Chapter- ONE

Introduction of the Report

1.1 1.2 1.3 1.4 1.5 1.6 1.7

Introduction of the report Background of the study Rational of the Report Objectives of the Report Scope of the Report ethodology of the Report !i"itations of the Report

Introduction to the Study:

odern banks play an i"portant role in the econo"ic develop"ent of a country$ Co""ercial banks are the pri"ary contributors to the econo"y of a country$ Co""ercial banks are profit "aking institutions that holds the deposits of individuals and business$ %s banks are profit earning concerns& they collect deposit at the lo'est possible cost and provide loans and advances at higher cost$ (he differences bet'een t'o are the profit for the bank$ (he banks also role plays the hu"an resources develop"ent$ Banking is service oriented organi)ation$ Efficacy of custo"er service is related 'ith progressive operation$ %ccording to the operational activities this report 'ills describe the scenarios based on the three "onths internship progra" in the *ttara Bank !td$ Ne' "arket branch$

(he pri"ary purpose of this report is to get an idea about the foreign e+change operations of *ttara Bank !i"ited& a second-generation bank of the country and "ake an industry analysis on the banking sector of Bangladesh$

Banks are profit , earning concern$ (he -'ord .Bank/ refers to the financial institution deals 'ith "oney transaction$ Banks collect deposits at the lo'est possible cost and provide loans and advances at higher cost$ (he difference bet'een t'o is the profit for the bank$ Co""ercial banks are the pri"ary contributors to the country$

(he revenue earning sources of banks are "ainly loans and advances$ But yet there is other source of revenue is foreign e+change$ It deals 'ith in'ard re"ittance and out'ard re"ittance$ 1oreign re"ittance section of *ttara Bank !td& Ne' arket Branch is an integral part of 1oreign E+change 2epart"ent$ %nd this section of 1oreign E+change 2epart"ent deals 'ith in'ard foreign re"ittance& out'ard foreign re"ittance& opening foreign currency accounts and 'ith so"e other re"ittance activities$ (his bank has private re"ittance and foreign e+change accounts as a source of foreign e+change$

!etter of Credit !3C also kno'n as 2ocu"entary Credit is a 'idely used ter" to "ake pay"ent secure in do"estic and international trade under the operations of this bank 'hich helps to secure international relationships 'ith the other countries and also ensure a certain a"ount of foreign e+change$

If a bank can increase its i"port and e+port transactions& its profit 'ill obviously reach a higher level& as the costs are negligible$

(his report is an atte"pt to reflect the position of *ttara Bank !i"ited in the banking industry procedures& policies and activities 'ith e"phasis on foreign e+change business$

#$#$

Background of the study

%fter co"pletion of BB% progra" de"ands a report on practical e+perience$ (he internship progra" is a "ust criterion for Bachelor of Business %d"inistration 5BB%6 students& designed to put the" in a challenging environ"ent of the relevant field& 'here the students get sa"ple opportunity to apply their theoretical kno'ledge into practical applications$ 2uring the internship training& students have the opportunity to adapt the"selves into the particular environ"ent of the organi)ation$ It provides a uni7ue opportunity to see the reality of business during student life& 'hich enables the" to build confidence and 'orking kno'ledge in advance of the start of their career$ (o fulfill this re7uire"ent every university of business arrange a progra" of internship$ 8ere 'e get a chance to apply our theoretical kno'ledge that 'e ac7uired fro" class lectures& books& journals& case studies& se"inar& project& 'orkshop& etc$ and co"pare the" 'ith practical setting$ (he Bank provides a broad range of financial services to its custo"ers and corporate clients$ (he Board of 2irectors consists of e"inent perBracties fro" the real" of co""erce and industries of the country$

1.2. Objective of the Study

1.4.1. Main Objective : (he "ain objective of the study is to analy)e the 1oreign e+change activities of *ttara Bank !i"ited through practical e+posures about .:erfor"ance ; %ctivities of 1oreign E+change of *ttara Bank !i"ited 5considering *ttara Bank !i"ited& Ne' Branch6$ 1.4.2. Specific Objective :
(he objective of the study is to gather practice of all kno'ledge regarding business sector and operations$ (heory classes of B$B$% provide us theories regarding business sector and practical orientation gives us the chance of vie' those syste"s and their operations$ identify those objectives< ore precisely 'e can arket

= = = =

(o gather the practical e+perience base on the theoretical kno'ledge$ (o observe the function of foreign e+change activities and syste"$ (o evaluate the financial perfor"ance of *ttara Bank !i"ited$ (o "ake so"e Reco""endation to overco"e the proble"s$

= = = =

(o analy)e the real 1oreign E+change perfor"ance of Bangladesh$ (o kno' the 1oreign E+change I"port and E+port guideline& police& rules and regulation of Bangladesh$ *pdating and liberali)ing the trade regi"e in accordance 'ith the needs and re7uire"ents of the >orld (rade Organi)ation and globali)ation? I"proving the 7uality of products? encouraging the use of "odern& appropriate and environ"entally-friendly technology& producing high-end products& and i"proving the design of the products?

Enhancing efficiency and dyna"is" by using e-Co""erce and e-@overnance?

1.3 !e earch Methodo"o#y

(he study is based upon the secondary sources of data$ Both 7ualitative and 7uantitative "ethods 'ere applied for preparing this report$ (he data 'ere analy)ed and presented by icrosoft e+cel and sho's percentage& graphical presentation& regression analysis& trend analysis& S>O( analysis and different types of graphs ; charts$ Best effort 'as given to analy)e the nu"erical findings$ 1.3.3: Source of data: (he "ain source of the infor"ation is the annual report of *ttara Bank !i"ited& report of annual "eeting& brochures and 'eb sites$ (he infor"ation incorporated in this report is heavily collected both fro" the pri"ary sources and as 'ell as fro" the secondary sources$ 1.3.3.1: $ri%ary ource of data: (he data collection has been acco"plished directly fro" the different sectors of *ttara Bank head office and also fro" the branch office-Shya"oli Branch$ (his is called pri"ary source of data$ 1.3.3.2: Secondary ource of data: (he secondary data is collected fro" annual reports& distinguished conceptual "atters& 'ebsites and several published "atter as articles in different versions of printings$ Secondary Sources are<

%nnual Reports of different years of *ttara Bank !i"ited$ Bangladesh Bank 'eb site Other published docu"ents of *ttara Bank !i"ited$ *ttara Bank 'eb site Respective sectors of foreign "atter of the head office$ Report on respective topics %rticles about different "atters of *B

1.4. Scope of the !eport

ainly the scope of this report is confined to the analysis of 1oreign E+change %ctivities of *ttara Bank !td$ Besides this the report covers the background& organi)ational structure& functions and perfor"ance of the bank also$ (his report is fully based on the practical kno'ledge and e+perience by 'orking and observing the activities done by the officials$ (his study 'ould focus on the follo'ing areas of *ttara Bank !i"ited$

%ctual 1oreign (rade "anage"ent of *ttara Bank !i"ited$ Overvie' the current procedure of e+port ; i"port "anage"ent$ Opening !C and "aintenance of other for"alities of foreign trade$ Organi)ational structures and responsibilities of "anage"ent$ Each of the above areas 'ould be critically analy)ed to deter"ine the proper efficiency of *ttara BankCs 1oreign (rade anage"ent syste"$

1.5. &i%itation of the Study

(here 'ere so"e proble"s 'hile I conducting the orientation progra"& a 'hole hearted effort 'as applied to conduct the orientation progra" and to bring a reliable and fruitful result& in spite of having the 'hole hearted effort& there e+it so"e li"itation 'hich acted as a barrier to conduct the progra"$ (he li"itations 'ereD

(hree "onths ti"e is not enough for such an e+tensive study$ It is very difficult to collect all the re7uired infor"ation in such a short period$ 2ue to so"e legal obligation and business secrecy banks reluctant to provided data$ 1or this reason& the study li"its only on the available :ublished data and certain degree for"al and infor"al and infor"al intervie'$ (he Bankers are very busy 'ith their jobs& 'hich lead "e little ti"e to consult 'ith$ !ack of e+perience$ !earning all the banking function about credit 'ithin just t'o and half "onths 'as really tough$

%nother li"itation of this report is banks policy of not disclosing so"e data and infor"ation for obvious reason& 'hich could be very "uch useful$

Chapter-0
!iterature Revie'

&iterature !evie'

(da% ). ( hcraft
1ederal Reserve Bank of Ne' Gork October #& 0H#0 >e provide an overvie' of the rapidly evolving literature on shado' credit inter"ediation$ (he shado' banking syste" consists of a 'eb of speciali)ed financial institutions that conduct credit& "aturity& and li7uidity transfor"ation 'ithout direct& e+plicit access to public backstops$ (he lack of such access to sources of govern"ent li7uidity and credit backstops "akes shado' banks inherently fragile$ uch of shado' banking activities is intert'ined 'ith the operations of core regulated institutions such as bank holding co"panies and insurance co"panies& thus creating a source of syste"ic risk for the financial syste" at large$ >e revie' funda"ental reasons for the e+istence of shado' banking& e+plain the functioning of shado' banking institutions and activities& discuss 'hy shado' banks need to be regulated& and revie' the i"pact of recent refor" efforts on shado' banking credit inter"ediation$

*%%anue" Ma+'e"" )ruce

*niversity of East !ondon - Royal 2ocks Business School Nove"ber E& 0H#H (his revie' is on Basel II& focusing on debates and progressive discussion about its i"portance and significance to the Banking industry and the overall "acroecono"ic needs of the countries incorporating it into their banking syste"$ It utilises various %cade"ic articles and journals in a balanced discussion of critical issues about its effective i"ple"entation and develop"ent a"ong developed countries like Europe 5EEC6 through the CR2 directives? India 5e"erging econo"ies6 and developing econo"ies$

In achieving this& consideration is given to so"e of the i"portance and critical proble"s and key funda"ental issues 'ithin the various pillars such as the :illar I 5Credit risk< !@2? Operations risks? arket risks6$

:illar II< supervisory Revie' and :illar III<

arket discipline and disclosure "atters and

ho' it has i"pacted the current financial crisis around the 'orld? especially a"ong @-#H countries& and the urgency of regulatory refor"s to "ake it better in the near future$ Conclusive analysis on this revie' looks into so"e of the loopholes and areas that need further research and general proble"atic areas that could be refor"ed in the future Basel III refor"s$

,o-o (. .. Santo
1ederal Reserve Bank of Ne' Gork %pril 0HHH

(his paper revie's the theoretical literature on bank capital regulation and analyses so"e of the approaches to redesigning the #IFF Basel %ccord on capital standards$ (he paper starts 'ith a revie' of the literature on the design of the financial syste" and the e+istence of banks$ It proceeds 'ith a presentation of the "arket failures that justify banking regulation and an analysis of the "echanis"s that have been suggested to deal 'ith these failures$ (he paper then revie's the theoretical literature on bank capital regulation$ (his is follo'ed by a brief history of capital regulation since the #IFF Basel Capital %ccord and a presentation of both the alternative approaches that have been put for'ard on setting capital standards and the Basel Co""itteeJs proposal for a ne' capital ade7uacy fra"e'ork$

#H

Chapter-4
Overvie' of the Bank
3.1 3.2 3.3 3.4 3.5 3.6 3.7
)ac/#round of the or#ani0ation Corporate Infor"ation Kision ; ission of the organi)ation :urposes of *ttara Bank !i"ited as a Co""ercial Bank Operation Nu"ber of Branches Capital Structure of *B!

##

3.1 )ac/#round of the Or#ani0ation

.% Co""itted :artner in :rogress/ by this slogan *ttara Bank !i"ited is one of the state o'ned co""ercial banks in Bangladesh& has an authori)ed capital of (k$ 0HHHH "illion 5appro+ *SL 0F4$44 "illion6& paid up capital of (k$ F#0A "illion& reserve of (k$#9&#0A "illion and retained surplus (k$ 0BB0H#$AE4 "illion$ (he Bank has total assets of (k$99H4FI$4B "illion as on 4#st 2ece"ber 0H##$I""ediately after the liberation of Bangladesh in#IE#& the erst'hile *nited Bank !i"ited and *nion Bank !i"ited 'ere rena"ed as *ttara Bank$ On #Ath Nove"ber& 0HHE the bank has been corporati)ed and rena"ed as *ttara Bank !i"ited$ *ttara Bank !i"ited has also a subsidiary co"pany na"ed *ttara E+change Co"pany SR! in Italy$ *ttara Bank !i"ited is going to launch Isla"ic Banking operation its five branches and also diversified its product they are going to launch Services 1ttara )an/ &i%ited ha a"ready e tab"i hed a 'or"d'ide net'or/ and re"ation hip 'ith nationa" and internationa" branche inc"udin# 4 over ea corre pondent . 3he )oard of 4irector i co%po ed of 15 56ifteen7 %e%ber headed by a .hair%an. 3he 4irector are repre entative fro% both pub"ic and private ector .
#0

erchant Banking *nit to play an i"portant role in the capital "arket$ *ttara

Bank !i"ited& first a"ong the Nationali)ed Co""ercial Banks& has introduced %(

)an/in# and

throu#h 273 1223 forei#n

branche

3ota" nu%ber of e%p"oyee

are 15828 56ifteen thou and t'enty7 up to

4ece%ber 3192811. 3here are three co%%ittee of the board for different purpo e . 3hey are:

*+ecutive .o%%ittee (udit .o%%ittee Mana#e%ent .o%%ittee

3he )an/ ha earned an e+ce""ent bu ine i%port of the country.

reputation in hand"in#

and fundin# internationa" trade9 particu"ar"y in boo tin# e+port :

3.2. .orporate Infor%ation

(he corporate head office is located at 2haka 'ith #H 5ten6 2ivisions co"prising of 4F 5thirty eight6 2epart"ents$ ;a%e !e#i tered (ddre &e#a" Statu 4ate of Incorporation (uthori0ed .apita" $aid up .apita" !e erve !etained urp"u ( et 6ace va"ue of per hare Shareho"din# $attern 4o%e tic ;et'or/ ;u%ber of )ranch ;u%ber of 4ivi iona" Office ;u%ber of (rea Office ;u%ber of !e#iona" Office Over ea ;et'or/ ;u%ber of )ranch &ocation Sub idiarie 1. 1ttara .apita" and Inve t%ent &td. 2. 1ttara *+chan#e .o%pany &td. 1ttara )an/ &i%ited *ttara Bhaban ##H& otijheel Co""ercial %rea 2haka , #HHH$ Bangladesh :ublic !i"ited Co"pany 0# ay& 0HHE (M$ 0H&HHH illion (M$ A&HHH illion (M$#HF04$H# illion (k$ A#BE$#F illion (k$ 49A044$I0 illion (M$ #HH per share #HHN Share o'ned by the @overn"ent of Bangladesh FF4 #H #A 0I H9 *%E , Chief E+ecutiveCs office Obeid Sayah %l , ansuri Building Oayed the #st Street 5Electra Road6 :ost Bo+ No 0B4H %bu 2habi *nited %rab E"irates 2haka Italy #4

;u%ber of .orre pondent 4epart%ent 3ota" Officer 3ota" Staff and Sub<Staff ;u%ber of *%p"oyee )an/in# &icen e 5obtained fro% )an#"ade h )an/7 3e"e+ $hone 6a+ *<%ai" =eb ite S=I63 .ode S=I63 5)ranch7

#0#A 4F ##EEB 4FA4 #AB0I 5as on 4#3H430H#46 4# ay& 0HHE BEAF9H PB2BP& BE#0FF PB8OBP :%BQ- IABHHHH& IABBH0H& IAAB09A-9I& IABAH9#9A& IABHH0E-4H$ FF-H0-IAB9B99& IABHFBI "dR*ttarabank-bd$co" '''$*ttarabank-bd$co" P%NB B2 28 P%NBB228PBC

3.3. )oard of 4irector

(able- :resent Board of 2irectors of the Bank<
Name Designatio n

Contact Number
Office < FFH-0-IABF9#4 1a+ < FFH-0-IABHFBI E-"ail< chair*B!R*ttarabankbd$co"

0 1. 0 2. 0 3.

2r$ %bul Barkat :rofessor& Econo"ics 2epart"ent 2haka *niversity 2r$ Pa"aluddin %h"ed& 1C% :artner& 8uda Kasi Cho'dhury ; Co$ Chartered %ccountants r$ d$ E"dadul 8o7ue %dditional Secretary& 1inance 2ivision inistry of 1inance& @ovt$ of the :eopleJs Republic of Bangladesh

Chair"an

2irector

Office < FFH-0-I#9HHI9 1a+ < FFH-0-F##I0IF Res < FFH-0-FF##H0A

Office < FFH-0-E#B0I4# Res < FFH-0-FBA0E99 E-"ail< e"dadhRfinance$gov$bd

2irector

0 4. 0 5. 0 6. 0 7. 0 8. 0 9. 1 0.

s$ :arveen

ah"ud& 1C%

2irector 2irector

Office < FFH-0-FF09#99

obile < H#E##A09HHE Email:polac.realestate@hotmail.co m

r$ Nagibul Isla" 2ipu

2r$ R

2ebnath

2irector 2irector 2irector 2irector 2irector

obile < H#E#4-094ABF Office < FFH-0-I49AI00 Res < FFH-0-0AABIIE Office < FFH-0-IAA9I0E Office < FFH-0-IF00H#E

Syed Ba)lul Mari"& B$:$ $ :rof$ r$ oha""ed d$ %bu Naser oinuddin

s$ Sangita %h"ed :resident& Bangladesh >o"en Cha"ber of Co""erce ; Industry

#9

1 1. 1 2.

