BASIC Promotion Tips

Updated upto 27.11.
2007
Personal Question
1.
2.
3.
4.
Self Introduction
Do you deserve promotion? Why?
Some questions form academic background.
DAIBB-full form: Diplomaed Associates of
Bangladesh
5. Your duty
Institute
of
Bankers
Know BASIC Bank

1.
2.
Name of MD (Full) : Mr. Kazi Faqurul Islam

Name of some important Directors :
i.
ii.
Mr. Sheikh Abdul Hye Bacchu, Chairman, BASIC Bank Limited

Mr. Shubhashish Bose, Director, BASIC Bank Limited, Vice
Chairman
Export Promotion Bureau
iii.
Mr. Shyam Sunder Sikder , Director, BASIC Bank Limited,
Chairman, BSCIC
iv.
Ms. Neelufar Ahmed, Director, BASIC Bank Limited, Director
General
Prime Minister's Office
v.
Ms. Quamrun Naher Ahmed, Director, BASIC Bank Limited, Joint
Secretary
Bank and Financial Institutions Division, Ministry of Finance
vi.
vii.
viii.
Mr. Md. Anwarul Islam, FCMA,Director, BASIC Bank Limited &

Managing Director, ARS Lube Bangladesh Ltd.
Mr. Anis Ahamad, Director, BASIC Bank Limited & Assistant Editor,
Uttaran
Mr. Kazi Faqurul Islam, Managing Director, BASIC Bank Limited
3.
Name of Company Secretary : Mr. Md. Shah Alam Bhuiyan
4.
Name of 6 DMDs & 12 GMs:

Name
Division
Mr. Fazlus Sobhan

Mr.
Kanak
Kumar
Purkayastha
Mr.
Abdul
Qayum
Mohammad Kibriya
Mr. A. Monaem Khan
Mr. Md Ruhul Alam
Mr. Md. Salim
Why BASIC Bank is unique (Mandate).

BASIC Bank Ltd is unique in its objectives. It is a blend of development
and commercial banking functions. The Memorandum and Articles of
Association of the bank stipulate that 50 percent of loanable funds
shall be invested in small and cottage industries sector. Thus the
banks priority remains with promoting and financing development of
small-scale industries in the country.
6. Date of Incorporation : August 2, 1988
7. Date of Commercial operation : January 21, 1989
8. Formation of BASIC Bank
The BASIC Bank Limited (Bangladesh Small Industries and Commerce
Bank Limited) established as a banking company under the Companies
Act 1913 launched its operation in 1989. It is governed by the Banking
5.
Page 1 of 77
Updated upto 27.11.2007
Companies Act 1991. The Bank started as a joint venture enterprise of

the BCC Foundation with 70 percent shares and the Government of
Bangladesh with 30 percent shares. The BCC Foundation being
nonfunctional following the closure of the BCCI, the Government of
Bangladesh took over 100 percent ownership of the Bank on 4th June
1992.
9. No. of employee : 695
10. External Ratings of Bank By CRISL (Short term & Long term)
Rating year-2006
Date of rating-29.06.2007
Long term-A+
Short Term-ST-2 (High certainty of timely payments, liquidity factors
are strong and supported by good fundamental protection factors. Risk
factors are very small.)
11. CAMELS Rating by Bangladesh Bank : A-8 as on 30/06/2006
Financial Info of BASIC Bank

12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
Authorized Capital : Tk 200.00 crore as on 31.12.06

Paid up Capital : Tk 94.50 crore as on 31.12.06 (Tk.124.74 crore as
on 30.06.2007)
Reserve and surplus : Tk 123.40 crore as on 31.12.06 (Tk.108.41
crore as on 30.06.2007 including statutory reserve Tk. 88.34 crore)
Capital Adequacy Ratio : 11.98 (Around 12) as on 31.12.06
Percentage of Tier 1 capital to risk weighted Assets : 11.83%
Percentage of Total capital to risk weighted Assets: 13.02%
Cost of Deposit: 7.06%
Cost of Fund: 7.17%
Interest Spread: 3.56%
No. of Branches : 30
Target vis--vis Actual (Amount in crore Taka)
Target
2007
Deposit
Advanc
e
Import
Export
Profit
2720.00
2212.00
As on
October
31, 2007
2992.49
2028.99
2050.00
1925.00
133.50
1705.98
1332.79
100.50
Classifi
ed
23.
74.87
(3.69%)
As on December 31, 2006
2408.47
1900.00
1780.43
1546.38
Gross profit : Tk 101.16 crore (before tax)
as on 31.12.06, (Tk. 117.00 crore before
provision and Tax as on 31.12.2006 as per
annual report)
Net profit : Tk 55.41 crore (after tax) as on
31.12.06
70.33 (3.7%)
Dividend for 2006

Stock-32.00%
Cash-6.35%
Page 2 of 77
GENERAL BANKING
1. Difference between Pvt. Ltd. and Public Ltd.
Private Ltd. Co.
Public Ltd. Co.
Incase of Public Limited Co.
Incase of Private Limited Co.
minimum shareholder will be
minimum shareholder will be
01
01 7(seven) and maximum will be
2(two)
and
maximum
unlimited or limited by share of
shareholder will be 50(fifty).
the company.
Certificate
of
the
Certificate of the commencement
02 commencement of business is 02 of business is must to starting
not required.
business.
Prospectus
can
not
be
Prospectus must be published the
published to the public for
Daily Newspaper to the public for
03
03
share sales and share cannot
share sales and share must be
be transferred to the public.
transferred.
Annual General Meeting is a must
Annual General Meeting is not
04
04 on or before 15 months of the last
required.
AGM.
Audit Report not to submit to
Audit Report must be submitted to
05
05
the Register of the Company.
the Register of the company.
2. Can minor open any account (rights and reservation)
Yes minor can open account but as per contract act 1872, a minor enjoys
some privileges such as he/she cannot be liable for any wrong doings. So,
banker should take extra care in opening and operating of minor
accounts,
i.
Natural guardian or Guardian appointed by the court should
operate the account. In this manner joint account can also be
opened.
ii.
The account can be opened and operated by them where the minor
has attained the age of 12 years.
iii.
Current account should not be opened in the name of minors.
iv.
Cheques/bills should not be collected
v.
Bank should keep the recode of minors birth date and after
attaining majority guardian should not be allowed to operate the
Page 3 of 77
vi.
vii.
viii.
account and bank should request the minor to open a fresh account
before a third party witness.
If guardian dies before attaining majority then bank should give the
money to court appointed guardian or to him after attaining
majority.
Minor can draw endorse or negotiate any chq but there will be no
liability of minor.
No OD facility is allowed to these accounts
3. Difference between DD & PO

DD and PO both is remittance instrument issued by bank. The main
difference is, in case of PO, it is issued to remit money within the station
and payment is made by the issuing branch. On the other hand DD issued
by one branch of the bank with a advice issued on other branch to pay the
money and it is issued when outstation remittance is required.
4. Difference between Bankers Chq & Customer Chq.
Bankers cheques are those cheques issued by bank like DD, PO and
customer chq are chqs issued against their account maintained with the
Bank. If all other things are ok then main difference is that, a customer
chq can be dishonored for insufficient of fund which is not possible for
Bankers chq.
5. Garnishee Order
Its an order by the court of law to suspend the transaction in any
customer account or to disclose the information to the court or to any
particular authority of any customer account. The Garnishee Order has
two forms: 1. Order Nisi (Ask for freeze the account, ii. Ask explanation
why funds not for payment of judgment creditor), 2. Order Absolute: Court
directs to pay either whole or part of deposit against which Order Nisi
issued.
6. Negotiable Instrument & Its Characteristics
Negotiable Instrument are those instrument which is declared negotiable
as per Negotiable Instrument act-1881, as per the act Bill of Exchange,
Promissory Note and Chqs are negotiable instrument.
Characteristics:
i.
Must be written and signed
ii.
Easy to transfer
iii.
Transfer free from defects: transferor with bad title can pass good
title
iv.
Right to sue
v.
No notice to transfer
vi.
Delivery Essential
vii.
Credit of the Party
7. Difference between Bearer, Order & Not Negotiable
Bearer chq can be paid to any body. In case of order chq it should be paid
to a certain person and it can be negotiated by endorsement. Not
Negotiable chq is negotiable but it will not give better title to the ultimate
holder and Banker should take extra care for these types of chqs.
8. Procedure of filing suit and punishment on dishonor of chq
Page 4 of 77
9. Bill of Exchange
Bill of Exchange is an instrument in writing containing an unconditional
order, signed by the maker directing a certain person to pay a certain sum
of money payable on demand, or fixed, or future determinable time, only
to , or to the order of a certain person or to the bearer of the instrument.
10.
Rates of interest of different accounts
SBSTDFD11.
Different Status of Accounts:

Dormant-6 Months, Inoperative-2 Years, Unclaimed-10 Years
12.
Different Acts related to GB

a.
The Companies Act-1994
b.
The Bank Companies Act-1991
c.
The Contract Act-1872
d.
The Financial Institution Act-1993
e.
The Partnership Act-1932
f.
The Transfer of Property Act-1882
g.
The Money Loan Court Act-2003
h.
The Money Laundering Prevention act-2002
i.
The Negotiable Instrument Act-1881
13.
What is Estoppel:
An estoppel is a defense against a party reneging on a previous statement
assumed to be a legal truth. Once a statement of fact is entered into a
court case, the person who made that statement must stand by its
truthfulness. He or she cannot claim a new position in a future business or
private dealing. If the other party makes a decision based on the
untruthful second statement and a lawsuit ensues, they can claim an
estoppel in court against the plaintiff. In order for the estoppel to be
considered valid, however, the defendant needs to demonstrate damages
stemming from the untruthful statement.
Estoppel is a legal doctrine recognised both at common law and in equity
in various forms. It is meant to complement the requirement of
consideration in contract law. In general it protects a party who would
suffer detriment if:
The defendant has done or said something to induce an expectation

The plaintiff relied (reasonably) on the expectation...
...and would suffer detriment if that expectation were false.
Unconscionability by the defendant has been accepted as another element

by courts, in an attempt to unify the many individual rules of estoppel.
Page 5 of 77
International Institutions
International Monetary Fund (IMF)
Chief:
Dominique
Strauss-Kahn,
Designation:
Managing
Director,
Nationality: French
Member Countries: 185 countries
HQ: Washington DC,
Date of Establishment: July 1944
Functions:
i.
The IMF works to promote global growth and economic
stabilityand thereby prevent economic crisisby encouraging
countries to adopt sound economic policies. Surveillance is the
Page 6 of 77
ii.
iii.
iv.
regular dialogue and policy advice that the IMF offers to each of its
members.
Financial assistance is available to give member countries the
breathing room they need to correct balance of payments problems.
The IMF is also actively working to reduce poverty in countries
around the globe, independently and in collaboration with the
World Bank and other organizations. The IMF provides financial
support through its concessional lending facilitythe Poverty
Reduction and Growth Facility (PRGF) and the Exogenous Shocks
Facility (ESF)and through debt relief under the Heavily Indebted
Poor Countries (HIPC) Initiative and the Multilateral Debt Relief
Initiative (MDRI). In most low-income countries, this support is
underpinned by Poverty Reduction Strategy Papers (PRSP).
Technical assistance and training are offeredmostly free of charge
to help member countries strengthen their capacity to design and
implement effective policies.
World Bank and World Bank Group

Chief: Robert B. Zoellick, Designation: President
Member Countries: 185 countries
HQ: Washington, DC,
Date of Establishment: July 1, 1944
Composition of World Bank: We are made up of two unique development
institutions owned by 185 member countriesthe International Bank for
Reconstruction and Development (IBRD) and the International Development
Association (IDA). The term "World Bank" refers specifically to two of
the five, IBRD and IDA.
Composition of World Bank Group: The term "World Bank Group"
encompasses all five institutions as described below.
Functions:
The International Bank for Reconstruction and Development (IBRD)
Established 1945
184 Members
IBRD aims to reduce poverty in middle-income and creditworthy poorer
countries by promoting sustainable development through loans, guarantees,
and (nonlending) analytical and advisory services. The income that IBRD has
generated over the years has allowed it to fund several developmental
activities and to ensure its financial strength, which enables it to borrow in
capital markets at low cost and offer clients good borrowing terms. IBRDs
24-member Board is made up of 5 appointed and 19 elected Executive
Directors, who represent its 184 member countries.
The International Development Association (IDA)
Established 1960
165 Members
Contributions to IDA enable the World Bank to provide approximately $6
billion to $9 billion a year in highly concessional financing to the worlds 81
poorest countries (home to 2.5 billion people). IDAs interest-free credits and
grants are vital because these countries have little or no capacity to borrow
on market terms. In most of these countries, the great majority of people live
Page 7 of 77
on less than $2 a day. IDAs resources help support country-led poverty

reduction strategies in key policy areas, including raising productivity,
providing accountable governance, improving the private investment climate,
and improving access to education and health care for poor people.
The International Finance Corporation (IFC)
Established 1956
176 Members
IFC promotes economic development through the private sector. Working
with business partners, it invests in sustainable private enterprises in
developing countries without accepting government guarantees. It provides
equity, long-term loans, structured finance and risk management products,
and advisory services to its clients. IFC seeks to reach businesses in regions
and countries that have limited access to capital. It provides finance in
markets deemed too risky by commercial investors in the absence of IFC
participation and adds value to the projects it finances through its corporate
governance, environmental, and social expertise.
The Multilateral Investment Guarantee Agency (MIGA)
Established 1988
165 Members
MIGA helps promote foreign direct investment in developing countries by
providing guarantees to investors against noncommercial risks, such as
expropriation, currency inconvertibility and transfer restrictions, war and
civil disturbance, and breach of contract. MIGAs capacity to serve as an
objective intermediary and to influence the resolution of potential disputes
enhances investors confidence that they will be protected against these
risks. In addition, MIGA provides technical assistance and advisory services
to help countries attract and retain foreign investment and to disseminate
information on investment opportunities to the international business
community.
The International Centre for Settlement of Investment Disputes
(ICSID)
Established 1966 143 Members
Total cases registered: 159
Fiscal 2004 cases registered: 30
ICSID helps encourage foreign investment by providing international
facilities for conciliation and arbitration of investment disputes, thereby
helping foster an atmosphere of mutual confidence between states and
foreign investors. Many international agreements concerning investment
refer to ICSIDs arbitration facilities. ICSID also issues publications on
dispute settlement and foreign investment law.
Difference between IBRD & IDA:
The IBRD focuses on middle income and creditworthy poor countries,
while IDA focuses on the poorest countries in the world
What is the difference between the World Bank and a Commercial
Bank?
While it lends and even manages funds much like a regular bank, the
World Bank is different in many important ways. It is owned by 184
countries. The financial support and advice the World Bank provides its
member countries is designed to help them fight poverty. And unlike
Page 8 of 77
commercial banks, the World Bank often lends at little or no interest to

countries that are unable to raise money for development anywhere
else. Countries that borrow from the World Bank also have a much
longer period to repay their loans than commercial banks allow. In
some cases, they dont have to start repaying for ten years. Basically,
the World Bank borrows the money it lends. It has good credit because
if has large, well-manages financial reserves. This means it can borrow
money at low interest rates from capital markets all over the world and
channel it to developing countries, often at much lower rates of
interest than what markets would charge these countries.
What if the difference between the World Bank and the IMF?
People sometimes confuse the World Bank with the International
Monetary Fund (IMF), which was also set up at the Bretton Woods
conference in 1944. Although the IMFs functions complement those of
the World Bank, it is a totally separate organization. While the World
Bank provides support to developing countries, the IMF aims to
stabilize the international monetary system and monitors the worlds
currencies.
About the Millennium Developments Goals (MDGs)
The MDG goals and targets are based on the UN Millennium Declaration,
and the UN General Assembly has approved them as part of the Secretary
General's road map towards implementing the Declaration. For each
MDG, one or more targets have been set, using 1990 as a benchmark and
2015 as the target date. Since the launch of the Millennium Development
Goals (MDGs) at the Millennium Summit in New York in September 2000,
the MDGs have become the most widely-accepted yardstick of
development efforts by governments, donors and NGOs.
Goal 1: Eradicate extreme poverty and hunger
Goal 2: Achieve universal primary education
Goal 3: Promote gender equality and empower women
Goal 4: Reduce child mortality
Goal 5: Improve maternal health
Goal 6: Combat HIV/AIDS, malaria and other diseases
Goal 7: Ensure environmental sustainability
Goal 8: Develop a Global Partnership for Development
ACU
Asian Clearing Union (ACU) is the simplest form of payment arrangements
whereby the members settle payments for intra-regional transactions among
the participating central banks on a multilateral basis.
Administration set up: 1) H.E. Bijaya Nath Bhattarai Chairman of the Board,
Governor, Nepal Rastra Bank 2) Mrs. Bahereh Mirzaei-Tehrani (Secretary
General)
HQ ( Secretariat Office): Tehran, Islamic Republic of Iran
Date of Establishment: December 1974
OBJECTIVES
a) To provide a facility to settle on a multilateral basis, payments for current
international transactions among the territories of participants;
Page 9 of 77
b) To promote the use of participants currencies in current transactions

between their respective territories and thereby effect economies in the use
of the participant's exchange reserves;
c) To promote monetary co-operation among the participants and closer
relations among the banking systems in their territories and thereby
contribute to the expansion of trade and economic activity among the
countries of the ESCAP region; and
d) To provide for currency SWAP arrangement among the participants so as
to make Asian Monetary Unit available to them temporarily.
Members: 1) Bangladesh Bank 2) Royal Monetary Authority of Bhutan 3)
Reserve Bank of India 4) Central Bank of the Islamic Republic of Iran 5)
Central Bank of Myanmar 6) Nepal Rastra Bank 7) State Bank of Pakistan 8)
Central Bank of Sri Lanka
ACU SWAP FACILITY: The main objective of the SWAP arrangement is to
extend short term foreign exchange support by providing participants access
to the international reserves of other participants in times of temporary
liquidity problems.
The potential benefits of the SWAP facility are:
a) Easy access by participants to international reserves of other participants
at a time when foreign exchange support is needed ;
b) Availability of the facility on a multilateral basis rather than on a bilateral
basis; and
c) The opportunity for further monetary cooperation among the participant's
central banks.
World Trade Organization (WTO)
Chief: Pascal Lamy (Director-General)
HQ: Geneva, Switzerland
Membership: 151 countries on 27 July 2007
Establishment: 1 January 1995 Created by: Uruguay Round negotiations
(1986-94)
Functions:
1) Administering WTO trade agreements
2) Forum for trade negotiations
3) Handling trade disputes
4) Monitoring national trade policies
5) Technical assistance and training for developing countries
6) Cooperation with other international organizations
Asian Development Bank (ADB)
Chief: Haruhiko Kuroda, President and Chairperson, Board of Directors
Asian Development Bank, Nationality: Japan
HQ: Mandaluyong City, Metro Manila, Philippines
Membership: 67 members, 48 from the region and 19 from other parts of
the globe.
Establishment: 1966
Function: The Asian Development Bank
extends loans and equity investments to its developing member
countries (DMCs) for their economic and social development
provides technical assistance for the planning and execution of
development projects and programs and for advisory services
Page 10 of 77
promotes and facilitates investment of public and private capital for

development, and responds to requests for assistance in coordinating
development policies and plans of its developing member countries
ASSOCIATION OF SOUTHEAST ASIAN NATIONS (ASEAN)

