Chapter 1 Introduction

1.0 BACKGROUND OF THE STUDY:

After completing my post graduation as a student of BBA from Southeast University, I wanted to do Internship in a reputed Bank, which would be helpful for my future professional career. I got the opportunity to perform my internship in the IFIC Bank Ltd. I was sent to Shantinagar Branch. It was a two months long practical orientation program. This report is originated as the requirement of IFIC Bank Ltd.

1.1 OBJECTIVE OF THE STUDY:

The primary objective of this report is to comply with the requirement of the IFIC Bank Ltd. However, the objective behind this study is something broader. Objectives of the study are summarized in the following manner: To apply theoretical knowledge in the practical field. To make a bridge between the theories and practical procedures of banking dayto-day operations. To gain practical knowledge by working in different desks of Foreign Exchange branch of IFIC Bank To observe the working environment in commercial banks. To study existing banker-customer relationship. To know the overall functioning of IFIC Bank Limited. To have some practical exposures that will be helpful for my future career.

1.2 SCOPE OF THE STUDY:

As I was sent to IFIC Bank, Shantinagar Branch, the scope of the study is only limited to this branch. The report covers its overall department wise function, structure and performance. The report also covers details about IFIC Bank.

1.3 LIMITATIONS:
1. The time, 68 working days, is insufficient to know all activities of the branch and prepare the report. 2. It was very difficult to collect the information from various personnel for their job constraint. 3. As some of the fields of banking are still not covered by our courses, there was difficulty in understanding some activities. 4. Another limitation of this report is Banks policy of not disclosing some data and information for obvious reason, which could be very much useful. 5. Because of the limitation of information, some assumption was made. So there may be some personal mistake in the report 6. I carried out such a study for the first time, so inexperience is one of the main constraints of the study.

1.4 METHODOLOGY:
This report has been prepared on the basis of experience gathered during the period of internship from September 02, 2010 to November 02, 2010. For preparing this report, I have undergone group discussion, collected data, sent some questionnaires to the selected Officers, and interviewed with some of them. I also studied different circulars and files of the bank. I hope these criteria will be enough to find out different picture of financial performance of the selected bank (IFIC Bank Limited)

The Process of Preparing the Report

SELECTION OF TOPIC

DESIGN

Working experience in deferent department

PRACTICAL INVOLVEMENT IN THE INTERNSHIP PROGRAM

COLLECTION OF DATA, INFORMATION & KNOWLEDGE

Interviewing officers Official documents and instrument, internet etc

Personal Concept, findings etc

ANALYSIS OF DATA

REPORT

1.5 Review of Literature

Most of the studies conducted on the IFIC Bank Limited have been reviewed in the subsequent section. Mohammad Rezaul Karim, Proposed loans & advances in banking sector, recommends that the bank should analyze the financial statements of the company and decide to invest in that company. Ashraf and Joarder, The Effect of Information Technology on Stock Market Trade Volume and Volatility: Case for Dhaka Stock Exchange in Bangladesh, suggest that the improvement of information technology to easy the trading process of securities. Hassan and Islam, Market Efficiency, Time-Varying Volatility and Equity Returns in Bangladesh Stock Market, emphasized the timely disclosure and dissemination of information to the shareholders and investors on the performance of listed companies. Mustafizur Rahman, Bangladesh-An Emerging Banking Sector, argued the Banks watch dog should take appropriate measures to ensure a rational and sound growth taking into consideration the growth strategy of the share market.

From the above study and analysis of journals and articles we found that the more analysis is needed to examine the activities of IFIC Bank Limited. For this purpose we are going to take a research to analyze the lackings and find the solution.

Chapter 2 Profile of the IFIC Bank Limited

Profile of the IFIC Bank limited

2.1 History
International Finance Investment and Commerce (IFIC) Bank Limited started banking operations on June 24, 1983. Prior to that it was set up in 1976 as a joint venture finance company at the instance of the Government of the People's Republic of Bangladesh. Government then held 49 percent shares while the sponsors and general public held the rest.

IFIC was one of the pioneer private Bank in adopting IT from its inception during 1985. At present, they are using high-level automation systems all through their branches and they are playing a vital role in our banking automation system. To expand computerization facilities to all the branches of their bank and to reach improved IT facilities to the bank's customer they are using high-level Banking Automation System

2.2 Objectives of the Organization

The objectives of this bank were to establish joint venture Banks Finance Companies and affiliates abroad and to carry out normal functions of a finance company at home. When the Government decided to open up banking in the private sector in 1983, the above finance company was converted into a full-fledged commercial Bank. Along with this, the Government also allowed four other commercial Banks in the private sector. Subsequently, the Government denationalized two Banks, which were then fully Government-owned. While in all these Banks Government held nominal 5 percent shares, an exception was made in the case of this Bank. It retained 40 percent shares of the Bank.

The decision by the Government to retain 40 percent shares in IFIC Bank was in pursuance of the original objectives, namely, promotion of joint participation of Government and private sponsors to establish joint venture Banks, financial companies, branches and affiliates abroad.

2.3 Mission & Vision

The mission & vision of IFIC is to provide service to their clients with the help of a skilled and dedicated workforce whose creative talents; innovative actions and competitive edge make their position unique in giving quality service to all institutions and individuals that they care for. They are committed to the welfare and economic prosperity of the people and the community. They want to be the leader among banks in Bangladesh and make their indelible mark as an active partner in regional banking operating beyond the national boundary. In an intensely competitive and complex financial and business environment, they particularly focus on growth and profitability of all concerned.

2.4 Corporate Profile

Managing Director, ex-officio Director of the Board, is the Chief Executive Officer (CEO) of the Bank. Under direct control of the Managing Director is the Advisor, Credit Policy & Risk Management. The operations and activities at the Head Office have been divided into 10 Groups; each headed by a Group Executive who reports directly to the Chief Executive. Secretary's Division, which is outside these Groups, reports directly to the Managing Director. All Divisions at Head Office are required to report to the respective Group Executives. Without the help of some active divisions a bank cannot run in a proper way As well, IFIC has some divisions with some real active people. So, IFIC is running properly with the help of these divisions.

2.5 Management Hierarchy:

Chairmen Board of director Managing director Deputy managing director Executive vice president Senior vice president Vice president Senior assistant vice president Assistant vice president Senior Principal Officer Principal Officer Senior Officer Officer Junior Officer Astt. Officer

2.6 Branch Network of IFIC Bank Limited

# Dhaka Division # Chittagong Division # Sylhet Division # Khulna & Barisal Division # Rajshahi Division The Graphical View of Branches: These are the branches through which IFIC Bank works:

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# Dhaka Division: The Branches of Dhaka division are: 1. Motijheel Branch 2. Federation Branch 3. Moulvibazar Branch 4. Dhanmondi Branch 5. Shantinagar Branch 6. Gulshan Branch 7. Islampur Branch 8. Bangshal Branch 9. Elephant Road Branch 10. Naya Paltan Branch 11. Kawran Bazar Branch 12. Malibagh Branch 13. Narayanganj Branch

14. Netaiganj Branch 15. Konabari Branch 16. Muktarpur Branch 17. Narsingdi Branch 18. Ghorasal Branch 19. Madhabdi Branch 20. Bajitpur Branch 21. Mymensingh Branch 22. Faridpur Branch 23. Uttara Branch 24. Lalmatia Branch

# Chittagong Division: The Branches of Chittagong Division are: 1. Agrabad Branch 2. Khatunganj Branch 3. Terri Bazar Branch 4. Sheikh. Market Branch 5. Hathazari Branch 6. Chowk Bazar Branch 7. Shan Amanat Market Branch 8. Sheika Mujib Road Branch 9. Cox's Bazar Branch 10. Brahmanbaria Branch 11. Comilla Branch 12. Feni Branch

# Sylhet Division: The Branches of Sylhet Division are: 1. Sylhet Branch 2. Beani Bazar Branch 3. Tultikar Branch 11

4. Subid Bazar Branch 5. Moulvi Bazar Branch # Khulna & Barisal Division: The Branches of Khulna & Barisal Division are: 1. Khulna Branch 2. Jessore Branch 3. Satkhira Branch 4. Noapara Branch 5. Kushita Branch 6. Barisal Branch # Rajshahi Division: The Branches of Rajshahi Division are: 1. Rajshahi Branch 2. Naogaon Branch 3. Pabna Branch 4. Rangpur Branch 5. Dinajpur Branch 6. Bogra Branch 7. Capai Nawabganj Branch The organization system of IFIC is strong from its very beginning and still the organization system is improving.

