nccbl(bangladesh)

NCC BANK LIMITED PAGE NUMBER:--

NCC BANK LIMITED Jubilee Road Branch,Ctg Bank of your choice

1.1 Introduction:

Financial development is essential for economic growth and development, and weak

financial systems make countries defenseless to crises. A growing body of empirical

literature shows these relationships. This means that to enhance economic growth,

developing countries must take initiative to increase both the financial depth and diversity of

their financial sectors. Banking sector is one of the most important sectors for the economy

of a country. Sometimes it is called heart of the economy.

Banks are the leaders of all financial services industry, where the proper functioning of the

economy depends on the banking industries. Banks drive all the financial activities of certain

economy. Commercial banking industry is one of the most important financial intermediaries

in Bangladesh. It is playing great role to generate savings and it makes sure the proper

investment of this savings in different sectors of our economy. Commercial banks are

cooperating different types of business in various ways which is ensuring prosperity of

business. Prosperity of business means prosperity of the economy as a whole. By now, it has

been proved that literally bank is the heart of all commercial activities in Bangladesh.

The number of banks in all now stands at 49 in Bangladesh. Out of the 49 banks, four are

Nationalized Commercial Banks (NCBs), 28 local private commercial banks, 12 foreign

banks and the rest five are Development Financial Institutions (DFIs). History of banking

sector is quite recent; the development of banking sector is so great. The number of private

banks increasing rapidly and it becomes a profitable sector. The banks with modernized

banking facilities, termed as ‘third generation banks’ are providing improved services both to

the investor and to the customers. National Credit & Commerce Bank Limited is one of the

most renowned 3rd generation banks, which is really contributing to the financial system of

Bangladesh. National Credit & Commerce Bank Limited is one of the private commercial

banks (PCBs), incorporated in Bangladesh on 25th November 1985as a public limited

company under the Companies Act 1994, and governed by the Banking Companies Act

1991.

1


NCC BANK LIMITED Jubilee Road Branch,Ctg Bank of your choice 1.2Origin of the Report

The BBA program offered by Independent University, Bangladesh, Chittagong campus, is an

object oriented discipline that has to focus on the theoretical and practical aspects of the

learning outcome. Consequently, every student of the program is asked to get involved in

practical knowledge to experience the feel of the real professional responsibilities, which is

called internship program. As this is an obligatory part of the course curriculum I had had the

opportunity to complete my internship program at the NCC Bank Ltd. Jubilee Road Branch,

Chittagong, Bangladesh. This report, to a large extent, reflects on the experience I gained

during my internship stay at the Jubilee Road Branch of the NCC Bank Ltd.

1.3 Objectives:

The main objective of this study is to know the Overall Banking System of National Credit

and Commerce Bank Limited. The Specific objectives of the study are:

To explore the activities of Foreign Trade department of NCC Bank LTD.

To identify the problem encountered by the employees in different department of

NCC Bank LTD.

To determine the level of customer satisfaction about the Foreign Trade service of

NCC Bank LTD.

1.4 Methodology

Methodology comprises of all the activities that is required to conduct the study and generate

it into a report. In the following sections the methodology of the research have been

described on the basis of research design, sample design, data collection methods, fieldwork

and data analysis.

1.4.1 Research Design

The research design is descriptive in nature from the viewpoint of function because it is

based on customer satisfaction of Foreign Trade. From the viewpoint of nature of data, it is

2


NCC BANK LIMITED Jubilee Road Branch,Ctg Bank of your choice both a qualitative and a quantitative research. From the viewpoint of research place, it is both

a desk and field research and finally from the viewpoint of objective, it is an applied research.

1.4.2 Sampling Design

The target population for the research was customers of NCCBL Chittagong. In particular,

the researcher has purposively or conveniently chosen all those customers who have been

involved in acquiring service from NCCBL Foreign Trade department. To select the sample

respondents, a list of all regular customers who had experience with Foreign Exchange

facility of NCCBL has been obtained and this is the sampling frame. Each customer who has

taken service from NCCBL’s Foreign Trade department is a sampling unit. The list was

carefully studied to draw sample of respondents having different professions and education

levels. The sampling technique therefore used for the research was judgmental or non-

probability sampling and the sample size were 10.

1.4.3 Methods of Data Collection

The research is based on a combination of both primary and secondary data. Primary data:

Primary data was collected by using survey method with the aid of structured questionnaire

and also through informal, relevant and in-depth discussions with key personnel of direct

sales and customer service department in order to probe in-depth into the research topic. This

means, based on the classification of survey, from the viewpoint of questionnaire, it was a

survey through structured questionnaire and from the viewpoint of communication, and it

was a survey through human interactive media.

Secondary data: Various publications, books, product brochures, websites, and product

books of NCCBL connected with this research were used to collect the secondary data.

Finally, some data have also been gathered by observation during the working hours in the

bank.

1.4.4 Method of Data Analysis

For the quantitative section of the report, percentiles were used as multiple series of data

were compared. Means were used to find the average score of the internally scaled questions.

3


NCC BANK LIMITED Jubilee Road Branch,Ctg Bank of your choice The data collected are presented in cross-tabulation. Moreover, bar charts are used for

graphical representation of data.

Method of analyzing the Questionnaire

The questionnaire was prepared using only close-ended questions. The close-ended questions

were presented in a five point Likert Scale. In order to make the questionnaire effective and

to ensure better response to the replies received, attention was given to the question sequence

in preparing the questionnaire. The questionnaire designed to measure customer satisfaction

for Foreign Trade department. There are five options or answers for each question asked and

these are Strongly Agree, Agree, Neutral, Disagree and Strongly Disagree. Each question has

a highest score of 5 and lowest of 1. The response “Strongly Agree” is assigned a score of 5,

“Agree” is assigned a score of 4, “Neutral” is assigned a score worth 3, “Disagree” is

assigned a score of 2 and “Strongly Disagree” is assigned a score worth 1. The total score of

each question is calculated by adding up different points given by different respondents for

each question and then the mean score is calculated. This was done by dividing total score of

each question by the total number of respondents on whom the survey was conducted.

