General Banking on FSIB

Bank is nothing but an intermediary between lender (surplus unit) and borrowers (deficit unit). Savings and deposits are the main strength of the banks to provide loan. And the interest earned from the difference borrowing and lending is the major portion of banks income. Banks also earns from variety of operation. General banking is the side where banks offer different alternatives to the clients to deposit and remit their money. Accounts division is also included in general banking. o encourage the clients! bank offers different options in front of their clients. "ost of these options are very much similar between the banks! but the customer services and facilities may not be the same. #irst Security $slami Bank %imited has variety of services provided to the retail as well as for corporate clients. he services provided under general banking include the following& ' Account opening ' Account closing ' (he)ue book issue ' *emittance ' (learing ' (rossing ' +ndorsements ' ,ispatch Account opening& $nitially all the accounts are opened through deposit money by the customer and these accounts are called deposit account. -ormally a person needs to open an account to take services from the bank. .ithout opening an account! one can not enjoy variety of services from the bank. hus! the banking usually begins through the opening of the account with the bank. Bank accounts are mainly of three (/) types& 0. Al1.adiah (urrent ,eposit Account((,) 2. "udaraba Savings ,eposit Account(SB) /. "udaraba erm ,eposit *eceipt3Account(" ,*) here are also some other types of account facilities provided by the bank. hese are&

i. Short erm ,eposit (S ,) ii. "udaraba "onthly ,eposit Scheme ("",S) iii. "udaraba "onthly 4rofit Scheme ("B4S) iv. "udaraba ,eposit ,ouble Scheme (",,S) v. Advance Saving Scheme 0. Al1.adiah (urrent ,eposit Account ((,)& A current account is a running and active account! which may be operated upon any number of times during a working day. $t is purely demand deposit account because the bank is bound to pay the amount to the accountholder on demand at any time within the banking hour. here is no restriction on the number and the amount of withdrawals from a current account. Generally the minimum amount to be deposited initially is k. 055531 for opening a current account. 2. "udaraba Savings ,eposit Account (SB)& A saving account is meant for the people of the lower and middle classes who wish to save a part of their incomes to meet their future need and intend to earn an income from their savings! it encourages savings of non1trading persons! institutions! society and clubs etc. he deposits are mostly small amounts. #re)uently withdrawals are not allowed. ' 6pening of (urrent and saving Account& A current or a saving account could be opened through the following steps& Step& 0 Application on the prescribed form& he person willing to open a current account with the bank has to apply in the prescribed form. he form must be filled up and signed accordingly by the applicant (s). Step& 2 ,ocumentation& he documents that must be provided by the party3parties willing to open a current account are mentioned according to different aspects& i) $ndividual ' wo copies of passport si7e photograph ' $ntroducer8s signature in the A3( opening (ard 9 photograph ' -ationality (ertificate3passport8s photocopy (duly attested) ' -ominee8s 4hotograph

' "other8s name ' ,ate of Birth 9 age ' $ii) 4roprietorship ' wo copies of passport si7e photograph ' $ntroducer8s signature in the A3( opening (ard 9 photograph ' -ationality (ertificate3passport8s photocopy (duly attested) ' :p1to1date copy of trade license ' -ominee8s 4hotograph ' "other8s name ' ,ate of Birth 9 age ' Seal ' $iii) 4artnership ' 4assport si7e photograph A3( 6perator authori7ed by partners) wo copies (each) ' $ntroducer8s signature in the A3( opening (ard 9 photograph ' -ationality (ertificate3passport8s photocopy (duly attested) ' :p1to1date copy of trade license ' Seal ' $' 4artnership deed (from -otary public)! partnership letter iv) %imited (ompany ' 4assport si7e photograph A3( 6perator (authori7ed by Board) wo copies (each) ' $ntroducer8s signature in the A3( opening (ard 9 photograph ' (ompany resolution3(onstitution

