“Deposit Management Practices of Southeast Bank Limited”

Chapter One: Introduction

1.1 Origin of the Study
Theoretical & practical knowledge both are important phases of learning. Perfect combination of
both practical & theoretical methods is necessary for holistic learning. Theoretical learning has
its own importance in the learning. It is the base of doing anything practically. Practical
knowledge assist us to attain the exact techniques that become the tools of our job. Learning
during internship is the best way of acquiring knowledge by using both practical & theoretical
aspects of a thing or situation.

To relate the theoretical knowledge with the practice Bachelor of Business Administration
( MBA) course requires three (3) months attachment with an organization followed by a report
assigned by the supervisor in the organization & endorsed by the faculty Students are placed in
enterprises, organizations, research institutions as well as development projects.
Since practical orientation is an integral part of the MBA. degree requirement, I was deputed by
the Department of Accounting & Information Systems (AIS), Comilla University to Southeast
Bank Limited Kotbari Branch to take real life exposure of the activities of the organization as a
financial institution. After completion of the internship program report submission is essential. I
have assigned a topic " Deposit Management Practices of Southeast Bank Limited". The topic
was selected with able guidance of the respective supervisor. The Southeast Bank Ltd. authority
gave me the opportunity to work at the three (3) months on the topic. My faculty supervisor Dr.
Mohammed Belal Uddin, Professor of AIS department, Comilla University, approved the topic
& authorized me to prepare this report as a part of fulfillment of internship requirement.

1.2 Rationale of the study

Banking in Bangladesh has to keep pace with the global change. The economy of the country
has a lot left to be desired & there are lots of scopes for massive improvement. In an economy
like this, banking sector can play a vital role to improve the overall socio-economic condition of
the country. Now, Banks must compete in the market place both with local institution as well as
foreign ones. The management of the bank is responsible for taking decisions & formulating
plans & policies for the future. They, therefore, always need to evaluate its performance &
effectiveness of their action to realize the company 's goal in the past. It's very important to have

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 “Deposit Management Practices of Southeast Bank Limited”

an effective & sound Deposit Management Practice in place which will help the bank mitigate
its risk factors & carry out successful financing service or lending. Deposit Management
practice helps to provide important information to the management because the bank must
provide cash to the customer whenever funds are withdrawn; if not withdrawn, however, banks
will typically use the funds as investments or loans to other customers until the depositor makes
a withdrawal. This process is significant in regards to money supply, and has several
ramifications.
Deposit management practice is helps to highlight the first step in the financial intermediation
process. Banks simply cannot function without deposits from savers in the economy. Many
developing countries suffer from low domestic savings rates.

1.3 Objectives of the Study

As business student it is indispensable to undergo some practical Report like this for the purpose
of having flavor of professional atmosphere and make rectification, as required.

1.3.1 Broad Objectives

General objective of the study is to l examine overall deposit management system of Southeast
Bank Ltd. & to get an overall idea about the deposit products & services of Southeast Bank Ltd.

1.3.2.Specific Objectives
 To examine the deposit appraisal procedure followed by Southeast Bank Ltd.
 To Report the interest rate & charge followed by Southeast Bank Ltd. for deposit.
 To observe the statutory deposit position of Southeast Bank Ltd.
 To recommend some suggestions for further development.

1.4 Methodology of the Report

1.4.1 Introduction:
This report is the reflection of three (3) months internship program in Southeast Bank Limited.
Banking sector is a fast going sector in Bangladesh. All banks are facing tremendous
competition from each other. So, the officers remain very busy to provide a better customer
service. As an intern, I had to collect data and information from that busy corporate

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 “Deposit Management Practices of Southeast Bank Limited”

environment. Information collected to furnish this report is both from primary and secondary
sources.

1.4.2 Research type:

This is a “Descriptive Research”, which briefly reveals the overall activities of the bank. This
Internship report has been prepared based on the information extracted from different sources
collected by using a specific methodology.

1.4.3 Choice of the Year:

I have selected the last five years (2015-2019) for my analysis. I have collected data and
financial papers of these five years to prepare this report.

1.4.4 Method of Data Collection:

To make this report presentable and effective, the necessary information has been collected from
two sources:

The secondary sources are:

 Annual Report of Southeast Bank Limited (2015-2019).
 Brochures of Southeast Bank Limited.
 Prospectus of Southeast Bank Limited.
 Relevant file study as provided by the officers concerned.
 Working Papers.
 Different circulars issued by the Head office of Southeast Bank Limited.
 Different Financing and Accounting related text books.

1.4.5 Data Analysis & Reporting:

Collected information have been processed & compiled with the aid of MS Word, Excel etc.
Necessary tables have been prepared on the basis of collected data. Details explanation and
analysis have also been incorporated in the report. I have selected the last five years (2015-2019)
for my analysis. Some necessary number of table, chart, and graph are also used to present the
report.

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 “Deposit Management Practices of Southeast Bank Limited”

1.5 Scope of the Study

In this study, I would try to concentrate on the theoretical aspect of deposit management
practices, that is, the definition of deposit management, deposit procedure, current interest rate,
current charge on deposits etc. Southeast Bank is the second largest commercial bank in
Bangladesh. It has 911 branches & 4 overseas brancheis. It is liked with 1203 foreign
correspondents all over the world. I was assigned to learn practical knowledge from Southeast
Bank Ltd. Here I tried to learn about the overall practices about deposit management, cost of
fund on average deposits, problems created by the government in the process of deposit
management etc. All things comes under the theory of deposit management practices & finally I
would conclude with the critical evaluation of deposit management practices under the
guidelines of companies act 1991 & a discussion on major findings & recommendations.

The report is divided into six parts. Chapter one contains "Introduction " which includes origin,
rationale, objectives, methodology, scope & limitations of the study. Chapter two contains
"Organizational Overview of Southeast Bank Ltd." which includes history, mission, vission,
core values, strategic objectives, slogan, financial highlights, profile of Southeast Bank ltd.
Chapter three contains " Theoretical Framework " which includes literature review & basic
terms. Chapter five contains " Deposit Management Practices of Southeast Bank Ltd." Chapter
five of my report is about " Analysis & Findings " & lastly chapter six contains "
Recommendations".

1.6 Limitations of the Report

To make a report various aspects and experiences are needed. There is a certain boundary to
cover this report. The report has covered only the data which are published in the annual reports.
Moreover the company itself and financial institutions have got some confidential information
which is not possible to disclose publicly, so those data and information had to be ignored for
this report.

I have faced some barriers for making a complete and perfect report. These barriers or limitations,
which hinder my work, are as follows:
 Lack of available information about Deposit Management Practices in their annual report.
 Unavailability of most recent statistical data of Deposit Management Practices of Janata
Bank Limited”
 Insufficient information about Deposit Management Practices on their website.

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 “Deposit Management Practices of Southeast Bank Limited”

 I had to complete this report within a very short span of time that was not sufficient for
investigation.
 Lack of opportunity to access to internal data.
 Since the bank personnel were very busy, they could not give enough time.
 As the data, in most cases, are not in organized way, the bank failed to provide all
information.
 Due to some legal obligation and business secrecy banks are reluctant to provide data. For
this reason, the study limits only on the available published data and certain degree of
informal interview.

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 “Deposit Management Practices of Southeast Bank Limited”

Chapter Two: Organizational Overview

2.1 Background of Southeast Bank Limited

Southeast Bank Limited was established as a Public Limited Company on March 12, 1995. In
the Registrar of Joint Stock Companies and Firms issued the Certificate of Commencement of
Business of the Bank on the same date. The Southeast Bank received its Banking License from
the Bangladesh Bank on March 23, 1995. The Bank's first branch was opened by M. Saifur
Rahman, the then Finance Minister of Bangladesh as the Chief Guest at 1, Dilkusha Commercial
Area, Dhaka on May 25, 1995.[8] The incumbent Chairman of the Bank is Alamgir Kabir, FCA.
M. A. Kashem a member of the Board and Yussuf Abdullah Harun were past Presidents of the
Federation of Bangladesh Chamber of Commerce and Industries (FBCCI).