2r$ Nitai Chandra Nag :rofessor& 2haka School of Econo"ics

r$ S$ $ %"inur Rah"an

2irector
CEO ; anaging 2irector

obile < H#F#A-BF#4A0

Office < FFH-0-E#BI0FE 1a+ < FFH-0-IABHFBI

Source< https<33'''$uttarabank$bd$co"

(able< Na"e ; present place of posting of 2irector ; @eneral S L 01 02 03 04 05 06 07 08 09 10 11 12 13 14 S$ Name r$ S$ $ %"inur Rah"an r$ % M %shraf *ddin Mhan O"ar 1aroo7ue d$ osharraf 8ossain Cho'dhury d$ Iftikhar-*)Oa"an d$ %la"gir iah

anaging 2irector& 2eputy

anaging

anager of *ttara Bank !i"ited< Designation

CEO ; anaging 2irector

Te e!"one No.
Off -880-27169287

#mai $%%ress

d$ %"inul Isla" d$ ohsin

d$ %bu Bakar Siddi7ue d$ %'lad 8ossain $ asud *l %la"

d$ @ola" 1aruk d$ !utfor Rah"an d$ %bdus Sala" %)ad

2eputy anaging 2irector 2eputy anaging 2irector 2eputy anaging 2irector 2eputy anaging 2irector @eneral anager 2ivisional Office& 2haka North @eneral anager !ocal Office @eneral anager 2ivisional Office& 2haka South @eneral anager 8u"an Resources 2ivision @eneral anager Recovery End *se @eneral anager Co"illa 2ivision @eneral anager !ocal Office @eneral anager 8ead Office @eneral anager *ttara Bhaban

Off- FFH-0E#0AAHH Off- FFH-0IAA9H09 Off- FFH-0IAAB0#E Off- FFH-0IAA9IFE Off- FFH-0IABE9BA Off- FFH-0IAA4#HB Off- FFH-0IAAFAHI Off- FFH-0IAA444H

d"dashrafR*ttaraba nk-bd$co" ofarooque_dmd@ tt ara!a"#-!d.com "hcSd"dR*ttaraban k-bd$co" d"dSiftiR*ttarabank -bd$co" "a"Sg"R*ttaraban k-bd$co" loR*ttarabankbd$co" jbd-dhkR*ttarabankbd$co"

Off- FFHHF#-EBAFE

Off- FFHH0#A

Corporate Branch 15 d$ %f)alul Bashar @eneral anager Research ; :lanning 2ivision @eneral anager OB2& 1(2 ; (reasury 2ivision @eneral anager Rajshahi 2ivision @eneral anager y"ensingh 2ivision @eneral anager %udit 2ivision @eneral anager Chittagong 2ivision @eneral anager Sylhet 2ivision @eneral anager 2ivisional Office Mhulna @eneral anager Rangpur 2ivision

IAAB0#B Off- FFH-0E##AB#I Rs- FFH-0I#94BBH Off- FFH-0E##A4EI OffFFH-HE0#EEAE0A Off- FFHHI#-BB0BI

rpdR*ttarabankbd$co" abasharR*ttarabankbd$co"
id-obdR*ttarabankbd$co"

16 17 18 19 20 21 22 23

d$

onjerul Isla"

d$ Shafi7ul Isla" ostafa Palal *ddin %h"ed d$ Na)i" *ddin oha""ad 8elal *ddin S$S$ Ma"al

nudding"R*ttarabankbd$co" Off- FFHH4#E#A4I0 Off- FFHHF0#E#0I9H

Pafar %h"ed Sayeeda Sultana

Off- FFHHA0#B00EE

Source< https<33'''$uttarabank$bd$co"
Contractual<

S L. 01 02 03 04 05

Name d$ Pahangir iah

Designation 2irector 52 26 *ttara Capital ; Invest"ent !td$ 2irector 52 26 *ttara Bank (raining Institute Senior Consultant 52 26 @eneral anager I( 2ivision @eneral anager 5B2 2& !a' ; Co"pliance6

Te e!"one No.

#&'ai $%%ress

(apon Mu"ar @hosh d$ @ola" Sar'ar 2r$ 8afi) Babu d$ 8asan

Off -FFH-0-I444I00 Off -FFH-0-IAA049F Res-FFH-0-E0A0BBB Off- FFH-0-E#EA944 Res-FFH-0-IAE#I## Off- FFH-0-IAA9F90

$!ti@ ttara!a"#!d.com dmdch1@ ttara! a"#-!d.com

hasanbabuR*ttarab ank-bd$co"

d$ Sirajul Isla"

sisla"Sg"R*ttar abank-bd$co"

Source< https<33'''$uttarabank$bd$co"
#B

(able< State"ent of approved post& present "anpo'er& vacant post and additional "anpo'er of *ttara Bank !i"ited as on 4#3H430H#4 4e i#nation 3ype (pproved po t =or/in# Manpo'er a on 31>83>2813 ABHF B#BF ##BB 0BFE ?acant $o t a on 31>83>2813 0#A #0AF 09B4 449E *+ce $o t a on 31>83>2813 AFI

1 t ."a AF04 2nd ."a E90B 3rd ."a 4B0I 4th ."a 0HIF 3ota" #FIEB #AB0I Manpo'er: Source< https<33'''$uttarabank$bd$co"

3.3. Mi ion : ?i ion of the or#ani0ation

3.4. 1. Mi ion:
*ttara Bank !i"ited 'ill be an effective co""ercial bank by "aintaining a stable gro'th strategy& delivering high 7uality financial products& providing e+cellent custo"er service through an e+perienced "anage"ent tea" and ensuring good corporate governance in every step of banking net'ork$ (o be leading co""ercial bank in the country ; contribute "a+i"u" to the 'elfare for the people of the country$ :ri"e objective to deliver a 7uality that de"onstrates a true reflection of our vision$ E+cellence in Banking$

3.4. 2. ?i ion:
(o beco"e the effective largest co""ercial bank in Bangladesh to support socioecono"ic develop"ent of the country and to be a leading bank in south %sia$ >e shall be the forefront of national econo"ic develop"ent by< aintaining the "a+i"u" ethical standards and co""unity accountability praise 'orthy of a leading corporate citi)en$ Continuously i"proving productivity and profitability& and thereby enhancing shareholder value$ Creating and "aintaining a set of efficient and hard 'orking e"ployees$
#E

3.4. $urpo e of 1ttara )an/ &i%ited a a .o%%ercia" )an/

:urposes of *ttara Bank !i"ited as a Co""ercial Bank are fe'$ (hese are< aking profit <

(he first and fore"ost purpose of *ttara Bank is to attain profit generally through collecting deposits and lending this "oney to earn interest inco"e or by "aking invest"ent$
:roviding service and relation develop"ent< (his bank increases the volu"e of financial transaction through the develop"ent of relation 'ith the clients$ Collecting "ore deposit and "oney lending< %s a co""ercial bank *ttara Bank ai"s to collect as "uch as possible "oney fro" the clients through different type of deposit$ Increasing flo' of "oney< *ttara Bank in replace of currency uses different "ediu" as che7ue& bank draft and pay order& letter of credit 'hen doing transaction$ (hus it increases the actual flo' of currency$

*ttara Bank !i"ited ho'ever serves the follo'ing social purposes$ (hese are<
Creating savings< *ttara Bank !i"ited offers different kinds of Savings %ccount and thus si"ulates the people to "ake savings. 1or"ation of capital< (he accu"ulation of savings enables *ttara Bank to for" capital$ Ensuring safety< (his bank has another purpose to ensure the safety of its clientCs depository "oney$ Invest"ent and Industriali)ation< *ttara Bank through short-ter"& inter"ediateter" and long-ter" invest"ent si"ulates the invest"ent and industriali)ation in the country$ E"ploy"ent facility< Besides earning profit *ttara Bank offers e"ploy"ent facilities to the co""unity people and thus helps increase inco"e$

#F

3.5

Source< https<33'''$uttarabank$bd$co"

#I

3.6

)ranche of 1)&

Source< https<33'''$uttarabank$bd$co"

0H

)ranche of 1)& in 4ha/a

(@!()(4 )!(;.A E9& %grabad C3%$ Chittagong-9#HH

.ontact $er on anager (el< FFH-4#-E#AF9B obile H#E##-FH00#F& E-"ail< ublagrRctpath$net

agrabadRuttarabank-bd$co"

)(;@()(;4A1 (?*;1* )!(;.A #0 Bangabandhu %venue 2haka-#HHH

.ontact $er on anager (el< FFH-0-IAA9H49 IABI4IB E- ail< ublbbaRdhaka$net

bbavenueRuttarabank-bd$co"

)(;I,B( SA(CA( )!(;.A 90& Ne' arket C3% 5@round 1loor6 2haka-#HHH )(!IS(& )!(;.A %ryya !a+"i Bhaban Sadar Road Barisal-F0HH

.ontact $er on anager (el< FFH-0-IAAI494 &IAB#H9B E- ail< ublbanRdhaka$net

banijyaRuttarabank-bd$co"

.ontact $er on : anager (el< FFH-094#-A0#EA&A44BE obile H#E##-FH00#9 E-"ail< ublbslRbttb$net$bd barisalRuttarabankbd$co"

)O@!( )!(;.A 8abib ansion 5#st floor6 Mabi Na)rul Isla" Road Bogra-AFHH

.ontact $er on anager (el< FFH-A#-BB00F &E494I obile H#E##-FH00AF& E-"ail<ublboguraRdhaka$net

bograRuttarabank-bd$co"

.A(=C)(D(! )!(;.A

.ontact $er on anager

0#

A&Begu" Ba)ar 2haka-##HH

(el< FFH-0-E4#I#E4 &E4#0#BF obile H#E##-FH004I&H#E##-4B#AE0 E-"ail< ublckbdRaitlbd$net

cha'kb)rdhkRuttarabank-bd$co"

.OMI&&( )!(;.A 2ipika Cine"a Building& Mandirpar& Co"illa-4AHH

.ontact $er on anager (el< FFH-F#-EB0E# obile H#E## FH000A E-"ail< uco"illaRdhaka$net
co"illaRuttarabank-bd$co"

.O!$O!(3* )!(;.A *ttara Bank Bhaban IH& otijheel C3% 2haka-#HHH

.ontact $er on anager (el< FFH-0-IABF#FB obile H#E## FH0044 E-"ail< ublcorpRdhaka$net
corporateRuttarabank-bd$co"

4(!<1S<S(&(M )!(;.A A-2& 2ar-us-Sala" Road irpur-#& 2haka-#0#B

.ontact $er on anager (el< FFH-0-FH0#FBA &E0I#FH#5R6& obile H#E##-FH00AH E-"ail< ubldarRdhaka$net
darussala"Ruttarabank-bd$co"

;*= M(!C*3 )!(;.A A9& Ne' arket C3% 2haka-#HHH

.ontact $er on anager (el< FFH-0-IAA#E#F &IAA#FAB E- ail< ubldilkRdhaka$net

Ne' arketRuttarabank-bd$co"

*;@&ISA !O(4 )!(;.A

.ontact $er on

00

I3%& South

alitola !ane 5North

anager (el< FFH-0-IAAB4FF &E##9A0E& obile H#E##-FH009H E-"ail< ubleglRdhaka$net

englishrdRuttarabank-bd$co"

Road6& 2haka-##HH

* $D )!(;.A @anakbari& 2ha"sona& Savar 2haka-#499

.ontact $er on anager (el< FFH-0-I4AHEB# obile H#E##-94FAI0 E-"ail< ublep)Rdhaka$net

ep)Ruttarabank-bd$co"

6O!*I@; *E.A(;@* )!(;.A BI& Ne' arket C3%& 2haka-#HHH

.ontact $er on anager (el< H0-IAA#FF# &IAA04EA obile H#E##-9HA#9A E- ail< ublfr+Rdhaka$net
foreigne+Ruttarabank-bd$co"

@1&SA(; )!(;.A !and"ark Shopping Centre5#st 1l$6 &#0-#9& @ulshan North C3% @ilshan-0 @ulshan 2haka IS&(M$1! )!(;.A IA& Isla"pur Road 2haka##HH odel

.ontact $er on anager (el< FFH-0-FF0IBBE &FF#99EB& obile H#E##-94FAI# E-"ail< ublgshanRdhaka$net
gulshanRuttarabank-bd$co"

.ontact $er on anager (el< FFH-0-099A9B&09E9EI obile H#E##-FH004F E-"ail< ublislRdhaka$net

isla"purRuttarabank-bd$co"

,*SSO!* )!(;.A

.ontact $er on

04

unicipal Road& Near Cho'rasta Pessore-E9HH

anager (el< FFH-90#-E0A#4 obile H#E##-FH00HE E-"ail< ubljessRbttb$net$bd

jessoreRuttarabank-bd$co"

C(&()(@(; )!(;.A #AE& !ake Circus& irpur Road Malabagan& 2haka-#0HA

.ontact $er on anager (el< FFH-0-I##EA0F &F#0B#4B& obile H#E##-9HA#4I FFH-0-I##EA0F 51a+6 E-"ail< ublkbgnRdhaka$net
kalabaganRuttarabank-bd$co"

C(=!(; )(D(! )!(;.A 0A-0B&Ma'ran Ba)ar C3%& 2haka-#0#A

.ontact $er on anager (el< FFH-0-F#00FI# &F##E9II& obile H#E##-FH00BA E-"ail< ublkba)arRdhaka$net
ka'ranb)rRuttarabank-bd$co"

CA(31;@O;, )!(;.A 4FA-4FB& Ekhlas arket& Mhatunganj&Chittagong-9HHH

.ontact $er on anager (el< FFH-4#-B4F99E &B##4HB obile H#E##-FH000H E-"ail< ublktjRspnetctg$net
khatungonjRuttarabank-bd$co"

&(&4I@AI )!(;.A #0H& !aldighi 5>est6 Chittagong-9HHH

.ontact $er on anager (el< FFH-4#-B4E0EB &B4HE0I& obile H#E##-FH000# E-"ail< ubllalctgRdhaka$net
laldighiRuttarabank-bd$co"

Source< https<33'''$uttarabank$bd$co"

3.2 .apita" : !e erve

09

Source< https<33'''$uttarabank$bd$co"

0A

Source< https<33'''$uttarabank$bd$co"

0B

Source< https<33'''$uttarabank$bd$co"

0E

Chapter-9 Chapter-9$#

4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.2 4.F 4.18

)ac/ #round of 6orei#n *+chan#e 1oreign E+change 8istory in Bangladesh eaning of 1oreign E+change Necessity of 1oreign E+change %ctivities of 1oreign E+change 2ivision Regulation for 1oreign E+change 2ivision International Regulation 8o' 1oreign E+change is being Controlled 1oreign E+change :erfor"ance of *B! Risk anage"ent of 1oreign E+change %ctivities

0F

1oreign E+change 2ivision

4.1.1 )ac/ #round of 6orei#n *+chan#e

0I

(he foreign e+change "arket allo's currencies to be e+changed to facilities international trade and facilitate international trade and financial transaction$ Evolution of the "arket in Bangladesh is closely linked to the e+change rate regi"e of the country$ It had virtually no foreign e+change "arket up to #I44$ B%N@!%2ES8 B%NM& as agent of govern"ent& 'as the sole purveyor of foreign currency a"ong the users$ It tried to e7uilibrate the de"and for and supply of foreign e+change at an officially deter"ined e+change rate& 'hich& ho'ever ceased to e+ist 'ith introduction of current account convertibility$ I""ediately after liberation& the Bangladesh currency taka 'as pegged 'ith pound sterling but 'as brought at par 'ith the Indian rupee$ >ithin a short ti"e& the value of e+perienced a rapid decline against foreign currencies and in %G #IEA& it 'as substantially devalued$ In #IEB& Bangladesh adopted a regi"e of "anaged float& 'hich continued up to %ugust #IEI& 'hen a currency-'eighted basket "ethod of e+change rate 'as introduced$ (he e+change rate "anage"ent policy 'as again replaced in #IF4 by the trade -'eighted basket "ethod and *S the dollar 'as chosen as intervention currency$ By this ti"e a secondary e+change "arket 5SE 6 'as allo'ed to gro' parallel to the official e+change rate$ (his gave risk to a curb "arket$ %t present the syste" of e+change rate "anage"ent in Bangladesh is to "onitor the "onitor the "ove"ent of the e+change rate of taka against a basket of currencies through a "echanis" of real essential e+change rate 5R1ER6 intended to be kept close to the e7uilibriu" rate$ (he players in the foreign e+change "arket of Bangladesh are the Bangladesh Bank& authori)ed dealers& and custo"ers$ Bangladesh Bank is e"po'ered by the 1oreign E+change Regulation %ct of #I9E to regulate the foreign e+change regi"e I(& ho'ever does not operate directly and instead& regularly 'atches activities in the "arket and intervenes& if necessary& through co""ercial Banks$ 1ro" ti"e to ti"e it issues guidelines for "arket participants in the light of the countryCs "onetary policy stance& foreign e+change reserve position& balance of pay"ents and overall "acro-econo"ic situation$ @uidelines are issued through a regularly updated E+change Control published by the Bangladesh Bank$ anual