Chief: H.E. ONG KENG YONG, ASEAN SECRETARY GENERAL, Nationality:
Singapore
HQ: Jakarta, Indonesia
Established: 8 August 1967
Member Countries: 1) Brunei Darussalam 2) Cambodia 3) Indonesia 4)
LAOS 5) Malaysia 6) Myanmar 7) Philippines 8) Singapore 9) Thailand 10)
Vietnam
Function:
(1) to accelerate economic growth, social progress and cultural development
in the region and
(2) to promote regional peace and stability through abiding respect for
justice and the rule of law in the relationship among countries in the region
and adherence to the principles of the United Nations Charter.
In 2003, the ASEAN Leaders resolved that an ASEAN Community shall be
established comprising three pillars, namely, ASEAN Security Community,
ASEAN Economic Community and ASEAN Socio-Cultural Community
The European Union (EU)
The European Union (EU) is a political and economic community of states
with supranational and intergovernmental features. The twenty-seven
member states are primarily located in Europe. It traces its origins to the
European Economic Community (EEC) formed in 1957 by the Treaty of Rome
between six European countries. Since then the EU has grown in size
through the accession of new member states and has increased its powers by
the addition of new policy areas to its remit. In 1993, the Maastricht Treaty
established the current legal framework.
The EU creates a single market by a system of laws which apply in all
member states, guaranteeing the freedom of movement of people, goods,
services and capital. It maintains a common trade policy, agricultural and
fisheries policies, and a regional development policy. In 1999 the EU
introduced a common currency, the euro, which has been adopted by thirteen
member states. It has also developed a role in foreign policy, and in justice
and home affairs. Passport control and customs checks between many
member states were abolished under the Schengen Agreement.
EU President: Jos Manuel Barroso, Nationality: Portugal
HQ: Brussels, Belgium
Member Countries: The European Union currently has 27 member states:
Austria, Belgium, Bulgaria, Cyprus, the Czech Republic, Denmark, Estonia,
Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania,
Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania, Slovakia,
Slovenia, Spain, Sweden, and the United Kingdom.
Further Enlargement: There are currently three official candidate
countries, Croatia, the Republic of Macedonia (FYROM) and Turkey. In
addition the western Balkan countries of Albania, Bosnia and Herzegovina,
Montenegro and Serbia are officially recognised as potential candidates
Mission:
Europes mission in the 21st century is to:
provide peace, prosperity and stability for its peoples;
Page 11 of 77
overcome the divisions on the continent;

ensure that its people can live in safety;
promote balanced economic and social development;
meet the challenges of globalisation and preserve the diversity of the
peoples of Europe;
uphold the values that Europeans share, such as sustainable
development and a sound environment, respect for human rights and
the social market economy
G-8 Countries
Brief History: The concept of a forum for the world's major industrialised
democracies emerged following the 1973 oil crisis and subsequent global
recession. In 1974, the United States created the Library Group, an informal
gathering of senior financial officials from the United States, the United
Kingdom, West Germany, Japan and France, In 1975, French President Valry
Giscard d'Estaing invited the heads of government from West Germany, Italy,
Japan, the United Kingdom and the United States to a summit in Rambouillet.
The six leaders agreed to an annual meeting organised under a rotating
presidency, forming the Group of Six (G6). The following year, Canada joined
the group at the behest of U.S. President Gerald Ford, and the group became
known as the Group of Seven (G7). The European Union is represented by the
President of the European Commission and the leader of the country that
holds the Presidency of the Council of the European Union and has attended
all meetings since it was first invited by the United Kingdom in 1977. [3]
The Cold War ended with the dissolution of the Soviet Union in 1991, and
Russia became the successor state. Beginning with the 1994 Naples summit,
Russian officials held a separate meeting with leaders of the G7 after the
main summit. This group became known as the Political 8 (P8), or colloquially
as the "G7 plus 1". At the initiative of United States President Bill Clinton,
Russia formally joined the group in 1997, resulting in the Group of Eight
(G8).
Members: Canada, France, Germany, Italy, Japan, Russia, UK, USA
Function: The G7/8 Summit has consistently dealt with macroeconomic
management, international trade, and relations with developing countries.
Questions of East-West economic relations, energy, and terrorism have also
been of recurrent concern. From this initial foundation the summit agenda
has broadened considerably to include microeconomic issues such as
employment and the information highway, transnational issues such as the
environment, crime and drugs, and a host of political-security issues ranging
from human rights through regional security to arms control.
G8+ 5 countries
G8+ 5 countries: G8 countries plus India, China, South Africa, Brazil,
Mexico
Bay of Bengal Initiative for Multi Sectoral Technical and Economic
Cooperation (BIMSTEC)
BIMSTEC provides a unique link between South Asia and Southeast Asia
bringing together 1.3 billion people - 21 percent of the world population, a
combined GDP of US$750 billion, and a considerable amount of
complementarity given geographical contiguity, differing levels of
development and resource endowments. A study (2004) shows the potential
of US$ 43 to 59 billion trade creation under BIMSTEC FTA.
Establishment : June 6, 1997
Page 12 of 77
Member Countries: Bangladesh, India, Myanmar, Sri Lanka, Thailand,

Bhutan and Nepal.
Function: The seven nation countries have endorsed a plan for a free trade
pact by 2017 -- while the three most advanced countries of the area (India,
Sri Lanka, and Thailand) are committed to trade liberalization by 2012. [1]
Trade in goods will be liberalized through progressive elimination of tariffs
and non-tariff barriers. This will be done in two phases. Products will be
identified for (a) Fast Track and (b) Normal Track.
For the Fast Track products the non-LDC parties will eliminate tariffs for LDC
parties by 30 June 2007; but among themselves by 30 June 2009. The LDC
parties will do so far non-LDC by 30 June 2011; but among themselves by 30
June 2009.
For the normal Track products the non-LDCs will eliminate tariffs for LDCs
by 30 June 2010; but among themselves by 30 June 2012. The LDCs will
eliminate tariffs for non-LDCs by 2017; but among themselves by 30 June
2015.
Islamic Development Bank (IDB)
Chief: Dr. Ahmad Mohamed Ali Al-Madani, President, Nationality: KSA
Date of Establishment: 20 October 1975.
HQ: Jeddah in the Kingdom of Saudi Arabia
Member: 56 Countries
Function:
1) to participate in equity capital and grant loans for productive projects
and enterprises besides providing financial assistance to member
countries in other forms for economic and social development
2) assisting in the promotion of foreign trade especially in capital goods,
among member countries; providing technical assistance to member
countries; and extending training facilities for personnel engaged in
development activities in Muslim countries to conform to the Shari'ah.
Commonwealth
Chief: Queen Elizabeth II
Secretary-General : Kamalesh Sharma
Date of Establishment:.
HQ: Marlborough House, London, UK
Member: 53 sovereign states
The Commonwealth is an international organisation through which countries
with diverse social, political, and economic backgrounds co-operate within a
framework of common values and goals, outlined in the Singapore
Declaration.[1] These include the promotion of democracy, human rights,
good governance, the rule of law, individual liberty, egalitarianism, free
trade, multilateralism, and world peace.[2]
Last summit : Kampala, Uganda
Non-Aligned Movement (NAM)
Secretary-General :
Date of Establishment: 1950
HQ:
Member: 118 countries
The Non-Aligned Movement (NAM) is an international organization of states
considering themselves not formally aligned with or against any major power
bloc. It was founded in 1950s; as of 2007, it has 118 members. The purpose
Page 13 of 77
of the organization as stated in the Havana Declaration of 1979 is to ensure

"the national independence, sovereignty, territorial integrity and security of
non-aligned countries" in their "struggle against imperialism, colonialism,
neo-colonialism, racism, Zionism, and all forms of foreign aggression,
occupation, domination, interference or hegemony as well as against great
power and bloc politics".[1] They represent nearly two-thirds of the United
Nations's members and comprise 55% of the world population.
The Organization of the Petroleum Exporting Countries (OPEC)
Secretary-General : HE Abdalla Salem El-Badri

Date of Establishment:. 1949
HQ: The Vienna-based organization has maintained its headquarters there since 1965
Member: 13 member states
Last summit : Third OPEC Summit, Riyadh, Saudi Arabia, 17 November

2007
SAFTA: South Asian Free Trade Area. 7 countries of old SAARC [Effective
from1st July 2006]
SAPTA: SAARC Preferential Trading Arrangement. 7 countries of old SAARC
[Effective from 8th December 1995]
NAFTA: North American Free Trade Area. [Effective from 1st January 1994]
Banco Del Sur: 7 South American Countries, as alternative of World Bank
and IMF [Hugo Shavez is the main thinker]
SDR: Special Drawing Right. Arrangement for withdrawing from IMF.
Valuation depends on [USD,GBP,FFr.,DM,JPY]
Page 14 of 77
Different type of Banking & Banking Products

1. Merchant banking
Merchant Banking encompasses two major businesses Portfolio
Management, and Issue Management and Underwriting which serve
both the demand and supply sides of the capital market.
2. SME Banking
Enterprises shall be categorized using the following definition (fixed
investment implies exclusion of land and building, and valuation on the
basis of current replacement cost only):
Small enterprise: an enterprise should be treated as small if, in todays
market prices, the replacement cost of plant, machinery and other
parts/components, fixtures, support utility, and associated technical
services by way of capitalized costs (of turn-key consultancy services,
for example), etc, excluding land and building, were to be up to Tk. 15
million;
Medium enterprise: an enterprise would be treated as medium if, in
todays market prices, the replacement cost of plant, machinery, and
other parts/components, fixtures, support utility, and associated
technical services (such as turn-key consultancy), etc, excluding land
and building, were to be up to Tk. 100 million;
For non-manufacturing activities (such as trading or other services), the
Taskforce defines:
Small enterprise: an enterprise should be treated as small if it has less
than 25 workers, in full-time equivalents;
Medium enterprise: an enterprise would be treated as medium if it has
between 25 and 100 employees;
3. Off shore Banking
Part of international banking business operates free of various constraints
and taxes. Off-shore banking transactions are carried out in foreign
currencies and transacted between foreigners.
4. Bridge Financing
Purely short-term credit/advance extended to a person or a concern
pending the receipt of fund from another source. It is nothing but a stopgap arrangement to avail a temporary credit line by a customer from his
banker. Very frequently this sort of finance is required by projects when
actual credit giving agency is unable to disburse the loan in time, the
concern of the project then moves to a bank to avail credit line to
establish/commission the project in time. It is also called Swing Loan,
made in anticipation of long term financing.
Page 15 of 77
5. Syndication
A Syndicated facility is a lending facility, defined by a single loan
agreement, in which several or many banks participate.
6. Securitization
Securitisation is the process of pooling and repackaging of homogenous
illiquid financial assets into marketable securities that can be sold to
investors. The process leads to the creation of financial instruments that
represent ownership interest in, or are secured by a segregated income
producing asset or pool of assets. The pool of assets collateralises
securities. These assets are generally secured by personal or real property
(e.g. automobiles, real estate, or equipment loans), but in some cases are
unsecured (e.g. credit card debt, consumer loans).
7. Factoring
The factor, the banker, undertaking to collect, to account for and manage
clients debts and also finances the clients either by lending against
account receivables or purchasing/discounting them outright for a charge
called discount.
8. Bankers Account
9. Retail Banking & Wholesale banking

Retail banking is typical mass-market banking where individual customers
use local branches of larger commercial banks. Services offered include:
savings and checking accounts, mortgages, personal loans, debit cards,
credit cards, and so forth. Retail banking "is typical mass-market banking
where individual customers use local branches of larger commercial
banks. Services offered include: savings and checking accounts,
mortgages, personal loans, debit cards, credit cards, and so forth."
Whereas wholesale banking is Banking services between merchant banks
and other financial institutions.
10.
Subordinate, subordinated, subordination
Debts or claims that have a lower status or priority than other debts or
claims are subordinate. For example, creditor A may agree in a
subordination agreement to have its claims on the cash flow or on the
assets of a borrower lower in priority than (i.e., subordinate to) the claims
to that cash flow or collateral by creditor B. In finance and accounting, the
term also refers to debts that include provisions making them subordinate
to other liabilities. For example, a bond issue may, by contractual
agreement, be subordinate to all other bonds issued by a company.
11.
Zero coupon bond
A type of debt security that does not pay periodic interest. Zero coupon
securities are bought and sold at prices that are less than the par value of
the securities. The discount, or difference between the principal paid to
purchase the security and the principal returned at maturity, constitutes
the investor's return
Page 16 of 77
Recent Measures to liberalize and strengthen Financial Sectors

1)
2)
3)
4)
Interest rates were liberalized;

Open market operation was activated by introducing new bills.
Attempts were made to improve governance in the financial sector.
Reform initiatives attempted to improve legal aspects, corporate
governance, loan recovery, exchange and interest rates management,
NCB's functions, risk management and efficiency of the Bangladesh
Bank.
5) Better disclosure and transparency standards have been introduced;
6) fit and proper tests prescribed for bank directors, chief executives and
advisors;
7) Restriction imposed on the composition of the membership of the
board of directors; the roles and functions of the board and
management were clarified and redefined.
8) Audit Committees were mandated for all banks with clear guidelines
and TORs and Early Warning System (EWS) was introduced.
9) To strengthen the banking operation, minimum capital requirement
was raised from Tk. 400 million to Tk. 1000 million and the
requirement on risk-weighted basis was also increased. Now it is
raised to TK.2000 million.
10)
Stringent loan rescheduling conditions were introduced to stop
ever greening of loans.
Page 17 of 77
11)
An upper limit on a bank's exposure to a particular customer or
group was introduced.
12)
Strict measures have been laid and enforced on loan loss
provisioning.
13)
Loan write off guidelines were issued by the Bangladesh Bank,
allowing the banks for the first time, to write off 'bad' debts against full
provisioning.
14)
Large loan limit has been linked to bank's NPL ratio.
15)
BB is encouraging syndication of several banks for large loans
and has issued guidelines for restructuring such loans.
16)
The Core Risk Management Guidelines on five major risks has
been introduced by BB (credit, foreign
exchange, and assets-liabilities risk management, internal control and
compliance and anti-money laundering) laying down policies,
processes, procedures and structures that will lead to better
governance and improved services. Credit Risk Grading Manual is
prepared so that bank can follow uniform procedure for taking decision
to sanction loan and to judge the quality of loans. Prudential guidelines
for SME and consumer finance loan are introduced.
17)
In the monetary and foreign exchange front we have an
exchange rate regime, which is now market determined. Floating of
taka since June 2003 was achieved without encountering undue
volatility.
18)
Further reform in simplifying and streamlining forex operations
and payment system is underway.
19)
New financial instruments of varying tenure such as repo and
reverse repo and government investment bonds of longer tenor have
been introduced. Efforts are underway to develop the government and
corporate bond market. BB and the Securities and Exchange
Commission (SEC) agreed to allow the government bonds to be traded
in the stock exchange.
20)
Securitization of receivables of private financial institutions has
started.
21)
Initiation of capacity building program in the Bangladesh Bank.
Service standards have been introduced for work in different
departments. Workflow analysis has been initiated to bring in greater
speed and ensure quality. The Central Bank Strengthening Project
(CBSP) includes (a) computerization of the operations of the
Bangladesh Bank, (b) human resource development through reforms of
recruitment, promotion and compensation policies, (c) restructuring of
the different departments, (d) reengineering the business processes,
(e) automation of the Clearing House, (f) capacity building in the core
activities i.e. monetary policy, regulation of the financial sector, and
research and policy analysis. The goal is to transform the decades-old
traditional and manual system to a modern, automated system.
22)
BB has got a Policy Analysis Unit (PAU) which produces various
analytical policy briefs and
publishes Monetary Policy Review,
Financial Sector Review and Bangladesh Bank Quarterly.
Risk Weighted Capital Adequacy Ratio
Page 18 of 77
Definition of Capital
For the purpose of supervision, capital will be categorized into two
tiers: Tier 1 i.e. Core Capital comprising the highest quality capital
elements and Tier 2 i.e. Supplementary Capital represents other
elements, which fall short of some of the characteristics of the core
capital but contribute to the overall strength of a bank. The
constituents of core capital and supplementary capital are enclosed at
Annexure-I.
Minimum Capital Standards
Each bank will maintain a ratio of capital to risk weighted assets of not
less than 9% (At present 10%) with at least 4.5% (at present 5%) in
core capital and this requirement will have to be achieved by 30 June
2003 (within 2009). However, the minimum capital requirements of Tk.
40 crore for locally incorporated banks and an amount equivalent to
USD 10 million for banks incorporated outside Bangladesh will remain
unchanged until further instructions.
Risk-weighted Assets
Both balance sheet assets and off-balance sheet exposures are to be
weighted according to their relative risk. Presently, there are 4(four)
categories of risk weights - 0, 20, 50 and 100 percent. For the purpose
of assessing capital adequacy, weights for particular items are given in
Annexure-II.
Off-balance sheet transactions are to be converted into balance sheet
equivalents for the purpose of assessing the capital adequacy before
assigning a risk weight as shown in section 10(a) of Annexure-II. Four
categories of credit equivalents of 0, 20, 50 & 100 percent will apply.
Details are shown in Annexure-III.
CONSTITUENTS OF CAPITAL
CORE CAPITAL (TIER-1)
A. Paid up Capital
B. Non-repayable Share premium account
C. Statutory Reserve
D. General Reserve
E. Retained Earnings
F. Minority interest in Subsidiaries
G. Non-Cumulative irredeemable Preference Shares.
H. Dividend Equalization Account
SUPPLEMENTARY CAPITAL (TIER-2)
A. General provision (1% of Unclassified loans)
B. Assets Revaluation Reserves
C. All other Preference Shares
D. Perpetual Subordinated debt
E. Exchange Equalization Account
Note 1: Core Capital must be equal to or more than 4.5% (at present
5%) of the risk-weighted assets.
Note 2: Reserves created by periodic revaluation of banks' assets can
be included as a Component of Tier-2 capital only if the revaluation is
formally conducted by professionally qualified valuation firm. Such
reserves will be eligible up to 50% for the treatment as Supplementary
Capital provided that the rationale of the re-valued amount is duly
Page 19 of 77
certified by the external auditors of the bank. Such revaluation may be

done once in a year.
Bangladesh Economy
1. GDP
-Bangladesh economy grew by 6.51 percent in FY07
compared to 6.63 percent in FY06
2. GNP
--
3. Per Capita Income
--
US$482
4. Foreign Exchange Reserve

