ADVANCE WORKING REPORT ON FOREIGN EXCHANGE OPERATION OF EXIM BANK LIMITED By Al Amin ID: 0920049 An...

ADVANCE WORKING REPORT ON FOREIGN EXCHANGE OPERATION OF

EXIM BANK LIMITED

By

Al Amin

ID: 0920049

An Internship Report Presented In Partial Fulfillment

Of The Requirements for the Degree

Bachelor of Business Administration

INDEPENDENT UNIVERSITY, BANGLADESH

May 2013

ADVANCE WORKING REPORT ON FOREIGN EXCHANGE OPERATION OF

EXIM BANK LIMITED

By

Al Amin

ID: 0920049

has been approved

May 2013

ABUL KHAIR JYOTE

Faculty, Marketing

School Of Business

Independent University, Bangladesh

Letter of Transmittal

Date: May 13, 2013

Abul Khair Jyote

Faculty, Marketing

School Of Business


Subject: Submission of Internship Report on Foreign Exchange Operation of Exim

Bank Limited

Dear Sir,

It is a great pleasure for me to submit the report on ―‘Foreign Exchange Operation Of

Exim Bank Limited‘. I am submitting this report as part of my internship (BBA 499A) in

Exim Bank Limited. As my faculty supervisor, I have tried to prepare the report

following your instructions.

The purpose of the report is based on my working experience in Exim Bank Limited and

how the bank deals with import, export and foreign remittances.

I will be glad if you kindly accept this report.

Thanking you.

Sincerely,

Al Amin

ID# 0920049


ACKNOWLEDGEMENT

First of all I would like to my cordial thanks for almighty Allah whose uniqueness,

oneness, and wholeness are unchallengeable guided us in difficult circumstances. All

respects are for his holy prophet Hazrat Muhammad (SM) Peace be upon him, who

enable us to recognize the oneness my creator.

I would like to thank Mr. Abul Khair Jyote, my university supervisor for guiding me in

planning and composing the report. He was always available to provide me with his

supervision and guidance during the entire course. Therefore, I express colossal

appreciation for his aid.

My most heartfelt gratitude goes to all the employees of Exim Bank Limited, Head

Office Corporate Branch for making it a good practical and learning experience. From the

early hours of the morning to the sunset of the evening they have guided me through

various operations of the bank and provided me with essential support for my internship

report. I pray to Allah that He be merciful to all of these people.

Last but not the least thanks goes to my parents for bearing the tension, frustration and all

the hard work along with me through the entire BBA program.

EXECUTIVE SUMMARY

The working report stands for foreign trade activities in Exim Bank ltd. foreign Exchange

operation is one of the significant functions of the bank. It plays a vital role in overall

economy of the country. Foreign Exchange contains Import, Export and foreign

remittance department contains inward and outwards remittance.

From the beginning of the report, the entire foreign trading activities relating to Export

and Import has been described. All the clauses and steps are clearly mentioned in this

report. The details about Letter of credit i.e. classification of L/C, L/C opening procedure,

types of L/C, L/C payments moods, required documents, documents checking,

transmitting L/C, about pre-shipment inspection when it is needed.

The procedure begins from getting the ERC (Export registration certificate) by chief

controller of import & export office. After that, receiving the letter of credit and advising

L/C, necessary document collection and negotiation. How the bank assist to exporter

through financing. Last but not the list the foreign trade remittance process.

TABLE OF CONTENTS

CONTENTS PAGE NO

1.0 Introduction 01

1.1 Origin of the report 01

1.2 Background of the report 02

1.3 Significance 02

1.4 Scope of the report 03

1.5 Objective of the report 03-04

1.6. Methodology 04

1.6.1. Research Design 05

1.6.2. Sources of Data 05

1.6.2.1. Primary sources of data 05

1.6.2.2. Secondary sources of data 05

1.6.3. Duration 05

1.6.4 Tools used for analysis 06

1.7. Limitations of the Study 06

2.1. History of the EXIM Bank 09-10

2.2. Vision 11

2.3. Mission 11

2.4. Goal 11

2.5. Objective 12

2.6. Values 12

2.7. Branch Information 13

2.8. The Head Office Corporate Branch 13

2.9. Key Functions of EXIM Bank 13

2.10. Performance of EXIM Bank 13

2.11. Social Commitment 14

2.12. Product and Services of EXIM Bank

ltd

14

2.12.1. Deposit products 14

2.12.2. Investment Products 15

2.13.Organogram 16

2.14. Management of EXIM Bank 18

2.15. Financial Highlights of the EXIM

Bank Ltd

19

3.1. Literature Review 21

3.2. Bank 22

3.3. Islamic Banking 23

3.4. History of Islamic banking in

Bangladesh

23

3.5. Overview of Foreign Exchange 24

3.6. Definition of Foreign Exchange 24

3.7. Fundamentals of Foreign Exchange

Policy

25

3.8. Activities of Foreign Exchange

Department of a Bank

25

3.8.1. Letter of Credit (LC) 25

3.8.1.1. Definition of Letter of Credit 25

3.8.1.2. Types of letter of credit 26

3.8.1.3. Application for Issuing Letter of

Credit

26

3.8.2. Dollar/Traveler‘s Check

Endorsement

27

3.8.3. Foreign Remittance 27

3.8.4. Foreign Currency Account 27

3.9. Income of the Bank in Foreign

Exchange Sector

27

4.0. Foreign Exchange Department of

EXIM Bank

28

4.1.0. Import procedure of EXIM Bank 29

4.1.1. Major steps of Import L/C Operation

procedures

30-34

4.1.2. Amendment of Letter of credit 34

4.1.3. Payment procedure of the Import

Documents

34

4.2. Export procedure of EXIM Bank 35-43

4.3. Foreign Remittance Section 43-47

5.0. Analysis of the Particular Topic 48-55

6.0. Comparative Analysis 55

6.1. Comparative Analysis of performance

among EXIM Bank Ltd., Islami Bank

Bangladesh Limited and Al–Arafah Islami

Bank Limited

56-58

6.2. Ratio Analysis 58-60

7.0 Findings 61

8.0. Recommendations 62

8.1. Conclusion 63

9.0 References & Bibliography 64-65

LISTS OF TABLES

TABLES PAGE NO

Acronyms 07-08

EXIM BANK AT A GLANCE 10-11

Organogram 16

Organizational structure 17

Organizing structure of Head office

corporate branch

17

Financial Highlights of EXIM Bank 20

Functions of Foreign Exchange Department 29

Flow chart: - Import Procedure of EXIM

Bank

30

The procedure of Export 36

Disposal of Export Form (EXP) 38

Flow chart of Remitting Process 44

Remittance of Funds 45

Figure: Inward Remittance 46

Figure: Modes of Outward Remittance 47

Ratio analysis 53 & 55

LISTS OF GRAPHS

GRAPHS PAGE NO

Total Foreign Exchange Business in 2011 50

Total Foreign Exchange 51

Import 51

Export 52

Foreign Remittance 52

Import Ratio 53

Export Ratio 54

Remittance Ratio 55

Deposit 56

Overall Foreign Exchange 56

Import 57

Export 57

Foreign Remittance 58

Import Ratio 59

Export Ratio 59

Remittance Ratio 60

Foreign Exchange Operation of EXIM Bank Limited

EXIM Bank Limited 1

1.0. Introduction:

Bank is important financial organization to build the economy of a certain country.

Globalization or Free market economy is now the world‘s major challenge. Banks are key

financial institutions that play a vital role in the county‘s economy and core of the

payment system. The present economy of Bangladesh demands immediate development

of financial institutions with this capability. This report has been prepared in the light of

practical as well as theoretical knowledge that is shared by our honorable executives of

Export Import of Bangladesh Limited (EXIM Bank).

1.1. Origin of the Report:

As a pre-requisite for the Bachelor of Business Administration (BBA program) of

Independent University, Bangladesh I was required to complete an internship for a period

of three months in a suitable business organization and submit a report on my findings. I

had selected to work as an internee in Export-Import Bank of Bangladesh Limited

(EXIM), Head Office Corporate Branch, Gulshan-1, for a period of three months from

January 7th 2013 to April 7th 2013. And it is a 6 credit hour program.

In this internship report I have tried my best to focus on the functions and performance of

Foreign Exchange Operation of EXIM Bank which is a Shariah Based Islami Bank.

Without the practical exposure, theory can never be fruitful. For this BBA program has

been designed in such a way that a student gets practical knowledge. A student needs to

go for practical orientation as organization where his/her duty is to familiarize owns self

with operations and activities of that branch.

This report is prepared under the supervision of Mr. Abul Khair Jyote, Faculty,

Marketing, School Of Business, Independent University, Bangladesh.


EXIM Bank Limited 2

1.2. Background of the Report:

Banking sector is the driving force for an economic growth of a country. Every

commercial bank acts as financial intermediary whose main aim is to earn profit through

borrowing and lending funds in the profitable sectors and it also issues different types of

credit instruments. Therefore the banking system occupies an important place and plays

significant role in a nation‘s economy building process. Necessarily, banking sector also

ensures commendable contribution in the economic development of a country and forms

the core of the money market in an advanced country. This sort of financial intermediary

accepting deposits and granting loans; offers the widest menu of services for different

business ventures. Commercial banks have significantly expanded their financial services

to the clients and governments around the world. The current business environment is

very dynamic and fast changing. That is why every professional has to possess clear

concept regarding these changes and he/she needs to conform to these changing

environments. In order to become a real professional candidate needs to enter into

practical business world. A professional is a person who is skilled in the theoretical,

scientific and practical aspect of an occupation and who performs with a high degree of

competence & integrity. This internship program assisted me to develop professional

attitude towards banking business & environment.

Basically, this study will help to construct a skillful tenure in banking sector. This report

has been prepared in the light of practical as well as theoretical knowledge that is shared

by honorable management executives of Export Import Bank of Bangladesh Limited

(EXIM Bank).

1.3. Significance:

When associated with theory and practice, knowledge and learning become perfect. Theoretical

knowledge gets its perfection with practical application. That is why practical orientation is a

positive development in professional arena. In such state of affairs the present report aims at

analyzing the experience of practical orientation related to an appraisal of EXIM Bank

Bangladesh LTD.