1.5 Limitations of the study

During the internship program, numerous problems have been encountered for the

accomplishment of the study. This problem may be termed as limitations of the study,

enumerated as follows:

Unavailability of sufficient written documents as required for making a

comprehensive study.

Inadequate time to make an in-depth and full-fledged report on foreign exchange

operation of NCCBL.

Lade of depth of knowledge and analytical ability for writing such report.

Last but not the least, both unwillingness of key personnel to provide confidential

information adversely caught up necessary data collection.

It seems to me that had they been willing to provide necessary up to date information to the

internee, a full fledged and comprehensive report could have been made possible.

4



2.1 Literature Review:

For the purpose of accomplishing the research, the researcher has to consult research articles

relevant to the research. Since financing and handling trading are the major functions of

banks and the research is related to trade service, the researcher has consulted several

articles, which are related to the trading policy.

The First article that the researcher has reviewed is, written by John H. Makin. The Title of

the book is: International Finance and Financial Policy. Contributors: Hans R. Stoll- editor.

Publisher: Quorum Books. Place of Publication: New York. Publication Year: 1990. This

research article is on “Exchange Rates and International Imbalances”

It emphasized on both large exchange rate movements and large persistent international

imbalances during 1980. The coexistence of these events has produced dissatisfaction and

discomfort in both academic and policy-making circles, though concern among the latter has

been greater. Some have suggested that the persistence of imbalances is due to a changed

world whereby exchange rates no longer "work" to eliminate imbalances. Others have

claimed that the persistence of large imbalances even after large exchange rate changes have

occurred is de facto evidence of unfair trade practices. It is undoubtedly true that a new, more

aggressive U.S. trade bill would not have emerged in 1988 without the steady growth of the

U.S. trade deficit from 1981 until 1987.

Few, though not all, have seemed willing to consider the possibility that the unusual behavior

of exchange rates and external imbalances is a by-product of unusual exogenous events.

More specifically, there has been relatively little attention paid to systematic explorations of

the relationship be teen observable changes in real and nominal exchange rates, net external

flows of goods and capital, and events like unusually divergent fiscal policies, changes in

regulations affecting capital flows, wealth redistributions among industrial countries, and the

effects of pegging the dollar at an overvalued level such as occurred in mid-1987. When

these factors are considered, the co movements of exchange rates and external imbalances

appear as natural counterparts of identifiable exogenous events. As such they are neither

5


NCC BANK LIMITED Jubilee Road Branch,Ctg Bank of your choice unusual nor indicative of a special Unresponsiveness of behavior to exchange rates or rising

protectionism and therefore not sufficient reasons to contemplate "Managed trade,"

The Second research article the research has consulted is “Trade deficit a 'big shock' to

market” written on Sep 4, 2008 1:24pm AEST taken from ABC Online (Australia). Some

renowned Economists have undertaken it

The economists had expected a significant surplus. But Australia's trade balance has gone

from surplus to deficit in July, largely due to an increase in fuel imports. Australia's trade

balance has gone from surplus to deficit in July, largely due to an increase in fuel imports.

Figures from the Bureau of Statistics show a seasonally adjusted trade deficit of $717

million. Economists expected a surplus of about $100 million.

The senior strategist from TD Securities Joshua Williamson says the figure is disappointing.

Since it brings a big change.” The market was looking for a small surplus of $50 million in

the month, so the fact that we arrived at a deficit of over $700 million is a big shock to the

market, as was the composition of the data."

Exports fell 1 per cent to $22.9 billion, led by a decline in coal exports which dropped nine

per cent. Imports rose 4 per cent to $23.6 billion It focuses on measuring imbalance of import

and export to identify the actual reasons of such happening. The research has been

undertaken from Bureau of Statistics as the main criterion for the analysis.

As Literature review means going through some research literature, before start a research to

get a preliminary idea about the topic. In this regard it helped me a lot to understand my topic

in a more comprehensible way.

I have tried my level best to put here two main strategically important articles on the

elements of trade service.

6



Overview of NCCBL in Bangladesh

3.1 Brief on National Credit Commerce bank Limited:

National Credit & Commerce bank Limited is one of the leading and fastest growing bank

among all the Private Commercial Banks in Bangladesh. It renders various banking services

to its customers. With an outstanding performance, the company is heading towards the new

millennium through focusing on leadership, service innovations and all other expert is

required for earning excellence and continued growth. The bank is offering services keeping

harmony with the changing demands of the customers and is getting customer satisfaction by

assuring service quality and by delivery better service value comparing with its competitors.

It provides different types of commercial banking services to the customers of all strata in the

society with in the stipulations laid down in the Bank Companies Act 1991, Rules and

Regulations framed by the Bangladesh Bank from time to time.

“The institution started its function back in1885 as an investment company in the name &

style of National Credit limited. Authorized capital of the company was Tk. 30 crore and

paid up capital of the company was Tk. 5 crore only at that time. NCL performed well for

near about 7 years. The core objective of the company was to play catalyst role in the capital

market of the country by way of participating in security trading, underwriting, etc. However,

in 1992 in the backdrop of BCCI and BCI, another investment company, NCL faced a severe

setback in respect of business. With active initiative taken by the members of the board and

the Management team, the company could overcome the problem and get it converted into a

full-fledged commercial bank on 17.05. 1993 after obtaining license from Bangladesh bank.

The Authorized Capital of the bank was fixed at Tk. 75.00 crore and Paid-up Capital at Tk.

39.00 crore of which 9.50 crore was subscribed by the Sponsors at that time. Present paid-up

capital of the bank stands at tk. 97.50 crore. At present the bank is operating through 41

branches. Professional teams of bankers are running the day to day operation of the Bank”.

(Statement of books of NCCBL, 1993)

7


NCC BANK LIMITED Jubilee Road Branch,Ctg Bank of your choice 3.2 Objective of NCC Bank Limited:

The objectives of NCCBL are shown given below: -

Provide a competitive return on assets and equity.

Growth of market share through expansion of branches both at home and abroad.

Improvement of portfolio management through higher liquidity debt ratios.

Maximization of profit envisaged in higher spread.