5. Inflation
--
--
US$5.06 b
10.03%
BOP and BOT Status

Trade balance recorded a larger deficit of US$717 million during JulyAugust, 2007 compared to the deficit of US$156 million during JulyAugust, 2006. Despite larger current transfers of US$1128 million,
current account balance recorded a deficit of US$68 million during
July-August, 2007 against the surplus of US$389 million during JulyAugust, 2006 due to larger deficits in trade balance, services and
income. However, the overall balance showed a surplus of US$130
million during July-August, 2007 against the surplus of US$107 million
during July-August, 2006 due mainly to surplus in financial account of
US$170 million.
EXPORT
According to EPB data, merchandise export shipments in August, 2007
stood higher at US$1129.08 million compared to US$903.72 million in
July, 2007. However, exports during July- August, 2007 decreased by
US$269.01 million or 11.69 percent to US$2032.80 million against
increase of US$537.16 million or 30.44 percent to US$2301.81 million
during July-August, 2006.
Export Items: Raw Jute and jute Goods, Tea, Leather, Frozen Food,
Woven Garments, Knitwear, Chemical Products, Agricultural products
( Includes Vegetable, Fruit, Tobacco), Engineering and Electronic
goods
Category-wise share of total exports, (July, 2007)
Others*
(15.87%)
Jute goods
(2.48%)
Frozen food
(5.08%)
Knitwear
(38.37%)
Woven
(38.20%)
* Others means residual items.
Page 20 of 77
Import
Import payments in August, 2007 stood lower by US$56.00 million or
3.62 percent to US$1490.00 million, against US$1546.00 million in
July, 2007. This was, however, US$146.70 million or 10.92 percent
higher than US$1343.30 million in August, 2006. Import payments
during July-August, 2007 increased by US$341.50 or 12.67 percent to
US$3036.00 million compared to US$2694.50 million during JulyAugust, 2006. Of the total import payments during July- August, 2007,
imports under Cash and for EPZ stood at US$2775.70 million, under
Loans/Grants US$4.20 million, import under direct investment
US$16.30 million and short term loan by BPC US$239.80 million.
Fresh opening of import LCs in September, 2007 decreased by
US$39.76 million or 2.23 percent to US$1744.65 million compared to
US$1784.41 million in August, 2007. However, this was US$287.50
million or 19.73 percent higher than US$1457.15 million in the same
month of the previous year. Fresh opening of import LCs during JulySeptember, 2007 increased by US$1099.74 million or 25.97 percent to
US$5334.79 million against US$4235.05 million during JulySeptember, 2006.
Sectoral Distribution in L/C Opening, ( July-September, 2007 )
Industrial RM 37.39%
Capital Machinery 7.69%
Intermediate Goods 8.14%
Consumer Goods 15.18%
Petroleum and petroleum Prod. 7.76%
Machinery for misc. ind.7.39%
Others 16.46%
Total import (july-Aug07) 5334.79
Remittance
Remittances in October, 2007 stood lower at US$562.87 million against
US$590.67 million of September, 2007. However, this was higher than
US$377.34 million of October, 2006. Total remittances receipts during JulyOctober, 2007 increased by US$484.24 million or 28.36 percent to
US$2191.60 million against US$1707.36 million during July-October, 2006.
Page 21 of 77
Banking Techniques
1. Venture capital
Capital provided by a bank or any other financial institutions to a
business enterprise to start a new business. This capital is often
considered as risk capital since new business or the project may
collapse at the beginning of its operation; but such venture may also
bring high returns as well.
2. Shadow price
In a business application, a shadow price is the maximum price that
management is willing to pay for an extra unit of a given limited
resource.[1] For example, what is the price of keeping a production
line operational for an additional hour if the production line is
already operated at its maximum 40 hour limit? That price is the
shadow price. The true economic PRICE of an activity: the
OPPORTUNITY COST. Shadow prices can be calculated for those
goods and SERVICES that do not have a market price, perhaps
because they are set by GOVERNMENT. Shadow pricing is often
used in COST-BENEFIT ANALYSIS, where the whole purpose of the
analysis is to capture all the variables involved in a decision, not
merely those for which market prices exist.
3. CRR n SLR
CRR-4%
SLR-18%
4. CAMELS
Page 22 of 77
Capital adequacy
Asset quality
Management quality
Earning capacity
Liquidity
Sensitivity to the risk
5. Core Risk Management
5 (five) core risk areas of banking are;
Credit Risk
Foreign Exchange Risk
Internal Control and Compliance Risk
Money Laundering Risk
Asset Liability Management Risk.
The principal objective of risk management is to safeguard the
banks capital, financial resources, profitability and market
reputation. To this effect, the bank took the following steps under
the guidelines of Bangladesh Bank.
6. REPO & Reverse REPO
Repo is a money market instrument, which enables collateralised
short term borrowing and lending through sale/purchase operations
in debt instruments. Under a repo transaction, a holder of securities
sells them to an investor with an agreement to repurchase at a
predetermined date and rate.
A reverse repo is the mirror image of a repo. For, in a reverse repo,
securities are acquired with a simultaneous commitment to resell .
Hence whether a transaction is a repo or a reverse repo is
determined only in terms of who initiated the first leg of the
transaction. When the reverse repurchase transaction matures, the
counterparty returns the security to the entity concerned and
receives its cash along with a profit spread. One factor which
encourages an organisation to enter into reverse repo is that it
earns some extra income on its otherwise idle cash.
7. Bond
A debt investment in which an investor loans money to an entity
(corporate or governmental) that borrows the funds for a defined
period of time at a fixed interest rate. Bonds are commonly referred
to as fixed-income securities.
The indebted entity (issuer) issues a bond that states the interest
rate (coupon) that will be paid and when the loaned funds (bond
principal) are to be returned (maturity date). Interest on bonds is
usually paid every six months (semi-annually).
Ex. Zero coupon bond, Convertible bond, Redeemable bond, etc.
8. DSCR
Page 23 of 77
In corporate finance, it is the amount of cash flow available to meet

annual interest and principal payments on debt, including sinking
fund payments. In government finance, it is the amount of export
earnings needed to meet annual interest and principal payments on
a country's external debts. In personal finance, it is a ratio used by
bank loan officers in determining income property loans. This ratio
should ideally be over 1. That would mean the property is
generating enough income to pay its debt obligations.
In general, it is calculated by:
A DSCR of less than 1 would mean a negative cash flow. A DSCR

of less than 1, say .95, would mean that there is only enough net
operating income to cover 95% of annual debt payments. For
example, in the context of personal finance, this would mean that
the borrower would have to delve into his or her personal funds
every month to keep the project afloat. Generally, lenders frown on
a negative cash flow, but some allow it if the borrower has strong
outside income.
(After Tax Profit + Depreciation + Interest paid) / (Interest paid +
12 months principal i.e. Loan + LT Debt maturing under 1 year)
9. BASEL-1 & BASEL-II
Why adequacy of Capital is important For Banks
1) Capital adequacy is to ensure rule is to ensure that institution has enough capital in
relation to risk (credit risk, market risk, operational risk) involve with their activity
2) Enough capital means the amount of capital sufficient to meet any unforeseen loss.
Present Capital Adequacy Requirement for Banks as per BASEL-1
Current Capital Regulation in Bangladesh
Capital /RWA >=10% or TK.200.00 crore which ever is higher
Assets are all of on and off balance sheet assets
Risk weghts are 0%, 20%, 50% and 100%
Composition of Capital
Tier 1 or core Capital: 1) paid up capital 2) statutory reserve 3) general reserve 4) retained
earnings 5) Dividend equalization account 6) non repayable share premium
Tier2 or supplementary capital: 1) General provision on PA loans (1% of UC loans) 2)
Asset Revaluation Reserve 3) Exchange Equalization account
About BASEL Committee
BASEL Committee is established by central bank governors of G-10 countries at the end
of 1974.
G-10 Countries are Belgium, Canada, France, Germany, Italy, Japan, Luxemborg, The
Netherlands, Spain, Sweden, Switzerland,UK, USA
Weak Points of BASEL-1
1) All risks are not included
2) All private borrowers dont carry 100% risk
3) Not enough differentiation on counterparties
Capital Ratio according to BASEL-II
Page 24 of 77
Capital Base/RWA>=8%
(Credit Risk +12.5X (Market Risk+ Operational Risk)
Three Pillars of BASEL-II
1) Minimum Capital Requirement
2) Credit Risk (Risk measurement approach: Standardized, Foundation IRB, Advanced IRB)
a) Market Risk (Risk measurement approach: Standardized, Internal Model)
b) Operational Risk (Risk measurement approach: Basic indicator, Standardized,
Advance Measurement)
c) Supervisory Review
3) Market Discipline
10.
Money Laundering
A definition of what constitutes the offence of money laundering under Bangladesh law is set
out in Section 2 (Tha) of the Prevention of Money Laundering Act 2002 (Act No. 7 of 2002)
which is reads as follows: Money Laundering means (Au) Properties acquired or earned directly or indirectly through illegal means;
(Aa) Illegal transfer, conversion, concealment of location or assistance in the above act of
the properties acquired or earned directly of indirectly through legal or illegal means;
A concise working definition was adopted by Interpol General Secretariat Assembly in 1995,
which defines money laundering as: "Any act or attempted act to conceal or disguise the
identity of illegally obtained proceeds so that they appear to have originated from legitimate
sources".
Why we resist money laundering
1) It provides the fuel for drug dealers, smugglers, terrorists, illegal arms dealers, corrupt
public officials, and others to operate and expand their criminal enterprises. This drives up
the cost of government due to the need for increased law enforcement and health care
expenditures (for example, for treatment of drug addicts) to combat the serious
consequences that result.
2) Money laundering diminishes government tax revenue and therefore indirectly harms
honest taxpayers.
3) Money laundering distorts asset and commodity prices and leads to misallocation of
resources.
4) Among its other negative socioeconomic effects, money laundering transfers economic
power from the market, government, and citizens to criminals.
5) One of the most serious microeconomic effects of money laundering is felt in the private
sector. Money launderers often use front companies, which co-mingle the proceeds of illicit
activity with legitimate funds, to hide the ill-gotten gains. These front companies have
access to substantial illicit funds, allowing them to subsidize front company products and
services at levels well below market rates. This makes it difficult, if not impossible, for
legitimate business to compete against front companies with subsidized funding, a
situation that can result in the crowding out of private sector business by criminal
organizations.
Stages of Money Laundering
It is a process accomplished in 3 basic stages which may comprise numerous transactions by
the launderers that could alert a financial institution to criminal activity Placement - the physical disposal of the initial proceeds derived from illegal activity.
Layering - separating illicit proceeds from their source by creating complex layers of
financial transactions designed to disguise the audit trail and provide anonymity.
Integration - the provision of apparent legitimacy to wealth derived criminally. If the layering
process has succeeded, integration schemes place the laundered proceeds back into the
economy in such a way that they re-enter the financial system appearing as normal business
funds.
11. Know Your Customer Procedures
KYC procedure starts from opening account in the name of different clients irrespective of
borrowers and depositors. Each officer involved in account opening will be required to perform
due diligence on all prospective clients prior to opening an account. This process will be
Page 25 of 77
completed by fulfilling the documentation requirements e.g., Account Application, Bank

References, Source of funds and Identification for example and also a Know Your Customer
profile which will be used to record a clients source of wealth, expected transaction activity at
its most basic level. When opening accounts, the concerned officer will assess the risk that
the accounts could be used for money laundering, and will classify the accounts as either
High Risk or Low Risk. The risk assessment may be made using the KYC Profile Form given
in Annexure D in which following seven risk categories are scored using a scale of 1 to 5
where scale 4-5 denotes High Risk, 3- Medium Risk and 1-2 Low Risk:
12. Reporting of Cash Transaction Report (CTR)
The Anti-Money Laundering Compliance Officer (AMLCO) will monitor and analyze the daily
cash transaction and prepare daily Cash Transaction Report (CTR) as per format given in
appendix Ka of AML circular 10 in case of cash deposit, cash withdrawal and cash
remittance/online deposit of Tk.7.00 lac or above in a single transaction or multiple
transactions in any account in a single day. He or she will send CTRs to the CCU by the 1 st
week of subsequent month for onward submission of the same to Bangladesh Bank. Separate
CTR report will be needed to prepare for cash deposit, withdrawal and remittance/online
deposit.
13. Suspicious Activity Reporting Process
All employees of the bank are to remain conscious and alert to identify unusual/suspicious
transactions and just after detection of unusual/suspicious transactions which may have
connections with money laundering as per article 19(1) (Ga) of Money Laundering Prevention
Act, 2002 will be reported in writing as per proforma at Appendix-Ga of AML Circular02 and
AppendixKha of AML Circular10 to the nominated compliance officer of the of the branch.
Credit
1. Project appraisal aspects, KYC, KYP, PP etc.
Project appraisal means pre-investment analysis of an investment project to determine its
commercial and socio-economic feasibilities while project evaluation shows the post
investment achievement.
Aspects : 1) Technical 2) Marketing 2) Financial 4) Economic 5) Social & environmental 6)
Management competence
2. Principle of sound lending
Safety, Liquidity, Purpose, Profitability, Security, Spread, National interest and sustainability.
Page 26 of 77
3. Loan policy
A policy gives loan officers and banks management specific guidelines in making individual
loan decisions and in shaping the banks loan portfolio. (contains Lending authority, lines of
responsibility, operating procedure, required documentation, loan pricing, credit limit, etc.)
4. Equitable & Registered Mortgage
In registered mortgage, the mortgagor transfers to the mortgagee the legal title to the property.
On repayment of the loan the mortgagee transfers the title to the mortgagor. In case of an
equitable mortgage, the mortgagor deposits the title deeds with the mortgagee with the
intention of giving the mortgagee an equitable interest in the property. It does not require
registration.
5. SME
Enterprises shall be categorized using the following definition (fixed investment implies
exclusion of land and building, and valuation on the basis of current replacement cost only):
Small enterprise: an enterprise should be treated as small if, in todays market prices, the
replacement cost of plant, machinery and other parts/components, fixtures, support utility, and
associated technical services by way of capitalized costs (of turn-key consultancy services, for
example), etc, excluding land and building, were to be up to Tk. 15 million;
Medium enterprise: an enterprise would be treated as medium if, in todays market prices, the
replacement cost of plant, machinery, and other parts/components, fixtures, support utility, and
associated technical services (such as turn-key consultancy), etc, excluding land and building,
were to be up to Tk. 100 million;
For non-manufacturing activities (such as trading or other services), the Taskforce defines:
Small enterprise: an enterprise should be treated as small if it has less than 25 workers, in fulltime equivalents;
Medium enterprise: an enterprise would be treated as medium if it has between 25 and 100
employees;
6. LSI (Manufacturing and Service)
Large Industry means an industry in which the value/replacement cost of durable resources
other than land and factory buildings is above 100 million taka. Large Industry means an
industry in which more than 100 workers work.
7. MSI (Manufacturing and Service)
Medium Industry means an industry in which the value/replacement cost of durable
resources other than land and factory buildings is between 15 million and 100 million taka.
Medium Industry means an industry in which 25 to 100 workers work.
8. SSI (Manufacturing and Service)
Small Industry means an industry in which the value/replacement cost of durable resources
other than land and factory buildings is under 15 million taka. Small Industry means an
industry in which fewer than 25 workers work (unlike family members in a cottage industry).
9. Cottage industry
Cottage industry means an industry in which members of a family are engaged part-time or
full-time in production and service-oriented activities.
10. SWOT Analysis
Internal : Strength, Weakness
External : Opportunity, Threats (Challenges)
Strengths
Good asset quality, Satisfactory business growth, Good profitability, Experienced top
management, Good operating efficiency, Equity base enhancement decision, No short fall in
Capital Adequacy, Satisfactory NPL coverage, Professional management team, Satisfactory
risk management structure, Multi product financial institution, Strong distribution channel,
Satisfactory IT soft and hard infrastructure, Adequate capital base, Satisfactory liquidity
position, Market leader in Small & Medium scale industry banking among the local banks,
Government ownership
Page 27 of 77
Weaknesses
Dependent on fixed deposits, Moderate risk management system, Limited delegation of power,
Limited branch network, Poor Corporate Governance, Insignificant market share, Limited
disclosure, Concentrated ownership, Low non-funded business
Opportunities
Basel-II compliance for capital adequacy, Creation of brand image, Dual currency credit card,
SME and Agro based business, Real time online banking, Scope of whole sale banking with
NBFIs, Housing finance
Threats
Increased competition in the market, Market pressure for increasing the SLR, Supply gap of
foreign currency
11. CRGM (With Risks)
The Credit Risk Grading (CRG) is a collective definition based on the pre-specified scale
and reflects the underlying credit-risk for a given exposure.
A Credit Risk Grading deploys a number/ alphabet/ symbol as a primary summary
indicator of risks associated with a credit exposure.
Credit Risk Grading is the basic module for developing a Credit Risk Management system.
Number
Risk Grading
Superior
Short
Name
SUP
2
3
Good
Acceptable
GD
ACCPT
Marginal/Watchlist
MG/WL
65-74
Special Mention
SM
55-64
6
7
8
Sub-standard
Doubtful
Bad & Loss
SS
DF
BL
45-54
35-44
<35
Principal Risk Components:
Score
100% cash covered
Government guarantee
International Bank guarantees
85+
75-84
Weight:
Financial Risk
Business/Industry Risk
Management Risk
Security Risk
Relationship Risk
50%
18%
12%
10%
10%
Establish the Key Parameters

Principal Risk Components:
Financial Risk
Business/Industry Risk
Key Parameters:
Leverage, Liquidity, Profitability & Coverage ratio.
Size of Business, Age of Business, Business Outlook,
Industry Growth, Competition & Barriers to
Business
Management Risk
Security Risk
Relationship Risk
Compliance of
covenants/conditions & Personal Deposit.
Experience, Succession & Team Work.