The Bank maintained a capital adequacy ratio at 11.46 percent as on December 31, 2011 against
requirement of 10 percent set by Bangladesh Bank. Credit Rating Information and Services
Limited (CRISL) rated the Bank AA- (Double A Minus) for the long term and ST-2 for the short
term based on the financial statements of the Bank for the year 2010. Their rating for the long
term remained valid up to June 1, 2012. The Credit Rating of the Bank for the year 2011 has
been assigned to Credit Rating Information and services Limited (CRISL). Southeast Bank Ltd.
made operating profits worth Tk 5.50 billion in 2012 against Tk 6.05 billion in 2011.

At present, 18.14% of SEBL's employees are women that will rise to 45% over the next five
years. The Company started its banking operation and entitled to carry out the following types of
banking business:

All types of commercial banking activities including Money Market operation:

 Investment in Merchant Banking activities.
 Investment in Company activities.
 Financiers, Promoters, Capitalists etc.
 Financial Intermediary Services.
 Any related Financial Services.
2.2 Board of Directors

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 “Deposit Management Practices of Southeast Bank Limited”

Mr. Alamgir Kabir, Mrs. Jusna Ara Bay Leasing & Mr. Mohammad
FCA Kashem Investment Limited Delwar Husain
Chairman Director Represented by Mr. Independent Director
M. Maniruz Zaman
Khan

Mrs. Duluma Ahmed Mr. Md. Akikur Mr. M. Kamal Hossain

Vice Chairperson Rahman Managing Director
Director

Mr. Syed Sajedul

Karim
Independent Director

Mr. M. A. Kashem Mr. Zakir Ahmed

Director Mrs. Rehana Rahman Khan
Director Advisor

Dr. Quazi
Mesbahuddin Ahmed
Independent Director

Mr. Azim Uddin

Ahmed Mr. Raiyan Kabir
Director Director

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 “Deposit Management Practices of Southeast Bank Limited”

2.3 Performance and Achievement of Southeast Bank Limited

Capital:
The Authorized Capital of the bank is Tk. 10,000.00 million and Paid-up Capital is Tk.
8,732.86 million. The bank maintains a secured capital adequacy ratio which is 10.90% of the
Risk Weighted Assets as of December 31, 2013.
Reserve:
The bank raised its reserve from Tk. 235.28 million to Tk. 13,074.71 million during the year
2013 (Till December 31, 2013), which is quite significant
Deposits:
The accumulated total deposit of the Bank was Tk. 177,519.46 million as on December 31,
2013.
Loans & Advances:
The Bank continued to extend credit facilities throughout the period to various sectors. Total
Loans and Advances of the bank stood at Tk. 134,863.82 million as on December 31, 2013
The bank has extended credit facilities for “Post Import Finance”, “Export Finance‟,
“Consumer Loan”, “Term Loan”, “Working Capital Finance and Overdrafts”.
Import & Export Business:
The foreign exchange business of the Bank marked an increase from that of the corresponding
period. The import and export business during the year 2013 reached Tk. 131,644.82 million
and Tk. 95,220.40 million respectively.
Investments:
The performance of the Investment Wing of the bank during the year 2013 was Tk. 57,589.06
million. The investment portfolio comprises of Treasury Bill, Biman Bond, Grameen Bank
Bond, Prize Bonds and Shares of local companies.
Profit:
The operating profit of the Bank increased to Tk. 6,700.20 million in 2013 compared to Tk.
5,495.87 million in the year 2012.

2.4 Mission & Objective Southeast Bank Limited

The mission of Southeast Bank Ltd. is to obtain a sustainable position in the banking sector of
Bangladesh. It has been consolidating its position and preparing itself for the new millennium
by upgrading technology, training its work force, restructuring organizationally and creating a
new work culture. The purpose of the bank is to inter-mediation involving fund from saver to

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borrower and offering profit thereby. The general objective of the bank is to provide
computerized modern banking services to the valued customers. Mainly the objectives are:
 High quality financial services with state of the art technology
 Fast customer service
 Sustainable growth strategy
 Follow ethical standards in business
 Steady return on shareholders equity
 Innovative banking at a competitive price
 Attract and retain quality human resource
 Commitment to Corporate Social Responsibility

2.5 Operational strategies and features

Organizing:
SBL believes in close monitoring and close control. The line and staff authority relationship in the
bank is co-operative and emphatic. The staff performs the advisory jobs to ensure efficient
management, the bank emphasizes on decentralization and delegation of authority.
Staffing:
For creating a commercial atmosphere and implementing mission through the managerial
intelligence and well-dedicated workgroups, the bank continues to recruit skilled and enthusiastic
personnel.
The selection and recruitment of the bank consists of
 Initial screening.

 Written tests.
 Assessment Centers.
To measure performance of the employees, the bank uses „Performance Appraisal Form‟. Besides
the bank offer its employees Human Resource Development Program through both on-the-job and
off-the-job training.
Leading:
To hire and to maintain qualified personnel, the bank offers different types of motivations to its
employees:
 Financial (including competitive pay, bonus, profit bonus, rewards etc.)
 Non-financial (including training, promotion, status and participation)
Controlling:
SBL does not believe in traditional banking. The bank tries to two types of control techniques:

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 Feed forward control.

 Feedback control.
Feed forward control technique monitor inputs into a process to ascertain whether these are as
planned, if they are not the inputs are changed, in order to get the desired result. Feedback system,
on the other hand, monitors outputs of a process and feed into the system to obtain the desired
outputs.
Ethics and Social Responsibilities:
Southeast Bank Limited believes in banking ethics and social responsibilities. It is fully devoted to
fulfilling the needs for customer satisfaction and involved in various socioeconomic development.
The objectives of the bank are, among others:
 It finances the small-scale industries to help them survive.
 Creating employment opportunities within the bank through expanding its network so that it
can play some positive role in solving the unemployment problem in the country.
 Cooperating with organizations such as Grameen Bank, which are helping the poor through
micro Credit and other facilities.

2.6 Views social responsibilities

Rights of Shareholders: The bank earned a total profit before tax of Tk. 6,700.20 million in
the year 2013 and offered 16% cash dividend.
Responsibilities to the Employees: The bank always tries to ensure performing its
responsibilities to its employees in terms of payment of competitive wage, providing the best
possible working conditions, proper system of promotion, recognition, appreciation, and
encouragement of special skills etc.
Responsibilities to the Customers: the bank tries to ensure maximum satisfaction of its
clients.
Responsibilities to the Community: SBL performs its duty to the community by providing
some special scheme such as Education Credit Scheme, Marriage Credit Scheme, and
Promoting local industry.

2.7 Future Prospects and Plans

The regular operations and transactions of Southeast Bank Limited are fully automated and
automation tools such as ATM and SWIFT are doing all the activities of trade and operations.
The bank is having more than 40 ATM booths available in Dhaka Division and many more
throughout the country provided by Electronic Transaction Network Limited (ETN). In order
to provide round the clock and current information on the bank to the business community
worldwide, this bank has Web site www.southeastbank.com.bd

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Though a large number of commercial banks are already in he market to acquire business,
Southeast bank nevertheless secured its position in the overall financial arena with diversified
opportunities but with extensive competition. For modern banking and investment decisions
the Bank is eager to make substantial investments through branch and business expansion with
added capacity of resources. The bank has a plan to set up a research and development wing so
as to analyze business opportunities to extending its presence in this new market and sources
of investments.

2.8 Core Values of Southeast Bank Limited

Figure No.01

2.9 Core strengths

 Transparent and Quick Decision Making.
 Efficient Team of Performer.
 Satisfied Customers.
 Internal Control.
 Skilled Risk Management.
 Diversification.

