers.

Requirements for opening deposit

Applicants must satisfy the following documentation requirements:

  • Photocopy of Citizenship, Certificate / Passport / National I.D. Card / Driving License.
  • Two copies of recent passport size photograph duly attested by the introducer.
  • Cheque on Self or Cash deposit;
  • Photograph of Nominee; In case of minor nominee, a copy of the birth certificate and photograph required;
  • Personal Information Form;
  • TIN Certificate

Different Types of Deposit Products:

Current Deposit (CD) Account

Current Deposit (CD) Account is a transactional account where there is no restriction on number of transactions in the account.

Major Features –

  • Unlimited transactions are allowed.
  • No withdrawal notification required.
  • Nominal service charge.
  • Any branch banking facility (Cash withdrawal and deposit from any branch)

Eligibility for Current Deposit Account:

  • CD Account can be opened both for Individuals and Firms/Corporate! Autonomous Bodies etc.
  • CD Account can be opened both for resident and non – resident Bangladeshi Nationals.
  • Age bar for Personal CD Account: 18 years or above.
  • Single/Joint account can be opened.
  • Minor account can be opened under the supervision of his / her / their guardian.
  • Account can be opened in the name of Trust I Club / Association I Societies / Non – Trading Concerns.

Savings Bank (SB) Account

Savings Bank (SB) Account is designed for individual savers who want to save a small part of their income which may be used in the near future and also intend to have some profitable returns on such savings. They can deposit a small amount and can withdraw whenever they desire but the total numbers of withdrawals over a period of time are limited.

Major Features –

  • Bank pays attractive interest.
  • Personalized MICR Cheque Book is available.
  • Nominal service charge.
  • Any branch banking facility (Cash withdrawal and deposit from any branch).
  • Nomination facility is available to nominate beneficiary for account proceeds.

Fixed Deposit Receipt (FDR) Account

Fixed Deposit Receipt (FDR) Account offers the customers the opportunity to invest a fixed amount for a fixed period at a fixed rate of interest. The customers have the option to re-invest their funds both principal amount and interest amount on maturity or principal amount and the interest amount being paid into their SB or CD accounts.

Major Features –

  • Money can grow with attractive interest rate with flexible tenure.
  • Automatic renewal facility at maturity.
  • Loan facility against FDR Account to meet urgent financial needs.

Type of FDRs

Fixed Deposit Receipt (FDR) Account

  • FDR one (1) month
  • FDR three (3) month
  • FDR six (6) month
  • FDR one (1) year
  • Senior Citizen FDR one (1) year

Multimillionaire Gold Deposit Scheme (MGDS) Account

Customer can invest for contriving long term financial benefit through Multimillionaire Gold Deposit Scheme. In this scheme customer will deposit a fixed monthly installment for a specific period and will get Tk.50 lac at a time after maturity. This deposit scheme has 4 types of duration- l0 years, 12 years, l4years, and l6years.

Major Features –

  • Deposit on monthly installment basis;
  • Attractive rate of interest;
  • MGDS can be opened by Individual, Non-resident Bangladeshi including dual citizen and corporate bodies.
  • Any Bangladeshi Citizen of 18 years and above is eligible to open MGDS
  • Joint MGDS can be opened.

Millionaire Deposit Scheme (MDS) Account

Millionaire Deposit Scheme (MDS) Account is a time specified monthly deposit scheme for clients where the deposited money will become one million on maturity. In this scheme customer will deposit a fixed monthly installment for a specific period and will get Tk.10 lac at a time after maturity. This deposit scheme has 3 types of duration- 4years, 6years, and 8 years.

Major Features –

  • Deposit on monthly installment basis
  • Attractive rate of interest
  • Account can be opened at any working day of the month
  • Monthly installment can be deposited in advance
  • An account can be transferred from one branch to another branch of the bank
  • Allowed to open more than one MDS Account for different amount at any branch of the Bank;
  • MDS Account can be opened both for Individual and Corporate bodies.
  • Only Resident Bangladeshi National is allowed to open MDS Account.
  • Age bar for opening of Personal MDS Account is 18 years or above.
  • Single/Joint account can be opened.
  • Account can be opened in the name of minor. In that case his/her legal guardian will operate the account.

