INTRODUCTION

INTRODUCTION
1.1. Background Of The Study:
Internship program is a requirement to get BBA degree from International
Islamic University Chittagong (IIUC). As a part of our internee ship
program, I was assigned to complete my internee ship at SCB (Standard
Chartered Bank). I started my internship from February 17 th 2008 that
ended at May 17th 2008. I completed the internee ship under a
supervisor from the organization as well as under the faculty member of
my institution.

1.2. Objective of The Study:

The objective of the internee ship program is to get acquainted with the
real life organization to understand and observe application of the
theoretical learning acquired from classroom in BBA program. In this
regard, this study was conducted to observe the service business and
organization of Standard Chartered Bank, Chittagong and how various
departments are interrelated to each other and helps the group in smooth
operations of the whole business.

1.3. Purpose of the Report :

Purpose of the report was as follows:

To identify the historical background of the SCB.

To know the objectives behind their establishment.

To know the objectives at present condition if they differ from the
origin.
To identify the major policies by which they are operating now.
To identify the economic performance of SCB in our local economy.
To identify the facilities offered by the SCB
To know whether SCB adopted & coped with modern technological
advancement in the banking system.
To know the foreign exchange procedures of SCB and particular
advantage associated with it.
To identify the social responsibilities of the bank as a social entity.

1.4. Sources of Information:

The total sources of information are sub-classified in two classes:
Primary sources: Most of the information is gathered through face-to-face
interviews with the relationship manager, manager corporate service
delivery, team leader and the department heads and other personnel of
the SCB.
Secondary sources: secondary data are collected basically from
observation, journals Web sites and company-publication, annual report
and daily and weekly newspaper.

1.5. Methodology:
Information presented in this report is gathered from primary and
secondary sources. Information like financial data, organizational
hierarchy, and corporate and organizational culture is mostly collected
from secondary sources. Interviewing the company personnel I had
collected various information like, what are the functions of trade finance
department, procedure of the export and import business, facilities offered
by SCB due to import, export, uniqueness of SCB etc.
In order to complete this paper I made the following sequential steps for
easy understanding by the readers:

SELECTING THE GOAL

SELECTING OF
SAMPLE UNITS

COLLECTING OF DATA THROUGH PRIMARY & SECONDARY

SOURCES

PROCESSING OF DATA

DATA ANALYSIS, STUDY AND INTERPRETATION OF DATA

DRAWING CONCLUSIONS AND

RECOMMENDATIONS

FINAL REPORT PRESENTATION

1.5. Limitation:
1.5.1. Time Constraints:
I have only 12 weeks to complete the project. I found it difficult to
complete this project within 12 weeks time. 12 weeks were too small to
carry a large project like this.
1.5.2. Location constraint:
I have conducted my survey within the Chittagong metro, but most of the
multinationals companys corporate headquarter is situated in the capital
city of Bangladesh that is Dhaka. It was one of the important limitations of
my study.
1.5.3. Period constraint:
SCB was very busy with their annual budget, annual general meeting,
dividend calculation, and year ending from the month of November to
December. During these periods I was conducted my survey. It was
another important limitation of my study.

2.1. Historical Background:

Introduction:
With global headquarters at London, Standard Chartered is clearly the
world's leading emerging markets bank with assets of over $90 billion,
employing 30,000 people in over 500 offices in more than 50 countries
primarily in the Asia Pacific Region, South Asia, the Middle East, Africa
and the Americas.
The new millennium brought with it two of the largest acquisitions in the
history of the Bank - the purchase of Grind lays Bank from the ANZ Group
for a consideration of $1.34 billion and the acquisition of the Chase
Consumer banking operations in Hong Kong for $1.32 billion. These
acquisitions demonstrate Standard Chartered firm commitment to the
emerging markets, where they have a strong and established presence
and where they see their future growth.

Global History:
The history of the bank in the United Kingdom dates back to 1853 when a
group of prominent figures including famous economists James Wilson
formed a new bank to facilitate trade between India, Australia & China. A
royal charter was awarded to the chartered bank and it began trading
from

its

headquarters

in

Hatton

Court.

Standard Chartered derives its name after two banks - Standard Bank of
British South Africa and the Chartered Bank of India, Australia and China

- that merged in 1969. The Chartered Bank was founded in 1853 following
the grant of a Royal Charter from Queen Victoria, and opened its first
overseas branch ever in Calcutta, as it was then known.

Human resource:
Standard Chartered is the world's leading emerging markets bank. It
employs 28,000 people in over 500 offices in more than 50 countries in
the Asia Pacific Region, South Asia, the Middle East, Africa, United
Kingdom and the Americas.

In Bangladesh:
Standard Chartered is the largest international banking Group in
Bangladesh having a combined customer base of more than one lack in
retail banking and over 100 corporate customers. Key businesses include
consumer banking - primarily credit cards, mortgages, personal loans and
wealth management - and - wholesale banking, where the Bank
specializes in the provision of cash management, trade, finance, treasury
and custody services.

2.2. The Vision:

The best of the best thats what we are determined to become! Our aim
is to be the worlds leading, emerging market bank. We will concentrate
on what we do best.

2.3. Mission:
To make a presence in Bangladesh to exploit the future opportunities.

2.4. The Objective of the Standard Chartered Bank:

To be the market leader in financial service.
To be the largest foreign bank in Bangladesh.
Business growth through highest level of complaints both internally and
externally.
Adopting new technologies like Phone baking, Mobile Banking, Master
Card, and Credit card

2.5. Nature of Business:

The Bank serves both Consumer and Wholesale banking customers. The
Consumer Bank provides credit cards, personal loans, mortgages,
deposit taking activity and wealth management services to individuals and
medium sized businesses. The Wholesale Bank provides services to
multinational, regional and domestic corporate and institutional clients in
trade finance, cash management, custody, lending, foreign exchange,
interest rate management and debt capital markets.

 Full service commercial banking

Corporate Banking
Merchant Banking Corporate Banking
Commercial Banking Quasi Government Banking
Correspondent Banking
Institutional Banking
Consumer Banking Personal Banking
Consumer Finance
Investment Management
Wage Earners Scheme Service
Lockers
Deposit Services

2.6. Chronology of Events:

1853
The Chartered Bank of India, Australia and China is incorporated by
Royal Charter.
1858
The first overseas branches of The Chartered Bank open in Calcutta,
Bombay and Shanghai, followed by Hong Kong and Singapore in 1859.

1862
The Standard Bank is incorporated in England and under the new title of
The Standard Bank of British South Africa Limited.
1870-1900
The first overseas branches of The Chartered Bank open in Calcutta,
Bombay and Shanghai, followed by Hong Kong and Singapore in 1859.
1957
The Chartered Bank and The Chartered Bank by the incorporation of
Standard and Chartered Banking Group Ltd.
1969
Merger of The Standard Bank and The Chartered Bank by the
incorporation of Standard and Chartered Banking Group Ltd.
1973
Standard Chartered acquires the Hodge Group, whose operating
company later becomes Chartered Trust Ltd (1973).
1985
Parent company of the group is renames Standard Chartered PLC.
Standard Chartered Bank becomes a clearing bank within the UK clearing
system.
1993
Receives the very first 'Best Bank in Asia' award from Euro money
magazine.

1994
Representatives Office in Hanoi, Vietnam achieves full branch status and
SCB Malaysia Berhad incorporated locally in line with national
aspirations.
1996
Wins Euro money magazine's 'Most Improved Bank Award'.
1997
Standard Chartered has now won more awards for service quality and
excellence (ISO 9002)
Than any other bank in Asia.
2000
Acquisition of the Grind lays Bank from the ANZ Group for a consideration
of $1.34 billion
2001
The acquisition of the Chase Consumer Banking operations in Hong
Kong for $1.32
Billion.

2.7. Milestones & Achievements:

Recognitions and awards:

No. 1 Foreign Bank in India - Business India, "Best Bank

2000" poll

Best Bank in Earnings - Business Today, Best Banks 2001

survey

The only credit card operation in South-Asia with ISO 9002

Master Card Asia Pacific Marketing Award for 'Sap nay'

Cash Management Services - Asia 2001 Customer

Satisfaction Survey

SCB rated No. 1 and SCGB No. 3 in customer satisfaction

Standard Chartered Mutual Funds' corpus has crossed the

Rs. 25 Billion mark

Standard Chartered has received top ratings in industry's

benchmark surveys: the Global Custodian Survey 2000 and the

Global Investor Survey 2000.

2.8. Social Responsibility of SCB:

SCB donated 1000 pieces of personal computers to the various
educational organizations in order to create awareness and
encourages education relating to Information Technology.

 Standard Chartered Bank sponsored 10 beds for Chittagong

Medical Hospital.
Official sponsor of the inter school cricket tournament.
A modern, well-equipped and full-fledged operation theater has
been established by SCB in the Islamic Eye Hospital.

2.9. Management Structure:

The goal of Standard Chartered Bank is to be the "Bankers of First
Choice." Towards that goal, the overall planning in the Organization is
done at the headquarters level in Dhaka by a Management Committee
(MANCO), headed by the CEO and consisting of the business heads of
Corporate Banking, Consumer Banking, Treasury, and from the support
divisions the heads of Human Resource, Operations and Finance
Departments. They meet once a month, or when a special situation
arises, to plan the strategic decisions. The decision making, although
apparently based on a top-down approach, leaves room for participation
down to the level of department heads, which are responsible for carrying
out the planning of their department within the broad guidelines set by
MANCO.
Among the broad strategic objectives are:

Creating a congenial work environment

Modernization of the Management Information System to achieve

full automation by drastically cutting down on the paper work in the
long-run.

