Internship Report

EXECUTIVE
SUMMARY
United Commercial Bank Limited (UCBL) is one of the first generation private sector Banks
in Bangladesh, commenced its commercial operations from mid 1983 and has since been able to
establish one of the largest network of 84 branches in six different districts.
United Commercial Bank Ltd. offers all kinds of Commercial Corporate and Personal Banking
services covering all segments of society within the framework of Banking Company Act and
rules and regulations laid down by our central bank. Diversification of products and services
include Corporate Banking, Retail Banking, and Consumer Banking right from industry to
agriculture, and real state to software.
UCBL Rajshahi branch is one of the branches, which facilitate all kind of facilities that a Bank
offers. It has General Banking, Credit Management, as well as Foreign Exchange Department.
General Banking is the starting point of all the banking operating. It is the department, which
provides day-to-day services to the customers. General Banking consists of the many sections in
the branch. These are including customer service, account opening/closing, remittance, deposit
department, accounts department.
Credit management department provides many facilities like as loan and advance products to the
client for financing different purpose that fulfill the requirements of the bank and have good
return to the investment as well as satisfy the client. The loan and advance products are personal
loan scheme, small & medium enterprise loan, working capital financing, import financing,
export financing, syndicate loan, industrial financing etc.
Foreign Exchange Department deals with import, export, and foreign remittance and post import
financing. This department is playing an important role in enhancing export earnings, which aids
Internship Report on General Banking Credit Management & Foreign Exchange of UCBL 1 | P a g e
economic growth and, in turn, will be helpful for economic development. United Commercial
Bank Limited is the preferred choice in banking for friendly and personalized services, tailored
solutions for business needs, global reach in trade and commerce and high yield on investments,
assuring Excellence in Banking Services.
Introduction
INTRODUCTION
Internship Report on General Banking Credit Management & Foreign Exchange of UCBL
2|Page
Background
A commercial bank performs an imperative function in the economy. It helps to mobilize money
by a continuous procedure of borrowing and lending money. It accumulates its capital through
both own sourcing and out sourcing (depositors are the major part of out sourcing). This amount
is then lent to the other party. Being a service industry provides various services to its customers.
So, every commercial bank has to think about their customer first, because the customers are the
sovereign.
This report has been prepared as the partial fulfillment of BBA program in AUST. To complete
the BBA program successfully each participants required to undergo internship program in an
organization for three months to learn practical knowledge of business activities. To accomplish
the aforesaid requirement, I am assigned as an internee in United Commercial Bank Ltd,
Rajshahi Branch for 3 months starting from September, 11, 2011.
Objectives
The objective of the report is to gather practical knowledge particularly regarding any business
organization and its operations. Theoretical classes of Bachelor of Business Administration
program provides us knowledge regarding theories and models whereas internship program gives
us the chance to view those systems and their operations (based on theories and models) in
practice. Apart from this broad objective, we can identify the objectives of this report as follows:
Understanding the environment, functions and management of the organization for my

case it is UCBL Bank.
Narrating experience in working in UCBL
To apply theoretical knowledge in the practical filed in order to formulate a problem to

work on.
Defining and analyzing the problem.
To learn about banking more thoroughly.

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To relate the theoretical knowledge with the practical content.

Methodology
I joined as an intern in UCBL Rajshahi Branch on September 11, 2011. I was assigned to work
under all the 3 departments within 3 months. I was allocated for 1 month for each department. I
worked under each officer and learn from him or her directly. I frequently ask questions and obey
their instructions.
Scope
As my study title is The General Banking Activities, Credit Management & Foreign
Exchange of UCBL, it is clear that the scope of this study has spread over whole customers of
the organization both corporate and retail. The scope of the study has been divided in two parts.
One is operational scope and another is time scope. These are described below
- Operational Scope: The operational scope of this study has been confined working
under all the departments for 3 months.
- Time Scope: This report has accomplished with in the period of three months started
from 30 December 2008.
Limitations
While doing this paper, I have faced several obstacles. They were
The website of UCBL does not contain updated information.
UCBL does not possess any Annual Report or Brochure.
I have to submit the report within short period.
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OVERVIEW OF UNITED COMMERCIAL BANK LTD
United Commercial Bank Limited (UCBL) is a Bangladesh based financial institution that
provides banking services. The services include personal and business banking, loans, credit
cards, online banking and money transfer services. The bank primarily operates in Bangladesh,
where it is headquartered in Dhaka.
With its firm commitment to the economic development of the country, the Bank has already
made a distinct mark in the realm of Private Sector Banking through personalized service,
innovative practices, dynamic approach and efficient Management. The Bank, aiming to play a
leading role in the economic activities of the country, is firmly engaged in the development of
trade, commerce and industry thorough a creative credit policy.
History
United Commercial Bank Limited incorporated on 26 June 1983 as a public company with
limited liability under the Companies Act 1993. The bank obtained permission to commence
business with effect from 26 June 1983 and started banking operations on 29 June 1983 with an
authorized capital of Tk. 100 million divided into 1 million ordinary shares of Tk. 100 each.
Management
The Bank has in its Management a combination of highly skilled and eminent bankers of the
country of varied experience and expertise successfully led by Mr. M. Shahjahan Bhuiyan, a
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dynamic banker, as its Managing Director and well-educated young, energetic, and dedicated
officers working with missionary zeal for the growth and progress of the institution.
Corporate Information at a Glance?

Registered Name
United Commercial Bank Limited
Registered Head Office
Federation Building, 60 Motijheel, Dhaka.
Chairman
Mr. Md. Jahangir Alam Khan
Managing Director
Mr. M. Shahjahan Bhuiyan
Number of Branches
84
Organogram of UCBL
Deputy Managing Director (DMD)
Executive Vice President (EVP)
Senior Vice President (SVP)
First Vice President (FVP)
Vice President (VP)
First Assistance Vice President (FAVP)
Assistance Vice President (AVP)
Senior Executive Officer (SEO)
Executive Officer (EO)
Senior Officer
Management Trainee Officer

Officer
Junior Officer
6|Page
Products and Services
The Bank provides a broad range of financial services to its customers and corporate clients. The
Products and Services UCBL offers are:
Products & Services
UCB Multi Millionaire

UCB Money Maximizer
UCB Earning Plus
UCB DPS Plus
Western Union Money Transfer

SMS Banking Service
Online Service
Credit Card, Debit Card
One Stop Service
Time Deposit Scheme

Monthly Savings Scheme
Deposit Insurance Scheme
Working Capital Finance
Inward & Outward Remittances
Loan Syndication
United Commercial Bank divided its branch into several departments. The main 3 departments
are:
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Industri
Foreign
NFCD (
Deposit
RFCD (
Accoun
Consum
Locker
Industri
Foreign
NFCD (
Deposit
Inward
Travele
Import F
Export F
Trade F
Underw
General
Banking
GENERAL BANKING
8|Page
General Banking is the starting point of all the banking operating. General Banking department
aids in taking deposits and simultaneously provides some ancillaries services. It provides
those customers who come frequently and those customers who come one time in
banking for enjoying ancillary services. It is the department, which provides day-to-day
services to the customers. Every day it receives deposits from the customers and meets
their demand for cash by honoring cheques. It opens new accounts, demit funds, issue
bank drafts and pay orders etc.
CASH MANAGEMENT DEPARTMENT
Cash section demonstrates liquidity strength of a Bank. It is also sensitive as it deals with liquid
money. It is the most important department that is contributing to the earning of the bank
in terms of goodwill and customer satisfaction with their quality and prompt services.
Cash department of UCB Rajshahi Branch is well equipped and decorated. There is also
electronic counted machine and computers with online system in this department.
Balance of account can be seen with few seconds. So cash payment can be made very
promptly. Transaction involving cash is called cash transactions. The cheques/ instrument
/ vouchers which are paid in cash over the counter are cash transactions. It has two types
of services:
Cash Receipt
Cash Payment
Procedure of Cash Receipt
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The depositor will use the prescribed deposit slip supplied by the bank to deposit cash /cheques/
demand draft/ pay order etc. All cash receipt voucher shall be received by the teller. Cash receipt
counter performs its job as follows:
First checks if the deposit slip is properly filled up containing title of account, account
number, date, amount in word and figures and depositors sign.
Cash is received by the cash receiving officer, twice counted and matched with the
deposit slip and also write down the denomination of notes behind the cheque.
Cash receiving officer write down the amount in figure and in words on the front side
of the cheque.
Cash received stamp is affixed on the face of the deposit slip along with the signature
of the cash receiving officer.
Record it in the Record Book and put scroll no in the cheque
Deposit slip is credited and posted in the concerned account in the system.
Counter folio is given to the depositor as receipt. One consolidated cash debit voucher
is posted in the system to balance the cash.
Procedure of Cash Payment
At this counter cash is paid to the customer on demand by placing a cheque over counter.
Payment counter performs its job as follows:
Check the cheque leaf whether it is worded properly. This cheque covers Branch seal,
Date (Date must be current date or 180 days earlier), amount in figure and word, and
finally signature of the Drawer. We also check here whether the word Bearer is
crossed away or the cheque is in the name of any company or firm.
Verify the signature with the specimen signature and give verification seal and
signature of the verifier.
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Check proper endorsement is given behind the check leaf in case of Check Drawn on
Payees in the name of any Firm. For cheques in the name of Firm Attestation is
required along with Firms common seal to be paid over the cash counter.
Account is debited and then the officer cancels cheque. It is posted in the system and
posting stamp and transaction number is affixed on it.
Cheque is handed over to the cash payment officer for payment.
Take one more receiver signature on the back of the cheque is taken from the holder
to match with the first one and then cash is paid to the payee. And also write down the
denomination of notes behind the check.
Cash paid stamp is affixed on the face of the cheque. Entry is passed in the cash
payment register.
Give posting in PcBANK2000 and debit Drawer account and note the transaction no.
on the top of the cheque.
Cash Book Balance

At the end of the working day cashier is responsible to maintain the cash balance book. The cash
book contain the date, opening balance, detail of cash payment and received in figures, closing
balance, denomination of government notes (Currency). It s checked by manager. The
consolidated figure of receipt and payment of cash is entered in the cash book and the closing
balance of cash is drawn from that i.e.
Opening Balance of Cash + Receipts - Payments = Balance
The closing balance of today will be the opening balance of tomorrow. This department is one of
the most important departments of the Bank. All the books maintained in this department are
checked by officer.
Cash Insurance Limit

Cash in Vault
Tk. 75 Lac
Cash in Counter
Tk. 10 Lac
Cash in Transit
Tk. 1 Corer
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Maintenance of Cash Remittance
The In-charge of Cash Department maintains the cash remittance according to the rules of the
Bank. If the cash manager thinks that the amount of money cross the limit, then he called the
Principal Branch to takes the extra amount of money or vice versa. Inter Branch Credit Advice
(IBCA) is used for such transaction.
On-Line Banking Operations
The UCBL has 84 branches and all transactions among the branches are done through Online.
UCBL uses PcBank2000 customized software for its day to day transaction. The
activities are:
Deposit cash in any branch in any account
Withdraw cash from any branch
Transfer from any account to any branch
There are several charges for online transaction. Such as-
Inter City Transaction charges:

Amount
Tk. 1-50000
Tk.50001-100000
Tk.100001-1000000
Above 1000000
Commission (TK)
Nil
50
100
200
VAT (TK)
Nil
8
15
30
Commission (TK)
Nil
25
50
100
VAT (TK)
Nil
4
8
15
Within City Transaction charges:

