General Banking
1.1 Overview of Agrani Bank
Agrani Bank, a leading nationalized commercial bank with
870 outlets strategically located in almost all the commercial areas throughout
Bangladesh, overseas Exchange Houses and hundreds of overseas Correspondents,
came into being on March 26, 1972 with the promulgation of Presidential Order
no 26 of 1972. Under the Order Agrani Bank took over assets and liabilities of
the erstwhile Habib Bank Ltd. and Commerce Bank Ltd. functioning in the then
East Pakistan.
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| GENERAL BANKING |
The Bank enjoys the status of a company and functions in
terms of the Banking Company Ordinance and the Government of the People's
Republic of Bangladesh may change regulations of Bangladesh Bank (the Central
Bank) and upon such directions as from time to time.
The Bank, in 1972, started operation with only 249 branches
with its Head Office in Dhaka. There was hardly any liquid asset to run the
operation of the Bank smoothly. The Bank resumed its operational activities
with an authorized capital of Tk. 5.00 crore and paid-up capital of Tk. 1.00
crore. Initially the Bank had deposit of Tk. 96.17 crore, advances of Tk. 76.56
crore, borrowings of Tk. 29.48 crore and investment of Tk. 11.00 crore. The
Bank had commercial relationship with only 41 overseas correspondents in 1972.
As on Dec, 2004 the Bank has 870 Branches. Authorized
capital of Agrani Bank stands at Tk. 800.00 crore and Paid-up capital at Tk.
248.42 crore at the end of 2003. Besides commercial relationship with 399
overseas correspondents, Agrani Bank has also Special Taka Drawing Arrangements
with 20 Exchange Houses including Agrani Exchange House Pte. Ltd. in Singapore,
a subsidiary company fully owned by Agrani Bank.
In the initial phase, the Bank undertook steady expansion
programs all over the country by opening new branches, particularly in the
rural areas, with a view to extending banking services to the doorsteps of
rural people.
The Bank made a profit of Taka 26 crore in the Year 2003.
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| GENERAL BANKING |
1.2 Organizational Hierarchy of Agrani Bank
The policy direction and overall
management of the Bank is vested upon the Board of Directors consisting of six
members. The Government of the People's Republic of Bangladesh appoints the
Chairman and Members of the Board. Managing Director, the Chief Executive of
the Bank, is one of the members of the Board of Directors.
Deputy Managing Director and General Managers assist
managing Director. The Bank has seven Circle Offices, 30 Divisions and Units in
Head Office, 54 Zonal Offices, and 870 Branches including 10 Corporate and 40
AD (Authorized Dealer) Branches. The Corporate and AD Branches are authorized
to deal in Foreign Exchange Business.
Head Office Divisions are headed by
Deputy General Managers and controlled by designated General Managers. General
Managers and the Zonal Offices by Deputy General Managers or Assistant General
Managers head the Circle Offices, depending on size and importance of the Zones
from the commercial point of view. Deputy General Managers or Assistant General
Managers head the Corporate Branches and AD Branches.
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| GENERAL BANKING |
1.4 Opening an
Account
To open an account an individual has to carry out the
following formalities:
Step one : Obtain an application form.
Step two : Submit the duly completed
form to the concerned officer.
Step three : Face a brief interview.
Step four : Sign the specimen signature
card.
Step five : Deposit of money.
Step six : Get counter-folio of the
payment slip.
Once these formalities are carried out in appropriate
manner, the applicant is issued a checkbook and considered as a valid account
holder of the bank.
In case of joint accounts, the applicant must furnish the
following information:
Ø Name of the
parties who will operate the account and sign checks.
Ø At the
event of death of either or any of the account holders, how the balance will be
paid and to whom the securities (if any) will be delivered. The documentary and
the special instruction must be signed by all the joint account holders to
signify their consent.
Ø If the
client is a private or public limited company, the company has to give a
description about the type of the account and the operation of the account.
Specimen signature of the people who are authorized to open and operate the
account and the source of their authority.
1.5 Closing an account
In order to close an account the
holder has to place written application. After getting application, the bank
will deduct service charge at an amount of 25 and 50 against savings and
current deposit respectively as closing fee from the balance and the rest of the
money I s given to the customer.
1.6 Cash Payments
The cash
payment (check honoring) procedure is illustrated below:
Ø Customers
place the check to the ledger officer (LO). The LO receives the check, enters
its particulars in a register and issues the customer a token.