Focusing on service quality and consumer needs.

Recruiting and maintaining top-grade, efficient employees.

To invest in those technological systems which will upgrade and

enhance financial services, and

Creating an excellent brand image of the Bank

The Organization Structure of SCB Bangladesh is displayed below:

Chief Executive Officer (CEO)

Head of
Client
Relationship

Head of
Consumer
Banking

Head of Global
Markets

Chief Operating
Officer

Head of
Finance

Head of HR

Head of Credit

Head of Legal &

Compliance

Head of
GSAM

Head of
Institutional
Banking

Head of
Information
Technology

Head of Corporate

Figure: Organization Structure of SCB Bangladesh

& External Affairs

 Chief Executive Officers Office

Standard Chartered as well as Standard Chartered Bank in Bangladesh is
headed by the Chief Executive Officer, who reports to the office of the
Regional General Manager, Middle East and South Asia (MESA). While
performing staff functions, the CEO is assisted by different heads whose
functions are mentioned in the following section.

Head of Finance and Administration, who looks after the general

ledger, budget, financial scenario of the bank, risk management
administration and audit operation.

Head of Cards who supervises credit card operation.

Head of Consumer Banking, who supervises retail-banking

operation like sales and services, retail lending, product
development and product marketing.

Head of Corporate deals with the relationship management,

corporate finance etc.

Head of Human Resources looks after succession planning,

training and industrial matters.

Head of Lending Management who assists the management

division of Corporate, retail and Credit Cards in their lending
operations.

Head of Global Markets deals with the foreign exchange, money

market and asset liability operation.

Head of International Services deals with the trade finance,

guarantee and correspondent banking.

Head of Operations looks after the support services in banking

lending, CBS User, Treasury, SWIFT/TELEX operation etc. Head of
Technology is directly accountable to him.

Ethics of Standard Chartered Bank:

Standard Chartered reputation is critical to being the world's leading
emerging markets bank. The preservation and enhancement of that
reputation depends upon our businesses operating to the highest
standards of ethical conduct.
We face a particular challenge to uphold consistent standards of conduct
while at the same time respecting the culture and varying business
customs of all the countries in which we operate.
The principles that govern the behavior of our business and employees
are reflected in a Group Code of Conduct. The Group Code of Conduct is
a practical working document, which guides employees through the many
difficult conduct issues, which confront them on a daily basis. Complying
with each element of the Code will not always be easy but we recognize
that we will be judged not just by what is set out in the Code but on how
this is reflected in our day to day activities and the behavior of all of you.

Performance and Growth

The change in strategy, performance and growth, adapted by Standard
Chartered Bank is clearly evident in the following comparison between its
performances in 2000 to that in 2004.

Revenue Mix in 2007

Revenue Mix in
2006

Trade
24%
Trade

Lending

34%

35%
Sales

Trading

Cash

7%
B/S

DCM
2%
Structure
Products
2%

Manage
ment
5%

2006
Lack of revenue momentum
Over layered organization
Weak risk control environment
Basic
product
offeringvanilla
product
High cost structure

Cash
14%
Trading
4%

Lending
16%

Sales
16%

B/S
Manage
m ent
22%

2007

Revenue driven target/goal

Revenue
diversification
&
sustainability
Strong risk management culture in
place
Higher value-added , customized
product
Cost efficiency

The comparative performance (holding market share) of Standard

Chartered Bank in terms of deposit and advance are presented

separately in the following figures:

Total Deposits in FCBs

CITIBANK Others
5%
10%

SCB
40%

AMEX
20%
HSBC
12%

CAI
13%

Figure 3- Source: Scheduled Bank Statistics, Bangladesh Bank, Oct-Dec

2005
From the above figure we see that of the 9% held by foreign banks in total
deposits, SCB alone commands 40% of the deposits.

Advances made by FCBs

CITIBANK
20%

AMEX
11%

OTHERS
6%

HSBC
13%

SCB
35%

CAI
15%

Figure 4- Source: Scheduled Bank Statistics, Bangladesh Bank, Oct- Dec

2006
In terms of advances made, Standard Chartered Bank holds the leading
position among the foreign banks with a market share of approximately
35%.

Activities of Standard Chartered Bank

Standard Chartered Bank mainly consists of two divisions:

Business

Support

The Business division has the following departments:

Corporate Banking Group (CBG)

Treasury (TSY)

Institutional Banking Group (IBG)

Consumer Banking (CB)

Custodial Services (CUS)

Corporate Banking Group

Standard Chartered Bank offers it local customers wide variety of
financial services. All the accounts of corporate clients, which mainly
comprise the top local and multinational companies operating in
Bangladesh, are assigned to Relationship managers who maintain
regular and close contact to cater top their needs.
The objective of this department is to maintain a thorough knowledge of
the clients business and to develop positive relations with them. This is
maintained through interactions to offer timely advice in a n increasingly
competitive business environment. The expertise of the Institutional
Banking and Treasury groups is also available whenever required. The
unique Offshore Banking Unit (OBU) in Saver provides a full range of
facilities to overseas investors. The Corporate Banking Group in

Bangladesh has displayed a spirit of community involvement by working

with NGOs to underwrite soft loans. Standard Chartered offers its
corporate customers a wide variety of lending needs that are catered with
skilled and responsive attention. They provide project finance and
investment consultancy, syndicated loans, bonds and guarantees and
local and international treasury products.
Institutional Banking Group
The IBG of Standard Chartered Bank offers a wide variety of products
and services to banks and financial institutions. It has global links with
leading bank institutions and agency arrangements through its network of
offices in 40 countries. The Bank offers a full range of clearing, payment
collection and import-export handling services. The bank offers foreign
missions, voluntary organizations, consultants, airlines, shipping lines and
their personnel, the following services:
Current accounts in both Taka and other major foreign currencies and
Convertible Taka accounts.

Consumer Banking
Superior retail banking services comprising of a wide range of deposit
and loan products are offered by Standard Chartered Bank to its
individual customers. The consumer banking division constantly faces
challenges and meets them by developing new products and services to
fulfill the specific requirements of local TU. The Bank offers a 24-hour

service in Bangladesh through its Money-link ATM Network and Phonelink Phone banking Services.

Treasury
The foreign exchange and money market operation of the Standard
Chartered Bank in the world is extensive. Exotic currencies happen to be
one of its special areas of strength. A 24-hr service is provided to
customers in Bangladesh through the Banks network of dealing centers
placed in the principal areas of the world. The Banks treasury specializes
in offering solutions to those who wish to manage interest rate and
currency exposure s that result from trade, investment and financing
activities of other dynamic economies of the region.

Custodial services: The Equator

Headquartered in Singapore, Standard Chartered equator fulfils the
groups strategic commitment to the provision of custodial service in Asia.
The equators customers are primarily foreign global custodians and
broker/dealers requiring cross-border information as well as subcustodian services. Standard Chartered Bank, Bangladesh is responsible
for the planning in Bangladesh, but the overall management of the
custody business is based in Equators international business strategy.

Support services
The Support division provides assistance to the above business activities
and consists following departments:

 Operations
Information Technology Center
Human Resource Department
Legal and Compliance
External Affairs
Credit

Operations
[

Operations are the part of the support division that helps to run the
businesses of the bank in a smooth and controlled manner. Since it helps
mainly in processing the works of the business units, any mistakes made
can be easily detected and on time. Following are the main functions of
the operations department:
Central operations deals with the closing and opening of accounts and
other payment and account related processing of the Personal Banking
division. Treasury operations help to deal with the processing works of the
treasury division. Loan Administration Unit (LAU) deals with the
processing of the Corporate banking division.
Operations also have a department that deals with internal projects that
arises from the need to deal with certain problems or to make certain
changes. Following are some examples of projects being dealt with
presently:

 Finance, Administration and Risk Management

The support department performs the following activities:

Administration, audit and back office operation

Taking care of taxation and financial control of the Bank

Keeping track of overall credit operation

Information Technology Center

This department is instrumental in the running of all the computerized
operations of the bank. They help in the implementation and generation
of computerized reports. Another duty of the department is to maintain
communication with the rest of the world.
Trade financ
The trade finance of standard Chartered bank takes care of the
commercial activity related issues, particularly those related to import and
export finance services. Some of the services are:
Trade finance facilities including counseling, confirming export L/C and
issuing of import L/Cs, backed by its international branch and
correspondent loan network.
Bond and Guarantees
Project finance opportunities for import substitution and export oriented
projects

 Human Resource Department

This department manages recruitment, training and career progression
plan. Standard Chartered Bank highlights the importance of developing
its people to create a culture of customer service, innovation, teamwork
and professional excellence. SCB recruits people by two ways. One is a
Management Trainee that has a probation period of six months and after
the probation period the trainees will be counted as an officer and they
will do the different kinds of managerial works and another is Non
Management Trainee which does not have any fixed probation period.
Time required for training is department on the recruited persons
performance. In case of non-management trainee, two ways of
recruitment is taken place. They are
(a) Taken by signing a contract with some outside organization for three
months and after three months the contract may be renewed or not
depending upon the employees performance. These people coming
through outside contract are called Out Source.
(b) Taken by signing a contract with the bank for the three months and
after three months the contract may be renewed or not depending on
his/her performance. These people coming through bank contract are
called In source.
Recruiting, Training and Career Progression:
The recruitment process is based on references, advertisements and
internships. Entry point screening is done both by the written and oral
test. The medical record of the potential employee is very important and
those suffering from potentially life threatening and performance deterring

diseases are not hired, even if they were otherwise qualified. The
placement of the staff is done in two ways. Either the employee
undergoes a management trainee program with a probation period of nine
months and is categorized as an officer leading to various managerial
jobs, or is recruited at a non-management level as banking assistance or
support officer. There is a structured training framework for all the
employees, and a channel for moving people from national to
international positions. International graduate recruitment and personal
skill development for entry-level employees are a part of the human
resources development efforts at Standard Chartered Bank.
Legal and compliance
In the UK, Standard Chartered Bank is regulated by the Bank of England,
while in Bangladesh local banking laws regulate it and rules set by the
Ministry of Finance and Bangladesh Bank. The local restriction involves a
licence from Bangladesh Bank to operate banking business in
Bangladesh.