(he authori)ed dealers are the only residency entities in the foreign e+change "arket to transaction hold foreign e+change both at ho"e and abroad$ Bangladesh Bank issues licenses of authori)ed dealership in foreign currencies only to schedule Banks$ (he
4H

a"ount of foreign e+change holdings by the authori)ed dealers are subject to open position li"its prescribed by Bangladesh Bank& 'hich itself purchases and sellers dollars fro" and to the dealers on spot basis$ (he si)e of each such transaction 'ith Bangladesh Bank is re7uired to be in "ultiple of L#HHHH subject to a "ini"u" of LAHHHH$ In addition to authori)ed dealers& there are registered "oney changers to buy foreign currencies fro" tourists and sell the" to outgoing Bangladesh travelers as per entitle"ent$ (heir e+cess holdings beyond the per"itted balance are re7uired to be retained 'ith authori)ed dealers$ So"e services institutions like hotels and shop have also obtained li"ited "oney changing licenses to accept foreign currencies the foreign tourists& but those are to be sold to authori)ed dealers$ (ransactions by custo"ers take place "ainly to satisfy custo"er de"and for individual needs and to facilitate e+port& i"port& and re"ittances$ (he foreign e+change "arket of the country is confined to the city of 2haka$ (he 49 scheduled Banks operating as authori)ed dealers in the inter-Bank foreign e+change "arket are not per"itted to run a position beyond certain li"its$ In the event of speculation on an appreciation of the value& an authori)ed dealer "ay buy "ore foreign currencies than it needs& but at the end of the day it "ust "aintain its li"it by selling e+cesses currencies either in the inter-Bank "arket or custo"ers$ %uthori)ed dealers "aintain a clearing account 'ith Bangladesh Bank in dollars& pound sterlIing& "ark and yen to settle their "utual clai"s$ If there any e+cess foreign e+change holdings e+ist after these transactions& it is obligatory for the" to sell it to the Bangladesh Bank$ In case of shortfall of the li"it& authori)ed dealers have to cover it either through purchase fro" the "arket or fro" the Bangladesh Bank$ (he average "onthly transactions of foreign e+change in the inter-bank "arket accounted for L04$9B "illion in #II#-I0 and crossed the L# billion "ark in #IIF-II$(he average "onthly turnover for the si+ "onths bet'een Puly and 2ece"ber 0HHH 'as L#$A billion$ (he pheno"enal gro'th of inter-bank transactions 'as due "ainly to rela+ation of e+change control regulations and e+pansion of activities of Bangladesh 1oreign E+change 2ealers %ssociation 5B%1E2%6 for"ed on #0 %ugust #II4$ (he-inter Bank foreign e+change "arket of Bangladesh is still at its rudi"entary stage$ (he "arket is an oligopolistic one and is do"inated by a fe' relatively large Banks& 'hich have re"ained only as dealers instead of developing the"selves into buyers or sellers$ (he "ost 'idely used practice is spot transaction? this covers IAN of total
4#

transactions$ Only for'ard transactions offer protection against foreign e+change risk$ 2eals in the foreign e+change "arket are usually confir"ed over telephone& follo'ed by a 'ritten advice$ Confir"ed deals "ay be cancelled on pay"ent of necessary costs$ (his "arket e"erged in the restricted regi"e of foreign e+change transaction but continues to be active$ (his "arket operates in the alleys or lanes and-lanes of 2haka city around the foreign e+change branches of authori)ed Banks$ 2ealers on hand also for" part of this "arket$ % si)eable a"ount of foreign currencies is channeled through this "arket every year$

4.1.2 6orei#n *+chan#e Ai tory in )an#"ade h

*p to #IIH& "ultiple e+change rates 'ere allo'ed under different na"es of e+port benefit sche"es such as& E+port Bonus Sche"e& Q:!& Q:B& E1%S& IECS& and 8o"e Re"ittances sche"e$ (his led to a 'ide divergence bet'een the official rate and the SE rate$ (he situation also gradually gave rise to a nu"ber of conflicting regulations& poor risk "anage"ent& and various types of i"plicit or e+plicit govern"ent guarantees to the users of foreign e+change$ (his resulted in nu"ber of "acro-econo"ic i"balances pro"pting the govern"ent to adjust the official rate in phases and to li7uidate its difference 'ith the rate at SE $ (he t'o rates 'ere finally unified in Panuary#II0$(he first step to'ards currency convertibility 'as taken on #E Puly #II4 and this "arked the beginning of relatively open foreign e+change "arket in the country$ *ntil then the Bangladesh Bank used to declare a "id - rate along 'ith the buying and selling rates for dollar applicable to authori)ed dealers$ Initially the spread 'as B2( H$#H& 'hich 'as gradually 'idened to B2( H$4H

%t present &the syste" of e+change rate "anage"ent in Bangladesh is to "onitor the "ove"ent of the e+change rate of taka against a basket of currencies through a "echanis" of real effective e+change rate5R1ER6 intended to be kept close to the e7uilibriu" rate$ (he players in the foreign e+change "arket of Bangladesh are the Bangladesh Bank& authori)ed dealers& and custo"ers$ (he Bangladesh Bank is e"po'ered by the 1oreign E+change Regulation %ct of #I9E to regulate the foreign e+change regi"e$ It& ho'ever& does not operate directly and instead$ Regularly 'atches activities in the "arket and intervenes& if necessary& through co""ercial Banks fro" ti"e
40

to ti"e its guidelines for "arket participants in the light of the countryCs

ONE(%RG

:O!ICG stance 1OREI@N EQC8%N@E RESERE position B%!%NCE of :%G EN(S and overall "acro-econo"ic situation$ @uidelines are issued through regularly updated E+change Control anual published by the Bangladesh Bank$

4.1.3 6orei#n *+chan#e

1oreign e+change is an i"portant and integral part of co""ercial banking$ It is very "uch !ucrative and re"unerative operation of the bank& if it is conducted syste"atically and "ethodically as per nor"s$ In order to conduct 1oreign E+change %ctivities syste"atically and "ethodically the 1oreign E+change Regulation 51ER6 %ct& #I9E enacted on the ## arch #I9E in the British- India provides the legal basis for regulating receipts and pay"ents and dealings in the foreign e+change and securities$ Basic regulations for conducting 1oreign E+change Operation are issued by the @overn"ent as 'ell as by the Bangladesh Bank in the for" of :ublic notice& circulars& SROs etc$ 1ro" ti"e to ti"e %uthori)ed 2ealers 5%ds6 in 1oreign E+change should "eticulously follo' the said circulars and guidelines of Bangladesh Bank

4.1.4 Meanin# of 6orei#n *+chan#e

1oreign E+change "eans the e+change of currency in ter"s of goods includes all deposits& credits& balance payable& drafts& ($Cs& bill of e+change& !3C etc fro" one country to another$ (his is the "ost 'ell-kno'n and 'ell-organi)ed business unifor" in 'orld business$ %ll foreign e+change transactions in Bangladesh are subject to e+change control regulation of Bangladesh Bank$ %"ong all depart"ents 1oreign E+change depart"ents of *ttara Bank !td are one of the "ost i"portant$ (he Bank is providing e+cellent services to the clientele in foreign e+change and foreign trade operations through the above foreign correspondents$

4.1.5 ;ece ity of 6orei#n *+chan#e

No country self-sufficient in this 'orld$ Everyone is& "ore or less dependent on other& for goods or services$ Say& Bangladesh has cheap "anpo'er 'hereas Saudi %rabia has cheap petroleu"$ So& Bangladesh is dependent on Saudi %rabia for petroleu" and Saudi %rabia
44

is dependent on Bangladesh for cheap "anpo'er$ :eople of one country are going to abroad for "edical service& education etc$ thus there is an e+change of foreign currency$

9$#$B %ctivities of 1oreign E+change 2ivision

%ctivities of 1oreign E+change 2ivision can be broadly divided into three parts< #$ E+port 0$ I"port 4$ Re"ittance

9$#$E Regulations for 1oreign E+change 2ivision<

1oreign E+change transactions are being controlled by the follo'ing rules and regulations<

9$#$E$#$ !ocal Regulation<

1oreign E+change act #H9E$ Bangladesh bank issues 1oreign E+change Circular fro" ti"e to ti"e to control the e+port& i"port and re"ittance operation$ inistry of co""erce issues e+port and i"port policies giving basic for"alities for i"port and e+port$ So"eti"es CCI issues public notices for any kind of change in 1oreign E+change transaction$ Bangladesh Bank publishes t'o volu"es in #IIB$ (hese co"prise the co"plete instructions to be follo'ed by the authori)ed dealers in transactions related to 1oreign E+change$

9$#$E$0$ International Regulation<

(here are so"e international organi)ations influencing our 1oreign E+change transactions$ (hese are<

International Cha"bers of Co""erce 5ICC6<

Is a 'orld'ide non-govern"ental organi)ation of the thousands of co"paniesT It 'as founded in #I#I$ ICC has been issued so"e publication like *C:2C& *RC and *RR etc$& 'hich are being follo'ed by all the "e"ber countries$ (here is also International Court of %rbitration to solve the international business disputes$
49

 >orld (rade Organi)ation 5>(O6<

Is another international trade organi)ation established in #IIAT @eneral %gree"ent on (ariff and (rade 5@%((6 'as established in #I9F& after co"pletion Fth round the organi)ation has been abolished and replaced by >(O$ (his organi)ation has role in international trade& through its #09 "e"ber countries$

4.1.2. Ao' 6orei#n *+chan#e i bein# contro""ed

1oreign E+change is being controlled by the follo'ing 'ays< (o stabili)e the rate of e+change (o protect do"estic industries 1or proper i"ple"entation of plans (o increase the bargaining strength (o check over invoicing ; *nder invoicing (o check the Blank "arketing and s"uggling 1or regulating the international "ove"ents of goods

9$#$I$ 1oreign E+change :erfor"ance of *ttara Bank !i"ited<

1. I%port:
(he BankCs foreign e+change business relating to i"port 'as (k$#F4E99 "illion in 0H#H and (k$ #IE0FA "illion in0H##$

2. *+port:
(he BankCs foreign e+change business relating to e+port 'as (k$##FA#A "illion in 0H#H and (k$#A4EAF in 0H##$

3. 6orei#n !e%ittance:
(he achieve"ent *B! in attracting foreign re"ittance 'as (k$A0B9H in 0H#H and (k$E00F9 "illion in 0H#0$

(able< 1oreign E+change :erfor"ance of *B!U (ear )m!ort #*!ort +emittance ,ro-it
4A

2007 2008 2009 2010 2011

F9HBA #0I9#4 ##FA0A #F4E99 #IE0FA

E#FAA FA9#F FFBA4 ##FA#A #A4EAF

4BEI 9AI0 AB#I A0B9 E00F

#BF# 4#9A 0IF0 9IHE 999A

Chart< 1oreign E+change Business of *B!

E+planation< (he above graph sho's the foreign e+change earnings regarding to i"port&
e+port and foreign re"ittance$ In 0H## the i"port earnings 'as (M$ #IE4FA "illion& e+port earnings 'as (M$#A4EAF "illion and the foreign re"ittance earnings 'as (M$ E00F9 "illion$

4.1.18 !i / Mana#e%ent of 6orei#n *+chan#e (ctivitie

1oreign e+change risk is a risk that a bank "ay suffer losses as a result of adverse "ove"ent in either spot or for'ard rate or co"bination of the t'o& in individual foreign currency$ (his risk is associated 'ith the transaction involved in i"port& e+port& re"ittance and foreign currency in hand and bank$ (o "itigate the risk involved in foreign e+change business& the foreign e+change dealing operation in *ttara Bank !i"ited is perfor"ed through 2ealing Roo"51ront Office6 & id Office and Back Office$ (he dealers "anage "arket risk& avoid adverse e+change fluctuation& look for better invest"ent of funds& "aintain sound li7uidity and protect the Bank fro" any unforeseen loss in the situation of any "arket volatility$ (he id Office and Back Office are assigned the responsibility of related support functions$ 2ealing roo" is restricted for all e+cepting dealers and authori)ed e+ecutives$ (he dealing roo" is e7uipped 'ith "odern facilities i$e$ ReutersCs infor"ation& S>I1(& receptors "onitor& telephone& voice recorder etc$ oreover stop3 loss li"it& trading li"it& overnight li"it is given by the concerned authorities$ (he daily blotter and "ark to "arket revaluation report is placed to "anage"ent for their re

4B

Chapter-9$0

4.2.1 &etter of credit 5&>.7 4.2.2 (ypes of !3C 4.2.3 !etter of Credit (ransaction 4.2.4 :arties involved in the !3C 4.2.5 Basic :rocedures for Opening a !3C 4.2.6 !3C %pplication 1or" 5!3C%16 4.2.7 !etter of Credit-Settle"ent

4E

%ctivities of !etter of credit 5!3C6

4.2.1. &etter of .redit 5&>.7:

!etter of credit 5!3C6 can be defined as a .Credit Contract/ 'hereby the buyerCs bank is co""itted 5on behalf of the buyer6 to place an agreed a"ount of "oney at the sellerCs disposal under so"e agreed conditions$ !3C is called docu"entary letter of Credit because the undertaking of the issuing bank is subject to presentation of so"e specified docu"ents$ (he *nifor" Custo"s ; :ractices for 2ocu"entary Credit 5*C:2C6 published by International Cha"ber of Co""erce 5#II46 Revision :ublication No$ AHH defines 2ocu"entary Credit< %ny arrange"ent ho'ever na"ed or described 'hereby banks 5the issuing bank/6 acting at the re7uest and on the instructions of a custo"er 5the .%pplicant/6 or on its o'n behalf<

Is to "ake a pay"ent

or to the order of a third party 5the beneficiary6 or is to

accept and pay bills of e+change 52rafts6dra'n by the beneficiary& or %uthori)es another bank to effect such pay"ent or to accept and pay such bills of e+change 52rafts6 %uthori)es another bank to negotiate against stipulated docu"ents provide that ter"s and conditions are co"plied 'ith$

4F

4.2.2. (ypes of !3C<

!etter of Credit basically divided into t'o types<

#$ Revocable !3C<
Revocable !UC is a credit 'hich can be a"ended3 cancelled by issuing bank& 'ithout prior notice to the seller$

0$ Irrevocable !3C<
Irrevocable !3C is a credit& 'hich cannot be a"ended or cancelled 'ithout the agree"ent of all parties

So"e other types of !UC s are<

(ransferable !UC$ Confir"ed !UC$ Revolving !UC$ Standby !UC$ Red Clause !UC$ Back-to-Back !UC$

4.2.4. $artie invo"ved in the &>.

:arties involves 'ith letter of credit are "any$ (hey are as follo's<

I"porter3%pplicant<
%pplicant 'ho is referred to as account party is nor"ally a buyer or custo"er of the goods& 'ho has to "ake pay"ent to beneficiary$ Si"ply the person applies for !3C is called i"porter$

E+porter 5Beneficiary6<

Beneficiary of the !3C is the party in 'hose favor the letter of credit is issued$ *sually they are the seller or e+porter$

Issuing Bank<

Before issuing a !3C& the buyer and seller located in the different countries& concludes a sales -sales contactC providing for pay"ent by docu"entary credit$ %s per re7uire"ent of the seller the buyer then instructs the bank ,the issuing bank-to issue a
4I

credit in favor of the seller$ Instruction %pplication for issuing a credit should be "ade by the buyer in the issuing bankCs standard for"$ (he credit application& 'hich contains the full details of the proposed credit& also serves as an agree"ent bet'een the bank and the buyer$ %fter being convinced about the necessary conditions contained in the application for" and sufficient condition o be fulfilled by the buyer for opening a credit& the opening bank then proceeds for opening the credit to be addressed to the beneficiary$

Confir"ing Bank<
It is the bank& 'hich adds its confir"ation to the credit and it is done at the re7uest of issuing bank$ Confor"ing Bank "ay or "ay not be advising bank$

%dvising 3Notifying Bank<

It is the bank through 'hich the !3C is advised to the e+porters$ (his bank is actually situated in e+porterJs country$ It "ay also assu"e the role of confir"ing and or negotiating bank depending upon the condition of the credit$ (he process of advising a credit consists of for'arding the original credit to the beneficiary to 'ho" it is addressed$ Before for'arding the advising bank has a verify the signature5s6 of the officers5s6 of the opening bank and ensure that the ter"s and conditions of credit are not in violation of the e+isting e+change control regulations and other regulations relating to e+port$ In such act of advising& the advising bank does not undertake any liability$

Negotiating Bank<
It is the bank& 'hich negotiates the bill and pays the a"ount of the beneficiary$ (he advising bank and the negotiating bank "ay or "ay not be the sa"e$ So"eti"es it can also be confir"ing bank$

%ccepting Bank<

It is the bank on 'hich the bill 'ill be dra'n 5as per condition of the credit6$ *sually it is the issuing bank$

Rei"bursing Bank<

It is the bank& 'hich 'ould rei"burse the negotiating bank after getting pay"ent instructions fro" issuing bank$
9H

4.2.5. )a ic $rocedure for Openin# a &etter of .redit 5&>.7

In global business environ"ent buyers and sellers are often unkno'n to each other$ So seller generally de"ands guarantee of pay"ent for his e+ported goods$ In this situation bank has an i"portant role$ Bank gives e+port guarantee that it 'ill pay for the goods on behalf of the buyer$ (his guarantee is called .!etter of Credit/ or !3C$ (hus by letter of credit the contract bet'een i"porter and e+porter find a legal sphere$ (he letter of credit process has been standardi)ed by a set of rules published by the International Cha"ber of Co""erce 5ICC6$ (hese rules are called the *nifor" Custo"ers and :ractice for 2ocu"entary Credits 5*C:2C6 and are contained in ICC publication No$ AHH$ (he follo'ing is the basic set of steps used in !3C transaction$ Specific !3C transaction follo's so"e'hat different procedures$ #$ %fter the buyer and seller agree on the ter"s of sale& the buyer arranges for his bank to open a !3C in favor of the seller$ 0$ (he buyer issuing bank prepares the !3C& including all of the buyerCs instructions to the seller concerning ship"ent and re7uired docu"entation$ 4$ (he buyerCs bank sends the !3C to sellerCs advising bank$ 9$ (he sellerCs advising bank for'ards the !3C to the seller$ A$ (he seller carefully revie's all conditions stipulated in the !3C$ If the seller can not co"ply 'ith any of the provisions& it 'ill asked the buyer to a"end the !3C B$ %fter final ter"s are agreed upon& the seller ships the goods to the appropriate port or location$ E$ %fter shipping the goods seller obtains the re7uired docu"ents$ F$ (he seller presents docu"ents to its advising bank along 'ith a draft for pay"ent$ I$ (he sellerCs advising bank revie's the docu"ents$ If they are in order& it 'ill for'ard the" to the buyerCs issuing bank$ If a confir"ed !3C& the advising bank 'ill pay the seller$ #H$ Once the buyerCs issuing bank receives and revie's the docu"ents& if either pays if there are no discrepancies or for'ards the docu"ents to the buyer if there are discrepancies for its revie' and approval$

