2.1 An Overview of Uttara Bank Limited.
Uttara Bank is one of the largest and oldest private sector commercial bank in Bangladesh, with years of experience. Adaptation of modern technology both in terms of equipment and banking practice ensures efficient services to clients 209 branches at home and 600 affiliates worldwide create efficient networking and reach capability. Uttara is a bank that serves both clients and country.
2.2 Historical Background of UBL
Uttara Bank Limited is deeply related with the history tradition and living standard of human of the country. This Bank started its operations on 28th January 1965 as a commercial bank by Eastern Banking Corporation, which is interpreting by a private organization. In 1972 the Bank takes this name Uttara Bank. It had been limited company in 1983 that is named Uttara Bank limited. On 21st August 1983 it
2.3 Objectives of Uttara Bank Ltd.
The objectives of UBL are follows:
- Mobilizing deposit from the surplus economic unit to deficit economic unit.
- Cater to all different segments of retails and wholesale customer.
- Being a high quality distributor of products and services.
- Serve the people of the country by providing financial assistance.
- Help the nation in reducing the employment problem by securing services to a large number of people.
- Ensure balanced economic development though out the country.
- To expand business.
- To keep position in the competitive market.
- To contribute in profitability of UBL.
2.4 Features of UBL
The bank is committed to turn all its activities as per council board. UBL through its steady progress and continuous success has earned the reputation of being one of the leading private sector banks of the country. The distinguishing features of UBL are as follow:
- All its activities are conducted on interest banking system according to council board.
- Establishment of participatory banking instead of banking in debtor creditor relationship.
- Investment is made though deterrent modes permitted under council board.
- Investment income of the bank shared with depositors according to a ratio to endure a reasonable fair rate of return on their depositors.
- It aims are to introduce a welfare oriented banking system and also to establish equity and justice in the field of all economic activities.
- It extends economic and financial services to the poor , helpless and height income group of the people for their economic up liftman particularly in the rural areas.
- It plays a vital role in human resource development and employment generation particularly for the unemployed youths.
- Its aim is to achieve balanced growth and equitable development of the country through diversified investment operations particularly in the priority sector and in the less developed.
- It extends cooperation to the poor the helpless and the height income group for their economic development.
2.5 Functions of UBL
The operation of Uttara Bank Limited. Can be divided into three major categories:
2.5.1General banking : it includes:-
a) Mobilization of deposits.
b) Receipts and payment of cash.
c) Handling transfer transaction
d) Operations of clearing house
e) Maintenance of accounts with Bangladesh band and other bank
f) Collection of cheque and bill
g) Issue and payment of Demand Draft, telegraphic transfers and payment order
h) Executing customers standing instructions
i) Maintenance of safe deposit lockers
j) Maintenance of internal accounts of the bank
While doing all the above noted work UBL issue cheques-book, Deposit account opening form, SS card, Ledgers, Cash book. Deposit account ledgers, preparation statement of accounts. Pass Book, Balance of different accounts and calculated profits
UBL offers to open the following account to the depositors:
- Current Account
- Saving Account
- Term Deposit account. (3 month/6month /12 month /36month / 60 month)
- Cash Credit Account.
2.5.2 Foreign Exchange Business
Foreign Exchange Business plays a vital role in providing substantial revenue on the bank income pool.
- Opening letter of credit against commission for importing industrial agricultural and other permissible items under council board.
- Opening letter of credit on the principle of sale, on the principle of under wage earner scheme.
- Handling of export /import document.
- Negotiation of export and import document when discrepancy occurs.
- Financing import under import board.
- Financing to export on profit or loss sharing
- Handling inward and outward remittance.
2.5.3 Other activities
The UBL performs the following task for the welfare of the nation. There are some point which is below:-
- Income generating scheme for the unemployed youth of the nation.
- Monorom sale center for marketing homemade garment, handicraft and other items.
- Education scheme for assisting poor scholar student to case and help them to continue their study.
- Health scheme for fulfillment of health needs of rural people.
- UttaraUniversity was established to extend service to the student.