Ø The LO now
verifies the ledger of the customer. If the customer's account position is
okay, he passes the check to the second officer.
Ø The Second
Officer compares the signature of the customer with that on the signature card
kept in his custody. Then he makes an entry of the check in another register
and cancels it by signing across the check.
Ø Once the
check is cancelled that is Okayed for payment, it is brought to the cashier by
a peon.
Ø Cashier
enters the amount of the check in the cash register and pays the appropriate
amount to the customer.
Ø At the end
if the banking hour a trail balance is prepared from and all the registers are
compared with one another.
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| GENERAL BANKING |
1.7 Cash Receipts
Exhibit 4 demonstrates how cash is received at the counter
of the bank:
Ø After
placing deposit slip, the respective officer makes an entry to scroll register
book.
Ø This
receipt and cash are placed before cashier. He counts the amount of money first
and then makes and entry to another register book.
Ø Then the
Cashier passed the register to the second officer.
Ø After
verifying the receipt, the cashier returns the counter folio of the deposit
slip to the customer and keeps the other portion in his custody.
Ø At the end
of the banking hour trial balance is prepared from that cash receipt register
1.8 Different types of Deposits
The main task of a commercial bank is to collect deposit at
lower interest rate and to provide loan and take part in developing an economy
through mobilizing deposits. Because bank collects idle savings of people and
turns it to investment. By this way, bank becomes benefited and the national
economy of the country becomes enriched, people become able to keep their money
safe and receive interest from it. Bank mostly invests money from its deposit.
Savings Deposit
In this
account, the depositors can deposit money in their account as many times they
want but in a week, they are allowed to withdraw only 25% of the balance or Tk.
15000 at a time. If any depositor wants to withdraw more than twice in a week
or an amount more than 25% of the balance or more than Tk. 15000 at a time, in
a week, the customer has to notice the bank at least 7 days before; otherwise
the customer will receive no interest for the month. Agrani Bank gives interest
@ 7.5% per annum. The required initial deposit is Tk. 50 and this amount must
be left in order to keep the account alive. It may be mentioned here 15% of
savings deposit is treated demand deposit.
Current Deposit
Besides Savings Accounts Agrani Bank offers personalized
services to businessmen who maintain Current Accounts with any Branch. Though a
Current Account does not earn any interest, the Account Holder enjoys a lot of
benefits. Only Current Account Holders can apply for any loan offered by Agrani
Bank, if the Account Holder has excellent records of accomplishment in banking
as well as business arenas. Current Account Holder can draw money from his/her
account at any frequency.
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| GENERAL BANKING |
Fixed Deposit:
This type of deposit is very popular to the fixed income
earners. Fixed deposits are the deposits, which are accepted for a fixed
period. Bank maintains different term of this deposit and interest rate varies
with the variation of term. Minimum term is 3 months and maximum term is unlimited.
Deposit pension schemes (DPS)
Under this scheme, a depositor may contribute Tk. 100 or a
multiple of Tk. 100 per month not exceeding an amount Tk. 500 for a period of
10/20 years. It is a Government program. Interest rate is 15% to be compounded
annually. The service holders are the beneficiaries of this DPS. Money can be
withdrawn at a time or in installment after maturity. If any customer fails to
deposits his installments through a year then the contract will be inviolate
and he will get interest as like as saving A/C. The scheme is currently not
available.
Agrani Bank Pension Scheme (APS)
After closing the DPS program by the Govt. Agrani Bank
arranges APS for accumulation of savings. Under this scheme, a depositor may
contribute Tk. 100 or a multiple of Tk. 100 per month not exceeding an amount
Tk. 500 for a period of 5/10 years. Money can be withdrawn at a time or in
installment after maturity. Its properties are same as DPS.
Table 1: Interest earning Deposit scheme of Agrani
Bank
|
Schemes
|
Interest Rate
|
||
|
Savings
Account
|
3.50%
|
||
|
Short
Notice Term Deposit (SNTD) Account
|
2.00%
|
||
|
Term Deposit Accounts
Fixed Deposit Receipt (FDR) |
|||
|
|||
|
Agrani Bank Pension Scheme
|
|||
|
Term
|
Monthly Deposit
|
10.00%
|
|
|
5 years
|
TK 100 To TK 500
|
||
Source: www.agranibank.org
Table 2 :
Deposits position
Agrani
Bank, Saheb Bazar Branch, Rajshahi
As
on June 1, 2005
|
Name of
the Account
|
Number of
Accounts
|
Total
Amount of Deposit
(Amount
in crore)
|
|
Current
|
1273
|
12.00
|
|
Savings
|
5120
|
8.00
|
|
STD
|
645
|
20.00
|
|
FD
|
56
|
2.00
|
|
DPS
|
30
|
1.00
|
|
APS
|
1277
|
6.00
|
|
Others
|
-
|
5.00
|
1.9 Customer Service
Agrani Bank earns a huge amount of money by selling several
customer services. The Saheb Bazar Branch of the bank offers the following
services.
