Internship Report on Customer Satisfaction on new products and Performance Analysis

Executive Summary: National Bank Limited started its journey as a private commercial bank on on March 28, 1983 but the first branch at 48, Dilkusha Commercial Area, Dhaka started commercial operation on March 23, 1983.

The whole working process of Foreign Exchange Branch, National Bank Ltd is divided into 3 sections- (i) General Banking section, (ii) Investment/Credit Section, (iii) Foreign Exchange Section. This report has been presented based on observation from general banking section, which is consisted of various functions. There are various section in this department like dispatch section, accounts opening, cash management, remittance section, clearing, credit card, loan and advance, western union money transfer, and accounts section. Account opening is the gateway for clients to enter into business with bank. It is the foundation of banker-customer relationship. Cash management section of any bank plays vital role in general banking department because it deals with the most liquid assets. Remittance means transferring of fund through different instruments other than cheque. Accounts Department is called as the nerve Center of the bank. In banking business, transactions are done every day and these transactions are to be recorded properly and systematically as the banks deal with the depositors’ money. National bank Ltd. signed an agreement with the Western Union Financial services, USA in 1993. In this report I have briefly discussed all sections of general banking. NBL focused on all key areas covering capital adequacy, maintaining good asset quality, sound management, satisfactory earning and liquidity.

 1.1 Introduction

We are living in global village now. Cultural, political, competitive, and economic differences among countries create barriers for companies that want to operate abroad. But information technology makes the world smaller. Over the past ten years banking system becomes accustomed to accepting the rapid pace of changes in term of product and services. Changes such as computerized banking, consumer credit, automated tellers etc, have been introduced. Money deepening increased over time as the marketers become competitive and more funds were channeled through the system.

Globalization is a combination or much freer trade in goods and services combined with free capital movements. The study on credit risk related with globalization. Globalization is not mere trade liberalization and capital movement; rather it is about growing public awareness. The world knows what is happening in the field of development and politics. The world economy has witnessed speeding tip in the process of globalization – the broadening and deepening of international inter-relationships in trade and investment over the last decade and a half world trade growth has accelerated since the mid-1980s, outpacing the growth of world output and Foreign Direct Investment (FDI) flows to developing countries have increased significantly. The most important causes of globalization are in short technological change and liberalization of national and international trade policies.

 1.2 Origin of the Report

As a mandatory requirement of the Bachelor of the Business Administration (BBA) program under Department of Business Administration, The University of Asia Pacific, this report entitled – “General banking: A Study on National Bank Limited” – is a connived depiction of the three month long internship program at the National bank Limited, Foreign Exchange Branch.  The organization attachment started on 11th October, 2011 and finished on 11th January, 2012. My internship supervisor at The University of Asia Pacific ,Shamsad Ahmed, Adjunct Professor duly approved it. The report will definitely identify how the corporate world really works and it will help to apply theoretical knowledge in the practical life.

 1.3 Objective of the Report

The main objective of education is to acquire knowledge. To acquired knowledge ultimately we must do some practical application in addition to theoretical knowledge. Through this report, I tried my level best to present my practical knowledge as well as to find out-

 General:

        To observe the general banking and advance operation of NBL, and their services.

        To get an overall practical knowledge concerning banking activities as a financial institution.

        How a bank operates their activities in different areas being a single organization.

        What a bank is doing for Bangladesh to develop national economy.

 Specific:

        Presentation of an introduction to the organization- National Bank Limited as a whole.

        To get overall idea about the general banking of NBL.

        To recommend necessary steps to overcome such problems faced by the NBL.

        To identify the major areas of inefficiency.

 1.4 Methodology of the Study

 How close to the issue-under-study can a researcher reach depends, to a great extent, on how methodically she/he can approach the issue. Although necessity of issuing data and information has been the prime determinant of the quality, accuracy and worthiness of a research project, in these days of abundant availability of data and information this necessity has only been acute, methodology is the pathfinder of working out a good research paper. For the implementation of the study I have worked on “National Bank Limited”. In order to make the Report more meaningful and presentable, two sources of data and information have been used widely.

 1.5 Sources of data

In order to make the Report more meaningful and presentable, two sources of data and information have been used widely.

primiry data

The “Primary Sources” are as follows-

Face-to-face conversation with the respective Executives & Officers of the Bank.

        Informal conversation with the clients.

        Practical work exposures form the different desks of the various departments of the Branch covered.

        Relevant file study as provided by the officers concerned.

 The “Secondary Sources” of data and information are-

        Annual Reports of National Bank Limited.

        Periodicals published by Bangladesh Bank.

 1.6 Limitations of the Study

There are some limitations in the study. I have been faced some problems during the study which I am mentioning them. The time period of the study is very short. I had only 3 (three) months in my hand to complete this report, which was not enough. So I could not go in depth of the study.

To prepare this report I have faced the following limitations:

Library management and functioning is not satisfactory at many places and much of the time and energy of us are spent in tracing out of Books, Journals, and Reports etc.

 There is also the problem that many of our libraries are not able to get copies of old and new Acts/Rules.

 2.1 Evolution of Word Bank

The word bank originated from Italian word “Banca”. Banca means long tool. In ancient time Italian Jews merchant used to do business of lending money by sitting on the tools. It is assumed that the word “bank” derived from the word Banca. To meet the expense of war of 1171 one type credit certificate was launched in Italy at an interest rate of 5% it was called as Monte in Italian language and Banke in German language then German language was widely used in Italy. As a result the word Banke gradually changed to the word Banca from which the word Bank originated.