UTTARA BANK LIMITED
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 DECEMBER 2008
|Interest paid on deposits, borrowings etc||19||2,200,521,205||1,876,351,450|
|Net Interest Income||1,883,766,884||1,121,081,427|
|Income from Investment.||20||784,896,516||921,189,131|
|Commission, Exchange and Brokerage||21||907,895,386||744,994,717|
|Other Operating Income||22||431,106,660||356,650,099|
|Total operating income||4,007,665,446||3,143,915,374|
|Salary and allowances||1,272,357,540||1,158,073,662|
|Rent, taxes,insurance,electricity etc||151,877,811||188,502,215|
|Managing Director’s salary & allowances and fees||6,424,333|
|Directors’ fees and expenses||29||2,264,000|
|Repair, maintenance and depreciation||30||107,256,133|
|of Bank’s property|
|Total operating expenses||1,807,336,918|
|Add: Profit on sale of fixed asset||32||105,289,644|
|Profit before provision||2,305,618,172|
|Provision for loans & advances||33||92,550,000|
|Provision for off balance sheet exposures||34||57,450,000|
|Provision for outstanding unrecognized entries||35||55,000,000|
|Transfer to gratuity fund||–|
|Transfer to benevolent fund||2,500,000|
|Profit before tax||2,098,118,172|
|Provision for Tax||959,600,000|
|Profit after tax||1,138,518,172||409,535,557|
|Retained surplus brought forward||3,196,722|
|Profit available for appropriation||1,141,714,894|
|Issue of bonus share||–|
|Earning per share (EPS)||40||142.55|
The profit and losses are chart collect by the internet of the Uttara Bank Ltd.
3.1 What is Bank?
The word “Bank” bas been originated from an Italian word “BANCO” expressing the meaning. “A tall bench”
A Financial institution which buys money at lower price and sells money at higher price is called bank.
In the crude language spread means the difference between the deposit rate and lending rate i.e spread =lending rate-Deposit rate.
Financial institutions whose statute rules regulation and procedures expressing state its commitment to the Islamic shariah and to the banning of receipts and payments of interest in any of its activities is called Islamic bank.
3.2 Objective of a Bank.
To facilitate the transferring of fund from the surplus unit to deficit unit
To accelerate the savings
To accelerate the investment
To enhance the economies development
To facilitate the trades and commerce’s
Bangladesh Bank is the Central bank of Bangladesh. It is the monetary authority of the country. It came into existence under the Bangladesh Bank Order 1972 (Presidential Order No. 127 of 1972) which took effect on 16 December 1971. Through this order, the entire operation of the former State Bank of Pakistan in the eastern wing was transferred to Bangladesh Bank.
Bangladesh Bank has 9 branch offices, two in Dhaka city (sadarghat and Motijheel), and one each in Chittagong, Khulna, Rajshahi, Sylhet, Bogra, Rangpur and Barisal. The head office discharges its duties with 28 departments.
History of Bangladesh Bank
After the liberation war, and the eventual independence of Bangladesh, the Government of Bangladesh reorganized the Dhaka branch of the State Bank of Pakistan as the central bank of the country, and named it Bangladesh Bank. This reorganization was done pursuant to Bangladesh Bank Order, 1972, and the Bangladesh Bank came into existence with retrospective effect from 16 December 1971.
Objectives of Bangladesh Bank
As the central Bank of Bangladesh, the broad objectives of the Bank are :
a) To regulate currency issuance and to keep foreign exchange reserves.
b) To manage the monetary and credit system of Bangladesh with a view to stabilizing domestic monetary value.
c) To preserve the par value of the Bangladeshi Taka.
d) To promote and maintain a high level of production, employment and real income in Bangladesh; and to foster growth and development of the country’s productive resources.
e) To Reserve all the rights of the bank
Functions of Bangladesh Bank as Central Bank
Bangladesh Bank performs all the functions that a central bank of any country is expected to perform, and such functions include maintaining the price stability through economic and monetary policy measures, managing the country’s foreign exchange and the gold reserve and regulating the banking sector of the country. Like all other central banks across the globe, Bangladesh Bank is both the Government’s banker and the banker’s bank, a “Lender of the Last Resort”. Bangladesh Bank, like most of the central banks of different countries, exercises monopoly over the issue of currency and the banknotes. Except for the 1 and 2 taka notes, it issues all other denominations of Bangladeshi Taka.
