1.

Accepting deposits

The most important primary function is accepting deposits. Without

accepting deposits a bank can not execute any other functions.

i. Savings Deposit
 Savings deposit is a convenient and flexible way of depositing your
savings, as it is easy to save and use the money. A savings deposit is a
safe way to save money for unexpected expenses, as you can always
add money to the deposit and it can be easily withdrawn.
 The number of times you can pay money into and withdraw it from the
deposit is not limited.
 Automatic transfer from current account.
ii. Fixed Deposit
 A fixed deposit (FD) is a financial instrument provided by banks
which provides investors a higher rate of interest than a regular
savings account until the given maturity date.
 The interest earn on your fixed deposit amount, will be depended
on your tenure. If you select 3 month tenure then interest will
periodically enter in your fixed deposit account after 3 months
iii. Current deposit
 In deposit terminology, the term Current Deposit refers to a deposit to
a bank account or financial institution without a specified maturity
date. Funds are typically made immediately available to the customer
for withdrawal by writing a check. Such Current Deposit accounts are
generally used for businesses that have a need for issuing checks to
pay employee salaries and bonuses, as well as to provide cash for
inventories and other such business expenses.

2. Granting Loans and advances

In time of our financial crisis bank provides us loans and other financial
help but for that they receive something for their own security. For
example if you want to take a loan from barnk they will investigate that
whether you are enable to pay the money back on time. For that case
they will give you loan against your property or land.
i. Cash credit: Cash Credit is a type of facility provided by the
bank or financial institution in which, a company can withdraw an
 amount more than what he holds to his credit against the
security of stock.
ii. Bank overdraft: Bank Overdraft is another facility, in which the
bank permits the customer to debit his current account below
zero but only up to a specified limit.
iii. Loans: Loan is the lending of money that bank provides to an
individual or an organization. A loan is a debt provided by bank
to another entity at an interest rate and evidenced by a
promissory note which specifies, among other things, the
principal amount of money borrowed, the interest rate the lender
is charging, and date of repayment.
iv. Discounting bills: If the drawer of the bill does not want to wait
till the due date of the bill and is in need of money, he may sell
his bill to a bank at a certain rate of discount. The bill will be
endorsed by the drawer with a signed and dated order to pay the
bank. The bank will become the holder and the owner of the bill.
After getting the bill, the bank will pay cash to the drawer equal
to the face value less interest or discount at an agreed rate for
the number of days it has to run.

3. Agency functions
Banks also perform certain agency functions for their customers. For
these services, banks charge some commission from their client.
 Funds transfer : Funds transfer Banks provide the facility of
economical and easy remittance of funds from place-to-place with the
help of instruments like demand drafts, mail transfers, etc.
 Cheque collection and periodic payment: Banks collect cheques,
bills,' interest, dividends, subscriptions, rents and other periodical
receipts on behalf of their customers and also make payment of
insurance, taxes on standing instructions from clients

4. Utility functions
 Issue of drafts letter of credits etc.: They also issue letters
of credit to their customers to certify their creditworthiness.
 Travellers ‘Cheque: Banks issue traveller’s cheques to their
customers to avoid risk of taking cash during their journey.
 Locker facility: Banks provide facility of safety vaults or lockers
to keep valuable articles of customers in safe custody.
  Dealing foreign exchange: Some banks are authorized by the
central bank to deal in foreign exchange. They buy and sell
foreign exchange on behalf of their customers and help in
promoting international trade.
 Underwriting of securities: Banks also undertake the task of
underwriting securities. As public has full faith in the
creditworthiness of banks, public do not hesitate in buying the
securities underwritten by banks.
 Letter of reference: They give information about the economic
position of their customers to traders and provide the similar
information about other traders to their customers.

Structures of Bank

A. Functional
1. Central Bank
Bangladesh Bank is the first central bank in the world to
introduce a dedicated hotline (16236) for the general
populace to complain any banking related problem.
Moreover, the organisation is the first central bank in the
world to issue a "Green Banking Policy". Bangladesh Bank
came into existence retroactively from 16 December 1971.
2. Commercial Bank
A commercial bank is a financial institution which performs
the functions of accepting deposits from the general public
and giving, loans for investment with the aim of earning
profit. They charge high rate of interest from the borrowers
but pay much less rate of Interest to their depositors with
the result that the difference between the two rates of
interest becomes the main source of profit of the banks.
Example- UCBL, NRB Commercial Bank Limited
3. Industrial deposit
This bank has limited scope of services. Sells industrial
shares and take customer deposits. They also provide loan
for customers and small business. Example- Bangladesh
Development Bank Limited (BDBL), Bangladesh Small
Industries and Commerce Bank
4. Agricultural Bank
 A bank that lends money to farmers, often over a long
period of time and at low rates of interest. Example-
Bangladesh Krishi Bank, South Bangla Agricultural and
Commerce Bank
5. Specialized Bank
Specialized Banks are banks which concentrate mainly on
financing specialized economic and social activities.
Specialized activities may be small and cottage industries
financing. Financing the rural asset less and landless
people etc. Example- Grameen Bank (GB), Basic Bank
6. Islami Bank
Islamic banking, also known as non-interest banking, is a
banking system that is based on the principles of Islamic,
or Shari'ah, law and guided by Islamic economics. Two
fundamental principles of Islamic banking are the sharing
of profit and loss and the prohibition of the collection and
payment of interest by lenders and investors. Islamic law
prohibits collecting interest or "riba." Example- Islami Bank
Bangladesh Ltd, Al-Arafah Islami Bank Limited
7. Cooperative bank
A bank that holds deposits, makes loans and provides other
financial services to cooperatives and member-owned
organizations. Cooperative Banking a concept arising out of
cooperative efforts for group welfare provides for the
collective savings of small amounts of money by a group of
people belonging to the same profession or class and
utilisation of that capital to try to enhance their income.
Cooperative banking essentially tries to collect the savings
of the cooperative societies and attempts to invest them
among the members. Example- Bangladesh Samabaya
Bank Ltd, Dhaka Mercantile Co operative Bank Ltd

(B) Ownership
1. Nationalized Bank
Nationalized banks are government controlled banks according to the
rules and regulations of BB. Example-Sonali Bank, Rupali Bank Saneli,
janta, Agnani, Rupali,
2. Private Bank
Private banks are the banks owned by either the individual or a general
partners. A private bank is a type of financial organization that offers
specialized financial advice and wealth management services to
protect, grow and manage the financial wealth of the wealthy or high
net-worth clients of the organization. Example SCB, HSBC
3. Joint Venture Bank
When two banks come to an agreement to share their plan of actions,
their policies and also equal distribution of shares. Example IFIO DBBL

(C) Origin

1. Local Bank.
The bank which is owned by the country it resides. It can be
government owned or private owned. Example- Dhaka Bank Limited,
AB Bank Limited
1. Foreign Bank
Bank from other countries which have branches in a country. Example-
SCB, Habib Bank Limited