Report On Foreign Exchange Division of Standard Bank

Thesis Report
On
Foreign Exchange Division of Standard Bank
Submitted by
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Banking sector is expanding its hand in different financial events every day. At the same time the
banking process is becoming faster and easier. As the demand for the better service increases day by
day, banks are coming up with different innovative ideas and products. In order to survive in the
competitive field of the banking sector, all the banking organizations are looking for better service
opportunities to provide their fellow clients. As a result, it has become essential for every person to have
some idea on the bank and banking procedure.
The word bank has been derived from the atin word Bancs or from Basque, which means a bench in
!nglish. The early bankers transacted their business at a bench in a market place. Bank is a financial
institution which deals in money, receive deposit from customers, honor customers" drawings against
such deposits on demand, collect #he$ues for customers and lend or invest deposits to individuals,
companies or other organizations. %o, bank is an intermediary institution that makes relationship
between the owner of surplus savings and the investor of deficit capital. In this process, banks earn
profit by receiving interest from the borrowers who want to take short&term or long&term loans and
making relatively lower interest payment to the depositors for providing their funds for use by the bank.
1.1 Origin of the Report:
'#( is re$uired for students who get )aster degree in Business Administration *)BA+ from A%A
,niversity Bangladesh. In this (rogram, I have studied with %tandard Bank imited as I assigned and
my topics is Ana!sis Of Foreign Exchange Division".
1.# Significance of the st$d!:
This report has been prepared for the partial re$uirement of the )BA but I think it has a great
significance for others also. This report deals with the foreign exchange system of %tandard Bank
imited *%B+. The findings and analysis of this report will be the useful for me, the authority of the
Bank and #ustomer also. I can ac$uaint with the different types of product and services and gain
knowledge. The authority of the Bank"s can also be benefited. They can know the different types of
problem that customer face and the remedy of the problem. They may take decision on the basis of this
report and have some new ideas to be launched. The customer can express their opinion about the
problem they face and can ac$uaint with different services what they don"t know.
1.% O&'ective of the st$d!:
This report has been prepared for the following ob-ectives.
To identify the documents used in foreign exchange system in %B.
To evaluate export, Import, / foreign remittance of the selected Bank.
To identify problems regarding foreign exchange operation of the sample Bank.
To suggest in order to improve the foreign exchange operation of the given Bank.
1.( )ethodoog! of the st$d!:
Both primary and secondary data have been used in this study. (rimary data have been collected with
the help of a $uestionnaire method through field survey and ten bankers / thirty customers have been
selected in this report
*ri+ar! Sources :
The primary data have been collected from the following sources.
0ace to face conversation with the employees and the customers.
1uestioners.
Secondar! So$rces:
The secondary data have been collected from the annual report of %tandard Bank imited / different
manuals of sample Bank. The collected data has been analyzed by using different tables / graphs.
The secondary data have been collected from the following sources.
Annual report of %tandard Bank td.
2ifferent manuals of %tandard Bank td
3eb site of %tandard Bank
1., -i+itations of the st$d!:
2ue to the code of the secrecy of the Bank, Bankers does not give the confidential data which are
essential though they were cordial to me. Time constraints also a barrier for me. The customers were
very busy and not willing to give me time to have necessary information as I desired from them.
CHAPTER
2
#.Overvie. of Standard Bank i+ited
#.1. Deveop+ent of Banking in Bangadesh:
%ince early British rule, the history of banking in Bangladesh territory shows that the traditional trade&
networks developed before the banks invaded rural areas. And the banking services have slowly
flourished in Bangladesh territory. !ven today, in many places, moneylenders provide credit services.
%mall shopkeepers and businessman use informal credit at high interest rate, traditional )aha-an"s
money lending business gradually declined due to expansion of bank and the micro credit programs of
45's, #ooperative banks and government agencies
)odern banking system plays a vital role for a nation"s economic development. 'ver the last few years
the banking world has been undergoing a lot of changes due to deregulation, technological innovations,
globalization etc. These changes in the banking system also brought revolutionary changes in a
country"s economy. (resent world is changing rapidly to face the challenge of competitive free market
economy. It is well recognized that there is an urgent need for better, $ualified management and better&
trained staff in the dynamic global financial market. Bangladesh is no exceptions of this trend. Banking
%ector in Bangladesh is facing challenges from different angles though its prospect is bright in the
future.
Bangladesh is one of the developing countries in the world. The economy of the country has a lot left to
be desired and there are lots of scopes for massive improvement. In an economy like this, banking
sector can play a vital role to improve the overall social 6 economic condition of the country. The banks
by playing the role of an intermediary can mobilize the excess fund of surplus sectors to provide
necessary finance, to those sectors, which are needed to promote for the sound development of the
country.
#ommercial banks in Bangladesh economy are to face an increasing competition for their business in
coming days, like any other emerging market economies. Their business is no longer remaining easy as
they earlier. The real change in the banking business has started to come with the government"s decision
to allow the business in the private sector in the middle of the !ighty"s.
#.# Backgro$nd of SB-:
Standard Bank -i+ited /SB-0 was incorporated as a (ublic imited #ompany on )ay 77, 7888
under the #ompanies Act, 7889 and the Bank achieved satisfactory progress from its commercial
operations on :une ;<, 7888. %B has introduced several new products on credit and deposit schemes. It
also goes for #orporate and =etail Banking etc. The Bank also participated in fund %yndication with
other Banks. Through all these myriad activities %B has created a positive impact in the )arket.
#.% Feat$res of SB-:
%tandard Bank builds up strong pillar of capital, promote trade, commerce and industry> discover
strategies for achieving systematic growth.
It is the pioneer in introducing and launching different customer friendly deposit %chemes to tap the
savings of the people for channeling the same to the productive sectors of the economy.
It has created congenial atmosphere so that the client becomes interested to deal with the %tandard
bank limited.
0or uplifting the standard of living of the limited income group of the population, the Bank has
introduced =etail #redit %cheme by providing financial assistance in the form of loan to the
consumers for procuring household durables.
The Bank is committed to maintain continuous research and development to keep pace with modern
banking.
=ecently the bank starts internet banking in order to provide prompt and efficient services to the
customers.
The bank has introduced customer relations management system to assess the needs of various
customers and resolve any problem on the spot.
#.( O&'ectives of Standard Bank -i+ited
To be a dynamic leader in the financial market in innovating new products as to the needs of the
society.
To earn positive economic value addition *!?A+ each year to come.
To top the list in respect of cost efficiency of all the commercial Banks.
To become one of the best financial institutions in Bangladesh economy participating in the
most significant segments of business market that we serve.
#., )ission1 2ision 3 4ore 2a$es of Standard Bank -i+ited
2ision of SB-:
To be a modern Bank having the ob-ect of building a sound national economy and to contribute
significantly to the (ublic !xche$uer.
)ission of SB-:
To be the best private commercial bank in Bangladesh in terms of efficiency, capital ade$uacy,
asset $uality, sound management and profitability.
4ore 2a$es of SB-:
O$r Sharehoders: By ensuring fair return on their investment through generating stable profit.
O$r c$sto+er: To become most caring bank by providing the most courteous and efficient
service in every area of our business.
O$r e+po!ee: By promoting the well being of the members of the staff.
4o++$nit!: Assuring our socially responsible corporate entity in a tangible manner through
close adherence to national policies and ob-ectives.
#.5 )anage+ent of Standard Bank -td:
As a fully licensed professional bank, %tandard Bank imited is being managed by a highly professional
and dedicated team with long experience in banking. They constantly focus on understanding and
anticipating customer needs. As the banking scenario undergoes changes so the bank and its
responsibilities itself changed in the market condition.
In the bank, board of directors has the sole authority too take decision about thee affairs of the business.
4ow there are 7@ directors in the management of the bank. All the directors have the good academic
background and have huge experience in business. The board of directors holds meetings on a regular
basis. There are different committees in the bank for the efficient management of the bank. All these
committees meet on a regular basis for discussing various issues and proposals submitted for decisions.
The committees are.
Board of Directors
Exec$tive 4o++ittee of the Board
*oic! 4o++ittee of the Board
4redit 4o++ittee
Board of Directors:
S-
6o
6a+e Designation
7 )r. Aazi Akramuddin Ahamed #hairman
B )r. Aamal )ostafa #howdhury 2irector
< )r. )ohammad 4urul Islam 2irector
9 )r. Ashok Aumar %aha 2irector
C )r. 0erozur =ahman 2irector
D )r. )d. )onzurul Alam 2irector
E
)r. %. A. ). Fossain
2irector / #hairman of
!xecutive #ommittee
@
)r. )ohammed Abdul Aziz
5reen Banking #ommittee
8 Al&Fa- )ohammed %hamsul Alam 2irector
7; )r. Abdul Ahad 2irector
77 )r. )d. Gahedul Fo$ue 2irector
7B )r. 0erdous Ali Ahan 2irector
7< Al&Fa- )d. Housuf #howdhury ?ice&#hairman
79 )r. )oshfe$ue )amun =izvi 2irector
7C )r. )d. 0ayekuzzaman 2irector
7D )r. %haikh )esba ,ddin 2irector
7E
)r. %. %. 4izamuddin Ahmed
Audit #ommittee
7@ )r. %. A. 0aroo$ui )anaging 2irecto
#.7 Organ gra+ of Standard Bank -i+ited:
Board of
Directors
Executive
Committee of
the Board
Policy
Committee of
the Board
Board Audit
Cell
Board
Secretariat
Managing
Director
Senior
Executive Vice
President
Mareting
Division
!nvestment
Division
!nternational
Division
Pu"lic #elation
Division
$reasury %nit
D.M.D
&.#.D
'.A.D
Monitoring (
!ns)ection
Division
Cor)orate
Affairs
Division
Com)uter
Division
#esearch (
Develo)ment
Credit
Committe
e
*eneral
Service
Division
#.8 Organi9ationa :ierarch! of SB-:

Senior Vice President (SVP)
Managing Director (MD)
Deputy Managing Director (DMD)
Senior Eecuti!e Vice President (SEVP)
Eecuti!e Vice President (EVP)
Vice President (VP)
"unior #$$icer
#$$icer
%rainee &ssistant
Manage'ent %rainee Senior &ssistant Vice President (S&VP)
&ssistant Vice President (&VP)
(irst &ssistant Vice President ((&VP) Senior Eecuti!e #$$icer (SE#) Eecuti!e #$$icer (E#) Senior #$$icer
#.; The )a'or *rod$cts 3 Service of SB-:
#.;.1 *rod$cts:
'pening of different types of Accounts
Issuing checkbook and delivering 2eposit receipt book
There are several kinds of Account are held.
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Savings Acco$nt:
3hen a person will open this AI#, the important things are necessary.
7. Introduction of 2epositor I AI#"s holder
B. (hotocopy of passportI #hairman #ertificateI Attested of 0irst #lass 'fficerI
?oter I2 #ard.
<. Two copies of photographs.
9. AH# JAnow Hour #ustomer+ form / T( *Transaction (rofile+
SB- Reg$ar Deposit *rogra++e / SRD* 0
K If any monthly installment remains unpaid for C *five+ consecutive months, the account will be closed
automatically and the account will be settled as detailed below.&
Reationship< Ten$re Appied =nterest
ess than 7*one+ year 4o interest
)ore than 7 year but
less < years
%avings =ate
)ore than < years but
less C years
)atured value of < years and rest as per
prevailing interest rate on savings rate
)ore than C years but
less 7; years
)atured value of C years and rest as per
prevailing interest rate on savings rate.
If failure to pay monthly installment on due dates heIshe will pay penalty of Tk. B;I&*Twenty+ next
subse$uent installment.
)onth! =nsta+ent1 Ten$re and )at$rit! 2a$e .i &e as per foo.ing Sched$e:>
=nsta+ent <
?ears
%@@ ,@@ 1@@@ #@@@ #,@@ ,@@@ 1@@@@
< Hears 7<,;;; B7,E;; 9<,9;; @D,@;; 7,;@,D;; B,7E,B;; 9,<9,9;;
C Hears B9,E;; 97,9;; @B,@;; 7,DC,D;; B,;E,;;; 9,79,;;; @,B@,;;;
E Hears <8,8;; DC,D;; 7,<7,B;; B,DB,9;; <,B@,;;; D,CD,;;; 7<,7B,;;;
7; Hears D8,7;; 7,7C,7;; B,<;,B;; 9,D;,9;; C,EC,C;; 77,C7,;;; B<,;B,;;;
4ons$+er 4redit Sche+e :
ending rate has been shown in the following table where fixed rate *Bangladesh bank instructed rate+
and mid&rate are given. Bank may re&fix L7.C; over the mid rate considering the risk involvement.