Human Resource development of all staffs and officers through training.

Introduction of new technology for customer use.

Introduction of new technology for internal use.

3.3 Mission & Vision of NCC Bank Limited:

Mission is: -

“ To serve the nation through our excellent customer service”

Vision is: -

“To become the best Bank of the land in respect of service, profitability &

strength”

8


NCC BANK LIMITED Jubilee Road Branch,Ctg Bank of your choice 3.4 ORGANIZATIONAL STRUCTURE OF THE NCC BANK LIMITED

Organogram or organizational form indicates the structure of an organization. All Banks

generally follow the hierarchical forms as like National Credit & commerce Bank Limited.

Such as:

Owner’s Level:

Executive’s Level:

Officer Level:

9

Senior principal officer

Chairman

Vice Chairman

Director(17 No.’s)

Managing director

Deputy managing director

Senior executive vice president

Executive vice president Senior vice president

Vice president

Senior assistant vice president

Assistant vice president



3.5 Performance of NCC Bank Limited:

National Credit and Commerce Bank has diversified activities in retail banking, corporate

banking and international trade. From the very beginning it has obtained a solid foundation in

respect of general banking & Loans and Advance. Its total deposits, Loans and Advance of

the of 2005 were Tk. 21478.22 & 20533.13 million respectively.

Performance of the Bank at a Glance

Table#3 .1 Figure (in Million)

Particulars Year 2006 Year 2007Authorised Capital 2500 2500

Paid up Capital 1201.79 1352.01Reserve fund and other

Reserve1215.58 1995.36

Equity fund 2417.37 3326.52Deposits 28147.34 34901.77

Loans and Advances 24678.36 32687.75Investment 3552.08 6266.62

Import Business 17646.80 28779.21Export Business 8557.00 9577.92

Operating Income 3913.19 5269.03Operating Expenses 2645.62 3488.78

Operating Profit 1267.57 1780.25Profit before Tax 1056.51 1356.32Profit after Tax 479.22 677.18Retained Profit 7.83 8.13

10

Assistant officer

Senior officer

Officer

Principal officer



Total Assets (excluding contra)

32615.01 42522.85

Fixed Assets 353.71 522.00Number of Branches 48 53

Number of Employees 1118 1230Earning per Share 35.44 50.09

Dividend : Cash (%) 10 -Bonus (%) 12.50 30.00

Return on Equity (ROE) (%) 19.82 20.23Return on Assets (ROA) (%) 1.47 1.59

Capital Adequacy Ratio 9.78 10.61Non performing Loans as %

of Total Advances4.95 4.17

Volum of Non-performing Loans

1212.26 1353.31

Amount of provision against Classified Loans

523.58 644.11

Amount of provision against Unclassified Loans

282.09 388.78

Advance/Deposit Ratio (%) 87.68% 93.66%

(Source: Annual Report 2006,NCCBL)

3.6 Major Functions of NCC Bank Limited:National Credit and Commerce Bank has diversified activities in retail banking, corporate

banking and international trade. From the very beginning it has obtained a solid foundation in

respect of general banking & Loans and Advance. NCCBL is a service oriented financial

institution. The main objective of NCCBL is to satisfy the customer by serving various

facilities they as possible. The Bank offers different types of quality services to its client.

NCCBL performs the following functions, which are given below:

1. Deposit Services:- The first Primary function of the Bank is to accept deposits of

money from the customers or saver group. NCCBL offers all types of deposit services to its

customer available in today’s Bank are Bangladesh. The interest rate is different for the

different types of deposits. NCCBL severs following deposit services.

Current Deposit.

Saving Deposit.

Fixed Deposit.

Short term Deposit. (STD)

Special Saving Scheme. (SSS)

Special Deposit Scheme. (SDS)

Nature of the Account: -

11



Individual

Partnership

Proprietorship

Limited Company (PVT/PUB)

Club/ Society/Association

Trust/ Executors/ N.G.O

2. Credit Services:- Banking business essentially involves lending. In fact deposits are

accepted for lending or investment. It interests rate ranges from 10% to 15%. NCCBL

provides loans and advances in the following sectors. Advance has two categories: a) General

advance & b) Foreign advance.

a) General advance: -

Personal Loan.

Staff loan Car

House building (Res.)

Small business scheme

House Repairing & Renovation

SOD General

Cash Credit

b) Foreign advance: -

Packing credit

Security Over Draft (SOD) against FDR

Loan against Trust Receipt (L.T.R)

Foreign Dollar Bill Purchase (FDBP)-(Docs)

Payment Against Document (PAD)

FDBP (clean)

3. Customer Services:-NCCBL is always busy in serving to the customer in the best way.

One of their greatest assets is the trust of its customers. NCCBL has the following

arrangement of remittance with in the country-

12



Informing information provided by the bank in every desk.

Account opening.

On line Banking Facilities.

Pay order issue.

Telephonic Transfer (TT).

Demand Draft (DD) issues.

Account Transfer Facilities.

Solvency Certificate issuing.

Locker Service.

Credit Card Facilities.

Letter of Credit (L/C).

Traveler cheaque issue.

Capital Formation.

3.7 NCCBL, Jubilee Road Branch, Chittagong: (My place of assignment)

Brief on Jubilee Road Branch, Chittagong : -

National Credit & Commerce bank Ltd. Is a progressive commercial bank is private sector in

Bangladesh. It creates new opportunities for it clients. It gives customize services and

maintains harmonious banker-client relationship. It contributes towards formation f national

capital, growth of saving and investment in trade, commerce, and industrial sector. This

institution started its function back on 18th November 1985, as an investment company in

name and style of National Credit Ltd (NCL). As a branch of NCCBL, Jubilee Road Branch,

Chittagong made its journey with a modest beginning in 1986 and started its function as an

investment company.

National Credit & Commerce Bank Limited emerged as full-fledged commercial bank in the

country on 17th May 1993 after obtaining license from Bangladesh bank. From that time, a

branch of NCCBL, Jubilee Road Branch, Chittagong carries out their banking activities. At

that time their deposit was Tk. 4 crore and data present time the deposit position of branch is

Tk. 64.05 crore.

