General Banking & Accounts Department - Mutual Trust Bank Ltd

Reason for the Return Cheques:

        Memorandum.

                 MUTUAL TRUST Bank LIMITED

                         __________ Branch                            Date:_____________

                 Cheque(s) No:_________________    for Taka ________________

                 Is/are returned un-paid for reason(s) no_____________________

        Not arrange for

        Effects not cleared, may be present again.

        Exceeds arrangement.

        Full neither covers nor received.

        Payments stopped by drawer.

        ________ Payee’s endorsement irregular requires bank’s confirmation.

        ________ Payee’s endorsement irregular, illegible / required.

        Drawer signature differs / required.

        Alteration in Date / figures / words required drawer’s full signature.

        Cheque is post dated / out of date / mutilated.

        Amount in word and figure differs.

        Crossed cheque must be presented through a Bank.

        Clearing stamps required.

        Addition to Bank discharge should b authenticated.

        Cheque crossed “Account’s Payees Only”.

        Collecting Bank discharge irregular.

 
SCOPES:

        MTBL has a good General Banking & Account Department.

        It is one of the leading banks in Bangladesh.

        Information is available.

        Book’s notes and journals are available.

 
Extract:

Extract is a statement of all originating and responding transactions among inter–branches through inter branches debit and credit advice. At the end of the day, all the debit and credit advices of different department come to accounts department. It makes extract in light of all advices. 

Actually extract shows the balance of MTBL Dilkusha Branch general A/C. The objective of preparing it is to know how many transactions have been originated and responded by the respective branch per day. Branch has to send it its Head Office keeping one photocopy.

Debit Voucher:

For making cash payment like entertainment, conveyance, Account Department writes a debit voucher. Amount is withdrawn through cash section by presenting debit voucher.

Statement of affairs:

Accounts section prepares the statement of affairs for finding the profit /loss as well as amount of assets and liabilities of concerned branch per day. Theoretically; it is called financial statement and has two parts:

        Income and Expenditure A/C.

        Statement of assets & liabilities.

AMORTIZATION AND DEPRECIATION:

Amortization is the allocation of the cost of an intangible asset to expense. For example: prepaid expenditure, prepaid insurance and goodwill etc. Amortization schedule is determined by the decision of management.

Depreciation is a process of cost allocation of assets not a process assets valuation.

        Fixed Assets have been show at written down value.

        Depreciation is charged at the following rates on reducing balance method on all fixed assets other than motor vehicles, which are deprecated on straight-line basis:

        Assets purchased during the year are depreciated from the date of acquisition.

 
FUNCTIONS PROVIDED BY ACCOUNTS DEPARTMENT:

Like all other Banks, in MTBL Accounts Department is regarded as the nerve Center of the bank. In banking business, transactions are done every day and these transactions are to be recorded properly and systematically as the banks deal with the depositors’ money. Any deviation in proper recording may hamper public confidence and the bank has to suffer a lot otherwise. Improper recording of transactions will lead to the mismatch in the debit side and in the credit side. To avoid these mishaps, the bank provides a separate department whose function is to check the mistakes in passing vouchers or wrong entries or fraud or forgery. This department is called as Accounts Department.

Besides the above, the Bank has to prepare some internal statements as well as some statutory statements which are to be submitted to the central bank. Accounts Department prepares these statements also. The department has to submit some statements to the Head Office, which is also consolidated by the Head Office late on.

The tasks of the Accounts Department of MTBL Dilkusha Branch may be seen in two different angles:

        Daily Tasks.

        Periodical Tasks.

 
DAILY TASKS:

The routine daily tasks of the Accounts Departments are as follows--------

o       Recording the daily transactions in the cashbook.

o       Recording the daily transactions in general and subsidiary ledgers.

o       Preparing the daily position of the branch comprising of deposit and cash.

o       Preparing the daily Statement of Affairs showing all the assets and liability of the branch as per General Ledger and Subsidiary Ledger separately.

o       Making payment of all the expenses of the Branch.

o       Recording inter branch fund transfer and providing accounting treatment in this regard.

o       Checking whether all the vouchers are correctly passed to ensure the conformity with the ‘Activity Report’; if otherwise making it correct by calling the respective official to rectify the voucher.

o        Recording of the vouchers in the Voucher Register.

o       Packing of the correct vouchers according to the debit voucher and the credit voucher.