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2.10 Core competencies

 Knowledge.
 Experience & Expertise.
 Customer Orientation/ Focus.
 Transparency.
 Determination.
 Zeal for Improvement.

2.11 Business Prospects of Southeast Bank Limited

 Surplus Capital Adequacy after IPO subscription.
 Business expansion in capital market.
 Gradual expansion of branch network.
 Progressive automation of the branches.
 Real online banking software will be in function soon.
 Expansion of ATM and Credit Card.
 Consideration of prime customers.

2.12 Product & Services of Southeast Bank Limited

E -Service

 ATM
 Q-Cash
 Automated Branch Banking
 Green Banking
 SEBL E-Library
 SEBL Data Bank
 E-GP Payment Service
 OMIS (ERP)
 PMIS
 BEFTN User Manual

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 “Deposit Management Practices of Southeast Bank Limited”

Modern Banking
 Online Banking
 Personalized Services
 One Stop Services
 B Green Communication
 B Remittance

Deposite

 Current Deposit (CD)

 Savings Deposit (SB)
 Special Notice Deposit (SND)
 Fixed Deposit (FDR)
 Southeast Bank Savings Pension Scheme (SEBSPS)
 Continious Benefit Account (CBA) for NRBs
 Medical Deposit Scheme (MDS)
 Education Deposit Scheme (EDS)
 Southeast Bank Monthly Savings Scheme (SEBMSS)
 School Banking Savings (SBS)
 Retirement Savings Scheme (RSS)
 Southeast Bank Retirement Savings Scheme (SEBLRSS)
 Southeast Bank Monthly Savings Project (SEBMAPro)
 Southeast Bank Double Benefit Scheme (SEBDBS)
 Southeast Bank Monthly Benefit Scheme (SEBMBS)
 Southeast Bank School Banking Savings Scheme (SEBSBSS)
 Southeast Bank Non-Resident Pension Scheme (SEBNRPS)

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 “Deposit Management Practices of Southeast Bank Limited”

Other Services
 Remittance.
 Taking Utility Bills.
 Account Opening Form.
 Loans & Advances.
 Salaries & Allowances.
 DD, TT, MT, pay orders and issuance of SDR.
 Q-Cash network of debit and credit cards offer the advantage of Southeast Bank
Limited.
 Locker rental / facilities provided.
 Sanchaypatra sales and cashing.
 Purchase and sale of prize bonds.
 Students who wish to study abroad for students open the file.
 Dollar, Euro and Pound, etc. endorsement and issuance of traveler's checks.
 Receive Traveler's tax.
 TV, VCR, STVR and satellite TV license issue / renewal.
 Procurement of food price paid by the government.
 Development of the land tax.
 Receive Money of Hajj  Receive Zakat Fund.
 Lottery ticket sales.
 The official opening of accounts for the collection of natural disaster.

Figure: Various services provide by Southeast Bank Limited

2.13 New/ Special Products of Southeast Bank Limited

 Continuous Benefit Account.
 Advance Benefit Account.
 Foreign Currency Account.
 NRB (Non Resident Bangladeshis) Home Loan Scheme.
 Loan to Travel Agencies.
 Loan to Diagnostic Centers.

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 Financing IT Sector.
 Financing of Industries.
 Windows for SMEs.

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2.14 Organogram of Southeast Bank Limited

Figure No.02

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2.15 Corporate Governance

Figure No.03

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Chapter Three: Theoretical Framework

3.1 Introduction
Finance is the life blood of trade, commerce and industry. Now-a-days, bank money acts as the
backbone of modern business. Development of any country mainly depends upon the banking
system.
Generally by the word “Bank” we can easily understand that the financial institution deals with
money. But there are different types of bank like; Central Banks, Commercial Banks, Savings
Banks, Investment Banks, Industrial banks, Co-operative Banks, etc. But when use the name
term Bank without any prefix, or qualification it refers to the commercial banks. Commercial
Banks are the primary contributor to the economy of a country. So we can say Commercial
Banks are a profit making institution that holds the deposit of the individuals & business in
checking & saving account and then uses these funds to make loans. For these, people and
government are very much dependent on these banks as the financial intermediary. As banks are
profit earning concern; they collect deposit at the lowest possible cost and provide loans and
advanced higher cost. The differences between two are the profit for the bank. Banking sector is
expanding its hand in different events every day. At the same time the banking process is
becoming faster, easier, and the banking area becoming wider. As the demand for better service
increases day by day, they are coming with different innovative ideas and products. In order to
survive in the competitive field of the banking sector, all banking organization are looking for
better service opportunity to provide their fellow clients. As a result, it has become essential for
every person to have some idea on the bank and banking procedure.

3.2 Literature Review

Bangladesh, the contribution of banking sector towards the economic growth and development
of both the public and private sectors is enormous. It has been possible for easy access to loans
and advances. In the modern time, commercial banks deal with various deposit services for
attracting the customers and clients. Deposit is the main earning source of bank’s management
system. So, every bank thinks that deposits will be sufficient, safe and the flow of deposit will
remain smooth. However, the deposit schemes of the commercial banks are the similar

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(Kabir et al., 2015) but there are differences in techniques applied in the techniques of
deposit mobilization.

The financial sector is treated as a carrier of economic development because of its role that plays
in creating deposit and intermediating savings of both private and public sectors and finally
turned these to the investment activities to bring the dynamism within the economy. The sector
is controlled by the banking sector which in Bangladesh, largely depends on the short- and
medium-term deposits (Mansur, 2017).

The deposit management expands existing management decision support instruments used in the
segment of planning and sale of various deposits products. A series of scientific method can be
used in the process of model creation. Methods of description, analysis and synthesis can be
applied in determining the relationship between movements in the costs per deposit product and
sales volume per deposit product as a starting point for the quantification of that relationship and
optimization of deposit range(Ticijan Peruško & Robert Zenzerović, 2013). In the process of
collecting funds from customers through the sale of bank’s deposits products, management tries
to structure the bank's liabilities in a the way to obtain the minimum total costs based on
transactions with deposits products. The overall costs of the deposit product portfolio are the
sum of the costs per each deposit product which the bank offers in the competitive market.

Deposit is the main source of banks fund. Existence and expansion of banks are mainly
influenced by their ability to attract deposits from different segments of the society. Although
every bank expects that flow of deposits will be sufficient and smooth, changes in economic and
commercial activities make deposit management more challenging to the bank managers. As
deposit is considered the life-blood of a bank ( Tasneema Khan, 2018) analyzing the deposit
performance has become a key factor to evaluate a banks overall performance.

Deposit is the most important source of capital funding in the commercial banks. This ratio
processes the efficiency and capability of the bank's management in converting the deposits
available with the bank into high earnings advances. Total Deposits contain demand deposits,
saving deposits, term deposits and ( Yahia Bapari et al., 2018) other deposits of the banks. Total

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assets contain liquidity asset, current asset & all types of long and short term assets. It is a good
indicator of deposit management.

Deposits are not only a part of the money supply, they also affect it in important ways.
Governments create and spread money throughout the economy in response to key movers like
investment. Investment is largely possible because people can move large sums of money by
saving, transferring and withdrawing funds from bank accounts. Bank deposits are a primary
tool for investment, and without them businesses would not be able to access funds from
individuals at all.

3.3 Concept of Bank Deposit

“Those who use time properly become successful; those who save money in due time, never face
financial difficulties”. ——- Hazrat Ali (R)

Bank Deposit refers to an amount of money in cash or cheque form or sent via a wire transfer
that is placed into a bank account. The target bank account for the bank deposit can be any kind
of account that accepts deposits. Another, a bank deposit is a sum of money deposited in a
financial institution for the purpose of providing access to investments or storing the money in a
secured location.

For example, a Bank Deposit is generally made when opening an account or in the course of
routine business or personal transactions that involve placing funds with the bank for future use.
Bank deposits can be made in a number of different ways. The most direct way is to walk into a
bank or a bank branch in which you hold an account. You are then usually required to fill in a
Bank Deposit slip with the particulars of your account and the amount of money you wish to
deposit. In addition, Bank Deposits can be made via wire transfer, as well as through a direct
deposit plan from employers in many cases.