Standard Chartered Bank complies by the rules and

regulations seriously. It also encourages its staff to conform to an internal

culture of ethical behavior and sensitivities to the culture and religion of
the country. There is a mandatory training on Company Code of Conduct
for all staff members.
Some of the key areas that the Legal & Compliance department has to
take care of are: any kind of legal issues, to advise the CEO regarding all
matters and the management on legal and regulatory issues, correspond
regulatory compliance issues to MESA Regional Head of Compliance,
and supervise internal control (e.g. internal audit).

 External Affairs
This department deals with advertising, public relations, promotions,
partial marketing which involves disseminating new products and services
to customers and above all ensuring service quality.
Credit
The credit department approves the loans of Corporate Banking division.
The approval is mainly based on the risk analysis of the corporate clients
done by the Corporate

banking division.

Five Values of Standard Chartered Bank:

Standard Chartered Bank has five values and these values are key to
their success. These values determine how the employees achieve their
goals, the way they work together and how it feels to be a part of
Standard Chartered Bank. In brief these values are:
Courageous:
Being courageous is about confidently doing whats right. Often the task
may seem insurmountable but with courage and tenacity, the odds can be
overcome. A truly courageous act both inspires and builds character.
Responsive:
How we response to our customer will influence their belief in our
commitment to them. A proactive response is often unexpected and more

effective for that. It clearly demonstrates our willingness to go beyond the

unexpected.
International:
As a member of global village we view the world from the widest
perspective. We are all global citizens and the world is full of new
opportunities and exciting possibilities. We also deliver world-class
products and services.
Creative:
Creativity belongs to those of us who are excited by challenges and
engage them in fresh thinking and an open mind. Creative thinkers are
not limited by convention but allow their minds to soar beyond predictable
solutions.
Trustworthy:
Trust is the foundation of every successful relationship. We trust because
we believe in the sincerity of our promise. Building trust can take forever.
Losing takes only moments.
Evaluation of SCBs Activities & Performance
The banking industry is now experiencing the contractual
employment fever that has started up and SCB has also fallen prey
to it. Self-interest of the employees are actually hindering their
performance because SCB is employing individuals from other
agencies and giving them tough targets to reach and thereby not

giving them the full benefits of a permanent employee. For

example, many accounts are opened by Direct Sales Executives by
luring customers with loans, which they ultimately do not receive,
and also opening accounts for customers who can hardly maintain
the account and do not even pay the minimum opening amount.
Even though SCB is getting benefited in the short run, the
implications are long run losses.
Banks, who is offering better prospects, now enjoys customers
switching to them as SCB offers low deposit rates and has set the
minimum balances too high. Furthermore, long waiting cues,
moderate customer service, non-functioning ATM machines and
outrageously high charges lead to SCB being noted for these
weaknesses as well. As a result, a large amount of customers have
ceased transactions with the bank. Many customers accounts have
become overdrawn due to fees that have been charged by the
banks computer system for as long as three years because they
have either simply not cared to close their accounts, or thought that
they have been closed automatically.
During the last 10 years the banking industry has become
considerably monopolistic and hence SCB is starting to lose its
market share to its rivals due to low barriers to entry, and the local
banks increasing aggressiveness

 Standard Chartered Bank is also facing problem in its system of

collection and disbursement of cash. Many customers do not bear
the proper knowledge as to the process of depositing and
withdrawing money. The bank does not take many steps to assist
them either. The system of withdrawal and deposit may be new and
different from the system the customers have come across at local
bank. Many of these customers or people they send to the bank on
their behalf are not educated and hence they face difficulty in the
system of deposit or withdrawal. For instance, since the system of
deposit is not that vivid, customer often drop the counterfoil of the
deposit slip with the main copy into the slip box. Consequently, in
many such cases it happened that a smart clerk picked up both the
papers and took the money. Then there were no documents left for
the bank or the customer to prove that he/she deposited the money.
Because the way SCB makes charges to accounts cannot be
properly explained, many customers believe and complain about
the unethical banking of SCB.
While dealing with its customers- especially in Consumer Banking,
SCB emphasizes more on short-term profits than focusing on the
maintenance of a long-term healthy relationship with them. This
suffering of SCB from myopia- i.e. shortsightedness leads it to
pursue strategies in such a myopic manner, and so in the long run,
it may undergo severe losses. Another weakness of the bank that
can be sighted as well is Poor coordination and communication

between the head office and branches. As the head office

undertakes many projects, the activities are hampered due to some
activities of the branches. Even after the head offices carefully
thought out action plan for a project, they still face problems in
executing because the branches are not well aware of such a
project and therefore, their actions do not comply with what is
required for the ultimate success of the project.

STANDARD CHARTERED PRODUCTS & SERVICES

Standard Chartered Products

Deposits
# Different types of A/C
# Cheque encashment
# Cash deposit
# Cheque deposit
# Fixed deposit receipt
# Statement of A/C
# Speed cheque
# Bearer certificate of deposit
# Cheque book issue
# Certificate of balance

Import
# Letter of credit
# Retirement of import document

Export
# Cheque purchase
# Cheque collection
# Bill negotiation
# Bill collection
# L/C advising & confirming
# Encashment of travelers cheque

Fund Transfer
# Payment order
# Demand draft
# Mail transfer
# Telegraphic transfer
# Standing instructions
# Sales of travelers cheque

Guarantee
# Big bonds
# Performance bonds
# Shipping guarantees
# Savings certificates

Retail lending products

# Planz
# Cash-line
# Over draft
# MPL(Miscellaneous Personal Loan)
# Personal loan

Credit cards
# Gold Master Card
# Visa Silver Card

Securities
# Sales of Savings Certificates
# Encashment of other papers
Locker and Safe custody

Standard Chartered Services:

Retail Banking
# Personal Banking
# Private Banking
# Consumer Finance
# Investment Management
# Wage earners services

Institutional Banking
# Current A/C both in TK. And major currencies
# Convertible TK. Account
# Local and foreign currency remittances through a large net work of
branches and correspondents
# Deposit management services for customers who wish to invest in
Bangladesh or abroad

# Contractor Financing

Commercial Banking
# Trade finance facilities including advising, confirming exports L/Cs and
issue of import L/Cs
# Leasing
# Project finance opportunities for import and export oriented projects

Corporate Banking
# Project Finance
# Corporate deposit
# Syndicate loans
# Bonds & Guarantees
# Local & international treasury products

Quasi Govt. Banking

# Efficient and knowledgeable management of foreign trade business
both import and export
# The opportunity of debenture finance for new projects
# Merchant banking advisory services
# The opportunities of syndicated hard currency financing of loans and
import L/Cs
# Possibilities of hard currency loan and lease deals
# Skills in barter swaps and customer trade deals
Correspondent Banking
# Market intelligence and status report
# Advising of letter of credit and negotiation of documents
# Current A/C service
# The ability to issue bonds and guarantees in support of their customer
business

Departmental Function

Standard Chartered-Departmental Functions

During the internship period six departments of Standard Chartered (Ctg.
Main) had been observed. From the experience of the observation on the
departments, the general functions of the departments are discussed in
this report. It is to be noted that, the internship program did not go through
with the observation on consumer banking, High Risk Dept. and sales
and marketing due to time constraint of the program. As a result, the
functions of these unstudied departments are not mentioned here. Except
the above mentioned three departments, the study went through
corporate service delivery, corporate Customer support Dept., Customer
Service Dept., Fund Transfer Dept., Cash & Clearing Dept., Remittance &
International Monies Dept. and The functions of the first five departments
excluding the Personal Lending Department are described below since
the findings of this dept. will be discussed in the major part of this report:

Customer Support Department:

Customer Support is the back office of Customer Service department.
The functions of Customer Support are internal transfer, cheque book
issue, issuance of savings certificates, encashment of savings

certificates, reporting to Bangladesh Bank regarding the sales of savings

certificates, delivery of balance certificates activities.
There are five types of savings certificate, namely, BSP, PSP, Paribar SP,
3 months interest payable SP, 6 months SP and another type is WES
bond. Actually, all of these savings certificates are sold by Bangladesh
Bank through different local and foreign listed commercial banks.
Issuance:
When a customer wants to purchase a savings certificates of any
category, he asks for this to the Bank. The Bank then maintains the
official formalities to precede the issuing operation. The customer then
purchases the certificates and Standard Chartered debits the customers
a/c and maintained with Bangladesh Bank.

