Chapter-01

Introduction

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1.1 Background of the study
Banking is one of the most important sectors for a country‟s wealth building activities.
At present the modern business, industrialization, foreign trade almost is dependent on
banks, but now a day the banking sector of Bangladesh is suffering the disease of default
culture, which is the consequence or result of bad performance of most the banks in
Bangladesh. BASIC Bank is playing an important role towards the growth and economic
development of Bangladesh. This study is an attempt to produce a constructive report
“Operation of Cash and Clearing of Cheque of BASIC Bank Limited” with special
reference to sources of General Banking Division fund for industrial General activates
and its deployment as well as repayment.”

1.2 Origin of the report

The report titled “Operation of Cash and Clearing of Cheque of BASIC Bank
Limited” Especially on General Banking a case study on BASIC Bank Limited is a
partial requirement of the BBA Program. The student is required to prepare a report on
the organization where she has been attached. She has also to undertake a management
problem/are of investigation of the organization for reporting. Assigned by the guide
teacher, this report is prepared as partial fulfillment of BBA requirement.

1.3 Objective of the study

The main objective of education is to acquire knowledge. To acquire knowledge
ultimately we must do some practical application in addition to theoretical knowledge.
Through this report, I tried my level best to present my practical knowledge as well as to
find out:
Primary Objective:
Operation of Cash and Clearing of Cheque of BASIC Bank Limited

Secondary Objective:
i. To analyze of cash collection procedure.
ii. To analyze clearing section of cash.
iii. To minimize cash balance.
iv. To maintaining liquidity.
v. To optimizing cash resources.

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1.4 Methodology of the Study:
This report is mainly quantitative and descriptive in nature. So, the necessary data I have
been collected from.

Primary Data:
i. Face to face conversation with the respective officers and stuffs of the branch and
head office.
ii. Face to face conversation with clients visited the branch.
iii. Practical work experience in the different desk of the department of the branch
covered.

Secondary data:
 Daily diary (containing my activities of practical orientation in BASIC Bank
Limited)
 Annual Report of 2024
 Website of BASIC Bank Limited
 Various publications on bank

Also I used here some ratios and bar chart for analysis of secondary data

1.5 Scope of the study

This study makes an attempt to cover with its scope almost all the significant aspects of
General Banking.
i. To review the main operations of general banking division of the bank.
ii. To identify the significant aspects of General banking activities
iii. To verify that business has been conducted in accordance with BASIC Bank
Principles & Procedures;
iv. To review operations and ascertain whether results achieved are consistent with
the goals and objectives originally planned.

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1.6 Limitation of the study
There are some limitations in my study. I faced some problems during the study,
which I am mentioning them as below:
i. The time period for this study was short. So I could not go in depth of the
study.
ii. Some desired information could not be collected due to confidentiality of
business.
iii. Due to time constrain all available methods and models could not be
verified and evaluated.
iv. Lack of Experience

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 CHAPTER: 2
Organization Profile of BASIC Bank Limited

5
2.1 Background of the Organization
Bangladesh Small Industries and Commerce Bank Limited, popularly known as BASIC
Bank, is a state-owned scheduled bank. However, it is not a nationalized Bank. It is a
bank-company and operates on the lines of a private bank. The very name Bangladesh
Small Industries and Commerce Bank Limited is indicative of the nature of the bank. It
is a blend of development and commercial banks.

BASIC Bank is a banking company registered under the Companies Act 1913. It was
incorporated under this Act on the 2nd of August 1988. The bank started its operation
from the 21st of January 1989. It is governed by the banking Companies Act 1991. The
bank was established as the policy makers of the country felt the urgency for a bank in
the private sector for financing Small Scale Industries (SSIs). At the outset, the bank
started as a joint venture enterprise of the BCC Foundation with 70 percent shares and
the Government of Bangladesh (GOB) with the remaining 30 percent shares. The BCC
Foundation being nonfunctional following the closure of the BCCI, the government of
Bangladesh took over 100 percent ownership of BASIC on 4th June 1992. Thus the Bank
is state owned. However, the Bank is not nationalized; it operates like a private bank as
before.

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2.2 BASIC Bank at a Glance
Name BASIC Bank Limited
Date of incorporation August 2, 1988
Date of inauguration of operation January 21, 1989
Registered office Bana Shilpa Bhaban
73, Motijeel Commercial Area
Dhaka-1000, Bangladesh
Head Office Sena Kalyan Bhaban(6th floor)
195, , Motijeel Commercial Area
Dhaka-1000, Bangladesh.

Name of the chairman of the Board Mr. Alauddin A. Majid

Name of Managing Director Ms. Parag
Number of Branches 68
Services provided Deposit scheme, Credit facility and Foreign
exchange services
Net interst Income Million. 14,930.40,668 (2016)
Profit after tax and provision Million. 14,954.57 (2016)
Ownership Government of Bangladesh
Banking software used Kastle Code Banking Solution
Technology used Member of SWIFT
E-Mail basicho@[Link]
Website
[Link]

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2.3 Objectives of BASIC Bank
BASIC Bank is unique in its objective. It maintains both operational objectives and
organizational objectives. Operational objective of BASIC Bank Limited are as follows:
i. As mentioned earlier, BASIC‟s main priority is promoting and financing
development of small and cottage industries.
ii. The Bank is to provide full range of commercial banking services including
collection of deposits, such as current, savings, STD, and FDR; short term trade
finance, handling of import and export business.
iii. BASIC offers Micro credit to the urban poor through linkage with NGO‟s with a
view to facilitating their access to the formal financial market.
iv. BASIC Bank is attempting to introduce online banking to keep pace with other
commercial banks.