Security Coverage, Collateral Coverage and Support.
Account
Conduct
,Utilization
of
Limit,
Page 28 of 77
12. Difference between CC(H) & CC(P)

CC (hypo)
The stocks of goods are under the control of
01
borrower.
For this letter of hypothecation is obtained
02
from the borrower.
Borrowers have to submit stock report on
03
monthly basis to the lending Bank.
Incase of CC (hypo) Bank obtained sufficient
04
collateral security for covering loan risk.
01
02
03
04
CC (Pledge)
lending Bank.
For this letter of pledge is obtained form the
borrower.
Bank maintains pledge register; stock reports not
require to submit.
Incase of CC(Pledge) Bank takes other collateral
security if available in the hand of borrower.
13. DP and Calculation

Margin is the borrowers contribution beside the borrowing contribution beside the borrowing
for procurement of any asset with business interest. Margin of security is the difference
between the written down value of the asset financed and the outstandings in loan given for it.
The DP of the client/ customer to be calculated after deducting the prescribed margin from the
value of the securities offered (pledged or hypothecated). Under no circumstances, advance
shall be allowed in excess of the DP of the customer. In case where the DP of the client
exceeds the limit sanctioned in its favor advances shall be allowed upto the extent of
sanctioned limit only.
14. SMA
A Continuous credit, Demand loan or a Term Loan which will remain overdue for a period of 90
days or more, will be put into the "Special Mention Account(SMA)" and interest accrued on
such loan will be credited to Interest Suspense Account, instead of crediting the same to
Income Account. This will help banks to look at accounts with potential problems in a focused
manner and it will capture early warning signals for accounts showing first sign of weakness.
Loans in the "Special Mention Account (SMA)" will have to be reported to the Credit
Information Bureau (CIB) of Bangladesh Bank. However, it is reiterated that loans in the
"Special Mention Account" will not be treated as defaulted loan for the purpose of section
27KaKa(3) of the Bank Company Act, 1991. Interest accrued on "Special Mention Account
(SMA)'' will be credited to Interest Suspense Account, instead of crediting the same to Income
Account.
15. NPA
Against which income not generating basically those account which account has been
classified.
16. Effect of NPA on Bank B/S
Asset quality gets reduced, decreases profit, high provision has to be made
17. What is Loanable fund and how it is quantified
Paid up capital+General reserve+Other reserve+Deposits+Borrowings+Undistributed
profit+Refinance loan (Bangladesh bank, ADB, Kfw, etc.)+Call loan-SLR-%Demand deposit
18. Large loan
Loan sanctioned to any individual or enterprise or any organization of a group amounting to
10% or more of a bank's total capital shall be considered as large loan.
Outstanding financing facilities by a bank to any single person or enterprise or organization of
a group shall not at any point of time exceed 35% (funded and non-funded credit facilities) of
the bank's total capital -- funded facilities do not exceed 15%-- all non-funded credit facilities
included in the loan shall be considered as 50% credit equivalent. However, in case of export
sector single borrower exposure limit shall remain unchanged at 50% of the bank's total
capital. But funded facilities in case of export credit shall also not exceed 15% of the total
capital.
The banks will be able to sanction large loans as per the following limits set against their
respective classified loans :
Page 29 of 77
Rate of net classified loans
The highest rate fixed for large loan against

bank's total loans & advances
56%
52%
48%
44%
40%
Upto 5%
More than 5% but upto 10%
More than 20%
19. Rescheduling
Term Loan
first rescheduling
second time
more than two times
overdue installments
at least 15%
minimum 30%
minimum 50%
Demand and Continuous Loan

Amount of Overdue Loan
Up to Tk.1.00 (one) crore
Tk. 1.00(one) crore to Tk. 5.00 (five) crore
Tk. 5.00(five) crore and above
the total outstanding amount of loan

10%
20%
30%
whichever, is less
whichever, is less
whichever, is less
Rates of Down payment

15%
10% (but not less than Tk.15.00 lac)
5% (but not less than Tk.50.00 lac)
If any Continuous or Demand Loan is rescheduled by restructuring/converting partly or wholly

into Term Loan and repayment installments have been fixed, application for rescheduling such
loans shall be considered on cash payment of minimum 30% of the overdue installments or
20% of the total outstanding amount of loan, whichever is less. For subsequent rescheduling
minimum 50% of the overdue installments or 30% of the total outstanding amount of loan
amount shall have to be deposited in cash.
20. Write off
Banks may, at any time, write off loans classified as bad/loss. Those loans which have been
classified as bad/loss for the last five years and for which 100% provisions have been kept
should be written off without delay. After issuance of this circular the process of writing off all
other loans classified as bad/loss should be started immediately. Under the process the oldest
bad/loss classified loans should be considered first for written off.
Banks may write off loans by debit to their current year's income account where 100%
provision kept is not found adequate for writing off such loans.
21. Money loan court Act, 2003 (12, 33, 46, 47, Mutual Settlement)
Artha Rin Adalat Ain 2003 (8 chapters & 60 sections) promulgated in the year 2003 in place of
the Artha Rin Adalat Act, 1990 which has came into effect on 01.05.2003. ***** from the
previous such laws. This law, for the first time empowered financial institutions with the right to
sell the mortgaged properties without / before going to the court, if Power of Attorney to sell the
mortgaged property obtained from the borrower at the time of execution of mortgage and
made it mandatory to sell out the securities over which the bank created charges before filing
of suits. Artha Rin Adalat Ain 2003 has fixed time limit for filing of suit for recovery of debt.
Time limit for serving of summons, submission of written statements, judgment, etc. and time
limit for filing of execution suit has been reduced substantially in this law which shall expedite
disposal of suits. Artha Rin Adalat Ain-2003 provided for Settlement of disputes through
Settlement Conference at the initiative of the court and in case of nonsettlement through
Settlement Conference, through Arbitration, keeping pending the normal proceedings of the
suit. Artha Rin Adalat Ain 2003 imposed some obligations to the bankers in respect of
disposal /sale out of securities, filing of suits, follow- up of suits etc., failure to perform some of
which is punishable offence and may harm the interest of the bank to a great extent. So
relative officers and executives of the bank should read this law meticulously and must act
accordingly in timely manner to avoid legal complications.
22. Difference between credit and investment
Page 30 of 77
23. Difference between guarantee and indemnity

Guarantee is a promise by a third person to the lender for the present or future debt of the
borrower. Bank guarantee is an irrevocable obligation in the form of written undertaking of a
Bank to pay an agreed sum, in case of default by a third party in fulfilling their obligations
under the terms of the Bank Guarantee. e.g. Bid bond, Performance bond, Shipping
guarantee, etc.
Contract of Indemnity is a contract by which one party promises to save the other from loss
caused to him by the conduct of the promissory himself, or conduct of any other person.
Difference : Guarantee is an undertaking to pay the debts of the creditor whereas Indemnity is
an assurance to compensate for any loss.
24. Charges
Fixed charge: A charge is said to be fixed is made specially definite and assets of a
permanent nature or assets capable of being ascertained and defined, e.g. charge or land and
building or heavy machinery. It prevents the loanee from with the property charged without
consent of the charge holders.
Floating charge: It is a charge on property, which is constantly charging e.g. stock. A
company can Deal with such properly in normal course of its business until it become fixed on
the hampering of an event. Thus, it is a charge on the assets of a company in general.
Pari-passu charge: Pari-passu charge is crated in cases of consortium lending where several
banks on financial institution lend to a single borrowers ageist some common securities in an
agreed ratio. In such charges all the creditors have equal priority, i.e. are entitled to have equal
rights over the assets as per the agreed share.
Second charge: A creditor holding a second charge by way of mortgage is entitled to the
proceeds after the first charge is met. The second charge holder must inform the first
mortgage about the second charge, so that he cannot part of title of the property.
25. Time limit for filing suit in Artha Rin Adalat Ain-2003.
Artha Rin Adalat Ain-2003 fixes time limit for filing of suit for recovery of debt and stated that
anything otherwise contained in the Limitation Act,1980, a financial institution shall file suit as
per provision of the Artha Rin Adalat Ain-2003 .The provisions and time limit for filing suits for
recovery of debt in Artha Rin Adalat Ain-2003 are as under :1) Where repayment period is less than three years :
a) If the amount of recovery in the total loan period is less than 20%, the financial
institution shall file suit within the period of one year from the date of expiry of the
repayment schedule.
b) In cases of reschedule of loan by the financial institution within the validity period
of repayment, if repayment amount of loan is less then 20% in the period of
reschedule, the financial institution shall file suit within the period of one year from
the date of expiry of reschedule period.
2) Where repayment period is 3 years and above :
If a borrower fails to pay back the loan as under after starting of re-payment schedule
according to the terms of the loan agreement ,the financial institution shall file suit
within the period of next one year :a) At least 10% of first one years repayable loan amount or
b) At least 15% of first two years repayable loan amount or
c) At least 25% of first three years repayable loan amount.
In cases of reschedule of loan by the financial institution within the aforesaid time limit,
the period of 1year or 2 years or 3 years shall be reckoned from the date of the
reschedule of the loan and one years time limit for filing suit shall be effective anew as
per above rules.
26. Limitation in imposing claim :
Artha Rin Adalat Ain 2003 provides that whatever may contain in the agreement between
the parties, the financial institution while instituting suit shall not claim more than 200% of
the capital ( original loan Tk. 100+ interest Tk. 200 = Tk.300 ). The court shall not entertain
any such claim which shall be more than 200% of the capital.
27. Function of Relationship Manager
Page 31 of 77
Reports to:
Head of Corporate Banking
Purpose of Job:
The jobholder serves as the primary relationship contact with the Banks corporate and
commercial customers. To maximize relationship profitability through cross selling. To
minimize credit losses through thorough risk assessment and timely identification of
deteriorating credit risk of customers.
Responsibilities:
Provide good customer service while ensuring the Banks interest is protected.
Grow the customer base through marketing and business development efforts,
including cross selling to existing customer base.
Ensure that credit quality is maintained and customer reviews are completed in
timely manner.
Maintain an in-depth knowledge of the customers business through regular

customer visits and industry research.
Ensure facility risk grades are accurate, and are changed in a timely manner as
soon as adverse information is known.
Seek assistance from CRM at the earliest if adverse trends in a customers

financial position are noted.
Follow up with customers to ensure the timely receipt of financial statements, loan
payments and all documentary requirements of the Bank.
Ensure compliance with internal policies and procedures and external regulatory
requirements, and that all internal and external audit recommendations are
implemented.
28. Functions of Credit Administration Department
i. Disbursement
ii. Custodian
iii. Compliance
iv. Monitoring
29. Loan classification
continuous loan
Demand Loan
Fixed Term Loans,

which are repayable
within maximum five
years of time
Fixed Term Loans,

which are repayable in
more than five years
of time
Sub-standard
past due/over due for 6
months or beyond but
less than 9 months.
past due/overdue for 6
not over 9 months from
the date of claim by the
bank or from the date of
creation of forced loan.
If
the
amount
of
'defaulted installment'
is equal to or more than
the
amount
of
installment(s) due within
6 (six) months, the
entire loan will be
classified
If
the
amount
of
'defaulted installment' is
equal to or more than
the
amount
of
12 (twelve) months, the
entire loan will be
classified
Doubtful
less than 12 months
not over 12 months from
creation of forced loan
If
the
amount
of
the
amount
of
12 (twelve) months, the
entire loan will be
classified
If
the
amount
of
the
amount
of
18 (eighteen) months,
the entire loan will be
classified
Page 32 of 77
Bad/Loss
months or beyond.
months or beyond from
creation of forced loan.
If
the
amount
of
the
amount
of
18 (eighteen) months,
classified
If
the
amount
of
the
amount
of
24 (twenty four) months,
classified
Short-term
Agricultural
Micro-Credit
and
after a period of 12
months
months
months
30. Mode of charging security

a) Mortgage
b) Hypothecation
c) Pledge
d) Lien
e) Assignment
f) Set-off
Trade Finance
1. NFCD : (TERM)
Who can open: A) All non-resident Bangladesh nationals and persons of
Bangladesh origin including those having dual nationality and ordinarily
residing abroad. B) Bangladesh nationals serving with Embassies/High
Commissions of Bangladesh in foreign countries as also the officers/staff
of the Government/semi-Government departments/nationalized banks and
Page 33 of 77
employees of body corporate posted abroad or deputed with International

and Regional agencies like IMF, World Bank, IDB, ADB etc. during their
assignments abroad may open such accounts. C) Foreign nationals and
companies/firms registered and/or incorporated abroad, banks, other
financial institutions including institutional investors and 100% foreign
owned (A-Type) industrial units in the Export Processing Zones in
Bangladesh, are also allowed to open and maintain NFCD accounts with
the ADs. The minimum amount of time deposits in such cases should be
US$ 25,000 or its equivalent in pound sterling, Euro or Japanese yen.
Other terms and conditions in respect of these account-holders will be the
same as those mentioned above for NFCD accounts of non-resident
Bangladesh nationals.
Who Can not open: Crew members of the Bangladeshi shipping
companies are not entitled to open such accounts.
Currencies: The accounts may be maintained in US dollar, pound
sterling, Euro or Japanese yen; initially with minimum amount of US$
1000 or pound sterling 500 or equivalent. Accounts may be opened
against remittances in other convertible currencies after conversion of
those into US Dollar, pound sterling, Euro or Japanese yen
Period : The accounts are in the nature of term deposits maturing after
one month, three months, six months and one year.
Interest Rates: The ADs will pay interest on deposits into the accounts at
the eurocurrency deposit rates. In case of premature repayments, the
interest amount will be forfeited to the depositing AD.
Tax: The interest on deposits into this account is exempt from the tax
payable under Income Tax Act.
Withdrawl of Principal and Interest: The account holder can freely
repatriate the balance and the interest accrue & thereon in foreign
exchange to the country of his residence or anywhere he chooses and may
at his option, convert the balance into local Taka at the prevailing
exchange rate.
2. RFCD :
Who can Open: Persons ordinarily resident in Bangladesh may open and
maintain Resident Foreign Currency Deposit (RFCD) accounts with
foreign exchange brought in at the time of their return from travel abroad.
Any amount brought in with declaration to Customs Authorities in form
FMJ and upto US $ 3000 brought in without any declaration, can be
credited to such accounts.
Who can not: Any non residents and International firms operating in
Bangladesh will not be allowed to open such accounts. Proceeds of export
of goods or services from Bangladesh or commission arising from business
deals in Bangladesh shall not be credited to such accounts.
sterling, Euro or Japanese yen.
Page 34 of 77
Period : The accounts will be treated as term only when kept for a period
of minimum 1 month.
Interest Rates: Interest in foreign exchange shall be payable on balances
in such accounts if the deposits are for a term of not less than one month
and the balance is not le ss than US $1000 or 500 or its equivalent. The
rate of interest shall be one quarter percent (0.25 percent) less than the
rate at which interest is paid on balances of bank in their foreign currency
clearing accounts maintained with the Bangladesh Bank.
Tax: Nothing has been said about Tax. It is deemed that AIT will be
applicable for such accounts.
Withdrawl of Principal and Interest: Balances in these accounts shall
be freely transferable abroad. Fund from these accounts may also be
issued to account-holders for the purpose of their foreign travels in the
usual manner (i.e. with endorsement in passport and ticket, upto US $
1500 in the from of cash currency notes and the remainder in the form of
TC).
3. Retention Quota Account:
Who can Open: A) Merchandise exporters are entitled to a foreign
exchange retention quota of 50% of repatriated f.o.b value of their
exports. However, for exports of goods having high import content (low
domestic value-added) like POL products including naphtha, furnace oil
and bitumen. readymade garments made of imported fabrics, electronic
goods, etc. the retention quota is 10% of the repatriated f.o.b value. B)
Service exporters may retain 5% and Software and Data entry/processing
exporters may retain 40% of their repatriated income as Retention Quota.
sterling, Euro or Japanese yen
4. FC Account
5. BOP:
What it is:
BOP is a summary of statement of all its economic
transactions with the rest of the world at a given year. Two components i)
Current account, ii) capital account. Current account includes trade in
goods and services and unilateral transfers. Capital account shows the
change in the nations assets abroad and the foreign asset in the nation.
Components of Current account and Capital Account:
Current account:
Exports of goods and services:
Export of goods
Export of services
(-) Import of goods and services:
Import of goods
Import of services
Balance of Trade
The net of Unilateral transfers:
Receipts
Grants
Page 35 of 77
Gifts
Private Inward remittances
Payments
Grants
Gifts
Private Outward remittances
Balance of Current account
Capital Account:
Outflow: (Assets in abroad):
Govt. assets other than official reserve
Private assets:
Direct investment in abroad
Foreign Securities
Nonbank Claims
Bank liabilities
Inflow: (Foreign Assets in the nation)
Foreign Direct investment
U.S. Treasury and other U.S. Securities
Nonbank liabilities
Bank liabilities
Balance of Capital account
6. SWAP:
In general SWAP is simultaneous sale and purchase of identical amounts
of one currency against another, for different maturities. A SWAP could be
spot against forward or forward against forward.
7. NITA:
Non-resident persons/institutions including non-resident Bangladesh
nationals may buy Bangladeshi shares and securities in Bangladesh
against freely convertible foreign currency remitted from abroad through
the banking channel. Transactions relating to such investments including
repatriation of dividend/ interest earnings and sale proceeds shall be
made through a Non-resident Investor's Taka Account (NITA)
8. EDF :
This fund was created in 1988 with the fund provided by IDA to GOB vide
BCD circular 29 dated 07/12/1988 to assure continued availability of
Foreign Exchange to meet the import requirement for export of non
traditional items including RMG. This fund is basically used to provide
funds to the exporters for import of raw materials on sight basis to bring
confidence of the foreign suppliers. The total fund amount as of now is
$150.00 million and the maximum amount of credit can be given to a
particular exporter is $1.50 million. The interest will be deducted @
LIBOR + 1 from the date of utilization of the fund.
9. Bill of Exchange:
Bill of Exchange act 1882 Bill of exchange is an unconditional order in
writing addressed by one person to another, signed by the person giving it
requiring the person to whom it is addressed to pay on demand or at fixed
or determinable future time at a certain sum of money to or to the order
of a specified person or to the bearer.
The main features are: a) It must be written unconditional order by a
definite drawer to pay a definite sum of money, b) The sum, as specified in
Page 36 of 77
it must be payable by a definite drawee on demand or on a fixed date or

on an ascertainable date, c) It must be payable to a set person or to his
order or to the bearer, d) It must be duly referred, dated, stamped,
endorsed (if required) and signed by the drawer and also indicating the
place of the drawing.
10.
Nostro Account:
A banks account with a correspondent bank/branch abroad in the
currency of that country.
11.
Vostro Account:
A local currency account of a foreign bank/branch. Thus the nostro
account of the account holder is a vostro account for the bank where it is
maintained.
12.
Loro Account:
The foreign banks maintaining accounts with each other in the separate
territory other than host nation is known as Loro account. Simply their
account with them.
13.
Different types of Intl Trade Payment:
Cash in advance: Buyer places the funds at the disposal of the seller
prior shipment of the goods or services.
Open account: An arrangement between the buyer and the seller
whereby the goods or services delivered to the buyer before any payment
received by the seller.
Collection: An arrangement between the buyer and the seller where the
seller ship the goods and relevant bi log exchange is drawn by the seller
on the buyer and document(s) sent to the bank with clear instruction for
collection through one of its correspondent bank located in the domicile of
the buyer.
Type of collection: URC 522, 1996
Documentary collection: After shipment, the seller submits drafts
and other documents to the remitting bank which sends the documents
to the collecting bank for payment. Article 2C, URC 522, 1996.
Clean Collection: An arrangement whereby the seller draws only a
draft on the buyer for the value of the goods and submits the same to
the remitting bank for payment. Article 2C, URC 522, 1996.
Direct collection: A direct collection is an arrangement whereby the
seller obtains his banks pre-numbered direct collection letter, thus
enabling him to send his documents directly to his banks
correspondent bank for collection. This accelerates the paper work
process.
Documentary Credit: The documentary credit is a definite undertaking
issued by a bank on behalf of the applicant or for its own use, to pay the
beneficiary the value of the draft or documents provided that the terms
and conditions of the credit complied with.
14.
Parties involve in L/C:
a) Applicant, b) Issuing bank, c) Advising bank, d) Confirming bank, e)
Transferring bank, f) Beneficiary, g) Paying/Negotiating/Accepting bank,
h) Reimbursing bank.
15.
Types of L/C:
Page 37 of 77
Revocable Credit: A revocable credit is a credit which can be amended