' (ommon seal of (ompany ' "emorandum 9 Articles of association ((ertified by ;oint Stock (ompany) ' %ist of ,irectors with sign ' (ertificate of $ncorporation ' :p1to1date copy of trade license ' Seal ' $v) Societies! (lubs! etc ' 4assport si7e photograph A3( 6perator (authori7ed by Board) wo copies (each) ' $ntroducer8s signature in the A3( opening (ard 9 photograph ' -ationality (ertificate3passport8s photocopy (duly attested) ' :p1to1date copy of 6ffice Bearers3 Governing Body3 "anaging (ommittee ' "emorandum 9 Articles of association ' Seal $ncase of saving account opening the following documents are re)uired& ' wo copies of passport si7e photograph ' $ntroducer8s signature in the A3( opening (ard 9 photograph ' -ationality (ertificate3passport8s photocopy (duly attested) ' -ominee8s 4hotograph ' +mployer certificate Step& / $ntroduction to the Applicant& he applicant re)uired to furnish in the application form the names of the referees from whom the banker may make re)uires regarding the character! integrity and respectability of the applicants. $n most cases! the customer of the bank does the introduction or some other person known to the bank by signing on the application form with the account number. Step& <

Specimen signature& +very customer is re)uired to supply to his banker with one or more specimens of his3her signature. hese signatures are taken on cards! which are preserved by the banker! and his signature of the account holder on the che)ue is compared with Specimen signatures. #inal Step& After the above formalities are over! the banker opens an account in the name of applicant. hen the bank provides the customer with& ' A pay in slip3deposit book& o facilitate the receipt of credit items paid in by a customer! the bank will provide the customer a pay in slip either loose or in a book forms. he customer has to fill up the pay in slip at the time of depositing the money with the bank. he casher with his3her initials and stamps will return the counter foil to the customer on the receipt of the money. ' (he)ue Book& o facilitate withdrawals and payments to third parties by the customer! the bank will also provide a che)ue book to the customer. But it is noted that to get a che)ue book! the customer has to dully fill up the che)ue re)uisition slip to the banker. ' (losing of (urrent or Saving Account& A customer8s account with a bank may be closed for the following circumstances& 0. :pon the re)uest of a customer! an account can be closed. ' he customer may inform the bank in written of his3her intention to close the account. he customer has to apply to the branch in charge for closing the account. hen the in charge will remark on the account closing application for closing the account. ' By drawing a che)ue of the whole amount and a nil balance confirmation to be taken from the account holder. ' *ecover the unused che)ue leaves and enter into the =Broken che)ue book *egister> ' *emove the account opening form! specimen signature card and all other papers relating to the closed account. ' *emarks of account closing at the ledger folio should be authenticated by the manager of supervising officials. 2. he bank may itself ask the customer to close the account when the banker finds that the account is not been operated for a long lime. ' $f the account is not operated upon for ? months the banker will try to do the bilateral communication with the account holder! but if the banker does not then the account becomes =,ormant> account get any response from the account holder ' $f this not the operated upon for 2 years then the account becomes =inoperative> account.

' $f the current account lying in =inoperative> current account for many years then the account will be transferred to the =unclaimed deposit account. ' A new register for unclaimed deposit account will be maintained called =unclaimed deposit account. ' #or withdrawal at any amount from the account! permission from head office or controlling office wins is re)uired. /. "udarabah erm ,eposit *eceipt3Account (" ,*)& hese are the deposits! which are made with the bank for fi@ed period specified in advance. $t is purely a time deposit account. he bank doesn8t maintain cash reserves against deposits and therefore the bank offers higher rates of interest on such deposits. A #,* is issued to the depositor acknowledging receipt of the sum of money mentioned therein. 4rocedure of 6pening #i@ed ,eposit Account& Before opening a #i@ed ,eposit Account a customer has to fill up an application form! which contains the following& ' Amount in figures ' Beneficiary8s name and address ' 4eriod ' *ate of interest ' ,ate of issue ' ,ate o of maturity ' Aow the account will be operated (singly or jointly) ' Signature (s) ' #. ,. *. no ' Special instruction (if any) After fulfilling the above information and deposit the amount! #,* account is opened. A #,* receipt is issued and it is recorded in the #,* *egister! which contains the following information& ' #,* account no. ' #,* no. ' -ame of the #,* holder with address