Amount
Tk. 1-50000
Tk.50001-100000
Tk.100001-1000000
Above 1000000
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ACCOUNT OPENING DEPARTMENT
Responsibility of the customer service starts with opening of new account in the name of new
customer. This is the starting point of the client bank relationship. By opening an account,
the bank bridge its customer to avail the facilities provided by the bank.
Types of Account
UCBL has several types of deposits for its customers. Like
Savings Bank (SB) Account
This is an interest bearing account and only individuals can open this type of accounts.
Current Deposit (CD) Account
It is popular known as Current Account. Any individual, company, firm, may open this type of
account in its own name. This is non-interest bearing account.
Short Term Deposit (STD) Account
This is opened and operated for short term and for specific purpose. It is also an interest bearing
account and where rate of interest is generally below the savings rate.
Fixed Deposit Receipt (FDR) Account
Individuals, Firms, Companies, Associations may open this account. The deposit is taken for a
specific fixed period of time, such as 3 months, 6months, 1-year etc.
There are few schemes UCBL is offering its customers. Such as
Monthly Savings Schemes
Deposit Pension Scheme Plus
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Money Multiplier
Money Maximize Scheme
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Rates of Interest on Deposits

Types of Deposit
Savings Deposit
Short Term Deposit
Fixed Deposit
Rate of Interest (% p.a)

6.00
5.00
For 3 months
12.00
6 Months
12.00
12 Months
12.00
Formalities for Open an Account

For opening the account, the first hand requirements are
Application on the prescribed form
Introduction of the applicant
Specimen signature
Two copies of passport size recent photograph with attested by the introducer.
At first customer service desk want to know whether the customer has introducer to open the
account or not? If yes then give him/her a printed Account opening Form along with Specimen
Signature Card, Customer Transaction Profile Form and Information form on Money
Laundering. After that, request customer to fill up the form duly and submit the form with
required documents.
Required Documents
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Personal Account
Two Copies of Passport size photographs of the applicant attested by the Introducer and
one copy passport size photograph of the Nominee attested by the applicant.
Copy of passport/National Identity Card/ Voter ID Card/ Certification from Word

Commissioner or Union Perished Certificate.
Details of occupation/employment and sources of wealth or income.
Current Proprietary
Same as personal account plus Trade License.
Partnership Account
Same as personal account plus Trade License and Partnership deed
Limited Company
Certificate of Incorporation.
Memorandum and Articles of Association.
Resolution of the Board of directors.
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Maintenance of Specimen Signature Card
Specimen Signature should be retained in card cabinet arranged in account number order. The
key of the cabinet should be held by an authorized officer who should ensure that
cabinets are securely locked and placed inside the Strong Room overnight.
Maintenance of Account Opening Form (AOF)
Account Opening Form are kept in AOF cabinet according to the account type as well as account
number. Signature should be retained in card cabinet arranged in account number order.
The key of the cabinet should be held by an authorized officer who should ensure the
security of these forms.
Letter of Thanks
After completing all the formalities of opening an account, a letter of thanks is send to the
address of the customer. If letters addressed to customers, introducers or referees are
returned undelivered or not satisfactorily responded, then no service should be provided
to the customer unless specifically approved by the Branch Manager.
Letter of Welcome
Letter of welcome send to the potential customer to let them know about the latest offer of
UCBL.
Closing an Account
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When a customer wants to close his account in the bank he has to follow the following procedure
The client writes a written application
She/he surrenders the unused checkbook
The bank takes charge TK. 200.00 for closing fee
The rest amount gives to the customer
Closed rubber stamp uses top of the respective account opening form and file.
Issuance of Cheque Book
A cheque book contains a number of cheques, which is given to a customer upon written request
and after marking the payment for the cheque book. It enables a customer to make withdrawal
from his account or make payment to various parties by issue of cheques.
All the account opening formalities must be completed before, issuance of cheque book.
Particulars of the cheque book requisition should be completed containing title of account,
account number, number of leaves and signature of the customer. Signature of the customer is
verified on the requisition. If customer is unable to collect his cheque book, then he can give
authority to the third person to collect his cheque book on his behalf by signing on the back of
the requisition.
Cheque book is taken out from the locker. It is assured that series of the cheque book is in order.
Particulars are entered in the cheque book issuance register. Account number is stamped on every
leaf of the cheque book and those leaves are counted. Name of the account holder is written on
the cover of the cheque book and requisition on the cheque book for further issuance is properly
filled stamped and signed by officer of the bank.
Cheque book is delivered to the customer and his signature is taken on the cheque
book
issuance
register,
cheque
serial
number
is
entered
in
the
system
(PcBANK2000). Stock of Cheque books are balanced at the end of each day and
kept under safe custody.
18 | P a g e
Cheque Book Issue Charge

Per leaf
Tk. 1
ACCOUNT BILLS & REMITTANCE DEPARTMENT

Remittance is one of the important items of bank business. Now a day business person cannot
run his business without bank remittance facilities. Sending some money from one station
to another through banking channel is called remittance. Remittance may be both local
and foreign. The main instruments used for local remittance of fund are:
Pay Order (PO)
Demand Drafts (DD)
Telegraphic Transfer (TT)
Pay Order (PO)
Payment order is meant for making payment of the bankers own of the customers dues locally
and not for affecting any remittance to outstation. In a sense, the payment order is used
for making a remittance the local creditors.
Issuance of Pay Order
The customer should fill up PO application form.
Money should be received by cash or by debiting clients account.
Give necessary entry in the Pay Order register where payees name, date, PO no, etc is
mentioned.
Printed payment order leaf should be filled and signed by two authorized officers.
Entry should be given in computer under supervision of authorized officers.

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After scrutinizing and approval of the instrument by the authority, it is delivered to

customer.
Signature of customer is taken on the counterpart.
PO issuance thereof
Upto Tk. 1000/Above Tk. 1000/- but not exceeding Tk. 1.00 lac
Over Tk. 1.00 lac but not exceeding Tk. 5.00 lac
Over Tk. 5.00 lac
Cancellation Charges of PO
Charges for issuance of Duplicate Instrument
Tk. 25/Tk. 50/Tk. 75/Tk. 150/Tk. 50/- per instance

Tk. 100/- per instance
Demand Draft (DD)
A bank draft is an order to pay money drawn by one office of the bank on other office up on
other office of the same bank for a sum of money payable to order on demand. A bank draft is an
order by one branch to another branch of the same bank outside the clearing zone.
Issuance of Demand Draft
Issuance procedure of Demand Draft is same as of Pay Order.
Issuance of Duplicate PO/DD
If the customer wants to issue a duplicate DD, than customer is asked to do the following
formalities:
Making a general diary (GD) in the nearest Police Station.
Furnishing an Indemnity Bond in Tk.50/= stamp.
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The banker immediately marks Stop Payment in the register after receiving the application
from the customer and a duplicate PO/DD is issued.
Encasement Procedure of DD
After receipt of advice:
On receipt of advice from drawing branches following entries are passed. The signatures
of the issuing branch should be verified by the responding branch
Head Office A/c- Branch concerned
Bill Payable Account- DD Payable
Debit
Credit
Particulars of the above are entered on DD Payable Register in which separate foils are
allocated to every branch and an index is maintained.
The particulars are checked and initialed by the in-charge.
Payment in Cash
The dates, amount in words and figures, branch drawn upon and signatures on the drafts
are checked.
Particulars of the draft are verified from the register.
Payment date is noted on the register.
Stamp is affixed on the face of the drafts.
Draft together with the register is sent to the officer in-charge for cancellation and initials
in the register.
After cancellation the draft is sent to the cash department for payment.
In case of any irregularity in the draft an advice letter is sent to obtain the confirmation of
the drawee branch.
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Payment in clearing
Collection Banks stamp, crossing and discharge are checked.
Other procedure is similar to that explained in payment in cash.
Telegraph Transfer (TT)
Sometimes the remitter of the fund requires the money to be available to the payee immediately.
In that case, the banker is requested by him to remit the funds telegraphically. Here fund is
transferred through the aid of Test Key Materials and SWIFT. TT can be both foreign and local.
On received of TT massage test number should be checked immediately. Then voucher to be
passed through register duly authenticated by authorized officials.
DD/TT issuance thereof
Commission
@0.10%
Cancellation Charges of DD/TT

Charges for issuance of Duplicate Instrument
15% VAT on commission earning
Minimum Tk. 50/Tk. 50/- per instance

Tk. 100/- per instance
Encasement Procedure of TT
Receipt of Telegram:
Telegram is detected and test is verified by the in-charge and the manager.
If the test does not agree or the telegram is received mutilated, a telegram is sent the
branch concerned asking them to repeat the test of the message with correct test.
If the test agrees, stamp is affixed on the telegram and signed by the officer.
Following entries are passed:

General A/C- Branch Concerned
TT payable A/C
Debit
Credit
TT payable A/C
Debit
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Partys A/C
Credit
Advice to Payee:
When TT Advice is receipt by the paying branch from the issuing branch, the advice
(IBCA) is posted in the TT register for respond only without preparing any voucher.
If the amount is to be credited to be payees account.
Date of payment is noted in the register and initialed. If the TT is to be issued, then the
receipt number is noted on the register.
The receipt along with the register is sent for checking and signature of the in charge and
manager.
After that, the receipt is sent to the payee.
Test Key Tables
Secure Code Tables or Test Key Tables (TTK) is one of the facilities used for authorization of
client orders made by bank-online system or by fax or email. In order to preclude any
possibility of misuse, your personal Secure Code Tables should be kept in a safe place
where it is accessible only to authorized persons.
The test key is a digital signature that will secure any message to and from the bank. It is
calculated by adding the key number from each table together with the unique fixed
number sent to each client. It has 3 parts:
Part-1
Table -A
Branch Code
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Table- B
Table- C
Part-2
Table-A
Table-B
Table-C
Table-D
Part-3
Table-A
Amount Code
Date Code
Amount Code
Date Code
Currency Code
Required for TT and DD
Variable Sheet
Crossing of Cheques and Endorsement
Cheque
Cheque is a negotiable instrument. Cheques can be of two types:
Open or Uncrossed Cheque.
Crossed Cheque.
Open Cheque: An open cheque is a cheque which is payable at the counter of the drawee Bank
presentation of the cheque.
Crossed Cheque: A crossed cheque is a cheque which is payable only through a collecting
banker and not directly at the counter of the bank. There are two mode of crossing- General
Crossing and Special Crossing.
Endorsement
Endorsement is an essential part of day to day work in Bank. A cheque requires varieties of
endorsement like
Branch Name
Account Number
Signature Verification etc.
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Clearing
The function of clearing department can be divided into two parts:
Outward Clearing
Inward Clearing
Outward Clearing
Messengers of different branches bring instruments drawn on other Banks to

the clearing section of Head Office.
Bills section of UCBL Head Office also sends the instruments drawn on other
Banks to the clearing section for collection.
The clearing stamps are affixed on the instruments and endorsed
The particulars of these instruments are entered in the main schedule of

Banks through NHCASH22 software and inserted in floppy disc.
The diskettes along with the instruments are carried to the Clearing House.
After going there the concerned officials of UCBL gives the instruments to the
representative of respective Banks.
Claims of UCBL on other Banks are set off by Bangladesh Bank through
debiting other Banks account and crediting UCBLs account.
This function is done in the first house.
Outward Clearing
The instruments drawn on UCBL are received from other Banks in the Clearing House.
The amount and numbers of instrument are entered in the house from main schedule of
respective Banks.
The instruments with schedule are arranged branch-wise.
The instruments are sent to the branches concerned for clearance and IBCAs are collected
from them for honored cheques.
The dishonored instruments are sent back to respective Banks through the second house.
25 | P a g e
Collection of Cheques and Bills
One behalf of counts banks play a vital role to collect cheques and bill a credit to the
beneficiarys a/c through banking channel. To collection of cheques and bills the bank follows
two systems:
Outward Bills for Collection (OBC)
Inward Bills for collection (IBC)
Outward Bills for Collection (OBC): These bills are included within the clearing area.
These bills can be from the same bank but different branches.
Inward Bills for collection (IBC): These bills can occur outside Dhaka within one bank or
other banks.
CRADIT
MANAGEMENT
26 | P a g e
CREDIT
MANAGRMENT
The word credit derives from Latin word cruder means to trust. The fundamental
nature of credit is that, an element of trust exists between buyer and seller whether of goods or of
money. Credit may also be defined narrowly or broadly. Narrowly credit is simply the opposite
of debt. Debt is the obligation to make future payments. Credit is the claim to receive these
payments. Credit is finance made available by one party (lender, seller or shareholder/ owner) to
another (borrower, buyer, corporate or non-corporate firm), i.e. from surplus unit to deficit unit.
Credit is the outcome of financial intermediation the very major service offered by Bank
financial institution.
The economic basis of financial intermediation lies in the economics of scale in
portfolio management and in the low of large numbers.
Lander have preference for financial intermediation because of:
Low risk
Greater liquidity
Convenience and
Other auxiliary services.
27 | P a g e
Borrowers have preference for financial intermediation because of:
Availability of big pool of funds that can satisfy big individual demands.
Greater certainty of the availability of fund at all times.
The rate of interest charged lower then charged by other lenders.
Regulated finance institution do not fleece small borrowers in the manner moneylender
do.
Broadly, credit is finance made available by one party (lender, seller) to another
party(borrower, buyer).
Organizational Structure for Credit Operation:

Head Office
Board
EC
MD
DMD
Credit
Division
Corporate
Division
General
Credit
Deptt.
SME
Deptt.
Trade
Finance
Deptt.
Internal Audit
Syndication &
Structured
Finance
Internship Report on General Banking Credit Management & Foreign
Exchange of UCBL
DEptt.
Leasing
Deptt.
CRM
Deptt.
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Recovery
&
Legal
Deptt.
Credit Marketing
Team
Credit approval
Team
Credit
administration
Team
Credit Recovery
Team
Fig: Organizational Structure for Credit Operation.
At the minimum, one officer shall be placed in the Credit Administration unit immediately at
each branch who shall independently under administrative and working control of Credit
Administration Deptt.
Credit Administration Flowchart:
Functions of
Credit Administration
Loan & Advances
Loan and advances have primarily been divided into three main heads as follows:
Disbursement
Custodian
Monitoring
Loan & Advance
Advance Advance
Compliance
Term Loan
Continuous Conditions &Demand Loan Returns to BB,
Obtaining
CIB Reporting,
Loan Covenant Branch
security
Default list
Documentation as
Monitoring
Fixed Term Loan
circulation
per approval
These are the non-revolving loans made by the Bank with fixed repayment schedules. This loan
Approval from
CRM
is given for a specific term and usually repaid in Equal Installment either of monthly or quarterly.
Completion of
Security
Safely Storing
Monitoring
BB,
Documentation
Internship Report onLoans/Security
General Banking Credit ManagementOf
& Foreign
Exchange of UCBL 29 | Maintain
Page
Past Due,
Circulars
&
Documents
Limit,
Ensure
ensure
(fire
proof)is
Expiry &
Collateral
Limit Creation
compliance by
Documents
insured &
& Complying
all Depts.
Deficiency
properly Values.
Disbursement
Disbursement
Checklist
The interest may be paid quarterly or along with the installment. Fixed term loans are
categorized into three categories based upon its tenure which is defined as follows:
Short-term loan: The tenor of this loan is less than one year.
Mid Term loan: The tenor of this loan is between one to five years. This type of
loan is most preferred by both bank and the borrower. This loan is comprises with
consumer credit, Agro credit, Micro Credit etc.
Long Term Loan: The tenor of this loan is more than five years. Here the fund is
locked up for a long period and hence risk exposure is higher than other term
loans.
Continuous Loan
These are the revolving loans having no fixed repayment schedule, but have an expiry date at
which it is renewable on satisfactory performance of the customer.
Here the customer avail the loan facility continuously for a specific time period. And the
customer can enjoy the facility at any time with in the period. And also noted here that within
stipulated limit he can enjoys the facility as much as he desires. Thats why this loan arrangement
is also termed as revolving loan. This is a very much popular form of loan facility in the business
community. Two most popular continuous loans are as follows:
Continuous
Loan
Over Draft (OD)
Cash Credit
(CC)
30 | P a g e
Secured OD
Temporary
OD
CC Hypo
Disbursemen
t
CC Pledge
Over Draft (OD)
This is a loan arrangement between bank and customers by which the customer can draw money
from his account up to a certain limit as approved by the bank. This loan is usually for one year
time and renewable upon maturity.
Secured Overdraft (SOD): Overdraft which is normally granted against the security
of tangible assets such as pledge/lien of FDR, bonds ICB unit certificate etc. are
called SOD. Description of overdraft will depend upon the nature and types of
security charged to the bank.
Temporary Overdraft (TO): Customers who maintain satisfactory conducted

account may be accommodated at their specific request to overdraw their balance in
the current account to meet unexpected and urgent requirements for credit facilities.
The amount up to which overdrawing is permitted is dependent on the need of the
customer, the previous conduct of his account with the bank and the turnover in the
account, average balance maintained etc.
Cash Credit (CC)
This is an arrangement for meeting the firms working capital needs. Usually this loan is
provided to procure raw materials and to complete it in finished goods. Therefore, usually the
security of this loan is the subject matter for which the loan is arranged for i.e. the finished goods
31 | P a g e
stock. Some other collateral securities are also may be kept for this facility. Cash credit
depending on its nature classified in the following types:
CC Hypothecation: In this arrangement the possession of goods (subject matter of

the loan) goes with the client or borrower but the ownership is in banks hand. And
client repays loan from the sales proceeds by turn. Here primary security is the
goods purchased by the sanctioned loan and secondary security may be cash
equivalent instrument or any mortgage property.
CC pledge: Here ownership and possession of the goods, subject matter of the loan,
lies with the bank. And upon prior payment the client release goods from banks
custody and sale accordingly.
Demand Loan
These are the non-revolving loans which are neither continuous nor fixed but have to be repaid
on demand. This loan is repayable by the borrower on demand. That means for this loan
the borrower is bound to pay back on demand of Bank.
Personal Loan ( Consumer Credit Scheme)
The objectives of this loan are to provide essential household durable to the fixed income group
(Service Holders) and other eligible borrowers. Car loan, loan for house renovation, vacation
loan, marriage loan and loan for household equipment well as entertainment products are
governed by personal loan program. The Total amount of loans along with the duration in which
these loans taken, need to be repaid is given below:
32 | P a g e
Type of Product
Home Loan
Auto Loan
Doctors Loan
Advance Against Salary
Any Purpose Loan
Education Loan
Travel Loan
Marriage Loan
Hospitalization Loan
CNG
Conversion
Loan Amount (Tk.)
Rate of
Tenure
Lac
Up to 7.5
2.00
5.00
5.00
10.00
5.00
2.00
3.00
5.00
1.00
Interest
15%
16%
16%
17%
17%
17%
17%
17%
17%
17%
10 to 20 years
5 years
5 years
4 years
4 years
4 years
3 years
3 years
2 years
1.5 years
Scheme
Types of Credit Facilities
33 | P a g e
Seri
al
No.
Fun
ded
1.
Name of the
Facility
Description
Secured Overdraft
2.
TOD
100% cash covered

Temporary overdraft
3.
PAD(Sight)
5.
6.
7.
PAD(EDF)
Tenor
(Max)
SOD(FO)
4.
Purpose
General purpose
12 months
General Purpose
60 days
Forced Loan
Payment against Document Advance
against 21 days
(Foreign-sight)
Sight L/C
Forced Loan
Payment against Document Advance against
(EDF)
EDF L/C
21 days
Forced Loan
PAD (A/G/B)
Payment against documents Advance against LC 21 days
(A/G/B)
(A/G/B)-Forced
loan
PAD (Local)
Payment against document Advance against
21 days
(Local- sight)
Sight L/C (Local)
Forced loan
PC
Packing
Credit
against To finance against 120 days
(RMG & other Export L/C & Export Order Export L/C
than RMG)
To finance against
Export Order
8.
ECC
(New)
Export Cash Credit
9.
BFL
Bridge Financing Loan
Pre-shipment
Finance
Financial
accommodation to a
customer for export
of goods under
export LC and
allowed a certain
percentage
of
Export
LCs/Contract
Liquidated out of
export proceeds
Support Equity
LC
validity/180
days
12-36 months
34 | P a g e
Seri
al
No.
Fun
ded
10.
Name of the
Facility
TRL
Transport Loan
11.
HBL(Com)
House Building
Commercial
Loan
12.
HBL(Res)
House Building
Residential
Loan
13.
LTR
Loan against Trust Receipt
14.
HBL(S)
House Building Loan Staff
15.
CC(Hypo)
Cash
Credit
against
hypothecation of Inventory
and Book Debts
Other Business
operations
16.
CC(Pledge)
17.
Loan General
(New)
18.
FBPD
19.
LBPD
20.
LCPS(S)
Description
Purpose
Tenor
(Max)
To finance
commercial
Transport
To finance
commercial house/
apartment
To finance
residential
building / apartment
To finance import
L/C
To finance personal
house/apartment
To
finance
Inventory
General purpose
Cash Credit against Pledge To finance pledged
of Inventory
Inventory
Loan General
Short term, medium
term loans allowed
for specific purpose
for definite period
and repayable by
installments.
Foreign Bill Purchased & To purchase
Discounted
/discount/ negotiate
export documents
against
Sight/Usance
Export L/C
Local Bill Purchased & To purchase
Discounted
/discount against
local usance L/C
Loan under Personal Loan To finance personal
36-48 months
36-96 months
60-120 months
180 days
15 years
12 months
12 months
12-36 months
As per
Terms
LC
As per
Terms
180 days
36 months
LC
35 | P a g e
Seri
al
No.
Fun
ded
21.
Name
Facility
22.
FL(S)
23.
LIM
(Rename)
of
CL(S)
Seri
al
No.
24.
Name of the
Facility
Term Loan
25.
Time Loan
Staff
the Description
consumable items
Purpose
Tenor
(Max)
Car Loan Staff
To finance personal 5 years

car
Furniture Loan Staff
To finance personal 72 months
furniture
Import
Loan
against To finance imported 180 days
Imported
Merchandise merchandise under
pledged
pledge
Description
Purpose
Tenor
Term Loan against fixed
assets
Time Loan against Other
Security/Collateral/Support
To finance
asset
fixed Over 1year max

7 years
To finance business
12 months
operations/work
order/Industrial
working capital
To finance fixed asset

To finance duty/tax
26.
OAP
Own Acceptance Purchase
27.
OD(General)
Overdraft against
Security Collateral
28.
CP(Local)
General purpose
Advance allowed for
purchasing foreign
currency for payment
against LCs (Back to
Back) where the exports
do not materialize
before the date of
import payment
90 days
Forced Loan
Other To finance business 12 months

operations/Industry
operations
Misc. purpose
To
purchase/discount 30 days
Cheque Purchase (Local)
Cheque, Bank Draft,
and Payment Order
36 | P a g e
Seri
al
No.
Fun
ded
29.
Name of the
Facility
CP (Foreign)
Description
Purpose
Tenor
(Max)
Cheque Purchase (Foreign)
30.
Consumer Credit Consumer credit provided to

