Background of the Study
Any academic course of the study has a great value when it has practical application in the real life. Only a lot of theoretical knowledge will be of little importance unless it is applicable in the practical life. So we need proper application of our knowledge to get some benefit from our theoretical knowledge in our practical life. Building a strong base of practical knowledge is possible through thesis. When theoretical knowledge is obtained from a course of study, it is only the half way of the subject matter. Thesis implies the full application of the methods and procedures through rich acquired knowledge of the subject matter can be fruitfully applied in our daily life, such a procedure of practical application is known as thesis. The case study is titled “An Overview of General Banking on Standard Bank Limited” As a student of BBA, this study will be more significant in my practical life, 1 have worked at Nawabpur Road Branch of Standard Bank Limited to complete the internship program as an academic requirement.
General Banking is the oldest banking in the banking history. The service of General Banking is provided for general people, because it is the base of banking activities. This made the researcher interested to study in this area. The General Banking Division represents the execution aspect of the General Banking management process for the business. It defines the practices in terms of process, competency, productivity, accuracy, and benchmarking & control for a business firm to ensure that the standards are met & complied with. As a result, it is imperative that due diligence is not compromised while increasing the volume of applications.
Objective of the study acts as a bridge between the starting point and the go of the study. To illustrate the objectives properly, it is presented into two parts.
Performance of General banking of Standard bank Limited
- To know the major outlines of company profile of SBL.
- To analyze performance regarding deposit mobilization in SBL.
- To know about rendering various banking services of SBL.
- To analyze the profitability performance of SBL.
- To reveal the corporate social responsibility of the SBL.
- To uncover the customer attitude towards SBL.
- To identify the problems hindering the performance of SBL.
- To provide some suggestions for improving performance.
Two types of data used this study:
The Primary sources of data:
- Face to face conversation with the respective officer of the branch.
- Face to face conversation with-the clients.
- Relevant file study as provided by the officers concerned.
The Secondary sources of data:
- Annual Reports of the SBL.
- Periodicals published by the Bangladesh Bank.
- Different books, articles etc. regarding performance analysis operations.
Scope of the work
Although I have completed the internship study on Nawabpur Road Branch of Standard Bank Limited. I have prepared the internship report on the overall performance of Standard Bank Ltd.
Rationale of the study
General banking represents the core of banking operations. Its performance can exert positive impact on the growth of a bank. As such, I have become interested to conduct a study on the performance of Standard Bank Limited. I suppose, the findings of this internship report will provide invaluable inputs for further improvement in the performance of Standard Bank Ltd.
During the internship period, I have gathered valuable experience of conducting a research study. This knowledge and experience may help me in building my professional career. Moreover, the study will also make a meaningful contribution to enrich the literature of general banking performance.
The Origin of Standard Bank Ltd.
Banks are important financial institutions, which play a vital role in the economy of a country. It deals with credit i.e., accepts deposit from the public and advances various loans. The system of banking is very ancient. It was prevalent in India, Greece and Rome. It arose out of the logical fact that people who possessed surplus money deposited them for safe keeping to whom they have confidence, payable after a period of time when the need would arise. The holders of this surplus money soon found out that it was profitable to lend out the money, the provided loans were repaid before the date when the money would be demanded.
The bankers or the holders of the money give sign papers to their depositors as evidence of the deposit money. As people had confidence in the integrity and the solvency of the banker their signed papers would pass from hand to hand in the settlement of transaction. These papers were the origin of notes as people had confidence in the credit of the bankers only, as small proportion of notes/signed papers would be presented for encashment during a period. The later were able to lend out the major portion of their deposits with safety, thus earning a decent profit with other people’s money. As the business landing money became more and profitable, money holders began to offer interest on the money deposited with then at a rate lower than that obtained on loans.
In course of time cheque were adopted and this imparted elasticity to the system. Thus came into existence the system of commercial banking. A bank can be best by its functions, it collects the savings of the public, it gives loans and advances and it creates media of exchanges through cheque. A commercial bank is a dealer in short term credit. In addition to the above, bank performs various other functions.
a) Financing of foreign trade b) agency services, c) general utility services. A bank is a big substations center for liquidity, which takes the deposits from the public and supplies liquidity to the economic system.
To be a modern bank having the object of building a sound national economy and to contribute significantly to the public exchequer.
To be the best private commercial bank in Bangladesh in terms of efficiency, capital adequacy, asset quality, sound management and profitability.
Hierarchy of the Standard Bank Limited
- Board of Directors
- Managing Director
- Additional Managing Director
- Senior Executive Vice President
- Senior Vice President
- Vice President
- Senior Assistant Vice President
- Assistant Vice President
- Senior Executive Officer
- Executive Officer
- Senior Officer
- Junior Officer
Strategies of Standard Bank Limited
The strategies that SBL follows are as below :
- To Manage and operate the Bank in the most efficient manner to enhance financial performance and to control cost of fund.
- To strive for customer satisfaction through quality control and delivery of timely services.
- To identify customer’s credit other banking needs and monitor their perception towards our performance in meeting those requirements.
- To review and update policies, procedures and practices to enhance the ability to extend better services.
- To trail and develop all employees and provide them adequate resources so that customers needs can be responsibly addressed.
- To promote organizational effectiveness by openly communication company plans, policies, practices and procedures to all employees in a timely fashion.
- To cultivate a working environment that fosters positive motivation for improved performance.
- To diversify portfolio both in the retail and wholesale market.
- To increase direct contact with customers in order to cultivate a close relationship between the Bank and its customers.
