Memo No.

-DSE/Mem-145/2010/Moni/
October 04, 2010
Compliance Officer
The City Bank Ltd.
DSE Member No.-145
Jiban Bima Tower,
10, Dilkusha C/A, Dhaka-1000.

Subject: Monitoring.

Dear Sir,
Directed to inform you that the monitoring team of Dhaka Stock Exchange Ltd. conducted
monitoring in The City Bank Ltd. (DSE Member No: -145) dated September 14, 2010. Findings of
the monitoring are follows:
1. The total number of clients of The City Bank Ltd. (DSE Member No: -145) is
approximately 1,000.
2. Soft and hard copy of the clients’ register of The City Bank Ltd. (DSE Member No: -145)
are maintained in the office.
3. The consolidated customer bank account of the member company is maintained with the
City Bank Limited.
4. The general bank A/C of the member company is maintained with the City Bank Limited.
5. After random scrutiny, money receipt and payment vouchers were found with signature of
the clients and authorized person.
6. Audited Financial Report and Net Capital Balance of the member company are
maintained.
7. The City Bank Ltd. (DSE Member No: -145) provides margin facility to their clients. As
per SEC directives No. SEC/CMRRCD/2001-43/47 date July 08, 2010 the members of the
stock exchanges shall not extend credit facilities to their approved clients beyond 1(one)
time of clients’ margin/clients’ deposit (i.e. credit facilities shall be on 1:1 basis) under the
Margin Rules, 1999. However, after random checking of investors’ margin call statement
as on September 14, 2010 findings are shown as below.
Page 1 of 4
 Client
SL.No. Code Ledger Balance Equity (Margin) Ratio
40,422,902.3 24,666,675.2
1 5 9 4 1.63877
11,942,204.2 5,245,697.6
2 22 2 8 2.27657
104,169,787.1 53,727,282.5
3 c005 9 6 1.93886
3,546,903.7 967,592.2
4 C028 7 2 3.6657
3,105,368.7 525,933.2
5 m017 0 4 5.90449
39,356,438.5 22,297,874.9
6 m098 6 1 1.76503
4,050,816.3 2,338,964.5
7 m145 8 0 1.73188
8,768,510.7 4,963,305.6
8 m146 1 0 1.76667
3,215,808.9 1,694,051.5
9 m161 5 3 1.89829
9,491,777.8 4,702,092.3
10 m191 1 4 2.01863
1,508,507.5 933,623.5
11 m223 7 5 1.61576
1,049,891.5 185,578.2
12 m255 8 8 5.65741
25,627,363.1 15,942,439.9
13 m296 5 0 1.60749
25,543,613.3 15,785,914.9
14 m297 9 3 1.61813
1,220,528.9 263,061.5
15 m353 7 0 4.63971
75,727,609.9 46,635,446.4
16 m411 4 8 1.62382
67,964,148.8 42,189,275.2
17 m412 6 9 1.61093
75,920,094.6 46,627,537.9
18 m413 6 2 1.62822

Contravention: Through the aforesaid activity it seems to us that The City Bank Ltd. (DSE
Member No: -145) violated the following:

• SEC directives No. SEC/CMRRCD/2001-43/47 date July 08, 2010

Page 2 of 4
 After random scrutinizing of portfolio statement of one of your client named Ms. Samira
Hasin (Client code:-M017) on July 22, 2010 the monitoring team found that clients margin/
equity and ledger balance (debit) is Tk. 504887.36 and Tk.30, 86,407.36 respectively on the
said date. It seems to us that the ratio of client margin/deposit and credit facilities was 1:
5.904 (approximately) on July 22, 2010. However as per the sub rule (5) of the rule (3), “The
member shall not permit any new transactions in the margin account unless the resulting
equity in the account would be not less than 150% of the debit balance.” Whereas your
company bought 2100 shares of BATBC Tk. 14, 38,973.84 and sold 3000 shares of
LANKABAFIN Tk. 14,20,012.50 in favour of Ms. Samira Hasin (Client code:-M 017) on
September 02, 2010. The monitoring team found that the total Buy value is more than the
total sale value of the said client on September 02, 2010.

Contravention: Through the aforesaid activity it seems to us that The City Bank Ltd. (DSE
Member No: -145) violated the following:

• The sub rule (5) of rule (3) Margin Rules, 1999

8. After random scrutiny of customer Account Opening Forms, few fields like Bo ID
number, special instructions if any, Name & address of the person introducing the
customer, were not filled up. It appeared to us that The City Bank Ltd. (DSE Member No:
-145) did not maintain customer account information Form IA properly.

Contravention: Through the aforesaid activity it seems to us that The City Bank Ltd. (DSE
Member No: -145) violated the following:
a. Rule 8 (1) (ccc) of the Securities and Exchange Rules, 1987.

9. After random selection, few buy and sell orders were found without signature of the clients
and authorized representative.
Contravention: Through the aforesaid activity The City Bank Ltd. (DSE Member No: -145)
violated the following:
• The sub rule (1) of rule (4) of the Securities and Exchange Rules, 1987.

Page 3 of 4
 10. After random selection, few trade Confirmation Statements are found without signature of
the clients and authorized representative.
Contravention: Through the aforesaid activity The City Bank Ltd. (DSE Member No: -145)
violated the following:

• The sub rule (5) of rule 4 of the Securities and Exchange Rules, 1987.

11. Customer wise order status report and customer wise Trade status report are preserved in
head office.
12. The Member Company maintained Client Ledger in computer and provided to the clients
on demand.
13. The total number of Authorized Representatives and TWS of the member company are
twenty (20) and nineteen (19) respectively.
14. The City Bank Ltd. (DSE Member No: -145) has three (3) branches.

In this regard, you are requested to clarify your position on the above issues and inform us within
three (3) days after receiving of this letter.

Thank you for your co-operation and we appreciate you for maintaining other issues appropriately.

Sincerely,

(Khandaker Asad Ullah)

Deputy General Manager
Monitoring, Investigation & Compliance

Copy to: Managing Director

The City Bank Ltd.

Page 4 of 4