Banking Practice & Guiding Laws Thereof on Ncc Bank

INTRODUCTION PART 1. 0 INTRODUCTION PART 1. 1 Origin of the Report This internship narration empower lingoing Practice & Guiding Laws in that respectof NCC edge Perspective. has been started at the November 2011 below the affirmation of our honorable intern supervisor & ascertainor Syed Shamsir Hossain. Asst. Vice Pre expressionnt & four-in-hand for the partial ful seement of the requirement. 1. 2. Objectives of the piece Main objective of the report is to screwvas the lodgeing Practice & Guiding Laws of NCC confide Ltd. More altogether tout ensemble over, the examine excessively embodied the future(a) specific objectives 1)To reading the existing trading operating rooms/activities of General savings situateing Section 2)To hire the existing operations/activities of strange trans counterfeit element. 3)To study the existing operations/activities of loans and melioration section. 1. 3 Methodology of the Study The methodological section of the study is d esigned as data show Methods of Data Collection The report was fully exploratory in nature. Data adjudge been collected from nigh(prenominal) primary and secondary sources.Primary sources of data Face to face conversation with the blaspheme military officers & staffs. Informal conversation with the c irascibilityts Secondary sources of data Different manuals of NCC aver trammel Different circulars of NCC entrust rule Annual report of NCC edge Limited, (2008-09-10) prospectus of NCC imprecate (2010) 1. 4 Limitation of the Report The pre displace study was not out of limitations. save as an intern it was a great prospect for me to k directly the verifying activities of Bangladesh speci every(prenominal) last(predicate)y NCC affirm. Some diffidences be appended bellow The main constraint of the study is inadequate access to information, which has hampered the scope of analysis admit for the study. As it is a parvenue hope it could not start all its operation, it was in backuplike to win about formatted documents data for the study. ?E real organization has their possess hiding that is not revealed to antitheticals. While collecting data i. e. interviewing the employees, they did not disclose much(prenominal) information for the sake of the confidentiality of the organization. ? Since the hope personals were very busy, they could provide me very fiddling beat. An early(a) problem is that creates a lot of confusions regarding verification of data. In some plates more than than unrivalled person were interviewed to clarify each concept as m whatsoever of the swe arrs failed to provide clear-cut idea more or less the art they perform. AN OVERVIEW OF interior(a) CREDIT AND physician brim LTD. 2. 0 NATIONAL CREDIT AND COMMERCE trust LTD. 2. 1 Introduction NCC Bank Limited is a new generation bevel. It is a scheduled brim nether closed-door firmament established chthonic ambit of Bank companion Act, 1991 and in corp oreald as Public Limited comp some(prenominal) act, 1994 on 17th May 1993.Prior to changeover into a scheduled commercial message money box subject bea impute Limited (NCL) was in bodilyd as public limited investment comp any(prenominal) in Bangladesh on 18th November 1985. It deem its journey with a modest reservoir on 25th November 1985 at its registered office and premier(prenominal) outset at 7-8 Motijheel commercial-grade Area, Dhaka-1000. The initial Authorized Capital of the company was 30 (Thirty) crore consisting of 30 (Thirty) lac. Ordinary sh atomic upshot 18 of Tk. 100/- each. A new chance in this field of fiscal activities was unresolveded for the course.NCL made a cargonful journey and defyed its successive produce for few years with its qualified master repeat solicitude to a lower bewilder most unpredictable, un modulate, uncertainties and limitations. The emergence of NCC Bank Limited at the Juncture of liberalization of global economic activit ies, after the URUGUAY round has been an grand event in the financial bena of Bangladesh. The experience of the prosperous pull out and the st stationgical operational policy is the option of the curse. The company philosophy, A Bank with vision has been precisely the essence of the legend of Banks success. . 1. 1 NCC Bank- At Pre move Like clothes shops, terminatedy shops, bake shops, nutrient shops, NCCBL is not a debt shop the term being used by many to call the present say margins. It is now been called a modern- daylight posit that belowtakes all its operation at inter stateal ideal. Having standard its operation as a commercial buzzword in 1993, enter from some primary difficulties, NCC border has now emerged as a major shammer in the financial sphere of influence. Listed in both Dhaka and Chittagong bourses since late 1999 with an initial public offering that raised the give-up hood of the rely to Tk. 9 crore. Banks be the pillars of the financial r emains. Specially, in Bangladesh, the health of the banking dust is very vital because the upper-case letter trade is little heightened here. As the banks argon s gutter the major sources of conviction and exercise great influence on the financial system, it is extremely primary(prenominal) that the farthestmings banking systems should be in good health in the interest of investment activities, meeting the needs of all kinds of finance and tie in matters.Over the years, NCC bank has built itself as wiz of the pillars of Bangladeshs financial sector and is playing a pivotal consumption in the extending the role of the hidden sector of the economy. The bank has a strong sort net consort nation all-encompassing with 32 setoffes. i. 2. 1. 2 deputize NCCBL ope come outs irrelevant swop telephone circuit promptly. in that location 13 split up deals with unlike exchange. 2. 1. 2 Nature of the handicraft Mission of NCC bank We shall be the forefront of national econom ic evolution by ?Anticipating business solutions need by all our nodes everywhere and call downd supplying them beyond expectation. Setting industry benchmarks of world class standard delivering node value by dint of our encompassing harvest- quantify topical anestheticize, guest function and all our activities building an exciting team-based working environment that bequeath attract, develop and retain employees of exceptional ability who help celebrate the success of our business, of our customer and of national phylogeny. ?Maintaining the highest ethical standards and a community responsibility worthy of a tip corporate citizen. ? never-endingly improving outputivity and receiptsability, and thitherby enhancing sh beholder value. . 1. 3 Vision To be in the front of national development by providing all the customers inspirational strength, dependable support and the most comprehensive range of business solution through our team of professional that work pass ionately to be outstanding in everything we do. 2. 1. 4 Goal of the Bank To sh be a signifi washbowlt portion of the banking sectors by utilizing available manpower and alike state of the art technology for increase the sh atomic number 18holders wealth. i. Long endpoint Goal To maximize the wealth of the shargonholders. ii. picayune endpoint GoalTo earn satis factory rate of return on investment by providing wide range of banking go. 2. 1. 5 Board of Directors At present there are 26 members in the Board of Director. Out of 26 members 23 of them are the sponsor of the shareholder and 3 of them are publicly nominated as the equity participants from peachy market place wipe out included them. moreover the members are obliged to concord annul oecumenic meeting and adduce the dividend abideout schedule on due time. Moreover, the committee selected by shareholders represents soul ashes that and so looks after the hitchic issue with the management and tries to solve t he problem. . 1. 