2.4 Goals of BASIC Bank

BASIC Bank Ltd always ready to maintain the highest quality of services by up grading
banking technology prudence in manage & by applying high standard of business ethics
through its established commitment and heritage. Objectives of a private institution like
BASIC Bank Limited is to maximize profit though optimum utilization of resources by
providing best customers services. Other objectives are as follows:
i. To employ funds for profitable purposes in various fields with special emphasis
on small industries.
ii. To undertake project promotion to identify profitable areas of investment.
iii. To established linkage with other institutions which are engaged in financing
micro enterprises.
iv. To co-operate and collaborate with institutions entrusted with the responsibility
of promoting and adding SSI sector.
v. BASIC Bank Limited. is committed to ensure its contribution to national
economy by increasing its profitability through professional disciplined growth
strategy for its customer and by creating corporate culture in international
banking area.
vi. The objective of BASIC Bank Limited. is not only to earn profit but also to keep
the social commitment and to endure its co-operative to the person of all level to
the businessman, industrialist especially who are establishing large scale industry

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 by consortium and the agro-based export oriented medium & small scale
industries by self-inspiration.
vii. BASIC Bank Limited as the first and largest private bank in committed continues
its endeavor by rapidly increasing the investment of honorable shareholders into
assets.
viii. BASIC Bank Limited believes in building up strong-based capitalization of the
country.
ix. BASIC Bank Limited is playing a vital role in Socio-Economic development of
Bangladesh by way of linkage with rest of the world by developing world wide
network in domestic and international operations.

2.5 Mission of BASIC Bank

The mission of any company is the unique purpose that sets it apart from other
companies of its type and identifies the scope of its operations. In short, the mission
describes the company‟s product, market, and technological areas of emphasis in a way
that reflects the values and priorities of the strategic decision makers. The mission of
BASIC Bank is to become one of the leading Banks in Bangladesh by its prudence.
BASIC Bank‟s business mission lies with the slogan “A Bank with international
connection is to assist the business development of private sector institutions, industries
and household”. It also emphasizes on a reasonable return from its investments to satisfy
the shareholders. The mission of BASIC Bank can be summarized in the following
points:
BASIC Bank intends to provide better benefits and good returns to its customers and
shareholders.

i. It intends to meet the needs of its clients and enhance its profitability by creating
corporate culture.
ii. BASIC Bank aims to ensure its competitive advantage by upgrading banking
technology and information system.
iii. It provides high financial services to strengthen the well-being and success of
individual, industries and business communities.
iv. BASIC Bank believes in strong capitalization.
v. It maintains congenial atmosphere for which people are proud and eager to work
with BASIC Bank Limited.

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 vi. It believes in disciplined growth strategy.
vii. BASIC Bank encourages investors to boost up share market.
viii. It intends to play more important role in the economic development of Bangladesh
and its financial relations with the rest of the world by interlining both domestic and
international operations.

2.6 Motto of BASIC Bank limited:

“Serving people for progress”

2.7 Vision of BASIC Bank:

Provide the best banking services to all kinds of people and contribute for economic
development of the country.

2.8 Functions of BASIC Bank

The Banks offers-

i. Term Loans to industries especially to Small-Scale enterprise.

ii. Fully fledged commercial banking Service including collection of deposit, short
term trade finance, Working capital finance in processing and manufacturing
units and facilitating international trade.
iii. Financing & Technical support to Small Scale Industries (SSI) in order to enable
them to run their enterprises successfully.
iv. Micro Credit to the urban poor trough linkage with NGOs with a view to
facilitating their access to the formal financial market for the mobilization of
resources.
v. Financing in import and export business like other commercial like other
Commercial leeks.
vi. General banking facility like CD, FDR, SB, STD, BCD, FCA etc available here.

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2.9 Organogram Chart of BASIC Bank
Organization implies structure, the total work to be carried on must be grouped by kind
or type into divisions and department, sections and units, and likewise the work must be
grouped into different levels, which are the managerial hierarchy, must set up and
defined. Means must also be devised to provide for co-ordination and integration of
people and their activities.

The structure of an organization is generally shown on an organization chart. It shows

the authority and responsibility relationship between the various functions in the
organization by showing the reports to whom i.e. to reflect the accountability system.
The management of the bank is vested in a Board of Directors appointed by the
Government. The Managing Director is the chief executive of the bank. The general
manager and other executives assist him. Managing director is responsible for overall
administration, general superintendence and direction of the whole affairs and business
of the bank. He is also responsible for proper functioning and discipline of the bank as
per acts, Ordinance, Orders, Rules, and Regulations and directives under him and
exercise, control and supervises over them. He is to attend Board of Directors meeting as
full time Director and is responsible for execution of decisions of the board. He has to
recommend to the Board all administrative, financial and business proposals not covered
within the delegated authority.

