AN INTERNSHIP REPORT
ON
“Foreign Exchange Performance: An Evaluation of National Bank Ltd.
Islampur Branch”
Submitted To,
Department of Finance,
Jagannath University, Dhaka
This report is submitted to The Business Studies Faculty in partial fulfillment of
the requirements for the degree of Bachelor of Business Administration ( )
Ja
Jagannath University, Dhaka
Date of submission: 15 May, 2014
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page ii
of
Under the supervision of
Md. Sogir Hossain Khandoker Associate Professor
Department of Finance Jagannath University, Dhaka
Submitted by
Uttam Golder ID: 105-211
Reg. No: 1001335209 4th Year 2nd Semester Session: 2009-2010
Department of finance Jagannath University, Dhaka
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page iii
Letter of Transmittal
15 May, 2014 Md. Sogir Hossain Khandoker
Associate Professor
Department of Finance
Jagannath University, Dhaka
Subject: Submission of Internship report
Dear Sir,
With due respect, I would like to state that it is a matter of great pleasure and honner for me to submit
my internship report on “Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur
Branch” assigined as my topic of internship. In preparation of this report I have followed and
maintained the formate and rulles of a formal internship report as instructed by you. The internship
programe gave me the opportunities to have an insight on the Banking sector of Bangladesh through
National Bank Ltd.
The Consignment was of great worth and apple, as it helped me to increase my analitical skills and
practical knowedge in the field of alternative Delivery channels and helped me become falilarized with
the corporate world. I have tried heart and soul to make the report effective and usefull. To prepare the
report I have collected what I believe to be most relevant information to make my report as analytical
and reliable as possible. I have concentrated my best effort to achieve the objectives of the report and
hope that my endeavor will serve the purpose. The practical knowledge and experience gathered during
my report preparation will help in my future professional life.
I would really be grateful if you enlighten me with your thoughts and views regarding the report. Also, if
you wish to enquire about an aspect of my report, I would gladly answer your queries. Thank you.
Sincerely Yours
…………………………..
Uttam Golder
ID: 105-211
Reg. No: 1001335209
4th Year 2nd Semester
Department of Finance
Jagannath University, Dhaka
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page iv
Supervisors Declaration
I am very pleased to declare that Uttam Golder, Registration No 1001335209, 4th year 2nd semester,
Department of Finance, Jagannath University, Dhaka has been given with the topic “Foreign Exchange
Performance: An Evaluation of National Bank Ltd. Islampur Branch” for researching and writing an
internship report on the subject. He has reviewed all the relevant literature and has been surveyed
practically in Islampur Branch National Bank, for three months to collect both of primary and secondary
data. I have supervised him throughout the preparation of the internship paper.
I also certify that the internship paper is an original one and has not been submitted elsewhere
previously for publication in any form.
He is wished all the best in his effort.
…………………………….
Md. Sogir Hossain Khandoker
Associate Professor
Department of Finance
Jagannath University, Dhaka
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page v
Student Declaration
I declare that the report entitled “Foreign Exchange Performance: An Evaluation of National Bank Ltd.
Islampur Branch”, submitted as requirements of BBA of Jagannath University, Dhaka, was prepared by
me. I was tried my best to collect necessary information that made the report unique and original. I may
assure you that the report was uniquely prepared by me.
…………………………
Uttam Golder
ID: 105-211
Reg. No: 1001335209
4th Year 2nd Semester
Department of Finance
Jagannath University, Dhaka
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page vi
Bank Certificate
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page vii
Preface
This report is the ending stone of our BBA Program and has the aim to enhance the capability to study in
the field of practical organizational arena. The BBA Program under Jagannath University is the
combination of theoretical and practical knowledge. In this theory we went across the different aspects
of operation of administration. There we have got the idea about business strategy, policy, risk,
management capabilities, and problems in operating administration and day-to-day business functions
along with the premedical measures for some problems etc. As consequences of such gathering we are
to acquire the practical knowledge ourselves in any organizational environment.
The student of BBA program is to conduct an internship program under an institution for certain period
of time so that they can justify the practicality of the theoretical knowledge they have learned in their
academic classes.
Since the program is providing a huge benefits for the students, this program is to be structured in a
more organized way and to get the supreme benefit from such program the time dimension is to be
enhanced as the organization is a new environment for every one and to be settled there it takes few
days and for which the students are deprived of getting practical knowledge which they have gone for.
But it is damn true that this program of course provide a great help in building career on the basis of
their academic knowledge.
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page viii
Acknowledgement
At the very beginning I would like to express my deepest gratitude to the almighty GOD for giving me
the strength and capability to continue my everyday tasks both inside and outside the workplace during
the whole period of my internship program to finish the task within the scheduled time. I would like to
thank my honorable supervisor Md. Sogir Hossain Khandoker, Associate Professor, Department of
Finance, Jagannath University, Dhaka, for guiding me throughout the course of my BBA internship
program.
My deepest appreciation and special thanks goes to Business Administration department of Jagannath
University, Dhaka for providing me an opportunity to come closer to the real world and help me in
enriching my knowledge.
I also express my warm gratitude and cordial thanks to the management and officials of National Bank
ltd. Of Islampur Branch who have given me the opportunity to work with them and helped a lot by
providing the information and enabling me to prepare this report. I have received their generous help
and support. If I don’t mention some names of the staffs of National Bank Limited, Islampur branch, my
acknowledgement will be uncompleted.
In this connection, I Would like to take chance to give thanks to all the employees of NBL, Islampur
Branch, specially Manager & VP Mr. Moinul Islam, Asst. Vice President Mr. Kamol Chandra Roy and, Md.
Tanzilur Rahaman as well as Mizanur Rahaman Chawdhory and Senior Principal officer Md. Jahangir
Alom as well as Md. Kabir Chowdhury. I also great full to Senior Executive Officer Md. Akram Hossain
and principal officer Md. Abduz Zahar as well as Mohammad Arafat Rahaman, Executive officer . I am
providing thanks to all of my other collogue of Islampur branch for helping me to complete not only this
report but also whole BBA Program. For their suggestions and comments which inspired me greatly to
prepare the report successfully and their heartiest co-operation which makes my destination easier.
I would like to take the opportunity to express my wholehearted gratitude to my fellow friends, near
and dear ones who offered encouragement, information, inspiration and assistance during the course of
constructing this report.
Then at last I shall be grateful to those persons who read this report and who shall get benefit from this
report at present and future.
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page ix
Abbreviation
NBL National Bank Limited
AD Authorized Dealer
ATM Automated Teller Machine.
BB Bangladesh Bank
BOE Bill of Exchange
B/L Bill of Lading
CCI & E Chief Controller of Import & Export
CFR Cost & Freight
CIF Cost Insurance & Freight
DD Demand Draft
DP Note DP Note
EFT Electronic Fund Transfer
EPB Export promotion Bureau
EXP Export Form
FC Foreign Currency
FDD Foreign Demand Draft
FE Federal Exchange.
FRD Foreign Remittance Department
F.R.P.P Foreign Remittance Payment Project.
FOB Free On board
IBTA Inter Bank Transaction Account.
IBC Inward Bills for Collection
IMP Import Form
IRC Import Registration Certificate
L/C Letter of Credit
LCAF Letter of Credit Authorization Form
MG MoneyGram International
MIS Management Information System
MTO Money Transfer Organization.
OBC Outward bills for Collection
PAD Payment Against Document
PO Payment Order
POS Point of Sales
RPP Remittance Payment partnership.
TIN Tax Identification Number
TT Telegraphic Transfer
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page x
Executive Summary
Banking sector helps to build an important segment of the financial infrastructure of a nation. Today
banking has become the most essential parts of our life and the central driving force of every economy.
Most of the financial transactions are now being made through the bank. Worldwide, banks have
become the center points of the economy and Bangladesh is no exception. Banks are playing vital role in
our economy. As a first phase of gathering practical knowledge about Modern Banking I have done
internship at National Bank Limited, Islampur branch where my concerned area was foreign exchange
activities.
The objective of this report is to analyze and evaluate its Foreign Exchange performance. There are nine
chapters in my report. Background of the study is the first part. It deals with introduction, origin of the
report, rationalities of the report, statement of problems, objective, scope and limitations of the report.
The second part is methodology of the report. It describes in what way the report is prepared. Here the
NBL, Islampur branch is selected because of convenient facilities. The total Branches of NBL are taken as
population and sample is Islampur branch. To calculate the performance of NBL, Islampur branch, SPSS,
Microsoft office, Chart and graph are used.
The third part is job description. In foreign exchange department, the employees generally open L/C,
register PAD, open back to back L/C. Fourth part is Background of the company. Here there is
description about the mission, vision, objective, Capital structure and services of the company.
The fifth part is important. It is about foreign exchange department. It contains discussion about foreign
exchange, significance of FX, function of foreign exchange department, Rules of FX, import, import
procedure, opening of L/C, types of L/C, back to back L/C, eligibility of opening back to back L/C. export,
export method, export formalities, financial incentives given by NBL, remittance and there types.
The sixth part is much more important than others. It is the analytical part. From this part we can know
the actual objective of the report. Generally the earnings of foreign exchange department come from
import, export and remittance. But which section is contributes most? Here the import earnings affect
most in the bank’s profitability from foreign exchange. The next six month’s forecasted import, export
and remittance can be found here.
The seventh part is about case. Eighth chapter describes about SWOT and PEST analysis. SWOT identifies
the strength, weakness, opportunities and threats of the company. On the other hand PEST describes
the external macro-environment e.g. political, economic, social and technological. Chapter nine which is
the last chapter of the report describes findings, recommendation, and conclusion and after that there is
appendix.
I hope that National Bank Ltd, Islampur branch may improve the operation in Bangladesh in future.
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page xi
Letter of Transmittal ------------------------------------------------------------------------------------------------------------- iii
Supervisors Declaration --------------------------------------------------------------------------------------------------------- iv
Student Declaration--------------------------------------------------------------------------------------------------------------- v
Bank Certificate ------------------------------------------------------------------------------------------------------------------- vi
Preface ----------------------------------------------------------------------------------------------------------------------------- vii
Acknowledgement ------------------------------------------------------------------------------------------------------------- viii
Abbreviation ----------------------------------------------------------------------------------------------------------------------- ix
Executive Summary --------------------------------------------------------------------------------------------------------------- x
1 Background of the Study ----------------------------------------------------------------------------------------------------- 2
1.1 Introduction of the Study ---------------------------------------------------------------------------------------------- 2
1.2 Literature Review -------------------------------------------------------------------------------------------------------- 2
1.3 Origin of the Report ----------------------------------------------------------------------------------------------------- 3
1.4 Rationality of the Study ------------------------------------------------------------------------------------------------- 3
1.5 Statement of Problems ------------------------------------------------------------------------------------------------- 3
1.6 Objective of the Report ------------------------------------------------------------------------------------------------- 4
1.6.1 General Objective -------------------------------------------------------------------------------------------------- 4
1.6.1 Specific Objective --------------------------------------------------------------------------------------------------- 4
1.7 Scope of the Report ----------------------------------------------------------------------------------------------------- 4
1.8 Limitations of the Report ----------------------------------------------------------------------------------------------- 5
2 Methodology of the Study --------------------------------------------------------------------------------------------------- 7
2.1 Introduction --------------------------------------------------------------------------------------------------------------- 7
2.2 Selection of the Study Area -------------------------------------------------------------------------------------------- 7
2.3 Population ----------------------------------------------------------------------------------------------------------------- 7
2.4 Sampling Unit ------------------------------------------------------------------------------------------------------------- 7
2.5 Sampling method -------------------------------------------------------------------------------------------------------- 7
2.6 Sources of data ----------------------------------------------------------------------------------------------------------- 7
2.6.1 Primary data --------------------------------------------------------------------------------------------------------- 7
Table of Contents
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page xii
2.6.2 Secondary Data ----------------------------------------------------------------------------------------------------- 8
2.7 Analytical tools and software ----------------------------------------------------------------------------------------- 8
2.8 Study Timeline and Cost ------------------------------------------------------------------------------------------------ 9
2.9 List of the clients of National Bank Islampur Branch Foreign Exchange Department ------------------- 9
3 Job Description- NBL --------------------------------------------------------------------------------------------------------- 11
3.1 The Job Description ----------------------------------------------------------------------------------------------------- 11
3.1.1 General Banking --------------------------------------------------------------------------------------------------- 11
3.1.2 Foreign Exchange -------------------------------------------------------------------------------------------------- 11
3.2 Specific Responsibility of the Job ------------------------------------------------------------------------------------ 11
3.3 Personal Experience ---------------------------------------------------------------------------------------------------- 12
3.4 Different aspects of job Performance ------------------------------------------------------------------------------ 12
3.5 Critical Observation ----------------------------------------------------------------------------------------------------- 12
4 Background of the Company ----------------------------------------------------------------------------------------------- 14
4.1 History of the national Bank ------------------------------------------------------------------------------------------ 14
4.2 Branch Profile ------------------------------------------------------------------------------------------------------------ 15
4.3 NBL at a Glance ---------------------------------------------------------------------------------------------------------- 15
4.4 Objectives of the Company ------------------------------------------------------------------------------------------- 15
4.5 Corporate Mission of NBL --------------------------------------------------------------------------------------------- 16
4.6 Corporate Vision of NBL ----------------------------------------------------------------------------------------------- 17
4.7 Corporate Values of NBL ---------------------------------------------------------------------------------------------- 17
4.8 Corporate Slogan of NBL ---------------------------------------------------------------------------------------------- 17
4.9 Logo of NBL --------------------------------------------------------------------------------------------------------------- 17
4.10 Features of NBL -------------------------------------------------------------------------------------------------------- 18
4.11 Policy and Performance ---------------------------------------------------------------------------------------------- 18
4.12 Markets and Target Customer ------------------------------------------------------------------------------------- 18
4.13 Sponsors of NBL -------------------------------------------------------------------------------------------------------- 19
4.14 Business Ideology ------------------------------------------------------------------------------------------------------ 19
4.15 National Bank Foundation ------------------------------------------------------------------------------------------- 19
4.16 Organizational Strategy ---------------------------------------------------------------------------------------------- 19
4.17 Training Institute------------------------------------------------------------------------------------------------------- 19
4.18 Organizational Structure --------------------------------------------------------------------------------------------- 20
4.19 Operational Network ------------------------------------------------------------------------------------------------- 21
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page xiii
4.20 Management Structure of NBL ------------------------------------------------------------------------------------- 21
4.21 Services of NBL --------------------------------------------------------------------------------------------------------- 22
4.22 Awards and Recognitions -------------------------------------------------------------------------------------------- 22
4.23 Departments of NBL -------------------------------------------------------------------------------------------------- 22
4.24 Head Office -------------------------------------------------------------------------------------------------------------- 23
4.25 Capital Structure ------------------------------------------------------------------------------------------------------- 23
4.26 Operations -------------------------------------------------------------------------------------------------------------- 24
4.27 Credit rating of NBL --------------------------------------------------------------------------------------------------- 24
4.28 Social Responsibility -------------------------------------------------------------------------------------------------- 25
5 Foreign Exchange Department -------------------------------------------------------------------------------------------- 27
5.1 Foreign Exchange -------------------------------------------------------------------------------------------------------- 27
5.2 Significance of Foreign Exchange ------------------------------------------------------------------------------------ 27
5.3 Foreign Exchange Department of NBL ----------------------------------------------------------------------------- 27
5.3.1 Import Section------------------------------------------------------------------------------------------------------ 28
5.3.2 Export Section ------------------------------------------------------------------------------------------------------ 28
5.3.3 Foreign Remittance Section ------------------------------------------------------------------------------------- 28
5.4 Functions of Foreign Exchange Department---------------------------------------------------------------------- 29
5.5 Foreign Exchange Regulations Followed by NBL, Islampur Branch ----------------------------------------- 29
5.5.1 Local Regulations -------------------------------------------------------------------------------------------------- 29
5.5.2 International Regulations ---------------------------------------------------------------------------------------- 29
5.6 Import ---------------------------------------------------------------------------------------------------------------------- 29
5.6.1 Import Regulations followed by NBL ------------------------------------------------------------------------- 30
5.6.2 Procedure of Import Registration Certificate (IRC) -------------------------------------------------------- 30
5.6.3 Methods of Importing -------------------------------------------------------------------------------------------- 30
5.6.4 Letter of Credit ----------------------------------------------------------------------------------------------- 32
5.6.5 Types of L/C --------------------------------------------------------------------------------------------------------- 32
5.6.6 Back-to-Back Letter of Credit (BTB) --------------------------------------------------------------------------- 33
5.6.7 Procedure involved in L/C opening---------------------------------------------------------------------------- 34
5.6.8 Letter of Credit (L/C) Transmitting ---------------------------------------------------------------------------- 34
5.6.9 Examination of Documents ------------------------------------------------------------------------------------- 35
5.6.10 Scrutiny of the Documents ------------------------------------------------------------------------------------ 35
5.6.11 Retirement of shipping documents ------------------------------------------------------------------------- 35
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page xiv
5.7 Export ---------------------------------------------------------------------------------------------------------------------- 35
5.7.1 Method of Export -------------------------------------------------------------------------------------------------- 36
5.7.2 Things Done in Export -------------------------------------------------------------------------------------------- 36
5.7.3 Export Formalities ------------------------------------------------------------------------------------------------- 37
5.7.4 Export Procedure -------------------------------------------------------------------------------------------------- 38
5.7.5 Financial Incentives given by National Bank Ltd ----------------------------------------------------------- 39
5.7.6 Foreign document bill of collection (FDBC) ----------------------------------------------------------------- 39
5.8 Remittance ---------------------------------------------------------------------------------------------------------------- 40
5.8.1 Inward Remittance ------------------------------------------------------------------------------------------------ 40
5.8.2 Outward Remittance --------------------------------------------------------------------------------------------- 41
6 Analytical Parts ---------------------------------------------------------------------------------------------------------------- 44
6.1 Regression Analysis ----------------------------------------------------------------------------------------------------- 44
6.2 Growth Analysis --------------------------------------------------------------------------------------------------------- 65
6.3 Time series analysis ----------------------------------------------------------------------------------------------------- 68
Case --------------------------------------------------------------------------------------------------------------------------------- 72
8 SWOT and PEST Analysis of NBL ------------------------------------------------------------------------------------------- 75
8.1 SWOT Analysis of the organization --------------------------------------------------------------------------------- 75
8.1.1 Strengths of the organization ---------------------------------------------------------------------------------- 75
8.1.2 Weakness of the organization ---------------------------------------------------------------------------------- 75
8.1.3 Opportunities of the organization ----------------------------------------------------------------------------- 76
8.1.4 Threats of the organization ------------------------------------------------------------------------------------- 76
8.2 Converting Threats into Opportunities ---------------------------------------------------------------------------- 76
8.3 Converting Weakness into Strength -------------------------------------------------------------------------------- 76
8.4 PEST Analysis ------------------------------------------------------------------------------------------------------------- 76
9 Findings & Recommendations of the Report--------------------------------------------------------------------------- 79
9.1 Findings -------------------------------------------------------------------------------------------------------------------- 79
9.2 Recommendations ------------------------------------------------------------------------------------------------------ 79
9.3 Conclusion ---------------------------------------------------------------------------------------------------------------- 80
9.4 Bibliography -------------------------------------------------------------------------------------------------------------- 80
9.5 Reference ----------------------------------------------------------------------------------------------------------------- 81
9.6 Appendix ------------------------------------------------------------------------------------------------------------------ 82
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page xv
List of Table
Table 1 Study Timeline --------------------------------------------------------------------------------------------------------------------------- 9
Table 2 Branch Profile -------------------------------------------------------------------------------------------------------------------------- 15
Table 3 NBL at a Glance ----------------------------------------------------------------------------------------------------------------------- 15
Table 4 Capital Structure of NBL ------------------------------------------------------------------------------------------------------------- 23
Table 5 Functions of Foreign Exchange Department ----------------------------------------------------------------------------------- 29
Table 6 Import of NBL, Islampur Branch--------------------------------------------------------------------------------------------------- 31
Table 7 Export of NBL, Islampur Branch --------------------------------------------------------------------------------------------------- 37
Table 8 Export of NBL, Islampur Branch --------------------------------------------------------------------------------------------------- 41
Table 9 Summery Data on Regression Analysis ------------------------------------------------------------------------------------------ 57
Table 10 Summary Data on Regression analysis ---------------------------------------------------------------------------------------- 64
List of Figure
Figure 1 Methodology Framework ................................................................................................................................ 8
Figure 2 Objective Diagram ......................................................................................................................................... 16
Figure 3 Organizational Structure................................................................................................................................ 20
Figure 4 Operational Network ..................................................................................................................................... 21
Figure 5 Services of NBL ............................................................................................................................................... 22
Figure 6 Credit Rating of NBL ....................................................................................................................................... 24
Figure 7 Foreign Exchange Department ...................................................................................................................... 28
Figure 8 Method of Importing ..................................................................................................................................... 31
Figure 9 Import of NBL, Islampur Branch ..................................................................................................................... 32
Figure 10 Export Method ............................................................................................................................................. 36
Figure 11 Export of NBL, Islampur Branch ................................................................................................................... 38
Figure 12 Export of NBL, Islampur Branch ................................................................................................................... 42
Figure 13 Growth Rate of Import ................................................................................................................................. 65
Figure 14 Growth Rate of Export ................................................................................................................................. 66
Figure 15 Growth Rate of Remittance ......................................................................................................................... 67
Figure 16 Time Series Plot of Import ............................................................................................................................ 68
Figure 17 Time Series Plot of Export ............................................................................................................................ 69
Figure 18 Time Series Plot of Remittance .................................................................................................................... 70
Figure 19 SWOT Analysis ............................................................................................................................................. 75
Figure 20 PEST Analysis ............................................................................................................................................... 77
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 1
(𝑩𝒂𝒄𝒌𝒈𝒓𝒐𝒖𝒏𝒅 𝒐𝒇 𝒕𝒉𝒆 𝑺𝒕𝒖𝒅𝒚)
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 2
1 Background of the Study
1.1 Introduction of the Study Bank can be defined as life blood in a financial system of a country. It plays a pivotal role in the
economic development of a country and forms the core of the money market in an advanced country.
