CAO Training Final- for gaining new1.pptx

Cao training

1. 5/10/2018 CBO - Customers' Account & Operation Technical Training 1

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3. 5/10/2018 CBO - Customers' Account & Operation Technichal Training 3 Your Name Educational status & Field of study Work experience, if any Your current work position & assignment place Your life/Career aspiration Your expectation from this Training

4. 5/10/2018 CBO - Customers' Account & Operation Technichal Training 4 Arrive on Time Switch-off/silent your Mobile phones Share You Practical Experience, Respect Others view Active participation Avoid interruption and side talks Any Other (from the participants)……

5. 5/10/2018 CBO - Customers' Account & Operation Technichal Training 5 Class managing team(Admin team) Time keeper Reviewing team (Every day morning) Energizer team

6. Quotes About training 5/10/2018 CBO - Customers' Account & Operation Technichal Training 6

7. Training 5/10/2018 CBO - Customers' Account & Operation Technichal Training 7 Training will neither make a fish fly nor a bird swim, But It certainly will help the fish to swim faster and the bird fly higher. “Remember, Training is not what is ultimately important… performance is.”

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9. Do you think you have the necessary operational /technical skill to serve the customer? If your answer is no, what operational/technical skill training do you need most? 5/10/2018 CBO - Customers' Account & Operation Technichal Training 9 Brainstorming

10. To let trainees know the CA&O process end- to -end; To improve performers’ skill in CA&O; To enhance customer satisfaction ; For efficiency and effectiveness in Operations Management P rocess; To minimize and eliminate operational errors ; To minimize and eliminate operational risks of the bank; To refresh knowledge of employee on customer service practices 5/10/2018 10 CBO - Customers' Account & Operation Technichal Training

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12. Bank is a lawful organization, which accepts deposits that can be withdrawn on demand. It also lends money to individuals and business houses that need it. The word “banking’’ has been defined as accepting deposits from the public for the purpose of lending and investing . 5/10/2018 CBO - Customers' Account & Operation Technichal Training 12

13. Primary and secondary functions of banks: I. Primary or principal functions are three types: Acceptance of Deposit Lending Investment II. Secondary or auxiliary functions are two types: Agency Services like collection and payment of checks, standing instruction, collecting Utility bills, Miscellaneous or General Services : safe custody, remittances, advisory roles, opening LCS’ other services like Debit card, credit card etc. 5/10/2018 CBO - Customers' Account & Operation Technichal Training 13

14. The introduction of modern banking in Ethiopia/Bank of Abyssinia was inaugurated in February 16, 1906 by the Emperor Minilik II. Bank of Abyssinia was legally replaced by Bank of Ethiopia shortly after Emperor Haile Selassie came to power in 1931. 5/10/2018 CBO - Customers' Account & Operation Technichal Training 14

15. During the invasion , the Italians established branches of their main Banks namely: Banka d’Italia , Banko di Roma, Banko di Napoli and Banka Nazionale del Lavoro and started operation in the main towns of Ethiopia. In 1941 another foreign bank, Barclays Bank , came to Ethiopia with the British troops and organized banking services in Addis Ababa, until its withdrawal in 1943. 5/10/2018 CBO - Customers' Account & Operation Technichal Training 15

16. In April 1943, the State Bank of Ethiopia commenced full operation and acted as the central Bank of Ethiopia and had a power to issue bank notes and coins as the agent of the Ministry of Finance. As per proclamation No.207/1955 of October 1963, Commercial Bank of Ethiopia took over the commercial banking activities of the former State Bank of Ethiopia ; The first privately owned bank, Addis Ababa Bank S.C . , was established on Ethiopians initiative and started operation in 1964 with a capital of 2 million. 5/10/2018 CBO - Customers' Account & Operation Technichal Training 16

17. Addis Ababa Bank S.C and Commercial Bank of Ethiopia were merged by proclamation No.184 of August 2, 1980 after the declaration of socialism in 1974. After the fall of socialism , the first privet bank was established in 1994(Awash International Bank S.C.) After 1994 different privet Banks were established. Currently there are about 16 privet Banks in Ethiopia . 5/10/2018 CBO - Customers' Account & Operation Technichal Training 17

18. Establishment of CBO CBO (S.C.) was registered commercially on October 29, 2004 in accordance with article 304 of Commercial Code of Ethiopia & in line with proclamation n o . 84/1994 with authorized capital of Birr 300 million . It started operation on 8 th  march 2005 , with paid up share capital of birr 112 million . 62.86 % of Ownership was occupied by Cooperatives while the remaining 37.14% was occupied by non-cooperatives. 5/10/2018 CBO - Customers' Account & Operation Technichal Training 18

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20. CORPORATE IDENTITY 5/10/2018 CBO - Customers' Account & Operation Technichal Training 20 Visual identity/symbolic part of the organization Includes: Name, logo, colour, typography & motto Name : Cooperative Bank of Oromia S.C. Logo : Colour : Cyan B lue- Primary colour : Black - Secondary colour : Orange- Accent colour

21. CORPORATE IDENTITY Typography (letter type) Arial : for Body text/notes Arial narrow : For footnotes and endnote Myriad Pro : For outdoor advertisement Bank Gothic: Second option for outdoor advert Nyala : for Amharic communications Tagline/Motto “ Committed to breakthrough!” Breakthrough… ‘ a highly significant or dramatic improvement in performance . 5/10/2018 CBO - Customers' Account & Operation Technichal Training 21

22. Mission, Vision & Values 5/10/2018 CBO - Customers' Account & Operation Technichal Training 22

23. “ We root our foundation in communities to provide banking solutions that create greater customer experience with emphasis to cooperatives and agro-based businesses through proper use of human resource and up-to-date technologies to maximize stakeholder s’ value.” 5/10/2018 CBO - Customers' Account & Operation Technichal Training 23

24. 5/10/2018 CBO - Customers' Account & Operation Technichal Training 24 “To be the leading private bank in Ethiopia by 2025. ”

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26. CORE VALUES Integriry – we value Qualifications of being honest, fair, disciplined and open. Having moral uprightness and doing what is right. Adherences to ethical standards Customer Satisfaction- we Strive to provide quality customer service/products. Respect clients, understand their needs and wants, and do the best to fulfill their request. Meet/exceed customer expectations . Learning Organization- we Facilitate learning and continuously transform ourselves. Learn from our experiences, Disseminate the knowledge throughout bank; Transform new knowledge into action, Encourage an ability to see the big picture; Build a common sense of purpose and commitment (shared vision); Are adaptable to change; 5/10/2018 CBO - Customers' Account & Operation Technical Training 26

27. Teamwork- we: Have a commitment to common vision -showing concern and support for each other . Are one team ─ where every person is a valued member, treated with respect. Work together for common purpose by sharing knowledge and common culture. Cost Consciousness- we: Are careful about spending. Encourage employees to be efficient and cost-effective approach in all aspects of operations. Concern for Community- We: Take commitment to support the communities Collaborate  with organs working for communities’ ends. Utilize socio-cultural attributes of the communities. 5/10/2018 CBO - Customers' Account & Operation Technichal Training 27 CORE VALUES

28. SALIENT (MOST IMPORTANT) FEATURES Broad ownership base and diversified ownership structure; First bank of its kind in the country; First private bank in the country established with big paid-up capital at the time; Social and Cultural values oriented services. 5/10/2018 CBO - Customers' Account & Operation Technichal Training 28 CBO PROFILE……….

29. Figures about CBO as of December 31,2017 Criteria /Descriptions Figures Remarks Total branch network 290 Additional 3 2 Sub- Branches T otal deposit position in birr 18.3 Billion conv. 17.2 billion & IFB 1.1 billion Br. Customer base 3.23 Million Conv. 2.8 million & 0. IFB Outstanding loan in birr 13 Billion ATM Card issued 112 thousand only 6,444 are active Agent recruited 3,183 Total Asset in birr Total capital in birr 1.1 billion NPL Status 4.94% Total staff strength(no. of staff) 3,296 5/10/2018 CBO - Customers' Account & Operation Technical Training 29

30. MAJOR STAKEHOLDERS OF CBO 5/10/2018 CBO - Customers' Account & Operation Technichal Training 30

31. Major strategic issues of CBO Major Strategic Issues Human resources Development & Mgt. Organizational Capital IS and Infrastructure Profit Maximization Financial Resources Mobilization Capital Growth Marketing and Relationship Mgt. Fixed Asset Acquisition (HO Building) Risk & Internal Control Systems Cost Management Process Efficiency & Effectiveness 5/10/2018 CBO - Customers' Account & Operation Technichal Training 31

32. CBO PROCESS STRUCTURE CBO broadly classify process in to two: CORE & SUPPORT 5/10/2018 CBO - Customers' Account & Operation Technichal Training 32

33. 33 GOVERNANCE STRUCTURE

34. OPERATIONS MGT. STRUCTURE 5/10/2018 34 CBO - Customers' Account & Operation Technichal Training

35. CBO CA&O DESIGN PRINCIPLES 5/10/2018 CBO - Customers' Account & Operation Technical Training 35

36. BRANCH STRUCTURE 5/10/2018 CBO - Customers' Account & Operation Technichal Training 36 DEPENDING ON BRANCH GRADE

37. DUTIES AND RESPONSIBILITIES OF CSO As a Maker: Attend customers at the counter properly and with due respect Identify customers (KYC); Process customers’ account opening and perform cross selling activities; Scan customers’ and authorized staffs’ signatures; 5/10/2018 CBO - Customers' Account & Operation Technichal Training 37

38. DUTIES AND RESPONSIBILITIES……… Receive cash from all types of transactions; Post all type of transactions ; Prepare cash and non-cash tickets/ instrument ; Process clearance of negotiable instruments; Pays cash to all types of transactions within his/her limit 5/10/2018 CBO - Customers' Account & Operation Technichal Training 38

39. DUTIES AND RESPONSIBILITIES……… As a Checker:   Ensure the correctness of account opening documents and opened accounts; Check and confirm scanned signatures ; Respond referral/authorize request for deposit and payment as per the limit; 5/10/2018 CBO - Customers' Account & Operation Technichal Training 39

40. Signs or countersigns on documents and all transaction tickets; Check blocking order, account closing, lost instruments report and registration of delinquent customers. 5/10/2018 CBO - Customers' Account & Operation Technichal Training 40 DUTIES AND RESPONSIBILITIES………

41. Adhere to branch cash control and security requirements in control of cash and negotiable instruments; Reconcile, settles suspense accounts and produce periodic report of accounts balance; Complete other related duties as assigned . 5/10/2018 CBO - Customers' Account & Operation Technichal Training 41 DUTIES AND RESPONSIBILITIES………

42. EXPECTED RESULT FROM MAKER/ CHECKER Delivery of efficient service as per the standard set ; Efficient and accurate handling operational duties; Proper utilization of resources ; Proper customer handling ; Communicating effectively to customer; Timely reporting to the concerned organ; Acting as per code of conducts of the Bank. 5/10/2018 CBO - Customers' Account & Operation Technichal Training 42

43. Tea break 5/10/2018 CBO - Customers' Account & Operation Technichal Training 43

44. TYPES OF CUSTOMERS AND ACCOUNTS 5/10/2018 44 CBO - Customers' Account & Operation Technichal Training

45. Objectives At the end of this section, trainees will able to ; Correctly identify the Classification of customers; Distinguish among the different types of customer accounts & products and their nature. 5/10/2018 45 CBO - Customers' Account & Operation Technichal Training

46. What dose customer mean to the Bank? What are the types of CBO’s Customer ? 5/10/2018 46 CBO - Customers' Account & Operation Technichal Training Brainstorming

47. Any legal entity with whom the bank agrees to conduct a business; CUSTOMER – is a purpose of the our business! It can be a: Deposit account holder, Borrower, Guarantor, Local /foreign transfer beneficiary, correspondent bank, and Prospect customers other user of any of the services provided by the bank. 5/10/2018 CBO - Customers' Account & Operation Technichal Training 47 Customer….