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2.7 Product & Services

Corporate Banking
The motto of IFIC's Corporate Banking services is to provide a personalized solutions to our customers. The Bank distinguishes and identifies corporate customers' need and designs tailored solutions accordingly. IFIC Bank Ltd. offers a complete range of advisory, financing and operational services to its corporate client groups combining trade, treasury, investment and transactional banking activities in one package. Whether it is project finance, term loan, import or export deal, a working capital requirement or a forward cover for a foreign currency transaction, our Corporate Banking Managers will offer you the accurate solution. Our corporate Banking specialists will render high class service for speedy approvals and efficient processing to satisfy customer needs. Corporate Banking business envelops a broad range of businesses and industries. You can leverage on our know-how in the following sectors mainly: Agro processing industry Industry (Import Substitute / Export oriented) - Export Oriented Garments, Sweater. - Food & Allied - Paper & Paper Products - Engineering, Steel Mills - Chemical and chemical products etc. Telecommunications. Information Technology Real Estate & Construction Wholesale trade Transport Hotels, Restaurants Non Bank Financial Institutions Loan Syndication 13

 Project Finance Investment Banking Lease Finance Hire Purchase International Banking Export Finance Import Finance

Personal.Banking
Personal Banking of IFIC Bank offers wide-ranging products and services matching the requirement of every customer. Transactional accounts, savings schemes or loan facilities from IFIC Bank Ltd. make available you a unique mixture of easy and consummate service quality. We make every endeavor to ensure our clients' satisfaction. Our cooperative & friendly professionals working in the branches will make your visit an enjoyable experience. Deposit Accounts Q-Cash Round the Clock

Deposit Accounts
NEW SCHEMES IFIC offers the following key Personal Banking Services: Current Deposit Account Savings Deposit Account Short Term Deposit Account Fixed Deposit Account No limit to the number of withdrawals No minimum balance fee Statement of account at your desired frequency

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 Free cheque book Q-Cash Round the Clock Banking All types of general banking facilities Attractive and competitive interest rate

International Trade Finance

International Trade forms the major business activity undertaken by IFIC Bank Ltd. The Bank with its worldwide correspondent network and close relationships with key financial institutions provides an extensive trade services network to handle your transactions efficiently. Our key branches in Dhaka, Chittagong, Sylhet and Naogaon are staffed by personnel experienced in International Trade Finance. These offices are the focal point for processing import and Export transactions for both small and large corporate customers. We offer a complete range of Trade Finance services. Our professionals will work with you to develop solutions tailored to meet your requirements, through mobilizing our full range of trade services locally, and drawing on our global & resources. We can offer you professional advice on all aspects of International Trade requirements, namely: Issuing, advising and confirming of Documentary Credits. Pre-shipment and post-shipment finance. Negotiation and purchase of Export Bills. Discounting of Bills of Exchange. Collection of Bills. Assist customers to insure all risks. Foreign Currency Dealing etc. Import and Export transactions for both small and

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Q-CASH:

Q-CASH ROUND THE CLOCK SERVICE

IFIC Bank Q-Cash ATM Card enables you to withdraw cash and do a variety of banking transactions 24 hours a day. Q-Cash ATMs are conveniently located covering major shopping centres, business and residential areas in Dhaka and Chittagong. ATMsin Sylhet, Khulna and other cities will soon start be introduced. The network will expand to cover the whole country within a short span of time. With your IFIC Bank Q-Cash ATM card you can:

Cash withdrawal Round The Clock from any Q-Cash logo marked ATM booths. POS transaction (shopping malls, restaurants, jewellaries etc) Enjoy overdraft facilities on the card (if approved)

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Utility Bill Payment facilities Cash transaction facilities for selective branches nationwide ATM service available in Dhaka and Chittagong Withdrawal allowed from ATM's of IFIC Bank Ltd., AB Bank, The City Bank, Janata Bank, IFIC Bank, Mercantile Bank, Pubali Bank, Eastern Bank Ltd. respectively And more to come Is Q-Cash

Q-cash is secured, because: Q-Cash cardholders can only carry out transactions on Q-Cash ATMs with Personal Identification Numbers (PIN). The PIN is a unique 4-digit number that allows you to access your account. You can change your PIN anytime from ATM machine. In case you have lost your card, transactions cannot be done without the PIN. IFIC Bank Limited (IFIC) has installed its first Q-cash ATM at Dhanmondi Branch, Dhaka. IFIC Bank (IFIC) is going to issue VISA card soon.

In line with the issuance of Q-cash products IFIC is going to introduce VISA card very soon.

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SWIFT
IFIC Bank Limited (IFIC) is the member of SWIFT (Society for Worldwide Inter-bank Financial Telecommunication). SWIFT is a member owned co-operative, which provides a fast and accurate communication network for financial transactions such as Letters of Credit, Fund transfer etc. By becoming a member of SWIFT, the bank has opened up possibilities for uninterrupted connectivity with over 5,700 user institutions in 150 countries around the world.

E-Cash & Online Banking:

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E- cash: A New Dimension in Banking

Online Banking
IFIC Bank Limited has introduced real-time any branch banking on April 05, 2005. Now, customers can withdraw and deposit money from any of its 23 branches located at Dhaka, Chittagong, Sylhet, Gazipur, Bogra, Naogaon, Narayanganj and Munshigonj. Our valued customers can also enjoy 24 hours banking service through ATM card from any of Q-cash ATMs located at Dhaka, Chittagong, Khulna, Sylhet and Bogra. All the existing customers of IFIC Bank Limited will enjoy this service by default. Key features:

Centralized Database Platform Independent Real time any branch banking Internet Banking Interface ATM Interface

Major Products / Services Provided By Authorized Dealer (AD)

Branches:
FOREIGN TRADE:

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For Importers:
Opening letters of credit Providing necessary financing facilities to the importers

For Exporters:
Advising of Export Letters of Credit

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Confirmation of Export Letters of Credit Providing collection services of export bills Negotiation of Export documents Providing Export financing facilities Issuing of Foreign guarantees favouring beneficiaries within Bangladesh and overseas beneficiaries

Remittance:
Outward remittance by telegraphic transfers and payment of inward telegraphic transfers. Issuance of demand drafts(AUD,CAD,EURO,US$ and GBP) Handling of students file of the students going abroad for educational purpose (AUD, CAD, EURO, USD, GBP). Issuance of AMEX and THOMAS COOK BRAND Travelers Cheques (in US$). Issuance of Foreign Currencies (in US$ and GBP).

Deposit Products in Foreign Currencies:

IFIC offers following wonderful opportunities to build savings and investment in foreign currencies in US$ and GBP at attractive rates:

Foreign Currency Account (FCAD, FCAP): Foreign Currency Account by (a) Bangladesh nationals residing abroad (b) Foreign nationals residing abroad or in Bangladesh and also foreign firms registered abroad and operating in Bangladesh or abroad (c) Foreign missions and their expatriate employees bringing foreign exchange by inward remittance. Resident Foreign Currency Deposit (RFCD): Foreign Currency Account for Bangladesh residents bringing foreign exchange at the time of return from

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travel abroad. Non-Resident Foreign Currency Deposit (NFCD): Interest bearing Foreign Currency term Deposit Account for Bangladesh nationals living abroad.