An Overview of Nawabpur Road Branch
The study has completed at Nawabpur Road Branch, Shahi Bhaban, 106, B.C.C. Road, Thatari Bazar, Dhaka-1203.Which is started on 29th November 2009 with the 5 efficient & responsible employees. There are some efficient and effective bankers workers in this branch, the management of the branch always tries to provide better service to its customer and behave well with them. As a result they have got a huge number of accounts in.
Marketing Aspects of SBL:
The marketing aspects of SBL cover the 7 P’s of marketing. These are:
1. Products and Services Offered By SBL:
Standard Bank Limited has a variety of products offered for the retail customers as well as for corporate clients. The different products and services for retail and corporate clients are given below:- Products for retail clients:
The existing products that are offered by SBL are:
- Current Deposit Scheme.
- Savings Deposit Scheme.
- Short Term Deposit Scheme.
- SRDP Scheme
- Fixed Deposit (FDR).
- Double Income.
- Double Income plus Insurance.
- Sale of Bangladesh Sanchaya Patra, ICB Certificate etc.
- Encashment of different Sanchaya Patra, ICB Certificate etc.
Products for corporate clients:
SBL offered, products for its corporate clients are:
1) Payment Against Document (PAD)
2) Loan against Trust Receipt (LTR)
2. Price Offered by SBL:
Price is the main feature of a service-oriented organization like SBL. But SBL is offering very non-competitively priced products compared to its customers.
|Types of Deposits|
Interest Rate (%per annum)
|Current Account Deposit|
|Short Term Deposit (STD)|
FDR for Any Period (1,3,6 Months & 1 Year)
|FDR for 1 year and above|
|Double Income Plus|
Table: Interest Rate of different types of Deposits. Source: Finance & Accounts Division, SBL.
Interest Rate (% per annum)
|a. Loan to primary products|
|b. Loan to agricultural products|
|2. Large & Medium Scale Industry (Term Loan)|
|a. Up to 5 years|
|b. Above 5 years|
|3. Working Capital|
|b. Other than jute|
|c. Jute trading|
|4. Export Credit|
|a. Jute & jute goods|
|b. Other export|
|5. Other Commercial Lending|
|6. Special Cottage Program|
|a. Special Cottage Industries (Term Loan)|
Table: Rates of Interest on Loans.
SBL has 68 branches all over Bangladeh. 30 of them are located in Dhaka, 16 in Chittagong, 05 in Sylhet, 02 in comilla,14 Khulna& Jessore, 10 in Rajshahi &Rangpur, 02 in Brahmanbaria, 02 in Narayangonj, 01 in Gopalgonj. Most of them are located in the city area. That’s why all die depositors and borrowers are the city dwellers.
SBL’s promotional aspects are under the supervision of die Brand Management Department. Headed by a Senior Vice President, this department looks after the advertisements of SBL’s product, customer’s feedback and increasing die brand image of SBL. SBL has entered into a contract with an advertising agency that Is looking after the advertising activities of SBL. SBL’s logo has also been changed into a more attractive one/ as explained earlier.
SBL desperately needs a strong Brand Image to survive die competitive bank environment. Previously due to lack of attention on the marketing and promotional aspects, SBL’s brand image wasn’t as strong as its competitors and there were no advertisements in the newspapers expect for the recruitment’s. But with the introduction of a new department “Brand Management”, SBL is hoping to boost up its Brand Image.
SWOT is the snap for the internal strengths & weaknesses of a firm & the environmental opportunities & threats facing that firm. SWOT analysis is an easy technique through which managers create comprehensive overview of Company’s strategic situation. By having SWOT analysis, manager can easily keep pace with the new challenge in the forth coming days. A good firm maximizes firms’ strengths & opportunities & minimizes its weakness & threats.
Strength is resource skill or other advantage relative to competitors & the needs of the markets a firm serves or expects to serve.
a) Company Republication
SBL, has already gained reputation in banking industry in this country particularly among the new comers. With in a period of 2years, SBL has already established affirm toting in the banking sector having tendons growth in the profits & deposits.
SBL has been founded by a group of eminent entrepreneurs of the country having adequate financial strength. The sponsors directors belong large industry & conglomerates of the country.
c) Top management
The top management of the bank is also a major strength for the SBL & contributed heavily towards growth & development of the bank. The too management officials all have reputed of banking experience. Skill & expertise.
Weakness is a limitation or deficiency in resources skills or capabilities that seriously impedes a firm’s effective performance. SBL weaknesses are as follows.
a) Advertising & promoting
This is the major set bank for SBL & one of its weakest points. SBL does no pursue on aggressive marketing compared to other banks. It is not in the lime light like other banks. SBL does not have any display boards.
b) Disguised employment
Currently, there are “from bone heads but few hands” and this is related to the problem or reference appointment. There are people who are only drawing salaries at the end of the month but not have a part of contribution towards the organization. On the country, there are people who worked hard but are not appreciated accordingly.
c) Limitation of PC.(STELAR) Bank
PC.(STELAR) Bank is not comprehensive banking software. It is desirable that a more comprehensive banking system should replace PC bank system.
d) Team work
At SBL having Mid level & lower level management. There are no team works. But it is obvious that many jobs are performed in groups of two or three in order to reduce the work load & enhance the process of complication of the job.