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3.4 Deposit Management

Deposit management mainly focus on the money placed into banking institutions for
safekeeping. These deposits are made to deposit accounts such as savings accounts , checking
accounts and money market accounts . The account holder has the right to withdraw deposited
funds, as set forth in the terms and conditions governing the account agreement.

Bank deposits are a common occurrence in which customers deposit funds into their accounts.
The bank must provide cash to the customer whenever funds are withdrawn; if not withdrawn,
however, banks will typically use the funds as investments or loans to other customers until the
depositor makes a withdrawal. This process is significant in regards to money supply, and has
several ramifications.

3.5 Different Types of Bank Deposits

There are variations in the needs and demand of the people. It is almost impossible for banks to
satisfy all these diverse demands with a single type of account. That’s why banks generally offer
the following types of accounts to satisfy customer’s demand: Deposit Product and services
are
1. Savings Deposit
2. Current Deposit
3. Term Deposit
4. Foreign Currency Deposit
5. Monthly Savings Scheme
6. Monthly Income Scheme
7. Double Benefit Scheme
8. Serious Saver’s Account
9. Super Saver’s Term Deposit Account
10. School Banking

3.5.1. Savings Deposit

Savings accounts are accounts maintained by retail financial institutions that pay interest but
cannot be used directly as money (for example, by writing a check). These accounts let
customers set aside a portion of their liquid assets while earning a monetary return. For the bank,

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money in a savings account may not be call able intmmediately and therefore often does not
incur a reserve requirement freeing up cash from the bank’s vault to be lent out with interest.

Mainly we see Saving Account open lower and middle classes people who have to save a part of
their incomes to meet their future need intend to earn an income from their savings. This cause
people are encouraging savings of individual, jointly, non-trading people, institutions, society,
clubs and so on the depositing small amount of money in the bank.

Benefits and Restriction of Savings Account

By this savings account we can get some interest after half year for specific deposit amount. The
rate of interest payable by the Bank’s on deposit mention in the savings account will determined
by the respective bank. Interest is now calculated in the minimum balance to the credit of the
account during the period from first to last day of each calendar month on every half year at the
end of June and December. This interest rate may be 4% or 5%.

Documentation of Saving Account :

 Personal TIN certificate
 Two copies passport size photographs
 National ID card or Passport Photocopy
 Nominees photographs

3.5.2 Current Deposit

In deposit terminology, the term Current Deposit refers to a deposit to a bank account or
financial institution without a specified maturity date. These types of current deposit account
generally only earn demand deposit interest.

Current Deposit Example:

Current Deposit will often be made into a bank or other financial institution’s account in the
local currency. The deposit will then generally be made available to the customer for withdrawal
at any time and without an early withdrawal penalty. Funds are typically made immediately
available to the customer for withdrawal by writing a check. Such Current Deposit accounts are

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generally used for businesses that have a need for issuing checks to pay employee salaries and
bonuses, as well as to provide cash for inventories and other such business expenses. The bank
or financial institution where the current deposit account is held usually pays out interest on the
funds periodically, such as monthly or quarterly.

Advantage of current bank account :

 The businessmen can withdraw from their current accounts without any limit, subject
to banking cash transaction tax, if any levied by the government.
 It helps businessmen to make a direct payment to their creditors by issuing cheques,
demand-drafts or pay-orders, etc.
 It enables a bank to collect money on behalf of its customers and credits the same in
their customers' current accounts.
 It enables the current account holder to obtain overdraft (short-term borrowing)
facility.
 The creditors of the account holder can get credit-worthiness information of the
account holder through inter-bank connection.

3.5.3 Fixed Deposit Account (FDR)

These are the deposit, which are made with the bank a fixed period specified in advance. It is
purely a time deposit account. The bank does not maintain cash reserves against these deposits
and therefore the bank offers higher rates of interest on such deposits. Interest is paid at rate
determined by the length of the period of deposit; the higher is the rate of interest. Loan is
sanctioned against FDR.

Benefits of FDR :
 Any amount can be deposited.
 Premature encashment facility is available.
 Overdraft facility available against term receipt.
Account Opening :
 1 copy of recent photograph of account holder.
 Nominee’s Photograph.

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3.5.4 Foreign Currency Fixed Deposit (FCFD)

It is a fixed investment instrument in which a specific sum of money which is poised to earn
interest is deposited into a bank. Although fixed deposits have virtually no risk, foreign currency
fixed deposits introduce an element of risk because investors must exchange their currency into
the target currency and then convert it back again once the term is over.
There are a number of reasons why an FCFD investment appeals to certain investors & they are :
 Investors who want some diversification to their portfolios may opt for FCFDs in another
currency.
 Companies looking to hedge against foreign exchange movements may use the FCFD as
a hedging tool.

3.5.5 Monthly Saving Scheme (MSS)

Any Person or Institution can open the MSS accounts by Depositing initially Tk. 500.00 or
multiple of Tk. 500.00 and for remaining period monthly premium to be deposited on the same
of initial deposit for the period of 3, 5, 7, 10, 12 & 15 years.

3.5.6 Monthly Income Scheme (MIS)

Under this scheme one will deposit a minimum of tk.1, 00,000/- or its multiple for three years
and will enjoy monthly benefit of Tk.1, 000/- for every Tk.1, 00,000/-.
Benefits of Monthly Income Scheme :
 Deposit of Tk.1, 00,000/- and its multiple maximum of Tk 50, 00,000/- shall be
acceptable under this scheme.
 The account may be opened either singly or jointly.
 Below 18 years children can open this account with their guardian.
One time deposit Monthly income
100000.00 1000.00
200000.00 2000.00
300000.00 3000.00
400000.00 4000.00
500000.00 5000.00

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1000000.00 10000.00
2000000.00 20000.00
3000000.00 30000.00
4000000.00 40000.00
5000000.00 50000.00
Table No.01

3.5.7 Double Benefit Scheme (DBS) :

Under this scheme deposited amount will be doubled at 7 years and 3 months. Any type of.
customer can open this scheme in his own name or jointly by depositing Tk 10,000 or its
multiple.

Benefits of Double Benefit Scheme :

 Deposit of Tk.50, 000/- and its multiple…maximum of Tk 50, 00,000/- shall be
acceptable under this scheme.
 A person is allowed to open more than one DBS Account.
 The account may be opened either singly or jointly.
 All DBS account holder shall be offered with free Life Insurance Policy under this
scheme.
 Below 18 years children can open this account with their guardian.
3.5.8 Serious Saver's Account
It is a savings account that helps one to resist the temptation to spend one's savings by rewarding
one with a great interest rate for every month that don't make a withdrawal.
 No minimum or ongoing balance required .
 An account that encourages one's to save .
 Benefits :
 Earn interest every month that don't make a withdrawal.
 Arrange for direct deposits straight into the serious Saver account to build the savings
balance.

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3.5.9 Super Savers Term Deposit Account

Sometimes it may happen that even though a person has deposited money in a fixed deposit,
they still need access to the money without having to discontinuing the entire FD. To serve this
purpose a account is offered to customers that is super saver deposit which is a fixed deposit that
is linked to a savings account that allows depositors to withdraw money from the FD through the
savings account. This account also allows depositors to access facilities like overdraft and sweep
in.

3.5.10 School Banking

Adult or non adult student can save their money for next time. They can also related country’s
economic development activities by this money. For more interested to save their money banks
offer school banking. By this account they can save money and operate with their guardian.

In a major decision in November 2012, Bangladesh Bank (BB) asked all banks to open school
banking branches. It said students need to be brought under banking services to help them
contribute to economic activities through savings.

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The latest quarterly report of the central bank’s monetary inclusion reveals that about Taka
1,363 crore (13.63 billion) was deposited with 1,453,936 school banking accounts at 56 banks as
of December 31, 2019, according to a news item published in The Independent newspaper on
May 22.