Encashment:
After the maturity of the period when the certificate holder asks forhis/her
Installment
payment, the Bank credits his a/c and just afterwards debits its own
Account maintained
with Bangladesh Bank, which was credited before.

Procedure:
After then, these certificates are attached with the application form. Then
the officer performs onward, certain official procedures. After then, the ID
slip (Identification slip) is given to the customer and the Bank keeps the
other part. Then the Bank prepares savings certificates sales statements
for varied categories of certificates and sends the documents to
Bangladesh Bank. The preparation of Paribar, 3 months and 6 months SP
is done manually by maintaining register books. The sales statement of
BSP and PSP are prepared with the computer. However, the Bank has
recently taken the initiative to make the manually done processing in the
computerized way. Its mentionable that the register books for BSP and
PSP are also maintained.
After the maturity of before, if the customer wants to withdraw his/her
receivable amount against coupon, he/she has to apply in an encashment
form. Then, several official procedures are maintained to up-date and
verify the encashment request. Finally, crediting the account of the
customer makes the payment. As a result, the banks account is debited.
Now the Bank and then the account of the Bank is credited by
Bangladesh Bank after the necessary verification.

Services Department:
The functions of Customer Services Department are outlined below:

# Response to telephone queries

# A/C opening

# A/C closing

# Signature scanning

# Signature adding

# Signature verifying

# Up-dating the mandates of each of A/c

# Internal transfer

# Maintaining SWIFT transfer

# Hold statement delivery

# Receiving the order of cheque books

# Delivering the cheque books

# Funds transfer against standing order cards

# Faxing the A/C statements to the Cards Division and many more.
Trade Finance Department:
Trade finance department deals with the following items;
Import
Export
Guarantee
Shipping guarantee
Advance TT
Most important information about the trade Finance department is Operation of the Trade Finance Department is fully regulated and
guided by the foreign exchange regulation of Bangladesh Bank.
It is a sensitive department for any bank. Because currency (local and
foreign) goes outside the country through this department. Thats why

Bangladesh bank used to monitor all the functions of this department very
closely.
Fund Transfer Department:

Currency comes in the country and currency also goes out of the country.
Whenever any currency is going out of the country, it must be reported to
Bangladesh Bank. In fact, Standard Chartered doesnt only get
remittances from foreign countries; it also remits money out of
Bangladesh. Each bank within the listed banks under Bangladesh Bank
must report to Bangladesh Bank, the Central Bank of Bangladesh, for the
currencies entering in and going out of the country through itself.
Standard Chartered is a listed foreign bank. There are two forms of which
From T/M is used for reporting to the Central Bank for the outgoing
currency and the other one is FROM C, which is maintained for reporting
to the same for the incoming currencies to the country through the Bank
(Standard Chartered).

Maintenance of register books:

Currency coming and going out of the country equivalent to USD 2,000
or above must be

Reported to Bangladesh Bank. In the way of processing this matter,

FROM C for
inward remittance and FROM T/M for outward remittance are maintained.
In case of
inward remittance, after filling in FORM C a register book is
maintained where the total
inward remittances of the month are written in the TTs Inward Payable
Register Book.
Another Register book, Bangladesh Bank Return, is maintained in
order to separate the
amount of Inward remittance in respect of currency.

Issuance of certificate:

Each form bearing the currency amount equivalent to USD 2,000 or

above is separated
from that of below USD 2,000. For the currencies equivalent to USD
2,000 or above,
certificates are issued under J1-S1 code and for the currencies less
than USD 2,000;

certificates are issued under IRV code. Then, the total amount of any
currency(for
example, GBP or USD) is noted regarding whether the amount is J1S1 categorized or
IRV categorized.

Cash & Clearing Department:

Cash & Clearing is one of the vital departments in a bank. It requires

settlement of cash
transaction handled in each day. In this department cheques are
received and deposits are
also credited to the customers account.

Cash and Telling:

The front office receives cheques and deposits and the back office
manages the internal
official function. Standard Chartered has BBS System operated with
computers, which
have networked with the central IT (Information Technology) system. If
a customer

wants to know about his/her funds maintained in his account with any
branch of Standard
Chartered, he or she can get this information instantly from any of the
branches of
Standard Chartered from any point of Bangladesh. This banking
system provides
convenience to the customers and thus confirms easier and faster
money transfer from
one branch to another.

All staff of the Bank has their personal access by which they can
refrain others from
entering it. They also have to use their own ID (Identification code)
when entering in
CBS.

Authorization:

Sometimes, it is seen that there is not available cash i.e. the account
suffers from debit
balance. In that respect, cash withdrawal is not possible except for the
cases of
overdrawing facility authorized by the senior staffs or manages. The
overdrawing facility
is considered in case of those customers who maintain very strong
account with the Bank
and that type of customers are identified as HNW (High Net Worth).
Any way, the Bank
is ready to provide cash transaction to the customers up to 3 p.m. of
every working day.

Clearing:

Standard Chartered customers are depositing account payee cheques

along with bearer
cheques which are payable from other banks located at Ctg. These
cheques are basically

called clearing cheques. Some cheques are issued on other banks for
clearing which are
sent to Bangladesh Bank on just next to the day of the receipt of the
cheques. The
clearing cheques are settled in Bangladesh Bank clearing house
where representatives
from other listed foreign and local banks including Standard Chartered
under the
schedule of Bangladesh Bank are present.

Clearing house is a place where transactions within the banks are

executed and controlled
by Bangladesh Bank. This house generally sits at 9.00 a.m. to 9.30
a.m. for first clearing
and at 3.00 p.m. for second clearing. In the first time clearing,
Standard Chartered
disposes of the cheques drawn on other banks and receives the
cheques or pay orders of
it. During second clearing, Standard Chartered disposes the cheques
to the other banks
drawn on them which are found to be faculty for certain reasons and
receives the cheques
from the other banks drawn on it for that type of reasons.

Collection cheque:

Collection cheques are those cheques, which can not be settled in the
clearing house of
Bangladesh Bank of a particular area. For example, a cheque may be
submitted to
Standard Chartered issued on another bank out of Chittagong
metropolitan area, such as,
on a bank located at Faujderhat. In that case, cheque is not settled
through clearinghouse
and this is called collection cheque. The collection cheques are settled
through the
correspondence of the related banks. Thus, the cheque submitted to
Standard Chartered
drawn on that Bank of Faujdarhat will be settled though the
correspondence of both the
Banks.

Remittance Department:
The main task of Remittance Department is to remit the funds of
account holder and non-account holder within and outside the country.
People remit their funds through pay orders from one city to another
within the country or they just remit their funds from one branch to
another of the same bank within the country through telegraphic
transfer or they can remit their funds outside the country through
foreign demands drafts. Demand drafts are also used in local country
for remittance of fund.
The difference between cheque and pay order is that, cheque may be
dishonored for many reasons. But the bank on behalf of the account
holder guarantees pay order and in very rare cases pay orders are
rejected. Moreover, remittance through cash handling is riskier than
any other means. And in one respect, the bank basically guarantees
pay orders. Its an advantage for the account holder even if his funds
with the account short falls the remitting amount provided that, there is
some kind of arrangements of the bank with the customer, for
example, overdrawing facility.
Issuance of Pay Order:
In case of issuing pay order, beneficiarys name is put in the computer,
and then the account holders number is put. Then the system shows
how much fund is available with the account. If its all right, the draft is
issued and obviously the signature will be verified before issuing it. If
the amount is insufficient, it requires authorization of senior officers of

different levels. For issuing draft, Standard Chartered changes a

nominal amount (minimum TK.50) as commission. When every thing is
completed, the system shows that the transaction is posted. Finally,
the remitting officer gets a print of the amount remitted and the amount
charged as commission by the bank on the back of the draft and on
the draft application form. In case of foreign payment orders, same
procedure of local draft is also maintained simply with an exception
that the exchange rate is considered.
Cards payment:
Funds are also paid by credit cards, which are handled by the
Remittance Department of The Bank. Sometimes, people purchase
something and pay by credit cards. In those cases, the stores selling
the products to the customers and receiving credit card payment
through slips come to Standard Chartered where that particular card is
acceptable and get their payment in cash or their accounts are
credited. Sometimes, it is seen that, the credit card is not of the Bank.
In that case, the Bank (Standard Chartered) paying in favor of the
seller gets its money back by debiting the card issuing bank and
crediting its account number maintained with that bank for cards
arrangements.

Cash notes and Travelers cheques:

People make visits to different countries for different purposes. A
person willing to visit Myanmar and SAARC countries by road can
have the maximum endorsement of $ 500 in cash notes or travelers
cheques. If he wants to visit the same by air, he is allowed for up to $
1000. And his visit to a non-SAARC country would allow him to take
the maximum of $ 3000 in a calendar year. Now the question comes
how he should take the money. The customer has two options. He can
take the foreign currency in cash or by travelers cheque. Its restricted
that he cannot take the currency both in cash and travelers cheque by
using a signal form, but allowed to do so by filling in two forms
separately. It may be that, the customer maintains savings or current
or FCY account with Standard Chartered. Then he can get his
endorsement money by debiting his account with the Bank.