SBL can purse a diversification strategy in expanding its current line of business. The management considers options of starting merchant banking or diversifies into leasing& cons odium business by expanding business portfolio in migraine possible for SBL to reduce business risk.
a) Multinational bank
The repaid expansion of multinational bank poses a potential threat to the new private Banks. Due to the booming energy sector, more foreign banks are expected to operate in Bangladesh. Since the foreign banks have spectacular financial strength, it will poses threat to local banks to a certain extent in terms of grabbing the in creative clients.
b) Upcoming banks
The upcoming banks private local banks also pose a threat to the existing commercial Bank more of the local private banks may emerge. If that happens the intensity of competition will rise further & banks will have to develop new strategies to complete the faring banks.
c) Contemporary banks
The contemporary banks of SBL like Dhaka bank, prime bank, one bank, southeast bank. EXIM bank, IFIC bank, Dutch Bangla bank, NCC bank, Eastern Bank, Jamuna bank, UCBL, BRAC are its major rivals. They are carrying out aggressive comparing as well as long time depositors. SBL should recur vigilant absent the steps taken by these banks as these will in turn affect SBL strategies.
Out of three major sections, General Banking is important one. General banking is the head of total banking system. Through this section, bank has to receive and disburse money, to develop banker customer relationship by opening different types of account and providing prompt services to the customers. This department collects money from the depositor and uses these deposits to earn profit.
Functions of General Banking
The functions of general banking department of Standard Bank of Bangladesh Ltd. are as follows:
Maintenance of different types Deposit A/C:
- Saving Accounts
- Current Accounts
- Fixed Deposits
- Short Term Deposits
- Other Saving Schemes
- Receipts & payment of cash.
- Handling transfer transactions.
- Operations of clearinghouse.
- Maintenance of accounts with Bangladesh Bank & other banks.
- Collection of Cheques & Bills.
- Issue and payment of Demand Drafts, Telegraphic Transfers and Payment Orders.
- Maintenance of Safe Deposit Lockers.
- Maintenance of Internal Accounts of the banks.
- Reporting to the Head Office about daily position of the bank.
- Saving record of all transactions in computer.
- Closing and transfer of different types of accounts.
- Keeping good relation with valued customer.
- Providing necessary support to the customers
Sections of General Banking:
During my practical orientation in Standard Bank at Nawabpur Road Branch, it came to the observation that general banking section is divided with five areas. These are:
- Account opening section
- Remittance section
- Bills and clearing section
- Cash section
- Mail receive and dispatch section
Account Opening Section
One of the vital sections under general Banking is the account opening section. Banker-customer relationship begins through this section. Various tasks are performed in this section. Such as:
- Opening of different types of account.
- Issue of checkbook.
- Transfer and closing of account.
- Enquiry of account.
- Checking The Signature of the client.
Various types of account offered by Standard Bank
Standard Bank offers various types of account to its different types of customer .These are as follows:
- Current deposit (CD) account
- Savings bank (SB) account
- Short term Deposit (STD)
- Fixed deposit (FDR)
Savings Bank (SB) Account:
This deposit is intended primarily for small-scale savers. The main objectives of this account, is promotion of thrift. Savings account is meant for those who want to save a certain amount of their income and earn interest on that for future needs. All features are more or less like (hat of CD a/c except for some restriction that is imposed by the bank. Number of withdrawals over a period of time is limited. .This A/C mainly opens on person name. SB account has the following properties:
Opening Amount/ Initial Deposit Tk. 1,000/-
Service Charge (yearly) Tk. 230/-(excluding VAT)
Minimum Balance Requirement Tk. 500/-
Interest rate 5%
- One cannot withdraw money more than two times in a week.
- The withdrawing amount is not to exceed 25% of the total balance.
- If customer withdraws money more than twice in a week than no interest is given to customers on his account
Current Deposit (CD) Account:
A current account is an account, which is generally opened by business people for their convenience. A current account is a running and active account, which may be operated upon any number of times during a working day. There is no restriction on the number & amount withdrawals from current a/c. It does not earn any interest.It has the following properties:
O Amount/ Initial Deposit Tk. 3,000/-
Service Charge (yearly) Tk. 1200/-(excluding VAT)
Minimum Balance Requirement Tk,-1,000/-
- Current a/c may be individual or joint or partnership or can be formed on any name. It provides the following facilities:
- Overdraft facility,
- Other facilities like collection of checks transfer of money, rendering
- Agency and general utility services
Fixed Deposit Receipt (FDR) Account:
In this category are included the deposit with the bank for a fixed period which is specified at the time of making the deposit. Such deposits are therefore called fixed deposits or term deposits. A fixed deposit is repayable on the expiry of a specified period, chosen by the depositor to suit his purpose and to enable him to get back money us and when he needs it. The fixed deposit may be made for 3 months,6 months, 1 year, 2 year or 3 year . As the date of repayment of fixed deposit is determined in advance, the banker needs not keep more cash reserves against it and can utilize such amount more profitably. The banker therefore offers higher rate of interest on such deposits. Fixed deposit has grown in importance and popularity in our country during recent years. When a matured FDR is withdrawn, the principle amount along with the interest amount (deducting 10% tax from the total) is paid to the client
The rate of interest and the terms of the Fixed Deposit receipt are given below:
1 vear & above
Short Term Deposit (STD):
It is a deposit account open by customer where customer deposited money for short period. Customer can draw money after giving short notice, This account holder enjoys the same facilities of CD account including receiving interest on his deposited money. Interest rate of STD is less than the interest rate of SB account. STD account has the following properties:
Opening Amount/ Initial Deposit Tk. 50000
Service Charge (yearly) Tk. 100
Minimum Balance Requirement Tk. 50000
Interest rate 5 %(1 crore to25 crore)
Various types of product offered by SBL Bank:
SBL Bank offers various types of product to its different types of customer. These are as follows:
- SBL Regular Deposit Program (SRDP)
- Monthly Income Scheme (MIS),
- SBL Lakhopati plus program
- Super Savings Scheme (SSS).