2.2 The Emergence of Modern Banking

The linguistics and etymologists suggests an interesting story about banking origins. Both the old French word “Banque” and the Italian word Banca were used centuries ago to mean a bench or moneychangers table. This describes quite well what historians have observed concerning the first bankers, who lived more than 2000 years ago. They were money changers, situated usually at table or in a small shop in the commercial district, aiding travelers who came to town by exchanging foreign coins for local money or discounting commercial notes for a fee in order to supply merchants with working capital. The first bankers probably used their own capital to fund their activities, but it was not long before the idea of attracting deposit and securing temporary loans from wealthy customers became a source of bank funding. Loans were then made to merchant’ shippers and landowners at rates of interests low as 6 percent per annum to as high as 48 percent a month for the riskiest ventures. Most of the early bank was Greek in origin. The banking industry gradually spread outward from the classical civilizations of Greece and Rome into northern and western Europe. The early bank in Europe was places for safe keeping of valuable items (such as gold and silver bullion) as people came to fear loss of their asset due to war, theft, or expropriation by government. When colonies were established in North and South America, old world banking practice were transferred to the new world.

 2.3 Development of Banking in Bangladesh

Since early British rule, the history of banking in Bangladesh territory shows that the traditional trade-networks developed before the banks invaded rural areas. And the banking services have slowly flourished in Bangladesh territory. Even today, in many places, moneylenders provide credit services. Small shopkeepers and businessman use informal credit at high interest rate. Traditional mahjong’s money lending business gradually declined due to expansion of bank and the micro credit programs of NGOs, cooperative banks and government agencies.

 2.4 Public Sector Banks

During the liberation war in 1971, the economic, political, and social system including the banking system was severally damaged. At that time, all big and medium financial institutions except two small banks had their head office in the West Pakistan. The non-beagle owners and managers of the financial establishments that operated in East Pakistan had abandoned them. After independence in 1971, the new government had to take over management and ownership of all such institutions. The banks Nationalization Order 1972 was issued to nationalize banks and financial institutions (except those incorporated abroad) in order to control chaos in the field of ownership, party bureaucracy, the intelligentsia, and pressure group. By several orders the government of Peoples Republic of Bangladesh created-

Six nationalized commercial banks (NC

1. Sonali Bank2. Agrani Bank
3. Janata Bank4. Rupali Bank
5. Pubali Bank6. Uttra Bank
7. One industrial bank (BSB)8. One agricultural bank (BKB)
9. One industrial development financial institution (BSRS)

 The banks and financial institutions which originated during the Pakistan period and were merged, and renamed and functioning after independence of Bangladesh. In the year 1983, the government allowed private sector to participate in the banking business. The Pubali Bank and the Uttara Bank were denationalized in 1985, due to non profitability. This action reduced the number of NCBs to four. Such restructuring of public sector banks was in order to play their role in industry, agriculture, export, self – employment etc.

 2.5 Private Commercial Banks

Taking advantage of the liberalization policy of the government regarding participation of private sector in the banking business, a number of private banks were established in after 1983. With the emergence of private banks in Bangladesh, a competitive situation in the sector has been created. Now there are 48 commercial banks in Bangladesh which are enlisted with Bangladesh Bank, among them four (4) are NCBs, five (5) are specialized banks, twenty nine (29) are private commercial banks and ten (10) are foreign commercial banks. The emergence of private banks has added a new dimension to the banking system in Bangladesh. The private commercial banks show a steady growth in terms of number of branches, deposit and advances.

 3.1 History and Heritage

National Bank Limited has its prosperous past, glorious present, prospective future and under processing projects and activities. Established as the first private sector bank fully owned by Bangladeshi entrepreneurs, NBL has been flourishing as the largest private sector Bank with the passage of time after facing many stress and strain. The members of the board of directors are creative businessmen and leading industrialists of the country. To keep pace with time and in harmony with national and international economic activities and for rendering all modern services, NBL, as a financial institution, automated all its branches with computer networks in accordance with the competitive commercial demand of time. Moreover, considering its forth-coming future, the infrastructure of the Bank has been rearranging. The expectation of all class businessmen, entrepreneurs and general public is much more to NBL. At present we have 145 branches under our branch network. In addition, our effective and diversified approach to seize the market opportunities is going on as continuous process to accommodate new customers by developing and expanding rural, SME financing and offshore banking facilities.

The emergence of National Bank Limited in the private sector was an important event in the banking arena of Bangladesh. When the nation was in the grip of severe recession, the government took the farsighted decision to allow the private sector to revive the economy of the country.  Several dynamic entrepreneurs came forward for establishing a bank with a motto to revitalize the economy of the country. National Bank Limited was born as the first hundred percent Bangladeshi owned Bank in the private sector. From the very inception, it was the firm determination of National Bank Limited to play a vital role in the national economy. We are determined to bring back the long forgotten taste of banking services and flavors. We want to serve each one promptly and with a sense of dedication and dignity.

The then President of the People’s Republic of Bangladesh Justice Ahsanuddin Chowdhury inaugurated the bank formally on March 28, 1983 but the first branch at 48, Dilkusha Commercial Area, Dhaka started commercial operation on March 23, 1983. The 2nd Branch was opened on 11th May 1983 at Khatungonj, Chittagong.
At present, NBL has been carrying on business through its 130 branches and 15 SME / Agri Branches (total 145 service locations) spread all over the country. Since the very beginning, the bank has exerted much emphasis on overseas operations and handled a sizable quantum of home bound foreign remittance. It has drawing arrangements with 415 correspondents in 75 countries of the world, as well as with 37 overseas Exchange Companies located in 13 countries. NBL was the first domestic bank to establish agency arrangements with the world famous Western Union in order to facilitate quick and safe remittance of the valuable foreign exchanges earned by the expatriate Bangladeshi nationals. This has meant that the expatriates can remit their hard-earned money to the country with much ease, confidence, safety and speed.
NBL was also the first among domestic banks to introduce international Master Card in Bangladesh. In the meantime, NBL has also introduced the Visa Card and Power Card. The Bank has in its use the latest information technology services of SWIFT and REUTERS. NBL has been continuing its small credit programmes for disbursement of collateral free agricultural loans among the poor farmers of Barindra area in Rajshahi district for improving their livelihood.