48. Customer Classification Currently the Bank classifies its customers based on: Economic ownership & Volume & value of transaction. Based on Economic ownership we classify in to five major categories. These are: Private & Individuals; Individuals: include any legal /natural person; Private Businesses: Sole Proprietorship, Partnership, Joint Venture , PLC, Share Companies & other similar entities; Other Private entities: embassies, international NGOs, funds collected from community donors, and other institutions which were not legally formed but facilitated by government bodies. Associations & cooperatives ; Cooperative Societies & unions Charities, Societies, Clubs and Associations 5/10/2018 48 CBO - Customers' Account & Operation Technical Training

49. C ustomers classification…… Public enterprises; Public enterprises established under Proclamation No. 25/1992 and share companies established by Government; All government owned enterprises like Ethiopian Airlines, Ethiopian Sugar Corporation, Ethiopian Electric Utility, Ethiopian Power Corporation, etc. Non-Bank Financial institutions ; Insurance companies &; Micro Finance institutions. Government organizations; Federal Government Entities & Regional Government Entities 5/10/2018 49 CBO - Customers' Account & Operation Technichal Training

50. C ustomers classification…… Based on volume & value of transaction we classify the Bank’s customer into two major parts. These are: Corporate customer : are customers having relatively higher value & volume of transaction. Retail customer: are customers relatively lower value & volume of transaction 5/10/2018 50 CBO - Customers' Account & Operation Technical Training

51. LUNCH TIME 5/10/2018 CBO - Customers' Account & Operation Technichal Training 51

52. 5/10/2018 CBO - Customers' Account & Operation Technichal Training 52 Brainstorming What Deposit Account Types or Products do you Know in CBO?

53. Types of Deposit Accounts M ajor types of local deposit product accounts are: Saving Account; Demand/Checking Account; Time Deposit Account; Other deposit accounts (such as IFB deposit products). 5/10/2018 53 CBO - Customers' Account & Operation Technichal Training

54. Saving Account Saving Account has several sub categories: Ordinary Saving Account Sinqe-Women’s Savings Account Youth Savings Account Gamme-Junior Account Special saving account Non-Interest Bearing Savings Account 5/10/2018 54 CBO - Customers' Account & Operation Technichal Training

55. A. Ordinary Saving Account Features: It is an Interest bearing (i.e. 7%) deposit account The minimum balance to open the account is Birr 50.00; It can be opened and maintained with zero balance for a month ; Within one months time, at least Birr 25.00 should be deposited. Otherwise, it should be closed . Ordinary Saving Account 5/10/2018 55 CBO - Customers' Account & Operation Technichal Training

56. O rdinary SA Features …… withdrawn by properly filling a withdrawal slip; It has a continuous nature; Operated by a passbook & an ATM-Card ; It can be opened and/or operated by a legal agent in the name of principal , against producing a power of attorney; No restrictions on the number and amount of deposit and withdrawal unless restricted by pertinent bodies; 5/10/2018 56 CBO - Customers' Account & Operation Technichal Training

57. Ordinary Saving Account - cont .… Advantages of ordinary saving deposit Encourages saving culture/habits of the society; Enables the depositor to earn income through interest ; Helps the depositor to make fund transfer; Paying through ATM/POS cards, internet & mobile and etc.; It provides immediate cash as and when required; It gives record of all transactions for the customer. 5/10/2018 57 CBO - Customers' Account & Operation Technichal Training

58. Sinqe Women’s Saving Account Sinqe Women’s Saving Account Features & Benefits Tailored for women aged 30 years and above; opened individually; Accompanied by separately branded debit cards ; Zero Minimum deposit requirements; enjoy higher interest rate ( 7.25%) . whose average six months’ deposit is Birr 30,000.00 and above will be entitled to Birr 100.00 incentive for up to 3 of their own children each for account opening, And those who do not have child/children or do not want to use above incentive package will be offered a coupon of Birr 150.00 It develops saving habits of women and the general public; Builds up future planning; Encourages finical independency for the women. 5/10/2018 58 CBO - Customers' Account & Operation Technical Training

59. Youth Savings Account Youth Savings Account Features & benefits It is an account for male and female youth in the age group 15-29 years; Zero minimum deposit requirements; It is accompanied by debit card; It has no transaction fee and free account maintenance ; Gain higher interest rate compared to ordinary saving account (7.175%) Develop saving habits of self employed teen-youth; It builds up future planning; It gives financial independency for the youth. 5/10/2018 59 CBO - Customers' Account & Operation Technichal Training

60. Gamme -Junior Account Feature & Advantages SA for children aged 0-15 years in the name of the child; Administered by parents/guardian until the child becomes able to do so; Opened and operated by the parents jointly, or by the parent or guardian, or solely by themselves (as the case may be ) ; Birth certificate or any evidentiary document issued by pertinent organ needed; If the parent/guardian becomes incapable to exercise their power of guardianship for various reasons, another guardian is appointed by the law; Payment is enabled to the junior when he/she attains the age of youth. Gamme -Junior Account 5/10/2018 60 CBO - Customers' Account & Operation Technichal Training

61. No minimum amount requirement to open the account ; No transaction and account maintenance fees; No debit card is issued on this account; W hen their average six-months deposit level reaches Birr 30,000.00 and above 100 Birr will be credited to their account; Gain higher interest rate (7.175%); Develop saving habits & build up future planning. Gamme -Junior Account……….. 5/10/2018 61 CBO - Customers' Account & Operation Technichal Training

62. Special Saving Account Features Interest bearing account operated by a cheque , Customers should be prominent/known to the branch or Follow KYC (know your customer) principle to open this account; Needs approval of VP – Operations Management to open the account Opened or operated by literate customers only; The customer should not be in delinquent list; No passbook is required for such accounts; Especially designed formats are filled by the customers to open the account; Special Saving Account 5/10/2018 62 CBO - Customers' Account & Operation Technichal Training

63. If it has no movement for twelve consecutive months shall be segregated and transferred to “Inactive Saving Account operated by Cheque” category regardless of their account balance; The account shall be reactivated after three consecutive withdrawal made within six months. Special Saving Account…………. 5/10/2018 63 CBO - Customers' Account & Operation Technichal Training

64. Tea break 5/10/2018 CBO - Customers' Account & Operation Technichal Training 64

65. Demand Deposit Account Demand Deposit Account consists: Ordinary Demand Deposit Accounts; ECX Related Demand Deposit Accounts; Special Demand Deposit Accounts. 5/10/2018 65 CBO - Customers' Account & Operation Technichal Training

66. Demand Deposit Accounts cont…. Ordinary Demand Deposit Account Basic features : It is current or checking account which is a non-interest bearing ; it is opened or operated by literate customers only; The minimum amount required by the bank to open for individual trader is birr 500.00 and for organizations/companies Birr 1,000.00 ; It requires KYC norms to be completed before opening; The account opening customer should not be in the blacklist; No restrictions on the number and amount of deposits & withdrawals; 5/10/2018 66 CBO - Customers' Account & Operation Technichal Training

67. Demand D eposit A ccount – cont... It can be opened and/or operated by a legal agent in the name of principal , against producing a power of attorney , which shall be attested by the bank’s legal service or area offices or branch managers, as the case may be; The bank shall issue account statement to the customer on monthly basis . 5/10/2018 67 CBO - Customers' Account & Operation Technichal Training

68. Advantages Ordinary Demand deposit account are: It facilitates/makes easy business transactions; It enables to carry out transactions properly and promptly; The account holders withdraw without any limit; It helps make a direct payment to their creditors by issuing checks; It enables the bank to collect money on behalf its customers; Customer’s account statement is monthly issued by the bank.; It enables to get OD facilities /after approval of credit request/by showing the credit worthiness information (swing and turn over); Multi-location fund transfers. Demand Deposit Account – Cont... 5/10/2018 68 CBO - Customers' Account & Operation Technichal Training

69. Demand Deposit Account – cont... Special Demand Deposit It is a checking account which bears interest less than the minimum interest rate of SA set by the NBE(determined by the bank); All its features & advantages are the same with ordinary demand deposit account except the above mentioned one; 5/10/2018 69 CBO - Customers' Account & Operation Technichal Training

70. Demand Deposit Account – cont... ECX R elated Accounts Special Pay-in or Pay-Out account for the members of the ECX to facilitate the trading of Commodity at ECX; opening request is lodged by the ECX through an account opening facilitation letter to the bank . ECX Related accounts are : Client pay in Client pay out Member pay in Member pay out 5/10/2018 70 CBO - Customers' Account & Operation Technichal Training

71. ECX Account types ECX Client Pay-in: An account maintained by members on behalf of their client. It serves as depository account, for which debit entries are possible only by instruction of ECX; ECX Client Pay-out: Account maintained by members on behalf of their client. The account ownership rests with the member account holder; ECX Member Pay-in Account : An account maintained by trading members of ECX, which serve as payment guarantee to the buyer and will eventually be used for payment against the sales agreement between buying and selling parties (Traders). Members only can deposit to this account; ECX Member Pay-Out Account: Account maintained by trading members of ECX, who trade in their own account. This account is used to receive payment from the trading and the member account holder has an exclusive right on the account (can withdraw and deposit funds); 5/10/2018 CBO - Customers' Account & Operation Technichal Training 71