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Chapter 3 Analysis & Findings

3.1 General Banking:

General Banking involves the following items. They are:

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 Accounts opening Clearing Remittance Accounts Cash 3.1.1 Account Opening

What it is?
Opening of an account binds the Banker & Customer & into a contractual relationship. Customer relationship establishes through opening an account. Generally who are receiving banks service we may call them as a customer. But bank considers them as customers who have an account with them. Bankers his to maintain some common principles & procedures for open almost all deposit accounts. There are different types of account. We may classify, the deposits accounts based on their operation & nature of account holder. A brief discussion regarding the procedure of opening different types of account in local currency (based on nature of organization) is described as under.

NEW SCHEMES Marriage Deposit Scheme

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Marriage of children, especially daughter is a matter of great concern to the parents. Marriage of children involves expense of considerable amount. Prudent parents make effort for gradual building of fund as per their capacity to meet the matrimonial expense of their children specially daughters. Parents get relief and can have peace of mind if they can arrange the necessary fund for marriage of their children, no matter whether they survive or not till the marriage occasion. It can be a great help to the parents if there is any scope of deposit of a modest amount as per their financial capacity, which grows very fast at high rate of interest yielding a sizeable amount on maturity.

With this end in view IFIC has introduced Marriage Deposit Scheme, which offers you an opportunity to build up your cherished fund by monthly deposit of small amount at your affordable capacity.

Eligibility:
Marriage Deposit account can be opened in the name of children below the age of 18 years along with legal guardian. For opening a marriage deposit account, maintenance a savings account with IFIC is required.

Terms & Conditions:

Bank reserves the right to close the scheme if customers fail to deposit 3-consecutive installments.

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 If the Scheme is closed within 6-months, customer will get the deposited amount only and no interest/profit will be paid for the Scheme. If it is closed after 6-months, customers will get the deposited amount along with the interest at the normal savings rate upto the time of closure. Duties and taxes are payable by the customers as per government rules. The above figures are indicative only and subject to change from time to time. Money Laundering Prevention Act shall be exercised as per rules of Bangladesh Bank.

Lakhpati Deposit Scheme

To become a lakhpati is a dream to most of the people of Bangladesh specially to the lower and lower middle class income group. We experience our expectations and wants are enormous in nature in our small span of life. To meet our deposit and wants we need right plan. Keeping the above in mind IFIC has introduced Lakhopati Scheme which has flexibility in report of maturity and monthly installment as per affordable capacity.

Terms & Conditions:

Bank reserves the right to close the scheme if customers fail to deposit 3-consecutive installments. If the Scheme is closed within 6-months, customer will get the deposited amount only and no interest/profit will be paid for the Scheme. If it is closed after 6-months, customers will get the deposited amount along with the interest at the normal savings rate upto the time of closure. Duties and taxes are payable by the customers as per government rules. The above figures are indicative only and subject to change from time to time. Money Laundering Prevention Act shall be exercised as per rules of Bangladesh Bank.

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Millionaire Deposit Scheme

It is a dream for many small savers to become a Millionaire. The word Millionaire is really exciting. This dream can be a reality if you have a calculated plan and strong determination. IFIC has introduced Millionaire Deposit Scheme which has flexibility in respect of period and monthly deposit as per your affordable capacity for giving a sum of Tk.1.00 (one) million i.e. Tk.10 (ten) lac at a time.

Eligibility:
Millionaire Deposit account can be opened at any Branch of IFIC For opening a millionaire deposit account, maintenance a savings account with IFIC is required. Customer can deposit monthly installment through any of our online branches Under standing instruction system, Customer can deposit money automatically his accounts.

Terms & Conditions:

1. Bank reserves the right to close the scheme if customers fail to deposit 3-consecutive installments. 2. If the Scheme is closed within 6-months, customer will get the deposited amount only and no interest/profit will be paid for the Scheme. If it is closed after 6-months, customers will get the deposited amount alongwith the interest at the normal savings rate upto the time of closure. 3. Duties and taxes on the deposit, if any, are payable by the customers as per government rules. 4. The above figures are indicative only and subject to change from time to time.

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5. Money Laundering Prevention Act shall be exercised as per rules of Bangladesh Bank.

Kotipati Deposit Scheme:

To become Kotipati is simply a dream for the most of the populace of Bangladesh. It is realizable for high income group who have strong determination and savings habit. If you decide and plan to save money from your regular income, you can own Tk1.00 crore easily by making a planned savings. In this regard, IFIC has introduced Kotipati Deposit Scheme offering the savings plan fit to your income and to execute your dream to be a Kotipati by monthly deposit at your affordable capacity. You can take advantage of the Kotipati Deposit Scheme from IFIC and plan for your golden future accordingly.

Eligibility:
Kotipati Deposit account can be opened at any Branch of IFIC. For opening a Kotipati deposit account, maintenance a savings account with IFIC is required.

Terms & Conditions:

Bank reserves the right to close the scheme if customers fail to deposit 3-consecutive instalments. If the Scheme is closed within 6-months, customer will get the deposited amount only and no interest/profit will be paid for the Scheme. If it is closed after 6-months, customers will get the deposited amount alongwith the interest at the normal savings rate upto the time of closure. Duties and taxes on the deposit, if any, are payable by the customers as per government rules.

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The above figures are indicative only and subject to change from time to time. Money Laundering Prevention Act shall be exercised as per rules of Bangladesh Bank.

Education Savings Scheme

Education is a basic need of every citizen. Every parent wants to impart proper education to their children. Education is the pre-requisite for socio-economic development of the country. As yet, there is no arrangement of free education to the citizens from the government level. As such, there should be pre-arrangement of fund to ensure higher education of the children. Otherwise higher education may be hindered due to change of economic condition, income of the parents at the future time when higher education shall be required. Todays higher education is becoming expired day by day. Parents can get relief and can have peace of mind if they can arrange the necessary fund for higher education of their children. As such, IFIC has introduced Education Savings Scheme which offers you an opportunity to build up your cherished fund by monthly deposit of small amount at your affordable capacity or initial lump sum deposit to yield handsome amount on a future date to meet the educational expenses. Under this Scheme you have the different attractive options to avail the future benefit i.e. withdrawal of the total amount accumulated in lump sum or withdrawing monthly benefit to meet educational expense keeping the principal amount intact or to withdraw both principal and accumulated profit monthly for a certain period.

Savings Plan and Benefit:

Note: i. Duties and taxes are payable by the customer as per government rules. ii. The customer has the option for withdrawing total accumulated amount including principal on maturity date at a time or taking monthly benefit during the next 5(five) years after maturity encashing principal deposit and interest. Note: i. Duties and taxes are payable by the customer as per government rules.

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ii. The customer has the option for withdrawing total accumulated amouincludin principal on maturity date at a time or taking monthly benefit during the next 5(five) years after maturity encashing principal deposit and interest or monthly benefit during the next 5(five) years from the date of maturity keeping the principal deposit amount intact.

Eligibility:
Education Savings account can be opened in the name of children below the age of 18 years along with legal guardian. For opening a education savings account, maintenance a savings account with IFIC is required.

Terms & Conditions:

Bank reserves the right to close the scheme if customers fail to deposit 3-consecutive installments. If the Scheme is closed within 6-months, customer will get the deposited amount only and no interest/profit will be paid for the Scheme. If it is closed after 6-months, customers will get the deposited amount along with the interest at the normal savings rate upto the time of closure. Duties and taxes are payable by the customers as per government rules. The above figures are indicative only and subject to change from time to time. Money Laundering Prevention Act shall be exercised as per rules of Bangladesh Bank.

Monthly Benefit Scheme (MBS)

IFIC Bank Limited has introduced Monthly Benefit Scheme (MBS) for the prudent persons having ready cash and desiring to have fixed income on monthly basis out of it without taking risk of loss and without encashing the principal amount. This scheme 29

offers highest return with zero risk. You can plan your monthly expenditure with the certain monthly income under the scheme. Note: Government tax and other charges, if any are included with the above benefit/figure.

