Icc Sep2016
Icc Sep2016
ON
INTERNAL CONTROL &
COMPLIANCE IN BANKS
(Updated upto September, 2016)
BANGLADESH BANK
Committee for Updating the Guidelines
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List of Acronyms
BB- Bangladesh Bank
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Contents:
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Chapter-1
Internal Control & Compliance
1.1 Overview
Banking is a diversified and multifarious financial activity which involves different risks. So the
issues of an effective internal control system, good governance, transparency of all financial
activities, and accountability towards its stakeholders and regulators have become momentous to
ensure smooth performance of the banking industry. An effective internal control and
compliance system has become essential in order to underpin effective risk management
practices and to ensure smooth performance of the banking industry. In general, internal control
is identified with internal audit; but the scope of internal control is not limited to audit work.
Internal control by its own merit identifies the risks associated with the process and adopts
measures to mitigate or eliminate these risks. Internal Audit, on the other hand, reinforces the
control system through regular review of the effectiveness of the controls.
The responsibility of implementing internal controls starts with the business lines, which are the
“first lines of defense” against breaches that could cause the bank not to fulfill its objectives, not
to report properly, or not to comply with laws and regulations. Beyond that, in any bank, the
three important “control functions” are risk management, compliance, and internal audit. This
triumvirate of key functions is underpinned by, and in turn implements and reinforces, the
system of internal controls. The first two of these control functions constitute the “second lines
of defense” against mishaps. The final, or “third line of defense” is the internal audit function.
An effective internal control system requires that there are reliable information systems in place
that cover all significant activities of the bank. A system of strong internal controls can help
ensure that the goals and objectives of a banking organization will be met, that the bank will
achieve long-term profitability targets, and maintain reliable financial and managerial reporting.
Internal controls form particularly a crucial backdrop of the risk management program. An
essential part of the internal control framework is periodic testing to determine how well the
framework is operating, so that any required remedial actions can be taken. The frequency of
testing should be risk-based and should involve as appropriate sample transaction testing, with
the sample size being determined by volume and the degree of risk of the activity.
1.2 Definition
Internal control is a process, effected by a bank’s board of directors, management, and other
personnel, designed to provide reasonable assurance regarding the achievement of objectives
relating to operations, reporting and compliance.
Internal control is a process, rather than a structure. It is not a separate activity disconnected from
the rest of business activities, rather is an integral part of those activities. It is a dynamic,
continuing series of activities planned, implemented and monitored by the board of directors and
management at all levels within an organization. Only part, not all, of internal control consists of
policies and procedures. Policies are board or management statements about what should be
done, and may even be unwritten and implied by management’s actions. Procedures are the
actions that implement a policy, or how it should be done. Internal control provides only
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reasonable assurance, not absolute assurance, with regard to achievement of the organization’s
objectives. External events can interfere with achievement of objectives, no matter how good is
the system of internal control.
The control environment reflects the overall attitude, awareness and actions of the board and
management concerning the importance of internal control. It is the framework under which
internal controls are developed, implemented and monitored. It consists of the mechanisms and
arrangements that ensure internal and external risks to which the bank company is exposed to.
Control environment factors include integrity, ethical values and competence of the employee',
management’s philosophy and operating style, the way management assigns authority and
responsibility and how it organizes and develops its human resources.
The appropriate and effective internal controls are developed and implemented to soundly and
prudently manage these risks; reliable and comprehensive systems are to be put in place to
appropriately monitor the effectiveness of these controls. The factors which together comprise
the control environment are:
● A board of directors that is actively concerned with sound corporate governance and that
understands and diligently discharges its responsibilities by ensuring that the company is
appropriately and effectively managed and controlled;
● A management that actively manages and operates the company in a sound and prudent
manner;
● Organizational and procedural controls supported by an effective management information
system to soundly and prudently manage the company's exposure to risk; and
● An independent audit mechanism to monitor the effectiveness of the organizational and
procedural controls.
The primary objectives of internal control system in a bank are to help the bank perform better
through the use of its resources, to communicate better internally and with external stakeholders,
and to comply with applicable laws and regulations. The main objectives of internal control are
as follows:
The operations objectives of internal control are critical to the long-term survival of the bank and
distinguish it from its competitors. For example, the bank’s mission and vision can translate into
operations objectives such as financial performance (the size, profitability, liquidity, and capital
adequacy of the bank); productivity (minimizing operating expenses); customer and employee
satisfaction, achievement of social goals (corporate social responsibility, financial inclusion);
safeguarding of assets (preventing unauthorized acquisition, use, or disposition); and others.
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Operations objectives also include compliance with with a bank’s internal policies and
procedures.
The reporting objectives of internal control ensure that all the necessary information, but only
the necessary information, flow within the bank, into the bank, and out of the bank. Reporting
objectives can be subdivided into four categories:
The compliance objectives of internal control refer to ensure that the bank stays in compliance
with all applicable laws and regulations, not only those specifically pertaining to banks, but also
those laws and regulations (such as labor laws and environmental protection laws) applying to
corporations in general. Laws and regulations establish minimum standards of conduct expected
by BB as the regulatory authority. Some banks may elect to conform to stricter standards of
conduct (such as higher capital requirements) than those required by law or regulation.
(Compliance objectives do not include compliance with a bank’s internal policies and
procedures, as these are part of operational objectives.)
These three objectives – operations, reporting, and compliance – are supported by five
components of internal control. Underlying these five components is a set of 17 principles,
organized in the following manner:
Control Environment:
1. The bank demonstrates a commitment to integrity and ethical values.
2. The board of directors demonstrates independence from management and exercises
oversight of the development and performance of internal control.
3. Management establishes, with board oversight, structures, reporting lines, and
appropriate authorities and responsibilities the pursuit of objectives.
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4. The bank demonstrates a commitment to attract, develop, and retain competent
individuals in alignment with objectives.
5. The bank holds individuals accountable for their internal control responsibilities in
pursuit of objectives.
Risk Assessment:
6. The bank specifies objectives with sufficient clarity to enable the identification and
assessment of risks relating to objectives.
7. The bank identifies risks to the achievement of its objectives across the bank and
analyzes risks as a basis for determining how the risks should be managed.
8. The bank considers the potential for fraud in assessing risks to the achievement of
objectives.
9. The bank identifies and assesses changes that could significantly impact the system of
internal control.
Control Activities:
10. The bank selects and develops control activities that contribute to the mitigation of risks
to the achievement of objectives to acceptable levels.
11. The bank selects and develops general control activities over technology to support the
achievement of objectives.
12. The bank deploys control activities through policies that establish what is expected and
procedures that put policies into action.
13. The bank obtains or generates and uses relevant, quality information to support the
functioning of internal control.
14. The bank internally communicates information, including objectives and responsibilities
for internal control, necessary to support the functioning of internal control.
15. The bank communicates with external parties regarding matters affecting the functioning
of internal control.
Monitoring Activities:
16. The bank selects, develops, and performs ongoing and/or separate evaluations to
ascertain whether the components of internal control are present and functioning.
17. The bank evaluates and communicates internal control deficiencies in a timely manner to
those parties responsible for taking corrective action, including senior management and
the Board of Directors, as appropriate.
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Chapter-2
Policy Guidelines for Internal Control
2.1 Policies and Procedures – internal to the bank and externally mandated
In addition to any existing relevant legislation, the following statements of policies and
procedures relevant to internal control are to be meticulously implemented by the bank, and
adherence to which is reviewed by the Internal Audit and Compliance functions:
1 Credit Policy Manual
2 Operation Manual
3 Finance and Accounting Manual
4 Treasury Manual
5 HR Policy Manual
6 Internal Control Manual
7 IT Audit Manual
8 Payment System Manual
9 Anti Money Laundering Guidelines
10 Agent Banking Manual
11 Green Banking Manual
12 Guidelines for Foreign Exchange Transactions
13 Basel Core Principles for Effective Banking Supervision
14 International/Bangladesh Accounting Standard (IASB)/IAS/BAS
15 Guidelines of Auditing and Accounting Organization for Islamic Financial Institution
(AAOIFI)
16 Manual of Islamic Financial Services Board (IFSB)
17 BB Guidelines on Islamic Banking
18 Bank Company Act-1991(amended to 2013)
The responsibility of the Board of Directors in respect of implementing a modern, scientific and
acceptable Internal Control and Compliance Process in a Bank has been described in Banking
Companies Act, 1991 Rule 15 (Kha) and exclusively in section 15 (Ga). The responsibility of
BOD can be summarized as follows:
• The board shall be observant on the internal control system of the bank in order to
accomplish a satisfactory standard of its portfolio. The board will form an Audit
Committee with such directors who are not the members of Executive Committee of
BOD and a Risk Management Committee from its members.
• The board will also establish such an internal control system so that the whole internal
audit process can work independently from the management which will report to the
Audit Committee.
• The BOD shall review the reports submitted by its audit committee on quarterly basis
regarding compliance of recommendations made in internal and external audit reports
and as well as Bangladesh Bank inspection reports.
In addition to the above the following responsibilities will also be observed by the BOD:
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• They should set up an organizational structure of Internal Control and Compliance
Division in such a way that, it should have no conflict of interest with the regular
management of the bank and fulfill the requirements as directed in the Rule 15 (Ga) (1)
of BCA 1991 for establishing and maintaining effective internal control and risk
management having regard to the complexity of the activities of the bank, its size, scope
of operations and risk profile;
• The board of directors should, at least annually, conduct a review meeting about the
effectiveness of internal control process and report to the shareholders accordingly;
• The board of directors should hold meetings in suitable intervals with interested parties
such as senior management, internal auditors, external auditors and the audit committee
in the evaluation of the effectiveness of the internal control system.
• ensuring that internal audit reports are provided to the board (if asked for)
without management filtering and that the internal auditors have direct access to the
board’s audit committee as and when required.
• requiring timely and effective correction of audit issues by senior management.
2.3 Structure and Responsibilities of the Audit Committee of the Board.( BRPD Circular-11
dated 27/10/2013)
The board will approve the objectives, strategies and overall business plans of the bank and the
audit committee will assist the board in fulfilling its oversight responsibilities. The committee
will review the financial reporting process, the system of internal control and management of
financial risks, the audit process, and the bank's process for monitoring compliance with laws
and regulations and its own code of business conduct.
a) Organizational structure:
i. Members of the committee will be nominated by the board of directors from the directors;
ii. The audit committee will comprise of maximum 05 (five) members, with minimum 2 (two)
independent director;
iii. Audit committee will comprise with directors who are not executive committee members;
iv. Members may be appointed for a 03 (three) year term of office;
v. Company secretary of the bank will be the secretary of the audit committee.
i. Integrity, dedication, and opportunity to spare time in the functions of committee will
have to be considered while nominating a director to the committee ;
ii. Each member should be capable of making valuable and effective contributions in the
functioning of the committee;
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iii. To perform his or her role effectively each committee member should have adequate
understanding of the detailed responsibilities of the committee membership as well as the bank's
business, operations and its risks.
iv. Professionally Experienced persons in banking/financial institutions specially having
educational qualification in Finance, Banking, Management, Economics, Accounting will get
preference in forming the committee.
6. As the roles and responsibilities of the Board, Executive Committee, Credit Committee
and Management Committee are of high impact and high frequency, ICC needs to take special
care in order to identify lapses specially in (i) sanction and rescheduling of loans & advances,
interest waiver, write-off of loans, Director's loans, large loans, etc. (ii) presenting financial and
non-financial position of the bank, (iii) allowing perks, benefits, incentives etc (iv) procurement
and disposal of assets/services/materials,(v) managing risks and uncertainties in the bank. So
ICC should meticulously examine the minutes and memos of Board/Executive Committee/Credit
Committee/Management Committee meeting to assess the fact that memos were presented with
proper and adequate information and decisions in minutes were carried accordingly.
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3. To ensure active participation and contribution by the members, a detailed
memorandum should be distributed to committee members well in advance(at least three days)
before each meeting;
4. All decisions/observations of the committee should be noted in minutes.
2.4 Responsibilities of the Management
In setting out a strong control framework within the organization the role of Managing Director/
CEO is very important. The board of directors of the bank/organisation will define/form Senior
Management Team(SMT) that should include the MD/CEO and the Chief Financial Officer. Any
officer that perform a policy making function or is in charge of a principal business unit/function
may be member of SMT. However, any executive of ICC audit should not be member of SMT.
The bank/organization should report the composition of the ECM(and update thereto) to Banking
Regulation and Policy Department of Bangladesh Bank.
Responsibilities of the SMT should include monitoring the adequacy and effectiveness of the
Internal Control System based on the bank’s established policy and procedure.
The SMT will review on a yearly basis the overall effectiveness of the control system of the
organization and provide a certification on a yearly basis to the Board of Directors on the
effectiveness of Internal Control policy, practice and procedure.
The management will enrich audit teams with adequate skilled manpower and proper IT support
as per requisition of the ACB for purposeful and effective audit. The management will ensure
compliance of all laws and regulations that are circulated by various regulatory authorities such
as, Bangladesh Bank, Ministry of Finance, Bangladesh Securities and Exchange Commission,
etc.
During the audit period, if the present audit team finds any lapse or irregularity which was not
detected or identified by the previous auditor, then that will be reported to the Audit Committee.
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2.5 Management Information Systems (MIS)
● An effective internal control system requires that there is an efficient reporting system of
information that is relevant to decision making. The information should be reliable, timely
accessible and provided in a consistent format.
● Information would have to include external market information about events and conditions
that are relevant to decision making. Internal information should include financial, operational
and compliance data.
● There should be appropriate committees within the organization which would evaluate data
received through various information systems. This will ensure supply of correct and accurate
information to the management.
● Internal information must cover all significant activities of the bank. Electronic data must be
secured, monitored independently and supported by contingency arrangements.
● Most importantly the channels of communication must ensure that all staff fully understand
and adhere to policies and procedures effecting their duties and responsibilities and that other
relevant information are reaching the appropriate personnel.
• They should examine the records, transactions of the bank and evaluate its accounting policy,
disclosure policy and methods of financial estimation made by the bank; they will cooperate the
Board and the Management to have an independent overview on the overall control system of the
bank.
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Chapter-3
Control risk assessment
3.1 Assessing business and control risk.
Risk is the net negative impact of the exercise of vulnerability, considering both the probability
and the impact of occurrence. Effective risk assessment must identify and consider both internal
and external factors.
a. Control risk:
This risk occurs when a material misstatement would not be prevented, detected or corrected by
the accounting and internal systems such that there are some practices in the banking operations
which are not backed by the law or established procedures.
b. Detection risk:
Detection risk is the risk that an auditor’s substantive procedures will not detect, and a
misstatement exists in an account balance or class of transactions that could be material
individually or when aggregated with misstatement in other balances or classes.
c. Inherent risk:
Inherent risk is the susceptibility of an account balance or class of transactions arising out of
misstatement that could be material individually or when aggregated with misstatement in other
balances or classes, assuming that there were no related internal controls.
Audit risk = Risk of material misstatement + Detection risk
Risk of material misstatement = Inherent risk + Control risk
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3.3 Risk Recognition and Assessment
• An effective internal control system continually recognizes and assesses all of the material
risks that could adversely affect the achievement of the bank’s goals.
• Effective risk assessment must identify and consider both internal and external factors.
Internal factors include the complexity of the organization structure, the nature of the Bank’s
activities, the quality of personnel, organizational changes, and employee turnover. External
factors include fluctuating economic conditions, changes in the industry, socio-political realities
and technological advances.
• Risk assessment by Internal Audit differs from the business risk management process which
typically focuses more on the review of business strategies developed to maximize the
risk/reward trade-off within different areas of the bank. The risk assessment by Internal Audit
focuses on all risk areas especially on compliance with regulatory requirements, social, ethical
and environmental risks those affect the banking industry.