NBL focused on all key areas covering capital adequacy, maintaining good asset quality, sound management, satisfactory earning and liquidity. National Bank, has now acquired strength and expertise to support the banking needs of the foreign investors. Since its inception, the bank was aware of complying with Corporate Social Responsibility. In this direction, we have remained associated with the development of education, healthcare and have sponsored sporting and cultural activities. During times of natural disasters like floods, cyclones, landslides, we have extended our hand to mitigate the sufferings of victims. It established the National Bank Foundation in 1989 to remain involved with social welfare activities. The foundation runs the NBL Public School & College at Moghbazar where present enrolment is 1140. Besides awarding scholarship to the meritorious children of the employees, the bank has also extended financial support for their education. It also provided financial assistance to the Asiatic Society of Bangladesh at the time of their publication of Banglapedia and observance of 400 years of Dhaka City.The Transparency and accountability of a financial institution are reflected in its Annual Report containing its Balance Sheet and Profit & Loss Account. In recognition of this, NBL was awarded Crest in 1999 and 2000, and Certificate of Appreciation in 2001 by the Institute of Chartered Accountants of Bangladesh.

The bank has a strong team of highly qualified and experienced professionals, together with an efficient Board of Directors who play a vital role in formulating and implementing policies.

3.2 Vision of National Bank Limited

Ensuring highest standard of clientele services through best application of latest information technology, making due contribution to the national economy and establishing ourselves firmly at home and abroad as a front ranking bank of the country have been our cherished vision.

3.3 Mission of National Bank Limited

Mission is to continue our support for expansion of activities at home and abroad by adding new dimensions to our banking services which have been ongoing in an unabated manner. Alongside, we are also putting highest priority in ensuring transparency, account ablility, improved clientele service, as well as our commitment to serve the society through which we want to get closer to the people of all strata. Winning an everlasting seat in the hearts of the people as a caring companion in uplifting the national economic standard through continuous upgradation and diversification of our clientele services in line with national and international requirements is the desired goal we want to reach.

3.4 Slogan

“A Bank for performance with potential”

 3.5 Logo

national

3.6 Commitments 

serviceing bank

 3.7 Objective of national bank limited

The objectives of National Bank are mentioned below:

        Offering quick and improved clientele services through application of modern information technology.

        Playing an important role in the national progress by including improved banker- customer relationship.

        Ensuring highest possible dividend to the respected shareholders by making best use of their equity.

        Pushing the policy of nurturing balanced growth of the bank in all sectors.

        Consolidating our position in the competitive market by introducing innovating  banking products.

   Ensuring highest professional excellence for our workforce through enhancement of  their work efficiency, discipline and technological knowledge

        Expanding the bank’s area of investment by taking part in syndicated large loan financing.

        Increasing finances to small and medium enterprise sector including agriculture and agro based industries, thus making due contribution to the national economy.

        Upholding the image of the bank at home and abroad by pushing dynamic and time befitting banking activities.

        Ensuring maintenance of capital adequacy and highest profit through successful implementation of the Management Core Risk Program.

 3.8 Business Ideology

Alongside providing the best services to the clienteles, patronizing and taking part in social development activities as well as making due contribution to growth of the national economy.

 3.9 Strategies of National Bank Limited

        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 credit and other banking needs and monitor their perception towards our performance in meeting those and update requirement.

        To review and update policies procedures and practices to enhance the ability to extend better services to customer.

        To train and develop all employs and provide them adequate resources so that customer needs can responsibility addressed.

        To promote organizational effectiveness by openly communicating company plans, policies, practices and procedures to all employers in a timely fashion

        To cultivate a working environment that fosters positive motivation for improved performance

        To diversify portfolio both in the retail and whole sale market.

        To increase direct contact with customer in order o cultivate a closer relationship

 3.10 Business Goal

To patronize, sponsor and encouraged games and sports, entertainment and other socio-economic activities alongside providing the best services to the client.

3.11 Corporate Culture

Employees of NBL share certain common values, which helps to create a NBL culture.

        The client comes first

        Search for professional excellence

        Openness to new ideas& new methods to encourage creativity

        Quick decision making

        Flexibility and prompt response

        A sense of professional ethics

 3.12 Growth and Development of NBL

The NBL carries out all traditional functions, which a commercial bank performs such as mobilization of the deposit, investment of funds, financing export and import business, trade and commerce and industry.

The banking sector in the country faced different problems thought the year. Even through the board and management never stopped its effort to maximize wealth, which is reflected by 163.12 percent profit growth in 2010, highest ever in the last 15 years.

The bank earned the 9616.14 million revenue in 2010 as interest, income from investment and commission & exchange earning, which who Tk. 7006.63 in the provision year. As a result the total operating profit rode to Tk. 8941 million in 2010 from Tk.3398 million in the previous year.

 3.13 Branches of NBL

NBL, which was started at Dilkusha Branch on March 23rd, 1983, was the first major commercial Bank. In Bangladesh operating throughout the country as well as the age of the bank is only 25 years .During this period it has established total 145 branches over the country and made smooth network inside the country as well as thought the world. The number of branches as well as territory wise is mentioned in the table.