- Multi plus Super Savings Scheme (MPSS).
- 5 Lac saving Scheme.
- 10 Lac savings Scheme.
- Double Income Plus(DI+).
- Loan against FDR
- Staff Loan.
SBL Regular Deposit Program (SRDP):
- The name of this scheme is “SBL Regular Deposit Program (SRDP)” and account holder indicates SRDP Account holder.
- An applicant can open SRDP account on his own name, in his/her, spouse’s name or in the name of his/her children. The maximum no. of SRDP account from a single family cannot, exceed live.
- The minimum monthly deposit Will be BDT 300.00(three hundred) and maximum BDT 10,000 (ten thousand). However, initial deposit amount chosen by the applicant at the time of opening of the account cannot be changed later on.
- The tenure of the SRDP would be 3/5/7/10 years at the discretion of the applicant. However, initial tenure chosen by the applicant at the time of opening of the account cannot be changed later on.
- A passport size photograph is required to open the account.
- A passport size photographs of the nominees attested by the SRDP account holder must be attached with the applicant form.
- In case of death of the applicant the relevant account will be elosed. Nominee/Nominees will receive the proceeds of the accounts. If the nominee is a minor, the proceeds of the account will go to the legal guardian of the minor.
- Any benefit from SRDP may come under purview of income Tax or any other levy as decided by Government of Bangladesh.
- Monthly installment will be deposited by 10th of every month. If 10th day remain holiday the installment may be deposited in the next working day.
- In (he event of failure to pay monthly installment on or within ten days of due dates, it will be sole responsibility of the SRDP Account holder to settle the arrear installment(s) before or along with the next deposit due through a written instruction to the Bank, In such ease there will be a penalty of 5% on the installment amount to be paid with subsequent installment.
- If any monthly installment remains unpaid for five consecutive months, the account will be closed automatically and the account will be settled as detailed below:
(in no. years)
|Applied rate of interest|
|Less than 1 year||No interest|
|More than 1 year but less than 3 years||Prevailing interest rate on Savings Account|
|More than 3 year but less than 5 years||Matured value of 3 years and rest as per the prevailing interest rate on Savings Account|
12 In case of premature closer of the account Tk 300.00 (three hundred) will be charged as closing charge.
13. Matured value:
|Installment Amount||Matured Value|
|3 years||5 years|
| 7 years|
| 10 years|
14. If there is any loan in the name of the account holder with Standard Bank Limited, then Standard Bank Limited shall have the right to adjust the loan amount from the deposit, which’, has been deposited by the account holder under the scheme of “SRDP”-
15. SRDP allows availing loan facility up to 80% of deposit amount.
Double Plus Scheme:
In this type of scheme one can invest certain amount of money for certain period of time for receiving a steady return after every certain period of time. Lowest amount of investment is Tk. 1,15,000 and the period of this scheme is 5 years. The amount of money’ invest should be double.
Table showing the income per deposited amount:
Rate of interest 13.50%
Ten (10) Lac Savings Account Scheme:
Savings helps to build up capital and capital is the prime source of business investment in a country. Investment kikes the country towards industrialization, eventually creates wealth. That is why savings is treated as the very foundation of development to create more awareness motivates people to save. SBL Bank offers
Five (05) Lac Savings Scheme:
Under this scheme the amount will be doubled in 11 years term. Compound interest rate is 10.51%. It has the same properties as like as Supers Savings Scheme.
Documents to be obtained for different types of account:
When anyone comes to open an account he has to submit some documents to the banker. Different types of documents need for different customer. Some common documents require for all types of account are:
- Introduction recommendation.
- Specimen signature card.
- Account opening agreement form
- Two copies of Photograph of account holder and two copies of nominee (if any).
- Deposit slips book.
- Cheque-book requisition slip
- Letter of mandate authorizing another person to operate the account on behalf of the account holder.
Certain types of documents are needed for special customers. These are:
Document requires for proprietorship business to open an account are:
- Introducers with account number.
- Valid trade license from City Corporation, Attested copy should be submitted.
- Tax Identification certificate.
- Nationality certificate from local authority.
Documents to be obtained for opening an account of partnership firm are:
- Trades license or board resolution.
- Deeds of partnership signed by all partners.
- Two copies photograph of each partner.
- Partnership resolution signed by all partners to open account.
- Resolution must indicate authorized person who operates the account.
Limited Company Account:
Documents required for Limited Company account to open an account are:
- Memorandum and Articles of Association of Company.
- Resolution of Board of Director.
- Certificate of incorporation.
- Certificate of commencement of business in case of public limited company.
- List of director.
- Two copies of passport size photograph of account operators,
- Others: name director s with signature, minutes of board of director.
Following documents have to be obtained in case of the account of the club or society:
- Up to date list of office bearers.
- Certified copy of Resolution for opening and operation of account
- Certified copy of Byelaw and Regulations/Constitution
- Copy of Government Approval (if registered).
Following documents have to be obtained in case of the account of Cooperative Society:
- Copy of Bye-Law duly certified by the Co-operative Officer.
- Up to date list of office bearers.
- Resolution of the Executive Committee as regard of the account.
- Certified copy of Certificate of Registration issued by the registrar, Cooperative societies.