Business visit:
Visit may be for any kind of business purposes such as for attending
business meetings, conferences, symposiums or seminars or it might
be a workshop program in abroad. If the business visit is within the
SAARC countries, the traveler is allowed for USD 200 per day to
spend during his visit and if the visit is out of SAARC countries, he is
allowed for USD 250 per day for covering his expenses during visit. At
first, traveler must submit the main copy or fax copy or photocopy of
the invitation for attending the meeting or conference, which must
include the number of days, the visitor will stay on tour. After verifying
every thing the Bank will allow him the money up to the last extent he
can have during business visit. For example, if the visitor stays in India
for 7 days, he will be allowed a total of maximum USD 140 considering
USD 200 per day during his visit. If he is on tour in Canada for 7 days,
which is a non-SAARC country, he will be allowed a total of maximum
USD 1750 considering USD 250 per day during his stay in that
country. The business visit purpose code requiring the reporting to
Bangladesh Bank by the banks of Bangladesh including ANZ is 1020.

Study purpose:
For study purpose local students go abroad. In that case, they have to
the tuition fees or they take some money with them for bearing living or
miscellaneous expenses. Its not perpetual truth that all students
finance personally for studying abroad. Some get scholarships from
the foreign universities. However, they take some money to continue
expenses for living or miscellaneous purpose.
As usually, they may prefer cash notes or travelers cheque. Whatever
way they endorse the amount, they have to have accounts with
Standard Chartered and have to submit BDT 5000 for opening
account, which will be used for student tuition fee endorsement
purpose. This endorsement is to report to Bangladesh Bank under the
foreign currency exchange rule as coded by FE-10/93. In this respect,
the I-20 of the university and a verification letter of the university or
department authority must be submitted with T/M Form. The purpose
code for foreign study to be reported to Bangladesh Bank is 1120.

Part #3

SWOT Analysis
SWOT is an acronym that stands for Strength, weaknesses, opportunities and threats.
SWOT analysis is a careful evaluation of an organizations internal strength and
weaknesses as well as its environmental opportunities and threats.
The fundamental objective of SWOT analysis is to identify those trends, forces and
conditions, which have a potential impact on the formulation and implementation of the
companys marketing strategies.
Beside this, we can say that the central purpose of SWOT is to identify strategies that
align, fit or match a companys resources capabilities to the demands of the environment in
which the company operates. To put it another way, the purpose of the strategic
alternatives generated by a SWOT analysis should be to build on a companys strength in
order to exploit opportunities, counter threats and correct weaknesses.

Nature Of Business:

Full service commercial banking

Corporate Banking
Merchant Banking Corporate Banking
Commercial Banking Quasi Government Banking
Correspondent Banking
Institutional Banking
Consumer Banking Personal Banking
Consumer Finance
Investment Management
Wage Earners Scheme Service
Lockers

 Deposit Services
SWOT Analysis Of Standard Chartered Bank Limited. (Bangladesh): Internal Environment Analysis (Strength/Weakness)
Organizational strength are skills and capabilities that enable an organization to
conceive of and implement its strategies. Different strategies call on different skills
and capabilities.
Organizational Weakness are skills and capabilities that do not enable an
organization to choose and implement strategies that support its mission.
SWOT element
Strength
Highly qualified personnel

Which means
Better competence, efficiency and
Professionalism.

Higher deposit base

Higher average deposit

Participation in consumer banking

It has great attraction on consumer

Banking business

Company reputation

as a foreign bank it has very good

reputation among the consumer

Market share

7% market share belongs to foreign

bank and out of that, SCB holds
a good percentage of market share

Service quality

They are maintaining very good

standard of service

Sales force

It has very effective and efficient

sales people under direct sales
department

Financial stability

liquidity position of SCB is very sound

and financial stability is very strong

Introducing new technology

They introduced ATM, Phone link,

Internet banking, online banking with
us at the very beginning of the stage

 Sharing experience

They share their experiences and

management system with other bank

Loan recovery record

Loan-loss record is very good, it has a

very good loan-recovery practice in
the world

Good management system

As a foreign bank they have good

management system through out the
organization.

Large customer base

They have 1,20,000 customer all over

the Bangladesh

Social welfare

SCB is a socially responsible

organization. It has done lots of things
for the betterment of the society. Like
sponsoring
school cricket,
children hospital and have great
contribution on youth, health and
education.

Weaknesses
Size of bank

SCB is operating in Bangladesh with

limited number of branches. These
inadequate number of branches some
time acts as a potential problem in the
operation of banking business

Strategic weakness

SCB used to focuses mainly with

consumer banking but not in
corporate banking,

Inherent limitation

Operation of SCBs is limited only

within Dhaka, Chittagong, Sylhet and
Bogra. It is another important limitation
of SCB. Due to limited coverage area,
SCB has always failed to provide
service to the other part of Bangladesh.

Higher account charge

SCB usually claim higher bank charge

for their services to the clients. thats
why small traders
are not always
interested about SCB

External Environment Analysis (Opportunities/Threats):-Whereas evaluating strength and weaknesses focuses attention on the internal working of
an organization, evaluating opportunities and threats requires analyzing an organizations
external environment.
Organizational opportunities arise when a company can take advantage of
conditions in its external environment to formulate and implement strategies that
enable it to earn higher profits.
Organizational threats arise when conditions in the external environment
endanger the integrity and profitability of the companys business.

SWOT element
Opportunities
New industrial development
Exploit customers financial needs

Goodwill of the bank

Geographical facilities
Ambassador of the country

Threats
Increased competition
Key staff loss
need
Major prolonged economic depression

Which means
Increased bank lending in commercial
area
More income from investment and
taxation advisory services
-Attraction of new customers to bank.
Based on their goodwill SCB has
great opportunity to spread their
business.
Bangladesh is a developing country
and for the economic development it
has great opportunity
As a foreign bank it can attract more
foreign investment through providing
information to the foreign
investor.
Loss of market shares.
main competitor
HSBC, Citi bank N.A. etc.
Sometime the skilled personnel
jumped to the another firm, thats why
to counter aggressive poaching by
private sector firms and foreign
financial institution
If poverty line decreased or
economical stability is not there, then

it would be major threat for the SCB

Law and order situation
Market size

Bad practice of law and order might be

great threat
In our country 50% of market share
belongs to govt, bank and 49% belongs
to domestic and foreign bank and out
of that only 7% belongs to foreign
bank. This un-balanced market size
sometime designed such a strategy
which would be a great threat for the
SCG bank.

Findings From The SWOT Analysis:When all four areas of the SWOT have been identified there must be a decision about what
the company means, and what action are needed to enhance or deal with the particular
aspects.
After analyzing all the elements of SWOT analysis, we can put here some suggestions for
the SCB bank according to above findings.
For a company to succeed either its strategy must fit the environment in which the
company operates or the company must be able to reshape this environment to its
advantage through its choices of strategy. Companies typically fail when their strategy no
longer fits the environment in which they operate.
In order to achieve a competitive advantage, companies need to pursue strategies that
build on the existing resources and capabilities of an organization (its competencies) and
they need to formulate strategies that build additional resources and capabilities like
developing new competencies.
Once the company has performed its SWOT analysis, it can proceed to develop specific
goals for the planning period. This stage of the business strategic-planning process is
called goal formulation. Managers use the term goals to describe the objectives that are

specific with respect to magnitude and time. Turning objectives into measurable goals
facilitates management planning, implementation and control.
Bottom Line:In general, a business unit has to monitor a key external macro environment forces which
includes demographic/economic, technological, political/legal and social/cultural as well as
significant micro environment actors which includes customers, competitors, distribution
channels etc that affect its ability to earn profits. The business should set up a marketing
intelligence system to track trends and important developments. For each trend or
development, management needs to identify the associated strengths, weaknesses,
opportunities and threats.