13


NCC BANK LIMITED Jubilee Road Branch,Ctg Bank of your choice Despite stiff competition among bank operating in Bangladesh, both foreign and local,

Jubilee road branch has achieved satisfactory progress in all areas of its operation and earned

an impressive operating profit and shown a continuous growth in Advance, deposits and

foreign exchange business.

3.8 Organization Structure of Jubilee Road Branch

3.9 Performance of NCCBL, jubilee road branch, Chittagong:

1. Growth in Deposit

Chart# 3.1 Figure (in million)

14

Assistant Vice President

Vice President (Manager)

Senior Officer

Principal Officer

Officer

Probationary Officer

Junior Officer

Assistant Officer



(Source: Statement of Performance as of NCCBL, jubilee road branch, ctg)(Source: Statement of Performance as of NCCBL, jubilee road branch, ctg)

2. Growth in Loans and Advance



3. Growth in Profit


15




4. Total Foreign Exchange Business Performance



Finding & Analysis

Section 1:Service of Foreign Trade Department

4.1 Introduction:

16


NCC BANK LIMITED Jubilee Road Branch,Ctg Bank of your choice Foreign exchange is the mechanism by which the currencies of one country get converted

into the currency of another country and pay an important role in international trade. Foreign

exchange is also known as cross border trading. Foreign exchange occurs on two ways

Import

Export

International trade demands a flow of good from seller to buyer and of payment from buyer

to seller. And this is a flow of goods and payments are done through letter of credit.

4.2 Foreign Exchange Activities:

There are three kinds of activities in Foreign Exchange. They are as follows:

Import

Opening of letter of credit

Advance bills

Bills for collection

Import loan and guaranties

Export

Pre-shipment advance

Purchase of foreign bills

Negotiating of foreign bills

Export guaranties

Advising/ Confirming letter of credit

Advance against bills for collection

Remittance

Insurance of DD, MT, TT etc

Payment of DD, MT, TT etc

Insurance and enhancement of traveler’s cheques

Sale and enhancement of foreign currency notes

Maintains of non-resident accounts

17


NCC BANK LIMITED Jubilee Road Branch,Ctg Bank of your choice 4.3 Import Mechanism:

Import is the flow of goods and services purchased by economic agents located in one

country from economic agents located in another.

Import of goods into Bangladesh is regulated by the ministry of commerce in terms of the

Import & Export (controls) Acts, 1950; with import policy orders issued biannually, & public

notices issued from time to by the office of the chief controller import & Export (CCI & E).

In terms of the importers, exporters & indentures (Registration) order, 1981 on person can

import goods into Bangladesh unless he is registered with the CCI & E. So, every importer

needs to collect import Registration Certificate (IRC) from the officer of CCI & E. On the

next step the importer needs to obtain Letter of Credit Authorization (LCA) from Bangladesh

Bank. Having both IRC & LCA. The importer applies to the bank for opening L/C then the

next procedure for import starts.

4.4 Classification Of Importer:

Personal Need Based Importer: If an importer intends to import goods from abroad to

meet his/her personal needs, the importer is called a personal needy importer.

Commercial Importer: If an importer imports goods for commercial purpose is called

commercial importer.

Industrial Importer: If an importer imports goods for industrial purpose is called

industrial importer.

Governmental Importer: Import by Ministers, Govt. department and other public

sector agencies.

4.5 Letter Of Credit (L/C):

The letter of credit is a letter addressed to seller, written and signed by Bank acting on behalf

of the buyer. In the letter , the Bank promises it will honor drafts drawn on itself if the seller

conforms to the specific conditions set forth in the L/C. Through an L/C, the Bank substitutes

its own commitment to pay for that of its customer. The letter of credit, therefore, becomes a

financial contract between the issuing bank and a designated beneficiary that is separate from

the commercial transaction. It is an undertaking of the issuing Bank to the beneficiary to

make payment or to accept bill of exchange.

18



4.6 Parties Involve With L/C:

Importer /Buyer/Opener/Applicant

Applicant is the person who request/instructs the opening bank to open a L/C. He is also

know as importer /buyer /consignee.

Opening /Issuing Bank

Opening /issuing Bank is the bank which opens/issues a L/C is on behalf of the importer. It is

also called the importers/ buyers bank.

Exporter /Seller /Beneficiary

Exporter /seller/Beneficiary is the party in whose favor the L/C is established.

Advising /Notifying Bank

Advising notifying Bank is the bank through which the L/C is advised to the exporter. It is a

bank situated usually in the exporting country and it may be a branch of the opening bank or

a correspondent bank. It may also assume the role of confirming and /or negotiating bank

depending upon the conditions of the credit.

Confirming Bank

Confirming bank is a bank, which adds its confirmation to the credit, and it is done at the

request of the issuing bank .The confirming bank may or may not be the advising bank

Negotiating Bank

Negotiating bank is the bank, which negotiates the bill and pays the amount to the

beneficiary. It has to carefully scrutinize the documentary credit before negotiation in order

to see whether the documents apparently are in order or not. The advising bank and the

negotiating bank may not be one and the same. Sometimes it can also be the confirming

bank.

Paying /Reimbursing Bank

19


NCC BANK LIMITED Jubilee Road Branch,Ctg Bank of your choice Paying /Accepting Bank is the bank on whom the bill will be drawn (as per condition of the

credit). It is nominated is the credit to make payments against stipulated documents

complying with the terms of the credit. It may or may not be the issuing bank.

4.7 Types Document Credits:

Revocable credit

Irrevocable

4.7.1 Revocable Credits

A revocable credit is a credit, which can be amended or revoked by the issuing bank at any

time without prior notice to the seller /beneficiary.

4.7.2 Irrevocable Credits

An irrevocable credit constitutes a definite of the issuing bank provided that the stipulated

document are presented and the terms and condition are compiled with for payment,

acceptance and payments of drafts or negotiation .An irrevocable credit can neither be

amended nor cancelled without the agreement of the issuing /confirming bank and the

beneficiary.

