SUBMITTED TO:

SK. ALAMGIR HOSSAIN

LECTURER

DEPARTMENT OF FINANCE

JAGANNATH UNIVERSITY, DHAKA-1100.

SUBMITTED BY:

MINHAJUL ISLAM

(GROUP LEADER)

Roll: B120203101

ON BEHALF OF GROUP 20

Page | 1
 Group no.20

Name ID No.
Minhajul Islam B120203101

Md. Rashedunnobi B120203105

Ashikur Rahman B120203130

Sujon Das B120203107

Sagor Zoardar B120203082

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 Assignment On:

Activities of commercial bank

Role of commercial bank

Economic development of Bangladesh

Different types of deposit product offered

by commercial bank in BD.

Different types of loan product offered

by commercial bank in BD.

Distinguish between commercial bank and

Islamic bank.

Necessary papers and document needed to

open an account in case of company or
personal.

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Definition of Commercial Bank:

A commercial bank is defined as a bank whose main business is

deposit-taking and making loans. This contrasts with an investment
bank whose main business is securities underwriting, asset
management and securities trading.

Commercial banks make their profits by taking small, short-term,

relatively liquid deposits and transforming these into larger, longer
maturity loans. This process of asset transformation generates net
income for the commercial bank. Note that many commercial banks do
investment banking business although the latter is not considered the
main business area

Banks and other financial institutions play a vital role in forecasting the
economic and social condition of a country. Banks in Bangladesh now
constitutes the core of the country’s organized financial system. The
main tusk is to mobilize funds from surplus economic unit and
deployment it to deficit economic unit and UBL is doing that
successfully from its establishment.

Customer satisfaction is very important for the reflections of the

succession toward progress and expansion for any service institution.
Excellence in customer service helps an organization to build a good
position in the market and retain more customers. To keep the
customers satisfied, UBL provides various types of service to its
customers. UBL Principal Branch has three departments. These are:
General Banking Department, Foreign Exchange Department and
Credit Department. Through these three departments they serve their
customers.

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General banking department provides service to the customers by
doing the elementary tasks of the bank. This department has three
sections: Main Cash with Cash Cell; Deposit Section i.e. Savings,
Current deposit, FDR, SNTD; Clearing; Bills; Accounts; Sanchaypotra,
These elementary tasks include account opening, providing master
credit card, internet banking, offering different types of schemes to the
customers, different types of bills and fees collection etc. Foreign
Exchange department also play vital role by providing service to the
customers. This department has three sections. These are: Export
section, Import section and Foreign Remittance section. All these three
sections Foreign Exchange department provides services to its
customers. Credit department has three sections i.e. General Loan,
Industrial Loan and Loan Recovery.

Foreign exchange is an important department of Uttara Bank Limited,

which deals with import, export and foreign remittances. It bridges
between importers and exporters. This department is playing an
important role in enhancing export earnings, which aids economic
growth and in turn it helps for the economic development. On the
other hand, it also helps to meet those goods and service, which are
most demandable and not adequate in our country.

Uttara Bank Limited is operating efficiently with its existing products

and services. In service-oriented industry, it is very difficult to set a
standard rule to satisfy the customer. Several factors shape up the
decision of taking the service from an organization. The services which
the Bank provides to their clients are very prompt and quality one
compare to other private or foreign banks. The bank made satisfactory
progress in all areas of business operation. So Uttara Bank Limited is
the bank which will go on in the banking sector of the world with their
slogan "Abohoman Banglar Oitijje Lalito”

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The Role of UTTARA BANK:

UTTARA Bank engages in the following activities:

1. Processing payments via telegraphic transfer, internet banking, or

other
2. Issuing bank drafts and cheques
3. Accepting money on term deposit
4. Lending money by overdraft, installment loan or other
5. Providing documentary and stady, guarantees, performance
bonds, securities underwriting commitments and other forms of
off balance sheet exposure.
6. Cash management and treasury
7. Merchant banking and equity financing

Besides Its deposit products include savings bank account ,fixed deposit
accounts , short term deposit accounts , current accounts , pension
accounts, and foreign currency accounts .The banks’ loan and lease 
services are composed micro credit, SME financing, industrial loans,
working capital financing., export credit, import credit , bill purchase ,
letter of credit , letter of guarantee, lease financing ,transport financing
consumer loan schemes and house building loans . It also offers various
remittance services including remittance of fund from abroad to
Bangladesh

Traditionally UTTARA Bank also underwrite bonds, and make market

in currency, interest rates, and credit-related securities, but today
UTTARA Bank usually have an investment bank arm that is involved in
the aforementioned activities.