How to apply:
You have to open an account with any branch of IFIC. The above noted monthly benefit will be deposited in this account in each month.

Eligibility:
Any person having age of above 18-years can participate in this scheme through opening a savings or current account with any branch of IFIC Customer must be Bangladeshi Nationals/Citizen. Persons below 18-years of old may open this account with his/her legal guardian

Characteristics:
Minimum deposit: Tk.1 (one) Lac Maximum deposit: Any amount multiple of Tk.1 (one) Lac After opening the account, the profit element will be deposited in that account Upon maturity the term may be renewed for the next tenure.

Overdraft facility:
The concerned customer can avail loan facility upto 80% of the initial deposit.

Terms & Conditions:

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Bank reserves the right to change the rate of profit during the tenure of deposit. No loan facility will be allowed from any other Bank(s)/Financial Institution against the deposited amount except IFIC. The initial deposited amount and term shall not be changed before maturity. If the Scheme is closed within 6-months, customer will get the deposited amount only and no interest/profit will be paid for the Scheme. If it is closed after 6-months, customers will get the deposited amount alongwith the interest at the normal savings rate upto the time of closure. Duties and taxes on the deposit, if any, are payable by the customers as per government rules. Money Laundering Prevention Act shall be exercised as per rules of Bangladesh Bank. Double/Triple Growth Deposit Scheme For people who have cash flow at this moment and want to get it doubled/tripled quickly IFIC has introduced Double/Triple Growth Deposit Scheme that offers you to make double/triple your money within 6(six) years and 9.5 (nine and a half) years respectively resulting a high rate of interest.

Eligibility:
Any person having age of above 18-years can participate in this scheme through opening a savings or current account with any branch of IFIC Customer must be Bangladeshi Nationals/Citizen. Persons below 18-years of old may open this account with his/her legal guardian

Characteristics:
Minimum deposit:Tk.1(one) lac Maximum deposit:Any amount multiple of Tk.1(one) lac

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How to apply:
You have to open an account with any branch of IFIC having deposit of the above figure.

Overdraft facility:
The concerned customer can avail loan facility upto 80% of the deposited amount.

Terms & Conditions:

Bank reserves the right to change the rate of profit during the tenure of deposit. No loan facility will be allowed from any other Bank(s)/Financial Institution against the deposited amount except IFIC. The initial deposited amount shall not be changed before maturity. If the Scheme is closed within 6-months, customer will get the deposited amount only and no interest/profit will be paid for the Scheme. If it is closed after 6-months, customers will get the deposited amount alongwith the interest at the normal savings rate upto the time of closure. Duties and taxes on the deposit, if any, are payable by the customers as per government rules. Money Laundering Prevention Act shall be exercised as per rules of Bangladesh Bank.

Monthly Savings Scheme (MSS)

Savings is the best friend in your bad days. Small savings can build up a prosperous future. Savings can meet up any emergencies. IFIC has introduced Monthly Savings

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Scheme (MSS) that allows you to save on a monthly basis and get a handsome return upon maturity. If you want to build up a significant savings to carry out your cherished dream, IFIC MSS is the right solution.

Eligibility:
MSS account can be opened at any Branch of IFIC. For opening a MSS account, maintenance a savings account with IFIC is required.

Facility:
The concerned customer can avail loan facility up to 80% of the deposited amount. The can deposit the monthly instilment at any branch of IFIC and the same through online banking. Monthly installment can be automatically collected from your savings account maintained with IFIC. Customer can choose any day of the month as installment date.

Terms & Conditions:

Bank reserves the right to close the scheme if customers fail to deposit 3-consecutive installments. If the Scheme is closed within 6-months, customer will get the deposited amount only and no interest/profit will be paid for the Scheme. If it is closed after 6-months, customers will get the deposited amount alongwith the interest at the normal savings rate upto the time of closure. Duties and taxes on the deposit, if any, are payable by the customers as per government rules. The above figures are indicative only and subject to change from time to time.

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 Money Laundering Prevention Act shall be exercised as per rules of Bangladesh Bank. No loan facility will be allowed from any other Bank(s)/Financial Institution against the deposited amount except IFIC.

Documents required:
Declaration from customer regarding liability with other Banks & Financial Institutions. Declaration from customer regarding loan default status Documentation as per usual Bank practice.

Others:
Customers may visit any of the Branches and discuss with Manager/Customer Services Desk. Customer shall have to open a Savings/Current A/C with any of the IFIC Branches unless already maintain an A/C relationship. Repayment has been made simple which can be automatically debited from the A/C. Customers Need to maintain / deposit money to meet installment payments. Prepayment of Loan is allowed with no Penalty fees, However, no Partial payment shall be allowed. Full identification of the Account introducer shall be maintained. Failure to make three consecutive installments will result in immediate follow up action including contacting the guarantors and serving notices.

3.1.2 Clearing

CLEARING DEPARTMENT:

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Accounts section deals with the income and expenditure of the branch and stores each and every transaction of the bank. The accounts officers check all the paper works like bills, vouchers, checks and deposit slips every day. They also prepare a supplementary sheet. Supplementary sheet is prepared for banks transaction security to avoid any fraud or misguidance. A Principal Officer is designated in Dilkusha Branch as the account officer in-charge of the department. Supplementary sheet consists of three heads such as General, Transaction with clients income and expenditure. Error: Reference source not found

Inward Clearing
Inward clearing involves clearing Cheques/DD/PO, which come to the IFIC, Dilkusha branch through clearing louse for collection. The clearing officer receives then enters them in the inward logbook. Then sends them to the computer section for checking the account condition. If any problem is found with the instrument, it is marked as dishonored mentioning the reason as mentioned above and he sends to the clearing officer. The clearing officer removes Cheques/DD from logbook and informs the matter to the Dilkusha branch

Outward Clearing
The cheques, PO, DD of different banks, which are submitted to IFIC, Dilkusha Branch, for collection, are known as out- Ward clearing cheques.The procedure is quite lengthy.

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3.1.3Remittance
Introduction
Commercial bank in Bangladesh offers the facility of transferring funds, from one place to another place, to their customers as well as to the general public. Such transfer of funds can be affected either through Demand Draft or Telegraphic Transfer or Mail Transfer. The aforesaid methods of remitting money from one place to another within the country are known as Remittance, While, it is for outside Bangladesh the same is called foreign remittance. The advantage of this facility is the quick transfer of money with minimum cost and also the risk of physical transportation of cost is eliminated.

Main Key Terms

Issuance & Payment of Demand Draft, Telegraphic Transfer or Mail Transfer, SDR, STOP payment & Issuance of Duplication In Stead of Lost Ones.

Whats the function of Remittance? Issue of Demand Drafts:

The customer is asked to complete in a form, which is treated as an application as well as voucher. The application form should be checked carefully. Commission charge are calculated & inserted in the case provide in the form. The voucher given to the customer to deposit the case with the cashier. The cashier receives the cash & delivers the voucher to remittance, department against initial in his books. Draft is prepared & entered in drafts issued register. The draft number is written on the voucher.

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 Branch wise serial number is given on the draft besides the oriented number putting on oblique between. The amount of the draft protect graphed. Draft block &the voucher along with the register are sent to officer in charge for checking & signatures. He signs the draft & voucher & initials the counterfoil of the draft & the register. Then the draft & the voucher are sent to the manager / second officer for second signature. The draft is crossed if customer desires & delivered to him against his acknowledgment on the voucher. A memorandum is issued to the stoner if the desires. The cheque is sent for passing & cancellation. Telegraphic intimation under test is sent to the Drawee much for drafts of TK. 50,000/- & over in or as per the existing of the bank

Issue of Duplicate Demand Draft:

The draft is issued marked duplicate in red ink, without altering the printed number & repeating the original number. A note to this effect is made on the original from & the draft issues register. Drawee branch is advised of issue of the duplicate draft. On receipts an application from the purchase of the drafts its loss & issue of duplicate one, the signature of the applicant is verified from the original application. On receipt of confirmation from the Drawee branch that the draft is still outstanding in their books & that caution being exercised by them, a duplicate draft is issued to the purchase after obtaining an indemnity Bond. The Drawee branch is informed of the loss of draft & requested to exercise caution by letter or telegram as desired by applicant

Cancellation of Demand Draft:

37

 One receipts of application along with the demand draft for its cancellation the signature of the applicant is verified from theoriginal application from & the geniuses of the demand draft is examined. Before the draft is cancelled it is ascertained that no duplicate draft has been issued. If the date of issue is in favor of a company, semi- government official, consent of the payee in writing is essential. The Drawee branch may be advised an about the cancellation of the draft. The cancelled draft should be attached to debit voucher along the request letter of the purchaser.

