99th Banking Professional Exam: LPGB Short Notes

(a) Treasury Bond

Treasury Bonds are Long-term Investment instruments issued by the Government of Bangladesh through Bangladesh Bank. Mostly, the government collects funds through Treasury Bonds to finance development projects or cover annual operating expenses. The essential features of Treasury Bonds:

Treasury Bonds are a risk-free means of investment because the government is the issuer.
The Maturity Periods are: 2, 5, 10, 15, and 20 Years.
Minimum Investment in Treasury Bond is Tk. 100000.00.
Treasury Bond pays fixed percentage of Interest semi-annually. This Rate is also called the coupon interest rate.
Treasury bonds can be purchased from auction or the Secondary Market.
Treasury Bonds can be sold anytime in the secondary market, and the investor will not incur any loss for premature encashment, like Sanchoypatras.

(b) Dormant Account

A dormant account refers to an account that has shown no activity, such as deposits and withdrawals, for a long period of time. The main purpose of categorization of an account as a Dormant Account is to ascertain the safety & security of the account and also to avoid the risk of fraud in any account, record keeping, and periodic review of accounts.

As per Bangladesh Bank’s recent decision, Current, Savings, and Special Notice Deposit (SND) accounts would become inoperative if clients don’t carry out any transaction for six months in a row. Current and SND Accounts will be dormant six months after they become inoperative. Savings Accounts will be dormant after 18 months of becoming Inoperative.

The banks will inform individual and institutional account holders through SMS, email, or letter one month before making the account dormant.

Consequences of a Dormant Account

Cheque book will not be issued
The address cannot be changed
Cash withdrawal from an ATM or a branch is not allowed
Add or delete a joint holder in the account
No transaction through internet banking or phone banking
No renewal of ATM/ debit card
Get a user ID and password
Modification of signature
Cannot request to issue a cheque book

Procedure for reactivating a dormant account

To reactivate a dormant account (Current, Short Notice Deposit, and Savings), the customer has to submit a written application to the branch manager. The account holder should also submit the following documents/records to the Bank for verification.

Recent color passport-size photo – 2 copies
Copy of a valid photo ID document
Copy of valid address proof documents

If an account remains dormant for five years, clients will have to fill a new KYC (Know Your Customer) form to activate accounts.

(c) Garnishee Order

It is issued by a court in favor of the judgment creditors for a debt due from the judgment debtors (bank customer), upon a bank, to attach the money so owing for the purpose of satisfying the decree.

More precisely, when a debtor fails to repay his creditor, the creditor may apply to the court for the issue of a Garnishee Order on the banker of his debtor.

By Garnishee Order, the debtor’s account with the banker stands suspended, and the debtor (customer) will not be allowed to draw, though he has a credit balance. The creditor at whose request the order is issued is called ‘the judgment creditor’, the customer is called the judgment debtor, and the banker (debtor of the judgment debtor) is called the Garnishee.

Kinds of Garnishee Order

→ Order Nisi: Order Nisi is a preliminary order issued to the banker:

To stop the payment over the customer’s account.
To explain why the judgment debtor’s credit balance should not be used for payment of the judgment creditor, and
It is also a duty of the banker to inform his customer.

→ Order Absolute: It is a final order issued by the court to the banker to pay the amount in the judgment debtor’s account to the judgment creditor according to the direction given by the court.

(d) Security Features of a Note

Currency notes have various security features to prevent forgery, such as a watermark, security threads, micro-printing, latent image, and special ink. These features help people and banks identify genuine notes.

(e) Alternative Dispute Resolution (ADR)

ADR refers to methods of resolving disputes without going to court, such as arbitration, mediation, and negotiation. It is faster, less costly, and more flexible than formal court proceedings.

(f) Mobile Financial Services

Mobile Financial Services (MFS) allow financial transactions through mobile phones. Services include money transfer, bill payment, mobile recharge, and merchant payments. It is widely used for quick and convenient banking, especially in remote areas.