Role Of Uttara Bank In The Economic Development Of

Bangladesh:

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Uttara bank plays an important and active role in the economic
development of a country. If the banking system in Bangladesh is
effective, efficient and disciplined it brings about a rapid growth in the
various sectors of the economy

The following is the significance of Uttara bank in the economic

development of Bangladesh:

 1. Mobilizing saving for capital formation

 2. Investment in new enterprises

 3. Financing industry

 4.financing trade

 5. Development of agriculture

 6. Balanced development of different regions

 7. Influencing economy activity

 8. Help in Monetary policy

 9. Monetization of the economy

 10. Export promotion cells

1. Mobilizing Saving for Capital Formation:

Uttara bank helps in mobilizing savings through network of branch

banking. People in Bangladesh have low incomes but the banks induce
them to save by introducing variety of deposit schemes to suit the
needs of individual depositors. They also mobilize idle savings of the
few rich. By mobilizing savings, the bank channelizes them into
productive investments. Thus they help in the capital formation of a
developing country.

2. Investment in new enterprises:

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Businessmen normally hesitate to invest their money in risky
enterprises. Uttara bank generally provides short and medium term
loans to entrepreneurs to invest in new enterprises and adopt new
methods of production. The provision of timely credit increases the
productive capacity of the economy.

3. Financing Industry:

Uttara bank finances the industrial sector in a number of ways. They

provide short-term, medium-term and long-term loans to industry. In
Bangladesh, the Uttara bank undertakes short-term and medium-term
financing of small scale industries, and also provides hire- purchase
finance. Besides, they underwrite the shares and debentures of large
scale industries. Thus they not only provide finance for industry but
also help in developing the capital market of the countries.

4. Financing Trade:

Uttara bank helps in financing both internal and external trade. The
bank provides loans to retailers and wholesalers to stock goods in
which they deal. They also help in the movement of goods from one
place to another by providing all types of facilities such as discounting
and accepting bills of exchange, providing overdraft facilities, issuing
drafts, etc. Moreover, they finance both exports and imports of the

country by providing foreign exchange facilities to importers and

exporters of goods.

5. Development of agriculture:

Uttara bank particularly in developing countries are now providing

credit for development of agriculture and small scale industries in rural
areas. The provision of credit to agriculture sector has greatly helped in
raising agriculture productivity and income of the farmers.

6. Balanced development of different regions:

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Uttara bank plays an important role in achieving balanced development
in different regions of the country. They help in transferring surplus
capital from developed regions to the less developed regions. The
traders, industrialists etc. of less developed regions are able to get
adequate capital for meeting their business needs. This in turn
increases investment, trade and production in the economy.

7. Influencing economic activity:

The banks can also influence the economic activity of the country
through its influence on availability of credit and the rate of interest. If
the commercial banks are able to increase the amount of money in
circulation through credit creation or by lowering the rate of interest, it
directly affects economic development. A low rate of interest can
encourage investment. The credit creation activity can raise aggregate
demand which leads to more production in the economy.

8. Help in Monetary Policy:

The bank helps the economic development of Bangladesh by faithfully

following the monetary policy of the central bank. In fact, the central
bank depends upon the commercial banks for the success of its policy
of monetary management in keeping with requirements of a developing
economy.

Thus the bank contribute much to the growth of the economy by

granting loans to agriculture, trade and industry, by helping in physical
and human capital formation and by following the monetary policy of
the country.

9. Monetization of the economy:

The Uttara bank by opening branches in the rural and backward areas
are reducing the exchange of goods through barter. The use of money
has greatly increased the volume of production of goods. The non-
monetized sector (barter economy) is now being converted into
monetized sector with the help of bank

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10. Export promotion cells:

In order to increase the exports of the country, Uttara bank have

established export promotion cells. They provide information about
general trade and economic conditions both inside and outside the
country to its customers. The bank is therefore, making positive
contribution in the process of economic development.