The prime objective of the banking industry as a whole is to collect deposits from the public and to
invest the same in the form of loans and advances to businesses.
Early banking system served mainly as depositors for funds, while the more modern system has
considered the foreign Exchange as their one of the main purpose. A Bank not only accepts money or
deposits, but it also helps in doing export and import as well as in remittance.
National Bank Limited (NBL) is a banking company incorporated in the People’s Republic of Bangladesh
with limited liability. National Bank Limited is always ready to maintain the highest quality services by
upgrading Banking technology prudence in manage and applying high standard of business ethics
through its established commitment and heritage. Objectives of a private institution like NBL are to
maximize profit through optimum utilization of resources by providing best customer’s service.
Foreign remittance has an important influence on the economic factor of Bangladesh. It has a great
impact in our national economy more specifically in our GDP (Gross domestic production). The
Bangladeshi workers and migrants in different parts of the world are source of a substantial inflow of
foreign currencies (Known as remittance) in Bangladesh. This inflow helps Bangladesh to face the recent
economic crisis worldwide
This report is an outcome of three months career at National Bank Ltd. prepared as the partial
requirement of BBA program, department of finance, Jagannath University, Dhaka. The topic of the
report is “Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
During three months intensive internship program, an approach has been taken to get an inside out
scenario of Foreign Exchange Activities of National Bank Limited.
1.2 Literature Review This report is all about foreign exchange performance of NBL, Islampur branch. For preparing this report
I have studied a lot on foreign exchange. I have searched this topic on internet. I have got different
reports, journals and publications about foreign exchange. I also took interview from my bank
employees. All of we know that today is the world of globalization. On nation can produce all the goods
and services which are necessary for it. So international trade is necessary. But in international trade
there is currency problem. So foreign exchange is necessary. It helps to convert one countries currency
into another.
According to, Investopedia, The exchange of one currency for another, or the conversion of one currency
into another currency. Foreign exchange also refers to the global market where currencies are traded
virtually around-the-clock. The term foreign exchange is usually abbreviated as "forex" and occasionally
as "FX." Foreign exchange, or Forex, is the conversion of one country's currency into that of another.
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 3
According to BusinessDictionary.com, Any currency other than the local currency which is used in
settling international transactions called foreign currency. It is the System of trading in and converting
the currency of one country into that of another.
1.3 Origin of the Report Now a day, education is not just limited to books and classrooms. In today’s world, education is the tool
to understand the real world and apply knowledge for the betterment of the society as well as business.
In today’s world only academic education does not make a student perfect to become competitive with
the outside world. A perfect consideration between theory and practice is important in the context of
modern business world. Internship is highly needed to gain idea, knowledge and experience. From this
internship program students get the opportunity to learn facing the real business world. This report is an
internship report prepared as a requirement for the completion of BBA Program (Major in Finance) of
Jagannath University.
Bachelor of Business Administration (BBA) Course requires a three months attachment with an
organization followed by a report assigned by the supervisor. I took the opportunity to do my internship
in National Bank Limited, Islampur Branch. Actually this is a feedback which department accepts from
the students who join in an organization after the completion of theoretical part of the BBA program.
My faculty supervisor Md. Sogir Hossain Khandoker, associate Professor, department of Finance,
Jagannath University, Dhaka, instructed me to prepare a report on “Foreign Exchange Performance: An
Evaluation of National Bank Ltd. Islampur Branch” as part of the fulfillment of internship requirement.
1.4 Rationality of the Study The purpose of this report is to get a basic idea about the foreign exchange system, which is practiced
in our country. Banking is a vast term and through this report I have tried to analyze some crucial topics
regarding foreign exchange system. Foreign exchange is an important department of National Bank
Limited, which deals with import, export and foreign remittances. It bridges between importers and
exporters. 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 those goods and service, which are most demandable and not adequate in our country. Foreign
exchange operation is one of the important functions of the bank. It plays a vital role in overall economy
of the country. There are basically three players in the foreign exchange market of Bangladesh. Those
are the Bangladesh Bank, authorized dealers, and customers. This paper discussed regarding the related
issues of foreign exchange performances and bank profitability of National Bank Ltd.
1.5 Statement of Problems I was very much interested about the foreign exchange system of bank that is practiced in our country.
In order to know the activities related with foreign exchange system I chose the topic as “Foreign
Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”. Globalization of national
economies has given a boost to international trade. Through foreign services bank make their profits so
this study discuss how National bank foreign exchange department performed and bank would be
profitable. The study seeks answers to the following questions:
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 4
Is foreign exchange department of NBL is up to date?
How Foreign exchange department help to achieve the goal of NBL?
Does foreign exchange department performed effectively?
1.6 Objective of the Report The main objective of the internship program is to formalize me with the real market situation and help
me learn how bookish concepts are used in the real market. Therefore, from the very beginning of the
study I have tried my level best to conduct my internship with a view to achieve some specific objectives
and I have gone across the various department of the bank to acquire some related information and
functioning procedure regarding those department. The objective of the study may be viewed as:
General objective
Specific objective
1.6.1 General Objective
The primary or general objective of my internship program is to gain practical work experience in the
field of Banking Business that helps me to complete my BBA program required under Department of
Finance, Jagannath University. The general objective of this report is to prepare an internship report
based on both the real life experience and the theoretical experiences on the topic of the “Foreign
Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
1.6.1 Specific Objective
Analyze the performance of Branch regarding Foreign Exchange related with bank profitability.
To evaluate the foreign exchange performance of National Bank, Islampur branch.
To forecast the trend of import, export and remittance.
To determine which factor affects much on the earnings from foreign exchange.
To know about the Foreign Exchange Mechanism of the Branch.
To know about the regulations and deregulation regarding Foreign Exchange Business in
Bangladesh.
To find out the problems in the Foreign Exchange department and to provide the possible
solutions for those.
To analyze the export and import procedure maintained by National Bank Limited.
To gain the depth knowledge of import and export portfolio of the Bank.
To know about the various documents and procedures which are used in banking services of
International trade.
To describe the organizational structure, management, background, functions and objectives of
the bank and its contribution to the national economy.
To recommend suggestions for the successful Foreign Exchange Operations of NBL.
1.7 Scope of the Report As I am working in the National Bank Limited, Islampur Branch, I got the opportunity to learn different
part of banking system. This report has been prepared through extensive discussion with bank
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 5
employees, clients and officers and on the information gathered from the annual report and prospectus
of National Bank Limited. Management of the bank divided the whole banking system in three parts; as
a result I got the opportunity to work in all the three divisions (General Banking Division, Credit Division,
and Foreign Exchange Division). This study consists of the observations and on the job experiences
during the internship period in the Foreign Exchange Departments. While preparing this report I had an
opportunity to gain deep knowledge about the banking services and foreign exchange department. I
have also come through different managerial personalities while conducting the research. The report
will illustrate a basic reflection of overall activities regarding Import and Export Procedure under Letter
of Credit.
1.8 Limitations of the Report Earlier of this report some obstacles have come across, which can be termed as the limitation of the
project, these reasons did not allow this report to go in depth of issues hence several parts of the report
is not concentrated. The main problem faced in preparing the paper was the inadequacy and lack of
availability of required data.
Data Insufficiency: It was very difficult to collect data from such a big organization.
Lack of Records: Sufficient books, publications, facts and figures are not available. These
constraints narrowed the scope of accurate analysis
Confidential matter: It is not possible to get all sorts of information due to official
confidentiality.
Face-to-face interviews: Major part of the report is based on the face-to-face interviews, which
consists of views and opinions of those people. In some cases some of them were not able to
provide real facts or figures. In this case as well some assumptions had to be made.
Websites: The website of the bank is not provided enough information.
Inconsistent: Data from different sources were quite inconsistent which created some problems
in making the report.
Limitation of time: Limitation of time was one of the most important factors that shortened the
present study. Due to time constraints, many aspects could not be discussed in the present
study.
Rush hours and business: Rush hours and business was another reason that acts as an obstacle
while gathering data. The officers were quite busy with their regular activities
Primary sources of data: I had more dependence on the primary sources, so there might be
some level of inaccuracy with those collected information.
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 6
𝑴𝒆𝒕𝒉𝒐𝒅𝒐𝒍𝒐𝒈𝒚 𝒐𝒇 𝒕𝒉𝒆 𝑺𝒕𝒖𝒅𝒚
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 7
2 Methodology of the Study
2.1 Introduction This report is mainly prepared by the secondary sources of information and some few primary sources
of information. The research was an investigative approach and data collection and analysis are
qualitative in nature. For this purpose, different recognized census, government rules, regulations,
policies, and laws, newspapers, national and international journals, periodicals have been consulted.
Besides this, Internet has been widely used.
2.2 Selection of the Study Area The area of the study was Islampur Branch of National Bank Ltd. The Islampur Branch of National Bank
was selected because of easiest communication, comfortable workplace, fully computerized accounts
maintenance, well decorated and air conditioned facilities that helped to collect the information easily.
A fully operational computer network; Local Area Network (LAN) and Wide Area Network (WAN)
installation having reliable and secured communication also helped to collect reliable data.
2.3 Population The report has prepared on “Foreign Exchange Performance: An Evaluation of National Bank Ltd.
Islampur Branch”. Therefore, for the purpose of the study, all the branches of National Bank Limited
have been considered as the population of the study.
2.4 Sampling Unit Only one branch of National Bank Limited has been taken as the sampling unit for the study, i.e.
Islampur branch.
2.5 Sampling method Random sampling method has been used for the purpose of the study.
2.6 Sources of data Source of data of this study can be divided into two categories.
Primary data.
Secondary data.
2.6.1 Primary data
Personal Observation: Observation means the process of recognizing, watching and noting
people and objects rather than asking for information. The advantage of this kind of data
collection is to remove the elements of bias and effect of reaction from research. I always tried
to observe the officers, the staffs and the clients of this department and tried to gather as much
relevant information as possible.
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 8
Face to face Interview and survey: I have gathered information about the LC process followed
by the bank through interviewing and discussing with the in-charge of Foreign Exchange
department of the branch and I have also talked with the other employees.
Practical Work: I have worked for the Foreign Exchange department mostly when I was an
intern at National Bank Limited. While working there I have tried to collect imperative and
necessary data which I needed to accomplish this report.
2.6.2 Secondary Data
To complete my report along with primary data I need some secondary data related to my topic.
Relevant literature like published and unpublished thesis, books, reports etc. have been reviewed with a
view to increase the knowledge regarding the issue.
I have mainly used:
Annual Report of National Bank Ltd.
Bangladesh Bank Publications,
Website of National Bank Ltd.
Other websites, relevant books, research Papers, and Journals.
Figure 1 Methodology Framework
2.7 Analytical tools and software To make the report more understandable and give a nice look, different analytical tools and software,
such as SPSS have been used to prepare the report. A number of flowchart, graph, table and different
computer software are used.
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 9
2.8 Study Timeline and Cost
Date Activities
March 05, 2014 Joining as internee at Islampur Branch, National Bank Limited March 10, 2014 Selection of the topic March 13, 2014 Collecting the secondary data from different sources March 15, 2014 Analyzing the secondary data March 17, 2014 Collecting primary data March 25, 2014 Analyzing both primary and secondary data to prepare the report May 09, 2014 Completion of the report May 10,2014 Submission of the draft report May 11, 2014 Correction of the report May 15,2014 Submission of the final report
Table 1 Study Timeline
*Cost of visiting the Bank, stationery cost etc. is little in amount and are not mentionable here.
2.9 List of the clients of National Bank Islampur Branch Foreign Exchange
Department M/S Al hafiz Inler
M/S Asia Electronics
M/S A One Products
M/S Barna Ent.
M/S Bina Fruits Agency
M/S D.H. International
M/S Fatema Fruits
M/S Famous Fruits Agency
M/S Hanif and Brothers
M/S SA Fabrics
M/S Sabuj Ent.
M/S Smrity Ent.
M/S Sonali Traders
M/SShovon Ent.
M/S Suma Traders
M/S Shams Ent.
M/S Sumiya Int.
M/S Super Fabrics Ltd.
M/S zillur Enterprise
M/S Rasel Enterprise
M/S Shadata Fruits
M/S I.P. Electronics
M/S Super Trading
M/S Shukhi Textile
M/S S/K. Ent.
M/S Prince Trading
M/S Noor Zahan Ent.
M/S Orbit Processing Mills Ltd.
M/S Osanic Ent.
M/S Partex Bevanagc
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 10
(𝑱𝒐𝒃 𝑫𝒆𝒔𝒄𝒓𝒊𝒑𝒕𝒊𝒐𝒏 − 𝑵𝑩𝑳)
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 11
3 Job Description- NBL
3.1 The Job Description During the internship period at National Bank Ltd, I was placed in different departments on rotation
basis. At first I was in General banking section for two weeks and finally in Foreign Exchange section. So
it was a great experience for me to work in different departments. As an intern of National Bank Ltd I
worked in the Foreign Exchange Division under the supervision of Mohammad Arafat Rahman, Executive
officer.
3.1.1 General Banking
In General banking department I was place in remittance and Public Relationship section. There I did
different jobs which were recommended by my officers. My job descriptions are mentioned below:
Assisting clients to fill up account opening form.
Provide customer’s account and service related information.
Help to write DPS.
Helping officers for preparing Bangladesh bank report.
Entry of cheque.
3.1.2 Foreign Exchange
During my internship period I was placed in foreign exchange departments. My responsibilities are
mentioned below:
Opening L/C: The main task of the foreign exchange department is to help the customer to
import or export. For this reason the customer needs to open L/C. My main duty was to open
that L/C of the customer. I opened L/C for the client by observing PI, Insurance coverage and
Office notes.
