Northern University of Bangladesh
Report on Pubali Bank Limited
CHAPTER ONE
≡ INTRODUCTION ≡ 1.1. Origin of the Report: As part of the Master’s of Business Administration course requirement, I am submitting my Internee Report "Overall Bank activities of a Private commercial Bank" based on my work experience in Pubali Bank Limited Shariatpur Branch an internee by the Northern University of Bangladesh. At the Shariatpur Branch of Pubali Bank Limited my supervisor was Asst. Professor Md. Luftor Rahman, Northern University of Bangladesh, authorized me to prepare this report as part of the fulfillment of internship requirement. 1.2. Internship at Pubali Bank Limited: Now I am working in Pubali Bank Limited as an internee had been the most enjoyable time of my life. Doing my internship at one of the leading private financial institutions, I believe I have accumulated an experience unmatched to any other. I was assigned to the Project of practical Orientation Program in Pubali Bank Limited as my project report. I am extremely happy to work in such a project like this where I could apply my academic knowledge to a great extent. What delighted me very much during my internship was the attitude and behavior of all the staffs during my stay at the office as an intern. I never felt as a stranger but homely from the very first day. The work environment of Pubali Bank Limited is very conducive and friendly. The staffs are specialized in their respective fields. Each of them works on their own and there is supervision from the top. The motivation of the staff, I believe comes from the very sense of responsibility. Each member is individually responsible for his or her work. 1.3. Objectives: The primary objective of this report is to achieve practical knowledge about banking to observe what the basic bank services are, but the specific objective of this report is as follows: ♣To know the major feature of PBL ♣ To know about the general Banking ♣ To know about Loans and Advances ♣ To know about foreign exchange ♣ Marketing in Bank Business.
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Northern University of Bangladesh
Report on Pubali Bank Limited 1.4. Methodology: The required data and information to prepare the report have been collected from the following sources♣ Files and documents of the branch ♣ Circular issued by the Head office and Bangladesh Bank ♣ Procedure manual published by the Pubali Bank Limited Head office ♣ Personal experience gained by visiting different desk. ♣ Personal interview with branch officials or executives. This report has been prepared on the basis of experience gathered from my working experience. 1.5. Scope: I have been working in the Shariatpur Branch of PBL where I got the scope to getting familiarized with the Banking sector. I have worked in all the divisions of the Branch. Account opening, clearing, accounts, and remittance department under the supervision of Our Branch Senior Principle Officer Md. S.M. Lliaquat Hossain where my scope was in a very big area. 1.6. Limitations: There were several constraints while preparing this report. Only three months were not sufficient to visit all the desks of the branch. So some desks were remained unvisited. It is also not possible to go to the depth of each activities of branch because of time limitation. Therefore it was very difficult to carry out the whole analysis.
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Northern University of Bangladesh
Report on Pubali Bank Limited
CHAPTER TWO
2.1. Historical Background: The Pubali Bank Limited (PBL) has a prolonged and glorious heritage in the banking industries of Bangladesh. It is the largest private commercial Bank in Bangladesh. The Bank was incorporated in the Year 1959 under the Name and style of Eastern Mercantile Bank Limited under the Companies Act 1913. After Liberation of the country in 1971, the Bank was nationalized as per policy of the Peoples Republic of Bangladesh under the Bangladesh Bank (Nationalization) order 1972 (PP No 26 of 1972) and was renamed as Pubali Bank, Subsequently the Bank was denationalized in the year 1983 and was again incorporated in Bangladesh under the name and style of Pubali Bank Limited in that year. The Government of the Peoples Republic of Bangladesh transferred the entire undertaking of Pubali Bank to Pubali Bank Limited which took over the same as a going concern. Economic development activities in the post liberation period required service from private commercial banks. To fulfill that demand as well as to improve the commercial banking service in Bangladesh, the Pubali Bank Limited emerged as a private limited company. The Pubali Bank Limited is a remarkable addition to the private sector branch banking in Bangladesh. Aiming at offering commercial banking service to the customers’ door around the country, The Pubali Bank limited established 356 branches up-to this year. This is the highest number for any private commercial bank operating in Bangladesh. This organization achieved customers’ confidence immediately after its establishment in domestic and international markets. All types of commercial banking services are provided by the Bank within the stipulations laid down by Bank Companies Act 1991 and directives as received from Bangladesh Bank from time to time. The Bank is listed in the Dhaka and Chittagong Stock Exchanges as publicly quoted company for its general class of shares. A team of highly qualified and experienced professionals headed by the Managing Director of the Bank who has vast banking experience operates the Bank. The Pubali Bank Limited provides financing in capital market, credit line and project financing, investment counseling, underwriting any guarantee, portfolio management etc along with traditional banking services. Sanchay Prokalpo and Bonus Deposit Scheme are praiseworthy banking service for the middle and lower income group. Recently, this organization has taken operational decision of two projects. Consumer Credit Scheme and Credit Card marketing to widen its service and customer base. The Pubali Bank Limited is always emphasizing the improvement of banking service and betterment of living standard of the general people of Bangladesh.
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Northern University of Bangladesh
Report on Pubali Bank Limited 2.2. Mission: ♦
We aim to become come one of the leading Banks in Bangladesh by our prudence, flair and quality of operation.
♦
We intend to meet the needs of our clients and enhance our profitability by creating corporate culture.
♦
We believe in strong capitalization.
♦
We aim to ensure our competitive advantages by upgrading banking technology and information system.
♦
We maintain high standard of corporate and business Seth’s.
♦
We provided high quality financial services to strengthen the well being and success of individual, industries and business communities.
We intend to play more important role in the economic development of Bangladesh and its financial relations with the rest of the world by interlining both domestic and international operations. 2.3. Objective & Goals: ♦
PBL is always ready to maintain the highest quality of services by upgrading banking technology prudence in management and by applying high standard of business ethics through its established commitment and heritage.
♦
The objective of PBL is not only to earn profit but also to keep the social commitment and to ensure its co-operation to the person of all level, to the businessman, industrialist —especially who are engaged in establishing large scale industry by consortium and the Agro-based export oriented medium & small scale industries by self inspiration.