Different types of deposit product offered by Uttara Bank

Bank Deposit Account

Bank Deposit Account is an arrangement with a bank that allows the

customer to pay Take out money. The bank keeps a record of all the
payment and deposits (transaction) in the customer’s name. It binds
the banker and the customer into a contractual relationship. Using an
account, a customer may deposits and withdrawals of money from
his/her account. It is also called the primary and fiduciary relationship
between bank and customer. Opening Deposit Account with a bank is
the way of creating banker relationship.

Who can open Deposit Account?

Every person who is minimum 18 years old and competent to contract

can open an account with a bank provided that bank is satisfied
regarding his willing to enter into necessary business relations with
him.

Different of Deposit Account

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Deposit account is one of the important sources of bank’s funds. In
order to attract customers the Banks offer attractive facilities to
different types of deposit accounts holders. Some Deposit Account is as
follows:

The functions of general banking department of UBL are as

follows:

 Maintenance of different types Deposit A/C:

 Saving Accounts
 Current Accounts
 Fixed Deposits
 Short Term Deposits
 Other Saving Schemes
 Receipts & payment of cash.
 Handling transfer transactions.
 Operations of clearinghouse.
 Maintenance of accounts with Bangladesh Bank & other banks.
 Collection of Cheques& Bills.
 Issue and payment of Demand Drafts, Telegraphic Transfers and
Payment Orders.
 Maintenance of Safe Deposit Lockers.
 Maintenance of Internal Accounts of the banks.
 Reporting to the Head Office about daily position of the bank.
 Saving record of all transactions in computer.
 Closing and transfer of different types of accounts.
 Keeping good relation with valued customer.
 Providing necessary support to the customer.

Various types of account offered by UBL:

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UBL offers various types of account to its different types of customer
.These are as follows:

 Current deposit (CD) account

 Savings bank (SB) account
 Short term deposit(STD)
 Fixed deposit (FOR)

Different types of loan product offered by Uttara Bank

Product and services:

UBL has different kind of product and services. Its 211 branches carry
out all its Banking activities very significantly. Now we can describe
about Uttara Banks product and services-

 Products-
 Personal banking products-
 Personal loan.
 Vacation loan.
 Car loan.
 Any purpose loan.
 Small business loan.
 Different deposit scheme;
 Monthly saving scheme (MSS)

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  Monthly benefit scheme(MBS)
 Double growth deposit scheme.
 Uttaran consumer –credit scheme.
 Money gram.
 LC.

 Services-
 As financial services UBL provides some services to its clients.
These are-
 Corporate Banking
 Personal Banking
 SME services
 Capital market services.
 Telephone and internet banking services

Types of Loan and advances of Uttara bank ltd:

Uttara bank has different type of loans. As per banking company act
1991 every company has to maintain a specified minimum (presently
16%) of the total of its demand and time liabilities in the form of cash
and approved securities with Bangladesh Bank. .This percentage or
ratio is termed statutory liquid ratio. The Bank continued to
consolidate and diversify its portfolio in 2010 to have a diversified client
base and portfolio distribution across the sectors to reduce client
specific concentration and industry specific concentration and to
reduce overall portfolio risk. In 2010 Uttara Bank Ltd registered a steady
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growth in the credit portfolio posting a growth of 23.37 percent. Total
loans and advances of the bank stood at taka 48,672.7 million during
the year 2010 as compared to TK 39,451.4 million of the previous year
.Average loan per Branch stood at TK 230.7 million .Sector wise
allocations of advances revealed a well- diversified portfolio of the bank
with balanced exposure in different sectors. His percentage or ratio is
termed statutory liquid ratio. Commercial banks allow different forms
of advances.