Scheme (CCS)
middle class income group
(New)
31.
Hire Purchase
Hire purchase
(New)
32.
Lease Financing
(New)
Lease finance
33.
OD (Work Order)
(New)
Overdraft against work

order
34.
OD(EM)
(New)
Over Draft
Money
for
To purchase/discount
foreign currency
Cheque, Bank Draft,
and Payment Order
To finance purchase of
consumer durable by
the fixed income group
to raise their standard of
living.
To
finance
capital
machinery, equipment
and vehicle
Installment credit
Borrower agrees to take
the goods on hire at a
stated rental
Repayment is inclusive
of Principal as well as
Interest for adjustment
To
finance
capital
machinery, equipment
and vehicle
Exclusive right to use
the asset by the
leaseholder
for
an
agreed period against
payment of rent.
Advance
against
assignment of work
order/ bill for execution
of contractual works
Not a continuous credit
rather time loan
Earnest To pay
money
45 days
Over 12
months
Max 60
months
Over 12
months
Max 60
months
Over 1 year
max 5 years
06 months to
36 months
earnest 90 days
Under non-funded credit, there are basically two major products namely Letter of Credit and
Letter of Guarantee. Following are the non-funded products of UCBL
Seri
al
No.
Name of the
Facility
Description
Purpose
Tenor
37 | P a g e
Non
Fun
ded
1
BFC (Local)
2.
BFC (Foreign)
3.
LG(Local)
4.
LG(Foreign)
5.
SLC(Local)
6.
7.
8.
Bills for Collection Local
Collection of local
outstation cheques/
Drafts/Documents
Bills for Collection Collection
of
Foreign
foreign
cheques/
Drafts/Documents
Letter of Guarantee - Local For
contractual
obligation
(BidBond,
Payment
Guarantee, Advance
Payment Guarantee,
Performance
Guarantee, Customs
Guarantee,
Shipping
Guarantee)
Letter of Guarantee For
contractual
Foreign
obligation
and
others
Sight Letter of Credit For local
Local
procurement
As
per
rules/terms
As
per
rules/terms
Specific
period
Specific
period
As per
Terms
LC
As per
Terms
LC
SLC(Foreign)
Recourse on title to
local document
Sight Letter of Credit For foreign
Foreign
procurement under
sight L/C
SLC(EDF)
import document
Sight Letter of Credit EDF For
importation As per
under sight EDF Terms
L/C
SLC (A/G/B)
import document
Sight Letter of Credit (Aid/ For Importation
As per
Grant/ Barter)
under (A/G/B)
Terms
LC
LC
38 | P a g e
Process Work Flow
Credit Approval Process
Credit approval process starts with receiving prescribed completed credit application from the
customer and ends with issuance of a written Sanction Advice by the Bank. Credit approval
process in the bank shall be guided by some basic principles. These are as follows:
Credit Proposal
A Credit Proposal is prepared by the Relationship Management Team either at Branch or

Corporate Division based at Head Office to present a concise and objective assessment of the
risks associated with lending money to the prospective borrowers. Banks have to ensure before
sanction/disbursement that their portfolio is of high quality, i.e., the risks associated with the
portfolio are relatively low. A credit proposal may be defined as hereunder:
1. Initial Credit Proposal Initiate credit facilities for any new relationship for the bank.
2. Annual Credit Proposal Renew existing facilities extended to a borrower or
amendments to existing facilities at the Annual Review Date.
39 | P a g e
3. Interim Credit Proposal Propose amendments (for e.g., an increase in amount or tenor
or pricing, or a change in security structure), and/or new facilities for an existing
borrower at any time other that the Annual Review Date.
Any credit proposal as mentioned above and/or Pre-sanction Inspection Report/Call Report/Visit
Report must be originated by the Relationship Officer duly recommended by Relationship
Manager of Branch or Relationship Officer of Corporate Division of Head Office duly
recommended by Head of Corporate. If a proposal is originated by Head Office Corporate
Division, the transaction would be suitably booked to a branch as proposed by the customer.
Identification Number
Each borrower would have a unique Loan Identification Number. The Branch originating a
Credit Proposal shall assign this number after getting written acceptance of the borrower in the
Facility Offer Letter that forwarded to the borrower after receipt of the approval from the
competent authority of the Bank. The identification number will consist of three parts: three digit
Branch Code, four digit Unique Serial Number and four digit Year in which the customer begins
credit relationship with our bank. In fine, the identification number format will be as follows:
Branch Code-Unique Serial Number-Year. There would be two digit loan category number
assigned by Head Office also.
Time Frame for Decision
Any requirement for further information regarding a particular credit proposal shall have to be
communicated in writing to the customer within 5(five) days from the date of submission of the
credit application. And, any decision of declining a credit application other than retail credit shall
have to be communicated to the customer by the Relationship Team within 15 (Fifteen) days
from the date of receiving all information from the customer. On the other hand, Head Office
Credit Risk Management Division will inform the primary status of the proposal after scrutiny of
the proposal within 3(three) days from the date of submission of the scrutinized credit proposal
by the Corporate Banking Division other than Industrial Credit.
Reporting Approvals
40 | P a g e
Credit Executives having credit approval authority at Branch level should report on monthly
basis a summarized position of all credit facilities sanctioned by him/her during the month in the
prescribed form. This is to be submitted to the Head of Credit and Head of Corporate within the
first week of the following month.
Review of Approval
The Head of Credit Risk Management Division will review at least 10% of total approval of an
individual executive on monthly basis in respect of compliance with the Credit Risk
Management Policy, internal circulars, prevailing regulations etc and report the findings to the
Managing Director.
Revision of Credit Decision
Any credit proposal declined by Credit Risk Management Division may be placed before next
higher authority for reassessment/review if Corporate Banking Division feels that the exceptions
are justifiable, or can be rectified over a reasonable period of time. But no appeal will go beyond
the Managing Director.
Compliance to Regulation
Any credit approval/sanction shall be subject to the compliance of Banks Credit Policy as well
as banking regulations in force or to be imposed by the regulatory body from time to time and to
the changes in the Banks policy. This is to be specifically mentioned in the Sanction Advice
issued to the customer.
Credit Committee
Bank has a multi-tier Credit approving system to manage the credit risk efficiently. Credit
proposals after preliminary evaluation and making necessary adjustment will be placed by
Corporate Banking Division before the Credit Committee for preliminary appraisal since
recommendation of the Credit Committee is pre-requisite before approving any loans by the
appropriate approval authority. Credit Risk Review Department of CRMD will conduct their risk
assessment on different aspects of the proposal and may place their observation in the Credit
Committee meeting. Additional Managing Director/Deputy Managing Director will be the
41 | P a g e
Chairman of the committee and the committee is to be constituted by the Managing Director.
TOR of the Credit Committee will be framed time to time and to be approved by Managing
Director.
There will be Branch Credit Committee to review the Credit proposal which fall under the
delegated power of Branch incumbent. No proposal will be approved unless it is screened and
recommended by the Branch Credit Committee. The Branch Credit Committee will be
constituted within the framework as advised by the Credit Risk Management Division duly
approved by the Managing Director. Branch will inform Credit Risk Management Division about
the formation of the committee and any changes due to transfer and others time to time.
Steps in credit Approval Process
Step-1: A potential borrower collects prescribed Credit Application Form from the Relationship
Officer of Branch/Corporate Division, Head Office/Web address of the Bank. Later, he/she
submits the filled in Credit Application Form along with required papers and documents.
Step-2: The Relationship Officer scrutinizes the Credit Application Form and other documents
submitted by the customer and make a preliminary assessment on creditworthiness of the
potential borrower on the basis of the information provided by the borrower. Relationship Officer
collects further information from the customer if it is felt necessary. And, if Relationship Officer
finds the proposal not credit worthy, a refusal letter to the customer would be sent immediately.
On the other hand, if Relationship Officer finds the proposal acceptable within the parameter as
set by the Credit Policy and instructions issued time to time by Credit Department, Relationship
Officer will forward the application with his comments to the concerned Relationship Manager.
Step-3: The Relationship Manager, singly or jointly with Relationship Officer, visit the
customers business premise and try to acquire proper understanding about the business position,
business expertise and reputation of the borrower, purpose of credit, actual credit requirement,
sources of repayment, etc. Besides, he/she negotiates with the customer about the structure of
42 | P a g e
the proposed credit facility to control the risks. Apart from this, he/she assesses the value of the
security to be offered and prepares Valuation Report. Finally, the Relationship Manager
summarizes all these information in the Pre-sanction Inspection
Report/Call Report/Visit Report in the Banks prescribed format in which he/she recommends for
specific credit facility for the customer. At the same time, The Relationship Officer, who is the
primary bank contact with the borrowers collects duly filled in CIB Inquiry Form from the
customer and send the same to the Credit Administration Department of Head Office to collect
latest CIB Report from Credit Information Bureau of Bangladesh Bank.
Step-4: The Relationship Manager sends the Pre-sanction Inspection Report to the Corporate
Division, Head Office. The Head of Corporate Division or assigned Executive assesses the credit
proposal and may contact with the concerned Relationship Manager or directly to the customer
for any query. Finally, Corporate Division of Head Office communicates their decision to the
Relationship Manager.
Step-5: Credit Administration Department on receipt of the request letter from the Branch will
send the CIB Inquiry Form to Bangladesh Bank. Credit Administration Department will send
the CIB report immediately by facsimile/e-mail/courier service to the concerned Relationship
Officer on receipt of the report. Everything may be closed if adverse CIB report is received. In
that case, letter of regrets would be issued to the customer informing the reason accordingly.
Step-6: If, clean CIB Report is received, the Relationship Officer originates a formal Credit
Proposal in prescribed format that should carry the recommendations of the Relationship
Manager. After signing by him, it is to be sent to the Corporate Banking Division, Head Office
and a copy to the Credit Risk Review Department of Credit Risk Management Division. It is to
be mentioned here that for renewal proposal, a certification of Credit Administration officer is
required stating the documentation status following existing sanction advice.
43 | P a g e
Step-7: Corporate Banking Division, Head Office after modifying the proposal as required place
the proposal along with Head of Corporate Banking Divisions recommendation before the
Credit Committee. Head of Credit Risk Review Department of CRMD or his authorized
representative may report his observation in writing/verbally before the Credit Committee.
Corporate Banking Division should inform the list of proposals that are to be placed before
the Credit Committee at least 15(fifteen) hours before to the Credit Risk Review Department of
CRMD for smooth functioning of the committee except the exception cases.
Step-8: Credit Committee will analyze the proposal and if found viable recommend for approval
to the appropriate approval authority following discretionary power provided in delegation of
credit approval authority with their observations. If the proposal is endorsed by the Credit
Committee, Corporate Banking Division will prepare required Memo mitigating the
weakness/risk factors and incorporating the suggestion/observation of the Credit Risk Review
Department as well as Credit Committee for approval of the appropriate authority. The modified
Memo should be routed through Credit Risk Management Division for further scrutiny. On
receipt of the Memo, Head of Credit Risk Review Department will distribute to the respective
Credit Officer to review, scrutinize and analyze in line with the business plan, risk acceptance
criteria of the bank and general credit norms. Credit Officer after evaluating the credit
information, facility structure and risk factors summarize his observations with reasons and
forward for concurrence of Head of Credit. The Head of Credit may contact with the Head of
Corporate Banking Division for clarification/rectification on any issues if required. Credit Risk
Management Division may include covenants & conditions to control the acceptable risk and
verify the status of the observations of Credit Committee as well as Credit Risk Management
Division. If the final Memo is acceptable, risk is within tolerance level and facility structure
commensurate with the total facility, it will be recommended by Credit Risk Management
Division for approval. The appropriate approving authorities may approve the proposal if within
their respective delegated approval authority or decline the proposal or may ask for further
44 | P a g e
review. If the proposal exceeds Managing Directors delegated authority, he/she recommends it
to the Executive Committee of the Board of Directors or to the full Board of Directors.
Step-9: If the facility is approved by the appropriate approval authority, Corporate Banking
Division will send the copy of approval Memo/Note sheet to Credit Risk Management Division.
On receipt of approval, Credit Risk Review Department of CRM issues Sanction Advice to the
originating Branch along with a Documentation Check List preferably on the same date which
clearly spells out what is the documentation formalities required to be completed before
disbursement. Copy of the Sanction Advice is to be sent to Corporate Banking Division and
Credit Administration Department.
Step-10: Sanction Letter to the customer following Credit Risk Review Department of CRM
sanction advice to be issued under dual signatures from the originating Branch. Preferably,
Relationship Manager and Credit Administration Officer of the Branch should sign on the
Sanction Letter.
Disbursement Process
Disbursement of a loan sanctioned by the competent authority shall be made after receipt of
written clearance obtained from Credit Administration Department of Head Office. The
disbursement process will be guided by some basic principles. These are:
Separation of Authority
Relationship Department and Disbursement Authority shall be separate from each other to
minimize the risk. Relationship Department will market the products along with preparation of
credit proposal while Credit Administration Department will deal with disbursement of approved
credit facilities after completing all formalities as mentioned in the Sanction Advice.
Documentation Check List