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 Organogram of BASIC Bank

Board of Directors

Managing Director

Deputy Managing
Director

GM (Audi & Inspection) GM (Operation) GM (Administration)

Deputy General Manager

Assistant General
Manager

Executive Manager

Deputy Manager

Assistant Manager

Officer

Assistant Officer

Junior Officer
(Marketing)

Office Assistant

Figure 1 - Organization Structure of BASIC Bank Limited.

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2.10 General Banking Department (GB) of BASIC Bank Limited.
The Three (3) major departments of BASIC Bank are general banking, foreign trade
banking and advance or credit banking. These three parts are very important for every
bank. Every department has a specific manager. BASIC Bank‟s managerial chart is

General Manager

Deputy General
Manager

Manager Manager Manager

GB Foreign Advance

Assistant Manager, Officer, Assistant Officer

2. Work-Related Activities:
General Banking is the process of engaging in the business of keeping money for savings
and checking accounts, issuance of loans and credit, and the like. This department is the
most important department of the bank. Without it a bank can not run because all of the
imperative work such as cash taking form the customer, issuing pay order, issuing check,
account opening, bank monitoring, des-pass, dealing with customer and account holder
etc. In GB there are seven (7) desks with a manager. The manager monitors all the desks.
The GB manager monitors pay order issue, check issue, clearing and taking.

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2.11 Front Desk:
i. Account opening
ii. Issuing Pay Order
iii. Issuing Cheque Book
iv. Issuing Debit Card
v. Client service
vi. Circular based work (Bangladesh Bank and Our Head Office)
a. TP update
b. KYC update
c. CIF update
d. Balance confirmation

2.12 Account opening:

Account opening is so important for both the bank and the general people. There are
three (3) types of accounts in BASIC Bank Limited.

i. Current deposit account

ii. Savings deposit account
iii. FDR account

Current deposit account

Savings deposit account

Types Account opening:

FDR account

2.13 Current Deposit Account (CD):

A current account is a running account with amounts being paid into and drawn amount
of the account continuously. These accounts are also called demand deposits or demand
liabilities since the banker is under obligation to pay the money in such deposits on
demand. The account never becomes time-based, because the limitation does not seen

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until a demand is made by the customer on the back for the payment of deposits. These
accounts are generally opened by business houses whose banking transactions are
numerous and frequent.
These accounts can be opened by:
i. Any adult individual in single or in joint names.
ii. Proprietorship and Partnership Firms.
iii. Private and Public Limited Companies.
iv. Government, Semi-Government, Autonomous Bodies and Sector
Corporations.
v. Clubs, Societies, Associations and NGOs.

2.14 Requirements for opening Current Deposit Account:-

For Individual:
i. To fill up and sign a prescribed application from after furnishing all
particulars.
ii. Introduction from respectable customer of the bank.
iii. Two photographs each attested by the introducer.
iv. Photocopy of Passport/Nationality Certificate from Ward Commissioner/ UP
Chairman.
v. Disclosure of nominee.
vi. To fill up KYC form and Transaction profile.

2.15 For Proprietorship & Partnership Firms:

i. To fill up and sign a prescribed application from after furnishing all particulars.
ii. Introduction from respectable company of the bank.
iii. List of partners address
iv. Two photographs of Proprietor/Partner each attested by the introducer.
v. Valid Trade license and Partnership Deed (for partnership firm).

vii. Disclosure of nominee.

viii. To fill up KYC form and Transaction profile.

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2.16 For Private & Public Limited Companies:

i. To fill up and sign a prescribed application from after furnishing all particulars.
ii. Certified copy of Memorandum and Articles of Association.
iii. Two photographs each of the directors who are authorized to operate the account.
iv. Certificate of Incorporation.
v. Certificate of Commencement of Business (In case of Public Limited Company).
vi. To fill up KYC form and Transaction profile.
vii. A resolution of the Board of Directors of the company to open the account and
empowering the directors who will operate the account.

2.17 For Government, Semi-Government Autonomous Bodies and

Sector Corporation:-
i. Two photographs each of the authorized account operators.
ii. To fill up KYC form and Transaction profile.
iii. Decision/Resolution of the competent authority to open and operate the account.

2.18 For Clubs, Societies, Associations and NGOs:

i. Two photographs each of the authorized account operators.
ii. Decision/Resolution of the competent authority to open and operate the account.
iii. To fill up KYC form and Transaction profile.
iv. Introduction.
v. Registrations form the respective departments of the Government.
vi. Up to date copy of Laws, By Laws or other documents governing its constitution
acceptable to the Bank.

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2.19 Initial Deposit/Minimum Balance:
Initial deposit of Tk 5000.00 is required to open the account and maintain as minimum
balance. This amount may be reduced at the discretion of the Bank.
Account Amount (Minimum)
SB 500 Tk.
CD 5000 Tk.

Every Client must pay this amount when they open account.

2.20 Savings Deposit Account (SB):

Savings accounts are mainly for non-traders customers who have some potential for
savings and who do not have numerous tractions entering their accent. Salaried class of
the lower and middle income group, small traders and individuals mainly open such
accounts. There is restriction on withdrawals in a month. Heavy withdrawals are
permitted only against prior notice.

These accounts can be opened by:

i. Any adult individual in single or in joint names.
ii. In the name of Clubs, Associations, Societies and NGOs.