Area wise branches
Division areaNumber of branches
Dhaka division54
Chittagong 32
Rajshahi division20
Khulna division 24
Sylhet division17

Table: Branches of NBL

 3.14 Management Hierarchy of NBL

hrm

3.15 Functions of National bank Ltd:

                Some general function of National Bank are given below-

        To maintain all types of deposit Accounts.

        To make investment.

        To conduct of reign exchange business.

        To conduct other Banking services.

        To conduct social welfare activities.

        To work for continues business innovation and improvements.

        To bui1d up strong-based capita1ization of the country.

        To ensure the best uses of its creativity, well disciplined, well manages and perfect growth.

 3.16 Sports and Cultural Activities

Since its inception, NBL has been playing a pioneering role in sponsoring sports and games in the country. NBL was the sponsor of Metropolis Football League and Senior Division Football League last year. Besides, NBL extended substantial patronization to Bangladesh Olympic Association and Bangladesh volleyball Federation in 2003.The Bank never hesitates to extend its helping hands to the people as in the days of crisis so also in the exuberant happy moments of cultural events.

 3.17 Market and target customers

Due to the predecessor Company’s involvement financing sector of the country, the bank inherited its top corporate customers. Moreover the bank is involved in import trade financing. Bulk importers of consumer durable, food gains industrial raw materials are its customers. The bank has financed in textile and apparels sectors. The bank has a trade of choosing customer from diversified groups. The bank has first class customers in the construction sectors involved in high-rise building, heavy construction and roads and high way construction.

4.1 Products & Services Offered By NBL

Special Deposit Scheme
Monthly Savings Scheme
Double Benefit Scheme
Millionaire Income Scheme
Credit Card
Retail Banking
Western Union Money Transfer
Project Finance
Investment Banking
24 hours banking : NBL Power card facility
Remittance & collection
Import & Export handling & financing
Corporate Banking
Loan Syndication
Deposit Schemes
Traveler’s Check
NBL Housing Loan
Small Housing Loan
Lease finance
Small Business Loan
Festival small Business Loan

4.2 Special Deposit Scheme

“Add to your monthly income, add to your solvency.”

For most of the people on fixed income the opportunity to supplement their monthly earning is a golden one. And NBL Special Deposit Scheme gives a customer just that.

Under this scheme, customers can deposit money for a term of 5 years. The deposited money is fully refundable at the expiry of the term. At the same time, during the term period they can enjoy a monthly profit corresponding to their deposited amount. As for instance, under this scheme a deposit of Tk.55, 000/- gives a monthly income of Tk.500/-.

Deposited AmountMonthly Benefit
Tk. 55,000/-Tk. 500/-
Tk. 1,10,000/-Tk. 1,000/-
Tk. 1,65,000/-Tk. 1,500/-
Tk. 2,20,000/-Tk. 2,000/-

Table: Special Deposit Scheme

 4.3 Monthly Saving Scheme

“See your small savings grow with NBL”

This scheme is specially designed for the benefit of the limited income group members. This helps to accrue small monthly savings into a significant sum at the end of the term. So, after the expiry of the term period the depositor will have a sizeable amount to relish on.

Monthly Installment Return After 3 Years 9.00%Return After 5 Years 9.25Return After 8 Years 9.50%
500/-20,627/-37,896/-70,849/-
1000/-41,255/-75,791/-1,41,697/-
2000/-82,510/-1,51,583/- 2,83,394/-
3000/-1,23,765/-2,27,374/-4,25,091/-
4000/-1,65,020/-3,03,166/-5,66,788/-
5000/-2,06,274/-3,78,957/-7,08,485/-
10000/-4,12,549/- 7,57,914/-14,16,970/-

Table: Monthly saving Scheme

 4.4 Double Benefit Scheme 

 Dreams come true. National Bank Limited now offers Double Benefit Scheme for it’s customers. The benefits under this scheme shall become double after 6 years.

 Benefits

       Deposit of Tk.50,000/- and its multiple maximum of Tk 50,00,000/- shall be acceptable under this scheme.

       A person is allowed to open more than one DBS Account.

       The account may be opened either singly or jointly.

       All DBS account holder shall be offered with free Life Insurance Policy under this scheme.

 4.5 Millionaire Income Scheme

 Under this scheme one will deposit a fixed amount on monthly basis for 5, 7 or 10 years and on maturity he/she will be just a millionaire.

Benefits

       Deposit of fixed monthly amount for 5, 7 or 10 years. Deposit size will be based on tenure. Upon maturity the depositor will get Tk. 10,00,000/-.

       A person is allowed to open more than one MIS Account.

       The account may be opened either singly or jointly.

InstallmentTenureOn maturity

12,450/-

5

10,00,000/-

7,870/-

7

10,00,000/-

4,550/-

10

10,00,000/-

 

General Banking

General banking department is the heart of all banking activities .All other departments are linked with this department. It also plays a vital role in deposit mobilization of the branch. National Bank Limited provides different types of accounts, locker facilities, special types of saving scheme and flexibilities of remittance under general banking.

This department performs the general function of banking. In National Bank Ltd. for performing the operation of this department a good number of people are allotted. The general banking department of National Bank (Foreign Exchange Branch) consists of the following section:

graph

In General Banking I have worked on Dispatch Section, Accounts opening Section, Clearing Section, Credit Card section, Western Union Money transfer Section and Accounts Section.

 5.1. Dispatch Section

Dispatch division operates the function of dispatching the intimation letter to the client, IBCA, IBDA, and OBC to the other banks for internal transaction with bank. The officer engaged in the dispatch division maintains two types of register books to entries for record of these documents particulars.