EXIM Bank Limited 3

1.4. Scope of the Report:

During this 3 months internship program in Head Office Corporate Branch, EXIM Bank

Limited, almost all the desks have been observed. There I had to work in Foreign

Exchange department‘s Export desks as a routine attendee. It was difficult to collect all

the information relevant to my report because the people of this Bank was so busy with

their scheduled task that they could not be able to provide me much time. Here I tried to

cover the activities and rules and regulation related to Foreign Exchange operations in a

private commercial bank. Due to successful completion of essential part of the report

have the opportunity to discuss regarding following issues:

To obtain practical experience about Foreign Exchange and general banking

activities by involving in such type of program.

Finding the bridge between academic study and real practices in organization.

To build professional career in the banking sector as well as any Financial

Institution.

How to maintain the organizational behavior & etiquette inside the organization.

1.5. Objective of the Report:

Internship Report is prepared as a requirement for the completion of the BBA program of

the School of Business, Independent University, Bangladesh. The primary objective of

internship is to provide an on the job exposure to the student and an opportunity for

translation of theoretical conceptions in real life situation. The program covers a period of

3 months of organizational attachment.


EXIM Bank Limited 4

1.5.1. General Objective:

The broad objective of the study is to prepare report on “Foreign Exchange Operation

of EXIM Bank Limited”.

1.5.2. Specific Objective:

To know the foreign trade operations of a bank.

To evaluate the performance of foreign exchange division.

To evaluate the return on export, import and remittance.

To find out the contributions of foreign exchange business of a bank in its overall

earnings.

To get a brief idea about operational procedure, export & import business.

To estimate the cost of export, import and remittance.

Foreign exchange earnings as compared to total earnings interest income and

noninterest income.

To familiarize different rules and regulations of export and import formalities.

1.6. Methodology:

The study requires a systematic procedure from selection of the topic to preparation of

the final report. To perform the study, the data sources were to be identified and

collected, to be classified, analyzed, interpreted and presented in a systematic manner and

key points were to be found out. The overall process of methodology has been given as

below.


EXIM Bank Limited 5

1.6.1. Research Design:

This is an “Exploratory Research”, which briefly reveals the “Foreign Exchange

Operations of EXIM Bank Ltd”. Data have been collected from both primary and

secondary sources.

1.6.2. Sources of Data:

This study is mainly based on secondary data available from the various divisions and

departments of EXIM BANK, in addition to these other necessary information have been

collected from the daily news papers, relevant journals, annual reports of EXIM BANK,

Bangladesh bank, Ministry of Finance and Planning and publications of other relevant

institutions have also been taken into consideration.

1.6.2.1. Primary sources of data:

Face to face conversation with the Bank officers & staffs.

Conversation with the clients.

1.6.2.2. Secondary sources of data:

Procedure manual published by the EXIM Bank Ltd.

Files and documents of the branch.

Annual report of EXIM Bank Limited, 2011.

Different text books.

Different manuals of EXIM Bank Limited.

Different circulars of EXIM Bank Limited.

Different papers of EXIM Bank.

1.6.3. Duration

Twelve weeks within the period of three months‘ internship program.


EXIM Bank Limited 6

1.6.4 Tools used for analysis:

Both the qualitative as SWOT and quantitative as Trend & Ratio analysis tools are used

to analyze the data. After collecting all the data, they have been coded and data have been

preceded, analyzed and graphically represented using MS Word & MS Excel.

1.7. Limitations of the Study:

In all respect some limitation and weakness remain within which I failed to escape by any

means. These are follows:

To continue study in such a vast area requires a big deal in time. As an internee I

had only three months‘ time, which was not enough.

To collect information required, I faced difficulty because of the excessive nature

of confidentiality maintained by the officials of EXIM Bank.

Difficulty in gaining accesses to financial sector, bank software & confidential

documents.

In most cases I simply did not have any option but to furnish data without

verification.

Getting Relevant papers and documents were strictly prohibited.

Non-availability of the most recent statistical data.

Shortage of written materials.

Since the bank personals were very busy, they could provide me very little time.

In spite of all this limitations I have put the best effort as far as possible in developing the

study.


EXIM Bank Limited 7

1.8. Acronyms:

A/C

AD

B/L

BB

BOE

CCI & E

CFR

CIB

CIF

DD

DP Note

EPB

EXP

FC

FDD

FOB

IBC

IBCA

IBDA

IMP

IRC

L/C

LCAF

OBC

PO

PSI

SWIFT

Account

Authorized Dealer

Bill of Lading

Bangladesh Bank

Bill Of Exchange

Chief Controller of Import & Export

Cost & Freight

Credit Information Bureau

Cost Insurance & Freight

Demand Draft

Demand Promissory Note

Export Promotion Bureau

Export Form

Foreign Currency

Foreign Demand Draft

Free On Board

Inward Bills for Collection

Inter Branch Credit Advice

Inter Branch Debit Advice

Import Form

Import Registration Certificate

Letter of Credit

Letter of Credit Authorization Form

Outward Bills for Collection

Payment Order

Pre Shipment Inspection

Society for Worldwide Inter Bank Financial


EXIM Bank Limited 8

TC

TIN

TR

TT

STD

FDR

CC

C & F

CRF

ERC

IBCT

Telecommunication

Tax Identification Number

Truck Receipt

Telegraphic Transfer

Short Term Deposit

Fixed deposit receipt

Cash Credit

Clearing & Forwarding

Clean Report Findings

Export Registration Certificate

Inter branch Credit Transaction


EXIM Bank Limited 9

2.1. History of the EXIM Bank

The Export Import Bank of Bangladesh Limited (popularly known as EXIM Bank) is a

private commercial bank that operates banking operation by maintaining the Islamic

Shariah and principles regarding the business transactions. The Bank was incorporated on

2nd

June 1999 as a private sector banking company under the COMPANIES ACT 1994

with a target to play the vital role on the socio-economic development of the country. It

started operations on 3rd

August 1999 with an authorized capital of Tk. 1 billion (1000

million) divided into 10 million ordinary shares of Tk. 100 each. The initial paid up

capital of the bank was Tk. 225 million, fully subscribed by 28 sponsors. Initially the

Bank started its operation as a private commercial Bank, but later on, the Bank has taken

up the challenge to start Islamic Banking operation in all kinds of transaction.

Banking Operations were migrated & all of its conventional banking operation turned

into Shariah based Islamic banking operations after obtaining approval from Bangladesh

Bank on July 01, 2004. The Bank went for public issue of shares in the year 2004 and its

shares are now listed with Dhaka Stock Exchange (September 26, 2004) and Chittagong

Stock Exchange (September 04, 2004).

Initially the bank was known as the BEXIM Bank Limited, which stands for

"Bangladesh Export Import Bank limited". But for some legal constraints the bank

had to change the name and according to the proposed name of the Governor of Central

Bank at that time it was named as "Export Import Bank of Bangladesh Limited" or in

short EXIM Bank Limited.

The bank finances export and import businesses and also conducts traditional commercial

banking activities by maintaining the Islamic Shariah regarding the business. The

commercial Banking activities of the Bank consist of services including mobilizing

deposits, providing investment facilities, discounting bills, conducting money transfer,

foreign exchange transactions and providing services i.e. issuing guarantees, safe

keeping, acceptances and letters of credit etc.


EXIM Bank Limited 10

The Bank offers full range of Personal, Corporate, International Trade, Foreign

Exchange, Lease Finance and Capital Market Services. EXIM Bank Limited is the

preferred choice in banking for its friendly and personalized services, cutting edge

technology, tailored solutions for business needs, global reach in trade and commerce and

high yield on investments, assuring Excellence in Banking Services.

EXIM BANK AT A GLANCE

Name of the Institution Export Import Bank of Bangladesh Limited

Date of incorporation June 02,1999

Commencement of operation August 03.1999

Authorized Capital Tk. 1000.00 million (initial)

Tk. 350.00 million (as on 31 December, 2007)

Paid up Capital Tk. 225 million (initial)

Tk. 214.22 million (as on 31 December, 2007)

Converted to Islamic bank July 01,2004

Legal form "A Shariah based Islamic Bank"

Slogan "Together Towards Tomorrow"

Industry Banking industry of Bangladesh

Nature of business Shariah based Islamic banking with different financial

services/products

Target customers Individuals and Corporate customers

Deposits, accumulated (2012) Tk 20667.91 crore

Total Investments (2012) Tk 9781.95 crore

Investments (shares & bonds) Tk 289.40 crore

Foreign Exchange Business

(2012)

Tk131923.67crore

Operating profit (2012) Tk 2,675,743,721

Net profit (2012) Tk 1,705,381,594

Number of branch (2012) 72

Total manpower 1312

Chairman Md. Nazrul Islam Mazumder



Managing director Dr. Mohammed Haider Ali Miah, Ph.D

Web address www.eximbankbd.com

2.2. Vision:

The gist of EXIM bank‘s vision is ‗Together Towards Tomorrow'. Export Import Bank of

Bangladesh Limted believes in togetherness with its customers, in its march to growth

and progress with services. To achieve the desired goal, there will be pursuit of

excellence at all stages with a climate of continuous improvement, because, in EXIM

Bank, they believe, the line of excellence is never ending. Bank's strategic plans and

networking will strengthen its competitive edge over others in rapidly changing

competitive environment. Their personalized qualities services to the customers with the

trend of constant improvement will achieve operational success.

2.3. Mission:

The Bank has chalked out the following corporate objectives in order to ensure smooth

achievement of its goals.

To be most caring and customer friendly and service oriented bank.

To create a technology based most efficient banking environment for customers.

To ensure ethics, transparency, sustainable growth and full value of the

shareholders.

2.4. Goal:

This bank is one of the most disciplined Banks with a distinctive corporate culture. Here

employees believe in shared meaning, shared understanding and shared sense making.