1 2 3
Impact
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Table-1
Risk Assessment Matrix
To arrive at the decision of what constitutes a high, medium or low risk, the following template
can be used:
Risk Score Probability (after taking into Impact (before taking into account
account of risk mitigation) of mitigation)
The above checklist is not specific to any individual bank, and the terms of reference may not be
generalized in some cases. This should be replaced by a comprehensible list based on business
and control parameters, which are quantifiable, and then should be commonly available for all
banks.
Risk Score Probability (after taking into account risk mitigation)
Impact (before taking into account mitigation)
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The risk assessment matrix must consist of business and control risk. However, the matrix by
itself will not serve the purpose. The business and control risk must have different
factors/parameters which must be quantifiable, and eventually risk assessment will give a picture
of the risk associated with the units/branches/functions upon which the annual audit plan will be
drawn up. Based on the risk assessment matrix, the audit plan will be as follows:
High Quarterly
Low Yearly
Risk Rating will be determined by business and control risk of a particular branch.
The branch audit rating has to be done on the basis of the scoring arrangement stipulated in
Annexure-B. The risk assessment by Internal Audit focuses more on compliance with regulatory
requirements; controls over implementation of management policies, procedures and decisions
related to the risks which were communicated and asked to enforce along with all other risks at
branch level.
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Chapter-4
ICCD Related Issues
4.0 Introduction
All departments, and all business lines, are responsible for developing, implementing, and
making sure that the controls are observed and not breached. Individual departments or business
lines will be vigilant and will participate fully in the internal control regime where ICC should
act as internal watchdog of the organisation. The main issue of ICC is to look after whether bank
machineries are acting as vanguards of its assets, reputation and Depositors' interests. ICC will
oversee whether bank is following regulatory guidelines, institutional policies and procedures set
by/and approved by the BoD covering related Laws of land and whether there is any deficiency
in internal policy and procedure.
a. Audit Division/Unit
b. Compliance Division /Unit
c. Monitoring Division /Unit
For convenient way of action and effective administration according to the nature of the bank,
Volume of work, No. of Branches, (Rural, Urban, AD, Corporate), Assets involvement,
Concentration of assets, Risk involvement etc. Audit Division and compliance division may be
further divided in to the following divisions/ units-
1. Audit Division-1: To carryout audit on All AD, Corp. Br. Circle, Zonal Office, Subsidiaries
& H/O(divisions/dept).
4. External Audit Compliance Division : To monitor compliance activities of branch and office
under internal audit.
5. Internal Audit Compliance Division: To monitor compliance activities of branch, Office and
sub-divisions under external audit (Bangladesh Bank Audit/Inspection, Commercial Audit,
External Audit /statutory audit and other regulatory authorities).
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Monitoring Division: (i) To verify the internal control system & Operational activities by
Implementing of DCFCL, QOR, LDCL( Loan Documentation Checklist) at Branch level (ii) To
ensure timely and effective audit including ICT Audit by Internal Control Team (iii) To Assist
Audit-1 in Risked Based Internal Audit by assessing department wise risk (Off sight Analysis)
with grading of all branches (iv) To prepare and Submit Self-Assessment of Anti-Fraud Internal
Controls report and Bank’s Health report to Bangladesh Bank.
Audit staff will be the combination of business, Professional and IT knowledge based personnel.
Number of audit staff will depend upon the number of branches to be audited, frequency of audit,
efficiency of the auditors (depending upon the past experience) etc. There will be need of extra
staff strength for concurrent audit.
The scope of work of the Department is to determine whether the Bank's network of risk
management, control and governance processes, as designed and represented by management, is
adequate and functioning in a manner to ensure:
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Obtain the necessary assistance of personnel in all departments of the bank where they
perform audits/inspection as well as other specialized services from within or outside the
bank.
Officers of the ICCD are not authorized to-
Initiate or approve accounting transactions other than those of the Internal Audit
Department.
Direct the activities of any Bank officer not employed in the Internal Audit Department
except to the extent such officers have been appropriately assigned to auditing/inspecting
teams or to otherwise assist the officers of the Department.
Audit their own works performed in their previous Departments/Offices.
• The internal audit function’s control risk assessment, audit plans, and audit programs are
appropriate for the bank’s activities.
• The internal audit activities have been adjusted for significant changes in the bank’s
environment, structure, activities, risk exposures, or systems.
• The internal audit activities are consistent with the long-range goals and strategic
direction of the bank and are responsive to its internal control needs.
• The Audit Committee of the Board promotes the Chief Audit Executive’s(CAF's)
impartiality and independence by having the CAE directly report audit findings to it.
• The CAE is placed in the management structure in such a way that the independence of
the function is not impaired.
• The bank has promptly responded to significant identified internal control weaknesses.
• The internal audit function is adequately managed to ensure that audit plans are met,
programs are carried out, and results of audits are promptly communicated to senior
management and members of the Audit Committee and full Board.
• Workpapers adequately document the internal audit work performed and support the
audit reports.
• The Audit Committee periodically assesses the performance of internal audit.
• The internal audit function provides high-quality advice and counsel to management and
the Board on current developments in the bank’s internal control policies and procedure,
and in the performance of the other control functions of the bank (Risk Management and
Compliance)
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As mentioned in the Charter, Internal Audit should be committed to meet the standards of best
professional practices.
Internal audit activities should be performed in diverse legal and cultural environments, within
organizations that vary in purpose, size, and structure; and by persons within or outside the
organization. These differences may have impact on the practice of internal auditing in each
environment. However, the compliance with standards for the professional practice of Internal
Auditing standards is essential.
1. Delineate basic principles that represent the practice of internal auditing as it should be.
2. Provide a framework for performing and promoting a broad range of value-added
internal audit activities.
3. Establish the basis for the measurement of internal audit performance.
4. Foster improved organizational processes and operations.
Head of ICC will be responsible for total administration of Internal Control and Compliance
(ICC) of the bank. The rank of the Head of ICC must not be lower than two steps immediate
below the CEO.
The Head of ICC will report his/her activities and findings to the Senior Management. However,
the Head of Audit, although being a part of ICC administratively, shall report directly to ACB
and will be responsible to the ACB.
Bangladesh Bank may arrange conference of ICC head of all banks once a year to share their
problems and experiences in discharging their responsibilities without undue influence of others.
Internal Auditing is an independent, objective assurance and consulting activity designed to add
value and improve an organization’s operations. It helps an organization accomplish its
objectives by bringing a systematic, disciplined approach to evaluate and improve the
effectiveness of risk Management, control and governance processes.
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The purpose, authority and responsibility of the internal audit activity should be formally defined
in a charter, consistent with the Auditing standards, approved by the ACB and the Board.
Internal Audit Charter of the bank defines the purpose, authority and responsibility of the
Internal Audit Department. The internal audit activity should be independent and objective
oriented.
a) Persons punished for major offence and persons under disciplinary proceedings must not be
posted in ICCD. Track record of officers to be checked and maintained before posting them in
ICCD.
b) ICCD people should have thorough professional knowledge and banking experience with
good academic background.
The Head of ICCD will be appraised by the Senior Management. The Head of Compliance and
Monitoring units to be appraised by the Head of ICCD primarily and by the Senior Management
finally. The Head of Audit will be appraised by the Chairman of the Audit Committee solely.
1. This leave will be sanctioned by the management at any time as required, no time bound
will be applicable in this case.
2. This leave cannot be claimed as a matter of right
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3. Sanctioned leave can only be changed by the management, employee cannot claim for
alteration.
4. There will be no extra monetary benefit for such leave.
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4.10.3 Abroad Training:
To keep pace with the changes taking place all around the globe and ever developing technology,
Executives and Officers should be sent abroad to attend various training courses, workshops,
seminars, conferences and symposia to acquire updated knowledge of modern banking.
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Chapter-5
Audit
5.0 Introduction
As per Section 15GA of the Bank Company Act-1991, the Audit Division should be
independent, and free from other units of the bank. It will act independently without influence of
Management.
Audit planning should be based on an assessment of risk and exposures that may affect the
organization, and should be done at least annually in order to reflect the most current strategies
and directions of the organization. The best way to add value to an organization is to make sure
that the risk assessment and the plan developed from the assessment reflect the overall objectives
of the organization. Risk assessments also need to include input from management and the
Board.
The internal auditor’s work involves identifying areas where internal controls are not in place or
where there is a risk of failure of control. All risks are not necessarily the result of internal
control weaknesses. Only those risks which continue to exist are truly viewed as weaknesses.
Thus, the basic audit planning process consists of two phases: the assessment of business and
control risk for the development of the annual plan. The first phase, assessing business focuses
on:
● Showing presence in office by punching ID for two persons or more by one person or
representing one person by other persons
● Single person using/operating two password (for checker & maker) for illegal purpose.
● Fund shown as borrowed and reported as other asset ( but practically was in placement)
The annual audit plan can then be developed as the reflection of the results of the risk assessment
model and the selection policy. The risk assessment model and the selection policy will enable
the internal audit activity to define, indentify and to set priorities for audit risk annually or more
frequently as business conditions dictate.
The Head of Audit Division should communicate the internal audit plans and resource
requirements, including significant interim changes, to the Audit Committee of the Board for
review and approval. The Head of Audit Division should also communicate the impact of
resource limitations to the ACB.
Needed number of extra staff strength to be arranged for concurrent audit to look into whether
the bank is following the guidelines of regulatory bodies, institutional policies and procedures set
by/ approved by the BoD and Laws of land.
A surprise check of audit work procedure can be made by the high officials during audit program
of large units.
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Lapses:
Lapses arise out of any kind of irregularities, misstatements, non-compliance with existing
policies and procedures of the bank, or failure to observe laws of the land, by which the bank
may incur financial losses.
Moreover, sometimes non-compliance of existing policies and procedures may not cause any
financial loss with an immediate effect, but they can result in an erosion of reputation. At the
same time, any malpractice in banking, misuse misappropriation of the bank's funds can be
defined as lapses.
Types of Lapses:
Based on the gravity of the irregularities, lapses can be classified in 4(four) groups as follows:
a) Minor Irregularities
b) Major Lapses
c) Deemed to be Serious Lapses
d) Serious Lapses
Punishment is an action to be taken by the management of the bank against employees for
committing lapses/offences. Punishable offences are activities, for which higher management
thinks administrative action must be taken. Auditors should detect the level or quantum of
lapses/ offence and report to higher management.
iii. Determining the Items/Areas of the Unit to be Audited and Period Under Coverage
After selection of the audit unit, functional areas of the unit to be audited should be analyzed to
assess the areas/items to be audited. Time and scope of audit should be selected. Discussion with
the management team audit area may be under taken to identify any other areas that may be
included in the scope of the audit.
v. Field Work
Fieldwork is the undertaking of the audit program that has been prepared for the area being
audited. During fieldwork, the auditor gathers evidence in order to determine the status of
operations and controls within a particular area. This evidence is the basis for the auditor’s
conclusions about a particular assignment.
Audit evidence consists of physical documentation, analytical reviews and comments from staff
and outsiders. Audit evidence is anything that provides a basis for the auditor’s beliefs.
Fieldwork is the compiling of evidence to substantiate the auditor’s findings in relation to the
area being audited.
When undertaking fieldwork, the auditor should ensure that they have gathered sufficient
evidence to meet the audit objectives and to complete the audit program. The level of fieldwork
undertaken and the amount of evidence gathered will depend on the auditor's judgment and the
reason for the audit. If the auditor is investigating a fraud, then the level of detail and evidence
will need to be sufficient to ensure that the case can proven.
The organization, design and content of the working papers will depend on the nature of the
audit. However, the working papers should document the following aspects of the audit process.
- Collecting, filing and indexing documents
- Auditing procedures performed, informed obtained and conclusions reached
-Reporting
The item to be included in the report should include the following information:
- A statement of what was expected
- The factual evidence of what the auditor found
- The reason for the difference
- The risk or exposure the difference has on the organization and the financial statements (if
applicable)
- Recommendation to resolve the issue
- Management comment including action to be taken and a date by which the issue will be
resolved ( following discussion with management)
All findings should be reviewed by the Team Leader and Chief Audit Executive prior to the final
audit report being issued.
5.5 Reporting
The Banks will design a reporting structure for ICCD depending upon their size and complexity
of business. However the following reporting structure can be used as a benchmark for the
banks:
● The Audit Division will prepare report on individual inspection/Audit programs within 15 days
(except for items that needs to be escalated immediately) and submit the same to the branch/
business unit for rectification with a copy to line management.
● For low and medium risk items findings will be reported to the MD/CEO.
● For high-risk items findings will be reported to the MD/CEO and the Audit Committee of the
Board.
● ICCD will prepare an annual integrated report on the health of the Bank to be submitted to the
Board of Directors for onward submission to Bangladesh Bank.
• At the end of the year there should be a summary report on the audit findings and corrective
actions taken which should be forwarded to the Audit Committee of the board and the Managing
Director simultaneously.
• Based on the review of monitoring reports the audit team should also conduct surprise check
on the branches where regular gaps are identified.
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5.6 Annual ICC Report on the health of the Bank
The assessment of the soundness of a bank that reflects overall position of the bank's
performance is not only important for the bank itself, but also for all stakeholders of the bank.
The “Annual Integrated Health” Report reflects the financial, reputational and sustainability
position of a bank, based on the most recent data of the bank itself. The purpose of the report is
to provide stakeholders with a basic overview of the general health of the bank.
The health of a bank may be judged from different points of view, but emphasis has to be given
to the feasibility of the aspects considered for health analysis and its quantification. Taking these
two conditions into consideration, the health of the bank is assessed from a three dimensional
view points, viz. Financial Health, Internal Control & Compliance Health and Image &
Reputation Health. Depending on the nature of business, the Board of Directors will decide on
the weight of the sectors, and inform the same to Bangladesh Bank before preparing report. The
Health Sectors and allocated maximum attainable score are shown below:
The bank will determine weight of the sectors based on their portfolio nature with the approval
of the Board and shall determine 'Health Score' using following model:
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Integrated Health Score = w1g1+ w2g2+ w3g3
The health analysis of the bank to be done on yearly basis as a regulatory compliance, and
analysis should be made immediately after completing an accounting year.
The yearly integrated health report of the bank is to be submitted to the Board of Directors for
approval and review.
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Chapter-6
Compliance
Definition:
Compliance refers to operating the bank in conformance with applicable laws, regulations,
policies, standards, guidelines, etc. applicable to all institutions in its category, and responding
fully and in a timely manner to supervisory criticism and orders to take corrective action issued
by applicable regulatory authorities or law enforcement bodies. In this context, compliance also
refers to preventive actions taken to mitigate compliance risk, which is the risk of legal or
regulatory sanctions, material financial loss, or loss to reputation as a result of failure to comply
with applicable rules.
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• The unit must exercise its right to express and disclose its findings freely to the Audit
Committee of the Board and if necessary, to the full Board of Directors.
Minor irregularities are identified by auditors and mentioned in reports. A Branch Office will
prepare compliance/response within 15 calendar days from the date of the receipt using the
format and send it to the concerned Zonal Office/Head Office. The Zonal Office/Head Office
will verify the Branch Office’s responses. After verification, the response together with the
Zonal Office's/Head Office's comments will have to be sent to the Audit compliance unit within
the above mentioned 15 calendar days. The Compliance Unit will raise the issue to line
management i.e., Head of ICC, MD/ CEO for settlement of the objections.
a) For settlement of administrative objections, the Compliance Unit will raise the issue to
Head of ICCD and ultimately to the Audit Committee of the Board, if required.
b) When corrective action is taken by the branch regarding major lapses, the Compliance
Unit will decide whether or not there is settlement of the objections.
c) When unsettled objections or irregularities are reported in the present audit report, then
previous objections are considered as transferred to the present report and subsequently
the previous file is closed.
d) However, if any objections/major lapses are reflected in the next audit report two times
consecutively, or it is found the major lapses are not settled in a reasonable time, then this
type of major lapses will be deemed to be serious lapses. Auditors must always be careful
to identify this type of lapses. Any mistake or failure to recognize the major lapses will
be considered as an audit fail. Common punitive action is suggested for serious lapses
and those deemed to be serious lapses.
a) For settlement of administrative objections, the Audit and Inspection Division will raise
the issue to Head of ICCD, and the Audit Committee will give the decision. If required
the matter will be raised to the full Board of the bank.
b) When corrective action is taken by a branch regarding serious lapses, the Compliance
Unit will decide whether or not there is settlement of the objections.
