Saturday, April 26, 2008

Documents required for opening a bank Account of a Limited Company:

Following are the documents required for opening a bank account of a Limited Company:
  • Account opening form to be filled with relevant information
  • Identification documents
  • Passport size photograph of account holder duly attested
  • Transaction profile (TP) mentioning the nature/number of transaction on monthly basis
  • Board resolution signed by the Chairman/Company secretary
  • List of directors with required information
  • Certificate of Incorporation certificated by Registrar of Joint Stock Companies (RJSC)
  • Copy of Memorandum and Article of Association certified by the RJSC duly attested by the Company Secretary
  • Copy of Form XII certified by the RJSC
  • Copy of Updated Tax Identification Number (TIN) certificate
  • Copy of a VAT Registration Certificate
  • Copy of updated Trade License
  • Other related documents based on the nature of the company i.e. BOI permission for a industrial client, Bangladesh Bank permission, Import & Export license from Chief Controller of Import & Export (CCIE) etc.

Requirement of Nomination:

Everyone must keep it in mind that during opening of account he/she must provide a nomination against the account opened. It is a mandatory by the central bank. Therefore, please maintain following steps for nomination:
  • Fill up the nomination form (supplied by the bank) mentioning full information of the person
  • Supply a passport size photograph duly attested by the account holder
  • If the nominee is a minor, you may mention the legal guardian of the nominee and provide detailed information of the legal guardian along with a photograph duly attested by the account holder.

Friday, April 18, 2008

Interest Earned and Deduction of Tax:

Financial institutions providing Interest on various products. Few example depicted below for understanding:
  • On savings account on half yearly basis
  • On short term deposit account on half yearly basis
  • On fixed deposit accounts on maturity basis etc.
As per regulation of National Board of Revenue (NBR) financial institutions deducting Tax at source on interest at the rate of 10 percent and depositing the Tax money to the appropriate authority through a chalan within seven days of next month. Therefore, depositor may request to provide them a certificate mentioning the amount earned as interest and the amount deducted as Tax for record purpose and also for reporting to Tax Authority as well.

Regarding Excise Duty:

Excise Duty is a kind of charges on a account deducted once in a year as per rules of the Office of The Customs & Excise Duty realized on the basis of balance maintained in a account in the following manner:
  • Balance of a account less then Tk. 10,000.00 no excise duty would be realized ***
  • Balance of a account in between Tk. 10,000.00 to Tk. 1.00 Lac the excise duty is Tk. 120.00
  • Balance of a account above Tk. 1.00 Lac to Tk. 10.00 Lac the excise duty is Tk. 250.00
  • Balance of a account above Tk. 10.00 Lac to Tk. 1.00 Crore the excise duty is Tk. 550.00
  • Balance of a account above Tk. 1.00 Crore to Tk. 5.00 Crore the excise duty is Tk.2,500.00
  • Balance of a account above Tk. 5.00 Crore the excise duty is Tk. 5,000.00
*** If the balance of a account exceeds Tk. 10,000.00 any time in the year the bank must realize excise duty on the account. Financial year counted from January to December.

The bank realize charges in the month of December and after realization the money must be deposited to the appropriate authority with in the month of February of next year positively.

Residence Foreign Currency Deposit (RFCD) Account:

Bangladeshi nationality earned foreign currency from abroad but returned Bangladesh permanently can open a foreign currency a/c called RFCD A/C by depositing foreign currency to this account. Following are the documents required to open the A/C:
  • A/C opening form supplied by the bank to be filled up by providing full information about the A/C holder
  • Photocopy of passport for first six pages with the copy of VISA
  • Photograph - 2 (two) copy duly attested by the introducer
  • Two copy of nominees photograph duly attested by the A/C holder
  • Source of fund with proper documents
  • FMJ Form provided the depositing amount is equivalent to USD 5,000.00 or above
The RFCD A/C holder can take back the amount in foreign currency as and when he again decided to go outside the country to his account maintained in abroad.

Sunday, April 13, 2008

Deposit Pension Scheme(DPS):

DPS is a installment based savings deposit (on monthly basis) for individual customer. In this account a customer deposit a certain amount of money for a certain period. And on maturity an agreed amount will be paid to the customer.

To open a DPS account customer will fill up a form supplied by the bank to provide information about him including the information of the nominee of the account with following documents:
  • Identification documents of the account holder
  • Passport size photograph of the applicant duly attested by the introducer
  • passport size photograph of the nominee duly attested by the account holder
At the same time the applicant must choice a tenor and the amount of monthly deposit. It is better if a customer maintain a Savings Account the monthly installment can be transfer to the DPS account automatically without any hassle. But the depositor must maintain available balance to the savings account linked with the respective DPS Account.