72. O verdraft Account OD is a form of credit facility customer is able to draw an amount up to the approved limit . credit facility for the sole purpose of the day to day operational needs of a viable and ongoing business; It is opened after approval by the relevant credit committee at HO for disbursement . 5/10/2018 72 CBO - Customers' Account & Operation Technichal Training

73. Fixed Time Deposit Received for a fixed period of time with negotiable interest rate higher than the prevailing saving interest rate ; certificate of deposit(CD) is issued; Withdrawal is not allowed prior to the maturity date; withdrawn before due date forfeits the interest rate; Renewed for a further period by collecting old certificate; Interest is calculated only for the duration of the certificate, No interest will accrue after expiry; The minimum balance acceptable for FTD is birr 500,000.00 5/10/2018 73 CBO - Customers' Account & Operation Technichal Training

74. F ixed Time D eposit- cont … Advantages FTD It encourages saving habits for a longer period of time; Earning higher interest rate; On maturity the amount can be used for planned expenditure; The bank can use the fund for a longer period of time; The bank can also invest such funds in long term areas. 5/10/2018 74 CBO - Customers' Account & Operation Technichal Training

75. Special Types of Accounts Joint Accounts: for more than one persons to be operated jointly under "AND" or "AND/OR " remarks; Earmarked/flagged Accounts are opened for a particular purpose . Funds that are set aside for a specific project or event. Example: “club account”, “Project account” “Event account”, etc; Accounts for Interdicted Persons: ordered by court of law that the person is incapable of discharging his/her legal right. Operated by a guardian; Staff Accounts: accounts opened for CBO staffs Indemnity Accounts 5/10/2018 75 CBO - Customers' Account & Operation Technical Training

76. Foreign Currency Accounts Foreign-currency accounts are maintained by any of the following currencies: US Dollar Pound Sterling and Euro 5/10/2018 76 CBO - Customers' Account & Operation Technichal Training

77. Cont.….. Types of foreign currency account may include: Non-Resident Transferable FCY Accounts (NRT FCY) Maintained in foreign currency and Can be transferred abroad without obtaining foreign exchange permit; B. Non-Resident Transferable Birr Account (NRT) Account maintained in Birr Funds can be transferred abroad in foreign currency without the obtaining foreign exchange permit All sources deposits should be in foreign currency; Foreign Currency Accounts – Cont. .. 5/10/2018 77 CBO - Customers' Account & Operation Technichal Training

78. c. Non-Resident Non-Transferable Birr Account (NRNT ) Account opened to meet their local expenses; The account is designated as '' Non-Transferable Birr Account'' All sources for deposits should be in foreign currency; D . Foreign Exchange Retention Accounts: accounts opened for exporters and recipients of inward FCY remittance (Foreign Currency retention A&B accounts ) E. Foreign Currency accounts in the name of Ethiopian and foreign nationals of Ethiopian origin (Diaspora a/c ). Foreign Currency Accounts – Cont. .. 5/10/2018 78 CBO - Customers' Account & Operation Technichal Training

79. End of Day one 5/10/2018 CBO - Customers' Account & Operation Technichal Training 79

80. KYC, ILLEGIBILITY CRITERIA & DOCUMENT REQUIREMENTS 5/10/2018 80 CBO - Customers' Account & Operation Technichal Training

81. Objective At the end of this section, trainees will be able to : Know the purpose of KYC norms; Identify eligible entities who can open different types of accounts; Appropriately identify customers and distinguish the type of documents required for account opening; Understand the risk of not properly identifying their current and potential customers. 5/10/2018 81 CBO - Customers' Account & Operation Technichal Training

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83. Know your customer (KYC) Norms KYC aims to understand who your customer is; Involves in verifying, identifying & address of the customer by submitting documents that are accepted as relevant proof; Identifying the customer, whether regular or occasional, natural or legal person and verify the customer’s identity using (as much as possible) reliable, independent source of documents, data or information . 5/10/2018 83 CBO - Customers' Account & Operation Technichal Training

84. ILLEGIBILITY CRITERIA Before opening of account checking of the eligibility requirement is mandatory as per the pertinent governing procedures/directives; Checking of the genuineness of the customer checking in Blacklists should be done first when we opening of accounts operated by cheques. 5/10/2018 84 CBO - Customers' Account & Operation Technichal Training

85. ELIGIBLE ENTITIES TO OPEN ACCOUNTS Individuals; Cooperative societies & Unions; Associations, clubs & idirs; Sole proprietorship /individual traders; Joint ventures Minor & interdicted persons (through parents or Tutor) Private limited companies (PLC); Religious organizations ; Financial institutions; 5/10/2018 85 CBO - Customers' Account & Operation Technichal Training

86. Eligible - Cont… Partnerships/Share companies; Public Enterprises; Private schools, Colleges and Universities NGO’s (Local/Foreign); International/Foreign Organizations; Charities & Associations; Labor unions, Religious Organizations; Staffs & Any other legal entity that can produce a legal documents. 5/10/2018 86 CBO - Customers' Account & Operation Technichal Training

87. ELIGIBILE ENTITIES TO OPEN FCY ACCOUNT Embassies ; Foreign diplomats; International organizations; Expatriate employees of international organizations; Foreign based Charities; Foreign investors; Diasporas; Exporters; Recipients of inward remittances; and Other local/international companies with the approval of NBE. 5/10/2018 87 CBO - Customers' Account & Operation Technichal Training

88. DOCUMENT REQUIREMENTS FOR ACCOUNT OPENING Valid ID Cards Kebele ID ; Employment and pension ID; Schools, Colleges and Universities ID renewed Driving Licenses, valid passports, work or resident permits; Foreign nationals of Ethiopian origin identification cards. 5/10/2018 88 CBO - Customers' Account & Operation Technichal Training

89. Content of Valid ID s Acceptable ID cards consist of following information : Full name /Person’s name, Father’s and Grandfather’s name. Person’s Photo; ID number; Issue date/not expired; Issuer name and issuer’s stamp; Residential address of the ID card holder; Date and place of birth; Nationality; Occupation. 5/10/2018 89 CBO - Customers' Account & Operation Technichal Training

90. Documents Required For individuals Valid I.D card; Two recent passport size photographs for savings account; One passport size photograph and TIN for demand deposit account. 5/10/2018 90 CBO - Customers' Account & Operation Technichal Training

91. Documents Required - Cont… For individual Trader One valid and renewed I.D. card; Renewed trade license; One recent passport size photograph; Tax Identification Number(TIN ). 5/10/2018 91 CBO - Customers' Account & Operation Technichal Training

92. Documents Required - Cont… Private Limited Company(PLC ) Letter of request to open and operate the account; Renewed trade license in the name of the company; Memorandum and article of association; Valid and renewed I.D. card of the authorized person. Tax Identification Number (TIN). 5/10/2018 92 CBO - Customers' Account & Operation Technichal Training

93. Documents Required - Cont… Cooperative Societies Certificate of registration issued by the appropriate authority & Support letter from concerned govt. organ; Approved and registered cooperative’s rules and regulations; Minutes of members’ resolution at the latest general assembly; A letter of request by the chairperson to open and operate current account; Valid and renewed I.D. Card of the authorized person. 5/10/2018 93 CBO - Customers' Account & Operation Technichal Training

94. Documents Required - Cont… Partnership Renewed trade license and investment certificate in the name of the partnership. Partnership agreement Letter of request to open and operate the account Valid and renewed I.D. card of the authorized person to operate the account. Tax Identification Number (TIN). 5/10/2018 94 CBO - Customers' Account & Operation Technichal Training

95. Documents Required - Cont… Share Company Renewed trade license; Memorandum and article of association; Minutes of the board of directors with regard to the opening and operating of the account; Letter of request to open and operate the account, which shall be signed by the board chairman and bears the company’s seal; Valid and renewed I.D. cards of the authorized person to operate the account; Tax Identification Number (TIN). 5/10/2018 95 CBO - Customers' Account & Operation Technichal Training

96. Tea brake Day two morning 5/10/2018 CBO - Customers' Account & Operation Technichal Training 96

97. Documents Required - Cont… Colleges and Universities (Government Owned ) Letter of authority from Ministry of Education or from their respective university; OR Letter of authority from the respective university or from Regional Education Bureau as appropriate; OR If the institution is established by proclamation and announced through a ‘Negarit Gazeta’, account opening will be by the letter of request of the Institution ; Valid and renewed I.D. Card of the authorized person to operate the account. 5/10/2018 97 CBO - Customers' Account & Operation Technichal Training

98. Documents Required - Cont… Private Schools and Colleges For Private limited company, all the required documents stated under Private Limited Company(PLC); If the private school or college is established individually, all the required documents stated under individual trader person and school or college shall be opened; Valid and renewed I.D. card of the authorized person to operate the account. 5/10/2018 98 CBO - Customers' Account & Operation Technichal Training

99. Documents Required - Cont… Public Enterprises Public enterprises shall produce the “Negarit Gazetta” to attest their establishment; Letter of appointment of the General Manager by the Board of management; Letter of request to open and operate the account by the general manager; Valid and renewed I.D. card of authorized signatories. 5/10/2018 99 CBO - Customers' Account & Operation Technichal Training

100. Documents Required - Cont… Trade Union Certificate of registration from the concerned ministry or region bureau of labor and social affairs; Approved and registered rules and regulations of the trade union; Resolution of the general assembly appointing the executive committee of the trade union; Minutes of the executive committee; Letter of request by the chairperson to open and operate the account; Valid and renewed I.D. card of the authorized signatories . 5/10/2018 100 CBO - Customers' Account & Operation Technichal Training

101. Documents Required - Cont… Associations and Clubs Certificate of registration; Rules and regulations of the associations; Minutes of members’ resolution at the last general assembly appointing the executive committee; Minute of the executive committee and request letter by the chairperson to open and operate the account; Letter of request by the chairperson to open and operate the account; Valid and renewed I.D. card of the authorized signatories. 5/10/2018 101 CBO - Customers' Account & Operation Technichal Training

102. Documents Required - Cont… Religious Organizations and Others The Ethiopian Orthodox Tewahido Church Churches located in Addis Ababa, shall produce letter of authority either from the patriarch or general manager Addis Ababa Diocese secretariat; Churches located outside Addis Ababa shall produce letter of authority from the patriarch to open and operate the account; Valid and renewed I.D. card of the authorized signatories 5/10/2018 102 CBO - Customers' Account & Operation Technichal Training