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Chapter Four:
Deposit Management Practices of SEBL
4.1 Deposit Products of Southeast Bank Limited
Southeast Bank offers various types of account to its different types of customer. These are as
follows:
1. Current deposit (CD) account
2. Savings bank (SB) account.
3. Fixed deposit (FDR)
4. SEBDS (Southeast Bank Deposit Scheme)
5. EDS (Education Deposit Scheme)
6. MDS (Medical Deposit Scheme)
7. Foreign currency deposit
8. School banking
9. Special notice time deposit account

4.1.1 Current Deposit (CD) Account:

A current account is an account, which is generally opened by business people for their
convenience. A current account is a running and active account, which may be operated upon
any number of times during a working day. There is no restriction on the number & amount
withdrawals from current a/c. It does not allow any interest on this account Opening Amount/
Initial Deposit Tk. 500
Service Charge (yearly) Tk. 100
Minimum Balance Requirement Tk. 5000
Current a/c may be individual, joint / partnership or can be formed any name.
Current Deposit Account (Personnel):
 Collect an Account opening form the Bank.
 Fill all the requirements of the form.
 Nominee is must be specified.
 Photograph is most important for any account two for holder and one for nominee
(Except institutional A/C).

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 To open this account the most important things is a photocopy of voter ID card/valid
passport//Nationality Certificate issued by local government must have to add with the
account opening form and also enclose the form 12 with the account opening form.
Current Deposit Account (Sole Proprietorship):
 Signature Card.
 Photograph 3 or 4 for holder attested by introducer and 2 for nominee of signatories
attested by A/C holder.
 Copy of valid Trade License.
 TIN Certificate.
 18-A permission from Bangladesh Bank (for GSA & Agents only).

Current Deposit Account (Partnership):

 Signature Card.
 Photography of signatories attested by introducer.
 Partnership Deed.
 Partners letter of authority to open account and authorization for operation.
 Copy of valid Trade License.
 18-A permission from Bangladesh Bank (for GSA & Agent only).

4.1.2 Savings Bank (SB) Account:

This deposit is intended primarily for small-scale savers. The main object of this account is
promotion of thrift. Savings account is meant for those who want to save a certain amount of
their income and earn interest on that for future needs. All features are more or less like that of
CD a/c except for some restriction that is imposed by the bank. Number of withdrawals over a
period of time is limited. The withdrawing amount is not to exceed 25% of the total balance.
This A/C mainly opens a person name. Initial deposit requires opening a savings account is TK.
200. Minimum balance of TK. 200 should maintain in this account. One cannot withdraw money
not more than two times in a week. To withdraw more than Tk. 20000 seven days notice is
required. Service charge is not fixed.

Restrictions:
1. Customer cannot withdraw money more than twice in a week.

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2. If customers draw money more than 25% of the balance at a time then no interest is
given for that month.

4.1.3 Fixed deposit receipt (FDR):

In this category are included the deposit with the bank for a fixed period which is specified at the
time of making the deposit. Such deposits are therefore called fixed deposits or term deposits. A
fixed deposit is repayable on the expiry of a specified period, chosen by the depositor to suit his
purpose and to enable him to get back money as and when he needs it. The fixed deposit may be
made for 3, 6, 12, 24 or 36 months. The banker need not keep more cash reserves against it and
can utilize such amount more profitably. The banker therefore offers higher rate of interest on
such deposits the depositor parts with liquidity for a definite period. Fixed deposits have grown
in importance and popularity in our country during recent years. When a matured FDR is
withdrawn, the principle amount along with the interest amount (deducting 10% tax from the
total) is paid to the client. Minimum TK. 5ooo requires opening a fixed deposit account. Service
charge TK. 200 realized half yearly on customer’s account.

4.1.4 Southeast Bank Deposit Scheme (SEBDS):

Special advantage with this scheme is that after the scheduled period the client can withdraw the
full amount or can draw pension on monthly basis. Besides the client can open account in his
name in any branch.
Procedure for operation of Southeast Bank Deposit Scheme (SEBDS)
1. The applicant should be minimum 18 years old and Bangladeshi national.
2. The account holder can appoint one or more nominees.
3. On the death of the account holder his / her nominee can withdraw the whole amount of
money.
4. The account holder can change or cancel his nominee through a written notice.
5. On the death of the account holder, the nominees will be entitled to withdraw the deposit
according to the instruction of the account holder.
6. The account becomes inoperable on the death of the account holder.
7. The account under this scheme should be opened within the 10 th day of any month
against deposit of the first installment in cash.

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4.1.5 Education saving Scheme (ESS):

Client can nominate their children and open not more than three accounts. The applicant should
be minimum 18 years old and Bangladeshi national.
Monthly installment:
TK.500, 1000, 2000, 3000, 4000, 5000, 6000, 7000, 8000,9000 &10000.
The monthly installment must be paid by the 10 th day of every month. In case of delay a fine @
TK. 2 per day of defaulted installment will be charged and the fine must be paid with the
installment. The account under this scheme should be opened within the 10 th day of any month
against deposit of the first installment in cash. It may be 4 years, 6 years, 8 years& 10years. The
maturity amount varies its time & installment. The money will be paid out on maturity, but Tax /
Duty and other charges may be adjusted from the amount in the account.

4.1.6 Medical Deposit Scheme (MDS):

The applicants / depositors should be minimum 18 years old, being of sound mind, and a
Bangladeshi national. Monthly installment: TK.500, 1000, 2000, 3000, 4000, 5000, 6000, 7000,
8000,9000 &10000. The money will be paid out on maturity according to the table above, but
Tax / Levy/ Excise and other charges as applicable will be adjusted from the amount.

4.1.7 Foreign currency deposit:

Maintaining foreign currency account through its Authorized Dealer Branches Southeast Bank
Limited gives an opportunity. Bangladesh Nations residing abroad or Foreign Nations residing
abroad or Bangladesh and foreign firms operating in Bangladesh or abroad or Foreign missions
and their expatriate employees can use this deposit service. For account opening two copies of
recent photograph, nominee’s photograph, passport copy, ID of residence in abroad is required.
Benefits: No initial deposit is required to open the account; interest will be offered 1.75% for US
Dollar account, 3.00% for Euro account and 3.25% of GDP account; interest provided on daily
product basis on the credit balance (minimum balance of US Dollar 1000/- or GDP 500/- at least
for 30 days) maintaining in the account.

4.1.8 School banking

School Banking runs all the way through primary school and sometimes through secondary
schooling as well. For the students the concept includes banking education through regular

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school banking days, their own passbook , a reward system for taking part and ‘saving up’ for
their chosen reward. School Banking programs are also important fundraisers for schools who
usually receive a commission from the bank for the number of accounts opened and another for
each deposit made by students. Usually, the institution that runs the particular School Banking
program will provide a certain number of staff to administer the program but parents and
volunteers are often relied on to fill in the gaps which they do admirably. It’s an Interest bearing
deposit account. Initial Balance – Tk. 100. No hidden charge. Smart personalized (VISA) Debit
Card to the parents. Round – the – clock ATM access across the country. No queues for
withdrawal of money. Free SMS Banking. Cost free Mobile Banking Registration is the main
features of school banking. According to FS 2019 there is about 85217 school banking account .

4.1.9 Special Notice Time Deposit Account (SNTD):

SNTD Account is, more or less, like the current account. Account holders of this account are
normally companies or firms or governments or the administrative bodies like the TNO, WDP
etc. But here interest are added to the deposited money.