 
PERIODICAL TASKS:

The routine periodical tasks performed by the department are as follows:

o       Preparing the monthly salary statements for the employees.

o       Publishing the basic data of the branch.

o       Preparing the weekly position for the branch which is sent to the Head Office to maintain Cash Reserve Requirement (C.R.R).

o       Preparing the monthly position for the branch which is sent to the Head Office to maintain Statutory Liquidity Requirement (C.R.R).

o       Preparing the weekly position for the branch comprising of the break up of sector-wise deposit, credit etc.

o       Preparing the weekly position for the branch comprising of the denomination wise statement of cash in tills.

o        Preparing the quarterly statements (SBS-2 and SBS-3) where SBS-2 shows “classification of deposits excluding inter bank deposits, deposits under wage earner’s scheme and withdrawals from deposits accounts” and SBS-3 shows “classification of advances (excluding inter bank) and classification of bills purchased and discounted” during the quarter.

o       Preparing the budget for the branch by fixing the target regarding profit and deposit so as to take necessary steps to generate and mobilize deposit.

o       Preparing an ‘Extract’ which is a summary of all the transactions of the Head Office account with the branch to reconcile all the transaction held among the accounts of all the branches.

 
Observations & Recommendations:

After this part (General Banking), I think this is the most vital part for every bank in Bangladesh or any other country. Mutual Trust Bank Limited is a private sector bank. This is most probably consumer base bank. Mr. Kazi Immamul Haque as Sr. Executive Officer, Mr. Md. Masudur Rahman as Sr. Officer and Mr. Md. Tarek as Officer doing their duty very care fully and helps me a lot together practical knowledge but in this sector (General Banking & Accounts Department). I found some things is wrong, these wrong things are in the A/C Opening side.

        Theoretically any person can purchase pay order, demand draft and telex transfer by depositing money and commission. But the person who wants to purchase these should have account in the bank branch. These will discourage customers to transact with bank.

        In opening A/C some additional documents are needed as compared with theoretical record. Like trade license, member of Dhaka chamber of commerce and industry (DCCL) in Dhaka city. Again some documents are not essential practically as referred in theory. For example, the photo of the person who will open A/C, and sometime introducer.

        There is a rule to deposit at least an amount of money in case of opening an account. But it is not strictly followed. Sometimes more money is asked from a new customer who discourages him to open an account in the bank. I think the amount should be fixed at a level that is not altered from customer to customer.

        In case of crossing cheque I did not observe any crossing with “Not negotiable” as much as I stayed in bank orientation. Though theory have been given emphasis on the effect of “A/C pay only” and “not negotiable”. The role of “Not negotiable” is not so much. There is no provision in law regarding “A/C payee crossing”. But it has been developed in practice. If the words, “A/C payee” are added to a crossing, it becomes an A/C pay crossing.

        The degree of relationship between banker and customer determines how much theory is deviated from practical work.

        When a client try to open an A/C he must have to need an introducer, sometime it may create a problems for the clients.

        Under this department, practice strictly supports theories. There is not too much discrepancy between them. All the functions of Account Department provided by MTBL Dilkusha Branch are based on accounting theories and procedures.

        In case of amortization there is no pre-determined rate on which it will be charged. It fully depends on the decisions of the executives of Accounts Department or the instruction of H/O.

        In case of depreciation only the straight-line is to be followed, but there are other methods of charging depreciation, such as-double decline, sum year-digit methods etc are used as method of depreciation. These are not followed by MTBL except the straight line method.

        This department plays a vital role in the management information system. Management collects different types of information from this department.