45 | P a g e
While issuing Sanction Advice to the Corporate Division/Branch, the Credit Division will
enclose therewith a Documentation Check List in which documentation formalities will be
specified that to be completed by the Credit Administration Unit of the disbursing branch before
any disbursement to secure the credit facility.
Documentation is obtaining such agreement where all the terms and condition and securities are
written and signed by the borrower. It specifies rights and liabilities of both the banker and the
borrower. In documentation each type of advances requires a different set of documents. It also
differs with the nature of securities. The documents should be stamped according to the stamp
Act. There are no hard and fast rules of documentation and it varies from bank to bank.
Generally, the documents are taken in the case of a secured advance by UCB:
Demand promissory note: Here the borrower promises to pay the loan as and when
demand by bank to repay the loan.
Letter of arrangement.
Letter of continuity.
Letter of hypothecation of goods and capital machinery.
Stock report: This report is used for OD and CC. In this report, information about the
quality and quantity of goods hypothecated is furnished.
Memorandum of deposit of title deed of property duly signed by the owners of the
property with resolution of Board of Directors of the company owning the landed.
Personal guarantee of the owners of the property.
Guarantee of all the directors of the company.
Resolution of the board of directors to borrow fund to execute documents and

completes other formalities
Form no. XVII/XIX for filling charges with the register of joint stock companies
under relevant section.
Letter of Revival
46 | P a g e
Letter of lien for advance against FDR.
Signing Documentation Check List
Relationship Officer is responsible for getting the document signed by the customer and
completing other formalities as per checklist. After completion of documentation formalities as
per checklist, the Branch will submit the same to the Credit Risk Administration Department,
Head Office, duly signed by the Relationship Manager (Head of the Branch) and countersigned
by the Credit Administration officer at the Branch seeking Disbursement Authority (In case of
credit facilities approved by Branch incumbent within delegated approval authority from
Managing Director, copy of signed Documentation Check List is to be sent to CAD, Head Office
for information). It is the responsibility of the Credit Administration Officer to verify the proper
execution of documents/security/collaterals before countersigning. However, both the signing
officer will be equally accountable for any lapses in documentation.
Deferral of Documentation
No credit facility is to be released for utilization, if requisite documentation is not available or

proper deferral approvals have not been obtained. If there is any inadequacy in documentation as
per sanction advice, the Relationship Manager shall have to seek temporary
deferral/waiver stating the reasons and specific time frame. Request of deferral will only be
processed in cases of extreme need, i.e., all reasonable attempts have been made to complete the
documentation prior to disbursements and have failed only because of unusual circumstances.
Such temporary deferral/waiver shall be approved by the Head of Credit Risk Management
Division/Additional Managing Director and/or the Managing Director depending on the issues.
However whole responsibility for removal of the inadequacy within the stipulated time shall rest
with concerned Relationship Officer/Manager and respective Credit Risk Administration Unit are
responsible for monitoring deferrals.
47 | P a g e
Disbursement Authority
All the approved credit facilities except the facilities approved under delegated authority of
Branch incumbent shall be disbursed only after having written disbursement authority/clearance
from the Credit Administration Department, Head Office. If there is any inadequacy in
documentation, the CAD Officer at Branch level will specifically mention it in the
Documentation Check List / Certificate of Documentation and concern Relationship Manager/
Branch Manager will mention reason behind the inadequacy and asked for temporary deferral
with specific time frame along with reasons behind for deferral. If the request is approved by the
authority as mentioned in the preceding paragraph, Credit Risk Administration Department will
intimate the deferral of documentation for specific time as approved and will issue disbursement
authority to the Relationship Manager/ Branch Manager. However, Branch will not disburse any
facility without proper documentation and if necessary, should obtain deferral approval from
CAD, Head Office.
Facilities Approved by the Head of Branch
Loan against financial obligation or others under the approval authority of Branch incumbent, if
authorized by Managing Director, may be disbursed after completion of documentation
formalities and signing of the Documentation Check List by the Head of the Branch and
countersigning by the CAD Officer of the Branch. Limit will be input in the system by the CAD
officer independently to control the accounts.
Valuation
Valuation of assets charged to the Bank is a crucial function, as it has a direct bearing on the
amount of loss that the Bank might have to suffer in the event that the Borrowers default. The
method of valuation employed, has to be appropriate to the nature of the assets.
All valuations must be supported with factual data, in order to qualify the collateral for credit
value; valuators estimates without supporting documents are not acceptable. Valuation should be
48 | P a g e
conducted by an enlisted Valuator of Banks choice. Where the exposure is not large, joint
valuation by Relationship Manager and another officer of the bank may be accepted since it will
not be cost effective. Apart from Valuators valuation independent valuation by Relationship
Manager and another Officer should also be carried out.
Legal Vetting
Mortgage documents should be properly vetted by the Bank's Legal Counsel. He/she will also
certify that proper documentation, borrower's legal standing and enforcement of securities are in
place. Finally, Lawyer's Satisfaction Certificate shall have to be obtained regarding
documentation where there are securities/collaterals other than Personal Guarantee and Financial
Obligation.
File Maintenance
Maintenance of credit files is an important part of the credit process and is required to determine
whether or not credit extensions are based on adequate and complete information. Credit files
contain records of analysis and business strategy information submitted to the Bank by the
clients. Adequate system is required to be in place to restrict access to this confidential
information to only those personnel who are authorized to use it and maintain it.
Each borrowing client should have separate and independent file(s) and shall be maintained
under the custody of the concerned Relationship Officer of Branch and Credit Officer of Credit
Department, Corporate Banking Division and Recovery Unit (Where applicable) of Head Office.
Credit Administration Department will also maintain independent files for each borrower where
copy of Sanction Advice, acceptance of the borrower, signed Documentation Checklist,
Disbursement Authorization Memo, Deferral letter and other papers related with
CAD will be maintained. It is the responsibility of the concerned officer for proper filing of
49 | P a g e
the papers to ensure that required information is easily locatable and maintained in good order.
An officer who does not handle the file will have to take written permission from the higher
authority to have access to it.
Steps in Documentation Process
Step-1: The Relationship Officer of Branch is responsible for getting the document signed by the
customer and completes the formalities of mortgage with the help of banks legal counsel. The
CAD Officer stationed in Branch will scrutinizes and reviews each document and mortgage
papers independently as mentioned in the Sanction Advice. After completion of documentation
formalities, the concerned Relationship Manager signs the duly filled in Documentation Check
List/Certificate of Documentation sent by Credit Department of Head Office. CAD Officer
countersigns the Documentation Check List/Certificate of Documentation if found in order and
sends it to the Head of Credit Administration seeking disbursement authority and loading the
facility in the system.
Step-2: All legal and banking documentation will be kept with utmost security in fire proof safe
(vault) separately from the credit file under dual custody. Documentation Check List should be
maintained in Credit File as well as in the Jacket of documents. Dual custodian and their
alternates are to be nominated by the Credit Administration Department. Safe in /Safe out
register of documents is to be maintained by Relationship Manager.
Step-3: If Credit Administration Department, Head Office found the Documentation Check List
having no discrepancy, Disbursement authority will be given to the concerned Relationship
Manager/ Branch Manager and CAD officer would load the limit in the system/database and
limit is made available to the customer for drawing.
50 | P a g e
Credit Monitoring Process
Credit monitoring and review is very important, because it ensures proper utilities and repayment
of Bank fund. Credit monitoring and review feature of UCBL is concerned was assessing the
quality of different type of loan. In classifying the loan and advance there are four classes in the
loan review practiced in United Commercial Bank Limited. They are as follows:
Unclassified
The loan account is performing satisfactorily in the terms of its installments and no overdue is
occurred. This type of loan and advances are fall into this class.
Substandard
This classification contains where irregularities have been occurred but such irregularities are
temporarily in nature. To fall in this class the loan and advance has to fulfill the following factor.
Category of Credit
S-T Agri & Micro Credit
Continuous loan
Demand Loan
Fixed Term loan
Time overdue (irregularities)

3 months & above but less than 6 months.
Un-recovered for 3 months & above but
less than 6 months from the date of the
loan is claimed.
Repayable within 5years: If the overdue
installment equals or exceeds the amount
repayable within 6 months.
Repayable more than 5years: If the
overdue installment equals or exceeds the
amount repayable within 12 months.
Substandard
The main criterion for a substandard advance is that despite these technicalities or irregularities
no loss is expected to be arise for the bank. These accounts will require close supervision by
management to ensure that the situation does not deteriorate further.
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Doubtful
This classification contains where doubt exists on the full recovery of the loan and advance along
with a loss is anticipated but cannot be quantifiable at this stage. Moreover if the state of the loan
accounts fall under the following criterion can be declared as doubtful loan and advance.
Category of Credit
Continuous loan
Demand Loan
Fixed Term loan

6 months & above but less than 12
months.
Doubtful
Un-recovered for 6 months & above but

less than 12 months from the date of the
loan is claimed.
Bad and Loss
A particular loan and advance fall in this class when it seems that this loan and advance is not
collectable or worthless even after all the security has been exhausted. In the following table the
criteria to be fulfilled to fall in this category are summarized:
Category of Credit
Continuous loan
Demand Loan
Fixed Term loan

Not recovered within more than 12
months.
Un-recovered more than 12 months from
the date of the loan is claimed.
Bad
and
Loss
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Foreign
Exchange
FOREIGN EXCHANGE
DEPARTMENT
Foreign Exchange Department is an important one in UCBL Rajshahi Branch that deals with
import, export, and foreign remittance and post import financing. Through this is an ancillary
service provided by the Bank. The Bank is purchasing primary security by giving loan in form of
loan against imported merchandise (LIM), and loan against trust receipt (LTR). Bank branch
should be Authorized Dealer with the approval of Bangladesh Bank to run foreign exchange
business. This department is playing an important role in enhancing export earnings, which aids
economic growth and, in turn, will be helpful for economic development. On the other hand, it
53 | P a g e
also helps to meet those goods and services, which are more demandable and not adequate in our
country.
Function of Foreign Exchange
L/C opening & L/C amendment
Sanctioning PAD, LIM, LTR, Packing credit
Foreign Bill Purchase
Local Bill Purchase
Foreign Currency Account Maintaining
Foreign Currency Remitted
The Foreign Exchange Department of UCBL is divided into three broad sections:
Letter of Credit
Letter of Credit is a payment guarantee to the seller by the buyers Bank. It is a Credit Contract
whereby the buyers Bank on behalf of the buyer is committed to pay an agreed amount of
money to the seller under some agreed conditions.
Form of Letter of Credit
A letter of credit (L/C) may be two forms. These as below:
Revocable Letter of Credit.
Irrevocable Letter of Credit.
Revocable L/C: If any letter of credit can be amendment or change of any clause or canceled by
consent of the exporter and importer is known as revocable letter of credit.
Irrevocable L/C: If any letter of credit cannot be changed or amendment without the consent of
the importer and exporter is known as irrevocable letter of credit.
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Contents of Letter of Credit
Banks normally issued letter of credit (L/C) on forms which clearly indicate the Banks name and
extent of the Banks obligation under the credit. The contents of the L/C of different Banks may
be different .In general L/C contains the following information:
Name of the Buyer: who is also known as the accounted since it is for his account
that the credit has been opened?
Name of the Seller: Who is also known as the beneficiary of the credit?
Moment of the Credit: When it should be the value of the merchandise plus any
shipping charges intent to be paid under the credit.
Trade Terms: Such as F.O.B/CIF.
Tenor: Tenor of the Draft which is normally dependent upon the requirements of the
buyer.
Expiration Date: Which is specified the latest date documents may be presented. In
this manner or by including additionally a latest shipping date, the buyer may exercise
control over the time of shipment.
Documents Required: Which will normally include commercial invoice consular or

customers invoice, insurance policies as certificates, if the source is to be effected by
the beneficiary and original bills of lading.
FOREIGN EXCHANGE IMPORT