These rates are effective from :anuary ;7, B;7;.
S- *artic$ars Fixed Rate )id Rate
@1 4ons$+er 4redit Sche+e /Staff0 1#.@@A >>
@# 4ons$+er 4redit Sche+e /4o++ercia0 >> 1(.@@A
7.;;M additional interest rate will be charged for default in paymentI ad-ustment. All other charges,
commissions and fees shall remain unchanged.
4$rrent =ndivid$a Acco$nt:
7. =e$uirement same as savings Account
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B. (roprietorship I0irm Account
<. #ommon Individual of %IA
9. Trade icense with validity
C. %eal of the 0irm.
*artnership Acco$nt:
7. #ommon Individual of %IA
B. Trade icense with validity *more than two owners+
<. (artnership 2eed with =egistered
9. TA.l;;; stamp
5. (artnership letter *Bank will gives+
D. 0irm"s %eal
*rivate /-TD0
7. #ommon Individual of %IA
B. Trade license
<. )emorandum or articles of association
9. #ertificate in #orporation
5. =egulation of full board with signature
D. ist of 2irectors
E. 'rganizations seal
@. #ertificate of commencement
8. %T2 *%hort term 2eposits+
7;. =e$uirement same as individual AI#
77. %T2 *(ublic / (rivate+
7B. =e$uirement same as (ublic and private AI#
4$&< Societ!
I. By aws
B. =egulation
<. #ommon Individual
9. %eal of clubIsociety
5. =egistration number
Tr$stee
7. #ommon as clubIsociety
B. Trustee 2eed
6BO
7. #ommon as clubIsociety
B. =egistration of 45' Bureau
-oca Re+ittance:
TransmissionItransfer of money from one place to another, ocal remittance represents remittance that
takes place within the territory of a country.
Banks have a wide network of Branches all over the country and offer various types of remittance
facilities to the publicIcustomerIclient etc.
?irtually there are main works of remittance department that are as under. &&
7. Transfer of funds through 2emand 2raft *22+, Telegraphic Transfer *TT+, and
)oney Transfer *)T+
B. Issuance of (ay 'rder *(;+, pay slips *(%+, %ecurity 2eposit *%2+, Bearing
#ertificate 2eposit *B#2+ etc.
<. ocal Bills for #ollection *B#+, 'utward Bills #ollection *'B#+
9. #ollections of che$ues, 2rafts and presenting them to clearing house
5. )aintenance of 02=
Foreign Re+ittance:
These activities are.
7. Activities related to I# opening
B. =eceiving documents from !xporters Bank
<. (erform all activities for retirement of document for collecting the importing
5oods.
The main functions of the !xports are.
I. 5etting the I# 2ocuments from 0oreign importers Bank
B. 5ives this I# to !xporter
<. Advising the I#
9. 'pening the Bank&to&Bank I#
5. #ollection and distribution of the payment of Bank to Bank
D. 3hen after shipment of goods the exporter submits all documents as per as I#,
This department scrutinizes those documents and sent to Importer Bank.
Foreign Exchange
7+ 2eals with inward foreign =emittance.
B+ 2ealing of Traveler #hecks.
<+ Transfer money and currency through 3estern ,nion.
9+ Transfer fund through draft, Telegraphic Transfer, )ail Transfer etc.
5) 0oreign Bills collection.
D+ 0oreign Bills purchase and discount.
CESTER6 D6=O6
%tandard Bank is the pioneer to launch 3estern ,nion in Bangladesh and now it is one of the most
popular way to transfer money.
It is used for foreign dealings.
I2 *To =eceive )oney through 3estern ,nion+.
(assport *within the validity period+
2riving icense
=ation #ard
?oters I2
(an #ard
=efugee #ard
%tudent :2 *4ationalized ,niversity and college+
Bank Account
#redit #ard
Army #ard
(ost office loyalty card, 5ovt., employee I2 card, local *3I#+ I2 card. All I2 are valid
only if they have a photograph and the I2 verifies the person"s signature
AD2A64E
Advance in the form of loans, overdraft *i.e. cash credit&##, %ecured overdraft&%'2+ and
discounts are sanctioned to the customers. If the amount of advance crosses the limit of authority
of Branch in charge then it has to take approval from the Fead 'ffice #redit 2ivision.
Advance facilities provided by the Bank are.
N 5eneral loan.
N !mployee Fouse Building oan *!FB+, Fouse Building oan *i&IB+
N %ecured 'verdrafts&%'2
N #ash #redit&##
N I), 'verdraft
N #onsumer #redit %cheme&##%
N oan against work order, 5ovt. bond and checks and shares
N oan against foreign bill of document etc.
#.;.# Services Of SB-:
Exchange :o$se
%B !xchange Fouses at various locations *,%A, ,A, etc+ is enabling 4on =esident
Bangladeshis to send their remittances at home in a $uickest and safest way.
=sa+ic Banking
%tandard Bank has introduced Islamic banking to meet the growing needs of the customers for
%hariah&based banking. It offers a wide range of financial services that covers the entire
spectrum of banking operations. Islamic Banking #lient can also access 4et Banking through
this site.
2isa 4redit 4ard
#redit #ards facilitate your lifestyle in all facets like shopping, dining, accommodation,
traveling, hospitalization, purchasing furniture / e$uipment for a interest free time, gift cards
and so on that would be determined in needs of time.
AT) Service
%tandard Bank imited has modern banking facility. 3ithdraw cash B9 hours a day. E days a
week. Hou can get a mini&statement of your account whatever re$uired. 0or the safety reason our
AT)
S)E Banking
0rom the perspective of %)! banking, there is no doubt that the world is getting flatter every
day. %tandard Bank launched %)! banking to deliver the highest standard of service to its
clientele.
4orporate Banking
Bangladesh economy is changing every day. #hanges are more and more visible and sometimes
it seems they are happening overnight. 4ow days the economical challenges re$uire flexibility
and ad-ustment capacity. To face the challenges and business opportunities %tandard Bank
delivers cash )anagement and ending %olutions match for specific business and re$uests.
#.1@ 4o+pan! Environ+ent Ana!sis:
Bank is a financial Institution, which deals with money.
In recent years there are dramatic changes in the national banking sector. Banks are being called
upon to deliver prompt and efficient services through state&of&the art technology in a competitive
and demanding market. At the same time, banks are expected to play an increased role to meet
the national needs of economic growth and productive employment. By identifying and
promoting schemes that will lead to greater employment and mobilization of resources, the
banking sector will not only contribute to a more dynamic economy but also enhance the $uality
of the lives of the people of the country. International banking too has transformed itself in the
last decade. Bands have had to operate in a global market place where trade barriers have been
firstly disappearing.
A truly international bank must now finance foreign trade, handle foreign exchange in branch
banking as well as involved in activities such as correspondent banking, cross border lending,
money market investments, bond trading, pro-ect financing, leasing, issuing stand&by letter of
credit, and offering international cash management services etc. The banking sector thus re$uires
bank to be much more dynamic, global and sophisticated than ever before. ?ery few banks have
taken up the challenge and attempted to modernize and offer a comprehensive package of
services.
#onsidering the above situation and a demand for a bank fully e$uipped handle the national and
international re$uirements of the private sector, %tandard Bank td. has emerged as the nation"s
progressive bank which is innovative modern, and international in its outlook. It is committed to
take care of all banking re$uirements through state.
#.11 =nterna Environ+ent Ana!sis:
The management of the Bank is vested with the Board of 2irectors comprising of B7 members
including the managing director who are reputed professional business personalities and leading
industrialists of the country. #ommercial banking, with its great reliance on public confidence
and influence on the nation"s economy needs high $uality management and organization
structure. The organization structure is shown below. The board of directors being at the highest
level of organizational structure plays an important role in the policy formation. The board of
directors is not directly concerned with the day&to&day operation of the bank. It has delegated
authority to its management committee. The position of the chairman of the Board carries with it
a great deal of dignity and respects in banking circles. The chairman keeps the Board of
2irectors informed of the progress of the bank and in turn implements the policies established.
The )anaging 2irector of is the #hief !xecutive of the Bank. Fe is responsible for
administering the business affairs of the bank. Fe is also concerned with planning and its
implementation. Fe represents the bank to the meeting and responds to the various in$uiries of
the members of the board.
The growth and progress of a band can be realized only through combined and coordinated
efforts of its members who work there. Aeeping these in mind, recruited very skilled and
$ualified people in the bank having banking expertise and experience has also been recruiting
probationary officers having good academic background. As on 2ecember <7, B;;E the total
number of employees of the bank stood at B;;@.
#.1# Divisions of SB-:
The )anaging 2irector is the head of the operational area of the bank and its chief executive.
The )anaging 2irector is appointed by the Board of 2irectors with prior permission of the
Bangladesh bank. All policy formulation and subse$uent executions are done in the head office.
#.1#.1 4redit Ad+inistration Division:
#redit Administration 2ivision is one of the important divisions of a financial institution.
This division is headed by %enior ?ice (resident or ?ice (resident.
All advance proposals from the prospective borrowers are sent by respective branches for an
approval form the head office. This department initiates the advance proposals of the branch, it
keeps track of credit portfolio by obtaining regular information form branch. It sets price for
credits and ensure affecting it at branches. This department also monitors the various loan
accounts of the branches and prepares various statements for Bangladesh Bank.
The broad functions of credit division are.
a+ 0ollow&upImonitoring the implementation of Boards standing committee"s
comment or past due.
b+ =eviewing the monthly past due accounts and monitoring the progress or each
case with the Branch.
c+ =eview the cases already transferred to the legal advisor for initiating legal action.
d+ =eview the internalI externalI Bangladesh Bank audit reports *#redit (orting+
e+ (repare the statements, information, etc, re$uired for the BoardO )anagement
Bangladesh Bank.
f+ (rovide financing for foreign trade *!xport and Import+.
g+ (ro-ect finance, real estate finance, small business professional and rural credit
and other credit scheme
h+ )arketing support and intelligence.
#.1#.# Financia =nstit$tions Division
This division is headed by a senior ?ice (resident or a ?ice (resident. 3ork of this department
has become important due to the governments policy of making Taka a convertible currency.
This division is a very important functional division because of %B"s huge involvement in
export&import business. All foreign exchange is handled by this division. All the international
business and transaction have to go through this division and after it improves the final decisions
to go to the branches. This division performs a number of functions which are as follows.
7+ 0und )anagement. This can be broken down as follows&
%pot and forward sale and purchase of foreign currency
0oreign currency transfer and placement
0oreign currency fund management i.e. managing the 4ostro account
To maintain holding of foreign currency with correspondent Bank
B+ #orrespondent Banking, I# confirmation etc.
It includes&
Arranging agency
#orrespondence banking& which includes correspondence relationship, test key control,
Authorized signature control etc.
2istribution of foreign test keys.
2istribution of authorized and dealership license to the branch.
<+ =econciliation of different foreign accounts maintained by %B against different banks is
done here.
9+ (reparing and forwarding overdue I# statements on account of Bank to Back I# to
Bangladesh, monitoring garments related affairs maintaining the Bangladesh Bank
returns and statistics concerning Bangladesh Bank.
%B has international operation with about fifty countries through 7BC correspondents.
#.1#.% A$dit and Risk )anage+ent Division:
The main functions of this division is to provide legal assistance to the branches and implement
recovery strategy for stuck&up loan and to ensure strict adherence of rules and policies by all
concerned of the bank through routine and surprise inspection and audit. The functions of this
division area as follows.
)onitor the individual cases with respect to their securities, value of securities,
and finally review the possibility of recovery of bank"s stuck&up dues. Implement
rescheduling process of stuck&up classified loan to the branches for obtaining
repayment schedule through strong persuasion and serve final notice etc., as the
condition re$uired.
Time to time follow&up stuck&up advances of branches and keep the branches
under constant pressure
Appointment of branch lawyers from a panel of lawyer kept in the division.