PAD Register: PAD means payment against documents. The exporter sends some documents to
the importer by importers bank that is necessary to receive the imported goods. When those
documents are received by the importers bank, it has to pay against those documents. Generally
I had recorded that PAD
Opening Back to back L/C: Back-to-Back L/C is a secondary L/C opened by the seller’s Bank
based on the original/master L/C to purchase the raw materials and accessories for
manufacturing of the export products required by the seller.
IMP Report: At the end of each month every commercial bank sent a report to Bangladesh Bank
on the basis of their import payment during the whole month. Maintain foreign currency
accounts and applying in IPO for them.
3.2 Specific Responsibility of the Job The Specific Responsibility of the Job is as follows:
Maintaining different registers.
Assisting employees in their day to day operations.
Sorting of Cheque, vouchers.
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 12
Editing of L/C issue statement.
Filling up EXP and IMP forms.
Endorsement of different papers.
Filing different L/C related documents.
Matching month wise L/C and Bills transaction value between server and register.
3.3 Personal Experience I had started working as an intern at National Bank Limited, Islampur Branch on 5th March, 2014.I did not
have any previous experience of working in a bank or in any corporate organization and I was pretty
much worried about the environment. But now, when I am writing about my work experience of
National bank, it feels me really good remembering the days I had worked there.
I mostly worked with the Foreign Exchange Department, in the foreign L/C wing. My direct supervisor
helped me to learn how to put information input in the websites of the National Bank Ltd. Before
working there I had worked in the Public relation desk, when I learnt how to communicate with the
clients.
3.4 Different aspects of job Performance During my three month internship period, I was assigned for different types of task and activities, and by
doing those tasks I achieved performance appraisal from my line task manager.
It helped me to learn banking activities.
It has enhanced my knowledge.
I was able to complete almost every task successfully.
3.5 Critical Observation As a finance student, I always prefer to do a job in a financial organization. I worked for three months in
NBL and I had observed some factors there which need to be changed if the bank wants to prosper
competing with other banks.
There is really little place kept for the cheque receiving desk. During the pick hour there always remains
great rush and it is really impossible to receive cheques of so many people for a single person. Moreover
there is no queue system in this desk, so the customers do not maintain any systematic queue and tries
to get their cheques received before any other person.
Here, the employees are not that much technology conscious. They prefers working manually then by
computer and other new technological stuffs. They do balancing with calculator which is very hard and
time consuming I think the clients of L/C desk are taking services from here for more than 2/3 years and
most of them have a very friendly relationship with the employees. That is why they prefer to work by
themselves and remain roaming in the whole floor of Foreign Exchange Department. This is a little bit
disturbing I think, because they always roam around and works and sometimes try to gossip with the
employees.
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 13
(𝑩𝒂𝒄𝒌𝒈𝒓𝒐𝒖𝒏𝒅 𝒐𝒇 𝒕𝒉𝒆 𝑪𝒐𝒎𝒑𝒂𝒏𝒚)
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 14
4 Background of the Company
4.1 History of the national Bank National Bank Limited has its prosperous past, glorious present, prospective future and under
processing projects and activities. Established as the first private sector bank fully owned by Bangladeshi
entrepreneurs, NBL has been flourishing as the largest private sector Bank with the passage of time after
facing many stress and strain. The members of the board of directors are creative businessmen and
leading industrialists of the country.
National Bank Limited is a scheduled commercial Bank followed the bank companies Act, 1991, which
obtained license from Bangladesh Bank and start its business March 28, 1983. National Bank Limited is
one of the leading private commercial Bank.
At present, NBL has been carrying on business through its total 175 service locations (branches and Agri
branches) spread all over the country. Since the very beginning, the bank has exerted much emphasis on
overseas operations and handled a sizable quantum of home bound foreign remittance. It has drawing
arrangements with 415 correspondents in 75 countries of the world, as well as with 37 overseas
Exchange Companies located in 13 countries. NBL was the first domestic bank to establish agency
arrangements with the world famous Western Union in order to facilitate quick and safe remittance of
the valuable foreign exchanges earned by the expatriate Bangladeshi nationals. This has meant that the
emigrants can remit their hard-earned money to the country with much easy way.
National Bank Limited is always ready to maintain the highest quality services by upgrading Banking
technology prudence in manage and applying high standard of business ethics through its established
commitment and heritage. Objectives of a private institution like NBL are to maximize profit through
optimum utilization of resources by providing best customer’s service.
NBL has been able to create a special image at home and abroad by introducing different banking
products in accordance with the expectations requirements of people of the country. NBL was the
pioneer bank to allow back-to-back LC facility without any margin to the entrepreneurs of garment
industry during the Eighties, thereby helping the industry flourish to its present position. This has not
only contributed to enrich of the country’s foreign exchange reserves, but also opened employment
opportunities for a large numbers of labor force of the country. As a pioneer in this sector, NBL’s name
will remain in golden letters.
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 15
4.2 Branch Profile
Name National Bank Limited, Islampur Branch
Established 1994
Location 15-16 Islampur Road ( )
Total Employee 29
SWIFT Code NBLBBDDH054
Table 2 Branch Profile
4.3 NBL at a Glance
Name National Bank Limited
Status Public Limited Company Date of Incorporation March 29, 1983 Head Office 18 Dilkhusa Commercial Area, Dhaka-1000 Chairman Mr. Zainul Haque Sikder Managing Director Mr. A K M Shafiqur Rahaman Number of Branches 175 Number of Employees 3442 Services Deposit Scheme, Credit Facility, Foreign
Exchanges Diversification of Products and Services Corporate Banking and Retail Banking Technology Member SWIFT, Online Banking, UNIX based
on line Banking E-mail [email protected] Website http://www.nbl.com.bd SWIFT NBLBBDDH
Table 3 NBL at a Glance
4.4 Objectives of the Company The main objective is to maximize profit through customer satisfaction which very much reflects idea of
marketing concept. Objectives may be of three types:
1) Strategic objectives
To achieve and sustain in the domestic leading market position in both customer and
corporate banking sector.
To be one of the top three Financial Institutions in Bangladesh in terms of cost efficiency.
To be market leader in product innovation.
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 16
2) Financial objectives
To achieve 20% return on shareholders' equity or more, on average.
Ensuring maintenance of capital adequacy and highest profit through successful
implementation of the Management Core Risk Program.
To ensure an adequate rate of return on investment.
To maintain adequate liquidity to meet maturing obligations and commitments.
3) General Objectives
Offering quick and improved clientele services through application of modern
information technology.
Delivered the highest quality services and performances in order that customers choose
them first.
To value and respect the customers and maintain harmonious banker-customer
relationship.
Ensuring highest professional excellence for our workforce through enhancement of
their work efficiency, discipline and technological knowledge.
Maintain the high standard of corporate and business ethics.
Figure 2 Objective Diagram
4.5 Corporate Mission of NBL Efforts for expansion of our activities at home and abroad by adding new dimensions to our banking
services are being continued unabated. Alongside, we are also putting highest priority in ensuring
transparency, accountability, and improved clientele service as well as to our commitment to serve the
society through which we want to get closer and closer to the people of all strata.
Objectives
Strategic
General Financial
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 17
4.6 Corporate Vision of NBL Ensuring highest standard of clientele services through best application of latest information technology,
making due contribution to the national economy and establishing ourselves firmly at home and abroad
as a front ranking bank of the country are our cherished vision.
4.7 Corporate Values of NBL The NBL has the following core corporate values:
To have a strong customer focus and build relationship based on integrity, superior service and
manual benefit.
To work for business innovation and improvements.
To work as a team to serve the best interests of the group.
To be responsible, trustworthy and law-abiding in every sphere.
To value and respect the people and make decision based on the merit.
By promoting the well-being of the members of the staff.
4.8 Corporate Slogan of NBL A Bank for Performance with Potential
4.9 Logo of NBL
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 18
4.10 Features of NBL There are so many reasons behind the better performance of NBL than any other newly established
banks:
Highly qualified and efficient professionals manage the bank.
NBL has established a core Research & Planning Division with efficient persons.
The bank has established correspondent relationship with many of foreign banks.
The inner environment and teamwork, of all branches in NBL motivated all experienced
employees to achieve the ultimate object of NBL.
NBL has become a member of the SWIFT system expedite foreign trade transaction.
The bank offers attractive saving rate than other financial institutes.
Along with the profit generation National Bank Limited also maintains social responsibilities.
4.11 Policy and Performance Policy: Those Companies operating in international markets should establish management
policies on foreign exchange. Fluctuations in foreign exchange rates affect the cost
competitiveness, profitability, and valuation of a company’s international operations. Some of
policies of National Bank Limited on the following way-
The Company will hedge its known exposures if it is determined that changes in foreign
exchange rates are to have a material impact on earnings or fair values of assets and
liabilities.
The Company does not use derivative contracts for speculative purposes.
The Company estimates the fair value of derivatives based on quoted market prices and
records all derivatives on the balance sheet at fair value.
Performance: National Bank provides best services to clients by maintaining better performance
on the following way:
In National Bank there are enough highly qualified managers and professionals.
National Bank Limited is maintaining Research & Planning Division with efficient
persons.
The bank has established correspondent relationship with different foreign banks.
4.12 Markets and Target Customer Due to the predecessor Company’s involvement financing sector of the country, the bank inherited its
top corporate customers. Moreover the bank is involved in import trade financing. Bulk importers of
consumer durable, food gains industrial raw materials are its customers. The bank has financed in textile
sectors. The bank has a trade of choosing customer from diversified groups. The bank has first class
customers in the construction sectors involved in high-rise building, heavy construction and roads and
high way construction.
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 19
4.13 Sponsors of NBL The sponsors of National Bank Limited are highly successful leading entrepreneurs of the country having
stakes in different segments of the national economy. They are industrialists & businessmen having
wide business reputation both at home & abroad. Some of them are: ABU TAHER MIAH ,MOHD.ABUL
HOSSAIN, ZAINUL HAQUE SIKDER, KHALILUR RAHMAN, MD. ABDUL AWAL, KHAN MOHD.AMEER, MOAZZAM
HOSSAIN, HABIBULLAH, MAHBUBUR RAHMAN, MOHD. ABDUL HALIM, M. NURUL ISLAM, RUSTAM ALI, M. S.
ASGHAR, ALI AKBAR KHAN, ABDUL ALIM, MD. MIZANUR RAHMAN, M. HAIDER CHOWDHURY.
4.14 Business Ideology Alongside providing the best services to the clienteles, patronizing and taking part in social development
activities as well as making due contribution to growth of the national economy.
4.15 National Bank Foundation National Bank Limited foundation was established in 1989 to fulfill the responsibilities of welfare for the
society. National Bank Public School and College in Moghbazar, Dhaka has been established where
about 997 students are studying in the school section from class 1 to class 10, while 121 students are at
the college section. In 2010, 93 students appeared at the SSC examination and 92 at the H.S.C
examination and in both the examinations 100% came out successfully.
The bank has been accommodating prospective graduates of recognized universities for completing
their internship. NBL also awarded scholarship to the brilliant children of the employees of the bank and
contributed Tk, 8.12 Lac to various educational sectors.
4.16 Organizational Strategy The main strategy of NBL is the organic growth – to build branches and strengthen their distribution
network.
The main strategies of NBL are as follows:
People - Attract, retain and reward top performers.
Profitable Growth - Growing sales and increase the revenues.
Execution - Performing with skill and speed.
Credit Quality - Maintaining credit quality and understand the role in managing losses.
Customer Centered - Always providing exceptional customer service.
4.17 Training Institute Diversified work efficiency of human resource is the key to sustained progress of an institution. With this
realization, The National Bank Training Institution (NBTI) was established at Shamoli on 24 October
1989, which is fully residential. Beside faculty members of the Institute, renewed professionals like
banker, economists, teachers and researches are invited to deliver lectures in training programs. NBTI
has a rich library for use by the trainees. NBL has a program to open a Research and Publication Division
soon. During 2013 total 225 employees attained in training programs arranged by the training institute
of the bank. In every batch, 25 trainees can attain in training program with residential facilities.
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 20
4.18 Organizational Structure From the top to the bottom management body of National Bank Limited can be divided into four levels.
Figure 3 Organizational Structure
Top Management
•Cairman
•Board of Directors
•Executive committee
Executive Level
Management
•Managing Director and CEO
•Deputy Managing Director
•Senior Executive Vice President
•Executive Vice President
•Senior Vice President
•Vice President
•Senior Asst Vice President
•Asst.Vice President
Mid Level Management
•First Asst. Vice President
•Senior Executive Officer
•Execuyive Officer
Junior Level
•First Executive Officer
•Junior Officer.
•Probationary Officer
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 21
4.19 Operational Network
Figure 4 Operational Network
4.20 Management Structure of NBL In 2007 National Bank Limited made a great progress in all business, like deposit, credit, fund
management, investment, foreign remittance, credit card & foreign exchange related business. The
management processes are as follows:
Planning: The strategic planning approach in NBL is top-down. Top management formulates
strategy at the corporate level, and then it is transmitted through the division to the individual
objectives. Board of directors or Executive committee usually takes the decision.
Organizing: Organizing of the National Bank Limited is based on Departmentalization. In the
National Bank Limited the whole operation is centralized and authority is delegated by written
guidelines.
Staffing: Entry-level recruitment process of the National Bank Limited is conducted in three
ways. One way is recruitment of probationary officer. Each probationary officer has one-year
probation period. Second way of recruitment is to recruit non-probationary officer who joins as
an assistant officer. The career path of an assistant officer is lengthier than probationary officer.
Vice President
Asst. Vice President
Foreign Exchange Department
Senior Executive Officer
Executive Officer
Provisional Officer
Officer
Asst. Vice President
Credit Department
Senior Executive Officer
Executive Officer
Provisional Officer
Officer
Asst. Vice President
Generall Banking
Senior Executive Officer
Executive Officer
Provisional Officer
Officer
Senior Asst. Vice President
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 22
The third way of recruitment is recruitment of staff and sub-staff such as typist, Messenger,
driver, guard, attendant, cleaner and other lower level positions.
Controlling: The bank has strict control over its all-organizational activities. The Bangladesh
Bank directives indicate some control measures. Audits and inspection are conducted by
different parties to check whether the bank implement these control system properly or not.
4.21 Services of NBL The National Bank provides different types of financial services to its customers. The most important
functions that are provided by NBL are as follows:
Figure 5 Services of NBL
4.22 Awards and Recognitions Received SAFA Merit Award for best presented Accounts for three consecutive years.
4.23 Departments of NBL The Department Based Approach is similar to that of the branch based approach, where each
department operates as a separate unit but sometimes collaborates in order operate more efficiently or
to solve a common problem. Examples of few other departments at National Bank Ltd are given below:
Deposits
•Savings Deposits
•Current Deposits
•Term Deposits
•Special Notice Deposits
•Fixed Deposits
•Foreign Currency Deposits
•RFC Deposits
•NFC Deposits
•Monthly Savings Scheme
•Monthly Income Scheme
•Double Benefit Scheme
•Millionaire Income Scheme
Credit
•Overdrafts
•Lease Financing
•House Building
•Small MediumEntreprise
•Consumer Credit Scheme
•Trade Finance
Cards
•Credit Card
•Power Card
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 23
Human Resources Division (HRD)
Financial and Administration Division
(FAD)
General banking department
1. Accounts opening section
2. Cash section
3. Remittance section
4. Bills and clearing section
5. Accounts section
Foreign exchange department
1. Import section
2. Export section
3. Foreign remittance section
Marketing Division
Public Relation Department (PRD)
Merchant Banking and Investment
Banking
Treasury Division
International Division (ID)
Computer and Information Technology
Department (IT)
Credit Division
Corporate Affairs Division
Card Division
Board Audit Cell
Monitoring and Inspection Division
4.24 Head Office National Bank Limited - Head Office
18 Dilkusha Commercial Area, Dhaka, Bangladesh
Phone: 88-02-956-3081, 88-02-966-6584
Fax: 88-02-956-3953, 88-02-966-9404
SWIFT: NBLBBDDH
E-mail: [email protected]
4.25 Capital Structure Capital Structure of NBL is as follows:
Particulars Amount (in Tk)
Core Capital:
Paid up capital 8603656030 Statutory reserve 6058641682 General reserve 497723327 Retained Earnings as per profit 5155930470 loss account Supplementary Capital: 1% general provision 307,425,523 Exchange Equalization account 41,371,514 Other reserve 1246600628 Total 21911349174
Table 4 Capital Structure of NBL
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 24
4.26 Operations National Bank Limited, since its inception is a fully focused bank depending on technology. The bank has
now a network of 175 branches strategically located in different cities of the country. All the branches
are functioning in computerized environment and integrated through Wide Area Network (WAN). The
branches are full-fledged units and can provide all commercial and investment-banking services ranging
from small and medium enterprise to big conglomerates and houses.
The bank will introduce modern systems of leasing operation as in practice with banks in all other
countries of the world. The lease-financing portfolio of the bank will be the first of its kind in a
commercial bank in Bangladesh.
4.27 Credit rating of NBL Credit Rating Agency of Bangladesh Limited has upgraded the credit rating of the Bank to AA3
(Pronounced Double A Three) in the Long Term and ST-1 in the Short Term in recognition of its strong
Figure 6 Credit Rating of NBL
financial position, excellent operational performance, capital adequacy and commendable growth in all
business areas. A Commercial Bank rated AA3 is judged to be of very high quality, is subject to very low
credit risk and has strong capacity to meet its financial commitments. A Commercial Bank rated ST-1 is
considered to have the highest capacity for timely repayment of obligations, and are characterized with
excellent position in terms of liquidity, internal fund generation, and access to alternative sources of
funds. National Bank Limited takes this opportunity to thank its regulators, customers, stakeholders,
staff, and well-wishers for achieving this rating.