Employees can see and understand events, activities, objects and situation in a distinctive

way. They mould their manners and etiquette, character individually to suit the purpose

of the Bank and the needs of the customers who are of paramount importance. The people

in the Bank see themselves as a tight knit family that believes in working together for

growth. The corporate culture has not been imposed; it has rather been achieved through

continuous corporate conduct.

http://www.eximbankbd.com/



The word "EXIM BANK" implies the meaning of its "Operation". To achieve the desired

goals, it has the intention to pursuit of excellence at all stages with a climate of

continuous improvement. Eventually the bank emphasizes on the following goals:

Achieving excellence in customer service, next to none and superior to all

competitors.

Creating a technology based most efficient banking environment.

Providing high quality financial services in export and import trade.

Maintaining consistency in improving the service quality and customers'

perception regarding the bank.

Maintaining a constant growth in sales and profit time to time.

Maximizing shareholders‘ wealth, by increasing the share price.

Making an effective contribution to the overall socio-economic growth of

Bangladesh.

2.5. Objective:

The objectives of the Bank are-

Provide high quality financial services in export and import trade.

Provide defect free quality customer service.

Maintenance of corporate and business ethics.

Maintaining sound capital base.

Enhancing shareholders‘ wealth.

2.6. Values:

Core values include-

Client is the center of attention.

Quality.

Honesty.

Team work.

Respect for individual.



2.7. Branch Information:

The number of branches as it stands now is 72 (2012). Steps are taken to open few more

branches at commercial important places throughout the country by the year 2013.

2.8. The Head Office Corporate Branch:

Head Office Corporate Branch of EXIM Bank Limited has achieved the confidence of

the customers immediately after its establishment by providing superior quality service

with sincerity. The branch is located at the central point of Gulshan Avenue of Dhaka

City. The total number of employees in this Branch is 28 including the SEVP as Branch

manager & 3 AVPs as the in-charge of General banking, Foreign Exchange & Investment

operations.

2.9. Key Functions of EXIM Bank:

Like other commercial banks EXIM bank performs all traditional banking business

including offering a wide range of caving and credit products, retail banking and ancillary

services, but the Bank emphasizes its function in export and import trade handing and

financing of export oriented industries will enhance wealth, quotes more employment

opportunities helps formation of capital and reduces in balance in the balance of payment

of the country.

2.10. Performance of EXIM Bank:

The Bank is widely acclaimed by the business community, from small

business/entrepreneurs to large traders and industrial conglomerates, including the top

rated corporate borrowers from forward-looking business outlook and innovative

financing solutions. In year 2011 EXIM Bank Ltd. made commendable performance in

all business areas like Deposit, Credit, Fund Management, Investment and Foreign

Exchange related business.



2.11. Social Commitment:

The purpose of the banking business is, obviously, to earn profit, but the promoters and

the equity holders of EXIM bank are aware of their commitment to the society to which

they belong. A chunk of the profit is kept aside and spent for socio-economic

development through trustee and in patronization of art, culture and sports of the country

and the bank wants to make a substantive contribution to the society where it operates, to

the extent of separable resources.

2.12. Product and Services of EXIM Bank ltd.:

During the short span of time, the bank has been highly recognized and praised by the

business community, from small entrepreneurs to large traders and industrial

conglomerates and emerged as the fastest growing among the third generation banks in

respect of business and profitability.

EXIM Bank successfully marketed its products designed to fulfill the needs of various

socio-economic strata. Attractive features of the products have given a distinctive image

among the private banks. The bank has been making continuous endeavor to offer new

products and services. As a commercial bank, they provide all traditional banking

services, which are:

General Banking Department

Foreign Exchange Department &

Investment Department

These three departments are providing services:

2.12.1. Deposit products:

Al-Wadiah Current Deposit Account

Mudaraba Monthly Income Scheme

Mudaraba Monthly Savings Scheme



Mudaraba Super Savings Scheme (Double Scheme)

Mudaraba Hajj Scheme

Mudaraba Savings Deposit Account (MSB, MSTD, RFCD, NFCD)

Mudaraba Term Deposit Receipt

2.12.2. Investment Products:

Corporate Finance

Commercial Finance

Industrial Finance

Project Finance

Lease Finance



2.13.Organogram:

Figure: Organizational Structure of EXIM Bank

Chairman Advisor Board of Directors

Managing Director (MD)

Deputy Managing Director (DMD)

Senior Executive Vice President (SEVP)

Vice President (VP)

Senior Assistant Vice President (SAVP)

Assistant Vice President (AVP)

Senior Principal Officer (SPO)

Principal Officer (PO)

Executive Officer (EO)

Management Trainee Officer (MTO)

Senior Vice President (SVP)

First Assistant Vice President (FAVP)

Additional Managing Director (AMD)



Organizational structure: Head Office

Organizing Structure of Head Office Corporate Branch

HOC Branch

General Banking

AdvanceForeign

Exchange

Import ExportForeign

Remittance

Head Office

General Service

division

Financial

Administration

Division

Establishment and

Business DivisionCredit Division

Import Credit

Division

General Credit

Division

Export Credit

Division

International

Baking Division

Law and Recovery

Division



2.14. Management of EXIM Bank:

For any organization, management is the most valuable resource. A well-organized

management provides the organization strength to reach to its ultimate goal. Management

means planning, organizing, staffing, directing and controlling of all financial and non-

financial resources of an organization. Different aspects of management practice in

EXIM Bank are discussed below.

1. Planning

EXIM Bank does its planning within the preview of the corporate plan. The overall

planning approach in EXIM Bank is top down. Each branch can plan according to the

goal imposed by the corporate level. It doesn‘t plan independently. And EXIM Bank has

a planning division.

2. Organizing

EXIM Bank is organized as per the existing business locations. It has 72 branches each of

which is a separate entity. Each unit is responsible for own performance and a senior vice

president (SVP) followed by Manager (Second Officer) heads each. S/he is responsible

for the performance of her/his unit.

3. Staffing

The recruitment in EXIM Bank is done in two ways. One as ‗MTO‘ for the management

program and it has a probation period of two years. Another one is non-management

level as ‗Trainee Officers‘. ‗MTO‘ is recruited in officer category and their career path is

headed towards different managerial jobs.

4. Directing and controlling

The management approach in EXIM Bank is top down. Information just seeks through

lower management layer. Works are designed in such a way that one cannot leave

without clearing the tasks as he is assigned for a day. Sitting arrangement in all office is

done in a way that the superior can monitor the subordinate all time. Budgeting,

rewarding, punishing, etc. are also practiced as control mechanism.



Human Resource practices in EXIM Bank

Employees are the core resource of EXIM Bank & human resources approach is

concerned with the growth and development of people toward higher level of

competency, creativity and fulfillment. It helps employees become better, more

responsible, and then it tries to create a climate in which they may contribute to the limits

of their improved abilities. It assumes that expanded capabilities and opportunities for

people will lead directly to improvements in operating effectiveness. Essentially, the

human resources approach means that better people achieve better results.

Recruitment

The set-vice rule of EXIM Bank states the recruitment policy of the bank. In general the

board of directors determines the recruitment policy of the bank from time to time. The

minimum entry-level qualification for any official position other than supportive

management is a Bachelors degree.

2.15. Financial Highlights of the EXIM Bank Ltd.:

As a commercial Bank, EXIM Bank Ltd performs all traditional Banking business

including the wide range of savings and credit scheme products, retail banking with the

support of modern technology and professional Excellency. But its main focus is, on

export and import trade handling and the development of entrepreneurship of private

sectors.

Sources and Uses of Fund

The compositions of sources of banks fund are paid up capital, reserve, customer deposit

and call loan from different banks. The bank used major portion of this fund for

investment in loans and advance. The bank also invested in securities and shares. The

surplus fund was applied in call money market to earn satisfactory returns.



Financial Highlights of EXIM Bank

Sl. No Particulars 2009 2010

1 Authorized Capital 350.00 350.00

2 Paid-up Capital 267.78 297.63

3 Reserve Fund 153.26 182.51

4 Deposits 5758.70 6300.29

6 Investment ( Shares on Bonds) 289.40 344.21

7 Foreign Exchange Business 11790.01 15643.46

a) Import Business 7854.05 8236.99

b) Export Business 7646.56 7969.55

c) Remittance 142.85 181.70

8 Operating Profit 251.84 303.70

9 Loan as a % of total Deposit 96.75% 93.14%

10 No. of Foreign Correspondent 280 302

11 Number of Employees 1104 1312

12 Number of Branches 50 59

13 Return on Assets 2.19% 3.54%



3.1. Literature Review:

The international monetary systems refer primarily to the set policies, institutions,

practices, regulations and mechanisms that determine the rate at which each currency is

exchanged for another (Shapiro, 2001) in the trading of currencies & settlement &

facilitation of international trade and investment. If there was a single international

currency, there would be no need for a foreign exchange market.

The purpose of foreign exchange market is to enhance transfer of purchasing power

dominated in one currency for another currency. The foreign exchange market is not a

physical place rather it is an electronically linked network of banks, foreign exchange

brokers and dealers whose function is to bring together buyers and sellers of foreign

exchange. It is not confined to any one country, but is dispersed throughout the leading

financial centers of the world (Shapiro, 2001).

Foreign exchange market consists, of two tiers, the Interbank market in which major

banks & financial institutions trade with each other and the Retail market in which banks

deal with their commercial customers (Redhead and Hughesis, 1998). The major

participants in the foreign exchange market are the large commercial banks, foreign

exchange brokers in the interbank market, commercial customers-primarily multi-

national corporations and Central Banks which intervene from time to time in the market

to smoothen exchange rate fluctuations or to maintain target exchange rates.

Exchange rates represent the number of units of a given currency of one country that can

be exchanged for unit of another currency (Van Horne, 1996). Today foreign exchange

has been the talk of the town, and this is because foreign exchange plays a very crucial

role in the overall performance of the national economy. The practice of managing

foreign exchange resources has therefore evolved broadly in line with the globalization

and liberalization of economies and financial market. This has played over such areas as

risk management and active portfolio management. Broadly speaking foreign exchange is

held and managed to facilitate international transactions (Anifowoshe, 1997).

Consequently, some of the objectives which management of foreign reserve seeks to

achieve include security, liquidity, profitability and adequacy of the reserves.