(ersonal contact is made at the head office level, especially with the big
borrowers and arrangements are for recovery.
Incase of failure of moral persuasion, concerned branches are advised to serve
legal notice to the defaulters.
Time to time follow up of the cases and keep the top management informed.
)aintain statistics of recovery of classified advances.
Inspect all branches operation audits at least once in a year.
#arry out surprise audits as felt necessary.
Investigate suspicious or irregular matters being directed by higher management.
Also conduct such in$uiry being re$uested by affected branch&in&charges.
=eceive non&performing advances classification recommendation form branches
and approve disposal.
(repare classified advance report> recommend bank"s strategy to deal with that for
management and Board of 2irectors.
#.1#.( Operation and =nnovative Services Division:
The main functions of this division are to develop 5eneral Banking, maintain public relation,
technology development and support, strategic planning procurement and supply all tangible
goods to the branches. These are described as follows.
a+ )ake arrangements for branch opening such as making lease agreement, internal
decorations etc.
b+ (rint all securities paper and bank stationery.
c+ 2istribute this stationery to the branches.
d+ Import necessary stationery items.
e+ (urchase all sort of furniture"s / fixtures for the branches.
f+ Issuance of power of Attorney to the officers for the branches etc.
g+ Issuance of different circulars to the Bangladesh Bank.
h+ 5eneral correspondence with Bangladesh Bank and other Banks.
i+ 'versee the cash affairs of the branches etc.
-+ Advertise in the different media about tender notice, general meetings and other
public interests.
k+ (rint and distribute greeting cards, calendar, diary etc.
7+ Aeep good relationship with the various news media.
m+ (repare speeches for )anaging 2irector or 2irectors for any special occasion.
n+ To develop or improve or introduce new technologies for speedy implementation
of polices.
o+ Issue notice regarding board meeting and other meetings.
p+ Folding meeting.
$+ 'btain signature in the minutes from #hairman.
r+ Inform different divisions of the department regarding decision of a particular memo.
s+ =epair, maintain and contract Bank"s building.
#.1#., 4ard Division:
They are now in this business for last 8 months the response to which has been found $uite
satisfactory. )aster&#ard International, is to allow cash drawings facility from its branches
against )aster&#ard cards, whether issued by or any other bankIinstitutions in the world.
Initially such cash drawing arrangements can be made in 79 branches of the bank. 0or cash
drawing, branches will have to take prior authorization from Fead 'ffice #redit #ard division
over phone and after and cash drawing, a debit advice along with the sales slip to be sent to F'
#redit #ard division.
The customer can draw from other bank *branches+ if he has any account for that, in that case the
Fead 'ffice will issue a 2ebit advice for that branch. Any individual, who is an account holder
of for at least six months, is between B7 and E; years of age. Fas a regular gross monthly income
of T. 7;,;;; above after tax are eligible for a #redit #ard. A person can use hisIher #redit #ard
at over C;; retail and service outlets around the country. :ust look for the P?I%AI)aster #ardQ
sign Rit the outlets and en-oy the benefits of being a #redit #ardholder.
3ith this service they have newly started the service of 2!BIT #A=2.
#.1#.5 Treas$r! and 4entra Acco$nts Division:
The board functions of this department are.
)aintain daily li$uidity positions, Treasury bills call money, Investment I
2ebentures, placement of funds, etc
)onthly accrued interest calculation of all interest bearing accounts. Inter&branch
interest calculation for Fead&'ffice, Amortization of all fixed and o there assets.
(reparation of statement of Accounts and (rofit / oss account for the bank.
3eekly deposit and advance analysis of the bank.
#ost of fund analysis.
Branches extract preparation.
(roviding information to the auditor for preparing balance sheet
)aintenance of accounts, preparation of annual repot of the bank, maintenance of
provident fund accounts, maintenance of Income / !xpenditure posting,
maintenance of salaries and wages of the employees etc.
All schedule commercial banks in Bangladesh has to perform under the rules and regulations of
#entral Bank. 0or this reason all banks have to furnish different types of information to
Bangladesh Bank in prescribed forms. The following information is prepared by this department
for this purpose.
3eekly position i.e. Thursday position.
%.B.% R7, monthly statement of asset and liabilities.
%.B.%& B classification of deposits R $uarterly.
%.B.%& <, classification of credit& $uarterly.
%.B.%&9, statement of credit ceiling, credit report.
0orm ;8, statement of li$uid assets&monthly.
0orm 7;, statement on asset and liabilities& monthly
2eposit held by sector corporationsI enterprises& monthly
%tatement of small depositors&$uarterly.
#ash in transit&monthly
%tatement on credit by size Rmonthly.
%tatement on loans and advances.
In the present world, computer has become the most essential and vital area in any organization.
It is much more important for financial institutions to carry out its day to day operations with the
help of computers. Introduced on&line computer system from its inception.
%B has a good reputation in the market for its excellent services among domestic banks. %B
has always been forward looking to cater more effectively to its valued customers and
computerization in the bank has been recognized as a priority all along.
,nder the branch computerization program all branches have been computerized and starting
from #he$ue posting to back office accounting, all operations are handled by computers. This
has given the bank an added advantage in increasing its productivity and brought $ualitative
change in customer service.
At the Fead 'ffice level all divisions are e$uipped with personal computer. Business functions
under different divisions are being systematically taken its computerized environment. Budget
control and monitoring, 5eneral edger, Income / !xpenditure, classification of advances at
Fead 'ffice are all computerized under Fead 'ffice computerization plan. A large network has
been installed to include all divisions and departments so that most of the business functions and
activities are integrated and made accessible to the users for management decisions.
#.1#.7 =nfor+ation S!ste+ and Technoog! Division:
Information technology / flow of information is an important division of today"s world..%B"s
IT infrastructure has already extended its reach across all our branches. %B"s own switching
system is in place and we have already installed a few AT) booths. 'ur debit cards can be used
not only in %B"s own AT)s but also in other networks operating in Bangladesh. %B have
already taken associate membership from ?I%A International and %B shall soon launch ?I%A
credit card which can be used locally and internationally. 2ebit and credit card will add to our
milestone of progress. In line with Bangladesh BankSs guidelines %B want to deepen our stake
in agriculture and agro based pro-ects.
%B have undertaken initiatives to offer agro loan to marginal farmers under cluster
arrangement. %B have already included two villages under our branches" command area to
enlist farmers and put them under bankSs finance for farming or any other productive activities.
%uch pro-ect will be done under pilot scheme of SA2A=%FA 5=A)S and we believe this will
definitely alleviate poverty among those who are at the marginal level and have least access to
bankSs finance.
#.1#.8 :$+an Reso$rces Division
The growth and progress of a Bank can be released only through the combined and coordinated
efforts of its members who work there. Aeeping these in mind, %B recruited very skilled and
$ualified people in the bank having expertise and experience. %B have also been recruiting
probationary officers having good academic background. %B have also decided to recruit
probationary officers every year through competitive examination and create s strong
management cadre for the future. The Bank has offered a new pay scale to the employees
bringing significant improvement in salary structure. In line with salary raise %B have also
revised house building loan scheme for the employees with higher ceiling and %B have
allocated more fund. eave 0are Assistance is being introduced in the Bank for the first time to
inspire the !xecutives.
%B consider promotion cases for the deserving and eligible employees every year and
accordingly has promoted a total of B<C employees in different categories during the year.
Incentive Bonus e$uivalent to 7C days basic salary has been given to all eligible !xecutives,
'fficers and %taffs for the appreciable loan collection of 788D. %B have also decided to bring
the outstanding performance. Those who have achieved their budgeted targets in different areas
of business operations were rewarded with cash prize in the form of prize bonds, crest and
appreciation letter. It is to be hoped that all these measures will raise the spirit of the employees
and they will feel encouraged to contribute more towards the growth of business for the Bank.
#.1#.; =nvest+ent Division
The ma-or functions of this division are as follows.
a+ #apital market operations.
b+ ease financing.
c+ Fire&purchase.
d+ )erchant&Banking etc.
#.1#.1@ Foreign Exchange Division
It is an essential part of the %tandard Bank. )ost of the private bank has their separate branch
which is known as Foreign Exchange Branch and they will only deal with foreign exchange
related work. Although %tandard Bank doesn"t have this option but they have given much
priority to this division. This division performs several activities which are given below.
(rovide I# facilities.
)onitoring exchange rate of different currencies.
0acilitates the exchange rate to other branches.
)anaging good relation with foreign correspondent.
Increase foreign correspondent.
(rovide endorsement facilities.
(rovide travelers #he$ue facilities.
Buy and sell foreign exchange.
(rovide transfer facilities.
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#.1#.11 Recent Deveop+ent of SB-:
=etail Banking deals with the banking services to the individuals. It includes the following.
a+ 2eposits services.
b+ 3age !arners %ervices. %B. 'ffers a few innovative schemes to Bangladeshi
wage earners working overseas.
c+ (ersonal banking private banking, customer, finance, investment management,
0inance for self&employed persons.
#.1#.1# *ro&e+s of the Standard Bank -i+ited
0ollowing various problems is including in the %B.
*oitica dist$r&ances:
It is not favorable for Bank Business in Bangladesh. It is the main problem of %B. It is also a
problem of all Banking system in Bangladesh
#ompetitive Banking )arket.
2ifferent kinds of commercial Bank are serving in our commercial Banking )arket. Therefore,
no single Bank is allowed or capable to establish personal interest especially due to heavy
competitive market.
4o+pan! representative effect:
There are so many representatives working in the market to collect the sales price directly from
the customer of each product daily. %o merchant group, Businessman
7
Traders, Agency,
3holesalers and high 2epositor are not capable to 2eposit the money in the Bank. 2ue to this
2eposit system, they hamper it.
:igh rate of Bovern+ent sec$rit!:
(ractically, the 5overnment security likes Bond, %ecurity, 2ebenture> %avings certificate etc.
gives high rate of interest than commercial Bank. %o, all the investors are invested to utilize their
idle fund to purchase the 5overnment security due to higher rate of interest.
4redit Saes:
4ow a day, Businessperson is bound for credit sales to increase their sales in the competitive
market. 0or this reason Business organization need less working capital and Banking companies
are loosing their opportunities to invest in Business organization.
-ack of +ode+ toos and techniE$es:
%B performing activities by using backdated tools and techni$ues. It is fully far from
information technology. Though %B enough strength to play proactive role in every aspect, it
play reactive role.
-ack of proper training:
%B should be arranging ade$uate training. Though %B has its own training center, it is not
ade$uate for its employees. Because, it is not well furnished to with this modem world.
-ack of )arketing Activities:
%B does not promote itself for catering its services to the public or the Business organization
-ack of favora&e +arket i+age:
%B has a higher book value per share but market value per share is very low corresponding to
its book value.
#.1#.1% Reco++endations:
All the services offered by the bank are similar and prone to imitation by its competitors. ong
established services may cease to satisfy fully the changing needs of the customers> such product
may become increasingly uncompetitive, unprofitable and even unnecessary. 3hen all the
banking institutions are offering similar services, %B can offer differentiated service. A
significant part of the marketing effort must be devoted to the monitoring of existing services,
and where such deterioration is found, a decision must be taken on how to remedy the situation.
In essence there are two alternatives. 0irstly, to add new features to services. The product may be
updated and renovated so as to bring it bring in line with customer re$uirements. The following
may be considered.
a+ (ayment of customer"s monthly bill
b+ Bills collection agreement
c+ Tele&Banking
d+ )obile Banking
e+ 'n&line Banking
%econdly, to maintain existing services. #urrent services can be maintained despite its fault or
unpredictability and without alteration, either because the service is continuing to make a profit,
however slight, or because it is considered an important component of the company"s image,
which cannot be dispended with. %uch services may include 2eposit (ension %cheme *2(%+
)arriage 2eposit %cheme *)2%+, 2aft coe$ual and so forth.
#ustomers of %tandard Bank who come from largely middle class income&groups are likely to be
very price sensitive. %B can offer services, which have lessIno service charge.
%ervice advertising should emphasize tangible cues that will help the customers. %B may
consider using advertising to promote principally the name of organization and keep it in the
forefront of consumer"s consciousness. %B may also pursue advertising strategy aimed at
raising the general level of awareness of the range of services available without attempting to
give details of any particular item. %B can advertise its specific services either to promote and
establish new products or to maintain the success of existing ones. %B should put its advertising
effort to arouse the need in respect of a particular service. %B may also focus on one attribute of
the product, which is not emphasized in the campaigns of competitors.
