ETCETERA

Guarantee and Indemnity for Loan/Credit

2011-11-08T22:44:00.000-08:00

Generally loans and advances are made against tangible securities. When a customer has no tangible security to offer or when the security offered is inadequate, a guarantee is demanded by the banker.

A guarantee is a promise by a third person to the lender for the present or future debt of the borrower. The person who gives the guarantee is called a surety or guarantor. The person to whom the guarantee is given is called creditor or beneficiary. The person in respect of whose default the guarantee is given is called the principal debtor.

Example: P lends Tk. 5000/- to Q and R promises to P that if Q does not pay the money R will do so. This is a contract of guarantee. Here Q is the principal debtor, P is the creditor or beneficiary, and R is the guarantor or surety.

Section 126 of the contract Act, 1872 defines a contract of guarantee as,” a contract to perform the promise or discharge the liability of a third person in case of his default.”

Essential Features of Contract of Guarantee

i) The essential feature of a contract of guarantee is that the guarantor is liable when the principal debtor fails to repay the debt. The liability of the principal debtor is primary and that of guarantor is secondary.

ii) A guarantee may be either oral or written. Banks, however, do not accept oral guarantees. The contract must be in writing and should satisfy all legal requirements as to signature, stamp duty etc.

iii) A guarantee may be either (a) specific guarantee or (b) a continuing guarantee. A specific guarantee covers a single transaction. It comes to an end when the specific promise is fulfilled. The continuing guarantee is applicable to a series of transactions. The surety can fix up a limit on his liability as to time or amount of guarantee when the guarantee is a continuing one. For example, X enters into cash credit arrangement with Modern bank for a credit limit of Tk.50,000/-. Y stands as guarantor for this amount for a period of one year. Under this arrangement, X can undertake any number of transactions subject to the amount and time specified.

iv) The party must be competent to enter into contract.

v) Minor’s guarantee is not allowed but if any major gives guarantee in favor of minor, the guarantor becomes principal debtor.

vi) Credit worthiness of the guarantor is to be considered before obtaining guarantee.

vii) As per contract, the guarantee must be supported by lawful consideration.

viii) The contract must be entered into with free consent.

ix) A guarantee obtained under misrepresentation, fraud and undue influence is void able.

Indemnity

A contract of indemnity is defined as ‘a contract by which one party promises to save the other from the loss caused to him by the conduct of the promise himself or by the conduct of any other person. The person who makes such promise is called the ‘indemnifier’ and the other person is called the ‘indemnified’ or ‘beneficiary’. For example, X who has lost a fixed deposit receipt issued by modern bank may claim the amount by furnishing an indemnity bond. By this act, X promises to reimburse the bank any loss that may be caused to it for paying the amount without the receipt.

Banks and letters of indemnity

Banks may obtain the letters of indemnity in the following situations;

1. Loss of term deposit receipt: The bank is not entitled to withhold payment of the money if a deposit receipt is lost or destroyed. The depositor is asked to sign a letter of indemnity duly stamped when the payment is made or duplicate is issued.

2. Issue of duplicate draft: In case of issuing a duplicate draft in lieu of the original reported lost, the banker should immediately notify the office on which the draft is drawn and enquire whether it is outstanding. A stamped letter of indemnity should be taken, on receipt of nonpayment advice from the drawee branch. The letter of indemnity should be signed by the purchaser and by two sureties’ good for the amount of the draft.

3. Loss of traveler’s cheque: In case the purchaser of a traveler’s cheque claims refund of the value of the cheque reported lost, the request should be entertained by the selling branch of the bank only when the cheque had not been endorsed before it was lost and a letter of indemnity is obtained from the purchaser. The letter contains special stipulation that the cheque was unendorsed at the time of lost.

4. Loss of safe custody receipts: In case of a customer losing a safe custody receipt, he has to give a stamped indemnity letter before he is given delivery of a duplicate receipt of articles kept with the bank for safe custody.

5. Loss of gift cheque: In the event of loss of gift cheque, a duplicate may be issued obtaining a letter of indemnity from the concerned person as follows:

a) Where the gift cheque was in possession of the purchaser, at the time of its loss or where it has been lost in the course of postal transit, the banker should issue a duplicate cheque after obtaining a stamped letter of indemnity from the purchaser.

b) Where the name of the payee had been inserted in the cheque and it was lost while in the actual possession of the payee, the issuing branch, after verifying from the concerned purchaser and obtaining a stamped letter of indemnity from him with sureties, issue a duplicate cheque.

Distinction between Guarantee and Indemnity:

1. Number of parties: In case of guarantee there are three parties- the principal debtor, the creditor and the surety. A contract of guarantee requires the concurrence of the three parties. In case of indemnity there are only two parties- indemnified and indemnifier.

2. Number of contracts; In case of guarantee there are two contracts, one between the principal debtor and the creditor and the second between the surety and the creditor. On the other hand, in a contract of indemnity, there is only one contract between the indemnifier and the beneficiary.

3. Request: In a contract of guarantee, the guarantor undertakes his obligation at the request, express or implied, of the principal debtor; no such request is necessary in respect of an indemnity.

4. Nature of liability: In a contract of guarantee the liability of the principal debtor is primary and that of surety is secondary. The person giving an indemnity is primarily and independently liable.

5. Purpose of contracts: A contract of guarantee is to provide necessary security to the creditor against the loan but a contract of indemnity is made for reimbursement of loss.

6. Right of parties: The surety has the right to recover from the principal debtor the amount paid by him under the contract of guarantee, the indemnifier cannot claim reimbursement from anybody else.

7. Nature of risk: The surety agrees to discharge the existing liability of the principal debtor. So it is a subsisting risk. The indemnifier promises to save the indemnified against risk of loss happening in future. So it is a contingent risk.

Rights of Guarantor

1. Right to revoke continuing guarantee

2. Right of subrogation

3. Right to claim indemnity

4. Right to know the extent of his liability

5. Right against co-sureties

Discharge of Surety

1. Death of the surety

2. Discharge on variation of terms

3. Discharge by release of the principle debtor

4. Discharge by composition

5. Discharge by creditors’ acts or omissions

6. Loss of security

Precautions to be observed in taking Guarantee

1. Ascertain the solvency and integrity of the guarantor

2. The capacity to contract

3. Banker not to approach a guarantor

4. Type of guarantee

5. Execution of contract of guarantee

6. Explanation of the clauses in the form

7. No duty to inform voluntarily

8. Joint and several liabilities

9. Periodical confirmation

10. Death, lunacy and insolvency of the principal debtor

11. Death, insolvency or insanity of the guarantor

Types of Bank Guarantee

1. Performance guarantee

2. Guarantee for Earnest money i.e.; Bid Bond, especially for International Tender.

3. Advance Payment Guarantee

4. Shipping Guarantee

5. Custom & Exercise Guarantee

WORKING CAPITAL ASSESSMENT

2011-11-08T06:29:00.000-08:00

What is Working Capital?

Usually, a business concern, to speak more of a manufacturing unit, needs two types of finance. Firstly, it requires capital for the purpose of acquiring fixed and other long-term assets. This type of finance is usually provided by the long-term sources of funds. Secondly, it needs finance for working capital for its current operational purposes i.e., capital required to finance the current assets generated/required for the process of manufacturing and selling is called the Working Capital. The term Working Capital is used as a gross as well as a net concept. Gross Working Capital represents the totality of fluctuating funds invested in all current assets in a business. Whereas Net Working Capital refers to the excess of current assets over current liabilities and indicates the margin or buffer for meeting obligations within the ordinary operating cycle of the business.

Management of Working Capital:

Working capital unless deployed and managed effectively in the business will not yield the desired result. Fixed assets once acquired judiciously, will not bother the management for a certain period, but Working Capital which is the life blood for the current operations of the business needs to be properly assessed, raised and deployed. Working Capital funds are raised from the following two main sources: (a) Funds generated from current operations (b) Short term bank borrowings, trade credit, short term deposits, owners' equity etc. Funds thus raised are usually deployed in various phases of Operating Cycle.

The Operating Cycle

Every on-going business has got its operating cycle. The cycle itself has different successive phases. Let us assume that initially the business has some cash and bank balances. It uses a part of these to acquire raw materials. A part is used to meet the various manufacturing costs. The raw materials are converted into stock-in-process which in turn becomes finished goods. Finished goods get sold and become Accounts Receivables. On realization, the Accounts Receivable turn into cash. The Cycle will repeat itself as the business goes on.

The following are the Working Capital cycles which include operating cycles drawn up for manufacturing concerns and trading concerns respectively:

Factors affecting the Working Capital Requirements :
(1)   Nature of Industry.
(2)   The Operating Cycle.
(3)   The Manufacturing Cycle.
(4)   Vagaries in supply of raw-materials.
(5)   Production policies.
(6)   Shift in demand for products.
(7)   Competitive conditions.
(8)   Growth and expansion programs.
(9)   Operating efficiency.
(10)   Taxation.
(11)   Dividend Policy.
(12)   Depreciation policy.
(13)   Price level changes.

Different Phases of Operating Cycle and their lengths of Period:
The length of the operating cycle of a business is the sum of the lengths of period of different phases of the cycle which can be computed as follows :-

Working Capital Requirements:

From the preceding paragraph, it is possible to compute the working capital requirements first in terms of days and then to convert it into TAKA.
In case of existing units, the first step is to calculate the various components of working capital for the last 3 years interms of days by the method already described, where the past data so permits. After this, the existing situation in physical terms, is to be understood and appreciated. Finally, on the basis of a discussion with the party, the number of days of various components of the working capital he proposes to keep for the coming year is to be decided. Note that this is not an arithmetical exercise where the past trends, howsoever extrapolated, are simply projected into the future. Frequently the past is a poor guide to the future. No amount of sophisticated analysis of past financing can be substituted for a forecast of what is likely to happen in the future. This is where good bankers are differentiated from bad bankers.
In case of new unit there is no past data to go by. In case there are other units in the same industry, their past components of working capital can be analyzed in terms of days. Where there are no such units or for some reason the other unit's experience is not applicable to the new unit, then the only thing a banker can do is to check the reasonableness of the party's projected holding of the components of working capital. Obviously there is a greater chance of an error here, and for this reason bankers tend to be conservative in financing new units. But being too conservative in financing new units, results in its strangulated growth.
There are two approaches to the next step of converting the working capital in terms of days into TAKA. The approaches differ in only the amount of work to be put in by the borrower and the banker.

The simpler approach, the one which will work well with the smaller units, is to ask the borrower to give its projected figure of sales for next one year. This figure given by the borrower needs to be evaluated against items like its production capacity, past increases in sales, its marketing organization, order book position and future state of the industry and the economy. After evaluation, an acceptable figure of projected annual sales is arrived at. The next step is to calculate the past ratios of the following items : (a) raw material consumption to sales, (b) cost of production to sales, (c) cost of sales to sales. But multiplying the past ratios by the projected annual sales the following projected figures are obtained: (1) Projected raw material consumption (2) Projected manufacturing cost and (3) Projected cost of sales. Dividing these by 360 gives us the daily figures. On multiplication of these daily figures by number of days of future holding of working capital components we get the corresponding amount. Here again, the number of days of future holding is to be determined on the basis of past holding and the existing situation, in consultation with the past, as explained above. It is necessary to sound a note of caution about the projection of past ratios of (a) raw material consumption to sales (b) cost of production to sales (c) cost of sales to sales into the future plans. They will hold good, so long as the party has not switched over to a different product or product-mix or has not changed the technology.

Margin for Working Capital:

The margin for working capital is the balance of net working capital requirements after deducting bank finance. As regards to it, the banker should decide what margin percentage he wants to insist on raw-materials, work in progress, finished goods and receivables. But in our country, varying rates of margin on different individual components of working capital requirement are not widely practiced. So, a flat rate of 25% (say) margin amount can be suggested which has to be provided by the borrower, however the same depends on Banker — Customer relationship.
In the case of new project, it should be ensured that the margin is taken care of by issue of share capital or by long term ldans from financial institutions.

Trading Concern's Assessment:

The assessment of working capital limit for a trading concern is very much simple as compared to an industry. There is no raw-material or work in process to worry about, only stocks of finished goods, receivables and sundry creditors. Very often days of credit received and credit given are approximately the same and therefore, they cancel each other.

FORMAT OF ASSESSMENT OF WORKING CAPITAL REQUIREMENTS AND THE BANK FINANCE CONSIDERED PERMISSIBLE FOR A MANUFACTURING INDUSTRY

                                                                                                                               (Taka in hundreds)
                                                                                                                                   Amount (Tk.)
(a)    Stock of Imported raw materials
for (say) 3 months
(b)    Stock of Indigenous raw-materials
for (say) 11/2 months
(c)    Stock of Work-in-process
for (say) 1/2 months
(d)    Stock of finished goods for
for (say) 11/2 months
(e)    Stocks of consumable stores and spares
for (say) 2 months
(0    Amount blocked in Receivables
for (say) 2 months,

Less:
Credit received on purchase
for (say) 1V2 months
WORKING CAPITAL REQUIRED

Less:    Margin requirement (say) 25%
BANK FINANCE CONSIDERED PERMISSIBLE

Note: The requirement of non-production expenses have to be met by the sponsors from their own source.

TEXTILE SPINNING INDUSTRY:

01. Capacity Utilization :

a) Existing unit : 5% above last year's actual capacity utilization subject to maximum of 75%

b) New unit : 70% of sanctioned/rated capacity whichever is lower

02: Inventory :

a)    Imported raw materials      : 90 days (cost at factory site)
b)    Local raw materials           : 30 days (cost of factory site) 3
c)    Work-in-process              : days (at production cost) 10
d)    Finished goods                 : days (at production cost) 90
e)    Stores and spares             : days (cost of factory site)

3. Receivables : 15 days (at production cost)

4. Cash in hand : Cash requirement for other day-to day expenditure (e.g. salary,

transportation, postage, utilities, etc.) should be arranged by the sponsors.

Format after working capital estimate:

Items Tied-up period Working capital requirement (Tk.)

Raw Materials

a) Imported 90 days

b) Local 30 days

Working-in-process 03 days

Finished goods 10 days

Stores & spares 90 days

Receivables 15 days

Cash Lum sum

Note : Margin/Security will be as per Bank Client relationship.

RECOVERY OF STUCK-UP LOANS AND ADVANCES: MONITORING AND SUPERVISING OF CREDIT

2011-08-15T03:02:00.000-07:00

Banks lend money to their customers for various purposes with a view to making profit after meeting all relative costs (Cost of fund, establishment cost, administrative cost, etc.) Bank collects fund from depositors i.e. Banks borrow fund from depositors. So advanced money comes from outside of the Bank repayable on demand and or as per schedule fixed earlier along with Interest. So we must recover money from the borrower after proper utilization to refund the same to the depositors and also to accommodate new customers afresh and to continue Bank's activities on revolving /cyclic process.

But it is experienced that in most of the cases money advanced to the borrower is very difficult to recover as per agreed terms due to failure of proper identification of following factors:

(a) Failure to identify genuine borrower.

(b) Failure to identify honest and sincere borrower for honoring financial commitment.

(d) Failure to assess inherent risks (Financial, business, management & security risk) in the business and its mitigating factors.

(e) Failure in proper utilization of fund.

(f) Failure in protecting diversion of fund.

(g) Lack of supervision, follow-up and monitoring process..

All the above causes for non-recovery and poor recovery of loans are not under the control of the bank's authority. But some of the above causes are controllable by the bank which may improve recovery position. In this respect Bank officials must discharge their due responsibilities to study credit proposal keeping in mind to address the above points.

Despite strict compliance of the points mentioned above if we find that timely repayment of bank's dues is not made we must identify reasons whether the loan has become non-performing due to some genuine uncontrollable reasons or willful default.

If it happens for acceptable reasons we may go for re-schedule arrangement or nurse the same by allowing further facility with more time. The rescheduling arrangement must be allowed as per directives Central Bank. The main features are as follows:

Rescheduling proposals may be considered if-

(a) Borrower is not a willful defaulter.

(b) Borrower's cash flow statement, audited balance sheet & income statement justifies proposed rescheduling arrangement.

Rescheduling incase of terms loan:

(a) Borrower must deposit 15% of overdue amount or 10% of outstanding whichever is less for 1st time rescheduling.

(b) Borrower must deposit 30% of overdue amount or 20%

of outstanding whichever is less for 2nd time rescheduling.

(c) Borrower must deposit 50% of overdue amount or 30% of total outstanding whichever is less for subsequent rescheduling arrangements.

Rescheduling for demand loan and continuous loan:

Amount over dues Down payment

Up to Tk. 1.00 core 15%

From Tk. 1.00 to 5.00 crore 10% (but not less than Tk. 15 lac)

For Tk. 5.00 crore & above 5% (but not less than Tk. 50.00 lac)

If any demand loan/continuous loan is converted into term loan, in that case down payment shall be 30% of overdue installment or 20% of outstanding amount which ever is less and 50% of overdue installments or 30% of outstanding amount for subsequent rescheduling arrangement. The rescheduling accounts must be monitored with special care and if any failure is noticed following actions may be taken:

(a) Periodical reminders shall be given.

(b) Guarantor (if any) shall be informed: He may be requested to peruse the borrower and arrange adjustment of Bank's dues.

(d) Frequently visit customer's business centre.

(e) Repeatedly visit customer's residence so that borrower may understand that either he shall have to repay/adjust the liability or make suitable arrangement afresh.

(f) Final notice may be given.

(g) Legal notice through Bank's penal lawyer may be given.

(h) Notice for encashment of security may be given.

If the account is by way of pledge and pledgor makes default in payment of debt, the Bank has to sell pledged goods through public auction as per directives of Head Office and sale proceeds to be deposited in borrower's account towards reduction of debt.

If the account is collateralized by Mortgage of immovable property (Land & building) having irrevocable power of attorney to sell the mortgaged property Bank shall have to arrange for auction by publishing notice in 02 daily News Papers and shall ensure getting best price. In this case Bank's enlisted lawyer's opinion should be obtained so that provisions mentioned in the law may be followed meticulously.

All other securities such as liened FDRs, Credit balances and balances of scheme deposits may be appropriated after due notice to the borrower as well as Guarantors /account holders etc.

After appropriation of proceeds (Sale proceeds of pledged goods/mortgaged property/ FDRs/scheme deposit/Credit balance etc.) for realization of balance outstanding if any, Bank may go for filing suit against the borrower/Guarantor before claim is barred by limitation.

The Bank should be very cautious in maintenance of non-performing loan accounts so that suit may be filed within next one year when:-

(a) Minimum 10% of overdue amount in the 1st year

(b) Minimum 15% of overdue amount in the 2nd year

If the total period of loan repayment according to the repayment schedule is less than 03 years and if amount of realization within that total period is less than 20%, the Bank file suit within next one year.

If any suit is instituted after the period mentioned above, the Court shall inform the matter in writing to the Ca9 of the Bank immediately and if such suit could not be filed within the stipulated period due to failure of an officer to carry on his duty, appropriate authority shall have to take disciplinary action against such officer liable and inform the Government and the Court about action taken within 90 days of receiving information.

Recovery process in case of borrower's death:

After a borrower's death (in case of an individual or sole proprietor of a concern), no further withdrawal or debit in his advance account should be permitted. If the borrower's successors and heirs approach the bank for continuation of the facility, the case will have to be examined from all angles.

If the bank agrees to the request, debit balance in the account of the deceased may be transferred to a new account in the name of his heirs or successors along with the securities held in the account. Legal opinion shall have to be taken before this is done. If the desired facility is refused or no application is made by the heirs or successors in this behalf, the securities, if any, may have to be sold and the guarantee, if any to be invoked/encashed. For the balance, if any, a suit shall have to be filed for obtaining decree of the court, if adjustment is not possible out of the court. It should be noted that the heirs of the deceased borrower are responsible to pay the debt only to the extent of the assets of the deceased, which come to their hands.

Laws of Mudaraba and Shirkat

2011-07-18T02:00:00.000-07:00

Mudaraba

In Islamic Banking ‘Mudaraba’ is a type of partnership. The term Mudaraba is synonymous to MUQARADA. ‘Mudaraba’ is a word of Iraqi origin, mostly found in Imam Abu Hanifa and Ibn-e-Hambal’s work.

Kerad or Muquarada is a Hegazi Word, generally found in Maliki and Shafei’s Writings. Mudaraba means contact between tow parties. One pays capital to other to run the business, Sharing of profit on agreed ratio. Loss will sustain by the capital supplier only. Capital supplier is known as ‘Shaibul Mal’ or ‘Robb-ul-Mal’ and Entrepreneur is ‘Mudarib’. This formula was prevalent in pre-islamic society and endorsed by Islam. All the Muslim Jurists have agreed that Mudaraba is a very useful form of business organization.

Types of Mudaraba:

1.General Investment Mudaraba which is not limited by time, place, trading items or any kind of restrictions.

2.Specific Purpose Mudaraba which has been limited by some restrictions.

Status of Islamic Bank under Mudaraba system of business transactions:

Mudarib, -at the time of receiving deposit.

Saheb-ul-mal- when the bank invests the fund,

When the bank is the Mudarib, it favours a general investment Mudaraba,

When sahib-ul-mal, its choice is a specific purpose Mudaraba.

Condition for Valid mudaraba contract:

1.Capital should be known at the time of contract.

2.Capital should consist of cash in the form of Dinar, Dirham and paper money. Commodities are not allowed as capital. Now a days, gold and silver have also become commodities.

3.Capital should be in possession of Sahe-ul-mal to give it to Mudarib. Debt cannot constitute a capital for Mudaraba business.

4.Mudarib will handle the capital alone. Participation of the Saheb-ul-mal in the work of mudarib will void the contract.

5.Share of profit should be determined as half, one third, or 30%, 40% etc. not as $ 30 or $40 /- so on.

Rights of Saheb- ul- mal :

1.Profit will be divided in presence of the Saheb-ul-mal.

2.The Mudarib can not take his share in the absence of Saheb-ul-mal.

Rights of Mudarib:

1.Mudarib has the right to share of the profit for his efforts.

2.In spite of his sincere efforts if the business incurred any loss, no recovery could be made for such loss.

3.He has the right to run the business freely without interference of the Saheb-ul-mal.

4.If the contract is nullified he has the right to receive remuneration for his labour in capacity of a servant in business.

5.Right to re-imburse the expanses in connection with essential business tour ( conveyance, boarding lodging etc).

Advantages of Mudaraba System:

1.Co-operation between haves and have nots.

2.Utilisation of idle funds.

3.Development of entrepreneurship and self employment.

SHIRKAT

Shirkat means partnership. Two or more persons jointly contribute capital and share the profit and loss. Here share of profit will distribute on agreed ratio and Loss according to capital contribution.

Shirkat was very popular at the time of prophet (S.M.) and his companions, not only in trade & commerce but also in agriculture and gardening.

Shirkat in agriculture is known as “Mozarea”.

Shirkat in gardening is called “Mosakat”.

Conditions for valid Shirkat Contract:

1.Contract should be common and acceptable by all the partners.

2.According to Imam Sharakhsi, contract should be in writting.

3.Capital contribution of each partner should be clearly stated.

4.Capital should be in hand at the beginning of the contract to ensure that the capital is in possession of the firm.

5.The date, month, year when the firm come into being must also be mentioned in the contract to avoid future disputes.

Classification of Shirkat

1.Shairkat-al-Mufavada,

2.Shairkat-al-Inan,

3.Shairkat-al-Sanai,

4.Shairkat-al-Wajooh,

1. Shairkat-al-Mufavada:

Mufavada means equality in everything, Capital – Profit – Loss.

Equal Status of all the partners in respect of religion and social position.

Not valid between a believer and non-believer, master and slave.

Equal in assets and liabilities.

2. Shirket-al-Inan:

OBJECTIVES AND CHARACTERISTICS FEATURES OF ISLAMIC ECONOMY

2011-07-09T09:36:00.000-07:00

There is a misconception in some sections that establishment of Islamic economy means establishment of Arab economy as it existed 1400 years back at the time of the Prophet (S. M.) this is not correct. Islamic economy would be totally up-to-date in its method of organization and use of technology. Only the principles and framework will be derived from the Quran, the techniques of the Prophet and the practices of the early days of Islam.

Similarly, it is wrong to say that Islam does not give an economic system. We recognize capitalism as an economic system, though its basic characteristics are only the recognition of the private right of ownership and freedom of economic activity for the individual, even though its only basic characteristic is the social ownership of means of production. Islam gives us a much more comprehensive guidance in economic matters such as prohibition of interest, compulsory levy of zakat, freedom of work and enterprise, concern for the poor, distinction between the Halal (permissible) and Haram (prohibited) in income, consumption and production and so on. As such Islam undoubtedly gives mankind an economic system not found in other religions. An economic system does not mean only the details of organization, which are more or less the same in all economic systems.

It is also necessary to bear in mind that an Islamic solution of the same problem may be more than one. There can be alternative solutions or models for the same problem or issues. This is particularly true of new issues. The difference can be quite acute in such sectors as land reform and role of government in economy. As long as the alternative solutions proposed by Islamic scholars through Ijtihad remain within the explicit framework of the Quran and the Sunnah, the alternatives would be considered Islamically valid and legitimate.

The Islamic economy which was established by the Prophet (SM) and developed by the Khulafa-I-Rashideen in Madina is the first model of Islamic economy in so far as basic principles and reference point along with the Quran and the Sunnah. We should remember that the Prophet freed the pre-Islamic Madinite economy from Jahiliya, or all un-Islamic practices. As such, none can say that what was allowed in Madinite economy, at that time as not permissible to-day, or what was not permitted in that economy as permissible now.

The goals of Islamic Economy

The goals of an Islamic economy are as under :

a. Establishment of Adl (justice), to attain Hasanah (good) and Falah (welfare) in this life and the life hereafter.

b. To establish Ihsan (gracious conduct or kindness) in economic affairs.

c. Establishment of Maroof (proper or good acts, institutions) in economic life.

d. Elimination of Munker (evil, wrong or injurious practices) form economic life.

e. Freeing humanity from unwanted burdens and shackles and to make life easier for them.

f. Achieve maximum economic growth.

g. Maximize employment to ensure maximum distribution of wealth in society.

h. Achieve universal education

i. Encourage co-operation in society

j. Favoring weaker sections to establish them in life.

The following verses of the Holy Quran clearly point out the aforesaid objectives of Islamic economy:

a. Allah enjoins on you justice and gracious conduct. (Sura Nahl: Ayat-90)

b. When we give them power on earth, they establish prayer, give zakat, enjoin maroof and prohibit Munkar. (Sura HaJJ, Ayat:41).

c. He (the Prophet) enjoins them to follow right things and forbids them evil, he makes pure things lawful for them and impure things pure things unlawful, he relives them of their burdens and frees them from shackles that bound them. (Sura Araf, Ayat: 157).

d. Our Lord, grant us good in this world and in the hereafter. (Sura Baqara; Ayat-201)

e. We desired to show favour unto those who were depressed in the earth, and to make them leaders and to make them inheritors and to establish them on earth. (Sura Qausas: Ayat 5-6)

f. Co-operate in acts of piety and virtue and do not co-operate in acts of sin and trangression (of laws of God)

g. So that wealth does not circulate only among rich people of you. (Sura Hashr: Ayat-7)

There are many other verses of similar nature in the Holy Quran which clearly establish the aforementioned goals of Islamic economy.

As regards achieving maximum economic growth, we can point out that Islam did not allow any owner to keep his agricultural land uncultivated for a long time. Islam also encouraged cultivation of barren land by any body who could do so. Hazrat Umar-Bin-Abdul Aziz directed his governors to lease all uncultivated state lands to any body who could cultivate against even 1/16th share of the crop. This indicates Islam’s concern for maximum utilization of resources for maximum econimic growth. (Dr. Yusuf Al Halal Wal Haram)

Islam also encourages maximum distribution of wealth as has been indicated in the verse of Sura Hahar. Universal education has been enjoined by the Prophet in his famous saying “Education is compulsory on all Muslims, male or female”. Education helps gainful employment which helps in better distribution of wealth. (S.N.H. Naqvi: Ethics amd Economics. An Islamic Synthesis, First education, Chapter 5, published by Islamic Foundation, U.K.).

Basic Characteristics of Islamic Economy

Freedom of work and enterprises: Islam has allowed freedom of work and enterprise. This is evident from the Madinite model of Islamic economy. A reading of the chapter of any Hadith collection in respect of agriculture, gardening, business etc. will establish this. The Quran also clearly states that “ Allah has made business lawful for you (Sura Baqara)”.

Free Economy: Islam allows economy to operate freely according to the market for us, subject to Islamic restrictions and guidelines on production, distribution, marketing, investment, trade, exchange, wages etc. The state can also further interfere in this free economy to restore equilibrium and establish justice and other Islamic objectives as explained above. In an Islamic economy, there is an “allowability constraint” in every field (a term introduced by Dr. SNH Naqvi in his above mentioned book). An entrepreneur can produce only permitted things. Projects should be normal in such an economy, after giving proper wages to the labourers in accordance with Islamic principles. Some forms of trade practices, exchange, investment and land tenancy in agriculture arte prohibited in Islam. It also disallows monopoly and hoarding as social evils.

The aforesaid restrictions make “Free economy in Islam qualitatively different from capitalism. Islam cannot be said to be capitalistic only because it allows forces of demand and supply to operate in the economy. Forces of demand and supply are fundamental economic forces, which were operational in all ages even before capitalism.