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 25
4.28 Social Responsibility Disaster Relief:
National Bank Limited has always extended its .helping hand and has stood by the helpless people in
times of natural calamities. In 2007, National Bank Limited donated Tk. 40.00 Lac to help the victims of
flood, Tk. 20.00 Lac for relief operation of landslide victims and Tk. 50.00 Lac for Sidr victims to the relief
fund of the Chief Advisor and the Army Chief. The Bank has also taken a pilot project for post flood
agricultural rehabilitation at Sirajgonj. On 10th March, 2009 a Payment Order for Tk.25.00 Lac has been
handed over to the Hon'ble Prime Minister as a donation/financial assistance to the bereaved family
members of the martyred Army Officers killed in the BDR carnage held on 25th February, 2009.
Sports and Cultural Activities:
National Bank Limited has a tradition of patronizing and sponsoring sports and cultural activities of the
Country. The "National Bank Volleyball league - 2007" was arranged under the patronization of the
Bank. It has also arranged annual picnics as a means of recreation for its executives, officers and staff. In
2009 the amount of donation in sports was 4.65 lac Taka and it is increased substantially to 64.65 lac
Taka.
Others:
National Bank Limited has always maintained their corporate social responsibility in various ways. It has
always appreciated various kinds of fair, festivals and other gatherings organized by different private or
public sectors. In 2010 NBL has donated Tk. 8.70 lac in vaous activates. National bank has contributed
significantly to the government effort in collection of revenue. In 2010 it has contributed to national
exchequer an amount of Tk. 1,37.50 crore as tax and VAT on its earnings. Besides the bank deducted tax,
vat, excise duties etc. from various payments and deposited the same to government exchequer.
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 26
(𝑭𝒐𝒓𝒆𝒊𝒈𝒏 𝑬𝒙𝒄𝒉𝒂𝒏𝒈𝒆 𝑫𝒆𝒑𝒂𝒓𝒕𝒎𝒆𝒏𝒕)
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 27
5 Foreign Exchange Department
5.1 Foreign Exchange Every country has certain natural advantages and disadvantages in producing certain commodities. As a
result we find that some countries need to import certain commodities while others need to export
their surpluses. Foreign trade helps in these cases. These transactions are the basis upon which
international trade is made. As more than one currency is involved in foreign trade, it gives rise to
exchange of currencies which is known as Foreign Exchange. In banks when we talk of foreign exchange,
we refer to the general mechanism by which a bank converts currency of one country into that of
another. Foreign Exchange Department is the international department of the bank which deals globally.
It facilitates international trade through its various modes of services.
In terms of section 2 (d) of the Foreign Exchange Regulation Act 1947, as adapted in Bangladesh, Foreign
exchange means foreign currency and includes any instruments drawn, accepted, made or issued under
clause 13 of article 16 of Bangladesh Bank Order, 1972, all deposits, credits and balance payable in
foreign currency as well as foreign currency instruments such as Draft, TC, Bill of Exchange, promissory
note, and Letter of Credit payable in any foreign currency.
Foreign exchange covers all business activities relating to import, export, inward and outward
remittance and buying and selling of currency. One of the largest businesses carried out by the
commercial bank is foreign trading.
Bangladesh Bank issues license to scheduled banks to deal with foreign exchange. These Banks are
known as Authorized Dealers. If the branch is authorized dealer in foreign exchange market, it can remit
foreign exchange from local country to foreign countries. NBL, Islampur Branch is an Authorized
dealer’s.
5.2 Significance of Foreign Exchange A country cannot produce all the goods it needed. It has to depend on other countries. The significance
of foreign exchange is much higher for developing nations like Bangladesh.
International trade gives opportunity of exchange of goods.
National assets and resources of a country can be utilized properly.
Foreign Currency can be earned easily.
International trade helps to trade domestic production globally.
5.3 Foreign Exchange Department of NBL The International Division of National Bank Ltd. which is located at the Head Office, Motijheel is the
central place of all international transaction that is conducted through the various branches of the bank.
Total 40 branches of National Bank Ltd. have the license to perform international trade functions. Each
of this AD branches have foreign exchange department whose sole purpose is to carry out the cross
border transaction demanded by the customers.
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 28
Generally there are three departments of foreign exchange of NBL such as import, export and foreign
remittance. But we can interpret it more elaborately.
Figure 7 Foreign Exchange Department
5.3.1 Import Section
This section deals with the import of foreign commodities into Bangladesh. It starts with the opening of
an L/C till the payments are made to the foreign exporters. The import section is in turn is divided into
two divisions. One division looks after Sight L/C and another one looks after Back to Back L/C. The Basic
difference between these two types of L/C is that, sight L/C requires at sight payment for the imported
items, the buyer should pay within three days of documents arrival. And on the other hand, the issuance
period for Back to Back credit can range from two months to even a year depending on the L/C terms.
5.3.2 Export Section
All Export departments of National Bank's branches are equipped with facilities that would help an
exporter ship their good beyond the nation's boundary, thus earning foreign currency for the country.
And majority of such customers for National Bank Ltd are involved in the Ready Made Garment sector
with only a few exporting other different commodities.
5.3.3 Foreign Remittance Section
Foreign remittance can be stated as the purchase and sale of freely convertible foreign currency as
acceptable under Exchange Control Regulations of the country. Inward remittance is the purchase and
outward remittance is the sale of foreign currency.
Foreign Exchange
Department
L/C Operation
Import Operation
Export Operation
Foreign Remittance
Foreign Currency Account
Inward Remittance
Outward Remittance
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 29
5.4 Functions of Foreign Exchange Department Import
Opening of letter of
credit (L/C) Advance bills Bills for collection Import Loan and
Guarantee
Export
Pre – Shipment advances
Purchase of foreign bills Negotiating of foreign
bills Export guarantees Advising letter of credit
Remittance
Issue of DD, TT, etc. Payment of DD, TT etc. Issue and enhancement
of travelers cheque Sale and enhancement
foreign currency note Nonresident accounts
Table 5 Functions of Foreign Exchange Department
5.5 Foreign Exchange Regulations Followed by NBL, Islampur Branch Generally the followings regulations are followed by National Bank Ltd, Islampur Branch:
5.5.1 Local Regulations
1. Foreign Exchange Regulation Act 1947.
2. Bangladesh Bank issue foreign exchange circular time to time to control the import and
remittance business.
3. Ministry of commerce issues exports-Import Policy guidelines.
5.5.2 International Regulations
1. International Chamber of Commerce is a world-wide non-governmental origination of
thousands of companies. It was founded in 1919; ICC has issued publications like UCPDC that is
being followed by all the member countries.
2. There is also an international court of arbitration to solve the international business disputes.
3. World Trade Organization is another international trade organization established in 1995.
General Agreement on Tariff & Trade was established in 1948 after completion of its 8th round;
the origination has been abolished & replaced by W.T.O. This origination has vital role in
international trade through its member countries.
5.6 Import Import means purchase of goods and services from the foreign countries. Normally consumers, firms,
industries and Government of Bangladesh import goods to meet their various necessities. So, in brief we
can say that import is the flow of goods and services purchased by economic agent staying in the
country from economic agent staying abroad. Normally import/export is done through letter of credit
(L/C). Bangladesh is one of the developing countries in the world. So, like the other developing countries
Bangladesh Imports largely than it Exports. Import of goods into Bangladesh is regulated by the ministry
of Commerce in the terms of Import-Export Act 1950, various Import policy orders and also public
notices issued from time to time by the office of the Chief Controller of Import and Export (CCI&E).
Imports are the foreign goods and services purchased by the customer, firms and government in
Bangladesh. The importers are asked by their exporters to open Letter of Credits (L/C), so that their
payment against goods is insured.
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 30
5.6.1 Import Regulations followed by NBL
As per Import & Export control Act 1950 no person can indent, import or export any goods in
Bangladesh except in case of exemption issued by the government of the peoples of Bangladesh.
According to Import and Export Control Act, 1950, to be an importer the person should obtain the
Import Registration Certificate (IRC) from the Office of Chief Controller of Import and Export.
Goods from Israel or goods originated from this country are not importable. Import of goods into
Bangladesh is not permissible on the flag vessel of Taiwan, South Africa and Israel.
5.6.2 Procedure of Import Registration Certificate (IRC)
To carry on the business of import the first thing one needs is registration with the licensing authority of
the area. To get this registration the interested person/institutions submits the application along with
the following papers/documents directly to the chief controller of imports and Exports or respective
zonal offices of CCI&E. Following papers/documents are usually required to obtain IRC.
1. Income tax registration certificate.
2. Nationality certificate.
3. Certificate from Chamber of Commerce and Industry or Registered Trade Association.
4. Bank solvency certificate.
5. Copy of trade license.
6. A forwarding letter to the CCI&E.
On receiving application the respective CCI&E offices will scrutinize the documents and conduct physical
verification (if necessary) and issue demand notice to the prospective Importers to furnish the following
papers/documents through their nominated Bank:
1. Original copy of Treasury Challan deposited as IRC fees.
2. Assets certificate.
3. Two copies of passport size photographs of the Importer.
4. In case of partnership registered partnership deed.
The nominated bank of the applicant will scrutinize the papers/documents and verify the signature of
the applicant. After verification the nominated bank will forward the same to the respective CCI&E
office with forwarding schedule in duplicate through bank’s representative. The CCI&E office will
acknowledge on duplicate copy of the forwarding schedule and return back the same to the bank
representative.
On being satisfied after securitization of the documents the respective zonal offices of CCI&E will issue
Import Registration Certificate (IRC) to the applicants.
5.6.3 Methods of Importing
There exist a number of procedures of importing goods from the foreign country. Goods may be directly
imported from the foreign manufactures or they may be imported through the selling agents of the
foreign producers. Whoever does the function there are some stages of importing, which are as follows:
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 31
Figure 8 Method of Importing
The situation of import of National Bank, Islampur Branch Limited of FY 2011-2012, 2012-2013, 2013-
2014 are as follows. All the figures are million in Taka.
Month FY 2011-2012 FY 2012-2013 FY 2013-2014
July 186.03 379.09 398.08
August 217.92 447.77 426.07
September 266.31 368.69 470.39
October 351.28 499.44 525.59
November 351.25 549.24 587.01
December 381.42 650.61 671.76
January 49.82 64.95 -
February 89.94 119.06 -
March 133.33 180.67 -
April 183.43 232.26 -
May 213.84 296.27 -
June 313.06 345.30 - Table 6 Import of NBL, Islampur Branch
Procuring Import Licence
Placing the Order
Opening L/C
Procuring Foreign
Exchange
Delivery of Goods
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 32
Figure 9 Import of NBL, Islampur Branch
5.6.4 Letter of Credit( )
A letter of credit is a financing instrument opened by a foreign buyer with a bank in her/his locality. The
letter of credit stipulates the purchase price agreed upon by the buyer and seller, the quantity of
merchandise to be shipped and the type of insurance coverage to protect the merchandise during
shipment. The letter of credit names the seller as beneficiary and identifies the definite time period. A
letter of credit gives some assurance to the seller that the buyer is solvent. Letter of Credit (L/C) is a
credit contract whereby the buyer’s bank is committed (on behalf of the buyer) to place an agreed
amount of money at the seller’s disposal under some agreed conditions.
5.6.5 Types of L/C
Documentary Credits may be either:
1. Revocable or,
2. Irrevocable
5.6.5.1 Revocable credit
A revocable credit is a credit that can be amended or cancelled by the issuing bank at any time without
prior notice to the seller. In case of seller (beneficiary), revocable credit involves risk, as the credit may
be amended or cancelled while the goods are in transit and before the documents are presented, or
although presented before payments has been made. The seller would then face the problem of
obtaining Payment. On the other hand revocable credit gives the buyer maximum flexibility, as it can be
amended or cancelled without prior notice to the seller up to the moment of payment. In the modern
banking the use of revocable credit is not widespread.
0100200300400500600700800
Import of NBL, Islampur Branch
FY 2011-2012 FY 2012-2013 FY 2013-2014
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 33
5.6.5.2 Irrevocable credit
An irrevocable credit is a documentary credit, which cannot be revoked, varied or changed/amended or
cancelled without the consent of all parties- buyer (Applicant), seller (Beneficiary), Issuing Bank, and
Confirming Bank (in case of confirmed Letter of Credit). An irrevocable credit constitutes a definite
undertaking of the issuing bank (since it cannot be amended or cancelled without the agreement of all
parties thereto), provided that the stipulated documents are presented and the seller satisfies the terms
and conditions. This sort of credit is always preferred to revocable letter of credit. According to UCPDC-
600, bankers now open only irrevocable letter of credit.
5.6.6 Back-to-Back Letter of Credit (BTB)
Bangladesh is a developing country. After receiving order from the importer, very frequently exporters
face problems of scarcity of raw material because some raw materials are not available in the country.
These have to be collected from abroad. In that case, exporter gives lien of export L/C to bank as
security and opens an L/C against it for importing raw materials. This L/C is called Back To Back L/C.
Sometimes there is provision in the export L/C that the importer can use the certain portion of the
export L/C amount for importing accessories that are necessary for the making of the product. Only in
that case, BTB is opened.
In the case of a Back-to Back L/C, a new L/C (an import L/C) is opened on the basis of an original L/C
called master L/C under the “Back-to-Back” concept. The beneficiary of the Back-to-Back L/C may be
located inside or outside the original beneficiary country. In back-to-back L/C, the applicant has the right
to import up to 75% of the total L/C amount. In case of a Back-to-Back L/C, no cash security (no margin)
is taken by the Bank, Bank liens the first L/C in case of a Back-to-Back L/C, the drawn bill is an issuance
/time bill.
In National Bank Ltd. papers / documents required for submission of for opening of Back-to-Back L/C:
1. Master L/C
2. Pro-forma Invoice or Indent
3. Insurance Cover Note with Money receipt
4. ERC in addition to IRC
5. No objection from previous banker
6. Factor inspection certificate
7. BGMEA membership
5.6.6.1 Eligibility of opening Back-To-Back L/C
The following instructions should be complied with while opening BTB export L/C:
1. The master export L/C should have validity period adequate to cover the time needed for
information of input manufacture of merchandise and shipment to consignee.
2. Back-to-back L/C value shall not exceed the admissible percentage of net FOB value of the
relative master export L/C value and price of goods to be importer must be competitive.
3. Back-to-Back import L/C s shall be opened on up to 180 days nuisance (DA) basis except in case
of those opened against export development fund (EDF) on sight basis.
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 34
4. All amendments of the master export L/C should be noted down carefully to rule out chances of
excess obligation under the BTB import L/C.
5.6.7 Procedure involved in L/C opening
1. At first the L/C opener is required to fill up the prescribed application form for requesting to
open an L/C for the favor of L/C opener.
2. After receiving the application form with the other required documents submitted by the
opener they are to be thoroughly scrutinized. The points, which shall be scrutinized, are
described below.
a) The amount and the description of the goods in the application should be relevant with
the indent or Pro-forma invoice or import contract.
b) The amount is covered by the insurance amount.
c) The items are not banned with the country’s regulation.
d) The indent produced has the Import Registration Certificate Number and the Indenter’s
Registration Number. The indent has indenting agent’s signature and importer
signature.
e) Whether transshipment and partial shipment is allowed.
If all documents along with the applicants are in order, the financial position and credit worthiness of
the importer, market demand of the goods are assessed, margin of L/C also determined. The rate of
margin depends on the financial condition of the banker, importers status of relation, importers
previous performance, nature of goods etc. the margin is to be retained from the importers either in
cash or debating the importer’s current account with the bank. The importer is also required to pay the
other concerning charges like FCC (Foreign Corresponding Charges), Telex charge, Handling charges, and
Commission etc.
After all these steps L/C is opened and forwarded to the advising bank.
5.6.8 Letter of Credit (L/C) Transmitting
Letter of Credit can be transmitted to the Advising bank through three methods. There are Telex,
Courier or Swift (Society for World Wide Inter Bank Financial Telecommunication). L/C is sent to the
advising bank in three copies the advising bank authenticates the original copy of L/C and delivers it to
the exporter. The Duplicate is kept with the advising bank.
5.6.8.1 Negotiation
The beneficiary (Export) receives the letter of Credit (L/C) from advising bank. After proper shipments of
goods as per terms and conditions of the Letter of Credit, required documents like commercial invoice,
bill of lading and bill of exchange and presented to the Negotiation Bank by the beneficiary for
negotiation. If the documents are in order as per the L/C then the Negotiating bank negotiates the drafts
making payment to the beneficiary. Then the negotiating bank forwards the drafts along with the
shipping documents to the L/C Opening Bank. The negotiating Bank reimburses the amount paid against
the draft from the Reimbursement Bank.
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 35
5.6.8.2 Amendment
Parties involved in a L/C, particularly the seller and the buyer cannot always satisfy the term and
conditions in full as expected due to some obvious and genuine reasons. In such situation, the credit
should be amended. National Bank Ltd. transmits the amendment by tested Telex to the Advising Bank;
In case of revocable credit it can be amended or cancelled by the issuing bank at any moment and
without prior notice to the beneficiary. But in case of irrevocable letter of credit, it can be neither
amended nor cancelled with the consent of the issuing bank, the confirming bank (if any) and the
beneficiary. If the letter of credit is amended, service charge and telex is debited from the party account
accordingly.
5.6.9 Examination of Documents
National Bank Limited officials check whether these documents have any discrepancy or not. Here
discrepancy means the dissimilarity of any of the documents with the conditions of the letter of credit.
5.6.10 Scrutiny of the Documents
First of all must be ensured that the full set of documents as mentioned in the L/C has been received.
1. Documents have been negotiated with in the negotiations period.
2. The Bill of Lading/Air way Bill/Rail way Receipt is not dated later than the last date of shipment
mentioned in the L/C. the L/C has not been amended or subjected to any special instructions,
which are to be scrutinized.
3. Bill of exchange.
4. Commercial Invoice.
5. Bill of Lading.
6. Certificate of Origin.
7. Packing List.
5.6.11 Retirement of shipping documents
The importer receives the intimation and gives necessary instruction to the bank for the retirement of
the disposal of the sipping to clear the imported bills or for the disposal of the shipping documents to
clear the imported goods from the custom authority. Following steps are to be taken for retirement of
the documents.