We have different types of Saving Accounts

a. School Banking: Only for School going minor students, whose age is not less
than six (6) years and not more then 18. Bangladesh bank paid the interaction to
all scheduled bank to encourage the school going student for saving tendency.
This account maintained by the guardian.

2.21 Requirement for opening Accounts:

In case of Individual:
i. To fill up and sign a prescribed application form after furnishing all particulars.
ii. Introduction.
iii. Two Photographs duly attested by the introducer.
iv. Photocopy of Passport/Nationality Certificate from Ward Commissioner/UP
Chairman.
v. Disclosures of nominee. To fill up KYC form and Transaction profile.

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2.22 Progress at a Glance (2020-2024):

Year 2024 2023 2022 2021 2020

From the Balance Sheet (In Million)
Authorized Capital 5,000.00 5,000.00 2,000.00 2,000.00 2,000.00
Paid-up Capital 2,946.98 2,357.59 1,964.65 1,455.30 1,309.77
Reserve and Surplus 3,493.60 3,124.17 2,509.78 2,468.65 1,672.82
Shareholders' Equity 6,440.58 5,481.76 4,474.43 3,923.95 2,982.59
Fixed Assets 526.82 364.46 283.12 232.65 228.36
Total Assets 109,682.06 78,031.73 61,569.38 45,308.31 46,651.53
Deposits 87,693.23 62,650.73 49,259.60 34,501.69 38,368.23
Long- term Debt 5,492.93 2,788.15 2,718.46 2,875.16 1,708.4
Loans and Advances 85,955.76 56,884.76 46,341.51 29,261.53 27,269.13
Placement & Investment 14,111.57 13,760.82 9,294.02 12,244.91 15,659.03
From the Income Statement (In Million)
Gross Income 13,402.26 8,825.20 6,120.53 5,162.30 5,060.29
Gross Expenditure 10,792.18 6,476.70 4,403.49 3,593.96 3,526.35
Profit before Tax 2610.08 2,348.50 1,717.05 1,091.10 1,533.94
Profit after Tax 27.89 976.11 660.93 648.85 549.86
Tax Paid (Cumulative) 7,066.80 5,987.61 4,948.64 4,225.37 3,538.01
Others (In Million)
Import Business 37,093.50 47,087.80 42,205.90 33,976.6 27,359.77
Export Business 29,939.20 33,061.10 23,998.80 19,887.7 22,270.87
Financial Ratios (Percentage)
Capital Adequacy Ratio 10.05 10.13 9.41 13.48 12.04
Capital Fund to Deposit 7.34 8.75 9.08 11.37 7.81
Liabilities
Liquid Assets to Deposit 9.91 14.28 12.06 24.67 47.70
Liabilities
Loan to Deposit Liabilities 91.75 87.74 94.08 84.81 71.07
Earning Assets to Deposit 105.56 108.22 81.55 116.44 114.69
Liabilities
After Tax Return on 0.03 1.40 1.24 1.41 1.30
Average Assets

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Net Profit to Gross Income 0.21 11.06 10.80 12.57 10.87
Interest Margin Cover 110.17 139.76 95.15 135.79 137.08
After Tax Return on Equity 0.47 19.61 14.95 18.79 19.68
SMI/SSI Loan and Micro 52.12 54.67 56.78 56.93 59.32
Credit to Total Loan
Number of Branches 62 45 34 32 31
Number of Employees 1,657 1132 964 776 735
Deposit per Employee (In Million)
Deposit per Employee 52.92 55.35 51.10 44.46 52.20
Advance per Employee 51.87 50.25 48.07 37.71 37.10
Profit before Tax per 1.58 2.07 1.78 2.02 2.09
Employee

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 CHAPTER-03
Operation & Cash Clearing of Cheque

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3.1 Definition of Cash
Cash section demonstrates liquidity strength of a bank. It also sensitive as it deals with
liquid money. Maximum concentration is given while working on this section. As far as
safety is concerned special precaution is also taken. Tense situation prevails if there is
any imbalance in the case account.

3.2 Cash:
Cash is very important for a bank. It is called blood of Bank. It is a very sensitive and
service oriented department.

3.3 Cash management:

Cash management or cash maintenance is a very important factor for a bank. Every
branch has its individual vault limit which coverage insurance. Our branch vault limit is
three (3) crore. Insurance coverage is also three (3) crore. If the cash limit exceed we
remit cash to Main branch. If the cash limit is in deficit we remit cash form Main branch.

3.4 Cash received:

Receiving cash is daily work of cash department. Our cash officer received cash form
client. Any kind of amount we can receive, there is no limit of receiving cash. We never
received fake note. If anybody gives fake note we destroy that fake note as per
Bangladesh Bank rule. We also receive soil note. We receive two parts of soil note but
we cannot receive more than two part of a note.

3.5 Cash payment:

Cash payment is a very important work, so a cash officer must be very careful about it.
Any type of amount of cash we pay. Before paying cash we check following things:
1. Date
2. Post date or stale cheque (The cheque more Then 6 month)
3. Balance
4. Signature
5. Photograph
6. Amount and Amount in word.

If any item is missing from this list, we never pay.