Trusteeship ownership: In Islam God is the true owner of all things. The Quran says: “ To Allah belongs whatever is in the heavens and whatsoever is in the earth”. (Al Imran). However, Allah in His mercy allows human beings to inherit wealth, own it and use it subject to His laws as evident from the following verses:

i. The land belongs to Allah. He allows it, to be inherited by whomsoever he pleases (Sura Araf, Ayat 128).

ii. Do they not see that we have created for them among the things fashioned by us cattle of which they become owners (Yasin Ayat-29)?

Islam, therefore, allows man as Vicegrant, to inherit from Allah (that is to own) wealth. This is indeed a trust for proper use.

In early Islam there were three kinds of ownership; private, communal and state ownership. The books of Hadith are full of accounts of individual ownership. This was the standard ownership. Some important things like water, canals pastures and graveyards were communal properties. The state owned the mines, rivers and large tracts of land. After the conquest of Syria and Iraq, these lands were made state lands and were not allowed to go into private ownership (Tafhimul Quran, Sura Hashr, Syed Abul Ala Maududi).

There is no bar on state ownership of enterprise in Islam. The basic economic institutions can be or should be brought under state control, if required to establish social justice or protect the interests of the community.

Protection of lawful property: Islam prtects lawful property and is in favour of confiscation of unlawful property. There are many instances of take-over of unlawful property during the period of Hazrat Omar and Hazrat Omar bin-Abdul Aziz. Lawful property can be taken over by the state only for valid social seasons after due compensation. During the last Hajj, the Prophet (S. M.) announced the principle of protection of lawful property. The Quran says, “Don’t eat each other’s property wrongly”. (Sura Nisa: Ayat 29).

Prohibition of interest: Islam prohibits interest. This requires a total reorganization of the economy, banking, investment, exchange, business and international trade. A big effort is under way in the Muslim world in this direction. A body of literature has already come up on this subject.

Zakat: Islam has made Zakat compulsory on the wealth of rich Muslims. This is spent for the weaker and distressed sections of the society. Zakat not only distributes wealth between the rich and poor of the society, it also influences investment, savings and allocation of income and resources. A detailed study has been made in this regard by Dr. Monzer Kahf in his book “ Islamic Economy”. American Trust Publications, U.S. A. A rich body of literature has come up in recent times on Zakat. The Zakat and Ushr Ordinance of Pakistan can be particularly referred to in this connection.

Concern for poor: This is a special feature of Islam . Zakat is one institution which testifies to this. In this connection we may refer to Ayat 5-6 Sura Qausar as quoted in para 6 above, is particularly significant, where Allah, the Almighty has expressed this desire to show favour on the depressed people. Islamic economy shall establish all possible institutions to carry out this desire of the Almighty.

Distribution of inheritance: Islam has not left the distribution of inheritence on the whims of a person. In Islam a person cannot favour one over the other of his relations for temporary or subjective reasons as is the rule in the West. Islam distributes inheritable property among several groups of people:

i. Children

ii. Husband/Wife

iii. Parents

iv. Brothers and sisters in certain situations.

This distribution has taken care of different groups keeping in view their social role, requirements and proximity of kinship relationships. For those who remain outside the list of inheritors, Islam has provided for wasiat (will) for all such relations of they are in a distressed condition. A person can will up to 1/3rd of his property for distressed relations or others outside the inheritors.

Time and again as we veer from the clear injunctions of Allah, we hark back discouraged and crest-fallen. Islam provides us the principles of social behaviour in our economic life. It is up to us to develop the technology for the implementation of such principles. Already there is a resurgence over the Islamic world towards these ends. We pray to Allah for his blessings and continued guidance.

HISTORICAL BACKGROUND OF ISLAMIC BANKING

2011-07-08T07:36:00.000-07:00

Islamic banking in its present shape is a recent development. It is a part of Islamic Economics, which is now a subject of serious study and research in many national and international institutions of the world. In the decade of 1950s it was a matter of research and was limited in the papers of different scholars. The 1960s was the decade for practical experiment and 1970s was the decade for establishment. The decade of 1980s is expected to be the decade of consolidation.

During 1950s it was found that the Muslims of Malaysia save primarily for performing Hajj and such savings were mostly kept idle in pillow, under mattresses and floors for avoiding interest, which was damaging for the economy. To tape these savings the Malaysian Govt. in 1962 established an interest free financial institution known as “Pilgrims Savings Corporation”. Though it was not a full pledged bank, even then we can say that it marked the beginning of an institution free of interest, which is unconditionally prohibited in Islam.

“Mitghamr Bank” is the pioneer of modern Islamic Banking. Dr. Ahmed-El-Naggar by his personal endeavor established the Mitghamr Bank at Mitghamr in Egypt in 1963, which was the first banking institution in the real sense, to conform the Islamic Shariah. The Mitghamr bank conducted its banking operations successfully in accordance with Islamic Shariah for about five years. The Islamic bankers of the world now treat the short life of Mitgfamr Bank as the first model of Islamic Banking. A survey report by the National Institute for Management Development shows that the Mitghamr bank was tremendously successful in achieving its objectives. And the tremendous success of the bank was the cause of its closure by the vested interest in 1967.

In 1969 Malaysian Govt. by an enactment in the parliament established “Tabung Hajj” mainly for the purpose of utilizing the savings of the Muslims in investments in accordance with Islamic Shariah, which was advancement towards Islamic banking at official level.

In 1972 Naser Social Bank was found by Egyptian Govt. to save the public opinion in substitute of Mitghamr bank and made a success in operation with the principles of Islamic Shariah.

During early seventies the inflationary situation all over the world made the scholars thoughtful and many of them opined in favour of establishment of Islamic bank for effective control of inflation and the attention of the Muslim Govts. and scholars in particular concentrated over the concept.

In 1974 the IDB charter was adopted by OIC with a view to establish an institution of international character to operate in accordance with Islamic Shariah.

Islamic Development Bank came into being in 1975 having all the component states of OIC as its member abd charged with the responsibility of providing technical assistance to the member countries, extending training facilities for personnel engaged in development in member countries and to undertake research for enabling the economic, financial and banking activities in the Muslim countries to conform to the Shariah.

1975 also witnessed the establishment of a commercial bank in the real sense namely the “Dubai Islami”. Dubai Islami Bank made a remarkable success within a short span of time which inspired the Muslim countries in general and the business community in particular to take steps for establishment of Islami Banks in different countries and during the following three years 6(six) Islami banks and financial institutions namely (i) Kuwait Finance House, (ii) Faisal Islami Bank, Sudan (iii) Jordan Islami Bank for finance and investment, (iv) Faisal Islami Bank of Egypt, (vi) Islamic Investment Co. Ltd., Sarjah, were established.

In 1978 Islamic Foreign Ministers conference in their Dakar (Senegal) meet recommend to the members of OIC to make systematic efforts to establish Islami Banks gradually and during the next three years of their recommendation 20 Islami Banks and financial institutions came into existence. The Dakar meet also adopted an agreed definition of Islamic Bank.

Eighteen (18) more Islami Banks including one in Bangladesh were established during the period from 1982 to 1985 and now in January, 1986 about 50 Islami Banks are working having more than 10,000 branches all over the world. More Islamic banks are coming shortly in different countries. Proposals for establishment of one Islamic Investment Company and one Islamic bank in Bangladesh are under active consideration of Bangladesh bank. The proposed companies are Islamic International Finance Ltd. & Al-baraka Bank.

Not only in Muslim countries, Islamic banks are also functioning in predominantly non Muslim countries like Bahamas, Luxembourg, Switzerland, United Kingdom, Denmark and Philipines. But the status of Islami banking is not equal in all the countries.

HIRE PURCHASE UNDER SHIRKATUL MELK (IJARA MUNTAHIA BITTAMLIK)

2011-06-24T09:04:00.000-07:00

Hire Purchase under Shirkatul Melk is a special type of contract which has been developed through practice. Actually, it is a synthesis of three contracts:

1.Shirkat

2.Ijarah and

3.Sale

These may be defined as follows:

SHIRKATUL MELK:

Shirkat means partnership, Shirkatul Melk means share in ownership. When two or more persons supply equity, purchase an asset, own the same jointly, and share the benefit as per agreement and bear their loss in proportion to their respective equity, the contract is called Shirkatul Melk contract.

IJARAH:

The term Ijarah has been derived from the Arabic words (Ajr) and (Ujrat) which means consideration, return, wages or rent. This is really the exchange value or consideration, return, wages, rent of service of an ASSET. Ijarah has been defined as a contract between two parties, the Lessor and the Lessee where the Lessee enjoys or reaps a specific service or benefit against a specified consideration or rent from the asset owned by the Lessor. It is a hire agreement under which a certain asset is hired out by the Lessor to a Lessee against fixed rent or rentals for a specified period.

SALE:

This is a sale contract between a buyer and a seller under which the ownership of certain goods or asset is transferred by seller to the buyer against agreed upon price paid/ to be paid by their buyer.

Thus, in Hire Purchase under Shirkatul Melk mode both the Bank and the Client supply equity in equal or unequal proportion for purchase of an asset like land, building, machinery, transports etc. Purchase the asset with that equity money, own the same jointly; share the benefit as per agreement and bear the loss as proportion to their respective equity. The share, part or portion of the asset owned by the Bank is hired out to the Client (partner) for a fixed rent per unit of time for a fixed period. Lastly the Bank sells and transfers the ownership of its share/part/portion to the Client against payment of price fixed for that part either gradually part or in lump-sump within the hire period or after the expiry of the hire agreement.

IMPORTANT FEATURES:

In case of Hire Purchase under Shirkatul Melk transaction the asset/property involved is jointly purchased by the Lessor (Bank) and the Lessee (Client) with specified equity participation under a Shirkatul Melk contract in which the amount of equity and share in ownership of the asset of each partner(Lessor Bank & Lessee Client) are clearly mentioned. Under this agreement, the Lessor becomes co-owner of the asset under transaction in proportion to their respective equity participation. In Hire Purchase under Shirkatul Melk agreement, the exact ownership of both the Lessor (Bank) and Lessee (Client) must be recognized. However, if the partners agree and wish that the asset purchased may be registered in the name of any one of them or in the name of any third party, clearly mentioning the same in the Hire Purchase Shirkatul Melk Agreement. The share/part of the purchased asset owned by the Lessor (Bank) is put at the disposal/possession of the Lessee (Client) keeping the ownership with him (Bank) for a fixed period under a hire agreement in which the amount of rent per unit of time and the benefit for which rent to be paid along with all other agreed upon stipulations are also to be clearly stated. Under this agreement, the Lessee (Client) becomes the owner of the benefit of the asset but not of the asset itself, in accordance with the specific provisions of the contract vide which the Lessor (Bank) is entitled for the rentals.

The ownership of hired portion of the asset lies with the Lessor (Bank) and rent is paid by the Lessee (Client) against the specific benefit, the rent is not considered as price or part of price of the asset. In the Hire Purchase under Shirkatul Melk agreement the Lessor (Bank) does not sell or the Lessee (Client) does not purchase the asset but the Lessor (Bank) promise to sell the asset to the Lessee (Client) part by part only, if the Lessee (Client) pays the cost price/equity/ agreed price as fixed for the asset as per stipulations within agreed period on which the Lessee also gives undertakings. The promise to transfer legal title by the Lessor and undertaking given by the Lessee to purchase ownership of the hired asset upon payment part by part as per stipulations. As soon as any part of Lessor’s (Bank) ownership of the asset is transferred to the Lessee (Client) that becomes the property of the Lessee and hire contract for that share/part and entitlement for rent thereof lapses.

In Hire Purchase under Shirkatul Melk Agreement, the Shirkatul Melk contract is affected from the day the equity of both parties deposited and the asset is purchased and continues up-to the day the equity of both parties deposited and the asset is purchased and continues upto the day on which the full title of Lessor (Bank) is transferred to the Lessee (Client). Effectiveness of the sale contract depends on the actual sale and transfer of ownership of the asset by the Lessor to the Lessee. It is sold and transferred part by part and with the sale and transfer of ownership of every share/part, the hire contract of that share/part will lapse and the rent will be reduced proportionately. At the end of the hire period when the full title of the asset will be sold out and transferred to the Lessee (Client), the Lessee will become the owner of both the benefit and the asset consequently the hire contract will fully end. Hire Purchase under Shirkatul Melk is a binding contract of the parties to it- the Bank and the Client who are committed to fulfill/meet their undertaking/obligations in accordance with the relevant agreement. Under this agreement the Bank acts as a partner, as a Lessor and at last as a seller; on the other hand the Client acts as a partner, as a Lessee and lastly as a purchaser. Ownership risk is borne by both the Lessor and Lessee in proportion to their retained ownership/equity.

Under this agreement the role of Lessee is one that of a trustee, the hired asset being a trust property in his hands; he will manage, maintain the asset in favor of the interest of the Lessor at his own cost as the exact subject of hirer except in cases of any accident due to any event entirely beyond control of the Lessee and natural calamity/ disaster (acts of Allah) to be determined by the Bank after proper investigation within the knowledge of the hirer. The Lessee is responsible for keeping the hired asset(s) in good condition throughout the whole period of hire and if the asset is damaged or destroyed due to mismanagement, corruption, negligence, transgressions, default etc. of the Lessee. He shall be responsible to compensate the Lessor (Bank) for that. Of course, such mismanagement, corruption, negligence, transgressions, default etc. of the Lessee shall be determined by the Lessor (Bank) after proper investigation within the knowledge of the lessee. The Lessee cannot, without obtaining prior written of the Lessor (Bank) make any change in the exact item of the hire, and/or remove it from its place of installation and transfer it to another location.

In a Hire Purchase under Shirkatul Melk agreement any stipulation may be made, provided it is not against the nature and requirements of the contract itself, nor does it violate the divine laws of Islam and is also acceptable to both the parties. Hire Purchase under Shirkatul Melk facilities may be for medium-term or long-term period which may be utilized for the expansion of production and services, as well as housing activities. The duration of Hire Purchase under Shirkatul Melk contract shall not exceed the useful life of the subject/asset of the transaction. The Bank should not normally enter a Hire Purchase under Shirkatul Melk transaction for items with useful life of less than two years. Hire Purchase under Shirkatul Melk transaction facilities the Client (Lessee) to get benefit from the hired asset in exchange of rental and also to become full owner of the asset by purchasing it part by part. If, for any reason, the hire contract is revoked prior to the transfer of full title of the asset to the Lessee, then the title of the asset will be shared by both Lessor and Lessee- the Lessee will share that part of title which has been transferred to him against payment and the Lessor will share the remaining part. The Hire, to secure the Bank (Lessor) will pledge/hypothecate/mortgage his portion/part/share in the asset (acquired/to be acquired) and or any other asset/property of his own/third party guarantor to the Bank to fulfill his all liabilities/commitments including the accrued rental, if any.

Guide Line for Induction of Client and Appraisal of Proposal

2011-06-17T07:22:00.000-07:00

INDUCTION OF CLIENT

First of all, request potential Client to open an Al-Wadia (Current Account). Let him maintain the Current Account satisfactory for a reasonable period. (This will generally mean six months). Hold preliminary discussion with the prospective Client regarding his Investment needs and business experience. Brief him on the salient features of Concerned Mode of Investment. Apprise, in particular, the usual terms and conditions under which the Bank makes such Investments. Look to the past performance of the Client. Check-up Head Office Current Investment Policy and Branch’s track record of Concerned Mode of Investment. If the Proposal is found suitable, advise the Client to submit formal Application. If not found suitable, regret politely. After purchase of goods the Bank must bear the risk of goods until those are actually sold and delivered to the Client, i.e. after purchase of the goods by the Bank and before selling of those to the Client buyer, the Bank shall bear the consequences of any damages or defects, unless there is an agreement with the Client releasing the Bank of the defects, that means, if the goods are damaged, Bank is liable, if the goods are defective, (a defect that is not included in the release) the Bank bears the responsibility.

PROCESSING AND APPRAISAL OF INVESTMENT PROPOSALS

For processing investment (Credit) proposal, examine Shariah permissibility of the Goods. Reject the proposal outright if not permitted by Shariah. Then Check-up Credit Restriction Schedule of Bangladesh Bank and Head Office Current Investment Policy Guidelines. Visit the Business establishment of the Client. Now, tally the Particulars, Information and Figures in the Application Form with the original Documents/Papers and be sanguine about its genuineness and correctness. Obtain additional information, particulars, facts and figures if required. You need to talk to the business and important personalities of the locality to ascertain the Honesty, Integrity and Business dealings of the Client. You should obtain CIB report from Central Bank and request for Confidential Report of the Client from local Bank Branches. Do not finalize the proposal until the Confidential/CIB Report are received. Confidential Reports should also be obtained from local Financial, Credit and Leasing Institutions, if felt necessary. Obtain declaration of the Client about his liability (both Contingent & Real) with other Banks/Financial Institutions/Leasing Companies including any other Branches of Pubali Bank Ltd. Collect Financial Statement/Balance Sheet of the Client for the last three consecutive years for Investment Proposals of Tk. 50.00 lac or above or as per Head Office Instruction. This is to be furnished by all Clients irrespective of their status, i.e. Individual, Proprietorship, Partnership, Private/Public Limited Company, Trust Body etc. engaged in business. Now, Inspect Land, Buildings (s), other Assets and Properties proposed to be Mortgaged or Hypothecated. Ascertain Prima-facie genuineness and correctness of those in cross references to Documents, Title Deeds and other relevant papers. Ascertain primarily the market value and the forced sale value of the proposed collaterals. Its very important to verify the genuineness of title documents from concerned Sub-registry Office/Tahashil Office. Don’t accept any title document for mortgage without verification of genuineness. Now, forward Documents, Title Deeds and other relevant Papers to the approved Lawyer of the Bank for examination and furnishing his opinion. (Lawyer’s Opinion should be clean and without ambiguity).

Please study the following carefully and note down the actual findings in the Appraisal Form against each item;

a.    Whether the goods which the Client intends to purchase are readily saleable and have constant and effective demand in the Market.

b.    Whether the Price of the goods is subject to frequent and violent changes.

c.    Whether the goods are available in the market and the Bank will be in a position to purchase the Goods in time and at a negotiated price.

d.    Whether sale price of the goods is payable by the Client at specified future date in lump sum or in Installments as per proposal.

Mention that, Market price and Cost price should be carefully studied by the Investment Committee of the Branch and properly recorded, verified and signed.
In big Branches, the Investment Committee shall be formed where the Branch Incumbent, Incharge of Investment Department, Foreign Exchange Department and General Banking Department shall be the members. In Small Branches, Investment Committee shall consist of the Branch Incumbent, Second Officer/Investment Officer & Cash In charge. For Commercial and Industrial Investments, you have to prepare Appraisal Report on specified format.
In course of preparation of the Appraisal Report please ensure incorporation of all Information, Particulars, Figures and Statistics in Appraisal Form correctly with special attention to the following:

a.    Composition of Assets of the Client viz. Cash, Goods, Investment, Building, Landed Property, Stock-in-trade, Work-in-process, marketable securities etc.:

b.    Extent and nature of liabilities of the Client i.e. whether the volume is within the manageable capacity of the Client. Opinion in this regard and justification thereof must be clearly mentioned.

c.    The value of Liquid Assets, viz., Cash and Book Debts of the Client.

d.    Respectability and Business Reputation of the Client in the Market;

e.    Experience of the Client in the Business.

f.    Where the goods will be stored and how the same will be sold. Whether the arrangement is satisfactory and Bank’s interest will be protected properly.

Now its time to contact primarily with the Producers/Sellers/Suppliers of the Goods in the Market, study the market price and workout the purchase and sale prices of the goods as per following Guidelines, and ascertain whether the purchase of the goods by the Client from the Bank will be profitable to him and whether the Client shall be able to pay the price of Bai-Mujjal goods to the Bank within the due date.

Guideline for working out the Cost and Sale Price
Work out the sale price of goods and other expenses to be incurred as per following Guidelines and see whether the purchase of goods shall be profitable to the Client and whether the Client shall be able to pay the price of the goods to the Bank timely:

Cost and Sale Price of the Goods:

A.    Purchase Price/Landed cost of the goods
      PLUS
B.    Other expenditures in connection with the Purchase, Transportation and Storage of
      the Goods incurred by the Bank before sale to the Client:

a.    Conveyance-TA/DA of Bank Official or the Agent, if any
b.    Commission paid to the Agent, if any
c.    Cost of Remittance of Fund
d.    Transportation Cost up to Bank’s Godown (if not sold just after purchase)
e.    Transit Insurance and Incidental Expenses
f.    Other Expenses except interest incurred (if any). Interest element, if any, is to
      be paid by the Client himself.
g.    Godown Rent and Godown Staff Salary (if the Goods are kept in the Bank’s
      Godown before sale to the Client).

C.    Total Cost Price (A+B) Tk........................

D.    Estimated Profit of the Bank Tk.......................(Percentage of Profit.................%)

E.    Sale Price (C+D) Tk.....................................(                                                          )

Difference between a) Profit vs Riba and b) Rent vs Riba

2011-06-16T09:02:00.000-07:00

In Islam Riba (Interest) is strictly prohibited. Islam support business based banking where banks are allowed to earn through profit from business. That is banks profit will not be fixed prior to business. But Riba (Interest) is fixed whatever the business situation is. I will try to difference Riba (Interest) against Profit and Rent.

Difference between Riba (Interest) and Profit:

Riba (interest)	Profit
1. Excess over the principal in a loan transaction.	1. Positive end result of business operation.
2. Unearned income	2. Has to earn by investing labour and capital.
3. Return of principal with additional amount (interest) is ensured.	3. No such surety.
4. Pre-determined	4. Uncertain
5. Interest may repetitively be earned on a single transaction.	5. Profit may be earned once from a single deal.
6. Prefixed cost of goods and services and creates inflation.	6. Profit is found after deduction of all expenses from total income. So it has no relation with inflation.
7. Interest increases money supply in the market.	7. There is no opportunity of increasing money supply.
8. These is the opportunity of compounding	8. Close end transaction.
9. There is no risk of erosion of capital.	9. Risk of erosion of capital is there.
10. No chance of negative end result i.e., loss.	10. This is every possibility of negative end result.
11. Declared Haram (prohibited) unequivocal terms in the holy Quran.	11. Halal (permitted) as declared by the holy Quran.
12. Transfers assets from poor to rich.	12. Ensure equitable distribution.

Different between Riba and Rent:

Riba	Rent
1. Excess paid over the principal in a loan transaction.	1. Rent is paid for consuming utilities of an asset which have repetitive use.
2. Interest (riba) unilaterally determined and has no relation with market forces.	2. IT depends on market forces i.e., demand and supply.
3. Lender is not concerned over the lent money. Borrower will have to pay back principal with interest.	3. Rent is paid on an asset so long the same remains useable.
4. Lender has no responsibility of maintaining the fund lent out.	4. The owner of the asset is bound to maintain the asset to keep the same useable.
5. Principal and interest is always safe.	5. All along these is the possibility of damage.
6 By lending the ownership of money or commodity is transferred.	6. Ownership of the asset is not transferred. The hirer only can use the asset.

Bai-Muajjal

2011-06-16T08:43:00.000-07:00

Meaning of Bai-Muajjal
The terms ‘Bai’ and ‘Muajjal’ have been derived from Arabic words ‘Bai’ and ‘Ajle’            The word ‘Bai’ means purchase and sale and the word ‘Ajle’ means a fixed time or a fixed period. ‘Bai-Muajjal’ means sale for which payment is made at a future fixed date or within fixed period. In short, it is a sale on Credit.
Bai-Muajjal may be defined as a contact between a Buyer and a seller under which the Seller sells certain specific goods (permissible under Shariah and Law of the Country) to the buyer at an agreed fixed price payable at a certain fixed future date in lump sum or within a fixed period by fixed installments. The seller may also sell the goods purchased by him as per order and specification by the buyer.

In this Bank, Bai-Muajjal is treated as a contract between the Bank and the Client under which the Bank sells to the Client certain specified goods, purchased as per order and specification of the Client at an agreed price payable within a fixed future date in lump sum or by fixed installments.

Thus it is a credit sale of goods by which ownership of the goods is transferred by the Bank to the Client but the payment of sale price by the Client is deferred for a fixed period.

It may be noted here that in case Bai-Muajjal and Bai-murabaha, the Islamic Bank is a financier to the Client not in the sense that the Bank finances the purchase of goods by the Client , rather it is a financier by deferring the receipt of the sale price of goods, it sells to the Client . If the Bank does not purchase the goods or does not make any purchase agreement with seller, but only makes payment of any goods directly purchased and received by the Client from the seller under Bai-Muajjal/Bai-Murabaha agreement, that will be a remittance payment of the amount on behalf of the Client, which shall be nothing but a loan to he Client and any profit on this amount shall be nothing but interest.

Therefore, purchase of goods by the Bank should be for and on behalf of the Bank and the payment of price of goods by the Bank must be made for and on behalf of the Bank. If in any way the payment of price of goods is turned into a payment for and on behalf of the Client or it is paid to the Client any profit on it will be Riba.

Important Features of Bai-Muajjal
# It is permissible for the Client to offer an order to purchase by the Bank particular goods deciding its specification and committing himself to buy the same from the Bank on Bai-Muajjal i.e. deferred payment sale at fixed price.
#It is permissible to make the promise binding upon the Client to purchase from the Bank, that is, he is to either satisfy the promise or to indemnify the damages caused by breaking the promise without excuse.
#It is permissible to take cash/ collateral security to Guarantee the implementation of the promise or to indemnify the damages.
#It is also permissible to document the debt resulting from Bia-Muajjal by a Guarantor, or a mortgage. Or both like any other debt. Mortgage / Guarantee / Cash security may be obtained prior to the signing of the Agreement or at the time of signing the Agreement.
#Stock and availability of goods is a basic condition for signing a Bai-Muajjal Agreement. Therefore, the Bank must purchase the goods as per specification of the Client to acquire ownership of the same before signing the Bai-Muajjal Agreement with the Client .
#After purchase of goods the Bank must bear the risk of goods until those are actually delivered to the Client #The Bank must deliver the specified Goods to the Client on specified date and at specified place of delivery as per Contract.
#The Bank may sell the goods at a higher price than the purchase price to earn profit.
#The price once fixed as per agreement and deferred can not be further increased.
#The Bank may sell the goods at one agreed price which will include both the cost price and the profit. Unlike Bai-Murabaha, the Bank may not disclose the cost price and the profit mark-up separately to the Client .

Purchase of Goods By The Bank
Remember that Bai-Muajjal is perfectly a legitimate transaction according to the Shariah, provided:
a)    That the goods desired by the Client is first purchased by the Bank and ownership of the Bank on the goods is established, i.e., the Bank must transform its money into goods.
b)    That after purchase of goods the risk of the goods is borne by the Bank until the possession of the Merchandise has been passed on to the Client , i.e., “the Bank would have to continue to be responsible until the goods were actually delivered to the Client , in accordance with specifications and other terms of the contract”
c)    That the specification of goods, delivery date, time and place and other terms of the contract are ensured.

In short, firstly, the transformation of Money into Goods by the Bank and secondly, to bear the Risk of transformation and that of the Goods by the Bank until the same is handed over to the Client are the two essential conditions, in order to make a Bai-Muajjal transaction Halal.

Any deviation from the above two conditions will deteriorate the transaction into purely financing arrangements with the agreed profit which will be nothing more than a camouflage for interest.
Therefore, in order to make Bai-Muajjal transaction ‘Halal’ (legitimate) the following procedures shall have to be followed:
1. Obtain deal-wise Application / Order for purchase after due study.
2 . Open Investment Account in Investment Account Opening Register which will be maintained mode-wise suffixing Client’s Fixed number giving deal Number chronologically. Mode-wise separate Folio shall be allotted for each deal of Investment.
3.    Enter the Account Particulars in the Investment ledger
4.    Complete all Ledger Head particulars and get them authenticated by an Authorised Official.
5.    It should be carefully noted that Purchase of goods shall be made only after completion of all the Documentation formalities.
6.    Bai-Muajjal goods may be purchased and delivery of the same may be taken directly by the Bank from the market / genuine producers/sellers/suppliers through any Authorised Official on Cash or Credit basis.
Or
    These may also be done through any Buying Agent (Individual / Firm / organization) duly engaging and authorizing them by a separate contract to purchase and take delivery of the goods on behalf of the Bank as its agent.
7.    In case of purchase and taking delivery of the goods by the Bank’s authorized officials
the following procedures shall have to be followed:

a)    Authorised official(s) along with the Client shall contact with the genuine producers/sellers/suppliers of the goods under transaction personally, will verify the quality, quantity, and other specifications supplied by the Client , study the market, collect the price / quotation, bargain with them, settle price and finalize the purchase mentioning the date and place of delivery and terms of payments keeping proper record of the same.
Or
On being satisfaction after physical verification the whole process may be completed by paper correspondence or over telephone / Telex/Fax etc. by keeping proper record thereof (Any verbal talk made with the seller must be followed by a letter to him by the Branch).

b)    However, in case of purchase / lifting against allotment(a) which is in the name of the Client, from Govt., Semi-Govt. Autonomous, Semi-Atonomous and reputed private concerns, physical verification may not be essential. In such cases the Bank must obtain valid letter of authority from the allottee to purchase and lift the goods by the Bank before making payment to the allotting authority. Otherwise, purchase of those goods by the Bank will not be valid as per Islamic shariah.