' "aturity period ' "aturity date ' $nterest rate At present the rate of interest for #i@ed ,eposit *eceipt (#,*) in the #irst Security Bank %imited are as follows& 1111111111111111111111111111111111111111111111111 #or 0 month $nterest rate for is 02.B! 1111111111111111111111111111111111111111111111111 #or / month $nterest rate for is 02.C5B 1111111111111111111111111111111111111111111111111 #or ? month $nterest rate for is 0/.B! 6ther ypes of ,eposit Accounts& here are also some other types of account facilities provided by the bank. hese are& i. Short erm ,eposit (S ,) ii. "onthly Saving Schemes ("SS) iii. "udaraba ,eposit ,ouble Scheme (",,S) i. Short erm ,eposit (S ,) $t is also a time deposit account. he formalities for opening is of this account are to those re)uired for current account. he only difference is that! fre)uent withdrawal is discouraged and D days notice is re)uired for withdrawal of any sum and interest is paid. $n Short erm ,eposit Account! interest offered is less than of savings deposit! ?B interest is paid on this deposit. ii. "onthly Saving Schemes ("SS) "onthly Saving Scheme is that kind of scheme of #SB%! where deposit is monthly installments of various si7es for a fi@ed deposit and the benefit is lump sum returns after various terms of period. otal Savings amount according to monthly ,eposit amount and period! details are as under&

4eriod E "onthly Amount E "onthly Amount E "onthly Amount E "onthly Amount E "onthly Amount E "onthly Amount E "onthly Amount E "onthly Amount E E 055 k E 2C5 k E C55 k E 0!555 k E 0!C55 k E 2!555 k E 2!C55 k E C!555 k E 5C yrs E F!5C5 E 25!D55 E <0!/55 E F/!555 E 0!2C!555 E 0!?0!555 E 2!5?!C55 E <!0/!555 E 5F yrs E 0C!?55 E <5!C55 E F0!555 E 0!?2!555 E 2!</5!55 E /!00!555 E <!5C!555 E F!05!555 E 05 yrs E 22!/55 E CF!555 E 0!0C!055 E 2!/2!555 E /!<D!555 E <!<C!555 E C!DD!555 E 00!C0!555 E he objectives of this scheme are& ' Building the habit of saving ' Attract small savers ' Saving for rainy days ' +nsure regular income flow So this scheme is introduced to attract depositors and encourage saving (mainly the smaller earner people). iii. "onthly Benefit Saving Scheme ("BSS) "onthly Benefit Scheme is that kind of scheme! where a fi@ed amount of money has to be deposited every month for five years. "onthly benefit amount on the deposited amount are as under& ,eposited Amount E "onthly Benefit Amount E k. ?D!55531 E k. C5531 E k. 0!/<!55531 E k. 0!55531 E k. 2!?F!55531 E k. 2!55531 E k. ?!D5!55531 E k. C!55531 E k. 0/!<5!55531 E k. 05!55531 E he objectives of this scheme are& ' Aelp the retired persons for investing their retirement benefits ' (reate investment opportunities for non resident Bangladeshi ' +@plore investment opportunities for school! college! university etc.

iv. ,ouble Benefit ,eposit Scheme (,B,S) $n this scheme! a fi@ed amount of money! say k. C5!555 or it8s multiply for ? years has to be deposited. After ? years deposited amount will be doubled. ,eposit amount to be doubled in ? years! details are as under& 4eriod E ,eposited Amount E $nterest with deposit E 4ayable amount with interest at maturity E ?.C years E B, . 05!55531 E ,ouble E B, . 25!55531 E ?.C years E B, . 2C!55531 E ,ouble E B, . C5!55531 E ?.C years E B, . C5!55531 E ,ouble E B, . 0!55!55531 E ?.C years E B, . 0!55!55531 E ,ouble E B, . 2!55!55531 E ?.C years E B, . 2!55!55531 E ,ouble E B, . <!55!55531 E ?.C years E B, . C!55!55531 E ,ouble E B, . 05!55!55531 E he objectives of this scheme are& ' Give ma@imum profit ' Aelp in meeting specific needs like education! marriage etc. ' *emittance& Sending money from one place to other places for the customer8s is another important service of banks and this service is an important part of countries payment system. #or this service! people specially businesspersons transfer funds from one place to another very )uickly. here are various types of remitting money! such as& a. 4ay 6rder (46) he pay order is used for making a remittance to the local creditor. 4ay order gives the payee the fight to claim payment from the issuing bankG it can be en1cashed from issuing bank only. :nlike che)ue! there is no possibility of dishonoring pay order because before issuing pay order bank takes out the money of the pay order in advance. 4ay 6rder cannot be endorsed or crossed and so it is not negotiable instrument. H b. ,emand ,raft (,,)& ,emand draft is an order of issuing bank on another branch of the same bank to pay specified sum of money to the payee on demand that is the named person or order of the demand. $t is generally issued when customer wants to remit money in any place! which is