These two types of register books are:

  1. Inward mail registers.
  2. Outward mail registers.

 5.2 Accounts Opening Section

Account opening is the gateway for clients to enter into business with bank. It is the foundation of banker-customer relationship. This is one of the most important sections of a branch, because by opening accounts bank mobilizes funds for investment. Various rules and regulations are maintained and various documents are taken while opening an account. A customer can open different types of accounts through this department. Such as:

Step 1: The account should be properly introduced by any one of the following:

 An existing Current Account holder of the Bank.

 Officials of the Bank not below the rank of an Assistant officer.

 A respectable person of the locality well known to the manager/Sub-Manager of the Branch concerned.

Step 2: Receiving filled up application in bank’s prescribed form mentioning what type of

Account is desired to be opened.

 Step 3

 The form is filled up by the applicant himself / herself.

 Two copies of passport size photographs from individual are taken; in case of firms photographs of all partners are taken.

 Applicants must submit required documents

 Application must sign specimen signature sheet and give mandate.

 Introducer’s signature and accounts number – verified by legal officer.

 Step 4: Authorized Officer accepts the application.

 Step 5: Minimum balance is deposited – only cash is accepted.

 Step 6: Account is opened and a Cheque book and pay-in-slip book is given

 5.3 Cash Management Section

Cash management section of any bank plays vital role in general banking department because it deals with the most liquid assets. The proper management of this section entails overall effectiveness of any bank. NBL has a very equipped cash section.

This section is responsible for the following function:

       Receipt of deposit.

       Making payment to the customers.

       Management of vault of the branch.

5.4 Remittance Section

Remittance means transferring of fund through different instruments other than cheque. Remittance includes both inland and foreign remittance. In this section, only the local remittance is described.

There are two types of remittance:

  1. Inward remittance.
  2.  Outward remittance.

 5.4.1. Inward remittance

It consists of the following:

  • Pay Order payable.
  •  Demand Draft payable.
  • Telegraphic Transfer payable.

 5.4.2. Outward remittance

The outward remittance includes the following:

  • Pay Order issue.
  • Demand Draft issue.
  • Telegraphic Transfer issue.

 5.5 Deposit Section

Deposit is the lifeblood of a bank. From the history and origin of the banking system, deposit collection is the main function of a bank.

5.5.1. Accepting deposits:

The deposits that are accepted by NBL like other banks may be classified into two types. These are:

a)      Demand Deposits

b)      Time Deposits

 a) Demand deposits:

These deposits are withdrawn able without notice, e.g. current deposits. National Bank Limited accepts demand deposits through the opening of, -

  • Current account
  • Savings account
  • Call deposits from the fellow bankers

 b) Time deposits:

A deposit which is payable at a fixed date or after a period of notice is a time deposit.

National Bank Limited accepts time deposits through Fixed Deposit Receipt (FDR),Short Term Deposit (STD) and Bewared Certificate Deposit (BCD) etc. While accepting these deposits, a contract is done between the bank and the customer. When the banker opens an account in the name of a customer, a contract arises between them. This contract will be valid one only when both the parties are competent to enter into contract. As account opening initiates the fundamental relationship & since the banker has to deal with different kinds of persons with different legal status, National Bank Limited officials remain very much careful about the competency of the customers.

 5.6 Clearing Section

Cheques, Pay Order (P.O), Demand Draft (D.D.) Collection of amount of other banks on behalf of its customer are a basic function of a Clearing Department.

5.4.1. Clearing:

Clearing is a system by which a bank can collect customers fund from one bank to another through clearing house.

5.4.2. Clearing House:

Clearing House is a place where the representatives of different banks get together to receive and deliver cheque with another banks.

5.4.3. Types of clearing house:

There are two type of clearing house.

        Normal clearing house

        Same day clearing house

 Normal clearing house:

1st house: 1st house normally stands at 10 am to 11 am

2) 2nd house: 2nd house normally stands after 3 p.m. and it is known as return house.

  Same day clearing house:

1) 1st house: 1st house normally stands at 11 a.m. to 12 p.m

2) 2nd house: 2nd house normally after 2 p.m. and it is known as return house.

 5.7 Credit Card Section

Carrying of cash is not so safe in today’s world. There is always a chance of losing or hijacking of cash. On the other hand, the desire to purchase any desired item of one may not be fulfilled for the want of cash at the time of that willingness. To remove these problems, credit card has been introduced which is very popular to face the mentioned problems.

 5.7.1. Meaning of Credit Card

It is a card (usually plastic) that assures a seller that the person using it has a satisfactory credit rating and that the issuer will see to it that the seller receives payment for the merchandise delivered. NBL is the first local bank, which introduced credit card & MasterCard in Bangladesh in both local and international market in 1997. MasterCard captured 35% of credit card through the world. However present market analysis reflects that a large number of people whose average income ranges in above Tk.l0000 are using the credit card. Credit card division is continuing their all-possible efforts for the participation in the globalize Master Card Program. The number of users of the credit cards is increasing day by day.

During the year 2006 the bank has got a profit of Tk.124.25 million from credit card business. NBL also has got the licenses from international brand Visa Card and very soon, it will be launched in the country.

 5.7.2. Types of Credit Card

National Bank Limited offers mainly two type of credit card according to the geographical area. These are Local credit card and International credit card. According to the level of income the local and international credit cards are divided into two categories viz. Gold card and Silver card.

 These types of credit cards are described below:

(a)   Local credit card:

Local credit card is valid only in Bangladesh. Outside Bangladesh, the card is invalid. Local card are two types. They are Gold local card and Silver local card. The card limit of gold local card is Tk.50000 to Tk. 100000 and silver local card is below Tk.50000.

(b)   International Credit Card:

International credit card is valid mainly outside Bangladesh. But for the payment of roaming facilities for Grameen phone, cardholders can use international credit card in Bangladesh. International credit cards are of two types. These are gold international credit card and silver international credit card. The card limit of gold international credit card is $ 2000 to $4000 and silver international credit card below $2000.

