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General Banking

In: Business and Management

Submitted By rabiul88
Words 4313
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4.1 General Banking of Sonali Bank Limited:
Financial institution/ intermediary that mediates or stands between ultimate borrowers and ultimate lenders is knows as banking financial institution. Banks perform this function in two ways- taking deposits from various areas in different forms and lending that accumulated amount of money to the potential investors in other different forms.
General Banking is the starting point of all the banking operating. General Banking department aids in taking deposits and simultaneously provides some ancillaries services. It provides those customers who come frequently and those customers who come one time in banking for enjoying ancillary services. In some general banking activities, there is no relation between banker and customers who will take only one service form Bank. On the other hand, there are some customers with who bank are doing its business frequently. It is the department, which provides day-to-day services to the customers. Every day it receives deposits from the customers and meets their demand for cash by honoring cheques. It opens new accounts, demit funds, issue bank drafts and pay orders etc. since bank in confined to provide the service everyday general banking is also known as retail banking.
Sonali bank involves Various types of General banking activities such as deposit A/C, Inoperative A/C, Payment of Checks, Return of Checks, A/C Closing, A/C Transfer, Works of Cash Section, Subsidiary Register Day Book, Clean Cash, General Ledger, Abstract, Remittance (P/O, DD, MT, TT) Bills Department, SC, LSC, Clearing House, Sonali Bank General A/C etc.
4.1.1 General Banking Section of SBL:
General banking department is the busiest and important department of sonali bank, because funds are mobilized, cash transactions are made; clearing, remittance and accounting activities are done here. In SBL, the following departments are under general banking section: * Account Opening Section * Deposit Section * Cash Section * Remittance Section * Clearing Section * Personal Services * Utility Services * Locker Services * Payment
4.1.1.1 Accounts Opening Section:
I have gathered practical knowledge about opening of bank accounts. Various types of bank accounts are opened with the Sonali Bank, Dhaka. I have tried to know how a current deposit (CD) A/C, savings deposit (SD) A/C are opened.

Procedures of opening a CD A/C: * To open a current deposit A/C, an individual has to carry out the following procedures- * Obtain a prescribed application form from the bank * Submit the duly completed form with necessary papers to the concerned officer. * Face a brief interview * Put specimen signature in the signature card supplied by the bank. * Deposit of money * Get counter folio of the payment slip. * Once these formalities are carried out in appropriate manner, an account number is posted against the application. Then a check book is issued in favor of the applicant and he is considered as a valid account holder of the bank. * With the prescribed application form, the applicant should submit the following papers and information’s. * Nationality certificate from the appropriate authority. * Two copies of recent passport size photographs. * If the applicant is a service holder he should collect employee certificate from his employer and is to be submitted. * The applicant’s signature should be identified by an introducer who has a CD A/C with the respective branch.

Account Opening Form:

* In case of joint account, the applicant must furnish the following information and papers: * Name of the parties who will operate the account and sign the cheques. * At the event of death either or any of the account holders how the balance will be paid and to whom the securities (if any) will be delivered. The documentary requirements are almost the same as individual accounts. Account opening form and the special instructions must be signed by all the joint account holders to signify their consent. * If the client is a partnership company the company has to submit partnership deed to the bank. * If the applicant is a sole proprietorship business, the client has to submit trade license collected from the appropriate authority & seal of the institution. * If the client is a private or public limited company, the company has to submit Memorandum of Association (MOA), Article of Association (AOA) and other necessary documents. Name and specimen signature of the people who are authorized to open and operate the account and the source of their authority.