1. Calculation of interest (if any).
2. Calculation of other charges.
3. Passing voucher.
4. Entry in the register.
5.7 Export Export means to transfer goods from one place to another. The exporter must pay duty on goods
exported. The exporter should obtain registration from the office the chief controller of import &
export, trade license ERC, LCA to open export L/C. In order to Creation of wealth in any country depends
on the expansion of production and increasing participation in international trade. By increasing
production in the export sector we can improve the employment level of such a highly populated
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 36
country like Bangladesh. Bangladesh exports a large quantity of goods and services to foreign
households. Readymade textile garments (both knitted and woven), Jute, Jute-made products, frozen
shrimps, tea are the main goods that Bangladeshi exporters export to foreign countries. Garments
sector is the largest sector that exports the lion share of the country's export. Bangladesh exports most
of its readymade garments products to U.S.A and European Community (EC) countries. Bangladesh
exports about 40% of its readymade garments products to U.S.A. Most of the exporters who export
through NBL, Islampur branch are readymade garments exporters. They open export L/Cs here to export
their goods, which they open against the import L/Cs opened by their foreign importers.
5.7.1 Method of Export
Figure 10 Export Method
5.7.2 Things Done in Export
In broader aspect the major responsibility that re performed here are:
1. L/C Advising
2. Documents Collection
3. Documents negotiation
4. Export financing
Parties of the Export are as follows:
Closing Transaction
Securing Payments
Perparing Export Papers
Shipment of Goods
Getting the Goods Insured
Procurement of Goods
Exchange Rate
Booking of Freight
Asking to Open L/C
Receiving the Order
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 37
1. L/C issuing bank
2. Importer
3. L/C advising bank
4. Exporter
5. Confirming bank
6. Negotiation bank
7. The paying / Reimbursing Bank
5.7.3 Export Formalities
The export trade of the country is regulated by the Imports and Exports (control) Act, 1950. There are a
number of formalities, which an exporter has to fulfill before and after shipment of goods. These forma
or procedures are enumerated as follows:
1. Registration of the Exporter
2. Export Registration Certificate (ERC)
3. Export permit Form (EXP)
The situation of Export of National Bank Limited, Islampur Branch of FY 2012-2013, 2013-2014 are as
follows. All the figures are million in Taka.
Month All Amount Million in taka
FY 2012-2013 FY 2013-2014 July 0 167.94 August 30.23 188.93 September 39.24 208.37 October 39.79 130.92 November 86.38 250.36 December 114.16 262.02 January 7.9 - February 22.86 - March 35.19 - April 72.48 - May 100.31 - June 134.54 -
Table 7 Export of NBL, Islampur Branch
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 38
Figure 11 Export of NBL, Islampur Branch
5.7.4 Export Procedure
1. An exporter has to obtain a general permission from the office of chief controller of import and
export (CCI&E). This permission is known as Exporter’s Registration Certificate (ERC).
2. If any exporter wants to export any banned or restricted item, then he has to obtain special
permission from CCI&E and Export Promotion Bureau (EBP).
3. To obtain an ERC, he has to submit a valid trade license, bank solvency certificate of any trade
association etc. to CCI&E Office.
4. He has to obtain a general permission from the office of EBP. This permission is known as
membership certificate of EBP.
5. Then he will collect the export order through a Letter of Credit (L/C) or Contract. In case of L/C,
it should be authenticated and advised by a bank.
6. After then he can export the good against L/C for a payment term as “Sight” basis. Even they can
export goods on consignment basis.
7. He has to check all the terms and conditions of L/C carefully. If it is possible to comply with, he
takes necessary steps to export the goods.
8. He applies to the bank along with original L/C, a copy of commercial invoice for issuance of EXP
form.
9. Exporters sign and fill up their portion of EXP form and then they collect bank’s seal and
signature on the same EXP form
10. Exporters make range of goods for shipment by sea/air through their nominated Clearing and
Forwarding Agent (C & F Agent).
11. C & F Agent takes necessary approval from the port custom authority on behalf of the exporter
before shipment of goods.
12. To take the approval of custom authority. The agent has to submit their required papers like full
set of EXP form, copy of commercial invoice, copy of packing list, copy of ERC etc.
0
50
100
150
200
250
300
Export of NBL, Islampur Branch
FY 2012-2013
2013-2014
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 39
13. After approval of customs authority, C&F Agent directly sends the original copy of EXP from
Bangladesh Bank and the rest three EXP forms ( Duplicate, Triplicate and Quadruplicate ) returns
to the exporters.
14. Then exporter prepares or collects all related documents or papers from different authorities as
per L/C terms.
15. Then the exporter submits the documents to their bank for negotiation or collection of proceeds
against their export.
5.7.5 Financial Incentives given by National Bank Ltd
Financing of export credit is made in two stages
1. Pre-shipment Stage.
2. Post-shipment Stage.
5.7.5.1 Pre-shipment Credit
Pre-shipment credit is the name suggests is given to finance the activities of an exporter prior to the
actual shipment of the goods for export. The purpose of such credit is to meet working capital needs
starting from the point of purchasing of raw materials to final shipment of goods for export to foreign
country. Before allowing such credit to the exporters the bank takes into consideration about the credit
worthiness, export performance of the exporters, together with all other necessary information
required for sanctioning the credit in accordance with the existing rules and regulations. Pre-shipment
credit is given for the following purpose:
1. Cash for local procurement and meeting related expenses.
2. Procuring and processing of the goods for export.
3. Packing and transporting of goods for export.
4. Payment of insurance premium.
5. Inspections fees.
6. Freight charges etc.
5.7.5.2 Post shipment finance
This type of credit refers to the credit facilities extended to the exporters by the banks after shipment of
the goods against export documents. Necessary for such credit arises as the exporter cannot afford to
wait for long time for without pay manufacturers/suppliers. Before extending such credit, it is necessary
on the part of banks to look into carefully the financial soundness of exporters and buyers as well as
other relevant document connected with the export in accordance with rules and regulations in force.
Banks in our country extend post shipment credit to the exporters through:
1. Negotiation of documents under L/C.
2. Advances against export bills surrendered for collection (FDBC)
5.7.6 Foreign document bill of collection (FDBC)
If the bank (National Bank) is not satisfied with the documents submitted, National Bank gives the
exporter reasonable time to remove the discrepancies or sends the documents to letter of credit
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 40
opening bank of collection. This is known as foreign document bill of collection (FDBC). Normally
negotiating bank will send the documents on collection basis mainly for the following discrepancies:
1. L/C expired
2. Late shipment
3. Late presentation
4. L/C overdrawn
5. Unit price differ between L/C and commercial invoice
6. Consignee name and address differ between L/C and other documents
7. Discrepancies in B/L,
8. Any other major discrepancies
FDBP signifies that the exporter will receive payment only when the issuing bank gives payment.
National bank make regular follow-up with the L/C issuing bank in case of any delay in getting payment.
5.8 Remittance Foreign remittance means purchase and sale of freely convertible foreign currencies are 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.
Key functions of foreign remittance department are given below.
5.8.1 Inward Remittance
Inward remittance refers to the extent where by bank makes payments to the client against foreign
demand draft. They will make payment to the client by verifying the test key number, and signature of
the authorized officer. The bank makes payment immediately if the amount is less than Tk-100000, it
must wait to get credit advice from the issuing bank.
5.8.1.1 Modes of Foreign Inward Remittance
1. T.T. (Telegraphic Transfer),
2. M.T. (Mail Transfer),
3. D. D. (Demand Draft),
4. T.C. (Travelers Cheque),
5. P. O. (Pay Order).
Besides this Foreign Inward Remittance these also includes remittance on account of export, purpose of
bills, purpose of T.C. foreign currency notes and coins, cheques issued on foreign banks in favor of
beneficiaries in Bangladesh etc.
Telegraphic Transfer
Cable or telex instructions of payment are called as Telegraphic Transfer, where foreign banks issue a
T.T. in favor of someone in Bangladesh. In credits the amount received from the remitter to the Nostro
A/C of its correspondent bank, on receipt of the T.T. in foreign currency or in equivalent Bangladeshi
Taka to the beneficiary.
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 41
Mail Transfer
Mail transfer is an instrument issued by a remitting bank to the paying bank advising in writing to make
payment of certain amount to specific beneficiary.
Demand Draft
The demand draft is a negotiable instrument issued by a bank drawn on other bank with the instruction
to pay a certain amount to beneficiary on demand.
Pay Order
A payable order is a written under issued by a branch of bank, to pay a certain sum of money to specific
person or a bank. It may be said as to be a banker’s cheque as it issued by a bank and payable by itself.
5.8.2 Outward Remittance
When being a resident of Bangladesh someone sends money to Foreign Account is known as outward
remittance process, in short transferring funds from your account to another account which is in
another country. This is a service approved under the Foreign Exchange Management Act, which allows
one to transfer money to most countries all around the world. The payments are made through this
service is usually for medical treatment, donations, sending gifts, payments for family members
education, foreign travel expenses etc. It is the only way to get money if anyone faces problem while in
abroad.
The situation of Remittance of National Bank Limited, Islampur Branch of FY 2012-2013, 2013-2014 are
as follows. All the figures are million in Taka.
Month All Figures are million in Taka
FY2012-2013 FY2013-2014
July 40.03 39.65
August 47.39 44.32
September 53.14 45.10
October 60.91 45.87
November 65.19 49.76
December 71.05 54.43
January 7.92 -
February 12.62 -
March 17.99 -
April 22.60 -
May 27.99 -
June 33.44 - Table 8 Export of NBL, Islampur Branch
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 42
Figure 12 Export of NBL, Islampur Branch
0
10
20
30
40
50
60
70
80
Remittance of NBL, Islampur Branch
FY 2012-2013
FY 2013-2014
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 43
(𝑨𝒏𝒂𝒍𝒚𝒕𝒊𝒄𝒂𝒍 𝑷𝒂𝒓𝒕𝒔)
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 44
6 Analytical Parts
6.1 Regression Analysis Necessary information for Regression Analysis
Import and Exchange Rate
By analyzing the above table, a regression analysis is made through SPSS software version 16. REGRESSION
/MISSING LISTWISE
/STATISTICS COEFF OUTS R ANOVA
/CRITERIA=PIN(.05) POUT(.10)
/NOORIGIN
/DEPENDENT Import
/METHOD=ENTER Exchange_Rate.
Regression1
Variables Entered/Removedb
Model
Variables
Entered
Variables
Removed Method
1 Exchange_Ratea . Enter
a. All requested variables entered.
b. Dependent Variable: Import
The following table is the Model Summary table. This table provides the R, R2, adjusted R2, and the
standard error of the estimate, which can be used to determine how well regression model fits the data:
Model Summary
Model R R Square
Adjusted R
Square
Std. Error of the
Estimate
1 .112a .013 -.023 173.22057
a. Predictors: (Constant), Exchange_Rate
1 This Regression is calculated by using data which is plotted in Appendix B
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 45
The "R" column represents the value of R can be considered to be one measure of the quality of the
prediction of the dependent variable; in this case, Import. A value of 0.112 indicates a poor level of
prediction. The "R Square" column represents the R2 value which is the proportion of variance in the
dependent variable that can be explained by the independent variables. Here the value of 0.013 that
independent variables explain 1.3 % of the variability of our dependent variable, Import.
The F-ratio in the ANOVA table tests whether the overall regression model is a good fit for the data. The
table shows that the independent variables statistically insignificantly predict the dependent variable p >
.0005.
ANOVAb
Model Sum of Squares df Mean Square F Sig.
1 Regression 10730.670 1 10730.670 .358 .555a
Residual 840150.211 28 30005.365
Total 850880.881 29
a. Predictors: (Constant), Exchange_Rate
b. Dependent Variable: Import
Coefficientsa
Model
Unstandardized Coefficients
Standardized
Coefficients
t Sig. B Std. Error Beta
1 (Constant) 904.585 958.558 .944 .353
Exchange_Rate -7.231 12.091 -.112 -.598 .555
a. Dependent Variable: Import
The general form of the equation to predict,
Y= 904.585 – 7.231 X1
Here, Y= Import, X1= Exchange Rate
So we can conclude for every unit increase in Exchange_Rate, we expect a 7.231 unit decrease in the
Import, holding all other variables constant.
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 46
Import and Inflation Rate
By analyzing the above table, a regression analysis is made through SPSS software version 16.
REGRESSION
/MISSING LISTWISE
/STATISTICS COEFF OUTS R ANOVA
/CRITERIA=PIN(.05) POUT(.10)
/NOORIGIN
/DEPENDENT Import
/METHOD=ENTER Inflation_Rate.
Regression2
[DataSet1] C:\Users\uttam\Desktop\Regreation Raw Data.sav
Variables Entered/Removedb
Model
Variables
Entered
Variables
Removed Method
1 Inflation_Ratea . Enter
a. All requested variables entered.
b. Dependent Variable: Import
c.
The following table is the Model Summary table. This table provides the R, R2, adjusted R2, and the
standard error of the estimate, which can be used to determine how well regression model fits the data:
Model Summary
Model R R Square
Adjusted R
Square
Std. Error of the
Estimate
1 .232a .054 .020 169.56634
a. Predictors: (Constant), Inflation_Rate
The "R" column represents the value of R can be considered to be one measure of the quality of the
prediction of the dependent variable; in this case, Import. A value of 0.232 indicates a poor level of
prediction. The "R Square" column represents the R2 value which is the proportion of variance in the
dependent variable that can be explained by the independent variables. Here the value of 0.054 that
independent variables explain 5.4 % of the variability of our dependent variable, Import.
2 This Regression is calculated by using data which is plotted in Appendix B
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 47
The F-ratio in the ANOVA table tests whether the overall regression model is a good fit for the data. The table shows that the independent variables statistically insignificantly predict the dependent variable p > .0005.
ANOVAb
Model Sum of Squares df Mean Square F Sig.
1 Regression 45804.082 1 45804.082 1.593 .217a
Residual 805076.799 28 28752.743
Total 850880.881 29
a. Predictors: (Constant), Inflation_Rate
b. Dependent Variable: Import
Coefficientsa
Model
Unstandardized Coefficients
Standardized
Coefficients
t Sig. B Std. Error Beta
1 (Constant) 483.375 124.124 3.894 .001
Inflation_Rate -19.767 15.661 -.232 -1.262 .217
a. Dependent Variable: Import
The general form of the equation to predict,
Import= 483.375 – 19.767 X1
Here, Y= Import, X1= Inflation Rate
So we can conclude for every unit increase in Inflation_Rate, we expect a 19.767 unit decrease in the
Import, holding all other variables constant.
Multiple Liner Regression Analysis
By analyzing the above table, a regression analysis is made through SPSS software version 16. REGRESSION
/MISSING LISTWISE
/STATISTICS COEFF OUTS R ANOVA
/CRITERIA=PIN(.05) POUT(.10)
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 48
/NOORIGIN
/DEPENDENT Import
/METHOD=ENTER Inflation_Rate Exchange_Rate.
Regression3
[DataSet0]
Variables Entered/Removedb
Model
Variables
Entered
Variables
Removed Method
1 Exchange_Rate,
Inflation_Ratea
. Enter
a. All requested variables entered.
b. Dependent Variable: Import
The following table is the Model Summary table. This table provides the R, R2, adjusted R2, and the
standard error of the estimate, which can be used to determine how well regression model fits the data:
Model Summary
Model R R Square
Adjusted R
Square
Std. Error of the
Estimate
1 .508a .258 .203 152.9139
a. Predictors: (Constant), Exchange_Rate, Inflation_Rate
The "R" column represents the value of R can be considered to be one measure of the quality of the
prediction of the dependent variable; in this case, Import. A value of 0.508 indicates a good level of
prediction. The "R Square" column represents the R2 value which is the proportion of variance in the
dependent variable that can be explained by the independent variables. Here the value of 0.258 that
independent variables explain 25.8% of the variability of our dependent variable, Import.
The F-ratio in the ANOVA table tests whether the overall regression model is a good fit for the data. The table shows that the independent variables statistically significantly predict the dependent variable p > .0005.
3 This Regression is calculated by using data which is plotted in Appendix B
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 49
ANOVAb
Model Sum of Squares df Mean Square F Sig.
1 Regression 219548.648 2 109774.324 4.695 .018a
Residual 631332.233 27 23382.675
Total 850880.881 29
a. Predictors: (Constant), Exchange_Rate, Inflation_Rate
b. Dependent Variable: Import
Coefficientsa
Model
Unstandardized Coefficients
Standardized
Coefficients
t Sig. B Std. Error Beta
1 (Constant) 4426.321 1450.804 3.051 .005
Inflation_Rate -65.729 21.995 -.771 -2.988 .006
Exchange_Rate -45.311 16.622 -.704 -2.726 .011
a. Dependent Variable: Import
The general form of the equation to predict,
Import= 4426.321 - 65.729 X1 – 45.311 X2
Here, Y= Import, X1= Inflation Rate, X2= Exchange Rate
So we can conclude for every unit increase in Inflation_Rate, we expect a 65.729 unit decrease in the
Import, holding all other variables constant. On the other hand for every unit increase in Exchange_Rate,
we expect a 45.311 unit decrease in the Import, holding all other variables constant.
Pearson’s Correlation
CORRELATIONS
/VARIABLES=Import Exchange_Rate Inflation_Rate
/PRINT=TWOTAIL NOSIG
/MISSING=PAIRWISE.
Correlations
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 50
[DataSet1] C:\Users\uttam\Desktop\Regreation Raw Data.sav
Correlations
Import Exchange_Rate Inflation_Rate
Import Pearson Correlation 1 -.112 -.232
Sig. (2-tailed) .555 .217
N 30 30 30
Exchange_Rate Pearson Correlation -.112 1 -.767**
Sig. (2-tailed) .555 .000
N 30 30 30
Inflation_Rate Pearson Correlation -.232 -.767** 1
Sig. (2-tailed) .217 .000
N 30 30 30
**. Correlation is significant at the 0.01 level (2-tailed).
We can find the Pearson’s r statistic in the top of each box. The Pearson’s r for the correlation between
Import and Exchange Rate is -0.112 and Import and Inflation Rate is -0.232. If the value of Correlation is
close to 1 that means it is very good. But both of our value is far from 1. So there is no significant
relationship between then. Import and Exchange rate’s Pearson’s r is -0.112, so one unit increase in one
variable will decrease the other variable by 0.112.