Revalidation of Draft:
A draft like cheque becomes stales after lapse of six month from the date of issue. The purchaser of the draft may approach the issuing branch to revalidate the draft to make it payable again. The draft should be remind & there must be no alteration in the draft. The purchaser must give a letter in writing requesting for the revalidation of the draft. An officer should duly verify his signature on the letter. All particulars of the draft should be compared from the draft issued register. Before the draft is revalidated it is ascertained that no duplicate draft has been issued, a note about revalidation of the letter particular draft be made in the register. The drawee branch should be intimated about the revalidation of the draft. A note to this effect in the remark column against the relative entry in the draft payable register should be made at the drawee branch.

Payment of Demand Draft:

Record of loss.

38

 Record of duplicate draft. Record of cancellation draft. Record of revalidation.

Payment of Open Draft:

The date, amounts in words & figures & signatures on the draft is checked. If the draft is tested, test should be verified. Draft together within the register is sent to the officer in charge for cancellation. Cancellation the draft sent to cash department for payment.

Payment of Crossed Draft:

Under N.1. Act crossed draft cannot be paid in cash, expect to a banker, who collects the same for credit to his customers accounts. In case of any irregularity in the draft an advice letter is sent obtain the confirmation of the issuing branch.

Accounting Treatment (sale of DD)

Cash /Party A/C---------------------------------------Dr. HO A/C Drawn on branch------------------------Cr. Income A/C Commission----------------------------Cr. After giving entries an IBCA is prepared. An IBCA implies the folloiwing entries: HO A/C issuing branch-----------------------------Dr. Drawn on branch-------------------------------------Cr.

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The IBCA is dispatched to drawn on branch. Role of the drawn on branch: After receiving the instrument, tile IBCA lodgment is done by the branch.

Accounting Teatment
(after receiving an IBCA) Issuing branch A/C--------------------------------------Dr. Bills payable(DD) A/C----------------------------------Cr. When payment given, Bills payable (DD) A/C---------------------------------Dr. Customer A/C--------------------------------------------Cr. Payment is made from the suspense account if the IBCA is not reached, but the instrument has been presented. Suspense A/C---------------------------------------------Dr. Customer A/C---------------------------------------------Cr. To adjust the payment: Issuing Bank A/C-----------------------------------------Dr. Suspense A/C----------------------------------------------Cr.

Telegraphic Transfer:

40

TT is affected by tile bank through tested telex message by secret check signal, on receipt of which tile paying officer pay the amount to the payee in cash through a telegraphic payment order or credit his account, as the case may be. Both parties must have account in IFIC Bank Limited, as money is transferred.

Giving Payment Order (PO)

The PO is used for making a remittance to the local creditors. The procedures for selling a PO are as follow: Deposit money by the customer along with application form. Give necessary entry in the Bills Payable register where payee name, address, date, PO no. amount is mentioned. Prepared the instrument. After scrutinized & approved the instrument by authority, it is delivered to customer. Signature of customer is taken on the counterpart & register customers signature part.

FOREIGN REMFITTANCE
Foreign Remittance handled by the bank stood at Tk.200.25 million as of December 31, 2003, Country from which inward foreign remittance were received included UAS, UK, Canada, Japan, Taiwan, KSA etc.

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3.1.4 Accounts
How to maintain outward Bill collection (OBC) files:

OBC realization file. OBC closing file. How to prepare on line receipts & payment voucher (IBDA& / or IBCA): This type of instrument is to prepare in four pages of IBDA & / Or IBCA.

Check return posting & inward posting:

After clearing by the Bangladesh Bank clearinghouse the checks come to the branch. These checks are posted in check return & payment inward register. All jobs are related to the front deskwork & also the customer service oriented. By giving customer service a friendly & cordial relationship has been grown up with the customer. ACCOUNT TRANSFER These are internal fund transfers whereby both the debit and credit accounts are held with the bank. These entries are usually made online

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3.1.5 Cash
Cash Receipts
Money deposited in cash by the constituents at the cash counter of the bank excluding that of government transaction is known as bank receives (cash). Different typos of form are used for cash deposits for different type accounts. Particulars of some forms are furnished below: Current or Savings Accounts pay in slip Applications for Fixed Deposit Receipt Credit Voucher Draft or Mail transfer Application Form Telegraph Transfer (T.T) Pay Order Application Form Called Deposit Application Form Demand Loan Pays in Slip

Step-1 The Depositor will fill up the appropriate the form properly. The concerned officer working at the General Banking Counter will initial the form relating to the new account. Step-2 Receiving the cash & voucher at the cash counter, the cash officer will count the cash correctly. Then the voucher will be branded Cash Received seal. Then the Assistant Cash Officer was willing the denomination of the notes & coins in the backside of the voucher. After tax Assistant officer will sign the voucher

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Step-3 The Cash Officer will check up the voucher & entered t6he amount in the cash receipt register & put the scroll number. Then the Officer will voucher & send to the computer department. Step-4 The Officer of Computer department entry the transaction into the computer & put the posted seal & treasure on the voucher. Step-5 At the end of the transaction the Cash Officer will total the cash receipt book & the total figure should be tally with scroll maintained by the officer whose scroll will also be totaled. The physical cash received at the counter must be equal to the total figure of the scrolled

Cash Payments
Banks payments include all kinds of payments excluding those of treasury sections. Extreme precautions must be taken at all levels through, which instrument like cheque, drafts, etc. are disposed. All the Instruments received at the general banking counter will be preliminary checked by the dealing officer who will enter the instruments in the respective ledger. Incase of cheque the following particulars will be scrutinized: Date (whether post dated or entry dated) Amount in word & in figure Crossed or open Bearer or order Style of signature as available in the leisure 44

 Prohibitory order or stop payment of cheques.

The Cash Officer will follow the following procedures at the time of payments of cheques / other instruments over the cash counter Step-1 The client will submit the instruments in the computer department first. The Computer officer and cheque passing authorized officer will verify the instrument & posted the instrument. Then it will be sent to the cash counter. Step-2 After getting the instrument the cash officer will verify the instrument & if necessary the cash can tell the clients to sign in the backside of the instrument.

Step-3 Cash Officer will record the denomination of notes & coins on the backside of the instrument. Step-4 The Officer will enter the cheque in the cash payments register where the denomination of notes & coins will also be recorded.

Step-5

45

The Cash officer will give the amount to the clients at the cash counter & tell the clients to count it immediately and if needed any quarry. Step-6 All cheques drafts, debit voucher etc must be branded with Cash paid stamp with the current date. Step-7 After payment the cash department for the purpose of clean Cash Book will send the vouchers. Step-8 The head of the cash department is responsible for debit vouchers being branded with the cash paid date stamp immediately they are paid & manager must supervise him/ her in this matter as any laxity is extremely dangers

Late Payments
Incase of any payments instruments must be debited in the ledger and passed in the usual manner. It will enter in the cash paid sheet in the above manner & cash book under authentication of the manager & Cash Officer. It must also be noted with late mark under initial of the manager with date. Finally all cash receipts & Payments will be taken into account to calculate the cash balance of the branch. We may take an example to clarify this.