9#

4.2.6. &>. (pp"ication 6or% 5&>.(67

!3C %pplication 1or" is a sort of an agree"ent bet'een custo"er and bank on the basis of 'hich letter of credit is opened$ Bank provides a printed for" for opening of !3C to the i"porter$ % special adhesive sta"p of value (k$0HH is affi+ed on the for" in accordance 'ith Sta"p %ct currently in force$ >hile opening& the sta"ps are cancelled$ *sually the i"porter e+presses his decision to open the !3C 7uoting the a"ount of "argin in percentage$ *sually the i"porter gives the follo'ing infor"ation , #$ 1ull na"e and address of the i"porter 0$ 1ull na"e and address of the beneficiary 4$ 2raft a"ount 9$ %vailability of the credit by sight pay"ent3 acceptance3 negotiation3 deferred pay"ent A$ (i"e bar 'ithin 'hich the docu"ents should be presented B$ Sales type 5CI131OB3C;16 E$ Brief specification of co""odities& price& 7uantity& indent no$ etc$ F$ Country of origin I$ Bangladesh Bank registration no$ #H$ I"port !icense3!C%1 no$ ##$ IRC no$ #0$ %ccount no$ #4$ 2ocu"ents no$ #9$ Insurance Cover Note3:olicy no$& date& a"ount #A$ Na"e and address of Insurance Co"pany #B$ >hether the partial ship"ent is allo'ed or not #E$ >hether the transship"ent is allo'ed or not #F$ !ast date of ship"ent #I$ !ast date of negotiation 0H$ Other ter"s and conditions 5if any6 0#$ >hether the confir"ation of the credit is re7uested by the beneficiary or not 00$ (he !3C application "ust be co"pleted3filled in properly and signed by the authori)ed person of the i"porter before it is sub"itted to the issuing bank

90

4.2.7. &etter of .redit<Sett"e%ent

Settle"ent "eans fulfilling the co""it"ent of issuing bank in regard to effecting pay"ent subject to satisfying the credit ter"s$ Settle"ent "ay be done under 4 5(hree6 separate arrange"ents as stipulated in the Credit$ Settle"ent by :ay"ent<

8ere the seller presents the docu"ents to the no"inated bank and bank scrutiny the docu"ents$ If satisfies& the no"inated bank "akes pay"ents to the beneficiary and incase this bank is other than the issuing bank& then sends the docu"ents to issuing bank and clai" rei"burse"ent as per arrange"ent$ Settle"ent by %cceptance<

*nder this arrange"ent the seller sub"its the docu"ents evidencing the ship"ent to the accepting bank 5no"inated by the issuing bank for acceptance6 acco"panied by a draft and bank at the specified tenor$ %fter being satisfied 'ith the docu"ents& the bank accepts the docu"ents and the drafts and if it is a bank other than issuing bank& then se9nds the docu"ents to the issuing bank stating that it has accepted the draft and at "aturity the rei"burse"ent 'ill be obtained in the prepared "anner$ Settle"ent by Negotiation<

(his settle"ent proceeds 'ith the sub"ission of the docu"ents by the seller to negotiating bank$ In a freely negotiable credit any bank can negotiate docu"ents and if negotiation restricted by the issuing bank& only no"inated bank can negotiate the docu"ents$ %fter scrutini)ing that the docu"ents "eet the credit re7uire"ents& the bank can negotiate the docu"ents and give the value to beneficiary$ (he negotiation bank then sends the docu"ents to the issuing bank$ %s& usual the rei"burse"ent 'ill be obtained in the pre-agreed "anner$
94

Chapter-9$4
4.3.1 4.3.2 4.3.3 4.3.4 4.3.5 4.3.6 4.3.7 4.3.2 4.3.F 4.3.18 4.3.11 Meanin# of I%port I"port 2epart"ent I"port policy I"port :rocedures I"port echanis" (ypes of I"port @oods are not I"portable I"port 1inancing 2ocu"ents Receipt and Scrutiny @raphical :resentation and 2iscussion of I"port Regression %nalysis

99

I"port Section

9A

4.3.1. Meanin# of I%port

Si"ply i"port "eans purchase of goods or services fro" abroad$ %gain an i"port is any goods or services brought into a country fro" another country in a fair and acceptable fashion& typically for use in trade$ Nor"ally consu"ers& fir"s and @overn"ent organi)ations i"port foreign goods or services to "eet their various necessities$ ain i"port ite"s are food ite"& edible oil& fertili)er& petroleu"& "achineries& che"icals& ra' "aterials of industry& ce"ent clinkers etc$ So& in brief& 'e can say that i"port is the flo' of goods and services purchased by local agent staying in the country fro" foreign agent staying abroad$ (he i"porters are asked by their e+porters to open !etter of Credits 5!UC6& so that their pay"ent against goods is "ore insured$

>ho is called an I"porterT

(he person 'ho deals in i"port business obtaining I"port Registration Certificate 5IRC6 in ter"s of i"porters& E+porters and Indenters 5Registration6 order-#IF# fro" the CCI; E sub"itting the follo'ing papers is treated as I"porter$ #$ Kalid (rade !icense 0$ Nationality Certificate 4$ %sset Certificate 9$ (IN Certificate A$ Bank Solvency Certificate B$ K%( Registration Certificate E$ (rade %ssociation Certificate F$ e"orandu" ; %rticles of %ssociation I$ Certificate of Incorporation 5In case of !i"ited Co"pany6$

4.3.2. I%port 4epart%ent

Bangladesh is one of the developing countries in the 'orld$ So& like other developing countries Bangladesh I"ports largely than it E+ports$ I"ports of goods into the Bangladesh is regulated by the inistry of Co""erce in the ter"s of the I"portE+port %ct& #IAH& various I"port policy orders and also public notices issued fro" ti"e to ti"e by the office of the Chief Controller of I"port and E+port 5CCI;E6$ *ttara Bank !i"itedCs foreign e+change business relating to i"port 'as (k$#IE0FA "illion at the ends of 2ece"ber 0H##$
9B

4.3.3. I%port $o"icy

2ifferent I"port :olicy<
I"port facility up to L0HHH for actual user 5for self-consu"ption not for %bove LAHHH approval of Chief Controller of I"port and E+port 5CCI;E6 sale6 'ithout per"ission$ is needed$ I"port facility on the basis of direct pay"ent on foreign countries I"port under !UC& !UC "ust be irrevocable$ I"port above LAHHH-!UC is

re7uired but in the case of perishable ite"s like food up to LEAHH transported by road !UC is not re7uired$ So"e other cases in 'hich do not re7uire !UC& are< Books& aga)ines& :ublications$

I"port up to LAHHH in case of pay"ent fro" Bangladesh$ I"port under 1oreign %id$

I"port of VInternational Che"ical ConferenceV by the @overn"ent sector bodies can i"port 'ithout any license&

:har"aceutical Co"panies 'ith prior approval 2rug %d"inistration$ per"it ; IRC 5I"port Registration Certificate6

Settle"ent if I"port (rade (ransaction<

Karious trade ter"s are available to balance the trade transaction risks for both the i"porter and e+porter$ %s an i"porter3distributor 'e "ay 'ish to negotiate the "ost favorable ter"s of purchase 'ith our overseas supplier$ >e negotiate ter"s of purchase to ensure that 'e receive our i"port purchase in the right 7uantity& right 7uality& at the right price and on ti"e$ %t the sa"e ti"e 'e can e+pect our overseas supplier to negotiate ter"s that 'ill "ini"i)e potential risks particularly the risk of nonpay"ent$ I"port trade transactions can be structured in a nu"ber of 'ays$ (he structure used in a specific transaction reflects ho' 'ell the participants kno' each other& the countries involved& and the co"petition in the "arket$ :ay"ent (er"s<

9E

(here are four general ; "ost co""only used ter"s of pay"ent e+tended to a co"pany purchasing goods fro" overseas$ Ranked by preference of the i"porter fro" the least to the "ost risk are Open %ccount& 2ocu"entary Collections& 2ocu"entary !etters of Credit and Cash in %dvance$ So"e other ter"s of pay"ent "ay include Consign"ent :urchase ; 2o'n :ay"ent$ #$ Cash in %dvance< (he buyer places the funds at the deposal of the seller prior to ship"ent of the goods or provision of services$ 0$ Open %ccount< %n arrange"ent bet'een the buyers and the seller 'hereby the goods are "anufacture and delivered before pay"ent is re7uired$ 4$ Collection ethod< %n arrange"ent 'hereby the goods are shipped and the

relevant bill of e+change is dra'n by the seller on the buyer and or docu"ent is to the sellerCs bank 'ith clear instructions for collection through one of it correspondent bank located in the do"icile of the buyer$ 2ocu"ent collection< 23: and 23% Clean collection 2ocu"ent collection

2ocu"entary Credit< (he docu"entary Credit or !etter of credit is an undertaking issued by a bank for the account of the buyer or for its o'n account& to pay the Beneficiary the value of the draft and or docu"ents provided that ter"s and condition of the docu"entary Credit are co"plied 'ith$ :rovides !egal :rotection and Risk Reduction 1acilities 1inancing %ssure e+pert e+a"ination of docu"ent$ (able< ethods of pay"ent

9F

Method of $ay%ent

Sendin# of @ood %fter :ay"en t

3i%e of $ay%ent

!o"e Of )an/ :assive-Sending the funds fro" the i"porterCs %3C to the e+porters %3c as re7uested by the i"porter :assive-sending the funds fro" the i"porterCs %3c to the e+porterCs %3c as re7uested by the i"porter Not active& oderate being instructed by the e+porter Kery active-being approached by the I"porter

!e"ative ri / to buyer E+tre"e very high

!e"ative ri / to e""er No3Kery lo'

.a h in advance

Before Ship"ent

Open account 4ocu%e ntary .o""ectio n 4ocu%e ntary .redit

Before %fter pay"ent ship"ent

No3Kery lo'

E+tre"e very high

Before %fter pay"ent ship"ent Before %fter pay"ent ship"ent

!o'

oderately high due to 2ishonor !o'

!o'

4.3.4. I%port $rocedure

%uthori)ed 2ealer& banks are al'ays co""itted to facilitate i"port of different goods into Bangladesh fro" the foreign countries$ I"port Section& 'hich is under 1oreign E+change 2epart"ent of a bank& is assigned to perfor" this job$ %nd to serve its parties de"and to i"port goods& it al'ays "aintains re7uired for"alities that are collectively ter"ed as .I"port :rocedure/$ #$ %t first& the i"porter "ust obtain I"port Registration Certificate 5IRC6 fro" the CCI;E sub"itting the follo'ing papers< *p to date (rade !icense$ National and %sset Certificate$ (a+ Identification Nu"ber 5(IN 6 In case of co"pany& e"orandu" ; %rticles of %ssociation and

Certificate of Incorporation$ Bank Solvency Certificate etc$

9I

 0$

Re7uired a"ount of registration fee

(hen the i"porter has to contact 'ith the seller outside the

country to obtain the :erfor"a Invoice$ *sually an indenter& local agent of the seller or foreign agent of the buyer "akes this co""unication$ Beside these other sources are< 4$ (rade fair$ Cha"ber of Co""erce$ 1oreign issions in Bangladesh$

Pournals etc$

>hen the i"porter accepts the :erfor"a Invoice& he3she "akes a purchase contract 'ith the e+porter detailing the ter"s and conditions of the i"port$

9$

%fter "aking the purchase contract& i"porter settles the "eans of pay"ent 'ith the seller$ %n i"port procedure differs 'ith different "eans of pay"ent$ (he possible "eans are Cash in %dvance& Open %ccount& Collection ethod and 2ocu"entary !etter of Credit$ In "ost cases& the 2ocu"entary !etter of Credit in our country "akes i"port pay"ent$ :urchase Contract contains 'hich pay"ent procedure has to be applied$

4.3.5. I%port Mechani %

(o I"port& a person should be co"petent to be i"porter$ %ccording to I"port and E+port Control %ct-#IAH& the office of Chief Controller of the I"port and E+port 5CCI;E6& provides the registration 5IRC6 to the i"porter$ %fter obtaining thus personJs has to secure a letter of Credit authori)ation fro" Bangladesh bank$ %nd then a person beco"es a 7ualified i"porter$ 8e is the person 'ho re7uires or instructs the opening bank to open a !UC$ 8e is also called Opener or %pplicant of the credit$

4.3.6. 3ype of I%port

ainly there are t'o types of i"port<
AH

#$ 0$

Co""ercial I"port Industrial i"port

#$ Co""ercial I"port<
I"porter does co""ercial i"port only for trading purpose$ (hese products are finished goods$ Such as rice& 'heat& soybean oil etc$

0$ Industrial I"port<
I"porter does industrial i"port for industrial use only$ (hese products are ra' "aterials and capital "achinery$ Such as? ra' cotton& Crude oil etc$ No' 'e can see fro" the follo'ing table that ho' "any co""odities are i"ported by this branch< (able< Na"e of the co""odities

Na"e of the Co""odities Industrial I"port Industrial Ra' aterials Garn 2yes %lu"inu" Ingot Che"icals :har"aceutical Ra' aterials :har"aceuticals :acking "aterials Capital achinery Co""ercial I"port obile :hone 2iesel generator !aboratory Reagents Spare :arts Regulator %ir Cooler (oiletries :assenger Elevator !ighting 1i+ture 1ood :roducts Reconditioned Kehicle$ :rinting Ink$
A#

@as

:ressure

Source< https<33'''$uttarabank$bd$co"

4.3.E$ @oods are not i"portable

(he follo'ing types of goods are not i"portable< Books& Ne'spaper& periodicals& docu"ents and other papers& posters photographs& fil"s& gra"ophone records& audio and video cassette tapes etc containing "atters likely to outrange the religious feeling and beliefs of any class of the citi)en of Bangladesh$ aps& chart and geographical globes 'hich indicate the territory of

Bangladesh but do not do so in accordance 'ith the "aps published by the depart"ent of survey& @overn"ent of the peopleCs republic of Bangladesh$ Reconditioned office e7uip"ent& photocopier& type-'riter "achine& tele+& phone& co"puter and fa+$ @oods bearing any obscene picture& 'riting inscription or visible representation$

4.3.2. I%port 6inancin#

(here is various "ethod of I"port 1inancing& 'hich is regulated by legal fra"e'ork and i"port policy$ (hese are< #$ 0$ Non-1unded 1inancing :ost i"port 5funded6 1inancing

1. Non-1unded 1inancing<
!etter of Credit constitutes the "ost i"portant Non-1unded 1inancing in i"port trade$ (here are a very co""on for" of i"port financing because they provide a high degree of protection for both buyer and seller$

2. :ost I"port 5funded6 1inancing:

(here are "ajor three for"s of funded post i"port financing offered by the banks$ (hese are given belo'a$ :ay"ent against 2ocu"ents 5:%26 b$ !oan against I"ported erchandise 5!I 6 c$ !oan against (rust Receipt 5!(R6
A0

:ay"ent "ade by the bank against lodg"ent of shipping docu"ents of goods i"ported through letter of credit falls under this types$ >hen i"porter bank finds docu"ents in order and if there is any discrepancies have 'hich is acceptable by the i"porter& i"port bill have to give to foreign bank or e+porter bank$ a$ !oan against I"ported erchandise 5!I 6< (his is funded credit facility allo'ed for retire"ent of shipping docu"ents and release of goods i"ported through !3C taking effect control over the goods by pledge in god o'ns under bankCs lock and key$ (his is a te"porary advance connected 'ith i"port 'hich is kno'n as post-i"port finance and falls under the category .Co""ercial !ending/$ b$ !oan against (rust Receipt 5!(R6< *ttara Bank !i"ited keeps security 5such as -land& Building etc6 against !oan against (rust Receipt$ :arty can replay !oan against (rust Receipt a"ount partial$ *ttara Bank !i"ited "aintains a different ledger account for !oan against (rust Receipt in 'hich several infor"ation have such as date& particular& debit and credit a"ount& initial& product na"e& interest a"ount& loan %3C no& interest rate& "ode of pay"ent& e+piry date and "argin etc$ !oan against (rust Receipt interest rate varies party to party$ !oan against (rust Receipt validity date "ay be 4H days3 BH days3 #0H days& 'hich depends on sanction of NB! head office$ !(R interest rate W 2ays X Balance X Rate of interest 3 4BH days

4.3.F. 4ocu%ent !eceipt and Scrutiny

%fter opening the !etter of Credit the ne+t step 'ould be to a'ait ship"ent follo'ed by negotiation of docu"ents by a bank abroad$ 8o'ever& generally the follo'ing docu"ents are asked to send< Bill of lading or %ir'ay Bill or other evidence of ship"ent 5e$g$ Certificate of Origin Co""ercial Invoice 2raft or bill of e+change Inspection of Survey Certificate arine Insurance :olicy
A4

Rail'ay Receipt& (ruck Receipt& Barge Receipt6

:acking !ist Yuality Control Certificate

4.3.#H$ @raphical :resentation and 2iscussion of I"port

9$4$#H$#$ I"port :erfor"ance of *ttara Bank !i"ited?
(able< I"port :erfor"ance of *ttara Bank !i"ited? $c"ie.em ent -rom )m!ort (ear )m!ort 0HHE F9HBA 0HHF #0I9#4 0HHI ##FA0A 0H#H #F4E99 0H## #IE0FA

Source< https<33'''$uttarabank$bd$co" Chart-< I"port perfor"ance of *B! Source< https<33'''$uttarabank$bd$co"

E+planation< (he graph sho's that the i"port perfor"ance of *B! fro" 0HHE-0H##$
8ere is a positive gro'th rate$ (he gro'th rate is increasing gradually$ %nd 0H#H -## the gro'th rate is B$FBN$

9$4$#H$#$ I"port :erfor"ance of *B!& Ne' arket Corporate Branch (able< I"port :erfor"ance of *B!& Ne' arket Corporate Branch
%chieve"ent against target51igure in "illion (M$6 Gear (arget %chieve"ent 0HHF II$BB #HB$EE 0HHI F0$49 #AI$I9 0H#H ##0 #4E 0H## #4I #9# 0H#05up to Septe"ber6 ##H ##9

Source< https<33'''$uttarabank$bd$co"