 5.8. Loans & Advances Section

This is the survival unit of the bank. The reason is that until and unless the success of this section, the survival is a big question. This is the main earning unit of the bank. Banks accept deposits from the depositors in condition of providing interest to the depositors in condition of providing interest to them. Now the question is how bank provides interest to their clients. The simple answer is – interest from advances. The bank provides interest on the borrowers because:

1)      To earn interest from borrowers and give depositors the interests get back. The rest are the profit of the bank.

2)      To accelerate economic development.

3)      To meet the interest groups.

 5.9. Western Union Money Transfer Section

National bank Ltd. signed an agreement with the Western Union Financial services, USA in 1993. Millions of people from different parts of the world are sending money with confidence to their near and dear through the western union has the most modern technology for remitting money within quiets possible time from any part of the world through their more than 170000 representatives in 190 countries and regions has established a unique money transfer system with western union of. Through an online computer system units can be instantly of the world. 56.17 million dollar was remitted to this bank through this organization during the year 2003.NBL brought a substantial amount of foreign exchanges in to the country through the western union in 2003, which is 44% higher than that of 2002.

The western union is a globally reputed name in money transfer services and data exchange forever 150 years. Western union has continued its tradition of possessing the latest technology and handling wide scale remittances.

Payment of remittance by expatriate Bangladeshis through the western union are being made at 100 branches of NBL. These branches are connected with the on-line computer system of the western union.

 5.10 Accounts section

Accounts Department is called as the nerve Center of the bank. In banking business, transactions are done every day and these transactions are to be recorded properly and systematically as the banks deal with the depositors’ money. Improper recording of transactions will lead to the mismatch in the debit side and in the credit side. To avoid these mishaps, the bank provides a separate department; whose function is to check the mistakes in passing vouchers or wrong entries or fraud of forgery. This department is called as Accounts Department. If any discrepancy arises regarding any transaction this department repot to the concerned department.

Besides these, the branch has to prepare some internal statements as well as some statutory statements, which are to be submitted to the Central Bank and the Head Office. This department prepares all these statements.

Workings of this department:

               Recording the transactions in the cash book.

               Recording the transactions in general and subsidiary ledger.

               Preparing the daily position of the branch comprising of deposit and cash.

               Preparing the daily Statement of Affairs showing all the assets and liability of the branch as per General Ledger and Subsidiary Ledger separately.

               Making payment of all the expenses of the branch.

               Recording inters branch fund transfer and providing accounting treatment in this regard.

               Preparing the monthly salary statements for the employees.

               Make charges for different types of duties.

               Preparing the budget for the branch by fixing the target regarding profit and deposit  so as to take necessary steps to generate and mobilize deposit.

               Checking of Transaction List.

               Recording of the vouchers in the Voucher Register

               Packing of the correct vouchers according to the debit voucher and the credit vouch

 In General Banking I have worked on Dispatch Section, Accounts opening Section, Clearing Section, Credit Card section, Western Union Money transfer Section and Accounts Section.

 5.1. Dispatch Section

Dispatch division operates the function of dispatching the intimation letter to the client, IBCA, IBDA, and OBC to the other banks for internal transaction with bank. The officer engaged in the dispatch division maintains two types of register books to entries for record of these documents particulars.

These two types of register books are:

  1. Inward mail registers.
  2. Outward mail registers.

 5.2 Accounts Opening Section

Account opening is the gateway for clients to enter into business with bank. It is the foundation of banker-customer relationship. This is one of the most important sections of a branch, because by opening accounts bank mobilizes funds for investment. Various rules and regulations are maintained and various documents are taken while opening an account. A customer can open different types of accounts through this department. Such as:

Step 1: The account should be properly introduced by any one of the following:

 An existing Current Account holder of the Bank.

 Officials of the Bank not below the rank of an Assistant officer.

 A respectable person of the locality well known to the manager/Sub-Manager of the Branch concerned.

Step 2: Receiving filled up application in bank’s prescribed form mentioning what type of

Account is desired to be opened.

 Step 3

 The form is filled up by the applicant himself / herself.

 Two copies of passport size photographs from individual are taken; in case of firms photographs of all partners are taken.

 Applicants must submit required documents

 Application must sign specimen signature sheet and give mandate.

 Introducer’s signature and accounts number – verified by legal officer.

 Step 4: Authorized Officer accepts the application.

 Step 5: Minimum balance is deposited – only cash is accepted.

 Step 6: Account is opened and a Cheque book and pay-in-slip book is given

 5.3 Cash Management Section

Cash management section of any bank plays vital role in general banking department because it deals with the most liquid assets. The proper management of this section entails overall effectiveness of any bank. NBL has a very equipped cash section.

This section is responsible for the following function:

       Receipt of deposit.

       Making payment to the customers.

       Management of vault of the branch.

5.4 Remittance Section

Remittance means transferring of fund through different instruments other than cheque. Remittance includes both inland and foreign remittance. In this section, only the local remittance is described.

There are two types of remittance:

  1. Inward remittance.
  2.  Outward remittance.

 5.4.1. Inward remittance

It consists of the following:

  • Pay Order payable.
  •  Demand Draft payable.
  • Telegraphic Transfer payable.

 5.4.2. Outward remittance

The outward remittance includes the following:

  • Pay Order issue.
  • Demand Draft issue.
  • Telegraphic Transfer issue.

 5.5 Deposit Section

Deposit is the lifeblood of a bank. From the history and origin of the banking system, deposit collection is the main function of a bank.

