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ASSIGNMENT ON

COMMERCIAL BANK
(STANDARD BANK
LTD.)
BANKING LAW &
PRACTICE

SUBMITTED TO
SUBMITTED BY
SK. ALAMGIR HOSSAIN
GROUP NO- 21
LECTURER
BATCH, BBA.
DEPARTMENT OF FINANCE
DEPARTMENT OF FINANCE
JAGANNATH UNIVERSITY
JAGANNATH UNIVERSITY

7 TH

DATE OF SUBMISSION 29/03/2015

Group list
NAME

KISHANDATTA
EASIN ARAFAT
MD.AKRAM
HOSSAIN
YEAKUB
HOSSAIN
MD.RASAD
AMIN

ID NO
B-120203008
B-120203042
B-120203046
B-120203090
B-110203066

Introduction
The services of commercial bank primarily revolve round
mobilization of deposits and lending the same to those needing
finance for their business and other activities. A broader definition
of a bank is any financial institution that receives, collects,
transfers, pays, exchanges, lends, invests, or safeguards money
for its customers.

Commercial bank
Commercial banks specialize in loans of commercial nature
especially short term loans to industries and businesses and
individuals.
Commercial banks are the oldest financial institutions. The
occupy and important position in the financial landscape
of nearly every country.

Standard Bank Limited (SBL) was incorporated as a Public


Limited Company on May 11, 1999 under the Companies Act,
1994 and the Bank achieved satisfactory progress from its
commercial operations on June 03, 1999. SBL has introduced
several new products on credit and deposit schemes. It also goes
for Corporate and Retail Banking etc. The Bank also participated
in fund Syndication with other Banks. Through all these myriad
activities SBL has created a positive impact in the Market.

Objectives


To be a dynamic leader in the financial market in innovating
new products as to the needs of the society.

To earn positive economic value addition (EVA) each year to


come.

To top the list in respect of cost efficiency of all the


commercial Banks.

To become one of the best financial institutions in


Bangladesh economy participating in the most significant
segments of business market that we serve.

Vision
To be a modern Bank having the object of building a sound
national economy and to contribute significantly to the Public
Exchequer.

Mission
To be the best private commercial bank in Bangladesh in terms of
efficiency, capital adequacy, asset quality, sound management
and profitability.

Activities of Standard Bank


General banking is the front-side banking service department. It
provides those customers who come frequently and those
customers who come one time in banking for enjoying ancillary
services. The officers of this department have to perform the
following tasks:

1)

Account opening and close.

2)

Collection of cash, cheque from customers.

3)

Issuing of FDR, pay orders, cheque books and demand draft.

4)

Assisting customer to open various deposit scheme.

5)

Conducting clearing house activities.

6)

Collection of local and outward bills.

CSR Activities
SBL donates crest and cheque to war wounded Freedom
Fighter
SBL donates a cheque at deceased Army Family of
BDR Mutiny.
SBL donates a cheque for Flood Victim people
SBL serves the people setting up a temporary eye
treatment project

SBL donates cheque & crest to meritorious student


SBL contributes donation for Victims of BDR Mutiny
SBL has donated computers to School Students at
Savar

Role of Commercial Banks in


Economic Development
The Banking Sector has for centuries now formed one of the pillars of economic
prosperity. Indeed history provides us with some starting information regarding how
banks provided finance for imperialist ventures in newly acquired colonies. Over
time banks have formed an important part in providing an avenue for both savings
and investments.
Land, Labor, capital and entrepreneurs are the basic economic resources available
to business. However, to make the use of these resources, a business requires
finance to purchase of the land, hire labor, pay for capital goods and pay for
individuals with specialized skills. Detail role of commercial banks in economic
development is given below:

Trade Development
The commercial banks provide capital, technical assistance and other facilities to
businessmen according to their need, which leads to development in trade.

Agriculture Development

Commercial banks finance the most important sector of the developing economics
i.e. agriculture, short, medium and long-term loans are provided for the purchase of
seeds and fertilizer, installation of tube wells, construction of warehouses, purchase
of tractor and thresher etc.