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 3.6 Online cash received and payment:
In the regard of online payment we maintain some procedure. We try to contact with
client‟s mother branch over email. When we get conformation mail then we give
payment. We take online charge according to the amount. Charges amount are given
bellow:
Online Charges Amount Charges
TK TK
50,000 Free
50,001 to 1,00,000 58 Tk
1,00,001 to 5,00,000 115 Tk
5,00,001 to 20,00,000 230 Tk
20,00,001 to above 460 Tk

3.7 ATM booth Cash management:

We also provide ATM booth service. There are fourteen (14) ATM booth of Basic Bank
Limited Situated is five (5) districts in Bangladesh Our branch takes the responsibility
and authorized to ATM cash management. We reload money to the ATM machine
according to demand with the concern of Head Office (HO).

3.8 Other Services:

i. We collect Dhaka WASA bill;
ii. We issue SP (Sanchay Patro);
iii. We sell prize bond;
iv. Sometime we sell lottery ticket;
v. Sometime we do voluntary job in the natural disaster;
vi. We carry Corporate Social Responsibility (CSR);
vii. We donated Two (2) crore taka at the time of disaster RANA PLAZA;
viii. At the time of severe cold we provide warm cloth;
ix. At the time of severe flood we provide relief and
x. We donated a bus to Jahangirnagar University.

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3.9 Cheque Clearing:
Cheque clearing (or check clearing in American English) or bank clearance is the process of
moving a cheque from the bank in which it was deposited to the bank on which it was drawn, and
the movement of the money in the opposite direction. This process is called the clearing cycle
and normally results in a credit to the account at the bank of deposit, and an equivalent debit to
the account at the bank on which it was drawn.

3.10 Clearing:
Clearing is a very important department of any bank.
There are two parts of clearing
i. Outward Clearing
ii. Inward Clearing

3.11 Outward Clearing:

At first we receive cheque form the customer. Before receiving cheque we notice the
following things:
1. Date,
2. Post date or stale cheque (The cheque more Then 6 month)
3. Balance, amount and amount in word
4. Signature.
5. We notice whether it is High Value (HV) or Regular Value (RV). It is the
rules of BACH of Bangladesh Bank that 5 Lac and above 5 lac is considered
as High Value and 1 taka to below 5lac is considered as Regular Value.

3.12 Cheque Processing In Outward Clearing:

After receiving cheque we follow some process:
i. Crossing
ii. Endorsement back side of the cheque
iii. Authorized signature back page of the cheque
iv. We check all the received cheque in UVD machine. To confirm that whether
it is original or fake.

Then we scan it in TACPS. We only sent cheque image through TACPS software to
BACH.

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3.13 Time of placing Regular value (HV) and Regular Value (RV):
There is a specific time for placing HV and RV. It is also the rules of BACH of
Bangladesh Bank.
Time of placing of HV and RV

High Value Regular value

In Normal Day 10:00 To 11.00 10:00 To 12:00

In Ramadan 09:30 To 10:30 09:30 To 11:00

3.14 Inward Clearing:

At first we print image of the HV and RV. Cheque form TACPS. After printing we
notice following things:
1. Date
2. Post date or stale cheque (The cheque more Then 6 month)
3. Balance
4. Signature
5. Amount And Amount in word.
6. How many times it placed in clearing house (A cheque cannot be placed more
than three (3) times)

3.15 Other Important Functions of General Banking

(i) Crossing:
Crossing of cheque, which is now universally adopted, had its origin in London clearing
house. The name of the bank, whose claim was cleared, was written across the face of
the cheque within two parallel lines. In the beginning of 19th century, this practice
becomes common even outside of clearing house, as an element of safety.
Normally two (2) types of cheque used in the bank such as,
i. Open Cheque:
A cheque, which capable of being paid over the counter in cash, is known as open
cheque.
ii. Crossed Cheque
Those, which can only be paid to the banker for crediting the proceeds to the
amount of its payee.

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Types of Crossing:
General Crossing

Types of Crossing

Special Crossing

General Crossing:
Under Section 123 of Negotiable Instrument Act 1881, a cheque crossed generally is
defined as under: “where a cheque bears across its face an addition of the words “any
company” or any abbreviation thereof, between two parallel transverse lines simply,
either with or without the words „Not negotiable‟ that addition shall be deemed a
crossing and the cheque shall be deemed to be crossed generally”
Special Crossing:
Where a cheque bears across its face an addition of the name the banker, either with or
without the words “not negotiable” that addition shall be deemed a crossing, and the
cheque shall be deemed to specimen of special crossing.

A cheque may be crossed by anyone of the following:

i. The drawer of a cheque.
ii. The holder of the cheque, where a cheque is issued uncrossed, its holder may
cross it generally or specially.
iii. The banker, in whose favor the cheque has been crossed specially, may again
cross it especially in favor of another banker. The letter bank in such a case acts
as the agent of the former.

3.16 Essential of a valid endorsement:

i. An endorsement in order to operate, as a negotiation must comply with the
following conditions:
ii. It must be written on the instrument itself and be signed by the endorser.
iii. The endorsement must be of the entire instrument.

