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

Page | 2

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.

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Necessary papers and document

needed to open an account in case of
company or personal.

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, shortterm, 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

UTTARA BANK
Uttara Bank LTD was established in 1965under the name of
Eastern Banking Corporation Limited with the specific
objective of accelerating trade and investment in the
economically depressed eastern wing of the than Pakistan.
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After liberation of Bangladesh the Bank underwent a major

change namely, it was nationalized in March, 1972 and given
the name Uttara Bank. The Bank again in 1983 was
denationalized and made a commercial bank in the private
sector under the name Uttara Bank Limited.
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
countrys 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.
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.
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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

The Role of UTTARA BANK:

UTTARA Bank engages in the following activities:
1. Processing payments via telegraphic transfer, internet
banking, or other
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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:
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
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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:
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
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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.
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6. Balanced development of different regions:

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:

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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
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
Bank

types of deposit product offered by Uttara

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
customers 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?

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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

Deposit account is one of the important sources of banks
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.
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 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:
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 productsPage | 13

 Personal loan.
Vacation loan.
Car loan.
Any purpose loan.
Small business loan.
Different deposit scheme;
Monthly saving scheme (MSS)
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
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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 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 welldiversified 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
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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.
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.

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 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 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 arePage | 17

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.

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
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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 & 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
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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:
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
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 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.
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 selfemployed 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.
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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.
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
loanPage | 22

 Application in prescribed form duly filled in all the

columns and signed by the applicant.
Personal Net Worth statement of the client.
Lawyers opinion on the documents of the properties.

Benefit of the scheme:

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.

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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.

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 buyers bank.
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 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 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)
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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) 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 Bankers lien
on the goods and practically amounts to hypothecation of the
proceeds of sale in discharge of the lien.
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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 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.

Page | 27

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:
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:

Page | 28

Conventional Banks
Islamic Banks
1. The functions and
1. The functions and
operating modes of
operating modes of Islamic
conventional banks are
banks are based on the
based on fully manmade
principles of Islamic.
principles.
2. The investor is assured of 2. In contrast, it promotes
a predetermined rate of
risk sharing between
interest.
provider of capital(investor)
and the user of
funds(entrepreneur).
3. It aims at maximizing
3. It also aims at
profit without any
maximizing profit but
restriction.
subject to
Islamic restrictions.
4. It does not deal with
4. In the modern Islamic
Zakat.
banking system, it has
become one of the serviceoriented functions of the
Islamic banks to be a Zakat
Collection Centre and they
also payout their Zakat.
5. Lending money and
5. Participation in
getting it back with
partnership business is the
compounding interest is the fundamental function of the
fundamental function of the Islamic banks. So we have
conventional banks.
to understand our
customer's business very
well.
6. It can charge additional
6. The Islamic banks have
Page | 29

money (penalty and

compounded interest) in
case of defaulters.

no provision to charge any

extra money from the
defaulters. Only 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
bank's own interest
to the public interest. Its
becoming prominent. It
ultimate aim is to ensure
makes no effort to ensure
growth with equity.
growth with equity.
8. For interest-based
8. For the Islamic banks, it
commercial banks,
must be based on a Banks
borrowing from the money
approved underlying
market is relatively easier.
transaction.
9. Since income from the
9. Since it shares profit and
advances is fixed, it gives
loss, the Islamic banks pay
little importance to
greater attention to
developing expertise in
developing project appraisal
project appraisal and
and evaluations.
evaluations.
10. The conventional banks 10. The Islamic banks, on
give greater emphasis on
the other hand, give greater
credit-worthiness of the
emphasis on the viability of
clients.
the projects.
11. The status of a
11. The status of Islamic
conventional bank, in
bank in relation to its clients
relation to its clients, is that is that of partners,
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of creditor and debtors.

investors and trader, buyer

and seller.
12. A conventional bank has 12. Islamic bank can only
to guarantee all its
guarantee deposits for
deposits.
deposit account, which is
based on the principle of alwadiah,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, 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.
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Necessary papers & documents needed to open an

Account in Uttara Bank:
There are various kinds of Bank Accounts which people
are looking for. These accounts 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 Employers
Certificate or Commissioners/Chairmans 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.
c) Copy of the Passport of the Proprietor/Signatory, if
available or Commissioners /Chairmans Certificate or
Letter of Introduction by a person acceptable to the Bank.
d) TIN Certificate.

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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 Commissioners/Chairmans Certificate or
Letter of Introduction by a person acceptable to the Bank.
h) TIN Certificate

Private & Public Limited Company:

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.

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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
Commissioners/Chairmans Certificate of Letter of
Introduction by a person acceptable to the bank.
i) TIN Certificate.

Association/Club/Trust/Society/Charity
Organization/Educational
Institution/Mosque/Madrasha:
a) Certified true copy of Constitution and ByLaws/Memorandum and Article of Association/Trust Dead.
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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
Commissioners/Chairmans 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.
d) Signing Authority of the Signatory/Signatories has been
obtained and authenticated.

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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 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
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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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