PROJECT PART

OPERATION OF THE TRADE FINANCE DEPARTMENT IN SCB

Part #1

Trade Finance Department

Trade Finance department of SCB is involved in facilitating trading business that is import
& export business across the world. This department plays an important role in developing
the local economy. Trade Finance department facilitates international trade by issuing
import and export L/C, providing bank guarantee and, Shipping guarantee offering fund
transfer & advance TT across the world. In summary,
Trade finance department of SCB deals with the following items;
Import
Export
Guarantee
Fund transfer
Shipping guarantee
Advance TT
Most important information about the Trade Finance Department is - Operation of the
Trade Finance Department is fully regulated and guided by the foreign exchange
regulation of Bangladesh Bank.
It is a sensitive department for any bank. Because currency (local and foreign) goes
outside the country through this department. Thats why Bangladesh bank used to monitor
all the functions of this department very closely.
Fund Transfer System:
Foreign Exchange transactions inevitably involve transfer of fund from one bank to another,
one center to another, and one account to another.
Nostro And Vostro Accounts:
Banking and fund transfer are today more complicated than they were even a hundred
years back. They maintain an intricate network of accounts and counter accounts among
different banks all over the world. These are referred to as due from (nostro) and due to

(vostro) accounts. A due from nostro account is the foreign currency account of a bank
maintained with its foreign correspondents aboard.
For example, SCB maintains an account with SCB NY for Dollar currency, which is known
as Nostro account for the SCB Bangladesh. Similarly that account is a Vostro account for
SCB NY.
SWIFT:
The vast growth in international payments has put increasing pressure on banks
communications network. In 1973, in an attempt to overcome this problem, the Society for
Worldwide International Financial Transaction (SWIFT) was founded. SWIFT was founded
as a cooperative nonprofit organization. Its headquarters are in Brussels. During the first
years, message text standards were finalized covering clean payments, confirmations of
foreign exchange loans and deposits, and statements for nostro reconciliation.
By September 1994 SWIFT had grown to serve 3600 users in 100 countries. From a daily
average of 30000 messages, the total had risen to nearly 2 million message switching
centers operate in Amsterdam, Brussels and Culpepper, Verginia.
Asian Clearing Union:
Asian Clearing Union represents a somewhat low-keyed arrangement chalked out by
central bank of the Union to settle their claims arising from exchange of goods and
services. The initiative to establish the Union was taken by ESCAP- Economic and Social
Commission for Asian Pacific in 1974: the Commission provided technical and financial
assistance to carry out the groundwork to activate the union. The member countries of
this union are Bangladesh, India, Pakistan, Sri Lanka, Nepal, Iran and Myanmar.
Reimbursement bank:
Sometimes a third party bank is required in the L/C issuing process. This third party bank is
known as reimbursement bank. It is required when the L/C issuing bank does not maintain
with the advising bank. Here a third party bank introduced to settle down the claim.
For example, SCB Ctg is the issuing bank and Rabo bank Holland is the advising bank.
And there is no relation between SCB and Rabo bank Holland. But BCB NY maintains an
account with AMEXE (American Express Bnak) And AMEXE maintains an account with the
Rabo bank Holland. So the claim should be settled in a ways that SCB Ctg will make a
contact with SCB NY then SCB NY makes contact with AMEXE and AMEXE clears the
payment to Rabo bank Holland. The illustration is as follows:
SCB CTG

SCB NY

AMEXE

Here American bank is the reimbursement bank.

RABO Bank

Settlement of payments:
The instruments that can be used for payments through the Union are Telegraphic
Transfers, Mail Transfers, Bank Drafts and Bill of Exchange payable at sight. For
settlement of payments through the Unions clearing mechanism, the instruments of
payments, namely voice, Bills of exchange, Drafts etc. to be drawn in AMU or Bangladesh
Taka or in the currency of the country in which the other party to the transaction resides.
AMU (Asian Monetary Unit) is an accounting unit corresponding in value to the Special
Drawing Right (SDR) of the International Monetary Fund. The contracts, invoice etc. can
also be denominated in other convertible currencies.
Reimbursement of payment:
For settlement of transactions the banks in the member countries maintain accounts with
each other. Surpluses or deficits in this account can be replenished through the central
banks of the respective countries. In order to remove the complexities of the clearing Union
arising from floating exchange rate system, the Union members are planning to shift to a
new system of payments. Under the new system, the accounts will be maintained in US
dollar to be known as ACU dollar. The value of ACU dollar will be same as the ordinary US
dollar. The banks will replenish their accounts through the central bank as before. The
central banks will settle their mutual claims at the end of every two months through the
Unions head quarters at Tehran,
Import Procedure:
Introduction:
Import of merchandise essentially involves two things: bringing of goods physically into the
country and remittance of foreign exchange towards the cost of the merchandise and
service connected with its dispatch to the importer. The Ministry of Commerce regulates
the first part while Bangladesh Bank regulates the payments for these imports.
Registration:
To be an importer, a person or an enterprise or a company must have to get the IRC
(Import Registration Certificate). Without IRC, no body can import any goods from abroad.
After getting the IRC, an importer gets the permission from the govt. to import.
IRC is issued by CCI&E (chief controller of the imports & exports). To get an IRC an
importer needs to apply the CCI&E through a bank & submits the following documents,
Trade License from municipal or the local authority
Partnership deed in case of partnership concern,
and certificate of registration with the Registrar of
Join Stock companies, articles and memorandum of
association in case of limited companies.
TIN (Tax Identity) Certificate

VATT Certificate
Member Certificate from the local Chamber
Nationality certificate
Ownership documents or the rent receipts of the
place of business
Bank certificate
Functions Of Trade Finance Department Regarding Import
Issuing L/C:
L/C means letter of credit. According to the foreign currency Act 1947, this is a conditional
undertaking by a bank on behalf of an importer in favor of exporter.
Basically four parties are involved in the L/C
Applicant,
Beneficiary,
Issuing Bank
And Advising Bank.
Applicant: is the person of organization who applies for the L/C
Beneficiary: is the person of organization who supplies goods stated into the L/C
Issuing Bank: the bank, which issues the L/C on behalf of the applicant
Advising Bank: is the suppliers bank from which the beneficiary receives L/C.
Classification Of L/C
There are three types of import L/C1. Cash sight,
2. Cash Usance and
3. Back-to-Back import L/C
Cash sight: the payment of the Cash Sight import bill must be cleared within seven working
days after receiving the import documents. According to the ICC, if the payment is not clear
within seven working days, then the overdue interest will be charged. If the clause sight is
mentioned in the L/C, then it becomes the sight L/C.
Cash Usance: A particular time period or time limit is given to make the payment of import
bill to clear in case of cash usance. Time starts from the date of receiving documents. For
example, if any stipulated time period is mentioned in the L/C, like 120 days or 180 days,
then the L/C become the cash usance L/C. That means after receiving the documents, the
importer has to pay the bill within those days. If the importer failed to do so within the given
date, then the overdue interest will be charged.
Back-to-Back L/C: is another kind of import L/C. Back to back import L/C is opened against
the export L/C. In that case export L/C provide the security to the import L/C. The values
of the import L/C cannot be exceed the limit of 75% of the total value of the export L/C.

This limit depends on the goods to be imported. If the product is ready made garments,
then this limit might be 80%-85%. [If the unit price per dozen is &60 & above].
To open a Back-to-Back import L/C, TAS approval (Trade Approval System) is required
which is issued by the SCO (Senior Credit Officer).
In case of Back-to-Back export L/C, import L/C is the security of the export L/C.
Time limit for opening of L/C:
Unless otherwise specified, for import under cash foreign exchange, letter of credit has to
be opened by importers within 120 days from the date of issue or registration of LCA form.
The Chief Controller may extend the above time limit up to such time as deemed fit. For
import under foreign aid/grant and barter/STA, L/C is to be opened within the time limit as
may be notified by the Chief Controller.
If a commercial importer or an industrial consumer who has been allocated funds from any
source under Government allocation, fails to open within the specified time-limit , the
allocation may be withdrawn and reallocated to other commercial importer or industrial
consumers according to need.
Alternative Means Of Import:
Import against bond License:
An importer can also import goods against the bond. These imported goods are fully duty
free. Here the importer acts as an intermediary. The importer imports goods from the
foreign countries without duty and store these goods in the customs warehouse. Then they
export these goods to the foreign countries. They have to gain at least 10% profit from the
export to increase the foreign currency reserve.
Selling of these goods in the importing country is strictly prohibited. But with the permission
of the customs, a part of these goods can be sold in land for the diplomatic code,
foreigners, CEPZ customers, airport duty free shops etc.
Import against direct payment abroad:
Only Bangladeshi nationals living abroad may import any importable item irrespective of
value ceiling against direct payment aboard. For such import, no permission or import
permit from the Import Control Authority is necessary.
Import on Deferred Payment Basis or Against Suppliers Credit:
Subject to restriction and prohibition contained in Import Policy Order, import on deferred
payment basis or against Suppliers Credit may be allowed on the basis of procedures laid
down by the Bangladesh Bank in this regard.

How To Open Import L/C:

For opening an import L/C, following documents are needed L/C Application
Invoice / Indent
First Class Insurance
PSI Form
L/C Authorization letter (LCA)
Credit report of the suppliers etc.
Invoice:
Invoice means the agreement between the buyer and the seller. This is the itemized
statement sent by the supplier to the buyer for the goods supplied on credit to inform about
the amount due and it helps the buyer to check the goods delivered and to make entry in
the buyers purchase day book.
When the invoice is not sent with the goods, a covering letter is needed.
Pro-forma invoice: proforma invoice are the pre-shipment invoice.
Commercial Invoice: proforma invoice will turn into commercial invoice after the L/C has
been executed or the shipment has been made.
Indent:
Indent is an order to commission agent to buy goods on behalf of the foreign buyer. When
foreign buyers place orders through commission agents or commission houses in the
suppliers country, their orders are known as indents. Indents give details of the goods,
their prices, packing and shipping instructions and method of payment.
An indent therefore is not an order of goods, but an order to but goods on behalf of the
foreign buyers.
L/C Authorization letter:
LCA is used for the reporting purpose. The payment of the goods is made by the foreign
currencies and other charges like commission, interest, swift charges etc are settled by the
local currencies. LCA is only used for the foreign currencies. The bank is responsible for
the reporting to the Bangladesh bank about the foreign currency, which is sent to abroad
for each transaction through LCA. As a result, the Bangladesh bank can closely monitor
the position of their foreign currency reserve regularly.
For the EPZ customer LCA is not required. They have their own foreign currency reserve.
They dont need to buy the foreign currency from the Bangladesh Bank.
There are two types of LCA-