A9

Chart- I"port :erfor"ance of Ne' source< https<33'''$uttarabank$bd$co"

arket Corporate Branch

E+planation< (he graph sho's that the a"ount of achieve"ent against target of Ne'
arket Corporate Branch fro" 0HHF-0H#0$ In 0HHF the achieve"ent 'as (M$#HBE$E "illion against target (M$IIB$B "illion$ In 0HHI the achieve"ent 'as (M$#AI$I9 "illion against target (M$F0$49 "illion$ In 0H#H the achieve"ent 'as (M$#4E "illion against target (M$##0"illion and in 0H## the achieve"ent 'as (M$#9# "illion against target (M$#4I "illion$ In 0H#05*p to Septe"ber6 the achieve"ent 'as (M$##9 "illion against target (M$##H "illion$ 1ro" the graph it is clear that the perfor"ance of *ttara Bank !i"ited is increasing day by day$ Because *ttara Bank li"ited is giving its better perfor"ance as it cross ti"e$

9$4$#H$4 Increase or 52ecrease6 of I"port :er centage 5N6 of *B!& Ne' Branch<
(able-< Increase or 52ecrease6 of I"port :ercentage 5N6 of *B!& Ne' Increa e or 54ecrea e7 of I%port $ercenta#e 5G7 4urin# Bear $ercenta#e (chieved 0H#H 5-6#9$49N 0H## 0$I0N 0H#05up to Septe"ber6 5-6#I$#AN

arket

arket Branch

Source< https<33'$uttarabank$bd$co" Chart Increase or 52ecrease6 of I"port :ercentage 5N6 Source< https<33'''$uttarabank$bd$co"

E+planation< (he graph sho's the data of i"port percentage of *ttara Bank !i"ited&
Ne' arket Corporate Branch$ In 0H#H& 0H##& and 0H#0 the percentage 'as respectively 5-6 #9$49N& 0$I0Nand 5-6 #I$#AN But here the percentage in 0H## 'as higher than the previous years& 'hich is good for the branch$ %nd in 0H#0 the percentage is increasing gradually$

AA

4.3.11. 3he !e#re ion (na"y i

9$4$##$#$ (he Regression %nalysis on i"port and profit<
(able- I"port and :rofit of *ttara Bank !i"ited I"port Q 5in "illionCHHH6 F9$HBA #0I$9#4 ##F$A0A #F4$E99 #IE$0FA :rofit G5in "illionCHHH6 #$BF# 4$#9A 0$IF0 9$IHE 9$99A

1or analysis facility 'e solve the follo'ing 7uestions 'hich are<Re7$#$ 1ind the regression e7uation of profit on i"port Re7$0$ Calculation co-efficient of co-relation$ Re7$4$ 1ind the e+planatory po'er of the independent variable 5Coefficient of deter"ination6 Re7$9$ If the i"port is increases by (k$ FHHHH "illion 'hat 'ill be the figure of the profit level$ Re7$A$ Interpretation the result of the above four re7uire"ent$

Solution<
!et us& I"port 5Independent variable6 W Q? :rofit 5dependent variable6 W G Re7$ #< Regression e7uation of profit on i"port GWaZb+ W4$HB#0Z$HH0BQ [>here& aW 4$HB#0 ; bW $HH0B\ --- %ppendices part 9& :age no -I4\ Re7$0< Correlation on Coefficient<

AB

R W H$HH9H#A Re7$4< RW $HH#BN Coefficient of 2eter"ination5r6

Re7$9< If I"port is QWFHHHH5"n6 G W4$HB#0Z$HH0BQ W 4$HB#0Z$HH0B]FHHHH W0##$HB#05"n6 Re7$A$ Interpretation< Re7$#< If the i"port is increased by (k$#& :rofit 'ill be increased by (k$ H$HH0B Re7$0< (here is very lo' degree of positive relationship bet'een i"port and profit$ %s the value of I"port goes up& the profit also goes up$ Re7$4< Coefficient of 2eter"ination H$HHHH#B "eans that i"port level can be deter"ined by H$HH#BN profit$ %s the value of i"port goes up& the profit also goes up$ Re7$9< If the i"port level is (k$ FHHHH "illion than the profit level 'ill be (k$ 0##$HB#0"n

Co""ents< 8ere the value of a is constant and the value of b is slope$ (he positive value
of b "eans positive slope and the negative value of b "eans negative slope$ 1ro" the above graph 'e see that the bank increases i"port day by day$ So& 'e can say that i"port position is satisfactory$

AE

Chapter-9$9
4.4.1 4.4.2 4.4.3 4.4.4 4.4.5 4.4.6 4.4.7 4.4.2 Meanin# of *+port E+port 2epart"ent 2ocu"ents used in E+port Registration for the E+porter 1or"alities and procedures of e+port !3C E+port 1inancing @raphical :resentation and 2iscussion of E+port Regression %nalysis

AF

E+port Section

4.4.1. Meanin# of *+port

(he goods and services sold by Bangladesh to foreign households& business"en and @overn"ent are called e+port$ fish& vegetables& tea& coffee& spices etc$ ain e+port ite"s are ready"ade gar"ents& fro)en

4.4.2. *+port 4epart%ent

(he e+port trade of the country is regulated by the I"ports and E+ports 5control6 %ct& #IAH$ (here are a nu"ber of for"alities& 'hich an e+porter has to fulfill before and
AI

after ship"ent of goods$ (he e+ports fro" Bangladesh are subject to e+port trade control e+ercised by the inistry Of Co""erce through Chief Controller of I"ports and E+ports 5CCI ; E6$ No e+porter is allo'ed to e+port any co""odity per"issible for e+port fro" Bangladesh unless he is registered 'ith CCI ; E and holds valid E+port Registration Certificate 5ERC6$ (he ERC is re7uired to be rene'ed every year$ (he ERC nu"ber is to be incorporated on EQ: for"s and other docu"ents connected 'ith e+ports$

(he "ajor function of this section is co"prises 'ith purchases& collection ; negotiate the e+port bill& provide the e+porter in financing and helps the e+porter in different issues$ % person desire to e+port should "ake application to obtain ERC 5E+port Registration Certificate6 fro" CCI;E then the person should step in to a bank along 'ith ERC to obtain e+port operation fro" the Bank$

@overn"ent of Bangladesh gives "any facilities for the e+porters$ Such as Inco"e ta+ e+e"ption for e+port earning< *nder the inco"e ta+

la' other than the o'ners of factories not registered in Bangladeshi& all e+porters 'ill get AHN e+e"ptions in their inco"e ta+es$ E+e"ption in insurance pre"iu"$ Bond facilities for e+port oriented industries$ 1acilities for duty free i"port of capital "achineries for e+port -

oriented industries$ (he e+port-oriented industries 'ill get the advantage of i"porting

#H percent spare parts of their capital "achineries 'ithout duty in every t'o years$ :roviding alternative facilities to e+port-oriented local te+tiles and R @ other than duty-bond or duty-dra'-back$ (a+ holiday$ 2uty-dra'-back sche"e$

BH

4.4.3. 4ocu%ent u ed in *+port:

>hen a fir" sells its goods abroad& it "ust arrange for each e+port ship"ent to be acco"panied by various docu"ents$ 2epending on the country to 'hich the goods are being sent& these docu"ents 'ill vary$ But for e+porting 'e can divide those docu"ents in t'o types1. 2. Substantive 2ocu"ents %u+iliary 2ocu"ents

9$9$4$#$ Substantive 2ocu"ent<

Substantive 2ocu"ents are given belo'< 2raft or Bill of E+change<

Bill of E+change is an instru"ent in 'riting containing an unconditional order or at a fi+ed deter"inable future ti"e a certain su" of "oney only to& or to the order of a certain person or to the bearer of the instru"ent$ Co""ercial Invoice<

Co""ercial Invoice is the e+port fir"Js invoice& addressed to the foreign i"porter describing the goods shipped and the total price that it "ust pay$ for"s are called custo"s invoices$ Bill of lading or %ir'ay Bill< 8o'ever& so"e countries re7uire the co""ercial invoice to be prepared on their o'n for"s$ Such

Bill of !ading is a docu"ent supplied to the e+porter by the shipping co"pany that is transporting the goods to their foreign destination& listing& ite" by ite"& the goods being shipped$ It serves three basic purposes< a$ (o ackno'ledge receipt by the carrier of the e+porterJs goods$ b$ (o indicate the carrierJs contractual obligation to transport the goods
B#

to their destination ine+change for pay"ent$ c$ (o record transfer of title fro" the seller to the buyer 'hen pay"ent for the goods takes place$ %irlines use 'hat is called an %ir >aybill$

9$9$4$0$ %u+iliary 2ocu"ents<

%u+iliary 2ocu"ents are given belo'< Cargo "anifest or packing list<

>hen 7uantities& 'eights or contents of the various packing cases in an e+port ship"ent vary& it is usual to prepare a separate list for each case indicating its contents& 'eight and "easure"ents$ Certificate of Origin<

Certificate of Origin is a docu"ent& 'hich indicates the country in 'hich the goods 'ere produced& is re7uired 'henever preferential duties are clai"ed$ So"eti"e& consular legali)ation of the docu"ent is necessary$ %lso& certification of the docu"ent by a Cha"ber of Co""erce is re7uired$ Yuality control certificate<

>hile e+porting products for 'hich 7uality control certificate is obligatory& the e+porter 'ill have to sub"it& to the Custo"s %uthorities& a 7uality control certificate issued by the appropriate authority$ Consular Invoice<

So"e country re7uired consular invoice$ Countries that re7uire a consular invoice also re7uire a co""ercial invoice as additional proof of the details of the e+port ship"ent$ Certificate of free sale<

(his certificate re7uired for phar"aceuticals and certain che"icals entering a nu"ber of countries$ E+port 2eclaration 1or"s<

It is usually necessary for the e+porter 'ishing to ship goods abroad& to fill out a for"
B0

called an E+port 2eclaration$ (he docu"ent is also used for statistical purposes so that govern"ent authorities kno' e+actly 'hat has been e+ported fro" the country in each "onth and year and to 'hich country

4.4.4. !e#i tration for the *+porter

In the e+port policy of Bangladesh any one cannot e+port goods in abroad$ (o e+port goods an e+porter needs a valid E+port Registration Certificate fro" the Chief Controller of I"port and E+port 5CCI;E6$ E+porters find an E+port Registration Certificate 5ERC6 nu"ber 'hich is incorporate on E+port for" and papers connected for obtaining E+port Registration Certificate National I2 card e"orandu" and %rticle of %ssociation and Certificate of Incorporation in case of li"ited co"pany (rade license Bank Certificate %ssets certificate Inco"e (a+ certificate etc$

9$9$A$ 1or"alities and :rocedures of E+port !3C

(he for"alities and procedure of e+port !3Cs are as follo's<

Obtaining e+ports !C<

(o get e+port !C for" e+porter issued by the i"porter$

Sub"ission of e+port docu"ents<

B4

E+porter has to sub"it all necessary docu"ents to the collecting bank after ship"ent$

Checking of e+port docu"ents<

%fter getting the docu"ents banker used to check the docu"ents as per !C ter"s$

Negotiation of E+port docu"ents<

If the hank accepts the docu"ent and pays the value draft to the e+porter and for'ard the docu"ent to issuing bank that is called a negotiating bank$ If the bank does buy the !C then the bank nor"ally acts as collecting bank$

Reali)ation of proceeds<

(his is the period 'hen the issuing bank has reali)ed the pay"ent$

Reporting to the Bangladesh Bank<

%s per instruction by Bangladesh Bank the bank has to report to respective depart"ent of Bangladesh bank by "entioning latest pay"ent$

Issue to proceeds reali)ation certificate 5:RC6<

Bank has to issue precede reali)ation certificate of e+port !C to the supplier e+porter for getting cash assistance

9$9$B$ E+port 1inancing

(o "eet up the cost of goods to be e+ported& the e+porter "ay re7uire Bank finance$ Besides& he "ay re7uire finance for go do'n rent& freight etc$ Even after ship"ent of the goods& e+porter "ay re7uire Bank finance to "eet-up his e+penditure up o repatriation of the e+port proceeds$ (here are t'o type of e+port finance< #$ 0$ :re-ship"ent finance :ost -ship"ent finance

9$9$B$#$ :re Ship"ent 1inance in E+port (rade<

:re Ship"ent 1inance is issued by a financial institution 'hen the seller 'ants the pay"ent of the goods before ship"ent$ (he "ain objectives behind pre ship"ent finance or pre e+port finance are to enable e+porter to<
B9

:rocure ra' "aterials$ Carry out "anufacturing process$ Ship the goods to the buyers$ eet other financial cost of the business$

(ypes of :re Ship"ent 1inance< :re ship"ent finance is of three types< a$ b$ c$ :acking Credit %dvance against Che7ues 32raft received as %dvance :ay"ents Back to back !3C

a. :acking Credit< :acking Credit is any loan or advance granted or any other credit provided by a bank to an e+porter for financing the purchase& processing& "anufacturing or packing of goods prior to ship"ent& on the basis of letter of credit opened in his favor or in favor of so"e other person& by an overseas buyer or a confir"ed and irrevocable order for the e+port of goods fro" the producing country or any other evidence of an order for e+port fro" that country having been placed on the e+porter or so"e other person& unless lodg"ent of e+port orders or letter of credit 'ith the bank has been 'aived$

b. %dvance against Che7ue32rafts received as advance pay"ent< >here e+porters receive direct pay"ents fro" abroad by "eans of che7ues3drafts etc$ the bank "ay grant e+port credit at confessional rate to the e+porters of goods track record& till the ti"e of reali)ation of the proceeds of the che7ue or draft etc$ (he Banks ho'ever& "ust satisfy the"selves that the proceeds are against an e+port order$

c. Back to back !3C< Back-to-back !3C "eans one credit backs another credit$ It is ne' credit in favor of
BA

another beneficiary$ to-back !3C<

Besides& the nor"al for"alities and re7uire"ents 5for !3C

opening6 the follo'ing for"alities and docu"ents are also re7uired for opening back-

aster !3C

Kalid bonded 'are house license Yuota allocation for 7uota ite"s ERC in addition to IRC Inde"nity No objection fro" previous banker 5if any6 1actory inspection certificate B@ E% e"bership

Kouchers and accounting treat"ents are the sa"e nor"al !3C opening e+cept "argin$ In this case& no "argin is taken by the bank$ %fter lodg"ent& "aturity date of the i"port bill is inti"ated to foreign bank as per !3C ter"s$

Establishing Back to Back !3C? 8o' 'hole process 'orks are given belo'< Issue of original !3C<

In docu"entary credit operations buyer 5i$e$ the applicant6 arranges to establish the 5original6 credit through a bank 5the issuing bank or the opener6 in favor of the seller 5the beneficiary6$

Issue of Back-to-Back !3C<

% back-to-back credit is established 'hen the seller-cu"-original-beneficiary& after receiving the notification about the issue of the original credit& arranges for a second&
BB

stand-alone credit to be established in favor of the 5actual6 supplier or "anufacturer of goods or ra' "aterials$

No for"al connection bet'een the t'o !3C<

:lease be careful to note that there is no legal or for"al connection bet'een the original& !3C and the Back-to-Back Credit$ Each credit stands on its o'n "erit$

Back-to-Back !3C can be opened as a chain<

If there are several "iddle"en 5or any "anufacturers 'ho "ust again procure input "aterials fro" other "anufacturers6& each "ay use the credit in his favor as security for the credit that he has to open in favor of his supplier in the chain of contracts& until first buyer in the chain has effectively opened a credit in favor of original supplier$

9$9$B$0$ :ost Ship"ent 1inance

:ost ship"ent finance is a kind of loan provided by a financial institution to an e+porter or seller against a ship"ent that has already been "ade$ (his type of e+port finance is granted fro" the date of e+tending the credit after ship"ent of the goods to the reali)ation date of the e+porter proceeds$ E+porters donJt 'ait for the i"porter to deposit the funds$ Basic 1eatures< (he features of post-ship"ent finance are< :ost-ship"ent finance is "eant to finance e+port sales receivable after the date of ship"ent of goods to the date of reali)ation of e+ports proceeds$ In cases of dee"ed e+ports& it is e+tended to finance receivable against supplies "ade to designated agencies$ % post-ship"ent finance is provided against evidence of ship"ent of goods or supplies "ade to the i"porter or seller or any other designated agency$ :ost -ship"ent finance can be secured or unsecured$ Since the finance is e+tended
BE

against evidence of e+port ship"ent and bank obtains the docu"ents of title of goods& the finance is nor"ally self-li7uidating$ :ost-ship"ent finance can be of short ter"s or long ter"& depending on the pay"ent ter"s offered by the e+porter to the overseas i"porter$ In case of cash e+ports& the "a+i"u" period allo'ed for reali)ation of e+ports proceeds is si+ "onths fro" the date of ship"ent$ Concessive rate of interest is available for a highest period of #FH days& opening fro" the date of surrender of docu"ents$ *sually& the docu"ents need to be sub"itted 'ithin 0#days fro" the date of ship"ent$ 1inancing for Karious (ypes of E+port BuyerJs Credit< :ost-ship"ent finance can be provided for three types of e+port? :hysical e+ports<

1inance is provided to the actual e+porter or to the e+porter in 'hose na"e the trade docu"ents are transferred$ 2ee"ed e+port<

1inance is provided to the supplier of the goods 'hich are supplied to the designated agencies$ Capital goods and project e+ports<

1inance is so"eti"es e+tended in the na"e of overseas buyer$ (he disbursal of "oney is directly "ade to the do"estic e+porter$ (ypes of :ost Ship"ent 1inance< (he post ship"ent finance can be classified as< #$ 0$ 4$ 9$ E+port Bills purchased3discounted E+port Bills negotiated %dvance against e+port bills sent on collection basis %dvance against e+port on consign"ent basis

BF

A$ B$

%dvance against undra'n balance on e+ports %dvance against clai"s of 2uty 2ra'back

E+port Bills :urchased3 2iscounted< E+port bills 5Non !3C Bills6 is used in ter"s of sale contract3 order "ay be discounted or purchased by the banks$ It is used in indisputable international trade transactions and the proper li"it has to be sanctioned to the e+porter for purchase of e+port bill facility$

E+port Bills Negotiated 5Bill under !3C6< (he risk of pay"ent is less under the !C& as the issuing bank "akes sure the pay"ent$ (he risk is further reduced& if a bank guarantees the pay"ents by confir"ing the !C$ 8o'ever& this arises t'o "ajor risk factors for the banks< i$ (he risk of nonperfor"ance by the e+porter& 'hen he is unable to