4.8 Special Types Of Documentary Credit:

A) Revolving credit

B) Transferable credit

C) Bank to back letter of credit

D) Red clause credits

E) Green clause credit

4.8.1 Revolving Credit

The revolving is one of that provides for restoring the credit to the original amount after it

has been utilized .How many times it will be taking place must be specially mentioned in the

credit. The revolving credit may be either cumulative or non cumulative

4.8.2 Transferable Credit

20


NCC BANK LIMITED Jubilee Road Branch,Ctg Bank of your choice A transferable credit is one that can be transferred by the original beneficiary unless

otherwise specified. Fractions of a transferable credit can be transferred separately, provided

practical shipments are not prohibited. The transferable credit can be transferred by curtailing

or reducing amount, unit price, last date of shipment an presentation of documents and expiry

date.

4.8.3 Bank to back Letter of Credit

The back-to-back letter of Credit is a new credit opened on the basis of original credit in

favor of another beneficiary. Under the bank to back concept, the seller as the beneficiary of

the first credit offers it ‘security’ to the bank for the issuance of the second credit. The

beneficiary of the back-to-back letter of credit may be located inside or outside the original

beneficiary’s country.

4.8.4 Red clause Credits

A Red Clause Credit with a special condition printed/type in a red, which authorizes the

Confirming Bank or Negotiating Bank to make advance to the Beneficiary before

presentation of the documents. Under the above credit, the opening bank is liable for the pre-

shipment advances made by the negotiating bank, in case the beneficiary fails to repay or

deliver the documents for negotiating.

4.8.5 Green Clause Credit

A green clause credit is a credit where the “Green Clause” printed /typed in green is an

extension of the ‘red clause’ and such clause authorizes the negotiating bank to grant advance

to the beneficiary for storage facilities at the port in addition to the earlier stated pre-

shipment advances.

4.9 L/C Application Form For Import:

The L/C application from contains the following information regarding the importer / buyer,

exporter/seller/ beneficiary and the goods:

The full name and address of the beneficiary;

21



The amount of credit;

The type of credit:

Revocable

Irrevocable

Irrevocable with the added conformation of the advising bank

Whether the credit is to be available by payment, acceptance or negotiation,

The party on whom drafts (if any) are to be drawn:

A brief description of goods, including details of quantity and unit price,

Whether freight is to be prepaid or not;

Details of documents required;

The place of shipment of dispatch or taking in charge and the destination,

Whether the transport of the goods from one vessel to another or from one mode of

transport to another,

Whether partial shipments are prohibited;

The latest date of shipments, dispatch ar taking in charge;

The prepaid of time after the date of issuance of the bill of lading or other shipping

documents with in which they must be presented for payment, acceptance or negotiation;

The expiry date of the credit;

Whether the credit is transferable one

How the credit is to be advised (mail/cable/ telex).

4.10 Documents Required For Opening L/C:

For opening L/C, the client must have a CD A/C maintained in local office. Beside this, the

following documents are required to be submitted along with LCA form to the Issuing Bank

for opening of L/C:

L/C application form duly signed by the importer;

Indents for goods issued by inventors or a Pro-forma invoice obtained from the

foreign supplier duly accepted by importer;

22



Insurance cover note with money receipt;

Approach letter in letterhead of the importer;-

(e) IMP form duly signed by the importer;

(f) Valid membership certificate from registered local Chamber of Commerce and Industry or

any Trade Association established on all Bangladesh basis representing any special trade /

business;

(g) Proof of payment of renewal fees for the Importer Registration Certificate (IRC) or the

concerned financial year;

(h) A declaration in triplicate that the importer has paid income tax or submitted income tax

return for the preceding year;

(i) Proof of having TIN in all cases of imports, excepting personal use;

(j) Proof having VAT registration certificate.

4.11 Pre-Shipment Inspection (P.S.I):

As per circular or N.B.R (National Board of Revenue) Pre- Inspection documents will have

to be issued whenever necessary. Theses P.S.I. authorities have been geographically

distributed to three different authorizing companies by G.O.B. Three blocks have been crated

worldwide and the distribution of these blocks is as follows:

Block A: Intertek Testing Services (I.T.S.)

Block B: BSI Inspectorate Ltd.

Block C: Bureau Veritas (BIVAC)

They must issue a C.R.F. (Clean Report of Finding) ensuring the accurate quality and

quantity of the imported goods. But Govt. exempted these inspections for some items like

perishable goods, capital machinery, and food grain.

4.12 Advising an L/C:

Advising through a bank is a proof of apparent authenticity of the credit to the seller. The

process of advising a credit consists of forwarding the original credit to the beneficiary to

whom it is addressed. Before forwarding the advising bank has to verify the signature of the

officer of the opening bank and ensure that the terms and conditions of the credit are not in

23


NCC BANK LIMITED Jubilee Road Branch,Ctg Bank of your choice violation of the existing exchange control regulation and other regulation relating to export.

In such act of advising the advising bank does not undertake any liability.

The issuing bank like NCCBL sends the L/C to the advising bank by any of the three

following medium:

Mail

SWIFT

Telex

4.13 Arranged Format To keep The L/C documents:

The arranged format to keep the L/C documents from up to bottom according to the

following order:

I. L/C application.

II. Imported Merchandise Performance (IMP) form.

III. L/C authorization form (LCAF).

IV. Insurance Policy.

V. Minimum three copies of pro-forma invoice/ indent.

VI. L/C documents.

VII. Pre-shipment inspection copy.

VIII. Amendment (if there is any).

4.14 Amendment:

Parties involved in L/C, particularly the importer and the exporter cannot always satisfy the

terms and condition in full as expected due to some obvious and genuine reasons. In such a

situation, the credit should be amended.

In case of revocable credit, it can be amended and canceled by the issuing bank at any

moment and without prior notice to the beneficiary. But in case of irrevocable credit, it can

neither be amended or nor canceled without the agreement of the issuing bank, the

confirming bank and the beneficiary.

24


NCC BANK LIMITED Jubilee Road Branch,Ctg Bank of your choice 4.15 Documents Required For Lodgment:

After getting the L/C on hand, the supplier prepare the following documents to validate the

export:

4.15.1 Commercial Invoice:

A commercial invoice contains an authoritative description of the merchandise shipped

including full details. It requires eight copies, which contains the following:

Name and address of exporter.