8.    In case of purchase of Bai-Muajjal goods by the Bank on credit/ deferred payment
basis, the Bank shall execute a ‘Credit Purchase Agreement’ with the seller to that effect mentioning date of delivery of Goods to the Bank and the of payment by the Bank.
9.    If the goods are to be purchased from the local or outstation market and money is to be paid/remitted through PO/TT/DD etc., the PP/TT/DD must be on behalf of the Bank and the commission thereof and other expenses such as T.A., D.A., transportation etc. shall be borne by the Bank, which shall ultimately be loaded on the cost of goods.
    The Incumbent in charge, the Second Officer are the Investment-in-charge of the   Branch will sign the PO/TT/DD Application Form on behalf of the Bank.
10.    In Case of purchase of goods by the agent engaged for the purpose, he will purchase the goods from the genuine Producers/Sellers/Suppliers in the local market or outstation markets following the same procedures as is followed by the Bank Officials, on behalf of the Bank.
11.    Agency commission, if any, paid by the Bank shall be added to the cost of goods.

Taking Delivery of Goods by the Bank

After finalization of purchase of Bai-Muajjal Goods either by the Bank Officials or through any Agent from the local or out station market the Bank shall request the seller to deliver the goods purchased (as per terms of transaction) to the Bank’s authorized official / Agent / Representative / Client or to the Bank’s godown against proper acknowledgement. Accordingly the aughorized official / agent / representative / Client shall receive delivery of goods by signing the delivery challan or the cash memo/ purchase schedule which shall be exclusively in the name of the Bank.
After taking delivery of the goods by the Bank or through an agent, the Bank shall make payment of the price of the goods to producers / sellers / suppliers through DD/TT/PO against cash memo/money receipts which shall exclusively be issued in the name of the Bank.
However, in case of Govt., Semi-Govt., autonomous and Semi-autonomous bodies and reputed private concerns, where the goods are allocated in the name of Client or any other form(s) and where the delivery of goods are normally given after making payments if the supply / delivery of goods is 100% certain, the Bank may make payment through DD/PO/ in favour of the Allotting / Supplying authority after taking due authorization from the allottee / Client to purchase and lift the goods by the Bank and make arrangement that the delivery of the goods to the Bank and not to the allottee or Client .
An attested copy / photocopy of the delivery order issued by the allotting authority be kept in the file to ascertain the date of receipt of the goods by the Bank.
The Bank shall not invest in such cases where the allotting authority will not accept the letter of authority and agree to deliver the goods to the Bank as per authorization of the allottee.
DD/PO may be issued in the name of the buying agent. In such a case a letter of request detailing purpose as well as indemnifying the Bank of loss, accident either in cash or kind shall be obtained, besides adequate cash/collateral security/ personal guarantee.

Sale and delivery of goods to the Client

The Bank after receiving the goods, shall finally calculate the total cost price and fix up the sale price by mutual discussion with Client . The calculation of the total cost price and the sale price should be as per following proforma.

Working out purchase and sale price of Bai-Muajjal Goods

A. Purchase price of Goods

Sl. No.	Particulars / Quality of Goods desire to purchase	Rate per unit	Amount	Remarks
1. 2. 3.
Subtotal

B. Other expenditure in connection with the purchase such as transportation, storage etc. of the goods.

SL. No.	PARTICULARS/QUANTITY	RATE PER UNIT	AMOUNT	REMARKS
1. 2. 3. 4. 5. 6. 7. 8.	Conveyance - TA/DA of Bank Official or the Agent (if any) Commission paid to the Agent, if any Cost of Remittance of Fund Transportation Cost up to Bank’s Godown (if not sold just after purchase) Transit Insurance and Incidental Expenses Other Expenses except interest, if any. Godown Rent and Godown Staff Salary, if any incurred before sale of goods to the Client.

C.    (TOTAL COST _ A + B ) TK ..............................
D.    MARK UP PROFIT OF THE BANK. TK. .......... (Profit in percentage of total cost price)
E.    TOTAL SALES PRICE ( C + D ) TK. .............................................
PREPARED BY    INVESTMENT INCHARGE 2 ND OFFICER        SVP/VP/AVP/MANAGER

Fix up the schedule of payment of price of Bai-Muajjal goods by the Client either by
installment or in lump sum. If it is by installment, every installment will include proportionate amount of principal and profit.

The following Accounting entries shall be passed at various stages of Bai-Muajjal Investment:-

1.     While receiving Cash Security from the Client before purchasing the goods, the
         following entries shall be passed:

Dr.   Cash or Client’s Current A/C ............................ .M/s       ........................................
        (Client) .............................................................
    Cr.    Bai-Muajjal Investment A/c (Security Deposit) (Commercial/ Industrial/
                Agricultural etc. A/C. M/s. ..................................(Client)...........................

            (Being the amount of Security Deposit realised from the Client against Deal
                 No..................... Dated.............................. M/s ..................................................)

2. While purchasing the goods by the Bank the following entries shall be passed:

2.1.    Dr.     Bai-Muajjal Investment Account (Commercial/Industrial/Agricultural etc.)
Deal No……………………date…………………..for M/s………………………
Cr.     Payment Order/DD/TT/Current A/C (Favouring Seller/Buying Agent of the Goods as per purchase contract with the Seller/Buying Agent Deal
No……………………date…………………..for M/s………………………)

(Being the amount of purchase price of Bai-Muajjal goods ………..units
@Tk……………per unit under Deal No……………………date…………………..for M/s………………………)

2.2.    Dr.    Bai-Muajjal Investment Account (Commercial/Industrial/Agricultural etc)
for Remittance
Commission/ Transportation Cost/Transit Insurance/ Insurance Premium etc. incurred against Deal No……………………dated…………………..for M/s………………………in connection with purchase

Cr.    Remittance Commission/ Cash or Payment Order for the Conveyance TA/DA/ Transportation Cost / Transit Insurance Premium/ Godown Rent, Godown Insurance, Godown Staff Salry, Agency Commission etc., if any, incurred by the Bank in connection with the purchase of goods and before delivery of the same to the Client under Bai-Muajjal Investment A/C No……………… Deal No…………………… dated………………….. for M/s………………………

2.3. In case the Bank fails to take delivery / procure the goods from the Seller or Supplier of the goods and the Supplier paid back the purchase price of the goods paid to him in advance the following entities shall be passed:

Dr.     Cash / Supplier / Seller’s / Buying Agent’s A/C /P.O Payable A/c. I.B. General A/c./ Balance with Other Bank A/C. No………………..of M/s………………………………….
Cr.    Bai-Muajjal Investment A/C No………………………………..
Cr.     Client’s Current Account No……………( refund of cash security deposited by the Client earlier)
(Being the purchase price refunded by the Producer/Seller/Suppliers/Buying Agent).

3. After execution of Bai-Muajjal Agreement and delivery of the goods by the Bank to the Investment Client(s)
3.1    Dr.    Bai-Murabaha Investment A/C No ………………………………………… Deal
No…………………… dated………………….. of the Client M/s ………………….
(Being the profit amount on the goods payable by the Client). It may be noted that the total cost price, profit charges etc. shall be entered in the respective column in the Investment ledger)
Cr.     Profit Receivable A/C. (Bai-Muajjal Investment A/C No…………………………………… Deal No…………………… of M/s………………………)
Being the amount of Bank’s profit on the Bai-Muajjal Investment A/C No……………… Deal No…………………… dated………………….. of M/s……………………… (Client) ……………………..)
4.    Storage, Insurance and Maintenance Cost, if any, incurred after sale of goods to the client (Normally, the cost shall be paid by the client from his own sources): In case, the client fails to pay the same charges in Cash at the moment, the bank will pay the same to the Debit of Investment A/C of the client passing the following entries with the recourse to recover the same from the immediate next payment of the client:

Dr.    Bai-Muajjal Investment A/C ……………… Deal No…………………… dated………………….. of M/s………………………
Cr.    Cash or Payment Order favouring the beneficiary.
(Being the …………….expense………………incurred in connection with the storage, maintenance insurance of the goods after sale of the same to the client with proper advice to the client.)

5.    Recovery / Reimbursement of the Expenses incurred by the bank for maintenance of the Stocks after delivery to the Cleint:
5.1.    Dr.    Cash / Current A/C of the Client.
Cr.     Bai-Muajjal Investment A/C No ……………… Deal No…………………… dated………………….. of M/s………………………
(Being the amount recovered against expense such as Insurance Premium, Godown Staff Salary. Godown Rent etc. incurred by the bank for maintenance and storage of the stocks. It may be noted that any amount paid by the Clent shall first be credited towards adjustment of these charges)
5.2.    While Recovery / payment is made by the client for adjustment of the investment account.
Dr.    Cash / Current A/C of the Client.
Cr.    Bai-Muajjal Invest A/C No……………… Deal No…………………… dated………………….. of M/s………………………
(Being the amount of principal and profit realized from the Client)

It may be noted that any amount paid by the Client towards adjustment of his Investment A/C shall be Credited proportionately towards principal and time apportioned profit amount of the Bank.
6.    While transferring the proportionate profit from Profit Receivable A/C to the Investment income A/C on the deal for each month.

Dr.    Profit Receivable A/C
Cr.    Investment Income A/C. (Bai-Muajjal-Commercial / Industrial/ Agricultural)

(Being the amount of Proportionate profit for the month of …………….year……………

7.    While allowing rebate for early adjustment of Banks dues: The following entries shall be passed.

Dr.    Profit Receivable A/C./ Investment Income A/c (if excess amount of profit was transferred to Investment Income A/c.)
Cr.    Bai-muajjal Investment A/C No……………… Deal No…………………… dated………………….. of M/s………………………

    (Being the amount of rebate allowed for adjustment of the Investment A/C in lump sum but very nearest to amount to be arrived at the calculated rate of profit (R.R.%)

8.    While Charging Compensation for overdue period:

Dr.    Bai-Muajjal Investment A/C No……………… Deal No…………………… dated………………….. of M/s………………………………………………
Cr.     Sundry Deposit: Compensation charged for the overdue period form …..to …..)

    Being the amount of compensation charged for the overdue period from ….to ………)

If the investment A/C becomes overdue, send the proposal / R.C. Memo to the review committee to have their decision regarding compensation. No Compensation shall be imposed before getting the decision of the Review committee. In case where R.C. decides not to impose compensation, the following entries shall be passed:

Dr.    Sundry Deposit: Compensation Realisable A/C
Cr.    Bai-Muajjal Investment A/C

I hope my articl

Publish Post

e of Bai-Muajjal, will help interested readers of islamic banking.

AL HISBA

2011-06-16T08:17:00.000-07:00

What is AL HISBA?

The holy Quran visualizes every Muslim to play a positive role in the propagation of good (Ma’ruf) and suppression of evil (Munkar). It has been made an obligation on a section of the people to remain engaged in it (Fard Kifaya). The Islamic State has been enjoined to institute arrangement to oversee the implementation of this injunction. It is both material and spiritual compulsion on the part of an Islamic State. Hisba is the state institution created for the purpose. It is the institution to promote what is proper and forbid what is improper (amr bil ma’ruf wannahi anil munker). In short Hisba is an institution established by an Islamic Government to oversee the implementation of good (Ma’ruf) and elimination of evils (Munkar). The Chief of Hisba was known as Muhtasib. Different other terms were also used to mean the Muhtasib in different areas of the Muslim World.

Development of Al Hisba as an Institution:

Besides devising a code of approved behaviour the holy Prophet (SM) took care to institutionalize the perpetuation and preservation of this code by enjoining upon everyone to engage in amr bil ma’ruf wa-nanahi anil munkar. In a number of traditions the Prophet (SM) has been reported to emphasize this role for every Muslim. He himself would, so often, undertake inspections of markets to see that the merchants did not engage in improper behavior. Wherever he would see someone indulging in an evil he would forbid him. This function he carried out both as Prophet of Allah and as head of the Islamic State. In this regard, the Prophet (SM) has been termed as the first Muhtasib in the Muslim history. Subsequently when his personal engagements increased he appointed Sa’id b. Al-As b. Umayyah as Muhtasib in Makka and Umar b. al-khattab in Madina.

The first four Caliphs of Islam carried out the functions of Muhtasib themselves, although there are reports of the appointment of a market officer by the Caliph Umar. The provincial governors during this era acted as Muhtasibs on behalf of the Caliph. A separate department of Hisba, with a full time Muhtasib by qualified staff (known as Arifs and Amins) was introduced by Abbasid Caliph Abu Ja’far al-Mansur in 157 A.H. He appointed Abu Zakariyah Yahya b. Abdullah as Muhtasib. With the expansion of the jurisdiction of the Caliphate the office of the Muhtasib also expanded and assumed an increased number of functions. The institution of Hisba moved along with Muslims in the western provinces of Spain and North Africa and remained an integral part of the state even after the split of the Baghdad Capliphate. Similarly the office of Muhtasib was an important department during the rule of Fatimids, Ayyubids and Ottomans. In India although a formal Hisba department did not exist, yet during the Sultanate period a Muhtasib and a Qadi was invariably appointed whenever an area was annexed to the state. The Mughals did not feel easy with the institution of Hisba due to their own lax moral standards and replaced it with the office of Kotwal who had a much more limited jurisdiction than the Muhtasib. The institution of Hisba remained in vogue during the entire Muslim period of history, though it has been termed differently in various regions. For example, in the eastern provinces of Baghdad Caliphate the officer in charge was Muhtasib , in North Africa he was Sahib al-suq, in Turkey-Muhtasib aghasi and in India a Kotwal.

In certain cases the offices of Qadi (justice) and the Muhtasib were entrusted to the same person. At other places the police department (Shurta) and the Hisba were headed by the same officer. And at still other places the three officer were manned by one man. But the functions of Muhtasib were clearly distinct from those of a Quadi and Shurta.

Functions of Muhtasib: The responsibility of a Muhtasib was enormous. He was responsible to over see the position of implementation of Islamic Sharia in Public and Private affairs and to suggest appropriate corrective measures where necessary. The functions of a Muhtasib could be classified into three categories. They are as follows:

1.   Performance of Ibadat:

First, the Muhtasib was responsible to see that the community as a whole had proper organization and facilities for performance of Ibadat. The maintenance of Mosques, appointment of Muezzins and Imams, arranging daily prayers, Friday congregations and Id prayers were some of his duties. Similarly he would object to any willful non-observance of any other obligation of the Sharia by individuals or by the community. These functions of the Muhtasib may be adopted even now, if an office to this effect comes into being.

2.   Implementation of Adle (Justice):

Second, the Muhtasib was concerned with the implementation of Adle (Justice) in the society. He would try to enforce fair play among different economic factors to minimize possibilities of exploitation from the economy. Consequently, we find a long list of such instructions, which prescribe inspection of weights and measures, metallic content of coins and quality of food products. Similarly the Muhtasib would check manipulation of prices, supplies and production, monopolistic collusions, cheating, fraud and any other form of inter-sectoral inequity. In brief, he had to intervene wherever the economic flows were manipulated by the economically powerful individual or groups to their selfish ends. This area of the Muhtasib’s functions needs to be recast to the present day modes of production, distribution and exchange. The spirit of Adl has to be preserved while defining roles for various economic agents.

3.   Various Municipal Services:

Third, the Muhtasib paid special heed to various municipal services, especially hygienic conditions in the town. Perhaps the Muhtasib was the only municipal officer in the Muslim society. He would look into the entire municipal administration such as street lighting, removal of garbage, architectural designs of buildings, water supply and antipollution sanctions. Obviously, need for smooth availability of these services on an efficient scale has only increased these days.

Necessity of Al Hisba in Economy:

a.    To manage economic equilibrium
b.    For regulation of supply
c.    For price control
d.    For looking after credit structure
e.    To ensure ownership rights
f.    To look after proper utilization of Manpower
g.    To enhance efficiency in the public sector

Eligibility of Muhtasib:

Traditionally, the Muhtashib was a free Muslim male with a high degree of integrity, insight, reverence and social status. He was supposed to be scholar of the Sharia (most often competent for Ijtihad) with a high degree of in-depth knowledge in the social customs and habits. Of the qualities of a Muhtasib Ilm (knowledge), Rifq (kindness) and Sabr (patience) were considered to be of prime importance.

Present state of Al Hisba:

Al Hisba is almost a forgotten but unparallel contribution of the Muslim to human civilization. It was necessitated by the Muslim to ensure the facilities of prayer and making the life easier, specially for harmonious growth of the economy. Al Hisba was existant in some form or other in Muslim countries so long they were in possession of political power. With the fall of Muslim rule the Hisba was either ignored or transformed into a pure secular institution. Spiritual aspects of Al Hisba were then segregated as they took these as irrelevant to state ship and Mundane aspects of Al Hisba were entrusted with several departments in different names. Saudi Arabia is perhaps the only Muslim country which has retained to this day the religious wing of Al Hisba intact to large extent although it too has distributed the secular functions to different Depts. & Ministries.

Some Western Countries have introduced the office of Ombudsman to look into complaints against administrative conduct of state functionaries. Some Muslims are also heard to plead for introduction of the office of Ombudsman. But we think an institution adapted to the moral fiber of the present day Muslim Societies would be just in the tradition of having a Muhtasib.

Ref: Al Hisba in Islamic Economy by Muhammad Akram Khan

BASEL-ii IMPACT IN CREDIT RISK MANAGEMENT

2011-05-27T07:36:00.000-07:00

Basel-II implementation is challenging. For such event, banking sector needs services of techno- human resources. Why? The reply is to combat multiple risks facing the financial sector. In order to address high tech information technology, Complex business transactions, derivatives and various swaps has been significantly increasing the risk in banking sector.
One important aim of Basel-II initiatives is international convergence of Capital standard. Capital is very important for banks as it is a business not on money of the people. Capital is a cushion against their business loss, it promotes public confidence and measures soundness and stability. Since 2oo3, Bangladesh Bank introduced risk management practices focusing on five Core risk areas such as Credit risk, asset and liability balance sheet risk, foreign exchange risk, Internal Control and Compliance risk and money laundering risk and Information Technology risk. The simple fact is that banks are doing Business with depositor’s money which is repayable 100 percent. Fund is invested in risky investments. Therefore, in order to Judge the financial health of the bank, it is necessary to see whether banks are investing the money cautiously or not. All stakeholders including regulators and depositors are interested to know how the banks are performing.

The Basel-II accord came into effect in our Country- from January, 2009 alongside the Basel-I to Consolidate Capital base of the Banks. The banks were allowed to follow both Basel-II and Basel-I frameworks in 2009 to Calculate their Capital adequacy. But the Banks are implementing Basel-II framework from January, 2010. The year 2009 was considered a trial period for the banks for improving their efficiencies to implement Basel-II accord from 2010.

Our banking sector, in Bangladesh, started parallel run of Basel-II on January 01, 2009 and a full-fledged run of Basel-II is going on from January 01,2010.

Basel-II accord describes three-tier concept with a view to complying with the requirements which are designed to encourage the banks to strengthen their capital positions considering their risk, supervisory review process and market discipline. In Basel II accord, the total capital of a banking company has been segregated as tier-one capital, tier-two capital and tier-three capital.

Tier-one capital, also considered as core capital, mainly comprises of highest quality capital elements which include the amount of funds contributed by the owners of the banking company in exchange for shares or stock as paid-up capital, share premium account that represents the excess value of a share of stock above its par (face) value and which is non-repayable in nature, statutory reserve which is kept at least 20% of pre-tax profit as per sec.24 of BCA, 1991 until the reserve e along with share premium account becomes equal to bank's paid-up capital, the balance of general reserve, the amount of earnings which has been retained in the bank as un-distributable portion of profit or retained earnings after making payment of appropriation items including dividend, the bank's minority interest in subsidiaries that represents the bank's ownership shares in the related business, non-cumulative irredeemable preference shares which pay a fixed rate of dividend and dividend equalization account which is maintained to insure payment of dividend each year at a certain rate.
Tier-two capital, also called supplementary capital, covers some items which fall short of some of the features of the core capital in terms of readiness and supporting quality of the capital. Tier-two capital includes general provision of unclassified loans and advances, special mention account and off-balance exposures, 50% of asset revaluation reserves which represent the difference between the book value and the re-valued amount of land and buildings of the bank, all other preference shares except ones listed under core capital, subordinated debt that does not have liquidity date or is perpetual in nature and limited to use up to 30% of tier-one capital exchange equalization account which arises from exchange gain due to devaluation of local currency with foreign currencies and up to 50% of revaluation reserve of securities which holds for transaction motive.

Tier-three capital, another sort of supplementary capital, is essential for meeting partial capital requirements of market risk of a banking company which may arise from trading book. This sort of capital consists of short term subordinated debt. Subordinated debt means and unsecured debt mainly extended to the borrowers by its sponsors subordinated to the claim against the borrowers and documented by a formal subordination agreement between the providers and the borrowers. Subordinated debt-holders have a prior claim over common and preference shareholders against the bank's earnings and assets.

The sum of the above mentioned three tiers of capital shall be at least 10 per cent of risk weighted assets of on-balance sheet and off-balance sheet items of a bank. This amount of capital is termed as adequate capital of a bank. In addition, to manage adequate capital, a banking company is to follow a number of constraints in its capital structure. First the ratio of core capital (Tier-one) to risk weighted assets must be at least 5.0 per cent. Second, the total of tier-two and tier-three capital shall not exceed the total of tier-one capital. Third, a minimum of about 20% of market risk needs to be supported by tier-one capital. Fourth, supporting of market risk from tier-three capital shall be limited up to a maximum of 20% of a bank's tier-one capital that is available after meeting credit risk capital requirements.

However, to determine each bank's total eligible regulatory capital, banks are required to make deductions from Tier-1 capital some additional items including book value of goodwill, shortfall in provisions required against classified assets, and remaining deficit on account of revaluation of investments in securities after netting off any other surplus on the securities. The banks must meet minimum capital requirements because capital plays some important roles in supporting the daily operations and ensuring the long-term viability of a financial institution. Capital provides a cushion against the risk of failure by absorbing financial and operating losses until management can address the bank’s problems and restore the bank’s profitability. Capital provides the funds needed to get the bank chartered, organized and operating before deposits come flowing in. A new bank needs start-up funding to acquire land, build a new structure, and equip its facilities etc., even before opening day.

Capital promotes public confidence in a bank and reassures its creditors /depositors of its financial strength. So, it must be strong enough to reassure borrowers that the bank will be able to meet their needs. Capital provides funds for the organization’s growth and development of new services and facilities.

Bank's Credit or Loan facilitiy Types

2011-05-01T01:06:00.000-07:00

Credit The word "Credit" is derived from the Latin word Credo or Krado meaning I believe. It is usually defined as one's ability to buy to a promise to pay. From the Banker's point of view Credit is the confidence of the lender on the ability and willingness of the borrower to repay the debt as per schedule of repayment.

A bank provides loan to a company, with a fixed maturity and often featuring amortization of principal. If this loan is in the form of a line of credit, the funds are drawn down shortly after the agreement is signed. Otherwise, the borrower usually uses the funds from the loan soon after they become available. Bank term loans are very a common kind of lending.

In other words, a loan that an individual or a business owner gets Atom a bank is called Bank Loan.

Types of Credit:
Credit may be classified on Various Basis. These are
• FUNDING
• TERM
• SECURITY
• SECTORAL
• CLASSIFICATION STATUS

Commercial Banks make credit in different forms. All types of credit facilities may broadly be classified into two groups on the basis of Funding.
1. Funded Credit
2. Non Funded Credit

Funded Credit
Any type of credit facility which involves direct outflow of Bank's fund on account of borrower is termed as funded credit facility. Funded credit facilities may be classified into four major types as below :
• Loans
• Cash Credit
• Overdraft
• LIM
• PC
• Bill Purchased/Discount
• Others

1) Loans
(a) Demand Loan : It refers to those loans that are repayable on demand by bank. In addition, it refers to those contingent and other liabilities that become forced loans (if there is no pre-sanction as regular loan). Example of demand loans is forced LIM.
(b) Term Loan : It refers to those loans that are repayable in a definite period and as per definite repayment schedule. Continuous Loan : It refers to those loans in which transactions can be made without having any definite repayment schedule, but there is a last date for repayment and a limit. Examples of continuous loan are OD, CC etc.

2) Cash Credit (CC)
a) Cash Credit Hypothecation (CC Hypo) Under this agreement borrower can borrow any time with in the agreed limit for certain period to meet their working capital need. Cash credit allowed against hypothecation of goods.
b) Cash Credit Pledge (CC Pl) Under this agreement borrower can borrow any time with in the agreed limit for certain period to meet their working capital need. This type of facility is always provided against Pledge of goods.

3) Over Draft (OD) Basically this is an agreement between banker and his customer by which the later is allowed to withdraw over and above his credit balance in his current account. Overdraft Facility may be allowed generally on the following ways:
• Overdraft against Salary
• Overdraft against Guarantee
• Overdraft against term deposit as FDR/DPS etc
• Overdraft against Bill Receivable (Work Order)
• Overdraft against Stock/Raw Materials

4. LIM (Loan against Imported Merchandise)

Loan against the security of merchandise imported through the bank may be allowed on pledge of goods, retaining margin 'prescribed on their landed cost, depending of their categories and credit restrictions imposed by the Bangladesh Bank. Branches obtain a letter of undertaking and indemnity from the parties, before getting the goods cleared through LIM account. LIM may be created in two ways :
i) LIM on importer's request
ii) Forced LIM. LIM is post shipment import finance.

5. Packing Credit
This type of credit is sanctioned for the transitional period from dispatch of the goods till negotiation of the export documents. The drawings under Export cash credit (Hypothecation/Pledge) limit are generally adjusted by drawing in packing credit limit which is, in turn, liquidated by negotiation of export documents. It is pre-shipment export finance.

6. Bill Discounted/ Bill Purchased

a) Bill Discounted
Bank allows credit to the clients by discounting Usance bills (Bill of Exchange) which matured after a fixed tenor. It may be clean or documentary.

b) Bill Purchased
Bank allows credit to the clients by Purchasing Demand bills (Bill of Exchange) which the bank collects immediately. It may be clean or documentary.

7. OTHERS
Other Important funded credit facilities are :
• Advance against hypothecation of Vehicles ( Transport Loan) • House Building Loan • Consumer Loan • Agriculture Loan -Farming -Non Farming • Weaving Credit • Micro Credit • Consortium Loan • Syndicate Loan • Lease Financing • Hire Purchase • Import Financing - Loan Against Imported Merchandise (LIM) - Payment Against Document (PAD) • Export Financing -Packing Credit (PC) -Trust Receipt (TR)

Consortium Financing:

A grouping of a number of companies in order to promote a common purpose, e.g. a consortium bank can be set up by three or four other banks for the purpose of joint financing of a project which is considered too big for the resources of any individual bank/institution. For such advances, financial intuitions appoint a leader of the consortium who takes the loan account.

Advantages:
• spreading and sharing of risks
• making use of collective wisdom and expertise
• providing better service and
• taking care of the units complete financial requirements

Syndicated Loan:
Syndicated loan means joint financing by a group of banks or financial institutions to a borrower against common security. This is done basically to spread the risk. One bank in the syndicate usually acts as a lead bank for the other institutions. Lead bank co-ordinates the activities at various stages of handling the deal. i,e. appraisal, sanction, documentation, sharing of security, disbursement, inspection, follow-up, recovery etc. The borrower will create, inter alia, in fixed assets and shall execute necessary charge documents in favour of respective banks separately or collectively as are called upon ranking pari passu charge on the securities.

Lease Financing:
The Leasing is defined as contract between a leasing company (called as "the Lessor) of the one part and the user of the equipment-asset (called "the Lesse") of the other part whereby the lessee/loanee agrees to pay the lessor an agreed amount of money as rentals over a specified/obligatory period of time in consideration for the use of capital equipment owned by the lessor. The lessor retains ownership if the equipment and seeks to recover the capital cost of the equipment puls a profit margin out of the lease rentals payable during the period of the lease.

Under this system of finance, financing company of bank initially purchases the assets and then leases to the user for a specified time in exchange of payments of rent on monthly or quarterly basis.
There are two types of lease recognized under this system of investment. Such as (1) Operational Lease; and (2) Lease Purchase.

NON FUNDING:
Any type of credit facility where there is no involvement of direct outflow of Bank's fund on account of borrower is termed as Non funded credit facility. Though this type of Credit facilities are primarily non-funded by nature but at time it may turn into funded facilities. As such liabilities against these types of credit facilities are termed as contingent liability.

The major Non Funding Credits are • Letter of Guarantee • Letter of Credit •Performance Bond • Acceptance

On the basis of term Credits are Classified as:
• Short Term • Mid Term • Long Term
Short Term : Upto 1 year
Mid Term : Upto 5 Years
Long Term : More than 5 Years

Small and Medium Enterprises (SME):
The definition of SME varies from one country to another and from one time to another in the same country depending upon the pattern and stage of development, Government policy and administrative set up of the particular country.

But according to prudential regulations for small enterprises financing- Small Enterprise means an entity, ideally not a public limited company, does not employ more than 25 persons (if it is service concern) and 25 persons (if it is a trading concern) and 50 persons (if it is a manufacturing concern) and also fulfills the following criteria :

a) A service concern with total assets at cost excluding land and building from Tk. 50,000 to Tk. 50 lac.

b) A trading concern with total assets at cost excluding land and building from Tk. 50,000 to Tk. 50 lac.

c) A manufacturing concern with total assets at cost excluding land and building from Tk. 50,000 to Tk. 1.50 crore.