♦
PBL is committed to ensure its contribution to national economy by increasing its profitability through professional and disciplined growth strategy for tits customer and by creating corporate culture in inter Pubali Banking arena.
♦
PBL believes in building up strong-based capitalization of the country.
♦
PBL is the first and largest private Bank is committed to continue its endeavor by rapidly increasing the investment of honorable shareholders into assets.
♦
PBL has been working from the very beginning to ensure the best use of its creativity, well disciplined, well manage and perfect growth.
♦
PBL is playing a vital role in Socio-economic development of Bangladesh by way of linkage with rest of the world by developing worldwide network in domestic and international operation.
♦
PBL is preoccupied to encourage the investors for purchasing its share by creating the opportunity of long-term investment and increasing the value of share through prosperity as developed by day. 4
Northern University of Bangladesh
Report on Pubali Bank Limited ♦
PBL is committed to continue its activities in the new horizon of business with a view to developing services oriented industry and culture of morality and its maintenance in banking.
2.4. Pubali Bank Limited In 2000 Pubali Bank Limited made commendable progress in al business arena, like Deposit, credit, fund management, investment, foreign remittance & foreign exchange related business. Bank has expended business activities as holding previously & parallel by diversification its investment to a new product. The total assets of the bank was tk.58401.14 million as on 31 st December 2006, which is higher than tk5669.40 million than the previous year. 2.4.1. Management Process of the Pubali Bank Limited: Planning:
T
he strategic planning approach in PBL is top—down. Top management formulates strategy at the corporate level, and
then it is transmitted through the Division to the individual objectives. Board of Directors or Executive Committee usually takes the decision. In this process lower level managers are detached in making process, even brainstorming of lower level manager is absent in decision making and planning process. Before launching a new product or services market research is not done in this bank. As a result, ongoing projects are hindered by unexpected failures. Organizing: rganization of The Pubali Bank Limited is based on departmentalization. The organization is divided into twelve departments headed by Executive Vice President or Senior Vice President. In The Pubali Bank Limited the whole operation is centralized and authority is delegated by written guidelines. These guidelines are:
O ♠
Operational manual approved by Head Office, where each aspect of banking operation is elaborately defined.
♠
Advance manual including advance limit for different management level.
♠
Bad and doubtful recovery manual
♠
Code of conduct
♠
Foreign banking guidelines
♠
Central Bank’s directives
Different management position holders in departments and branches practice their authorized power in different cases with administrative loopholes.
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Northern University of Bangladesh
Report on Pubali Bank Limited Staffing: ntry level recruitment process of The Pubali Bank Limited is conducted in three ways. One way is recruitment of Probationary Officer. Each Probationary Officer has oneyear probation period. After completion of probation period the officer joins as Officer. The career path of probationary Officer is headed toward different management positions. Second way of recruitment is to recruit non-probationary officer who joins as Assistant Officer. The career path of an Assistant Officer is lengthier than Probationary Officer. The third way of recruitment is recruitment of staff and sub-staff such as typist, messenger, driver, guard, attendant, cleaner and other lower level positions. Promotion policy of PBL is basically based on seniority basis. Sometimes, employees are promoted to the higher position for their outstanding performance. However, it is found that the average length of a position held by an employee is around five years.
E
Controlling:
T
he Bank has strict control over its all organizational activities. The Bangladesh Bank directives indicate some control measures. Audits and inspections are conducted by different parties to check whether the bank implements these control systems properly or not. The central bank conducts credit inspection by a team. The Pubali Bank Limited has Audit and Inspection Department to take controlling measures in internal operations. Audit and inspection team is sent to the branches now and then and is responsible for preparing report that will be submitted to the Chief of Administration to take necessary actions.
2.4.2 Organizational Structure and Department: Organizational setup of The Pubali Bank Limited is consisting of three organizational domains. Firstly, the central top management, which contains Board of Directors, Managing Director, Deputy Managing Director. Major responsibilities of this part are to take central decision and transmit it to the second step. Secondly, central executive level management, which contains General Manager, Deputy General Manager, Assistant General Manager. Major responsibilities of this part are to supervise and control the division/department. Thirdly, branch operation management, which contains Branch Manager and other Mid/Lower level management. Major responsibilities of this part are to direct the 356 branches of this bank and report to the Regional Office and Regional Office report to the Head Office from time to time. Departments of the Pubali Bank Limited: 1. Administration, Development, 2. Central Accounts Department (CAD) 3. Credit & Monitoring Division. 4. Credit Recovery Division. 5. Foreign Exchange Division. 6. Human Resource Division 7. Audit Division. 8. Business Promotion Division. 9. Branches Operation Division. 6
Northern University of Bangladesh
Report on Pubali Bank Limited 10. Fund Management Department 11. Corporate Affairs Department 13. Information Technology (IT) Department. 14. Share Division. 2.4.3 Bank Services: Deposit Services Savings Bank Account Fixed Deposit Account Short Term Deposit Account Current Account Pension Account Foreign Currency Account ( Download for Account Opening Form ) Loans & Lease Services Micro Credit Small and Medium Enterprise Financing Industrial Loans Working Capital Financing Export Credit Import Credit Bills Purchase Letter of Credit Letter of Guarantee Lease Financing Transport Financing Consumers Loan Scheme House Building Loans Miscellaneous Services Electric Bill Gas Bill Phone Bill Cheque Clearing Instrument Collection Locker Services ATM Services Card Services Remittance Services Remittance of Fund from abroad by Bangladeshi Nationals Foreign Remittance Internal Remittance 2.4.4. Highlights of 2010:
D
espite monetary and economic crisis in Asian countries and adverse affect of the longest and most severe flood of the century, the overall growth trend of the Bank continued in 200 during the year under review considerable progress was achieved in deposit mobilization, disbursement of loans and advances and foreign trade. The performance in the field of foreign remittance was also satisfactory. These factors contributed to consolidate the Bank’s financial position.
