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INTERNSHIP JOURNAL FOR JULY 4 T H WEEK (JULY 19 JULY 24)

I have collected some cheques for clearing and transferring. For clearing the
cheques I need to mention that if a customer submits any cheques before
11.30 am then the cheque will be cleared to deposit the cheques amount
into his or, her account within 3.00 p.m. on the same day he or, she have
submitted the cheque(s). If the customer submits the cheques after 11.30
a.m., the cheques will be cleared in the next day before 3.00 p.m. In the case
of transfer cheques the customer can deposit the cheques amount into his
or, her account at any time from 10.00 a.m. to 4.00 p.m. during working
days. For clearing amount the customer can withdraw the money after the
day of clearance. For high value clearing the customer can withdraw money
after 3.00 p.m. in the same day of submission.

On the following day I have written down several pay orders according to the
demand of the customers. Every time I wrote a pay order it has to be signed
it by the supervisors. The GB in charge and the branch in charge need to sign
on a pay order to verify the names and amount of the pay orders & collected
cheques from the customers and gave clearing and transfer seal on the back
of the cheques. My supervisors always helped me if I have any confusion
during giving the seals. They helped me to give right seals on the back of the
cheques. If I make mistake they always show me the way of correction of the
wrong seals.

On this day, I have made a mistake during writing a pay order. I have written
an amount that was wrong. I informed my supervisors about my mistake and
they told me to give a correction seal over it. Then I have taken verification
signs from my supervisors and then I have provided the pay order to the
customer. Wrote down some pay orders, gave information about the
procedure of opening saving account, FDR, SRDP, SRIP. For opening the bank
accounts the customer need to bring photo copy of his or, her National Id.
Sometime customer forget to bring out the photocopy with them. In that
case the bank unable to provide them photocopies because at this branch
they do not have any photo copier. So the customers have to go outside
every time they need photo copy of any of their documents. In most cases
customer get angry for this situation. BCBL need to provide photo copy
support to their customers to gain positive feedback.

I came to know that if a cheque is cleared, the money only can be withdrawn
after the day of clearance. If the cheque value is more than 500,000 and the
customer requested it to place as high value then the account holder can
withdraw the cheque(s) amount in the same day of clearance. If any
customer submits cheque(s) after 11.30 a.m. then the cheque(s) will be
cleared next day before 3.00 p.m. and as mentioned before the money can
be withdrawn after the day of clearance. For the BCBLs cheque it is

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considered as transfer fund from one account to another. In the case of
transfer, the customers can withdraw the money immediately.

A customer requested my supervisor to place a cheque as high value but the


cheque value was below 500,000. So it was not possible because it is against
the rules of Bangladesh Bank. So my supervisor politely gave the information
to that customer and able to make the customer understand the fact.

In this day I have collected several chques for the clearing. I learned about
some reason for dishonor of cheques. I am going to state some reasons
underneath.

If the prayers do not have sufficient balance then the cheque will be
dishonored.

If the signature of the payer do not match with the signature in the
account opening form.

If the cheque amount is not understandable.

If the payer overwrites on the cheque.

If the payer make a request to the bank to dishonor any of his or, her
cheque.

If there is no crossing seal over the cheque. Crossing seal is the seal
which is used to specify the bank under which the cheque(s) is
submitted.

If there is no clearing seal in the back of the cheque(s).

If there is no verification signature in the back of the cheque(s) by the


general banking department.

I have collected several cheque(s) for clearing. I have learned about the
clearing house. Clearing house is an automated system provided by the
Bangladesh Bank. Banks upload the cheque(s) into the server of Bangladesh
Bank. Than the software determine the origin of the cheque(s). Then the
online copies of the cheques sent to the mother banks. Then the banks verify
the cheque(s) and determine honor or, dishonor of the cheques.I have
learned about the accounts department. This department works under the
supervision of the General Banking in charge. Only one officer works into this
department. This department is responsible for the profit and loss
statements, calculate the total deposition of cheques amount by the
customers, calculate the depreciation on the asset, transferring monthly
salary to the employees accounts, etc.

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However, the fund management of this bank facing cataclysm because of
cash crisis. The total liabilities of some of the banks are not matching up with
their total assets. As a result bank is losing their capability for settlement of
claims including returning the deposits of the depositors.

As per central bank's guideline, in any particular month, the difference


between the total assets of the bank and their claims to be settled must not
be greater than 20 per cent of their total asset. For example, suppose a bank
in a particular month will have to pay off 100 takas (Tk), including earlier
committed credit, returning the money of the depositors in the maturity of
their deposits, and settlement of import payments. However, in that month,
the total earning of the bank from adjustment of credit, proceeds from the
maturity of treasury bills and bonds, income from different commissions, and
income from the deposits has been Tk 80. So, the difference between the
asset and liability would be Tk 20.

This is somewhat acceptable as per the asset liability management guideline


of the central bank. Bank may adjust the deficit of Tk 20 from the call money
market (the inter-bank market for funds) or through repos from the
Bangladesh Bank. But if this difference becomes more than 20 percent, there
is possibility of many sorts of hazards for the bank. For example, the
captioned bank may face severe liquidity crisis. As a result, the bank loses its
capability to settle any of its claims. The bank cannot meet the condition for
keeping the mandatory cash reserve with the central bank Cash Reserve
Ratio (CRR). The Statutory Liquidity Reserve (SLR) becomes deficient. To
resolve the crisis, the banks borrow from the market at a very high rate. In
addition, they also collect short term deposits at a very high rate. As a result
the fund management cost of that bank increases the consequences into
collapse of the overall system of the bank.

One of the high officials of the central bank said that as per the fund
management of the banks, a bank has to estimate the probable liabilities in
a month. Along with that the amount of total inward deposits at that
particular month is also to be estimated. The fund management system of a
bank is maintained on this basis. However, many of the scheduled banks are
not following this guideline in the recent time. They are incurring greater
amount of expenditures not conforming to their income. As a result different
bank are getting excessively dependant on the Bangladesh Bank and the call
money market. Many banks are not being able to maintain their day to day
expenditures. An industrialist claiming anonymity informed that at the time
of encashment of large amount of check, some banks are not paying within a
day. After partially paying they are requesting to come in the next day.

For getting out of this crisis, some of the banks are borrowing from the call
money market. Again they are rushing toward the Bangladesh Bank. Every
day, they are borrowing more than Tk 90 billion as repo (borrowing for short-

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term) and under special liquidity support. In some days Bangladesh Bank is
even lending Tk 100 billion.

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