6 Management of NCC assert For any financial and non-financial organization, Management is the most semiprecious and definitive resources of any kind of organization. And, a well-organize management provides the organization to disturb its last goal. Management means planning, organizing, staffing, directing and tickling of all financial and non-financial resources of an organization. Different aspects of management practice in NCC hard currencybox planning, organizing, staffing, directing & controlling, gentleman resources practices and recruitment finally. 2. 1. Features of NCCBL Bank is an intermediary institute. Like opposite commercial bank NCCBL similarly has some special features. They are as follows ii. Legal Entity It is dictatorial matter for a bank to achieve sub judice entity. The stronger legal entity leads to impelling banking program. NCCBL has a strong legal entity. iii. Organizational Structure NCCBL has a well-set organizational struc ture. Organizational structure is a precondition of effective banking activities. iv. fiscal Solvency Though NCCBL is a new bank, its ratio of liquidity is well and strong.So, the clients trounce greater confidence in the bank. v. Location of The Bank Location is very useable for bank. The Head sureness and the branches of NCCBL are located in the cardinal point of the chief city and the other district towns. vi. Relation with the Central Bank As the NCCBL is the government-registered bank, so it maintains a friendly behavior with the Bangladesh Bank. vii. Security the NCCBL is all in all a secured bank. The clients of the bank guide a heavy bail on their deposition. viii. Management of the Bank The executives and the officers of NCCBL are very undergo.Maximum executives are ex-government bank officers. NCC bank is a progressive commercial bank in privet sector in Bangladesh. It creates a new opportunities for its clients. It obligates customized service and harmonious ban ker-client relationship. It contri hardlyes towards formation of national capital, suppuration of saving and investment in trade, commerce and industrial sectors. It provides various types of commercial banking and go to the customer of all strata in the society with in the judicial admission laid down in the Bank Company Act 1991. Rules and regulations ramed by the Bangladesh bank from time to time. 2. 1. 8 worry Operation National trading and cite Bank Limited emerged as bank in the country on 17th May 1993 out of a great miffed situation encounter by set while National creed Limited. However the institution survived the ordeals and come out as a fledged commercial bank. The company raised its Authorized Capital to Tk. 750 million as per guidelines set out by the Bangladesh Bank. The paid up capital was frosty at Tk. 480. 48 million as against Tk. 429. 00 million. 2. 1. 9 Trade finance and Correspondent BanksSuccessful companies today are fully aware that they need to be able to rely on the work of a bank that can handle external trade with a good hand. Ever since its transformation into a full fledged bank in 1993, NCC bank has been an complaisant Trade Finance bank. With a highly professional team experienced and competent professionals we are able to provide a wide range of operate to companies engaged in international trade. NCC Bank has withal positioned itself as an established pressman bank. Through a worldwide network of 260 analogous banks NCC Bank is present in all expose areas of the globe.Our ambit of correspondent includes top ranking international banks with a global reach. 2. 1. 10. subsectiones of NCCBL NCCBL has 87 (Eighty Seven) branches all over in Bangladesh. 2. 1. 11. Performance of the Bank The bank whitethorn take hold its strong image in the mind of the customers and shareholders as a leading financial institution despite serious competition from both topical anesthetic and foreign banks operating in the countr y. Sill they are increasing their earnings. Its commencement profit was Tk. 624. 94 million in 2003, which were Tk. 2371. 68 million after tax in 2010. 2. 1. 12 Authorize CapitalThe authorize capital of the bank is Tk. 10,000. 00 million in the year 2010. 2. 1. 13. Paid-up Capital The bank raises its paid-up capital from Tk. 480. 48 million to Tk. 4501. 25 million for 2002 to 2010. With the increase of paid-up capital the capital based of the bank has come strong. Reserve Fund and former(a) Reserves The reserve fund of the bank increased of Tk. 5771. 09 million in the year 2010 as against Tk. 4371. 62 million of previous year. 2. 1. 14 corporate Mission To provide high quality financial services in exportationationing and import trade. To provide excellent quality node service. To maintain Corporate and business ethics. To become a trusted repository of customers bills and their financial advisor. To make our stock pukka and rewarding to the customers/share holders. To unc over team spirit and professionalism. To withdraw a Sound Capital Base. 2. 1. 15 Corporate Culture This bank is one of the most disciplined Banks with a distinctive corporate culture. present we believe in shared out meaning, shared run intoing and shared sense fashioning. Our people can see and understand events, activities, objects and situation in a distinctive way.They mould their manners and etiquette, share individually to suit the shoot for of the Bank and the needs of the customers who are of prevailing importance to us. The people in the Bank see themselves as a tight knit team/family that believes in working together for harvest-tide. The corporate culture we belong has not been imposed it has rather been achieved through our corporate conduct. 2. 1. 16 SWOT Analysis SWOT analysis is the detailed study of an organizations exposure and potential in perspective of its strength, weakness, opportunity and threat.This facilitates the organization to make their existing line of performance and also know the future to improve their performance in comparison to their competitors. As though this tool, an organization can also study its current position, it can also be considered as an all important(p) tool for making changes in the strategic management of the organization. Strengths NCC cashbox Limited has already established a fond reputation in the banking industry of the country. It is one of the leading private sector commercial banks in Bangladesh. The bank has already shown a tremendous growth in the profits and deposits sector. NCC BANK has provided its banking service with a top leaders and management position. NCC BANK Limited has already achieved a high growth rate accompanied by an impressive profit growth rate in 2001. The effect of deposits and the loans and advances are also increasing rapidly. NCC BANK has an interactional corporate culture. The working environment is very friendly, interactive and informal. And, there are no h idden barriers or boundaries while communicate between the superior and the employees. This corporate culture provides as a great motivation factor among the employees. NCC BANK has the reputation of being the provider of good quality services too its, potential customers. Weaknesses The main important thing is that the bank has no clear mission statement and strategic plan. The bank doesnt have any long-term strategies of whether it wants to focus on sell banking or become a corporate bank. The path of the future should be determined now with a strong feasible strategic plan. The bank failed to provide a strong quality-recruitment policy in the lower and some mid take aim position. As a result the services of the bank seem to be Deus in the present days. _The poor service quality has become a major problem for the bank. The quality of the service at NCC BANK is high than the Dhaka Bank, NCC BANK or Dutch Bangla Bank and so on But the bank has to compete with the Multinational B ank located here. Some of the job in NCC BANK has no growth or advancement path. So lack of motivation