Medium Enterprise:
Medium enterprise means that enterprise which is ideally not any public limited company and fulfills the following criteria:
a) Service Concern: In the case total fixed assets excluding land and building amount to BDT 50 Lac to 10 crore and/of working manpower does not exceed 50 persons.
b) Trading Concern: In the case total fixed assets excluding land and building amount to BDT 50 Lac to 10 crore and/of working manpower does not exceed 50 persons.
c) Manufacturing Concern: In the case total fixed assets excluding land and building amount to BDT 1.50 crore to 20 crore and/of working manpower does not exceed 150 persons.

>On the basis of Security Credits are Classified as: • Secured Clean • Clean

>On the basis of Sector Credits are Classified as: • Public • Private • Commercial • Industrial • Transport • Agriculture • Micro Credit • Housing

>On the basis of CRG Loans and Advance are Classified in Category : • Superior • Good • Acceptable • Marginal/Watch list • Special Mention Account (SMA) • Sub Standard (SS) • Doubtful (DF) • Bad and Loss (BL)

>On the basis of Classifications Loans and Advance are Classified in Category :
• Continuous Loan • Demand Loan • Term Loan (1) Term Loans repayable within 5 years (2) Term Loans repayable more than 5 years • Short Term Agricultural Credit & Micro Credit.

Producing Electricity from Bryophyllum Plants

2011-04-30T23:44:00.000-07:00

Bryophyllum plant can produce electricity. Bryophyllum plant is known as “Pathorkuchi” in Bangladesh. But it bears different names in different countries. In fact its scientific name is Bryophyllum. Its leaf is used as herbal medicine for various diseases. For this it is called Miracle Leaf.

Leaves of Bryophyllum plant contain Acidic Hydrogen Ion and Alkaline Hydroxile Ion. Acidic hydrogen ion helps to produce electricity. The leaf contains 78% acidic hydrogen ion. That is why the juice of this leaf can be used for the purpose of producing electricity.

Mechanism for production of electricity:
In order to produce electricity from the leaf of the Bryophyllum, first of all, its leaves have to be blended by blenders as such. Thereafter a mixture, containing pest and water with proportion 8:1, will have to be prepared. Then after pouring such mixture in to a plastic pot an Bronze and a Zink plate are to be merged in to the mixture. And then and there, a chemical reaction is taken place, which in turn, creates positive and negative potentiality. As a result the conduction of electricity is created. And thus electricity can be produced for usage. In order to get much more electricity many plants of Bronze and Zink are to be kept under the mixture parallely. In other words, the larger quantity of mixture and the larger numbers of such plates the quantity of electricity is produced.

Growing Bryophyllum is very much easy. This plant grows whether its leaf is kept on the ground. This plant can be cultivated in a vested land, roof top of house, couryard ward and tubs whatsoever. Its leaves can be used for producing electricity within a month of cultivation of the plants. Once a mixture is prepared for producing electricity, it serves the purpose for one month continuously. By that time new leaf can be found from the plants, which will be used again for producing electricity. It is observed that to produce 50 kilowatt electricity 400 kg of leaves are required.

Bank Account Opening/Closing, Lapses, Precaution and Remedy

2011-03-05T07:19:00.000-08:00

Common consideration for opening accounts
1. The law of contract governs opening of accounts. Contract between the bank and the customer. Account Opening forms when signed, contract is executed.
2. Any adult person of Bangladesh national can open account with the bank.
3. Minor cannot enter into contract except for the necessaries of life and under certain special circumstances. Natural/Legal guardians can open account in the name of the minor.
4. Insolvent and mentally unsound person can not execute any contract hence can not open account.
5. Proposed account holder must remain present at the time of opening of the account and he must sign on the account opening form and specimen signature card in presence of the Manager/Authorized officer.
6. Photograph of the account holder must be obtained (except for FDR account). The introducer must attest photograph of the account holder.
7. The account holder must be properly introduced (except for FDR account).
8. Recording of nominee has been made compulsory in case of any account in the name of individual. Photograph and signature of the nominee are to be obtained and the account holder must attest the same.
9. Branch Manager must open the account or accord permission in writing to open the account by the authorized official.
10. Certificate from the local Chairman/Member of the Union Parishad/Municipal Corporation or from any respectable person acceptable to the bank.
11. Copy of Passport, if available.
12. Certificate relating to date of birth of the account holder.
13. Certificate of the Employer in case of service holder.

Papers to be obtained for opening accounts.
Common for all accounts.
1. Account Opening Form : Duly filled in and signed by the account holder.
2. Photograph of the account holder : Duly attested by the introducer.
3. Nominee — Photograph and signature of the nominee duly attested by the account holder.
4. Standing Instruction, if any.
5. KYC given by Bangladesh Bank must be followed meticulously.
6. Different related certificates.

Introducer of the accounts.
1. Satisfactorily conducted account holder of the branch. 2. Dormant/Inoperative account holder must not be allowed to introduce a new account holder. 3. Elite, responsible person of the locality may be introducer, if acceptable to the bank. 4. Signature of the Introducer must be verified before opening of the account.

Letter of Thanks
1. Letter of thanks is to be sent both to the account holder and also to the introducer under registered post with A/D.
2. Acknowledgement to be preserved with the account opening form for future use.
3. In case such letter is returned undelivered, proper investigation to be made to set the thing in right shape.

Specimen Signatures of the account holders.
Specimen signatures are usually kept in Signature Cabinet under supervision of the authorized official. This Signature Box must be kept in the Strong Room overnight under proper lock and key. The Signature Box must not be allowed to be handled by any unauthorized person.

Dormant / Inoperative Accounts
Operation in the Dormant / Inoperative accounts must be handled directly by the Branch Incumbent personally.

Current Account : Dormant - If not operated for 6(six) months. To be scrutinized at the end of each quarter for proper marking.
Inoperative — If not operated for 2(two) years. To be scrutinized in December, each year for proper marking/transfer.

Savings Account : Dormant - If not operated for 12(twelve) months. To be scrutinized at the end of each quarter for proper marking.
Inoperative — If not operated for 2(two) years. To be scrutinized in December, each year for proper marking/transfer.

Account Transfer In/Out
Proper care must be exercised while transferring any account to other branch similarly when any account is transferred-in from other branch.
1. All such transfer cases must be brought to the knowledge of the Branch Manger.
2. Signature of the account holder on the application to be verified and the reason for transfer to be examined.
3. Unused cheques to be received back from the account holder before any such transfer.

Closing of Accounts by the account holders
1. Application of the Account Holder is to be obtained stating reason of the closing.
2. Signature of the Account holder to be verified.
3. Permission of BM to be obtained on the application.
4. Unused cheques to be surrendered by the account holder and to be destroyed by the Branch Manager keeping proper record.
5. Related charges/commission to be realized.
6. Closing balance to be paid to the account holder by the cheque drawn by the account holder or by a Payment Order.
7. Account Opening Forms, Specimen Signature Card and other related papers to be marked "CLOSED" and to be filed separately for record.

Closing of Accounts by the Bank
1. When the account holder is not desirable to the bank.
2. When the account holder is convicted for fraud/forgeries in the court of law.
3. When the account holder is found habitual to draw cheques without prior arranging fund there- against.
4. When bank considers that the concerned account is not remunerative.
5. Any other reason considered fit/justified by the bank.

The account holder must be given prior notice to close the account giving sufficient time for the purpose. The unused cheques must be collected from the account holder and to be destroyed keeping proper record.

Death, Insolvency or Lunacy of any account holder
1. In case of any information regarding death, insolvency or lunacy of any account holder, payment from the account must be stopped.
2. All such matters must be handled directly by the BM on the merit of the situation.

For School, College, Club, Society
1. Names of the members of the Executive Committee.
2. By-Laws/Constitution of the organization.
3. Resolution for opening/operation of the account in conformity with the by-laws.

Accounts of illiterate person - against LTI.
• 3(three) Photographs to be obtained — one with account opening form, one with LTI Card, one with the pass-book.
• LTI of the illiterate person must be obtained in presence of the BM/Authorized official and to be authenticated under full signature of the BM/Authorized official.
• The account holder must come personally against each drawing from the account.
• Account holder must be identified by the BM/Authorized official from the photograph each time and his/her LTI must be authenticated on the cheque.

Accounts in the name of Minors
• No account should be opened in the name of or on behalf of a minor without reference to the Head Office unless a guardian of the property of the minor have been appointed under the Guardian and Wards Act. In such cases account should be opened in the style: X a minor by his Guardian Z.
• The guardian must not be allowed to draw on the account after the minor has become of age nor after his death.
• A minor will attain majority at the age of 21 (twenty one) when a) a guardian has been appointed by the court. b) his property is under the superintendence of a Court of Wards. In other cases minority ceases at the age of 18 (eighteen).
• A minor should not be allowed an overdraft without proper approval of Head Office which may be subject to sanction of the Court.
• The heading of Minor Account: Mr. (Guardian) and (Minor). Payable to either or survivor.
• The date of birth and the date of attaining majority to be recorded in the Form.
• In case of death of the guardian, the money will automatically become payable to the minor but precaution must be exercised prior payment and witness should be obtained.
• In case the guardian is appointed by the court, on the death of the guardian, the minor will again have to apply to the court for payment of the money.
• Certified copy of Court's order should be filed along with the account opening form.

Accounts in the name of Blind Persons:
• The blind persons are competent to contract and therefore are authorized to open accounts in the banks
• Proper introduction to be obtained.
• The banks should encourage the blind persons to open joint account with a normal person who can operate the account.
• A blind person can also appoint agent to operate his account and in that case, the rules relating to operation of account by the agent are applicable to the accounts.

Pardanashin Ladies (Hezab/Nekab wearing Ladies)
• Due care must be exercised while opening current account of pardanashin ladies as the onus of proving that a pardanashin Bangladeshi lady thoroughly comprehended and deliberately of her free will carried out the transactions lies with the other party to it.
• Accounts may be opened only in special cases when the lady is known to be educated and of good social standing and after the Manager is fully satisfied about the applicant's bonafide.

Lapses in opening of accounts.
Violation of the rules/practice, whether it is willful or oversight is termed as lapses. Ignorance is no excuse in the eye of law. Everybody connected with opening of accounts must be conversant of the related rules/practice.

Common lapses are : 1. Photographs are not obtained. 2. Proper introduction is not obtained. 3. Introducer is not suitable/acceptable as per rules/practice. 4. Letter of thanks not sent to the account holder/ introducer. 5. Acknowledgement of the letter of thanks not preserved properly. 6. Proper address of the account holder is not obtained and the address is not verified in spite of sufficient ground for verification.

Precaution while opening an account
We should always bear in mind that "Prevention is always better than cure." Every officials connected in opening/handling of the accounts must be well conversant of the laws and rules in the matter. Head Office Circulars, Instruction, Bank Book of Instruction (BBI) regarding opening of the accounts must be followed meticulously with due care and responsibility for the personal interest of the official concerned as well as greater interest of the Bank.

Special attention to be given on the following points
1. Photographs must be attested by the introducer to be ensured.
2. Photograph to be affixed on the Account Opening Form and that on the Specimen Signature Card in such a way that the branch's round seal and signature of the authenticating official cover both part of the photo and that of the Form/Card.
3. Introducer must be acceptable to the bank as per norms.
4. Account holder must remain present before the authorized officials at the time of opening the account and must sign on the Account Opening Form, Specimen Signature Card in presence of the authorized official.
5. The BM/Authorized officials must authenticate specimen signatures.
6. Number of specimen signature to be recorded on the card in red ink to restrict unauthorized inclusion of any fraudulent signature therein.
7. Rules relating to issuance of cheque book must be followed meticulously.
8. Periodical segregation/marking of accounts as to Dormant/Inoperative to be ensured. First withdrawal from such accounts must be attended properly to the satisfaction of the bank.
9. Standing Instruction of the customers to be diarized for timely execution.
10. Closing of accounts to be handled properly.

Remedy for the lapses
Whether the lapses are considered as an omission or commission, proper steps to be taken to set the things in right shape.
1. If any documents/papers are found not obtained/short, the same is to obtained without any further delay.
2. In case of any fraudulent activity, the operation in the account to be stopped.
3. The matter to be referred to the Head Office/Controlling Office immediately if the situation is beyond the control of the branch.
4. In case of any legal complication/criminal offence, the matter to be referred to the local Police Authority taking prior permission from Head Office/Controlling Office.

RELATIONSHIP BETWEEN BANKER & CUSTOMER

2011-02-18T08:48:00.000-08:00

Before we take up the relationship that exists between a banker and his customer, let us understand the definitions of the terms banker and customer.
Definition of Banking:
According to the section 3 of the Negotiable Instrument Act 1881, "Banker includes persons, or a corporation or a company acting as bankers."
According to the section 5(0) of the Banking Companies Act 1991, "Bank Company" means any company serves transactions (Banking Business in Bangladesh) including new bank and specialized banks.
According to the section 5(P) of the Banking Companies Act 1991, "Banking Business" means accepting, in order to lend or invest, of deposits of money from the public which will be paid on demand or otherwise and will be withdrawal by cheque, draft, order or otherwise.

The salient features of this definition are as follows:
a) A banking company must accept deposit and lend or invest the same. If the purpose of accepting deposit is not to lend or invest, it does not constitute banking business. In other words, acceptance of deposit with a view to lending or investing the same is the business of banking.
b) The definition specifies the time and mode of withdrawal of deposits. The deposited money must be repayable to the depositor on demand made by the latter or according to the agreement reached between the two parties. The most important point here to be noted that the banker does not refund the money on his own accord, even if the period for which it was deposited expires. The depositor must make a demand and the withdrawal should be effected through cheque, draft, and order or otherwise.

It is, thus, clear that the underlying principle of the business of banking is that the resources mobilized through the acceptance of deposits must constitute the main stream of funds which are to be utilized for lending or investment purposes. A bank is, thus, an intermediary and deals with the money belonging to the public.

Definition of Customer:
The term "Customer" has not yet been statutorily defined. Generally, the term customer means a person who has an account with bank. Banking experts and legal judgments in the past, however, used to qualify this statement by laying emphasis on the period for which such account had actually been maintained with the bank.
Sir John Paget was one of those experts from the past. According to him, "to constitute a customer, there must be some recognizable course of habit of dealing in the nature of regular banking business."
This definition from Sir -John Paget lays emphasis on the duration of the dealings between the bank and the customer. According to his view, a person does not become a customer of the banker on the opening of an account; he must have been accustomed to deal with the banker before he is designated as a customer.
The emphasis on duration of the bank account is now discarded. According to Dr. Hart, "a customer is one who has an account with banker or for whom a banker habitually undertakes to act as such."
The above view point was confirmed by the Kerala High Court in the case of Central Bank of India Ltd., Bombay V. Gopinathan Nair and other. The lordship observed:
"Broadly speaking, a customer is a person who has the habit of resorting to the same place or person to do business. So far as the banking transactions are concerned he is a person whose money has been accepted on the footing that the banker will honor his cheques up to the amount standing to his credit, irrespective of this connection being of short or long standing".

Thus, in order to constitute customer, a person should satisfy the following conditions:
a) He should have an account with bank; and
b) The dealings should be of banking nature.

RELATIONSHIP: The relationship between a banker and customer depends upon the type of service rendered by the banker. The primary relationship between a banker and customer is legal based on contract as per Contract Act, 1872. However, the most valued relationship for the banking business is the behavioral relationship.

LEGAL RELATIONSHIP:
I) Debtor and Creditor;
II) Principal & Agent;
III) Pledgor & Pledgee;
IV) Mortgagor & Mortgagee;
V) Lessor & Lessee; and
VI) Trustee & Beneficiary.

DUTIES AND OBLIGATIONS OF BANKER:
The primary relationship between banker and his customer is that of a debtor and a creditor. This relationship imposes the following special obligations on the banker:
A) OBLIGATION TO HONOR CHEQUE: The deposits accepted by a banker are his liabilities repayable on demand or otherwise. The banker is, therefore, under a statutory obligation to honor his customer's cheque in the ordinary course of business. Section 31 of the Negotiable Instrument Act, 1881, lays down that:
" The drawee of a cheque having sufficient funds of the drawer in his hands, properly applicable to the payment of such cheque, must pay the cheque, when duly required so to do and in default of such payment must compensate the drawer for any loss or damage caused by such default."
Thus, a banker is bound to honor his customer's cheques provided that following conditions are fulfilled:
1) There must be sufficient funds of the drawer in the hands of the drawee. By sufficient funds is meant that funds at least equal to the amount of the cheque presented for payment. Any over draft arrangement or facility granted in favor of the customer needs to be taken into consideration and payment to be made within the limit.
2) The funds must properly be applicable to the payment of the cheque. A customer might have several bank accounts in his various capacities. If some funds are earmarked by the customer for some specific purposes, the said funds are not available for honoring his cheque. In addition, it is to be noted here that in case of a few special types of accounts can not be drawn upon in the personal capacity of a trustee, executor etc., funds are not available for honoring the customer's cheque in such case.
3) The banker must duly be required to pay the cheque. It means that the cheque, complete and in order, must be presented before the banker for payment.

LIABILITY OF THE BANKER IN CASE OF WRONGFUL DISHONOR OF CHEQUE:
A Banker has the statutory obligation to honor his customer's cheques unless there are valid reasons for refusing payment of the same. In case he dishonors a cheque, intentionally or by mistake, he is liable to compensate the customer for the loss suffered by him.

BANKER'S LIABILITY:
As already noted above, the words "loss or damage" in section mean and include:
I) The monetary loss suffered by the customer; and
II) II) The loss of credit or reputation in the marker.
It is, therefore, to be noted that the banker is liable to compensate the drawer not only for the actual monetary loss suffered by him; but also for the injury to or loss of his reputation, as a result dishonor of a cheque

B) OBLIGATION TO MAINTAIN SECRECY OF ACCOUNTS:
Keeping secrecy means that the state of affairs of a customer's account is not made known to others by any means. The banker is, thus, under an obligation not to disclose , deliberately or intentionally, any information regarding his customers' accounts to a third party and also to take all necessary precautions and care to ensure that no such information leaks out of the account books.
However, the general rule about the secrecy of customers' accounts may be dispensed with in the followings circumstances:
I) When the law requires such disclosure to be made; and
II) When the practices and usages amongst the bankers permit such disclosure.

In addition, the banker has obligations to do the following:
I) To credit the deposited money to the customer's account;
II) To provide customer with the statement of account in an agreed manner or any certificate regarding his account if requested;
III) To abide the stop payment instruction;
IV) To abide by the standing instruction; and
V) To credit interest or pay interest as per rule etc. and
VI) To give or provide customer with financial advisory services.

BANKER'S RIGHT:
a) The banker has the right to return deposit if not in proper manner and time. b) The banker has the right to return the cheque if not drawn properly or in time or for some other reasons. C) The banker has the right to debit the customer's account for any charges, interest and commission if recoverable. d) The banker has the right to exercise lien, right of set-off etc.

RIGHTS OF CUSTOMER:
The customer has the following rights based on his relationship with the banker:
a) To deposit money in his account on time; b) To demand repayment by issuing cheque or written order properly in proper time and place; c) To get statement of account in agreed manner; d) To stop payment of his cheque; e) To give standing instruction; f) To claim interest on his deposit balance in the interest bearing account; g) To claim damages for any loss or damage caused due to wrongful dishonor of his cheque by bank; h) To claim money when the payment is not made in due course; i) To have secrecy of his account etc.

CUSTOMER'S OBLIGATION:
A customer has the following duties and obligations to perform:
I) He must deposit amount properly and in time;
II) He must demand payment issuing cheque or written order properly and he must present the cheque for payment within banking hour;
III) He must pay the bank charges, interest and commission payable;
IV) He must abide by the laws;
V) He must keep his cheque book in his safe custody;
VI) He must inform the bank on time for any loss of cheque leaf or cheque book;

TERMINATION OF BANKER-CUSTOMER RELATIONSHIP:
There are a number of valid reasons which terminates the banker -customer relationship. A few of them is stated below:
I) Notice given to each other with view to closing the account;
II) Upon the death of a customer;
III) When a customer is adjudicated as insolvent by a court of law;
IV) When customer ceases to enter into a contract.

Cheque book: issuance & Delivery of Cheque Book, Lost & Cancellation, Payment of Cheque & Stop Payment

2011-02-04T08:04:00.000-08:00

A cheque is an unconditional written order, bearing date to the banker from the drawer, where maintaining his account to pay on demand a certain specified sum of money expressed in both figures and words, to the named person or his order or bearer.
According to sec-6 of Negotiable Instrument Act (NIA)-1881- A cheque is a bill of exchange drawn upon a specified banker and not expressed to be payable otherwise than on demand.

Parties in a Cheque: There are 3 (Three) parties in a cheques: 1) The drawer - Customer, Account holder, who issue the order. 2) The Drawee - The Banker, on whom the order is issued. 3) The payee - Beneficiary of a cheque who is to receive the payment.

Characteristics of a cheque:
1) Written order
2) Unconditional order.
3) Order on a banker where the drawer maintains his account.
4) Signature & Date.
5) Specified payee- Person or to bearer.
6) Specified amount both in figure & words.
7) Specified 3 (Three) parties - Drawer, Drawee & Payee.
8) Printed format.
9) Payable in legal tender currency.
10) Presentation for payment.

Issuance of Cheque Book:
The deposit accepted by the Banker should be withdrawable by cheque. Withdrawals is allowed by effecting remittances or by book transfer under written instruction of the Account holder.
Though, it seems, to issue a cheque book is an easy task, but various risks are involved The concerned officer have to be more careful and conscious while issuing a Cheque book and remember the prerequisite conditions before issuing a cheque book.

Prerequisite conditions for issuing a cheque Book:
The concerned officer of the branch has to ensure himself about some information which are as follows:

1. First of all, whether the account holder bears the copy of letter of thanks or not. This letter endures the correctness of client’s address.
2. signature of the account holder on the cheques book requisition slip is verified by the authorized officer of the branch.

Formalities to be observed while issuing a cheques book:

While issuing a cheque book the following formalities to be observed:
1. There should be a request from the account holder for issuing cheque book after opening of an account. Subsequent cheque books should be issued only on the strength of the requisition slip only, signed by the account holder as attached to the cheque book.
2. Branch Stamp should be affixed on each leaf of the cheque book with initial of the authorized officer.
3. Writing name of the account holder and his account number on the face/cover page of the cheque book.
4. Writing the name of the account holder, account number, date of cheque issue on the requisition slip attached to the cheque book.
5. If the requisition slip is reportedly lost or destroyed by the account holder, the loss is noted on the banker's record.
6. Cheque book will be issued only by an authorized officer.
7. Account number should be noted on each cheque leaf which is essential for identification of the concerned account easily as well as precaution against fraudulent use of cheque on any other account.
8. Immediately after issuance of a cheque book, its number should be noted in the ledger page of the account/computer against the account be authenticated by an officer.

Delivery of cheque Book:
Before delivery/handing over the cheque book, following steps to be taken:
1. To enter the cheques book in the cheques issue register. The cheque book issue register has the following columns which must be filled in properly.

Date of cheque Issue	Series		Title of Account	Account Number	Signature of receiver with date	Signature of issuing officer
	From	To

Identification of the client who wants to take delivery of the cheque book, whether the receiver of the cheque book is the account holder himself or bearer. In case of bearer, signature of the bearer must be taken on the back page of requisition slip, which must be attested/verified by the account holder.

Payment of Cheque:
Checking points for payment of cheque:
Cheque is payable on due presentation for payment if it is:
a) Issued from the payee Branch.
b) Duly signed by the drawer.
c) Sufficient credit balance in the account.
d) Presented within the stipulated time of banking hour.
e) The cheque is not post dated/stale.
f) The amount in figure and word does not differ.
g) If the signature in the cheques does not agree with that of Signature card.
h) If the cheque is mutilated.
i) If there is material alteration in the cheque.
j) in case of customers death or if the customers died.
k) If the cheque is account payee one.
l) If the account is marked "Stop Payment" or "Gamishee Order" received from the court.

In the event of dishonor of a cheque due to a reason other than valid one, the drawee banker is liable to the drawer for any loss or damage caused thereby as per section 85(1) of NIA.
Passing, means cheques rotate or cross through ledger or computer by an authorized officer of the bank.

Lost & Cancellation of Cheque Book:
Lost:
Incase of loss of cheque book or a leaf thereof, client must have to inform the same to the Bank in written along with a copy of General Dairy (GD). Authorized officer should mark stop payment in the ledger/computer without delay.
Cancellation:
Cancellation means striking out so that it can not be used fluffier. Cancellation must be made by an authorized officer and it is marked from the top to bottom of a cheque.

Procedure of Payment of Cash:
Checking point:
a. Whether the cheque is open or not.
b. Branch Name.
c. Signature, date, amount
d. Obtain signature of bearer
e. Enter the particulars in the token register.
f. Provide token to the bearer
Computer/Ledger Keeper:
a. Checking particulars of cheque.
b. Checking particulars of the Account.
c. If right, posted in the ledger/computer.
d. Affixed posted stamp and put signature.

Cheque passing/checking official:
a. Checking particulars of cheque.
b. Checking posting mark.
c. Checking signature of Account holder.
d. If right, cancelled the signature of cheque.
e. Affixed "pay cash" stamp.
f . Hand over the cheque to paying cashier for payment.

Paying Cashier:
a. Check particular of cheque.
b. Cheque "Posted" stamp signature of Computer operator.
c. Signature of cancellation officials and "Pay cash" stamp.
d. Call back the token foil.
e. Obtain signature of bearer on the back of cheque and tally if.
f. If this ok affixed "cash paid" seal.
g. Pay the amount to its holder
h. Noted the amount of denomination on the back of the cheque.
i. Enter the particular in the paying register.
Note: In case of one stop service all checking formalities will be done at the same counter.

Material Alteration:
Any kind of material alteration must be authenticated by the drawer of the cheque by putting a complete signature similar to the previous one given by the account holder i.e. of change issuer.
Stop Payment of cheque:
Account holder may stop. payment of the cheque issued by him. "Stop payment of cheque” instruction means stopping payment by the bankers which may come from cheques maker through written application or telephonic message if acceptable to the bank.

Reasons behind stop payment of cheques:
Generally, the following reasons are responsible for stopping payment of cheque:
1. Direction comes from the account holder for stop payment.
2. Any notice received regarding lost or stolen of cheque.
3. Injunction imposed by the court/tax office to stop transaction of any account.
4. Notice received regarding death of account holder.

I hope this article about cheque book will help every banker.

Functions of Bank's Cash Department of a Branch

2011-01-29T06:16:00.000-08:00

Functions of cash are one of the most important functions of the Bank. It is of extreme necessity that the cashiers and officers as well as other staffs of the bank should understand this very well. Our main discussion of Cash Department will be on Branch Cash balance, Safe custody of cash, Custody of keys/Duplicate keys, Maintenance of Vault book, Sorting of Notes and Coins, Security measures, Irregularities in the functions of the Cash Department and its' remedial.

Receipt & Payment of Cash:
Cash will be received by the Receiving Cashier/Teller from the customers on bank's printed form called pay-in-slip. The concerned Receiving Cashier/Teller will ensure that the name of the account holder, account number, name of the branch, date, denominations of the notes and coins are legibly written on the pay-in-slips. He/She must also ensure that the pay-in-slips are signed by the person depositing the cash. After counting the cash carefully, the Receiving Cashier/Teller put the 'Cash Received' stamp with date and enters the amount in the Teller's Cash Proof Sheet under a Serial Number which will also be put in the both part of the pay-in-slip with joint signature of the concerned Teller and the Head Teller. In some cases, cash is received on bank's vouchers for various transactions (PO, TT, MT, Commission, VAT etc.).
Payment Cashier/Teller will receive cash from the Head Teller at the out set of the transaction hour. He/She will pay cash against the valid Cheques/Instruments presented by the customers after observing the required formalities of passing the same. He/She must write the denominations of Notes/Coins on the reverse of the Cheque/Instrument as well as obtain signature of the payee before payment. After payment of the cash, he/she will put 'Cash Paid' stamp with date and enter the amount in the Teller's Cash Proof Sheet under a Serial Number which will also be put on the Cheque/Instrument paid. Cash is also paid against Cash Debit Voucher which must be signed by the authorized officer & Manager/Deputy Manager.

Branch Cash Balance Register:
The Tellers make entry in their respective Cash Proof Sheet against receipt and payment of cash which then jotted down to the Reserve Cash Proof Sheet Teller wise. The closing cash balance of the day is calculated by adding the opening cash balance with total amount of cash received minus total amount of cash paid.
The particular of bank's cash balance at the close of business of the day is entered in to the Cash Balance Register. This Register is signed by the Head Teller/Cash In-Charge, Joint Custodian and Manager/Deputy Manager jointly. The physical cash will be checked by the joint custodians/Manager before signing of the Register. The closing cash balance must agree with the Clean Cash Report and Statement of Affairs of the day.

Maintenance of Vault Book:
A Vault Book is maintained in the branch which must always remain in the Strong Room. All notes and coins are entered in the vault book immediately after proper sorting. Ever deposit and withdrawal of cash from the vault/Iron safe should be entered in to the vault book denomination wise. The vault book is to be initialed by all the custodians of cash jointly against each entry. Deposit and withdrawal of cash from the vault/Iron safe is to be regulated as per the insurance limit of the cash (Cash in safe, Cash on counter, Cash in transit).

Safe custody of cash:
After completion of the above mentioned functions, if cash is found physically in order at close of business of the day, the entire cash is kept in the bank's safe vault (Iron safe). The Iron safe is double locked by all the custodians including Head Teller/Cash-In-Charge and Manager/Deputy Manager. When the vault is opened, all the custodians must be present. The Cash Balance Register, Vault Book should be kept in the safe vault. Other important documents/sheets should be kept in the strong room.