Name and address of importer.

Full details about the quality, quantity and grades of the merchandise shipped.

Price per unit and total value.

Number of packages.

Any distinguishing external marks.

Payment terms.

Other expenses such as transportation and insurance charges.

Any fees collectible from the importer.

The name of vessel.

The ports of departure and destination.

Country of origin.

H.S. code.

Validity.

Any required export and import permit numbers or terms and conditions.

4.15.2 Packing List:

It is required to certify that the packing materials used and the packing quality is of export

standard and it is prepared as per terms and conditions of L/C. Normally it requires in

triplicate.

4.15.3 Certificate of Origin:

25


NCC BANK LIMITED Jubilee Road Branch,Ctg Bank of your choice It is a certificate issued by the supplier’s countries chamber of commerce ensuring the

importer that goods for supply is of that specific country. It also requires in triplicate.

4.15.4 Bill Of Landing (B/L):

Of the shipping documents the bill of landing is the most important. It is contract between the

carrier and shipper in which the former agrees to carry the goods from port of shipment to

port of destination. It is the shipper’s receipt for the goods. The negotiable B/L its most form

is a document that establishes control over the goods.

4.15.5 Bill Of Exchange (B/E):

Bill of exchange contains the name of the drawer; the total USD amount and L/C no. Two

types of B/E are served:

I. First Original (Second unpaid)

II. Second Original (First unpaid)

4.16 Presentation of Documents:

The seller being satisfied with the terms and conditions of the credit proceed to dispatch the

required goods to the buyer and after that, have to present the documents evidencing

dispatching of goods to the negotiation bank on or before the stipulated expiry date of the

credit. After receiving al the documents, the negotiating bank then checks the documents

against the credit. If the documents are found in order, the bank will pay accept or negotiate

to the issuing bank.

4.17 Settlement:

Settlement means fulfilling the commitment of the issuing bank in regard to effecting

payment subject to satisfying the credit terms fully. This settlement may be done under three

separate arrangements as stipulated in the credit.

4.17.1 Settlement by Payment:

26


NCC BANK LIMITED Jubilee Road Branch,Ctg Bank of your choice Here the seller presents the documents to the paying and the bank then examine the

documents. if satisfied the paying bank makes payment to the beneficiary and in case this

bank other than the issuing bank is satisfied with the requirements, is obtained by the paying

bank from the issuing bank.

4.17.2 Settlement by Acceptance:

Under this arrangement, the seller submits the documents evidencing the shipment to the

accepting bank accompanied by a draft drawn on the bank at the specific tenor. After being

satisfied with the documents, the bank accepts the documents and the draft and if it is a bank

other the issuing bank, then sends the documents to the issuing bank stating that it has

accepted the draft and at maturity. The imbursement is obtained in the pre-agreed manner.

4.17.3 Settlement by Negotiation:

This settlement procedures starts with the submission of documents by the seller to the

negotiating bank accompanied by a draft drawn on the buyer or any other drawee, at sight or

at the tenor, as specified in the credit. After scrutinizing that the documents meet the credit

requirements, the bank may negotiate the draft. This bank if other than the issuing bank, then

sends the documents and the draft to the issuing bank. As usual, reimbursement will be

obtained in the pre-agreed manner.

4.18 Accounting Treatment of Import in NCCBL:

L/C Opening Vouchers:

Contra Voucher

Customer’s Liability ----------------------------Dr.

Banker’s Liability -------------------------------Cr.

And

Importer’s A/C -----------------------------------Dr.

Sundry Deposit Margin on L/C ----------------Cr.

Commission -------------------------------------- Cr.

27


NCC BANK LIMITED Jubilee Road Branch,Ctg Bank of your choice Vat (15% Vat on L/C commission) ------------Cr.

Stamp In Hand ------------------------------------Cr.

Bill Payable ---------------------------------------Cr.

Liability ------------------------------------------- Cr.

Miscellaneous Earnings -------------------------Cr.

Amendment Voucher:

Importer’s A/C -----------------------------------Dr.

Sundry Deposit Margin -------------------------Cr.

Commission --------------------------------------Cr.

Vat -------------------------------------------------Cr.

Liability -------------------------------------------Cr.

Lodgment Voucher:

Contra Voucher

Banker’s Liability -------------------------------Dr

Customer’s Liability ----------------------------Cr.

And

PAD A/C -----------------------------------------Dr.

IBTA A/C ----------------------------------------Cr.

Sundry Deposit Margin ------------------------Dr.

PAD A/C -----------------------------------------Cr.

Retirement Voucher:

If the party has LTR credit facilities with that bank, then-

LTR A/C ---------------------------Dr.

PAD A/C ---------------------------Cr.

When the party paid the L/C amount in cash, then-

PAD A/C ----------------------------Dr.

Income A/C -------------------------Cr.

28



Cancellation Related Voucher:

Contra Voucher

Banker’s Liability -------------------------------Dr

Customer’s Liability ----------------------------Cr.

Sundry Deposit Margin ------------------------Dr.

Importer’s A/C ----------------------------------Cr.

4.19 Submission of Statement:

Now the L/C issuing bank submits monthly returns to Bangladesh Bank regional office and

the respective head office of that branch bank. Monthly return includes:

I. IMF & Schedule

II. LCAF

III. Pro-forma Invoice/ indent

IV. Commercial Invoice

4.20 Matching of Bill of Entry (B/E):

Within four months the importer must submit B/E evidencing the release of goods from port.

After receiving the B/E, the issuing bank matches this with the shipping documents.

Section 2:

4.21 Problem Associated with NCCBL

The problem as I have observed during my internship at NCCBL, Jubilee road branch are as

follows:

The volume of operational activities of this department is very high, but number of

employees is adequate. As for example in one desk an officer in-charged for A/C

opening, DD, TT, PO operating as well as cheque receiving. Though he is skilled

enough to do those job but very often it creates bothering situation for customer

29



The computer removes the token system. It is very much appreciable, but the

computer operator or programmer should be conversant with the system for quick and

better quality services to the customers.