46

But this is to notify that, at the end of the day of the bank the amount of the cash book and the amount of the computer should be equal. Because, currently the whole banking are being done through computer. So the clean cash of cash department supplementary of the computer must be equal. & the

Payments & Collection of Cheques

In the Banking Sector Bill of Exchange is one of the important instruments. Bill of Exchange is a n instrument in writing containing and unconditional order, signed by the maker, directing a certain person to pay on demand or at a fixed determinable future time a certain sum of money only to or to the order of a certain person or to the barrier of the instrument. But the cheque is the most important instrument in the Bill of Exchange. A cheque is a bill of exchange drawn on a specific banker & not expressed to be payable otherwise then on demand. There are two types of cheque in the bank, such as: Cross Cheque Collection Cheque

Cross Cheque
Those which can only be paid to a banker for crediting the proceeds to the accounts of its pay is called cross cheque. Essential elements / requisites of a cheque It must be in writing It must contain an order to pay on demand or at fixed or determinable future The order be an unconditional one The drawee must be certain

47

The sum Payable must be certain The instrument must contain an order to pay a certain sum The payee must be certain

The Payment of open cheque

An open cheque may either be bearer or order. Where the chequed payable to order purports to be indorsed by or on behalf of the payee the drawee is discharged by payment in due course. Where a cheque is originally expressed to be payable to bearer the drawee is discharged by payments in due course to the bearer there of; not with standing any endorsement whether in full or in blank appearing there on and not with standing that such endorsement purports to restricts or exclude future negotiation.

Payments of Crossed Cheque

Where a cheque is crossed generally the banker on whom it is drawn shall not pay it otherwise than to the banker. Where a cheque is crossed specially the banker on whom it is drawn shall not pay it otherwise than to the banker to whom it is crossed or his agent for collection Where a cheque is crossed specially to more than one banker except when crossed to an agent for the purpose of collection the banker on whom it is drawn shall refused payment thereof.

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Reasons for Cheque Dishonor

There are a lot of reasons for cheque dishonors. Some of the reasons given below Refer to drawer Not arranged for Effects not cleared may be presented again/ after days Exceed arrangement Full cover not received Payment stop by drawer Drawer signature deferred Cheque is post dated/ out of date/ Multilated/ Entry dated Amount inwards & figure deferred Alternation of date/ figure/words Other reasons

Cheque Collection
There is no legal obligation on a banker to collect cheques drawn on other banks for a customer but as a practice the collection of cheques & bills on behalf of the customer has become one of the important functions of bank. A banker collecting a cheque for a customer has no better title than that of his customer a cheque belonging to another person can be held liable for con version.

A banker who has in good faith without negligence received payment for a customer of a cheque crossed generally or specially to himself shall not in case the title of the cheque proves defective in cure any liabilities to the true owner of the cheque by reason only of having receive such payment.

49

Thus statutory protection given to the collecting banker can be claimed only for crossed cheques

3.2 Advance Section:

Advance Banking
Industrial Loan Term Loan Over Draft Consumer Credit Scheme Others

Industrial loan:
The bank provide industrial loan to its client. It is sectioned for five years or above. In order to get loan from the bank clients are obligated to fulfill the certain requirements provided by the bank.

Term Loan:
The term of loan is determined on the basis of gestation of income by the use of the loan such loans are provided for seasonal agriculture activities, farm machinery, dairy, poultry, transport facilities, extension of tea gardens and development of horticulture, fishing, etc. it is categorized in three segments:

Types of term loans

Time (Period)

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Short-term loans Medium term loan Long-term loan Over Draft:

1 to 3 years 3 to 5 years above 5 years.

The over draft is one kind of advance. In the case, the customer is allowed to overdraft his or her current account by drawing checks more that is available balance up to an agreed limited within a certain period of time but not exceeding more than one year, against acceptable securities. These facilities are granted to the customer only after reviewing the credit standing; financial ability and status of the customer as will as the purpose have been favorably established. The overdraft limit is based on ADVANCED LINE OF CREDIT available on a receiving basis and reviewing prior of expiration of the agreed of time between the bank and the customer.

Error: Reference source not found

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OD against Pledge and goods:

Overdraft against pledge of goods may be extended to the borrowers against pledge of taw materials or finished goods products as security. This is giver accordingly to credit and margin restriction imposed by Bangladesh Bank and FSBL head office time to time. Here the customer signs a dully-stamped letter of pledged by which the customer surrender the physical possession of the goods to the effective control of the bank. The owner ship of the goods remains with the borrower. The outstanding liabilities are adjusted out of the sales proceeds.

Measure taken while providing OD against pledge:

Quality and quantity of the goods properly ascertained. The goods must be readily saleable and have as effective demand in the present market condition. The goods must not be perishable. It must store in proper warehouses to prevent form deterioration and risk of pilferage. The goods have to insured with bank mortgage clause. Security personnel are to be posted on the warehouse for safety of the goods.

Authorized bank personnel are inspected goods or stock regularly. Stock card mist be displayed in the warehouse indication the quality, their value and price rate of the goods.

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Margin
The margin is fixed depending on the nature and type of security and the financial stability of the customer. The Bangladesh Bank regulations are of course kept in mind. IFIC retains a responsible margin and this is also to cover up any shortage, shrinkage and fluctuation of rate and fall in price etc.

Drawing power
The drawing power indicates the ceiling of the limit up to which a customer can overdraw in his or her account. The drawing power is calculated in the amount arriver after deducting of the margin from the securities value either in cost price or market price which ever is lower. Under no circumstances, the advance will exceed the drawing power if the customer in the manner described above.

OD against Hypothecation of stock

IFIC prefers and peruses this type overdraft. Under this arrangement, credit facility is provided to the borrower on signing a letter of Hypothecated, creating a charge against the raw materials/ finished goods etc. hypothecated to the bank as primary security against the advance. In this case, both the ownership and physical possession of the goods remains with the bank and when called upon to do so. The bank acquires the right over the goods hypothecated. Particulars considered and measure taken while providing OD against

Hypothecation: The clients need to be trust-worthy and reliable.

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 The goods should be readily saleable and of course have constant demand in the market. The borrowers have had an absolute title of he goods. Goods must be insured with the bank mortgaged with a sum of 10% above the sanctioned limit.

Margin
Same as the overdraft against pledges.

Drawing power
Same as the overdraft against pledges.

Consumer Credit Scheme (CCS) Consumer credit scheme is sanctioned fir those pupils, who want to buy commodities like generators, computer, freeze, car (brand new), TV, and any kind of home appliances etc. they have to give a guarantee of manage a guarantor who will take the responsibilities of full payment. The interest rare of this scheme is 15% per year and the time of duration is maximum 2 years. Bank finances not mare than 75% to buy the product. Registration of the product will be in name of the bank. Withdrawals of the registration will be done after making all the installment of the product.

Types of Credit Activities: Loan (General):

54

Short term, medium term and long term loans allowed to individual or firm or industries for a specific purpose but for a definite period and generally repayable by installments fall under this head. This type of lending are mainly accommodate to financing under the categories: # Large and medium scale industry # Small and cottage industry Very often term financing for (a) Agriculture and (b) Others are also including here.

Cash Credit (Hypo)

Advances allowed to individuals or firms for trading as well as whole- sale purpose or to industries to meet up the working capital requirements against hypothecation of goods as primary security fall under this type of lending. It is a continuous credit. It is allowed under the categories: # Commercial lending-when the customer is a other than industry. # Working capital-when the customer is an industry.

Cash Credit (Pledge):

Financial accommodation to individual or firm for trading as well as whole-sale purpose or to industries as working capital against pledge of goods as primary security fall under this head of advance. It is also a continuous credit and like the above allowed under the categories: # Commercial leading # Working capital

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SOD (General):
Advances allowed to individual/firm against financial obligation (i.e. lien of FDR/PSP/BSP/Insurance policy, etc.) and against assignment of work order for executing of contractual works fall under this head. This advance is generally allowed for definite period and specific purpose i.e. it is not a continuous credit. It falls under the categories Others.