Uttara bank limited branches give different type of loans to its

borrower. These are;

 CC Hypo (Cash credit hypo)

 CC Pledge (Cash credit Pledge)
 Small Business Loan (SBL)
 Consumer Credit Scheme(CCS)
 Personal Loan (PLS)
 UHRL (Uttaran Housing Repairing Loan)
 IBP.
 LTR.
 Overdraft (Second overdraft)
 Agricultural Loan
 Women Entrepreneurship

Cash credit (Hypothecation):

Cash Credit allowed against hypothecation of good is known as Cash

Credit (HYPO) limit. In case of hypothecation, the borrower retains the
ownership and possession of goods on which charge of the lending
bank is created.

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Under this arrangement a credit is sanctioned against hypothecation of
the raw materials or finished goods. The letter of hypothecation creates
a charge against the goods in favor of the Bank but neither the
ownership nor its possession is passed on to it; only a right or interest
in the goods is created in favor of the Bank and the borrower binds
himself to give possession of the goods to the bank when called upon to
do so. When the possession is handed over, the charge is converted into
pledge. This type of facility is generally given to the reputed borrowers
of undoubted integrity.

Charge of Uttara bank limited is 15%. The bank should take the
following precaution.

The banker should carefully verify the stocks of hypothecated goods

and their market price.

 Stocks should be duly insured against fired burglary.

 Bank should try obtaining sufficient collateral security.
 Periodical statement of stock duly signed by the borrower should
be obtained.
 The goods are readily saleable and have good demand in the
market.
 The borrower should be trustworthy and prudent customer.
 The price of the goods, offered as security, is to be calculated as
per purchase price or market price whichever is lower.
 The price of goods is steady etc.

Cash credit (Pledge):

Cash credit allowed against pledge of good is known as Cash Credit

(Pledge).In case of Cash credit (Pledge), the borrower pledge his goods
to the bank as security against the Credit facility. Banks retain the

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effective control of the pledged goods. Pledge goods may be stored in a
go down of the borrower but under lock and key of the bank. Banks
guards are posted to protect the go down sometimes; pledges goods are
in Banks go down.

For CC loan every individual have to show some papers of their

property. These are -

Original title deed

 Bia deed(minimum 25 years ownership)

 Mutation porcha
 Land revenue receipt and holding tax receipt.
 Maathjoripporcha.
 RAJUK Approval Plan.
 Picture of the property.
 Owners photograph (4 copies).
 Valuation certificate.
 NEC(Non Encumbered Certificate)
 Location Map.

If a person wants to take CC loan for his shop he has to submit some
papers. These are-

 Applicants photograph.
 Up-to-date trade license.
 Contract deed of rental shop.
 Stocks of goods position.
 Balance sheet of 3 years.
 Account statement.
 TIN Certificate.
 National ID Card.

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Small Business Loan :

In case of SBL the borrower will get loan from the bank against his
business. Here the bank will charge against the amount of loan.
Maximum limit of the loan is TK 5 lac. Uttara bank Ltd Charges 15%
interest against the amount.

Bank will obtain following documentation from the borrower.

 Photographs of borrower.
 Commissioner Certificate/ ID card/ Passport/ Photocopy as the
identity of the borrower.
 Photographs of the mortgage property.
 Documentation of property (Dalil,Parcha,Khajnarasit)etc.
 Valuation of the property.
 Audit report of the property.
 Six months bank statement.
 Report of CIB.

Consumer credit schemes

The Bank distributed loan of Tk.6.4 million and 886.7million during the
year 2010 under two special project namely “Uttara Consumer Loan
Scheme “and Uttaran House Repairing and Renovation Scheme
“respectively . The outstanding balance of the same stood at Tk. 84.1
million and Tk 4,315.5 million respectively at the end of the year 2010.It
may be mentioned here that the recovery rate in these schemes is
satisfactory

Prudential Regulations for Consumer Financing Regarding financing

the purchase of used vehicles Bangladesh Bank, Banking Regulation &

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policy Department, Head office, Dhaka issued a BRPD Circular letter
No. 15 dated 20/12/2010 in relation with financing on Auto vehicles loan
which is respected below, for meticulous compliance, Banking
Regulation & policy Department Bangladesh Bank, Head Office, Dhaka-
1000.

Prudential Regulation for consumer Financing please refers to

Regulation 21 of Guideline for Regulation for Auto (Loan) Circular vides
BRPD Circular No.33 dated November 2010.

Special features:

 No collateral security is required.