4.2 Deposit procedure

To start the transaction permanently in a Southeast Bank registration should be maintained
which is account opening.Md. Abdus Salam Azad FF (Executive officer) is always ready to
provide this type of service By account opening one considered as own and loyal client to the
bank. Therefore it wants to retain this customer for a long time providing superior services. To
open an account some criterion client has to follow which helps to keep information about them
to it. To open account in the Southeast Bank they have different account form to registry in
different name. Generally to open any account first of all collecting the form filling account
holder’s name, father’ name, mother’s name, date of birth, citizenship, religion, present and
permanent address and signature. Introducer’s approved should be mandatory and filling
nominee’s information like A/C holder in the form. After this task he or she will be given a
photocopy of voter ID card/valid passport/Nationality Certificate and three copies photographs
(two for A/C holder and another one for nominee). Then officer will check it and give an A/C
no. as well deposit book to deposit money in the A/C no. Then the respective officer inputs data
into Easy Banking Software. Then he prints thanks letter for introducer and A/C holder and

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sends these letters in respective address to verifying addresses of introducer & A/C holder. After
verifying A/C holder’s address the officer issue cheque books to withdraw money.

4.3 Current Interest Rate

Interest rate of different deposit scheme of Southeast Bank :
Deposit scheme Interest rate

Savings deposit 3.5%

Special notice deposit 3.75%

Southeast Bank deposit scheme 6%

Education deposit scheme 8%

Medical deposit scheme 8%

Fixed deposit scheme  5.25% ( 3 months but < 6 month

 5.5% ( 6 month but < 1year)
 6% ( 1 year but < 2 year)
Table No.02
Source : Bangladesh Bank, 2018

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4.4 Charge On Deposits

Name of the Nature of the Description Rate

service charge
Current account  account closing  ---------  300/-
 maintenance fee  ---------  500/-
Saving account  account closing  ----------  500/-
 maintenance fee 1) average position up to 5000/- 1) Not applicable
2) position up to 25000/- 2) 100/-
3) 25001/- above 3) 300/-
Special notice  account closing  ----------  500/-
deposit  maintenance fee  ----------  500/-
Deposit account closing fee ----------------- According to the direction
pension scheme before expirable date of Bangladesh
Bank no charge is
applicable.

Table No.03
Source : Schedule of charges, Southeast Bank (2018)

4.5 Present Deposit Scenario of SEBL

Year Deposit ( in million) Percentage change

2019 649440.78 1.19%
2018 641819.15 12.81%
2017 568911.13 10.25%
2016 516010.74 7.83%
2015 478535.50 16.78%
Table No.04 Source : Financial report of SEBL from 2015-207

SEBL deposit their funds in different sector. They actually diversify their deposits by investing
their funds in the share of different companies, zero coupon bonds, debentures, govt. bond, govt.
security & other bonds.Currently, 57 commercial banks are operating their activities in
Bangladesh.

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In this intense competitive scenario, the remarkable achievements of Southeast Bank on 31st
December, 2019 are presented here:

 Deposits have been increased by 1.19% reaching to taka 64,944 crore;

 The Advance-deposit ratio (ADR) of banks increased nearly about 71%.

Upon analysis of significant indicators of banks in the year 2019, the growth of the deposit was
only 1.19%, but at this time, by collecting low-interest deposits, desired deposits bank has been
achieved and interest expenditure limit has been contained.

4.6 Index Analysis of Deposits

Index analysis of deposits of Southeast Bank ltd from 2015-2019 are given below :
Year 2015 2016 2017 2018 2019
Total deposits 478535.57 516010.74 568911.1 641819.15 649440.78
( million) ( million) 3 ( million) ( million)
( million)
% of change from base 100% 107.83% 118.88% 134.12% 135.7%
year
Table No.05
The bank's deposit changing information can be discussed below through index analysis
changing from the base year 2015:

2015 2016 2017 2018 2019

Figure No.13: Index analysis of deposits

Here, the index analysis is performed according to the information of deposit of SEBL from
20013 to 2019. The base year is 20013. From the above figure it is found that in 2013 Southeast
Bank Limiter’s deposit is much more flourishing rather than any other preceding year which was
135.7% change from base year 20013. This indicates that this bank is in increasing trend in

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deposit but with lower amount in different investment projects; government and others
securities. From the base year 20013 in every year the deposit was increased in a significant
amount. But in 2018 the deposits are increased by 641819.15 million and an overall effect is
134.12% increased than the base year. In 2017 it was 118.88%, in 20014 it was 107.83% and in
2015 it was 100%.

4.7 Deposit Mix of SEBL

The deposit mix of SEBL from 2015-17 are given below:
Year Current & other accounts Saving deposits SND FDR
2019 12.07% 23.28% 15.95% 48.70%
2018 10.97% 21.45% 13.90% 53.65%
2017 23.52% 20.14% 12.00% 44.34%
2016 12.37% 19.89% 12.82% 54.92%
2015 13.53% 19.54% 12.02% 54.91%
Table No.06 Source : Financial report of SEBL from 2015-2019

Overall deposits of the bank increased by 1.19 percent and savings deposits increased to BDT
151,194.18 million Asset Ratio (CRAR) at the end of 2019 stood at 10.06 percent compared to
10.69 percent of the previous from BDT 137,840.78 million of the preceding year showing a
growth of 9.69 percent, which helped to reduce cost of fund and brought the ratio of high cost
and low cost deposit to 49:51. The growth was facilitated by improved service provided to
customers. Besides initiatives carried out for mobilization of deposits did help.

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Figure No.04: Percentage of deposit mix

This chart is showing the percentage of different type of deposit account. Current deposits &
other accounts 12.07%, saving bank deposits 23.28%, special notice deposits is 15.95% & FDR
is 48.7% of 2019.

4.8 Contribution of Deposit to Total Liabilities

Yea Deposit (in million) Liabilities (in million) Percentage of contribution
r
2019 649449.78 895988.41 80.58%
2018 641819.15 778603.91 82.43%
2017 568911.13 683157.58 83.27%
2016 516010.74 629454.14 81.94%
2015 478535.50 586082.99 81.64%
Table No.07 Source : Financial report from 2015-2019

Figure No.05
If we analysis the contribution of deposit to total liabilities in the last year the bank’s total
liabilities as on 31 December 2019 Bangladesh Bank increased to BDT 805,988.41 million

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compared to BDT Balance 778,603.91 million at the end of 2018 showing a growth other banks
of 3.52 percent. Deposit, the biggest component of liabilities stood at 80.58 percent as on 31
December 2019.

4.9 Problems Created by Government in the Process of Southeast Bank

Ltd.
As the Bangladesh Bank fixed the in interest rate & the interest rate has been decreased from the
preceding year, the percentage of deposit is continuously decreasing if we compare the
percentage of change in deposit. If we see that the percentage of change in deposit in 2017 is
about 10.25%, in 2018 it is 12.81% & in 2019 it is 1.19% if we compare with the last year.

If we compare the effect of the problem between 2018 & 2019 the financial performance of
SEBL is :
 Interest income : The interest income of the bank fell to BDT 31,145.61 million from BDT
31,897.90 million of the previous year. To comply with the single digit interest rate slogan of
the Government, SEBL reduces its interest rate of loans and Total operating expenses of the
bank during the reporting Directors’ Report advances resulting negative trend of interest
income.
 Investment income : In 2019 investment income of the bank fell to BDT 14414.82 million
from BDT 16,416.87 million of 2018 which is 12.19% lower than the preceding year.
Lower interest rate causes the decrease of interest income.
 Other operating expenses : Total operating expenses of the bank during the 2019 rose by
BDT 1031.34 million from BDT 12972.48 million of 2018 showing maintenance & up
gradation of IT network & others are main reasons. Besides taxes, security expenses,
business development etc. are caused to increase of total operating expenses.

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Chapter Five : Analysis & Findings

5.1 Trend Analysis of Deposits

Figure No.06: Total deposit from 2015 - 2019

The deposit for the year to year 2018 is 641819.15 million and in the year 2019 is 649440.78
million. In the year 2019 deposit amount is increased by Tk. 7621.63 million. The main reasons
for to increase deposit in 2019 are to reduce government security & bonds. SEBL deposit
increase during the year 2017 by tk.52900.39 million & stood at tk. 568911.13 million as at 31st
December 2017. In 2017 the investment is increased from the previous year. The bank
purchased government treasury bills to cover the increased SLR requirement. In addition to the
above, SEBL had to buy government treasury bills which were devolved by Bangladesh Bank.
There was no investment made by the subsidiary & off-shore banking unit. From the analysis of
last five years investment scenario in 2015 in deposit increased almost 17.78% from the
previous year .