"eet his ter"s and conditions$ In this case& the issuing banks do not honor the letter of credit$ ii$ (he bank also faces the docu"entary risk 'here the issuing bank

refuses to honors its co""it"ent$ 3 %dvance against E+port Bills Sent on Collection Basis< Bills can only be sent on collection basis& if the bills dra'n under !C have so"e discrepancies$ So"eti"es e+porter re7uests the bill to be sent on the collection basis& anticipating the strengthening of foreign currency$ Banks "ay allo' advance against these collection bills to an e+porter 'ith a confessional rates of interest depending upon the transit period in case of 2: Bills$

%dvance against E+port on Consign"ents Basis< Bank "ay choose to finance 'hen the goods are e+ported on consign"ent basis at the risk of the e+porter for sale and eventual pay"ent of sale proceeds to hi" by the consignee$ 8o'ever& in this case bank instructs the overseas bank to deliver the
BI

docu"ent only against trust receipt3undertaking to deliver the sale proceeds by specified date& 'hich should be 'ithin the prescribed date$

%dvance against *n-dra'n Balance< It is a very co""on practice in e+port to leave s"all part un-dra'n for pay"ent after adjust"ent due to difference in rates& 'eight& 7uality etc$ Banks do finance against the un-dra'n balance& if un-dra'n balance is in confor"ity 'ith the nor"al level of balance left un-dra'n in the particular line of e+port& subject to a "a+i"u" of #H percent of the e+port value$

%dvance against Clai"s of 2uty 2ra'back< 2uty 2ra'back is a type of discount given to the e+porter in his o'n country$ (his discount is given only& if the in-house cost of production is higher in relation to international price$ (his type of financial support helps the e+porter to fight successfully in the international "arkets$ In such a situation& banks grants advances to e+porters at lo'er rate of interest for a "a+i"u" period of IH days$ (hese are granted only if other types of e+port finance are also e+tended to the e+porter by the sa"e bank$

9$9$E$ @raphical :resentation and 2iscussion of E+port

9$9$E$#$ E+port :erfor"ance of *ttara Bank !i"ited<

(able-< E+port :erfor"ance of *ttara Bank !i"ited $c"ie.eme nt /rom #*!ort (ear 0HHE #*!ort E#FAA

0HHF FA9#F

0HHI FFBA4

0H#H ##FA#A

0H## #A4EAF

Source< https<33'''$uttarabank$bd$co" E+planation< (he graph sho's that the E+port perfor"ance of *B! fro" 0HHF-0H#H$ In this section (M$404A "illion increased fro" 0HHF-0HHI 'ith gro'th rate 4$EFN and
EH

(M$0IFB0 "illion increased fro" 0HHI-0H#H 'ith gro'th rate 44$BFN$ Chart< E+port :erfor"ance of *B! Source< https<33'''$uttarabank$bd$co"

E+planation< (he graph sho's that the E+port perfor"ance of *B! fro" 0HHE-0H##$ In
this section (M$404A "illion increased fro" 0HHF-0HHI 'ith gro'th rate 4$EFN and (M$0IFB0 "illion increased fro" 0HHI-0H#H 'ith gro'th rate 44$BFN$

9$9$E$0$ :erfor"ance of *ttara Bank !i"ited< E+port& (arget ; %chieve"ent< *B! Ne' arket Corporate Branch
(able< :erfor"ance of *ttara Bank !i"ited< E+port& (arget ; %chieve"ent< *B! Ne' Corporate Branch arket

$c"ie.ement against Target0/igure in mi ions1 (ear Target $c"ie.ement 0HHF 09HH 094$B 0HHI #I# 0EB$F# 0H#H 04I 9FF 0H## 90# A9E 0H#05up to Septe"ber6 BA9 4A0

Source< https<33'''$uttarabank$bd$co"
Chart< (arget ; achieve< Ne' arket Corp Branch$

E+planation< (he graph sho's that the a"ount of achieve"ent against target of Ne'
arket Corporate Branch fro" 0HHF-0H#0$ In 0HHF the achieve"ent 'as (M$094$B "illion against target (M 09H "illion$ In 0HHI the achieve"ent 'as (M$0EB$F# "illion against target (M$#I# "illion$ In 0H#H the achieve"ent 'as (M$9FF "illion against target (M$04I"illion and in 0H## the achieve"ent 'as (M$A9E "illion against target (M$90# "illion$ In 0H#05*p to Septe"ber6 the achieve"ent 'as (M$4A0 "illion against target (M$B9A "illion$

9$9$E$4$ Increase or 52ecrease6 of E+port :ercentage 5N6 of *ttara Bank !i"ited& Ne' arket Corporate Branch<

E#

(able< Increase or 52ecrease6 of E+port :ercentage 5N6 of *ttara Bank !i"ited& Ne' arket Corporate Branch< )ncrease or 0Decrease1 o#*!ort ,ercentage 021 During (ear ,ercentage $c"ie.e% Source< http<33'''$uttarabank$bd$co" Chart< Increase or 52ecrease6 of E+port :ercentage 5N6 0H#H EB$0IN 0H## #4N 0H#05up to Septe"ber6 5-64A$B9N

E+planation< (he graph sho's the data of e+port percentage of *ttara Bank
!i"ited& Ne' arket Corporate Branch$ In 0H#H& 0H##& and 0H#05up to Septe"ber6 the percentage 'as respectively EB$0IN$#4N and 5-6 4AN$ But here the percentage in 0H#H 'as higher than the ne+t years& 'hich is bad for the branch$

4.4.2 3he !e#re ion (na"y i

9$9$F$# (he Regression %nalysis on E+port and profit<
(he E+port and profit of *ttara bank are given belo'<(able< E+port and profit of *ttara bank E+port5in "illions6 E#$FAA FA$9#F FF$BA4 ##F$A#A #A4$EAF :rofit G5in "illions6 #$BF# 4$#9A 0$IF0 9$IHE 9$99A

Source< https<33'''$uttarabank$bd$co" 1or analysis facility 'e solve the follo'ing 7uestion 'hich is<Re7$#$ 1ind the regression e7uation of profit on e+port Re7$0$ Calculation co-efficient of co-relation$ Re7$4$ 1ind the e+planatory po'er of the independent variable$ 5Coefficient of deter"ination6
E0

Re7$9$ If the i"port is increases by (k$ #AHHH "illion& 'hat 'ill be the figure of the profit level$ Re7$A$ Interpretation the result of the above four re7uire"ent

Solution<
!et us& E+port 5Independent variable6 W Q? :rofit 5dependent variable6 W G Re7$ #< Regression e7uation of profit on E+port GWaZb+ W4$#H4HF#ZH$HH4HQ [>here& aW4$#H4HF#; bW H$HH4H\ --- %ppendices part A& :age no-IB\

Re7$0< Correlation on Coefficient W r RWH$HHAI Re7$4< Coefficient of 2eter"ination5r6 RW 5H$4AIE6 WH$HHHH4A Re7$9< If E+port is QW#AHHH"n$ G W4$#H4HF#ZH$HH4HQ W4$#H4HF#ZH$HH4H]#AHHH W9F$#H4HF#"n$ Re7$A$ Interpretation< Re7$#< If the e+port is increased by (k$#& :rofit 'ill be increased by (k$ H$HH4H Re7$0< (here is very lo' degree of positive relationship bet'een i"port and profit$ %s the value of I"port goes up& the profit also goes up$ Re7$4< Coefficient of 2eter"ination H$HHHH4A"eans that i"port level can be deter"ined by H$HH4AN profit$ %s the value of e+port goes up& the profit also goes up$ Re7$9< If the e+port level is (k$ #AHHH "illion than the profit level 'ill be (k$ 9F$#H4HF# "illion$
E4

Co""ents< 8ere the value of a is constant and the value of b is slope$ (he positive value
of b "eans positive slope and the negative value of b "eans negative slope$ 1ro" the above graph 'e see that the bank increases e+port day by day$ So& 'e can say that e+port position is satisfactory 5appendices part< #& :age no IH6$

Chapter-9$A
4.5.1 4.5. 2 4.5. 3 4.5. 4 4.5. 5 4.5. 6 4.5. 7 4.5. 2 4.5. F
Meanin# of !e%ittance 1oreign Re"ittance Re"ittance Services in *ttara Bank li"ited (ypes of Re"ittance Re"ittance "arket in Bangladesh :roble"s3Roadblocks in Current Re"ittance :rocess 8elp 2esk Related to 1oreign Re"ittance :roble" Steps (aken for Re"ittance :rocess I"prove"ent @raphical :resentation and 2iscussion of 1oreign Re"ittance

4.5. 18 Regression %nalysis

E9

Re"ittance Section

4.5. 1. Meanin# of !e%ittance

(he 'ord .Re"ittance/ originates fro" the 'ord .re"it/ 'hich "eans to trans"it "oney$ In banking ter"inology the 'ork .re"ittance "eans transfer of fund one place to

EA

another$ >hen "oney transferred fro" one country to another is called .1oreign Re"ittance$/

4.5. 2. 6orei#n !e%ittance

(he basic function of this depart"ent are out'ard and in'ard re"ittance of foreign e+change fro" one country to another country$ In the process of providing this re"ittance services? it sells and buys foreign currency$ (he conversion of one currency into another takes place at an agreed rate of e+change in 'here the banker 7uotes& one for buying and another for selling$ In such transactions the foreign currencies are like any other co""odities offered for sales and purchase& the cost 5convention value6 being paid by the buyer in ho"e currency& the legal tender$

4.5. 3. !e%ittance Service in 1ttara )an/ "i%ited

%s *ttara Bank li"ited has a 'ide net'ork operates FE4 branches in national and international territory& re"ittance services are available at all branches and foreign re"ittances "ay be sent to any branch by the re"itters favoring their beneficiaries$ *ttara Bank !i"ited has correspondent banking relationship 'ith all "ajor banks ; e+change houses located in al"ost all the cities$ E+patriate Bangladeshis "ay send their hard earned foreign currencies through those banks ; e+change houses or "ay contact any reno'ned banks nearby 5'here they reside3'ork6 to send their "oney to their dear ones in Bangladesh$ Recently *ttara Bank !td$ has launched its Speedy 1oreign Re"ittance :ay"ent Syste" 'hich enables beneficiaries to receive their "oney 'ithin shortest possible ti"e$ (he beneficiary also gets infor"ation of re"ittance through auto"ated S S$ ItCs a secured& easy& cost effective and speedy 'ay of re"ittance for the re"itter$

*ttara bank !td$ has signed an agree"ent 'ith >estern *nion Net'ork to facilitate 'ide range of re"ittance of the globe$ Both the organi)ations "ake it possible to receive the "oney fro" about 4HH&HHH locations of 0HH countries instantly 'ith prevailing "utual "echanis" and 'orkforce$

EB

9$A$ 4$#$ *ttara Bank !td deals 'ith foreign re"ittance activities on behalf other "oney transfer co"pany<
*ttara bank !td$ has signed an agree"ent 'ith< >estern *nion Net'ork I E Spot Cash :lacid E+press Spot Cash Qpress "oney etc$

9$A$ 9$#$ In'ard Re"ittances<

(he ter" in'ard re"ittances includes not only re"ittances by (($& ($& 2rafts etc$ but

also purchases of bills& purchases of drafts under travelers letter of credit and purchases of travelers che7ues$ 1oreign currency notes against 'hich pay"ent is "ade to the beneficiary also a part of in'ard re"ittances$ (hus the follo'ing are the re"ittances< odes of In'ard Re"ittance< #$ 0$ 4$ 9$ A$ #$ 2e"and 2raft 5226 < (his is an instru"ent through 'hich custo"ers "oney is re"itted to another person31ir"3organi)ation in outstation 5outside the clearing house area6 for" a branch of one Bank to an outstation branch of the sa"e Bank or to a branch of another Bank 5'ith prior arrange"ent bet'een that Bank 'ith the issuing branch6$
EE

odes of in'ard

2e"and 2raft 5226 ail (ransfers 5 :ay Order 5:O6 (ravelers Che7ue 5 (C6 (6 (elegraphic (ransfer 5((6

0$

ail (ransfers 5 (6< ail (ransfer is an instru"ent issued by a re"itting bank to the paying bank

advising in 'riting to "ake pay"ent of certain a"ount to specific beneficiary$ 4$ (elegraphic (ransfer 5((6< % (elegraphic (ransfer is a "ethod of re"ittance& 'hich is effected by the banker through a coded telegra" attested by secret cheek signal& on receipt of 'hich& the paying office pay the a"ount to the payee by crediting his account$ 9$ :ay Order 5:O6< % pay order is a 'ritten under& issued by a branch of the Bank& to pay a certain su" of "oney to a specific person or a bank$ It "ay be said as to be a bankerJs che7ue as it is issued by a bank and payable by itself$

A$ (ravelers Che7ue 5(C6< It is an instru"ent issued by the Banks3Co"panyCs payable to the purchaser on presentation$

9$A$ 9$0$ Out'ard Re"ittance<

Re"ittance fro" our country to foreign countries is called out'ard foreign re"ittance$ But Out'ard 1oreign Re"ittance is highly restricted by the Bangladesh @overn"ent$ Only so"e especial branches can send "oney fro" Bangladesh to abroad under Bangladesh BankCs rolls ; regulation$ In *ttara Bank !td$ follo'ing branches are only responsible and involve 'ith out'ard foreign re"ittance activities< !ocal Office 2haka$ 1oreign E+change Branch& Bitul- ukara" 2haka$ *ttara Bovon Corporate 2haka

ode of out'ard re"ittance<

(hus the follo'ing are the "odel of out'ard re"ittance< 2e"and 2raft 5226 ail (ransfers 5 (6

EF

(elegraphic (ransfer 5((6 :ay Order 5:O6 (ravelers Che7ue 5 (C6

1oreign currency notes$

9$A$ A$ Re"ittance

arket in Bangladesh

(he re"ittance "arket of Bangladesh has been sho'ing a steady gro'th in ter"s of inco"ing re"ittance volu"e$ Considering the current "acro-econo"ic indicators it see"s that this gro'th run 'ill continue in the co"ing years$ Central Bank predicts that our annual inco"ing foreign re"ittance 'ill touch L#H billion in the ne+t 4 years$ (he reasons for such robust gro'th can be su""ari)ed as< share %ggressive "arketing policy adopted by Banks to increase their E+pansion of branch net'ork of various co""ercial banks 1Is involve"ent in channeling re"ittance funds in re"ote areas :articipation in the *N peace keeping "issions %nti- oney !aundering rules and regulations ca"e in force Stable "acro-econo"ic indicators including @2: gro'th& Steady gro'th in "anpo'er e+port specially in the "iddle east Substantial devaluation of the local currency Rapid urbani)ation 2evelop"ent of ne' re"ittance corridors in %ustralia and part of

Europe and %frica Increased focus of Central Bank and the @overn"ent to channel Increased co"petition a"ong financial institution to grab "arket

funds through nor"al channels

share of 'allet

9$A$ B$ :roble"s 3Roadblocks in Current Re"ittance :rocess

(he "ajor roadblocks of a s"ooth and efficient pay"ent of foreign re"ittances are as follo's<
EI

:oor infrastructure in rural and se"i-urban econo"y Inade7uate reach of private co""ercial banks 'ithin the country assive infor"ation asy""etry in the "arket %ctive -8undiC "arket Inefficiency of financial institutions :oorly regulated e+change houses !o' literacy rate in the country

A$ A$ E$ 8elp 2esk Related to 1oreign Re"ittance :roble"

*ttara Bank !i"ited being the 0nd largest co""ercial bank in the country in respect of its various develop"ent$V(o resolve the foreign re"ittance related proble"3co"plain3en7uiry& *ttara Bank !i"ited has a JCo"plain cellJ at its Overseas Banking 2ivision& 8ead Office& 2haka$ %ll Concerned are re7uested to contact at the follo'ing address to resolve any proble" related to foreign Re"ittance$

9$A$ F$ Steps (aken for Re"ittance :rocess I"prove"ent

@overn"ent as 'ell as private sector has undertaken various strategies to "ake re"ittance transfer easier and hassle free$ No'& the Nationali)ed Co""ercial Banks 5NCBs6 have so"e overseas branches3re"ittance 'ings for transferring re"ittances successfully$ Recently& illegal transfer of "oney slid do'n drastically& as Bangladesh Bank 5BB6 has stepped up "onitoring of such transactions at ho"e$ BB so far gave license to BBH e+change houses to set up offices abroad to facilitate re"ittance$ !ocal banks are no' able to deliver "oney to recipients$

4.5. F. @raphica" $re entation and 4i cu ion of 6orei#n !e%ittance

9$A$ I$#$ 1oreign Re"ittance perfor"ance of *ttara Bank !i"ited<
(able< 1oreign Re"ittance perfor"ance of *B! $c"ie.eme nt -rom +emittance (ear 0HHE 0HHF 0HHI 0H#H 0H##

FH

+emittance

4BEFF

9AI09

AB#IH

A0B9H

E00F9

Source< https<33'''$uttarabankChart-#0< 1oreign Re"ittance of *B! Sourse< https<33'''$uttarabank$bd$co"

E+planation< (he graph sho's that the foreign re"ittance perfor"ance of *ttara Bank
!i"ited fro" 0HHE-0H##$ In this section (M$#H0BB "illion increased fro" 0HHF-0HHI 'ith a gro'th rate of 00$4AN and (M$44AH "illion decreased fro" 0HHI-0H#H 'ith a negative gro'th rate of 5-6 B$40N$ %nd #IB99 "illion increased fro" 0H#H-0H##& and the gro'th rate is 4E$40N$So it is a positive gro'th rate for the *ttara Bank !i"ited$

