Product Family:

Treasury / MoneyMarket/Placements

Product Requirements Requirements Clarifications General Characteristics Brief Description Placing of funds in

other banks (Interbank) & financial institutions in Bangladesh.

These will be done in LCY only. This may be done in FCY in future. Only treasury is handling the MM products

Volume of transactions per day/month

20 per day (money at call and term placement put together)

Basic Product Requirements

Tenor - normal contract periods

Fixed Maturity, Notice and Overnight call

overnight or call (maximum 1 month)

currently both call and overnight are booked on money at call. But in the new system we will be segegating in future.

call opiton from the contract date till to maturity. the principal and interest amont will change based on market condition. System will keep record everyday outstanding principal and rate for interest calculation and accrue

user will update /modify the interest and/or principal manually every day deal basis. If rate or principal changes message will be sent to counter party through email or swift.

Rollover requirements Applicable Overnight placement will be done for

currently interest is not

overnight at a specified rate (one day only). When rolled over, the rate of interest and principal amount will not change. If the rate or amount is changed, then the original placement will be liquidated and a new placement will be made. Interest will be accrued in such cases, of rollover of principal. Interest capitalisation will not take place.

capitalized but the option should be there

Interest Interest Rate Type: Fixed

Rate or Floating RateFixed rate. Rate will be fluctuating every day.

If Floating, tied to what type of rates (LIBOR etc)

DIBOR rates are also followed (Dhaka Interbank rates)

May be required in future

Interest Day Basis (360/360, etc) - give details by currency

360/360. Other Basis are required for future.

Interest Accrual Frequency - Daily/Monthly

Daily

Interest Capitalization Requirements, if any

No May be required in future

ui Any applicable tax on interest and how Tax is calculated?

No tax on income for call money. Presently it is 0%

May be required in future

Settlement Settlement of Foreign

Currency Deals?Are Standard Money receipt will be received from

Swift messages and online

Settlement Instructions (Routing, Nostro etc) available for Counterparties?

counterparty. No swift messages. FCY Deals are not done.

instruction to central bank for transfer of funds are required in future.

Settlement of Local Currency Deals via Central Bank

Yes. Central Bank acts as the settlement agent for different banks. Cheques are received from different banks and they are deposited with central bank account

Limit Type - Revolving/Non-

revolvingNon-Revolving and Revolving

Limit is restored to the extent principal is repaid.

Limit Product to be used MM Are sub products and limits

for sub products allowed? (X amount for Call and Y amount for Fixed Maturity etc)

Separate limits are set for overnight and term placements for different counterparties.

overall limit and within that separate limit for overnight and term placement

Financial Accounting GL/Chart of Account for

Outstanding Principal for Local and Foreign Currency deals

Dr. Money at Call (Overnight/call) Account Cr. Balance with Bangladesh Bank Account

GL Head : Money At call. The amount with individual banks are shown in subsidiary GL (as a report as well)

Money at call (overnight/call) dr.balance with Bangladesh Bank Cr.

GL/Chart of Account for Interest in Local and Foreign Currency deals

Interest Receivable : Dr. Adjusting Ac - Interest receivable on Money at call Cr. Income Account Interest Received on Money at call. When this amount

For Call - if principal is outstanding till to the end then monthly interest income will be accured-Dr. Adjusting acc. Interest on

for overnight - Bal. with Bangladesh bank dr.Interest on Mac

is realised from the other Bank, the following entries are passed: Dr. Balance with Bangladesh Bank Account Cr. Adjusting Ac - Interest receivable on Money at call.

call Cr. Interest income on Money At Call

When interest is received from the couterpartyBalance with Bangladesh Bank A/c drAdjusting A/c. interest on Mac cr

cr.

Account for Interest in Local and Foreign Currency deals

Routed through Bangladesh Bank Account

Any other (Taxes, Charges etc)

0% tax is applicable at present

Confirmations and Advices Confirmations required and

medium (Print/Swift - MTnnn) for Foreign Currency Deals

No foreign currency deals

in future may be requied

Advices (Debit/Credit) required and medium (Print/Swift) for Foreign Currency Deals

No foreign currency deals

Confirmations required and medium (Print/Swift - MTnnn) for Local Currency Deals

Confirmations are not sent. Only Money receipts are sent through person and on receipt of the same counterparty will handover cheques drawn on Central bank

Swift messages and online confirmation to counterparty for transfer of funds are currently on process,required in future.

Advices (Debit/Credit) required and medium (Print/Swift) for Local Currency Deals

No advices are sent at present.

Swift messages and online instruction to central bank for transfer of funds are required in future.

Brokers

Whether deals are done via brokers?

No Broker dealing at present

Brokerage Calculation Requirements

Brokerage Payment Requirements

Are Broker limits applicable and requirements

Other Requirements Charges or Commissions no Other Tax Requirements no Archival Requirements Data is to be

preserved for 5 years as per Central Bank guidelines

Dealer Limits Relation to other

LOBs/Business ProcessesProfitability of Bank Money market

deals are mainly done for maintaining the statutory liquidity with central bank. These are also used to increase profitability of the Bank.

Deal Slip Requirements Dealslip will be prepared in duplicate by the front office and one original will be sent to back office.

will be autmated / system generated

Process Requirements        

Business Process

Activities Accounting Entries

Deal Processing

Check position advised by Operations

Front office

Strike deal over the trading platform/phone/broker

Front office At present all the deals are strike with

different banks/leasing companies over phone and deal slip is prepared by the Front office

Input deals in system and check for any limit breaches

Front office

Authorise deal and print deal slip

Front office There will be four authorisation two at front office level and two at the back office level. Once authorisation is completed, money receipt will be prepared through the system captaring the information of system jenerated deal slip the back office

Send it TO Back Office Receive Deal Ticket from

Front Office through systemBack office

Call the deal from dealer's system and input settlement details. Also check the supporting conversations, broker note

No broker deals. All the deals are done with banks/lease companies as counterparty

Take up with higher level if

necessaryyes Online approval

process at any point of time

Authorise deal BO Debit( Money at call account Cr.

Bangladesh Bank Account (Balance with Bangladesh Bank account)

File the papers value date wise

BO

Deal Confirmation

Verify with counterparty's deal confirmation . Record confirmation.

BO

Exchange Deal confirmation with Counterparty

No Foreign currency deals

Follow-up Non-receipt of Deal Confirmation

Back Office

Match all inward confirmations with deal slips. If no deal slip available or any discrepency then inform dealer for action

No swift messages are now used.

Standard practice is the Money receipt which is now prepared manually.

Identify and resolve discrepancies in Deal Confirmation

BO

Deal Modification will be done by fornt office only after getting approval by back office.

Bo will forward the deal to FO.afFter modifiction deal will be again forwarded to BO

Deal Settlement

Make payments for placements on value date

BO

system will generate Bangladesh bank checque and deposit slip for each investment

On Maturity:Dr. Bangladesh Bank Account and Cr. Money at call account and Cr. Income

Dr. Bangladesh bank and cr. Interest on money at call. (when BB cheque is received). When cheque on some

Account - Interest Received on Money At call account

other bank , this will be sent to clearing through main branch and on realisation, they will raise IBCA on treasury. Treasury respond the same and credit to Interest on money at call.

other requirements

Reports and Enquiries As provided by the Bank