or cancelled by the issuing bank at any time without prior approval/ notice
to the beneficiary.
Irrevocable Credit: Since an irrevocable credit is that which can not be
amended/cancelled without any prior approval/notice to the beneficiary.
Revolving Credit: The revolving credit is one which restoring the credit
to the original amount after it has been utilized. The revolving credit can
be Cumulative or Non-cumulative. A cumulative revolving credit is that
which can not exceed the total L/C value after revolving. A non-cumulative
revolving L/C is that which is established for a certain amount and can
revolved with that amount for a certain period of time.
Transferable Credit: The transferable credit is the one that can be
transferred by the original beneficiary in full or in part to one or more
subsequent beneficiaries. Such credit can be transferred one only. Article
38 UCP 600.
Red Clause Credit: A red clause credit is a credit with a special
condition incorporate into it that authorizes the confirming bank or any
other nominated bank to make advances to the beneficiary before
presentation of the documents. Under this type of credit the opening bank
is liable for such pre-shipment credit made by the negotiating /nominated
bank.
Stand by Credits: The stand by credit is a documentary credit or similar
arrangement however named or described which represents an obligation
to the beneficiary on the part of the issuing bank to:
g) Repay money borrowed by the applicant or advanced to or for the
account of the applicant.
h) Make payment on account of any indebtness undertaken by the
applicant or
i) Make payment on account of any default by the applicant in the
performance of an obligation.
16.
L/C settlement methods:
a) Settlement by Payment, b) Settlement by Acceptance, c) Settlement by
Negotiation.
17.
INCOTERMS 2000 (EXW, CFR, CIF, CPT, CIP, DAF, FAS, FOB) :
EXW: EX Works means the seller delivers the goods at the disposal of the
buyer at his premises or at any named places not cleared for export and
not loaded on any vehicles.
CFR: Cost and Freight means the seller must pay the costs and freight
necessary to bring the goods to the named port or destination but the risk
of damage or loss after delivery are transferred from the seller to buyer.
Used for marine and inland waterway transport.
CIF: Cost Insurance and Freight means the seller must pay the costs and
freight necessary to bring the goods to the named port or destination but
the risk of damage or loss after delivery are transferred from the seller to
buyer. Moreover the seller has to procure marine insurance against the
buyers risk of loss or damage to the goods during the carriage. Used for
marine and inland waterway transport.
CPT: Carriage Paid To means the seller delivers the goods to the carrier
nominated by him and should pay the cost of the carriage to bring the
goods to the named destination but the risk of damage or loss after
delivery are transferred from the seller to buyer. Used for any mode of
transportation including multimodal.
Page 38 of 77
CIP: Carriage and Insurance Paid to means the seller delivers the goods
to the carrier nominated by him and should pay the cost of the carriage to
bring the goods to the named destination but the risk of damage or loss
after delivery are transferred from the seller to buyer. Moreover the seller
has to procure marine insurance against the buyers risk of loss or
damage to the goods during the carriage. Used for any mode of
transportation including multimodal.
DAF: Delivered At Frontier means that the seller delivers the goods at the
disposal of the buyer on the arriving means of transport not unloaded for
export but not cleared for import at the named point or place. Used
mainly for land / frontier trade.
FOB: free on Board means that the seller delivers when the goods pass
the ships rail at the named port of shipment. This means that the buyer
has to bear all the costs and risks of loss or damage to the goods from the
point of delivery. Used for marine and inland waterway transport.
18.
Transshipment:
Transshipment generally means transfer and reloading from one mode of
transport to another mode of transport ( Incase of multimodal transport
document) or from one vessel to another vessel within the same mode of
transport ( incase of marine and air transport document). But in case of
road, rail or inland waterway transport document, transshipment means
conveyance to another means of conveyance, such as road to rail to
waterway etc.
19.
Types of B/L:
Article 20 UCP 600
Through B/L: When a B/L covers goods being transshipped en-route.
It covers the whole voyage from one point of shipment to final
destination. Simply one transport document is used.
Short From/Blank B/L: B/L in which the detailed conditions of
transportation are not listed in full on the back of the B/L.
Straight B/L: The B/L which is issued to the name of a certain party
or directly in the name of the consignee and which can not be
transferred by endorsement.
Port or Custody B/L: B/L issued by the port officer or ware house
supervisor stating that the goods have been received for shipment.
Mates receipt: When the goods are handed over to the agent of the
shipping company for shipment and the agents contracts to do so and
issues a receipt which is known as Mates Receipt. When the goods are
actually shipped the Mates receipt is exchanged with the regular B/L.
On Board B/L: It is issued after the goods have been received on
board of the ship.
Charter Party B/L: A charter party is a contract under which a ship
owner agrees to place his ship, at the disposal of a merchant or other
person (Charterer) for the carriage of goods from one port to another
(voyage charter) or to let his ship for a specified period (time charter).
Two types : Demise ( when the ship owner only provides vessel and
Non demise (when the ship owner provides both vessel and crew).
Article 22,, UCP 600.
Forwarders Certificate of Receipt: It is issued by a freight
forwarder as a carrier or multimodal transport operator or as an agent
of a carrier or multimodal transport operator for the goods received
from shippers.
Page 39 of 77
Clean B/L: A B/L or transport document is one which bears no clause

or notation which expressly declares a defective condition of the goods
and/or packaging. Article 27, UCP 600.
20.
Documents of L/C (Types & Name):
a) Bill of exchange, b) Invoices and other documents, c) Transport
documents, d) Insurance documents. Totally these all are called shipping
documents.
21.
Convertibility of currency:
A currency is said to be convertible when it may be fully exchanged for
another currency. Convertibility of currency is not meant for domestic
transaction purposes. It is only required for international transactions. In
Bangladesh Current account has made convertible on October 20, 1993.
The capital account has been made partially convertible with the Foreign
Direct Investment and for Securities investment through NITA.
22.
Over invoicing & Under invoicing and its effect:
Over Invoicing excess value than the actual value effect - Foreign
Currency Drain, Under Invoicing less value than the actual value effect Duty Loss.
23.
Effect on import & export when taka gets stronger than F.C.:
When BDT gets stronger than the vale of the FC gets down, means the more
FC is available with the same amount of BDT. Usually it is done when the
countrys FX reserve remains more than required level and when the export
+ remittance earnings are much higher than the import + FC payments. At
this situation import is encouraged since more FC can be obtained against
BDT and the export is discouraged since the exporters will receive less BDT
against FC earnings.
24.
Accommodation bill:
An accommodation bill is prepared by the drawer/seller on the
drawee/buyer without any supply of any goods and services. This is done to
provide some financial help to the drawer/seller. In our country this is
possible for inland transactions and for international transactions this type
of accommodation is not possible.
25.
Export financing Pre-shipment, Post-shipment:
Pre-shipment export financings are BBLC, Packing Credit, ECC (Hypo),
ECC (Pledge), Post Shipment export financings are Negotiation of export
bill, Bill purchase, Advance against Export bill, Short Tem advances against
export etc.
26.
UCP 600: Effective from July 01, 2007. 39 articles
27.
URC 522: Effective from January 01, 1996. 25 articles.
28.
Difference between LBP/LADB:
LBP is Local Bill Purchased which means the bank shall purchase the
clean inland export documents on presentation and shall give the value to
the exporters without charging any interest on the face value of the bill.
On the other hand the LADB is Loan against Documentary Bill means
providing an exporter a post shipment loan against an export document,
Page 40 of 77
whether clean or not, without purchase of the same and shall charge
interest on the face value of the bill.
29.
Foreign exchange position:
Foreign exchange positions are represented by the balance of foreign
exchange operations (purchase and sale of foreign currency, securities
and documents that represent them, and gold exchange instrument)
recorded in a bank at a certain day.
Open position: Each open position has four major characteristics:
You're trading a particular currency pair, you're either long or short the
market (you've bought or sold, respectively), the size of the position in
increments of 100,000 of the base currency, and an exchange rate at
which the position was opened. For example a "EUR/USD, 500, S,
0.9220", means the trader Sold 500,000 Euros for U.S. Dollars at an
exchange rate of 0.9220.
Short Position: Short positions are taken when a trader sells currency
in anticipation of a downturn in price. Making this move allows the
investor to benefit from a decline.
Long Position: Long positions are taken when a trader buys a currency
at a low price in anticipation of selling it later for more.
Interday and Overnight Position: Intraday positions are all positions
opened anytime during the 24 hour period AFTER the close of Forex
Capitals normal trading hours. Overnight positions are positions that
are still on at the end of normal trading hours which are automatically
rolled by Forex Capital Management.
30.
Dealing room:
31.
Difference between entre-pot and re-export:
Entrepot Export: Entrepot trade may be carried out in compliance with
the Export Policy and Import Policy Order in force subject to the
following conditions:
a) The value of export is at least 5% more than the import value
b) No change can be made in respect of quantity, quality, shape or any
other attribute of the goods intended to be imported for entrepot;
c) Goods imported to Bangladesh may be taken outside the port area only
with the special approval of the concerned authority;
d) AD will not provide any foreign currency from local source; import cost
(on back to back basis) may be met from realized proceeds through
entrepot trade; that is, AD will not bear any liability on behalf of its
customers for import payment in entrepot trade;
Re-Export: Re-export (import for export) may be carried out in
compliance with the Export Policy & Import Policy Order in force
subject to the following conditions wherein import, processing and
subsequent re-export shall be conducted under the authorization and
supervision of Customs Authorities:
a)
Goods (including goods under control list) may be imported for
re-export under bonded warehouse/ 100% bank guarantee/
provision of duty draw back for 100% export within stipulated
time;
b)
Minimum value addition shall be 10%; wherein re-export
consignment is brought in Bangladesh for subsequent reshipment in favor of foreign buyer, import cost alongwith freight
will not exceed 90% of the FOB value of re-export.
Page 41 of 77
c)
Quality, quantity and shape of the goods

changed;
are required to be
32.
Procedure for issuance of Industrial IRC:
At first an industrial IRC is issued on adhoc basis for an year with the
amount to be imported for the 1 st year. After completion of the first year the
concerned authority of CCI&E shall check the % of the amount authorized
at the time of 1st renewal. If the industrial concern was able to utilize at
least 80% of their limit then CCI&E issues the regular IRC. If the amount is
less than 80% then the concern will be given as 2 nd adhoc.
33.
BBLC % as per Import Policy Order:

a. For Knit garments minimum value addition should be 20%
b. For all non-quota category oven items minimum value addition
should be 20%
c. If the price of the quota category oven item is FOB USD40.00 the3n
minimum value addition should be 20%
d. For all type of quota category if FOB value more than USD40.00
minimum value addition should be 20% but minimum price per dzn
should be not less than USD12.00
e. For high value added quota and non quota RMG, minimum value
addition should be 20% and 15% respectively.
f. For all type of sweater export minimum value addition should be at
least 20%
g. For kids wear the minimum value addition should be 15%
34.
Cash FC and TC sell limitation:
For any Resident Bangladeshi the maximum amount of FC can be taken
under travel quota is USD3000.00 of Which maximum USD1500.00 can be
taken as cah and other in the form of TC. But if the Resident Bangladeshi
maintains RFCD account, he will be allowed take FC upto the account
balance with the endorsement in the passport and with the cash limitation
of USD1500.00.
35.
Rules related to EPZ concerns:
FC Accounts of EPZ concerns: The following procedure shall apply to
release of foreign exchange to the enterprises against exports made from
EPZs:
100% of repatriated export proceeds of a Type A industrial unit in
EPZ may be retained in FC account in the name of the unit with an AD
in Bangladesh. Balances in the FC account may freely be used to meet
all foreign payment obligations including import payment obligations
of the unit and payment obligations in foreign exchange to BEPZA.
Balances from the FC account will also be freely encashable for local
disbursements or for crediting Taka account maintained with an AD for
meeting Taka payment obligations like wages, rents, rates, taxes etc.
Taka account maintained with ADs by Type A units in EPZ may be
credited only with encashments of funds from FC accounts or of other
inward remittances from abroad. However, receipts from Taka sales of
factory refuses and of unusable portion of raw materials of Type A
industries may be credited to the Taka accounts provided the
permission letter of BEPZA for the sale and evidence of payment of
duties/ taxes on sale proceeds are produced to the AD. Balances in the
Page 42 of 77
Taka accounts cannot be converted to foreign exchange and may only

be used for meeting local expenses
Upto 80% of the repatriated export proceeds of Type B and Type C units
other than those in the garments sector may be retained in FC
Accounts maintained in the names of the units with their ADs; for a
Type B or Type C unit in the garments sector, upto 75% of the
repatriated export proceeds may be credited to FC account maintained
in the name of the unit with an AD. The remainder of the export
proceeds should be encashed to taka at the prevailing exchange rate.
All foreign payments obligations of Type B and Type C units including
import payments and repayments of foreign loans may be met out of
the balances in their FC accounts; payment obligations in foreign
exchange of a type B unit to the BEPZA may also be settled from
balances in its FC account. Balances in the FC accounts of the Type B
and Type C units are freely encashable to Taka for local disbursements
Credit facilities to EPZ concerns: (A) 100% foreign owned enterprises in
the EPZs known as type A industries may obtain short term foreign
currency loans from overseas banks and financial institutions subject to
the following conditions:
(i) The loan shall be received through an AD in Bangladesh; and the loan
proceeds will be credited to the FC account maintained by the AD in
the name of the Type A unit, to be used for financing import of capital
machinery and raw materials, payment of interest /service charges,
repayment of loans and for crediting Taka account for meeting local
expenses;
(ii) Only assets fully owned by the Type-A industry may be lodged as
collaterals for such loans;
(iii)
Repayment of principal and interest on the loan shall be
remitted out of the balances available in the FC account without prior
Bangladesh Bank approval. No fund may be provided from the ADs
own resources for such repayment except with prior approval of
Bangladesh Bank;
(iv)
In case the loan is called up by the creditor, the asssets charged
to foreign lender will be allowed to be sold only in foreign exchange
and proceeds, after paying off all local liabilities in Bangladesh, may be
remitted abroad with Bangladesh Banks approval;
(vi)
No Taka loan against repatriable short term foreign currency
loan will be allowed to a Type A industry.
(B) Type B industries (joint venture projects) may also obtain such loans
subject to conditions applicable to Type A industries as indicated above,
except that Type B industries will not be permitted to mortgage/ hypothecate
their fixed assets, raw materials in favour of any non-resident. The ADs may,
however, issue guarantee to overseas banks/ financial institutions for short
term foreign currency loans brought into Bangladesh by Type B industries,
subject to prior approval of the Bangladesh Bank.
Taka loan maybe granted to a joint venture (Type B) industrial unit in EPZ
upto 100% of short term foreign currency loan brought in and encashed to
Taka. Loan in Taka for procurement of capital machineries for setting up a
Type B industry, not exceeding the local partners share of ownership of the
unit, may be extended on normal Taka loans to Type B units banker-customer
relationship. Prior Bangladesh Bank approval should be obtained by the AD
while providing foreign exchange for import of the machineries out of the
Page 43 of 77
Taka loan. Repayments of the Taka loans alongwith interests should be

received out of the foreign exchange earnings of the unit.
ADs may extend credit facilities to Type C industries (100% locally owned) as
admissible to
such industries outside EP Z.
In establishing import LCs on account of Type A, B and C units in the EPZs
ADs shall bear in mind the position that the import payments may be made
only out of the foreign exchange earnings of the concerned units or out of
their borrowings abroad credited in their FC accounts, and that no funds
from the ADs own foreign exchange resources can be used for this purpose.
Before opening inputs import LC against an export LC or export order
received by an EPZ unit the AD should satisfy itself completely about the
clarity of the conditions in the export order/ LC, the standing and credit of
the foreign buyer and the ability of the exporting unit for timely execution of
the export order. In opening inputs import LCs on account of Type B and
Type units, domestic value addition requirements prescribed for the
respective items by the Ministry of Commerce should also be abided by.
Import payments against the LCs should be scheduled in a manner that
payment obligations do not fall due before receipt of export proceeds. In all
cases of opening input import LCs on accounts of units in the EPZ, ADs
should satisfy themselves that necessary arrangements have been made by
the opener that in case of shortfall or delay in export receipts, foreign
exchange would be made available from external sources.
36.
Quota :
Application of a reduced or zero duty rate for a specified quantity of
imported goods, or for goods imported during a given period.
37.
GSP:
GSP (General System of Preferences) Under which goods from certain
countries are given preferential rates of import duty.
38.
Changes in UCP 600:

a. The term parties has been replaced by banks.
b. Important definitions of the UCP have been accumulated into
a single article
c. All interpretive issues of UCP have been placed into a single
article
d. Revocable letter of credit has been kept out of the scope of
the UCP 600.
e. In general, articles stated in future form in UCP 500 are
restructured into present form.
f. The phrase unless otherwise stipulated in the credit has
been removed from UCP 600.
g. The phrase on its face has been mostly taken out from the articles
while composing the texts of the UCP 600
h. The common starting of transport document if a credit calls for
has been dropped, and in all other respects meets the stipulations
of the credit of UCP 500 has been removed form UCP600.
i. Article 5 and 12 of UCP 500 regarding incomplete and unclear
instructions, Article 8 in regard to Revocation of a Credit, and
Page 44 of 77
article 30 connected with Transport documents issued by freight

forwarders of UCP 500 have found no place in the UCP 600.
j. In the article 1 of UCP 500, the phrase shall apply to all
documentary credit is replaced by are rules that apply to
any documentary credit.
k. Some of the definitions of article 2 [line 9] appears to have new
meaning. Applicant has been termed as party. Credit has been
defined only as irrevocable undertaking.
l. Introducing the term Honour offers a new dimension. The
definition of Negotiation appears differently. And the UCP
600 has defined presentation explicitly.
m. Interpretation of the term Bank rightly accommodates other
entities to demonstrate wider scope.
n. Addition of a sentence has made it is more distinct that
credit is a separate contract
o. All parties concerned has been replaced by banks of UCP
600.
p. UCP 600 has identified four terms of payment , no different from
UCP 500.
q. The liabilities and responsibilities of issuing and confirming
bank have been split out in two articles.
r. UCP 600 brings in the concept of second advising bank.
s. Amendment issues along with advising banks
responsibilities related to amendment of UCP 500 have been
placed in a new article.
t. Slightly modified text of the article 10 [c] of UCP 500 has been
placed under a new title Nomination.
u. Removal of as reflected in these articles at the end of
international standard banking practice;
v. Maximum period allowed to examine documents reduced to
five banking days from seven;
w. The term reasonable time has been removed in connection
with time required for examination of documents
x. The UCP 500 provision on submission of documents within 21 days
after the date of shipment has been accommodated under a new
article;
y. The UCP 500 article 22 on Issuance Date of Documents V. Credit
Date retained in the UCP 600 with new wordings.
z. The presentation of documents by or on behalf of the second
beneficiary has been made to the transferring bank.
Page 45 of 77
General Knowledge
Nobel
ECONOMICS
Awarding institution: The Royal Swedish Academy of Sciences
And the prize goes to...
Leonid Hurwicz , Eric S. Maskin , and Roger B. Myerson
"for having laid the foundations of mechanism design theory".
[Mechanism Design Theory] [It describes how motivation and flow of
information make market more active.When market system does not
work properly due to clash between Business Corporate houses and
Political Government, by using this theory highest level of social
benefit can be achieved]
PEACE
Awarding institution: The Norwegian Nobel Institute
And the prizes go to...
Intergovernmental Panel on Climate Change (IPCC) and Albert Arnold
(Al) Gore Jr.
"for their efforts to build up and disseminate greater knowledge about
man-made climate change, and to lay the foundations for the measures
that are needed to counteract such change".
LITERATURE
Awarding institution: The Swedish Academy
Doris Lessing
"that epicist of the female experience, who with scepticism, fire and
visionary power has subjected a divided civilisation to scrutiny".
CHEMISTRY
Gerhard Ertl
"for his studies of chemical processes on solid surfaces".
Page 46 of 77
PHYSICS
And the prizes go to... Albert Fert and Peter Grnberg
"for the discovery of Giant Magnetoresistance".
PHYSIOLOGY or MEDICINE
Awarding institution: The Nobel Assembly at the Karolinska Institute
And the prizes go to...
Mario R. Capecchi , Sir Martin J. Evans , and Oliver Smithies
"for their discoveries of principles for introducing specific gene
modifications in mice by the use of embryonic stem cells"
New 7 wonders
1.
2.
3.
4.
5.
6.
7.
Taj Mahal, India