Procedures of Opening a Savings Deposit (SD) A/C:
The procedures of opening a SD A/C are almost same as the CD A/C. Some of the rules and regulations regarding to operate a SD A/C are mentioned below:- * Only savings account holder or a CD account holder of the respective branch can be introducer of the applicant of opening SD A/C. * Two copies of recent passport size photographs of the applicant should be attested by the introducer. In this case the introducer will mention his/her account number. * The applicant should deposit Tk. 100 is required to open this account. * If the client is private or public limited company, the people authorized to open and operate the account should put joint signature where it is necessary. Transfer of Accounts: When an account is transferred from one office to another, the account opening form etc. signed at the time of opening account and any forms or documents signed subsequently which are necessary for its proper conduct at the time of transfer, must be forwarded under cover of form, to the office to which the account is transferred together with the relative mail transfer, specimen signature card(s) and standing instruction if any, no exchange should be charged on such transfer. Attention is invited in this connection. As far as possible, the fullest, information regarding the character, means standing of the constituents and the way to the account has been conducted must be given to the receiving office. Dormant A/C: All Current accounts which have not been operated upon for six months should be marked in Red ink "CARE-DORMANT ACCOUNT -FIRST WITHDRAWAL TO BE REFERRED TO THE MANAGER". The ledger should be scrutinized for this purpose by a member of the supervising staff in March, June, September & December each year. All savings accounts which have not been operated upon for one year should also be marked in Red ink. In-operative A/C:
No withdrawal what so ever should be permitted on as in-operative account without the specific permission of the manager who will satisfy himself beyond doubt that the withdrawal in order. Annually on the 29lh June, the balances of all accounts which have lying in in-operative current account for ten years should be transferred to the unclaimed deposit A/C. The account opening forms, specimen signature cards, either or survivorship forms and all other documents relating to the in-operative accounts transferred to the unclaimed deposit account must be kept separately in the strong-room in the personal custody of the Manager.
Closing of an Account:
A banker can close the account of his customer or justifies the stoppage of the operation of the Account under following considerable circumstances:-- * Notice given by the customer himself. * Death of customer. * Customer's insanity and insolvency. * Order of the court.

4.1.1.2 Deposit Section: Deposit is the lifeblood of a bank. From the history and origin of the banking system we know that deposit collection is the main function of Sonali bank. Different types of deposit scheme offered by Sonali bank limited such as:
Current deposit:
It is purely a demand deposit account. There is no restriction on withdrawing money from this account. As many withdrawals are allowed the customers. It is suitable when funds are to be collected and money is to be paid away at frequent interval.
Target customer:
Current Account is most suitable for private individuals, traders, merchants, importers and exporters, mill and factory owners, limited company's etc.
Requirement:
For opening of a Current Account minimum deposit of TK. l000/- is required ", along with introductory reference.
Interest rate:
No interest is given the Current Account deposited money

Fixed deposit account:
It is popularly known as "Time Deposit". Because these deposits are not repayable on demand but they are withdraw able subject to a period of notice. The prospective fixed deposit holder is expected to fill up an application form, prescribed for the purpose, stating the amount and the period of deposit.
Duration Rate of Interest
From 1 month and above but less than 2 months 7.00%
From 2 months and above but less than 3 months 7.50%
From 3 months and above but less than 6 months 9.00%
From 6months and above but less than 1 year 9.50%
From 1 year and above but less than 2 years 10.00%
From 2 years and above but less than 3 years 10.50%

STD account:
Short Term Deposit Account (STDA) is same as Current Account. Here money is kept for a very short time. A notice is needed prior withdrawal of money. * 6.50% interest is given the actual period. * Notice period is varies from 7 days to 30 days.

Call Deposit Account: Mainly opened by organization calling tender in which (the suppliers, contractors etc.) deposit requisite amount of earnest money favoring the organization calling tenders. It is termed as Call Deposit since organization which opens these accounts may call withdrawal of the deposited account any time after the expiry of the tender period. No interest is allowed. Spacial Sonali Deposit Scheme:
Sonali Bank offer special deposit scheme for their customers and this scheme is available most of the branches.
Maturity Period: Maturity period of this scheme is Five (5) year.
Interest Rate: The rate of interest of this scheme is 8.50%.