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Northern University of Bangladesh
Report on Pubali Bank Limited Table-1: Capital and Reserve Fund SL 1 2 3 4 5 6 7
Particular Paid Up Capital Statutory Reserve Other Reserve Authorized Capital Bad Debts Reserve Available Capital Shortfall /Surplus
Present Condition (In million) 4969 4540.65 1231.09 10000.00 2380 4730 160
2. 4.5. Board of Directors: CHAIRMAN
Mr. Hafiz Ahmed Mazumdar MP VICE CHAIRMAN
Mr. Habibur Rahman Mr. Giashuddin Ahamed DIRECTORS
Mr. Moniruddin Ahmed Mr. Sk. Wahidur Rahman Mr. Monzurur Rahman Mr. Syed Moazzem Hussain Mr. Ahmed Shafi Chowdhury Mr. Muhammad Faizur Rahman Mr. Fahim Ahmed Faruk Chowdhury Mr. Muhammed Kabiruzzaman Yaqub Ms. Rumana Sharif Mr. Mustafa Shahriar Ahmed MANAGING DIRECTOR & CEO
Mr. Helal Ahmed Chowdhury List Of Board Of Director Of Pubali Bank Limited
Board Of Director Of Pubali Bank Limited as on 16.06.2010
2. 4.6. Profit: In 2009 PBL earned the profit of Tk. 2092.23 Million. In 2008 the profit was Tk. 1515.23 Million. 2. 4.7. Deposits and Advances: The deposits of the bank raised BDT 88466.46million in 2008 from BDT 73,016.51 million of the previous year revealing an increase of BDT 3,357.56 million with a growth rate of 21.16%. Such increase resulted from increased fixed deposits and savings. The total advances of the bank stood at BDT 74,203.33 million as on 31-12-2009 in comparison to BDT 12,415.18 million in the last year @ 20.09% growth. 2.4.8 Dividend: The Board of Directors have recommended stock dividend of 30% B (i.e. three shares for every ten shares ) and 5% cash dividend for all shareholders pf the Bank out profit on the basis pf audited accounts for the year ended December 31, 2006 subject to approval in the 27th Annual General Meeting. 2.4.9. Import Business : 8
Northern University of Bangladesh
Report on Pubali Bank Limited During the year the Bank handled import business worth Tk.60490 million. During the previous year, the amount was Tk. 58010 million. The amount of import business handled by the Bank increased by Tk. 2480 million during the year which was 4.28% higher than the previous year. 2.4.10. Export Business: The Bank handed export business worth Tk. 24740 million during the year as against Tk. 24790 million in the previous year. 2.4.11. Fixed Assets: The fixed assets of the Bank rose to BDT 1443.50 million in 2009 from BDT 1383.36 million of 2008. The bank owns a ten storied building in KDA C/A, Khulna, a five storied building in Rampura, Dhaka, and commercial valuable land at Kawran Bazar, Dhaka and at Agrabad C/A Chittagong. 2.4.12. Book Value and Earning Per Share: The book value of share stands at BDT 248.80. The change was in positive terms in comparison to 2009. Earning per share fell to BDT 54.74 in 2008 from BDT 51.54 and the change comparison to 2007. 2. 4.13. Consortium Financing: To make the country industrialized a large amount of money should invest. It is a challenge of 21st century. For any individual bank it is very hard and risky to face the challenge. The Bank is giving credit facilities in productive and priority sectors with the policy guidelines of its own and Bangladesh Bank, side by side the bank has invested in large scale industries in Consortium with other bank. Among these with the notable private BIRDEM, Pepsi-cola, Pacific Bangladesh Telecom Limited, Hospital, etc. 2.4.14. Sources and uses of funds: The major source of Bank’s fund is deposits and also borrowing from Bangladesh Bank and call loan from different banks. The bank used major portion of this fund for investment in Loans and Advances. Rural Credit Program: PBL has been working intensively in collaboration with Borindra Multipurpose Development Authority (BMDA) by conducting the Rural Credit program particularly in Rajshahi and the northern part of the country in general. In the last 9 years bank has distributed the credit for BDT 628.21 million amongst the 10,291 customers. The recovery of loan in this project is 95%. In 2009 Bank has distributed the loan for BDT 109.56 million in this project and the recovery rate is 86%. This is the first program for any Private Bank Moreover, PBL has been participating in Agro Based Industries and Technology Development Project Loan (ATDP) financed by USAID since 1996, PBL has got the fund of BDT 140.00 million as agricultural credit from that ATDP project and along with its respective fund, the bank has distributed the total amount of BDT 4076.00 million to the seven sub-sectors through 12 selected branches in 2009. 9
Northern University of Bangladesh
Report on Pubali Bank Limited 2.4.15. Foreign Correspondent: Foreign exchange risk is defined as the potential change in earnings arising due to change in market prices. The foreign exchange risk of the Bank is minimal as all the transactions are carried out on behalf of the customers against underlying foreign exchange transactions. Treasury Division independently conducts the transactions and the back office of treasury is responsible for verification of the deals and passing of their entries in the books of account. All foreign exchange transactions are revalued at Mark-to- Market rate as determined by Bangladeshi Bank at the month end. All Nostro accounts are reconciled on monthly basis and outstanding entries beyond 30 days are reviewed by the management for their settlement. 2.4.16. Human Resources: To ensure optimum and utilization of manpower development of human resources for a serviceoriented industry like banking is indispensable. Keeping this in mind, the bank is striving since 1968 for its own to train-up its employees. During the years under review 950 employees attained training programs arranged by the training institute of the bank. In every batch, 25 trainees can attain in training program with residential facilities Up to 2000 from the beginning of the institute 2905 employees of various rank have trained-up. Table-2: Human Resource Position Pubali Bank Ltd. Sl. No 1 2 3 4 5
Designation
Total
General Manager Deputy General Manager Assistant General Manager Senior Principal Officer Principal Officer
19 47 145 308 734
6 7 8 9 10 11
Senior Officer Officer Jr. Officer Total Sub-Staff Total Employee
747 653 459384 3137 2163 5375
2.4.17. Training Facility and Motivation: 1. 2. 3. 4. 5. 6.
Fund Management. Credit Management. Lending Risk Analysis Senior Management Course. Foreign Exchange. Asset liability management 10
Northern University of Bangladesh
Report on Pubali Bank Limited 7. 8. 9.