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c) When unsettled objections or irregularities are reported in the present audit report, then
any previous objections are considered as transferred to the present report, and
subsequently the previous file is closed.
6.3.4 Commercial audit objections(for govt. banks) settlement and file close:
a) Spot rectification: During audit some irregularities can be rectified on the spot. The
audit team must insist on rectification of errors or omissions on the spot, when possible,
and report accordingly.
b) Discussion meeting: At the closing day of the audit there must be a meeting between the
head of the branch and the audit team members. As a result of this discussion, some
irregularities may be mitigated.
c) After audit settlement: Audit objections are being classified into two categories:
ii) When the auditor is not convinced by the corrective action taken by the branch, then a bi-
party meeting will be arranged for the settlement of the objections raised. The Bank will remain
present in the meeting with supporting documents for onward settlement of the objections in
question.
Following the above procedures, if the auditors are convinced, then they will issue an office
order regarding the settlement of the audit objections.
Advance objections:
i) The concerned branch is to provide a written confirmation of corrective action with related
supporting documents, viz., photocopies of vouchers, A/c Statements, certificate of compliance,
etc. and the auditors, if convinced by these, will issue a circular letter regarding the settlement of
the audit objections.
ii) When the stipulated time has expired and the auditor is not convinced by the corrective action
taken, then a tri-party meeting will be arranged for the settlement. The Bank will remain present
in the meeting with supporting documents for onward settlement of the objections in question.
After following the above procedures subject to the full satisfaction of the auditors, they will
issue an office order regarding the settlement of the audit objections.
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6.3.5 Bangladesh Bank Inspection objections settlement and file close:
a) For the settlement of objections, corrective action taken by the branch, evidenced with
proper documents, is required. On receipt, of the compliance certificate from the branch
manager with the zonal Head's and Circle Heads' counter signature(as the case may be),
the Compliance Unit will give a decision as to the final settlement of the objections.
b) When unsettled objections/irregularities are found and reported in the present inspection
report, with due note in the report of Bangladesh Bank then automatically the previous
objections are transferred and considered as file closed.
c) For the settlement of long outstanding objections, the Compliance Unit will arrange a
meeting with Bangladesh Bank and the bank's top management. During discussion some
objections are settled and others are reviewed. If Bangladesh Bank is not convinced,
Bangladesh Bank will issue a re-notice for unsettled objections. The Audit Compliance
Division will inform the concerned branch regarding the settled objections.
d) A quarterly meeting with BB to review the status of required corrective action will also
be held. (Reference: DBI-2 Circular No-1 Dated-27/12/2010)
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Chapter-7
Monitoring & Control
7.1 Monitoring Activities and Corrective Measures:
• The effectiveness of the Bank’s internal control should be monitored on an ongoing basis.
Key/high risk items should be identified and monitored as part of daily activities.
• Internal control deficiencies, whether identified by business lines, internal auditors, or other
control personnel should be reported in a timely and prompt manner to the appropriate
management level and addressed immediately.
• Τhe ICC will report material control deficiencies to the audit committee of the BOD with
specific recommendations.
• The Monitoring Unit will review the Quarterly Operations Report and Exceptions report (if
any); in addition to the line management the Monitoring Unit will instruct the branch/unit to
rectify the exception and report the same. If deemed necessary, the ICCD will instruct the Audit
& Inspection Team (A&IT) to carry out an audit on the specific deviation.
• Depending upon the gravity of the deviation the ICC will report the matter to the ACB with a
copy to the MD for necessary action and rectification.
• A copy of the Loan Documentation Checklist must be sent by each branch/unit to the
Monitoring Unit, which will review the same. On a quarterly basis ICCD will submit a report to
the MD and ACB on the type/nature of the discrepancies in credit documentation.
• In addition to the above the ICCD will depute the A&IT routinely, but also on surprise dates, to
branches/departments to carry out sample checks on the items mentioned in the DCFCL.
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Chapter-8
Shari`ah Audit
8.1 Introduction
8.2.2 Implications
Adverse consequences that may arise due to non-compliance with any Shari`ah principle may be
summarized as follows:
1. Direct violation of the commands of Allah (swt) and His prophet (sm).
2. Impede the bank and the workforce from the Blessing or Barakah of Allah (swt) which
will make the banking activities meaningless (not become ‘ibādah before Allah).
3. Contravene the provisions of Bangladesh Bank`s `Guidelines for Islamic Banks 2009’
which may bring adverse consequences.
4. Jeopardize or affect the bank’s reputation as an Islamic bank.
5. With regard to “Agreement and its Execution” would render the contract between the
bank and Customer null and void under the perspective of Shari`ah . Therefore, any profit
gained from this contract would be considered as non-halāl.
6. Income generated from a Shari`ah non-compliant transaction is not recognized as the
Bank’s regular and halal incomes. In the event where the bank receives non-halāl income
unintentionally, the amount is to be channeled to the bank’s CSR activities as advised by
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the Shari`ah Supervisory Committee.
Primarily the branches which obtained a score of 30 or above, may be treated as High Risk
Branch, the branches which obtained a score from 15-29.99 may be treated as Medium Risk
Branch, and the branches which obtained a score from 0.00-14.99 may be treated as Low Risk
Branch. It is mentionable here that, these risk indicator slabs of considering a branch as
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High/Medium/Low shari`ah non-compliance risk bearing may be changed from time to time,
if necessary.
The ICCD of the banks may conduct a Shari`ah audit as per the following frequency on the basis
of their calculated score as High/ Medium/ Low risk:
At the end of each year, the Head of the Shari`ah Supervisory Committee's' (SSC)/ICC
secretariat will set out a Shari`ah audit plan for the next year. This would be a high level
Shari`ah audit plan, which will be approved by the member-secretary, SSC and should have
concurrence of the SSC.
This will be a risk based plan where sensitive areas, including a higher percentage of Shari`ah
violations, will be given priority.
The deficiencies identified during the Shari`ah audit should be notified to the appropriate level
and also be reported to the member-secretary of SSC, and to the ACB, with a copy to the
MD/CEO.
At the end of each quarter, there should be a summary report on the Shari`ah audit findings and
corrective actions taken, which should be forwarded to the SSC, ACB, Board of Directors and
MD/CEO.
Based on the review of monitoring reports the Shari`ah audit team should also conduct surprise
checks on the branches/windows where regular deficiencies are identified.
Depending on the gravity of deviation from Shari`ah compliance, the member-secretary of SSC
will categorize the branches/windows into high, medium and low risk categories, and the
frequency of Shari`ah audit shall be as under:-
High Half-yearly
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A Shari`ah Risk Rating guideline is included in Annexure ‘C’. The Shari`ah audit should check
at least a percentage of the Income of the Bank/windows as decided by the Shari`ah Board/ SSC.
An adequate number of personnel, having thorough knowledge in Islamic Banking operations
and ICT literacy, are to be posted as Shari`ah auditors.
The Shari`ah lapses are to be categorized in two categories; viz. major violations and minor
violations. (Annexure-C)
All the violators (especially those with major violations) must be sanctioned appropriately,
which will help the bank to become more Shari`ah compliant.
Repeat offenders are to be dealt with severely to stop recurrences of Shari`ah violations.
Taking into consideration the concerned sections of BCA-1991, BB’s guideline for Islamic
Banking, AAOIFI’s Standard, IFSB’s guiding principles, etc., each bank will prepare a check list
with regard to Shari`ah compliance for both the branch level and Head Office level and submit
the findings of the same to the SSC, ACB, Board and MD/CEO on a quarterly basis for further
corrective measures.
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Chapter-9
Information Systems (IS) Audit
Information system is the heart of banking business and major fuel for the inclusion of
competitive, complex and constantly changing business innovation in today’s highly cyber
threatened environment.
Now-a-days most of the working activities are driven by computer systems and thereby paper
based manual workings are minimized through automated Information Technologies(IT). In the
present day situation, information is treated as the most valuable as well as vulnerable asset.
Most of the information is now collected, processed and stored on electronic computers and
transmitted across networks to other computers in this increasingly interconnected business
environment which invites the threats and vulnerabilities inherently.
In-addition, banks amass a great deal of confidential information about their customers,
employees, products, services, research and financial status and IS audit which also known as
Automated Data Processing(ADP) audit/Electronic Data Processing (EDP) audit is of no
exception.
Primary goal of the IS audit department of a bank is to determine information & related
technological security loopholes and recommend feasible solution.
IS Audit is all about examining whether the IT processes and IT Resources combine together to
fulfill the intended objectives of the organization to ensure Effectiveness, Efficiency and
Economy in its operations while complying with the extant rules.
Information system auditors should develop and implement a risk-based IS audit strategy in
compliance with IS audit standards, regulatory guidelines and internal policies to ensure that key
areas are included.IS auditors should evaluate the effectiveness of the IT governance structure to
determine whether IT decisions, directions & performance support bank’s strategies &
objectives. IS auditors also evaluate risk management practices to determine whether the bank’s
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IS-related risks are properly managed. IS auditors should conduct audit on overall information &
related technological security aspects covering the followings:
a. IT Asset Management
b. IT Service & Facility Management
c. Physical (client/server interface, telecommunication, server, data storage, intranet, internet)
& Environmental Security
d. User & Access Management
e. Database Access & Network Security Management
f. Data Center Security
g. Change & Patch Management
h. Problem & Incident Management
i. IT Strategies, IT budget
j. Audit trails &Data Privacy Protection Management
k. IT Service Contract & Agreements and Vendor Management
l. IT Risk Management
m. Data Integrity &Transaction control
n. Data Retention & Disposal
o. System Acquisition, Development Management
p. Business Continuity & Disaster Recovery
The spectrum of IS/IT/ADP Audit should also cover the issues mentioned in the Board approved
ICT guidelines of the bank in line with ICT guidelines issued and updated by Bangladesh Bank.
Circulars and other instructions issued in this regard will also come under purview of IS/IT Audit
to ensure data security. However IS/IT Audit at least cover the following areas for overall data
security.
i. System Design
v. Network Security
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Chapter-10
Miscellaneous
In line with section 38 and section 40 of BCA-1991(revised up to 2013) banks prepare their
annual account statements, have them audited by an external auditor, and submit them to
Bangladesh Bank no later than two months after the end of the financial year. Furthermore, in
compliance with the Governor's order dated 29/07/2012, a BB inspection team has to finalize its
observations far enough in advance to reflect them on the concurrent financial statements of the
bank that are in the process of being reviewed by the external auditor. To impel the external
auditor to reflect the issue(s) in alignment with the inspection observations, there should be a
meeting between the external auditor and management of the bank in presence of the BB
inspection team.
10.2 Special Board Meeting on compliance with findings annual inspection report of
Bangladesh Bank
To bring the BB inspection observations and compliance with findings thereof to the knowledge
of the Board of Directors, banks are advised to arrange a board meeting in the presence of the
BB inspection officials and management of the bank as per instruction contained in DBI-2
circular no-01 dated 12/03/2009. In such meeting the external auditor should remain present.
Page # 48
Annexure-A
The Organogram & Structure of Internal Control & Compliance Department (ICCD)
Board of Directors
Audit Committee
Head of ICCD
Internal External
Audit -1
All AD, Corp. Audit -2 Audit Audit
Branch Audit -3
Br. Circle, Compliance Compliance
Specialized
Zonal Office, offices(Non- N/A Unit/ Unit/ N/A
and Vigilance N/A
Subsidiaries AD & Division Division
Audit
& SME/Agri.
H/O(divisions branches)
/dept.)
PO PO PO PO PO
PO/SO
SPO/PO
SO SO SO SO SO
Page # 50
Sl Allotted Score
Deposit scheme exceeding expiry date/ prematured Score obtained
encashment of deposit scheme but not marked as
closed
7 More than ten cases 10
Up to ten cases 5 0
In no cases 0
Sl FDR/ Deposit account & products rate/tenor Allotted Score
variance with approved rate sheet. Score obtained
8 More than five cases 10
Up to five cases 6 0
In no cases 0
Sl Allotted Score
Excise duty/ service charge/other Score obtained
charges/fees/commission/rent/security deposit
including VAT (where applicable)not deducted from
deposit/loan account
9 More than five cases 10
Up to five cases 6 0
In no cases 0
Sl Allotted Score
Voucher stitching Score obtained
10 Pending more than 15 days 10
Pending more than 05 days but less than 15 days 7
0
Pending more than 01 day & upto 05 days 5
Found not pending 0
Sl Allotted Score
Audit Trail prints Score obtained
11 Found not checked and signed by branch DM/BM 10
Found partially checked and signed by branch DM/BM 5 0
Found checked and signed by branch DM/BM 0
Sl Allotted Score
Daily mandatory output ( supplementary Score obtained
sheet/statements of affairs/clean cash
book/vouchers /etc.)
12 Found not checked and signed by branch DM/BM 10
Found partially checked and signed by branch DM/BM 7 0
Found checked and signed by branch DM/BM 0
Sl Payment made against advance dated or against Allotted Score
stale cheque Score obtained
13 More than five cases 10
Up to five cases 7 0
In no cases 0
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Sl Allotted Score
Reversal of contra entries Score obtained
14 Expired contra entries found not reversed more than five 10
cases
0
Expired contra entries found not reversed upto five cases 8
Expired contra entries found reversed 0
Sl Balance confirmation letter Allotted Score
Score obtained
15 Preceding half yearly B C not sent by the branch 10
BC sent by the branch but not in all cases (partialy sent) 5 0
BC regularly sent by the branch 0
Sl Thanks letter Allotted Score
Score obtained
16 Thanks letter not sent by the branch 10
Thanks letter sent by the branch but not in all cases 5 0
Branch is in practice of sending thanks letter 0
Sl Officials in the branch working in the branch more Allotted Score
than 3 years. Score obtained
1 100% cases 10
7 80% - <100% cases 8
30%-< 80% 5 0
Less than 30% 3
No such instances 0
Sl User shut down his work station ,power off the Allotted Score
printer and UPS at the end of the day Score obtained
1 No ( for any instances and any single cases) 10
8 0
Yes 0
Sl Loan disbursed but accepted sanction advice not Allotted Score
obtained Score obtained
19 More than 10 cases 10
06 to 10 cases 8
0
Up to 05 cases 5
No such case found 0
Sl Sanction advice was not prepared according to CHO Allotted Score
approval. Score obtained
20 More than 10 cases 10
06 to 10 cases 5
0
Up to 05 cases 4
No such case found 0
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Sl Charge document not obtained / found blank/ Allotted Score
without stamp Score obtained
21 More than 10 cases 10
06 to 10 cases 5
0
Up to 05 cases 4
No such case found 0
Sl Lien of security instruments Allotted Score
Score obtained
22 Pending any instances 10
0
Done in all applicable cases 0
Sl Execution of Registered Mortgage and IGPA AllottedScor Score
e obtained
23 Pending any instance 10
0
Done in all applicable cases 0
Sl Obtainment of original title deed/certified true copy Allotted Score
along with SRO token/deed ticket for registered Score obtained
mortgaged property.