Deposit Schemes

Sonali Deposit Scheme Education Deposit Scheme Medicare Deposit Scheme

Rural Deposit Scheme Marriage Savings Scheme Monthly Earning Scheme

Double Benefit Scheme School Banking Scheme Sonali Bank Daily Profit | | | | | |
Education Deposit Scheme:
Now Sonali Bank offer Education Deposit Scheme for their customer and this scheme is available most of the branches.
Maturity Period: Maturity period of this scheme is Ten (10) year.
Interest Rate: The rate of interest of this scheme is 8.00%.
Medicare Deposit Scheme
Sonali Bank offers Medicare Deposit Scheme for their customer and this scheme is available most of the branches.
Maturity Period: Maturity period of this scheme is Ten (10) year.
Interest Rate: The rate of interest of this scheme is 8.00%. Rural Deposit Scheme
The Rural Deposit Scheme is another scheme that is served by SBL, which’s maturity period is Seven year and the interest rate of this scheme is 9.00%.
Marriage Savings Scheme
The maturity period of Marriage Saving Scheme is Ten (10) year and its rate of interest is 8.50%.
Monthly Earning Scheme
The Monthly Earning Scheme’s maturity period is Three (3) year and Five (5) year and the rate of interest is 12.50% for the Three year scheme and 12.50% for the Five year scheme.
Double Benefit Scheme
The maturity period of Double Benefit Scheme is Six (6) year and its rate of interest is 12.25%.
School Banking Scheme
SBL offers School Banking Scheme for the child aged 07-17 or for all of the students studied in classes from 01 to 10. Its interest rate is 6%.

Special Deposit Pension Scheme:
SBL offers special deposit pension scheme for their customer and this deposit is classified into two types according to their maturity. 1. 5 years: Five year special deposit pension scheme is the first type of schemes.
Interest Rate: The interest rate of this scheme is 8.00%. 2. 10 years: Ten year special deposit pension scheme is the second type of scheme.
Interest Rate: The interest rate of this scheme is 10.00%.
DPS:
A Depositor cans open any Deposit Pension account for deposit of TK. 100/-, TK.200/-,TK300/-,TK400/-,Tk500/- in each month. And for this the depositor will have to deposit the specified amount of money by the 8th day of each month either in cash or in cheque. The depositor of this account can select more than one nominee for claiming the deposited money after his death. A Depositor can withdraw the total amount of deposit (Principal + Interest) at a time after a specific period of 10 or 20 years and for this he will be entitled to get TK.26344/- for 10 years & TK1,32,920/- for 20 years, after deposit of TK.100/- per month. The Interest rate of DPS is 15.00%. 4.1.1.3 Cash Section:
Cash section is an important part of any branch. Most of the activities are related to cash section. The function of cash section is receipt and payment cash.
Receipt of cash: Pay-in-slip for deposit and investment accounts, application form for PO/ DD/ TT and credit vouchers daily filled in are given to the receiving cashier with cash. At the time of receiving cash the cashier checks the deposit slip vouchers in respect of the following: * The total of account with its number. * No difference in amount in words & figures. * Date & signature of the depositor/ authorized officers. * Scroll & entry in cash receiving register. * Posting in ledger

Payment of cash:
Cash is paid against instrument like cheque, draft, PO and debit voucher. Procedure:
Issue counter
Computers
Passing officer
Payment counter Figure: Procedure of the payment of cash
In this section I gathered practical experience about how a cheque is honored and how cash is paid. The formalities involved in cheque honor and cash payment are stated below:- * Presenting the cheque: If any A/C holder would like to draw money from his A/C he at first has to issue a cheque supplied by the respective bank. Then he has to present the cheque to the concerned officer after duly signed. * Token Issue:
After receiving the cheque, the officer examines the followings- * Account number of customer * Issuing date of cheque * Amount of money mentioned in the cheque. * Amount position/balance position of the customer. * Whether the customer has signed behind the cheque or not. * After that, the officer enters the amount of money, token number, and account number in the daily transaction register. The register is usually called day book. Then, the token is issued & given to the customer. The number indicated in the token is written behind the cheque. * Verifying the cheque: At this stage, the cheque is sent to the principal officer (second officer) to verify it. To examine the validity of the cheque, the second officer compares the customers signatures given on the check with that on the signature card kept in his custody. * Honoring the cheque: If all the factors are satisfactory, the cheque is honored by the second officer. * Cheque cancellation: At this stage, the officer signs across the cheque to pay the money. * Drawing money: After the cheque is signed by the second officer, the customer returns the token to the cash payment section and draws his money.