Import and Inflation rate’s Pearson’s r is -0.232, so one unit increase in one variable will decrease the
other variable by 0.232.
Export and Exchange Rate
REGRESSION
/MISSING LISTWISE
/STATISTICS COEFF OUTS R ANOVA
/CRITERIA=PIN(.05) POUT(.10)
/NOORIGIN
/DEPENDENT Export
/METHOD=ENTER Exchange_Rate.
Regression4
4 This Regression is calculated by using data which is plotted in Appendix C
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 51
[DataSet1] C:\Users\uttam\Desktop\Export Regreation Raw.sav
Variables Entered/Removedb
Model
Variables
Entered
Variables
Removed Method
1 Exchange_Ratea . Enter
a. All requested variables entered.
b. Dependent Variable: Export
The following table is the Model Summary table. This table provides the R, R2, adjusted R2, and the
standard error of the estimate, which can be used to determine how well regression model fits the data:
Model Summary
Model R R Square
Adjusted R
Square
Std. Error of the
Estimate
1 .595a .354 .311 67.25746
a. Predictors: (Constant), Exchange_Rate
The "R" column represents the value of R can be considered to be one measure of the quality of the
prediction of the dependent variable; in this case, Export. A value of 0.595 indicates a moderate level of
prediction. The "R Square" column represents the R2 value which is the proportion of variance in the
dependent variable that can be explained by the independent variables. Here the value of 0.354 that
independent variables explain 35.4 % of the variability of our dependent variable, Export.
The F-ratio in the ANOVA table tests whether the overall regression model is a good fit for the data. The
table shows that the independent variables statistically insignificantly predict the dependent variable p >
.0005
ANOVAb
Model Sum of Squares df Mean Square F Sig.
1 Regression 37224.380 1 37224.380 8.229 .012a
Residual 67853.495 15 4523.566
Total 105077.875 16
a. Predictors: (Constant), Exchange_Rate
b. Dependent Variable: Export
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 52
Coefficientsa
Model
Unstandardized Coefficients
Standardized
Coefficients
t Sig. B Std. Error Beta
1 (Constant) 2493.656 830.658 3.002 .009
Exchange_Rate -30.174 10.519 -.595 -2.869 .012
a. Dependent Variable: Export
The general form of the equation to predict,
Y= 2493.656 – 30.174 X1
So we can conclude for every unit increase in Exchange_Rate, we expect a 30.174 unit decrease in the
export, holding all other variables constant.
Here, Y= Export, X1= Exchange Rate
Export and Inflation Rate
REGRESSION
/MISSING LISTWISE
/STATISTICS COEFF OUTS R ANOVA
/CRITERIA=PIN(.05) POUT(.10)
/NOORIGIN
/DEPENDENT Export
/METHOD=ENTER Inflation_Rate.
Regression5
[DataSet1] C:\Users\uttam\Desktop\Export Regreation Raw.sav
Variables Entered/Removedb
Model
Variables
Entered
Variables
Removed Method
1 Inflation_Ratea . Enter
5 This Regression is calculated by using data which is plotted in Appendix C
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 53
Variables Entered/Removedb
Model
Variables
Entered
Variables
Removed Method
1 Inflation_Ratea . Enter
a. All requested variables entered.
b. Dependent Variable: Export
The following table is the Model Summary table. This table provides the R, R2, adjusted R2, and the
standard error of the estimate, which can be used to determine how well regression model fits the data:
Model Summary
Model R R Square
Adjusted R
Square
Std. Error of the
Estimate
1 .341a .116 .057 78.68067
a. Predictors: (Constant), Inflation_Rate
The "R" column represents the value of R can be considered to be one measure of the quality of the
prediction of the dependent variable; in this case, Export. A value of 0.341 indicates a bad level of
prediction. The "R Square" column represents the R2 value which is the proportion of variance in the
dependent variable that can be explained by the independent variables. Here the value of 0.116 that
independent variables explain 11.6 % of the variability of our dependent variable, Export.
The F-ratio in the ANOVA table tests whether the overall regression model is a good fit for the data. The
table shows that the independent variables statistically insignificantly predict the dependent variable p >
.0005
ANOVAb
Model Sum of Squares df Mean Square F Sig.
1 Regression 12218.152 1 12218.152 1.974 .180a
Residual 92859.723 15 6190.648
Total 105077.875 16
a. Predictors: (Constant), Inflation_Rate
b. Dependent Variable: Export
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 54
Coefficientsa
Model
Unstandardized Coefficients
Standardized
Coefficients
t Sig. B Std. Error Beta
1 (Constant) -83.715 140.099 -.598 .559
Inflation_Rate 27.644 19.677 .341 1.405 .180
a. Dependent Variable: Export
The general form of the equation to predict,
Y= 27.644 X1 - 83.715
Here, Y= Export, X1= Inflation Rate
So we can conclude for every unit increase in Inflation_Rate, we expect a 27.644 unit increase in the
export, holding all other variables constant.
Multiple Liner Regression Analysis
REGRESSION
/MISSING LISTWISE
/STATISTICS COEFF OUTS R ANOVA
/CRITERIA=PIN(.05) POUT(.10)
/NOORIGIN
/DEPENDENT Export
/METHOD=ENTER Inflation_Rate Exchange_Rate.
Regression6
[DataSet1] C:\Users\uttam\Desktop\Export Regreation Raw.sav
Variables Entered/Removedb
Model
Variables
Entered
Variables
Removed Method
1 Exchange_Rate,
Inflation_Ratea
. Enter
a. All requested variables entered.
b. Dependent Variable: Export
6 This Regression is calculated by using data which is plotted in Appendix C
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 55
The following table is the Model Summary table. This table provides the R, R2, adjusted R2, and the standard error of the estimate, which can be used to determine how well regression model fits the data:
Model Summary
Model R R Square
Adjusted R
Square
Std. Error of the
Estimate
1 .669a .448 .369 64.35711
a. Predictors: (Constant), Exchange_Rate, Inflation_Rate
The "R" column represents the value of R can be considered to be one measure of the quality of the
prediction of the dependent variable; in this case, Export. A value of 0.669 indicates a moderate level of
prediction. The "R Square" column represents the R2 value which is the proportion of variance in the
dependent variable that can be explained by the independent variables. Here the value of 0.448 that
independent variables explain 44.8% of the variability of our dependent variable, Export.
The F-ratio in the ANOVA table tests whether the overall regression model is a good fit for the data. The table shows that the independent variables statistically significantly predict the dependent variable p > .0005.
ANOVAb
Model Sum of Squares df Mean Square F Sig.
1 Regression 47092.143 2 23546.071 5.685 .016a
Residual 57985.732 14 4141.838
Total 105077.875 16
a. Predictors: (Constant), Exchange_Rate, Inflation_Rate
b. Dependent Variable: Export
Coefficientsa
Model
Unstandardized Coefficients
Standardized
Coefficients
t Sig. B Std. Error Beta
1 (Constant) 4775.739 1678.601 2.845 .013
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 56
Inflation_Rate -46.703 30.258 -.576 -1.544 .145
Exchange_Rate -54.905 18.922 -1.083 -2.902 .012
a. Dependent Variable: Export
The general form of the equation to predict,
Y= 4775.739 – 46.703 X1 – 54.905 X2
So we can conclude for every unit increase in Inflation_Rate, we expect a 46.703 unit decrease in the
Export, holding all other variables constant. On the other hand for every unit increase in Exchange_Rate,
we expect a 54.905 unit decrease in the Export, holding all other variables constant.
Here, Y= Export, X1= Inflation Rate, X2= Exchange Rate
Pearson’s Correlation
CORRELATIONS /VARIABLES=Export Exchange_Rate Inflation_Rate
/PRINT=TWOTAIL NOSIG
/MISSING=PAIRWISE.
Correlations
[DataSet1] C:\Users\uttam\Desktop\Export Regreation Raw.sav
Correlations
Export Exchange_Rate Inflation_Rate
Export Pearson Correlation 1 -.595* .341
Sig. (2-tailed) .012 .180
N 17 17 17
Exchange_Rate Pearson Correlation -.595* 1 -.847
**
Sig. (2-tailed) .012 .000
N 17 17 17
Inflation_Rate Pearson Correlation .341 -.847** 1
Sig. (2-tailed) .180 .000
N 17 17 17
*. Correlation is significant at the 0.05 level (2-tailed).
**. Correlation is significant at the 0.01 level (2-tailed).
We can find the Pearson’s r statistic in the top of each box. The Pearson’s r for the correlation between
Export and Exchange Rate is -0.595 and Export and Inflation Rate are 0.341. If the value of Correlation is
close to 1 that means it is very good. But both of our value is far from 1. So there is no significant
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 57
relationship between then. Export and Exchange rate’s Pearson’s r is -0.595, so one unit increase in one
variable will decrease the other variable by 0.595.
Export and Inflation rate’s Pearson’s r is 0.341, so one unit increase in one variable will increase the
other variable by 0.341.
Comments
Variables R R2 Sig
Dependent Independent
Import Exchange Rate
0.112 0.013 0.555
Import Inflation Rate
0.232 0.054 0.217
Import Exchange Rate,
Inflation Rate
0.508 0.258 0.018
Export Exchange Rate
0.595 0.354 0.012
Export Inflation Rate
0.341 0.116 0.180
Export Exchange Rate,
Inflation Rate
0.669 0.448 0.016
Table 9 Summery Data on Regression Analysis
In case of Import, the value of R2 of inflation is 0.054 and exchange rate is 0.013. So import is much more
affected by inflation. On the other hand, In case of Export, the value of R2 of inflation is 0.116 and
exchange rate is 0.354. So export is much more affected by exchange rate.
If we consider multiple liner regression, we see that the value of R2 of Import is 0.258 and the value of R2
of Export is 0.448. So export is much more influenced by exchange rate and inflation.
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 58
Earnings and Import REGRESSION
/MISSING LISTWISE
/STATISTICS COEFF OUTS R ANOVA
/CRITERIA=PIN(.05) POUT(.10)
/NOORIGIN
/DEPENDENT Earnings
/METHOD=ENTER Import.
Regression7
[DataSet0] C:\Users\uttam\Desktop\detemination of most important factor on earnings.sa
v
Variables Entered/Removedb
Model
Variables
Entered
Variables
Removed Method
1 Importa . Enter
a. All requested variables entered.
b. Dependent Variable: Earnings
Model Summary
Model R R Square
Adjusted R
Square
Std. Error of the
Estimate
1 .989a .978 .977 .76454
a. Predictors: (Constant), Import
ANOVAb
Model Sum of Squares df Mean Square F Sig.
1 Regression 419.458 1 419.458 717.618 .000a
Residual 9.352 16 .585
Total 428.810 17
a. Predictors: (Constant), Import
7This Regression is calculated by using data which is plotted in Appendix D
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 59
ANOVAb
Model Sum of Squares df Mean Square F Sig.
1 Regression 419.458 1 419.458 717.618 .000a
Residual 9.352 16 .585
Total 428.810 17
b. Dependent Variable: Earnings
Coefficientsa
Model
Unstandardized Coefficients
Standardized
Coefficients
t Sig. B Std. Error Beta
1 (Constant) -.133 .465 -.287 .778
Import .029 .001 .989 26.788 .000
a. Dependent Variable: Earnings
Earnings and Export
REGRESSION
/MISSING LISTWISE
/STATISTICS COEFF OUTS R ANOVA
/CRITERIA=PIN(.05) POUT(.10)
/NOORIGIN
/DEPENDENT Earnings
/METHOD=ENTER Export.
Regression8
[DataSet0] C:\Users\uttam\Desktop\detemination of most important factor on earnings.sa
v
Variables Entered/Removedb
Model
Variables
Entered
Variables
Removed Method
8This Regression is calculated by using data which is plotted in Appendix E
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 60
1 Exporta . Enter
a. All requested variables entered.
b. Dependent Variable: Earnings
Model Summary
Model R R Square
Adjusted R
Square
Std. Error of the
Estimate
1 .729a .531 .502 3.54508
a. Predictors: (Constant), Export
ANOVAb
Model Sum of Squares df Mean Square F Sig.
1 Regression 227.728 1 227.728 18.120 .001a
Residual 201.082 16 12.568
Total 428.810 17
a. Predictors: (Constant), Export
b. Dependent Variable: Earnings
Coefficientsa
Model
Unstandardized Coefficients
Standardized
Coefficients
t Sig. B Std. Error Beta
1 (Constant) 6.716 1.374 4.889 .000
Export .044 .010 .729 4.257 .001
a. Dependent Variable: Earnings
Earnings and Remittance
REGRESSION
/MISSING LISTWISE
/STATISTICS COEFF OUTS R ANOVA
/CRITERIA=PIN(.05) POUT(.10)
/NOORIGIN
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 61
/DEPENDENT Earnings
/METHOD=ENTER Remittance.
Regression9
[DataSet0] C:\Users\uttam\Desktop\detemination of most important factor on earnings.sa
v
Variables Entered/Removedb
Model
Variables
Entered
Variables
Removed Method
1 Remittancea . Enter
a. All requested variables
entered.
b. Dependent Variable: Earnings
Model Summary
Model R R Square
Adjusted R
Square
Std. Error of the
Estimate
1 .877a .769 .755 2.48711
a. Predictors: (Constant), Remittance
ANOVAb
Model Sum of Squares df Mean Square F Sig.
1 Regression 329.838 1 329.838 53.322 .000a
Residual 98.972 16 6.186
Total 428.810 17
a. Predictors: (Constant), Remittance
b. Dependent Variable: Earnings
9This Regression is calculated by using data which is plotted in Appendix F
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 62
Coefficientsa
Model
Unstandardized Coefficients
Standardized
Coefficients
t Sig. B Std. Error Beta
1 (Constant) 1.184 1.511 .783 .445
Remittance .248 .034 .877 7.302 .000
a. Dependent Variable: Earnings
Multi linier Regression Analysis
REGRESSION
/MISSING LISTWISE
/STATISTICS COEFF OUTS R ANOVA
/CRITERIA=PIN(.05) POUT(.10)
/NOORIGIN
/DEPENDENT Earnings
/METHOD=ENTER Remittance Import Export.
Regression10
[DataSet0] C:\Users\uttam\Desktop\Earnings and Import.sav
Variables Entered/Removedb
Model
Variables
Entered
Variables
Removed Method
1 Export,
Remittance,
Importa
. Enter
a. All requested variables entered.
b. Dependent Variable: Earnings
Model Summary
Model R R Square
Adjusted R
Square
Std. Error of the
Estimate
10
This Regression is calculated by using data which is plotted in Appendix G
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 63
1 1.000a 1.000 1.000 .01187
a. Predictors: (Constant), Export, Remittance, Import
ANOVAb
Model Sum of Squares df Mean Square F Sig.
1 Regression 428.808 3 142.936 1.015E6 .000a
Residual .002 14 .000
Total 428.810 17
a. Predictors: (Constant), Export, Remittance, Import
b. Dependent Variable: Earnings
Coefficientsa
Model
Unstandardized Coefficients
Standardized
Coefficients
t Sig. B Std. Error Beta
1 (Constant) -.011 .007 -1.451 .169
Remittance .016 .001 .057 27.841 .000
Import .023 .000 .808 330.747 .000
Export .013 .000 .207 203.884 .000
a. Dependent Variable: Earnings
We can get the following equation,
Y= 0.016X1 +0.023X2+0.013X3 -0.011
So we can conclude for every unit increase in X1, we expect a 0.016 unit increase in Y, holding all other
variables constant. On the other hand for every unit increase in X2, we expect a 0.023 unit increase in Y,
holding all other variables constant. Again for every unit increase in X3, we expect a 0.013 unit increase
in Y, holding all other variables constant.
Here,
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 64
Y= Earnings, X1= Import, X2 = Export, X3= Remittance
Comments
Variables R R2 Sig
Dependent Independent
Earnings Import 0.989 0.978 0.000
Earnings Export 0.729 0.531 0.001
Earnings Remittance 0.877 0.769 0.000
Earnings Import, Export and Remittance
1.00 1.00 0.000
Table 10 Summary Data on Regression analysis
The "R" column represents the value of R can be considered to be one measure of the quality of the
prediction of the dependent variable. A value of 0.989 in import indicates a very good level of
prediction, a value of 0.729 in export indicates a good level of prediction, a value of 0.87 in remittance
indicates a very good level of prediction,. The "R Square" column represents the R2 value which is the
proportion of variance in the dependent variable that can be explained by the independent variables.
Here the value of 0.978 that independent variable import, explains 97.8% of the variability of our
dependent variable, earnings. Here the value of 0.531 that independent variable export, explains 53.1%
of the variability of our dependent variable, earnings. Here the value of 0.769 that independent variable
remittance, explains 76.9% of the variability of our dependent variable, earnings.
In multiple regressions, the value of R is 1.00, the R2 is also 1.00.
From the above discussion, we can say the lion share of earnings is contributed by import. Remittance is
also an important factor which contributes in foreign exchange earnings. Export also contributes foreign
exchange earnings.
So we can say, the first concern of the bank should be import section, second on remittance and third
on is export.
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 65
6.2 Growth Analysis
Growth Rate=
* 100
Import Growth on diagram11
Figure 13 Growth Rate of Import
Comments: In FY 2011-2012, in month august the growth rate was 17.20%. Then it was increasing slowly. But in the month November growth rate was 0%. Also we can see in the month January, the growth rate was -86.91%. If we see the growth chart and diagram, we will be able to understand that growth rate of import is so much volatile. In the very beginning of FY 2013-2014 growth rate was also low.