Import policy refers to government policies account for a particular fiscal period envisaging the
allocation of fund available from various sources for import of certain quantity of certain goods.
The main purpose of the policy is to conserve scare foreign exchange & to ensure its utilization
for the import of goods and services which have national priority. The selected persons on
institutions those who have got valid Import Registration Certificate (IRC) form the Chief
Controller of Import and Export (CCI & E) can import and they are known as importers
Flow Chart of Import Procedure

1. Importer Orders Goods
3. Importer
Arranges for
2. Exporter Agrees to Fill Order
Internship Report on General Banking Credit Management & Foreign Exchange of UCBL L/C
55 | P a g e
Exporter
6. Goods Shipped to
Importer
10&11. Exporter
Sells Draft to
Bank
Importer
12. Banks Tells

Importer Documents
Arrive
13.
Importer
Pays Bank
14. Importer
Importer Bank Presents
Open
an L/C by the
Exporter
Importer
Matured Draft & Gets
Bank
Bank
An Importer is required to fulfill some conditions/criteria
to be eligible as an importer as per
Payment
8. Importer
to Exporter
provisions of import policy
order andBank
guidePresents
lines forDraft
Foreign
Exchange Transaction. An importer
Bank
is Importer
required to submit the following documents along with L/C applications to get a license to
5.
Bankgoods through UCBL. 9. Importer Bank Returns Accepted
import
Draft
Informs
A current account
with
UCBL,
Mohakhali
Branch.
Exporter
4. Importer Bank Sends L/C
to Exporter
L/C Import Registration Certificate (IRC)
Bank
Pro-forma Invoice/Indent
Tax Identification Number (TIN)
Membership Certificate from recognized Chamber of Commerce and Industry.
Letter of Credit Authorization (LCA) from duly attested.
L/C application duly signed by the importer.
One set of IMP form.
Insurance Cover note with money receipt.
Import Registration Certificate
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. After obtaining this, the person has to secure a Letter of Credit
56 | P a g e
authorization (LCA) from Bangladesh Bank and then he becomes a qualified importer. He is the
person who requests or instructs the Issuing Bank to open a Letter of Credit. He is also called
applicant of the credit.
Indent or Proforma Invoice
Indent or Performa invoice is the sale contract between seller and buyer in import-export
business. There is slight difference between indent and Performa invoice. The sales contract,
which is direct correspondence between importer and exporter, is called Performa invoice. There
is no intermediary between them. On the other hand, there may be an agent of exporter in
importers country. In this regard, if the sale contract is occurred between the agent of exporter
and importer then it is called indent.
Letter of Authorization Form (LCAF)
The Letter Of Credit Authorization Form is the form prescribed for the authorization of opening
letter of credit or payment against import and used in lieu of import license. The authorized
dealers are empowered to issue LCA forms to the importers to allow import in Bangladesh. If
foreign exchange, it is intended to be bought from Bangladesh Bank against a LCAF, it has to be
registered with Bangladesh Banks Registration Unit located in the concerned area office of the
CCI&E. the LCA forms available with the authorized dealers are issued in a set of five copies
each.
First copy is exchange control copy, which is used for opening of L/C and effecting
remittance.
Second copy is the custom purpose copy, which is used for clearance of imported goods
from custom authority.
Triplicate and Quadruplicate copy of LCAF are sent to concerned area of CCI&E office
by authorized dealer/Registration Unit of Bangladesh Bank.
Registration Unit keeps quintuplicate copy as office copy.

57 | P a g e
When a client approaches for issuance of letter of credit, Import section of United Commercial
Bank Ltd. Checks the following:
Whether the item for import of which the documentary letter of credit need to be opened
is permissible i.e. not include in the restrictive list as per Import policy Order in force.
Whether there are any legal/technical defects/restrictions in opening the letter of credit
under the various sources as intended by the customer.
Whether the Bank is holding satisfactory credit report on the beneficiary to satisfy the
guidelines for foreign exchange transactions.
Importer Application for L/C Limit
The importer must have sufficient credit line for opening an L/C. In case the client does not have
approved credit line for opening an L/C the Manager of the branch takes necessary arrangement
to submit a proposal to the Credit Committee/Executive.
Committee of the Board keeps pending of opening the L/C till its approval. On receipt of the
approval the Manager issues a sanction letter to the client providing copies of the same to Credit
Division. To have an import credit line, an importer submits an application to the Foreign
Exchange Department of UCBL, Mohakhali Branch furnishing the following:
Full particulars of Bank account.
Nature of the business.
Required amount of limit.
Payment terms and conditions.
Goods to be imported.
Offered security.
Repayment schedule.
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A credit officer scrutinizes this application and prepares the proposal accordingly and forwards it
to the Head Office Credit Committee. The Committee, if satisfied sanctions the credit line and
returns back to the branch. Thus the importer is entitled to the credit.
L/C Application
L/C Application is a sort of arrangement between client and Bank. UCBL provides a printed
form for opening a L/C to the importer. Usually the importer expresses his desire to open a L/C
quoting the amount of margin in percentage. The importer gives the following details:
Full name and address of the Applicant.
Full name and address of the Beneficiary.
Draft amount (both in figure and word).
The form of credit whether Revocable or Irrevocable.
Whether the credit is available by payment, acceptance or negotiation.
On which party the draft are to be drawn and the tenure of such draft.
A brief description of goods, including details of quantity and unit price.
Whether the freight is to be prepaid or not.
The country of origin.
The port of shipment and destination.
The last date of shipment.
Partial shipment is allowed or not.
The date and place of expiry of the credit.
Negotiation period.
Details of the documents required and mode of transmission of documents

(swift/mail/telex).
The time bar within which the documents should be presented.
Whether the credit is to be transferable one or not.
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Sales terms (FOB/ C&F/ CIF).
Shipping mark.
IRC Number and LCA Number.
Insurance cover note.
Additional Instruments/Conditions:
Shipment/Transshipment not effected by Iraq, Montenegro, Cuba, Libya, Serbian, Israel,
flag vessels/carriers or any vessel/carrier calling at any port of Iraq, Israel, Serbia,
Montenegro, Cuba, Libya is prohibited.
Radiation certificate is required in case of food items.
All charges outside Bangladesh are of account of importer or beneficiary.
The above information is provided along with the following documents:
1.
Performa Invoice or Indent stating the description of the goods including quantity,
unit price etc.
2.
Insurance Cover Note with money receipt, name and address of issuing company
and the policy number.
3.
Four set of IMP (Import) Form.

Scrutiny of L/C Application
On receipt of L/C application, the branch officials scrutinize the same very carefully giving
emphasis to the following:
The terms and conditions of the L/C must be complete with UCPDC 500 and Exchange
Control & Import Trade Regulation.
L/C application is stamped, as it is a guarantee of payment.
All the information mentioned in different columns has been furnished.

60 | P a g e
Eligibility of the goods to be imported.
If L/C is opened against indent, Bangladesh Banks permission, valid registration, authority to
issue indent by indenter are to be checked.
1) The L/C must not be opened in favor of the importer or his agent.
2) The importer agreeing all terms and conditions mentioned in the application must
sign L/C.
3) IMP form duly filled and signed.
4) Validity of IRC.
5) HS code of the goods.
6) Insurance cover mode with date of shipment.
7) Radioactivity report in case of old machinery.
8) Certificate declaring that the item is in operation not more than 5 years in case of
car.
Account Procedure in Case of L/C Opening
When the application is found to be in order and the client has sufficient approved credit line for
opening an L/C, vouchers are prepared to record the contingent Liability for the L/C opened and
realized margin, commission, Telex charges, postage etc. as per Banks schedule of
charges/sanction letter. Accounting treatment at the time of L/C opening is follows:
For recording Contingent Liability:
Customers Liability
Bankers Liability
Debit
Credit
For realization of margin, commission, telex and other charges:

Customer A/C
Margin on L/C
Debit
Credit
Commission on L/C
Credit
61 | P a g e
SWIFT/Postage Charge
Credit
Miscellaneous Charge
Credit
After that, L/C number and above entries are given in the L/C opening register has following
details:
Date, L/C number, Name of the customer, Foreign currency amount, Exchange rate, Taka
equivalent and source of import.
Goods, country of origin, advising Bank, expiry date, margin.
Charges: Commission, Postage, SWIFT.

Distribution
After giving the accounting entries the transmission of L/C is done. UCBL takes the following
steps through SWIFT to advise the L/C to the beneficiary:
Send the signed original L/C together with the copy to the dispatch section for mailing to
the L/C advising Bank and L/C reimbursement Bank respectively by Courier/ Air mail.
Send the approved text of L/C and reimbursement authorization to SWIFT service incharge for their onward transmission to advising Bank and reimbursing Bank
respectively.
Deliver the customer copy of the L/C along with the Debit Advise to the customer over
the counter or send the same to the dispatch section for onward delivery to the customer.
Send the original accounting vouchers in batches to the accounts section for capture and
updating of the data-base/records.
Check the L/C file to ensure that all the related documents i.e. L/C application with
supporting documents, approval, L/C copy, reimbursement instruction copy and copy of
accounting vouchers are filled properly.
Amendment of L/C
Parties involved in a letter of credit, particularly the seller and the buyer cannot always satisfy
the terms and conditions in full as expected due to some genuine reasons. In such a situation, the
letter of credit is amended. In Revocable letter of credit, it can be amended or cancelled by the
issuing Bank at any amount and without prior notice to the beneficiary. But in case of irrevocable
62 | P a g e
letter of credit, it can never be amended or cancelled without the agreement of the issuing Bank,
the confirming Bank (if any) and the beneficiary. When the customer approaches for amending
the terms and conditions of a L/C opened at his request, UCBL checks the following:
The type of amendment the customer is asking for:
Whether it is concerning an increase of decrease in the L/C amount.
Whether it is concerning extension of shipment/expiry date of the L/C.
Whether it is relation to change in the merchandise/mode or route of transportation.
Depending on the type of amendments, Bank has to review the matter in the same way as
applicable while opening a L/C in accordance with the provisions.
Procedure
On receipt of a request letter for amendment of L/C from the customer the Bank takes the
following steps:
Record the date and time of receipt of the application.
Read the request letter for amendment briefly to ensure that concerned L/C number and
the instructions mentioned are clear.
If found in order check the request letter for amendment together with all supporting
papers.
In case the letter of amendment is completed or required papers neither are nor submitted,
the customer should be contacted promptly for rectification of the defects.
In case the customers do not have approved credit line for increasing/amending the L/C,
the import section has to submit proposal to the Executive Committee of the Board and
keep pending of amending the L/C till its approval.
When the request letter for amendment with all papers found to be in order, record the
particular of amendments with date in appropriate column against the relevant L/C in the
L/C register.
63 | P a g e
Prepare the letter of amendment either in mail, SWIFT telex format.