1.10 Inland Remittance:
The
instruments, used in inland remittance, are stated below:
Demand Draft (DD)
This is the most popular instrument of remittance. This is
an order to pay money drawn by one branch of a bank upon another branch of the
same bank for a particular amount of money which is payable to order and
demand. The commission for DD is Tk. 15 of Tk. 1000 to Tk.
10,000 and additional Tk. 1.5 for every thousand over Tk. 10,000.
Mail Transfer (MT)
Mail transfer is another means of remitting fund and is
similar to DD except that in case of MT; the customer (who is sending the
money) is not provided any papers but a receipt. The bank sends the MT papers
under its own responsibility to the respective branch. Here receiver must have
an account in the paying bank. The commission is Tk. 1.5 per Tk. 1000 and
postal charge of Tk. 10 for every issue.
Payment Order
It is a written document. This PO can be encased on that
branch from where it is issued. Several supplier organization use this PO and
here no account is needed to open with the bank. It is issued locally. The
contractors and suppliers use this instrument generally.
Telegraphic Transfer (TT)
TT is the fastest means of money transfer between two
branches of the same bank. This can be happened in two ways, Telegraphic and
Telephonic. In this case, the issuing branch sends a message telegraphically to
credit the specified amount to the beneficiary through his account maintained
with them or by issuing T.T.T.O if the beneficiary does not maintain account.
Telegraphic message may be coded or independence message but must be tested.
Paying branch will decode the TT being satisfied on the contents will make
payment by debits to issuing branch entering the TT into TT payable register
and preparing a credit voucher for credit to the payees account. But for big
amount of TT or in case of any doubt, confirmation must be obtained before
making payment.
Clearing House Function:
A
clearinghouse is an institution where reciprocal liabilities of local banks are
counter-balanced against each other. It includes off setting reciprocal claims
against each bank and setting such balances of difference outstanding.
Clearing is usually done two times in a day. The first at
9.30 a.m. ant the second at 1.00 p.m. At the first time, clearing officer
delivers cheque and claims.
At the second time, members confirm each other payment or
non-payment. The members of clearing house maintain accounts with the Bangladesh
Bank, through which the amount payable or receivable is usually settled.
1.11 Collection of Customers' Bills
Customers can liquidate a check drawn upon another bank.
Commercial banks perform this function for customers without any charge.
The collection procedure is shown in the flowchart below.
Other customer services of this branch include. The bank
does not receive any fees for these services.
a.
Collection of electricity bills for PDB
b.
Collection of telephone bills for T & T
c.
Collection of water bills for the Rajshahi City
Corporation.
d.
Provide L/C facility to the customer
e.
Wage Earner's Scheme
f.
Buying and selling of Foreign currency
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| GENERAL BANKING |
1.13 Loan and Advances
Lending is by far the most
important function of modern bank. It comprises a very large portion of a
bank’s total assets and forms the backbone of the bank’s structure. The
strength of a bank is, thus, primarily judged by the soundness of its advances.
A wise and prudent policy concerning advances is considered an important factor
inspiring confidence in the depositors and prospective customers of a bank.
Advances not only play an important part in gross earnings
of banks, but also promote the economic development of the country. All types
of business activity including trade, industry and agriculture have to depend
on bank finance in one form or the other. Banks, by canalizing accumulated
savings of the nation into productive uses, help both the depositors and the borrowers.
Banks assist in creating more avenues of employment and, thus, help raising the
standard of living of the people.