Nwakwo, 2001, was of the opinion that foreign exchange major tasks is to ensure that the

reserves are maintained at an adequate level to serve as cushion or buffer at times of



temporary foreign short falls in foreign exchange receipt. In fact such a respite enables

country to put its house in order and adopt necessary measures to deal with the external

shock destabilizing the Economy (Nwakwo, 2001).

Foreign exchange is a subset of external reserves but typically it constitutes the bulk

of the reserves. In fact it is the component that issued on daily basis for settlement of

international transactions hence foreign exchange management refers to the technique of

efficient and optimal holding and deployment of the nation‘s foreign exchange reserves

to meet its external obligations and other economic objectives; as assigned by the Central

Bank.

Indeed the consolidation of the external reserves holding has foisted on the banks the

challenges of adoptive and sharpening management skills that would ensure that the

reserves are not only conserve but also optimally deployed for essential needs. This has

over the years entailed designing ways of effectively monitoring the use of foreign

exchange resources.

The use of trade and exchange controls as tools of reserve management involved

comprehensive restrictions on trade and other inter-national transactions. The main

objectives here are to ensure that foreign exchange reserve, are conserved and adequate to

guarantee external stability and that the available resources are optimally used to promote

domestic production (Anifowoshe, 1997).

3.2. Bank:

A bank is a firm or institution doing a bonafide banking business, where debts are

commonly accepted in final statement of other people‘s debts; an organization, usually a

corporation, chartered by a state or federal government, which does most or all of the

following: receives demand deposits and time deposits, honors instruments drawn on

them, and pays interest on them; discounts notes, makes loans, and invests in securities;

collects checks, drafts, and notes; certifies depositor's checks; and issues drafts and

cashier's checks.



3.3. Islamic Banking:

Islamic banking has been defined in a number of ways. The definition of Islamic bank, as

approved by the General Secretariat of the OIC, is started in the following manner, ―An

Islamic bank is a financial institution whose status, rules and procedures expressly state

its commitment to the principle of Islamic Shariah and to the banning of the receipt and

payment of interest on any of its operations‖ (Ali & Sharkar 1995, pp.20-25).

So we can say as Islamic banking is systems of financial intermediation that avoids

receipt and payment of interest in its transactions and conducts its operations in a way

that it helps achieve the objectives of an Islamic economy. Alternatively, this is a banking

system whose operation is based on Islamic principles of transactions of which profit and

loss sharing (P/L Sharing) is a major feature, ensuring justice and equity in the economy.

That is why Islamic banks are often known as PLS-banks.

3.4. History of Islamic banking in Bangladesh:

In August 1974, Bangladesh sighted the Charter of Islamic Development Bank and

committed itself to reorganize its economic and financial system as per Islamic Shariah.

In January 1981, Late President Ziaur Rahman while addressing the 3rd

Islamic Summit

Conference held at Makkah and Taif suggested, ―The Islamic countries should develop a

separate banking system of their own in order to facilitate their trade and commerce.‖

This statement of Late President Ziaur Rahman indicate favorable attitude of the

Government of the People‘s Republic of Bangladesh towards establishing Islamic banks

and financial institutions in the country. Earlier in November 1980, Bangladesh Bank, the

country‘s Central Bank, sent a representative to study the working of several Islamic

banks abroad.

Alongside the conventional interest bearing banking system, Bangladesh entered into an

Islamic Banking system (Profit & loss sharing) in 1983. At present, 6 private commercial

banks are operating as full-fledged Islamic bank and 10 conventional banks are partially

involved in Islamic banking in a total more then 20 branches. At the very beginning

EXIM Bank started its journey as an interest based conventional bank. But it converted

into a full-fledged Islami-Bank based on Shariah with effect from 1st July 2004.



3.5. Overview of Foreign Exchange:

No country is self sufficient in the modern world, one country has to depend on the others

and from this point of view there raises the question of foreign trade and foreign currency

transactions. That is, the international trade involves foreign exchange transactions

particularly for receipt and payment against export and import of goods and services from

one country to another. As without foreign exchange transactions we cannot think of

foreign trade. Of course, various rules and regulations are to be followed in collection

with the foreign trade and foreign exchange transactions.

It is well known fact that the money is a medium of exchange for all transactions that

take place inside the country as well as outside the country. In Bangladesh, we have the

Taka for financing the internal trade and other obligation. So, the home currency has to

be converted into currencies of other countries, to meet the obligation that arises out

import of goods and services from other countries. That part of the economic science that

deals with the conversion of home currency into foreign currency for the purpose of

setting international obligations is called foreign exchange.

3.6. Definition of Foreign Exchange:

Foreign Exchange means foreign currency and includes all deposits, credits and

balance of payable in foreign currency as we; as Draft, Traveler‘s checks, Letter

of Credit, Bills of Exchange drawn in local currency but payable in foreign

currency.

- Foreign Exchange Regulation ACT, 47, Sec 2 (a)

Foreign exchange means foreign currency and includes any instrument drawn,

accepted, made or issued under clause 13 of section 16 of the Bangladesh bank

Order, 1992 all deposits and credits and balances, Travelers checks, Letter of

Credit and Bills of Exchange, expressed or drawn in Bangladesh currency but

payable in any foreign currency.

- Bangladesh Bank Order 1972.



3.7. Fundamentals of Foreign Exchange Policy:

There are 3 fundamental aspects in the general mechanisms of foreign exchange:

Every country has its own currency legal distinctive unit account.

The exchange rate affected by means of credit instruments e.g. draft, mail,

transfer, telegraphic transfer etc.

Banks by book keeping entry carried out in the two centers concerned effect the

conversion of one currency into another.

3.8. Activities of Foreign Exchange Department of a Bank:

Foreign Exchange department deals with foreign currency and the transaction of it. The

major jobs of this department are listed below:

1. Issuing Letter of Credit (LC)

2. Dollar/Traveler‘s Check Endorsement

3. Foreign Remittance

4. Maintain Foreign Currency Account.

3.8.1. Letter of Credit (LC):-

3.8.1.1. Definition of Letter of Credit

A letter of credit is an instrument issued by a bank to a customer placing at the letters

disposal such agreed sums in foreign currency as stipulated. An importer in a country

requests his bank to open a credit in foreign currency in favor of his exporter at a bank in

the latter‘s country. The letter of credit is issued against payment of amount by the

importer or against satisfactory security. The L/C authorizes the exporter to draw a draft

under its terms and sell to a specified bank in his country. He has to hand over to the

bank, the Bill of exchange, shipping documents and such other papers as may be agreed

upon between the exporter and the importer. The exporter is assured of his payment

because of the credit while the importer is protected because documents in respect of

export of goods have to be delivered by the exporter to the paying bank before the

payment is made.



3.8.1.2. Types of letter of credit

A letter of credit (L/C) may be two forms. These as below:

i) Revocable letter of credit.

ii) Irrevocable letter of credit.

These are given below -

Revocable Credit: a revocable credit is a credit which can be amended or

cancelled by the issuing bank at any time without prior notice.

Irrevocable Credit: an irrevocable credit constitutes a definite undertaking of the

issuing bank (since it can not be canceled without the agreement of all parties

thereto). Provided that the stipulated documents are presented and the terms and

conditions are satisfied by the seller. An irrevocable credit can be either

confirmed or unconfirmed depending on the desire of the seller. This sort of the

credit is always preferred to revocable letter or credit.

3.8.1.3. Application for Issuing Letter of Credit

The importer would apply on bank's standard form to his bank (say, Modern 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 includes the following items:

Full name and address of the supplier, manufacturer or beneficiary (including his

bank).

Opener's name and address (including import license no. etc.).

The total amount of credit asked for.

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.

The terms of sale, i.e. whether the contract is on CIF, CNF, FOB basis.

The risks to be covered under the policy and the amount of insurance.



Brief description of goods including quantity, quality and unit price.

The terms of payment; whether on DA (Documents against Acceptance) or DP

(Documents against Payment) basis.

Specified documents required, such as, invoice, bill of lading etc.

3.8.2. Dollar/Traveler’s Check Endorsement:-

A check endorsement refers to how the back of a check or written upon by the person that

receives the check. When receiving a check, there are many ways that it can be endorsed.

These are Blank Endorsement, Restrictive Endorsement, Conditional Endorsement,

Special Endorsement and Qualified Endorsement.

3.8.3. Foreign Remittance:-

‗Foreign remittance‘ means purchase and sale of freely convertible foreign

currencies as admissible under Exchange Control Regulations of the country.

Purchase of foreign currencies constitutes inward foreign remittance and sale of

foreign currencies constitutes outward foreign remittance. So we see that there are

two types of Foreign Remittance:

• Foreign Inward Remittance &

• Foreign Outward Remittance

3.8.4. Foreign Currency Account:-

If one regularly receives or needs to make payments in a foreign currency, the Foreign

Currency Account will help to manage funds easily. It's a current account but instead of

having a balance in sterling, account operates in a currency of account holder‘s choice.

Like a sterling current account, one can have a check book and regular statements.

3.9. Income of the Bank in Foreign Exchange Sector:

Commission on opening a BTB L/C which is determined on the basis of ―Bill for

Collection‖ selling rate.

0.45% commission on the deferred L/C for 120 days & 0.30% commission on the

deferred L/C for 90 days if the applicant bank accept the bill for payment (ABP)

in respect of its application.



Tk. 500 foe shipping guarantee to the customs department of the port if the

applicant wants to discharge the imported products before receiving the

documents related to export. The bank acts as a guarantor taking all

responsibilities related to payments.

7-10% interest rate on packing credit.

4.0. Foreign Exchange Department of EXIM Bank:

Foreign exchange is an important department of EXIM Bank Limited, which deals with

import, export and foreign remittances. Foreign Exchange is an International Department

of the Bank. It facilitates international trade through its various modes of services. It

bridges between importers and exporters. This department mainly deals in foreign

currency, that's why it is called foreign exchange department.

This department is playing an important role in enhancing export earnings, which aids

economic growth and in turn it helps for the economic development. On the other hand, it

also helps to meet demand of those goods and service, which are most demandable and

not adequate in our country.