Saturday, April 12, 2008

Non-Residence Foreign Currency (NFCD) Account:

Non-Residence Bangladeshi earning foreign currency abroad can open NFCD A/C through his FC A/C maintained with a authorized dealing branch in Bangladesh. It is a kind of deposit for a fixed tenor and the financial institutions are providing interest on the account as per prescribed rate. Following documents are required for the said account.
  • Account opening form to be filled in with relevant information
  • Photograph two copy duly attested
  • Nomination form with a photograph attested by the A/c holder
  • Photocopy of passport as required by the bank
The beneficiary can take the money back in his name in foreign currency to his account abroad. Therefore, no permission is required to take the money back.

Friday, April 11, 2008

Credit Card:

Credit Card is issued by a financial institution to facilitate transaction against credit limit for a certain period for the following person based on the criteria mentioned below:
  • salaried person on the basis of salary
  • business person based on the strength of business
  • depositor who maintain handsome deposit in a bank
Following documents are required to issue a Credit Card of a salaried person or a depositor:
  • bank statement for three/six months
  • certificate of salary
  • Tax Identification Number (TIN) certificate
  • identification documents & a copy of passport size photograph
  • application to be filled supplied by the institution with two reference
For business person the financial institution needs following documents:
  • bank statement for three/six months
  • TIN certificate
  • identification documents & a copy of passport size photograph
  • Updated Trade License (copy)
  • application to be filled supplied by the institution with two reference
  • board resolution (for a limited company)
  • memorandum and article of association (for a limited company)
  • certificate of incorporation (for a limited company)
  • and other documents on the basis of the nature of business (if needed)
The credit card also can be used in the form of foreign currency. But the foreign currency is allocated from the travel quota of a Bangladeshi nationality against the yearly entitlement. To use credit facility in foreign currency the card holder need to take approval from the issuing authority on submission of following documents:
  • Original passport for endorsement with maximum limit up to USD 4,000.00 out of which USD 3,000.00 to travel other than SAARC countries
  • After endorsement copy of the first four pages and copy of the page of endorsement of passport to be kept by the issuing authority
  • At the same time the card holder must intimate the issuing authority prior to leaving country to open the credit limit to enjoy in abroad.

Check and Act on it prior to visit Bangladesh from abroad

You are a Bangladeshi nationality residing abroad and thinking to meet with your family members in Bangladesh. Please check following points which will help you a lots:
  • Send your money to your bank account in Bangladesh through banking channel
  • Do not bring cash money which is risky to carry
  • If you do not have any account please bring money with a declaration in a form called FMJ From provided the amount exceeds USD 5,000.00 or equivalent to other currency.
  • On arrival of Bangladesh please change your money in a bank only and take a encashment certificate which will help you in the future as your own earned money is genuine
  • If you have encashment certificate you can build asset with the money and you are also entitled to get the Tax benefit as well.

Thursday, April 10, 2008

Important information to invest money in Bangladesh for non-resident residing abroad:

Bangladeshi nationality residing abroad are interested to invest money for better return can open account in any bank in Bangladesh to buy land and share/securities or to deposit money for a fixed term.

The return of fixed deposit in the present market approximately are as follows:

Rate of interest for one month : at the rate of 8% per annum
Rate of interest for three months : at the rate of 11% per annum
Rate of interest for six months : at the rate of 11.50% per annum
rate of interest for twelve months : at the rate of 11.75% per annum

It may be mentioned here that on maturity 10% Tax on Interest will be deducted including Excise Duty as prescribed by the appropriate authority as per their regulation.

For buying a flat or a land you can chose the following procedure to make the transactions transparent as your earnings is genuine.
  • You need to open a account (SB/F/C) first with a schedule bank in Bangladesh
  • Remit fund to this account through banking channel
  • Provide cheques to the vendor duly signed by you for your equal monthly installment
  • Intimate the bank regarding your transactions to honour those cheques
  • Intimate the bank regarding the vendor from whom you are going to buy land/flat
So, during your next visit in Bangladesh please keep it in the mind and make your dreem come true.

Foreign Currency issued against Travel Quota:

A Bangladeshi nationality residing Bangladesh and going outside the country for travel purpose is entitled to endorse his passport in equivalent to USD 3,000.00 (three thousand) only outside the SAARC countries and USD 1,000.00 within the SAARC countries in a year. The year calculated from January to December. Following documents are required for endorsement:
  • Valid passport (a copy of passport for first four pages and the endorsement page is required for reporting purpose)
  • Valid VISA (page of VISA of passport is also required for reporting purpose)
  • Confirmed Air Ticket
An Authorized Dealer(AD) are entitled to issue maximum USD 2,000.00 (two thousand) only in cash and rest amount in the form of Travelers Cheque.