24 Pending any instance 10
0
Done in all applicable cases 0
Sl Obtainment of land related documents/chain AllottedScor Score
documents e obtained
25 Pending more than 15 cases 10
Pending up to 15 cases 8
0
Pending up to 05 cases 5
No such case found 0
Sl Monthly basis stock report as per CHO sanction Allotted Score
Score obtained
26 Pending more than 15 cases 10
Pending up to 15 cases 8
0
Pending up to 05 cases 5
No such case found 0
Sl Insurance coverage not taken properly/policy Allotted Score
expired/ insurance policy not found Score obtained
27 More than 10 cases 10
06 to 10 cases 8
0
Up to 05 cases 5
No such cases found 0
Sl Non-Preservation of LDCL in respective loan file Allotted Score
Score obtained
28 More than 10 cases 10
0
06 to 10 cases 8
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Up to 05 cases 5
No such cases found 0
Sl Maintenance of safe-in and safe-out register Allotted Score
Score obtained
29 Not maintained 10
Maintained but not up to date 5 0
Maintained properly and found up to date 0
Sl Comments of Bangladesh Bank Audit team Allotted Score
regarding core risk areas (CRM,AML,ICT & ICC) Score obtained
30 Not satisfactory 10
Partial satisfactory 5
0
Satisfactory 0
(If not audited by Bangladesh Bank score will be zero)
Total 300 0
Percentage (%) -
Branch Rating
Page # 54
Annexure-C
Shari`ah non-Compliance Risk Rating :
1 2 3
1 For 2 types Major Violations (16x2/2)=16
Total 100
1) Score 16 (8x2) @ 8 for each kind of non compliance of 2 types Major Shari'ah violations (See
Sl.No. Types of Shari'ah non- Allocated Marks for Allocated Marks as Allocated Marks as per Score
Compliance violation per doubtful income volume of violation
Score out of 16 Score out of 16 Score out of 16 Average
(always gets full marks)
1 2 3 4 5 6
Page # 55
1 Cash Facility Provided in
Bai Murabaha and Bai-
Muajjal. [Except Buying
Agency]
Total
2) Score 30 (5x6) @ 6 for each kind of non compliance of 5 types others Major Shari'ah violations (See
Sl.No. Types of Shari'ah non- Allocated Marks for Allocated Marks as Allocated Marks as per Score
Compliance violation per doubtful income volume of violation
Score out of 6 Score out of 6 Score out of 6 Average
(always gets full marks)
1 2 3 4 5 6
1 Cash memo obtained in the
name of the investment
client
Total
3) Score 36 (18x2) @ 2 for each kind of non compliance of 18 types Minor Shari'ah violations (See
Page # 56
Sl.No. Types of Shari'ah non- Allocated Marks for Allocated Marks as Allocated Marks as per Score
Compliance violation per doubtful income volume of violation
Score out of 2 Score out of 2 Score out of 2 Average
(always gets full marks)
1 2 3 4 5 6
1 Client received the goods
instead of the Branch from
the sellers directly
2 No record of possession of
goods by the branch
3 Cash memo/Bill/Challan/
Transport receipt not found
8 Charging of profit at
agreement stage in case of
Bai Salam
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14 Engagement of buying agent
in Bank's unapproved item
Total
4) Score 6 (3x2) @ 3 for each kind of non compliance of 2 types of lacking in motivational activities
Sl.No. Types of Shari'ah non- Allocated Marks for Allocated Marks as Allocated Marks as per Obtained
Compliance violation per number of attendee of program score
program
Score out of 3 Score out of 3 Score out of 3 Average
(always gets full marks)
1 2 3 4 5 6
1 Lacking in Shari`ah
motivational program for the
employees
2 Lacking in Shari`ah
motivational program for
the clients
Total
5) Score 6 (2x3) @ 2 for each kind of non compliance of 2 types of other Shari'ah activities
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Sl.No. Types of Shari'ah non- Allocated Marks for violation Allocated Marks as per measure Obtained
Compliance of violation score
Score out of 2 Score out of 2 Average
(always gets full marks)
1 2 3 5 6
1 Lacking in Offer and
Acceptance with the
Supplier
Total
6) Score 6 (1x6) @ 1 for each kind of non compliance of 6 types of other activities (See structure 5 for
scoring ) :
Sl.No. Types of Shari'ah non- Allocated Marks for violation Allocated Marks as per measure Obtained
Compliance of violation score
Score out of 1 Score out of 1 Average
(always gets full marks)
1 2 3 5 6
1 Lacking in giving or/and
taking Inter-branch co-
operation
2 Lacking in establishing
separate queue or counter for
the Woman Clients
3 Lacking in establishing an
effective and efficient
purchase cell in the branch
Page # 59
5 Lacking in housekeeping &
discipline
Total
Structure :1
Score will be calculated as below in case of non-Compliance of 2 types major Shari'ah principles (Sl No 1):
Structure : 2
Score will be calculated as below in case of non-Compliance of 5 types other major Shari'ah principles
(SL.NO -2) :
Structure : 3
Score will be calculated as below in case of non-Compliance of 18 types minor Shari'ah principles (SL.NO
-3) :
Structure : 4
Score will be calculated as below in case of non-Compliance of 2 types of lacking in motivational activities
(SL.NO -4) :
1 2 3 4 5
1 0 (zero) 3 1-49% 3
2 1 2 50-80% 2
3 2-3 1 81-95% 1
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Structure : 5
Score will be calculated as below in case of non-Compliance of 2 types of other Shari'ah principles (SL.NO
-5) :
Structure :6
Score will be calculated as below in case of non-Compliance of 2 types of other activities (SL.NO -6) :
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Annexure-D
Foreword
In accordance with the Bangladesh Bank Guidelines of “Managing Core Risk in Banks on
Internal Control and Compliance Risk”, Internal Control and Compliance Division is required to
prepare annual report on the health of the Bank which is to be submitted to Audit Committee of
the BOD and a Circulation Copy to the Managing Director for perusal and further onward
submission to the Board of Directors of the Bank as a regulatory compliance.
To comply with the above guidelines, this health report on the Bank overall activities for the
year 20 ---- has been prepared, as well. While assessing the health of the Bank, emphasis
has been given on the progress of achievement of the Bank long range visions set by the
Management.
In order to built up necessary infrastructure. In the year 20 , the Bank has added nos. of
branches to its ever expanding network, making presence of nos. of branches across the
country. In the meantime, The Bank has become a group by expanding its business into nos.
of wholly owned subsidiaries ( Securities Limited, Capital Limited and Exchange Limited). Thus,
the volume of business of the Bank has increased considerably. Bank has diversified its
activities beyond traditional corporate banking and trade financing into Primary Dealership,
OBU, Retail Banking, SME Banking, Internet Banking etc., which has made the Bank as one of
the largest banking company in terms of products and services in the country.
The health of a bank may be judged from different points of view, but emphasis has been
given to the feasibility of aspect and quantification. Taking these two conditions into
consideration, Health of the Bank has been assessed from the view point of three dimensions,
viz. Financial Health, Internal Control & Compliance Health and Image & Reputation Health. The
hunch behind the segregation of health of the Bank into the above points of view is that these
areas will ultimately cover the overall health sectors of the Bank. If the overall health is found
sound then it may be assumed that the bank will achieve its long term goal with sustainable
growth.
While analyzing financial health, emphasis has been given to the dynamism of the bank’s
performance in different areas of operational activities, which have been highlighted in various
financial statements of the bank.
In assessing Internal Control and Compliance Health of the Bank, emphasis has been given
to internal control structure of the Bank and its effectiveness, while compliance health is
assessed considering the compliance culture of the Bank and its achievements.
In evaluating compliance health, attention has been given to the issues like, whether the
bank is able to meet regulatory requirements and the compliance and non-compliance status of
inspection reports submitted by regulatory bodies.
In assessing Image and Reputation health, attention has been given to the eminence of
Board and Management of the Bank, expansionary mode of brand image and CSR (Corporate
Social Responsibility) Activities.
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In preparation of this health report, both the quantitative and qualitative aspects have been
taken into consideration. The evaluation of major components of Health of the Bank is based
upon four categories of ranking like Excellent, Very Good, Good and Satisfactory and the Bank
has received a status of “ ” ranking in the health assessment for the year of 20 .
The Health of the Bank has been assessed from the view point of Financial health, Internal
Control and Compliance health and Image and Reputation health. To assess the overall health
position of these three health sectors, ICC Division has worked out a Health Grading Score
sheet based on quantification of certain parameters of each health sector. In our analysis, the
average score “90-100” means Excellent, “80-89” means Very Good, “70-79” means Good and
“60-69” means Satisfactory. In the assessment, the overall health position of the Bank for the
year 20 has been assessed “ ”. Detailed break-up of the Health assessment is furnished
as under:
HEALTH RESULTS
A. Financial Health: (Prepared under supervision of Chief Financial Officer and approved
by ECB)
In analyzing the Financial Health, several parameters like Earnings, Liquidity, Solvency, Asset
Quality, Deposits and Loans and Advances have been considered. The Bank has received an
overall Financial Health score of out of 100, which means the financial health of the Bank is
“ ”. Hence, we are depicting below the parameter-wise financial health position of the Bank
for the year ended December 31, 20 . The detailed of these scores are also followed by
enclosed health grading Score sheet.
Page # 64
Loans and Advances Health 28 out of 30 Excellent
a. Earnings:
Healthy Banks are generally profitable, and earn money. To assess the relative
profitability of the bank, we have considered five earning criteria, namely- Operating
Profit Growth, Net Interest Income Growth, Non-Interest Income Growth, Return on
Assets (ROA) and Return on Equity (ROE). These indicators measure how profitable the
bank is for its size, and a bank with higher trend in these areas tend to be a healthier
bank. In our analysis, 00% weight has been allocated to Earning history of the Bank and
the Bank has received a score of 21 out of 30, which means earning health of the Bank
is “ ”.
b. Liquidity:
Bank’s liquidity policy is designed to ensure that it can meet its obligations all times as
they fall due. The liquidity management within the Bank focuses on overall balance
sheet structure and the control, within prudent limits, of risk arising from the mismatch of
maturities of the balance sheet and from exposure to un-drawn commitments and other
contingent obligations. The management of liquidity risk within the Bank is undertaken
within limits and other policy parameters set by ALCO. The compliance is monitored and
co-ordinate by Bank’s treasury, both in respect of internal policy and regulatory
requirements.
Liquidity analysis in a Bank examines whether the bank is maintaining adequate CRR
and SLR, whether Loan-Deposit Ratio at required level, dependency on inter-bank
borrowing at a tolerable level and overall un-drawn commitments within reasonable
range etc. or not. Distributed 5 score for Liquidity position for the year 20 (year under
review) and the Bank has received 00 score, which means that the bank has been
maintaining very good A–D ratio. However, excess SLR was maintained in 20 (year
under review) due to operation in the Primary Dealership (PD) market, which made the
bank’s dependency on money market higher, in order to maintain adequate liquidity.
Page # 66
excess SLR in the year 20 (year under review). Bank’s borrowing from inter-bank call
money market is high due to participation in the government bills/bonds.
c. Capital Adequacy/Solvency:
A measure of a bank's financial health is its capital/asset ratio, which is required to be
above a prescribed minimum. In assessing solvency health, three parameters, namely
Core Capital to RWA ratio, Capital Adequacy Ratio (as per Basel-II/III regime) and
Capital Growth have been considered, and the Bank has received a score of out of
10, which means the Capital Adequacy position of the Bank was “ ” as on the
assessment period.
1. Capital Growth:
Capital requirement is a bank’s regulation which sets a framework on how banks must
handle its capital. The categorization of assets and capital is highly standardized so that
it can be risk weighted and weights are defined by risk-sensitivity ratios, whose
calculation is dictated under the relevant Capital Accord. The growths of capital of the
Bank over the years 20 to 20 were 00%, 00% and 00% respectively. For the purpose
of analysis a score of 2 has been allotted to Capital growth of 20% and above and the
Bank scored out of 2 for capital growth of % in the year 20 .(year under review)
d. Deposit:
Deposit is considered as the life blood of banking operation and a weapon for making
maximum profit by deploying it in a high yielding investment and mixing it up in a cost
effective mode. So, deposit management is, therefore, important. Effective deposit
management entails optimum deposit mixture that leads to minimize cost of fund and
optimize spread. In assessing deposit health, four parameters namely Deposit Growth,
Deposit Mix, Cost of Fund and the ratio of core Deposit to Total Deposit have been
considered, and MTB has received a score of 00 out of 25 in 20 , which means the
Deposit health of the Bank is “ ”.
1. Deposit Growth: Deposits, representing the largest portion of total liabilities, account for
00%, showing an increase/decrease of 00%, or BDT 00.00 lac from the year 20 . Over
the past three years, the bank(please indicate your bank name) was able to increase its
deposit portfolio more than (00%) from BDT 00.00 lac in the year 20 to BDT 00.00 lac
in the year 20 (year under review). It is apparent that deposit growth of the Bank is in
increasing/decreasing trend (on an average basis) over the last three years. For the
purpose of analysis distributed 5 score for deposit growth of 25% and above and 2 for
less than 15% growth and the bank scored for deposit growth of 00.00% in the year
20 .(year under review)
2. Deposit mix: While reviewing deposit mix of the Bank from the year 20 to 20 , it is
observed that the high cost deposit mix (FDR) is 00%, 00% and 00% respectively to
total deposit. For the purpose of analysis distributed 5 score for an Ideal high cost
deposit mix of 31% - 55% and the bank has scored for the deposit mix of 00.00% in
the year 20 . (year under review)
3. Cost of fund: Cost of fund is one of the most important indicators to measure the
soundness of the fund management. Lower cost of fund will enlarge the spread and thus
maximize profit. In the years 20 to 20 , Cost of Fund of the bank was 00.00%, 00.00%
and 00.00% respectively. It has been observed that there is a significant improvement in
reduction/increase of Cost of Fund in 20 (year under review), compared to 20 . The
scenario can further improve by increasing more low cost deposit in the deposit mix. For
Page # 68
the purpose of analysis a score of 10 can be distributed for an ideal cost of fund
ranging 6% - 8% and the bank has received for having 00.00 % as cost of fund in the
year 20 (year under review).
4. Core Deposit to Total Deposit: While reviewing deposit mix of the bank for the year 20
to 20 , it is observed that the Core deposits are 00.00%, 00.00% and 00.00%
respectively to total deposits. For the purpose of analysis a score of 5 has been
allocated for an ideal ratio of core deposit ranging 81%-100% and the bank has received
5 for having 00.00% as Core Deposit to Total Deposit.
(Add graphic representation if needed)
1. Loans & Advances Growth: In the years 20 to 20 , the amount of loans & advances
of the Bank was at BDT 00.00 lac, BDT 00.00 lac, and BDT 00.00 lac respectively, and
the growth rates were 00.00%, 00.00% and 00.00% respectively. For the purpose of the
analysis a score of 5 has been allotted for an ideal growth ranging 25% - 30% and the
bank has scored for achieving the growth of 00.00% in the year 20 (year under
review).
Page # 69
4. Large Loan Concentration: Bank sanctioned & disbursed large loan (10% or more of
total capital, as defined under BRPD circular # 05, dated 2005) of BDT 00.00 lac
(including non-funded loans), which is 00.00% of total loans and advances against BB’s
set limit of 56%, which is quite satisfactory/unsatisfactory. However, this concentration in
the last year (20 ) was 52.73%. In our analysis a score of 5 has been allotted for an
ideal Large Loan concentration below/high 00% and the bank has received 4 score for
having Large Loan concentration of % in the year 20 .
5. Asset Quality (NPL Management): At the end of year 20 , the Bank’s total loans and
advances were up by 00.00% over 20 (preceding year) , showing an
increase/decrease of BDT 00.00 lac. Despite this growth, loans classified as
“substandard and below” was below 00.00%, i.e 00.00(actual rate)%, which is at
satisfactory level and 00.00% less/higher than that of previous year. The NPL of 20
was 00.00%. For the purpose of the analysis a score of 10 has been allotted for an ideal
NPL ratio of below 3% and the bank has received score for having NPL ratio of
00.00% in the year 20 .