103. Islamic Religious Institutions Obtain a letter of authority signed by the chairman of Ethiopian/regional Islamic Affairs supreme council ; Valid and renewed I.D. card of the authorized signatories. 5/10/2018 CBO - Customers' Account & Operation Technichal Training 103 Documents Required - Cont…

104. Documents Required - Cont… The Ethiopian Catholic Church A letter of authority from the secretary general of the Ethiopia catholic secretariat to open and operate bank account; Valid and renewed I.D. Card of the authorized signatories . The Ethiopian Evangelical Church Mekane Yesus A letter from the president of the Ethiopian Evangelical Church Mekane Eyesus Central O ffice to open and operate bank account; Valid and renewed I.D. Card of the authorized signatories. 5/10/2018 104 CBO - Customers' Account & Operation Technichal Training

105. Documents Required - Cont… Other Religious O rganizations Certificate of registration from the Ministry of Justice or Federal (Regional) court offices and operated by individuals delegated by the respective religious organizations’ local branch as indicated in their Memorandum and Articles of Association and supported by letter from their head office ; Valid and renewed I.D. cards of the authorized signatories are required . 5/10/2018 105 CBO - Customers' Account & Operation Technichal Training

106. Documents Required - Cont… Accounts for Minors/Gamme Junior Account Proper application of the guardian for the minor; Court decision for the appointment of the guardian for the minor if any; ‘Kebele’ I.D. card, Birth Certificate of the minor from concerned government organ or church or municipality or hospital, etc .; Proper address of the applicant/guardian. 5/10/2018 106 CBO - Customers' Account & Operation Technical Training

107. Documents Required - Cont… Accounts for Interdicted Persons The ruling by a court of law pertaining to the interdiction; An official letter from the court ordering appointment of a Tutor ; Two recent photograph of the parent/tutor and the interdicted person; Valid and renewed ID cards of the Tutor and the interdicted persons. 5/10/2018 107 CBO - Customers' Account & Operation Technichal Training

108. Documents Required - Cont… Account for a Firms under Liquidation The document containing a court’s ruling with regard to the company’s bankruptcy; The court’s decision pertaining to the liquidation of the bankrupt company; An appointment of the liquidator by the court and the legal power given to her or him for the purpose; and The ID cards of the authorized persons. 5/10/2018 108 CBO - Customers' Account & Operation Technichal Training

109. Documents Required - Cont… Account for Share companies under Formation A letter of authority from the licensing body should have to be presented; A valid and renewed ID card of the person authorized to operate the account . 5/10/2018 109 CBO - Customers' Account & Operation Technichal Training

110. Documents Required - Cont… Account for Firms under the Process of R egistration A letter of authority from the licensing body will have to be presented. A valid and renewed ID card of the person authorized to operate the account. However, the account will be blocked until they are presented the Investment license and Principal registration. If their request fails, the balance should be released up on presentation of a letter of consent from the licensing organ. 5/10/2018 110 CBO - Customers' Account & Operation Technichal Training

111. Documents required for FCY account Embassies Permit from the National Bank of Ethiopia – NBE; An application letter which states manner of operation signed by the head of the delegation (Ambassador ); Diplomatic ID-card or passport of A/c signatories. Diplomats Permit from the National Bank of Ethiopia – NBE; Application letter; Diplomatic ID-card or passport. 5/10/2018 111 CBO - Customers' Account & Operation Technichal Training

112. Doc. Req. for FCY acc. – cont… International O rganizations Permit from the National Bank of Ethiopia – NBE; Application letter; ID card or passport of account signatories . 5/10/2018 112 CBO - Customers' Account & Operation Technichal Training

113. Doc. Req. for FCY acc. – cont… Foreign Investors Permit from the National Bank of Ethiopia – NBE; Memorandum of Association (for companies ); Article of Association (for companies ); Registration certificate; A letter which states manner of operation and signed by the person for whom the mandate is given by article of association (for companies ); ID card or passport of account signatories. 5/10/2018 113 CBO - Customers' Account & Operation Technichal Training

114. Doc. Req. for FCY acc. – cont… Non Governmental Organizations (NGOs) Permit from the National Bank of Ethiopia – NBE; An application letter which states manner of operation from the head office/regional office of the organization; ID card or passport of account signatories. 5/10/2018 114 CBO - Customers' Account & Operation Technichal Training

115. Doc. Req. for FCY acc. – cont… Expatriate Staff of International O rganizations Permit from the National Bank of Ethiopia – NBE; Application letter; Valid and renewed I.D. card from employer organization, or deriving license, or passport or Trade license ; Letter from the employer which confirm that the earning is paid in foreign exchange . 5/10/2018 115 CBO - Customers' Account & Operation Technichal Training

116. Doc. Req. for FCY acc. – cont… Non-Resident C ompanies Permit from the National Bank of Ethiopia – NBE; Memorandum of association; Article of association; Registration certificate; A letter which states manner of operation and signed by the person for whom the mandate is given by article of association; ID card or passport of account signatories. 5/10/2018 116 CBO - Customers' Account & Operation Technichal Training

117. Doc. Req. for FCY acc. – cont… Non Resident Ethiopian and Foreign Nationals of Ethiopian Origin Application; Valid passport and/or identification card; Certificate of ownership entitlement for the organization and/or article and memorandum of association .; Application duly authenticated by the Ethiopian Embassies, correspondent banks or remittance service providers which proves their identities; Two or more eligible depositors may jointly open a single account; The foreign currency accounts are to be maintained in USD, EURO, & POUND STERLING only. 5/10/2018 117 CBO - Customers' Account & Operation Technichal Training

118. Doc. Req. for FCY acc. – cont… Exporters Application letter Trade license Recipients of Inward R emittances Application letter Valid and renewed I.D. card from employer organization, or deriving license, or passport or Trade license. Evidence which certifies that the applicant is a regular recipient of foreign exchange 5/10/2018 118 CBO - Customers' Account & Operation Technichal Training

119. Revision questions Identify and list the required documents to open an account for each customer type? Individual customers Cooperatives Idirs Partnership Private limited company Share companies Association and Clubs 5/10/2018 CBO - Customers' Account & Operation Technichal Training 119

120. Lunch day two 5/10/2018 CBO - Customers' Account & Operation Technichal Training 120

121. ACCOUNT OPENING & CUSTOMER CREATION 5/10/2018 121 CBO - Customers' Account & Operation Technichal Training

122. ACCOUNT OPENING & CUSTOMER CREATION Customer Creation/Account Opening : It is t he process of encoding customer record based on the details on the account opening application from; New customer ID can be created only if the customer has no account in any of the networked branches of the CBO; It involves contractual agreement made to make business dealing; It is a crucial stage where you cross selling/up-selling & make first impression. 5/10/2018 122 CBO - Customers' Account & Operation Technichal Training

123. ACCOUNT OPENING & CUSTOMER CREATION – Cont… C ustomer can present the account opening request: Through any of CBO Branches or, Customers’ Account Sub Process at the Head Office when: Opening of multiple /many/ accounts in different branches needed; The accounts to be opened is/are for special purposes, ECX Accounts and be operated by different signatories. 5/10/2018 123 CBO - Customers' Account & Operation Technichal Training

124. Duties and Responsibilities in the Account Opening P rocess CSO-Maker Attends customer at the counter, Interviews & cross sells the bank’s products; Receives the relevant documents from the customers; Ascertains/check in delinquent list/mal-operation list (lf the account is C/A or Special SA); Guide customers on how to fill the account opening application form ; Checks that the required documents are properly filled out and signed by the applicant; 5/10/2018 124 CBO - Customers' Account & Operation Technichal Training

125. Duties and Responsibilities – Cont… For blind or illiterate customers, use right hand thumb print, attests by “signed before me ” stamp; Educate the customer how to use the cheque & the responsibilities expected from him by referring NBE directives & regulations if the account to be opened is CA or Special SA; Fills the account number on the deposit slip, opening application form and cheque requisition slip; Introduces customer’s account to the computer system; Writes his/her name and signs on the application form; 5/10/2018 125 CBO - Customers' Account & Operation Technichal Training

126. Duties and Responsibilities – Cont… Collects the cash or instrument to be deposited; Puts stamp on the face of the deposit voucher and puts his/her initial ; Delivers the passbook, welcome note and receipt to the customer; Scan the customer’s signature and relevant particulars as soon as the customer leaves the branch; 5/10/2018 126 CBO - Customers' Account & Operation Technichal Training

127. Duties and Responsibilities – Cont… CSO-Checker Ensures the documents are properly filled and the presented documents are genuine. Ensures the customer is not in the mal operation list(for CA or Special SA); Types or write the necessary particulars on the passbook (for savings account ), Co-signs on all the account opening documents; sign & Puts crossing stamp on the affixed photo of the passbook (for savings account); Check and confirm scanned signatures 5/10/2018 127 CBO - Customers' Account & Operation Technichal Training

128. Duties and Responsibilities – Cont… SCSO - Accountant Processes cheque requisition as per the cheque processing and Handling Procedure; If the documents presented need further authentication, requests further authentication from concerned organs. 5/10/2018 128 CBO - Customers' Account & Operation Technichal Training

129. Duties and Responsibilities – Cont… Branch Controller Collects all the opening documents Post-checking opened account (done as per the procedure?); Checks mal operation list ; Performs the due-diligence (verifies address & validity of ID & license from the respective organs ); Signs on the documents for the correctness and accuracy; Opens new mandate file in the name of the account and; keep the application letter and relevant copy documents: 5/10/2018 129 CBO - Customers' Account & Operation Technichal Training

130. Opening of Fixed Time Deposit Account Whenever opening a Fixed Time Deposit account: T he customer will be interviewed by the Branch Manager or CSM; Interest rate negotiation discretion shall be: Up to Birr 10 million by Finance Process; 10 million – 100 million by VP - Finance and Trade Services with the input from ALCO; Above 100 million by the President with inputs from ALCO. Filling the fixed time application format and sign the agreement; collecting deposit amount & providing certificate of Deposit; Account opening procedure is followed account creation & posting. 5/10/2018 130 CBO - Customers' Account & Operation Technichal Training

131. Opening of ECX Account CASP is a single point of contact for ECX account opening; Member should not be in mal-operation/Delinquent list. Letter to open an account is forwarded by ECX to CASP which clearly indicates: ECX Member type ECX Bank account required (member, client pay-in, member client pay-out); Branch selected by the member CASP instructs the branch to open the ECX member type account; For pay-in account Member presents PA, giving the sole right of debiting the account by attaching ECX member certificate; 5/10/2018 131 CBO - Customers' Account & Operation Technichal Training