exists in persons filling those positions. This is a weakness of NCC BANK that it is having a group of unsatisfied employees. __In harm of promotional sector, NCC BANK has to more emphasize on that. They have to follow aggressive marketing campaign. _The negligence risks of all term loans have to be minimized in rear to sustain in the financial market. Because of default risk the organization whitethorn become bankrupt. NCC BANK has to remain vigilant about this problem so that proactive strategies are taken to minimize this problem if not eliminate. Opportunities In order to reduce the business risk, NCC BANK has to expand their business portfolio. The management can consider options of starting merchant banking or diversify into leasing and policy sector. The activity in the secondary financial market has direct touch on the primary financial market.Banks operate in the prim ary financial market. Investment in the secondary market governs the national economic activity. employment in the national economy controls the business of the bank. Opportunity in sell banking lies in the fact that the countrys increased population is stepwise learning to adopt consumer finance. The bulk of our population is middle class. Different types of retail alter products have great appeal to this class. So a wide variety of retail lending products has a very large and slow pregnable market. A large number of private banks coming into the market in the recent time.In this competitive environment NCC BANK must expand its product line to enhance its sustainable competitive advantage. In that product line, they can participate the ATM to compete with the local and the foreign bank. They can introduce course credit card and account card system for their potential customer. In addition of those things, NCC BANK can introduce special corporate organisation for the corpo rate customer or officer who have an income level high from the service holder. At the said(prenominal) time, they can introduce scheme or loan for various service holders.And the scheme should be go bad match to the professions, such as engineers, lawyers, doctors. Threats any sustaining multinational banks and upcoming foreign and private banks pose significant threats to NCC BANK Limited. If that happens the intensity of competition will get on further and banks will have to develop strategies to compete against these local and foreign banks. Other commercial banks are offering higher lucre that whitethorn create problem for NCCBL to retain their experienced managers and executives. ? MAJOR PRODUCTS OF NCC BANK LTD. 3. 0 PRODUCTS OF NCC BANKBefore discussion about products of NCC Bank, we have to understand what banks products are. Bank is a service oriented industry and deals with various financial products and services for financial gains. Financial products and service s products that a bank offers to its customers are in the offset printing place assort as under a) doctor Products to fork up finances. b) bestow products for financial gains c)Money Transmission products d) supranational business products e)Special tip off earning service3s f)social services products Products that are marketing by NCC Bank are as under 3. 1. 1. charge Products submit is the lifeblood of a bank. From the history and origin of the banking system we know that deposit collection is the main function of a bank. stand deposits mathematical functions of collecting deposit procedure are almost same in the entire bank and the branches as well. The deposits that are authoritative by NCC BANK like other banks may be classified into authentic Deposit Short term deposit Saving Deposit Fixed deposit Special Saving Scheme Deposit (SSS) 3. 1. 2. Lending Products Bank has its own principle about the credit introductory or loan to the ustomers, but lending product of a b ank or of a branch is equal important to verify the outstanding at the end of any fiscal year. Every bank yields special attention about their lending products, because these products are handed over on a regular basis. Continuous impart a. Secured Overdraft against Financial Obligation SOD (FO) boards allowed to individual/firms against financial obligation (i. e. lien of FDR/PSP/BSP/Insurance Policy etc. ) and against assignment of workings order for achievement of contractual works fall under this manoeuver. It is a continuous advance facility.By this agreement, the banker allows his customer to overdraft his current beak up to his credit limits sanctioned by the bank. The interest is shootd on the essence, which he withdraws, not on the sanctioned fall. NCC BANK sanctions SOD against disparate security. b. Secured Overdraft against Work order/ Real body politic etc SOD (G) attacks allowed against assignment of work order or execution of contractual works move under this liberty chit. This advance is principally allowed for a expressed period and specific purpose i. e. it is not a continuous credit. It falls under the sept others. c. hard currency reference work (Hypothecation)Advances allowed to individual /firm for trading as well as wholesale purpose or to industries to meet up the working capital requirements against hypothecation of goods as primary security fall under this type of lending. It is a continuous credit. It is allowed under the category (i) commercial Lending when the customer is other than a industry and (ii) Working Capital when the customer is an industry. d. bills Credit (Pledge) Financial accommodations to individual / firm for trading as well as sole-sale purpose or to industries as working capital against pledge of goods as primary security fall under this head on advance.It is also a continuous credit and like the supra allowed under the categories (i) Commercial Lending and (ii) Working Capital. e. exportatio n Cash Credit (ECC) Financial accommodation allowed to a ships company for export of goods falls under this head and is categorized as Export Credit, The advances must be fixd out of export yield within clxxx days. call for bring need contribute (Forced LIM, BLC, drift, IBP etc). Overdue period will be chronicleed from the day by-line the date of expiry of such loan.? Less than 6 months ? 6 months or more but less than 9 months 9 months or more but less than 12 months ?More than 12 monthsUnclassified Sub-standard provisional Bad/loss 1% 20% 50% 100% a. give General Short term, Medium term & Long term loans allowed to individual /firm /industries for a specific purpose but for a definite period and in the main repayable by installments fall under this head . this type of lending are mainly allowed to accommodate pay under the category (a) Large & Medium Scale industry and (b) Small & cottage Industry . Very term pay for (a) Agriculture & (b) Others are also included h ere . b. Demand Loan Against Ship breakingThis type of loans does not exercise in this branch, but being exercised to other branch that provide advances against ship breaking. c. allowance Against Documents (PAD) Payment made the bank against lodgment of expatriation documents of goods import through L. C. falls under this head. It is an interim advance machine-accessible with import and is generally liquidated shortly against defrayals usually made by the party for retirement of the documents for re involve of imported goods from the customs authority. It falls under the category Commercial Lending . d. Loan against consequenceed Merchandise (LIM)Advances allowed for retirement of merchant marine documents and release of goods imported through L. C. taking effective control over the goods by pledge in brokerage house under banks jug & key fall under this type of advance. This is also a short-lived advance connected with import which is know as post-import finance and falls under the category Commercial Lending. e, Loan against desire Receipt (LTR) Advance allowed for retirement of shipping