Bangladesh Bank has been entrusted with all the traditional central banking functions including the sole responsibilities of issuing currency, keeping the reserves, formulating and managing the monetary policy and regulating the credit system of Bangladesh with a view to stabilizing domestic and external monetary value and promoting and maintaining a high level of production, employment and real income in the country. The bank acts as the banker to the government and accepts government deposits, cheques and drafts, and undertakes collection of cheques and drafts drawn on other banks. The government deposits all its cash balances with the Bangladesh Bank free of interest. The bank transfers government funds from one place to another as requested by the government and its agencies.
Bangladesh Bank is empowered to act as the watchdog of the country’s banking system, and all scheduled banks are accountable to Bangladesh Bank, which has extensive powers to ensure soundness of the banking system. No bank can commence banking business in Bangladesh and no existing bank can open a new branch in or outside the country or shift any branch from one place to another without obtaining a license/permission from the Bangladesh Bank.
The highest official in the bank is the Governor (currently Dr. Atiur Rahman). The Governor chairs the Board of Director. The Executive Staff, also headed by the Governor, are responsible for the day to day affairs.
Bangladesh Bank has correspondent relationships with one international and 8 foreign central banks viz., the Federal Reserve Bank of New York, Bank of Canada, Bank of England, Banque de France, Deutsche Bundesbank, Bank of Japan, Sveriges Riksbank of Stockholm, Reserve Bank of India and the Bank for International Settlements, Basle. Besides, Bangladesh Bank has now invested its foreign exchange reserves with 14 banks at different international financial centers
General Banking Department
General Banking Department is considered as the direct service center. The clients and customer build their impression whether they are going for further dealings with the bank or not on the basis of the service in the department, Moreover this department is the one that gives the first impression about the bank to the clients. So, general department should be taken carefully.
4.1 Function of General Banking
The functions of general banking are as follows:
- Establishing of banker-customer relationship of account opening.
- Remitting customer’s money from one place to another.
- Collecting bills for customers.
- Taking deposits and honoring cheques drawn over local office.
- Clearing taking function.
Different Parts of General Banking:
General Banking Department constitutes of the following sections:
- Account Opening Section
- Cash and Computer Section
- Remittance Section
- Clearing Section
The functions of the different department are discussed below:
4.1.1 Account Opening:
Banking business is very much correlated with banker customer relationship. To be a customer one person must have some sort of banking relationship with the bank. Account opening section establishes that relationship by opening a new account for the customer.
Uttara Bank Limited. Allows its clients to open the following types of accounts and receives deposits in those accounts. There are three months current accounts opening seventy only. Every account is needed TK. One thousand only. Saving account this three month are opening one hundred eighty. The fixed account is not opening by the UBL. This three months are not opened UBL.
Types of Accounts:
- Current Deposit
- Savings Bank Deposit
- Fixed Deposit
- Short Term Deposit
Key Features of opening an account in UBL:
Current deposit account: Current deposit accounts should be opened with a minimum amount of TK. 1000/= But under special circumstances in may be opened with TK. 500/=. It is payable on demand, No interest is paid in these types of accounts.
2. Savings Bank Deposit Account. Minimum amount of TK.1000/= is required for opening this type of account, the account may not be retained it the balance falls below TK.200/= Not more than one account should be opened in one name. A depositor is allowed to withdraw per week up to 25% of the balance of his or her account. For calculation of interest the minimum balance at the credit of an account by the close of 8th the month should be taken into consideration.
Fixed Deposit Account: Fixed deposit accounts are opened for a diced period, varying from three months to three years or above and are payable at a fixed date of maturity, interest on this deposit is paid at the rate fixed by Head office of the from time to time depending on the period of maturity. Interest is payable only at the maturity of the deposit.
The following table shows different FDR rates:
Years 2001 t0 2007
|From 3 months up to 6 months||9.5%|
|From 6 months up to 1 year||10%|
|From 1 year up to 2 year||10.5%|
|From 2 year up to 3 year||11.5%|
The data collect by the Annual Report.
The following table shows different FDR rates:
Years 2008 & 2009
|Short-Term Account||3.5 %|
|From 3 months up to 6 months||7.75%|
|From 6 months up to 1 year||8%|
|From 1 year up to 2 year||8.25%|
|From 2 year up to 3 year||8.50%|
The date collects by the Bank Chart of UBL.
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