132. Opening of ECX – Cont… The opening branch shall immediately send two copies of signed (completed) PA, copy of trade license, article and memorandum of associations along with the account number opened; The original PA shall be delivered to the principal (ECX Member) upon its completion at the branch; The CASP communicate ECX the account opened. 5/10/2018 132 CBO - Customers' Account & Operation Technichal Training

133. Tea break Day two afternoon 5/10/2018 CBO - Customers' Account & Operation Technichal Training 133

134. Opening of Overdraft(OD) Account OD approval LAF; The necessary contract/agreement; Collateral registration; Opening the account as per approved Limit, interest , expiry date and etc.); At the end of every the month checks whether OD of credit balance is transferred to the liability account or not . The normal procedure of loan follow up should be made ; 5/10/2018 134 CBO - Customers' Account & Operation Technichal Training

135. Special Types of Accounts Opening Joint Accounts Customers sign jointly on the application form; The number of account holders should not be more than three ; Agreement's should be signed incase of ” and/or” account; Application form is marked as a “joint account,” or as an “and” account, or as an “and/or” account. 5/10/2018 135 CBO - Customers' Account & Operation Technichal Training

136. Special Types of Accounts Opening – Cont… Earmarked Account It is opened in the name of the account holder, followed by of other descriptions with double quotation “ ” . Example Gutu Tola ”SMART Cafe & Restaurant ” Beka Hundessa “Sunrise Supermarket” it should be having personal reference or connection  5/10/2018 CBO - Customers' Account & Operation Technichal Training 136

137. Special types of accounts opening – cont… Accounts for Interdicted P ersons Designated by a court of law as being incapable of discharging her/his legal rights, or be interdicted. The court normally appoints a guardian for the person. Opened and operated by the guardian appointed. Staff Accounts A staff can open both savings and current accounts A staff’s account should be treated like all other individual accounts. Indemnity account 5/10/2018 137 CBO - Customers' Account & Operation Technichal Training

138. NEGOTIABLE INSTRUMENTS 5/10/2018 138 CBO - Customers' Account & Operation Technichal Training

139. objectives At the end of this section, trainees will be able to: Understand the meaning of negotiable instruments; Identify the types of endorsement and their peculiar nature; Identify the valid and acceptable negotiable instruments presented either for payment or collection/clearance. 5/10/2018 139 CBO - Customers' Account & Operation Technichal Training

140. 5/10/2018 CBO - Customers' Account & Operation Technichal Training 140

141. Negotiable Instruments It is a document guaranteeing the payment of specific amount of money, either on demand, or as a set time, with payer named on the document. Cheques , CPOs, Promissory notes, bills of exchange, bank notes & drafts. A bankable negotiable instruments can be transferable(endorsable) N egotiable instruments mostly used in our country banking today are: Cheques , Bankers’ cheque /CPO & Drafts 5/10/2018 141 CBO - Customers' Account & Operation Technichal Training

142. Negotiable Instruments – Cont… Cheque It is an unconditional order in writing, signed by the drawer requiring the bank/drawee to pay on demand a sum of certain money to, or to the order of a specified person or to the bearer ; Parties involved in a cheque transaction are: Drawee - the bank Drawer - Account holder Payee - Beneficiary 5/10/2018 142 CBO - Customers' Account & Operation Technichal Training

143. Negotiable Instruments – Cont… A Cheque shall contain the following features : The name and logo/emblem of the issuing bank; The name of the issuing branch; The date on which the check was issued; The name and account number of the account holder; The amount of money shown in both words and figures; The check’s number; and The signature of the account holder. 5/10/2018 143 CBO - Customers' Account & Operation Technichal Training

144. Negotiable Instruments – Cont… Precautions to be taken by the customer: Keeping blank cheques in a safe place under lock & very neat(clean); Not twisting & wriggling; Writing cheques in ballpoint pen; Writing amounts in words and figures closer to the printing; Any alteration on the cheque should be confirmed by the full signature of the drawer; Signing & Writing every descriptions in the appropriate space provided; same calendar date of the language in which the cheque is written . 5/10/2018 144 CBO - Customers' Account & Operation Technichal Training

145. End of Day two 5/10/2018 CBO - Customers' Account & Operation Technichal Training 145

146. 5/10/2018 CBO - Customers' Account & Operation Technichal Training 146

147. Negotiable Instruments – Cont… Types of Cheque Endorsement “Self "endorsement :- this cheque is endorsed by the drawer; “Cash or Bearer”: this cheque is endorsed by the presenter; “Specified Person”:- this cheque is endorsed to a specified person(can be re-indorsed) . S pecified P erson followed by the word “only” or “ payee only ” C heque is issued in the name of any Organizations (Government or Private); will be paid by crediting the beneficiaries account . And if the organization do not have an account at the Bank, it will be paid to the person appointed by the organization with a letter signed & sealed. 5/10/2018 147 CBO - Customers' Account & Operation Technichal Training

148. Negotiable Instruments – Cont… cheque issued to a joint account /order of two individuals , payees are identified and are asked to endorse cheque(s) drawn in their favor ; cheque issued in the name of alternative individuals , may be drawn by any one of the individuals & if endorsed must be identified and be asked to endorse the cheque(s) drawn in their favor; Crossed Cheques are not at all paid in cash but they must be deposited in to the account of the payee; The Restricted Negotiability of a Cheque –the crossing may contains words like “Payable to account,”/“Account payee only,” which limits the cheque from further transferability. 5/10/2018 148 CBO - Customers' Account & Operation Technichal Training

149. Negotiable Instruments – Cont… Valid Reasons for Dishonoring /Returning of a Cheque are: When the balance is insufficient to meet the value of the cheque; When the account is closes before the cheque is presented When there is difference in signature of account holder; When there is cheques sent for clearance (deposit in transit). 5/10/2018 149 CBO - Customers' Account & Operation Technichal Training

150. Valid Reasons for Dishonoring /Returning of a Cheque ….. … When there is lodgment of stop payment; When cheque is post-dated or outdated/stale When there are discrepancy which creates suspicion as to the its genuineness; W here endorsement is not in order (Endorsement Irregular); When the account is blocked by legal representatives or hairs; 5/10/2018 150 CBO - Customers' Account & Operation Technichal Training

151. Valid Reasons for Dishonoring /Returning of a Cheque When an undated check is presented; In case a mutilated cheque is presented (torn into two or more pieces) and if the main contents of the cheque are illegible; In case of joint account signatories/corporate customers, in the absence of authorized signatures. 5/10/2018 151 CBO - Customers' Account & Operation Technichal Training

152. Tea break Day three Morning 5/10/2018 CBO - Customers' Account & Operation Technichal Training 152

153. 5/10/2018 CBO - Customers' Account & Operation Technichal Training 153 Brainstorming What is CPO?

154. Negotiable Instruments – Cont… Banker’s Cheque/Cashier’s P ayment O rder (CPO) It is a cheque guaranteed by a bank, drawn on the bank’s own funds and signed by the bank officers; It is treated as a guaranteed fund It is an endorsable payment instrument. 5/10/2018 154 CBO - Customers' Account & Operation Technichal Training

155. Stop Payment Order Is a request made by the customer to the bank not to pay a check; the account holder can only be enacted if the check or payment has not already been processed by the recipient ; The stop-payment amount will not be withdrawn until the account holder gives, in writing the cancellation; There must be sufficient fund in the account that covers the value of the check requested to stop payment; The stop payment order shall be cancelled upon the expiry date of the check or by the court order. 5/10/2018 155 CBO - Customers' Account & Operation Technichal Training

156. Stop Payment Order – Cont… It shall be released if the drawer fails to produce police evidence within 15 working days that show the cheque was lost or stolen; In overdraft account case, the amount of money on the check shall be kept by deducting from the limit of the over draft account; The necessary particulars needs to Incorporate into the system are: the check’s number, amount of money involved, date on which it was issued & name of the payee/beneficiary; The record will be kept until the account holder revokes the request. The branch controller handle & follows up the status of Stop payment order. 5/10/2018 156 CBO - Customers' Account & Operation Technichal Training

157. 5/10/2018 CBO - Customers' Account & Operation Technichal Training 157 Brainstorming What is Insufficient Fund/Balance?

158. Insufficient Cheques Cheque without the availability of sufficient fund/balance in the cheque account, It is a cheque without having balance of the amount written on the cheque . The bank dishonor such cheques ; 5/10/2018 158 CBO - Customers' Account & Operation Technichal Training

159. Insufficient Cheques – Cont… Subsequent actions taken by the Banks for NSF Cheques It is treated as per NBE Directive No. SBB/64/2016: First Instance Record the incident for the first time in the NSF Cheque Register ; Restrict all debit (outgoing) transactions against this account until the dishonored cheque is fully paid to the payee or equivalent amount is blocked pending the payment to the payee. 5/10/2018 159 CBO - Customers' Account & Operation Technichal Training

160. Insufficient Cheques – Cont… Second Instance(Second Time within 12 Consecutive Months) Return the cheque & provide NSF to the payee; Record the incident for the 2 nd time in the Register; Restrict all debit (outgoing) transactions against this account until all the cheques which have been dishonored are fully paid; Levy a fine of 3% of the amount appearing on the cheque dishonored for the second time but not exceeding Birr 25,000. 5/10/2018 160 CBO - Customers' Account & Operation Technichal Training

161. Insufficient Cheques – Cont… Third Instance (within 24 Consecutive Months) Return the cheque & provide NSF to the payee; Record the incident for the third time; Close the account, levy a fine of 5% of the amount appearing on the cheque dishonored for the third time but not exceeding Birr 50,000. Collect all unused cheque leaves & pads from the drawer & Report same to CASP to close such persons account in all CBO branches and report to NBE . 5/10/2018 161 CBO - Customers' Account & Operation Technichal Training

162. Insufficient Cheques – Cont… If two or more checks are presented on the same time action shall be taken accordingly with the sequential order of checks even if the reminder is not received by the customer .; The SCSO-Accounts is responsible to register on the system the returned check unpaid due to NSF. NB: Please, refer the whole NBE directive No. SBB/64/2016 for more information. 5/10/2018 162 CBO - Customers' Account & Operation Technichal Training