Table 3:
Interest Rates of different categories of Advances
|
Serial
|
Category
|
Interest Rate
|
|
|
Agriculture
|
-
|
|
1
|
a)
Crop Loan
|
10.00%
|
|
|
b)
Other Agriculture /Rural Credit
|
10.00%
|
|
2
|
a)
Big & Medium scale industrial Loan
|
11.00%
|
|
|
b)
Big & Medium scale industrial Loan (Thrust Sectors)
|
10.00%
|
|
3
|
Working
Capital
|
-
|
|
|
a)
Jute Industry
|
11.00%
|
|
|
b)
Other than Jute Industry
|
11.00%
|
|
4
|
Export
Credit
|
-
|
|
|
a)
Readymade Garments, Frozen fish, Agro-processing industrial goods
|
7.00%
|
|
|
b)
Other exports
|
9.00%
|
|
5
|
Commercial
Loan
|
-
|
|
|
a)
Import Finance, Fertilizer Loan and other Commercial loan
|
12.00%
|
|
|
b)
Jute Business (except export)
|
12.00%
|
|
6
|
a)
Small scale Industry ( up to 3 crore)
|
10.50%
|
|
|
b)
Small scale Industry ( above 3 crore)
|
10.50%
|
|
7
|
Others
|
-
|
|
A
|
i)
Residential House Building Loan
|
12.00%
|
|
|
ii)
Commercial House Building Loan
|
12.00%
|
|
B
|
i)
Rural House Building Loan
|
10.00%
|
|
|
ii)
Swanirvar Loan
|
10.00%
|
|
C
|
Special
Credit Scheme of Agrani Bank
|
-
|
|
|
i)
Poverty Alleviation, Self Employment, Rural Transport & Power Tiller
|
10.00%
|
|
|
ii)
Womens' Credit Scheme
|
11.00%
|
|
|
iv)
Credit scheme for unemployed youths for going abroad
|
12.00%
|
|
|
v)
Micro enterprise Credit Program
|
12.00%
|
|
|
f)
Small Enterprise Project
|
10.00%
|
|
D
|
Transport
& Brick Field
|
12.00%
|
|
E
|
Work-Order
|
12.00%
|
|
G
|
Cold
Storage
|
10.00%
|
|
H
|
Ministry
of Food
|
12.00%
|
|
I
|
B
A D C
|
-
|
|
Serial
|
Category
|
Interest Rate
|
|
J
|
Loan
against FDR
|
10.00%
|
|
K
|
Loan
against DPS
|
10.00%
|
|
L
|
Loan
against APS (10 years)
|
10.00%
|
|
M
|
Loan
against APS (5 years)
|
10.00%
|
|
N
|
Loan
against Defense Certificate, Wage Earners Bond, National Investment Bond, ICB
Unit, Bangladesh Savings Certificate
|
10.00%
|
|
O
|
Loan
against Share / Debenture
|
12.00%
|
|
P
|
Loan
(others)
|
13.00%
|
|
8
|
Project
Loan to export oriented Industry
|
9.00%
|
|
|
A)
Term Loan (Thrust Sector)
|
-
|
|
|
i)
Agro-based Industry (except cold storage)
|
9.00%
|
|
|
ii)
Computer Software & IT/data export
|
9.00%
|
|
|
iii)
Electronics
|
9.00%
|
|
|
iv)
Artificial Flower Production
|
9.00%
|
|
|
v)
Frozen Food (including Frozen , chicken & Meat)
|
9.00%
|
|
|
vi)
Export oriented non traditional Agro-product
|
9.00%
|
|
|
vii)
Gift Items
|
9.00%
|
|
|
viii)
100% export oriented finished leather goods
|
9.00%
|
|
|
ix)
100% export oriented jute goods
|
9.00%
|
|
|
x)
Jewellery & Diamond cutting & Polishing
|
9.00%
|
|
|
xi)
Silk worm cultivation & sericulture industry
|
9.00%
|
|
|
xii)
Stuffed Toys
|
9.00%
|
|
|
xiii)
100% export oriented textile industry (except Garments)
|
9.00%
|
|
|
xiv)
Oil & Gas
|
9.00%
|
|
9
|
Cash
Credit / Hypothecation to Export Oriented Industry (except LC and Bank
Guaranty)
|
12.00%
|
|
10
|
Working
Capital
|
-
|
|
|
a)
Back to Back LC
|
-
|
|
|
b)
1-PSC (Pre Shipment Credit) to Garments Industry
|
7.00%
|
|
|
2-Packing
Credit
|
7.00%
|
|
11
|
Loan
for import capital machinery for Export Industry
|
9.00%
|
Source: www.agranibank.org
Special Note: Rebate at
the rate of 5% to 10% of accumulated interest is offered as incentives to those
borrowers who repay their loans regularly
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