%B must continually monitor its branch networks to ensure that they reflect demographic and
economic changes. Areas develop and decline or change their nature, and %B must ensure that
its branches reflect these developments.
They are dealing with huge number of accounts customers of %tandard bank are losing their
confidence day&by&day. Because they are treating their customer with poor service, lack of
profitable schemes, old banks environment and improper management. %B is not keeping pace
with the changes, which have taken place in the last few years in private banking sector. %B"s
import business has fallen in considerably. They have proper manpower but they are not utilizing
it. Its advance policy is also faulty. Top management is very much reluctant to take corrective
action in this regard.
Bank should go for modernization and they should increase their collaboration with foreign and
domestic banks. !xport and import facilities should be given due consideration. =enovation of
the old branches is of top priority if %B is to compete with the other private banks doing
business in the market.
As the %B realized a negative interest spread in 7888 and its average percentage of
interest income from loan and advances had been low consistently over the year 7888 to B;;7,
more emphasis should be placed to increase the interest income from loans and advances. In
doing so the %B should utilize its funds properly.
Interest expenses on 2eposits of %B may be tried to keep low with due regard to
balances 2eposit mix.
. The %B should introduce on&line facilities so that the %B can know its present
resources not past month or past week"s resources. By this way %B can use its funds properly.
It should maintain a separate cost accounting cell at the head office of this Bank
furnished by professional cost accounts for implementation of appropriate costing system.
. The research cell of this Bank should be strengthening with the efficient manpower by
studying the feasibility of introduction of new products, analysis of manpower productivity and
similar other research works.
In order to sustain and remain profitable, this Bank should identity and reinvests in productive
sector and terminates unproductive operationsIdivisions.
%B should establish investment priorities and develop corporate Budgets that steer
resources into those internal activities critical to strategic success. It should be involved in
channeling resources into areas where earning potentials are higher and away from areas where
they are lower.
%B should initiate responses to change under way in the industry, the economy at large,
the regulatory and political arena and other relevant areas.
%B should observe competitors closely to analyze any new action taken by them and
react competitively to that action. It can be accomplished by the following
3ays.
%B can get information about a certain competitor"s Business policies by
recruiting that company"s employees.
It can get information from people who do Business with rivals.
It can get information about other Banks from published materials and published
document.
. %B should reengineer its core Business process in order to eliminate duplicate
3ork and reduce cost.
%B should enhance its market exposure and create a favorable image because
Its market value per share is very low than its Book value.
At present people does not deprived of facilities of modern world due to its sum hindrance.
!very better have its own negative aspects. Think about transportation facilities that makers the
world so advanced. 4obody can think to stop it or avoid it. It is the part of our life. %o everybody
thinks to reduce its negative aspects rather than avoid or stop it.
%imilarly now a day in our Banking sectors exports and imports facilities are necessary elements.
In banking sectors people keeps their excess money for various kinds of necessary works. 0rom
it they will get interestIprofit. Although for our socio&cultural environment, it has some problems
government and other related sectors have to appreciate Banking sectors by providing favorable
environments and take steps to prevent and protect this problem solving of our country. If proper
steps are taken in this regard we think it will be a highly prospective edition of the Banking
sectors of Bangladesh.
'n the other hand customers are needed to their necessary goods to export or import that will be
essential for Business sectors, then they comes Bank to transaction their goods from Bank to
Bank *'ther #ountries+. Bank suggests their customers to open I# against their necessary
documents that will be valid and that will be related with Business. As for any security will be
taken Bank.
In our country, now it is the golden period of banking sectors. %o, there is a greater suitable place
to keep customer"s money and dealings their transactions for their necessary works. All new
entrance and existing documents, Bank always keep in mind this thing because it will be a highly
competitive area.
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CHAPTER
3
23
<. <Hears Annual =eport of %B.
CHAPTER
4
27
( . Assess+ent of doc$+ents $sed in foreign exchange of SB-
(.1 Export:
It is an essential part of the %tandard Bank. )ost of the private bank has their separate branch
which is known as Foreign Exchange Branch and they will only deal with foreign exchange
related work. Although %tandard Bank doesn"t have this option but they have given much
priority to this division. This division performs several activities which are given below.
(rovide I# facilities.
)onitoring exchange rate of different currencies.
0acilitates the exchange rate to other branches.
)anaging good relation with foreign correspondent.
Increase foreign correspondent.
(rovide endorsement facilities.
(rovide travelers #he$ue facilities.
Buy and sell foreign exchange.
(rovide transfer facilities.
5ive the )aster #ard facilities.
(.1.1. Doc$+entar! -etter of 4redit>4oncepts 3 T!pes:
(.1.1.@. Definition of -<4:
2ocumentary etter of credit is a conditional Bank undertaking of payment. 0or more
illustration, etter of credit is a conditional undertaking given by a Bank *Issuing Bank+ at the
re$uest of a customer *applicant+ to pay a seller *Beneficiary+ against stipulated documents
provided all other terms and conditions of the credit is complied with.
3e can understand the total procedure of a etter of #redit by the following 0low #hart.
Offer

4ontract
Acceptance

Fig$re /%.@0 Tota proced$re of a -etter of 4redit
+ssuing ,an- &d!ising ,an- .on$ir'ing ,an-
/ei'0ursing
,an-
+'porter
(&pp1icant)
Eporter
(,ene$iciary)
2egotiating
,an-
28
(.1.1.1 T!pes of Doc$+entar! -etter of 4redit:
There are various types of documentary etter of #redit.
o =evolving I#
o Irrevocable I#
o #onfirmed Irrevocable I#
o Back to Back I#
o Transferable I#
o =ed #lause I#
o 5reen #lause I#
o %tand by I#
o (erformance I#
There are various types of documentary letter of credit.
1.Revoca&e 4redit:
This type of credit can be revoked or cancel at any time without the consent of, or notice of the
beneficiary. As per Article @ *a+ of ,#(2# C;; PA revocable credit may be amended or
cancelled by the Issuing Bank at any moment and without prior notice to the BeneficiaryQ.
#.=rrevoca&e 4redit:
The Irrevocable #redit is a commonly used type of documentary credit. The #redit which cannot
be revoked, varied or changedIamended without the consent of all parties 6 buyer *Applicant+,
seller *Beneficiary+, Issuing Bank and #onfirming Bank *in case of confirmed #+.
%.4onfir+ed =rrevoca&e 4redit:
It is a credit of issuing Bank, which is opened at the re$uest of buyerIimporter upon a
sellerIexporter abroad through an advising Bank with a re$uest to add confirmation. Advising
Bank, the agentIcorrespondent of issuing Bank add their confirmation under credit line
arrangement already existing between issuing Bank and advising Bank, i.e. in addition to the
commitment of the issuing Bank the advising Bank makes its own, independent payment
commitment when it add its confirmation. *Article 8 b, ,#(2# C;;+.
(.Revoving 4redit:
A =evolving #redit is one where, under the terms and conditions thereof, the amount of the
#redit is renewed or reinstated without specific amendment to the #redit being needed.
=evolving #redit may be revocable or irrevocable. It can revolve in relation to time or value. But
credit that revolves in relation to value is not in common use.
,.Back to Back 4redit:
'ne credit backs another. It may so happen that the beneficiaryIseller of an I# is unable to
supply the goods direct as specified in the #redit as a result of which he needs to purchase the
same and make payment to another supplier by opening a second etter of #redit. In this case,
the second #redit called a PBack to Back #reditQ. These concepts involve opening of second
#redit on the strength of first #redit i.e., mother I# opened by foreign importers.
5.Transfera&e 4redit:
A transferable #redit is one, which can be transferred by the original Beneficiary to one or more
parties. In transferable #redit, the original beneficiary becomes the middleman and transferee
becomes the actual supplier of the goods. It is normally used when the first beneficiary does not
supply the merchandise himself, but is a middleman and thus wishes to transfer part, or all, of his
rights and obligations to the actual supplier*s+ as second beneficiary*s+. This type of #redit can
only be transferred once, i.e., the second beneficiary*s+ cannot transfer to a third beneficiary.
*Article 9@, ,#(2# C;;+.
7.Red 4a$se 4redit:
A red clause #redit is a credit with a special clause incorporated into it that authorizes the
advising Bank or confirming Bank to make advances to the beneficiary before presentation of
documents. The clause is incorporated at the specific re$uest of the applicant, and the wording is
dependent upon his re$uirements. It is so called because the clause was originally written in red
ink to draw attention to the uni$ue nature of this credit. It specifies the amount of the advance
that is authorized, in some instances it may be for the full amount of the credit.
8.Breen 4a$se 4redit:
A 5reen #lause #redit is a credit with a special clause incorporated into it that which not only
authorizes the advising Bank to grant pre&shipment advances but also storage cost for storing the
goods prior to shipment. It is useful in situations where shipping space is not ready available, i.e.,
some African countries. It is so called because the clause was originally written in green ink to
draw attention to the uni$ue nature of this #redit.
(.1.1.# Different Banks of a Doc$+entar! 4redit:
1. =ss$ing Bank:
The Bank, which issues the etter of #redit, is known as Issuing Bank.
#. Advising Bank:
The I# issuing Bank sends I# to its correspondent Bank in the Beneficiary"s country with
re$uest to advise the same to the Beneficiary after authentication of the #redit.
%. 6egotiating Bank:
The correspondent Bank which negotiates the documents and pay the document value to the
Beneficiary provided that all credit terms are fully complied with.
(. Rei+&$rsing Bank:
As per instruction of I# issuing Bank, the correspondent Bank, which debits the 4ostro account
of I# issuing Bank and make payment to negotiating Bank or any other Bank.
,. 4onfir+ing Bank:
The #orrespondent Bank, which confirms the I# of the issuing Bank and advises the same to
beneficiary after adding its confirmation
(.1.1.% Operationa Exchange Rate:
Exchange rate.
This is the rate at which two national currencies are exchanged. The twin forces of market
demand and supply of foreign currency determine the exchange rate. The demand for foreign
exchange arises primarily in the course of importing goods and services from abroad and making
foreign investments and loans. The supply of foreign exchanges arises in the course of exporting
goods and services and receiving foreign investments and loans.
Seing and B$!ing Rates:
A foreign exchange transaction is either a sale or purchase transaction. That means a
transaction could be either a sale transaction in which case conversion of domestic currency
into foreign currency takes place, or purchase transaction in which case conversion of foreign
currency into domestic currency takes place. The Bank would, therefore, $uote two different
rates of exchange.
Seing rate i.e., a rate of exchange at which it would put through a %ale transaction, and
B$!ing rate i.e., a rate of exchange at which it would put through a purchase transaction.
3e can understand more conveniently the above factor with the following flowchart.

(.1.#. =+port *roced$res:
(.1.#.1 Doc$+entar! ReE$ire+ents for Opening of -<4 &! the =+porter:
The importer must submit the following papers along with I# application before opening a
etter of #redit *I#+.
i+ ?alid Import =egistration #ertificate *I=#+ (commercial/industrial)
ii+ Taxpayers Identification 4umber *TI4+I )embership #ertificate
iii+ ?AT =egistration #ertificate
iv+ (erformaIIndent Invoice duly accepted by the importer.
iv+ Insurance #over 4ote with )oney =eceipt covering value of goods to be imported plus
7; *Ten+ percent above.
v+ I)( forms duly signed by the importer.
vi+ #A forms duly signed by the importer and incorporating 4ew IT# number of at least
D *six+ digits under the Farmonized %ystem as given in the Import Trade #ontrol
%chedule 78@@.
vii+ #redit report of the supplier I country of supplier.
viii+ (oet import finance *re$uired or not+
ix+ )argin for opening I#
Ec3ange /ates
Se11ing /ates ,uying /ates
%4%4 ,4.4 %4%4 .1ean #4D4 Sig3t
Eport
#4D4
%rans$er
'igure +,.-. / 0lowchart5 Ec3ange
/ates
31
x+ Authority Isanction
xi+ 'ther documentsI papers etc.