163. Lunch time Day three 5/10/2018 CBO - Customers' Account & Operation Technichal Training 163

164. COLLECTION 5/10/2018 164 CBO - Customers' Account & Operation Technichal Training

165. Objectives At the end of this section, trainees will be able to: Give a clear understanding on the process of cash deposit transaction; Identify the various ways of processing non cash related transactions; Give an introductory overview about the process of the existing cheque clearance system and the new Cheque Truncation System (CTS ). 5/10/2018 165 CBO - Customers' Account & Operation Technichal Training

166. 5/10/2018 CBO - Customers' Account & Operation Technichal Training 166

167. COLLECTION It is amount of fund deposited/received from the customer to credit any customer account or internal account in the form of: Cash Cheques Banker’s cheque/Cash P ayment Order(CPO) Draft, and Fund transfer . 5/10/2018 167 CBO - Customers' Account & Operation Technichal Training

168. C ollection - Cont … Important points in Collection of Cash for Deposit Filling cash deposit voucher with the relevant information Receiving the cash by denomination against the deposit slip along with passbook (if any); Checking all the necessary information including amount in words & figures. Counting the cash as per the denominations written on slip; Properly writing detail of the depositor in the Narration Space; Finally Crediting the customer’s account by debiting cash. 5/10/2018 168 CBO - Customers' Account & Operation Technichal Training

169. Collection - Cont… Authorization as per discretionary limit: Updating the Passbook balance if any; Handed over computer generated deposit slip to the customer & keeping bank voucher for balancing and recording; Hand over to the branch controller for further checking & filing of the voucher. 5/10/2018 169 CBO - Customers' Account & Operation Technichal Training

170. Collection - Cont… General Conditions for Money Transfers The bank accepts transfer request of customers either in cash or by instruction to debit customers ’ account; Transfer can be from account maintained in CBO to another account or to be paid in cash ; All Cheques/CPOs which are received for transfer of money to other account should beer crossing stamp. 5/10/2018 170 CBO - Customers' Account & Operation Technichal Training

171. Collection - Cont… Collection process of Cash for Local Money Transfer : The customer fills application form of local money transfer; C hecking and confirming the details in the application form. Beneficiary name; A mount to be sent; Remitter’s /sender/ name; Address of the beneficiary and remitter If the transfer is from account, the performer will debit customer account after verifying the account holder’s signature against the specimen signature . 5/10/2018 171 CBO - Customers' Account & Operation Technichal Training

172. Collection - Cont… If transferor is organization /firm , the application letter should be presented only by delegated person; Printing computer generated customer & bank advice, signs on the tickets, puts cash stamp after collecting the amount to be transferred including, bank charge and commissions; Hand over customer advice along with the secret code to the customer separately/Sending through SMS; Authorization of the transaction based on limit. 5/10/2018 172 CBO - Customers' Account & Operation Technichal Training

173. Collection - Cont… Account to Account Money Transfer process Using Cheque or Application Letter Writing the account number and name of the payee on the face of the check; OR presenting application letter requesting transfer of money by debiting C hecking proper presentation of the application; Writing transverse(cross) line across the face of the cheque ; Making the necessary verification & confirmation of the cheque or By the application letter debiting the account holders’ account & crediting the account to which the customer requested to transfer. Authorizes based on the limit set. 5/10/2018 173 CBO - Customers' Account & Operation Technichal Training

174. Collection - Cont… Collection process of CPO/Bankers’ cheque Receiving the money transfer application form from the customer; Checking every particulars therein ; Verifying the signature (if the customer is account holder ); Incorporate/insert the details into the system; Receives cash/debit customer’s account including the commission; Forwards the application letter to the CSO-checker; Receives the Bankers’ cheque/CPO from the CSO-checker, Prints the draft / CPO after confirming that the cash has been received or the appropriate account has been debited; Co-signs on the prepared Bankers’ cheque/CPO, Makes the remitter sign at the back of the file copy and; Provides the instrument to the customer. 5/10/2018 174 CBO - Customers' Account & Operation Technichal Training

175. Collection - Cont… Cash Collection on Sales of Foreign Cash C urrency A ctivities performed in branches are:- Receiving travel documents (passport and air ticket) and authenticating the letter of application; Collecting the local currency equivalent in cash or debiting from the customer’s account; Paying the customer with foreign currency notes; Writing the amount sold and the air ticket number on the pass port and put the bank stamp; 5/10/2018 175 CBO - Customers' Account & Operation Technichal Training

176. Collection - Cont… Collection of Negotiable Instruments for Deposit Other local banks cheque customers’, payment is facilitated through clearance system; We use payment and settlement accounts maintained at NBE; CBO keeps mirror/replica/ accounts in its payment and settlement account at NBE for proper recording and control. 5/10/2018 176 CBO - Customers' Account & Operation Technichal Training

177. Collection - Cont… On us cheque to be Deposited to other Customer Account: Collect the check from the depositor (no need to fill cheque deposit slip); Check the proper presentation, authenticity and completeness Verifying the drawer signature , Posting both the debit and credit entries, Authorization based on the limit; Print the credit advise and hands over to the customer; Forwards to the Branch Controller after balancing them. 5/10/2018 177 CBO - Customers' Account & Operation Technichal Training

178. Cheque Clearing System It is the process of moving a cheque from one bank to the other bank for clearing; It results in a credit to the account at the bank of deposit, and an equivalent debit to the account at the bank on which it was drawn . There are Two Common Cheque Clearing Approaches 1. Document based approach - The presenting bank collects the cheque and send the physical cheque to drawee bank through the clearing bank/ institution; Paper to Follow – more advanced type of document based approach, sending an image and data through electronic media in addition to physical cheques. N.B. this approach Currently applied by Ethiopian Banks 5/10/2018 178 CBO - Customers' Account & Operation Technical Training

179. Branch receive from customer other bank cheque and CPO Branch dispatch cheque &CPO along with claim ticket to Finance process after scanning Finance process ATS team send the physical instruments to other banks Other banks return/reject the CPO and check specifying the reasons Finance Process return the CPO and check to the branch by deducting it from OBC ticket /claim Branch forward the return cheque to customer after collecting the deposit receipt from the customer (Customer signature may be required) Other bank debit customer or its CPO Account Respective bank P&S account will be debited with credit of CBO P&S Branch Debit H.O account and credit customer account Finance process Debit P&S mirror account and Credit respective branch account Checks/CPO returned/ rejected Checks/ CPO accepted 5/10/2018 CBO - Customers' Account & Operation Technical Training 179 PAPER TO FOLLOW APPROACH PAPER TO FOLLOW APPROACH PROCESS FLOW

180. Tea break afternoon Day three Afternoon 5/10/2018 CBO - Customers' Account & Operation Technichal Training 180

181. 5/10/2018 CBO - Customers' Account & Operation Technichal Training 181 Brainstorming What do you know about Cheque Truncation System?

182. Cheque Clearing System – Cont… 2.Cheque Truncation System It is a settlement or clearing of transactions on the basis of images and electronic data without the physical movement (without Paper to follow) of the instruments. It stops the process of moving physical cheques ; 5/10/2018 182 CBO - Customers' Account & Operation Technichal Training

183. Cheque Clearing System – Cont… CTS… CTS allows Banks to truncate cheques at the “ point of capture” by “ paying bank” electronically and process return cheque electronically; The presenting bank is responsible for ensuring the genuineness of the cheque and retain the physical cheque ; The issuing banks have the right to request the presenting bank and access the physical cheque retained at the presenting bank 5/10/2018 183 CBO - Customers' Account & Operation Technichal Training

184. Branch receive from customer ,other bank Cheques Branch Scan the checks and Send the image to drawee Bank through Clearing bank Drawee Bank check the image and appropriate action Pay or reject the transaction If accepted by the specified clearing time Customer’s Account will be credited If rejected ,the check returned for the customer Payment & Settlement(P&S) acc.of Drawee dr. and P&S of presenting bank CR. CHEQUE TRUNCATION SYSTEM 5/10/2018 CBE-CATS TRAINING 184

185. 5/10/2018 CBO - Customers' Account & Operation Technichal Training 185 CHEQUE TRUNCATION SYSTEM

186. Benefits of CTS Quicker clearance, Eliminates fear of loss of cheques Protect from cheque fraud Cheque clearing on the scanned image Presenting Bank store the Physical Cheques 5/10/2018 186 CBO - Customers' Account & Operation Technical Training

187. New Cheque Development in Ethiopia There would be two types of Ethiopian Cheques: Business Cheques ( Include Banker’s Cheque /CPO): issued to customers having demand accounts(checking accounts). Personal Cheques : which will be issued to customers having special saving account. 5/10/2018 187 CBO - Customers' Account & Operation Technical Training

188. Collection of Negotiable Instruments for Deposit Paper to follow Approach/Document based approach (existing procedure ) O ther bank cheque and CPO presented to branch; Branch scans & send physically to H/Office Finance Process for further clearing process; Finance process checks every particulars & sends the physical instruments to other banks. (Exchange at NBE Payment & settlement) 5/10/2018 188 CBO - Customers' Account & Operation Technical Training

189. Collection of Negotiable – Cont… If Returned/Rejected Other banks specify the reasons for rejection; Finance Process return to the branch by deducting it from claim; Branch return to the customer after collecting the deposit receipt. If it is Accepted by Other Bank CBO Payment & Settlement Account maintained at NBE will be credited by affecting other bank. Finance Process Debits Payment & Settlement mirror account and Credit respective branch account ; Branch Debits H.O account and credit customer account. 5/10/2018 189 CBO - Customers' Account & Operation Technichal Training

190. Collection of Negotiable – Cont… Special clearance Amount above birr 200,000.00 should not take more than 6 working hours. The status of the cheque should be followed by respective customer account; Any delay should be sort out by communicating the respective other bank; All the work process must be altered accordingly . 5/10/2018 190 CBO - Customers' Account & Operation Technichal Training

191. End of Day three 5/10/2018 CBO - Customers' Account & Operation Technichal Training 191

192. PAYMENT 5/10/2018 192 CBO - Customers' Account & Operation Technichal Training

193. OBJECTIVES At the end of this section, trainees will be able to: Identify different types of payment instruments; Understand the process and precaution when payment is effected from Saving or Current account and via Local Money Transfer; Differentiate the different money transfer agents working with the bank and procedure in effecting payment; Understand the feature of CPO/Bankers’ cheque and handling of lost instruments . 5/10/2018 193 CBO - Customers' Account & Operation Technichal Training

194. 5/10/2018 CBO - Customers' Account & Operation Technichal Training 194

195. Payment Payment can be defined as the action/process of paying someone something. It can be effected by means of: Cheques Bankers’ cheque (CPO) Demand Draft Withdrawal voucher (for saving account) Fund transfer Money Transfer(local& foreign remittance). 5/10/2018 195 CBO - Customers' Account & Operation Technichal Training