Functions of Foreign Exchange Department

The bank, which is authorized by Bangladesh bank for dealing foreign exchange business on

transaction under the FER Act, 1947 is called Authorized Dealer. The HOC Branch of EXIM

Bank is an Authorized Dealer. In EXIM Bank limited foreign exchange is divided in to three

parts according to the major activities:

Import oriented foreign exchange activities.

Export oriented foreign exchange activities.

Foreign Remittance Operation.

4.1.0. Import procedure of EXIM Bank:

Import or export any goods into Bangladesh except in case of exemption issued by the

Government of the People‘s Republic of Bangladesh as per Import & Export Control Act-1950.

So for doing import business at first every importer should obtain Import Registration Certificate

(IRC).

Foreign Exchange

Import Export Remittance

Opening L/C

Loan Against

Trusted Receipt

Loan against Import

Merchandise

Payment against

Document

Foreign Trade

Export L/C

Advising

Pre-shipment

Finance

Post-shipment

Finance

Foreign Bill for

Collection

Inward

Remittance

Outward

Remittance



IMPORTER/

APPLICANTEXPORTER/

BENEFICIARY

CBLADVISING BANK/

NEGOTIATING BANK

CONFIRMING

BANKPAYING/

REIMBURSING BANK

Proforma Invoice

Pre

sent

s do

cum

ents

(10

)

Mak

es p

aym

ent

agai

nst d

ocum

ents

(11

)

L/C

app

licat

ion,

Inde

nt/P

-Inv

oice

(1)

Mak

es p

aym

ent b

y

nego

tiatin

g do

cum

ents

(7)

L/C

Adv

ice

(3)

Forward documents (8)

9 (a

)

Inst

ruct

ion

to p

ay o

r re

imbu

rse

Pay

or

reim

burs

e

Con

firm

atio

n P

rovi

ded

(5)

BUYING HOUSE/

INDENTOR

Sub

mitt

ed d

ocum

ents

(6)

LC Issue (Transmission of L/C) (2)

Make Payment (9)

Offe

r &

Acc

epta

nce

Inde

nt

Confirmation Request (4)

1. Flow Chart of L/C

Section: A

Flow chart: - Import Procedure of EXIM Bank

4.1.1. Major steps of Import L/C Operation procedures by steps are as follow:

A conditional written undertaken issued by the importer‘s (applicant) bank to the exporter

(beneficiary) at the request of the importer to effect payment up to a stated amount within a stated

time period against presentation of complaint documents.



4.1.1.1. Step 1 - Registration with Chief Controller of Import and Export(CCI&E)

By paying specified registration fees to the CCI&E. the trader will get [RC/ERC

(Import/Export Registration Certificate), to open L/C with bank, this IRC is must.

4.1.1.2. Step 2 - Determination terms of credit

The terms of the letter of credit are depending upon the contract between the Importer

and exporter. The terms of the credit includes the amount of credit, name and address of

the beneficiary and opener, tenor of the bill of exchange, period and mode of shipment

and of destination, nature of credit, expiry date, name and number of sets of shipping

documents etc.

4.1.1.3. Step 3 - Proposal for Opening of L/C

To have an import LC limit an importer submits an application to department to EXIM Bank.

The proposal contains the following particulars:

Full particulars of the bank account

Nature of business

Required amount of limit

Payment terms and conditions

Goods to be imported

Offered security

Repayment schedule

4.1.1.4. Step 4 - Application by importer to the banker to open letter of credit

For opening L/C, the importer is required to fill up a prescribed application form provided by the

banker along with the following documents:

1. L/C Application form 7. Authority to debit account

2. Filled up LCA form 8. Filled up amendment request Form

3. Demand Promissory Note 9. IMP form

4. pro-forma invoice 10. Insurance cover note and money

receipt.



Procedure for obtaining Import Registration Certificate (IRC)

Through public notice or import policy the chief controller of import and exports invites

application usually for registration of importers. The following documents are required to submit

for getting Import Registration Certificate (IRC).

Application form

National Certificate

Income tax registration certificate with TIN

Trade license

Membership Certificate

Certificate of registration with the register of joint Co. & Articles and Memorandum of

Association in case of limited company

Bank Certificate

The nominated of the applicant will examine the documents and verify the signature of the

applicant and forward the same to the concerned office of the CCI&E in duplicate through bank

representative. The duplicate copy of the same bearing the acknowledgement of CCI & E office

of the receipt of the document is received by the bank and is preserved.

4.1.1.5. Step 5 - Opening of L/C by the bank for the opener:

Taking filled up application form from the importer

Collects credit report of exporter from exporter‘s country through his foreign

correspondence there

Opening bank then issues credit by air mail/TEL EX/SWIFT followed by L/C advice as

asked by the opener through his foreign correspondent or branch as the case may be, at

the place of beneficiary. The advising bank advises the L/C to the beneficiary on his own

/form where it is addressed to him or merely hand over the original L/C to the beneficiary

if it is so addressed.

5. Tax Identification number 11. Membership certificate

6.Import registration certificate (IRC)

12. Rate fluctuation undertaking



4.1.1.6. Step 6 - Shipment of goods and lodgment of documents by exporter:

Then exporter ships the goods to the destination of the importer country.

Sends die documents to the L/C opening bank through his negotiating bank.

Generally the following documents are sent to the Opening Banker with L/C:

1. Bill of Exchange 6. Packing List

2. Bill of Lading 7. Advice Details of Shipment

3. Commercial Invoice 8.Pre-shipment Inspection Certificate

4. Certification of Origin 9. Vessel Particular

5. A certificate stating that each packet contains the description of goods over the

packet.

10.Shipment Certificate

4.1.1.7. Step 7 - Lodgment of Documents by the opening Bank from the negotiating

bank

After receiving the documents, the opening banker scrutinizes the documents. If any discrepancy

found, it informs the importer, If importer accepts the fault, then opening bankers call importer

retiring the document. At this time many thing can happen. These are indicated in the following:

Discrepancy found but the importer accepts - no problem occurs in lodgment.

Discrepancy found and importer not agreed to accept - In this case, importer protest and

send back ail the documents to the exporter and request his to make in the specified

manner. Here banker is not bound to pay because the documents send by exporter is not

in accordance with the terms of L/C.

Documents are OK but importer is willing to retire the documents - In this case bank is

obligated to pay the price of exported goods. Since importer did not pay for bill of

exchange, this payment by bank is one kind of credit to the importer and this credit in

banking is known as PAD.

Everything is O.K. but importer fails to clear goods from the port and request bank to

clear - In this case banks clear the goods and takes delivery of the same by paying

customs duty and sales tax etc. So, this expenditure is debited to the importer's account

and in banking it is called LIM.



4.1.1.8. Step 8 – Retirement

The importer receives the intimation and gives necessary instruction to the bank for retirement of

the import bills or for the disposal of the shipping document to clear the imported goods from the

customs authority. The importer may instruct the bank to retire the documents by debiting his

account with the bank or may ask for LTR (Loan against Trust Receipt .When the officer thinks

fit the application to open a L/C, giving the following entries creates the following charge

4.1.2. Amendment of Letter of credit:

Parties involved in a L/C, particularly the exporter cannot satisfy the terms& conditions in full as

expected due to some unexpected reason. In such a situation, the credit should be amended.

EXIM Bank transmits the amendment by tested telex to the advertising bank.

In case of revocable credit, it can be amended or cancelled by the issuing bank at any moment &

without prior notice to the beneficiary.

But in case of irrevocable L/C, it cans neither be amended nor can nor cancelled without the

agreement of the issuing bank, the advising bank & the beneficiary. If the L/C is amended,

service and telex charge is debited from the party account.

4.1.3. Payment procedure of the Import Documents

This is the most sensitive task of the import department. The officials have to be very much

careful while making payment. The task constitute the followings-

Date of payment- Usually payment is made within seven days after the documents have

been received. If the payment is become differed, the negotiating bank may claim interest

for making delay.

Preparing sale memo- a sale memo is made at B.C rate to the customer. As the TT & OD

rate is paid to the ID, the difference between these two rates is exchange trading. Finally

an inter branch exchange trading credit advice is sent to ID.

Requisition for foreign currency- for arranging necessary fund for payment a requisition

is sent to the ID.

Transmission of telex- a telex is transmitted to the correspondent bank ensuring the

payment is being made.



4.2. Export procedure of EXIM Bank:

By the term Export, we mean that selling of anything from home country to abroad. On the other

hand Banker's define export as sending of visible things outside the country for deal. Export

Trade plays a vital role in the development process of an economy. With the export earning, we

meet our Import Bills. The export trade of the country is regulated by the Import and Export

(Control) Act, 1950. There are some formalities, which an exporter has to fulfill before and after

shipment of goods. The export section of EXIM Bank deals –

I. Export &

II. Local Purchase.



4.2.1. The procedure of Export:

3. Pass LC

2. Request of Issue LC 4. Advice LC

5. Request for transfer

1.Performa Invoice

18(a). Produce & Ship goods

9. P/I of BB LC

13(a). Shipment of goods

6. Transfer LC

8.Make authentication of the Advice

20. Receive the Export Proceeds 21. Credit after adjusting all liabilities

19. Send the Documents 18(b). Submit of Export documents

17. Disburse ECC/PC

13(b). Submit the Documents 16. Request of ECC/PC

12. Advice BB LC 10.Request to Issue BB LC

7. Submit Export LC

11. Issue & Pass BB LC

14. Send Documents

15. Acceptance is provided

22. Pay as per Acceptance

Flow chart: - Export LC & Export Finance of EXIM Bank

Negotiating Bank/ Importer of BB LC

Advising Bank/

Negotiating Bank of

BB LC

If no transfer then, skip 2

nd Beneficiary and

as well as Sequence No. 5 & 6

1st Beneficiary

2nd Beneficiary

Issuing Bank Advising Bank

Beneficiary of BB

LC

Importer



4.2.2. Major steps of Export:

There are a number of steps or formalities, which an exporter has to fulfill before and after

shipment of goods. These procedures are enumerated as follows:

4.2.2.1. Registration from Chief Controller of Import & Export (CCI & E):

No person without registration granted by the chief controller of imports and exports shall

anything into or out of Bangladesh except in case of exemption issued by the government. Under

the export policy of Bangladesh the exporter has to get the valid Export Registration Certificate

(ERC) from Chief Controller of Import and Export (CCI & E). The ERC is required to renew

every year. The ERC number is to be incorporated on Export Form (EXP) form and other papers

connected with exports.