Foundation Course. Audit & Inspection. Computer Operation in Branch Banking.
2. 4.18: A comparative Study of Pubali Bank’s Performances in Recent Years & Growth analysis: Comparison of a bank’s performances in recent years in terms of various areas often facilities to develop useful insight about its current position or status and might help in formulating its feature strategies. With a view to do same, an analysis has been conducted on Pubali Bank’s financial figures from 1996 to 2000 as per availability of their sources.
Table-3: Five years performance of the bank at a glance
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Report on Pubali Bank Limited
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Report on Pubali Bank Limited
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Northern University of Bangladesh
Report on Pubali Bank Limited 2. 4.19. Evaluation of Performance in Recent Years: The overall performance of the Pubali Bank Limited is increased gradually in the recent years. The authorization capital of PBL is same in last five years (2004 to 2009). The paid-up capital increased 1378 million from the year of 2006, 2007 and 2008 which is increase from the year of 2009. And 987 million increase in the year 2009 from the year of 2008. And Reserve fund is found increased each year. Deposits of the Bank are found increased each year. In the way of increase in deposits PBL’s advances is also gradually increasing in the recent years. Pubali Bank Limited has a big amount of investment in the Govt. treasury bills, Bangladesh Bank Bills, shares variety bonds debentures. The figure of the investments in the year 2004, 2008 and 2009 are respectively BDT 57996.82, million, 73016.51 million and 88466.40 million respectively. The growth rate of profit of the PBL is very good. Net profit of last five years is respectively 573.45million, 845.53 million, 1353.51 million 1515.23 million and 2099.23 million. 2. 4.20. Computerization: In order to enhance the standard of customer services by providing modern banking facilities most of the branches of the Bank were computerized by the end of December 2001. Moreover, Expansion of Customer Services: PBL ATM Service: Pubali Bank Limited is going to introduce soon ATM service to its Customers. The card will enable to save our valued customers from any kind of predicament in emergency situation and time consuming formalities. PBL ATM card will give our distinguished Clients the opportunity to withdraw cash at any time, even in holidays, 24 hours a day, 7 days a week. PBL ATM cardyour access to prompt cash. Conclusion: The Pubali Bank Limited is the leading pioneer Private Commercial bank. Top management formulates strategy at the corporate level, and then it is transmitted through the Division to the individual objectives. Despite adverse economic environment the performance of the bank, as evident from the presented sectional reports, can be marked as satisfactory.
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Northern University of Bangladesh
Report on Pubali Bank Limited
CHAPTER THREE
3.1 Internship Period: My internship period started at 15 February 2010 to 15 May 2010 in Pubali Bank Shariatpur Branch. In this time it was very important for me where practical experience gathered. Those 3 months of Internship program I have learned about general banking and especially emphasis on customer satisfaction level on Shariatpur Branch Pubali Bank Limited. 3.2 Daily Tasks: The 3 months of my internship program I mainly worked at customer service and observe the customer satisfaction level. Customer service is the department in which the first interaction between the customer and the bank takes place. Since the first impression is the long lasting impression, the quality, customization and response time of this department is very important. Different types of activities are conducted here. My daily working hour started at 9:00 as banking hour started and ends normally 5:00 or more. At first I check FDR maturity report and transfer interest on several account. Than my daily task was as follows: 1
Meeting customer inquiry
2
Opening new accounts
3
Issuing pay-order,
4
Scan signature card,
5
Give account statement,
6
Providing Deposit book
7
Issuing check book, etc.
Meeting customer inquiry: This is primary task of customer service department. Customers may come to this department and make inquiries about any bank related matters. These persons can be either existing customers or potential customers. They can make different types of inquires such as inquires about their account balances, changes in interest rates, bank’s new services-offerings and so on. 16
Northern University of Bangladesh
Report on Pubali Bank Limited Opening new accounts: The relationship between the bank and its customer starts with opening an account. There are different types of accounts considering different customer types and requirements. Savings account Current account Short Term Deposit (STD) account Fixed Deposit Receipt (FDR) account Savings account: Savings deposit accounts are suitable for savers who want to save for meeting the future social, economic, educational and religious needs. Savings accounts are interest bearing deposit accounts. The drawings are restricted in respect of both the amount of withdrawal and the frequency thereof during a week. But no restriction is imposed in case of deposit of money. Interest rate: 5.25% Current account: The current deposit holders enjoy certain privileges compared to a savings deposit account holder. These facilities are as follows: Overdraft facilities are given to current deposit account holders only. The loans and advances are normally sanctioned by the banks through current accounts. These are not given in cash but are credited to the current accounts. A current account may be opened by an individual, firm, company, club or an association after duly meeting all the formalities. The bank, do not pay any interest on current deposits. Fixed Deposit Receipt (FDR) account: Fixed Deposits are kept with the bank for a fixed amount of time and the depositor gets a certain amount of interest from it. After the period is over, the depositor can encash (cover) the deposit and take the whole amount or may again open another FDR. Fixed deposits are important sources of funds to the bank. These add to the stability and growth of the bank’s deposit structure.
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Northern University of Bangladesh
Report on Pubali Bank Limited Interest rate: For 3 months period:
9.00%
For 6 months (above 1crore)
9.25%
For 12 months period:
9.50%
For 2 year period & above:
10.00%
Short term deposit: There are people and organizations that want both liquidity and return on their deposits. They want to keep funds in a bank so that it can be withdrawn without any restriction. But they want to earn some interest meanwhile. For them neither current account is suitable, nor savings and fixed deposit. The rates of interest on such types of deposits are lower because the bank holds the fund for a short period only. Interest rate: 3.3 Some important points of New Account Opening: Now-a-days under the strict monitoring of Bangladesh Bank, there are several criteria that a client must fulfill as he/she/an organization wishes to open an account. The basic criteria are discussed below: 1
Account Opening Form (AOF) duly filled & signed
2
Signature cards properly signed
3
Applicant introduced by an authorized person such as account holder or employee of Bank Asia or by a respectable person acceptable to the bank
4
Two copies of passport sized photographs which are attested by the introducer
5
Name of nominee written and photograph of the nominee(s) attested by the applicant
6
Photocopy of passport (attested) or photoco[y of National ID card or letter of introduction by the employer or certificate issued by chairman of Union Parishad or Ward commissioner
7
TIN (if available)
8
Customer transaction profile form properly filled in and signed.