Chichen Itza, Mexico
Machu Picchu, Peru
Colosseum, Italy
Petra, Jordan
Great Wall, China
Christ Redeemer, Brazil
Page 47 of 77
SPORTS
Cricket
1. 20-20-2007
a. Champion--India
b. VenueSouth Africa
c. Bangladeshs performance2nd round (won against West Indies
in 1st round)
d. Player of the tournamentShahid Afridi (Pakistan)
e. Next year venue2009--England
2. World cup--2007
a. Champion--Australia
b. VenueWest Indies
c. Bangladeshs performanceSuper eight (Won against India &
Barmuda in 1st round and against South Africa in Super 8)
d. Player of the tournamentMathew Hayden (Aus)
e. Next year venue2011 India, Pakistan, Srilanka, Bangladesh
3. Test
a. Most RunsB.C. Lara11953 runs
b. Most CenturiesS.R. Tendulkar37
c. Most wicketsShane Warne708 wickets
4. One day
a. Most Runs S.R. Tendulkar 15962 runs
b. Most CenturiesS.R. Tendulkar41
c. Most wicketsWasim Akram502 wickets
Football
1. World cup--2006
a. Champion--Italy
b. Venue--Germany
c. Golden ballZinedine Zidane (France)
d. Golden bootMiroslav Klose (Germany)5 goals
e. Next year venue2010-South Africa
Page 48 of 77
Others
1. India
a. P.M.-Dr. Monmohan Singh
b. President-Smt. Prativa Devi Sing Patil
c. Finance Minister-Mr. P. Chidambaram
d. Foreign Minister-Mr. Pranab Mukhrjee
2. Pakistan
a. Advisor of Care taker Prime Minister-Mr. Mohammedmian
Soomro (Former Banker)
b. President-Mr. Pervez Musharrof
3. Bangladesh
a. Finance Advisor-Mr. A B Mirza Azizul Islam
b. Education Advisor-Mr. Ayub Quadri (Former Director of
BASIC)
c. Governor-Dr. Saleh Uddin Ahmed
d. Deputy Governor
a. Mr. Md. Nazrul Huda
b. Mr. Ziaul Hasan Siddiqui
c. Mr. Murshid Kuli Khan (New)
e. Finance SecretaryDr. Mohammed Tarique
Page 49 of 77
Economy Glossary
Most Common:
Gross domestic product (GDP): The value of the total final output
produced inside a country during a given year. It equals GNP (gross
national product) less overseas remittances.
Real GDP:
GDP(gross domestic product) adjusted for inflation. Real GDP provides
the value of GDP in constant dollars, which is used as an indicator of
the volume of the nation's output.
Gross national product (GNP): The value of all final goods and
services produced during a year by the factors of production in a
country. It is the sum of expenditures by consumers and governments,
gross investment spending, and total merchandise exports less
imports. It is a measure of the gross value added by all of the economic
agents in the economy. A related concept is net national product,
which subtracts out depreciation of investment and thus is equal to net
value added of all consumption, government spending, net investment,
and exports minus imports.
Page 50 of 77
Gross national income (GNI): GNI is equal to gross national

product, but measures the income produced by the gross national
product rather than the value of the product itself. Thus GNI is equal
to wages and salaries, rents, and profits from all economic entities in
an economy.
Dumping: When exports are sold at prices below marginal cost often
as a result of government subsidy.
Balance of Payment: A record of the countrys transactions with the
rest of the world over a given period.
Balance of Trade: A record of a country's exports and imports of
goods and services
Broad Money: Items in narrow definitions plus other items that can
be readily converted into cash.
Narrow Money: Items of money that can be spent directly (cash and
money in cheque-book/debit-card accounts).
Exchange rate: The rate at which one national currency exchanges
for another. The rate is expressed as the amount of one currency that
is necessary to purchase one unit of another currency (e.g. $1.60 =
1).
Floating exchange rate system: The flexible exchange rate system
in which the exchange rate is determined by the market forces of
supply and demand without intervention.
Depreciation: A drop in the free-market exchange rate of the
domestic currency with foreign currencies.
Appreciation: A rise in the free-market exchange rate of the domestic
currency with foreign currencies.
Inflation: A general rise in the average level of all prices.
Demand-pull inflation: Inflation caused by persistent rises in
aggregate demand.
Internal rate of return (IRR): The rate of return of an investment:
the discount rate that makes the net present value of an investment
equal to zero.
Equi-marginal principle: Consumers will maximise total utility from
their incomes by consuming that combination of goods where MUa/Pa
= MUb/Pb = MUc/Pc = MUn/Pn.
Page 51 of 77
Special Drawing Rights (SDRs): Additional liquidity created by the

IMF. SDRs give countries the right to borrow a certain amount of
additional funds from the IMF, with no requirement for extra deposits
(quotas).
Value added tax (VAT) A tax on goods and services, charged at each
stage of production as a percentage of the value added at that stage.
Economic growth: An increase in the nation's capacity to produce goods and
services.
Economic Development:
Economies of scale: If all the inputs in a production process are
increased and the output increases by proportionately more than the
inputs were increased, economies of scale are being realized. There
may also be diseconomies of scale which occur when an increase in all
inputs brings about a less than proportionate increase in output.
High-powered money: The monetary base, or the total of currency in
circulation and commercial bank deposits with the central bank.
Consumer price index (CPI): A price index that measures the cost of
a fixed basket of consumer goods with weights based on consumption
shares of urban consumers.
Budget:
Sustainable Development:
Developing Country:
Less Development Countries (LDCs)
Net Present Value:
Backward Linkage:
Forward Linkage:
Absolute advantage: A country has an absolute advantage over
another in the production of a good if it can produce it with less
resource than the other country can.
Aggregate demand: Total spending on goods and services made in
the economy. It consists of four elements, consumer spending (C),
investment (I), government spending (G) and the expenditure on
Page 52 of 77
exports (X), less any expenditure on imports of goods and services (M):
AD = C + I + G + X M.
Aggregate supply: The total amount of output in the economy.
Assets: Possessions or claims held on others
Barter economy: An economy where people exchange goods and
services directly with one another without any payment of money.
Workers would be paid with bundles of goods.
Budget
a statement outlining the spending plans of a government or an individual usually for
the coming year.
Budget deficit: The excess of central governments spending over its

tax receipts.
Budget line: A graph showing all the possible combinations of two
goods that can be purchased at given prices and for a given budget.
Budget surplus: The excess of central governments tax receipts over
its spending.
Business cycle or Trade cycle: The periodic fluctuations of national
output round its long-term trend.
Capital: All inputs into production that have themselves been
produced: e.g. factories, machines and tools
Consumer surplus: The excess of what a person would have been
prepared to pay for a good (i.e. the utility) over what that person
actually pays.
Producer surplus: The difference between revenue received and the
variable costs of production for each unit of a commodity sold.
Represents a contribution to fixed costs and producer profits.
Crawling peg: A system whereby the government allows a gradual
adjustment of the exchange rate.
Crowding out: Where increased public expenditure diverts money or
resources away from the private sector.
Deadweight loss of an indirect tax: The loss of consumer plus
producer surplus from the imposition of an indirect tax.
Dualism: The division of an economy into a modern (usually urban)
sector and a poor traditional (usually rural) sector.
Page 53 of 77
ECU (European Currency Unit): The predecessor to the euro: a

weighted average of EU currencies. It was used as a reserve currency
and for the operation of the exchange rate mechanism (ERM).
Elasticity: A measure of the responsiveness of a variable (e.g. quantity
demanded or quantity supplied) to a change in one of its determinants
(e.g. price or income).
Endogenous variable: A variable whose value is determined by the
model of which it is part.
Exogenous variable: A variable whose
independently of the model of which it is part.
value
is
determined
Engel curve A line showing how much of a good people will demand
at different levels of income.
Forward exchange market: Where contracts are made today for the
price at which currency will be exchanged at some specified future
date.
Game theory (or the theory of games): The study of alternative
strategies oligopolists may choose to adopt, depending on their
assumptions about their rivals behaviour.
Giffen good: An inferior good whose demand increases as its price
increases as a result of a positive income effect larger than the normal
negative substitution effect.
Gini coefficient: The area between the Lorenz curve and the 45 line
divided by the total area under the 45 line.
Inferior good: A good whose demand decreases as peoples incomes
rise.
Human Development Index (HDI): A composite index made up of
three elements: an index for life expectancy, an index for school
enrolment and adult literacy, and an index for GDP per capita (in
PPP$).
Incidence of tax: The distribution of the burden of tax between
sellers and buyers.
Indirect taxes: Taxes on expenditure (e.g. VAT). Paid to the tax
authorities, not by the consumer, but indirectly by the suppliers of the
goods or services.
Page 54 of 77
Inflationary gap: The excess of national expenditure over income

(and injections over withdrawals) at the full-employment level of
national income.
Injections (J): Expenditure on the production of domestic firms
coming from outside the inner flow of the circular flow of income.
Injections equal investment (I) plus government expenditure (G) plus
expenditure on exports (X).
Inputoutput analysis: This involves dividing the economy into
sectors where each sector is a user of inputs from and a supplier of
outputs to other sectors. The technique examines how these inputs and
outputs can be matched to the total resources available in the
economy.
Law of demand: The quantity of a good demanded per period of time
will fall as price rises and will rise as price falls, other things being
equal (ceteris paribus).
Law of diminishing (marginal) returns: When one or more factors
are held fixed, there will come a point beyond which the extra output
from additional units of the variable factor will diminish.
Liquidity ratio: The proportion of a banks total assets held in liquid
form.
Liquidity trap: The absorption of any additional money supply into
idle balances at very low rates of interest, leaving aggregate demand
unchanged.
Lorenz curve: A curve showing the proportion of national income
earned by any given percentage of the population (measured from the
poorest upwards).
Marginal cost (of production): The cost of producing one more unit
of output:
Marginal propensity to consume: The proportion of a rise in

national income that goes on consumption:
.
Microeconomics: The branch of economics that studies individual
units: e.g. households, firms and industries. It studies the
interrelationships between these units in determining the pattern of
production and distribution of goods and services.
Macroeconomics: The branch of economics that studies economic
aggregates (grand totals): e.g. the overall level of prices, output and
employment in the economy.
Page 55 of 77
Mixed economy: An economy where economic decisions are made

partly by the government and partly through the market.
Econometrics: The science of applying statistical techniques to
economic data in order to identify and test economic relationships.
Money multiplier: The number of times greater the expansion of
money supply is than the expansion of the monetary base that caused
it:
.
Market: A place or institution where buyers and sellers come together
and exchange factor inputs or final goods and services. A market is one
particular type of economic rationing system.
Perfect competition: A market structure where there are many firms;
where there is freedom of entry into the industry; where all firms
produce an identical product; and where all firms are price takers.
Monopoly: A market structure where there is only one firm in the
industry.
Monopolistic Competition: A market structure similar to perfect
competition in that there are a large number of firms competing in a
given industry. However, each firm is selling a differentiated product
and may exploit brand preferences such that is may act as a
monopolist with respect to its own customers.
Monopsony: A market with a single buyer or employer.
Oligopoly: An market structure where there are few enough firms to
enable barriers to be erected against the entry of new firms.
Oligopsony: A market with just a few buyers or employers.
Open economy: One that trades with and has financial dealings with
other countries.
Open-market operations: The sale (or purchase) by the authorities of
government securities in the open market in order to reduce (or
increase) money supply or influence interest rates.
Opportunity cost: Cost measured in terms of the next best alternative
forgone.
Pareto optimality: Where all possible Pareto improvements have
been made: where, therefore, it is impossible to make anyone better off
without making someone else worse off.
Page 56 of 77
Free-market economy: An economy where all economic decisions are

taken by individual households and firms and with no government
intervention.
Imperfect competition:
competition and oligopoly.
The
collective
name
for
monopolistic
Phillips curve: A curve showing the relationship between (price)

inflation and unemployment. The original Phillips curve plotted wage
inflation against unemployment for the years 18611957.
Quantity theory of money: The price level (P) is directly related to
the quantity of money in the economy (M).
Rate of economic growth The percentage increase in output over a
12-month period.
Rate of Inflation: The percentage increase in the level of prices over
a 12-month period.
Seasonal unemployment: Unemployment associated with industries
or regions where the demand for labour is lower at certain times of the
year.
Stagflation: A term used in the 1970s to refer to the combination of
stagnation (low growth and high unemployment) and high inflation.
Variable factor: An input that can be increased in supply within a
given time period.
Velocity of circulation: The number of times annually that money on
average is spent on goods and services that make up GDP.
Purchasing power parity: A concept in which the dollar equivalent
will purchase the same bundle of goods in all economies. In calculating
purchasing power parity, adjustments are made to exchange rates to
raise or lower the relative value of currencies to equilibrate purchasing
power. The basis for the calculation is the dollar. The end result is to
raise currency values of low-income countries while maintaining
currency values of high-income countries.
Monetary policy: The set of policies determined by the Board of
Governors of the Federal Reserve System involving influence over the
money supply, short-term interest rates, and credit market conditions.
During periods of recession, lower interest rates and higher money
growth can help stimulate the economy. During periods of declining
unemployment and increasing inflation, monetary restraint by raising
interest rates and slowing the growth of money is usually indicated.
Page 57 of 77
Fiscal policy: The government's program determining the amount of

taxes and government expenditures to be made in a year. When an
economy is moving into recession, an expansionary economic policy
would dictate that the government should provide an economic
stimulus by increasing expenditures or reducing taxes. This is referred
to as a stimulative fiscal policy. During periods with low unemployment
and rising inflation, constraining fiscal policy is often suggested,
involving increased taxes or reduced government expenditures.
Classical economics: school of thought developed by Adam Smith. This theory
holds that there is no need for government regulation of the economy since the
invisible hand of the market will lead to the best possible results.
Neo-classical economics: a theory that calls for the deregulation of the

economy in order to allow markets to set prices for all commodities, including labor.
Keynesian macroeconomics: The theory that shows how a marketbased capitalist economy may reach equilibrium with large scale
unemployment and how government spending may be used to raise it
out of this to a new equilibrium at the full-employment level of output.
International Monetary Fund IMF: An international organization
with 146 members, including the United States. The main functions of
the IMF are to lend funds to member nations to finance temporary
balance of payments problems, to facilitate the expansion and
balanced growth of international trade, and to promote international
monetary cooperation among nations. The IMF also creates special
drawing rights (SDR's), which provide member nations with a source
of additional reserves. Member nations are required to subscribe to a
Fund quota, paid mainly in their own currency. The IMF grew out of
the Bretton Woods Conference of 1944.
Measure of the U.S. money stock that consists of currency held by the
public, travelers checks, demand deposits, and other checkable
deposits including NOW (negotiable order of withdrawal) and ATS
(automatic transfer service) account balances and share draft account
balances at credit unions.
Substitute goods: Goods which may be used in place of other goods.
Complementary Goods: A pair of goods where the quantity demanded of
one increases when the price of a related good decreases.
Diminishing Marginal Utility (DMU): An economic concept that refers to the
notion that additional units consumed of a particular commodity
provide less and less additional satisfaction relative to previous units
consumed.
Marginal Rate of Substitution: The rate by which a consumer may
substitute a quantity of one good for another holding his/her level of
utility constant.
Page 58 of 77
Production Possibilities Frontier: A relationship between two types of

output defining the tradeoff that exists in allocating resources from
production of one good to the other
Pareto optimality: The condition which exists when it is impossible to

make any individual better off without making any other individual
worse off.
Says law: Supply creates its own demand. In other words, the
production of goods will generate sufficient demand to ensure that
they are sold.
Game Theory: A modeling technique that accounts for strategic behavior of economic
agents reacting to the actions of others
Malthas Theory of Population:
Rosto Theory:
Purchasing power parity
The Economist defines purchasing-power parity theory as follows:

Purchasing-power parity theory. A theory which states that the
exchange rate between one currency and another is in equilibrium
when their domestic purchasing powers at that rate of exchange are
equivalent.
The theory that, in the long run, identical products and services in
different countries should cost the same in different countries. This is
based on the belief that exchange rates will adjust to eliminate the
arbitrage opportunity of buying a product or service in one country and
selling it in another. For example, consider a laptop computer that
costs 1,500 Euros in Germany and an exchange rate of 2 Euros to 1
U.S. Dollar. If the same laptop cost 1,000 dollars in the United States,
U.S. consumers would buy the laptop in Germany. If done on a large
scale, the influx of U.S. dollars would drive up the price of the Euro,
until it equalized at 1.5 Euros to 1 U.S. Dollar - the same ratio of the
price of the laptop in Germany to the price of the laptop in the U.S. The
theory only applies to tradable goods, not to immobile goods or local
services. The theory also discounts several real world factors, such as
transportation costs, tarrifs and transaction costs. It also assumes
there are competitive markets for the goods and services in both
countries.
Govt. Borrowings & its implication

In economics, crowding out theoretically occurs when the government
expands its borrowing to finance increased expenditure, or cuts taxes (i.e.
is engaged in deficit spending), crowding out private sector investment
Page 59 of 77
by way of higher interest rates. To the extent that there is controversy in

modern Macroeconomics on the subject, it is because of disagreements
about how financial markets would react to more government borrowing.
If increased borrowing leads to higher interest rates by creating a greater
demand for money and loanable funds and hence a higher "price" (ceteris
paribus), the private sector, which is sensitive to interest rates will likely
reduce investment due to a lower rate of return. More importantly, a fall
in fixed investment by business can hurt long-term economic growth of
the supply side, i.e., the growth of potential output. Crowding out can, in
principle, be avoided if the deficit is financed by simply printing money,
but this carries concerns of accelerating inflation. Crowding out of
another sort may occur due to the prevalence of floating exchange rates,
Government borrowing leads to higher interest rates, which attract
inflows of money on the capital account from foreign financial markets
into the domestic currency (i.e., into assets denominated in that
currency). Under floating exchange rates, that leads to appreciation of the
exchange rate and thus the "crowding out" of domestic exports (which
become more expensive to those using foreign currency).
Narrow money , broad money
M1 : Measures of money supply of a country, including all coins and notes
plus personal money in current accounts.
M2 : Measures of money supply, including all coins and notes plus
personal money in current and in all deposit accounts.
M3 : Broadest measure of money supply, including coins and notes,
personal money in current and deposit accounts, government deposits and
deposits in currencies other than local/national currency.
United States they are defined by the Federal Reserve
M0: The total of all physical currency, plus accounts at the central bank
that can be exchanged for physical currency.
M1: M0 - those portions of M0 held as reserves or vault cash + the
amount in demand accounts ("checking" or "current" accounts).
M2: M1 + most savings accounts, money market accounts, and small
denomination time deposits (certificates of deposit of under $100,000).
M3: M2 + all other CDs, deposits of eurodollars and repurchase
agreements.
There are just two official UK measures. M0 is referred to as the "wide
monetary base" or "narrow money" and M4 is referred to as "broad
money" or simply "the money supply".
M0: Cash outside Bank of England + Banks' operational deposits with
Bank of England.
M4: Cash outside banks (ie. in circulation with the public and non-bank
firms) + private-sector retail bank and building society deposits + Privatesector wholesale bank and building society deposits and Certificate of
Deposit.
PSI: Policy Support Instrument
Countries those are not in need of loan from IMF can enter in this
agreement. Through this IMF can control the Economic Policy of that
country. Only 4 African countries signed this agreement [Nigeria,
Uganda, Cape Verde and Tanzania]
Page 60 of 77
Poverty Reduction Strategy Papers (PRSP)