Bank .i s$pp! the foo.ing papers:
i+ I# application form *(rinted format+
ii+ #A 0orm
iii+ I)( 0orm
iv+ #harge documents
(.1.#.(.# Appication for iss$ing of a -<4:
I# application form represents an agreement between the importer and the Bank to be stamped
under, %tamp Act.
The importer would apply on Bank"s standard form to his Bank for issuing a letter of credit. In
addition to recording the full details of the proposed credit, the application also serves as an
agreement between the Bank and the buyer. The credit application must be clear and precise and
generally included the following items.
0ull name and address of the supplier, manufacturer or beneficiary *including his Bank+.
'pener"s name and address *including Import =egistration #ertificate 4o. etc.+
The total amount of credit asked for and whether the credit is a specific credit or a
revolving letter of credit and amount of the currency in which the documents are to be
drawn.
The type of credit to be opened, i.e. whether revocable or irrevocable, confirmed or
unconfirmed, transferable etc.
Tenor of draft *%ightI,sance+
Brief description of goods including $uantity, $uality, unit price and F.%. #ode.
I# value for ,%T, 2), 5B( etc.
The terms of sale, i.e. whether the contract is on #I0, #=0, 0'B basis.
'rigin of goods, (lace of shipment and destination.
)ode of shipment *%ea, Air, TruckI=ail etc.+
ast date of shipment, 4egotiationIpresentation period *not over <; days+
Insurance cover note number and name of the company *the risks to be covered under
the policy and the amount of insurance+.
The details of the mode of shipment whether part shipment or transshipment will be
allowable or not.
)ode of advising *)ailI%3I0TI#ourier %ervice+
#A number
(re&shipment inspection
'ther conditions *if any+
2o$ching *roced$re /at the ti+e of opening a -<40:
a0 )argin<4o++ission 3 4harges:
2r. #ustomersI ImporterSs AIc
#r. )arginal 2eposit AIc I# 0oreign *#ash+
#r. Income AIc. #ommission on I# 0oreign
#r. ?AT AIc
#r. Income AIc *%3I0T+
#r. %tationery AIc
#r. %tamp in Fand AIc
#r. )iscellaneous Income *(%I if any+
&0 4reation of -<4 ia&iit!:
2r. #ustomers iability under I# *0oreign+
#r. Acceptance iability under I# *0oreign+
*Amount to be rounded off to the nearest thousand Taka+
(.1.#.(.% A+end+ent or )odification of a -<4:
'nce a letter of credit is opened, there are situations and reasons, may be within or beyond the
control of either parties, when original terms and conditions need to be amended. These
amendments may be changing of description of goods or enhancement or reduction in the value
of etter of #redit or it may be the extension of time for shipment and negotiation etc. In normal
business, the Banks do not discourage the amendment to the etter of #redit provided the
amendment is within the validity of the license and other regulations in force are not violated.
Before doing any amendment, written re$uest is necessary from the importer who generally
makes this re$uest after obtaining consent of the supplier. %uch amendment will, of course, be
effective if all the parties to I#, namely I# opening Bank, the advising Bank and the
beneficiary, agree to it.
Article 8 *d+ of the ,niform #ustoms and (ractice for 2ocumentary #redit *(ublication C;;+ has
very clearly advised that irrevocable credits.
P#an neither be amended or cancelled without the agreement of the Issuing Bank and
#onfirming Bank, if any, and the beneficiaryQ
These amendments must be advised by the opening Bank to the beneficiary through the advising
or confirming Bank before the shipment is made.
The Branch may allow amendments to the I#s only upon re$uests of the I# applicants that do
not violate foreign exchange regulations and import control regulations. 4ecessary charges
andIor margin *where I# value in increased by subse$uent amendments+ are also to be
realizedIrecovered from the customer before amending the I#s.
2o$ching *roced$re
2r. #ustomerI (arty Account
#r. )arginal 2eposit AIc on I# *#ash+ (if the L/C value is increased)
#r. Income AIc. #ommission on I# 0oreign
#r. Income AIc. %3I0TI(ostal charge =ecovered
(.1.#.(.( Ship+ent 2aidit! 3 Expir!:
All I#s must specify shipment validity as per terms of the (IInvoice or indent or I#
application. Fowever, shipment validity under any circumstances shall not exceed 8 *nine+
months from the date of issuance of #A0 or registration of #A0 with Bangladesh Bank,
except capital machinery and spare parts, shipment of which shall be made within 7E *seventeen+
months. All I#s must stipulate an expiry date and a place for presentation of documents for
paymentI acceptance.
2o$ching *roced$re
2r. #ustomer"s AIc
#r. Income AIc. #ommission on I# *confirmed+
(.1.#.(., Stip$ation of Rei+&$rse+ent ter+s and iss$ance of Rei+&$rse+ent
A$thori9ation:
The branch shall stipulate reimbursement term in the I#s mentioning name of the =eimbursing
Bank and 4ostro Account 4umber *preferably in the country of the currency denominated in the
I#s so as to avoid possible loss due to conversion of differential currencies+. The branch shall
issue and send =eimbursement Authorization to the =eimbursing Bank immediately after
opening of the I#s.
(.1.#.(.5 4anceation of -etter of 4redit:
An Irrecoverable I# cannot cancel without the agreement of the beneficiary and the confirming
Bank, if any. The branch, at the re$uest of the importer, may approach the I# advising Bank for
cancellation of the I# and such cancellation will only be effective upon consent of the
beneficiary advised to the branch through the I# advising Bank. Fowever, the branch may
cancel the .# without the consent to the beneficiary, advising Bank and confirming Bank, if
any, if the I# expires and the branch receives no shipping documents within 7C days of expiry
of the I#. The branch should send a message to the concerned Bank advising such cancellation
and closure of I# file due to expiry of the same. The branch will then cancel the
=eimbursement Authorization, which has been provided to the =eimbursing Bank while opening
the I#. The branch will reverse I# contra liabilities, refund margin and recover charges from
the I# applicant as per schedule of charges.
Doc$+ents sent to *S= 4o+pan!
Importer sends following documents along with application to (%I #ompany.
o I# copy
o (hotocopy of insurance cover note
o #opy of indentIpro&forma invoice
o (%I information and other relevant papers.
(.1.#.(.7 Ship+ent of 4onsign+ent and -odg+ent of Doc$+ents:
There may be two types of exporter.
i+ )erchantITrade exporter
ii+ )anufacturer !xporter
If the supplier is a merchant exporter, he will immediately start packing and shipping the goods.
If he is a manufacturer exporter, he will start manufacturing the item. In either case, he will ship
the goods when ready and obtain full set of bill of lading etc. from the carrier company and
submit the same to the negotiating Bank along with other documents that is called for in the
credit.
The shipping documents usually obtained are.
Bill of ading or Air #onsignment 4ote or (ost (arcel =eceipt or Truck
=eceipt
Bill of !xchange
#ommercial Invoice
#ertificate of origin
(acking list
3eight certificate
#onsular Invoice where necessary
A copy of declaration of shipment made to the Insurance company *to be submitted with
original shipping documents+
(re&shipment inspection certificate from internationally reputed surveyor.
Analysis certificate where specification of commodity is given.
(.1.#.(.8 Discrepancies in Shipping Doc$+ents:
The discrepancies found in the shipping documents presented under I# vary from document to
document and from shipment to shipment.
The discrepancies usually found in shipping documents are listed below, but this is not an
exhaustive or even complete list, as the discrepancies vary from document to document, though
apparently discrepancies do look alike. Their impact may not be the same keeping in view the
relationship and importance of each shipping document with other documents asked for by the
I# opening Bank.
The $s$a discrepancies fo$nd are:
I# expired>
ate shipment>
ate presentation>
Amount drawn in excess of the letter of credit>
Bill of !xchange not properly drawn>
2escription of goods differs>
Interest clause in missing in bill of exchange, where stipulated>
Bill of ading or Airway Bill state>
Bill of ading Q#lauseQ 0ull set *of BI not submitted or BI not properly signed
and submitted>
Bill of ading is not manually signed by the master or an authorized agent of the
%hipping company.
Bill of ading indicates that goods are carried on deck>
Bill of ading as issued under a charter party>
!nough number of Bill of ading not submitted as re$uired by etter of #redit>
Invoice amount differs from that mentioned in the bill of exchange.
Invoice is not certified as correctIsigned by the exporter>
The marking in invoice differ from that appearing on the Bill of ading>
Insurance cover not as per terms of I#>
Insurance cover obtained after the Bill of ading or Airway bill date>
Insurance risks covered do not agree with the re$uirements of the #redit>
Insurance policy is not in negotiable form or not endorsed in Bank>
Insurance does not cover the entire voyage>
Insurance policy is not properly stamped>
4egotiation under etter of #redit restricted>
The documents tendered are not issued by the authority specified in the etter of
#redit>
(acking list and #ertificate of analysis are not as per the terms of I#.
2ocuments not properly endorsed in favour of the Bank>
0ull shipment not effected, and part&shipment prohibited>
5ross weight and net weight shown in different documents differ>
%ome of the documents re$uired by I# not submitted>
2ocuments inade$uately stamped>
%hipment made from and to ports other than those permitted in the relevant I#.
4o indication of Q0reight paidQ or Q 0reight payable at destinationQ and
Tenor of draft wrong>
(.1.#.(.; 4hecking of =+port Doc$+ents:
Import documents are checked thoroughly and some specific points receive crucial attention that
delineated below.
The -etter of Trans+itta
7. It must be addressed to I# issuing Bank
B. It has ac current date.
<. It relates to current 2ocumentary number credit of the Bank.
9. The documents enumerated are attached.
C. The value of documents and the value mentioned in the cover letter are same etc.
The Doc$+entar! 4redit
7. It is the correct referenced 2ocumentary #redit
B. It is still valid that nit not expired or cancelled.
<. Available balance in tit is sufficient to cover value of drawing etc.
Bi of Exchange
7. The draft bears the correct I# number.
B. The name of the drawer corresponds with the name of the beneficiary
<. It is drawn on the correct drawer indicated in the I#
9. Amount in words agrees with the amount in figures.
C. The beneficiary as duly signed the draft.
D. The tenor is as re$uired by the credit.
E. The value of draft and the value of invoice are identical.
4o++ercia =nvoice.
7. Beneficiary as stated in documentary credit issues it.
B. The description of gods. ?alue and unit price matches that stated in
credit as regards to the amount and currency.
<. ?alue of invoice does not exceed the available balance of the credit
9. The invoice is signed as re$uired in the credit.
C. The correct number of original copies is presented.
D. The terms of delivery match with the terms of credit.
E. In case of partial shipment, the invoice amount corresponds
(roportionally to the dispatched $uantity etc
)arine Bi of -ading
The shipping company must issue it.
0ull sets of originals issued and presented.
The consigneeSs name and address are correct as mentioned in the credit.
The bill of lading bears issuing date, duly signed by the issuer and the name of
ship papers.
The port of departure and port of destination are correct.
The bill of lading bears the Uon board shippedU notation.
It is correctly marked 0reight prepaid of 0reight to collect.
The goods are consigned as stipulated in the credit
The bill of ading must be properly endorsed etc.
Air.a! Bi
The consigneeSs name and address and the airport of departure and destination are
stated in the Airway bill are consistent and in agreement with the terms of credit.
The documents indicated the name of the carrier.
The issuer is the carrier or a named agent of the named carrier.
The airway bill indicates the actual flight date and flight number
The documents are signed by the courier.
The consigneeSs name and address and notify partySs name address are correct.
It is correctly marked U0reight prepaidU of U0reight collectU etc.
The consignorSs copy is being presented.
4ertificate of Origin
The country of origin of the goods as stated in the certificate agrees
with the terms of the credit.
The certificate has been signed as re$uired by the credit.
The certificate has been authenticated by the stipulated authorities.
*acking -ist
It is uni$ue a document and not combined with any other documents.
The list contains all necessary information specially concerning the packing units.
The data on it is consistent with that of the other documents
After scrutiny of import document if the above&mentioned points are found in order ad drawn as
per credit terms, AI2 branch shall make lodgment of documents.
*re>ship+ent inspection:
To ensure the $ualities of imported goods and to become sure that imported goods are not
radioactive pre&shipment inspection are performed by some government approved (%I #ompany.
0or different block different (%I #ompany works.