Page # 70
B. Internal Control and Compliance Health:( Prepared under supervision of Head of Audit
and approved by ACB)
Bank’s internal control system is designed to facilitate effective and efficient operations and to
ensure the quality of internal and external reporting and compliance with applicable laws and
regulations. In devising internal controls, the Bank has taken into account the nature and extent
of the risk, the likelihood of its occurring and the cost of controls. A system of internal control is
designed to manage, but not eliminate, the risk of failure to achieve business objectives and
provide a reasonable, but not absolute, assurance against the risk of material misstatement,
fraud or losses.
Analyzing Internal Control and Compliance health of the Bank encompasses the level of
compliance of Board and Audit Committee decisions, Management Committees decisions,
applicable laws, regulations and internal policies and regulatory requirements. The Bank has
received an overall Internal Control and Compliance Health score of out of 100, which means
that the Internal control and compliance health of the Bank was " " as on December 31, 20 .
The details of scores are followed by the enclosed health grading Score sheet.
In analyzing Internal Control health, five following parameters have been considered and
the Bank received out of 50 which indicate that the Internal Control system of the
Bank is Excellent. Detailed score is as under:
Total
The effectiveness of the Bank’s internal control system is reviewed by the Board and the
Audit Committee. The Executive Committee or Board of Directors receives regular
reports on significant risks facing the Bank and how they are being controlled. In
addition, Bank’s independent auditors present reports to the Audit Committee that
include details of significant internal control matters, which they have identified.
Page # 71
The Board of Directors of the Bank approves and reviews the overall business strategies
and policies of the Bank. The Board of Directors of the Bank has formed Audit
Committee, and the Audit Committee performs its roles in accordance with applicable
rules and regulations.
Management Committee:
The Bank has established SMT, the meetings of which are presided over by Managing
director of the Bank. SMT reviews and recommends all policies and strategies, which
are forwarded to the Board for approval/ratification. The Senior Management will review
the reports of Internal & External Audit, reports of regulatory bodies and take appropriate
steps in compliance process to remove the irregularities.
During the year 20 , the weekly communication meeting was held times taking 00
decisions, out of which 00 decisions were fully implemented, and the remaining 00
Page # 72
decisions are under process of implementation. Percentage of Implementation status is
00.00%.
Internal Audit and its rectification status: The audit program/schedule is developed
and duly approved by the competent authority at the very beginning of the year, and
audits are conducted accordingly. In the year 20 , audit of 00 branches of the bank (out
of 00 branches) has been completed, and the percentage of audited branches is
00.00%. The audit of the remaining 00 branches has been completed this year(year of
report preparing). During this period, the audit team raised 00 objections, and 00
objections were rectified. The percentage of rectification is 00.00%. Apart from it,
special audit on different Department/Divisions of Head office and different risk areas
were conducted as per Management instructions and requirements, in 20 (year under
review) .
In assessing compliance health, the Bank has emphasized on the compliance status of
all regulatory observations and time management. For the purpose of the analysis the
following 5 indicators have been considered to assess compliance health of the Bank
and the Bank has received a score of 00 out of 50, which means Compliance health
position of the Bank is “ ”.
Good Governance
Total
Bangladesh Bank’s Inspection teams conducted inspection on 05 Core Risk areas of the
Bank out of 06 Core Risk areas and raised 50 observations/ suggestions, out of which
00 have already been complied with. The percentage of rectification is 00.00%, which is
satisfactory. The concerned divisions have been advised to rectify the remaining
objections.
Page # 73
As per new capital accord, the Bank is required to maintain a regulatory capital of 10%
of RWA, against which the Bank is maintaining 00.00%.
Bangladesh Bank submitted 00 reports on the branches of the Bank during the year 20 .
As per BB’s report, the number of objections was 00 out of which 00 objections were
rectified as on 31.12.20 and the percentage of Compliance is about %.
In the year 20 , External auditors made 00 observations on the bank’s activities for the
year 20 , which have been complied.
During the year 20 , the internal Audit team detected 00 objections, out of which 00
objections were rectified and 00 objections are yet to be rectified. Percentage of
rectification is 00%. Close persuasion is going on to rectify all the pending Audit
objections.
Good Governance:
The Bank has meticulously followed and complied with all regulatory instructions issued
time to time by Securities and Exchange Commission as well as Bangladesh Bank, vide
different notifications and circulars regarding ensuring good governance in the
institutions, in the year 20 .
From the above analysis, it is evident that the Internal Control and Compliance health
of the Bank is .
Page # 74
C. Image & Reputation Health:(Prepared by External Auditor)
Better image and reputation increase the confidence of the stake holders, which ultimately
increases market Value of the Bank. The valuation of image and reputation is difficult but not
totally impossible. We have tried to assess ‘Image and Reputation health’ of the Bank by
quantifying following parameters and the Bank has received a score of 00 out of 100, which
indicates “ ” Image and Reputation Health. Detailed analysis of Image and Reputation
health is followed by attached score sheet.
Board Image
Management Image
Branding
Service to Customer
Total
For the purpose of the analysis, we have considered Board Image, Management Image,
Branding, CSR Activity, suit filed against the Bank and Imposition of Fine by Regulatory
bodies(such as Bangladesh Bank, SEC, The Honorable Court etc.) as the measures of Image
and reputation health, where negative score has been allocated for suit filed against the bank
and imposition of fine by the regulatory bodies.
Board Image:
Management Image:
The senior Management of the bank has also outstanding image in the banking sector. The
Bank has employed CEO who is held in high esteem in the banking arena. The senior
Page # 75
management in the core management team, has also enhanced the image and reputation
health of the Bank. The Bank is managed professionally in all respect by ensuring good
corporate governance, better customer services and compliance of regulatory requirements
over the years. The rights of all stakeholders are duly protected. The disclosure of information is
duly made as per regulatory requirements, and also for the valued shareholders. The Bank has
received a score of 00 out of 20 for strong Management Image.
Branding:
Unique Branding is one of the finest ways to reach the mass people. The branding activities of
the Bank are increasing gradually, and to this effect the Bank has set up bill-board and signage
in commercially important places with a view to be ‘the bank of choice’ of the people. The
people of the country are familiar with the brand of , yet a lot of things need to be done to
enhance its brand value. In our analysis it is found that the Brand Value of the Bank is “ ”
and has received a score of 00 out of 20.
is imbued with the spirit of Corporate Social Responsibility (CSR), and has contributed to
education, sports, art and culture, charitable, educational and healthcare institutions across the
country in the form of donation and sponsorship. had always been by the side of the
common and less advantaged people of the society in natural catastrophes; like flood, cyclone,
cold waves or any other national crisis. has launched loan products for the poor farmers
and SME customers and planned to introduce more banking products and CSR programs for
the poor of the society. The Bank has received a score of 00 out of 10 in CSR Activities.
Services to Customer:
In quantifying Image and Reputation health we have also considered the position of suits filed
against the Bank, and assigned 10 score for maximum 4 suits, and no score for 20 or more suits
filed against the Bank, by the counterparties. During the year 2014, 10 suits were filed by the
counterparties, and the bank has received a score of 00 out of 10.
In our analysis we have considered whether any sort of penalty has been imposed on the bank
by the regulatory bodies or not and assigned a zero (0) score for imposition of any penalty/fine.
During the year 20 the bank did not have any imposition of penalty by the regulatory bodies,
and it has received a score of 00 out of 10.
It appears from the above that the Image and Reputation Health of the Bank is “ ”.
Page # 76
D. Conclusion:
The analysis as made above shows that the financial health of the bank is “ ”; internal control
& Compliance Health of the bank is “ ” and image and reputation health is “ ”.
To bring more sustainability and soundness in the overall health of the Bank, it is required to
exert utmost efforts to improve the financial health of the Bank, by utilizing the infrastructure,
brand image and reputation of the Bank.
Following observations/ suggestions are made to sustain the overall health of the bank at
excellent level: -
• Cost of fund should be reduced by introducing wide range of low cost liability products in
order to increase NIM.
• Dependency on inter-bank money market to be reduced by mobilizing more deposits.
• Sources of low cost deposit to be increased, instead of concentrating on a limited
number of persons/organizations to minimize the risk of withdrawal of big chunk of
deposit by them at any time.
• High cost deposit to be deployed in high yielding asset portfolio for matching cost with
the revenue.
• Quality of Front desk service of the Bank should be improved for Image building and
business growth.
• Core Risk Guidelines of CRM should be implemented properly in order to maintain Asset
quality at desired level. Special attention to be made for improvement of Treasury
Management in order to reduce ALM risk.
• Operational risk of the Bank may be reduced by employing skilled manpower as well as
by imparting need based training.
(This is a pro-forma Annual Health Report. All the banks are advised to customized this report
according to their business volume and operation technique except grading calculation.)
Page # 77
Annexure-D1
Health Grading Score Sheet
As on December 31, 20
Actual
i) Earning Success Parameter Range Assigned Value Score Obtained
Parameter
25% & Above 10
20%-25% 8
Operating Profit Growth
15%-20% 6
Below 15% 3
20% & Above 5
15%-19% 4
Net Interest Income Growth
10%-14% 3
Below 10% 2
40% & Above 5
30%-39% 4
Non-Interest Income Growth 0
20%-29% 3
Below 20% 2
2%-3% 5
Return on Asset (ROA) 1%-2% 4 0
Less than 1% 1
25% & Above 5
20%-24% 4
Return on Average Equity (ROAE) 0
15%-19% 3
Below 15% 1
Total Earning Success Score (out of 30) 0
II) Liquidity Health
Above 19% 2
CRR and SLR 19% 3 0
Bellow 19% 0
Above 85% 0
A-D Ratio and Interbank 80%-85% 2
Dependency 70%-79% 1.5
Below 70% 1
Total Liquidity Score (Out of 5) 0
III) Solvency
Above 10% 5
Core Capital to RWA ratio 7%-10% 4
0
(As per Basel-II) 4.5%-7% 3
Bellow 4.5% 0
Above 10% 3
Capital Adequacy Ratio 8%-10% 2
0
(As per Basel-II) 6%-8% 1
4%-6% 0
20% & Above 2
Growth of Capital/Shareholders'
10%-20% 1 0
Equity
Bellow 10% 0
Total Solvency Score (Out of 10) 0
Page # 78
Actual
IV) Deposit Health Parameter Range Assigned Value Score Obtained
Parameter
25%-30% 5
20%-24% 4
Deposit Growth 0
15%-19% 3
Less than 15% 2
100%-86% 1
Deposit Mix (% of High Cost 85%-71% 3
0
Deposit) 70%-56% 4
55%-31% 5
12%-14% 4
10%-12% 6
Cost of Fund 0
8%-10% 8
6%-8% 10
81%-100% 5
Core Deposit to Total Deposit 71%-80% 3 0
60%-70% 1
Total Deposit Score ( Out of 25) 0
V) Loans & Advances Health
25%-30% 5
20%-24% 4
Loans and Advance Growth 15%-19% 3
10%-14% 2
5%-<10% 1
Segment-wise Concentration 10%-15% 5
16%-20% 4
(% of concentration (LTR+PAD) to 0
21%-25% 3
total Loans and Advances)
Above 25% 2
Sectoral Diversification 25%-34% 5
( As a % of 35%-44% 4
45%-54% 3 0
Industraial/Manufacturing Loan to
Total Loans & Advances) Above 54% 2
Concentration of Loans Above 60% 2
56-60% 3
(Large Loan to Total Loans and #REF!
50-55% 4
Advances)
Below 50% 5
Asset Quality 5% & Above 2
3%-5% 6 0
(NPL Management)
0%-3% 10
Total Loans & Advances Score (Out of 30) #REF!
Page # 79
Health Grading Score Sheet
As on December 31, 20
Actual
i) Internal Control Health Parameter Range
Parameter
Assigned Value Score Obtained
90%-100% 100% 10
Implementation Status of Board of 70%-90% 8
Directors' decision 50%-70% 6
Bellow 50% 4
90%-100% 100% 10
Implementation status of Audit 70%-90% 8
Committee's decision 50%-70% 6
Bellow 50% 4
90%-100% 99% 10
Implementation Status of MANCOM 70%-90% 8
Decision 50%-70% 6
Bellow 50% 4
90%-100% 95% 10
Internal Audit
70%-90% 8
( % of Audit conducted to Estimated
Plan during the year) 50%-70% 6
Bellow 50% 4
90%-100% 97% 5
ALCO Meeting 70%-90% 4
(Action point Implementation status ) 50%-70% 3
Bellow 50% 2
90%-100% 98% 5
Weekly communication Meeting 70%-90% 4
(Action point Implementation status ) 50%-70% 3
Bellow 50% 2
Total Internal Control Health Score (Out of 50) 0
Actual
ii) Compliance Health Parameter Range
Parameter
Assigned Value Score Obtained
90%-100% 10
70%-90% 8
Implementation of Core risk Guideline
50%-70% 6
Bellow 50% 4
Above 10% 10
Basel-II Implementation Status
9%-10% 8
( % Eligible Capital to Risk weighted 0
Asset) 8%-9% 6
7%-8% 4
90%-100% 10
External Audit Compliance
70%-90% 8
( as a % of objections raised to 0
Compliance) 50%-70% 6
Bellow 50% 4
90%-100% 10
Bangladesh Bank Audits Compliance
70%-90% 8
(As a % of Objections raised to 0
Compliance) 50%-70% 6
Bellow 50% 4
90%-100% 5
Internal Audit Compliance 70%-90% 4
0
( % of objections raised to Compliance) 50%-70% 3
Bellow 50% 2
Strong 5
Medium 4
Good Governance 0
Partial 3
Poor 2
Total Compliance Health Score (Out of 50)
Total Score
Page # 80
Health Grading Score Sheet
As on December 31, 20
Image & ReputationHealth Parameter Range Achievement Assigned Value Score Achieved
High 20
Board Image Average 16 0
Satisfactory 10
High 20
Management Image Average 16 0
Satisfactory 10
Excellent 20
Very Good 16
Branding
Good 14
Satisfactory 12
BDT 20 million 10
CSR Activity
BDT 10-20 million 4
( Amount of Subscription and Donation)
Bellow BDT 10 million 2
Strongly Committed 10
Better Services to Customer Committed 9
No Stipulation 6
20 or more 0
11 to 19 5
Suits Filed by the Couterparties
5 to 10 8
0-4 10
Imposition of Penalties by Regulatory Yes 0
0
Bodies No 10
Total Image & Reputational Health Score (Out of 100) 0
Total Score 0
Page # 81
................... BANK LIMITED
Annexure-E
Branch Name:.........................................................................
DEPARTMENTAL CONTROL FUNCTION CHECKLIST (DCFCL) - "DAILY" FOR THE MONTH OF:
Initial
PROCESS FUNCTIONS Responsibility
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
Ensure
adequate
smoke detector
in branch
premises.
Quarterly
checking of
electrical wires
of the branch
by qualified
electrician.
Checking of
duty of security
guard by the
branch officials
during holiday.
Emergency
contact number
i.e. Police
station, Fire
station, RAB,
Hospital etc.
are available in
branch.
Ensure full Branch
compliance of Manager/
Compliance
MTB Dress Manager Branch
of CHO
code for the Operation
Instructions
employees of
the bank.
Page # 83
................... BANK LIMITED
Annexure-E
Branch Name:.........................................................................
DEPARTMENTAL CONTROL FUNCTION CHECKLIST (DCFCL) - "DAILY" FOR THE MONTH OF:
Initial
PROCESS FUNCTIONS Responsibility
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
Ensure full
compliance of
MTB
Compliance
Manual.