11
This diagram is calculated by using data which is plotted in Appendix H
-100.00
-50.00
0.00
50.00
100.00
July
Sep
tem
be
r
No
vem
be
r
Jan
uar
y
Mar
ch
May
July
Sep
tem
be
r
No
vem
be
r
Jan
uar
y
Mar
ch
May
July
Sep
tem
be
r
No
vem
be
r
FY 2011-2012 FY 2012-2013 FY 2013-2014
Growth Rate of Import
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 66
Export Growth on Diagram12
Figure 14 Growth Rate of Export
Comment: In FY 2012-2013, in month September the growth rate was 28.95%. Then it was increasing. In the month November growth rate was 116%. But we can see in the month January, the growth rate was -93.71%. If we see the growth chart and diagram, we will be able to understand that growth rate of export is so much volatile. Sometimes it goes up and sometimes is goes down and sometimes it is negatively sloped.
12
This diagram is calculated by using data which is plotted in Appendix I
-150.00
-100.00
-50.00
0.00
50.00
100.00
150.00
200.00
250.00
Au
gust
Sep
tem
be
r
Oct
ob
er
No
vem
be
r
De
cem
ber
Jan
uar
y
Feb
ruar
y
Mar
ch
Ap
ril
May
Jun
e
July
Au
gust
Sep
tem
be
r
Oct
ob
er
No
vem
be
r
De
cem
ber
FY 2012-2013 FY 2013-2014
Growth Rate of Export
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 67
Remittance Growth on diagram13
Figure 15 Growth Rate of Remittance
Comment: In FY 2012-2013, in month August the growth rate was 20.63%. Then it was decreasing. In
the month January growth rate was -89.29%. After that the growth rate was 66.67% in February. After
that it starts decrease again. In FY 2013-2014, 16.98 were in July. Then it started decreasing. If we see
the growth chart and diagram, we will be able to understand that growth rate of remittance is also
volatile. Sometimes it goes up and sometimes is goes down. But it is comparative good than export and
import.
13
This diagram is calculated by using data which is plotted in Appendix J
-100.00
-50.00
0.00
50.00
100.00Ju
ly
Au
gust
Sep
tem
be
r
Oct
ob
er
No
vem
be
r
De
cem
ber
Jan
uar
y
Feb
ruar
y
Mar
ch
Ap
ril
May
Jun
e
July
Au
gust
Sep
tem
be
r
Oct
ob
er
No
vem
be
r
De
cem
ber
FY 2012-2013 FY 2013-2014
Growth Rate of Remittance
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 68
6.3 Time series analysis
Import14
Figure 16 Time Series Plot of Import
Comments: If we want to know what will be the market possession of our bank we have to calculate
time series analysis. In above table we have made time series analysis, which indicates what will be the
future import in January to June FY 2013-2014. At first we have calculated moving average, after that
centered moving average, seasonal and irregular components, then trend value and finally we have
made forecast. Our forecast indicates that in FY 2013-2014 the amount of import as follows: January-
93.14, February-197.25. March-345.23, April-437.21, May-430.64, June-479.98, all the figures are million
in taka.
14
This diagram is calculated by using data which is plotted in Appendix K
0100200300400500600700800
Mo
nth
Au
gust
Oct
ob
er
De
cem
ber
Feb
ruar
y
Ap
ril
Jun
e
Au
gust
Oct
ob
er
De
cem
ber
Feb
ruar
y
Ap
ril
Jun
e
Au
gust
Oct
ob
er
De
cem
ber
Feb
ruar
y
Ap
ril
FY 2011-2012 2012-2013 2013-2014
Time Serise Plot
Import[million in TK]
Centered MovingAverage[CMA]
Forecast
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 69
Export15
Figure 17 Time Series Plot of Export
Comments: If we want to know what will be the market possession of our bank we have to calculate
time series analysis. In above table we have made time series analysis, which indicates what will be the
future export in January to June FY 2013-2014. At first we have calculated moving average, after that
centered moving average, seasonal and irregular components, then trend value and finally we have
made forecast. Our forecast indicates that in FY 2013-2014 the amount of import as follows: January-
30.75, February-121.17. March-169.18, April-235.40, May-239.07, June-256.71, all the figures are million
in taka.
15
This diagram is calculated by using data which is plotted in Appendix L
050
100150200250300350400
Au
gust
Oct
ob
er
De
cem
ber
Feb
ruar
y
Ap
ril
Jun
e
Au
gust
Oct
ob
er
De
cem
ber
Feb
ruar
y
Ap
ril
Jun
e
2012-2013 2013-2014
Time Serise Plot
Export[million in TK]
Centered MovingAverage[CMA]
Forecast
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 70
Remittance16
Figure 18 Time Series Plot of Remittance
Comments: If we want to know what will be the market possession of our bank we have to calculate
time series analysis. In above table we have made time series analysis, which indicates what will be the
future remittance in January to June FY 2013-2014. At first we have calculated moving average, after
that centered moving average, seasonal and irregular components, then trend value and finally we have
made forecast. Our forecast indicates that in FY 2013-2014 the amount of import as follows: January-9,
February-22.37. March-38.23, April-37.29, May-37.48, June-37.54, all the figures are million in taka.
16
This diagram is calculated by using data which is plotted in Appendix M
01020304050607080
May
July
Sep
tem
be
r
No
vem
be
r
Jan
uar
y
Mar
ch
May
July
Sep
tem
be
r
No
vem
be
r
Jan
uar
y
Mar
ch
May
2011-2012 2012-2013 2013-2014
Time Series plot
Remittance[million in TK]
Centered MovingAverage[CMA]
Forecast
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 71
(𝑪𝒂𝒔𝒆)
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 72
Case
Case: 1
Celebrating Pohela Baishakh 1421
Pohela Baishakh is a part and parcel of Bengali culture. It is the first day of Bengali Calendar year. Our
people observe this day with great festivities. The Baishakhi Mela which is celebrated is perhaps the
largest festival of Bengali culture. People from all walks of life join this festival in joyous mood. Urban
people try to keep a while away from their blind act of western culture and tend to be a ban Bengali at
least this day. In villages people pass the day meeting one another, giving and receiving invitations,
enjoying music etc. by local performers and doing many other festive deeds. Business men open new
books of account this very day which is known as Halkhata. Thus Pohela Baishakh comes with great
festivity.
Generally it is a govt. holiday. But our branch was opened that day. All of the employees of our branch
enjoyed this day with Panta Elish that was cooked in our office. Our branch is also near to Jagannath
University, so we also went there.
Case: 2
An incident in cash counter
In an early April the bank was open in its usual time. At that time I was working around the cash section.
There was a huge line in front of the cash withdrawal counter that day. A middle aged gentleman was
waiting to withdraw for a pretty long time, he was annoyed and cursing the bank authority for wasting
his valuable time by making him to stand in the line. He was cursing the inefficiency of the cash officers.
When his time came he threw the cheque in the face of the cash officer and demanded the delivery. It
was shameful for the officer on duty at the cash. He reacted violently. He came down from the cash
counter and charged the man verbally. It was simply a chaos inside the bank. Everybody was shouting.
At last the branch manager came to handle the situation. He took the customer involved to his office
with two other senior bank officers. The situation calm down and that man went without withdrawing
money. I was astonished to see the whole situation. I have never faced such event and I think that
situation could be handled in a better way. The number of officer at the cash counter should be
increased and the bank officer should never behave to a customer in that way, whatever he may did.
Bank is an institute for customer care and the interest of the customer should come first. I think that day
the bank manger also did not handle the situation properly. He could handle it in a more mature way,
but it was a unique experience for me. Seeing this other customers was also telling about their cash
system which is not good. Customers need to wait for long time as there officers are less. Therefore,
they must keep one or two extra officers in the cash department.
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 73
Case: 3
Transfer of branch manager
When I was enrolled for my internship, my branch manager was Mr. Moinul Islam. But just before the
completion of my internship, he was transferred to Eskaton Branch. To me, he was a person of different
personality. He did not dominant at all; maintain good interpersonal relationship with all employees
inside the bank. He introduced a new way of banking with which the stuffs were not familiar at all. For
example, he redesigned the inner decoration for the branch. He changed the entire set up of the branch
and rearranged the furniture placement. He used cabinets for the first time instead of traditional tables
for keeping registry books and other documents. Eventually it turned the branch most spacious than
before which helped customers to build a positive impression about the bank.
Case: 4
Celebrating the Birthday of NBL
The then President of the People's Republic of Bangladesh Justice Ahsanuddin Chowdhury inaugurated
the bank formally on March 28, 1983. So in March 28, 2014 the bank has given steps in 32 years. In this
day we, all of the employees, celebrated the day with very enjoyment. Early in the morning our Manager
cut the cake. Then all the employees took sweets. We were very happy in this day. We also gave sweets
to our customers. They were also happy. Early in the morning we took 30 KG sweets, but it was ended
after late morning. Then we also brought 15 KG sweets for our customers. We took our lunch with
special items.
Case: 5
Wrong Entry in L/C Opening Form
I was appointed in L/C department that means foreign exchange department. Generally my duty was to
fill up L/C form, PAD and writing voucher. But one day I made mistake. I filled up the L/C opening form
wrongly. After some times my supervisor noticed it. He told about the matter. I was Scared. I thought
he will discharge me, but I was wrong. He did not give me any punishment rather he corrected it. He
told that,” you are new to our department, so you can do mistake. Our responsibility is to guide you in a
proper way”
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 74
(𝑺𝑾𝑶𝑻 𝒂𝒏𝒅 𝑷𝑬𝑺𝑻 𝑨𝒏𝒂𝒍𝒚𝒔𝒊𝒔 𝑶𝒇 𝑵𝑩𝑳)
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 75
8 SWOT and PEST Analysis of NBL
8.1 SWOT Analysis of the organization
All organization has some advantages and weakens. NBL also has some SWOTs. These are mentioned
below.
Figure 19 SWOT Analysis
8.1.1 Strengths of the organization
NBL is a very competitive organization. It is operated by a very efficient management group. There is a
good employee-employer relationship in its head office and also its all branches. It has a healthy dislike
of its competitors. NBL has sponsored to the top programs, seminars, writing competition and gained
valuable coverage. In Bangladesh, it has 175 branches to provide services to the people. All these
branches are located in such a place in where customers feel comfortable and safe to make their
transaction. There are 3,442 staffs who work for NBL either in back office or in front office. It has a
better financial position than others in the banking business
8.1.2 Weakness of the organization
The organization does not have a diversified range of products & services. Still the bank is not fully
computerized. Manual registers are used in some cases. However, the income of the business is still
heavily dependent upon its share on the retail market. It caters less the corporate market than the SCB.
This may leave it vulnerable if for any reason its market share erodes. The retail sector is very price
sensitive. But it pays very less interest than other banks. So, if they found higher interest rate offering by
SWOT Analysis
Strength
Weakness
Opportunitie
Threat
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 76
other private banks of Bangladesh then they will lose customers. It has less promotion campaign than
the other bank, because they believe brand value is the top promoting entity for the company.
8.1.3 Opportunities of the organization
NBL has a goodwill that it provides different banking services to the people with a minimum cost and cut
a very little charge on its transactions. Although it already has 175 branches to provide services to its
customers, it also has the opportunity to build up more branches to make more convenient for the
customers. The banking business of NBL and its other social activities have increased day by day.
Products & services development offers NBL many opportunities. There is the opportunity to develop
products and services such as insurance business & huge investment in capital market etc. Such high
value items will tend to have associated with them, high profits. There are also global marketing events
that can be utilized to support the brand such as the sports & other cultural activities.
8.1.4 Threats of the organization
NBL is exposed to the international nature of trade. It has to deals in different currencies and so costs
and margins are not stable over long periods of time. Such an exposure could mean that NBL may be
doing banking business at a loss. The new technology emerges to protecting the currency value & use
options for better credit rate earnings. The market for banking sector is very competitive. Competitors
are developing alternative brands to take away the market share of NBL.
8.2 Converting Threats into Opportunities NBL has to expose its international nature of trade more efficiently. It has to recover costs and maintains
margins over long periods of time. The new technology has to use to protecting the currency value &
use options for better credit rate earnings. NBL has to come to with other sort of criterion that’s why the
competitor has to fight very long to copy that exposure. NBL has to give a better deal in the banking fees
& charges for the customers for the retail banking sector.
8.3 Converting Weakness into Strength NBL has to focus equally to both ranges of customers either retail or corporate. It has to build up a
proper strategy that’s why the corporate customers can be interested to open more of corporate
account in NBL. NBL also has to give higher interest rate for various products & services to gain more
market share in banking business. They have to advertise their brand name more .They can sponsor
their name for various social activities which will bring up NBL value more to the local customers. They
can also make social awareness to the local customers.
8.4 PEST Analysis
We know that there are some external macro-environment in which the firm operates can be
expressed in terms of the following factors:
Political
Economic
Social
Technological
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 77
NBL considers the PEST analysis very important to understand better the local environment
before beginning the marketing process. NBL’s environmental analysis is a continuous process.
The following factors should be counted:
Figure 20 PEST Analysis
NBL’s environment is made up from:
The internal environment - internal customers like, office technology, wages and finance etc.
The micro-environment - external customers like agents and distributors, suppliers,
competitors
The macro-environment - Political and legal forces, Economic forces, Socio-cultural forces and
Technological forces. These are known as PEST factors.
Political Technological
Social Economic
PEST Analysis
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 78
𝑭𝒊𝒏𝒅𝒊𝒏𝒈𝒔 &
𝑹𝒆𝒄𝒐𝒎𝒎𝒆𝒏𝒅𝒂𝒕𝒊𝒐𝒏 𝒐𝒇 𝒕𝒉𝒆 𝑹𝒆𝒑𝒐𝒓𝒕
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 79
9 Findings & Recommendations of the Report
9.1 Findings
Analyzing the performance of Branch regarding Foreign Exchange it is clear that foreign
Exchange Earnings of NBL is severely affected by Import.
The Second element which affects the foreign exchange revenue is remittance and then
export.
The trend of import, export and remittance are so much volatile.
Sometimes the growth rate of import, export and remittance is negatively sloped.
The value of import and export is affected by inflation rate and exchange rate.
The export and import have some seasonal effect.
The remittance is also affected by some seasonality problem.
Now the customer has to provide 100% margin against their L/C, because at this moment there
is no manager in the branch, he has been transferred to other branch.
The Foreign Exchange Department is very much Strong. Because they use in dealing with the
foreign Bank in term of L/C opening and amendment of L/C.
The top executives and officers are very helpful to the clients. Some of our businessmen do not
know the exact procedures of international trade. The officers of National Bank Ltd help them to
properly execute their business.
There are no promotional activities in the bank and also there is no advertisement of National
Bank running in TV screen.
Financing in the international trade is very crucial for the economy as well as it is risky.
Sometimes the government imposes restriction to import and export on some products. As a
result the rate of opening L/C become reduces.
9.2 Recommendations There are some problems on NBL. It is really tough to recommend a bank specially such a bank which is
one of the most well reputed banks of the country only in a short three months internship period.
Nevertheless I am making some recommendation based on my observation.
If the bank wants to earn more profit from foreign exchange departments, it has to concern
more on import. Because the earnings of foreign exchange department is more affected by
import than export and remittance
If it is unable to increase its import, then it may concern on remittance. It also affects the
earnings of foreign exchange.
There is no sequence of revenue in import, export and revenue section. In one year it is high but
in next year it is so much low. So, a sequence is needed.
The volatility of revenue in foreign exchange department should be removed.
In every month there should have a target and that should be fulfilled.
The employees may be rewarded for fulfilling their target.
The bank should concern on negative growth rate.
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 80
The bank uses lots of registers to record foreign exchange transactions which is very time
consuming and also has possibilities of occurring errors. The bank should maintain complete
computerized recording system as soon as possible.
The branch should increase the number of employees in the Foreign Exchange Department to
reduce their stress and also for bringing speed in service delivery.
They should attract more customers so that remittance transaction may increase.
The customer should be given some margin in case of L/C opening.
The bank is operating by a back dated software. The version of the software should be
increased.
Need to revise the Foreign Exchange relate charges.
In case of importing goods the Bank should aware about over invoicing so that nobody can get
chance to send money abroad illegally.
Foreign Exchange Section has to be decentralized to make their decisions with more
responsibility.
9.3 Conclusion Bank is a very important and vital for economic development in mobilizing capital and other resources.
NBL is also contributing to the advancement of the socio-economic condition of the country. To keep
pace with the current market and demand, NBL is following several strategies and taking new initiatives,
offering new products and services to the customers. The bank should maintain well- structured
communication from upper level to lower level. NBL have a strong position in the competitive market. It
is among one of the fastest growing Bank.
As the economy of Bangladesh is increasing so is the foreign trade and NBL has played its role in making
sure that things go smoothly. The bank is doing its best to provide better Import, Export and Remittance
services to the customers.
Export, Import and Remittance are all showing positive trends even after the global challenges that we
are facing today. But the foreign trade handled by bank decreased in recent year. NBL should care about
it.
9.4 Bibliography Analysis, P. 6. (2002, September 30). Planning Analysis:Calculating Growth Rates. Retrieved from
Planning Analysis: http://pages.uoregon.edu/rgp/PPPM613/class8a.htm
Bank, B. (2013). Monthly Economic Trends. Monthly Economic Trends 2013,14, 10-11, 81,93.
Bank, B. (2014, January 11). Exchange Rate. Retrieved January 11, 2014, from Bangladesh-Bank:
http://www.bangladesh-bank.org/econdata/exchangerate.php
Bank, N. (2009,2010,2011,2012). Annual Report. Dhaka: National Bank.
Gishen, S. (2209, April 03). What is foreign exchange? Retrieved April 19, 2013, from Investopedia:
http://www.investopedia.com/ask/answers/08/what-is-foreign-exchange.asp
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 81
Investopedia. (2008). Definition of 'Foreign Exchange'. Retrieved April 25, 2013, from Investopedia:
http://www.investopedia.com/terms/f/foreign-exchange.asp
laerd. (2013, April 25). Linear Regression Analysis using SPSS. Retrieved May 1, 2013, from laerd:
https://statistics.laerd.com/spss-tutorials/linear-regression-using-spss-statistics.php
Mishkin, F. S. (2006). The Economies of Money Banking, And Financial Markets. New York: PEARSON.