Industrial Development
The countries, which concentrated on industrial sector made rapid economic
development. South Korea, Malaysia, Taiwan, Hong Kong and Indonesia have
recently developed their industrial sector with the help of commercial banks.

Capital Formation
Commercial banks help in increasing the rate of capital formation in a country.
Capital formation means increase in number of production units, technology, plant
and machinery. They finance the projects responsible for increasing the rate of
capital formation.

Development of Foreign Trade


Commercial banks help the traders of two different countries to undertake business.
Letter of credit is issued by the importers bank to the exporters to ensure the
payment. The banks also arrange foreign exchange.

Transfer of Money
Commercial banks provide the facility of transferring funds from one place to
another which leads to the growth of trade.

More Production
A good banking system ensures more production in all sectors of the economy. It
increases the production capabilities of the economy by strengthening capital
structure and division of labor

Development of Transport
The commercial banks financed the transport sector. It has reduced unemployment
on one hand and increased the transport facility on the other hand. Remote areas
are linked to main markets through developed transport system.

Safe Custody
The business concerns and individuals can make themselves tension free by
depositing their surplus money in banks. The banks also provide them the facility of
lockers to keep their precious articles and necessary documents safe.

Increase in Saving
Commercial banks persuade the people to save more. Different saving schemes
with attractive interest rates are introduced for this purpose. Number of bank
branches is opened in urban and rural areas.

Construction of Houses
Commercial banks provide credit facilities to their customers for the purchase or
construction of houses.

Assistance to Government
By providing funds to government for development programs, the commercial
banks share the government for economic stability.

Increase in Employment
A countrys economic prosperity depends on the development of trade, commerce
industry, agriculture, transport and communication etc. These sectors are financed
by the commercial banks and employment opportunities are increasing.

Saving in Metallic Reserve


Cheques and drafts etc works like money. In this way the need of precious metals to
make coins reduces and metallic reserve of the country can be utilized on other
important matters

Credit Creation
Commercial banks are called the factories of credit. They advance much more than
what the collect from people in the form of deposits. Through the process of credit
creation, commercial banks provide finance to all sectors of the economy thus
making them more developed than before.

Proper use of Money


People deposit their saving in the banks, so the scattered money becomes a huge
amount in the way, which can be used for different projects in a proper way.

Financial Advices
Commercial banks also give useful financial advices to promote the business of their
customers, besides credit facilities.

Increase in Investment

Commercial banks mobilize savings of the people. They make them available to the
farmers, traders and industrialists for the development of agriculture, trade and
industry.

Success of Monetary Policy


Under the supervision of central bank, all scheduled commercial banks make effort
for the success and objectives of monetary policy. This joined effort of commercial
banks makes the economic development possible.

Use of Modern Technology


The use of modern technology in less developed countries is only possible in the
presence of developed commercial banking as it can be the main source of their
funds.
These funds are utilized for the import of modern technology from developed
countries.

Export Promotion Cells


In order to boost the exports of the country, the banks have established export
promotion cells for the information and guidance to the exporters.

Economic Prosperity
Economic prosperity of a country depends on number of factors including the
development of commercial banking. A sound banking system promotes the
economic status of the people by providing them short, medium and long-term
loans.

Training Center
Commercial banks established many trading centers for their employees to
modernize the banking system of a country. In this way the banking experts
enhance their abilities and contribute towards the development of country.

Types of deposit products

Current Deposit
Savings Deposit
Short Term Deposit
Fixed Deposit
Deposits Under Scheme

SBL Regular Deposit Programme ( SRDP )

* If any monthly installment remains unpaid for 5 (five)


consecutive months, the account will be closed automatically and
the account will be settled as detailed other page :-

Relationship/
Applied Interest
Tenure
Less than 1(one)
year

No interest

More than 1 year


Savings Rate
but less 3 years
Matured value of 3 years
More than 3 years
and rest as per prevailing
but less 5 years
interest rate on savings rate
Matured value of 5 years
More than 5 years
and rest as per prevailing
but less 10 years
interest rate on savings rate.

If failure to pay monthly installment on due dates he/she will pay


penalty of Tk. 20/-(Twenty) next subsequent installment.

