Banking Performance

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June 5, 2008
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Principles of Banking

Functions Performed By Commercial Banks in Bangladesh

A brief Study on the overall banking function of the commercial Banks in the Domestic Arena of Bangladesh

By: Jewel Chakraborty
Section – F.
ID No # 072-11-1953
BBA 17th Batch
D.I.U

5th June, 2008

Md. Shahidul Islam Zahid
Course Instructor
Principles of Banking
Daffodil International University

Subject: Submission of Assignment

Dear Sir,

Please find attached herewith the assignment on “Functions performed by Commercial Banks in Bangladesh” Which I was asked to prepare. The experiences I obtained through making this assignment will help me a lot in future. As it is the first Report on Banking, we hope that your generous evaluation will allow us to overcome the lacings and help to next progress.

We are looking forward for your permission to submit the same.

Thanking you with regards.

Sincerely yours,

__________
Jewel Chakraborty
Section – F.
ID No # 072-11-1953
BBA 17th Batch
D.I.U
Financial Institutions perform the essential function of channeling funds from those with surplus funds to those with shortage of funds.

Commercial Banks have a great contribution to the following arena-

• Contribution to the foreign exchange
• Contribution to the home trade
• Contribution to the agricultural development
• Contribution to the industrial development
• Contribution to other economic areas

Commercial banks perform two kinds of functions:

1. Micro Functions

• Collection of deposit
• Credit extensions
• Receiving interest
• Creation of medium of exchange
• Issuing of cheque
• Circulation of money

2. Macro Functions

• Capital formation
• Role in economic development
• Transmission of money
• Industrial development
• Agricultural development
• Help in export – import business
• Consultancy
• Employment creation
• Act as treasurer of government

Types of Account

Through account bank provides services to customers to do the transactions. Bank account is essential to perform the two major functions of bank, which are, deposit banking and lending. Different types of account are mentioned below from different perspective –

Classification as per Nature of Accounts:

• Current Deposit Account
• Saving Deposit Account
• Fixed Deposit Account
• Monthly Deposit
• Short Term Deposit Account
• Foreign Currency Deposit
• Non Resident Taka Account
• Non Resident Foreign Currency Account
• Resident Foreign Currency Deposit Account

Trading Concern:

• Proprietorship
• Partnership
• Public Limited
• Private Limited
• Accounts of Liquidators

Non- Trading Concern:

• Club Society
• Institutions

Official Accounts:

• Accounts of Government
• Accounts of Corporation
• Accounts of Autonomous Bodies

Foreign Currency Account (FCA)

• Non resident Bangladeshi, foreigner residing in Bangladesh, foreign institution, duty free shop, Joint Venture Company and those who earn foreign currency can open FC account. • But those Bangladeshi who work in any Bangladeshi mission can not open this account. • No interest paid on FC account but it is not current account. • No withdrawal restriction.

Non Resident Foreign Currency Account (NFCDA)

• Like term deposit.
• Those Bangladeshi who work in any Bangladeshi mission can also open this account. • Interest is made based on LIBOR.

Resident Foreign Currency Account (RFCDA)

• Like term deposit.
• After returning home country one ought to deposit the dollar in this account with in 30 days.

Non-Resident Taka Account (NRTA)

• Like savings...
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