Non-Govt. College/School/Madrasha/Muktab :
Following documents have to be obtained in case of the account of non-govt. College/school /madrasha/muktab:
- Up-to-date list of Governing Body/Managing Committee.
- Copy of Resolution of the Governing Body/Managing Committee authorizing opening and operation of the account duly certified by Gazetted Officer.
Following documents have to be obtained in case of the account of trustee board:
- Prior approval of the Head Office of SBL.
- Certified copy of Deed of Trust, up to date list of members of the Trustee Board and certified copy of the Resolution of Trustee Board to open and operate the account.
The major function of commercial Banks is mobilization of fund. Other than this, banks provide supplementary services to its clients. Clients need to remit money from one place to another for their business or other purposes. Banks fulfill this need of customers by means of remittance service. Money can be remitted domestically or internationally, which known as local remittance and foreign remittance.
There are three ways of transferring fund domestically. The modes of transferring funds are:
- Pay-Order (PO).
- Demand Draft (DD).
- Telegraphic Transfer (TT).
- Mail Transfer (MT).
Payment Order / Pay Order (P.O)
This is an instrument issued by the branch of a bank for enabling the Customer/Purchaser to pay certain amount of money to the order of a certain person/firm/organization/office within the same clearing house area of the pay order-issuing branch
Table showing the Charge for Pay Order:
|Less than TK. 10,000|
|TK. 5,00,001 above|
Demand Draft (D.D)
This is an instrument through which customer’s money is remitted to another person/firm/organization in outside the clearinghouse area from a branch of one bank to an outstation branch of the same bank or to a branch of another bank (with prior arrangement between that bank with the issuing branch): This is an order instrument in which the issuing branch gives instruction to the payee/drawer branch to pay certain amount of money to the order of certain person/firm/organization. Commission, vat and postage are charged for issuing DD.
Example: – To transfer money from Chittagong to Dhaka
Charge for Demand Draft:
- Minimum amount for a DD is TK. 50.
- Commission is the 0.15% of the DD amount.
- VAT 15% .
Cash section is an important section where cash transactions are made. Cash sections demonstrate liquidity strength of a bank. It is also sensitive as it deals with liquid money.
Maximum concentration is given while working on this section. Tense situation prevails if there is any imbalance in the cash account. There are various systems maintain by cash officer that is under:
- Cash Payment
- Cash Receive
- Evening banking.
The cash department is the riskiest department of the bank. This is the section where tight security is required to avoid any accident. There is a limit to be amount of cash that each counter can carry: carrying of excess cash is avoided for safety reasons. If there is any surplus in the cash then the excess amount should sent to the Bangladesh Bank or if there is any shortage in the cash then the shortage amount should be borrowed by the bank from Bangladesh Bank or from the Head Office or Other Banks,
When clients deposit cash in the bank, the bank officer should follow the following common precaution:
- Check and count the received cash.
- Make sure that the amount in word and number in the deposit slip are same.
- Check the account title and the number.
- Both the deposit slip is in order.
- Depositor’s signature is in the slip.
- Receive seal in the slip is a must.
- Write the domination of the currency at the back of the pay in slip or the credit voucher and affix stamp in the slip/voucher,
- Enter particulars of in slip/credit voucher in the receiving cash officer book.
- At least, send the pay in slip/voucher to the deposit department or to the respective department.
- Deposit slip must be signed by the respective officer.
- Carbon copy of the deposit slip must be handover to the client with proper seal and signature.
Cheques, demand drafts, pay orders, pay slips and debit cash vouchers etc. are received from various departments for payment of cash to customers/payees. Prior payment of , cash it is the officer’s duty to make sure that the cheque/or the instrument has been genuinely passed. The following common precaution is thoroughly practiced before honoring a cheque:
- The branch name in the cheque.
- The date in the cheque is very crucial. Cheques are normally valid for six months and pre-dated cheques are asked to present after the date given.
- Tk in words and figure of the cheque is same.
- Balance in the account is available.
- The specimen card signature and signature in the cheque should match.
- Signature of recipient is obtained on the reverse of cheque.
- In case, where a prior arrangement has been made with the bank, a client may overdraw against a cheque.
Vault Register: This is the book where amount of cash available in the branch is maintained. That is, the amount in the vault register book.
Cash Receive Register: This register keeps record of all incoming cash.
Cash Payment Register: Similar to the cash register book, this books keeps tracks of all outgoing cash, that is all payments.
Cash Position Register: This is the book where cash balance is recorded by counting the notes and coins that are physically available. The balance in this book is compare with the vault register, which should be the same. In case there is an error, then the figures would not match but if no discrepancy is found then anything is to be worried about.
- Money Remittance Register
- Prize Bond Register
- Stamp in hand Register
Cash Section has two Automatic Machine
- Money Counting Machine: With the help of this machine officer can easily count the money. It save time and also provide accuracy.
- Money Detector Machine: This machine helps officer to find out the fake money.
Clearing & Bills Section
Clearing and bills section is an important section of General Banking. This is the section through which branch has to clear it’s inter branch and inter bank transaction. Customers do pay and receive the collecting branch the system is known as IBC.
As far as safety is concerned, customers get crossed cheque for the transaction. As we know crossed cheque cannot be encased from the counter, rather it has to be collected through banking channel i.e. clearing. For example, a client of SBL Bank received” a cheque of another bank, which is located within the clearing range; deposit the cheque in his account at SBL Bank. Now SBL Bank will credit his account and collected it. Though the amount is credited in the customer’s account but he will not get the money until he cheque is honored.