Poverty Reduction Strategy Papers (PRSP) are prepared by the member
countries through a participatory process involving domestic stakeholders
as well as external development partners, including the World Bank and
International Monetary Fund. Updated every three years with annual
progress reports, PRSPs describe the country's macroeconomic, structural
and social policies and programs over a three year or longer horizon to
promote broad-based growth and reduce poverty, as well as associated
external financing needs and major sources of financing. Interim PRSPs (IPRSPs) summarize the current knowledge and analysis of a country's
poverty situation, describe the existing poverty reduction strategy, and lay
out the process for producing a fully developed PRSP in a participatory
fashion. The country documents, along with the accompanying IMF/World
Bank Joint Staff Assessments (JSAs), are being made available on the
World Bank and IMF websites by agreement with the member country as
a service to users of the World Bank and IMF websites.
Least Developed Countries
(LDCs or Fourth World countries) are countries which according to the
United Nations exhibit the lowest indicators of socioeconomic
development, with the lowest Human Development Index ratings of all
countries in the world. A country is classified as a Least Developed
Country if it meets three criteria [1] based on:
low-income (three-year average GNI per capita of less than US $750,
which must exceed $900 to leave the list)
human resource weakness (based on indicators of nutrition, health,
education and adult literacy) and
economic vulnerability (based on instability of agricultural production,
instability of exports of goods and services, economic importance of nontraditional activities, merchandise export concentration, and handicap of
economic smallness, and the percentage of population displaced by
natural disasters)
The classification currently applies to around 49 countries (as of June 14,
2007).
Characteristics
Least developed countries generally suffer conditions of extreme poverty,
ongoing and widespread conflict (including civil war or ethnic clashes),
extensive political corruption, and lack political and social stability. The
form of government in such countries is often authoritarian in nature, and
may comprise a dictatorship, warlordism, or a kleptocracy. AIDS is a
major issue in a lot of these countries. The majority of LDCs are in SubSaharan Africa.
During the last United Nations review in 2003, the UN defined LDCs as
countries meeting three criteria, one of which was a three-year average
estimate of gross national income (GNI) per capita of less than US $750.
Countries with populations over 75 million are excluded. [4]
Trade and LDCs
Issues surrounding global trade regulations and LDCs have gained a lot of
media and policy attention thanks to the recently collapsed Doha Round of
WTO negotiations being termed a development round. During the WTO's
Hong Kong Ministerial, it was agreed that LDCs could see 100 percent
duty-free, quota-free access to U.S. markets if the round were completed.
Page 61 of 77
But analysis of the deal by NGOs found that the text of the proposed LDC
deal had substantial loopholes that might make the offer less than the full
100 percent access, and could even erase some current duty-free access
of LDCs to rich country markets. [5] [6], Dissatisfaction with these
loopholes led some economists to call for a reworking of the Hong Kong
deal. [7]
Developing country
A developing country has a relatively low standard of living, an
undeveloped industrial base, and a moderate to low Human Development
Index (HDI) score. In developing countries, there is low per capita income,
widespread poverty, and low capital formation. The term has tended to
edge out earlier ones, including the Cold War-defined "Third World",
which has come to have unintentional negative connotations associated
with it, but new terms such as less developed country (LDC) or less
economically developed country (LEDC) have not caught on yet. LEDC is a
term used by modern geographers to portray the countries classified as
"developing countries" more accurately, specifying that they are less
economically developed, which usually correlates best with other factors
such as low human development. The Correlation between an Ledc and
Medc, is characteristic of a sub-economical organistic system of living.
Development entails a modern infrastructure (both physical and
institutional), and a move away from low value added sectors such as
agriculture and natural resource extraction (with the exception of oil and
diamonds). Developed countries, in comparison, usually have economic
systems based on continuous, self-sustaining economic growth in the
tertiary and quaternary sectors and high standards of living.
The application of the term developing country to some of the world's less
developed countries could be considered inappropriate: a number of poor
countries are not improving their economic situation (as the term implies),
but have experienced prolonged periods of economic decline.
Countries with more advanced economies than developing nations, but
which have not yet fully demonstrated the signs of a developed country,
are grouped under the term newly industrialized countries.[1][2][3][4]
Measure and concept of development
The development of a country is measured with statistical indexes such as
income per capita (per person) (GDP), life expectancy, the rate of literacy,
et cetera. The UN has developed the HDI, a compound indicator of the
above statistics, to gauge the level of human development for countries
where data is available.
Developing countries are in general countries which have not achieved a
significant degree of industrialization relative to their populations, and
which have a low standard of living. There is a strong correlation between
low income and high population growth, both within and between
countries.
The terms utilized when discussing developing countries refer to the
intent and to the constructs of those who utilize these terms. Other terms
sometimes used are less developed countries (LDCs), least economically
developed countries (LEDCs), "underdeveloped nations" or "undeveloped
nations", Third World nations, and "non-industrialized nations".
Conversely, the opposite end of the spectrum is termed developed
countries, most economically developed countries (MEDCs), First World
nations and "industrialized nations".
Page 62 of 77
To moderate the euphemistic aspect of the word developing, international

organizations have started to use the term Less economically developed
country (LEDCs) for the poorest nations which can in no sense be
regarded as developing. That is, LEDCs are the poorest subset of LDCs.
This also moderates the wrong tendency to believe that the standard of
living in the entire developing world is the same.
The concept of the developing nation is found, under one term or another,
in numerous theoretical systems having diverse orientations for
example, theories of decolonization, liberation theology, Marxism, antiimperialism, and political economy.
Critics believe that at times the word "developing" is a misnomer. In the
case of countries ravaged by European colonialism, the word "redeveloping" may be more accurate since there were successful economic
systems prior to colonialism. Allegedly due to ethnocentrism, Western
analysts generally deem these prior interactions invalid and do not
consider them "developed". The premise is that "to develop" is the same
thing as "to develop in a western manner".
Differences
01
02
PC
PC means Packing Credit
It is a short-term pre-shipment credit allowed
to the exporter to process, pack and shipped
the goods.
TOD
01
02
96
ECC
ECC means Export Cash Credit
It is a form of advance allowed to the exporter
in cash for processing goods for export. Such
advance is adjusted from export proceeds.
95, 96
SOD
Page 63 of 77
01
01
LTR means Loan against Trust Receipt
01
02
It is an import connected loan facilities.

LTR liability is adjusted within 30 (thirty)
days.
For this LTR Register is maintained.
Stock of goods kept under borrower control.
02
SOD means Secured Overdraft

It is sanctioned for a stipulated period such as
one year.
It is allowed against encashable securities
such as FDR, PSP etc.
It has a sanction limit
Borrower can withdraw any amount as
required up to the sanction limit.
It is allowed as working capital to meet run
the business smoothly.
95
Crossed Cheque
When we draw two transverse parallel lines at
the left corner of a cheque with or without any
word is called crossed cheque.
Crossed
cheque
cannot
negotiate
by
endorsement and delivery.
Crossed cheque cannot be encashed and
collects through Bank.
It is more secured then order cheque for
stolen fraud and forgery.
98, 2001
LIM
LIM
means
Loan
against
Imported
Marchandise
It is also an import connected loan facility.
03
LIM liability is adjusted within 45-60 days.
04
05
For this LIM register is maintained.

Stock goods kept under Banks control.
02
03
04
05
06
TOD means Temporary Overdraft

It is allowed only for short time such as one
or two days.
It is allowed without security or against
collection of instrument.
It has not a sanction limit
Borrower cannot withdraw any amount as
required by him.
TOD allowed for meet up temporary crisis of
the borrower.
01
02
03
04
05
06
Order Cheque
01
02
03
04
When a cheque is ordered to a particular

person for payment is called order cheque.
Order cheque can negotiate by endorsement
and delivery.
It can be encashed and also collects through
Banks.
Order cheque is insecure for stolen fraud and
forgery.
01
02
03
04
LTR
03
04
05
01
02
01
02
03
Simple Interest
Simple interests are those interests, which
calculate and charge the account at yearly
basis.
In BASIC charge at the Micro Credit and Staff
loan A/c at the simple rate of interest.
LAN
LAN means Local Area Network.
It is a multi user computer operation in a
branch.
Usually this system being used under UNIX,
Windows etc. It is required a server and some
dump terminal.
01
02
01
02
03
04
A Bank can run their computer system by

LAN.
04
05
It has short range.
05
Single Entry
01
02
03
04
05
In single entry system only cash and personal

accounts are maintained.
Incase of single entry Trail Balance can be
prepared.
It is not a golden rule of accounting for
recording transactions.
Interpretation is not possible in the single
entry system.
Comparison and future plan is not possible
properly in this system.
01
02
03
04
05
DOS
01
DOS means Disk Operating System.
01
02
Under this system we can work using only

one computer
02
97, 98
Compound Interest
Compound interests are those interests, which
is calculating monthly basis but charge the
account at quarterly/half yearly basis.
In BASIC charge all SOD and CC account at
the compound rate of interest.
97
WAN
WAN means Wide Area Network.
It is also a multi user computer operation
inside and outside.
This system is required, Host server, Modem
and X.28/X.25 T & T line.
Under this modern technology a branch can
provide their sophisticated electronics Banking
service to their valued client.
It has broad range.
97
Double Entry
In double entry system every transactions are
recorded twice, one in the debit side of an
account and again in the credit side of another
account.
Incase of double entry Trial Balance can be
prepared.
In is a golden rule of accounting for recording
transaction.
Interpretation of a transaction is a must in
double entry system.
Comparison and future plan is made possible
in double entry system.
97
UNIX
UNIX is a multi user Computer Operating
System.
Under this system we can work using more
then one computer at a time.
Page 64 of 77
03
01
02
03
04
It is a normal operating system.

BASIC
BASIC means Bangladesh Small Industries
and Commerce Bank Limited.
It is a specialized scheduled Bank of the
country.
BASIC is a Bank, registered under the
Companies Act. 1913 and governed under the
Bank Company Act. 1991.
50% of its loanable fund should be used in
Small Scale Industries Sector (SSI)
03
It is a high security operating system.
01
97
BSCIC
BSCIC means Bangladesh Small and Cottage
Industries Corporation.
It
is
an
autonomous
Corporation
of
Government of Bangladesh.
02
03
04
Schedule Bank
01
02
03
04
05
A Bank which name is enlisted in the list of

Central Bank/B Bank is called Schedule Bank.
It must be maintained 20% Statutory Reserve
of total deposit.
Schedule Bank can take the opportunity of
Clearing House.
It can borrow from Central Bank at their hard
time.
Schedule Bank control by the Central Bank.
01
It does not maintain such reserve.
03
It cannot get this opportunity.
04
Non-schedule Bank cannot enjoy such facility.
05
01
Bank approved by Bangladesh Bank.
01
02
Bank can do all types of Banking activities.
02
03
Bank is governed under the Banking Company

Act, 1991.
03
04
Bank is enlisted in the list of Schedule Bank.
04
05
All Banks are Financial institutions.
05
02
03
04
01
02
03
04
05
Partnership
Partnership firm is formed on the basis of oral
or written contract among the partners.
Incase of partnership firm minimum member
will be 2(two) and maximum are 20 for
normal business and 10 for Banking business.
Incase of partnership liabilities are unlimited
of the partners.
It would be registered under the Company
Act, 1913.
CC(Pledge)
lending Branch/Bank.
It is sanctioned in the form of Working
Capital.
CC(Pledge) adjustable within 1(one) year.
Time to time is renewable.
For this maintaining register is called Pledge
Register.
CC(Pledge) requires letter of Pledge.
01
02
03
04
01
It is an import connected loan facility.
03
LIM liability adjustable within 45-60 days.
04
05
01
When a bill is payable at sight or on demand

is called sight bill or demand bill.
01
02
Incase of
necessary.
02
bill
L/C
no
stamp
duty
is
Central Bank cannot impose any controlling

power upon a non-schedule Bank.
97, 98
Financial Institution
Financial Institutions approved by Ministry of
Finance.
It does not work any kind of Banking
activities.
Financial Institutions are governed under the
Non-Banking Financial institution Act, 1993.
Financial Institutions are enlisted in the list of
Non-Banking Financial Institutions.
All Financial Institutes are not Bank.
98
Limited Company
Limited Company is formed by registration by
the register of the companies.
Incase of Limited company minimum member
will be 2 for Private Ltd. Co. and 7 for Public
Ltd. Co. and maximum are 50 for Pvt. Co. Ltd.
and unlimited or limited by share for Public
Co. Ltd.
Incase of Limited Co. liabilities of shareholders
are limited by the share value.
It also registered under the Company Act,
1913.
94
LIM
The stocks of goods are also under the control
of lending Branch/Bank.
02
Sight Bill
sight
The overview of corporation to increase of

production of Small Industries.
96
Non-Schedule Bank
A Bank which name is not enlisted in the list
of Central Bank/B Bank is called Schedule
Bank.
02
Bank
01
BSCIC
is
an
autonomous
body
for
development of Small and Cottage Industries.
For this maintaining register is called LIM

Register.
LIM requires letter of LIM.
Usance Bill
When a bill matures for payment after a
certain period of time after or after sight is
called Usance bills.
Incase of Usance bill proper stamped is
required.
1995
Back to Back L/C
Page 65 of 77
01
L/C is a credit contract where by the buyers bank

is committed (on behalf) of the buyer to pay a
certain sum of money at the sellers disposal
under agreed conditions stipulated in L/C.
01
02
L/C opens on cash reimbursement basis.
02
03
L/C opens for importing machinery and consumer

goods from abroad by the importer.
03
04
05
01
02
01
02
01
Retirements of documents by the importer cash

payment or extension of loan facilities such as
LIM, LTR etc.
L/Cs are two kinds i. Revocable L/C ii.
Irrevocable L/C
D/A
D/A means Document against Acceptance
Where the shipping document under the term
credit (Usance credit) is deliverable against
acceptance of the bill is known as D/A bill.
Development Bank
A development bank is a Bank, which help
industrial
and
agricultural
development
activities in the economy of the country.
Development bank provides long terms loan.
ADB, SABINCO, BSRS, BSB are development
bank.
Money Market
Money market deals with short term trade
financing.
04
05
01
02
01
02
03
01
02
02
03
The participants of money market are

commercial banks, insurance company, stock
exchange etc.
03
01
02
A state cheque is an invalid cheque. Banker

cannot make any payment against stale
cheque.
01
02
CRR
01
CRR means Cash Reserve Requirements
01
02
As per Bangladesh Bank circular schedule

banks maintain 4% CRR to Bangladesh Bank
02
03
CRR maintain in cash in CD A/c with

Bangladesh Bank a foreign currency A/c with
Bangladesh Bank.
03
Overdue Loan
01
02
03
When the sanctioned time limit is expired to

pay the loan then the loan is called overdue
loan.
It can be renewed to show regular loan.
Incase of overdue loan this is a primary stage
of the party default to pay the loan.
Back to back L/C opens against lien on

export L/C. Bank provide finance by opening
an inland L/C on behalf of the exporter.
Back to back L/C opens for importing raw
materials and accessories generally garments
industries opens a L/C.
Repayment is made from export proceeds.
B. to B L/C is two kinds i. Inland B to B L/C
ii. ...................... B to B L/C.
1996
D/P
D/P means Document against Payment.
Where the shipping document (under a sight
credit/ without credit) is deliverable against
payment is known as D/P bill.
Commercial Bank
The functions of money market are to deal

with treasury bill, open market debenture,
short term debenture share etc.
Stale Cheque
If a cheque is not presented for payment
within a reasonable period (normal cheque 6
months & Govt. Cheque 3 months) after the
date of issue is called Stale Cheque.
Back to Back L/C means an import L/C which

is back by export L/C.
01
02
03
A commercial bank is a bank, which help to

extend commercial function.
Commercial bank provides short-term loan.
Sonali, Rupali, Pubali, Agrani, Janata, BASIC
are commercial bank.
1997, 98, 2001
Capital Market
Capital market deal with long terms financing.
The functions of capital market are to
purchasing heavy machinery setup heavy
industry and to meet up fund of development
projects.
The participant of capital market is Shilpa
Bank, BSRS, special investments Bank,
SABINCO, Rajshahi Krishi Unnoyon Bank etc.
1998, 2001
Post dated Cheque
If the drawer or holder mentions a date on the
cheque, which is, later/subsequent to the date
on which it is drawn/presented for payment is
called post-dated cheque.
A post-dated cheque is not an invalid cheque.
Banker can make payment such cheque and it
becomes effective only on the date mentioned
therein.
1998, 2001
SLR
SLR means Statutory Liquidity Requirements/
Ratio
As per Bangladesh Bank circular schedule
banks maintains 16% SLR in his till as liquid
money.
SLR maintains in the form of cash Prize Bond,
Govt. approved security and account with
other banks.
2001
Classified Loan
After a certain period of overdue considering
Qualities Judgment and objective criteria the
said loan is classified as substandard, doubtful
and bad/loss, which is called, classified loan.
It can be reschedule to recover the loan.
Incase of classified loan this is a final stage of
the party default to pay the loan.
Page 66 of 77
04
01
02
03
04
05
01
02
03
04
05
01
02
Banker issue reminder to the party to pay the

overdue loan.
Loan
Loan is allowed for a specific purpose such as
house building loan, transport loan, industrial
term loan etc.
Loan is allowed for a definite period one year
or more against proper security.
Loan allowed in the form of industrial loan,
house building in staff loan, general etc.
The installment which once deposited cannot
be advance
Separate loan A/c is created for each loan
Cash Credit
When an advance limit is approved to the
businessman, traders and industrialist for
meeting working capital requirements under a
specific drawing power is called cash credit.
Cash credit is allowed against hypo. or pledge
of goods.
Borrower can draw money within sanction
limit or drawing power whichever is lower.
As security basis cash credit are of two types
i.CC(Hypo) and ii. CC(Pledge).
Separate loan account is created for each
loan.
Bank Solvency Certificate
Written certified by the Bank to the party is
financially solvent and maintains banking
transaction regularly is called Bank solvency
certificate.
It does not ensure financial guarantee by the
bank to the party if the party fails to pay any
contractual obligation to other.
04
Cash Credit
01
02
03
04
05
01
02
03
04
05
01
03
Bank receives fee from the clients to issue a

bank solvency certificate.
03
04
It does not specified certain future time and

cannot be cancelled or require to filling in any
cancelled file.
04
Cheque
01
It must be drawn only on a Banker.
01
02
The amount is always payable on demand.
02
03
04
Acceptance is not necessary.