Account opening procedures are very much relaxed. The officer or introducer of the

account holder should follow rules and formalities for opening the account.

In case of account opening, Letter of thanks is not sent to the introducer though it is a

formality to be maintained by the bank. I think, if a letter of thanks is sent to an

introducer, he is encouraged to send more depositors to the Bank that will be helpful

for the bank to increase its deposits.

In busy day, it sometimes impossible for the officer to check every signature on

cheque with specimen signature card as to ensure prompt service. The officer in

charge some times has to honor some cheques only depending upon his familiarity

with the customer’s signature, which is very risky.

The costly Time and Saving Deposit occupy maximum portion of total deposit.

Therefore, cost of fund is increased which decreased its profit level.

The bank starts online computer facility recently, but most of the employees are

unable to use computer perfectly. This could be one of the best services for the

customer but the customers don’t get the service from the Bank.

There is a rule to deposit at least an amount of money in case of opening an account.

However, it is not strictly followed. Sometimes more money is asked from a new

customer that who discourage him to open an account in the bank. I think the amount

should be fixed at a level that is not altered from customer to customer.

The office space of NCCBL, Jubilee road branch is not sufficient enough.

Foreign Exchange Section is one of the busiest sections in Bank. Sometimes it is

found all works are not performed efficiently due to lack of sufficient officials.

Training facility isn’t sufficient especially of the lower officers. The advertisement of

NCCBL in TV, Newspaper or in any mass media is not available.

Application of modern technology such as computerization is not sufficient.

30



NCCBL, Jubilee road branch has no reception section and desk.

In this branch there is lack of sufficient equipment.

Since there has two floors, overseeing the job of others is very difficult.

Section 3:

4.22 Customer Satisfaction About Foreign Trade Service Of NCCBL:

Customer satisfaction is a very subjective issue and cannot be measured very easily.

Customer satisfaction is very much dependent on service quality of the bank. Service quality

was dependent in reliability, responsiveness, assurance, empathy as well as tangibles, which

are known as servqual method. This is a kind of research and this research would help us to

take a short ride inside the unknown of service quality of NCC Bank and give us knowledge

of the quality of services provided by the bank and their employees.

Services are heterogeneous and along with intangibility services cannot be stored or saved

for later uses. That’s why service quality was a critical component for the measurement of

customer satisfaction. During survey a sample of 10 companies of customers was

interviewed who had come to the branches for various reasons. They gave their opinion and

based on this, service would be evaluated.

Servqual model helps companies to better understand the expectation and perception of their

customers. Servqual analysis result could be used to identify the components or facts of a

service the company was particularly good or bad at. It was used to monitor service quality

overtime, to compare performance with that of competitors, or to measure customer

satisfaction with a particular service industry generally. So this servqual was important

measurement to evaluate customer satisfaction of any service organization.

4.23 Service Quality Dimension:

Customers perceive quality in a multi-dimensional way. Customers measure quality through

the use of multiple factors. These factors are were different for product and services; even

31


NCC BANK LIMITED Jubilee Road Branch,Ctg Bank of your choice they vary within different categories of product or services. The following five dimensions

were considered as a standard format for the assessment of service quality and we also used

those five dimensions to meet the objectives of our reports. They are

Reliability: ability to perform the promised service accurately and dependably.

Responsiveness: Willingness to help customer and provide prompt service.

Assurance: Employee’s knowledge and courtesy & their ability to inspire trust and

confidence.

Empathy: Caring, individualized attention given to customer.

Tangibles: Appearance of physical facilities, equipment, personnel and written materials.

4.23.1 Factors Under The Reliability Dimension:

Q1.When NCCBL’s Foreign Exchange department promises to do something by a certain

time, it does so?

32


NCC BANK LIMITED Jubilee Road Branch,Ctg Bank of your choice Ranking & score: It is placed in the 1st position with the score of 4.1

Analysis: The consumer has the perception as the score represent that NCCBL keeps their

promises but not exactly in a certain time. It is an important part of the service to deliver their

service as it is promised and by a certain time without much delay. They should always look

for improvement in this factor.

Q2.when you face a problem in L/C, NCCBL shows a sincere interest in solving it.

Ranking & score: It is placed in the 5th position with the score 3.5.

Analysis: The consumers have the perception as the score represents those NCCBL shows a

sincere interest in solving it when a customer has a problem.

Although they are not 100% perfect in doing every work. The score suggest that in few

occasions in customers rush time, they have failed to solve all the problems of the customers

and thus those consumers have scored them low. Most consumers don’t like mistakes, so

NCC bank should show a sincere interest in solving the customer’s problem.

Q3. NCCBL performs the service right the first time.

Ranking & score: It is placed in the 3rd position with the score 3.8

Analysis: The consumer has the perception as the score represents that NCC bank performs

the service right the first time. It is perceived that they are efficient to perform the service at

the first time. The result is quite satisfactory which indicates the efficiency of the bank

officials. So customers are satisfied with the service provided by the bank.

Q4. I usually have to wait for long to get my work done.

Ranking & score: It is also in 4th position with the score of 3.8.

Analysis: The consumer has the perception as the score represents that NCC bank provides

services timely and as promised. Consumers are quite agreed in this question just like the

above one.

Q5.NCCBL keeps customers informed about when services will be performed.

Ranking & score: It was placed in the 2nd position with the score 3.7.

33


NCC BANK LIMITED Jubilee Road Branch,Ctg Bank of your choice Analysis: The consumer has the perception as the score has a little difference from the 3 rd

position. The score represents that consumers are satisfied but not that much. That’s why this

factor needs continuous improvement.

4.23.2 Factors Under Responsive Dimension:

Q1. NCCBL’s Foreign Exchange employees provide you prompt service.

Ranking & score: It is placed in the 1st position with the score 3.7.

Analysis: The consumer has the perception as the score represents that NCC bank has good

score in this question which means that they are performing prompt or on time service. A lot

of customer is satisfied with their performance in this factor. In banking, people want fast

transaction because time is very important for the business people.