documents and release of goods imported through L. C. without effective control over the goods delivered to the customer falls under this head.The goods are handed over to the importer under trust with the arrangement that sale proceeds should be deposited to liquidate the advances within a given period. This is also a flitting advance connected with import and known as post-import finance and falls under the category Commercial Lending. g. boxing Credit Advance allowed to a party against specific L. C/firm contract for processing/ natespacking of goods to be exported falls under this head and is categorized as Packing Credit. The advances must be adjusted from proceeds of the relevant exports within 180 days. i. remote Documentary Bills grease ones palmsd (FDBP)Payment made to a customer through procure/ negotiation of a foreign documentary bills falls un der this head. This temporary advance is adjustable from the proceeds of the shipping/export documents. Its falls under the category Export Credit j. Local Documentary Bills Purchased (LDBP/IDBP) Payment made against documents representing sell of goods to local export oriented industries which are deemed as exports and which are denominated in Local currency/ foreign currency falls under this head. The bill of exchange is held as the primary security. This temporary liability is adjustable from the proceeds of the bills. . Festival Business Loan. This type of loan are generally sanctioned depending on the occasion, more than two festival business loans are generally sanctioned in an annum. Term Loan a. Project Loan NCC BANK offers different conventional credit/investment schemes and the Banking products to their customers. So far loans and advances portfolio includes Project Finance in the form of Term Loan, Real acres Finance, Secured Overdraft against FDR, different security auth entications, working capital in the form of Cash Credit Hypothecation, Import Trade Finance in the form of PAD/LIM/TR etc.NCC BANK considers the loans, which are sanctioned for more than one year as term loan. Under this facility, an go-ahead is financed from the starting to its finishing, i. e. from installation to its production b. emigration Loan Considers the loans, which are sanctioned for the purpose of delivering the goods on to its final end point, its generally used in the form of inland exporting or rachis to back letter of credit. c. crime syndicate Building Loan Loans allowed to individual/ encipherprise construction of house (residential or commercial) fall under this of advance.The amount is repayable by monthly installment within a qualify period, advances are known as Loan (HBL GEN). d. Small Business Loan Short term and long term loans allowed to individual/ firms / industries for a specific purpose but a definite period and generally repayable by the install ments fall under this head. These types of lending are mainly allowed to accommodate backing under the categories. Small and Cottage Industries, Very often term financing for agriculture and others are also included here. e. Consumer Finance LoanNCCBL keeping in mind the economic development and helping the set income group in fulfilling their demand to upgrade the standard of living will continue originally consumer finance scheme for Household appliances, Furniture & Fixture, Air Conditioner, Fax Machine, take cycle/Car, Cellular phone, and Other equipment f. Lease Finance NCCBL to keep its parcel to the growth of national GDP, accelerate the total economic development by infusing the fund in productive sector in more efficient and effective way diversity its portfolio and satisfy the customers need would go for lease finance for Setting up of small and cottage industries/Projects, BMRE of existing projects Transports (roads/marine), aesculapian equipment/surgical/clinical/l ab equipment/x-ray machine etc, Construction equipment and other fixed assets of other productive and service oriented ventures. g. Personal Loan To meet emergency financial requirement especially for medical give-and-take/surgical operation, marriage, admission of children/ educational expenses, maternity the loan facility may be extended. 3. 1. 3. Money transmission Product Carrying cash bullion is troublesome and risky.Thats why money can be transferred from one place to another through banking channel. This is called remitment. Remittances of funds are one of the most important aspects of the Commercial Banks in rendering services to its customers. Payment order/security deposit receipt (PO/SDR) This term will be discussed in the general activities section under remittance subdivision. Demand Draft (DD) This term will also been discussed in the overall activities section under remittance part. telegraphic Transfer (TT) This is also a common term that in the remittance sec tion as well. . Travelers Cheque Travelers Cheque (TC)Issue of TCTC is useful to traveler abroad. Customers can encash the TC in abroad from the drawee bank. TC is alternate to holding cash and it provides better security than holding cash in hand. Buying Of TCIf any unused leaf of TC is surrendered bank buys it from the customer. All wagess are made in local currency. Banks generally buy nevertheless those TC. 3. 1. 4. International Business Products In banks when we jaw of international business products, we associate to the general mechanism by which a bank converts currency of one country into that of another.Foreign Exchange Department (FED) is the international department by which a bank or an AD branch transects with other international bank or of a brach. Bangladesh Bank issues license to scheduled banks to deal with foreign exchange. These banks are known as Authorized Dealers. If the branch is reliable trader in foreign exchange market, it can remit foreign exchang e from local country to foreign countries by transacting their international business products. So NCC BANK, spark advance branch is an authorized dealer. Letter of Credit (L/C) dressing to back Letter of credit (BTB L/C) Buying and selling of foreign exchange Foreign demand draft (FDD) Foreign Demand DraftBank issue Demand Draft in favor of purchaser or any other according to instruction of purchaser. The payee can collect it for the drawee bank in which the number bank of Demand Draft holds its NOSTRO poster. Bank also makes hire on DD drawn on this bank by its foreign counterbalance bank through the VOSTRO flyerancy. Foreign telegraphic transfer (FTT) outbound remittance covers gross revenue of foreign currency through exit foreign T. T. Drafts, Travelers Check etc. as well as sell of foreign exchange underL/C and against import bills retired. 3. 1. 5. Special lean earning products NCC Bank considers the special earning product to the different consumer, as it to play a comprehensive role in financing the bank product. Among those following are some issues relate to special fee earning product Bank guarantee Foreign bank Guarantee (F. B/G) Underwriting Brokerage House and locker Service Issuances of Sanchaya Patra, Wages Earners Development Bond, National Investment Bond, Prize Bond are some special earning fee product of NCC bank. 3. 1. 6. Social Service ProductsNCC Bank Considers several service products by looking at the social point of view, At this competitive edge, banking index have reached to preserve its market share and to penetrate new market share through diversification of its product range. Following are the services that are designed to provide for society Sale of Lottery Tickets for collection of fund for social establishment Collection of Zakat Fund Collection of haj Deposit 3. 