9
KYC profile form (properly filled in, signed and approved) for high net worth customers falling under the following criteria:
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Northern University of Bangladesh
Report on Pubali Bank Limited i) New customers whose initial deposit is more than Tk.50.00 lac (initial means within one month of A/C opening) ii) Existing customers whose total AUM (Asset under Management) grow to more than Tk. 50 lac for three consecutive months. For individuals: 1
Nationality certificate or copies first few pages of passport or copies of previous two month’s electric bill, telephone bill of the person’s residence.
2
Two copies of photograph of the applicant & one copy of photograph of the nominee.
For Proprietor Enterprise: 1
Trade License
2
T.I.N. Certificate
For Limited Companies: 1
Certified true copy of Memorandum and Articles of Association
2
Certified true copy of Certificate of Incorporation
3
Certified copy of Certificate of Commencement of Business
4
Copy of the Resolution of the Board of Directors authorizing for opening account and specimen Signatures for operation of the Account duly attested by the Chairperson
5
Latest Audited Balance Sheet
6
Trade License
7
T.I.N Certificate
For Partnership Enterprises: 8
Certified Copy of the constitution of the firm
9
Registered Partnership Deed/duly Notarized Partnership Deed at Will (In case of Unregistered firm)
For Association/Club/Society/Charity etc: 1
A copy of the resolution of Committee authorizing specific Signatories to operate the account
2
Certificate of Registration; where applicable.
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Northern University of Bangladesh
Report on Pubali Bank Limited Being fulfilled the above requirements; a new account is opened through the software “Stelar”. An ID is created for the account holder (In case of Individual’s account or Organization’s), or one ID each for each of a joint account. One person/organization can have only one ID using which he/it can have several accounts. Issuing pay-order: Pay order is always account payable. At first, the applicant fill up the form than pays the amount of a Pay Order. At the same time, PO is used to send money within the clearing area only. When it will be posted than write in Pay Order Block correctly. Scan signature card: When a account is open than the signature scan for signature verification. This record saved in software Stelar. Only Savings, Current and STD account will be scan. Give Account Statement: Time to time, Account holders may need to know the status of their accounts as well as the transactions through those accounts. In such case, an account holder asks at the customer service desk to provide him/her an account statement. The personnel at the desk print the account statement from the Stelar with the account number.
Providing Deposit book: A deposit slip is needed to deposit money in an account. The customer service department provides deposit slip to the customer.
Issuing check book: When all the pages of a check book are finished, the customer needs a new book. The Customer Service & Remittance Desk provides new book to the customer. Upon receiving the new book requisition slip duly signed by the customer, a new book is issued. The number of pages of the new book may be different depending on the type of account and the customer request. Before delivery, all the pages of the new book are signed by the authorized signatory of the bank.
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Northern University of Bangladesh
Report on Pubali Bank Limited Now, Magnetic Read able check book is very popular in online banking system which is now available in our bank. This check are fully printed and issued by Bangladesh Bank. 4.4 Job Description: As an internship position I maintain the following job description level 1
Ensure better service to the customers
2
All legal & minimum documents to be obtained prior to opening an account
3
Account opening checklist to be followed meticulously while opening an account.
4
Responsible for renewal of ATM card, SMS, PIN & Internet Banking.
5
Responsible for issuance Check book & Providing Deposit book to the client.
6
Responsible for following standing instruction of the customer
7
Responsible for file & documentation end of the day.
3.5 Time schedule:
Duration
Activities
1st Week
Started working on Internship report.
2nd Week
Approval of topic.
3rd Week
Collected data from different primary sources.
4th Week
Collected data from different secondary sources.
5th Week
Consulted with the advisor about the data collection.
6th Week
Worked through the instruction given by the advisor.
7th Week
Again consulted with the advisor.
8th Week
Get acquainted with the products offered Bank Asia Ltd.
9th Week
In depth analysis about the customer satisfaction level.
10th Week
Worked on recommendation.
11th Week
Consulted with advisor about the report & worked on the modification of the report.
12th Week
Submitted the report.
3.6 learning point: 21
Northern University of Bangladesh
Report on Pubali Bank Limited During my 3 months internship program I have learned different kinds of things whics are as follows; New account opening system: There are different types of accounts considering different customer types and requirements. Savings A/C, Current A/C, Fixed Deposit (FDR), STD A/C Being fulfilled the above requirements; a new account is opened through the software “Stelar”. An ID is created for the account holder (In case of Individual’s account or Organization’s), or one ID each for each of a joint account. One person/organization can have only one ID using which he/it can have several accounts. When created Customer ID then add amount of deposit, if it is current or saving then the introducer’s information also necessary. Finally, put its sector code like service holder (911000), housewife (915050). When giving all information properly then this record will be saved on software Stelar and a account serial number will be given Issue of new check book: Issue of check book have several steps. When a account is open then account holder receive a thanks letter. Then we verify his/her signature and issue a check book but its deferent criteria for a old account holder. He/she just give a requisition for a new check book if previous book is finished. Posting a check book: After giving a check book it must be necessary to posting. I just put account number in check request page and entry the check’s serial number, leave number, CD or SB then it saved for posting. Pay order: In a pay order first the form should be fill upnwhwre it issued, amount of money, the name of client. After that the vat and commission will included. When received cash then the pay order block prepared where in front of the page in block letter “ NOT OVER ….TK ONLY” was written.
CHAPTER FOUR 22
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FINDING AND ANALYSIS OF GENERAL BANKING 4. General Banking General banking is the starting point of all the banking operation. It is the department, which provides day-to-day services to the customers. Everyday it receives deposits from the customers and meets their demand for cash by honoring cheques. It opens new accounts, remit funds, issue bank drafts and pay orders etc. Since Bank is confined to provide the service everyday, general Banking is also known as retail banking. General Banking has five major sections in the branch. These sections are given below: •
Account opening section
•
Cash Section
•
Cheque clearing section
•
Remittance section
•
Account section
The above sections are discussed below in details: 4. 1.1. Account Opening Section: This section opens accounts. It receives accounts opening application from the applicant, examines and scrutinizes the application and then select final customers. Selection of customer is very important for the bank because bank success and failure largely depends on their customers. If customer is bad, they may create fraud and forgery by their accounts with the bank and thus destroy goodwill of banks. So, this section needs to exercise extreme cautions in choosing its customer. 4. 1.2. Account Opening Process: Individuals or firms intended to open account in the branch apply to open account in a prescribed form. •
The application form should be filled in by the applicant himself.