out side of the clearing1house area of issuing branch. 4ayee can be purchaser himself or another mentioned in the ,6. $t is a negotiable instrument and it can be crossed or not. c. elegraphic or elephonic ransfer ( )&

his method transfers money to one place to another place by telegraphic message. he sender branch will re)uest another branch to pay re)uired money to the re)uired payee on demand. Generally! for such kind of transfer payee should have account with the paying bank. 6therwise it is very difficult for the paying bank to recogni7e the e@act payee. .hen sending money is urgent then the bank uses telephone for remittance. his service is only provided for valued customers! who is very reliable and with which banks have long1 standing relationship. d. "ail ransfer Advice (" A)& .here the remitter desires the banker to remit the funds to the payee instead of purchasing a draft himself the banker does it through a mail transfer advice. he payee must have an account with the paying officer as the amount remitted in such a manner is meant for credit to the payee8s account and not for cash payment. $t is the least used techni)ue for transferring fund. .here there is no tele@ machine or telephone line then this method is used. ' (learing& (learing house is an assembly of the locally operating scheduled banks for e@change of che)ue! drafts! pay orders and other demand instruments drawn on each other and received from their respective customers for collection. he house meets at the appointed hour on all working days under the supervision of two central bank officers or its agent as the case may be! and works within the regulations framed therefore on the basis of prevailing banking practices. $n Bangladesh! clearing house sites at Bangladesh bank where there is no office of the Bangladesh bank! Sonali bank acts as agent of Bangladesh bank. here are mainly two types of clearing system in Bangladesh! such as& ' $nternal clearing or inter branch clearing or inward clearing. ' +@ternal clearing or inter banks clearing or outward clearing. he entire number banks representative daily conducts two meetings at a fi@ed time. $n their first meeting they handover che)ue! drafts etc. passed! which has drawn upon them. $n case there are certain che)ues! which could not be honored are returned to the presenting banks with the reason of non1payments in the second meeting at he clearing1house. a. 6perating 4rocedure& (learing operations are completed in three stages& ' 6peration at branch level

' 6peration at internal clearing house ' 6peration at the clearing house in Bangladesh Bank Bangladesh Bank clearing their house sites twice in a day. $n its first meeting Bangladesh Bank clearing1house received instruments and distributes the same among the representatives comes with returned instruments and distributing among the representatives. b. Software& Software called -$IASA supplied by Bangladesh Bank is used in clearing of the che)ue and other instruments. he in1charge of clearing section makes clearing slip for each che)ue through computer using -$IASA and finally these che)ues are sent to the Bangladesh Bank (learing1Aouse sorting bank wise. ' (rossing& (rossing che)ue is written across the face of the che)ue within two parallel lines. his practice becomes common even outside of clearing house! as an element of safety. a. 4urpose of crossing& ' o avoid possible loss that may occur by open che)ue getting into the hands of wrong parties ' (rossing is a direction to the paying bank to pay the money generally to a bank or a particular bankG so that it can be easily traced out for whose use the money was received. Jb. #orms of crossing& General (rossing& ' -ot negotiable ' And company and co ' -ot transferable Special (rossing& ' 4ayee A3( only ' -ot negotiable ' +ndorsements& An endorsement is the mode of negotiating! a negotiable instrument. ' ,ispatch&

,ispatch includes all correspondence! letter! statements! returns! and telegrams. his dispatch is also known as "ail. ,ispatch is primarily divided into two types& $nward& $t means what are receives from the outside. 6utward& $t means what sent to the outside. $t is also divided into (a) 6rdinary. (b) *egistered and (c) %ocal.