Types of Clearing:
- Outward Clearing: Outward clearing means when a particular branch receives instrument drawn on the other bank within the clearing zone and those instruments for collection through the clearing arrangement is considered as outward clearing for that particular branch.
- Inward Clearing: When a particular branch receives instruments which on them and sent by other member bank for collections are treated as inward clearing.
Clearing House is a place in the Central Bank where different banks come to settle their interrelated liabilities.
Clearing House System
The mechanism of working at a Clearing House in general is us follows:
- Every Rank of the locality, which is a member of (he clearinghouse, prepares Bank-wish list of cheques after receive from customers and drawn on different Banks of the locality.
- An officer, in charge of clearinghouse, goes to the clearinghouse in the morning with the cheques and their list. He delivers the cheques to the officials of the respective banks. Similarly, he also receives the cheques drawn on his Bank from the officials of the other banks.
- The official of each bank computerizes the final balance, payable or receivable by his Bank alter taking into account the various amount of receipt and payment.
- The official return of their respective Dank to meet again in the afternoon to return any dishonored instruments to the officials of the respective Banks.
- The final settlement is effective by the supervisor of the clearinghouse by debiting or crediting, as the case may be, the accounts of the respective Banks as maintained with the clearinghouse.
Outward Bills for Collection (OBC):
Customers deposit cheque, drafts etc. for collection, attaching their deposit slip. Instruments within the range of clearing are collected through local clearinghouse. But the other, which is outside the clearing range, is collected through OBC. Then they will forward the bill to that particular branch. OBC number given the on the forwarding letter.
Charge for OBC:
15% on Commission
|TK. 5,00,000″ Above|
Inward Bills for Collection (IBCA):
In this case bank will work as an agent of the collection bank. The Banch receives a forwarding letter and the bill. Next steps are:
- Entry in the IBCA register, an IBCA number given.
- The instrument is sent to clearing for collection.
- An IBCA is dispatched in this regard.
If dishonored in this case the instrument is returned to the collecting branch along with return Memo indicating the cause of dishonored.
Mail Receive & Dispatch Section:
Banking is the business of correspondence. Lot of mail comes to the bank and dispatch from the branch daily. Lot of my document causes much loss for bank. That is why bank has to record all Mail received and dispatched through the bank.
All mail comes to the bank recorded in this desk. For this reason a register book maintained called inward mail register. A number is given on receiving mail and records particulars of document in the register book.
Before dispatching mail from the bank must record in outward mail register. A number is given on the mail. Destinations, date of dispatch are recorded in that register book.
Loan Products Offered by the SBL:
Generally the clients of SBL enjoy two types of Loan / Credit facilities.
Funded facility includes:
1) Overdraft (Limit can enjoy within 1 year)
Cash Credit (HYPO + Mortgage)
Cash Credit (pledge)
2) Term Loan
Personal Term Loan:
a) Personal secured
b) Personal unsecured
c) Auto loan
d) Staff loan
e) Consumer Credit Scheme (C.C.S.)
Corporate Term Loan:
a) BLC – Bills under Letter of Credit
b) TR- Trust Receipt
c) FBP- Foreign Bill Purchased
d) IBP- Inland Bill Purchased
e) Past Due Loan
Non-funded facility includes:
1) Export L/C
2) Import L/C
3) Back to Back L/C
4) Bank Guarantee
Deposits are invested in Trade, Commerce & Industries in term basis i.e., short, medium & long term.
Deposits come from business, housewives, institutions & small income group etc. who has excess or available money. It may be said that though banks are performing social responsibilities by securing both small & large depositors money & also helping industrial, social & economical development, but like others, prime objective of the institute is maximization it profit by optimization of resources.
Performance analysis is a tool for auditing an organization and its environment. It is the first stage of plan and helps the marketers to focus on key issues. Performance analysis of deposits is for maintaining the organization’s continuous growth measurement. It ensures the effective way of performance regarding deposit mobilization, which enables better performance level.
Highlight of Standard Bank at a Glance
Standard Bank Limited is a fast growing private sector Bank is already at the top slot in terms of quality service to the customers and value addition for the shareholders.
The highlights of financial position for the last 2 years are given below:-
|1.||Paid up capital|
|3.||Capital Surplus (deficit)|
|6.||Total loans and advances|
|7.||Total contingent liabilities and commitments|
|8.||Credit deposit ratio|
|9.||Percentage of classified loans against total loans and advances|
|10.||Profit after tax and provision|
|11.||Amount of classified loans during the year|
|12.||Provisions kept against classified loan|
|13.||Provision surplus (deficit)|
|14.||Cost of fund|
|15||Return on investment (ROI)|
|16||Return of assets (ROA)|
|17.||Incomes from investment|
|18.||Earning per share (Taka)|
|19.||Net income per share (Taka)|
|20.||Price earning ratio (times)|
(source annual report 2011)
Authorized and Paid Up Capital
The Bank has commenced is operation on 3rd June,1999 with an authorized capital of Tk 750 million and paid up capital of Tk 200 million. The authorized capital of the Bank has been enhanced to Tk 8800 million and the paid up capital amounted to 3,172 million as on 31st December,2010 which was Tk 2,644 million as on December 31st, 2009. The total paid up capital Tk 4,061 million in 2011 as compared to Tk 3,172 million in 2010 & authorized capital tk 1500 crore in 2011 as compared to tk 880 crore in 2010.