Bock A. IT%&Interlake Testing %ervice.
#ountry includes #hina and !urope.
Bock B . Inspectorate 5riffith.
#ountry includes India, %pelunker, Bhutan, 4epal, )yanmar, )alaysia, %ingapore, Thailand and
south !ast Asia.
Bock 4 . Bureau ?arieties International
#ountry includes, Indonesia :apan, Aorea, Taiwan, Indonesia, (akistan, Australia, and 4ew
Gealand, ,A%, )eddle !ast, Africa and others.
(%I not re$uired for items such items include 2yes1 #apital machinery1 (oultry feed, 2rug and
medicine *They re$uire manufacture and expiry date+ 0ruits, #omputer accessories, %urgical
e$uipment, 0ood items /They re$uire (hytosanitery #ertificate that is provided by chamber of
commerce and industry of exported country+.
(.1.#.(.1@ -odg+ent of =+port Doc$+ents:
3hile lodgment of the import bills under #ash I#, AI2 branch shall reverse the liability
vouchers passed at the time of opening I#s.
a0 odgment ?oucher to be passed
2ebit . (A2 Account *(ayment against 2ocument AI#+
#redit. (B 5eneral AI# F'II2
Income Account *%3I0T+
2ocuments handling #harge
&0 =eversal of the liability ?ouchers
2ebit V Acceptance iability under 0oreign I#
#redit V #ustomer iability under 0oreign I#
c0 Ad-ustment of (A2 AI#
i+ 2ebit . )argin AIc
#redit . (A2 AI#
ii+ 2ebit . #ustomerSs AI#I I)IAT=
#redit . (A2 AI# *with interest if applicable+
Transfer of )argin to *AD acco$nt
After passing the above lodgment voucher, I# margin is also to be transferred to the (A2
Account.
The following vouchers are to be passed
2ebit . )arginal 2eposit AIc I# *0oreign+
#redit. (A2 Account
(.1.#.(.11 Retire+ent of =+port Doc$+ents:
AI2 branch shall issue and intimation letter to the customer to retire the documents on payment
of BankSs dues in full. =eceiving BankSs dues the branch shall pass the following entry.
a+ 0or application of up to date interest
2ebit . (A2 Account
#redit . Income AI# *Interest on (A2+
b+ =etirement ?oucher
2ebit . ImporterSs #urrent AI#
#redit . (A2 AI# along with up to date interest
The documents will be delivered to the import of his authorized representative with due
endorsement on the back of the bill of !xchange.
(.1.#.(.1# 4earance of Boods &! the Bank:
%ub-ect to prior arrangements, the Bank clears the goods from the port and stores the goods in
BankSs go down. Bank clears the goods by the BankSs approved #/0 agent and through
#/0 cell of the Bank. The branch must issue a very clear instruction as to the mode of
transport for sending goods by road or road or mode through the nominated #/0 agent
for storage. After clearance of the goods, #/0 agent shall arrange delivery of the goods
to the branch authorized representative and branch stores the goods in the BankSs go
down as per sanction terms.
(.1.#.(.1% Taxes 3 D$ties at =+port Stages:
After shipment of goods the beneficiaryIsupplier prepare a full set of documents as per Ic terms
and conditions and sent it to the importer"s I# issuing Bank through beneficiary"s Bank. 3hen
the documents came to I# issuing Bank, the Banker lodged the documents and handed over the
documents to the Importer in payment of total amount of bill value and other charges. Then the
importers unloaded or take delivery the goods from %ea (ortIAirport with the help of their #/ 0
agents. 2uring the period the agents of importer have to pay Import 2uty, ?AT, AIT etc. at the
time of taking deliveryIunloaded of goods.
%ome of the imported goods are totally tax&free. Tax, ?AT etc. charges are imposed at different
rate on assessment value considering the present market of merchandise of imported items.
Tax&free items are as follows. #apital machinery, #omputer accessories, (oultry feeds etc.
5enerally, Import 2uty may charge CM to BCM at import stages and in some cases it may be
maximum of 7;;M and B;;M also.
The importers have to pay import duty to the customs authority at the time of unloading of goods
from sea port, airport, I#2 Aamlapur, Benapole, Burimari etc. The import duty and other
charges are imposed on the basis of imported merchandise under F.%. code.
4ame )inimum )edian )aximum
2,TH CM 7BM BCM
?AT 7CM 7CM 7CM
AIT <M <M <M
I2%# 9M 9M 9M
In case of luxurious items, the import duty may be imposed W7;;M, WB;;M by charging
supplementary duty with actual duty e.g. (rivate #ar.
(.#.@ Export B$siness:
iterally, by the export we mean out earring of anything from one country to another. !xport as
sending of visible things outside the country for sale. !xport trade plays a vital role in the
development process of an economy with the export earning we met out import.
The total export business handled by %B amounted to the TA B9E8C.DC million as of 2ecember
<7, B;7;. !xport items handled by the Bank in clouded -ute goods, readymade garments,
handicraft, shrimps etc.
!xport of frozen foods or mainly shrimps has developed in recent years as an important export
activity in Bangladesh. The sector obviously has a promise. It was the third largest foreign
currency earner for the country in B;;7&B;;B fiscal years but earning in that year was below that
of the previous year. This pointed to the urgency of tanking steps to ensure steady higher earning
from the sector. The country"s highest foreign currency earner, the =eady&)ade 5arments
*=)5+ industry, faced a similar situation of enforcing labor standards by getting rids of child
workers. Timely steps in this direction saved the =)5 sector from serious adverse experiences.
In the same manner, producers and exporters in the frozen food, eather industry sector need to
understand of importers and work sincerely to fulfill them as a way of ensuring the viability of
their business.
A rich new vein of export earnings for the country can open up at a time when there exists much
eagerness for understandable reasons to boost the foreign currency reserve. This is possible
through the development of an export&oriented silk industry. Bangladesh has been on the world
map as a silk producing country for a long time. It"s production of natural silk industry in order
part of the Indian subcontinent. But India is among the top five countries of the world in respect
of silk production whereas Bangladesh is a very tiny player in the world silk industry, not with
standing the fact that it possesses hospitable natural conditions for the establishment of a large
silk industry with a strong export& oriented component.
EF*ORT *RO4EDDRE
/Fo. 4hart0
Hes
4o
4o
4o
Hes
Hes
Hes
4o
4o

63at is Eport7
63o is an Eporter7
Procure'ent o$ Eport #rder
.erti$ication o$ Ep4 (or'
14 8ien Mar-ing on 89.
24 #01ation o$ securities
Dr4 P4.4&9.
S3ip'ent o$ goods 0y eporter
&rrange s3ip'ent o$ goods
t3roug3 ,an-s appro!ed . : (
&gent
Preparation o$ Eport docu'ents as per 89.
Scrutiny o$ Docu'ents
63et3er pre;s3ip'ent credit
$aci1ities <i11 0e a11o<ed
&re t3e docu'ents in order7
&s- Eporter to
re'o!e discrepancies
&re discrepancies
re'o!ed7
+n$or' opening ,an-
a0out discrepancies
63et3er t3ey a11o<ed
negotiation7
2egotiate Docu'ents
Dr4 (,P &9.
.r4 Eporters &9.
Dispatc3 docs4 6it3
/9+
.3ec- <3et3er your &9. <it3
(9,an- 3as 0een credited
Send t3e docu'ents
$or co11ection <it3 P9+
Dr4 (D,8
=as it 0een credited7
/etire (,P
Send re'inders to paying ,an-
(D,
Dr4 (D,.
.r4 (D,8
Dr. 0ostro
A1C
Cr. 'BP
4*
(.#.# -ega ReE$ire+ents:
Although payment aspect of exports in Bangladesh Bank"s concern, physical aspect is controlled
by the !xport (olicy 'rder *!('+ announced by the )inistry of #ommerce. Bangladesh Bank
has set out elaborate procedure and laid down detailed rules and regulations concerning exports
and export payments. All exports, to which the re$uirement of declaration applies, must be
declared on the !xp. form. The branch should before certifying any export form, consider and
take notices of the following.
i+ The intended exporter shall have valid export =egistration #ertificate *!=#+.
ii+ (ayment for goods exported from Bangladesh should be received though the branch in
freely convertible currency or in Taka forms a non&resident Taka account of a branch or a
#orrespondent abroad.
iii+ #ommission, brokerage and other trade charges are admissible only up to a maximum of
CM of the value of goods. The charges beyond CM may be admissible sub-ect to prior
approval of Bangladesh Bank.
iv+ In order to avoid any loss of foreign exchange to the country, the branch should see that
Arrangements have been made for realization of export proceeds within prescribed
period of 9 *four+ months.
Arrangements have been made for receipt of little to goods like Bill of lading, Airway
Bill, etc. by the branch on shipment of goods.
The !X( form is signed either by the exporter or one holding valid legal power of
attorney form exporter and the terms of the power of attorney are such that both the
exporter and the attorney be held responsible -ointly and severally for realization of
export proceeds.
Bonfires of the buyersI consignees abroad and their credentials.
v0 The branch and its officials certifying the export forms as well as exporter render
themselves liable to punitive action under the 0!= Act for delay in repatriation or non&
realization of export proceeds.
vi0 In respect of export of goods by land route or by sea, the Bill of lading, =ailway =eceipt
and documents of title to cargo should be drawn only to the order of (ubali Bank limited.
vii0 In respect of export of goods by air, the Airway Bill and other document of title to cargo
should be drawn to the order of a Bank in the country of import nominated by the branch.
(.#.% Opening of Back>to>Back -<4:
The garment industry in Bangladesh is allowed to import raw materialsIfabrics and accessories
free of duty under bonded warehouse arrangements. 'n receipt of !xport I# 5arments and
specialized Textile unit under bonded warehouse system is allowed to open Back to Back I#
for import up to maximum ECM of net 0'B value of export I#. for computation of 0'B value,
freight charges, insurance and commission involved in shipment of merchandise under the export
I# are to be deducted.
The export I# which the Bangladesh exporter has received from abroad is commonly refereed
to as )aster !xport I# and the second I# issued by the Bank in favor of textile mills is
referred to as Back&to&Back I#. The export I# is separate transactions and are independent to
each other. %ince the payment of Back to Back I# is made out of export proceeds, the Back to
Back I# is to be established on basis covering usance period of not more than 7@; days and
most of the time 8; days.
The import documents are to be delivered to the customer against acceptance and execution of
trust receipt. The customer clears the goods from the port, manufactures the garments and makes
the export. !xport documents are submitted to the Bank for negotiation and collection of
proceeds. The exporter is only entitled to receive his #) portion *!xport bill value minus Import
obligation+ and Banks pay the #) portion to customer by purchasing the amount. After
realization of export proceeds the import obligation under Back&to&Back I# is being set aside
for payment on maturity date out of export proceeds.
Before opening of any Back&to&Back I# relevant documents should be scrutinized properly by
AI2 branch should ensure that"s areas follows
The export I# issuing Bank must be a reputed one
The export I# is a sight I# and freely negotiable
In case of terms of delivery 0'B is preferable 0or #/0. freight #ertificate is to be
obtained.
=eimbursement instruction of export I# must be very clear.
1uantity of merchandise with price must clearly be mentioned
(ort of destination must be clearly mentioned.
%hipment period shall not be insufficient.
I# must bear the clause that it is transferable.
Beneficiary and transferor must be identical.
Transfer must be authenticated by advising Bank.
The export I# is to be authenticated by the advising Bank in Bangladesh.
(.#.% *a!+ent of Back>To>Back -<4 against reai9ed Export *roceeds:
AI2 branch is to retain or set aside the amount of import obligation out of export proceeds to
make payment of Back to Back I# obligation on maturity date. Therefore, AI2 branch only
negotiate the #) portion that is the difference amount *value of export bill minus amount of
import obligation+ as admissible as per rule and pay the proceeds to customer in Bangladesh
taka.
At the time of (ayment of BB I# branch passes following voucher in this regard &
2ebit. )argin I (A2 !xport AIc
#redit. F'II2 *for 0oreign I# +
or, (.'.I2.2. AIc *for local I#+
%3I0T I(ostage #harges
#omm. for (.'.I2.2. charges
An IB#A is to be sent to Fead 'ffice in case of foreign I#, I2 mentioning the detail particulars
the transaction.