9$A$I$0$ 1oreign Re"ittance perfor"ance of *ttara Bank !i"ited Ne' Corporate Branch<
(able< 1oreign Re"ittance perfor"ance of *B! Ne' $c"ie.ement against Target0/igure in mi ion in T31 (ear Target 0HHF 044 0HHI 4FA$E0 0H#H 99B 0H## #IH$4A 0H#05up to Septe"ber6 #I4 #9A arket Corporate Branch arket Corporate Branch

arket

$c"ie. 400$B4 AB9$A4 9I0 #BB$4A ement Chart-< 1oreign Re"ittance perfor"ance of *B! Ne' Source< https<33'''$uttarabank$bd$co"

E+planation< (he graph sho's that the a"ount of achieve"ent against target in foreign
re"ittance of Ne' arket Corporate Branch fro" 0HHF-0H#0$ In 0HHF the achieve"ent 0H#H the achieve"ent 'as
F#

'as (M$ 400$B4 "illion against target (M$044 "illion$ In 0HHI the achieve"ent 'as (M$AB9$A4"illion against target (M$4FA$E0 "illion$ In

(M$9I0 "illion against target (M$99B "illion and in 0H## the achieve"ent 'as (M$#BB$4A "illion against target (M$#IH$4A"illion$So It 'as less fro" the previous years and in 0H#05up to Septe"ber6 achieve"ent 'as #9A 'hereas the target 'as #I4 "illion$

9$A$ I$4$ Increase or 52ecrease6 of 1oreign Re"ittance :ercentage 5N6 of *B!& Ne' arket Branch<
(able-< Increase or 52ecrease6 of 1oreign Re"ittance :ercentage 5N6 of *B!& Ne'

arket Branch
)ncrease or 0Decrease1 ,ercentage 021During (ear 0H#H 0H## 5-6BB$#FN 0H#05up to Septe"ber6 5-6#0$F4N

,ercentage 5-6#0$FAN Source< https<33'''$uttarabank$bd$co" Chart< 1oreign Re"ittance :ercentage

E+planation< (he graph sho's the data of foreign re"ittance percentage of *B!&
Ne' arket Branch$ In 0H#H& 0H##& and 0H#0 the percentage 'as respectively 5-6 #0$FAN& 5-6 BB$#FN& and 5-6 #0$F4N$ So it is decreasing in every year but it fulfilled its target achieve"ent for every year 'hich is good for the branch$

4.5. 18. 3he !e#re ion (na"y i

(he Regression %nalysis on re"ittance and profit<
(he re"ittance and profit of *ttara bank are given belo'< Re"ittance 5in "illionHHH6 4B$EI 9A$I0 AB$#I A0$B9 E0$0F :rofit G5in "illionHHH6 #$BF# 4$#9A 0$IF0 9$IHE 9$99A

(able< Re"ittance and :rofit of *ttara Bank !i"ited 1or analysis facility 'e solve the follo'ing 7uestion 'hich is<F0

Re7$#$1ind the regression e7uation of profit on re"ittance Re7$0$ Calculation co-efficient of co-relation$ Re7$4$ 1ind the e+planatory po'er of the independent variable$ 5Coefficient of deter"ination6 Re7$9$ If the re"ittance is increases by (k$ 0HHHH "illion 'hat 'ill be the figure of the profit level$ Re7$A$ Interpretation of result the above four re7uire"ent

Solution<
!et us& Re"ittance 5Independent variable6 W Q? :rofit 5dependent variable6 W G Re7$#< Regression e7uation of profit on Re"ittance GWaZb+ W4$0#FHZ$HH9#Q ['here& aW 4$0#FH ; bW $HH9#\ ,appen$ :age no ,II Re7$0< Correlation on Coefficient 5 r6W$H#HA Re7$4< Coefficient of 2eter"ination5r6 RW 5$H#HA6 W $HHH## Re7$9< If Re"ittance is QW0HHHH "illion G W4$0#FHZ$HH9#Q W4$0#FHZ$HH9#]0HHHH WFA$0#F"n$

Re7$A$ Interpretation Re7$#< If the Re"ittance is increased by (k$ # :rofit 'ill be increased by (k$ H$HH9#$ Re7$0< (here is very lo' degree of positive relationship bet'een re"ittance and profit$ %s the value of re"ittance goes up& the profit also goes up$ Re7$4< Re"ittance 'ill not deter"ine the profit because in case of Re"ittance coefficient of deter"ination is H$HHH#$

F4

Re7$9< If the Re"ittance level is (k$ 0HHHH "illion than the profit level 'ill be (k$ FA$0#F "illion$

Co""ents< 8ere the value of a is constant and the value of b is slope$ (he positive
value of b "eans positive slope and the negative value of b "eans negative slope$ 1ro" the above graph 'e see that the bank increases e+port day by day$ So& 'e can say that re"ittance 'as less than actual in 0HHF and 0HHI but in 0H#H it is increasing day by day 'hich position is satisfactory$

Chapter-A

!earning

F9

(he role of friend& philosopher& and guide for the deposit holders and the entrepreneurs$ 1oreign E+change "eans the e+change of currency in ter"s of goods includes all deposits& credits& balance payable& drafts& ($Cs& bill of e+change& !3C etc fro" one country to another$ (his is the "ost 'ell-kno'n and 'ell-organi)ed business unifor" in 'orld business$ %ll foreign e+change transactions in Bangladesh are subject to e+change control regulation of Bangladesh Bank$ %"ong all depart"ents 1oreign E+change depart"ents of *ttara Bank !td are one of the "ost i"portant$ (he Bank is providing e+cellent services to the clientele in foreign e+change and foreign trade operations through the above foreign correspondents$ 1oreign E+change Business plays a vital role in providing substantial revenue on the bank inco"e pool$

Opening letter of credit against co""ission for i"porting industrial agricultural Opening letter of credit on the principle of sale& on the principle of under 'age

and other per"issible ite"s under council board$

earner sche"e$

FA

8andling of e+port 3i"port docu"ent$ Negotiation of e+port and i"port docu"ent 'hen discrepancy occurs$ 1inancing i"port under i"port board$ 1inancing to e+port on profit or loss sharing 8andling in'ard and out'ard re"ittance (o facilitate the transferring of fund fro" the surplus unit to deficit unit$ (o accelerate the savings$ (o accelerate the invest"ent$ (o enhance the econo"ies develop"ent$ (o facilitate the trades and co""erceCs$

Chapter-B
1indings and %nalysis

FB

6.1 6.2 6.3

(na"y i re"ated 'ith 3opic S>O( %nalysis 1indings ; discussion

B$# %nalysis related 'ith topic

6.1.1 .o%pari on and $erfor%ance eva"uation of 1ttara )an/ &i%ited (he study is an atte"pt to the in-depth analysis of *ttara Bank !td that helps to identify the real scenario of the bank and finally "akes a reco""endation and conclusion as 'ell on the basis of different di"ension$

Co"parison 'ith NCC Bank !i"ited and Brac Bank !i"ited<

In this section I 'ould like to co"pare *ttara Bank !td 'ith t'o other reno'ned public banks NCC Bank !td and Rupali bank !i"ited to "easure the profit perfor"ance$ Co"parisons are given belo'< B$#$#$# Co"parison of :rofit :erfor"ance of *ttara& NCC& Brac and IBB! Bank !td< Na"e of the Bank *ttara Bank Brac Bank Gear 0H## E00H I#0 0H#0 FHFH #H#4 #H#0

NCC Bank FEH (able< :rofit :erfor"ance of *ttara& NCC& Brac Source< https<33'''$uttarabank$bd$co" (able- :rofit :erfor"ance of *ttara& NCC& Brac in :ercentage Name o- 4an5s 6ttara 4an5 4rac 4an5

)ncrease or 0Decrease1 ,ro-it !ercentage 021 11.F8G 11.87G

FE

NCC 4an5 Chart< Co"parison of profit perfor"ance of the above Banks Source< https<33'''$uttarabank$bd$co"

16.32G

E+planation< 1ro" the above graph 'e see that the profit perfor"ance of *ttara Bank
!td& NCC Bank !td and Brac Bank !td$ %"ong the three banks *B! highest profit in 0H## ; 0H#0$ It is a positive sign for *ttara Bank !i"ited$ achieved the

6.1.2. Increa e or 54ecrea e7 of profit percenta#e fro% 2811<2812 of 1ttara9 ;.. and )rac )an/ &i%ited: E+planation< (he graph above sho's that the profit percentage of the three banks
fro" 0H##-0H#0$ (he gro'th of *B! 'as ##$IHN Brac Bank !td 'as ##$HEN and NCC Bank !td 'as #B$40N$ %"ong the" *B! secured second position$

6.1.1 )hu"ta )ranch

(able< (otal Inco"e& E+penditure and :rofit :erfor"ance of *B!& Ne' Corporate Branch ;e' Mar/et .orporate )ranch $articu"ar 3ota" Inco%e &e *+penditure 0HHI B#$9B 9#$A# #I$IA 0H#H FE$F AI$4 0F$A 0H## #A9$E #4#$# 04$B 0H#0 0FH$E 04F$0I 90$9# arket

$rofit

Source< https<33'''$uttarabank$bd$co" Chart< (otal Inco"e& E+penditure and :rofit :erfor"ance of *B!& Ne' arket Branch

E+planation< (he graph sho's that the total inco"e& e+penditure and profit perfor"ance
of *B!& Ne' arket Corporate Branch fro" 0HHI-0H#0$ (he branch "ade profit each and every year but in 0H## it achieved 04$B "illion 'hich is lo'er fro" the previous years$ But in 0H#05up to Septe"ber6 the profit is increasing gradually$ (hat is the big advance"ent for Ne' arket Corporate Branch$

FF

B$#$4 Increase or 52ecrease6 of :rofit :ercentage 5N6 of *B! & Ne' Corporate Branch<
(able< Increase or 52ecrease6 of :rofit :ercentage 5N6 of *B!& Ne' Corporate Branch Increase or 52ecrease6 of :rofit :ercentage 5N6 2uring arket

arket

Gear :ercentage %chieved

0H#H

0H##

0H#05up to Septe"ber6

94N

5-6#EN

EI$EHN

Source< https<33'''$uttarabank$bd$co" Chart< Increase or 52ecrease6 of :rofit :ercentage

E+planation< 1ro" the graph 'e see the data of profit percentage of *B! & Ne'
arket Corporate Branch in 0H#H& 0H## and 0H#0$ (he percentage 'as respectively 94N& -#EN& and EI$EHN$ In 0H## the profit percentage of the branch 'as negative co"pared to 0H#H but in 0H#0 the branch ca"e back fro" the circle of failure and has "ade a tre"endous success$

6.1.4. I%port $erfor%ance of 1)& .o%pare to ;ationa" I%port

(able-< I"port :erfor"ance of *B! Co"pare to National I"port

(ear 2008

)m!ort o- 64L 9AI0H

Nationa )m!ort B#B9HH

FI

2009 2010 2011 2012

AB#IH A0B9H E00FH BB99H

E4FEHH EB4#HH IH4EHH F9AIHH

Source< https<33'''$uttarabank$bd$co"
Chart< I"port :erfor"ance of *B! Co"pare to National I"port

E+planation< (he graph presents the data of national i"port as 'ell as i"port of
*B! $ In 0HHF the national i"port 'as (M$B#B9HH "illion 'hereas the i"port 'as (M$9AI0H "illion$ In 0HHI the national i"port 'as (M$E4FEHH "illion 'hereas the i"port 'as (M$AB#IH "illion$ In 0H#H the national i"port 'as (M$EB4#HH "illion 'hereas the i"port 'as (M$A0B9H "illion and 0H## the national i"port 'as (M$IH4EHH "illion 'hereas the i"port 'as (M$E00FH "illion$ %nd in 0H#0 the national i"port 'as F9AIHH and the *B! i"port 'as BB99H$

6.1.5. 6orei#n !e%ittance $erfor%ance of 1)& .o%pare to ;ationa" 6orei#n !e%ittance

(able< 1oreign Re"ittance :erfor"ance of *B! Co"pare to National 1oreign Re"ittance Bear 2882 ;ationa" B#B990 1)& 9AI09 AB#IH A0B9H E00FA .ontribution E$99N E$BHN B$IIN E$IIN

288F E4FEE4 2818 EB4#49 2811 IH4E4F Source< https<33'''$uttarabank$bd$co"

Chart< Contribution of *B! in National 1oreign Re"ittance

E+planation< (he graph presents the data of national re"ittance as 'ell as re"ittance
of *B!$ In 0HHF the national re"ittance 'as (M$B#B990 "illion 'hereas the re"ittance 'as (M$9AI09 "illion$ In 0HHI the national re"ittance 'as (M$E4FEE4 "illion 'hereas the re"ittance 'as (M$AB#IH "illion& 0H#H the national re"ittance 'as (M$EB4#49 "illion 'hereas the re"ittance 'as (M$A0B9H "illion and the

IH

0H## the national re"ittance 'as IH4E4F 'hereas the re"ittance of *B! 'as E00FA$

B$#$B Contribution :ercentage of *B! in National 1oreign Re"ittance<

(able-< Contribution :ercentage of *B! in National 1oreign Re"ittance .ontribution 2882 288F 2818 2811 E$IIN

$ercenta#e E$99N E$BHN B$IIN Chart< Contribution :ercentage of *B! in National 1oreign Re"ittance

E+planation< (he graph sho's the data of percentage contribution of *B! to national
foreign re"ittance$ In 0HHF& 0HHI&0H#Hand 0H## the percentage 'as respectively E$99N& E$BHN& B$IIN$and E$IIN But here the percentage of 0H#H 'as lo'est a"ong the previous years& 'hich is bad for *ttara Bank !i"ited$

6.1.7. Shortco%in# of 1)& fro% %y ?ie'point

(he bank has "any "ore positive sides$ Besides this& there are also so"e shortco"ings and subse7uently reco""endations are given belo' to s"ooth the banking operation$ 1ollo'ings are the shortco"ings< !ack of odern Banking facilities

%bsence of On-line Banking Services !ack of :ro"otional %ctivities %bsence of Infor"ation Booth !ack of Spread out Insufficient %( echanis" :oor >eb site

Booth

!ack of S"art Cards 1acilities 2elay in service :oor Custo"er relationship (raining :rogra" !ack of Efficient anpo'er IS

%bsence of %dvanced

!ack of Innovative Banking :roducts 1oreign E+change Operations is not updated

I#

!i7uidity Invest"ent Sector

6.2 S=O3 (;(&BSIS

S>O( analysis is very helpful to "easure and evaluate a stated objective 'ithin a very short ti"e$ 8ence this approach has been adopted in this paper$ %fter "onitoring closely and 'orking proactively in the overall banking especially in 1oreign E+change 2epart"ent of *ttara Bank !td$ follo'ing Strength& >eakness& Opportunity and (hreat has been found<

Strengths<
Second largest bank of the country$ Strong financial position and sustainable gro'th$ !argest portfolio a"ong public banks$ >ide net'ork of FE0 branches including four overseas branches$

8ealthy correspondent relationships 'ith foreign banks$ :rovide a record business in international trade and re"ittance 8old a sound reputation in the banking industries$ >ell-connected distribution channel fro" head office to all branches$ e"bership 'ith S>I1( %ccording to the C% E!S rating *ttara Bank !td$ is one of the top anage"ent& Earnings& !i7uidity and Sensitivity to "arket Risk of

public banks of Bangladesh$ (his rating is based on Capital %de7uacy& %sset Yuality& ranking$ Sound I"port and E+port operation$
I0

the bank$ Bangladesh Bank "onitors these para"eters and publishes the

Speedy 1oreign Re"ittance :ay"ent Syste"$ Recently *ttara Bank !td$ has gone through an agree"ent 'ith >estern oney (ransfer to provide 7uick and "ore authentic re"ittance service

*nion

to its clients$ 8R2 has tried hard to avoid co""unication barriers ; structural *B! also has anage"ent by Objectives 5 BO6 every'here$ bureaucracies$

Energetic as 'ell as s"art tea" 'ork$ Relentless in pursuit of business innovation and i"prove"ent$ It has a

reputation as a partner of consu"er gro'th$

>eaknesses<
In 1oreign E+change 2ivision the bank still uses lots of register for "aintaining its foreign e+change transactions$ It is ti"e consu"ing and there are lots of chances for "aking "istakes$ !ack of for"al pro"otional activity in this sector$ 1oreign e+change operations of *B! are less dyna"ic$ (he i"portant thing is that the bank has no clear strategic plan$ (he path of the future should be deter"ined 'ith a strong feasible strategic plan$ S"art Cards are one of the "ost popular and e"erging products in Bangladesh& 'hich offers custo"ers total financial "obility$ (here is no custo"er co"plain desk in the Bank$ It is not only i"portant part of the foreign e+change activities but also for other depart"ents of the Bank$ Shortage of trained "anpo'er and logistic support$ It is noted that .delay in service/ is one of the proble"s faced by the clients$

Opportunitie :
(he bank 'ill co"e under co"plete co"puteri)ation very soon$ (he bank is going to launch ne' soft'are to run banking transactions faster and s"ooth$ (he bank tries to cope 'ith the ne'er trends of foreign e+change as soon as possible$
I4

*ttara Bank !i"ited should approach "ore attractive facilities 'ith clear E+panding the areas of loan disburse"ent$ In order to reduce the business risk& *ttara Bank !i"ited has to e+pand Business e+pansions in the capital "arket Online banking should be introduced fluently in all branches to *ttara Bank !i"ited should intensify personal banking in order to attract Ne' invest"ent sector is boo"ing rapidly$ *ttara Bank !i"ited should

go ahead$

their business portfolio$

co"pete 'ith "ultinational banks$ foreign 'age earners "aking in'ard re"ittance through *ttara Bank !i"ited$ identified those untapped areas of business and invest in those sector as @as plant& ship breaking etc$

3hreat :
*pco"ing banks$ Overall li7uidity crisis in "oney "arket$ 1re7uent fluctuation of do"estic currency 'orth against *S 2ollar$ (he la's and custo"s related to the foreign e+change are changing very %s countryCs e+port is R @ sector depended& reduce in R @ e+port has :olitical crisis and decaying country i"age as e+porter$

rapidly$ affected foreign e+change depart"ent of the Bank$

(he scenario of International Business is 7uite dyna"ic$ Ne'er trends are taking place ti"e to ti"e$ (his "ay create a tension bet'een e+portersi"porters and the bankers$