Performance of the SBL
The bank’s performance was quite appreciable. The bank grows in deposits, advances, in vestment, operating profit, as well as foreign exchange business. The data of last six years (2006- 2011) are given below (in million):
|Loan & Advance|
Source: Annual Report 2011
The amount of operating profit of SBL was increased huge in 2011 by 286.9 crore from 2010 by 277.1 corer. In Nawabpur Road Branch the profit was in 1.2corer in 2010 and the amount of profit was 2.07 corer in 2012.
1) Profit Earning Capacity
|Net Profit Ratio||35.27%||34.35%|
|Return on Total Assets||8.42%||8.50%|
|Time Interest Earned||1.22 times||1.31 times|
|Earning Per Share||31.9||43.15|
Form the above table we see that the profit earning capacity of the bank has decreased from 2010. But some ratios of the profit earning showed a rising trend from the preceding year.
After profit earning, a firm must determine its solvency whether it is capable to pay the debt of the firm.
2) Financial Solvency
|Working Capital Raito||0.101||0.105|
|proprietor Fund to total liabilities||0.09||0.01|
It is found from the above table that the solvency of the bank in 2011 is not as good as it was in 2010. So an improvement is necessary to attain financial solvency.
After financial solvency, a firm has to be efficient enough in management to maintain profit and solvency.
3) Management Efficiency
|Debt Equity Ratio||0.00||0.00|
|Fixed Assets Ratio||0.04||0.03|
|Current Assets to Fixed Assets||25.10||26.67|
It is clearly seen form the above table that management efficiency of the firm increased from the previous year. If this is maintained, then it can increase their profit earning capacity and solvency of the firm.
Net Profit After Taxation
Net Profit (in million)
Percentage of increase
The above picture of net profit after taxation clearly manifests that the bank was able to earn increasing net profit during the, period from 2007 to 2011 with the exception of the financial year 2011. This is quite encouraging and there is a need for further improvement in profit position to enhance the confidence of promoters and investors in bank.
Earning Per Share
An evaluation of the performance of Standard Bank shows that, there is the positive growth in EPS the last four years.
Moreover, the cash increase is more than 662 million and paid up capital also increased by more 885 million in the last. On the other hand, there is increase in the total capital assets, deposits, total loans and advances. profit decreases 1369 million to 1297 million Standard Bank has made provision for the bad loan of more than 245 million which has reduced the total profit and also the earning per share .But it is the one of strength point of Standard Bank for provision the bad loans. It is expected that the profit of 2012 is more than 2011, which is the highest level. Based on the CAMEL rating, the performance of StandardBank is very good which stands at on the A1 grade.
Corporate Social Responsibility of SBL.
Standard Bank, in addition to contributing to economic growth, wants to achieve significant change in the communities. Standard Bank tries to improve community relations to cultivate understanding and credibility. The Bank is internally devoted to maintain Corporate Social. Responsibility in numerous ways, it has excellent track record of support for charitable causes, in 2010 and 2011. Standard Bank has spent Tk.19.88 million as donations for education, health-care, community development, infrastructure development, relief operations etc.
We keep ourselves accountable for the social, environmental and economic impact of our operations. We design our policies and business practices to reflect the highest standards of corporate governance, transparency and social and religious ethics.
CSR program consists of three main dimensions:
a) Contribute t National Economy through financial service & support.
b) Community involvement welfare programs through donations and sponsorships.
c) Employee welfare initiatives
During the year 2010 and 2011 support and donation for the welfare of the mass people as a part of social responsibilities are :
|1.||Donation to the Hon’ble Prime Minister’s Relief Fund|
|2.||Donation towards distressed Army Family members.|
|3||Help to poor people for treatment purpose|
|4||Financial help for marriage ceremony of orphan (girl)|
|5||Educational stipends to poor & meritorious students|
|6||Infrastructure development of national institute (BAB)|
|7||Help to other needy people|
From the above comparison of the two years, the bank gained overall growth in support, guidance, help and co-operation sectors .It is clearly seen that the bank is internally committed to perform corporate social responsibility in numerous ways. Its help to different sectors has been increased from 2011 to 2012.Finally, the bank is expected to reader more help in the social sectors to enhance its goodwill.
The Bank firmly believes in social uplift and wants to carry out social programs systematically and for that end in view, the Board has formed “Standard Bank Foundation” through which such welfare oriented plans will be implemented in the future.
As the general banking activities mainly deal with the mass people, it is very difficult to ensure compliance and pure banking environment. But Standard bank limited is in the level high for providing the best customer service as it aspires to be the most admired financial institution in the country, recognized as a dynamic, innovative and client focused company offering in array of product and services in the search for excellence and to cater an impressive economic value. Nevertheless, it is facing some problems in performing general banking activities, some of which are listed below:
a) Terms and conditions
In case of account opening, terms and conditions are printed on the back of the account opening form. If it is so, applicants open their account being fully unaware of the same.
b) Problems of deposit money for the people
There is a provision of depositing a minimum amount of money at the time of opening account and also maintain a minimum balance all the time. But it is not possible to follow strictly, particularly for financially handicapped customers.
c) Problem for requiring documents
All types of accounts require some documents Sometimes proper documentation cannot be performed due to customer expectation and personal relationship.
d) Unconsciousness to renew trade license
Trade license must be renewed every year by the account holder and a copy should be submitted to the bank branch and it is an obligation for all institutional accounts. But it is usually seen that customers are not so conscious enough to perform his duty. That is why, it is very difficult to collect renewed made license from the customer to maintain compliance.