Preparation of Cash Position Memo:
The daily Cash Position Memo is prepared by the Head Teller/Cash-In-Charge. The total cash receipt and payment of the day is written in the memo including opening cash balance of the branch. This cash position memo contains the entire cash balance of the branch excluding late receipt and payment if any. The IT Department of the branch will make posting on the basis of this memo to the respective GL head of account before starting day end process in the computer server.

Custody of Keys and Duplicate Keys:
A Key Register is maintained in the branch. All the particulars of the original and duplicate keys of the safe vault, grilled gate, and strong room door are entered in the Key Register. The Register is signed by the concerned custodian of cash and countersigned by the Manager. The custody of the keys must not be handed over without the permission of the Manager.
The duplicate keys of the branch must be deposited to the Main Branch or to the branch authorized by the Head Office. In the absence of the branch of Shahjalal Islami Bank, the duplicate keys may be deposited to the nearest branch of Sonali Bank or Bangladesh Bank as per advice of the Head Office. Before surrendering the keys, all the keys should be greased, labeled and placed to a plastic/wooden box which should be wrapped by a piece of cloth and properly stitched. The box should be signed by the Cash-In-Charge and the Manager jointly and gala sealed accordingly. The duplicate keys may be withdrawn under joint signature of the Cash-In-Charge and the Manager.

Sorting of Notes and Coins:
Notes will be sorted out on the basis of good, torn, mutilated, soiled etc. Torn/mutilated notes should be pasted with thin and light papers as per directives of Bangladesh Bank. Utmost care should be taken for not to receive any fake/forged notes. The holder of the fake/forged notes should be handed over to the police under intimation to the nearest office of Bangladesh Bank. Notes of different denomination must be bundled and stitched/stapled by 100 pieces attaching therewith the bank slip. The attached slip will be signed by the cash officer/money tester counting the pieces and countersigned by the Head Teller/Cash-In-Charge. Soiled notes should be counted separately and kept apart from the good notes which will be used again. Bags of different denominations of coins must be stacked separately from each other.

Security Measures:
Bank has to take extreme security measures to ensure the safety of the cash and other valuables. Some of the measures are as follows:
a) Double lock system: The cash balance is kept in the safe vault inside the Strong room under double lock with joint custody of more than one official.
b) Restricted entry: Entry to the vault and inside the cash counter should be restricted only to the authorized personnel only.
c) Alarm bell: An alarm bell must be set up outside the bank premises with multiple switches for turning it on by different officials. Periodical checks should be done whether the Alarm system is in order or not.
d) Close Circuit Television: CCTV is to be set up covering the cash counter and the Strong room gate. The CCTV must be turned on at the beginning of the transaction hour each day and time to time check should be made whether the same is functioning properly.
e) Insurance of branch cash limits: Insurance of the Cash in safe, Cash on counter and Cash in transit (for the Cash feeding branches) up to a certain limit is arranged by Head Office. Care should be taken not to exceed the limits. Excess cash must be remitted to the Main branch invariably on the same day. Cash on Cd•unter limit must be maintained while taking out cash from the vault and after receipt of the cash from the customers.
e) Proper watch and ward duty of the guard: The guards will perform their duties for the safeguard of the inside cash as well as bank premises. The guards will have 24 hours watch and ward duty by rotation. The Manager will arrange surprise inspection at irregular intervals on the holidays and at the night on the week days.

Surprise checking of cash:
The Manager should check some items at random of Cash balance on hand at the close of each day. At least once in a week, the entire cash should be checked physically by the Manager Which he must note in Cash Balance Register under his full signature.

Procedures of maintaining Cash receipt and payment in the evening banking:
Banks may receive money from their customers and pay cash after normal transaction hour' Which is called Evening banking. Separate evening banking license is to be obtained from Bangladesh Bank. In the evening banking hours the Teller will receive the cash in the pay-in-slip stamped with 'Evening Banking' seal. The 'Cash Received' stamp will be dated for the date of the following working day. The amount is to be entered in Tellers Cash Proof sheet on the date of the following working day. The Cash payment of the Cheque in the evening banking will be made to the Account holder only with his/her signature on the reverse side of the Cheque after observing the required formalities except posting it to the computer. Before payment, late payment permission from the Manager is to be obtained who will put his initial under the permission. The amount of cash payment should be entered in the Teller's Cash Proof Sheet and the Cheque to be stamped with the 'Cash Paid' seal on the date of the following working day. The amount paid must be blocked in the respective account in the computer.
Separate Cash Balance Register may be maintained for evening banking transaction. The amount of cash received and payment must be entered in to the Vault Book on the same date. The notes of late receipt along with the coins if any must be, kept in the safe vault separately.

Irregularities found in the functions of cash and its remedial:
There are many irregularities that occur in the functions of cash department. Some of the common irregularities are as follows:

a) Payment of post dated/out of date cheques: Some times post dated or out of date cheques are paid by the teller. As soon as the matter comes to the knowledge it should be corrected by obtaining signature of the drawer of the Cheque. b) Non -writing of denominations of notes received or paid: Tellers while receiving/paying cash do not write the denominations of notes in some cases. Branch Managcr/Deputy Manager should strictly impose upon the tellers to write denominations on pay-in-slips/vouchers and on the reverse of the Cheque/Cash Debit Voucher.
c) Keeping excess cash in the vault beyond limit: Some times closing cash balance exceeds the limit of cash in safe. Care should be taken for not exceeding the limit. Excess cash shall invariably be remitted to the Main branch on the following day.
d) Keeping unsorted cash in the vault: Notes are kept in the vault without sorting, some times without proper stitching/stapling. It is the responsibility of the Head Teller/Cash-In-Charge to have the notes sorted out and properly stitched. Branch Manager/Deputy Manager should impose upon him/her for strict compliance.
e) Shortfall of cash/Excess cash received: Some times shortfall of cash may occur in the hand cash balance of the Teller. In this case the shortfall amount shall directly be recovered from the concerned Teller before the close of business of the day. If not possible on that day, the cash may be adjusted by debit to 'Protested Bill Account' under telegraphic/Fax advice of the Head Office.

Where any excess cash is received, the amount should be credited to the Sundry Deposit Account. If any genuine claim is found later on, the amount may be refunded subject to obtaining permission from Head Office.

INTERNAL CONTROL & COMPLIANCE

2011-01-15T08:45:00.000-08:00

INTERNAL CONTROL POLICY
Itroduction
Banking is a diversified and complex .linancial activity which is no longer limited within the geographic boundary of a country. In many banks internal control is identified with internal audit; the scope of internal control is not limited to audit work. It is an integral part of the daily activity of bank, which on its own merit identifyes the risks associated with the process and adopts a measure to mitigate the same. Internal Audit on the other hand is a part of Internal Control system which reinforces the control system through regular review.
Definition
Internal control is the process, affected by a company's board of directors, management and other personnel, designed to provide reasonable assurance regarding the achievement of objectives in the effectiveness and efficiency of operations, the reliability of financial reporting and compliance with applicable laws, regulations, and internal policies.
Internal Control Environment
The internal control environment is the framework under which internal controls are developed, implemented and monitored.
Objective of Internal Control
The main objectives of internal control are as follows:
• Fificieney and effectiveness of activities ( performance objectives)
• Reliability, completeness and timelines of financial and management information (information ottiectives)
• Compliance with applicable laws and regulations (compliance objectives)

Policy Guidelines For Internal Control
Responsibility of the Board of Directors
The overall responsibility of establishing broad business strategy, significant policies and understanding significant risks of the bank rests with the Board of Directors.
Through the establishment of Audit Committee' the Board of Directors can monitor the effectiveness of internal control system.
The internal as well as external audit reports will be sent to the board without any intervention of the bank management and ensure that the management takes timely and necessary action as per the recommendations.
Have periodic review Meetings with the senior management to discuss the effectiveness of the internal control system of the bank and ensure that the management has taken appropriate actions as per the recommendations of the auditors and internal control.

Responsibility of the Senior Management
In setting out a strong internal control framework within the organization the role of Managing Director is very important. He! She will establish a Management Committee' (MANCOM), which will be responsible for the overall management of the Bank.
The MANCOM will put in place an internal control structure in the banking organization, which will assign clear responsibility, authority and reporting relationship.
The MA.NCOM will monitor the adequacy and effectiveness of the internal control system based on the bank's established policy & procedure.

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.
Control Activities and Segregation of Duties:
-Control activities involve two steps: (1) the establishment of control policies and procedures and (2) verification that the control policies and procedures are being complied with.
-One of the most important aspects of internal control system requires that there is appropriate segregation of duties and personnel arc not assigned conflicting responsibilities.

Management Reporting System:
• Effective internal control system requires that there is an effective reporting system of information that is relevant to decision making. The information should be reliable , timely accessible and provided in a consistent format.
• Internal information must cover all significant activities of the bank 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 is reaching the appropriate personnel.

Monitoring Activities & Correcting Deficiencies:
• There should be an effective and comprehensive internal audit of the internal control system carried out by operationally independent, appropriately trained and competent staff specially designated by the management The significant deficiencies identified by the audit team should be reported to the board on a periodic basis. The Audit Committee of the board should be the cell to whom such report should be forwarded for review.
• Preferably the internal control team should be reporting to the board of directors or its audit committee. If practical considerations do not permit internal control team to directly report to the board of directors then it can report directly to the MD.

Role of External Auditors in Evaluating Internal Control System:
• External Auditors by dint of their independence from the management of the bank can provide unbiased recommendation on the strength and weakness of the internal control system of the bank.
• They can examine the records, transactions of the bank and evaluate its accounting policy, disclosure policy and methods of financial estimation made by the Bank; this will allow the board and the management to have an independent overview on the overall control system of the bank.
Regulatory Compliance :
• The internal control system should always take into account the bank's internal processes to meet the regulatory requirement before conducting any operation.
• The bank must develop an effective communication process which will allow smooth distribution of relevant regulations among different departments and personnel.

Establishment of a Compliance Culture:
• The board of directors and the senior management must establish a compliance culture within the banking organization that emphasizes and demonstrates to all levels of personnel the importance of internal control.
• The board of directors and the senior management may establish a Code of Ethics' that all levels of personnel must sign and adhere to.

Organisatation Structure
Structure for Internal Control System
The essence of the ideal organizational structure that will facilitate effectiveness of the internal control system is the segregation of duties.
Up to which level this segregation will take place will depend on an individual bank.
In cases where such segregation is not possible, there must be certain monitoring mechanism which should be independently reviewed to ensure all policies and procedures are followed at the branch level.

Structure of the Internal Control Unit
The head of internal control unit should have a reporting line with the bank's board. The audit committee of the board can be the contact point for the internal control unit. This unit must also have a reporting line with the Managing Director of the bank.
The head of the internal control will be responsible for the both compliance and control related tasks which include compliance with laws and regulation, audits and inspection, monitoring activities and risk assessment. The head of internal control will report directly to the MD and also have an indirect line to the Audit Committee of the Board.

Exchange rate and foreign remittance

2010-12-14T02:30:00.001-08:00

Exchange rate is hte rate at which a specific currency can be exchanged with a standard foreign currency.
A foreign exchange transaction is either sells or purchase transaction. Therefore, the bank would quote two different rates of exchange.

Buying Rate & Selling rate:
The rate at which the central of any country buys foreign money is called buying rate. On the other hand , the rate bat which the central bank of any country sells foreign money is called selling rate.

Classification of Exchange Rate:
i) Fixed Rate
ii) Floating Rate:-
• Independent Floating
• Managed floating
• Pegging
• Single currency
• Composite currency : a) SDEBIT & b) Other basket.

Exchange Rate Quotation:-
Exchange rate quoted by the following two ways:-
Direct : If the exchange rate is expressed in variable units of domestic currency for a fixed unit of foreign currency. It is also called pence rate.
Indirect: If the exchange rate is expressed in variable units of foreign currency for a fixed unit of domestic currency. It is also called currency rate.

Foreign Remittance:
Foreign remittance means sale and purchase of foreign currency. Foreign remittance are of two kinds: (i) Inward Remittance & (ii) Outward Remittance.

The term “ Inward remittance” includes not only remittances by TT, MT, Debitaft etc. but also purchase or bills, travelers cheque etc.
On the other hand, remittance from our country to foreign countries is called outward foreign remittance.

The Foreign Remittance department of Export-Import Bank Limited Foreign Exchange Branch is equipped with a number of foreign remittance facilities. Following are the types of foreign remittance facilities offered by Export-Import Bank Limited, Foreign Exchange Branch, Dhaka.

01) Issuance of Foreign Demand Debitaft (F.D.D)
02) Issance of Travellers Cheques (T.C)
03) Endorsement of US $ in Passport
04) Opening of Foreign Account
05) Opening of Student File

Foreign Demand Debitaft (FDD):-
Pubal Bank accepts the charges for TOEFL, SAT, GMAT etc. through Foreign Demand Debitaft. Export-Import Bank opens student files to issue foreign demand Debitaft following the permission of Central Bank. Before issueance of FDD, Export-Import Bank asks the students to fill up the TM Form, which contains the following particulars.

01) Name of the student
02) Full adDebitess of the student
03) Amount of FDD in Foreign Currency
04) Purpose of Remittance
05) AdDebitess of the Institution to which hte FDD will be favored
06) Country of receiving payment
07) Passport No. of the student with date of issue
08) Signature of the student

The TM Form is sent to Central Bank with photocopies of the Passport of the student and the FDD issued.

Issuance of Traveler’s Cheque (TC):-
Export-Import Bank Limited issues only American Express Traveler’s Cheque. For TC, customer has to fill up TM Form. He has to fill up the purchase form. Purchase form has four copies. One copy for American Express Bank, one copy for Export-Import Bank, and two copy for the customer. For TC Export-Import Bank limited charges 1% as commission.

Requirements for purchasing TC:
There are some requirements that are to be fulfilled by the Traveler’s Cheque purchaser.
The requirements are ---
i) Passport holder himself has to be present while issuing Traveler’s Cheque.
ii) The passport must be a valid one.
iii) Air ticket has to be confirmed.

Stemps involved in issue of Traveler’s Cheque:
(i) After verfying all these documents the customer is asked to fill up presCreditibed application form.
(ii) In the application the customer states the amount he is willing to endorsed and it is be verivied that his required amount is written the stipulated.
(iii) Then the customer pays cash or by debiting his account the Traveler’s Cheque is issed.
(iv) Endorsement is given on the passport and on the ticket. Customer fills up the TM Form.
(v) Purchase application form has to be filled up by the purchaser.
(vi) Entry has to be given in the foreign currency register and in the traveler’s cheque register

Endorsement of Cash:-
Cash foreign currency can also be remitted through the endorsement in the passport. In case of endorsing cash on passport, the requirements are requirements are similar to those of Traveser’s Cheque. But an individual person can not take more than $ 1000.00 in cash in a year. Thant’s why, the concerned officer check the last voyage of the purchaser. If he made any voyage and if he purchase dollar at that time, then the officer will the amount and will give the rest to the purchaser.

Export-Import Bank Limited can not endorse more than $ 600.00 as cash at a time. For more than $ 600.00 the customer has to purchase TC. For cash endorsement Export-Import Bank Limited maintains a separate register. For giving cash foreign currency, Export-Import Bank charges Tk150.00 as service charge.

Opening of Foreign Account:-
Export-Import Bank Limited opens foreign account. Foreign account is isued for receiving foreign currency from abroad or for sending the currency to abroad, It can be used in favor of a person or in favor of exporters.

Following papers are required to required to open a foreign account:-
i) Exporters’ foreign currency account opening form (application form, two signature cards duly filled in and signed with authenticated seal and introduction).
ii) Two copies of passport size photographs of each operator attested by Chairman of the company.
iii) Export registration certificate.

Steps involved in issue of Traveler’s Cheque:-
i) After verifying all these documents the customer is asked to fill up presCreditibed application form.
ii) In the application of the customer states the amount he is willing to endorse and it is be verified that his required amount is within the stipulated.
iii) Then the customer pays cash or by debiting his account the Traveler’s Cheque is issued.
iv) Endorsement is given on the passport and on the ticket. Customer fills up the TM Form.
v) Purchase application form has to be filled up by the purchaser.
vi) Entry has to be given in the foreign currency register and in the traveler’s cheque register.

Endorsement of Cash:-
Cash foreign currency can also be remitted through the endorsement in the passport. In case of endorsing cash on passport , the requirements are requirements are similar to those of Traveler’s cheque. But an individual person can not take more than $ 1000.00 in cash in a year. That’s why the concerned officer check the last voyage of the purchaser. If he made any voyage and if he purchase dollar at that time, then the officer will the amount and will give the rest to the purchaser.
Export-Import Bank can not endorse more than $ 600.00 as cash at a time. For more than $ 600.00, the customer has to purchase TC. For cash endorsement Export-Import Bank maintins a separate register. For giving cash foreign currency, Export-Import Bank charges Tk.150.00 as service charge.

Opening of Foreign Account:
Export-Import Bank opens foreign account. Foreign account is used for receiving foreign currency from abroad or for sending the currency to abroad. It can be used in favor of a person or in favor of exporters.
Following papers are required to open a foreign account:-
i) Exporters foreign currency account opening form (application form, two signature cards duly filled in and signed with authenticated seal and introduction).
ii) Two copies of passport size photographs of each operator attested by Chairman of the company.
iii) Export registration certificate.
iv) Attested photocopy of the membership certificate of the concerned association (BGMEA).
v) Export proceed realization certificate—declaration/undertaking regarding the utilization of foreign currency.
vi) Incase of Limited company:
a) Memorandum & Articles of Association of the company.
b) Power of Attorney.
c) Resolution of the Board of Directors.
d) Certificate of Incorporation.
e) Certificate of Commencement of Business.
f) List of Directors.
g) Trade License.

Student File Opening:-
Student can endorse $ 200.00 at a time in his own name. But if the amount exceeds $ 200.00 then the student has to open a student file. For opening a student file, the following documents are required:-
I. Preliminary application and information for admission.
II. Letter of approval of the student by the University.
III. A filled up application form for foreign currency in abroad.
IV. “TransCreditipt given by the Board for S.S.C / H.S.C or equivalent examination.
V. A photocopy of I-7 Visa form.
In case of tuition fees, applicant must send the currency in favor of the institute. He can not take the fees of the institute with him personally. Usually a student has to endorse at least one third of the fees of a year.

ICC Publications related to foreign exchange transactions:
UCPDC:
The elaboration of UCPDC is Uniform Customs and Practice for Documentary Creditedit. The UCPDC is first introduced in 1933. The latest version is UCP-500 published in 1993 by International Chamber of Commerce (ICC). This is not a law but is the collection of rules, which is applicable and accepted in the foreign exchange business as more than law.

The UCPDC has 49 articles. All these articles desCreditibes in detail the functions, responsibility of different banks related to a documentary Creditedit. The UCPDC is the master of laws applied in foreign exchange business and thus is called “ The Bible” in this sector.

URR-525:
ICC uniform rules for bank to bank reimbursement under documentary Creditedit (URR-525) is enforce with effect from July 01, 1996. To meet the need of International standards and uniform practice. ICC banking commission in 1993 establish a working party to Debitaft a suitable framework. The URR-525 is the result of the working party’s effort.

URC-522:
In the course of time, various formulations, expressions and terms have arisen among banks in connection with documentary collection business. In order to ensure uniform interpretations in international trade, the Uniform Rules for Collection – ICC publication no. 522 is enforces as on January 01, 1996.

Incoterms-2000:
Incoterm means commercial terms. These are also known as trade terms, contract terms or sales terms or purchase terms or delivery terms. The purpose of “Incoterms” is to provide a set of international rules for the interpretation of the most commonly used trade terms in international trade or foreign trade. ICC first introduced the incoterms in the year 1936. Now incoterms have been revised by the ICC in 2000 which are known as “ Incoterms-2000”. There are 13 terms including 127 rules divided into four categories 7 four groups.
These are as follows:-

Category	Group	No. of Incoterms
Departure	E	EXW - Exworks
Main Carriage unpaid	F	FCA - Free Carrier FAS - Free Alongside ship FOB - Free on Board
Main Carriage paid	C	CFR - Cost & Freight CIF - Cost, Insurance & Freight CPT - Carriage Paid To CIP - Carriage Insurance Paid To
Arrival	D	DAF - Delivered at Frontier DES - Delivered Ex Ship DEQ - Delivered at quay DDU - Delivered duty unpaid DDP - Delivered Duty

   Some problems that we have faced on training institute :
01.   The most severe problem seemed to us that a whole variety of issues were covered only within 15 working days.
02.   The examination shoulod be set up after visiting the AD Branches for parctical works.
03.   The library facility of the training institute is not adequately equipped with necessary Books & journal.
04.   Sanitation facility is insufficient.
05.   Residential facility is effective for a better training.
06.   Some of the sessions seemed completely boringdue to some less experienced trainers.
07.   Setting arrangement is not comfortable.

Mechanism of Foreign Exchange Export

2010-12-14T02:11:00.001-08:00

In the export section, two types of L/Cs are opened-

Back to Back L/C
Export L/C

Back to Back L/C:

A back to back mechanism involves two separate L/Cs. One is master export L/C and another is back to back L/C. on the strength of Master export L/C Bank issues Back to Back L/C.
Back to Back L/C is commonly known as Buying L/C. On the contrary, Master Export L/C is known as Selling.

Features of Back to Back L/C:

Is an import L/C to procedure goods/raw materials for further processing.
Is opened basedon Export L/C.?
Is a kind of Export Finance?
Export L/C is at sight but Back to Back L/C is at Usance.
No margin is required to open Back to Back L/C

Checklist to open Back to Back L/C:.

Application is registered with CCI & E and has bonded warehouse license.
The Master L/C has adequate validity period and has no defective clause.
L/C value shall not exceed the admissible percentage of net FOB value of relative Master L/C.
Usance period will be up to 180 days.
Papers required opening back to back L/C
Import Registration certificate & Export Registration certificate.
L/C Application & LCA form.
Proforma Invoice/Indent.
Insurance Policy.
IMP form.
In addition to above following papers are required for readymade garments industry
Bonded warehouse license.
Quota allocation letter from EPB (where applicable)
Letter of disclaimer from landlord if rented premises.

Steps to issue back to back L/C:

Obtain all required papers.
Check the Creditedit limit
Prepare offering sheet if regular Creditedit line is not available.
Mark lien on the master L/C
Issue the L/C.

Payment under back to back L/C:

Payment at maturity out of exports proceeds.
In case of export failure or non-realization /short realization of export proceeds, forced loan i.e. PAD has to be Crediteated in order settle the back to back L/C payment.

Precautionary measures:-

Inclusion the clause for pre-shipment inspection certificate
shipping guarantee under no circumstances
disCreditepant documents shall not be accepted
Proper care regarding amendments of Master L/C.

The flow chart on back to back L/C Mechanism:-

Back to Back L/C is essentially a self liquldating transaction. Usually a Bank issuing Back issuing back to back L/C has no collateral or comfort to rely upon except the master L/C. therefore Bank officials concerned, should be fully aware of the inherent risk involved in this type of businesses and are advised to issue back to back L/C only for the well known customer of the Bank and of undoubted integrity.

Accounting Treatment for back to back L/C:

When the document is arrived, the following vouchers are passed---
Customer’s A/c. ............................... Debit.
Commission on acceptance ............. Credit.
In case of payment, if the fund is at hand, the accounting entries are sunDebity deposit Margin on Acceptance .......................... Debit.
Customer’s A/C. ..................................Credit.

If the party is paid in foreign currency, B.C. rate is applied in this regard. International Department takes the T.T. O.D rate. If the payment is made to ID in local currency in notional rate, ID follows T.T Clean rate. When the party is to be paid, OD sight rate is followed.

If the fund is not available to make the payment, the following vouchers are to be passed..
PAD .......... Debit.
Customer’s A/C. ..................................Credit.

Reporting to Central Bank:
At the end of every month, the reporting regarding the following information is mandatory,-
a) Filling of E-2/P-2 schedule of S-1 category; which covers the entire month amount of import, category of goods, currency, country etc.
b) Filling of E—3/P-3 schedule for all charges, commission with T/M form.
c) Disposal of IMP form, which includes,
i) Original IMP is forwarded to Central Bank with invoice and Indent.
ii) Duplicate IMP is kept with the Bank alongwith the bill of entry/certified invoice.
iii) Triplicate IMP is kept with the Bank for office record.
iv) QuanDebituplicate is kept for submission to Central Bank in case of imports where documents are retired.

Export L/C:
The other type of L/C facility offered by Export-Import Bank Limited is Export L/C. Bangladesh exports a large quantity of goods and services to foreign households. Readymade textile garments (both kinitted and woven), jute, jute-made products, frozen shrimps, tea are the main goods that Bangladesh exporters exports to foreign countries. Garments sector is the largest sector that exports the lion share of the country’s export. Bangladesh export most of its readymade garments products to U.S.A and European Community (EC) countries. Bangladesh export about 40% of its readymade garments products to U.S.A. Most of the exporters who export through Export-Import Bank are readymade garment exporters. They open export L/Cs here to export their goods, which they open against the import L/Cs opened by their foreign importers.

Formalities for Export L/C:
The export trade of the country is regulated by the Imports and Exports (control) Act, 1950. There are a number of formalities, which an exporter has to fulfil before and after shipment of goods. These formalities or procedures are enumerated as follows,

01) ERC: The export from Bangladesh are subject to export trade control exercise by the Ministry of Commerce through Chief Controller of Imports and Exports (CCI & E). No exporter is allowed to export any commodity permissible for export from Bangladesh unless he is registered with CCI & E and holds valid Export Registration Certificate (ERC). The ERC is required to be renewed every year. The ERC number is to be incorporated on EXP forms and other documents connected with exports.
02) Obtaining EXP: After having the registration, the exporter applies to Export-Import Bank Ltd. with the trade License, ERC and the Certificate from the concerned Government Organization to get EXP. If the bank is satisfied, an EXP is issued to the exporter, An EXP-Form contains the following particulars,-
01) Name and adDebitess of Authorized Dealer
02) Particulars of the commodity to be exported with Code
03) Country of destination
04) Port of destination
05) Quantity
06) L/C value in Foreign Currency
07) Terms of Sale
08) Name and adDebitess of Importer/Consignee
09) Bill of Landing/Railway Receipt/Airway Bill/Truck Receipt/Post
Parcel Receipt No. and date
10) Port of Shipment/Post Office of Dispatch
11) Land Custom post
12) Shipment date
13) Name of the Exporter with adDebitess
14) CCI & E’s Registration number and date of the Exporter
15) Sector (Public or Private) under which the Exporter falls.

03. Securing the order: Upon registration, the exporter may proceed to secure the export order. This can be done by contracting the buyers directly through correspondence.

04. Signing of the contract: While making a contract, the following points are to be mentioned,

DesCreditiption of the goods
Quantity of the commodity
Price of the Commodity
Shipment
Insurance and marks
Inspection
Arbitration

05. The following points are to be looked for,-
I. The terms of the L/C are in conformity with those of the contract.
II. The L/C is an Irrevocable one, preferably confirmed by the advising bank.
III. The L/C allows sufficient time for shipment and a reasonable time for registration.
IV. If the exporter wants the L/C to be transferable, divisible and advisable, he should ensure those stipulations are specially mentioned in the L/C.

06. Procuring the materials: After making the deal and on having the L/C opened in his favor, the next step for the exporter is to set about the task of procuring or manufacturing the contracted merchandise.

07. Registration of sale: This is needed when the items proposed to be exported are raw jute and jute goods.

08. Shipment of goods: The following are the documents normally involved at the stage of shipment,-
i) EXP Form
ii) Photocopy of registration certificate
iii) Photocopy of the contract
iv) Photocopy of the L/C
v) Customs copy of ERF Form for shipment of jute goods and EPC Form for raw jute.
vi) Freight certificate from the bank in case of payment of the freight at the port of landing is involved.
vii) Railway receipt, Berg Receipt or Truck Receipt.
viii) Shipping instructions
ix) Insurance policy
After those, exporter submits all these documents alongwith a letter of indemnity to Export-Import Bank for negotiation. An officer sCreditutinizes all the documents. If the documents is a clean one, Export-Import Bank purchases the documents on the basis of banker-customer relationship. This is known as Foreign Documentary Bill purchase (FDBP).

Procedure for FDBP:
After purchasing the documents, Export-Import Bank gives the following entries,-
FDBP A/C -------- Debit.
Customer A/c. Credit.
(before realization of proceeds)
Head Office, ID A/c.--- Debit.
FDBP A/C. ------- Credit.
( Adjustment after realization of proceeds)
A FDBP Register is maintained for recording all the particulars. The salient contents of a FDBP register are as follows,-
i) Date
ii) Ref. No. (FDBP)
iii) Name of the Party (Debitawer)
iv) Debitawee
v) Name of collection Bank
vi) Conversion Rate
vii) Bill Amount
viii) Amount in currency
ix) EXP Form No.
x) Export L/C No.

Foreign Documentary Bills For Collection:
Export-Import Bank forwards the documents for collection due to the following reasons,-
i) If the documents have disCreditepancies.
ii) If the exporter is new client.
iii) The banker is in doubt.
Foreign documentary bills for collection signfies that the exporter will receive payment only when the issuing bank gives payment. The exporter submits duplicate EXP Form and Commercial Invoice. Subsequently, The of the bill is calculated and the following accounting entries are gi ven,-
Head Office A/C. Debit. @ T.T Clean
Client’s A/C. Credit. @ O.D Sight
Government Tax A/c. Credit. 0.25% of Invoice value
Postage A/C. Credit.
Income A/C. profit on Exchange Credit.