 Quick sanction.
 Simple rate of interest.
 Maximum loan amount Tk 3,00,000/-
 5% Incentive on total interest charged.

Personal Loan:

The banks desirous of financing the purchase of used vehicles shall

prepare uniform guidelines for determining value of the used vehicles,
however, the bank shall only finance the vehicles imported as described
in the existing import policy order, to cater the urgent financial need of
the service holders having limited income bank introduced loan
scheme. The outstanding balance of the same stood at Tk2.0 million at
the end of the year 2010.

Special features:

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  Any permanent salaried employee aged between 20 to 55 years is
eligible to loan.
 No collateral security is required.
 Maximum amount of loan Tk 100000/-
 Maximum period of loan upto 3 years.

Uttaran housing Repairing Loan:

In case of UHRL the borrower will get loan from the bank by giving
mortgage of his property. Here the bank will charge against the amount
of Loan. Maximum limit of the loan is TK.25 lac. Uttara bank Ltd
charges 15% interest against the amount.

Bank will obtain following documentation from the borrower:

 Photographs of Borrower.
 Commissioner Certificate/ ID card/ Passport photocopy as the
identity of the borrower.
 Photographs of the mortgage property.
 Documentation of property (Dalil, Parcha, Khajna, Rasid etc.)
 Valuation of property
 Audit report of the property
 Six months bank statements.
 Report of CIB.

Purpose:

 To help genuine House/ Building/ Flat owners to undertake

repairing, renovation works for better living or increasing rental
income.

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  To help the owners of House/ Building/ Flat to get loans at a
minimum time & without any hurdles.
 To contribute towards development of socio-economic condition
of the society.
 To improve the standard of service holders and self-employed
persons or Retired Government Officers, excluding Businessmen,
developer.

Interest and other charges:

Interest: 15.00% per annum with yearly rest subject to change that may
be made by the Bank from time to time.

 Processing Fees: @TK 1000.00 (Taka One Thousand) only per lac
to be realized before processing of loan.
 Processing fee to be refunded deducting TK.500.00 (Taka Five
Hundred) only as service
 Charge per proposal in case of it is rejected
 Cost of Application form & Prospectus: TK 200.00 (Taka Two
Hundred) only.

If loan installments are regularly & timely paid without any default, the
borrower will be allowed incentive at the rate of 5% of the total interest
charged which will be refunded on full adjustment of the account.

Repayment period:

The loan is to be repaid by equal by monthly installments including

interest maximum within 8 (Eight) years for loan above TK 5.00 lac
(Taka Five Lac) only.
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  Repayment will start after 3 (Three) months of availing 1st
installment of the loan.
 Loan installments will have to be paid within 10th bay of every
month. If any installment is not paid within 10th day of the
month, the borrower will be treated as defaulter and penal
interest @ 2% per month will be charged on the defaulted
amount.

Security:

 Registered Mortgage of the property where against loan is to be

availed by deposit of original Title Deed with chain of documents.
 Registered Irrecoverable General Power of Attorney empowering
the Bank to sell the mortgaged property as and when required.
 An undertaking by the borrower in banks prescribed form to pay
monthly installments regularly in time.
 Postdated cheque for all installments to be deposited in advance.
 Personal Guarantee of Spouse or any other person acceptable to
the bank is to be obtained.

The following papers have to submit while applying for loan-

 Application in prescribed form duly filled in all the columns and

signed by the applicant.
 Personal Net Worth statement of the client.
 Lawyer’s opinion on the documents of the properties.

Benefit of the scheme:

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The genuine House/ Building/ Flat owners of small and fixed income
group or retired persons may avail of the opportunity to repair,
renovate their own house according to their need and repayment
capacity.

Eligibility of the client:

 Any owner of House/ Building/ Flat aged between 30 to 55 years

will be eligible to get loan under this scheme who are financially
capable to repay the loan having income or additional income
from own source and added rental income to be guaranteed after
utilization of the proposed loan. In case of age bar of applicants
the proposals may be considered for sanction if the guarantor is
found good or other source of income of the applicant covers the
installment of the loan.

The House/ Building/ Flat to be repaired and / or renovated by the

loanee should not be older than 20 years.