Commercial LCA: is required for importing Ready

made Garment, Food grains etc.
Industrial LCA: is required for importing industrial
raw materials.
PSI Form:
PSI stands for Pre-shipment Inspection. This is used for the CRF report (Clean Report of
Findings). This inspection is conducted before the shipment and the CRF ensures that the
goods which will be imported have fulfilled all the terms and condition of the L/C. Bureau
Beritas, Inter Teck Testing Services and BSI Inspectorate Grioffiths are the Bangladesh
Bank recognized organization those perform the inspection functions.
Credit Report:
To open an import L/C, credit report is mandatory. Credit report contains the information
about the suppliers. As the Bank does not know the supplier physically, so the bank relies
on the credit report to open the L/C. The L/C will not be opened until the credit report is
available. Basically Credit Report is collected form the Suppliers Bank.
If the customer wants the L/C might be open without having a credit report but it will remain
in- operative until and unless the credit report is submitted.
Bangladesh bank recognizes Dan and Brandstreet Information Service India Ltd to provide
the credit report of the different foreign suppliers.
L/C Amendment:
L/C Amendment means the internal correction of any fault or error or discrepancies of the
L/C. If it is customers fault then the bank claims some charges. But if it is Banks fault, then
it is done by Banks own cost.
Not only for the fault or error, L/C may be amended if the customer applies to change any
terms and conditions of the L/C. Like value change, shipment date change, permission for
the transshipment partial shipment, quality and quantity of the goods, shipping mark etc.
All types of L/C Amendment are not acceptable. It should be accepted by the import policy.
For example deleting the clause Radio Activity of the imported powder milk for human
consumption is not acceptable.
If the amendment is for value change, then a new LCA will be added with the old LCA and
also a new insurance cover note with the old one.
For the changing of quantity of goods, value change, new proforma invoice will be added
with the old one.
If the shipment date increases, then the expire date will be automatically increased.

Overall Export Import Procedure In SCB Main Branch: The customer who likes to import, submits the L/C application along with proforma invoice,
first class insurance cover note, PSI form and LCA. The bank checks these requirements,
signature etc. Then bank checks BCA (business credit application) for the credit limit,
interest rate, margin etc and CMS (Credit Management System) to find out whether the
required funds are available or not to open the L/C. If the fund is not available the L/C will
be held.
Credit report is one of the important factors in the import procedure. It contains the
information of the suppliers. The bank does not know the supplier. Thats why the bank
relies on the credit report to open the L/C of a new supplier. If the credit report is not
available in the bank, then the bank informs to the customer and requests to provide the
credit report form any other bank of the customer. If this is not available to anywhere else,
then the bank applies for the credit report and claims some charges. The L/C will not be
opened until the credit report is available. L/C might be opened but it will be in- operative if
the customer applies.
After checking these things SCB Ctg send all the documents to Dhaka main office. The
Dhaka main office gives the input of the SWIFT message and sends one copy to the
advising bank and another copy to the SCB Ctg.
SCB Ctg sends this paper to the Customer.
The exporter collects the swift copy from the advising bank. Then the exporter makes
arrangement of goods for the shipment and prepares the document like Commercial
Invoice, Packing list, Bill of exchange, Certificate of origin, Certificate of radio activity (for
the Food Grants), Bill of lading / Air ways from the shipper / Airway and other documents
according to the condition of the L/C.
After shipment the exporter submits the document to the advising bank. The negotiating
bank sends the documents to the payee bank (issuing bank). Then the payee bank settles
the claim of the advising bank by debiting the customer A/C. And the advising bank settles
the claim of the exporter.
If the reimbursement bank is required, suppose advising bank is Rabo bank, Holland and
issuing bank SCB Ctg. Then Rabo Bank sends a swift message to SCB Ctg informing to
request the SCB NY (reimbursement Bank) to honor the their claim against the import L/C.
Then SCB Ctg informs SCB NY to settle their claim within the value date. Then SCB NY
settles the claim by debiting the SCB Ctg and SCB Ctg debits from the importer.

Import Bill:
After shipment the Beneficiary sends all the documents like Bill of Lading, Bill of Exchange,
Commercial Invoice, Certificate of Origin etc. to the import bill section of the L/C issuing
bank. Then the task of the import bill begins.
Foreign currency goes outside the country through this section. Thats why this is treated
as the most sensitive section in the trade finance department.
Settlement procedure of Sight L/C:In case of sight L/C, the payment must be clear within the seven working days. It is
mentioned in the UCP/ICC. But according to the Bangladesh Bank, the payment should be
made within two working days if no discrepancies are there.
Thats why after receiving the sight document, it becomes BR (Bill Receivable). That
means the bank makes the payment clear from its own A/C. for this purpose, the bank
purchases dollar from the treasury. And makes the payment to the Exporters bank.
After passing the BR, the bank informs the customer to settle their payment and take the
documents.
Then the bank makes the BR off by debiting customers current A/C.
Sometimes the bank makes the BR off by creating TR liability (Loan against trust receives.)
Only a few customers can enjoy this facility. There is a particular duration to make the TR
off. If the duration is exceeding, then the bank can claim the overdue interest.
Cash usance L/C / Back-to-Back usance:
The payment of the cash usance is called the Acceptance Bill. In this case, after receiving
the documents, the customer accepts the bill of exchange. Then the bank passes the AC
bill and advises a due date as per L/C terms. That means a particular date on which the bill
will be matured and the payment will be clear.After accepting the bill of exchange, the
customer takes the documents and he can unload the goods.
For this purpose the bank charges a commission, which is known as Acceptance
commission. It varies customer to customer depending on the contract between the bank
and the customer. The bank charges commission as per BCA or BA letter.
On due date, when the bill becomes mature, the bank pays the bill (if the fund is available
in the customers current A/C). At that time the bank claims the bill retirement commission
as the handling charge (1500/-). Usually it does not vary from company to company like
Acceptance Commission.
Upto this period the interests are charged at the LIBOR rate (London Inter Bank Offering
Rate).If the importer is not able to pay the bill on the due date, then the buyer may has to
pay the overdue interest, if the supplier claims. If the supplier does not claims, and then the
buyer does not pay the overdue interest. Here issuing bank is not involved in these
activities. It acts as an intermediary only.

The negotiating bank can also claim the overdue interest as they paid the bill to the
exporter from their own fund. (According to the clause of the L/C.)
Export Procedure:
Shipment is the single most important and key function of among all the export function.
Immediately on conclusion of the contract securing the sales order, the exporter should set
himself earnestly to the task of delivering the goods on time. Failure to maintain the
delivery schedule will expose the exporter to claims from the buyers for damages on
account of non-shipment or late shipment, and in addition the exporter may lose the
patronage of the buyer for future export orders.
As a first step towards fulfillment of his obligation to deliver the goods on time, the exporter
should check the terminal date of shipment stipulated in the order and the expiry date of
the L/C, if any. If it is found that the time allowed is insufficient to make the shipment, the
exporter should immediately request the buyer for extension of the expiry date.
The delivery terms agreed in the export contract will indicate the extent of the responsibility
of the exporter to effect the shipment. There are various terms of delivery at the
international level, such as EXW, FAS, FOB, C&F, CIF, DDP etc. For export from
Bangladesh, contracts are normally drawn for delivery on FOB, C&F or CIF terms.
Types Of Shipment:
There are two major types of shipment.
Export by Sea.
Export by Air
Export by Sea:
In most cases, exports from Bangladesh take place by Sea. Following functions are
involved in shipping goods by sea are
a) Booking of shipping space.
b) Packaging
c) Customs formalities
d) Storage of export cargo.
e) Payment of port charges
f) Freight payment
g) Loading of export cargo
h) Containerization
i) Bill of lading.
Export by Air:
The export of goods by air is growing rapidly. Airfreight services are now available for
shipment of goods to almost all destinations although it is most costlier than export by sea.
It involves the following task.
a) Booking of air cargo space
b) Packaging
c) Customs clearings
d) Exchange control declaration

e) Payment of export duty

f) Receiving the airway bill.
Moods Of Export Payment:
An exporter has a wide range of choices to receive payment against the goods he wishes
to export, but this choice may not entirely lie with the exporter, as he has to reckon with the
wishes of the buyer, the importer of the foreign country. The buyer may have his own
preference that is different from the sellers and so the terms must be agreed mutually.
There are a number of payment methods commonly used in international trade. These are
as follows:
Open account transaction
Advance payment
Bills of collection
Consignment sale

Open account transaction:

This payment method can be used when there is a long-standing relation between the
seller and the buyer or when the buyer is known to be trust-worthy and enjoys an
unqualified trading reputation. Under this method, the seller dispatches the goods and the
underlying shipping documents to the buyer who makes the payment either on receipt of
the shipping documents or of the goods, whichever is agreed upon.
Advance payments:
This method of payment is not commonly used but if the exporter sells the goods to an
unknown buyer in a country known to be not meticulous in honoring international
obligation, he will probably have no choice other than asking for an advance payment
before the goods are shipped. Advance payment can also be secured if the exporter has a
long standing relationship with the buyer and who is thus prepare to make an advance to
the exporter to enable him to process or fabricate the goods to suit the importers needs. In
the event that the exporter is successful in securing a payment in advance, the shipping
documents can be sent direct to the buyer without observing the usual exchange control
formalities of negotiating the documents through an authorized dealer.
Bills for collection:
To save the expenses incurred on account of imports against L/Cs, and also to enjoy some
amount of flexibility, a buyer aboard may ask the seller to send the export documents on a

collection basis. This payment method is also sometimes designated as Cash Against
Documents (CAD) or Documents Against Payment (D/P).
Under this method, the seller sends the shipping documents including the documents of
title to the buyer and a bill of exchange, through an authorized dealer, who then sends
those documents to a bank in the buyers country for collection of the payments. The
exporter may ask the negotiating bank in Bangladesh to arrange with the correspondent
bank to deliver the documents to the buyer on payment of the invoice value of
consignment. This is called a collection payment and is usually employed for the export
of raw jute and jute goods from Bangladesh to the reputed buyers in the United Kingdom
and the continent.
Another method that is frequently used to receive payment by sending the documents on
what is known as Documents Against Acceptance(D/A) terms. Under this method, the
documents are delivers to the buyer on acceptance of the bill signifying this
acknowledgment of the debt as well as a commitment to pay on the maturity date of the
bill.
In the case of exports on D/A, D/P or what is more popularly known in Bangladesh as CAD
basis, the exporter has to ensure that the buyer is reputable in business and is prompt in
payment.
Consignment sale:
When dealing with an export item like tea, the exporter would probably want this to be
consigned to a broker or an auction house abroad for sale. The broker or the auction
house would deduct a commission and expenses before sending the payment. This
appears to be a sale on open account, but it differs from it in that under a consignment
sale, neither the price is fixed in advance nor are the shipping documents sent direct to the
buyer. Exchange control regulations in Bangladesh require the exporter to declare the
approximate value of the consignment to the Custom Authorities Form (EXP) and also
enjoin him to repatriate the foreign currency within four months.
L/C Transfer Regarding Export :
L/C can be transferred, if the beneficiary applies. That means the applicant gives the
permission to transfer the L/C. If both parties to the L/C (applicant and beneficiary) do not
agree, then the transfer of the L/C is not possible.
In case of ready made garments export, if the L/C is issued in favor of buying house, then
the transfer of the L/C is required. When the L/C is issued in favor of exporter directly, then
the exporter can apply for transfer.
Sometimes the exporter may not be able to supply total amount of goods within the given
time. At that time the exporter needs to transfer the L/C to other suppliers. Bank charges a
commission for the transfer of the L/C.

Part # 2

Challenges Faced By The Trade Finance Department

Of Standard Chartered Bank

Problems And Findings:

Centralization
I think in case of Standard Chartered Bank, decision-making is highly centralized. It seems
to me, all the decision making authority regarding credit approval, credit limit etc is
concentrated into the hand of top level management, who used to sit in Dhaka the capital
city of Bangladesh. That is why, Standard Chartered Bank Ctg branch need to send all the
required documents into Dhaka for authorization and decision making purpose. It is
actually a time-consuming process and sometime creates a long queue of decision
situation.
Cost Maximization:
Due to centralization SCB ctg has to maintain a constant contact /touch with the SCB
Dhaka for the decision-making purpose. For this reason, SCB Ctg needs to open and
maintain a modern communication channel with the equipment like fax, internet leased line
telegraph through BTTB, which incurred operating costs.
Insufficient number of HR:
It seems to me insufficient number of HR is another significant problem facing by trade
finance department. Due to the lack of insufficient HR, Most of the trade finance personnel
have to suffer from unbearable stretch. I have observed that although the official working
hour is from 9.00am to 4.00pm,but the executives of the trade finance department
generally leave their office at 8.00-8.30pm. Even before the acquisition of Grindlays, there
were 23 executives in trade finance department of SCG and SCG. Now its reduced to the 7
members.
Excessive intervention by the central bank:
Excessive intervention by the central bank in every steps of the trade finance department
creates problem like, customer dissatisfaction, slowing down the daily progress etc.
Inherent limitation
SCBs operation is limited only within Dhaka, Chittagong, sylhet and bogra. It is another
important limitation of SCB. Due to limited coverage area, SCB has always failed to
provide service to the other part of Bangladesh.
Information technology
The management and maintenance department of information technology is totally based
on CHANNI. Therefore the solution relating to all technical faults must come from CHANNI.
As the SCBs IT department is thoroughly based on network platform, Some times,
negligible faults like failure to log on the network, network collapse etc is also required to

be consulted with CHANNI. Sometime it takes more than a day. All the regular operations
of SCB remain closed until the solutions come from CHANNI.

Part # 3

Recommendation:
Decentralization of decision-making:
The best probable solution for SCB is the decentralization of decision-making. SCB should
allocate the proper authority towards the mid-level and 1st line management. It will allow the
SCB in prompt decision making, minimizing the decision making cost and providing better
customer service.
Recruiting the adequate number of HR:
The number of the HR employed in trade finance department must be adequate. It will help
SCB to generate smooth functioning of the trade finance department. It will also help SCB
to overcome the problem like employee stretch & boredom.
Excessive intervention by the central bank
SCB should take necessary steps to minimize the excessive intervention of the central
bank
Alter the strategic focus:
SCB focuses mainly on consumer banking rather than corporate banking. These strategic
focuses should be altered promptly. SCB should concentrate both on consumer banking
and corporate banking simultaneously.
Channi based IT solution:
SCB should delegate proper authority to the local IT department of SCB to solve the
negligible problems.

Appendix
EXW:
EXW means Ex Works. Under this term the sellers only responsibility is to make the
goods available at his premises and thus denotes the minimum obligation of the seller.
F.O.B:
F. O. B means Free on Board. The goods are placed on board a ship by the seller at a
port of shipment named in the sales contract. The risk of loss or damage to the goods is
transferred from the seller to the buyer when the goods pass the ships rail.
FRC
FRC means Free Carrier .(Named Point). This term has been designed to meet the
requirements of modern multi-model transport.

FOR/FOT
FOR and FOT means Free on Rail and Free on Truck. They should only be used when
the goods are to be carried by rail or truck.
FOA
FOA means f.o.b. Airport and is based on the same main principle as the ordinary f.o.b.
term. The seller fulfills his obligations by delivering the goods to the air carrier at the airport
of departure.
C&F
C&F means Cost and Freight. The seller must pay the costs and freight necessary to
bring the goods to the named destination, but the risk of the loss of or damage to the
goods as well as of any cost increase is transferred to the seller to the buyer when the
goods pass the ships rail at the port of shipment.
C.I.F:
C.I.F means Cost, Insurance and Freight . This term is basically the same as C&F , but
with the addition that the seller has to procure marine insurance against the risk of loss of
or damage to the goods during the carriage.
SWOT

SWOT is an acronym that stands for Strength, weaknesses, opportunities and threats.
SWOT analysis is a careful evaluation of an organizations internal strength and
weaknesses as well as its environmental opportunities and threats.
Questionnaire for the Respondents/Customers
1. Name of the Customer / Organization.
-----------------------------------------------------2. Address
-----------------------------------------------------3. Why are you maintaining accounts with Standard Chartered Bank (SCB)?

To get better services

Good trusteeship than other banks
SCB always maintained good liquidity
None of these

4. Does SCB provide better interest on your deposits?

Yes
No
5. How promptly does SCBs cash Management provide services?
Without consuming more time
Without any bureaucratizing complexity
7. What type of benefits do you receive from National Collection Services (NCS)?
Cheque honors within very short period of time
Receive better information
8. Is NCS always fulfilling your expectations?
Yes
No
9. Why are you Choosing SCBs Web Banking?
To get cash account statements
To get cash account balances
World wide net work
All of these
10. What do you think is the level of security in SCB in order to ensure your companys
confidentiality from Web Banking?
Fully secured
Not fully secured
Totally unsecured
11. Are you getting any better benefits from Opspay product?
Yes

 No
12.How good does Relationship Manager (RM) of Cash Management respond or aid you?

13. Is it possible by Opspy to provide you better services than normal banking activities in
case of salary transfer?
Yes
No
14. Is it very necessary for Cash Management to continue payments plus system?
Yes
No
16. If no why
Costly
Complex procedure
Not realistic procedure
Above all
17. Are you satisfied the premium services banking services?
Yes
No
18. If no why
Time consuming
Staffs are not co-operative
Both are the reasons
19. Are you satisfied with the services of Cheque Writer?
Yes
No
20. If no why
Not so secured
Need more Knowledge
Both are the reason

21. Do you get extra ordinary facilities from Cash Managements Cash Pick-up & Delivery
Services?
Yes
No
No need

22. How would you rate Cash Management product service to you?
Excellent
Good
Satisfied
Unsatisfied
poor
23. Are you satisfied with your expectation?
Yes
No
24. To whom do you complain?
Relationship Manager of Cash Management
Other Departments officials
25. How quickly are your problems / complains against accounts resolved by Cash
Management
Very frequently
Within one week
Within two weeks
Less frequently
26. Is your expected requirement fulfilled through SCBs Cash Management?
Yes
No
If no, what percentage is fulfilled?

BIBLIOGRAPHY
1. Annual Report of Financial Year 2007, Standard Chartered Bank
2. Bangladesh Bank Bulletin-2006 & 2007
3. http://www.standardchartered.com
4. http://www.standardchartered.com/graduates