After passing the above vouchers, an Inter Branch Exchange Trading Debit Advice is sent for debiting the NOSTRO account. Export-Import Bank has NOSTRO accounts with its reimbursing bank. An FDBC Register is maintained, where first entry is given when the documents are forwarded to the issuing bank for collection and the second one is done after realization of the proceeds.

Export Bill SCreditutiny Sheet:
The Export Bill SCreditutiny Sheet contains the following particulars,-
01) Exporter’s name
02) Presentation date of documents
03) L/C No.
04) Expiry date
05) L/C amount available
06) The date within which the documents to be presented
07) BL/AWB/FCREDIT dated
08) Shipment date in the L/C
09) Debitaft date
10) Invoice number and date
11) Export L/C No. Date, Issued by
12) Documents required in the L/C contract
13) Liability position
14) DisCreditepancies
15) Calculation of Bill amount (Exporter’s Retention Quote, Commission, and Margin).

Settlement of Local Bill:
The settlement of local bills is done in the following ways,-
01) The customer submits the L/C to Export-Import Bank alongwith the documents to negotiate
02) Export-Import Bank official sCreditutinizes hte documents to ensure the conformity with the terms and conditions.
03) The documents are then forward to the L/C opening bank.
04) The L/C issuing bank gives the acceptance and forward an acceptance letter.
05) Payment is given to the customer on either by collection basis or by purchasing the document.

Mode of Payment of Export under L/C:
The most common methods of payment under a L/C are as follows:-
Sight payment Creditedit:
In a sight payment Creditedit, the bank pays the stipulated sum immediately against the exporter’s presentation of the documents.
Negotiation Creditedit:
In Negotiation Creditedit, the exporter has to present a bill of exchange payable to himself in addition to other documents, that the bank negotiates.
Deferred payment Creditedit:
In deferred payment, the bank agrees to pay on a specified future date or event, after presentation of the export documents. No bill of exchage is involved. In Export-Import Bank, payment is given to the party at the rate of DA 60-90-120-180 as the case may be. But the Head office is paid at T.T clean rate. The difference between the two rates is the exchange trading for the branch.
Acceptance Creditedit:
In acceptance Creditedit, the exporter presents a bill of exchange payable to himself and Debitawn at the agreed tenor (i.e. on a specified future date or event) on the bank that is to accept it. The bank signs its acceptance on the bill and returns it to the exporter.
The exporter can then represent it for payment on maturity. Alternatively he can discount it in order to obtain immediate payment.
Advising L/C:
Advising a L/C through a bank is a proof of apparent authenticity of the Creditedit to the seller/beneficiary. The advising process of a L/C consists of forwarding the original Creditedit to the beneficiary to whom it is adDebitessed. Before forwanding the advising bank has to verify the signatures of hte officers of hte L/C opening bank (Export-Import Bank), and at the same time ensure that the terms and conditions of the L/C are not in violation of the existing Exchange Control Regulations. In such act of advising, the advising bank does not undertake any liability.

Adding Confirmation:
Add confirmation is given by the confirming bank. An Add confirmation letter contains the followings:-
01) L/C No.
02) L/C amount
03) Items to be imported
04) Name and adDebitess of the Applicant
05) Name and adDebitess of the Beneficiary
06) Tenor
07) Date of shipment
08) Date of Expiry
09) Port of Loading
10) Port of Discharge
11) Charges on (which party)
12) Name of the advising bank
13) Name of the Reimbursing Bank
14) Name of Confirming Bank
Test Key Arrangement :-
Test key arrangement is a seCreditet code maintained by the banks for the authentication for their telex messages. It is a systematic procedure by which a test number is given and the person to whom this number is given can easily authenticate the same test number by maintaining that same procedure . Export-Import Bank has test key arrangements with so many banks for the authentication of L/C message and for the transfer of funds.

Inland Letter of Creditedit (ILC):
ILC means L/C within the same country. This type of L/Cs are opened when the seller does not believe the buyer though they are of the same country and also in the cases where the sales contract is of a big amount.

Mechanism of Foreign Exchange Import

2010-12-14T01:56:00.000-08:00

To import, a person should be competent to be an “Importer”. According to Import & Export Control Act, 1950, the Office of Chief Controller of Import and Export provides the registration (IRC) to the importer. After obtaining this, the person has to secure a letter of credit authorization (LCA) form Central Bank. And then a person becomes a qualified importer. He is the person who requests or instructs the opening bank to open an L/C. He is also called opener or applicant of the credit.

Importer’s Application for L/C Limit / Margin:

To have an import L/C limit, an importer submits an application to the issuing Bank furnishing the following information:-

01)    Full particulars of bank account
02)    Nature of business
03)    Required amount of limit
04)    Payment terms and conditions
05)    Goods to be imported
06)    Offered security
07)    Repayment schedule

A credit Officer scrutinizes this application and accordingly prepares a proposal (CLP) and forwards it to the Head Office Credit Committee (HOCC). The Committee, if satisfied, sanctions the limit and returns back to the branch. Thus the importer is entitled for the limit.

The L/C Application:

Bank Limited provides a printed form for opening of L/C to the importer. This form is known as Letter of Credit Application form. A special adhesive stamp is affixed on the form. While opening the stamp is cancelled. Usually the importer expresses his desire to open the L/C quoting the amount of margin in percentage.
The importer gives the following information:-
01)    Full named and address of the importer.
02)    Full named and address of the beneficiary.
03)    Draft amount.
04)    Avaolability of the credit by sight payment acceptance/negotiation/deferred payment.
05)    Time bar within which the documents should be presented.
06)    Sales type (CIF/FOB/C&F)
07)    Brief Specification of commodities, price, quantity, indent no. etc.
08)    Country of origin.
09)    Central Bank registration no.
10)    Import License/LCAF No.
11)    IRC No.
12)    Account No.
13)    Documents required.
14)    Insurance cover note/Policy no., date, amount.
15)    Name and address of Insurance Company.
16)    Whether the partial shipment is allowed or not.
17)    Whether the transshipment is allowed or not.
18)    Last date of shipment.
19)    Last date of negotiation.
20)    Other terms and conditions if any.
21)    Whether the confirmation of hte credit is requested by the beneficiary or not.

The above informations are given along with the following documents—
01)    Proforma Invoice stating description of the goods including quantity, unit price etc.
02)    The Insurance cover note, issuing company and the insurance number.
03)    Four set of IMP Form.

The Letter of Credit Authorization (LCA) Form:
The letter of credit authorization (LCA) form contains the following—
01)    Name and address of the importer.
02)    IRC No. and year of renewal.
03)    Amount of L/C applied for (Both in figure and in word).
04)    Description of item(s) to be imported.
05)    ITC Numbers/HS Code.
06)    Stamp and signature of the Importer with seal.

Form-IMP:-
The Form-IMP contains the followings—
01)    Name and address of hte authorized dealer.
02)    Amount of remittance to be permitted (i.e., L/C amount).
03)    LCA form number, Date, and value in Tk.
04)    Description of goods, quantity.
05)    Invoice value in Foreign Currency (i.e., L/C amount).
06)    Country of Origin.
07)    Port of Shipment.
08)    Name of steamer/airline (i.e., by road/by ship/by Air).
09)    Port of Importation.
10)    Indentor’s name and address.
11)    Indentor’s Registration number with CCI & E and Central Bank.
12)    Full name and address of the Applicant.
13)    Registration number of the Applicant with CCI & E.
14)    Type of LCAF.

Scrutiny of L/C Application:-
The dealing Officer scrutinizes the application in the following manner-
01)    The terms and conditions of the L/C must be complied with UCPDC 500
02)    Exchange Control & Import Trade Regulation.
03)    Eligibility of the goods to be imported.
04)    The L/C must not be opened in favor of the importer.
05)    Radioactivity report in case of food item.
06)    Survey report or certificate in case of old machinery.
07)    Carrying vessel is not of Israel or of Serbia-Montenegro.
08)    Certificate declaring that the item is in operation not more than 5 years in case of car.

Precautions taken by officer before issuing L/C:-
After submission of documentary letter of credit application form, the concerned officer scrutinizes the terms and conditions that mentioned in application. He must check the following things.

01)    Whether the terms and conditions of L/C application are consistent with Exchange control and Import Trade regulation, PCPDC-500
02)    L/C must not be opened in favor of the importer or his agent.
03)    L/C must be signed by the importer agreeing all terms and conditions mentioned in the application.
04)    Indenting registration number
05)    Whether IMP form dully filled and signed
06)    Validity of IRC
07)    Insurance cover note with date of shipment
08)    The HS code of the goods
09)    The Balance of the accounts of the importer
10)    The goods are not from Israel and vessels to be used is not of Israel
11)    The issuing officer will try to keep as much margin as possible

Amendment of Letter of Credit:-
Parties involved in a L/C, particularly the seller and the buyer cannot always satisfy the terms and conditions in full as expected due to some obvious and genuine reasons. In such a situated, the credit should be amended. Issuing Bank transmit the amendment by tested telex to the avising bank. In case of revocable credit, it can be amended or cancelled by the ussing bank at any moment and without prior notice to the beneficiary. But in case of irrevocable letter of credit, it can neither be amended nor cancelled without the agreement of the issuing bank, the confirming bank (if any) and the beneficiary. If the L/C is amended, service charge and telex charge is debited from the party account accordingly.

Presentation of the Documents:-
The seller being satisfied with the terms and the conditions of the credit proceeds to dispatch the required goods to the buyer and after that, has to present the documents evidencing dispatch of goods to the negotiating bank on or before the stipulated expiry date of the credit. After receiving all the documents, the negotiating bank then checks the documents against the credit. If the documents are found in order, the bank will pay, accept or negotiate to issuing bank. Issuing bank checks the documents.

The usual documents are –
01)    Commercial Invoice
02)    Bill of Lading
03)    Certificate of origin
04)    Packing list
05)    Shipping advice
06)    Non negotiable copy of bill of lading
07)    Bill of exchange
08)    Pre-shipment Inspection report
09)    Shipment certificate

Examination of Documents:-
The dealing officer checks whether these documents have any discrepancy or not. Here , discrepancy means the dissimilarity of any of the documents with the terms and conditions of L/C.

Dispatching the Import L/C:-
After opening of Import L/C, issuing bank dispatches the L/C. Issuing sends an original copy of the L/C for negotiating and a copy to the advising bank for advising. It also sends reimbursing bank for reimbursement.

Receiving Documents:-
If the beneficiary is being satisfied with the term and conditions of the L/C then dispatch the goods to the buyer. After that dispatch the documents evidence dispatching of goods to the negotiating bank on or before the stipulated expiry date of the L/C.

The documents include:
01)    Commercial invoice
02)    Bill of lading
03)    Bill of Exchange
04)    Shipment Certificate
05)    Pre-shipment Inspection Certificate
06)    Certificate of Origin
07)    Packing List
08)    Weight List
09)    Insurance cover note
10)    Radio Activity Report (applicable for import of foods only)

After receiving all the documents, the negotiating bank then checks the documents against the credit. If the documents are found in order, the bank will sends to the Issuing bank.

Lodgment & Retirement Section:-
Lodgment means retirement of funds. If the documents receiving from the negotiating bank issuing bank also scrutinize the documents. The officer carefully examines the following points:
Invoice:-
01)    The invoice should contain quality, quantity, unit price, total value.
02)    The number of copies should exactly meet the requirement of the credit
03)    The shipper must sign all the copies

Bill of lading:-
01)    It must be duly signed and endorsed.
02)    It must state payment of freight. If the invoice price is on C&F basis the bill of lading must be marked “Freight Paid” and freight is payable at destination, “Freight to Pay” is marked on B/L.

Certificate of Origin:-
01)    It should provide evidence of the goods as specified in the credit. It is issued by the chamber of commerce of beneficiary’s country.

Bill of Exchange:-
02)    Is the Bill of Exchange drawn in the language of the credit?
03)    Is the bill of exchange properly prepared according to the credit conditions (on a sight or time basis) and drawn on the specified bank?
04)    Is it properly dated and signed?
05)    Is the amount if figures corresponded exactly with the amount in word?
06)    Does it contain all the prescribed notations and clases?

Any other documents such as weight and measurement certificate, insurance certificate, packing list etc. as stipulated in the credit must be examined before regotiation.

After scrutiny of these documents, if there is any discrepancy in the documents, the officer will promptly advise the importer and the negotiating bank and asks them to rectify these discrepancies. But if there is no discrepancy, then he will prepare some vouchers.

Payment against Documents (PAD):
This is the most sensitive task of the Import Department. The Officials have to be very much careful while making payment. This task constitutes the following—
Date of Payment:-
Usually payment is made within seven days after the documents have been received. If the payment is become deferred, the negotiating bank may claim interest for making delay
Preparing sale memo:
A sale memo is made at B.C rate to the customer. As the T.T & D.D rate is paid to the ID, the difference between these two rates is exchange trading. Finally, an Inter Branch Exchange Trading Credit Advice is sent to ID.
Requisition for the foreign currency:-
For arranging necessary fund for payment, a requisition is sent to the International Department.
Transmission of telex:-
A telex is transmitted to the correspondent bank ensure that payment is being made.
Loan against Imported Merchandise (LIM)
Loan against import merchandise through the bank may be allowed retaining margin prescribed on their landed cost, depending on hte categories and credit restrictions imposed by the Central Bank/head office from time to time. Branches shall also obtain letter of undertaking and indemnity from the clients, before getting goods cleared through LIM account. Clearance of the goods should be taken through Approved Clearing Agent of the Bank.

The following points must be taken to consideration while allowing advance against the security of imported goods.
Storage of imported goods under LIM facility may be allowed for specified time as prescribed by Central Bank/head office of the bank within which period importer should take delivery of the goods against payment, generally part delivery is not allowed from LIM Account. This may however, be allowed only on specific request and consideration, While allowing part delivery , it must be ensured that the landed cost of the merchandise is properly worked out before the goods are delivered to the customers agaisnt proportionate payments. Landed cost of valuable and less valuable items should not be average together. LIM A/c should properly maintain by the bank. Vouchers will be
Dr. LIM A/C
Cr. PAD A/C

If the documents are required to delivered against LATR (Loan Against Trust Receipt). Prior approval is required from Head Office. Documents to be delivered to the Importer through approved C&F agent for clearance of goods from the port and should be stored in the imported factory. This limit is usually given for certain period on the merit of goods & nature of business. Vouchers will be
Dr. LATR A/C
Cr. PAD A/C

FOREIGN EXCHANGE TRANSACTIONS & INTERNATIONAL TRADE FINANCING

2010-12-14T01:49:00.000-08:00

Banks play a very important role in affecting foreign exchange transaction of a country. Mainly transactions with overseas countries are respect of imports, exports and foreign remittance come under the purview of foreign exchange transactions. Banks are the vital sector by which such transactions are effected / settled. Central Bank records all sorts of Foreign exchange transaction and therefore, transaction effected by the Banks and other authorised quarters are to be reported regularly (viz. daily, fortnightly, monthly, quarterly, yearly etc.) to Central Bank.

We have been trained in detail, how, where and when we have to finance, we should finance to Import or to Export. From the entire setup of the course it has cleared that our training procedure is divided in to four modules and they are :-

i) International Trade : Import & Export.
ii) Foreign Exchange related banking terms & rules.
iii) Foreign Exchange Rate & Foreign Remittance.
iv) Practical training by visiting authorised dealer Branches (Foeign Exchange Branch, Dhaka) of our Bank.
Foreign exchange transaction is classified according to their activities.

Functions of Foreign Exchange Department:

01.    L/C opening
02.    L/C Amendment
03.    Sanctioning PAD, LIM, LATR
04.    T. C issuing
05.    Foreign Bill Purchase
06.    Local Bill Purchase
07.    Foreign Remittance
08.    FC A/C maintaining
09.    Foreign currency remitting

Foreign Exchange Mechanism:-
01)    L/C opening
02)    Issue the L/C by issuing Bank and send to advising bank
03)    Advised and or confirm the L/C by Advising and Add Confirming Bank
04)    Submit the documents to Negotiating Bank by export
05)    The Negotiating Bank makes payment
06)    The Negotiating Bank forward/sends documents to Issuing Bank
07)    Issuing Bank makes payment to Negotiating bank
08)    A Issuing Bank instructs to pay or reimburse the paying bank and paying bank makes payment or reimburse to the negotiating bank
09)    Issuing bank sends documents to the importer
10)    The importer makes payment

Organization Structure of Foreign Exchange is mentioned below:-

International Trade: Import & Export:

International trade is the trade between a country with the rest of the world. Now we live in a global economy. In such an age of globalization each country has free access to the market of other with quality goods and services. we know that all tariff and non-tariff barriers thereof have been removed in 2002 to expedite this globalization process. In the international trade, banking system must play its specific role because it is the connecting unit between all trades. It acts as a media between two parties, one is the buyer and another is seller and all international transaction mainly performed by these two parties. In our country, among the banks only the authorized dealer branches can deal with Foreign business. A branch of a bank having adequate manpower, reasonable Foreign Exchange Business and compliance of the rules and regulations of Central Bank can apply to be an authorized dealer. If Central Bank grant it and give the permission or license, then the branch can deal with Foreign Exchange Business.

International trade has two components – such as Import & Export.

To handle of international transaction in a sound and efficient manner there must have a written contractbetween the buyer & seller. For international trading purpose a Bank or Banks may involved in this contract and then the contract renamed into a letter of credit. It is the media under which the international trades are concluded.

Definition of Letter of Credit:

Letter of Credit or Documentary credit is a written and conditional undertaking by issuing Bank on behalf of applicant (Importer) in favour of beneficary at the request and on the instruction of the buyer (applicant) to pay at sight or at a determinable future date upto stated sum of money within a prescribe time limit and against stipulated documents are unconfirmity with the terms of the credit.

Type of L/C offered:

The Letter of Credit can be many types, but in practice in the most of the cases irrevocable confirmed documentary letter of credit is used. Irrevocable confirmed documentary letter of credit gives the double assurance of payment, since it represents both undertaking of the issuing bank and the confirming bank. The different types of letter of credit are as follows:-

(i)    Revocable letter of credit
(ii)    Irrevocable letter of credit
(iii)    Clean letter of credit
(iv)    Sight letter of credit
(v)    Deferred/usance payment letter of credit
(vi)    Revolving letter of credit
(vii)    Back to Back letter of credit
(viii)    Transferable letter of credit
(ix)    Red clause letter of credit
(x)    Green clause letter of credit

Parties involved to a L/C:

There are number of parties involved in a letter of credit and the rights and obligation of the different involved parties will differ from each other. The involved parties to a letter of credit are named below:-
01)    The Applicant/The importer/The buyer
02)    Opening bank/Issuing bank
03)    The beneficiary/The Exporter/The seller
04)    The Advising Bank/The transmitting bank/The notifying bank
05)    The Confirming Bank
06)    The Negotiating bank
07)    The Reimbursing Bank/Paying Bank

Characteristics of the importer who wants to open a letter of credit:-

Must have an A/C in the branch
Must be a member of the Chamber of Commerce
Must be a TIN holder
Must have IRC

Daceband: A social Network that will pay you

2010-12-07T03:35:00.000-08:00

Everyone of us is looking for a decent income in internet. But most of the online earning programs are fake. So it is very hard to find the right earning site. I got an social networking site like facebook that will pay you for your every activity on the site. Daceband is a social netwotk that pays its members. If you upload photos, videos or write blog on the site then you will earn points. After 24 hours your total earned points will be converted into dollars. Now think that if you do all the activities in daceband, whatever you are now doing in facebook, will help you to earn some income without any invertment.

Here is how you can earn points:
You can earn 10 points for each ad that you view, 2 points for each ad your referrals view, 2 points for submiting a content such as a video, blog, photo or audio.you can also earn 2 points when your referrals submit a content such as a video, blog, photo or audio. They will give you 2 points for every 15 minutes you spend on the site and 2 points for every 15 minutes your referrals spend on the site. Earn 1 points for posting comments and for logging in to your account every 12 hours. Earn 1 point when your referrals post comments and when they logging in to their account every 12 hours. Remember the more points you earn, the more money you'll make. Also you can earn $5 for every 1000 unique visitors that view your content such as your videos, blogs, photos, music/audio and profile and $1.25 for every 1000 unique visitors that view your referrals content. The minimum payment amount is $5. If you do not meet the $5 minimum distribution amount, your balance will carry over to your next pay period. You can request a payout once you reach the minimum payment of $5. They will then transfer your earnings to your paypal of Alertpay account. Earn 10% commission each time you refer an advertiser to Daceband or when your referrals advertise on Daceband. The members of daceband can help each other to earn points. It is like fun, play and earn on daceband. JOIN daceband and share this page on your facebook, twitter, stumble upon etc. so that your friends can also join in daceband to increase your earnings.

Debug Memory Dumps

2010-10-29T06:47:00.000-07:00

Sometimes your computer may get stop error with Blue screen of death then system creates a file which is called minidump. Now I am going to tell you how to debug memory dumps. This will help you to find out the actual cause of error of your pc when no error cause is given by pc and no filename is mentioned and undocumented. You can contact with Microsoft for this serious error but they may not response you for the error or they may take longer time.

At first your have to be certain that your computer is recording memory dumps files. Those tiny dumps are needed to stop the error of blue screen and it takes very small of your hard disk. In doing so right click My Computer, click properties. Now click on the advance tab and select startup and recovery settings. You will see the default setting there. But I have unchecked only automatically restart for XP. For Vista, there is an extra step involved, you must click start, right click computer. Then from the next screen, click Advanced system settings. Then, its in the same location as XP. Mention should be made here that make sure that your computer pagefile still resides on the system partition, otherwise windows will fail to save debig files.

Second step is go to the address below and download and install the Microsoft Debugging Tools

http://www.microsoft.com/whdc/devtools/debugging/installx86.mspx

After you have downloaded and installed these tools then go to start>programs and open Debugging Tools for Windows. Once the Windbg will open, it will show you a blank screen. Now click to File>Symbol File Path. Here enter the sysbols path. Symbols are mostly needed to debug. The path will be:

SRV*c:\symbols*http://msdl.microsoft.com/download/symbols

Now click OK.
(I suggest you to download the symbols from http://msdl.microsoft.com/download/symbols and show the path your saved symbols file in your pc.)

Now go to File and save Workspace so that symbols path is saved for future use. Now you have to locate your memory dump file. The memory dump file is usally located in %systemroot%/minidump. Just write %systemroot%/minidump is Start>Run nad you can find dump file. For example dump files are named as Mini061904-01.dmp

Now open the Windg and go toFile, open Crash Dump and load the dump file. It will show you a message to save base workspace information. Choose No. you will get a debugging screen. It take a little bit time to run as the symbols have to be downloaded. It better to download the symbol file first to do fast work. You can find the following information when the process will go on:

Symbol search path is: SRV*c:\symbols*http://msdl.microsoft.com/download/symbols

Microsoft (R) Windows Debugger Version 6.3.0017.0
Copyright (c) Microsoft Corporation. All rights reserved.

Loading Dump File [C:\WINDOWS\Minidump\Mini061904-01.dmp]
Mini Kernel Dump File: Only registers and stack trace are available

Symbol search path is: SRV*c:\symbols*http://msdl.microsoft.com/download/symbols
Executable search path is:
Windows XP Kernel Version 2600 (Service Pack 1) UP Free x86 compatible
Product: WinNt, suite: TerminalServer SingleUserTS
Built by: 2600.xpsp2.030422-1633
Kernel base = 0x804d4000 PsLoadedModuleList = 0x80543530
Debug session time: Sat Jun 19 19:06:57 2004
System Uptime: 0 days 1:03:36.951
Loading Kernel Symbols
....................................................................................................................................
Loading unloaded module list
..........
Loading User Symbols
*******************************************************************************
* *
* Bugcheck Analysis *
* *
*******************************************************************************

Use !analyze -v to get detailed debugging information.

BugCheck 86427532, {1db, 2, 3, b} <--This is your stop code Unable to load image pavdrv51.sys, Win32 error 2 *** WARNING: Unable to verify timestamp for pavdrv51.sys *** ERROR: Module load completed but symbols could not be loaded for pavdrv51.sys Probably caused by : pavdrv51.sys ( pavdrv51+7fc0 ) Followup: MachineOwner --------- Now, we can already see what it was most likely caused by, in my case it was pavdrv51.sys, which is a Panda AV file. If we want to get further in depth, we can use the command, !analyze -v at the kd> prompt to delve more info about the error:

kd> !analyze -v
*******************************************************************************
* *
* Bugcheck Analysis *
* *
*******************************************************************************

Unknown bugcheck code (86427532)
Unknown bugcheck description <--Its unknown, and not listed on the MS KB at all.
Arguments:
Arg1: 000001db
Arg2: 00000002
Arg3: 00000003
Arg4: 0000000b

Debugging Details:
------------------

CUSTOMER_CRASH_COUNT: 1

DEFAULT_BUCKET_ID: DRIVER_FAULT

BUGCHECK_STR: 0x86427532

LAST_CONTROL_TRANSFER: from f4198fc0 to 804f4103

STACK_TEXT:
f41f0964 f4198fc0 86427532 000001db 00000002 nt!KeBugCheckEx+0x19
WARNING: Stack unwind information not available. Following frames may be wrong.
f41f0ba0 f419920b 864db520 f419ccf0 00000000 pavdrv51+0x7fc0
f41f0c34 804ea221 865b8910 864a52c0 806ad190 pavdrv51+0x820b
f41f0c44 8055d0fe 864a5330 86305028 864a52c0 nt!IopfCallDriver+0x31
f41f0c58 8055de46 865b8910 864a52c0 86305028 nt!IopSynchronousServiceTail+0x5e
f41f0d00 80556cea 000000a4 00000000 00000000 nt!IopXxxControlFile+0x5c2
f41f0d34 8052d571 000000a4 00000000 00000000 nt!NtDeviceIoControlFile+0x28
f41f0d34 7ffe0304 000000a4 00000000 00000000 nt!KiSystemService+0xc4
00cdff70 00000000 00000000 00000000 00000000 SharedUserData!SystemCallStub+0x4

FOLLOWUP_IP:
pavdrv51+7fc0
f4198fc0 ?? ???

SYMBOL_STACK_INDEX: 1

FOLLOWUP_NAME: MachineOwner

SYMBOL_NAME: pavdrv51+7fc0

MODULE_NAME: pavdrv51

IMAGE_NAME: pavdrv51.sys

DEBUG_FLR_IMAGE_TIMESTAMP: 3e8c072b

STACK_COMMAND: kb

BUCKET_ID: 0x86427532_pavdrv51+7fc0

Followup: MachineOwner
---------

The information may be more than you need. If you fail to do the whole process then you should better to call an expert. But make sure to show the exact symbol path. If the symbol path is wrong then it will show error massage.

Intel Core i3, i5, i7; which processor is for you?

2010-10-17T00:34:00.000-07:00

Microprocessor of Intel is the most popular now in a day. Intel is researching about computer’s data and information and also developing processor day by day. The latest processor of Intel is core i3, i5 and i7. Before you buy computer, you should know which processor is perfect for you because the working method of each processor is different and also their prices.

It is the high time to buy core processor. Core processor will be popular for the next few years. If we see the core 2 due processor which was launched in 2006 but now these processor are already out of market. The latest invented processors of Microsoft are core i3, i5 and i7. Now I will try to describe these processors individually.

Core i3
This processor is the cheap processor among all core processors. It has achieved popularity among the home users. Core i3 is based on duel core; it has hyper threading support and virtual environment. It supports 64-bit of windows operating system. It support new chipset of intel and 32 nanometer technology and can work nearly core 2 quad processor. But whether you will buy it or not depends on your tasks in your pc. If you only use computer writing, browsing net and e-mail, then core i3 is more than your need.

Core i5
It is the medium level latest processor of intel. It will supply extra speed relating to the program of computer. It you play solitaire game then you cannot feel the difference of core i3 and i5. But if you edit more than one file in adobe flash at a time then you can see the specialty of core i5. Core i5 has launched in two different technologies- Dual core and quad core. Dual core i-5 has 32 manometer technology, hyper threading, virtualization support and turbo boost technology. In quad core i5 has 45 manometer technology, virtualization support and turbo boost technology, but no hyper threading. To edit video or playing game in computer, core i5 is perfect. If you want to use more programs at a time then core i5 is fit for you.

Core i7
The last and the most wanted Microsoft is core i7. Its price is also high. The core i7 has launched in two different technologies. It has two different chipsets. LGA1156 chipset and LGA1366 chipset are two different chipsets of core i7 processor. Both chipsets has quad core technology, virtualization, hyper technology. But core i7 series 9XX processor are more faster than others, where 1366 chipset are used and it treat as the greatest processor now a day. Core i7 is the excess than the need of normal users. It is the fastest and latest technology of intel processor. If you work with different programs at the same time such as editing video, rendering etc. then core i7 is perfect for you.

If you decide to buy core i7 then I will suggest you to wait for few months because Intel will release their latest core i9 processor within few months. The speed of the processor is marked on it, for example 2.4 gigahertz is replaced by 3.0 gigahertz. This value indicates only the clock speed. Whether you buy core i3, i5 or i7 you will get obviously a quality processor.