The monthly income will be certified by the employer of the concerned

loanee in case he is a service holder.

 The employees or their dependent of Uttara Bank Ltd. Are not

eligible to get loan under this scheme.
 The applicant must have a saving Account with the branch of the
Bank from where he / she want to avail of the loan.
 Bank reserves the right to accept or reject any application without
assigning any reason whatsoever.

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Inland Bill Purchase (IBP):

Uttara Bank Limited started granting of credit facility against Inland

Bill Purchase by issuing the Instruction Circular No.243 dt. 17-01-99.
subsequently certain amendments have also been made there to
provide Credit Division.

All concerned are hereby instructed to observe the following procedure

for granting of credit facility against Inland Bill Purchase (IBP):

 Only those bills will be purchased which arise out of genuine

business transactions of manufacturing units/concerned.
 The concerned branch allowing IBP facility must see that the bill
has been drawn by the party himself and he is not the purchaser
of goods/services or endorser of the bill.
 The applicant requesting for IBP facility will have to submit all the
shipping documents as required in the ILC opened by buyer’s
bank.
 On receipt of acceptance and maturity date for payment of the bill
from ILC opening bank, our concerned branch will invariably
verify, by physical contact with concerned ILC issuing bank, the
genuineness of the said acceptance letter by relationship
Manager/ second Officer/ Dealing officer (not bellow Principal
Officer) with authorized signature to be counter signed by the
branch incumbent.
 The branches must not purchase Bill against ILC opened by any of
our Bank branches. In case of any need for purchasing against ILC
of our bank, prior permission from Head Office is to be obtained.
 The loans under IBP will be allowed by the concerned Branch
Manager as per his above discretionary power. The loans falling

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 beyond his discretionary power will be allowed only on sanction
from the concerned Zonal Head or Head Office as the case may
by.
 In case the liability against any IBP is not adjusted even within 30
days after due date of payment, the matter shall be referred to
Head Office, International Division giving full particulars of
bills/LCs for taking up the issue by them for settlement.
 The following charges and interest are to be realized:

1. Handing Charge: 0.25% of bill value with minimum TK.25.00

and maximum TK.2000.00

2. Rate of interest: 13.00% per annum with quarterly rest subject

to change that may be made by the bank from time to time.

 The following papers and change documents are to be obtained/

executed by the party before allowing IBP.
1. Loan application ( as per format in annexure ‘A’)
2. Single/ Double Party DP note (AS applicable)
3. DP Note delivery Letter (where guarantor exists)
4. Letter of continuity
5. Revival Letter Form-I
6. Revival Letter Form-II (where guarantor exists)

All concerned must comply the instructions of this circular

meticulously while granting credit facility against IBP.

Loan Against Trust Receipt (LTR):

On the arrival of goods and lodgment of import documents, importer

may request the bank for clearance of goods from the port (custom)

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and keep the same to bank go down. Proper sanction from the
competent authority is to be obtained before clearance of consignment.
For giving these types of loan, officer makes loan proposal and sends it
to H/O for approval. After getting approval from H/O, bank grants loan
in the form of LTR.

 Advance against a Trust Receipt obtained from the Customers are

allowed to only first class tested parties when the documents
covering an import shipment or other goods pledged to the Bank
as security are given without payment. However, for such
advances prior permission/sanction from Head Office must be
obtained.
 The customer holds the goods or their sale-proceeds in trust for
the Bank, till such time, the loan allowed against the Trust
Receipts is fully paid off.

The Trust Receipt is a document that creates the Banker’s lien on the
goods and practically amounts to hypothecation of the proceeds of sale
in discharge of the lien.

Overdraft:

Overdraft is a loan. A person must need to have cash deposit if a person

wants to take this loan. If a person has a FDR or MDS deposit in UBL he
can get the loan. For MDS owner needs to pay 15% loan interest. For
FDR owner needs to pay loan interest up to 2% than his FDR interest
rate. Overdraft loan can be given to government employee. In that case

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they need to show land security and the payable interest rate is 16%.
25% advance loan can be given by the bank on work order value.