Account Entries
After preparing the letter of amendment, the Bank prepares the vouchers to amend the amount of
contingent liability for increase (in case of increase in L/C value) and commission
& charges. In case of decrease in L/C value, refund the margin to the credit of customer account
if the L/C was established under 100% margin, otherwise management consent is required. The
accounting treatments are as follows:
For amending contingent liability:
Increase of L/C value Customer Liability
Bankers Liability
Decrease of L/C value Customer Liability

Customers Liability
Debit
Credit
Debit
Credit
For increase of L/C value,

Customer A/C
Margin on L/C
Debit
Credit
Commission on L/C
Credit
Credit
Credit
Form refunding customers liability (after the amendment by the advising Bank)
Margin A/C
CD account of customer
Debit
Credit
UCBL, Rajshahi Branch transmits the letter of amendment to the advising Bank and L/C
Reimbursing Bank respectively by Courier/ Air Mail. A letter of amendment executed by the
64 | P a g e
issuing Bank becomes enforceable only after agreement of the party in documentary credit
operation.
Lodgment of import Documents
On scrutiny, if it is found that the documents drawn in conformity with the terms of the credit,
United commercial Bank Rajshahi Branch lodges the documents in Payment Against Documents
(PAD) register/database giving a bill reference serially in numerical order.
The Bank that opens the letter of credit is bound to honor its commitment to pay for import bills
when these are presented for payment, if drawn strictly in terms of letter of credit. The opening
Bank will lodge the shipping documents to their book and will respond to the debit advice
originated by the foreign correspondent to the debit of Payment Against Documents A/C or
Bills of Exchange A/C and present the bill to the importer for payment.
The following steps are involved in lodgment:
First all the particulars of the documents are entered in the PAD register
and PAD No seal is given on all the copies of the received documents.
Convert the foreign currency into Bangladeshi currency.
Reverse the contingent liability and entry made in the liability register.
Prepare lodgment voucher.
Send IBCA to the Head Office.
Make intimation to the importer.
Retirement of Documents
The importer receives the intimation and gives necessary instruction to the Bank for retirement
of the bills or for the disposal of the shipping documents to release the imported goods from the
customs authority. The importer may instruct the Bank to retire the documents by debiting his
65 | P a g e
account with the Bank. During delivery of the documents the following accounting entry is
given:Customer or LTR A/C (with PAD interest)
Debit
Margin on L/C A/C

PAD A/C
Debit
Credit
Interest/Commission
Credit
Post Import Financing
If there is no available in cash in importers hand, he can request the Bank to grant loan against
the documents for the purpose of post import finance. There are two following forms of post
import finance available in UCBL Rajshahi Branch.
LIM (Loan against imported merchandise).
LTR (Loan against trust receipt).
On the arrival of goods and lodgment of import documents, importer may request the Bank for
clearance of goods from the port (custom) and keep the same to Bank Godown. Proper sanction
from the authority is to be obtained before clearance of consignment. For giving these types of
loan, officer makes loan proposal and sends it to H/O for approval. After getting approval from
H/O, Bank grants loan in the form of either LTR or LIM.
Account Entries
LIM/LTR creation:
LTR/LIM (Importer) A/C

PAD A/C
Debit
Credit
After payment of the loan or delivery of goods:

Partys A/C
Debit
66 | P a g e
LTR/LIM A/C
Credit
Interest A/C
Credit
By and large, it is mentioned herewith that Bank only deals with the documents, not with goods
& services in case of foreign exchange business.
FOREIGN EXCHANGE EXPORT

According to Foreign Exchange Regulation Act, 1947, nobody can export by post and otherwise
any goods either directly or indirectly to any place outside Bangladesh, unless a declaration is
furnished by the exporter to the collector of customs or to such other person as the Bangladesh
Bank may specify in this behalf that foreign exchange representing the full
export value of the goods have been or will be disposed of in a manner and within a period
specified by Bangladesh Bank. Payment for goods exported from Bangladesh should be received
through an Authorized Dealer in freely convertible foreign currency or in Bangladeshi Taka from
a Non-Resident Account.
The Export section deals with two types of Letter of credit that are as follows:
Back to Back Letter of Credit

67 | P a g e
Back-to-Back L/C is a secondary L/C opened by the sellers Bank based on the original/master
L/C to purchase the raw materials and accessories for manufacturing of the export products
required by the seller.
In our country, export oriented Garment Industry, operating under bonded warehouse system are
availing Back-to-Back facilities. In UCBL, Rajshahi Branch most of the Backto-Back L/C
opened on Garment Industry Account. Therefore the discussion is based on account of garment
Industry in Bangladesh.
Opening Back to Back L/C
Besides normal formalities and requirements for L/C opening, the following points are
considered.
No Back-to-Back L/C on account of Garment industries should be opened without prior
approval from Head Office. Branches are required to obtain prior approval from Head
Office Division/Credit Committee for opening all Back-to-Back L/C.
While opening of Back-to-Back L/C following instruction should be followed.
At first, UCBL needs to check in the Performance Register whether the B/B L/C
has the validity to open the L/C. The bank makes sure that the last date of
shipment date in CF7 is 15 days earlier than that of performance register.
After that, UCBL will check that the total amount of B/B L/C will not exceed the
75% of the Master L/C.
If everything goes in order, the officer will give entry on the register of B/B L/C
registers and put a number of the B/B L/C. Separate L/C number should be used
for Back-to-Back L/C and are to be recorded in separate Register.
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Necessary information are written down in the performance register. Next, the dispatch employee
will write down the confirmation letter which is send to the Bank of the importer.
Account Entries
Creation of Shipping Guarantee Liability:

Customers liability for Back-to-back L/C
Bankers liability for Back-to-Back L/C
Debit
Credit
For realization of margin, commission, telex and other charges:
Customer A/C
Commission on L/C
Debit
Credit
Stamp
Credit
LCAF (If Foreign)
Credit
IMP (If EPZ & Foreign)
Credit
Credit
Credit
Documents Required for Back to Back L/C
In United Commercial Bank Ltd. Rajshahi Branch, following papers/ documents are required for
opening a Back-to-Back L/C.
Master L/C
Valid Import Registration Certificate (IRC) and Export Registration Certificate

(ERC).
L/C Application and LCAF duly filled and signed.
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Pro forma Invoice
Indemnity or undertaking
No objection from previous Bank (if any)
Factory inspection certificate
Insurance cover note with money receipt
IMP form duly signed
VAT Registration
In addition to above documents, the following are also required to export oriented garments
industries while requesting for opening a Back-to-Back L/C
Textile Permission
Valid bonded warehouse license
Quota Allocation Letter issued by the Export Promotion Bureau (EPB) in favor of
applicant for quota items.
BGMEA Membership.
In case the factory premises is a rented one, the Letter of Disclaimer duly executed by the owner
of the house/premises to be submitted. A checklist to open a Back-to-Back L/C as follows:
Applicant is registered with CCI&E and has bonded warehouse license.
The master L/C has adequate Validity period and has no defective clause.
L/C value shall not exceed the admissible percentage of net FOB value of relative
master L/C.
Usage period is up to 180 days.
Lodgment of Back to Back L/C
On receipt of original shipping documents, the documents should be checked with L/C terms
immediately. If any discrepancy is observed, then it has to be informed Foreign Bank by telex
within 7 days from the date of receipt of documents. Acceptance on bill of exchange of original
70 | P a g e
import bill must be obtained from the importer and lodged in Inward Foreign Documentary Bill
for Collection (IFDBC) register.
Shipping guarantee liability to be reserved and acceptance liability to be created by passing
following voucher.
Account Entries
Reversal of Shipping Guarantee Liability:
Bankers liability for Back-to-back L/C

Customers liability for Back-to-Back L/C
Debit
Credit
Creation of Acceptance Liability:
Customers liability for Acceptance

Bankers liability for Acceptance
Debit
Credit
Retirement of Back to Back L/C
Accepted bill be paid on maturity positively to fulfill international commitment. Accepted bills
are to be paid from the repatriated export proceeds of relative export L/C.
Account Entries
Sundry Deposit
Head Office ID
Debit
Credit
71 | P a g e
Reversal of Acceptance Liability:

Bankers liability for Acceptance
Customers liability for Acceptance
Debit
Credit
Payment Export Retention Quata
40% of realized FOB value in F/C accounts.

7.5% of realized FOB value in F/C accounts in F/C accounts in case of high import
content.
5% of repatriated value in case of legal, consultancy & similar services.
Payment Against Documents (PAD)
Banks deal in documents and not in goods. If the shipping document against the L/C is in order
than the L/C opening Bank must have to payment to the foreign Bank within 3 days or 72 hours
according as Uniform Customs and Practice for Documentary Credit (UCPDC) 500 of revision
of ICC.
If the shipping documents have any discrepancy, then the L/C opening Bank informed to the
negotiating Bank within 7 days. Otherwise, the shipping documents have not discrepancy. If the
importer have not adequate founds in the Bank account then the Bank payment to the foreign
Bank against the shipping documents.
Export Financing Techniques
An exporter requires finance at two stages namely
Pre-shipment stage
Post-shipment stage
The credit facility available to the exporters at the former stage is known as pre-shipment credit
and the same required at the later stage is known as post-shipment credit.
72 | P a g e
Pre-Shipment Credit
Pre-shipment credit covers credit facilities extended to the exporters by commercial Banks prior
to the actual shipment of goods. The purpose of such credit is to meet working capital
requirements starting from the point of purchasing of raw materials to transportation of goods for
export to foreign countries. Financing at the pre-shipment stage is generally called Packing
Credit although its range is much wider than the stage of packing only. Pre-shipment credit
usually takes the following forms:
Export Cash Credit (Hypothecation)
Export Credit (Pledge)
Export Credit against Trust Receipt
Packing Credit
Back to Back Letter of Credit
Credit against Red Clause Letter of Credit
Export Cash Credit (Hypothecation): In this case, a credit is sanctioned to the exporter
depending upon his credit requirements against the security of hypothecation of rawmaterials and / or finished goods meant for export. The Banks usually insist the exporter to
provide collateral security.
Export Cash Credit (Pledge): Under this arrangement, a cash credit limit is sanctioned
against security of pledge of exportable goods or raw-materials. Sometimes collateral
security is also obtained.
Export Credit against Trust Receipt: In this case, credit limit is sanctioned against Trust
Receipt. In this case raw materials and finished goods remain in the custody of the exporter.
73 | P a g e
Packing Credit: Under this arrangement, a credit limit is sanctioned to the exporter against
the security of Railway Receipt/Steamer Receipt/Barge/Truck Receipt evidencing
transportation of goods to the port in addition to the usual charge documents and export
L/C. Usually collateral security is obtained against the facility.
Back to Back Letter of Credit: In this case, the Bank finances an export trade normally
by opening an L/C on behalf of the exporter/export house or agency who has received an
Export L/C from the overseas buyers..
Credit against Red Clause Letter of Credit: A Red Clause Letter of Credit is a Letter of
Credit (Export) which contains a clause written or typed in red ink by which the opening
Bank authorizes the advising Bank/negotiating Bank to allow advances to the beneficiary
of the L/C for procurement of exportable goods.
Post-Shipment Credit
Post-shipment Credit refers to the credit facilities extended to the exporters by commercial
Banks after shipment of the goods against export documents.
Banks in our country generally extend post-shipment credit to the exporters through:
Negotiation of documents under Letter of Credit
Purchase/Discount of DP and DA Bills
Advances against Export Bills surrendered for collection
Negotiation of documents under Letter of Credit
Purchase/Discount of DP and DA Bills:.
Advances against Bills for Collection:
Inco-terms
Inco-terms (International Commercial Terms) are a series of international sales terms widely
used throughout the world. They define monetary transaction and role responsibilities for both
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sides of the international trading buyer and seller transaction. The purpose of standardized incoterms is to determine export and import clearance responsibilities, who is owning the risk for the
condition of the products at each stage in the transport process, and who is responsible for paying
for what.
The 13 Inco-terms are:
Origin Terms
EXW - Ex-Works, named place where shipment is available to the buyer, not loaded. The
seller will not contract for any transportation.
International Carriage NOT Paid by Seller

FCA - Free Carrier, unloaded at the seller's dock OR a named place where shipment is
available to the international carrier or agent, not loaded. This term can be used for any
mode of transport.
FAS - Free Alongside Ship, named ocean port of shipment. Ocean shipments that are not
containerized.
FOB - Free On Board vessel, named ocean port of shipment. This term is used for ocean
shipments only where it is important that the goods pass the ship's rail.
International Carriage Paid by the Seller
CFR - Cost and Freight, Named ocean port of destination. This term is used for ocean
shipments that are not containerized.
CIF - Cost, Insurance and Freight, named ocean port of destination. This term is used for
ocean shipments that are not containerized.
CPT - Carriage Paid To, named place or port of destination. This term is used for air or
ocean containerized and roll-on roll-off shipments.
CIP - Carriage and Insurance Paid To, named place or port of destination. This term is
used for air or ocean containerized and roll-on roll-off shipments.
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Arrival At Stated Destination