25
 iv. Where a negotiable instrument is payable to the order of two or more payees or
endorsees that are not partners all must endorse unless the one endorsing has
authority to endorse for the others.
v. Where in a negotiable instrument is payable to order, the payee or endorsee is
wrongly designated or his name is miss-spelt, he/she should sign the instrument
in the same manner as the given in the instrument. Though he/she may add, if
he/she thinks fit, his/her proper signature.
vi. Where there are two (2) or more endorsements on an instrument, each
endorsement is deemed too been made in the order in which it appears on the
instrument, until contrary is proved?

Kinds of Endorsement: Conditional Endorsement

Endorsement in Blank

Endorsement in Full

Restrictive Endorsement

Types of Endorsement
Endorsement Sans
Recourse

Facultative Endorsement

Partial Endorsement

1. Conditional Endorsement:
A conditional endorsement is one, which makes the transfer of property in a negotiable
instrument from the endorser to the endorsee dependent upon fulfillment of a stated
condition. Thus according to the section 52, of negotiable instruments act 1881, where an

26
endorser makes his/her liability on the instrument conditional on the happening of
particular event, it is called conditional endorsement, though such event may happen.

2. Endorsement in blank:
Where the endorser just puts his/her signature without specifying the endorsee, then the
endorsement is said to be Endorsement in blank.
3. Endorsement in Full:
Where along with endorser‟s signature, the name of the endorsee is specified, the
endorsement is called Endorsement in full.

4. Restrictive Endorsement:
An endorsement is restrictive, which prohibits the further negotiation of a negotiation
instrument.
5. Endorsement sans Recourse:
An endorsement of a negotiable instrument may be expressing words in the endorsement
exclude own liability thereon.

6. Facultative Endorsement:
Where such words are added to an endorsement whereby the endorser waives his/her
right to receive notice of dishonor, the endorsement is termed as facultative endorsement.
7. Partial Endorsement:
Where the negotiable instrument is endorsed for part of the amount, it is called partial
endorsement. Such an endorsement is not valid.

3.17 Dishonored Cheques:

A dishonored cheque cannot be redeemed for its value and is worthless; they are also
known as an RDI (returned deposit item), or NSF (non-sufficient funds) cheque.
Cheques are usually dishonored because the drawer's account has been frozen or limited,
or because there are insufficient funds in the drawer's account when the cheque was
redeemed. A cheque can be dishonored for a lot of reasons:
i. Insufficient fund;
ii. Drawer‟s signature differs;
iii. If the amount in figure and word differs;
iv. If the cheque is post dated (6 months old);

27
 v. Refer to drawer;
vi. If advice is required;
vii. Crossed cheque mentioning “Accounts Payee Only”;
viii. Stopped payment by the accounts holder;
ix. Ask for presenting again, if effects not charged;
x. If the drawer‟s full signature is not given after making any alteration in the
cheque and Payee‟s endorsement irregular.

3.18 Financial Ratio of BASIC Bank Limited.

To get hold of a swift hint of the performance of a financial institution ratio analysis is
used frequently. This tool is used by investors, creditors, managers and different
regulators. For investing decisions investors often rely on this effective tool. A financial
institution itself can have a clue of its financial position in the industry by doing trend
analysis and cross-sectional or peer analysis. These are the two important analyses I have
conduct in order to acquire how well BASIC Bank Ltd. is performing and what are its
future movements in comparing with its competitors and with itself from time to time.
The ratios I have used are classified as Short-term Solvency Ratios, Debt Management
Ratios, Asset Management Ratios, Profitability Ratios, and Market Value Ratios. For
cross-sectional analysis I have taken Bangladesh development Bank Limited which is
also a specialized bank like BASIC Bank Ltd.

Name of the Ratios BASIC Bank Ltd. Bangladesh Development Bank

Ltd
Year 2019 2020 2021 2022 2023 2024
Debt to Equity 13.23 15.98 25.01 0.94 1.08 1.84

Debt to Asset 0.93 0.94 0.96 0.48 0.52 0.65

Return on Asset 1.25% 0.03% -0.34% 2.38% 2.56% 2.18%
Return on Equity 17.81% 0.43% -8.80% 4.62% 5.33% 6.19%
Earnings per Share 33.12 0.95 -18.04 17.15 20.92 25.50
Equity Multiplier 14.23 16.98 26.01 1.94 2.08 2.84
Net Profit Margin 24.94% 0.57% -12.56% 42.90% 44.24% 31.19%

28
3.18.1 Debt to Equity

The debt to equity ratio is a financial, liquidity ratio that compares total debt to total
equity. It is calculated by dividing total liability with total owner‟s equity. For a bank
loans are assets that they distribute and deposits are liabilities that they acquire from their
customers. The following scenario shows against TK. 1 as equity BASIC Bank used TK.
13.23, TK. 15.98 and TK. 25.01 as debt in the years 2022, 2023 & 2024 respectively.
The trend indicates that BASIC Bank is adding more debt in its capital structure every
year and it is rising significantly which puts the bank in a riskier position. On the other
hand, if compared to BDBL the performance of BASIC Bank is also very poor. BDBL
used TK. 0.94, TK. 1.08 and TK.1.84 as debt against TK. 1 as equity in the years 2022,
2023 & 2024 respectively and which is way better than BASIC Bank. The debt to equity
ratio of BDBL also signifies that BDBL has good control on its capital structure, whereas
the debt to equity ratio of BASIC Bank does not show that the bank has a good planning
on deciding its capital structure.