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The applicant is also required to fill the specimen signature sheet.
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Applicant must submit required documents with his application form.
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Different kinds of documents are needed for different kinds of accounts.
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For individual only introduction by another account holder of the bank is sufficient. But for firm and others relevant papers must be submitted.
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Documents which are required is mentioned in the general banking manual of Pubali Bank. Then the authorized officer scrutinizes the introduction and examines the documents submitted. If everything appears satisfactory, then he opens the account. For opening accounts initial deposit is made in cash. No cheque or draft is acceptable for opening an account. When an account is open by a client, a thanks letter is issued by the branch. 23
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Report on Pubali Bank Limited 4.1.2. File maintain by A/C opening section 1. A/C opening file (SB, CD, STD, MSS, SDS) 2. Cheque authorization file 3. A/C regular file. 4.1.3.2 Types of Accounts Pubali Bank opens accounts under following head •
CD
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SB
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FDR
Current Account: It bears no interest and no restriction exists on the number of deposits into and withdrawal from this account. Opening balance must be Tk. 5000 and after than customer must maintain a minimum balance of Tk. 1000. Tk 50 is charged if balance falls short of minimum balance and Tk. 5.00 is charged if any cheque is drawn with insufficient cash in the account. Saving Account: Depositing Tk.100 can open this account. Pubali Bank requires a minimum balance of Tk 500 to continue the account At one time, depositors can draw maximum 25 & or Tk 1000 whichever is lower. Current interest on such accounts is 7.5%. Fixed deposit receipt: This depositor is taken for some maturity period. Depositors are not allowed to withdraw or deposit money in this account. 4.1.3.1. Transfer of Account and dormant account Account holder may transfer his account from one branch to another branch. For this he must apply to the manager of the branch where he is maintaining account. Then manager sends a request to the manager of the branch where the account holder wants to transfer his account, for opening the account. With his request, he sends original copy of account opening application and specimen signature sheet and the photocopy of application for transferring the account with the balance remained in the account. Table-4: Rate of interest on deposits Deposits Interest Saving bank deposit 5.25% STD 4% FDR for 3 months 9% FDR for 6 months 9.25% FDR for 12 month 9.50% FDR 2 years and above 10% 4.1.3.2. Types of account opener: The entities that are allowed to open account by this bank are named below: •
Sole proprietorship: It can open all type of accounts.
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Public limited company: It can open saving account.
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Report on Pubali Bank Limited •
Clubs/ Societies: It can not open current account.
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Non-trading concern: It can not open current accounts.
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Individual: Individual can open account in single and or joint name, Pardanshin woman, Illiterate, minor can also open account.
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Partnership firm: It can open saving account.
4.1.3.2.1. Special notice account: This account generally opened by big merchant and business firms. This can be withdrawn by giving notice of 7-29 days. Interest is calculated on the basis on daily product. Every person can not open every account. Opening of each account requires separate qualifications. For example business people can open current account, clubs, societies can open FDR or saving or BCD account etc. Company can not open saving account. 4.1.3.2.2. Cash Section: The cash department is the most vital and sensitive section of the branch which deals with all kinds of transactions. All cash receipts and payments are made through this department. This department starts the day with cash in vault. Each day some cash are transferred to the cash officers from the cash vault. This cash amount is called opening cash balance. All the day, a bank makes some cash payment and takes some cash receipts. Net figure of these cash receipts and payments are added to the opening cash balance. The figure is called closing balance. This closing balance is then added to the vault, and this is the final cash balance figure for the bank at the end of any particular day. 4.1.3.2.3. Books maintained by this department: •
Vault register: This book keeps accounts of cash balance in the vault at the bank.
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Rough vault–Register: Cash calculation for final entry in vault is done hare because no error and subsequent correction in vault register is acceptable.
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Cash balance book: Cash balance by counting the notes and coins physically are recorded here. Balance here is compared with vault register. If no discrepancy is found, then everything is thought to be right. Otherwise indicates error.
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Cash receipt register: Cash receipt in the whole of the day is recorded here.
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Cash payment register: Cash payment is made in a day are entered here.
In register 2 and 3 notes and currency recorded by mentioning their denominations and number of cash denomination. 4.1.3.2 .4 Functions of cash department: Cash payment: This section accepts the cheques from the depositors for payment in cash. After receiving the cheque, first the check is scrutinized whether it is a valid one. Cash officer judge the amount both in figure and inwards written on the cheque, date of the cheque and 25
Northern University of Bangladesh
Report on Pubali Bank Limited signature etc. Then finally the authorized officer compares the signature on the cheque with the specimen signature and check whether the balance in the account is sufficient or not. If everything is satisfactory, then payment is made against the cheque. This department also makes payment against various debit vouchers for various miscellaneous expenses of the branch. Cash receipt: Second function of this department is receipt of cash. Depositors deposit money in their account through this section by deposit slip. This section also receives cash from the customer for opening pay order, bank draft; telex transfer etc. in short banks all cash receipts are taken by this department. 4. 1.4 Cheque Clearing Section: This department receives cheques from its depositor for the purpose of collection and in their accounts. A receiving officer receives cheques by a deposit slip over the counter. 4. 1.5. Types of cheques for clearing This section receives three kinds of cheque, these are given below: Inward clearing cheque: This cheque is received from the clearing house which is drawn on our bank. Settlement process is very simple—debits the respective account of the cheque and credit the Pubali Bank general account Motijheel branch. Motijheel branch is credited because cheque comes from clearing house via the Motijheel branch. Outward clearing: These cheques are received on the counter to be collected from other banks. These are of three kinds. •
Drawn on another branch of the Pubali Bank. These types of cheque are called OBC (Outward Bill for Collection).