Obtaining Export Registration Certificate (ERC):

For obtaining Export Registration Certificate (ERC), Bangladeshi exporters are required to apply

to the Chief Controller of Import & Export (CCI & E) in prescribe from along with the following

documents:

Nationality and assets Certificates

Memorandum and Articles of Association and Certificate of

incorporation in case of limited company.

Bank Certificate.

Income Tax Certificate.

Trade License etc.

Obtaining Export Form (EXP):

After getting ERC the export applies to EXIM (or any other commercial bank) with trade license

and if the bank is satisfied, an EXP issued to the exporter.

Before the Export Forms are lodged by the exporter with the customers‘ authorities, they should

get all the copies endorsed by EXIM Bank. Before shipment exporter submit EXP form with

commercial invoice. Then EXIM Bank officer checks it properly if satisfied certifies the EXP.

Without it, exporter cannot make shipment. The customer has to declare all exports goods on the

EXP issued by the authorized dealers.



Disposal of Export Form (EXP):

Securing of Order: After getting the ERC exporter may proceed to secure the export order. He

can do this by contracting the buyers directly through correspondence. In this purpose exporter

can get help from:

Liaisons Offices

Buyers Local Agent

Export Processing Organization

Bangladesh Mission Abroad

Chamber of Commerce

Trade Fair etc

4.2.2.2. Signing of the contract:

After communicating with buyer the exporter has to get contracted for exporting exportable items

from Bangladesh detailing commodity, quality, price, shipment, insurance and mark, inspection,

and arbitration etc.

4.2.2.3. Procuring the Materials

After making the deal and on having the L/C opened in his favor, the next step for the exporter is

to set about the task of procuring or manufacturing the contracted merchandise.

These documents are needed for Shipment of goods:

Bill of exchange or Draft

Export Form (EXP)

Export Registration Certificate (ERC)(valid)

Original

From Custom Authority to Bangladesh Bank after shipment goods.

Duplicate

From Negotiating Bank to Bangladesh Bank after Negotiation.

Triplicate

From Negotiating Bank to Bangladesh Bank after realization of the

proceeds of the Export

Quadruplicate

Retained by the Negotiating Bank as Office Copy.



Letter of Credit (L/C) copy

Bill of exchange

Bill of Draft

Bill of Lading

Custom Invoice of Importer's Country

Insurance policy or certificate

Certificate of Origin

Inspection Certificate by the Agent of Importer

Consular invoice

Packing List 8 copies (including 4 original)

Quality Control Certificate

G.S.P certificate

Photo

Now exporter submits all these documents along with a letter of Indemnity to EXIM bank for

negotiation, an officer scrutinizes all the documents. If the documents are clean, EXIM purchase

the documents on the basis of banker customer relationship. This is known as foreign

Documentary Bills Purchase (FDBP).

4.2.2.4. Forwarding Foreign Bills of Collection

If the documents have discrepancies

If the banker is in doubt.

If the exporter is a new customer.

Foreign Documentary Bill for Collection signifies that the exporter will receive payment

only when the issuing bank gives payment

4.2.2.5. Import Documents Associates with Export

While negotiating export bills is under the letter of credit, the officers of EXIM Bank Ltd. check

or examine the following documents to ensure:

Letter of Credit (L/C): If the exporter wants the L/C to be transferable, divisible, and

advisable, he should ensure those stipulations are specially mentioned in the L/C. and for

operating letter of credit (L/C) check or examine the following documents is given here-



Receiving the Letter of Credit:

When get contract for sale, exporter should ask the buyer for Letter of Credit clearly stating terms

and conditions of export and payment.

After receiving L/C, the following points are to be looked for:

i. The terms of the L/C are in conformity with those of the contract

ii. The L/C is an irrevocable one, preferably confirmed by the advising bank

iii. The L/C allows sufficient time for shipment and a reasonable time for

registration

Bill of Exchange / Draft : These following items are checked -

i. Whether the draft bears the current reference number or not.

ii. Whether the signature and the name of the Drawer corresponds with the

beneficiary.

iii. Whether it is drawn on the correct drawee.

iv. Whether the amount in figures corresponded exactly with the amount in word.

v. To see whether the draft properly prepared according to the credit.

Bill of Lading : These following items are also checked -

i. To ensure the bill of landing has been made out in the prescribed form.

ii. Whether it is enclosed (if required).

iii. Whether the B/L is properly signed.

iv. To ensure the shipped on board notation is present on the B/L.

Commercial Invoice : These following items are checked -

i. Whether the currency of the invoice is the same as that of the L/C.

ii. Whether the invoice covers the complete shipment as required by the L/C.

iii. To ensure the correct number of original & copy is presented.

Certificate of Origin : These following documents are checked -

i. To ensure it is a unique document & not combined with any other document.

ii. To check whether it is signed & notarized as required by the L/C or not.



4.2.3. Shipment of goods:

Exporter makes shipment according to the terms and conditions of L/C.

4.2.4. Procedure for collection of Export Bill:

There are two types of procedures regarding collection of Export Bill —

Foreign Documentary Bill for Collection (FDBC):

Exporter can collect the bill through negotiating bank on the basis of collection. Exporter in this

case, will submit all the documents to the negotiating bank for collection of bill from importer.

The exporter will get money only when the issuing bank gives payment. In this connection bank

will scrutinize all the documents as per terms and conditions mentioned in L/C.

Foreign Documentary Bill for Purchase (FDBP):

When exporter sale all the export documents to the negotiating bank is known as Foreign

Documentary Bill Purchase (FDBP). In this case, the exporter will submit all the documents to

the bank. The bank gives 60-80% amount to the exporter against total L/C value.

4.2.5. Local Document Bill for Purchase (LDBP) of Export division:

Activities of Export division dealing in the Local Purchase, which is given below -

i. Application of L/C by party

ii. Scrutinizing documents as per L/C terms and conditions by the Bank

iii. Forward the documents to L/C opening bank A/C

iv. Facilities the L/C to the other bank

v. Payment given to the party by collection basis or by purchasing documents.

4.2.6. Use of Back-To-Back L/C:

It is simply issued to the clients against an import L/C. Back-to-Back mechanism involves

two separate L/C. One is master Export L/C and another is Back-to-Back L/C. On the

strength of Master Export L/C bank issues bank to Back L/C. Back-to-Back L/C is

commonly known as Buying L/C. On the contrary, Master Export L/C is known as Selling

L/C.



4.2.6.1. Features of Back to Back L/C:

Back to back L/C has some feature which is given below:

An Import L/C to procure goods /raw materials for further processing

It is opened based on Export L/C.

It is a kind of Export Finance.

No margin is required to open Back to back L/C

Application is registered with CCI&E

Applicant has bonded warehouse license.

L/C value shall not exceed the admissible percentage of net FOB value of relative

Master L/C

Use period will be up to 180 days.

The import L/C is opened for 75% of the value of Export L/C.

Here L/C issued against the lien of export L/C

Arrangements are such that export L/C matures first then out of this export profit,

import L/C is paid out.

4.2.6.2. Back To Back L/C Open:

It is a secondary letter of credit opened by the advising bank in favor of a domestic/foreign

supplier on behalf of the beneficiary original foreign L/C. As the original letter of credit of bank

by import letter, it is called Back-to-Back L/C. The second L/C is opened on the strength of the

original L/C for a smaller amount.

Back To Back L/C (Foreign):

When the Back-To-Back L/C is opened in a foreign country supplier it is called Back-To-Back

L/C (Foreign). It is generally payable within 120 days at site.

Back L/C (Local):

When the Back-to-Back L/C is opened for local purchase of materials, it is called Back-to-Back

L/C (Local). It is generally payable within 90 days at site.



4.2.6.3. Documents Required for Opening a Back-to-back L/C:

In EXTM Bank Principal Branch, following papers or documents are required for opening a

back-to-back L/C- :

Master L/C

Valid Import Registration Certificate (IRC) and Export Registration Certificate (ERC)

L/C Application and LCAF duly filled in and signed

Performa Invoice or Indent

Insurance Cover Note with money receipt

IMP Form duly signed

In addition to the above documents, the followings are also required to export oriented garment

industries while requesting for opening a back-to-back L/C:

Textile Permission

Valid Bonded Warehouse License

Quota Allocation Letter issued by the Export Promotion Bureau (EPB) in favor of the

applicant for quota items.

4.2.6.4. Payment of back to back L\C:

In case back to back as 60-90-120-180 days of maturity period, deferred payment is made.

Payment is given after realizing export proceeds from the L/C issuing bank.

4.3. Foreign Remittance Section

EXIM Bank has 72 branches throughout the entire country and therefore, they serve as best

medium for remittance of funds from one place to another. This service is available to both

customers as well as non-customers of the Bank. The following are some of the important modes

of transferring funds from one to another through a bank.

4.3.1. Functions of the Remittance Section

Handling of all incoming and outgoing foreign and local remittance is the major

function for this department.

Handling of incoming and outgoing T.T.



Outstation Cheque collection/purchase.

Demand Draft Handling.

Other assorted work.

4.3.2. Foreign Remittance Process

Fund transfer from one country to another country goes through a process which is known as

remitting process. Suppose a local bank has 200 domestic branches. The bank has corresponding

relationship with a foreign bank say-―X‖, and maintaining ―NOSTRO Account‖ in US $ with the

bank. Bangladeshi expatriates are sending foreign remittances to their local beneficiary, through

that account. Now, when the Bangladeshi expatriates through other banks of different countries

remit the fund to their ―NOSTRO Account‖ with ―X‖, then the local bank‘s Head Office

international division will receive telex message and the remittance section will record the advice

and generate the advice letter to the respective branch of the bank. The branch will first decode

the test, verify signature and check the account number and name of the beneficiary. After full

satisfaction, the branches transfer the amount to the account of the beneficiary and intimate the

beneficiary accordingly. But some times the complexity arises, if the respective local bank has

no branch where the beneficiary maintains his account. Then the local bank has to take help of a

third bank who has branch there.