Debt to Equity

30
25.01
25

20
15.98
13.23
15

10

5 1.84
0.94 1.08

0
2019 2020 2021 2022 2023 2024

29
3.18.2 Debt to Asset
Debt-to-assets ratio or simply debt ratio is the ratio of total liabilities to total assets. It is
calculated by dividing total liabilities to total asset. It is a solvency ratio and it measures
the portion of the assets which are financed through debt. Debt ratio ranges from 0.00 to
1.00. Lower value of debt ratio is favorable and a higher value indicates that higher
portion of asset is financed through debt which indicates a bank is not that solvent. Debt
ratio of 0.5 means that half of the company's assets are financed through debts. BASIC
Bank is highly debt financed as the debt ratio is increasing that is 0.93, 0.94 and 0.96
consistently. This means more than half of BASIC Bank‟s total asset was debt financed
in the years 2022, 2023 & 2024 respectively. In contrary, BDBL is in a better position
than BASIC Bank and the bank had used 48%, 52% and 65% debt in the years 2022,
2023 & 2024 respectively to finance its assets. Although in 2024, BDBL used 65% debt
to finance its asset, It is still in a better position than BASIC Bank Ltd.

Debt to Asset
0.93 0.94 0.96
1
0.9
0.8
0.65
0.7
0.6 0.52
0.48
0.5
0.4
0.3
0.2
0.1
0
2019 2020 2021 2022 2023 2024

30
3.19 Performance Analysis
3.19.1 Deposit:
The loan-to-deposit ratio is used to assess a bank's liquidity by comparing a bank's total
loans to its total deposits for the same period. This number is expressed as a percentage.
If the ratio is too high, it means that the bank may not have enough liquidity to cover any
unforeseen fund requirements. Conversely, if the ratio is too low, the bank may not be
earning as much as it could be.

Deposits
100,000.00

80,000.00

60,000.00
BDT

40,000.00

20,000.00

0.00
2024
2017 2023
2016 2022
2015 2021
2014 2020
2013
2014
Year

3.19.2 Loans and Advances

Money provided by the bank to entities for fulfilling their short term requirements is
known as Advances. Loan is a kind of debt while Advances are credit facility granted to
customers by banks. Loans are provided for long duration which is just opposite in the
case of Advances.

Loans and Advances

100,000.00

80,000.00

60,000.00
BDT

40,000.00

20,000.00

0.00
2024
2017 2023
2016 2022
2015 2021
2014 2020
2013
2014 Year

31
3.19.3 Placement & Investment
The placement ratio is a ratio that calculates the amount of bonds sold during
the week as a percentage of the amount of municipal bonds that are issued
during the corresponding week.

Placement & Investment

20,000.00

15,000.00
BDT

10,000.00

5,000.00

0.00
2024 2023 2022 2021 2020
2017 2016 2015 2014 2013
2014
Year

3.19.4 Capital Adequacy Ratio

The Capital Adequacy Ratio (CAR) is a measure of a bank's available capital
expressed as a percentage of a bank's risk-weighted credit exposures. The
Capital Adequacy Ratio, also known as capital-to-risk weighted assets ratio
(CRAR), is used to protect depositors and promote the stability and efficiency
of financial systems around the world.

Capital Adequacy Ratio

16
14
12
Percentage

10
8
6
4
2
0
2024
2017 2023
2016 2022
2015 2021
2014 2020
2013
2014 Year

32
3.20 SWOT Analysis
The Bank‟s strength and competitive capabilities can be shown by the SWOT analysis.
The SWOT analysis is grounded in the basic principle that strategy-making efforts must
aim at producing a good fit between a company‟s resource capability and its external
situation. The SWOT analysis of BASIC Bank Limited is as follows:

Strengths Weaknesses

Opportunities Threats

S- Strengths
i) Reputation of the Bank: Since the inauguration the bank has managed their activity
with their own images to serve their customers. They have provided services successfully
and have achieved goodwill among the Banks. The Bank is opening with its efficiency
and integrity.

ii) Sponsor: BASIC Bank has sponsors from various sectors of Bangladesh. The most
successful entrepreneurs from various sectors started this company. As a result there was
a combination of different thoughts and skills in the management of the bank, which is
very much essential for success in today‟s competitive market.

iii) Top Management: BASIC Bank has a very competent and experienced top
Management. The current Managing Director Ms. Porag has banking experience for a
long time period. He had the experience of marketing and customer relationship
management in her long career. This has helped the bank to achieve its goal.

33
iv) Shariah Based Banking: BASIC Bank is operating based on Islamic Shariah. As
Bangladesh is a Muslim country, the Shariah banking has been able to attract customers
and achieved a great success in the private banking sector.

v) Branches: BASIC bank is operating their business all over the country with 68
branches and still planning to expand their business by opening new branches in the
country. It has strengthened the distribution of the bank‟s services.

vi) Government Bank: The 100% Share of BASIC Bank is Government. So it is a very
Good Strength for any Company.