Monthly Installment, Tenure and Maturity Value


will be as per following Schedule:Installm
ent /
300 500 1000
Years

2000

2500

5000

10000

3 Years

12,3 20,6
1,03,1 2,06,2 4,12,44
41,240 82,470
75
25
00
00
5

5 Years

22,5 37,6
1,50,5 1,88,1 3,76,3 7,52,81
75,245
95
45
10
45
25
5

7 Years

34,7 57,8 1,15,5 2,31,1 2,89,0 5,78,3 11,57,0


00
20
95
65
55
00
80

10 Years

57,1 95,3 1,90,5 3,81,2 4,76,8 9,54,4 19,09,7


70
30
70
45
50
30
85

SBL Regular Income Programme ( SRIP )


1. SBL Regular Income Program is an income program, which
helps you to earn a monthly fixed
amount on your deposits at SBL for period of 1 year.
2. Deposit of Tk. 50,000/- (Fifty Thousand) and multiples thereof
but maximum limit of
Tk. 25,00,000/- (Taka Twenty Five Lac) and Tk. 50,00,000/(Taka Fifty Lac) at a time for the

individual customer and the company respectively. Depositor


will earn 12 equal monthly profit.
Depositor can earn money due date as per following
schedule:Deposit
Amount

4,00,00
50,0 1,00,02,00,03,00,0
0&
00 00
00
00
above

Monthly Interest
400 800
Payable

1,600 2,400

3,200 &
Above

SBL Double Income Plus ( DI+ ) Programme


1. Deposit of Tk. 10,000/- (Ten Thousand) and multiples thereof
will be acceptable under this
program.
2. A specially designed receipt shall be issued for the deposit
under this program.
3. The instrument shall be issued for 7 years.
4. At maturity after 7 years the depositor will get double plus
(DI+).
5. If any depositor intends to withdraw his deposit before
maturity, the following rules will apply :

No benefit including interest/profit shall be allowed for premature encashment within 1 (one)
year.

If the accounts/deposits are closed/en-cashed after 1 (one)


year of its opening interest shall
be allowed on the deposit at prevailing FDR Interest Rate.

6. The instrument will be acceptable as collateral security against


any investment subject to
registering lien with the issuing Branch.
7. In case of instrument get lost, the procedure for the issuance of
a duplicate receipt will be the
same as applicable in case of loss of FDR.

Types of loan products


Secured overdraft
General Loan
House building Loan
Staff Loan
Transport Loan
Loan Against Trust Receipt
Payment against document
Packing Credit
Lease Finance
SME
Consumer Credit
Bill Purchase

Consumer Credit Scheme :


Lending rate has been shown in the following table where fixed
rate (Bangladesh bank instructed rate) and mid-rate are given.
Bank may re-fix 1.50 over the mid rate considering the risk
involvement. These rates are effective from July 01, 2014.

SL

Particulars
Mid Rate

Fixed Rate

01

Consumer Credit Scheme (Staff)

02

Consumer Credit Scheme (Commercial) --

12.00%

-16.50%

1.00% additional interest rate will be charged for default in


payment/ adjustment. All other charges, commissions and fees
shall remain unchanged.

House Building Loan :


Lending rate has been shown in the following table where fixed
rate (Bangladesh bank instructed rate) and mid-rate are given.
Bank may re-fix 1.50 over the mid rate considering the risk
involvement. These rates are effective from July 01, 2014.

SL

Particulars

Fixed
Rate

Mid
Rate

01

House Building Loan (Staff)

7.00%

--

02

House Building Loan


(Commercial)

--

16.00%

03

House Building Loan


(Residential)

--

16.00%

1.00% additional interest rate will be charged for default in


payment/ adjustment. All other charges, commissions and fees
shall remain unchanged.

Necessary papers and documents


There are various kinds of Bank Accounts which people are
looking for. These accounts opening go through some procedure.
Required information for opening a bank account varies from bank
to bank. Following are the most common information required
with every bank.