196. Payment of Local Cheques CSO-Maker(Focus points) collecting ID if the payee/beneficiary is other account holder; Checking genuineness and completeness of the cheque ; Identifying/ verifying the customer signature; Posting transaction after checking the balance; Effecting Payment ; Putting stamp and initials; Authorization within discretionary limit; 5/10/2018 196 CBO - Customers' Account & Operation Technichal Training

197. Payment of Local Cheques – Cont… Checker/CSM/ Checking the correctness and completeness; Authorizes based on the authorization limit assigned for. Branch controller Checking the proper payment & completeness of the transaction and retain the physical document. 5/10/2018 197 CBO - Customers' Account & Operation Technichal Training

198. P ayment through Incoming Clearance of Cheques /CPO s for City Branches O ther bank presents scanned cheques copy on the EATS and Physical cheque ; Finance Process dispatches in scanned copy on the EATS and Physical cheque ; The branch Receives after checking against the summary report; Branches rejects checks for any major irregularity within the specified time on EATS. 5/10/2018 198 CBO - Customers' Account & Operation Technichal Training

199. Payment through Incoming Clearance – Cont… Checks the genuineness and completeness of the cheques ; Rejects on the system for returned cheques by specifying the reason: The authorized staff approves the returned cheques on the system; Preparing returned cheques summary report and dispatch to Finance Process. 5/10/2018 199 CBO - Customers' Account & Operation Technical Training

200. P ayment through S pecial C learance for City Branches MT103 SWIFT messages are used to effect payments from one Bank to another Bank customer. The message includes only customer to customer transfers . The Bank affects payments presented through special cheque clearance with value greater than Birr 200,000.00 .( RTGS) 5/10/2018 200 CBO - Customers' Account & Operation Technichal Training

201. Payment through Special Clearance for – Cont… Focus points on MT-103 Special clearance Verifying the other banks signature signed Authenticate the cheques presented and post the cheques in “Input MT103 Outward Remittances - Cheques “ menu; Making sure about the inputted transaction details, holding it in order to check for the 2 nd time then “commit”; Writing ‘posted’ on the face of the check and singing on it, Sign on attachment by writing the time received; The checker co-sign and/or authorization. 5/10/2018 201 CBO - Customers' Account & Operation Technichal Training

202. Withdrawal from Savings Account CSO- Maker Focus points C hecking withdrawal voucher is properly filled and signed ; If the customer is blind : Presence of two witnesses one from the Bank and other from the customer’s side is needed; The witness shall sign on the withdrawal voucher for confirming the transaction. 5/10/2018 202 CBO - Customers' Account & Operation Technichal Training

203. Withdrawal from Savings Account - Cont… If the customer is illiterate make sign by right hand thumb print & attest by "signed before me” and initials on it; Checking the name and account number written are identical; Identifying the customer and verifying the signature; Posting the transaction and paying the amount; Authorization based on the limit; Putting the “Cash paying stamp” and Initials; Delivers the passbook & cash to the customer; 5/10/2018 203 CBO - Customers' Account & Operation Technichal Training

204. Payment Against L ocal Money Transfer Front maker focus points Receiving code(secrete) No. along with ID from beneficiary; Making the necessary confirmation & identification; Passing transaction entry Authorization based on limit; Generating payment ticket ; Identifying the customer and the customer signs on it; Effecting payment. 5/10/2018 204 CBO - Customers' Account & Operation Technichal Training

205. Payment Against Local Money Transfer – Cont... For lost or totally forgotten security number, no payment shall be effected immediately. But processed as per the operation procedure. 5/10/2018 205 CBO - Customers' Account & Operation Technichal Training

206. 5/10/2018 CBO - Customers' Account & Operation Technichal Training 206 Brainstorming Mention Money Transfer Organizations (MTOs) Currently W orking with CBO with their Code Digit?

207. PAYMENT AGAINST FOREIGN MONEY TRANSFER Money Transfer Organizations (MTOs ) currently working with CBO are: Western Union, Money Gram, Express money, Dehabshill , Kaah Express, OSOB, BAKAAL, Asgori, Trans Fast, Juba express, Ria, Amana express, Taran express, Amal express, IRMAAN & Send wave. 5/10/2018 207 CBO - Customers' Account & Operation Technichal Training

208. Money transfer agents – Cont... Major money transfer agents with their Code Digit numbers; s.no. Money transfer agents Code 1 Western Union 10 2 Express money 16 3 Money Gram 8 4 Dehabshill 10 (First three letters & 7 digit n o s.) 5 KAAH 10 (First three letters & 7 digit n o s.) 6 Trans Fast 13 (33TF/AM1122334) 7 Asgori 11(first ASG & 8 digit no.s) 5/10/2018 208 CBO - Customers' Account & Operation Technichal Training

209. Bankers’ C heque/CPO P ayment CPO Payment Properly examining the authenticity and the proper presentation of the instrument; Payees’ endorsement before payment is made; Properly verifying, identifying and retention of ID card copy; Expired CPOs should be authorized by authorized person before its payments . 5/10/2018 209 CBO - Customers' Account & Operation Technichal Training

210. Bankers’ Cheque/CPO Payment – Cont. CSO- Maker focus point Checking its proper endorsement Identifying the payee properly; Signature verification; Obtaining confirmation for offsetting tracer; Posting entry; Effecting payment; Authorization based on limit and; Putting “paying stamp” and initials. 5/10/2018 210 CBO - Customers' Account & Operation Technichal Training

211. Payment of Lost CPO/Bankers’ Cheque In the reported loss of CPO; Branch circularizes the loss of the instrument through CASP to all branches ; C ustomer presents an undertaking letter to re-fund of the proceeds for any causality; If it is an organization it should be sealed & signed. If the beneficiary and remitter are different persons or organizations, present the other party’s consent in writing its objections; Approval of the payment of limit should as per the described in the Bank’s CA&O manual. 5/10/2018 211 CBO - Customers' Account & Operation Technichal Training

212. Tea break Day four morning 5/10/2018 CBO - Customers' Account & Operation Technichal Training 212

213. Other Issues in Account M anagement Outline Treatment of inactive accounts Account closure procedures Stock and negotiable instrument handling Standing instruction handling Bank statement Blocked account and blocked amount Change of signature 5/10/2018 213 CBO - Customers' Account & Operation Technichal Training

214. 5/10/2018 CBO - Customers' Account & Operation Technichal Training 214 Brainstorming What are Inactive Accounts?

215. Treatment of I nactive Accounts Inactive accounts Dormant account for a period of 6 consecutive months regardless of their amount with no movement . C an be reactivated by showing a minimum of 3 transactions within three months other than interest related transactions; Inactive CA with a balance of less than Birr 100 are subject to service charges; Inactive SA for more than two years with a balance of less than Birr 50 must be closed by transferring the balance to other income sundries; Authorization is requested for deposit to/withdrawal from inactive accounts. 5/10/2018 215 CBO - Customers' Account & Operation Technichal Training

216. Account Closure Reasons for Closure of Accounts may be: Customer’s request; Loss of passbook/check; Court order; Death , bankruptcy and insanity of the account holder; After consecutive deduction of service charges for inactive current account; Due to mal –operation (for current accounts); Failure to maintain the m inimum balance on SA opened with zero balance within one month. 5/10/2018 216 CBO - Customers' Account & Operation Technichal Training

217. Account Closure – Cont.… During account closing : The Branch must interview the customer; Feed back is very important to take corrective measures; If closure is inevitable : Collect Pass book or unused checque; If it is lose of passbook collect declaration form and evidence; Check there is no wrong debit or credit; Collect service charge, if any; Initiate the closing process, effect payment or transfer balance and F orward the passbook/unused check to CSM for proper authorization and to senior branch controller for proper documentations; 5/10/2018 217 CBO - Customers' Account & Operation Technichal Training

218. Custody and Handling of Negotiable Instruments and Passbooks Stocks are kept under the custody of SCSO-Accountant/CSM/Branch Managers; All negotiable instruments and passbooks must have register books; Cheque book is issued in the name of customer up on customer request by the SCSO- Accounts after it is personalized & prepared signing on check book delivery register book. Passbooks are delivered to back office checker after checking proper utilization of previous issued passbooks; CPO/Bankers’ cheque is issued as requested by a customer. 5/10/2018 218 CBO - Customers' Account & Operation Technichal Training

219. Standing Instruction All standing instruction must be given in writing and be signed or be authorized by the customer who gives the instruction; It should be handled by branch SCSO-Accountant/CSM; Once it has been received from the customer it will remain valid for un indefinite period of time unless the customer cancels the instruction; It should be attached to the customer’s account file. 5/10/2018 219 CBO - Customers' Account & Operation Technichal Training Standing instruction !

220. Bank Statement C ustomer statement is issued to the customer by Branch Controllers; Can be collected physically or print their own statement through confirmed online (internet banking) system; Should be collected within one month by the end of every month without any charge; O therwise they shall pay per page as per the terms and tariffs set by the bank. 5/10/2018 220 CBO - Customers' Account & Operation Technichal Training

221. Blocked Account and Blocked Amount Blocked Account : An account subject to any transaction restricted either by account holder or third party (court , ERCA, Anti corruption office, etc). It may restrict debit from/ credit to the account; Blocked/Frozen Amount: cash or customer account of which withdrawal restriction is imposed. To waive, either the customer or third party consent must be lodged in writing to authenticate the release document; Branch Manager/CSM/SCSO - Accountant should handle those account to freeze/unfreeze as per the instruction given. 5/10/2018 221 CBO - Customers' Account & Operation Technichal Training

222. Change of Signature/Signatories Reasons for change of signature : When there is a difference between current and previous signature; When an illiterate account holder becomes literate; There may for another various reasons of their own; Request should be lodged by the customer in written application; Frequent change of signature should be discouraged . 5/10/2018 222 CBO - Customers' Account & Operation Technichal Training

223. Lunch time Day four 5/10/2018 CBO - Customers' Account & Operation Technichal Training 223

224. CASH MANAGEMENT 5/10/2018 224 CBO - Customers' Account & Operation Technichal Training

225. Objectives At the end of this section, trainees should be able to: Recognize important precaution in daily cash management; Know the detail process in opening of daily cash operation; Understand the procedure in handling cash during the day; Appropriately close daily cash operations. 5/10/2018 225 CBO - Customers' Account & Operation Technichal Training

226. 5/10/2018 CBO - Customers' Account & Operation Technichal Training 226 Brainstorming What are the Precautions to be Taken during Cash Management?