The amount of import obligation is to be set aside by the branch from the export proceeds for
payment on maturity date of payment. After realization of export precede AI2 branch is to pass
the following vouchers
2ebit . (B 5eneral AI# F'II2
#redit . 0B( AI#
*#onversion rate will be same as applied at the time of 0B(+
#redit . )argin 2eposit I# 0oreign AI#
*)id value national rate will be applied+
#redit . #ustomer AI#
*(revailing '2 sight export bill buying rate will be applied+
#redit . #ustomers 0# =etention AI#
*)id value notional rate will be applied.+
#redit . !xport #ommission AI#
(.#.( -odg+ent of =+port Bi $nder Back>To>Back -<4:
AI2 branch shall make proper scouting and examination of documents after receiving of import
documents under Bank&to&Bank I#. If the documents are found in order branch shall make
lodgment of the same.
=everse of I# liability is to be made as under
2ebit . Acceptance iability under 0oreign I#
#redit . #ustomer iability under 0oreign I#
%ince the I# is being opened on usance basis <;ID;I8;I7@; days (A2 account must not to be
created. 0ollowing vouchers are to be passed by the AI2 branch for lodgment of documents
under Back&to&Back I#
2ebit . #ustomerSs Acceptance under I#
#redit . BankSs Acceptance under I#
4o fund in foreign currency shall be purchased by AI2 branch under Back&to&Back I# the
payment under Back&to&Back I# will be made on maturity date out of export proceeds in due
course.
(.%.@ RE)=TTA64E:
(.%.@ Foreign Re+ittance:
#onvertibility of Taka in current account transactions symbolized a turning point in the countrySs
exchange management and exchange rate system. 4ow the operation of foreign currency
accounts has been more liberalized. 0unds from these accounts are freely remittable to any
country according to the needs of AIc holders.
Authorized 2ealer remittance means purchase and sale of freely convertible 0oreign #urrencies
as permissible by the rules and regulations of !xchange #ontrol Authority of Bangladesh Bank.
=emittance takes place in two types.
i+ Inward remittance
ii+ 'utward remittance
(.%.1 =n.ard Re+ittance:
The term UInward =emittanceU includes not only remittances by TT, )T, 2raft etc. but also
purchases of bills and traveler"s che$ues.
5enerally, Inward remittance comprises.
a+ =emittance received by 2rafts
b+ =emittance received by mail transfer
c+ =emittance received by telegraphic transfer
d+ (urchase of bills / travelers che$ues
=emittance e$uivalent to ,%2 B,;;; and above should be reported on U0orm & #U therefore, after
receipt of Inward remittance of ,%2 B,;;; or above or e$uivalent, the AI2 Branches, before
disbursement of the same shall obtain declaration from the beneficiary in a prescribed form
U0orm #U.
But declaration in P0orm&#Q will not be re$uired by the beneficiary against any remittance sent
by Bangladesh national working abroad which meant for family maintenance. P0orm&#Q is
re$uired when remittance comes from abroad in the name of 0irms, #ompanies, and 45'"s etc.
=emittance received against export should be certified and reported on !X( 0orms, In case of
remittance received in advance for exports, the AI2 should obtain a signed declaration from the
beneficiary on the back of the Advance =eceipt ?oucher certifying the purpose of remittance.
It may be mentioned here that Inward =emittance received through 22I)TITTIT# should be
reported on U0orm&#U. =emittance received against exports should be certified and reported on
!X( 0orm.
There are three types of such accounts.
a+ 0# accounts
b+ =esident 0oreign #urrency 2eposit Account
c+ 4on&resident 0oreign #urrency 2eposit Account
The Bangladesh 4ations working abroad may maintain 0.#. Account / brought 0oreign
#urrency at the time of their return to Bangladesh. These accounts are termed as =esident
0oreign #urrency 2eposits AIc.
'ne person can bring into Bangladesh for ,%2 <,;;;I& or above has been duly declared by them
to the custom on 0orm 0): at the time of arrival can be credited to 0.# AIc or be encashed in
Bangladesh Taka within <; days of arrival * 0.!. circular 4o.;C dated ;9.;B.;<+.
(.%.# O$t.ard Re+ittance:
=emittance from our country to foreign countries is called outward foreign remittance. The
Authorized 2ealer on behalf of Bangladesh Bank approves outward remittance. 'nly a few
remittances of special nature re$uire Bangladesh BankSs prior approval.
Any person who wishes to purchase foreign exchange must lodge an application for the purpose
on a prescribed 0orm with the authorized 2ealer Branch. There are two types of application
forms for outward remittances & UI)( 0ormU and UTI) 0ormU.
a+ The I)( form is designed to cover remittances for payment of import obligation.
b+ TI) form is designed to cover all other types of remittances other than Imports.
'utward remittance may be made for following purposes.
a+ Travel
b+ )edical Treatment
c+ !ducational purpose
d+ Attending seminar etc.
e+ Balance amount of 0,#. AIc
f+ (rofit of foreign companies
g+ Technical assistance
h+ 4ew exporters up to ,%2 D,;;;I& for business promotion
i+ 0.#. remittance can be made for fare, exhibition from !xport =etention 1uota.
'utward remittance in favor of beneficiaries outside Bangladesh may be made in any of
the following manners.
a+ By issuing 2emand 2raft
b+ By issuing )ail Transfer
c+ By issuing Telegraphic Transfer
!xcluding payment of import obligation some commercial remittances may take place in
the form or 22I)TITT for under noted cases.
i+ =emittance or 2ividend to non&resident shareholders
ii+ =emittance of profit of foreign firms and companies.
iii+ =emittance for import of Books and :ournals
iv+ =emittance of pre&shipment inspection fees etc.
v+ =emittance for issuance of Bank guaranteeIperformance Bond etc.
'riginal copies of all I)( 0orms, TI) 0orms covering remittance effected by AI2 Branch must
be submitted to Bangladesh Bank along with the appropriate return.
2o$ching proced$re:
Sae of cash F4 notes:
3hen cash 0oreign #urrency notes are being sold by AI2 branch to customer &
2ebit . #ustomerSs AIc
#redit . 0# #ash in Fand AIc
*$rchase of cash F4 6otes:
3hen cash 0oreign #urrency notes are purchased by the AI2 branch the entry will be
2ebit . 0# cash in hand AIc
#redit . #ustomerSs AIc
(.%.% Receipt of Taka Draft iss$ed &! different Exchanges and pa!+ent thereof:
The commercial Banks in Bangladesh conclude Taka 2rawing Arrangements with different
!xchange #ompanies sub-ect to prior approval of Bangladesh Bank. The !xchange #ompanies
remit cover of their drawings in ,% 2ollar. The Bank purchases such ,% 2ollar and credits the
Taka proceeds to the Taka account of the !xchange #ompanies. The 2rafts are being paid by
debit to the 4=T AIc of the !xchange #ompanies provided the instruments are found otherwise
in order.
(ubali Bank imited concludes Taka 2rawing Arrangements with different !xchanges
#ompanies. The Bangladesh 4ations of different status working abroad send foreign currency
through %B with the help of !xchange #ompanies.
(.(.@*erfor+ance Appraisa and Feed&ack:
The %B follows closed appraisal system and appraisal in mainly done for the use of promote,
disciplinary action and to control human resources. (erformance feedback is almost
absent in %B. 4o systematic culture has yet been developed for performance
feedback.
9.9.7 S.ot Ana!sis:
%trength of %B
Transparent / $uick decision making
!fficient team of performers
%atisfied customer
Internal #ontrol
%killed risk management
2iversification
3eakness of %B
#omparative slow than other commercial bank in service / (rofit
:ob satisfaction of employees are not satisfactory
'nline services are not available for all branches.
Threat for %B
5lobal recession
'pportunity for %B
Bank has <E7 Branches which is highest in private commercial bank
It has an opportunity to diversify its business.

(.(.# Ratio Ana!sis:
4$rrent Ratio:
#urrent ratio is widely used measure for evaluating a company"s li$uidity and %hort term debt
paying ability.
Assets t$rnover:
Assets turnover ratio indicates to the capability of the company"s to create sales using the asset
appropriately.
Ret$rn on Asset:
=eturn on asset compute the success of a company by using the advantage to create to get self&
governing of the financing of those assets.
6et *rofit +argin:
The profit margin tells you how much profit a company makes for every Tk. 7 it generates in
revenue.
Ret$rn on eE$it!:
=eturn on common stock ration indicates the amount of which the company is capable to
exchange in service income into an after tax income that finally can be maintain by the investor.
(.,. Sched$e of 4harges
Hou will find here the %chedule of #harges for all our products and services available to you as
an Individual, %)! or #orporate #ustomer.
0oreign !xchange *Import, !xport / =emittance #hart+.
CHAPTER
5
54
,.Foreign Exchange and Foreign Trade: *ro&e+s 3 *rospects
,.1 Export And =+port:
7. #hambers of commerce may be permit the sub&section or any of the
conditions of the .# issuing bank. %o the exporter may not export the goods
to the importer.
B. %ome profitable goods are prohibited.
<. %ome rules and regulations of government work as barrier for the free flow of
remittance, export and import of profitable goods.
9. ,nholy intervention of the superior member of various sectors.
C. %ome foreign buyers ask for discount showing the reason that $uality of goods
has not been maintained.
D. =ate of very competitive.
E. ,ntimely shipment due to lack of backward linkage.
@. abor problem causes huge problem for the bank.
8. (roprietors do not pay wages to the labor which results in dissatisfaction
though they receive the investment from the bank.
7;. 3T' imposes un-ust rules on the transaction system.
77. ,neasiness exists due to handling new IT system.
7B. 2iscontinuity of same type of transaction which occurs in infre$uency of
work resulting in slow dynamics of work.
7<. 2elay payment in export.
79. 2elay or cancelled shipment.
7C. Bonded warehouse restricts the sell of export $uality products in the local
market rather letting it to rot which protocol is not suitable for our economy.
7D. Technical problems reduce the performance of the branch and extend the span
of time resulting in loss *financial+ and providing less service to both the bank
and customers.
7E. !nvironmental problem also causes slow pace.
7@. =estrictions imposed for sometimes on new investment due to the sudden rise
of assets of the Bank.
78. =estrictions imposed by the Indian govt. on export of food items of
Bangladesh, in which %B has a good share, led to decline in business growth
from April to August and it went down to B;M.
B;. 3eak monitoring s$uad for =)5 sector.
B7. 2iscretionary power for I# and )(I is not same.
BB. %ome faults and irregularities exist in the A2 branches.
B<. A2 branches have to deal the I# of the non&A2 branches.
B9. 0all in product price in the market than the price at the of order causes loss.
,.# Re+ittance:
The following are the problems.
7. All types of %3I!T massages are handled by a single 'perator instead of
authorized officials.
B. %wift operators are transferred Ichanged without proper substitute.
<. (# #onnect at branches sometimes become inoperative due to inept handling
by the operator.
9. Branches do not maintain security password properly.
C. Branches are not taking archive, backup of their massage.
D. Branches do not log in timely to receive message from %3!T0T in the server.
E. %ome Branches do not send their message in standard formats.
@. Branches do not show their actual income from %3I0T in the statements.
8. There is negative (ropagation against %tandard Bank imited.
7;. Because of the volatility of the 0oreign !xchange )arket the remittance
inflow has been affected substantially / encouraged remitters to send money
through illegal channel.
77. %B is facing stiff competition because third generation Bank is entering to
the business.
7B. %ome Banks are marketing aggressively.
7<. 2ue to non automation of all remittance services and logistics supports in
some Branches customer services have not yet fulfilled the re$uirement of
!xchange house.
79. ,nskilled manpower is another problem to achieve higher income in
remittance.
7C. %hortage of manpower.
7D. #oncentration of remittance operation through a single location.
7E. 4o conduction of the proper market research.
7@. ack of innovation of foreign exchange products.
78. Absence of #lient profile and planned steps to be taken.
B;. (roper )arketing of the bank in foreign countries.
B7. In some Branches mass marketing is being proven problematic to handle.
BB. Absence of promotional effort to keep pace with the stiff competition.
B<. The higher !xchange rate causes lose in more remittance.
B9. imited transaction to be made.
BC. Fandling a lot of inactive accounts with no transaction causes problem.