Individual and Joint Account (Salary and Current)


Banks prescribed Account opening application form (to be
signed by the applicant in front of respective bank
personnel),
Two Passport Size Photographs of the Account holder(s)
attested by the introducer,
Specimen Signature Card (To be signed by the applicant in
front of respective bank personnel),
Estimated Transaction Profile, and
Any of the following Identification Documents (Current valid
passport/ Valid driving license/ Voter ID Card/ Armed Forces
ID card/ A Bangladeshi employer ID card bearing the
photograph and signature of the applicant/ A certificate from
any local government organs such as Union Council
chairman, ward commissioner etc). (In this case the certifier
should attest applicants photograph along with signature/
Trade license with photograph can be accepted for
individuals identification), i.e. any document showing
photograph, signature and address of the customer issued
from a dependable authority (Managers and Supervisors
have to apply judgment) are acceptable.

TIN Number.
One Passport Size Photographs of the Nominee(s) attested
by the Account holder.
All photocopies should be verified with the original and attested
by an authorized officer of the Bank.

Limited Company Account


Banks prescribed Account Opening application form,
Certified copy of the Memorandum & Articles of Association
of the Company,
Certificate of incorporation,
Certificate of commencement of Business (For Public Limited
Companies only),

Extract of the Board resolution sanctioning the account


opening and signing authority,

List of the Director with address in specified from,


Photograph of the signatories,
Copy of valid Trade License,
Introducers signature in the A/C opening form and at the
back of the photograph(s) of Account holder(s),
List of names with Appointment letter and Specimen
Signature of the Persons authorized to operate the Account,
and
The personal identity of all the directors or beneficial
owner(s) proprietor of the Firm has to be established by any
of the documents as mentioned in Individual or Joint
Customer category.

Distinction between conventional


commercial bank and Islamic
commercial bank
Characteristic

Islamic
commercial
bank

Conventional
commercial
bank

Business

Functions and
operating modes
are based on
Shariah and Islamic
banks must ensure
that all business
activities are
incompliance with
shariah
requirements.

Functions and
operating modes
are based on
secular principles,
not religious laws
or guidelines.

Framework

Interest
charging

Financing is not
Financing is
interest (Riba)
interest oriented,
oriented and
and a fixed or
should be based on variable interest
risk-and-reward
rate is charged for
sharing.
the use of money

Interest on
deposits

Account holders do
not receive
interest(riba) but
may share risk and
rewards of
investment made
by the Islamic bank

Depositors receives
interest and a
guarantee of
principle payment

Risk sharing in Islamic banks offer


equity financing
equity
with risk sharing
financing

Risk sharing is not


generally offered
but is available
for a project or
through venture
venture. Losses are capital firms and
shared on the basis investment banks,
of equity
which may also
participation.
participate in
management.

Restrictions

Islamic banks are


allowed to
participate only in
economic activities
that are Shariah
compliant.

Traditional banks
may finance any
lawful product or
service

Zakat

One of the
functions of the
Islamic Banks is to
collect and
distribute zakat.

Traditional banks
do not collects and
pay any religious
tax

Penalty on
default

Islamic banks are


not allowed to
charge penalties
for their
enrichment. They
may however allow
imposition of
default or latepayment
penaltieson the

Traditional banks
normally charge
additional money
(compound
interest) in case of
late payment

grounds that these


penalties
discourage late
payments or
defaults, which
impose
administrative
costs on bank for
processing and
collecting the
amount owed.
Penalties may be
donated to a
charity or used to
offset collection
cost.

Avoidance of
gharar

Transaction with
elements of
gambling or
speculation are
discouraged or
forbidden.

Speculative
investments are
allowed

Customer

The status of client


is that of partner
and investor

The status of a
client is one of
creditor and debtor

Relationship
Shariah
supervisory
Board

Each Islamic bank


Traditional banks
must have a
do not have such
supervisory board
requirements
to ensure that all
its business
activities are in line
with Shariahs
requirement

Conclusion
The Standard Bank Ltd facilitate payments by means of credit
instruments like cheques, drafts, telegraphic transfers, letters of
credits and other means of payment including credit and debit
cards. Without these services domestic and international trade
could not have possibly progressed much beyond the old system
of barter. In the words of Walter leaf: The banker is the universal
arbiter of the worlds economy.

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