5.5.1. Accepting deposits:

The deposits that are accepted by NBL like other banks may be classified into two types. These are:

a)      Demand Deposits

b)      Time Deposits

 a) Demand deposits:

These deposits are withdrawn able without notice, e.g. current deposits. National Bank Limited accepts demand deposits through the opening of, -

  • Current account
  • Savings account
  • Call deposits from the fellow bankers

 b) Time deposits:

A deposit which is payable at a fixed date or after a period of notice is a time deposit.

National Bank Limited accepts time deposits through Fixed Deposit Receipt (FDR),Short Term Deposit (STD) and Bewared Certificate Deposit (BCD) etc. While accepting these deposits, a contract is done between the bank and the customer. When the banker opens an account in the name of a customer, a contract arises between them. This contract will be valid one only when both the parties are competent to enter into contract. As account opening initiates the fundamental relationship & since the banker has to deal with different kinds of persons with different legal status, National Bank Limited officials remain very much careful about the competency of the customers.

 5.6 Clearing Section

Cheques, Pay Order (P.O), Demand Draft (D.D.) Collection of amount of other banks on behalf of its customer are a basic function of a Clearing Department.

5.4.1. Clearing:

Clearing is a system by which a bank can collect customers fund from one bank to another through clearing house.

5.4.2. Clearing House:

Clearing House is a place where the representatives of different banks get together to receive and deliver cheque with another banks.

5.4.3. Types of clearing house:

There are two type of clearing house.

        Normal clearing house

        Same day clearing house

        Normal clearing house:

1) 1st house: 1st house normally stands at 10 am to 11 am

2) 2nd house: 2nd house normally stands after 3 p.m. and it is known as return house.

 Same day clearing house:

1) 1st house: 1st house normally stands at 11 a.m. to 12 p.m

2) 2nd house: 2nd house normally after 2 p.m. and it is known as return house.

 5.7 Credit Card Section

Carrying of cash is not so safe in today’s world. There is always a chance of losing or hijacking of cash. On the other hand, the desire to purchase any desired item of one may not be fulfilled for the want of cash at the time of that willingness. To remove these problems, credit card has been introduced which is very popular to face the mentioned problems.

 5.7.1. Meaning of Credit Card

It is a card (usually plastic) that assures a seller that the person using it has a satisfactory credit rating and that the issuer will see to it that the seller receives payment for the merchandise delivered. NBL is the first local bank, which introduced credit card & MasterCard in Bangladesh in both local and international market in 1997. MasterCard captured 35% of credit card through the world. However present market analysis reflects that a large number of people whose average income ranges in above Tk.l0000 are using the credit card. Credit card division is continuing their all-possible efforts for the participation in the globalize Master Card Program. The number of users of the credit cards is increasing day by day.

During the year 2006 the bank has got a profit of Tk.124.25 million from credit card business. NBL also has got the licenses from international brand Visa Card and very soon, it will be launched in the country.

 5.7.2. Types of Credit Card

National Bank Limited offers mainly two type of credit card according to the geographical area. These are Local credit card and International credit card. According to the level of income the local and international credit cards are divided into two categories viz. Gold card and Silver card.

 These types of credit cards are described below:

(a)   Local credit card:

Local credit card is valid only in Bangladesh. Outside Bangladesh, the card is invalid. Local card are two types. They are Gold local card and Silver local card. The card limit of gold local card is Tk.50000 to Tk. 100000 and silver local card is below Tk.50000.

(b)   International Credit Card:

International credit card is valid mainly outside Bangladesh. But for the payment of roaming facilities for Grameen phone, cardholders can use international credit card in Bangladesh. International credit cards are of two types. These are gold international credit card and silver international credit card. The card limit of gold international credit card is $ 2000 to $4000 and silver international credit card below $2000.

 5.8. Loans & Advances Section

This is the survival unit of the bank. The reason is that until and unless the success of this section, the survival is a big question. This is the main earning unit of the bank. Banks accept deposits from the depositors in condition of providing interest to the depositors in condition of providing interest to them. Now the question is how bank provides interest to their clients. The simple answer is – interest from advances. The bank provides interest on the borrowers because:

1)      To earn interest from borrowers and give depositors the interests get back. The rest are the profit of the bank.

2)      To accelerate economic development.

3)      To meet the interest groups.

 5.9. Western Union Money Transfer Section

National bank Ltd. signed an agreement with the Western Union Financial services, USA in 1993. Millions of people from different parts of the world are sending money with confidence to their near and dear through the western union has the most modern technology for remitting money within quiets possible time from any part of the world through their more than 170000 representatives in 190 countries and regions has established a unique money transfer system with western union of. Through an online computer system units can be instantly of the world. 56.17 million dollar was remitted to this bank through this organization during the year 2003.NBL brought a substantial amount of foreign exchanges in to the country through the western union in 2003, which is 44% higher than that of 2002.

The western union is a globally reputed name in money transfer services and data exchange forever 150 years. Western union has continued its tradition of possessing the latest technology and handling wide scale remittances.

Payment of remittance by expatriate Bangladeshis through the western union are being made at 100 branches of NBL. These branches are connected with the on-line computer system of the western union.

 5.10 Accounts section

Accounts Department is called as the nerve Center of the bank. In banking business, transactions are done every day and these transactions are to be recorded properly and systematically as the banks deal with the depositors’ money. Improper recording of transactions will lead to the mismatch in the debit side and in the credit side. To avoid these mishaps, the bank provides a separate department; whose function is to check the mistakes in passing vouchers or wrong entries or fraud of forgery. This department is called as Accounts Department. If any discrepancy arises regarding any transaction this department repot to the concerned department.

Besides these, the branch has to prepare some internal statements as well as some statutory statements, which are to be submitted to the Central Bank and the Head Office. This department prepares all these statements.

Workings of this department:

               Recording the transactions in the cash book.