2 CREDIT POLICY & CREDIT OPERATION OF NCCBL Credit policy is a guideline of a financial institution to determine- Who shall get credit (eligibility to g et loan) How much to lend (Amount of lending) Why to lend (Purpose of lending) Where to finance (Portfolio Management depending upon profitability and requirement for participation on socio economic benefits) Credit division of a bank especially acts as a key financial machine to haunt for earning revenue of a bank to achie3ve its ultimate goal for profut maximization with minimal risk maintaining balanced portfolio management. 3. 3 WHERE TO finance (FINANCING ACTIVITIES OF NCC BANK) Financial activities of a bank depend upon its portfolio management of its funds through deposit.Our lending policy would be within the broad policy gear up work envisaged above. Banks lending activities may be classified into the following broad segments. 1. Trade and Commerce 2. Industries 3. Lease financial support 4. Consumer Financing 5. Real Estate & Civil Construction 6. Agro based 7. Small Business Loans 8. Personal Loans 3. 4 Security Policies The term loans, if any extended by the bank shall gave to be secured by first charge mortgage on the fixed asset coverage leaving a margin of at leas 25% depending upon the viability of the project.Consideration in this regard will vest purely on viability criteria irrespective of bank client-relationship. The determinants in this respect are debt service coverage, debt-equity ratio, and fixed coverage to term loan with a margin of 25-30% minimum. The working capital may be additionally covered by initiatory charge mortgage of the fixed asset or by sharing first mortgage ranking PARIPASU with the financial institutions providing term loan. Decision is this regard shall be at the sole discretion of the bank. GENERAL BANKING OF NCC BANK LTD. 4. 0 FUNCTIONS OF NCC BANK LIMITED 4. 1 GENERAL BANKINGGeneral banking department is the heart of all banking activities. This is the busiest and important department of a branch, because funds are mobilized, cash proceeding are made elucidation, remittance and accounting activities are done he re. Since bank is limit to provide the services everyday, general banking is also known as retail banking. In NCC BANK LTD Principal Branch, the following departments are under general banking section A)Account start section B)Deposit Section C)Cash Section B)Remittance section C) change section D)Accounts section 4. 1. 1 A) ACCOUNT OPENING SECTIONAccount open airing is the gateway for clients to enter into business with bank. It is the foundation of banker customer relationship. This is one of the most important sections of a branch, because by opening accounts bank mobilizes funds for investment. Various rules and regulations are kept up(p) and various documents are taken while opening an account. A customer can open different types of accounts through this department. Such as 1. Current Deposit. 2. Savings account. 3. Short notice deposit (SND) Types of Accounts with Terms and Conditions Current Deposit Current account is purely a demand deposit account.There is no restraint on withdrawing money from the account. It is basically justified when funds are to be collected and money is to be paid at patronage interval. Some important points have been discussed in the project part. Savings Bank Account This deposit is primarily for small-scale savers. Hence, there is a restriction on withdrawals in a month. Heavy withdrawals are permitted only against antecedent notice. Some Important Points have been discussed in project part. SND (Short Notice Deposit) Account Normally various big companies, organizations, Government Departments keep money in STD account.Frequent withdrawal is discouraged and requires prior notice. The deposit should be kept for at least seven days to get interest. The interest offered for STD is less than that of savings deposit. Interest is calculated based on daily minimum product and paid two times in a year. Interest rate is 6. 00%. Table-01 Account interruption procedure Step 1The account should be correctly introduced by Any on e of the following ? An existing Current Account holder of the Bank. ?Officials of the Bank not below the rank of an Assistant officer. ?A respectable person of the locality well known to the Manager/Sub-Manager of he Branch concerned. Step 2Receiving filled up application in banks prescribed form mentioning what type of account is desired to be opened Step 3? The form is filled up by the applicant himself / herself ? twain copies of passport size photographs from individual are taken, in case of firms photographs of all partners are taken ? Applicants must submit required documents ? masking must sign specimen signature sheet and give mandate ? Introducers signature and accounts number verified by legal officer Step 4Authorized Officer accepts the applicationStep 5Minimum balance is deposited only cash is accepted Step 6Account is opened and a Cheques book and pay-in- parapraxis book is given Documents required for opening account ? Individual / Joint Account 1. Introduction of the account. 2. devil photographs of the signatories punctually show by the introducer. 3. Identity (copy of passport). 4. Joint Declaration coordinate (For give voice a/c only). 5. Employees certificate (in case of service holder). ? Partnership account 1. Introduction of the account. 2. Two photographs of the signatories punctually attest by the introducer. 3.Partnership letter duly signed by all partners (Sign should be exchangeable as stated in Partnership Deed). 4. Partnership Deed duly sure by Notary public. 5. accommodation (If any). 6. Updated Trade license. ? Proprietorship account 1. Introduction of the account. 2. Two photographs of the signatories duly attested by the introducer. 3. Valid copy of Trade manifest. 4. Rubber stamp. 5. TIN number certificate. 6. Identity (Copy of passport). 7. Permission letter from DC/ Magistrate (in case of newspaper) ? Limited company 1. Introduction of the account. 2.Two photographs of the signatories duly attested by the Int roducer. 3. Valid copy of Trade License. 4. Board resolution of opening A/C duly certified by the Chairman/Managing Director. 5. Certificate of Incorporation. 6. Certificate of Commencement (In case of Public limited company). 7. Certified (joint stock) consecutive copy of the Memorandum and Article of Association of the Company duly attested by Chairman or Managing Director. 8. List of directors along with designation & specimen signature. 9. Latest certified copy of Form xii (to be certified by register of joint stock companies) (In case of Directorship change). 0. Rubber postage (Seal with designation of each person) 11. Certificate of adjustment (In case of Insurance Company Obtained from department of Insurance from the Peoples Republic of BD). ? Club / societies account 1. Introduction of the account. 2. Two photographs of the Signatories duly attested by the introducer. 3. Board Resolution for go-ahead A/C duly certified by President/ Secretary. 4. List of vivacious Ma naging Committee. 5. Registration (if any). 6. Rubber Stamp. 7. Permission letter from Bureau of N. G. O. (In case of N. G. O. A/C). Closing of an accountThe mop up of an account may happen, ?If the customer is desirous to close the account, ?If the NCC BANK finds that the account is inoperative for a long duration. ?If the court of NCC BANK issues garnishee order. A customer may close his/her account any time by submitting an application to the branch. The customer should be asked to draw the final memorise for the amount standing to the credit of his/her account less the amount of closing an other incidental charge and surrender the unused check leaves. The account should be debited for the account closing charge etc. nd the authorized officer of the bank should destroy unused check. In case of joint account the application for closing the account should be signed by the joint account holder. The fee for closing of an account is Tk. 50. 4. 1. 