Cheque Dishonored by Bank:
During the internship program, I was taught how a cheque is dishonored by bank. The statutory duty of a bank is to honor his customer’s check. But a bank can dishonor a cheque for various reasons. Some of the reasons for that a bank dishonors his customer’s cheque are stated below- * If the customer’s account position is not okay, that is if the amount of money mentioned in the cheque is greater than customer’s deposit. * If the cheque is torn. * If the cheque is post dated or a stolen checks. * If the customer’s signature given on the cheque is a forged one or does not tally with his specimen signature kept in bank custody. * If the cheque is not submitted to the customer within banking hour. * If the duration of issuing the cheque is more than 6 months Others. 4.1.1.4 Remittance Section:
The system of transmitting or sending money from one branch to another branch of the same bank or from one bank to another bank within a country or outside the country is known as remittance. It is one of the important functional areas of Sonali bank. For this service bank can earn handsome fees as commission from the dealings of money remittance. During my internship program I have gathered practical experience about how money is remitted from one branch to another branch of a bank or from one bank to another bank . Remittance can be of two types, i.e. A) Inland Remittance B) Foreign Remittance.

A) Inland Remittance:
When money is remitted within a country through proper banking channel, it is termed as inland remittance. Sonali Bank, Dhaka head office Branch deals a lot of inland remittance at every working day.

a. Modes of Inland Remittance:
1) Demand Draft (DD):
DD is the most widely used instrument of remitting fund. It is order to pay money drawn by one branch of a bank upon another branch of same bank for a particular amount of money that is payable to order and demand. * Procedures of remitting money through DD: * The procedures of remitting money through DD are stated briefly in below- * At first, the sender of money is advised to fill up a form and deposit the cash. The form is usually called DD application form or credit voucher. * The senders of money fills up the voucher appropriately and place it with cash before the officer at cash receipt section. * After receiving the voucher and cash, the officer counts the money and charges a fee as commission. Here it is mentionable that the commission for DD up to tk 10,000 is Tk. 10 for per 1000 and Tk. 1 for every thousand above Tk. 10,000. * After that, the voucher is sent to the concerned officer of remittance section. * Here the officer prepares a paper instrument called “Demand Draft (DD)” and enters the amount in the draft issue register. * Draft book and DD along with the register are then sent to the officer in charge for checking. If everything is Okayed, the officer signs the DD and voucher and keeps the register and counter foil of the DD. * After that the DD is issued to the sender of money. At this stage he can send the DD to the receiver branch by post or any other ways, * After issuing the DD and handing over it to the sender of money, the DD issuing branch sends an advice to the receiver branch about DD. * Finally, the DD receiver branch makes payment to the bearer of DD. i.e. payee after completing the necessary formalities.

2) Mail Transfer (MT): MT is another widely used instrument of remitting fund from one branch of a bank to another branch of the same bank. It is not used to remit fund from one bank to another. MT is nearly same as DD. * Procedures of Remitting money through MT:
The procedures of remitting money through MT are almost same as the procedures of remitting fund through DD. But there are some exceptions in this system”- * In case of MT, the sender of money is not provided with the MT paper but a receipt. The branch sends the MT paper under its own responsibility by mail to the MT receiving branch. * The commission for MT up to Tk. 10 for per 1000 and Tk 1 for every thousand above Tk 10,000. * The postal charge is Tk 10 for every MT issue and any amount of money. * The MT issuing branch has to send a secret message i.e. Test to the MT receiving branch. It is must for any amount of money. Here the amount of money, issuing date and other particulates are mentioned. * To maintain the secrecy of the message sent, the issuing branch codes the message by a particular number consisting of different digits. After receiving the message, the paying branch decodes it by using the predetermined techniques. This process is called test. If everything is Okayed, the paying branch makes payment to the payee.
3) Telegraphic Transfer (TT):
TT is the fastest means of remitting fund between two branches of the same bank. Fund can not be remitted from one bank to another bank through TT. * Procedures of remitting money through TT:
The primary formalities that have to be maintained to remit money through TT are same as DD and MT. * The commission for MT up to Tk. 10,000 is Tk 10 per TK 1000 and Tk 1 for every thousand above Tk 10,000. * Here a fee of Tk 20 is charged as telegraphic charge for every TT issue and for any amount of money. * In case of TT, no paper instrument is sent to the paying branch. Rather the TT issuing branch sends a TT advice through telephone, telegraph, Fax or telex to the paying branch. In sending message, the branch keeps necessary secrecy. * Side by side, the TT issuing branch sends an advice to the head office of the bank. * After receiving the message, the paying branch tests to decode the message. If everything is obeyed, then the branch makes payment to the payee. After that the branch sends an advice to the head office to reconcile the accounts of both branches. * In case of TT, test is must for every issue and for any amount of money.