SOD (Import):
Advances allowed for purchasing foreign currency for opening L/C for import of goods fall under this type of lending. This is also an advance for a temporary period, which is known as pre-import finance and fall under the category Commercial Lending. PAD: Payment made by the bank against lodgment of shipping document of goods imported through L/C fall under this type of head. It is an interim type of advance connected with import and is generally liquidated shortly against payments usually made by the party for retirement of the documents for release of import goods from the customs authority. It falls under the category commercial lending. LIM: Advances allowed for retirement of shipping document and release of goods imported through L/C taking effective control over the goods by the pledge in go down under banks lock and key fall under this type of advance. This is also temporary advance connected with import that is known post-import finance falls under the category commercial lending.

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LTR: Advances allowed for retirement of shipping documents and release of goods imported through L/C without effective control over goods delivered to the customers fall under this head. The goods are handed over the import under trust with the arrangement that sales proceed should be deposited to liquidate to liquidate the advances within a given period. This is also temporary advance connected with import that is known post-import finance and falls under the category commercial lending. IBP: Payment made through purchase of inland bills/cheques to meet urgent requirements of the customer falls under this type of credit facility. This temporary advance is adjustable from the proceed of bill/cheques purchase for collection. Its falls under the category commercial lending. ECC: Financial accommodation allowed to a party for export of goods falls under this head and is categorized as Export Credit. The advance must be liquidated out of export proceeds within 180 days. PC: Advance allowed to a party against specific L/C firm contract for processing/packing of goods to be exported falls under this head and is categorized as Packing Credit. The advances must be adjusted from proceeds of the relevant export within 180 days. FDBP:

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Payment made to party through purchase of foreign documentary bills fall under this head. This temporary advance is adjustable from the proceeds of the negotiable shipping/export documents. It falls under the category Export Credit.

LDBP: Payment made to a party through purchase of local documentary bills fall under this head. This temporary liability is adjustable from proceeds of the bill. SS: This classification contains accounts where such irregularities have occurred but such where such irregularities are considered to be either technicalities or temporary in nature. The main criteria for a sub-standard advance are that despite these technical or temporary irregularities no loss is expected to arise. These accounts will require close supervision by management to insure that the situation does not deteriorate further. Provision @10% of the base is required for debts in this classification where base is the outstanding balance less interest kept in interest Suspense account less the value of eligible security.

Personal Loan for Women

The salient features of the scheme are as follows:

1. 2.

Name

of

the

Personal Loan for Women Working Women Self employed women Housewives with reasonable income of the spouses A personal loan scheme to Women for purchasing: 58

Scheme Target Market

3.

Purpose(s)

 4. 5. 6. Age Group

Household appliances for personal use Buying equipment/ accessories for Business use Hospitalization or other emergency medical needs, House renovation, Office equipment, Marriage in the family, Holiday expenses, Educational/professional training of the family members. Purchase of personal Computer. Minimum 18 years Maximum 57 years 1 year Working Women Tk. 8,000/= to Tk. 10,000/= per month Self employed Women Tk. 20,000/= to Tk. 25,000/= per Housewives Tk. 15,000/= per month (Husbands

Minimum Service Minimum Income month

7. 8. 9. 10. 11.

Minimum Size Maximum

income/salary) Loan Tk. 25,000/= (Taka Twenty Five Thousand only) Loan Tk. 300,000/=(Taka Three Lac only) Nil From 12 months to 36 months Payment shall be made directly by the Bank to the vendor or to

Size Down payment Loan Term Disbursement

the customer, as may be determined by the bank, depending upon 12. Security the purpose of the loan . Two Personal Guarantees with attested photograph acceptable to the Bank In certain cases the Bank may take hypothecation of the purchased assets. Demand Promissory Note & other Documents as per Scheme.

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 Four Cheques each covering three installment amount for twelve months loan period. Additional cheque covering the rest installment amount of the period.

13. 14.

Debt-

Burden

Monthly loan installment cannot exceed 40% of customers take home salary. By submitting the following: Bank statement for last 6 months Salary Statements duly certified by the employer House rent agreement in case of direct income from other source Allows to repay the loan in monthly installment.

Ratio Proof of Income

15.

Repayment:

OTHERS

Inland/foreign Bill Purchase

The bank authority sanctions loan against cheeks or bill of exchange etc. if the client needs money immediately but the receivable date of the securities requires to be delayed at the moment, client can loan from the bank by showing the securities. The margin of the loan depends on maturity of security.

Bank Guarantee
The exporter pays the payment of the imported goods on behalf of the importer through a bank guarantee. If the importer fails to make the fulfill payment at the moment the bank will remain liable to the exporter until and unless the importer pays the money of the imported goods. This type of guarantee also is needed to attend in any tender. The interest rate of this kind of guarantee is 15% quarterly.

Loan against Trust Receive

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Two different types of LTR is issued to cover the following area of credit lines Letter of trust receive (for release of shipping documents) Letter of trust receive (for pre-shipment finance)

Chart of interest in lending

Agriculture loan including raw jute Term loan (project loan) Working capital loan (except jute) Export loan (packing credit) Other commercial loan Urban housing loan Small and cottage industry loan Other special program loan Others Consumer credit scheme Sod against financial obligation (PSI, BSP, etc) Sod general and Sod against shares

15% 15% 16% 11.5% 16% 16% 15% 16% 16% 3% above BSP and PSP int. rat 16%

Classification of loans:
IFIC follows the instructions of Bangladesh Bank for classification of loans. It follows a four-step classification which is Unclassified: The loans, which are not classified. These loans are regular. Substandard: It is the preliminary stage of classification of loan. If the loan exceeds 6 to 9 month from the payment then it falls in this class. Doubtful: When a loan exceeds 9 to 12 month from payment time then it is doubtful. That is the bank is in doubt whether they could recover it or not.

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 Bad or loss: Loan exceeds 12 month of payment ant the possibility of recovery is almost nil.

Stage of classification:
Classification Unclassified Substandard Doubtful Bad or loss Period Below 6 month 6 to 9 month 9 to 12 month 12 month and above Provision 1% 20% 50% 100%

Total amount of Classified Loan of IFIC:

Year 2001 (31.12.99) 2002 (31.12.00) 2003 (30.09.01)

Total Amount 64,949 7,52,604 17,42,861

Loan Classified Amount 0.00 0.00 3494

Unclassified Amount 64,949 7,52,604 17,39,367

% of Classified Loan 0.00% 0.00% 0.20%

Recovery
The officers should follow-up regularly. Besides periodical inspection and telephone contact is also required. Surprise visit is fruitful in this regard. The division should prepare a quarterly sheet for loans and be careful that a loan can be adjusted before being

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classified. If a loan becomes classified then steps should be taken for recovery and declassification.

Year 2001 2002 2003

Recovery rate 100% 100% 99.80%

3.3 Foreign Exchange

Definition of Foreign Exchange

An ordinary citizen usually perceives foreign exchange as foreign money. The term foreign exchange is used in a broader sense. It can simply be defined as a process of conversion of one currency into another. The foreign exchange regulation act refers that foreign exchange means foreign currency and includes any instrument drawn accepted, made or issued under clause (13) of article 16 of the Bangladesh Bank order, 1972, all deposits, credits and balances payable in any foreign currency and any draft, travelers cheques, letter of credit and bill of exchange expressed or drawn in Bangladesh currency but payable in any foreign currency.

Export at a Glance:
L/C Open Beneficiary place documents Lien IFIC

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Back to back L/C Raw material procuring Production Shipment Negotiation Documentation Forwarding Claim re-imbursement Disbursement of fund

Import

In lime with the experience of developing countries imports payments of Bangladesh increased over the years. The imported items were mainly industrial raw materials, consumer goods, fertilizer machinery and old ships of scraping, recondition cars etc. the growth in import business had been previous year showing and increase of 20%. Efficient handling did the significant items of import and concerned efforts for building up of a potential clientele for the bank.