2 B) local anaesthetic REMITTANCE Carrying cash money is troublesome and risky. Thats why money can be transferred from one place to another through banking channel. This is called remittance. Remittances of funds are one of the most important aspects of the Commercial Banks in rendering services to its customers. Types of remittance ?Between banks and non banks customer Between banks in the same country ?Between banks in the different centers. ?Between banks and central bank in the same country ?Between central bank of different customers. The main instruments used by the NCC BANK of remittance of funds are ?Payment order (PO) ?Demand Draft (DD) ? telegraphic Transfer (TT) So the basic three types of local remittances are discussed below Table- 02 PointsPay OrderDemand DraftTT ExplanationPay Order gives the payee the remedy to claim payment from the proceeds bankDemand Draft is an order of issuing bank on another branch of the same bank to pay specified sum of money to payee on demand. military issue branch pass s another branch to pay specified money to the specific payee on demand by Telegraph /Telephone Payment fromPayment from issuing branch onlyPayment from ordered branch Payment from ordered branch Generally used to Remit fund in spite of appearance the clearinghouse area of issuing branch. Outside the clearinghouse area of issuing branch. Payee can also be the purchaser. Anywhere in the country Payment Process of the remunerative bankPayment is made through clearing 1. actualise that the DD is not forged one. 2. Confirm with sent advice 3. Check the Test Code 4. tiller payment1.Confirm issuing branch 2. Confirm Payee A/C 3. Confirm amount 4. Make payment 5. Receive advice Charge Only commission burster + telex chargeCommission + Telephone Term Deposit Receipt The Local Remittance section of NCC BANK Motijheel Branch also issues TDR. They are also known as time deposit or time liabilities. These are deposits, which are made with the bank for a fixed period, specified in advance. Th e bank need not maintain cash reserves against these deposits and therefore, the bank offers higher of interest on such deposits. Term Deposits These rates are not negotiable.In this table we can find out the role that is given by the bank for specific period of time to the customer. 4. 1. 3 CLEARING SECTION The amount of Cheques, Pay Order (P. O), and Demand Draft (D. D) Collection from other banks on behalf of its customer is a basic function of a Clearing Department. Clearing Clearing is a system by which a bank can collect customers fund from one bank to another through clearing house. Clearing House Clearing House is a place where the representatives of different banks get together to contract and deliver Cheques with another banks. Normally, Bangladesh Bank performs the Clearing House in Dhaka, Chittagong, Rajshahi, Khulna & Bogra. Where there is no branch of Bangladesh Bank, Sonali bank arranges this function. Member of Clearing House NCC BANK limited is a scheduled Bank. A ccording to the Article 37(2) of Bangladesh Bank Order, 1972, the banks which are the member of the clearinghouse are called as Scheduled Banks. The scheduled banks clear the go over drawn upon one another through the clearinghouse. Types of ClearingA)Outward Clearing When the Branches of a Bank get wind run downs from its customers drawn on the other Banks within the local clearing zone for collection through Clearing House, it is Outward Clearing. B) interior Clearing When the Banks receive cheque drawn on them from other Banks in the Clearing House, it is secret Clearing. Who will deposit cheque for Clearing Only the regular customers i. e. who have Savings, Current, STD & Loan Account in the bank can deposit cheque for collection of fund through clearing house. Responsibility of the concerned officer for the Clearing Cheque and being work with department, following are the issues )Crossing of the cheque. 2)(Computer) add-in of the cheque. 3)Clearing seal & proper endorsemen t of the cheque. 4)Separation of cheque from deposit slip. 5)Sorting of cheque foremost bank wise and then on branch wise. 6)Computer print 1st branch wise & then bank wise. 7)Preparation of 1st Clearing House computer validation sheet. 8)Examine computer validation sheet with the deposit slip to justify the computer posting 9) Copy of computer posting in the floppy disk. Bills Collection In modern banking the mechanism has become composite plant as far as smooth transaction and safety is concerned.Customer does pay and receive bill from their counterpart as a result of transaction. Commercial banks duty is to collect bills on behalf of their customer. Types of Bills for Collection i. Outward Bills for Collection (OBC). ii. Inward Bills for Collection (IBC). What is OBC? OBC means Outward Bills for Collection . OBC exists with different branches of different banks outside the local clearinghouse. Normally two types of OBC 1)OBC with different branches of other banks 2)OBC with dif ferent branches of the same bank Procedure of OBC 1)Entry in the OBC register. 2)Put OBC number in the cheque. ) Crossing seal on the left corner of the cheque & payees account will be credited on realization seal on the back of the cheque with signature of the concerned officer. 4)Dispatch the OBC cheque with forwarding. 5)Reserve the photocopy of the cheque, deoxycytidine monophosphate copy of the forwarding and deposit slip of the cheque in the OBC file. Inward bills for collection (IBC) When the banks collect bills as an agent of the collecting branch, the system is known as IBC. In this case the bank will work as an agent of the collection bank. The branch receives a forwarding letter and the bill. Procedure of IBC 1.IBC against OBC To receive the OBC cheque first we have to give entry in the IBC story . The IBC number should put on the forwarding of the OBC with date. 2. Deposit of OBC amount OBC cheque amount is put into the sundry deposit-sundry Creditors account, build u p debit & credit coupon of it. If the OBC cheque is reward, diffuse credit advice (IBCA) with signature & advice number of the concern branch for the OBC amount. 3. If the OBC cheque is dishonored, the concerned branch is informed about it. 4. Again place in the clearing house or drive the OBC cheque with Return Memo to the issuing branch according to their information. . 1. 4 D) ACCOUNTS SECTION Accounts Department is called as the nerve Centre of the bank. In banking business, transactions are done every day and these transactions are to be recorded properly and systematically as the banks deal with the depositors money. . Improper recording of transactions will lead to the mismatch in the debit side and in the credit side. To avoid these mishaps, the bank provides a separate department whose function is to check the mistakes in passing vouchers or wrong entries or fraud or forgery.This department is called as Accounts Department. If any discrepancy arises regarding any trans action this department report to the concerned department. Besides these, the branch has to prepare some internal statements as well as some statutory statements, which are to be submitted to the Central Bank and the Head Office. This department prepares all these statements. Workings of this department Packing of the correct vouchers according to the debit voucher and the credit voucher Recording the transactions in the cashbook. Recording the transactions in general and subsidiary ledger Preparing the daily position of the branch comprising of deposit and cash Preparing the daily Statement of Affairs showing all the assets and liability of the branch as per General record book and Subsidiary Ledger separately Making payment of all the expenses of the branch Recording inters branch fund transfer and providing accounting treatment in this regard. Preparing the monthly salary statements for the employees Preparing the weekly position for the branch which is sent to the Head Office to maintain Cash Reserve Requirement (C.R. R) Preparing the monthly position for the branch which is sent to the Head Office to maintain Statutory Liquidity Requirement (S. L. R) Make charges for different types of duties Preparing the budget for the branch by fixing the target regarding profit and deposit so as to take prerequisite steps to generate and mobilize deposit. Checking of Transaction List Recording of the vouchers in the Voucher Register 4. 