Ensure full
compliance of
MTB Winning
(Etiquette and
Service
Excellence
guideline for
employees).
Ensure full
compliance of
MTB Code of
Conduct.
Ensure full
compliance of
Customer
Acceptance
Policy.
Ensure full
compliance of
MTB Anti
Harassment
Policy.
Compliance Checking the Branch
of validity of Manager/
Regulatory Bank’s Manager Branch
Instructions License. operation
Page # 84
................... BANK LIMITED
Annexure-E
Branch Name:.........................................................................
DEPARTMENTAL CONTROL FUNCTION CHECKLIST (DCFCL) - "DAILY" FOR THE MONTH OF:
Initial
PROCESS FUNCTIONS Responsibility
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
Checking the
validity of all
insurance
policy of the
branch.
Compliance of
Bangladesh
Bank, Internal
and External
Audit and
Inspection
Report.
Notice
regarding
receiving and
exchanging of
torn & soiled
notes.
Notice
regarding
forged notes.
Display notice
regarding
cheque returns
for insufficient
fund.
Display leaflets
containing the
salient points
of AML and
CFT.
Page # 85
................... BANK LIMITED
Annexure-E
Branch Name:.........................................................................
DEPARTMENTAL CONTROL FUNCTION CHECKLIST (DCFCL) - "DAILY" FOR THE MONTH OF:
Initial
PROCESS FUNCTIONS Responsibility
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
Display up -to
date financial
statements
with highlights.
Display bank’s
interest rates
on various
deposit and
lending
products.
Maintain
complaint box
in a visible
place
Display up to
date schedule
of charges of
the bank.
Daily cash Dealing officer/s
received and Name & Design
payment made
including online
Cash In-
payment by
Cash in charge/DM
following CHO
hand Local instructions
Currency Review teller's
cash sheet with GB In-
evidence & charge/DM
registers.
Physical cash Cash In-charge
Page # 86
................... BANK LIMITED
Annexure-E
Branch Name:.........................................................................
DEPARTMENTAL CONTROL FUNCTION CHECKLIST (DCFCL) - "DAILY" FOR THE MONTH OF:
Initial
PROCESS FUNCTIONS Responsibility
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
balance to be
cross-checked
with daily cash
balance book,
GB In-
vault
charge/DM
register/vault
management
and tally with
affairs.
Ensure cash Cash In-charge
transaction and
cash holding of
the branch
within insured
limit of Cash in GB In-
Safe, Cash on charge/DM
Counter and
Cash in Transit
of the
Mutilated notes
separately kept
and recorded Cash In-charge
in the separate
register.
Fly leaf of the
branch is used
each and every Cash In-charge
bundle of
currency notes
Cash in Selling and Dealing officer/s
hand Buying of Name & Design
Page # 87
................... BANK LIMITED
Annexure-E
Branch Name:.........................................................................
DEPARTMENTAL CONTROL FUNCTION CHECKLIST (DCFCL) - "DAILY" FOR THE MONTH OF:
Initial
PROCESS FUNCTIONS Responsibility
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
Foreign Foreign
Currency Currency and
In-charge
recording in the
GB/FEX/DM
register under
dual control.
Physical cash Dealing officer/s
balance to be Name & Design
cross-checked
with daily cash
balance book,
vault GB In-
register/vault charge/DM
management
and tally with
affairs.
Loading of Dealing officer/s
cash in ATM Name & Design
after accessing
GB In-
previous
charge/DM
balance.
Maintenance of Dealing officer/s
corporate Name & Design
ATM
intranet based
GB In-
electronic
charge/DM
register.
Passing Dealing officer/s
necessary Name & Design
entries soon
GB In-
after loading
charge/DM
and unloading.
Prize Bond Prize bonds Dealing officer/s
are recorded Name & Design
Page # 88
................... BANK LIMITED
Annexure-E
Branch Name:.........................................................................
DEPARTMENTAL CONTROL FUNCTION CHECKLIST (DCFCL) - "DAILY" FOR THE MONTH OF:
Initial
PROCESS FUNCTIONS Responsibility
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
mentioning the
GB In-
number in the
charge/DM
register/sheet
Checking of Dealing officer/s
physical stock Name & Design
with GL and
GB In-
prize bond
charge/DM
register.
Ensure Dealing officer/s
preparation of Name & Design
statement by
mentioning the
serial number
of unsold prize
bond by a
responsible
GB In-
Officer other
charge/DM
than the In-
charge of prize
bond before
and after end
of each draw
result.
Confirm
Purchase and
sale/consumpti
on of stamps
Stamps in are recorded Dealing officer/s
and denomination Name & Design
wise in the
register under
dual control
Page # 89
................... BANK LIMITED
Annexure-E
Branch Name:.........................................................................
DEPARTMENTAL CONTROL FUNCTION CHECKLIST (DCFCL) - "DAILY" FOR THE MONTH OF:
Initial
PROCESS FUNCTIONS Responsibility
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
and register is
checked by the GB In-
authorized charge/DM
Officer.
Physical Dealing officer/s
verification of Name & Design
stamps in hand
GB In-
with GL and
charge/DM
register.
Receiving and Dealing officer/s
recording of SP Name & Design
block from
GB In-
feeding
charge/DM
branch/BB.
Selling of Dealing officer/s
Sanchaypatra Name & Design
and
GB In-
encashment of
charge/DM
SP.
Claiming Dealing officer/s
Sanchaypatr
reimbursement Name & Design
a
against
GB In-
encashment
charge/DM
SP in time.
Physical Dealing officer/s
verification of Name & Design
SP block with
SP stock
register and GB In-
validation of charge/DM
above
transactions.
Account Opening of Dealing officer/s
opening various deposit Name & Design
Page # 90
................... BANK LIMITED
Annexure-E
Branch Name:.........................................................................
DEPARTMENTAL CONTROL FUNCTION CHECKLIST (DCFCL) - "DAILY" FOR THE MONTH OF:
Initial
PROCESS FUNCTIONS Responsibility
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
activities accounts by
following
applicable
rules and
regulations,
preserving the
same and GB In-
loading charge/DM/BM
information in
Flora System
with due
approval of
Branch
Manager.
Contact Point Dealing officer/s
Verification Name & Design
(CPV) to be
done as per GB In-
CHO charge/DM/BM
instructions.
Sending thanks Dealing officer/s
letter at time of Name & Design
opening new
deposits
account and
sending Half
Yearly Balance
GB In-
Confirmation
charge/DM/BM
Certificate as
per BRPD
circular of
Bangladesh
Bank.
Page # 91
................... BANK LIMITED
Annexure-E
Branch Name:.........................................................................
DEPARTMENTAL CONTROL FUNCTION CHECKLIST (DCFCL) - "DAILY" FOR THE MONTH OF:
Initial
PROCESS FUNCTIONS Responsibility
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
Page # 92
................... BANK LIMITED
Annexure-E
Branch Name:.........................................................................
DEPARTMENTAL CONTROL FUNCTION CHECKLIST (DCFCL) - "DAILY" FOR THE MONTH OF:
Initial
PROCESS FUNCTIONS Responsibility
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
to CHO under
dual control,
receiving &
recording the
same in the
system under
GB In-
dual control
charge/DM/BM
and delivery to
the respective
account holder
with due
acknowledgem
ent.
Physical Dealing officer/s
verification of Name & Design
undelivered
cheque books GB In-
is to be done charge/DM/BM
by dually.
Requisition of Dealing officer/s
printing and Name & Design
security
stationery to
CHO under
Printing
dual control,
stationery
receiving,
and Security GB In-
issue/consump
stationery charge/DM/BM
tion of the
(FDR, PO,
same is duly
PS)
recorded in the
register under
dual control.
Physical Dealing officer/s
verification of Name & Design
Page # 93
................... BANK LIMITED
Annexure-E
Branch Name:.........................................................................
DEPARTMENTAL CONTROL FUNCTION CHECKLIST (DCFCL) - "DAILY" FOR THE MONTH OF:
Initial
PROCESS FUNCTIONS Responsibility
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
stock with GL
and register to
GB In-
be done dually
charge/DM/BM
at the end of
month.
Maintaining of Dealing officer/s
locker register Name & Design
and attendance
GB In-
register under
charge/DM/BM
dual control.
Maintaining of Dealing officer/s
Master keys of Name & Design
locker under
GB In-
Locker dual
charge/DM/BM
Account custodians.
Realization of Dealing officer/s
security Name & Design
deposit, locker
rent and
insurance GB In-
premium as charge/DM/BM
per CHO
instructions.
Standing/ Maintenance of Dealing officer/s
Stop standing Name & Design
Payment instructions file
instructions and recording
GB In-
the same in the
charge/DM/BM
register under
dual control.
Marking / Dealing officer/s
loading the Name & Design
Page # 94
................... BANK LIMITED
Annexure-E
Branch Name:.........................................................................
DEPARTMENTAL CONTROL FUNCTION CHECKLIST (DCFCL) - "DAILY" FOR THE MONTH OF:
Initial
PROCESS FUNCTIONS Responsibility
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
information in
the Flora GB In-
system under charge/DM/BM
dual control
Receiving of Dealing officer/s
application for Name & Design
issuance of
Card from the
client and
GB In-
forwarded to
charge/DM/BM
Card Division,
CHO for
Debit Card approval.
and Credit Receiving and Dealing officer/s
Card recording of Name & Design
(fresh and cards and
renewal) distribute to the
GB In-
customer
charge/DM/BM
under dual
control.
Maintaining of Dealing officer/s
undelivered Name & Design
card and Pin
GB In-
by separate
charge/DM/BM
custodian.
Bangladesh Scanning
Automated image of Dealing officer/s
Clearing received Name & Design
House instruments.
Page # 95
................... BANK LIMITED
Annexure-E
Branch Name:.........................................................................
DEPARTMENTAL CONTROL FUNCTION CHECKLIST (DCFCL) - "DAILY" FOR THE MONTH OF:
Initial
PROCESS FUNCTIONS Responsibility
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
(BACH) Posting of
cheque series,
Outward routing
number,
account
number,
transaction
number and
amount of the
instruments.
Marking of
BACH in High
value and
regular value.
Release
reprocess to
Central
Clearing
Department
(CCD).
Checking
settlement
position of
BACH.
Inform returned
instruments
information to
the client.
Validation of
GB In-
above activities
charge/DM/BM
by Supervisor
Page # 96
................... BANK LIMITED
Annexure-E
Branch Name:.........................................................................
DEPARTMENTAL CONTROL FUNCTION CHECKLIST (DCFCL) - "DAILY" FOR THE MONTH OF:
Initial
PROCESS FUNCTIONS Responsibility
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
BACH
delegation
(receiving and
printing).
Scrutiny of
BACH
(checking of
cheque series,
routing
number,
account
number,
Bangladesh transaction
Automated number,
Clearing amount of the
House instruments, Dealing officer/s
(BACH) manual and Name & Design
electronic
Inward: endorsement
of both high
value and
regular value
instruments)
Accepting of
instruments.
Debit customer
account upon
getting positive
payment
advice from the
customer in
case of need.
Page # 97
................... BANK LIMITED
Annexure-E
Branch Name:.........................................................................
DEPARTMENTAL CONTROL FUNCTION CHECKLIST (DCFCL) - "DAILY" FOR THE MONTH OF:
Initial
PROCESS FUNCTIONS Responsibility
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
Validation of
GB In-
above activities
charge/DM/BM
by Supervisor
Receiving of
instruments,
recording in the
register and
sending of
instruments for
collection
under dual
control.
Dealing officer/s
Passing
Outward bill Name & Design
lodgment and
for collection
reversal of
(OBC)
contra entries
in the system.
Inform return
information of
instruments (if
any) to the
client.
Validation of
GB In-
above activities
charge/DM/BM
by Supervisor
Receiving and
Inward bill
recording in the Dealing officer/s
for collection
register under Name & Design
(IBC)
dual control.
Page # 98
................... BANK LIMITED
Annexure-E
Branch Name:.........................................................................
DEPARTMENTAL CONTROL FUNCTION CHECKLIST (DCFCL) - "DAILY" FOR THE MONTH OF:
Initial
PROCESS FUNCTIONS Responsibility
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
Scrutiny and
payment the
same under
dual control
upon
complying
relevant policy
and procedure
of the bank.
Validation of
GB In-
above activities
charge/DM/BM
by Supervisor.
Issuance and
encashment of
Pay Order, Pay
Slip and
Demand Draft
upon
complying
relevant policy
and procedure Dealing officer/s
of the bank and Name & Design
Bills and
recording the
Remittance
same in the
register under
dual control.
Balancing the
leaf of security
blocks on
regularly basis.
Validation of
GB In-
above activities
charge/DM/BM
by Supervisor.
Page # 99
................... BANK LIMITED
Annexure-E
Branch Name:.........................................................................
DEPARTMENTAL CONTROL FUNCTION CHECKLIST (DCFCL) - "DAILY" FOR THE MONTH OF:
Initial
PROCESS FUNCTIONS Responsibility
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
Page # 100
................... BANK LIMITED
Annexure-E
Branch Name:.........................................................................
DEPARTMENTAL CONTROL FUNCTION CHECKLIST (DCFCL) - "DAILY" FOR THE MONTH OF:
Initial
PROCESS FUNCTIONS Responsibility
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
of all the
mandatory
outputs of daily
transactions
(Statement of
In-charge all
Affairs, Back
department
page of affairs,
/DM/BM
Audit trail
report,
Transaction
list/Supplement
ary sheet etc.)
Balancing of Dealing officer/s
ledgers and Name & Design
books of In-charge all
accounts department
regularly. /DM/BM
Charging of Dealing officer/s
interest, Name & Design
service charge
GB In-
and
charge/DM/BM
depreciation.
Realization of Dealing officer/s
VAT and AIT Name & Design
as per
instructions of
GB In-
concerned
charge/DM/BM
Government
office.
Interest paid to Dealing officer/s
deposit Name & Design
account. GB In-
charge/DM/BM
Page # 101
................... BANK LIMITED
Annexure-E
Branch Name:.........................................................................
DEPARTMENTAL CONTROL FUNCTION CHECKLIST (DCFCL) - "DAILY" FOR THE MONTH OF:
Initial
PROCESS FUNCTIONS Responsibility
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
Page # 103
................... BANK LIMITED
Annexure-E
Branch Name:.........................................................................
DEPARTMENTAL CONTROL FUNCTION CHECKLIST (DCFCL) - "DAILY" FOR THE MONTH OF:
Initial
PROCESS FUNCTIONS Responsibility
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
Page # 105
................... BANK LIMITED
Annexure-E
Branch Name:.........................................................................
DEPARTMENTAL CONTROL FUNCTION CHECKLIST (DCFCL) - "DAILY" FOR THE MONTH OF:
Initial
PROCESS FUNCTIONS Responsibility
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
Page # 106
................... BANK LIMITED
Annexure-E
Branch Name:.........................................................................
DEPARTMENTAL CONTROL FUNCTION CHECKLIST (DCFCL) - "DAILY" FOR THE MONTH OF:
Initial
PROCESS FUNCTIONS Responsibility
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
Credit Obtaining
approvals for credit
trade approvals for
Dealing officer/s
transactions trade
Name & Design
transactions by
MITS
Relationship
Manager (RM)
Loan Opening loan Dealing officer/s
account account and Name & Design
opening and loading of loan
limit loading limit after
Relationship
complete
Manager (RM)
proper LDCL
formalities.
Receiving Transaction Dealing officer/s
Transaction request of Name & Design
request of a customers
customer forwarded to
the respective
MITS Centre Relationship
through Manager (RM)
tracking
system or
courier.
Page # 107
................... BANK LIMITED
Annexure-E
Branch Name:.........................................................................