Chart: - Flow chart of Remitting Process

“X” Local Bank Nostro Account

Foreign Bank

“B” “A” (Remitter)



4.3.3. Remittance of Funds

4.3.3.1. Inward Remittance

Remittance comes from foreign countries to our country is called inward remittance. To the

bankers or ADs inward remittance means purchase of foreign currency by authorized dealers.

Generally, inward remittances are received by draft, mail transfer, TT, purchase of foreign bills &

travelers Check, export bills. Basically, these are the formal channels of receiving inward

remittance. A local bank also receives indenting commission of local firm also comes under

purview of inward remittance.

Any person can remit funds to another through Inland remittance by using the following means of

remitting funds with charges-

Pay Order (PO)

Demand Draft (DD)

Telegraphic Transfer (T.T)

Mail Transfers

Pay Order (PO)

A pay order is a written under, issued by a branch of the Bank, to pay a certain sum of money to a

specific person or a bank. It may be said as to be a banker‘s cheque as it is issued by a bank and

payable by itself.

Demand Draft (DD)

This is an instrument through which customers money is remitted to another

person/Firm/organization in outstation (outside the clearing house area) form a branch of one

Inward Outward

Remittance

(Inward & Outward)



Bank to an outstation branch of the same Bank or to a branch of another Bank ( with prior

arrangement between that Bank with the issuing branch).

Telegraphic Transfer (TT)

A Telegraphic Transfer is a method of remittance, which is effected by the banker through a

coded telegram attested by secret cheek signal, on receipt of which, the paying office pay the

amount to the payee by crediting his account.

Mail Transfers

This process also occurs through Mail Transfers.

Figure: Inward Remittance

4.3.3.2. Outward Remittance

Remittance from our country to foreign countries is called outward foreign remittance. On the

other word, sales of foreign currency by the authorized dealer or formal channels may be

addressed as outward remittance. The authorized dealers must utmost caution to ensure that

foreign currencies remitted or released by them are used only for the purposes for which they are

released. Out ward remittance may be made by appropriate method to the country to which

Inward

Remittance

Draft

Mail Transfer


Bills & Travelers Cheque

Export Proceed



remittance is authorized. Most outward remittance is approved by the authorized dealer on behalf

of Bangladesh Bank.

Outward remittance may be made for following purposes-

Travel

Medical treatment

Educational purpose

Attending seminar etc.

Balance amount of F.C account.

Profit of foreign companies.

Technical assistance

New exporters up to USD 6,000/- for business promotion

F.C. remittance can be made for fare, exhibition from export retention quota.

Outward remittance in favor of beneficiaries outside Bangladesh may be made in any of the

following manners-

Figure: Modes of Outward Remittance

Demand Draft

Mail Transfer


Letter of Credit

Outward

Remittance



5.0. Analysis of the Particular Topic:

In my internship report my selected topic is Foreign Exchange Operation of EXIM bank and I am

trying to present my analysis both in qualitative and quantitative way.

5.1. Qualitative Analysis:

SWOT Analysis:

SWOT Analysis is the detailed study of an organization's exposure and potential in perspective of

its strength, weakness, opportunity and threat. This facilitates the organization to make their

existing line of performance and also foresee the future to improve their performance in

comparison to their competitors. As though this tool, an organization can also study its current

position, it can also be considered as an important tool for making changes in the strategic

management of the Foreign Exchange activities. According to Foreign Exchange Department and

all perspective SWOT analysis is given below:

Strengths

EXIM Bank introduced first specialist banking service in Export Import sector.

In Foreign Exchange Business EXIM Bank provides their services successfully and have

achieved goodwill among the Shariah based banks.

EXIM Bank Foreign Exchange department communicates with foreign banks frequently

and quickly.

The main activity of EXIM Bank is Foreign Exchange. So there facilities are much better

then other department like skilled personnel and technical sector.

They do almost all the activities through online.

Foreign Exchange of EXIM Bank has extra specialized and qualified staff as technical

sector.

Foreign Exchange of EXIM Bank always tries to be responsible for commitment

according to requirement to the customer.

Foreign Exchange department involve in SWIFT Banking.



Weaknesses

They do not have any strong advertisement.

EXIM Bank has limited branches in rural area to deal with Foreign Exchange

operation.

Charge of L/C is comparably higher than the other bank.

EXIM Bank Remittance investment so poor than other investment.

SWIFT Banking is not started in all branches.

They do not have research & development section.

Opportunities

EXIM Bank has a chance to increase investment in remittance business.

By hiring efficient employees may ensure better services.

By opening branches in rural areas they can expand their business.

They can attract more customers by using or spread online facilities.

Threats

Sometimes Bangladesh Bank certainly gives some rules and regulations which are

difficult to maintain by any department.

As all the branches do not follow the SWIFT banking, market may be loosed.

Government pressures to reduce investment and remittance rate so the income may be

decreased.



5.2. Quantitative Data Analysis:

Quantitative data analysis is given below-

5.2.1. Trend Analysis:

5.2.1.1. Total Foreign Exchange Business in 2011: (Amount in crores)

In 2011 total Foreign Exchange Business of EXIM Bank is shown the pie chart.



5.2.1.2. Total Foreign Exchange: (Amount in crores)

The above graphical presentation shows that during the period 2008 to 2011, over all Foreign

Exchange business is respectively higher than the previous year. It is quite good because banks

performance is better compared to almost every aspect.

5.2.1.3. Import: (Amount in crores)

After observing the figure drawn above, it may be said, during the time period between the years

2008 to 2011; the Import Business of the EXIM Bank was increasing, and the growth is on

average 23.80% which was a good sign. We hope that the EXIM Bank can maintain their Import

business in near future.



5.2.1.4. Export: (Amount in crores)

The above chart shows constantly increase of export since their inception but in the year 2011 is

higher. Export of 2010 was Tk. 5579.04 and 2011 was Tk. 7646.56. Finally we can arrive at a

conclusion that every year export Business of the EXIM Bank is increasing, but in 2011 it is

higher. So the present condition of export growth is better than other years.

5.2.1.5. Foreign Remittance: (Amount in crores)



Here we can find that, during the time period between the years 2008 to 2011; the Foreign

Remittance Business of the EXIM Bank was increased by on average 54.18%, which was a good

sign for this bank. Also we can see that year 2011 banks performance is really good so we think

that the Bank shall increase their Remittance business in future.

5.2.2. Ratio analysis:

Ratio analysis involves the methods of calculating and interpreting the financial ratios to analyze

the firm's relative financial performance. The main purpose of this analysis is to analyze and

monitor the firm's financial performance, so, that the interested parties (both the external and

internal) can realize the firm's actual performance easily and conveniently, which is so much

essential for the parties.

Ratio calculated as: Import ratio = Import / total foreign exchange (Amount in %)

5.2.2.1. Import Ratio

Ratio calculated as: Import ratio = Import / total foreign exchange

(Amount in %)

56.8

51.47 52.0850.21

46485052545658

2008 2009 2010 2011

(Am

ou

nt

in %

)

Year

Import Ratio

Particulars Y2008 Y2009 Y2010 Y2011

Import Ratio 0.568029 0.514652 0.520775 0.502066

Export Ratio 0.428914 0.480734 0.473201 0.488802

Remittance Ratio 0.003057 0.003575 0.006025 0.009132



After observing the figure drawn above, I am able to say that, during the time period between the

years 2008 to 2011, the Import Ratio of the EXIM Bank was not stable, because in 2008 import

ratio was 56.8% but in 2009 it was down 51.47% and during 2010 it was 52.07%. In 2011 banks

lose their performance because the ratio was 50.21% & this is not a good sign.

5.2.2.2. Export Ratio:

Ratio calculated as: Export ratio = Export / total foreign exchange

(Amount in %)

From the above figure, constantly increase of export since their inception but in the year 2011 is

higher 48.88%. Because export ratio of 2008 was 42.89% but 2009 it was much higher 48.07%

and during the year 2010 it was slightly down in 47.32%. Finally we can arrive at a conclusion

that every year export ratio is increasing. They should be holding the position of export business.

42.89

48.07 47.3248.88

38404244464850

2008 2009 2010 2011

(Am

ou

nt

in %

)

Year

Export Ratio



5.2.2.3. Remittance Ratio:

Ratio calculated as: Remittance ratio = Remittance / total foreign exchange

(Amount in %)

Here we can find that the remittance of EXIM Bank was stand with low 0.3057% in 2008 but it

was consistently increasing up to 2011 which is really good sign. So we hope that the EXIM

Bank can hold their performance and year by year it will be more.

6.0. Comparative Analysis:

In this part as comparative analysis of the performances relating to foreign exchange business of

EXIM Bank Ltd. with two of its competitors such as Islami Bank Bangladesh Limited and Al –

Arafa Islami Bank Limited.

By analyzing various foreign exchange business factors within, I have decided that it is fair to

compare of performance of EXIM Bank Limited, with Islami Bank Bangladesh Limited and

Al–Arafah Islami Bank Ltd. because Islami Bank Bangladesh Limited which is the leading best

performing Islami Bank so as comparison with it is like a standard of evaluating to performance

and on the other hand Al–Arafah Islami Bank Ltd. which is same category bank of EXIM Bank

Ltd. in terms of asset, number of employees, number of branches and foreign correspondence in

Banking, etc.

0.3057 0.3575

0.6025

0.9132

0

0.2

0.4

0.6

0.8

1

2008 2009 2010 2011

(Am

ou

nt in

%)

Year

Remittance Ratio



6.1. Comparative Analysis of performance among EXIM Bank Ltd., Islami Bank

Bangladesh Limited and Al–Arafah Islami Bank Limited:

6.1. Trend Analysis:

6.1.1. Deposit: (Amount in Crores)

We can easily present the comparison of EXIM Bank deposit performance with Islami Bank and

Al-Arafah Islami Bank. Deposit of Islami Bank is much higher and Al-Arafah Bank is slightly

lower than that of EXIM Bank. EXIM Bank should take their improving streak seriously to fasten

increase deposit in future.