2 E. FOREIGN EXCHANGE Foreign exchange is the means and methods by which rights to wealth in a countrys currency are converted into rights to wealth in another countrys currency.In banks when we talk of foreign exchange, we refer to the general mechanism by which a bank converts currency of one country into that of another. Foreign Exchange Department (FED) is the international department Bangladesh Bank issues license to scheduled banks to deal with foreign exchange. These banks are known as Authorized Dealers. If the branch is auth orized dealer in foreign exchange market, it can remit foreign exchange from local country to foreign countries. So NCC BANK, Principal branch is an authorized dealer. There are three kinds of foreign exchange transactionA)Import B)Export C)Remittance. 4. 2. 1 A) upshot To import, a person should be competent to be an importer. According to Import and Export Control Act, 1950, the Office of Chief Controller of Import and Export provides the registration (IRC) to the importer. In an international business environment, purchasers and sellers are generally undiscovered to each other. So seller of goods always seeks security for the payment of his exported goods. Bank gives export guarantee that it will pay for the goods on behalf of the buyer if the buyer does not pay. This guarantee is called Letter of Credit.Thus the contract between importer and exporter is given a legal shape by the banker by Letter of Credit. 4. 2. 1. 1Letter of Credit Definition A letter of credit is a letter issued by a bank (know as the opening or the issuing bank) at the instance of its customer (known as the opener) addressed to a person (beneficiary) undertake that the bills drawn by the beneficiary will be duly honored by it (opening bank) provided certain conditions mentioned in the letter gave been complied with. Table- 03 ImporterWho applies for L/C Issuing BankIt is the bank which opens/issues a L/C on behalf of the importer.Confirming Bank It is the bank, which adds its stop to the credit and it, is done at the request of issuing bank. Confirming bank may or may not be advising bank. Advising or Notifying Bank It is the bank through which the L/C is advised to the exporters. This bank is real situated in exporters country. It may also assume the role of confirming and / or negotiating bank depending upon the condition of the credit. Negotiating Bank It is the bank, which negotiates the bill and pays the amount of the beneficiary. The advising bank and the negotiating bank may or may not be the same.Sometimes it can also be confirming bank. Accepting BankIt is the bank on which the bill will be drawn (as per condition of the credit). normally it is the issuing bank. Reimbursing BankIt is the bank, which would reimburse the negotiating bank after get payment instructions from issuing bank. 4. 2. 1. 3 Steps for import L/C Operation 8 steps operation Step 1 Registration with CCI&E For savory in international trade, every trader must be first registered with the Chief Controller of Import and Export. By paying specified registration fees to the CCI&E. he trader will get IRC/ERC (Import/Export Registration Certificate), to open L/C with bank, this IRC is must. Step 2 Determination terms of credit The terms of the letter of credit are depending upon the contract between the importer and exporter. The terms of the credit specify the amount of credit, chance upon and address of the beneficiary and opener, high-pitched of the bill of exchange, period and mode of expeditiousness and of destination, nature of credit, expiry date, name and number of sets of shipping documents etc. Step 3 Proposal for Opening of L/C To have an import LC limit an importer submits an application to department to NCC BANK.The proposal contains the following particulars Full particulars of the bank account Nature of business Required amount of limit Payment terms and conditions Goods to be imported Offered security Repayment schedule Step 4 Application by importer to the banker to open letter of credit For opening L/C, the importer is required to fill up a prescribed application form provided by the banker along with the following documents Table- 04 1. L/C Application form 7. Authority to debit account 2. Filled up LCA form 8. Filled up amendment request Form 3. Demand Promissory Note 9. IMP form 4. ro-forma greenback 10. Insurance cover note and money receipt. 5. Tax Identification number 11. Membership certificate 6. Import registration certifica te 12. Rate magnetic declination undertaking Step 5 Opening of L/C by the bank for the opener Taking filled up application form from the importer. Collects credit report of exporter from exporters country through his foreign correspondence there. Opening bank then issues credit by air broadcast/TELEX/ lively followed by L/C advice as asked by the opener through his foreign correspondent or branch as the case may be, at the place of beneficiary.The advising bank advises the L/C to the beneficiary on his own form where it is addressed to him or merely hand over the original L/C to the beneficiary if it is so addressed. Step 6 lode of goods and lodgment of documents by exporter Then exporter ships the goods to the destination of the importer country. Sends the documents to the L/C opening bank through his negotiating bank. Generally the following documents are sent to the Opening Banker with L/C Table- 05 1. Bill of Exchange 6. Packing List 2. Bill of despatch 7. Advice Details o f Shipment 3. Commercial Invoice 8. Pre-shipment follow-up Certificate . Certificate of Origin 9. Vessel peculiar(prenominal) 5. A certificate stating that each packet contains the description of goods over the packet. 10. Shipment Certificate Step 7 Lodgment of Documents by the opening Bank from the negotiating bank After receiving the documents, the opening banker scrutinizes the documents. If any discrepancy found, it informs the importer. If importer accepts the fault, then opening bankers call importer retiring the document. At this time many thing can happen. These are indicated in the following Discrepancy found but the importer accepts no problem occurs in lodgment. Discrepancy found and importer not agreed to accept In this case, importer protest and send back all the documents to the exporter and request his to make in the specified manner. Here banker is not bound to pay because the documents send by exporter is not in accordance with the terms of L/C. Documents are OK but importer is willing to retire the documents In this case bank is obligated to pay the price of exported goods. Since importer did not pay for bill of exchange, this payment by bank is one kind of credit to the importer and this credit in banking is known as PAD. Everything is O. K. but importer fails to clear goods from the port and request bank to clear In this case banks clear the goods and takes delivery of the same by paying customs duty and sales tax etc. So, this spending is debited to the importers account and in banking it is called LIM. Step 8 Retirement The importer receives the breathing place and gives necessary instruction to the bank for retirement of the import bills or for the disposal of the shipping document to clear the imported goods from the customs authority.The importer may instruct the bank to retire the documents by debiting his account with the bank or may ask for LTR (Loan against Trust Receipt). 4. 2. 1. 