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2015 2016 2017 2018 2019

Figure No.07: percentage change of deposit from year to year

From the deposit trend graph we see that the deposit of SEBL is increasing trend in case of
amount. But the percentage change from year to year fluctuated. The deposit increase in
16.78% in 2015, 7.83% in 2016, 10.25% in 2017, 12.81% in 2018 & 1.19% in 2019 rather than
the previous year. These percentage changes are in the decreasing trend from the previous year.
Due to banking supervision & also bank's internal affair & so on this bank is in the serious
trouble for decreasing trend. As we can see that only 1.19% change occur in 2019 compared to
2018, if we compare year to year the changes are decreasing & this affected the net operating
income of the bank.

5.2 Cost of Deposit of SEBL

The overall cost of deposit from year to year are given below :
Year 2019 2018 2017 2016 2015
Percentage 4.47% 5.49% 6.76% 7.34% 7.73%

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Table No.08

2015 2016 2017 2018 2019

Figure No.08 Source : Financial report of SEBL from 2015-2019
Cost of deposit is a combination of a number of components- the rate paid out to the depositor,
the central cash and reserve liquidity requirement, the compensation paid to the branch or the
sales team that booked the deposit, any additional tangible or non-tangible incentives offered or
paid to the depositor or the sales team. As we can see that, the percentage of cost of deposit is
continuously decreasing from 2015. In 2015 the cost is 7.73%, in 2016 it is 7.34%, in 2017 it is
6.76%, 5.49% is in 2018 & in the last year it is 4.47%. As the percentage is decreasing it
indicates that the performance of than SEBL in the deposit collection has been improve
comparatively to previous year & the cash outlay for the deposit has decreased.
Core deposit monitoring system ( CDMS) :
core deposit is the fresh blood for a bank. It is the low cost deposit & requires close monitoring
for its smooth & continuous growth to support the supply the fund. SEBL aims to core deposit
procurement activities by the web based " Core Deposit Monitoring System ". This system has
enabled instant monitoring of core deposit collection of all branches / offices.

5.3 Bangladesh Bank Guidelines for Deposit Management of SEBL

According to the prudential regulations for banks : selected issues [Updated till January,
2016] the guidelines are :

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5.3.1 Interest rate on deposits:

Banks in general are free to charge/fix their deposit. Banks are advised to limit the weighted
average rate of interest on deposit or intermediation spread within lower single digit in different
sectors other than high risk consumer credit (including credit card). The key features of interest
rate on deposit are:
 Banks must submit returns on rate of interest on deposit to Bangladesh Bank within 7
days of the respective month.
 Banks are allowed to change their deposit only once in a month and that has to be
uploaded on their respective websites along with informing Bangladesh Bank.
 Banks have been advised not to pay/charge any interest beyond their announced rate of
interest on deposits.
 No additional charges shall be collected along with the rate of interest other than the
announced Schedule of Charges.
 In cases where the maximum interest rate has been fixed by Bangladesh Bank, Banks
shall report their own maximum cap. Banks have also been advised to upload their
deposit on their respective website and display the same in all of their head offices and
branches where it can be easily visible.

5.3.2. Operation of special notice deposit (SND) account

Banks have been advised to comply with the following rules with a view to removing ambiguity
and ensuring uniformity in the operation of (SND) account :
 All the accounts like Short Term Deposit/SND/Call Accounts shall only be termed as
Special Notice Deposit (SND) account.
 Minimum 7 days prior notice from the depositor will be required to withdraw money
from the SND account.
 Cheque book must be issued against this account to facilitate direct withdrawal.
 Interest on the SND account will be calculated on the day end balance and accumulated
interest will be credited to the same account on a half yearly basis/at the time of closing
the account.
 As this account doesn’t have any fixed term, rate of interest may only vary for different
amount/range of deposits. However, banks shall not differentiate rate of interest among
the customers belong to same range.

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 No minimum balance fee/ incidental charge/ ledger fee/ service charge can be imposed
on this account. Only account maintenance fee and account closing charge at the time of
closing the account can be imposed. No charge above Taka Five Hundred as account
maintenance fee on six monthly basis and no charge above Taka three hundred as
account closing charge at the time of closing the account can be imposed.
 Rate of interest for SND account has to be declared in ranges- (a) Less than 1 crore,
(b) 1 crore and above but less than 25 crore, (c) 25 crore and above but less than 50
crore, (d) 50 crore and above but less than 100 crore, (e) 100 crore and above.
 No rate of interest beyond published/announced rate can be offered.
 Banks shall upload published/offered rate of interests on their respective websites and
must submit the returns in the revised BR-15 format on a monthly basis within 7 days of
the respective month.

5.3.3. Bank Charges on deposit

Banks in general are free to fix the fees and commissions relating to the services offered by them
to their customers. In applying the fees there should be no discriminations among customers for
similar services. In other words, all customers are required to be treated at par for similar
services. Bangladesh Bank has issued master circular incorporating necessary instructions for
rationalization of different service charges received by banks. Banks have also been advised to
upload the schedule of charges in their respective websites and display the same to upload the
schedule of charges in their respective websites and display the same in all of their head offices
and branches, for ready reference of the clients.

Considering the interest of small depositors it has been decided that no charge can be imposed as
account maintenance fee for average deposit balance up to Taka Five Thousand (BDT 5,000/-).
It has also been decided that Taka One Hundred (BDT. 100/-) at maximum may be imposed as
account maintenance fee on six monthly basis for average deposit balance up to Taka Twenty
Five Thousand (BDT 25,000/-). Taka Three Hundred (BDT. 300/-) at maximum may be
imposed as account maintenance fee on six monthly basis for average deposit balance above
Taka Twenty Five Thousand (BDT 25,000/-).

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5.4 Statutory Deposit Position of SEBL Comparing With Bangladesh Bank

5.4.1 Cash Reserve Requirement (CRR) :
As per Monetary Policy Department (MPD) circular No. 01 dated 23 June 2016 of Bangladesh
Bank, all scheduled Banks are required to maintain a CRR minimum 6.5% on bi-weekly
average basis of the average total demand and time liabilities of two months prior to current
month (i.e. CRR of December 2019 will be based on weekly average balance of October 2019
as per Banking Regulation and Policy Department (BRPD) circular no. 12 dated 06 September
1998) and minimum 6% on daily basis. However, SEBL has been maintaining its CRR
according to the policy. Average demand & time liabilities of SEBL in 2019 was tk.
642,561,183,000 & in 2018 it was tk.606,380,132,000.