Clearing Cheque Through Inward Clearing House

2010-10-08T00:38:00.000-07:00

Inward clearing house is the place of central bank of every country. Banks collects cheque amount from each other through clearing house. The process is described below.
Suppose Mr. Noman is a client of ABC Bank and Mr. Farhad is a client of XYZ Bank. Mr. Noman gives a cheque amounting $1000 to Mr. Farhad, then Mr. Farhad deposits the cheque to his bank XYZ. The authority of XYZ bank has to collect $1000 from ABC bank since Mr.Noman is a client of ABC bank. In doing so, XYZ bank will send the cheque of ABC bank to inward clearing house of the central bank. Now the clearing house will send the cheque to ABC bank to debit/deduct $1000 from Mr. Noman’s account and credit the amount to clearing house account of ABC bank.. ABC bank will do it and inform the clearing house. Clearing house will first debit its its accounts and credit the account of XYZ bank. Mention should be made here that central bank holds the accounts of all banks in a country. So the demanded $1000 of XYZ is credited to their general account of central bank. Now XYZ bank will debit/deduct their general account amounting $1000 and credit the account of Mr. Farhad. And that is how XYZ bank collects the amount from ABC bank. All the banks does the same process to clear the cheque of various banks through inward clearing house. All the process is done with documents and papers. It takes three days to clear a cheque through clearing house.

Control or operate others computer from your own pc from any where in the world

2010-09-24T01:08:00.000-07:00

Do you know that it is possible to control or operate any computer of the world from your own computer? Yes, it is possible now. But its not hacking. To do it you have to use “Teamviewer” software. With the help of this software you can copy, paste, transfer, install any file to others computer from your computer wherever the computer in the world. But both the computers must have internet connections to use Teamviewer. Lets the things describe easily with an example.
If you are staying in India and your friend is staying in USA, then you are interested you teach your friend something new or you want to transfer some file like mp3, word file etc. to your friends computer who is in USA. In doing so both of you have to download and install “Teamviewer” from www.teamviewer.com . Register it with ID and password. Now you are going to logon to your friend’s pc. First of all, collect the ID and password from your friends through e-mail, phone or sms. Now open the Teamviewer from your computer and login with your friends ID and password. Make sure at that moment your friend’s computer is open and connected with net. Teamviewer will analyze ID and password and within few minutes you can see the desktop of your friend’s pc. Now you can easily enter my computer of the pc or run any program or copy, paste, transfer any file. But both of yours computer have to be open and connected with net until process going on. After completing your task logout from Teamviewer and now you can see your own desktop again. Similarly your friend can visit your computer with your given ID and password. But do not do it with unknown people, it may be dangerous from your pc. You can visit your friend’s pc as much as you both want and stay connected as much time as you want with this wonderful Teamviewer software. Hope you can enjoy Teamviewer with your friends.

China Is the Second Largest Economical Powerhouse in the Rank List

2010-09-17T08:12:00.000-07:00

It has been reported that china is the second largest economical powerhouse in the world. China bypassed Japan in the growth of GDP (Gross Domestic Products) this has been established after publication of statistics of GDP of Japan. In fact the USA is in the top of this list. According to economics analysts China will be in the top in GDP within a decade and they apprehended she could bypass the USA also. In a cabinet meeting of Japan said that the GDP of Japan was $1.29 trillion dollar and at the same time the GDP of China was $1.34 trillion dollar. International Monetary Fund (IMF) hopes at the end of the year 2010, GDP of China will be $5.4 trillion dollar and GDP of Japan will be $5.3 trillion dollar and at the same time GDP of USA may be $14.8 trillion dollar, who holds the first position.

Official of China said that the growth of GDP was 10.3% during the 2nd quarter i.e. March to June’2010; whereas it was 1.1% of Japan during the same period. But it decreases to 0.1% in April to June. According to economic analysts, Export Income of Japan decreases in recent years resulting from much stronger Yien against US dollar. So the growth decreased seriously. On the other hand export of China increases unbelievably. In the last July’2010 alone the export income of China was 28.7 billion dollar. The chief controller of monetary of China said to the magazine “China Reform” that China already bypassed Japan in export earnings.

According to IM statistics the GDP of USA, Japan and China were 14.3, 5.1 and 4.9 trillion dollar respectively. IMF has fixed probable GDP of USA, Japan and China is 14.8, 5.3 and 5.4 trillion dollar in 2010. International economist said that although USA is far ahead in the race of economy, they believe that the unbelievable growth of China is decreasing this distance between the two countries. They think that within one decade China will be number one economical powerhouse in the world.

Cloud Computing

2010-09-14T07:18:00.000-07:00

Everybody wants to use the maximum capability of technology. So the thoughts of new technology are creating day by day. The unused working power of any computer can be shared with other computer with a new technology, which is called “Cloud Computing”. In doing so, computers have to connect with a network from any where in the world, to share its unused working power. Cloud computing is like an electric grid. For maximum usage, all the source of working power is connected with grid and the users uses their required power from the grid.

Besides computers, cloud computing can be also used in mobile phone. According to experts, mobile phones, with limited working capability, is more effective for cloud computing. The conference “Mobile Cloud Computing Asia 2010” was held in Singapore recently. The goal of the conference was to more use of cloud computing in Asia, since the growth of internet use in Asia is 85%. Internet users are growing day by day through mobile phones. At present mobile internet users are more than the computer internet users. The basic step of cloud computing is internet connection. The expansion of cloud computing will be more possible with the more practice of internet use in mobile phones. Cloud computing is the cheapest solution for domain based information hub. The platform for cloud computing is already set aside in smart phone like iPhone and Android. But still the number of smart phone users is quit small. So it is necessary to reduce the price of smart phone, so that people can use it and can get the merits of cloud computing.

What message we communicate Tarot Cards?

2009-10-21T09:43:00.000-07:00

Tarot Cards - What message do we communicate the Tarot Cards?

The Tarot Cards are a palette of varying meanings, both good and bad character unmistakably. None arcanum has its own dead weight, but there are many factors that must be taken into consideration when making a total interpretation of Tarot Cards.

Who should not be frightened by consulting the Tarot Cards which are arranged in the table of colored character of ill omens, such as death or El Diablo. As important as these cards are the cards that are exposed on the cloth or the ability of tarotista. Keep in mind that the Tarot cards are a means a mentalist with particular skills used to accomplish a read data that is not present at first glance.

For example, one of the Tarot Cards that everybody is afraid, Death. In itself, does not mean that he is about to be consultation with a loss or defeat. It may mean that it is the end of a stage to start another.

Another Tarot Cards that are not liked by most people is El Diablo. Plane does not mean that anything negative or evil in the case on the question, but also carries such meaning seductive power of unbridled passion. Again, it is important to perform a reading taking into account the totality of the Tarot Cards revealed.

The Tower, another of the Tarot Cards are not taken to be promising can mean a sudden change, crisis. But the crisis in Chinese culture means a new opportunity for change, learning. For this reason, if exposed sample between the Tarot reveals the mentality that nothing more can she want to imply that a new path awaits us below, and we must prepare us for this to happen.

Sun in right way usually means overwhelming energy to carry out a project, or which presents a panorama marked by great vitality. But the head, refers to arrogance, vanity, desire to show. It may be a colleague who wants to appear or appear above us, or someone who, by dint of desire to seek to tarnish our performance figure.

The Star of head does not necessarily imply that star who has a bad query. May also have meant an abandonment, that someone has released the hand, we are no allies in sight.

The Force inverted between Tarot Cards can be displayed to mean that the power to domestic animals is not well spent, you may want to offend someone, or just be rude to us, treated us rudely.

Again, we suggest looking at the totality of Tarot Cards revealed, and wait for the tarotista provide you with a total significance, considering the totality of Tarot Cards, assisted by that sixth sense that all mentalistic that boasts of such must possess.

Tarot Performance When reading the letters

2009-10-20T09:46:00.000-07:00

Reading Letters - The tarotista performance when the reading of letters

The habit of reading the Tarot is an ancient custom, based on the interpretation of the letters that the mentalist has on the table. It is indeed a delicate balance between the practitioner's divine capacities that makes reading the letters and fortune or determine what motivates the questioner to select certain Arcana and not others.

Consequently an effective reading tarot cards come to carve some capacity that is necessary for the professional who carried out the holds. Otherwise, the whole ritual would only like a certain code or classification which results in fixed interpretations given to each of the letters, but we are confident that this is not true. A card that may sound ominous meaning, in fact, in the context of reading the letters can be translated into just the opposite: the end of one phase and the dawn of another more positive.

For this reason, it is necessary to trust the professional who carries out the reading of letters. Must be able to give meaning to the situation in question, its history, and psychological aspects as his mental state in general, their fears, hopes and intentions. Armed with all these elements, and thus only the mentalist can practice a true reading of letters that run in particular. What the mentalist does is really an interpretation of the cards revealed, based on all these elements. For this reason, natural gifts of the mentalist has higher importance. It is the holder of the final formula that will allow you to combine the current temporary space situation, history, personality and destiny, to bring to light an obvious truth: what you can expect the consultant in the coming days.

Nothing is fixed, man has free will, and that means that is enabled to select the roads that you see fit. This is critical because even if you think no options, it really has them. So the reading of tarot cards is a powerful tool for understanding how different caminosque stand up to life before us. Not for us to choose when it will rain, but we choose to bring an umbrella or not, or whether we will or we will stay home to avoid getting wet.

The Reading tarot cards can help us make these decisions, since the cards in the hands of a mentalistacompetente boast a unique tool, which will reveal in reading the letters, and we can help make twice the same error, for example.

Web 2.0 - A New Marketing Tool?

2009-07-18T08:54:00.000-07:00

Services related to web 2.0 can have a major impact on your marketing strategy.

That article inspired me a telephone conversation that I had with a person very interested in any of my products.

In the conversation, the person who starts or who seeks in any case to start an Internet business, said: "... yes but I do not have a list ...".

Intentionally, I have not touched on the aspect of social media marketing in my various articles and for good reason. The first reason is that these social media are the cause not for this purpose, in any case it is not their raison d'être.
This aspect should be treated separately.
But back to the words. It runs on Internet message that "to succeed on the Internet that you have a list" or: "money is in the list."
True, but it deserves some explanation before making the connection to social media.

I personally know of marketers will be selling at any price lites, contacts quantity. My next list seems ridiculous, yet it provides more targeted results much more important.

What to infer that it is not related to the quantity but quality. On the other hand, a list that is not only worked very little use. You could live and live well with a list of 500 people only know if you create a relationship and establish a relationship of trust.
So what is the link with social media?
We have seen that these new media have caused a craze across the world.

These media receive daily new listings and continue to grow at a speed V. It is therefore hard to do. But no matter how.

You can generate numerous contacts through these media. You can join an interest group, a social network dedicated or even create a blog on the topic you want to develop.

Please note, however, do not tell you that this does not seem possible because you do not mind trading. The aim is to develop social relationships, build confidence, you do know and if you jump on the media armed with your signs and banners advertising you will very quickly escorted to the exit door.

While some still do not believe and say that administrators have better things to do than to police, it is WRONG! They are ruthless and they are intransigent. Basically, these spaces are not meant for that, you can occasionally redirect people to your own space by creating interesting articles or relaying interesting information, but do not abruptly.

You can actually create and build a more consistent than those from media, but do it gently, and finesse while respecting the rules.

Build groups, expand networks, if you're interested in the other, they look at you, it's not more complicated and if you do in this order, no one tells you and you build a list of person who will have a blind faith in all that you offer!

Businessmen hold series of meetings seeking mutual business opportunity, overcome financial crisis

2009-06-05T11:55:00.000-07:00

UNB, Istanbul

As the Great Recession is still hitting the global economy, some 5,500 businessmen from across the world got down to series of matchmaking bilateral meetings here Wednesday to figure out mutual business opportunity as well as to overcome the economic downturn.

Out of the 5,500 business people, 2,300 from 135 foreign countries from Asia to Pacific, South Africa to Latin America and Russia to America assembled here for three days of business talks under the banner of the Turkey World Trade Bridge 2009 to build meaningful cooperation in trade and investment on a win-win deal.

Twelve percent of the total global trade volume is represented at this business summit being sponsored by the undersecretariat of the Turkish Foreign Ministry and TUSKON, a confederation of businessmen and industrialists of Turkey.

Four Deputy Prime Ministers, 20 Trade and Commerce Ministers, and nine Deputy Ministers from the participant countries attended the first Istanbul Trade Ministers Summit and the business summit.

Turkish Prime Minister Recep Tayyip Erdogan on Tuesday afternoon formally inaugurated the mega event titled Future of Global Trade and Prospects for Cooperation.

The business summit is being held a day after the first Istanbul Trade Ministers Summit. Commerce Minister Lt Col (retd) Faruk Khan led Bangladesh asking for duty and quota-free access to the markets of the developed world. He also sought proportionate share for Bangladesh from US$ 1.13 trillion pledged at the London G-20 summit to help overcome the negative impact on Bangladesh by the economic meltdown for which, Khan said, LDCs are not responsible.

A 15-member business delegation from Bangladesh is participating in the business summit. The delegation members are mainly from apparel and textile sectors. Though Bangladesh does not appear as a major player in this high-profile business summit, but Bangladesh officials say the country can offer the best opportunities for investment in setting up Small and Medium Enterprises and joint ventures in agriculture, food processing, tourism, service and hospitality sector and mechanical sector.

Inaugurating the 3-day business summit, the Turkish Prime Minister said the summit would provide an opportunity for making new friends and new cooperation particularly among the emerging and developing economies. He said Turkey's is now the 6th largest economy in Europe and 16th largest in the world.

Erdogan said although current recession affected Turkey in export and employment sectors like other developed and developing economies, but his country will soon be able to overcome the crisis.

Opposing protectionism by some nations in the wake of the economic meltdown, the Turkish Prime Minister said the global cooperation is needed to overcome the global crisis. Both government and private initiatives are essential to face the situation, he added.

TUSKON President Rizanur Meral said his organization is the firm supporter of international cooperation and believes in the importance of the alliance and the strategic partnership. "I believe, Turkey and all participant countries will benefit greatly from this cooperation."

Dilemma of internally displaced persons

2009-06-05T11:54:00.002-07:00

Asif Haroon Raja

In the aftermath of Soviet invasion of Afghanistan in December 1979, Pakistan had to bear the burden of over 3.5 million Afghan refugees; 1.7 millions have still not returned. Besides the economic burden, they have inflicted huge damage to the social fabric of the society particularly where their influx has been the maximum. Large percentage of Afghan refugees who had not been confined to the camps is living in all parts of the country. They are being cultivated by foreign agencies based in Kabul to serve their sinister designs. Pakistan is now caught up with another similar situation in the wake of military operations in Lower Dir, Buner and Swat as a result of which over 2.5 million internally displaced people (IDPs) have posed a new kind of challenge to the government. The idea was to battle the militants head on, eliminate and flush them out of the valley and adjoining areas. What has actually happened is that peaceful residents have been unwittingly flushed out in massive numbers. The massive outflow was not anticipated either by NWFP or federal governments and hence was caught with their pants down.

Only 20% of the IDPs are residing in 26 camps in six districts of NWFP while 80% are living under own arrangements either in unused school buildings, under construction colonies or with relatives and friends. They came in their personal clothing with small bags and no cash since the banks had become non-operative. Coming from hill stations, the sweltering heat under thin tents with no electricity is a real test of their forbearance. Although hectic efforts are underway to provide basic amenities to the IDPs living in camps, so far the situation has not been controlled due to gigantic challenges. The NWFP government was neither prepared for such a large influx, nor equipped to deal with it. The federal government was slow in its response and did not take up the matter in real earnest.

About 4000 displaced persons, mostly children, women and old men tried to enter Sindh to find shelter with their kin and acquaintances but were stopped at Kashmore by Sindh government under pressure from Sindh nationalist parties led by JSQM and MQM. Uprooted from their homes, leaving behind their cattle, standing crop, cash in banks and entire household items, caught in the crossfire of the militants and the security forces, they have been turned into refugees within their homeland and some political leaders are trying to equate them with Afghan refugees while others are expressing fears that Taliban in the guise of IDPs might enter Sindh to disturb law and order. Strikes were observed in Sindh to protest their entry and to force the government to either return them or get each individual registered and confined to camps only. Such vile elements must know that there is a large percentage of well-to-do among them who had to abandon their homes to save their lives. Even a poverty stricken Pakhtun has an ego, self-respect and pride and doesn't like to be treated as a beggar.

Unless the IDPs are handled with extreme care, they can become another security hazard in the future over which the state will have no control. Every third person will become a non-state actor and an easy prey for the Taliban to make him a member of Tehrik-e-Taliban.

It would give an excuse to US drones to freely choose targets and launch strikes in all nooks and corners of the country. While the elites would still be residing in safer environments of Red and Green Zones, security guards and bullet proof cars, the have-nots will be at the mercy of miscreants, Taliban and the drones.

It will be the deracinated, dispersed, dispossessed, disempowered and demoralized lot of IDPs that would decide the victory or defeat of Malakand battle. They are a momentous vulnerability and with each passing day this issue would get more and more complex and grave. Its tremors are felt in each and every nook and corner of the country.. Sindh in particular is getting restive on the issue of IDPs. The ANP-MQM collision and Pakhtun-Mohajir ethnic clash seems imminent. The IDPs are there to be won over by the rulers and the elites or lost to the detractors of Pakistan. This window of opportunity will remain open for a short period. Time is running out for the government and not for the Taliban and foreign agencies that are in no hurry. In fact they want prolongation of war and multiplication of discomforts of the IDPs.

Longer the period of trial and tribulation for the IDPs, greater will be their sufferings leading to despair and hopelessness. It would open up greater opportunities for the vested groups to exploit and poison their minds and alienate them and turn them into suicide bombers. They would have achieved a great deal if they manage to cultivate few thousands from within 2.5 million whose patience is fast wearing thin.

Lots of funds are pouring in from international donors while local philanthropists are contributing handsomely towards various funds opened for welfare of IDPs.

These are in addition to regular flow of assistance in kind from people belonging to all classes.. What is required is efficient and speedy distribution to the needy. While the public got energized at its own in no time to reach out to the IDPs in distress to ease their pains, the government response was sluggish. President Zardari remained out of the country for almost a month and so were ANP leader Asfandwali and some other political leaders during this critical juncture. The gravity of the situation demanded declaration of emergency to cope with extraordinary human tragedy of gigantic proportions. Punjab government as well as PML-N leader Nawaz responded with greater alacrity and took practical measures to provide speedy relief to the affected people and opened the gates of Punjab for IDPs. However, the tendency of point scoring to earn political mileage is again in display as was seen during the 2005 earthquake. Practice of showoff and boastful claims of sending so many truckloads of relief goods on media to gain popularity is against the spirit of Islam.

I recall the earthquake that struck Swat in 1975 causing extensive destruction, in the wake of which huge aid poured in from international community. The then populous leader Zulfiqar Ali Bhutto visited Swat and during his emotional speech to the grief stricken people he vowed to convert the devastated valley into a paradise with the help of external assistance received. His promise remained unfulfilled and the people as well as the valley remained as backward as ever except for the tourism industry picking up n 1990s. Had the amount received been honestly utilized for the uplift of Swat and its people, the phenomenon of Talibanisation would never have crept into this neglected region. Each time that aid has flowed in from outside after natural or manmade calamities, it is frittered away by the corrupt and inefficient managers leaving behind tales of bungling and corruption.

There is lot of cribbing among the people of Azad Kashmir where a mammoth earthquake had occurred in October 2005. They say that only a fraction from the colossal amount donated by internal and external donors has been spent on reconstruction and rehabilitation. Given the poor track record, it is wished the incumbent regime makes amends and shows better results.

It should shed away its traditional lackluster approach and for a change put its best foot in front to undertake relief works in real earnest. Provision of relief to IDPs is first phase only. The crucial and most difficult phase will be their rehabilitation and reactivation of people friendly civil administration for which comprehensive plans must be chalked out now.

Racists for democracy

2009-06-05T11:50:00.002-07:00

Uri Avnery

How lucky we are to have the extreme Right standing guard over our democracy. This week, the Knesset voted by a large majority (47 to 34) for a law that threatens imprisonment for anyone who dares to deny that Israel is a Jewish and Democratic State.

The private member's bill, proposed by M.K Zevulun Orlev of the "Jewish Home" party, which sailed through its preliminary hearing, promises one year in prison to anyone who publishes "a call that negates the existence of the State of Israel as a Jewish and Democratic State", if the contents of the call might cause "actions of hate, contempt or disloyalty against the state or the institutions of government ?or the courts".

One can foresee the next steps. A million and a half Arab citizens cannot be expected to recognise Israel as a Jewish and Democratic State. They want it to be "a state of all its citizens" - Jews, Arabs and others. They also claim with reason that Israel discriminates against them, and therefore is not really democratic. And, in addition, there are also Jews who do not want Israel to be defined as a Jewish State in which non-Jews have the status, at best, of tolerated outsiders.

The consequences are inevitable. The prisons will not be able to hold all those convicted of this crime. There will be a need for concentration camps all over the country to house all the deniers of Israeli democracy.

By the way, the bill does not single out Arabs explicitly - even if this is its clear intention, and all those who voted for it understood this. It also prohibits Jews from advocating a change in the state's definition, or the creation of a bi-national state in all of historic Palestine or spreading any other such unconventional ideas.

One can only imagine what would happen in the US if a senator proposed a law to imprison anyone who suggests an amendment to the Constitution of the United States of America.

This takes me back to the 60s, when the weekly magazine I edited, Haolam Hazeh, published an Arabic edition. One of its employees was a young man called Rashed Hussein from the village of Musmus. Already as a youth he was a gifted poet with a promising future.

He told me that some years earlier the military governor of his area had summoned him to his office. At the time, all the Arabs in Israel were subject to a military government, which controlled their lives in all matters big and small. Without a permit, an Arab citizen could not leave his village or town even for a few hours, nor get a job as a teacher, nor acquire a tractor or dig a well.

The governor received Rashed cordially, offered him coffee and paid lavish compliments to his poetry. Then he came to the point: in a month's time, Independence Day was due, and the governor was going to hold a big reception for the Arab "notables"; he asked Rashed to write a special poem for the occasion. Rashed was a proud youngster, nationalist to the core, and not lacking in courage. He explained to the governor that Independence Day was no joyful day for him, since his relatives had been driven from their homes and most of the Musmus village land had also been expropriated.

When Rashed arrived back at his village some hours later, he could not help noticing that his neighbours were looking at him in a peculiar way.

When he entered his home, he was shocked. All the members of his family were sitting on the floor, the women lamenting at the top of their voices, the children huddling fearfully in a corner. His first thought was that somebody had died. "What have you done to us!" one of the women cried, "What did we do to you?"

"You have destroyed the family," another shouted, "You have finished us!"

It appeared that the governor had called the family and told them that Rashed had refused to fulfill his duty to the state. The threat was clear: from now on, the extended family, one of the largest in the village, would be on the black list of the military government. The consequences were clear to everyone.

Hidden games of high finance

2009-06-05T11:50:00.001-07:00

J. Bradford DeLong

No one questions the usefulness of "low" finance: the ability to use checks, banknotes, and credit cards rather than having to cart around chests of silver, scales, and reagents to assay purity, and needing armed guards to protect the silver - and more guards to watch the first set of guards - has obvious efficiencies. So does the ability of households to borrow and lend in order not to be forced to match income and expenditure every day, week, month, or year. But what use is "high" finance?

Economists' conventional description depicts high finance as providing us with three types of utility. First, it allows for many savers to pool their wealth to finance large enterprises that can achieve the efficiencies of scale possible from capital-intensive modern industry.

Second, high finance provides an arena to curb the worst abuses by managers of large corporations. Shareholder democracy simply does not work, but managers' fear that if the stock price drops too low they will be out on their ears provides a useful restraint.

Finally, high finance allows for portfolio diversification, so that individual investors can seek high-expected returns without being forced to assume large, idiosyncratic risks of bankruptcy and poverty.

But these are the benefits of high finance as they apply to the ideal world of economists - that is, a world of rational utilitarian actors who are skilled calculators of expected utility under uncertainty, who are masters of dynamic programming, and who breathe stochastic calculus in their daily life. We do not live in such a world.

If we take the world as it really is, we quickly see that high finance performs two further tasks that advance our collective economic welfare. It induces us to save, accumulate, and invest by promising us safe and liquid investments even in extraordinary times. It also induces us to save and invest as a prerequisite to indulging our love of gambling, and as a byproduct of it.

It is a fact that we are much happier saving and accumulating, and that we are much more likely to do so when we think that the resources we have saved and accumulated are at hand. It is also true that when we invest our wealth - in Pfizer's intellectual property, factories in Shenzhen, worldwide distribution networks, or shopping malls in Atlanta - it is not, in fact, at hand. Our invested wealth can only be made to appear liquid to any one of us, and only if there is no general shift in our collective desire for liquidity.

Of course, investors who believe that their wealth is securely liquid, and that they are adding value for themselves by buying and selling are suffering from a delusion. Our financial wealth is not liquid in an emergency. And when we buy and sell, we are enriching not ourselves, but the specialists and market makers. But we benefit from these delusions. Psychologically, we are naturally impatient, so it is good for us to believe that our wealth is safe and secure, and that we can add to it through skillful acts of investment, because that delusion makes us behave less impatiently. And, collectively, that delusion boosts our savings, and thus our capital stock, which on turn boosts all of our wages and salaries as well.

Seventy-three years ago, John Maynard Keynes thought about the reform and regulation of financial markets from the perspective of the first three purposes and found himself "moved towardt making the purchase of an investment permanent and indissoluble, like marriaget" But he immediately drew back: the fact "that each individual investor flatters himself that his commitment is 'liquid' (though this cannot be true for all investors collectively) calms his nerves and makes him much more willing to run a riskt"

Moreover, for Keynes, "the game of professional investment is intolerably boring and over-exacting to anyone who is entirely exempt from the gambling instinct; whilst he who has it must pay to this propensity the appropriate tollt" It is for these reasons that we have seemed frozen for the past generation or two whenever we have contemplated reforming our system of financial regulation. And it is why, even in the face of a severe financial crisis, we remain frozen today.

Rubber industry's prospects

2009-06-05T11:47:00.000-07:00

AS appeared in the press recently, a local entrepreneur is producing liquid rubber and marketing the item in a remarkable feat giving a lift to the country's five decades old rubber industry. The enterprise, HR Latex, set up at Chokoria near Cox's Bazar, has successfully developed 60-grade rubber, usually known as liquid rubber, after an untiring effort of four years. Production of liquid rubber - an intermediate material used to make costly products like divers outfits, surgical gloves and automobile parts, etcetera - lifts the local rubber producers' position from mere rubber-sheet makers. Local rubber developers led by the state-owned Bangladesh Forest Industries Development Corporation used to produce rubber-sheet, a low-end product mainly used for footwear production. Before commercial marketing of the homegrown liquid rubber until last year the country used to depend fully on import to meet the annual demand of liquid rubber amounting to about 14,000 tonnes. The local plant now supplies 2,000 tonnes that helps the country save foreign exchange worth Taka 200 crore at least by substituting the import of the item.

The local enterprise worked hard for the development of its own 'formula' for producing liquid rubber is not made available by other producers. Technology transfer is usually restricted in most of such industries elsewhere also. Slowly many private entrepreneurs are coming forward with such industrial ventures like the one at Chokoria. It has 12 rubber gardens on 300 acres land in the surrounding area and the liquid rubber plant can now meet one-seventh of the country's total demand annually. What is more significant to note is that the local rubber enterprise, if provided with official support and assistance, can meet the total annual requirement of liquid rubber of the country within next five years.

Opening procedure of Various types of Mudaraba and Al-Wadiah Savings Account and Closing of Accounts

2009-05-08T11:43:00.000-07:00

Account opening is the fundamental task for a Bank. A person or any legal entity may open an account with some procedures and rules. Islami banks mobilize deposit through application of the following two principles of Shariah:

1) Al-Wadiah

2) Mudaraba

The two principles are discussed below:

Al-Wadiah

Al-Wadiah principles imply that the bank will receive funds from customers through their deposits and will use those funds for the benefit and at the risk of the bank, but bank is bound to provide demands to the owner of the account at anytime without sharing any profit or loss.

Mudaraba

Mudarab is a form of business contract where one party supplies money to the account and the other uses the money for business or other task. The supplier of the money is called Shahib-al-Maal and the other person who does business with the money is called Mudarib. In Mudaraba the bank receive deposits from the suppliers and the bank will have exclusive right to manage the fund and the profit resulting from such deposits will be shared between the bank and the depositor(s) at a pre-agreed negligence of the bank or any of its representative, will be borne by the depositors. Saving bank accounts, short Notice Deposit and Various Term & Scheme Deposits of Islami banks are conducted on this principle.

The following are the discussion of the various types of Account openings.

(a) Account opening procedure in the individual Name-

To open bank account in the name of individual the following procedures are needed to be followed:

To fill up and sign the Account opening form.
To duly sign the specimen signature card.
Photographs of the opener should be attested.
Account holder has to attest the photograph of the Nominee.
Photocopy of passport/National ID card/Driving License/Certificate of Employer/Certificate of Union Parishad Chairman/Poura Commission etc. of the account holder.
To submit TIN certificate (if available)
To fill up the KYC (know Your Customer) and TP (Transaction Profile).