Agricultural Loan:

At present the bank is disbursing Agriculture Loan to the farmers

directly through its all branches with simple terms and conditions. The
persons interested in agriculture works , including men and women,
landless, marginal farmers and shared croppers are eligible for receiving
Agriculture Loan from the bank .The Agriculture credit sectors of banks
are crops, irrigation, equipments, agriculture machineries ,livestock,
fisheries (including Shrimp) and poverty alleviation etc. This loan is
basically given by UBL because of poverty reduction. The limit of this
loan is 1 lac without showing any kind of property. But by showing
property the loan is unlimited.

Women Entrepreneurship Loan:

Woman can take this loan by starting a business. The limit of these
loans is up to 15,00,000 and the interest rate is 10%.A women can get
this loan up to 5,00,000 without showing any kind of property.

Distinguish Between Conventional Banking & Islamic

Banking

Conventional Banking:

Page | 26
A commercial bank is a type of retail bank that provides services,
such as accepting deposits, giving business loans and basic
investment products.

Islamic Banking:

A banking system that is based on the principles of Islamic Law

and guided by Islamic economics. Two basic principles behind
Islamic banking are the sharing of profit and loss, significantly, the
prohibition of the collection and payment of interest. Collecting
interest is not permitted under Islamic law.

Difference between Conventional & Islamic Bank:

Conventional Banks Islamic Banks

1. The functions and operating 1. The functions and operating

modes of conventional banks are modes of Islamic banks are
based on fully manmade based on the principles of
principles. Islamic.

2. The investor is assured of a 2. In contrast, it promotes risk

predetermined rate of interest. sharing between provider of
capital(investor) and the user of
funds(entrepreneur).

3. It aims at maximizing profit 3. It also aims at maximizing

without any restriction. profit but subject to
Islamic restrictions.

Page | 27
4. It does not deal with Zakat. 4. In the modern Islamic
banking system, it has become
one of the service-oriented
functions of the Islamic banks to
be a Zakat Collection Centre and
they also payout their Zakat.

5. Lending money and getting it 5. Participation in partnership

back with compounding interest business is the fundamental
is the fundamental function of function of the Islamic banks. So
the conventional banks. we have to understand our
customer's business very well.

6. It can charge additional 6. The Islamic banks have no

money (penalty and provision to charge any extra
compounded interest) in case of money from the defaulters. Only
defaulters. small amount of compensation
and these proceeds is given to
charity. Rebates are given for
early settlement at the Bank's
discretion.

7. Very often it results in the 7. It gives due importance to the

bank's own interest becoming public interest. Its ultimate aim
prominent. It makes no effort to is to ensure growth with equity.
ensure growth with equity.

8. For interest-based commercial 8. For the Islamic banks, it must

banks, borrowing from the be based on a Bank’s approved
money market is relatively underlying transaction.
easier.

9. Since income from the 9. Since it shares profit and loss,

advances is fixed, it gives little the Islamic banks pay greater

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importance to developing attention to developing project
expertise in project appraisal appraisal and evaluations.
and evaluations.

10. The conventional banks give 10. The Islamic banks, on the
greater emphasis on credit- other hand, give greater
worthiness of the clients. emphasis on the viability of the
projects.

11. The status of a conventional 11. The status of Islamic bank in

bank, in relation to its clients, is relation to its clients is that of
that of creditor and debtors. partners, investors and trader,
buyer and seller.

12. A conventional bank has to 12. Islamic bank can only

guarantee all its deposits. guarantee deposits for deposit
account, which is based on the
principle of al-wadiah,thus the
depositors are guaranteed
repayment of their funds,
however if the account is based
on the mudarabah concept,
client have to share in a loss
position.

The goals of Islamic banking are quite different from the goals of
Conventional banking. The core difference between the goals of
these two financial systems is that the former works for the benefit
of overall society and for equitable allocation of resources through
credit distribution while the latter works for the financial uplift of
the rich and their owners. Islamic bank works for everyone,

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needing money to start or expand his business or produce value-
addition whereas Conventional bank works for a specific class that
is rich. The underlying objective of Islamic bank is to earn profit
through horizontal distribution of financial resources while the
objective of Conventional banks is to maximize its profit by
concentrating the resources and charging high rates of interest.