Details Year-2019 Year-2018

Required reserve (6.5% of average demand and time liabilities on 41766476895 39414708580
bi-weekly basis)

Actual reserve held with Bangladesh Bank* 42872179300 40850691399

Surplus (Shortfall) 1105702405 1435982819

Table No.09 Source : Financial report of SEBL,2019

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Figure No.09 : CRR position of SEBL

5.4.2 Statutory Liquidity Ratio ( SLR) :

As per MPD circular No. 02 dated 10 December 2015 and Department of Off-Site Supervision
(DOS) circular No. 01 dated 19 January 2016 of Bangladesh Bank, all scheduled Banks are
required to maintain a SLR minimum 13% on daily basis based on weekly average demand and
time liabilities of two months prior to current month (i.e. SLR of December 2019 will be based
on weekly average balance of October 2019) against which, SEBL has maintained the SLR
more than 13% as shown in the Statement of Financial Position in the following:

Details Year-2019 Year-2018

Required reserve (13% of average demand and time 83532953790 78829417160
liabilities)
Actual reserve held with Bangladesh Bank 3.03.02.01 15287709384 21801319874
Surplus 69344755594 139183755714
Table No..10 Source : Financial report of SEBL, 2019

Figure No.10 : SLR position of SEBL

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5.5 General Findings

 This bank invests deposited funds maximum in the long term maturity bucket rather than
short term maturity bucket.
 SEBL has more long term deposit than short term deposit & due to competitive market,
SEBL has to incurs higher cost on their deposits.
 The general banking department perform relatively better than previous.
 Opinion introducer is one of the problems to open an account. When any client is new of
the city wants to open an account it is a problem for him / her to arrange a introducer or
account holder.
 The banks are in the competition to introducing new products as well as modern and
contemporary services to attract the customers. The traditional operation like depositing
or withdrawing money from the branch counters may soon be abolished. Now, there are
over 148 million mobile subscribers and 83 million internet subscribers in Bangladesh.
These huge number of people are trying to get banking services over mobile and
internet. Keeping in mind the safe banking service to the huge number of people,
Southeast Bank has a SEBCERT (Southeast Bank Computer Emergency Response
Team) dealing with computer threats, vulnerability, cyber-crime as well as Digital
Security, misappropriation.

5.6 SWOT Analysis

SWOT is a strategic planning tool used to evaluate the strengths, weaknesses, opportunities, and
threats to a project..It involves specifying the objective of the project and identifying the internal
and external factors that are favourable and unfavourable to achieving that objective. The
strengths and weaknesses usually arise from within an organisation, and the opportunities and
threats from external sources.

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Figure No.11: SWOT Analysis

Strength :
 Strong capital and asset quality.
 The bank is financially safe
 Clearly specify the deposit process to reduce the problems.
 Strong documents are needed to open an account by a new account holder.
 The bank has huge amount of deposit and market potentiality.

Weakness :
 The techniques specified for deposit appraisal is not sufficient.
 IT section is weak comparatively to others.
 Sometimes they have to pay extra time due to not having it expert in different branches.
 Refreshment facility is poor where customer is the key to bring deposit.
Opportunity :
 Due to have a strong brand image they may establish different industry or firm. For
instance housing, consumer products etc.
 Branches as well as booth they may set up in different areas.
 Expanding the business in abroad.

Threats :

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 Rivals are increasing day by day.

 Fast service is more challenging compare to others.
 Political unexpected activities.
 Share marker instability.
 Rules and regulations are changed any time ordering from central bank.
 Utilization of modern software.

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Chapter Six : Conclusion

6.1. Discussion
There are many state owned and private commercial Bank in Bangladesh. Among all SEBL is
the second largest state owned commercial Bank. SEBL provide both corporate and retail
banking services with a strong focus on socio economic development of the
country.Contribution of deposit of SEBL in the banking sector in 2019 was 6.92%.

SEBL provides various deposit product : Current & Call Deposits [current deposit, call Deposit,
deposit in foreign currency, resident foreign currency deposit,deposits in F/C (WES),
convertible Taka A/C (D)], Savings Bank Deposits [ savings deposit from foreign remittance,
QCash deposit, NRB FC deposit, SEB monthly savings scheme, SEB special deposit scheme,
SEB monthly amanat prokalpa, janata hajj deposit scheme, janata deposit scheme ], Term
Deposits [fixed Deposit, SEB double benefit scheme, SEB monthly benefit scheme, retirement
savings scheme, SEBL retirement savings scheme, continuous benefit account], Special Notice
Deposit [ special notice deposit, convertible Taka A/C (SND)].

Overall deposits of the bank increased by 1.19 percent and stood at BDT 649,440.78 million at
the end of 2019. The savings deposits increased to BDT 151,194.19 million from BDT
137,840.78 million of the preceding year showing a growth of 9.69 percent. The low cost
deposit includes savings deposit, current deposit and short term deposit. This helps to bring the
ratio of high cost & low cost deposit to 40:51 which is considered as standard level. This growth
is facilitated by extended branch default loans, bank designed various action plans and took
network and expected service provided to customers as well as special initiatives carried out for
mobilization of cost free and low cost deposits during the year.

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6.2 Recommendations
This report is prepared on the basis of deposit management. The report has attempted to give
details of deposit management. In preparing this report it is understood that deposit management
is not a simple matter of a bank. During my internship period it has become easy to understand
each and every part of this section.

Based on my experience in working Southeast Bank Limited as an intern, I would like to put
some of my suggestions such as:
 Southeast Bank Limited should be flexible in their charges so that SEBL can expand
its deposit.
 Number of booth should be increased to fulfill the demand of the customers.
 They are using Easy Banking software in banking activities which is old. They may
use modern software to provide service faster to the clients.
 They can start mobile banking what already launched in other banks.
 Southeast Bank Limited can also increase their deposit product in different sectors so
that they can earn more profit.
 For the various investment the amount of deposit of Southeast Bank Limited provide
is not sufficient so SEBL must try to reduce the other operating expenses.
 They have to make the regular review of the worse accounts.

For the betterment of Southeast Bank Limited deposit management system, SEBL must consider
above recommendations. An efficient deposit management can lead SEBL in high position.

6.3 Conclusions
Southeast Bank Limited (SEBL), setting new standards in the banking arena in the time of
turbulent economic conditions. As part of the long-term financial reform and modernization plan
of the government, the bank had been converted into a public limited company. SEBL helps to
mobilize the resources to stay strong in the key areas of operation. The success of a bank
depends largely on the efficient deposit management. A successful deposit management is not
only need for a bank’s own performance but also it is needed for the smooth development of an
economy. In any strategy of economic development, therefore, it is essential to emphasize the

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evaluation of a sound and well integrated deposit management system from the view point of
both resources mobilization and efficient allocation of funds.

The current situation of Southeast Bank Limited is satisfactory. But in the age of competition if
the bank does not provide extra ordinary that means superior services than it will be difficult to
continue banking because everybody wants to maintain quality. In ddeposit portion Southeast
Bank Limited has some problem. The amount of deposit is increasing year to year but
percentage of deposit is not so much satisfactory compared to previous year. When Southeast
Bank Limited is able to overcome this type of problem then it would be more structured
compared to any other bank operating local or foreign in Bangladesh.

So at last we may say that deposit management systems of Southeast Bank Limited is good but it
must be concentrated on the whole rather than some specific sector.

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References

 Annual reports of Southeast Bank(2015-17)

 Kabir, M. R., Qayum, M. A., & Islam, M. R (2015). “Efficiency in Deposit

Management of Islami Bank Bangladesh Ltd. and Pubali Bank Ltd.: A Comparative
Study”. ASA University Review, 7(1), 209-222.

 Mansur, D. A. H. M. 2017. “Financial Market Developments and Challenges in

Bangladesh”. Policy Research Institute of Bangladesh. Prepared as a Background
paper for the Seventh Five Year Plan. Available: http://www.plancomm.
gov.bd/wpcontent/uploads/2017/02/9_Financial-MarketDevelopments-and-
Challenges-inBangladesh.

 Md. Yahia Bapari, Md. Al-Fahad Bhuiyan and Md. Monjurul Islam, International
Journal of Current Research, vol 8, Issue 10, pp. 40806-40815, October 2018.

 Report on prudential regulations for banks : selected issues by Bangladesh Bank

[ updated till 2016]

 Schedule of charges, Bangladesh Bank (2018).

 Ticijan Peruško & Robert Zenzerović, Croatian Operational Research Review

(CRORR), Vol. 2, 2013.

 Tasneema Khan, Deposit Performance Analysis: A Comparison of Conventional and

Islamic Banks in Bangladesh, International Journal of Economics, Finance and
Management Sciences . Vol. 6, No. 4, 2018, pp.
165-173. doi: 10.11648/j.ijefm.20180604.14
https://www.southeastbank.cm

.bd/

 https://www.wikipedia.org

 https://www.bb.org.bd

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Appendix

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