DEPARTMENTAL CONTROL FUNCTION CHECKLIST (DCFCL) - "DAILY" FOR THE MONTH OF:
Initial
PROCESS FUNCTIONS Responsibility
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
Page # 108
................... BANK LIMITED
Annexure-E
Branch Name:.........................................................................
DEPARTMENTAL CONTROL FUNCTION CHECKLIST (DCFCL) - "DAILY" FOR THE MONTH OF:
Initial
PROCESS FUNCTIONS Responsibility
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
communicates
with concern
MITS
centre/sub-
centre well
ahead of time.
Page # 109
................... BANK LIMITED
Annexure-E
Branch Name:.........................................................................
DEPARTMENTAL CONTROL FUNCTION CHECKLIST (DCFCL) - "DAILY" FOR THE MONTH OF:
Initial
PROCESS FUNCTIONS Responsibility
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
Page # 110
................... BANK LIMITED
Annexure-E
Branch Name:.........................................................................
DEPARTMENTAL CONTROL FUNCTION CHECKLIST (DCFCL) - "DAILY" FOR THE MONTH OF:
Initial
PROCESS FUNCTIONS Responsibility
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
Page # 111
................... BANK LIMITED
Annexure-E
Branch Name:.........................................................................
DEPARTMENTAL CONTROL FUNCTION CHECKLIST (DCFCL) - "DAILY" FOR THE MONTH OF:
Initial
PROCESS FUNCTIONS Responsibility
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
Register information of
the file and
provides with a
copy of the
related
documents to Relationship
MITS centre Manager (RM)
/sub centre.
[Master file of
the customer
maintained at
branch level]
Claiming Cash Dealing officer/s
Incentive to BB Name & Design
through CHO
and paid to
client by
Relationship
following all
Manager (RM)
applicable
rules and
regulations.
Cash Ensure Dealing officer/s
Incentive accurate cash Name & Design
and Duty incentive
Relationship
Draw back calculation
Manager (RM)
sheet.
Collecting PRC Dealing officer/s
and other Name & Design
related
certificates/doc Relationship
uments from Manager (RM)
MITS.
Ensuring Dealing officer/s
timely Name & Design
Page # 112
................... BANK LIMITED
Annexure-E
Branch Name:.........................................................................
DEPARTMENTAL CONTROL FUNCTION CHECKLIST (DCFCL) - "DAILY" FOR THE MONTH OF:
Initial
PROCESS FUNCTIONS Responsibility
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
submission of Relationship
reporting. Manager (RM)
Central Submission of Dealing officer/s
Payment Payment Name & Design
Unit(CPU) Instructions
(PI) and
Reimbursemen Relationship
t Manager (RM)
Authorizations
(RA).
Statement Timely Dealing officer/s
/Return submission of Name & Design
/Reporting all statement &
returns to
regulatory
bodies
Relationship
including
Manager (RM)
Bangladesh
bank &
Corporate
Head office
Trade Finance and Foreign Exchange Transactions at Branch Level:
related papers
FEX In-
and
charge/DM/BM
documents.
Compliance of Dealing officer/s
other terms and Name & Design
conditions as
stipulated in FEX In-
CHO sanction charge/DM/BM
letter.
L/C opened by Dealing officer/s
obtaining Name & Design
buyers’/supplier
s’ credit report FEX In-
(where charge/DM/BM
applicable)
Importer’s Dealing officer/s
signature Name & Design
verified by the
concerned
branch officials
of the branch in FEX In-
Pro-forma charge/DM/BM
Invoice /Indent
/ LC application
form etc.
Original Dealing officer/s
shipping Name & Design
documents/
import
documents FEX In-
keeping until charge/DM/BM
liability
adjusted.
Page # 114
................... BANK LIMITED
Annexure-E
Branch Name:.........................................................................
DEPARTMENTAL CONTROL FUNCTION CHECKLIST (DCFCL) - "DAILY" FOR THE MONTH OF:
Initial
PROCESS FUNCTIONS Responsibility
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
Page # 115
................... BANK LIMITED
Annexure-E
Branch Name:.........................................................................
DEPARTMENTAL CONTROL FUNCTION CHECKLIST (DCFCL) - "DAILY" FOR THE MONTH OF:
Initial
PROCESS FUNCTIONS Responsibility
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
Page # 117
................... BANK LIMITED
Annexure-E
Branch Name:.........................................................................
DEPARTMENTAL CONTROL FUNCTION CHECKLIST (DCFCL) - "DAILY" FOR THE MONTH OF:
Initial
PROCESS FUNCTIONS Responsibility
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
Note: According to the nature of activities of the branches and offices of the bank the DCFCLs may be customized.
Page # 119
........................ BANK LIMITED Annexure-E
Branch Name:.........................................................................
DEPARTMENTAL CONTROL FUNCTION CHECKLIST (DCFCL) - "WEEKLY" FOR THE MONTH OF:
1st WEEK 2nd WEEK 3rd WEEK 4th WEEK 5th WEEK
PROCESS FUNCTIONS Responsibility
Initial Date Initial Date Initial Date Initial Date Initial Date
Overall Ensure proper cleanliness of the
Cleanliness of branch premises as per CHO
Branch Manager
the branch instructions.
premises
Attendance of Ensure timely attendance of all
the branch employees of the branch. Branch Manager
employees
Ensure 24 hours duty of security
guard.
Ensure duty of Gun man during
office hour.
Ensure CC TV coverage for 24
hours.
Ensure adequate Fire
Extinguisher in branch premises.
Ensure generator back up during
Branch
Safety , office hour.
Manager/
Security Testing of security alarm of the
Manager Branch
measures and branch.
Operation
premises Ensure adequate smoke
protection detector in branch premises.
Quarterly checking of electrical
wires of the branch by qualified
electrician.
Checking of duty of security
guard by the branch officials
during holiday.
Emergency contact number i.e.
Police station, Fire station, RAB,
Hospital etc. are available in
branch.
Compliance of Ensure full compliance of MTB Branch
CHO Dress code for the employees of Manager/
Instructions the bank. Manager Branch
Page # 120
........................ BANK LIMITED Annexure-E
Branch Name:.........................................................................
DEPARTMENTAL CONTROL FUNCTION CHECKLIST (DCFCL) - "WEEKLY" FOR THE MONTH OF:
1st WEEK 2nd WEEK 3rd WEEK 4th WEEK 5th WEEK
PROCESS FUNCTIONS Responsibility
Initial Date Initial Date Initial Date Initial Date Initial Date
Ensure full compliance of MTB Operation
Compliance Manual.
Ensure full compliance of MTB
Winning (Etiquette and Service
Excellence guideline for
employees).
Ensure full compliance of MTB
Code of Conduct.
Ensure full compliance of
Customer Acceptance Policy.
Ensure full compliance of MTB
Anti Harassment Policy.
Checking the validity of Bank’s
License.
Checking the validity of all
insurance policy of the branch.
Compliance of Bangladesh
Bank, Internal and External Audit
and Inspection Report.
Notice regarding receiving and
exchanging of torn & soiled
notes.
Branch
Compliance of Notice regarding forged notes. Manager/
Regulatory
Display notice regarding cheque Manager Branch
Instructions
returns for insufficient fund. operation
Display leaflets containing the
salient points of AML and CFT.
Display up -to date financial
statements with highlights.
Display bank’s interest rates on
various deposit and lending
products.
Maintain complaint box in a
visible place
Page # 121
........................ BANK LIMITED Annexure-E
Branch Name:.........................................................................
DEPARTMENTAL CONTROL FUNCTION CHECKLIST (DCFCL) - "WEEKLY" FOR THE MONTH OF:
1st WEEK 2nd WEEK 3rd WEEK 4th WEEK 5th WEEK
PROCESS FUNCTIONS Responsibility
Initial Date Initial Date Initial Date Initial Date Initial Date
Display up to date schedule of
charges of the bank.
Opening of various deposit
accounts by following applicable
rules and regulations,
preserving the same and loading Branch Manager
Account information in Flora System with
opening due approval of Branch
activities Manager.
Contact Point Verification (CPV)
to be done as per CHO Branch Manager
instructions.
Locker Account Realization of security deposit, GB In-
locker rent and insurance charge/DM/BM
premium as per CHO
instructions.
Bills and Balancing the leaf of security GB In-
Remittance blocks on regularly basis. charge/DM/BM
Reconciliation Reconciliation of online GL
transaction with other branches
GB In-
and CHO has been done upon
charge/DM/BM
complying relevant policy and
procedure of the bank.
Reconciliation of balance of
GB In-
deposit account maintained with
charge/DM/BM
other bank.
Outward bill for Inform return information of
GB In-
collection instruments (if any) to the client.
charge/DM/BM
(OBC)
Reports/ Ensure submission of weekly
Returns reports to CHO and regulatory Branch Manager
/Statements bodies and preserved in the file.
Page # 122
........................ BANK LIMITED Annexure-E
Branch Name:.........................................................................
DEPARTMENTAL CONTROL FUNCTION CHECKLIST (DCFCL) - "WEEKLY" FOR THE MONTH OF:
1st WEEK 2nd WEEK 3rd WEEK 4th WEEK 5th WEEK
PROCESS FUNCTIONS Responsibility
Initial Date Initial Date Initial Date Initial Date Initial Date
Credit 1.CIB reporting
Operations 2. Execution required papers
and documents as per CHO
sanction.
3. Maintain safe-in and safe-out Branch Manager
register under dual control.
4. Maintain due date diary for
insurance and SRO token of the
branch.
Monitoring, 1. Follow up the overdue and
follow up and NPL loans regularly.
supervision 2. Monitoring, supervision and
follow up of all court cases (if
any).
3. Ensure timely renewal of Branch Manager
loans.
4. Rescheduling of classified
loan accounts (if any) as per
BRPD circular of BB.
5. Prepare of CL Statements as
per BRPD circular of BB.
Returns , Prepare weekly returns as per Credit In-charge
statements and CHO and B. Bank guidelines. /BM
reporting
Note: According to the nature of activities of the branches and offices of the bank the DCFCLs may be customized.
Page # 123
................ BANK LIMITED Annexure-E
Branch Name:.........................................................................
DEPARTMENTAL CONTROL FUNCTION CHECKLIST (DCFCL) - "MONTHLY" FOR THE MONTH OF:
Date of
PROCESS FUNCTIONS Responsibility Initial
Checking
Overall Cleanliness Ensure proper cleanliness of the branch
of the branch premises as per CHO instructions. Branch Manager
premises
Attendance of the Ensure timely attendance of all
employees of the branch. Branch Manager
branch employees
Ensure 24 hours duty of security guard.
Ensure duty of Gun man during office
hour.
Ensure CC TV coverage for 24 hours.
Page # 125
................ BANK LIMITED Annexure-E
Branch Name:.........................................................................
DEPARTMENTAL CONTROL FUNCTION CHECKLIST (DCFCL) - "MONTHLY" FOR THE MONTH OF:
Date of
PROCESS FUNCTIONS Responsibility Initial
Checking
Monitoring, follow 1.Follow up the overdue and NPL loans
up and supervision regularly.
2. Monitoring, supervision and follow up
of all court cases (if any).
3. Ensure timely renewal of loans. Branch Manager
4. Rescheduling of classified loan
accounts (if any) as per BRPD circular
of BB.
5. Prepare of CL Statements as per
BRPD circular of BB.
1. Upload ISS Reporting Format from
Bangladesh Bank’s Web Portal
2. Collect the relevant information for
ISS Reporting and correctly fill up
the fields of ISS Reporting
Concerned ISS
Integrated 3. Get the report checked by the
Reporting
Supervision concerned officials
Official(s)
System (ISS) 4. Submit the same to the Manager for
Reporting confirmation and upload in the
Bangladesh Bank’s Web Portal on
th
or before 10 of the following
month..
1. Check the Integrated Supervision
System (ISS) of the branch.
2. Deficiency, if detected report to
concerned division/department of CHO.
Branch Manager
3. Upload the Integrated Supervision
System (ISS) Report to Bangladesh
Bank’s Web Portal and submit back-up
copy (Excel Sheet) to Group ICC within
th
10 of the following month.
Returns , Prepare monthly returns as per CHO Credit In-charge
statements and and B. Bank guidelines. /BM
reporting
Note: According to the nature of activities of the branches and offices of the bank the DCFCLs may be customized.
Page # 126
...................... BANK LIMITED Annexure-E
Branch Name:.........................................................................
DEPARTMENTAL CONTROL FUNCTION CHECKLIST (DCFCL) - "QUARTERLY" FOR THE QUARTER ENDED ON:
1st quarter 2nd quarter 3rd quarter 4th quarter
PROCESS FUNCTIONS Responsibility
Date Initial Date Initial Date Initial Date Initial
Overall Ensure proper cleanliness of the
Cleanliness of branch premises as per CHO
Branch Manager
the branch instructions.
premises
Attendance of Ensure timely attendance of all
the branch employees of the branch. Branch Manager
employees
Ensure 24 hours duty of security
guard.
Ensure duty of Gun man during
office hour.
Ensure CC TV coverage for 24
hours.
Ensure adequate Fire
Extinguisher in branch premises.
Ensure generator back up during
Branch
Safety , office hour.
Manager/
Security Testing of security alarm of the
Manager Branch
measures and branch.
Operation
premises Ensure adequate smoke
protection detector in branch premises.
Quarterly checking of electrical
wires of the branch by qualified
electrician.
Checking of duty of security
guard by the branch officials
during holiday.
Emergency contact number i.e.
Police station, Fire station, RAB,
Hospital etc. are available in
branch.
Compliance of Ensure full compliance of MTB Branch
CHO Dress code for the employees of Manager/
Instructions the bank. Manager Branch
Page # 127
...................... BANK LIMITED Annexure-E
Branch Name:.........................................................................
DEPARTMENTAL CONTROL FUNCTION CHECKLIST (DCFCL) - "QUARTERLY" FOR THE QUARTER ENDED ON:
1st quarter 2nd quarter 3rd quarter 4th quarter
PROCESS FUNCTIONS Responsibility
Date Initial Date Initial Date Initial Date Initial
Ensure full compliance of MTB Operation
Compliance Manual.
Ensure full compliance of MTB
Winning (Etiquette and Service
Excellence guideline for
employees).
Ensure full compliance of MTB
Code of Conduct.
Ensure full compliance of
Customer Acceptance Policy.
Ensure full compliance of MTB
Anti Harassment Policy.
Checking the validity of Bank’s
License.
Checking the validity of all
insurance policy of the branch.
Compliance of Bangladesh
Bank, Internal and External Audit
and Inspection Report.
Notice regarding receiving and
exchanging of torn & soiled
notes.
Branch
Compliance of Notice regarding forged notes.
Manager/
Regulatory
Instructions Display notice regarding cheque Manager Branch
returns for insufficient fund. operation
Display leaflets containing the
salient points of AML and CFT.
Display up -to date financial
statements with highlights.
Display bank’s interest rates on
various deposit and lending
products.
Maintain complaint box in a
visible place
Page # 128
...................... BANK LIMITED Annexure-E
Branch Name:.........................................................................
DEPARTMENTAL CONTROL FUNCTION CHECKLIST (DCFCL) - "QUARTERLY" FOR THE QUARTER ENDED ON:
1st quarter 2nd quarter 3rd quarter 4th quarter
PROCESS FUNCTIONS Responsibility
Date Initial Date Initial Date Initial Date Initial
Display up to date schedule of
charges of the bank.
Account Opening of various deposit Branch Manager
opening accounts by following applicable
activities rules and regulations,
preserving the same and loading
information in Flora System with
due approval of Branch
Manager.
Contact Point Verification (CPV) Branch Manager
to be done as per CHO
instructions.
Reconciliation of online GL
transaction with other branches
GB In-
and CHO has been done upon
charge/DM/BM
complying relevant policy and
Reconciliation
procedure of the bank.
Reconciliation of balance of
GB In-
deposit account maintained with
charge/DM/BM
other bank.