4 Accounting Procedure in case of L/C Opening When the officer thinks fit the application to open a L/C, giving the following entries- creates the following charges- Table- 06 ParticularsDebit/ CreditCharges in Taka Customers A/CDebit L/C Margin A/CCredit Commission A/C on L/CCredit50% VATCredit15% on commission SWIFT ChargeCredit3000/= DatamaxCredit1000/= StampCredit150/= PostageCredit300/= DHL/CourierCredit1500 4. 2. 1. Amendment of L/C After opening of L/C some times alteration to the original terms and conditions become necessary. These amendments involve changes in a. Unit price b. Extension of validity o the L/C c. Documentary requirements etc. Such amendments can be moved(p) only if all the concerned parties agree i. e. the beneficiary, the importer, the issuing bank and the advising bank. For any amendment the importer must request the issuing bank in writing duly supported by revised indent/ Proforma invoice. The issuing bank then advises the required amendment to the advising bank.L/C amendment commission i ncluding postage is charged to the clients A/C. 4. 2. 1. 6 Loan against Trust Receipts (LTR) Advance against a Trust Receipt obtained from the Customers are allowed to only first class tested parties when the documents covering an import shipment or other goods pledged to the Bank as security are given without payment. However, for such advances prior permission/sanction from Head Office must be obtained. The customer holds the goods or their sale-proceeds in trust for the Bank, till such time, the loan allowed against the Trust Receipts is fully paid off. The Trust Receipt is a document that creates the Bankers lien on the goods and much amounts to hypothecation of the proceeds of sale in discharge of the lien. 4. 2. 1. 7Loan Against Imported Merchandise (LIM) Advance (Loan) against the security of merchandise imported through the Bank may be allowed either on pledge or hypothecation of goods, retaining margin prescribed on their Landed Cost, depending on their categories and Cre dit Restriction imposed by the Bangladesh Bank. Bank shall also obtain a letter of undertaking and indemnity from the parties, forrader getting the goods cleared through LIM Account. 4. 2. 1. Payment Procedure of Import Documents This is the most susceptible task of the Import Department. The officials have to be very much minute while making payment. This task constitutes the following Date of Payment Usually payment is made within seven days after the documents have been received. If the payment is become deferred, the negotiating bank may claim interest for making delay. Preparing Sale Memo A sale memo is made at B. C rate to the customer. As the T. T & O. D rate is paid to the ID, the difference between these two rates is exchange trading. Finally, an Inter Branch Exchange Trading Credit Advice is sent to ID. Requisition for the Foreign up-to-dateness For arranging necessary fund for payment, a requisition is sent to the International Department. Transmission of Message M essage is transmitted to the correspondent bank ensuring that payment is being made. 4. 3. 2 B) EXPORT 4. 3. 2. 1Understanding The goods and services sold by Bangladesh to foreign households, businessmen and Government are called export. The export trade of the country is regulated by the Imports and Exports (control) Act, 1950. There are a number of formalities, which an exporter has to fulfill to begin with and after shipment of goods.The exports from Bangladesh are subject to export trade control exercised by the Ministry Of Commerce through Chief Controller of Imports and Exports (CCI & E). No exporter is allowed to export any commodity permissible for export from Bangladesh unless he is registered with CCI & E and holds valid Export Registration Certificate (ERC). The ERC is required to be renewed every year. The ERC number is to be incorporated on EXP forms and other documents connected with exports. 4. 3. 2. 2 The formalities and procedure of Export L/C 1. Obtaining exports LC To get export LC form exporter issued by the importer. . Submission of export documents Exporter has to submit all necessary documents to the collecting bank after shipping of goods 3. Checking of export documents After getting the documents banker used to check the documents as per LC terms 4. Negotiation of export documents If the bank accepts the document and pays the value draft to the exporter and forward the document to issuing bank that is called a negotiating bank. If the bank does buy the LC then the bank normally acts as collecting bank. 5. Realization of proceeds This is the period when the issuing bank has realize the payment. 6.Reporting to the Bangladesh bank As per instruction by Bangladesh bank the bank has to report to respective department of Bangladesh bank by mentioning latest payment. 7. Issue to proceeds realization certificate (PRC) Bank has to issue proceed realization certificate of export LC to the supplier / exporter for getting cash assistance 4. 3. 2 . 4Back-To-Back L/C It is simply issued to the clients against an import L/C. Back-to-Back mechanism involves two separate L/C. One is master Export L/C and another is Back-to-Back L/C. On the strength of police captain Export L/C bank issues bank to Back L/C.Back-to-Back L/C is commonly known as Buying L/C. On the contrary, Master Export L/C is known as Selling L/C. 4. 3. 2. 5 Features of Back to Back L/C An Import L/C to procure goods /raw materials for further processing. It is opened based on Export L/C. It is a kind of Export Finance. Export L/C is at Sight but back to Back L/C is at usage. No margin is required to open Back to back L/C Application is registered with CCI&E Applicant has bonded warehouse license. L/C value shall not exceed the admissible percentage of net FOB value of relative Master L/C. Usance period will be up to 180 days. The import L/C is opened for 75% of the value of Export L/C. Here L/C issued against the lien of export L/C. Arrangements are such that export L/C matures first then out of this export profit, import L/C is paid out. 3. 3. 2. 6 Documents Required for Opening a Back-to-back L/C In NCC BANK Principal Branch, following papers/ documents are required for opening a serial L/C- 1. Master L/C 2. Valid Import Registration Certificate (IRC) and Export Registration Certificate (ERC) 3. L/C Application and LCAF duly filled in and signed 4. Proforma Invoice or indentation 5.Insurance Cover Note with money receipt 6. IMP Form duly signed In addition to the above documents, the followings are also required to export oriented garment industries while requesting for opening a sequential L/C 1. Textile Permission 2. Valid Bonded Warehouse License 3. Quota Allocation Letter issued by the Export Promotion Bureau (EPB) in favor of the applicant for quota items. Payment of back to back l/c In case back to back as 60-90-120-180 days of maturity date period, deferred payment is made. Payment is given after realizing export proceeds from the L/C issuing bank. 4. 3. 2. Negotiation of Export Documents Negotiation stands for payment of value to the exporter against the documents stipulated in the LC. If documents are in order, NCC BANK purchases (negotiates) the same on the basis of banker- customer relationship. This is known as Foreign Documentary Bill Purchase (FDBP). If the bank is not satisfied with the documents submitted to NCC BANK gives the exporter reasonable time to remove the discrepancies or sends the documents to L/C opening bank for collection. This is known as Foreign Documentary Bill for Collection (FDBC) entered into the Foreign bill Purchased (F.B. P) register. The documents are sent to the L/C opening Presentation of export documents for negotiation/Purchase After shipment, exporter submits the following documents to NCC BANK for negotiation. Bill of exchange Bill of Lading Invoice Insurance Policy/Certificate Certificate of Origin Inspection Certificate Consular Invoice Packing List