Q2.Employees in Foreign Exchange of NCCBL are always willing to help you.

Ranking & score: It is placed in the 2nd position with the score 3.6.

Analysis: The consumer has the perception, as the score represents that NCCBL are willing

to help consumers. Maintaining the relationship with the customer is the key factor in

consumer banking. As consumer likes to be helped, NCCBL have to give more focus on this

topic.

34


NCC BANK LIMITED Jubilee Road Branch,Ctg Bank of your choice 4.23.3 Factors Under Assurance Dimension:

Q1.you feels safe in your transaction with NCCBL.

Ranking & score: It is placed in the 1st position with the score of 4.5

Analysis: The consumers has the perception as the score represents that NCC bank has

successfully gained the perception of safe transactions with the consumers. Consumers are

well safe with transacting and keep believe on them.

Q2. Employees in NCCBL’s Foreign Exchange have the knowledge to answer your

questions.

Ranking & score: It is placed in the 2nd position with the score of 4.3

Analysis: The consumers have the perception as the score represents that the employees of

NCC bank have adequate knowledge for answering the customers’ unknown question. So

customers are quite satisfied in this factor.

4.23.4 Factors Under Empathy Dimension:

35



Q1.NCCBL gives you individual attention.


Analysis: The consumers have the perception as the score represents that NCC bank

sometimes pay individual attention to its customers; not every time. May be some of the

customers getting personal attention but not all are getting the same attention. The bank

needs to take immediate steps in these factors because consumers like to get individual

attention from the service all the time.

Q2. Employees in NCCBL understand your specific needs.

Ranking & score: It is placed in the 2nd position with the score of 3.4

Analysis: The consumers have the perception as the score represents that the employee of

NCC bank has a very little knowledge to understand the customers’ specific needs. That’s

why serious improvement is needed in this factor.

4.23.5 Factors Under Tangibles Dimension:

36


NCC BANK LIMITED Jubilee Road Branch,Ctg Bank of your choice Q1. NCCBL’s physical facilities are visually appealing.

Ranking & score: It is placed in the 2nd position with the score of 4.

Analysis: The consumers have the perception as the score represents that NCC bank’s

physical facilities are visually much attractive and appealing to the consumer because old

look and dull colored office does not make any feelings in consumers mind. A well-

decorated office enhances the prestige of any organization. Jubilee Road Branch is quite big

and its physical facilities are attractive enough which increase the image of the bank.

Q2. NCCBL has convenient business hours.

Ranking & score: It is placed in the 3rd position with the score of 3.6

Analysis: The consumers have the perception as the score represents that NCC bank has not

convenient and suitable business hours. Clients want more and more suitable business hours

because time is very important factor for them. So improvement is needed in these factors

immediately.

Q3. I am satisfied with the service of Foreign Exchange in NCCBL.


Analysis: The customers have the perception as the score represents that NCC bank’s

customers are very much satisfy with the service of Foreign Exchange department. So they

should maintain this quality always.

5.1 Conclusion & Recommendations

Proper financial system of a country can contribute toward the development of the country’s

economy. In our country, banks are leading in the financial system. Again, private

commercial banks, which are much better than state-owned banks, are plying a significant as

well as vital role in the development of our country. Certainly NCCBL is mobilizing its all

resources on this same track to achieve maximum possible contribution to the nation.

Despite stiff competition among banks operating in Bangladesh, both foreign and local and

NCCBL has achieved satisfactory progress in areas of its operations and earned an

37


NCC BANK LIMITED Jubilee Road Branch,Ctg Bank of your choice impressive operating over the previous years. The bank hopes to achieve a satisfactory level

of progress in all areas of its operations including target of profitability during the year 2005.

During the three-month internship program at NCCBL, Jubilee Road Branch, General

Banking & loan and Advance department almost all the desks have been observed more or

less. This internship program, in first, has been arranged for gaining knowledge of practical

banking and to compare this practical knowledge with theoretical knowledge. Comparing

practical knowledge with theoretical involves identification of weakness in the branch

activities and making recommendations for solving the weakness identified. Though all

departments and sections are covered in the internship program, it is not possible to go in

depth of all activities of the branch because of time limitation. However, highest effort has

been given to achieve the objectives the internship program.

The recommendations that have been suggested for the Bank are the following:

a. Most of the time NCCBL, Jubilee Road Branch is found in gathering and crowded

place especially from 1st day to 10th day of the month due to shortage of space. This

branch should increase it space.

b. NCCBL has to create a new marketing strategy, which will attract more clients and

thereby increase the Deposit.

c. NCCBL should provide an effective training program for the junior level officer as

though they can perform their task efficiently.

d. NCCBL should use modern banking system. So that they can improve their customer

satisfaction.

e. Sometimes General banking department is found so busy that they can’t performed

all the task more efficiently (preparing voucher, various entry in registration book

etc.) due to lacking of officers/staff NCCBL should recruit more people for his

section.

f. On-line banking is now a part and parcel of modern banking so NCCBL, Jubilee

Road Branch should introduce this as soon as possible.

38



g. A portion of customers suggested that at least in the busy branches there should be a

separate counter for woman.

h. The down payment of loan can be reduced that must be increased client’s number.

i. Lending policy should be liberalized & loan recovery must be ensured.

j. Proper marketing policy is essential for establishing the idea of NCCBL & tries to

develop a project, which ensure the increase of public relation.

Bibliography:

The available sources that helped to prepare this report include the followings:

1. Annual Report of NCCBL- 2005, 2006

2. NCCBL Manager’s Annual Conference Report-2003.

3. Statement of Affairs of NCCBL, Jubilee Road Branch, Ctg-2006.

4. NCCBL Guideline. (NCCBL Training Institute 30th foundation training center).

5. Website: www.nccbl.com

6. Website: www.emeraldinsight.com

39

http://www.emeraldinsight.com/

http://www.nccbl.com/



7. Product Management: Donald R. Lehmann & Russell S. Winer, Forth Edition

40

nccbl(bangladesh)

Documents

foreign banks

generation banks

number of banks

commercial banks ncbs

financial development

financial sectors

financial system of

number of private banks