B) Foreign Remittance:
The procedure to transfer money from one country to another country through bank or other govt. authorized agencies is called foreign remittance. The Sonali Bank Court Building Branch, Comilla does not provide foreign remittance facility to its customer directly.

4.1.1.5 Clearing Section: Before clearing the cheque we will briefly know about the Clearing House. A Clearing House is an institution of credit where reciprocal liabilities of the local bands are counter balanced against one another. Clearing Houses provide mechanism for clearing transactions among banks. In Bangladesh Bank (BB) Clearing House started about 1972. The Clearing House sits in BB members of clearing house maintain accounts with the Bangladesh Bank, through which the amount payable or receivable is usually settled. and cover only Dhaka City Corporation. Clearing is usually done twice a day; the first at 9.30 a.m. and the second at 2.30 p.m. At the time of first clearing, officer/clerk delivers cheques and claims. At the second, clearing members confirm each other payment or nonpayment. The

A clearing house ensures many advantages. In the absence of clearing house, each bank has to send its messenger to every other bank, present the cheque and drafts across the counter and collect amount of cash. Similarly, each bank has to pay cash every day for cheque presented across its counter by the other local banks. A clearing house prevents frequent and tedious walks by a bank’s employee for the collection of cheque and drafts, the payment of the instruments in cash and the consequent danger of loss in transit. It thus ensures convenience and economy. Only the differences of the mutual claims settled and hence the banks can carry lesser cash reserves.
In this section customers deposit their cheque to the bank with the deposit slip. Bank accepts the cheque and gives the following seal- * Instantly give cross seal and check the cheque carefully. * Give clearing seal with date ( House held Date) * Endorsement seal must be given on the back side of the cheque.
After giving the seal, this cheque must entry into the computer and prints out the cheque list. With the print out sheet all cheque are sent to the representative of the bank who go to the clearing house. Some banks presently started a new clearing house that is called the “Same Day Clearing.” The special features of same day clearing are- * The amount of cheque must be 5 (five) lacks or more. * It is effective within the area of one kilometer of Bangladesh bank. * The customer can get the amount within a day. After getting the cheque from the principal branch, the branch identifies the honored and dishonored cheque. For the honored cheque the branch make payment or credit party account. The dishonored cheques are returned to the party. 4.1.1.6 Personal Services:
Sonali Bank Limited provides Local & Foreign Remittance in quickest possible time. Foreign remittance is available in both T.C. & Taka draft. * Transfer of fund from one branch to another. * Payment order. * Call deposit issue for tender. * Transfer of fund on Standing Instruction Arrangement. * Collection of cheques through Clearing House/beyond Clearing House. * Issuance of Payment Order / Call Deposit. * Locker facilities for safe keeping of valuables. * Corporate Client Services with computerized system at selective Branches.
4.1.1.7 Utility Service:
Sonali Bank Limited offers multiple special services with its network of branches throughout the country in addition to its normal banking operations. * Gas bills. * Electricity bills. * Telephone bills. * Water/Sewerage bills. * Municipal holding Tax. * Passport fees, visa fees and Travel tax. * Customs & Excise duties. * Source tax and VAT. * Jakat fund. * Hajj deposit. * Land development tax. 4.1.1.8 Locker Service: Secured Locker Service is provided in some branches of Sonali Bank Limited. Customers may avail this service and secure their valuables. | | Locker size | Yearly Charge (Tk.) | Security Deposit (Tk.) | Small | 2,000.00 | 5,000.00 (refundable) | Medium | 2,500.00 | | Large | 3,000.00 | | | | * Additional 15% VAT applicable along with charges | | * Locker Service is available in the 54 branches of Sonali Bank Limited. |

4.1.1.9 Payment: * Pension of employees of Govt. and other Corporate Bodies. * Bangladesh Bank employee’s pension. * Army pension. * British pension. * Students’ stipend/ scholarship. * Old age allowances. * Widows, divorces and destitute woman allowances. * Freedom fighters’ allowances. * Govt. & Non-Govt. Teachers’ salary. * Food procurement bill on behalf of the Govt. * Rehabilitation allowances for acid survival for acid survival woman. * Material allowances for poor woman. * Disability allowances.

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