W- Weaknesses:
i) Promotion: The bank does not any formal promotional activity. They do not give any
sort of advertisement or do not have any marketing activity. They do not even too many
billboards. This is why they are far behind the competitive in the private banking. Even
some people do not know that BASIC Bank Limited is operated according to Shariah.

ii) Remuneration: The remuneration of the officers of BASIC Bank Limited is lower
compared to other private banks. Even the internship students are paid nothing. This is
why high skilled human resources are discouraged to join here.

iii) Online Banking: At Present Every bank try to converted them to the Online banking.
BASIC Bank Limited has no Online Banking System. So it is a great weakness for the
Bank. I hope that BASIC Bank Limited also introduce the Online banking System &
serve his Client very Smoothly

iv) Centralization Decision Making: The decision making of the bank is too many
centralized. No decision is made without the authorization of the head office. Sometime
some quick decision is needed to be taken, but from the branch, no one can make
decision. It is one of the major draws back of the bank.

v) Lacings of some officer: Some of the officer of the BASIC Bank Limited are not
sincere

34
their work. They do not come regularly; if they come they do not work properly. They
just talk & pass the time. Some of the officers are not suitable for his position.

O- Opportunities
i) Consumer Banking: BASIC Bank Limited is operating corporate banking. In our
country there is a huge opportunity of consumer banking. So BASIC Bank Limited can
reposition their branding and introduce consumer banking with corporate banking.

ii) More Branches: The economy of the country is expanding. The business outside
Dhaka is also expanding. As a result, the demand for banking service is increasing day
by day. So BASIC Bank Limited can open more banks in the country and can expand
their business.
iii) Shariah Based Banking: In our country people are religious. Most of the people are
Muslim. They are becoming educated and know the bad impact of interest. So they are
moving towards Shariah based banking. BASIC Bank Limited takes this opportunity.
iv) Government Bank: BASIC Bank is Govt. Bank. So it has a great opportunity to
expand itself.
T- Threats
i) Competitions: In Bangladesh, after economic reform, more private bank has started
their operation in the country. They are coming with different types of attracting
products. This has increased the completion among the private banks.

ii) Devaluation of local Currency: The value of local currency is decreasing. So

investment in local banking is decreasing. More over the inflation is increasing in the
country. So people want to save money but in many cases they cannot. As a result, the
banks are getting less deposit.

Bank Default: There is a tendency of the people of the country to become bankrupt.
Few years ago Sonali & Oriental bank has a great suffering. In our country, the
receivable from top twenty (20) bankrupt companies stood 88.36 billion. This is
discouraging banks to make new investment.

35
 CHAPTER-04
Findings, Recommendations & Conclusion

36
4.1 Findings of the Study
i. Important factors such as good reputation in the market, personal & corporate
relationship etc.
ii. The employees are very good in nature, helpful.
iii. Cash limit is low; because of this sometimes clients can‟t get service
properly.
iv. Political interference has to be avoided in selection of employees. Because
customers are very sensitive in service marketing.
v. There is shortage of computer in general banking section. Sometimes the
shortage of computer makes some unfortunate event in that section.
vi. Number of the employee in the branch is few.
vii. Since a number of new banks are coming to existence with their extended
customer service pattern in a completely competitive manner. Customer-
services must be made dynamic and prompt. Now a days, people especially
business people have very little time to waste.

37
4.2 Recommendations
Basic Bank is one of the top class banks in our country. When I was placed at Jamalpur
Branch. I didn‟t have serious problems regarding the operation, customer service,
management, human resource department or anything else.

In spite of this I found few problems as follows:

i. The time to reach Permanent Position from probation period takes almost two
years, which is a very long time process as I considered and it should be less than
two year.
ii. Some Officers of the bank are not self-motivated. They should be self-motivated
by training.
iii. BASIC Bank has only 68 branches, which are not so satisfactory to serve the
country widely. It requires more branches throughout the country.
iv. DD, TT takes more time to operate. It should minimize time.
v. We require some valuable information for the purpose of making Internship
report but these kinds of information is not available. We strongly suggest
helping us in this matter.

38
4.3 Conclusions
The BASIC Bank Limited has been trying to operate its business successfully in
Bangladesh since 1994. Basic Bank has already developed goodwill among its clientele
by offering its excellent services through General banking, Credit division and Foreign
Exchange divisions. This success has resulted from the dedication, commitment and
dynamic leadership among its management over the periods. The working atmosphere of
the BASIC Bank Limited is very simulating. During the short span of time of its
operation, the bank has been successfully to the position itself as a progressive and
dynamic financial institution in the country. Jamalpur Branch help the country
Development.

39
 Reference

Books:
i. Bangladesh Bank (2018), Bangladesh Bank, Available
at:[Link]
ii. BASIC Bank Limited (2018), BASIC Bank Ltd., Available at:
[Link] (Accessed by 1st July 2018)
iii. Besley, Scott and Bingham, F Ugene, (2005). Essential of Managerial
Finance (12Th edition). New york: Thomson.
iv. Baillie, McMahon, (2007), “The Foreign Exchange Market” – Theory &
Economic Evidence.” 7th edition Thomson, P-65.
v. H. Parker Wills, George W. Edwards, (2008) “Banking and Business” 2nd
edition,
vi. Bloombaerg Publications Ltd, P-81

Website:
i. Various types of publications of BASIC Bank Limited.
ii. [Link]
iii. [Link]
iv. M.S Parag Mozammel Haque (General Manager)
v. Bank‟s employees

40