Necessary papers & documents needed to open an Account in

Uttara Bank:

There are various kinds of Bank Accounts which people are looking
for. These account’s opening go through some procedure. Required
information for opening a bank account varies from bank to bank.
So in Uttara bank has some Procedure. They are:

For an Individual Customer:

a) Copy of the Passport, if available or Employer’s Certificate or

Commissioner’s/Chairman’s Certificate or Letter of Introduction by
a person acceptable to the Bank.

b) TIN Certificate, if applicable.

c) Two recent passport size photographs duly attested by the

Introducer.

For Sole Proprietorship:

a) Copy of Trade License.

b) Two recent passport size photographs of the

Proprietor/Signatory duly attested by the Introducer.

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c) Copy of the Passport of the Proprietor/Signatory, if available or
Commissioner’s /Chairman’s Certificate or Letter of Introduction
by a person acceptable to the Bank.

d) TIN Certificate.

For Partnership:

a) Copy of the partnership Deed of the Firm.

b) List of Partners with their address and phone number.

c) Copy of Trade License.

d) Extract of Resolution of the Partners of the Firm for opening the

account and authorization for its operation duly certified by the
Managing Partner of the Firm.

e) For Registered Partnership, Certificate of Registration of the

Firm along with duly certified copy of the Partnership Deed.

f) Two recent passport size photographs of each Partner/Signatory

duly attested by the Introducer.

g) Copy of the Passport of each Partner/Signatory, if available or

Commissioner’s/Chairman’s Certificate or Letter of Introduction by
a person acceptable to the Bank.

h) TIN Certificate

Private & Public Limited Company:

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a) Certified true copy of the Memorandum and Article of
Association of the Company.

b) Certified true copy of Certificate of Incorporation of the

Company.

c) Certified true copy of Certificate of Commencement of Business

of the Company, in case of Public Limited Company.

d) Latest list of Directors with address and phone number along

with Form XII.

e) Extracts of the duly adopted Resolution of the Board of Directors

of the Company for opening the Account and authorization for its
operation duly certified by the Chairman/Managing Director of the
Company.

f) Copy of Trade License.

g) Two recent passport size photographs of each Signatory duly

attested by the Introducer.

h) Copy of the passport of each Signatory, if available or

Commissioner’s/Chairman’s Certificate of Letter of Introduction by
a person acceptable to the bank.

i) TIN Certificate.

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Association/Club/Trust/Society/Charity
Organization/Educational Institution/Mosque/Madrasha:

a) Certified true copy of Constitution and By-Laws/Memorandum and

Article of Association/Trust Dead.

b) Certified true copy of the Certificate or Registration/Permission from

the concerned Government Department(s).

c) List of Members of the Governing Body/Executive Committee with

their address and phone number.

d) Extracts of the duly adopted Resolution of the Board/Executive

Committee/Governing Body for opening the Account and authorization
for its operation duly certified by the Chairman/Secretary/President.

e) Two recent passport size photographs of each Signatory duly attested

by the Introducer.

f) Copy of the Passport of each Signatory, if available or

Commissioner’s/Chairman’s Certificate or Letter of Introduction by a
person acceptable to the Bank.

COMPLIANCE:

a) Properly introduced.

b) All requisite documents as stated in the Documents Check List have

been obtained.

c) All documents have been checked and found in order and

supportive.

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d) Signing Authority of the Signatory/Signatories has been obtained
and authenticated.

Conclusion:

UTTARA Bank is one of the newest banks in Bangladesh. For that

point of view, this bank is not highly experienced about the
banking industry in this country. The more aggressive the bank
will become the more intense the competition will be. In coming
days they are to face various key challenges such as to satisfy the

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existing customers, to continue increasing penetration in the target
market, to face the more aggressively net bank, to turn satisfied
customer into fully satisfied customer.

From the discussion it can be concluded that Uttara Bank Limited

playing an important role in the economic development of the
country and it has a prospect future to have a very good position in
the Banking sector. To do this it should increase promotional
activities to reach to the people easily as well as Uttara Bank
Limited focus on major banking activities that may increase the
bank ranking and financial performance position comparing with
other banks. Such information assists the management of this bank
in creating appropriate financial strategies for attaining the
required planned financial performance.

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