Rahman, M. A. (2014, March 1,5,17). What is back to back L/C, Procedure of L/C opening, Foreign
exchange, PAD. (U. Golder, Interviewer)
Statiestics, B. B. (2014, February 05). Bangladesh Bureau of Statistics (BBS) . Retrieved February 05,
2014, from Bangladesh Bureau of Statistics (BBS) :
http://www.bbs.gov.bd/PageWebMenuContent.aspx?MenuKey=239
Students, S. H. (2008, Unknown Unknown). Statistics Help For Students. Retrieved May 1, 2008, from
Statistics Help For Students: http://statistics-help-for-
students.com/How_do_I_interpret_data_in_SPSS_for_Pearsons_r_and_scatterplots.htm#.U28L
soGSzGA
Teresa, F. D. (n.d.). How to Calculate Growth Rate. Retrieved from WikiHow:
http://www.wikihow.com/Calculate-Growth-Rate
9.5 Reference Academy, J. (2013, April 18). Excel - Time Series Forecasting - Part 1 of 3, Part 2 of 3,- Part 3 of 3. Excel -
Time Series Forecasting. Youtube. http://www.youtube.com/watch?v=gHdYEZA50KE
Akter, S. (2005). Mercantile Bank Ltd: An Overview of Foreign Exchange Operations. Dhaka.
Gupta, S. G. (2008). BUSINESS STATISTICS. New Delhi: Sultan Chand and Sons.
Islam, M. M. (2013). “Sustainable Financial Inclusion and Poverty Alleviation. Dhaka.
Peter D. Rose, S. C. (2013). Bank Management and Financial Services. New York: McGraw-Hill.
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 82
9.6 Appendix
A:
B:
FY Month Import Inflation Rate Exchange Rate
2011-2012 July 186.03 11.85 74.71
August 217.92 12.04 73.62
September 266.31 12.66 75.23
October 351.28 10.99 76.20
November 351.25 9.87 76.86
December 381.42 7.62 81.85
January 49.82 8.58 84.44
February 89.94 6.94 81.76
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 83
March 133.33 6.70 81.80
April 183.43 6.33 81.89
May 213.84 6.01 81.93
June 313.06 5.54 82.82
2012-2013 July 379.09 5.21 81.70
August 447.77 4.97 81.71
September 368.69 4.96 81.75
October 499.44 5.86 81.21
November 549.24 6.55 81.49
December 650.61 7.14 79.83
January 64.95 6.62 79.21
February 119.06 7.84 78.85
March 180.67 7.71 78.21
April 232.26 8.34 77.94
May 296.27 7.98 77.76
June 345.30 8.05 77.77
2013-2014 July 398.08 7.84 77.75
August 426.07 7.39 77.75
September 470.39 7.13 77.75
October 525.59 7.03 77.75
November 587.01 7.15 77.75
December 671.76 7.35 77.75
C:
FY Month Export Inflation Rate Exchange Rate
2012-2013 July 0 5.21 81.70
August 30.23 4.97 81.71
September 39.24 4.96 81.75
October 39.79 5.86 81.21
November 86.38 6.55 81.49
December 114.16 7.14 79.83
January 7.9 6.62 79.21
February 22.86 7.84 78.85
March 35.19 7.71 78.21
April 72.48 8.34 77.94
May 100.31 7.98 77.76
June 134.54 8.05 77.77
2013-2014 July 167.94 7.84 77.75
August 188.93 7.39 77.75
September 208.37 7.13 77.75
October 130.92 7.03 77.75
November 250.36 7.15 77.75
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 84
December 262.02 7.35 77.75
D:
Month Import Earnings[ All figures are million in Taka]
FY 2011-2012 FY 2012-2013 FY 2013-2014
Import Earnings Import Earnings Import Earnings
July 186.03 4.36 379.09 8.89 398.08 9.33
August 217.92 5.11 447.77 10.50 426.07 9.99
September 266.31 6.24 368.69 8.66 470.39 11.02
October 351.28 8.23 499.44 11.71 525.59 12.32
November 351.25 8.23 549.24 12.87 587.01 13.76
December 381.42 8.94 650.61 15.25 671.76 15.75
January 49.82 1.17 64.95 1.52 -
February 89.94 2.11 119.06 2.79 -
March 133.33 3.13 180.67 4.23 -
April 183.43 4.30 232.26 5.44 -
May 213.84 5.01 296.27 6.94 -
June 313.06 7.34 345.30 8.09 -
E:
Month Export Earnings[ All figures are million in Taka]
FY 2012-2013 FY 2013-2014
Export Earnings Export Earnings
July - - 167.94 2.11
August 30.23 0.38 188.93 2.37
September 39.24 0.49 208.37 2.62
October 39.79 0.50 130.92 1.64
November 86.38 1.08 250.36 3.14
December 114.16 1.43 262.02 3.29
January 7.9 0.09 - -
February 22.86 0.29 - -
March 35.19 0.44 - -
April 72.48 0.91 - -
May 100.31 1.23 - -
June 134.54 1.69 - -
F:
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 85
Month Remittance Earnings[ All figures are million in Taka]
FY 2012-2013 FY 2013-2014
Remittance Earnings Remittance Earnings
July 40.03 0.63 39.65 0.62
August 47.39 0.76 44.32 0.70
September 53.14 0.84 45.10 0.71
October 60.91 0.96 45.87 0.72
November 65.19 1.03 49.76 0.78
December 71.05 1.12 54.43 0.86
January 7.92 0.12
February 12.62 0.20
March 17.99 0.28
April 22.60 0.36
May 27.99 0.44
June 33.44 0.53
G:
FY Month Total Import Total Export Total Remittance
Total Earnings from Import, Export and Remittance
2012-2013
July 379.09 0 40.03 9.52
August 447.77 30.23 47.39 11.64
September 368.69 39.24 53.14 9.99
October 499.44 39.79 60.91 13.17
November 549.24 86.38 65.19 14.98
December 650.61 114.16 71.05 17.8
January 64.95 7.9 7.92 1.73
February 119.06 22.86 12.62 3.28
March 180.67 35.19 17.99 4.95
April 232.26 72.48 22.60 6.71
May 296.27 100.31 27.99 8.61
June 345.30 134.54 33.44 10.31
2013-2014
July 398.08 167.94 39.65 12.06
August 426.07 188.93 44.32 13.06
September 470.39 208.37 45.10 14.35
October 525.59 130.92 45.87 14.68
November 587.01 250.36 49.76 17.68
December 671.76 262.02 54.43 19.9
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 86
H:
Month Earnings Deviation from Present month to past month
Growth Rate{%}
FY 2011-2012 July 4.36
August 5.11 0.75 17.20
September 6.24 1.13 22.11
October 8.23 1.99 31.89
November 8.23 0 0.00
December 8.94 0.71 8.63
January 1.17 -7.77 -86.91
February 2.11 0.94 80.34
March 3.13 1.02 48.34
April 4.3 1.17 37.38
May 5.01 0.71 16.51
June 7.34 2.33 46.51
FY 2012-2013 July 8.89 1.55 21.12
August 10.5 1.61 18.11
September 8.66 -1.84 -17.52
October 11.71 3.05 35.22
November 12.87 1.16 9.91
December 15.25 2.38 18.49
January 1.52 -13.73 -90.03
February 2.79 1.27 83.55
March 4.23 1.44 51.61
April 5.44 1.21 28.61
May 6.94 1.5 27.57
June 8.09 1.15 16.57
FY 2013-2014 July 9.33 1.24 15.33
August 9.99 0.66 7.07
September 11.02 1.03 10.31
October 12.32 1.3 11.80
November 13.76 1.44 11.69
December 15.75 1.99 14.46
I:
Month Earnings Deviation from Present month to past month
Growth Rate{%}
FY 2012-2013 August 0.38
September 0.49 0.11 28.95
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 87
October 0.5 0.01 2.04
November 1.08 0.58 116.00
December 1.43 0.35 32.41
January 0.09 -1.34 -93.71
February 0.29 0.2 222.22
March 0.44 0.15 51.72
April 0.91 0.47 106.82
May 1.23 0.32 35.16
June 1.69 0.46 37.40
FY 2013-2014 July 2.11 0.42 24.85
August 2.37 0.26 12.32
September 2.62 0.25 10.55
October 1.64 -0.98 -37.40
November 3.14 1.5 91.46
December 3.29 0.15 4.78
J:
Month Earnings Deviation from Present month to past month
Growth Rate{%}
FY 2012-2013 July 0.63
August 0.76 0.13 20.63
September 0.84 0.08 10.53
October 0.96 0.12 14.29
November 1.03 0.07 7.29
December 1.12 0.09 8.74
January 0.12 -1 -89.29
February 0.2 0.08 66.67
March 0.28 0.08 40.00
April 0.36 0.08 28.57
May 0.44 0.08 22.22
June 0.53 0.09 20.45
FY 2013-2014 July 0.62 0.09 16.98
August 0.7 0.08 12.90
September 0.71 0.01 1.43
October 0.72 0.01 1.41
November 0.78 0.06 8.33
December 0.86 0.08 10.26
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 88
K:
t FY Month
Import[million in
TK]
Moving
Average[MA]
Centered
Moving
Average[CMA] St, It St Deseasonalize Tt Forecast
1 2011-2012 July 186.03 1.07 174.37 209.50 223.51
2 August 217.92 1.05 207.06 216.73 228.10
3 September 266.31 0.89 299.31 223.97 199.27
4 October 351.28 292.37 281.02 1.25 1.17 299.65 231.21 271.04
5 November 351.25 269.67 259.00 1.36 1.36 258.27 238.44 324.28
6 December 381.42 248.34 237.26 1.61 1.71 223.28 245.68 419.69
7 January 49.82 226.17 212.19 0.23 0.22 228.18 252.92 55.22
8 February 89.94 198.20 186.75 0.48 0.45 197.82 260.15 118.28
9 March 133.33 175.30 169.60 0.79 0.78 170.35 267.39 209.28
10 April 183.43 163.90 191.34 0.96 0.98 188.09 274.63 267.83
11 May 213.84 218.78 248.60 0.86 0.95 226.21 281.87 266.45
12 June 313.06 278.42 298.03 1.05 1.04 301.85 289.10 299.84
13 2012-2013 July 379.09 317.65 343.98 1.10 1.07 355.32 296.34 316.16
14 August 447.77 370.32 398.27 1.12 1.05 425.46 303.58 319.50
15 September 368.69 426.22 454.34 0.81 0.89 414.38 310.81 276.54
16 October 499.44 482.47 456.30 1.09 1.17 426.04 318.05 372.85
17 November 549.24 430.12 402.72 1.36 1.36 403.86 325.29 442.39
18 December 650.61 375.33 359.66 1.81 1.71 380.85 332.53 568.05
19 January 64.95 344.00 321.73 0.20 0.22 297.48 339.76 74.18
20 February 119.06 299.47 278.38 0.43 0.45 261.87 347.00 157.76
21 March 180.67 257.30 231.86 0.78 0.78 230.83 354.24 277.25
22 April 232.26 206.42 234.18 0.99 0.98 238.16 361.47 352.52
23 May 296.27 261.94 287.52 1.03 0.95 313.42 368.71 348.54
24 June 345.3 313.11 337.25 1.02 1.04 332.93 375.95 389.91
25 2013-2014 July 398.08 361.40 385.84 1.03 1.07 373.12 383.19 408.82
26 August 426.07 410.28 434.51 0.98 1.05 404.84 390.42 410.90
27 September 470.39 458.74 485.95 0.97 0.89 528.69 397.66 353.81
28 October 525.59 513.15 1.17 448.34 404.90 474.66
29 November 587.01 1.36 431.63 412.13 560.50
30 December 671.76 1.71 393.24 419.37 716.41
31 January 0.22 426.61 93.14
32 February 0.45 433.85 197.25
33 March 0.78 441.08 345.23
34 April 0.98 448.32 437.21
35 May 0.95 455.56 430.64
36 June 1.04 462.79 479.98
SUMMARY OUTPUT
Regression Statistics
Multiple R 0.66098493
R Square 0.43690108
Adjusted R Square0.4167904
Standard Error73.6100913
Observations 30
ANOVA
df SS MS F Significance F
Regression 1 117714.8263 117714.8263 21.72483334 7.00485E-05
Residual 28 151716.4751 5418.445538
Total 29 269431.3013
Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0%
Intercept 202.257914 27.56497769 7.337496012 5.45693E-08 145.7936167 258.722211 145.7936 258.722211
t 7.23711932 1.552699832 4.660990597 7.00485E-05 4.056557892 10.41768074 4.056558 10.41768074
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 89
L:
akaYt Base line akaYt/CMA Yt/St
t FY Month
Export[million in
TK]
Moving
Average[MA]
Centered
Moving
Average[CMA] St, It St Deseasonalize Tt Forecast
1 2012-2013 August 30.23 1.08 27.92 15.65 16.94
2 September 39.24 1.13 34.72 26.50 29.96
3 October 39.79 48.91 59.40 0.67 0.66 60.64 37.36 24.51
4 November 86.38 69.89 65.98 1.31 1.31 65.98 48.22 63.13
5 December 114.16 62.06 59.94 1.90 1.90 59.94 59.07 112.51
6 January 7.9 57.83 51.43 0.15 0.15 51.43 69.93 10.74
7 February 22.86 45.03 39.82 0.57 0.57 39.82 80.79 46.38
8 March 35.19 34.61 46.16 0.76 0.76 46.16 91.64 69.86
9 April 72.48 57.71 71.67 1.01 1.01 71.67 102.50 103.66
10 May 100.31 85.63 102.22 0.98 0.98 102.22 113.35 111.23
11 June 134.54 118.82 133.37 1.01 1.01 133.37 124.21 125.30
12 2013-2014 July 167.94 147.93 161.44 1.04 1.04 161.44 135.07 140.51
13 August 188.93 174.95 174.49 1.08 1.08 174.49 145.92 158.00
14 September 208.37 174.04 184.34 1.13 1.13 184.34 156.78 177.21
15 October 130.92 194.65 203.78 0.64 0.66 199.53 167.64 109.99
16 November 250.36 212.92 1.31 191.22 178.49 233.70
17 December 262.02 1.90 137.58 189.35 360.62
18 January 0.15 200.20 30.75
19 February 0.57 211.06 121.17
20 March 0.76 221.92 169.18
21 April 1.01 232.77 235.40
22 May 0.98 243.63 239.07
23 June 1.01 254.49 256.71
Monthly Data for Export
SUMMARY OUTPUT
Regression Statistics
Multiple R 0.891223793
R Square 0.79427985
Adjusted R Square0.780565173
Standard Error 28.81482924
Observations 17
ANOVA
df SS MS F Significance F
Regression 1 48086.15728 48086.15728 57.91458811 1.58432E-06
Residual 15 12454.41577 830.2943843
Total 16 60540.57305
Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0%
Intercept 4.79126565 14.61775297 0.327770326 0.747615549 -26.36573727 35.94827 -26.36573727 35.94827
t 10.85625297 1.426546619 7.610163475 1.58432E-06 7.815640831 13.89687 7.815640831 13.89687
“Foreign Exchange Performance: An Evaluation of National Bank Ltd. Islampur Branch”
D e p a r t m e n t o f F i n a n c e . J a g a n n a t h U n i v e r s i t y , D h a k a
Page 90
M:
akaYt Base line akaYt/CMA Yt/St
t FY Month
Remittance[million
in TK]
Moving
Average[MA]
Centered
Moving
Average[CMA] St, It St Deseasonalize Tt
1 2011-2012 May 22.12 0.99 22.30 38.17
2 June 28.99 0.99 29.16 38.16
3 2012-2013 July 40.03 34.63 38.51 1.04 1.03 38.68 38.14
4 August 47.39 42.39 46.38 1.02 1.04 45.73 38.12
5 September 53.14 50.37 53.51 0.99 1.00 53.27 38.11
6 October 60.91 56.66 59.62 1.02 0.99 61.31 38.09
7 November 65.19 62.57 56.92 1.15 1.15 56.92 38.07
8 December 71.05 51.27 45.23 1.57 1.57 45.23 38.06
9 January 7.92 39.20 33.30 0.24 0.24 33.30 38.04
10 February 12.62 27.40 21.34 0.59 0.59 21.34 38.03
11 March 17.99 15.28 17.79 1.01 1.01 17.79 38.01
12 April 22.6 20.30 22.90 0.99 0.99 22.90 37.99
13 May 27.99 25.51 28.21 0.99 0.99 28.21 37.98
14 June 33.44 30.92 33.64 0.99 0.99 33.64 37.96
15 2013-2014 July 39.65 36.35 38.49 1.03 1.03 38.32 37.94
16 August 44.32 40.63 42.18 1.05 1.04 42.77 37.93
17 September 45.1 43.74 45.00 1.00 1.00 45.21 37.91
18 October 45.87 46.26 47.53 0.97 0.99 46.17 37.89
19 November 49.76 48.79 1.15 43.45 37.88
20 December 54.43 1.57 34.65 37.86
21 January 0.24 37.84
22 February 0.59 37.83
23 March 1.01 37.81
24 April 0.99 37.79
25 May 0.99 37.78
26 June 0.99 37.76
Monthly Data for Remittance
SUMMARY OUTPUT
Regression Statistics
Multiple R 0.008080656
R Square 6.5297E-05
Adjusted R Square -0.055486631
Standard Error 12.48326109
Observations 20
ANOVA
df SS MS F Significance F
Regression 1 0.183168262 0.183168262 0.001175423 0.973028
Residual 18 2804.972532 155.8318074
Total 19 2805.155701
Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0%Upper 95.0%
Intercept 38.19105684 5.798867449 6.585950994 3.47192E-06 26.00809 50.37402528 26.00809 50.3740253
t -0.016596415 0.484080102 -0.03428444 0.973027665 -1.03361 1.00041814 -1.03361 1.00041814