227. Responsibilities & Precautions to be Taken Always be accurate, focused & attentive(alert) in keeping and controlling cash: example ; side talking, using mobile phone, earphone and other similar devises are interruptive. Keep adequate cash to meet immediate requirement; Ensure cash limits are always kept at a minimum; Aware of forged/counterfeit notes & detection methods; Close blank spaces before and after on vouchers; 5/10/2018 227 CBO - Customers' Account & Operation Technical Training

228. Responsibilities & Precautions to be Taken – Cont… Register any cash shortage and excess in cash register book ; Evidencing Handing and taking over of cash by authorization & or signature; Avoid buildup of surplus cash(both in counter & sorting table); Avoid keeping cash at counters; Keep cash locked in drawers on occasion to leave the area. keep all the keys with oneself; 5/10/2018 228 CBO - Customers' Account & Operation Technichal Training

229. Cash management Before posting make sure the value and appropriate account has been posted; Recording cash denominations paid/received; Reminding customers to check/count before leaving the counter; Stick to the customer’s first preference in providing denominations(don't entertain the cash denominations change after making payment), N.B. Please, refer to the concentration & security procedure for cash operation in CA&O manual of the Bank for additional information. Responsibilities & Precautions to be Taken – Cont … 5/10/2018 229 CBO - Customers' Account & Operation Technichal Training

230. Opening of Daily C ash O peration At the start of the daily operation: The CSO collects the cash box from the vault ; Opens the cash box in front of the SCSO-Cash to confirm the existence of petty cash (the cash leftover in the box from the previous day), together with the personal cash brand/stamp. Consequently the CSO takes the cash box to its cage, Opens the computer and verifies the amount of the petty cash transferred through the computer against the previous day’s record & Confirms the receipt of the amount by Authorize till transfer; 5/10/2018 230 CBO - Customers' Account & Operation Technical Training

231. During the Day’s C ash Operation Request for Additional Cash by CSO-Maker Based on the cash holding limit during day operation, Front Makers requests the amount and denominations needed; Collects the money after counting and ascertaining its correctness; Confirm the receipt of the money by Authorization on the system. Transfer of Excess Cash by CSO-Maker to SCSO-Cash After balancing & Sorting the cash in bundle & based on denominations; Transfer till & surrender the amount to the SCSO-Cash according to the denominations(Till to Till transfer); The SCSO-Cash authorizes on the system the receipt of the money. 5/10/2018 231 CBO - Customers' Account & Operation Technical Training

232. Closing of Daily C ash O perations Day End Closing by CSO-Maker Amalgamates the cash on hand in bundles & Loose notes according to the denomination &; Balances the overall cash :   Petty Cash (beginning) + cash received from customers + cash received from the table – cash paid to customer – cash sent to the table = cash on hand Transfers the remaining deposit and payment vouchers at hand to the branch controller attaching the batch total. 5/10/2018 232 CBO - Customers' Account & Operation Technichal Training

233. Closing of Daily Cash Operations – Cont… Day End Closing by SCSO-Cashier Accepting cash from the CSO-Maker at the table after checking; Confirming the receipt of the amount by authorization of till transfer; Balancing the total cash transaction against the CSOs balance; Writing the daily debit and credit balances on the cash book; C o-sign cash book with cash supervisor (CSM/Branch manager); Transferring cash lodgment to vault along with the petty cash box jointly with the Branch Manager CSM. 5/10/2018 233 CBO - Customers' Account & Operation Technichal Training

234. Closing of Daily Cash Operations – Cont… A cash discrepancy S hortage or excess involving Birr 1000.00 and less shall be recorded in the cash discrepancy register book and be reported to the Branch Manager ; The branch manager & controller should report to respective district & concerned H/Office organs. The discrepancy should be dealt & ascertained as per the procedure. 5/10/2018 234 CBO - Customers' Account & Operation Technichal Training

235. Keys Management Custody of keys All the Bank’s keys should be registered in the key Register book & signed by all handling personnel; Transfer of keys needs to be duly recorded in the register, against signature of holder; 5/10/2018 CBO - Customers' Account & Operation Technichal Training 235

236. Keys mgt… Duplicate Keys Duplicate Strong room doors and safes of branches must be held by the respective districts; “Combination-Code” of cash vault doors/safes should be sent to the respective district; Other duplicate branch keys are handled by the branch manager. 5/10/2018 CBO - Customers' Account & Operation Technichal Training 236

237. Keys Mgt…. Lost Keys Replacement Lost keys should be reported immediately; All costs incurred as a result of a key replacement will be paid by the employee who lost the key or keys; Lost strong room door or large safe key must be totally replaced by a new. 5/10/2018 CBO - Customers' Account & Operation Technichal Training 237

238. Tea break Day four after noon 5/10/2018 CBO - Customers' Account & Operation Technichal Training 238

239. Resource Mobilization 5/10/2018 CBO - Customers' Account & Operation Technichal Training 239 Financial perspectives of strategic objectives are: Increase profitability and market share Increase financial resources mobilization Improve financial soundness Increase Financial Resource mobilization Increasing local deposit mobilization Increasing FCY earning Raising Paid-up capital

240. 5/10/2018 CBO - Customers' Account & Operation Technichal Training 240

241. Increase Financial Resource mobilization 5/10/2018 CBO - Customers' Account & Operation Technichal Training 241

242. Benefits of deposit mobilization 5/10/2018 CBO - Customers' Account & Operation Technichal Training 242 The Bank mobilizes deposit for the following benefits: For lending/borrowing the fund For investing in profitable business not prohibited by NBE Directive From lending(loans) the Bank generates interest income & from the investment the bank generates return on investment .

243. Local deposit mobilization Local deposit is mobilized through deposit products like: saving, demand & fixed time deposit from depositary customers. This can be done by: Convincing customer at the counter; Cross-selling the Bank’s products; Money tracking; Door to door services/Cash Pick up Service Referral marketing; Stakeholder relationship. 5/10/2018 CBO - Customers' Account & Operation Technichal Training 243

244. Benefits of FCY Mobilization When the Bank mobilizes FCY it assist the Bank: For local deposit mobilization It is major source of income for the Bank commission income from import business Income from exchange of currency 5/10/2018 CBO - Customers' Account & Operation Technichal Training 244

245. Foreign currency mobilization FCY mobilization can be performed through: Export Remittance service cash purchase SWIFT Export financing- providing loan for exporters & in return getting inflow of foreign exchange/currency through proceeds. 5/10/2018 CBO - Customers' Account & Operation Technichal Training 245

246. Remittance Remittances are transfers in the form of goods or money that migrants send back home to their families. Many people in the developing countries depend upon the remittances received from their families abroad. Remittances play a huge role in developing countries ' economy, individual households, and businesses. It represents one of major international financial resources , which sometimes they exceed the flows of foreign direct investment (FDI) 5/10/2018 CBO - Customers' Account & Operation Technical Training 246 The cheapest & hottest cake in our table

247. The benefits of Remittance Remittance has multiple benefits to the bank. These are: It generates FCY for the Bank; The bank earns commission income from the MTO Agents for delivering the service; The bank will cross sell its bank products; It gives the opportunity to mobilize deposit from the beneficiaries of the Remittance. 5/10/2018 CBO - Customers' Account & Operation Technichal Training 247 The cheapest source of FCY

248. Remittance in Ethiopia There are about 40 MTOs operating in Ethiopia but , Western Union, Money Gram, Dahabshil , and Boleatlantic are the bigwigs taking up the lion’s share of the remittance business. 5/10/2018 CBO - Customers' Account & Operation Technical Training 248 YEAR Nationally FCY generated through remittance(formal channel) FCY earned by CBO from remittance service Percentage share of CBO 2014/15 3 Billion USD 45.7 million 1.5% 2015/16 3.7 Billion USD 38.2 million 1% 2016/17 4 billion USD 47.6 million 1.2% Why?

249. 5/10/2018 CBO - Customers' Account & Operation Technichal Training 249

250. FCY Cash purchase FCY cash purchase is one way of FCY Mobilization. Purchasing FCY is done after detecting the genuineness/reality of the currency by detecting machine or other means of detection like using marker intended for this purpose. Above all knowing Security features is very important to detect the currency (you can goggle each of the security features all currencies) Currently FCY purchased by the Bank are US Dollar, Pound sterling, Euro , Dirham & Saudi raid 5/10/2018 CBO - Customers' Account & Operation Technichal Training 250

251. SWIFT SWIFT( Society for World Interbank Financial Telecommunication)- It provides a network that enables financial institutions worldwide to send & receive information about financial transactions in a secured, standardized & reliable environment. It is a means of directly transferring/crediting account worldwide through correspondent Bank account. Diaspora accounts are mostly credited directly trough this transfer system. Branches are expected to know the SWIFT code of the bank (CBORETAA) along with the correspondent banks account.(dollar, euro & pound sterling) Our Trade Service process will update Correspondent Banks account. 5/10/2018 CBO - Customers' Account & Operation Technichal Training 251 CBORETAA

252. Raising Paid-up Capital It is a total amount of capital funded by the Bank’s share holders/It is the maximum a capital that a company is allowed to raise through the sale of its shares. It is a means of Financing the Bank. Healthy paid up capital reflects corporate brand & image of the Bank. 5/10/2018 CBO - Customers' Account & Operation Technichal Training 252

253. Benefits of higher paid up capital It is an essential instrument in strengthening the financial stability of the banking sector. They insure that the Bank is in a better position in absorbing risks. It builds a good image for the bank. When there is higher paid up capital, it makes easy for engaging in higher projects like fixed asset acquisition(capital goods like building) 5/10/2018 CBO - Customers' Account & Operation Technical Training 253 Higher paid up capital strengthen stability of the Bank

254. Alternative channels of Banking Alternative channels of banking is the recent methods of carrying on Banking operations. This channels are ATM, POS Terminals, Internet Banking , Mobile Banking, Agency Banking & etc. The future is digital banking –there will be an emerging paradigms that will get stronger over the near future. In the future branches will be opened for specialized purpose only. Be first to change with the changing technology. 5/10/2018 CBO - Customers' Account & Operation Technichal Training 254

255. End of day four 5/10/2018 CBO - Customers' Account & Operation Technichal Training 255

256. FORWARD 5/10/2018 CBO - Customers' Account & Operation Technichal Training 256 PLEASE READ THE ENTIRE CA&O PROCEDURE OF THE BANK FOR MORE UNDERSTANDING