It may be mentioned here that the traveler visiting SAARC countries by bus are entitle to endorse passport for USD 500.00 (Five hundred) only.

On the other hand an importer/exporter/FC account holder's entitlement is differs from the above rules.

Regarding "TM Form":

TM Form is a document required for reporting of Outward Remittance to Bangladesh Bank within 5th day of the following month when the transaction occurred. Few instance of transactions are given below for reporting purpose:
  • Any kind of outward remittance requested by the customer
  • Foreign currency punched against travel quota
  • Remittance against study purpose etc.
Therefore, the TM Form must be signed by the applicant and countersigned by the bank.

About "Form C":

Form C is a document required for reporting of inward remittance to Bangladesh Bank within 5th day of the following month when the transaction occurred against the remittance. Form C is required for the purpose as mentioned below:
  • When a bank receive remittance from abroad in a Local Currency Account(i.e. CD/SB/STD)
  • As an when a customer withdrawal fund from his Foreign Currency (FC) Account
The customer must provide following information in the Form C:
  • The amount of foreign currency both in words and figure
  • The name of the originating bank from where the bank received remittance
  • Purpose of the remittance
Therefore, the Form C must be signed by the customer mentioning his address and countersigned by the bank for the reporting purpose.

Monday, April 7, 2008

Transaction Profile (TP):

TP is a kind of form to be supplied by the banker where a customer need to declare the numbers of transaction of various category will be made in the future on monthly basis.

An example under deposit item:

Cash deposit : 15 times and Maximum amount of per transaction(deposit) : Tk. 5.00 Lac

An example under withdraw item:

Cash withdraw : 10 times and Maximum amount of per transaction(withdraw) : Tk. 7.00 Lac

Prior to open an account a customer must fill up the Transaction Profile (TP) for all kinds of account.

Negotiable Instrument Act must know a banker:

About a cheque: A cheque is an instrument issued by a bank favouring it's customer to settle payment against an underlying transaction.

As per Negotiable Instrument Act under Article 6(six) it has been defined as an written instruction by the maker drawn on a specific banker with a undertaking to make payment a certain sum of money payable on demand.

Drawer: The holder of the account is called the drawer i.e. the person who signed the cheque.

Drawee: The cheque to whom is drawn on i.e. the bank is called drawee.

Payee: Payee is the person to whom the money is paid. i.e. the bearer of the cheque.

Payment in due course: Meaning the payment of cheque is made by the banker in accordance with the apparent tenor of the instrument in good faith and without negligence to any person as directed in the cheque.

Saturday, April 5, 2008

Non Resident Investor's Taka Account (NITA):

The non-resident shall open a NITA with any Authorized Dealer (AD) in Bangladesh. Money must be deposited to the account in freely convertible foreign currency remitted from abroad through normal banking channel. Balances in this account may be used to buy Bangladeshi share/securities The balances are also freely remitable abroad in equivalent foreign exchange. The NITA can be operated by the account holder himself or by a nominee, including AD itself.

Following documents are required to open NITA Account :
  • Account opening form (supplied by the bank) to be filled by the applicant with full information
  • Photocopy of passport for first four pages including VISA page
  • Photograph two copy duly attested by the introducer of the account
  • Nomination form to be filled with a photograph of the nominee and the photograph must be attested by the applicant of the account
  • KYC to be maintained with Transaction Profile to know the transactions on monthly basis

Banking facility for Bangladeshi Wage Earners residing abroad :

Wage Earner is a Bangladeshi nationality residing abroad and earning foreign currency. A Wage earner person can open Foreign Currency (FC) account in a any Authorized Dealing banking branch in Bangladesh. They are also allowed to open Savings Deposit (SB) Account in any schedule bank in Bangladesh.

After opening of FC account, an account holder can remit fund through banking channel and the money can bel deposited to the respective account. The money may be used for may purpose and the account holder need not to pay any Tax to buy land/flat etc if the transaction routed through the account. Money must be deposited in foreign currency and the account holder has a right to take the money back in his bank account abroad without any permission from any authority.

On the other hand the said person can open SB A/C and money also can be deposited to this account through banking channel. The formalities of the SB account mentioned earlier (see below).