Import procedure/ Formalities:

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Before making imports, the importer enters in to a purchase contract with foreign supplier. If the suppliers have local agent, the importers obtain an indent and pro-forma invoice. If the suppliers have no local agents in Bangladesh, the importers holding a valid import registration certificate (IRC) can import goods in to Bangladesh provide the goods are in the permissible list of item as per the Govt.s import policy order in force. All importers in to Bangladesh are subject to opening of L/C. import transactions are concluded with the help of documentary letter of credit established by the importers bank in favor of supplied (Beneficiary) and advised through the agent bank located in the suppliers country.

Documents that are needed for opening an import L/C re listed below:
a) Party application duly signed and scaled by the opener / authorized signatory. b) At least four copies of pro-forma invoice/ indent duly signed and sealed by the opener and beneficiary / indentor. Opener signature to be verified by the banker. c) L/C application form (to be provided by the bank) duly signed and scaled by the opener / authorized signatory. Guarantor signature required (if applicable/ mentioned in the proposal). The banker must verify the signature. d) LCA / IMP forms duly signed and scaled by the opener / authorized signatory e) L/C opening proposal approved by the opener authority mentioning L/C details (not required if the L/C is opened with 100% margin). f) Beneficiary credit report (if the L/C is more than $8000 or BDT 500000 which ever is highest). g) Insurance cover note with money receipt in original.

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L/C Margin
L/C margin varies bank-to-bank and customer-to-customer. Generally it depends on the following factors: a) Relationship between the client and the banker. b) Seasonal factor. c) Feature of the goods.

3.4 Foreign Remittance

Foreign remittance is another important factor of the IFIC from where it earns a lot of foreign exchange every year. Remittance means to send or transfer money or moneyworth from one place to another. In this case, the bank acts as the media to transfer or remit the money. Against the service it charges some commissions from the client.

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Chapter 4 Conclusion & Recommendation

4.1 Recommendation
Although this branch is making a huge amount of profit and generating a large volume of deposit, a number of problem have been dictated while I working this branch. Based on my work experience at IFIC, Shantinagar branch, I would like to put the following recommendation: Bank need to increase its quality of customer service.

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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 equip its branches with modern technology.

Information system should be developing. Bank should be using 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 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, 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. Theyre being no restriction customers clients are found to move hither and thither inside the bank premises. This hinders the smooth functioning and amount 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.

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Bank should be innovative and diversified in its services.

4.2 Conclusion
During the three months internship program at Shantinagar branch, almost all the desks have been observed mire 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 dept of each activities of branch because of time limitation. So, objective of this internship program has not been fulfilled with complete satisfaction. However, highest effort has been given to achieve the objective 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.

References
1. Annual Report of IFIC Bank Limited (2007, 2008&2009). 2. Several Booklets from IFIC Bank. 3. Several Newsletters from IFIC Bank. 4. www.ificbankbd.com

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5. Credit Operational Manual of IFIC Bank Limited. 6. Prospectus of IFIC Bank Ltd. 7. Several Report in IFIC Bank Library.

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Appendices

Tables
1. Import Business Analysis Table
Year Import 1123.95 Growth rate 8.44% 5.17% 26.95% 24.33% 43.75% (2000) 2001 1218.74 2002 1281.7 2003 1627.08 2004 2022.96

(In million taka)

2005 2907.93 68

Average STD
1,811. 5 691.5

CV
38.17

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2. Export Business Analysis

Year Export Business Growth rate (2000) 131.95 2001 267.51 102.73 2002 226.35 (15.39) 2003 303.38 34.03 2004 676.19 122.89 2005 1351.11 99.81 Average 564.91 Std 474.86 CV 84.06

3. Total Foreign Exchange Business Analysis

Year Total F. Exchange Business Growth rate 2000 1255.8 7 2001 1486.24 18.34 2002 1508.05 1.47 28.01 39.82 2003 1930.46 2004 2699.16 4259.04 57.79 2005 Averag e 2,3 76.59

Std. 1,161.2 3

CV 48.8 6

4. Other Analysis of IFIC Bank Ltd.

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Year 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Paid-up Capital 20.00 20.00 20.00 20.00 30.00 33.00 36.300 39.930 67.716 88.031 105.637

Deposit 117.45 237.38 328.60 483.34 660.25 1030.970 1263.025 I1659.845 2011.882 2793.084 3825.815

Advance 13.86 123.10 258.83 340.22 505.19 706.187 917.803 1302.713 1554.150 2200.170 3255.109

Operating Profit (12.58) 3.35 10.50 17.07 20.18 33.733 49.213 49.256 66.516 80.866 147.344

Total Assets 153.27 327.55 442.32 596.27 833.62 1171.056 1446.866 1888.248 2314.235 3374.496 4329.481

73

Performance of IFIC Bank Limited from 1999-2009

Particul ars
Authorized Capital Paid-up Capital Reserve Fund Deposit Advance Investmen t Import Business Export Business Operating Profit Net Profit after-Tax and Provision Total Assets Non Performing Loans as % of Total Assets Number of Correspon dent Banks Number of Employees Number of Branches

2009
250.00 105.63 7 118.04 7 3825.8 15 3255.1 09 511.31 4 2907.9 30 1351.1 10 147.34 4 37.420

2008
250.00 88.031 76.913 2793.0 84 2200.1 70 319.01 5 2022.9 62 676.19 3 80.866 29.469

2007
2,50.0 0 67.716 62.299 2011.8 82 1554.1 50 258.16 1 1627.0 80 303.37 9 66.516

2006
2,50.0 0 39.930 57.166 1659.8 45 1302.7 13 228.20 8 1281.7 01 226.34 5 49.256

2005
50.00 36.300 39.420 1263.0 25 917.80 3 172.74 4 1218.7 37 267.50 5 49.213

2004
50.00 33.00 23.528 1030.9 70 706.18 7 136.99 2 1123.9 14 131.95 1 33.733

200 3
50.0 0 30.0 0 14.5 7 660. 25 505. 19 97.1 8 822. 85 70.4 5 20.1 8 17.0 5

200 2
50.0 0 20.0 0 8.51 483. 34 340. 22 50.9 7 685. 22 35.3 4 17.0 7 9.80

200 1
50.0 0 20.0 0 4.64 328. 60 258. 83 42.0 7 468. 63 17.7 5 10.5 0 6.86

200 0
50.0 0 20.0 0 1.64 237. 38 123. 10 42.9 8 223. 25 10.5 0 3.35 1.98

199 9
50.0 0 20.0 0 0 117. 45 13.8 6 27.7 0 25.6 3 0.22 (12.5 8) 0

25.606

25.356

27.074

17.284

4329.4 81 4.37%

3374.4 96 4.96%

2314.2 35 2.09%

1888.2 48 1.99%

1446.8 66 2.78%

1171.0 56 2.95%

833. 62 3.75 %

596. 27 4.25 %

442. 32 0.75 %

327. 55 0

153. 27 0

130

122

80

45

40

39

34

32

30

28

20

915 31

835 27

701 23

595 19

575 13

528 12

480 12

447 12

358 10

295 8

162 5

74

Graphs

1.
Import Business 4000 3000 2000 1000 0 2005 2006 2007 2008 2009 Year

Values

Import

2.
Import Growth rate 50.00 40.00 30.00 Values 20.00 10.00 0.00 2005

Growth rate

2006

2007 Year

2008

2009

3.

75

Import & Export Business

Values
4000 3000 2000 1000 0 2005 2006 2007 Year 2008 2009 Export Import

4.
Export Business

Values

1500 1000 500 0 2005 2006 2007 2008 2009 Year Export

5.
Foreign Exchange Business 5000 4000 3000 2000 1000 0 2005 2006 2007 Year 2008 2009

Values

Foreign Exchange

76