I9

6.6. 6indin# : di cu ion

1)& has not yet provided "odern and advanced banking service all over the country$ >hile co"petitors are e+panding their operation 'ith a 'ide range of technology& *B! is providing the banking service on a traditional basis$ Even the bank has not yet introduced the online banking services$ Custo"ers are not getting the opportunity of using %( to deposit ; 'ithdra' "oney$ %s a result& the services like 09 hours banking stands out of reach$ Internal control syste" of the bank is not 7uit satisfactory$ (he depart"ent fre7uently 'ork or are called to 'ork in

e"ployees of one

another depart"ent$ Even& so"eti"es they are seen to change their tables to 'ork in other tables$ But they are not actually responsible to do the task of others$ Conse7uently& they bla"e another e"ployee 'hen any proble" e+ists$ Besides& fourth class e"ployees are seen to prepare so"e vouchers of charges account for entertain"ent& stationary ite"s& conveyance etc$ for 'hich they 'ere sent outside$ %s a result& it is obvious to create fraud and error$ Co"pleteness of daily records is so"eti"es dependent on the 'illingness of the e"ployees$ E"ployee behavior 'ith the custo"er so"eti"es reaches out of acceptance$ In every

'eek& it is obvious that so"e custo"ers are raising their voice loudly for "isunderstanding 'ith so"e e"ployees or such event occurs because of "aking delay to provide services$
IA

(he bank is only focusing on so"e co""on analysis of its financial state"ent like price earnings ratio& advance deposit ratio& return on assets& return on e7uity etc$ But& "aking strategies focusing on so"e fe' analyses is not enough in the present "arket place$ (he bank is operating in Bangladesh for about 9A years since its origin$ So& it had theoppo rtunity to establish its i"age as a star$ 8R practice of the bank allo's recruiting so"e of the e"ployees 'ho are not so"eti"es fit for the organi)ation$ E"ployees are not properly trained to speak in for"al language ;hence so"e of the" forget that they are in the office 'hile speaking$ So"e e"ployees in each of the branches are e"ployed in the accounting depart"ent but they have not the background of accounting$ %s a result& their basic kno'ledge is not that "uch strong in the relevant areas though they can solve all of their proble"s because of training$ (he study of *((%R% Bank !td foreign e+change activities about the bank=(he bank is perfor"ing in the botto"-line co"pared to its co"petitors =(hey havenCt developed any %( for custo"ers dissatisfactions to the bank =1oreign re"ittance inflo's ; outflo's are very poor co"pared to other selected banks =(he bank has biasness in 8R2 'hich un'elco"e fe"ale 'orkforce in the bank =(he e"ployees of the bank lack of skills ; e+cellence because of recruiting syste"s instability ; lack of transparency =(he soft'are that the bank is using is very unsophisticated ; ha"pers operations very often =(he bank nor"ally target the lo'er seg"ent of the "arket ; those 'ho are not used to sophisticated banking service because of illiteracy =(he bank is heavily depended on deposit sche"es for doing business =(he I( infrastructure is not satisfactory? they donCt have a usable 'ebsite =In foreign e+change depart"ent it is re7uired to co""unicate 'ith foreign banks fre7uently and 7uickly$ (o "ake the process easy "ode" co""unication "edia for e+a"ple e-"ail& 1a+ and 'in fa+& Internet etc$ should be used "ore fre7uently$ But the bank doesnCt have "ass use of his "ediu" of co""unication$ ; online services 'hich is the "ain reason has revealed the follo'ing

IB

=I n s o " e c a s e s t h e n u " b e r o f e " p l o y e e e n g a g e d i n r e n d e r i n g s p e c i f i c s e r v i c e s i s insufficient$ =E"ployees are e+posed to custo"er e+cessively 'hich is an obstacle in syste"atic and pro"pt service$

Chapter-E
Reco""endation and Conclusion
7.1 7.2 !eco%%endation Conclusion %ppendi+ References

IE

7.1. !eco%%endation

%pply

odern Banking Syste"<

Co"puteri)ed banking syste" and latest co""unication device are the "ost i"portant ele"ents for banking sector$ So& for the sound and stable banking operation especially foreign e+change operations& *ttara Bank !i"ited has no alternatives but the "oderni)ation$

:rovide On-line Banking Services<

(he bank should go for "ass on-line banking to "eet the de"and of the ne+t century$

2ecorate >orking Environ"ent< Enhance :ro"otional %ctivities<

Interior decoration should be introduced for clientCs co"fort$

(he "anage"ent should give "ore e"phasis on the advertise"ent of the bank about their operations$

Set up Infor"ation Booth<

(he bank should set up 7uery desk3infor"ation booth for better custo"er services$

Spread out

echanis"<

(he spread out "echanis" of the bank should be faster and progressive as 'ell$
IF

2evelop >eb site of the Bank<

(he 'eb-site of *ttara Bank !i"ited is not updated$ Only a fe' nu"ber of infor"ation are given in the site but so"e necessary infor"ation should be given their such as& ho' to open an account& 'hat are the interest rates of different accounts& infor"ation about different products and services$

!aunching %(
launching "ore %(

Booth<
booth$

(o survive in the cut throat co"petition& *ttara Bank !i"ited "ust step into

Introduce S"art Cards<

*ttara Bank !i"ited should offer international credit card& because in "odern 'orld the use of increasing paper currencies is decreasing$

2eliver 1aster Service<

It is noted that .delay in service/ is one of the proble"s faced by the clients$ %tte"pts should be "ade to straighten the banking procedure$

I"prove"ent of 8R

2epart"ent<

8u"an resource is another sector for the 1oreign E+change depart"ent to be developed urgently$ (his depart"ent needs to be e7uipped 'ith ade7uate co"puter based skilled person& so that they can 'ork faster and efficiency can be opti"i)ed$

Recruit"ent of Efficient

anpo'er<

Efficient "anpo'er should be recruited 'ith having strong acade"ic background of the related subjects$

%rrange (raining :rogra"<

(he bank should try to arrange "ore training progra"s for their officials$ Yuality training 'ill help the officials to enrich the" 'ith "ore recent kno'ledge of International (rade 1inancing$

Introduce %dvanced

IS<
IS to "obili)e its day to day activities$ It

Bank can introduce "ore advanced "aintaining their 7uality of 'ork$

'ill help the e"ployees to do their 'orks "ore 7uickly and at the sa"e ti"e

Clear

ission and Kision<

II

E"ployees should be properly learnt about the "ission and vision of *B!& thus 'ill i"ple"ent their job in that 'ay$

Enhance"ent of Re"uneration<

:roper incentive syste" should be introduced to "otivate bank e"ployees for rendering better services$

Offer Karious Banking :roducts<

ore products of varied interests should be introduced for the diversified client

group$

Steps to Recover 2efault !oans<

Effective and efficient initiatives are necessary to recover the default loans$
Incentives :ackage for E+porter<

%ttractive incentive packages for the e+porter 'ill help to increase the e+port

and accordingly it 'ill di"inish the balance of pay"ent gap of *B!$

:rovide *pdated foreign "arket Infor"ation<

Bank should provide foreign "arket reports up to date& 'hich 'ill enable the e+porter to evaluate the de"and for their products in foreign countries$

I"prove 1oreign E+change Operations<

1oreign e+change operations of the bank are less dyna"ic and "ore ti"e consu"ing$ So& *B! should take so"e initiative to re"ove the obstacles$

Enhance the Net'ork of :ersonal Banking<

*ttara Bank !i"ited should e+plore the possibility of 'idening its personal banking net'ork in other countries to tap the in'ard re"ittance co"ing fro" those countries especially in co"e to Bangladesh in plenty$

iddle East countries 'here fro" in'ard re"ittances

!aunch

ore Branches<

(he bank can open "ore branches to reach to "ore custo"ers$

Enhance !i7uidity<

1or security of loan and advances *B! should priority for "ovable and li7uid assets$

Observe Borro'erCs financial condition<

(he Bank should carefully observe the financial condition and repay"ent history of the borro'er$

Involve"ent of Karious Social :rogra"s<

#HH

(o enhance the i"age of the bank through social responsibility& the bank should engage itself to various social progra"s like scholarship to poor but "eritorious students& Ca"paign against do'ry and other social curse$

Search Ne' Invest"ent Sector<

Ne' invest"ent sector is boo"ing rapidly$ *B! should identified those untapped areas of business and invest$ I believe that these steps 'ill be helpful to i"prove the perfor"ance of *ttara Bank !i"ited in the banking sector of Bangladesh$

7.2. .onc"u ion

:roper financial syste" of a country can contribute to'ards the develop"ent of that countryCs econo"y$ In our country& banks have a leading po'er to its financial syste"$ Banking sector of Bangladesh consists of several nationali)ed and private banks$ (hey are doing their activities and highly contribute to the national econo"y$ %"ong the" *ttara Bank !i"ited also "akes significant contribution to the econo"y$ >ith a bulk of 7ualified and e+perienced hu"an resource& *ttara Bank !td can e+ploit any opportunity in banking sector$ It is pioneer in introducing "any ne' products and services in the banking sector of the country$ oreover& in the overall-banking sector& it is un"atched 'ith any other banks because of its 'ide spread branch net'orking throughout the country$ (he bank is perfor"ing general banking& !oan-advance& foreign e+change activities etc& as a result they are "obili)ing the "oney and do 'ell for the econo"y$ 1oreign E+change 2ivision is crucial for any bank$ % bankCs perfor"ance largely depends on this division$ 1oreign E+change activities have an e7ual significance to econo"ic gro'th and develop"ent of the country$ 2uring "y internship in this branch I have found its 1oreign E+change depart"ent to be very efficient? therefore this depart"ent plays a "ajor role in the overall efficiency ; reputation of the Bank as a
#H#

'hole$ %s being the top class bank of Bangladesh 5according to the C% E!S rating6& it has a good reputation and faith to e+porters& i"porters of Bangladesh$ So through this division the banks are contributing to the interest of the country$ %lthough they have so"e li"itations in their services& they are doing tre"endous job for the econo"y$ If they can reduce their li"itation and introduce ne' ideas& they can do better in the banking sector of Bangladesh$ 1inally& I 'ould say that this internship at *B! has increased "y practical kno'ledge of Business %d"inistration and "ake "y learned in "y B% courses$ B% education "ore co"plete and applied$ In this report I got the opportunity to apply various tools and concepts that I

(ppendi+
%ppendi+-H#<
(rend %nalysis< #$ (rend %nalysis on I"port< 1itting Straight line trend by the "ethod of !east s7uares Gear 0HHE 0HHF 0HHI 0H#H 0H## (otal I"port G F9HBA #0I9#4 ##FA0A #F4E99 #IE0FA E#4H40 2eviation Q -0 -# H Z# Z0 H QG -#BF#4H -#0I9#4 HHH #F4E99 4I9AEH 0FHEE# (M$ in "illion Q^ 9 # H # 9 #H G FB9A0 ##9A0I #90BHB #EHBF4 #IFEBH

(he e7uation of Straight line trend is GW aZb+

#H0

GW aZb+ W#90BHBZ0FHEEQ 1or the year 0H#0& + 'ill be Z4 GW #90BHBZ0FHEE]4 W00BF4E

%ppendi+-0<
0$ (rend %nalysis on E+port< 1itting Straight line trend by the "ethod of !east s7uares Gear 0HH E 0HH F 0HH I 0H# H E+port G E#FAA FA9#F FFBA4 ##FA#A 2eviation Q -0 -# H Z# Z0 H QG -#94E#H -FA9#F HHH ##FA#A 4HEA#B #IBIH4 Q^ 9 # H # 9 #H G B90BH F4IAH #H4B9H #0444H #94H0H
(M$ in "illion

0H## #A4EAF A#F#II

(he e7uation of Straight line trend is GW aZb+ GW aZb+ W#H4B9HZ#IBIHQ 1or the year 0H#0& + 'ill be Z4
#H4

GW #H4B9HZ#IBIH]4 W#B0E#H

%ppendi+ -4<
4$ (rend %nalysis on Re"ittance< 1itting Straight line trend by the "ethod of !east s7uares Gear 0HHE 0HHF 0HHI 0H#H 0H## Re"ittance G 4BEFF 9AI09 AB#IH A0B9H E00FA 0B4F0E 2eviation Q -0 -# H Z# Z0 H QG -E4AEB -9AI09 H A0B9H #99AEH EEE#H 5(M$ in "illions6 Q 9 # H # 9 #H G 4E004 99II9 A0EBA BHA4B BF4HE

(he e7uation of Straight line trend is GW aZb+ GW aZb+ WA0EBAZEEE#Q 1or the year 0H#0& + 'ill be Z4 GW A0EBAZEEE#]4 W EBHEF"n$

Correlation and Regression %nalysis

#H9

Correlation< (he statistical tool 'ith the help of 'hich these relationships bet'een t'o or "ore than variables is studied is called correlation$ (he "easure of correlation called coefficient of correlation$ It is denoted by the sy"bol 5r6$ (ypes of Correlation< Correlation is described or classified in several different 'ays $three of the "ost i"portant are< #$ :ositive and negative 0$ Si"ple& partial and "ultiple and 4$ !inear and non linear Regression %nalysis< (he statistical tool 'ith the help of 'hich 'e are in a position to esti"ate the unkno'n values of one variable fro" kno'n values of another variable is called the regression$ >ith the help of regression analysis& 'e are in opposition to find out the average probable change in one variable given a certain a"ount of change in another$ Coefficient of deter"ination< (he ratio of the une+plained variation to the total variation represents the proportion of variation in G that is not e+plained by regression on Q$ Subtraction of this proportion on fro" #$H gives the proportion of variation in G that is e+plained by regression on Q$ (he statistic used to e+press this proportion is called the coefficient of deter"ination and is denoted by R

%ppendi+ H9<
ultiple Regression %nalysis< Regression %nalysis 5on I"port ; :rofit6< !et us& I"port 5Independent variable6 W Q? :rofit 5dependent variable6 W G (M$ in 5"illionHHH6 I"port Q5in :rofit G "illionCHHH6 F9$HBA #0I$9#4 #$BF# 4$#9A EHBB$I0900A #BE9E$E09AE Q^ G^ 0$F0AEB# I$FI#H0A QG #9#$4#40 BA 9HE$HH4F

#HA

FA ##F$A0A #F4$E99 #IE$0FA 0$IF0 9$IHE 9$99A #E$#B #9H9F$#EAB4 44EB#$FAEA9 4FI0#$4E#0 F$FI0409 09$HEFB9I #I$EAFH0A WBA$99AEF 4A4$99#A A IH#$B4#F HF FEB$I4#F 0A W0BFH$40 0444

% = E#4$H40
Re7$ #<

W##HA9B$HA40

Regression e7uation of profit on i"port GWaZb+ W4$HB#0ZH$HH0BQ %WG-b+ WH$HH0B] W4$940-#90$BHB9]H$HH0B W4$HB#0 Re7$0< Correlation on Coefficient W r R W H$HH9H#A Re7$4< Coefficient of 2eter"ination5r6 RW 5H$ HH9H#A6 WH$HH9H#A W H$HH#BN Re7$9< If I"port is QWFHHHH "n G W 4$HB#0ZH$HH0B]FHHHH
#HB

W0##$HB#0"n

%ppendi+-A<
Regression %nalysis 5on E+port ; :rofit6<

E+port5in "illions6 E#$FAA FA$9#F FF$BA4 ##F$A#A #A4$EAF

:rofit G #$BF# 4$#9A 0$IF0 9$IHE 9$99A #E$#B

Q^ A#B4$#9#H0A E0IB$049E09 EFAI$4A99HI #9H9A$FHA00A 04B9#$A00AB

G^ 0$F0AEB# I$FI#H0A F$FI0409 09$HEFB9I #I$EAFH0A WBA$99AEF9

QG #0H$EFF0AA 0BF$B4IB#H 0B9$4B409B AF#$AA4#HA BF4$9A94# W#I#F$EIF0I (M$ in

% = A#F$#II

WAFHHB$HAEI9

!et us& E+port 5Independent variable6 W Q? :rofit 5dependent variable6 W G "illion Re7$ #< Regression e7uation of profit on E+port GWaZb+ W4$#H4HF#ZH$HH4HQ

B WH$HH4H

%WG-b+ WH$HH4H] W4$#H4HF# Re7$0< Correlation on Coefficient W r

#HE

R WH$HHAI Re7$4< Coefficient of 2eter"ination5r6 RW 5H$HHAI6 WH$HHHH4A

Re7$9< If E+port is QW#AHHH"n G W4$#H4HF#ZH$HH4H]#AHHH W9F$#H4HF#"n

%ppendi+-B<
Regression %nalysis 5on Re"ittance ; :rofit6< !et us& Re"ittance 5Independent variable6 W Q? :rofit 5dependent variable6 W G (M$ In "illion Re"ittance5in core6 4B$EI 9A$I0 AB$#I A0$B9 E0$0F W0B4$F0 Re7$#< Regression e7uation of profit on Re"ittance GWaZb+ W4$0#FHZ$HH9#Q
#HF

:rofit G #$BF# 4$#9A 0$IF0 9$IHE 9$99A W#E$#B

Q^ #4A4$4ABI99 0#HF$B9B9 4#AE$4#B# 0EEH$IBIB A009$IEBE W#9B#A$9#0I

G^ 0$F0AEB# I$FI#H0A F$FI0409 09$HEFB9 #I$EAFH0 WBA$99AEF4

QG B#$F9HB0 #99$94HI #BE$AAFA 0AF$4H99 40#$0F9B WIA4$9HAB

B W H$HH9# %WG-b+ W-b$

WH$HH9# ] W4$940-H$HH9#]A0$EB9 W4$0#FH Re7$0< Correlation on Coefficient W r R W H$H#HA Re7$4< Coefficient of 2eter"ination5r6 RW 5H$H#HA6 WH$HHH## WH$HH##N Re7$9< If Re"ittance is QW0HHHH"illion G W4$0#FHZH$HH9#Q W4$0#FHZH$HH9#]0HHHH WFA$0#F"n$

#HI

##H

###