A cheque can be crossed.
03
04
05
Notice of dishonour is not necessary.
05
01
Drawing up of two transverse parallel lines

with or without any words on the face of the
cheque constitutes general crossing.
General Crossing
02
03
04
Example of general crossing are :
01
02
It is done by drawer or holder of the cheque

Drawer can cancel the general crossing with
the signature.
Banker takes the help of the court to recover

classified loan.
03
04
Cash credit is allowed for the purpose of

working capital to run the business smoothly.
Cash credit is allowed normal one year or
shorter period against encashable securities.
Cash credit is allowed in the form of CC(H) &
CC(P).
Deposit and withdrawn can be made upto the
sanction limit as required by the borrower.
Creation of separate loan A/c is not necessary.
Drawing allowed in the current A/c of the
borrower.
Overdraft
When a current account holder is permitted by
the banker to draw more than what stands to
his credit, such an advance is called on
overdraft.
Overdraft is allowed against stock in trade,
shares, and debenture, FDR et.
Borrower can draw any amount from his
current account at any time within the
sanctioned limit.
O.D are of three-type i. TOD ii. COD and ii.
SOD (COD is normally un-used).
No separate account is created. Drawings are
allowed through current account of borrower.
2001
Bank Guarantee
Written guarantee given by the bank in behalf
of the client to pay a certain some of money if
the clients fail to pay his contractual obligation
is called Bank guarantee.
It ensures financial guarantee by the bank to
pay certain some of money if the party fails to
pay his contractual obligation.
Bank receives commission at a fixed rate from
the guarantee holder for issuing of the Bank
guarantee.
It issued for a specified future time and must
be cancelled on retire after the time is expired
and maintains it in the cancelled guarantee
file.
2000
Bill of Exchange
It must be drawn on any person including
Banker.
The amount may be payable on demand or
after a specific period.
A bill payable after sight must be accepted.
Crossing of a bill of exchange is not possible.
Notice of dishonour is necessary to hold the
parties liable thereon.
2000
Special Crossing
Drawing of two transverse parallel lines in
addition of the name of a Bank with branch or
only Bank across the face of a cheque
constitutes special crossing.
Example of general crossing are :
It is done by collective Bank of the cheque.
Special crossing can cancel by the concerned
Bank.
Page 67 of 77
96, 2000
97, 2000
01
02
03
04
05
01
02
01
02
03
01
02
03
04
01
02
03
04
05
Computer
Any file can be saved in computer for future
need.
Any calculation, graphic, design work can be
done in computer.
Computer has a CPU (Central Processing
Unit).
Most important facility like LAN, WAN,
Internet connection can be obtained in
computer.
Previous any work, which saved can recall
from computer memory.
NOSTRO A/C
It means our account with you
Here an authorized dealer maintains foreign
currency A/c with its foreign correspondent.
Equitable Mortgage
Equitable mortgage means a mortgage where
mortgagor deposits its title deeds to the
mortgage property.
In that case mortgagor holds only the
documents of the property.
Here registration is not required.
CC (hypo)
borrower.
For this letter of hypothecation is obtained
from the borrower.
Borrowers have to submit stock report on
monthly basis to the lending Bank.
Incase of CC (hypo) Bank obtained sufficient
collateral security for covering loan risk.
BCD
BCD means Bearer Certificate of Deposit.
In BCD depositors name is not mentioned.
Usually BCD interest is lower.
BCD encashed by any body.
In BCD interest rate is fixed-up by negotiation
between depositors and Bankers.
01
Type writer Machine

There is no scope in typewriter machine to
save any file.
02
There is no scope in typewriter machine.
03
Typewriter machine has no CPU.
04
There is no scope in typewriter machine.
05
01
02
01
02
03
01
02
03
04
01
02
03
04
05
There is no scope in typewriter machine to

recall any previous work.
96, 2000, 2001
VOSTRO A/C
It means your account with us.
Here a foreign correspondent maintains A/c
with an authorized dealer in local currency.
95, 2000
Legal Mortgage/Register Mortgage
Legal Mortgage is that mortgage where
mortgagor transfers its title of property to the
mortgage.
On repayment of the loans the mortgage is
transferred in also the mortgagor.
In this system registration is required.
96, 97, 2000
CC (Pledge)
lending Bank.
For this letter of pledge is obtained form the
borrower.
Bank maintains pledge register; stock reports
not require to submit.
Incase of CC(Pledge) Bank takes other
collateral security if available in the hand of
borrower.
95, 96, 97, 98, 2000
FDR
FDR means Fixed Deposit Receipt.
In FDR depositors name must be mentioned.
Usually FDR interest is higher than BCD.
FDR encashed by holder / nominee.
In FDR interest rate is fixed-up by the Banks
time-to-time policy.
Finance & Banking

Break-even point
1) The price level at which income equals expense.
2) The expense level at which expense equals income.
3) The market price of a financial instrument that just equals the
purchase price plus cost of carry for an investor owning that
instrument.
Page 68 of 77
4) The price level of a call option that equals the sum of the exercise price
plus the premium paid to acquire the option, or the price level of a put
option that equals the exercise price minus the premium.
Break-even sales
The minimum sales level that a firm must achieve in order to generate
enough cash flow to make all required principal and interest payments.
Opportunity cost
The cost of pursuing one course of action measured in terms of the
foregone return that could have been earned on an alternative course of
action that was not undertaken.
Asset Liability Management
The control/management of a Banks deposit and lending policies to
ensure safety, liquidity and profitability.
Bonded Ware-house
A customs store or godown where bonded goods are stored and remains
there until customs dues are paid.
Correspondent Bank
A bank in one country acts as agent for a bank of another country by
signing/establishing agency agreement/arrangement.
Square position
When the total amount of purchase of foreign currency is equal to the
amount of total sales, the bank reaches a Square Position.
MICR
One of the important means of efficient funds movement through the
organised sector of an economy is the process of clearing of cheques. To
facilitate quick processing of cheques and prompt settlement thereof,
mechanised cheque processing systems using Magnetic Ink Character
Recognition (MICR) technology for cheque clearing is going to be
introduced in Bangladesh.
Quick Ratio
(Current asset- Inventories) or (Cash on hand + Cash in Bank +

securities + net receivables)/Total current liabilities
The quick ratio is a measure of a companys immediate short-term
liquidity. An asset is liquid if it can be converted into cash
immediately or reasonable soon.
IRR what it is, implications borrowers perspective, lenders

perspective, limitations
The IRR is the interest rate (also known as the discount rate) that
will bring a series of cash flows (positive and negative) to a net
present value (NPV) of zero (or to the current value of cash
invested).
Page 69 of 77
Why is the IRR method still commonly used in capital budgeting? Its
popularity is probably a direct result of its reporting simplicity. The
NPV method is inherently complex and requires assumptions at
each stage - discount rate, likelihood of receiving the cash payment,
etc. The IRR method simplifies projects to a single number that
management can use to determine whether or not a project is
economically viable. The result is simple, but for any project that is
long-term, that has multiple cash flows at different discount rates,
or that has uncertain cash flows - in fact, for almost any project at
all - simple IRR isn't good for much more than presentation value.
MIRR
While the internal rate of return (IRR) assumes the cash flows from
a project are reinvested at the IRR, the modified IRR assumes that
all cash flows are reinvested at the firm's cost of capital. Therefore,
MIRR more accurately reflects the profitability of a project.
Thus, using the IRR could result in a positive NPV (good project),
but it could turn out to be a bad project (NPV is negative) if the
MIRR were used. As a result, using MIRR versus IRR better reflects
the value of a project.
Problems with IRR
There are a few misconceptions about the IRR calculation. The

major one is that IRR automatically assumes that all cash outflows
from an investment are reinvested at the IRR rate. IRR is the
"internal rate of return" with "internal" meaning each dollar in an
investment. It makes no assumptions about what an investor does
with money coming out of an investment. Whether the investor
gives it away or puts it in a coffee can, the IRR stays the same.
It does however have a few drawbacks. First, IRR is not made to
calculate negative cash flows after the initial investment. If an
investment has an outflow of $1,000 in year three and an IRR of
30%, the $1,000 is discounted at 30% per year back to a present
value. You would have to put this PV amount in an investment
earning 30% per year for the IRR to reflect the true yield.
Also, IRR ignores the reinvestment potential of positive cash flows.
Since most capital investments have intermediate (non-terminal)
positive cash flows, the firm will reinvest these cash flows. Unless a
better number is known, the firm's cost of capital is a reasonable
proxy for the return to be expected. Investments with large or early
positive cash flows will tend to look far better with IRR than with
MIRR for this reason.
To illustrate: a firm has investment options with returns that are
generally moderate. An unusually attractive investment opportunity
comes up with much higher return. The cash spun off from this
latter investment will probably be reinvested at the moderate rate
of return rather than in another unusually high-return investment.
In this case, IRR will overstate the value of the investment, while
MIRR will not.
Page 70 of 77
ERR
Profit generally is the making of gain in business activity for the

benefit of the owners of the business. The word comes from Latin
meaning "to make progress", is defined in two different ways, one
for economics and one for accounting.
Pure economic profit is the increase in wealth that an investor has
from making an investment, taking into consideration all costs
associated with that investment including the opportunity cost of
capital. Accounting profit is the difference between retail sales price
and the costs of acquisition (whether by harvest, extraction,
manufacture, or purchase). A key difficulty in measuring either
definition of profit is in defining costs. Accounting profit may be
positive even in competitive equilibrium when pure economic profits
are zero.
Management
Theory X
Management theory developed by Douglas McGregor, stating that
managers must supervise the subordinates closely in order to motivate
them.
Theory Y
Under this theory some managers beliefs that given the right conditions
and reward, the average employee finds work to be a source of
satisfaction, will exercise self-direction towards goals he is committed to,
seeks responsibility and in creative and innovative.
Theory Z
Management theory given by William Ouchi, describing the Japanese
system of management characterized by the workers deep involvement in
management, higher productivity than the U.S. management model, and a
highly developed system of organizational and sociological rewards. Ouchi
contends that this management system can be used anywhere with equal
success.
Qualities of a good manager:
a) Leadership skills
b) Team Objectives
c) Knowledge about the organizational goal.
d) Better communication
e) Motivating staff
f) Setting targets
g) Developing people
h) Proper delegation of work
Page 71 of 77
Online banking & Computer

Online banking (or Internet banking) allows customers to conduct financial
transactions on a secure network operated by their retail bank with
centralized database. The performance of banking activities via secure
network or internet. All branches will be connected to centralized server
through secured network.
Functions
The performance of banking activities via the Internet.
Internet access to your bank account allowing one to check balances,
transfer between accounts and launch international wires from
anywhere in the world.
Banking services that are processed electronically and offered to
customers via the Internet.
A system allowing individuals to perform banking activities at home,
via the internet. Some online banks are traditional banks which also
offer online banking, while others are online only and have no physical
presence. ...
Allows the depositor to perform selected banking transactions through
the internet.
Online banking (or Internet banking) is a term used for performing
transactions, payments etc. over the Internet through a bank, credit
union or building society's secure website. ...
The access of banking information and accounts to complete
transactions using a personal computer or terminal through a financial
institution's web site on the Internet. Also known as Internet banking.
Advantages of online banking
Page 72 of 77
Banks view online banking as a powerful "value added" tool to attract and
retain new customers while helping to eliminate costly paper handling and
teller interactions in an increasingly competitive banking environment.
Convenience: Unlike your corner bank, online banking sites never
close; they're available 24 hours a day, seven days a week, and they're
only a mouse click away.
Ubiquity: If you're out of state or even out of the country when a
money problem arises, you can log on instantly to your online bank and
take care of business, 24/7.
Transaction speed: Online bank sites generally execute and confirm
transactions at or quicker than ATM processing speeds.
Efficiency: You can access and manage all of your bank accounts,
including IRAs, CDs, even securities, from one secure site.
Effectiveness: Many online banking sites now offer sophisticated
tools, including account aggregation, stock quotes, rate alerts and
portfolio managing programs to help you manage all of your assets
more effectively. Most are also compatible with money managing
programs such as Quicken and Microsoft Money.
Disadvantages of online banking
Start-up may take time: In order to register for your bank's online
program, you will probably have to provide ID and sign a form at a
bank branch. If you and your spouse wish to view and manage your
assets together online, one of you may have to sign a durable power of
attorney before the bank will display all of your holdings together.
Learning curve: Banking sites can be difficult to navigate at first.
Plan to invest some time and/or read the tutorials in order to become
comfortable in your virtual lobby.
Bank site changes: Even the largest banks periodically upgrade their
online programs, adding new features in unfamiliar places. In some
cases, you may have to re-enter account information.
The trust thing: For many people, the biggest hurdle to online
banking is learning to trust it. Did my transaction go through? Did I
push the transfer button once or twice? Best bet: always print the
transaction receipt and keep it with your bank records until it shows
up on your personal site and/or your bank statement.
Features
Here are some of the features available through online banking:
View balances: Checking your balance doesn't require much work.
You simply select Account balances and take a look at your balance and
past transactions. If you have more than one account, you can also do
transfers between accounts.
Pay bills: To pay your bills online, you just need to add to your account
the names of the companies you wish to pay bills to. In the Pay Bills
section, select Add payees, search for the name of the company and fill
in the account number for each company. You can also sign up for the
E-bills service that sends you a bill by e-mail instead of a printed one
by regular mail.
Transfer funds: When you select Transfer Funds, you'll be asked
where to transfer the money to and from, when, and the amount.
Page 73 of 77
Set up recurring bill payments or transfers: If you make a regular

payment every month, it might be convenient to set up an automatic
withdrawal from your account.
Send and receive INTERAC Email Money Transfers: This could
be the end of the birthday cheque! You can receive transfers from
other people's accounts, or set up transfers from your account to
someone else's. The recipient will get an e-mail notifying them of the
transaction.
Order cheques: We don't need them much anymore due to online
banking and debit purchases, but if you still use cheques, you can
order them directly from the CIBC website.
Name of BASICs online project

Centralised online banking implementation project.
Date of inauguration
Number of employee in ICT division

Name of softwares
1. KASTLE core banking (general banking & loan)
2. PSITF
3. KASTLE Treasury
4. Internet Banking
Date of expected online banking (Live)
Present position of project
Why delay
What is Software?
Computer software is a general term used to describe a collection of
computer programs, procedures and documentation that perform some
task on a computer system. [1] The term includes application software
such as word processors which perform productive tasks for users,
system software such as operating systems, which interface with
Page 74 of 77
hardware to provide the necessary services for application software,

and middleware which controls and co-ordinates distributed systems.
What is Hardware?
Computer hardware is the physical part of a computer, including the
digital circuitry, as distinguished from the computer software that
executes within the hardware. The hardware of a computer is
infrequently changed, in comparison with software and data, which are
"soft" in the sense that they are readily created, modified or erased on
the computer. Firmware is a special type of software that rarely, if ever,
needs to be changed and so is stored on hardware devices such as
read-only memory (ROM) where it is not readily changed (and is,
therefore, "firm" rather than just "soft").
Difference between Software & Hardware?
A computer system comprises hardware and software.
Hardware is the physical medium, for example:
circuit boards
processors
keyboard
Software are computer programs, for example:
operating system
editor
compilers
a Fortran 90 program
What is program?
A program is a specific set of ordered instruction/operations for a
computer to perform
The terms computer program, software program, or just program are
used to refer to either an executable program (by both lay people and
computer programmers) or the collection of source code from which an
executable program is created.
What is Virus?
A computer virus is a computer program written to alter the way a
computer operates, that can copy itself and infect a computer without
permission or knowledge of the user
Why virus is harm to the computer?
Some viruses are programmed to damage the computer by damaging
programs, deleting files, or reformatting the hard disk. Others are not
designed to do any damage, but simply replicate themselves and
perhaps make their presence known by presenting text, video, or audio
messages. Even these benign viruses can create problems for the
computer user. They typically take up computer memory used by
legitimate programs. As a result, they often cause erratic behavior and
can result in system crashes. In addition, many viruses are bug-ridden,
and these bugs may lead to system crashes and data loss
What is Network?
A computer network is an interconnection of a group of computers.
Page 75 of 77
What is VOIP?
VoIP (voice over Internet Protocol) is an IP telephony term for a set of
facilities used to manage the delivery of voice information over the
Internet.
What type of network will be used in our online banking?
WAN and LAN
What is database?
A database is a collection of data that is organized so that its contents
can easily be accessed, managed, and updated.
Differentiate between database & RDBMS?
Relational Data Base Management Systems (RDBMS) are database
management systems that maintain data records and indices in tables.
Relationships may be created and maintained across and among the
data and tables.
DBMS includes the theoretical part that how datas are stored in a
table. It does not relate tables with another. While RDBMS is the
procedural way that includes SQL syntaxes for relating tables with
another and handling datas stored in tables. 1)rdbms is object based
database management system while dbms 2)rdbms can maintain at
many users at same time while dbms not 2)in rdbms is relation is more
important than object itself while dbms entity is more important The
main advantage of an RDBMS is that it checks for referential integrity
(relationship between related records using Foreign Keys).
In our country which banks are running online banking?
Describe the architecture of our online banking software.

1. Front-End: Delphi
2. Middle-ware: Tuxedo
3. Business Logic: COBOL
4. Database: Oracle
What is bandwidth? What are its determinants?
Bandwidth is a measure of the amount of data passing through a
network at a given time. In computer networks, bandwidth is often
used as a synonym for data transfer rate - the amount of data that can
be carried from one point to another in a given time period (usually a
second). This kind of bandwidth is usually expressed in bits (of data)
per second (bps). Occasionally, it's expressed as bytes per second
(Bps).
What is a Trojan horse?
Trojan horses are impostorsfiles that claim to be something desirable
but, in fact, are malicious. A very important distinction between Trojan
horse programs and true viruses is that they do not replicate
themselves.
What is a worm?
Page 76 of 77
Worms are programs that replicate themselves from system to system

without the use of a host file. This is in contrast to viruses, which
requires the spreading of an infected host file. Although worms
generally exist inside of other files, often Word or Excel documents,
there is a difference between how worms and viruses use the host file.
Page 77 of 77

BASIC Promotion Tips

Transféré par

Informations du document

Copyright

Formats disponibles

Partager ce document

Partager ou intégrer le document

Options de partage

Avez-vous trouvé ce document utile ?

Ce contenu est-il inapproprié ?

Droits d'auteur :

Formats disponibles

BASIC Promotion Tips

Transféré par

Droits d'auteur :

Formats disponibles

Updated upto 27.11.

Know BASIC Bank

Name of MD (Full) : Mr. Kazi Faqurul Islam

Mr. Sheikh Abdul Hye Bacchu, Chairman, BASIC Bank Limited

Mr. Md. Anwarul Islam, FCMA,Director, BASIC Bank Limited &

Name of Company Secretary : Mr. Md. Shah Alam Bhuiyan

Name of 6 DMDs & 12 GMs:

Mr. Fazlus Sobhan

Why BASIC Bank is unique (Mandate).

Updated upto 27.11.2007

Companies Act 1991. The Bank started as a joint venture enterprise of

Financial Info of BASIC Bank

Authorized Capital : Tk 200.00 crore as on 31.12.06

As on December 31, 2006

Dividend for 2006

Updated upto 27.11.2007

Updated upto 27.11.2007

3. Difference between DD & PO

Updated upto 27.11.2007

Different Status of Accounts:

Different Acts related to GB

The defendant has done or said something to induce an expectation

Unconscionability by the defendant has been accepted as another element

Updated upto 27.11.2007

Updated upto 27.11.2007

World Bank and World Bank Group

Updated upto 27.11.2007

on less than $2 a day. IDAs resources help support country-led poverty

Updated upto 27.11.2007

commercial banks, the World Bank often lends at little or no interest to

Updated upto 27.11.2007

b) To promote the use of participants currencies in current transactions

Updated upto 27.11.2007

promotes and facilitates investment of public and private capital for

ASSOCIATION OF SOUTHEAST ASIAN NATIONS (ASEAN)

Updated upto 27.11.2007

overcome the divisions on the continent;

Updated upto 27.11.2007

Member Countries: Bangladesh, India, Myanmar, Sri Lanka, Thailand,

Secretary-General : Kamalesh Sharma

Updated upto 27.11.2007

of the organization as stated in the Havana Declaration of 1979 is to ensure

Secretary-General : HE Abdalla Salem El-Badri

Last summit : Third OPEC Summit, Riyadh, Saudi Arabia, 17 November

Updated upto 27.11.2007

Different type of Banking & Banking Products

Updated upto 27.11.2007

9. Retail Banking & Wholesale banking

Updated upto 27.11.2007

Recent Measures to liberalize and strengthen Financial Sectors

Interest rates were liberalized;

Updated upto 27.11.2007

Risk Weighted Capital Adequacy Ratio

Updated upto 27.11.2007

Updated upto 27.11.2007

certified by the external auditors of the bank. Such revaluation may be

3. Per Capita Income

4. Foreign Exchange Reserve

BOP and BOT Status

Updated upto 27.11.2007

Updated upto 27.11.2007

Updated upto 27.11.2007

Updated upto 27.11.2007

In corporate finance, it is the amount of cash flow available to meet