               Recording the transactions in general and subsidiary ledger.

               Preparing the daily position of the branch comprising of deposit and cash.

               Preparing the daily Statement of Affairs showing all the assets and liability of the branch as per General Ledger and Subsidiary Ledger separately.

               Making payment of all the expenses of the branch.

               Recording inters branch fund transfer and providing accounting treatment in this regard.

               Preparing the monthly salary statements for the employees.

               Make charges for different types of duties.

               Preparing the budget for the branch by fixing the target regarding profit and deposit  so as to take necessary steps to generate and mobilize deposit.

               Checking of Transaction List.

               Recording of the vouchers in the Voucher Register

               Packing of the correct vouchers according to the debit voucher and the credit vouch

National Bank Limited is one of the forerunners of first generation private sector commercial banks in Bangladesh. It has strong network of dynamic banking system rendering services through its 106 branches spreading all over the country. In 2008 the bank recorded healthy progress in all areas of business. This performance at a glance for the last five years is given as follows;

 6.1 Total Assets

cash flow

Table : Total assets

From the year of 2006 we can saw that the total asset of NBL was 46796.04 whish was lowest from the year of 2007. And we also saw that the total assets of NBL unexpectedly shrink in the year of 2008 and grew up in the year of 2009which was Tk. 91931.63 million. This grow remain continue the next year of 2010 which was Tk. 134732.31 million.total asst

Comments:

The total assets of the bank 2006 grew up by 46796.04.27 million to 134732.31 Tk. million in 2010. So we can say that the performance of NBL is in a good positive.

 

6.2 Deposits

deposit

Comments:

The deposit base of the bank registered a growth of 33.37 percent in the reporting year over the last year and stood at Tk.102, 471.83 million. Expansion of branch network, competitive interest rate and deposit products contributed to the growth. The customers of the bank were individuals, corporations, financial institutions, government and autonomous bodies etc.

6.3 Loans & Advances

graph 1

Comments:

National Bank Limited formulated befitting credit risk management criteria and strategies for creation of balanced lending mix in it’s portfolio both for short and long term with the bottom line objective to ensure risk adjusted rate of return in it’s credit transactions. Loan and advances in the year 2010 registered an increase by 41.26% to BDT 92,003.56 million from BDT 65,129.29 million in 2009. During the year 2010, the credit expansion mainly was in bilateral project finance, syndicate finance, export, import and trade finance as well as SME and Agri finance. The bank as a matter of policy prioritizes to make lending in the thrust sectors of the economy so as to make distinctive value addition in overall economic uplift of the country.

7.1 Conclusion

 Proper financial system of a country can contribute towards the development of that country’s economy. In our country Bangladesh, banks have a leading power to its financial system. For this reason, the banks should have a potential role to make our financial system. In this arena, private commercial banks are playing a vital role in the development of our economy. But Govt. and Bangladesh Bank play a crucial role to the private commercial banks through imposition of deposit restriction, lending role and other banking operations. In recent years of banking business, National Bank Limited has shown better performance comparing with other first generation banks.

We expect the National Bank Limited may hold its prospect in future and can contribute a vital role in the socio-economic prospective. It is a great pleasure for me to have practical exposure to National Bank limited, Foreign Exchange Branch. Without practical knowledge, it is not possible for me to compare the academic knowledge and practical knowledge. Since the time is very limited to learn the all the sectors of a bank. If the duration of internship can be increased, then it is possible to learn the entire banking activities mere properly. To complete in the environment of advancing technology and faster communication the NBL should depend more heavily on the quality service and information technology. NBL should be connected through wide area network. So that all the informational and service can be accessed from any branch of the world. No doubt about it that NBL achieve4 superior position in our banking industry but to cope with customer NBL should think how to make its service proactive. To compete with other Banks operation in Bangladesh, NBL should introduce easier way for faster processing of credit analyses. As a leading bank Of Bangladesh, NBL contributes in the business with promising future. I can hope so that NBL can spread their business with increasing various scheme and other utility services.

 7.2 Recommendation

 As per earnest observation some suggestions for the improvement of the situation are given below:

   To attract more clients NBL has to create a new marketing strategy, which will increase the total export import business.

   Effective and efficient initiatives are necessary to recover the default loans.

    Long term training very much required for the officers.

     New investment sector is booming rapidly. NBL should identified those untapped areas of business and invest in those sector such as Gas plant, condensed milk project, ship breaking etc.

    It is noted that “delay in service” is one of the problems faced by the clients. Attempts should be made to straighten the banking procedure.

     Proper communication needs to establish with clients.

     Proper incentive system should be introduced to motivate bank employees for rendering better services.

     If NBL increases number of employee they can provide more satisfactory service to the customers.

      NBL should increase the number of PCs with updated hardware and software

   To create better client the bank should increase the amount of consumer loans in a short-term basis.

 The bank can provide a loan, which may be student loan. Though in other countries many bank provide this facility. This may encourage the students to come forward do something for the economy.

 Maximum number of the loan is provided in the long-term industrial loans. Bank’s clients are also limited. So, they can’t serve the economy of the country that much. So, they should diversify their loans more in agriculture, new industries etc for better economic growth of the country.

 Improve and maintain a consistent relationship with customers, especially at retailing.

  In a competitive financial market, their products & services need to focused more on customers’ needs then simply offering what the customers are offering.They should do more marketing activities to improve their presence in the minds of the target market and also the potential target market. As we see that, Media coverage of DBL is not so strong. To attract new clients, they should go for mass media coverage.  NBL should focus on their branding and advertisement. They should go for social welfare development. I believe these steps will be helpful to improve the performance of National Bank Limited and the financial sector of Bangladesh.

 

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