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Drawn on another bank, which is situated our clearinghouse area. This cheque is called clearing cheque.
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Drawn on another bank, which is situated outside the clearing area. This cheque is also called IBC.
In the first case, these cheques are directly sent to the respective branch and request them to sent IBCA (Inter Bank Credit Advice) by which a branch credits the account of another branch. No clearinghouse formalities are necessary here. When IBCA comes, then customer'’ accounts are credited for the amount for the cheque. In the second case, the drawer bank and request them to send the cheque to the proceeds by TT, MT, or DD or by in any other means.
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Report on Pubali Bank Limited Inward Bills for collection (IBC) : All clearing cheques are not received on the counter. Some cheques are received from other source for collection. These cheques are received. From other branch of Pubali Bank. These cheques are settled by sending IBCA i.e. debiting depositor’s account and crediting sender’s branch account. From another bank outside the clearinghouse these checks are settled debiting depositor’s account and sending DD, TT in favor of sender’s bank. These cheques are called IBC. For settlement of these kinds of cheques, bank sends IBCA, if cheques are given us by our branch and sends DD, MT, TT, if by another bank. 4. 1.6. Local Remittance Sending money from one place to another place for the customer is another important service of banks. And this service is an important part of country’s payment system. For this service, people, especially businessmen can transfer funds from one place to another place very quickly. 1. Pay Order 2. Demand Draft 3. Mail Transfer 4. Telegraphic Transfer/Telephone Transfer. 1.
2.
Pay Order (PO): Pay order gives the payee the right to claim payment from the issuing bank; order can be enchased from issuing branch only. Unlike Cheque, there is no possibility of dishonoring Pay Order because before issuing pay order bank takes out money of the pay order in advance. Pay Order cannot be endorsed or crossed, and so it is not negotiable instrument. Payment order issued against tender. Advertisement of different purpose. Payment order payment receives by customer from issuing branch by collection as in cash. Demand Draft (DD): Demand Draft is an order of issuing draft on another of the same bank to pay specified sum of money to payee on demand. It is generally issued when customer wants to remit money in any place, which is outside of the clearinghouse area of the issuing branch. Payee can be the purchaser himself or another mentioned in the DD. It is a safe technique of transferring money from one place to another place. Bearing money may be risky. It is a negotiable instrument. It can be crossed or not. For payment of DD, paying branch first has to be confirmed that the DD is not forged one. First bank checks the Test Code mentioned on the draft. If the Test Code agrees, then the bank believes that DD is not forged and makes payment. For further confirmation, the issuing bank sends an advice about the DD to the paying branch. Without advice, the paying branch generally does not pay.
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Report on Pubali Bank Limited 3.
4.
Mail Transfer (MT): It is least used technique for transferring fund. Where there is no telex or telephone line, then this method is used. It is also time consuming and risky because mail may be missed. Bank can issue M.T. as per request of the customer on any branch of the same bank. Telephone/Telegraphic Transfer (TT): When money is urgent, the bank use telephone for remittance. This service is only provided for valued customers who is very reliable and with which bank has long-standing relationship. Test Code is also furnished on the TT message for the protection of it.
4. 2. Accounts: Establishment: This section deals with employee’s salary, many types of internal expenses such as purchase of pen, paper, equipment, machinery and payment of labor cost and employee conveyance. In case of leave of absence employee collects prescribed from this section. Accounts: Only four days are not enough to cover this section. So it was very difficult to one to go in details. This section is related with all departments. All types of books and records are maintained here. Computer is used to prepare daily statement and posting the entry. Five books are maintained here in following headings: 1. Daily position 2. Clean Cash 3. Extract 4. General ledger 5. Daily statement of affairs 6. Statement of affairs for every month. 7. Credit & dr. supplementary for current deposit & saving account. 8. Supplementary for sundry assets. 9. Supplementary for expenditure & income. 10. Stock of stationary. And account section also mail budget Performa for every next year. 4.3. Test Arrangement For all these techniques of remittance except telephone transfers, Test is deployed. Test is security number by decoding, which the paying bank can be sure that DD/TT/MT is not, forged one. Only respective officers know the test number and this number are changed frequently. Bank maintains secret code for each of its officers, date, week, year, and amount to be transferred. Only authorized officer has access to these code numbers. By using this code number, bank makes separate code each DD/TT/MT. Authorized officer of paying branch can decode it. 4.4. FDR: 28
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Report on Pubali Bank Limited FDR for 1 year but encased before this period say about customer will come in 7 month then he will get the principal amount & as penalty he will get interest for 1 month & interest rate will be for 3 months that is 8%. FDR is paid after deducting the two expenses: a) Excise duty, b) 10% income tax at source. FDR holder may claim interim interest, e.g. claim days of A/C opening, no interest is given. But for further withdrawal after 30 days but before maturity, account holder will get interest equal to interest on saving account (interest on saving account is off course less than that on fixed deposit). Liquidation of FDR: Only the account holder himself and the authorized person can liquid the FDR after maturity. In case of joint name, authentication from both is necessary. In case of Either of Survivorship clause any one can liquid. In case of Death, the survivor cannot encase the FDR even if there exist the either or survivor clause—succession certificate from the court is needed. Terms used in General Banking •
Advice: Request to credit its account with another, or request for Permission to debit another’s account.
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Bill: All kinds of cheques, Pay Order and Demand Draft are called bill.
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Chit: Currency left after hundred pieces of notes of some Denomination.
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Credit Voucher: By which bank credit any account.
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Debit Voucher: By which bank debits any account.
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Dormant Account: Account in which no transaction takes place within one year.
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IBC: Inward Bill for Collection, which another bank/branch sends us to collect.
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IBCA: Inter Branch Credit Advice by which one branch credits the account of another branch/Head office.
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Inward Clearing Bill: Cheques received in clearing house.
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OBC: Outward bills for collection, which we send to another Branch/bank for collection in favor of us.
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Outward Clearing Bill: Cheques received on the counter for collection.
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Pay in slip: Slip by which money is deposited or paid to the bank.