(b) Account opening procedure in the joint name:

To open joint bank account the following papers procedures are followed:

To fill up and sign the Account opening form.
To duly sign the specimen signature card.
Photographs of the opener should be attested.
Account holder has to attest the photograph of the Nominee.
Photocopy of passport/National ID card/Driving License/Certificate of Employer/Certificate of Union Parishad Chairman/Poura Commission etc. of the account holder.
To submit TIN certificate (if available).
To fill up the KYC (know Your Customer) and TP (Transaction Profile).

(c) Account opening procedure in the name of a Minor:

Account in the name of Minor can be opened by the procedure of individual account which will be operated by the natural guardian (Father/Mother) or by the legal guardian appointed by the court. The title of the account must indicate that the account holder is a Minor mentioning the date of birth. The Minor account will be handled by the guardian.

(d) Account opening procedure in the name of Sole Proprietorship Concern:

To open bank account in the name of Sole Proprietorship Concern the following procedures are followed:

To fill up and sign the Account opening form and sealed.
To duly sign the specimen signature card.
Photographs of the Proprietor should be attested.
Account holder has to attest the photograph of the Nominee.
Photocopy of passport/National ID card/Driving License/Certificate of Employer/Certificate of Union Parishad Chairman/Poura Commission etc. of the Proprietor.
To submit TIN certificate.
To submit photocopy of Up to date Trade License.
To fill up the KYC (know Your Customer) and TP (Transaction Profile).

(e) Account opening procedure in the name of Partnership Concern:

To open bank account in the name of Partnership Concern the following procedures are followed:

1. To fill up and sign the Account opening form and sealed.

2. To duly sign the specimen signature card.

3. Photographs of the Partners/Signatories should be attested.

4. Partners/Signatories have to attest the photograph of the Nominee.

5. Photocopy of passport/National ID card/Driving License/Certificate of Employer/Certificate of Union Parishad Chairman/Poura Commission etc. of the Partners/Signatories.

6. To submit TIN certificate.

7. To submit photocopy of Up to date Trade License.

8. To submit copy of Partnership Deed.

9. To submit list of partners with their address and phone numbers.

10. Exact of resolution of the partners for opening the bank account and authorization for the partners for opening the bank account and authorization for its operation signed by all partners. Care should be taken to see that the adopted resolution does not clash with the relevant clause of the partnership Deed.

11. To fill up the KYC (know Your Customer) and TP (Transaction Profile).

(f) Account opening procedure in the name of Private & Limited Company:

To open bank account in the name of Private & Limited Company the following procedures are followed:

1. To fill up and sign the Account opening form and sealed.

2. To duly sign the specimen signature card.

3. Photographs of the Directors/Signatories should be attested.

4. Photocopy of passport/National ID card/Driving License/Certificate of Employer/Certificate of Union Parishad Chairman/Poura Commission etc. of the Directors/Signatories.

5. To submit TIN certificate of the company.

6. To submit photocopy of Up to date Trade License.

7. To submit true copy of Memorandum and Articles of Association.

8. To submit true copy of Certificate of Incorporation.

9. To submit certified true copy of Certificate of Commencement of Business of the company is case of public Limited Company.

10. To submit the latest list of partners with their address and phone numbers.

11. Exact of resolution of the partners for opening the bank account and authorization for the partners for opening the bank account and authorization for its operation signed by all partners. Care should be taken to see that the adopted resolution does not clash with the relevant clause of the Articles of Association.

12. To fill up the KYC (know Your Customer) and TP (Transaction Profile).

With due introduction and after receiving initial deposit preferably by cash all accounts should be opened. It should be opened after fully confirmed the genuinely of information of the customer. Manager/operation Manger of the branch must have to permit to open an account. Signatures of the account holders/Authorised signatories should be duly admitted/verified by the authorized branch officials. TP or Transaction profile should be commensurate with the declared source of fund/occupation/sales of business of the account holder. Letter of thanks should be sent to the account holder address which will help to verify his address and to be pleased by the account holder.

Closing Bank Accounts

A request letter of the account holder should be received to close the mudaraba savings deposit, Al-Wadiah current Deposit and Mudarab short Notice Deposit. The signature in the request letter of the account holder must be verified and unused cheques must be collected from the account holder. Besides, prior clearance should be obtained from the Investment & Foreign Trade Department of the branch before closing the Account. And also before closing the account, remunerative accounts should be applied with profit. Having done that balance amount should be paid to the account holder through payment order or through cash Debit Voucher.

How to Make Money with Facebook!

2009-03-12T00:24:00.000-07:00

The rise in popularity of the soon-to-be number 1 social network site Facebook is due to a combination of two things.
1. Formerly a hangout only for high school and college students, Facebook allowed anyone to join in September, 2006.
2. In May, 2007 Facebook opened up it’s network to developers.
By opening up it’s network to developers Facebook has provided a way to make money right on the Facebook web site. Something you can’t do on MySpace. The only way to make money off of MySpace is by attracting users to another web site outside the MySpace community and making money on that site.
Facebook: a developer magnet
Since opening up it’s network to developers Facebook has seen a flood of new applications created. In fact, over 1000 developers are signing up every day.
Addonomics, an open analytics platform that tracks Facebook application growth and provides stock-market-style analysis of Facebook features says that as of today…
• There are 342,015,965 installs across 5,118 apps on Facebook.
• These applications were used 23,360,190 times in the last 24 hours and have a combined valuation of $249,800,000.
• Facebook has approximately 40 million Unique Active Users in the past 30 days and a valuation between $10Bn and $15Bn.
• This translates to between $250 and $375 per active user.

7 ways to make money with Facebook

In The Facebook Economy Business 2.0 outlined a few ways application developers are making money off of Facebook.

1. Selling advertising space
Facebook apps with large audiences can make a lot of money selling ad space on their page through ad networks like Lookery, Userplane and Knotera.

2. Sponsorship
Advertisers are lining up to sponsor popular Facebook applications. The Food Fight! application which lets you throw virtual food at your friends is soon to be serving up virtual chicken wings from a major food chain. Tyson?

3. Sell goods and services
The future of Facebook applications is utility, not fun. Facebook application Band Tracker searches upcoming concerts and links to ticket vendor web sites. Soon, it will be common for people to make purchases from their own Facebook pages.
Lee Lorenzen, CEO of Altura Ventures provided us with the following four ways to make money with Facebook.

4. Write a Facebook book
I have heard about a number in the works and that means advances/royalties for authors.

5. Write a Facebook blog
There are already a number of good ones beginning to cover the Facebook eco-system but there is room for more. Once you have an audience for your blog you can start selling ads and sponsorships.

6. Develop Facebook apps as a consultant
Good / great Facebook developers are in very limited supply and so the demand is high. Iâ€™ve heard of hourly rates in the $200 per hour range for folks who can architect, write and deploy viral Facebook apps.

7. Sell your Facebook app
If you can create an app on Facebook, get it to 10K to 100K users, harvest some ad revenue from it by partnering with AdBrite for CPM/CPC ads, offer Cost Per Install ads via Adonomics and you provide data to get an Adonomics certified valuation, then you will be in a position to get top dollar for your application should you decide to sell it.
At the moment, the big winners of the Facebook jackpot are application developers. The big losers might be other social networks like MySpace, if they fail to open up their networks.
Source: Virtualmarketingblog

How to Get a Girl to Like You

2009-03-07T06:35:00.000-08:00

Girls do not like the best men around. Most girls do not like the men that most would feel are the best deserving. Rather, girls like what they feel they must or what they don't have a choice about.

Making a girl like you isn't complicated at all as it may seem because girls are actually as excited as boys are when it come to cross gender relationships. They key is to be confident. A guy should never be too excited about anything and he must keep a sense of humor at all times.

The guy ought to maintain a funny balance of emotions all through and any girl likes that.

Secondly, a guy must remember at all times some useless or insignificant things that mean a lot to any girl such as the stars, birthdays, anniversaries, the first date etc. failure to do this will be passing an opportunity to score with a girl to another more sensible man.

No matter how trivial such dates are to you, keep them at hand and never forget them and she will have no choice but to like you seeing that you care about her more than most.

A guy must live his own life without being a control freak who always falling back to a zone full of friends, parents, siblings, colleagues and such comfort zones. Girls will always like a man who they can themselves influence independent of other external influences.

When a girl sees or discerns that she is not hustling for you interest equally with other influences, she will definitely like you.

Finally, a guy must make an impression to the particular girl of choice because romance has no one-size-fits-all impression.

What might impress one girl may infuriate another and the best course of action is to be yourself and demonstrate the unique skill and or talent that sets you far apart from the ordinary crowd. Flirt with girls and let them see your confidence while doing what you do best and she will like you, no doubt.

International Mother Language Day

2009-03-06T22:06:00.000-08:00

Among thousands of languages, mother language is the language by which people can express his thoughts. Every person has his own mother language, which bears his identity. Our mother language is Bangla, which was established as official language by bloods of martyrdom during Pakistan period. Only Bangali nation has sacrificed souls for language. Students proceeding with cortege in highway of Dhaka in 21st February 1952, breaking 144 rule for want of bangle language as their mother language. Rafiq, Salam, Borkot, Jobbar and to name a few were killed along with so many people when police fired on cortege. At last, it was established our demand of Bangla as mother language. Some people in India are also sacrificed their souls for demand of Bangla. Almost 22 people were died for Bangla from 1952 to 1986. so international mother language day is very valuable. To establish 21st February as international mother language day, contribution of Mr. Rafiqul Islam is praise worthy who lived in Canada. He was the founder of a multinational company “Mother Language Lover of the World”. Mr. Rafiqul Islam offer to the secretary general of United Nation Coffee Anan to establish 21st February as International Mother Language Day. But he advised to contact with UNESCO, for it was the perfect organization for the issue of language. But UNECO informed him that it would not acceptable from any private organization or personnel. Then Mr. Rafiq contacted the foreign minister of Bangladesh in France and permanent member in UNESCO of Bangladesh Soiyed Moazzen Ali. He also contacted senior officer of UNESCO Tozammel (Tony) Hoque. Both of them showed Mr. Rafiq how to proceed for this issue and how to contact with Bangladesh government. Then our UNESCO national commission and Education ministry presented it to the former prime minister Shaikh Hasina after finalizing the procedure. Our prime minister permitted the issue quickly. Former education minister A.S.H.K Sadeq represented Bangladesh group in the general conference of UNESCO from 25ht October to 2nd November 1999. in 36th October secretariat of UNESCO published the issue as rough. At last in 17th November 1999 it was accepted in the general conference and declared 21st February as the International Mother Language Day. Since 21st February, 2000 International Mother Language Day has been observing. To declare Mother Language day by the United Nation is a great acquire for us. We hope to hold this acquire by properly respecting our Bangla Language.

Why Thunder makes Sound?

2009-03-06T22:04:00.000-08:00

We all know that thunder makes sound. Most of us think that this sound comes from the rub of clouds. That’s not true. Huge electric charge gathers in the clouds and comes down to earth breaking air pressure. Sometimes it transfers from cloud to cloud. This creates huge speed of electric and so creates huge heat. Then air temperature becomes 10 to 20 thousands degree. This sudden heat makes air warm and it becomes bright white in color. This situation is known to us as flickering of electricity. Air spread out for this heat. After this condition air comes down cool and squeeze and goes to previous heat and pressure. This kind of sudden shakiness in the air creates frequency. This flow of pressure frequency in the air is called frequency of sound, which is known to us as thunder in the air. Now the question is why the sound of thunder sometimes loudly and sometimes silently? This depends from the distance we are hearing the sound. If the flickering of electricity occurs near then the sound is loud but if it occurs far away then sound is quite silent. We know, speed of light can be seen first from the sky and after few seconds the sounds come to our ear. The thunder in the sky is natural and it will continue forever.

Plastic Surgery

2009-02-27T22:13:00.001-08:00

The phrase "plastic surgery" is heard every time someone mentions a celebrity or anyone famous, they have become a typical everyday at the time of coffee and discussed in daily life. We could count on the fingers of one year to the celebrities who do not have plastic surgery, but very few talk about their interventions, for example: if a person tries to talk to Tom Cruise about their surgeries you get into trouble (in Currently I am not sure if he has surgery, but it looks as if any).

My opinion about plastic surgery is a bit negative. However, if you're a star that is always in the limelight, I can see why you want to get one, if you're a regular person with a common work, I can not imagine why one wants or needs. Professionals in the field always talk to you before surgery and only after several psychological tests may be a course that in certain parts surgeons who work there without permits required under any circumstances it is advisable to go with them.

If you are a woman and is 100% sure you need an increase in breast, liposuction or any other (which is many) need to know some things before the surgery, then try to explain the most common questions that arise when considering surgery.

To begin with, the most common:

When will I see results?

R = It depends, in some procedures take longer results in some less noticed, the sirugano will know when, there is always a possibility that you are not entirely satisfied with the results, this is a risk you are taking.

¿Will it hurt?

This is the easiest, CLARO QUE SII! It will hurt a lot, this will prevent you from continuing with their daily routine, you can not do that to exercise if, in some cases will have to remain lying down for a week or more, there are also medications that will not feel much pain, but no pill 100% effective.

How much?

Much, though sirugano depends on who you are, but do not expect to be cheap, so I could say is that if you really sure you need surgery, do not try to save money by choosing who becomes cheaper, look better sirugano that can be found, recognized, because his health is not game, yet they choose the best sirugano always risk in this sort of thing.

Think well before choosing a plastic surgery done.

Natural remedies against fungal infections on nails

2009-02-27T22:12:00.002-08:00

Fungi are everywhere in our environment and can infect several parts of the body with different effects. Treatment with conventional medicine to treat fungal infections in the nails are expensive and / or long lasting. An alternative is the natural remedies. There are natural remedies against the fungus in the feet and nails that are effective.

Fungus infections in the fingers or toenails, it is very common and extremely difficult to cure. Fungi are everywhere in our environment and can infect several parts of the body with different effects. When the nails are infected with fungi are thicker and discolored. According to the infection progresses and invades more of the nail area, it starts to peel and fall. People flock to medicine or home remedies for fungus fungi that are not always effective or bring unwanted side effects.

In some cases the nail emerges from the skin as a result of the growth of the fungus. These nails are not only ugly, smell bad, but also according to the fungus is invading the tissue. The nails are naturally strong barriers, and resistant to fungus and other infections. However, due to the strength of the barrier once the infection has spread is extremely difficult to eradicate. In this case, home remedies for fungi are not effective and are a waste of time.

The fungi need a warm moist environment to grow. Tight shoes, especially if used for years, providing an ideal environment for the fungus to grow. Communal showers are another place where infections can spread and grow on the feet of one person to another. Any reason that reduces the immune resistance may predispose individuals to fungal infections. Diseases such as diabetes and AIDS as well as factors related to lifestyles as Fair to pollutants, lack of exercise and a balanced diet, all help reduce the immune response to fungi and remedies do not cure.

Treatment with conventional medicine to treat fungal infections in the nails are expensive and / or long lasting. Treatment may include topical preparations and / or oral medications. The infected nail fungus is difficult to treat and many people find that once left treatment, the infection becomes. Oral anti-fungal medications have significant side effects and can interact with other medicines.

Some ingredients used in herbal remedies, natural areas are often an effective alternative, safe and natural.

Melaleuca laterifolia also known as tea tree oil is used externally for inflammation and to treat various skin conditions. This oil has characteristics antibacterial, antifungal and excellent healing. The tea tree oil soothe and reduce skin inflammation as well as treat any fungal infection of nails.

Lavendula officinalis (lavender) essential oil is scented with a characteristic antifungal, antivirus and anti-bacterial. This oil also has soothing characteristics.

Cymbopogon citrates (lemon grass) is known to treat infections and is especially helpful for fungal infections. This oil is also antifungal and antibacterial, as calm and assists healing by promoting regeneration of the cell.

Syzygium aromaticum is Clove Oil and is considered an essential oil antifungal and antibiotic excellent. Oil of cloves is a well-known antibiotic and improves the health of your nails.

Natural remedies against stress and anxiety

2009-02-27T22:11:00.001-08:00

When we are stressed our heart rate and increased pressure to bring more oxygen and nutrients to the blood flow to our brain, the blood sugar increases to provide the energy we need in these times of crisis, blood is diverted from the intestines and and bring energy to the muscles of the arms and legs.

If the levels of stress and anxiety down after a period of time, our body returns to normal operation, but not low and constant, then our response becomes a physical threat to our health.

We began to experience insomnia, pain and inflammation of muscles, fatigue, hypertension, indigestion, high cholesterol, impotence, increased or decreased appetite, which makes up or down in weight depending on the case, weak immune system so that we can get influenza among other things. Emotionally we experience irritability, impatience, lack of sexual interest, lack of concentration and depression.

Our bodies need time to recover from this crisis, some have already had experience with medications prescribed by a doctor but have suffered the side effects of these disgustantes. Luckily have found some substances provided by nature that our bodies actually absorb and utilize to cope with anxiety and stress without side effects.

L-Tyrosine is an essential amino acid often used to treat insomnia, depression and anxiety, as well as helping to control appetite and elevate our mood. The herbal formulas are available for us to give us a good night's sleep and that fill us with energy so we can deal with stress and anxiety.

Aromatherapy, the use of fragrances based on plant essential oils can be added to the bath, used for massage or use in our house or room by unlocking the essence of aromatherapy candles. As you inhale the aromas reach the brain immediately and provide us with a calm and relaxed atmosphere. The essential oils of aromatherapy are more effective lowering stress and anxiety are: bergamot, cypress, geranium, jasmine neroli, sandalwood and ylang-ylang. The most popular oil used to give calm and well-being is the "Lavender".

These are just some of the substances and formulas available to help keep our bodies healthy, our bodies need assistance from us to deal with stress and anxiety, do not let all the work, the safest method is to treat with all natural products available, and do not represent the risk of side effect that increases in time to relieve our poor

As eliminate cellulite

2009-02-27T22:09:00.000-08:00

Often described as orange peel, it is a fact that 90 to 98% of the problems of cellulite in women, however some men have also suffered. The first time was described as 150 years ago by doctors in France.

Many scientists today called "so-called cellulite" because it does not recognize it as a disorder of the skin, but why is it so difficult to remove if it is a skin disorder?

Overweight women have cellulite more pronounced, but is also seen in thin women, this is due to the formation of the skin of the person which is something genetic.

The real solution to the cellulite is a good diet and regular exercise, women who have cellulite and want to get rid of it should make a diet low in calories and reduce the amount of fat they have on the body.

A routine with weights and cardiovascular exercise at least 3 to 5 times per week will significantly reduce the amount of body fat. Swimming is an activity in which women can participate that are also fun, has its advantages in health and of course helps to eliminate the orange peel.

Cellulitis is always located above the muscles, so the weight training is extremely important, if muscle groups are used, are more susceptible to a textured appearance, the skin becomes more vulnerable to an excess of fat cells and this reaches its greatest thickness when it reaches 30 years.

This vulnerability increases when women do little exercise and have bad eating habits, I recommend a healthy diet and an exercise routine to gradually lose weight, diets and extreme weight loss fast lose weight too fast, but the cellulite will still be there, as well not be as advisable as I mentioned yesterday.

There are a variety of different products that guarantee a smooth skin and fighting the cellulite, but none of these provides a permanent effect on the appearance of the skin, many of them significantly reduced the appearance of cellulite on the thighs, but these will have if you stop applying the product, liposuction is not recommended because it can be seen an uneven appearance to the skin even more pronounced after the surgery.

Other methods that can move the fat cells of the tissues, but not eliminate cellulite massage techniques are the skin, can test all the existing products but remember that none of them has proven to have lasting effects only temporary.

Signs and symptoms of a heart attack

2009-02-27T22:07:00.001-08:00

When we talk about the symptoms of a heart attack, we must clarify that the experience one will not necessarily mean that we will have one, we know only through a visit to the doctor and this clarification is that many people do not go andalusia doctor to review, shame which lead to the emergency room of a hospital and then realize it was nothing.

Considering the seriousness of the subject must leave behind the shame and ask to bring them to a hospital immediately when you experience the signs and symptoms of heart attack, I mention them down some.

Digestive disturbance may be a symptom of heart attack may also feel a greater pressure when the heart is pumping blood, these symptoms are not very strong and that is why they are often ignored. Can vary from person to person. For example, pain is experienced by the shoulders in men and women are less strong, this is an unusual symptom.

People who are sensitive to heart care or care not to make physical effort, a strong release, more eating, mental stress, cold water etc. In these situations, the heart requires more oxygen and creates a blockage of the heart problem, so the person experiences pain in his heart, this condition usually lasts about 15 minutes, if it lasts more definitely be seen as a symptom of an attack .

Dizziness is another common symptom, attacks usually occur during the 4:00 a.m. and 10:00 a.m. when they're sick, but can occur at any time of day, they can also be associated with future attacks, this is true particularly when the dizziness continues for several days.

Apart from these warning signs, symptoms typical of a heart attack include:

Pain in the center of the chest, some people experience a terrible pressure in this part and also in some cases the pain comes to the jaw, shoulder, arm, lower arm and back, usually the person is sweating, feeling weak, dizziness, and you need air. If you experience these symptoms, we recommend that you go immediately to emergencies.

Ten Ways To Improve Memory

2009-02-25T22:28:00.000-08:00

Some things you would like to forget. For everything else, remember these easy tips.

1. Move it or lose it

As if keeping fit is not incentive enough, the army also raises levels of neuro-essential proteins that "carry more neurons to be better connected," says Dr. Hyman's Medical Center of Lenox, Massachusetts. "It's like fertilizer for the brain." For best results, he recommends 30 minutes of vigorous cardiac activity, four to six times a week.

2. Drink red

Studies show that red wine taken in moderation (no more than one glass daily for women) slows the accumulation of plaque in the brain, which can reduce the risk of Alzheimer's disease.

3. Stop tension!

If you do not learn how to relax, the stress hormones shrink the hippocampus, the center of the memories in the brain.

4. Banning sugar

He wants to forget the sugar binge of its memory? Go ahead and might be in luck. "It is clear that sugars and refined carbohydrates, such as those found in processed foods, cause damage and weaken the memory," says Dr. Hyman. In fact, diabetics are four times more likely than non-diabetics to suffer from dementia.

5. Taste of curry

The flavor should not be the only reason to extend its shelf of spices. The studies found that turmeric - a yellow spice that gives curry its distinctive color - increases brain function when it is eaten at least once every six months. To reap the benefits, Dr. Andrew Weil suggests stirring a spoon in soups and stews.

6. Close your eyes

A study at the Harvard Medical School showed that 45 minutes of no-nap REM sleep, improve retention of information.

7. Skip tofu

Soy has its virtues, but to help the memory is not one of them, say researchers at the Universities of Loughborough and Oxford in England. A recent study concluded that anyone who ate two or more servings of soy products each day can reduce the memory function as much as 20 percent, particularly among vegetarians and elderly women.

8. Be a social butterfly

Say goodbye to Sudoku, hi to your friends. A study by the University of Michigan found that talking to someone else for 10 minutes increases your memory as much as doing a crossword.

9. Hartese blueberry

This popular fruit improves short-term memory better than other foods rich in antioxidants, such as kale, spinach and strawberries, according to scientists at Tufts University. Experts say that one cup a day is all you need to enhance the brain.

10. Get smart smell

Who knew that the candles with scents might help you learn French? "Our research shows that smelling a mixture of flower essences, increases the speed of learning by 17 percent," says neurologist Alan Hirsch of Chicago. Subjects in experiment smelled gardenia, lilac and pink, but almost any mixture will do. Except for the lavender, said Hirsch. On the contrary, the velocity decreases.

Tips From Diet And Weight Loss To stay thin and healthy

2009-02-24T00:07:00.001-08:00

We all want to stay thin and healthy, but because we make wrong choices of foods and eating habits is like a dream for most people. In this article you will find useful tips on diet and weight loss.

We should avoid cooking with coconut oil as their fat content is very high. Sunflower oil contains PUFA (pilo unsaturated fatty acids by its initials in English) but if consumed in large quantities can cause gallstones, this oil has some important advantages, it lowers cholesterol and protects the heart from a malaise. Olive oil also contains PUFA. Whatever oil you use to cook the amount consumed should not exceed 30/50 ml per day.

The baked goods are the favorite of many families, to enhance the freshness and crispness do hydrogenated vegetable oil is added in generous amounts to many baked goods. When vegetable oil is hydrogenated, harmful fats are formed, they are more dangerous than the fats in meat. The heart is affected by these fats. In addition to baked products using wheat is avoided and instead use refined wheat flour. The cheese used on pizza can also raise cholesterol providing a heart attack.

These baked products and high in sugar should be consumed in small quantities occasionally bite or a small piece.

A recent study shows that people who have arthritis and followed the Mediterranean diet were 39% less pain and weakness in her hands. Fruits, vegetables, olive oil, fish and chicken appear to have a beneficial effect on the inflammation of arthritis.
We all want to stay thin and healthy, but because we make wrong choices of foods and eating habits is like a dream for most people. In this article you will find useful tips on diet and weight loss.

We should avoid cooking with coconut oil as their fat content is very high. Sunflower oil contains PUFA (pilo unsaturated fatty acids by its initials in English) but if consumed in large quantities can cause gallstones, this oil has some important advantages, it lowers cholesterol and protects the heart from a malaise. Olive oil also contains PUFA. Whatever oil you use to cook the amount consumed should not exceed 30/50 ml per day.

The baked goods are the favorite of many families, to enhance the freshness and crispness do hydrogenated vegetable oil is added in generous amounts to many baked goods. When vegetable oil is hydrogenated, harmful fats are formed, they are more dangerous than the fats in meat. The heart is affected by these fats. In addition to baked products using wheat is avoided and instead use refined wheat flour. The cheese used on pizza can also raise cholesterol providing a heart attack.

These baked products and high in sugar should be consumed in small quantities occasionally bite or a small piece.

A recent study shows that people who have arthritis and followed the Mediterranean diet were 39% less pain and weakness in her hands. Fruits, vegetables, olive oil, fish and chicken appear to have a beneficial effect on the inflammation of arthritis.

Latest trends in hair color and styles

2009-02-21T06:35:00.000-08:00

It seems that the time has come to give freedom and movement to our heads.

Imposing a certain hair length, allowing in this way to play around with ways to create different effects.

Above all, it is to leave everything static, the natural look.

Far left and the stiff hair of other seasons, with strident colors, some marked differences between lengths and others.

What colors are trendy?

The tendency leads to more sober colors. The brown and black are the kings of the catwalk.

The hair is a continuation of our way of dressing and should be consistent.

This season sweep forms straight hair with a perfect cut, and very clean.

Volume, low, natural and very flat on the skull.

Hair floating freely to return to just fall into place.

Flequillos the big players are very thick on the rim.

Even those who have curly hair, use a more defined trends.

The nucas preferably naked necks clear, elegant and very favorable.

Where do we apply this fashion?

This applies to short hair, short hair and long hair, which will be collected for special occasions in Coletas slightly elevated to give prominence to the neck, very sexy.

Gone are the striped and zig-zag, stripes now imposing long, wide and very defined.

Gets the retro look of the forties, with all its glamor, big soft curls and waves that bring sensuality to the face.

There is no doubt that these trends are very feminine.

What details can I use?

Supplements are essential for our hair and tissues are strong allies on the head, thick or thin crowns, hairpins, especially strass and the most daring, hats in all versions ...

Anything goes as long as the result is harmonious and conducive.

MBA Admission - The TOEFL Test

2009-02-20T11:18:00.000-08:00

The way a candidate must go to the accreditation for a MBA student to obtain, especially for a study abroad is not easy and required some stamina and a very diligent preparation. A part of the international procedure, the so-called TOEFL dar.

This standardized and globally accepted test, the knowledge of the English language in identifying candidates whose mother tongue is not English. A very good knowledge of English in written and verbal for the study is a basic prerequisite. Thus, the candidates in this test, a certain minimum score to achieve in order to have a registration for the training to be able to get MBA. This is the test in this context not only of the universities and business schools usually require but also by all other involved regulatory authorities and bodies, such as when applying for a scholarship.

Filed be the test in Germany regularly for example in universities, institutes and some other facilities. As a general rule is to charge a fee to be paid. Not only for this reason it is advisable for students to prepare for the test carefully. Even if the test is already general knowledge of the English language with a good score is to exist, it is certainly a possibility of preparing to use. Here are various facilities offered preparatory courses, but is also available on the Internet is a good and sufficient preparation feasible.

The TOEFL test includes both a written part in which certain questions are answered in writing, as well as a concrete speech test in which the candidate's responses via a microphone einspricht. The recorded data will be stored and later evaluated.

How to read fast and well

2009-02-19T12:07:00.000-08:00

Read quickly and well is a real asset and professional staff. Did you know that it is possible to significantly improve your reading speed by using many methods and techniques, such as employment guidance (maps, fingers, pens ...) skimming, scanning and omissions ... and many others?

These techniques include:
- Challenging the myths we were taught when you learned to read, but which are no longer effective now that you've learned, such as the obligation to read every word, the prohibition of its use fingers or anything else for guidance, etc..

- Guides: the idea is to guide the eyes with something. This may be the fingers, a business card, a piece of paper, etc., allowing you to force your eyes to go where you want to go and the desired speed.

- Pay attention to your concentration, your environment and why you are reading. Simply ask yourself "What do I expect this book, what I intend to find? What will I do with this new knowledge?", You will already select and retain more Easily essential.

- Techniques to determine what not to read: skimming, scanning, and omissions.

These techniques can be learned in classes or in books, like "10 Days to Faster Reading" by Abby Marks Beale, a University Priceton.

But do you know your speed? You can determine the number of words per minute that you can play in passing this test of speed reading, which you also learn more about the subject.