6.1.2. Overall Foreign Exchange: (Amount in Crores)

The above graphical presentation shows comparison of Overall foreign exchange business. As we

see the above trend we can say that Islami Bank is in better position than both of EXIM Bank and

2009 2010 2011 Year



Al-Arafah Bank. Al-Arafah Bank‘s total Foreign Exchange business is lower than the EXIM

Bank. Though both of EXIM Bank and Al-Arafah Bank‘s performances are upward trending.

6.1.3. Import: (Amount in Crores)

From the above trend, we can say that in 2009 three banks are in upward trend but comparatively

Islami Bank much higher and EXIM Bank Import business needs to fill up this gap by allowing

Back to back L/Cs.

6.1.4. Export (Amount in Crores)

The above graphical presentation shows comparison of export business among EXIM Bank,

Islami Bank and Al-Arafah Bank. The trend of export business of EXIM Bank is near to that of

Islami Bank. It is an achievement of EXIM Bank to accelerate the Export process to enhance

foreign Trade & Foreign income for Bangladesh economy.

2009 2010 2011 Year



6.1.5. Foreign Remittance (Amount in Crores)

As we see the above trend in remittance sector, EXIM Bank and Al-Arafah Bank‘s are in the

same position and on the other hand Islami Bank is leading the trend in 2011. EXIM Bank should

more concentrate of this sector where Islami bank is leading the way.

6.2. Ratio Analysis:

Bank Particulars Y-2009 Y-2010 Y-2011

Islami Bank

Import Ratio 0.479978 0.476127 0.418006

Export Ratio 0.253357 0.231628 0.233333

Remittance Ratio 0.266666 0.292245 0.348661

Al - Arafah

Islami Bank

Import Ratio 0.509047 0.655141 0.595651

Export Ratio 0.247370 0.308033 0.367697


EXIM Bank

Import Ratio 0.514652 0.520775 0.502066

Export Ratio 0.480734 0.473201 0.488802




6.2.1. Import Ratio:

Ratio calculated as: Import ratio = Import / total foreign exchange

(Amount in %)

Import ratio is almost similar in 2009 but in 2010 Al-Arafah Bank is higher than the other two

banks. EXIM Bank is slight higher than Islami Bank. And during 2011 EXIM Bank comes closer

of Al-Arafah Islami Bank. If EXIM Bank focuses more on this sector, they can build competitive

advantage in Import business.

6.2.2. Export Ratio:

Ratio calculated as: Export ratio = Export / total foreign exchange

(Amount in %)



EXIM Bank‘s export ratio is much higher than other two banks. In this sector EXIM Bank has

competitive advantage & doing well. Al-Arafah Bank and Islami Bank are performing average.

6.2.3. Remittance Ratio:

Ratio calculated as: Remittance ratio = Remittance / total foreign exchange

(Amount in %)

As we see the above chart we can say that EXIM Bank performance is poor & nowhere around

that of the other two Banks. Al-Arafah Islami Bank‘s remittance business is also not satisfactory

& decreasing after 2009 but Islami Bank‘s performance is very good. EXIM Bank should be

cautious about this sector.



7.0. Findings:

The major findings of the study are given below:

EXIM Bank HOC Branch Foreign Exchange department communicates with foreign

banks frequently and quickly.

EXIM Bank‘s Export business is really stronger than Islami Bank and Al-Arafah Bank.

In the area of import business the bank is continuously improving.

Performance of Remittance is comparatively not much good against competitors.

The bank has taken initiative to make remittance arrangements with some leading

exchange houses at abroad.

EXIM Bank‘s management information system and financial information system have

been restructured over the recent years to keep pace with the process of development.

In 2011 this bank is done well in foreign exchange operation from the previous year.

The sitting arrangement of the Branch is not well decorated.

They have strong manpower.

All the charges and Interest rate of the EXIM Bank is comparatively lower.

Employees of the Branch maintain good relation with their customer.

For the better facilities people are interested to do business with EXIM Bank.



8.0. Recommendations:

After analyzing Foreign Exchange Operations of EXIM Bank Limited, it can be said that

overall performance of this department of EXIM bank is satisfactory. From the comparative

analysis and findings of the study, the following generalized recommendations can be made for

improvement:

Online facilities of the EXIM Bank should be available to all accountholders

regardless of region.

The bank should take initiative to develop an effective research and development

(R & D) center to promote innovative product or service ideas & to sense threats &

competitiveness in advance to reduce risks & capture competitiveness in the fierce

marketplace.

They may open their activities of SWIFT Banking in rural areas.

The bank should go for advertising about their bank about what types exceptional

of facility they are executing for the customer. As a result banking activities will

expand.

Beside social work the bank have to be more serious to get better position in

CAMEL rating.

EXIM Bank has no Credit Card. To meet today's need of the customer, the bank

should introduce these.

The bank has the provision of internship program for Graduating students but there

is no organized structure & requirement for the internship program. The bank can

properly utilize the internees at fixed tasks on the routine basis yearly at minimum

cost if they wish.



8.1. Conclusion:

As an organization the EXIM Bank Limited has earned the reputation of top banking operation in

Bangladesh. It is relentless in pursuit of business innovation and improvement. It has a reputation

as a partner of consumer growth. Though it is a new bank, EXIM Bank makes a strong position

through its various activities. Its number of clients/ amount of deposit and investment money

increases day by day. This bank already has shown impressive performance in Foreign Exchange

Business.

EXIM bank introduced a specialized banking service in Export Import business. With a bulk of

qualified and experienced human resource, EXIM Bank Limited can exploit any opportunity in

the banking sector. Since its establishment it is rendering its services with qualified and

knowledgeable staff. The environment of EXIM Bank Ltd is very modernized and friendly. The

staffs are specialized in their respective fields. Each of them works on their own and there is

supervision from the top. The motivation of the staff, I believe comes from the very sense of

responsibility. Each member is individually responsible for his or her work.

Consumers are more or less satisfied with the present services of the bank. Management should

think to start new services and take different types of marketing strategy to get more customers in

this competition market of banking.

This report tries to figure out most of the indicators of problems and strengths of EXIM Bank

Limited as a valid pretender in the competitive banking sector of Bangladesh. The main

philosophy of EXIM Bank is to diminish interest and charge or pay fixed interest on loans or

deposits and at the same time establish an egalitarian society based on the principle of social

justice and equity Instead of predator mind interest on deposits.



9.0 References & Bibliography:

Shapiro A.C. 2001. Multinational Financial Management. India: Prentice Hall, Private

Ltd. 4th Edition, pp. 33-45.

Anifowoshe C.A. 1997. Management of Foreign Exchange: A Peep into the next decade.

Nigeria. Ballion, Vol. 21 No. 4, Oct/Dec.

Van Horne J.C. 1996. Financial Management and Policy. Prentice Hall, New Jersey:

International 7th Edition, pp. 717-725.

Yahaya M.I. 2007. Prospects and Challenges of Bankingin Nigeria in the 21st Century,

New Nigeria Newspaper, August 6th.

Radhead K. and S. Hughes. 1998. Financial Risk Management. India: Sower Publishing

Company Ltd.pp. 1 – 24.

Nwankwo G.O. 2001. Bank Management Principles and Practice. UK: Malthouse Press

Limited.

Jeevanandam, C., 2000, Foreign Exchange: Practices and Control, Sultan Chand and

Sons, New Delhi, India.

Rose, S. Peter (2000) Commercial Bank Management, McGraw-Hill Irwin, Boston.

Usmani, Muhammed Taqi (2005), ―Why Islam has prohibited Interest& Commercial

Alternatives for Financing‖, 1st Edition, Tax Planning through Trusts, Bolton, UK.

Economic Trends. Quarterly Journal of the Statistics Dept. of Bangladesh Bank (January

2001–May 2007).

―Free floats the exchange rate.‖ The Daily Star. (May 30, 2003: The Daily Star is one of

the leading national English daily newspapers of Bangladesh).

―Operating the floating exchange rate.‖ The New Nation. (April 24, 2003: The New

Nation is one of the leading national English daily newspapers of Bangladesh).

Monthly Summery Sheet. Export Promotion Bureau, Bangladesh (January 2001–February

2007).

Besley, Scott, Brigham, Eugene F (2008), ―Essentials of Managerial Finance”, 13th

Edition, McGraw Hill, US.

Roes, Peter S., Hudgins, Sylvia C (2005) ―Bank Management and Financial Services, 6th

ed, Mcgraw Hill Publications.



Websites:

Websites of Dhaka Stock Exchange: http://www.dsebd.org

Websites of Stock Bangladesh: http://www.stockbangladesh.com &

Websites of all listed Commercial Banks in Dhaka Stock Exchange.

Bibliography:

Several Booklets from EXIM Bank.

Several Newsletter s from EXIM Bank.

Different types of brochures of EXIM Bank.

EXIM Bank web site [www.eximbankbd.com].

Annual Report of EXIM Bank Bangladesh Ltd. – 2008 to 2011

Al-Arafah Islami Bank Ltd. web site.

Annual Report of Al-Arafah Islami Bank Ltd. 2009 to 2011.

A Hand Book of Islami Banking & Foreign Exchange Operation: By Al – Haj

Mohammed Haider Ali Miah.

Articles :

a) Thoughts on Economics: Vo15 No. 3&4 Islamic Banking : Concept,

Features and Operational Methodology by Muhammad Mahasin Ali &

Md Abdul Awwal Sarker.

b) Bank Parikrama: Volume XX 1V, No 2 Banking in Bangladesh –

Evolution and the present status by Faruquddin Ahmed.

Internet edition of Annual Report 2009 of Bangladesh Bank, Foreign

Exchange and Financing of Foreign Trade by Syed Asraf Ali.

ADVANCE WORKING REPORT ON FOREIGN EXCHANGE OPERATION OF EXIM BANK LIMITED By Al Amin ID: 0920049 An...

Documents

Transcript of ADVANCE WORKING REPORT ON FOREIGN EXCHANGE OPERATION OF EXIM BANK LIMITED By Al Amin ID: 0920049 An...