Following are the formalities to open a FC A/C in a Authorized Dealing Banking Branch:
  • Account opening form (supplied by the bank) to be filled by the account holder
  • Photocopy of passport for first four pages including VISA page
  • Passport size photograph - two copy duly attested by the introducer of the A/C
  • Nomination form duly filled with a passport size photograph of the nominee and the photograph must be attested by the opener of the A/C
  • Authorization form to authorize other person to operate A/C in absence of A/C holder
  • Copy of Work permit & Monthly income statement
  • Transaction Profile (TP) to be filed mentioning expected transaction on monthly basis
  • KYC form to be filled by the banker to update file
  • After opening of A/C the holder of the account must deposit foreign currency amount to his account by himself
Tips for the Wage earner person : A Wage earner can carry Foreign Currency up to USD 5,000.00 or equivalent to other currency without declaration during arrival in Bangladesh. But to carry more that USD 5,000.00 the person must declare the fund in a FMJ Form and declaration must be given in front of appropriate authority in the Airport prior to the completion of immigration formalities on arrival.

Know Your Customer (KYC) Policy :

KYC is a must to open a account. At the same time we need to know about the customer in the following manner for a individual nature of account:

Name of the customer
Date of birth
Father's name
Mother's name
Marital status
Spouse name
Present address
Permanent address
Passport number or any identification
Phone number both T&T & Mobile
Occupation
Source of fund
TIN number
Vat registration no
Any other related information with relevant documents
Purpose of the accounts
Volume of transaction
Nature of transactions

Basically KYC is required as per guideline of Anti Money Laundering (AML) Act 2002. Main purpose of KYC is to find out the real identity of the customer to whom a bank will do business.

Friday, April 4, 2008

Requirement of Documents for opening a Personal Savings/Current/STD Account:

To open a personal CD/SB/STD account we need following documents:
  • Account opening form supplied by the bank to be filled by the account holder by providing details information with specimen signature
  • Identification documents like a copy of valid Passport/ID card/Voters ID/Union Parishad Chairman's certificate or any other types of valid documents accepted by the bank
  • Two copy of passport size photograph of the account holder duly attested by the introducer of the account
  • Nominees information with a passport size photograph duly attested by the account holder
  • Transaction Profile (TP) to be filled by the A/C holder on the basis of the expected transaction may be made in a month
  • Initial amount of money to be deposited to the account by the A/C holder himself
  • Tax Identification Number (TIN) certificate if available
Account must be introduced by a banker or a existing client of the same bank is entitled to act as an introducer. Introducer must fill up his part of the A/C opening form with his valid specimen signature.

Information of a Banker: Banker must fill up the KYC (Know Your Customer) form and mention the purpose of the account as well.

Types of Accounts:

It is my pleasure to tell you the types of accounts that we are using in our daily life to do transactions (withdraw & deposit money) are as follows:
  • Current Account (CD)
  • Savings Account (SB)
  • Short Term Deposit Account (STD)
  • Fixed Deposit Receipt Account (FDR)
Purpose :

CD Account : Basically this types of accounts can be opened by a person/business institution to deposit and withdraw money several times in a day to meet the business requirement. It's a non interest bearing account. So, you can do transactions as much as you can. The banker issue cheque book against the account.

SB Account : SB account can be opened singly or jointly on the basis of needs. It's a interest bearing account. But, there are some restrictions to withdraw fund to get the benefit of interest. Banker issuing cheque books against the account.

STD Account : It is called short term deposit account. A person and or a institution can open such types of account for doing transaction frequently as per business needs. It's a interest bearing account. Banker issuing cheque books against the account.

FDR Account : The account is opened by a person and or a institution to deposit fund only for a fixed tenor with a fixed rate of interest. Tenor meaning One/Two/Three/Six/Twelve Months. It also can be opened for two or three Years. Banker provide different rate of interest for different tenor. A receipt is issued against the account. On maturity the FDR Receipt must be produced to the banker for payment. FDR A/C can be open with a written request by debiting CD/SB/STD account. But nomination is a must for the account and a photograph of nominee is required duly attested by the applicant of the FDR account.

Very important : The customer must keep cheque books under locked and key at their own custody and also at their own risk to avoid fraudulent activities to safeguard you/your institution and or a bank as well.

Experience :

One day a gentleman moving here and there in the bank premises and even looking here and there. I was watching the man and asked him can I help you? Then the gentleman smiled at me, then started talking to me and wants to open an account. But, this was the first time he is approaching a banker to open a account to keep the money for safety purpose.

Welcome to banker's diary :

Hi this is Md. Fakhrul Islam I have been working in banking sector for the last 21 years. Banking is a very interesting area. Each and every one must know about banking in order to take care of your money in day to day business. Therefore, you will be benefited if you have clear idea about banking. Hope all of you will enjoy this blog.