Super Double Benefit Scheme (SDBS) Account

Super Double Benefit Scheme Account is a time specified deposit scheme for clients where the deposited money will be doubled on maturity.

Major Features –

  • Amount to be deposited TK 100000 or it’s multiple.
  • Deposited amount will be doubled in 3 years.

Pension Savings Scheme:

Clients are offered Pension Savings Scheme to save their hard earned money every month for a secured future.

Major Features –

  • Loan of Maximum 80% against the lien of the PSS amount deposited can be availed.
  • Clients have to pay the Installment Amount by 15th day of a month.
  • Advance Installment can be provided.
  • Installment amount can be given from any branch of this bank
  • A Person of 18 years of age and above having a sound mind can open the account.
  • A person can open more than one PSS account for any amount at any branch of the Bank in such case separate form should be filled in.
  • The account can be opened at any working day of the month.

Monthly Savings Scheme (MSS) Account

Monthly Savings Scheme (MSS) Account a time specified monthly deposit scheme for clients. Against their monthly installment the customers can get a profit on their total deposited amount after maturity period.

Major Features –

  • Loan of Maximum 80% against the lien of the MSS amount deposited can be availed.
  • Can close the account before maturity
  • Account can be opened in the name of individual or in joint names.
  • Only Resident Bangladeshi National is allowed to open MSS Account.
  • A Account can be opened at any time of the month

Conclusion

Dhanmondi Branch has earned a great reputation that it does its banking activities perfectly among the all branches of SEBL in Bangladesh. This branch is much more structured compared to any other branches operating in Bangladesh. It always tries to find out new and innovative idea for their future improvement.

Findings of the study:

From the above work, this study finds some data which express the comparative position of deposit products of SEBL.

  • Mostly businessmen use current deposit account for their business purpose. In December, political conflict occurred in our county that hampered their business activities. So, the growth rate of current deposit account becomes fall in December.
  • The survey customers think that opening of savings bank account needs small amount of money. That’s why; its growth rate becomes stable.
  • Most of the clients of SEBL are educated. They know how to find out the rate of return. The interest rate of FDR three (3) month and FDR six (6) months are slightly difference. If customer deposit in FDR three (3) month, they will get more interest than FDR six (6) months. So, growth rate of FDR three (3) month is high and FDR six (6) months is low. On the other hand, In December the rate of return of FOR six (6) months and FDR one (1) year is same. So, clients highly prefer FDR six (6) months than FDR one (1) year that shown through their growth rate.
  • The growth rate of MGDS ten (10) years becomes negative. This scheme cannot attract to the customers. The growth rate of MGDS twelve (12) Years fall in February but rise in December because marketing management works hard to improve this.
  • The growth rate of MDS four (4) years, MDS six (6) years and MDS eight (8) years is unstable. Marketing management fail to understand their clients about the importance of these schemes.
  • SDBS is a new scheme of this branch. Mostly people don’t know about this scheme. That’s why; its growth rate is ups and down.

Recommendation

Base on the findings, some policy implications are found which are represented as suggestion to SEBL, Dhanmondi Branch, Dhaka. These are as follows:

  • The political conflict does not lasting for a long time. So, SEBL has to invest their deposited amount in various sectors to earn profit that will help to raise interest rate of return.
  • This bank should think about their ATM service. They can spread their ATM booths across the country.
  • This bank has to think about salary structure to motive their employees
  • This branch should increase manpower because it is the busiest branch.
  • This branch should follow some advertisement strategy. They can telecast attractive advertising in the media for attention to the customers
  • This branch should apply more strategy to know their customers’ expectation and their enquiries about the products.
  • The authority should hire more dynamic personnel, who are able to explain the feature of deposit products to their clients.
  • This branch should take the initiative for arranging workshop, seminar conference and training session frequently or monthly or at least quarterly basis. It enhances their stuffs’ skill which will help them handling the challenges of competitive banking business.
  • The major part of total earning of this branch depends on the deposit sector. So, it should establish a research and development cell for the purpose of analysis.