Reports/ Ensure submission of quarterly
Returns reports to CHO and Regulatory Branch Manager
/Statements bodies and preserved in the file.
Page # 129
...................... BANK LIMITED Annexure-E
Branch Name:.........................................................................
DEPARTMENTAL CONTROL FUNCTION CHECKLIST (DCFCL) - "QUARTERLY" FOR THE QUARTER ENDED ON:
1st quarter 2nd quarter 3rd quarter 4th quarter
PROCESS FUNCTIONS Responsibility
Date Initial Date Initial Date Initial Date Initial
Monitoring, 1.Follow up the overdue and
follow up and NPL loans regularly.
supervision 2.Monitoring, supervision and
follow up of all court cases (if
any).
3.Ensure timely renewal of Branch Manager
loans.
4.Rescheduling of classified loan
accounts (if any) as per BRPD
circular of BB.
5.Prepare of CL Statements as
per BRPD circular of BB.
Self 1. Check the internal control
Assessment of system of the branch.
Anti- Fraud 2. Deficiency, if detected report
Internal Control to concerned
division/department of CHO. Branch Manager
3. Submit Self Assessment of
Anti-Fraud Internal Control
th
Report to Group ICC within 10
of the months of the quarter
ended.
Prepare periodic returns as per
CHO and B. Bank guidelines i.e.
Quarterly CIB, CL & CIB
Returns ,
reconciliation, Industrial Term Credit In-charge
statements and
Loan Statement, quarterly SME /BM
reporting
statement, quarterly Agro based
Industry statement, CL returns,
MCR under BASEL II, etc.
Note: According to the nature of activities of the branches and offices of the bank the DCFCLs may be customized.
Page # 130
Annexure-F
Quarterly Operations Report
For the quarter ended on ……………
REF. :
DATE :
FROM : Branch Manager
TO : The Head of Operations.
COPY : Head of Internal Control & Compliance
1. Regulatory Compliance:
We confirm that regulatory requirements as outlined by other than BB have been complied with except
the following(s):
2. Internal Control:
The Branch’s operational functions were also last audited by the Audit & Inspection Team of Internal
Control & Compliance Unit on………….. We confirm that adequate corrective actions have been initiated
to remove the deficiencies other than the following paras of the report.
3. Closed Circuit Television (CCTV): ( This para will be used if branches are having CCTV’s at their
premises)
We confirm that operations and recording of day’s activities in CCTV installed in the branches and ATM’s
where applicable have been checked regularly. The recorded cassettes are being controlled as per
instructions from the HO office.
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Annexure-F
4. Computer Access: ( if available)
a. We confirm that a full review of “Access Levels” is made to ensure that no conflicts exist and no
official is holding both IDs to input transactions and Authorise such transactions.
b. We also confirm that Administrator Passwords are held in dual custody and the both custodians
review the Administrator Journal Report and the Audit Trail Report (which reports all user access
maintenance) and investigate all activities on a daily basis.
The Customer Services Standards of all departments have been checked and documented as per
guidelines from Head Office. The shortfalls detected during the last quarter have been/will be removed
within the target set.
a. The DCFCLs were completed and documented as per Head Office Guidelines by the concerned
departments which are being/have been verified by the designated independent officials on
_______
b. We confirm that no shortfalls have been identified by the Independent Reviewer and/or the
shortfalls identified by him/her are being rectified and will be completed by __________________
under advice to Head of Compliance.
7. Internal Checks:
We confirm that all Internal Checks as per Head Office Guidelines applicable to us are being undertaken
by the Independent officials designated in writing. All papers and the reviewer’s certificates are retained
under the control of the Unit Head/Branch Manager/Designated official for future review by the
Bangladesh Bank Inspection Team/ Internal Control Team.
We confirm that a copy of the “Loan Documentation Checklist” for all Loans/Advances is being sent to the
Internal Control Team, Head office for review. Exceptions/discrepancies in documentations are being
regularized within targets dates provided in the Checklist.
9. Treasury/ID Operations:
We confirm that all required processes related to Treasury Operations/ID (e.g. LC Opening, Export-
Import Documentation, Foreign Remittance Documentation etc.) have been duly completed by the
designated officer(s). All papers/documents are retained under the control of the Unit Head/Branch
Manager/Designated official for future review by the Bangladesh Bank Inspection Team/ Internal Control
Team.
10. Complaints:
We confirm that complaint letters received from Customers were dealt with in terms of Head office
guidelines. All complaints in the form of statement including pending complaints of previous quarter have
been forwarded to Complaint Cell at Head Office for their review.
We confirm that the costs of telex/swift/telegrams/telephone/fax and other charges have been recovered
from the Customers/Correspondents where applicable and credited to the appropriate Recoveries
Accounts under Expenses Head.
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Annexure-F
11. Frauds, Forgeries & Operating Losses:
12. Returns:
We confirm that returns to Head Office / Bangladesh Bank including those under Calendar of Returns
have been submitted within the schedule dates except the following:
13. Legal:
We confirm that legal matters are being monitored by us as per Head Office / Internal Control Units.
Return for this quarter has been submitted to Internal Control department on …………………….
14. Communications:
Following meetings were held during this quarter to improve communication among the members of
Officer/Staff. We enclose a copy of the minutes of the meetings held for information and record.
We confirm that:
a. All items of Fixed Assets deployed to the branch have been included in the respective
departmental lists and physical check of all departmental Fixed Assets has been undertaken and
verified with the departmental inventories.
b. The entries passed through Profit and Loss A/c in respect of sale of Fixed Assets for the half
year ended ………………… have been reviewed to ensure that no entry is outstanding in the
books .
c. Returns as on ……………………… showing the Fixed Assets sold during the quarter have been
prepared & reviewed for tax purposes.
PROTECTION OF VALUABLES
1. Change of Keys:
We confirm that the Key Register is being maintained as per prescribed procedure and keys were lastly
changed with the duplicates on _________________
2. Safe Custody:
Page # 133
Annexure-F
We confirm that Safe Custody items are being maintained under dual custody and the last complete
independent physical verification of Safe Custody items as per Head Office instruction was undertaken
on __________. We enclose a copy of the certificate received from the designated reviewer(s).
3. Safe Deposit Lockers: (Applicable to the branches where lockers are installed)
We confirm that keys to unrented lockers are kept in sealed envelopes under dual control and spare
locks and surrendered keys pending change of locks and keys are controlled by two independent
custodians who have no access to locker custodian’s key(s)
We also confirm that Semi-Annual and Annual Internal Checks are conducted at the prescribed
frequencies and by the independent designated officials.
_____________ _____________
CUSTODIAN – 1 CUSTODIAN – 2
4. Controlled/Security Stationery:
All Controlled Stationery are being kept under dual custody and Bulk/Working Stocks are being verified
as per instructions from Head Office.
5. Test Keys:
6. Signature Books:
All signature books of branches & correspondent banks are being maintained as per requirements.
7. CASH/TC/SPS ETC. :
Cash(LC & FC)/TCs/Prize Bonds / Foreign Monies / Sanchaya Patras / Wage Earners’ Development
Bonds are being dealt with as per requirements – Physical verifications also being carried out at the
frequencies prescribed.
1. Computers: Physically checked and found in order. If there is anything to report should be prescribed.
3. Computer Logs and others: Checked as described in the ICT Guideline of the Bank.
PROOFS/ VERIFICATIONS
1. All accounts in GL/ Subsidiary ledger were proved and verified during the quarter except the following
accounts.
We confirm that all outstanding entries in General Suspense (Assets & Liabilities) are being followed up
for early liquidation. We enclose the statements of General Suspense Accounts as
on…………………….. for your perusal.
Page # 134
Annexure-F
2. Difference Accounts:
We enclose a summary showing the outstanding in Difference Accounts. The entries relating to
differences are being investigated. All unresolved entries will be adjusted in terms of approval of Head
Office.
1. Following transfers/movements were affected during the quarter (both Officers and Non-officers).
LEAVE PROGRAMMES
1. Officers/staff are being granted leave as per annual leave programme. (Exception are given below):
2. Arrangements have been made to allow all employees including Management Staff to avail of 15 days
uninterrupted leave or half of annual leave entitlement, whichever is the lesser in terms of service rules.
TRAINING PROGRAMME
Following Officers / staff are undergoing training / have undergone training during the quarter
PREMISES MANAGEMENT
1. Fire/Safety Standards:
a) Following items have been checked during the quarter ended March/June/September/December
_________.
i)
ii)
iii)
iv)
b. Half-yearly Self Audit of Fire/Safety Standards was undertaken and the return submitted to you
for the period ended …………………. by a separate letter on ……….
c. We confirm that:
Page # 135
Annexure-F
i) Fire Drill was carried out half-yearly on ……….. and ……… in terms of Emergency
Evacuation Standards of Fire / Safety procedures.
ii) Security Drill was carried out regarding Audible Tellers Counter Alarm Protective System
and documented.
iii) Recording of the arrival and departure time of all personnel occupying the premises
outside working hours and after banking hours are being documented/reviewed on the
Registers maintained for these purposes.
b. The premises were inspected on holidays by the officers on rotation. Immediate action was
taken on shortfalls detected through the checklist maintained which is retained after taking
appropriate action as applicable for future audit/inspection.
We confirm that regulatory requirements in Bangladesh as outlined by Bangladesh Bank / other Govt
Body have been complied with except the following:
Inclusion Banking Monitoring (SME, Female Entrepreneurship and Green Banking related compliance
monitoring)
CL Checking
………………………. ……………………………………
Authorized Signature Branch Manager
(Name, Signature & Seal) (Name, Signature & Seal)
Page # 136
Annexure-G
BORROWER:
REGISTERED ADDRESS:
First obtain General Documents; then identify the Collateral, Facility and obtain specific documents listed hereunder. Leave out
documents not called for by the terms of the Credit Approval and Facilities Advice Letter (Sanction Letter).
6. Letter of Continuity
7. Deed of Partnership (for Partnerships;
Borrower / third party), By-Laws etc.
8. Memorandum and Articles of
Association (for limited company
Borrower / third party) with Certificate
of Incorporation
9. Letter of Arrangement
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16 Copy of National ID
B. LIEN
LIEN OF ACCOUNT
1. Resolution to lien account proceeds (for
Third Party partnerships and limited
cos.)
2. Letter of Lien and Set- Off (Pledge
Agreement)
LIEN ON FINANCIAL INSTRUMENT LIKE
FDR, ETC
1 The Instrument duly discharged on the
back of it.
2 Letter of lien (1st Part Lien if the
borrower is the owner of the
Instrument, 3rd Party Lien if the owner
of the Instrument is one other than
Borrower)
3 Letter of Authority to encash the
instrument as & when needed by the
bank
4 Confirmation of Lien (Marking of Lien)
from the issuing bank
LIEN ON DEMAND STOCK/SHARES
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4 Pledge setup Acknowledge from
Brokerage house
5 CDBL generated copy of Pledge Setup
D. PLEDGE OF SHARES
1. Resolution to deposit (for Third Party
partnerships and limited company)
2. Share certificates
3. Blank transfer forms for each share
certificate (Form 117)
E. PLEDGE OF INVENTORY
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7.
RJSC Form 19, and receipt of filing with
RJSC
8. Insurance Policy with Bank as jointly
insured
1 Letter of Pledge
3 Letter of Continuity
1 Letter of Pledge
F. HYPOTHECATION OF INVENTORY
1. Resolution to hypothecate inventory
(for Third Party partnerships and limited
cos.)
2. Letter of Hypothecation of Inventory /
Hypothecation Agreement
3.
RJSC Search Report (for limited
company. partnerships; borrower/third
party)
4. RJSC Form 18, and receipt of filing with
RJSC
CC (HYPO) (Bai-Muaijal/Bai-
G.
Murabaha/MPI)
Letter of Hypothecation of stock in
1
Trade
2 Supplementary Letter of Hypothecation
4 Letter of Continuity
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5 Periodical Stock Report
Letter of Disclaimer form the owner of
6
rented Warehouse
7 Insurance Policy with cover note
H. HYPOTHECATION OF
RECEIVABLES/BOOK DEBTS
1. Resolution to hypothecate receivables /
book debts (for Third Party partnerships
and limited company)
2. Letter of Hypothecation of Receivables /
Book Debts (Hypothecation Agreement)
3. RJSC Search Report (for limited
company/registered partnerships;
borrower/third party)
4.
RJSC Form 18, and receipt of filing with
RJSC
J. ASSIGNMENT
ASSIGNMENT OF RECEIVABLES
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1. Resolution to assign receivables (for
Third Party partnerships and limited
cos.)
J1 HYPOTHECATION OF
STOCK/RECEIVABLES
1 Letter of Hypothecation
K. MORTGAGE
1. Letter of nomination of third party
mortgagor from Borrower with attested
specimen signature of mortgagor
2. Resolution to mortgage and guarantee
(for Third Party partnerships and limited
company)
3.
Copy of valid ID (for Third Party
individual mortgagor)
4. Personal Guarantee from Third Party
mortgagor
5. Original title deeds of mortgagor and
previous owners (Bia- Deed)
Record of Rights i.e. CS, SA, RS Parcha,
6. Mohanagar Jorip parcha (if within
Mohannagar Area)
7. Mutation Parchas in mortgagor’s name,
certified by Assistant Commissioner of
Land
8. Certified Mutation Khatian alongwith
DCR
9.
NOC of the competent Authority for
Mortgage
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11. Municipal holding tax receipts for
property in municipalities
12. Building/factory plan with letter of
approval
17.
RJSC Form 18, and receipt of filing with
RJSC if property in the name of ltd cos.
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Letter of Consent of the 1st Mortgage
Bank in case of 2nd charge/mortgage &
also pari passu security sharing
35
agreement between 1st Mortgage Bank
and the Mortgagee, if applicable subject
to consent of 1st Mortgage Bank
36 Photograph of the Mortgaged Property
37 Location Map
Survey Report from professional
38
Surveyors
39 Physical Visit Report by Bank Officials
Lawyer's clean opinion in respect of
40 acceptability of the property as
collateral security
L. GUARANTEE
1. List of Directors/Partners with specimen
signatures, certified by company
secretary or chairman, or managing
partner (for limited company and
partnerships)
4. Letter of Guarantee
4 Amortization Schedule
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2. Accepted Term Sheet
3. Information Memorandum
4. Participation letters
5. Facilities Agreement
P.
OVERGRAFT (GENERAL)
1
Letter of Continuity
2
Insurance Policy cover note
2 Letter of Awarding
3 Letter of continuity
2 Letter of Continuity
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3 Letter of Undertaking
4 Amortization Schedule
1 Lease Agreement
2 Letter of Undertaking
3 Amortization Schedule
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3 Sharing Agreement between Land
owner & Developer
4 Copy of approved plan of construction
from concerned authority
5 Letter of Installment
6 Letter of Undertaking
7 Amortization schedule
3 Letter of Indemnity
A. Proprietorship Firm
C. Limited Company
4 Certificate of Incorporation
Page # 147
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No
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10 Deed of Mortgage & Hypothecation for
creation of Charge on fixed & floating
assets (existing & future) with RJSC
11 Modification of charge with RJSC
through form 19
12 Certified copy of charge creation
certificate from RJSC
13 Undertaking stating that the Investment
Client shall not make any amendment
or alteration in Memorandum & Article
of Association without prior approval of
Bank
14 Approval of the Bank for any inclusion
or exclusion of Directors in & from the
company
15 Certificate of Commencement (in case
of Public Limited Company)
16 Joint venture Agreement (in case of
Joint Venture company)
17 BOI Permission (in case of Joint venture
company)
D. Trust
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E. OTHER DOCUMENTS
RELATIONSHIP MANAGER:
CREDIT ADMINISTRATION:
Page # 149
Enclosure
Page # 150