DAF - Delivered At Frontier, named place of destination, by land, not unloaded. This
term is used for any mode of transportation but must be delivered by land.
DES - Delivered Ex-Ship, named port of destination, not unloaded. This term is used for
ocean shipments only.
DEQ - Delivered Ex-Quay, named port of destination, unloaded, not cleared. This term is
used for ocean shipments only.
DDU - Delivered Duty Unpaid, named place of destination, not unloaded, not cleared.
This term is used for any mode of transportation.
DDP - Delivered Duty Paid, named place of destination, not unloaded, cleared. This term
is used for any mode of transportation.
Analysis and Interpretation of the data:

Import Business
United Commercial Bank Limited has embarked on Extensive foreign exchange with a view
to facilitating international trade transactions of the country. The total export business handled by
United Commercial Bank Limited amounted to Tk.58857 million during the year 2009.
Table-1
Foreign Exchange Business-Import
Year
Import
(Figure in millions)
2005
29408
2006
39853
2007
60329
2008
60009
2009
58857
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Import Business From 2005-2009
Export Business
The total export business handled by United Commercial Bank Limited amounted to TK. 38519
million during the year 2009.
Table-2
Foreign Exchange Business-Export
Year
Export
(Figure in Millions)
2005
14785
2006
20803
2007
27230
2008
36500
2009
38519
Export Business From 2005-2009
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A comparison among import, Export:
Year
Import
(Figure-in millions)
Export
(Figure-in millions)
2005
29408
14785
2006
39853
20803
2007
60329
27230
2008
60009
36500
2009
58857
38519
Major Drawback of UCBL in Foreign Exchang Business:
In recent years, the foreign exchange business of United Commercial Bank Limited is increasing
at a faster rate. Now a days United Commercial Bank Ltd. rendering a stable support to the
national Foreign Exchange Business. Although the Foreign exchange Business loading day by
day there are also some obstacles around it they are as per observations Insufficient presence of modern communication equipment.
Application of modern technology such as computerization is not sufficient.
Poor conditions of balance of payments of United commercial bank Limited.
Lack of enthusiastic scheme for exporter & importer.
Less attractive remuneration package and motivation for the Employees.
Lack of fair entrepreneur class.
Knowledge of entrepreneur about foreign trade policy is so poor
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Commission for collection:
Up to 1 lack ---------------------------------------------- 0.15%

Above 1 lack---------------------------------------------- 0.10%
Above 5lack ---------------------------------------------- 0.05%
FOREIGN REMITTANCE
Foreign Remittance means purchase and sale of freely convertible foreign currencies as
admissible under Exchange Control Regulation of the country.
The transaction of the authorized dealer in foreign exchange involves either outward or inward
remittances of foreign exchange from one country to another. As an authorized dealer the
Local Office Branch of UCBL provides its customer foreign remittance by FBC, LEBC,
sale, and purchase of FTT, FDD, travels cheque, FBP.
The Bank provides the foreign remittance facilities to the student studying aboard. Bank also
provides foreign exchange in the shape of travelers cheques to the intending visitors.
Foreign Inward Remittance
The remittance which is received from abroad are called foreign inward remittance.
Foreign Outward Remittance
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Remittance which is made from our country to abroad is called foreign outward
remittance.
Foreign Bills Collection
Foreign bills for collection refer to collection procedure of foreign DD/PO/Cheques as per
arrangement between UCBL and its corresponding Banks. The collection procedure is as
follows:
Entries in the FBC register and get a FBC number. This number will be on the bill and be
treated as reference no.
Forward the bill along with a forwarding letter to the corresponding Bank. Send the draft
through courier service and keep a courier receipt in the file.
Crossing on the bill indicating UCBL as a collecting Bank. Endorsement on the back of
the bill Payees A/C will be credited on realization.
Prepare a liability voucher.
A photocopy of the bill to be kept on the file.

Travelers Cheque
Travelers cheques are issued by Banks to avoid the risk of loss or inconvenience in having to
carry large amount of cash while traveling. The salient features of travelers cheque are:
The buyer of the travelers cheque no need to be a customer of UCBL
The buyer has to deposit money with the branch of UCBL equivalent to the amount of
T.C he wants to buy.
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Each T.C has signed by the buyer at place marked when countersigned below with this
signature, before the UCBL officer.
T.C. is issued in single name. Its not issued in joint names or names of clubs, societies
and companies.
There is no expiry period for the T.C.
Types of Foreign Currency Account
Foreign currency account is a product where an account holder can keep his money in any
specified foreign currencies and convert them into Taka as required. Bangladeshi nationals
residing abroad, foreign nationals residing abroad or in Bangladesh, foreign firms registered
abroad and operating in Bangladesh or abroad, and foreign missions and their expatriate
employees in Bangladesh can open Foreign Currency (FC) accounts.
Non-resident Foreign Currency Deposit A/C (NFCD)
Resident Foreign Currency Deposit A/C (RFCD)
Foreign Currency A/C Opening Procedure
Pursuant to section 21 of the PFA 1989, foreign-currency Bank accounts may only be
operated under the terms of a Direction for Foreign-Currency Departmental Bank Accounts
or a Notice of Delegation Regarding Crown Bank Accounts issued by the Treasury.
81 | P a g e
The department must apply in writing to their Treasury Vote Team to open a foreigncurrency Bank account. The application should include:
whether a Crown or departmental account is required;
the business justification for the Bank account;
the currency and required exposure limit;
the Bank and location at which the account is to be opened;
the credit rating of the Bank;
whether the account is to be interest-bearing; and
the names or job titles of the authorized signatories.
The Vote Team will consider the application in terms of the business justification and
Treasurys minimum credit criteria. They will advise BMB whether or not they are in support
of the departments application.
If the Vote Team is in support of the application, BMB will process the request and issue
a Direction or Delegation to the department to operate the Bank account. In the event that the
Vote Team declines the application e.g. where the Bank does not meet Treasurys credit
criteria and there is an alternative Bank available which does, the department will require
joint ministerial approval should they wish to proceed with their application.
Once Treasury has approved a Bank account and the appropriate Direction or Delegation
issued, the department will need to update their list of approved counterparties in their
Foreign-Exchange Policy Document.
Their Treasury Vote Team must also approve any proposed changes to a departments
Banking arrangements. The application must be made in writing and state:
What the required change is;
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The reason for the change, including any supporting documentation; and
Where the request is to close a Bank account, confirmation that the account has
been reconciled to a zero balance and that no transactions are outstanding.
Daily Statement of Affairs of the Branch
The account section maintains the daily and statement of affairs of the branch. Every day the all
the vouchers with the supplements are sent to the Principal Branch. The branch has products
where it can earn and various expenditures.
Voucher system is used for every transaction. Voucher has to be prepared either in cash or in
transfer or in clearing, the Sheet upon which these vouchers are summarized transactions-wise
and consolidated into a figure is called supplementary.
Types of Supplementary
Debit Supplementary
Credit Supplementary
Debit supplementary is used for debit voucher and credit supplementary is used for credit
voucher books and registered maintained by bank are as follows:
General ledger
Statement of daily affairs.
Cash book or Cash cum day book.
Transfer book
Income and expenditure ledger, etc.
Income Includes
Interest income
Handling charges
Service Charges
Commission (from utility services)
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Expenditures Includes
Salaries, allowances and provident fund
Rent, taxes, insurance, lighting etc.
Profit paid on deposits and borrowings
Postage, telegram and stamps
Stationary, printing and advertisement charges etc.
Auditor's fee and legal charges.
FINDINGS OF
STUDY
The Head Office sets up the rate of interest or product cost. Interest rate has to be within a
limit for every bank, which is notified by the Bangladesh Bank.
In general banking department they follow the traditional banking system. The entire general
banking procedure is not fully computerized.
They are not using Data Base Networking in Information Technology (IT) Department. So
they have to transfer data from branch to branch and branch to head office by using floppy
disk and sure it is not a good system.
According to some clients, opinion introducer is one of the problems to open an account. If a
person who is new of the city wants to open account, it is a problem for him/her to arrange an
introducer of SB or CD accounts holder.
Credit allocation is set-up by the Head Office Credit committee. The Head of the Branch
can authorize credit up to Tk.20 Lac.
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Sometimes clients and customers are moving here and there inside the bank premises. So it
hampers the smooth functioning and security system of the bank.
Quality development may help the bank to hold on the old customers and attract potential
customers.
The number of Brochure is not sufficient to supply information to the clients for their query.
RECOMMENDA
TIONS
It is quite difficult to give suggestion to improve the banking conditions of UCBL. As we know
that nothing is perfect, there is always a room for improvement, so I have found during my
internship can be made up taking into account the following suggestions.
Offers more facilities to the customers such as Debit card, ATM booth
etc.
General working conditions ought to be improved
Should has own photocopy machine.
Should increase the number of computers as well printers with proper UPS facility.
PcBANK2000 database software has no option for preparing Bank statement. It needs to
be upgraded in order to remove this kind of problem.
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To speed up the Foreign Exchange works, database software should be introduced for this
department.
The branch still works very manually; to accelerate the whole branch it should be
automated.
CONCLUSION
United Commercial Bank Limited is providing and maintaining pleasant working environment
for delivery of better quality services to maintain edge over the competitors. At the same time it
has been also found that United Commercial Bank Limited is participating in the growth of our
national economy with high quality, information technology driven innovative services to its
clients by its own dedicated team of professionals.
United We Achieve
86 | P a g e
BIBLIOGRAPHY
www.ucbl.com
www.bangladesh-bank.org
www.wikipedia.com
L/C Application Form
87 | P a g e
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EXECUTIVE

Understanding the environment, functions and management of the organization for my

Narrating experience in working in UCBL

To apply theoretical knowledge in the practical filed in order to formulate a problem to

Defining and analyzing the problem.

To learn about banking more thoroughly.

To relate the theoretical knowledge with the practical content.

The website of UCBL does not contain updated information.

UCBL does not possess any Annual Report or Brochure.

I have to submit the report within short period.

OVERVIEW OF UNITED COMMERCIAL BANK LTD

Corporate Information at a Glance?

Executive Officer (EO)

Management Trainee Officer

Products and Services

Products & Services

UCB Multi Millionaire

UCB DPS Plus

Western Union Money Transfer

Time Deposit Scheme

Procedure of Cash Receipt

Record it in the Record Book and put scroll no in the cheque

Procedure of Cash Payment

Cheque is handed over to the cash payment officer for payment.

Cash Book Balance

Cash Insurance Limit

On-Line Banking Operations

Deposit cash in any branch in any account

Withdraw cash from any branch

Transfer from any account to any branch

There are several charges for online transaction. Such as-

Inter City Transaction charges:

Within City Transaction charges:

ACCOUNT OPENING DEPARTMENT

Savings Bank (SB) Account

Current Deposit (CD) Account

Short Term Deposit (STD) Account

Fixed Deposit Receipt (FDR) Account

Monthly Savings Schemes

Deposit Pension Scheme Plus

Money Maximize Scheme

Rates of Interest on Deposits

Rate of Interest (% p.a)

Formalities for Open an Account

Application on the prescribed form

Introduction of the applicant

Copy of passport/National Identity Card/ Voter ID Card/ Certification from Word

Details of occupation/employment and sources of wealth or income.

Same as personal account plus Trade License.

Same as personal account plus Trade License and Partnership deed

Memorandum and Articles of Association.

Resolution of the Board of directors.

Maintenance of Specimen Signature Card

The client writes a written application

She/he surrenders the unused checkbook

The bank takes charge TK. 200.00 for closing fee

The rest amount gives to the customer

Issuance of Cheque Book

Cheque Book Issue Charge

ACCOUNT BILLS & REMITTANCE DEPARTMENT

Issuance of Pay Order

The customer should fill up PO application form.

Money should be received by cash or by debiting clients account.