3.8. Negotiable Instrument Act, 1881: Negotiable Instruments are Promissory Note, Bill of Exchange & Cheque payable either by order or to the drawer. 1. Promissory Note: Under Section # 04 of N.I. Act “ A Promissory Note is an instrument in writing containing an unconditional undertaking signed by the maker to pay a certain sum of money only to, or to the order of a certain person or to the bearer of the instrument.” 2. Bill of Exchange: Under Section # 05 of N.I. Act “ A Bill of Exchange is an instrument in writing containing an unconditional order, signed by the maker, directing a certain 29
Northern University of Bangladesh
Report on Pubali Bank Limited person to pay a certain sum of money to, or to the order of a certain person, or the bearer of the instrument.” 3. Cheque: Under Section # 04 of N.I. Act “A Cheque is a bill of exchange drawn on a specific banker and not expressed to be payable otherwise than on demand.” Bank Company Act, 1991: Bank Company Act, 1991 is divided in to 08 (eight) chapters and 123 (one hundred twenty three) sections. It is last amend mended in 1999 through Bangladesh Bank Circular No. 11 dated 20.07.99. Central bank is the authority to amend, revise and cancel this Act. All types of banking are regulated by this Act. Contract Act, 1932: The law of contract deals with agreements, which can be enforced through courts of law. The law of contract is the most essential part of commercial law, because every commercial transaction starts from an agreement between two or more persons. According to the Indian Contract Act of 1872 “An agreement enforceable at law is Contract.” Therefore, in a contract there must be: An Agreement The agreement must be enforceable by the law The Partnership Act, 1932: The Partnership Act of 1932 applies to partnership created by agreement between parties. “Partnership is the relation between persons who have agreed to share the profit of a business carried out by all or any of them acting for all.” According to this Act a partnership can not formed with more than 10 persons in Banking and 20 persons other types of business. The Bankers’ Book of Evidence Act, 1891: The Act states the following points: 1. A Certified copy of any entry in a bankers’ book shall accepted as a prima facie evidence of the existence of such entry. 2. A Certified copy shall be admitted as evidence of matters, transactions and accounts therein every case.
CHAPTER FIVE
≡Conclusion ≡
30
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Report on Pubali Bank Limited This report has attempted to explain the banking practices that followed by the Pubali Bank Ltd and also attempted to harmonize and link the theoretical knowledge acquired with the experience gathered from the practical orientation. Comparing practical knowledge with theoretical involves identification of weakness in the branch activities and making recommendation for solving the weakness identified. Though all departments and sections are covered in the internship program, it is not possible to go to the depth of each activities of branch because of time limitation. During the internship it is found that the branch provides all conventional banking services as well as some specialized financing activities to the economy. Foreign exchange service department of the branch in terms of manpower and profit earned. Thus by providing all the services related international and disburse credit if the proposal is sound. Thus by providing various services Pubali bank ltd is playing an important role in banking system and payment system of Bangladesh. Financial system of a country should contribute toward the development of an economy. In Bangladesh, banks are leading the financial system. So, it is obvious that banks should contribute to make the financial system more deep. In the arena, PCBs are playing vital role .But government and Bangladesh bank plays a crucial role to the PCBs through imposition of deposit restriction, lending rate and other banking operation. In the banking business PBL has shown better performance in every aspect viz deposit mobilization, advance, foreign exchange and innovation of different schemes. PBL is not only doing business but also contributing the society through its service. PBL has already taken a significant position in the private sector banking. If the government implements nominal policy then PBL will achieve their expected goal and will be able to contribute a vital role in the socio-economic perspective. During the 3 months internship program at Pubali bank Shariatpur Branch, almost all the desks have been observed more or less. Gaining knowledge of practical banking and to compare this practical knowledge with theoretical knowledge. Though all departments and sections are covered in the internship program, it is not possible to go to the depth of each activities of branch because of time limitation. So, objectives of this internship program have not been fulfilled with complete satisfaction. However, highest effort has been given to achieve the objectives the internship program. During the internship, it is found that the branch provides all the conventional banking services as well as some specialized financing activities to the economy.
≥ Recommendation ≥
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Report on Pubali Bank Limited Although this branch is making a huge amount of profit and generating a large volume of deposit, a number of problems have been detected while I was working in this branch. Based on my work experience at Pubali Bank Limited, Shariatpur branch, I would like to put the following recommendations: Bank needs to increase its quality of customer service. Branch should be innovative and diversified in its service. Need modern technology, without using modern technology no bank can even think of remaining in the business in near future. So the bank must decide right now how it can equip its branches with modern technology. Information system should be developing. Bank should be use INTERNET for local and international correspondence. Human resource is another sector for the branch to be developed urgently. Human resources, in the branch, are not equipped with adequate banking knowledge. Bank can arrange training program for these lacking. Chain of doing job in the branch should be made clear. In the branch chain of completing a work is not clearly defined, One employee sometimes performs same duty and in another time different employee performs it. So no employee can be held liable for defective work or for delay in work. Need to speed up processing of loan application. There being no restriction customer clients are found to move hither and thither inside the bank premises. This hinders the smooth functioning and amounts to security of the bank office should more careful about this. Computer division need to be up date and extensive for the greater welfare of the branch. Bank should be innovative and diversified in its services.
REFERENCE
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Report on Pubali Bank Limited 1. www.pubalibangla.com i) http://www.pubalibangla.com/pubali/BKHistory.htm, 14/07/10, 5pm ii) http://www.pubalibangla.com/pubali/BDDirector.htm 15/07/10, 7 pm iii) http://www.pubalibangla.com/pubali/ourservices.htm 13/07/10, 9 pm iv) http://www.pubalibangla.com/pubali/inttr.htm 12/07/10, 10 am v) http://www.dsebd.org/displaycompany.php?name=pubalibank 2. BANK COMPANY ACT-1991 3. COMPANY ACT-1994 4. WHAT BANKERS DOES- BY- MR. ABUL KASHEM. 5. Pubali Bank Annual Report – 2009. 6. Pubali Bank Training Institute Lecture Sheet 7. Fundamental of financial management : Evgene F. Brigham 10. Bangladesh Bank circulation
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