BD. 2ecreaseIfall in foreign currency occurs in huge loss though it happens rarely.
,.% *rospects:
The *rospects of foreign exchange 3 foreign trade are as foo.s:
7. =estrictions imposed by #hamber and #ommerce make the dealing fair and
thus authenticate and guarantee the dealing and in this way reduce risk.
B. 0oreign currency of %B is very strong which lets the Bank to invest without
the help of other banks.
<. (overty of Bangladesh is cut by DM by remittance constituting DM of 52( /
9BM of national export.
9. The foreign countries can be targeted for more remittance through skilled
manpower business.
C. )ore knowledgeable employees are recruited and existing employees are
trained in regular basis.
D. %B is trying to get more licenses for A2 branches through creating more
pleasing rapport with Bangladesh Bank.
E. !xpanding various services like sport cash etc.
@. %pecially driving for increasing Import and export business initiated through
Gones and A2I 0orwarding branches.
8. Introduction of web based global remittance.
7;. !nhancement of Internet and !&mail connectivity that is gearing the speed of
income gain.
77. (lacement of new =epresentative.
7B. 'pen position limit enhancement that will let the bank invest more largely.
7<. ,tilization of 0# funds in overseas investment.
79. ,tilization of 0# funds effectively and efficiently.
7C. Automated reconciliation of all 4'%T=' AI#.
7D. #omputer ledger posting and balancing.
7E. #entralization of 0oreign Trade process that will decrease the loss of time.
7@. )a-or steps have been taken to make solution of the technical and managerial
problems.
78. (reparation of client profile which will help to take decision if any problem
arises and other things concerning investment in export and import.
B;. Funting !(G clients will open new sectors for investment which ultimately
increases fund.
B7. Innovation of foreign exchange products is going on.
BB. %B is going to expand the coverage countries.
B<. %B is going to open !xchange house abroad.
B9. %B is going to manage round the clock remittance operation.
BC. 'ffering #ompetitive terms to cope with the competition.
BD. !ntrepreneurship development is another prospect of 0&!x department.
BE. %teps are thought to be taken to survey the market for potential import I export
business and constitute strong monitoring s$uad for =)5 sector.
B@. %teps are going to be taken to supervise / give technical support for Bulk
import from Fead office.
B8. #oncentration is being taken to encourage export non& traditional items.
<;. %teps have been taken to abolish the national rate, minimize 0&!X risk.
<7. The growth of import business is increasing day by day.
<B. To remove the communication gap a pool of leading 0oreign !xchange
officials has been formed to arrange interaction amongst them on different
issues relating to development of 0oreign Trade.
<<. The number of 0oreign Trade dealing branches is increasing.
<9. In order to increase export business of the bank and avoid loss incurred by the
bank I client and to facilitate maximum services to the clients by changing
existing system of Inland Bill (urchase *IB(+, a committee was formed
comprising executives I officials of Fead office. The committee is working on
the matter. =eport of the committee will be submitted very soon.
<C. It has obtained permission from Bangladesh Bank for new A2 Branches.
<D. 2eveloped software on # / 0 Agent.
<E. %B has taken plan for technical up&gradation through %ervice Bureau.
<@. 'n&line banking facilities.
<8. 'pening 4ew Branches at the ma-or remittance receiving localities.
9;. !nforcement of Anti )oney aundering Act.
97. 0loating and attractive !xchange =ate.
9B. %B has the plan to increase investment, to broaden the sources of foreign
currency, enhance the ancillary business which is very much prospective.
9<. %B has a strong base of well&wisher.
99. Terms / conditions is easy / it will increase the business.
9C. (romotion of products $uality is very important for sustainable business.
9D. (articipation is foreign trade fair to exhibit its product.
9E. 5ood negotiation is established for increasing export.
9@. (olitical environment should keep in favorable position for increasing export.
98. (roper utilization of raw material which are imported from other countries /
established those product based industries.
,.( Overa:
7. 'ver customer according to service capacity.
B. ack of technological assistance.
<. ack of co&ordination among department.
9. #ustomer cannot identify their needs / assessment properly for lacking
sufficient information / desk set up system within the bank.
C. It has not sufficient manpower according to their responsibility.
D. )ost of employee doesn"t have any initial knowledge about banking. They
come from other sub-ects than commerce.
CHAPTER
6
6*
5.Reco++endation 3 4onc$sions:
5.1 Reco++endation:
It is not unexpected to have problems in any organization. There must be problems to operate an
organization. But there must be remedies to follow. The following commendations can be
suggested to solve the above mentioned problems.
7. %B should increase its manpower level. Additional and skilled manpower in
the officer and staff level should be recruited in an urgent basis.
B. !fficient manpower should be recruited with having strong academic
background of the related sub-ects.
<. AT) Booth should be established.
9. )ore e$uipment like 4ote #ounting )achine, photocopier etc. should be
brought.
C. %B should appoint a #ustomer =elation 'fficer at Branch level.
D. %pecialized services to be undertaken to the customers.
E. %B should try to reduce their disbursement timing.
@. Arrangement of monthly I $uarterly training coursesI workshops for the
selected by the authority in order to promote employee to their desired level.
8. )ore technological instruments should be brought for smooth working speed.
7;. )ore furniture should be brought to the Branch, like chairs, cabinet etc.
77. To avoid the gathering of customers during the first hour of the work days,
shift working system of the employees should be started. %hift& wise working
may also reduce over work pressure on one"s own account.
7B. (roper -ob appreciation should be done by proving performance based awards
etc.
7<. )arketing expertise should be recruited.
79. %B needs to increase the -ob satisfaction level of its employees by proving
several performance based awards.
7C. !nhancement of remuneration package should be competitive and attractive.
7D. !mployees should be properly learnt about the mission and vision of 5eneral
Banking, Islami Banking, thus will implement their -ob in that way.
7E. The authority of %B should #onveyance pressure on 5overnment bodies to
run proper and sufficient application of Banking law in Bangladesh.
7@. %B should utilize PInternship (rogramQ as one kind of promotion policy. To
do so this bank should provides facilities to the internees through proper
placement and practical operations as well as -ob certainty to those who bring
introduce themselves the best performers in doing their particulars.
78. %B should try to attend different types of target customer.
B;. )aximum clients do not know about %B"s 0oreign exchange policy. They
should carry out more promotional activities to make clients aware about their
offers.
B7. 4o. of branches should be increased so that importers and exporters find it
within their convenient locations.
BB. In case of !xport I#s, the 5overnment encourages the exporters by giving
different facilities like tax&cuts. I think the bank should also think about such
type of facilities to be given to the !xporters because Bangladeshi !xporters
like =eadymade garments !xporters are going to face a tuff situation in
coming years from the exporters of other countries.
B<. )argin and commission on I#s varies from customer to customer. A
customer is allowed to open a I# even with nil margins. I think that the bank
should review the customersS transaction behavior for a period of time and
should develop a certain policy in this regard.
B9. In case of !xport I#s, sometimes customers insist to give their payments
though their documents are found discrepant. In some cases, Bank has to give
payment to these customers for different reasons. But it lessens the credibility
of the Bank. I think the Bank should be as stricter as possible about giving
payments against discrepant documents without hurting the customers.
BC. In many cases, the foreign banks want confirmations from other foreign banks
with which this bank has correspondence. This proves the poor financial
condition of our country. Banks should try to improve this situation.
BD. The bank should try to arrange more training programs for their officials.
1uality training will help the officials to enrich them with more recent
knowledge of International Trade 0inancing.
BE. To communicate with the 4egotiating Bank, Advising Bank. =eimbursing
Bank the branch uses %3I0T as well as these media. The Bank could use the
!&mail, which is cheaper and faster than those media.
B@. Bank can introduce more advanced )I% system to mobilize its day to day
activities. It will help the employee to do their works more $uickly and at the
same time maintaining their $uality of work.
B8. They should expand their business in a balanced way which means they
should not focus on a particular industry like readymade garments industries.
<;. 'ver burden of work and ill defined assignment unable the employee to
discharge their duties in cool manner. It also creates a hazardous situation in
the work process. %o all the employee should be assigned with proper and
specific assignment.
<7. Increase manpower as per as re$uirement to provide better service to the
customers.
5.# 4onc$sions:
%B is well positioned to meet the challenge of B;7B and will seize the opportunity of benefit
from economic growth. The bank will focus on its large customer base to generate more business
from existing customers. This strategy is supported by wide spectrum of products and services.
The bank will continue to harness the potential of retail, credit card and %)! markets, in its
pursuit for growth the %B will always adhere to good corporate governance policies and strict
credit evaluation procedure. After globalization and free trade policy, now&a&days our
manufactures as well as the exporter both are facing acute constrain to meet up the challenge.
'ur business cannot ignore these international realities. If we intend to maintain our market
share and keep pace with our competitors we have to take careful decision and careful
assessment of the advantages and disadvantages of expanding into new markets.
In the international marketplace, knowledge not only means power, it means survival. If our
companies are going to succeed internationally, we must know as much or more than our
customers and our competitors. A single misstep may not only cost our company business, it can
lead to big delays and stiff fines. ,nfortunately, most information about international trade is
targeted at big companies with large logistics and legal staffs that know how to navigate the
maze of import&export rules and regulations. %mall and midsize companies lack the resources &
and often the training & of larger corporations.
The bank has the vision to be the best (rivate #ommercial Bank in Bangladesh in terms of
efficiency, capital ade$uacy, asset $uality, sound management etc. it is now one of the top most
profitable private sector commercial bank. The bankSs is now UAU rated bank in #A)! rating.
The bank is maintaining a well&structured communication from top to bottom level. !ach official
should be valued and treated as a part of the bank and they must have the privilege to devote
themselves for the betterment of service of the bank. (rime Bank places utmost importance on
managing credit risk. The whole process includes )anagement of #redit =isk, 0oreign !xchange
=isk, (revention of money aundering, Asset liability )anagement, Internal control and
#ompliance.
The 7; years success story though helped the bank to attain a leading role but to remain
unrivalled among new generation banks, the bank must face new challenges.
'verall, the bank must make a positive attempt to be more outward looking in their goals and
aware of what is happening
Appendix:
Questionnaire

4ame. 0emale * + I )ale * +
'ccupation. Age .
*7+ (lease rate the following aspects according to your importance when you chose a Bank for
having an account. *C&?ery Important, 7& 4ot Important+
4riteria 2er!
=+portant
/,0
=+portant
/(0
Average
=+portant
/%0
-ess
=+portant
/#0
6ot
=+portant
/10
=eputation
Branches ocation
4umber of Branches
'nline 0acility
(ersonal relationship
Interest =ate
!mployee Behavior
)anagement !fficiency
Fave any other important reason*s+ *please specify+YYYY...YYYYYYYYYY
*B+ =ank these private commercial banks based on your perception. *7&E+
Banks Rank
%tandard Bank
Trust Bank
2haka Bank
B=A# Bank
4ational Bank
2utch Bangla Bank
!astern Bank
*<+ (lease rate %tandard Bank td"s service $uality on the following criteria and put tick *Z+ mark.
4riteria
Exceent
/,0
Bood
/(0
Average
/%0
*oor
/#0
2er! poor
/10
=eputation
Branches ocation
4umber of Branches
'nline 0acility
(ersonal relationship
0ormalities re$uired for opening AI#
0ormalities 0or opening I#
2elivery of I#
2elivery of %B )aster #ard
%tatement
2ispatch
0und Transfer
Interest rate on %avings AI#
Interest rate on 02=
Availability of 2eposit slipI deposit book
Hearly #harge
AT) 0acility
%itting arrangement
'verall !nvironment
Interior 2esign
Behavior of the 0! employees
%ervice Anowledge of the 0! employees
!fficiency of )arketing
1uickness in providing service
*9+ Fow do you rate the following idea to improve overall service $uality of %B[
4riteria
Exceent
/,0
Bood
/(0
Average
/%0
*oor
/#0
2er! poor
/10
Introducing music in surround speaker
#omplain Box
)ore sit arrangement
Improving lighting system
%eparate desk for each service
%ervice message written in !nglish as well
as in Bengali above each desk
Improvement in )arketing !fficiency
(arking ot beside Bank
Any other suggestion*s+ to improve service $uality *please specify+ YYYYYYY.
YYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYY.
YYYYYYYYYYYYYYYYYYY

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