e) Problems in personal relationship
Letter of thanks is to be sent to the account holder to confirm the authenticity of address of account holder. But it is not followed all the time due to personal relations or to manage the customer any way.
f) Concentrated service
Service is concentrated in few alternatives. No efforts are seen to diversify the offerings.
g) Misuse of office time
Office environment is hampered during first quarter of office time. This problem happened mainly indiscriminate use of cell phone, unnecessary people gathering and exchange of views among them.
h) Failure of depositing installment in time
As SBL transfers all installment of monthly deposit scheme on specific date from respective savings account, it is very difficult to monitor the customer those who failed to deposit the installment in time. Bank may face unexpected situation at the time maturity of those account.
i) Problem of resection
No restriction for other officers of the branch to access to the cash counter.
j) Problem in monitoring transaction profile regularly
As per Bangladesh Bank guidelines, bank has to maintain transaction profile of all clients and update the same at a regular interval. But it is very difficult job to monitor the transaction profile of all clients and update regularly due to manpower shortage.
k) Problem in identification
The bank is bound to take proper identification of depositor and beneficiary of the instruments at the time of on line transaction. But sometime it causes customer dissatisfaction, specially depositor and beneficiary of small amount.
l) Problem for delaying of cheque delivery
Currently, SBL introduced MICR coded cheque to ensure automated clearing house. Three to four working days are required to collect a fresh cheque book as MICR coded cheque book processed centrally from Dhaka. This delay of cheque delivery may result in a great loss to the customer.
Bangladesh’s foreign trade, both imports and exports, receive a considerable amount of assistance from commercial banks and the direct participation of such institutions, a smooth flow of foreign trade has been made possible through various facilities provided from time to time. The assistance is forthcoming in different forms, both fiscal and financial, out of which assistance is of prime importance. Thus, the role of the financial institutions is crucial in promoting exports and import. The commercial banks finance the international trade directly by giving finance help and also by supply to the importers and exporters. The commercial banks finance the international trade direct by giving financial help and also by supplying to the importers and exporters information about foreign buyers and overseas markets through market research.
Commercial banks are playing an important role in financing international trade by providing help to the customers in pre import finance, post import finance and pre export finance, post export finance and also giving support to the importers and exporters for smooth running of their business.
a) In a scarce resource based economy like Bangladesh, economic use of domestically mobilized resources is necessary to ensure growth and development. The foregoing analysis provides evidences that the country’s financial system so for has not been able to provide credit to the export sector that is necessary to allocate resources optimally. In view of the paramount of the export sector, shifting more resources to this sector through banking channel is an urgent need. To achieve these objectives we recommend the following steps;
b) Establishment of a specialized financial institution/bank to cater to the need of the export sector. India has established EXIM Bank for this purpose. We may also consider the establishment of such a bank in the country;
c) Like industrial/agricultural credit program banks may be advised to prepare indicative export credit program to be carried out on yearly basis. For various export oriented activities separate schemes may be introduced;
d) However, to encourage banks to provide credit to the exporters at such a lower rate of interest, arrangements for the subsidy may be made in such a way so that the effective rate of interest comes close to that of the rate applied to the trading loan;
e) Working capital loan for the export-oriented industries must be ensured. Adequate provision should also be made to provide credit of the export oriented production units;
f) The lending institutions should change their approach in providing loan to the export sector. Promotion of export sector should be the guiding principle in extending loan and towards this end friendly relation should be developed with the exporters. This will not only ensure and use of loan but will also help recovery of loan and recycling mobilized resources;
g) Finally, it must be kept in mind that mere setting up of institution or issuance of guidance will not help in improving the situation. Monitoring of export credit through off-site and on-site supervision is urgently needed;
h) Service charges of SBL are higher compare to other rivals. So it should be reduced & competitive ones. For that cause bank has to emphasize on this variable as early as possible;
i) “Procrastination” for loan approval is the main concern for being dissatisfactory. It also hampered the satisfaction of the valued client. That is why necessary steps should be taken as early as possible. We all know “Procrastination is the thief of time”;
j) By considering the clients claim bank should provide the remittance to the concerned client in time & their collection of money will have to be quick enough that they can easily gain customer’s satisfaction;
m) Although most of the customers of SBL are satisfied about consumer credit scheme they are to be expeditious enough to serve.
n) Majority percent of Standard client are eagerly interested in the services that service that SBL offering to wards their potential client. They got A/C’s statement & advice slip in time. For that reason, Bank should provide proper training to the bank employees to develop their best & also for delivering such prompt service. So That they can serve there best & also encourages the client to open an account.
It was great pleasure for me to do my internship program in an esteemed organization like SBL. Though my practical exposure in SBL, Nawabpur Branch for just three months, it provides me a wide range of scope to observe the factions of bank through the cordial assistance of its employers. I had the scope to focus on overall banking system. Honorable Manager Sir helps me as his level best. He shows me the path of a successful banker by practically and theoretically.
The bank should maintain a well-structured communication from upper level to lower level. Each official should be valued and treated as a part of the bank and they must have the privilege to devote themselves for the betterment of services of the bank.
SBL is a company, which has so far shown good performance and holds the strongest position in the banking sector. Overall, the bank must make a positive attempt to be more outward looking in their goals and aware of what is happening.
As per CAMELS (Capital, Assets, Management, Liquidity and Sensitivity) rating 2011 Standard Bank holds 3rd position as a local commercial bank. So, it is to say that Standard Bank Ltd. is a very progressive bank in Bangladesh.
I hope, in spite of my all limitations, this experience of sharing work is with such working environment will help me a lot in professional life.